HomeMy WebLinkAbout1993-04-06; City Council; 12139; Selection of Conrad and Associates for Financial Audit9
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AB # Jaj I 3 7 TITLE; DEPT
MTG. 4./6m SELECTION OF CONRAD AND ASSOCIATES CITY
CITY DEPT. FIN
RECOMMENDED ACTION;
FOR FINANCIAL AUDIT
Adopt Resolution No. c13-3‘f authorizing the selection of the audit firm of Conrad i
Associates to perform the City‘s financial audit for fiscal years 1992-93,1993-94, and 1994
95, with an option to extend for two additional years.
ITEM EXPLANATION:
On January 19, 1993, Council authorized solicitation of request for proposals (RFP) fo
professional auditing services. The City had retained the certified public accounting firn
of KPMG Peat Marwick to perform audit services for the last five years. The Financ
Department was satisfied with their services, but periodically it is necessary to reques
proposals from public accounting firms to assure service and price competitiveness. RFP’
were solicited from eleven firms with the following six firms responding:
Calderon, Jaham & Osborn
Conrad & Associates
Deloitte, Touche
Diehl, Evans & Company
KPMG Peat Marwick
Moreland & Associates
An audit review committee examined the RFP’s for firm and staff qualifications an(
experience, audit approach, expertise in governmental auditing, and experience in providinj
on-going fhancial consuldng services to mudcipaKties. Three firms considered to be th,
most qualified at a reasonable cost were selected for the oral interview process. Up01
completion of the interviews and reference check, the committee selected Conrad E
Associates.
Conrad & Associates specializes in local governmental accounting and comes higw
recommended from other municipalities. A smooth transition from KPMG Peat Mawick tc
Conrad & Associates is expected.
FISCAL IMPACT:
Although cost was not a primary factor in the selection, bids for fiscal year 1993-94 rangec
from $35,000 to $59,000. Bids from the smaller firms clustered under $40,000, while thc
bids from the two larger firms were at the high end. The Conrad & Associates bid for fisca
year 1992-93 was $37,625; and total cost for the three fiscal years is $116,295. All of thc
1992-93 auditing budget of $36,000 will be utilized for the services related to the 1991-9;
audit. Auditing cost for 1992-93 will be included in the 1993-94 operating budget.
EXHIBIT.
1. Resolution N0.q ’3- 34
Associates to perform the financial audit.
Agreement with Conrad & Associates
authorizing the selection of the audit firm of Conrad 8
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RESOLUTION NO. 93 - 7 1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHOEUZING THE SELECTION
OF CONRAD & ASSOCIATES TO PERFORM THE FINANCIAL
AUDITS FOR FISCAL YEARS 1992-93.1993-94 AND 1994-95
WHEREAS, an audit of the City of Carlsbad financial records is
required by the City Council; and
WHEREAS, bids from certified public accounting !inns have been
solicited, accepted, and evaluated; and
WHEREAS, Conrad & Associates has been determined to be the
most qualified at a reasonable cost; and
WHEREAS, funding is expected to be made available in the 1993-
94 Operating Budget.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Carlsbad, California, as follows:
1.
2.
The above recitations are true and correct.
The public accounting finn of Conrad & Associates is
selected to perform the financial audits for fiscal years 1992-93, 1993-94,
1994-95, with an option to extend for two additional years.
j
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3. That the Agreement between Conrad 81 Associates and the
City of Carlsbad is hereby approved and the Mayor and City Clerk are hereby
authorized and directed to execute said Agreement.
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I
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CITY OF CARLSBAD
Combined Statement of Revenues, Expenses and
Changes in Retained Earnings
All Proprietary Fund Types
For the year ended June 30, 1992
Total
Internal (Memoral
Enterprise Service onlv Operating revenues:
Water sales $ 7,911,918 - 7,911,9
Sewer service charges 3,844,265 - 3,844,2
Other charges for services 491,907 5,643,075 6,134,9
Miscellaneous 419.563 505 b 98 2 925.5
Facilities revenue 999,547 - 999,5
Total operating revenues 13.667.20Q 6,149,057 19,816.2
Operating expenses:
Plant operations 1,845,970 - 1,845,9
Purchased water 4,596,062 - 4,596,O
Depreciation and amortization 2,202,995 657,743 2,860,7
Fuel and supplies - 456,523 456,5
Claims expense - 3,391,087 3,391 ,O
General and administrative 5.053, 280 1.361.033 6.414.3
Total operating expenses 13.698.307 5.866.386 19.564.6
Operating income (loss) (31,102) 282.671 251.5
Nonoperating revenues (expenses):
Interest income 2,232,785 491,216 2,724,C
Interest expense and fees, net
of capitalized interest (894,385) - (894, C Loss on disposal of property (2,444,345) (216,828) (2,661,l
Property taxes and rent 785,928 - 785,s
Miscellaneous income 36,707 - 36,7 (26.7 Amortization of issuance costs ( 26 71Q) -
Total nonoperating revenues, net (310.020) 274.388 (35.E
Net income (loss) (341,127) 557,059 215,s
Retained earnings at beginning of year 35,203,536 3,233,113 38,436,t
Residual equity transfer out (41 .OOQ) - (41.(
Retained earnings at end of year $ 34.821.409 3,790,172 38,611 .:
See accompanying notes to combined financial statements.
39
i a e
CITY OF CARLSBAD
Combined Statement of Cash Flows
All Proprietary Fund Types
For the year ended June 30, 1992
To 1
Internal (Memo
EnterDrise Service on
Cash flows from operating activities:
Operating income (loss) $ (31,107) 282,671 25 1
Adjustments to reconcile operating
income (loss) to net cash provided by
operating activities:
Depreciation and amortization 2,202,995 657,743 2,86C
Decrease in receivables 491,380 1,742 49:
Increase in advances and due to/due
from other funds 89,655 - 85
Decrease in due from other governments 83,450 - 8:
(Increase) decrease in inventory (121,069) 3,509 (11;
Increase (decrease) in accounts
payable (1,068,119) 45,175 (1,02;
Increase in accrued wages payable 238,406 6,057 241
Increase in estimated claims payable - 291.696293
operating activities 1.885.59 1 1.288.593 3.171 Net cash provided by
Cash flows from noncapi tal financing
activities - property taxes and
rent received 785.9 28 - 781
Cash flows from capital and related
Purchases of property, plant
and equipment (7,004,432) (430,239) (7,431
Loss on disposal of assets 2,444,345 216,828 2,66:
Principal payments on bonds (685,000) - (681
Interest and other fees paid on bonds (1,792,118) - (1,79:
financing activities:
Contributions to other funds (41,000) - (4'
Contributions from other governments 120,213 - 121
Decrease in deposits payable (109,641 ) - (10'
Miscellaneous expense (83,506) - (8
Proceeds from capital contributions 1.038. 260 500.000 1.531
Net cash provided by (used in)
capital and related financing
activities (6.112 2379) 286.589 (5.82
See accompanying notes to combined financial statements.
40
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Tot
In t smal (\@rnbl EnterDrise Service onl
Cash flows from investing activities:
Net decrease in restricted investments 3,381,382 - 3,381
Decrease in deferred compensation
In teres t on investments 2.259.494 468.568 2.728
Decrease in deferred compensation payable (1 , 101,849) - (1,101
investments 1,101,849 - 1,101
Net cash provided by
investing activities 5.640.876 468.568 6,109
Net increase in cash and cash equivalents 2,199,516 2,043,750 4,243
Cash and cash equivalents at
beginning of year 30.7 40.224 5.790. 131 37.530
Cash and cash equivalents at
end of year (note 4) $ 32.939.7 44 8.833.881 41.774
Supplemental schedule of noncash
investing and financing activities -
capital assets contributed by contractors and/or other funds $ 2.000.934 394.454 2.39:
41
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CITY OF CARLSBAD
Notes to Combined Financial Statements
June 30, 1992
(1) Swmna rv of Sianificant Accoun tina Policies
The City of Carlsbad, California (Carlsbad) was incorporated on Jul
1952. Carlsbad operates under a Council-Manager form of governmen
provides the following services as authorized by its charter: ge
government, public safety, community development, public w
culture, and recreation. Carlsbad is not subject to federal or
income taxes.
\ The accounting policies of Carlsbad and its component units confo
generally accepted accounting principles as applicable to govern
units. The following is a summary of the more significant policies
(a) Description and ScoDe o f the ReDortina Entitv
The Comprehensive Annual Financial Report includes all entitle
which Carlsbad exercises oversight responsibility as defined b National Council on Governmental Accounting (NCGA) Statement
"Defining the Reporting Entity." This responsibility includes
is not limited to, the authority to govern, manage, a1
budgets, and assume fiscal accountability.
The financial statements of the reporting entity (the City) ir
the financial activities of Carlsbad, the Housing Authority c
City of Carlsbad, the Parking and Building Authorities of thc
of Carlsbad, the City of Carlsbad Public Improvement Corpor;
the Carlsbad Redevelopment Agency and the Carlsbad Municipal
District (the District). Their financial operations are c:
related and the City Council has a continuing ovei
responsibility over these entities. The oversight responsil
is determined on the basis of budget adoption, taxing authc
funding and appointment of the governing board.
The City also has an interest in a joint sewage treatment fa,
known as the Encina Water Pollution Control Facility and
f inancing authority known as the Encina Financing Joint
Authority. Since the City does not have significant influence the management or the operation of these entities, they ha1
been included as component units in the City's financial state]
42 (Cont
a 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(1) Swmnarv o f Significant Accoun tina Policies. Co ntinued
(b) Basis of P res en t a t ion
The accounts of the City are organized on the basis of fun(
account groups, each of which is considered to be a sep
accounting entity. The operations of each fund or account
are accounted for by providing a separate set of self-bala
accounts that comprise its assets, liabilities, fund bal
retained earnings, revenues, and expenditures or expenses.
various funds and account groups are summarized by type ii
financial statements. Fund types and account groups used b.
City are as follows:
GOVERNMEEJTAL FUND TYPES!
Governmental funds are used to account for the City's expen
financial resources and related liabilities (except those accc
for in proprietary and similar trust funds). The measurement
is based upon determination of changes in financial position.
following are the City's governmental fund types:
General Fund
The general fund is the general operating fund of the City.
used to account for all financial resources except those rec
to be accounted for in another fund.
Spec ial Revenue FUnb
Special revenue funds are used to account for revenues derivec
specific sources (other than major capital projects) tha
restricted by law or administrative regulation to expend:
for specified purposes.
Debt Service Funds
Debt service funds are used to account for the accumulati
resources for, and payment of, general long-term debt princ
interest and related costs.
Capital Projects Funds
Capital projects funds are used to account for financial res
to be used for the acquisition or construction of major c
facilities other than those financed by proprietary funds.
