HomeMy WebLinkAbout2000-01-25; City Council; 15593; 1998-99 Annual Financial ReportsAB# IC593
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DEPT. FIN
RECOMMENDED ACTION:
1998-99 ANNUAL FINANCIAL REPORTS
CITY MGR~
Accept the 1998-99 City of Carlsbad Comprehensive Annual Financial Report (CAFR), the Single
Audit Report, the Independent Auditors’ Report on Agreed-Upon Procedures Applied to
Appropriations Limit Worksheets, the Carlsbad Redevelopment Agency Annual Report and the City
of Carlsbad Public Improvement Corporation Annual Report.
ITEM EXPLANATION:
Each year, an independent auditor examines fhe City’s financial records. In fiscal year 1998-99,
Conrad & Associates completed its seventh year as the City’s outside auditor; the second year of their
new contract. The audit process requires several months of on-site examination, testing, and
reconciliation of investments, bank statements, accounting records, warrants issued, payroll records,
appropriations, fixed assets, revenues and expenditures. The end result is an opinion on the fairness
of the presentation of the financial data within the reports. As in the past, this year we received an
unqualified opinion on all of our annual reports. The City CAFR has been awarded a Certificate of
Achievement for Excellence in Financial Reporting during the past couple of years, and we believe
that our current report continues to conform to the Certificate of Achievement program requirements.
The CAFR includes all entities which the City exercises oversight responsibility. These include, but
are not limited to, the authority to govern, manage, approve budgets and assume fiscal responsibility.
Using this definition as a guide, the 1998-99 CAFR includes the financial transactions of the following
legal entities:
The City of Carlsbad
The Carlsbad Municipal Water District
The City of Carlsbad Public Improvement Corporation
The Carlsbad Redevelopment Agency
Due to various legal requirements and managerial needs, separate financial statements are prepared
for some of the above entities. These have been previously distributed to the respective governing
bodies and additional copies are on file with the City Clerk andethe Finance Department.
Financial Summarv as of June 30.1999
City of Carlsbad
The reports show the financial condition of the City at June 30, 1999. The combined assets of the
City of Carlsbad are $601 million; with fixed assets comprising 36% and cash and investments at 52%
of the total. Total City expenditures were $142.8 million; an increase of $36.1 million from 1997-98.
As in the past, the biggest reason for this increase was the higher level of capital project spending.
Capital project spending increased by 11 1.6%, or $28.1 million dollars, which corresponds directly
with the level of development within the City. Other factors which contributed to the growth in
expenditures were additional programs and services offered through General fund financing. These
programs included increases in police staffing, additional recreational opportunities, a focus on
beautification and a clean Carlsbad, refurbishment of several City facilities, new technology and
communication systems, and increased staffing in Engineering and the new library.
+ Page 2 of Agenda Bill #
Combined City revenues totaled $183.2 million; up $25.6 million over 1997-98. The major factors for
the revenue gain are increased sales taxes, property taxes and transient occupancy taxes (TOT),
LCP agriculture mitigation fees received from the State for mitigation associated with the development
along the coastal region of Carlsbad, an increase in the Villa Loma affordable housing credits sold to
developers during the fiscal year to satisfy the affordable housing obligations under the City’s
lnclusionary Housing Ordinance, and a large payment made by the Villages of La Costa for the
Rancho Santa Fe Road District.
General fund undesignated reserves increased by $5.9 million due to higher than anticipated
revenues and lower than expected expenditures. Special revenue undesignated reserves increased
$2.6 million reflecting increased revenues and reduced expenditures. Unreserved funds designated
for future capital projects equaled $62.3 million.
Working capital in the Internal Service funds (fleet management, insurance and information systems)
increased $933,000. This increase is primarily due to inter-department billings during the year
exceeding actual expenses incurred.
Carlsbad Redevelopment Agency
The combined assets of the Carlsbad Redevelopment Agency as of June 30, 1999 are $33.3 million.
Total revenues were $1.9 million, $261,000 less than the previous year. Due to the maintenance of
lower cash balances during the past fiscal year, income from property and investments was the major
factor in the decrease in revenues. Total expenditures were $2.2 million; a $476,000 decrease from
fiscal year 1997-98. In the previous fiscal year, the former Bauer Lumber site was purchased by the
Agency. This purchase created a reduction in capital project spending for the year.
City of Carlsbad Public lmprovement Corporation
The combined assets of the City of Carlsbad Public Improvement Corporation (PIC) as of June 30,
1999 are $23 million; a decrease of $2.9 million from the previous fiscal year. The assets and
liabilities of the PIC have decreased due to the payments made on the Hosp Grove debt and
Carlsbad Municipal Water District COPS during the year.
Additional information regarding the City’s operations and achievements for 1998-99 can be found
in the CAFR Letter of Transmittal.
FISCAL IMPACT:
The CAFR and the additional financial reports present the financial condition of the City and its
related entities; the Carlsbad Redevelopment Agency and the City of Carlsbad Public Improvement
Corporation as of June 30, 1999. With the changing economic situation, the financial condition of
the City and its related entities also changes. In order to maintain a good understanding of the
City’s complex financial picture, financial updates are given to Council on a quarterly and as-
needed basis.
Page 3 of Agenda Bill # /$593
EXHIBITS:
Audit reports are on file with the City Clerk and Finance Department:
1.
2.
3.
4.
5.
Comprehensive Annual Financial Report for the fiscal year ended June 30, 1999.
Single Audit Report on Federal Assistance Programs for fiscal year ended June 30, 1999.
Independent Auditors’ Report on Agreed-Upon Procedures Applied to Appropriations Limit
Worksheets.
Carlsbad Redevelopment Agency, Combined Financial Statements for the fiscal year ended
June 30,1999.
City of Carlsbad Public Improvement Corporation, Combined Financial Statements for the fiscal
year ended June 30,1999.
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Lee Rautenkranz
City Clerk
California
Comprehensive
Annual
Financial Report
For the Fiscal Year Ended June 30, 1999
3
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Front Cover Artwork:
South Carlsbad Librarv - Construction continued 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 September of 1999.
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?
P
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FISCAL YEAR ENDED
JUNE 30,1999
1200 Carlsbad Village Drive, Carlsbad, CA 92008
760-434-2867
Prepared by the Finance Department
Internet Address: www.cicarlsbadca. us
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30,1999
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION:
Table of Contents
Council’s Five-Year Vision Statements
Letter of Transmittal
Certificate of Achievement for Excellence in Financial Reporting,
Government Finance Officers Association
Certificate of Award for Outstanding Financial Reporting,
California Municipal Finance Officers
Location Map
List of City Officials
Organization Chart
Boards, Commissions and Committees
FINANCIAL SECTION:
Independent Auditors’ Report
General Purpose Financial Statements:
Combined Balance Sheet - All Fund Types and Account Groups
Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - All Governmental Fund Types
37
38
39
40
41
42
43
46
49
1
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30,1999
TABLE OF CONTENTS (CONTINUED)
Page
General Purpose Financial Statements (continued):
Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual
(Budgetary Basis) - All Governmental Fund Types
0 Combined Statement of Revenues, Expenses and Changes
in Retained Earnings - All Proprietary Fund Types
50
52
Combined Statement of Cash Flows - All Proprietary Fund Types
0 Notes to General Purpose Financial Statements
Required Supplementary Information
Supplemental Data:
Governmental Funds:
General Fund:
0 Schedule of Revenues - Budget and Actual (Budgetary Basis) 94
0 95
0 Comparative Schedule of Revenues 96
Schedule of Expenditures - Budget and Actual (Budgetary Basis)
0 Comparative Schedule of Expenditures 97
Special Revenue Funds:
0 Combining Balance Sheet 100
53
55
91
11
CITY OF CARLSBAD
c
Comprehensive Annual Financial Report
Year Ended June 30,1999
TABLE OF CONTENTS (CONTINUED)
Page
Supplemental Data (continued):
0 Combining Statement of Revenues, Expenditures and Changes in
Fund Balances 102
0 Combining Schedule of Revenues and Expenditures - Budget and
Actual (Budgetary Basis) 1 04
Debt Service Funds:
0 Combining Balance Sheet 114
e
0 Combining Statement of Revenues, Expenditures and Changes
in Fund Balances 115
0 Redevelopment Bonds Debt Service Fund - Budget and Actual
(Budgetary Basis) 116
c
Capital Projects Funds:
0 Combining Balance Sheet 120
0 Combining Statement of Revenues, Expenditures and Changes
in Fund Balances 122
Proprietary Funds:
Enterprise Funds:
0 Combining Balance Sheet 126
0 Combining Statement of Revenues, Expenses and Changes in
Retained Earnings 127
... 111
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30,1999
TABLE OF CONTENTS (CONTINUED)
Supplemental Data (continued):
0
Internal Service Funds:
0 Combining Balance Sheet
Combining Statement of Cash Flows
PaJg
128
132
0 Combining Statement of Revenues, Expenses and Changes in
Retained Earnings 133
0
Fiduciary Funds:
Combining Statement of Cash Flows 134
Agency Funds:
Combining Statement of Changes in Assets and Liabilities 138
Account Groups:
General Fixed Asset Account Group:
0 Schedule of General Fixed Assets by Function
Schedule of Changes in General Fixed Assets by Function
0 Schedule of General Fixed Assets by Source
Schedule of Annual Debt Service Requirements
142
143
144
146
iv
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30,1999
TABLE OF CONTENTS (CONTINUED)
Page
STATISTICAL SECTION:
(Not covered by Independent Auditors’ Report)
General Expenditures by Function, Last Ten Fiscal Years
General Revenues by Source, Last Ten Fiscal Years
Ratio of General Bonded Debt to Assessed Valuation and Net
Bonded Debt Per Capita, Last Ten Fiscal Years
Computation of Legal Debt Margin
Schedule of Direct and Overlapping Bonded Debt
Ratio of Annual Debt Service for General Bonded Debt to
Total Governmental Expenditures, Last Ten Fiscal Years
Water Enterprise - Revenue Bond Coverage,
Last Ten Fiscal Years
Schedule of Assessed Valuation, Last Ten Fiscal Years
Construction and Business Activity, Last Ten Fiscal Years
Property Tax Levies and Collections, Last Ten Fiscal Years
Demographic Statistics, Last Ten Fiscal Years
Principal Employers, 1997-1 998
Principal Taxpayers, 1997-1 998
Top 30 Sales Tax Generators, 1997-1 998
Miscellaneous Statistical Information
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152
154
156
157
158
159
160
162
164
165
166
167
168
169
170
I....
Carlsbad City Council
1999
43
FIVE-YEAR VISION STATEMENTS
City Council continues to clarify and pursue the vision of Carlsbad that
reflects the pride and quality of life for all who live, work, and play here.
Carlsbad’s.. .
1. Diverse and healthy economic base provides opportunities for employment to the residents of
Carlsbad, economic vitality to the community, and the necessary revenues to support City
services.
2. Policies and decisions implement the General Plan, enforce the Growth Management Plan,
maintain the safety and security of its citizens, and are based on what is best for Carlsbad.
3. Leadership role in local and regional planning issues actively involves confronting governmental
issues at the local, state and national levels.
4. Operates an open government for the betterment of the community in a non-partisan manner
while encouraging active citizen participation and involvement with the City Council, and the
City’s Boards and Commissions.
And Carlsbad Efficiently and Effectively.. . . . ...
5.
6.
7.
8.
9.
Delivers top-quality public services.
Manages environmental concerns proactively, including:
0 openspace
0 water qualitykonservation
0 beach erosion
0 air quality
0
0 wildlife habitats
resource conservation and waste reduction
Has a safe and efficient integrated transportation system.
Maintains citywide “small town” community spirit.
Has a community where continuous and life-long learning are supported and embraced for
people of all ages.
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September 28,1999
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-. Honorable Mayor, City Council,
and City Manager
CITY OF CARLSBAD
Carlsbad , California
1998-99 COMPREHENSIVE ANNUAL FINANCIAL REPORT LETTER OF TRANSMITTAL
We are pleased to present the 1998-99 Comprehensive Annual Financial Report of the City of
Carlsbad to the City Council and the City Manager. This report includes financial statements for
the City, the Housing Authority of the City of Carlsbad, the Carlsbad Public Improvement
Corporation, the Carlsbad Redevelopment Agency and the Carlsbad Municipal Water District,
as well as the opinion of our independent auditors, Conrad & Associates. The completion of
this independent audit is an important part of the total financial management program for the
City of Carlsbad.
The information found in this report is provided by management to the City Council and the public to assist those interested in understanding the fiscal condition of the City as of June 30,
1999. Responsibility for both the accuracy of the data, and the completeness and fairness of
the presentation, including all disclosures, rests with the City. To the best of our knowledge and
belief, the enclosed data are accurate in all material respects and are reported in a manner
designed to present fairly the financial position and results of operations of the various funds
and account groups of the City of Carlsbad. All disclosures necessary to enable the reader to
gain an understanding of the government's financial activities have been included.
Backaround
c.
Carlsbad is a general law city
incorporated in 1952. It is located
about 35 miles north of the City of San
Diego on the southern California
coast. The City is governed by a five
member City Council under the
CounciVManager form of government.
The Council is elected at large on a
staggered basis for a term of four
years. The City Clerk and City
Treasurer are also elected to four-year
terms. The City Council appoints the
City Manager and City Attorney.
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1200 Carlsbad Village Drive Carlsbad, CA 92008-1989 (760) 434-2867 FAX (760) 434-8164
The City covers about 42 square miles and has a population of 77,550. Industries in the area
include a major regional shopping center, a specialty outlet center, 16 auto dealers, 27 hotels
offering 2,900 rooms for tourist lodging, high tech, multimedia, communication and biomedical
businesses, electronics, golf apparel and equipment manufacturers, several business and light
industry parks, and numerous land developers. Carlsbad has created an atmosphere that is very
conducive to attracting new businesses and residents.
Carlsbad is a full-service City providing the following services to its citizens and customers:
Police department 0 Development services
Fire department and paramedic services 0 Street construction and maintenance
0 Water delivery system 0 Library and arts programs
Sewer system 0 Recreation programming for all ages
Solid waste services 0 Parklands
Housing programs
School programs and facilities are provided by four different school districts located within the
City boundaries. Although the City Council has no direct control over these school districts, the
Council recognizes the importance of quality school facilities and programs to Carlsbad’s
residents. Council has worked closely with the schools in the past to provide assistance, when
possible, and has included the enhancement of school facilities into the City’s strategic goals for
the year.
In addition to the usual City services, Carlsbad offers a variety of programs to help local
residents and businesses. The Carlsbad Police Department offers a vacation security
consultation service to assist residents on security issues in preparation for their vacation. They
have also implemented a year-round bicycle patrol as well as a school resource officer program.
The school resource officers help to maintain order in and around schools, to deter crime
through enforcement, and to create a 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 490 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.
In the upcoming fiscal year, the City will once again offer Community Activity Grants to
individuals or groups who provide programs to the City that enhance the quality of life for
Carlsbad’s residents and/or visitors. One million dollars in an endowment fund has been set
aside to fund these grants. Finally, the City has reserved over $267,000 for support of the arts,
art programs, and the purchase of works of art.
During the past ten years, the City has experienced a significant amount of change. Some of
the more interesting changes are reflected in the following graph. While the City’s population
has increased a fair amount during the past decade, property values, sales tax revenues and
transient occupancy taxes have gone up at a much faster rate, enabling the City the means to
consistently provide a high service level for the residents of Carlsbad.
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Percentage Increase During the Past Ten Years
90.0%
0 80.0% 3 70.0%
2 60.0%
{ 40.0%
Y)
-
50.0%
30.0% 0 $
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~-
100.0% ,
1999 Strategic Goals
Population Net Assessed Sales Tax TOT
Values Revenues
The city of Carlsbad’s five-year
vision statements define and clam
the Council’s vision of the
Carlsbad of the future (see page
1). In January 1998, the City
Council took further action to
insure the attainment of the vision
by adopting four strategic goals.
Each strategic goal is aimed at
focusing the energies of the City
on actions that will move us closer
to the Council’s vision. The
Strategic Goals along with the
Vision Statements are updated
annually.
Based on these directions from
Council, staff develops operational
goals for the year. The operational
goals are the basis for the
development of the operating
City of Carlsbad
1999 Strategic Goals
Ensure the effective and efficient delivery of top-qualitj
services to our Community.
Create diverse, broad-based economic strategies to
ensure the financial health of the Community and the
city.
Integrate a comprehensive, efficient transportation
system with “quality-of-life” centered land use
decisions.
Enhance educational opportunities and school
facilities for all segments of the Community.
budget and guide the City workforce throughout the year. The significant accomplishments
below reflect the City’s progress towards the achievement of the strategic goals and the
Council’s vision of Carlsbad.
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Sictnificant Events and Accomplishments
During 1998-99, 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 continued 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 September of 1999. The Cole Library will close and undergo extensive
remodeling when the new library is opened.
Regional Communication System - Beginning in 1997 and
continuing through the year 2000, the County, City and several other
participating agencies are installing a new radio communications
system for the public safety and community services operations.
The purpose of this 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. Over $2.6 million was spent in
the current fiscal year to pay off the backbone portion of the system, and a portion of the radio
equipment needed for the system.
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Public Works Redesign - Approximately a year-and-a-half ago, the Public Works Major Service
Area was created. During the past year, the Public Works employees have worked together to
create a new structure for the department. The restructuring was implemented to eliminate
internal redundancies and improve service for the citizens. The new Major Service Area
includes:
0 Maintenance and Operations - streets, water and sewer
0 General Services - parks, facilities and fleet
0 Engineering
0 Administration
The Public Works Area is responsible for the design, construction and maintenance of all City-
owned and operated facilities, streets, sewer lines, water lines, storm drains, parks and
buildings. This efficient framework enables the City to provide the highest quality of customer
service to our citizens.
Carlsbad Ranch - A 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 specialty outlet center
comprised mainly of apparel stores and a micro-winery, opened to the public. The outlet center
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is currently expanding, and by the 1999 holiday season, 20 new stores should be open, further
increasing sales tax revenues in Carlsbad.
In March 1999, the Legoland California theme park opened to the public, giving Carlsbad Ranch
their largest feature. This family park is primarily for children ages 2-13, has 30 rides and
attractions covering 128 acres, and is based on the Leg0 building blocks. Legoland has not only
impacted Carlsbad's transient occupancy taxes (TOT), but their operations have also had an
impact on the City's sales tax revenues. Another TOT generator opened in Carlsbad Ranch
was the Grand Pacific Resort and Hotel which began operations in March of 1999. The Grand
Pacific has 90 hotel rooms and 71 time-share units. Future additions to this unique area in
Carlsbad are sites for a community hotel, the Carlsbad Municipal Golf Course, and additional
research and development businesses. These new development businesses will join the
already existing Gemological Institute of America, the National Association of Music Merchants,
Denso America and Natural Alternatives International.
Rancho Carrillo Assessment District - The City formed the Rancho Carrillo Assessment
District and acquired certain capital improvements within this area of Carlsbad during the fiscal
year. The improvements acquired include Melrose Drive from Alga Road to Palomar Airport
Road, improvements to Palomar Airport Road by the Melrose Drive intersection, sewer mains,
water mains and reclaimed water mains and a pressure reducing station as well as riparian
mitigation.
The City is cognizant of the traffic impact on the City due to the development of Rancho Carrillo,
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 1998-99 with an outlay of approximately $52.1 million. As development continues,
the need for development-related services and new facilities is also growing. During the next
five years, Carlsbad is projected to spend over $21 9.4 million on capital projects including:
$77.2 million on circulation system projects
0 $37.9 million on sewer projects
$28.4 million on parks projects
$27.9 million on civic projects
0 $27.8 million on water distribution projects
0 $1 1.5 million on miscellaneous projects
0 $8.7 million on drainage projects
These projects are needed 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.) 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.
7
Several major capital projects started or completed in 1998-99 include the South Carlsbad
Library, infrastructure improvements in the Rancho Carrillo area, acquisition of land for the
Business Park Recreational Facility, widening of La Costa Avenue and Palomar Airport Road,
completion of the Cannon RoadAnterstate 5 interchange, work on the westerly extension of
Cannon Road, work on Poinsettia Lane and Aviara Parkway extensions, further extension of
Faraday Avenue, realignment of Rancho Santa Fe Road, construction of the Skateboard Park,
and the continuing pavement management program.
Affordable Housing - Construction began this past fiscal year on the Cherry Tree Walk
affordable housing project. This project consists of 42 townhomes with two or three bedrooms,
for households earning less than 80% of the area median income (Le., a family of four earning
less than $42,000). Construction was also initiated on the 116 unit Rancho Carrillo Apartments.
Of the 116 units, 33 are reserved for households earning less than 50% of the area median
income (AMI), 37 for households earning less than 60% of the AMI, and 46 for households
earning less than 80% of the AMI. The rents for these one, two and three bedroom units will
range from $525 to $1,215 per month.
Year 2000 Compliance and Information Systems - The year 2000 problem (Y2K) stems from
programmers who designed systems and applications to hold the date in two
digit fields rather than four digit fields in order to save valuable memory
space. They did not consider that years later many computers and devices
with embedded chips - traffic lights, elevators, telephone switches - will fail to
recognize "00" as the year 2000 and may either fail completely or interpret
the "00" as the year 1900 with disastrous results. The City has addressed
this issue in several manners.
In late 1993, the City began a systematic upgrade of its hardware and software as part of its
normal business plan. Modem technology had significantly improved data collection methods
and thus increased the level of financial information reporting available at all levels of the City.
The new systems provided the City's decision-makers with much needed financial information
thereby enhancing operational and administrative effectiveness and efficiencies. The year 2000
issue did not prompt the upgrades; however, as the systems were replaced, the City insured that
the new software and hardware was Y2K compliant.
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The City has also formed two committees to specifically address the Y2K issue. One of the
committees is focused on insuring that the City can continue to operate its processes. This
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.
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The other Y2K committee is focused on assisting our citizen’s and businesses in the event of an
external system failure such as a utility system breakdown, transportation problems, interruption
in the supply of commercial goods and services or other condition that could require
extraordinary intervention by the City.- This team is identifying the most critical external services,
evaluating the impact that their interruption could have on the community and then developing
contingency plans for each area. They will also be providing our citizens and customers with
basic preparedness information to promote self-sufficiency in the event of a major failure.
Sale of San Diego Gas and Electric Plant - In May of 1999, the San Diego Gas and Electric
(SDG&E) plant in Carlsbad was bought jointly by Energy and Dynegy. The sale itself did not
have any financial impacts to the City. However, this sale, and the sale of other plants within the
State, has triggered a look at who (the State versus the County) has property tax jurisdiction
over these properties. The State Board of Equalization is about to take final action approving a
rule that would result in local assessment of this plant. This has the potential to impact the City if
the ultimate value for property tax purposes is the sales price. If this were to occur, the property
would appear on the City’s tax role under a normal property tax classification, versus unitary tax
classification, with a substantially higher revenue impact on the City.
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Total City Operations
--- In 1998-99, the City of Carlsbad once again enjoyed a fiscal year of solid economic growth.
Beginning with the 1994-95 fiscal year, the local economy has been expanding resulting in rising
revenue levels for the City. Service levels to the citizen’s have also grown enabling Carlsbad to
remain a model city providing effective and efficient topquality services.
City revenues are at an all-time high in 1998-99 totaling $183.2 million; an increase of $25.6
million over last year‘s total of $157.6 million. The major factors for the revenue gain are
increased sales taxes, property taxes and transient occupancy taxes (TOT), the issuance of the
Rancho Carrillo Assessment District bonds, a large payment made by the Villages of La Costa
for the Rancho Santa Fe Road District, increased water and sewer revenues and higher health
insurance rates charged to departments.
The return of a stronger economy during the past several years, combined with continued
growth in demand for new homes and businesses, has resulted in increased development
activity in the City. In 1998-99, residential development in the City hit a level that had not been
seen since the mid eighties. Low unemployment and a strong economy, coupled with the lowest
interest rates in years, enticed homeowners into buying new homes or trading up to bigger
homes. During the 1998-99 fiscal year, the growth in residential development outpaced the
growth in commerciaVindustria1 development. This is in contrast to the past couple of years,
where commercial/ industrial development was so heavy, it actually outpaced demand. This
past development created a surplus in the commerciaVindustria1 market. This surplus can be
seen in the City of Carlsbad’s 22% vacancy rate in commercial/industriaI buildings. Residential
development, on the other hand, increased with 2,206 permits issued for new homes in 1998-
99, compared to 1,402 last year.
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These development activities, and a very active resale market, have caused property values in
Carlsbad to increase, creating higher property tax revenue. Sales taxes are also rising with the
new retail establishments within the City and high consumer confidence. Transient occupancy
taxes are at their highest levels ever due to the opening of Legoland and new resorts such as
the Four Seasons and the Grand Pacific.
Category
General Fund
During 1998-99, the City staff of over 820 full and part-time employees provided a complete
range of City services to the 77,500 residents and many businesses in Carlsbad. Spending on
all City programs totaled $142.7 million, an increase of $35.9 million from 1997-98. As in the
past, the biggest reason for this increase was the higher level of capital project spending. Capital
project spending increased by I 1 1.6%, or $28.1 million dollars, which corresponds directly with
the level of development within the City. Other factors which contributed to the growth in
expenditures were additional programs and services offered through General fund financing.
These programs included increases in police staffing, additional recreational opportunities, a
focus on beautification and a clean Carlsbad, refurbishment of several City facilities, new
technology and communication systems, and increased staffing in Engineering and for the new
library.
1998-99 over Percent
$63,323 $ 55,995 $7,328 13.1%
1998-99 1997-98 (under) 1997-98 Change -_
The remainder of this report will discuss the revenues and expenditures (or expenses) for each
fund type in the City of Carlsbad, for the fiscal year ended June 30, 1999:
lntemal Service Funds'')
TOTAL REVENUES
Revenue from All Fund TvDes
(in thousands)
- 8,986 8,111 875 10.8
$1 83,203 $157,605 $25,598 16.2%
Special Revenue Funds
Debt Service Funds
Capital Projects Funds
Enterprise Funds")
15,025 11,995 3,030 25.3
65,712 53,292 12,420 23.3
28,822 26,840 1,982 7.4
1,335 1,372 (37) (2.7) -_
(') Includes operating and non-operating revenues .-
10
c
General Fund
Debt Service Funds
Capital Projects Funds
Enterprise Funds")
Special Revenue Funds
Expenditures (or ExDenses) from All Fund Types
(in thousands)
$49,585 $43,082 $6,503 15.1%
2,485 4,822 (2,337) (48.5)
28,058 111.6 53,205 25,147
22,591 19,782 2.809 14.2
6,770 6,994 (224) (3.2)
I 1998-99 over Percent
Internal Service Funds")
TOTAL EXPENDITURES
Cateuorv I
8,OI 5 6,916 1,099 15.9
$1 42,65 1 $1 06,743 $35,908 33.6%
(1) Includes operating and non-operating expenses
General Fund
The City's General fund is used to
record all revenues and expenditures
not specifically restricted by law or
Council policy. Major sources of
revenue include property tax, sales tax,
transient occupancy tax (TOT), vehicle
license fees, business license fees,
development revenues and interest
income. Categories of expenditures
include public safety, public works,
community services, community
Historical General Fund Revenue
00 4
90- 91- 92- 93- 94- 95- 96- 97- 98- 91 92 93 94 95 96 97 98 99
Flrcal Yoar
development, and administrative
functions.
11
The following table summarizes General fund revenues by major category for 1998-99 and
General Fund Revenues
(in thousands)
1997-98:
799899 over Percent -_
Category
Taxes
Intergovernmental
Licenses and Permits
Charges for Services
Fines & Forfeitures
Income from Property
and Investments
Interdepartmental
7998-99 1997-98 (under) 7997-98 Change
$43,109 $37,426 $5,683 15.2%
3,881 3,481 400 11.5 -_
3,827 3,303 524 15.9
6,586 7,120 (534) (7.5) 804 445 359 80.7 _-
1,992 1,817 175 9.6
1,934 1,919 15 .8 I-
__
The City has once again experienced another year of significant revenue growth. Just like the
previous three years, development has continued to expand, property values are escalating, the
San Diego unemployment rate continues to head downward and consumer confidence remains
high. This was the case not only in Carlsbad, but in the region as a whole. During the year, the
Index of Leading Economic Indicators for San Diego County went on a bit of a roller coaster ride.
However, when all was said and done, the indicators for the fiscal year inched up slightly, a sign
of continued economic prosperity for the City as well as the County. Given the leading nature of
the Index during the last six months of the fiscal year, the outlook for the local economy in early
2000 is very promising.
Carlsbad’s General fund revenues grew by $7.3 million, or 13.1 %, from the previous fiscal year.
General fund revenues were originally budgeted at $55.4 million, revised upward to $61.9
million, and at June 30, 1999 receipts totaled $63.3 million. The increase in revenue is primarily
attributable to the strong local economy. The most notable improvement is in sales, property
and transient occupancy taxes.
12
Sales Taxes - $17.1 million
The City’s largest source of tax
revenue, sales tax, had receipts of
$17.1 million for fiscal year 1998-99,
which was $2.3 million, or 15.6%,
higher than last year. New auto
sales, department stores and
restaurants comprise the largest
economic segments of sales taxes for
the City. With consumer confidence
remaining extremely high, spending
on cars, restaurants and durable
goods continues to grow.
The fastest growing economic segment this year for sales tax, was auto sales, with a
20.2% increase in activity at Car Country Carlsbad. Sales at the Carlsbad Company
Stores also grew significantly as this was their first full year of operations. The
specialty retail center brought in an additional $400,000 in sales tax revenue to the
City. The City should continue to see an increase in sales tax revenues next fiscal
year due to an expansion of the Carlsbad Company Stores in the fall of 1999. Sales
of consumer goods also got a boost this year from the opening of Legoland in March
1999. Sales taxes are received from the sale of certain food items as well as from
the toys and souvenirs sold within the park.
Property Taxes - $14.2 million
Property tax revenues of $14.2 million are up 14% over the previous year. According
to the County of San Diego Assessor’s Office, property values in Carlsbad increased
by 15% on the 1998-99 tax roll. This is the largest percentage increase of any city in
the County. In addition to new development within the City, “strong housing
demand, fueled by good economic conditions and a limited supply of available
homes, is pushing both home sales and prices to record levelsi”
’ California Department of Finance, Finance Bdlefin. July 1999, ”Economic Update”, p. I.
13
Transient OccuDancy Taxes - $7.0 million
Transient Occupancy Taxes
(TOT) or hotel taxes, totaled
approximately $7 million for
the year, which is $964,000,
or 16%, above the prior
year’s amount. The majority
of this increase is attributable
to the Four Seasons Resort
which was open only six
months of the prior year.
Also adding to the increase
in TOT, was the opening of
the Grand Pacific Resort and
Hotel in March 1999, located
above the Carlsbad Flower
Fields, with its lobby fronting
Legoland. Four more hotels plan to open in Carlsbad over the next 18 months,
which will continue to add to the City’s TOT revenue. A June 1999 “Trends in the
Hotel Industry” report produced by PKF Consulting sited, “The impact of the opening
of Legoland in late March can be seen in the 9.2% jump in the average daily room
rate for the first six months of the year in the North Coastal sub-market, and a 13.7
percent increase in June.”*
Franchise Taxes - $2.0 million
Franchise taxes rose to $2 million, which is 14% or $241,000 greater than last year’s
revenues. Franchise fees come from public utility sources such as SDG&E, trash
collection franchises, and cable franchises conducting business with City limits. The
increase in customer base for each of these industries has contributed to the higher
revenue during the past twelve months.
0 Business License Taxes - $1.7 million
Business license taxes showed a modest increase in 1998-99, with an 8.3%
increase in revenue over last year’s receipts. Carlsbad issues licenses for
approximately 5,600 businesses each year, which includes businesses that are
located outside of the City. The number of new licenses for the year totaled 1,389.
This figure is mainly comprised of home-based businesses and construction
companies.
Vehicle License Fees - $3.3 million
Vehicle license fees (VLF) total $3.3 million, which is an increase of 9.9% over 1998.
VLF are collected by the Department of Motor Vehicles and disbursed by the State
Controller to the City. The State taxes motor vehicles in lieu of local property taxes.
The State reduced the VLF this fiscal year by 25%, but replaced the reduction in
’ P KF Consiclfing. June 1999. ’Trends in the Hotel Industv.‘. p. I,
14
fees with State General fund money. Due to provisions in the 1999-2000 State
budget, the fee will be automatically cut by an additional 10% in the 1999-2000 fiscal
year; a year earlier than originally anticipated. The State General fund will also
replace the revenues lost by this rate reduction. In addition, efforts calling for the
complete elimination of the fee have dissipated among State legislators; a potential
threat to one of our larger revenue sources.
b Develoment-Related Revenues - $6.7 million
Revenue related to development decreased by $230,000, or 3.3%, in 1998-99.
Construction permits and building plan check fees reported large increases, while
planning and engineering fees decreased during the year.
Building permit revenues collected in fiscal year 1999 were $2.5 million, a 20.5%, or
$430,000, increase in revenues compared to last year. Building permits are issued
to cover the cost of regulating construction activities. This allows the City the means
to protect overall community interests. During March 1999, the City set a record for
the number of residential permits issued in one month. Then in May 1999, the City
broke the newly set record by recording 437 housing permits in one month. For the
year, permits were issued for 2,206 new dwelling units, compared to 1,402 during
the previous year. This was the highest level of permits achieved in a year since the
mid-1 980's. Commercial/industriaI building permits were issued this year for
1,141,200 commercial, and 1,084,900 industrial square feet. This was relatively
close to last fiscal year's production of 900,000 square feet of commercial and 1.6
million square feet of industrial buildings permitted.
