HomeMy WebLinkAbout2026-02-10; City Council; 02; City of Carlsbad Fiscal Year 2024-25 Annual Financial Audit ResultsCA Review CKM
Meeting Date: Feb. 10, 2026
To: Mayor and City Council
From: Geoff Patnoe, City Manager
Staff Contact: Roxanne Muhlmeister, Assistant Finance Director
roxanne.muhlmeister@carlsbadca.gov, 442-339-2417
Subject: City of Carlsbad Fiscal Year 2024-25 Annual Financial Audit Results
Districts: All
Recommended Action
Receive and file a report on the city’s fiscal year 2024-25 annual financial audit results.
Executive Summary
The City of Carlsbad is required by the State of California, under California Government Code
Section 12410.5(b), to be audited annually by a certified public accountant or public
accountant, licensed by, and in good standing with, the California Board of Accountancy. The
city’s annual financial audit for fiscal year 2024-25 resulted in an unmodified opinion, with no
material weaknesses in internal controls or material instances of noncompliance identified.
Explanation & Analysis
The Finance Department is responsible for the stewardship of the city’s assets and liabilities,
helping to ensure accurate and timely information which supports the city in making sound
financial decisions. An important component of this stewardship is the completion of the city’s
annual financial audit by a certified public accounting firm.
Results of the Fiscal Year 2024-25 Financial Audit
City staff selected and issued a five-year contract to the CPA firm Lance, Soll & Lunghard LLP in
February 2022 to perform the city’s annual financial audit. The role of the external auditor is to
express an opinion as to whether the city’s financial statements are materially misstated. The
external auditors follow the Government Auditing Standards that have been created by the
American Institute of Certified Public Accountants.
The fiscal year 2024-25 audit began in April 2025 with the external auditors conducting interim
fieldwork, and the audit concluded on Dec. 23, 2025, when the auditors issued their opinion on
the city’s financial statements. The city received an “unmodified” opinion, which means it is the
auditor’s judgment that the city’s financial statements and footnotes are fairly stated, without
any material exceptions, and in compliance with the generally accepted accounting principles,
known as GAAP.
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The auditor did not identify any material weaknesses in internal controls nor any material
instances of noncompliance.
The Independent Auditor’s Report is part of the city’s
Annual Comprehensive Financial Report, which is provided
as Exhibit 1. This annual report also includes further
discussion and analysis of the city’s finances and basic
financial statements.
Transparency
The city publishes quarterly financial status reports on the
city’s website which highlight the city’s General Fund, Water
Fund, Wastewater Fund and Golf Course Fund revenues and
expenditures for the fiscal year. City staff also provide the
public and City Council with quarterly economic and
financial reports and presentations at City Council meetings
throughout the fiscal year. A brief description of these
updates is provided below.
Quarterly financial status reports
Quarterly financial reports provide unaudited details of city’s General Fund, Water Fund,
Wastewater Fund and Golf Course Fund revenues and expenditures for the fiscal year.
These quarterly reports can be found on the city’s website at
carlsbadca.gov/departments/finance/financial-reports.
Quarterly economic and financial update presentations to City Council:
• First quarter of fiscal year 2024-25, presented Nov. 12, 2024, covered the period
of July through September 2024
• Second quarter of fiscal year 2024-25, presented Feb. 25, 2025, covered the
period of October through December 2024
• Third quarter of fiscal year 2024-25, presented May 13, 2025, covered the period
of January through March 2025
• First quarter of fiscal year 2025-26, presented Nov. 18, 2025, covered the period
of July through September 2024
Approval of fiscal year 2024-25 budget carryforward requests and appropriation of
funds to fiscal year 2025-26
In addition to requesting carryforward funding for fiscal year 2024-25, the Sept. 23,
2025, carryforward report provided an unaudited summary of the financial results of
fiscal year 2024-25 for the city’s General Fund. (Carryforward budget items carry
unspent funds budgeted to have been spent in one fiscal year into the budget for the
following fiscal year.)
Fiscal Analysis
This is an informational item with no fiscal impact.
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Next Steps
The city’s next financial audit, for fiscal year 2025-26, is scheduled to commence with Lance,
Soll & Lunghard in early Spring 2026. The audit is expected to conclude by the end of December
2026.
Environmental Evaluation
The proposed action is not a “project” as defined by California Environmental Quality Act
Section 21065 and CEQA Guidelines Section 15378(b)(5) and does not require environmental
review under CEQA Guidelines Section 15060(c)(3) and 15061(b)(3) because the proposed
action to report on the annual financial audit and report is an organizational or administrative
government activity that does not involve any commitment to any specific project which may
result in a potentially significant physical impact on the environment. Any subsequent action or
direction stemming from the proposed action may require preparation of an environmental
document in accordance with CEQA or the CEQA Guidelines.
Exhibits
1. City of Carlsbad’s fiscal year 2024-25 Annual Comprehensive Financial Report
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FINANCIAL REPORT
ANNUAL COMPREHENSIVE
Fiscal year ended June 30, 2025
Exhibit 1
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AAnnual Comprehensive
Financial Report
Fiscal Year Ended
June 30, 2025
Prepared by the
Finance Department
1635 Faraday Ave.
Carlsbad, CA 92008
www.carlsbadca.gov
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Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2025
Table of Contents
Introductory Section Page
Letter of Transmittal i
Certificate of Achievement for Excellence in Financial Reporting xx
Location Map xxi
List of City Officials xxii
Organization Chart xxiii
Financial Section
Independent Auditor’s Report 1
Management’s Discussion and Analysis 5
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 33
Statement of Activities 34
Fund Financial Statements
Balance Sheet – Governmental Funds 38
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 39
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 40
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 41
Statement of Net Position – Proprietary Funds 42
Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds 43
Statement of Cash Flows – Proprietary Funds 44
Statement of Fiduciary Net Position – Fiduciary Funds 46
Statement of Changes in Fiduciary Net Position – Fiduciary Funds 47
Notes to the Financial Statements 49
Required Supplementary Information
Budgetary Comparison Schedule
General Fund 95
Required Pension and Other Postemployment Benefits Schedules
Schedule of Changes in the Net Pension Liability and Related Ratios-Miscellaneous Plan 96
Schedule of Changes in the Net Pension Liability and Related Ratios-Safety Plan 98
Schedule of Changes in the Net OPEB Liability and Related Ratios 100
Schedule of Plan Contributions 102
Notes to Required Supplementary Information 103
Combining and Individual Fund Statements and Schedules
Combining Balance Sheet –Nonmajor Governmental Funds 106
Combining Statement of Revenues, Expenditures and Changes in Fund Balances –
Nonmajor Governmental Funds 112
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Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2025
Table of Contents
Financial Section (continued) Page
Budgetary Comparison Schedules
Affordable Housing 118
Community Development Block Grant 119
Donations 120
Financing Districts 121
Habitat and Agricultural Management 122
Other Special Revenue Funds 123
Police Grants and Asset Forfeiture 124
Federal Rental Assistance Program 125
Tyler Court Apartments 126
Opioid Settlements 127
Housing and Homeless Grants 128
Community Facilities District #1 129
Infrastructure Replacement 130
Assessment and Other Districts 131
Gas Tax 132
General Capital Construction 133
Grants and Other Capital Projects 134
Park Development 135
Planned Local Drainage Facilities 136
Public Facilities Construction 137
Sales Tax/TransNet 138
Traffic Improvement Projects 139
Technology Investment Capital 140
Combining Statement of Net Position – Nonmajor Proprietary Funds 141
Combining Statement of Revenues, Expenses and Changes in Fund Net Position –
Nonmajor Proprietary Funds 142 Combining Statement of Cash Flows – Nonmajor Proprietary Funds 143
Combining Statement of Net Position – Internal Service Funds 144
Combining Statement of Revenues, Expenses and Changes in Fund Net Position –
Internal Service Funds 145
Combining Statement of Cash Flows – Internal Service Funds 146
Combining Statement of Fiduciary Net Position – Custodial Funds 147
Combining Statement of Changes in Fiduciary Net Position – Custodial Funds 148
Statistical Section
Financial Trends
Net Position by Component 150
Changes in Net Position 152
Fund Balances of Governmental Funds 156
Changes in Fund Balances of Governmental Funds 158
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Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2025
Table of Contents
Statistical Section (continued) Page
Revenue Capacity
General Governmental Tax Revenues by Source 160
Water and Wastewater Rates 161
Assessed Value of Taxable Property 163
Direct and Overlapping Property Tax Rates 164
Principal Property Taxpayers 166
Property Tax Levies and Collections 167
Debt Capacity
Ratios of Outstanding Debt by Type 169
Schedule of Direct and Overlapping Bonded Debt 170
Direct and Overlapping Debt 172
Legal Debt Margin Information 174
Pledged-Revenue Coverage 176
Demographic and Economic Information
Demographic and Economic Statistics 178
Principal Employers 181
Operating Information
Authorized Full Time City Government Employees by Program Area 182
Operating Indicators by Function/Program 184
Capital Asset Statistics 186
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IIntroductory Section
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Administrative Services
Finance Department 1635 Faraday Avenue Carlsbad, CA 92008 442-339-2430 t
www.carlsbadca.gov
December 23, 2025
Honorable Mayor, City Council,
and Residents of the City of Carlsbad
City of Carlsbad
Carlsbad, CA 92008
LETTER OF TRANSMITTAL
FISCAL YEAR 2024-25 ANNUAL COMPREHENSIVE FINANCIAL REPORT
Honorable Mayor, City Council, and Residents:
I am pleased to present the fiscal year 2024-25 Annual Comprehensive Financial Report for the City of Carlsbad
(“city”). The information found in this report is provided by management to the City Council and the public to assist
those interested in understanding the fiscal condition of the city as of June 30, 2025.
Management assumes full responsibility for the completeness and reliability of the information contained in this
report, based upon a comprehensive framework of internal controls that has been established for this purpose.
Because the cost of internal controls should not outweigh its benefits, the city’s comprehensive framework of internal
controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements
will be free from material misstatement.
State law and the Carlsbad Municipal Code require that an annual financial report is prepared. This report fulfills
that obligation. It has been prepared in conformity with generally accepted accounting principles (GAAP) and with
the financial reporting requirements prescribed by the Governmental Accounting Standards Board (GASB). The
independent auditing firm, LSL, LLP, has issued an unmodified opinion on the city’s financial statements for the
fiscal year that ended June 30, 2025. The independent auditor’s report is located at the front of the financial section
of this Annual Comprehensive Financial Report.
Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides
a narrative introduction, overview and analysis of the basic financial statements. The MD&A complements this letter
of transmittal and should be read in conjunction with it.
As a recipient of federal and state financial assistance, the city is required to have a “Single Audit” performed by an
independent audit firm. The Single Audit is designed to meet the special needs of federal grantor agencies. The
standards governing Single Audit engagements require that the independent auditor report not only on the fair
presentation of the financial statements, but also on the audited government’s internal controls and compliance with
legal requirements, with special emphasis on internal controls and legal requirements involving the administration
of federal awards. These reports will be completed in early 2026 and made publicly available on the city’s website
in the city’s separately issued Compliance Reports and Other Financial Information.
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Profile o f the Cit y of Car lsbad
The City of Carlsbad is situated in north San Diego
County where a great climate, beautiful beaches and
lagoons, and abundant natural open space combine
with world class resorts, family attractions, well-planned
neighborhoods, a diverse business sector and a
charming village atmosphere to create the ideal
California experience.
CITY GOVERNMENT
Incorporated in 1952, the City of Carlsbad is a municipal corporation following the council-manager form of
government. The City Council, the city’s legislative body, defines the policy direction of the city. The city
manager oversees the day-to-day operations of the city. The City of Carlsbad also has an elected City
Clerk and City Treasurer. The City Council appoints the City Manager and City Attorney.
Districts
The City Council consists of an elected mayor and four elected council members. Each serves a four-year term. In
2017, the city switched to a system where City Council members are elected by district instead of at large or
citywide.
116,000
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Charter City
There are two types of cities in California: charter and general law. Charter cities follow the laws set forth in the
state’s constitution along with their own adopted “charter” document. General law cities follow the laws set forth by
the state legislature.
In 2008, City of Carlsbad residents overwhelmingly voted to approve the charter city measure. The charter gives
the City of Carlsbad more flexibility on such issues as purchasing and contracting. Certain affairs, such as traffic
and vehicle regulation, open and public meetings laws, certain planning and environmental laws, and eminent
domain, remain matters of state authority even as a charter city.
This report includes financial statements for the City of Carlsbad, the Housing Authority of the City of Carlsbad, the
Carlsbad Public Financing Authority, and the Carlsbad Municipal Water District. Through these entities, Carlsbad
provides a full range of services to its citizens and customers including:
• Fire and paramedic services
• Police protection services
• Development services
• Library and arts programs
• Housing and homeless services
• Recreation programming for all ages
• Park and recreation areas
• Street construction and maintenance
• Water delivery system
• Wastewater system
In addition to the full range of services normally associated with a municipality, Carlsbad offers programs to help
residents and businesses. The city’s Housing Authority administers federal housing assistance to approximately
630 low-income households in Carlsbad, and older residents can take advantage of Carlsbad’s senior citizen
programs.
Budget Process
The City Council sets the overall policy direction for the City of Carlsbad and helps staff prioritize programs, projects
and services to support that direction. Public input plays a critical role in setting both the long-range policy direction
of the city and decisions about day-to-day spending. The city operates on a fiscal year that begins July 1. City staff
in all departments prepare individual budgets for their functional areas. These budgets are then combined into an
overall city budget that is presented to the City Council each spring for review and input.
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The City Council has the authority to approve the annual budget and may amend it during the year if needed. The
legal level of budgetary control is at the fund level, which means spending in each different type of fund may not
exceed the budgeted amount without City Council approval. Budgetary control for the city is maintained through its
accounting systems. Quarterly reports summarizing the results of operations for the city’s more significant funds
are provided to the City Council and the public on the city’s website.
T he City Council’s 5 -Year Strategic Plan
The City of Carlsbad is guided by a 5-Year Strategic Plan, which was adopted by the City Council in 2022. The plan
serves as a road map by identifying specific, measurable objectives to be achieved during the five-year timeframe.
The 5-year Strategic Plan includes high level goals, objectives, projects and service commitments that support the
Carlsbad Community Vision.
Community Character
Maintain Carlsbad’s unique community character and connectedness
Quality of Life and Safety
Prioritize the safety and well-being of the community
Sustainability and the Natural Environment
Protect the environment and natural resources
Economic Vitality
Foster a healthy local economy
Organizational Excellence and Fiscal Health
Be a model for effective and efficient local government
Core services
The city fulfills its purpose and supports the 5-Year Strategic Plan goals every day by providing core services and
functions of municipal government at a very high level of quality. From a resource perspective, these ongoing
services represent the vast majority of the city’s annual budget.
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Economic and Fis cal Issue s Facing the City
At the time of developing the Fiscal Year 2024-25 Proposed Budget, the nation, state and city had been facing the
lingering effects of unprecedented inflationary levels challenging the economy. In the City of Carlsbad, high
inflationary levels have actually boosted some of the city’s revenue sources like sales and transient occupancy tax,
but the city’s expenditures have also been impacted by inflation. The Federal Reserve has taken swift action to
combat the rise in inflation by increasing interest rate targets. Although it is anticipated the Federal Reserve will
begin to reduce target rates toward the end of calendar year 2024 and into 2025, we have yet to see inflation levels
return to more historically normal levels. As the city moves forward, and as the level of disposable income, personal
savings and pent-up demand continues to diminish as a result of these sustained inflationary levels, uncertainty
about the city’s revenues keeping pace with its expenditures increases.
Prior to the pandemic, the city boasted a low unemployment rate of 2.9%. At the height of the pandemic,
unemployment spiked to 13.8%. Over the past three years, the unemployment rate has had some correlation to the
prevalence of COVID-19 in the region. However, with the pandemic’s economic impacts behind us, unemployment
rates settled between 2% and 3% during calendar year 2022 and increased to 3.5% in 2023. Through the first
quarter of calendar year 2024, macro-trends in the tech industry pushed unemployment up nationally, but the labor
market is still considered to be very tight. As of March 2024, the unemployment rate was 5.3% at the state level
and 4.4% at the county and local level.
National interest rates, which dropped significantly during the pandemic, have eclipsed pre-pandemic rates for all
categories. One-year rates are currently at 5.10%, ten-year rates are currently at 4.48%, and 30-year rates are at
4.64%. Following the Federal Reserve’s increase in interest rate targets all the way to 5.25%-5.50%, inflation has
decreased but not to desired levels of 2%. The Federal Reserve is expected to begin reducing rate targets later this
calendar year and into 2025. As of May 2024, local inflation had decreased year-over-year from 5.2% to 3.2%.
Maintaining good fiscal health must remain a top priority. Meeting this objective preserves the city’s ability to
continue providing important programs and services to the community. Past economic challenges and prudent
financial planning have provided opportunities for developing solutions to address lost revenues while preserving
vital services. The positive effect of inflation on some of the city’s revenue sources have been significant but is
considered one-time and something to be very closely monitored moving forward. As inflation is likely to decline in
the future, so will revenue growth. Disciplined spending and long-term financial planning remain critical to ensuring
the future sustainability of important city programs and services.
Long-T erm Financ ial Plann ing
Strategic planning begins with determining the city's fiscal capacity based upon long-term financial forecasts of
recurring available revenues and future financial obligations. Prior to the adoption of the annual budget, the finance
department will prepare a Ten-Year Financial Forecast (Forecast) that evaluates known internal and external issues
impacting the city's financial condition. The methodology for preparing the Forecast can be found in the appendices
of this document. The Forecast is intended to help the city:
• Attain and maintain financial sustainability,
• Have sufficient long-term information to guide financial decisions,
• Have sufficient resources to provide programs and services for the stakeholders,
• Identify potential risks to on-going operations in the long-term financial planning process and communicate
these risks on an annual basis,
• Establish mechanisms to identify early warning indicators, and
• Identify changes in expenditure or revenue structures needed to deliver services or to meet the goals
adopted by the City Council.
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It is important to stress that the Forecast is not a budget. The Forecast does not dictate expenditure decisions, but
rather highlights the need to prioritize the allocation of the city’s limited resources to ensure the continuation of core
city services. The purpose of the plan is to provide the City Council, key stakeholders and the public an overview
of the city’s fiscal health based on various financial and service level assumptions over the next ten years. It also
allows for the discussion of necessary steps to be initiated during the development and implementation of future
budgets. The Forecast is intended to look beyond the annual budget cycle and serve as a planning tool to bring a
long-term perspective to the budget process. The Forecast also takes into consideration City Council policies that
need to be met on an annual basis including General Fund reserve guidelines, pension funding guidelines, etc.
Should projected expenditures exceed projected revenues in any given year, the City Manager will need to identify
steps to mitigate the shortfalls prior to presenting a balanced budget to the City Council for consideration during the
annual budget development process.
It should be noted that the Forecast is a snapshot in time and will change as additional information is made available
and incorporated into the fiscal projections. Inflation and the uncertainty associated with the economy has increased
the volatility of projecting future revenues.
The city prepares a long-term financial model for both capital and operating needs. It is imperative that the city plan
for the impacts of development, the construction and operation of new public facilities, and planning resources
needed to build them. The city prepares a ten-year operating forecast for the General Fund, a five-year Strategic
Digital Transformation Investment Program, and a fifteen-year Capital Improvement Program. As part of the new
Strategic Digital Transformation Investment Program and the Capital Improvement Program, the city annually
calculates the amounts needed to pay for the projects and anticipated operating budget impacts. In this way, the
city can anticipate the effects of development from both a capital and an operating perspective.
One important initiative the city has undertaken to ensure its financial health is the development of an Infrastructure
Replacement Fund. With this fund, the city sets aside a portion of General Fund revenues on an annual basis for
major maintenance and replacement of its infrastructure. Much of the city’s infrastructure is relatively new; thus, the
city is just now experiencing the impact of maintenance requirements. By setting aside funds now, the city’s
residents can be assured that the proper maintenance and replacement will be performed, as needed, on streets,
parks and many facilities for which the city is responsible.
Employee retirement costs continue to require ongoing prudent fiscal management. The City Council issued a
pension funding policy to codify its commitment to ensure that resources will be available to fulfill the city’s
contractual retirement promises to its employees, and to minimize the chance that the funding of these benefits will
interfere with providing essential services to the community. The policy outlines a funding discipline to ensure that
adequate resources will be accumulated in a systematic and disciplined manner to fund the long-term cost of
benefits to the plan participants and annuitants. Overall funding levels of the city’s plans are reviewed annually to
ensure the city’s funding level remains at least 80% – the city’s minimum targeted level. While this enhances the
city’s funding position, risks remain in the system. Required employer contributions will continue to increase over
the next few years and actual contribution increases could exceed expectations if future investment return rates or
other factors are unfavorable.
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Revenue and expenditure growth projections
The city’s Forecast considers the annual growth of all currently known elements of city revenues and expenditures.
Projecting revenues is particularly difficult when considering rising inflation and impacts to consumer demand. When
forecasting expenditures, some of the major factors considered are rising healthcare and workers’ compensation
costs, underperforming pension programs, and general inflation in both personnel and operating
expenditures. Currently, the city projects expenditure growth will outpace revenue growth in the near future. To
support the increase in ongoing costs, the city will need to consider alternative options, such as ways to increase
economic activity that will drive sustainable increases in the city’s current revenue base, an expansion of the city’s
revenue base, or a reduction of the city’s current service offerings and associated costs.
FINANCIAL MANAGEMENT POLIC IES
Revenue Policies
The development and maintenance of balanced and reliable revenue streams will be the primary revenue objective
of the city. Efforts will be directed to optimize existing revenue sources while periodically reviewing potential new
revenue sources. One method to maximize existing revenue sources is to promote a healthy business climate.
Revenue estimates will be prepared on an annual basis during the preparation of the budget and major revenue
categories will be projected on a ten-year basis. Revenues will be estimated conservatively using accepted
standards and estimates provided by the state and other governmental agencies. Alternative revenue sources will
be periodically evaluated to determine their applicability to meet identified city needs. Sources of revenue will be
evaluated and modified as necessary to assure a diversified and growing revenue base that improves the city’s
ability to handle fluctuations in individual revenue sources.
Revenues from “one-time” or limited duration revenue sources will not be used for ongoing operating expenses.
Fees and charges for services will be evaluated and, if necessary, adjusted annually to ensure that they generate
sufficient revenues to meet service delivery costs. The city will establish user charges at a level generally related
to the full cost (operating, direct, indirect and capital costs) of providing the service, unless the City Council
determines that a subsidy from the General Fund is in the public interest, in accordance with the city’s cost recovery
policy for fees and charges for services. The city will also consider market rates and charges levied by other
municipalities of similar size for like services in establishing rates, fees and charges. Enterprise and internal service
funds will aim to be self-supporting.
Expenditure and Budget Policies
Major expenditure categories will be projected on a ten-year basis. The city will operate on a current funding basis.
Expenditures will be budgeted and controlled so as not to exceed current revenues plus the planned use of any
accumulated fund balances. Annual budgeted operating expenditures shall not exceed annual operating revenues,
including budgeted use of reserves, unless directed by the City Council.
The City Manager shall prepare and submit to the City Council annually a proposed operating, strategic digital
transformation investment program and capital improvement program budget and the budgets will be adopted by
June 30 of each year. Budget status reports are prepared quarterly and posted on the city’s website. Because the
budget is based on estimates, from time to time, it is necessary to make adjustments to finetune the line-items
within it. Various levels of administrative control are utilized to maintain the budget’s integrity. Program managers
are accountable for the line-item level of control of their individual program budgets. Department heads are
accountable for the fund level of control for funds within their departments. The City Manager is accountable for the
fund level of control for funds across departments, up to $100,000. The Finance Department oversees the general
level of accountability related to budgetary integrity through systematic checks and balances and various internal
controls.
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City Council Policy 87, General Fund Surplus Policy outlines the use of surplus funds resulting from unrestricted
General Fund actual revenues exceeding total actual expenditures, encumbrances, and commitments for a given
fiscal year. It is the intent of the city to use all surplus funds generated to meet reserve policies, and the reduction
or avoidance of long term liabilities. The city will not use year-end surplus funds to fund ongoing operations unless
otherwise approved by the City Council.
The city will use surplus funds to replenish any General Fund deficiencies, up to the minimum level as set forth in
City Council Policy 74, General Fund Reserve Policy and then any pension liability deficiencies, as defined in
City Council Policy 86, Pension Funding Policy.
The City Manager is authorized to approve the carryforward of any unencumbered and unspent budget for a
particular item equal to or less than $100,000 into the following fiscal year. These items will be one-time
expenditures and not for ongoing services, programs or personnel. Any remaining surplus funds in excess of
reserve and pension liability deficiencies and items equal to or greater than $100,000 will be brought forward for
City Council approval.
The city adheres to long-range financial planning, which forecasts revenues and expenditures over a long-term
period, using assumptions about economic conditions, future spending scenarios and other salient variables.
Financial planning allows the city to execute overall strategies to support the process of aligning financial capacity
with long-term service objectives. Financial forecasts are updated at least once a year, or more often if unexpected
changes in economic conditions or other unforeseen circumstances exist. Any significant changes will be reported
to the City Manager and the City Council. Otherwise, these financial forecasts will be used as a tool during the
development of the annual budget process and to set utility rates as needed.
Reserve Policies
The city formally mandates the levels at which reserves shall be maintained for the General Fund and informally
sets minimum target levels for the enterprise and internal service funds.
City Council Policy 74, General Fund Reserve Policy was most recently updated and approved by the City Council
in June 2019. The purpose of the policy is to establish a target minimum level of designated reserves in the General
Fund to:
• Reduce the risk of financial impacts resulting from a natural disaster or other catastrophic events;
• Respond to the challenges of a changing economic environment, including prolonged downturns in the
local, state or national economy; and
• Demonstrate continued prudent fiscal management and creditworthiness.
The city commits to maintaining General Fund reserves (the term reserve refers to any unassigned fund balance)
at a target of 40% of General Fund annual operating expenditures. The total reserve level will be calculated using
the prior year’s adopted General Fund budgeted expenditures.
At the discretion of the City Council, reserve levels in excess of the 40% target requirement may be used for one-
time opportunity cost purposes. Reserve funds will not be spent for any function other than the specific direction in
the annual budget or by a separate City Council action.
As a general budget principle concerning the use of reserves, the City Council decides whether to appropriate funds
from reserves. Reserve funds will not be spent for any function other than the specific purpose of the reserve
account from which they are drawn without specific direction in the annual budget or by a separate City Council
action.
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The City Council approved City Council Policy 96, Utilities Reserve Policy in March 2023 to establish guidelines to
ensure the fiscal stability of the potable water, recycled water and wastewater funds and provide guidance to staff
in the management of each utility’s finances. These funds will target a reserve funding level of 100% of annual debt
service costs, 120 days of operating costs, and 1% of system replacement value in emergency capital. The
Wastewater Fund will target a reserve funding level of 50% of the five-year rolling average of annual spending on
capital improvement projects while the Potable and Recycled Water funds will target 100% of this average. Also,
the Wastewater Fund will target a reserve of 10% of rate revenues while the Potable and Recycled Water funds will
target a reserve of 20% of rate revenues to provide a source of funds to smooth rates or avoid rate increases in the
event of short- or mid-term disruption to revenues such as drought-related demand reductions. The city or the
Carlsbad Municipal Water District’s potable water, recycled water and wastewater utilities will treat minimum reserve
levels as practical reserve floors and allow reserves to increase or decrease as necessary within the minimum and
target levels prescribed above.
The city’s Workers’ Compensation and Risk Management (General Liability) funds will maintain minimum reserves
equal to the estimated outstanding claims as calculated by a third-party administrator. Additional reserve amounts
may be set aside as deemed appropriate based on third-party actuarial studies completed at two-year intervals.
During the annual budget process, the target confidence level will be compared with the projected fund balance of
each fund, and if the projected fund balance is greater than or lesser than the target, a plan to adjust the fund
balance will be considered, using either or both increasing revenues through interdepartmental charges and one-
time cash contributions from those funds contributing to the shortfall.
The Information Technology Asset Replacement and Vehicle Asset Replacement funds shall maintain minimum
reserve levels defined as the amount of accumulated depreciation of capitalized assets based on the original cost
of each capitalized asset and up to a maximum reserve level defined as the accumulated depreciation based on
the estimated replacement cost of each capitalized asset.
Investment Policy
The city has established a formal Investment Policy. It is the policy of the City of Carlsbad to invest public funds not
required for immediate day-to-day operations in safe, liquid and medium-term investments that shall yield an
acceptable return while conforming to all California statutes. It is intended that the policy cover the investment
activities of all contingency reserves and inactive cash under the direct authority of the city. Investments of the city
and its component units will be made on a pooled basis; however, investments of bond proceeds will be held
separately if required.
Pension Funding Policy
The city’s City Council Policy 86, Pension Funding Policy embodies funding and accounting principles to ensure
that resources will be available to fulfill the city’s contractual promises to its employees. The policy objectives include
using actuarially determined contributions, or ADC, provided by CalPERS to fund the full amount of the ADC each
year, maintaining no less than a combined minimum 80% funded ratio, and demonstrating accountability and
transparency by communicating all information necessary for assessing the city’s progress toward meeting its
pension funding objectives.
In the event the city is unable to meet the minimum combined pension funded ratio of 80% with current resources
(i.e., without borrowing or using reserves), the Finance Director will identify a reasonable period to return to a
minimum 80% funded ratio status.
ixFeb. 10, 2026 Item #2 Page 21 of 226
In an effort to mitigate pension rate volatility, manage the city’s funded status and enhance local control of city
funds, the city established a Section 115 Pension Trust. The city’s Section 115 Pension Trust is a tax-exempt
investment tool that allows local governments to pre-fund pension and retiree health costs. Once contributions are
placed into the trust, assets from the trust can only be used for retirement plan purposes. Withdrawals may be made
to either reimburse the city for retirement system contributions or to directly pay CalPERS. Benefits of the trust
include (1) local control over assets, (2) pension rate stabilization, (3) potential for higher investment return than
General Fund, and (4) diversification from CalPERS’ investments. Contributions from the General Fund are invested
in accordance with City Council Policy 98, Pension Trust Investment Policy. In an effort to maintain a combined
funded status of 80% and to fund the costs associated with a potential reduction in CalPERS’ discount rate, the
trust is scheduled to receive a total of $40 million in principal contributions over five fiscal years, and assuming an
annual rate of return of 6.25%, the trust is projected to accumulate sufficient assets to fund a potential discount rate
reduction from the current 6.8% to 6.25%.
Long Term General Fund Capital Funding Policy
The city’s City Council Policy 91, Long Term General Fund Capital Funding Policy ensures the needs of the city are
met and demonstrates continued prudent fiscal management by providing a funding source for long-term, large
value capital purchases. Many city assets demand large capital expenditures, examples include roads, building,
parks and information technology infrastructure. The city funds the General Fund portion of these necessary
investments by adopting an annual budget that includes a transfer from the General Fund to one or more of the
city’s long-term capital funds. These long-term capital funds include the General Capital Construction Fund, the
Infrastructure Replacement Fund and the Technology Investment Capital Fund. The city commits to targeting a
transfer to the city’s long-term capital funds of 6% of budgeted General Fund revenues. The transfers are proposed
during the annual budget process or on an as needed basis for the City Council’s consideration.
Full versions of these policies and other City Council policies are available on the city’s website at
www.carlsbadca.gov/city-hall/laws-policies/council-policies.
Strategic Dig ital T ransformation Investment Pro gr am
The Strategic Digital Transformation Investment Program, or SDTIP, is a comprehensive approach to planning for
and funding digital transformation efforts throughout the city. Several documents inform this program, including the
City Council-approved Connected Carlsbad: An Inclusive City Innovation Roadmap, the Internal Digital Information
Network Action Plan and the Information Technology Strategy, which are complemented by a five-year projected
roadmap of digital transformation investments. The SDTIP is the strategic plan for technology and digital
transformation combined with project descriptions, costs, funding sources and timelines. The purpose of this
program is to provide for an annual investment strategy, not a commitment for spending, that outlines a five-year
expenditure plan for future digital transformation and technology projects and the corresponding revenues
necessary to pay for them.
Connected Carlsbad: An Inclusive City Innovation Roadmap
In January 2019, city staff presented Connected Carlsbad: An Inclusive City Innovation Roadmap, designed to
provide a high-level, organized guide outlining the principles that matter to the city in creating a more connected
community. This roadmap and its associated action plan were based on a combination of items, including:
• City Council approved projects,
• existing city documents,
• previous Information Technology assessments and interviews with departments, and
• a global scan of other cities and best practices that have emerged from leading smart city thinkers and
Carlsbad-specific community engagement.
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The Strategic Digital Transformation Investment Program expands on the Connected Carlsbad Roadmap to include
a strategy for evaluating and prioritizing projects and a five-year investment roadmap that includes estimated costs
and timelines. This new investment program continues to be organized into the five primary goal areas approved
by City Council in Connected Carlsbad, listed below.
• Pursue Communitywide Digital Transformation focuses on the foundational elements, including
connectivity, up-to-date hardware and software, and a robust security strategy while providing an
aspirational vision for the future.
• Build Capacity for Data-Driven Government focuses on the policies, procedures and staffing necessary for
the city to fully capture the value of emerging models of data analytics.
• Foster a Vibrant Civic Engagement Culture builds upon the first two goals with a human-centered
perspective that an engaged city that uses data and technology in a way that respects people and their
privacy will support a vibrant culture where residents, organizations and businesses are invested in their
community and its future.
• Enhance Accessibility and Transparency recognizes that open government and approaching problem-
solving from an accessibility perspective leads to better outcomes for all.
• Promote Safety and Sustainability through Connectivity leads to understanding the interconnected nature
of our communities that can achieve environmental, mobility and sustainability goals when approached in
a cross-departmental and community informed manner.
Once City Council adopts the proposed Strategic Digital Transformation Investment Program, projects receive an
appropriation that authorizes spending in the amount specified for the adopted fiscal year only. Estimated budget
information is shown for a five-year period to provide the most comprehensive information about known future
projects. Spending authority in future years is not granted until adoption of the annual proposed SDTIP budget
associated with each year.
Investin g in D igital T rans formation
As the city continues to grow and develop, the use of technology has also grown exponentially over the last
two decades. The SDTIP outlines the financial resources needed to ensure that the technology infrastructure is in
place to enable the city to provide services to the community. Prudent financial planning will ensure that ongoing
funding for investment in technology is available.
SDT IP Pr oject Ev aluatio n
Making decisions on technology implementations is a challenging and complex task. The challenging nature of
these decisions is exacerbated by the expanding reach of technology and the increasingly interdisciplinary nature
of emerging technologies. A major component of the SDTIP is the establishment of a cross-departmental approach
to technology leadership to evaluate, prioritize, budget for and adopt digital transformation efforts. A new
administrative order has been developed that provides a collaborative forum for key staff to validate and prioritize
technology implementations. This approach also provides a structured venue to explore how particular
configurations of a technology implementation may positively or negatively affect others within the organization.
The process to evaluate digital transformation initiatives is ongoing and meetings may be held on a monthly,
bimonthly or quarterly basis depending on the need.
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A number of factors are considered when putting together projects for the five-year program. All digital
transformation and technology projects shall be consistent with:
Proposed projects are evaluated and prioritized by a set of criteria that include:
• Alignment with City Council goals and IT strategic plans, architecture, security and technology standards,
including legislative and regulatory mandates, and administrative goals
• Coordination of IT investments across the enterprise to avoid duplication, maximizing the return on
investment and increasing efficiency
• Effective articulation of the business case including valid operational benefits of the project
• Accuracy and reasonableness of cost and benefit estimates
• Consideration of potential project risks and identification of appropriate means to manage those risks
• Adherence to standard project management practices
• Capacity of staffing resources to implement the project
As the SDTIP is implemented throughout the year, staff will continually re-evaluate projects’ scopes, costs and
schedules to responsibly and cost-effectively manage city resources.
SDT IP F iscal Yea r 2024 -2 5 Appropr iations
Going into fiscal year 2024-25, there are 41 continuing and new projects planned over the next five years at an
estimated total cost of $36.7 million. Included in the $36.7 million is approximately $19.8 million in estimated new
costs over the course of the same time frame to provide additional funding for the continuation of existing projects
as well as funding for new projects. Within the $19.8 million is approximately $6.2 million of estimated new
appropriations for fiscal year 2024-25 for these same projects.
xiiFeb. 10, 2026 Item #2 Page 24 of 226
Fiscal year 2024-25 appropriations by project goal
Pursue Communitywide Digital Transformation
$19.2 million
This goal includes updating connectivity, up-to-date hardware and software, and a robust security strategy.
Build Capacity for Data-Driven Decision Making
$1.7 million
This goal’s projects include the policies, procedures and staffing necessary for the city to fully capture the value of
emerging models of data analytics. It builds a comprehensive approach to citywide data management to enable
data-rich key performance metrics and effective operation of city departments. A data policy and resources will be
created to align departments with standards of data cataloging for compliance ease of data sharing.
Foster a Vibrant Civic Engagement Culture
$1.3 million
The city’s civic engagement culture builds upon the first two goals with a human-centered perspective to use data
and technology in a way that respects people and their privacy. Projects in this category will support a vibrant culture
where residents, organizations and businesses are invested in their community and its future.
Enhance Accessibility and Transparency
$1.2 million
This goal recognizes that open government and approaching problem-solving from an accessibility perspective
leads to better outcomes for all. Projects in this category include Civic Engagement with Open Data, Online
Permitting/Electronic Reviews, Patron Print/Copy Management and a Virtual Permitting Counter.
Promote Security and Sustainability through Connectivity
$13.3 million
Projects in this goal include the annual replacement of hardware and technology infrastructure, a Facility Security
Master Plan, the replacement of the Police Computer Aided Dispatch System, and an enhancement to the
911 emergency system.
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SDT IP Fu ture App ropriat io ns
The City of Carlsbad’s SDTIP for fiscal year 2024-25 to fiscal year 2028-29 outlines 41 projects at an estimated
total cost of $36.7 million. Of the $36.7 million, $19.8 million is for new or increased funding for projects over the
next five years. The information provided for future years reflects the most comprehensive snapshot of known or
anticipated future projects as well as associated estimated costs.
Capital Improvement Pro g ram
The City of Carlsbad Capital Improvement Program reflects the city’s ongoing commitment to maintaining the
highest standards of quality facilities for our community today and in the future. It is a planning document, not a
commitment for spending. The 15-year program outlines the expenditure plan for future capital projects and the
corresponding revenues to pay for those expenditures.
Projects that are shown in the CIP are generally defined as any construction, rehabilitation or replacement of major
infrastructure such as streets, libraries, parks, fire stations and administrative facilities, water, sewer and drainage
facilities, and other facilities that are located on or in the ground. In most cases, the total construction cost of each
of these assets is recorded and tracked as part of the city’s inventory of capital infrastructure assets and other
city-owned property.
Once the City Council adopts the proposed annual CIP budget, projects receive an appropriation that authorizes
spending in the amount specified for the adopted fiscal year only. Estimated budget information is shown for a
15-year period to provide the most comprehensive information about known future projects. Spending authority in
future years is not granted until adoption of the annual proposed CIP budget associated with each year.
xivFeb. 10, 2026 Item #2 Page 26 of 226
The CIP is organized by the following project classifications:
I nvestin g in Qua lity of Lif e
The City of Carlsbad’s philosophy is to take a proactive, long-
range planning approach to building high quality facilities and
infrastructure that support the needs and priorities of the
community. Prudent financial planning has ensured ongoing
funding to modernize, repair, and replace existing
infrastructure projects through numerous asset management
programs. Since the city applies a comprehensive asset
management approach to infrastructure planning and
budgeting it is able to avoid more costly unexpected repairs or
operational needs and minimize the burden on emergency
expenditures.
As the city continues to grow and develop, there is a corresponding increase in the demand for development-related
services and new facilities. To ensure that the necessary infrastructure and facilities are built on a schedule that
meets or exceeds this demand, the citizens of Carlsbad adopted a Growth Management Plan in 1986. The plan
was established to manage development within the city by linking residential, commercial, and industrial
development directly to standards for availability of public services and facilities.
The Growth Management Plan states that unless a standard level of facilities is available to meet new demands
resulting from the city’s growth, development cannot proceed. Recently, certain actions, such as imposing a
moratorium, have been determined to be impermissible by the California Housing and Community Development
Department, per Senate Bill 330, Housing Crisis Act of 2019, which became effective on Jan. 1, 2020.
xvFeb. 10, 2026 Item #2 Page 27 of 226
The detailed level of planning required by Growth Management has allowed the city’s CIP to anticipate the funding
needed for capital improvements in the next 15 years. Facilities such as community centers, parks and fire stations
have been constructed and opened to the public under this program.
The CIP has been designed to specifically address areas where new or expanded facilities will be needed to
maintain compliance with the adopted performance standards. With the adoption of the fiscal year 2023-24 CIP,
compliance with the Growth Management Plan is continued.
In October 2022, City Council approved a five-year strategic plan with policy goals to reflect the most important
priorities of the community. The CIP budget includes the priority construction projects identified the strategic plan.
CIP Pro ject Eva luation
Development of the CIP is a team effort involving all operational departments, the City Manager’s Office, the City
Council, and the community. Community feedback on infrastructure needs is considered and incorporated as
appropriate. The CIP is fully vetted at multiple levels of the city organization by appropriate staff using an inclusive
and transparent process and reviewed on a quarterly basis.
Projects were evaluated for the ability to deliver
realistic outcomes considering anticipated
revenue decreases in some capital funding
sources. The city remains focused on matching
existing resources with reasonable and
achievable project schedules while continuing
to work on projects that are already underway.
Existing project balances were evaluated to
determine whether additional funding was
needed or if the existing balances were
adequate. Funding recommendations were
matched against project timing and balanced
against available funding sources.
As the CIP is implemented throughout the year,
staff continually re-evaluate projects’ scopes,
costs and schedules to responsibly and cost-effectively manage infrastructure assets at the required levels of
service throughout their lifecycle. Recommendations for project funding consider current project status, project
scheduling and sequencing requirements, project constraints, and current staff capacity. Project charters are
updated to include project description, location, summary of need, justification including any legislative or policy
citations, cost estimates, and project scores.
Capital
Improvement
Program
Public health
and safety
City mission,
vision and
organizational
values
Community
values
Environmental
review
Governing and
policy
documents
Funding
availability
City
Council
goals
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CIP F isc al Year 2 024 -25 A ppropr ia tions
The CIP is organized by the following project categories:
In the fiscal year 2024-25 CIP, there are approximately 197 continuing and new projects planned over the next
5 years. The fiscal year 2024-25 CIP outlines $15.6 million in new appropriations to provide additional funding for
the continuation of existing projects as well as funding for 13 new projects. Projected revenues during the same
fiscal year are estimated at $93 million.
Fiscal year 2024-25 appropriations by project type
Civic Buildings and Facility Maintenance
-$24.6 million
This category includes a variety of facilities such as fire stations, libraries and community centers. Costs
include repair, maintenance and replacement of civic buildings and other operational facilities. (Note: due to
changes in estimated construction dates for the Orion Center project the net appropriations for this category in fiscal
year 2024-25 are negative.)
Parks
$5.5 million
Projects include improvements and enhancements to existing parks, such as playground resurfacing,
picnic areas and other needs identified by the community and in recently updated parks master plans.
Drainage
$7 million
The city’s drainage infrastructure plays an important role in handling storm water runoff flows, as well as
maintaining the water quality of the city’s creeks, lagoons and ocean. As the city continues to age, it is increasingly
necessary to balance repairing and replacing the existing lines with enhancing the current infrastructure to
accommodate future needs.
Sewer
$19.5 million
The city’s sewer, or wastewater, projects include numerous pipeline construction and rehabilitation
projects, as well as improvements to the Encina Wastewater Treatment facility. Most new lines are built and paid
for with impact fees collected with new development.
Water and Recycled Water
$793 thousand
Future water and recycled water projects include construction of new pipelines, replacement of existing
waterlines and reservoir improvements. The Carlsbad Municipal Water District has been producing and delivering
recycled water for over 30 years.
xviiFeb. 10, 2026 Item #2 Page 29 of 226
Transportation
$7.4 million
People of all ages and abilities want to go places safely and conveniently in Carlsbad, whether they drive,
walk, bike, or ride a bus or train. The city continues to invest in modernizing roads, leveraging technology to improve
traffic systems, and making timely repairs and rehabilitation of the roadways, bridges, sidewalks and other assets
in public rights of way throughout the city.
F uture C IP Pr ojec ts
Long-range planning and responsible asset management play key roles in the development of future capital
projects. Using data from various infrastructure master plans, ongoing asset condition assessments, technical
modelling, field inspections as well as community feedback, the information provided for future years reflects the
most comprehensive snapshot of known or anticipated future projects as well as associated estimated costs. Future
costs for projects forecast in fiscal year 2029-30 to fiscal year 2038-39 are estimated at approximately $538 million.
A wards a nd Ackn owledg e ments
The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of
Achievement for Excellence in Financial Reporting to the city for its Annual Comprehensive Financial Report for the
fiscal year ended June 30, 2024. This was the 28th consecutive year that the city has achieved this prestigious
award. To be awarded a Certificate of Achievement, a government unit must publish an easily readable and
efficiently organized Annual Comprehensive Financial Report. This report must satisfy both GAAP and applicable
legal requirements.
xviiiFeb. 10, 2026 Item #2 Page 30 of 226
A Certificate of Achievement is valid for a period of one year only. The city strives to annually produce an Annual
Comprehensive Financial Report which will continue to meet the Certificate of Achievement Program’s
requirements. This report will be also submitted to GFOA to determine eligibility for another certificate.
