Loading...
HomeMy WebLinkAbout1999-01-05; City Council; 14999 Exhibit 6; ENCINA FINANCING JOINT POWERS AUTHORITY FINANCIAL STATEMENTS JUNE 30,19980 0 ENCINA FINANCING JOINT POWERS AUTHORITY Financial Statements Year Ended June 30,1998 (With Independent Auditors’ Report Thereon) 0 0 a a e 0 0 * (This page intentionally left blank) 0 ENCINA FINANCING JOINT POWERS AUTHORITY Financial Statements Year Ended June 30, 1998 0 0 TABLE OF CONTENTS Pap Independent Auditors’ Report 1 Combined Balance Sheet - Governmental Fund Type and Account Group e 2 Combined Statement of Revenues, Expenditures and Changes in 3 Notes to Financial Statements 5 Supplementary Information: Fund Balances - Debt Service Funds 0 Combining Balance Sheet - Debt Service Funds 12 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds 13 0 0 0 0 e (This page intentionally left blank) a CERTIFIED PUBLIC ACCOL 11 00 MAIN STRl IRVINE, CALIF0 (94 CONRAD ~SSOCIATES, A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS L.L.R a 9 Board of Directors Encina Financing Joint Powers Authority Carl sb ad, California a Independent Auditors’ Report We have audited the accompanying combined financial statements of the Encina Financing Powers Authority (the Authority) as of and for the year ended June 30, 1998, as listed accompanying table of contents. These combined financial statements are the responsibil the Authority’s management. Our responsibility is to express an opinion on these corn financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. ‘ standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes exam on a test basis, evidence supporting the amounts and disclosures in the financial statementl audit also includes assessing the accounting principles used and significant estimates ma( management, as well as evaluating the overall financial statement presentation. We believi our audit provides a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all mE respects, the financial position of the Encina Financing Joint Powers Authority as of Jun 1998, and the results of its operations for the year then ended in conformity with genl accepted accounting principles. Our audit was made for the purpose of forming an opinion on the combined financial state1 taken as a whole. The supplementary information listed in the accompanying table of conte presented for purposes of additional analysis and is not a required part of the combined fin: statements of the Encina Financing Joint Powers Authority. Such information has subjected to the auditing procedures applied in the audit of the combined financial state] and, in our opinion, is fairly stated in all material respects in relation to the combined fin: statements taken as a whole. a a a a &&d//GcHc/2/+ L*1:/P September 17, 1998 0 1 e MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION ENCINA FINANCING JOINT POWERS AUTHORITY Combined Balance Sheet- Governmental Fund Type and Account Group June 30,1998 Governmental Fund Type Account Group General Long-Term Totals Debt Service Debt [Memorandum Only) Assets Investments held by trustee (note 2) $ 1,617,275 - 1,617,275 Interest receivable 47,997 - 47,997 Installment sale receivable (note 3) 17,960,000 - 17,960,000 Amount available in debt service funds for retirement of revenue bonds - 1,665,272 1,665,272 Amount to be provided for retirement of revenue bonds - 16,294.728 16,294,728 Total assets $19,625,272 17,960,000 37,585,272 Liabilities and Fund Balances Liabilities: Revenue bonds payable (note 3) $ - 17,960,000 17,960,000 Deferred revenue (note 3) 17,960,000 - 17,960,000 Total liabilities 17,960,000 17,960,000 35.920,OOO Fund balances: Reserved for debt service (note 5) 1,665,272 - 1,665,272 Total fund balances 1,665.272 - 1,665,272 Total liabilities and fund balances $19.625,272 37,585,272 17,960,000 See accompanying notes to financial statements. 2 e ENCINA FINANCING JOINT POWERS AUTHORITY Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Year Ended June 30,1998 e Debt Service Funds e Debt Sew. Revenues : Installment payments from members $1,376,7. Interest on investments 1 17,61 e Total revenues 1,494,3 Expenditures: Debt service: Principal 680,O e Interest 863,3. Cost of issuance 22.3 Total expenditures 1,565,81 Excess (deficiency) of revenues c over (under) expenditures (7 1,4! Operating transfers in 1 17,8~ Operating transfers out (1 17.81 Other financing sources (uses): a Total other financing sources (uses) - Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (7 1,45 e Fund balances at beginning of year 1,7367; $1.665,2; Fund balances at end of year e a See accompanying notes to financial statements. 