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HomeMy WebLinkAbout1999-01-05; City Council; 14999 Exhibit 1; COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 1998I 1 II I 8 1 I 1 I I I 1 I I I I I 1 # COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30,1998 1200 Carlsbad Village Drive, Carlsbad, CA 92008 760-434-2867 Prepared by the Finance Department Internet Address: http://www.ci.carlsbad. ca.us 1 1 CITY OF CARLSBAD Comprehensive Annual Financial Report I Year Ended June 30, 1998 I TABLE OF CONTENTS I - Pas INTRODUCTORY SECTION: Table of Contents i I 1 Letter of Transmittal 1 B Government Finance Officers Association 33 1 I I B 1 I I I 1 Certificate of Achievement for Excellence in Financial Reporting, Certificate of Award for Outstanding Financial Reporting, California Municipal Finance Officers 34 Location Map 35 36 List of City Officials Organization Chart 37 Boards, Commissions and Committees 38 FINANCIAL SECTION: Independent Auditors’ Report 39 I General Purpose Financial Statements: 0 Combined Balance Sheet - All Fund Types and Account Groups Combined Statement of Revenues, Expenditures and 40 0 Changes in Fund Balances - All Governmental Fund Types 43 0 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Budgetary Basis) - All Governmental Fund Types 44 I I CITY OF CARLSBAD Comprehensive Annual Financial Report Year Ended June 30, 1998 TABLE OF CONTENTS (CONTINUED) rn General Purpose Financial Statements (continued): 0 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types 46 0 Combined Statement of Cash Flows - All Proprietary Fund Types 47 0 Notes to General Purpose Financial Statements 49 Supplemental Data: Governmental Funds: General Fund: 0 Schedule of Revenues - Budget and Actual (Budgetary Basis) Schedule of Expenditures - Budget and Actual (Budgetary Basis) 88 89 Comparative Schedule of Revenues 90 0 Comparative Schedule of Expenditures 91 Special Revenue Funds: Combining Balance Sheet 94 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 96 Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis) 98 II M 1 CITY OF CARLSBAD Comprehensive Annual Financial Report Year Ended June 30, 1998 I I TABLE OF CONTENTS (CONTINUED) I - Par. Supplemental Data (continued): Debt Service Funds: I 1 0 Combining Balance Sheet 1 OE I 1 I i 1 1 1 1 1 1 111 0 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 1 os 0 Redevelopment Bonds Debt Service Fund - Budget and Actual (Budgetary Basis) 11c I Capital Projects Funds: 0 Combining Balance Sheet 1 li 0 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 1 It Proprietary Funds: I Enterprise Funds: 0 Combining Balance Sheet 120 Retained Earnings 121 0 Combining Statement of Revenues, Expenses and Changes in 122 0 Combining Statement of Cash Flows ... CITY OF CARLSBAD Comprehensive Annual Financial Report Year Ended June 30, 1998 TABLE OF CONTENTS (CONTINUED) Pae Supplemental Data (continued): Internal Service Funds: 0 Combining Balance Sheet 126 0 Combining Statement of Revenues, Expenses and Changes in Retained Earnings 127 0 Combining Statement of Cash Flows 128 Fiduciary Funds: Agency Funds: 0 Combining Statement of Changes in Assets and Liabilities 132 Account Groups: General Fixed Asset Account Group: 0 Schedule of General Fixed Assets by Function 136 0 137 0 Schedule of General Fixed Assets by Source 138 Schedule of Annual Debt Service Requirements 140 Schedule of Changes in General Fixed Assets by Function STATISTICAL SECTION: (Not covered by Independent Auditors’ Report) 0 General Expenditures by Function, Last Ten Fiscal Years 146 iv I B I CITY OF CARLSBAD Comprehensive Annual Financial Report Year Ended June 30, 1998 I TABLE OF CONTENTS (CONTINUED) I - Pas STATISTICAL SECTION (CONTINUED): 0 General Revenues by Source, Last Ten Fiscal Years 14t 1 I I Computation of Legal Debt Margin 151 I I 1 B 1 1 I I V Ratio of General Bonded Debt to Assessed Valuation and Net Bonded Debt Per Capita, Last Ten Fiscal Years 15t 0 Schedule of Direct and Overlapping Bonded Debt 15; 0 Ratio of Annual Debt Service for General Bonded Debt to Total Governmental Expenditures, Last Ten Fiscal Years 15: 1 Last Ten Fiscal Years 15 0 Schedule of Assessed Valuation, Last Ten Fiscal Years 15( Construction and Business Activity, Last Ten Fiscal Years 15t Water Enterprise - Revenue Bond Coverage, Property Tax Levies and Collections, Last Ten Fiscal Years 15: I 0 Demographic Statistics, Last Ten Fiscal Years 16( 0 Principal Employers, 1997- 1998 16 0 Principal Taxpayers, 1997-1 998 16: 1 0 Top 30 Sales Tax Generators, 1997-1998 16. Miscellaneous Statistical Information 16~ c---- r - - - - c - - - - r - - - - c---- c---- c ---_ 1 -___ J----J----J- ---, ----J 37 C C 0 C 38 E I f Carlsba T II I I I I I I 1 1 E I I I I 1 September 25, 1998 Honorable Mayor, City Council, and City Manager CITY OF CARLSBAD Carlsbad, California 1997-98 COMPREHENSIVE ANNUAL FINANCIAL REPORT LETTER OF TRANSMITTAI We are pleased to present the 1997-98 Comprehensive Annual Financial Report of the C Carlsbad to the City Council and the City Manager. This report includes financial statemei the City, the Housing Authority of the City of Carlsbad, the Carlsbad Public Improve Corporation, the Carlsbad Redevelopment Agency and the Carlsbad Municipal Water Distri well as the opinion of our independent auditors, Conrad & Associates. The completion c independent audit is an important part of the total financial management program for the C Carlsbad. The information found in this report is provided by management to the Council and the puk assist those interested in understanding the fiscal condition of the City as of June 30, Responsibility for both the accuracy of the data, and the completeness and fairness c presentation, including all disclosures, rests with the City. To the best of our knowledge belief, the enclosed data are accurate in all material respects and are reported in a m: designed to present fairly the financial position and results of operations of the various fundi account groups of the City of Carlsbad. All disclosures necessary to enable the reader to an understanding of the government's financial activities have been included. Backq rou nd Carlsbad is located about 35 miles north of the City of San Diego on the southern Calii coast. The City is governed by a five member City Council under the CounciVManager fo government. Carlsbad is a general law city incorporated in 1952. The City covers abo square miles and has a population of 73,700. Industries in the area include a major rec shopping center, a specialty outlet center, 16 auto dealers, 25 hotels offering 2,200 room tourist lodging, high tech, multimedia, communication and biomedical businesses, electrc golf apparel and equipment manufacturers, several business and light industry parks, numerous land developers building single and multi-family housing in a variety of comrr settings. Carlsbad has created an atmosphere that is very conducive to attracting businesses and residents. .--. ____ ___~ _--_- ~__-~ _..__. ____ .-..- 1200 Carlsbad Village Drive Carlsbad, CA 92008-1 989 (760) 434-2867 FAX (760) 434- I 1 Services Provided bv the City The City provides the full range of services normally associated with a municipality including police, fire, parks and recreation, library, planning and zoning, building and engineering, various maintenance services and administration. The City provides water services through the Carlsbad Municipal Water District, a subsidiary district of the City. The City Council serves as the Board of Directors for the Carlsbad Municipal Water District. Solid waste collection is provided through a franchise arrangement with a local refuse collection service. In addition to the usual City services, Carlsbad offers a variety of programs to help local residents and businesses. The Carlsbad Police Department initiated a vacation security consultation service in 1997-98 to assist residents on security issues in preparation for their vacation. In addition, the Police Department has also recently implemented a year-round bicycle patrol force, as well as a school resource officer program that maintains order in and around schools to deter crime through enforcement, and creates positive interaction among students, citizens and educators. The City also operates a redevelopment agency that encompasses 0.4 square miles of the downtown area, as well as a housing authority that provides 480 low and moderate income families with housing assistance. The City's literacy program provides adult education to local area residents. Older Carlsbad residents receive assistance through the City's senior citizen programs. In addition, the City provides major support for the Convention and Visitors Bureau. Finally, the City has reserved over $300,000 for support of the arts, art programs, and the purchase of works of art. Significant Events and Accomplishments During 1997-98 the City experienced many significant events and accomplishments that may not be evident from a review of the financial statements. Some of the more important events are shown below. South Carlsbad Library - Construction began on the City's new 64,000 square foot library in the Southwest Quadrant of Carlsbad. This library sits on a six-acre site, and will provide enough space to meet the City's needs up to a population of 100,000 residents. The building will include all public service areas of a full-service library as well as staff administrative offices, and is scheduled to open in Spring/Summer of 1999. The Cole Library is scheduled to close and undergo extensive remodeling upon the completion and opening of the new Library. Regional Communication System - Beginning in 1997 and running through the year 2000, the County, City and several other participating agencies are planning to install a new radio communications system for the public safe:] and community services operations. The purpose for the system is to develop regional communication capabilities to cope with potential disasters and major events, to improve inter-agency and intra-agency communications, and to provide the needed technology for all participants to meet their communication needs in the future. AF X - 2 I I I I E I I 1 I I I 6 1 I I: I I I 1 3 The City’s share of the cost of the system is approximately $5.4 million, plus $100,000 pel in maintenance. The City intended to fund these costs from revenue received from a C Service Area (CSA) fee on each parcel located in the City. The passage of Propositioi brought the validity of the CSA charge into question and the matter was reviewed by thc Attorneys and County Counsel. approved by the voters and the matter was placed before the citizens in June 1998. Although a majority of the voters approved the proposition, it did not receive the required vote which was needed ‘:o pass the measure. The City has enough available funds to p; 1998-99 costs; however, the financing of the future years’ costs must still be determined. Clty has several options available which the Council will be reviewing in the upcoming mon Organization Redesign - The organizational structure of the City has evolved over the ye response to the immediate needs of the Council and the community. In recent years, the for a more comprehensive look at our organizational structure became apparent. During 98, City staff took the time to step back and carefully examine the structures to see if we reorganize in a way that would help City employees in providing services even more effeci and bring the most vallue to the City through the formation of a more “team-orie environment. Thus, a :Strategic Planning effort was undertaken to align the organiza structure with the City’s \/ision, Mission and Values. The goal in the restruduring was to design an organization that brings department5 programs together based on the services they provide; to put people together in group: have common goals and purposes. The result was the creation of five Major Service 1 (MSA) led by the Policy/Leadership group consisting of the City Council, City Manager Clerk, City Attorney and City Treasurer. The fiveMSAs are listed below. County Counsel opined that the CSA charge had 0 Administrative Services - Finance, Purchasing, Risk Management, Human Resol and Information Systems. Public Safety - Police and Fire. Community Development - Community Development Administration, Geogr Information Systems (GIs), Economic Development, Planning and G Management, and Building Inspection. 0 Community Services - Library, Cultural Arts, Park Planning and Recre Management, and Senior Citizen Programs. 0 Public Works - Public Works Administration, Engineering, Park Maintenance, 5 Maintenance and Lighting, Building Maintenance and Traffic Sign Maintenance. As ,the next step in the redesign project, City staff will be realigning many of the bus processes based on the new organization structure. This work will continue through the fiscal year. Carlsbad Ranch - A significant factor in the increase in City revenues during the year, and projected revenues for the future, is the development of an area in western Carlsbad referred to as Carlsbad Ranch. Carlsbad Ranch encompasses over 2.9 million square feet of commercial and industrial properties. In October 1997, the Carlsbad Company Stores, a 12 specialty outlet center comprised mainly of apparel stores and a micro- winery, opened to the public. New commercial businesses have also relocated to this area of Carlsbad including Denso America, a company specializing in wireless technology and automotive satellite navigational systems, and Natural Alternative International, a supplier of vitamin supplements. These companies join the already existing Gemological Institute of America and the National Association of Music Merchants. In the spring of 1999, Legoland California theme park is projected to add the largest feature to Carlsbad Ranch. This family park is primarily for children ages 2-1 3, will have 30 rides and attractions covering 128 acres, and is based on the Leg0 building blocks. Also in the Carlsbad Ranch project area are sites for a community hotel, the Pan Pacific Resort and timeshares, the Carlsbad Municipal Golf Course, and additional research and development businesses. The Carlsbad Ranch Assessment District was officially formed and approved in July 1997, with the issuance of $10.2 million of limited obligation improvement bonds (1915 Act), to acquire certain public improvements to and along Cannon Road, Palomar Airport Road, Armada Drive and Leg0 Drive, including street improvements, street lighting, landscaping utilities and underground improvements and a pedestrian walkway. Repayment of the bonds will come from assessments on the properties within the Carlsbad Ranch area. The City is cognizant of the traffic impact on the City due to the development of Carlsbad Ranch, and has spent substantial capital project funds to ensure that the necessary infrastructure is in place to accommodate this growth. Construction of Capital Projects - The City's aggressive Capital Improvement Program continued in 1997-98 with an outlay of approximately $23.9 million. As development continues, the demand for development-related services and new facilities is also growing. During the next five years, Carlsbad is projected to spend over $188 million on capital projects in order to meet and/or exceed the City's Growth Management Plan standards. This Plan requires a standard level of facilities (including libraries, schools, parks, water, sewer, etc.) to be available to meet the increased demands. A large portion of the future funds are scheduled to improve the circulation of traffic throughout the City. Carlsbad is dedicated to improving the infrastructure of the City into the foreseeable future through implementation of its long range capital building program. Several major capital projects were started or completed in '1997-98 including the South Carlsbad Library, infrastructure improvements in the Carlsbad Ranch area, the La Costa Avenue and Cannon Road interchanges, the widening of La Costa Avenue and Olivenhain Road, work on the westerly extension of Cannon Road, work on Poinsettia Lane and Aviara Parkway extensions, a building acquisition by the Redevelopment Agency and the continuing pavement management program. & A L I CT 0 h) w 1 A 4 1 I I I I 1 I I M E 1 E I 1 1 I I 1 5 Affordable Housing - Grading began during this past fiscal year for the Laurel Apartments, an affordable housing project consisting of 138 family apartment units located Southwest Quadrant of Carlsbad. This community will be comprised of 2, 3 and 4 bec units renting from $430 to $690 per month. Qualified families making between $18,00( $34,000 annually, will benefit from an onsite child care center that will accommodate 50 chi In addition to the City’s financial assistance, funding for this project was accomplished thi Low-Income Housing Tax Credits and developer contributions. Performance Management and Compensation - During the fiscal year, the City Cc authorized a formal Performance Management and Compensation System for employe management classifications. The intent of the program is to align the goals of the departments and individual management employees with the goals of the City Coun conjunction with the City’s usual business cycle. Management employees were involved extensive training program during the year to familiarize staff with this new program. The new program is comprised of two major components: performance managemen’ compensation. The Derformance management component emphasizes an emp development approach to performance appraisal through continuous coaching and feed The compensation component establishes a market-based approach to compensation, 2 comprised of a base pay program which rewards the development and demonstrati1 competencies on the job, and an incentive pay program which rewards the measL achievement of specific goals. The goal setting process begins with the City Council setting strategic goals which suppo City’s Mission, Vision arid Values. These goals are then further developed into operat department and progran goals. Finally, individual goals are defined for each manage employee. Each manas;ement employee is evaluated on the level of achievement of ea their goals. This goal achievement, combined with employee competency evalua determines the base pay increase and one-time incentive payment for management emplo 1 on an annual basis. Year 2000 Compliance and Information Systems - The year 2000 problem (Y2K) stems programmers that, years ago, designed systems and applications to ho date in two digit fields rather than four digit fields in order to save val memory space. They did not consider that years later many computer devices with embedded chips - traffic lights, elevators, telephone switc will fail to recognize “00” as the year 2000 and may either fail complet, interpret the “00” as the year 1900 with disastrous results. The Cit; addressed this issue in two manners: In late 1993, the City began a systematic upgrade of its hardware and software as part normal business plan. hlodern technology had significantly improved data collection me and thus increased the level of financial information reporting available at all levels of the The new systems provided the City’s decision-makers with much needed financial inform thereby enhancing operational and administrative effectiveness and efficiencies. The year issue did not prompt the upgrades, however, as the systems were replaced, the City was insured that the new software and hardware was Y2K compliant. Core financial systems were implemented in fiscal year 1996-97 which included the general ledger, budgeting, purchasing, fixed assets, accounts receivable and accounts payable modules. The second phase of the implementation was completed in fiscal year 1997-98 and included human resources, payroll and cash receipts The remaining and final phase of the project will encompass permits, business license, fleet management and water utility billing. Implementation of these modules has been scheduled for fiscal year 1998-99. In addition, the City has also formed a Y2K Committee to specifically address the Y2K issue. The Committee will look not only at systems and equipment within the City, but also at systems being utilized outside the City by City staff. Potential issues are being identified by the group for discussion and possible solutions. Disaster Preparedness - The City of Carlsbad views Emergency Management as a priority to protect lives and property of the residents and visitors to the area. An “Operation Winter Storm 97” emergency exercise was undertaken in November 1997 to reinforce the proper operations of the Emergency Operations Center (EOC) staffed with City employees. This exercise was done in conjunction with other City efforts in preparation for the expected El NiWo weather condition. The El NiWo impact on Southern California in 1997-98 was higher ocean water temperatures and increased rainfall. The City suffered only $16,000 in losses attributable to El NiWo. The expected water runoff on streets, roads, yards and drainage channels did not materialize to any great extent, due chiefly to the work performed by the City’s Water, Streets and Engineering Inspection departments prior to the storms. Their efforts to clear drainage facilities and ensure that contractors were doing everything possible to control run-off from grading sites made a big difference. Financial Statement Format This report is designed to provide both summarized and detailed information on the operation of each of the City’s funds. The report is organized as follows: Introductory Section - This section contains the table of contents, letter of transmittal, CAFR awards, location map, list of City officials, organization chart, and the boards, commissions and committees chart. Financial Section - This section contains the combined or summarized financial statements for all funds, as well as the notes to the financial statements 6 sc E d i I I E 1 ]I II. 1 D I I: 1 I Supplemental Data - This section provides more detailed information on the a within each fund including revenues, expenditures, chanc fund balances, comparisons to budget figures and other rf data. Statistical Information - This section provides data on the City's fiscal activity ovt past ten years including revenues, expenditures, debt, assf value, and demographic information. Accounting System and Budgetary Control The City's accounting system is designed around a few basic principles: (1) The City is not one single entity. It is the total of many entities, each with its sey function and legal restrictions on the use of resources. In the private sector, a corpo may have many "subsidiaries" which make up the parent corporation. In the public s a city government may have a variety of "funds" that provide the basis for sepa recording the financial data related to a specific activity. A fund is an accounting entit' a complete set of self-balancing accounting records. Each fund has been establ because of some restriction on the use of resources received by that fund. This I includes the transactions of all entities over which the City Council of the City of Car has authority (as defined by the Governmental Accounting Standards Board). The City's accounting system operates on a modified accrual basis for all governn and agency type funds. Governmental funds include the General, Special Revenue, Service and Capital Projects funds. A modified accrual system is one where: a) rev€ are recognized when they are both measurable and available to liquidate liabilities ( current period; and b) expenditures are recognized when an event or transacti expected to draw ul3on current spendable resources (rather than future resources). The proprietary fund types (Enterprise and Internal Service funds) use the accrual m of accounting. Revenues and expenses are recorded when earned or inci respectively. Internal controls exist within the accounting system to ensure safety of assets misappropriation, uiiauthorized use or disposition, and to maintain the accuracy of fin; record keeping. 'These internal controls must be established consistent with I management practices based on the cost/benefit of the controls imposed. The cos control should not 3e excessive in relation to its benefit as viewed by City manage The internal controls in existence within the City's system are sufficient to ensure material aspects both the safety of the City's assets and the accuracy of the fin; (2) 1 (3) (4) 1 record keeping system. I 7 (5) Budgetary control is maintained through monthly reports on all revenue and expenditure accounts as well as monthly reports summarizing the financial position of the City. The City Council has the authority to control the budget through adoption of a formal budget at the beginning of each year and by amending the budget as necessary through the year. Expenditures should not exceed budgeted figures. All appropriations expire at year-end unless specifically carried into the new fiscal year by Council action. The Carlsbad Municipal Code requires that the City Manager annually prepare a budget for the City Council with a message describing important features, and be responsible for its administration after adoption. Total City Operations The 1990’s have been a volatile time for the City of Carlsbad’s economic and budgeting strategies. The decade began strong with the City in good economic health bolstered by a very strong housing market. However, by 1992, the City was in the depths of one of the worst recessions since its incorporation. Property values plummeted, sales taxes dipped and development all but stopped. The State of California was in even worse shape and chose to balance their budget with cities’ and other agencies’ revenues. During this time, the State took over $2.5 million of annual revenues from Carlsbad’s General fund making the situation in Carlsbad even more difficult to manage. Beginning in 1994-95, the economy began expanding again bringing with it more jobs, more spending and more construction activity, especially in Carls bad. The pattern of slow growth and a struggling economy has changed over the past few years. The return of a stronger economy coupled with a pent-up demand for new homes and businesses has resulted in increased development activity. Property values have been increasing, sales taxes are rising and development is again progressing. City revenues for 1997-98 totaled $157.6 million, an increase of $24.2 million over last year’s total of $133.4 million. The major factors for the revenue gain are increased sales taxes, property taxes and transient occupancy taxes (TOT), the issuance of the Carlsbad Ranch Assessment District bonds, higher Community Facilities District (CFD) #I revenues, increased TransNet funding, and the receipt of grant funds from the Coastal Conservancy for floriculture preservation on the Carlsbad Ranch Flower Fields. During 1997-98, the City staff of over 800 full- and part-time employees provided a complete range of City services to the 73,700 residents and many businesses in Carlsbad. Spending on all City programs totaled $106.7 million, an increase of $13.2 million from 1996-97. As in the past, the biggest reason for this increase was the higher level of capital project spending. Other factors which contributed to the growth in expenditures were additional police staffing, a personal computer conversion program for the Safety Center, higher levels of development activities in the community development departments and one-time issuance costs related to the debt refinancing for the Hosp Grove bonds and the College Boulevard Assessment District. 