HomeMy WebLinkAbout2022-02-08; City Council; ; Economic and Financial Update for the Second Quarter of Fiscal Year 2021-22 and Mid-year Review with Staffing and Other Funding RequestsCA Review CKM
Meeting Date:Feb.8, 2022
To:Mayor and City Council
From:Scott Chadwick, City Manager
Staff Contact:Laura Rocha, Deputy City Manager, Administrative Services
laura.rocha carlsbadca.gov, 760-602-2415
Subject:Economic and Financial Update for the Second Quarter of Fiscal Year 2021-
22 and Mid-year Review with Staffing and Other Funding Requests
Districts:All
Recommended Action
•Receive a report on the economic and financial update for the second quarter of fiscal
year 2021-22
•Receive a report on the results of the mid-year budget review
•Adopt a resolution approving fiscal year 2021-22 mid-year requests and related new
full-time staff positions and transfers of funds between departments in the General
Fund
•Adopt a resolution approving the appropriation and transfer from General Fund,
Recycled Water Fund, Wastewater Fund and Solid Waste Fund reserves to the Carlsbad
Municipal Water District Water Fund to eliminate a liability
Executive Summary
The City Manager committed to provide quarterly updates to the City Council on the economic
outlook and an update on the city’s finances during the COVID-19 emergency. In these updates,
staff provides a presentation on the:
•National, state, regional and Carlsbad-specific economic data
•The city’s most recent financial data
•General progress and execution of the annual budget
This report details economic trends in the recovery from the pandemic and other recent
economic events. In line with regional trends, Carlsbad saw increases in revenues in almost all
categories when compared to the same quarter in the previous fiscal year, and expenditures
are in line with the prior year’s rate of spending.
Additionally, the city completed its first mid-year budget review process with the participation
of all departments citywide. This included departments’ analysis of their revenues and
expenditures to date and whether they were in line with targets adopted for the fiscal year
2021-22 operating budget. Departments also identified areas of underspending that will result
in savings for the city when compared to the adopted budget, such as unintended staff
vacancies.
Feb. 8, 2022 Item #8 Page 1 of 36
This report details individual budget transfers the City Manager authorized between
departments to accommodate mid-year budget requests. Staff had identified savings that
covered all of the budget transfers and there was no impact to the General Fund for fiscal year
2021-22.
During the mid-year process, several departments also made requests to change the number of
full-time or part-time personnel allocated for them in the budget and to authorize a related
General Fund budget transfer that exceeds the City Manager’s authority. These requests
require the City Council’s approval as authorized in Resolution No. 2021-132, in which the City
Council adopted the final operating budget for fiscal year 2021-22 and established controls on
changes in appropriations for budget funds.
Discussion
Economic update
The Carlsbad economy is diverse, has strong industry clusters and is a leader in innovation.
According to the most recent biennial business survey of Carlsbad businesses, released in
January 2022, five key industry clusters are driving growth:
• Life sciences
• Information, communications and technologies
• Cleantech
• Sports innovation and design
• Hospitality and tourism
Companies that call Carlsbad home are at the forefront in these areas of technology and
innovation, and the city’s hospitality and tourism industry generates the second highest
amount of transient occupancy tax among the county’s 18 cities.
The COVID-19 pandemic, which has continued to disrupt business operations, has had
fluctuating levels of impact. It has led to public health orders that at times required people to
stay at home, limited or suspended business operations and events, and reduced tourism and
travel. These restrictions have also had disruptive effects on the national, state, and local
economy. While some businesses have fully recovered, many hotels and resorts and other
hospitality businesses, an important segment of Carlsbad’s economy, continue to be impacted.
Before the COVID-19 pandemic, the economic outlook for the United States, the state, the
County of San Diego and the City of Carlsbad was positive. The local gross regional product
continued to expand along with most of the rest of the nation. The city’s gross regional product
was worth $15.3 billion in 2020, second only to that of the largest city in the county, San Diego.
From 2018 to 2019, Carlsbad’s gross regional product grew by $800 million.
But from 2019 to 2020, Carlsbad’s gross regional product remained unchanged, indicating a
flattening during the COVID-19 pandemic.
The National Bureau of Economic Research determined that a peak in monthly economic
activity occurred in the U.S. economy in February 2020, marking the end of the longest
recorded U.S. expansion, which had begun in June 2009. The pandemic brought on a global
economic crisis and the impact on the U.S. economy was swift. Compared to the other
Feb. 8, 2022 Item #8 Page 2 of 36
recessions that the U.S. experienced since 1980, the economic drop caused by COVID-19 was
extreme.
As businesses were shuttered due to public health orders, unemployment numbers rose, with
an estimated 20.5 million people in the U.S. out of work at the onset of the pandemic,
according to a September 2020 Hamilton Project report. In Carlsbad, unemployment rose to a
peak of 13.8% in April 2020. Government stimulus from federal, state and county programs
played a major role in reversing the downward trend in the economy, even mitigating some of
the economic impact of the subsequent surges.
In June 2021, when case rates fell to their lowest point since the onset of the pandemic, the
state discontinued its Blueprint for a Safer Economy framework for economic recovery. That
action lifted most of the restrictions imposed on businesses by the state and counties under the
health order. This meant that businesses could generally resume normal service. However, the
fall 2021 surge in COVID-19 cases caused by the Delta variant hampered some businesses’
return to normal operations, especially those dependent on supply chains that extended
overseas. Some speculated this would lead to a depressed holiday shopping season in 2021.
As supply chains normalized in the late fall, product availability largely normalized, but
increased prices sparked inflation fears. By the end of 2021, there was consensus from most
economists that the price increases being seen were not transitory, that is, temporary, and that
the United States was experiencing moderate levels of inflation. According to the Bureau of
Labor Statistics, as of December U.S. prices have increased 7% year over year, the largest
increase since 1982.
The current surge fueled by COVID-19’s Omicron variant began to impact California and San
Diego County around the end of December 2021 and has had a noticeable impact on economic
recovery. Many workplaces have extended remote work indefinitely, which is an indicator of
continuing operational uncertainty for industries that rely on people being on site, like
manufacturing. Many employers also reported significant workforce shortages due to sickness
or close contact. This was amplified by classroom and daycare closures, which have an impact
on working parents’ ability to work. In San Diego County, it is estimated that nearly 300,000
families with school-aged children have both parents in the workforce. As with Delta, the
impact of the Omicron surge in San Diego County was blunted, in part by high vaccination rates
and continued capacity in the region’s healthcare systems. Despite a significant case surge, San
Diego hospitals still had 30% capacity regionwide (as of Jan. 12).
Despite the Delta and Omicron surges, which caused an uptick in unemployment to 6.5% at the
state level in December, unemployment continued to fall at the county and city level. In
December, the unemployment rate was at 4.2% for the county and 3.4% for the city.
To ensure the city remains responsive to the changing situation and is prepared to meet new
challenges head-on, staff have leveraged greater in-house economic data capabilities and
analytics developed over the past year to publish a quarterly economic scan. The Economic
Scan for Fiscal Year 2021-2022 Q2 is presented as Exhibit 1. Staff also publish relevant data on
the city’s economic development site, carlsbadca.gov/doingbusiness. The city will continue to
develop tools to understand the economy, attract businesses, cultivate talent, and support
data-driven economic development decision-making.
Feb. 8, 2022 Item #8 Page 3 of 36
Financial update
During the prior fiscal year, the City of Carlsbad saw significantly lower revenues from its
transient occupancy tax, the tax assessed on each hotel and motel room rented in Carlsbad.
This tax is the city’s third-largest revenue source.
Revenue from sales tax, the second-largest revenue source, appears to have been bolstered by
Carlsbad’s strong economy, economic stimulus payments, paycheck protection program, and
other economic measures such as the federal CARES Act and American Rescue Plan Act, which
were intended to offset the impacts of COVID-19.
Revenue from the city’s largest revenue source, the city’s share of property taxes, was not
substantially impacted by COVID-19. However, many of the city’s other revenue sources, such
as recreational service revenues, were significantly impacted by the pandemic, which reduced
their contributions to the city’s budget.
During this very uncertain time, the city adopted its fiscal year 2021-22 budget based on
conservative revenue projections. The ongoing economic disruption caused by COVID-19 was
one of staff’s primary considerations when projecting city revenues, and the demands of the
pandemic, along with the City Council’s approved goals, were the main factors when budgeting
for expenditures.
Revenues
The majority of health order restrictions on businesses have been lifted since the fiscal year
2021-22 budget was adopted on June 8, 2021, and the results have been positive across most
of the city’s revenue streams. The table below shows the differences in revenue when
comparing the second quarter of fiscal year 2021-22 with the same period in the prior fiscal
year.
Increased Decreased Transient occupancy tax Property tax
$10,283,904 156% -$668,183 -2% Sales tax Intergovernmental revenue
$6,282,208 32% -$1,348,738 -71% Other taxes Other revenue sources
$1,085,127 22% -$288,695 -30% Licenses, permits, service charges Fines and forfeitures
$1,364,896 31% -$27,939 -13% Investments, property income $245,897 10% Interdepartmental charges $71,409 3%
Feb. 8, 2022 Item #8 Page 4 of 36
As noted above, the city’s three major revenue sources are property tax, sales tax and transient
occupancy tax.
• The majority of property tax revenue is collected in December and April each year.
Assessed values have increased 3.14% for fiscal year 2021-22. Fluctuations in property
tax revenues through the second quarter are due primarily to timing.
• The majority of sales tax revenues represent funds collected for the second and third
calendar quarters of 2021 as well as the first advance of the city’s fourth calendar
quarter. For sales occurring in the third calendar quarter of 2021, the most recent data
available, key gains were seen in amusement parks, motor vehicle manufacturing,
gasoline stations, general merchandise stores and traveler accommodations.
• The city has collected significantly more transient occupancy taxes in the first half of the
fiscal year than in the same period in the prior year because many of the city’s hotels
were fully or partially closed during that part of the previous fiscal year, and because
occupancy rates overall were greatly reduced by the pandemic. The average occupancy
of hotel rooms over the most recent 12 months has been 61%, an increase from 49% at
this time last year.
Expenditures and encumbrances
Total General Fund expenditures and encumbrances through the month of Dec. 2021 are
$125.3 million, compared to $94.3 million at the same time last year. The significant increase is
largely due to an increase in transfers, particularly:
• $10.7 million transferred to the new Technology Investment Program in support of the
Strategic Digital Transformation Investment Program
• $7.8 million transferred to the General Capital Construction Fund using funds from the
fiscal year 2020-21 General Fund surplus
• a $5.5 million additional discretionary payment made to CalPERS, the state pension
system, to reduce the city’s unfunded pension liability.
This leaves $96.5 million, or 43.5% of the budget, available to be spent on city programs
through the fiscal year ending June 30, 2022. If funds were spent in the same proportion as the
previous year, the General Fund would have $112.2 million or 50.6% available.
Excluding the transfers out, contingencies and non-departmental charges, the percentage of
available budget at Dec. 31, 2021 is 46.5%, slightly less than the 47.7% available at Dec. 31,
2020.
Enterprise funds
The city’s water and wastewater enterprise funds continue to operate in line with budgeted
expectations. The city’s municipal golf course, The Crossings at Carlsbad, continues to exceed
budgeted estimates due to higher than expected demand for golf and food and beverage
services.
Feb. 8, 2022 Item #8 Page 5 of 36
Mid-year budget review
The city initiated a mid-year budget review of the Fiscal Year 2021-22 Operating Budget in
November 2021. The Finance Department led this effort in collaboration with city departments
to forecast changes to revenues and expenditures compared to their current budgets. The mid-
year budget review was based on the first five months of actual activity in fiscal year 2021-22.
Departments updated their revenue and expenditure projections for the rest of the fiscal year
based on these trends. A key component of the mid-year review was the analysis of spending
within departments’ personnel budgets. Many departments identified a trend of
underspending in personnel budgets because of such circumstances as vacancies and
retirements. There were no substantial updates to the departments’ revenue budget estimates.