43 (Cont
0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(1) Swarv o f Significant Accoun ting Policies. Co n t inued
(b) Basis of Presentation. Continued
PROPRIETARY FUND TYPES:
Proprietary f-mds are used to account for activities that are si
to those found in the private sector. The measurement focl
based upon determination of net income and capital mainten
The following are the City's proprietary fund types:
EnterDriSe Funds
Enterprise funds are used to account for operations (a) tha
financed primarily through user charges, or (b) where
governing body has decided that determination of net incoi
appropriate.
Interna 1 Service Funds
Internal Service funds are used to account for goods or sei
provided by one department to other departments of the City
cos t-reimbursement basis.
FIDUCIARY FUND TYPE:
Fiduciary funds are used to account for assets held by the City
trustee capacity or as an agent for individuals, PI
following is the City's fiduciary fund type: organizations, other governmental units, and/or other funds.
Agencv FUllgs
Agency funds are used to account for assets held by the City
agency capacity for individuals and private businesses. TI
not involve measurement of results of operations.
ACCOUN T GROUPS:
Account groups are used to establish accounting control
accountability for the City's general fixed assets and gi
long-term debt. The following are the City's account groups:
44 (Con t
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CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(1) Swan of S ianificant Accoun tina Policies. Continued
(b) Basis of Presentation. Continued
ACCOUN T GROUPS, CQ ntinued;
General Fixed Assets Accoun t GrouD
This account group is used to account for all fixed assets oi
City other than those accounted for in the proprietary funds.
General Long-term Debt Accoun t GrOUD
This account group is used to account for all long-term obliga
of the City except those accounted for in the proprietary
and trust funds .
(c) Measurement Focus a nd Basis for Accoun t ing
Governmental fund types are accounted for on a "spending" measur
focus. Accordingly, only current assets and current liabil
are included on their balance sheets, and the reported fund ba
provides an indication of available, spendable resou
Operating statements for governmental fund types report incr (revenues) and decreases (expenditures) in available, sper
resources.
The proprietary fund types are accounted for on an "j
determination" or "cost of services" measurement f
Accordingly, all assets and liabilities are included on the bs
sheet, and the reported fund equity provides an indication o
historical net worth of the fund. Operating statements
proprietary fund types report increases (revenues) and deci
(expenses) in total historical net worth.
Fiduciary fund types are custodial in nature (assets
liabilities) and do not involve measurement of result
operations. Fiduciary fund assets and liabilities are accc
for on the modified accrual basis of accounting.
Governmental fund types use the modified accrual basi
accounting. Revenues are recognized when susceptible to aci
within the current period or soon enough thereafter to be ut
pay liabilities of the current period. In applying the susce
to accrual concept to intergovernmental revenues, the lega
contractual requirements of the individual programs are us
guidance.
Le., both measurable and available. Available means collel
45 (Cont
.I 0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(1) Summarv o f Significant Accoun ting Policies. Co n t inued
(c) Measurement Focus a nd Basis for Accoun tina, co n t inued
Revenues that are accrued include real property taxes, sales
interest, and some state and federal grants.
Real property taxes are levied on October 15 against owners of r
at March 1. The taxes are due in two installments, on Noves
and February 1, and become delinquent after December 10
April 10, respectively. Tax liens attach annually as of 12:Ol
on the first day of March in the fiscal year for which the
are levied. Under the provisions of NCGA Interpretatio
property tax revenue is recognized in the fiscal year for whic
taxes have been levied, provided it is collected within 60 da
the end of the fiscal year.
Governmental expenditures are recorded when the related
liability is incurred. Principal and interest on general long
debt are recorded as fund liabilities when due or when amounts
early in the following year.
been accumulated in the debt service fund for payments to be
Proprietary funds use the accrual basis of accounting, i.e., re\
are recognized in the period earned and expenses are recogniz
the period incurred.
(dl Encumb rances
Encumbrance accounting, under which purchase orders, contract
other commitments for the expenditure of monies are record
order to reserve that portion of the applicable appropriatio
employed as an extension of formal budgetary control ir
governmental funds. Encumbrances outstanding at year-end d
constitute expenditures or liabilities, but are reporte
reservations of fund balance.
(e) Cash and Investments
Cash includes amounts in demand and time deposits. Investment
stated at cost or amortized cost, except for deferred compem
assets which are shown at market value.
The City maintains a cash and investment pool that is availabl
use by all funds. Interest income earned as a result of pool:
allocated to the appropriate funds based on average monthly
balances.
46 (Cont
0 e
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(1) Summary o f Significant Accoun tinp; Policies. Co ntinued
(f) Inventories
Inventories consist of materials and supplies that are valued at
and are recorded as expenses on a first-in, first-out basis
consumed.
(g) ComDensated Absences
Vacation pay is payable to employees at the time used or
termination of employment. For governmental funds, the cos
accumulated vacation expected to be paid in the next 12 mont
recorded as a fund liability and amounts expected to be paid
12 months (if any) are recorded in the general long-term
account group. For proprietary funds, the cost of vacatic
recorded as a liability when earned,
(h) Risk Management
The City accounts for its general liability, health insurance
workers ' compensation activities in internal service funds.
funds are responsible for collecting premiums from other City
and departments and paying claims settlements and insu
premiums. Interfund premiums are based on the insured f
claims experience. Incurred but not reported claims are accru
year-end if material.
(i) Unbilled Se rvices
Unbilled water revenue of the enterprise funds is recognize
earned when the water is consumed.
(j) General Fixed Assets
General fixed assets are recorded as expenditures in the govern
fund types and capitalized at historical cost in the general
assets account group. In the case of gifts or contributions,
assets are recorded at fair market value at the the received.
Fixed assets consisting of certain improvements other than builc
including roads, bridges, curbs and gutters, streets and sideF
and drainage systems, have not been capitalized. Such i
normally are immovable and of value only to the City. Then
the objective of stewardship for capital expenditures is sat
without recording these assets.
47 (Cont
e 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(1) Smarg of S ipificant Accoun ting Policies. Co ntinued
(j) General Fixed Assets a Co n t inued
In the general fixed assets account group, construction in pro$
is transferred to buildings or improvements upon approval by
City Council, which approximates the completion date.
No depreciation has been provided on general fixed assets.
(k) Propertv. Plant and Equipment - Proprietary Funds
Property, plant and equipment used by proprietary funds is state
cost or estimated historical cost. Contributed fixed assets
recorded at estimated fair market value at the time received.
interest costs are capitalized on projects during the construc
period.
Depreciation is charged to operations using the straight-line mc
based on the estimated useful life of the related asset.
estimated useful lives of the assets are as follows:
Years
Buildings and improvements 10 - 50
Wells, reservoirs and dams 10 - 100
Transmission and distribution lines 40 - 70
Sewage treatment facility 55
Equipment 3- 20
Sewer, sewer lines and wells 50
Filters, pumps and fire hydrants 10 - 50
(1) Deferred Revenue
The deferred revenue in the General Fund represents interest due
not available, on advances to other funds.
The deferred revenue in the Debt Service Funds relates
prepayment of lease revenue from the General Fund to the Pa
Authority.
The deferred revenue in the Capital Projects Fund relates to
received and to be applied toward future construction.
48 (Conti
1 0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(1) Summa rv - of S ianif icant Accoun tina Policies. Co n t inued
(1) Deferred Revenue. Co n t inued
The deferred revenue in the Enterprise Funds relates to deposit
in-kind prepayments for services to be rendered (e.g., I
installation, etc.).
(m) Statement of Cash Flows - Prorxietarv Fund8
For purposes of the statement of cash flows, the Proprietary 1
consider all highly liquid investments with an original maturil
three months or less when purchased and all amounts invested
cash and investment pool to be cash equivalents.
(n) Advances to Other Funds
Interfund loan receivables are reported as advances and are o
equally by a fund balance reserve which indicates that they dc
constitute expendable available financial resources and then
are not available for appropriation.
(0) Reclassifications
During the year, the City's Water Utility Fund and the Car
Municipal Water District were merged into one fund.
(p) Total Columns
Total columns on the combined statements are captioned "Memor
Only" to indicate that they are presented only to facil
financial analysis. Data in these columns do not present fina
position, results of operations, or cash flows in conformity
generally accepted accounting principles. Such data is
comparable to a consolidation since interfund eliminations hav
been made.
(2) Budaetarv Data
The City follows these procedures in establishing its budgetary data:
1. During May or June, the City Manager submits to the City Coun
proposed operating budget for the fiscal year commencing
following July 1. The budget includes proposed expenditure!
estimated revenues on a departmental basis.
2. Public hearings are conducted at City Council meetings to c
citizens' comments during June.
49 (Contj
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CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(2) Budgetary Data. Co n t hued
3. Prior to July 1, the budget is enacted legally through passag
an appropriation resolution.
The City Manager is authorized to make transfers of appropriated amc
within a fund and function for up to $25,000. Revisions that alter
total appropriations of any fund or function must be approved by
City Council. A mid-year budget review is conducted each year.
major changes to the adopted budget are approved by the City Councj
that time. During the year, several supplementary appropriations
necessary.
Budgets for governmental type funds are adopted on the modified acc
basis, except that encumbrances are treated as budgeted expenditurc
the year purchases are committed. Additionally, certain rema:
unexpended or unencumbered appropriations at the close of the f:
year, provided for in the budget of the General Fund and lei
authorized by the City Council, are held available for the follc
year and treated as budgeted expenditures of the current year.
other unencumbered appropriations lapse at year-end. Expenditures
not exceed budgeted appropriations at the departmental level whicl
crom the individual fund level.
For purposes of budgetary presentation, actual generally accc
accounting principles (GAAP) expenditures have been adjusted to inc
encumbrances outstanding and designations for continuing appropria
at year-end. Annual budgets are adopted for the General, Spc
Revenue and Debt Service Funds except for the following: Mor
Revenue Bonds, Building Authority, College Boulevard, Hosp Grove CI
and Parking Authority. Accordingly, the revenues and expenditures
these funds have been excluded from the budget basis final
statements. Annual budgets are not adopted for the Capital Pro
Funds; therefore, budget basis financial statements have not
prepared because a comparison of such budgetary amounts to ai
revenues and expenditures is not meaningful.
The following schedule is a reconciliation of the budgetary and GAAP
balances :
Special De
General Revenue Sen
Fund Funds Ew
Fund balance-budgetary basis $ 15,281,261 6,252,022 1,757
Encumbrances outstanding
Fund balance designated for
at year-end 676,074 237,261
continuing appropriations 851,738 -
Fund balances of nonbudgeted funds - 53.5003.146
Fund balance-GAAP basis $ 16.809.0 73 4.5 42,782 4.904
50 (Conti
0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(3) Risk Manageme nt
The City is exposed to various risks of loss related to theft of, c
to, and destruction of assets; errors and omissions; injuric
employees; and natural disasters.