8 Category Special Revenue Funds Capital Projects Funds Enterprise Funds'') Internal Service Funds'') TOTAL REVENUES General Fund Debt Service Funds a il 1997-98 over PC I 99 7-9 8 1996-97 (under) 1996-97 ct $55,995 $ 50,002 $5,993 1: 11,995 10,815 1,180 1 1,372 2,331 (959) (4 53,292 35,496 17,796 E 26,840 27,044 (204) ( $1 57,605 $1 33,426 $24,179 1 8,111 7,738 373 Category General Fund Special Revenue Funds Debt Service Funds Capital Projects Funds Enterprise Funds") Internal Service Funds(') TOTAL EXPENDITURES 1 1 1997-98 over P€ 1997-98 1996-97 (under) 1996-97 Ch 6,994 7,102 (1 08) ( 4,822 3,396 1,426 4 25,147 14,882 10,265 E 19,782 20,424 (642) ( 6,916 7,213 (297) ( $1 06,743 $93,580 $1 3,163 1 $43,082 $40,563 $231 9 Category Taxes Licenses & Permits State Subventions Fines & Forfeitures Investment Income Other TOTAL Charges for Services 1997-98 over Percent 1997-98 1996-97 (under) 1996-97 Change $35,822 $29,387 $6,435 21.9% 4,883 4,235 648 15.3 3,205 2,886 31 9 11.1 7,420 7,897 (477) (6.0) 33 1 318 13 4.1 1,590 1,158 432 37.3 2,744 4,121 (1,377) (33.4) $55,995 $50,002 $5,993 12.0% I I 1 I 1 I I E 1 1 1 I 1 1 1 I 3 1 11 Sales Tax Revenue - $14 8 million The City’s largest source of tax revenue, sales tax, had receipts of $14 8 million for fiscal year 1997-98, which was $2 3 million or 19% higher than last year The Carlsbad Company Stores, which opened in October 1997, are part of the reason for the significant increase over the prior year For the 1997-98 fiscal year, this shopping center, comprised mainly of apparel stores, contributed over $300,C new sales tax revenues to the City Next year is expected to be higher a businesses will have been open for the entire year Other significant increases from the prior year, based on the State Boa Equalization’s sales figures, occurred in the new auto sales, light industq apparel stores categories The three largest sales tax generating segments I City continue to be new auto sales, department stores, and restaurants Tog they generated over 50% of the City’s sales tax revenue for the year Property Tax Revenue - $12 4 million Property taxes are ad valorem taxes which are based on the property vali assessed by the County The tax is based on the annual assessed value Prc taxes are up 10% or $1 2 million over the prior fiscal year Growth in proper+ revenues is tie result of increases in the assessed values of real property and new development within the City According to the County Assessor, Car assessed values have increased 15% during the past year, which is one c largest increases in the County Transient Occupancy Tax Revenue - $6 0 million Transient occupancy taxes (TOT) or hotel taxes totaled $6 million, which is an increase of 65% or $2 4 million over the previous fiscal year The increase is mainly due to the opening of the Four Seasons Resort at Aviara as well as overall increases in room and occupancy rates d . . I 6 .- * c? Foun SEASO .X%A flfl</.%fi>< . Franchise Tax Revenue - $1 7 million Franchise taKes have been growing steadily over the years and show a 1 increase over last year’s receipts These taxes are generated from cable telev gas and electricity, and trash collection franchises The higher revenue: attributable to a scheduled franchise fee rate hike for trash collection that occurt the fourth quarter of the previous fiscal year, and increased cable television, gal electricity, and trash collection revenues . Business License Tax Revenue - $1.6 million Business license tax revenue showed 3 modest increase in 1997-98, with a 6.2% increase in revenue over last year’s receipts. Carlsbad issues licenses for approximately 5,600 businesses each year, which includes business that are located outside of the City. The number of new licenses for the year totaled 1,585, which is mainly comprised of home-based businesses, construction companies and the Carlsbad Company Stores. . Vehicle License Fee Revenue - $3.0 million Revenue from vehicle license fees increased $304,000 this year. Vehicle license fees (VLF) are paid to the State in lieu of a personal property tax on vehicles. The VLF is equal to 2% of a vehicle’s market value and is distributed to cities and counties based on total population. During the State budget process this year, cities and counties almost lost this significant source of revenue. The State declared a budget surplus and wanted to return some of the surplus to the citizen’s. One of the methods suggested was to abolish the VLF. Unfortunately, the VLF is a city and county revenue source and not a State source. Thus, the abolishment of the VLF would have cut city and county revenues, not the State’s which was the intention. After much debate, the State chose to give taxpayers a credit on their VLF beginning in 1999 which will increase if certain revenue goals are met by the State. They will replenish the revenue loss to the cities and counties with a continuous appropriation from the State General fund. A continuous appropriation does not require the annual reenactment by the Legislature. To terminate a continuous appropriation, the Legislature would have to take affirmative action to terminate the appropriation. In essence, the City will suffer no immediate revenue loss under this tax credit approach. Development Related Revenues - $7.0 million Revenue related to development decreased by $301,000 or 4.1% in 1997-98. Construction permits and building plan check fees reported large increases, while planning and engineering fees decreased during the year. In addition, license taxes on new construction are now recorded in the General Capital Construction fund, rather than the General fund which accounts for a decrease of $397,000. A total of 1,402 building permits were issued during 1997-98, compared to 873 in 1996-97. The City also issued permits for 2,585,000 square feet of commercial/industriaI space during 1997-98, compared to 1,615,000 square feet in . 1996-97. 12 I I 3 4 I 1 t I I n I I 1 I I I 1 1 Residential Units Trend 1985 to 1998 Rrmts lssued mcDr.aa0-Nm-rLoar.a wwwwwaaaaaaaaa Although building permits issued and building department revenues were at h levels in 19E17-98, there was a decline in engineering and planning depart revenues. Building plan check and inspection revenues at $1,394,000 $450,000 or 47 7% higher than the previous year. On the other hand, plannins engineering fees realized declines in revenues of 30.4% and 22.8% respective $501,000 and $686,000 less than the prior year. The reasons for the decline inc lower engineering fees which became effective in February 1998 and a decli the processing of the larger master plans. Some of the projects processed d the year included Carrillo Ranch, Aviara, The Meadowlands, Rancho V Poinsettia Hill, Poinsettia Shores, Carlsbad by the Sea, Ocean Bluff, Carl Spectrum, Legoland, Palmer Way Industrial Park and Laurel Tree Apartments. Other Charqes for Services - $2.6 million Ambulance fees increased by 30% due to continued collection efforts on delinc accounts and an increase in the fee. Weed abatement revenues rose substar due to the collection of delinquent accounts from prior fiscal years. Parks recreational lees continued to grow in 1997-98 with the increased deman recreational classes and use of park facilities. Investment Income - $1.6 million General fund revenue generated by the City's investments increased $432,000 1996-97, as 21 result of the maintenance of higher cash balances by the City, an application of Government Accounting Standards Board (GASB) #31. statement requires the City to value its investments at fair market value rather the book value. The City's investments were valued at $80,000 more than the value at June 30, 1998. This amount is required to be shown as investment inc This was the first year that this statement was in effect for the City. m . . 13 Category Policy and Leadership Group Administrative Services Public Safety Community Development Public Works Non-Departmental TOTAL Community Services 1997-98 over Percent 1996-97 (under) 1996-97 Change $ 2,018 $ 2,119 $ (101) (4.8)% 2,651 2,467 184 7.5 17,908 16,892 1,016 6.0 4,236 3,912 324 8.3 5,944 5,693 251 4.4 9,554 8,449 1,105 13.1 77 1 1,031 (260) (25.2) $43,082 $40,563 $231 9 6.2% 1997-98 t 8 I I I I I II 1 E 1 I I I I 1 I 8 office, office furniture of $25,000 was purchased. Another factor affectin! decrease in expenses was the vacancy of the Assistant to the City Manager PO for a portion of fiscal year 1997-98. Ad minist rat ive Services Administrative Services, which includes Finance, Purchasing and HI Resources departments, had an increase in expenditures in 1997-98 of $184 The majority of this increase is associated with the implementation costs (cons and training) of the new performance management and compensation pro initiated during the current fiscal year for management employees. Public Safety Spending on public safety programs totaled $17.9 million, up $1 million from ’ 97. Due to the continued growth in Carlsbad, the Police department addec sworn and two non-sworn staff during the year. These additions, combined additional vehicle replacement and maintenance charges, are the major caus the increase in police expenditures of $653,000. Fire protection expenditures fc year were up by $363,000, partially explained by the Macintosh to per computer coriversion that occurred within the public safety departments. 0 . 0 Community Development Community Development, which encompasses Geographic Information Sys (GIs), Economic Development, Land Use Planning, Building Inspection Community C)evelopment Administration, had expenditures of $4.2 million for year 1997-98, an increase of $324,000. This increase in expenditures can be ti to higher miscellaneous professional services in the building and planning a These expenditures support special studies and the increased workload assoc with the issuing of building permits. Com m u n it y Services Community :services consists of the Library, Cultural Arts, Recreation, Planning, and Senior Citizen programs. This group had total expenditures of million for the year, an increase of $251,000. The majority of this increase wi Library services including a new public service information desk and public ac to the Internet. In addition, the Library had to rely on greater support fron General fund this year as other funding sources are dwindling. Recre instructional (classes also showed increases directly related to higher deman recreational services. . 0 Public Works Engineering, Parks Maintenance, Streets and Facilities, Building Mainten; Traffic Sign Maintenance and Public Works Administration comprise the F Works major service area. Total expenditures in 1997-98 for Public Works tc $9.6 million, an increase of $1.1 million over 1996-97 expenses. Programs affc the increased expenditure level in 1997-98 included engineering inspections plan checks, outside services for street maintenance projects, maintenance I 15 Category Taxes Intergovernmental Charges for Services Investment Income Property Owner Contr. Donations Other TOTAL 1997-98 over Percent 1997-98 1996-97 (under) 1996-97 Change $ 1,603 $1,522 $ 81 5.3% 4,909 4,031 878 21.8 73 91 (18) (1 9.8) 1,252 71 7 535 74.6 3,126 2,602 524 20.1 21 8 195 23 11.8 814 1,657 (843) (50.9) $1 1,995 $1 0,815 $1,180 10.9% Categoly Public Safety Community Development Community Services 1 I TOTAL Public Works 1997-98 over Pe 1997-98 1996-97 (under) 1996-97 Ch $ 723 $ 518 $ 205 31 3,659 3,695 (36) (’ 729 662 67 I( 1,883 2,227 (344) (It $6,994 $7,102 $ (108) (1 Category Taxes Investment Income M iscel I aneous Total 1997-98 over Percent 1997-98 1996-97 (under) 1996-97 Change $1,214 $1,756 $(542) (30.9)% 158 302 (144) (47.7) 0 273 (273) (100.0) $1,372 $2,331 $(959) (41. I)% Category General Government Principal Interest and Fiscal Charges Miscellaneous TOTAL 1997-98 over Percent 1997-98 1996-97 (under) 1996-97 Change $ 15 $ 19 s (4) (21.1)% 1,663 992 671 67.6 2,004 2,385 (381) (1 6.0) 1,140 0 1,140 100.0 $4,822 $3,396 $1,426 42.0 % Category Taxes Intergovernmental I I I Charges for Services Property Owner Contrib. Proceeds of Non-Govt. Cebt Investment and Other TOTAL 1997-98 over P& 1997-98 1996-97 (under) 1996-97 Ch $1 2,742 $ 8,846 $ 3,896 4 12,048 7,167 4,881 6 13,484 15,451 (1,967) (1 9,252 0 9,252 10 5,645 3,915 1,730 4 $53,292 $35,496 $1 7,796 5 121 117 4 Spending on capital projects totaled $23 9 million, an increase of 76 % from 1996-97 With the City’s continued development, the need to ensure that facilities are available to service the developing areas as well as the current residents IS paramount. Spending on capital projects continues to increase enabling the City to meet and/or exceed the needs of its citizens and the standards prescribed in the City’s Growth Management Plan. Projects planned for 1998-99 continue this trend with $74 million of new capital projects budgeted in the upcoming year. The City Council continues to set a high priority on the construction of quality infrastructure improvements. Ca pita I Project Ex pe ndi tu res Versus Residential Permits Issued 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Capital Expend -.+- Perrrnts Issued The City has historically matched capital project spending with the residential development occurring within the City, ensuring that the necessary infrastructure is in place for new Carlsbad residents. One year that appears to have not followed this trend was 1991; the year when the City acquired Alga Road and certain improvements along the road within the Alga Road Assessment District. Some of the key capital projects under construction or completed during this year include: South Carlsbad Library - Construction of the South Carlsbad Library began this year, s District No. 1 (CFD #I). The library is scheduled to open in Spring/Summer of 1999. The Cole Library is scheduled to close and undergo extensive remodeling upon the completion and opening of the new Library 20 1 I 1 I I 1 I 1; s I I 4 1 If I 1 1 u 8 21 Freeway Interchanqes - Expansion of Interstate 5 freeway interchange: providing improved circulation at critical connection points to City streets. Palomar Airport Road/l-5 interchange, built in cooperation with the transportatiori agency (CALTRANS), was completed in 1993. The Poin Avenue interchange began construction during 1994-95 and was completed in 1996. The La Costa Avenue interchange was completed during the 1997-98 year, leaving the Cannon Road freeway interchange as the remaining interch project to be icompleted. The Cannon Road freeway interchange construction t: in 1998, so tblat anticipated traffic demands at Carlsbad Ranch can be met. . Street Improvements - Improvements to streets, highways, sidewalks, and i signals continues in the City of Carlsbad. Significant progress continues 01 traffic circulation projects in response to and in anticipation of current and f development within the City. The Olivenhain Road and La Costa Avenue widc projects are currently under construction. Other major circulation projects i construction include Cannon Road West, and Poinsettia Lane-Aviara Parkway. Carlsbad Raim - The City formed the Carlsbad Ranch Assessment District and acquired certain capital improvements within this area of Carlsbad during the fiscal year. This area is bordered by Cannon Road, Palomar Airport Road, Armada Drive and Leg0 Drive, and includes street improvements, street lighting, landscaping utilities and underground improvements (water, storm drain, $'ewer, reclaimed water, and undergroundigg of existing electric facilities) and a pedestrian walkway. Transit Station Specialtv Commercial Center - The Redevelopment Ag purchased property in November 1997 for the purposes of facilitating f commercial development. The site is known as the Bauer Lumber Building a adjacent to the Village Commuter Rail Station. In the interim, the building w leased to a private business for the purposes of operating a retail furniture store the plans can be fully developed to complete the desired redevelopment projed . Pavement Management Program - The Pavement Management Program i ongoing annual program designed to extend the service life of City streets at maintain a smooth and safe driving surface for vehicles. For purposes o program, the City is divided into four quadrants using El Camino Real and Pall Airport Road as the dividing lines. During each fiscal year, all of the streets v one of the quadrants are reviewed by City staff to determine pavement manage needs for the purpose of establishing which streets are to be oil sealed, chi sealed, overlaid or reconstructed. Category CMWD Golf Course Sewer Solid Waste TOTAL 1997-98 over Percent 1997-98 1996-97 (under) 1996-97 Change $18,357 $1 8,912 $(555) (2.9)% 265.8 289 79 21 0 7,532 6,774 758 11.2 662 1,279 (61 7) (48.2) $26,840 $27,044 $(204) (0.8)% Category CMWD Golf Course Sewer Solid Waste TOTAL 9 I 1997-98 over Pe 1997-98 1996-97 (under) 1996-97 Ch $1 5,162 $1 5,431 $ (269) (1 216 253 (37) (If 4,294 4,606 (31 2) (t 110 134 (24) (17 $1 9,782 $20,424 $ (642) (f Category Health Insurance Information Systems Risk Management Workers’ Compensation TOTAL Fleet Management 1997-98 over Percent 1997-98 1996-97 (under) 1996-97 Change $2,826 $2,694 $1 32 4.9% 1,972 2,004 (32) (1.6) 1,378 1,238 140 11.3 1,102 1,085 17 1.6 833 71 8 115 16.0 $8,111 $7,739 $372 4.8% Category Fleet Management Health Insurance Information Systems Risk Management Workers’ Compensation TOTAL 1997-98 over Percent I 9 9 7-9 8 1996-97 (under) 1996-97 Change $2,119 $2,211 $ (92) (4.2)% 2,286 2,170 116 5.4 1,271 1,173 98 8.4 668 875 (207) (23.7) 572 784 (2 12) (27.0) $6,916 $7,213 $(297) (4. I)% 11 1 8 8 I f 1 U il 1 I u I I I D I Workers' compensation claims expense for 1997-98 amounted to $486,000 comparl $706,000 in 1996-97. Claims expense also includes all costs incurred by the City's third administrator. The decrease in claims expense was caused by two factors. First, the num claims filed in 1997-98 was lower than 1996-97 by approximately 10%. In addition, the se of the claims in 1997-98 were also lower than that of the previous year. Workers' compen: estimated claims payable at year-end was $697,000, an decrease of $66,000 from 199f Working capital at June 30, 1998 is $1.3 million. The City also operates a health insurance Internal Service fund for collecting premiums, p claims, premiums and administrative costs, and holding reserve funds. Revenues are gene by charging departments their estimated health insurance costs during the year base estimated expenditures. For fiscal year 1997-98, the health insurance Internal Service incurred an operating loss of $337,000. Other Internal Service FL- Fleet Management operates a central vehicle maintenance program which services al vehicles and other small machinery. Replacement of vehicles, including fire equipment, important component of the program. The City's current policy for funding the replacemc fleet equipment is to set aside a certain amount of money each year in a replacement fu ensure that there will be sufficient funds available when the equipment needs to be repl, Useful lives of vehicles have been extended over recent years as a cost savings mea5 Vehicle purchases totaled $1 million, $200,000 less than the previous year. Fleet Manage annual expenses during 1997-98 were $2.1 million, and at year-end working capital was million which is earmarked for vehicle replacement. The City's Information Systems Internal Service fund collects revenues and expenses relat the providing of information system services to the City. At year-end, working capital incre I to $955,000. Aqency Funds The City uses Agency funds to account for assets held by the City for other individuals, er or governments. Typically these funds relate to contractors' cash performance bc assessment district reserved funds, employee and employer payroll tax withholding accour employee deferred compensation accounts. The City held a total of $17.6 million in Agency funds as of June 30, 1998, compared to ! million at the end of 1996-97. The increase is due to the addition of the Carlsbad R Assessment District reserve and redemption funds. 1 25 Cash Management City Council, with the advice of the City Treasurer, annually adopts a comprehensive investment policy specifying, among other things, investment objectives and strategy; type and term of investments; reporting requirements; and investment oversight. The City Treasurer is charged with the design of an effective cash management and investment program consistent with the California Government Code, the Carlsbad Municipal Code, and the Carlsbad Investment Policy. Among other activities, this includes arranging for banking services; forecasting cash receipts and expenditures; investing all inactive cash; and reporting investment activities. investments are made either as pooled investments or as investments held separately. Pooled investments are made and managed internally by the City Treasurer, and include the inactive cash of agencies controlled by the City and the various funds of those agencies. Cash is received into the pool without regard to the agency or fund from which it originated. At the end of fiscal year 1997-98, total assets in the pooled investments were $254 million. This represented an increase of $56.6 million, or 28.7% from fiscal year 1996-97. Of this increase, $614,000 was due to the application of Government Accounting Standards Board (GASB) #31, which requires the investment pool to be stated at fair market value rather than book value. The investments in the Treasurer’s Pool earned approximately $12.8 million in interest, which was an increase from $9.8 million earned in the previous fiscal year. The average yield of the pooled investments for fiscal year 1997-98 increased to 5.89% from 5.77% in fiscal year 1996-97. Investments held separately are managed by the Finance Director and generally include bond proceeds, employee contributions to deferred compensation plans, and other funds which are individually invested. Total assets of investments held separately were $1 2.4 million at the end of fiscal year 1997-98. 26 Treasurer's Pooled Investments Cash and Deposits Fed e ral Agency 0 bl ig a ti ons Treasury Notes Corporate Notes Commercial Paper Investment Pool (LAIF) SUBTOTAL Investments Held Separal'ely Cash and Deposits Federal Agency Obligations Mutual Funds Guaranteed Investment Contracts SUBTOTAL TOTAL I 1 1 1 U Investment Pool (LAIF) Amount Investec Interest Rates (Million $) 4.88 - 5.74 $ 3.0 3.48 - 7.26 104.7 4.75 - 6.75 17.3 5.13 - 9.50 74.8 5.69 - 5.93 13.7 5.83 - 5.91 40.5 $254.0 0.00 - 3.30 $ .3 4.95 - 5.55 2.9 - 3.6 5.54 - 9.12 3.5 5.83 - 5.91 2.1 !$ 12.4 $266.4 Economic Outlook When Carlsbad initially emerged from the recessior? of the early 199O’s, revenues related to the building industry lead the way. During 1997-98, economic recovery continued in Carlsbad with expansion of its tax base, as well as continued growth in development. The increase in revenues mirrors the strong local economy. Sales tax, property tax and transient occupancy tax (TOT) revenues lead the increase in revenues in 1997-98. We foresee this strong showing to continue into the next fiscal year. Demand for North San Diego County industrial, office and research and development space is at its highest level in more than seven years. Speculative building in the late 1980’s and early 1990’s created an over supply of space that drove vacancy rates in excess of 20 percent. Companies moving to Carlsbad and the North County did so because office lease space was 10 to 20 percent lower than other more extensively developed metropolitan areas. As a result of high supply and low rental rates, development of new office and business parks virtually stopped until 1995. Today, North County’s real estate market is in the midst of a major reversal and North San Diego County is quickly approaching a severe shortage of land for further industrial and office development. Although San Diego County has faced shortages of industrially zoned land in the past, there had always been industrial parks and commercial business center projects in process. Today’s shortages of land comes at a time when demand appears to be at its highest level in many years. Commercial and industrial real estate development demand is driven by the needs of companies to house their employees and products. New capital and profits finance corporate growth, and currently, there are hundreds of millions of dollars being invested in North County companies via venture capitalists, public offerings and private financings. These investments create jobs and products, which increase demand for commercial space. Carlsbad continues to be a strong magnet for specific industries including tourism, golf, communications and biotechnology. As many of Carlsbad’s biotech and communications companies begin to bring new products to market, we should see a new surge in growth. The effect of new demand and diminishing supply of industrial and commercially zoned property will result in higher land values and rental rates in Carlsbad, and throughout the County. As quoted in the San Diego Daily Transcript, “Carlsbad and Vista both are being viewed right now as the land of opportunity, particularly for build-to-suits. Land prices here have doubled in the last year, from $6 to $12 per square foot, and values will likely continue upward.”’ = Contributing to the much-needed tax base to finance the City’s growing service needs is the current and planned development in the Carlsbad Ranch project. Adding to the already existing Gemological Institute of America which moved its headquarters to Carlsbad Ranch during 1996, and the National Association of Music Merchants headquarters, newly-relocated occupants include Denso America, a wireless technology and automotive satellite navigational developer ’ “Carlsbad Coming of Age”, Snrz Dieyo Daily Tmn ipf, June 18, 1998, p. 2. 