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HomeMy WebLinkAbout2002-09-10; City Council; 16886; Financial Results for Fiscal Year Ended 6/30/02CITY OF CARLSBAD -AGENDA BILL AB# 16,886 MTG. 09-10-02 CITY ATTY. FISCAL YEAR ENDED TITLE: FINANCIAL RESULTS FOR THE JUNE 30,2002 DEPT H$ DEPT. FIN RECOMMENDED ACTION: Accept the Financial Status Report for the fiscal year ended June 30,2002. ITEM EXPLANATION: The financial results for the General fund, the Water Operations fund, the Sewer Operations fund, and the Redevelopment Agency are presented in the attached report for the fiscal year ended June 30, 2002 (Exhibit 1). The 2001-02 fiscal year books are closed and the audit is under way. The Comprehensive Annual Financial Report (CAFR) is expected to be issued in December 2002. The financial results shown in this report for the General and Redevelopment funds are on a budgetary basis, which means the expenditures include encumbrances. In addition, interest income is presented on an amortized cost basis for all funds rather than at market value as required under generally accepted accounting principles. These adjustments will be made for presentation in the CAFR. The General fund ended the year with an available balance of $69 million. Revenues totaled $85.7 million, which were $526,000 above recent projections and $4.9 million higher than the previous year. Total expenditures (including transfers) at $72.2 million for the year were $12.2 million below the budget. The increase in revenue is primarily attributable to two factors, the continuation of a strong housing market (increased property taxes) and higher natural gas prices (increased franchise taxes). On the other hand, the effects of terrorism on tourism (lower transient occupancy taxes) and a third consecutive year of slower growth in Carlsbad (lower development related revenues) partially offset the increase in General fund revenues. The graph shows the effect of the stronger local economy and the strong housing market on General fund revenues during the past few years. The chart also reflects the slight leveling off of expenditures during the past couple of years. Although expenditures for general City services actually increased during the year by approximately $2.5 million, the amount transferred to the General Capital Construction fund for capital projects declined by $2.8 million. This was partially offset by a GENERAL FUND 1992 TO 2001 (In millions) 1993 1994 I995 1996 1997 I998 1999 2000 2001 2002 transfer to the Storm Water Protection fund of $1.9 million. Thus, the net increase shown in the graph is minimal. Any revenues collected in an amount greater than that spent will increase the General fund balance. During the 1999-2000 fiscal year, expenditures essentially equaled revenues as an $8.5 million transfer was made to the General Capital Construction fund during that year. I Page 2 of Agenda Bill # 16,886 In total, Capital Project funds expended $37.3 million on various projects throughout the City, and Enterprise funds expended $14.5 million on water, sewer and solid waste related projects. Some of the major capital projects that the City expended funds on during the year included: . . . . . . . . . . . . . . . . . . Alga Road median enhancements Design work and property acquisitions for the easterly extension of Poinsettia Lane Westerly extension of Cannon Road Widening and realignment of Rancho Santa Fe Road Easterly extension of Faraday Avenue Carlsbad Boulevard realignment study Easterly extension of Orion Street from El Camino Real to Faraday Avenue Poinsettia Lane railroad bridge widening Coastal Rail Trail design Design of the new Public Works Center Leo Carrillo Park construction Aviara Community Park master plan Construction of the South Carlsbad Village Storm Drain Construction of the Vista/Carlsbad trunk line Development of the new recycled water plant Phases II and 111 of the South Agua Hedionda Interceptor Encina Water Pollution Control Facility projects Work on numerous waterlines, pump stations, traffic signal installations