This report has been a comprehensive effort by many people from many different areas of responsibility. It could
not have been accomplished without their help and the dedicated efforts of all of the finance staff, especially
Roxanne Muhlmeister, Assistant Finance Director and Kim Riboni, Finance Manager. I also appreciate the staff of
LSL, LLP for the professional way in which the audit of this financial report was conducted. It has been a pleasure
to work with them. Additionally, I would like to thank the City Council, the City Manager and the city’s Executive
Management Team for their leadership and unwavering support in maintaining the highest standards of
professionalism in the management of the city’s finances.
Respectfully submitted,
Zach Korach
Finance Director
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As of 11/19/2025
Elected Officials
Keith Blackburn, Mayor
Priya Bhat-Patel, Mayor Pro Tem – District 3
Melanie Burkholder, Council Member – District 1
Kevin Shin, Council Member – District 2
Teresa Acosta, Council Member – District 4
Sherry Freisinger, City Clerk
Christian Peacox, City Treasurer
Leadership Team
Geoff Patnoe, City Manager
Cindie McMahon, City Attorney
Sheila Cobian, Assistant City Manager
Gary Barberio, Deputy City Manager, Community Services
Paz Gomez, Deputy City Manager, Public Works
Laura Rocha, Deputy City Manager, Administrative Services
Christie Calderwood, Chief, Police Department
Michael Calderwood, Chief, Fire Department
Maria Callander, Director, Information Technology
Amanda Flesse, Director, Utilities
Tom Frank, Director, Transportation
Morgen Frey, Assistant City Clerk
Jason Haber, Director, Intergovernmental Affairs
Zach Korach, Director, Finance
Kyle Lancaster, Director, Parks & Recreation
Faviola Medina, Director, Constituent & Clerk Services
Mandy Mills, Director, Housing & Homeless Services
Jeff Murphy, Director, Community Development
Matt Sanford, Director, Economic Development
Darrin Schwabe, Director, Human Resources
Suzanne Smithson, Director, Library & Cultural Arts
Amy Ventetuolo, Director, Communication & Engagement
James Wood, Jr., Director, Environmental Sustainability
Boards and Commissions Chairs
Agricultural Conversion Mitigation Fee Advisory Committee – Carolyn Alkire
Arts Commission – Barbara Chung
Community-Police Engagement Commission – Michael Zepeda, Jr.
Environmental Sustainability Commission – Cynthia Norall
Historic Preservation Commission – Chad Majer
Housing Commission – Chih-Wu Chang
Investment Review Board – Christian Peacox
Library Board of Trustees – Laurel Moran
Parks & Recreation Commission – Robert Winston
Planning Commission – Roy Meenes
Senior Commission – Kathryn Rangus
Traffic & Mobility Commission – Josh Coelho
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Feb. 10, 2026 Item #2 Page 36 of 226
FFinancial Section
Feb. 10, 2026 Item #2 Page 37 of 226
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LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
City of Carlsbad, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Carlsbad, California
(hereafter, the City) as of and for the year ended June 30, 2025, and the related notes to the financial statements,
which collectively comprise the City’s 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 respective
financial position of the governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund information of the City as of June 30, 2025, and the respective changes in financial position, and,
where applicable, cash flows thereof, for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing Standards issued by
the Comptroller General of the United States. Our responsibilities under those standards are further described in
the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be
independent of the City 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 opinions.
Emphasis of Matter
Change in Accounting Principle
As described in Notes 1 and 16 to the financial statements, in 2025, the City adopted new accounting guidance,
GASB Statement No. 101, Compensated Absences. 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.
In preparing the financial statements, management is required to evaluate whether 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
twelve months beyond the financial statement date, including any currently known information that may raise
substantial doubt shortly thereafter.
Feb. 10, 2026 Item #2 Page 39 of 226
To the Honorable Mayor and Members of the City Council
City of Carlsbad, California
Auditors’ 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 auditors’ report that includes our opinions.
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 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 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 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 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 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.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion
and analysis, budgetary comparison information, and required pension and other post-employment benefits
schedules as listed on the table of contents be presented to supplement the basic financial statements. Such
information is the responsibility of management and, although not a part of the basic financial statements, is required
by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management about the methods
of preparing the information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
2Feb. 10, 2026 Item #2 Page 40 of 226
To the Honorable Mayor and Members of the City Council
City of Carlsbad, California
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the City’s basic financial statements. The accompanying combining and individual fund financial statements and
schedules (supplementary information) are presented for purposes of additional analysis and are not a required
part of the basic financial statements. Such information is the responsibility of management and was derived from
and relates directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the basic financial statements
and certain additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises
the introductory and statistical sections but does not include the basic financial statements and our auditors’ report
thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express
an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and
consider whether a material inconsistency exists between the other information and the basic financial statements,
or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude
that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 23, 2025, on
our consideration of the City’s internal control over 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 financial reporting and compliance and the results
of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting
or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering City’s internal control over financial reporting and compliance.
Irvine, California
December 23, 2025
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Management’s Discussion and Analysis
Management of the City of Carlsbad (“city”) provides readers this overview and analysis of the financial activities of
the city for the fiscal year ended June 30, 2025. The intent is to assist the reader of these financial statements in
better understanding the impact of financial decisions made by the city. This analysis will focus on the significant
changes to explain the city’s overall financial condition. The information presented here should be considered in
conjunction with the additional information furnished in the letter of transmittal.
Overview of the Financial Statements
The financial statements section of the annual report consists of four parts – management’s discussion and analysis
(this section), the basic financial statements, required supplementary information, and an optional section that
presents combining statements for nonmajor governmental funds and internal service funds. The basic financial
statements include two kinds of statements that present different views of the city.
• The first two statements are Government-wide Financial Statements that provide both long-term and short-term
information about the city’s overall financial status.
• The remaining statements are Fund Financial Statements that focus on individual parts of the city government,
reporting the city’s operations in more detail than the Government-wide Statements.
o The Governmental Funds Financial Statements detail how general government services, such as public
safety and library services, were financed in the short-term, as well as what remains for future spending.
o Proprietary Funds Statements offer short- and long-term financial information about the activities the city
operates like businesses, such as providing water and wastewater services.
o Fiduciary Funds Statements provide information about the financial relationships – such as assessment
and business improvement districts – in which the city acts solely as a trustee or agent for the benefit of
others to whom the resources belong.
The financial statements also include notes that explain some of the information in the financial statements and
provide greater detail. The statements are accompanied by required supplementary information that further explain
and support the information in the financial statements. In addition to these required elements is the combining fund
statements section that provides financial information about the nonmajor governmental funds, internal service
funds, and fiduciary funds, which are added together and presented in single columns in the basic financial
statements.
The remainder of this overview section of management’s discussion and analysis (MD&A) explains the structure
and content of each of the statements.
Government-wide Financial Statements
The Government-wide Financial Statements report information about the city as a whole, using accounting methods
similar to those used by private-sector companies. The Statement of Net Position includes all the city’s assets and
liabilities. All of the current year’s revenues and expenses are accounted for in the Statement of Activities,
regardless of when cash is received or paid.
The two Government-wide Financial Statements report the city’s net position and how it has changed. Net position
– the difference between the city’s assets and liabilities – is one way to measure the city’s financial health, or
position. Over time, increases or decreases in the city’s net position are an indicator of whether the city’s financial
health is improving or deteriorating, respectively. Additional non-financial factors should be considered, such as
changes in the city’s property tax base and the condition of the city’s infrastructure, to assess the overall health of
the city.
5Feb. 10, 2026 Item #2 Page 43 of 226
The Government-wide Financial Statements of the city are divided into two categories:
• Governmental activities – Most of the city’s basic services, such as police, fire, public works, community
services, and internal services are included here. Taxes, revenues from other governments and agencies,
income from property and investments, grants and contributions, and charges for services finance most of these
activities.
Business-type activities – The city charges fees
to customers to cover the cost of certain
services it provides. The city’s water,
wastewater, solid waste and municipal golf
course operations are the primary business-
type activities.
Fund Financial Statements
The Fund Financial Statements provide more
detailed information about the city’s most significant
funds – not the city as a whole. Funds are
accounting devices used by the city to keep track of
specific sources of funding and spending for
particular purposes.
Some funds are required by state law and bond
covenants, while the city establishes other funds to
control and manage money for particular purposes
(such as the developer impact fee funds) or to show
that it is properly using certain taxes and grants
(such as the Section 8 Rental Assistance Fund).
The city has three kinds of funds:
• Governmental funds – Most of the city’s basic services are included in governmental funds. These funds are
used to account for (1) cash and other financial assets that can readily be converted to cash flow in and out,
and (2) balances left at year-end that are available for future spending. Consequently, the Governmental Funds
Statement provides a detailed short-term view that helps the reader determine the amount of financial resources
that can be spent in the near future to finance the city’s programs. The statements are presented on a modified
accrual basis of accounting. A reconciliation between the long-term and short-term focus of the Government-
wide Financial Statements is provided immediately following each statement. There are currently three
governmental fund types being used by the city: the General Fund, special revenue funds, and capital project
funds.
• Proprietary funds – Services for which the city charges customers a fee for a service are generally reported in
proprietary funds. Proprietary funds, like Government-wide Financial Statements, provide both long- and short-
term financial information, and are presented on an accrual basis of accounting.
There are two types of propriety funds, enterprise funds and internal service funds:
o Enterprise funds are used to report activities that provide business-type services, generally to external
customers – such as water, wastewater, solid waste, and golf services. In both the Government-wide
Financial Statements and the Fund Financial Statements, these funds are shown under business-type
activities.
o Internal service funds are used to report activities that provide services and supplies for the city’s other
programs and activities – such as fleet, workers’ compensation, risk/liability, and information technology.
6Feb. 10, 2026 Item #2 Page 44 of 226
• Fiduciary funds – These funds are used to account for situations where the city’s role is purely custodial, such
as the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations,
or other governments. All of the city’s fiduciary activities are reported in a separate Statement of Fiduciary Net
Position. These activities are excluded from the city’s Government-wide Financial Statements because the city
cannot use these assets to finance its operations.
Financial Analysis of the City as a Whole
Net Position
The city’s combined net position as of June 30, 2025, as shown below, was $1.94 billion. The city’s net position
increased by $45.9 million as compared to the prior fiscal year. This increase was heavily impacted by revenues
exceeding expenses for the year combined with an increase in assets from favorable change in market value of
cash investments.
As noted earlier, over time, net position may serve as a useful indicator of the city’s financial position. For the city,
assets and deferred outflows of resources currently exceed liabilities and deferred inflows of resources by
$1.94 billion at the close of the fiscal year.
A large portion of the city’s net position, 60%, reflects its net investment in capital assets (i.e., land, buildings,
machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still
outstanding. The city uses these capital assets to provide services to residents; consequently, these assets are not
available for future spending. Although the city’s investment in its capital assets is reported net of related debt, the
resources needed to repay this debt must be provided from other sources since the capital assets themselves would
not be used to pay for these liabilities. The city’s net investment in capital assets increased during fiscal year
2024-25 due to continued investment in capital infrastructure. This increase was partially offset by growth in capital
related liabilities, including software subscription obligations, and partially offset by reductions in recycled water
loan debt through ongoing repayments.
Total
Percentage
Change
2024 2025 2024 2025 2024 2025 2024-25
Current and other assets $742.6 $816.9 $233.1 $240.2 $975.7 $1,057.1 8.3%
Capital assets 814.4 818.9 368.4 372.5 1,182.8 1,191.4 0.7%
Total assets 1,557.0 1,635.8 601.5 612.7 2,158.5 2,248.5 4.2%
Deferred outflows 82.0 62.0 6.2 4.2 88.2 66.2 -24.9%
Other liabilities 42.5 57.1 15.3 16.6 57.8 73.7 27.5%
Net OPEB liability 1.1 0.0 0.2 0.0 1.3 0.0 -100.0%
Net pension liability 202.8 200.2 15.0 14.2 217.8 214.4 -1.6%
Long-term debt outstanding 35.6 48.3 14.6 14.1 50.2 62.4 24.3%
Total liabilities 282.0 305.6 45.1 44.9 327.1 350.5 7.2%
Deferred inflows 15.2 14.3 5.5 5.1 20.7 19.4 -6.3%
Net position
Net investment in
capital assets 804.0 801.0 351.8 357.6 1,155.8 1,158.6 0.2%
Restricted 267.7 299.1 136.6 36.3 404.3 335.4 -17.0%
Unrestricted 270.1 277.8 68.7 173.0 338.8 450.8 33.1%
Total net position1 $1,341.8 $1,377.9 $557.1 $566.9 $1,898.9 $1,944.8 2.4%
1. Beginning net position was restated to reflect implementation of GASB Statement No. 101 related to compensated
absences, and an adjustment to capital assets in prior years.
See Note 16 to the financial statement for additional information regarding this restatement.
Total
CITY OF CARLSBAD'S NET POSITION
(in millions of dollars)
Governmental
Activities
Business-Type
Activities
7Feb. 10, 2026 Item #2 Page 45 of 226
Of the city’s total net position, 17% represents resources that are subject to external restrictions on usage. The
remaining balance of unrestricted net position ($450.8 million) may be used to meet the city’s ongoing obligations
to residents and creditors.
The remaining net position is unrestricted, meaning it can be used for future spending. The increase in unrestricted
net position during fiscal year 2024-25 reflects both positive revenues over expenditures and the realignment of
utility reserve balances previously reported as restricted. These reserves are established by policy rather than
external legal restrictions and are reported as unrestricted net position. This adjustment had no effect on total net
position.
Changes in Net Position
The condensed summary of activities below shows that net position increased by $45.9 million during the year. This
increase occurs when revenues earned are greater than expenses incurred.
The increase in net position was driven by several factors, including increases in property taxes, an increase in
grant funding for housing and transportation programs, and significant growth in investment income and fair market
value adjustments compared to the prior fiscal year. These gains were partially offset by rising expenditures
influenced by lingering inflation.
Total
Percentage
Change
2024 2025 2024 2025 2024 2025 2024-25
Revenues
Program revenues
Charges for services $18.0 $18.3 $85.0 $93.1 $103.0 $111.4 8.2%
Operating grants and contributions 28.3 32.7 0.0 0.0 28.3 32.7 15.5%
Capital grants and contributions 24.2 26.0 5.2 1.5 29.4 27.5 -6.5%
General revenues
Property taxes 94.0 98.5 5.4 5.6 99.4 104.1 4.7%
Sales and use taxes 57.8 55.9 - - 57.8 55.9 -3.3%
Other taxes 49.9 50.1 - - 49.9 50.1 0.4%
Use of money and property 35.6 43.5 10.2 12.3 45.8 55.8 21.8%
Other 0.8 0.6 1.1 0.8 1.9 1.4 -26.3%
Total revenues 308.6 325.6 106.9 113.3 415.5 438.9 5.6%
Expenses
General government 31.0 35.4 - - 31.0 35.4 14.2%
Public safety 115.0 117.4 - - 115.0 117.4 2.1%
Community services 80.7 86.3 - - 80.7 86.3 6.9%
Public works 64.9 50.0 - - 64.9 50.0 -23.0%
Carlsbad Municipal Water District - - 63.0 67.2 63.0 67.2 6.7%
Golf course - - 10.5 10.7 10.5 10.7 1.9%
Wastewater - - 19.3 20.4 19.3 20.4 5.7%
Solid waste - - 5.4 5.6 5.4 5.6 3.7%
Total expenses 291.6 289.1 98.2 103.9 389.8 393.0 0.8%
Excess (deficiency) before transfers 17.0 36.5 8.7 9.4 25.7 45.9 78.6%
Transfers (0.3) (0.4) 0.3 0.4 - - 0.0%
Increase (decrease) in net position 16.7 36.1 9.0 9.8 25.7 45.9 78.6%
Beginning net position (as restated)1 1,325.1 1,341.8 548.1 557.1 1,873.2 1,898.9 1.4%
Ending net position $1,341.8 $1,377.9 $557.1 $566.9 $1,898.9 $1,944.8 2.4%
1. Beginning net position was restated to reflect implementation of GASB Statement No. 101 related to compensated absences,
and an adjustment to capital assets in prior years.
See Note 16 to the financial statement for additional information regarding this restatement.
Activities Activities Total
CITY OF CARLSBAD'S CHANGES IN NET POSITION
(in millions of dollars)
Governmental Business-Type
8Feb. 10, 2026 Item #2 Page 46 of 226
Approximately 60% of the revenues of the city’s governmental activities are generated through taxes collected
(i.e., property tax, sales tax, transient occupancy tax, etc.), and approximately 80% of the city’s business-type
revenue is generated through charges for services. The chart on the next page graphically depicts the city’s revenue
sources.
Fiscal year 2023-24 experienced strong growth and revenue performance, specifically with property tax and sales
tax. However, as the year progressed, indications of an economic slowdown became more evident. The total
amount of taxable receipts began to decline when compared to previous periods, and revenues from the transient
occupancy tax on overnight lodging ended the year very similarly to the prior year. Similar trends were experienced
in fiscal year 2024-25, namely with sales tax and diminishing consumer demand, given the sustained inflationary
increases across the region. Bolstered by property tax revenues, the General Fund’s total revenues remain strong,
though sales tax revenues continue to be sensitive to changes in consumer demand. It will be critical to monitor the
city’s revenues and expenditures as the city continues into fiscal year 2025-26 and take necessary proactive steps
to continue mitigating economic uncertainties.
Nearly 80% of General Fund revenues are derived from three sources: property tax, sales tax, and transient
occupancy tax, or TOT. Sales tax and TOT revenues tend to be much more sensitive to changes in economic
conditions, unlike property tax revenues, which remain relatively stable because of the mitigating effect of
Proposition 13, which limits annual growth in assessed values.
The city’s largest revenue source, property taxes, increased by $4.7 million due to assessed values increasing by
4.7% for fiscal year 2024-25, due to increases in both residential and commercial properties, with a smaller increase
seen in industrial properties. This is the 12th year in a row that Carlsbad’s assessed values have increased from
year to year, and in line with assessed value increases with other cities in San Diego County for the year. This is
the 10th year in a row since the Great Recession ended that the city saw increases in assessed values in all three
property components (residential, commercial and industrial). Although increases in residential assessed values
were recorded for fiscal year 2024-25, the county is now experiencing historically low for-sale housing inventory as
higher interest rates are decreasing home affordability.
Sales tax ended the fiscal year with $55.9 million and the year-over-year decrease of $1.9 million or 3.3%. In fiscal
year 2021-22, the city experienced accelerated recovery after the impacts of the COVID-19 pandemic. Fiscal year
2022-23 saw historically high levels of sales tax revenues driven by inflation and sustained by consumer demand.
Fiscal year 2023-24 revealed a leveling from sales growth and slowdown in consumer activity. This leveling off
continued into fiscal year 2024-25 as revenue trends remain slightly lower than a year ago overall. Consumers are
more likely to wait for greater improvement of household economic conditions before extending themselves again,
9Feb. 10, 2026 Item #2 Page 47 of 226
inspiring the next sales tax growth cycle. The largest economic segments in the city are automobile dealers, general
consumer goods, and restaurants. Together, they generate approximately 80% of the city’s sales tax revenues. The
city’s sales tax receipts were down over the previous year and were driven mainly by a decline in consumer demand,
likely in response to the sustained inflationary period.
Transient occupancy tax ended the fiscal year with $35.5 million, a small increase of $1.4 million or 4% over the
prior year. Post COVID-19 the city experienced increased TOT revenues which were driven by a combination of
pent-up demand after COVID-19 and an increase in average daily room rates. Fiscal year 2023-24 saw a leveling
out of TOT levels and that trend continued into fiscal year 2024-25.
When compared to the prior fiscal year, business licenses were down 3.5% in fiscal year 2024-25 at $6.2 million
when compared to the prior year’s amount of $6.4 million. The small decrease is due to a decrease in license
penalty fees collected when compared to the prior year.
Income from property and investments was heavily impacted by unrealized gains created by adjusting the city’s
investments to their fair market value on June 30, 2025. This explains the increase in this category when comparing
fiscal year 2024-25 to the prior year. The city also earned $1.9 million (versus $870,000 in the prior year)
in the city’s Public Agencies Post-Employment Benefits Trust (Section 115 Trust), which was established in
September 2023.
The primary contributors to the city’s charges for services are water and wastewater customers. An increase in total
water and wastewater revenues was driven primarily by rate increases implemented in January 2025 combined
with a 10% increase in water volume sales. These factors led to an overall increase in charges for services for the
year for both water and wastewater. Additionally, the city’s municipal golf course experienced a slight increase in
charges for services supported by a rate increase and continued demand.
The total cost of all programs and services was $393 million in fiscal year 2024-25 which was higher (0.8%) than
prior fiscal year costs of $389.8 million. Much of the increase in program costs came from negotiated and contractual
salary and benefit cost increases across the city’s employee groups. Smaller increases were also seen in city
maintenance costs, mainly as a result of lingering inflation in the economy. The city’s water district also saw
increases as the cost of water and amount of water purchased increased.
10Feb. 10, 2026 Item #2 Page 48 of 226
• General Government (9%)
This segment of the city is divided into three major groups: Policy & Leadership, Administrative Services and
non-departmental charges. The Policy & Leadership group encompasses all elected officials, the
City Manager and City Attorney offices, the Communications & Engagement team, and the Legislative &
Constituent Services team. The Administrative Services group includes Administration, Finance, Human
Resources (including Workers’ Compensation and Risk Management), Information Technology, and Economic
Development. Non-departmental also includes any special projects directed by the City Council.
• Public Safety (30%)
Public Safety remains a top City Council priority. This major service area includes the Police Department, whose
mission is to protect and serve the community with integrity, professionalism and valor. The Fire Department is
the other component of this major service area with a mission to enhance the quality of life by delivering
exceptional services in safeguarding lives, property, and the environment.
• Community Services (22%)
Community Services consists of Library & Cultural Arts, Parks & Recreation, Community Development and
Housing & Homeless Services. These city service areas ensure the city’s planning and building policies are
carried out, foster lifelong learning, support strong neighborhoods, administer affordable housing and homeless
response programs, attend to the community’s health and wellness and promote transparency in government.
Library & Cultural Arts provides educational, informational and cultural arts services for all community residents,
which contribute to quality of life by supporting lifelong learning, the pursuit of knowledge, and creating the
availability of community gathering places. Parks & Recreation offers comprehensive opportunities for meeting
the recreational and social needs and interests of the community by providing programs for all segments of the
population. Community Development’s primary roles include the day-to-day administration of the local, state,
and federal land use regulations, promoting economic and business development, protecting life and property,
enhancing public health, and preserving the environment. Community Development encompasses Land Use
Planning, Building, Code Enforcement, and Land Development Engineering.
• Public Works (13%)
Public Works is responsible for building and maintaining all city infrastructure assets. This service area includes
Public Works Administration, Facilities & Fleet, Environmental Sustainability, Transportation, Construction
Management & Inspection and Utilities. Construction Management & Inspection manages construction of major
projects, inspection and oversight of private development grading, stormwater and improvements inspection
and oversight of all activity in the public right-of-way. Environmental Sustainability oversees the climate action
plan program, the habitat management plan program, the sustainable materials management program, solid
waste, and provides coordination of the municipal component of the National Pollutant Discharge Elimination
System Municipal Storm Water Permit. Fleet & Facilities supports the maintenance of city vehicles and facilities.
The Transportation Department cares for road infrastructure and projects, keeps people and traffic moving,
maintains streets and storm drains, maintains street lighting, and provides incident response for city and private
property.
• Water (17%)
The Carlsbad Municipal Water District (CMWD), a subsidiary of the city, provides potable and recycled water
service to approximately 29,000 connections within a 32.3 square mile service area. CMWD purchases 100%
of its potable water, which includes a local supply of desalinated seawater, as treated water from the
Metropolitan Water District and the San Diego County Water Authority. CMWD also provides recycled water for
irrigation purposes which is produced at the Carlsbad Water Recycling Facility, as well as purchased from the
Vallecitos Water District.
• Golf Course (3%)
The city opened a municipal golf course in the summer of 2007, further enhancing the recreational activities the
city offers. The municipal golf course, The Crossings at Carlsbad, is an 18-hole golf course set in the rolling
hills and canyons of Carlsbad. With ocean views, a high-quality golf experience, a first-class restaurant and
clubhouse, and connections to hiking trails, The Crossings at Carlsbad is a destination for golfers and
non-golfers alike.
11Feb. 10, 2026 Item #2 Page 49 of 226
• Wastewater (5%)
The city owns a wastewater system that provides wastewater service to roughly two thirds (2/3) of the city’s
population consisting of 24,000 sewer accounts and is responsible for the collection and conveyance of sewer
discharges to the Encina Water Pollution Control Facility (EWPCF). The EWPCF is jointly owned by the cities
of Carlsbad, Vista, Encinitas, the Buena Sanitation District, Vallecitos Water District, and Leucadia Wastewater
District and provides full secondary treatment, sludge handling, and disposal through a deep ocean outfall that
extends along the ocean floor to a point 1.5 miles offshore.
• Solid Waste (1%)
The Solid Waste Division administers and monitors the solid waste contract and the Palomar Transfer Station
agreement and is responsible for ensuring the waste reduction and recycling components of the Source
Reduction and Recycling Element and Household Hazardous Waste Element comply with state mandated
diversion and disposal requirements. Also included in this section is the Storm Water Protection Program,
whose goal is to provide leadership and stewardship of the city’s resources protecting the city’s beaches, creeks
and lagoons.
The following sections provide information about the operations of the governmental and business-type activities.
Governmental Activities
The increase in net position for governmental activities was $36.1 million including a restatement of net position.
Total revenues from governmental activities were $325.6 million ($77 million in program revenues and
$248.6 million in general revenues) and were offset by $289.1 million in total costs of governmental activities and
$0.4 million in transfers out.
The table below presents the total cost of each of the city’s major programs, as well as each program’s
revenue (fees generated by the activities, contributions, and intergovernmental funding). The net cost
(the difference between adjoining bars in the graph) shows the financial burden that was placed on the city’s
taxpayers by each of these programs (costs covered by general revenues).
12Feb. 10, 2026 Item #2 Page 50 of 226
Revenues are generated through several sources to cover the cost of the city’s programs. Total revenues of
$325.6 million include fees and charges paid by those who directly benefit from the programs ($18.3 million), grants
and contributions from other governments, organizations and property owners which subsidize certain programs
and projects ($58.7 million), and taxes and other revenues (such as income from property and investments)
received by the city to pay for the “public benefit” portion of the city’s services ($248.6 million).
Community Services revenues are derived from development activities throughout the city, housing assistance
programs, parks and recreation fees, and library fees. A large portion of Community Services revenues are
comprised of housing assistance programs (Federal Rental Assistance, affordable housing loan repayments, and
developers paying into the Affordable Housing Trust Fund) as well as charges for development related services. As
expected, development activity reflected a moderate decrease from the prior fiscal year, offsetting only a portion of
the program expenses.
The majority of Public Works revenues are used to acquire and build capital assets (versus covering operating
expenses). In addition, the donation of capital assets from developers is reflected in the program revenues for Public
Works. Capital assets are generally constructed or purchased once sufficient funds have accumulated to pay for
the entire asset cost. Several years ago, the city entered a new stage of its lifecycle, from a developing or growing
stage, to a mature and maintenance focused stage. As the city continues to mature and approach buildout, there
will be fewer master planned projects. In past years, these projects constructed new facilities, roads, parks, and
other city-owned infrastructure. The city is shifting its focus towards maintenance of existing facilities and will use
funding sources such as the Infrastructure Replacement Fund to maintain and replace these assets.
Business-type Activities
Program revenues for the city’s business-type activities totaled $94.6 million for the year, while program expenses
equaled $103.9 million.
13Feb. 10, 2026 Item #2 Page 51 of 226
Water program revenues are generated primarily from the sale of water, as well as from developer-donated assets
and grants. Although program expenses exceeded operating revenues, the overall impact was partially offset by
$5.6 million in general revenues, along with higher interest earnings and gains on investments, resulting in a net
position decrease of $0.1 million for the water program. Revenues increased primarily due to a 9% increase in water
sales, as the water rate adjustment was implemented effective July 2025. Expenses were driven largely by an
11.4% increase in the cost and volume of water purchased.
Wastewater program revenues of $27.2 million were higher than program expenses of $20.4 million. An increase
in revenue was driven by annual rate increases, combined with capital contributions from new development.
Expenses are mostly from Encina operations and depreciation from new and replacement assets.
The city’s golf course enterprise was in its 18th full year of operation and finished the fiscal year with a net income
of $1.6 million. The demand for golf has remained strong in the region and at the city’s municipal course. The course
witnessed over 71,686 rounds played which significantly contributed to the golf course revenues sufficiently funding
normal golf course operating expenses (i.e., excluding depreciation expense).
Solid waste revenues are primarily generated from fees charged to waste removal services customers to support
the city’s integrated waste management plan which include recycling efforts and proper waste disposal programs.
Expenses were planned to surpass revenues as many waste management programs have increased in level of
effort and cost, such as solid waste, recycling, and organics management services, household hazardous waste
collection and disposal, and environmental outreach and education. Despite the current year’s loss of $3.0 million,
the fund has sufficient reserves.
Capital construction expenses are spread over the life of an asset as annual depreciation charges (program
expenses) and are not reflected as an expense in the year acquired.
A more detailed discussion of each of the enterprises can be found in the Proprietary Funds Section.
14Feb. 10, 2026 Item #2 Page 52 of 226
Financial Analysis of the City’s Funds
As noted earlier, the city uses fund accounting to ensure compliance with finance related legal requirements. In the
current Annual Comprehensive Financial Report, the city has implemented all GASB statements effective
June 30, 2025. New accounting pronouncements issued by GASB effective during fiscal year 2024-25 include
GASB Statement No. 101, Compensated Absences. More information on significant accounting can be found in
Note 1 of the financial statements.
Governmental Funds
The focus of the city’s governmental funds is to provide information on near-term inflows, outflows, and balances
of spendable resources. This information is useful in assessing the city’s financing requirements. In particular,
unassigned fund balances may serve as a useful measure of a government’s net resources available for spending
at the end of the fiscal year.
There are five fund balance classifications: nonspendable, restricted, committed, assigned, and unassigned. These
fund balance classifications comprise a hierarchy based primarily on the extent to which a government is bound to
observe constraints imposed upon the use of the resources reported in governmental funds. At the end of the
current fiscal year, the city’s governmental funds reported combined ending fund balances of $679.8 million, up
$54.4 million from the year before including restatement. Approximately 0.2% ($1.7 million) constitutes
nonspendable fund balances, mostly comprised of advances and loans to other funds. Restricted fund balances
can only be spent for a specific purpose stipulated by law and make up about 44% ($299 million). Assigned fund
balances are intended to be used by the city for specific purposes, but do not meet the criteria to be classified as
restricted or committed. These make up over 33% ($229.6 million) of the city’s fund balance. Unassigned fund
balance is 20.7% ($140.8 million) of the overall fund balance, which is available for spending at the City Council’s
discretion.
15Feb. 10, 2026 Item #2 Page 53 of 226
The city’s General Fund Reserve Policy, outlined in City Council Policy 74, commits the city to maintaining General
Fund reserves at a target of 40% of General Fund annual operating expenditures. The total reserve level is to be
calculated using the prior fiscal year’s adopted General Fund budgeted expenditures and is outlined below:
A summary of the General Fund’s revenues, expenditures and changes in fund balance is shown below:
16Feb. 10, 2026 Item #2 Page 54 of 226
The General Fund is the main operating fund of the city, and at the end of the fiscal year had a total fund balance
of $219.1 million, an increase of $11.8 million from the prior fiscal year. The increase in net position was driven by
several factors, including increased property tax revenue due to an increase in assessed values, as well as
significant growth in investment income and fair market value adjustments compared to the prior fiscal year. These
gains were partially offset by rising expenditures influenced by inflation as well as an increase in personnel costs
due to negotiated salary increases.
Total
Increase Percentage
(Decrease) Change
2024 2025
Revenues
Taxes $200.9 $202.9 $2.0 1.0%
Intergovernmental 2.5 3.5 1.0 40.0%
Licenses and permits 3.0 3.4 0.4 13.3%
Charges for services 13.4 14.0 0.6 4.5%
Fines and forfeitures 0.4 0.4 0.0 0.0%
Use of money and property 13.4 15.2 1.8 13.4%
Miscellaneous 7.3 0.5 (6.8) -93.8%
Total revenues 240.9 239.9 (1.0) -0.4%
Expenditures
General government 22.3 22.2 (0.1) -0.4%
Interdepartmental charges (6.1) (5.5) 0.6 -9.8%
Public safety 91.1 99.7 8.6 9.4%
Community services 48.1 50.5 2.4 5.0%
Public works 22.6 23.1 0.5 2.2%
Capital outlay 4.9 0.6 (4.3) -87.8%
Debt service 0.1 0.0 (0.1) N/A
Total expenditures 183.0 190.6 7.6 4.2%
Excess (deficiency) of revenues
over (under) expenditures 57.9 49.3
Other financing sources (uses)
Transfers in 0.0 0.0
Transfers out (33.4) (37.5)
Notes and loans issued 0.1 0.0
Total other financing sources (uses) (33.3) (37.5)
Net change in fund balances 24.6 11.8
Fund Balances - beginning, as restated 182.8 207.4
Fund Balances - ending $207.4 $219.1
2024-25
Total
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GENERAL FUND
(in millions of dollars)
17Feb. 10, 2026 Item #2 Page 55 of 226
The unassigned fund balance portion of the General Fund was $141.1 million, a decrease of $21.2 million from last
fiscal year. This decrease resulted from (before transfers out) revenues more than expenditures of approximately
$49.3 million, which was offset by $37.5 million in transfers to other funds. Of the total $37.5 million in transfers out
of the General Fund, $35.7 million was used to fund future capital projects and $1.8 million were used for operating
subsidies. During fiscal year 2024-25 the city council also approved a $7.5 million General Fund contribution to the
city’s Pension Section 115 Trust, a $6 million contribution to the city’s storm water protection program and the
establishment of an asset replacement assignment of $17.5 million which will be used on a rolling 10-year basis for
the purchase of machinery and equipment that has reached the end of their respective useful lives.
The Community Facilities District No. 1 Fund balance increased $8.2 million from continued collection of
assessments for the future construction of city infrastructure and facilities which includes projects such as Veteran’s
Memorial Park, a centralized maintenance and operations center for Public Works and Parks Maintenance and the
replacement of the city hall complex as well as interest earnings on the cash held in the fund. This was slightly
offset by use of funds related to design costs for Veteran’s Memorial Park and the maintenance and operations
center.
The fund balance in the Infrastructure Replacement Fund decreased $2.6 million from the expenditure of $14 million
in capital outlay mostly related to the replacement of the Monroe Street pool complex. This was offset by interest
earnings of $6.3 million and a budgeted contribution of $5 million from the General Fund for the future replacement
of existing infrastructure and facilities. In addition to the pool replacement, ongoing projects for the year included a
fuel island at the Fleet Service Center, beach access repairs and various other infrastructure improvement projects
across the city.
During the year, the city continued to set aside money for the construction of various projects within these and other
governmental funds. Historically, the city has not issued debt to fund the construction of capital projects and sets
aside funds on an annual basis until sufficient funds have been collected for the construction of specific projects. In
addition, projects will not be constructed until anticipated annual operating costs can be absorbed into the city’s
budget without creating a deficit.
Proprietary Funds
The purpose of the city’s proprietary fund sections is to provide short-term and long-term financial information about
the city’s business-type activities. The analysis focuses on the determination of operating income, changes in net
position (cost recovery), financial position, and cash flows.
The Carlsbad Municipal Water District (CMWD) funds experienced an operating loss of approximately $14.5 million
for the year. Operating revenues were approximately $52.5 million and operating expenses were approximately
$67.0 million. Water purchases was one of the larger factors in the operating loss and caused by cost
increases of water purchased from the Metropolitan Water District and the San Diego County Water Authority
(suppliers of the CMWD’s potable water). Revenues increased primarily due to a 9% increase in water sales, as
the water rate adjustment was implemented effective July 2025. Nonoperating income included property and
investments of $8.3 million and property taxes of $5.6 million. Income before transfers, capital contributions and
special items for the year was ($0.9) million.
The Wastewater Fund had an annual operating income of $9.9 million for the fiscal year. Total revenues from
operations were $26.7 million from the prior year, due primarily to timing of rate increases. Operating expenses
were up $0.9 million and were primarily the result of the increased administrative and general and wastewater plant
operating costs at Encina. These were offset by a decrease in depreciation compared to the previous fiscal
year. Nonoperating revenues resulted in a $2.9 million gain driven by a higher value market value adjustment for
the city’s investment.
In the eighteenth year of operation, the Golf Course Fund had an operating income of $1.0 million. Excluding
depreciation of the enterprise's assets ($0.8 million), the Golf Course Fund’s net income was $1.8 million. Revenues
exceeded expectations in the current year due to a continued strong demand for rounds combined with an increase
in green fees during the year. While revenue increased, golf related costs are generally fixed in nature and did not
increase at the same rate.
18Feb. 10, 2026 Item #2 Page 56 of 226
19
Solid Waste Operations and Storm Water Programs are combined on the city’s financial reports and showed
a net operating loss of $2.5 million for the year. Both revenue and expenses were comparable to prior fiscal
year. Nonoperating revenues resulted in a $0.7 million increase to the $2.5 million operating loss before
transfers and capital contributions. The unrestricted net position for the Water, Golf Course, Wastewater, and
Solid Waste operations totaled $168.4 million at year-end, representing approximately 30% of the total
enterprise funds’ net position. This increase was driven primarily by positive operating performance before
depreciation. Each fund’s unrestricted net position may be used to absorb fluctuations in operating expenses
and to address unforeseen repairs and maintenance.
The unrestricted net position of the Water and Wastewater funds may be utilized in accordance with the city’s
utilities reserve policy. These reserves include amounts designated for future capital construction of new and
replacement water and wastewater infrastructure assets, days of operating costs, rate stabilization, debt
service, and emergency capital needs. Because funding for infrastructure replacement is not legally restricted,
it is reported as unrestricted on the Statement of Net Position. However, the city separately accounts for and
monitors these amounts to ensure adequate funding is available for the timely replacement of water and
wastewater infrastructure assets.
The City’s utilities reserve policy, outlined in City Council Policy 96, is designed to establish guidelines to ensure
the fiscal stability of the potable water, recycled water and wastewater funds. The annual budget process and
the setting of utility user rates and charges will be used to achieve and maintain the various target reserve
levels. The policy aims to maintain minimum and target reserves for the following areas:
• Operating Reserve-minimum of 90 days and target of 120 days of operating costs for the operating
funds of potable water, recycled water and wastewater funds
• Debt Service Reserve-100% of required annual debt service for potable water, recycled water and
wastewater
• Capital Construction Reserve-minimum 50% and target of 100% for potable and recycled water and a
minimum 25% and a target of 50% of wastewater of the five-year rolling average of annual spending
on capital improvement projects
• Emergency Capital Reserve-minimum of 0.5% and target of 1% of system replacement value for water,
recycled water and wastewater
• Rate Stabilization Reserve-minimum 10% and target of 20% of rate revenues for potable and recycled
water and a minimum 5% and a target of 10% of rate revenues for wastewater
The city has met or exceeded all utility reserve targets at fiscal year end 2024-25. The minimum and target
reserve levels are shown in the table on the following page.
Feb. 10, 2026 Item #2 Page 57 of 226
20
General Fund Budgetary Highlights for Fiscal Year 2024-25
Management monitors revenues during the year and updates estimated revenue figures when new information is
received. General Fund revenue estimates were revised minimally during the year, as compared to the originally
budgeted estimates. Some of the factors that led to the $129,900 increase in revenue estimates included:
• Adult literacy and family literacy grant funds received during the year
• Developer contributions received during the year to be used to pay for developer funded studies and reports
The increase from the total original expenditure and transfers adopted budget to the final budget amounted to $17.4
million for expenditures and $33 for transfers and was primarily due to:
• A transfer of $33.00 was made from the Rancho Santa Fe Road Project Fund in order to close out the project
fund after developer refunds were issued to distribute excess cash that remained in the fund.
• $690,400 for the addition of six new police positions which included one traffic sergeant, three police officers,
one internet crimes against children detective and one digital forensic specialist
• $462,000 for negotiated pay and benefit increases for the Carlsbad Police Officers’ Association
• $850,000 for fire mitigation to improve fire protection plans and assist with brush management efforts
• $95,000 for a new electric powered vehicle for the City’s newly appointed Fire Marshal
• $40,000 for part-time staffing to add Sunday library hours to the City’s two main libraries
• $45,000 for a parks impact fee study consultant
• The appropriation of new grant money received during the fiscal year
• Developer funded reports and studies
Feb. 10, 2026 Item #2 Page 58 of 226
• Outstanding purchase orders on June 30, 2024, totaling $8.4 million carried forward into fiscal year
2024-25 planned to be used for:
o Purchase and outfitting of in car camera video systems for police patrol vehicles
o School crossing guard services
o Purchase of a new fire engine
o Contracted weed abatement services
o A public art collaborative project
o Homeless outreach and case management services
o A contracted green business network coordinator
o Consultant costs for the implementation of the city’s sustainable mobility plan
o Financial and sales tax auditing services
• The approved carryforward of other unspent funds on June 30, 2024, in the amount of $6.2 million planned
to be used for:
o Replacement of mechanical CPR devices for the fire department
o Remaining budget of $382K for the Safer Streets Together program support
o Funds in the amount of $5.2 million to help advance a railroad trenching project
o Additional Police take home vehicle program costs
o Police in car video systems
o Police SWAT medic gear
o Funds remaining on a California State Library family literacy grant
o Funds remaining on a state community correction officers wellness grant
o Unspent developer funds received for developer funded studies and reports
o Anticipated maintenance on permanent public art
o Funds for a Climate Action Plan update
o Manzanita Preserve vernal pools weeding
The difference of $22.3 million between the final budgeted expenditures plus transfers and the actual expenditures
plus transfers for the year, on a budgetary basis, can be generally summarized as follows:
• $8.1 million in outstanding encumbrances as of June 30, 2025, that were carried forward to fiscal year
2025-26.
• Unspent funds of $5.2 million for the Village railroad trenching project. This amount was requested for City
Council approval to be carried forward into fiscal year 2024-25 as part of the city’s carryforward process.
• Unspent budget for the City’s Safer Streets Together local state of emergency in the amount of $354,000.
This amount was requested for City Council approval to be carried forward into fiscal year 2025-26 as part
of the City’s carryforward process.
• Savings by various major service areas within the city make up the remaining difference. Current year
savings were generated from:
o The closure of purchase orders that had no activity during the past 12 months
o Unspent City Council contingency funds in the amount of $489,000
o Partial year unfilled staff vacancies across the city due to turnover amounted to $5.5 million
o Unspent professional services in the amount of $1.1 million
o Overall awareness of fiscal responsibility throughout the city
21Feb. 10, 2026 Item #2 Page 59 of 226
Capital Asset and Debt Administration
Capital Assets
At the end of fiscal year 2024-25, the city had recorded investments of over $1.2 billion in a broad range of capital
assets, including park facilities, land, buildings, roads, bridges, drainage facilities, water and wastewater lines,
Police and Fire vehicles, and other maintenance equipment. This number includes infrastructure assets of the
general government which are required per GASB.
Some of this year’s major capital asset additions included:
• Park Drive Street and Drainage Improvements
• Ruby G. Schulman Auditorium Improvements
• Avenida Encinas Coastal Rail Trail and Pedestrian
Improvements
• Stagecoach Park Community Garden
• Lake Calavera Outlet Improvements
• Carlsbad Boulevard Pedestrian Improvements
• Refurbishment of Police and Fire Headquarters
• Poinsettia Community Park Sidewalk Improvements
• Printer Replacement throughout City Facilities
• In-Car Video Systems for Police Vehicles
• Waterline Replacement along Carlsbad Boulevard
and Cannon Road
• Motorized Valve Replacement at Various Locations
• 1.5 million Gallon Reservoir for Recycled Water
• 2 Seagrave Fire Engines with Outfitting
• 14 Police Vehicle Replacements with Outfitting
In addition to carrying forward appropriations of $306.2 million for previously budgeted projects, the city’s fiscal year
2024-25 capital improvement budget appropriated an additional $15.6 million for capital projects.
These additional appropriations were principally for the following projects: Carlsbad Boulevard realignment
(Manzano Drive to Island Way), the city’s school traffic safety program, Faraday Avenue improvements, Hosp Grove
Park improvements, Kelly Drive Channel repair, the city’s park maintenance program, synthetic turf replacement at
Poinsettia Park, the city’s drainage improvement program, the city’s pavement management program, Encina
Wastewater capital projects, limited access pipeline relocation, SCADA improvements, water, sewer, and storm
drain system rehabilitation and replacement programs, Buena interceptor sewer improvements, Vista and Carlsbad
wastewater interceptor repairs, and Harding Street wastewater improvements.
Total
Percentage
Change Change
2024 2025 2024 2025 2024 2025 2024-25 2024-25
Land $160.2 $160.2 $9.4 $9.4 $169.6 $169.6 $0.0 0.0%
Construction in progress 24.3 32.6 18.6 19.9 42.8 52.5 9.7 22.6%
Buildings and other structures 153.8 153.9 44.2 44.4 198.1 198.3 0.3 0.1%
Land improvements 141.3 156.0 56.5 56.5 197.8 212.5 14.7 7.4%
Machinery and equipment 66.4 69.0 14.4 14.6 80.8 83.6 2.8 3.4%
Infrastructure 757.0 757.8 421.6 436.0 1,178.7 1,193.9 15.2 1.3%
Wastewater treatment facility - - 68.8 69.0 68.8 69.0 0.2 0.3%
Lease assets - land 0.2 0.3 - - 0.2 0.3 0.0 10.0%
Subscription assets 7.5 18.7 - - 7.5 18.7 11.2 148.9%
Intangibles 6.5 6.5 - - 6.5 6.5 - 0.0%
1,317.3 1,355.0 633.6 649.8 1,950.9 2,004.8 54.0 2.8%
Accumulated depreciation (502.9) (536.1) (265.2) (277.3) (768.1) (813.4) (45.3) 5.9%
Total 1 $814.4 $818.9 $368.4 $372.5 $1,182.8 $1,191.4 $8.6 0.7%
1. Beginning balance was restated to reflect an adjustment to capital assets in prior years. See Note 16 to the financial statement for
additional information regarding this restatement.
