HomeMy WebLinkAbout1993-10-12; City Council; 12433; 1993 FY end financial resultsa tL & 4
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cc C@Y OF CARLSBAD - AGW A BILL
AB # m E FINANCIAL RESULTS FOR THE FISCAL YEAR ENDED
MTG. 10/12/93
DEPT. FIN FUND AND THE REDEVELOPMENT AGENCY CITY MGR,
RECOMMENDED ACTION:
Accept and file report.
ITEM EXPLANATION:
The financial results for the fiscal year ended June 30, 1993 for the General Fund, the Carlsbad
Municipal Water District, the Sewer fund and the Redevelopment Agency are presented in the
attached report (Exhibit A).
The books have been closed for the 1993 fiscal year and the preparation and audit of the
Comprehensive Annual Financial Statements (CAFR) is under way. Although the financial
statements are still subject to audit adjustments, they are not expected to vary materially from the
numbers presented here. We expect the audit to be completed in October and the CAFR will be
printed and distributed shortly thereafter.
The General Fund has ended the year with revenues in excess of expenditures by $2 million. This
was the result of a one-time rebate from PEW (AB 702) totaling $1.5 million and the efforts of all
of our employees to keep expenses at a minimum. The $2 million excess of revenues over
expenditures will increase the General Fund balance; however, $600,000 has been set aside for
aerospace sales tax refunds. These refunds are due as a result of a lawsuit by the aerospace
fund balance will increase by approximately $1.3 million to a total of $9.3 million as of June 30,
1993.
The Water District operations had a net loss of $900,000 for the year due in large part to effective
water conservation efforts as well as an abundant rainfall during the winter. Net working capital
in the operating fund (which is similar to an available balance) was approximately $3 million as
of June 30,1993.
Sewer operations had annual operating income of $700,000 for fiscal year 1993 with a net working
capital of approximately $4.4 million as of June 30,1993. The increase in the Sewer fund income
is attributable to increased sewer rates and a one-time decrease in the Encina plant operating costs.
The expenditures for the Redevelopment Agency's operating and debt service funds came in within
budget; although, they ended the year with expenditures $700,000 greater than revenues. The
Agency had anticipated a $246,000 deficit which grew to $500,000 with the passage of the state's
budget requiring a payment of over $250,000 from the Agency. The deficit was pushed even higher
as a result of a shortfall in estimated property taxes. The unreserved fund balance for these funds
DEPT. HD.
JUNE 30,1993 FOR THE GENERAL FUND, THE CARLSBAD CITY ATT~
MUNICIPAL WATER DISTRICT, THE SEWER ENTERPRISE
industries against the State Board of Equalization. After a few other minor changes, the available
totaled $305,000 as of June 30,1993.
Additional information regarding the financial results for all of these funds is available in the
attached report.
EXHIBITS:
1. Financial Status Report for Fiscal Year Ended June 30,1993.
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Financial Status Report
Fiscal Year Ended June 30,1993 Prepared by Finance Department
This report summarizes the financial results for the fiscal year ended June 30, 1993 for
the General fund, the Carlsbad Municipal Water District, the Sewer Enterprise fund and
the Redevelopment Agency.
The numbers presented are preliminary and are subject to audit adjustments. All
revenues and expenditures have been calculated on a budgetary basis rather than under
generally accepted accounting principles (GAAP). This is necessary in order to present
a meaningful comparison to the budget.
General Fund The General Fund began fiscal year 1992-93 with a balanced budget of $42.1 million.
The adoption of the State’s budget in late August resulted in a $1.2 million reduction of
Carlsbad’s property tax revenue. Additionally, the local economy was weaker than
anticipated which resulted in revising the annual revenues downward by another $1.4
million. This brought our revenue estimates down to $39.5 million for the fiscal year. On
December 8, 1992, the City Council adopted a revised budget which included the
elimination of forty-two positions, and reduced funding for programs which curtailed the
City’s flexibility to meet service level demands. Due to an enduring weak economy, the
budget was again informally reduced in February, 1993 by an additional $1.3 million,
resulting in a working budget of $38.2 million.
With the majority of the closing entries made for the year, it appears that we have attained
our goal of balancing revenues against expenditures. Revenues total $41.2 million and
expenditures (including encumbrances) total $39.2 million. This results in an excess of $2 million in revenues over expenditures. The revenue excess occurred due to the one time rebate from PERS (AB 702) of approximately $1.5 million plus various departmental
savings totaling $500,000.
