HomeMy WebLinkAbout1998-01-13; City Council; 14518 Exhibit 1; ENCINA FINANCING JOINT POWERS AUTHORITY FINANCIAL STATEMENTS JUNE 30, 1997a
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ENCINA FINANCING JOINT POWERS AUTHORITY
Financial Statements
Year Ended June 30,1997
(With Independent Auditors' Report Thereon)
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ENCINA FINANCING JOINT POWERS AUTHORITY
Financial Statements
Year Ended June 30,1997
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0 TABLE OF CONTENTS
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Independent Auditors' Report 1
Combined Balance Sheet - All Governmental Fund Types and Account Group e 2
Combined Statement of Revenues, Expenditures and Changes in 3
Notes to Financial Statements 5
Supplementary Information:
Fund Balances - All Governmental Fund Types
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Combining Balance Sheet - Debt Service Funds 12
e Fund Balances - Debt Service Funds 14
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Combining Statement of Revenues, Expenditures and Changes in
Combining Balance Sheet - Capital Projects Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Capital Projects Funds 17 e
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CERTIFIED PUBLIC ACCOUr
11 00 MAIN STREE
I RVI N E, CALI FORI
(71 4)
CONRAD
~SSOCIATES, A PARTNERSHIP INCLUDING PROFESS~ONAL CORPORAT~ONS L.L.R e
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Board of Directors Encina Financing Joint Powers Authority Carlsbad, California
Independent Auditors' Report e
We have audited the accompanying combined financial statements of the Encina Financing J Powers Authority (the Authority) as of and for the year ended June 30, 1997, as listed in accompanying table of contents. These combined financial statements are the responsibilit the Authority's management. Our responsibility is to express an opinion on these comb financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. TI standards require that we plan and perform the audit to obtain reasonable assurance a1 whether the financial statements are free of material misstatement. An audit includes examir on a test basis, evidence supporting the amounts and disclosures in the financial statements. audit also includes assessing the accounting principles used and significant estimates madc management, as well as evaluating the overall financial statement presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present fairly, in all mat1
respects, the financial position of the Encina Financing Joint Powers Authority as of June 1997, and the results of its operations for the year then ended in conformity with genei accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the combined financial statem taken as a whole. The supplementary information listed in the accompanying table of conten presented for purposes of additional analysis and is not a required part of the combined finan statements of the Encina Financing Joint Powers Authority. Such information has 2: subjected to the auditing procedures applied in the audit of the combined financial statem and, in our opinion, is fairly stated in all material respects in relation to the combined finan statements taken as a whole.
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e September 11, 1997
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MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
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ENCINA FINANCING JOINT POWERS AUTHORITY
Combined Balance Sheet- All Governmental Fund Types and Account Group
June 30,1997
Account
General Totals Governmental Fund Types Group
Debt Capital Long-Term (Memorandun
Service Proiects Debt onlv)
Assets
Investments held by trustee (note 2) $ 1,687,004 5,245 - 1,692,249 Interest receivable 49,767 - - 49,767 Installment sale receivable (note 3) 18,640,000 - - 18,640,000 Due fiom members - 2,489 - 2,489
Amount available in debt service funds for retirement of revenue bonds - - 1,736,771 1,736,771
Amount to be provided for retirement of revenue bonds - - 16,903,229 16,903.229
Total assets $20,376,771 7,734 18,640,000 39,024,505
Liabilities and Fund Balances
Liabilities: - 3,945 - 3,945
- 3,789 - 3,789 Accounts payable $ Due to members Revenue bonds payable (note 3) - - 18,640,000 18,640,000 Deferred revenue 18,640,000 - - 18,640,000
Total liabilities 18,640,000 7.734 18,640,000 37,287,734
Fund balances: Reserved for debt service (note 4) 1.736,77 1 - - 1,736,771
Total fund balances 1.736,77 1 - - 1,736,771
Total liabilities and fund balances $20.376,771 7,734 18,640,000 39,024.505
See accompanying notes to financial statements.