3000
2500
2000
1500
lo00
500
0
Residential Units Trend
1985 to 1999
Issued j
Although building permits issued and building department revenues were at higher
levels in 1998-99, there was a decline in engineering and planning department
revenues. Building plan check and inspection revenues at $1.7 million were
$263,000 or 18.9% higher than the previous year. On the other hand, planning and
engineering fees realized declines in revenues of 25.7% and 26.9% respectively.
There was a high volume of master plans processed during the past couple of years,
leading to the increased permitting done this year. This is part of the normal cycle of
development in the City.
15
0 Other Charcles for Services - $2.4 million
Recreation fees total $1 million and are 7.5% higher than in fiscal year 1997-98.
Instructional classes, adult and youth sports, and special events made up the
majority of the recreation fees.
Ambulance fees totaled $858,000 and are ahead of last year’s total by 14.8% or
$111,000. This increase is due to an increase in fees that went into effect in
January 1998, as well as an 80% increase in our Medicare reimbursement rate that
went into effect in August 1998.
0 Fines and Forfeitures - $804.000
Fines and forfeitures consist mainly of receipts from parking citations and the City’s
share of fines from moving violations. They total $804,000 for fiscal year 1999,
which is 80.9%, or $360,000, more than fiscal year 1997-98. This increase in
revenues year-over-year is mainly due to new legislation that became effective July
1, 1998. This legislation returned to cities the portion of moving violation fines which
were diverted to the State during the recession.
0 Income from ProDertv and Investments - $2 million
Income from investments and property for the year totaled $2 million, and 9.7%
more than last year’s revenues of $1.8 million. Although interest rates were lower
during the past fiscal year, the average daily cash balances were higher, helping to
increase the City’s investment income.
0 Interdepartmental Charcles - $1.9 million
Interdepartmental charges represent general liability, workers’ compensation,
information systems, portfolio management and miscellaneous charges allocated to
the various departments within the City, as well as engineering charges allocated to
capital projects. These charges were essentially equal to the prior year at $1.9
million.
0 Miscellaneous Revenue - $1.2 million
Other revenue sources total $1.2 million; $706,000 higher than the previous fiscal
year. In December 1998, the City received $500,000 in condemnation funds from a
developer which resulted in a $500,000 increase in estimated revenues as well as a
similar increase in appropriations. In addition, in July 1998 the City received a
$100,000 refund for life insurance premiums paid out of the General fund.
-..
16
L
Category
Policy and Leadership Group
Administrative Services
Public Safety
Community Services
Public Works
Non-Departmental
TOTAL
Community Development
Total General fund expenditures are summarized in the following table:
1998-99 over Percent
1998-99 1997-98 (under) 1997-98 Change
$ 2,568 $ 2,018 $ 550 27.3 % 2,666 2,651 15 .6 21,613 17,908 3,705 20.7
5,002 4,568 434 9.5
6,848 5,944 904 15.2
10,563 9,554 1,009 10.6
325 439 (1 14) (26.0)
$49,585 $43,082 $6,503 15.1%
General Fund Expenditures
(in thousands)
General fund expenditures were $49.6 million; an increase of $6.5 million from 1997-98. The
economy continued to strengthen again this fiscal year, allowing the City to maintain service
levels and expand or add some programs for the third straight year, including:
Increased police staffing
Installation of the new regional communications system
Resurfacing of gym floors
Implementation of the emergency response mapping system
New morning lifeguard services at Carlsbad High School
Additional community services instructional classes
Additional day camps
New “Stay ‘n’ Play” Program at Buena Vista Elementary School
Additional senior citizen day trips
Expanded triathlon and beach festival
Increased library staffing in preparation for the new library
Increased engineering inspections and plan checks
Beautification program for all parks
Quarterly steam cleaning of downtown sidewalks
Remodeling of Elmwood House and Safety Center
Increased hours of operation at the City’s community pool
17
Significant changes noted in the Major Service Areas were as follows:
Policv and Leadership Group
Spending in Policy and Leadership Group increased by $550,000 this fiscal year.
This group includes the City Council, City Manager, City Clerk, City Attorney and
City Treasurer departments. The increase in expenditures is attributable to the cost
of hiring consultants during the year to determine the feasibility of the City acquiring
the former San Diego Gas and Electric plant. Another factor affecting the increase
in expenditures were the costs associated with the elections held in November 1998.
Administrative Services
Administrative Services, which includes the Finance, Purchasing and Human
Resources departments, had an increase in expenditures in 1998-99 of $15,000.
This minimal increase is the net affect of the higher personnel costs associated with
the implementation of the new performance management and compensation
program, and the reduction in consulting and training costs associated with the
same program.
0 Public Safety
Spending on public safety programs totaled $21.6 million; up $3.7 million or 21%
from 1997-98. Due to the continued growth in Carlsbad, the Police department
added three sworn and four non-sworn staff during the year. These additions,
combined with additional costs previously funded with Special Revenue funds
(juvenile diversion, D.A.R.E. maintenance and operation expenses, and expenses
associated with the School Resource Officer Program), has pushed Police
department expenses higher in 1998-99. The Agua Hedionda Lagoon patrol has
also been moved from Community Services to the Police department, and the
animal services contract was transferred to Police from non-departmental expenses.
The largest factor affecting fire protection expenditures for the year was the payoff
during the year of the 800 MHz equipment for the regional communications system
of $1.6 million.
Communitv Development
Community Development, which encompasses the Hiring Center, Geographic
Information Systems (GIs), Economic Development, Community Promotion (CCVB),
Land Use Planning, Building Inspection and Community Development
Administration, had expenditures of $5 million for fiscal year 1998-99; an increase of
$434,000. The increase in expenditures can be traced to higher miscellaneous
professional services in the building and planning areas. These expenditures
support the increased workload associated with the issuance of building permits.
Communitv Services
Community services consists of the Library, Cultural Arts, Recreation, Park
Planning, and Senior Citizen programs. This group had total expenditures of $6.9
million for the year; an increase of $904,000. The majority of this increase was for
Library services, including increased staffing in preparation for the opening of the
new library, and the shift of funding sources for expenditures from Special Revenue
18
--
funds to the General fund, as other funding sources have been dwindling. Additional
dollars were expended in the recreational area to upgrade the Recreation brochure,
and to expand the triathlon beach festival, youth sports programs and various
recreation programs.
Public Works
Engineering, Parks Maintenance, Streets and Facilities, Building Maintenance,
Traffic Sign Maintenance and Public Works Administration comprise the Public
Works major service area. Total expenditures in 1998-99 for Public Works were
$1 0.6 million; an increase of $1 million over 1997-98 expenses. This is the first full
year for the Public Works Administration department, established for the coordinated
management of the various departments, functions, and programs within Public
Works. This program was created during the City reorganization in mid-year 1997-
98. The other major factor affecting total Public Works expenditures was the
increase in street maintenance expenses. Gas Tax revenue was formerly used to
fund major street maintenance expenses for years prior to 1998-99. Starting in
1998-99, Gas Tax revenue was only used to fund Capital Improvement Projects and
the General fund took over the funding of the Major Street Maintenance Projects,
creating a variance of $544,000.
0 Non-Departmental
Nondepartmental expenditures consist of programs not specifically associated with
a department. Examples include fees paid to the State to keep beach parking free
at the South Carlsbad State Beach, fees paid to the County for property tax
administration, and annual City audit charges. This category decreased by
$1 14,000 in 1998-99, because animal regulation expenses were moved from the
non-departmental area to the Police department budget.
Special Revenue Funds
The City's Special Revenue funds, which account for the collection and use of special or
restricted revenues, received $15 million in total revenue in 1998-99. This is an increase of $3
million, or 25.3%, over last year. Much of this increase was the result of LCP agriculture
mitigation fees received from the State for mitigation associated with the development along the
coastal region of Carlsbad. In addition, there was an increase of $891,000 in Villa Loma
affordable housing credits sold to developers during the fiscal year to satisfy the affordable
housing obligations under the City's lnclusionary Housing Ordinance.
19
Special Revenue Funds
Revenues
(in thousands)
I 1998-99 over Percent Category
Taxes
Intergovernmental
Charges for Services
Fines and Forfeitures
Income from Property
Property Owner Contr.
Donations
and Investments
1998-99 1997-98 (under) 1997-98 Change
$ 1,679 $1,603 $ 76 4.7%
4,069 4,830 (761 1 (1 5.8)
132 79 53 67.1
65 73 (8) (11.0)
986 1,252 (266) (21.3) 7,397 3,126 4,271 136.6 350 21 8 132 60.6
There was one new Special Revenue fund added in fiscal year 1998-99, the Library
Endowment fund. This fund was started with a citizen donation, to assist the City in the
development of their auditorium at the new South Carlsbad Library. -. -
-_ Expenditures from the Special Revenue funds support a wide variety of programs and projects.
Some of the major uses of funds include:
0 Community service programs such as street lighting, landscaping services for street
trees and median maintenance.
0 Cultural programs including grants from the California Library Services Act and
California Arts Council, and the Civic Arts program.
0 Donations, scholarships and bequests for designated library and community service
activities.
Endowments designated for community assistance, the preservation of the Flower Fields at Carlsbad Ranch, the new auditorium at the South Carlsbad Library and
mitigation credits set aside for future mitigation projects.
0 Special programs such as the Police Asset Forfeiture Program, Citizens Options for
Public Safety (COPS) Program, Law Enforcement Block Grant, library computer
purchase and Adult Literacy programs, and habitat preservation programs.
0 Welfare programs such as the HUD-sponsored Carlsbad Housing Authority rental
assistance program, Affordable Housing development, and the Senior Nutrition
Program.
20
Special Revenue Funds
ExDenditures
(in thousands)
7
L
L Spending in Special Revenue funds totaled $6.8 million in 1998-99; a decrease of $224,000
from 1997-98. Many expenditures previously funded with Police Asset Forfeiture funds,
including juvenile diversion and D.A.R.E. maintenance and operation expenses, as well as all
expenses associated with the School Resource Officer Program, are now funded out of the
General fund, creating the reduction in Public Safety expenses in 1998-99. Federal cutbacks in
the Housing Program caused a reduction again in the amount of HUD rental assistance
payments made by the City, reducing the amount of Community Development expenses for the
year. Community Services decreases are attributable to the shift of funding sources for
expenditures from Special Revenue grants to the General fund, as grant funding sources have
been dwindling. In 1998-99, the City used Gas Tax funds to fund several capital projects
including pavement management, traffic signals, curbs and other street-related projects, thus
creating the increase in Public Works expenditures.
Debt Service Funds
The City's Debt Service funds record the payment of interest and principal on the current portion
of outstanding debt not recorded in other funds. As of June 30, 1999, the total debt payable
from non-enterprise sources, excluding obligations under capital leases and advances, was
$21.3 million. City debt is comprised of the Hosp Grove Certificates of Participation (COPS) and
the Redevelopment Tax Allocation bonds. During fiscal year 1997-98, the College Boulevard
191 5 Act Assessment District bonds were refunded. The refunding removed any commitment of
the City's General fund to the bond issue; so, it is no longer shown as a Debt Service fund. No
general obligation bonds are outstanding as of June 30, 1999.
21
Debt Service Funds
Revenues
(in thousands)
Category
Taxes
Income from Property and
1998-99 over Percent
1998-99 1997-98 (under) 1997-98 Change
$1,246 $1,214 $ 32 2.6 %
Investments
Total
Debt service revenues totaled $1.3 million; a decrease of $37,000 from last year. The biggest
factor causing this decrease is the elimination of the College Boulevard Assessment District
bond issue from the Debt Service funds in the early part of 1997-98. Additionally, lower average
cash balances in the Hosp Grove and Redevelopment funds during the year caused lower
interest earnings in those funds.
89 158 (69) (43.7)
$1.335 $1.372 $(37) (2.71%
Debt Service Funds
ExDendit ures
(in thousands)
Category
General Government
Principal
Interest and Fiscal Charges
1998-99 over Percent
1998-99 1997-98 (under) 1997-98 Change
$ 15 $ 15 $ 0 0%
825 1,663 (838) (50.4)
1,645 2,004 (359) (17.9)
Debt-related expenditures decreased $2.3 million in 1998-99. The refunding of the College
Boulevard Assessment District bonds as well as the Hosp Grove COPS created much of this
decrease. One-time debt issuance costs of $1.1 million in 1997-98, combined with the
decreased principal payments surrounding the refunded College Boulevard debt, represent the
decrease in expenditures.
22
CaDital Proiects
A Capital Project fund is one that accounts for the receipt and disbursement of monies that are
restricted for the acquisition or construction of capital facilities (other than those financed by
Enterprise funds). Capital Project funds for the City of Carlsbad include those supported by the
City’s public facilities fees, community facilities district (Mello-Roos) taxes, park development
fees, drainage fees, traffic impact fees, bridge and thoroughfare district and other development
fees, county sales tax funds, and general funds earmarked for capital purposes in the Capital
Construction fund. The capital projects supported by the City’s Redevelopment Agency are
also included in this group.
Capital Projects Funds
Revenues
(in thousands)
from Property Ow
The City’s continued high rate of development spurred the increase in Capital Project fund
revenues. Tax revenues result from the collection of community facilities district (Mello-Roos)
special taxes and the license tax on new construction. The 1998-99 decrease in tax revenues is
the result of lower Mello-Roos special tax payoffs this year. In 1997-98, the Leucadia County
Water District paid over $2.3 million for their share of the La Costa Avenue widening project. In
the current fiscal year, they only paid $350,000, causing the $2 million reduction this year in
intergovernmental revenues. Increases in income from property and investments are the result
of the maintenance of larger cash balances during the year. The increase in contributions from
property owners is due to a large payment made by the Villages of La Costa for the Rancho
Santa Fe Road District.
23
Capital Projects Funds
ExDenditures
(in thousands)
I 1998-99 over Percent
Spending on capital projects totaled $52.1 million; an increase of 1 18.4% from 1997-98. With
the City’s continued development, the need to ensure facilities are available to service the
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. Much of this spending during the
past year was done to facilitate the traffic needs of the City. Projects planned for 1999-2000
continue this trend with $62.4 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
developing areas as well as the current residents is paramount. Spending on capital projects -.
improvements.
Capital Project Expenditures
Versus Residential Permits Issued
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
-Capital Expenditures
I +Permits ~ssued
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. The anomaly in 1991 occurred when the City acquired Alga Road and certain
improvements along the road within the Alga Road Assessment District.
24
Some of the key capital projects under construction or completed during this year include:
0 South Carlsbad Library - Construction
of the $22 million South Carlsbad
Library continued this year, with
funding from the Community Facilities
District No. 1 (CFD #l). This 64,000
square foot library is scheduled to open
in September 1999. The Cole Library
has closed temporarily, and is undergoing extensive remodeling.
0 Business Park Recreational Facility - In fiscal year 1998-99, the City acquired 13
acres to develop a recreation facility for the industrial corridor in Carlsbad. Proposed
amenities may include a fitness center, swimming pool, ball fields, soccer fields,
basketball, handball, volleyball courts, picnic areas, jogging trails, etc. It is
anticipated that staff will meet with the business park community to gather input into
the most-needed amenities. The City may explore privatization options for a portion
of the development which may accelerate the development of the park.
0 Street Improvements
Improvements to streets,
highways, sidewalks, and traffic
signals continue in the city of
Carlsbad. Significant progress
has been made on the traffic
circulation projects in response to
and in anticipation of current and
future development within the
City. The Cannon
RoadAnterstate 5 Interchange
was completed during the year
for the opening of Legoland. The
La Costa Avenue and Palomar
Airport Road widening projects are currently under construction. Other major
circulation projects under construction or design include Cannon Road West,
Faraday Avenue, Rancho Santa Fe Road and Poinsettia LaneAviara Parkway.
c
25
Rancho Carrillo Assessment District - The City formed the Rancho Camllo
Assessment District and acquired certain capital improvements within this area of
Carlsbad during the
fiscal year. The
improvements
acquired included
Melrose Drive from its
existing northern
termination north of
Alga Road to Palomar Airport Road,
improvements to Palomar Airport Road
approximately 1000 feet east and 700 feet
west of the Melrose Drive intersection, sewer
mains, water mains and reclaimed water mains
and a pressure reducing station along the
roadway improvements, riparian mitigation for the roadway improvements, and
relocation of sewer mains and grading for expansion of Poinsettia Lane.
Skateboard Park - Construction was completed this year on a 25,000 square foot
skateboard park facility. This project includes night lighting as well as numerous
curbs, ramps, rails, steps, and other low hazard physical features designed to
challenge skateboard users of all skill levels and abilities. All ramps and other
surface features of the park are limited to four feet in height to reduce hazard levels
and to allow for unsupervised use of the park. The park also includes a work bench
area that provides users a place to repair and adjust their skateboards.
0 Pavement Management Program - The Pavement Management Program is an
ongoing program designed to extend the service life of City streets and to maintain a
smooth and safe driving surface for vehicles. The City utilizes a pavement
management database program to determine pavement management needs for the
purpose of establishing which streets are to be oil sealed, chipped sealed, overlaid
or reconstructed. On a periodic basis, the condition of the roads are field surveyed
and the pavement management database is updated to reflect current conditions.
Each year, specific pavement management projects are defined and funding is
transferred into a pavement management project account.
Entermise Operations
-.
The City of Carlsbad manages water, sewer, solid waste, and a planned golf course as
Enterprise fund operations. An Enterprise fund is one where most or all of the costs involved are
supported by user fees. Within these funds, the City uses many of the accounting practices
applicable to commercial business including the recording of depreciation on fixed assets and
the allocation of overhead costs from support services. User fees are set on an annual basis to
cover both operating costs and debt service needs.
26
-
1998-99
Revenues
A 250-acre municipal golf course is under design directly south of the future Veterans Memorial
Park. The golf course will be centrally located and directly accessible to major roads and the
interstate freeway. Development plans are undetway, with completion scheduled for sometime
in the near future.
Water Golf Course Sewer Solid Waste
$1 9,942 $300 $7,897 $683
Enterprise Funds
Total Revenues, Expenses and Net Income
(in thousands)
Expenses
Net Income
(1 7,172) (214) (5,076) (1 29)
$ 2,770 $ 86 $2,821 $554
1997-98
Revenues $1 8,357 $289 $7,532 $662
Expenses
Net Income
Percent Change I (13.3)% 17.8% ( 1 2.9)% .4%
(1 5,l 62) (2 16) (4,294) (1 10)
$ 3,195 $ 73 $3,238 $552
Most of the increase in water revenues during the current fiscal year is due to the higher-than-
average rainfall during the previous fiscal year. The increase in water expenditures was much
higher than the increase in water revenues, creating the reduction in net income for the year.
Purchased water costs were higher this year due to a drier winter and a larger customer base.
Another factor in the higher expense level this year was the payoff of the Water fund’s portion of
the 800MHz lease in January of 1999 of $416,000.
Golf Course revenues of $300,000 were slightly higher than 1997-98 figures. The majority of
these revenues is derived from income from property and investments. Golf course expenses in
1998-99 consist of primarily street assessments and Mello-Roos taxes associated with the land
purchased for the municipal golf course.
Sewer revenues rose due to increased service charges resulting from the larger customer base,
a by-product of the continuing development within the City. In addition to the increased service
charges, higher average cash balances throughout the year have created increased interest
revenue. Expenses for sewer operations total $5.1 million; $782,000 more than the previous
year. One of the main reasons for the increase was the $416,000 payoff of the 800MHz lease
made in January 1999. In addition, payments to the Encina Wastewater Authority, operator of
the sewer plant, were also higher this year due to the need for additional reserves.
.Solid waste revenues represent charges for recycling fees, non-jurisdictional fees based on the
level of tonnage processed by Waste Management, and interest earned on available cash
balances. The increase in solid waste expenses for the year is due to a new contract the City
27
has entered into with the City of Vista for the disposal of household hazardous waste. This
contract was previously handled by the County.
Internal Service Funds
Internal Service funds are used to account for services provided by a City department to other
City departments. As with an Enterprise fund, the source of revenue is user fees charged to the
departments receiving the service.
Internal Service Funds
Total Revenues, Expenses and Net Income
(in thousands) -
Fleet Health Information Risk Workers'
Management Insurance Systems Management Compensation
1998-99
Revenues
Expenses
Net Income
1997-98
Revenues
Expenses
Net Income
-.
$3,091 $2,789 $1,619 $ 849 $ 638
(2,301) (2,636) (1,653) (670) (755)
$ 790 $ 153 $ (3) $ 179 S(l17) -
$2,826 $1,972 $1,378 $1,102 $ 833
Percent Change I 11.7% 148.7% (1 31.8)% (58.8)% (144.8)%
Self-Insurance Programs - Health Insurance, Risk Manaclement and Workers' Compensation -_
The City is self-insured for general liability claims, workers' compensation and its major health
insurance plan. -
Revenues in the Risk Management fund are down by 23% from last year. This revenue
represents charges to other departments for general liability coverage. Due to a healthy fund
balance, charges to other departments were decreased by 25% in 1998-99. Claims expense
and other related costs for the Risk Management Self-Insurance fund totaled $504,000; down
$121,000 from 1997-98. The City is a member of PARSAC, a risk management pool covering
most losses exceeding $500,000, with catastrophic losses covered by additional excess liability
insurance. The drop in claims expense follows a similar decline in the number of lawsuits in
which the City has been a part. Higher general and administrative expenses of $123,000 reflect
additional staff time being allocated to risk management in order to expand upon our safety
programs city-wide. Effective July 1, 1999, the City became a participating member of the
California Municipal Excess Liability Program, a group purchase program for general liability
coverage. Under this program, the pool provides coverage up to a maximum of $1 0,000,000 per
occurrence with a self-insured retention provided by the City in the amount of $500,000.
28
The estimated claims payable for general liability at year-end was $137,000; down $92,000.
This is the third year in a row the estimated claims payable has decreased by year-end.
Working capital totaled $3.1 million at June 30, 1999. Of this amount, $1.5 million is required to
be retained in the fund under the City's contract with the Insurance Authority.
Revenues in the Workers' Compensation fund are down by over 23% from last year. This
revenue represents charges to other departments for Workers' Compensation coverage. Once
again, due to a healthy fund balance, charges to other departments were decreased by 25% in
1998-99. Workers' Compensation claims expense for 1998-99 amounted to $695,000,
compared to $486,000 in 1997-98. The increase in expenses was due to a 17.5% increase in
indemnity claims during the past fiscal year. Workers' Compensation estimated claims payable
at year-end was $834,000; an increase of $136,000 from 1997-98. Working capital at June 30,
1999 is $1.2 million.
The City also operates a health insurance Internal Service fund for collecting premiums, paying
claims, premiums, administrative costs, and holding reserve funds. Revenues are generated by
charging departments for their share of the estimated health insurance costs during the year.
Health insurance rates charged to the departments were increased during the year to offset
higher health insurance costs incurred by the fund. For fiscal year 1998-99, the health
insurance Internal Service fund produced operating income of $1 54,000.
Other Internal Service Funds
Fleet Management operates a central vehicle maintenance program which services all City
vehicles and other small machinery. Replacement of vehicles, including fire equipment, is an
important component of the program. The City's current policy for funding the replacement of
fleet equipment valued at more than $5,000, is to set aside a certain amount of money each
year in a replacement fund to ensure that there will be sufficient funds available when the
equipment needs to be replaced. Useful lives of vehicles were extended back in 1994 as a cost
savings measure. Vehicle purchases totaled $904,000; $1 00,000 less than the previous year.
Fleet operating expenses during 1998-99 were $2.3 million. The $4.9 million year-end working
capital is earmarked for vehicle replacement.
The City's Information Systems Internal Service fund collects revenues and expenses related to
the providing of resources that will support the various City departments in the performance of
work tasks through computer automation and telecommunication services. The department also
strives to increase citizen access to City services through the use of technology. At yearend,
working capital increased to $1.1 million; up $169,000 from 1997-98.
Anencv Funds
The City uses Agency funds to account for assets held by the City for other individuals, entities
or governments. Typically these funds relate to contractors' cash performance bonds,
assessment district reserve funds, and employee and employer payroll tax withholding accounts.
29
The City held a total of $17.9 million in Agency funds as of June 30, 1999, compared to $17.6
million at the end of 1997-98. This increase is due to the net effect of the addition of the Rancho
Carrillo Assessment District reserve and redemption funds, and the removal of the remaining
deferred compensation trust funds from the City books.
Cash Management
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. 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.
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 1998-99, total assets in the pooled investments were $299.5 million. This
represented an increase of $45.5 million, or 17.9%, from fiscal year 1997-98. Pooled
investments are generally recorded at their market value as required by the Government
Accounting Standards Board statement #31.
The investments in the Treasurer's Pool earned approximately $15.8 million in interest, which
was an increase from $12.8 million earned in the previous fiscal year, due to the maintenance of
a higher average cash balance in the Treasurer's Pool throughout the year. The average yield
of the pooled investments for fiscal year 1998-99 decreased to 5.71% from 5.89% in fiscal year
1997-98.
Investments held separately are managed by the Finance Director and generally include bond
proceeds and other funds which are individually invested. Total assets of investments held
separately were $16.2 million at the end of fiscal year 1998-99.
The fiscal year 1998-99 pooled investments and the investments held separately include the
types of instruments indicated on the next page.
30
c
,-
e
Treasurer's Pooled Investments
Cash and Deposits
Federal Agency Obligations
Treasury Notes
Corporate Notes
Commercial Paper
Investment Pool (LAIF)
SUBTOTAL
Investments Held Separately
Cash and Deposits
I-
-
Amount Invested
Interest Rates (In Million's)
4.10 - 5.10 $ 2.3
0.00 - 8.38 176.6
4.75 - 6.75 9.2
5.25 - 9.50 88.5
5.06 - 5.76 0
5.10 - 5.65 22.9
$299.5
0.00 - 3.25 $ .5
Mutual Funds
Guaranteed Investment Contracts I 5.5419.33
2.9
3.7
Gann Limit - ARRrORriatiOnS Subiect to Limit
CITY OF CARLSBAD In 1979, Proposition 4, the "Gann" initiative, was PROPOS,nON SPEND,NG VERSUS passed. The purpose of this law is to limit APPROPRIATION OF PROCEEDS OF TAXES
government spending by putting a cap on the total (IN MILLIONS)
proceeds of taxes that may be appropriated
each year. This limit is increased each year 180
through a formula that takes into ,60
consideration changes in the Consumer Price Index and state per-capita income. 140
When a city reaches this limit, excess tax 120
revenue must be returned to the State or
citizens through a process of refunds,
rebates, or other means that may be 8o
defined at that time. The Gann Limit for the 60
City of Carlsbad has increased steadily 4o since 1979, and still provides the City with a comfortable operating margin. 20
0
--cum In 1991-92 state law allowed the mmm3gS688 zzzzz:z:z recalculation of the City's limit with new
inflation factors. Using population growth in
San Diego County and growth in State per capita income allowed the Gann limit for 1998-99 to
increase to $162.6 million. Appropriations of "proceeds of taxes" was only $39.7 million, thus
allowing the City a healthy margin of $122.9 million.
31
Economic Outlook
San Diego’s strengthening economy, along with Carlsbad’s recognition as an important regional
employment center and a top-quality community, have brought heightened levels of local real
estate development, both planned and speculative, to the commercial, industrial and residential
marketplace. As a result of new construction, Carlsbad has become one of the fastest growing
cities in the County.
Carlsbad’s industrial market reached its peak in 1998, with over 3.1 million square feet slated for
construction. Much of the new construction activity was speculative, and the direct result of
growing demand for space created from new job growth and lower unemployment rates in the
region (4.2% in 1997 to 3.5% in 1998). Although the regional and local economies are expected
to continue to grow, planned construction in the commercial/industrial market in Carlsbad for
1999 is expected to drop back to approximately one million square feet. As new speculative
space has entered the market, it has placed an upward pressure on vacancy rates (currently
22% or 2.4 million square feet), and consequently, slowed local construction activity. The
current vacancy rate and historic levels of absorption may leave us with an inventory of industrial
and office space that could take two to three years to fill. Currently, there are fewer than 80
acres available in Carlsbad’s industrial corridor for new construction. Within the next five to ten
years, there will be an additional 300-400 acres available in the industrial corridor, but planning
in these areas has yet to be completed.
Carlsbad’s commercial growth in 1999 has also been robust with the opening of Legoland, the
Grand Pacific Resort and Hotel, Marriott Residence Inn, and a number of new restaurants.
During the next couple of years, Carlsbad will see the addition of more hotels and development
of a few commercial centers. However, the long-term future of commercial development
remains uncertain as the City Council evaluates the future of commercial land uses within the
City.
During the mid-l990’s, residential construction activity slowed considerably as a result of a
sluggish economy. However, residential developers continued to process plans for new
residential projects with the hope they would obtain approvals and be in a position to begin
construction when the economy gained momentum. The late 1990’s presented the residential
developer with just such an opportunity. In fiscal years 1997 and 1998, new permits for
residential units averaged 1,137 per year, and in fiscal year 1999, the City will hit a ten year high
with 2,206 units. Ninety-five percent of the residential growth between 1997 and 1999 has been
focused in the southeast and southwest quadrants of the City. While residential growth is
expected to continue at high levels for the next several years, it most likely will be at a slower
rate. This is due to fewer projects in the development review pipeline, and the possibility that
continued increases in mortgage interest rates will create a greater affordability gap for families
wanting to purchase a new home. We also expect to see a greater number of multifamily rental
units under construction as a result of the limited supply and growing demand for more
affordable housing.
-.
The City’s Growth Management Program holds the key to the timing of many of the develop-
ments. The program was established by a vote of the citizens in 1986 and is designed to ensure
32
c
that new development occurs in conjunction with careful planning of infrastructure and service
needs. Under the Growth Management Program, development occurs only when infrastructure
improvements required to serve the development are financed and constructed as a part of the
development. Capital projects are phased to closely match incremental growth demands.
Standards have been established in eleven areas including circulation, City administration,
schools, libraries, fire protection, parks, drainage, water, sewers, and open space.
As a result of the Growth Management Program, fee programs are in place to ensure that funds
are available to pay for public facilities as they are needed. An outgrowth of the Growth
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
600 units per year and annual commerciaI/industrial development between 450,000 and
765,000 square feet per year. With this level of growth, Carlsbad expects to construct between
$26 and $62 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.
Tourism is one of Carlsbad’s fastest growing business segments and a growing source of
income to the City’s General fund. The City recognizes the importance of its tourist industry
through its financial support to the Convention and Visitors Bureau and the annual appropriation
of funds to keep the state beach
parking free for all beach users. A
major boost to the tourism industry
occurred in the current year with
the opening of Legoland family
theme park and the Grand Pacific
Resort and Hotel. Construction
work has begun, or is in the final
stages, on several other resort and
timeshare properties in the City
including the Marriott Residence
Inn in the Carlsbad Research
Center, the Marriott Courtyard near
the McClellan-Palomar Airport, and
the Hilton Gardens on the coast. It
is anticipated that these new resorts will significantly boost the City’s transient occupancy tax
and sales tax collections.
Sales tax, the City’s largest single revenue
source to the General fund, is projected to
continue to increase in the near future. This
increase can be attributed to the first full-year
operation of Legoland, the projected opening of
a number of new restaurants and the Phase II expansion of Carlsbad Company Stores, an
upscale outlet mall. This expansion will add an additional 20 stores to the over 50 stores
33
already in the mall, and is expected to be completed by the end of 1999. The continuation of a
healthy economy and strong consumer confidence will also add to the sales tax revenue in the
upcoming year.
Through careful planning and prudent financial management, Carlsbad has weathered the roller
coaster ride of the 1990’s, and is now positioned to enter the 21‘ century in strong financial
health. The City’s revenue projections reflect an expectation of increasing housing prices,
continued strong development, but at a lower growth level than in the past two years, and
continued consumer confidence. We have also projected increases in sales tax and transient
occupancy taxes based on the increase in tourism expected from Legoland and several new
hotels currently under development. These increased revenues will enable the City to enhance
service levels, ensuring the’ maintenance of a high-quality of life for Carlbad’s residents.
Carlsbad is focused on achieving its mission of providing top 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 Outstandina 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, 1998. This was the second consecutive year that the City has achieved this prestigious
award. In order to be awarded a Certificate of Achievement, a government unit must publish an
easily readable and efficiently organized comprehensive annual financial report. This report
must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement
Program’s requirements and we are submitting it to GFOA to determine its eligibility for another
certificate.
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, 1998. We believe
our current report continues to conform to the program requirements.
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.
.
34
Financial Section -
Supplemental Data -
Statistical Information -
This section contains the combined or summarized financial
statements for all funds, as well as the notes to the financial
statements and required supplementary information.
This section provides more detailed information on the activity
within each fund including revenues, expenditures, changes in
fund balances, comparisons to budget figures and other related
data.
This section provides data on the City's fiscal activity over the
past ten years including revenues, expenditures, debt, assessed
value, and demographic information.
Accountinn System and Budnetarv Control
The City's accounting system is designed around the following basic principles:
The City is not a single entity. It is the total of many entities, each with its separate function
and legal restrictions on the use of City resources. In the private sector, a corporation may
have many "subsidiaries" which comprise the parent corporation. In the public sector, a
city government may have a variety of "funds" that provide the basis for separately
recording the financial data related to a specific activity. A fund is an accounting entity with
a complete set of self-balancing accounting records. Each fund has been established
because of some restriction on the use of resources received by that fund. This report
includes the transactions of all entities over which the City Council of the City of Carlsbad
has authority (as defined by the Governmental Accounting Standards Board).