Activities Activities Total
CITY OF CARLSBAD'S CAPITAL ASSETS
(in millions of dollars)
Governmental Business-Type
22Feb. 10, 2026 Item #2 Page 60 of 226
These projects will be financed by development fees, infrastructure and replacement transfers from the General
Fund, special district fees and taxes, water and wastewater replacement reserves and other sources, including
grants and contributions from other agencies. More detailed information about the city’s capital assets is presented
in Note 6 of the financial statements and in the city’s Capital Improvement Program (CIP) document, which can be
found on the city’s website or obtained from the Administrative Services Department.
Long-term Debt
At fiscal year-end, the city had $24.8 million in loans, leases and subscriptions, an increase of $6.6 million from last
year, as shown in the table above. Regular payments were made on all the city’s outstanding loans, leases and
subscriptions. More detail about the city’s long-term liabilities is presented in Notes 11 and 12 of the financial
statements.
Economic Factors and Next Year’s Budgets and Rates for Fiscal Year 2025-26
At the time of developing the Fiscal Year 2025-26 Proposed Budget, much of the lingering effects of the
unprecedented inflationary levels experienced since 2021 have diminished. The Federal Reserve’s swift action to
combat the rise in inflation by increasing interest rate targets which has stabilized inflationary levels; however, new
trade and administrative policies have created new challenges not only for general consumers but for business
sectors such as life sciences that depend on federal grant funding. Fiscal year 2024-25 began to experience
year-over-year decreases in gross sales tax activities which indicates a drop in consumer confidence as well as the
impacts of sustained levels of inflation in recent years. Although inflation has cooled, we have yet to see inflation
levels return to more historically normal levels. As the city moves forward, monitoring trade and economic policies
from the federal administration will be paramount.
Prior to the pandemic, the city boasted a low unemployment rate of 2.9%. At the height of the pandemic,
unemployment spiked to 13.8%. With the pandemic’s economic impacts behind us, unemployment rates have
dropped dramatically. The March 2025 unemployment rate of 4.1% in Carlsbad represented an increase compared
to the prior year’s unemployment rate of 3.5%. The unemployment rate for the County of San Diego was 4.2% in
March 2025 and the State of California was 5.3%. Within the city, many employers are citing difficulty in finding and
retaining workers. Macroeconomic trends in the tech industry have been pushing unemployment up nationally, but
the labor market is still considered to be very tight.
At the end of March 2025, the two-year Treasury yield was 70 basis points lower, and the 10-year Treasury yield
was about 11 basis points lower, year-over-year. The inversion between the two-year and 10-year Treasury yield
increased about 10 basis points to 0.34 over the previous month-end. The average historical spread since 2003 is
about +130 basis points. The yield curve, inverted for a period of over two years, became positive in
September 2024 and has slowly increased month over month. The Federal Reserve’s interest rate targets are
currently at 4.25%-4.50%, and inflation has decreased but not to desired levels of 2%.
Maintaining good fiscal health must remain a top priority. Meeting this objective preserves the city’s ability to
continue providing important programs and services to the community. Past economic challenges and prudent
financial planning have provided opportunities for developing solutions to address lost revenues while preserving
vital services. The positive effect of inflation on some of the city’s revenue sources has been significant but is
considered one-time and something to be very closely monitored moving forward. As inflation is likely to decline in
the future, so will revenue growth. Disciplined spending and long-term financial planning remain critical to ensuring
the future sustainability of important city programs and services.
Total
Percentage
Change
2024 2025 2024 2025 2024 2025 2024-25
Leases $212,468 $184,418 $0 $0 $212,468 $184,418 -13.2%
Subscriptions 3,367,406 12,021,102 0 0 3,367,406 12,021,102 257.0%
Loans 0 0 14,581,129 12,606,259 14,581,129 12,606,259 -13.5%
Total $3,579,874 $12,205,520 $14,581,129 $12,606,259 $18,161,003 $24,811,779 36.6%
Activities Activities Total
CITY OF CARLSBAD'S OUTSTANDING DEBT
Governmental Business-Type
23Feb. 10, 2026 Item #2 Page 61 of 226
The Carlsbad economy is diverse, has strong industry clusters and is a leader in innovation. According to the most
recent biennial business survey of Carlsbad businesses, five key industry clusters are driving growth:
• Life sciences
• Information, communications and technologies
• Cleantech
• Sports innovation and design
• Hospitality and tourism
The gross regional product for Carlsbad is $18.6 billion, indicating that Carlsbad is the largest economy in the county
behind the City of San Diego. Companies that call Carlsbad home are at the forefront in areas of technology and
innovation, and the city’s hospitality and tourism industry generate the second-highest amount of transient
occupancy tax among the county’s 18 cities.
From 2024 to 2025, Carlsbad’s economy grew by roughly $800 million, with a total gross regional product of
$18.6 billion. Some industries saw growth, like hospitality and tourism, real estate and health care, while others saw
declines, like manufacturing, professional, scientific and technical services.
Carlsbad home prices have remained relatively steady over the past year. Consumer demand and low inventory
have kept mortgage rates elevated. Real estate experts have suggested that further interest rate drops will be
needed before mortgage rates drop further and transactions pick up. The current median home price in Carlsbad
is $1.5 million, an increase of 1.7% over the last year.
The Carlsbad office market has remained relatively stable during 2025 when compared to the region as a whole.
Rental rates have remained stable, and the trends suggest that Carlsbad’s commercial market is maintaining
resilience, supported by a diversified industry base and steady tenant demand even as broader regional markets
show signs of slowing.
There is still much uncertainty surrounding tariffs and their macro- and micro-economic impacts on the nation;
however, even in recent months, there has been extreme market volatility and further consumer demand pullback
with the risk of recession greatly looming.
Nearly 80% of General Fund revenues are derived from three sources: property tax, sales tax, and transient
occupancy tax, or TOT. Sales tax and TOT revenues tend to be much more sensitive to changes in economic
conditions, unlike property tax revenues, which remain relatively stable because of the mitigating effect of
Proposition 13, which limits annual growth in assessed values.
Property tax, the largest source of General Fund revenues, is expected to grow by $3.2 million, or 3.3%, over the
previous year’s estimates. Despite the extended rise and recent reduction in interest rates from the Federal
Reserve, Carlsbad’s residential real estate market has seen positive year-over-year growth, increasing by 4.3% to
a $1.54 million median price as of March 2025. The new federal administration’s implementation of tariffs has
intensified uncertainty in the markets. Future growth is expected to remain relatively flat although strong and
continued demand for relatively limited supply may stabilize any adverse factors. Commercial property assessed
values are expected to remain relatively flat given current interest rates coupled with the tariff implementation. In
response to the unprecedented inflationary increases experienced over the last three years, the Federal Reserve’s
interest rate hikes have made purchasing a home more difficult for borrowers. Inflation has cooled off and the
Federal Reserve has begun reducing target rates; however, with the implementation of tariffs, it is not yet known
which direction interest rates and home values will trend throughout the upcoming fiscal year. Proposition 8 allows
owners to have their property temporarily revalued if market value is lower than the factored base year value, posing
a risk that commercial property values could temporarily decrease.
Assessed values on the residential real estate side are expected to grow modestly, capped by California’s
Proposition 13. Adopted in 1978, Proposition 13 limits the annual increase in assessed values for property. Under
this proposition, assessed values (and the related property tax) can grow by no more than 2% per year. The value
upon which the tax is based is only increased to the full market value upon the sale of a property. In recent years,
residential activity has been driven by low interest rates on mortgages, pent-up demand that built during the
shutdown and an increase in the ability to work remotely. Now, increased rates, tariff implementation, and market
uncertainty will likely have adverse impacts compared to prior periods.
24Feb. 10, 2026 Item #2 Page 62 of 226
Property taxes tend to grow slowly unless there is a significant amount of development-related activity. In past
decades the city has seen robust growth in property tax revenue due to new development, high turnover of existing
homes and double-digit growth in housing prices. However, as opportunities for new development and growth
lessen, development-related revenues have slowed. In addition to current interest rates levels and the
implementation of tariffs, slower development combined with minimal commercial property transactions creates
more uncertainty regarding future growth.
Sales Tax revenues generally move in step with economic conditions but overall, Carlsbad’s economy has absorbed
the inflationary increases experienced since 2021. With the pandemic and its fiscal impacts behind us, new
uncertainty stems from the new federal administration and the implementation of tariffs. Consumer demand has
been diminishing because of the sustained levels of inflation; however, as inflation continues to cool off, impacts
from tariffs are not yet quantifiable.
The onset of the pandemic in March 2020 resulted in swift reductions in sales tax revenues. During fiscal year
2020-21, sales tax levels generally correlated with shelter-in-place mandates. As restrictions were lifted, the city’s
sales tax levels recovered. While the city ended fiscal year 2019-20 with $38 million in sales tax revenues, that
figure increased in 2020-21 to $44 million in sales tax revenues. Fiscal year 2021-22 experienced the most
accelerated recovery, ending the year at a historic high of $51.2 million in sales tax revenues. The fiscal year
2022-23 and 2023-24 sales tax estimates reflected uncertainty surrounding market and economic conditions like
inflation and impacts to disposable income. Despite the levels of inflation, growth has been positive over this period;
however, fiscal year 2024-25 indicated a slowdown in consumer demand because of the sustained levels of inflation
and the uncertainty regarding tariffs. Although we are seeing an overall increase in sales tax revenues year over
year, taxable receipts have declined by approximately 5% compared to the previous year after factoring for
one-time adjustments. As a result, staff have proposed a conservative estimate of $57.8 million in budgeted revenue
for fiscal year 2025-26 which represents a decrease of $1.5 million, or 2.6%, over fiscal year 2024-25 estimates.
The third highest General Fund revenue source is Transient Occupancy Tax, also known as TOT or hotel tax. TOT
was the revenue category most adversely impacted by COVID-19. From historic highs of $26 million in fiscal year
2018-19, the city experienced year-over-year decreases of 27% and 16%. Recovery from the pandemic was
estimated conservatively; however, fiscal year 2021-22 TOT revenues proved otherwise, reaching a historic high
of $32.4 million driven by the easing of restrictions, pent-up demand and an increase in average daily room rates.
This trend continued in fiscal year 2022-23, whereby actual revenues exceeded conservative estimates that were
applied to account for sustained levels of unprecedented inflation. Although fiscal year 2023-24 reported an overall
revenue slowdown, likely driven by sustained inflationary levels, fiscal year 2024-25 is projected to result in a
$1.0 million or 3.0% increase year over year. Although there is much economic uncertainty, mainly around tariffs, it
is not anticipated TOT will experience as much adverse impact as other revenue sources like sales tax. The fiscal
year 2025-26 budget estimates TOT to increase by $1.0 million or 3.0% compared to the previous year.
Business license taxes are closely tied to the health of the local economy and are projected to increase to
$6.8 million in fiscal year 2025-26. This represents growth of $0.2 million or 3% when compared to last year’s
current estimates. Increases in business license taxes tend to correlate with sales tax revenue increases as
businesses either pay taxes based on the amount of their gross receipts or based on set fees. There are currently
about 10,043 licensed businesses in the City of Carlsbad, 592 more than in the prior year with 6,744 of them located
in the city.
Since fiscal year 2022-23, the city’s budget has prioritized the prudent use of taxpayer funds through times of
economic uncertainty. Through maintenance and operations reductions to the elimination of 24 full-time equivalent
positions, the city saved over $5 million of ongoing expenditures. While formal budget reductions are not a part of
the fiscal year 2025-26 budget, responsible and prudent use of taxpayer dollars as well as maintaining a balanced
budget now and in the future remain the top priorities. Following years of significant budget reductions, the City
Manager directed departments to evaluate current operations and to communicate needs to ensure staff are able
to continue providing the highest level of service for the community. The fiscal year 2025-26 operating budget
reflects critical increases, primarily including the purchase of an aerial ladder fire truck, reclassification of EMTs to
Paramedic Firefighters, continuation of critical fire mitigation efforts, inflationary increases, Climate Action Plan
initiatives, and back-office support.
25Feb. 10, 2026 Item #2 Page 63 of 226
In support of CalPERS strategies for plan sustainability and as part of the city’s strategic, long-term approach to
financial management, the city actively manages its unfunded pension liability. Since fiscal year 2016-17, the City
Council has approved additional discretionary contributions of $56.4 million to decrease future costs of the city’s
unfunded actuarial liability and achieve a funded status of 80% in accordance with City Council Policy 86. In fiscal
year 2023-24, the City Council also approved the establishment of a Section 115 Pension Trust and a $10.0 million
initial contribution. Assets in the trust will be available to the city to maintain an 80% funded status, mitigate pension
rate volatility and potentially earn a higher rate of return than if the funds were left in the General Fund. This active
management helps ensure that resources are available to fulfill the city’s contractual promises to its employees and
minimizes the chance that funding these pension benefits will interfere with the city’s ability to provide essential
public services. Fiscal year 2025-26 reflects $28.6 million of General Fund contributions required to make up for
CalPERS’ abysmal investment performance in fiscal year 2021-22 as well as CalPERS’ missed target of 58% in
fiscal year 2022-23. This represents an increase of $3.3 million or 12.9% compared to the previous year.
All the factors above were considered when adopting the city’s General Fund budget for fiscal year 2025-26.
Budgeted expenditures increased by 1.7% from 238.5 million to $242.4 million. The total personnel budget for fiscal
year 2025-26 is $145.6 million, which is 8.1% more than the previous year’s personnel budget of $134.7 million.
The total maintenance and operations budget for fiscal year 2025-26 is $70.4 million, which is 7.2% higher than the
previous year’s budget of $65.7 million The total capital outlay budget for fiscal year 2025-26 is $2.7 million,
$2.2 million more than the previous year. The increase in the capital outlay budget is primarily due to the Fire
Department’s request to purchase a second front-line aerial ladder truck.
Transfers out of the General Fund are budgeted at $23.7 million, a $13.8 million decrease from the prior fiscal year.
Per the city’s Long Term General Fund Capital Funding Policy, a minimum of 6% of budgeted General Fund
revenues are transferred to the capital project funds to fund major new construction, maintenance and replacement
of city infrastructure and facilities and the city’s future major technology needs. This year $14.6 million is split
between the Infrastructure Replacement Fund (42%), General Capital Construction Fund (42%) and the Technology
Investment Capital Fund (16%).
The Storm Water Program is to receive $2.0 million for reimbursement of the General Fund portion of Storm Water
expenses as well as a one-time operating subsidy to ensure the program maintains a positive fund balance. In
recent years, the program has been drawing down on excess reserve funds; however, on an ongoing basis, future
expenses are expected to far outpace future revenues. Without additional ongoing revenue, assistance from the
General Fund in excess of $5 million may be needed on an annual basis.
The Median Maintenance and Street Tree Maintenance Special Revenue Funds are to receive $1.5 million to cover
cash shortfalls, as annual assessments collected from property owners do not cover annual operating expenditures.
The remaining transfers are attributable to additional one-time transfers made to the General Capital Construction
Fund ($2.8 million) and Infrastructure Replacement Fund ($2.8 million) to assist with funding the city’s general
capital construction into the future.
The city’s business-type activities reflect the following:
Enterprise funds total $146.9 million, which represents an increase of $28.4 million or 24% over the fiscal year
2024-25 adopted budget. The majority of this increase is due to a one-time budgeted transfer from the Recycled
Water Operating Fund to the Recycled Water Connection Fund of $16.4 million. This is related to a State Water
Resources Control Board loan reaching the payback period, whereby the Recycled Water Operating Fund will begin
repayment while the proceeds of the loan will remain in the associated capital fund. The Potable Water and Recycled
Water funds continue to operate and maintain critical infrastructure systems and provide the safe delivery of drinking
water, conservation outreach and treated irrigation water. The cost of purchased water continues to increase,
causing an overall increase in the Potable Water budget. The Wastewater fund provides reliable wastewater
collection services. The budget for this fund’s increase is primarily due to an increase in the transfers out to fund its
related capital improvement fund. The Solid Waste Management budget is also increasing due to inflationary impacts
to operating costs, including the city’s street sweeping contract.
26Feb. 10, 2026 Item #2 Page 64 of 226
Contacting the City’s Financial Management
This financial report is designed to provide the City of Carlsbad’s residents, taxpayers, customers, investors, and
creditors with a general overview of the city’s finances and to demonstrate the city’s accountability for the money it
receives. If you have any questions about this report or need additional information, contact the Finance
Department, 1635 Faraday Avenue, Carlsbad, California 92008, 442-339-2430, or find additional information at
www.carlsbadca.gov.
27Feb. 10, 2026 Item #2 Page 65 of 226
28Feb. 10, 2026 Item #2 Page 66 of 226
BBasic Financial Statements
29Feb. 10, 2026 Item #2 Page 67 of 226
30Feb. 10, 2026 Item #2 Page 68 of 226
GGovernment-Wide
Financial Statements
31Feb. 10, 2026 Item #2 Page 69 of 226
32Feb. 10, 2026 Item #2 Page 70 of 226
CITY OF CARLSBAD, CALIFORNIA
Statement of Net Position
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments 728,572,561$ 212,421,355$ 940,993,916$
Receivables (net of uncollectibles):
Accounts 209,568 12,543,072 12,752,640
Taxes 14,141,128 49,603 14,190,731
Accrued interest 9,465,623 1,366,486 10,832,109
Due from other governments 3,385,859 1,698,221 5,084,080
Notes and loans 27,932,612 - 27,932,612
Leases 13,438,855 5,159,398 18,598,253
Other 1,965,752 669,301 2,635,053
Internal balances (4,611,641) 4,611,641 -
Restricted assets:
Cash and investments 20,190,662 - 20,190,662
Inventories 108,616 1,583,341 1,691,957
Land held for resale 256,380 - 256,380
Prepaid costs 1,819,356 114,647 1,934,003
Capital assets (not being depreciated)192,848,105 29,247,441 222,095,546
Capital assets (net of accumulated depreciation/amortization)626,071,495 343,265,536 969,337,031
Total assets 1,635,794,931 612,730,042 2,248,524,973
DEFERRED OUTFLOWS OF RESOURCES
Pension-related 59,850,157 3,752,689 63,602,846
OPEB-related 2,114,218 442,650 2,556,868
Total deferred outflows of resources 61,964,375 4,195,339 66,159,714
LIABILITIES
Due to other governments 1,843 9,972,896 9,974,739
Accrued liabilities 19,298,777 5,014,211 24,312,988
Accrued interest 83,473 13,667 97,140
Deposits payable 8,942,385 1,259,919 10,202,304
Unearned revenue 2,642,796 428,983 3,071,779
Noncurrent liabilities:
Due within one year: loans, leases, subscriptions,
claims and compensated absences 26,159,240 1,763,096 27,922,336
Due in more than one year:
Net pension liability 200,188,006 14,204,657 214,392,663
Net OPEB liability 1,314 159 1,473
Loans, leases, subscriptions, claims
and compensated absences 48,285,815 12,271,937 60,557,752
Total liabilities 305,603,649 44,929,525 350,533,174
DEFERRED INFLOWS OF RESOURCES
Pension-related 144,883 23,069 167,952
OPEB-related 1,569,824 237,881 1,807,705
Lease-related 12,585,008 4,789,390 17,374,398
Total deferred inflows of resources 14,299,715 5,050,340 19,350,055
NET POSITION
Net investment in capital assets 800,957,925 357,667,004 1,158,624,929
Restricted:
Affordable housing 44,113,395 - 44,113,395
Lighting and landscaping districts 12,061,047 - 12,061,047
Capital projects 217,551,807 36,271,279 253,823,086
General government 283,528 - 283,528
Public safety 266,352 - 266,352
Community services 4,616,658 - 4,616,658
Pension section 115 trust 20,190,662 - 20,190,662
Unrestricted 277,814,568 173,007,233 450,821,801
Total net position 1,377,855,942$ 566,945,516$ 1,944,801,458$
June 30, 2025
Primary Government
See Notes to Financial Statements. 33Feb. 10, 2026 Item #2 Page 71 of 226
CITY OF CARLSBAD, CALIFORNIA
Statement of Activities
For the Year Ended June 30, 2025
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
Functions/Programs:
Primary government:
Governmental activities:
General government 35,360,814$ 224,316$ 1,323,929$ 2,108,190$
Public safety 117,371,990 7,759,889 9,664,299 1,736,000
Community services 86,314,642 7,270,288 21,125,210 331,958
Public works 50,035,109 3,024,569 543,683 21,784,749
Interest on long-term debt 46,907 - - -
Total governmental activities 289,129,462 18,279,062 32,657,121 25,960,897
Business-type activities:
Carlsbad Municipal Water District 67,189,826 52,437,692 2,484 731,067
Golf Course 10,742,483 11,720,977 - -
Wastewater 20,375,763 26,418,234 1,541 808,482
Solid Waste 5,607,571 2,477,971 59,205 -
Total business-type activities 103,915,643 93,054,874 63,230 1,539,549
Total primary government 393,045,105$ 111,333,936$ 32,720,351$ 27,500,446$
General revenues and transfers:
General revenues:
Property taxes
Sales taxes
Transient occupancy taxes
Franchise taxes
Business licenses taxes
Other taxes
Use of money and property
Other
Transfers
Total general revenues and transfers
Change in net position
Net position-beginning
Restatement-error correction
Restatement-change in accounting principle
Net position-beginning, as restated
Net position-ending
Program Revenues
See Notes to Financial Statements. 34Feb. 10, 2026 Item #2 Page 72 of 226
Governmental Business-Type
Activities Activities Total
(31,704,379)$ -$ (31,704,379)$
(98,211,802) - (98,211,802)
(57,587,186) - (57,587,186)
(24,682,108) - (24,682,108)
(46,907) - (46,907)
(212,232,382) - (212,232,382)
- (14,018,583) (14,018,583)
- 978,494 978,494
- 6,852,494 6,852,494
- (3,070,395) (3,070,395)
- (9,257,990) (9,257,990)
(212,232,382) (9,257,990) (221,490,372)
98,534,330 5,614,896 104,149,226
55,867,938 - 55,867,938
35,509,738 - 35,509,738
6,836,876 - 6,836,876
6,230,578 - 6,230,578
1,581,880 - 1,581,880
43,452,922 12,335,435 55,788,357
623,931 831,033 1,454,964
(350,000) 350,000 -
248,288,193 19,131,364 267,419,557
36,055,811 9,873,374 45,929,185
1,347,904,616 557,821,553 1,905,726,169
3,095,825 - 3,095,825
(9,200,310) (749,411) (9,949,721)
1,341,800,131 557,072,142 1,898,872,273
1,377,855,942$ 566,945,516$ 1,944,801,458$
Primary Government
Net (Expenses) Revenues and
Changes in Net Position
See Notes to Financial Statements. 35Feb. 10, 2026 Item #2 Page 73 of 226
36Feb. 10, 2026 Item #2 Page 74 of 226
FFund Financial Statements
37Feb. 10, 2026 Item #2 Page 75 of 226
CITY OF CARLSBAD, CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2025
Total Total
Nonmajor Governmental
General Funds Funds
ASSETS
Cash and cash equivalents 195,838,978$ 109,723,287$ 110,008,772$ 225,312,551$ 640,883,588$
Receivables (net of allowance for uncollectible):
Accounts 200,494 1,770 - 7,304 209,568
Taxes 14,138,702 2,426 - - 14,141,128
Accrued interest 1,256,740 706,650 709,164 6,228,201 8,900,755
Due from other governments 78,871 - - 3,306,988 3,385,859
Notes and loans 124,411 - - 27,808,201 27,932,612
Leases 9,386,676 957,245 - 3,094,934 13,438,855
Other 1,804,820 - - 160,932 1,965,752
Due from other funds 552,073 - - - 552,073
Inventories 12,491 - - 4,563 17,054
Prepaid costs - - - 345,099 345,099
Land held for resale - - - 256,380 256,380
Advances to other funds 1,223,480 516,587 - 4,550,000 6,290,067
Restricted assets:
Cash and cash equivalents 20,190,662 - - - 20,190,662
Total assets 244,808,398$ 111,907,965$ 110,717,936$ 271,075,153$ 738,509,452$
LIABILITIES
Accrued liabilities 7,554,242$ 181,129$ 2,679,665$ 6,685,191$ 17,100,227$
Unearned revenues 902,012 - - 1,740,784 2,642,796
Deposits payable 8,452,396 13,000 - 475,989 8,941,385
Due to other governments - - - 1,843 1,843
Due to other funds - - - 552,073 552,073
Advances from other funds - - - 6,290,067 6,290,067
Total liabilities 16,908,650 194,129 2,679,665 15,745,947 35,528,391
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 55,755 - - 10,583,800 10,639,555
Lease-related 8,691,795 873,642 - 3,019,571 12,585,008
Total deferred inflows of resources 8,747,550 873,642 - 13,603,371 23,224,563
FUND BALANCES (DEFICITS)
Nonspendable 1,360,382 - - 349,662 1,710,044
Restricted 20,190,662 110,840,194 - 168,052,593 299,083,449
Committed 8,500,000 - - - 8,500,000
Assigned 47,993,462 - 108,038,271 73,586,052 229,617,785
Unassigned 141,107,692 - - (262,472) 140,845,220
Total fund balances (deficits)219,152,198 110,840,194 108,038,271 241,725,835 679,756,498
Total liabilities, deferred inflows of resources,
and fund balances (deficits)244,808,398$ 111,907,965$ 110,717,936$ 271,075,153$ 738,509,452$
Community
Facilities
District #1
Infrastructure
Replacement
Fund
Capital Projects Funds
See Notes to Financial Statements. 38Feb. 10, 2026 Item #2 Page 76 of 226
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2025
Amounts reported for governmental activities in the Statement of Net Position are different because:
Total fund balances - governmental funds 679,756,498$
782,032,546
Deferred outflows-pension related 57,728,003
Deferred outflows-OPEB related 2,024,821
Deferred inflows-pension related (131,837)
Deferred inflows-OPEB related (1,466,248)
Total deferred outflows and inflows related to postemployment benefits 58,154,739
Long-term receivables 10,639,555
Total other long-term assets 10,639,555
54,459,878
Leases and subscriptions payable (278,305)
Compensated absences (14,752,526)
Net pension liability (192,155,244)
Net OPEB liability (1,199)
Total long-term liabilities (207,187,274)
Net position of governmental activities 1,377,855,942$
Long-term liabilities that are not due and payable in the current period,and therefore, are not
reported in the funds.
CITY OF CARLSBAD, CALIFORNIA
Capital assets,net of accumulated depreciation/amortization, used in governmental activities
are not financial resources and, therefore, are not reported in the funds.
Differences between expected and actual experiences, assumption changes and net
differences between projected and actual earnings,and contributions subsequent to the
measurement date for the postretirement benefits (pension and OPEB) are recognized as
deferred outflows of resources and deferred inflows of resources on the Statement of Net
Position.
Other long-term assets that are not available to pay for current period expenditures and,
therefore, are either labeled unavailable or not reported in the funds.
Internal service funds provide services to other funds on a cost-reimbursement basis. The
assets, deferred outflows of resources, liabilities,and deferred inflows of resources of the
internal service funds are included in governmental activities in the Statement of Activities.
See Notes to Financial Statements. 39Feb. 10, 2026 Item #2 Page 77 of 226
CITY OF CARLSBAD, CALIFORNIA
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2025
Total Total
Nonmajor Governmental
General Funds Funds
REVENUES
Taxes 202,924,969$ 1,636,371$ -$ 6,387,094$ 210,948,434$
Licenses and permits 3,445,294 - - - 3,445,294
Intergovernmental 3,376,736 - - 30,158,195 33,534,931
Contribution from property owners - 1,641,995 - 7,056,711 8,698,706
Charges for services 13,956,468 - - 4,303,051 18,259,519
Use of money and property 15,249,996 6,088,680 6,350,764 11,818,885 39,508,325
Fines and forfeitures 394,978 - - 812,509 1,207,487
Contributions 28,748 - - - 28,748
Miscellaneous 494,765 - - 132,375 627,140
Total revenues 239,871,954 9,367,046 6,350,764 60,668,820 316,258,584
EXPENDITURES
Current:
General government 22,162,430 53,561 - 270,094 22,486,085
Less: interdepartmental charges (5,462,411) - - - (5,462,411)
Public safety 99,682,899 - - 788,061 100,470,960
Community services 50,528,004 - - 24,723,552 75,251,556
Public works 23,113,745 - - 2,952,174 26,065,919
Capital outlay 552,290 1,092,112 13,976,516 26,603,141 42,224,059
Debt service:
Principal expense 13,160 - - 94,262 107,422
Interest and fiscal charges 1,167 - - 45,740 46,907
Total expenditures 190,591,284 1,145,673 13,976,516 55,477,024 261,190,497
Excess (deficiency) of revenues
over (under) expenditures 49,280,670 8,221,373 (7,625,752) 5,191,796 55,068,087
OTHER FINANCING SOURCES (USES)
Transfers in 33 - 4,979,226 24,858,452 29,837,711
Transfers out (37,547,678) - - (200,033) (37,747,711)
Inception of SBITAs 11,637 - - - 11,637
Proceeds from sales of capital assets 10,495 - - 389,032 399,527
Total other financing sources (uses)(37,525,513) - 4,979,226 25,047,451 (7,498,836)
Net change in fund balances 11,755,157 8,221,373 (2,646,526) 30,239,247 47,569,251
Fund balances-beginning, as previously reported 200,639,657 102,618,821 110,684,797 211,486,588 625,429,863
Restatement-change in accounting principle 6,757,384 - - - 6,757,384
Fund balances (deficit)-beginning, as restated 207,397,041 102,618,821 110,684,797 211,486,588 632,187,247
Fund balances (deficit)-ending 219,152,198$ 110,840,194$ 108,038,271$ 241,725,835$ 679,756,498$
Community
Facilities
District #1
Infrastructure
Replacement
Fund
Capital Projects Funds
See Notes to Financial Statements. 40Feb. 10, 2026 Item #2 Page 78 of 226
Reconciliation of the Statement of Revenues, Expenses and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2025
Amounts reported for governmental activities in the Statement of Activities are different because:
Net change in fund balances - total governmental funds:47,569,251$
Capital outlay 23,512,550
Depreciation/amortization expense (29,655,882)
Total adjustment (6,143,332)
Earned but unavailable tax revenues (177,491)
Earned but unavailable grant revenues 28,742
Earned but unavailable other revenues 3,525,566
Total adjustment 3,376,817
Loss/(gain) on disposal of capital assets (399,527)
Total adjustment (399,527)
Subscriptions and leases issued (11,637)
Principal payments 123,439
Total adjustment 111,802
6,165,592
Compensated absences 415,360
Changes in pension liabilities and related deferred outflows and inflows of resources (15,237,653)
Changes in OPEB liabilities and related deferred outflows and inflows of resources 197,501
Total adjustment (14,624,792)
Change in net position of governmental activities 36,055,811$
Internal service funds provide services to other funds on a cost-reimbursement basis. The net
revenue of certain activities of internal service funds is reported with governmental activities.
Some expenses reported in the Statement of Activities do not require the use of current financial
resources and, therefore, are not reported as expenditures in the governmental funds.
CITY OF CARLSBAD, CALIFORNIA
Governmental funds report capital outlays are expenditures. However,in the Statement of
Activities, the cost of these assets is allocated over their estimated useful lives and reported as
depreciation/amortization expense. This is the amount by which capital outlays exceeded
depreciation/amortization expense in the current period.
Revenues in the Statement of Activities that do not provide current financial resources are not
reported as revenues in the funds.
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-
ins, and donations) is to increase/(decrease) net position.
Bond and other debt proceeds provide current financial resources to governmental funds,but
issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond
and other debt principal is an expenditure in the governmental funds,but repayment reduces
long-term liabilities in the Statement of Net Position. Also, governmental funds report the effect
of premiums, discounts,and similar items when debt is first issued, whereas these amounts are
deferred and amortized in the Statement of Activities.
See Notes to Financial Statements. 41Feb. 10, 2026 Item #2 Page 79 of 226
CITY OF CARLSBAD, CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30, 2025
Governmental
Activities
Other Total
Enterprise Enterprise Internal
Funds Funds Service Funds
ASSETS
Current assets:
Cash and cash equivalents 134,755,427$ 59,653,740$ 18,012,188$ 212,421,355$ 87,688,973$
Receivables (net of uncollectibles):
Accounts, net of allowances 8,408,610 4,134,462 - 12,543,072 -
Taxes 49,603 - - 49,603 -
Accrued interest 875,910 384,534 106,042 1,366,486 564,868
Lease 190,575 - 64,129 254,704 -
Other - - 669,301 669,301 -
Prepaid costs - - 114,647 114,647 1,474,257
Due from other governments 1,655,067 43,154 - 1,698,221 -
Inventories 1,379,423 16,817 187,101 1,583,341 91,562
Total current assets 147,314,615 64,232,707 19,153,408 230,700,730 89,819,660
Noncurrent:
Leases Receivable, Noncurrent 3,787,840 - 1,116,854 4,904,694 -
Capital assets, net 210,870,163 141,251,672 20,391,142 372,512,977 36,887,054
Total noncurrent assets 214,658,003 141,251,672 21,507,996 377,417,671 36,887,054
Total assets 361,972,618 205,484,379 40,661,404 608,118,401 126,706,714
DEFERRED OUTFLOWS OF RESOURCES
Pension-related 2,236,865 985,968 529,856 3,752,689 2,122,154
OPEB-related 328,240 68,890 45,520 442,650 89,397
Total deferred outflows of resources 2,565,105 1,054,858 575,376 4,195,339 2,211,551
LIABILITIES
Current liabilities:
Accrued liabilities 3,566,636 515,073 932,502 5,014,211 2,198,550
Accrued Interest 13,667 - - 13,667 83,473
Unearned revenue - - 105,941 105,941 -
Deferred revenue - 10,000 313,042 323,042 -
Deposits payable 112,804 - 1,147,115 1,259,919 1,000
Due to other governments 9,509,496 463,400 - 9,972,896 -
Compensated absences 189,379 53,455 42,920 285,754 318,080
Loans and subscriptions 1,477,342 - - 1,477,342 1,637,077
Claims and judgments - - - - 21,130,870
Total current liabilities 14,869,324 1,041,928 2,541,520 18,452,772 25,369,050
Noncurrent liabilities:
Compensated absences 757,520 213,819 171,680 1,143,019 1,272,200
Claims and judgments - - - - 24,765,860
Loans and subscriptions 11,118,737 10,181 - 11,128,918 10,290,137
Net pension liability 8,466,969 3,732,082 2,005,606 14,204,657 8,032,762
Net OPEB liability 94 35 30 159 115
Total noncurrent liabilities 20,343,320 3,956,117 2,177,316 26,476,753 44,361,074
Total liabilities 35,212,644 4,998,045 4,718,836 44,929,525 69,730,124
DEFERRED INFLOWS OF RESOURCES
Pension-related 13,751 6,061 3,257 23,069 13,046
OPEB-related 156,384 46,773 34,724 237,881 103,576
Lease-related 3,686,133 - 1,103,257 4,789,390 -
Total deferred inflows of resources 3,856,268 52,834 1,141,238 5,050,340 116,622
NET POSITION
Net investments in capital assets 196,266,042 141,009,820 20,391,142 357,667,004 24,959,840
Restricted for capital projects 23,137,670 13,133,609 - 36,271,279 -
Unrestricted 106,065,099 47,344,929 14,985,564 168,395,592 34,111,679
Total net position 325,468,811$ 201,488,358$ 35,376,706$ 562,333,875 59,071,519$
Adjustment to report the cumulative internal balance for the net effect of the activity
between the internal service funds and the enterprise funds over time 4,611,641
Net position of business-type activities 566,945,516$
Business-Type Activities
Carlsbad
Municipal
Water District Wastewater
See Notes to Financial Statements. 42Feb. 10, 2026 Item #2 Page 80 of 226
CITY OF CARLSBAD, CALIFORNIA
Statement of Revenues, Expenses and Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2025
Governmental
Activities
Other Total
Enterprise Enterprise Internal
Funds Funds Service Funds
OPERATING REVENUES
Sales and service charges 51,546,148$ -$ -$ 51,546,148$ -$
Wastewater service charges - 26,418,234 - 26,418,234 -
Golf course operations - - 11,720,977 11,720,977 -
Other charges for services 891,544 - 2,377,047 3,268,591 43,560,413
Miscellaneous 69,674 148,880 612,479 831,033 532,205
Total operating revenues 52,507,366 26,567,114 14,710,503 93,784,983 44,092,618
OPERATING EXPENSES
Administration and general 23,577,631 9,537,631 5,667,591 38,782,853 17,489,455
Encina plant operations 1,986,927 5,794,014 - 7,780,941 -
Purchased water 33,656,470 - - 33,656,470 -
Golf course operations - - 9,960,086 9,960,086 -
Depreciation/amortization 7,806,034 5,094,579 759,088 13,659,701 7,559,973
Claims and premiums - - - - 23,472,521
Fuels and supplies - - - - 1,752,508
Small equipment purchases - - - - 891,485
Total operating expenses 67,027,062 20,426,224 16,386,765 103,840,051 51,165,942
Operating income (loss)(14,519,696) 6,140,890 (1,676,262) (10,055,068) (7,073,324)
NONOPERATING REVENUES (EXPENSES)
Taxes 5,614,896 - - 5,614,896 -
Intergovernmental 2,484 1,541 160,129 164,154 -
Interest expense (297,232) - - (297,232) (120,713)
Investment income (loss)8,331,331 2,906,406 1,097,698 12,335,435 4,058,810
Gain (loss) on disposal of capital assets - - - - 96,416
Total nonoperating revenues (expenses)13,651,479 2,907,947 1,257,827 17,817,253 4,034,513
Income (loss) before capital contributions and transfers (868,217) 9,048,837 (418,435) 7,762,185 (3,038,811)
Transfers In - - 350,000 350,000 7,560,000
Capital contributions:
Capital restricted fees and grants 488,645 736,169 - 1,224,814 -
Developer constructed assets 242,422 72,313 - 314,735 1,866,043
Change in net position (137,150) 9,857,319 (68,435) 9,651,734 6,387,232
Net position-beginning 326,084,140 191,823,074 35,524,338 553,431,552 53,474,095
Restatement-change in accounting principle (478,179) (192,035) (79,197) (749,411) (789,808)
Net position-beginning, as restated 325,605,961 191,631,039 35,445,141 552,682,141 52,684,287
Net position-ending 325,468,811$ 201,488,358$ 35,376,706$ 562,333,875$ 59,071,519$
Change in net position 9,651,734
Adjustment for the net effect of the current year activity between
the internal service funds and the enterprise funds 221,640
Changes in net position of business-type activities 9,873,374$
Business-Type Activities
Carlsbad
Municipal
Water District Wastewater
See Notes to Financial Statements.43Feb. 10, 2026 Item #2 Page 81 of 226
CITY OF CARLSBAD, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
Governmental
Activities
Other
Enterprise Internal
Funds Totals Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 51,807,379$ 27,066,969$ 14,115,698$ 92,990,046$ -$
Receipts from internal service - - - - 44,194,338
Payments to suppliers and service providers (56,696,836) (16,502,460) (5,349,393) (78,548,689) (2,863,490)
Payments to employees for salaries and benefits - - (9,909,573) (9,909,573) (15,379,181)
Claims - - - - (9,566,246)
Other receipts (payments)891,544 148,880 588,455 1,628,879 506,914
Net cash provided by (used for)
operating activities (3,997,913) 10,713,389 (554,813) 6,160,663 16,892,335
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers from other funds - - 350,000 350,000 7,560,000
Interest paid on non-capital debt (7,919) - - (7,919) -
Taxes 5,609,311 - 160,129 5,769,440 -
Operating grants and contributions (157,768) - - (157,768) -
Net cash provided by (used for)
noncapital financing activities 5,443,624 - 510,129 5,953,753 7,560,000
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Proceeds from capital debt 104,146 - - 104,146 -
Capital contributions 2,226,993 736,169 - 2,963,162 -
Acquisition and construction of capital assets (12,079,941) (3,569,739) (182,928) (15,832,608) (4,895,235)
Principal paid on capital debt (2,079,012) - - (2,079,012) (3,338,387)
Interest paid on capital debt (297,232) - - (297,232) (88,520)
Proceeds from sales of assets - - 23,308 23,308 303,348
Net cash provided by (used for)
capital and related financing activities (12,125,046) (2,833,570) (159,620) (15,118,236) (8,018,794)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 8,431,667 2,789,408 514,746 11,735,821 3,870,528
Leasing activities (254,148) - 552,165 298,017 -
Net cash provided by (used for)
investing activities 8,177,519 2,789,408 1,066,911 12,033,838 3,870,528
Net increase (decrease) in
cash and cash equivalents (2,501,816) 10,669,227 862,607 9,030,018 20,304,069
Cash and cash equivalents-beginning 137,257,243 48,984,513 17,149,581 203,391,337 67,384,904
Cash and cash equivalents-ending 134,755,427$ 59,653,740$ 18,012,188$ 212,421,355$ 87,688,973$
Business-Type Activities
Carlsbad
Municipal
Water District Wastewater
See Notes to Financial Statements. 44Feb. 10, 2026 Item #2 Page 82 of 226
CITY OF CARLSBAD, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
Governmental
Activities
Other
Enterprise Internal
Funds Totals Service Funds
Business-Type Activities
Carlsbad
Municipal
Water District Wastewater
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Operating income (loss)(14,519,696)$ 6,140,890$ (1,676,262)$ (10,055,068)$ (7,073,324)$
Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation/amortization expense 7,806,034 5,094,579 759,088 13,659,701 7,559,973
Residual nonoperating revenues and expenses - (1,607,097) - (1,607,097) -
(Increase) decrease in accounts receivable 187,626 784,048 (86,424) 885,250 9,792
(Increase) decrease in inventories (453,083) (1,427) 12,906 (441,604) 153,421
(Increase) decrease in prepaid items - - 5,661 5,661 337,482
Increase (decrease) in accounts payable - 52,152 - 52,152 -
Increase (decrease) in accrued liabilities 182,866 12,696 108,228 303,790 460,862
Increase (decrease) in deposits payable 3,931 (135,313) 80,074 (51,308) -
Increase (decrease) in compensated absences 1,670,839 98,279 112,309 1,881,427 965,317
Increase (decrease) in claims and judgments 528,815 - - 528,815 13,906,275
Increase (decrease) in net pension liability 617,260 272,077 146,212 1,035,549 585,606
Increase (decrease) in net OPEB liability (22,505) 2,505 (16,605) (36,605) (13,069)
Total adjustments 10,521,783 4,572,499 1,121,449 16,215,731 23,965,659
Net cash provided by (used for)
operating activities (3,997,913)$ 10,713,389$ (554,813)$ 6,160,663$ 16,892,335$
SCHEDULE OF NON-CASH NONCAPITAL, CAPITAL,
AND INVESTING ACTIVITIES
Unrealized gain/(loss) on fair value of investments 3,591,248$ 1,249,170$ 416,137$ 5,256,555$ 1,706,350$
Purchase of capital assets on account 541,555 44,803 - 586,358 -
Contributions of capital assets 242,422 72,313 - 314,735 1,866,043
See Notes to Financial Statements. 45Feb. 10, 2026 Item #2 Page 83 of 226
Private
Purpose Custodial
Trust Fund Funds
ASSETS
Cash and cash equivalents 236,519$ 4,364,607$
Restricted assets:
Cash and investments - 2,522,407
Receivables:
Assessments, net of allowance for uncollectible - 914,502
Accrued interest 1,525 28,135
Loans receivable 4,757,808 -
Total assets 4,995,852 7,829,651
LIABILITIES
Accrued liabilities - 2,292,002
Due to bondholders - 5,537,649
Total liabilities - 7,829,651
NET POSITION
Restricted for:
Redevelopment obligation retirement purposes 4,995,852 -
Total net position 4,995,852$ -$
CITY OF CARLSBAD, CALIFORNIA
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2025
See Notes to Financial Statements. 46Feb. 10, 2026 Item #2 Page 84 of 226
Private
Purpose Custodial
Trust Fund Funds
ADDITIONS
Assessment district collections -$ 10,378,663$
Income from property and investments 12,970 288,384
Taxes - 1,354,013
Interest on housing loans 112,500 -
Miscellaneous - 7,056
Total additions 125,470 12,028,116
DEDUCTIONS
Payments to bondholders and beneficiaries - 11,848,714
Administrative expenses - 179,402
Total deductions - 12,028,116
Net increase (decrease) in fiduciary net position 125,470 -
Net position-beginning 4,870,382 -
Net position-ending 4,995,852$ -$
CITY OF CARLSBAD, CALIFORNIA
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2025
See Notes to Financial Statements. 47Feb. 10, 2026 Item #2 Page 85 of 226
48Feb. 10, 2026 Item #2 Page 86 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Carlsbad, California (“City”), was incorporated on July 16, 1952. The City was a general law city until
2008, when the citizens in Carlsbad voted and approved the City to become a charter city. The City operates
under a Council-Manager form of government and provides the following services: general government, public
safety, community services and public works.
The accounting policies of the City and its component units conform to accounting principles generally accepted
in the United States of America as applicable to governmental units. The following is a summary of the more
significant policies:
A. Description and Scope of the Reporting Entity
As required by accounting principles generally accepted in the United States of America, these financial
statements present the financial position of the City and its component units, entities for which the City is
considered to be financially accountable. The City is considered to be financially accountable for an organization if
the City appoints a voting majority of that organization’s governing body and the City is able to impose its will on
that organization or there is a potential for that organization to provide specific financial benefits to or impose
specific financial burdens on the City. The City is also considered to be financially accountable for an organization
if that organization is fiscally dependent upon the City (i.e., it is unable to adopt its budget, levy taxes, set rates or
charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included
as component units if the nature and significance of their relationship with the City are such that their exclusion
would cause the City’s financial statements to be misleading or incomplete.