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ENCINA FINANCING JOINT POWERS AUTHORITY
Combined Statement of Revenues, Expenditures and Changes in Fund Balances -
Year Ended June 30,1997
0 All Governmental Fund Types
Total
Debt Capital (Memori Service Proiects - On1
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Revenues: Installment payments from members $ 2,922,389 - 2,922
Interest on investments 303,356 75,882 379 0 Contribution from members 2,489 2 -
Total revenues 3,225,745 78,371 3,304
Expenditures:
Debt service: - Principal 865,001 865 0 Interest 2,039,288 - 2,039 - Professional services 5,371 5 Fiscal agent fees 1 1,623 11 -
Payments to refunding bond
escrow agent 1,3 87,062 2,434,389 3,821
Total expenditures 4,291,351 2.45 1,3 83 6,742
Excess (deficiency) of revenues
over (under) expenditures (1,065,606) (2,373,O 12) (3,43 8,t
Operating transfers in 119,919 51 1,435 63 1 Operating transfers out (5 17,227) (1 14,127) (63 1
Payments to refunding bond
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Other financing sources (uses): 0
Contribution from members 9,7683 12 - 9,768 Proceeds from refunding bonds 18,279,003 - 18,279
- (28.0 10
Total other financing sources (uses) (360,635) 397,308 36
Excess (deficiency) of revenues and other financing sources over (under)
escrow agent (28,O 10,842) 0
0 expenditures and other financing uses (1,426,24 1) (1,975,704) (3,40 1 ,!
Fund balances at beginning of year 3,163,012 1,979,494 5,142.
- Residual equity transfer (3,790) (3 ,:
Fund balances at end of year $ 1,736,771 - 1,736. 0
See accompanying notes to financial statements.
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ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
Year Ended June 30,1997
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e (1) Summarv of Significant Accounting Policies
The accounting policies of the Authority conform to generally accepted accoux principles as applicable to governmental units. The following is a summary of the I significant policies:
e (a) Description of Reporting Entity
The Encina Financing Joint Powers Authority (the Authority) was createc February 1, 1989 by the Buena Sanitation District, the City of Carlsbad. Leucadia Water District, and the City of Vista. The purpose of the Authority to issue revenue bonds in order to acquire additional capacity for the Er
Water Pollution Control Facility (Facility) and to finance any other author costs. The Authority is governed by a Board of Directors which consists of director appointed by each member. Action can be taken at any meeting oj Board by the vote of any three directors. The Authority is not subject to feder; state income taxes. From time to time, the Authority will issue debt on beha those members wishing to participate in the financing.
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(b) Fund Accounting
The basic accounting and reporting entity is a "fund." A fund is defined a independent fiscal and accounting entity with a self-balancing set of accoi recording resources, related liabilities, obligations, reserves and equ segregated for the purpose of carrying out specific activities or attaining cei objectives in accordance with special regulations, restrictions, or limitations.
The accounting records of the Authority are organized on the basis of funds an account group classified for reporting purposes as follows:
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e Governmental Funds
The Debt Service Fund is used to account for the accumulation of resources and the payment of, general long-term debt, principal, interest and related cost
The Capital Proiects Fund is used to account for financial resources to be usec the acquisition or construction of major capital facilities.
Account Group
The General Long-Term Debt Account Group is used to establish accountabj for the Authority's general long-term debt. It is used to account for all long-ti
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ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(c) Measurement Focus and Basis for Accounting
Governmental fund types are accounted for on an "expendable" measurement focus. Accordingly, only current assets and current liabilities are generally included on their balance sheets, and the reported fund balance provides an indication of available, spendable resources. Operating statements for
governmental fund types report increases (revenues) and decreases (expenditures) in available spendable resources.
Governmental fund types use the modified accrual basis of accounting. Revenues are recognized when susceptible to accrual (i.e., both measurable and available). Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues that are accrued include interest income.
Governmental fund expenditures are recognized when the liability is incurred except for principal and interest on long-term debt, which is recognized when due.
(d) Budgets
The Authority does not adopt an annual budget, therefore, no budgetary comparisons are presented.
(e) Investments
Investments are stated at cost or amortized cost which approximates market value.
(f) Total Columns
Total columns on the combined statements are captioned "Totals (Memorandum Only)" to indicate that they are presented only to facilitate financial analysis.
Data in these columns do not present financial position, results of operations, or changes in fund balance in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
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ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
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0 (2) Investments Held By Trustee
Authority for Investments
The Trust Agreement by and among State Street Bank and Trust Company of Califor as Trustee, and the Authority dated February 1, 1997 authorizes the trustee to inve: U.S. Treasury Securities, US. Agency Securities, interest-bearing demand or 1 deposits, money market funds rated AAAm, AAAm-G or better by Standard & PC Corporation, commercial paper rated A-l+ by Standard and Poor's Corporation and by Moody's Investors Service with original maturities of not more than 270 days, ban acceptances rated A-1 or A-l+ by Standard & Poor's Corporation and P-1 by Moo Investors Service with maturities of not more than 360 days, certain munic
obligations, as defined in the Trust Agreement, and investment agreements approveu AMBAC Indemnity Corporation with notice to Standard and Poor's.
