HomeMy WebLinkAbout1998-01-13; City Council; 14518 Exhibit 5; CARLSBAD REDEVELOPMENT AGENCY COMPONENT UNIT FINANCIAL STATEMENTS JUNE 30, 19970
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CARLSBAD REDEVELOPMENT AGENCY
Component Unit Financial Statements
Year Ended June 30,1997
(With Independent Auditors' Report)
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CARLSBAD REDEVELOPMENT AGENCY
Component Unit Financial Statements
Year Ended June 30,1997
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TABLE OF CONTENTS
Financial Section: a
Independent Auditors' Report
Component Unit Financial Statements:
e Combined Balance Sheet - All Governmental Fund Types
and Account Groups
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Special Revenue and Debt Service Funds
Notes to Component Unit Financial Statements
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Auditors' Opinion on Compliance with Audit Guidelines for California Redevelopment Agencies
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CERTIFIED PUBLIC ACCOUI
11 00 MAIN STREE
IRVINE, CALIFOR
(714
CONRAD
%SSOCIATES, A PARTNERSHIP INCLUDING PROFESSIONAL CORPORAT~ONS L.L.F! e
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The Board of Commissioners Carlsbad Redevelopment Agency Carlsbad, California
e INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of the Carlsbad Redevelopment Agc a component unit of the City of Carlsbad, as of and for the year ended June 30, 1997, as list1 the table of contents. These component unit financial statements are the responsibility o management of the Carlsbad Redevelopment Agency. Our responsibility is to expres opinion on these component unit financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards Government Auditing Standards. Those standards require that we plan and perform the auc obtain reasonable assurance about whether the component unit financial statements are frc material misstatement. An audit includes examining, on a test basis, evidence supportinj amounts and disclosures in the component unit financial statements. An audit also incl assessing the accounting principles used and significant estimates made by management, as as evaluating the overall component unit financial statement presentation. We believe tha
audit provides a reasonable basis for our opinion.
In our opinion, the component unit financial statements referred to above present fairly, i
material respects, the financial position of the Carlsbad Redevelopment Agency at June 30, 1
and the results of operations for the year then ended, in conformity with generally accc accounting principles.
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October 3, 1997 e
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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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CARLSBAD REDEVELOPMENT AGENCY
Combined Balance Sheet - All Governmental Fund Types and Account Groups
June 30, 1997
Governmental Fund Types Account Group
General TC
Special Debt Capital Long-term (Memor: -- Revenue Service Proiects - Debt - 1997
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Assets and Other Debits
Cash and investments (note 3) $1,220,365 1,298,496 2,669,586 5,188,447 Accounts receivable 3,170 3,170 Loan receivable 2,302,876 2,302,876
Taxes receivable 8,854 35,415 44,269 Interest receivable 30,485 30,485 Prepaid expenditures
Amount available in debt service fund 1,333,911 1,333,911 Amount to be provided e for retirement of debt 23,513.745 23,513,745
Total assets and other debits $3,532,095 1,333,911 2,703,241 24,847.656 32,416,903
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Liabilities and Fund Balances
Liabilities: 107 26,537 26,644 23,337 34,705 Accrued expenses 11,368
Deposits payable 323 323 Deferred revenue 29,800 29,800 Advances from the City
of Carlsbad (note 5) 9,842,656 9,842,656 Bonds payable (note 5) 15,005,000 15,005,000
Total liabilities 1 1,475 79,997 24,847,656 24.939,128
0 Accounts payable $
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Fund balances (note 7):
Reserved for loan receivable 2,302,876 2,302,876 Reserved for debt service 260,013 260,013
Unreserved: Reserved for encumbrances 202 45,145 45,347 0
Designated for future debt service 1,073,898 1,073,898 Designated for approved capital projects 1,238,665 1,238,665 Designated for continuing appropriations 26,000 26,000 0 Undesignated 1,2 17,542 1,3 13,434 2,530,976
Total fund balances 3,520,620 1.333,911 2,623,244 7,477,775
Total liabilities and fund balances $3,532,095 1,333,911 2,703,241 24,847,656 32,416,903
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See accompanying notes to component unit financial statements.