The City Manager authorized a number of individual budget transfers between General Fund
departments to accommodate mid-year budget requests. Staff have identified General Fund
budget savings that absorbed all of the budget transfers, resulting in a zero-dollar budget
impact to the General Fund, as shown in the table below. Total budget transfers to and from
each department consisted of various smaller transfers. These came as a result of:
• Actual personnel budget savings through December 2021
• Projected maintenance & operations budget savings
• City Council-approved salary increases that were greater than had been anticipated
based on assumptions used during the fiscal year 2021-22 budget process
• Distribution of final vacation pay budget to departments for costs through December
2021
• Budget requests approved by the City Manager during the mid-year process
• Other salary adjustments approved or pending approval outside of the normal operating
budget process
Department Net transfers
Policy & Leadership Group $105,000
Administrative Services - Administration $5,000
- Human Resources 52,000
- Finance -29,000
- Innovation & Economic Development 29,000
Community Services - Administration 21,000
- Community Development -159,000
- Housing & Homeless Services -179,000
- Library & Cultural Arts -303,000
- Parks & Recreation -410,000
Public Safety - Fire -319,000
- Police 456,000
Public Works - Administration 20,000
- Construction Management & Inspection 13,000
- Environmental Management 93,000
- Facilities & Fleet -44,000
- Transportation -4,000
Miscellaneous non-departmental 653,000
Total $ 0.00
Feb. 8, 2022 Item #8 Page 6 of 36
Exhibit 3 provides more details on the individual requests approved by the City Manager as
authorized in Resolution No. 2021-132, in which the City Council adopted the final operating
budget for fiscal year 2021-22 and established controls on changes in appropriations for budget
funds.
Requested changes and transfers
During the mid-year process, several departments made requests to change their budgeted full-
time or part-time personnel counts and to make a related General Fund budget transfer,
actions that require the City Council’s approval. All of these requests can be absorbed within
the current General Fund budget for FY 21-22.
1. The Communications & Engagement Department is requesting to convert four part-
time printing and graphics positions to two full-time community relations manager
positions, reducing the need to hire outside consultants to support community
engagement efforts. This change would result in an annual savings of $4,100 as well as
stronger community relationships and more efficient operations.
• Due to the increasingly fast-paced nature of communication today, part time
staff in the Communication & Engagement Department face logistical challenges,
such as the need to frequently stop work and hand off assignments before
they’re completed and re-establish situational awareness at each shift.
• Outsourcing community engagement has had mixed results, with some
consultants lacking familiarity with the Carlsbad community and its culture.
• To meet community members’ changing expectations in how they receive
information, use city resources most efficiently and demonstrate Carlsbad’s
commitment to sustainability, the Communication & Engagement Department
has been gradually reducing the amount of printed materials produced over the
past several years. This has reduced the need for staff to handle graphic design
and printing.
No modifications are needed in the current fiscal year’s budget to accommodate these
changes. Approving this request will increase the city’s number of full-time equivalent
positions by two and reduce the city’s part-time full-time equivalent positions count by
the same amount.
2. The Library & Cultural Arts Department is requesting to convert two of its three-
quarter-time circulation supervisor positions to full-time positions and reduce its part-
time staff by 1.22 full-time equivalent position, resulting in an annual savings of
$9,400.
• Converting the two existing three-quarter-time circulation supervisors to full-
time will improve organizational alignment.
• Circulation has been unable to adequately fill part-time positions and retain part-
time staff.
• The ongoing and continuous demands of recruiting results in less mentorship
and coaching, which impacts staff development, connectedness and morale. This
request for additional circulation supervisor staffing will help address these gaps.
No modifications in the current fiscal year’s budget are needed to accommodate these
changes. Approving this request will increase the city’s full-time equivalent position
Feb. 8, 2022 Item #8 Page 7 of 36
count by half a position and reduce the city’s part-time full-time equivalent position
count by 1.22 positions.
3. The Fire Department is requesting a new full-time community health nurse and the
reclassification of an administrative battalion chief to division chief, resulting in an
ongoing budget increase of $209,000.
• A new community health nurse position will support public and workforce health
requirements and serve as a public health specialist and health care provider.
• The position will improve the department’s response to current and future
community health concerns by centralizing responsibilities managed by Human
Resources, Police, and Fire.
• The position will coordinate continuing education needs with system
performance to improve service delivery and patient outcomes.
Some of this position’s responsibilities would be:
• Referring underserved community members to health care resources
• Acting as a liaison between the Police Department’s Homeless Outreach Team
and emergency medical services for case resources and referrals
• Treating not immediately life threatening medical calls for assistance
• Serving as the city’s representative on the county’s Public Health Compliance
Team
• Developing and coordinating public health education programs
• Managing department Continuous Quality Improvement Program for EMT and
Paramedic pre-hospital care and transport
• Helping to manage emergency medical services administrative responsibilities
• Administering vaccine and testing programs
• Assisting employees by providing public health information
The request to reclassify the administrative battalion chief to division chief is contingent
on the City Council’s approval of the new community health nurse position.
This reclassification would allow for a more equitable workload in the department’s
leadership. It will enable the department to have one division chief oversee training and
emergency medical service programs and another division chief, the position proposed
to be created through the reclassification, oversee beach lifeguards, technical search
and rescue, professional support services and wellness programs.
The community health nurse would also assume some of the responsibilities currently
overseen by the current administrative battalion chief, which allows the department to
redistribute administrative roles among the department’s leadership.
A $209,000 transfer to the Fire Department’s budget from General Fund savings is
needed in the current fiscal year’s budget to accommodate these changes, which can be
absorbed by the current total General Fund budget. Approving this request will increase
the city’s full-time equivalent position count by one position.
Feb. 8, 2022 Item #8 Page 8 of 36
4. Staff request the City Council approve a transfer from the General Fund and several
enterprise funds to the Carlsbad Municipal Water District to eliminate a liability.
• During fiscal year 2020-21, CalPERS required the city to combine the separate city
and CMWD accounts for certain other post-employment benefits into a single
account.
• The CMWD account had been funded at a higher percentage than the city's account,
so when the accounts were combined, it resulted in the General Fund and various
other enterprise funds owing the water enterprise fund a cash transfer, which was
recorded as a liability due from the other funds and an asset due to the water
enterprise fund at the end of the 2020-21 fiscal year.
• Once this budgeted transfer is approved for FY 2021-22, cash will be transferred,
and the liability and asset will be eliminated.
• This request does not result in any fiscal impact to the city overall, but does require
the City Council’s approval of the following transfers out of these accounts:
Fund Transfer
General Fund -$993,748
Recycled Water -$26,659
Wastewater -$46,534
Solid Waste -$7,980
CMWD +$1,074,921
Options
1. Approve the Communication & Engagement Department’s request to convert four part-
time printing and graphics positions to two full-time community relations manager
positions
• Increases the efficiency and effectiveness of the city’s community engagement
program without increasing the cost
• Reduces the need to hire outside consultants to support the city’s community
engagement efforts
• Responds to the community’s changing preferences for how to get information
• Supports the city’s sustainability efforts by reducing the use of printed informational
materials
• Does not require additional budget in FY 21-22 and thereafter
2. Approve the Library & Cultural Art Department’s request to convert two of its three-
quarter-time circulation supervisor positions to full-time positions
• Converting the two existing three-quarter-time circulation supervisors to full-time
will improve organizational alignment
• Addresses continuing challenges in filling part-time positions and retaining part-time
staff
• Allows for more staff development, potentially improved morale
• Does not require additional budget in FY 21-22 and thereafter
Feb. 8, 2022 Item #8 Page 9 of 36
3. Approve the Fire Department’s request to create a new full-time community health nurse
position and reclassify an administrative battalion chief to division chief
• Allows the ability to efficiently respond to future community health concerns
• Enables better coordination to provide health care resources and support to
community
• Provides a full-time staff position committed to meeting community and
departmental needs
• Improves balance of employee workloads
• Requires a one-time transfer of identified General Fund budget savings to pay for FY
21-22 costs
• Requires the department to eventually address long-term office space solution once
staff return to headquarters
4. Approve a transfer from the General Fund and several enterprise funds to the Carlsbad
Municipal Water District to eliminate a liability
• Would eliminate the liability due to CMWD on the city’s annual comprehensive
financial report for fiscal year 2021-22.
• Does not result in any citywide fiscal impact
Fiscal Analysis
The costs of approving all three department requests can be absorbed by the General Fund
during the current fiscal year. The Fire Department’s request will result in an ongoing budget
increase of $200,000. If all three department requests are approved, the city’s total number
full-time equivalent positions for full-time employees will increase by 2.50, and the total
number of full-time equivalent positions for part-time positions will decrease by 2.22.
The fourth request involving the transfer of budget and funds to CMWD will not result in any
fiscal impact to the city.
Next Steps
Staff will continue to provide quarterly economic and financial updates through the COVID-19
emergency.
General Fund budget will be transferred to departments based on the City Council’s approvals.
Departments will work with Human Resources to carry out the requests and personnel
additions. After budget is appropriated for the post-employment benefits-related transfer, a
cash transfer to CMWD will be made and the recorded liability owed and asset due will be
eliminated.
Environmental Evaluation
This informational report does not constitute a “project” within the meaning of the California
Environmental Quality Act under California Public Resources Code Section 21065 in that it has
no potential to cause either a direct physical change in the environment or a reasonably
foreseeable indirect physical change in the environment.
Public Notification
This item was noticed in keeping with the Ralph M. Brown Act and it was available for public
viewing and review at least 72 hours before the scheduled meeting date.
Feb. 8, 2022 Item #8 Page 10 of 36
Exhibits
1. Economic Scan Fiscal Year 2021-2022, second quarter
2. December 2021 Financial Status Report
3. List of City Manager-approved department mid-year requests and City Council previously
approved items
4. City Council resolution approving fiscal year 2021-22 mid-year requests and fund transfers
5. City Council resolution approving the appropriation and transfers to eliminate an existing
liability
Feb. 8, 2022 Item #8 Page 11 of 36
1
Second Quarter, Fiscal Year 2021-2022
The following scan provides an overview of key economic indicators for October, November, and December
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ƌĞůĞǀĂŶt t th h th b ĞĐŽŶŽŵLJ & ƌ ƵƉĚĂt i ĨŽƌŵĂ ƌĞŐĂƌ i th b
economy and economic development visit carlsbadca.gov/doingbusiness.
GROSS REGIONAL PRODUCT
Carlsbad G RP (S ource: E M S I , 2020)
$15.3B
As of 2020, Carlsbad had the second largest gross regional product
in San Diego County at $15.3B, only trailing the City of San Diego. From 2019, GRP remained unchanged, signaling the pandemic
yielded no economic growth. Key industries driving this output
Ăƌ ƉƌŽĨ i i tĞ h i ƐĞƌ i Ɛ͕ Đ tĞ ĂŶĚ
electronic product manufacturing and other manufacturing.
These industries are generally more resilient in recessions. th i t LJ͕ ĂĐĐŽŵŵŽĚĂ Ĩ ƐĞƌ i Ɛ͕ ǁĂƐ
severely impacted by the pandemic, but is recovering.
JOBS
U nemployment Rate (S ource: C alifornia E mp loyment Dev elop ment Dep artment, December R ep ort)
Prior to the pandemic, Carlsbad boasted a low unemployment rate of 2.9%. At the onset of the pandemic, unemployment
i Ğ i t 3 b ĨŽƌ Ɛt i Ĩ i h h th ƉĂƐt ŵŽŶth th ƵŶĞŵƉůŽLJŵĞŶt ƌĂt h h ƐŽŵĞ ĐŽƌƌĞůĂƟŽŶ
t th ƉƌĞǀĂůĞŶĐĞ K i th ƌ i ,ŽǁĞǀĞƌ͕ itĞ th t i ƐƵƌŐĞƐ͕ hi h Đ ƵƉ i
unemployment at the state level in December (6.5%Ϳ͕ ƵŶĞŵƉůŽLJŵĞŶt ĐŽŶƟŶƵĞ t Ĩ Ăt th ĐŽƵŶt it ůĞǀĞ ĞĐĞ b ƌ͕
the unemployment rate was at 4.2% for the county, and 3.4% for the city.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Carlsbad Unemployment Rate 2020 vs 2021
2020 2021
0
2
4
6
8
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Unemployment Rate 2021
Carlsbad San Diego County
North County Avg w/o Carlsbad California
/ŶŶŽǀĂ EĐ i ǀĞůŽƉŵĞŶt t t
Exhibit
Feb. 8, 2022 Item #8 Page 12 of 36
2
Job Postings (S ource: E M S I , J uly - S ep tember 2021)
15, 418
There were 15, 418 i b ƉŽƐ i b b t ĞĞŶ t b b ͕ i ŵŽƌĞ th ƉŽƐƟŶŐƐ
Ĩƌ th ƉƌĞ i tĞƌ hi ĐŽŶ t i ĞĂƐĞĚ
ƉŽƐ tĞ Žǀ t Ĩ th ƉĂƐt ƐĞǀ tĞƌ h
i ĂĚǀ ƐĂůĂƌ Ĩ th ƉŽƐ ǁ $41, 600, which is
on average $4,000 less than jobs posted in the previous quarter. The t hi i i t i ǁĞƌ ŵĂŶƵĨ t i ͕ i i t ĂƟǀĞ ƐĞƌ i
ƉƌŽĨĞ i i tĞ h i ƐĞƌ i ŽŶƟŶƵĞĚ
feedback from hospitality and restaurant businesses indicate
rehiring in those industries remains a challenge.
d E KZ<&KZ E
Education (Source: 2019 ACS 5-Year Estimates, the latest year available)
Carlsbad has established itself as having
th i h t ǁŽƌŬĨŽƌ t ĨƵĞů i ǀĂ
i t h i Ğ i ĮĞůĚ b
businesses can access talent from San
Diego County, Orange County, and even
southwest Riverside County. Nearly
60% of working-age residents hold a
bachelor’s degree, with more than 25%
ĂƩ i i ĂĚǀ ĚĞŐƌ t i
Đ i i ĐĞŶt i Ž
b h th h i t ĐŽŶĐĞŶt Ă
of households with degrees in
science, technology, engineering, and
ŵĂth ;^ E ĚĞŐƌĞĞƐ hi ůŽĐ
talent mix is among the leading reasons
th t h b
b b i i Ăt i Ğƌ i
Žī t t h ƉƌŽŐƌ ithi 3
mile radius, more than a half-dozen
i Ğƌ i ĐŽůůĞŐ ĐŽŶĨ ŵŽƌ
than 35, 000 degrees annually. The
Carlsbad business community works
ith hi h ĞĚƵĐĂ t
t i ǀ i ĞĚƵĐĂ t ĂĐŬ
with local workforce needs.