Based upon the above criteria, the component units of the City are the Housing Authority of the City of Carlsbad,
the City of Carlsbad Public Improvement Corporation, the Carlsbad Public Financing Authority, and the
Carlsbad Municipal Water District. The City does not issue separate financial statements for these component
units.
Since the City Council serves as the governing board for these component units and there is either a financial
benefit/burden relationship between the component unit and City or the management of the City has the
operational responsibility for the component unit, all of the City’s component units are considered to be blended
component units. Blended component units, although legally separate entities, are in substance part of the City’s
operations, and so data from these units is reported with the interfund data of the primary government.
B. Government-wide and Fund Financial Statements
The Government-wide Financial Statements (i.e., the Statement of Net Position and the Statement of Activities)
report information on all of the nonfiduciary activities of the City and its blended component units. The effect of
interfund activity has been removed from these statements. Governmental activities, which normally are supported
by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a
significant extent on user fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment
are offset by program revenues. Direct expenses are those that are clearly identifiable to a specific function or
segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit
from goods, services, or privileges provided by a given function or segment; and 2) grants and contributions that
are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly classified as program revenues are reported as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even
though the latter are excluded from the Government-wide Financial Statements. Major individual governmental
funds and major individual enterprise funds are reported in separate columns in the Fund Financial Statements.
49Feb. 10, 2026 Item #2 Page 87 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The Government-wide Financial Statements are reported using the economic resources measurement focus and
the accrual basis of accounting, as are the Proprietary Fund and Fiduciary Fund Financial Statements. Revenues
are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. In applying the susceptible to accrual concept to intergovernmental revenues, the legal and
contractual requirements of the individual programs are used as guidance. Property taxes are recognized as
revenues in the year for which they are levied.
Governmental Fund Financial Statements are reported using the current financial resources measurement focus
and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and
available. Revenues are considered available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be
available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when
a liability is incurred, as under accrual accounting, as long as the expenditure reflects a near-term cash outflow.
Principal and interest on long-term debt are recorded as fund liabilities when due.
Revenues that are accrued include real property taxes, sales tax, transient occupancy taxes (TOT), franchise
taxes, highway users’ tax, interest, and some state and federal grants.
Real property taxes are levied on October 15 against property owners of record on January 1 of that year. The
taxes are due in two installments, on November 1 and February 1, and become delinquent after December 10 and
April 10, respectively. Tax liens attach annually as of 12:01 a.m. on the first day of January in the fiscal year for
which the taxes are levied. Under the provisions of NCGA (National Council on Government Accounting)
Interpretation 3, property tax revenue is recognized in the fiscal year for which the taxes have been levied, provided
it is collected within 60 days of the end of the fiscal year.
Custodial funds, which are a type of fiduciary fund, account for assets held by the City for other governments or
individuals. These funds report using an economic resources measurement focus and include all inflows, outflows
and balances reflecting the fund’s net position.
The City reports the following major governmental funds:
• The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
• The Community Facilities District (CFD) No. 1 capital project fund is used to account for the receipt of
taxes and fees charged to developers that are restricted for civic facilities, parks, and road segments.
• The Infrastructure Replacement (IRF) capital project fund is used to account for transfers from the General
Fund and expenditures for the replacement of major infrastructure throughout the City.
The City reports the following major enterprise funds:
• The Carlsbad Municipal Water District (CMWD) enterprise funds are used to account for the operation,
maintenance, and capital facility financing of the City’s potable and recycled water systems.
• The Wastewater enterprise funds are used to account for the operation, maintenance, and capital facility
financing of the City’s wastewater system.
50Feb. 10, 2026 Item #2 Page 88 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Additionally, the City reports the following fund types:
• Internal Service funds account for fleet maintenance and replacement, information technology, risk
management and workers’ compensation services provided to other departments or agencies of the City.
• The Custodial funds account for assets held by the City for other governments or individuals. These funds
include debt service transactions on assessment district bonds for which the City is not obligated and the
City’s Carlsbad Tourism Business Improvement District.
• The Private-Purpose Trust fund accounts for the activities of the Redevelopment Obligation Retirement
Fund, which accumulates resources for obligations previously incurred by the former City of Carlsbad
Redevelopment Agency (RDA).
As a general rule, the effect of interfund activity has been eliminated from the Government-wide Financial
Statements. An exception to this general rule is the charges between the Carlsbad Municipal Water District and
various other functions of the City. Elimination of these charges would distort the direct costs and program revenues
reported for the various functions concerned.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses result from providing services and producing and delivering goods in connection with a proprietary fund’s
principal ongoing operations. The principal operating revenues of the City’s proprietary funds are charges to
customers for sales and services. The City also recognizes new account charges, late fees, and contributions from
other agencies as operating revenues. Operating expenses for enterprise and internal service funds include the cost
of sales and services, general and administrative expenses, and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted
resources first, then unrestricted resources as they are needed. When expenditures are incurred for purposes for
which both restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, restricted
revenue will be applied first. When expenditures are incurred for purposes for which committed, assigned, or
unassigned fund balances are available, the policy is to apply committed fund balance first, then assigned fund
balance and finally unassigned fund balance.
D. Cash and Investments
Cash includes amounts in demand and time deposits. Investments are reported in the accompanying balance
sheet at fair value, except for certain investment contracts that are reported at cost because they are not
transferable, and they have terms that are not affected by changes in market interest rates.
Changes in fair value that occur during a fiscal year are recognized as income from property and investments
reported for that fiscal year. Income from property and investments includes interest earnings; changes in fair
value; any gains or losses realized upon the liquidation, maturity, or sale of investments; property rentals and the
sale of City owned property.
The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this
pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by
the pooled investments is allocated to the various funds on a monthly basis, based on each fund’s average cash
and investments balance. Restricted cash and investments represent amounts that are restricted under the terms
of debt agreements as well as amounts held in the City’s Section 115 Pension Trust.
51Feb. 10, 2026 Item #2 Page 89 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Inventories and Prepaid Expenses
Prepaids and inventories are valued at cost and are recorded as expenditures or expenses when consumed rather
than when purchased. The City uses different inventory valuation methods based on the type of inventory and the
operational practices of each fund:
In the Carlsbad Municipal Water District and Wastewater funds, materials and parts are valued using the first-in,
first-out method. Water stored in inventory is valued using the weighted-average cost method. In all other funds,
including internal service and governmental activities, inventories of supplies, materials, and parts are valued using
the weighted-average cost method.
Cost is determined using either a perpetual or periodic inventory system, depending on departmental operations.
Inventories are stated at the lower of cost or market when applicable. The City applies its chosen method
consistently within each fund type. Any change in inventory valuation method would be accounted for as a change
in accounting principle and disclosed in the period of adoption.
F. Compensated Absences
The City recognizes a liability for compensated absences for leave time that (1) has been earned for services
previously rendered by employees, (2) accumulates and is allowed to be carried over to subsequent years, and
(3) is more likely than not to be used as time off or settled (for example, paid in cash to the employee) during or
upon separation from employment.
Based on the criteria listed, two types of leave qualify for liability recognition for compensated absences, vacation
and sick leave. The liability for compensated absences is reported as incurred in the government-wide and
proprietary fund financial statements. A liability for compensated absences is recorded in the governmental funds
only if the liability has matured because of employee resignations or retirements. The liability for compensated
absences includes salary-related benefits, where applicable.
• Vacation - the City’s policy permits employees to accumulate earned but unused vacation benefits, which
are eligible for payment at the employee’s current pay rate upon separation from employment.
• Sick Leave - the City’s policy permits employees to accumulate earned but unused sick leave. All sick
leave lapses and is forfeited when employees leave employment with the City and, upon separation from
service, no monetary obligation exists. However, a liability for the estimated value of sick leave that will be
used by employees as time off is included in the liability for compensated absences.
G. Risk Management
The City accounts for its general liability and workers’ compensation activities in internal service funds. The funds
are responsible for collecting premiums from other City funds and departments and paying claims, settlements, and
insurance premiums. Interfund premiums are based on the insured fund’s claims experience. Incurred but not
reported claims are accrued at year-end if material.
H. Unbilled Services
Unbilled water and wastewater revenues of the enterprise funds are recognized as earned when the services are
used.
52Feb. 10, 2026 Item #2 Page 90 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I. Capital Assets
Capital assets, which include land (including right-of-way), buildings, equipment, lease assets, subscription assets,
and infrastructure assets (e.g., roads, bridges, traffic signals, water and wastewater systems, and related items),
are reported in the applicable governmental or business-type activities columns in the Government-wide Financial
Statements. Capital assets are defined by the City as machinery and equipment and capital construction with an
initial, individual cost of more than $10,000 and an estimated useful life in excess of one year; and intangible
assets such as computer software with an initial cost of more than $100,000, and an estimated useful life in excess
of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.
Donated capital assets are recorded at acquisition value at the date of donation.
The cost of normal maintenance and repairs that do not add to the value of an asset or materially extend an asset’s
useful life are not capitalized. Construction in progress costs are transferred to their respective capital asset
category upon completion.
Depreciation and amortization on right-to-use assets is charged to operations using the straight-line method based
on the estimated useful life of an asset. The estimated useful lives of depreciable assets are as follows:
Years
Buildings and other structures 10 - 50
Improvements other than buildings 10 - 50
Infrastructure 10 - 100
Intangible assets 5 - 10
Machinery and equipment 5 - 20
Wastewater treatment facility (including equipment) 5 - 75
Lease and subscription assets Term of agreement or life
of asset, whichever is
shorter
The City has capitalized all general infrastructure assets acquired or constructed. In addition, the land upon which
the streets and roads are constructed (right-of-way) has also been valued and capitalized.
J. Unearned Revenue
The unearned revenue reported in the City’s financial statements represents money received during the current or
previous fiscal years that has not been earned by the City as of the end of the fiscal year. These monies will be
recognized as revenues in subsequent fiscal years once the revenue has been earned.
K. Deferred Outflows
In addition to assets, the statement of financial position reports a separate section for deferred outflows of
resources. This separate financial statement element, deferred outflows of resources, represents a consumption of
net assets that applies to a future period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The City has pension-related and other postemployment benefits related items in
this category.
53Feb. 10, 2026 Item #2 Page 91 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
L. Deferred Inflows
In addition to liabilities, the statement of financial position reports a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of
net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until
that time. The City has three types of items that qualify for reporting in this category.
The first item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental
funds report unavailable revenues from two sources: interest on advances and loans and grants. This amount is
deferred and recognized as an inflow of resources in the period that the amount becomes available.
The second item is reported in the government-wide and proprietary funds’ respective statements of net position.
The City has pension related and other postemployment benefits related items in this category.
The third item is reported in the governmental funds’ balance sheet and the government-wide and proprietary
funds’ respective statements of net position. The City has lease related items in this category.
M. Interfund Transactions
Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the
fiscal year is referred to as either “due to/from other funds” (short-term interfund loans), or “advances to/from other
funds” (long-term interfund loans). Any residual balances outstanding between the governmental activities and
business-type activities are reported in the Government-wide Financial Statements as “internal balances.”
The portion of fund balance associated with amounts that have been disbursed to other funds in the form of
long-term interfund advances have been classified as nonspendable unless the funds associated with repayment
of the advance are otherwise restricted for a specific purpose.
N. Receivables and Payables
All trade, service and tax receivables are shown net of an allowance for uncollectibles. The utility billing receivable
allowance is equal to 2% of outstanding billings at June 30, 2025, the ambulance billing receivable allowance is
equal to 40% of outstanding billings at June 30, 2025, and the trade receivable allowance is equal to 20% of the
total of all outstanding receivable balance at June 30, 2025. The only exceptions to these rules are receivables that
were subsequently paid or were known to be collectible at year-end, which were not reserved for at June 30, 2025,
and any receivables due from other public agencies.
O. Loan and Reimbursement Receivable
The accompanying financial statements reflect the recording of certain loans receivable that represent loans made
to various organizations and individuals. In certain cases, the amount of collection is dependent upon future
residual receipts to be generated by the property or contingent upon the ability of the owner to sell the property at
an amount sufficient to pay all liens against the property, including the obligation to the City. All loan and
reimbursement receivables are shown net of an allowance for uncollectibles.
P. Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of
monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of
formal budgetary control in the governmental funds. Unexpended and unencumbered appropriations lapse at fiscal
year-end unless City Council takes action in the form of a resolution to continue the appropriation into the following
fiscal year.
54Feb. 10, 2026 Item #2 Page 92 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Q. Net Position
Net position represents the differences between assets and deferred outflows, and liabilities and deferred inflows.
Net investment in capital assets, consist of capital assets, net of accumulated depreciation, reduced by the
outstanding balances of any borrowings, used for the acquisition, construction or improvement of those assets.
Net investment in capital assets excludes unspent debt proceeds. Net position is reported as restricted when there
are limitations imposed on its use either through the enabling legislation adopted by the City or through external
restrictions imposed by creditors, grantors, or laws or regulations of other governments. It is the City’s policy to
consider restricted net position to have been depleted before unrestricted net position is applied.
R. Cash Flows
Statements of cash flows are presented for proprietary fund types. Cash and cash equivalents include all
unrestricted and restricted highly liquid investments with original purchase maturities of three months or less.
Pooled cash and investments in the City’s Treasury represent monies in a cash management pool and such
accounts are similar in nature to demand deposits.
S. Long-term Obligations
In the Government-wide Financial Statements, and proprietary fund types in the Fund Financial Statements,
long- term debt and other long-term obligations are reported as liabilities in the applicable governmental activities,
business-type activities, or proprietary fund type Statement of Net Position.
T. Pensions
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of the City’s California Public
Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the fiduciary net
position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit
payments (including refunds of employee contributions) are recognized when due and payable in accordance with
the benefit terms. Investments are reported at fair value.
Valuation Date (VD)June 30, 2023
Measurement Date (MD)June 30, 2024
Measurement Period (MP)July 1, 2023 to June 30, 2024
U. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB asset/liability, deferred outflows of resources and deferred inflows
of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan
(OPEB Plan), the assets of which are held by the California Employers’ Retiree Benefit Trust (CERBT), and
additions to and deductions from the OPEB Plan’s fiduciary net position have been determined by an
independent actuary. For this purpose, benefit payments are recognized when currently due and payable in
accordance with the benefit terms. Investments are reported at fair value.
Generally accepted accounting principles require that the reported results must pertain to liability and fiduciary net
position information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date (VD)June 30, 2023
Measurement Date (MD)June 30, 2024
Measurement Period (MP)July 1, 2023 to June 30, 2024
55Feb. 10, 2026 Item #2 Page 93 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
V. Fair Value Measurements
Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The
three levels of fair value hierarchy are described as follows:
Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in
active markets.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly, and fair value is determined through the use of models or other valuation
methodologies including:
• Quoted prices for similar assets or liabilities in active markets;
• Quoted prices for identical or similar assets or liabilities in markets that are inactive;
• Inputs other than quoted prices that are observable for the asset or liability; and
• Inputs that are derived principally from or corroborated by observable market data by correlation or other
means.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
These unobservable inputs reflect the City’s own assumptions about the inputs market participants would use
in pricing the asset or liability (including assumptions about risk). These unobservable inputs are developed
based on the best information available in the circumstances and may include the City’s own data.
W. Fund Balances
Nonspendable Fund Balance includes amounts that cannot be spent because they are either not spendable in
form (such as inventory) or legally or contractually required to be maintained intact (such as endowments).
Restricted Fund Balance Balance includes amounts that can be spent only for specific purposes stipulated by the
constitution, external resource providers, or through enabling legislation. If the City Council action limiting the use
of funds is included in the same action (legislation) that created (enables) the funding source, then it is restricted.
Committed Fund Balance includes amounts that can be used only for the specific purposes determined by a
formal action of the City Council. It includes legislation (council action) that can only be overturned by new
legislation requiring the same type of voting consensus that created the original action. Therefore, if the City
Council action limiting the use of the funds is separate from the action (legislation) that created (enables) the
funding source, then it is committed, not restricted. The City considers a resolution to constitute the formal action
of the City Council that is necessary to commit fund balance.
56Feb. 10, 2026 Item #2 Page 94 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Assigned Fund Balance includes amounts that are designated or expressed by the City Council but does not
require a formal action like a resolution or ordinance. The City Council has delegated the authority for the City
Manager to carry forward certain unspent budget amounts for specific one-time purposes if the amount is equal or
less than $100,000 per item to the next fiscal year. The City Council has authorized, through resolution, that all
outstanding encumbrances at the end of the fiscal year and certain unspent budgeted amounts over $100,000 per
item be carried forward into the next fiscal year. The assigned fund balance also includes an assignment for
economic uncertainty, asset replacement, an assignment of General Fund budget surplus for the railroad
trenching project and the remainder of program funds in the safer streets program, all of which were approved by
the City Council through a resolution. These amounts are shown as assigned fund balance at the end of the fiscal
year:
• General Government – unspent funds for a general City fee study update, general election expenses and a
subscription for digital publications for legal research. Encumbrances rolled forward include financial audit
services, sales tax auditing services, recruitment and background investigation services, website content and
social media management services for economic development, grant writing services, lobbyist services, funds
for a compensation survey, talent attraction design services and various smaller professional service
contracts for communications, human resources, finance and the City Manager’s office.
• Public Safety – unspent funds for the outfitting for five police vehicles, safety equipment for new sworn
officers and unspent grant funds on a police officer wellness and mental health grant. Encumbrances rolled
forward include the purchase and outfitting of in car camera video systems for police patrol vehicles, the
purchase of a new fire engine, contracted weed abatement and wildfire mitigation plan services, background
investigation services, a truck for the fire marshal and four new patrol vehicles for new officer positions.
• Community Services – unspent funds for state library grants, public art maintenance costs, encampment
abatement activities, the implementation of a rental compliance solution for the city’s affordable multifamily
properties and contract funds for developer funded studies and reports. Encumbrances rolled forward include
engineering and building plan check services, a public art collaborative project, homeless outreach and case
management services, forest expansion services, park and tree maintenance services and funds for a park
and recreation facilities and trail development impact fee study.
• Public Works – unspent funds for the completion of an irrigation system upgrade at the City’s safety training
center facility and contract funds for traffic engineering professional services. Encumbrances rolled forward
include open contracts for habitat management plan preserve steward services, a green business network
coordinator, vegetation management plan services, citywide roof inspection services, general building
maintenance and a professional services contract for transportation demand management services.
• Capital Projects – includes various citywide infrastructure replacement projects, Monroe Street pool
replacement, village and barrio street lighting, decorative downtown street lighting, residential traffic
improvement program, Buena Vista Creek channel fencing, beach access repairs, Kelly Drive channel repair,
Fleet Service Center renovation, completion of the Police and Fire Headquarters refurbishment, Hosp Grove
playground refurbishment, Chestnut underpadd public art, Faraday Avenue improvements and upgrades to
the Fleet service center fuel island, library RFID replacement and the replacement of the city’s finance and
human resource software systems.
• Safer Streets Program – City Council assigned a general fund surplus of $2 million to address traffic safety
during fiscal year 2022-23. The remaining unspent funds of $353,571 at the end of fiscal year 2024-25 will be
used for continuing activities and expenses as detailed in the City’s Safer Streets Together Plan.
• Railroad trenching project – Carlsbad is exploring ways to address safety, traffic, environmental and quality of
like concerns regarding train traffic, including options to lower the railroad tracks below street level. The City is
working with the San Diego Association of Governments, the agency that oversees the railway, to identify
funding and grant opportunities. In June 2023, the City Council approved the allocation of $5.22 million from
General Fund reserves in order to advance the project. This amount remains in the assigned General Fund
balance at June 30, 2025.
57Feb. 10, 2026 Item #2 Page 95 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
• Storm Water Protection Program – City Council approved the assignment of the fiscal year 2024-25 General
Fund budget surplus for the transfer of $6 million in fiscal year 2025-26 to the city’s Solid Waste Enterprise
Fund to ensure sufficient funding exists within the Storm Water Protection Program in future years.
• Asset Replacement – City Council assigned reserve of $17.5 million was approved with the adopted budget
for fiscal year 2024-25. This reserve is to be used on a rolling 10-year basis for the purchase of machinery
and equipment that has reached the end of their respective useful lives.
• Economic Uncertainty – City Council assigned reserve of $9,635,909 that can be utilized via City Council
resolution to mitigate general revenue losses during times of economic downturns.
Unassigned Fund Balance – this includes the remaining spendable amounts which are not included in one of the
other classifications. The General Fund is the only fund that reports a positive unassigned fund balance amount.
It is the City’s policy that restricted resources will be applied first, followed by (in order of application) committed,
assigned, and unassigned resources, in the absence of a formal policy adopted by the City Council.
X. Leases
Lessee: The City is a lessee for a noncancellable lease of buildings and land improvements. The City recognizes
a lease liability and an intangible right‐to‐use lease asset (lease asset) in the government‐wide financial
statements. The City recognizes lease liabilities with an initial, individual value of $5,000 or more.
At the commencement of a lease, the City initially measures the lease liability at the present value of payments
expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of
lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for
lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently,
the lease asset is amortized on a straight‐line basis over its useful life. Key estimates and judgments related to
leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to
present value, (2) lease term, and (3) lease payments.
• The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by
the lessor is not provided, the City uses its estimated incremental borrowing rate as the discount rate for
leases.
• The lease term includes the non-cancellable period of the lease. Lease payments included in the
measurement of the lease liability are composed of fixed payments and purchase option price that the City is
certain to exercise.
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure
the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the
lease liability.
Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the
statement of net position.
Lessor: The City is a lessor for noncancellable leases of buildings and land. The City recognizes a lease
receivable and a deferred inflow of resources in the government‐wide and governmental fund financial
statements.
At the commencement of a lease, the City initially measures the lease receivable at the present value of
payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the
principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial
amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date.
Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.
58Feb. 10, 2026 Item #2 Page 96 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the
expected lease receipts to present value, (2) lease term, and (3) lease receipts.
• The City uses its estimated incremental borrowing rate as the discount rate for leases.
• The lease term includes the non-cancellable period of the lease. Lease receipts included in the measurement
of the lease receivable are composed of fixed payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure
the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly
affect the amount of the lease receivable.
Y. Subscription-Based Information Technology Arrangements
The City is a subscriber for a noncancellable subscription of information technology services. The City recognizes
subscription liability and an intangible right‐to‐use subscription asset (subscription asset) in the government‐wide
financial statements. The City recognizes subscription liabilities with an initial, individual value of $5,000 or more.
At the commencement of a subscription, the City initially measures the subscription liability at the present value of
payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by
the principal portion of subscription payments made. The subscription asset is initially measured as the initial
amount of the subscription liability, adjusted for subscription payments made at or before the subscription
commencement date, plus certain initial direct costs. Subsequently, the subscription asset is amortized on a
straight‐line basis over its useful life. Key estimates and judgments related to subscriptions include how the City
determines (1) the discount rate it uses to discount the expected subscription payments to present value,
(2) lease term, and (3) subscription payments.
• The City uses the interest rate charged by the vendor as the discount rate. When the interest rate charged by
the vendor is not provided, the City uses its estimated incremental borrowing rate as the discount rate for
subscriptions.
• The subscription term includes the non-cancellable period of the subscription. Subscription payments
included in the measurement of the subscription liability are composed of fixed payments that the City is
certain to exercise.
The City monitors changes in circumstances that would require a remeasurement of its subscriptions and will
remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the
amount of the subscription liability.
Subscription assets are reported with other capital assets and subscription liabilities are reported with long-term
debt on the statement of net position.
Z. New GASB Pronouncements Effective during Fiscal Year
The following Government Accounting Standards Board (GASB) pronouncements were effective for and/or early
implemented for the fiscal year ended June 30, 2025:
1. GASB Statement No. 101, Compensated Absences
The requirements of this Statement will improve financial reporting by implementing a unified recognition and
measurement model that will result in a liability for compensated absences that more appropriately reflects when
a government incurs an obligation. Establishing the unified model will result in consistent application to any type
of compensated absence and will eliminate potential comparability issues between governments that offer
different types of leave. This Statement will also result in a more robust estimate of the amount of compensated
absences that a government will pay or settle, which will enhance the relevance and reliability of information
about the liability for compensated absences. The impact of the implementation of this Statement on the fund
balance and net position of the City is detailed in Note 16.
59Feb. 10, 2026 Item #2 Page 97 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2. GASB Statement No. 102, Certain Risk Disclosures
The requirements of this Statement will improve financial reporting by providing users of financial statements with
essential information that currently is not often provided. The disclosures will provide users with timely information
regarding certain concentrations or constraints and related events that have occurred or have begun to occur that
make a government vulnerable to a substantial impact. As a result, users will have better information with which
to understand and anticipate certain risks to a government’s financial condition. The City’s financial statements
were not impacted by the implementation of this Statement.
NOTE 2: STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Budgetary Data
The City follows these procedures in establishing its budgetary data:
• During May or June, the City Manager submits a proposed operating, strategic digital transformation
investment program and capital improvement program budgets for the fiscal year commencing the following
July 1 to the City Council. The budget includes estimated revenues and proposed expenditures on a
departmental and/or project basis.
• In June, a public hearing is conducted at a City Council meeting to obtain citizens’ comments.
• Prior to July 1, the budget is enacted legally through passage of an appropriation resolution.
• For purposes of budgetary presentation, actual revenues have been adjusted to exclude unrealized gains and
losses pursuant to GASB. Actual expenditures have been adjusted to include encumbrances outstanding.
Annual budgets are adopted for the General Fund, special revenue funds and capital project funds.
The City Manager is authorized to make transfers of appropriated amounts from one department to another within
a fund. The legal level of budgetary control is at the fund level. Revisions that alter the total appropriations of any
fund must be approved by the City Council with the exception of budget adjustments that involve offsetting
revenues and expenditures, increases in General Liability and Workers’ Compensation Fund claims expenses,
increases in Encina Wastewater Authority expenses, increases of 15% or less to purchasing authority for capital
outlay items requiring the City Council to act as the awarding authority as approved in the budget process,
increases in earned leave accrual expenses and liabilities, increases in unforeseen legal expenses and liabilities
and adjustments to increase the appropriation for Mutal Aid expenses in an amount equal to the increases in
amounts to be reimbursed by other agencies. The City Manager is authorized to increase or decrease an
appropriation for a specific purpose where the appropriation is offset by unbudgeted revenue, which is designated
for said specific purpose. Quarterly financial reports are provided to the City Council during the year, and any
changes to the adopted budget are approved by the City Council as necessary. During the year, several
supplementary appropriations were necessary.
60Feb. 10, 2026 Item #2 Page 98 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 2: STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (CONTINUED)
Budgets for governmental type funds are adopted on the modified accrual basis except that encumbrances are
treated as budgeted expenditures in the year purchases are committed. Expenditures may not exceed budgeted
appropriations at the fund level. All appropriations lapse at fiscal year-end unless the City Council takes action in
the form of a resolution to continue the appropriation into the following fiscal year or, if the appropriation is less than
$100,000, the City Manager may approve to continue the appropriation into the following fiscal year.
The City did not adopt a budget for the Bridge Thoroughfare Districts capital projects fund for fiscal year 2025.
B. Deficit Fund Equity
The Following funds reported deficits in fund balances or net position as of June 30, 2025:
Special revenue funds:
Habitat and Agricultural Management (262,472)
Internal service funds:
Risk Management (13,570)
Deficit balance
The deficit of $262,472 in the Habitat and Agricultural Management Special Revenue Fund is the result of the
General Fund advancing money for the purchase of habitat mitigation credits in a prior fiscal year. The advance is
returned to the General Fund in periodic payments as developer impact fees are collected in the Habitat and
Agricultural Management Fund.
The deficit of $13,570 in the Risk Management Internal Service Fund is the result of estimated claims tracking
higher than anticipated. The deficit will be reduced in fiscal year 2025-26 through the regular scheduled
chargebacks to city departments.
NOTE 3: CASH AND INVESTMENTS
Cash resources of the individual funds are combined to form a pool of cash and investments. The City maintains a
formal Investment Policy Statement, which is reviewed by the Investment Review Committee and adopted annually
by the City Council. All investments held in the Treasurer’s Pool are consistent with the City’s Investment Policy
Statement objectives of safety of principal, sufficient liquidity, and to realize a return on investment. The risk
disclosures on the next page apply to the City’s internal investment pool. Portfolio investments are exposed to
five types of risk: custodial (investments and cash deposits), concentration, default, event, and market or interest
rate risk.
The City and its agencies invest a portion of the funds in an external investment pool known as the Local Agency
Investment Fund (LAIF). Management and oversight are the responsibility of the California State Treasurer. As of
June 30, 2025, the LAIF performance report shows a fair value factor of 1.0011983100. The City’s position in the
LAIF pool is calculated as a percentage of the fair value of the City’s shares to the fair value of the pooled shares.
The City and its agencies invest a portion of the funds in an external investment pool known as the California Asset
Management Program (CAMP). CAMP is a California Joint Powers Authority directed by a Board of Trustees,
which is made up of local government finance directors and treasurers.
Investments held outside the Treasurer’s Pool consist mainly of required reserve funds for various bond issues.
They are held by trustees and are not available for the City’s general expenditures.
61Feb. 10, 2026 Item #2 Page 99 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
The City established an IRS Section 115 Trust in fiscal year 2024 for the purpose of setting funding aside for the
City's unfunded pension liability. To date $17.5 million has been deposited into the trust. At June 30, 2025, the
market value of the assets held in trust is $20,190,662. The assets of the trust are reported as restricted cash and
investments in the City's General Fund, with a corresponding restriction in the City's General Fund fund balance.
Cash and investments as of June 30, 2025, are classified in the accompanying financial statements as follows:
Statement of Net Position
Cash and investments 940,993,916$
Restricted:
Cash and investments 20,190,662
Statement of Fiduciary Net Position
Cash and cash equivalents 4,601,126
Restricted:
Cash and investments 2,522,407
Total cash and investments 968,308,111$
Deposits with financial institutions 20,039,207$
Investments 925,549,285
Petty cash 6,550
Restricted:
Pension trust 20,190,662
Cash and investments 2,522,407
Total cash and investments 968,308,111$
A. Fair Value Measurement
The City categorizes its fair value investments within the fair value hierarchy established by generally
accepted accounting principles. The City has the following recurring fair value measurements as of
June 30, 2025:
Investment Type Total Level 1 Level 2 Uncategorized
U.S. Treasury obligations 71,950,785$ 71,950,785$ -$ -$
U.S. agency securities 324,547,213 - 324,547,213 -
Certificates of deposit 17,694,439 - 17,694,439 -
Medium-term notes 157,200,605 - 157,200,605 -
Municipal investments 103,571,852 - 103,571,852 -
Mortgage pass-through securities 104,324,141 - 104,324,141 -
Supranational Secrurites 26,872,524 - 26,872,524 -
California Asset Management Program 117,452,705 - - 117,452,705
Local Agency Investment Fund 1,935,021 - - 1,935,021
Total 925,549,285$ 71,950,785$ 734,210,774$ 119,387,726$
Input Category
62Feb. 10, 2026 Item #2 Page 100 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
B. Custodial Credit Risk (Investments)
The City uses a third-party bank for its custody and safekeeping service for its investment securities. Custodial
credit risk is the risk that the City will not be able to recover the value of its investments in the event of the
custodian’s failure. All City investments held in custody and safekeeping are held in the name of the City and are
segregated from securities owned by the bank. This is the lowest level of custodial credit risk exposure.
Investments are settled on Delivery vs. Payment (DVP) in accordance with the third-party custodial agreement.
C. Custodial Credit Risk (Deposits)
The City maintains cash accounts at one major banking institution. At the conclusion of each business day and if
advantageous to the City, balances in these accounts are “swept” into overnight pooled investments, which are
pooled into funds collateralized with U.S. government securities (guaranteed) or U.S. agency securities
(government- sponsored). The California Code authorizes both of these types of investments. Amounts up to
$250,000 are Federal Deposit Insurance Corporation (FDIC) insured. All funds in non-interest-bearing transaction
accounts are fully insured under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
D. Concentration Credit Risk
Concentration credit risk is the heightened risk of potential loss when investments are concentrated in one issuer.
The California state code and the City’s Investment Policy Statement require that total investments in medium-term
corporate notes of all issuers not exceed 30% of the portfolio. For concentration of investments, the City’s
Investment Policy Statement requires that no more than 5% of investments in corporate notes or passthrough
securities be in any one issuer. There is no similar requirement in either the state code or the City’s Investment
Policy Statement for U.S. agencies. As of June 30, 2025, the portfolio was in compliance with this requirement.
E. Default Credit Risk
Default credit risk is the risk that the issuer of the security does not pay either the interest or principal when due.
Debts of most U.S. agencies are not backed by the full faith and credit of the federal government. These agencies
are U.S. government sponsored. In August 2011, Standard and Poor’s Investor’s Service downgraded U.S.
long-term debt one step to AA+. Competing agencies, Moody’s Investors Service, and Fitch Ratings, maintained
their AAA rating on U.S. debt. Although the default credit risk of these investments has increased, the City believes
the risk of default remains low.
California state code limits investments in medium-term corporate notes to the top three credit ratings
(AAA, AA, and A). California state code and the City’s Investment Policy Statement allow the City Treasurer to
determine the course of action to correct exceptions to the Investment Policy Statement. It is the intent of the City
Treasurer to hold these investments in the portfolio until maturity unless events indicate they should be sold. The
default credit risk for corporate notes with a credit rating of single A is considered by the City Treasurer to be within
acceptable limits for purposes of holding to maturity. A credit rating of single A is within state code purchase
requirements.
The Local Agency Investment Funds (LAIF) is an external investment pool managed by the California State
Treasurer. The California Asset Management Program (CAMP) is an external investment pool managed by
PFM Asset Management LLC. These investments are short-term and follow the investment requirements of the
State. LAIF is not rated; however, the City Treasurer considers the default credit risk to be minimal. CAMP is rated
AAA by Standard and Poor’s Investor Services.
Money market funds held by bond trustees are rated AAA. Investment contracts held by bond trustees are not
rated by rating agencies.
63Feb. 10, 2026 Item #2 Page 101 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
The table below is the minimum rating (where applicable) of the California state code, the City’s investment policy,
or debt agreements, and the actual rating at June 30, 2025 for each investment type by Moody’s Investor’s
Service:
Minimum Exempt or
Investment Type Total Legal Rating AAA AA A Not Rated
U.S. Treasury obligations 71,950,785$ Exempt -$ -$ -$ 71,950,785$
U.S. agency securities 324,547,213 Exempt - - - 324,547,213
Supranational Securities 26,872,524 AA 26,872,524
Municipal investments 103,571,852 AA/A 9,917,238 84,406,042 - 9,248,572
Mortgage pass-through securities 104,324,141 AA 104,324,141 - - -
Medium-term notes 157,200,605 AA/A 20,788,010 88,743,956 47,668,639 -
Local Agency Investment Fund 1,935,021 Not Rated - - - 1,935,021
Certificates of deposit 17,694,439 Not Rated - - - 17,694,439
California Asset Management Program 117,452,705 Not Rated 117,452,705
Total 925,549,285$ 161,901,913$ 173,149,998$ 47,668,639$ 542,828,735$
Moody's Rating as of Fiscal Year End
Notes for this schedule:
• Certificates of Deposit are FDIC insured.
• As of June 30, 2025, two medium-term bank notes are issued from an organizational branch operating outside
of the United States. The Investment Policy permits securities issued by corporations organized and operating
within the United States or by depository institutions licensed by the United States or any state and operating
within the United States. In addition, six municipal bond investments are outside the Investment Policy’s
requirement that issuing local agencies be within California. The Investment Policy allows for the purchase of
municipal bonds issued by any state authority outside California but limits the purchase of municipal bonds
issued by local agencies to those within California. The city’s Investment Policy allows the City Treasurer to
determine the course of action that would correct exceptions to the policy. All investments are paying interest
at the required times, and their principal is considered secure.
F. Interest Rate Risk
Interest rate risk is the risk that investments will lose market value because of increases in market interest rates. A
rise in market interest rates will cause the market value of investments made earlier at lower interest rates to lose
value. The reverse will cause a gain in market value. As of June 30, 2025, the portfolio had a 0.28% loss in market
value based on cost.
The City’s Investment Policy Statement has adopted two means of limiting its exposure to market value losses
caused by rising market interest rates: (1) limiting total portfolio investments to a maximum modified duration of
2.2; and requiring liquid investments (LAIF and bank accounts) and investments maturing within one year to be
equal to an amount that is not less than two-thirds of the current fiscal year’s operating budget. The City met those
requirements as follows:
• As of June 30, 2025, the modified duration of the portfolio was 1.69. Modified duration is a prospective
measure of the sensitivity of a fixed-income security’s value to changes in market rates of interest. Modified
duration identifies the potential gain/loss in value before it actually occurs. For example, a modified
duration of 1.5 indicates that when and if a 1.0% change in market interest rates occurs, a 1.5% change in
the security’s value will result. Investments with modified durations of one to three are considered to be
conservative.
• As of June 30, 2025, maturities within one year exceeded the required minimum of $279,333,609
(two-thirds of current year operating budget for the City per the Fiscal Year 2024-2025 operating budget
adopted by the City Council).
• As of June 30, 2025, the weighted average maturity of the LAIF underlying debt securities was 248 days. As
of June 30, 2025, LAIF had a 0.0120% gain in market value.
64Feb. 10, 2026 Item #2 Page 102 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 4: LEASE RECEIVABLES
As of June 30, 2025, the City had 19 active leases. The leases have receipts that range from $0 to $178,652 and
interest rates that range from 0.9800% to 2.9990%. As of June 30, 2025, the total combined value of the lease
receivable is $18,598,253, the total combined value of the short-term lease receivable is $940,017, and the
combined value of the deferred inflow of resources is $17,374,398.
Lease Lease
Lease Type Term Range Receivable Revenue
Land 5 - 19 years 9,977,027$ 229,413$
Buildings 2 - 80 years 3,461,828 422,228
Subtotal - governmental activities 13,438,855 651,641
Lease Lease
Lease Type Term Range Receivable Revenue
Land 5 - 19 years 2,218,544$ -$
Buildings 2 - 80 years 2,940,854 245,335
Subtotal - business-type activities 5,159,398 245,335
Total 18,598,253$ 896,976$
Governmental Activities
Business-type Activities
Future receivable principal and interest payments expected to be received through maturity are as follows:
Fiscal Year Principal Payments Interest Payments Total Payments
2026 254,704$ 106,114$ 360,818$
2027 215,156 102,962 318,118
2028 213,124 100,056 313,179
2029 220,825 97,032 317,857
2030 228,829 93,875 322,704
2031 - 2035 1,093,526 421,333 1,514,859
2036 - 2040 723,018 300,358 1,023,376
2041 - 2045 157,319 256,630 413,949
2046 - 2050 170,695 239,423 410,117
2051 - 2055 249,837 214,173 464,010
2056 - 2060 346,682 178,303 524,985
2061 - 2065 464,496 129,476 593,972
2066 - 2070 607,096 64,929 672,025
2071 - 2072 214,091 4,148 217,870
Total Remaining Receivable 5,159,398$
Fiscal Year Principal Payments Interest Payments Total Payments
2026 685,313$ 291,008$ 976,322$
2027 652,263 279,740 932,002
2028 675,957 268,522 944,479
2029 727,378 256,623 984,001
2030 581,552 245,890 827,441
2031 - 2035 1,929,998 1,142,794 3,072,792
2036 - 2040 1,511,895 890,304 2,402,199
2041 - 2045 901,137 763,127 1,664,263
2046 - 2050 1,100,889 644,172 1,745,060
2051 - 2055 747,269 518,603 1,265,873
2056 - 2060 833,717 428,790 1,262,507
2061 - 2065 1,117,038 311,369 1,428,407
2066 - 2070 1,459,966 156,143 1,616,109
2071 - 2072 514,483 9,976 523,941
Total Remaining Receivable 13,438,855$
Business-Type Activities
Governmental Activities
65Feb. 10, 2026 Item #2 Page 103 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 5: ACCRUED LIABILITIES
A. Summary
The balance of accrued liabilities at June 30, 2025, is composed of the following:
Community Infrastructure Other Internal Total
Facilities Replacement Governmental Service Governmental
Classification General Fund District #1 Fund Funds Funds Actives
Accounts payable 3,622,979$ 181,129$ 2,015,248$ 5,294,412$ 2,014,979$ 13,128,747$
Retentions payable 7,197 - 664,417 1,310,405 - 1,982,019
Accrued wages 2,127,685 - - 37,858 182,371 2,347,914
Employee benefits 918,267 - - - - 918,267
Pension payable 808,654 - - - - 808,654
Other 69,460 - - 42,516 1,200 113,176
Total 7,554,242$ 181,129$ 2,679,665$ 6,685,191$ 2,198,550$ 19,298,777$
Carlsbad Other Total
Municipal Enterprise Business-type Custodial
Water District Wastewater Funds Activities Funds
Accounts payable 2,893,452$ 417,730$ 304,609$ 3,615,791$ 2,292,002$
Retentions payable 541,555 44,803 - 586,358 -
Accrued wages 113,817 52,444 33,422 199,683 -
Other 17,812 96 594,471 612,379 -
Total 3,566,636$ 515,073$ 932,502$ 5,014,211$ 2,292,002$
B. Compensated Absences
Compensated absences are comprised of unpaid vacation and sick leave which are accrued when benefits have
been earned for services previously rendered and it is more likely than not to be used as time off or settled. The
City's liability for compensated absences is determined annually. The compensated absences activities for the
year ended June 30, 2025, are as follows:
Balance
July 1, 2024, Net Balance Due within
as restated Change June 30, 2025 1 year
Governmental activities 16,582,626$ (239,820)$ 16,342,806$ 3,267,523$
Business-type activities 1,438,784 (10,011) 1,428,773 285,754
Total 18,021,410$ (249,831)$ 17,771,579$ 3,553,277$
66Feb. 10, 2026 Item #2 Page 104 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 6: CAPITAL ASSETS
A. Governmental Activities
Governmental activities’ capital assets for the year ended June 30, 2025, was as follows:
Balance Balance
July 1, 2024 Adjustments * Additions Deletions Transfers June 30, 2025
Governmental activities:
Capital assets, not being depreciated/amortized
Land 160,216,925$ -$ -$ -$ -$ 160,216,925$
Construction-in-progress 24,263,101 - 11,462,810 (1,139,047) (1,955,684) 32,631,180
Total capital assets, not being depreciated/amortized 184,480,026 - 11,462,810 (1,139,047) (1,955,684) 192,848,105
Capital assets, being depreciated/amortized
Buildings and structures 153,822,718 - 51,404 - 8,982 153,883,104
Machinery, equipment, and vehicles 66,380,766 - 5,886,969 (3,314,251) 37,471 68,990,955
Lease assets - land 259,558 - - - - 259,558
Subscription assets - software 7,476,343 - 12,087,464 (892,912) - 18,670,895
Intangible assets 6,512,823 - - - - 6,512,823
Land improvements 137,954,730 3,365,027 12,792,001 - 1,909,231 156,020,989
Infrastructure 757,035,314 - 808,531 - - 757,843,845
Total capital assets, being depreciated/amortized 1,129,442,252 3,365,027 31,626,369 (4,207,163) 1,955,684 1,162,182,169
Less accumulated depreciation/amortization
Buildings and structures (57,508,470) - (3,400,190) - - (60,908,660)
Machinery, equipment, and vehicles (37,939,582) - (10,213,386) 3,107,319 - (45,045,649)
Lease assets - land (140,847) - (31,818) - 85,310 (87,355)
Subscription assets - software (3,393,053) - (2,632,110) 892,912 (85,310) (5,217,561)
Intangible assets (5,390,441) - (607,346) - - (5,997,787)
Land improvements (51,139,505) (269,202) (4,533,666) - - (55,942,373)
Infrastructure (347,113,950) - (15,797,339) - - (362,911,289)
Total accumulated depreciation/amortization (502,625,848) (269,202) (37,215,855) 4,000,231 - (536,110,674)
Total capital assets, being depreciated/amortized, net 626,816,404 3,095,825 (5,589,486) (206,932) 1,955,684 626,071,495
Total governmental activities capital assets 811,296,430$ 3,095,825$ 5,873,324$ (1,345,979)$ -$ 818,919,600$
* Adjustments to Land Improvements are due to fixed assets previously being recorded in fund level functional
expenditures and added to GASB 34 conversion in Fiscal Year 2025.
Depreciation/amortization expense was charged to the functions/programs of the governmental activities of the
primary government as follows:
General government 671,792$
Public safety 5,163,436
Community services 6,094,499
Public works 17,726,155
Internal service funds*7,559,973
Total depreciation/amortization expense 37,215,855$
* Depreciation and amortization of capital assets held by the City’s internal service funds are charged to the
various functions based on their usage of the assets.