and street maintenance projects throughout the City. The Water Operations fund had an operating income of $1.9 million for the year. Due to an than last year. The largest expenditure for the year was for purchased water, which was higher extremely dry year and a more accurate accrual at year-end, water sales were $1.6 million higher than last year by $860,000 from increased water usage. Sewer Operations had an annual operating loss of $143,000 for the fiscal year. Total revenues were higher than the previous year due to an increase in the customer base and a more accurate accrual at year-end. Expenditures were higher than the previous year due in large part to increased interdepartmental charges. Utility engineering costs are allocated through interdepartmental charges, and this increase is the result of a more accurate accounting of the Sanitation fund’s share of these costs. Revenues to the Redevelopment Agency total $1.6 million for the year ended June 30, 2002, which is $339,000 less than the prior year. The majority of the decrease in miscellaneous revenues is due to the expiration of lease agreements with Beach Sleep Furniture and the which decreased by $88,000, or 6%. Most of the decline can be attributed to the reassessment Carlsbad Unified School District. The Agency’s primary source of revenue is property taxes, of the Village Faire shopping center. Expenditures for the Agency were below budget by $1 19,000, as several projects were not started as of year-end. Additional information regarding the financial results for all of these funds is available in the attached report (Exhibit 1). I1 I1 I1 I1 I1 I1 Page 3 of Agenda Bill # 16,886 FISCAL IMPACT: The financial status of all City of Carlsbad funds can be found in the 2001-02 Comprehensive Annual Financial Report, which will be available in December 2002. EXHIBITS: 1. Financial Status Report for the fiscal year ended June 30, 2002. 3 EXHIBIT 1 Financial Status Report Prepared by the Finance Department June 30,2002 This report summarizes the City of Carlsbad's General fund revenues and expenditures through June 30, 2002. In addition, the financial status of the Water and Sanitation Enterprises and the Redevelopment Agency will be addressed. GENERAL FUND BALANCE The books have been closed for the fiscal year and the audit is underway. This report is for internal purposes only and the numbers shown are preliminary. Interest income is shown on an amortized cost basis and will be adjusted to market value as required under generally accepted accounting principles (GAAP) for presentation in the Comprehensive Annual Financial Report (CAFR). Revenues totaled $85.7 million, which was $526,000 above recent projections. Expenditures at $72 million were $12.2 million below budget for the year. TOPGENERALFUNDREVENUES FISCAL YEAR 2001-2002 UNRESERVED - UNDESIGNATED FUND BALANCE ~ ~~ ~ Taxes Budaetarv Basis Actual on a up the year with $60,908,347 $22.3 million in property tax revenues, an increase of 13% from fiscal year 2000-2001. According to the County of San Diego Assessor's Office reports, assessed values in Carlsbad increased 12.5% for fiscal year 2001-2002. (6,957,609 1994, property taxes are the top revenue generator in the General fund. 85,744,705 377.588 (64,822,184 (7,336,540 For the first time since fiscal Year 1993- 45,815 Taxes For the year, sales tax receipts finished up 2% over last year's collections. For sales occurring in the twelve months ended March 31, 2002 (the most recent data available) key gains 21.7 million) could be seen in auto sales, apparel stores, leasing, departmenfffumiture and appliance stores, and building materials. During the same period, key declines were seen in light industry, chemical products, restaurants, and service stations. The three largest economic segments in the City continue to be new auto sales, department stores and restaurants, with apparel stores closing in: together they generate 54% of the City's sales tax revenues. Even with the effects of September Ilth, sales tax revenues for the year grew, although