Loading...
HomeMy WebLinkAbout1998-01-13; City Council; 14518 Exhibit 6; PUBLIC IMPROVEMENT CORPORATION FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA JUNE 30, 19970 a e CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Financial Statements and Supplemental Data Year Ended June 30,1997 (With Independent Auditors' Report Thereon) 0 0 a 0 a 0 a 0 0 CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Financial Statements and Supplemental Data Year Ended June 30,1997 e 0 TABLE OF CONTENTS Independent Auditors' Report Combined Balance Sheet - Governmental Fund Type and Account Group Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds (Ir e Notes to Financial Statements Supplemental Data: Combining Balance Sheet - Debt Service Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds 0 @ 0 e 0 e a CERTIFIED PUBLIC ACCOU 11 00 MAIN STRE IRVINE, CALIFOF (71f CONRAD %ASSOCIATES. A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS L.L.p e Board of Directors City of Carlsbad Public Improvement Corporation Carlsbad, California 0 a Independent Auditors' Report We have audited the accompanying component unit financial statements of the City of Car Public Improvement Corporation (the Corporation) as of and for the year ended June 30, 195 listed in the accompanying table of contents. These component unit financial statements a responsibility of the Corporation's management. Our responsibility is to express an opinic these component unit financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. 'I standards require that we plan and perform the audit to obtain reasonable assurance i whether the financial statements are free of material misstatement. An audit includes exami 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 ma( management, as well as evaluating the overall financial statement presentation. We believt our audit provides a reasonable basis for our opinion. In our opinion, the component unit financial statements referred to above present fairly, material respects, the financial position of the City of Carlsbad Public Improvement Corpor as of June 30, 1997, and the results of its operations for the year then ended in conformity generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the component unit fin2 statements taken as a whole. The combining financial statements listed in the accompai table of contents are presented for purposes of additional analysis and are not a required pi the component unit financial statements of the City of Carlsbad Public Improve Corporation. Such information has been subjected to the auditing procedures applied in the of the component unit financial statements and, in our opinion, is fairly stated in all ma1 respects in relation to the component unit financial statements taken as a whole. e 0 e &&&L#ArC.Uk+, L2.4 September 11, 1997 e 1 MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION e CITY OF CARLSBAD PUBLIC IMPROVEMENT COWORATION Combined Balance Sheet - Governmental Fund Type and Account Group June 30, 1997 e e Governmental Account Fund Type Group General Totals Debt Long-Term (Memoranc Service Debt Only) e Assets - 195 1 - 925,6 - 30,2 Amount available in debt service funds - 9 16,922 916,9 certificates of participation - 5,698,078 5.698,C Cash and investments $ Cash and investments held by trustee (note 2) 925,681 Interest receivable 30,210 Amount to be provided for retirement of 0 Net investment in direct financing lease (note 3) 5,698,078 - 5,698,C Total assets $6,654,164 6,615,000 13,269,l e Liabilities and Fund Balances Liabilities: e Due to City of Carlsbad $ 16,000 - 16,O Deferred revenue 5,698,078 - 5,698,O - 6,615,O 6,6 15,000 Total liabilities 5.7 14,078 6.615,OOO 12,329,O Certificates of participation payable (note 4) e Fund balances: Reserved for arbitrage (note 5) 23,164 - 23,l Reserved for debt service (notes 4 and 5) 916,922 - 916,9 Total fund balances 940,086 - 940,01 Total liabilities and fund balances $6.654,164 6,615,000 13,269,1( e a See accompanying notes to financial statements. e 2 e CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds Year Ended June 30,1997 0 0 Debt Se Revenues: Lease payments $797,: Interest on investments 104.( Total revenues 901,: 0 Expenditures: Principal 330,( Interest 529,; Administrative 4,s Total expenditures 864,; Excess (deficiency) of revenues over (under) expenditures 36,t e e Other financing sources (uses): Operating transfers in 73,3 Operating transfers out (73,3 e Total other financing sources (uses) - Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 36,8 903.2 $940.0 0 Fund balances at beginning of year Fund balances at end of year e 0 See accompanying notes to financial statements. 