HomeMy WebLinkAbout2020-01-30; Information Related to the Fiscal Year 2018-2019 Annual Financial Audit Results; Rocha, LauraTo the members of the:
COUNCIL
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Council Memorandum
Jan. 30, 2020
To: Honorable Mayor Hall and Members of the City Council
Via: Elaine Lu key, Chief Operations Officer .
{city of
Carlsbad ·
Memo ID# 2020010
From: Laura Rocha~ Deputy City Manager, Adm~1,, istr tive Services
Re: Information Related to the Fiscal Year 018-19 Annual Financial Audit Results.
This memorandum provides additional information related to Staff Report Item No. 2 -Fiscal
Year 2018-19 Annual Financial Audit Results (Staff Report) at the City Council workshop on Jan.
21, 2020.
Background
At the City Council workshop on Jan. 21, 2020, staff presented the results of the fiscal year 2018-
19 Annual Financial Audit. Additional information is presented below related to two areas: the
planned net operating loss of $300,000 in the Solid Waste Fund, and the Crossings at Carlsbad
golf course depreciable assets.
Discussion
Solid Waste Fund Planned Net Operating Loss
Both the Recycling and Trash Program Fund and Watershed Protection Program Fund are
combined in the city's financial reports into one column titled 'Solid Waste'. The Recycling and
Trash Program administers and monitors the solid waste contract and the Palomar Transfer
Station agreement. This program is also responsible for ensuring the city complies with state
mandated diversion and disposal requirements related to the management of recycling and
trash. The Watershed Protection Program ensures the city maintains compliance with state
regulations and providing leadership and stewardship of the city's resources protecting the city's
beaches, creeks and lagoons.
Although the financial report column reflects a net operating loss of approximately $300,000, the
loss was both planned and offset by non-operating revenues and transfers. Both the Watershed
Protection and Recycling and Trash funds, represented in the city's financial reports as the 'Solid
Waste' fund, began and ended fiscal year 2018-19 with a positive balance, meaning past
surpluses have accumulated over time and continue to accumulate.
Solid Waste Storm Water Total
Balance, beginning of fiscal year 6,926,208 5,888,049 12,814,257
Balance, end of fiscal year 6,670,778 6,656,562 13,327,340
Administrative Services Branch
1635 Faraday Avenue I Carlsbad, CA 92008 I 760-602-2415
Honorable Mayor Hall and Members of the City Council
Jan. 30, 2020
Page 2
In fiscal year 2018-19, staff planned to use prior years' surpluses to implement programs
designed to meet regulatory requirements. These programs included single use plastic reduction,
commercial organic recycling, outreach and education, and other waste reduction strategies.
Additionally, both funds benefitted from non-operating income from the positive use of excess
cash derived from past surpluses, grant funding, and transfers-in from the General Fund.
Investments from both segments combined to provide $550,000 in non-operating income. Staff
transferred approximately $220,000 from the General Fund to the Storm Water Fund for
maintenance performed on city assets. The operating and non-operating components of the
Solid Waste and Storm Water Funds resulted, in a net increase to the funds' net positions
equaling $513,000.
Crossings at Carlsbad Golf Course Depreciable Assets
The Golf Course has approximately $64.5 million in depreciable assets which are primarily
comprised of the initial course construction ($42.8 million), buildings such as the club house and
other structures ($20.2 million) and machinery/equipment ($1.5 million). Notably, the land is not
a depreciable asset and carries a historical value of $4.8 million.
Next Steps .
Staff will continue to monitor the city's finances following applicable regulations and best
practices, and return to City Council with results of the fiscal year 2019-20 audit after completion
of the audit.
If a Council Member would like additional information or details on the fiscal year 2018-19 audit
results, briefings can be scheduled through the City Council Executive Assistant.
cc: Scott Chadwick, City Manager
Celia Brewer, City Attorney