Measure W
Public Safety Tax Fund
of the City of Stockton
Stockton, California
Independent Auditors’ Reports
and Financial Schedules
For the Years Ended June 30, 2022 and 2021
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City of Stockton
Measure W Public Safety Tax Fund
For the Years Ended June 30, 2022 and 2021
Table of Contents
Page
Independent Auditors’ Report ..................................................................................................................................... 1
Schedules of Revenues, Expenditures, and Change in Fund Balances ........................................................................... 5
Notes to the Financial Schedules ..................................................................................................................................... 6
Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of the Financial Schedules Performed in Accordance with Government Auditing Standards ..................................... 7
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INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
of City of Stockton
City of Stockton, California
Report on the Audit of the Financial Statements
Opinion
We have audited the financial schedules of the Measure W Public Safety Tax Fund (the “Fund”) of the City of Stockton, California (the “City”) which comprise the schedules of revenues, expenditures and change in fund balance (the “Financial Schedules”) for the years ended June 30, 2022 and 2021, an d the related notes to the Financial Schedules.
In our opinion, the financial schedules referred to above present fairly, in all materi al respects, the revenues, expenditures and change in fund balance of the Fund of the City, for the years ended June 30, 2022 and 2021 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 accep ted in the United States of America and the standard applicable to financial audits contained in Governmental Auditing Standards , issued by the Comptroller General of the United States. Our responsib ilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Sc hedules section of our report. We are required to be independent of the City and the Fund and to meet our othe r ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe th at 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 Schedules presents onl y the revenues, expenditures and change in fund balance of the Fund and do not purport to, and do not, present fairly th e financial position of the City of Stockton, California, as of June 30, 2022 and 2021, the chan ges in its financial position, or where applicable, its cash flows for the years then ended in accordance with accounting principles gene rally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Schedules
Management is responsible for the pr eparation and fair presentation of the Financial Schedules 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.
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To the Honorable Mayor and the Members of the City Council of Stockton
Stockton, California
2 In preparing the Financial Schedules, ma nagement is required to evaluate wh ether there are conditions or events, considered in the aggregate, that rai se substantial doubt about the Fund’s ab ility to continue as a going concern for twelve months beyond the financial st atement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditors’ Responsibilities for the Audit of the Financial Schedules
Our objectives are to obtain reasonable assurance about whether the Financial Schedules as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ 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 auditing standards generally accepted in the United States of America and Government 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 overri de 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 w ith auditing standards generally accepted in the United States of America and Government 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 res ponsive 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 purpo se of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
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.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
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.
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To the Honorable Mayor and Members of the City Council
of City of Stockton
City of Stockton, California
3 Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards , we have also issued our report dated NEED DATE, 2023, on our consideration of the City’s internal control over the Fund’s financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financ ial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiv eness of the City’s internal control over Fund’s financial reporting or on compliance. That report is an integr al part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over the Fund’s financial reporting and compliance.
Santa Ana, California
NEED DATE, 2023
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City of Stockton
Measure W Public Safety Tax Fund
Schedules of Revenues, Expenditures, and Change in Fund Balance For the Years Ended June 30, 2022 and 2021
See accompanying Notes to the Financial Schedules.