The City's accounting system operates on a modified accrual basis for all governmental
and agency-type funds. Governmental funds include the General, Special Revenue, Debt
Service and Capital Projects funds. A modified accrual system is one where: a) revenues
are recognized when they are both measurable and available to liquidate liabilities of the
current period; and b) expenditures are recognized when an event or transaction is
expected to draw upon current spendable resources (rather than future resources).
The proprietary fund types (Enterprise and Internal Service funds) use the accrual method
of accounting. Revenues and expenses are recorded when earned or incurred,
respectively.
Internal controls exist within the accounting system to ensure safety of assets from
misappropriation, unauthorized use or disposition, and to maintain the accuracy of financial
record keeping. These internal controls must be established consistent with sound
management practices based on the cosffbenefit of the controls imposed. The cost of a
control should not be excessive in relation to its benefit as viewed by City management.
The internal controls in existence within the City's system are sufficient to ensure in all
material aspects both the safety of the City's assets and the accuracy of the financial
record keeping system.
35
(5) As a recipient of federal, state and county financial assistance, the City is also responsible
for ensuring that an adequate framework of internal controls is in place to ensure
compliance with applicable laws and regulations related to those programs. The
framework of internal controls is subject to periodic evaluation by management.
As part of the City's single audit, tests are made to determine the adequacy of the
framework of internal controls. This includes the portion relating to Federal assistance
programs, as well as determining that the government has complied with applicable laws
and regulations. The results of the City's single audit for the fiscal year ended June 30,
1999, provided no material weaknesses in the framework of internal controls or significant
violations of applicable laws and regulations.
(6) 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 yearend
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.
Ac knowlednments
This report has been a joint effort by many people from many different areas of responsibility.
The dedicated efforts of Kevin Branca, Assistant Finance Director, and all of the accounting
staff, deserve full credit for the preparation and contents of this report. We appreciate Jennifer
Taylor of Conrad & Associates for the professional way in which the audit of this financial report
was conducted. It has been a pleasure to work with the Conrad & Associates staff throughout
this period.
Respectfully submitted,
L~A HILDABRAND
Finance Director
36
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Carlsbad,
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 1998
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.
President
Executive Director
37
California Societg of
LXunicipal 3inance -Officers
Certificate of Award
Outstanding Financial Reporting 1997-98
Presented to the
City of Carlsbad
March I, 1999
Dedicated to Excellence in Municipal Financial Management
38
N
w*E
CAMP
PEN DLETON
SOLANA BEACH i
POWAY
CORONADO
IMPERIAL BEACH
TllUANA
VISTA
-------
RAMONA
39
CITY OF CARLSBAD
ELECTED CITY OFFICIALS
Claude A. Lewis, Mayor
Matt Hall, Mayor Pro Tern
Ramona Finnila, Council Member
Ann J. Kulchin, Council Member
Julianne Nygaard, Council Member
Aletha L. Rautenkranz, City ClerWlnformation Systems Director
James M. Stanton, City Treasurer
ADMINISTRA TlON 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, Recreation Director
CHAIRPERSONS, COMMISSIONS AND BOARDS
Arthur Wood
Bruce Macklin
Robert Turner
Bill Compas
Gordon Bizieff
Roy Latas
Claude A. Lewis
Karen Gleason Huss
Julie Baker
James Page
Courtney Heineman
James Whittaker
Ann L’Heureux
Bill Dominguez
Thomas Blake
Vacant
Arts Commission
Beach Erosion Committee
Community Television Foundation
Design Review Board
Historic Preservation Commission
Housing Commission
Housing and Redevelopment Commission
Library Board of Trustees
Parks and Recreation Commission
Personnel Board
Planning Commission
Senior Commission
Serra Cooperative Library System Advisory Board
Sister City Committee
Traffic Safety Cornmission
Underground Utility Advisory Committee
- 40
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42
c C E RT I F I E D P U B L I C ACCO U NTA N TS
ASSOCIATES, L.L.p
The Honorable Members of City Council City of Carlsbad, California
1100 MAIN STREET, SUITE C
IRVINE, CALIFORNIA 92614
Fax (949) 263-5520
(949) 474-2020
INDEPENDENT AUDITORS’ REPORT
We have audited the accompanying general purpose financial statements of the City of Carlsbad, California as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility of the management of the City of Carlsbad, California. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Carlsbad, California as of June 30, 1999, and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles.
The supplementary information regarding the year 2000 issue identified in the accompanying table of contents as required supplementary information is not a required part of the basic financial statements, but is supplementary information required by the Governmental Accounting Standards Board. We did not audit and do not express an opinion on such information. Further, we were unable to apply to this information the procedures prescribed by professional standards because of the difficulty in ascertaining whether the information presented includes a sufficiently complete description of the year 2000 issue as it relates to the reporting government. In addition, we do not provide assurance that the City of Carlsbad is or will become year 2000 compliant, that the City of Carlsbad’s year 2000 remediation efforts will be successful in whole or in part, or that parties with which the City of Carlsbad does business are or will become year 2000 compliant.
43
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
The Honorable Members of City Council City of Carlsbad, California
Page Two
Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining, individual funds, and individual account group financial statements and schedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Carlsbad, California. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. The scope of our audit did not include the supplemental statistical schedules listed in the table of contents and we do not express an opinion on them.
In accordance with Government Auditing Standards, we have also issued our report dated September 28, 1999 on our consideration of the City of Carlsbad’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
&r/*Lrs&4WLb, /.A P
September 28, 1999
44
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. 1.
r.
45
CITY OF CARLSBAD
Combined Balance Sheet - All Fund T!.pes and Account Groups
Assets and Other Debits
Assets:
Cash and investments (note 3)
Receivables:
Loans
Taxes
Accounts, net
Other
Accrued interest
Due from other funds (note 4)
Due from other governments
Advances to other funds (note 5)
Inventory
Prepaid expenditures
Restricted assets:
Cash and investments (note 3)
Accrued interest
Fixed assets, net (notes 6 and 7)
Amount available in debt service funds
Amount to be provided for retirement of
Other debits:
general long-term debt
Total assets and other debits
Liabilities, Eauitv and Other Credits
Liabilities:
Accrued liabilities
Accrued interest payable
Due to other funds (note 4)
Advances from other funds (notes 5 and 10)
Due to other governments
Estimated claims payable (note 20)
Due to bondholders
Current portion of long-term debt (note 10)
Deposits payable
Current liabilities payable from
Deferred revenue
Long-term debt payable (notes 8, 9 and 10)
restricted assets - accrued interest
Total liabilities
Equiq and Other Credits:
Investment in general fixed assets
Contributed capital (note 18)
Fund balances:
Reserved (note 16)
Unreserved (note 16)
Reserved (note 16)
Unresewed (note 16)
Retained earnings:
Total equity and other credits
Total liabilities. equity and other credits
June 30: 1999
Governmental Fund Types
Special Debt Capital
General Revenue Service Projects
$ 43,456,368 23,835,913 1.768.195 127,796.869
175,069
2,925,741
38,609
91,173
166,170
9,166
17,243,360
24,326
12.753
5,467,884
19,468
16,625
84
172,198
2,000,000
206.3 13
35,659
15,912
2.374
583.091
97,880
79.407
207,466
$ 64,142,735 31,718,485 1,819,766 128,767,087
$ 4,983,961 377,813 3,839,321
109,482 56,688
5,550,000
1,362
8,26 1 47,614 9,323
7,037,016 407,324
12.029.238 536.271 9.862.656
12,892.880 12,543,428 1,528.500 16,866,478
39,220.617 18,638,786 291.266 102,037,953
52.1 13.497 3 1.182.2 14 1.819.766 118.904.43 1
$ 64,142.735 3 1.718.485 1.819.766 128.767.087
See accompanying notes to general purpose financial statements
46
Fiduciary
Fund TYDe ProDrietarv Fund TvDes Account Grouus
General
Fixed
Assets
General
Long-Term Totals
Debt (Memorandum Only)
Internal
Service Enterprise Agency
87,099,82 1 1 2.1 3 0,3 77 17.872,2 19 3 13.959.762
5,642,953
3,043.5 8 5
4,052,55 1
91,173
157,890
327.835
3 18.985
19,243,360
363,235
426.532
52,746
3,369,395
16 1,665
58,214
238,414
34,223
100,495
7,597
10,608
44$014
1,7 15,645
35,166
122,257,295
1,7 15,645
35,166
218,995,644 5,093,296 9 1,645,053
1,819,766 1,819,766
31,054,291
32,874,057
3 1,054,291
601,248.373 214,988,361 17,358,391 17,934,43 8 91,645,053
3,421,880
161,665
2,737,200
922,153
32,000
1,694,339
1,856,080
653,111
1,313,333
13,276,086
1,485,72 1
327,835
19,243,360
923,515
1,345,333
9,915,655
1,694,339
8,454,340
1,485,721
9,9 15,655
6,533,062
10,956,160
298,529
37.8 17.658
9.407.586
298,529
1,963,246
15.899,761
28.986.853
21.917.897
1,966.444 17.934.438 32,874,057 104,189.957
9 1.645.053 9 1.645.053
130,128.553 122,550,997 7,577,556
43,831,286
160,188.622
1.682.671
6 1,767.810
186.00 1.508
1 .682.67 1
69.582.23 1
197.058.41 6
7.8 1-1-39 1
15.393.917 9 1.645.053
2 14.988.36 1 17.358.391 17.934.438 91.645.053 32.871.057 601.218.373
47
48
..-
I
CITY OF CARLSBAD
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types
Year Ended June 30, 1999
Totals
Special Debt Capital (Memorandum
General Revenue Service Projects Only)
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Income from property and investments
Interdepartmental charges
Contributions from property owners
Donations
Miscellaneous
$ 43,108,499
3,880,911
3,826,686
6,586,438
804,258
1,992,453
1,933,820
I, 190,009
1,679,306
4,068,5 14
65,096
131,697
986, I25
7,397,405
349,791
346,799
1,246,185
88,382
11,473,812
9,852,189
I 53,6 13
5,858,605
38,365,899
7.499
57,507,802
17,80 l,6 I4
3,826,686
6,805,147
935,955
8,925,565
1,933,820
45,763,304
349,79 1
1.544.307
Total revenues
Expenditures:
Current:
General government
Public safety
Community development
Community services
Public works
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Proceeds of advances
Total other financing sources (uses)
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures and
other financing uses
Fund balances at beginning of year
Residual equity transfers in (note 19)
Residual equity transfers out (note 19)
Fund balances at end of year
63,323,074 15,024,733 1,334,567 65,711,617 145,393,99 I
5,559,797 15,262 1,209,466 6,784,525
2 1,6 13,003 3 14,748 2 1,927,75 1
5,001,754 3,634,880 8,636,634
6,847,45 1 693,927 734 1,378
10,563,156 2,126,527 12,689,683
52,106,587 52,106,587
824,92 1 824,92 I
1,644,726 1,644,726
49.585.16 1 6,770,082 2.484.909 53.3 16.053 I 12.156.205
13.737.913 8.254.65 1 (1.150.342) 12.395.564 33.237.786
7,500 782,406 800,000 1,0133 13 2,603,419
588,763 588,763
(1.825,OOO) (22,906) (380,000) (3753 13) (2,603,4 19)
(1,s 17,500) 759,500 1,008,763 638,000 588,763
11,920,413 9,014,151 (141,579) 13,033,564 33,826,549
4 1,844,169 22,168,063 I ,96 1,345 105,9 10,282 171,883,859
39,4 15 39,4 15
(1,690,500) (39,4 15) (1,729,9 15)
$ 52,l 13,497 3 I, 182,2 I4 1,s 19,766 1 18,904,43 1 204,O 19,908
See accompanying notes to general purpose financial statements.
49
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. 1999
General Fund Special Revenue Funds
Actual on Variance- Actual on Variance-
Budgetary Over Budgetary Over
Budget Basis (Under) Budqet Basis (Under)
Revenues:
Taxes $4 1,874,000 43,108,499 1,234,499 1,602,500 1,679,306 76,806
Intergovernmental 3,600,000 3,880,91 1 280,911 3,943,229 4,068,514 125,285
Licenses and permits 3,430,000 3,826,686 396,686
Charges for services 6,755,000 6,586,438 (1 68,562) 65,000 65,096 96
Fines and forfeitures 800,000 804,258 4,258 124,000 13 1,697 7,697
Income from property and investments 2,250,000 1,992,453 (257,547) 896,744 986, I25 89,381
lnterdepartmental charges 1,650,000 1,933,820 283,820 123,500 (123,500)
Contributions from property owners 4,659,500 7,397,405 2,737,905
Donations 470,858 349,79 1 (1 2 1,067)
Miscellaneous 1,500,000 I, 190,009 (309,99 1) 1 12,900 346,799 233,899
Total revenues 61,859,000 63,323,074 1,464,074 1 1,998,23 1 15,024,733 3,026,502
Expenditures:
Current:
General government
Public safety
Community development
Community services
Public works
Principal retirement
Interest and fiscal charges
Debt service:
9,719,499 7,376,303 (2,343,196)
22,937,200 2 1,758,443 (1,178,757) 8 16,298 797,809 (1 8,489)
5,805,770 5,44643 1 (359,119) 4,541,184 4,03 1,786 (509,398)
7,305,116 7,117,540 (1 87,576) 1,032,7 1 1 910,585 (122,126)
12,530,627 11,668,681 (861,946) 4,206,014 4,061,292 (144,722)
Total expenditures 58,298,2 12 53,367,618 (4,930,594) 10,596,207 9,801,472 (794,735)
Excess (deficiency) of revenues
over (under) expenditures 3,560,788 9,955,456 6,394,668 1,402,024 5,223,261 3,82 1,237
Other financing sources (uses):
Operating transfers in 7,500 7,500 782,406 782,406
Operating transfers out (1,835,500) (1,835,500) (22,906) (22,906)
Proceeds of advances
Total other financing sources
(uses) (1,835,500) (1,828,000) 7,500 759,500 759,500
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures and
other financing uses 1,725,288 8,127,456 6,402, I68 1,402,024 5,982,761 4,580,737
Fund balances at beginning of year 4 1,844,169 4 1,844,169 22,168,063 22,168,063
Residual equity transfers in 39,4 15 39,4 15
Residual equity transfers out (1.680,OOO) (1,680,000)
Fund balances at end of year $4 1.889,457 48,33 1,040 6,44 1,583 23,570,087 28,150,824 4,580,737
See accompanying notes to general purpose financial statements.
50
Totals
(Memorandum Only) Debt Service Funds
Actual on
Budgetary Basis
Variance-
Over
(Under)
46,185
(3 1,668)
Actual on
B irdgetary Basis
Variance-
Over
(Under) Budget
44,676,500
7,543,229
3,430,000
6,820,000
924,000
3,221,744
1,773,500
4,659,500
470,858
1.6 12.900
Budget
1,200,000
75,000
1,246, I85 46,03 3,990
7,949,425
3,826,686
6,65 1,534
935,955
3,02 1,910
1,933,820
7,397,405
349,79 1
1,536,808
79,637,324
1,357,490
406,196
396,686
(1 68,466)
11,955
(199,834)
160,320
2,737,905
(121,067)
(76,092)
4,505,093
43,332
1.275.000 14,517 75, I32,23 1 1,289,5 17
26,000 15,262 (1 0,738) 9,745,499
23,753,498
10,346,954
8,337,827
I6,736,64 1
7,39 1,565
22,556,252
9,478,437
8,028,125
15,729,973
304,92 1
1.367.168
(2,353,934)
(I, 197,246)
(868,5 17)
(309,702)
(1,006,668)
2,92 1
113.595)
302,000
I .380.763
2.92 1
(I 3.595)
304,92 1
1,367,168
1,687,35 1
302,000
1,380,763
1,708,763 12 1.4 12) 70.603.182 64.856.44 I (5,746,741)
I0,25 1,834 35,929 (433.763) (397.834) 4,529,049 14,780,883
789,906
588.763
(2,238,406)
789,906
(402,906)
588.763
(380,000) (380,000)
588.763
(1,835,500)
588,763
208,763 (I ,835,500) (859,737) 208,763 975,763
244,692 2,693,549
65,159,064
(1.680.000)
1 3,92 1,146
65,159,064
39,4 15
(I .680.0001
I 1,227,597
39,4 15
(433,763)
I, 146,832
(1 89,07 1)
1,146,832
957.76 1 244,692 7 13.069 66, I72,6 13 77,439,625 1 I ,267,O 12
51
CITY OF CARLSBAD
Combined Statement of Revenues, Expenses and
Changes in Retained Earnings - All Proprietary Fund Types
Year Ended June 30, 1999
Internal
Service _. Totals
(Memorandum Only) Enterprise
Operating revenues:
Water sales
Sewer services charges
Other charges for services
Contributions from other
government agencies
Miscellaneous
!t 15,922,080
5,470,421
1,247,449
15,922,080
5,470,42 1
8,937,479
396,9 14
1,756.463
7,690,030
65 1,024
396,9 14
1,105,439
Total operating revenues 24,142,303 8,341,054 32.483.357
Operating expenses:
Plant operations
Purchased water
Depreciation
Fuel and supplies
Claims expense
General and administrative
1,520,000
9,624,6 1 5
2,624,032
7,779,977
1,520,000
9,624,6 1 5
3,788,901
450,664
3,834,075
10.344.963
-
1,164,869
450,664
3,834,075
2,564,986
Total operating expenses 2 1,548,624 8,014,594 29.563.2 18
326,460 Operating income (loss) 2,593,679 2,920,139
~
525,759
1 19,20 1
Nonoperating revenues (expenses):
Income from property and investments
Interest expense and fees
Gain (loss) on sale of property
Property taxes
Miscellaneous income (expense)
Amortization of issuance costs
4,2 19,875
(1,025,973)
119,017
984,868
814
(1 6,070)
3,694,116
(1,025,973)
(184) 984,868
814
(1 6,070)
Total nonoperating revenues
(expenses) 3,637,57 1 644,960 4.282.53 1
Net income (loss) 6,23 1,250
57,2 19,26 1
97 1,420
6,842.97 1
7,202,670
Retained earnings at beginning of year 64,062,232
Retained earnings at end of year $ 63,450.5 1 1 7.8 14.39 1 7 1.264.902
See accompanying notes to financial statements.
52
CITY OF CARLSBAD
Combined Statement of Cash Flows - All Proprietaq Fund Types
Year Ended June 30. 1999
Enterprise Internal Service
Totals
(Memorandum Only)
Cash flows from operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:
Depreciation and amortization
(Increase) decrease in receivables
(Increase) decrease in due from other governments
(Increase) decrease in inventory
(Increase) decrease in prepaid expenses
Increase (decrease) in accrued liabilities
Increase (decrease) in due to other governments
Increase (decrease) in deposits payable
Increase (decrease) in estimated claims payable
Increase (decrease) in deferred revenue
Increase (decrease) in loans payable
$ 2,593,679
2,624,032
(72,274)
36,296
(3,239)
7 13,43 5
918,519
359,202
(107,532)
(1 0 1,570)
326.460
1,164,869
(27,772)
(1 5,66 1)
199,675
391,169
55,143
2,920,139
3,788,901
(100,046)
36,296
(18,900)
199,675
1,104,604
918,519
359,202
55,143
(107,532)
(101,570)
Net cash provided by (used for) operating activities
Cash flows from noncapital financing activities:
Cash received from other funds
Cash paid to other funds
Net cash provided by (used for) noncapital
financing activities
Cash flows from capital and related financing activities:
Purchases of fixed assets
Principal payment on bonds
Interest and other fees paid
Property taxes received
Capital contributions received
Net cash provided by (used for) capital
and related financing activities
6,960,548 2,093,883 9,054,43 1
1,705,692
(25,692)
1,705,692
(25,692)
1,680,000
(5,805,172)
(2,113,033)
(86 137 1)
984,868
10,4433 12
(1,083,974)
1,680,000
(6,889,146)
(2,113,03 3)
(86 137 1)
984,868
10,443,812
2,648,904 (1,083,974) 1,564,930
Cash flows from investing activities:
Interest on investments 3,694,274 525,759 4,220,033
Net cash provided by (used for) investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
3,694,274 525,759 4,220,033
14,983,726
72,138.034
-
1,535,668
10,594,709
16,519,394
82,732,743
c-. Cash and cash equivalents at end of year $ 87,121.760 12,130,377 99,252,137
53
CITY OF CARLSBAD
Combined Statement of Cash Flows - All Proprietary Fund Types
(Continued)
Enterprise
Reconciliation of cash and cash equivalents to amounts
reported on the balance sheet:
Reported on the balance sheet:
Cash and investments $ 87,099,821
Restricted assets - cash and investments 1,7 15,645
Less investments not meeting the definition of cash
equivalents:
Investment contracts (1,693,706)
Cash and cash equivalents at end of year $ 87,121,760
Supplemental schedule of noncash investing,
capital and financing activities:
Capital assets contributed by (to) other funds
Internal Service
12,130,377
12,130,377
Totals I
(Meniorandum Only)
99,230,198
1,7 15,645
-- (1,693,706)
99,252,137 -
$ 1,232,729 171,195 1,403,924
See accompanying notes to general purpose financial statements.
54
c
L
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
Year Ended June 30,1999
(1) Summary of Significant Accounting Policies
The City of Carlsbad, California (Carlsbad) was incorporated on July 16, 1952. Carlsbad operates under a Council-Manager form of government and provides the following services: general government, public safety, community development, community
services and public works.
The accounting policies of Carlsbad and its component units conform to generally accepted accounting principles as applicable to governmental units. The following is a
summary of the more significant policies:
.-
(a) Description and ScoDe of the Reporting Entity
As required by generally accepted accounting principles, these financial statements present the City of Carlsbad (City) and its component units, entities for which the City is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization’s governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide
specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable for an organization if that organization is fiscally dependent upon the City (Le,, it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City’s financial statements to be misleading or
incomplete.
Based upon the above criteria, the component units of the City are the Housing Authority of the City of Carlsbad, the City of Carlsbad Public Improvement Corporation, the Carlsbad Redevelopment Agency and the Carlsbad Municipal
Water District (District).
Since the City Council serves as the governing board for these component units, all of the City’s component units are considered to be blended component units. Blended component units, although legally separate entities, are in substance, part
of the City’s operations and so data from these units are reported with the interfund data of the primary government. The required reportable portion of the Public Improvement Corporation is presented in the Hosp Grove debt service fund. Only the City of Carlsbad Public Improvement Corporation and the Carlsbad Redevelopment Agency issue separate component unit financial statements. Upon their completion, the financial statements of these component units can be obtained from the Finance department.
55
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
J1) 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 balancehetained 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 Proiects 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.
.-
I.
56
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 and reporting for its proprietary operations as well as the following pronouncements issued on or before November 30, 1989, unless these pronouncements conflict with or contradict GASB pronouncements: Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARBS) of the Committee on Accounting Procedure. Proprietary funds include the following fund types:
Enternrise Funds
Enterprise funds are used to account for operations (a) that are financed primarily through user charges, or (b) where the governing body has decided that
determination of net income is appropriate.
Internal Service Funds
Internal service funds are used to account for goods or services provided by one 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 trustee capacity or as an agent for individuals, private organizations, other governmental units, and/or other funds. The following is the City’s fiduciary fund type:
Anencv Fund
Agency funds are used to account for assets held by the City in an agency capacity for individuals and private businesses. They do not involve measurement of results of operations.
ACCOUNT GROUPS:
Account groups are used to establish accounting control and accountability for the City’s general fixed assets and general long-term debt. The following are the City’s account groups:
57
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summarv 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 Grow
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) Measurement Focus and Basis for Accounting
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 availabIe, 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, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. 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.
58
1
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summary of Significant Accounting: Policies, (Continued)
Real property taxes are levied on October 15 against owners of record at January 1. The taxes are due in two installments, on November 1 and February 1, and become delinquent after December 10 and April 10, respectively. Tax liens attach annually as of 12:Ol a.m. on the first day of January in the fiscal year for which the taxes are levied. Under the provisions of NCGA Interpretation 3, property tax revenue is recognized in the fiscal year for which the taxes have been levied, provided it is collected within 60 days of the end of the fiscal year.
Governmental expenditures are recorded when the related fund liability is incurred. Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year.
Proprietary funds use the accrual basis of accounting, i.e., revenues are recognized in the period earned and expenses are recognized in the period incurred.
Encumbrances
Encumbrance accounting, under which purchase orders, purchase order requests, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary control in the governmental funds. Encumbrances outstanding at year-end do not constitute expenditures or liabilities, but are
reported as reservations of fund balance.
Cash and Investments
Cash includes amounts in demand and time deposits. 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 income from property and investments reported for that fiscal year. Income @om property and investments includes interest earnings; changes in fair value; any gains or losses realized upon the liquidation, maturity, or sale of investments; property rentals and the sale of City owned property.
59
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies. (Continued)
The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund’s average cash and investments balance.
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.
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.
ComDensated 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, 1999, 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.
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.
Unbilled Services
Unbilled water revenue of the enterprise funds is recognized as earned when the
water is consumed.
60
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summary of SiPnificant Accounting Policies, (Continued)
(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.
Fixed assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, and drainage systems, have not been capitalized. Such assets normally are immovable and of value only
to the City. Therefore, the objective of stewardship for capital expenditures is satisfied without recording these assets.
In the General Fixed Assets Account Group, construction in progress is transferred to buildings or improvements upon approval by the City Council, which approximates the completion date.
No depreciation has been provided on general fixed assets.
(k) Fixed Assets - Proprietary Funds
Fixed assets used by proprietary funds are stated at cost or estimated historical cost. Contributed fixed assets are recorded at estimated fair market value at the time received. Net interest costs are capitalized on projects during the construction period.
c
Depreciation is charged to operations using the straight-line method based on the estimated useful life of the related asset. The estimated useful life of the assets are as follows: Years
Buildings and improvements 10- 50 Wells, reservoirs and dams 10- 100 Transmission and distribution lines 40 - 70 Sewer, sewer lines and wells 50 Sewage treatment facility 50 Equipment 3- 20
61
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1, Summary of Significant Accounting Policies, (Continued)
Deferred Revenue and Charges
The deferred revenue and charges in the General fund represent funds received for
future programs, interest accrued, but not available, on advances to the Carlsbad Redevelopment Agency and deferred lease charges on the City’s 800 Mhz communications equipment.
The deferred revenue and charges in the capital projects funds relate to funds received and to be applied toward future construction and traffic signals, a long term receivable for development fee revenue earned but not available and a
prepaid lease payment.
The deferred revenue and charges in the enterprise funds relate to in-kind
prepayments for sewer installation services to be rendered and deferred charges
generated from the refunding of the water COPS and Encina bonds.
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.
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 funds are recorded as additions to contributed capital.
Total Columns
Total columns on the combined statements are captioned “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 cash flows in conformity with generally accepted accounting principles. Such data is not comparable to a consolidation since interfund eliminations have not been made.
62
c
-
I-
-
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(2) Budpetary 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 proposed operating budget for the fiscal year commencing the following July 1. The budget
includes proposed expenditures and estimated revenues on a departmental basis.
2. Public hearings are conducted at City Council meetings to obtain citizens’
comments during June.
Prior to July 1, the budget is enacted legally through passage of an appropriation
resolution. 3.
The City Manager is authorized to make transfers of appropriated amounts from one department to another within a fund. The legal level of budgetary control is at the fund level. Revisions that alter the total appropriations of any fund must be approved by the City Council with the exception of budget adjustments which involve offsetting revenues and expenditures. The City Manager is authorized to increase or decrease an appropriation for a specific purpose where the appropriation is offset by unbudgeted revenue which is designated for said specific purpose. Quarterly budget reviews are conducted each year and any major changes to the adopted budget are approved by the City Council at that time. During the year, several supplementary appropriations were necessary.
Budgets for governmental type funds are adopted on the modified accrual basis, except that encumbrances are treated as budgeted expenditures in the year purchases are committed.
Expenditures may not exceed budgeted appropriations at the fund level. All appropriations lapse at fiscal year-end unless City Council takes action in the form of a resolution to continue the appropriation into the following fiscal year.
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 have 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.
63
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
J2) Budgetary Data. (Continued)
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 $48,33 1,040 28,150,824 957,761 Encumbrances outstanding at year-end 1,557,633 467,693
Fund balances designated for continuing appropriations 2,354,610 2,566,866 - Earned leave at year-end (1 29,786) (3,169) - Fund balances of nonbudgeted funds - - 862,005
Fund balances - GAAP basis $52.1 13,497 3 1.182.21 4 1.8 19.766
(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 exceed 30% of the portfolio; money market funds whose portfolios consist of one or more of the foregoing investments; a sweep account and the State Treasurer’s investment pool.
State statutes require that all deposits be insured or collateralized. Depositories holding public funds on deposit are required to maintain collateral in the form of a pool of government securities with a market value of at least 10 percent in excess of the City’s deposit or 50 percent in excess of the deposit as collateral in mortgage pools.
64
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
J3) Cash and Investments. (Continued)
Cash and investments are classified in the accompanying combined balance sheet as follows:
Cash and investments Restricted assets: Cash and investments
$3 13,959,762
1,715.645
$3 15,675,407
Cash and investments held by the City at June 30, 1999 consisted of the following:
Cash on hand (petty cash)
Deposits Investments
!$ 7,452 4,22 1,152 3 1 1,446,803
Total cash and investments $3 15,675,407
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, 1999.
Catenow Bank Carrying
3 Balance Amount
Demand deposits $200,000 4,099,489 4,299,489 2,82 1,652
Bank investment contracts 1,399,500 1.399.500 1,399,500
Form of Deposit - 1 - 2 -
$200.000 5,498,989 5,698,989 4,22 1,152 -
c
65
(Continued)
(3 ) Cash and Investments, (Continued)
Investments:
As defined in Governmental Accoun ing Standards Board Sta in securities are categorized in the following manner: ement No. 3, investments
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
Category 1 - its agent in the City’s name. Investments that are insured or registered, which are held by the City or
Category 2 - by the counterparty’s trust department or agent in the City’s name. Uninsured and unregistered investments, for which the securities are held
Category 3 - by the counterparty or by its trust department or agent, but not in the City’s name. Uninsured and unregistered investments, for which the securities are held
Catenory Form of Investment - 1 - 2 - 3 Carwing Amount
United States Treasury notes $ 9,189,979 United States Government agency obligations 176,6 1333 1 Corporate notes 88.47 1.427
$274,274,937
Investments not subject to categorization:
Investment in Local Agency Investment Fund (a) Investment in mutual funds Investment contracts (b)
- - 9,189,979
- - 176,61333 1 - - 88,47 1,427 - -
32,036,177 3,836,383 1.299.306
$3 1 1,446.803
(a) The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at
amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage- backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations.
66
c
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
J3) Cash and Investments, (Continued’)
(b) This is contract value. No secondary market exists for resale in order to establish market value.
The carrying amount of all investments reflected in the above table is at fair value, except for nonparticipating investment contracts which are carried at cost because they are not transferable and they have terms that are not affected by changes in market interest rates.
(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, 1999:
Due From Due To Other Funds Other Funds
General Special Revenue Funds: Community Development Block Grant Federal Grants Senior Nutrition State Grants Capital Projects Funds: Federal Grants Enterprise Funds: Sewer Carlsbad Municipal Water District
Totals
$- 166,170
13,220
62,500
26,920
6,842
56,688
- 161,665 161,665 -
$327.835 327,835
67
- CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
__
(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, 1999: -
Amount Advances From Advances To
General Fund
General Fund
General Fund
General Fund
Capital Projects Fund: 1 Park Development Fund $ 2,550,000
Enterprise Fund: - Golf Course Fund 2,737,200
Account Group: Long-Term Debt Account Group 10,956,160
Capital Projects Fund: LFMP Zone Transportation Fund 1,000,000
Special Revenue Fund: Capital Projects Fund: Gas Tax Fund BTD #3 Fund 2.000,000
Total advances $19,243,360
16) General Fixed Assets
A summary of changes in the general fixed assets account group is as follows:
Balance at Balance at
July 1, 1998 Additions Deletions June 30, 1999
Land $28,042,044 4,832,861 - 32,874,905
Buildings 27,683,709 - - 27,683,709
Improvements 4,091,655 301,158 - 4,3923 13 Furniture and equipment 5,457,945 2,806,736 (1,949,110) 6,315,571
Construction in progress 8,681,358 16,497,814 (4,801.1 17) 20,378,055
Total $73,956,711 24,438,569 (6,750,227) 91 -645.053
68
-
c
-
?-- (6) Genera
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
Fixed Assets, (Continued)
- Construction in progress in the general fixed assets account group is composed of the
I--
-- following:
Expended Project Balance at Authorization June 30, 1999 Committed
ADA Projects Library - South Carlsbad Library Remodel - Cole Library
Poinsettia Park Public Art - Maxton Brown Park Public Art - South Carlsbad Library Public Service Center Skateboard Park Faraday Building Leo Carrillo Park (Phase I) Library - South Carlsbad Library Shelving Northwest Quadrant Parks Safety Center Building Improvements Safety Center Conference Center Improvements
Totals
$ 450,000 18,418,841 632,862 5,471,434 25,000 170,000 4,168,000 5 15,066 2,101,900 950,000 650,000 50,000 50,000
165,000
$33.8 18,103
273,634 1 3,2 14,465 2 15,636 5,05 5,487 5,123 147,957 8 1,793 473,602 136,360 266,874 480,3 18 17,405 7,40 1
2,000
20,378,055
176,366 5,204,376 4 17,226 4 15,947 19,877 22,043 4,086,207 4 1,464
1,965,540 683,126 169,682 32,595 42,599
163,000
13,440,048
69
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
17) Fixed Assets - Proprietary Funds
A summary of proprietary fund type fixed assets at June 30, 1999 is as follows:
Enterprise Internal Service
Land, water rights, rights-of-way Buildings and improvements Wells, reservoirs and dams Transmission and distribution lines Sewer, sewer lines and wells Sewage treatment facility Equipment and vehicles Construction in progress
Less accumulated depreciation
$ 7,358,347 - 7,246,703 - 27,701,646 - 42,046,145 - 30,488,253 - 33,580,434 1,760,394 10,827,284 5,866,508 -
156,048,430 10,827,284
33.79 1,135 5,733,988
Fixed assets, net $122.257.295 5,093,296
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, 1999.