not as much as originally forecasted. Sales in the City were helped by a couple of factors including 0% financing (and other incentives) offered by automobile manufacturers after September Ilth, and heavy discounting by department and apparel stores during the holiday season. Financial Status Report 2 7.75% to 7.5% came from the State’s share of the sales tax. The City has continued to receive its 1% share. P Transient Occupancv Tax ($8.5 million) - Transient occupancy taxes (TOT) are $736,000 lower than the previous fiscal year. The City’s two largest hotels have been hit hardest from the events of September 11, 2001, as conference related business has been curtailed sharply. These two hotels account for the decline in TOT revenues this year. The smaller local hotels have been able to weather the storm much better, since their predominant customers are the non-conference business traveler as well as local weekend travelers. On the bright side, excluding penalties and interest, TOT revenues in April and May 2002 were actually higher than TOT revenues in April and May 2001. This is the first time since June 2001 that this has happened. However, in June 2002, revenues once again dipped below figures for the same month in the previous fiscal year. Year-to-date TOT figures represent taxes collected through June 30, 2002. One new hotel opened this fiscal year, the Inns of America Suites. In December 2001, this 98-room hotel located % mile from the beach near Cannon Road and Avenida Encinas, became the City’s 31“ hotelhotel. Franchise Taxes ($7.5 million) - Franchise fees come from public utility sources such as SDG&E, trash collection franchises, and cable franchises conducting business within City limits. Franchise tax revenues are up franchise taxes paid by San Diego Gas & Electric (SDG&E). significantly from the previous year primarily from an increase in the annual SDG&E pays franchise taxes for the use of public land over which they transport gas and electric services. In addition, SDG&E also pays an ”in-lieu’’ franchise tax based on the value of gas and electricity transported on SDG&E lines but purchased from another source. The majority of “in-lieu’’ taxes collected is from Cabrillo Power, the operator of the Encina Plant. This “in-lieu’’ tax was put in place to capture the franchise taxes on gas and electricity that are transported using public lands, but which would not otherwise be included in the calculations for franchise taxes. The franchise taxes paid by SDG&E are up in total by 28%. Net electricity sales increased by 16%, while net gas sales increased by 64%. The “in-lieu” taxes are up 202% for the year. According to SDG&E, the increase in the price of natural gas and the increased power generated by the Encina power plant during the energy crisis are the primary reasons for the jump in both gas sales and the “in-lieu’’ taxes. Vehicle License Fees ($4.7 million) - Vehicle License Fees (VLF) have increased by $357,000 over 2000-2001 figures. VLF collected through June 30, 2002 represents transactions occurring through June 30, 2002. New car sales were extremely strong during the fourth calendar quarter of 2001. This increase in car sales helped to push the City’s VLF figures up by over 9% in January 2002, from the previous fiscal year. As new car sales have slowed down recently, the increase in the City’s VLF has dropped to 8%. Vehicle License Fees 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. Vehicle License Fees have increased due to the population growth in the City, increased new car sales, and the Statewide increase in VLF received. Registered vehicles include automobiles, trucks, trailers, and motorcycles. The Governor’s May Budget Revision includes a rollback to only a 25% reduction in VLF for residents of the State, which is the same level of reduction that was in place at the time Governor Davis took office. Under the current plan, this increase in tax will not affect the amount of revenue received by the City, but it will create higher taxes for residents of California. Currently, the