Effective January 1, 1991, the City became a participating member c
California Municipal Insurance Authority (CMIA) risk-management
Under this program, the pool provides coverage for up to a main
$5,000,000 per claim with a self-insured retention to be provid
the City in the amount of $500,000 per claim. In addition, t
general liability insurance coverage up to $10,000,000 is provide
catastrophic losses. Under the terms of the agreement with CMIP
City must maintain an unencumbered portion of fund equity equ;
$1,500,000 in the General Liability Self-Insurance Fund. At Jur
1992, unencumbered fund equity for this fund was approxin
$2,050,000.
(4) Cas h and Investmentg
Each participating fund's portion of the City's cash and investment
is displayed on the combined balance sheet as "Cash and Investme
This category also includes cash and investments that are
separately by several of the City's funds.
Authoritv for Deposits and Investments:
The City's investment policy and state statutes authorize the Ci
invest in obligations of the U.S. Treasury, its agencies
instrumentalities, commercial paper rated A-1 by Standard and 1
Corporation or P-1 by Moody's Commercial Paper record, bai
acceptances with a maximum maturity of 270 days, repurchase agreer
certificates of deposit with national and state licensed or chai
banks or federal or state savings and loan associations, mediur
corporate notes with a maximum five-year maturity rated in the t\
rating categories, money market and mutual funds whose portf
consist of one or more of the foregoing investments, the C
Treasurer's investment pool, and the State Treasurer's investment 1
State statutes require that all deposits be insured or collateral
Depositories holding public funds on deposit are required to mai
collateral in the form of a pool of government securities with a n
value of at least 10 percent in excess of the City's deposit
percent in excess of the deposit as collateral in mortgage pools.
51 (Con t
0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(4) Cash a nd Investments. Co n t inued
Authoritv for DeDosits and Investments. Con t inue d :
A summary of cash and investments, including investments in def
compensation plans, is as follows:
Deposits :
Cash $ 10,413
Time certificate of deposit 99 116.698 Inve s tmen t s
127,211
Less restricted portion (6,584
Unrestricted cash and investments $ 120.627
The cash and cash equivalents component of the balance sheet ca
cash and investments are $32,939,740 and $8,833,881 for
Enterprise Funds and Internal Service Funds, respectively.
DeDos its:
The following summary presents the amount of the City's deposits
are fully insured or collateralized with securities held by the
or its agent in the City's name (Category One), those deposits
are collateralized with securities held by the pledging fine
institution's trust department or agent in the City's name (Cat
Two), and those deposits which are not collateralized or
collateralized with securities held by the pledging fine
institution or its trust department or agent but not in the C
name (Category Three) at June 30, 1992.
Category Category Category Total Bank Carrj
One Two Three Balance Ai!!su
Cash $ 200,000 1,679,070 6,173 1,885,243 1,35:
Cash with fiscal
agent/trustee 3,038 6,967,748 2,089,837 9,060,623 9,06(
Time certificate
99.000 91
$ 302,038 8.6 46.818 2.096.010 11.044.866 10.51:
- - of deposit 99,ooo
52 (Cont:
1 I 0 e
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(4) Cas h and Investments. Continued
Investments:
The City categorizes investments according to the level of risk as
by the City. Category One includes investments that are ins
registered or held by the City's agent in the City's name. Cat
Two includes uninsured and unregistered investments held by
counterparty's trust department or agent in the City's name. Cat
Three includes uninsured and unregistered investments held bj
counterparty, its trust department or its agent, but not in the C
name. Certain investments have not been categorized because secux
are not used as evidence of the investment. These uncategc
investments include ownership interests in the Local Agency Inves
Fund, County Treasury Investment Pool and mutual funds and si
instruments. The summary below identifies the level of risk assum
the City and the total carrying amount and market value of the C
inves tmen t s .
Category Category Category Un- Total M;
One Two Three sateao ri zed Investments !!
Local Agency
County Treasurer's
U.S. Government
Investment Fund $ - - - 29,809,115 29,809,115 29,t
Investment Pool - - - 18,387,887 18,387,887 18,:
agency obligations 16,951,313 - - I 16,951,313 17,
U.S. Treasury
securities 9,445,616 1,822,049 - - 11.267.665 11.
Corporate notes 30,389,050 - - - 30,389,050 31,
Mutual f unddother 108.196 1.105.600 - 8.680.1029.893.8989.
Total $ 56.89 4.172 2.927.649 - 56.8 77.104 116.698.9 28 Ila,
53 (Conti
r e 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(5) ProDertv. Plant and EauiDment
A summary of changes in the general fixed assets account group i
follows:
Balance Balar
July 1, June 1991 Additions Deletions 1pe
Land $ 23,378,726 2,567,942 - 25,946
26 , 664 Buildings 26,439,328 224,769 -
Improvements 2,341,359 193,987 (479,714) 2,055
Furniture and equipment 5,146,217 711,145 (552,358) 5,305
Construction in progress 4.395. 212 1.452.499 (2.782.908) 3.064
Total $ 61.700.8 41 3.150.3 42 (3.814.980) 53.036
Construction in progress in the general fixed assets account grot
composed of the following:
Expended Balance
Project June 30, CO
Authorization. 1992 mit
Library - South Carlsbad $ 1,138 , 729 1,097,103 41
Fire Station 1 & 2 Remodel 225,000 215,082 9
Fire Station #6 38,503 11,505 26
Carrillo Ranch Stabilization 504,001 486,510 17
Public Art - South Carlsbad Library 170,000 65,656 104
Larwin Park (22.3 Acres) 290,001 169,956 120
Streetscape Phase IV -
Sculpture Park 853,636 722,471 131
Alta Mira Park 1,611,999 286,397 1,325
Public Art - Seawall 30,000 10,000 20
Public Art - Larwin Park 25.000 123 - 24
$ 4.886.869 3 .06 4.802 1.822
There is no future financing commitment required on any of the
noted construction projects.
54 (Contj
T 0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(5) Propertv. Plant and Equipment. Continued
A summary of proprietary fund type property, plant and equipmer
June 30, 1992 follows:
Inte
Enterprise Ser Funds - FLU
Land, water rights, rights-of-way $ 2,157,600 Buildings and improvements 8,698 , 947
Wells, reservoirs and dams 17,324,133
Transmission and distribution lines 26,566,350
Sewer, sewer lines and wells 23,516,855
Sewage treatment facility 31,036,678
Equipment and vehicles 2,125,559 4,738 Construction in progress 3.778.402
115 9 204 , 525 4 3 738
Less accumulated depreciation (18.313.334) (2.097
Property, plant and equipment, net $ 96.89 1.191 2.641
Enterprise Fund interest is charged to expense as incurred except
interest related to borrowings used for construction, whicl
capitalized net of interest earned on construction funds borr
Interest capitalization ceases when the construction projeci
substantially complete. Net interest costs of $625,145
capitalized in the Enterprise Funds during 1992. Total interest
incurred and interest earned on related interest-bearing invest]
acquired with proceeds of the tax-exempt borrowings were $1,712,48(
$224 , 810 , respectively.
The Enterprise Funds had various construction contracts in progrer
$1,210,000. There is no future financing required on any of
projects. Approximately $2,400,000 was written off relating tc
Calavera Hills Water Reclamation Facility.
June 30, 1992 with an estimated cost to complete of approxim
55 (Conti.
0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(6) Joint Ven turea
Encina Water Pollution Control Facilitv:
The Encina Water Pollution Control Facility (the Facility) is a
system owned jointly by the Cities of Carlsbad and Vista, the Leu
County Water District, the Buena Vista Sanitation District,
Vallecitos Water District (formerly the San Marcos County
District) and the Encinitas Sanitary District. The Encina Waste
Authority is the operator and administrator of the facility ar
responsible for the management, maintenance and operations of the
system. Ownership percentages are determined by joint agreement a
time the assets are acquired. As of June 30, 1992, the Citier
Districts have the following approximate ownership interest:
City of Carlsbad 25%
City of Vista 33
Leucadia County Water District 16
Vallecitos Water District 16
Encinitas Sanitary District 5
Buena Vista Sanitation District 5
The latest available financial statements of the Facility, dated Jun
1991, show the following:
Total assets $ 117,864,904
Total liabilities 4.845.074
Fund balance 113.019.830
Net change in fund balance $ 14.393.852
The Facility does not recognize net income or loss. Net ope]
expenditures in excess of users' assessments are treated as acc
receivable on the Facility's books and charged to users' accoun
the following year. Conversely, users' assessments in excess o
operating expenditures are treated as a liability and credited aj
users' accounts, also in the following year. Under this basis
operating revenues for the Facility totaled $715,103 in fiscal
1991. The net change in fund balance was attributable to
additions.
The City accounts for its portion of the Facility as a fixed asset (
Sewer Enterprise Fund.
56 (Con t
, 1 0 e
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(6) Joint Ventures. Co n t inued
Encina Financing Joint Powers Authority:
The Encina Financing Joint Powers Authority (the Authority) was cre
on February 1, 1989 between the City of Carlsbad, the City of Vi
the Buena Vista Sanitation District and the Leucadia County W
District. The primary purpose of the Authority is to issue rev
bonds in order to finance the expansion of the Facility. Repaymen
the bonds will be accomplished through payments made by each membe
the Authority pursuant to installment purchase agreements.
individual agreements set forth the purchase price and specify the
service requirements for each member.
The Authority is governed by a Board of Directors, which consists oi
director appointed by each member.
In August 1989, the Authority issued $33,500,000 of revenue bonds
executed installment purchase agreements for approximately the
amount. The following is a table of the outstanding balance owed i
June 30, 1992 by each member and their approximate share in
additional capacity:
Ins tallmen t Approxj
Member balance shar
Buena Vista Sanitation District $ 6,616,250 19.7
City of Carlsbad 12,689,800 37.8
Leucadia County Water District 7,966,300 23.7
City of Vista 6.227.650 18.5
$33.500.000 1oo.o
The installment balances are secured by a pledge of the revenues
each member's wastewater system, net of a deduction for maintenanc
operating costs. Covenants within the agreements require the me
to, among other things, (1) maintain insurance on the facility, ar
establish wastewater rates which are sufficient to pay the ope1
costs and debt service on the bonds and which will result i
revenues equal to 1.1 times the annual installment payments due.
The City's share in the accounts of the Authority is recorded i
Sewer Enterprise Fund. The expansion of the Facility is shown
addition to the fixed assets of the Sewer Enterprise Fund.