The Enterprise funds had various construction contracts in progress at June 30, 1999 with
an estimated cost to complete of approximately $29,225,000.
(8, Obligations Under Capital Leases
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 system is designed to replace existing conventional radio frequencies with a trunked 800 Mhz system to develop communications capabilities to cope with potential disaster and improve enter and intra-agency communications in the future. The total estimated cost for Carlsbad’s participation in this system is $5,400,000 and can be
divided into two main components: the backbone and the equipment. The cost for Carlsbad’s share of the backbone of the RCS was $1,586,650. The balance of the backbone lease was paid off in fiscal year 1998-99. The equipment purchases for use by Carlsbad’s safety and service departments are covered under the lease purchase agreements with Motorola as further discussed below.
I.
70
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(8) Obligations Under Capital Leases, (Continued)
On November 15, 1996, the City entered into an Equipment Lease-Purchase Agreement with Motorola, Inc. for the purchase of equipment and services necessary for the City’s participation in the San Diego County RCS.
The maximum amount of credit extended to the City under the terms of the agreement is $3,235,478, with an option to increase the total by 10%. As of June 30, 1999, the City has purchased equipment and services under the agreement totaling $1,855,7 14. The payment terms are for 15 years at an interest rate of 6.91% per year. A portion of the equipment lease was paid off in 1998-99, leaving an unpaid principal amount as of June 30,1999 of $632,947.
Minimum future lease payments under the capital lease as of June 30, 1999 are:
Equbment Lease
2000 200 1 2002 2003 2004 Subsequent to 2004
$ 79,265 79,265 79,265 79,265 79,265 5 54,85 7
Total minimum future lease payments 951,182
Less amounts representing stated or implicit interest (3 18,235)
Present value of future lease payments $632,947
71
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(9) Obligations Under ODerating 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 the operating lease as of June 30, 1999 are:
2000 200 1 2002 2003 2004 Subsequent to 2004
$ 62,250 65,985 69,944 74,140 78,589 364,425
Total minimum fbture rental payments $71 5.333
In October, 1998, the City entered into an agreement to lease a 68,000 square foot office building. The building is currently under construction and will be used to house the community development, administrative and some public works staff when completed. The lease requires monthly rental payments of $74,816 for ten years commencing fourteen days after the certificate of occupancy has been issued. It is expected that this will occur in the fall of 1999. The term of the lease can be extended, at the City’s option, for two additional five-year periods at a lease rate to be agreed upon by the parties. The lease also provides for an option to purchase the building between the twelfth and twenty- fourth month of the lease at a price of $9,100,000.
Minimum fhture rental payments under the operating lease as of June 30, 1999 are:
2000 200 1 2002 2003 2004 Subsequent to 2004
$ 523,715 897,798 897,798 897,798 8 9 7,7 9 8 4,863.073
L
Total minimum future rental payments $8,977,980
I.
72
c
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
c (1 0) Long-Term Debt
The following is a summary of changes in the principal balance of long-term debt for the year ended June 30,1999:
Principal Principal Balance at Balance at July 1, 1998 Additions Reductions June 30, 1999
General long-term debt account group: Bonds $14,740,000 - 280,000 14,460,000 Certificates of participation 6,595,000 - 520,000 6,075,000 HUD Section 108 Loan 874,950 - 125,000 749,950
Advances to the Carlsbad Redevelopment Agency 10,392,318 588,763 24,92 1 10,956,160 Obligations under capital leases 2,399,110 - 1,766.163 632,947
Total general long-term debt $35,001,378 588,763 2,716,084 32,874,057
Enterprise funds: Certificates of participation $ 6,360,000 955,000 5,405,000 Installment purchase agreement 10,675,000 425,000 10,250,000 Loan payable 1,998,520 101,570 1,896,950 Accrued assessments 1,985,204 - 733,032 1,252,172
Total enterprise funds $21,018.724 - 2.2 14,602 18,804,122
Long-term debt at June 30, 1999 is comprised of the following issues:
General Long-Term Debt Balance at June 30.1999
1993 Carlsbad Housing and Redevelopment Commission Tax Allocation Bonds, principal due in amounts ranging from $290,000 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 $505,000 to $735,000 on August 1 of each year through 2009, interest payable on August 1 and February 1 at rates varying from 3.90% to 4.70% per annum. Payable from the General Fund, with a required reserve amount of $659,500.
$14,460,000
6,075,000
73
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
10) Long-Term Debt, (Continued)
Balance at June 30,1999
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 $130,000 to $170,000 on August 1 of each year through 2004. Interest payable on August 1 and February 1 at rates varying from 8.12% 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 fiom future tax increment revenues. 10,956,160
749,950
Obligations under capital leases (note 8) 632,947
Total General Long-Term Debt $32,874,057
Enterprise Fund Long-Term Debt
1997 Carlsbad Municipal Water District Refunding Certificates of
Participation, principal due in varying amounts ranging from $995,000 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 4.00% to 4.40% per annum. The required reserve amount is $740,000. $ 5,405,000
Encina Financing Joint Powers Authority (EFJPA) Installment Purchase Agreement, principal due in varying amounts ranging from $440,000 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 $942,67 1.
1993 Carlsbad Municipal Water District loan agreement with the State Water Resources Control Board. Principal is due in varying amounts ranging from $1043 15 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.
10,250,000
1,896,950
74
.-
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
[ 10) Long-Term Debt. (Continued)
Balance at June 30. 1999
In December of 1994, the Golf Course Enterprise Fund purchased land with accrued assessments. Principal is due in varying amounts ranging from $154,824 to $206,432 through 2006. 1,252,172
Subtotal enterprise funds 1 8,804,122
Less unamortized discounts, issuance costs and deferred charges (1,2 10,022)
Less current portion (1,694.339)
Total Enterprise Fund Long-Term Debt $15.899.761
Debt service requirements to maturity for general long-term debt (excluding Redevelopment Agency advances for which minimum annual debt service payments have
not been established) are as follows:
2000 200 1 2002 2003 2004 2005-2009 20 10-20 14 201 5-2019 2020-2024
Tax Allocation Bonds
$ 1,043,390
1,042,77 1
1,046,234
1,043,777 1,045,403 5,2 1 5,425 5,20 1,606 5,179,694 5,143,34 1
25,96 1,64 1
Less amounts representing interest (1 1,501,641)
Total general long-term debt $14,460.000
Certificates of Particisation
758,803 748,655 752,285 754,350 754,800 3,759,077 - - -
7,527,970
(1,452.970)
6,075,000
75
HUD Section 108 Loan
186,261 185,278 183,408 180,65 1 176,980 - - - -
912,578
(1 62,628)
749,950
Totals
1,988,454 1,976,704 1,98 1,927
1,978,778 1,977,183
8,974,502
$20 1,606 5,179,694 5,143,341
34,402,189
(1 3,117,239)
2 1,284,950
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(10) Long-Term Debt, (Continued) -
Debt service requirements to maturity for the enterprise funds are as follows:
Water District Installment Municipal Golf Course Certificates of Purchase Water District Accrued Participation Agreement Loan Payable Assessments Totals
- Carlsbad Municipal Encina Carlsbad
__
2000
200 1
2002
2003
2004
2005-2009 201 0-2014 201 5-201 6
$1,222,450 940,37 1 159,527 214,12 1 1,227,650 942,026 159,527 2 14,099 1,220,o 10 942,161 159,527 2 13,617 1,219,860 936,199 159,527 215,377 1,226,700 93 6,25 6 159,527 215,163 - 4,682,594 797,635 433,955 - 4,656,783 764,007 - - 928,190 - -
2,536,469 2,543,3 02 -.
2,535,3 15
2,530,963
2,537,646 -. 5,9 14,184 5,420,790
928.190 -
6,116,670 14,964,580 2,359,277 1,506,332 24,946,859
Less amounts - representing interest (71 1.670) (4,714,580) (462,327) (254,160) (6,142,737)
- Total enterprise fund debt $5,405,000 10,250,000 1,896,950 1.252,172 18,804,122
-.
J11) 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.
The 1997 Encina Financing Joint Powers Authority Wastewater Revenue Bonds require
that District set its charges for services each year at rates sufficient to produce net
depreciation) of at least 1.25 times debt service for that year.
-
revenues (after paying the operating and maintenance expenses of the District, excluding -
76
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1 2) Prior Year Defeasance of Debt
In prior years, the City of Carlsbad and its component units advance refunded certain debt issues. The proceeds of the refunding issues were irrevocably placed into a trust and used to purchase noncallable government securities that have interest payment dates and maturities that coincide with the cash flow requirements to fund the scheduled debt service payments on the refunded bonds and to redeem the refunded bonds in their entirety on the first available call date. As a result, both the assets held in this trust and the liability for the refunded bonds have been excluded from the accompanying financial statements. As of June 30, 1999, the outstanding balances of these defeased issues were as follows:
Debt Issue
1989 Wastewater Revenue Bonds
Balance Outstanding
$28,430,000
(1 3) Special Assessment Bonds Without Government Commitment
As of June 30, 1999, the City has seven series of Assessment District Bonds outstanding
in the amount of $48,534,129. These bonds were issued under the provisions of the Improvement Bond Acts of 191 1 and 1915 and were used to finance public infrastructure
improvement projects.
For the bond issuances noted above, the City is not obligated in any manner for the
payment of debt service in the event of default by the property owners but is only acting
as agent for the property owners in collecting the assessments, forwarding the collections
to bondholders, and initiating foreclosure proceedings, if appropriate. Accordingly, no liability for these bond issuances has been recorded in the General Long-Term Debt
Account Group and all debt service transactions have been recorded in an Agency fund.
c (1 4) Mortgage Revenue Bonds
Multi-Family Housing Revenue Bonds are issued to provide construction and permanent financing to developers of multi-family residential rental projects located in the City to be partially occupied by persons of low or moderate income. The total mortgage revenue bonds outstanding as of June 30, 1999 is $37,360,000. The bonds, together with interest thereon, are limited obligations of the City payable solely from bond proceeds, revenues and other amounts derived solely from home mortgage and developer loans secured by first deed of trust, irrevocable letters of credit, and irrevocable surety bonds. In the opinion of City officials, these bonds are not payable from any revenues or assets of the City, and neither the full faith and credit nor the taxing power of the City of Carlsbad, the State of California, nor any political subdivision thereof, is obligated to the payment of the principal or interest on the bonds. Accordingly, no liability has been recorded in the General Long-Term Debt Account Group.
77
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1 5) Industrial Development Bonds
The Industrial Development Authority (Authority) of the City has issued $3,172,500 in Industrial Development Revenue Bonds. Any costs relating to the issuance of the Bonds, as well as the principal and interest payments, are to be paid by the private party benefiting from the Bond issue.
(1 6) Fund BalancedRetained Earnings
The following is a summary of reserved and unreserved fund balances and retained earnings as of June 30,1999:
Governmental Fund Twes Special Debt Capital Fund Balances General Revenue Service Projects
Reserved for: Loans receivable
Inventory Prepaid expenditures
Debt service Advances to other funds * Low and moderate income housing Habitat mitigation Encumbrances
Subtotal
$ 175,069 24,326 12,753
10,397,676
-
-
725,423 1,557,633
5,467,884
206,3 13
2,000,000 4,401,538
467,693
-
-
-
12,892.880 12,543,428
- -
207,466 1,528,500 - - -
- - - 16.659,O I2
1.528,500 16,866,478
Unreserved: Designated for future debt service - - 29 1,266 Designated for approved capital projects - 105,192 - 62,3 12,155
appropriations 2,354,610 2,067,218 - 39,117,596 Designated for continuing
Designated for sales tax payment 6 1,927 - - Designated for affordable housing 502,949 - Undesignated 36,301.1 3 1 16,466,376 608.202
Subtotal 39,220,617 18,638,786 291,266 102,037,953
Total fund balances $52,113,497 31,182,214 1,819,766 118,904,431
* Only reflects that portion of fhd balance invested in interfund advances (net of
deferred revenue in the amount of $6,845,684 for measurable but unavailable interest earned on such advances).
78
I
I.
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
( 16) Fund BalancedRetained Earnings, (Continued)
Retained Earnings
Reserved for: Debt service Unreserved
Total retained earnings
Proprietary Fund Types Internal Enterprise Service
$ 1,682,671 - 6 1,767,840 7,814,391
$63.450.5 11 7,s 14,39 1
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 habitat mitigation represent resources set aside as security for the construction of wetland habitat to ensure the mitigation of certain species required as part
of the Cannon Road West project.
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.
( 17) Accumulated Fund Deficits
The following funds reported deficits in fund balances or retained earnings as of June 30,
1999:
Enterprise Funds: Golf Course
Deficit Balance
$(973,817)
Internal Service Funds: Health Insurance (27,396)
79
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1 8) Changes in Contributed Capital
Contributed capital at June 30, 1998 Additions: Cash - connection fees Cash - from other funds Fixed assets
Fixed assets Reductions:
Contributed capital at June 30, 1999
Internal -
Enterprise Service
$1 09,173,913 7,406,361
10,169,619 -
-
1,680,000 10,500
1,695,036 160,695 -
(167,57 1) -
$122,550,997 7,577,556 -
(1 9) Residual Equity Transfers -
Residual equity transfers are nonrecurring or nonroutine transfers of equity between funds. A summary of significant residual equity transfers at June 30, 1999 is as follows:
Caui t a1 Pro-i ects - General
Contributed capital to the enterprise
Equity from closed capital project fund transferred to the General fund 39,252 (3 9,2 5 2)
Golf Course fund for start-up costs $( 1,680,000) _. -
_.
(20) Claims and Judgments -
The City is exposed to various risks of loss related to its operations, including losses associated with errors and omissions and injuries to employees and members of the public. The City uses a Risk Management Self-Insurance fund, a Health Insurance fund and a Workers’ Compensation fund (all internal service funds) to account for and finance its uninsured risks of loss. All funds of the City make payments based on estimates of the amounts needed to pay prior and current year claims and to establish a reserve for catastrophe losses. The estimated claims payable reported at June 30. 1999 is based on the requirements of Governmental Accounting Standards Board Statement No. 1 0, which
requires that a liability for claims be reported if information prior to the issuance of the
-
-_
80
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(20) Claims and Judgments, (Continued)
financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.
Changes in the estimated claims payable amounts in fiscal years 1998 and 1999 for the
three internal service funds are as follows:
Claims Expense and
Beginning Changes in Claim Ending Balance Estimates Payments Balance
Health Insurance fund:
1997-98 1998-99
Risk Management fund:
1997-98 1998-99
Workers’ Comr>ensation fund:
1997-98 1998-99
(2 1 ) Insurance Coverage
$291,000 1,353,534 (1,312,534) 332,000 332,000 1,491,618 (1,481,262) 342,356
$258,8 19 248,784 (278,7 13) 228,890 228,890 86,132 (177,790) 137,232
$762,892 402,430 (468,022) 697,300 697,300 622,240 (485,795) 833,745
Effective July 1, 1999, the City became a participating member of the California Municipal Excess Liability Program, a group purchase program for general liability coverage. Under this program, the pool provides coverage up to a maximum of $10,000,000 per occurrence with a self-insured retention provided by the City in the amount of $500,000. At June 30, 1999, unencumbered fund equity for the Risk Management Self-Insurance fund was approximately $3,000,000. Over the past four years, PARSAC, the City’s previous liability pool, has contributed to the settlement of one claim in excess of the City’s self-insured retention in fiscal year 1995-96.
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 actual claims. Reliastar will assume payment for the excess amount.
81
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
J2 1) Insurance Coverage. (Continued)
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.
(22) 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, 1998, the Cities and Districts have the following approximate ownership interest:
City of Carlsbad City of Vista Leucadia County Water District Vallecitos Water District Buena Vista Sanitation District Encinitas Sanitary District
25% 24% 19% 19% 8% 5%
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. The latest available financial statements of the EWA, dated June 30, 1998, show the following:
Total assets Total liabilities $135,070,434 3.678.127
Fund balance $131,392.307
The EWA does not recognize net income or loss. Net operating expenditures in excess of users’ assessments are treated as accounts receivable on the EWA’s books and charged to users’ accounts in the following year. Conversely, users’ assessments in excess of net operating expenditures are treated as a liability and credited against users’ accounts, also in the following year. Under this basis, net operating expenditures for the EWA totaled
$1,770,272 in fiscal year 1998. The financial statements of the EWA can be obtained at
6200 Avenida Encinas, Carlsbad, California 92009.
82
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(22) Joint Ventures. (Continued)
Encina Financing Joint Powers Authority:
The Encina Financing Joint Powers Authority (the Authority) was created on February 1, 1989 between the City of Carlsbad (Carlsbad), the City of Vista (Vista), the Buena Vista Sanitation District (Buena) and the Leucadia County Water District (Leucadia). The primary purpose of the Authority is to issue revenue bonds in order to finance the expansion of the Facility.
The Authority is governed by a Board of Directors, which consists of one director appointed by each member. The financial statements of the Authority can be obtained at
the City of Carlsbad’s City Hall.
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, 1999 by each member and their approximate share in the additional capacity generated by the expansion.
Member Installment Approximate Agreement Balance Share
City of Carlsbad $10,250,000 3 8% Leucadia County Water District 6,995,000 24%
City of Vista - 18% Buena Vista Sanitation District - 20%
$17,245,000 100%
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.
83
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(22) Joint Ventures, (Continued)
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.
(23) 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.
(24) Retirement Plan
Plan Description
The City of Carlsbad contributes to the California Public Employees Retirement System (PERS), an agent multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statutes and city ordinance. Copies of PERS’ annual financial report may be obtained from their executive office: 400 P Street, Sacramento, California 95814.
Funding Policy
Participants are required to contribute 7% (9% for safety employees) of their annual covered salary. The City makes the contributions required of City employees on their behalf and for their account. The amount paid by the City on behalf of employees for the year ended June 30, 1999 was $1,973,190. The City is required to contribute at an actuarially determined rate. For the year ended June 30, 1999, the employer contribution rate for the City of Carlsbad (as a percentage of covered payroll) was 9.318% for safety employees and 8.185% for miscellaneous employees. The contribution requirements of plan members and the City are established by PERS.
84
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(24) Retirement Plan. (Continued)
Annual Pension Cost
For 1999, the City’s annual pension cost (employer contribution) of $774,465 for safety and $1,510,047 for miscellaneous to PERS was equal to the City’s required and actual contributions. For 1999, the member contributions paid by the City were $851,610 for safety and $1,12 1,580 for miscellaneous. The required contribution was determined as part of the June 30, 1996, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 8.5% investment rate of return (net of administrative expenses), (b) projected annual salary increases that vary by duration of service, and (c) 2% per year cost-of-living adjustments. Both (a) and (b) included an inflation component of 4.5%. The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a four-year period (smoothed market value). PERS unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period for miscellaneous employees at June 30, 1999 is through June 30, 2018, for safety employees at June 30, 1999, it is through June 30, 2018.
Three-Year Trend Information for PERS (Safety)
Annual Pension Fiscal Year Cost (Employer Percentage of Net Pension Ending Contribution) APC Contributed Obligation
613 0197 6130198 6130199
$734,983 827,859 85 1,610
100% 100% 100%
Three-Year Trend Information for PERS (Miscellaneous)
Annual Pension Fiscal Year Cost (Employer Percentage of Ending Contribution) APC Contributed
6130197 $1,079,342 6130198 1,097,506 613 0199 1,121,580
100% 100% 100%
$0 0 0
Net Pension Obligation
$0 0 0
85
-.
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(24) Retirement Plan, (Continued)
Required Sumlementary Information
Funded Status of Plan (Safety)
Entry Age
Normal Actuarial Unfunded Annual UAAL
Accrued Value Liability/ Covered As a % of
Valuation Date Liability of Assets (Excess Assets) Funded Status Payroll Pa~rolI
(330195 $38,019,470 39,022,824 (1,003,354) 102.6% 7,676,175 (13.071%)
6/30/96 43,249,17 1 44,92 1,453 (1,672,282) 103.9% 8,004,014 (20.893%)
6/30/97 45,646,733 53,055,298 (7,408,565) 116.2% 8,438,265 (87.797%) -
Funded Status of Plan (Miscellaneous)
Entry Age -
Normal Actuarial Unfunded Annual UAAL
Accrued Value Liability/ Covered As a % of
- Valuation Date Liability of Assets (Excess Assets) Funded Status Payroll Pavroll
6130195 $40,766,308 42,69 1,163 (1,924,855) 104.7% 15,124,966 (12.726%)
6130196 49,062,007 50,057,957 (995,950) 102.0% 14,139,219 (7.044%) 6/30/97 51,842,297 60,367,455 (8,525,158) 116.4% 14,995,218 (56.853%) -
(25) 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 participant’s “includable compensation,” as defined in the participation agreement. Distributions are made upon the occurrence of the participant’s termination, retirement, death or unforeseen emergency, and in a manner in accordance with the election made by the participant.
-
The City believes it has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. As of January 1, 1999, the City has formally established a trust in accordance with Internal Revenue Code Section 457(g) for all of its deferred compensation plans to provide protection from the claims of the employer’s general creditors. The deferred compensation assets placed in the trust have been removed from the balance sheet.
86
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(26) Post-Retirement Health Care
In addition to the pension benefits described herein, per Resolution 614, all former employees of the Carlsbad Municipal Water District (including dependents) are eligible for post-retirement health care benefits if they voluntarily retire after the age of 50 with no less than 5 years of service and whose age combined with years of service equals 70 or more. Currently, eleven retirees meet these eligibility requirements and are receiving benefits.
The City pays for 100% of the premiums for health insurance which is coordinated with Medicare and other benefits provided by federal and state law, when available, to the extent it reduces the cost of insurance premiums. Expenditures for post-retirement health care benefits are fimded on a pay-as-you-go basis. Expenditures of approximately $30,900 were charged to expense for post-retirement health care costs during 1998- 1999. Based on an actuarial valuation performed as of November 1991, the District’s liability for the current and past service costs of these benefits is approximately $1,600,000.
87
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
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, 1999 is as follows:
Carlsbad Municipal Water Golf Solid District Course Sewer Waste Totals
Operating revenues $ 17,343,452 116,916 6,090,817 591,118 24,142,303
Operating expenses: Depreciation 1,3 10,128 - 1,3 13,414 490 2,624,032
Plant operations 15.422.847 213.854 3,159,787 128,104 18,924,592
Operating income (loss) 610,477 (96,938) 1,617,616 462,524 2,593,679
Nonoperating activities: Property taxes 984,868 - - - 984,868
Other, net 1,174.613 182,527 1.203,578 91,985 2,652,703
Net income (loss) $ 2,769,958 85,589 2,821,194 554,509 6,231,250
Contributed capital: Beginning balance $ 54,176,701 5,185,190 49,808,601 3,421 109,173,913
Current year additions 5,419,786 1,680,000 6,444,869 - 13,544,655 Current year deletions 167,571 - - 167.571
Ending balance
Fixed assets: Additions
Net working capital
Long-term liabilities
Total assets Total liabilities
Total equity
$ 59,428.916 6.865.190 56,253,470 3.421 122,550.997
$ 2.670s 15 900.428 2,507,028 - 6,077.97 1
$ 34,999,591 2,791,735 42,759.281 2,34153 1 82,892,138
$ 5,901,406 3,834,547 10364,254 - 20,600,207
$103,778,057 9,897,176 98,944,506 2,368,622 214,988,361
1 1,448,049 4,005.803 13,507,626 25.375 28,986,853
$ 92,330,008 5,891,373 85,436,880 2,343,247 186.001,508
88
CITY OF CAFUSBAD
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.
89
90
CITY OF CARLSBAD
Required Supplementary Information
Year ended June 30, 1999
Risk Mitigation for the Year 2000 Issue
The City is in the process of evaluating its computer programs, computer equipment, and other equipment containing embedded chips to ascertain which of these might be impacted by a failure to properly recognize and process transactions dated on or after January 1, 2000. As of June 30, 1999, the unexpended portion of contracts entered into by the City with various vendors to modify, replace or upgrade its computer systems and electronic equipment to reduce the risk of year 2000 difficulties was approximately $221,563. These amounts include funds committed toward the upgrading of City computer systems that were planned for upgrading without respect to the year 2000 issue. Additional amounts may be expended for the City’s year 2000 assessment, remediation, and testing activities, as well as amounts that may need to be expended after January 1, 2000 to correct problems not previously detected and corrected by the City.
Because of the unprecedented nature of the year 2000 issue, it is not possible to provide
assurances that the City has or will achieve complete year 2000 compliance, even after
completing all planned year 2000 corrective actions and related testing. Nor can the City determine the effect, if any, on City operations should entities external to the City (other governments, significant vendors, suppliers, service providers, customers, taxpayers, businesses, etc.) fail to achieve year 2000 compliance in a timely manner. An audit is not designed to substantiate the assertions of management with respect to this issue or to evaluate the adequacy of management’s plans with respect to this issue. Generally, the City is in the assessment and remediation stage of its year 2000 corrective action plan.
91
92
Y
I
GENERAL FUND
The General find is used to account for resources traditionally associated with government
which are not required legally or by sound financial management to be accounted for in another
fund.
c
Major Service Areas
--
..a
93 c
CITY OF CARLSBAD
General Fund
Schedule of Revenues - Budget and Actual
Budgetary Basis
Year Ended June 30, 1999
Taxes:
Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Business license permits
Real property transfer taxes
Total taxes
Intergovernmental:
Vehicle licences
Homeowners exemptions
Other
Total intergovernmental
Licenses and permits:
Building permits
Other
Total licenses and permits
Charges for services:
Planning fees
Building department fees
Engineering fees
Ambulance fees
Recreation fees
Other
Total charges for services
Fines and forfeitures
Budget
Actual on
Budgetary
Basis
$ 14,181,000
16,500,000
6,900,000
1,873,000
1,700,000
720,000
14,196,095
17,129,474
7,O 10,249
1,954,185
1,737,850
1,080,646
41.874.000 43.108.499
3,124,000
476,000 -
3,264,818
25 1,204
364,889
3,600,000
2,200,000
1,230,000
3,880,911
2,524,063
1,302,623
3.430.000 3,826,686
900,000
1,650,000
1,756,000
800,000
1,046,000
603,000
853,255
1,656,345
1,700,756
858,112
1,034,345
483.625
6,755,000 6,586,438
Variance-
Over
(Under)
15,095
629,474
1 10,249
81,185
37,850
360,646
1,234,499
140,818
(224,796)
364,889
280.9 1 1
324,063
72,623
396,686
(46,745)
6,345
(55,244)
58,112
(1 1,655)
(1 19,375)
(168,562)
800,000 804,258 4,258
Income from property and investments 2,250,000
Interdepartmental charges 1,650,000
Miscellaneous 1,500,000
1,992,453
1.933.820
1.190,009
(2 5 7,5 47)
283,820
(309,991)
Total revenues $ 61,859,000 63,3 23,074 1.464.074
94
CITY OF CARLSBAD
General Fund
Schedule of Expenditures - Budget and Actual
BudgetaF Basis
Year Ended June 30. 1999
General government:
Policy and leadership group:
City council
City manager
City clerk
City attorney
City treasurer
Total policy and leadership group
Administrative services:
Finance
Purchasing
Human resources
Records management
Total administrative services
Total general government
Non-departmental
Public safety:
Police protection
Fire protection
Total public safety
Community development:
Administration
Hiring center
Geographic information systems
Economic development
Community promotion
Planning
Building inspection
Total community development
Community services:
Library
Cultural arts
Park planninghecreation
Senior programs
Total community services
Public works:
Administration
Engineering
Park maintenance
Street and signal maintenance
Facilities maintenance
Traffic sign maintenance
Total public works
Total expenditures
Budget
$ 216.940
1,390,428
486,672
647,393
138,832
2.880.265
1,364,914
529,160
1,550.239
1.319.500
4.763.8 13
2.075.42 1
9.719.499
12,149,28 1
10.787.9 19
22.937.200
563.2 I4
80.070
267,538
148.297
489,180
2,516,898
5.805,770
3.523.150
396.75 1
3.029.300
355.915
1,740,573
7.305.116
720.954
4.858.454
2.443.637
2.391.363
1,7 14.2 13
402.006
~
12.530.627
X 58.298.212
Actual on
Budgetary
Basis
213.240
1,254:234
425J 12
647,393
107,018
2,647,697
1,289,7 19
491,812
1,240,865
1,3 19,500
4,34 1,896
386:710
7,376,303
1 1,742,407
10,O 16,036
21,758,443
51 1,936
76:891
183,446
120,189
489,180
2,332,561
1,73 2,448
5,446,65 1
3,4 1 1,479
396,191
3,029,219
28035 1
7,117,540
653.220
4,783,908
2:269: 172
2,094,847
1.492:992
374.542
1 1.668.68 1
53.367.6 18
Variance
Over
(Under)
(3 ~ 700)
(136,194)
(60: 860)
(3 1,814)
(23 23 68)
(75,195)
(3 7:3 48)
(309:374)
-
(42 1.9 17)
(1,688,711)
(2,343,196)
(406,874)
(77 1,883)
(1,178,757)
(5 1,278)
(3:179)
(84,092)
(28.108) -
(184.337)
(8,125)
(359,119)
(1 11.671)
(560)
(81)
(75.264)
(1 87.576)
(67.734)
(74.5 46)
(1 74.465)
(296.5 16)
(22 1.22 1)
(2 7.464)
(86 1.946)
(4.930.594)
95
Taxes:
Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Business license permits
Real property transfer taxes
Total taxes
CITY OF CARLSBAD
General Fund
Comparative Schedule of Revenues
Year Ended June 30, 1999
1998
Actual
$ 12,410,095
14,s 17,057
6,046,092
1,7 13,526
1,603,744
835,530
3 7.426.044
Intergovernmental:
Vehicle licences
Homeowners exemptions
Other
2,970,189
234,323
275.841
Total intergovernmental
Licenses and permits:
Building permits
Other
Total licenses and permits
Charges for services:
Planning fees Building department fees
Engineering fees
Ambulance fees
Recreation fees
Other
Total charges for services
Fines and forfeitures
3,480,353
2,094,523
1.208.600
3,303,123
1,148,396
1,393,860
2,327,574
747,425
962,332
540.630
7.120.217
444,597
Income from property and investments
Interdepartmental charges
1,s 16,943
1.919.341
Miscellaneous
Total revenues
484,184
$ 55,994,802
96
I999
Actual
14,196,095
17,129,474
7,010,249
1,954,185
1,737,850
1,080,646
43,108,499
3,264,s 18
25 1,204
364,889
3,880,911
2,524,063
1,302,623
3,826,686
853,255
1,656,345
1,700,756
858,112
1,034,345
483,625
6,5 86,43 8
804.258
1,992,453
1,933,820
1,190,009
63,323,074
Increase
(Decrease)
1,786,000
2,3 12,417
964,157
240,659
134,106
245,116
5,682,455
294,629
16,88 1
89.048
400,558
429,540
94,023
523,563
(295,141)
262,485
(626,818)
110,687
72,O 13
(57,005)
(533,779)
359.661
175,510
14.479
705,825
7,328,272
CITY OF CARLSBAD
General Fund
Comparative Schedule of Espenditures
Year Ended June 30, 1999
L,
-i
,'
--
General government:
Policy and leadership group:
City council
City manager
City clerk
City attorney
City treasurer
Total policy and leadership group
Administrative services:
Finance
Purchasing
Human resources
Total administrative services
Non-departmental
Total general government
Public safety:
Police protection
Fire protection
Total public safety
Community development:
Administration
Hiring center
Geographic information systems
Economic development
Community promotion
Planning
Building inspection
Total community development
Community services:
Library
Cultural arts
Park planninghecreation
Senior programs
Total community services
Public works:
Administration
Engineering
Park maintenance
Street and signal maintenance
Facilities maintenance
Traffic sign maintenance
Total public works
Total espenditures
1998 1999 Increase
Actual Actual (Decrease)
$ 187,979 21 1,820 23,841
829,595 1,2 18,243 388,648
295,9 18 389,430 933 12
604,OO 1 64 1,774 37,773
100.885 107.18 1 6.296
2.018.378 2.568.448 550.070
1,066,915 1,204,271 137,356
414,684 464,256 49,572
1 , 1 69,30 1 997,634 (171,667)
2,650,900 2,666,16 1 15,261
438,840 325,188 (1 13,652)
5,108,118 5,559,797 45 1,679
10,310,748 11,728,212 1,417,464
7,597,003 9,884,79 1 2,287,788
17,907,75 1 246 13,003 3,705,252
510,015 5 12,386 2,371
75,774 76,82 1 1,047
142,738 154,853 12,115
23,263 99,820 123,083
256,487 325,356 68,869
2,215,355 2,19 1,903 (2 3,45 2)
1,267,581 1.61 7.352 349.771
4,567,770 5.001.754 433.984
2,769,284 3,347,711 578,427
284,165 368,826 84,66 1
2,622,327 2,857,937 235,610
268,196 272.977 4.78 1
5,943,972 6.847.45 1 903.479
86,279 692,420 606,141
4,174,293 4,014,459 (159,834)
1,854,760 2,078,123 223,363
1,660,395 2,054,382 393,987
11303,571 1,404,510 100,939
474.797 3 19.262 (155.535)
9,554.095 10.563.156 1.009.06 1
$ 43,081,706 49,585,161 6,503:455
97
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 Promam
To account for transfers fiom the General fimd to support the civic arts program.