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CARLSBAD REDEVELOPMENT AGENCY
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types
Year Ended June 30, 1997
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Totals
Special Debt Capital (Memorand Revenue Service Projects 1997 0
Revenues : - Property tax increment $ 285,634 1,142,537 1,428,17 1 1: Charges for services 1 17,021 1 17,02 1 1 Interest 75,927 82,887 136,498 295,312 2
Miscellaneous 527 1,105 10,341 1 1,973 -
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0 Total revenues 362,088 1,226,529 263,860 1,852,477 u
Expenditures:
Current:
4 General government - - 560,3 11 560,3 1 1 - e Housing and welfare 75,548 - 75,548
Capital outlay - - - Debt service: ,. - - Principal 272,240 272,240 L Interest and fiscal charges - 1,343,652 - 1,343,652 l,? Miscellaneous - 15,608 - 15,608 -
0 Total expenditures 75,548 1,63 1,500 560,3 1 1 2,267,359 z
Excess (deficiency) of
revenues over (under)
expenditures 286,540 (404,971) (296,451) (414,882) Q
Other financing sources (uses): *
Operating transfers in - - 430,000 430,000 4
Operating transfers out - (430,000) - (430,000) (4 Transfers from the City of Carlsbad - - 7,836 7,836
the City of Carlsbad - 538,477 - 538.477 - 5
sources (uses) - 108,477 437,836 546,313 - 5
Proceeds of advances from
a Total other financing
Excess (deficiency) of revenues and other financing sources over a (under) expenditures and other financing uses 286,540 (296,494) 141,385 131,431 1
Residual equity transfers in - - 3,411 3.411 -
Fund balances at beginning of year 3,234,080 1,630,405 2,478,448 7,342,933 7,l
Fund balances at end of year $3,520,620 1,333,911 2,623,244 7,477.775 7J - 0
See accompanying notes to component unit financial statements.
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CARLSBAD REDEVELOPMENT AGENCY
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Special Revenue and Debt Service Funds
Year Ended June 30,1997
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Special Revenue Debt Service Actual on
Budgetary Variance- V Basis Over Budget mote 2) (Under) Budget Actual (
Property tax increment $ 300,000 285,634 (14,366) 1,200,000 1,142,537 (
Interest 55,000 75,927 20,927 50,000 82,887 Miscellaneous 527 527 29,800
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- 1,105 [
Total revenues 355,000 362,088 7,088 1,279,800 1,226,529 [
Expenditures:
Current:
Debt service:
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Housing and welfare 132,141 75,750 (56,391) - -
Principal - - - 262,240 272,240 . Interest and fiscal charges - - - 1,354,737 1,343,652 ( - - - 26,000 15.608 L 0 Miscellaneous
Total expenditures 132,141 75,750 (56,391) 1,642.977 1,631,500 L
Excess (deficiency) of revenues over (under) m expenditures 222,859 286,338 63,479 (363,177) (404,971) (f
Other financing sources (uses): Operating transfers out - - - (430,000) (430,000)
from the City of Carlsbad - - - 538,477 538,477 -
- - - 108,477 108,477 -
Proceeds of advances
Total other financing sources (uses)
Excess (deficiency) of revenues and other financing sources over (under) expenditures
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m and other financing uses 222,859 286,338 63,479 (254,700) (296,494) (4
Fund balances at beginning of year 3,234,080 3,234,080 - 1,630,405 1,630.405 -
Fund balances at end of year $3,456.939 3,520,418 63,479 1,375,705 1.333,911 @ - 8
See accompanying notes to component unit financial statements.
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CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
Year Ended June 30,1997
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(1) Organization and Summary of Significant Accounting Policies
The Carlsbad Redevelopment Agency (the Agency) was established in July 1976 wit1 adoption of Ordinance No. 1 19 1 by the Carlsbad City Council pursuant to the Califc Community Redevelopment Law, now codified as Part 1, Division 24, of the Stai California Health and Safety Code. The Agency has the broad authority to acq rehabilitate, develop, administer, and sell or lease property. The Agency is not subje federal or state income taxes.
The principal objectives of the Agency are to eliminate blighted influences withir "Village Area'' of the City of Carlsbad, stimulate and attract private investment, genc added employment through increased specialty goods and services, and expand the C sales tax revenue.