3 e CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Notes to Financial Statements Year Ended June 30,1997 a (1 1 Organization and Summary of Significant Accounting Policies The City of Carlsbad Public Improvement Corporation (the Corporation) was orga on June 1, 1988 under the Nonprofit Public Benefit Corporation law for the purpa financing and constructing certain improvements on the parcel of property knov Hosp Grove. The Corporation is not subject to federal or state income taxes. The Corporation is an integral part of the reporting entity of the City of Carl California (the City). The accounts of the Corporation have been included withi scope of the general purpose financial statements of the City because the City Counc financial accountability over the operations of the Corporation. Only the accounts c Corporation are included herein; therefore, these financial statements do not purpc represent the financial position or results of operations of the City. The accounting policies of the Corporation conform to generally accepted accou principles as applicable to governmental units. The following is a summary of the significant policies: (a) Basis of Presentation e e e 0 The accounts of the Corporation are organized on the basis of funds an account group, each of which is considered to be a separate accounting e The operations of each fund and account group are accounted for by provid separate set of self-balancing accounts that comprise its assets, liabilities, balance, revenues, and expenditures. The various funds and the account grou summarized by type in the financial statements. The fund types and the acc group used by the Corporation are as follows: GOVERNMENTAL FUND TYPE The governmental fund is used to account for the Corporation's expenc financial resources and related liabilities. determination of changes in financial position. The following is the Corporal governmental fund type: 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. e 0 The measurement focus is e GENERAL LONG-TERM DEBT ACCOUNT GROUP This account group is used to establish accounting control and accountabilit the Corporation's general long-term debt. It is used to account for all long obligations of the Corporation. e 1, 4 0 CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Notes to Financial Statements (Continued) e * (1) Organization and Summary of Significant Accounting Policies, (Continued) (b) Measurement Focus and Basis of Accounting The governmental fund type is accounted for on a "spending" measurement fi Accordingly, only current assets and current liabilities are generally include its' balance sheet, and the reported fund balance provides an indicatio available, spendable resources. The operating statement for the governm fund type report increases (revenues) and decreases (expenditures) in avail spendable resources. The governmental fund type uses the modified accrual basis of accour Revenues are recognized when susceptible to accrual (i.e., both measurable available). Available means collectible within the current period or soon enc thereafter to be used to pay liabilities of the current period. Revenues tha accrued include interest income. The governmental fund expenditures are recognized when the liability is incu except for principal and interest on long-term debt, which is recognized when e 0 a (c) Budgets The Corporation does not adopt an annual budget, therefore, no budgc comparisons are presented. a (d) Investments Investments are stated at cost or amortized cost which approximates market va (e) Total Columns a Total columns on the combined statements are captioned "Totals (Memoran Only)" to indicate that they are presented only to facilitate financial anal Data in these columns do not present financial position, results of operation! changes in fund balances in conformity with generally accepted accour principles. Such data is not comparable to a consolidation. Interfimd eliminat have not been made in the aggregation of this data. e 0 5 0 0 CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Notes to Financial Statements (Continued) e (2) Cash and Investments e Authority for Investments The Trust Agreement by and among the First Trust of California, as successor trustee Corporation and the City, dated June 1, 1988, authorizes the trustee to invest in Fec Treasury Securities, Federal Agency Securities, interest-bearing demand or time depc obligations of U.S. corporations having assets in excess of $500,000,000 and carr one of the three highest ratings by Moody's and Standard and Poor's Corpora repurchase agreements, money market funds, commercial paper rated A-1 by Stan and Poor's Corporation and P- 1 by Moody's Commercial Paper with original maturitic not more than 180 days, bankers acceptances with maturities of not more than 270 c and tax-exempt obligations rate in one of the three highest ratings by Moody's Standard and Poor's Corporation. Classification of Investment by Credit Risk As defined in Governmental Accounting Standards Board Statement No. 3, investn in securities are categorized in the following manner: Category 1 - Investments that are insured or registered, which are held by Corporation or its agent in the Corporation's name. Category 2 - Uninsured and unregistered investments, for which the securities are 1 by the counterparty's trust department or agent in the Corporation's name. Category 3 - Uninsured and unregistered investments, for which the securities are i by the counterparty or by its trust department or agent, but not in the Corporation's na As of June 30, 1997, the Corporation had $35 invested in money market mutual fu $56,646 in treasury obligations and $869,000 invested in a guaranteed investn contract which are not categorizable by credit