Communitv DeveloDment Block Grant
To account for federal block grants and commercial and residential loans for community
development.
Donations and Beauests
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.
Librarv Audio-visual Insurance
, To account for revenues and expenditures on rental of audio-visual materials.
-. .
98 c
SPECIAL REVENUE FUNDS (CONTINUED)
Low and Moderate Income Housing
To account for money administered by the Carlsbad Redevelopment Agency for designated low
and moderate income housing.
Police Asset Forfeiture
To account for money received under federal and state programs distributing property
confiscated from illegal activities.
Section 8 Housing Authority
To account for federal grants for low and moderate income rental assistance payments.
Senior Nutrition
To account for money received and expenditures for senior programs under the Older Americans
Act.
SDecial Benefit Districts
To account for revenues and expenditures from property tax assessments for street lighting,
landscaping and channel dredging.
State Grants
To account for State of California library, civic arts and law enforcement grants.
n
Public Safety u
community
m Public Works u n
community
Services
99
CITY OF CARLSBAD
Special Revenue Funds
Combining Balance Sheet
June 30, 1999
Calavera Community Affordable Heights Civic Arts Development Donations Housing Mitigation Program Block Grant and Beauests
Assets
Cash and investments
Receivables:
Loans
Taxes
Accrued interest
Accounts, net
Due from other governments
Advances to other funds
Prepaid expenditures
Total assets
Liabilities and Fund Balances
Liabilities:
Accrued liabilities
Due to other funds
Deposits payable
Due to other governments
Total liabilities
Fund balances:
Reserved for:
Loans receivable
Advances to other funds
Prepaid expenditures
Low and moderate income
Encumbrances
Designated for approved
Designated for continuing
Undesignated
housing
Unreserved:
capital projects
appropriations
Total fund balances
Total liabilities and fund
balances
$6,9 10,887 132,657 267,408 5,209 5,924,155
2,729,902 5,568
5,000
53,3 14
100
509 363 _-
$9,646,298 132,657 267,408 64,454 5,924,255 153,858
-
-
Federal , Grants
153,858
:_.i
-
i-
$ 49,362 40,099 7,409 10,868 ---
13,220 6,842
1.362
49,362 54,68 1 7,409 17,710
-.
2,729,902 5,568
509 363
h 4,401,538
32,594 15,550 96,512 11,893 33,489
- -.
105.192
42,288 102,659 --
2,432,393 132,657 146,666 (92,670) 5,862,665
9,596,936 132.657 267.408 9.773 5.916.846 136.148
$9,646,298 132,657 267,408 64,454 5,924,255 153,858 - *
-_ 100
Gas - Tax
5,168,669
2,000,000
L i bray Audio-Visual Insurance
7,163
Low and Moderate Police Section 8 Special Income Asset Housing Senior Benefit State Housing Forfeiture Authority Nutrition Districts Grants Totals
1,603,85 1 460,650 2,187 1 2,780,13 1 4 19,087 23,835,9 I3
2,732,414 5,467,884
8,9 15 10,553 19,468
84 84
9,378 247 1,900 16,625
75,394 43,490 1 72,198
2,000,000
509 204,932 206,3 13
7,168,669 7,163 4,345,773 460,650 291,891 43,738 2,792,584 419,087 31,718,485
64,202 7,163 4,115 28,623 16,s 18 109,730 39,424 377,s 13
62,500 26,920 109,482
47,6 14 47,6 14 - 1.362
64,202 7,163 4,115 138,737 43,738 109,730 39,424 536,27 1
2,732,414 5,467,884
509 204,932 206.3 13
2,000,000 2,000,000
4,40 1,538
226,587 I73 7,709 810 2,380 20,5 I8 19,478 467,693
105, I92
1,688,678 60,83 1 172,762 2,067,2 I8
3,189,202 (173) 1,608,735 392,l 10 (52,588) (2,380) 2,662,336 187,423 16,466,376
7,104,467 4,341,658 460,650 153,154 2,682,854 379,663 3 I, 182,2 14
7,168,669 7. I63 4,345,773 460,650 29 1,891 43,738 2,792,584 4 19.087 3 I ,7 18,485
101
CITY OF CARLSBAD
Special Revenue Funds
Combining Statement of Revenues. Expenditures and Changes in Fund Balances
Revenues:
Taxes
Intergovernmental
Charges for services
Fines and forfeitures
Income from property and
investments
Contributions from property
owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess(deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Total other financing
sources (uses)
Escess (deficiency) of
revenues and other
financing sources over
(under) expenditures
and other financing uses
Fund balances at beginning
of year
Residual equity transfers in
Residual equity transfers out
Fund balances at end of year
Year Ended June 30. 1999 c
Calavera Community
Affordable Heights Civic Arts Development Donations Federal -.
Housing Mitigation Program Block Grant and Beauests Grants
.- $ - 671,224 94.708 -
381,075 6,037 13:358 52_9 13 X8:325 3,352
2,665,438 - 3,196,577 - - 245;896
6,326 - - -
3,052,839 6,037 13,358 724,137 3,530,798 98:060
- - 84,105
- 60,197 103,462 5,061
153,029 - - 730,104
-
153,029 60,197 730,104 103,462 89,166
2,899.810 6,037 (46,839) (5,967) 3,427,336 8,894
- - 5.550 760,000 9,856 - - -
- 5.550 760.000 Y,X56
-
6,037 (46.839) (417) 4,187.336 18.750 2.899.810
. 6.697.126 126.620 3 14.247 10.190 1.729.510 I17.39X
$9.596.936 132.657 267.408 9,773 5.916.846 136.148
102
-
Low and
Library Moderate Police Section 8 Special
- Gas Audio-visual Income Asset Housing Senior Benefit State & Insurance Housing Forfeiture Authority Nutrition Districts Grants Totals
1,367,844 311,462 - 1,679,306 - 2,691,549 11 1:255 499.778 4,068.5 14 - 65,096 - - 65,096 - 13 1,697 - - 13 1,697
246,4 17 360 25,553 21,474 10:733 - 117,536 18,992 986,125
c
I-
c- - - - - - 1,535,390 7,397,405 - - - - 103,895 349:79 1 - - 178 - 39.329 300.966 - 346.799
1.6 14.26 1 65.456 337.193 153.171 2.741.611 215.150 1.953.892 518.770 15.024.733
- - - - - 3 14,748 - - 75,135 - 2,676,6 12 - - - 3,634,880
526,2 19 - - - 1,600,308 2,126,527
65,051 1 165,592
- - - - 242,4 10 693,927 - 67,647 215,150
--.
A
1,088,042 (2,191) 262,058 88,120 64,999 353,584 110,768 8:254,65 1
,- 7,000 - - - - - 782,406
(7,500) - (5,550) (9,856) (22,906)
/*
(500) - (5,550) (9,856) - 759,500
..b 1.087.542 (2.19 1) 256.508 78.264 64.999 - 353.584 110.768 9.014.15 1
..-- 6.0 16.925 2.191 4.085.150 382.386 88.155 - 2.329.270 268.895 22.168.063
7.104.467 4.341.658 460.650 153.154 2.682.854 379.663 3 1,182,2 14
103 I
CITY OF CARLSBAD
Special Revenue Funds
Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis)
Year Ended June 30, 1999
Calavera Heights Mitigation
Actual on Variance-
Budgetary a7er
Affordable Housing Trust
Actual on Variance-
BudgetaIy Over
Budget Basis (Under) Basis (Under) Budget
Revenues:
Taxes
Intergovernmental
Charges for services
Fines and forfeitures
Income from property and
Interdepartmental services
Contributions from property
owners
Donations
Miscellaneous
investments
$
3 75,000 381.075 6,075 6,037 6,037
2,972,100 2,665,438 (306,662)
6.326 6.326
Total revenues 6,037 6,037 3,347,100 3,052,839 (294,261)
Expenditures:
Current:
Public safety
Community development
Community services
Public works
26 1,46 1 185,219 (76,242)
Total expenditures 261,461 185,219 (76,242)
Excess (deficiency) of
revenues over (under)
expenditures $3,O85,63 9 6,037 6,037 2,867,620 (2 18,O 19)
104
Revenues:
Taxes Intergovernmental
Charges for services
Fines and forfeitures
Income from property and
Interdepartmental services
Contributions from property
owners
Donations
Miscellaneous
investments
Total revenues
Expenditures:
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Civic Arts Program Community Development Block Grant Actual on Variance- Actual on Variance-
Budgetary Over Budgetary Over
Budget Basis (Under) Budget Basis (Under)
- - - - - 722,620 67 1,224 (5 1,396) - - - -
7,744 13,358 5,614 52,9 13 52,9 13 - - - -
7,744 13,358 5,614 775,520 724,137 (51.383)
- - - 1,122,415 1,09 1,565 (3 0,8 5 0)
180,939 180,939 -
180,939 180,939 - 1,122,415 1.09 1,565 (3 0.85 0)
(173,195) (167,58 1) 5,614 (346,895) (367,428) (20,5 3 3)
(Continued)
105
CITY OF CARLSBAD
Special Revenue Funds
Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis)
Year Ended June 30, 1999
Revenues:
Taxes
Intergovernmental
Charges for services
Fines and forfeitures
Income from property and
Interdepartmental services
Contributions from property
owners
Donations
Miscellaneous
investments
Donations and Bequests Federal Grants
Actual on Variance- Actual on Variance-
Budgetary Over Budgetary Over
Budget Basis (Under) Budget Basis (Under)
$-
88,708 94,708 6,000
10,400 88,325 77,925 3,800 3,352 (448)
3,196,577 3,196,577
376,500 245,896 (1 30,604)
Total revenues 386,900 3,530,798 3,143,898 92;508 98,060 5,552
Expenditures :
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
espenditures
345,384 346,323 939
257,845 157,643 (100,202) 6,000 $06 1 (939)
257,845 157,643 (100,202) 351:384 35 1.384 -.
$ 129,055 3:373,155 3,244,100 (258:876) (253,324) 5?552
106
Revenues:
Taxes
Interg ovemmental
Charges for services
Fines and forfeitures
Income from property and
Interdepartmental services
Contributions from property
owners
Donations
Miscellaneous
investments
Total revenues
Expenditures :
current:
Public safety
Community development
Community services Public works
Total expenditures
Excess (deficiency) of
revenues over (under) expenditures
Gas Tax Library Audio-visual Insurance
Actual on Variance- Actual on Variance-
Budgetary Over Budgetary Over
Budget Basis (Under) Budget Basis (Under)
1,300,000 1,367,844 67,844 - - - - - - - - - - 65,000 65,096 96 - - - -
250,000 246,4 17 (3,583) 400 360 (40) - - - - -
1,550,000 1,614,26 1 64,26 1 65,400 65,456 56
- - - 70,297 67,820 (2,477)
2,446,038 2,446,038 - - - -
2.446.038 2.446.038 - 70.297 67.820 (2.477)
1, I, .> I
(896,038) (831,777) 64,26 1 (4,897) (2,364) 2,533
(Continued)
107
CITY OF CARLSBAD
Special Revenue Funds
Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis)
Year Ended June 30, 1999
Low and Moderate Income Housing Police Asset Forfeiture Actual on Variance- Actual on Variance-
Budgetary Over Budgetary Over
Budget Basis (Under) Budget Basis (Under)
Revenues :
Taxes
Int ergovemmental
Charges for services
Fines and forfeitures
Income from property and
Interdepartmental services
Contributions from property
owners
Donations
Miscellaneous
investments
$302,500 3 11,462 8,962 - - - - - - - - - - - - - 124,000 13 1,697 7,697
80,000 25,553 (54,447) 17,000 2 1,474 4,474 - - - - -
I
_.
-
178
-
(500)
-
178 500
Total revenues 382,500 337,193 (45,307) 141,500 153,171 11,671
Expenditures:
Current:
Public safety
Community development
Community services
Public works
--
. - - 153,017 133,591 (1 9,426)
144,892 75,135 (69,757) - -
-
-.
-. _.
Total expenditures 144,892 75,135 (69,757) 153,017 133,591 (1 9,426)
Excess (deficiency) of
revenues over (under) expenditures $ 237,608 262,058 24,450 (11,517) 19,580 3 1,097
1 OS
,---
I
c
Revenues:
Taxes
Intergovernmental
Charges for services
Fines and forfeitures
Income from property and
Interdepartmental services
Contributions from property
owners
Donations
Miscellaneous
investments
Total revenues
Expenditures :
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Section 8 Housing Senior Nutrition
Actual on Variance- Actual on Variance-
Budgetary Over Budgetary Over
Budget Basis (Under) Budget Basis (Under)
- - - -
2,6 12,164 2,69 1,549 79,385 101,137 11 1,255 10,118 - - - - -
- - - 94,358 103,895 9,537
50,000 39,329 (1 0,67 1) - - -
2,674,164 2,741,611 67,447 195,495 215,150 19,655
3,012,416 2,679,867 (332,549) - - - - 2 18,082 217,530 (552)
3,O 12,416 2,679,867 (332,549) 218.082 217.530 (552)
(33 8,252) 6 1,744 399,996 (22,587) (2,380) 20,207
c
L_
P
(Continued)
109
CITY OF CARLSBAD
Special Revenue Funds
Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis)
Year Ended June 30, 1999
Special Benefit Districts State Grants
Actual on Variance- Actual on Variance-
Budgetary Over Budgetary Over
Budget Basis (Under) Budget Basis (Under)
Revenues:
Taxes
Intergovernmental
Charges for services
Fines and forfeitures
Income from property
investments
and
Interdepartmental services
Contributions from property
owners
Donations
Miscellaneous
Total revenues
Expenditures:
current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
$ - - - - - - - 4 18,600 499,778 81,178
124,500 117,536 (6,964) 15,900 18,992 3,092 - 123,500 - (123,500) - - -
1,687,400 1,535,390 (152,010) - -
9,500 300.966 29 1.466 - - - - - -
1,944,900 1,953,892 8,992 434,500 5 18,770 84,270
- - 3 17,897 3 17,895 (2)
- - (17,956)
- - - - -
299,548 281,592
1,759,976 1,615,254 (144,722) - - -
1,759,976 1,615,254 (144,722) 617,445 599,487 (1 7,95 8) L
$ 184,924 33 8,63 8 153,714 (182,945) (80,717) 102,228
110
c
L
Totals
Actual on Variance-
Budgetary Over
Budget Basis (Under)
1:602,500 1,679,306 76,806
3,943,229 4,068,5 14 125,285
65,000 65,096 96
896,744 986,125 89,381
123,j 00 (123,500)
124,000 131,697 7,697
4,659,500 7,397,405 2,737,905
470,858 349,79 1 (121,067)
1 12,900 346,799 233,899
11,998,23 1 15,024,733 3,026,502
8 16,298 797,809 (1 8,489)
434 1,184 4,03 1,786 (5 09,3 98)
1,032,711 91 0,585 (122J26)
4:206,0 14 4,06 1,292 (144,722)
10,596,207 9,801,472 (794,735)
rr- 1,402,024 5,223,26 1 3,82 1.237
(Concluded)
111
112
DEBT SERVICE FUNDS
Debt Service funds are used to account for accumulation of resources for, and payment of,
principal and interest on the City’s general bonded debt and special assessment bonds for which
the City is obligated in some manner.
Hos~ Grove COPS
To account for payment of debt service on the 1997 Certificates of Participation (1988
Refunding) issued to purchase Hosp Grove.
RedeveloDment Bonds
To account for payment of debt service on bonds issued to finance improvements for the
Carlsbad Redevelopment Agency.
Housing and
Redevelopment
Bonds
I
P
c
c 113
CITY OF CARLSBAD
Debt Service Funds
Combining Balance Sheet
June 30, 1999
Hosp Grove Redevelopment
COPS Bonds Totals
Assets
Cash and investments
Receivables:
Taxes
Accrued interest
Total assets
Fund Balances
Reserved for debt service
Unreserved:
Designated for future debt service
Total fund balances
$ 846,430 92 1,765 1,768,195
3 5,659 35,659
15.575 337 15.912
$ 862,005 957,76 1 1,s 19,766
$ 659,500 869,000 1,528,500
202,505 88,761 29 1,266
$ 862,005 957,761 1,s 19,766
-..
114
CITY OF CARLSBAD
Debt Service Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Year Ended June 30, 1999
Revenues:
Taxes
Income from property and
investments
Total revenues
Expenditures:
Current:
Debt service:
General government
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Proceeds of advances
Total other financing
sources (uses)
Excess (deficiency) of
revenues and other financing
sources over (under)
expenditures and other
financing uses
Fund balances at beginning of year
Fund balances at end of year
Hosp Grove Redevelopment
COPS Bonds Totals
$ 1,246,185 1,246,185
45,050 43,332 88,382
45,050 1,289,5 17 1,334,567
15,262 15,262
520,000 304,92 1 824,92 1
277,558 1,367,168 1,644,726
797,558 1,687,35 1 2,484,909
(752,508) (397,834) (1,150,342)
800,000 800,000 - (3 80,000) (380,000)
588,763 588,763
800,000 208,763 1,008,763
47,492 (1 89,07 I) (1 4 1,579)
8 14.5 1 3 1.146.832 1.96 1 -345
$ 862,005 957,76 I 1,s 19,766
115
Revenues:
Taxes
Income from property and
investments
Total revenues
CITY OF CARLSBAD
Debt Service Fund
Redevelopment Bonds
Expenditures:
Current:
Debt service:
General government
Principal retirement
Interest and fiscal charges
Schedule of Revenues and Expenditures -
Budget and Actual (Budgetary Basis)
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Year Ended June 30, 1999
Actual on Variance-
Budgetary Over
Budget Basis (Under) I
$ 1,200,000 1,246,185 46,185
75,000 43,332 (3 1,668)
1,275,000 1,289,5 1 7 14,517
26,000 15,262 (10,738)
302,000 304,92 1 2,92 1
1,380,763 1,367,168 (1 3,595)
1,708,763 1,687,35 1 (2 1,4 12)
$ (433,763) (3 97,834) 35,929
116
-. .
c
c
L
L 117
CAPITAL, PROJECTS FUNDS
Capital Projects funds are used to account for the purchase or construction of major capital
facilities which are not financed by 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 Countv 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 “special tax revenues” (Mello Roos).
Federal Grants
To account for capital projects financed by federal grants.
General CaDital Construction
To account for transfers from the General fund for various capital projects.
Palomar Aimort 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 DeveloDment
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 developers for drainage facilities necessitated by
growth.
118
c Public Facilities Construction
c
To account for receipts of fees charged to developers for specific public facilities such as
libraries and fire stations necessitated by growth.
Rancho Santa Fe Road Proiect
To account for amounts paid by developers for Rancho Santa Fe Road construction and
improvements .
RedeveloDment Agency
To account for financial resources segregated for the rehabilitation of commercial and public
property and capital projects in the Carlsbad Village area.
Sales Tax/TransNet
To account for receipts of County sales tax allocated by the San Diego County Regional
Transportation Commission to finance transportation projects.
State Grants
To account for capital projects financed by state grants.
Traffic ImDact Projects
To account for receipts of fees charged to developers for street construction and improvement.
119
CITY OF CARLSBAD
Capital Projects Funds
Combining Balance Sheet
June 30. 1999
Genera 1 Palomar Bridge and City and Community
Assessment Thoroughfare County Facilities Federal Capital Airport Road
Districts Districts Agencies District No. 1 Grants Construction East Project
Assets
Cash and investments
Receivables:
Taxes
Accounts, net
Accrued interest
Due from other governments
Prepaid expenditures
Total assets
-
$ 6,651,328 5,521,279 1,008,556 31,039,958 3,904,687 4 1,707
2,374 -.
69,223
I
63,526
200.725
$ 6,720,551 5,521,279 1,008,556 31,042,332 63,526 4,105,412 4 1,707
Liabilities and Fund Balances
Liabilities:
Accrued liabilities
Due to other funds
Advances from other funds
Deposits payable
Deferred revenue
Total liabilities
$ 6 10,783 1,934 1,342,112 7 1,397
56,688 _- 2,000,000
3 1,625
2.6 10.783 1.934 1.342.1 12 56.688 103.022
-
Fund balances:
Reserved for:
Prepaid expenditures
Encumbrances
Designated for continuing
appropriations
Designated for approved
capital projects
Undesignated
Unreserved:
Total fund balances
Total liabilities and
fund balances
200,725
26,308 1,547,846 260,783 8,683,124 19,925 955,563
5,938,571 1,362,650 105,873 10,323,248 2,224,8 13 4 1,707
755,672 639,966 10,693,848
(1 3,087) 62 1,289
-.
6,72035 1 2,910,496 1,006,622 29,700,220 6,838 4,002,390 4 1,707
$ 6,720,55 1 532 1,279 1,008,556 3 1,042,332 63,526 4,105,4 12 4 1,707--
120
Planned Rancho
Local Public Santa Fe Traffic
d.-- Park Drainage Facilities Road Redevelopment Sales Tax/ State Impact
Development Facilities Construction Project Agency TransNet Grants Projects Totals
-
7,218,295 6,013,269 30,236,104 16,542,626 2,493,486 12,206,020 401,538 4,5 18,016 127,796,869
c 2,374
487,520 95,571 583,091
28,657 97,880
c 15,881 79,407
6,74 1 207,466
7,2 18,295 6,500,789 30,236,104 16,542,626 2,624,455 12,206,020 417,419 4,518,016 128,767,087 _-
1,759 3,984 964,966 49,570 6 15,993 4,723 172,100 3,839,32 I - 56,688
2,550,000 1,000,000 5,550,000
9,323 9,323
293,874 3 1,625 29,800 20,400 407,324
2,55 1,759 297,858 996,59 1 88,693 615,993 4,723 1,192,500 9,862,656
-
6,74 1 207,466
I 8,376 179,974 1,568,714 558,856 28,179 2,544,371 48,148 228,845 16,659,O 12
24 1,524 8 1 1,784 4,468,632 1,8 17,561 1,818,13 1 6,579,978 286,453 3,096,67 1 39,117,596
I-
4,416,636 5,21 1,173 23,202,167 14,166,209 682,7 1 1 2,465,678 78,095 62,3 12,155
608.202 .-.-
4,666,536 6,202,93 1 29,239,5 13 16,542,626 2,535,762 11,590,027 412,696 3,325,516 118,904,431
c 7,218,295 6,500,789 30,236,104 16,542,626 2,624,455 12,206,020 4 17,4 19 4,5 18,O 16 128,767,087
121
CITY OF CARLSBAD
Capital Projects Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Year Ended June 30, 1999
.-
Palomar Bridge and City and Community General
Assessment Thoroughfare County Facilities Federal Capital Airport Road
Districts Districts Agencies District No. 1 Grants Construction East Project
Revenues:
Taxes
Intergovernmental
Charges for services
Income from property and
Contributions from property
Miscellaneous
investments
owners
Total revenues
Expenditures:
Current:
Capital outlay
General government
Total expenditures
Excess (deficiency)
of revenues over
(under) expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Total other financing
sources (uses)
- $ 10,934,034 539,778
662,6 I8 63,526
283,303 244,956 156,826 1,504,366 183,135 1,908 I .
17,095,007 995,595 1,237,526
4,246 5 94 505 -
17,382,556 1,241,145 819,444 13,675,926 63,526 723,4 I8 1,908
-
302,124 38,974 12 1,682 328,271
I 1,622,439 1,955,872 4,219,482 16,626,442 56,692 1,365,563 223 --
1 1,924,563 1,955,872 4,258,456 16,748,124 56,692 1,693,834 223
5,457,993 (714,727) (3,439,012) (3,072,198) 6,834 (970,416) 1,685
20,158 324,699 - (128,894)
20, I58 195,805 --
Excess (deficiency) of
revenues and other
financing sources over
(under) expenditures
and other financing uses 5,478,151 (714,727) (3,439,012) (3,072,198) 6,834 (774,61
Fund balances at beginning
of year 1,242,400 3,625,223 4,445,634 32,772,418 4 4,777,OO
Residual eauitv transfers out
1,685 _- )
40,022 -
.I
Fund balances at end of year $ 6,720.551 7,910,496 1.006,622 79,700,220 6,838 4,002,390 4 1.707
122 -
-. Planned Rancho
Local Public Santa Fe Traftic
Impact Park Drainage Facilities Road Redevelopment Sales Tax/ State - Development Facilities Construction Project Agency Tran sN et Grants Projects Totals
7 11,473,812
9 1,268 8,760,000 274,777 9,852,189
153,613 153.6 13
357,484 258,106 I, 194,344 873,104 1 15,038 492,340 17,869 175,826 5,8 5 8,605 r^
I ,O 17,747 697,025 8,588,307 6,9 16,959 l,8 17,733 38,365,899
322 624 1,208 7,499 L
1,375,553 955,131 9,782,65 1 7,881,33 1 269,275 9,252,340 292,646 1,994,767 65,7 1 1,6 17
L
418,196 219 1,209,466
4,349,462 38,09 1 2,339,380 4,219,466 10,733 3,452,629 193,926 1,656,187 52,106,587 c-
4,349,462 3 8,09 1 2,339,380 4,2 19,466 428,929 3,452,629 194,145 1,656,187 53,316,053
- (2,973,909) 9 17,040 7,443,271 3,661,865 (159,654) 5,799,71 I 98,501 338,580 12,395,564
19,900 380,000 88,641 128,894 51,221 1 ,o 13.5 13
(246,6 19) (3753 13)
19,900 380,000 88,64 I (1 17,725) 51,221 638,000 I
(2,973,909) 9 17,040 7,463.17 1 3,66 1,865 220,346 5,888,352 (19,224) 389,801 13,033,564
7,640,445 5,285,891 2 1,776,342 12,880,761 2,3 15,416 5,701,675 471,335 2,935,715 105,910,282 -
(39,4 15) (39,4 15)
- 4,666,536 6,202,931 29,239,513 16,542,626 2,535,762 I l,590,027 412,696 3,325,5 I6 1 18,904,431
123 -
124
ENTERPRISE FUNDS
Enterprise funds are used to account for operations that are financed and operated in a manner
similar to private business enterprises - where the intent of the governing body is that the costs of
providing goods or services to the general public be financed or recovered primarily through user
charges.
Carlsbad MuniciDal Water District
To account for the operation, maintenance, planning, capital facility financing, and all customer
service functions of the Carlsbad water system.
Golf Course
To account for revenues, expenses, and the construction activities of the City's proposed
municipal golf course.
Sewer
To account for the operation, maintenance, and capital facility financing of the City's sewer
system.
Solid Waste
To account for revenues and expenses of the City's solid waste source-reduction and recycling
programs.
Solid Waste v
125
CITY OF CARLSBAD
Enterprise Funds
Combining Balance Sheet
June 30, 1999
Assets:
Current assets:
Cash and investments
Receivables :
Taxes
Accounts, net Due from other funds
Due from other governments
Inventory
Total current assets
Restricted assets: Cash and investments Accrued interest
Total restricted assets
Fixed assets Less accumulated depreciation
Fixed assets, net
Total assets
Liabilities and Fund Eauitv
Current liabilities:
Accrued liabilities
Due to other funds Due to other governments Estimated claims payable Current portion of long-tern debt Deposits payable
Total current liabilities
Current liabilities payable from restricted assets - accrued interest payable
Advances from other funds
Deferred revenue
Loan payable
Certificates of participation, net of unamortized issuance costs and
deferred charges of $30 1,029 Installment purchase agreement, net of unamortized issuance costs and
deferred charges of $908,992
Total liabilities
Accrued assessments
Fund equity: Contributed capital Retained earnings: Reserved for debt service Unreserved
Total retained earnings
Total fund equity
Total liabilities and fund equity
Carlsbad
Municipal Golf Solid
Water District Course Sewer Waste Totals
$ 36,839,690 2,946,613 45,022,236 2,291,282 87,099,821
10,904 41,842 52,746
3,335,613 33,782 3,369,395 161,665 16 1,665 58,214 58,214
231,817 6,597 238,414
40,476,238 2,946,613 45,190,498 2,366,906 90,980,255
761,241 954,404 1,7 15,645
6,832 28,334 35,166
768,073 982,738 1,750,811
79,107,441 6,950,563 69,987,975 2,451 156,048,430
(16,573,695) (17,216,705) (735) (33,79 1,135)
62,533,746 6,950,563 52,771,270 1,716 122,257,295
$103,778,057 9,897,176 98,944,506 2,368,622 214,988,361
$ 2,893,612 54 502,839 25,375 3,421,880 161,665 161,665
922,153 922,153 32,000 32,000 1,099,5 15 154,824 440,000 1,694,339 367,702 1,488,378 1,856,080
5,476,647 154,878 2,431,217 25,375 8,088,117
69,996 16,378 212,155 298,529 2,737,200 2,737,200 1,963,246 1,963,246
1,792,435 1,792,435
4,108,97 1 4, 108,971
8,90 1,008 8,901,008
1,097,347 1,097,347
11,448,049 4,005,803 13,507,626 25,375 28,986,853
59,428,916 6,865,190 56,253,470 3,421 122,550,997
740,000 942,67 1 1,682,671 32,161,092 (973,817) 28.240.739 2,339,826 61,767,840
32,901,092 (973.817) 29,183,410 2,339,826 63,450,511
92,330,008 5,891,373 85,436,880 2,343,247 186,001,508
$ 103,778.057 9,897,176 98,944,506 2,368,622 2 14,988,361
126
CITY OF CARLSBAD
Enterprise Funds
L
.-
L
Combining Statement of Revenues, Expenses and Changes in Retained Earnings
Year Ended June 30, 1999
Operating revenues:
Water sales
Sewer services charges
Other charges for services
Contributions from other
government agencies
Miscellaneous
Total operating revenues
Operating expenses:
Plant operations
Purchased water
Depreciation
General and administrative
Total operating expenses
Operating income (loss)
Carlsbad
Municipal Golf
Water District Course Sewer Solid Waste Totals
$ 15,922,080 15,922,080
5,470,42 1 5,470,42 1
940,60 1 94,196 2 12,652 1,247,449
396,914 396,914
83,857 116.916 526.200 378.466 1.105.439
17,343,452 116,916 6,090,817 59 1,118 24,142,303
1,520,000 1,520,000
9,624,6 15 9,624,6 15
1,3 10,128 1,3 13,4 14 490 2,624,032
5,798,232 213,854 1,639,787 128,104 7,779,977
16,732,975 213,854 4,473,20 1 128,594 2 1,548,624
610.477 (96.938) 1.617.616 462.524 2.593.679
Nonoperating revenues (expenses):
Income from property and investments
Interest expense and fees
Gain (loss) on sale of property
Property taxes
Miscellaneous income (expense)
Amortization of issuance costs
1,6 13,092 182,527 1,806,5 12 91,985 3,694,116
(423,039) (602,934) (1,025,973)
(184) 984,868 984,868
814 814
(1 6,070) (16,070)
(1 84)
Total nonoperating revenues (expenses) 2,159,48 1 182,527 1,203,578 91,985 3,637,571
Net income (loss) 2,769,958 85,589 2,821,194 554,509 6,23 1,250
Retained earnings (deficit) at beginning
of year 30,131,134 (1,059,406) 26,362,216 1,785,317 57,219,261
Retained earnings (deficit) at end of year $ 32,901,092 (973,817) 29,183,410 2,339,826 63,450,511
127
CITY OF CARLSBAD
Enterprise Funds
Combining Statement of Cash Flows
Year Ended June 30. 1999
Carlsbad
Municipal
Water District Golf Course Sewer Solid Waste Totals
Cash flows from operating activities:
Operating income (loss) $ 610,477 (96,938) 1,617,616 462,524 2,593,679
Adjustments to reconcile operating income
(loss) to net cash provided by operating activities:
Depreciation and amortization 1,3 10,128 1,313,414 490 2,624,032
(Increase) decrease in receivables (97,3 19) 25,045 (72,274)
(Increase) decrease in due from other governments 36,296 36,296
(Increase) decrease in inventory
Increase (decrease) in accrued liabilities
Increase (decrease) in due to other governments
Increase (decrease) in deposits payable
Increase (decrease) in deferred revenue
Increase (decrease) in loans payable
Net cash provided by (used for) operating
activities
Cash flows from noncapital financing activities:
Cash received from other funds
Cash paid to other funds
Net cash provided by (used for) noncapital
financing activities
Cash flows from capital and related financing
activities:
Purchases of fixed assets
Principal payment on bonds
Interest and other fees paid
Property taxes received
Capital contributions received
Net cash provided by (used for)
capital and related financing activities
Cash flows from investing activities:
Interest on investments
Net cash provided by (used for)
investing activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(3,847) 608 (3,239)
354,182 (8,666) 348,547 19,372 7 13,435
918,519 918,519
30,746 328,507 (51) 359,202
(107,532) (107,532)
( 10 1,570) (101,570)
3,057,612 (105,604) 3,501,160 507,380 6,960,548
1,680,000 25,692 1,705,692
(25,692) (25,692)
(25,692) 1,680,000 25,692 1,680,000
(2,645,714) (900,428) (2,259,030) (5,805,172)
(955,000) (733,033) (425,000) (2,113,033)
(333,231) (528,3 40) (861,571)
984,868 - 984,868
5,399,243 5,044,569 10,4433 12
2,450,166 (1,633,461) 1,832,199 2,648,904
~~
1.6 13.092 182,527 1,806,670 91,985 3.694,274
1,613,092 182,527 1,806,670 91,985 3,694,274
7,095,178 123:462 7,165,721 599,365 14,983,726
29,765,753 2,823,15 1 37,857,213 1,691,917 72,138,034
$ 36,860,931 2,946,613 45,022,934 2,291,282 87,121,760
128
CITY OF CARLSBAD
Enterprise Funds
Combining Statement of Cash Flows
(Continued)
Reconciliation of cash and cash equivalents to amounts
reported on the balance sheet:
Cash and investments
Restricted assets:
Reported on the balance sheet:
Cash and investments
Less investments not meeting the definition of cash
equivalents:
Investment contracts
Carlsbad
Municipal
Water District Golf Course Sewer Solid Waste Totals
$36,839,690 2,946,613 45,022,236 2,291,282 87,099,821
761,241 954,404 1,715,645
(740,000) (953,706) - (1,693,706)
Cash and cash equivalents at end of year $36,860,93 1 2,946,613 45,022,934 2,291,282 87,121,760
Supplemental schedule of noncash investing,
capital and financing activities:
Capital assets contributed by (to) other funds $ (167,571) 1,400,300 1,232,729
129
130
-_
-.