Governor has kept his word to not reduce the 5 Financial Status Report 3 ~ ____ ~~ ~~ ~______ ~~ ~____ VLF revenues received by local governments. However, until the State budget is formally adopted, there are no assurances that the City’s future VLF will not be impacted by the State’s budget deficit. ______~ Development-Related Revenues ($3.9 million1 - Development-related revenues, which include building permits, planning fees, building department fees, and engineering fees, reflect a third consecutive year of slower growth in the Carlsbad building industry, as compared to the record- setting 1998-99 fiscal year. Only engineering related revenues showed any increases over the previous fiscal year. A large portion of the 127% increase in engineering revenues was derived from engineering plan check fees collected for development at the Villages of La Costa, Calavera Hills, Bressi Ranch, and Kelly Ranch, as well as a large condominium project by the Poinsettia train station and the new Pavilion at La Costa shopping center. The second most significant source of development-related revenue to-date is building permits, down 48%, as compared to fiscal year 2001. However, this exceeded estimated revenues by 8% for this fiscal year. For the fiscal year, 765 residential permits were issued, as compared to 1,823 permits issued last fiscal year. For the year, residential development was most active at the Terraces at Sunny Creek, Rancho Carrillo, Bayshore Condominiums, Arroyo Vista, and additional development in Aviara. In addition, there was an extensive amount of multi-unit development throughout the City during the year. Total commerciaVindustria1 building permits issued this year comprised 322,129 commercial and 67,638 industrial square feet. This compares to 81 1,336 commercial and 463,754 industrial square feet permitted last fiscal year. Some of the larger commercial projects permitted included the Emerald Lake Corporate Center, the Extended Stay America hotel, several projects in the industrial corridor of the City, and a new Sav-On Drug Store in the southeast corner of the City. Income From Investments and Property ($4.2 million) - For the year, income from investments and property is up $175,000 compared to the previous year. Although interest income is down 14%, or $532,000, for the year, income from the sale and rental of City-owned property is up 186% or $483,000. In addition, the portfolio management fee is now being reflected as part of the income from investments and property. Previously this was recorded as interdepartmental charges. Interest income is down due to the net effect of two factors. First, the City’s investments are currently recorded on an amortized basis, versus a fair market basis at this time last year. If both fiscal years were recorded on an amortized basis, interest income would have shown a 2% increase due to an increase in the average cash balance maintained in the current fiscal year. Secondly, the average yield on the Treasurer’s Pool for the year is down from 6.18% last year to 5.28% this year. Income from property rentals and sales is up primarily due to two events. First, the City sold a small portion of land in Macario Canyon to the developer of that area for $239,000, in order to accommodate the construction of Cannon Road. Secondly, the City is leasing back a portion of the Farmers building purchased at the end of December 2001. a, Increased by $140,000 over 2000-2001 figures. The City has continued their Business License Tax ($2.4 million) - Business license revenues have aggressive information and compliance program that was initiated in the previous fiscal year. Currently, there are 7,012 licensed businesses with the 2,047 of these businesses being home-based. City and of this figure, 4,865 of these businesses are located in Carlsbad, with Financial Status Report 4 InterdeDartmental Charcles ($2.2 million) - Interdepartmental charges are $16,000, or 1%, higher than last year. Interdepartmental charges are generated through engineering overhead charged to