57 (Cont
1 0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(7) Retirement Plan
The City contributes to the California Public Employees Retirement Sy
(PERS), an agent multiple-employer public employee retirement sy
that acts as a common investment and administrative agent
participating public entities within the state of California. For
year ended June 30, 1992, the payroll for employees covered by the
was $20,189,245 for Carlsbad employees and $868,928 for Dist
employees. Total payroll for the same period was $23,038,320
$868,928 for Carlsbad and District employees 4 respectively.
All full-time employees are eligible to participate as members of I
Benefits vest after an employee has been a member of the plan for
years. Employees are eligible to retire after ages 50 to 60 wi
years of credited service. Annual retirement benefits are detern
based on age at retirement, the length of membership service and
amount of earnings based on the highest twelve consecutive mc
average. The PERS also provides death and disability benefits. :
benefit provisions and all other requirements are established by :
statute.
Employees are required to make contributions ranging from 7 to 9 pel
of gross pay. The City is required to contribute the remaining amc
necessary to fund the benefits for its members, using the actui
basis recommended by the PERS actuaries and actuarial consultant! adopted by the PERS Board of Administration. The emp
contributions are made by the City on behalf of the employees.
The amount shown below as the "pension benefit obligation" (PBO)
standardized disclosure measure of the present value of pe
benefits, adjusted for the effects of projected salary increase1
step-rate benefits, estimated to be payable in the future as a r
of employee service to date. The measure is intended to help
assess the funding status of the PERS on a going-concern basis, a
progress made in accumulating sufficient assets to pay benefits
due, and make comparisons among employers. The measure is
actuarial present value of credited projected benefits, an
independent of the funding method used to determine contributio
the PERS.
58 (Cont
e 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(7) Retirement Plan. Continued
The PBO was computed as part of actuarial valuations performed 2
include (a) a rate of return on the investment of present and f
assets of 8.75 percent a year compounded annually (8.5 percent i
June 30, 19901, (b) projected salary increases of 4.5 percent a
compounded annually (5 percent as of June 30, 1990), attributabl
inflation, (c) additional projected salary increases of 2.5 pe
(2.75 percent for Carlsbad's safety employees) a year (2 percent
June 30, 1990 for all employees), attributable to seniority/merit
(d) no post-retirement benefit increases. The impact on current
contributions from changes in actuarial assumptions is not availabl
The total unfunded (assets in excess of) pension benefit oblig
applicable to Carlsbad and District employees was $3,263,057
$(89,875), respectively, at June 30, 1991 (the date of the 1
actuarial valuations), as follows:
June 30, 1991. Significant actuarial assumptions used in the valu
Car lsbad District w
Pension benefit obligation:
Retirees and beneficiaries
currently receiving benefits
and terminated employees not
yet receiving benefits $ 18,011,222 495,988 18,507
Accumulated employee
Current employees:
contributions including
allocated investment earnings 12,539,394 634,560 13,173
Employer financed-vested 15,749,846 443,835 16,193
Employer financed-nonvested 1.436.145 41.631 1.477
Total pension benefit obligation 47,736,607 1,616,014 49,352
Net assets available for benefits
at cost 44.473.550 1.705.889 46.172
Unfunded (assets in
excess of) pension
bene f it ob 1 iga t ion $ 3.263.057 (89.875) 3.17:
The market value of the net assets available for benefits as of JUT
1991 was $49,321,167 and $1,891,831 for Carlsbad and the Disi
respectively.
59 (Cont:
0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(7) Retirement Plan. Continued
Of the total change in Carlsbad's PBO from the prior year, $588
resulted from changes in benefit provisions. None of the total ch
:n the District's PBO from the prior year resulted from changes
benefit provisions. Carlsbad ' s and the District I s PBO decreasec
$1,473,069 and $63,448, respectively, as a result of changes
actuarial assumptions.
PERS uses the Entry Age Normal Actuarial Cost Method which is a projc
benefit cost method. It takes into account those benefits that
expected to be earned in the future as well as those already accr
According to this cost method, the normal cost for an employee is
level amount which would fund the projected benefit if it were
annually from date of employment until retirement. PERS USI
modification of the Entry Age Cost Method in which the employer's normal cost is expressed as a level percentage of payroll.
uses the level percentage of payroll method to amortize any unf
actuarial liabilities. The amortization period of the unf
actuarial liability ends on June 30, 2000.
PERS
The significant actuarial assumptions used to compute the actuar
determined contribution requirement are the same as those use
compute the pension benefit obligation, as previously described.
The actuarially determined employer and employee contributions appli
to the City at June 30, 1992, based on an actuarial valuation i
June 30, 1991, were as follows:
Carl sbad District
Mi scel 1 aneous Safety Mi scell aneoi Empl oYees Empl ovees EmDl ovees Covered Covered C Contributions Pavroll Contributions Payroll Contributions e
Required normal cost
Amortization of the unfunded actuarial accrued 1 i abi 1 i ty 7.471 0.06% 33.712 0.44% 499
Total requi red contributions $ 7.001.152 15.88% - a% J33.032
Actual employer contri buti ons 1,196,462 9.50% 1,360,826 17.93% 77,760
Contributions made by the City on behalf of employees 872.527 6.9377 678.98Q 8.94% 56.969
contributions $ 2.068.989 16.43% 2,039,806 -A 134.729
contribution $ 1,993,682 15.82% 1,818,637 23.96% 132,538
Total actual
60 (Cont
! 0 e
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(7) Retirement Plan. Continued
The District has a surplus related to miscellaneous employees as a re
of prior year actuarial gains. In order to maintain a level patter
contributions, the District has chosen not to apply the surplus
offset current year contributions.
The following is three-year trend information which gives an indica
of the progress made in accumulating sufficient assets to pay bene
when due:
Carl sbad District 1p91 leea 1984 m 19pp 1
Net assets available for benefits as a percentage of pension benefit ob1 i gati on 93.2% 93.9% 93.4% 105.6% 106.4% 11
Unfunded (assets in excess of) pension benefit obligation as a percentage of annual covered payroll 17.2% 15.8% 15.1% (7.3)X (8.5)%
Actuari a1 1 y determined employer contributions as a percentage of annual covered payroll 10.8% 10.8"L 12.3% 7.5% 2.4%
Ten-year trend information is not currently available from the California Public Emp Retirement System; therefore, only the available information is presented.
Required Supplementary Information Analysis of Fundi ng Progress
(Unaudi ted)
Carl sbad Em lean. rn 1488 B8.Z
Net assets available for benefits, at cost $ 44,473,550 38,955,507 32,905,600 28,385,300 23,855,51
Pension benef i t ob1 i gati on 47,736,607 41,495,649 35,221,700 30,249,400 26,158.7l
Percentage funded 93.2% 93.9% 93.4% 93.8% 91.
Unfunded pension benefit ob1 i gati on 3,263,057 2,540,142 2,316,100 1,864,100 2,303,2
Annual covered payroll 18,983,745 16,071,500 15,378,600 13,170,000 12,147,9
Unfunded pension benefit obligation as a percentage of annual covered payroll 17.2% 15.8% 15.1% 14.2% 19
61 (Cont:
0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(7) Retirement Plan. Continued
Requi red Supplementary Information Analysis of Funding Progress, Continued (Unaudited)
District
19pl Em 1p8e 1988 1p8z
Net assets available
for benefits, at cost 1,705,889 1,463,415 1,217,447 981,451 823,110
Pension benefit obligation 1,616,014 1,374,798 1,141,723 941,218 749,880
Percentage funded 105.6% 106.4% 106.6% 104.3"L 109.8%
Assets in excess of pension benefit ob1 i gati on 89,875 88,617 75,724 40,233 73,230
825,380 Annual covered payroll 1,229,551 1,047,044 1,026,090 960,250
Assets in excess of pensi on benef i t obligation as a percentage of annual covered payroll 7.3% 8.5% 7.4% 4.2% 8.9%
(8) Deferred Compensation Plan
The City offers its employees a deferred compensation plan creat
accordance with Internal Revenue Code Section 457. The plan, ava:
to substantially all full-time employees, permits them to de
portion of their salary until future years. Amounts deferred mz
exceed the lesser of $7,500 or 25% of a participants' "incli
compensation," as defined in the participation agreement. The dej
compensation is not available to employees until termini
retirement, death or unforeseeable emergency.
All amounts of compensation deferred under the plan, all propert
rights purchased with those amounts, and all income attributab
those amounts, property or rights are (until paid or made availat
the employee or other beneficiary) solely the property and rigl-
the City (without being restricted to the provisions of benefits
the plan), subject only to the claims of the City's general cred
Participant's rights under the plan are equal to those of g(
creditors of the City in an amount equal to the fair market val
the deferred account of each participant.
62 (Cont
0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(8) Deferred Co maensation Plan. Co ntinued
The City believes it has no liability for losses under the plan but
have the duty of due care that would be required of an ordinary pr
investor. The City believes that it is highly unlikely that it use the assets to satisfy the claims of general creditors in the fu
(9) Obligations Under Capital Leases
In August 1987, the City entered into a sale and leaseback agreement
a financial institution for the Community Development Buil
Principal and interest payments totaling $234,529 are to be paid
year through 1997. The City's leasehold interest of $1,602,16(
been recorded in the City's general fixed asset account group.
The following is a summary by year of future minimum lease pay
remaining under capital leases and the present value of minimum
payments at June 30, 1992:
Year endina June 30,
1993 $ 234
1994 234
1995 234 1996 234
1997 234
Thereafter 117
Total minimum lease payments 1,289
Less amounts representing interest m
Present value of minimum lease payments $1.030
(10) Obliaations Under Ow ratina Leases
In June 1988, the City's Redevelopment Agency entered into an agre
to lease a parking lot from a private party. The lease req
monthly rental payments for twenty years. Total annual rent pay
are $39,240 for fiscal years ending June 30, 1992 and 1993 with
adjustments required at three-year intervals after fiscal year e
June 30, 1994.
63 (Conti
0 e
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(10) Obligations Under Ope rating Leases. Co n t inued
In May 1990, the City's Redevelopment Agency entered into an agreemen
lease a parking lot on Carlsbad Village Drive from a private pa
The lease requires annual rental payments of $52,200 for five ye
commencing July 1, 1990.