67Feb. 10, 2026 Item #2 Page 105 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 6: CAPITAL ASSETS (CONTINUED)
B. Business-type Activities
Business-type activities’ capital assets for the year ended June 30, 2025, was as follows:
Balance Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025
Business-type activities:
Capital assets, not being depreciated/amortized
Land 9,354,514$ -$ -$ -$ 9,354,514$
Construction-in-progress 18,583,792 4,678,042 (39,716) (3,329,191) 19,892,927
Total capital assets, not being depreciated/amortized 27,938,306 4,678,042 (39,716) (3,329,191) 29,247,441
Capital assets, being depreciated/amortized
Buildings and structures 44,231,103 192,089 - - 44,423,192
Machinery, equipment, and vehicles 14,441,694 163,335 (19,362) - 14,585,667
Wastewater treatment facility 68,812,809 1,622,591 (1,414,154) - 69,021,246
Land improvements 56,498,586 38,127 - - 56,536,713
Infrastructure 421,648,190 11,075,751 (17,806) 3,329,191 436,035,326
Total capital assets, being depreciated/amortized 605,632,382 13,091,893 (1,451,322) 3,329,191 620,602,144
Less accumulated depreciation/amortization
Buildings and structures (15,575,107) (1,484,684) - - (17,059,791)
Machinery, equipment, and vehicles (9,496,248) (1,978,398) 19,362 - (11,455,284)
Wastewater treatment facility (38,627,236) (1,481,769) 1,414,154 - (38,694,851)
Land improvements (50,572,412) (298,297) - - (50,870,709)
Infrastructure (150,857,226) (8,416,553) 17,806 - (159,255,973)
Total accumulated depreciation/amortization (265,128,229) (13,659,701) 1,451,322 - (277,336,608)
Total capital assets, being depreciated/amortized, net 340,504,153 (567,808) - 3,329,191 343,265,536
Total business-type activities capital assets 368,442,459$ 4,110,234$ (39,716)$ -$ 372,512,977$
Depreciation/amortization expense was charged to the functions/programs of the business-type activities of the
primary government as follows:
Water 7,806,034$
Golf 759,088
Wastewater 5,094,579
Total depreciation/amortization expense 13,659,701$
NOTE 7: PENSION PLANS
The City contributes to two defined benefit pension plans. As of and for the year ended June 30, 2025, the
two plans had the following balances reported in the government‐wide financial statements:
Net Pension Deferred Outflows Deferred Inflows Pension
Liability of Resources of Resources Expense
Miscellaneous Plan 103,381,777$ 27,312,145$ 167,952$ 21,936,646$
Safety Plan 111,010,886 36,290,701 - 23,060,511
Total pension plans 214,392,663$ 63,602,846$ 167,952$ 44,997,157$
68Feb. 10, 2026 Item #2 Page 106 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 7: PENSION PLANS (CONTINUED)
A. Plan Description, Benefits Provided, and Employees Covered
All qualified permanent and probationary employees are eligible to participate in the City’s Safety
(sworn police and fire) and Miscellaneous (all other) Plans (the Plans), agent multiple employer defined benefit
pension plans administered by CalPERS, which acts as a common investment and administrative agent for its
participating member employers. A full description of the Plans regarding number of employees covered, benefit
provisions, assumptions (for funding, but not accounting purposes), and membership information are listed in the
Plan’s June 30, 2023 Annual Actuarial Valuation Reports (funding valuations). Details of the benefits provided can
be obtained in Appendix B of the Actuarial Valuation Report. This report and CalPERS’ audited financial
statements are publicly available reports that can be obtained at CalPERS’ website.
CalPERS provides service retirement and disability benefits, annual cost of living adjustments, and death benefits
to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited
service, equal to one year of full-time employment. The Plans’ provisions and benefits in effect at June 30, 2025,
are summarized as follows:
On or after
Prior to November 28, 2011 to On or after
Hire date November 28, 2011 December 31, 2012 January 1, 2013
Benefit formula 3% @ 60 2% @ 60 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 60 50 - 63 52 - 67
Monthly benefits as a % of eligible compensation 2% to 3% 1.092% to 2.418% 1.0% to 2.5%
Required employee contribution rates 8.00%7.00% 8.50%
Required employer contribution rates 16.65%13.80% 8.48%
Required employer payment of unfunded liability
On or after
Prior to November 28, 2011 to On or after
Hire date November 28, 2011 December 31, 2012 January 1, 2013
Benefit formula 3% @ 50 2% @ 50 2% @ 57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 50 - 55 50 - 57
Monthly benefits as a % of eligible compensation 3% 2.0% to 2.7% 2.0% to 2.7%
Required employee contribution rates 9.00%9.00% 13.50%
Required employer contribution rates 26.93%23.39% 13.89%
Required employer payment of unfunded liability
Miscellaneous
Safety
$8,103,356
$7,360,036
69Feb. 10, 2026 Item #2 Page 107 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 7: PENSION PLANS (CONTINUED)
As of the valuation date, June 30, 2023, the following employees were covered by the benefit terms for each Plan:
Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 703 295
Inactive employees or beneficiaries not yet receiving benefits 591 114
Active employees 581 225
Total 1,875 634 B. Contribution Description
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer
contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective
on the July 1 following notice of a change in the rate. The total plan contributions are determined through
CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary
to finance the costs of benefits earned by employees during the year, with an additional amount to finance any
unfunded accrued liability. The employer is required to contribute the difference between the actuarially
determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts
are amended. Payments made by the employer to satisfy contribution requirements that are identified by the
pension plan terms as plan member contribution requirements are classified as plan member contributions. Plan
contributions for the year equaled $14,385,659 and $13,737,276 for miscellaneous and safety, respectively.
C. Actuarial Methods and Assumptions Used to Determine Total Pension Liability
The June 30, 2023 valuation was used to determine the June 30, 2024 total pension liability, based on the
following actuarial methods and assumptions:
Actuarial Cost Method Entry Age Normal Cost Method
Actuarial Assumptions
Discount rate 6.90%
Inflation 2.30%
Salary increases Varies by entry age and services
Mortality rate table Derived using CalPERS’ membership data for all funds
Post-retirement benefit increases The lesser of contract COLA or 2.30% until purchasing power
protection allowance floor on purchasing power applies,
2.30% thereafter
The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based
on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full
generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more
details on this table, please refer to the 2021 experience study report from November 2021 that can be found on
the CalPERS website.
D. Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method
in which expected future real rates of return (expected returns, net of pension plan investment expense and
inflation) are developed for each major asset class.
70Feb. 10, 2026 Item #2 Page 108 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 7: PENSION PLANS (CONTINUED)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term
market return expectations. Using historical returns of all of the funds’ asset classes, expected compound
(geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of
return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real
rates of return by asset class are as follows:
Assumed
Asset
Asset Class Allocation Real Return
1, 2
Global equity-cap-weighted 30.00%4.54%
Global equity-non-cap-weighted 12.00%3.84%
Private equity 13.00%7.28%
Treasury 5.00%0.27%
Mortgage-backed securities 5.00%0.50%
Investment grade corporates 10.00%1.56%
High yield 5.00%2.27%
Emerging market debt 5.00%2.48%
Private debt 5.00%3.57%
Real assets 15.00%3.21%
Leverage -5.00%(0.59%)
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2022 Asset Liability Management study
E. Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members will be made at the current member
contribution rates and that contributions from employers will be made at statutorily required rates, actuarially
determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make
all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on
plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
F. Amortization of Deferred Outflows and Deferred Inflows of Resources
Under GASB Statement No. 68, gains and losses related to changes in total pension liability and fiduciary net
position are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The
remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions
and are to be recognized in future pension expenses.
The amortization period differs depending on the source of the gain or loss:
Net difference between projected 5-year straight-line amortization
and actual earnings on pension
plan investments
All other amounts Straight-line amortization over the expected average remaining
service lifetime (EARSL) of all members that are provided with
benefits (active, inactive, and retired) as of the beginning of the
measurement period.
71Feb. 10, 2026 Item #2 Page 109 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 7: PENSION PLANS (CONTINUED)
The EARSL for the plan for the measurement period ending June 30, 2024 is 3.4 years, which was obtained by
dividing the total service years of 6,395 (the sum of remaining service lifetimes of the active employees) by
1,875 (the total number of participants: active, inactive, and retired). Inactive employees and retirees have
remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing
due to an event other than receiving a cash refund.
G. Changes in the Net Pension Liability
The following table shows the changes in net pension liability recognized over the measurement period:
1. Miscellaneous Plan
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 492,974,765$ 383,892,719$ 109,082,046$
Changes recognized for the
measurement period:
Service cost 10,024,673 - 10,024,673
Interest on total pension liability 33,733,327 - 33,733,327
Changes of benefit terms - - -
Changes of assumptions - - -
Differences between expected and
actual experience 3,642,412 - 3,642,412
Net plan to plan resource movement - - -
Contributions-employer - 12,662,206 (12,662,206)
Contributions-employee - 4,314,651 (4,314,651)
Net investment income - 36,436,199 (36,436,199)
Benefit payments, including refunds of
employee contributions (25,481,430) (25,481,430) -
Administrative expense - (312,375) 312,375
Net changes during 2023-24 21,918,982 27,619,251 (5,700,269)
Balance at June 30, 2024 514,893,747$ 411,511,970$ 103,381,777$
72Feb. 10, 2026 Item #2 Page 110 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 7: PENSION PLANS (CONTINUED)
2. Safety Plan
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 402,980,775$ 294,284,768$ 108,696,007$
Changes recognized for the
measurement period:
Service cost 9,291,216 - 9,291,216
Interest on total pension liability 28,001,776 - 28,001,776
Changes of benefit terms - - -
Changes of assumptions - - -
Differences between expected and
actual experience 8,696,819 - 8,696,819
Net plan to plan resource movement - - -
Contributions-employer - 12,395,743 (12,395,743)
Contributions-employee - 3,505,497 (3,505,497)
- 28,013,152 (28,013,152)
Benefit payments, including refunds of
employee contributions (21,000,727) (21,000,727) -
Administrative expense - (239,460) 239,460
Net changes during 2023-24 24,989,084 22,674,205 2,314,879
Balance at June 30, 2024 427,969,859$ 316,958,973$ 111,010,886$
H. Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liabilities calculated using the discount rate of 6.90%, as well as what the
net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.90%) or
1-percentage-point higher (7.90%) than the current rate:
Discount Rate Current Discount Rate
-1 Percent Discount Rate +1 Percent
(5.90%) (6.90%) (7.90%)
Misc. Plan's net pension liability/(asset) 169,862,699$ 103,381,777$ 48,352,692$
Safety Plan's net pension liability/(asset) 171,228,986 111,010,886 61,953,712
Total 341,091,685$ 214,392,663$ 110,306,404$
73Feb. 10, 2026 Item #2 Page 111 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 7: PENSION PLANS (CONTINUED)
I. Pension Expense and Deferred Outflows and Deferred Inflows of Resources
For the fiscal year ended June 30, 2025, the City recognized $14,184,885 and $13,502,705 in pension expense
for the Miscellaneous and Safety plans, respectively, for a total amount of pension expense of $27,687,590.
The following table presents deferred outflows and deferred inflows of resources related to pensions as of the
June 30, 2025:
1. Miscellaneous Plan
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date 14,385,659$ -$
Changes of assumptions 1,240,754 -
Differences between expected and
actual experience 5,256,690 167,952
Net difference between projected
and actual earnings on pension
plan investments 6,429,042 -
Total 27,312,145$ 167,952$
Amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in
future pension expense as follows:
Deferred
Outflows/(Inflows)
Fiscal year ended June 30, of Resources
2026 4,144,951$
2027 11,793,334
2028 (1,124,019)
2029 (2,055,732)
Total 12,758,534$
74Feb. 10, 2026 Item #2 Page 112 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 7: PENSION PLANS (CONTINUED)
2. Safety Plan
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date 13,737,276$ -$
Changes of assumptions 4,936,932 -
Differences between expected and
actual experience 12,788,168 -
Net difference between projected
and actual earnings on pension
plan investments 4,828,325 -
Total 36,290,701$ -$
Amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in
future pension expense as follows:
Deferred
Outflows/(Inflows)
Fiscal year ended June 30, of Resources
2026 7,483,594$
2027 13,332,366
2028 1,581,176
2029 156,289
Total 22,553,425$
J. IRS Section 115 Pension Trust
The City holds investments in an IRS Section 115 Trust for pension stabilization. The current market value of the
trust is $20,190,662. This trust fund is not included in the calculation of the net pension liability, as the assets are
not in the custody of the plan administrator, CalPERS. Refer to Note 3 for additional information.
75Feb. 10, 2026 Item #2 Page 113 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: OTHER POSTEMPLOYMENT BENEFIT (OPEB) OBLIGATIONS
The City offers other postemployment benefits in the form of health benefits to two employee groups:
City of Carlsbad employees and former CMWD employees. The majority of City and former CMWD employees
are under the City defined benefit agent multiple-employer plan.
A. Benefit Description by Employee Group
1. Former Carlsbad Municipal Water District (CMWD) employees
The benefit plan is for active and retired employees who were employed with CMWD at the time CMWD was
acquired by the City. Per Resolution No. 614, all former employees of CMWD (including dependents) are eligible
for postretirement health care benefits if they voluntarily retire after the age of fifty, with no less than five years of
service and whose age, combined with years of service, equals seventy or more.
The City pays for 100% of the health insurance premiums which is coordinated with Medicare and other benefits
provided by federal and state law, when available, to the extent it reduces the cost of insurance premiums.
CalPERS administers this plan.
2. City of Carlsbad employees
City employees are offered health insurance coverage under the Public Employees’ Medical and Hospital Care Act
(PEMHCA), which is administered by CalPERS. Under PEMHCA, the City is required to pay a small portion of the
monthly medical premiums of retired employees (considered a subsidy), if the retired employees continue their
medical coverage under PEMHCA. Surviving spouses and domestic partners of eligible retirees are eligible for the
City subsidy. Surviving spouses and domestic partners of deceased active members are eligible for the City
subsidy only if the employee had attained age 50 with five years of service.
The City pays a monthly subsidy per eligible employee/retiree regardless of coverage elected:
Calendar Year 2022 149$
Calendar Year 2023 151
Calendar Year 2024 157
Calendar Year 2025 158
Thereafter, the subsidy is adjusted annually to reflect changes in the medical component of the Consumer Price
Index.
3. California Public Employer’s Retiree Benefit Trust Program
The City is participating in the California Employer’s Retiree Benefit Trust Program (CERBT) through irrevocable
trust agreements for both plans. CERBT is administered by CalPERS. The City’s OPEB fiduciary net position is
included in the CERBT Schedule of Changes in Fiduciary Net Position by Employer report. That report may be
obtained on the California Public Employees’ Retirement System website at www.calpers.ca.gov under forms and
publications.
B. Employees Covered
As of the June 30, 2024, measurement date, the following employees were covered by the benefit terms for
each benefit tier:
Inactive employees or beneficiaries currently receiving benefits 382
Inactive employees or beneficiaries not yet receiving benefits 356
Active employees 781
Total 1,519
76Feb. 10, 2026 Item #2 Page 114 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: OTHER POSTEMPLOYMENT BENEFIT (OPEB) OBLIGATIONS (CONTINUED)
C. Contributions
The obligation of CMWD to contribute to the CMWD plan is established and may not be amended by the CMWD
Board. The obligation of the City to contribute to the City plan is established, and as long as the City is a member
of PEMCHA, may not be amended by the City Council. The City Council does have the authority to change
health insurance coverage outside of PEMHCA, which could change the funding obligation for City employees.
Employees are not required to contribute to the plan. The City and CMWD’s contributions are based on the
actuarially determined contribution (ADC), an amount actuarially determined in accordance with the parameters of
GASB. The ADC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal
cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed
30 years on a “closed” basis. The City’s and CMWD’s contributions are as follows:
Fiscal Year 2024-25 Cash Contributions 712,084$
Fiscal Year 2024-25 Estimated Implied Subsidy Payments 465,415
Non-trust Admin Expenses 8,231
Total 1,185,730$
D. Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2024, and the total OPEB liability used to calculate the
net OPEB liability was determined by an actuarial valuation dated June 30, 2024, based on the actuarial
methods and assumptions shown below:
Acturial Cost Method:Entry Age Normal
Acturial Assumptions:
Discount Rate 6.25%
Inflation 2.50%
Salary Increases 2.75%
Investment Rate of Return 6.25% with a 45% to 50% confidence based on Bartel
Associates modeling for CERBT Strategy 1
Mortality Rate (1)Derived using CalPERS Membership Data for all funds.
Pre-Retirement Turnover (2)Derived using CalPERS Membership Data for all funds.
Healthcare Trend Rate (3)Based in part on premium experience.
Notes:
1 Based on CalPERS 2000-2019 Experience Study. The Experience Study Reports may be accessed on the
CalPERS website www.calpers.ca.gov under Forms and Publications.
2 Based on CalPERS 2000-2019 Experience Study. The Experience Study Reports may be accessed on the
CalPERS website www.calpers.ca.gov under Forms and Publications.
3 Short-Term healthcare trends were developed in consultation with Axene Health Partner's healthcare
actuaries. Long-term healthcare trend development using Society of Actuaries' Getzen Model of Long-Run Medical
Cost Trends.
77Feb. 10, 2026 Item #2 Page 115 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: OTHER POSTEMPLOYMENT BENEFIT (OPEB) OBLIGATIONS (CONTINUED)
The target allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Asset Class Target Allocation
Long-Term Expected
Real Rate of Return
Global Equity 49%5%
Fixed Income 23%2%
TIPS 5%0%
Commodities 3%1%
REIT's 20%4%
Total 100%
Notes:
CERBT Strategy-1
1) The long-term expected rate of return is 6.25%
2) Assumed long-term rate of inflation is 2.5%
E. Discount Rate
The discount rate used to measure the total OPEB liability was 6.25%. The projection of cash flows used to
determine the discount rate assumed that City contributions will be made at rates equal to the actuarially
determined contribution rates. Based on those assumptions, the OPEB Plans’ fiduciary net position was projected
to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries.
Therefore, the long-term expected rate of return on OPEB Plans investments was applied to all periods of
projected benefit payments to determine the total OPEB liability.
The changes in the net OPEB (asset)/liability are shown below:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 20,090,427$ 18,834,192$ 1,256,235$
Changes recognized for the
measurement period:
Service cost 719,364 - 719,364
Interest on total OPEB liability 1,263,726 - 1,263,726
Actual vs. expected experience - - -
Assumption changes - - -
Contributions-employer - 1,190,682 (1,190,682)
Contributions-employee - - -
Net investment income - 2,063,628 (2,063,628)
Benefit payments, including refunds of
employee contributions (1,180,362) (1,180,362) -
Administrative expense - (16,458) 16,458
Net changes during 2023-24 802,728 2,057,490 (1,254,762)
Balance at June 30, 2024 20,893,155$ 20,891,682$ 1,473$
78Feb. 10, 2026 Item #2 Page 116 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: OTHER POSTEMPLOYMENT BENEFIT (OPEB) OBLIGATIONS (CONTINUED)
F. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of CMWD and City if it were calculated using a discount rate that is
one percentage point lower or one percentage point higher than the current rate, for measurement period ended
June 30, 2024:
Discount Rate Current Discount Rate
-1% Discount Rate +1%
(5.25%) (6.25%) (7.25%)
Plan's net OPEB liability/(asset) 2,486,320$ 1,473$ (2,074,999)$
G. Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates
The following presents the net OPEB liability of the CMWD and City if it were calculated using health care cost
trend rates that are one percentage point lower or one percentage point higher than the current rate, for
measurement period ended June 30, 2024:
Current
1% Heathcare 1%
Decrease Trend Rate Increase
Plan's net OPEB liability/(asset) (2,503,052)$ 1,473$ 3,072,761$
H. Recognition of Deferred Outflows and Deferred Inflows of Resources
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB
expense systematically over time.
Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are
categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in
future OPEB expenses. The initial recognition period is five years.
I. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the fiscal year ended June 30, 2025, the City recognized OPEB expense of $1,435,851. As of June 30, 2025,
the City reported deferred outflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date 1,185,730$ -$
Changes of assumptions 748,058 405,622
Differences between expected and
actual experience 399,315 1,402,083
Net difference between projected
and actual earnings on OPEB
plan investments 223,765 -
Total 2,556,868$ 1,807,705$
79Feb. 10, 2026 Item #2 Page 117 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: OTHER POSTEMPLOYMENT BENEFIT (OPEB) OBLIGATIONS (CONTINUED)
The $1,185,730 reported as deferred outflows of resources related to contributions subsequent to the
June 30, 2024 measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year
ending June 30, 2026. Other amounts reported as deferred outflows and inflows of resources related to OPEB will
be recognized as expense as follows:
Deferred
Outflows/(Inflows)
Fiscal year ended June 30, of Resources
2026 9,601$
2027 663,713
2028 (166,787)
2029 (397,909)
2030 (194,164)
Thereafter (351,021)
Total (436,567)$
NOTE 9: SIGNIFICANT COMMMITMENTS
A. Water Purchase Agreements
On August 5, 2003, CMWD entered into a 22-year agreement with the Vallecitos Water District, to purchase
three million gallons per day (3,360-acre feet) of recycled water for uses throughout CMWD’s boundaries. Per the
agreement, there is an annual reconciliation that trues up the monthly payments to the actual cost for the water
purchased each fiscal year. The recycled water cost is adjusted every July 1st and shall not exceed 75% of the
wholesale cost of potable water from SDCWA. The agreement also stipulates that CMWD will pay for its share of
the actual operating costs (up to a maximum cost of 75% of the wholesale cost of potable water from the
San Diego County Water Authority) of the Mahr Reservoir, which produces the water. The estimated operating
costs paid by CMWD for the period ended June 30, 2025, are $3,118,140.
B. Golf Course Advances
The Golf Course Fund previously showed an advance from other funds balance in the amount of $47,031,506
representing loans received from the City’s General Fund that were used to fund the initial course construction
and some operating costs. For financial statement purposes, these loans were reclassified to “Transfers In” in
fiscal year 2022 recognizing that the repayment of these loans is not scheduled to happen in the near future.
The City has not forgiven the loans and the advances are now being disclosed as a contingent liability of the
Golf Course Fund. The balance of these loans is $55,458,868 in total, $47,031,506 of principal and $8,427,362 of
interest. The City discontinued accruing interest on the advances in fiscal year 2013-14. Should sufficient
resources in the golf course become available to make repayments in the future, those repayments of this
contingent liability will take place, and will be recorded as transfers out from the Golf Course Fund at that time.
80Feb. 10, 2026 Item #2 Page 118 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 9: SIGNIFICANT COMMMITMENTS (CONTINUED)
C. Encumbrances
As of June 30, 2025, City commitments for outstanding encumbrances (purchase orders and contracts for goods
and services not yet delivered) by major governmental fund and nonmajor funds in the aggregate are as follows:
Outstanding
Encumbrances
Governmental activities
General fund 8,056,805$
Communicty Facilities District No. 1 6,681,230
Infrastructure Replacement Fund 8,115,939
Internal Service Funds 5,740,332
Non-major governmental funds 28,855,458
Subtotal - governmental activities 57,449,764
Business-type activities
Carlsbad Municipal Water District 11,109,576
Wastewater 3,722,728
Non-major enterprise funds 697,003
Subtotal - business-type activities 15,529,307
Total 72,979,071$
NOTE 10: RISK MANAGEMENT
The City is exposed to various risks of loss related to its operations, including losses associated with errors
and omissions and injuries to employees and members of the public. The City uses a Risk Management
Self-Insurance Fund and a Workers’ Compensation Fund (all internal service funds) to account for and finance its
uninsured risks of loss. All other funds of the City make payments to these funds based on annual estimates of the
amounts needed to pay prior and current year claims and to establish a reserve for catastrophic losses.
Beginning July 1, 2019, the City joined the California Insurance Pool Authority (CIPA) for excess general liability
coverage. This coverage was purchased directly through the pool’s manager, Kiser & Company. Under this
program, the City’s coverage is a maximum of $43,000,000 per occurrence with a self-insured retention of
$1,000,000. CIPA has been in existence since 1978. At June 30, 2025, the unrestricted fund equity for the
Risk Management Self- Insurance Fund was $(13,570). Revenues of the risk management fund, together with
funds to be provided in the future, are expected to provide adequate resources to meet liabilities as they come
due.
The City is self-insured for workers’ compensation claims for claims up to $1,500,000 and insured by Safety
National thereafter and up to statutory limits. At June 30, 2025, the unrestricted fund equity for the Workers’
Compensation Self-Insurance Fund was $55,847. Revenues of the workers' compensation fund, together with
funds to be provided in the future, are expected to provide adequate resources to meet liabilities as they come due.
The estimated claims payable reported at June 30, 2025 is based on the requirements of GASB, which requires
that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it
is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can
be reasonably estimated. Settled cases did not exceed insurance coverage during the past three fiscal years. All
claims are considered non-current per their estimated settlement dates.
81Feb. 10, 2026 Item #2 Page 119 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 10: RISK MANAGEMENT (CONTINUED)
Changes in the estimated claims payable amounts in fiscal years 2023-24 and 2024-25 for the two internal
service funds are as follows:
Expense and
Beginning Changes in Claim Ending
Balance Estimates Payments Balance
Risk Management Fund:
2023-24 6,656,715$ 4,395,800$ 4,650,919$ 6,401,596$
2024-25 6,401,596 4,856,459 1,183,604 10,074,451
Workers' Compensation Fund:
2023-24 21,902,418 8,334,235 4,647,795 25,588,858
2024-25 25,588,858 14,347,207 4,113,786 35,822,279
Total
2023-24 28,559,133 12,730,035 9,298,714 31,990,454
2024-25 31,990,454 19,203,666 5,297,390 45,896,730
Claims
NOTE 11: LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS
A. Leases Payable
The City has entered into two lease agreements as lessee for the acquisition and use of land and right of way.
The terms of these leasing arrangements range from 8 to 12 years. As of June 30, 2025, the total value of the
lease liability was $184,418. The City is required to make monthly principal and interest payments ranging from
$2,690 to $31,518. The leases have interest rates ranging from 1.604% to 3.206%. Information on the lease
assets as of June 30, 2025 are as follows:
Asset Class Lease Asset Value
Accumulated
Amortization
Land 259,558$ 87,255$
Governmental Activities
The future principal and interest lease payments as of June 30, 2025, were as follows:
Fiscal Year
Ending
June 30, Principal Interest Total
2026 29,883$ 5,270$ 35,153$
2027 31,803 4,324 36,127
2028 33,815 3,316 37,131
2029 35,922 2,242 38,164
2030 38,128 1,100 39,228
2031-2032 14,867 124 14,991
Totals 184,418$ 16,376$ 200,794$
82Feb. 10, 2026 Item #2 Page 120 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 11: LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS
(CONTINUED)
B. Subscription-Based Information Technology (SBITA) Arrangements
The City has entered into 46 SBITAs as the subscriber for the use of various software as services. The terms of
these subscriptions range from 13 months to 5 years. As of June 30, 2025, the total value of the subscription
liability was $12,021,102. The City is required to make annual payments ranging from $0 to $670,888. The
subscriptions have interest rates ranging from 0.6360% to 3.712%. Information on the subscription assets as of
June 30, 2025 are as follows:
Asset Class
Subscription Asset
Value
Accumulated
Amortization
Software 18,670,895$ 5,217,661$
Governmental Activities
The future principal and interest lease payments as of June 30, 2025, were as follows:
Fiscal Year
Ending
June 30, Principal Interest Total
2026 1,730,965$ 375,299$ 2,106,264$
2027 1,513,283 325,749 1,839,032
2028 1,539,865 278,981 1,818,846
2029 1,482,168 231,288 1,713,456
2030 1,014,891 185,478 1,200,369
2031-2032 4,739,930 393,409 5,133,339
Totals 12,021,102$ 1,790,204$ 13,811,306$
83Feb. 10, 2026 Item #2 Page 121 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 12: LONG-TERM LIABILITIES
A. Private-Placement Loans
The City entered into private-placement loan agreements with the State Water Resources Control Board to
provide funds for the acquisition and construction of major capital facilities. These loans have been issued for the
Carlsbad Municipal Water District and the City’s Wastewater enterprise. These loans are direct obligations and
pledge the full faith and credit of the City. These loans pay principal and interest annually. Private-placement
loans outstanding at June 30, 2025, are as follows:
Original Interest Final Outstanding
Borrowing Rates Maturity at Year-End
Business-type activities
Private-placement loan
2005 State Water Resources Control Board 4812-550-0 9,694,504$ 2.50%2025 -$
2006 State Water Resources Control Board 05-721-550-0 20,763,473 2.30%2027 2,376,931
2014 State Water Resources Control Board 14820-550-0 22,150,000 1.00%2054 10,219,148
2023 State Water Resources Control Board 06-8605-110 4,601,000 2.45%2046 10,181
Total private-placement loans 12,606,260$
B. Debt without Government Commitment
In the opinion of City officials, the bonds listed below are not payable from any revenues or assets of the City, and
neither the full faith and credit nor the taxing power of the City, the State of California, nor any political subdivision
thereof, is obligated to the payment of the principal or interest on the bond. Accordingly, no liability has been
recorded in the accompanying financial statements.
1. Limited Obligation Improvement Bonds
As of June 30, 2025, the City has two series of assessment district bonds outstanding in the amount of
$14,355,000. These bonds were issued under the provisions of the Improvement Bond Act of 1915 and were
used to finance public infrastructure improvement projects. The City collects assessments to pay the bond debt.
These monies are accounted for in the assessment districts’ custodial funds.
2. Special Tax Bonds
As of June 30, 2025, the City has two series Community Facilities District (CFD) bonds outstanding in the amount
of $14,515,000. These bonds were issued under the provisions of the Mello-Roos Community Facilities Act of
1982 and were used to finance public infrastructure improvement projects. The City collects special taxes to pay
the bond debt. These monies are accounted for in the CFDs’ custodial funds.
3. Mortgage Revenue Bonds
Multi-Family Housing Revenue Bonds are issued to provide construction and permanent financing to developers
of multi-family residential rental projects located in the City which will be partially occupied by persons of low or
moderate income. The total amount of mortgage revenue bonds outstanding as of June 30, 2025, is $3,275,000.
The bonds, together with interest thereon, are limited obligations of the City payable solely from bond proceeds,
revenues and other amounts derived solely from home mortgage and developer loans secured by first deeds of
trust, irrevocable letters of credit, and irrevocable surety bonds.
84Feb. 10, 2026 Item #2 Page 122 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 12: LONG-TERM LIABILITIES (CONTINUED)
C. Revenue Rate Covenants
The City and Carlsbad Municipal Water District (CMWD) loan agreements with the State Water Resources
Control Board requires that City and CMWD set its charges for services and rates for fees each year at rates
sufficient to produce net revenues (after paying the operating and maintenance expenses of City and CMWD,
excluding depreciation) of at least one times debt service for that year. All of the wastewater revenue of the City
and water revenues of CMWD are pledged to meet these rate covenants and to secure related debt. All rate
covenants requirements were met for the fiscal year ended June 30, 2025.
D. Pledged Revenue
The City of Carlsbad and Carlsbad Municipal Water District has pledged water and wastewater revenues to
secure debt obligations for infrastructure improvements, with the debt maturing in 2054. The pledged revenues in
accordance with the terms of the loan represent water and wastewater fund revenues, net of certain expenses, as
June 30, 2025. The annual amount of revenues is $18,760,706, of which $2,258,528 is pledged revenues
exceeded the $1,931,065 million in principal and interest payments for the year. The pledge will remain in place
until the debt is fully repaid.
Description of Pledged
Revenue
Annual Amount of Pledged
Revenue (Net of Expenses)
Annual Debt Service
Payments
Debt Service as a
Percentage of Pledged
Revenue
Annual Amount of
Revenue (Net of
Expenses)
Water revenues 1,964,779$ 1,637,316$ 120% 5,055,152$
Wastewater revenues 293,749 293,749 100% 13,705,555
Total pledged revenues 2,258,528$ 1,931,065$ 18,760,707$
E. Change in Long-Term Liabilities
Changes in the City’s long‐term liabilities for the year ended June 30, 2025, are as follows:
Amount
Balance Balance Due Within
June 30, 2024 Additions Deletions June 30, 2025 One Year
Governmental activities
Leases 212,468$ -$ 28,050$ 184,418$ 29,883$
Subscriptions 3,367,410 12,087,465 3,433,773 12,021,102 1,730,965
Claims 31,990,454 19,203,665 5,297,390 45,896,729 21,130,869
Total governmental activities 35,570,332$ 31,291,130$ 8,759,213$ 58,102,249$ 22,891,717$
Business-type activities
Private-placement loans 14,581,128$ 104,144$ 2,079,012$ 12,606,260$ 1,477,342$
85Feb. 10, 2026 Item #2 Page 123 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 12: LONG-TERM LIABILITIES (CONTINUED)
The debt service requirements for the City’s loans are as follows:
June 30 Principal Interest
2026 1,477,342$ 156,861$
2027 1,514,046 127,031
2028 312,053 96,291
2029 315,179 93,164
2030 318,337 90,006
2031-2035 1,640,175 401,541
2036-2040 2,079,261 370,798
2041-2045 1,830,330 211,385
2046-2050 1,920,517 117,949
2051-2055 1,199,020 24,060
Totals 12,606,260$ 1,689,086$
Business-Type Activities
Private-Placement Loans
NOTE 13: FUND BALANCE
A. General Fund Balance Policy
Pursuant to City Council Policy 74, the City is committed to maintaining General Fund reserves at a target of
40% of General Fund annual operating expenditures. The total reserve level is calculated using the prior fiscal
years adopted General Fund budgeted expenditures. This reserve is for unforeseen emergencies or catastrophic
impacts upon the City. Reserves are evaluated annually in conjunction with the development of the City’s annual
operating budget process. Staff report to the City Council annually on the status of the reserve levels relative to this
policy.
86Feb. 10, 2026 Item #2 Page 124 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 13: FUND BALANCE (CONTINUED)
B. Fund Balance Classifications
At June 30, 2025, the governmental funds report the following fund balance classifications:
Community Total Total
Facilities Infrastructure Nonmajor Governmental
General District No. 1 Replacement Funds Funds
Nonspendable
Notes and loans receivable 124,411$ -$ -$ -$ 124,411$
Inventories 12,491 - - 4,563 17,054
Prepaid costs - - - 345,099 345,099
Advances to other funds 1,223,480 - - - 1,223,480
Total nonspendable 1,360,382 - - 349,662 1,710,044
Restricted
Affordable housing - - - 44,113,395 44,113,395
Lighting and landscaping districts - - - 12,061,047 12,061,047
Capital projects - 110,840,194 - 106,711,613 217,551,807
General government - - - 283,528 283,528
Public safety - - - 266,352 266,352
Community services - - - 4,616,658 4,616,658
Pension section 115 trust 20,190,662 - - - 20,190,662
Total restricted 20,190,662 110,840,194 - 168,052,593 299,083,449
Committed
Community activity grants 1,000,000 - - - 1,000,000
Pension section 115 trust 7,500,000 - - - 7,500,000
Total committed 8,500,000 - - - 8,500,000
Assigned
General government 1,097,679 - - - 1,097,679
Public safety 3,095,063 - - - 3,095,063
Community services 3,253,792 - - - 3,253,792
Public works 1,837,448 - - - 1,837,448
Capital projects - - 108,038,271 73,586,052 181,624,323
Safer streets program 353,571 - - - 353,571
Railroard trenching project 5,220,000 - - - 5,220,000
Stormwater protection program 6,000,000 - - - 6,000,000
Asset replacement 17,500,000 - - - 17,500,000
Economic uncertainty 9,635,909 - - - 9,635,909
Total assigned 47,993,462 - 108,038,271 73,586,052 229,617,785
Unassigned 141,107,692 - - (262,472) 140,845,220
Total fund balances (deficits)219,152,198$ 110,840,194$ 108,038,271$ 241,725,835$ 679,756,498$
87Feb. 10, 2026 Item #2 Page 125 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 14: INTERFUND ACTIVITIES
A. Advances to/from Other Funds
Receivable Fund Payable Fund Amount
General Fund Non-major governmental funds 1,223,480$
Community Facilities District #1 Non-major governmental funds 516,587
Non-major governmental funds Non-major governmental funds 4,550,000
Total 6,290,067$
Advances to and from other funds are primarily long-term advances used to fund capital projects in advance of
related revenues.
The advance between the General Fund and the Habitat & Agricultural Management Fund, a non-major
governmental fund, is estimated to be repaid from future Habitat Mitigation Fees. Interest on the advance will
compound annually at the average interest rate earned by the Treasurer’s Pool during the fiscal year.
The advance between the Community Facilities District No. 1 Fund and the Traffic Impact Projects Fund, a
non-major governmental fund, is estimated to be repaid over a 10–15-year period as Traffic Impact Fees are
collected.
The advance between the non-major Public Facilities Fees Fund and the non-major Park Development Funds is
estimated to be repaid at build-out.
B. Due To and From Other Funds
The due to/from in the amount of $552,073 is between the General Fund and the Grants and Other Capital
Projects Fund, a non-major governmental fund. This was needed to cover capital expenses incurred during the
fiscal year but reimbursement has not yet been remitted to the city by the granting agency. This remittance is
expected to be received during fiscal year 2026.
C. Interfund Transfers
Transfers in and out of other funds
Transfers In Transfers Out Amount
Infrastructure Replacement Fund General Fund 4,779,226$
General Fund Non-major governmental funds 33
Non-major proprietary funds General Fund 350,000
Non-major governmental funds General Fund 24,858,452
Infrastructure Replacement Fund Non-major governmental funds 200,000
Internal service funds General Fund 7,560,000
37,747,711$
Transfers are used to: (1) move revenues and expenditures to the appropriate funds; (2) use unrestricted
revenues collected in the General Fund to finance various programs accounted for in other funds in accordance
with Council authorizations; and (3) move excess cash collected for future capital replacement in accordance with
Council authorization.
88Feb. 10, 2026 Item #2 Page 126 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 14: INTERFUND ACTIVITIES (CONTINUED)
The $4,779,226 transfer to the Infrastructure Replacement Fund from the General Fund is to fund major
construction and replacement of City infrastructure and facilities. This transfer is in line with the requirements set
forth in City Council Policy No. 91-Long Term General Fund Capital Funding Policy.
The $33 transfer to the General Fund from the Rancho Santa Fe Road Project Fund, a Non-major governmental
fund represents the leftover cash in the capital project fund after developer refunds were issued to distribute
excess cash that remained in the fund after the road project was completed.
The $24,858,452 transfer is split between three special revenue funds, all of which are nonmajor governmental
funds, from the General Fund. These transfers include, $18,579,226 to the General Capital Construction Fund to
fund major new construction of City infrastructure and facilities and $4,779,226 to the Technology Investment
Capital Fund to fund major technology projects. These transfers are in line with the requirements set forth in City
Council Policy No. 91-Long Term General Fund Capital Funding Policy. A transfer of $1,500,000 to the Financing
Districts Fund is to cover annual operating expenditures in excess of annual assessments on the City’s median
and street tree assessment districts.
The $200,000 transfer to the Infrastructure Replacement Fund is from the Other Special Revenue Funds, a non-
major governmental fund. The transfer represents that fund's contribution to the library auditorium renovation
project.
The $350,000 transfer to the Solid Waste Fund, a non-major enterprise fund, from the General Fund is to
reimburse the Solid Waste Fund for the General Fund’s portion of annual storm water expenses.
The $7,560,000 transfer to internal service funds from the General Fund represents two transfers from the
General Fund which include: $7,000,000 to the Worker’s Compensation Internal Service Fund to increase the
estimated claims liability in accordance with recent actuarial reports and $560,000 to the Fleet Management
Internal Service Fund to cover historical chargebacks related to a police vehicle purchase.
NOTE 15: CONTINGENCIES
The City participates in various federal grant programs, the principal of which are subject to program compliance
audits pursuant to the Single Audit Act as amended. Accordingly, the City’s compliance with applicable grant
requirements will be established at a future date. The amount of expenditures which may be disallowed by the
granting agencies cannot be determined at this time, although the City anticipates such amounts, if any, will be
immaterial.
The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable,
in the opinion of the City’s legal counsel, the resolution of these matters will not have a material adverse effect on
the financial condition of the City.
NOTE 16: RESTATEMENTS
A. Error Correction
The City corrected an error pertaining to capital assets acquired in prior years amounting to $3,095,825 that was
not previously converted into the full accrual government-wide statements.
B. Change in Accounting Principle
For fiscal year ended June 30, 2025, the City implemented GASB Statement No. 101, Compensated Absences,
which updated the recognition and measurement guidance for compensated absences, to align recognition and
measurement under a single unified model to better meet the needs of financial statement users; refer to note 1.
89Feb. 10, 2026 Item #2 Page 127 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 16: RESTATEMENTS (CONTINUED)
C. Adjustments to and Restatements of Beginning Balances
During fiscal year 2025, changes to or within the financial reporting entity and the change in accounting principle
resulted in adjustments to and restatements of beginning net position and fund net position, as follows:
June 30, 2024 Changes in
As Previously Error Accounting June 30, 2024
Reported Correction
2 Principle1 As Restated
Government-wide
Governmental activities 1,347,904,616$ 3,095,825$ (9,200,310)$ 1,341,800,131$
Business-type activities 557,821,553 - (749,411) 557,072,142
Total government-wide 1,905,726,169$ 3,095,825$ (9,949,721)$ 1,898,872,273$
Governmental funds
Major funds
General fund 200,639,657$ -$ 6,757,384$ 207,397,041$
Community Facilities District #1 102,618,821 - - 102,618,821
Infrastructure Replacement Fund 110,684,797 - - 110,684,797
Nonmajor funds 211,486,588 - - 211,486,588
Total governmental funds 625,429,863$ -$ 6,757,384$ 632,187,247$
Proprietary funds
Major funds
Carlsbad Municipal Water District 326,084,140$ -$ (478,179)$ 325,605,961$
Wastewater 191,823,074 - (192,035) 191,631,039
Nonmajor funds 35,524,338 - (79,197) 35,445,141
Internal service funds 53,474,095 - (789,808) 52,684,287
Total proprietary and internal service funds 606,905,647$ -$ (1,539,219)$ 605,366,428$
1 Change in Accounting principal from implementation of GASB 101. Additionally, $6,757,384 increase in the General
Fund is related to elimination of the Self-Insured Benefits Internal Service Fund, where governmental activities
compensated absences were previously maintained. Cash previously held in the fund was transferred to the General
Fund, resulting in an increase in the General Fund.
2 Error Correction is due to the City recording prior year Capital Asset activity pertaining to governmental activities in
Fiscal Year 2025.
NOTE 17: JOINT VENTURES
A. Encina Water Pollution Control Facilities
The Encina Water Pollution Control Facilities (the facilities) are wastewater facilities owned jointly by the cities of
Carlsbad, Vista and Encinitas and the Leucadia Wastewater District, the Buena Vista Sanitation District, and
the Vallecitos Water District. The Encina Wastewater Authority (EWA) is a joint powers authority established to
operate and administer the facilities. It is responsible for the management, maintenance, and operations of the
joint system. Each member agency has a specified percentage of ownership in the various components of the
Encina Water Pollution Control Facilities that varies from component to component. Accordingly, each member
agency reports its undivided interest in the facilities as a part of that member agency’s capital assets.
90Feb. 10, 2026 Item #2 Page 128 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 17: JOINT VENTURES (CONTINUED)
As of June 30, 2025, the undivided interest of each member agency in the various components of the Encina
Water Pollution Control Facilities aggregated as follows:
EWA does not recognize net income or loss. Net operating expenditures in excess of users’ assessments are
treated as accounts receivable on EWA’s books and charged to users’ accounts in the following year. Conversely,
users’ assessments in excess of net operating expenditures are treated as a liability and credited against users’
accounts, also in the following year. Under this basis, net operating gain (before member billings) for EWA totaled
$29,572 in fiscal year 2023-24. The financial statements of EWA can be obtained at www.encinajpa.com.
NOTE 18: SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER DEVELOPMENT AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the bill”) which provides for
the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of
the City that previously had reported a redevelopment agency within the reporting entity of the City as a blended
component unit. The bill provides that upon dissolution of a redevelopment agency, either the City or another unit
of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to
other units of state and local government. On January 10, 2012, the City Council elected to become the
Successor Agency for the former redevelopment agency in accordance with the bill as part of City Council
Resolution No. 2012-013 and Housing and Redevelopment Commission Resolution No. 519.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California
cannot enter into new projects, obligations, or commitments. Subject to the control of a newly established
oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of the
dissolution (including the completion of any unfinished projects that were subject to legally enforceable
contractual commitments). In future years, successor agencies will only be allowed revenue in the amount that is
necessary to pay the estimated annual installment payments on enforceable obligations of the former
redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full
and all assets have been liquidated. On March 7, 2014, the City received notice from the California Department of
Finance that the loans previously made by the City to the former redevelopment agency are enforceable
obligations and that they were made for legitimate redevelopment purposes. This approval allowed the City to list
repayment of these loans on future Redevelopment Obligation Payment Schedules (ROPS). In accordance with
the timeline set forth in the bill (as modified by the California Supreme Court on December 29, 2011) all
redevelopment agencies in the State of California were dissolved and ceased to operate as legal entities as of
February 1, 2012.
NOTE 19: SUBSEQUENT EVENTS
The City evaluated subsequent events for recognition and disclosure through December 23, 2025, the date on
which these financial statements were available to be issued. Management concluded that no material
subsequent events have occurred since June 30, 2025, that required recognition or disclosure in these financial
statements.