Talent Pipeline Degrees Conferred by University,
Displayed as Distance from Carlsbad
San Diego State University9,671
Feb. 8, 2022 Item #8 Page 13 of 36
3
CAPITAL
Interest Rates (Source: U.S. Department of the Treasury, December 2021)
EĂ i tĞƌĞƐt ƌĂt hi h Ěƌ i i ĂŶt i th i h ǀ ŶŽ i Ɖƌ i ƌĂt ;ŵĞĂƐƵƌ
as February 2020) for 10- and 30-year interest rates. One-year rates remain below pre-pandemic levels, currently at 0.39%.
Ten-year rates are currently at 1.52% and 30-year rates are at 1.9% ith ĐƵƌƌĞŶt i ŇĂ Đ th &ĞĚĞƌ ZĞƐĞƌǀ
has indicated its intent to gradually raise interest rates over the next several quarters.
December 2020
One-year interest rate 0.12%
10-year interest rate 0.92%
30-year interest rate 1.66%
December 2021
One-year interest rate 0.39%
10-year interest rate 1.52%
30-year interest rate 1.9%
COMMERCIAL REAL ESTATE
Mark et V acancy Rates and Rent per Sq uare Foot (S ource: C oS tar, December 2021)
ŽŵŵĞƌ i ǀĂĐ ƌĂt h ǀ ĐŽŶƟŶƵĞ t i ŽǀĞ i
the onset of the pandemic. The industrial vacancy rate is now
at 3.9%͕ ĐŽŵƉĂƌĞ t Ɖƌ i h ŽĸĐĞ ǀĂĐĂŶĐLJ
rate is currently 14.4%, compared to 15.25% pre-pandemic.
,ŽǁĞǀĞƌ͕ i ƌĞt i hi h ǁ i ŽƉŽƌƟŽŶĂt i tĞ bLJ
th i ǀĂĐ i h ǀĞ ĐŽŶ t i b ŶŽ Ăt 8.5%,
compared to 5.27% pre-pandemic.
Average market rent per square foot has also begun to climb,
i ƉƌĞͲƉĂŶĚĞ i ůĞǀ Ĩ th ĮƌƐt i ZĞt i
($41.60 ;$36.33) segments. Industrial space, which
consistently climbed during the pandemic is now at $18.48 per
square foot on average.
3.9%
Industrial vacancy rate
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4
Carlsbad Commercial Vacancy Rates
Carlsbad Retail Carlsbad Office Carlsbad Industrial
0.00%
5.00%
10.00%
15.00%
20.00%
Retail Office Industrial Retail Office Industrial
Carlsbad North County w/o Carlsbad
Vacancy Rate Comparison
2020 Q1 2020 Q2 2020 Q3 2020 Q4
2021 Q1 2021 Q2 2021 Q3 2021 Q4
Feb. 8, 2022 Item #8 Page 14 of 36
4
TOURISM
it it t i ǁ ŽŶĞ th h ĚĞƐt hit tŽƌ b b i ith t h th Žƌ ƌĞƐt i
Đ ĐŽŶĮĚĞŶĐĞ i t ĂǀĞ t i Žǀ th ƉĂƐt tĞƌ͕ hi h i Ğx tĞ i hi t i Ăů
ĚĂt ůĞǀ ǁĞƌĞ i h t ůŽǁ th th ƐĂŵĞ t i ϮϬϭϵ͕ b t i i ĂŶt hi h th d i
ůĞĂĚĞƌ ƐƉĞĐƵůĂt th ƐƵƌŐĞ i ĐĂƐĞ Đ b th t i ǀ i t h ǀĞ ĐŽŶƟŶƵĞ t i t t ĂǀĞ t b b t
that trends are normalizing. December Occupancy was 56.9%, only lagging December 2019 by one percentage point. Baseline Đ i i it ĞƉƌĞƐĞŶt i
42 ith h t i b tŽƵ i i i t i tĞƌ
employment and economic impact. Below are several indicators
ƌĞ th h th th it ͛ t i ŽŶŽŵLJ͘
H otel Occupancy (Source: Smith Travel Reports, December 2021 Report)
Ăƌů b ĂǀĞƌĂŐĞ i ƌ ƌĂtĞ h ƌĞ i ƌĞůĂƟǀĞ Ɛt b Žǀ th ƉĂƐt tĞƌ͕ i Ăt $182.01 in December.
hi Ğ th ƌĂt tĂƉĞƌ i h t ͕ th ĂǀĞƌĂŐĞ Ĩ th t ǁ $31.12 higher than the average of the same quarter in 2019.
In fact, ADR for June through December 2021 have been consistently higher than corresponding months pre-pandemic. Baseline
Đ i i it ĞƉƌĞƐĞŶt i
Hotel Average Daily Room Rate (Source: Smith Travel Reports, December 2021 Report)
0.0
20.0
40.0
60.0
80.0
100.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Hotel Occupancy 2019
itLJ Ĩ ĂƌůƐbĂĚн San Diego County, CA
itLJ Ĩ ĐĞĂŶƐiĚĞ͕ н itLJ Ĩ ĞǁƉŽƌt ĞĂĐh͕ н
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Avg. Daily Rate 2019
itLJ Ĩ ĂƌůƐbĂĚн San Diego County, CA
itLJ Ĩ ĐĞĂŶƐiĚĞ͕ н itLJ Ĩ ĞǁƉŽƌt ĞĂĐh͕ н
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average Daily Rate 2021
City of Carlsbad San Diego County, CA
City of Oceanside, CA City of Newport Beach, CA
0
20
40
60
80
100
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Hotel Occupancy 2021
City of Carlsbad San Diego County, CA
City of Oceanside, CA City of Newport Beach, CA
Feb. 8, 2022 Item #8 Page 15 of 36
5
/E E
Median H ousehold Income (Source: 2019 ACS 5-Year Estimates, the latest year available)
i h h i i b ĐŽŶ t ĞxĐĞĞ ĐŽƵŶt i ůĞǀ h i i Ĩ h h i
Carlsbad in 2019 was $123, 409, which was $44,085 higher than the county median income. The delta between Carlsbad
median income and the County median income grew by $11, 768 between 2018 and 2019, meaning Carlsbad is outpacing
the region in terms of household income growth.
Median H ome Price (S ource: Z illow H ome V alue I ndex - December R ep ort)
ǀ i b ith i ŽƵŶt ĐŽŶ t i i i ĂŶt ith i h i i th it
at $1.3 million in December, a gain of five percent over the previous quarter. This value is seasonally adjusted and only
i th i i h b h ǀ h ǀ i 3 Žǀ th ƉĂƐt LJĞĂƌ h ĐŽŶ i i
h b ib t t ŽŶƐt i t i th i
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Median Home Price
2019 2020 2021
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Median Home Price Comparison
North County Avg w/o Carlsbad Carlsbad
Feb. 8, 2022 Item #8 Page 16 of 36
6
BUSINESS ACTIVITY
Business L icenses (S ource: C ity of C arlsbad)
Ō i it ůĂƐt tĞƌ b i i i t ƌĞĐŽǀĞƌĞ t hi t i h ǁĞƌ t t 2, 415
business licenses issued last quarter, including 1, 035 Ğ i ŶƟĂů͕ 598 i ƟĂů͕ 782 outside-the-city licenses.
h b i i t ƌĞŇĞ t th b b i ƐƐĞ i b b i ŵĂ ĐĂƌƌ ŵƵůƟƉůĞ
i h t t ǀĂĐĂ ƌĞŶt Ăƌ ƌ i t ŐĞt i ŶƐĞ͕ b i t i b th t b i
i th i t ith th it ĂƌĞ ƌ i t ŐĞt i t i ĞƐƟŵĂt th t th ƌ ĂƌĞ ĂƉƉƌŽxi t 6, 327 businesses
in Carlsbad.
ĞǀĂůƵĂ th b b i i ŶƐĞ th t ǁĞƌĞ i ŽŶƟŶƵĞ th th t ǁĞƌ ŽŶĐĞ ĂĐƟǀĞ b t t ƌĞŶĞǁ Ͳ
Carlsbad actually lost fewer businesses during the pandemic than the 18 months prior to the pandemic.
Permits (S ource: C ity of C arlsbad)
Ğt t b b it it i Ĩ b th ƌ i ĐŽŵŵĞƌ i it i h b
i it i 991), was an increase of 154 over the same quarter in 2020.
Commercial permits issues (117), was an increase of 18 over the same quarter in 2020.
hi it it i i Ž i zKz ƌ i b i h ǀ it b h tĂŐ i b i i ĐŽƐt
challenges to new housing starts.
0
200
400
600
800
1000
1200
Commercial Residential Commercial Residential
2020 2021
Building Permits Issued
Q1 Q2 Q3 Q4
0
500
1000
1500
2000
2500
3000
Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
Business Licenses Issued by Quarter
Non-Residential Residential Outside City Total
Feb. 8, 2022 Item #8 Page 17 of 36
7
INDUSTRY CLUSTERS
L ife Sciences (S ource: 2022 B usiness R ep ort and I ndustry C luster U p date)
h i i i t ĐůƵƐt ĞŵƉůŽLJ ǁŽƌŬĞƌ ĂĐƌ 3 Ğx i i i ĞŵƉůŽLJŵĞŶt
b t h ĐůƵƐt i ŵŽƌ ĐŽŶĐĞŶt Ăt i b th th ŶĂ ĂǀĞƌĂŐ
wages per worker average $123,702.
San Diego County and California have experienced parallel employment growth in the Life Sciences cluster between
2010 and 2020. In the same ten-year period, employment in Carlsbad grew by 75%. Between 2016 and 2018, Carlsbad
Ğx i Žǀ ŐƌŽǁth Kǀ th ƉĂƐt t LJĞĂƌ h ǁĞǀĞƌ ĞŵƉůŽLJŵĞŶt ŐƌŽǁth tĂƉĞƌ ĐŽŵƉĂƌ
to years prior.
Technology (S ource: 2022 B usiness R ep ort and I ndustry C luster U p date)
h /ŶĨŽƌŵĂ i Ă d h i ;/ ĐůƵƐt ĞŵƉůŽLJ ǁŽƌŬĞƌ ĂĐƌ 3 3 i b i
ŵŽƌ ĐŽŶĐĞŶt Ăt i b th th ŶĂƟŽŶ ĂǀĞƌĂŐ ǁĂŐ ǁŽƌŬ ĂǀĞƌĂŐ 3 th
ICT industry cluster experienced a 3.3% increase in the number of jobs between 2018 and 2020.
San Diego County and California experienced steady parallel growth in the ICT cluster between 2010 and 2020. In the same tĞŶͲLJ i b Ğx i i i i i ĞŵƉůŽLJŵĞŶt b t b t
employment in the ICT cluster has steadily trended upwards.
Clean Technology (S ource: 2022 B usiness R ep ort and I ndustry C luster U p date)
Ğt ϮϬϭϴ th b ǁŽƌŬĞƌ ĞŵƉůŽLJ Ăt ůĞĂŶt h i b ƉĞƌĐĞŶt th
ůĞĂŶt h i b ĞŵƉůŽLJ ŵŽƌ th h ĂǀĞƌĂŐ ǁĂŐ ǁŽƌŬ i th
ůĞĂŶt h i t t i b i ŽŶĐĞŶt Ăt th th ǀĞƌĂŐĞ͘
Ğt b Ğx i i i ĞŵƉůŽLJŵĞŶt Ěƌ Ĩ th ůĞĂŶt h i t ĨŽůůŽǁ b Ɛt
growth between 2012 and 2020. Employment growth in California peaked in 2013 and has been on a steady decline
since. Growth in San Diego County also peaked in 2013, dropping by over 25 percent between 2013 and 2017. Since 2017,
employment in the Cleantech cluster for San Diego County has been on a steady increase.