The following is a schedule by year of future minimum rental payn
required under the operating leases at June 30, 1992:
Year endinn June 30,
1993 $ 91,440
1994 91 , 440
1995 93 , 794
1996 41 , 954
1997 41 , 954
Thereafter 526.119
Total minimum lease payments 9886.701
(11) Long-term Debt
The following is a summary of changes in the principal balanc
long-term debt for the year ended June 30, 1992:
Principal Princ
Ba 1 an c e Balai
July 1, Retire- June
1991 menta Le9
General long-term debt
account group: Bonds $ 13,585,000 625,000 12,96C
Special assessment debt with 8,765,000 300,000 8,462
Obligations under capital 144,708 1,03(
governmental commitment
leases 1 , 175,330
Certificates of participation 8.340.004 250 .OOO 8.09(
long-term debt $ 31,865.334 1.319.708 30.54 Total general
Enterprise funds: Bonds 40 , 000 40,000
Certificates of participation 12,700,000 645,000 12,05
12.68 Installment purchase agreement 12.689.804 -
Total enterprise funds $ 25.429.804 685.ooo24.74
64 (Con t
m 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(11) Long-term Debt. Continued
Long-term debt at June 30, 1992 is comprised of the following issues:
Bala
June
le!
General Long-term Debt :
1967 Carlsbad Building Authority Revenue Bonds,
remaining principal and interest due on December 15,
1992, interest is 6.0% per annum, payable from the
General Fund $ 35
1969 Carlsbad Parking Authority Revenue Bonds,
principal due in amounts ranging from $100,000 to
$125,000 on October 1 of each year through 1995,
interest payable on October 1 and April 1 at 6.4%
per annum, payable from the General Fund 450
1981 Carlsbad Parking Authority Revenue Bonds,
principal due in amounts ranging from $75,000 to
$150,000 on February 1 of each year through 2001,
interest payable on August 1 and February 1 at 8.0%
per annum, payable from the General Fund 1.ooo
revenue bonds 1,485
Parking and building authorities
1988 Carlsbad Housing and Redevelopment Commission Tax
Allocation Bonds, principal due in amounts ranging
from $290,000 to $595,000 on April 1 of each year
through 2003, a principal payment of $2,890,000 on
April 1, 2007, and a principal payment of $3,950,000
on April 1, 2011, interest payable on October 1 and
April 1 at rates varying from 5.9% to 7.8% per annum 11.475
Total bonds payable 12,960
1986 College Boulevard Assessment District Bonds,
principal due in amounts ranging from $320,000 to
$910,000 on September 2 of each year through 2006,
interest payable on September 2 and March 2 at rates
varying from 7.25% to 8.0% per annum 8,465
1,030 Obligations under capital leases (note 9)
65 (Conti
I. e
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(11) Long-term Debt. Continued
Balan
June. m
General Lonn-term Debt. Continued:
1988 Carlsbad Certificates of Participation, principal
due in amounts ranging from $260,000 to $815,000 on
August 1 of each year through 2008, interest payable
on August 1 and February 1 at rates varying from
6.0% to 8.0% per annum $8.090
Total General Long-term Debt $30.545
EnterDrise Fund Long-term Debt:
1988 Carlsbad Municipal Water District Certificates of
Participation, principal due in varying amounts
ranging from $685,000 to $1,425,000 on May 1 of each
year through 2004, interest payable on May 1 and
November 1 each year at rates varying from 6.4% to 7.3% per annum 12,055
Encina Financing Joint Powers Authority (EFJPA)
Installment Purchase Agreement, principal due in
varying amounts ranging from $274,630 to $1,049,276
on August 1 of each year from 1994 through 2014,
interest payable on February 1 and August 1 each
year at rates varying from 6.0% to 6.875% per annum 12.689
24,744
Less unamortized discount and issuance costs (347
Less current portion (685
Total Enterprise Fund Long-term Debt $ 23,712
Reserve funds of approximately $5,130,000 are required to be held in
service funds to secure the payment of principal and interest on tl outstanding debt issues b
A portion of the Tax Allocation Bonds and the EFJPA Installment Purcl
Agreement are subject to mandatory redemption in part from sinking
payments. These sinking fund payments have been included in the dt
service requirements which follow.
66 (Cont
0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(11) Long-term Debt. Continued
Debt service requirements to maturity for general long-term debt a
follows :
Parking and Certificates
Authorities Allocation District Parti-
Building Tax Asses smen t of
c i Da t ion Revenue Bonds Bonds Bonds
1993 $ 316,650 1,137,938 973,180 866,448 3,:
1994 293,200 1,135,828 973,815 865,054 3,:
1995 303,000 1,142,222 972,175 866,873 3,:
1996 287,000 1,146,598 968,290 866,733 3,:
1998-2002 633,000 5,786,452 4,814,602 4,290,225 15,5
2003-2007 - 5,860,824 4,764,000 4,262,400 14,e
1997 150,000 1,148,522 966,918 859,795 391
2008-20 11 - 4.750. 28Q - 1.700.80Q Ad
1,982,850 22,108,664 14,432,980 14,578,328 53,l
Less amounts
representing interest (497,8501 (10,633,664) 15,967,980) (6,488,328) (E
Total general
long-term
debt $ 1.485.004 11.475.000 8.465 .OOQ 8.090.000a
Debt service requirements to maturity for the enterprise funds a
follows:
Water Enc ina
District Installment
Certificates of Purchase
Participation Ag r e emen t Ts
1993 $ 1,527,538 844,452 2,371
1994 1,528,696 1,110,706 2,634
1995 1,526 , 248 1,108,498 2,63L
1996 1,525,098 1,108,730 2,63:
1997 1 , 5 24 3 822 1,107,542 2363;
1998-2002 7 , 628 , 612 5,527,676 13,15f
2003-2007 3,054,774 5,497,656 8,55:
2008-2012 - 5,460,704 5,46(
2013-2015 - 3.259.035 3.25!
18,315,788 25,024 , 999 43 , 34(
interest (6.260.788 1 (12.335. 199) (18.591 Less amounts representing
Total Enterprise Fund debt $ 12.055.0OQ 12.689.804 24.741
67 (Cont:
0 0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(11) Lonn-term Debt. Continued
At June 30, 1992, the City was in compliance with all significant
covenants.
In November 1988, the District issued $14,370,000 in Certificate
Participation. A portion of the proceeds was used to rl
$12,000,000 of the outstanding 1984 Certificates of Participation
COPs). The District deposited funds in an irrevocable trust wit
escrow agent to provide for all future service payments on the
COPs. As a result, the 1984 COPs are considered to be defeased an1
liability for those certificates is not included in the Distr
financial statements. At June 30, 1992, $10,800,000 of outsta
1984 COPs are considered defeased.
The College Boulevard Assessment District Bonds were issued under
provisions of the Improvement Bond Act of 1915. The bonds were ir
to finance the public infrastructure improvements project on Co:
Boulevard. If a delinquency occurs in the payment of the asses1
installments, the City, at the end of the fiscal year of delinquc
has a duty to transfer to the debt service fund the amount of
delinquency out of available funds of the City. Available
consist of any surplus funds of the City not required for 1i
municipal obligations. This duty of the City is continuing durinj
period of delinquency, until reinstatement, redemption or sale of
delinquent property. Even though neither the faith and credit no1
taxing power of the City is pledged for the payment of the bonds
City is obligated in the manner stated above. Accordingly, these
have been recorded in the general long-term debt account group oj
City.
The College Boulevard Assessment District has delinquencies in the a
of $362,535 for assessments due in fiscal years 1990-91 and 199
Although the delinquencies are 20% of the total assessment, onlj
major property owner is delinquent and all principal and int
payments were made without use of the reserve fund. The City's su:
foreclose on the property is currently being delayed becausc
bankruptcy actions a
68 (Conti
h 0 W
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(12) Advances To and From Other Funds
The following table shows amounts advanced from funds within the Cit:
other funds within the City at June 30, 1992:
Advances From Advances To hou
Park Development Fund $ 2,550, Planned Local Drainage
Facilities Fund 300 ,
Redevelopment Area I1 Fund 30 3
Redevelopment Project Fund 7,460,
General Fund Capital Projects Funds:
Capital Projects Funds: Capital Projects Funds: Capital Construction Fund Public Facilities
Construction Fund 950
Traffic Impact Fund 1,043
Construction Fund Park Development Fund 500
Total advances $ 12.833
Public Facilities
(13) 2
The following table shows amounts due from funds within the City to
funds within the City at June 30, 1992:
Due to
General SC &!ad - F
Due from:
Special Revenue Funds:
Section 8 Housing Authority Fund $ 279,577
Senior Nutrition Fund 3,566
Cornunity Development Block Grants Fund 205 , 040
State Grants Fund 139,729
Capital Projects Funds:
Enterprise Funds: - 171
171
Water Utility Fund -
To tal $ 627.912 -
69 (Cont
0
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
0
(14) Fun d Balances/Retained Earnings
The following is a summary of reserved and unreserved fund balances
retained earnings as of June 30, 1992:
Governmental Fund Types Speci a1 Debt Ca
Fund Bal awes General Revenue Servi cg Prc
Reserved for:
Loans receivable $ Inventory Prepaid expenditures 43,500 165,881 Debt service
Low and moderate income housing - 1,891,697 Rent interruption insurance 131,000 -
Encumbrances 676,074 237,261 - 1.9!
- 164,488 - 33,358 - -
- - 4,904;027
2,4! - - Advances to other funds 7 ,ill ,107 - -
7.995.039 2.459.327 4.904.027 4,4[
capital projects - 121,656 - 18,OI
Unreserved : Designated for approved
Designated for continuing appropriations 851,738 - -
Undesi gnated 7,962.296 3.961.800 - m
8,814.034 4.083.456 - 24,11
Total fund balances $ 16.809.073 6.542.783 4,904,027 2&$
Proprietarv Fund TJ
Intel
EnterDrise Serv
Reserved for:
Debt service $ 2,349,167
Rate stabilization and other 1.005. 216 d
3,354,383
Un r e s e rve d 31.467.026 3.790
Total retained earnings $ 34.821.409 1.790
Reserves for loans receivable, inventory, prepaid expenditures
advances to other funds, excluding accrued interest thereon,
established to show that certain assets are already committed to 1
purposes and are not available for discretionary expenditures.
Reserves for debt service represent resources legally restricted tc
payment of long-term debt principal and interest maturing in f
years.
70 (Conti
, e
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
0
(14) Fund Balances/ Retained Earnings. Con tinued
Reserves for low and moderate income housing represent monies require1
be expended on low and moderate income housing.
Reserves for rent interruption insurance represents monies required ti
set aside under a bond indenture.
Reserves for encumbrances represent commitments related to unperfc
contracts for services and undelivered goods.
Reserves for rate stabilization and other represent amounts restrict€
offset future water rate increases and other uses.
Unreserved-undesignated represents the fund balance or retained ean
remaining after reduction for reserved and designated fund balance
retained earnings.
As of June 30, 1992, the Capital Projects - Redevelopment Project
had a deficit fund balance of $6,657,664.
be funded by property tax increments received in the future.