The Agency is an integral part of the reporting entity of the City of Carlsbad (the C
The funds and account group of the Agency have been included within the scope o
general purpose financial statements of the City because the City Council is
governing board over the operations of the Agency. Only the funds and account grot. the Agency are included herein; therefore, these financial statements do not purpoi represent the financial position or results of operations of the City of Carlsbad, Califoi
The accounting policies of the Agency conform to generally accepted accoun principles as applicable to governmental units. The following is a summary of the n
(a) Basis of Presentation
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0 significant policies:
The accounts of the Agency are organized on the basis of funds and an accc group, each of which is considered to be a separate accounting entity. operations of each fund and account group are accounted for by providir separate set of self-balancing accounts that comprise its assets, liabilities, 1 balance, revenues, and expenditures. The various funds and account group summarized by type in the financial statements. The fund types and accl group used by the Agency are as follows:
GOVERNMENTAL FUND TYPES
Governmental funds are used to account for the Agency's expendable finar
resources and related liabilities. The measurement focus is upon determinatio changes in financial position. The following are the Agency's governmental f types:
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CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
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(1) Organization and Summary of Significant Accounting Policies, (Continued)
Special Revenue Funds
Special revenue funds are used to account for revenues derived from spel
sources (other than major capital projects) that are restricted by lav
administrative regulation to expenditures for specified purposes.
Debt Service Funds
Debt service funds are used to account for the accumulation of resources for, payment of general long-term debt principal, interest and related costs.
Capital Projects Funds
Capital projects funds are used to account for financial resources to be usec the acquisition or construction of major capital facilities.
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GENERAL LONG-TERM DEBT ACCOUNT GROUP
This account group is used to establish accounting control and accountability the Agency's general long-term debt. This account group is used to account fo long-term obligations of the Agency.
Measurement Focus and Basis for Accounting
Governmental fund types are accounted for on a "spending" measurement fo
Accordingly, only current assets and current liabilities are included on t balance sheets, and the reported fund balance provides an indication of availa
spendable resources. Operating statements for governmental fund types re
increases (revenues) and decreases (expenditures) in available spend; resources.
The modified accrual basis of accounting is utilized by the governmental f types. Revenues are recognized when susceptible to accrual, Le., both measur: and available. Available means collectible within the current period or SI enough thereafter to be used to pay liabilities of the current period.
Revenues that are accrued include the tax increment on real property taxes interest income.
Real property taxes are levied on October 15 against owners of record at Marc The taxes are due in two installments, on November 1 and February 1, become delinquent after December 10 and April 10, respectively. Tax liens att
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CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
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(1) Orpanization and Summary of Significant Accounting Policies, (Continued)
e annually as of 12:Ol a.m. on the first day of March in the fiscal years for P the taxes are levied. Under the provisions of NCGA Interpretation 3, propert revenue is recognized in the fiscal year for which the taxes have been le provided it is collected within 60 days of the end of the fiscal year.
Effective January 1, 1997, real property taxes are levied on October 15 ag, property owners of record at January 1. Also tax liens attach annually as of 1 a.m. on the first day of January in the fiscal year for which the taxes are levied
Governmental fund expenditures are recognized when the liability is incu except for principal and interest on long-term debt which is recognized when (
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Encumbrance accounting, under which purchase orders, purchase order requ contracts and other commitments for the expenditure of monies are record€ order to reserve that portion of the applicable appropriation, is employed a
extension of formal budgetary control in the governmental funds. Encumbra outstanding at year-end do not constitute expenditures or liabilities, but reported as reservations of fund balance for subsequent-year expenditures.
(d) Cash and Investments
The Agency participates in the pooled cash and investment fund of the Cit Carlsbad. Pooled investments are stated at cost or amortized cost. The Ager equity in the pooled cash is included in the financial statements as cash investments. Interest earned as a result of the pooling is accrued in the cash investment pool and allocated to the appropriate funds as part of the mor interest allocation.
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Vacation pay is payable to employees at the time used or upon terminatio employment. The cost of accumulated vacation expected to be paid in the ne) months is recorded as a fund liability; currently no amounts are expected ti paid after 12 months. e
(f) Total Columns
Total columns on the accompanying combined financial statements are captic "Totals (Memorandum Only)" to indicate that they are presented only to facilj financial analysis. Data in these columns do not present financial position, re5 of operations, or changes in fund balance in conformity with generally acce] accounting principles. Such data is not comparable to a consolidation. Inter1 eliminations have not been made in the aggregation of this data.