INTERNAL SERVICE FUNDS
Internal Service funds are used to account for the financing of goods or services provided by one
department or agency of a government to other departments or agencies on a cost reimbursement
basis.
Fleet Management
To account for charges to other finds to provide fleet maintenance and accumulate funds for fleet
replacement.
Health Insurance
To account for charges to other funds and from employees to provide health insurance for full-
time City employees.
Information Systems
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’ Commnsation
To account for charges to other funds to insure against Workers’ Compensation claims.
c
c 131
CITY OF CARLSBAD
Internal Service Funds
Combining Balance Sheet
June 30, 1999
Fleet Health Information Risk Workers'
Management Insurance Systems Management Compensation Totals
Assets
Current assets:
Cash and investments
Receivables:
Inventory
Accounts, net
Total current assets
Fixed assets:
Equipment and vehicles
Less accumulated
depreciation
Fixed assets, net
Total assets
$5,117,926 3 19,487 1,364,502 3,260,257 2,068,205 12,130,377 - 24,930 9,093 200 34,223
100,495 100,495
5,243,351 328,580 1,364,702 3,260,257 2,068,205 12,265,095 --
8,497,972 2,329,3 12 10,827,284 -
(4.3 03 SO51 (1.430.483) (5.733.9881
5.093.296 - 4,194.467 898,829
$9,437,818 328,580 2,263,531 3,260,257 2,068,205 17,358,391
Liabilities and Fund Equity
Current liabilities:
Accounts payable Accrued wages payable
Accrued vacation payable
Estimated claims payable
Total current liabilities
Fund equity:
Contributed capital
Retained earnings:
Unreserved
Total fund equity
Total liabilities and fund equity
$ 258,129 13,620 159,772 36,620 5,3 12 473,453 -.
44,150 44,007 10,87 1 7,204 106,232
17,256 37,681 18,489 73,426
342,356 137,232 833,745 1,313,333
319,535 355,976 24 1,460 203,212 846,26 1 1,966,444
-
3,333,739 1,579,278 1,911,939 752,600 7,577,556
5,784,544 (27,396) 442,793 1,145,106 469,344 7,814,391 -
9,118,283 (27,396) 2,022,071 3,057,045 1,22 1,944 1 5,39 1,947
-.
$9,437,818 328,580 2,26333 1 3,260,257 2,068,205 17,358,391
132
CITY OF CARLSBAD
Internal Service Funds
Combining Statement of Revenues, Expenses and Changes in Retained Earnings
Year Ended June 30, 1999
Fleet Health Information Risk Workers'
Management Insurance Systems Management Compensation Totals
Operating revenues:
Other charges for services
Miscellaneous
Total operating revenues
Operating expenses:
Depreciation
Fuel and supplies
Claims expense
General and administrative
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Income from property and investments
Gain (loss) on sale of property
Total nonoperating revenues
(expenses)
Net income (loss)
Retained earnings (deficit) at beginning
of year
Retained earnings (deficit) at end of year
$2,752,815 2,177,376 1,564,400 69 1,327 504,l 12 7,690,030
1,379 604,28 1 2,106 9,765 33,493 65 1,024
2,754,194 2,781,657 1,566,506 70 1,092 537,605 8,341,054
823,054 341,815 1,164,869
443,188 7,476 450,664
2,635,961 503,517 694,597 3,834,075
1.034.968 1.303.601 166.128 60.289 2.564.986
2,301,210 2,635,961 1,652,892 669,645 754,886 8,014,594
452.984 145.696 (86.386) 3 1.447 (2 17.28 1) 326.460
2 17,993 7,779 52,301 147,909 99,777 525,759
1 19.20 1 119.201
147,909 99.777 644,960 337.194 7.779 52.30 1
790,178 153,475 (34,085) 179,356 ( 1 1 7,504) 97 1,420
4,994,366 (1 80,87 1) 476,878 965,750 586,848 6,842,971
$5,784,544 (27,396) 442,793 1,145,106 469,344 7,814,391
133
CITY OF CARLSBAD Internal Senice Funds
Combining Statement of Cash Flows
Year Ended June 30. 1999
Health Information Risk Workers' Fleet Management Insurance Systems Management Compensation Totals --
Cash flows from operating activities: (217.281) 326.460 Operating income (loss) $ 452,984 145.696 (86,3 86) 31.447
Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation and amortization 823,054 341,815 1,164369 -.- (Increase) decrease in receivables (19,709) (7.863) (200) (27,772) (Increase) decrease in inventory (15,66 1) (15,661)
(Increase) decrease in prepaid expenses 33,144 166,53 1 199.675
Increase (decrease) in estimated claims payable 10,356 (9 1 $5 8) 136,445 55,143
operating activities 1,43 3,954 179,883 414,346 157,842 (92,142) 2,093,883
(11.306) 391.169 __ Increase (decrease) in accrued liabilities 193,286 (1,450) 159,117 5 1.522
Net cash provided by (used for) -
- Cash flows from capital and related
financing activities: Purchases of fixed assets (944,692) (139,282) (1,083.974)
Cash flows from investing activities: Interest on investments 217,993 7,779 52,301 147.909 99.777 525,759 -'
Net increase (decrease) in cash and cash
.- . 707.255 187.662 327.365 305.75 1 7,635 1,535,668 equivalents
Cash and cash equivalents at beginning 4,410,671 131,825 1,037,137 2,954,506 2,060,570 10.594.709 of year
Cash and cash equivalents at end of year - $ 5,117,926 319.487 1,364,502 3,260.257 2,068,205 12,130,377
Supplemental schedule of noncash investing, cmital and financing activities: dapital assets conthbuted by (to) other funds $ 138,738 32.457 171.195
--
134
135
136
AGENCY FUNDS
Agency funds are used to account for assets held by a government for other funds, governments
or individuals.
Contractors’ and Miscellaneous Deposits
To account for money deposited by contractors for designated future development and other
miscellaneous deposits.
c
Assessment Districts
To account for the debt service transaction on assessment district bonds for which the City is not
obligated.
i Deposits u Assessment
137
CITY OF CARLSBAD
Agency Funds
Combining Statement of Changes in Assets and Liabilities
Year Ended June 30, 1999
Balance at Balance at
June 30. 1998 Additions Reductions June 30. 1999
Deferred ComDensation:
Assets: Deferred compensation investments
Liabilities: Deferred compensation payable
Contractors' and Miscellaneous Deuosits:
Assets:
Cash and investments
Accounts receivable
Total assets
Liabilities:
Accrued interest payable
Deposits payable
Total liabilities
Assessment Districts:
Assets:
Cash and investments
Taxes receivable
Accrued interest
Total assets
Liabilities:
Due to bondholders
Totals - All Agency Funds:
Cash and investments
Deferred compensation investments
Accounts receivable
Taxes receivable
Accrued interest
Assets:
Total assets
Liabilities:
Accrued interest payable
Due to bondholders
Deposits payable Deferred compensation payable
Total liabilities
$ 3,600,462 (3,600,462)
$ 3,600,462 (3,600,462)
$ 7,672,362 16,072,629 (1 5,736,816) 8,008,175
10.821 (213) 10.608
$ 7,672,362 16,083,450 (15,737,029) 8,018,783
$ 1,321,104 378,400 (2 13,783) 1,48572 1
6,351,258 20,089,627 (19,907,823) 6,533,062
$ 7,672,362 20,468,027 (20,12 1,606) 8,018,783
$ 6,328,514 7,745,827 (4,2 10,297) 9,864,044
26,581 44,O 14 (26,58 1) 44,O 14
12,239 7,597 (12,239) 7,597
~~ ~~ ______~ ____~
$ 6,367,334 7,797,438 (4,249,117) 9,9 15,65 5
$ 6,367,334 7,847,274 (4,298,953) 9,915,655
$ 14,000,876 23,818,456 (19,947,113) 17,872,219
10,821 (213) 10,608
26,58 1 44,O 14 (26,581) 44,O 14
$ 17,640,158 23,880,888 (23,586,608) 17,934,438
3,600,462 (3,600,462)
12,239 7,597 ( 12,239) 7,597
$ 1,321,104 378,400 (2 13,783) I ,485,72 1
6,367,334 7,847,274 (4,298,953) 9,9 15,655
6,35 1,258 20,089,627 (19,907,823) 6,5 3 3,062
3,600,462 (3,600,462)
$ 17,640,158 28,315,301 (28,021,021) 17,934,438
138
139
140
GENERAL FIXED ASSETS ACCOUNT GROUP
General fixed assets are those fixed assets used in operations accounted for in governmental
funds. General fixed assets include all fixed assets not accounted for in an enterprise, internal
service, or trust and agency fund.
n
Improvements u
141
Land
CITY OF CARLSBAD
General Fixed Assets Account Group
Schedule of General Fixed Assets by Function
June 30, 1999
General
Government
$3,659,527
Buildings 3,O 19,46 1
Improvements 959,348
Furniture and equipment 568,180
Construction in progress 218.153
Totals $8,424.669
Culture and
Recreation
26,324,208
10,667,638
2,572,000
788,786
20,150,502
60,503.134
Public
Safety
2,150,407
13,996,6 10
5 19,456
3,384,902
9,400
20,060.775
Public
Works Totals
740,763 32,874,905
27,683,709
342,009 4,392,8 13
1,573,703 6,315,571
20,378.055
2,656,475 9 1 A45.053
142
General government
Culture and recreation
Public safety
Public works
Totals
CITY OF CARLSBAD
General Fixed Assets Account Group
Schedule of Changes in General Fixed Assets by Function
Year Ended June 30, 1999
General Fixed General Fixed
Assets at Assets at
July I, 1998 Add it ions Deductions June 30, 1999
$ 7,552,224 1,327,479 (455,034) 8,424,669
44,366,173 20,75 1,529 (4,614,568) 60,503,134
19,897,059 1,741,3 I4 (1,577,598) 20,060,775
2,141,255 6 18,247 (103,027) 2,656,475
$73,956,711 24,43 8.5 69 (6.750,227) 91.645.053
143
CITY OF CARLSBAD
General Fixed Assets Account Group
Schedule of General Fixed Assets by Source
June30. 1999
As of June 30, 1986
Net additions subsequent to June 30, 1986:
General Fund
Community development block grants
Federal grants
State grants
Street lighting
Park development
Public facilities
Redevelopment
Total investments in general fixed assets
$27,136,537
15,954,887
2,9 12,726
509,124
855,967
327,15 1
15,653,194
23,513,664
4.78 1 303
$9 1,645,053
144
ANNUAL DEBT SERVICE REOUIREMENTS
The following schedules present principal and interest debt service requirements for the City’s
debt.
I
State Loan for
Reclaimed Water
145
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements
Fiscal Year
1999-2000
2000-01
200 1-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009- 10
2010-1 1
201 1-12
20 12- 13
201 3-14
2014-1 5
201 5-16
2016-17
201 7-1 8
2018-19
2G 19-20
2020-2 1
202 1-22
2022-23
2023-24
Totals
$15,495,000 - 1993 CARLSBAD HOUSING AND
REDEVELOPMENT COMMISSION TAX ALLOCATION BONDS
Interest Due
September 1
$ 380,501
372,889
364,883
356,351
347,426
337,976
328,001
3 17,633
306,607
295,058
28235 1
269,989
256,470
242,295
227,332
21 1,583
195,045
177,589
159,214
139,920
119,576
98,182
75,525
5 1,675
26,500
$5,941,071
Interest Due
March 1
372,889
364,882
356,35 1
347,426
337,977
328,001
3 17,633
306,607
295,058
282,85 1
269,989
256,470
242,295
227,332
21 1,583
195,045
177,589
159,213
139,920
119,576
98,183
75,525
5 1,675
26,500
5,560,570
146
Total
Interest
753,390
737,771
72 1,234
703,777
6 85,403
665,977
645,634
624,240
60 1,665
577,909
552,840
526,459
498,765
469,627
438,915
406,628
372,634
3 3 6,802
299,134
259,496
2 17,759
173,707
127,200
78,175
26.500
11,501.641
Principal Due
September 1
290,000
305,000
325,000
340,000
360,000
380,000
395,000
420,000
440,000
465,000
490,000
5 15,000
540,000
570,000
600,000
630,000
665,000
700,000
735,000
775,000
8 15,000
855,000
900,000
950,000 1,000.000
14,460,000
Total Annual
Debt Service
1,043,390
1,042,771
1,046,234
1,043,777
1,045,403
1,045,977
1,040,634
1,044,240
1,04 1,665
1,042,909
1,042,840
1,04 1,459
1,038,765
1,039,627
1,038,915
1,036,628
1,037,634
1,036,802
1,034,134
1,034,496
1,032,759
1,028,707
1,027,200
1,028,175
1,026,500
2596 1.64 1
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements, (Continued)
$6,595,000 - 1997 HOSP GROVE CERTIFICATES OF PARTICIPATION
/1988 Refunding)
Fiscal Interest Due Interest Due Total Principal Due Total Annual - Year August 1 February 1 Interest August 1 Debt Service
1999-2000
2000-0 1
200 1-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
$13 1,825
121,978
11 1,678
100,608
88,743
76,058
62,4 18
48,448
33,373
17,273
121,977
11 1,677
100,607
88,742
76,057
62,4 17
48,447
33,372
17,272
253,802
233,655
2 12,285
189,350
164,800
138,475
1 10,865
8 1,820
50,645
17.273
505,000
5 15,000
540,000
565,000
590,000
620,000
635,000
670,000
700,000
735,000
758,802
748,655
752,285
754,350
754,800
758,475
745,865
75 1,820
750,645
752,273
Totals $792,402 660,568 1.452,970 6.075,OOO 7.527.970
$1,199,950 - HUD SECTION 108 LOAN
Fiscal Interest Due Interest Due Total Principal Due Total Annual Year August 1 February 1 Interest August 1 Debt Service
1999-2000 $30,770 25,491 56,26 1 130,000 1 86,26 1
2000-0 1 25,491 19,787 45,278 140,000 185,278
200 1-02 19,787 13,62 1 33,408 150,000 183,408
2002-03 13,621 7,030 20,65 1 160,000 180,65 1
2003-04 7.030 7.030 169,950 176,980 -
Totals 912,578
147
-
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements, (Continued) -
$7,400,000 - 1997 CARLSBAD MUNICIPAL WATER DISTRICT
- CERTIFICATES OF PARTICIPATION ( 1988 Refundinv Proiect)
-
Fiscal Interest Due Interest Due Total Principal Due Total Annual
Debt Service - Year November 1 May 1 Interest May 1
I 1999-2000 $1 13,725 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
200 1-02 72,505 72,505 145,O 10 1,075,000 1,220,o 10 49,930 49,930 99,860 1,120,000 1,2 19,860 - 2002-03 2003-04 25,850 25,850 5 1,700 1,175.000 1,226.700
Totals $3 55.835 355,835 7 1 1,670 5,405,000 6.1 16.670 -
$1 1,080.000 - ENCINA FINANCING JOINT POWERS AUTHORITY
INSTALLMENT PURCHASE AGREEMENT
Fiscal Year
1999-2000
2000-0 1
200 1-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009- 10
2010-1 1
201 1-12
2012-13
201 3-14
2014-1 5
Totals
Interest Due
August 1
$ 254,586
245,786
236,24 1
225,92 1
215,278
200,978
188,603
172,79 1
156,153
139,353
122,s 16
105,19 1
86,228
66,24 1
45,228
23,190
$2,484,584
Interest Due
February 1
245,785
236,240
225,920
2 15,278
200,978
188,603
172,79 1
156,153
139,353
122,8 16
105,191
86,228
66,24 1
45,228
23,191
2,229.996
Total
Interest
500,37 1
482,026
462,16 1
441,199
416,256
389,58 1
361,394
328,944
295,506
262,169
228,007
191,4 19
152,469
1 1 1,469
68,4 19
23,190
Principal Due
August 1
440,000
4 6 0,O 0 0
480,000
495,000
520,000
550,000
5 75,000
605,000
640,000
675,000
705,000
740,000
780,000
820,000
860,000
905.000
Total Annual
Debt Service
940,3 7 1
942,026
942,16 1
936,199
936,256
939,581
936,394
93 3,944
935,506
937,169
93 3,007
93 1,419
932,469
93 1,469
928,4 19
928,190 - 4,7 14,580 10,250,000 14,964,580
148
Fiscal Year
1999-2000
2000-0 1
200 1-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2UO8-09
2009- 10
2010-1 1
201 1-12
20 12- 13
2013-14
Totals
Fiscal Year
1999-2000
2000-0 1
200 1-02
2002-03
2003-04
2004-05
2005-06
Totals
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements, (Continued)
$2,33 1,489 - CARLSBAD MUNICIPAL WATER DISTRICT
STATE LOAN FOR RECLAIMED WATER PROJECTS
Interest Due
November 30
$ 55,012
51,981
48,862
45,653
42,350
38,952
35,455
31,857
28,155
24,345
20,425
16,391
12,240
7,969
2.680
Principal Due
November 30
104,5 15
107,546
110,665
1 13,874
117,177
120,575
124,072
127,670
13 1,372
135,182
139,102
143,136
147,287
151,558
123,2 19
$462.327 1,896.950
$2.6 18,908 GOLF COURSE ACCRUED ASSESSMENT
Interest
$ 59,297
52,485
45,212
37,465
29,103
20,173
10,425
$254.160
PrinciDal
154,824
161,614
168,405
177,912
186,060
196,925
206,432
1,252,172
Total Annual
Debt Service
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
125,899
2,359,277
Total Annual
Debt Service
214,121
2 14,099
213,617
21 5,377
2 1 5,163
2 1 7,098
2 16,857
1,506,332
149
150
w
151
CITY OF CARLSBAD
General Expenditures by Function
Fiscal Year -
1989-90
1990-91
199 1-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98"'
1998-99("
Total'"
53,133,603
72,999,324
53,985,119
55,104,390
62,668,276
60,280,103
59,802,924
General - Govt.
4,412,182
5,371,331
5,884,582
6,080,919
5,513,101
5,871,248
5,850,829
Last Ten Fiscal Years
Public Safetv
1 3 ,O 1 9,99 1
15,242,493
15,989,114
15,734,643
16,35 1,652
15,915,678
16,850,087
Com. Devel.
4,8 19,544
6,194,277
5,934,690
5,886,636
6,255,252
6,465,977
7,363,194
Com.
Services
7,814,101
7,921,668
7,473,689
7,176,621
7,548,100
7,459,685
7,590,363
Public works
8,3 15,586
7,596,750
9,088,351
8,376,678
8,847,328
8,111,572
8,956,757
Capital Proiects
11,104,390
26,665,164
5,639,898
7,192,002
12,933,253
12,159,653
9,654,082
Debt Service
3,647,809
4,007,641
3,974,795
4,656,891
5,2 19,590
4,296,290
3,537,612
65,943,032 6,961,469 17,410,033 7,431,539 8,390,009 8,816,767 13,556,164 3,377,051
80,045,280 6,909,151 18,631,042 7,894,536 6,672,810 11,437,101 23,693,412 4,807228
112,156,205 6,784,525 21,927,751 8,636,634 7,541,378 12,689,683 52,106,587 2,469,647
(')Includes General, Special Revenue, Debt Service and Capital Projects Funds.
(2)Beginning in fiscal year 1997-98, Park Maintenance expenditures arc included in Public Works instead of Community Services.
I GENERAL EXPENDITURES BY FUNCTION r 1998-99
Government
Community - Public Works Services
7% 11%
Source: City of Carlsbad Comprehensive Annual Financial Reports
152
TOTAL EXPENDITURES
LAST TEN YEARS
$120
$1 00
$80
$60
$40
$20
$0 7- 1990199119921993199419951996199719981999
Fiscal Year
SPENDING ON CAPITAL PROJECTS
LAST TEN YEARS
Dollars in millions
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Fiscal Year
153
CITY OF CARLSBAD
PROPERTY TAX
AND SALES TAX REVENUE
LAST TEN YEARS
General Revenues by Source
-
Last Ten Fiscal Years
Transient
Business Fiscal Property Sales Occupancy Other Year Total' ' ) Taxes - Taxes Taxes Taxes Licenses
1989-90 $57,970,453 $12,677,817 $9,342,077 $3,630,662 $4, I 14,856 $79 1,715
832,432 9,426,111 3,3 10,043 3,69 1,3 87 1990-9 1 77,371,107 14,007,364
199 1-92 5 8,440,43 6 15,132,124
1992-93 58,115,465 15,332,036
1993-94 62,239,740 13,920,220
1994-95 69,768,s 17 13,537,893
1995-96 74,6 1 1,395 13,576,407
8,723,382 3,077,595 5,153,213 910,532
3,408,805 1,07 1,342 9,167,849 3,098,793
0,840,115 3,153,084 4,124,250 1,093,827
1,399,568 3,252,270 8,434,825 1,245,830
1,542,970 3,406,917 8,621,717 1,491 ,I 59
1996-97 98,645,130 14,s 16,474 12,495,143 3,675,472 10,824,890 1,s 10,462
1997-98 122,653,159 15,226,827 14,817,057 6,046,092 15,290,601 1,603,744
1,737,850 1998-99 145,393,99 1 17,121,586 17,129,474 7,O 10,249 14,508,643
(I) Includes General, Special Revenue, Debt Service and Capital Projects
Funds.
(') Includes interdepartmental services category added in 199 1-92 and
miscellaneous revenues.
GENERAL REVENUE LAST TEN YEARS
$140 z 120 ,P 100 5: 80
.G - 60
40
E 20
0
E
Fiscal Year
I - Sales Tax I
1 - e 520 I
Fiscal Year -
Source: City of Carlsbad Comprehensive Annual Financial Reports
154
Other
Licenses
$4,058,540
3,550,013
3,307,980
- 3,355,533
3,590,927
-- 3,766,340
4,178,844
-
5,609,730
6,484,025
3,826,686
-
-
?A-
_-
Intergovern-
mental
$3,267,054
5,405,074
6,087, I38
7,107,385
8,O 19,308
7,590,323
6,426,262
1 1,764,760
17,091,140
17,801,614
Charges for
Services
$10,728,326
10,701,989
7,759,224
5,725,597
9,18 1,8 I4
9,819,230
6,805,386
10,707,653
7,614,902
6,805, I47
Fines and
Forfeits
$5 1 1,890
5 15,746
3 12,984
23 1,877
23 1,454
263,411
335,395
3 17,892
331,318
935,955
Investment
Income
$6,002,986
5,737,513
4,826,292
4,866,361
3,996,127
4,415,975
4,862,050
6,075,188
8,632,26 1
8,925,565
Contributions
From Property
Owners
$ 402,292
163 15,962
446,8 13
380,389
344,85 1
2,148,548
9,359,802
15,450,86 1
25,86 1,948
45,763,304
Other"'
$2,442,238
3,677,473
2,703,159
4,369,498
3,743,763
3,894,304
4,004,486
5,696,605
3,653,244
3,827,9 1 8
TRANSIENT OCCUPANCY TAX
LAST TEN YEARS
CHARGES FOR SERVICE^
LAST TEN YEARS
I I I 12 fl
Fiscal Year Fiscal Year
c
L
c 155
Fiscal
Year
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
I GENERAL BONDED DEBT PER CAPITA -
CITY OF CARLSBAD
Ratio of General Bonded Debt to Assessed Valuation
and Net Bonded Debt Per Capita
Last Ten Fiscal Years
Net Assessed
Valuation'' )
4,850,671,236
5,474,063,206
5,909,991,722
6,066,896,498
5,998,436,686
5,824,971,165
5,841,695,579
6,005,069,504
6,424,230,646
7,391,938,713
Outstanding
PrinciDal(*)
$285,000
150,000
-
-
-
-
-
-
-
-
Percent of
Total
Valuation
0.01
-
-
-
-
-
-
-
-
-
Per Capita
Debt
$4
2
-
-
-
-
-
-
-
-
(l) Net assessed value is stated at 100% of market value. Data
from County of San Diego Office of the Auditor and Controller.
(*) Library and sewer general obligation bonds per the City of
Carlsbad Comprehensive Annual Financial Reports.
Po~ulation'~)
63,126
64,120
65,331
66,481
66,652
66,479
68,010
70,532
73,688
77,550
-.. (3) Population as of January 1 of each year per the State Department of Finance.
$4 L
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Fiscal Year
- 156
c
CITY OF CARLSBAD
Computation of Legal Debt Margin
June 30,1999
Net assessed valuation
Debt limit (15% of 25% of net assessed valuation as adjusted)
Amount of debt applicable to debt limit:
Bonded debt
Certificates of participation
Obligations under capital leases
Total amount of debt applicable to debt limit
Legal debt margin
c
c
I
.-
Percent of debt limit
$7.391.938.713
277.197.702
14,460,000
6,075,000
632.947
21.167.947
$ 256.029.755
8%
Source: County of San Diego Ofice of the Auditor and Controller
157
CITY OF CARLSBAD
Schedule of Direct and Overlapping Bonded Debt
June 30,1999 -
1998-99 Assessed Valuation: $7,500,561,913 (after deducting $140,759,284 redevelopment increment
valuation) ..
% Debt
DIRECT AND OVERLAPPING BONDED DEBT: Audicable June 30. 1999
San Diego County Water Authority 5.285 % $ 398,753
Metropolitan Water District 0.884 5,109,829
Carlsbad Unified School District 97.688 25,886,046
Carlsbad Unified School District Lease Tax Obligations 97.688 5,387,493
Carlsbad Unified School District Community Facilities Dist. No. 1 100.000 12,105,000
Encinitas Union School District 23.657 6,953,696
Encinitas Union School District Lease Tax Obligations 23.657 1,285,758
San Marcos Unified School Dist. School Facilities Improvement Dist. 26.9 18 5,804,333
San Marcos Unified School Dist. Community Facilities Dist. No. 5 100.000 12,950,000
San Dieguito Union High School Dist. Community Facilities Dist. No. 1 42.715 19,076,519
Olivenhain Municipal Water District, I.D. No. 1 3 1.648 79,120 --
Olivenhain Municipal Water Dist., Assessment Dist. No. 96- 1 20.302 4,519,225
City of Carlsbad 1915 Act Bonds 100.000 47,800,000
TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT'') $ 147,355,772
-
-
I
-.
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
San Diego County General Fund Obligations
San Diego County Pension Obligations
San Diego County Supt. of Schools General Fund Obligations
Mira Costa Community College District Certificates of Participation
Carlsbad Unified School District General Fund Obligations
San Marcos Unified School Dist. Certificates of Participation
Encinitas Union School Dist. Certificates of Participation
Other School District Certificates of Participation
City of Carlsbad General Fund Obligations
TOTAL DIRECT AND OVERLAPPING GF OBLIGATION DEBT:
GROSS COMBINED TOTAL DEBT:
5.088 % $
5.088
24.925
97.688
23.978
23.657
Various
100.000
5.088
$
26,496,123
18,989,434
115,370
1,8 15,786
11,190,161
555,091
1,567,276
203,744
6,075,000
67,007,985
$ 214,363,757 -
(1) Excludes tax and revenue anticipation notes, revenue, mortgage
revenue, and tax allocation bonds and non-bonded capital lease obligations --
Ratios to Assessed Valuation:
Ratios to Adiusted Assessed Valuation:
Total Gross Overlapping Tax and Assessment Debt .........................
Combined Direct Debt ($6,075,000).. ............................................
Gross Combined Total Debt ........................................................
SHARE OF AUTHORIZED & UNSOLD GENERAL OBLIGATION BONDS:
Carlsbad Municipal Water District, I.D. No. 1 ...................................
Carlsbad Municipal Water District, I.D. No. 3... .................................
1.96%
0.08%
2.86%
$99,221
$200,000
Source: California Municipal Statistics, Inc.
158
Ratio of Annual Debt Service for General Bonded Debt to Total Governmental Expenditures
Last Ten Fiscal Years
Ratio of Debt
Fiscal Debt Governmental Governmental - Year Princival Interest Service"' Exvenditures'2' ExDenditures
Total Total Service to
1989-90 $135,000 $13,728 $148,728 $53,133,603 0.3
1990-91 135,000 8,652 143,652 72,999,324 0.2
1991-92 150,000 3,908 153,908 53,985,119 0.3
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 -
1997-98 - 80,045,280 -
1998-99 112,045,585
(1) 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.
(2) Includes General, Special Revenue, Debt Service and Capital Project funds.
I RATIO OF DEBT SERVICE TO GENERAL EXPENDITURES I LAST TEN YEARS
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Reports
159
CITY OF CARLSBAD
Fiscal - Year
1989-90
1990-9 1 "'
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
Gross
Revenue")
S 2,001,832
1 1,398,343
1 1,504,798
12,267,854
15,188,913
15,912,020
17,147,790
18,911,511
18,356,555
19,942,226
Direct
Operating
ExDenses'*)
$ 1,415,542
9,172,478
9,520,564
11,421,571
12,286,557
12,690,114
13,998,346
14,692,53 1
14,583,879
16,732,975
Water Enterprise Revenue Bond Coverage
Last Ten Fiscal Years
Net Revenue
Available
For Debt Debt Service Reauirements
Service PrinciDal Interest - Total Coveraee
$ 586,290 $ 160,000 $ 12,718 $ 172,718 3.39
2,225,865 775,000 1,088,386 1,863,386 1.19
1,984,234 685,000 842,538 1,527,538 1.29
846,283 730,000 798,696 1,528,696 0.55
2,902,356 775,000 75 1,248 1,526,248 1.90
3,22 1,906 825,000 700,098 1,525,098 2.11
3,149,444 880,000 644,822 1,524,822 2.07
4,218,980 1,040,000 494,954 1,534,954 2.75
3,772,672 955,000 264,695 1,2 19,695 3.09
3,209,25 1 995,000 227,450 1,222,450 2.63
(I) Includes operating and non-operating revenues.
(2) Total operating expenses including depreciation and amortization.
(3) 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
160
4
WATER ENTERPRISE GROSS REVENUE vs.
DIRECT OPERATING EXPENSES LAST TEN YEARS
$20
$1 5
$1 0
$5
SO 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Fiscal Year
UGROSS REVENUE
.OPERATING EXPENSES
WATER ENTERPRISE
REVENUE AVAILABLE FOR DEBT SERVICE
LAST TEN YEARS
$4.5 4 Dollars in millions I
$4.0
$3.5
$3.0
$2.5
$2.0
$1.5
$1 .o
$0.5
$0.0 __._ 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Reports
161
CITY OF CARLSBAD
Schedule of Assessed Valuation
Last Ten Fiscal Years
Fiscal Year Secured ProDerty
1989-90
1990-9 1
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
$4,8 13,718,827
5,406,790,697
5,823,039,8 10
5,948,358,026
5,858,987,695
5,673,354,814
5,676,06 1,2 19
5,811,751,594
6,232,883,670
7,154,426,710
Unsecured ProDertv
$147,696,674
182,042,779
205,094,661
242,25 5 , 869
270,120,5 19
288,206,83 1
3 10,402,764
348,706,124
352,854,173
424,962,226
(I) Does not include redevelopment incremental valuation or state-
assessed unitary values.