3 e (This page intentionally left blank) 4 0 ENCINA FINANCING JOINT POWERS AUTHORITY Notes to Financial Statements Year Ended June 30,1998 0 0 (1) Summary of Significant Accounting Policies The accounting policies of the Authority conform to generally accepted accow principles as applicable to governmental units. The following is a summary of the I significant policies: e (a) Description of Reporting Entity The Encina Financing Joint Powers Authority (the Authority) was create( February 1, 1989 by the Buena Sanitation District, the City of Carlsbad, Leucadia Water District, and the City of Vista. The purpose of the Authority to issue revenue bonds in order to acquire additional capacity for the En Water Pollution Control Facility (Facility) and to finance any other autho1 costs. The Authority is governed by a Board of Directors which consists of director appointed by each member. Action can be taken at any meeting ol Board by the vote of any three directors. The Authority is not subject to feder state income taxes. From time to time, the Authority will issue debt on beha those members wishing to participate in the financing. 0 (b) Fund Accounting The basic accounting and reporting entity is a “fund.” A fund is defined a independent fiscal and accounting entity with a self-balancing set of accoi recording resources, related liabilities, obligations, reserves and equ segregated for the purpose of carrying out specific activities or attaining ce objectives in accordance with special regulations, restrictions, or limitations. The accounting records of the Authority are organized on the basis of funds an account group classified for reporting purposes as follows: 0 0 Governmental Funds The Debt Service Fund is used to account for the accumulation of resources and the payment of, general long-term debt, principal, interest and related cost Account Group The General Long-Term Debt Account Group is used to establish accountab for the Authority’s general long-term debt. It is used to account for all long4 obligations of the Authority. 0 a 5 e ENCINA FINANCING JOINT POWERS AUTHORITY Notes to Financial Statements (Continued) (1) Summary of Significant Accounting; Policies, (Continued) (c) Measurement Focus and Basis for Accounting Governmental fund types are accounted for on an “expendable” measurement focus. Accordingly, only current assets and current liabilities are generally included on their balance sheets, and the reported fund balance provides an indication of available, spendable resources. Operating statements for governmental fund types report increases (revenues) and decreases (expenditures) in available spendable resources. Governmental fund types use the modified accrual basis of accounting. Revenues are recognized when susceptible to accrual @e., both measurable and available). Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues that are accrued include interest income. Governmental fund expenditures are recognized when the liability is incurred except for principal and interest on long-term debt, which is recognized when due. (d) Budgets The Authority does not adopt an annual budget, therefore, no budgetary comparisons are presented. (e) Cash and Investments Investments are reported in the accompanying balance sheet at fair value, except for certain certificates of deposit and investment contracts that are reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. Changes in fair value that occur during a fiscal year are recognized as interest OM investments reported for that fiscal year. Interest OM investments includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments. (0 Total Columns Total columns on the combined statements are captioned “Totals (Memorandum Only)” to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in fund balance in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. 6 0 ENCINA FINANCING JOINT POWERS AUTHORITY Notes to Financial Statements (Continued) 0 0 /2) Investments Held By Trustee Authority for Investments The Trust Agreement by and among State Street Bank and Trust Company of Califc as Trustee, and the Authority dated February 1, 1997 authorizes the trustee to invc U.S. Treasury Securities, U.S. Agency Securities, interest-bearing demand or deposits, money market funds rated AAAm, AAAm-G or better by Standard & P Corporation, commercial paper rated A-l+ by Standard and Poor’s Corporation an1 by Moody’s Investors Service with original maturities of not more than 270 days, ba acceptances rated A-1 or A-l+ by Standard & Poor’s Corporation and P-1 by Mol Investors Service with maturities of not more than 360 days, certain mun obligations, as defined in the Trust Agreement, and investment agreements approvt AMBAC Indemnity Corporation with notice to Standard and Poor’s. Classification of Investments by Credit Risk As defined in Governmental Accounting Standards Board Statement No. 3, investn in securities are categorized in the following manner: Category 1 - Investments that are insured or registered, which are held by the Autk or its agent in the Authority’s name. Category 2 - Uninsured and unregistered investments, for which the securities are by the counterparty’s trust department