28 I 8 I 1 1 I I i I I I I I I I Gemological Institute of America which moved its headquarters to Carlsbad Ranch during and the National Association of Music Merchants headquarters, newly-relocated occu include Denso America, a wireless technology and automotive satellite navigational devc and Natural Alternative International, a vitamin supplement supplier In October 199; Carlsbad Company Stores opened, North County’s newest design outlet mall This up shoppers’ haven features 52 stores, comprised mainly of high-end, designer apparel store a micro-winery. The largest anticipated Carlsbad Ranch project is the future Legoland * theme park potential developments in Carlsbad Ranch include the Pan Pacific Resort and timeshar community hotel, the Carlsbad Municipal Golf Course, and a research and develor business park. Tourism is one of Carlsbad’s fastest growing business segments, and a growing sour income to the City’s General fund The City recognizes the importance of its tourist inc through its financial supp the Convention and Vi Bureau and the a appropriation of funds to the state beach parkinc to all beach users. A I boost to the tourism inc occurred in the current with the opening of the Seasons Resort at Aviz four-diamond resort hot€ timeshare Construction has begun on several resort and time! properties in the including the Pan P Resort and timeshares in Carlsbad Ranch, the Marriott Courtyard near the McClellan-Pal Airport, the Marriott Residence Inn in the Carlsbad Research Center, and the Hilton Gardei the coast. It is anticipated that these new resorts will significantly boost the City’s trar occupancy tax and sales tax collections in future years The City’s Growth Management Program holds the key to the timing of many of the dev ments The program was established by a vote of the citizens in 1986 and is designed to et that new development occurs in conjunction with careful planning of infrastructure and SE needs Under the Growth Management Program, development occurs only when infrastru improvements required to serve the development are financed and constructed as a part ( development. Capital projects are phased to closely match incremental growth dem, Standards have been established in eleven areas including circulation, City administr, schools, libraries, fire prctection, parks, drainage, water, sewers, and open space. As a result of the Growth Management Program, fee programs are in place in ensure that 1 are available to pay for public facilities as they are needed An outgrowth of the GI This attraction will add to Carlsbad’s reputation as a destination resort I I I 4 29 Management Program is the long-range Capital Improvement Program (CIP) which covers the current year through buildout of the City. The CIP anticipates future residential growth at over 1,000 units per year and annual commerciahdustrial development between 500,000 and 1.3 million square feet per year. With this level of growth, Carlsbad expects to construct between $10 and $74 million in improvements every year including new parks, libraries, streets, traffic signals, water and sewer lines, and other facilities. This aggressive construction program can place a burden on the operating budget which must be managed through careful scheduling to match demands with resources. Uncontrolled demand could easily outpace the City's ability to pay for services. Through careful planning and prudent financial management, Carlsbad has weathered the volatile 199O's, and is now positioned to enter the 21" century in strong financial health. Carlsbad is focused on achieving its mission of providing fop qualify services to our citizens and customers in a manner that enhances the quality of life for all who live, work and play in Carlsbad. Certificate of Award for Outstanding Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Carlsbad for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 1997. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. The CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period on one year only. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA. In addition to the GFOA award, the California Society of Municipal Finance Officers (CSMFO) presented a Certificate of Award for Outstanding Financial Reporting to the City of Carlsbad for its comprehensive annual financial report for the fiscal year ended June 30, 1997. We believe our current report continues to conform to the program requirements. 30 1 8 B B 1 1 I I R I II 1 i 1 I I 1 Acknowledgments This report has been a joint effort by many people from many different areas of respons The dedicated efforts of Kevin Branca, Assistant Finance Director, and all of the accoi staff, deserve full credit lor the preparation and contents of this report We appreciate Mil Kepner of Conrad & Associates for the professional way in which the audit of this financial was conducted It has been a pleasure to work with the Conrad & Associates staff throu this period U Respectfully submitted, Cc1 i/< / . x_ ------ x L LISA HILDABRAND Finance Director I 31 32 1 I Certificate of I I Achievement for Excellence in Financial I I Reporting I City of Carlsbad, I I I: 1 1 I 1 I I I I 33 I Presented to California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 1997 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. (-7 &iG$qG dfR President Qg&f :Q w )*%@ Executive Director Certificate of Award Outstanding Financial Reporting 1996-97 Presented to the City of Cudsbud Tlrir cenrficare is ,,cued irr re<opnirion o/mserrn~ pro/ec.croirol crondurds and criteria in reporfrnK wlzich r~~lcrt a high /eve/ of quulin in the annuol/inuncial .stmemenis ond in rlre urrderl~rrr~ ocruuntrnf rurem/rom which the reports were prepared. Febrrrav 23, 1998 Chair. Profruiond & Tcchntcsl ShndarUT~miiicc Dediicnted to Exce .r 34 1 1 I 8 1 II 1 I 1 1 I I 1 I 1 I I I PEN DLETON OCEANSlDl ESCON Dl DO RAMONA '5OLANA BEACH CORONADO IMPERIAL BEACH L TIJUANA I 35 CITY OF CARLSBAD ELECTED CITY OFFICIALS Claude A. Lewis, Mayor Ramona Finnila, Mayor Pro Tem Julianne Nygaard, Cauncil Member Ann J. Kulchin, Council Member Matt Hall, Council Member Aletha L. Rautenkranz, City ClerWlnformation Systems Director James M. Stanton, City Treasurer ADMINISTRATION AND DEPARTMENT HEADS Raymond R. Patchett, City Manager Frank Mannen, Assistant City Manager James F. Elliott, Administrative Services Director Lloyd Hubbs, Public Works Director Martin Orenyak, Community Development Director Robert Vales, Police Chief Dennis Van Der Maaten, Fire Chief Ron Ball, City Attorney Ann Cheverton, Human Resources Director Ruth Fletcher, Purchasing Officer Debbie Fountain, Housing & Redevelopment Director Robert J. Greaney, Water Department General Manager Lisa Hildabrand, Finance Director Michael Holzmiller, Planning Director Pat Kelley, Principal Building Inspector Clifford Lange, Library Director Erin Letsch, Risk Manager Ken Price, Parks & Recreation Planning Manager CHAIRPERSONS, COMMlSSlONS AND BOARDS Arthur Wood Arts Commission Donald E. Jackson Robert Turner Community Television Foundation Bill Compas Design Review Board Gordon Bizieff Historic Preservation Commission Kathleen We I I m an Housing Commission Claude A. Lewis Housing and Redevelopment Commission Thomas Curtin Library Board of Trustees Julie Baker Parks and Recreation Commission James Page Personnel Board Bailey Noble Planning Commission James Whittaker Senior Commission Ann L’Heureux Bill Dominguez Sister City Committee Thomas Blake Traffic Safety Commission Lance Schulte Beach Erosion Committee Serra Cooperative Library System Advisory Board Underground Utility Advisory Committee 36 I I [1 1 1 I I I 1 I I I I &#&&oe+fk LL./ 1 CERTIFIED PUBLIC ACCOUb 11 00 MAIN STREEl IRVINE, CALIFORb (949) Fax (9491 CONRAD A PAR TN E R S H, P I NC LU D, N G PR 0 F ES 5 I ON A L C 0 R PO9 AT IO N S R %?$ssxmKrr,s, 1>.1,.1? The Honorable Members af City Council City of Carlsbad, California INDEPENDENT AUDITORS' REPORT We have audited the accompanying general purpose financial statements of the City of Carl: California as of and for the year ended June 30, 1998, as listed in the table of contents. T general purpose financial statements are the responsibility of the management of the Cit Carlsbad, California. Our responsibility is to express an opinion on these general pur financial statements based. on our audit. We conducted our audit in accordance with generally accepted auditing standards Government Auditing Staiidards, issued by the Comptroller General of the United States; anc provisions of Office of Management and Budget (OMB) Circular A-1 33 entitled Audits of St Local Governments and Non-Profit Organizations. Those standards and OMB Circular A require that we plan and perform the audit tc obtain reasonable assurance about whethei general purpose financial statements are free of material misstatement. An audit incl examining, on a test basis, evidence supporting the amounts and disclosures in the gel purpose financial statements. An audit also includes assessing the accounting principles and significant estimates made by management, as well as evaluating the overall final statement presentation. MJe believe that our audit provides a reasonable basis for our opinion In our opinion, the general purpose financial statements referred to above present fairly, i material respects, the financial position of the City of Carlsbad, California as of June 30, 1 and the results of its operations and the cash flows of its proprietary fund types for the year ended in conformity with generally accepted accounting principles. During the year ended June 30, 1998, the City implemented GASB Statement No. 31 u changed the manner in which the City accounts for investments, as discussed further in note I I the financial statements. Our audit was made for the purpose of forming an opinion on the general purpose fina: statements taken as a whole. The combining, individual funds, and individual account g financial statements and :schedules listed in the table of contents are presented for purpost additional analysis and are not a required part of the general purpose financial statements o City of Carlsbad, California. Such information has been subjected to the auditing procec applied in the audit of the general purpose financial statements and, in our opinion, is f stated in all material respects in relation to the general purpose financial statements taken whole. The scope of our audit did not include the supplemental statistical schedules listed ii table of contents and we c:o not express an opinion on them. In accordance with Government A uditizg Stmzdards issued by the Comptroller General o United States, we have also issued a report dated September 25, 1998 on our consideration o City's internal control structure and a report dated September 25, 1998 on its compliance laws and regulations. 1 September 25, 1998 39 MEMBERS OF AICPA AND CALIFORNIA SCC!ETY OF CERTIFIED PUBLiC ACCOUNTANTS MEMBER OF AMERICAU INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION I CITY OF CARLSBAD Combined Balance Sheet - All Fund Types and Account Groups June30, 1998 Governmental Fund Types Special Debt Capita General Revenue Service Projec Assets and Other Debits Assets: Cash and investments (note 3) $33,083,542 19,985,758 1,901,537 109,424, Deferred compensation investments (notes 3 and 22) - - - Receivables : Loans - 2,615,501 - Taxes 2,594,555 27,273 43,827 190: Accounts, net 72,710 33,780 647, 15,981 3 0, Other Accrued interest Due from other funds (note 4) 430,102 - - 420, Due from other governments 1,918 492,744 907 Advances to other funds (note 5) 15,679,j 18 - 750, Prepaid expenditures 21,731 185,084 - 207, 106>836 - Inventory 22,842 Restricted assets: Fixed assets, net (note 6 and 7) Amount available in debt service finds Amount to be provided for retirement of general long-term debt - Cash and, investments (note 3) Accrued interest - - - - Other debits: Total assets and other debits $52,013,754 23,340,140 1,961,345 11 1,761, Liabilities. Equity and Other Credits Liabilities: Accrued liabilities $ 3,887,802 53 1,257 - 1,653, Accrued interest ayable - - 321,143 - 528, - 3,300, Advances from other funds (notes 5 and 10) Due to other governments - 3 19,177 - Estimated claims payable (note 17) - Due to bondholders - - Current portion of long-term debt (note 10) - - De osits payable 6,797 De erred compensation ayable (note 22) Current liabilities payab e from Deferred revenue 6,274,986 500 368, Long-term debt payable (notes 8, 9, 10 and 26) Due to other fun 1 s (note 4) P r! - restricted assets - accrued interest - Total liabilities 10:169,585 1,172,077 - 5,850, Investment in general fixed assets - - - Contributed capital (note 15) - - Fund balances: 10,346,471 7,152,549 1,528,500 18,574, 1' 31,497,698 15,015,5 14 432,845 87,335, Reserved (note 13 Unreserved (note 3) Retained earnings: Reserved (note 13 Unreserved (note 3) Equity and Other Credits: 1 Total equity and othcr credits 41,844,169 22,168,063 1,961,345 105,910, Total liabilities. equity and other credits $52:013.754 23,340,140 1,961,345 11 1,761, See accompanying notes to general purpose financial statements. 40 II I 1 I I I i 1 c 6 I U I E Y I I c Fiduciary Proprietary Fund Types Fund Type Account Groups General General Internal Fixed Lon -Term Totals Enterprise Service Agency Assets 8ebt (Memo randun - - 72,13 1,935 10,594,709 14,000,876 - - 26 1,122,C 3,600,462 3,600,' - - - 2,6 15,: 45,947 12,239 - 2,9 14,' 3,303,920 6,45 1 - 4,064,C - 106,$ - 26,58 1 72,; 187,357 - 1,037,L 943 10 - 679,; - - 16,429,: 235,175 84,834 - - 342,r 199,675 - - 614, 1,6993 14 - - 1,699,; 35,324 - - 35,: - - - - 1,96 1,345 1,96 1,: - - 33,040,033 33,040,( - 117,822,883 4, 8 8 3,795 73,956,711 196,663,: 195,556,865 15,769,464 17,640,158 73,956,711 35,001,378 527,000,1 2,708,445 26 1,942 - 9,042:' 187,357 - 1,037,) 3,634 - - 322,; 32,000 1,258,190 - 1,290, 6,367,334 - - 6,367,: 2,214,603 - - 2,2 14,i 1,496,878 6,351,258 - - 7,855,: - - 3,600,462 - 3,600,~ 3 13,542 - - 3 13; 2,070,778 - 8,714, - 100,5 17, - 73,956,711 - 73,956, 109,173,9 13 7,406,36 1 - 116,580, - 37,60 1 ~ - - - 134,281: 1,682,67 1 199,675 - 1,882: - 62,179, 1,32 1,104 1,321, 2,737,200 10,392,318 16,429,: 17,399,254 - 24,609,060 42,008, 29,163,691 1,520,132 - 17,640,158 35,001,378 55,536,590 6,643,296 - 166,393,174 14,249,332 - 73,956:7 1 1 426,483: 195:556:865 15,769,464 - 17,640,158 73,956,711 35,001:378 527,000, - I 41 42 CITY OF CARLSBAD Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types Year Ended June 30, 1998 1 il t a I I I I 1 I 1 1 t I I I I 43 Special Debt Capital I General Revenue Service Projects (Me1 Revenues: Taxes $35,822,300 1,602,828 1,2 13,904 12,74 1,545 Licenses and permits 4,883,257 Intergovernmental 134,103 4,908,825 12,048,2 12 State subventions 3,204,5 12 Charges for services 7,420,147 73,494 12 1,261 Fines and forfeits 33 1,3 18 Investment income 1,589,46 1 1,25 1,484 157,765 5,633,55 I Interdepartmental services 1,919,341 Contributions from property owners 3,125,902 13,483,884 Donations 2,000 2 18,04 1 Proceeds of debt without government commitment 9,252,162 - Miscellaneous 688,363 8 13,949 1 1,550 - Total revenues 55,994,802 1 1,994,523 1,37 1,669 53,292,165 Expenditures: Current: General government 5,440,379 14,996 1,292,979 Public safety 17,907,75 1 723,29 1 Community development 4,235,509 3,659,027 Community services 5,943,972 728,838 Public works 9,554,095 1,883,006 Capital outlay 23,854,209 Debt service: Principal retirement 1,663,394 Interest and fiscal charges 2,004,472 Debt issuance costs 248,733 Miscellaneous 890,629 - - Total expenditures 43,08 1,706 6,994,162 4,822,224 25,147, I88 Excess (deficiency) of revenues 1 over (under) expenditures 12,9 13,096 5,000,361 (3,450,555) 28,144,977 - Other financing sources (uses): Operating transfers in 7,509 236,447 800,000 l,025,000 Operating transfers out (1,585,521) (16,956) (360,000) (135,000) Proceeds of advances 579,462 (6,486,35 I) Payment to refunded bond escrow agent Proceeds of refunding bonds 6,486,35 1 Total other financing sources (uses) ( 1,578,O 12) 219,491 1 ,O 19,462 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 11,335,084 5,2 19,852 (2,43 1,093) 29,034,977 Fund balances at beginning of year 30,995,505 16,948,236 4,392,438 76,878,860 Residual equity transfers in (note 16) Residual equity transfers out (note 16) Fund balances at end of year S 4 1,844,169 22,168,063 1,96 1,345 105,9 10,282 - - 890,000 3,580 (25) (3,555) - (490,000) - - See accompanying notes to general purpose financial statements. CITY OF CARLSBAD Combined Statement of Revenues. Expenditures and Changes in Fund Balances - Budget and Actual (Budgetary Basis) - All Governmental Fund Types Year Ended June 30, 1998 General Fund Special Revenue Funds Actual on Variance- Actual on Vari; Budgetary Over Budgetary 01 Budget Basis (Vn Taxes $ 34,070,000 35,822,300 1,752,300 1,580,000 1,602,828 2 Licenses and permits 4,5 12,000 4.883,257 37 1,257 Intergovernmental 134, IO3 134,103 3,872,898 4,908,825 1,03 State subventions 3,005,000 3,204,512 199,512 Charges for services 7,39 1,000 7,420,147 29, I47 73,500 73,494 Fines and forfeits 434,000 33 1,3 18 (1 02,682) Investment income 1,425,000 1 ,589,46 1 164,46 1 92 1,048 1,25 1,484 33 Interdepartmental services 1,650,000 1,9 19,34 1 269,34 1 Contributions from property owners 2,437,000 3,125,902 68 Donations 2,000 2,000 228,700 2 18,04 1 (1' Miscellaneous 529,000 68 8,3 63 159,363 3 13,600 8 13,949 501 Budget Basis (Under) Revenues: Total revenues 53,O 16,000 55,994,802 2,978,802 9,426,746 I 1,994,523 2,56' Expenditures: Current: General government 7,125,083 5,916,012 (1,209,071) Public safety 18,128,054 17,951,901 (176,153) I, 173,187 87 1,388 (3 0 Community development 4,634,5 15 4,182,782 (45 1,733) 4,800,55 1 3,764,035 (1,031 Community services 6,2 10,27 1 6,004,350 (205,92 1) 1,083,007 803,710 (27' Public works 10,122.608 9,941,030 (181,578) 3,195,375 I ,92 1,86 1 (1,27: Principal retirement Interest and fiscal charges Debt service: Total expenditures 46,22033 1 43,996,075 (2,224,456) 10,252, I20 7,360,994 (2,89 Excess (deficiency) of revenues over (under) expenditures 6,795,469 1 1,998,727 5,203,258 (825,374) 4,633,529 5,451 Other financing sources (uses): Operating transfers in 7,509 7,509 236,447 236,447 Operating transfers out (1,583,521) (1,585,521) (2,000) (16,956) (1 6.956) Proceeds of advances Total other financing sources (uses) (1383,521) (1,578,012) 5,509 219,491 219,491 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 5.2 1 1,948 10,420,7 I5 5,208,767 (605,883) 4,853,020 5,458 Fund balances at beginning of year 30,995,505 30,995,505 16.948,236 16,948,236 Residual equity transfers in 3,580 3,580 Residual equity transfers out (490,000) (490,000) (25) Fund balances at end of year $ 35,717,453 40,929,800 5,212,347 16,342,353 21,801,231 5,458 See accompanying notes to general purpose financial statements. 44 I I U 1 Budget I I' I I II Totals Debt Service Funds (Memorandum Only) Actual on Variance- Actual on Varian Budgetary Over Budgetary Ovei Basis (Under) Budget Basis (Unde 1,208,387 8,387 36,850,000 38,633,5 15 1,78 4,5 12,000 4,883,257 37 3,872,898 5,042,928 1,17 3,005,000 3,204,5 12 19 7,464,500 7,493,64 1 2 434,000 33 1,3 18 (10 I00,000 64.563 (3 5,43 7) 2,446,048 2.905,508 45 1,200,000 1,650,000 1,919,341 26 2,437,000 3,125,902 68 228,700 220,04 1 ( 842,600 1,502,3 12 65 1 1.3o;ooo 1,272,950 - (2 7,05 0) 63,742,746 69,262,275 5,5 1 - 18,000 14,996 (3,004) 7,143,083 $93 1,008 (121 l9,301,24 1 18,823,289 (47 9,435,066 7,946,s 17 (1,48 7,293,278 6,808,060 (4 j 13,317,983 1 I ,862,89 1 (1,4t ' 288:394 288,394 288,394 288,394 1,383,868 1,376,lO 1 (7,767) 1,383,868 1,376,lO 1 6 1,690,262 1,679,49 1 (1 0,77 I) 58,162,913 53,036,560 (5,1: I (390,262) (406,541) (16,279) 5,579,833 16,225,7 15 10,61 1 (360000) (360,000) (1,960,477) (1,962,477) 236,447 243,956 579,462 579,462 579,462 5' I (360,000) 2 19,462 579,462 (1,724,030) (I, 139,059) 5: 1 1E 1 5831649 I, 146,832 563, I83 52,643,455 63,877,863 11,2 1 45 (750,262) (1 87,079) 563,183 3,855,803 15,086,656 11,2 1,333,91 1 1,333,911 49,277,652 49,277,652 - 3,580 (490,000) (490,025) CITY OF CARLSBAD Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Tj,pes Year Ended June 30, 1998 Internal Totals Enterprise Service (Memorandum On1 Operating revenues: Water sales $ 14,294,984 14,294,984 Sewer services charges 5,3 19,220 5,3 19,220 Other charges for services 1,405,237 7,04 1,498 8,446,73 5 Contributions from other government agencies 57 1,290 57 1,290 Miscellaneous 400,363 395,427 795,790 Total operating revenues 2 1,99 1,094 7,436,925 29,428,O 19 Operating expenses: Plant operations 1,300,920 1,300,920 Purchased water 8,7 19,738 8,719,738 Depreciation 2,484,595 1,055,497 3,540,092 Fuel and supplies 322,885 322,885 Claims expense 3,396,402 3,396,402 General and administrative 6,046,7 15 2,14 1,242 8,187,957 Total operating expenses 18,55 1,968 6,9 16,026 2 5,467,994 Operating income (loss) 3,439,126 520.899 3.960,025 Nonoperating revenues (expenses): Investment income 3,988,925 61 1,976 4,600,90 1 Interest expense and fees (I, 159,774) (I, 159,774) Gain (loss) on sale of property (38,l 19) 34,108 (450 1 1) Property taxes 860,l 12 860,112 Amortization of issuance costs (3 2.243) (32,243) Total nonoperating revenues (expenses) 3.6 18,90 1 646,084 4,264,985 Income (loss) before operating transfers 7,058,027 1,166,983 8,225,O IO Operating transfers in 28,52 1 28,52 1 7,058,027 1 ,I 95,504 8,253.53 1 Retained earnings at beginning of ].ear 50,16 1,234 5,647,467 55,808,701 Retained earnings at end of year $ 57,219,261 6,842.97 1 64,062,232 Net income (loss) See accompanying notes to financial statements. 46 CITY OF CARLSBAD Combined Statement of Cash Flows - All Proprietary Fund Types Year Ended June 30, 1998 3 I I 1 li I 1 I N Cash paid to other funds (60,604) (6 f I I 1 1 Interest on investments 3,983,377 61 1,976 43 1. R E 1 47 Enterprise Internal Senlice (Memor Cash flows from operating activities: Operating income (loss) $ 3,439,126 520,899 3,9f Depreciation and amortization 2,484,595 1,055,497 334 (Increase) decrease in receivables (135,284) 976 (13 (Increase) decrease in due from other governments 136,225 1: (Increase) decrease in inventory (103,549) 2,636 (IC (Increase) decrease in prepaid expenses (199,675) (15 Increase (decrease) in accrued liab.11ities 15,315 68,242 E Increase (decrease) in deposits payable 507,650 5c Increase (decrease) in estimated claims payable (5432 1) (5 Increase (decrease) in loans payable (98,707) (S Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Increase (decrease) in due to other governments 2,219 Net cash provided by (used for) operating activities 6,247,590 1,394,054 7,64 Cash flows from noncapital financing activities: Cash received from other funds 1,522,604 28,52 1 1:55 Net cash provided by (used for) noncapital financing activities 1,462,000 28,521 1,4S Cash flows from capital and related financing activities: Purchases of fixed assets (5,071,489) (1,12 1,547) (6, I! Principal payment on bonds (2,594,386) (23 Interest and other fees paid (1,391,136) (1,3! 8( Property taxes received 860,112 Capital contributions received 8,385,833 8,31 Capital received from other governments 439,109 4: and related financing activiti1:s 628,043 (1,121,547) (4' Investments in restricted assets (740,009) (7' Net cash provided by (used foI) investing activities 3,243,368 61 1,976 3,8 Net increase (decrease) in cash and cash equivalents 11,581,001 913,004 12,4 Net cash provided by (used for) capital Cash flows from investing activities: Cash and cash equivalents at beginning of year 60,557,033 9,681,705 70,2 Cash and cash equivalents at end of year $ 72,138,034 10,594,709 82,7 Supplemental schedule of noncash investing, capital and financing activities: Capital assets contributed by (to) other funds $ 3,193,986 1 0 5.7 1 2 32 I See xconipanying notes to general purpose financial statements. 48 3. I 4 I 5 I I 1 I I P I 11 B I 1 CITY OF CARLSBAD Notes to General Purpose Financial Statements Year Ended June 30, 1998 (1) Summary of Significant Accounting Policies The City of Carlsbad, California (Carlsbad) was incorporated on July 16, 1952. Carl operates under a Council-Manager form of government and provides the folloi services: general government, public safety, community development, commi services and public works. The accounting policies of Carlsbad and its component units conform to gene accepted accounting principles as applicable to governmental units. The following summary of the more significant policies: m I (a) Description and Scope of the Reporting Entity As required by generally accepted accounting principles, these final statements present the City of Carlsbad (City) and its component units, entitie which the City is considered to be financially accountable. The City is consid to be financially accountable for an organization if the City appoints a v( majority of that organization’s governing body and the City is able to impoc will on that organization or there is a potential for that organization to prc specific financial benefits to or impose specific financial burdens on the City. City is also considered to be financially accountable for an organization if organization is fiscally dependent upon the City (i.e., it is unable to ado1 budget, levy taxes, set rates or charges, or issue bonded debt without appi from the City). In certain cases, other organizations are included as compc units if the nature and significance of their relationship with the City are such their exclusion would cause the City’s financial statements to be misleadir incomplete. Based upon the above criteria, the component units of the City are the Hoi Authority of the City of Carlsbad, the City of Carlsbad Public Improve Corporaticn, the Carlsbad Redevelopment Agency and the Carlsbad Muni Water Disirict (District). Since the 1Zity Council serves as the governing board for these component i all of the City’s component units are considered to be blended component I Blended component units, although legally separate entities. are in substance of the Cii.y’s operations and so data from these units are reported witk interfund data of the primary government. The required reportable portion c Public Improvement Corporation is presented in the Hosp Grove debt se fund. Only the City of Carlsbad Public Improvement Corporation anc Carlsbad Redevelopment Agency issue separate component unit fina statements. Upon their completion, the financial statements of these compc units can be obtained at City Hall. 8 49 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (1) Summary of Significant Accounting Policies. (Continued) (b) Basis of Presentation The accounts of the City are organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. The operations of each fund or account group are accounted for by providing a separate set of self- balancing accounts that comprise its assets, liabilities, fund balanceketained earnings, revenues, and expenditures or expenses. The various funds and account groups are summarized by type in the financial statements. Fund types and account groups used by the City are as follows: GOVERNMENTAL FUND TYPES: Governmental funds are used to account for the City’s expendable financial resources and related liabilities (except those accounted for in proprietary and similar trust funds). The measurement focus is based upon determination of changes in financial position. The following are the City’s governmental fund types: General Fund The general fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds Special revenue funds are used to account for revenues derived from specific sources (other than major capital projects) that are restricted by law or administrative regulation to expenditures for specific purposes. Debt Service Funds Debt service funds are used to account for the accumulation of resources for, and 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 used for the acquisition or construction of major capital facilities other than those financed by proprietary funds. 