Sports Innovation & Design (S ource: 2022 B usiness R ep ort and I ndustry C luster U p date)
h ^ƉŽ t /ŶŶŽǀĂ i i t ĐůƵƐt ĞŵƉůŽLJ ǁŽƌŬĞƌ ĂĐƌ Ğx i 3 ƉĞƌĐĞŶt
ĚĞĐƌ i ĞŵƉůŽLJŵĞŶt b t h ĐůƵƐt i ŵŽƌ ĐŽŶĐĞŶt Ăt i b th th
ŶĂ ǀĞƌĂŐ ĂŐ ŽƌŬ ǀĞƌĂŐ
E LJŵĞŶt i th t /ŶŶŽǀĂ i ĐůƵƐt h Ɛt i i i 3 i b th i ŽƵŶt
and California have declined steadily since 2015 and experienced sharp declines between 2019 and 2020, likely due to the
COVID-19 pandemic.
Hospitality & Tourism (S ource: 2022 B usiness R ep ort and I ndustry C luster U p date)
b it it d i ĐůƵƐt i b t 3 ŵŽƌ ĐŽŶĐĞŶt Ăt i b th th ŶĂ ĂǀĞƌĂŐ
ĞŵƉůŽLJ ϵ͕ϭϳϵ ĂĐƌŽƐƐ b i it it d i Ğx i h 3 ĚĞĐƌ i ĞŵƉůŽLJŵĞŶt
b t i b th Ğī t th K i b t ǀĞƌĂŐ ǁĂŐ
ŽƌŬ i ĞůĂƟǀ t th Ğ i t tĞƌ ith ŽƌŬĞƌ i 3 3 ǀĞƌĂŐĞ͘
Carlsbad, San Diego County, and California experienced sharp declines between 2019 and 2020, during which sub-clusters
like Theater Companies and Dinner Theaters, Amusement and Theme Parks, and Amusement Arcades were shut down to
i Ăt th ī t th K i Feb. 8, 2022 Item #8 Page 18 of 36
8
INDUSTRY IMPACT
Largest Industries (S ource: E M S I , December 2021)
b ĞĐŽŶŽŵ i i ĂŶt Ğx th ŶĂ ĂǀĞƌĂŐ i ŵĂŶƵĨ t i ĂĐĐŽŵŵŽĚĂ Ĩ ƐĞƌ i
ƉƌŽĨ i i t h i ƐĞƌ i b h tŽƌ hi h ǁ i t h i i ĂŶĚ th
i ǀĂ i t i ĞŶĞƌ i i t t i ĞƉƌĞƐĞŶt i i ĂŶt b Žǁth i th ŽŶŽŵLJ
GRP by Industry
Industry size by employment
Feb. 8, 2022 Item #8 Page 19 of 36
9
INNOVATION
Patents (S ource: 2020 C arlsbad I ndustry C luster P atent U p date)
& th ŬĞ i t ĐůƵƐtĞƌ ŵĞŶ b ǀ i i ǀĂ it i b h ĮŐƵƌ b h ǁ th t hi
th i i ĐůƵƐt h b t i th it ͛ i ǀĂ ĞĐŽŶŽŵLJ i ĨŽƌŵĂ Đ i Ă
t h ƉĂtĞŶt h ǀ ĚƌĂŵĂ ŐƌŽǁth Žǀ th ƉĂƐt t LJĞĂƌ ǁ ƌ ib Ĩ i t th b
ŶĞ ƉĂtĞŶt i i i t i th ŶŽƟ th t t h hi h i th i t ĐůƵƐt ith th
lowest number of patents, has grown by more than 800% since 2009. All told, these four industry clusters accounted for
tĞŶt ǁĂƌ t b i
Patents per Capita
2019 Patents per 1,000 Workers in the Labor Force
b h t b hi h Ɖƌ
of patents per 1,000 workers over 60%
ŵŽƌ th th ŶĞxtͲĐůŽƐĞƐt ĐŽŵƉĞ t
it h i ĮŐƵƌ h ǁ th t b h
ŐƌĞĂt ĐŽŶĐĞŶt Ă ƉĂtĞŶt it than even the technology hubs of San
^ĞĂ &ƌ i Ž ŽƐt
2019, Carlsbad had 1.6 patents for every
1 patent per 1,000 workers in San Jose.
h t ƌĂ ǁ Ĩ ^ĞĂ San Francisco.
Released February 8, 2022
The quarterly economic scan is developed by the City of Carlsbad Innovation & Economic Development Department.
For more information, visit carlsbadca.gov/doingbusiness, or contact the team at business@carlsbadca.gov.
Feb. 8, 2022 Item #8 Page 20 of 36
This report summariz es the City of Carlsbad’ s G eneral Fund revenues and expenditures through December 31,
2021. It compares revenues and expenditures for the first six months of fiscal year 2021-22 and fiscal year
2020-21. In addition, the financial status of the W ater and W astew ater Enterprises are included.This report
is for internal use only.The figures presented here are unaudited and have not been prepared in accordance
w ith G enerally Accepted Accounting Principles.
General Fund Revenues
Property Taxes ( $26.3 million) – The majority of property tax revenue is collected
in December and April each year. According to the County of San Diego Assessor’s
Office, assessed values in Carlsbad have increased by 3.14% for fiscal year 2021-
22. This is the ninth year in a row that Carlsbad’s assessed values have increased
from year to year, and in line with assessed value increases with other cities in
San Diego County for the year. This reflects continued strength in the regional
housing market. The increase in this year’s assessed values is due to a large increase in the assessed values of
residential properties in the city; the city saw smaller increases in commercial and industrial property values for
the year. This is the seventh year in a row since the Great Recession ended that the city saw increases in assessed
values in all three property components (residential, commercial and industrial).
The property taxes for the first six months of the fiscal year have decreased by 2% as compared to the prior fiscal
year. The primary reasons for the decrease are:
•Current taxes are down by $400,000 or 1.7% due to timing differences of when taxes are paid
•Aircraft taxes are down by $301,000 or 18% due to a decrease in aircraft being housed at the airport
•Payments for previous years’ taxes are down by $13,000 due to less collections of previous year’s
property taxes because in the previous fiscal year property owners were given an extension to pay their
property taxes due to the COVID-19 pandemic
•Supplemental and surplus property taxes are $118,000 higher when compared with the prior year
Sales Taxes ( $25.8 million)– For the first six months of the new fiscal year, sales
tax revenues are $6.3 million higher than the same period in the previous fiscal
year.Sales tax revenues for the year represent the city’s first advance for the
fourth calendar quarter of 2021, the second and third calendar quarter of 2021
sales tax revenues, a portion of the city’s first calendar quarter of 2021 sales tax
revenues, and a portion of the city’s 2020 fourth calendar quarter sales tax
revenues.
In the prior fiscal year, the city saw the impacts the COVID-19 pandemic including the shelter-in-place orders,
which essentially shut down all non-essential businesses, and where small businesses in the State of California
were allowed to defer sales tax payments.
For sales occurring in the third calendar quarter of 2021 (the most recent data available), key gains were seen in
amusement parks, motor vehicle manufacturing, gasoline stations, general merchandise stores, and traveler
December 31, 2021
2%
32%
Feb. 8, 2022 Item #8 Page 21 of 36
Exhibit 2
Monthly Financial Report _________________________________________________________________2
accommodations. During the same period, key declines were seen in automobile dealers, building material and
supplies dealers, sporting goods, hobby and musical instrument stores, support activities for air transportation,
and electric power generation. The largest economic segments in the city are automobile dealers, general
merchandise stores, restaurants, clothing stores, gasoline stations, and jewelry, luggage and leather goods
stores.Together, they generate 66% of the city’s sales tax revenues.
Transient Occupancy Tax ( $16.9 million)– The city’s third highest General Fund
revenue source on an annual basis is Transient Occupancy Tax (TOT or hotel tax),
estimated at $18.4 million for the current fiscal year. A tax of 10% of the rent
amount is collected on all occupancies less than 30 days (transient) in duration.
Year-to-date TOT figures represent taxes collected on hotel receipts through the
month of November 2021. TOT collected for the first six months of the fiscal year
reflects an increase of $10.3 million, 156% more than the previous year. Due to the reopening of the economy
in June 2021 after a prolonged COVID-19 pandemic related tier system, all local hotels are now open; a stark
contrast to the prior fiscal year where many hotels were partially or fully closed, including three of the largest
hotels – the Omni La Costa, the Park Hyatt Aviara, and the LEGOLAND Hotels.
Currently, there are 4,778 hotel rooms in service (of 5,059 total rooms built in the city), 668 timeshares and 323
registered short-term vacation rentals. The average occupancy of hotel rooms over the most recent 12 months
has been 61% which is up from 49% at this time last year.
Business L icense Tax ( $3.3 million) –All entities doing business in the City of
Carlsbad are required to have a valid business license. Business license revenue is
estimated at $5.8 million for the current fiscal year. Business license revenues are
up $620,000, or 23% higher, than the previous fiscal year. The increase is due to
significant payments received for overdue business license renewals and
penalties, as well as a small increase in new business licenses.
There are currently 9,524 licensed businesses operating within the city, 115 more than the prior year. The
majority of taxed businesses (6,386 businesses) are located in Carlsbad, with 2,462 of these businesses home-
based.
Interdepartmental Charges ( $2.6 million) –Interdepartmental charges are up
by $71,000 when compared with the same period last year. These charges are
generated through engineering services charged to capital projects (down
$53,000 due to less staff charging to capital projects); reimbursed work from
other funds (up $9,000 charged to date); and miscellaneous interdepartmental
expenses charged to funds outside the General Fund for services performed by
departments within the General Fund (up 6%, or $115,000), the result of increased personnel, and maintenance
and operations costs.
Income from Investments and Property ( $2.7 million)–For the first six months
of the new fiscal year, income from investments and property is up $246,000
compared to the previous fiscal year.
Interest income is down $298,000 for the year due to the combination of a
21.1% decrease in the average yield on the portfolio for the year (a decrease in
the yield from 1.455% last fiscal year to 1.1478% in the current fiscal year) and a 7.3% increase in the monthly
average cash balance. The Federal Reserve has maintained an effective benchmark rate between 0 and 0.25%
since March 2020. The city has since seen many of its higher rate bonds and notes being called, causing the city
to have to invest in lower yield securities. This has and will continue to drive the yield on the portfolio lower.
3%
23%
156%
10%
Feb. 8, 2022 Item #8 Page 22 of 36
Monthly Financial Report _________________________________________________________________3
Income from property sales and rentals is up by $544,000 for the year, or 55% as compared to the prior fiscal
year, primarily due to significant increases in facilities and pool lane rentals as the prior year was severely
impacted by the COVID-19 pandemic and increased cell site lease revenues.
Recreation Fees ( $1.4 million)–Recreation fees are generated through
instructional classes, camps, youth and adult sports, special events, parent
participation preschool, senior programs, and various aquatic programs.
Recreation revenues are up by $652,000 compared to last year at this time. This
large increase is due to the reopening of programs as compared to the prior
fiscal year when there were cancellations across all programs due to COVID-19
restrictions.
Development Related Revenues ( $1.9 million) – Development related revenues,
which include building permits, planning fees, building department fees, and
engineering fees, reflect a 34%increase for the first six months of the new fiscal
year.
Development related fees are paid by developers to cover a portion of the cost of reviewing and monitoring development activities, such as plan checks and inspections. Engineering plan check
fees are one of the first fees paid during the initial stages of development. Some of the activity in the sixth month
of the fiscal year included permits associated with: residential second dwelling units and various minor home
improvement permits.
One source of development related revenue is building permits, which are down 3% compared to last fiscal year.
The decrease in building permit revenue is derived from a decrease in projects, a decrease in the valuation and
square footage of new construction, a decrease in residential permitting activity, and a decrease in
commercial/industrial permitting activity to date. The year-to-date valuation of new construction in the current
fiscal year is $70.8 million, while it was $121.7 million in the previous fiscal year, a 42% decrease. In December,
Carlsbad issued building permits for three second dwelling units (all in the northwest quadrant), the same
number of units that were permitted in November. For the current fiscal year, 44 residential permits have been
issued, as compared to 148 residential permits issued during the same period last year.