Total General Fund revenues for 1992-93 are down $21 5,000 or 5% from those received
during 1991-92 and aptly reflect the flat economy. The three major sources of revenue
to the General fund are property taxes, sales taxes and transient occupancy taxes (TOT).
Property taxes show a decline of $900,000 or 6.9% from 1991 -92, which is a result of the
loss of a portion of this revenue to the State. After accounting for a $1.2 million loss to
the State, the real growth in property tax revenues is approximately 2% or $275,000. This
is, by Carlsbad’s trends, the lowest rate it has ever been. The slow growth rate is
attributed to the continued decline in the real estate industry during the past year and the
reassessment of commercial and industrial properties.
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Financial Status Report Page Two
Sales taxes at year end show an increase of $445,000 or 6% over 1991 -92 figures. Most
of this increase can be attributed to the Price Club which opened for business in the
second quarter of the fiscal year. There was virtually no growth in taxable sales of
existing business in 1992-93. TOT revenue has increased by $21,000 or .7% over last
year’s collections. This small increase is indicative of the flat economy, and its effect on
tourism.
Most other revenues for the General fund have also decreased from their 1991 -92 levels.
Development related revenues are down from the 1991 -92 levels by $1,935,000 or 52.7%,
and again reflect a slow economy with only traces of construction activity. The only
development related revenue which shows an increase is construction permits, up
$15,000 over 1991-92 receipts. There were 69 permits issued during 1992-93, an
increase of 44 over the prior fiscal year. Other revenues which show increases over
1991 -92 include: business licenses, up $1 60,000 due to more pro-active enforcement
activities pursued during 1992-93; ambulance fees, up $25,000 due to the increased fees
imposed as the fiscal year began; and other revenue sources, up by $1.6 million due to
the one time $1.5 million PERS rebate in 1992-93.
General Fund Balance
The General Fund available balance at June 30, 1993 totals $9.2 million, which is an
increase of approximately $1.3 million over the 1992 balance. This increase is mainly the
result of the $2 million excess of revenues over expenditures less $600,000, which was
set aside for the aerospace sales tax refunds.
Carlsbad Municipal Water District
The Water District operating fund ended the year with revenues totaling $1 0 million and
expenses of $1 0.9 million which resulted in a net loss of $900,000. This net loss occurred
mainly as a result of the District receiving less revenue from water sales than originally
expected.
Revenues for water sales were $2.1 million (21 %) less than originally estimated as a result
of water consumption falling below budget and the delayed adoption of a water rate
increase. Water consumption was less than expected due to effective water conservation
efforts as well as an abundant rainfall during the winter. The water rate increase of 14
cents per unit or 12% was expected to go into effect in July; however, it was delayed until
September which also contributed to the shortfall in the water revenue account.
Water purchases were below budget as well but only by $410,000 or 7%. This is also a
reflection of less than expected consumption. However, unlike water sales, the cost of
purchased water was higher than planned, resulting in water purchases being closer to
the budgeted figure.
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Financial Status Report Page Three
Other significant changes that occurred this year compared to fiscal year 1992 include:
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This is primarily the result of the write off of numerous late charges for which
Fines. Forfeitures and Penalties - Down $198,000
collection was deemed unlikely. This had not been done for a number of years;
thus, the results were noticeable this year.
Interest Revenue - Down $139,000
Due to decreased earnings on investments and an usually high interest allocation
in FY 92 as a result of the merger of the District with the City.
Other Revenues - UP $192.000
Similar to the City, the Water District received amounts back from PERS as a result
of AB 702. They totaled $94,000 for fiscal year 1993. In addition, the Water
District is now being reimbursed for any work performed for other funds (i.e. City
capital projects) which brought in over $40,000 of revenue in 1993.
Materials and Supplies Expenditures - Up $340,000
Due mainly to inventory adjustments at the end of the year and the write-off of the loaned meter inventory. These meters will be expensed when purchased rather
than shown as inventory. Tracking them on the accounting system was not cost
effective.
Sewer Enterprise Fund
The Sewer Enterprise Operating Fund shows year end revenues of $4.7 million and
expenditures of $4 million for an annual operating income of $700,000. Revenues for
1992-93 are up by $31 9,000 or 7.3% from those of 1991 -92. The largest revenue increase
was in charges for services, up by $596,000, which was the result of a rate increase. This
was partially offset by a reduction in other revenues, of $278,000. Other revenues were
unusually high last year due to a one-time meter flow adjustment that resulted in a refund
to the Sewer Fund.