50 i 1 E 1 E I E B P 1 IC I P 1 I E I CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) PROPRIETARY FUND TYPES: The City applies all applicable GASB pronouncements in accounting reporting for its proprietary operations as well as the following pronouncen issued on or before November 30, 1989, unless these pronouncements COI with or contradict GASB pronouncements: Financial Accounting Stanc Board (FASB) Statements and Interpretations, Accounting Principles B (APB) Opinions, and Accounting Research Bulletins (ARBS) of the Comrr on Accounting Procedure. Proprietary funds include the following fund types Enternrise Funds Enterprise funds are used to account for operations (a) that are financed prim through user charges, or (b) where the governing body has decided determination of net income is appropriate. Internal Service Funds Internal Service funds are used to account for goods or services provided bj department to other departments of the City on a cost-reimbursement basis. FIDUCIARY FUND TYPE: Fiduciary funds are used to account for assets held by the City in a tr capacity or as an agent for individuals, private organizations, other governm units, and/or other funds. The following is the City’s fiduciary fund type: Agencv Ftd Agency funds are used to account for assets held by the City in an ag capacity for individuals and private businesses. They do not in1 measurement of results of operations. ACCOUNT GROUPS: Account groups are used to establish accounting control and accountability fc City’s general fixed assets and general long-term debt. The following ar City’s account groups: 8 I 51 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (1 1 Summary of Significant Accounting Policies. (Continued) General Fixed Assets Account Group This account group is used to account for all fixed assets of the City other than those accounted for in the proprietary funds. General Long-Term Debt Account Group This account group is used to account for all long-term obligations of the City except those accounted for in the proprietary funds and trust funds. (c) & Governmental fund types are accounted for on a “spending” measurement focus. Accordingly, only current assets and current liabilities are 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. The proprietary fund types are accounted for on an “income determination” or “cost of services” measurement focus. Accordingly, all assets and liabilities are included on the balance sheet, and the reported fund equity provides an indication of the historical net worth of the fund. Operating statements for proprietary fund types report increases (revenues) and decreases (expenses) in total historical net worth. Fiduciary fund types are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Fiduciary fund assets and liabilities are accounted for on the modified accrual basis of accounting. Governmental fund types use the modified accrual basis of accounting. Revenues are recognizable when susceptible to accrual, Le., 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. In applying the susceptible to accrual concept to intergovernmental revenues, the legal and contractual requirements of the individual programs are used as guidance. Revenues that are accrued include real property taxes, sales tax, transient occupancy taxes, franchise taxes, highway users tax, interest, and some state and federal grants. 52 I 1 I I E I 1 8 I 1 l 1 I 1 I I I 53 CITY OF CARLSBAD Notes to General Purpose Financial Statements U (Continued) (1) Summary of Significant Accounting Policies. (Continued) Real property taxes are levied on October 15 against owners of record at Jan 1. The taxes are due in two installments, on November 1 and February 1, become delinquent after December 10 and April 10, respectively. Tax liens a1 annually as of 12:Ol a.m. on the first day of January in the fiscal year for m the taxes are levied. Under the provisions of NCGA Interpretation 3, propeq 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. Governmeiital expenditures are recorded when the related fund liabilit incurred. Principal and interest on general long-term debt are recorded as liabilities when due or when amounts have been accumulated in the debt sei fund for payments to be made early in the following year. Proprietarj funds use the accrual basis of accounting, Le., revenues are recogr in the period earned and expenses are recognized in the period incurred. (d) Encumbrarw Encumbrance accounting, under which purchase orders, purchase order requ contracts and other commitments for the expenditure of monies are recordc 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. I (e) Cash and Investments Cash includes amounts in demand and time deposits. Investments are reportc the accompanying balance sheet at fair value, except for certain certificatc deposit and investment contracts that are reported at cost because they arc transferable and they have terms that are not affected by changes in m( interest rates. Changes in fair value that occur during a fiscal year are recognized as invest income reported for that fiscal year. Investment income includes interest earn changes in fair value, and any gains or losses realized upon the liquida maturity, cir sale of investments. The City pools cash and investments of all funds, except for def; compensation assets and assets held by fiscal agents. Each fund’s share ir pool is displayed in the accompanying financial statements as cash investmenis. Investment income earned by the pooled investments is allocat the various funds based on each fund’s average cash and investment balance. CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) (e) Cash and Investments, (Continued) Restricted cash and investments represent amounts that are restricted under the terms of debt agreements, including debt service reserves and balances associated with special assessments for the construction of enterprise fund assets. (f) Inventories Inventories consist of materials and supplies that are valued at cost and are recorded as expenses or expenditures on a first-in, first-out basis when consumed. (g) Compensated Absences Vacation pay is payable to employees at the time used or upon termination of employment. For governmental funds, the cost of accumulated vacation expected to be paid in the next 12 months is recorded as a fund liability and amounts expected to be paid after 12 months (if any) are recorded in the general long-term debt account group. For compensated absences recorded at June 30, 1998, all balances are expected to be paid within the following 12 months. For proprietary funds, the cost of vacation is recorded as a liability when earned. (h) Risk Management The City accounts for its general liability, health insurance, and workers’ compensation activities in internal service funds. The funds are responsible for collecting premiums from other City funds and departments and paying claims settlements and insurance premiums. Interfund premiums are based on the insured fund’s claims experience. Incurred but not reported claims are accrued at year-end if material. (i) Unbilled Services Unbilled water revenue of the enterprise funds is recognized as earned when the water is consumed. (i) General Fixed Assets General fixed assets are recorded as expenditures in the governmental fund types and capitalized at historical cost in the general fixed assets account group. In the case of gifts or contributions, such assets are recorded at fair market value at the time received. 54 1c T R 1 B I I I 1 E E 1 I 1 i 55 I CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) 6) General Fixed Assets. (Continued) Fixed assets consisting of certain improvements other than buildings, inclu roads, bridges, curbs and gutters, streets and sidewalks, and drainage syst have not been capitalized. Such assets normally are immovable and of value to the City. Therefore, the objective of stewardship for capital expenditurl satisfied without recording these assets. In the general fixed assets account group, construction in progress is transferrc buildings or improvements upon approval by the City Council, m approximates the completion date. No depreciation has been provided on general fixed assets. Fixed Assets - Proprietary Funds Fixed assets used by proprietary funds are stated at cost or estimated histo cost. Conixibuted fixed assets are recorded at estimated fair market value a time received. Net interest costs are capitalized on projects during constructicln period. Depreciation is charged to operations using the straight-line method based 01 estimated useful life of the related asset. The estimated useful life of the a are as follc ws: 1 (k) Years Buildings and improvements 10- 50 10 - 100 Transmission and distribution lines 40 - 70 Sewer, sewer lines and wells 50 Wells, reservoirs and dams Sewage treatment facility 50 Equipment 3- 20 c (1) Deferred Revenue The deferred revenue in the General fund represents funds received for a fi program and interest accrued, but not available, on advances to the Carl Redevelopment Agency. The deferred revenue in the Special Revenue funds represents funds received E future program. CITY OF CARISBAD Notes to General Purpose Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) (1) Deferred Revenue, (Continued) The deferred revenue in the Capital Projects funds relates to funds received and to be applied toward future construction, a long term receivable for development fee revenue earned but not available and a prepaid lease payment. The deferred revenue in the Enterprise funds relates to in-kind prepayments for sewer installation services to be rendered. Statement of Cash Flows - Proprietary Funds For purposes of presentation in the statement of cash flows, cash and cash equivalents represent funds that can be withdrawn at any time without restriction or penalty such as demand deposits, money market mutual funds, and deposits held by the State of California pooled money investment account. The proprietary funds consider all highly liquid investments with an original maturity of three months or less when purchased and all amounts invested in a cash and investment pool to be cash equivalents. A reconciliation of cash and cash equivalents to amounts reported on the combined financial statements follows: (m) Cash Equivalents Investments Total Pooled cash and investments held by the City $82,726,644 - 82,726,644 Money market mutual funds 6,099 - 6,099 Government agency obligations - 1,693,715 1,693.7 15 $82,732,743 1,693,7 15 84,426,458 (n) Advances to Other Funds Interfund loan receivables are reported as advances and are offset equally by a fund balance reserve which indicates that they do not constitute expendable available financial resources and therefore are not available for appropriation. (0) Residual Equity Transfers Residual equity transfers represent non-routine transfers of equity between funds, including amounts transferred to reflect the opening, closing, or reclassification of funds. Residual equity transfers into the proprietary fLinds are recorded as additions to contributed capital. 56 1 I I 1 I J 1 I I I II 1 1 1 [I I 57 I CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) (p) Total Columns Total columns on the combined statements are captioned “Memorandum Onl: indicate that they are presented only to facilitate financial analysis. Data in 1 columns do not present financial position, results of operations, or cash flok conformity with generally accepted accounting principles. Such data is comparable to a consolidation since interfund eliminations have not been mad E (2) Budgetary Data The City follows these procedures in establishing its budgetary data: 1. During May or June, the City Manager submits to the City Council a prop operating budget for the fiscal year commencing the following July 1. The bL includes proposed expenditures and estimated revenues on a departmental bas Public hearings are conducted at City Council meetings to obtain citi; comments during June. Prior to July 1, the budget is enacted legally through passage of an approprii resolution. 2. 3. The City Manager is authorized to make transfers of appropriated amounts from department to ancther within a fund. The legal level of budgetary control is at the level. Revisions i.hat alter the total appropriations of any fund must be approved b; City Council with the exception of budget adjustments which involve offsetting reve and expenditures. The City Manager is authorized to increase or decreasc 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. During the year, several supplementary appropriations necessary. Budgets for governmental type funds are adopted on the modified accrual basis, e, that encumbrances are treated as budgeted expenditures in the year purchases committed. Expenditures may not exceed budgeted appropriations at the fund level. appropriations lapse at fiscal year-end unless City Council takes action in the form resolution to cont nue the appropriation into the following fiscal year. I CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (2) Budgetary Data, (Continued) For purposes of budgetary presentation, actual generally accepted accounting principles (GAAP) expenditures have been adjusted to include encumbrances outstanding and designations for continuing appropriations at year-end and to exclude any earned leave accruals at year-end. Annual budgets are adopted for the General, Special Revenue and Debt Service funds except for the Hosp Grove COPS. Accordingly, the revenues and expenditures for this fund has been excluded from the budget basis financial statements. Annual budgets are not adopted for the Capital Projects funds; therefore, budget basis financial statements have not been prepared because a comparison of such budgetary amounts to annual revenues and expenditures is not meaningful. The following schedule is a reconciliation of the budgetary and GAAP fund balances: Special Debt General Revenue Service Fund Funds Funds Fund balances-budgetary basis $40,929,800 21,801,23 1 1,146,832 Encumbrances outstanding at year-end 879,301 226,501 - Fund balances designated for continuing appropriations 364,28 1 144,98 1 - Earned leave at year-end (329,2 13) (4,650) Fund balances of nonbudgeted funds - 814,513 - Fund balances - GAAP basis $4 1,844,169 22,168.063 1.96 1,345 (3) Cash and Investments Each participating fund’s portion of the City’s cash and investment pool is displayed on the combined balance sheet as “Cash and investments.” This category also includes cash and investments that are held separately by several of the City’s funds. Authority for Deposits and Investments: The City’s investment policy and state statutes authorize the City to invest in obligations of the U.S. Government. its agencies and instrumentalities; commercial paper rated A- 1 by Standard and Poor’s Corporation or P-1 by Moody’s Commercial Paper record with a maximum maturity of 180 days or 15% of the portfolio; banker’s acceptances with a maximum maturity of 270 days or 25% of the portfolio; repurchase agreements with a maximum maturity of one week; certificates of deposit with national and state licensed or chartered banks or federal or state savings and loan associations; medium-term corporate notes with a maximum five-year maturity rated in the top two rating categories and not to 58 s I I 1 1 # u u u E I 1 I E s I 59 l CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (3) Cash and Investments, (Continued) Authoritv for Deposits and Investments, (Continued) exceed 30% of the portfolio; money market funds whose portfolios consist of one or of the foregoing investments; a sweep account and the State Treasurer’s investment p 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 government securities with a market value of at least 10 percent in excess of the C deposit or 50 percent in excess of the deposit as collateral in mortgage pools. Cash and investments are classified in the accompanying combined balance shet follows: Cash and investments $261,122,63 1 Deferred compensation investments 3,600,462 Restricted assets: c Cash and investments 1,699,814 $266.422,907 Cash and investments held by the City at June 30, 1998 consisted of the following: Cash on hand (petty cash) $ 7,252 Demand deposits 3,196,652 Local Agency Investment Fund 42,59 1,5 19 Deferred compensation mutual funds 3,600,462 United States Treasury notes 17,340,525 United States Government agency obligations 104,666,65 1 Corporate notes 74,788,298 Commercial paper 13,694,780 Repurchase agreements 1,399,500 Mutual funds - other 3.837,962 I Investment agreements 1,299,306 Total cash and investments $266,422,907 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (3) Cash and Investments, (Continued) Deposits: The following summary presents the amount of the City’s deposits which are fully insured or collateralized with securities held by the City or its agent in the City’s name (Category One), those deposits which are collateralized with securities held by the pledging financial institution’s trust department or agent in the City’s name (Category Two), and those deposits which are not collateralized or are collateralized with securities held by the pledging financial institution or its trust department or agent but not in the City’s name (Category Three) at June 30, 1998. Category Bank Carrying Form of Deposit - 1 - 2 - 3 Balance Amount Demand deposits $105,209 3,183,516 A - 3,288.725 3,196,652 Investments: As defined in Governmental Accounting Standards Board Statement No. 3, investments in securities are categorized in the following manner: Category 1 - its agent in the City’s name. Category 2 - by the counterparty’s trust department or agent in the City’s name. Category 3 - by the counterparty or by its trust department or agent, but not in the City’s name. Investments that are insured or registered, which are held by the City or Uninsured and unregistered investments, for which the securities are held Uninsured and unregistered investments, for which the securities are held 60 II 1 I I a II I #[ 8 E 8 1 I IE @ I: CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) E (3) Cash and Investments. (Continued) Category Form of Investment - 1 - 2 - 3 Carrying - Amc Investments managed by City Treasurer: - 17,340,5 agency obligations 104,666,65 1 - - 104,666,C Corporate notes 74,788,298 - - 74,788,2 Commercial paper 13,694,780 - - 13,694,T Repurchase agreement - i 1,399.500 1,399.5 United States Treasury notes $ 17,340,525 - United States Government Investments managed by fiscal agent: $21 0,490.254 ; - 1,399.500 21 1,889,y Investments held by City not subject to categorization: Investment in Local Agency Investment Fund (a) 4239 1,5 Investment in deferred compensation mutual funds 3,600,4 Investment in mutual funds - other 3,837,s Investment agreements (b) 1.299.3 $263.2 19,C The City is a voluntary participant in the Local Agency Investment Fund (L that is regulated by California Government Code Section 16429 under oversight of the Treasurer of the State of California. The fair value of the C investmenl. in this pool is reported in the accompanying financial statemer amounts based upon the City’s pro-rata share of the fair value provided by I for the entire LAIF portfolio (in relation to the amortized cost of that portfc The balarce available for withdrawal is based on the accounting re( maintained by LAIF, which are recorded on an amortized cost basis. Includi LAIF’s investment portfolio are collateralized mortgage obligations, mort$ backed securities, other asset-backed securities, loans to certain state funds floating rate securities issued by federal agencies, government-spon: enterprises, and corporations. This is contract value. No secondary market exists for resale in order to esta Investments held by fiscal agent not subject to categorization: (a) (b) I market value. The carrying amount of all investments reflected in the above table is at fair value. e: for nonparticipating investment contracts which are carried at cost because they ar transferable and they have terms that are not affected by changes in market interest ri I 61 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (4) Due To and From Other Funds The following table shows amounts due from funds within the City to other funds within the City at June 30, 1998: Due From Due To Other Funds Other Funds General $ 430,102 - Special Revenue Funds: Community Development Block Grant 288,437 Federal Grants - 6,843 Senior Nutrition - 19,515 Federal Grants - 8,959 Sales Tax/TransNet - 520,000 State Grants 6,348 Capital Projects Funds: General Capital Construction 420,000 - Enterprise Funds: Sewer 187,357 Carlsbad Municipal Water District 187.357 Totals $1,037,459 1,037,459 (5) Advances To and From Other Funds The following table shows amounts advanced from funds within the City to other funds within the City at June 30, 1998: Advances To Amount Advances From General Fund Capital Projects Fund: General Fund Enterprise Fund: General Fund Account Group: Capital Projects Funds: Park Development Fund $ 2,550,000 Golf Course Fund 2,737,200 Long-Term Debt Account Group 10,392,3 18 General Capital Construction Fund Traffic Impact Projects Fund 750,000 Total advances $16.429,5 18 Capital Projects Fund: 62 1: E I I I I (E E I I I 1 1 IE I IC CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (6) General Fixed As:& A summary of changes in the general fixed assets account group is as follows: Balance at Balance a July 1. 1997 Additions Deletions June 30, 19 Land $28,042,044 - - 28,042,O~ Buildings 27,683,709 - 27,683,7( Improvements 4,09 1,655 - 4,09 1,6t Furniture and equipment 3,880,933 2,685,143 (1,108,13 1) 5,457,91 D Construction in progress 6,108,483 2,744,379 (171,504) 8,681,3f Total $69,806,824 5,429,522 (1,279,635) 73,956.7' Construction in progress in the general fixed assets account group is composed o following: Expended Project Balance at Authorization June 30. 1998 Committec ADA Projects $ 347,178 165,766 181,41 10,80 City Council Chambers Refurbishment 72,400 6 1,599 Fire Station No. 3 Renovation 45,000 162 44,83 Hosp Grove Park Improvements 141,785 141,38 1 40 Library - South Carlsbad 18,418,842 3,636,240 14,782,60 Library Remodel .- Cole Library 283,113 190,566 92,54 Poinsettia Park 5,02 1,083 4,301,538 719,54 Public Art - Maxton Brown Park 24,877 5,000 1937 Public Service Center 840,000 1,740 838,26 Skateboard Park 330.000 66,710 263.29 B Totals $25,694,277 8,68 1.358 17,012,9 1 Public Art - South Carlsbad Library 169,999 1 10,656 59,34 1 63 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (7) Fixed Assets - Proprietary Funds A summary of proprietary fund type fixed assets at June 30, 1998 is as follows: Enterprise Internal Service Land, water rights, rights-of-way $ 7,358,347 - Buildings and improvements 7,246,704 - Wells, reservoirs and dams 22,062,184 - Transmission and distribution lines 39,714,622 - Sewer, sewer lines and wells 28,754,264 - Sewage treatment facility 32,905,434 - Equipment and vehicles 1,535,334 9,863,082 Construction in progress 9,426,47 1 - 149,003,360 9,863,082 Less accumulated depreciation 3 1.180,477 4,979,287 Fixed assets, net $1 17.822.883 4,883,795 Enterprise Fund interest is charged to expense as incurred, except for interest related to borrowings used for construction, which is capitalized net of interest earned on construction funds borrowed. Interest capitalization ceases when the construction project is substantially complete and placed in service. No interest costs were capitalized in the Enterprise Funds during the year ended June 30, 1998. The Enterprise funds had various construction contracts in progress at June 30, 1998 with an estimated cost to complete of approximately $15,800.000. (8) Obligations Under Capital Leases Backbone Lease On March 7, 1995, the City entered into a Memorandum of Agreement with the County of San Diego to participate in the development and operation of a Regional Communications System (RCS) benefiting the radio communication needs of public safety and public service agencies operating in San Diego and Imperial County (backbone lease). The total estimated cost for Carlsbad's participation in this system is $5,400,000 and can be divided into two main components. The equipment purchases for use by Carlsbad safety and service departments is covered under the lease purchase agreement with Motorola. The cost for Carlsbad's share of the backbone of the RCS is $1,586,650. Payments for the backbone costs are made annually for 15 years at an interest rate of 5.65%. The annual payment amount is $159,651. The unpaid principal amount as of June 30, 1998 is $736,327. which has been reduced by a deposit held by the County of $706.357. 64 II I t i 3 I I 1 8 8 I I I I 1 CITY OF CARLSBAD Notes to General Purpose Financial Statements 1 (Continued) (8) Obligations Under Capital Leases, (Continued) Equipment Lease On November 15. 1996, the City entered into an Equipment Lease-Purchase Agrec with Motorola, Inc. for the purchase of equipment and services necessary for the ( participation in the San Diego County Regional Communications System. The sysi designed to replace existing conventional radio frequencies with a trunked 800 system to develop communications capabilities to cope with potential disaste improve inter and intra-agency communications in the future. The maximum amount of credit extended to the City under the terms of the agreem $3,235,478, with an option to increase the total by 10%. As of June 30, 1998, the has purchased eqdipment and services under the agreement totaling $1,855,714. payment terms are for 15 years at an interest rate of 5.79% per year. The unpaid prir amount as of June 30, 1998 is $1,662,783. The County Service Area (CSA) 135 Zone A charges were levied against prc owners to fund all local costs associated with the RCS. The passage of Propositi01 brought the validiiy of the CSA charge into question, and thus the item was placed c ballot. The item did not pass, and therefore, no additional charges will be levied ai the property owners to fund this project. Minimum future lease payments under the capital lease as of June 30, 1998 are: e Equipment Lease Backbone L 1999 $ 185,088 159,65 2000 185,088 159,65 200 1 185,088 159,65 2002 185,088 159,65 2003 185,088 159,65 Subsequent to 2003 1,586,550 1,277,2C Total minimum future lease payments 2,5 1 1,990 2,075,46 Less amounts representing stated or implicii interest 849.207 632.76 B Present value of future lease payments $1,662.783 I .442.65 B 65 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (9) obligations Under Operating Leases In June 1988, the Carlsbad Redevelopment Agency entered into an agreement to lease a parking lot on State Street from a private party. The lease requires monthly rental payments for twenty years. Minimum future rental payments under operating leases as of June 30, 1998 are: 1999 $ 58,726 2000 62,250 200 1 65,985 2002 69,944 2003 74,140 Subsequent to 2003 443,014 Total minimum future rental payments $774,059 (10) Long-Term Debt The following is a summary of changes in the principal balance of long-term debt for the year ended June 30, 1998: Principal Principal Balance at Balance at Julv 1, 1997 Additions Reductions June 30, 1998 General long-term debt account group: Bonds $15,005,000 (265,000) 14,740,000 Special assessment debt with governmental commitment 6,180,000 (6,180,000) - Certificates of participation 6,615,000 6,595,000 (6,615,000) 6,595,000 Advances to the Carlsbad Redevelopment Agency 9,842,656 579,462 (29,800) 10,392,3 18 Total general long-term debt $41,144.535 7.174-462 (13.3 17,619) 35,001.378 Certificates of participation $ 8,160,000 7,400,000 (9,200,000) 6,360,000 - HUD Section 108 Loan 989,950 - (1 15,000) 874,950 Obligations under capital leases 2.5 1 1,929" - (1 12,819) 2399,110 Enterprise funds: Installment purchase agreement 1 1,080,000 - (405,000) 10,675,000 Loan payable 2,097,227 - (98,707) 1,998,520 Accrued assessments 2.374.590 - (389.386) 1.985.204 Total enterprise funds $23.7 1 1.8 17 7.400.000 (1 0,093.093) 2 1.01 8,724 * Beginning obligation under capital lease balance was restated to reflect prior year balances not recorded until 97-98. 