During the month of December, no permits were issued for commercial and/or industrial space permits, as
compared to 43,000 square feet for permits issued during the same period last year. For the current fiscal year,
12,700 square feet of commercial and/or industrial permits have been issued, as compared to 206,000 square
feet for permits issued during the same period last year.
Franchise Tax ( $1.5 million) –Franchise taxes are generated from public utility
sources, such as San Diego Gas & Electric (SDG&E), trash collection franchises, and
cable franchises conducting business within city limits. Franchise tax revenue is
estimated at $5.7 million for the current fiscal year. Year-to-date franchise taxes
are $10,000 higher than the same period last year.
Cable television franchise revenues (Spectrum and AT&T) are down by $19,000
due to a decrease in the number of paid subscription services (premium video, equipment rental, on-demand,
and programming services).An increase in trash collection revenue of $64,000 is due to an increase in trash rates
combined with additional trash customers.
Approximately 47% of the total franchise tax revenue anticipated for the year will be collected from SDG&E in
April 2022.
1%
84%
34%
Feb. 8, 2022 Item #8 Page 23 of 36
Monthly Financial Report _________________________________________________________________4
Ambulance Fees ( $1.4 million) –The city bills any individual who is transported in
one of the city’s ambulances. Through December 2021, receipts from ambulance
fees are down $43,000, or 3%, compared to last fiscal year. The decrease in
revenue for the first six months of the fiscal year is caused by a decrease in the
number of billable transports, 2,707 in the first six months of fiscal year 2021-22
versus 2,798 in the prior fiscal year.
Other Revenue Sources ( $674, 000) –Other revenue sources have decreased by
$288,000 and include revenues received by the city to offset the costs of special
studies or projects for developers; reimbursements for damage done to city
streets, rights-of-way, and other city-owned property; donations; reimbursement
from the Gas Tax Fund for traffic signal maintenance; and miscellaneous
reimbursed expenses and refunds of prior year fees. The decrease to date is
primarily driven by lower receipts this fiscal year as the City of Oceanside took over as the lead agency on the
joint city Innovate 78 contract.
Other L icenses and Permits ( $547, 000) – Other licenses and permits consist of
fire protection services, right-of-way, lagoon, grading, hazardous uses, and other
miscellaneous permit revenues. These permits usually increase/decrease along
with increases/decreases in development activity.Other licenses and permit
revenues can vary throughout the year. The increase to date of $20,000 is
primarily a result of increased activity in coastal development permits, Habitat
Management Plan permits and hazardous uses permits, offset by a decrease in right of way permits.
Fines and Forfeitures ( $185, 000) –Fines and forfeitures represent fees collected
for code violations, parking citations, overdue fines, and returned checks. The
city recognizes revenues when the citizen pays the fine or forfeiture, as opposed
to when the fine is imposed. The decrease to date of $28,000 is mostly due to
increases in parking citation revenues and overdue fines, offset by a decrease in
short term vacation rental code violation revenue.
Intergovernmental Revenues ( $512,000)– Intergovernmental revenues include
homeowners property tax exemption revenue and miscellaneous receipts
received from the state or federal governments, as well as local school districts.
Various miscellaneous receipts comprise the $512,000 received this year. Some
larger receipts include senior nutrition program revenues, $201,000
reimbursement from the school district for their share of the school resource
officers, $78,000 received from the state for mandated cost reimbursements, and $55,000 for a federal grant
provided to the Police Department. In the prior year, the city received Coronavirus Aid, Relief and Economic
Security Act or CARES Act funding as well as a homeless grant which did not recur in the current fiscal year.
Transfer Taxes ( $1.1 million) – W hen real property is sold, the County Assessor’s
Office charges a transfer tax. The transfer tax rate in San Diego County is $0.0011
multiplied by the selling price of the property. The city receives 50% of the
transfer tax charged for sales within the City of Carlsbad. Revenues have increased
due to an increase in property transfers.
4%
3%
30%
13%
71%
74%
Feb. 8, 2022 Item #8 Page 24 of 36
Monthly Financial Report _________________________________________________________________5
Other Charges or Fees ( $399, 000) – Other charges or fees are generated through
the sale of city documents, such as staff reports, blueprints and copies; general
fees collected for false alarms, easements and agreements, weed abatement and
kiosk signs; audio/visual rental fees; and general services, such as mutual aid
response, mall police services, emergency response services, reports, etc. These
fees are up by $235,000 or 143% mainly due to the addition of an annual fire
inspection fee ($157,000) and timing of mutual aid response payments ($72,000),
and mall police services ($12,000).
A detailed schedule of General Fund revenues is provided on the following page.
143%
Feb. 8, 2022 Item #8 Page 25 of 36
Monthly Financial Report _________________________________________________________________ 6
REVENUE
REVENUE EXPECTED ACTUAL ACTUAL CHANGE FROM
BUDGETED THROUGH FY 2021 FY 2022 YTD 2021 TO PERCENT
FOR FY 2021-22 12/31/21 AS OF 12/31/20 AS OF 12/31/21 YTD 2022 CHANGE
TAXES
PROPERTY TAX $76,590,000 $26,913,482 $26,995,194 $26,327,011 ($668,183)-2%
SALES TAX 44,015,000 21,087,896 19,510,183 25,792,391 6,282,208 32%
TRANSIENT OCCUPANCY TAX 18,441,000 7,816,033 6,604,990 16,888,894 10,283,904 156%
FRANCHISE TAX 5,666,000 1,476,791 1,508,583 1,518,697 10,114 1%
BUSINESS LICENSE TAX 5,817,000 2,761,827 2,711,501 3,331,211 619,710 23%
TRANSFER TAX 1,285,000 444,811 618,296 1,073,599 455,303 74%
TOTAL TAXES 151,814,000 60,500,840 57,948,747 74,931,803 16,983,056 29%
INTERGOVERNMENTAL
VEHICLE LICENSE FEES 50,000 0 0 0 0 0%
HOMEOWNERS EXEMPTIONS 350,000 52,813 52,285 50,740 (1,545)-3%
OTHER REIMBURSEMENT 7,678,763 1,491,564 1,859,333 512,140 (1,347,193) -72%
TOTAL INTERGOVERNMENTAL 8,078,763 1,544,378 1,911,618 562,880 (1,348,738) -71%
LICENSES AND PERMITS
BUILDING PERMITS 521,000 276,061 726,437 702,123 (24,314)-3%
OTHER LICENSES & PERMITS 944,000 475,215 527,512 547,416 19,904 4%
TOTAL LICENSES & PERMITS 1,465,000 751,276 1,253,949 1,249,539 (4,410) 0%
CHARGES FOR SERVICES
PLANNING FEES 274,000 93,023 124,218 385,111 260,893 210%
BUILDING DEPARTMENT FEES 617,000 296,943 390,537 398,271 7,734 2%
ENGINEERING FEES 441,000 206,193 223,215 480,052 256,837 115%
AMBULANCE FEES 2,584,000 1,339,354 1,441,697 1,398,881 (42,816)-3%
RECREATION FEES 1,760,000 851,571 776,312 1,428,233 651,921 84%
OTHER CHARGES OR FEES 550,000 61,693 164,421 399,158 234,737 143%
TOTAL CHARGES FOR SERVICES 6,226,000 2,848,777 3,120,400 4,489,706 1,369,306 44%
FINES AND FORFEITURES 406,000 203,899 212,627 184,688 (27,939) -13%
INCOME FROM INVESTMENTS & PROPERTY 4,879,925 1,544,305 2,446,352 2,692,249 245,897 10%
INTERDEPARTMENTAL CHARGES 5,181,349 2,562,446 2,548,201 2,619,610 71,409 3%
OTHER REVENUE SOURCES 964,429 503,553 962,707 674,012 (288,695) -30%
TRANSFERS IN 10,000 10,000 10,000 10,000 0 0%
TOTAL GENERAL FUND $179,025,466 $70,469,475 $70,414,601 $87,414,487 $16,999,886 24%
(1)
(1) Calculated General Fund revenues are 24% above estimates as of Dec. 31, 2021.
GENERAL FUNDREVENUE COMPARISON
Feb. 8, 2022 Item #8 Page 26 of 36
Monthly Financial Report _________________________________________________________________ 7
Expenditures
Total General Fund expenditures and encumbrances through the month of December 2021 are $125.3 million,
compared to $94.3 million at the same time last year. The significant increase is largely due to an increase in
transfers, particularly the $10.7 million related to the new Technology Investment Program in support of the
Strategic Digital Transformation Investment Program, a $7.8 million transfer to the General Capital Construction
Fund from prior fiscal year 2020-21 General Fund surplus, and a $5.5 million additional discretionary payment
to CalPERS. The remaining budget available through the fiscal year ending June 30, 2022 is $96.5 million, or
43.5%. If funds were spent in the same proportion as the previous year, the General Fund would have 50.6% or
$112.2 million available.
Excluding the transfers out, contingencies, and non-departmental charges, the percentage available at
December 31, 2021 is 46.5%, slightly less than the 47.7% available at December 31, 2020.
The adopted General Fund budget for fiscal year 2021-22 increased by 12.8% or $20.9 million due to:
• Increased personnel costs (increase of $11.3 million):
o $6.1 million in additional salary costs associated with 23.5 new full-time positions, 20 of which are
directly related to City Council goals, 6.2 new part-time positions and previously negotiated and
anticipated wage increases
o $2.3 million in health insurance and retirement benefits costs
o $2.9 million increase in other personnel costs (Medicare, unemployment and disability benefits)
• Increased maintenance and operations costs (increase of $9.6 million):
o Implementation of the City Council’s goals
o Reinstatement of services after many programs were stalled or halted due to COVID-19 restrictions
o Increased legal services costs
• Decreased City Council contingency from $1.5 million to $500,000
A detailed schedule of General Fund expenditures is provided on the following page.
Feb. 8, 2022 Item #8 Page 27 of 36
Monthly Financial Report _________________________________________________________________ 8
ADOPTED WORKING
BUDGET BUDGET AMOUNT AVAILABLE %
DEPARTMENT DESCRIPTION FY 2021-22 FY 2021-22 (a)COMMITTED (b)BALANCE AVAILABLE (c)
POLICY AND LEADERSHIP GROUP
CITY ATTORNEY $2,037,136 $2,169,185 $1,130,734 $1,038,451 47.9%
CITY CLERK SERVICES 1,300,469 1,436,264 698,967 737,297 51.3%
CITY COUNCIL 649,975 667,690 282,070 385,620 57.8%
CITY MANAGER 2,112,097 2,370,197 1,101,303 1,268,894 53.5%CITY TREASURER 250,752 258,589 128,099 130,490 50.5%
COMMUNICATIONS & ENGAGEMENT 1,771,173 2,480,665 1,594,154 886,511 35.7%
TOTAL POLICY AND LEADERSHIP GROUP 8,121,602 9,382,590 4,935,327 4,447,263 47.4%
ADMINISTRATIVE SERVICES
ADMINISTRATION 568,883 714,415 347,443 366,972 51.4%
FINANCE 5,632,387 6,335,681 3,194,819 3,140,862 49.6%
HUMAN RESOURCES 4,959,011 5,461,482 2,685,280 2,776,202 50.8%
INNOVATION & ECONOMIC DEVELOPMENT 1,264,626 1,480,933 760,825 720,108 48.6%
TOTAL ADMINISTRATIVE SERVICES 12,424,907 13,992,511 6,988,367 7,004,144 50.1%
PUBLIC SAFETY
POLICE 48,756,017 53,010,391 28,887,171 24,123,220 45.5%
FIRE 33,521,412 35,069,496 19,299,367 15,770,129 45.0%
TOTAL PUBLIC SAFETY 82,277,429 88,079,887 48,186,538 39,893,349 45.3%
COMMUNITY SERVICES
COMMUNITY SERVICES ADMINISTRATION 656,221 863,789 510,321 353,468 40.9%
COMMUNITY DEVELOPMENT 10,502,061 12,495,750 6,794,254 5,701,496 45.6%
HOUSING & HOMELESS SERVICES 5,901,431 6,087,311 1,207,767 4,879,544 80.2%
LIBRARY & CULTURAL ARTS 13,780,555 14,523,196 6,839,430 7,683,766 52.9%
PARKS & RECREATION 19,159,380 20,965,518 13,199,782 7,765,736 37.0%
TOTAL COMMUNITY SERVICES 49,999,648 54,935,564 28,551,554 26,384,010 48.0%
PUBLIC WORKS
PUBLIC WORKS ADMINISTRATION 1,941,613 2,171,541 1,022,275 1,149,266 52.9%
CONSTRUCTION MANAGEMENT & INSPECTIONS 2,990,665 3,285,409 1,758,408 1,527,001 46.5%
ENVIRONMENTAL MANAGEMENT 1,282,225 1,719,435 1,125,761 593,674 34.5%
FACILITIES 6,555,934 8,744,326 4,990,473 3,753,853 42.9%
TRANSPORTATION 8,405,466 9,113,411 4,863,101 4,250,310 46.6%
TOTAL PUBLIC WORKS 21,175,903 25,034,122 13,760,018 11,274,104 45.0%
NON-DEPARTMENTAL & CONTINGENCY
(d)OTHER NON-DEPARTMENTAL 2,922,000 4,121,344 748,303 3,373,041 81.8%
OPERATING TRANSFERS OUT 7,148,000 25,784,056 22,108,056 3,676,000 14.3%
CONTINGENCY 500,000 452,079 0 452,079 100.0%
TOTAL NON-DEPT & CONTINGENCY 10,570,000 30,357,479 22,856,359 7,501,120 24.7%
TOTAL GENERAL FUND $184,569,489 $221,782,153 $125,278,163 $96,503,990 43.5%
(a) Working budget includes the adopted budget, open encumbrances from the end of the prior fiscal year, and any approved carry forwards.