Classification of Investments by Credit Risk
As defined in Governmental Accounting Standards Board Statement No. 3, investmc
in securities are categorized in the following manner:
Category 1 - Investments that are insured or registered, which are held by the Autho or its agent in the Authority's name.
Category 2 - Uninsured and unregistered investments, for which the securities are 1 by the counterparty's trust department or its agent in the Authority's name.
Category 3 - Uninsured and unregistered investments, for which the securities are h by the counterparty's trust department or its agent, but not in the Authority's name.
As of June 30, 1997, the Authority had $85,659 invested in mutual funds and $1,606,: invested in a guaranteed investment contract which are not categorizable by credit r The market value equals the carrying amount.
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(3) Wastewater Revenue Bonds
In February 1997, the Authority issued Wastewater Revenue Refunding Bonds, 1' Series A to refund $3 1,195,000 of outstanding Revenue Bonds, 1989 Series A bonds v interest ranging from 4.0% to 5.5%. The net proceeds of $18,247,330 after payment $204,205 in issuance and interest costs were used to purchase government securit Those securities were deposited in an U.S. irrevocable trust with an escrow agent provide for all future debt service payments on the City of Carlsbad and the Leuca Water District's portion of the 1989 Series A Revenue Bonds. The rest of the d service payments were paid off by the Buena Sanitation District and the City of Vista.
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ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
(3) Wastewater Revenue Bonds, (Continued)
a result, the 1989 Series A Revenue Bonds are considered to be defeased and the liability for those bonds have been removed from the balance sheet.
The bonds are secured by an assignment and pledge of installment payments to be made by the members of the Authority pursuant to Installment Purchase Agreements entered into by the members and the Authority. The installment payments are secured by a pledge of the revenues from each member's wastewater system, net of a deduction for maintenance and operation costs.
The following is a table of the outstanding balance owed as of June 30, 1997.
Installment Approximate Balance Share Member
City of Carlsbad $1 1,080,000 5 9.44% Leucadia Water District 7,560,000 40.5 6%
$1 8,640,000 100.00%
Covenants within the Installment Purchase Agreements require the members to, among other things, (1) maintain insurance on the facility, and (2) establish wastewater rates which are sufficient to pay the operating costs and debt service on the bonds and which will result in net revenues equal to at least 125% of the annual installment payments due.
In addition, under the debt agreements, the Authority must maintain reserve funds equal to the lesser of the maximum annual debt service on the bonds or 10% of the original principal amount of the bonds.
Required sinking fund payments begin in 201 1. These payments have been reflected in the following debt service requirement schedule:
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ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
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e (3) Wastewater Revenue Bonds, (Continued)
Year ending June 30,
1998 $ 1,543,315 1999 1,585,897 2000 1,586,697 200 1 1,585,716 2002 1,582,328 2003-2007 7,878,365 2008-2012 7,849,128 2013-201 5 4,692,095
28,30334 1
Less amounts representing interest (9,663.54 1)
Outstanding balance $18,640,000
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The following is a summary of changes in the general long-term debt of the author it^ the year ended June 30,1997:
0 Balance at Balance
July 1, 1996 Additions Reductions June 30, 1
Wastewater Revenue Bonds $3 1,195,000 1 8,640,000 (3 1,195,000) 18,640,0(
(4) Reserves for Debt Service 0
The reserves for debt service represent resources legally restricted to the paymen general long-term debt principal and interest maturing in future years.