66 1 I 1 B s 0 I II I 11 1 II 1 I I E I t CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) [ 10) Long-Term Debt, IlContinued) Long-term debt at June 30, 1998 is comprised of the following issues: Balance June 30. 1 General Long-Term Debt 1993 Carlsbad Housing and Redevelopment Commission Tax Allocation Bonds, principal due in amounts ranging from $280,000 to $1,000,000 on September 1 of each year through 2024. Interest payable on March 1 and September 1 at rates varying from 5.25% to 5.30% per annum. 1997 Hosp Grove Refunding Certificates of Participation, principal due in amounts ranging from $520,000 to $735,000 on August 1 of each year through 2009, interest payable on August 1 and February 1 at rates varying from 3.75% to 4.70% per annum. Payable from the General Fund, with a required reserve amount of $659,500. Community Development Block Grant (CDBG) program - Section 108 loan payable to HUD. Funds used to acquire property for affordable housing project. Principal due in amounts ranging from $125,000 to $170,000 on August 1 of each year through 2004. Interest payable on August 1 and February 1 at rates varying from 8.08% to 8.27% per annum. Payable from future CDBG entitlements. Redevelopment Agency debt due to the City of Carlsbad for capital projects, administration, and accrued interest accumulated since the formation of the Redevelopment Agency in fiscal year 1976-77. Interest is charged and advanced to the Agency each year based on a current year average interest rate. The debt will be paid from future tax increment revenues. 10,392, Obligations under capital leases (note 8) 2,399. Total General Long-Term Debt $35.001. $14,740, 6,595, 874, li 67 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (10) Long-Term Debt, (Continued) Balance at June 30,1998 Enterprise Fund Long-Term Debt 1997 Carlsbad Municipal Water District Refunding Certificates of Participation, principal due in varying amounts ranging from $955,000 to $1,175,000 on May 1 of each year through 2004, interest payable on May 1 and November 1 each year at rates varying from 3.90% to 4.40% per annum. The required reserve amount is $740,000. Encina Financing Joint Powers Authority (EFJPA) Installment Purchase Agreement, principal due in varying amounts ranging from $425,000 to $905,000 on August 1 of each year through 2015, interest payable on February 1 and August 1 each year at rates varying from 4.0% to 5.5% per annum. The required reserve amount is $942,671. 1993 Carlsbad Municipal Water District loan agreement with the State Water Resources Control Board. Principal is due in varying amounts ranging from $10 1,570 to $123,2 19 on November 30 of each year through 2013, interest payable on November 30 of each year at 2.9% per annum. In December of 1994, the Golf Course Enterprise Fund purchased land with accrued assessments. Principal is due in varying amounts ranging from $148,033 to $733,033 through 2006. $ 6,360,000 10,675,000 1,998,520 1,985,204 Subtotal enterprise funds 2 1 ,O 18,724 Less unamortized discounts, issuance costs and deferred charges (1,404,867) Less current portion (2,2 14,603) Total Enterprise Fund Long-Term Debt $17,399,254 68 4 I I D 1 a I 1 II 1 I # I 1 I 8 I CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (1 0) Long-Term Debt, (Continued) Debt service requirements to maturity for general long-term debt (excluding obligac under capital leases) are as follows: Tax Certificates HUD Allocation of Section Bonds Participation 108 Loan Total: 1999 $ 1,048,352 793,400 191,589 2,03 3,3 2000 1,043,390 758,803 186,26 1 1,988,4 200 1 1,042,77 1 748,655 185,278 1,976,7 2002 1,046,234 7 52,28 5 183,408 1,981,9 2003 1,043,777 754,350 180,65 1 1,978,7 2004-2008 5,2 17,9 19 3,761,605 176,980 9,156,5 2009-20 13 5,205,600 I 2024 1,026,500 1.026,5 27,009,993 8,321,370 1,104,167 3 6,43 5,5 752,272 - 5,957,s 5,184,113 - - 5,184,l 5,15 1,337 - - 5,15 1,3 20 14-20 18 20 19-2023 - - Less amounts representing interest - 111 2,269,993) (1,726,370) (229,2 17) (14,2253 Total general long-term debt $14,740,000 6,595,000 874,950 22,209.9 B 69 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (1 0) Long-Term Debt. (Continued) Debt service requirements to maturity for the enterprise funds are as follows: Carlsbad Municipal Encina Carlsbad Water District Installment Municipal Golf Course Certificates of Purchase Water District Accrued Participation Asreement Loan Payable Assessments Totals 1999 $1,2 19,695 942,67 1 159,527 798,546 3,120,439 2000 1,222,450 940,371 159,527 2 14,12 1 2,536,469 200 1 1,227,650 942,026 159,527 2 14,099 2,543,302 2002 1,220,010 942,16 1 159,527 213,617 2,535,315 2003 1,2 19,860 936,199 159,527 215,377 2,530,963 2004-2008 1,226,700 4,68 1,68 1 797,635 649,118 7,355,134 2009-20 13 4,665,533 797,635 5,463,168 2014-201 6 1,856,609 125,899 1.982508 7,336,365 15,907,25 1 2,5 18,804 2,304,878 28,067,298 - - Less amounts representing interest (976.365) (5,232.25 1) (520,284) (3 19.674) (7.048.574) Total enterprise fund debt $6,360,000 10.675.000 1,998.520 1,985,204 21,018,724 (1 1) Defeasance of Debt HOSD Grove In September 1997, the City of Carlsbad Public Improvement Corporation (Corporation) issued $6,595,000 of Refunding Certificates of Participation, Series 1997 to refund $6,615,000 of the outstanding Certificates of Participation, Series 1988 with interest ranging from 3.75% to 4.70%. The net proceeds of $6,486,351 were used to purchase government securities. Those securities were deposited in an U.S. irrevocable trust with an escrow agent to provide for all future debt service payments on the Corporation’s Certificates of Participation, Series 1988. As a result, the Certificates of Participation, Series 1988 are considered to be defeased and the liability for those bonds have been removed from the balance sheet. 70 1 E I 8 1 I 8 I 1 ff 1 I I 8 J n CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (1 1 ) Defeasance of Debt, (Continued) Hosp Grove, (Continued) The Corporation refunded the Certificates of Participation, Series 1988 to reduce its debt service payments over the next eleven years by $1,209,961 and to obtaii economic gain of $954,720. The Corporation issued these Certificates pursuant to a Trust Agreement by and an the Corporation, the City and the Trustee. The Certificates represent an undik interest in the lease payments made by the City to the Corporation. The Certific mature on August 1 of each year through 2009. I Carlsbad Municipal Water District In September 1997, the Corporation issued $7,400,000 of 1997 Water Rev Certificates of Participation to refund $8,160,000 of outstanding 1988 Certificatt Participation with interest rates ranging from 3.75% to 4.40%. The net proceec $7,200,123 were used to purchase government securities. Those securities plus exi funds from the refunded issue were deposited in an U.S. irrevocable trust with an esc agent to provide jkr all future debt service payments on the Carlsbad Municipal P District’s 1988 certificates of Participation. As a result, the 1988 Certificate Participation are considered to be defeased and the liability for those bonds have removed from the City’s balance sheet. The Corporation refunded the Water District’s 1988 Certificates of Participatio reduce its total debt service payments over the next eight years by $2,123,962 ar obtain an economj c gain of $1,848,491. The Corporation issued these Certificates pursuant to a Trust Agreement by and an the Corporation, the Water District and the Trustee. The Certificates represer undivided interest in the lease payments made by the Water District to the Corpora The Certificates mature on May 1 of each year through 2004. I Assessment Districts In December 1997, the City issued $18,475,000 of Limited Obligation Refur Improvement Bonds Reassessment District No. 97-1 to refund $5,160,000 ol outstanding Improvement Bonds Assessment District No. 85-2 and $1 3,530,000 o outstanding Limited Obligation Improvement Bonds Assessment District No. 88-1. net proceeds of $18,325,190 after payment of $149,810 in issuance costs were usc purchase government securities. Those securities were deposited in an U.S. irrevoc trust with an escrow agent to provide for all future debt service payments on the C I 71 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) ( 1 1 ) Defeasance of Debt. (Continued) Assessment Districts. (Continued) Improvement Bonds Assessment District No. 85-2 and the Limited Obligation Improvement Bonds Assessment District No. 88-1. As a result, the Improvement Bonds Assessment District No. 85-2 (the debt with government commitment) are considered to be defeased and the liability for those bonds have been removed from the balance sheet. The City refunded the Improvement Bonds Assessment District No. 85-2 and the Limited Obligation Improvement Bonds Assessment District No. 88-1 to reduce its total debt service payments over the next fourteen years by $4,604,152 and to obtain an economic gain of $3,743,383. As of June 30, 1998, the amount of outstanding prior year defeasances is $29,410,000 for the 1989 Wastewater Revenue Bonds. (12) Rate Covenants The 1997 Water Revenue Certificates of Participation requires that the District set its charges for services each year at rates sufficient to produce net revenues (after paying the operating and maintenance expenses of the District, excluding depreciation) at least 1.15 times the debt service for that year. 72 a B CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) I I I 8 I 8 I 1 8 1 1 II 1 I 1 73 (1 3) Fund BalancesiRetained Earnings The following is a summary of reserved and unreserved fund balances and ret: earnings as of June 30. 1998: Governmental Fund Types Special Debt Car Fund Balances General Revenue Service Prol Reserved for: e Loans receivable $ 2,615,501 Inventory 22,842 - Debt service Prepaid expenditures 21,731 185,084 - 20 Advances to other funds 9,422,597 - 75 Low and moderate income housing - 4,125,463 - - 1,528,500 Encumbrances 879,301 226,501 17,6 1 Subtotal 10.346,471 7,152,549 1,528,500 18,57 Unreserved: Designated for future debt service - 432,845 Designated for approved capital projects 952,690 - 55,07 Designated for continuing appropriations 364,28 1 144,98 1 - 32,34 Undesignated 30,444,458 13,917,843 -(7 Designated for sales tax payment 186,010 - - Designated for affordable housing 502,949 - - Subtotal 3 1,497,698 15,015.5 14 432,845 87,33 Total fund balances $41,844.169 22,168,063 1,961,345 105,91 Proprietary Fund Types Internal Retained Earnings Enterprise Service Reserved for: 199,675 1; Unreserved 55,536,590 6,643,296 Total retained earnings $57.219.261 6,842.971 Prepaid expense:; $ Debt service 1,682,671 - CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (1 3) Fund BalancedRetained Earnings. (Continued) Reserves for loans receivable, inventory, prepaid expenditures and advances to other funds, net of accrued interest recorded as deferred revenue, are established to show that certain assets are already committed to other purposes and are not available for discretionary expenditures. Reserves for debt service represent resources legally restricted to the payment of long- term debt principal and interest maturing in future years. Reserves for encumbrances represent commitments related to unperformed contracts for services and undelivered goods. Unreserved-undesignated represents the fund balance or retained earnings remaining after reduction for reserved and designated fund balances or retained earnings. (1 4) Accumulated Fund Deficits The following funds reported deficits in fund balances or retained earnings as of June 30, 1998: Deficit Balance Enterprise Funds: Golf Course $( 1,059,406) Internal Service Funds: Health Insurance (180,871) (1 5) Changes in Contributed Capital Internal Enterprise Service Contributed capital at June 30, 1997 $ 96,664,985 7,300,649 Additions: Cash - connection fees 8,388,542 - Cash - from other funds 490,000 - Cash - from other sources Fixed assets 3.191.278 105,712 Contributed capital at June 30, 1998 $109.173.91 3 7,406.36 1 439,108 74 1 1 1 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) II I (1 6) Residual Equity Transfers Residual equity transfers are nonrecurring or nonroutine transfers of equity betT funds. A summary of significant residual equity transfers at June 30, 1998 is as follo Special Capi General Revenue m The general fund transferred a one-time 1 1 I I 1 I 1 I i R I 75 lump sum to the enterprise golf I course fund for start-up costs. $(490,000) - Other 3,580 (25) (3,5 (17) Claims and Judgrrw The City is exposed to various risks of loss related to its operations, including 1( associated with errors and omissions and injuries to employees and members o public. The City uses a Risk Management Self-Insurance Fund, a Health Insurance 1 and a Workers’ Compensation Fund (all internal service funds) to account for and fin its uninsured risks of loss. All funds of the City make payments based on estimates o amounts needed to pay prior and current year claims and to establish a reserw catastrophe losses. The estimated claims payable reported at June 30, 1998 is base the requirements of Governmental Accounting Standards Board Statement No. 10, u requires that a liability for claims be reported if information prior to the issuance o financial statements indicates that it is probable that a liability has been incurred a date of the financial statements and the amount of the loss can be reasonably estimate Changes in the estimated claims payable amounts in fiscal years 1997 and 1998 fo three internal service funds are as follows: 1 Current Year Claims and Beginning Changes in Claim End Balance Estimates Payments Bala Health Insurance 13: 1996-97 $263,000 1,176,111 (1,148,111) 291 1997-98 291,000 1,353,534 (1,312,534) 332 1996-97 781,548 (99,691) (423,038) 258 1997-98 258,819 248,784 (278,713) 228 Risk Managemem. Fund: Workers’ Compensation Fund: 1996-97 676,695 662,490 (576,293) 762 1997-98 762.892 402,430 (468,022) 697 a CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) ( 18) Insurance Coverage Effective January 1, 199 I, the City became a participating member of the Public Agency Risk Sharing Authority of California (PARSAC), a risk-management pool for general liability claims. Under this program, the pool provides coverage up to a maximum of $500,000 per claim with a self-insured retention provided by the City also in the amount of $500,000 per claim. In addition, excess general liability insurance coverage up to $9,000,000 is provided. Under the terms of the agreement with PARSAC, the City must maintain an unencumbered portion of fund equity equal to $1,500,000. At June 30, 1998, unencumbered fund equity for the Risk Management Self-Insurance Fund was approximately $2,800,000. Over the past three years, PARSAC, the City’s liability pool, has contributed to the settlement of one claim in excess of the City’s self-insured retention of $500,000 in fiscal year 1995- 1996. Health insurance coverage for City employees is provided by either Kaiser, PERS, Sharp Healthcare or the Reliastar plan. The majority of City employees are covered through the Reliastar plan which is administered by Reliastar Life Insurance Company. Under the City’s agreement with Reliastar, Reliastar will provide coverage for each individual claim over $75,000. If aggregate claims for the City for any two month period exceed 125% of the expected claims, Reliastar will assume payment for the excess amount. The City is insured for workers’ compensation claims by Employers Reinsurance Corporation (Corporation). The Corporation provides coverage for losses which exceed the City’s self-insured retention of $300,000 per claim. (1 9) Joint Ventures Encina Water Pollution Control Facility: The Encina Water Pollution Control Facility (the Facility) is a sewer system owned jointly by the Cities of Carlsbad and Vista, the Leucadia County Water District, the Buena Vista Sanitation District, the Vallecitos Water District (formerly the San Marcos County Water District) and the Encinitas Sanitary District. The Encina Wastewater Authority (EWA) is the operator and administrator of the facility and is responsible for the management, maintenance and operations of the joint system. Ownership percentages in the facility are determined by joint agreement at the time the assets are acquired. As of June 30, 1997, the Cities and Districts have the following approximate ownership interest: 76 I I B 1 1 I 1 I 1 s li 1 8 I 1 1 I 77 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) I (1 9) Joint Ventures, (Continued) Encina Water Pollution Control Facility. (Continued): City of Carlsbad 25% City of Vista. 24% Leucadia County Water District 19% Vallecitos Water District 19% Buena Vista Sanitation District 8 Yo Encinitas Smitary District 5 yo The latest available financial statements of the EWA. dated June 30, 1997, shov following: Total assets $1343 15,445 Total liabilities 4,239,846 Fund balance $1 30,275.599 The EWA does not recognize net income or loss. Net operating expenditures in exce users’ assessments are treated as accounts receivable on the EWA’s books and chargr users’ accounts in the following year. Conversely, users’ assessments in excess o operating expenditures are treated as a liability and credited against users’ accounts, in the following year. Under this basis, net operating expenditures for the EWA to $524,883 in fiscal year 1997. The financial statements of the EWA can be obtainc 6200 Avenida Encinas, Carlsbad, California 92009. The City accounts for its portion of the Facility as a fixed asset of the Sewer Enter Fund. Encina Financing Joint Powers Authority: The Encina Financing Joint Powers Authority (the Authority) was created on Februa 1989 between the City of Carlsbad (Carlsbad), the City of Vista (Vista), the Buena ’ Sanitation District (Buena) and the Leucadia County Water District (Leucadia). primary purpose of the Authority is to issue revenue bonds in order to financt I expansion of the Facility. The Authority is governed by a Board of Directors, which consists of one dir appointed by each member. The financial statements of the Authority can be obtain the City of Carlsbad’s City Hall. CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) [ 19) Joint Ventures. (Continued) Encina Financing Joint Powers Authority, (Continued): In August 1989, the Authority issued $33,500,000 of revenue bonds and executed installment purchase agreements for approximately the same amount. In February 1997, bonds were issued by the Authority to refinance and defease the outstanding bonds. Two of the members (Buena and Vista) defeased their 1989 obligations through available funds; while Carlsbad and Leucadia refinanced their obligations. Repayment of the bonds will be accomplished through payments made by Carlsbad and Leucadia pursuant to the new installment purchase agreements. The individual agreements set forth the purchase price and specify the debt service requirements for each member. The following is a table of the outstanding balance owed as of June 30, 1998 by each member and their approximate share in the additional capacity generated by the expansion. Member Balance Share City of Carlsbad $10,675,000 3 8% Leucadia County Water District 7,285,000 24% City of Vista 18% Buena Vista Sanitation District 20% $17.960.000 100% Installment Approximate - The installment balances are secured by a pledge of the revenues from each member’s wastewater system, net of a deduction for maintenance and operating costs. Significant covenants within the agreements require the members to maintain insurance on the facility, and 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 1.25 times the annual installment payments due. The City’s share in the accounts of the Authority is recorded in the Sewer Enterprise Fund. The expansion of the Facility is shown as a fixed asset of the Sewer Enterprise Fund. (20) Participation in San Diego Association of Governments (SANDAG) The City is a member of the San Diego Association of Governments (SANDAG), a joint powers agreement for the purpose of engaging in regional cooperative comprehensive planning, to assist the Member Agencies, and to provide a regional reviewing organization for certain federal and state grant projects. SANDAG is currently comprised of 18 incorporated Cities from the San Diego region and the County of San Diego. 78 I I I I 8 u I I N I 1 I I 1 I I 79 1 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (2 1) Retirement Plan Plan Description The City of Carlsbad contributes to the California Public Employees Retirement Sy (PERS), an agent multiple-employer public employee defined benefit pension PERS provides retirement and disability benefits, annual cost-of-living adjustments death benefits to plan members and beneficiaries. PERS acts as a common invest and administrative agent for participating public entities within the State of Califc Benefit provisions and all other requirements are established by state statutes and ordinance. Copies of PERS’ annual financial report may be obtained from their exec office: 400 P Street, Sacramento, California 95814. Funding Policy Participants are required to contribute 7% (9% for safety employees) of their ar covered salary. The City makes the contributions required of City employees on behalf and for their account. The City is required to contribute at an actual determined rate; Ihe current rate is 3.654% for non-safety employees, and 8.3469 safety employees of annual covered payroll. The contribution requirements of members and the City are established and may be amended by PERS. Annual Pension Cost For 1998, the Ciiy’s annual pension cost of $1,599,407 for safety and $1,683,88. miscellaneous to PERS was equal to the City’s required and actual contributions. required contribulion was determined as part of the June 30, 1996, actuarial valu using the entry age normal actuarial cost method. The actuarial assumptions include 8.5% investment rate of return (net of administrative expenses), (b) projected ar salary increases that vary by duration of service, and (c) 2% per year cost-of-1 adjustments. Both (a) and (b) included an inflation component of 4.5%. The actL value of PERS assets was determined using techniques that smooth the effects of s term volatility in the market value of investments over a four-year period (smoc market value). PERS unfunded actuarial accrued liability is being amortized as a percentage of projected payroll on a closed basis. The remaining amortization perio miscellaneous employees at June 30, 1998 is through June 30,2018, for safety emplc at June 30, 1998, it is through June 30,2000. Two-Year Trend 1 nformation for PERS (Safety) Fiscal Year Annual Pension Percentage of Net Pen Obliga Ending Cost (APC) APC Contributed 613 0195 $1,576,832 100% $C 613 0196 1,728.732 100% c u I CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (2 1 ) Retirement Plan, (Continued) Two-Year Trend Information for PERS (Miscellaneous) Fiscal Year Annual Pension Percentage of Net Pension Ending Cost (APC) APC Contributed Obligation 613 0195 $2, I8 1,536 100% $0 613 0196 2,204,975 100% 0 Required Supplementary Information Funded Status of Plan (Safety) Entry Age Normal Actuarial Unfunded Annual UAAL Accrued Value Liability1 Covered As a % of Valuation Date Liability of Assets (Excess Assets) Funded Status Payroll Payroll 6130194 $34,236,850 $35,653,565 $(1,416,715) 104.1% $7,414,171 (19.108%) 6130195 38,007,637 39,022,824 (1,015,187) 102.7% 7,676,175 (1 3.225%) 6130196 43,249,17 1 44,92 1,453 (1,672,282) 103.9% 8,004,014 (20.893%) Funded Status of Plan (Miscellaneous) Entry Age Normal Actuarial Unfunded Annual UAAL Accrued Value Liability/ Covered As a % of Valuation Date Liabilitv of Assets (Excess Assets) Funded Status Payroll Payroll 6130i94 $36,60 1.585 538,187,762 $( 1,586,177) 104.3% $14,587,737 (10.873%) 6130195 40,766.308 42,69 I, 163 (1,924,855) 104.7% 15,124,966 (1 2.726%) 6130196 49,062,007 50,057,957 (995,950) 102.0% 14,139,2 19 (7.044%) (22) Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to substantially all full-time employees, permits them to defer a portion of their salary until future years. Amounts deferred may not exceed the lesser of $8,000 or 25% of a participants’ “includable compensation,** as defined in the participation agreement. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. 