5 Police Fire Total Police Fire Total
REVENUES :
Tax es:
Sales - levied by City 7,412,488$ 7,412,487$ 14,824,975$ 6,947,881$ 6,947,881$ 13,895,762$ Investment income (loss) (117,656) (105,558) (223,214) 2,345 2,104 4,449 Total revenues 7,294,832 7,306,929 14,601,761 6,950,226 6,949,985 13,900,211 EXPENDITURES - PUBLIC SAFETY:
Payroll:
Salaries 2,535,835 2,668,447 5,204,282 2,411,867 2,581,277 4,993,144 Benefits 2,507,590 2,576,580 5,084,170 2,347,114 2,420,994 4,768,108 Total payroll 5,043,425 5,245,027 10,288,452 4,758,981 5,002,271 9,761,252 Equipment, services and supplies:
Tax collection fee 131,673 131,674 263,347 97,543 97,544 195,087 Liability insurance 187,751 205,684 393,435 158,243 173,696 331,939 Vehicle rental charges 367,539 191,852 559,391 319,766 206,529 526,295 Radio rental charges 31,295 24,623 55,918 50,162 22,543 72,705 Materials and services 206,999 16,783 223,782 31,140 83,787 114,927 Fuel charges 129,590 33,257 162,847 81,411 8,669 90,080 Capital outlay/equipment - 877,809 877,809 - 102,603 102,603 Total equipment, services and supplies 1,054,847 1,481,682 2,536,529 738,265 695,371 1,433,636 Total expenditures 6,098,272 6,726,709 12,824,981 5,497,246 5,697,642 11,194,888 NET CHANGE IN FUND BALANCES 1,196,560 580,220 1,776,780 1,452,980 1,252,343 2,705,323 FUND BALANCES , BEGINNING O F YEAR 4,314,020 3,882,878 8,196,898 2,861,040 2,630,535 5,491,575 FUND BALANCES , END O F YEAR 5,510,580$ 4,463,098$ 9,973,678$ 4,314,020$ 3,882,878$ 8,196,898$ 2022 2021
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City of Stockton
Measure W Public Safety Tax Fund
Notes to the Financial Schedules
For the Years Ended June 30, 2022 and 2021
6 Note 1 – Summary of Significant Accounting Policies
A. Description of Reporting Entity
The Measure W Public Safety Tax Fund (Fund) of the C ity of Stockton, California (the “City”) accounts for the Measure W Taxes collected and spent fo r police and fire purposes. The Fund is included in the basic financial statements of the City. These financial schedules are intended to present only the revenues, expenditures and change in fund balance of the Fund of the City. It does not present fairly the financial position of the Fund or the City, nor the change in financial position of the City in accordance with accounting principles generally accepted in the United States of America.
The accounting policies of the Fund conform to accounting principles generally accepted in the United States of America as they are applicable to governmental un its. The Governmental Accounting Standards Board (the “GASB”) is the standard setting body for establishing governmental accounting and financial reporting principles.
The more significant policies reflected in the financial schedules are summarized below.
B. Basis of Presentation, Measurement Focus and Basis of Accounting
The activities of the Fund are recorded in a special revenue fund and accounted for using the modified accrual basis of accounting. Special revenue funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specified purposes. Under the modified accrual basis of accounting, revenues are recognized wh en they become susceptible to accrual (i.e. both measurable and available). Measurable means that the amount of the transaction can be determined. Available means the funds are collectible within 90 days after yea r-end. Expenditures of governmental funds are generally recognized when the related fund liability is incurred.
C. Sales and Use Tax – Measure W
The people of the City approved Measure W on November 2, 2004, which authorized Ordinance No. 038-04 CS that added a new Part of Chapter 8 of the Stockton Municipal Code. This Ordinance provided authorization for an additional one-quarter of one percent transaction and use ta x, the proceeds of which sh all be used to maintain current police and fire protection service levels and to contract with the Stat e of California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of the tax.
D. Allocation of Revenue and Expenditures between Police and Fire Department
Tax revenue collected is distributed evenly between th e Police and Fire Department. Investment expense and investment income are allocated between the Police and Fire Depart ment based on balance reduced by expenditures incurred in each department during the year . All other expenditures are recorded based on actual amount incurred in respective department.
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REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL SCHEUDLES PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditors’ Report
To the Honorable Mayor and Members of the City Council
of the City of Stockton
City of Stockton, California
We have audited in accordance with the auditing standards generally accepted in the United States of America and the standard applicable to the financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the schedules of revenues, e xpenditures and change in fund balance (the “Financial Schedules”) of the Measure W Public Safe ty Tax Fund (the “Fund”) of the City of Stockton , California (the “City”), for the years ended June 30, 2022 and 2021, and the related notes to the Financial Schedules, and have issued our report thereon dated NEED DATE, 2023. Our report contained an explanatory paragraph describing that the schedules only presents the revenues, expenditures and change in fund balance of the Fund and not the City.
Report on Internal Control Over Financial Reporting
In planning and performing our audits of the Financial Schedules, we considered the City’s internal control over the Fund’s financial reporting (“internal control”) as a basis for designing the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the Financial Schedules, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control over the Fund’s financial reporting. Accordingly, we do not express an opinion on the effectiveness of City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assi gned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Fund’s financial schedules will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is le ss severe than a material we akness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over the Fund’s Financial Schedules was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations , during our audits we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified.
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To the Honorable Mayor and Members of the City Council
of City of Stockton
City of Stockton, California
8 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Financial Schedules are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contra cts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of Financial Schedules amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance as they relate to the Fund. This report is an inte gral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Santa Ana, California
NEED DATE, 2023
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