(b) Actual expenditures on a budgetary basis include encumbrances and exclude non-budgeted items.
(c) Amount available would be 50.6% if funds were spent in the same proportion as the previous year.
(d) Other non-departmental includes property tax administration fees, assessment district administration, citywide litigation expenses,
and other items not attributed to a specific department.
AS OF 12/31/21
EXPENDITURE STATUS BY DEPARTMENTGENERAL FUND
Feb. 8, 2022 Item #8 Page 28 of 36
Monthly Financial Report _________________________________________________________________ 9
Council Contingency
The City Council has allocated $500,000 out of the General Fund budget for unanticipated emergencies or
unforeseen program needs. Below is a listing of the City Council’s contingency:
Donations
Carlsbad Municipal Code 2.08.100 authorizes the city manager to accept donations on behalf of the city in an
amount or of value of up to $5,000 per donation. These donations shall be used in accordance with the donor’s
intent or added to the city’s contingency account. Below is a listing of all donations, excluding minor food
donations such as donuts, that have been accepted during fiscal year 2021-22:
CONTINGENCY ACCOUNT
USE OF FUNDS
RESOLUTION
EXPLANATION AMOUNT DATE NUMBER
ADOPTED BUDGET $500,000
USES:
For the cost of producing and installing no parking signs on Avenida Encinas (17,100) 7/20/2021 2021-174
To shelter pets belonging to people experiencing homelessness (29,825) 9/28/2021 2021-219
Community spirit grant for Carlsbad High School (996) 10/20/2021 NA - See Note 1
TOTAL USES (47,921)
AVAILABLE BALANCE $452,079
Note 1 - City Council Policy 51 gives authorization to the City Manager to approve Community Spirit Grants less than $5,000.
Department Intention Qtr. 1 Oct.Nov.Dec.Qtr. 2 Total
Parks & Recreation Congregate Meals/Guest Cash Donations $3,611 $1,050 $877 $586 $2,513 $6,124
Parks & Recreation Home Meals Cash Donations 3,932 846 1,398 1,094 3,338 7,270
Parks & Recreation Senior Transportation Cash Donations 0 0 5 0 5 5
Parks & Recreation Leo Carrillo Ranch Cash Donations 835 394 263 1,761 2,418 3,253
Parks & Recreation Opportunity Grant Donations 2,966 864 796 598 2,258 5,224
Parks & Recreation Senior Center Cash Donations 399 128 679 573 1,380 1,779
Parks & Recreation Teens Program Cash Donations 0 0 1 0 1 1
Parks & Recreation Parks Maintenance Cash Donations 825 0 0 0 0 825
Subtotal - Parks & Recreation $12,567 $3,282 $4,019 $4,612 $11,913 $24,480
Library & Cultural Arts Book purchases $135 $50 $50 $175 $275 $410
Library & Cultural Arts Support Library Programs and Services 15 0 1 2,599 2,600 2,615
Subtotal - Library & Cultural Arts $150 $50 $51 $2,774 $2,875 $3,025
Fire Food and small gifts for crews $0 $0 $1,870 $450 $2,320 $2,320
Fire Sunglasses for lifeguard program 0 0 400 0 400 400
Fire Toys for sick or scared children 350 0 0 0 0 350
Subtotal - Fire $350 $0 $2,270 $450 $2,720 $3,070
Total Donations $13,067 $3,332 $6,340 $7,836 $17,508 $30,575
Donations
Feb. 8, 2022 Item #8 Page 29 of 36
Monthly Financial Report _________________________________________________________________10
Water Enterprise
Revenues
•A 3.23% decrease in water volume sales led to lower water delivery revenues, offset by a 2%
increase in water rates (beginning in January 2021).
•Interest earnings have decreased year-over-year due to a 21.1% decrease in the yield of the
Treasurer’s portfolio offset partially by a 6.5% increase in the average cash balance.
•The decrease in property taxes is primarily due abnormally high property taxes received in the
prior fiscal year resulting from allowable COVID-19 extensions.
•The increase in other revenues was due to a $1.4 million refund for the Carlsbad Municipal
Water District’s share of damages awarded for rates that were unlawfully assessed to the city
between 2011 and 2014.
Expenses
•The increase in staffing expenses includes an annual required contribution to the city’s unfunded
pension liability balance with CalPERS and salary increases, offset by vacancies experienced thus
far in the fiscal year.
•Higher interdepartmental expenses resulted from increased personnel related costs, and
maintenance and operations costs for shared services.
•Purchased water expenses have increased from the prior year due to a 4% rate increase in the
variable cost of water purchased from the San Diego County Water Authority (SDCWA) offset by
a decrease in the amount of water purchased.
•The largest factors driving the decrease in outside services and maintenance are services for
software, pipeline maintenance and water sampling services, offset by higher asphalt repairs.
•The largest factors driving the decrease in misc. expenses are purchases of meters and fittings.
•A decrease in captial outlay was from fiscal year 2020-21 purchase of industrial vacuum truck.
CH ANG E FROM
BU DG ET YTD ( * ) YTD ( * )YTD 2020-21 TO PERCENT
FY 2021-22 12/31/2020 12/31/2021 YTD 2021-22 CH ANG E
REV ENU ES:
WATER DELIVERY 40,583,097$ 22,242,062$ 21,919,401$ (322,661)$ -1.5%
INTEREST 374,897 220,323 170,523 (49,800) -22.6%
MISC. SERVICE CHARGES 281,081 161,931 146,879 (15,052) -9.3%
PROPERTY TAXES 3,687,900 1,795,692 1,772,564 (23,128) -1.3%
FINES, FORFEITURES & PENALTIES 104,651 2,421 2,622 201 8.3%
OTHER REVENUES 434,829 227,873 1,539,921 1,312,048 575.8%
TOTAL OPERATING REV ENU E 45, 466, 455 24, 650, 302 25, 551, 910 901, 608 3.7%
EXPENSES:
STAFFING 4,347,140 1,953,799 2,172,765 218,966 11.2%
INTERDEPARTMENTAL SERVICES 2,969,197 1,359,375 1,470,317 110,942 8.2%
PURCHASED WATER 26,700,000 12,898,462 12,941,227 42,765 0.3%
MWD/CWA FIXED CHARGES 6,860,000 3,350,332 3,342,836 (7,496) -0.2%
OUTSIDE SERVICES/MAINTENANCE 2,603,249 398,335 364,415 (33,920) -8.5%
DEPRECIATION/REPLACEMENT 4,500,000 2,100,000 2,250,000 150,000 7.1%
MISCELLANEOUS EXPENSES 992,104 368,840 332,284 (36,556) -9.9%
CAPITAL OUTLAY 0 413,198 0 (413,198) -100.0%
TOTAL OPERATING EXPENSES 48, 971, 690 22, 842, 341 22, 873, 844 31, 503 0.1%
OPERATING INCOME/( L OSS)( 3, 505, 235)$ 1, 807, 961$ 2, 678, 066$ 870, 105$ 48.1%
(*) Adjusted to reflect timing differences for water purchases and depreciation.
Dec. 31, 2021
W ATER OPERATIONS FU ND
1%1.9%
0.1%
1%1.9%
3.7%
Feb. 8, 2022 Item #8 Page 30 of 36
Monthly Financial Report _________________________________________________________________11
Wastewater Enterprise
Revenues
•Charges for current services are higher than in the prior year due primarily to a 3% rate increase
that began in January 2021 coupled with development throughout the city. Commercial
customer water usage is also higher in the current year because commercial/industrial
wastewater rates in Carlsbad are based on water usage, and commercial customers had
significantly decreased during the peak of the COVID-19 pandemic related shutdown.
•Interest earnings decreased due to a 21.1% decrease in the yield of the Treasurer’s portfolio
offset partially by a 3.8% increase in the monthly average cash balance.
•The decrease in other revenues is due to a nonrecurring reimbursement from the City of
Oceanside for a wastewater bypass 2020 storm events.
Expenses
•The increase in staffing expenses is mostly from an increase in the annual required contribution
to the city’s unfunded pension liability balance with CalPERS.
•Encina plant services to date are a combination of actuals and an estimate of the annual Encina
expense prorated monthly.
•The decrease in outside services is primarily due to timing of pipeline maintenance.
•The capital outlay in fiscal year 2021-22 was for the procurement of a utility truck.
CH ANG E FROM
BU DG ET YTD* YTD*YTD 2020-21 TO PERCENT
FY 2021-22 12/31/2020 12/31/2021 YTD 2021-22 CH ANG E
REV ENU ES:
CHARGES FOR CURRENT SERVICES 13,773,859 6,962,128 7,726,915 764,787 11.0%
INTEREST 75,000 66,211 47,916 (18,295) -27.6%
OTHER REVENUES 115,002 216,747 53,747 (163,000) -75.2%
TOTAL OPERATING REV ENU E 13, 963, 861 7, 245, 086 7, 828, 578 583, 492 8.1%
EXPENSES:
STAFFING 2,891,648 1,154,306 1,370,981 216,675 18.8%
INTERDEPARTMENTAL SERVICES 1,357,384 696,885 672,776 (24,109) -3.5%
ENCINA PLANT SERVICES 4,665,000 2,970,456 3,311,758 341,302 11.5%
OUTSIDE SERVICES/MAINTENANCE 1,359,394 229,348 177,424 (51,924) -22.6%
DEPRECIATION/REPLACEMENT 5,300,000 2,500,000 2,650,000 150,000 6.0%
MISCELLANEOUS EXPENSES 776,802 293,223 288,947 (4,276) -1.5%
CAPITAL OUTLAY 35,135 0 35,032 35,032 100.0%
TOTAL OPERATING EXPENSES 16, 385, 363 7, 844, 218 8, 506, 918 662, 700 8.4%
OPERATING INCOME/L OSS ( 2, 421, 502) ( 599, 132) ( 678, 340) ( 79, 208) 13.2%
(*) Adjusted to reflect timing differences for Encina quarterly invoices and depreciation.