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CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
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J2) Budgetary Data
The budget for the Agency is established by the City of Carlsbad. The City Manag authorized to make transfers of appropriated amounts fiom one department to an( within a fund for up to $100,000 per transfer. The legal level of budgetary control the fund level. Revisions that alter the total appropriations of any fund must be apprl by the City Council with the exception of budget adjustments which involve offse revenues and expenditures. The City Manager is authorized to increase or decreas appropriation for a specific purpose where the appropriation is offset by unbudg revenue which is designated for said specific purpose. Quarterly budget review: conducted each year and any major changes to the adopted budget are approved b! City Council at that time.
Budgets are adopted on the modified accrual basis, except that encumbrances are trc as budgeted expenditures in the year purchases are committed. Expenditures may exceed budgeted appropriations at the fund level. Unencumbered appropriations lap: year-end. Annual budgets are adopted for the special revenue and debt service funds.
For purposes of budgetary presentation, actual generally accepted accounting princi (GAAP) expenditures have been adjusted to include encumbrances outstanding.
The following schedule is a reconciliation of the budgetary and GAAP Special Revc
fund balances:
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Special Revenue
a Fund balance - budgetary basis $3,520,418
$3,520,620
Encumbrances outstanding at year-end 202
Fund balance - GAAP basis
0 (3) Cash and Investments
The Agency participates in the pooled cash fund of the City.
Authority for Deposits and Investments
The Agency's investment policy and state statutes authorize the Agency to inves obligations of the U.S. Government, its agencies and instrumentalities, commercial pi rated A-1 by Standard and Poor's Corporation or P-1 by Moody's Commercial PE record with a maximum maturity of 180 days or 15% of the portfolio, bank acceptances with a maximum maturity of 270 days or 25% of the portfolio, repurck agreements with a maximum maturity of one week, certificates of deposit with natic
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CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
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and state licensed or chartered banks or federal or state savings and loan associat medium-tern corporate notes with a maximum five-year maturity rated in the twc rating categories and not to exceed 30% of the portfolio, money market funds w portfolios consist of one or more of the foregoing investments, a sweep account, an( State Treasurer's investment pool.
State statutes require that all deposits be insured or collateralized. Depositories hol
public funds on deposit are required to maintain collateral in the form of a poc
securities with the agent of the depository having a market value of at least 10 tl
percent in excess of the total amount of all public funds on deposit.
Classification of Investments by Credit Risk:
As defined in Governmental Accounting Standards Board Statement No. 3, the Ager investments in securities are categorized in the following manner:
Category 1 - Investments that are insured or registered, which are held by the Agc
or its agent in the Agency's name.
Category 2 - Uninsured and unregistered investments, for which the securities are
by the counterparty's trust department or agent in the Agency's name.
Category 3 - Uninsured and unregistered investments, for which the securities are
by the counterparty or by its trust department or agent, but not in the Agency's name.
At June 30, 1997, the Agency had the following investments which are not categoriz; by credit risk:
Carrying Mark
Investment Amount yalJ
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Investments held by City not subject to categorization:
Investment in State of California Pooled Investment
Account $2,210,832 2,220, Investment in City's pooled cash fund 2,93 1,344 2,93 1,
Investment in mutual funds
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Investment held by fiscal agent not subject to categorization: 46.'
Total investments $5,188,447 5,197;
46,271
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CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
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(3 ) Cash and Investments, (Continued)
* The State of California Pooled Money Investment Account (generally refem as LAIF) has invested in certain market risk sensitive instruments including Treasury strips, federal agency floating rate notes, federal agency mortga backed securities, corporate floating rate notes and loans to certain state fi As of June 30, 1997, the management of the State of California Pooled MI Investment Account has calculated the market value of LAIF to $28,637,448,331. The City's proportionate share of that value is $2,210,832.
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(4) Pension Plan a
The Agency's employees are included in the City's pension plan which is administerec
the California Public Employees Retirement System (PERS). PERS is an agent multi employer public employee retirement system that acts as a common investment administrative agent for participating public entities within the State of California.
All full-time employees are eligible to participate as members of the PERS. Benefits after an employee has been a member of the plan for five years. Employees are elig to retire after age 50 with 5 years of credited service. Annual retirement benefits determined based on age at retirement, the length of membership service and the amc of earnings based on the highest twelve consecutive months average. The PERS provides death and disability benefits. These benefit provisions and all c
requirements are established by state statute,
Employees are required to make contributions equaling 7% of gross pay. This is paic the City for the benefit of the employees in lieu of salary. The City is also requirec contribute the remaining amounts necessary to fund the benefits for its members, u:
the actuarial basis recommended by the PERS actuaries and actuarial consultants
adopted by the PERS Board of Administration.