This deficit is expect€
(15) Changes in Contributed Cao i tal
Intel
Enterprise Sen Funds Fur
Contributed capital, June 30, 1991 $ 72,448,230 4,676
Additions:
Cash 708,460
Fixed assets 2,000 , 936 394
Residual equity transfer from General Fund 329,800 45 9
Residual equity transfer from Enterprise Fund e 41
Contributed capital, June 30, 1992 $ 75.487.426 u
71 (Cont
w
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
0
(16) Senme nt Information for EnterDrise Funds
The City maintains four enterprise funds that provide water, sewei other services, Segment information for the year ended June 30, is as follows:
Carl sbad
Municipal To Water Go1 f Sol id Enter
1 strict Course 5.eKe.r !hsk h
Operating revenues $ 9,379,035 - 4,248,921 39,244 13,6t
Operating expenses: Depreci ati on and amortization 1,124,838 - 1 , 078 , 1 57 - 2,2( Other 8.395. 726 - 2.998.702 100,884 11.4!
Operating income (loss) (141,529) - 172,062 (61,640) (: Nonoperating income
(expenses), net 1.112.868 60.53 7 11.614.554) 131.129 (3'
Net income (loss) $ 971.339 60.537 j1.442.49e) 69.489 (31
Begi nni ng balance 36,552,265 1,530,190 34,365,775 - 72,41
Current year addi ti ons 2,103.759 329.80Q 605.63 7 -3.0: -
- 75.41
..
Contributed capital :
$ 38.656.0 24 1.859.99Q 34,971.412 Ending balance
Property, plant and equipment: Addi ti ons 2.51 2.238 147.854 4.532.9 47 - 7.1' -
Deletions 52.636 - 2.542.883 -2.5' -
Net working capital $ 17.693.5 47 1.271.781 13.903.3 74 A!iu,xLi
operating revenues $12.055.000 - 12.689.800-m - Debt payable from
Total assets 68 , 702 , 468 2 , 050,395 68,033,939 98,580 138,81 Total 1 i abi 1 i ties 13.110.617 503 15.453.748 11.679 28.5
Total equity $ 55.59 1,851 2,049,892 52,580.191 86.901 110.3'
(17) Assesement District Bond Issues
As of June 30, 1992, the City had four series of Assessment DIE
Bonds outstanding in the amount of $24,326,210. These bonds
issued under the provisions of the Improvement Bond Act of 191
1915 and were used to finance public infrastructure improl
projects.
72 (Cont:
v
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
0
(17) Assess ment District Bond Issues. Co ntinued
Reserve funds of approximately $2,430,000 are held to secure paymei
principal and interest on the outstanding bonds.
For the bond issuances noted above, the City is not obligated ir
manner for the payment of debt service in the event of default b
property owners but is only acting as agent for the property owne
collecting the assessments, forwarding the collections to bondhol
and initiating foreclosure proceedings, if appropriate. Accordi
no liability for these bond issuances has been recorded in the Ge
Long-term Debt Account Group and all debt service transactions
been recorded in an Agency fund.
(18) MortBae Revenue BonQ
Single-Family Mortgage Revenue Bonds have been issued to provide fun
purchase mortgage loans secured by first trust deeds
newly-constructed and existing single-family residences. The pu
of this program is to provide low interest rate home mortgage loa
persons of low or moderate income who are unable to qualifj
conventional mortgages at market rates. Multi-Family Housing RE
Bonds are issued to provide construction and permanent financii
developers of multi-family residential rental projects located i
City to be partially occupied by persons of low or moderate income.
The balance of the revenue bonds outstanding under these programs
June 30, 1992 is $33,281,941.
The bonds, together with interest thereon, are limited obligations c
City payable solely from bond proceeds, revenues and other a~
deed of trust, irrevocable letters of credit, and irrevocable I
bonds. In the opinion of City officials, these bonds are not pz
from any revenues or assets of the City, and neither the full fait
credit nor the taxing power of the City of Carlsbad, the sta
California, nor any political subdivision thereof, is obligated t
payment of the principal or interest on the bonds. According1
liability has been recorded in the General Long-term Debt Account (
One of the series of the Multi-Family Housing Revenue Bonds, w
current outstanding balance of $14,646,941, is in default d
non-payment. The surety is currently paying the debt service c
bonds.
derived solely from home mortgage and developer loans secured by
(19) Commitments and Contingencies
The City is a defendant in certain legal actions arising in the
course of operations. In the opinion of management and legal co
material adverse effect on the City's financial position.
any liability resulting from these actions will not result
73 (Cont
L @
CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
e
(19) Commitments and Contingencies Co n t inuea
In November 1991, the City of Carlsbad entered into an agreement with
San Diego Association of Governments (SANDAG), whereby SANDAG will
up to $8,200,000 of TransNet funds from the 1991 Series A Sales
Revenue Commercial Paper Notes to the City of Carlsbad 01
reimbursement basis. The funds are to be used by the City of Carl
to accelerate the implementation of the Palomar Airport/I-5 Interch
Improvement Project. Interest costs on borrowed funds are limite
under this agreement during the year ended June 30, 1992.
the rate paid by SANDAG on the commercial paper. No money was borr
(20) Post-Retirement Health Care
In addition to the pension benefits described in Note 7, the District
accordance with the District 's Administrative Code, pro1
post-retirement health care benefits to its full-time emplc
(including their dependents) who voluntarily retire after the age c with no less than 5 years of service and whose age combined with J
of service equals 70 or more or have reached the mandatory retire
age with at least 5 years of service. Currently, two retirees
these eligibility requirements and are receiving benefits.
The District is to pay 100% of the premiums for health insurance whic
to be coordinated with Medicare and other benefits provided by fel
and state law, when available, to the extent it reduces the COE
insurance premiums. Expenditures for post-retirement health
approximately $2,300 were charged to expense for post-retirement h
care costs during 1992. Based on an actuarial valuation perform4
of November 1991, the District's liability for the current and
service costs of these benefits is approximately $1,600,000.
benefits are funded on a pay-as-you-go basis. Expenditurer
(21) Prior Period Ad1 'us tmen t
In prior years, the City recorded interest on advances that
measurable but not available as revenue rather than as def
revenue. As amounts are not available, they should be accounted f
deferred revenue. Therefore, a prior period adjustment was made
June 30, 1991 to reclassify the accumulation of these charges ii
amount of $2,728,947 from the General Fund fund balance to def
revenue.
74
0 APPl 0 Peat Ma rw i c k
Certified Public Accountants
750 B Street
San Diego. CA 92101
Independent Auditors' Report
on Supplementary Schedule
of Federal Financial Assistance
The Honorable Members of City Council
City of Carlsbad, California:
We have audited the general purpose financial statements of the Ci'
Carlsbad, California (the City) as of and for the year ended June 30,
and have issued our report thereon dated October 8, 1991. These ge purpose financial statements are the responsibility of the management o
City. Our responsibility is to express an opinion on these general pu
financial statements based on our audit.
We conducted our audit in accordance with generally accepted aud
of the United States. Those standards require that we plan and perfon
audit to obtain reasonable assurance about whether the financial state
are free of material misstatement. An audit includes examining, on a
basis, evidence supporting the amounts and disclosures in the general pu
financial statements. An audit also includes assessing the accou
principles used and significant estimates made by management, as we1
evaluating the overall financial statement presentation. We believe tha
audit provides a reasonable basis for our opinion.
Our audit was made for the purpose of forming an opinion on the gel
purpose financial statements of the City of Carlsbad, California taken
whole. The accompanying schedule of federal financial assistance is pres1
for purposes of additional analysis and is not a required part of the gel
purpose financial statements. The information in that schedule has
subjected to the auditing procedures applied in the audit of the ge
purpose financial statements and, in our opinion, is fairly stated in
material respects in relation to the general purpose financial state]
taken as a whole.
standards and Government Auditing Standards, issued by the Comptroller Ge
Kfd6 kb&dzC;/lc)&.
October 8, 1991
c -,
1
Vewber F rrn of Y v' "e d Pear Marwlcr Goeraeler
Sch a 0
CITY OF CARLSBAD
Schedule of Federal Financial Assistance
For the year ended June 30, 1991
Pass- Pass- Federal/Pass-Through Grantor/ Federal Through Through Toti
Grantor's # Expendi - Program Title CFDA # Aaencv
MAJOR PROGRAM:
Lower Income Housing
Assistance Program
(Section 8-Existing Housing and State Agency Program) 14.156 N/A N/A $ 1,751
NONMAJOR PROGRAMS :
Housing Voucher Program 14.177 N /A N /A 148
Community Development Block Grant/Entitlement Grants 14.218 N/A N/A 20s
Community Development Block GrantISmall Cities Program 14.219 A 26299-E 7i
Highway Research, Planning and
Construction (FAU Entitlement Program) 20.205 B M-5101(10) 45
State and Local Government
Fiscal Assistance General
Revenue Sharing 21.300 N/A N/A E
National Endowment for the
Arts - Locals Program 45.023 N/A N/A 11
Title 111, Parts A ti B 13.633 C 29521 1
Special Programs for the Aging,
Special Programs for the Aging,
Title 111, Part C, Nutrition Services 13.635 C 29521 16!
2 (Cont.
,
Schedule. Con
0
CITY OF CARLSBAD
Schedule of Federal Financial Assistance, Continued
For the year ended June 30, 1991
Pass- Pass-
Federal/Pass-Through Grantor/ Federal Through Through To 1
Program Title CFDA 11 Agency Grantor's # Expend
NONMAJOR PROGRAMS, Continued:
National Park Service, Department
of the Interior (Historic
Preservation Survey) 15.904 D 89-11-211 $ 11
Library Partnership-for-Change
(Latino Outreach) 84.034 E 40-1954 21
$ 2.46
Pass-Through Agency:
A. The County of San Diego, California.
B.
C.
D. The California Department of Parks and Recreation. E. The California State Library.
The California Department of Transportation.
The San Diego County Department of the Area Agency on Aging.
See accompanying notes to schedule of federal financial assistance.
3
w 0
CITY OF CARLSBAD
Notes to Schedule of Federal Financial Assistance
For the year ended June 30, 1991
(1) General
The accompanying schedule of federal financial assistance presen
of Carlsbad (the City). The City's reporting entity is defi
Note 1 to the City's general purpose financial statements
expenditures of federal financial assistance received direct1
federal agencies as well as expenditures of federal fii
assistance passed through other government agencies are included
Schedule.
expenditures of all federal financial assistance programs of th
(2) Basis of Accounting
The accompanying schedule of federal financial assistance is prc
using the modified accrual basis of accounting, which is descri
Note 1 to the City's general purpose financial statements.
