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HomeMy WebLinkAbout1992-09-08; City Council; 11886; Financial Results for Fiscal Year Ended June 10-1992 General Fund, CMWD, Sewer Enterprise fund and Redevelopment Agency9 2 C2 e 8 2 6 z 0 F 0 a =! 0 z 3 8 cw OF CARLSBAD - AGEWA BILL ~ DEPT. t AB # t'\,,88k TITLE- MTG. 9/8/92 JUNE 30,1992 FOR THE GENERAL FUND, THE CARLSBAD CITY A CITY MI DWT. -- RECOMMENDED ACTION: ' FINANCIAL RESULTS FOR THE FISCAL YEAR ENDED MUNICIPAL WATER DISTRICT, THE SEWER ENTERPRISE FIN FUrJD AM) THE MDEYELOPMEHT AGENCY Accept and file report ITEM EXPLANATION: This report summarizes the financial results for the fiscal year ended June 30, 1992 for the General fund, the Carlsbad Municipal Water District, the Sewer Enterprise fund and thc Redevelopment Agency. The numbers presented are preliminary and are subject to audit adjustments. All revenue$ and expenditures have been calculated on a budgetary basis rather than under generallj accepted accounting principles (GAAP). This is necessary in order to present a meaningfu comparison to the budget. Budgetary basis numbers differ from those that would bl presented under GAAP in that encumbrances and appropriations carried into the next yea are shown as expenditures of the current year rather than as reservations of fund balanc as required under GAAP. In addition, the Enterprise funds would be required to include a1 long term debt and long tern assets (property and equipment) within the fund; wherea: for budgetary purposes we do not include them. General Fund The adopted budget for the General fund was $46 million for fiscal year 1991-92. Mid-wa revenue estimate for the General fund was revised down to $42 million, which necessitate also cutting the budget back to $42 million. Although no formal action was taken on tl- budget, each department committed to a reduced spending level which was estimated to en the year balanced against the revenues. With the majority of the closing entries made for the year, it appears that we have attain€ our goal of balancing the budget. Both revenues and expenditures for fiscal year 1991-5 were approximately $42 don. The three major sources of revenue to the General fund are property taxes, sales taxes aT transient occupancy taxes (TOT). Both sales taxes and TOT have decreased fiom fiscal ye 1990-91 by approximately 7%. Property taxes have not decreased; however, we have or experienced a 6% growth rate this year compared to the 10% to 20% experienced previous years. This slow growth rate is attributed to the steep decline in the real est: industry during the past year. With no real growth in new homes and very slow turn01 of existing homes, the growth in the property tax base has slowed considerably. Most other revenues for the General fund have also decreased from their 1990-91 levi With the exception of Engineering fees. These fees are up by 133%. This increase is mos attributed to some major projects which were processed in the beginning of the ye Engineering fees are not expected to remain at the 1991-92 levels for fiscal year 1992-I through the year, it was apparent that the recession had hit Carlsbad. At that time, tb I 0 W PAGE TWO OF AGENDA BILL NO. I !I 886 In total, General fund revenues have decreased by 2% over the 1990-91 revenues. This a significant loss of revenue to the City as we had been experiencing revenue growth in t General fund of 10% to 15% per year. Carkbad Munici~al Water District The Water District completed its integration as part of the City this year and is nc completely merged with the Ciiy's Water Enterprise fund. In addition, District manageme has assumed responsibility for the Sewer Enterprise fund. The Water District Operati fund ended the year with $8.8 million in revenues and $8.9 million in expenditures for net loss of $100,000. The fund balance as of June 30,1992 was $4.4 million, of which $1 million is reserved for debt service and another million is set aside for rate stabilization ai penalty reserves. Thus, the unreserved fund balance for the Water District Operating fur was $2.3 million at the end of the year. The capital funds for the Water District include a Replacement fund and the Major Faciliti fund. The Replacement fund pays for replacement and upgrades of existing facilities. 1 revenue sources include the property taxes received by the District and depreciation transfe from the Operating fund. The Major Facilities fund accounts for the connection fees fro new development which are used to pay for the additional water facilities required as result of that development. The Replacement fund had a fund balance as of June 30, 1992 of $7.3 million. When tl appropriations for the 1992-93 fiscal year are deducted, the available balance was $751,00 The Major Facilities fund ended the year with a fund balance of $6.6 million, all of whic has been appropriated through either carry forwards from 1991-92 or new appropriatioi for 1992-93. Sewer Enterprise Fund The Sewer Operating fund had revenues of $4.4 million and expenditures of $4.2 millic leaving a fund balance as of June 30, 1992 of $2.6 million. It should be noted that pric to the 1991-92 fiscal year, all amounts collected for depreciation had been retained withj the Operating fund to help fund operations rather than being set aside to finance futui replacement needs. This has left the Sewer fund in the position of having no available cas to pay for any normal replacement of sewer lines and facilities. Depreciation charged to rl fund and used in operations amounts to over $7 million since the inception of the systen This amount will need to be made up in the future to ensure that the money is availab! to replace facilities when needed. Beginning with fiscal year 1991-92, amounts collecte in the Sewer Operahg fund for depreciation will be transferred into a separate capit; fund. This will give us a start on collecting the necessary reserves to pay for tl- replacement of existing sewer facilities. The capital fund for the sewer collects the connection fees paid by new development whic is used to fund expansion of the system. This fund had a balance as of June 30, 1992 c $9.9 million and appropriations in 1992-93 of $2.3 million leaving an available fun balance of $7.6 million. Redevelopment A~ency The Redevelopment Agency received approximately $1.6 million in tax increment this ye; which was essentially the same as collected in the prior year. Thus, we are seeing very littl growth in tax increment in the redevelopment area. Of this $1.6 million, $320,000 is se 0 W PAGE THREE OF AGENDA BILL NO. I 1,88'!Q aside to provide low and moderate income housing. The remaining amount is used to pay debt service and fund the operations of the Agency. The operating and debt service funds of the Agency had total revenues of $1.5 million (net of the housing set-aside), debt service expenditures of $1.2 million, and operating expenses of $750,000, thus operating with a $450,000 deficit for the year. This deficit is before adding in the interest owed to the City on amounts previously borrowed. As of June 30, 1992 the City had advanced the Agency $7.5 million. Of this amount, $4.3 million is actual cash advances and $3.2 million is accrued interest. Interest is currently accruing at approximately $500,000 per year. If we were to include that interesi the deficit for the agency would increase to $950,000 for the year. The City is not, however, collecting the interest but rather adding it to the balance owed The City has not had to advance any actual cash to the Agency this year as it is using tht Agency's fund balance to finance current deficits. The fund balance for these funds as o June 30, 1992, is $1 million which is net of reserves of $1.5 million. The Low and Moderate Income Housing fund (the housing set-aside) has a fund balancc as of the end of the year of $2.3 million. This money is to be spent to increase the suppl! of affordable housing to benefit the redevelopment area. There is also a fund balance o $2 million in the capital projects fund, the majority of which has been appropriated tc finance the Streetscape Phase V project. EXHIBITS: 1. 2. Tax Revenue History 3. Water Operations 4. Sewer Operations 5. 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