City of Vista 25%
City of Carlsbad 24%
Vallecitos Water District 23%
Leucadia Wastewater District 17%
Buena Sanitation District 7%
City of Encinitas 4%
91Feb. 10, 2026 Item #2 Page 129 of 226
92Feb. 10, 2026 Item #2 Page 130 of 226
RRequired Supplementary
Information
93Feb. 10, 2026 Item #2 Page 131 of 226
94Feb. 10, 2026 Item #2 Page 132 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
General Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 206,180,877$ 206,180,877$ 202,924,969$ (3,255,908)$
Licenses and permits 3,373,500 3,373,500 3,445,294 71,794
Intergovernmental 1,726,000 1,803,515 3,376,736 1,573,221
Charges for services 14,608,566 14,608,566 13,956,468 (652,098)
Use of money and property 7,047,480 7,047,480 15,249,996 8,202,516
Fines and forfeitures 351,700 351,700 394,978 43,278
Contributions 19,000 19,000 28,748 9,748
Miscellaneous 332,500 384,850 494,765 109,915
Total revenues 233,639,623 233,769,488 239,871,954 6,102,466
EXPENDITURES
Current:
General government 23,083,419 26,057,223 22,162,430 3,894,793
Less: interdepartmental charges (5,427,750) (5,503,963) (5,462,411) (41,552)
Public safety 101,911,557 103,320,041 99,682,899 3,637,142
Community services 52,113,299 60,688,324 50,528,004 10,160,320
Public works 23,745,092 25,690,691 23,113,745 2,576,946
Capital outlay 75,400 2,631,883 552,290 2,079,593
Debt service:
Principal expense - - 13,160 (13,160)
Interest and fiscal charges - - 1,167 (1,167)
Total expenditures 195,501,017 212,884,199 190,591,284 22,292,915
Excess (deficiency) of revenues
over (under) expenditures 38,138,606 20,885,289 49,280,670 28,395,381
OTHER FINANCING SOURCES (USES)
Transfers in - 33 33 -
Transfers out (37,547,678) (37,547,678) (37,547,678) -
Inception of SBITAs - - 11,637 11,637
Proceeds from sale of capital assets - - 10,495 10,495
Total other financing sources (uses)(37,547,678) (37,547,645) (37,525,513) 22,132
Net change in fund balances 590,928$ (16,662,356)$ 11,755,157 28,417,513$
Fund balances-beginning, as previously reported 200,639,657
Restatement-change in accounting principle 6,757,384
Fund balances (deficit)-beginning, as restated 207,397,041
Fund balances-ending 219,152,198$
95Feb. 10, 2026 Item #2 Page 133 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Changes in Net Pension Liability and Related Ratios
Miscellaneous Plan
As of June 30, for the Last Ten Fiscal Years
2025 2024 2023 2022
Measurement Date 6/30/2024 6/30/2023 6/30/2022 6/30/2021
TOTAL PENSION LIABILITY
Service cost 10,024,673$ 9,384,087$ 8,937,350$ 8,267,207$
Interest on total pension liability 33,733,327 32,306,074 30,675,372 29,773,920
Changes of benefit terms - 493,430 - -
Changes of assumptions - - 13,648,298 -
Difference between expected and actual experience 3,642,412 6,817,230 (1,847,457) 3,459,759
Benefit payments, including refunds of employee
contributions (25,481,430) (24,454,641) (22,572,119) (21,477,657)
Net change in total pension liability 21,918,982 24,546,180 28,841,444 20,023,229
Total pension liability-beginning 492,974,765 468,428,585 439,587,141 419,563,912
Total pension liability-ending (a)514,893,747 492,974,765 468,428,585 439,587,141
PLAN FIDUCIARY NET POSITION
Contributions-employer 12,662,206 12,670,687 14,517,690 16,551,765
Contributions-employee 4,314,651 3,839,779 3,756,998 3,436,290
Net investment income 36,436,199 22,662,060 (30,545,136) 74,476,234
Benefit payments, including refunds of employee
contributions (25,481,430) (24,454,641) (22,572,119) (21,477,657)
Net plan to plan resource movement - 677 - -
Administrative expense (312,375) (271,673) (252,005) (331,533)
Other miscellaneous income/(expense)- - - -
Net change in fiduciary net position 27,619,251 14,446,889 (35,094,572) 72,655,099
Plan fiduciary net position-beginning 383,892,719 369,445,830 404,540,402 331,885,303
Plan fiduciary net position-ending (b)411,511,970 383,892,719 369,445,830 404,540,402
Net pension liability/(asset) (a) - (b)103,381,777$ 109,082,046$ 98,982,755$ 35,046,739$
Plan fiduciary net position as a percentage of the
total pension liability 79.9%77.9%78.9%92.0%
Covered payroll 51,968,236$ 47,442,298$ 44,376,116$ 44,068,269$
Plan net pension liability/(asset) as a percentage of
covered payroll 198.9%229.9%223.1%79.5%
Notes to Schedule of Changes in the Net Pension Liability and Related Ratios:
Benefit Changes : The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the
Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not
included in the figures above, unless the liability impact is deemed to be material by the plan actuary.
Changes of Assumptions:There were no assumption changes in 2023 or 2024.Effective with the June 30, 2021,valuation date (June 30, 2022,measurement
date), the accounting discount rate was reduced from 7.15%to 6.90%.In determining the long-term expected rate of return, CalPERS took into account
long-term market return expectations as well as the expected pension fund cash flows.In addition, demographic assumptions and the price inflation
assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was
7.15% for measurement dates June 30, 2017, through June 30, 2021, and 7.65% for measurement dates June 30, 2015, through June 30, 2016.
96Feb. 10, 2026 Item #2 Page 134 of 226
2021 2020 2019 2018 2017 2016
6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015
7,748,623$ 7,393,365$ 7,642,062$ 7,836,970$ 6,836,445$ 6,674,982$
28,392,127 27,175,110 25,874,546 25,085,808 24,192,948 23,142,961
- - - - - -
- - (2,662,243) 20,988,178 - (5,737,798)
1,167,225 2,338,341 (3,023,977) (3,079,012) (2,605,228) 1,300,520
(19,590,424) (18,193,803) (16,887,970) (15,327,609) (14,344,528) (12,791,734)
17,717,551 18,713,013 10,942,418 35,504,335 14,079,637 12,588,931
401,846,361 383,133,348 372,190,930 336,686,595 322,606,958 310,018,027
419,563,912 401,846,361 383,133,348 372,190,930 336,686,595 322,606,958
10,637,969 17,745,975 22,114,923 14,677,334 9,562,926 8,434,882
3,338,003 3,040,423 3,005,761 2,820,046 2,833,466 2,703,715
15,901,834 19,551,424 22,720,698 26,893,994 1,330,196 5,362,753
(19,590,424) (18,193,803) (16,887,970) (15,327,609) (14,344,528) (12,791,734)
- - 3,388 (2,793) - (298,989)
(454,014) (214,173) (421,336) (356,827) (147,759) (273,288)
- 670 (800,124) - - -
9,833,368 21,930,516 29,735,340 28,704,145 (765,699) 3,137,339
322,051,935 300,121,419 270,386,079 241,681,934 242,447,633 239,310,294
331,885,303 322,051,935 300,121,419 270,386,079 241,681,934 242,447,633
87,678,609$ 79,794,426$ 83,011,929$ 101,804,851$ 95,004,661$ 80,159,325$
79.1%80.1%78.3%72.6%71.8%75.2%
40,357,411$ 37,238,668$ 37,956,006$ 37,336,682$ 35,303,101$ 33,730,770$
217.3%214.3%218.7%272.7%269.1%237.6%
97Feb. 10, 2026 Item #2 Page 135 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Changes in Net Pension Liability and Related Ratios
Safety Plan
As of June 30, for the Last Ten Fiscal Years
2025 2024 2023 2022
Measurement Date 6/30/2024 6/30/2023 6/30/2022 6/30/2021
TOTAL PENSION LIABILITY
Service cost 9,291,216$ 8,802,595$ 8,397,439$ 7,535,523$
Interest on total pension liability 28,001,776 26,380,201 24,991,969 23,741,151
Changes of benefit terms - 138,033 - -
Changes of assumptions - - 13,165,149 5,936,553
Difference between expected and actual experience 8,696,819 5,815,319 3,204,494 -
Benefit payments, including refunds of employee
contributions (21,000,727) (20,244,938) (18,607,148) (17,230,615)
Net change in total pension liability 24,989,084 20,891,210 31,151,903 19,982,612
Total pension liability-beginning 402,980,775 382,089,565 350,937,662 330,955,050
Total pension liability-ending (a)427,969,859 402,980,775 382,089,565 350,937,662
PLAN FIDUCIARY NET POSITION
Contributions-employer 12,395,743 11,378,178 13,322,734 14,253,531
Contributions-employee 3,505,497 3,328,710 3,020,571 2,861,027
Net investment income 28,013,152 17,486,416 (23,360,492) 56,569,028
Benefit payments, including refunds of employee
contributions (21,000,727) (20,244,938) (18,607,148) (17,230,615)
Net plan to plan resource movement - (677) - -
Administrative expense (239,460) (207,770) (192,091) (251,893)
Other miscellaneous income/(expense)- - - -
Net change in fiduciary net position 22,674,205 11,739,919 (25,816,426) 56,201,078
Plan fiduciary net position-beginning 294,284,768 282,544,849 308,361,275 252,160,197
Plan fiduciary net position-ending (b)316,958,973 294,284,768 282,544,849 308,361,275
Net pension liability/(asset) (a) - (b)111,010,886$ 108,696,007$ 99,544,716$ 42,576,387$
Plan fiduciary net position as a percentage of the
total pension liability 74.1%73.0%73.9%87.9%
Covered payroll 30,393,249$ 28,368,016$ 26,557,367$ 28,368,016$
Plan net pension liability/(asset) as a percentage of
covered payroll 365.2%383.2%374.8%150.1%
Notes to Schedule of Changes in the Net Pension Liability and Related Ratios:
Benefit Changes: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the
Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included
in the figures above, unless the liability impact is deemed to be material by the plan actuary.
Changes of Assumptions:There were no assumption changes in 2023 or 2024.Effective with the June 30, 2021,valuation date (June 30, 2022,measurement
date), the accounting discount rate was reduced from 7.15%to 6.90%.In determining the long-term expected rate of return, CalPERS took into account
long-term market return expectations as well as the expected pension fund cash flows.In addition, demographic assumptions and the price inflation assumption
were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for
measurement dates June 30, 2017, through June 30, 2021, and 7.65% for measurement dates June 30, 2015, through June 30, 2016.
98Feb. 10, 2026 Item #2 Page 136 of 226
2021 2020 2019 2018 2017 2016
6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015
6,578,451$ 6,317,755$ 5,985,155$ 5,825,080$ 5,209,900$ 5,048,529$
22,410,699 21,269,278 20,248,091 19,305,098 18,557,781 17,775,039
- - - - - -
4,071,899 2,425,561 (1,332,336) 16,661,943 - (4,517,683)
- - 2,726,755 (705,417) (941,378) 638,786
(16,362,437) (15,288,250) (13,797,333) (13,034,483) (12,197,119) (11,264,768)
16,698,612 14,724,344 13,830,332 28,052,221 10,629,184 7,679,903
314,256,438 299,532,094 285,701,762 257,649,541 247,020,357 239,340,454
330,955,050 314,256,438 299,532,094 285,701,762 257,649,541 247,020,357
10,321,371 23,119,896 8,675,370 12,379,181 6,836,098 6,491,856
2,581,027 2,380,740 2,169,504 1,922,500 1,933,363 1,726,785
12,053,297 14,331,677 17,250,148 20,385,351 990,545 4,107,305
(16,362,437) (15,288,250) (13,797,333) (13,034,483) (12,197,119) (11,264,768)
- - (4,566) 2,793 - -
(343,854) (156,656) (321,256) (272,813) (114,168) (210,908)
508 (610,070) - - - -
8,249,912 23,777,337 13,971,867 21,382,529 (2,551,281) 850,270
243,910,285 220,132,948 206,161,081 184,778,552 187,329,833 186,479,563
252,160,197 243,910,285 220,132,948 206,161,081 184,778,552 187,329,833
78,794,853$ 70,346,153$ 79,399,146$ 79,540,681$ 72,870,989$ 59,690,524$
76.2%77.6%73.5%72.2%71.7%75.8%
22,082,749$ 20,905,182$ 19,820,362$ 19,072,985$ 18,658,097$ 18,020,162$
356.8%336.5%400.6%417.0%390.6%331.2%
99Feb. 10, 2026 Item #2 Page 137 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Changes in Net OPEB Liability and Related Ratios
As of June 30, for the Last Ten Fiscal Years 1
2025 2024 2023 2022
Measurement Date 6/30/2024 6/30/2023 6/30/2022 6/30/2021
TOTAL OPEB LIABILITY
Service cost 719,364$ 778,330$ 757,499$ 669,651$
Interest on total pension liability 1,263,726 1,304,885 1,248,183 1,347,382
Changes of assumptions - (368,751) - 625,021
Difference between expected and actual experience - (1,152,348) - (922,167)
Benefit payments, including refunds of employee
contributions (1,180,362) (1,143,026) (1,095,532) (1,074,741)
Net change in total OPEB liability 802,728 (580,910) 910,150 645,146
Total OPEB liability-beginning 20,090,427 20,671,337 19,761,187 19,116,041
Total OPEB liability-ending (a)20,893,155 20,090,427 20,671,337 19,761,187
PLAN FIDUCIARY NET POSITION
Contributions-employer 1,190,682 1,153,114 1,102,669 1,180,559
Net investment income 2,063,628 1,136,537 (2,735,878) 4,387,820
Benefit payments, including refunds of employee
contributions (1,180,362) (1,143,026) (1,095,532) (1,074,741)
Administrative expense (16,458) (15,230) (12,314) (11,858)
Net change in fiduciary net position 2,057,490 1,131,395 (2,741,055) 4,481,780
Plan fiduciary net position-beginning 18,834,192 17,702,797 20,443,852 15,962,072
Plan fiduciary net position-ending (b)20,891,682 18,834,192 17,702,797 20,443,852
Net OPEB liability/(asset) (a) - (b)1,473$ 1,256,235$ 2,968,540$ (682,665)$
Plan fiduciary net position as a percentage of the
total OPEB liability 100.0%93.7%85.6%103.5%
Covered-employee payroll 81,442,835$ 73,399,622$ 72,712,238$ 70,276,885$
Plan net OPEB liability/(asset) as a percentage of
covered-employee payroll 0.0%1.7%4.1%-1.0%
Notes to Schedule of Changes in the Net OPEB Liability and Related Ratios:
- Updated medical trend rates
- PEMHCA minimum increases updated to 3.50% annually
Benefit Changes : None
Changes of Assumptions :
Changes of Assumptions:There were no assumption changes in 2023 or 2024.Effective with the June 30, 2021,valuation date (June 30, 2022,
measurement date),the accounting discount rate was reduced from 7.15%to 6.90%.In determining the long-term expected rate of return, CalPERS
took into account long-term market return expectations as well as the expected pension fund cash flows.In addition, demographic assumptions and
the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The
accounting discount rate was 7.15%for measurement dates June 30, 2017,through June 30, 2021, and 7.65%for measurement dates June 30, 2015,
through June 30, 2016.
1 Fiscal year 2018 was the first year of GASB Statement No. 75 implementation; therefore only eight years are shown for the OPEB plan.
100Feb. 10, 2026 Item #2 Page 138 of 226
2021 2020 2019 2018
6/30/2020 6/30/2019 6/30/2018 6/30/2017
657,941$ 536,124$ 520,509$ 505,348$
1,301,716 1,167,930 1,113,646 1,064,137
(281,685) 1,232,232 - -
- (203,116) - -
(999,866) (887,656) (860,894) (893,899)
678,106 1,845,514 773,261 675,586
18,437,935 16,592,421 15,819,160 15,143,574
19,116,041 18,437,935 16,592,421 15,819,160
1,085,866 978,302 860,894 747,772
541,912 887,132 1,064,150 1,281,487
(999,866) (887,656) (860,894) (893,899)
(7,493) (3,078) (24,735) -
620,419 974,700 1,039,415 1,135,360
15,341,653 14,366,953 13,327,538 12,192,178
15,962,072 15,341,653 14,366,953 13,327,538
3,153,969$ 3,096,282$ 2,225,468$ 2,491,622$
83.5%83.2%86.6%84.2%
66,834,422$ 61,458,568$ 56,982,964$ 54,810,859$
4.7%5.0%3.9%4.5%
1 Fiscal year 2018 was the first year of GASB Statement No. 75 implementation; therefore only eight years are shown for the OPEB plan.
101Feb. 10, 2026 Item #2 Page 139 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedules of Plan Contributions
As of June 30, for the Last Ten Fiscal Years 1
Covered/Contribution as a
Fiscal Year Actuarially Actual Contribution Covered-% of Covered/
Ending Determined Employer Deficiency Employee Covered Employee
June 30,Contribution Contributions (Excess)Payroll Payroll
2025 8,103,356$ 14,385,659$ (6,282,303)$ 53,953,150$ 26.7%
2024 12,670,687 12,647,980 22,707 51,968,236 24.3%
2023 11,317,690 14,517,690 (3,200,000) 47,442,298 30.6%
2022 11,148,625 16,551,765 (5,403,140) 44,376,116 37.3%
2021 10,637,969 10,637,969 - 44,068,269 24.1%
2020 11,966,625 17,745,975 (5,779,350) 40,357,411 44.0%
2019 10,456,115 22,114,923 (11,658,808) 37,238,668 59.4%
2018 10,338,549 14,677,334 (4,338,785) 37,956,006 38.7%
2017 9,562,926 9,562,926 - 37,336,682 25.6%
2016 8,434,882 8,434,882 - 35,303,101 23.9%
2025 7,360,036$ 13,737,276$ (6,377,240)$ 32,286,002$ 42.5%
2024 11,378,178 12,394,561 (1,016,383) 30,393,249 40.8%
2023 10,122,734 13,322,734 (3,200,000) 28,368,016 47.0%
2022 9,656,671 14,253,531 (4,596,860) 25,604,904 55.7%
2021 10,321,371 10,321,371 - 28,368,016 36.4%
2020 8,899,246 23,119,896 (14,220,650) 22,082,749 104.7%
2019 7,777,021 8,675,370 (898,349) 20,905,182 41.5%
2018 7,695,135 12,379,181 (4,684,046) 19,820,362 62.5%
2017 6,836,098 6,836,098 - 19,072,985 35.8%
2016 6,491,856 6,491,856 - 18,658,097 34.8%
2025 908,532$ 1,190,682$ (282,150)$ 85,153,285$ 1.4%
2024 886,317 1,153,114 (266,797) 81,442,835 1.4%
2023 791,699 1,102,669 (310,970) 73,399,622 1.5%
2022 768,612 1,180,557 (411,945) 72,712,238 1.6%
2021 962,244 1,085,864 (123,620) 70,276,885 1.5%
2020 941,129 978,302 (37,173) 66,834,422 1.5%
2019 788,383 860,894 (72,511) 61,458,568 1.4%
2018 770,693 747,772 22,921 56,982,964 1.3%
1 Fiscal year 2018 was the first year of GASB Statement No.75 implementation; therefore only eight years are shown for the
OPEB plan.
Miscellaneous Agent, Multiple-Employer Pension Plan
Safety Agent, Multiple-Employer Pension Plan
OPEB Agent, Multiple-Employer Pension Plan
102Feb. 10, 2026 Item #2 Page 140 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Required Supplementary Information
For the Year Ended June 30, 2025
NOTE 1: NOTES TO SCHEDULE OF PLAN CONTRIBUTIONS
A. Pension Plans
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2024-25
were derived from the June 30, 2023, funding valuation reports, available at CalPERS’ website
https://www.calpers.ca.gov/.
B. Other Postemployment Benefits Plan
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2024-25
were derived from the June 30, 2024, actuarial valuation report.
Entry Age Normal
6.90%
2.30%
2.80%
6.80% net of pension plan investment and administrative expenses; includes inflation
Derived using CalPERS Membership Data for all funds.
Derived using CalPERS Membership Data for all funds.
Based in part on premium experience.
1
2
3
Pre-Retirement Turnover (2)
Healthcare Trend Rate (3)
Notes:
Based on CalPERS 2000-2019 Experience Study. The Experience Study Reports may be accessed on the CalPERS
website www.calpers.ca.gov under Forms and Publications
Based on CalPERS 2000-2019 Experience Study. The Experience Study Reports may be accessed on the CalPERS
website www.calpers.ca.gov under Forms and Publications
Short-Term healthcare trends were developed in consultation with Axene Health Partners' healthcare actuaries. Long-
term healthcare trend development using Society of Actuaries' Getzen Model of Long-Run Medical Cost Trends.
Actuarial Cost Method:
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Investment Rate of Return
Mortality Rate (1)
Actuarial cost method:Entry age normal, level percentage of pay
Amortization method/period:24-year fixed period for 2024/25
Asset valuation method:Market value of assets
Inflation:2.50%
Salary increases:CalPERS 2000-2019 Experience Study
Payroll growth:2.75%
Investment rate of return:6.25%
Medical trend:Non-Medicare - 8.50% for 2025, decreasing to an ultimate rate of 3.45%
in 2076
Medicare (Non-Kaiser) - 7.50% for 2025, decreasing to an ultimate rate
of 3.45% in 2076
Medicare (Kaiser) - 6.25% for 2025, decreasing to an ultimate rate of
3.45% in 2076
Mortality:Mortality projected fully generational with Scale MP-2021
103Feb. 10, 2026 Item #2 Page 141 of 226
CITY OF CARLSBAD, CALIFORNIA
Notes to the Required Supplementary Information
For the Year Ended June 30, 2025
NOTE 2: BUDGETARY INFORMATION
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
• During May or June, the City Manager submits a proposed operating, strategic digital transformation
investment program and capital improvement program budgets for the fiscal year commencing the following
July 1 to the City Council. The budget includes estimated revenues and proposed expenditures on a departmental
and/or project basis.
• In June, a public hearing is conducted at a City Council meeting to obtain citizens’ comments.
• Prior to July 1, the budget is enacted legally through passage of an appropriation resolution.
• For purposes of budgetary presentation, actual revenues have been adjusted to exclude unrealized gains and
losses pursuant to GASB. Actual expenditures have been adjusted to include encumbrances outstanding.
Annual budgets are adopted for the General Fund, special revenue funds and capital project funds.
The City of Carlsbad does not distinguish between Basis of Budgeting and Basis of Accounting. The principles set
forth as the Basis of Accounting are strictly observed in the budgeting process. A fund’s Basis of Budgeting and
Basis of Accounting determines when a transaction or event is recognized; refer to Note 1 Summary of Significant
Accounting Policies in the Notes to the Basic Financial Statements for more information. Only revenues and
expenditures anticipated during the fiscal year are included in the budget. All appropriations lapse at fiscal-year end
unless the City Council takes action in the form of a resolution to continue the appropriation into the following fiscal
year, or, if the appropriation is less than $100,000, the City Manager may approve to continue the appropriation into
the following fiscal year.
Budgetary control, the level at which expenditures cannot legally exceed the appropriated amount, is at the fund
level. Council and Administrative policies provide guidelines on budget transfers and the authorization necessary
to implement transfers. Generally, there are two types of budget transfers:
• Budget adjustment: This is a transfer which does not change the total appropriated amount within a fund and
does not require Council action. Approval is granted at the City Manager level.
• Budget amendment: This is an adjustment to the total appropriated amount within a fund or business unit which
was not included in the original budget. Revisions that alter the total appropriations of any fund must be
approved by a simple majority of the City Council via a resolution with the exception of budget increases that
involve offsetting revenues and expenditures. The City Manager is authorized to increase an appropriation for
a specific purpose where the appropriation is offset by unbudgeted revenue, which is designated for said
specific purpose.
104Feb. 10, 2026 Item #2 Page 142 of 226
CCombining and Individual Fund
Statements and Schedules
105Feb. 10, 2026 Item #2 Page 143 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
ASSETS
Cash and cash equivalents 15,464,556$ 647,486$ 3,711,824$ 12,198,390$
Receivables (net of allowance for uncollectible):
Accounts - - - 7,304
Accrued interest 4,872,819 4,174 23,928 78,636
Due from other governments 42,138 - - -
Notes and loans 27,808,201 - - -
Leases 226,969 2,867,965 - -
Other 13,600 - - 12,785
Inventories - - 4,563 -
Prepaid costs - - - -
Land held for resale - 256,380 - -
Advances to other funds - - - -
Total assets 48,428,283$ 3,776,005$ 3,740,315$ 12,297,115$
LIABILITIES
Accrued liabilities 25,142$ 66,908$ 44,651$ 236,068$
Unearned revenues - - - -
Deposits payable - - - -
Due to other governments - - - -
Due to other funds - - - -
Advances from other funds - - - -
Total liabilities 25,142 66,908 44,651 236,068
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 4,815,115 - - -
Lease-related 236,840 2,782,731 - -
Total deferred inflows of resources 5,051,955 2,782,731 - -
FUND BALANCES (DEFICITS)
Nonspendable - - 4,563 -
Restricted 43,351,186 926,366 3,691,101 12,061,047
Assigned - - - -
Unassigned - - - -
Total fund balances (deficits)43,351,186 926,366 3,695,664 12,061,047
Total liabilities, deferred inflows of resources,
and fund balances (deficits)48,428,283$ 3,776,005$ 3,740,315$ 12,297,115$
Special Revenue Funds
Affordable
Housing
Community
Development
Block Grant Donations
Financing
Districts
106Feb. 10, 2026 Item #2 Page 144 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
ASSETS
Cash and cash equivalents
Receivables (net of allowance for uncollectible):
Accounts
Accrued interest
Due from other governments
Notes and loans
Leases
Other
Inventories
Prepaid costs
Land held for resale
Advances to other funds
Total assets
LIABILITIES
Accrued liabilities
Unearned revenues
Deposits payable
Due to other governments
Due to other funds
Advances from other funds
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Lease-related
Total deferred inflows of resources
FUND BALANCES (DEFICITS)
Nonspendable
Restricted
Assigned
Unassigned
Total fund balances (deficits)
Total liabilities, deferred inflows of resources,
and fund balances (deficits)
(Continued)
954,853$ 239,805$ 877,502$ 439,604$
- - - -
6,155 1,211 6,669 1,566
- - 161,071 55,696
- - - -
- - - -
- 56,970 - -
- - - -
- - - -
- - - -
- - - -
961,008$ 297,986$ 1,045,242$ 496,866$
-$ 14,458$ 27,147$ 25,896$
- - 669,170 -
- - - 5,534
- - - 1,843
- - - -
1,223,480 - - -
1,223,480 14,458 696,317 33,273
- - 119,566 -
- - - -
- - 119,566 -
- - - -
- 283,528 229,359 463,593
- - - -
(262,472) - - -
(262,472) 283,528 229,359 463,593
961,008$ 297,986$ 1,045,242$ 496,866$
Special Revenue Funds
Habitat and
Agricultural
Management
Other Special
Revenue
Funds
Police Grants
and Asset
Forfeiture
Federal Rental
Assistance
Program
107Feb. 10, 2026 Item #2 Page 145 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
ASSETS
Cash and cash equivalents
Receivables (net of allowance for uncollectible):
Accounts
Accrued interest
Due from other governments
Notes and loans
Leases
Other
Inventories
Prepaid costs
Land held for resale
Advances to other funds
Total assets
LIABILITIES
Accrued liabilities
Unearned revenues
Deposits payable
Due to other governments
Due to other funds
Advances from other funds
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Lease-related
Total deferred inflows of resources
FUND BALANCES (DEFICITS)
Nonspendable
Restricted
Assigned
Unassigned
Total fund balances (deficits)
Total liabilities, deferred inflows of resources,
and fund balances (deficits)
368,449$ 994,400$ 5,312,230$ 2,636,144$
- - - -
- 6,409 35,364 16,994
- - 325,092 -
- - - -
- - - -
3,041 - - -
- - - -
946 - - -
- - - -
- - - -
372,436$ 1,000,809$ 5,672,686$ 2,653,138$
28,598$ 18,494$ 176,904$ -$
- 945,167 - -
44,276 - - 426,179
- - - -
- - - -
- - - -
72,874 963,661 176,904 426,179
- - 5,492,180 -
- - - -
- - 5,492,180 -
946 - - -
298,616 37,148 3,602 2,226,959
- - - -
- - - -
299,562 37,148 3,602 2,226,959
372,436$ 1,000,809$ 5,672,686$ 2,653,138$
Special Revenue Funds
Capital
Projects Funds
Tyler Court
Apartments
Opioid
Settlements
Housing and
Homeless
Grants
Assessment
and Other
Districts
108Feb. 10, 2026 Item #2 Page 146 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
ASSETS
Cash and cash equivalents
Receivables (net of allowance for uncollectible):
Accounts
Accrued interest
Due from other governments
Notes and loans
Leases
Other
Inventories
Prepaid costs
Land held for resale
Advances to other funds
Total assets
LIABILITIES
Accrued liabilities
Unearned revenues
Deposits payable
Due to other governments
Due to other funds
Advances from other funds
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Lease-related
Total deferred inflows of resources
FUND BALANCES (DEFICITS)
Nonspendable
Restricted
Assigned
Unassigned
Total fund balances (deficits)
Total liabilities, deferred inflows of resources,
and fund balances (deficits)
(Continued)
2,054,112$ 21,790,341$ 59,958,926$ -$
- - - -
13,241 140,193 386,515 7,416
- 830,052 - 1,892,939
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
2,067,353$ 22,760,586$ 60,345,441$ 1,900,355$
-$ 241,242$ 1,904,771$ 228,564$
- - - -
- - - -
- - - -
- - - 552,073
- - - -
- 241,242 1,904,771 780,637
- - - 156,939
- - - -
- - - 156,939
- - - -
2,067,353 22,519,344 - 962,779
- - 58,440,670 -
- - - -
2,067,353 22,519,344 58,440,670 962,779
2,067,353$ 22,760,586$ 60,345,441$ 1,900,355$
Capital Projects Funds
Bridge
Thoroughfare
Districts (BTD)
General
Capital
Construction
Grants and
Other Capital
Project Funds Gas Tax
109Feb. 10, 2026 Item #2 Page 147 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
ASSETS
Cash and cash equivalents
Receivables (net of allowance for uncollectible):
Accounts
Accrued interest
Due from other governments
Notes and loans
Leases
Other
Inventories
Prepaid costs
Land held for resale
Advances to other funds
Total assets
LIABILITIES
Accrued liabilities
Unearned revenues
Deposits payable
Due to other governments
Due to other funds
Advances from other funds
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Lease-related
Total deferred inflows of resources
FUND BALANCES (DEFICITS)
Nonspendable
Restricted
Assigned
Unassigned
Total fund balances (deficits)
Total liabilities, deferred inflows of resources,
and fund balances (deficits)
16,303,344$ 5,411,710$ 37,512,748$ 5,934,543$
- - - -
105,101 34,886 241,823 38,137
- - - -
- - - -
- - - -
- - - 74,536
- - - -
- - - -
- - - -
- - 4,550,000 -
16,408,445$ 5,446,596$ 42,304,571$ 6,047,216$
196,439$ 36,045$ 162,661$ 2,513,423$
- - 126,447 -
- - - -
- - - -
- - - -
4,550,000 - - -
4,746,439 36,045 289,108 2,513,423
- - - -
- - - -
- - - -
- - - -
11,662,006 5,410,551 42,015,463 3,533,793
- - - -
- - - -
11,662,006 5,410,551 42,015,463 3,533,793
16,408,445$ 5,446,596$ 42,304,571$ 6,047,216$
Capital Projects Funds
Park
Development
Planned Local
Drainage
Facilities
Public
Facilities
Construction
Sales Tax/
TransNet
110Feb. 10, 2026 Item #2 Page 148 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
ASSETS
Cash and cash equivalents
Receivables (net of allowance for uncollectible):
Accounts
Accrued interest
Due from other governments
Notes and loans
Leases
Other
Inventories
Prepaid costs
Land held for resale
Advances to other funds
Total assets
LIABILITIES
Accrued liabilities
Unearned revenues
Deposits payable
Due to other governments
Due to other funds
Advances from other funds
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Lease-related
Total deferred inflows of resources
FUND BALANCES (DEFICITS)
Nonspendable
Restricted
Assigned
Unassigned
Total fund balances (deficits)
Total liabilities, deferred inflows of resources,
and fund balances (deficits)
Total
Nonmajor
Funds
16,943,935$ 15,557,649$ 225,312,551$
- - 7,304
106,673 100,291 6,228,201
- - 3,306,988
- - 27,808,201
- - 3,094,934
- - 160,932
- - 4,563
- 344,153 345,099
- - 256,380
- - 4,550,000
17,050,608$ 16,002,093$ 271,075,153$
225,222$ 512,558$ 6,685,191$
- - 1,740,784
- - 475,989
- - 1,843
- - 552,073
516,587 - 6,290,067
741,809 512,558 15,745,947
- - 10,583,800
- - 3,019,571
- - 13,603,371
- 344,153 349,662
16,308,799 - 168,052,593
- 15,145,382 73,586,052
- - (262,472)
16,308,799 15,489,535 241,725,835
17,050,608$ 16,002,093$ 271,075,153$
Capital Projects Funds
Traffic Impact
Projects
Technology
Investment
Capital
111Feb. 10, 2026 Item #2 Page 149 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Revenues,
Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2025
REVENUES
Taxes -$ -$ -$ -$
Intergovernmental 317,783 551,332 - -
Contribution from property owners 331,808 - - -
Charges for services 20,954 - 10,321 2,674,872
Use of money and property 1,021,041 208,432 184,823 658,830
Contributions - - 812,509 -
Miscellaneous 43 - 21,350 3,952
Total revenues 1,691,629$ 759,764$ 1,029,003$ 3,337,654$
EXPENDITURES
Current:
General government - - - -
Public safety - - - -
Community services 758,933 1,017,186 392,125 2,060,064
Public works - - - 1,671,852
Capital outlay - - - -
Debt service:
Principal expense - - - -
Interest and fiscal charges - - - -
Total expenditures 758,933 1,017,186 392,125 3,731,916
Excess (deficiency) of revenues
over (under) expenditures 932,696 (257,422) 636,878 (394,262)
OTHER FINANCING SOURCES (USES)
Transfers in - - - 1,500,000
Transfers out - - - -
Proceeds from sales of capital assets - 389,032 - -
Total other financing sources (uses)- 389,032 - 1,500,000
Net change in fund balances 932,696 131,610 636,878 1,105,738
Fund balances (deficit)-beginning 42,418,490 794,756 3,058,786 10,955,309
Fund balances (deficit)-ending 43,351,186$ 926,366$ 3,695,664$ 12,061,047$
Affordable
Housing
Community
Development
Block Grant Donations
Financing
Districts
Special Revenue Funds
112Feb. 10, 2026 Item #2 Page 150 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Revenues,
Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2025
REVENUES
Taxes
Intergovernmental
Contribution from property owners
Charges for services
Use of money and property
Contributions
Miscellaneous
Total revenues
EXPENDITURES
Current:
General government
Public safety
Community services
Public works
Capital outlay
Debt service:
Principal expense
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Proceeds from sales of capital assets
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficit)-beginning
Fund balances (deficit)-ending
(Continued)
-$ -$ -$ -$
- - 621,211 14,794,213
- 242,147 - -
- - - -
57,489 16,961 56,024 7,761
- - - -
- - - 3,025
57,489$ 259,108$ 677,235$ 14,804,999$
- 270,094 - -
- - 718,421 -
99,485 - - 14,905,252
- - - -
- - 11,364 -
- - - -
36,659 - - -
136,144 270,094 729,785 14,905,252
(78,655) (10,986) (52,550) (100,253)
- - - -
- (200,000) - -
- - - -
- (200,000) - -
(78,655) (210,986) (52,550) (100,253)
(183,817) 494,514 281,909 563,846
(262,472)$ 283,528$ 229,359$ 463,593$
Habitat and
Agricultural
Management
Other Special
Revenue Funds
Police Grants
and Asset
Forfeiture
Federal Rental
Assistance
Program
Special Revenue Funds
113Feb. 10, 2026 Item #2 Page 151 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Revenues,
Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2025
REVENUES
Taxes
Intergovernmental
Contribution from property owners
Charges for services
Use of money and property
Contributions
Miscellaneous
Total revenues
EXPENDITURES
Current:
General government
Public safety
Community services
Public works
Capital outlay
Debt service:
Principal expense
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Proceeds from sales of capital assets
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficit)-beginning
Fund balances (deficit)-ending
-$ -$ -$ -$
- - 4,816,199 -
- - - -
746,299 - - -
3,970 37,032 92,137 144,555
- - - -
2,846 69,641 - -
753,115$ 106,673$ 4,908,336$ 144,555$
- - - -
- 69,640 - -
578,215 - 4,912,292 -
- - - -
- - - -
- - - -
- - - -
578,215 69,640 4,912,292 -
174,900 37,033 (3,956) 144,555
- - - -
- - - -
- - - -
- - - -
174,900 37,033 (3,956) 144,555
124,662 115 7,558 2,082,404
299,562$ 37,148$ 3,602$ 2,226,959$
Assessment
and Other
Districts
Tyler Court
Apartments
Opioid
Settlements
Housing and
Homeless
Grants
Special Revenue Funds
Capital
Projects Funds
114Feb. 10, 2026 Item #2 Page 152 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Revenues,
Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2025
REVENUES
Taxes
Intergovernmental
Contribution from property owners
Charges for services
Use of money and property
Contributions
Miscellaneous
Total revenues
EXPENDITURES
Current:
General government
Public safety
Community services
Public works
Capital outlay
Debt service:
Principal expense
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Proceeds from sales of capital assets
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficit)-beginning
Fund balances (deficit)-ending
(Continued)
-$ 6,387,094$ -$ -$
- - - 1,736,000
- - - 534,280
- - - -
112,640 1,092,661 2,779,805 95,002
- - - -
- - 31,518 -
112,640$ 7,479,755$ 2,811,323$ 2,365,282$
- - - -
- - - -
- - - -
- - - 1,280,322
- 3,662,128 6,086,353 601,230
- - 25,644 -
- - 5,874 -
- 3,662,128 6,117,871 1,881,552
112,640 3,817,627 (3,306,548) 483,730
- - 18,579,226 -
- - - (33)
- - - -
- - 18,579,226 (33)
112,640 3,817,627 15,272,678 483,697
1,954,713 18,701,717 43,167,992 479,082
2,067,353$ 22,519,344$ 58,440,670$ 962,779$
Bridge
Thoroughfare
Districts (BTD) Gas Tax
General
Capital
Construction
Grants and
Other Capital
Project Funds
Capital Projects Funds
115Feb. 10, 2026 Item #2 Page 153 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Revenues,
Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2025
REVENUES
Taxes
Intergovernmental
Contribution from property owners
Charges for services
Use of money and property
Contributions
Miscellaneous
Total revenues
EXPENDITURES
Current:
General government
Public safety
Community services
Public works
Capital outlay
Debt service:
Principal expense
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Proceeds from sales of capital assets
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficit)-beginning
Fund balances (deficit)-ending
-$ -$ -$ -$
- - 48,553 7,272,904
1,658,736 172,505 3,200,732 -
- - - 850,605
888,078 290,060 1,980,382 276,332
- - - -
- - - -
2,546,814$ 462,565$ 5,229,667$ 8,399,841$
- - - -
- - - -
- - - -
- - - -
1,502,029 83,790 418,732 9,041,135
- - - -
- - - -
1,502,029 83,790 418,732 9,041,135
1,044,785 378,775 4,810,935 (641,294)
- - - -
- - - -
- - - -
- - - -
1,044,785 378,775 4,810,935 (641,294)
10,617,221 5,031,776 37,204,528 4,175,087
11,662,006$ 5,410,551$ 42,015,463$ 3,533,793$
Park
Development
Planned Local
Drainage
Facilities
Public
Facilities
Construction
Sales Tax/
TransNet
Capital Projects Funds
116Feb. 10, 2026 Item #2 Page 154 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Revenues,
Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2025
REVENUES
Taxes
Intergovernmental
Contribution from property owners
Charges for services
Use of money and property
Contributions
Miscellaneous
Total revenues
EXPENDITURES
Current:
General government
Public safety
Community services
Public works
Capital outlay
Debt service:
Principal expense
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Proceeds from sales of capital assets
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficit)-beginning
Fund balances (deficit)-ending
Total
Nonmajor
Funds
-$ -$ 6,387,094$
- - 30,158,195
916,503 - 7,056,711
- - 4,303,051
956,525 858,345 11,818,885
- - 812,509
- - 132,375
1,873,028$ 858,345$ 60,668,820$
- - 270,094
- - 788,061
- - 24,723,552
- - 2,952,174
875,860 4,320,520 26,603,141
- 68,618 94,262
- 3,207 45,740
875,860 4,392,345 55,477,024
997,168 (3,534,000) 5,191,796
- 4,779,226 24,858,452
- - (200,033)
- - 389,032
- 4,779,226 25,047,451
997,168 1,245,226 30,239,247
15,311,631 14,244,309 211,486,588
16,308,799$ 15,489,535$ 241,725,835$
Technology
Investment
Capital
Traffic Impact
Projects
Capital Project Funds
117Feb. 10, 2026 Item #2 Page 155 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Affordable Housing
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Contributions from property owners 247,000$ 247,000$ 331,808$ 84,808$
Intergovernmental 466,244 466,244 317,783 (148,461)
Charges for services 5,000 5,000 20,954 15,954
Use of money and property 454,860 460,363 1,021,041 560,678
Miscellaneous - - 43 43
Total revenues 1,173,104 1,178,607 1,691,629 513,022
EXPENDITURES
Current:
Community services 1,185,700 1,901,417 758,933 1,142,484
Total expenditures 1,185,700 1,901,417 758,933 1,142,484
Excess (deficiency) of revenues
over (under) expenditures (12,596) (722,810) 932,696 1,655,506
OTHER FINANCING SOURCES (USES)
Transfers out (300,000) (300,000) - 300,000
Total other financing sources (uses)(300,000) (300,000) - 300,000
Net change in fund balances (312,596)$ (1,022,810)$ 932,696 1,955,506$
Fund balances-beginning 42,418,490
Fund balances-ending 43,351,186$
118Feb. 10, 2026 Item #2 Page 156 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Community Development Block Grant
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 548,215$ 609,728$ 551,332$ (58,396)$
Use of money and property 35,000 35,000 208,432 173,432
Total revenues 583,215 644,728 759,764 115,036
EXPENDITURES
Current:
Community services 1,330,604 1,712,118 1,017,186 694,932
Total expenditures 1,330,604 1,712,118 1,017,186 694,932
Excess (deficiency) of revenues
over (under) expenditures (747,389) (1,067,390) (257,422) 809,968
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital asset - - 389,032 389,032
Total other financing sources (uses)- - 389,032 389,032
Net change in fund balances (747,389)$ (1,067,390)$ 131,610 1,199,000$
Fund balances-beginning 794,756
Fund balances-ending 926,366$
119Feb. 10, 2026 Item #2 Page 157 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Donations
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Charges for services 8,400$ 8,400$ 10,321$ 1,921$
Use of money and property 70,910 70,910 184,823 113,913
Contributions 23,200 73,200 812,509 739,309
Miscellaneous 15,000 15,000 21,350 6,350
Total revenues 117,510 167,510 1,029,003 861,493
EXPENDITURES
Current:
Community services 807,979 857,978 392,125 465,853
Total expenditures 807,979 857,978 392,125 465,853
Net change in fund balances (690,469)$ (690,468)$ 636,878 1,327,346$
Fund balances-beginning 3,058,786
Fund balances-ending 3,695,664$
120Feb. 10, 2026 Item #2 Page 158 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Financing Districts
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Charges for services 2,710,100$ 2,710,100$ 2,674,872$ (35,228)$
Use of money and property 267,830 267,830 658,830 391,000
Miscellaneous - - 3,952 3,952
Total revenues 2,977,930 2,977,930 3,337,654 359,724
EXPENDITURES
Current:
Community services 2,712,991 2,706,183 2,060,064 646,119
Public works 1,865,423 1,862,673 1,671,852 190,821
Total expenditures 4,578,414 4,568,856 3,731,916 836,940
Excess (deficiency) of revenues
over (under) expenditures (1,600,484) (1,590,926) (394,262) 1,196,664
OTHER FINANCING SOURCES (USES)
Transfers in 1,500,000 1,500,000 1,500,000 -
Total other financing sources (uses)1,500,000 1,500,000 1,500,000 -
Net change in fund balances (100,484)$ (90,926)$ 1,105,738 1,196,664$
Fund balances-beginning 10,955,309
Fund balances-ending 12,061,047$
121Feb. 10, 2026 Item #2 Page 159 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Habitat and Agricultural Management
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 26,310$ 26,310$ 57,489$ 31,179$
Total revenues 26,310 26,310 57,489 31,179
EXPENDITURES
Current:
Community services 375,669 375,669 99,485 276,184
Debt service:
Interest expense - 36,659 36,659 -
Total expenditures 375,669 412,328 136,144 276,184
Net change in fund balances (349,359)$ (386,018)$ (78,655) 307,363$
Fund balances-beginning (183,817)
Fund balances-ending (262,472)$
122Feb. 10, 2026 Item #2 Page 160 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Other Special Revenue Funds
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 10,940$ 10,940$ 16,961$ 6,021$
Contributions 275,000 275,000 242,147 (32,853)
Total revenues 285,940 285,940 259,108 (26,832)
EXPENDITURES
Current:
General government 368,884 368,884 270,094 98,790
Total expenditures 368,884 368,884 270,094 98,790
OTHER FINANCING SOURCES (USES)
Transfers out (200,000) (200,000) (200,000) -
Total other financing sources (uses)(200,000) (200,000) (200,000) -
Net change in fund balances (282,944)$ (282,944)$ (210,986) 71,958$
Fund balances-beginning 494,514
Fund balances-ending 283,528$
123Feb. 10, 2026 Item #2 Page 161 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Police Grants and Asset Forfeiture
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 814,563$ 1,088,591$ 621,211$ (467,380)$
Use of money and properties 22,960 22,960 56,024 33,064
Total revenues 837,523 1,111,551 677,235 (434,316)
EXPENDITURES
Current:
Public safety 692,383 1,111,069 718,421 392,648
Capital outlay 120,348 11,655 11,364 291
Total expenditures 812,731 1,122,724 729,785 392,939