Expenses for the fund came in just below budget by $364,000 and $2.5 million less than
fixed assets when the Calavera Treatment Plant was written off in 1991-92.
Redevelopment
The Redevelopment Agency’s operating and debt service funds received a total of
approximately $1.5 million in revenue this year which is $1 59,000 less than estimated.
The shortfall is the result of essentially no growth in property taxes due to the recession
and the reassessment of commercial and industrial properties.
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the previous year. This reduction in costs is attributable to the recognition of a loss of
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Financial Status Report Page Four
Expenditures for the Agency came in at the budgeted level of $2.2 million which, when
compared to the annual revenues, results in expenditures greater than revenues by
$700,000. The Agency had anticipated a $246,000 deficit which grew to $500,000 with
the passage of the State budget requiring a payment of over $250,000 from the Agency.
The deficit was pushed even higher as a result of the shortfall in estimated property taxes.
The largest expense for the Agency is debt expense on the outstanding tax allocation
bonds at $1 .I million. Agency operational expenses totaled $800,000 for the year which
is comparable to the previous year’s expenses.
As of June 30, 1993, the unreserved fund balance for the operating fund is down to
$5,000 while the debt service fund has an unreserved balance of $300,000.
The Low and Moderate income Housing funds received $330,000 in tax increment
revenues, and incurred $81,000 in expenses. Approximately three quarters of the
expenses were for staffing costs, while the remaining quarter of the expenditures were
for legal services and the development of the redevelopment master plan project. The
fund balance at June 30, 1993 is $2.3 million.
Exhibits
1.
2. General Fund Revenue Comparison
3.
4. Water Operations
5. Sewer Operations
6.
General Fund Graphics of Revenue Comparisons
General Fund Expenditure Status by Department
Redevelopment Agency Operations and Debt Service
0 0 EXHIBIT 1.
TAX REVENUE
FY 91-92 COMPARED TO FY 92-93
DOLLARS IN MILLIONS
14
12
10
.....................................
__.._..__..____..~._...~~.~~.~~....._
UFY 91-92 pi ..__.__..-.....--.. a
_.___....__.__.._... 6
4
2
0
- . . . . . - -
PROP.TAX SALES TAX TOT TAX
DEVELOPMENT FEE REVENUE
FY 91-92 COMPARED TO FY 92-93
DOLLARS IN THOUSANDS
t DOWN 75%
10% DOWN 11% UP7% DOWN53
.._..__._-._- _.__.__.._.....--.--.
0 0
OTHER REVENUE
FY 91-92 COMPARED TO FY 92-93
DOLLARS IN 'THOUSANDS
3000
2500
2000
1500
1000
500
0
........................................
.........................................
UFY 91-92 ;.;....:II ____.___._________..____._..__.__.....-~
___.._____.______.__.. _._-....._.
..__....._.. _._-.._..._
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EXHIBIT 3. * CITY OF CARLSBAD 0
GENERAL FUND
EXPENDITURE STATUS BY DEPARTMENT I
ADOPTED WORKING TOTAL
BUDGET BUDGET EXPENDITURES
DEPT DESCRIPTION 1992-93 1992-93 1992-93
GENERAL GOVERNMENT
1010 CITY COUNCIL 159,000 159,000 154,000