capital projects and miscellaneous interdepartmental expenses charged to funds outside of the General fund for services performed by departments within the General fund. In prior years, the Treasurer’s anagement fee was reflected as an interdepartmental charge. However, in the current financial 4b statements, this fee is now shown as income from investments and property. Without the reclassification of the Treasurer’s portfolio management fee, interdepartmental charges would have shown an 11% increase for the year. The majority of this increase is due to higher engineering overhead charged to capital projects, as well as a reclassification of reimbursements for street repair work done for other funds, previously shown as other revenues. Recreation Fees 151.3 million) - Recreation fees are generated through instructional classes, youth and adult sports, the triathlon and other special ” events, day trips, various aquatic programs, and lagoon permits. Year-to-date : recreation fee revenue is $132,000 more than the previous fiscal year. Top ~ revenue generators for the year include instructional classes, special events, youth and adult sports, preschool activities, aquatic programs and the triathlon. Ambulance Fees ($1.2 million) - The City bills any individual who is transported in one of the City’s ambulances. Billing and collection of the fees are done by an outside company, which receives a percentage of the fees collected. For the fiscal year, ambulance fees are 16% or $232,000 lower than fiscal year 2000-2001. During the previous fiscal year, there was a change made in the accounting method for ambulance fees to a full-accrual basis. Without this adjustment, ambulance fees would have shown a 5% increase over last year, due to increased collection rates and an increase in calls for service. Transfer Taxes ($1.2 million) - When real property is sold, the County Assessor’s Office charges a transfer tax. The transfer tax rate in San Diego County is $1.10 per thousand multiplied by the selling price of the property. The City receives 50% of the transfer tax charged for sales within the City of Carlsbad. During the current fiscal year, transfer taxes are up 9% due to the continuation of a strong housing market and escalating housing prices. A detailed schedule of General fund revenues is provided on the following page Financial Status Report 5 GENERAL FUND REVENUE COMPARISON REVENUE ACTUAL 2000-01 'AXES SALES TAX PROPERTY TAX TRANSIENT TAX FRANCHISE TAX BUSINESS LICENSE TAX TRANSFER TAX TOTAL TAXES NTERGOVERNMENTAL VEHICLE LICENSE FEES HOMEOWNERS EXEMPTIONS OTHER TOTAL INTERGOVERNMENTAL .ICENSES AND PERMITS OTHER LICENSES a PERMITS BUILDING PERMITS TOTAL LICENSES 8 PERMITS :HARGES FOR SERVICES PLANNING FEES BUILDING DEPT. FEES ENGINEERING FEES AMBULANCE FEES RECREATION FEES OTHERCHARGESORFEES TOTAL CHARGES FOR SERVICES :INES AND FORFEITURES VCOME FROM INT 8 PROPERTY VTERDEPARTMENTAL CHARGES )THER REVENUE SOURCES 'OTAL GENERAL FUND $19,657,514 21,196,726 9,269,484 3,915,976 2,300,367 1,095,037 57,435,104 4,318,128 316,194 910,526 5,544,848 2,102,477 1,306,679 3,409,156 1,420,181 820,456 1,443,594 664,384 1,132,460 689,623 6,170,698 763,681 4,062,209 2,147,717 1.312,367 80,845,780 REVENUE ACTUAL 2001-02 622.286.368 21,660,902 8,533,329 7,494,684 2,440.387 1,193,198 63,608,868 4.675.269 339,192 933,983 5,948,444 1,085,819 912,391 1,998,210 570,283 1,506,944 750,423 1,212,036 1,264,263 6,019,182 715,233 897,533 4,237,254 2,163,257 871,957 85,744,705 ACTUAL COMPARED TO ACTUAL $2,628,854 13.4% 464,176 2.2% (736,155) -7.9% 3,578,708 91.4% 140,020 6.1% 98,161 9.0% 6,173,764 10.7% 357,141 8.3% 22,998 7.3% 23,457 2.6% 403,596 7.3% (1,016,658) -48.4% (394,288) -30.2% (1,410,946) -41.4% (669,758) -47.2% (250,173) -30.5% 842,560 126.8% (231,558) -16.0% 131,803 11.6% (151,516) -2.5% 25,610 3.7% 133,852 17.5% 175,045 4.3% 15,540 0.7% (440,410) -33.6% 4,898,925 6.1% Financial Status Report 6 EXPENDITURES Total General fund expenditures and encumbrances for fiscal year 2001-02 equaled $72 million. This was $12.2 million less