Net change in fund balances 24,792$ (11,173)$ (52,550) (41,377)$
Fund balances-beginning 281,909
Fund balances-ending 229,359$
124Feb. 10, 2026 Item #2 Page 162 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Federal Rental Assistance Program
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 12,921,200$ 14,773,670$ 14,794,213$ 20,543$
Use of money and property 3,700 3,700 7,761 4,061
Miscellaneous 3,000 3,000 3,025 25
Total revenues 12,927,900 14,780,370 14,804,999 24,629
EXPENDITURES
Current:
Community services 13,326,022 15,224,702 14,905,252 319,450
Total expenditures 13,326,022 15,224,702 14,905,252 319,450
OTHER FINANCING SOURCES (USES)
Transfers in 300,000 300,000 - (300,000)
Total other financing sources (uses)300,000 300,000 - (300,000)
Net change in fund balances (98,122)$ (144,332)$ (100,253) 44,079$
Fund balances-beginning 563,846
Fund balances-ending 463,593$
125Feb. 10, 2026 Item #2 Page 163 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Tyler Court Apartments
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Charges for services 757,017$ 757,017$ 746,299$ (10,718)$
Use of money and property 4,932 4,932 3,970 (962)
Miscellaneous - - 2,846 2,846
Total revenues 761,949 761,949 753,115 (8,834)
EXPENDITURES
Current:
Community services 652,310 652,310 578,215 74,095
Total expenditures 652,310 652,310 578,215 74,095
Net change in fund balances 109,639$ 109,639$ 174,900 65,261$
Fund balances-beginning 124,662
Fund balances-ending 299,562$
126Feb. 10, 2026 Item #2 Page 164 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Opioid Settlements
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 8,550$ 8,550$ 37,032$ 28,482$
Miscellaneous 103,059 103,059 69,641 (33,418)
Total revenues 111,609 111,609 106,673 (4,936)
EXPENDITURES
Current:
Public safety 348,545 348,545 69,640 278,905
Total expenditures 348,545 348,545 69,640 278,905
Net change in fund balances (236,936)$ (236,936)$ 37,033 273,969$
Fund balances (deficit)-beginning 115
Fund balances (deficit)-ending 37,148$
127Feb. 10, 2026 Item #2 Page 165 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Housing and Homeless Grants
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 1,381,718$ 10,148,611$ 4,816,199$ (5,332,412)$
Use of money and property 37,190 78,609 92,137 13,528
Total revenues 1,418,908 10,227,220 4,908,336 (5,318,884)
EXPENDITURES
Current:
Community services 1,660,131 10,496,659 4,912,292 5,584,367
Total expenditures 1,660,131 10,496,659 4,912,292 5,584,367
Net change in fund balances (241,223)$ (269,439)$ (3,956) 265,483$
Fund balances (deficit)-beginning 7,558
Fund balances (deficit)-ending 3,602$
128Feb. 10, 2026 Item #2 Page 166 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Community Facilities District #1
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 862,000$ 862,000$ 1,636,371$ 774,371$
Use of money and property 179,091 179,091 6,088,680 5,909,589
Contributions from property owners 1,084,059 1,084,059 1,641,995 557,936
Total revenues 2,125,150 2,125,150 9,367,046 7,241,896
EXPENDITURES
Current:
General government 132,264 132,264 53,561 78,703
Capital outlay 44,777,852 44,777,852 1,092,112 43,685,740
Total expenditures 44,910,116 44,910,116 1,145,673 43,764,443
Net change in fund balances (42,784,966)$ (42,784,966)$ 8,221,373 51,006,339$
Fund balances-beginning 102,618,821
Fund balances-ending 110,840,194$
129Feb. 10, 2026 Item #2 Page 167 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Infrastructure Replacement Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property -$ -$ 6,350,764$ 6,350,764$
Total revenues - - 6,350,764 6,350,764
EXPENDITURES
Capital outlay 52,623,437 60,577,277 13,976,516 46,600,761
Total expenditures 52,623,437 60,577,277 13,976,516 46,600,761
Excess (deficiency) of revenues
over (under) expenditures (52,623,437) (60,577,277) (7,625,752) 52,951,525
OTHER FINANCING SOURCES (USES)
Transfers in 4,979,226 4,979,226 4,979,226 -
Total other financing sources (uses)4,979,226 4,979,226 4,979,226 -
Net change in fund balances (47,644,211)$ (55,598,051)$ (2,646,526) 52,951,525$
Fund balances-beginning 110,684,797
Fund balances-ending 108,038,271$
130Feb. 10, 2026 Item #2 Page 168 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Assessment and Other Districts
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property -$ -$ 144,555$ 144,555$
Total revenues - - 144,555 144,555
EXPENDITURES
Capital outlay 959,647 959,647 - 959,647
Total expenditures 959,647 959,647 - 959,647
Net change in fund balances (959,647)$ (959,647)$ 144,555 1,104,202$
Fund balances-beginning 2,082,404
Fund balances-ending 2,226,959$
131Feb. 10, 2026 Item #2 Page 169 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Gas Tax
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 6,122,291$ 6,122,291$ 6,387,094$ 264,803$
Use of money and property - - 1,092,661 1,092,661
Total revenues 6,122,291 6,122,291 7,479,755 1,357,464
EXPENDITURES
Capital outlay 19,526,870 19,241,708 3,662,128 15,579,580
Total expenditures 19,526,870 19,241,708 3,662,128 15,579,580
Net change in fund balances (13,404,579)$ (13,119,417)$ 3,817,627 16,937,044$
Fund balances-beginning 18,701,717
Fund balances-ending 22,519,344$
132Feb. 10, 2026 Item #2 Page 170 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
General Capital Construction
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property -$ -$ 2,779,805$ 2,779,805$
Miscellaneous - - 31,518 31,518
Total revenues - - 2,811,323 2,811,323
EXPENDITURES
Capital outlay 27,619,221 39,274,923 6,086,353 33,188,570
Debt service:
Principal expense - - 25,644 (25,644)
Interest and fiscal charges - - 5,874 (5,874)
Total expenditures 27,619,221 39,274,923 6,117,871 33,157,052
Excess (deficiency) of revenues
over (under) expenditures (27,619,221) (39,274,923) (3,306,548) 35,968,375
OTHER FINANCING SOURCES (USES)
Transfers in 18,579,226 18,579,226 18,579,226 -
Total other financing sources (uses)18,579,226 18,579,226 18,579,226 -
Net change in fund balances (9,039,995)$ (20,695,697)$ 15,272,678 35,968,375$
Fund balances-beginning 43,167,992
Fund balances-ending 58,440,670$
133Feb. 10, 2026 Item #2 Page 171 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Grants and Other Capital Project Funds
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 2,446,311$ 2,446,311$ 1,736,000$ (710,311)$
Contributions from property owners - - 534,280 534,280
Use of money and property 27,080 27,080 95,002 67,922
Total revenues 2,473,391 2,473,391 2,365,282 (108,109)
EXPENDITURES
Current:
Public works 57,120 1,280,322 1,280,322 -
Capital outlay 16,002,852 16,002,852 601,230 15,401,622
Total expenditures 16,059,972 17,283,174 1,881,552 15,401,622
Excess (deficiency) of revenues
over (under) expenditures (13,586,581) (14,809,783) 483,730 15,293,513
OTHER FINANCING SOURCES (USES)
Transfers out - (33) (33) -
Total other financing sources (uses)- (33) (33) -
Net change in fund balances (13,586,581)$ (14,809,816)$ 483,697 15,293,513$
Fund balances-beginning 479,082
Fund balances-ending 962,779$
134Feb. 10, 2026 Item #2 Page 172 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Park Development
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property -$ -$ 888,078$ 888,078$
Contributions from property owners 2,887,736 2,887,736 1,658,736 (1,229,000)
Total revenues 2,887,736 2,887,736 2,546,814 (340,922)
EXPENDITURES
Capital outlay 6,668,846 6,890,076 1,502,029 5,388,047
Total expenditures 6,668,846 6,890,076 1,502,029 5,388,047
Net change in fund balances (3,781,110)$ (4,002,340)$ 1,044,785 5,047,125$
Fund balances-beginning 10,617,221
Fund balances-ending 11,662,006$
135Feb. 10, 2026 Item #2 Page 173 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Planned Local Drainage Facilities
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property -$ -$ 290,060$ 290,060$
Contributions from property owners 247,488 247,488 172,505 (74,983)
Total revenues 247,488 247,488 462,565 215,077
EXPENDITURES
Capital outlay 243,630 243,630 83,790 159,840
Total expenditures 243,630 243,630 83,790 159,840
Net change in fund balances 3,858$ 3,858$ 378,775 374,917$
Fund balances-beginning 5,031,776
Fund balances-ending 5,410,551$
136Feb. 10, 2026 Item #2 Page 174 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Public Facilities Construction
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental -$ 350,000$ 48,553$ (301,447)$
Use of money and property 69,921 69,921 1,980,382 1,910,461
Contributions from property owners 1,889,870 1,889,870 3,200,732 1,310,862
Total revenues 1,959,791 2,309,791 5,229,667 2,919,876
EXPENDITURES
Capital outlay 4,726,232 4,865,959 418,732 4,447,227
Total expenditures 4,726,232 4,865,959 418,732 4,447,227
Net change in fund balances (2,766,441)$ (2,556,168)$ 4,810,935 7,367,103$
Fund balances-beginning 37,204,528
Fund balances-ending 42,015,463$
137Feb. 10, 2026 Item #2 Page 175 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Sales Tax/TransNet
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 4,927,000$ 4,927,000$ 7,272,904$ 2,345,904$
Charges for services 922,095 922,095 850,605 (71,490)
Use of money and property - - 276,332 276,332
Total revenues 5,849,095 5,849,095 8,399,841 2,550,746
EXPENDITURES
Capital outlay 33,380,641 33,980,641 9,041,135 24,939,506
Total expenditures 33,380,641 33,980,641 9,041,135 24,939,506
Net change in fund balances (27,531,546)$ (28,131,546)$ (641,294) 27,490,252$
Fund balances-beginning 4,175,087
Fund balances-ending 3,533,793$
138Feb. 10, 2026 Item #2 Page 176 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Traffic Impact Projects
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property -$ -$ 956,525$ 956,525$
Contributions from property owners 1,156,049 1,156,049 916,503 (239,546)
Total revenues 1,156,049 1,156,049 1,873,028 716,979
EXPENDITURES
Capital outlay 14,164,785 14,164,785 875,860 13,288,925
Total expenditures 14,164,785 14,164,785 875,860 13,288,925
Net change in fund balances (13,008,736)$ (13,008,736)$ 997,168 14,005,904$
Fund balances-beginning 15,311,631
Fund balances-ending 16,308,799$
139Feb. 10, 2026 Item #2 Page 177 of 226
CITY OF CARLSBAD, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual
Technology Investment Capital
For the Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property -$ -$ 858,345$ 858,345$
Total revenues - - 858,345 858,345
EXPENDITURES
Capital outlay 14,479,950 14,479,950 4,320,520 10,159,430
Debt service:
Principal expense - - 68,618 (68,618)
Interest and fiscal charges - - 3,207 (3,207)
Total expenditures 14,479,950 14,479,950 4,392,345 10,087,605
Excess (deficiency) of revenues
over (under) expenditures (14,479,950) (14,479,950) (3,534,000) 10,945,950
OTHER FINANCING SOURCES (USES)
Transfers in 4,779,226 4,779,226 4,779,226 -
Total other financing sources (uses)4,779,226 4,779,226 4,779,226 -
Net change in fund balances (9,700,724)$ (9,700,724)$ 1,245,226 10,945,950$
Fund balances-beginning 14,244,309
Fund balances-ending 15,489,535$
140Feb. 10, 2026 Item #2 Page 178 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Net Position
Non-Major Proprietary Funds
June 30, 2025
Totals
ASSETS
Current assets:
Cash and investments 10,722,215$ 7,289,973$ 18,012,188$
Receivables:
Accrued interest 59,050 46,992 106,042
Lease 64,129 - 64,129
Other 17,366 651,935 669,301
Prepaid costs 114,647 - 114,647
Inventories 187,101 - 187,101
Total current assets 11,164,508 7,988,900 19,153,408
Noncurrent:
Lease receivable 1,116,854 - 1,116,854
Capital assets, net 20,391,142 - 20,391,142
Total noncurrent assets 21,507,996 - 21,507,996
Total assets 32,672,504 7,988,900 40,661,404
DEFERRED OUTFLOWS OF RESOURCES
Pension-related - 529,856 529,856
OPEB-related - 45,520 45,520
Total deferred outflows of resources - 575,376 575,376
LIABILITIES
Current:
Accrued liabilities 594,471 338,031 932,502
Deferred Revenue 105,941 - 105,941
Unearned revenues - 313,042 313,042
Deposits payable 1,147,115 - 1,147,115
Compensated absences - 42,920 42,920
Total current liabilities 1,847,527 693,993 2,541,520
Noncurrent liabilities:
Compensated absences - 171,680 171,680
Net pension liability - 2,005,606 2,005,606
Net OPEB liability - 30 30
Total noncurrent liabilities - 2,177,316 2,177,316
Total liabilities 1,847,527 2,871,309 4,718,836
DEFERRED INFLOWS OF RESOURCES
Pension-related - 3,257 3,257
OPEB-related - 34,724 34,724
Lease-related 1,103,257 - 1,103,257
Total deferred inflows of resources 1,103,257 37,981 1,141,238
NET POSITION
Invested in capital assets 20,391,142 - 20,391,142
Unrestricted 9,330,578 5,654,986 14,985,564
Total net position 29,721,720$ 5,654,986$ 35,376,706$
Golf Course Solid Waste
141Feb. 10, 2026 Item #2 Page 179 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Revenues, Expenses and
Changes in Net Position
Non-Major Proprietary Funds
For the Year Ended June 30, 2025
OPERATING REVENUES
Golf course operations 11,720,977$ -$ 11,720,977$
Other charges for services - 2,377,047 2,377,047
Miscellaneous 24,024 588,455 612,479
Total operating revenues 11,745,001 2,965,502 14,710,503
OPERATING EXPENSES
Administration and general 23,309 5,644,282 5,667,591
Depreciation/amortization 759,088 - 759,088
Golf course operations 9,960,086 - 9,960,086
Total operating expenses 10,742,483 5,644,282 16,386,765
Operating income (loss)1,002,518 (2,678,780) (1,676,262)
NONOPERATING REVENUES (EXPENSES)
Intergovernmental - 160,129 160,129
Investment income (loss)609,188 488,510 1,097,698
Total nonoperating revenues (expenses)609,188 648,639 1,257,827
Income (loss) before transfers 1,611,706 (2,030,141) (418,435)
Transfers In - 350,000 350,000
Change in net position 1,611,706 (1,680,141) (68,435)
Net position-beginning 28,110,014 7,414,324 35,524,338
Restatement-change in accounting principle - (79,197) (79,197)
Net position-beginning, as restated 28,110,014 7,335,127 35,445,141
Net position-ending 29,721,720$ 5,654,986$ 35,376,706$
Totals Golf Course Solid Waste
142Feb. 10, 2026 Item #2 Page 180 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
Totals
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 11,864,994$ 2,250,704$ 14,115,698$
Payments to suppliers and service providers (5,349,393) - (5,349,393)
Payments to employees for salaries and benefits (4,516,990) (5,392,583) (9,909,573)
Other receipts (payments)- 588,455 588,455
Net cash provided by (used for)
operating activities 1,998,611 (2,553,424) (554,813)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers from other funds - 350,000 350,000
Taxes - 160,129 160,129
Net cash provided by (used for)
noncapital financing activities - 510,129 510,129
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets (182,928) - (182,928)
Net cash provided by (used for)
capital and related financing activities (159,620) - (159,620)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 514,746 - 514,746
Leasing activities 61,236 490,929 552,165
Net cash provided by (used for)
investing activities 575,982 490,929 1,066,911
Net increase (decrease) in
cash and cash equivalents 2,414,973 (1,552,366) 862,607
Cash and cash equivalents-beginning 8,307,242 8,842,339 17,149,581
Cash and cash equivalents-ending 10,722,215$ 7,289,973$ 18,012,188$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Operating income (loss)1,002,518$ (2,678,780)$ (1,676,262)$
Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation/amortization expense 759,088 - 759,088
(Increase) decrease in accounts receivable 86 (86,510) (86,424)
(Increase) decrease in inventories 12,906 - 12,906
(Increase) decrease in prepaid items 5,661 - 5,661
Increase (decrease) in accrued liabilities 98,445 9,783 108,228
Increase (decrease) in deposits payable 119,907 (39,833) 80,074
Increase (decrease) in compensated absences - 112,309 112,309
Increase (decrease) in net pension liability - 146,212 146,212
Increase (decrease) in net OPEB liability - (16,605) (16,605)
Total adjustments 996,093 125,356 1,121,449$
Net cash provided by (used for)
operating activities 1,998,611$ (2,553,424)$ (554,813)$
SCHEDULE OF NON-CASH NONCAPITAL, CAPITAL,
AND INVESTING ACTIVITIES
Unrealized gain/(loss) on fair value of investments 180,867$ 235,270$ 416,137$
Business-Type Activities
Golf Course Solid Waste
143Feb. 10, 2026 Item #2 Page 181 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
Total Internal
Service
Funds
ASSETS
Current assets:
Cash and cash equivalents 28,293,244$ 12,408,535$ 11,114,900$ 35,872,294$ 87,688,973$
Receivables:
Accrued interest 182,390 79,639 71,591 231,248 564,868
Prepaid costs 33,887 1,440,370 - - 1,474,257
Inventories 91,562 - - - 91,562
Total current assets 28,601,083 13,928,544 11,186,491 36,103,542 89,819,660
Noncurrent:
Capital assets, net 19,246,668 17,640,386 - - 36,887,054
Total assets 47,847,751 31,568,930 11,186,491 36,103,542 126,706,714
DEFERRED OUTFLOWS OF RESOURCES
Pension-related 401,489 1,540,405 111,980 68,280 2,122,154
OPEB-related 20,797 62,108 4,437 2,055 89,397
Total deferred outflows of resources 422,286 1,602,513 116,417 70,335 2,211,551
LIABILITIES
Current liabilities:
Accrued liabilities 705,237 695,826 792,462 5,025 2,198,550
Accrued Interest - 83,473 - - 83,473
Deposits payable - - 1,000 - 1,000
Compensated absences 34,310 273,997 3,744 6,029 318,080
Subscriptions - 1,637,077 - - 1,637,077
Claims and judgments - - 5,229,451 15,901,419 21,130,870
Total current liabilities 739,547 2,690,373 6,026,657 15,912,473 25,369,050
Noncurrent liabilities:
Compensated absences 137,241 1,095,866 14,976 24,117 1,272,200
Claims and judgments - - 4,845,000 19,920,860 24,765,860
Subscriptions - 10,290,137 - - 10,290,137
Net pension liability 1,519,711 5,830,732 423,865 258,454 8,032,762
Net OPEB liability 25 84 4 2 115
Total noncurrent liabilities 1,656,977 17,216,819 5,283,845 20,203,433 44,361,074
Total liabilities 2,396,524 19,907,192 11,310,502 36,115,906 69,730,124
DEFERRED INFLOWS OF RESOURCES
Pension-related 2,468 9,470 688 420 13,046
OPEB-related 26,081 70,503 5,288 1,704 103,576
Total deferred inflows of resources 28,549 79,973 5,976 2,124 116,622
NET POSITION
Net investment in capital assets 19,246,668 5,713,172 - - 24,959,840
Unrestricted 26,598,296 7,471,106 (13,570) 55,847 34,111,679
Total net position 45,844,964$ 13,184,278$ (13,570)$ 55,847$ 59,071,519$
Fleet
Management
Information
Technology
Risk
Management
Workers
Compensation
144Feb. 10, 2026 Item #2 Page 182 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Revenues, Expenses and
Changes in Net Position
Internal Service Funds
For the Year Ended June 30, 2025
Total Internal
Service
Funds
OPERATING REVENUES
Other charges for services 9,801,456$ 19,149,027$ 7,726,310$ 6,883,620$ 43,560,413$
Miscellaneous 25,291 11,600 67,215 428,099 532,205
Total operating revenues 9,826,747 19,160,627 7,793,525 7,311,719 44,092,618
OPERATING EXPENSES
Administrative and general 2,248,069 14,393,137 584,947 263,302 17,489,455
Claims and premiums - - 7,689,936 15,782,585 23,472,521
Depreciation/amortization 3,860,624 3,699,349 - - 7,559,973
Fuel and supplies 1,752,508 - - - 1,752,508
Small equipment purchases 2,460 889,025 - - 891,485
Total operating expenses 7,863,661 18,981,511 8,274,883 16,045,887 51,165,942
Operating income (loss)1,963,086 179,116 (481,358) (8,734,168) (7,073,324)
NONOPERATING REVENUES (EXPENSES)
Interest expense - (120,713) - - (120,713)
Investment income (loss)1,444,203 585,749 421,134 1,607,724 4,058,810
Gain (loss) on disposal of capital assets 96,416 - - - 96,416
Total nonoperating revenues (expenses)1,540,619 465,036 421,134 1,607,724 4,034,513
Income (loss) before capital contributions and transfers 3,503,705 644,152 (60,224) (7,126,444) (3,038,811)
Capital contributions 245,791 1,620,252 - - 1,866,043
Transfers in 560,000 - - 7,000,000 7,560,000
Change in net position 4,309,496 2,264,404 (60,224) (126,444) 6,387,232
Net position-beginning 41,620,246 11,560,088 96,799 196,962 53,474,095
Restatement-change in accounting principle (84,778) (640,214) (50,145) (14,671) (789,808)
Net position-beginning, restated 41,535,468 10,919,874 46,654 182,291 52,684,287
Net position-ending 45,844,964$ 13,184,278$ (13,570)$ 55,847$ 59,071,519$
Fleet
Management
Information
Technology
Risk
Management
Workers
Compensation
145Feb. 10, 2026 Item #2 Page 183 of 226
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2025
Totals
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from internal service 9,836,539$ 19,149,027$ 8,325,152$ 6,883,620$ 44,194,338$
Payments to suppliers and service providers (2,345,834) (517,656) - - (2,863,490)
Payments to employees for salaries and benefits (959,684) (13,595,544) (570,930) (253,023) (15,379,181)
Claims and premiums - - (4,017,082) (5,549,164) (9,566,246)
Other receipts (payments)- 11,600 67,215 428,099 506,914
Net cash provided by (used for)
operating activities 6,531,021 5,047,427 3,804,355 1,509,532 16,892,335
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers from other funds 560,000 - - 7,000,000 7,560,000
Net cash provided by (used for)
noncapital financing activities 560,000 - - 7,000,000 7,560,000
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets (4,832,475) (62,760) - - (4,895,235)
Principal paid on capital debt - (3,338,387) - - (3,338,387)
Interest paid on capital debt - (88,520) - - (88,520)
Proceeds from sales of assets 303,348 - - - 303,348
Net cash provided by (used for)
capital and related financing activities (4,529,127) (3,489,667) - - (8,018,794)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 1,397,796 563,616 388,227 1,520,889 3,870,528
Net cash provided by (used for)
investing activities 1,397,796 563,616 388,227 1,520,889 3,870,528
Net increase (decrease) in
cash and cash equivalents 3,959,690 2,121,376 4,192,582 10,030,421 20,304,069
Cash and cash equivalents-beginning 24,333,554 10,287,159 6,922,318 25,841,873 67,384,904
Cash and cash equivalents-ending 28,293,244$ 12,408,535$ 11,114,900$ 35,872,294$ 87,688,973$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Operating income (loss)1,963,086$ 179,116$ (481,358)$ (8,734,168)$ (7,073,324)$
Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation/amortization expense 3,860,624 3,699,349 - - 7,559,973
(Increase) decrease in accounts receivable 9,792 - - - 9,792
(Increase) decrease in inventories 153,421 - - - 153,421
(Increase) decrease in prepaid items (33,887) 371,369 - - 337,482
Increase (decrease) in accrued liabilities 377,140 (501,880) 598,842 (13,240) 460,862
Increase (decrease) in compensated absences 90,618 885,712 (16,614) 5,601 965,317
Increase (decrease) in claims and judgments - - 3,672,854 10,233,421 13,906,275
Increase (decrease) in pension and related items 110,789 425,074 30,900 18,843 585,606
Increase (decrease) in OPEB and related items (562) (11,313) (269) (925) (13,069)
Total adjustments 4,567,935 4,868,311 4,285,713 10,243,700 23,965,659$
Net cash provided by (used for)
operating activities 6,531,021$ 5,047,427$ 3,804,355$ 1,509,532$ 16,892,335$
SCHEDULE OF NON-CASH NONCAPITAL, CAPITAL,
AND INVESTING ACTIVITIES
Unrealized gain/(loss) on fair value of investments 624,217$ 266,429$ 169,028$ 646,676$ 1,706,350$
Capital assets acquired through subscription arrangements - 12,075,827 - - 12,075,827
Donated capital assets 245,791 1,620,252 - - 1,866,043
Fleet
Management
Information
Technology
Risk
Management
Workers
Compensation
146Feb. 10, 2026 Item #2 Page 184 of 226
Total
Custodial
Funds
ASSETS
Cash and cash equivalents 2,986,965$ 1,377,642$ 4,364,607$
Restricted assets:
Cash and investments 2,522,407 - 2,522,407
Receivables:
Assessments, net of allowance for uncollectible 9,022 905,480 914,502
Accrued interest 19,255 8,880 28,135
Total assets 5,537,649 2,292,002 7,829,651
LIABILITIES
Accrued liabilities - 2,292,002 2,292,002
Due to bondholders 5,537,649 - 5,537,649
Total liabilities 5,537,649 2,292,002 7,829,651
NET POSITION
Restricted for:
Individuals, organizations and other governments - - -
Total net position -$ -$ -$
Business
Improvement
Districts
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Fiduciary Net Position
Fiduciary Funds - Custodial Funds
June 30, 2025
Assessment
Districts
147Feb. 10, 2026 Item #2 Page 185 of 226
Total
Custodial
Funds
ADDITIONS
Assessment district collections 1,755,527$ 8,623,136$ 10,378,663$
Income from property and investments 254,521 33,863 288,384
Taxes 1,354,013 - 1,354,013
Miscellaneous 7,056 - 7,056
Total additions 3,371,117 8,656,999 12,028,116
DEDUCTIONS
Payments to bondholders and beneficiaries 3,364,367 8,484,347 11,848,714
Administrative expenses 6,750 172,652 179,402
Total deductions 3,371,117 8,656,999 12,028,116
Net increase (decrease) in fiduciary net position - - -
Net position-beginning - - -
Net position-ending -$ -$ -$
CITY OF CARLSBAD, CALIFORNIA
Combining Statement of Changes in Fiduciary Net Position
Fiduciary Funds - Custodial Funds
For the Year Ended June 30, 2025
Assessment
Districts
Business
Improvement
Districts
148Feb. 10, 2026 Item #2 Page 186 of 226
Statistical Section
This section of the City of Carlsbad’s Annual Comprehensive Financial Report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, and required supplementary
information says about the city’s overall financial health.
Table of Contents Page
Financial Trends 150
These schedules contain trend information to help the reader understand how the city’s financial
performance and well-being have changed over time.
Revenue Capacity 160
These schedules contain information to help the reader assess the city’s water and wastewater revenue
sources as well as the city’s most significant local revenue source, property taxes.
Debt Capacity 169
These schedules present information to help the reader assess the affordability of the city’s current levels
of outstanding debt, and the city’s ability to issue additional debt in the future.
Demographic and Economic Information 178
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the city’s financial activities take place.
Operating Information 182
These schedules contain service and infrastructure data to help the reader understand how the
information in the city’s financial report relates to the services the city provides and the activities it
performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive
Financial Reports for the relevant year.
149Feb. 10, 2026 Item #2 Page 187 of 226
Net Position by Component
Last Ten Fiscal Years
(dollars in thousands)
2015-16 2016-17 2017-18 2018-19
Governmental activities
Net investment in capital assets 788,035$ 788,078$ 793,090$ 786,965$
Restricted for:
Capital projects 176,279 183,245 182,811 194,434
Lighting and landscaping districts 5,921 6,527 7,307 8,025
Affordable housing 40,390 40,528 41,500 43,588
Habitat and agricultural mitigation management 1,758 1,805 1,640 1,524
Pension section 115 trust - - - -
Other purposes 2,948 2,818 2,800 4,329
Unrestricted 245,078 249,816 262,023 289,000
Total governmental activities net position 1,260,409$ 1,272,817$ 1,291,171$ 1,327,865$
Business-type activities
Net investment in capital assets 317,927$ 344,836$ 349,548$ 346,628$
Restricted for:
Capital projects 45,950 40,098 39,522 38,540
Utilities Reserve - - - -
Unrestricted 73,285 85,153 88,576 97,509
Total business-type activities net position 437,162$ 470,087$ 477,646$ 482,677$
Total government
Net investment in capital assets 1,105,962$ 1,132,914$ 1,142,638$ 1,133,593$
Restricted for:
Capital projects 222,229 223,343 222,333 232,974
Lighting and landscaping districts 5,921 6,527 7,307 8,025
Affordable housing 40,390 40,528 41,500 43,588
Habitat and agricultural mitigation management 1,758 1,805 1,640 1,524
Pension section 115 trust - - - -
Utilities Reserve - - - -
Other purposes 2,948 2,818 2,800 4,329
Unrestricted 318,363 334,969 350,599 386,509
Total net position 1,697,571$ 1,742,904$ 1,768,817$ 1,810,542$
Source: City of Carlsbad Annual Comprehensive Financial Reports
1 Net position for the prior year was restated in FY 2014-15, to reflect the application of GASB 68, Accounting & Financial Reporting
for Pensions.
2 Habitat and agricultural mitigation management was combined with other purposes in FY 2019-20 due to immateriality.
3 In FY 2020-21 a transfer of $47 million was made from the General Fund to the Golf Course Fund. The recorded advance from the
General Fund to the Golf Course Fund was removed as it was determined that repayment of the advance is not projected in the
near or foreseeable future.
4 Pension section 115 trust was established during FY 2023-24.
5 Utilities reserve per Council Policy 96 was reported separately in FY2023-24. As reserves are established by policy rather than
external legal restriction, the balance was realigned to unrestricted net position. This adjustment had no effect on total net position.
150Feb. 10, 2026 Item #2 Page 188 of 226
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
791,124$ 789,335$ 808,515$ 809,083$ 806,896$ 800,958$
206,067 212,636 191,967 192,629 198,176 217,552
8,967 9,225 9,635 9,897 10,955 12,061
44,885 40,988 41,413 41,801 43,112 44,113
- 2 - - - - -
- - - - 10,849 20,191
5,444 6,251 6,254 4,903 4,631 5,166
286,386 249,699 3 263,633 266,786 267,181 277,815
1,342,873$ 1,308,134$ 1,321,417$ 1,325,099$ 1,341,800$ 1,377,856$
351,153$ 361,477$ 355,487$ 352,494$ 351,799$ 357,667$
41,244 41,462 38,949 38,437 46,446 36,271
- - - - 90,179 -
94,140 149,954 3 151,766 157,191 68,648 173,007
486,537$ 552,893$ 546,202$ 548,122$ 557,072$ 566,945$
1,142,277$ 1,150,812$ 1,164,002$ 1,161,577$ 1,158,695$ 1,158,625$
247,311 254,098 230,916 231,066 244,622 253,823
8,967 9,225 9,635 9,897 10,955 12,061
44,885 40,988 41,413 41,801 43,112 44,113
- 2 - - - - -
- - - - 10,849 20,191
- - - - 90,179 -
5,444 6,251 6,254 4,903 4,631 5,166
380,526 399,653 415,399 423,977 335,829 450,822
1,829,410$ 1,861,027$ 1,867,619$ 1,873,221$ 1,898,872$ 1,944,801$
151Feb. 10, 2026 Item #2 Page 189 of 226
Changes in Net Position
Last Ten Fiscal Years
(dollars in thousands)
2015-16 2016-17 2017-18 2018-19
Expenses
Governmental activities
General government 16,147$ 18,374$ 25,192$ 1 22,234$
Public safety 50,463 55,994 62,630 1 67,968
Community services 51,191 54,212 51,897 57,978
Public works 37,464 34,317 36,875 36,897
Interest and fiscal charges on long-term debt 1 3 2 4
Total governmental activities 155,266 162,900 176,596 185,081
Business-type activities
Carlsbad Municipal Water District 39,458 45,219 51,658 51,638
Golf course 10,545 10,211 10,560 11,035
Wastewater 12,613 12,626 13,495 15,238
Solid waste 2,997 3,272 3,089 3,840
Total business-type activities 65,613 71,328 78,802 81,751
Total government 220,879$ 234,228$ 255,398$ 266,832$
Program Revenues
Governmental activities
Charges for services:
General government 296$ 327$ 816$ 1,679$
Public safety 3,980 4,647 4,805 4,784
Community services 10,711 12,154 11,588 10,755
Public works 4,152 3,952 3,768 4,574
Operating contributions and grants 11,912 12,630 13,054 17,307
Capital contributions and grants 12,042 22,789 22,993 13,842
Total governmental activities 43,093 56,499 57,024 52,941
Business-type activities
Charges for services:
Carlsbad Municipal Water District 39,854 44,817 50,095 46,431
Golf course 6,988 7,119 7,973 7,979
Wastewater 12,963 13,467 13,885 14,099
Solid waste 3,206 3,302 3,427 3,440
Operating contributions and grants 5,646 2,471 1,611 1,260
Capital contributions and grants 2,011 13,322 5,484 4,864
Total business-type activities 70,668 84,498 82,475 78,073
Total government 113,761$ 140,997$ 139,499$ 131,014$
Net (Expense)/Revenue:
Governmental activities (112,173)$ (106,401)$ (119,572)$ (132,140)$
Business-type activities 5,055 13,170 3,673 (3,678)
Total government net expense (107,118)$ (93,231)$ (115,899)$ (135,818)$
152Feb. 10, 2026 Item #2 Page 190 of 226
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
24,267$ 20,003$ 14,806$ 22,768$ 31,110$ 35,361$
75,249 80,295 81,130 99,484 114,948 117,372
60,771 57,654 58,954 76,374 80,726 86,314
41,419 35,481 39,204 54,124 64,838 50,035
2 - 14 21 41 47
201,708 193,433 194,108 252,771 291,663 289,129
51,198 56,319 53,598 54,178 62,942 67,190
10,252 10,280 11,708 12,198 10,527 10,742
16,931 9,063 17,905 20,194 19,252 20,376
4,382 5,086 4,738 5,405 5,482 5,608
82,763 80,748 87,949 91,975 98,203 103,916
284,471$ 274,181$ 282,057$ 344,746$ 389,866$ 393,045$
1,030$ 1,260$ 627$ 634$ 335$ 224$
4,711 5,020 5,899 6,505 7,335 7,760
9,324 8,080 8,671 9,423 7,101 7,270
4,142 5,662 4,247 3,505 3,269 3,025
18,437 26,459 20,382 14,060 28,298 32,657
16,802 9,565 9,922 12,967 24,235 25,961
54,446 56,046 49,748 47,094 70,573 76,897
46,332 49,668 49,194 46,102 47,638 52,438
6,637 8,108 10,424 10,967 11,411 11,721
13,849 14,027 16,282 19,616 23,720 26,418
3,563 3,387 3,684 2,245 2,262 2,478
399 3,484 183 209 11 63
6,327 7,601 858 5,189 5,238 1,540
77,107 86,275 80,625 84,328 90,280 94,658
131,553$ 142,321$ 130,373$ 131,422$ 160,853$ 171,555$
(147,262)$ (137,387)$ (144,360)$ (205,677)$ (221,090)$ (212,232)$
(5,656) 5,527 (7,324) (7,647) (7,923) (9,258)
(152,918)$ (131,860)$ (151,684)$ (213,324)$ (229,013)$ (221,490)$
(continued)
153Feb. 10, 2026 Item #2 Page 191 of 226
Changes in Net Position (CONTINUED)
Last Ten Fiscal Years
(dollars in thousands)
2015-16 2016-17 2017-18 2018-19
General Revenues and Other Changes in Net Position
Governmental activities
Taxes:
Property taxes 58,945$ 63,988$ 66,524$ 69,952$
Sales and use taxes 34,843 33,999 33,674 38,510
Transient occupancy taxes 20,943 22,267 24,233 26,320
Franchise taxes 5,632 5,475 5,812 6,100
Business license taxes 4,895 4,328 5,026 5,322
Real property transfer taxes 1,546 1,393 1,463 1,715
Use of money and property 11,910 1,975 2,551 20,695
Other general revenues 486 451 519 439
Extraordinary gain/(loss)- - - -
Special items-Golf Course debt - - - -
Transfers (1,240) (15,067) (136) (219)
Total governmental activities 137,960 118,809 139,666 168,834
Business type activities
Property taxes 3,306 3,569 3,743 4,002
Use of money and property 3,163 749 986 7,784
Other general revenues 39 370 3 113
Transfers 1,240 15,067 136 219
Special items-Golf Course debt - - - -
Total business-type activities 7,748 19,755 4,868 12,118
Total government 145,708$ 138,564$ 144,534$ 180,952$
Change in Net Position
Governmental activities 25,787$ 12,408$ 20,094$ 36,694$
Business-type activities 12,803 32,925 8,541 8,440
Total government 38,590$ 45,333$ 28,635$ 45,134$
Source: City of Carlsbad Annual Comprehensive Financial Reports
1
2
3
4 Decrease in investment income for FY 2021-22 is due to the required fair value adjustment at fiscal year end (per GASB 31).
future.
The increase in FY 2017-18 is mainly due to changes in the city's pension discount rate.
The decrease is FY 2020-21 in income from property and investments was caused by unrealized losses created by adjusting the city's
investments to fair market value at June 30, 2021 and a decrease in the average yield on the treasurer's portfolio for the year.
In FY 2020-21 a transfer of $47 million was made from the General Fund to the Golf Course Fund. The recorded advance from the
General Fund to the Golf Course Fund was removed as it was determined that repayment of the advance is not projected in the near or
foreseeable
154Feb. 10, 2026 Item #2 Page 192 of 226
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
73,885$ 78,239$ 81,012$ 88,196$ 93,959$ 98,534$
36,491 42,579 51,175 56,187 57,855 55,868
18,898 15,584 32,403 34,280 34,040 35,510
5,864 5,774 6,371 7,834 8,067 6,837
5,414 5,705 6,619 6,357 6,446 6,230
1,247 1,786 2,179 1,367 1,347 1,582
20,239 5,036 2 (22,063) 4 10,988 35,554 43,453
559 516 1,262 4,483 863 624
- - - - - -
- (8,427) 3 - - - -
(303) (47,273) 3 (1,316) (332) (340) (350)
162,294 99,519 157,642 209,360 237,791 248,288
4,226 4,491 4,715 5,130 5,412 5,615
4,963 639 2 (7,656) 4 2,579 10,227 12,335
- - 2,258 1,526 894 831
303 47,273 3 1,316 332 340 350
- 8,427 3 - - - -
9,492 60,830 633 9,567 16,873 19,131
171,786$ 160,349$ 158,275$ 218,927$ 254,664$ 267,419$
15,032$ (37,868)$ 13,282$ 3,683$ 16,701$ 36,056$
3,836 66,357 (6,691) 1,920 8,950 9,873
18,868$ 28,489$ 6,591$ 5,603$ 25,651$ 45,929$
155Feb. 10, 2026 Item #2 Page 193 of 226
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
2015-16 2016-17 2017-18 2018-19 2019-20
General Fund
Nonspendable 55,324$ 53,751$ 51,628$ 49,608$ 49,008$
Restricted - - - - -
Committed 1,000 1,000 1,000 1,000 1,000
Assigned 42,692 38,439 43,855 33,367 30,733
Unassigned 94,404 78,191 82,570 101,701 110,122
Total General Fund 193,420$ 171,381$ 179,053$ 185,676$ 190,863$
All Other Governmental Funds
Nonspendable
Special revenue funds 4$ 1$ 1$ 1$ 1$
Capital project funds - - - - -
Restricted
Special revenue funds 51,013 51,677 53,246 57,465 59,295
Capital project funds 176,280 183,245 182,812 194,434 206,067
Assigned
Capital project funds 131,939 146,994 151,306 162,139 165,267
Unassigned
Special revenue funds - - - - (234)
Capital project funds - - - - -
Total all other governmental funds 359,236$ 381,917$ 387,365$ 414,039$ 430,396$
Source: City of Carlsbad Annual Comprehensive Financial Reports
1 In FY 2019-20, the General Fund advanced money to the Habitat Mitigation Fund, a Special Revenue fund, to be repaid to the General Fund
once funds are available.
2 In FY 2020-21 a transfer of $47 million was made from the General Fund to the Golf Course Fund. The recorded advance from the General Fund
to the Golf Course Fund was removed as it was determined that repayment of the advance is not projected in the near or foreseeable future.
3 Pension section 115 trust was established during FY 2023-24.
156Feb. 10, 2026 Item #2 Page 194 of 226
2020-21 2021-22 2022-23 2023-24 2024-25
3,446$ 2 2,211$ 1,799$ 1,448$ 1,360$
- - - 10,849 3 20,191
1,000 1,000 1,000 8,500 8,500
56,115 48,982 43,210 24,295 47,993
99,260 109,946 136,840 162,304 141,108
159,821$ 162,139$ 182,849$ 207,396$ 219,152$
1$ 3$ -$ 9$ 6$
- 157 376 50 344
56,465 57,302 56,603 58,691 61,346
212,635 191,967 192,629 198,177 217,547
166,206 164,349 158,288 168,048 181,624
1 (228) (17) (15) (184) (263)
- (885) - - -
435,079$ 412,876$ 407,881$ 424,791$ 460,604$
157Feb. 10, 2026 Item #2 Page 195 of 226
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
2015-16 2016-17 2017-18 2018-19 2019-20
Revenues:
Taxes 129,617$ 134,165$ 141,118$ 154,673$ 147,535$
Intergovernmental 11,290 11,963 11,608 14,647 15,505
Licenses and permits 2,467 3,034 2,999 2,668 2,739
Charges for services 12,913 14,309 14,145 13,221 11,525
Fines and forfeitures 854 740 679 581 760
Use of money and property 9,970 3,845 4,622 23,275 3 24,989
Contributions from property owners 8,009 13,330 12,898 10,301 6,623
Contributions 417 349 332 1,385 426
Miscellaneous 1,503 1,467 1,991 3,316 2,641
Total revenues 177,040 183,202 190,392 224,067 212,743
Expenditures:
Current:
General government 17,221 27,925 26,625 24,033 25,762
Less: Interdepartmental charges (3,471) (3,345) (3,160) (4,581) (5,052)
Public safety 52,015 57,329 58,568 77,550 4 70,997
Community services 46,298 48,930 49,039 52,951 56,931
Public works 17,465 17,349 17,220 18,380 19,995
Capital outlay 34,669 17,603 26,885 20,703 22,171
Debt service:
Principal retirement - - 10 10 11
Interest and fiscal charges 6 5 7 5 12
Total expenditures 164,203 165,796 175,194 189,051 190,827
Excess (deficiency) of revenues
over (under) expenditures 12,837 17,406 15,198 35,016 21,916
Other financing sources (uses):
Transfers in 9,970 20,849 11,513 11,881 11,183
Transfers out (12,710) (37,613) 2 (13,590) (13,600) (11,486)
Proceeds from sale of capital asset - - - - -
Proceeds from leases - - - - -
Subscription proceeds - - - - -
Total other financing sources (uses)(2,740) (16,764) (2,077) (1,719) (303)
Net change in fund balances 10,097$ 642$ 13,121$ 33,297$ 21,613$
Debt service as percentage of noncapital
expenditures1 0.00%0.00%0.01%0.01%0.01%
Source: City of Carlsbad Annual Comprehensive Financial Reports
1 Noncapital expenditures are total expenditures less capital outlay (to the extent capitalized for the Government-wide Statement
of Net Position) and expenditures for capitalized assets included within the functional expenditure categories.
2 Includes a transfer out to the Golf Course Fund in the amount of $14.8 million for the defeasance of the golf course construction bonds
during FY 2016-17.
3 Increase in investment income for FY 2018-19 is due to an increase in the average yield on the investment portfolio for the year as well as an
increase due to the required fair value adjustment done on investments at fiscal year end (per GASB 31).
4 Increase in public safety expenditures in FY 2018-19 is due to a voluntary $14.2 million additional payment to CalPERS to reduce the city's
unfunded pension liability in the safety plan.
5 Decrease in tax revenue for sales and transient occupancy taxes for FY 2020-21 is due to the effects of the COVID-19 pandemic and
resulting stay at home orders on sales and transient occupancy taxes.
6 Decrease in investment income for FY 2021-22 is due to the required fair value adjustment done on investments (per GASB 31).
158Feb. 10, 2026 Item #2 Page 196 of 226
2020-21 2021-22 2022-23 2023-24 2024-25
5 155,462$ 184,832$ 199,742$ 207,826$ 210,948$
23,653 20,933 16,724 22,238 33,535
2,399 3,233 3,710 3,041 3,445
11,615 14,959 15,163 17,827 18,260
429 346 390 871 1,207
7,018 (20,118) 6 11,066 33,061 39,508
5,850 3,200 4,915 8,556 8,699
321 381 314 57 29
1,786 1,262 3,969 416 627
208,533 209,028 255,993 293,893 316,258
22,450 22,433 23,428 22,622 22,486
(5,146) (5,315) (5,991) (6,081) (5,462)
78,731 82,225 85,829 91,700 100,471
53,267 59,491 65,514 67,805 75,251
19,991 22,056 25,337 24,241 26,066
21,390 47,015 35,578 46,999 42,224
8 3 - 341 107
17 15 22 41 47
190,708 227,923 229,717 247,668 261,190
17,825 (18,895) 26,276 46,225 55,068
9,760 25,974 13,428 21,970 29,838
(57,073) (27,189) (24,368) (33,810) (37,748)
- 200 379 2 399
- 25 - - -
- - - 319 12
(47,313) (990) (10,561) (11,519) (7,499)
(29,488)$ (19,885)$ 15,715$ 34,706$ 47,569$
0.01%0.01%0.01%0.17%0.06%
159Feb. 10, 2026 Item #2 Page 197 of 226
General Governmental Tax Revenues by Source
Last Ten Fiscal Years
(dollars in thousands)
Fiscal Year
Property
Tax *
Sales and
Use Taxes
Transient
Occupancy
Taxes
Franchise
Taxes
Business
License
Taxes
Real
Property
Transfer
Taxes Gas Tax
Total Tax
Revenue
2015-16 58,946$ 35,232$ 20,943$ 5,632$ 4,895$ 1,545$ 2,424$ 129,617$
2016-17 63,988 1 34,543 22,267 2 5,475 4,328 1,393 2,171 134,165
2017-18 66,523 34,972 24,234 3 5,812 5,026 4 1,463 3,088 5 141,118
2018-19 69,952 40,795 6 26,320 6,100 5,322 1,715 4,469 154,673
2019-20 73,889 37,585 7 18,898 7 5,864 5,414 1,247 4,638 147,535
2020-21 78,247 43,726 15,584 7 5,774 5,705 1,786 4,640 155,462
2021-22 81,012 51,175 32,403 6,371 6,619 2,179 5,073 184,832
2022-23 88,196 56,187 34,280 7,834 6,357 1,367 5,521 199,742
2023-24 93,959 57,855 34,040 8,067 6,446 1,347 6,112 207,826
2024-25 98,534 55,868 35,510 6,837 6,230 1,582 6,387 210,948
Percentage change from FY 2015-16 to FY 2024-25:
67%59%70%21%27%2%163%63%
1 The increase in property tax in FY 2016-17 reflects improvement in the housing market and new construction.
2 The increase in TOT in FY 2016-17 is due to higher room rates throughout most of the city's hotels and an increase in available rooms.