1020 CITY MANAGER 661,000 661,000 658,000
1030 CITYCLERK 29,000 29,000 21,000
1210 AllORNEY 369,000 362,000 362,000
1310 FINANCE 89 1,000 874,000 863,000
1320 TREASURER 85,000 85,000 71,000
1410 PURCHASING 371,000 366,000 330,000
1510 HUMAN RESOURCES 789,000 740,000 648,000
1610 RESEARCH &ANALYSIS 160,000 160,000 160,000
1710 INFORMATION SYSTEMS 373,000 370,000 360,000
1910 lNSURANCE/FllSK MANAGEMENT 198,000 198,OOO 177,000
1990 OTHER/NON- DEPT'L (INCL CONTGCY 3,957,000 3,147,000 3,334,000
TOTAL GENERAL GOVERNMENT 8,042,000 7,151,000 7,138,000
PUBLIC SAFETY
21xx POUCE 8,799,000 8,750,000 8,603 ,OOO
2% FIRE 6,822,000 6,798,000 6,787,000
TOTAL PUBLIC SAFETY 15,621,000 15,548,000 15,390,000
COMMUNITY DEVELOPMENT
30m COMMUNITY DEVELOPMENT ADMIN. 791,000 671 ,OOO 614,000
31m ENGINEERING 3,538,000 3,733,000 3,473,000
3% PLANNING 2 , 1 73,000 2,077,000 1,984,000
341 1 HISTORIC PRESERVATION 6,000 6,000 3,000
3610 BUILDING 836,000 709,000 785,000
TOTAL COMMUNITY DEVELOPMEN1 7,344,000 7,196,000 6,859,000
CULTURE & RECREATION 40xx LIBRARY 2,316,000 2,267,000 2,317,000
41xx PARKS & RECREATION 3,831,000 3,736,000 3,696,000
TOTAL CULTURAL ARTS 6,398,000 6,254,000 6,261,000
MAINTENANCE & UTILITIES 3,935,000 3,898,000 3,566,000
TOTAL GENERAL FUND 41,340,000 40,047,000 39,214,000
Less FY 92 encumbrances & continuing appropriations and rnisc. '93 appropriations (1,837,000) (1,837,000)
TOTAL ADJUSTED BUDGET 39,503,000 38,210,000
42xx CULTURAL ARTS 251,000 251 ,OOO 248,000
TRKEXP93.WKI
EXHIBIT 4. 0 CARLSBAD MUNICIPAL WATER DIS Tim
WATER OPERATIONS
JUNE 30,1993
REVENUES:
WATER SALES 6,388,627 7,787,667 1,399,040 21.90
INTEREST
OTHER REVENUES
TOTAL OPERATING REVENUE
EXPENSES:
SALARIESBENEFITS
INTERDEPARTMENTAL SERVICES
PURCHASED WATER
UTILITIES
OUTSIDE SERVlCES/MAINTENANCE
GENERAL OFFICE EXPENSE
MATERIALS AND SUPPLIES -
DEPRECIATION
CAPITAL OUTLAY
MISCELLANEOUS EXPENSES
TOTAL OPERATING EXPENSES
OPERATING INCOME/LOSS (935,864) (866,917) 68,947 (7.37)
Fila HWOSTAT
Emxwy 5.
CARLsBAD MuNiciPAL wATm dbrRiCT
SEWER OPERATIONS FUND
JUNE 30,1993
REVENUES:
CHARGES FOR CURRENT SERWCES
INTEREST
OTHER REVENUES
TOTAL OPERATING REVENUE
EXPENSES:
SALARIESBENEFITS 546,270 125,329 29.i
INTERDEPARTMENTAL SERVICES
UTILITIES
RENTALS AND LEASES
OUTSIDE SERVICES/MAINTENANCE
' GENERAL OFFICE EXPENSE
MATERIALS AND SUPPLIES
DEPRECIATION
ENCINA PLANT SERVICES 1,608,483 (237,487) (12.4
LOSS ON DISPOSAL OF FIXED ASSETS
MISCELIANEOUS EXPENSES
TOTAL OPERATING EXPENSES
OPERATING INCOME/LOSS
File: SEWER/MOSTANS
EXHIBTT 6. C&AD REDEVELOPMENT AGENCY 0
OPERATIONS AND DEBT SERVICE FUNDS
JUNE 30,1993
PROPERTf TAXES 1,270,690 1,322,061 51,371
INTEREST 154,276 146,061 (8,21 5) RENTS
MI SCELIANEOUS REVENUES
TOTAL REVENUE
CONTINUING APPROPWATlONS AN0
ENCUMBRANCES FROM FISCAL YEAR 91 -92
TOTAL REVENUE - BUDGETARY BASIS
SAIARIES/BENEFITS
INTERDEPARTMENTAL SERVICES
RENTALS & LEASES
OUTSIDE SERVICES/MAINTENANCE
GENERAL OFFICE MPENSE
MATERIALS AND SUPPLIES
STATE EMF PAYMENT
DEBT EXPENSE
MISCELLANEOUS EXPENSES
TOTAL MPENDINRES
EXCESS OF RWENUES OVER
unums
MPENDINRES
* Total committed includes expenditures and encumbrances.
FI~~REDMLP/MOSTANS