Less ProDerly Exemutions
$2338 1,665
25,387,503
27,4 14,635
3 1,586,277
36,15 1,898
40,417,338
46,279,594
55,13 8,448
57,681,797
78,827,023
Source: County of San Diego Office ofthe Auditor and Controller
162
Total
Assessed Valuation'''
$4,937,833,836
5,s 63,445,973
6,000,719,836
6,159,027,618
6,092,956,3 16
5,921,144,307
5,940,184,389
6,105,319,270
6,528,056,046
7,500,561,913
NET TAXABLE VALUE
LAST TEN YEARS
I
Homeowner's
Exemutions
$ 87,162,600
89,382,767
90,728,114
92,13 1,120
945 19,630
96,173,142
98,488,8 10
100,249,766
103,825,400
108,623,200
Net Assessed
Valuation
$4,850,671,236
5,474,063,206
5,909,991,722
6,066,896,498
5,998,436,686
5,824,971,165
5,84 1,695,579
6,005,069,504
6,424,230,646
7,391,938,713
Percentage
Change
15.4
12.9
8.0
2.7
2.8
7.0
15.1
Dollars in billions
$8 4
$7
$6
$5
$4
$3
$2
$1
$0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Fiscal Year
163
CITY OF CARLSBAD
Construction and Business Activity
Last Ten Fiscal Years
Building Fiscal Permit Percent Estimated
Year Revenue ChanPe Valuation
1989-90
1990-9 1
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
$600
$500
$400
$300
$200
$1 00
SO
$1,029,750
857,717
2 1 9,445
234,063
365,571
644,131
917,788
1,262,177
2,094,523
2,524,063
52.6
(1 6.7)
(74.4)
6.7
56.1
76.2
42.4
37.6
65.9
20.5
$169,746,343
163,340,462
42,35 1,906
49,809,414
7 1,057,243
145,344,099
162,116,427
305,247,426
479,909,805
588,527,417
ESTIMATED BUILDING VALUATION
LAST TEN YEARS
Business
License Percent Revenue Change
$791,715 13.6
832,432 5.1
910,532 9.4
1,071,342 17.7
1,093,827 2.1
1,245,830 13.9
1,491,159 19.7
1,5 10,462 1.3
1,603,744 6.2
1,737,850 8.4
Dollars in millions
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Reports
Construction
DeDosits
Not Available
Not Available
$4,663,2 19
5,224,780
4,474,153
5,667,9 13
5,239,235
6,822,684
5,857,O 13
5,779,355
164
CITY OF CARLSBAD
e
e
Fiscal
Year
1989-90
1990-9 1
199 1 -92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
Property Tax Levies and Collections
Last Ten Fiscal Years
Total Current Lev
$ 12,600,253
13,931,230
14,932,937
13,990,844
12,3 73,782
11,977,833
11,891,199
12,227,583
13,227,486
15,115,611
Total Current
Collections
$ 11,816,888
12,986,628
13,795,525
12,776,232
1 1,3 18,017
1 0,843,322
11,164,134
11,551,981
12,636,654
14,42 1,616
I PROPERTY TAX LEVIES & COLLECTIONS I LAST TEN FISCAL YEARS
Dollars in millions
.-
re
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Fiscal Year
El LEVIES COLLECTIONS
Source: County of San Diego Office of the Auditor and Controller
% of Levy Collected
93.8
93.2
92.4
91.3
91.5
90.5
93.9
94.5
95.5
95.4
165
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000 (Estimate)
2005 (Estimate)
2020 (Estimate)
POPULATION
LAST TEN YEARS -
Square
Miles
42.2
42.2
42.2
42.2
42.2
42.2
42.2
42.2
42.2
42.2
CITY OF CARLSBAD
Demographic Statistics
Last Ten Fiscal Years
Potwlation' "
63,126
64,120
65,33 1
66,48 1
66,652
66,479
68,010
70,532
73,688
77,550
8 1,206'"
93,796'"
113,173"'
Population
Percent
Change
1.8
1.6
1.9
1.8
0.9
(0.2)
2.3
3.7
4.5
5.2
County
Pouulation(*)
2,498,016
2,539,583
2,583,470
2,614,222
2,6383 11
2,65 8,584
2,682,093
2,724,437
2,794,785
2,853,258
3,004,434'4'
3,125 ,900'4'
3, 826,900'4'
Source - State Department of Finance.
Source - County Data Base, San Diego County.
Source - based on City of Carlsbad projected residential construction
estimates in 1999-00 Capital Improvement Program.
Source - San Diego Association of Governments Series VI11 growth forecast.
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
Fiscal Year
166
-
4
-
City
Population -
Percent
of County
2.5
2.5
2.5
2.5
2.5
2.5
2.5
2.6
2.6
2.7
2.7
3 .O
3.0
-
-
-
-
-
-
-
-
_*
- -_
-.
-_
-_
-
-
FIRM
MA NUFA CTURING
Callaway Golf Company, Inc.
Mallinckrodt
West Coast Composite
Cobra Golf, Inc., I1
Taylor Made Golf Company, Inc.
Ashworth, Inc.
ViaSat, Inc.
Palomar Products
Asymtek
No Fear
Syntron Bioresearch, Inc.
The Upper Deck
Schumacher Company
Artecon, Inc.
Beckman Coulter
Invitrogen
Melles Griot Laser Products
NON-MA NUFA CWRING
Plaza Camino Real
Four Seasons Resort-Aviara
Legoland California
La Costa Resort & Spa
City of Carlsbad
Carlsbad Company Stores
Carlsbad Unified School District
Gemological Institute of America
SOMC Group, Inc.
Farmers Insurance
ISIS Pharmaceuticals
San Diego Gas & Electric Company
COSTCO Wholesale
PSB Lending Corporation
Toyota Carlsbad/Lexus
Pinn Fund USA
CITY OF CARLSBAD
Principal Employers
1998- 1999
PRODUCT/SERVICE
Golf Equipment
Respiratory Products
Golf Equipment
Golf Equipment
Golf Equipment
Golf Apparel
Communications Equipment
Integrated Circuits
Fluid Dispensing Systems
Test Kits & Diagnostics
Sports Trading Cards
Chemical Purification Systems
Computers
Medical Diagnostic Reagent
Research Supplies
Lasers
Clothing
Shopping Mall
Resort
Family Theme Park
HoteVHealth Spa
Municipal Government
Outlet Shopping Center
Education
Gem School
Software Distributor
Insurance Services
Research and Development
Power Generation
GrocerWholesaleRetail
Service Real Estate Loans
Car Dealership
Mortgage Banking
EMPLOYEES
2000
1000
700
675
450
394
350
300
280
250
250
250
248
200
200
200
200
3000
1100
1100
950
775
750
750
466
380
350
350
325
285
250
250
200
Source: City of Carlsbad Chamber of Commerce
167
TaxDaver
~ ______~ _____
San Diego Gas & Electric Co.
La Costa Hotel & Spa Corp.
Aviara Resort Associates
Legoland California, Inc.
Callaway Golf Company
Real Estate Collateral
Prentiss Properties
Villages of La Costa
Air Products & Chemicals
Puritan-Bennett Corporation
Standard Pacific Corporation
CITY OF CARLSBAD
Principal Taxpayers
1998-99
Type of Business
Power Generation
Hotel & Health Spa
Resort & Golf Course
Family Theme Park
Manufacturer
Real Estate
Real Estate
Real Estate
Manufacturer
Medical Equipment
General Contractor
Valuation
$249,463,675
182,345,611
144,818,525
135,708,865
108,670,798
103,992,732
60,7 15,97 1
51,102,000
46,124,487
39,013,804
36,523,199
$ 1,158,479,667
("Net assessed valuation for 1998-99: $7,39 1,938,7 13
Source: County of San Diego Office of the Auditor and Controller
168
Percentage of Net
Assessed
Valuation")
3.4
2.5
2.0
1.8
1.5
1.4
0.8
0.7
0.6
0.5
0.5
15.7%
c
c
Firm
CITY OF CARLSBAD
Top 30 Sales Tax Generators
1998- 1999
Air Products & Chemicals
Aviara Resort Associates
Bob Baker Cadillac
Bob Baker Jeep/Eagle/Hpdai
Bob Baker Volkswagen
Body Wise International
Carlsbad witsubishi
Carlsbad Volvo
Discover Infiniti Carlsbad
Gascard Incorporated
Hoehn Honda
Hoehn Oldsmobile
J C Penney Company
Jim Finney Pontiac
La Costa Hotel & Spa
Legoland California
Lexus Carlsbad
Macy's Department Stores
North County LincoldMercury
Price Club
Reliable Wholesale Lumber
Robinsons-May Department Stores
Rorick Buick
Sears Roebuck & Company
The Good Guys
Toyota Carlsbad
Vince Dixon Ford
Vons Grocery Company
Weseloh Chevrolet
Worthington Dodge
Product/Service
Chemical Products
Hotel Food Sales
Car Dealership
Car Dealership
Car Dealership
Distributor/Health Products
Car Dealership
Car Dealership
Car Dealership
Light Industry
Car Dealership
Car Dealership
Department Store
Car Dealership
Hotel & Health Spa
Family Theme Park
Car Dealership
Department Store
Car Dealership
General Stores
Building Materials
Department Store
Car Dealership
Department Store
Electronic Equipment
Car Dealership
Car Dealership
Supermarket
Car Dealership
Car Dealership
Source: Municipal Resource Consultants (MRC)
169
CITY OF CARLSBAD
Miscellaneous Statistical Information
1998-99
Date of Incorporation
Type of City
Form of Government
Area Population (CA Dept of Finance Report 1/1/99)
Net Assessed Valuation
Number of Street Lights
Miles of Streets
Fire Protection:
Number of Stations
Number of Firefighters & Officers
Police Protection:
Number of Stations Number of Sworn Police Officers
Municipal Water District:
Number of Customers
Number of Water Connections
Average Daily Consumption
Miles of Lines and Mains
Miles of Sewers
Recreation and Culture:
Number of Parks (Improved Community Parks & Special Use Areas)
Area of Parks (Improved Community Parks & Special Use Areas)
Number of Pools Number of Libraries
Number of Volumes
Total Number of Authorized Full Time City Employees
July 16, 1952
General Law
Council/Manager
42.19 sq. miles
77,550
$ 7,391,938,713
5,597
244
6
72
1
93
72,000
20,100
14.9 million gallons
350
145
34
197 acres
1
2
236,089
586
Source: City of Carlsbad Finance Department
170
c
c
CITY OF CAFUSBAD Carlsbad, California
Single Audit Report on Federal Award Programs
Year ended June 30,1999
CE RT I F I E D PU B L I C AC C 0 U N TA N TS
CONRAD- ASS 0 C I ATES, L.L.p
CITY OF CARLSBAD
Single Audit Report on Federal Award Programs
Year ended June 30,1999
TABLE OF CONTENTS
Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
Report on Compliance with Requirements Applicable to Each Major Program, Internal Control over Compliance and on the Schedule of Federal Awards in Accordance with OMB Circular A- 1 3 3
Schedule of Federal Awards
Notes to Schedule of Federal Awards
Schedule of Findings and Questioned Costs
Summary Schedule of Prior Audit Findings
1
CERTIFIED PUBLIC ACCOUNTANTS
11 00 MAIN STREET, SUITE C
IRVINE, CALIFORNIA 92614
CONRAD~~ ASS 0 CIATES, L.L.p.
(949) 474-2020
F~x (949) 263-5520
The Honorable Members of City Council City of Carlsbad Carlsbad, California
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS
We have audited the financial statements of the City of Carlsbad (City) as of and for the year ended June 30, 1999, and have issued our report thereon dated September 28, 1999. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instmces of noncompliance that are required to be reported under Governntenr Auditing Standards.
Internal Control Over Financial Reuorting
,-
In planning and performing our audit, we considered the City’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide zssurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters ir, the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses.
This report is intended for the information of the City’s management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Wd&OJ4? L.L */
September 28, 1999
1
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
CERTIFIED PUBLIC ACCOUNTANTS
1100 MAIN STREET, SUITE C ASSOCIATES, L.L.F IRVINE, CALIFORNIA 92614
CONRAD-
(949) 474-2020
F~x (949) 263-5520
The Honorable Members of City Council City of Carlsbad Carlsbad, California
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM, INTERNAL CONTROL OVER COMPLIANCE AND ON THE SCHEDULE OF FEDERAL AWARDS IN ACCORDANCE WITH OMB CIRCULAR A-133
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM, INTERNAL CONTROL OVER COMPLIANCE AND ON THF
Compliance
We have audited the compliance of the City of Carlsbad (City) with the types of compliance requirements described in the US. OfJice of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 1999. The City’s major federal programs are identified in the summary of
auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City’s management. Our responsibility is to express an opinion on the City’s compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-ProJit Organizations. Those standards and OMB Circular A- 133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City’s compliance with those requirements.
In our opinion, the City complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 1999.
Internal Control Over Compliance
c
The management of the City is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City’s internal control over compliance with requirements that could have a direct and material effect on a major
federal program in order to determine our auditing procedures for the purpose of expressing our
opinion on compliance and to test and report on internal control over compliance in accordance
with OMB Circular A-133.
2
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
The Honorable Members of City Council City of Carlsbad Page Two
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
Schedule of Federal Awards
We have audited the financial statements of the City as of and for the year ended June 30, 1999, and have issued our report thereon dated September 28, 1999. Our audit was perfonned for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying schedule of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole.
This report is intended for the information of the City’s management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
September 28, 1999
3
CITY OF CAFUSBAD
Schedule of Federal Awards
Year ended June 30,1999
Catalog of Federal
Assistance Identification Number Number
Domestic "?P Federal Awards Expenditures
$2,043,696 *
594,O 12*
730,104
3,367.812
87.193
24,063
. 5,061
84,105
20,369
104.474
Federal Grantor/ Pass-through Grantor/ Program Title
U.S. Department of Housing and Urban Development: Direct Assistance: Section 8 Housing Certificate Program
Section 8 Housing Voucher Program
Community Development Block Grant
Subtotal
Amount Provided to Subrecipients
14.857
14.855
14.218
CA16E077006/016
CA 16V00700/006
B93MC060563 381.915
381,915
U.S. Department of Health and Human Services: Pass-through the County of San Diego: Senior Nutrition Program 93.045
10.558
84.034
16.592
16.000
20.205
20.205
34111
U.S. Department of Agriculture: Pass-through the County of San Diego: Senior Nutrition Program
U.S. Department of Education: Pass-through the California State Library: Library Services
U.S. Department of Justice: Direct Assistance: Law Enforcement Block Grant
34111
40-4300
96-LB-VX-2303
Police Asset Forfeiture
Subtotal
US. Department of Transportation: Pass-through the California Department of Transportation: Intermodal Surface Transportation Efficiency Act - Bike Lanes
Federal-Aid Project Direct Assistance:
(Quicnet/4 Traffic System)
Subtotal
Total federal financial awards
,-
11-119914
CML-5308(006)
56,685
9.166
65.851
$3.654.454 381,915
* Major program
See accompanying notes to schedule of federal awards.
4 c
CITY OF CARLSBAD
Notes to the Schedule of Federal Awards
Year ended June 30,1999
(1) Summarv of Significant Accounting; Policies Applicable to the Schedule of Federal
Awards
x
Scope of Presentation
The accompanying schedule presents only the expenditures incurred (and related awards received) by the City of Carlsbad (City) that are reimbursable under programs of federal agencies providing financial assistance. For the purposes of this
schedule, financial assistance includes both federal financial assistance received
directly from a federal agency, as well as federal funds received indirectly by the City from a non-federal agency or other organization. Only the portion of program expenditures reimbursable with such federal funds are reported in the accompanying
schedule. Program expenditures in excess of the maximum federal reimbursement
authorized or the portion of the program expenditures that were funded with state,
local or other non-federal funds are excluded from the accompanying schedule.
Basis of Accounting
The expenditures included in the accompanying schedule were reported on the modified accrual basis of accounting. Under the modified accrual basis of accounting, expenditures are incurred when the City becomes obligated for payment as a result of the receipt of the related goods and services. Expenditures reported included any property or equipment acquisitions incurred under the federal program.
Subrecipients
During the fiscal year ended June 30, 1999, the City disbursed $381,915 of its Community Development Block Grant to various subrecipients to be used for the
allowable expenditures as provided in this grant agreement.
5
CITY OF CARLSBAD
Schedule of Findings and Questioned Costs
Year ended June 30,1999
[A) Summarv of Auditors’ Results
1. An unqualified report was issued by the auditors on the financial statements of the auditee.
2. There were no material weaknesses in internal control over financial reporting nor were there any reportable conditions, based upon our audit of the financial statements of the auditee.
3. The audit disclosed no noncompliance which is material to the financial statements of the auditee.
4. There were no material weaknesses or other reportable conditions in internal control over major programs of the auditee.
5. An unqualified report was issued by the auditors on compliance for major programs.
6. The audit disclosed no audit findings required by the auditors to be reported under paragraph .5 1 O(a) of OMB Circular A- 133.
7. The major programs of the auditee were CFDA No. 14.857 and 14.855 U.S. Department of Housing and Urban Development - Section 8 Housing Certificate and Voucher programs.
8.
9.
The dollar threshold used to distinguish Type A and Type B programs was $300,000.
The auditee was considered to be a low risk auditee for the year ended June 30, 1999 for major program determination.
JB) Findings Related to the Financial Statements which are Required to be Reported in Accordance with GAGAS
There were no auditors’ findings required to be reported in accordance with GAGAS.
IC) Findings and Ouestioned Costs for Federal Awards as Defined in Paragraph .510(a) of OMB Circular A- 133
There were no auditors’ findings required to be reported in accordance with paragraph .51O(a) of OMB Circular A-133.
6
CITY OF CARLSBAD
Summary Schedule of Prior Audit Findings
Year ended June 30,1999
No prior year audit findings.
ENCINA FINANCING JOINT POWERS AUTHORITY
Financial Statements and Supplementary Information
Year Ended June 30,1999
(With Independent Auditors’ Report Thereon)
CERTlFtED PUBLIC ACCOUNTANTS
CONRADM ASSOCIATES, L.m
ENCINA FINANCING JOINT POWERS AUTHORITY
Financial Statements and Supplementary Information
Year Ended June 30,1999
TABLE OF CONTENTS
Independent Auditors’ Report
Combined Balance Sheet - Governmental Fund Type and Account Group
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds
- Notes to Financial Statements
Required Supplementary Information
Supplementary Information:
Combining Balance Sheet - Debt Service Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds
Paae
1
3
4
5
10
11
12
AND C ERTl F I ED 1 PUBLIC ACCOUNTANTS
~~~~~
1100MAlN STREET, SUITE C
IRVINE, CALIFORNIA 92614
Fax (949) 263-5520
(949) 474-2020
Board of Directors Encina Financing Joint Powers Authority Carlsbad, California
Independent Auditors’ Report
We have audited the accompanying combined financial statements of the Encina Financing Joint Powers Authority (the Authority) as of and for the year ended June 30, 1999, as listed in the accompanying table of contents. These combined financial statements are the responsibility of the Authority’s management. Our responsibility is to express an opinion on these combined financial statements based on our audit.
,-
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of the Encina Financing Joint Powers Authority as of June 30, 1999, and the results of its operations for the year then ended in conformity with generally
accepted accounting principles.
The supplementary information regarding the year 2000 issue presented on page 10 is not a required part of the basic financial statements, but is supplementary information required by the Governmental Accounting Standards Board. We did not audit and do not express an opinion on such information. Further, we did not apply to this information the procedures prescribed by professional standards because of the difficulty in ascertaining whether the information presented includes a sufficiently complete description of the year 2000 issue as it relates to the reporting gwernment. In addition, we do not provide assurance that the Encina Financing Joint Powers Authority is or will become year 2000 compliant, that the Encina Financing Joint Powers Authority’s year 2000 remediation efforts will be successful in whole or in part, or that parties with which the Encina Financing Joint Powers Authority does business are or will become year 2000 compliant.
MEMBERS OF AICPA AND CALIFORNIA SOCIElY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
Board of Directors Encina Financing Joint Powers Authority Page Two
Our audit was made for the purpose of forming an opinion on the combined financial statements taken as a whole. The supplementary information listed in the accompanying table of contents is presented for purposes of additional analysis and is not a required part of the combined financial statements of the Encina Financing Joint Powers Authority. Such information has been subjected to the auditing procedures applied in the audit of the combined financial statements and, in our opinion, is fairly stated in all material respects in relation to the combined financial statements taken as a whole.
&#/-/As-*&& 4d* A. 4
September 10, 1999
2
ENCINA FINANCING JOINT POWRS AUTHORITY
Combined Balance Sheet- Governmental Fund Type and Account Group
June 30,1999
Assets
Governmental Fund Type
Debt Service
Investments held by trustee (note 2) $ 1,607,320 Interest receivable 47,73 1
Amount available in debt service funds
for retirement of revenue bonds -
Amount to be provided for retirement of revenue bonds -
- Installment sale receivable (note 3) 17,245,000
Total assets
Liabilities and Fund Balances
Liabilities:
- Revenue bonds payable (note 3) $ - Deferred revenue (note 3) 17.245.000
Total liabilities 17,245,000
Fund balances: - Reserved for debt service (note 5) 1,655,05 1
Total hnd balances 1,655,051
Total liabilities and fund balances $1 8.900,05 1
Account Group General Long-Term Totals Debt memorandum Only)
- 1,607,320 \ - 47,73 1 - 17,245,000
1,655,05 1 1,655,OS 1
15,589.949 15,589,949
17.245.000 36,145,051
17,245,000 17,245,000 17,245,000 -
17,245,000 34,490,000
1.655.051
- 1.655.05 1
17.245,OOO 36.145,OS 1
See accompanying notes to financial statements.
3
ENCINA FINANCING JOINT POWERS AUTHORITY
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds
Year Ended June 30,1999
Debt Service
Revenues: Installment payments from members Interest on investments
Total revenues
Expenditures: Debt service: Principal Interest
Total expenditures
Excess (deficiency) of revenues over (under) expenditures
Other financing sources (uses): Operating transfers in Operating transfers out
Total other financing sources (uses)
Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses
Fund balances at beginning of year
Fund balances at end of year
$1,460,402 1 15,274
1,575.676
7 15,000 870.897
1,585,897
(10,221)
115,129
(1 15,129)
-
(1 0,221)
1,665,272
$1,655,051
See accompanying notes to financial statements.
4
ENCINA FINANCING JOINT POWRS AUTHORITY
Notes to Financial Statements
Year Ended June 30,1999
(1) Summary of Significant Accounting: Policies
The accounting policies of the Authority conform to generally accepted accounting principles as applicable to governmental units. The following is a summary of the more significant policies:
(a) Description of Reporting: Entity
The Encina Financing Joint Powers Authority (the Authority) was created on February 1, 1989 by the Buena Sanitation District, the City of Carlsbad, the Leucadia Water District, and the City of Vista. The purpose of the Authority was to issue revenue bonds in order to acquire additional capacity for the Encina Water Pollution Control Facility (Facility) and to finance any other authorized costs. The Authority is governed by a Board of Directors which consists of one director appointed by each member. Action can be taken at any meeting of the Board by the vote of any three directors. The Authority is not subject to federal or state income taxes. From time to time, the Authority will issue debt on behalf of those members wishing to participate in the financing.
(b) Fund Accounting
The basic accounting and reporting entity is a “fund.” A fund is defined as an independent fiscal and accounting entity with a self-balancing set of accounts, recording resources, related liabilities, obligations, reserves and equities segregated for the purpose of carrying out specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.
The accounting records of the Authority are organized on the basis of funds and an account group classified for reporting purposes as follows:
Governmental Funds
The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, general long-term debt, principal, interest and related costs.
Account Group
The General Long-Term Debt Account Group is used to establish accountability for the Authority’s general long-term debt. It is used to account for all long-term obligations of the Authority.
5
ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(c) Measurement Focus and Basis for Accounting
Governmental fund types are accounted for on an “expendable” measurement focus. Accordingly, only current assets and current liabilities are generally included on their balance sheets, and the reported fund balance provides an indication of available, spendable resources. Operating statements for governmental fund types report increases (revenues) and decreases (expenditures) in available spendable resources.
Governmental fund types use the modified accrual basis of accounting. Revenues are recognized when susceptible to accrual (i.e., both measurable and available). Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues that are accrued include interest income.
Governmental fund expenditures are recognized when the liability is incurred except for principal and interest on long-term debt, which is recognized when due.
(d) Budgets
The Authority does not adopt an annual budget, therefore, no budgetary
comparisons are presented.
(e) 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 on
investments reported for that fiscal year. Interest on 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
ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
/2) Investments Held BY Trustee
Authority for Investments
The Trust Agreement by and among State Street Bank and Trust Company of California, as Trustee, and the Authority dated February 1, 1997 authorizes the trustee to invest in U.S. Treasury Securities, U.S. Agency Securities, interest-bearing demand or time deposits, money market funds rated AAAm, AAAm-G or better by Standard & Poor’s Corporation, commercial paper rated A-l+ by Standard and Poor’s Corporation and P-1 by Moody’s Investors Service with original maturities of not more than 270 days, bankers acceptances rated A-1 or A-l+ by Standard & Poor’s Corporation and P-1 by Moody’s Investors Service with maturities of not more than 360 days, certain municipal obligations, as defined in the Trust Agreement, and investment agreements approved by
AMBAC Indemnity Corporation with notice to Standard and Poor’s.
Classification of Investments bv Credit Risk
As defined in Governmental Accounting Standards Board Statement No. 3, investments in securities are categorized in the following manner:
Category 1 - Investments that are insured or registered, which are held by the Authority or its agent in the Authority’s name.
Category 2 - Uninsured and unregistered investments, for which the securities are held 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 held
by the counterparty’s trust department or its agent, but not in the Authority’s name.
As of June 30, 1999, the Authority had $730 invested in mutual funds and $1,606,590 invested in a guaranteed investment contract which are not categorizable by credit risk.
J3) Wastewater Revenue Bonds
In February 1997, the Authority issued Wastewater Revenue Refunding Bonds, 1997 Series A to refund the remaining balance of outstanding Revenue Bonds, 1989 Series A bonds. The 1997 Refunding Bonds bear interest with rates ranging from 4.0% to 5.5%.
7
ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
J3) Wastewater Revenue Bonds. (Continued)
The following is a table of the outstanding balance owed on the 1997 Refunding Bonds as of June 30,1999:
Installment Approximate - Member Balance Share
City of Carlsbad $10,250,000 59.44% Leucadia Water District 6,995,000 40.56%
$17.245.000 -
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,
2000 2001 2002 2003 2004 2005-2009 201 0-2014 2015
$ 1,586,697
1,582,328 1,577,067 1,575,053 7,878,768 7,824,622 1.564.078
1,585,716 -
25,174,329
Less amounts representing interest (7,929,329)
Outstanding balance $17.245,000
8
ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
(3) Wastewater Revenue Bonds, (Continued)
The following is a summary of changes in the general long-term debt of the Authority for the year ended June 30,1999:
Balance at Balance at July 1, 1998 Additions Reductions June 30. 1999
Wastewater Revenue Bonds $17,960,000 - 715,000 17,245,000
(4) Prior Year Defeasance of Debt
In prior years, the Authority defeased certain revenue bonds by placing the proceeds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the Authority’s financial statements. On June 30, 1999, $28,430,000 of these defeased bonds were outstanding. The bonds will be called in full on August 2, 1999.
(5, Reserves for Debt Service
The reserves for debt service represent resources legally restricted to the payment of general long-term debt principal and interest maturing in future years.
9
REOUIRED SUPPLEMENTARY INFORMATION
ENCINA FINANCING JOINT POWERS AUTHORITY
Required Supplementary Information
Year ended June 30,1999
Risk Mitigation for the Year 2000 Issue
The Authority is in the remediation stage of evaluating its computer systems and other equipment that may contain embedded chips to ascertain which of these might be impacted by a failure to properly recognize and process transactions dated on or after January 1, 2000. As of June 30, 1999, the Authority had no significant unexpended contracts with other parties to replace or upgrade its computer systems and other equipment to reduce the risk of year 2000 difficulties. Additional amounts may be expended for the Authority’s year 2000 assessment, remediation, and testing activities, as well as amounts that may need to be expended after January 1, 2000 to correct problems not previously detected and corrected by the Authority. Because of the unprecedented nature of the year 2000 issue, it is not possible to provide
assurances that the Authority has or will achieve complete year 2000 compliance, even after
completing all planned year 2000 corrective actions and related testing. Nor can the Authority
determine the effect, if any, on Authority operations should entities external to the Authority
(other governments, significant vendors, suppliers, service providers, customers, taxpayers,
businesses, etc.) fail to achieve year 2000 compliance in a timely manner. An audit is not
designed to substantiate the assertions of management with respect to this issue or to evaluate the
adequacy of management’s plans with respect to this issue.
c
SUPPLEMENTARY INFORMATION
Assets
ENCINA FINANCING JOINT POWERS AUTHORITY
Debt Service Funds
Combining Balance Sheet
June 30,1999
City of Carlsbad
Debt Payment Reserve
Investments held by trustee $ 23 5 954,169 Interest receivable - 28,334 Installment sale receivable 10,250.000
Total assets $10.250.235 982.503
Liabilities and Fund Balances
Liabilities:
Fund balances: Deferred revenue $10,250,000
Reserved for debt service 23 5 982.503
Total liabilities and fund balances $1 0,250,235 982,503
Leucadia County Water District
Debt Payment Reserve Total
32 652,884 1,607,320 - 19,397 47,73 1 6,995.000 - 17,245,000
6.995.032 672,28 1 18,900.05 1
- 6,995,000 17,245,000
32 672,281 1,655.051
6,995.032 672,28 1 1 8,900,05 1
11
ENCINA FINANCING JOINT POWERS AUTHORITY Debt Service Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Year Ended June 30, 1999
Revenues: Installment payments from members Interest on investments
Total revenues
Expenditures: Debt service: Principal Interest
Total expenditures
Excess (deficiency) of revenues over (under) expenditures
City of Carlsbad
Debt Payment
$868,269
1.63 8
869.907
425,000
517,671
942.671
(72.764)
Other financing sources (uses): Operating transfers in 68,152
Operating transfers out (73)
Total other financing sources (uses) 68,079
Excess (deficiency) of revenues and other financing sources over (under) expenditures and
other financing uses (4,685)
Fund balances at beginning of year 4,920
Fund balances at end of year $ 235
Reserve
68.07 1
68,071
- -
68.071
73
(68.152)
(68,079)
(8)
982.5 11
982,503
Leucadia Countv Water District
Debt Payment
592,133 -
592,133
290,000
354.247
644.247
(52.1 14)
46,904
46,904
(5,210).
5,242
32
Reserve Total
- 1,460,402
46,586 1 16,295
- 46,586 1.576.697
- 7 15,000 - 871,918
-.. 1,586,918
46,586 (10.221)
-
115,129
(46.904) (1 15,129)
(46.904) -
(318) (10,221) -
672,599 1,665,272
672.281 1,655.05 1 -
12
CARCSBAD REDEVELOPMENT AGENCY
Component Unit Financial Statements
Year Ended June 30,1999
(With Independent Auditors’ Report)
CERTIFIED PUBLIC ACCOUNTANTS
CONFVDW ASS 0 CIATES, L.L.p.
CARLSBAD REDEVELOPMENT AGENCY
Component Unit Financial Statements
Year Ended June 30,1999
TABLE OF CONTENTS
Page
Financial Section:
Independent Auditors' Report
Component Unit Financial Statements:
Combined Balance Sheet - All Governmental Fund Types and Account Groups
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Special Revenue and Debt Service Funds
Notes to Component Unit Financial Statements
Required Supplementary Information
Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
1
4
5
14
15
c
CERTIFIED PUBLIC ACCOUNTANTS
1100 MAIN STREET, SUITE C ASSOCIATES, L.L.p IRVINE, CALIFORNIA 92614
CONRAD-
(949) 474-2020
F~x (949) 263-5520
The Board of Commissioners Carlsbad Redevelopment Agency
Carlsbad, California
INDEPENDENT AUDITORS’ REPORT
We have audited the accompanying financial statements of the Carlsbad Redevelopment Agency, a component unit of the City of Carlsbad, as of and for the year ended June 30, 1999, as listed in the table of contents. These component unit financial statements are the responsibility of the management of the Carlsbad Redevelopment Agency. Our responsibility is to express an opinion on these component unit financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the component unit financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the component unit financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall component unit financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the component unit financial statements referred to above present fairly, in all material respects, the financial position of the Carlsbad Redevelopment Agency at June 30, 1999, and the results of operations for the year then ended, in conformity with generally accepted accounting principles.
The supplementary information regarding the year 2000 issue presented on page 14 is not a required part of the basic financial statements, but is supplementary information required by the Governmental Accounting Standards Board. We did not audit and do not express an opinion on such information. Further, we did not apply to this information the procedures prescribed by professional standards because of the difficulty in ascertaining whether the information presented includes a sufficiently complete description of the year 2000 issue as it relates to the reporting government. In addition, we do not provide assurance that the Carlsbad Redevelopment Agency is or will become year 2000 compliant, that the Carlsbad Redevelopment Agency’s year 2000 remediation efforts will be successful in whole or in part, or that parties with which the Carlsbad Redevelopment Agency does business are or will become year 2000 compliant.
In accordance with Government Auditing Standards, we have also issued a report dated
September 28, 1999 on our consideration of the Carlsbad Redevelopment Agency’s internal control over financial reporting and our tests of its compliance with certain provision of laws, regulations, contracts and grants.
September 28, 1999
1
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
CARLSBAD REDEVELOPMENT AGENCY
Combined Balance Sheet - All Governmental Fund Types and Account Groups
Assets and Other Debits
Cash and investments (note 3) Accounts receivable Loan receivable Taxes receivable Interest receivable Prepaid expenditures Amount available in debt service fund Amount to be provided for retirement of general long-term debt
Total assets and other debits
Liabilities and Fund Balances
Liabilities: Accounts payable Accrued expenses Deposits payable Deferred revenue Advances from the City of Carlsbad (note 5) Bonds payable (note 5)
Total liabilities
Fund balances (note 7): Reserved for loan receivable Reserved €or prepaid expenditures Reserved for debt service Reserved for encumbrances Unreserved: Designated for future debt service Designated for approved capital projects Designated for continuing appropriations Undesignated
Total fund balances
Total liabilities and fund balances
June 30,1999
Governmental Fund Types Account Group
Special
Revenue
$1,603,85 1
2,732,414 8,9 15 84 509
Debt
Service
92 1,765
35,659 337 -
$4.345.773
$- 4,115
957,761
-
4,115
2,732,414 509
-
-
1,608.735
4,341,658
$4,345,773
~~
-
869,000
88,761
957.761
957,761
General Totals
Capital Long-Term JMemorandum Only)
Proiects - Debt 1999 - 1998 -
2,493,486 5,O 19,102 5,039,637 95,571 95,57 1 72,979 2,732,414 2,409,933 44,574 54,784 28,657 29,078 30,505 6,741 7,250 7,8 12 957,761 957,761 1,146,832
24,458,399 24,458.399 23,985.486
2,624,455 25.416.160
10,386 49,570 53,685 27,743 9,323 9,323 323 29,800 29,800 29,800
10,956,160 10,956,160 10,392,3 18 14.460.000 14,460.000 14,740,000
88.693 25,416.160 25.508.968 25,200.570
2,732,414 2,409,933 6,74 1 7,250 7,812 869,000 869,000 28,179 28,179 19,413
- 88,76 1 277,832
682,711 682,7 1 1 1,988,720
1,818,13 1 1,818,13 1 301,034 1,608,735 1.673.654
2.53 5.762 7.835.1 8 1 7.547.398
2,624.455 25,416,160 33.344.149 32,747,968
See accompanying notes to component unit financial statements.