(3) Relationship ta General Purpose Financial Statements
Federal financial assistance program revenues and expenditure
reported in the City's general purpose financial statements as fo:
Fund Balance (Deficit) June 30, 1990 Revenues Expenditures Transfers
Speci a1 Revenue Funds: Community Development
Federal Grants (National Endowment for the Arts and Partnershi ps-for- Change) (18,461) 75,366 36,052 - Section 8 Housing Authority 118,545 1,899,457 1,899,847 - 1 Senior Nutrition 9,554 168,162 177,716 -
Block Grant ( 41 ,648) 326,999 285,351 -
C Block Grant $ 525,200 28,212 - -
Capital Projects Funds: Community Development
Federal Grants (FAU Entitlement and
Historic Preservation) (1,693,251) 1,535,065 59,431 217,617 Revenue Sharing 222.256 18.616 5.277 (235.600) .
Total $ _(877) 4.051.87 7 2.463.669 uua3 f
(Con!
4
w 0
CITY OF CARLSBAD
Notes to Schedule of Federal Financial Assistance, Continued
(4) Highway Research, Planning and Construction Grant
During fiscal year 1990-1991, all legal action between the C
CALTRANS relating to the Highway Research, Planning and Cons
Grant was settled. As of June 30, 1991, the City has filed al:
for reimbursement, and all amounts have been reimbursed by Ci
In its settlement with the City, CALTRANS stated that no findir
been or will be made on the question of contract compliance or
supervision. The State of California has agreed not to a
otherwise review, at any the in the future, the Highway R
Planning, and Construction program for contract compliance,
supervision, or any other question of compliance with the
Agreement, program supplement, or regulations and procedures.
5
APPE v
Peat Ma rw ic k
Certified Public Accountants
750 E Street
San Diego, CA 92101
Telephone 619 233 8000 Telefax 619 696 0121
October 8, 1991
CONFIDENTIAL
Honorable Mayor and City Council
City of Carlsbad:
We have audited the general purpose financial statements of the City o Carlsbad (the City) for the year ended June 30, 1991 and have issued ou
report thereon dated October 8, 1991. In planning and performing ou
audit of the general purpose financial statements of the City w
considered its internal control structure in order to determine ou
auditing procedures for the purpose of expressing our opinion on th
general purpose financial statements and not to provide assurance on th
internal control structure. We have not considered the internal contra
structure since the date of our report.
A material weakness is a condition in which the design or operation of th
specific internal control structure elements does not reduce to
relatively low level the risk that errors or irregularities in amount
that would be material in relation to the financial statements beir!
audited may occur and not be detected within a timely period by employee
in the normal course of performing their assigned functions. 01
consideration of the internal control structure would not necessaril
disclose all matters in the internal control structure that might 1
material weaknesses under standards established by the American Institut
the internal control structure and its operation that we consider to t
material weaknesses as defined above.
During our audit we noted certain matters involving the internal contrc
structure and other operational matters that are presented for yo\
consideration. These comments and recommendations, all of which have bet
discussed with the appropriate members of management, are intended 1
improve the internal control structure or result in other operatii
efficiencies andAre summarized as follows:
of Certified Public Accountants. However, we noted no matters involvir
CASH
An accountant performs the bank reconciliations at the end of the mptl
however, no further review of the accuracy of these reconciliations
performed. In addition, we noted that for one bank account, the bank
Mernwr F rrn 01
w a
Peat Marwick
Honorable Mayor and City Council
City of Carlsbad
October 8, 1991-
Page 2
listing of authorized signers had not been updated and contained the nm
of an employee who no longer works for the City. In order to ensure tha
cash balances are not subject to the risks of errors or irregularities
the City should review all bank reconciliations monthly and periodicall
update authorized check-signers listings with all bank accounts.
Additionally, the City currently has no pdicy fer handling stale-data
checks. As a result, several checks remain outstanding on bar;
reconciliations, causing additional time monitoring and tracking thes
checks. We understand that the City is working on establishing a writte
policy to resolve these old, stale-dated checks in accordance with Stat
of California law.
ADHIlVISTRATIVB EURCTIOHS
We noted that several capital projects funds had advances from other func
outstanding at year-end which could have been repaid with the cas
balances existing within those funds. The City should establish a writtr
policy which would enumerate repayment terms and dates for all interfux
receivables. This would eliminate excess receivables and payables arisi1
between several funds in the City's records.
OVBRFlRAn ALLOCATIONS
The City has an indirect cost allocation plan which it follows 1
allocating overhead costs to other funds and departments. However, thi
plan is not utilized for allocations to capital projects funds, includir
TDA and TransNet. As the City's overhead application factor under il
plan is approximately three times the factor that was used for the TDA ar
TransNet funds during the year ended June 30, 1991, more indirect cost
could have been allocated to these funds and reimbursed through grani
from the San Diego Association of Governments. We recommend that the Cil
use the same overhead allocation factor for the TDA and TransHet funds 1
it uses on other funds, as this would provide a more systematic a~
uniform procedurdof allocation.
e 0
-Peat Marwick
Honorable Mayor and City Council
City of Carlsbad
October 8, 1991'
Page 3
PRIOR YEARS' COMMElVT S
Debasit Refunds
There is currently no reconciliation performed between the detail of th
contractor's deposits held in agency funds and the general ledger total
The subsidiary ledger should be reconciled to the general ledger on
monthly basis. Such reconciliations would reduce the possibility c
incorrect amounts being refunded and provide for a more accurat
accounting of the liability.
Disaster Recovery Plan
We noted that there is no disaster recovery plan other than for E1
processing. We recommend that the City develop a formal written plax
Such a plan would provide a 8ource of guidance and control for returnir
to normal operations in case of a disaster. In addition, manual recorc
in the Finance Department are not physically protected in case of a firc
We recommend that fireproof cabinets be used for important documents t
catastrophe.
ensure that important information is not lost in the event of such
Payroll and Personnel
The payroll clerk has access to the payroll master file and generates tf
biweekly payroll. These are incompatible duties and should be segregatc
between the Personnel Department and the Payroll Department. Alsc
changes made to the payroll master file are not reviewed on a consistex
basis by the Personnel Department. We recommend the printing of an edl
listing after each master file change. This listing should be reviewed 1
someone other than the individual making the change through comparisc
with the source documents. Such a review could prevent unauthorizc
changes to the master file and possible overpayment of salaries and/(
vacation time.
Vacations are not currently required for the City's employees. \
all employees to take regular vacations will strengthen internal contro:
by preventing employees from maintaining continuous control over the:
areas of responsibility. Replacement personnel often bring a fre:
perspective to the job and have been recently instructed in propc
procedures. As such, management increases the likelihood of discoverii
/
recommend that the City institute a mandatory vacation policy. Bequirii
w W
Peat Marwic k
Honorable Mayor and City Council
City of Carlsbad
October 8, 1991-
Page 4
repetitive errors, as well as intentional misrepresentations in th
of cross-training duties which allows for uninterrupted activity in th
event of unexpected absence or turnover.
accounting records. Additionally, this encourages the desirable practic
Internal Audit
The City currently has only one internal auditor. With the continue
growth of the City, the City may want to reevaluate the internal audi
function. A properly functioning Internal Audit Department can great1
enhance adherence to internal controls within all of the City'
departments and provide additional revenues through audits of variou
taxpayers, We would suggest that the City develop an annual interna
audit plan indicating the areas to be audited and the time required. I
Department so that the necessary reviews can be performed.
warranted, the City should consider expanding the Internal Audi
*****
This report is intended solely for the use of management and should not t:
used for any other purpose.
We would like to point out that this letter, by its nature, is critical 1
that its primary emphasis is to convey recommendations for improvement 81
does not include the many strong features of the City's system of interna
accounting control.
We would like to express our appreciation for the courtesy and help tha
was given to us by the staff of the City of Carlsbad during the audit. 1
would be pleased to discuss our comments further at your convenience.
/ kfn?66%f dA
e 0 APPI Peat Marwick ;
Certified Public Accountants
750 E Street
San Diego, CA 92101
The Honorable Members of City Council
City of Carlsbad, California:
At your request, we have applied the certain agreed-upon procedures enumei
below to the accompanying Appropriations Limit Worksheet of the Cit:
Carlsbad, California for the year ended June 30, 1991, solely to assist yc
meeting the requirements of Section 1.5 of Article XIIIB of the Calif(
Constitution. The procedures performed and our findings were as follows:
1. We read Article XIIIB of the California Constitution.
2. We obtained the completed Appropriations Limit Worksheet and deter]
that the appropriation limit and annual adjustment factors were adc
by resolution of the City Council. We also determined that
population and inflation options were selected by a recorded vote oi
City Council.
3. For the accompanying Appropriations Limit Worksheet, we added last YE
limit to the total adjustment, and compared the resulting amount to
year's appropriation limit and found it to be in agreement.
4. We compared the current year information presented in the accompar
Appropriations Limit Worksheet to the other supporting worksheets
found it to be in agreement.
5. We compared the prior year's appropriation limit presented in
accompanying Appropriations Limit Worksheet to the prior ye
appropriation limit, as adjusted, which was adopted by the City Cot
and found it to be in agreement.
Because the above procedures do not constitute an audit conductec
accordance with generally accepted auditing standards, we do not expres
opinion on any of the items referred to above. In connection with
procedures referred to above, no matters came to our attention that cause
to believe that the accompanying Appropriations Limit Worksheet was
computed in accordance with Article XIIIB of the California Constitution.
we performed additional procedures or had we conducted an audit in accord
with generally accepted auditing standards, other matters might have com
our attention that would have been reported to you. This report-re1
solely to the items specified above and does not extend to any finar
statements of the City of Carlsbad, taken as a whole.
-- - -~ -
Member Firm of
---A Klynveld Peat Marwck Goerdeler
e 0
This report is intended solely for the use of management and members oj
City Council of the City of Carlsbad and should not be used for any
purpose. This restriction is not intended to limit the distribution of
report which, upon acceptance by the City of Carlsbad, California, is a m
of public record.
Kt46 PddA
April 6, 1992
* e
CITY OF CARLSBAD, CALIFORNIA
Appropriations Limit Worksheet
Year ended June 30, 1991
A. Appropriation limit at June 30, 1990 $ 45,797,(
B. Adjustment factors:
Population (X) 1.0243 X
Inflation (X) 1.1250 X
Total adjustment (x) 1.1523 %
C. Total adjustment 6.976 .(
D. Appropriation limit at June 30, 1991 $52.773.(
----- ------ ------------- -----------
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0 0
APPENDIX I
AGREEMENT
THIS AGREEMENTI made and entered into as of the day of
, 19-, by and between the CITY OF CARLSBAD, a municipal corporatior
I hereinafter referred tl hereinafter referred to as "City", and
as "Consultant".