80 I 1 1 I 1 (I i I I 1 II B 8 u I I m 1 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (22) Deferred Compensation Plan, (Continued) All amounts of compensation deferred under the plan, ail property and rights purch with those amounts, and all income attributable to those amounts, property or right (until paid or made available to the employee or other beneficiary) solely the propertj rights of the City (without being restricted to the provisions of benefits under the p subject only to the claims of the City’s general creditors. Participant’s rights unde plan are equal to those of general creditors of the City in an amount equal to the market value of the deferred account of each participant. The City believes it has no liability for losses under the plan but does have the dui due care that would be required of an ordinary prudent investor. The City believes tl is highly unlikely that it will use the assets to satisfy the claims of general creditors ii future. As of January 1, 1997, the City formally established a trust in accordance with Intc Revenue Code Section 457(g) for one of its deferred compensation plans to prc protection from the claims of the employer’s general creditors. The defi compensation assets placed in the trust have been removed from the balance sheet June 30, 1998, the deferred compensation assets not held in a trust account, but incl in an Agency fund, were $3,600,462, carried at market value. Distributions are made upon the occurrence of the participant’s termination, retiren death or unforeseen emergency, and in a manner in accordance with the election mad the participant. As required by Section 1.457-2Cj) of the Internal Revenue Sei regulations, plan assets not held in trust are held as unrestricted City assets subject on the claims of the general creditors of the City. (23) Post-Retirement Health Care In addition to the pension benefits described in Note 22, per Resolution 614, all fo employees of the Carlsbad Municipal Water District (including dependents) are elij for post-retirement health care benefits if they voluntarily retire after the age of 50 no less than 5 years of service and whose age combined with years of service equals ’ more. Currently. nine retirees meet these eligibility requirements and are recej benefits. The City pays for 100% of the premiums for health insurance which is coordinated Medicare and other benefits provided by federal and state law, when available, tc extent it reduces the cost of insurance premiums. Expenditures for post-retirement h care benefits are funded on a pay-as-you-go basis. Expenditures of approxim $3 1.900 were charged to expense for post-retirement health care costs during 1997-1 Based on an actuarial valuation performed as of November 1991, the District’s lial for the current and past service costs of these benefits is approximately $1,600,000. I 81 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (24) Segment Information for Enterprise Funds The City maintains four enterprise funds that provide water, sewer and other services. Segment information for the year ended June 30, 1998 is as follows: Carlsbad Municipal Water Golf Solid District Course Sewer Waste Totals Operating revenues $1 5,726,192 162,409 5,524,059 578,434 2 1,99 1,094 Operating expenses: Depreciation 1,227,696 - 1,256,3 53 546 2,484,595 Plant operations 13.356.183 215.635 2.385.617 109,938 16.067.373 Operating income (loss) 1,142,3 13 (53,226) 1,882,089 467,950 3,439,126 Nonoperating activities: Property taxes 860,112 - - 860,112 Other, net 1,192.132 127,072 1,355,472 84.1 13 2,758,789 Net income (loss) $ 3,194,557 73,846 3,237,561 552,063 7.058,027 Contributed capital: Beginning balance $48,195,324 4,695,190 43,773,501 970 96,664,985 Current year additions 5,981,377 490,000 6,035,100 2,45 1 12.508.928 Ending balance $54,176.701 5.1 85,190 49.808,601 3,421 109,173,913 Fixed assets: Additions $ 3.3 10.1 93 552,780 1.276,076 5,139.049 Net working capital $29,180.617 2.081.398 36.307.380 1.786.532 69.355.927 ~ Long-Term liabilities $ 6.887.754 1.252-171 1 1.330,107 - 19.470.032 Total assets $95,429,460 8,873,286 89,459,327 1,794,792 195,556,865 Total liabilities 11.121.625 4,747.502 13.288.510 6.054 29.163,691 Total equity $84,307.835 4.125-784 76,170.817 1,788.738 166,393.174 82 I I I 1 8 I 1 I I I I I 8 I I I CITY OF CARLSBAD Notes to General Purpose Financial Statements I (Continued) (25) Special Assessment Bonds Without Government Commitment As of June 30, 1998, the City has six series of Assessment District Bonds outstandii the amount of $31,036,867. These bonds were issued under the provisions oj Improvement Bond Acts of 19 1 1 and 19 15 and were used to finance public infrastruc improvement projects. Reserve funds of approximately $2,997,200 are held to st payment of principal and interest on the outstanding bonds. For the bond issuances noted above, the City is not obligated in any manner foi payment of debt service in the event of default by the property owners but is only ac as agent for the property owners in collecting the assessments, forwarding the collec to bondholders, and initiating foreclosure proceedings, if appropriate. According11 liability for these bond issuances has been recorded in the General Long-Term Account Group and all debt service transactions have been recorded in an Agency fur (26) Mortgage Revenue Bonds -- Multi-Family Housing Revenue Bonds are issued to provide construction and perm2 financing to developers of multi-family residential rental projects located in the City 1 partially occupied by persons of low or moderate income. The total mortgage rev bonds outstanding as of June 30, 1998 is $3 1,035,000. The bonds, together with int thereon, are limited obligations of the City payable solely from bond proceeds, reve and other amounts derived solely from home mortgage and developer loans secure first deed of trusl., irrevocable letters of credit, and irrevocable surety bonds. Ir opinion of City officials, these bonds are not payable from any revenues or assets o City, and neither the full faith and credit nor the taxing power of the City of Carlsbac State of California, nor any political subdivision thereof, is obligated to the payme the principal or interest on the bonds. Accordingly, no liability has been recorded ii General Long-Term Debt Account Group. I (27) Industrial DeveloDment Bonds The Industrial Development Authority (Authority) of the City has issued $3,270,0( Industrial Development Revenue Bonds. Any costs relating to the issuance of the Bc as well as the principal and interest payments, are to be paid by the private 1 benefiting from the Bond issue. 1 83 CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (28) Commitments and Contingencies The City is a defendant in certain legal actions arising in the normal course of operations. In the opinion of management and legal counsel, any liability resulting from these actions will not result in a material adverse effect on the City’s financial position, because the City has set aside sufficient monies to cover confirmed adverse actions. (29) Evaluation of Computer Systems It is not certain what impact any “Year 2000” (Y2K) software/hardware deficiencies might have on the operations or systems of the City, or upon the operations or systems of the various vendors and government agencies that provide services or funds to the City. Management believes that any undetected or uncorrected “Year 2000” softwarehardware deficiencies will not cause a significant disruption of City operations. The scope of an audit does not include an evaluation of the adequacy of management’s plans to detect or correct any “Year 2000” software/hardware deficiencies. In late 1993, the City began a systematic upgrade of its hardware and software as part of its normal business plan. Systems had not been upgraded for many years, and many software vendors had notified the City that support would be (or already was) discontinued. The year 2000 issue did not prompt the upgrades. However, the City understands that any upgrades and/or replacements should be Y2K compliant. No funds have been expended or budgeted specifically for the Y2K issue. The issue has been addressed, however, as part of the City’s regular upgrade process. (30) Proposition 2 18 Recent developments, including the voters’ enactment of Proposition 2 1 8 in November 1996, have affected the manner in which local government may impose, extend or increase certain taxes, assessments and property-related fees. The more significant changes which may effect local government revenue streams are as follows: 1. If there is a majority protest against an assessment, the assessment cannot be imposed. This means that increasing an assessment requires majority voter approval. Certain fees are defined as property-related. Some property-related fees require voter approval at an election; others allow for a majority protest but do not require an election. Property-related fees must comply with certain substantive provisions of Proposition 21 8, which generally limit the amount of the fees. Any local tax, assessment, fee or charge is subject to reduction or repeal by initiative. 2. 3. 84 I I I 1 I 1; I 1 I 1 8 8 I I I I I I I CITY OF CARLSBAD Notes to General Purpose Financial Statements (Continued) (30) Proposition 21 8. (Continued) Uncertainty exists as to the scope and impact of these developments on local govc revenue streams. Future legislation and litigation may resolve some oi uncertainties. 85 86 I I II I 8 I I I I IC 6 P 1 I I 1 I I GENERAL FUND The General fund is used to account for resources traditionally associated with govern] which are not required legally or by sound financial management to be accounted for in an( fund. Administrative - 7-w ?&- w == SiE- - Polic ylLeadership I a7 CITY OF CARLSBAD General Fund Schedule of Revenues - Budget and Actual Budgetary Basis Year Ended June 30, 1998 Actual on Variance- Budgetary Over Budget Basis (Under) Property taxes S 12,300,000 12,410,095 1 10,095 Sales and use taxes 14,120,000 14,817,057 697,057 Transient occupancy taxes 5,500,000 6,046,092 546,092 Franchise taxes 1,580,000 1,7 13,526 133,526 265,53 0 Real property transfer taxes 5 70,000 835,530 Total taxes 34,070,000 35,822,300 1,752,300 Construction permits 1,800,000 2,094,523 294,523 Business licenses 1,700,000 1,603,744 (96,2 5 6) 172,990 Other 1 ,o 12,000 1,184,990 Total licenses and permits 4,5 12,000 4,883,257 37 1,257 Taxes: Licenses and permits: Intergovernmental: State subventions: - 134,103 Grant revenue 134,103 Vehicle license fees 2,800,000 2,970,189 170,189 Property tax reimbursement 205,000 234,323 29,323 199,512 Total state subventions 3,005,000 3,204,5 12 Charges for services: Planning fees 1,200,000 1,148,3 96 (5 1,604) Building department fees 1,270,000 1,393,860 123,860 Engineering fees 2,500,000 2,3 27,574 (1 72,426) Ambulance fees 700,000 7 47,42 5 47,425 Parks and recreation fees 1,040,000 985,942 (54,058) Property rentals 170,000 221,087 5 1,087 Other 511,000 595,863 84,863 Total charges for services 7,391,000 7,420,147 29,147 Fines and forfeits: Vehicle code fines 434,000 330,747 (1 03,253) Other 57 1 57 1 Total fines and forfeits 434,000 33 1,3 18 (1 02,682) - Investment income 1,425,000 1,589,461 164,46 1 Interdepartmental services: Engineering - 538,955 538,955 - 184,836 Portfolio management 184,836 Other 1,650,000 1,195,550 (4 5 4,4 5 0) Total interdepartmental services 1,6jO,OOO 1,919,341 269,341 - 2,000 2,000 - 25 1,060 Donations Miscellaneous: Reimbursed expenditures 25 1,060 Other 529,000 437,303 (9 1,697) Total miscellaneous 529,000 688,363 159,363 Total revenues $ 53,016,000 55,994,802 2,978,802 a8 CITY OF CARLSBAD General Fund Schedule of Expenditures - Budget and Actual Budgetary Basis Year Ended June 30, 1998 I 1 I li I I I I I I E I 1 I 1 1 89 Actual on Va Budgetary c Budget Basis (U I General government: Policy and leadership group: City council $ 192,883 187,825 City manager 88 1,413 869,150 City clerk 36 1,520 351,384 City attorney 61 1,553 605,237 City treasurer 126,027 100,827 Total policy and leadership group 2,173,396 2,114,423 Finance 1 , 147,626 1,098,652 Purchasing 46 1,546 446,198 Human resources 1,353,424 1,323,725 Total administrative services 2,962,596 2,868,575 Administrative services: Non-departmental 1,989,09 1 933,O 14 (1 Total general government 7,125,083 5,916,012 (1 Public safety: Police protection 10,379,621 10,212,253 Fire protection 7,748,433 7,739,648 Total public safety 18,128,054 17,95 1,90 1 Community development: Administration 575,705 537,553 Geographic information systems 224,95 1 183,32 1 Economic development 124,230 98,542 Planning 2,415,595 2,117,207 Building inspection 1,294,034 1,246,159 Total community development 4,634,5 15 4,182,782 Library 2,867,347 2,764,832 Cultural arts 3 11,690 299,572 Park planninghecreation 2,722,839 2,67 1,4 1 1 Senior programs 308,395 268,535 Total community services 6,210,271 6,004,3 50 Administration 87,843 82,270 Engineering 4,373,272 4,362,843 Park maintenance 1,976,212 1,855,177 Street and signal maintenance 2,23 9,3 00 2,194,296 Facilities maintenance 1,445,98 1 1,446,444 Total public works 10,122,608 9,94 1,03 0 1 Community services: i Public works: Total expenditures $ 46,220,531 43,996,075 (2 CITY OF CARLSBAD General Fund Comparative Schedule of Revenues Year Ended June 30, 1998 1997 1998 Increase Actual Actual (Decrease) Property taxes $ 1 1,238,207 12,4 10,095 1,171,888 Sales and use taxes 12,495,143 143 17,057 2,321,914 Transient occupancy taxes 3,675,472 6,046,092 2,370,620 Franchise taxes 1,512,823 1,7 13,526 200,703 Real property transfer taxes 465,668 835,530 369,862 Total taxes 29,387,3 13 35,822,300 6,434,987 83 2,3 46 Construction permits 1,262,177 2,094,523 Business licenses 1,5 10,462 1,603,744 93,282 Other 1,065,434 1,184,990 1 19,506 Total licenses and permits 4,234,652 4,883,257 648,605 Taxes: Licenses and permits: License tax on new construction 396,529 - (3 96,529) Intergovernmental: State subventions: Grant revenue 567,775 134,103 (43 3,672) Vehicle license fees 2,666,452 2,970,189 3 03,737 Property tax reimbursement 219,088 234,323 15,235 Total state subventions 2,885,540 3,204,5 12 3 18,972 Planning fees 1,649,806 I, 148,396 (50 1,4 10) Building department fees 943,739 1,393,860 450,121 Engineering fees 3,O 13,3 13 2,327,574 (68 5,73 9) Ambulance fees 574,692 747,425 172,733 Parks and recreation fees 924,840 985,942 61,102 Property rentals 133,895 221,087 37,192 Other 607,117 595,863 (11,254) Total charges for services 7,897,402 7,420,147 (477,255) Vehicle code fines 305,721 3 3 0,747 25,026 Other 12,171 57 1 (1 1,600) Total fines and forfeits 3 17,892 33 1,3 18 13,426 Investment income 1,157,9 12 1,589,46 1 43 1,549 Interdepartmental services: Engineering 425,993 538,955 112,962 Portfolio management 223,368 184,836 (3 8,5 3 2) Other 1,393,142 1,195,550 (197,592) Total interdepartmental services 2,042,5 03 1,9 1 9,34 1 (123,162) Donations 24,440 2,000 (22,440) Miscellaneous: Reimbursed expenditures 1,223,285 25 1,060 (972,225) Other 263,482 437,303 17332 1 Total miscellaneous 1,486,767 688,363 (798,404) Total revenues $ 50,002,196 55,994,802 5,992,606 Charges for services: Fines and forfeits: 90 CITY OF CARLSBAD General Fund Comparative Schedule of Expenditures Year Ended June 30, 1998 I 1 1 I I a I I I U I 1 1 I II 1 c 1997 1998 Incre Actual Actual (Decrc General government: Policy and leadership group: City council $ 198,867 187,979 (1' City manager 903,568 829,595 (7: City clerk 336,4 17 295,918 (4' City attorney 568,277 604,OO 1 3. City treasurer 112,087 100,885 (1 Total policy and leadership group 2,119,216 2,018,378 (101 Finance 1,084,277 1,066,915 (L Purchasing 39 1,747 414,684 2; Total administrative services 2,467,158 2,650,900 18: Administrative services: Human resources 991,134 1,169,30 1 171 Non-departmental 1,030,742 771,101 (255 Total general government 5,617,116 5,440,379 (17t Police protection 9,657,322 10,3 10,748 65: Fire protection 7,234,412 7,597,003 3 6: Public safety: Total public safkty 16,891,734 17,907,75 1 1,Olt Administration 570,161 510,015 (6( Geographic information systems 161,627 142,738 (12 Economic development 101,747 99,820 ( Planning 2,002,143 2,215,3 55 21: Community development: m Building inspection 1,076,9 12 1,267,581 19( Total community development 3,912,590 4,23 5,509 3 22 Library 2,534,746 2,769,284 23L Community services: Cultural arts 287,842 284,165 (C Park planninghecreation 2,6 12,929 2,622,327 5 Senior programs 257,110 268,196 11 Total community services 5,692,627 5,943,972 25 1 Public works: Administration - 86,279 8( Engineering 3,682,93 9 4,174,293 49. Park maintenance 1,859,278 1,854,760 (L Facilities maintenance 1,178,285 1,303,571 121 Total public works 8,449,125 9,554,095 1,101 Street and signal mainteriance 1,728,623 2,13 5,192 40( Total expenditures $ 40,563,192 43,08 1,706 2,511 1 91 SPECIAL REVENUE FUNDS Special Revenue funds are used to account for specific revenues whose expenditures are restricted by law or administrative regulation to specified purposes. Affordable Housing To account for receipt of fees charged to developers to provide funding assistance for affordable housing needs of lower and moderate income households. Calavera Heights Mitigation To account for the funding of a maintenance and management program of the Calavera Heights Gnatcatcher Mitigation Preserve. Civic Arts Program To account for transfers from the General fund to support the civic arts program. Community Development Block Grant To account for federal block grants and commercial and residential loans for community development. Donations and Bequests To account for donations, scholarships, bequests and endowments received from both outside parties and the General fund, designated for specific City purposes. Federal Grants To account for federal grants received to support the City’s law enforcement and fire mitigation programs. Gas Tax To account for receipts and expenditures of money apportioned under the Streets and Highways Code of the State of California. Library Audio-Visual Insurance To account for revenues and expenditures on rental of audio-visual materials. 92 I 1; I 1 SPECIAL REVENUE FUNDS (CONTINUED) Low and Moderate Income Housing To account for money administered by the Carlsbad Redevelopment Agency for designated and moderate income housing. I Police Asset Forfeiture I confiscated from illegal activities. To account for money received under federal and state programs distributing pro1 Section 8 HousinP Authorh To account for federal grants for low and moderate income rental assistance payments. c I I I I I I 1 I I I Senior Nutrition To account for money received and expenditures for senior programs under the Older Ameri Act. Special Benefit Districts To account for revenues and expenditures from property tax assessments for street ligh E landscaping and channel dredging. State Grants To account for State of California library, civic arts and law enforcement grants. e cp Public Works m 93 cin OF CARLSBAD Special Revenue Funds Combining Balance Sheet June 30, 1998 Calavera Community Affordable Heights Civic Arts Development Donations Federal Housing Mitigation Program Block Grant and Bequests Grants Assets Cash and investments $ 6,506,764 126.620 3 14,247 5.209 1,750,081 124,241 Receivables: Loans 200,000 5,568 Taxes Accounts, net Due from other governments 457,642 Prepaid expenditures 909 Total assets $ 6,706,764 126,620 3 14,247 469,328 1,750,08 1 l24,24 1 Liabilities and Fund Balances Liabilities: Accrued liabilities $ 9,638 169,339 20,071 Due to other funds 288,437 6,843 Due to other governments 1,362 Deferred revenue 500 Total liabilities 9,638 459,138 20.571 6,843 Fund balances: Reserved for: Loans receivable 200.000 5,568 Prepaid expenditures 909 Low and moderate Encumbrances 8,593 45,000 97,717 6,945 5,704 Designated for Desginated for Undesignated 2,863.070 126,620 153.309 (94,004) 1,716,278 income housing 3,625,463 Unreserved: approved capital projects 115.938 continuing appropriations 6,287 I 1 1,694 Total fund balances 6,697,126 126,620 3 14.247 10,190 1,729,510 117,398 Total liabilities and fund balances $ 6,706.764 126,620 3 14,247 469,328 1,750,08 I l24,24 I 94 i I i I I I I I I I I H 1 I I 1 95 Low and Library Moderate Police Section 8 Special Gas Audio-Visual Incomc: Asset Housmg Senior Benefit State Tax Insurance Housing Forfeiture Authority Nutrition Districts Grants Totals -- 6,052,448 17,696 1,664,745 40 1,435 266,925 10 2,41 1,951 343,386 19,985, 2,409,933 2,615, 10,957 16,316 27. 17.151 80 1 15,828 33, 35,102 492, 909 183.266 185, 17,696 4,086,544 401,435 467,342 35.9 I3 2,444,095 343,386 23.340, -- -- -- 6,052,448 35,523 15,505 1.394 19,049 61,372 16,398 I 14,825 68,143 531, 19,515 6,348 321, 3 17,815 3 19, I 35,523 15,505 1,394 19,049 379,187 35,9 13 114,825 74,49 1 1,172, -- -- 2,409,933 2,615, 9 09 183,266 185, 500,COO 4,125, I 29,085 6,797 654 5,017 1,235 9,5 I3 I0,24 1 226, 836.752 952. 25,000 2,000 144. (4.606) 1,173,654 352,369 (96,316) 2,317,757 258,654 13.917, I 6,O 16,925 2,191 4,085.1 50 382,386 88,155 2,329,270 268,895 22,168 -- 5,15 1,088 -- 17,696 4.086.544 401,435 467,342 35,933 2,444,095 343J 86 23,340 -- -- 6.052,448 CrrY OF CAIILSBAII Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year Ended June 30, 1998 Calavera Community Affordable Heights Civic Arts Development Donations Federal Housing Mitigation Program Block Grant and Bequests Grants Revenues: Taxes $- Intergovernmental 755,633 935,000 85,026 Charges for services Investment income 3 15,667 7,324 18,471 45 73,708 4,234 Contributions from property owners 1,240,949 268,750 Donations 12 1,928 Miscellaneous 605,414 1,300 Total revenues 2,162,030 7,324 18,471 755,678 1,400,686 89,260 Expenditures: Current: Public safety 46,534 Community development 143,602 752,589 899 Community services 19,705 106,980 5,000 Public works Total expenditures 143,602 19,705 752,589 106,980 52,433 Excess(deficiency) of revenues over (under) expenditures 2;018,428 7,324 (1,234) 3,089 1,293,706 36,827 Other financing sources (uses): Operating transfers in 227,000 9,447 Operating transfers out (9) Total other financing sources (uses) 227,000 9,438 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 2,018,428 7,324 (1,234) 3,089 1,520,706 46,265 Fund balances at beginning of year 4,678,698 1 19,296 3 15,481 7,101 208,804 71,158 Residual equity transfers in Residual equity transfers out (25) Fund balances at end of year X 6.697,126 126,620 3 14,247 1 0,190 1,729,s 10 117,398 96 d 1 1 I U I I 1,6 10,624 75,615 629,716 - 115,916 2,647,430 209,435 1,877,573 394,765 - E I I E I 1 Low and Library Moderate Police Section 8 Special Distncts Gas Audio-Visual Income Asset Housing Senior Benefit State Grants - # TLK Insurance Housing - Forfeiture Authority Nutrition 1,300,73 1 302,097 78,527 2,567,339 113,322 373,978 3 0 9,8 9 3 2,121 322,069 37,389 16,605 123,171 20,787 73,494 1,616,203 96,113 5,550 - 63,486 138,199 - 519,301 157,456 114,172 209,435 273,546 65,186 2,696,75 1 336,305 - 1,546,701 - 336,305 114,172 65,186 - 519,301 2,696,751 209,435 1,546,701 43 1,002 - 1,274,3 19 (38,557) 564,530 - (403,385) (49,321) 330,872 (36,237) - (7,500) - (9,447) - (7,500) - (9.447) - I 1,266,819 (38,557) 564,530 (412,832) (49,321) 330,872 (36,237) 1 4,750,106 40,748 3,520,6211 795,218 137,476 1,998,398 305,132 - - - - 6,016,925 2.191 4.085,153 - 182.386 88,155 2,329,270 268,895 - I I 1 97 CITY OF CARLSBAD Special Revenue Funds Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis) Year Ended June 30, 1998 Affordable Housing Trust Calavera Heights Mitig Actual on Variance- Actual on V Budgetary Over Budgetary ( - Budget Basis (Under) Budget Basis Revenues: Taxes $ - - - - Intergovernmental - - Charges for services - Investment income 3 15,000 3 15,667 667 - 7,324 Contributions from property owners 9 15,000 1,240,949 325,949 - - Donations - - - Miscellaneous 82,200 605,4 14 523,214 - - - - Total revenues 1,3 12,200 2,162,030 849,830 7,324 Expenditures: Current: Public safety - - Community development 291,883 143,834 (148,049) - - Community services - - - Public works - - - - - Total expenditures 291,883 143,834 (148,049) - - - Excess (deficiency) of revenues over (under) expenditures $ 1,020,3 17 2,018,196 997,879 7,324 - - - 98 1 i I 1 1 I I I 1 - - 8 I - - - 1 f (1 69,895) (46,234) 123,661 (647,6 14) (93,488) 554 8 I I I B Civic Arts Program Community Development Block G Actual on Variance- Actual on Var i anc Budgetary Over Budgetary Over Budget Basis (Under) Budget Basis (Under - - - - 6 18,000 755,633 137 - - - - 10,748 18,47 1 7,723 200 45 - - - - i 10,748 18,471 7,723 6 18,200 755,678 137 - - - - - - 1,265,814 849,166 (416 180,643 64,705 (1 15,938) - 180,643 64,705 (1 15,938) 1,265,814 849,166 (416 (Continue 99 CITY OF CARLSBAD Special Revenue Funds Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis) Year Ended June 30, 1998 Donations and Bequests Federal Grants Actual on Variance- Actual on Va Budgetary Over Budgetary ( Budget Basis (Under) Budget Basis (C Revenues: Taxes $- - - Intergovernmental 935,000 935,000 - 85,026 Charges for services - Investment income 13,300 73,708 60,408 4,234 Contributions from property owners - 268,750 268,750 - - Donations 133,400 121,928 (1 1,472) - Miscellaneous - 1,300 1,300 3,700 - 4 Total revenues 146,700 1.400,686 1,253,986 3,700 89,260 I Expenditures: Current: - - 160,671 (1: Public safety 290,096 Community services 209,5 19 120,2 12 (89,307) 5,000 5,000 Public works - - - Community development - - 3,292 4,160 Total expenditures 209,5 19 120,2 12 (89,307) 298,388 169,831 (12 Excess (deficiency) of revenues over (under) expenditures $ (62,819) 1,280,474 1,343,293 (294,688) (80,571) 21 100 4 f B I I I 1 1 I - - - I 1 - - 1 I: fi 1 I Gas Tax Library Audio-visual Insura Actual on Variance- Actual on V2 Budgetary Over Budgetary Budget Basis (Under) Budget Basis 3 1,280,000 I ,300,73 1 20.73 1 - - - 73,500 73,494 ' 300:OOO 309,893 9,893 2,500 2,121 - - - - - - - - - - - - - - n 1,580,000 1,6 10,624 30,624 76,000 75,615 - - - - - - 129,393 120,969 1 1,418:351 368,992 (1,049,359) - - - 1,418,35 1 368,992 (1,049,359) 129,393 120,969 - 16 1,649 1,241,632 1.079,983 (53,393) (45,3 54) (CC 101 CITY OF CARLSBAD Special Revenue Funds Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis) Year Ended June 30, 1998 Low & Moderate Income Housing Police Asset Forfeiture Actual on Variance- Actual on Vari Budgetary Over Budgetary 0 Budget Basis (Under) Budget Basis (Ur Revenues: Taxes $ 300,000 302,097 2,097 - Charges for services - - - Contributions from property owners - - - Donations - - - Miscellaneous - 5,550 5,550 - - - Intergovernmental 76,800 78,527 1 Investment income 75,000 322,069 247,069 4 1,600 37,389 (4 Total revenues 375,000 629,716 254,7 16 1 18,400 115,916 (2 Expenditures: Current: Public safety - - 722,680 551,895 (170 Community development 126,162 7 1,285 (5 4 , 87 7) - Community services - Public works - - - Total expenditures 126,162 71,285 (54,877) 722,680 551,895 (170 Excess (deficiency) of revenues over (under) expenditures $ 248,838 558,431 309,593 (604,280) (435,979) 168. 