2
CARLSBAD REDEVELOPMENT AGENCY
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types
Year Ended June 30,1999
c
Totals Special Debt Capital memorandum Onlv) Revenue Service Projects 1999 1998
Revenues: Property tax increment Charges for services Income from property and investment Miscellaneous
Total revenues
Expenditures: Current: General government Community development Capital outlay Debt service: Principal Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over (under) expenditures
Other financing sources (uses): Operating transfers in Operating transfers out Proceeds of advances from the City of Carlsbad
Total other financing sources (uses)
Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses
$ 311,462 1,246,185 - 1,557,647 - - 153,613 153,613
25,553 43,332 115,038 183,923 178 - 624 802
337,193 1,289,517 269,275 1,895,985
5,550 15,262 418,196 439,008 75,135 - - 75,135 - - 10,733 10,733
- 304,921 - 304,921 - 1,367.168 - 1,367.168
80.685 1,687.351 428.929 2.196,965
256,508 (397,834) (159,654) (300.980)
- - 380,000 380,000 - (3 80,000) - (380,000)
- 588.763 - 588,763
- 208.763 380.000 588.763
256,508 (189,071) 220,346 287,783
Fund balances at beginning of year 4,085.150 1.146,832 2.315,416 7,547,398
Fund balances at end of year $4,341.658 957.761 2,535.762 7.835.181
1,5 10,484
12 1,261
5 18,863
6,612
2.157.220
400,842 65,186 536,536
288,394
1,376.101
2,667,059
(509,839)
360,000
(360,000)
579.462
579,462
69,623
7,477,775
7,547.398
r
See accompanying notes to component unit financial statements.
3
_-
e
CART.,SBAD REDEVELOPMENT AGENCY
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Special Revenue and Debt Service Funds
Year Ended June 30,1999
Special Revenue Debt Ser Variance- Over Budget Actual wnder) Budget -
Revenues: Property tax increment $ 302,500 311,462 8,962 1,200,000 1,246,l
Interest 80,000 25,553 (54,447) 75,000 43,: - 178 Miscellaneous 178 - -
- Total revenues 382,500 337,193 (45,307) 1,275,000 1,289,!
Expenditures:
Current:
General government 5,550 5,550 - 26,000 15,:
Principal - - - 302,000 304,! Interest and fiscal charges - - - 1.380.763 1.367.1
Community development 144,892 75,135 (69,757) - -
Debt service:
Total expenditures 150.442 80.685 (69.757) 1.708.763 1.687.:
Excess (deficiency) of
revenues over (under) expenditures 232.058 256.508 24.450 (433,763) (397,t
Other financing sources (uses): Operating transfers out - - - (380,000) (380,(
from the City of Carlsbad - - - 588,763 588,;
sources (uses) - - - 208,763 208,;
Proceeds of advances
- Total other financing
Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 232,058 256,508 24,450 (225,000) (1 89,(
Fund balances at beginning of year 4,085.150 4,085,150 - 1.146.832 1.146J
Fund balances at end of year $4,317.208 4,341,658 24,450 921.832 957,; - See accompanying notes to component unit financial statements.
4
ice Variance- Over d (Under)
85 46,185
32 (31,668)
17 14.517
- -
-
62 (10,738) -
21 2,921 68 (13,595)
51 (21.412)
34) 35,929
00) -
63-
63-
71) 35,929
32-
61 35.929 -
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
Year Ended June 30,1999
.-
(1) Organization and Summarv of Significant Accounting Policies
The Carlsbad Redevelopment Agency (Agency) was established in July 1976 with the adoption of Ordinance No. 1191 by the Carlsbad City Council pursuant to the California Community Redevelopment Law, now codified as Part 1, Division 24, of the State of California Health and Safety Code. The Agency has the broad authority to acquire, rehabilitate, develop, administer, and sell or lease property. The Agency is not subject to federal or state income taxes.
The principal objectives of the Agency are to eliminate blighted influences within the “Village Area” of the City of Carlsbad (City), stimulate and attract private investment, generate added employment through increased specialty goods and services, and expand the City’s sales tax revenue.
The Agency is an integral part of the reporting entity of the City. The funds and account group of the Agency have been included within the scope of the general purpose financial statements of the City because the City Council is the governing board over the
operations of the Agency. Only the funds and account group of the Agency are included herein; therefore, these financial statements do not purport to represent the financial position or results of operations of the City of Carlsbad, California.
The accounting policies of the Agency conform to generally accepted accounting principles as applicable to governmental units. The following is a summary of the more significant policies:
(a) Basis of Presentation
The accounts of the Agency are organized on the basis of funds and an account group, each of which is considered to be a separate accounting entity. The operations of each fund and account group are accounted for by providing a
separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues, and expenditures. The various funds and account group are summarized by type in the financial statements. The fund types and account group used by the Agency are as follows:
GOVERNMENTAL FUND TYPES
Governmental funds are used to account for the Agency’s expendable financial resources and related liabilities. The measurement focus is upon determination of
changes in financial position. The following are the Agency’s governmental fund
types:
5
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
.-
J1) Organization and Summary of Significant Accounting Policies. (Continued)
Special Revenue Fund
Special revenue fund is 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 specified purposes.
Debt Service Fund
Debt service fund is used to account for the accumulation of resources for, and payment of, general long-term debt principal, interest and related costs.
Capital Proiects Fund
Capital projects fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities.
GENERAL LONG-TERM DEBT ACCOUNT GROUP
This account group is used to establish accounting control and accountability for the Agency’s general long-term debt. This account group is used to account for all long-term obligations of the Agency.
(b) Measurement Focus and Basis for Accounting
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 modified accrual basis of accounting is utilized by the governmental fund types. Revenues are recognized 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.
Revenues that are accrued include the tax increment on real property taxes and
interest income.
c
Real property taxes are levied on October 15 against owners of record at January 1. The taxes are due in two installments, on November 1 and February 1, and become delinquent after December 10 and April 10, respectively. Tax liens attach
6
c
c
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(1) Organization and Sumrnw of Significant Accounting Policies. (Continued)
annually as of 12:Ol a.m. on the first day of January in the fiscal years for which the taxes are levied. Under the provisions of NCGA Interpretation 3, property tax revenue is recognized in the fiscal year for which the taxes have been levied, provided it is collected within 60 days of the end of the fiscal year.
Governmental fund expenditures are recognized when the liability is incurred, except for principal and interest on long-term debt which is recognized when due.
(c) Encumbrances
Encumbrance accounting, under which purchase orders, purchase order requests,
contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary control in the governmental funds. Encumbrances outstanding at year-end do not constitute expenditures or liabilities, but are reported as reservations of fund balance for subsequent-year expenditures.
(d) Cash and Investments
The Agency participates in the pooled cash and investment fund of the City of Carlsbad. Pooled investments are stated at fair value. The Agency’s equity in the pooled cash is included in the financial statements as cash and investments. Interest earned as a result of the pooling is accrued in the cash and investment pool and allocated to the appropriate funds as part of the monthly interest allocation.
Investments are reported in the accompanying balance sheet at fair value, except for nonparticipating 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 included with income @om property and investments reported for that fiscal year. Income @om property and investments includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments.
(e) Comuensated Absences
Vacation pay is payable to employees at the time used or upon termination of employment. The cost of accumulated vacation expected to be paid in the next 12 months is recorded as a fund liability; currently no amounts are expected to be paid after 12 months.
c 7
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(1) Organization and Summary of Significant Accounting Policies. (Continued)
(0 Total Columns
Total columns on the accompanying combined financial 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. Such data is not comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
(2) Budgetary Data
The budget for the Agency is established by the City of Carlsbad. The City Manager is authorized to make transfers of appropriated amounts from one department to another within a fund. The legal level of budgetary control is at the fund level. Revisions that alter the total appropriations of any fund must be approved by the City Council with the exception of budget adjustments which involve offsetting revenues and expenditures. The City Manager is authorized to increase or decrease an appropriation for a specific purpose where the appropriation is offset by unbudgeted revenue which is designated for said
specific purpose. Quarterly budget reviews are conducted each year and any major changes to the adopted budget are approved by the City Council at that time.
P
Budgets are adopted on the modified accrual basis, except that encumbrances are treated as budgeted expenditures in the year purchases are committed. Expenditures may not exceed budgeted appropriations at the fund level. Unencumbered appropriations lapse at year-end. Annual budgets are adopted for the special revenue and debt service funds.
8
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
3 ) Cash and Investments
The Agency participates in the pooled cash fund of the City.
c
Authority for DeDosits and Investments
The Agency’s investment policy and state statutes authorize the Agency 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; mediwn-term corporate notes with a maximum five-year maturity rated in the two top rating categories and not to exceed 30% of the portfolio; money market funds whose portfolios consist of one or more of the foregoing investments; a sweep account and the State Treasurer’s investment pool.
State statutes require that all deposits be insured or collateralized. Depositories holding public funds on deposit are required to maintain collateral in the form of a pool of securities with the agent of the depository having a market value of at least 10 to 50 percent in excess of the total amount of all public funds on deposit.
Classification of Investments bv Credit Risk:
As defined in Governmental Accounting Standards Board Statement No. 3, the Agency’s investments in securities are categorized in the following manner:
Category 1 - Investments that are insured or registered, which are held by the Agency or its agent in the Agency’s name.
Category 2 - Uninsured and unregistered investments, for which the securities are held by the counterparty’s trust department or agent in the Agency’s name.
Category 3 - Uninsured and unregistered investments, for which the securities are held by the counterparty or by its trust department or agent, but not in the Agency’s name.
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CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(3) Cash and Investments, (Continued)
At June 30, 1999, the Agency had the following investments which are not categorizable by credit risk:
Investment
carrying Amount/ Market Value
Investments held by Agency not subject to categorization: Investment in State of California Pooled Investment Account $2,223,697 Investment in City’s pooled cash fund 2,795,403
Investment in mutual fimds 2 Investment held by fiscal agent not subject to categorization:
Total investments $5.019.102
The Agency is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the Agency’s investment in this pool is reported in the accompanying financial statements at amounts based upon the Agency’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state fimds, and floating rate securities issued by federal agencies, govermnent- sponsored enterprises, and corporations.
/4) Pension Plan
The Agency’s employees are included in the City’s pension plan which is administered by the California Public Employees Retirement System (PERS). PERS is an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for participating public entities within the State of California.
10
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
_-
J4) Pension Plan. (Continued)
All full-time employees are eligible to participate as members of the PERS. Benefits vest after an employee has been a member of the plan for five years. Employees are eligible to retire after age 50 with 5 years of credited service. Annual retirement benefits are determined based on age at retirement, the length of membership service and the amount of earnings based on the highest twelve consecutive months average. The PERS also provides death and disability benefits. These benefit provisions and all other
requirements are established by state statute.
Employees are required to make contributions equaling 7% of gross pay. This is paid by the City for the benefit of the employees in lieu of salary. The City is also required to contribute the remaining amounts necessary to fund the benefits for its members, using the actuarial basis recommended by the PERS actuaries and actuarial consultants and adopted by the PERS Board of Administration.
Additional disclosures required by Governmental Accounting Standards Board Statement No. 5 are not available for the Agency as a separate entity. This information for the City’s reporting entity is presented in the Comprehensive Annual Financial Report of the City of Carlsbad.
(5, Long-Term Debt
The following is a summary of changes in long-term debt for the year ended June 30, 1999:
Principal Principal Balance at Additional Balance at July 1, 1998 Obligations Deletions June 30. 1999
Advances from the City of Carlsbad $10,392,318 588,763 (24,921) 10,956,160
Bonds payable 14,740,000 - (280.000) 14,460.000
Total $25,132,318 588,763 (304,921) 25,416,160
Since activation of the Redevelopment Agency in July 1976, the City has advanced the Agency monies for approved expenditures. Advances from the City bear interest equal to the City’s interest rate received on pooled investments. There is no stated maturity date.
11
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(5) Low-Term Debt, (Continued)
On August 15, 1993, the Agency issued $15,495,000 in tax allocation bonds with an average interest rate of 5.3% to finance redevelopment activities within the Village
Redevelopment Project Area and to advance refund $11,185,000 of outstanding 1988 series tax allocation bonds with an average interest rate of 7.3%. These bonds were called in full on November 1, 1997.
Debt service requirements to maturity for the bonds, including sinking fund payments, are as follows:
2000
2001
2002
2003
2004 Subsequent to 2004
$ 1,043,390
1,042,77 1
1,046,234
1,043,777
1,045,403
20,740,066
25,961,641
Less amounts representing interest
Bonds payable
(1 1,501.641)
(6) Obligations Under Operating Leases
In June 1988, the 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 lease as of June 30, 1999 are:
2000
200 1 2002
2003
2004 Subsequent to 2004
$ 62,250
65,985 69,944
74,140
78,589 364.425
Total minimum future rental payments $715.333
12
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(7) Fund Balances
Reserves for the loan receivable and prepaid expenditures are established to show that certain assets are already committed for other purposes and are not available for discretionary expenditures.
Reserve for debt service represents resources legally restricted to the payment of general long-term debt principal and interest maturing in future years.
Reserve for encumbrances represents commitments related to unperformed contracts for services and undelivered goods.
Unreserved-undesignated balances represent the fund balance remaining after reduction for reserved and designated fund balances.
13
CARLSBAD REDEVELOPMENT AGENCY
Required Supplementary Information
Year ended June 30,1999
Risk Mitigation for the Year 2000 Issue
The City of Carlsbad (of which the Carlsbad Redevelopment Agency is a component unit) is in the remediation stage of evaluating its computer systems and equipment containing embedded chips to ascertain which of these might be impacted by a failure to properly recognize and
process transactions dated on or after January 1, 2000. As of June 30, 1999, the unexpended
portion of contracts entered into by the City with various vendors to replace or upgrade its computer systems and other equipment to reduce the risk of year 2000 difficulties was approximately $19,600. Additional amounts may be expended for the City’s year 2000 assessment, remediation, and testing activities, as well as amounts that may need to be expended after January 1, 2000 to correct problems not previously detected and corrected by the City. Because of the unprecedented nature of the year 2000 issue, it is not possible to provide assurance that the City has or will achieve complete year 2000 compliance, even after completing all planned year 2000 corrective actions and related testing. Nor can the City determine the effect, if any, on City operations should entities external to the City (other governments, significant vendors, suppliers, service providers, customers, taxpayers, businesses, etc.) fail to achieve year 2000 compliance in a timely manner. An audit is not designed to substantiate the assertions of management with respect to this issue or to evaluate the adequacy of management’s plans with respect to this issue.
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r
14
CERTIFIED PUBLIC ACCOUNTANTS
1100 MAIN STREET, SUITE C ASSOCIATES, L.L.E IRVINE, CALIFORNIA 92614
CONRAD-
The Board of Commissioners Carlsbad Redevelopment Agency Carlsbad, California
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WTH GOVERNMENTAUDITING STANDARDS
We have audited the financial statements of Carlsbad Redevelopment Agency as of and for the year ended June 30, 1999, and have issued our report thereon dated September 28, 1999. We conducted our audit in accordance with generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the financial statements of the Carlsbad Redevelopment Agency are free of material misstatements, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. Such provisions included those provisions of laws and regulations identified in the Guidelines for Compliance Audits of California Redevelopment Agencies, issued by the State Controller and as interpreted in the Suggested Auditing Procedures for Accomplishing Compliance Audits of California Redevelopment Agencies, issued by the Governmental Accounting and Auditing Committee of the California Society of Certified Public Accountants. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
(949) 474-2020
F~x (949) 263-5520
In planning and performing our audit, we considered the Carlsbad Redevelopment Agency's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses.
This report is intended for the information of management and the State Controller and is not intended to be and should not be used by anyone other than these specified parties.
&J4m/&dPek!! 4k.F
September 28, 1999
IS
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
CITY OF CARLSBAD
PUBLIC IMPROVEMENT CORPORATION
Financial Statements and Supplemental Data
Year Ended June 30,1999
(With Independent Auditors’ Report Thereon)
c
c
CERTIFIED PU I3 L I C ACCOUNTANTS
C0NFW.D- ASSOCIATES, L.L.E
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Financial Statements and Supplemental Data
Year Ended June 30,1999
TABLE OF CONTENTS
Independent Auditors’ Report
Combined Balance Sheet - Governmental Fund Type and Account Group
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds
Notes to Financial Statements
Required Supplementary Information
Supplemental Data:
Combining Balance Sheet - Debt Service Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Debt Service Funds
Pane
1
3
4
5
12
13
14
CERTIFIED PUB LlC ACCOUNTANTS
1100 MAIN STREET, SUITE C
IRVINE, CALIFORNIA 92614
CONRAD~~ ASS 0 CIATES, L.Lx
(949) 474-2020
F~x (949) 263-5520
Board of Directors City of Carlsbad Public Improvement Corporation Carlsbad, California
Independent Auditors’ Report
We have audited the accompanying component unit financial statements of the City of Carlsbad Public Improvement Corporation (the Corporation) as of and for the year ended June 30, 1999, as listed in the accompanying table of contents. These component unit financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these component unit financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the component unit financial statements referred to above present fairly, in all material respects, the financial position of the City of Carlsbad Public Improvement Corporation as of June 30, 1999, and the results of its operations for the year then ended in conformity with generally accepted accounting principles.
The supplementary information regarding the year 2000 issue presented on page 12 is not a
required part of the basic financial statements, but is supplementary information required by the
Governmental Accounting Standards Board. We did not audit and do not express an opinion on such information. Further, we did not apply to this information the procedures prescribed by professional standards because of the difficulty in ascertaining whether the information presented includes a sufficiently complete description of the year 2000 issue as it relates to the reporting governpent. In addition, we do not provide assurance that the City of Carlsbad Public Improvement Corporation is or will become year 2000 compliant, that the City of Carlsbad Public Improvement Corporation’s year 2000 remediation efforts will be successful in whole or in part, or that parties with which the City of Carlsbad Public Improvement Corporation does business are or will become year 2000 compliant.
!
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
Board of Directors City of Carlsbad Public Improvement Corporation Page Two
Our audit was made for the purpose of forming an opinion on the component unit financial statements taken as a whole. The combining financial statements listed in the accompanying table of contents are presented for purposes of additional analysis and are not a required part of the component unit financial statements of the City of Carlsbad Public Improvement Corporation. Such information has been subjected to the auditing procedures applied in the audit of the component unit financial statements and, in our opinion, is fairly stated in all material respects in relation to the component unit financial statements taken as a whole.
I/&'-/&@ekb, Ad. 4
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September 10, 1999
2
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Combined Balance Sheet - Governmental Fund Type and Account Group
June 30,1999
Governmental Account Fund Type Group
General Totals
Service Only) Debt Long-Term (Memorandum
Assets
Cash and investments held by the City (note 2) $ 165,797 - 165,797
Cash and investments held by trustee (note 2) 1,44 1,874 - 1,44 1,874
Net investment in direct financing lease (note 3) 9,849,922 - 9,849,922
Interest receivable 22,407 - 22,407 Amount available in debt service fund - 1,630,078 1,630,078
certificates of participation - 9.849.922 9.849.922 Amount to be provided for retirement of
Total assets $1 1,480,000 1 1.480,OOO 22,960,000
Liabilities and Fund Balances
Liabilities:
Deferred revenue $ 9,849,922 - 9,849,922 Certificates of participation payable (note 4) - 1 1.480,OOO 1 1,480,000
Total liabilities 9.849.922 1 1,480,000 21,329.922
Fund balances: Reserved for debt service (notes 4 and 6) 1,630,078 - 1,630.078
Total fund balances 1.630,078 - 1,630,078
Total liabilities and fund balances $1 1.480.000 1 1,480,000 22,960,000
See accompanying notes to financial statements.
3
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CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds
Year Ended June 30,1999
Debt Service
Revenues: Lease payments Interest on investments
Total revenues
Expenditures: Principal Interest Administrative expense
Total expenditures
Excess (deficiency) of revenues over (under) expenditures
Other financing sources (uses): Operating transfers in Operating transfers out
Total other financing sources (uses)
Excess (deficiency) of revenues
and other financing sources over (under) expenditures and other financing uses
Fund balances at beginning of year
Fund balances at end of year
See accompanying notes to financial statements.
4
$1,998,079 87.03 1
2,085,110
1,475,000
538,095 4,158
2,017.253
67,857
56,391
(56.391)
67,857
1,562,221
$1,630,078
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
Year Ended June 30,1999
(1) Organization and Summarv of Significant Accounting Policies
The City of Carlsbad Public Improvement Corporation (the Corporation) was organized on June 1, 1988 under the Nonprofit Public Benefit Corporation law for the purpose of financing and constructing certain improvements on the parcel of property known as Hosp Grove. The Corporation is not subject to federal or state income taxes.
The Corporation is an integral part of the reporting entity of the City of Carlsbad,
California (the City). The accounts of the Corporation have been included within the scope of the general purpose financial statements of the City because the City Council has financial accountability over the operations of the Corporation. Only the accounts of the Corporation are included herein; therefore, these financial statements do not purport to represent the financial position or results of operations of the City.
The accounting policies of the Corporation conform to generally accepted accounting principles as applicable to governmental units. The following is a summary of the more significant policies:
(a) Basis of Presentation
The accounts of the Corporation are organized on the basis of funds and an account group, each of which is considered to be a separate accounting entity. The operations of each fund and account group are accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues, and expenditures. The various funds and the account group are summarized by type in the financial statements. The fund types and the account group used by the Corporation are as follows:
GOVERNMENTAL FUND TYPE
The governmental fund is used to account for the Corporation’s expendable financial resources and related liabilities. The measurement focus is upon determination of changes in financial position. The following is the Corporation’s governmental fund type:
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.
GENERAL LONG-TERM DEBT ACCOUNT GROUP
c
This account group is used to establish accounting control and accountability for
the Corporation’s general long-term debt. It is used to account for all long-term obligations of the Corporation.
5
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
(1) Organization and Summary of Significant Accounting Policies, (Continued)
(b) Measurement Focus and Basis of Accounting
The governmental fund type is accounted for on a “spending” measurement focus. Accordingly, only current assets and current liabilities are generally included on its balance sheet, and the reported fund balance provides an indication of available, spendable resources. The operating statement for the governmental fund type report increases (revenues) and decreases (expenditures) in available, spendable resources.
The governmental fund type uses the modified accrual basis of accounting. Revenues are recognized 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. Revenues that are accrued include interest income.
c The governmental fund expenditures are recognized when the liability is incurred, except for principal and interest on long-term debt, which is recognized when due.
(c) Budgets
The Corporation does not adopt an annual budget, therefore, no budgetary comparisons are presented.
(d) 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 on investments reported for that fiscal year. Interest on investments includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments. -
(e) 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 balances in conformity with generally accepted accounting principles. Such data is not comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
6
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
(2) Cash and Investments
Authority for Investments
The Trust Agreement by and among the First Trust of California, as successor trustee, the Corporation and the City, dated June 1, 1988, authorizes the trustee to invest in Federal
Treasury Securities, Federal Agency Securities, interest-bearing demand or time deposits, obligations of U.S. corporations having assets in excess of $500,000,000 and carrying one of the three highest ratings by Moody’s and Standard and Poor’s Corporation, repurchase agreements, money market funds, commercial paper rated A-1 by Standard and Poor’s Corporation and P-1 by Moody’s Commercial Paper with original maturities of not more than 180 days, bankers acceptances with maturities of not more than 270 days, and tax-exempt obligations rate in one of the three highest ratings by Moody’s and Standard and Poor’s Corporation.
Classification of Deposits by Credit Risk
The following summary presents the amount of the Corporation’s deposits which are
fully insured or collateralized with securities held by the Corporation or its agent in the
Corporation’s name (Category l), those deposits which are collateralized with securities
held by the pledging financial institution’s trust department or agent in the Corporation’s
name (Category 2), and those deposits which are not collateralized or are collateralized
with securities held by the pledging financial institution or its trust department or agent
but not in the Corporation’s name (Category 3) at June 30, 1999.
Form of Deposit Categorv Bank Carrying - 1 - 2 - 3 Balance Amount
Deposits managed by fiscal agent:
Classification of Investment bv Credit Risk
As defined in Governmental Accounting Standards Board Statement No. 3, investments in securities are categorized in the following manner:
Category 1 - Investments that are insured or registered, which are held by the Corporation or its agent in the Corporation’s name.
Category 2 - Uninsured and unregistered investments, for which the securities are held by the counterparty’s trust department or agent in the Corporation’s name.
Category 3 - Uninsured and unregistered investments, for which the securities are held by the counterparty or by its trust department or agent, but not in the Corporation’s name.
Bank Investment agreements !$ - 1.399.5 12 1.399.512 1,399.512 -
7
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
As of June 30, 1999, the Corporation had $165,797 invested in the City of Carlsbad’s cash and investments pool and $42,362 invested in Federal Agency treasury money market mutual funds which are not categorizable by credit risk.
(3) Lease Agreements
Hosp Grove
r
Under the terms of a lease agreement dated June 1, 1988, the City has leased property known as Hosp Grove to the Corporation and the Corporation has leased back to the City the same property and all improvements constructed thereon. The Agreement requires the City to pay semiannual lease payments to the Corporation equal to the debt service requirements of the Certificates of Participation issued by the Corporation on June 1, 1988 (the Certificates). Under the terms of the lease agreement between the City and the Corporation, the City is required to make lease payments on January 15 and July 15 until the Certificates have been paid in full. In addition, the City must pay all taxes, assessments, insurance, maintenance and utilities on the property and its improvements. The lease expires on August 1, 2008 or upon the date of retirement of the Certificates. The lease has been accounted for as a direct financing lease.
Carlsbad Municipal Water District
Under the terms of a Lease Agreement dated September 1, 1997, the Carlsbad Municipal Water District (District) has leased the Project (which represents the additions, betterments, extensions and improvements of the Water System) to the Corporation and the Corporation has leased back to the District the same Project. All right, title and interest in each component of the Project shall vest in the District immediately upon execution and delivery of the Agreement. All revenues (which consists of all income, rents, rates, fees, charges and other monies derived from the ownership or operation of the Water System) are irrevocably pledged to the payment of the installment payments. The Agreement requires the district to pay semi-annual lease payments to the Corporation equal to the debt service requirements of the 1997 Water Revenue Certificates of Participation issued by the Corporation on September 1, 1997. Under the terms of the Lease Agreement between the District and the Corporation, the District is required to make lease payments on April 15 and October 15 until the Certificates have been paid in full. The lease expires on May 1,2004 or upon the date of retirement of the Certificates. The lease has been accounted for as a direct financing lease.
8
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
f4) Certificates of Participation
Hosp Grove
In prior years, the Corporation defeased Certificates of Participation, Series 1988 by placing the proceeds of Refunding Certificates of Participation, Series 1997 in an irrevocable trust to provide for all future debt service payments on the old Certificates of Participation. Accordingly, the trust account assets and the liability for the defeased Certificates of Participation are not included in the Corporation’s financial statements. All outstanding bonds were called during the current fiscal year and are considered defeased.
The Corporation issued the 1997 Certificates pursuant to a Trust Agreement by and among the Corporation, the City and the Trustee. The Certificates represent an undivided interest in the lease payments made by the City to the Corporation. The Certificates mature on August 1 of each year through 2008. The Corporation is required to maintain a debt service reserve of $659,500. As of June 30, 1999, the reserve balance was $675,000.
Debt service requirements to maturity for the Certificates are as follows:
Year ending June 30,
2000 200 1 2002 2003 2004 2005-2009
$ 758,803 748,655 752,285 754,350 754,800 3,759.077
7,527,970
Less amounts representing interest 1.452,970
Outstanding balance $6,075,000
Carlsbad Municipal Water District
In prior years, the Corporation defeased 1988 Certificates of Participation (previously issued by the Carlsbad Municipal Water District) by placing the proceeds of 1997 Water Revenue Certificates of Participation in an irrevocable trust to provide for all future debt service payments on the old Certificates of Participation. Accordingly, the trust account assets and the liability for the defeased Certificates of Participation are not included in the Corporation’s financial statements. All outstanding bonds were called during the 1997- 98 fiscal year and are considered defeased.
9
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
(4) Certificates of Participation, (Continued)
Carlsbad Municipal Water District, (Continued]
The Corporation issued the 1997 Certificates pursuant to a Trust Agreement by and among the Corporation, the Water District and the Trustee. The Certificates represent an undivided interest in the lease payments made by the Water District to the Corporation. The Certificates mature on May 1 of each year through 2004. The Corporation is required to maintain a debt service reserve of $740,000. As of June 30, 1999, the reserve balance was $746,844.
Debt service requirements to maturity for the Certificates are as follows:
Year ending June 30,
2000 200 1 2002 2003 2004
$1,222,450 1,227,650 1,220,010 1,2 19,860
1,226,700
6,116,670
Less amounts representing interest (71 1.670)
Outstanding balance $5,405.000
The following is a summary of changes in the general long-term debt of the Corporation for the year ended June 30,1999:
Balance at Balance at July 1, 1998 Additions Reductions June 30. 1999
Refunding certificates of participation, Series 1997 $ 6,595,000 - (520,000) 6,075,000
1997 Water revenue certificates of participation 6,360,000 - (955,000) 5,405,000
- $12,955,000 (1,475,ooo) 1 1,480,000
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CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
(5, Rate Covenants
The 1997 Water Revenue Certificates of Participation require 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.
J6) Fund Balances
The reserve for debt service represents resources legally restricted to the payment of general long-term debt principal and interest maturing in future years.
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REQUIRED SUPPLEMENTARY INFORMATION
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CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Required Supplementary Information
Year ended June 30,1999
Risk Mitigation for the Year 2000 Issue
The City of Carlsbad (of which the City of Carlsbad Public Improvement Corporation is a component unit) is in the remediation stage of evaluating its computer systems and other equipment that may contain embedded chips to ascertain which of these might be impacted by a failure to properly recognize and process transactions dated on or after January 1, 2000. As of June 30, 1999, the City had no significant unexpended contracts with other parties to replace or upgrade its computer systems and other equipment to reduce the risk of year 2000 difficulties. Additional amounts may be expended for the City’s year 2000 assessment, remediation, and testing activities, as well as amounts that may need to be expended after January 1, 2000 to correct problems not previously detected and corrected by the City. Because of the unprecedented nature of the year 2000 issue, it is not possible to provide assurances that the City has or will achieve complete year 2000 compliance, even after completing all planned year 2000 corrective actions and related testing. Nor can the City determine the effect, if any, on City operations should entities external to the City (other governments, significant vendors, suppliers, service providers, customers, taxpayers, businesses, etc.) fail to achieve year 2000 compliance in a timely manner. An audit is not designed to substantiate the assertions of management with respect to this issue or to evaluate the adequacy of management’s plans with respect to this issue.
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SUPPLEMENTAL DATA
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CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Combining Balance Sheet - Debt Service Funds
June 30,1999
Carlsbad Municipal Hosp Grove Water District
Lease Lease
Payment Reserve Payment Reserve - Total
Assets
Cash and investments held by the City $ 165,797 - - 165,797
Net investment in direct financing lease 5,2 12,995 - 4,636,927 9,849,922
Interest receivable 75 15,500 - 6.832 22,407
Cash and investments held by trustee 21,133 659,500 21,229 740,012 1,441,874
Total assets $5,400,000 675,000 4,658.1 56 746.844 1 1,480,000
Liabilities and Fund Balances
Liabilities:
Deferred revenue $5,212,995 4,636,927 9.849.922
Total liabilities 5,212.995 4.63 6,927 - 9,849.922
Fund balances: Reserved for debt service 187.005 675,000 2 1,229 746.844 1,630,078
Total fund balances 187,005 675,000 2 1,229 746.844 1.630.078
Total liabilities and fund balances $5,400,000 675,000 4,658,156 746.844 1 1,480,000
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CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Debt Service Funds
Year Ended June 30, 1999
Carlsbad Municipal Hosp Grove Water District Lease Lease
Payment Reserve Payment Reserve
Revenues: Lease payments Interest on investments
Total revenues
Expenditures: Principal Interest Administrative expenses
Total expenditures
Excess (deficiency) of revenues over (under) expenditures
Other financial sources (uses): Operating transfers in Operating transfers out
Total other financing sources (uses)
Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses
Fund balances at beginning of year
Fund balances at end of year
$800,000 1,198,079 - 1,998,079
15,500 1.087 40.894 87.03 1 29.550
829.5 50 15.500 1,199.166 40,894 2,085,110
520,000
273,400
4.158
797.558
3 1,992
15,500
15.500
47,492
139.513
- 955,000 - 1,475,000 - 264,695 - 538,095 - - 4.158
- 1,219.695 - 2.0 17,253
15,500 (20.529) 40,894 67,857
40,89 1 - 56,391
(1 5.500) - (40,891) (56.391)
(15.500) 40,891 (40.891) -
- 20,362 3 67,857
675,000 867 746.841 1,562,221
675,000 21.229 746,844 1.630.078
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