risk. 0 e e 0 e 0 6 e 0 CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Notes to Financial Statements (Continued) 0 0 (3) Lease Agreements Under the terms of a lease agreement dated June 1, 1988, the City has leased pro known as Hosp Grove to the Corporation and the Corporation has leased back to the the same property and all improvements constructed thereon. The Agreement req the City to pay semiannual lease payments to the Corporation equal to the debt se requirements of the Certificates of Participation issued by the Corporation on Jw 1988 (the Certificates). Under the terms of the lease agreement between the City an Corporation, the City is required to make lease payments on January 15 and July 15 the Certificates have been paid in full. In addition, the City must pay all t assessments, insurance, maintenance and utilities on the property and its improvem The lease expires on August 1, 2008 or upon the date of retirement of the Certific The lease has been accounted for as a direct financing lease. 0 0 J4) Certificates of ParticiDation The Corporation issued the Certificates on June 1, 1988 in the amount of $8,69C pursuant to a Trust Agreement by and among the Corporation, the City and the Tru The Certificates represent an undivided interest in the lease payments made by the Ci the Corporation. Interest is payable at rates ranging from 5.75% to 7.6% per annum. Certificates mature on August 1 of each year through 2008. Certificates maturin August 1,2008 are subject to mandatory redemption on August 1 in each year on or August 1,2001, in amounts reflected in the debt service requirements below. Certifil maturing on or after August 1 , 1999 are subject to call in whole or in part at the optic the Corporation at prices ranging from 100% to 102% of the principal amount o Certificates. The Corporation is required to maintain a debt service reserve of $869 As of June 30,1997, the balance is $916,922. Debt service requirements to maturity for the Certificates are as follows: 0 0 0 Year ending; June 30, 1998 $ 860,985 1999 859,880 2000 861,030 200 1 854,330 2002 854,000 2003-2007 4,262,400 2008-2009 1,692,800 10,245,425 0 e Less amounts representing interest (3,630,425) Outstanding balance $ 6,615,000 e 7 a CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Notes to Financial Statements (Continued) e (4) Certificates of Participation, (Continued) 0 The following is a summary of changes in the general long-term debt of the Corpori for the year ended June 30,1997: Balance at Balance July 1, 1996 Additions Reductions June 30, . 0 Certificates of participation $6,945,000 - (330,000) 6,615,C At June 30, 1997, the Corporation was in compliance with all significant debt covena (5) Fund Balances The reserve for arbitrage represents amounts which may be owed to the fe( government under the Tax Reform Act of 1986. The reserve for debt service represents resources legally restricted to the paymei general long-term debt principal and interest maturing in future years. e (6) Subsequent Events On September 1, 1997 the Carlsbad Public Improvement Corporation issued $6,595 of Certificates of Participation, Series 1997. The certificates were issued for the puq of refunding all of the Carlsbad Public Improvement Corporation’s previously is: $8,690,000 HOSP Grove Certificates of Participation. Also on September 1, 1997 the Carlsbad Public Improvement Corporation is: $7,400,000 of 1997 Water Revenue Certificates of Participation on behalf of the Carl: Municipal Water District. The certificates were issued for the purpose of refunding a the Carlsbad Municipal Water District’s previously issued $14,370,000 1998 Certific of Participation. e e a e 8 a e e 0 e SUPPLEMENTAL DATA e a a 0 a Q a CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Combining Balance Sheet - Debt Service Funds June 30,1997 a 0 Lease Payment Reserve - Tot Assets Cash and investments $ 195 Cash and investments held by trustee 56,676 869,005 925 Net investment in direct financing lease 5,698,078 5,698 Interest receivable 247 29,963 30 Total assets $5,755.1 96 898,968 6,654 - * - Liabilities and Fund Balances Liabilities: - Due to City of Carlsbad $ 16,000 16 Deferred revenue 5,698.078 5,698 Total liabilities 5,714,078 5,714 - a - Fund balances: - Reserved for arbitrage 23,164 23 916 Reserved for debt service 17,954 940 Total fund balances 41,118 Total liabilities and fund balances $5,755.196 898,968 6,654 898,968 898,968 e e 0 a a 9 CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds Year Ended June 30,1997 a e Lease Payment Reserve - 1 Lease payments $797,500 - 75 Interest on investments 31.164 72,932 - 1( Total revenues 828.664 72,932 - 90 Principal 330,000 - 33 Administrative 4,939 - Total expenditures 864,734 - 3 over (under) expenditures (36,070) 72.932 - Operating transfers in 73,389 7 Operating transfers out (73,3 89) 12 Total other financing sources (uses) 73,389 (73,389) - Revenues: e Expenditures: Interest 529,795 - 52 - - 86 Excess (deficiency) of revenues 0 Other financial sources (uses): - - 0 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 37,3 19 (457) 3 Fund balances at beginning of year 3,799 899,425 - 90 Fund balances at end of year $ 41,118 898,968 - 94 e - a 0 10 e