3 The increase in TOT in FY 2017-18 is due to higher room rates throughout most of the city's hotels and an opening of a new hotel.
4 The increase in Business License Taxes in FY 2017-18 is due to a significant number of delinquent payments being collected.
5 The increase in Gas Taxes in FY 2017-18 is due to new ongoing allocations received from the state's Road Maintenance and Rehabilitation Account.
6 The increase in Sales and Use Taxes in FY 2018-19 is due to overall growth and the ending of the state's sales and use tax "triple flip" in FY 2017-18.
7 The decreases in tax revenue for sales tax for FY 2019-20 and transient occupancy taxes for FY 2019-20 and FY 2020-21 is due to the effects of the COVID-19
pandemic and resulting stay at home orders on sales and transient occupancy taxes.
* Property Tax category also includes Vehicle License Fees (VLF) in lieu, surplus property tax increment and CFD No. 1 special taxes.
Source: City of Carlsbad Annual Comprehensive Financial Reports
$0
$20,000
$40,000
$60,000
$80,000
$100,000
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Total General Governmental Tax Revenues -Last Ten Fiscal Years
(in thousands)
Property Tax Sales and Use Taxes TOT Other
160Feb. 10, 2026 Item #2 Page 198 of 226
Water and Wastewater Rates
Last Ten Fiscal Years
Wastewater
Fiscal Year
Monthly Delivery
Charge
Base Price Per
Unit1
Monthly Base
Rate
2015-16 22.19 3.53 27.81
2016-17 24.11 3.84 27.81
2017-18 24.72 3.94 27.81
2018-19 24.72 3.94 27.81
2019-20 25.02 4.04 28.66
2020-21 25.52 4.13 29.52
2021-22 27.81 3.84 35.93
2022-23 28.37 3.92 43.11
2023-24 28.94 4.00 51.74
2024-25 28.94 4.00 51.74
Source: City of Carlsbad
Rates shown for Wastewater are for a single family residential customer.
1
Water
Note: Rates shown for Water are for a 5/8" meter, which is the standard household meter size.
One unit of water equals 748 gallons. The base price shown is for tier 1, which applies to the first
12 units of usage per month at a single family residence.
161Feb. 10, 2026 Item #2 Page 199 of 226
162Feb. 10, 2026 Item #2 Page 200 of 226
Assessed Value of Taxable Property
Last Ten Fiscal Years
(dollars in millions)
Fiscal
Year
Residential
Property
Commercial
Property
Industrial
Property
Exemptions
and Other
Taxable
Property1
Net
Assessed
Valuation
Change
From Prior
Year
Estimated
Property Tax
Revenue2
Total Direct
Tax Rate3
2015-16 20,431$ 3,973$ 1,909$ 612$ 26,925$ 5.63%52 0.1927%
2016-17 21,472 4,238 2,092 622 28,424 5.57 55 0.1927
2017-18 22,707 4,355 2,378 555 29,995 5.53 58 0.1927
2018-19 24,077 4,528 2,541 490 31,636 5.47 61 0.1927
2019-20 25,379 4,964 2,673 640 33,656 6.39 65 0.1927
2020-21 26,507 5,224 2,809 677 35,217 4.64 68 0.1927
2021-22 27,697 5,325 2,883 457 36,362 3.25 70 0.1927
2022-23 29,579 5,698 3,141 748 39,166 7.71 75 0.1927
2023-24 31,276 5,917 3,492 749 41,434 5.79 80 0.1927
2024-25 32,765 6,008 3,750 737 43,260 4.41 83 0.1927
1 Other property includes farm, rural, institutional, recreational, state secured property, unsecured property, personal property and fixtures.
2 Estimated property tax revenues do not include special assessments, redevelopment tax increment or community facilities district revenues.
3 The total direct tax rate is the city's proportionate share of Proposition 13 property taxes collected within the tax rate area.
Source: County of San Diego, California Auditor and Controller's Office
Notes: Information about estimated actual value of property is not available; the assessed value is based on the most recent sales value and includes
secured property only.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Taxable Assessed Property Value
Last Ten Fiscal Years
(in millions)
Residential Property Commercial Property Industrial Property
163Feb. 10, 2026 Item #2 Page 201 of 226
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(rate per $100 of assessed value)
Fiscal
Year
City of
Carlsbad
Total Direct
Rate2
Carlsbad
Unified
School
District
San Diego
County
Educational
Revenue
Augmentation
Fund
Mira Costa
Community
College
Tri City
Hospital
District
All Other
Rates
Total Prop
13 Rate3
Voter
Approved
Debt4
Total Tax
Rate5
2015-16 0.1927%0.3412%0.1576%0.1497%0.0937%0.0198%0.0453%1.0000%0.0710%1.0710%
2016-17 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0563 1.0563
2017-18 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0791 1.0791
2018-19 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0758 1.0758
2019-20 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.1015 1.1015
2020-21 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0999 1.0999
2021-22 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0961 1.0961
2022-23 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0827 1.0827
2023-24 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0681 1.0681
2024-25 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0623 1.0623
1
2 The city has no general obligation bonds; therefore the Basic Tax Rate is the same as the Total Direct Tax Rate.
3 In 1978, California voters passed Proposition 13 which limited property taxes to a total maximum rate of 1.00% based on the assessed value of
each property being taxed. This 1.00% is shared by all taxing agencies within a tax rate area.
Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions,
property is only reassessed at the time that it is sold to a new owner. At that point, the purchase price of the property becomes the new
assessed value.
4 The majority of voter approved debt is related to various school district and hospital bonds.
5 The Total Tax Rate is the 1.00% Proposition 13 rate plus the Voter Approved Debt rate.
Allocation of 1% Ad Valorem Property Taxes
Overlapping Rates for Tax Rate Area 090001
Source: County of San Diego, California Auditor and Controller's Office
The tax rate history above is for Tax Rate Area 09000, which has the highest total assessed value of the all the tax rate areas in the city. Tax Rate Area
09000 was chosen as the most representative for the city.
164Feb. 10, 2026 Item #2 Page 202 of 226
Direct and Overlapping Property Tax Rates (CONTINUED)
Last Ten Fiscal Years
(rate per $100 of assessed value)
Total Tax
Rates1
County
Tax Rate
Areas2
Carlsbad
Unified
Schools
Oceanside
Unified
Schools
San Marcos
Unified
Schools
Vista
Unified
Schools
Encinitas
Union
Schools
Mira Costa
Comm.
College
Palomar
Comm.
College
Palomar
Health
District
MWD /
SDCWA3
Total Voter
Approved
Rates4
1.0509%1 0.0000%0.0000%0.0000%0.0000%0.0394%0.0115%0.0000%0.0000%0.0000%0.0509%
1.0553 3 0.0438 - - - - 0.0115 - - - 0.0553
1.0579 35 - - - - 0.0394 0.0115 - - 0.0070 0.0579
1.0623 54 0.0438 - - - - 0.0115 - - 0.0070 0.0623
1.0638 3 - - - - 0.0394 - 0.0174 - 0.0070 0.0638
1.0660 1 - - 0.0475 - - 0.0115 - - 0.0070 0.0660
1.0681 3 0.0438 - - - - - 0.0174 - 0.0070 0.0681
1.0719 24 - - 0.0475 - - - 0.0174 - 0.0070 0.0719
1.0863 5 - - - 0.0620 - - 0.0174 - 0.0070 0.0863
1.0943 1 0.0438 - - - - 0.0115 - 0.0320 0.0070 0.0943
1.0980 1 - - 0.0475 - - 0.0115 - 0.0320 0.0070 0.0980
1.1039 11 - - 0.0475 - - - 0.0174 0.0320 0.0070 0.1039
1.1181 1 - 0.0997 - - - 0.0115 - - 0.0070 0.1181
1 The Total Tax Rate is the 1.00% Proposition 13 rate plus the Voter Approved Debt rate.
2 Tax rate areas are determined by the County of San Diego. There are currently thirteen tax rates distributed among the 143 tax rate areas of the city.
The table above shows the number of tax rate areas affected by each of the rates.
3 MWD is the Metropolitan Water District and SDCWA is the San Diego County Water Authority.
4 The majority of voter approved debt is related to various school district and hospital bonds.
Fiscal Year 2024-25 Voter Approved Debt Tax Rates for all Rate Areas
Source: County of San Diego, California Auditor and Controller's Office
165Feb. 10, 2026 Item #2 Page 203 of 226
Principal Property Taxpayers
Current Year and Nine Years Ago
Taxpayer
Taxable Assessed
Value Rank
Percentage of
Total City Net
Assessed
Value
Taxable Assessed
Value Rank
Percentage of
Total City Net
Assessed
Value
Poseidon Water Desalination Plant 475,542,947$ 1 1.10%-$ 0.00%
Legoland California, LLC 345,699,898 2 0.80 181,905,617 4 0.68
La Costa Glen Retirement Community 309,742,191 3 0.72 242,911,018 2 0.90
La Costa Resort & Spa 274,771,170 4 0.64 284,714,679 1 1.06
Ionis Pharmaceuticals 204,000,000 5 0.47
Grand Pacific Carlsbad 193,934,636 6 0.45
The Forum Shopping Center 192,474,000 7 0.44 187,906,991 3 0.70
The Shoppes at Carlsbad 191,437,529 8 0.44 108,653,019 9 0.40
Levine Investments Limited Partnership 185,031,954 9 0.43
La Costa Town Center, LLC 174,399,620 10 0.40 140,496,561 6 0.52
Park Hyatt Aviara Resort 143,850,000 5 0.53
Carlsbad Premium Outlets 122,182,356 7 0.45
Pacific View Apartments 118,117,440 8 0.44
HG Fenton Company 84,255,490 10 0.31
Total 2,547,033,945$ 5.89%1,614,993,171$ 6.00%
Net assessed valuation 43,260,182,140$ 26,924,891,169$
Source: County of San Diego, California Assessor's Office
2025 2016
166Feb. 10, 2026 Item #2 Page 204 of 226
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Year
Total Tax Levy for
Fiscal Year1 Amount2
Percentage of
Levy
Collections in
Subsequent Years Amount
Percentage of
Levy
2015-16 $63,363,527 $62,595,504 98.79%$500,962 $63,096,466 99.58%
2016-17 67,116,590 66,233,111 98.68 586,742 66,819,853 99.56
2017-18 70,221,876 69,383,391 98.81 581,314 69,964,705 99.63
2018-19 74,560,530 73,518,065 98.60 643,779 74,161,844 99.47
2019-20 78,446,259 77,076,471 98.25 1,020,371 78,096,842 99.55
2020-21 82,787,902 81,504,185 98.45 797,297 82,301,482 99.41
2021-22 86,318,392 84,678,789 98.10 762,812 85,441,601 98.98
2022-23 93,757,415 91,921,624 98.04 1,012,374 92,933,998 99.12
2023-24 99,570,834 97,794,917 98.22 918,975 98,713,892 99.14
2024-25 103,122,417 101,381,853 98.31 N/A 101,381,853 98.31
1 Includes real property transfer taxes, homeowner exemptions and Proposition 172 public safety sales taxes.
2 Total collections include secured, unsecured, homeowners' exception and supplementary amounts distributed by the county.
Collections within the
Fiscal Year of the Levy Total Collections to Date
Source: County of San Diego, California Auditor and Controller's Office
$0
$20
$40
$60
$80
$100
$120
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Property Tax Levies & Collections
Last Ten Fiscal Years
(in millions)
Total Tax Levy for Fiscal Year1 Total Collections to Date
167Feb. 10, 2026 Item #2 Page 205 of 226
168Feb. 10, 2026 Item #2 Page 206 of 226
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(dollars in thousands except per capita)
Fiscal
Year Leases
Subscription
Based
Information
Technology
Arrangements
Bonds/
Special Debt1
Installment
Purchase
Agreements Loan Payable2 Total
Percentage of
Personal
Income Per Capita
2015-16 970 - 16,058 - 17,670 34,698 0.60 307.25
2016-17 784 - - 3 - 15,901 16,685 0.28 146.71
2017-18 588 - - - 14,944 15,532 0.24 135.51
2018-19 378 - - - 16,827 17,205 0.25 149.30
2019-20 156 - - - 15,327 15,483 0.25 135.27
2020-21 - - - - 13,750 13,750 0.18 119.05
2021-22 22 - - - 12,444 12,466 0.14 107.85
2022-23 238 2,929 - - 10,792 13,959 0.14 121.86
2023-24 212 3,367 - - 14,581 18,160 0.16 158.85
2024-25 184 12,021 - - 12,606 24,811 0.20 213.21
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
Sources: MuniServices, LLC, California Department of Finance and US Census Data
Governmental Activities Business-Type Activities
1 Bond/Special Debt is net of amortized premiums.
2 The State Water Resources Control Board issued low interest loans for the Carlsbad Water Recycling Facility in 2005, 2006 and 2014. Varying amounts of
principal and interest are due annually. Payments are funded from recycled water user fees.
3 The Carlsbad Municipal Golf Course issued revenue bonds in 2006-07 for $18.5 million, which were defeased during FY 2016-17.
$307
$147 $136 $149 $135 $119 $108 $122 $159
$213
$0
$200
$400
$600
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Outstanding Debt per Capita
Last Ten Fiscal Years
(in dollars)
169Feb. 10, 2026 Item #2 Page 207 of 226
Schedule of Direct and Overlapping Bonded Debt
Current Fiscal Year
Fiscal Year 2024-25 Assessed Valuation:$43,260,182,140
Total Debt City’s Share of
Overlapping Tax and Assessment Debt:06/30/25 Debt 6/30/25
Metropolitan Water District $17,155,000 1.12%$191,450
Mira Costa Community College District 349,345,000 27.25 95,200,006
Palomar Community College District 611,941,649 2.61 15,941,080
Carlsbad Unified School District 365,232,848 98.25 358,823,012
Carlsbad Unified School District Community Facilities District No. 1 725,000 100.00 725,000
Oceanside Unified School District 315,763,782 0.003 9,473
Vista Unified School District 205,684,882 0.84 1,719,526
Encinitas Union School District 97,469,960 28.80 28,069,399
San Marcos Unified School District 490,007,547 17.04 83,502,186
San Marcos Unified School District Community Facilities District No. 4 10,020,000 32.63 3,269,626
San Marcos Unified School District Community Facilities District No. 5 8,140,000 100.00 8,140,000
San Dieguito Union High School District 392,195,000 8.43 33,069,882
San Dieguito Union High School District Community Facilities District No. 94-2 19,965,000 98.34 19,634,180
San Dieguito Union High School District Community Facilities District No. 95-2 4,970,000 8.81 438,006
Palomar Health District 381,893,263 1.59 6,083,560
Olivenhain Municipal Water District, Assessment District No. 96-1 2,820,000 23.54 663,772
City of Carlsbad Community Facilities District No. 3, I.A. No. 1 & No. 2 14,515,000 100.00 14,515,000
City of Carlsbad 1915 Act Bonds 14,355,000 100.00 14,355,000
Total Overlapping Tax and Assessment Debt $3,302,198,931 $684,350,158
Source: MuniServices, LLC/Neumo and County of San Diego, California Auditor and Controller's Office
1 Percentage of overlapping agency's assessed valuation located within boundaries of the city.
Percent
Applicable1
170Feb. 10, 2026 Item #2 Page 208 of 226
Schedule of Direct and Overlapping Bonded Debt (CONTINUED)
Current Fiscal Year
Total Debt City’s Share of
Overlapping General Fund Obligation Debt:06/30/25 Debt 6/30/25
San Diego County General Fund Obligations $351,065,000 6.13%$21,527,306
San Diego County Pension Obligation Bonds 140,370,000 6.13 8,607,488
San Diego County Superintendent of Schools General Fund Obligations 5,125,000 6.13 314,265
Mira Costa Community College District Certificates of Participation 48,020,000 27.25 13,085,930
Palomar Community College District General Fund Obligations 1,030,000 2.61 26,832
Carlsbad Unified School District General Fund Obligations 52,330,000 98.25 51,411,609
Oceanside Unified School District General Fund Obligation 38,090,000 0.00 1,143
San Marcos Unified School District General Fund Obligations 85,066,741 17.04 14,496,223
Vista Unified School District Certificates of Participation 34,360,000 0.84 287,250
San Dieguito Union High School District General Fund Obligations 12,730,000 8.43 1,073,394
Total Overlapping General Fund Obligation Debt $768,186,741 $110,831,440
Total Overlapping Debt:$4,070,385,672 $795,181,598
City of Carlsbad Direct Debt:
City of Carlsbad Governmental Activities Obligations 12,205,520$ 100.00 12,205,520$
Total City of Carlsbad Direct Debt 12,205,520$ 12,205,520$
Combined Total Debt $4,082,591,192 $807,387,118 2
Source: MuniServices, LLC and County of San Diego, California Auditor and Controller's Office
1 Percentage of overlapping agency's assessed valuation located within boundaries of the city.
2 Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds.
Ratios to FY 2024-25 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.58%
Ratios to FY 2024-25 Adjusted Assessed Valuation:
Governmental Activities Direct Debt 0.0282%
Combined Total Debt 1.87%
Percent
Applicable1
171Feb. 10, 2026 Item #2 Page 209 of 226
Direct and Overlapping Debt
Last Ten Fiscal Years
(rate per $1,000 of assessed value)
2015-16 2016-17 2017-18
Overlapping Tax and Assessment Debt:
Metropolitan Water District 0.039$ 0.030$ 0.023$
Mira Costa Community College District - - 0.918
Palomar Community College District 0.520 0.619 0.571
Carlsbad Unified School District 6.370 5.816 5.298
Carlsbad Unified School District CFD No. 1 - - 0.051
Oceanside Unified School District - - -
Vista Unified School District 0.022 0.024 0.018
Encinitas Union School District 0.515 0.551 0.506
San Marcos Unified School District 1.922 1.797 1.706
San Marcos Unified School District Facility Improvement District 0.027 0.020 0.014
San Marcos Unified School District CFD No. 4 0.232 0.199 0.132
San Marcos Unified School District CFD No. 5 0.626 0.566 0.360
San Dieguito Union High School District 0.906 1.031 1.087
San Dieguito Union HS District CFD No. 94-1 0.003 0.003 -
San Dieguito Union HS District CFD No. 94-2 0.855 0.983 0.678
San Dieguito Union HS District CFD No. 95-2 0.019 0.017 0.015
Palomar Health District 0.285 0.258 0.196
Olivenhain Municipal Water District, Assess. Dist. No. 96-1 0.102 0.091 0.079
City of Carlsbad CFD No. 3, I.A. No. 1 & No. 2 0.836 0.750 0.684
City of Carlsbad 1915 Act Bonds 1.564 1.379 1.240
Total Overlapping Tax and Assessment Debt 14.843$ 14.134$ 13.576$
Overlapping General Fund Obligation Debt:
San Diego County General Fund Obligations 0.709$ 0.648$ 0.572$
San Diego County Pension Obligation Bonds 1.497 1.347 1.168
San Diego City Superintendent of Schools General Fund Obligations 0.031 0.025 0.023
Mira Costa Community College District Certificates of Participation 0.014 0.119 0.005
Palomar Community College District General Fund Obligations 0.004 0.003 0.002
Carlsbad Unified School District General Fund Obligations 1.692 1.598 1.447
Oceanside Unified School District General Fund Obligations - - -
San Marcos Unified School District General Fund Obligations 0.376 0.378 0.459
Vista Unified School District Certificates of Participation 0.001 0.001 -
San Dieguito Union High School District General Fund Obligations 0.044 0.041 0.039
Total Overlapping General Fund Obligation Debt 4.368$ 4.160$ 3.715$
Overlapping Tax Increment Debt (Successor Agency):0.250$ 0.212$ 0.177$
Total Overlapping Debt:19.461 18.506 17.468
City of Carlsbad Direct Debt:
City of Carlsbad Governmental Activities Obligations 0.036 0.028 0.020
Total City of Carlsbad Direct Debt 0.036$ 0.028$ 0.020$
Combined Total Debt 19.497$ 18.534$ 17.488$
Source: MuniServices, LLC/Neumo and County of San Diego, California Auditor and Controller's Office
172Feb. 10, 2026 Item #2 Page 210 of 226
2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
0.017$ 0.013$ 0.009$ 0.006$ 0.006$ 0.005$ 0.004$
0.750 0.590 2.414 2.210 2.653 2.386 2.201
0.530 0.493 0.498 0.485 0.438 0.395 0.368
7.474 6.944 8.861 7.916 7.049 6.883 8.295
0.045 0.039 0.035 0.030 0.025 0.021 0.017
- - - - - - -
0.028 0.027 0.027 0.052 0.049 0.043 0.040
0.461 0.421 0.389 0.364 0.315 0.280 0.649
1.571 1.521 1.414 1.343 1.209 1.100 1.930
0.009 0.004 - - - - -
0.164 0.146 0.132 0.121 0.105 0.087 0.076
0.456 0.404 0.360 0.322 0.273 0.225 0.188
0.956 0.925 1.087 1.030 0.921 0.842 0.764
- - - - - - -
0.800 0.736 0.678 0.631 0.555 0.500 0.454
0.018 0.017 0.015 0.014 0.012 0.011 0.010
0.228 0.212 0.196 0.187 0.167 0.150 0.141
0.069 0.058 0.040 0.035 0.028 0.021 0.015
0.623 0.561 0.513 0.473 0.417 0.372 0.336
1.024 0.892 0.786 0.686 0.457 0.405 0.332
15.223$ 14.003$ 17.454$ 15.905$ 14.679$ 13.726$ 15.820$
0.510$ 0.436$ 0.379$ 0.424$ 0.367$ 0.559$ 0.498$
1.016 0.860 0.716 0.590 0.444 0.315 0.199
0.020 0.018 0.015 0.013 0.011 0.009 0.007
0.001 - - - - 0.328 0.302
0.002 0.001 0.001 0.001 0.001 0.001 0.001
1.313 1.176 1.065 1.663 1.464 1.314 1.188
- - - - - 0.000 -
0.421 0.401 0.368 0.346 0.305 0.370 0.335
- - - 0.008 0.008 0.007 0.007
0.036 0.034 0.032 0.031 0.028 0.026 0.025
3.319$ 2.926$ 2.576$ 3.076$ 2.628$ 2.929$ 2.562$
0.143$ 0.110$ 0.090$ 0.058$ 0.026$ -$ -$
18.685 17.039 20.120 19.039 17.333 16.655 18.382
0.012 0.005 - 0.001 0.081 0.086 0.282
0.012$ 0.005$ -$ 0.001$ 0.081$ 0.086$ 0.282$
18.697$ 17.044$ 20.120$ 19.040$ 17.414$ 16.741$ 18.664$
173Feb. 10, 2026 Item #2 Page 211 of 226
Legal Debt Margin Information
Last Ten Fiscal Years
(dollars in thousands)
2015-16 2016-17 2017-18 2018-19
Net assessed valuation 26,924,891$ 28,423,782$ 29,994,964$ 31,635,528$
Debt limit (25% x 15%)1,009,683 1,065,892 1,124,811 1,186,332
Less amount of debt applicable to limit:
Bonded debt 15,855 - 1 - -
Loan payable - - - -
Lease obligations 970 785 588 378
Subscription based information
technology arrangements - - - -
Total net debt applicable to limit 16,825 785 588 378
Legal debt margin 992,858$ 1,065,107$ 1,124,223$ 1,185,954$
Total net debt applicable to the limit
as a percentage of debt limit 1.67%0.07%0.05%0.03%
Source: City of Carlsbad Annual Comprehensive Financial Reports
1 The golf course bonds were defeased during FY 2016-17.
Note: Under state finance law, the city's outstanding general obligation debt should not exceed 15% (as adjusted by 25%
per the law) of total assessed property value. By law, the general obligation debt subject to the limitation may be offset by
amounts set aside for repaying general obligation bonds.
1.67%
0.07%0.05%0.03%0.01%0.00%0.00%
0.22%0.23%
0.75%
0.00%
1.00%
2.00%
3.00%
4.00%
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Percent of Debt Applicable to the Legal Debt Limit
Last Ten Fiscal Years
174Feb. 10, 2026 Item #2 Page 212 of 226
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
33,655,907$ 35,217,379$ 36,362,069$ 39,165,588$ 41,434,017$ 43,260,182$
1,262,097 1,320,652 1,363,578 1,468,710 1,553,776 1,622,257
- - - - - -
- - - - - -
156 - 22 238 212 184
- - - 2,929 3,367 12,021
156 - 22 3,167 3,579 12,205
1,261,941$ 1,320,652$ 1,363,556$ 1,465,543$ 1,550,197$ 1,610,052$
0.01%0.00%0.00%0.22%0.23%0.75%
175Feb. 10, 2026 Item #2 Page 213 of 226
Pledged-Revenue Coverage
Last Ten Fiscal Years
2015-16 2016-17 2017-18 2018-19 2019-20
Wastewater Revenue Bonds
Gross revenues 1, 5 13,723,835$ -$ -$ -$ -$
Less expenses 2, 5 7,249,798 - - - -
Net available revenue 6,474,037$ -$ -$ -$ -$
Debt service
Principal 5 905,000$ -$ -$ -$ -$
Interest 5 - - - - -
Total debt service 905,000$ -$ -$ -$ -$
Coverage 7.15 n/a n/a n/a n/a
Wastewater Loan
Gross revenues 1, 7 -$ -$ -$ -$ -$
Less expenses 2, 7 - - - - -
Net available revenue -$ -$ -$ -$ -$
Debt service
Principal -$ -$ -$ -$ -$
Interest - - - - -
Total debt service -$ -$ -$ -$ -$
Coverage n/a n/a n/a n/a n/a
Recycled Water Loans
Gross revenues 3 8,216,362$ 8,371,467$ 9,869,958$ 8,198,882$ 7,557,893$
Less expenses 4 4,679,706 4,863,054 5,559,509 6,472,817 5,926,215
Net available revenue 3,536,656$ 3,508,413$ 4,310,449$ 1,726,065$ 1,631,678$
Debt service
Principal 1,441,301$ 1,475,461$ 1,510,433$ 1,546,234$ 1,582,886$
Interest 435,182 401,021 366,049 330,248 293,596
Total debt service 1,876,483$ 1,876,482$ 1,876,482$ 1,876,482$ 1,876,482$
Coverage 1.88 1.87 2.30 0.92 0.87
Golf Course Revenue Bonds
Gross revenues 1, 6 8,196,853$ -$ -$ -$ -$
Less expenses 2, 6 6,273,320 - - - -
Net available revenue 1,923,533$ -$ -$ -$ -$
Debt service
Principal 6 405,000$ -$ -$ -$ -$
Interest 6 721,313 - - - -
Total debt service 1,126,313$ -$ -$ -$ -$
Coverage 1.71 n/a n/a n/a n/a
Source: City of Carlsbad Annual Comprehensive Financial Reports
1 Includes operating and non-operating revenues and transfers in from the General Fund.
2 Includes operating and non-operating expenses, excluding interest expense and depreciation.
5 Debt service on the wastewater revenue bonds was completed during FY 2015-16.
6 The golf course bonds were defeased during FY 2016-17.
7 Includes wastewater operating and non-operating expenses, excluding interest expense and depreciation.
3 Includes water (potable and recycled) operating and non-operating revenues and fees. In FY 2020-21 the State Water Resources Board confirmed the
pledged revenue includes potable, which was excluded in prior years.
4 Includes water (potable and recycled) operating and non-operating expenses, excluding interest expense and depreciation. In FY 2020-21 the State
Water Resources Board confirmed the pledged revenue includes potable, which was excluded in prior years.
176Feb. 10, 2026 Item #2 Page 214 of 226
2020-21 2021-22 2022-23 2023-24 2024-25
-$ -$ -$ -$ -$
- - - - -
-$ -$ -$ -$ -$
-$ -$ -$ -$ -$
- - - - -
-$ -$ -$ -$ -$
n/a n/a n/a n/a n/a
-$ -$ -$ 25,201,718$ 28,958,941$
- - - 4,990,817 15,253,386
-$ -$ -$ 20,210,901$ 13,705,555$
-$ -$ -$ 181,024$ 181,024$
- - - 112,725 112,725
-$ -$ -$ 293,749$ 293,749$
n/a n/a n/a 68.80 46.66
56,446,838$ 3,4 56,363,973$ 55,494,378$ 58,196,451$ 64,507,435$
50,079,801 3,4 53,308,298 48,058,823 54,212,771 59,452,283
6,367,037$ 3,055,675$ 7,435,555$ 3,983,680$ 5,055,152$
1,620,408$ 1,658,821$ 1,738,405$ 2,079,014$ 1,480,455$
256,074 217,661 138,077 201,007 156,861
1,876,482$ 1,876,482$ 1,876,482$ 2,280,020$ 1,637,316$
3.39 1.63 3.96 1.75 3.09
-$ -$ -$ -$ -$
- - - - -
-$ -$ -$ -$ -$
-$ -$ -$ -$ -$
- - - - -
-$ -$ -$ -$ -$
n/a n/a n/a n/a n/a
177Feb. 10, 2026 Item #2 Page 215 of 226
Demographic and Economic Statistics
Last Ten Fiscal Years
Year
Total
Population
% of S.D.
County
Population
% Change from
Previous Year
% High
School
Graduate
% Bachelor's
Degree or
Higher Median Age
2015-16 112,930 3.43%2.06%95.6%54.8%42.1
2016-17 113,725 3.43 0.70 95.8 54.2 41.9
2017-18 114,622 3.43 0.79 95.7 55.0 42.3
2018-19 115,241 3.44 0.54 95.7 58.1 42.6
2019-20 114,463 3.42 -0.68 95.0 59.5 44.4
2020-21 115,501 3.48 0.91 95.2 59.5 42.9
2021-22 115,585 3.52 0.07 97.1 60.4 41.8
2022-23 114,549 3.50 -0.90 100.0 62.6 40.5
2023-24 114,319 3.47 -0.20 97.2 67.9 43.4
2024-25 116,368 3.49 1.79 99.9 65.2 45.0
Sources: MuniServices, LLC/Avenu Insights & Analytics, U.S. Census Bureau
Population projections are from the California Department of Finance
2 Unemployment increase in FY 2019-20 is due to the COVID-19 pandemic.
Educational Attainment
1 Personal income is the estimated total aggregate income for the total population.
Unemployment rate estimates are from the California Employment Development Department, Bureau of Labor Statistics.
Household and demographic characteristics estimates are from the United States Census Data Sets Tables.
178Feb. 10, 2026 Item #2 Page 216 of 226
Average
Household
Size
Personal
Income
(millions) 1
Per Capita
Personal
Income
City
Unemployment
Rate
2.68 5,741$ 50,838$ 5.2%
2.58 6,060 53,285 4.20
2.60 6,496 56,675 3.00
2.60 6,889 59,780 2.60
2.60 6,101 53,300 13.50 2
2.38 7,751 67,111 8.11
2.39 8,910 77,085 2.40
2.50 10,299 89,912 3.50
2.57 11,486 100,474 3.60
2.50 12,606 108,330 3.80
Population projections are from the California Department of Finance
Unemployment rate estimates are from the California Employment Development Department, Bureau of Labor Statistics.
Household and demographic characteristics estimates are from the United States Census Data Sets Tables.
179Feb. 10, 2026 Item #2 Page 217 of 226
180Feb. 10, 2026 Item #2 Page 218 of 226
Principal Employers
Current Fiscal Year and Nine Years Ago
Employer Industry Employees Rank
% of Total City
Employment Employees Rank
% of Total City
Employment
ViaSat, Inc.Information Technology 3,273 1 4.2%1,901 2 2.6%
Legoland California Hospitality/Tourism 2,000 2 2.6%2,300 1 3.1%
Thermo Fisher Scientific Life Sciences 1,982 3 2.6%1,507 3 2.0%
Carlsbad Unified School District Education 1,152 4 1.5%910 5 1.2%
Ionis Pharmaceuticals Life Sciences 1,028 5 1.3%
Omni La Costa Resort & Spa Hospitality/Tourism 900 6 1.2%1,175 4 1.6%
Genmark Diagnostics Life Sciences 822 7 1.1%
City of Carlsbad Government 802 8 1.0%670 8 0.9%
Gemological Institute of America Research/Education 772 9 1.0%864 6 1.2%
Park Hyatt Aviara Hospitality/Tourism 704 10 0.9%637 10
TaylorMade Golf Company Action Sports 750 7 1.0%
OptumRx, Inc.Pharmaceutical 668 9 0.9%
Subtotal Employees 13,435 17.3%11,382 15.4%
Total Employees Citywide (estimate)77,680 74,053
Source: City of Carlsbad Business License Data
Fiscal Year 2024-25 Fiscal Year 2015-16
181Feb. 10, 2026 Item #2 Page 219 of 226
Authorized Full-Time and 3/4-Time City Government Employees by Program Area
Last Ten Fiscal Years
Program Area 2015-16 2016-17 2017-18 2018-19 2019-20
Policy and Leadership Group
City Attorney 7.00 6.00 7.00 7.00 8.00
City Clerk Services 5.00 5.00 6.00 6.00 7.00
City Council 1.00 1.00 1.00 1.00 2.00
City Manager 7.00 8.00 8.00 9.00 12.00
City Treasurer 0.75 0.75 0.75 0.75 1.00
Communications & Engagement 1 5.00 5.00 5.00 5.00 7.00
Administrative Services
Administration - - - - -
Finance 32.50 33.00 32.00 32.00 31.00
Human Resources 11.00 11.00 11.00 11.00 17.00
Information Technology 19.50 20.00 27.00 32.00 2 35.00
Innovation & Economic Development - - - - 2.00
Public Safety
Police 168.00 168.00 168.00 169.00 2 184.00
Fire 89.00 90.00 90.00 90.00 97.75
Community Services
Community Services Administration - - - - -
Community Development 44.00 44.00 44.00 58.00 3 63.00
Housing & Homeless Services 13.00 13.00 13.00 - 3 -
Library & Cultural Arts 1 50.50 50.50 50.50 50.50 52.50
Parks & Recreation 1 58.15 57.15 57.00 55.00 55.00
Public Works
Construction Management & Inspection - - - - -
Environmental Sustainability 8.50 1 9.50 1 9.70 9.60 11.05
Fleet & Facilities - - - - -
General Services 28.10 1 51.30 1 52.00 53.00 47.85 1
Public Works Administration 8.05 1 9.85 1 12.30 7.65 7.60
Transportation 57.35 1 33.00 1 32.00 35.00 44.15 1
Utilities 60.85 1 60.20 1 59.00 61.75 62.10
Limited Term Personnel (Full-Time)3.75 6.75 7.75 4.75 0.75
Total Full Time Authorized Employees 678.00 683.00 693.00 698.00 747.75
Net Increase/(decrease) over prior year 8.25 5.00 10.00 5.00 49.75
Source: City of Carlsbad Operating Budget
Notes: Table Includes both full-time and 3/4 time employees
A full-time employee is scheduled to work 2,080 hours per year (including vacation and sick-leave).
A 3/4 time employee is scheduled to work 1,560 hours per year (including vacation and sick-leave).
1 During FY 2015-16, FY 2016-17, FY 2019-20 and FY 2020-21, the Public Works division restructured divisions.
2 During FY 2018-19, Police IT was consolidated with city IT, resulting in the transfer of 5.0 FTEs.
3 During FY 2018-19, Housing & Neighborhood Services was combined with Community Development.
4 During FY 2020-21, employees were moved from City Manager and Community Development to create a new office
of Innovation & Economic Development and Community Services Administration.
5 During FY 2021-22, Housing & Homeless Services was established.
6 During FY 2022-23, all Business Systems Specialists were transferred from several separate departments to the Information Technology Department.
Separately, all employees in the Geographic Information Systems division in the Information Technology Department were transferred
to the Innovation & Economic Development Department.
7 During FY 2022-23, one 5-year Limited Term Park Planner position was added to the Parks & Recreation Department
and one 5-year Limited Term Senior Engineer position was added to the Fleet & Facilities Department.
8 During FY 2024-25, the department of Innovation and Economic Development was reorganized. Of the nine positions in the department,
one position was eliminated, six related to data and GIS were moved to the Information Technology Department.
Two positions remained in the Economic Development Department. One position was eliminated in the Information Technology Department.
182Feb. 10, 2026 Item #2 Page 220 of 226
2020-21 2021-22 2022-23 2023-24 2024-25
8.00 8.00 8.00 8.00 8.00
7.00 7.00 7.00 7.00 7.00
2.00 2.00 2.00 2.00 1.00
7.00 4 7.00 4 7.00 7.00 6.00
1.00 1.00 1.00 1.00 1.00
7.00 9.00 9.00 9.00 8.00
- 3.00 3.00 3.00 3.00
31.00 28.00 26.00 26.00 26.00
17.00 17.00 18.00 18.00 17.00
37.00 37.00 43.00 6 43.00 48.00 8
4.00 4 4.00 4 9.00 6 9.00 2.00 8
184.00 186.00 187.00 187.00 193.00
97.75 112.00 123.00 124.00 124.00
3.00 4 3.00 3.00 2.00 2.00
61.75 4 53.00 5 52.00 52.00 51.00
- 14.00 5 16.00 16.00 16.00
52.50 53.00 51.00 53.00 51.00
55.00 55.00 58.00 58.00 57.00
15.20 1 15.20 16.20 15.00 15.00
11.95 17.95 17.60 17.50 16.50
34.05 1 37.05 33.95 34.95 34.95
- - - - -
7.85 7.85 5.90 6.00 6.00
41.75 41.75 43.60 43.80 43.80
61.95 63.95 64.50 63.50 62.50
- - 2.00 7 2.00 2.00
747.75 782.75 806.75 807.75 801.75
- 35.00 24.00 1.00 (6.00)
183Feb. 10, 2026 Item #2 Page 221 of 226
Operating Indicators by Function/Program
Last Ten Fiscal Years
2015-16 2016-17 2017-18 2018-19
General Government
Number of applications processed (full and part-time)8,037 9,544 9,455 8,495
Number of external new hires (full and part-time)260 292 311 345
Number of internal promotions / transfers (full-time only)31 58 44 66
Business licenses processed 11,449 8,142 2 11,267 9,546
Number of outgoing payments processed 41,398 41,304 41,869 43,520
Public Safety
Police
Calls for service 92,061 84,858 90,760 99,562
Average priority one response (minutes)6.1 5.9 5.8 5.7
Cases 9,253 8,884 8,643 8,705
Fire
Incidents 11,455 12,183 12,520 12,833
Response time: arrivals on scene within goal standard 64%78%76%76%
Turnout time: time from request to first unit in-route within standard - - - -
Community Development
Affordable housing units completed - - - -
Financial assistance to affordable housing projects -$ 1,280,000$ -$ -$
Building permits issued 3,000 4,500 4,392 4,884
Building inspections conducted 23,000 27,000 22,671 21,527
Final inspections (residential dwelling units)200 600 289 215
Final inspections (commercial square feet)60,000 95,000 155,292 2,350,975
Code Enforcement Actions (activities)10,994 n/a 3 9,538 8,154
Community Services
Library - total material circulation 1,103,090 1,243,228 1,169,247 1,185,390
Library - patron visits 609,679 1 720,205 685,188 668,973
Cultural Arts - number of events 88 79 82 96
Arts - attendance of events 85,000 79,067 65,817 61,531
Recreation - youth sports participants 1,000 968 1,003 1,260
Recreation - adult sports participants 5,600 4,500 4,800 4,800
Recreation - enrichment class enrollees 1 19,632 17,402 12,996 17,900
Recreation - special events participants 1 19,474 12,150 11,645 9,600
Recreation - aquatics classes conducted 684 733 778 830
Trees trimmed 1,965 1,971 1,954 4,340
Public Works
Streets
Centerline road miles resurfaced with overlay or slurry seal 18.1 20.0 23.8 25.8
Carlsbad Municipal Water District
Average consumption (millions of gallons per day)12.1 13.1 14.3 13.0
Annual water deliveries (acre feet)13,578 14,616 4 16,032 14,563
Water connections 29,190 29,782 30,054 30,131
Wastewater
Sewage pumped (millions of gallons per day)6.17 5.82 6.32 6.03
Annual flow (millions of gallons)2,252 2,125 2,306 2,200
Wastewater connections 23,431 23,747 23,863 23,959
Source: City of Carlsbad
1 The decrease in patron visits is due to the temporary closures of library facilities for remodeling during FY 2015-16.
2 The decrease is due to the time involved with the implementation of a new licensing system during FY 2016-17.
3 Reporting of information is not available for FY 2016-17 due to the implementation of a new permitting system.
4 Beginning in FY 2016-17, 2,500 acre feet of contracted desalinated water is included in the water purchase totals.
5 FY 2019-20 and FY 2020-21 had decreases in some public facing programs and services due to the impacts of the COVID-19 pandemic.
6 Beginning in FY 2022-23, the Fire Department began reporting turnout time instead of response time as a performance measure.
7 FY2021-22 and FY2022-23 enrichment class enrollees was adjusted to exclude session that were not deemed enrichment in FY2023-24.
184Feb. 10, 2026 Item #2 Page 222 of 226
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
8,012 5,469 6,578 5,524 5,454 7,570
248 198 376 354 266 302
66 24 79 84 54 68
10,180 10,164 9,736 9,652 10,208 9,996
44,128 41,164 41,315 41,746 43,767 42,985
112,323 110,448 107,156 103,192 114,786 108,746
5.5 5.2 5.2 5.1 6.2 6.5
8,774 8,222 8,704 8,348 8,389 7,900
13,331 12,345 13,837 15,298 15,100 14,115
75%75%70%- 6 - -
- - - 93.7%6 93.0%93.0%
157 119 48 - 70 46
-$ 8,300,000$ 5,250,000$ 2,265,000$ -$ -$
4,464 4,645 4,562 5,633 4,186 3,908
21,209 17,044 14,664 16,693 16,971 16,286
268 309 323 365 99 285
365,644 403,397 141,285 567,745 71,213 406,503
7,360 6,443 8,065 9,732 14,278 13,422
975,024 5 536,078 5 1,033,006 1,118,282 1,320,777 1,330,538
483,233 5 20,214 5 372,671 426,470 492,600 563,323
51 5 135 5 159 202 210 181
37,913 5 9,724 5 20,844 14,758 24,635 11,461
993 5 - 5 1,428 3,763 4,059 4,268 Parks and Rec
2,400 5 - 5 1,714 890 911 979 Parks and Rec
9,641 5 3,270 5 6,637 7 8,064 7 7,935 7,603 Parks and Rec
3,705 5 300 5 8,575 8,675 7,272 7,650 Parks and Rec
770 5 715 5 1,061 754 850 678 Parks and Rec
4,678 4,500 3,025 4,179 4,803 4,491 Parks and Rec
8.3 14.9 - 24.5 17.8 36.4 Transportation
12.7 13.5 13.2 12.0 12.1 13.4
14,249 14,731 14,787 13,451 13,600 15,003
30,265 30,439 29,446 29,426 29,469 30,512
6.31 6.27 5.75 6.22 5.94 5.86
2,305 2,288 2,097 2,270 2,167 2,145
24,040 24,103 24,096 24,079 24,119 24,080
185Feb. 10, 2026 Item #2 Page 223 of 226
Capital Asset Statistics
Last Ten Fiscal Years
2015-16 2016-17 2017-18 2018-19
Community Services
Number of parks and community fields 33 33 33 33
Acres of developed parks and community fields 319 319 319 319
Acres of open space and community fields 728 728 728 787
Miles of open space trails 47 47 47 52
Number of pools 3 3 3 3
Number of community centers 4 4 5 5
Number of libraries 3 3 3 3
Number of Materials in Library Collections 563,581 491,956 477,149 473,154
Public Safety
Fire Protection
Number of stations 6 6 6 6 1
Number of fire trucks 12 12 13 14 1
Number of ambulances 6 5 5 5 1
Number of other fire vehicles 18 20 20 25 1
Police Protection
Number of patrol and other vehicles 106 106 96 119 1
Number of motorcycles 15 12 13 13 1
Public Works
Carlsbad Municipal Water District
Miles of pipeline 559 559 559 559
Wastewater
Miles of sewers 288 288 288 288
Streets
Miles of streets 348 349 349 349
Number of street lights 7,265 7,334 7,337 7,388
Number of traffic signals 177 177 178 179
Source: City of Carlsbad
1 During FY 2018-19, the number of vehicles was updated to include both active and reserve vehicles.
2 In FY 2019-20, a change in the reporting methodology was implemented to include all first responder vehicles.
3 In FY 2019-20, only active lines were counted. Prior years included abandoned and future lines.
186Feb. 10, 2026 Item #2 Page 224 of 226
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
33 33 34 34 34 34
319 322 339 339 339 339
802 817 963 963 963 963
52 67 51 52 52 52
3 3 3 3 3 3
5 5 5 5 5 5
3 3 3 3 3 3
477,042 497,407 478,825 316,962 296,940 281,313
6 6 6 7 7 7
13 2 13 15 14 14 15
6 2 6 10 12 12 10
25 2 27 27 26 27 27
119 119 134 164 179 189
15 15 15 14 14 14
535 3 535 549 554 554 554
272 265 265 273 273 273
349 349 349 349 349 349
7,520 7,527 8,838 8,841 8,874 8,863
181 181 194 198 198 198
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