than the budget of $84.2 million. Expenditures are shown on a budgetary basis, which the year. A portion of the $12.2 million unspent money will be carried over to the next year. These means they include all amounts actually spent during the year, plus any money encumbered at the end of “savings” will be used to improve programs and services in upcoming fiscal years. The following table identifies the allocation of contingency funds during the fiscal year. For the year, just over $315,000 was authorized out of the contingency account. The remaining contingency account of $3.7 million will go back into the General fund balance for appropriation by the Council in the future. The $315,000 authorized by the Council was allocated to the following projects: CONTINGENCY ACCOUNT USE OF FUNDS iXPLANATlON AMOUNT DATE RESOLUTION NUMBER JSES: Carlsbad History Book Publication Carlsbad Convention and Visitor‘s Bureau Contract Adjustment Repair City Swimming Pool Donation to Support the Carlsbad Pop Warner Football Team Maintenance at the New City Hall Complex (former Farmer’s building) Contribution to Fraternity House Organization Strategic Occupancy Planning Study I-5ICar Country Carlsbad Re-Landscape Project Swim Complex Improvements Increase in Grad Night Assistance Street Light on Branta Avenue ‘OTAL USES (54,270) (21,000) (50,000) (4,000) (37,300) (5.000) (40,000) (75,150) (15,430) (2.100) (1 1,000) (315,250) 10/02/01 11/20/01 1211 8/01 12/18/01 01/15/02 03/26/02 03/26/02 04/02/02 04/16/02 06/25/02 06/25/02 2001-308 2001-325 2001-372 2001-363 2002-029 2002-068 2002-097 2002-102 2002-120 2002-193 2002-1 90 A detailed schedule of General fund expenditures is provided on the following page. 9 Financial Status Report 7 GENERAL FUND EXPENDITURE STATUS BY DEPARTMENT 'OLICYILEADERSHIP GROUP CITY COUNCIL CITY MANAGER CITY CLERK CITY ATTORNEY CITY TREASURER TOTAL POLICY/LEADERSHIP UMINISTRATIVE SERVICES ADMINISTRATION FINANCE PURCHASING HUMANRESOURCES TOTAL ADMINISTRATIVE SERVICES 'UBLIC SAFETY POLICE FIRE TOTAL PUBLIC SAFETY :OMMUNITY DEVELOPMENT COMMUNITY DEVELOPMENT ADMlN HIRING CENTER GEOGRAPHIC INFORMATION ECONOMIC DEVELOPMENT COMMUNITY PROMOTION (CCVB) PLANNING BUILDING TOTAL COMMUNITY DEVELOPMENT :OMMUNITY SERVICES SENiOR PROGRAMS PARK PLANNING & RECREATION CULTURAL ARTS LIBRARY TOTAL COMMUNITY SERVICES JUBLIC WORKS PUBLIC WORKS ADMINISTRATION ENGINEERING PARKS STREETS & TRAFFIC SIGNALS FACILITIES TOTAL PUBLIC WORKS UON-DEPARTMENTAL 8 CONTINGENCY OTHER NON DEPARTMENTAL (a) TRANSFERSOLIT CONTINGENCY TOTAL NON-DEPT 8 CONTINGENCY AS OF 06/30/02 BUDGET BUDGETARY (OVER) TOTAL ACTUAL ON A UNDER/ % UNDER/ IEPT DESCRIPTION FY 200142 BASIS (b) BUDGET BUDGET (OVER) 1,600,207 288.733 1,019,697 321,932 3,386,096 155,529 745.387 1,936,047 673.922 2,197,623 5,552,979 16,110,293 10,694,334 26,804,627 491,171 85.849 335,560 298.556 3,324,096 507,959 2,054,897 7,098,088 4.628.016 8,521,649 476.545 721,333 14,347,543 5.4a1.632 637,915 3,428,416 3,429,190 2,628,108 15,605,281 7,173,189 582,179 3,672,070 11,427,m 1,445,666 272,275 288.209 939.658 3,060,149 114.341 441,919 1,777,947 593.748 1,848,441 4,462,055 15,110.082 10,332,175 25,442,257 363.887 84.366 286.656 252.259 495.681 2,684,240 1,855,647 6,022,736 4,084,155 7,214.847 418,190 572,410 12,269,602 505,465 4,575,102 2.958.395 2,304,732 13,130,827 2,7a7,133 434.558 7,173.189 0 7,607,747 154,541 16,458 33,723 80.039 41,188 325,949 303.468 158,100 80.174 549.182 1,090,924 1,000.211 1,362,310 362,159 127.284 1,483 46,297 48.904 12,278 639,856 1,075,352 199,250 563,861 58.355 1,306,802 148,923 2,077,941 906,530 132,450 641.283 470,795 323,376 2,414*434 147,621 3372.070 0 3,819,691 5.7% 9.7% 10.5% 7.8% 26.5% 9.6% 40.7% 8.2% 25.0% 11.9% 19.6% 6.2% 3.4% 5.1% 25.9% 1.7% 14.6% 15.5% 19.2% 2.4% 15.1% 9.7% 12.2% 12.2% 20.6% 15.3% 14.5% 20.8% 16.5% 18.7% 13.7% 12.3% 15.9% 25.4% 100.0% 0.0% 33.4% lOTAL GENERAL FUND 84,222.034 71,995,373 12,226,661 14.5% a) Other non-departmental expenses include property tax administration fees, assessment district administration, community assistance b) Actual