Additional disclosures required by Governmental Accounting Standards Board Staten No. 5 are not available for the Agency as a separate entity. This information for City's reporting entity is presented in the Comprehensive Annual Financial Report of City of Carlsbad.
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CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
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1'5) Long-Tern Debt
The following is a summary of changes in long-term debt for the year ended Jmc 1997:
Principal Principal Balance at Additional Balance at July 1, 1996 Obligations Deletions June 30, 199 Advances from the City of Carlsbad $ 9,333,979 538,477 (29,800) 9,842,656
e Bonds payable 15,255,000 - (250,000) 15,005,000
Total $24,588,979 538,477 (279,800) 24,847,656
Since activation of the Redevelopment Agency in July 1976, the City has advance( Agency monies for approved expenditures. Advances from the City bear interest equ the City's interest rate received on pooled investments. There is no stated maturity da
On August 15, 1993, the Agency issued $15,495,000 in tax allocation bonds wit1 average interest rate of 5.3% to finance redevelopment activities within the Vi1 Redevelopment Project Area and to advance refund $11,185,000 of outstanding I series tax allocation bonds with an average interest rate of 7.3%. At June 30, 1 $9,8 15,000 of the defeased 1988 bonds were outstanding.
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CAFUSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
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(5) Long-Term Debt, (Continued)
Debt service requirements to maturity for the bonds, including sinking fund paym are as follows:
e 1998 $ 1,047,659 1999 1,048,352 2000 1,043,390 200 1 1,042,771 2002 1,046,234 2003-2007 5,220,03 1 2008-2012 5,207,63 8 201 3-201 7 5,189,606 201 8-2022 5,157,296 2023-2024 2,054,675
28,057,652
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Less amounts representing interest (13,052,652)
Bonds payable $15,005,000
(6) Obligations Under Operating. Leases e
In June 1988, the Agency entered into an agreement to lease a parking lot on State S
from a private party. The lease requires monthly rental payments for twenty years.
Minimum future rental payments under operating lease as of June 30, 1997 are: e
1998 $ 55,402 1999 58,726 2000 62,250 200 1 65,985 2002 69,944 Subsequent to 2002 5 17s 54
Total minimum future rental payments $829,461
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CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
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(7) Fund Balances
Reserves for the loan receivable and low and moderate income housing are establish show that certain assets are already committed for other purposes and are not avai for discretionary expenditures.
Reserve for debt service represents resources legally restricted to the payment of ge long-term debt principal and interest maturing in future years.
Reserve for encumbrances represents commitments related to unperformed contracl
services and undelivered goods.
Unreserved-undesignated balances represent the fund balance remaining after reduc for reserved and designated fund balances.
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CERTIFIED PUBLIC ACCOUF
11 00 MAIN STREE
IRVINE, CALIFOR
(71 4
CONRAD
%SSOCWTES. A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS L.L.p a
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The Board of Commissioners Carlsbad Redevelopment Agency
Carlsbad, California
a Auditors' ODinion On Compliance With Audit Guidelines for California Redevelopment Agencies
We have audited the combined financial statements of the Carlsbad Redevelopment Agenl component unit of the City of Carlsbad, California) as of and for the year ended June 30, I and have issued our report thereon dated October 3, 1997. We conducted our audit in accorc
with generally accepted auditing standards and Government Auditing Standurds. T standards require that we plan and perform the audit to obtain reasonable assurance i
whether the financial statements are free of material misstatement.
Compliance with laws and regulations applicable to the Carlsbad Redevelopment Agency i responsibility of the Carlsbad Redevelopment Agency's management. As part of obta reasonable assurance about whether the financial statements are free of material misstaten we performed tests of the Carlsbad Redevelopment Agency's compliance with provisions of and regulations contained in the Guidelines For Compliance Audits of California Redevelop, Agencies issued by the State Controller's Office, Division of Local Government Fiscal Affair
The results of our tests indicated that, with respect to the items tested, the Carl Redevelopment Agency complied, in all material respects, with the provisions referred to ii preceding paragraph. With respect to items not tested, nothing came to our attention that ca us to believe that the Carlsbad Redevelopment Agency had not complied, in all material resp with those provisions.
This report is intended for the information of the Carlsbad Redevelopment Agency, and the I Controller's Office. However, this report is a matter of public record and its distribution i! limited.
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October 3, 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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