102 rt 1 U I I I I 18,700 16,605 (2,095) - - # II 1c 1 1 I I I 1 1 I Section 8 Houzing Senior Nutrition Actual on Variance- Actual on Budgetary Over Budgetary - Budget Basis - (Under) Budget Basis - - - - - 2,703,534 2,567,330 (136,195) 107,264 1 13,322 - - - - - - - - - - - - 95,300 96,113 - - 63,486 (36,5 14) - 100,000 E 2,822,234 2,647,430 - (174,804) 202,564 209,435 - - - - 3,113,400 2,695,590 (41 7,8 10) - - - - 209,037 209,480 - - - - - 3,113,400 2,695,590 - (4 17,8 10) 209,480 209,037 - - (48,160) - 243,006 (69 16) 398 - (29 1,166) (( 103 CITY OF CARLSBAD Special Revenue Funds Combining Schedule of Revenues and Expenditures - Budget and Accual (Budgetary Basis) Year Ended June 30, 1998 Special Benefit Districts State Grants Actual on Variance- Actual on Val Budgetary Over Budgetary ( Budget Basis (Under) Budget Basis (TJ Revenues: Taxes $- - - Intergovernmental - - - 367,300 373,978 Charges for services - - Investment income 123,600 123,171 (429) 20,400 20,787 Contributions from property owners 1,522,000 1,616,203 94,203 - - Donations - - - Miscellaneous 127,700 138,199 10,499 - - - Total revenues 1,773,300 1,877,573 104,273 387,700 394,765 Expenditures : Current: - - Public safety 160,4 1 1 158,822 I Community services 348,972 283,787 (t Total expenditures 177,024 1,552,869 (244,155) 509,383 442,609 (6 Community development - - - Public works 1,777,024 1,552,869 (224,155) - - - - - Excess (deficiency) of revenues over (under) expenditures $ (3,724) 324,704 328,428 (1 2 1,683) (47,844) (7 104 I d 1 I I I U li s 1 I - 1 I 8 I 1 Totals Actual on Variance- Budgetary Over Budget - Basis (Under) 1.580,OOO 1,602,828 22,828 3,872,898 4,908,825 1,035,927 1 92 1,048 1,25 1,484 33 0,43 6 2,437,000 3,125,902 68 8,902 228,700 2 1 8,04 1 (1 0,659) 3 13,600 - 813,949 500,349 9,426,746 - I 1,994,523 2.567,777 73,500 73,494 (6) 1,173,187 871,388 (3 0 1,799) 4,800,55 1 3,764,035 (1,036,5 16) 1,083,OO;’ 803,710 (2 7 9,2 9 7) I 3,195,3 751 - 1.92 1,86 1 (1,273,5 14) 10,252,120 - 7,360,994 (2,891,126) (825,3 74) - 4,633,529 5,45 8,903 (Concluded) & 105 r 106 1 1 s II I 1 m DEBT SERVICE FUNDS Debt Service funds are used to account for accumulation of resources for, and paymen principal and interest on the City's general bonded debt and special assessment bonds for M the City is obligated in some manner. College Boulevard To accumulate property assessments levied for payment of debt service on 1986 Col Boulevard Assessment District Bonds. Hosp Grove COPS To account for paymenf of debt service on the 1997 Certificates of Participation (1 Refunding) issued to purchase Hosp Grove. SI Redevelopment Bonds I Carlsbad Redevelopment ,4gency. To account for payment of debt service on bonds issued to finance improvements for 8 s 1 I i li 4 8 I 1. 107 CITY OF CARLSBAD Debt Service Funds Combining Balance Sheet June 30, 1998 College Hosp Grove Redevelopment Boulevard COPS Bonds Totals Assets Cash and investments $ 798,890 1,102,647 1,901,537 Receivables: Taxes 43,827 43,827 Accrued interest 15,623 358 15,98 1 Total assets $ 814,513 1,146,832 1,96 1,345 Fund Balances Reserved for debt service 659,500 869.000 1,528,500 Unreserved: Designated for future debt service 155,013 277,832 432,845 Total fund balances $ 8 14,5 13 1,146,832 1,96 1,345 108 I c II JI I I I @ I Miscellaneous 890,629 8' I 4 expenditures (2,l 18,441) (925,573) (406,541) (3,4 I I I II i E ff 1 109 CITY OF CARLSBAD Debt Service Funds Conbining Statement of Revenues, Expenditures and Changes in Fund Balance Year Ended June 30, 1998 College Hosp Grove Redevelopment Boulevard COPS Bonds To Revenues: Taxes $ 5,5 17 1,208,387 1,2 Investment income 32,376 60,826 64,563 1 Total revenues 37,893 60,826 1,272,950 123 Expenditures: Current: Debt service: General government 14,996 Principal retirement 1,020,000 355,000 2 8 8,3 94 1,61 Interest and fiscal charges 245,705 382,666 1,376,101 2,Ol Debt issuance costs 248,733 23 Total expenditures 2,156,334 986,399 1,679,49 1 4,8 Excess (deficiency) cf revenues over (under) Other financing sources (uses): Operating transfers in 800,000 8 Operating transfers out (3 60,000) (3 579,462 5 Proceeds of advances Payment to refunded bond escrow agent (6,486,35 1) (64 6,486,35 1 64 Proceeds of refunding bonds Total other financing 800,000 2 19,462 120 sources (uses) Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (2,l 1 8,44 1 ) (125,573) (1 87,079) (234 Fund balances at beginning of year 2,l 18,44 1 940,086 1,333,9 1 1 433 Fund balances at end of year $ 814,513 1,146,832 139 CITY OF CARLSBAD Debt Service Fund Redevelopment Bonds Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis) Year Ended June 30, 1998 Actual on Variance- Budgetary Over Budget Basis (Under) Revenues: Taxes $ 1,200,000 1,208,387 8,3 87 Investment income 100,000 64,563 (3 $43 7 Total revenues 1,300,000 1,272,950 (27,050, Expenditures: Current: Debt service: General government 18,000 14,996 (3,004) Interest and fiscal charges 1,383,868 1,376,101 (7,767) Principal retirement 288,394 288,394 Total expenditures 1,690,262 1,67949 1 (10,77 1) Excess (deficiency) of revenues over (under) expenditures $ (390,262) (40634 1 ) (1 6,279) 110 I. I 1 c I 1 8 U I 1 t u I I It I 1 8 a 111 CAPITAL PROJECTS FUNDS Capital Projects funds are used to account for the purchase or construction of major capital facilities which are not financed bq Proprietary or Trust funds. Assessment Districts To account for capital projects financed by the issuance of assessment district bonds. Bridge and Thoroughfare Districts To account for receipts of fees charged to developers for street and highway construction. Citv and County Agencies To account for receipts from other cities and the County of San Diego for street construction and improvements. Communitv Facilities District No. 1 To account for civic facilities, freeway interchanges, and road segments financed by Community Facilities District No. 1 (Mello Roos) funding. Federal Grants To account for capital projects financed by federal grants. General Capital Construction To account for transfers from the General fund for various municipal capital projects. Palomar Airport Road East Project To account for funding and expenditures related to construction of Palomar Airport Road at El Camino Real and east to San Marcos city limits. Funding is provided by the cities of San Marcos and Vista, San Diego County Airport. TadTransNet, Traffic Impact fees, and direct developer contributions. Park Development To account for receipts of fees charged to developers for park acquisition and development. Planned Local Drainage Areas To account for receipts of fees charged to deLrelopers for drainage facilities necessitated by grout h . 112 CAPITAL PROJECTS FUNDS (CONTINUED) 1 I I 8 I Public Fac i 1 it ies Cons tru(& To account for receipts of fees charged to developers for specific public facilities su( libraries and fire stations necessitated by growth. Rancho Santa Fe Road Project To account for receipts o F fees charged to developers for Rancho Santa Fe Road constructioi improvements. A community facilities district is proposed. s Redevelopment Agency 1 To account for financial resources segregated for the rehabilitation of commercial and p property and capital projects in the Carlsbad Village area. S a1 e s Tax/TransN et To account for receipts of County sales tax allocated by the San Diego County Reg Transportation Commission to finance transportation projects. State Grants To account for capital projects financed by state grants. I I 1 1 I 1 I I 0 u I Traffic Impact Projects To account for receipts ol’ fees charged to developers for street construction and improvemer Water, Sewer and Maintenance Projects I 113 CITY 01- CARLSL3AD Capital I'roj ccts f-unds Combining Balance Shcet June .30. 1998 Bridge and City and Community General P; Assessment Thoroughfare County Facilities Federal Capital AirF Districts Districts Agencies District No. 1 Grants Construction Eas Assets Cash and investments $ 1,243,200 3,733,813 4.502.356 33.483,932 4 3.356, I29 Receivables: Taxes 190,623 Accounts, net 42,362 Accrued interest 420,000 Due from other funds Due from other governments 8,959 79,414 Advances to other funds 750,000 200,725 Prepaid expenditures Total assets $ 1.243,200 3,733,813 4>502,356 33,674,555 8,963 4.848,630 Liabilities and Fund Balances Liabilities: Accrued liabilities $ 800 108,590 56,722 902.137 7 1,629 Due to other funds 8,959 Advances from other funds Deposits payable Deferred revenue Total liabilities 800 108,590 56,722 902,137 8,959 71,629 Fund balances: Reserved for: Prepaid expenditures 200,725 Advances to other funds 750,000 Encumbrances 47,473 5 1,230 2,044.027 12.90 1,798 75, I83 432,082 Designated for continuing Designated for approved capital prqjects 262.022 1.735.434 294.138 1 0.3 5 3.500 Undcsignated (75,179) Unreserved: appropriations 932,905 1338,559 2,107.469 9,5 17.120 1.873.473 1,520,721 'l'otal fund balances I .242.400 3.625.223 4.445.634 32,772.4 I8 4 4,777,001 Total liabilities and fund balances $ 1.343.200 3,733.813 4.502.356 33,674,555 8.963 4,848:630 114 I 8 I il I 8- 1: 8 3 Planned Rancho Local Public Santa Fe Traffk 1 Park Drainage Facilities Road Redevelopment Sales Tad State Impact Development Facilities Construction - Project Agency TransNet Grants Prqjects IO, 191,284 5,074,829 2 1,800,197 13,O 15,800 2,272,245 6,239,376 469,095 4,OO 1,992 532,430 72,979 30,147 It 2.240 6,903 - 13.015.800 2,382,274 6,239,376 471,335 4,001,992 - - 5,607,259 21.800,197 IO, I9 1,284 839 3,368 23,855 135,039 36,735 17.70 1 295,877 I 2,55;000 750,000 29,800 20,400 I 2,550,839 32 1,368 23,852. 135$039 66,858 537,701 1,066,277 520,000 323 - 3 18,000 - 6,903 I 1 1 li I 11,329 62.222 88,058 559.325 18,759 I, 177,288 19,312 128,695 1 3,960,033 967.628 4,23 1,2415 1,709, I52 301.034 2,628.428 385,564 3,852;866 3,669,083 4,256,041 17.457,04 I 10,612.284 1,988.720 1,895,959 66,459 954, I54 - 7.640,445 5.285,89 I 21.776.342 - 12,880,761 2.3 15.4 16 5,701.675 471.335 2,935,715 IO, 191,284 5.607.259 2 1.800. I9 7 13,015,800 2,382,274 6,239,376 471.335 4,OO 1,992 - - 115 C 1 1 Y 0 F CAR L,S 13 AD Capital l’rqjects Funds Combining Statement of lievenuzs. Expenditures and Changes in Fund I3alance Year Ended June 30. 1998 Bridge and City and Community General P Assessment Thoroughfare County Facilities Federal Capital Air[ Districts Districts Agencies District No. 1 Grants Construction Eas Revenues: Taxes $ 12,322,890 4 18,655 Intergovernmental 48,655 2,602,425 1,194,767 79,745 4 17,725 Charges for services Investment income 78,2 12 228,573 162.559 1,667,125 161,991 Contributions from property owners 115.363 279.280 42,362 Proceeds of debt without government commitment 9,252,162 Miscellaneous 10,488 Total revenues 9,494,392 507,853 2,764,984 15,184,782 79.745 I ,05 1,22 1 Expenditures: Current: General government 586,3 I5 79,034 24 1,784 Capital outlay 9,408,663 835,329 1,158,536 5,156,042 79,475 895,909 Total expenditures 9,994,978 835,329 I, 158,536 5,235,076 79,475 1,137,693 Excess (deficiency) of revenues over (under) expenditures (500,586) (327,476) 1,606,448 9,949,706 270 (86,472) Other financing sources (uses): Operating transfers in 135,000 530.000 Operating transfers out Total other financing sources (uses) 135,000 530.000 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing use (500.586) (327,476) 1,741,448 9.949,706 270 443.528 Fund balances (deficit) at beginning of year 1.742.986 3.952.699 2.704.186 22,822.7 12 (266) 4,333,473 Residual equity transfers out Fund balances at end of year $ 1.242,400 3.625.223 4,445,634 32.772,4 18 4 4,777,OO I 116 4 I I I I- I I I I I I I I I I- Planned Rancho Local Public Santa Fe Traffic n Park Drainage Facilities Road Redevelopment Sales Tax/ State Impact Development Facilities Constructior - Project Agency TransNet Grants Prolects I 1,894 104,187 7,192.837 349,809 46, I68 8 53i841 292.003 1,083,747 738,797 I32,23 1 32 1,033 16,858 2 17,847 1,977,890 769,674 7,467,16f 1,404,250 1,427,901 121,261 1,062 - II 2,508,73 I I ,06 1,677 8,562,805 - 2,247,234 254,554 7,513,870 366,667 1,691,916 385,846 32,087 255,507 474,49:1 - 535,688 536,536 3,484,668 74,694 926,582 32,087 255,507 474,491, - 535,688 922,382 3,484,668 74,694 926,582 2,476,644 806,170 8,088,3 I:! - 1,711,546 (667,828) 4,029,202 29 1,973 765,334 360,000 (1 35,000) - (135,000) 360,000 - 2,476,644 806, I70 8,088,3 1 2 1,576,546 (307,828) 4,029.202 291,973 765,334 5.163.801 4,479,72 1 13.688.0313 11,304,215 2.623.244 1,672,473 179,362 2.170.381 - 5,285,891 21,776,342 - l2,880,76 1 2,3 15,416 5,701,675 471,335 2,935,715 - 7,640,445 t 117 118 4 1 I I I u I i I I I 1 1 1 i I 119 I ENTERPRISE FUNDS Enterprise funds are used to account for operations that are financed and operated in a m similar to private business enterprises - where the intent of the governing body is that the co providing goods or services to the general public be financed or recovered primarily througl u charges. Carlsbad Municipal Water District To account for the opera ion, maintenance, planning, capital facility financing, and all cust service functions of the Carlsbad water system. Golf Course To account for revenues, expenses, and the construction activities of the City’s pro1 municipal golf course. Sewer To account for the opention. maintenance, and capital facility financing of the City’s s system. Solid Waste To account for revenues and expenses of the City’s solid waste source-reduction and recy programs. I Carlsbad Municipal L,, 1 VI Ln‘-I)”nY Enterprise Funds Combining Balance Sheet June 30, I998 Carlsbad Municipal Golf Solid Water District Course Sewer Waste Totals Assets: Current assets: Cash and investments $ 29,764,886 2,823,15 1 37,851,981 1,691,917 72,13 1,‘ Receivables: Taxes 11,527 34,420 45,‘ Accounts, net 3,237,671 66,249 3,303,‘ Due from other governments 94,5 10 94,: Due from other funds 187,357 187,: Inventory 227,970 7,205 235,. Total current assets 33,336,564 2,823,151 38,046,543 1,792,586 75,998,f Restricted assets: Cash and investments 740,876 958,938 1,699,t Accrued interest 6,832 28,492 35,; Total restricted assets 747,708 987,430 1,735,l Fixed assets 76,622,129 6,050,135 66,328,645 2,45 1 149,003 ,C Less accumulated depreciation (15.276.941) (15,903,291) (245) (3 1,180,4 Fixed assets, net 61,345,188 6,050,135 50,425,354 2:206 117,822,E Total assets $ 95,429,460 8,873,286 89,459,327 1,794,792 195,556,E Liabilities and Fund Equity Current liabilities: Accrued liabilities $ 2,539,430 8,720 154,292 6,003 2,708,4 Due to other funds 187,357 187,3 Estimated claims payable 32,000 32,O Current portion of long-term debt 1,05 6, 570 733,033 425,000 2,214,6 Deposits payable 336,956 1,159,87 1 51 1,496,8 Total current liabilities 4,155,947 74 1,753 1,739,163 6,054 6,642,9 Due to other governments 3,634 3,6 Current liabilities payable from restricted assets - accrued interest payable 77,924 16,378 219,240 313,5 2,737,2 Advances from other funds 2,737,200 Deferred revenue 2,070,778 2,070,7 Loan payable 1,896,950 1,896.9 Certificates of participation, net of unamortized issuance costs and deferred charges of $4 14,196 4,990,804 4,990,8 Installment purchase agreement, net of unamortized issuance costs and deferred charges of $990,671 9,259,329 9,259,3 Total liabilities 11,121,625 4,747.50 2 13.288,510 6,054 29,163,6 Contributed capital 51.176.701 5,185.190 49,808>601 3.421 109,173.9 Retained earnings: Reserved for debt service 740,000 942,67 1 1,682,6 Unreserved 29391.134 (1,059.406) 25.419:545 1,785,3 17 55,536,s Total retained earnings 30.13 1,134 (1.059.406) 26,362,216 1,785,317 57,2 19,2 4,125,784 76,170,817 1,788,738 166,393,l Total fund equity 84.307.835 Total liabilities and fund equity $ 95.429,460 8.873.286 89,459,327 1,791,792 195,556,8 Accrued assessments 1,252,171 1,252,l Fund equity: 120 u 8 1 1 8 1 I I t 4 l I U I 1 1 I CITY OF CARLSBAD Enterprise Funds Combining Statement of Revenues, Expenses and Changes in Retained Earnings Year Ended June 30, 1998 Car I sbad Municipal Golf Water District Course Sewer Solid Waste Operating revenues: Water sales $ 14,294,984 Sewer services charges 5,3 19,220 Other charges for services 745,038 8 1,765 578,434 Contributions from other Miscellaneous 114,880 162,409 123,074 government agencies 57 1,290 Total operating revenues 15,726,192 162,409 5,524,059 578,434 Operating expenses: Plant operations 1,300,920 Purchased water 8,719,738 Depreciation 1,227,696 1,256,353 546 General and administrative 4,636,445 215,635 1,084,697 109,938 Total operating expenses 14,583,879 2 15,635 3,64 1,970 110,484 Operating income (loss) 1,142,313 (53,226) 1,882,089 467,950 Nonoperating revenues (expenses): Investment income I ,770,25 1 127,072 2,007,489 84,113 Interest expense and fees (509,537) (650,237) Property taxes 860,112 Amortization of issuance costs (32,243) Gain (loss) on sale of property (36,3 3 9) (1,780) m Total nonoperating revenues (expenses) 2,052,244 127,072 1,355,472 84,113 I Net income (loss) 3,194,557 73,846 3,237,561 552,063 Retained earnings (deficit) at beginning of year 26,936,577 (1,133,252) 23,124,655 1,233,254 Retained earnings (deficit) at end of year $ 30,131,134 (1,059,406) 26,362,216 1,785,317 121 CITY OF CARLSBAD E nt erprise Funds Combining Statement of Cash Floivs Year Ended June 30, 1998 Carlsbad Municipal Water District Golf Course Sewer Solid Waste Total Cash flows from operating activities: Operating income (loss) $1,142,3 13 (53,226) 1,882,089 467,950 3,439, Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation and amortization 1,227,696 1,256,353 546 2,484, (Increase) decrease in receivables (67,974) (67,310) (135, (Increase) decrease in due from other governments (8,423) 1,611 143,037 136, (Increase) decrease in inventory (104,204) 655 (103, Increase (decrease) in accrued liabilities 23,959 (85,92 5) 80,794 (3,513) 1% Increase (decrease) in due to other governments 2,219 2, Increase (decrease) in loans payable (98,707) (98, activities 2,136,990 (139,151) 3,709,041 540,710 6,247,. Cash received from other funds 60,604 1,462,000 1,522,' Increase (decrease) in deposits payable 20,l 11 487,539 507,l Net cash provided by (used for) operating Cash flows from noncapital financing activities: Cash paid to other funds (60,604) (60,' Net cash provided by (used for) noncapital financing activities 60,604 1,462,000 (60,604) 1,462,1 Cash flows from capital and related financing activities: Purchases of fixed assets (3,273,852) (552,780) (1:244,857) (5,071,: Principal payment on bonds (1,800,000) (389,386) (405,000) (2,594,: Property taxes received 860,112 860,. Capital contributions received 4.216,793 4,169,040 8,385,1 Interest and other fees paid (833,686) (22,794) (534,656) (1,391, Capital received from other governments 439,109 439; Net cash provided by (used for) capital and related financing activities (830,63 3) (964,960) 2,423,636 628,( Cash flows from investing activities: Investments in restricted assets (740.009) (740,( Interest on investments 1,763.4 19 127,072 2,008,773 84,113 3,983,: Net cash provided by (used for) investing activities 1 ,o 2 3 ,-I 10 127,072 2,008,773 84,113 3,243,: Net increase (decrease) in cash and cash equivalents 2,390,371 484,96 1 8,080,846 624,823 11,581,( Cash and cash equivalents at beginning of year. as restated 27.375,382 2,338,190 29,776.367 1,067,094 60,557,( Cash and cash equi\dents at end of year $29.765,753 2,823.15 1 37.857,213 1,691,917 72,138,( Supplemental schedule of noncash investing. capital and financing activities: Capital assets contributed by (to) other funds $1,764,584 1.426,95 1 2,45 1 3,193,5 122 I I 8 8 I li I SI 1 1 II I 1 1 8 I II 1 e 123 124 1 I I 1 1 I B ! 1 1 u 8 1 I I 1 I INTERNAL SERVICE FLJNDS Internal Service funds are used to account for the financing of goods or services provided b} department or agency of E, government to other departments or agencies on a cost reimburse basis. Fleet Management To account for charges to other funds to provide fleet maintenance and accumulate funds for replacement. Health Insurance To account for charges tc other funds and from employees to provide health insurance for time City employees. 1 Information Svstems To account for charges to other funds for information system services. Risk Management To account for charges to other funds to insure for liability claims against the City. Workers’ Compensation To account for charges to other funds to insure against Workers’ Compensation claims. I 125 CITY OF CARLSBAD Internal Service Funds Combining Balance Sheet June 30, 1998 Fleet Health Information Risk Workers' Management Insurance Systems Management Compensation To Assets Current assets: Cash and investments $ 4,410,671 13 1,825 I ,037,137 2,954,506 2,060,570 10, Receivables: Inventory 84,834 Prepaid expenses 33,144 16633 1 Accounts. net 5,22 1 1,230 Total current assets 4,500,726 166: 199 1,037,137 3, I2 1,037 2,060,570 10,; Equipment and vehicles 7,594,32 1 2,268,76 1 9,: depreciation (3,779,43 1) (1,199,856) (4,' Fixed assets, net 3,814,890 1,068,905 4,: Fixed assets: Less accumulated Total assets $ 8,315,616 166,199 2,106,042 3,12 1,037 2,060,570 15,' Liabilities and Fund Equity Current liabilities: Accrued liabilities $ 126,249 15,070 82,343 14,458 23,822 Estimated claims payable 332,000 228,890 697,300 1 ,: Total current liabilities 126,249 347,070 82,343 243,348 72 1 1 122 1 ,! Fund equity: Contributed capital 3,195,OO 1 I ,546:82 1 1,9 1 1,939 752,600 7,f expenses 33,144 166,53 1 1 Unreserved 4,994,366 (2 l4,O 15) 476,878 799,2 19 586,848 6,f Retained earnings: Reserved for prepaid Total fund equity 8,189,367 (1 80,87 1) 2,023,699 2,877.689 1,339,448 14,; Total liabilities and fund equity $8,3 15.6 16 166, I99 2,106,042 3,12 1,037 2,060,570 15,; 126 I 1 I 8 I - Management Insurance Systems Management Compensation - I i I I General and administrative - 963,326 43,411 85,805 - I II I I Income (loss) before I Operating transfers in - 28,52 1 - II I I 1 CITY OF CARLSBAD Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Retained Earnings Year Ended June 30, 1998 Fleet Health Information ksk Workers' Operating revenues: $ 2,526,852 1,617,392 1,298,200 930,185 668,869 Other charges for services Miscellaneous - 13,943 331,206 50,278 - Total operating revenues - 2,540,795 1,948,598 1,298,200 930,185 719,147 - Operating expenses: Depreciation 754,198 301,299 Fuel and supplies 3 16,241 6,644 Claims expense 2,285,740 625,010 485,652 1,048,700 Total operating expenses - 2,119,139 2,285,740 1,27 1,269 668,421 571,457 - Operating income (loss) - 421,656 (337,142) 26,93 1 26 1,764 147,690 - Nonoperating revenues (expenses): Investment income 251,120 23,53 1 51,214 171,947 1 14,164 - Gain (loss) on sale of property - 34,108 - Total nonoperating revenues - 51,214 171,947 114,164 285,228 23,53 1 (e Xpe n se s 1 operating transfers - 706,884 (3 13,611) 78,145 433,711 261,854 - - Net income (loss) 706,884 (3 13,611) 106,666 433,711 26 1,854 Retained earnings at beginning of year - 4,287,482 132,740 370,212 532,039 324,994 - Retained earnings (deficit) - - $ 4,994,366 (180,871) 476,878 965,750 586,848 - - at end of year I 127 CITY 01,. CAIUSDAD Internal Service Funds Combining Statement of Cash F1oa.s Year Ended June 30,1998 Fleet Health Information Risk Workers' Management Insurance Svstems Management Compensation Totals Cash flows from operating activities: Operating income (loss) $ 421,656 (337,142) 26,931 261 :764 147,690 5203 Adjustments to reconcile operatin, 0 income ' (loss) to net cash provided by operating activities: Depreciation and amortization 754,398 301,299 1,055,4 (Increase) decrease in receivables 2,206 (1,230) 9 (Increase) decrease in inventory 2,636 2,6 hicrease (decrease) in accrued liabilities 41,584 3,323 14,374 (2,405) 11,366 68;2. (Increase) decrease in prepaid expenses (33,144) (1 66,53 1) (1 99J~ hicrease (decrease) in estimated claims payable 4 1,000 (29,92 9) (65,592) (54,5: Net cash provided by (used for) operating activities 1,222,280 (327,193) 342,604 62,899 93,464 1;394,0. Cash flows from noncapital financing activities: Cash received from other funds 28,521 283: Net cash provided by (used for) rioncapital financing activities 28,521 28,j: Cash flows from capital and related financing activities: Purchases of fixed assets (964,100) (1 57,447) (1 ,I2 1 >5f Cash flows from investing activities: Interest on investments 251,120 23,531 51,214 171,947 114,164 61 1>9' Net increase (decrease) in equivalents 509,300 (303,662) 264,892 234;846 207,628 9 13;0( Cash and cash equivalents at beginning of year 3,90 1,37 1 4 35,487 772,245 2,719,660 1,852,942 9,681;7( Cash and cash equivalents at end of year $ 4,410,671 131,825 1,037,137 2,954J06 2,060,570 10,594,7( Supplemental schedule of ionc cash investing Capital assets contributed by (to) other capital and financing activities: funds $ 70,037 35,675 105,7 128 I 1 I II I R I I i I I I I 1 I I 1 i I 129 130 U I I 1 I 8 1 1 I I 1 I I I I I AGENCY FUKDS Agency funds are used to account for assets held by a government for other funds, governn or individuals. Deferred Compensation To account for employees’ deposits in deferred compensation plans offered by the City. Contractors’ and Miscellaneous Deposits To account for money deposited by contractors for designated future development and ( I I miscellaneous deposits. Assessment Districts To account for the debt service transaction on assessment district bonds for which the City i ob1 igated. ) I 131 CITY OF CARLSBAD Agency Funds Combining Statement of Changes in Assets and Liabilities Year Ended June 30, 1998 Balance at Balance ; June 30, 1997 Additions Reductions June 30, 1' Deferred Compensation: Assets: Deferred compensation investments $ 3,036,335 564,127 3,600,~ Liabilities: Deferred compensation payable $ 3,036,335 564,127 3.600,d Contractors' and Miscellaneous Deposits: Assets: Cash and investments $ 8,162,905 14.5 55,248 ( 1 5,045,79 1) 7,672,. Liabilities: Accrued interest payable $ 1.094,978 445,509 (2 19,383) 1,321, Deposits payable 7,067,927 21,583,213 (22,299,882) 6,35 1 ,: Total liabilities $ 8,162,905 22,028,722 (22,5 19,265) 7,672,: Assessment Districts: Assets: Cash and investments $ 4,635,382 10,279,354 (8,586,222) 6,328,: Accrued interest 24,9 16 16,075 (14,410) 26,; Total assets $ 4,664,264 10,307,668 (8,604,598) 6,367,: Taxes receivable 3,966 12,239 (3,966) 12,: Liabilities: Due to bondholders $ 4,664,264 27,826,451 (26,123,381) 6,367,: Totals - All Agency Funds: Assets: Cash and investments $ 12,798,287 24,834,602 (23,632,013) 14,000,! Deferred compensation investments 3,036,335 564,127 3,600,~ Accrued interest 24,9 16 16,075 (1 4,4 10) 26,: Total assets S 15,863,504 25,427,043 (23,650,3 89) 17,640,' Taxes receivable 3,966 12,239 (3,966) 12,: Liabilities: Accrued interest payable $ 1,094,978 445,509 (2 19.383) 1,321; Due to bondholders 4,664,264 27,826,451 (26,123,381) 6,367,: Deposits payable 7 , 0 6 7,9 2 7 21,583,213 (22,299,882) 6,351,: Deferred compensation payable 3,036,3 3 5 564,127 3,600,~ Total liabilities $ 15,863,504 50,4 19,300 (48,642,646) 17,640,l 132 1 1 I 1 I I I I I I I I I I I I I I I 133 I 134 1 I 1 I I I 1 I I 1 I I I 1 I 1 I I GENERAL FIXED ASSETS ACCOUNT GROUP General fixed assets are those fixed assets used in operations accounted for in governm funds. General fixed assets include all fixed assets not accounted for in an enterprise, int senice. or trust and agency fund. Furrdture and I 135 CITY OF CARLSBAD General Fixed Assets Account Group Schedule of General Fixed Assets by Function June 30, 1998 General Culture and Public Public Government Recreation Safety Works Totals Land $3,157,228 21,993,646 2,150,407 740,763 28,042,044 Buildings 3,019,46 1 10,667,638 13,996,6 10 27,683,709 Improvements 887,290 2,387,900 474,456 342,009 4,091,655 Furniture and equipment 424,906 699,132 3,275,424 1,058,483 5,457,945 Construction in progress 63,339 8.61 7,857 162 - 8.681.358 Totals $7,552.224 44,366.173 19.897.059 2,141,255 73,956,711 136 I I I 16 1 1 I I I I I 1 S I T I CITY OF CARLSBAD General Fixed Assets Account Group Schedule of Changes in General Fixed Assets by Function Year Ended June 30. 1998 I General Fixed General Assets at Asset: July 1. 