expenditures on a budgetaly basis include encumbrances and exclude non-budgeted items. and other items not attributed to a specific department. Financial Status Report 8 ENTERPRISE FUNDS WATER ENTERPRISE WATER OPERATIONS FUND JUNE 30,2002 BUDGET YTD 06/30/2001 06/30/2002 YTD 2001-02 FY 2001-02 YTD CHANGE FROM CHANGE YTD 2000-01 TO PERCENT REVENUES WATER SALES CHARGES FOR CURRENT SERVICES OTHERREVENUES INTEREST TOTAL OPERATING REVENUE FINES, FORFEITURES a PENALTIES EXPENSES STAFFING INTERDEPARTMENTAL SERVICES PURCHASED WATER MWDICWA READY-TGSERVE OUTSIDE SERVICESIMAINTENANCE CAPITAL OUTLAY DEPRECIATION/REPLACEMENT TOTAL OPERATING EXPENSES MISCELLANEOUS EXPENSES 13,100,000 3,865,154 161.607 2,603,680 664,000 20,414,441 2,182,244 1,862,603 11,500,000 987,678 775,090 2,336,000 1,029,171 46,936 20,119,722 12,058,135 3,880,649 180,080 1,957,432 654,835 18,731,131 2,058,710 1,812,263 9,919,079 760,344 224,066 2,287,805 758,735 53,676 17,814,618 13,686,476 3,763,592 163,877 2,817,094 498,437 20,929,416 2,234,012 1,861,236 10,779,201 772,610 391,530 2,336,000 620,840 16,402 19,011,831 1,628.341 (1 17,057) (16,203) (156,398) 859,662 2,198,345 175,302 860,122 48,973 12,266 167.464 48,195 (37,274) (137,895) 1,137,453 13.5% -3.0% -23.9% -9.0% 43.9% 11.1% 8.5% 2.7% 8.7% 1.6% 74.7% 2.1% -69.4% -18.2% 6.4% Revenues With this past winterkpring being one of the driest on record, water sales have jumped by 13.5% during the year. During the period of February 15 to March 15, 2002, water sales almost doubled that of the same period in the prior year. In addition to the increased water usage, charges for services were higher due to a change in the estimate for the year-end accrual. Interest income is down due to the net effect of two factors. First, the City’s investments are currently recorded on an amortized basis, versus a fair market basis at this time last year. If both fiscal years were recorded on an amortized basis, interest would have shown a 16% decrease. Secondly, the average yield on the Treasurer’s Pool for the year is down from 6.18% last year to 5.28% this year. Increase in other revenues is due to increased property taxes, higher engineering labor charged to Water Authority. capital projects, and refunds received from the Metropolitan Water District and the San Diego County Expenses Staffing costs are up due to normal increases in salaries and related benefits. Purchased water has increased due to the additional water usage; the result of a drier year as compared to the previous fiscal year. Outside services and maintenance expenses are higher primarily due to water sample testing by Encina, environmental consulting for Maerkle Reservoir, and the enterprise’s portion of surveying and aerial mapping costs of the City. in the current fiscal year from slower development in Carlsbad. /I Capital outlay expenses are down due to the purchase of a truck in the previous fiscal year. The decrease in miscellaneous expenses is primarily due to a decrease in the purchase of water meters Financial Status Report 9 SEWER OPERATIONS FUND JUNE 30,2002 BUDGET 06/30/2001 06/30/!2002 YTD 200142 CHANGE Fy 2001-02 YTD YTD YTD 200041 TO PERCENT CHANGE FROM REVENUES CHARGES FOR CURRENT SERVICES 6.288.214 INTEREST 5,680.094 5.862.507 3.2% 363,840 255,522 300.000 182.413 6,374,488 6,447.298 72.810 1.1% 329.269 (1.285) 0.4% TOTAL OPERATING REVENUE 6,644,714 330.554 56,500 -29.8% OTHERREVENUES (108.318) EXPENSES STAFFING INTERDEPARTMENTAL SERVICES OUTSIDE SERVICES/MAINTENANCE ENCINA PLANT SERVICES OEPRECIATION/REPLACEMENT CAPITAL OUTLAY TOTAL OPERATING EXPENSES MISCELLANEOUS EXPENSES 700,448 1,153,057 2,140,240 343,205 2,183,000 53,500 354,496 6,927,946 588,773 736,345 2,153.572 45,301 2.180.380 4,296 309,437 6,018,104 1,149,546 669,031 2,140,000 129,983 2.183.000 35,502 283,241 6,590,303 413,201 80.258 (13,572) 84,682 31,206 2,620 572,199 (26,196) 13.6% 56.1% 186.9% 0.6% 726.4% 0.1% -8.5% 9.5% Revenues 0 Increase in customer base is reflected in the increase in charges for current services. In addition to the larger customer base, charges