Dec. 31, 2021
W ASTEW ATER OPERATIONS FU ND
12.9%
8%
12.9%8%
Feb. 8, 2022 Item #8 Page 31 of 36
DEPARTMENTDESCRIPTIONCOST CATEGORY AMOUNTCitywideAdditional budget needed for City Council approved 4% Management salary adjustmentPersonnel153,500$ CitywideAdditional budget needed for City Council approved 4% Part‐Time salary adjustmentPersonnel138,000 CitywideDistribution of Final Vacation Pay budget to departments for actual costs through Dec. 2021* Personnel421,912 CitywideOther approved and pending salary adjustments**Personnel1,012,425 Community Services ‐ AdministrationFunds for Community Services Administration to take over the payment of property tax invoice itemsMaintenance & operations6,110 Community Services ‐ Library & Cultural ArtsReclassification of an Associate Analyst to Management AnalystPersonnel6,260 Public Safety ‐ PoliceVeriton Software to support AB953 prohibiting racial and identity profiling by law enforcementMaintenance & operations13,200 Public Safety ‐ PoliceAdditional Laserfiche licensesMaintenance & operations30,491 Public Safety ‐ Police1582 Health Screening for employeesMaintenance & operations13,200 Public Safety ‐ PoliceVarious replacement items (SWAT gear, electronic message board, etc.)Maintenance & operations150,000 Public Safety ‐ PoliceAdditional current fiscal year costs related to new CPMA agreementPersonnel62,000 Public Works ‐ Environmental ManagementCity Council approved addition of 2.0 FTEs for Sustainable Materials ManagementPersonnel79,583 Public Works ‐ TransportationExpand pressure washing contract services in the VillageMaintenance & operations86,000 Total2,172,680$ *The budget for final vacation pay was set aside in non‐departmental to be allocated to departments based on actual costs. This distribution covers actual final vacation pay costs through Dec. 2021**This includes previously‐approved salary adjustments, salary adjustments still under consideration, and a placeholder for funds that may be needed for new bargaining unit agreements.List of City Manager Approved General Fund Departmental Mid‐year Requests and City Council FY 2021‐22 Approved ItemsExhibit 3
Feb. 8, 2022Item #8 Page 32 of 36
RESOLUTION NO. 2022-039
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING FISCAL YEAR 2021-22 MID-YEAR REQUESTS AND
THE RELATED NEW FULL-TIME STAFF POSITIONS AND TRANSFERS OF FUNDS
BETWEEN DEPARTMENTS IN THE GENERAL FUND
Exhibit 4
WHEREAS, the City Council of the City of Carlsbad, California, must authorize any increase in
the number of authorized permanent personnel positions above the level approved during adoption
of the operating budget; and
WHEREAS, during the fiscal year 2021-22 mid-year budget review, three requests were made
by departments seeking additional full-time staffing; and
WHEREAS, the requests include a request from the Communications & Engagement
Department to convert four part-time printing and graphics positions to two full-time community
relations manager positions, a request from the Library & Cultural Arts Department to convert two
three-quarter-time circulation supervisor positions to full-time positions, and a request from the Fire
Department to hire a new full-time community health nurse and reclassify an administrative battalion
chief to a division chief; and
WHEREAS, sufficient funding is available in the General Fund due to identified savings for the
new full-time equivalent positions for the remainder of fiscal year 2021-22; and
WHEREAS, the City Council must authorize transfers of funds between departments within the
same fund if the transfer is greater than $100,000; and
WHEREAS, the Fire Department's additional full-time staffing request requires a transfer o-=
funds greater than $100,000 from General Fund savings.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1. That the above recitations are true and correct.
2. That, of the three full-time staffing requests presented to the City Council, the following
is/are approved:
Fire Department
Communications & Engagement Department
Library & Cultural Arts Department
Feb. 8, 2022 Item #8 Page 33 of 36
RESOLUTION NO. 2022-040
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE APPROPRIATION AND TRANSFER FROM
GENERAL FUND, RECYCLED WATER FUND, WASTEWATER FUND AND SOLID
WASTE FUND RESERVES TO THE CARLSBAD MUNICIPAL WATER DISTRICT
WATER FUND TO ELIMINATE AN EXISTING LIABILITY
Exhibit 5
WHEREAS, the City of Carlsbad participates in the California Employers' Retiree Benefit Trust
(CERBT) Fund, a Section 115 trust fund dedicated to prefu'nding Other Post-Employment Benefits
(OPEB); and
WHEREAS, during fiscal year 2020-21, the California Public Employees' Retirement System,
which oversees the CERBT Fund, required the city to combine the separate city and Carlsbad Municipal
Water District OPEB acc<!unts into one single plan account; and
WHEREAS, the combining of the two accounts resulted in the General Fund and several other
enterprise funds owing the Water Fund a cash transfer; and
WHEREAS, at 2020-21 fiscal year end, a liability (or "due from") was recorded for the various.
funds and an asset (or "due to") was recorded in the Water Fund; and
WHEREAS, to eliminate the liability, an appropriation and transfer in to the Water Fund must
be recorded.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as.
follows:
1. That the above recitations are true and correct.
2. That the Deputy City Manager, Administrative Services is authorized to appropriate and
transfer $993,748 from the General Fund, $26,659 from the Recycled Water Fund,
$46,534 from the Wastewater Fund, and $7,980 from the Solid Waste Fund, for a tota[
of $1,074,921, to the Carlsbad Municipal Water District's Water Fund.
Feb. 8, 2022 Item #8 Page 35 of 36
Additional Materials Related to Staff Report Item No. 8 -Economic and Financial Update
Feb. 7,2022
Page 2
cc: Scott Chadwick, City Manager
Celia Brewer, City Attorney
David Graham, Chief Innovation Officer
Matt Sanford, Economic Development Manager
Roxanne Muhlmeister, Assistant Finance Director
INDUSTRY CLUSTERS
Life Sciences (Source: 2022 Business Report and Industry Cluster Update)
The Life Sciences industry cluster employs 6,657 workers across 134 firms and experienced a 2.6% increase in employment
between 2018 and 2020. The cluster is 5.51 times more concentrated in Carlsbad than the national average and annual
wages per worker average $123,702.
San Diego County and California have experienced parallel employment growth in the Life Sciences cluster between
2010 and 2020. In the same ten-year period, employment in Carlsbad grew by 75%. Between 2016 and 2018, Carlsbad
experienced over 40% growth. Over the past two years (2018-2020), however, employment growth tapered off compared
to years prior.
Technology (Source: 2022 Business Report and Industry Cluster Update)
The Information and Communications Technologies (ICT) cluster employs 9,008 workers across 343 firms in Carlsbad and is
2.75 times more concentrated in Carlsbad than the national.average. Annual wages per worker average $136,254, and the
ICT industry cluster experienced a 3.3% increase in the number of jobs between 2018 and 2020.
San Diego County and California experienced steady parallel growth in the ICT cluster between 2010 and 2020. In the same
ten-year period, Carlsbad experienced an initial decline in employment between 2012 and 2015; between 2015 and 2020,
employment in the ICT cluster has steadily trended upwards.
Clean Technology (Source: 2022 Business Report and Industry Cluster Update)
Between 2018 and 2020, the number of workers employed at Cleantech firms increased by 22.2 percent. By 2019, the 48
Cleantech firms in Carlsbad employed more than 872 people. The average annual wage per worker is $109,779, and the
Cleantech industry cluster in Carlsbad is 4.66 times more concentrated than the national average.
Between 2010 and 2012, Carlsbad experienced an initial employment drop for the Cleantech industry followed by steady
growth between 2012 and 2020. Employment growth in California peaked in 2013 and has been on a steady decline
since. Growth in San Diego County also peaked in 2013, dropping by over 25 percent between 2013 and 2017. Since 2017,
employment in the Cleantech cluster for San Diego County has been on a steady increase.
Sports Innovation & Design (Source: 2022 Business Report and Industry Cluster Update)
The Sports Innovation & Design industry cluster employs 1,804 workers across 116 firms and experienced a 16.3 percent
decrease in employment between 2018 and 2020. The cluster is 5.06 times more concentrated in Carlsbad than the
national average and annual wages per worker average $75,652.
Employment in the Sports Innovation & Design cluster has steadily declined since 2013 in Carlsbad. Both San Diego County
and California have declined steadily since 2015 and experienced sharp declines between 2019 and 2020, likely due to the
COVID-19 pandemic.
Hospitality & Tourism (Source: 2022 Business Report and Industry Cluster Update)
Carlsbad's Hospitality & Tourism cluster is about 1.35 times more concentrated in Carlsbad than the national average and
employs 9,179 people across 467 businesses. Hospitality & Tourism experienced a sharp 34% decrease in employment
between 2018 and 2020, driven by the effects of the COVID-19 pandemic between 2019 and 2020. Average annual wages
per worker remain low relative to other key industry clusters, with workers earning $31,315 on average.
Carlsbad, San Diego County, and California experienced sharp declines between 2019 and 2020, during which sub-clusters
like Theater Companies and Dinner Theaters, Amusement and Theme Parks, and Amusement Arcades were shut down to
mitigate the effects of the COVID-19 pandemic.
7
INDUSTRY IMPACT
Largest Industries {Source: EMS/, December 2021)
Carlsbad's economy significantly exceeds the natipnal average in manufacturing, accommodation and food services,
and professional, scientific and technical services jobs. These sectors, which would include tech, life sciences, and other
innovation industries are generally more resilient to recessions, also represent significant job growth in the economy.
GRP by Industry
• 2020 Gross Regional Product
Manufacturing
Professional, Scientific, and Technical Services
Wholesale Trade
Finance and Insurance
Government
Retail Trade
Information
Accommodarfon and Food Services
He~lth Care and Social Assistance
Admin istrative and Support and Waste Management and
Remediation Services
Management of Companies and Enterprises
Construction
Real Estate and Rental and Leasing
Utilities
Other Services (except Public Administration)
Transportation and V\/arehousing
Arts, Entertainment. and Rec redtion
-----11111111 --ii-a • Educational Services ■
Agriculture, Forestry, Fishing ai:id Hunting I
SO.ODO
Industry size by employment
• Industry Jobs
Manufacturing
Professional. Scientific, and Technical Services
.A.ccommcd~tion and Food Services
Retail Trade
He~lth C:.ire and Soci~I Assist~nce
Government
Other Services (except PL1blic Administration)
Administrative and Support and Waste M3n:igement and
RE:-mecliation Services
W holesale Trade
Construe lion
Sl.000B
Management of Com panies cind Enterprises -4-
Finance and Insurance
Tra.nsport:.=ition and Warehousing
Arts. Entertainment, and Recreation -4-
Real Estate and Rental and Leasing ---■-
Educational Services
Information
Utilities 11111
Agriculture. Forestry. Fishing 21nd Hunting I
0 2.000
S.2.000B
National Average
-I -
4,000 6,000
8
S.3.000B S4.000B $5.000B
8.000 10.000 12,000 14,000
Kaylin McCauley
From:
Sent:
To:
Christine Davis <chris@carlsbad-village.com>
Tuesday, February 8, 2022 1 :52 PM
City Clerk
Subject: Item #8 -List of City Manager Approved General Fund Mid-Year Requests
Re: Public Works -Transportation (Expand pressure washing contract services in the Village)
Honorable Mayor Hall and Members of the City Council,
Carlsbad Village is key to the quality of life enjoyed by residents and visitors in the City of Carlsbad. We all enjoy seven
miles of coastline just two blocks from the heart of a downtown bustling with excellent shopping, dining, and services. I
know we all agree that we are fortunate to live, work and play in such a lovely place.
Because of its popularity and huge selection of amenities, the Village is well-used and much-loved. The Carlsbad Village
Association is joining forces with Richness of Giving, the Carlsbad High School C3 Club, Engel & Volkers, and others, to
begin quarterly cleanups in the Village starting on March 20th. Our own tourism board, Visit Carlsbad, is graciously
sponsoring our collective efforts.
While this is a small contribution to the services already provided by the city, it is a step in the right direction to help
maintain the quality of life we desire in Carlsbad Village. To that end we would like to thank city staff and council for
approving additional funding to expand pressure washing services downtown. The expanded services will make an
immediate improvement and will be appreciated and noticed by all.
The Carlsbad Village Association is, as we have previously, happy to meet with staff to help identify high traffic areas in
the Village that need additional attention. We are always happy to assist in any way we can.
Thank you again for your attention to Carlsbad Village.
CHRISTINE DAVIS I Executive Director
Carlsbad Village Association
p: 760.644.2121
Subscribe to our eNewsletter I Become a Member!
All Receive -Agenda Item # ~
For the Information of the:
CITY COUNCIL
Date t/o/i1-CA V cc L
CM ✓ ACM ✓ocM (3) 7
CAUTION: Do not open attachments or click on links unless ou recognize the sender and know the content i
safe.
1
Matt Sanford, Economic Development Manager
Roxanne Muhlmeister, Assistant Finance Director
Brigid Drury, Finance Manager
February 8, 2022
Economic and Financial
Update: Q2 FY 2021-22
TODAY’S PRESENTATION
•Economic update
•Financial update
•Mid-year budget review
ECONOMIC AND FINANCIAL UPDATE
ECONOMIC UPDATE
3
•Timeframe analyzed
o Second quarter FY2021-2022 (Oct. –Dec. 2021)
•Macro Trends
•Local Impact
ECONOMIC AND FINANCIAL UPDATE
MACRO TRENDS
4
ECONOMIC AND FINANCIAL UPDATE
•Omicron had substantial
workforce impacts in December
and January
o Areas with higher vaccine rates
(like San Diego) fared better
•Global Manufacturing has
caught up to demand
•Supply chain issues are
normalizing
•Inflation has driven prices up
Global Output and New Orders Growth
Comparisons
2022
5
ECONOMIC AND FINANCIAL UPDATE
6
ECONOMIC AND FINANCIAL UPDATE
ECONOMIC AND FINANCIAL UPDATE
Consumer Price Index –12 Month Percentage Change
7%
ECONOMIC AND FINANCIAL UPDATE
Consumer Price Index
12 Month Percentage Change by Major Category
29.3%
6.3%7%5.5%
ECONOMIC RECOVERY
•Most sectors are continuing to or have fully recovered
•Omicron surge did have a noticeable impact on businesses, causing workforce shortages and some operational uncertainty.