or its agent in the Authority’s name. Category 3 - Uninsured and unregistered investments, for which the securities are by the counterparty’s trust department or its agent, but not in the Authority’s name. As of June 30, 1998, the Authority had $10,685 invested in mutual funds and $1,606 invested in a guaranteed investment contract which are not categorizable by credit ris’ 0 e e 0 e J3) Wastewater Revenue Bonds In February 1997, the Authority issued Wastewater Revenue Refunding Bonds, Series A to refund the remaining balance of outstanding Revenue Bonds, 1989 Seri bonds. The 1997 Refunding Bonds bear interest with rates ranging from 4.0% to 5.5c e e 7 ENCINA FINANCING JOINT POWERS AUTHORITY Notes to Financial Statements (Continued) /3) Wastewater Revenue Bonds. (Continued) The following is a table of the outstanding balance owed on the 1997 Refunding Bonds as of June 30,1998: Installment Approximate Member Balance Share City of Carlsbad $10,675,000 59.44% Leucadia Water District 7,285,000 40.5 6% $17.960.000 Covenants within the Installment Purchase Agreements require the members to, among other things, (1) maintain insurance on the facility, and (2) establish wastewater rates which are sufficient to pay the operating costs and debt service on the bonds and which will result in net revenues equal to at least 125% of the annual installment payments due. In addition, under the debt agreements, the Authority must maintain reserve funds equal to the lesser of the maximum annual debt service on the bonds or 10% of the original principal amount of the bonds. Required sinking fund payments begin in 201 1. These payments are reflected in the following schedule: Year ending June 30, 1999 $ 1,585,897 2000 1,586,697 2001 1,585,716 2002 1,582,328 2003 1,577,067 2004-2008 7,878,138 2009-20 13 7,834,992 20 14-201 5 3,129,39 1 26,760,226 Less amounts representing interest (8,800,226) Outstanding balance $17.960,000 8 e ENCINA FINANCING JOINT POWERS AUTHORITY Notes to Financial Statements (Continued) 0 0 (3) Wastewater Revenue Bonds, (Continued) The following is a summary of changes in the general long-term debt of the Author? the year ended June 30,1998: Balance at Balanct e July 1, 1997 Additions Reductions June 30, Wastewater Revenue Bonds $18,640,000 - 680,000 17,960,l (4) Prior Year Defeasance of Debt In prior years, the Authority defeased certain revenue bonds by placing the proceeds irrevocable trust to provide for all future debt service payments on the old bc Accordingly, the trust account assets and the liability for the defeased bonds art included in the Authority’s financial statements. On June 30, 1998, $29,410,000 of. defeased bonds were outstanding. e 0 (5) Reserves for Debt Service The reserves for debt service represent resources legally restricted to the payme general long-term debt principal and interest maturing in future years. e 0 0 0 9 (This page intentionally left blank) 10 e a e e SUPPLEMENTARY INFORMATION 8 a a a 11 * ENCINA FINANCING JOINT POWERS AUTHORITY Debt Service Funds Combining Balance Sheet June30, 1998 City of Carlsbad Leucadia County Water District Debt Payment Reserve Debt Payment Reserve Total Assets Investments held by trustee $ 4,920 954,O 19 5,242 653,094 1,617,275 10,675,000 7,285,000 17,960,000 Installment sale receivable Total assets $1 0,679,920 9825 1 1 7,290,242 672,599 19,625,272 Interest receivable - 28,492 19,505 47,997 Liabilities and Fund Balances Liabilities: Fund balances: Deferred revenue $10,675,000 7,285,000 17,960,000 Reserved for debt service 4,920 982.5 1 1 5,242 672.599 1,665,272 Total liabilities and fund balances $10,679,920 982,5 1 1 7,290,242 672,599 19,625,272 12 e ENCINA FINANCING JOINT POWERS AUTHORITY Debt Service Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year Ended June 30, 1998 0 City of Carlsbad Leucadia Countv Water District Debt Payment Reserve Debt Payment Reserve - Tot Revenues: e Installment payments from members $8 19,004 - 5 5 7,732 - 1,376 Interest on investments 804 69,102 468 47,274 117 Total revenues 8 19,808 69,102 558.200 47,274 1,494 0 Expenditures: Debt service: Principal 405,000 - 275,000 - 680, Interest 5 13, I79 350,136 - 863, Cost of issuance 15,443 7,125 - 22, - - 1,565, 0 Total expenditures 933,622 632,26 1 Excess (deficiency) of revenues over (under) expenditures (1 13,814) 69,102 (74,061) 47,274 (71, 8 Other financing sources (uses): Operating transfers in 70,078 127 47,553 86 117,, Operating transfers out (127) (70,078) (86) (47,553) (1 17,' Total other financing sources (uses) 69.95 1 (69,95 1) 47,467 (47,467) - 0 Excess (deficiency) of revenues and other financing sources over (under) expenditures and * other financing uses (43,863) (849) (26,594) (193) (7 17, Fund balances at beginning of year 48,783 983,360 31,836 672,792 1.736,: Fund balances at end of year $ 4,920 982,5 1 1 5,242 672,599 1,665,; e 13 e (This page intentionally left blank) 14