for current services increased due to a change in the estimate for the year-end accrual. Interest income is down due to the net effect of two factors. First, the Cityk investments are currently recorded on an amortized basis, versus a fair market basis at this time last year. If both fiscal years were recorded on an amortized basis, interest would have shown a 15% decrease. Secondly, the average yield on the Treasurer’s Pool for the year is down from 6.18% last year to 5.28% this year. Expenses Staffing costs have increased primarily due to normal increases in salaries and benefits, and the filling of vacancies. The majority of the increase in the Sanitation Enterprise’s expenses is the result of increased interdepartmental charges. Utility engineering costs are allocated through interdepartmental charges, and this increase is the result of a more accurate accounting of the Sanitation fund’s share of these costs. In addition, the fund is also being charged now for information technology services, which previously were only allocated to the Water Enterprise. Increase in outside services/maintenance primarily due to the sewer portion of aerial mapping costs for City database, increased asphalt repairs, and wastewater services for Carrillo Estates. The City is required to reimburse sewer charges for over 100 homes until the City’s wastewater facilities are built in the area. Capital outlay expenses have increased as the City has purchased additional sewer cleaning equipment. Miscellaneous expenses have dropped primarily from reduced postage, and various small tools and supplies expenses. 12 Financial Status Report 10 REDEVELOPMENT AGENCY CARLSBADREDEVELOPMENTAGENCY OPERATIONS AND DEBT SERVICE FUNDS JUNE 30,2002 BUDGET M 2001-02 YTD 06i30101 OW30102 YTD s CHANGE % CHANGE RNENUES PROPERW TAXES 1,500,000 100,885 INTEREST 58,000 1577.593 1.489.901 (14,455) -14% 269,795 MISCELLANEOUS REVENUES 63,715 6% 86.430 (87.692) 1,608,901 (339,372) -17% (237,225) -8896 1,948,273 TOTAL RNENUE 1,621,715 32,570 BUDGET COMMITTED 0613W02 (1) 06no102 06i30102 (2) FY 2001-02 BALANCE AVAILABLE TOTAL AVAILABLE % EXPENDITURES STAFFING INTERDEPARTMENTAL SERVICES 166,598 26,947 RENTALS & LEASES 133,973 DEBT EXPENSE 1.706.600 CAPITAL OUTLAY 16.134 TOTN EXPENDITURES 2,245,649 162,366 4,232 133.768 205 26,935 3% 12 0% 0% 1,703,807 2,793 0% 15.193 941 6% 84.694 110,703 2,126,763 57% 118,886 5% OUTSIDE SERV, MINT a MISC 195,397 REVENUES OVER EXPENDITURES (623,934) (517,862) (1) Total cornmineed includes expenditures and encumbrances. (2) Overall amount available would be 2% if funds were spent at the 581118 pace as last year. Revenues ~~ The decrease in property taxes is primarily due to the reassessment of the Village Faire shopping center. Interest income is down due to the net effect of two factors. First, the City’s investments are currently recorded on an amortized basis, versus a fair market basis at this time last year. If both fiscal years were recorded on an amortized basis, interest would have fiscal year. Secondly, the average yield on the Treasurer’s Pool for the year is down from 6.18% last shown a 5% increase due to the increased cash balances maintained during the current year to 5.28% this year. The majority of the decrease in miscellaneous revenues is due to the expiration of lease agreements with Beach Sleep Furniture and the Carlsbad Unified School District, as well as a change in the recording of the annual revenue received for the administration of the Santa Fe Apartments mortgage revenue bonds. This revenue is now recorded in the Affordable Housing fund. Expenditures Total available balance at June 30, 2002 is $79,000 higher than the previous year as several miscellaneous projects were not started as of year-end. Total expenditures for the year were below budget by $1 19,000, Of the $1.7 million in debt expense, $647,000 represents interest on the loan from the General fund, of which $300,000 was paid back to the General fund during the year, and the remaining $347,000 was added to the outstanding loan balance. 13