1997 Additions Deductions June 30. General government $ 7,573,222 3 55,262 (3 76,260) 7,552. Culture and recreation 42,179,108 2,699,627 (512,562) 44,366. Public safety 18,478,198 1,689,340 (270,479) 19,897. I Public works 1.576.296 685,293 ( 1 20,3 3 4) 2,141. Totals $69.806.824 5.429.522 (1,279,635) 73.956, I 137 CITY OF CARLSBAD General Fixed Assets Account Group Schedule of General Fixed Assets by Source June 30, 1998 As of June 30, 1986 Net additions subsequent to June 30, 1986: General Fund 15,097,261 Community development block grants 2,9 12,726 Federal grants 509,124 State grants 85 5,967 Street lighting 327,151 Park development 9,876,253 Public facilities 12,962,188 Redevelopment 4,279,504 $73.956,711 $27,136,537 Total investments in general fixed assets 138 1 I ANKUAL DEBT SERVICE REQUIREMENTS The following schedules present principal and interest debt service requirements for the City debt. a I I I 1 I II I I 1 I I I 1 I 1 I 139 CITY OF CARLSBAD Schedule of Annual Debt Service Requirements $15.495.000 - 1993 CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION TAX ALLOCATION BONDS Fiscal Interest Due Interest Due Total Principal Due Total Annual yi3aJ September 1 March 1 Interest SeDtember 1 Debt Service 1998-99 $ 387,851 380,501 768,352 280,000 1,048,352 1999-2000 380,501 372,889 753,390 290,000 1,043,390 2000-0 1 372,889 364,882 737,77 1 305,000 1,042,771 200 1-02 364,883 356,351 72 1,234 325,000 1,046,234 2002-03 356,35 1 347,426 703,777 340,000 1,043,777 2003-04 347,426 337,977 685,403 360,000 1,045,403 2004-05 337,976 328,001 665,977 380,000 1,045,977 2005-06 328,001 3 17,633 645,634 395,000 1,040,634 2006-07 3 17,633 306,607 624,240 420,000 1,044,240 2007-08 306,607 295,058 60 1,665 440,000 1,041,665 2008-09 295,058 282,85 1 577,909 465,000 1,042,909 2009- 10 282,85 1 269,989 552,840 490,000 1,042,840 2010-1 1 269,989 256,470 526,459 5 15,000 1,041,459 201 1-12 256,470 242,295 498,765 540,000 1,038,765 2012-1 3 242,295 227,332 469,627 570,000 1,039,627 20 13- 14 227,332 21 1,583 438,915 600,000 1,03 8,9 15 2014-15 21 1,583 195,045 406,628 630,000 1,036,628 201 5-1 6 195,045 177,589 372,634 665,000 1,037,634 2016-1 7 177,589 159,213 336,802 700,000 1,036,802 2017-18 159,214 139,920 299,134 735,000 1,034,134 201 8-1 9 139,920 1 19,576 259,496 775,000 1,034,496 20 19-20 1 19,576 98,183 2 17,759 8 15,000 1,032,759 2020-2 1 98,182 75,525 173,707 855,000 1,028,707 202 1-22 75,525 5 1,675 127,200 900,000 1,027,200 2022-23 5 1,675 26,500 78,175 950,000 1,028,175 2023 -24 26,500 26,500 1,000,000 1.026,500 Totals $6,328.922 5,941,07 1 12,269,993 14.740,OOO 27.009,993 140 1 I 1 I I I 1 I I I I I 1 II I i I 1 CITY OF CARLSBAD Schedule of Annual Debt Service Requirements, (Continued) $6,595.000 - 1997 HOSP GROVE CERTIFICATES OF PARTICIPATION (1 988 Refunding) Fiscal Interest Due Interest Due Total Principal Due Total AI February 1 Interest August 1 Debt Se Year August 1 1999-2000 131,825 121,977 253,802 505,000 758,E 2000-0 1 121,978 1 11,677 23 3,65 5 5 15,000 748,t 200 1-02 11 1,678 100,607 2 12,285 540,000 752,; 1998-99 $141,575 131,825 273,400 520,000 793,L 2002-03 100,608 88,742 189,350 565,000 754,: 2003-04 88,743 76,057 1 64,80 1 590,000 754,: 2004-05 76,058 62,4 17 13 8,475 620,000 758,~ 2005-06 62,4 18 48,447 110,865 635,000 745,1 2006-07 48,448 33,372 8 1,820 670,000 75 1,l 2007-08 33,373 17,272 50,645 700,000 750,( 2008-09 17.273 - 17.272 735.000 752.: Totals $933,977 792,393 1,726,370 6,595.000 8,321.: $1,199,950 - HUD SECTION 108 LOAN Fiscal Interest Due Interest Due Total Principal Due Total AI & August 1 February 1 Interest August 1 Debt Se 1998-99 $ 35,819 30,770 66,589 125,000 191,' 1999-2000 30,570 25,491 56,261 130,000 186, 2000-0 1 25,4 9 1 19,787 45,278 140,000 185, 200 1-02 19,5 87 13,621 33,408 150,000 183,s 2002-03 1 3,612 1 7,030 20,65 1 160,000 180,( - 176; 2003 -04 7.033 7,030 169.950 Totals $132.5 18 96,699 229,217 874.950 1,104, 1 141 CITY OF CARLSBAD Schedule of Annual Debt Service Requirements, (Continued) $7.400,000 - 1997 CARLSBAD MUNICIPAL WATER DISTRICT CERTIFICATES OF PARTICIPATION (1 988 Refunding Proiect) Fiscal Interest Due Interest Due Total Principal Due Total Annual Year November 1 __c Mav 1 Interest May 1 Debt Service 1998-99 $132,348 132,347 264,695 955,000 1,2 19,695 1999-2000 113,725 1 13,725 227,450 995,000 1,222,450 2000-0 1 93,825 93,825 187,650 1,040,000 1,227,650 2002-03 49,930 49,930 99,860 1 , 120,000 1,2 19,860 2003-04 25,850 25.850 5 1.700 1,175,000 1.226,700 Totals $488,183 488.182 976,365 6,360,000 7,33 6,3 65 200 1-02 72,505 72,505 145,010 1,075,000 1,220,o 10 $1 1.080,OOO - ENCINA FINANCING JOINT POWERS AUTHORITY INSTALLMENT PURCHASE AGREEMENT Fiscal Interest Due Interest Due Total Principal Due Total Annual Year August 1 February 1 Interest August 1 Debt Service 1998-99 $ 263,086 254,585 517,671 425,000 942,671 1999-2000 254,586 245,785 500,371 440,000 940,371 2000-0 1 245,786 236,240 482,026 460,000 942,026 200 1-02 236,24 1 225,920 462,16 1 480,000 942,161 2002-03 225,92 1 215,278 441,199 495,000 936,199 2003-04 21 5,278 200,978 4 16,256 520,000 936,256 2004-05 200,978 188,603 389,581 550,000 939,58 1 2005-06 188,603 172,79 1 361,394 575,000 936,394 2007-08 156,153 139,353 295,506 640,000 935,506 2008-09 139,353 1223 16 262,169 675,000 937,169 2009- 10 1223 16 105,191 228,007 705,000 933,007 2010-1 1 105,191 86,228 191,419 740,000 93 1,419 201 1-12 86,228 66,24 1 152,469 780,000 932,469 2012-1 3 66,24 1 45,228 1 1 1,469 820,000 93 1,469 20 13- 14 45,228 23,191 68,4 19 860,000 928,419 - 928,190 2014-15 23.1 90 23,190 905,000 Totals $2.747.670 2.484.58 1 5,232.25 1 10,675.000 15,907,25 1 2006-07 1 72,79 1 156,153 328,944 605,000 933,944 142 I II E 1 I 1 I I E 1 I IC s E iE B ! CITY OF CARLSBAD Schedule of Annual Debt Service Requirements, (Continued) $2-33 1,489 - CARLSBAD MUNICIPAL WATER DISTRICT STATE LOAN FOR RECLAIMED WATER PROJECTS Fiscal Interest Due Principal Due Total An m B3vember 30 November 30 Debt Sei 1998-99 3; 57,957 101,570 159,5 1999-2000 55,012 104,5 15 I59,5 2000-01 51,981 107,546 159,5 200 1-02 48,862 1 10,665 159,5 2002-03 45,653 113,874 159,5 2003-04 42,350 117,177 159,5 2004-05 38,952 120,575 159,5 2005-06 35,455 124,072 159,5 2006-07 3 1,857 127,670 159,5 2007-08 28,155 131,372 159,5 2008-09 24,345 135,182 159,5 2009- 1 0 20,425 139,102 159,5 2010-1 1 16,39 1 143,136 159,5 201 1-12 12,240 147,287 159,5 2012-13 7,969 15 1,558 159,5 20 I 3- 14 2,680 123.21 9 125,8 I Totals S520,284 1.998.520 2.5 18,8 $2.61 13.908 GOLF COURSE ACCRUED ASSESSMENT Fiscal Total Ar Year Interest Principal Debt Sei 1998-99 !E 65,514 733,032 798,5 1999-2000 59,297 154,824 214,l 2000-0 1 52,485 161,614 214,C 200 1-02 45,212 168,405 213,t 2 0 0 2 - 0 3 37,465 177,912 21 5,: 2003-04 29,103 186,060 215,l 2004-05 20,173 196,925 2 17,( 2005-06 10.425 206,432 216J Totals $3 19,674 1,985,204 2,304,2 I 143 144 I t 1 II 1 1 1 I E I B E II I I I cc I II 145 CITY OF CARLSBAD General Expenditures by Function Last Ten Fiscal Years Fiscal General Public Cornm Comrn Public Capital Year Total(') Govt Safetv Devel. Services Works Projects - Sf 1988-89 $55,745,009 $4,312,897 $1 1,069,305 $4,081,854 $6,114,189 $6,954,847 $19,879,063 $3,33 1989-90 53,133,603 4,412,182 13,019,991 4,819,544 7,814,101 8,315,586 11,104,390 3,64 1990-91 72,999,324 5,371,331 15,242,493 6,194,277 7,921,668 7,596,750 26,665,164 4,OC 1991-92 53,985.1 19 5,884,582 15,989,114 5,934,690 7,473,689 9,088,351 5,639,898 3,97 1992-93 55,104,390 6,080,919 15,734,643 5,886,636 7,176,621 8,376,678 7,192,002 4,65 1993-94 62,668,276 5,513,101 16,351,652 6,255,252 7,548,100 8,847,328 12,933,253 5,21 1994-95 60,280,103 5,871,248 15,915,678 6,465,977 7,459,685 8.1 11,572 12,159,653 4,29 1995-96 59,802,924 5,850,829 16,850,087 7,363,194 7,590,363 8,956,757 9,654,082 3,53 1996-97 65,943,032 6,961,469 17,410,033 7,431,539 8,390,009 8,816,767 13 556,164 3,37 1997-98* 80,045,280 6,909,151 18,631,042 7,894,536 6,672,810 11,437,101 23,693,412 4,80 (1) + Includes General, Special Revenue, Debt Service and Capital Projects Funds Beginning in fiscal year 1997-98, Park Maintenance expenditures are included in Public Works instead of Community Services GENERALMPENDITLJRESBYFUNCTION 1997-98 Debt Service 6% General Govt Community Services Development 14% 8 Yo 10% Souice Cir) ot C rli isbad Comprehensii e 4nnual Financial Reports 146 1 c a I a I 8 I I I I I 4 $20 i I $5 1 TOTAL EXPENDITURES LAST TEN YEARS Dollars in millions $80 $70 $60 $50 $40 $30 $20 $1 0 $0 Fiscal Year SPENDING ON CAPITAL PROJECTS LAST TEN YEARS $30 I $25 $1 5 $1 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 $0 Fiscal Year i I 147 Source City of Carlsbad Comprehensive Financial Reports CITY OF CARLSBAD General Revenues by Source Last Ten Fiscal Years Transient Business Fiscal Property Sales Occupancy Other Year Total'') Taxes Taxes Taxes Taxes Licenses 1988-89 $54,565,025 $1 1,012,396 $8,186,215 $2,752,025 $3,648,826 $696,706 1989-90 57,970,453 12,677,817 9,342,077 3,630,662 4,114,856 791,715 1990-91 77,371,107 14,007,364 9,426,111 3,310,043 3,691,387 832,432 1991-92 58,440,436 15,132,124 8,723,382 3,077,595 5,153,213 91 0,532 1992-93 58,115,465 15,332,036 9,167,849 3,098,793 3,408,805 1,071,342 1993-94 62,239,740 13,920,220 10,840,115 3,153,084 4,124,250 1,093,827 1994-95 69,768,517 13,537,893 11,399,568 3,252,270 8,434,825 1,245,830 1995-96 74,611,395 13,576,407 11,542,970 3,406,917 8,621,717 1,491,159 1996-97 98,645,130 14,516,474 12,495,143 3,675,472 10,824,890 1,510,462 1997-98 122,653,159 15,226,827 14,817,057 6,046,092 15,290,601 1,603,744 ('1 (*) Includes General, Special Revenue, Debt Service and Capital Projects Funds. Includes interdepartmental services category added in 1991 -92 and miscellaneous revenues. GENERAL REVENUE PROPERTYTAXAND SALES TAXREVENUI LAST TEN YEARS LAST TEN YEARS Dollars in millions $140 $120 $1 6 $14 $100 $1 2 $60 $8 $6 $40 $4 $2 $20 $0 $0 $80 $1 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Fiscal Year Fiscal Year Sourcc C it\ 01 C ailabad Compienensi\c AniiuJI I inancial Reports 148 I 4 1 I 1 I 1 I i 5 II I Contributions Other In tergov- Charges for Fines and Investment From Property Licenses ernmental Services Forfeits Income Owners QtJ $3,858,173 $2,876,536 $7,722,568 $478,830 $5,644,873 $4,529,710 $3,15 4,058,540 3,267,054 10,728,326 51 1,890 6,002,986 402,292 2,442 3,550,013 5,405,074 10,701,989 51 5,746 5,737,513 16,515,962 3,67; 3,307,980 6,087,138 7,759,224 312,984 4,826,292 446,813 2,70: 3,355,533 7,107,385 5,725,597 231,877 4,866,361 380,389 4,361 3,590,927 8,019,308 9,181,814 231,454 3,996,127 344,851 3-74: 3,766,340 7,590,323 9,819,230 263,411 4,415,975 2,148,548 3,894 4,178,844 6,426,262 6,805,386 335,395 4,862,050 9,359,802 4,004 5,609,730 11,764,760 10,707,653 31 7,892 6,075,188 15,450,861 5,696 I 6,484,025 17,091,140 7,614,902 331,318 8,632,261 16,609,786 12,90E TRANSIENT OCCUPANCY TAX CHARGES FOR SERVICES LASTTEN YEARS LAST TEN YEARS Dollars in millions Dollars in millions $7.0 $12 ' $6.0 $1 0 1 $2.0 I $8 $6 $4 $2 $0 $5.0 H $4.0 $3.0 $1.0 1989 1990 1991 1992 1993 1994 1995 1996 l! 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1 $0.0 Fiscal Year Fiscal Year R 149 CITY OF CARLSBAD Ratio of General Bonded Debt to Assessed Valuation and Net Bonded Debt Per Capita Last Ten Fiscal Years Percent of Fiscal Net Assessed Outstanding Total Per Capita Year Valuation") PrincipalQ) Valuation Debt Population': 1988-89 $4,203,469,146 $420,000 0.01 $7 62,030 1989-90 4,850,671,236 285,000 0.01 4 63,126 1990-9 1 5,474,063,206 150,000 2 64,120 1991-92 5,909,991,722 65,331 1992-93 6,066,896,498 66,481 1993-94 5,998,436,686 66,652 1994-95 5,824,971 ,I 65 66,479 1995-96 5,841,695,579 68,010 1996-97 6,005,069,504 70,532 1997-98 6,424,230,646 73,688 (') Net assessed value is stated at 100% of market value. Data from County of San Diego Office of the Auditor and Controller (2) Library and sewer general obligation bonds per the City of Carlsbad (3) Comprehensive Annual Financial Reports Population as of January 1 of each year per the State Department of Finance. GENERAL BONDED DEBT PER CAPITA LAST TEN YEARS DEBT IN DOLLARS $7 $6 $5 $4 $3 $2 $1 $0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Fiscal Year 150 I 1 I I i 8 8 CITY OF CARLSBAD Computation of Legal Debt Margin June 30,1998 Net assessed valuation $ 6,424.230 Debt limit (15% of 25% of net assessed valuation as adjusted) Amount of debt applicable to debt limit 240,908 Bonded debt 14,740 Certificates of participation 6,595 1 Obligations under cap tal leases 2,399, Total amoLnt of debt applicable to debt limit 23,734, I Legal debt margin $ 217,174, U Percent of debt limit 1 I 8 I 4 I u Source County of San Diego Office of the Auditor and Controller n 1 151 CITY OF CARLSBAD Schedule of Direct and Overlapping Bonded Debt June 30, 1998 1997-98 Assessed Valuation: $6,528,056,046 (after deducting $1 37,849,535 redevelopment increment YO Debt valuation) DIRECT AND OVERLAPPING BONDED DEBT: Applicable June 30, I! San Diego County Water Authority 4.963 O/o $ 439, Metropolitan Water District 0.806 4,474, Carlsbad Unified School District 97.1 95 25,755, Carlsbad Unified School District Lease Tax Obligations 97.195 6,910, 11,425,l Encinitas Union School District 22.487 6,632,. San Marcos Unified School Dist. School Facilities Improvement Dist. 30.082 6,570,; Carlsbad Unified School District Community Facilities Dist No. 1 Encinitas Union School District Lease Tax Obligations 22.487 1,449,. Tri-City Hospital District 32.331 75,' 100.000 Leucadia County Water District and I.D. No. 1 48.1 39i34.336 27,. Vallecitos Water District and I.D. No. 6 5.351 I Olivenhain Municipal Water District, I.D. No. 1 29.534 106,: Olivenhain Municipal Water District, Assessment Dist. No. 96-1 19.486 4,390, City of Carlsbad 191 5 Act Bonds 100.000 30,205,~ TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT") S 98,463,! DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT: 4.768 18,856,; San Diego County Pension Obligations Mira Costa Community College District Certificates of Participation 23.526 391 ,: Carlsbad Unified School District General Fund Obligations 97.1 95 11 ,I 33,t San Marcos Unified School Dist. Certificates of Participation 23.401 664,t Encinitas Union School Dist. Certificates of Participation 22.487 1,720,; Other School District Certificates of Participation Various 169,; City of Carlsbad General Fund Obligations 100.000 6,595,( $ 65,067,: TOTAL DIRECT AND OVERLAPPING GF OBLIGATION DEBT: GROSS COMBINED TOTAL DEBT: $1 63,531 ,' San Diego County General Fund Obligations 4.768 Yo $ 25,426,: San Diego County Supt. of Schools General Fund Obligations 4.768 110; (1 ) Excludes tax and revenue anticipation notes, revenue, mortgage revenue, and tax allocation bonds and non-bonded capital lease obligations. Ratios to Assessed Valuation: Total Gross Overlapping Tax and Assessment Debt Ratios to Adjusted Assessed Valuation: Combined Direct Debt ($6,595,000) 0.10% Gross Combined Total Debt ............... 2.51 % SHARE OF AUTHORIZED & UNSOLD GENERAL OBLIGATION BONDS: ......................... 1.51 Yo .............................................. ................... Metropolitan Water District.. ................................................. $ 403,000 Carlsbad Municipal Water District, I.D. No. 1 ................ 99, 148 Carlsbad Municipal Water District, I.D. No.3 .................................... 200,000 Source: California Municipal Statistics, Inc. 152 CITY OF CARLSBAD Ratio of Annual Debt Service for General Bonded Debt to Total Governmental Expenditures Last Ten Fiscal Years I 8 1 1 8 I I Ratio oi Total Total Servic Fiscal Debt Govern men tal Governr Year Principal Interest Service") Exoenditures(2) Expend 1988-89 $1 30,OOC $1 8,556 $148,556 $55,745,009 0.: 1989-90 135,OOC 13,728 148,728 53,133,603 0.: 1990-91 135,OOCl 8,652 143,652 72,999,324 0.; 1991 -92 150,OOC~ 3,908 153,908 53,985,119 0.: 1992-93 55,104,390 1993-94 62,668,276 1994-95 60,280,103 1995-96 59,802,924 1996-97 65,943,032 I 1997-98 80,045,280 e (I) Debt service requirement on General Obligation Bonds comprised of 1962 Sewer Bonds Series B and C and 1966 Library Bonds. Excludes debt service for the Assessment District and the Building and Parking Authorities. I I I u I I I I I (2) Includes General, Special Revenue, Debt Service and Capital Project funds RATIO OIF DEBT SERVICE TO GENERAL EXPENDITURES LAST TEN YEARS RATIO IN Yo DOLLARS _________-________________. 0.5% __________________--------. 0.4% ----_-__----------. 0.3% 0.2% 0.1 O/O 0.0% ~~~-~------------. ----------------. 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Fiscal Year Source City of Carlsbad Cornprehensibe Annual Financial Reports I 153 CITY OF CARLSBAD Water Enterprise Revenue Bond Coverage Last Ten Fiscal Years Net Revenue Direct Available Fiscal Gross Operating For Debt Debt Service Requirements Year Revenue‘’] Expenses(*’ Service Principal Interest iotal Coveraae 1988-89 $1,760,102 $1 ,I 95,822 $564,280 $157,000 $21,211 $1 78,211 3.17 1989-90 2,001,832 1,415,542 586,290 160,000 12,718 172,718 3.39 1990-91‘3’ 11,398,343 9,172,478 2,225,865 775,000 1,088,386 1,863,386 1.19 1991-92 11,504,798 9,520,564 1,984,234 685,000 842,538 1,527,538 1.29 1992-93 12,267,854 11,421,571 846,283 730,000 798,696 1,528,696 0.55 1993-94 15,188,913 12,286,557 2,902,356 775,000 751,248 1,526,248 1.90 1994-95 15,912,020 12,690,114 3,221,906 825,000 700,098 1,525,098 2.1 1 1995-96 17,147,790 13,998,346 3,149,444 880,000 644,822 1,524,822 2.07 1996-97 18,911,511 14,692,531 4,218,980 1,040,000 494,954 1,534,954 2.75 1997-98 18,356,555 14,583,879 3,772,672 955,000 264,695 1,219,695 3.09 (’) (a (3) Includes operating and non-operating revenues. Total operating expenses including depreciation and amortization. Effective January 1, 1990, Carlsbad Municipal Water District (CMWD) became a subsidiary district of the City. Thus, beginning in fiscal year 1990-91, all amounts have been adjusted accordingly. Debt service requirements after that date include the Improvement District bonds and the Certificates of Participation issued by CMWD. Source: City of Carlsbad Comprehensive Annual Financial Reports 154 $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 I I E 1 ’ -’ -’ -’ -/ -/ -/ -’ -’ P CITY OF CARLSBAD Schedule of Assessed Valuation Last Ten Fiscal Years Fiscal Year Secured ProDertv Unsecured Propertv Less ProDertv ExemDtions 1988-89 S 4,197,767,148 $ 109,633,027 $ 20,083,629 1989-90 4,813,718,827 147,696,674 23,581,665 1990-91 5,406,790,697 182,042,779 25,387,503 1991 -92 5,823,039,810 205,094,66 1 27,414,635 1992-93 5,948,358,026 242,255,869 31,586,277 1993-94 5,858,987,695 270,120,5 1 9 36,151,898 1994-95 5,673,354,814 288,206,831 40,417,338 1995-96 5,676,061,219 31 0,402,764 46,279,594 1996-97 5,811,751,594 348,706,124 55,138,448 1997-98 6,232,883,670 352,854,173 57,681,797 ('I Does not include redevelopment incremental valuation or state-assessed unitary values. Source: County of San Diego Office of the Auditor and Controller 156 1 8 I: E 1 8 8 II I 8 1 IF 1 $1 1 1 I Total H o rneo wn er's Net Assessed Percentage Assessed Valuation'') ExernDtions Valuation Chanae $ 4,287,316,546 $ 83,847,400 $ 4,203,469,146 6.7% 4,937,833,836 87,162,600 4,850,671,236 15.4 1 5,563,445,973 89,382,767 5,474,063,206 12.9 6,000,719,836 90,728,114 5,909,991,722 80 6,159,027,618 92,131,120 6,066,896,498 2.7 6,092,956,316 94,519,630 5,998,436,686 (1 .I) 5,921,144,307 96,173,142 5,824,971,165 (2.9) 5,940,184,389 98,488,810 5,841,695,579 0.3 6,105,319,270 100,249,766 6,005,069,504 2.8 6,528,056,046 103,825,400 6,424,230,646 70 NET TAXABLE VALUE I LAST TEN YEARS Dollars in billions $7 $6 $5 $4 $3 $2 $0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Fiscal Year 1 157 CITY OF CARLSBAD Construction and Business Activity Last Ten Fiscal Years Building Business Fiscal Permit Percent Estimated License Percent Construction Year Revenue Chanae Valuation Revenue Chanqe Deposits 1988-89 $674,814 .5 $1 11,898,109 $696,706 13.1 Not Available 1989-90 1,029,750 52.6 169,746,343 791,715 13.6 Not Available 1990-91 857,717 (1 6.7) 163,340,462 832,432 5.1 Not Available 1991-92 21 9,445 (74.4) 42,351,906 91 0,532 9.4 $4,663,219 1992-93 234,063 6.7 49,809,414 1,071,342 17.7 5,224,780 1993-94 365,571 56.1 71,057,243 1,093,827 2.1 4,474,153 1994-95 644,131 76.2 145,344,099 1,245,830 13.9 5,667,913 1995-96 917,788 42.4 162,116,427 1,491 ,I 59 19.7 5,239,235 1996-97 1,262,177 37.6 305,247,426 1,510,462 1.3 6,822,684 1997-98 2,094,523 65.9 479,909,805 1,603,744 6.2 5,857,013 ESTIMATED BUILDING VALUATION LAST TEN YEARS Dollars in millions $500 $450 $400 $350 $300 $250 $200 $1 50 $1 00 $50 $0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Fiscal Year Source City of Carlsbad Comprehensive Annual Financial Reports 158 CITY OF CARLSBAD Property Tax Levies and Collections Last Ten Fiscal Years 1 I 1 I I I R I I I I 8 I I I 8 1 Fiscal Total Total Current % of Levy Year Current Levv Collections Collected 1988-89 $10,928,048 $1 0,237,929 93.7 1989-90 12,600,253 11,816,888 93.8 1990-91 13,931,230 12,986,628 93.2 1991 -92 14,932,937 13,795,525 92.4 1992-93 13,990,844 12,776,232 91.3 1993-94 12,373,782 11,318,017 91.5 1994-95 11,977,833 10,843,322 90.5 1995-96 11,891,199 11,164,134 93.9 1996-97 12,227,583 11,551,981 94.5 1997-98 13,227,486 12,636,654 95.5 PROPERTY TAX LEVIES AND COLLECTIONS 8 LAST TEN YEARS Dollars in millions $1 6 $1 4 $1 2 $1 0 $8 $6 $4 $2 $0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Fiscal Year Source County of San Diego Office of the Auditor and Controller I 159 CITY OF CARLSBAD Demographic Statistics Last Ten Fiscal Years City Population Population Square Percent County Percent Year Miles Population!') Chanqe Po D u I a ti od2) of Countv 1989 39 7 62,030 5.3 2,418,176 2.6 1990 42 2 63,126 1.8 2,498,016 2.5 1991 42.2 64,120 1.6 2,539,583 2.5 1992 42.2 65,331 1.9 2,583,470 2.5 1993 42 2 66,481 1.8 2,614,222 25 1994 42 2 66,652 0.9 2,638,511 2.5 1995 42.2 66,479 (0.2) 2,658,584 2.5 1996 42.2 68,010 2.3 2,682,093 2.5 1997 42 2 70,532 3.7 2,724,437 2.6 1998 42.2 73,688 4.5 2,794,785 26 2000 (Estimate) 8 1 ,429(3) 3,004,434(4) 27 2005 (Estimate) 9 5,82 7(3) 3,l 25,900(4) 3.1 2020 (Estimate) 1 1 4,282(3) 3,826 ,900!4) 3.0 1. Source - State Department of Finance. 2 Source - County Data Base, San Diego County. 3. Source - based on City of Carlsbad projected residential construction estimates in 1998-99 Capital Improvement Program. 4. Source - San Diego Association of Governments Series Vlll growth forecast. POPULATION LAST TEN YEARS 75,000 70,000 65,000 60,000 55,000 1989 1990 1991 1992 1993 1994 19951996 1997 1998 Fiscal Year 160 CITY OF CARLSBAD Principal Employers I 8 I 1 II: I 8 u I 8 1c I 1 I I 1 1 il 1997-1998 FIRM PRODUCT/SERVICE EMPLC hifANUFA CTURING Callaway Golf Company, Inc. Golf Equipment Nellcor Puritan Bennett Corpora.:ion Medical Equipment West Coast Composite Golf Equipment Cobra Golf, Inc., 11 Golf Equipment The Upper Deck Entertainment Cards Taylor Made Golf Company, Inc. Golf Equipment Golf Apparel Ashworth, Inc. ViaSat, Inc. Communications Equipment Palomar Products Integrated Circuits Asymtek Fluid Dispensing Systems Schumacher Company Chemical Purification Systems Ismeca USA, Inc. Automation Equipment Clothing No Fear Syntron Bioresearch, Inc. Test Kits & Diagnostics Artecon, Inc. Computers Beckman Coulter Medical Diagnostic Reagent Hughes-JVC Technology Corpo::ation Communications Equipment Invitrogen Research Supplies Melles Griot Laser Products Lasers Odyssey Golf, Inc. SeaQuest, Inc. Diving Equipment NON-MA NUFA CTURING Plaza Camino Real Shopping Mall La Costa Resort & Spa HoteVHealth Spa Four Seasons Resort-Aviara Resort Carlsbad Company Stores Outlet Shopping Center Education Carlsbad Unified School Districl. City of Carlsbad Municipal Government Car Country Carlsbad Auto Dealerships Gemological Institute of America SOMC Group, Inc. Software Distributor Farmers Insurance ISIS Pharmaceuticals Research and Development San Diego Gas & Electric Company COSTCO Wholesale GroceriWholesaleiRetail PSB Lending Corporation Golf Equipment Gem School Insurance Services Power Generation Service Real Estate Loans Source: City of Carlsbad Chamber of Commerce I 161 CITY OF CARLSBAD P ri n ci pa I Taxpayers 1997-98 Percentage of I\ Assessed Taxpayer Type of Business Va I ua tion Va I ua tio n(' ) San Diego Gas & Electric Co. Power Generation $277,633,029 4. Aviara Resort Associates, Ltd. Resort & Golf Course 270,622,828 4. Callaway Golf Company Manufacturer 1 17,984,057 1. La Costa Hotel & Spa Corp. Hotel & Health Spa 11 1,589,980 1. Brehm-Aviara Ill Development Land Developer 46,942,229 0. Gemological Institute of America Gem School 44,959,035 0. Craig Realty Group Carlsbad LLC Real Estate 44,811,766 0.' Prentiss Properties Acquisition Real Estate 43,587,368 0: Air Products & Chermicals, Inc. Manufacturer 38,740,612 0.1 Daniels Cablevision, Inc. Telecommunications 37,076,188 0.1 Real Estate Collateral Mgt. Co. Real Estate 34,229,159 O.! $ 1,068,176,252 16.60/ (I) Net assessed valuation for 1997-98: $6,424,230,646 Source: County of San Diego Office of the Auditor and Controller 162 1 I 1 I I 1 I I I I I I II I I 1 I I CITY OF CARLSBAD Top 30 Sales Tax Generators 1997-1 998 Firm Prod uct/Service Air Products & Chemicals Chemical ProdL Aviara Resort Associates Hotel Food Sa Bob Baker Cadillac Car Dealers Bob Baker Jeep/Eagle/Hyundai Car Dealers Bob Baker Volkswagen Car Dealers Body Wise International D is t ri b u t o r/H ea It h Prod u Broadway Department Stores Department St Bullock's Department Stores Department St Carlsbad Mitsubishi Car Dealers Carlsbad Volvo Car Dealers Discover lnfiniti Carlsbad Car Dealers Hoehn Honda Car Dealers Hoehn Oldsmobile Car Dealers J. C. Penney Company Department St Jim Finney Pontiac Car Dealers La Costa Hotel & Spa Hotel & Health 5 Bexus Carlsbad Car Dealers North County LincolnlMercury Car Dealers Optimal Integrated Solutions Office Equipment Sto Price Club General Sto Reliable Wholesale Lumber Building Materi Department St1 Robinsons-May Department Stores Rorick Buick Car Dealers Sears-Roebuck & Company Department St1 The Good Guys Appliance St Toyota Carlsbad Car Dealers Vince Dixon Ford Car Dealers Vons Grocery Company Supermar Weseloh Chevrolet Car Dealers Worthington Dodge Car Dealers Source: Municipal Resource Consultants (MRC) I 163 CITY OF CARLSBAD Miscellaneous Statistical Information 1997-98 Date of Incorporation July 16, 1952 Type of City General Law Form of Government CounciVManager Area 42.19 sq. miles Population (CA Dept of Finance Report 1/1/98) Net Assessed Valuation $6,424,230,646 Number of Street Lights 5,318 Miles of Streets 303 Fire Protection: 73,688 Number of Stations 6 Number of Firefighters & Officers 72 Police Protection: Number of Stations 1 Number of Sworn Police Officers 90 Municipal Water District: Number of Customers 59,500 Number of Water Connections 19,200 Average Daily Consumption Miles of Lines and Mains 14.2 million gallons 325 Miles of Sewers 145 Recreation and Culture: Number of Parks (Improved and Special Use Areas) Area of Parks (Including Open Space) Number of Pools 1 Number of Libraries 2 Number of Volumes 234,302 34 433 acres Total Number of Authorized Full Time City Employees 533 Source: City of Carlsbad Finance Department 164 I I I I 1 1 I I I 1 I I I 1 I 1 I I I ~