RECITALS
City requires the services of a
consultant to provide the necessary
of
qualifications to provide the services required by the City;
services for preparatioi
; and Consultant possesses the necessary skills anc
NOW, THEREFOREI in consideration of these recitals and the mutual covenant
contained herein, City and Consultant agree as follows:
1. CONSULTANT'S OBLIGATIONS
1
t e e
2. CITY OBLIGATIONS
The City shall
3. PROGRESS AND COMPLETION
The work under this contract will begin within ten (IO) days after receipt o
notification to proceed by the City and be completed within days of that date
Extensions of time may be granted if requested by the Consultant and agreed to ir
writing by the . The will give allowancc
for documented and substantiated unforeseeable and unavoidable delays not caused b:
a lack of foresight on the part of the Consultant, or delays caused by City inaction o
other agencies' lack of timely action.
4. FEES TO BE PAID TO CONSULTANT
The total shall not exceed the fee payable according to Paragraph 6, "Payment c
Fees," and shall be $ . No other compensation for services will bi
allowed except those items covered by supplemental agreements per Paragraph E
"Changes in Work."
5. DURATION OF CONTRACT
This agreement shall extend for a period of from date thereof. Thr
additional two (2) year periods, based up01 contract may be extended for
satisfactory performance and the City's needs.
2
a 0
6. PAYMENT OF FEES
7. FINAL SUBMISSIONS
Within days of completion and approval of the th
Consultant shall deliver to the City the following items:
8. CHANGES IN WORK
If, in the course of the contract, changes seem merited by the Consultant or the CiO
and informal consultations with the other party indicate that a change in the condition
of the contract is warranted, the Consultant or the City may request a change in contrac
Such changes shall be processed by the City in the following manner: A letter outlinin!
the required changes shall be forwarded to the City by Consultant to inform them of thl
proposed changes along with a statement of estimated changes in charges or timf
schedule. A supplemental agreement shall be prepared by the City and approved by thc
City according to the procedures described in Carlsbad Municipal Code Section 3.28.1 72
Such supplemental agreement shall not render ineffective or invalidate unaffected portion!
of the agreement.
9. COVENANTS AGAINST CONTINGENT FEES
The Consultant warrants that their firm has not employed or retained any cornpan'
or person, other a bona fide employee working for the Consultant, to solicit or secure this
agreement, and that Consultant has not paid or agreed to pay any company or person
other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift
3
0 e
or any other consideration contingent upon, or resulting from, the award or making of thi:
agreement. For breach or violation of this warranty, the City shall have the right to annL
this agreement without liability, or, in its discretion, to deduct from the agreement pricr
or consideration, or otherwise recover, the full amount of such fee, commission
percentage, brokerage fees, gift, or contingent fee.
10. NONDISCRIMINATION CLAUSE
The Consultant shall comply with the state and federal laws regardin!
nondiscrimination.
11. TERMINATION OF CONTRACT
In the event of the Consultant’s failure to prosecute, deliver, or perform the work a
provided for in this contract, the City may terminate this contract for nonperformance b
notifying the Consultant by certified mail of the termination of the Consultant. Thc
Consultant, thereupon, has five (5) working days to deliver said documents owned by thl
City and all work in progress to the . The shall make,
determination of fact based upon the documents delivered to City of the percentage c
work which the Consultant has performed which is usable and of worth to the City i
having the contract completed. Based upon that finding as reported to the City Manage1
the Manager shall determine the final payment of the contract.
12. DISPUTES
If a dispute should arise regarding the performance of work under this agreemen
the following procedure shall be used to resolve any question of fact or interpretation nc
otherwise settled by agreement between parties. Such questions, if they becom
identified as a part of a dispute among persons operating under the provisions of thi
contract, shall be reduced to writing by the principal of the Consultant or the City -
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. A copy of such documented dispute shall be forwarded to both partie:
involved along with recommended methods of resolution which would be of benefit tc
both parties. The City or principal receiving the letter shall reply to thc
letter along with a recommended method of resolution within ten (10) days. If thl
resolution thus obtained is unsatisfactory to the aggrieved patty, a letter outlining thl
dispute shall be forwarded to the City Council for their resolution through the Office of thl
City Manager. The City Council may then opt to consider the directed solution to th
problem. In such cases, the action of the City Council shall be binding upon the partie
involved, although nothing in this procedure shall prohibit the parties seeking remedie
available to them at law.
13. SUSPENSION OR TERMINATION OF SERVICES
This agreement may be terminated by either party upon tendering thirty (30) day
written notice to the other party. In the event of such suspension or termination, up0
request of the City, the Consultant shall assemble the work product and put same i
order for proper filing and closing and deliver said product to City. In the event c
termination, the Consultant shall be paid for work performed to the termination datc
however, the total shall not exceed the lump sum fee payable under paragraph 4. Th
City shall make the final determination as to the portions of tasks completed and th
compensation to be made.
14. STATUS OF THE CONSULTANT
The Consultant shall perform the services provided for herein in Consultant’s ow
way as an independent contractor and in pursuit of Consultant’s independent calling, an
not as an employee of the City. Consultant shall be under control of the City only as 1
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the result to be accomplished, but shall consult with the City as provided for in thc
request for proposal.
The Consultant is an independent contractor of the City. The payment made to thc
Consultant pursuant to the contract shall be the full and complete compensation to whicl
the Consultant is entitled. The City shall not make any federal or state tax withholding!
on behalf of the Consultant. The City shall not be required to pay any workers
compensation insurance on behalf of the Consultant. The Consultant agrees to indemnif
the City for any tax, retirement contribution, social security, overtime payment, or workers
compensation payment which the City may be required to make on behalf of thi
Consultant or any employee of the Consultant for work done under this agreement.
The Consultant shall be aware of the requirements of the Immigration Reform anc
Control Act of 1986 and shall comply with those requirements, including, but not limitec
to, verifying the eligibility for employment of all agents, employees, subcontractors ani
consultants that are included in this agreement.
15. CONFORMITY TO LEGAL REQUIREMENTS
The Consultant shall cause all drawings and specifications to conform to a
applicable requirements of law: federal, state and local. Consultant shall provide 2
necessary supporting documents, to be filed with any agencies whose approval i
necessary.
The City will provide copies of the approved plans to any other agencies.
16. OWNERSHIP OF DOCUMENTS
All plans, studies, sketches, drawings, reports, and specifications as herein require
are the property of the City, whether the work for which they are made be executed (
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not. In the event this contract is terminated, all documents, plans, specifications
drawings, reports, and studies shall be delivered forthwith to the City. Consultant shal
have the right to make one (1) copy of the plans for his/her records.
17. REPRODUCTION RIGHTS
The Consultant agrees that all copyrights which arise from creation of the worl
pursuant to this contract shall be vested in City and hereby agrees to relinquish all claim!
to such copyrights in favor of City.
18. HOLD HARMLESS AGREEMENT
The City, its officers, and employees shall not be liable for any claims, liabilities
penalties, fines, or any damage to goods, properties, or effects of any person whatever
nor for personal injuries or death caused by, or resulting from, any intentional or negligen
acts, errors or omissions of Consultant or Consultant’s agents, employees, o
representatives. Consultant agrees to defend, indemnify, and save free and harmless thl
City and its officers and employees against any of the foregoing claims, liabilities
penalties or fines, including liabilities or claims by reason of alleged defects in any plan
and specifications, and any cost, expense or attorney’s fees which are incurred by th
City on account of any of the foregoing.
19. ASSIGNMENT OF CONTRACT
The Consultant shall not assign this contract or any part thereof or any monies du
thereunder without the prior written consent of the City.
20. SUBCONTRACTING
The Consultant shall not subcontract any of the work under this contract without th
prior written permission of the City. If permission is obtained, Consultant shall be full
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responsible to the City for the acts and omissions of Consultant’s subcontractor and 01
the persons either directly or indirectly employed by the subcontractor, as Consultant k
for the acts and omissions of persons directly employed by Consultant. Nothins
contained in this contract shall create any contractual relationship between an)
subcontractor of Consultant and the City. The Consultant shall bind every subcontractoi
and every subcontractor of a subcontractor by the terms of this contract applicable tc
Consultant’s work unless specifically noted to the contrary in the subcontract in questior
approved in writing by the City.
21. PROHIBITED INTEREST
No official of the City who is authorized in such capacity on behalf of the City tc
negotiate, make, accept, or approve, or take part in negotiating, making, accepting, o
approving of this agreement, shall become directly or indirectly interested personally ii
this contract or in any part thereof. No officer or employee of the City who is authorize(
in such capacity and on behalf of the City to exercise any executive, supervisory, c
similar functions in connection with the performance of this contract shall become direct1
or indirectly interested personally in this contract or any part thereof.
22. VERBAL AGREEMENT OR CONVERSATION
No verbal agreement or conversation with any officer, agent, or employee of the Cit
either before, during or after the execution of this contract, shall affect or modify any (
the terms or obligations herein contained nor entitle the Consultant to any addition
payment whatsoever under the terms of this contract.
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23. SUCCESSORS OR ASSIGNS
Subject to the provisions of Paragraph 18, "Hold Harmless Agreement," all terms
conditions, and provisions hereof shall insure to and shall bind each of the parties hereto
and each of their respective heirs, executors, administrators, successors, and assigns
24. EFFECTIVE DATE
This agreement shall be effective on and from the day and year first written above
25. CONFLICT OF INTEREST
The Consultant shall shall not file a conflict of interes
statement with the city clerk in accordance with the requirements of the City of Carlsbac
conflict of interest code. The disclosure categories shall be categories
26. INSURANCE
The Consultant shall obtain and maintain policies of general liability insurance
automobile liability insurance, and a combined policy of worker's compensation an1
employers liability insurance from an insurance company authorized to do business in th
State of California which meets the requirements of City Council Resolution No. 91-40
in an insurable amount of not less than one million dollars ($1,000,000) each, unless
lower amount is approved by the City Attorney or the City Manager. This insurance shz
be in force during the life of this agreement and shall not be canceled without thirty (3(
days prior written notice to the City sent by certified mail.
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The City shall be named as an additional insured on these policies. The Consultan
shall furnish certificates of insurance to the City before commencement of work.
Executed by Consultant this day of , 192
CONSULTANT: CITY OF CARLSBAD, a municipal
corporation of the State of California
(name of Consultant)
By:
City Manager or Mayor
By:
(sign here)
ATTEST:
(print name here)
(title and organization of signatory) ALETHA L. RAUTENKRANZ
City Clerk
(Proper notarial acknowledgment of execution by CONSULTANT must be attached.)
(President or vice-president and secretary or assistant secretary must sign foi
corporations. If only one officer signs, the corporation must attach a resolution certifiec
by the secretary or assistant secretary under corporate seal empowering that officer tcl
bind the corporation.)
APPROVED AS TO FORM:
RONALD R. BALL
City Attorney
BY Deputy City Attorney
B:\AGREEMENTS\AUDIT.AGR
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