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SUPPLEMENTARY INFORMATION e
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ENCINA FINANCING JOINT POWERS AUTHONTY Debt Service Funds
Combining Balance Sheet
June 30,1997
Buena Sanitation District City of Carlsbad
Debt Payment Reserve Debt Payment Reserve
Assets
Investments held by trustee $- - 48,661 953,706
Interest receivable - - 122 29,654 Installment sale receivable - - 11,080,000 -
Total assets $- - 1 1,128,783 983.360
Liabilities and Fund Balances
Liabilities:
Fund balances:
Deferred revenue $- - 1 1,080,000 -
Reserved for debt service - - 48,783 983.360
Total liabilities and fund balances $- - 11,128,783 983,360
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Leucadia Water District City of Vista
Reserve Debt Payment Reserve Totals Debt Payment
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- 3 1,753 652,884 - 1,687,0( 83 19,908 - 49,761 7,560,000 - 18,640,OC
7,591,836 672,792 - 20,376,77
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- - - 18,640,OC 7,560,000 a
- 3 1,836 672,792 - 1,736,77
7,591,836 672.792 - 20,376,77 -
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ENCINA FINANCING JOINT POWERS AUTHORITY
Debt Service Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Year Ended June 30, 1997
Buena Sanitation District City of Carlsbad
Debt Payment Reserve Debt Payment Reserve
Revenues:
Installment payments
from members $ 577,149 1,106,842
Interest on investments 524 45,882 29,697
Total revenues 5 7 7,6 7 3 45,882 1,136,539
1 10,59 1
1 10,59 1
Expenditures:
Debt service:
Principal 170,838 327,662
Interest 406,6 16 779,880
Payments to rehnding bond
escrow agent 581,643 155,024
Total expenditures 577,454 581,643 1,107.542 155,024
Excess (deficiency)
of revenues over
(under) expenditures 219 (535,761) 28,997 (44,433)
Operating transfers in 10,200 55,337
Other financing sources (uses):
Operating transfers out (3,778) (8 1,868) (1 941 7) (207,291)
Contributions from members 5,420,653
Proceeds from refunding bonds 10,865,559
Payments to refunding
bond escrow agent (5,417,853) (1 0,845,872)
Total other financing
sources (uses) (978) (7 1,668) 18,270 (15 1.954)
Excess (deficiency)
of revenues and
other financing
sources over (under)
expenditures and
other financing uses (759) (607,429) 47,267 (1 96,387)
Fund balances at beginning of year 759 607,429 1,516 1,179,747
Fund balances at end of year $ 48,783 983,360
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City of Vista Leucadia Water District
Debt Payment Reserve Debt Payment Reserve Totals
e 695,284 543,114 - 2,922,385 2,428 70.333 492 43,409 303,35t
697,712 70,333 543,606 43,409 3,225,745
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205,697 160,804 865,OO 1
470,058 382,734 2,039,288
59.769 43,146 547,480 1,387,062
735.524 43,146 543,538 547,480 4,291,351 e
27,187 68 (504,071) (1,065,606 (3 7,s 12)
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5,360 49,022 119,919
(2,859) (83,765) (3,226) (1 33,023) (5 17,227
4,347,859 9,768,5 12
18,279,003
(28,010,842
7,413,444
(7.401,458) (4,345,659) *
(78,405) (1,026) (84,OO 1) (360,635 9,127
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(95 8) (588,072) (1,426,24 1 (28,685) (5 1,2 1 8)
60.52 1 724,O 10 95s 588,072 3,163,012
672,792 1.736,77 1 3 1.836
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ENCINA FINANCING JOINT POWERS AUTHORITY Capital Projects Funds
Combining Balance Sheet
June 30,1997
Buena Leucadia
District Carlsbad District Vista Totals Sanitation City of Water City of
Assets
Investments held by trustee $550 1,611 30 3,054 5,245 Due from members 2,489 - 2,489
Total assets $550 1.61 1 2,519 3,054 7,734
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Liabilities and Fund Balances
Liabilities Accounts Payable $369 709 2,5 19 348 3,945 Due to members 181 902 - 2,706 3,789
Total liabilities 550 1,611 2,5 19 3,054 7,734
Fund balances - - - - - -
Total liabilities and fund balances $550 1,611 2,519 3,054 7,734 -
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ENCINA FINANCING JOINT POWERS AUTHORITY Capital Projects Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Year Ended June 30,1997
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Buena Leucadia
District Carlsbad District Vista Total Sanitation City of Water City of
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Interest on investments $ 6,486 35,676 2,386 3 1,334 75,8E Contributions from members - - 2,489 - 2,4E
Total revenues 6,486 35,676 4,875 31,334 78,35
Professional services 1,514 1,466 92 1 1,470 537 Fiscal agent fees 2,762 3,300 2,8 15 2,746 11,62 Payments to refunding
bond escrow agent 229,528 1,127,288 115,177 962,396 2,434,3E
Total expenditures 233,804 1,132,054 118,913 966,6 12 2,45 1.3 8
Excess (deficiency) of revenues over (under) expenditures (227,3 18) (1,096,378) (1 14,038) (935,278) (2,373,Ol
Operating transfers in 84,728 207,405 84,022 135,280 51 1,43
Operating transfers out (9,282) (54,035) (2,758) (48,052) (1 14,12
e sources (uses) 75,446 153,370 81,264 87,228 397,30
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Expenditures :
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Other financing sources (uses):
Total other financing
Excess (deficiency) of revenues and other financing sources over (under) expenditures e and other financing uses (151,872) (943,008) (32,774) (848,050) (1,975,701
Fund balances at beginning of year 152,053 943,911 32,774 850,756 1,979,491
Residual equity transfer (1 8 1) (903) (2,706) (3.791
Fund balances at end of year $ - - - - -
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