•High vaccine rates and continued mitigations have blunted the harshest impacts in San Diego County
•Innovation economy sectors, like life-sciences, tech, and manufacturing are continuing to expand
ECONOMIC AND FINANCIAL UPDATE
CARLSBAD ECONOMY
•Carlsbad’s GRP was $14.6 billion in 2021
•Carlsbad’s GRP was $13.6 billion in 2020 & 2019
•Carlsbad’s economy grew by approximately
$1 billion in the last year
ECONOMIC AND FINANCIAL UPDATE
CARLSBAD UNEMPLOYMENT
•California unemployment rate 6.5%
•County unemployment rate 4.2%
•Carlsbad unemployment rate 3.4%
ECONOMIC AND FINANCIAL UPDATE
December 2021
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Carlsbad Unemployment Rate
2020 vs 2021
2020 2021
0
2
4
6
8
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Unemployment Rate 2021
Carlsbad San Diego County
North County Avg w/o Carlsbad California
CARLSBAD JOBS
•June through September saw 15,418 unique job postings
•Increase of more than 2,000 postings from previous quarter
•Seven consecutive quarters of increased hiring demand
o Manufacturing
o Administrative Services
o Professional, Scientific & Technical
•Average salary for posted jobs was $41,600
•Employers in Accommodation and Food Services continue
noting trouble filling jobs
ECONOMIC AND FINANCIAL UPDATE
COMMERCIAL REAL ESTATE
•Vacancy rates for industrial properties are 3.9%
•Vacancy rates for office properties are 14.4%
•Vacancy rates for retail properties are up to 8.5%
ECONOMIC AND FINANCIAL UPDATE
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4
Carlsbad Commercial Vacancy Rates
Carlsbad Retail Carlsbad Office Carlsbad Industrial
CARLSBAD TOURISM
•Normalizing activity
•Steeper than usual decline in the fall
•Room rates have kept above 2019 levels
ECONOMIC AND FINANCIAL UPDATE
0
20
40
60
80
100
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Hotel Occupancy 2021
City of Carlsbad San Diego County, CA
City of Oceanside, CA City of Newport Beach, CA
0.00
100.00
200.00
300.00
400.00
500.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average Daily Rate 2021
City of Carlsbad San Diego County, CA
City of Oceanside, CA City of Newport Beach, CA
RESIDENTIAL REAL ESTATE
•Median home values now at $1.3 million
•Median home values have risen 32% over the past year
•The continued rise in home values is partially attributed to
constrained supply, low interest rates, and a strong demand
in the region
ECONOMIC AND FINANCIAL UPDATE
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Median Home Price
2019 2020 2021
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Median Home Price Comparison
North County Avg w/o Carlsbad Carlsbad
NEW DEVELOPMENT
& BUSINESS ACTIVITY
•Business licenses issued dropped in the last quarter
•Overall, Carlsbad lost fewer businesses during the pandemic
than during the preceding 18-month period
•Home builder optimism is rising
ECONOMIC AND FINANCIAL UPDATE
0
500
1000
1500
2000
2500
3000
Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
Business Licenses Issued by Quarter
Non-Residential Residential Outside City Total
0
200
400
600
800
1000
1200
Commercial Residential Commercial Residential
2020 2021
Building Permits Issued
Q1 Q2 Q3 Q4
KEY TAKEAWAYS
•Carlsbad’s diverse economy has proven resilient
•Innovation industries like life sciences and tech have
excelled
•Hospitality & Tourism industry is projecting a robust
recovery
•Supply chain issues are normalizing but may linger
through next quarter
•Inflation will push prices higher
ECONOMIC AND FINANCIAL UPDATE
GENERAL FUND REVENUES
18
(second quarter of fy 2021-22)
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
Property tax Sales tax Transient
occupancy tax
Other taxes Income from
inv. and prop.
Development
related revenue
Other revenues
FY 2020-21
FY 2021-22 Expected
FY 2021-22 Actual
GENERAL FUND REVENUES
Revenue category
Actual
FY 2020-21
Actual
FY 2021-22
$
difference
%
difference
Property tax $27.0 $26.3 -$0.7 -2%
Sales tax 19.5 25.8 6.3 32%
Transient occupancy tax 6.6 16.9 10.3 156%
Other taxes 4.8 5.9 1.1 22%
Income from inv. and property 2.4 2.7 0.3 10%
Development related revenue 1.5 2.0 0.5 34%
Other revenues 8.6 7.8 -0.8 -9%
Total $70.4 $87.4 $17.0 24%
(in millions)
$17.0 24%
Revenue category
Expected
FY 2021-22
Actual
FY 2021-22
$
difference
%
difference
Property tax $26.9 26.3 -$0.6 -2%
Sales tax 21.1 25.8 4.7 22%
Transient occupancy tax 7.8 16.9 9.1 116%
Other taxes 4.7 5.9 1.2 26%
Income from inv. and property 1.5 2.7 1.2 74%
Development related revenue 0.9 2.0 1.1 125%
Other revenues 7.6 7.8 0.2 4%
Total $70.5 $87.4 $16.9 24%
GENERAL FUND REVENUES
(in millions)
PROPERTY TAX
•Majority of property taxes collected in Dec. and April
•Assessed values in Carlsbad increased by 3.14%
•Decrease in property tax revenue due to:
•Timing differences
•Receipts of prior year taxes
•Aircraft taxes
ECONOMIC AND FINANCIAL UPDATE
SALES TAX
•Majority of receipts are from Q2 & Q3 2021,
the start of the pandemic rebound
•Key gains seen in amusement parks, motor
vehicle manufacturing, gasoline stations,
general merchandise stores and traveler
accommodations
ECONOMIC AND FINANCIAL UPDATE
TRANSIENT OCCUPANCY TAX
ECONOMIC AND FINANCIAL UPDATE
•Revenues to date represent June through November stays
•Increase of $10.3 million or 156% compared to prior year
•Average occupancy during the last 12 months has been
61% compared to 49% for the same period in the prior year
•The majority of TOT collected to date is from tourists versus
group events
OTHER TAXES
•Business license tax revenues are up due to one-time payments of overdue renewals and penalties combined with a small increase in new business licenses
•Franchise taxes are relatively flat and the majority comes in April from SDG&E
•Transfer taxes on property sales have increased due to an increase in property transfers
ECONOMIC AND FINANCIAL UPDATE
INCOME FROM INVESTMENTS
AND PROPERTY
•Revenue increased by 10% from Q2 of prior year
•Biggest driver: income from property and rentals
•Investment income continues decline
•Yield of city’s portfolio is 1.45% versus 1.15% in
the prior year
•Cash balance has increased, helping to offset
decrease
ECONOMIC AND FINANCIAL UPDATE
OTHER REVENUES
•Ambulance fees, fines and forfeitures,
interdepartmental charges, recreation fees,
development fees, reimbursements, and a variety
of other revenues are included in other revenues
•Other reimbursements decreased
•Recreation fees continue to increase
ECONOMIC AND FINANCIAL UPDATE
GENERAL FUND EXPENDITURES & ENCUMBRANCES
27
(second quarter of fy 2021-22)
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
Personnel Maintenance & operations Transfers out Other
FY 2021-22 Budget
Q2 FY 2020-21 Actual
Q2 FY 2021-22 Actual
GENERAL FUND EXPENDITURES & ENCUMBRANCES
(in millions)
Category
FY 2021-22
Appropriation
Quarter 2
FY 2020-21
Quarter 2
FY 2021-22
% of Budget
Spent/Committed
to Date
Personnel $121.6 $53.7 $62.6 51%
Maintenance & operations 72.0 32.4 39.1 54%
Transfers out 25.8 5.2 22.1 86%
Capital outlay 1.4 0.8 1.3 92%
COVID-19 & Innovation 0.5 2.1 0.2 46%
Contingency 0.5 0.0 0.0 0%
Total $221.8 $94.2 $125.3 56%
GENERAL FUND EXPENDITURES & ENCUMBRANCES
(in millions)
Category FY 2021-22
Appropriation
QTR 2 EXP
FY 2021-22
% of Budget
Spent to Date
OPEN POs
at 12/31/21
% of Budget
Spent/Committed
to Date
Personnel $121.6 $62.6 51%$0.0 51%
Maintenance & operations 72.0 22.7 32%16.4 54%
Transfers out 25.8 22.1 86%0.0 86%
Capital outlay 1.4 0.4 27%0.9 92%
COVID-19 & Innovation 0.5 0.1 10%0.2 46%
Contingency 0.5 0.0 0%0.0 0%
Total $221.8 $107.8 49%$17.5 56%
GENERAL FUND BUDGET
ECONOMIC AND FINANCIAL UPDATE
•Adopted budget of $184.6 million
•Working budget of $221.8 million
•Available budget remaining of $96.5 million, or 44%
•Includes actual expenditures through Dec. 2021
•Includes open purchase order commitments
WATER AND WASTEWATER
ECONOMIC AND FINANCIAL UPDATE
Compared to prior year through Q2:
•Water revenues are up 3.7% and expenses are
up 0.1%
•Wastewater revenues are up 8.1% and
expenses are up 8.4%
GOLF COURSE
ECONOMIC AND FINANCIAL UPDATE
•Net income $540,000 higher than last year
•Driven by continued demand for golf and an
increase in food & beverage sales
NEXT STEPS
•Monitor revenues and expenditures
•Publish economic and financial status reports:
carlsbadca.gov/doingbusiness
carlsbadca.gov/departments/finance/financial-reports
•Return in May 2022 with Quarter 3 update
ECONOMIC AND FINANCIAL UPDATE
MID-YEAR BUDGET REVIEW
ECONOMIC AND FINANCIAL UPDATE
•Citywide review
•Departments’ analysis of:
•Whether revenues and expenditures to
date are in line with targets adopted in
the fiscal year 2021-22 operating budget.
•Areas of unanticipated savings when
compared to the adopted budget, such
as unintended staff vacancies.
RESULTS OF REVIEW
ECONOMIC AND FINANCIAL UPDATE
•Departments made mid-year budget
requests
•The City Manager approved requests under
his authority
•Transferred identified budget savings
between departments to accommodate
approved requests
•No impact to the General Fund FY 21-22
REASONS FOR BUDGET TRANSFERS
36
•Actual personnel budget savings through Dec. 2021
•Projected savings in departments’ budget for maintenance & operations
•City Council approved salary increases
•Distribution of final vacation pay budget to General Fund departments
•Other pending and approved salary adjustments to respond to market
instability; consistent with City Council approved salary schedule
•City Manager approved requests (see Exhibit 3)
•Example: Expansion of pressure washing services in the Village
ECONOMIC AND FINANCIAL UPDATE
COMMUNICATIONS &
ENGAGEMENT
ECONOMIC AND FINANCIAL UPDATE
•Convert 4 part-time printing and graphics
positions to 2 full-time community relations
manager positions
•$4,100 annual savings because of reduced need to hire outside consultants to support community engagement effort
•Will result in stronger community relationships and more efficient operations
LIBRARY & CULTURAL ARTS
ECONOMIC AND FINANCIAL UPDATE
•Convert 2 of the ¾ circulation supervisor
positions to full-time positions and reduce its part-time staff by 1.22 full-time equivalent positions.
•$9,400 annual savings
•Will better enable the department to return to pre-pandemic open hours sooner; improve staff development and organizational alignment
FIRE DEPARTMENT
ECONOMIC AND FINANCIAL UPDATE
•Add one new full-time Community Health Nurse
position and reclassify an Administrative Battalion
Chief to Division Chief
•One-time transfer of General Fund budget savings to
the Fire Department of $209,000 for 3 months of
personnel costs and one-time costs to support the
new position
•Ongoing increase of $200,000
FIRE DEPARTMENT
ECONOMIC AND FINANCIAL UPDATE
•Will support public and workforce health
requirements and serve as a public health specialist
and health care provider.
•Will improve response to current and future
community health concerns by centralizing
responsibilities managed by Human Resources,
Police, and Fire.
OTHER POST-EMPLOYMENT
BENEFITS TRANSFER REQUEST
ECONOMIC AND FINANCIAL UPDATE
•In FY 20-21, CalPERS required the city to combine the
CMWD and City OPEB accounts
•Due to being different percentages funded, the General
Fund and several other funds owed the CMWD Water
fund a cash transfer
•The liability was recorded on the FY 20-21 annual
comprehensive financial report
•Approving an additional appropriation and transfers will
eliminate the liability and does not result in any net
fiscal impact citywide
Fund Transfer
General Fund -$993,748
Recycled Water -$26,659
Wastewater -$46,534
Solid Waste -$7,980
CMWD +$1,074,921
NEXT STEPS
•Adopt the resolution approving one or more
department requests
•Adopt the resolution authorizing an
appropriation and transfer to CMWD
ECONOMIC AND FINANCIAL UPDATE