HomeMy WebLinkAbout; ; 1959-60 Report of Audit; 1960-10-19CITY OF CARLSBAD
2960 Pto Pico
CarIsbad, CaIf f ornfa
Report of Audtt
July f* 1959 to June 50. I960
EVERTS AND ESENOFF
CERTIFIED PUBLIC ACCOUNTANTS
San Diego, California
Oceanside, California El Cajon, California
CARL M. BSENOFF. C. P. A. MEMBERS
ALBERT M. HUDSON, C.P.A. • . AMERICAN INSTITUTE OF
JOHN T. SWAN, C. P. A. CERTIFIED FUJUC ACCOUNTANTS
HAMILTON MOODY, C. P. A. CALIFORNIA SOCIETY OF '
HERBERT L. BECRETT, C.P.A. CERTIFIED PUBLIC ACCOUNTANTS
CHARLESW.LAMDEN,C.,A. EVERTS AND ESENOFF SANDIECC^ALIFORNIA
ROY M.HERAMB, C.P.A. .
JOE D. MCCARTHY, C.P.A. CERTIFIED PUBLIC ACCOUNTANTS BEUMONT 4-6101
RICHARD W.JENSEN, C. P. A. 705 THIRD STREET EL CAJON. CALIFORNIA
DARRFT T P PERTUS C P A • HICKORY 4-9411DARRELLF.PERIUS, C.P.A. OCEANSIDE , CALIFORNIA
RUSSELL S.WYCOFF, C.P.A. OCEANSIDE, CALIFORNIA
SAJUIOGA 2-7689October 19, I960' VISTA, CALIFORNIA
PALACE 4-6252
THE HONORABLE MAYOR AND CITY COUNCIL
Ci ty of Carlsbad
2960 P?o Pico
Carlsbad, Cat\ fornla
Gent Iemen:
We have examined the financial records of the City of Carlsbad Water
Department, Carlsbad, California, for the period July I, 1959 to June 30, I960,
and have prepared the accompanying statement of financial position - all funds,
at June 30, I960, and the related statements of revenues and expenditures and
unappropriated surplus for the year then ended. Our examination was made in
accordance with generally accepted auditing standards and accordingly Included
such tests of the accounting records and such other auditing procedures as we
considered necessary in the circumstances.
COWAENTS RESPECTING FINANCIAL POSITION
The statement of financial position - all funds Is presented on exhibit A.
Following is a condensed comparative statement of financial position - all funds
at June 30, I960 and June 30, 1959.
June 30, June 30, Increase
I960 1959 (Decrease)
CURRENT ASSETS;
Cash $91,389.08 $76,116.70 $ 15,272.38
Accounts receivable and accrued
interest 27,952.25 31,232.09 ( 3,279.84)
Warehouse stock 28,124.68 31,093.89 ( 2,969.21)
Work In progress 5,816.67 -o- 5,816.67
Prepaid expenses I 15.29 866.85 ( 751.56)
Total current assets 153,397.97 139,309.53 14,088.44
DEDUCT: CURRENT LIABILITIES 29.517.46 55,193.29 25,675.83
Net working capital (carried
forward) 123,880.51 84,116.24 39,764.27
V ••
June 30, June 30, Increase
I960 |Q59 (Decrease)
Net working capital -
(brought"forward) $ 123,880.51 $ 84,116.24 $39,764.27
ADD!
Investments 64,564.58 45,000.00 19,564.58
• Fixed assets (net) 1,316,634.62 1,284,076.67 32,557.95
Future bond requirements 767,000.00 767,000.00 -o-
Total 2,272,079.71 2,130,192.91 91,886.80
DEDUCT;
Waterworks Revenue Bonds, 1958 767,000.00 767,000.00 -o-
Reserves and surplus SI,505.079.71 $1.413,192.91 $91,386.80
Following are comments recardin^ each fund shown on exhibit A.
WATER FUND:
The gross revenues of the enterprise are deposited in the water fund. In
accordance with Resolution Mo. 397, monthly transfers are made to the bond service
fund, the reserve fund and the maintenance and operations fund. Cash transfers
during the year were as follows:
Sond service fund $ 46,367.39
Bond reserve fund 1,440.00
Maintenance and operations fund lnI,822.30
Total $239.630.19
Two accounts receivable for this fund are in dispute and a reserve of
32,353.68 for possible loss has been provided. The City attorney is presently
considering legal action in this matter. The water accounts receivable may be
shown as foI lows:
Total water accounts receivable $27,519.90
Less reserve for (esses _2,353.63
Net—per exhibit A $25,166.22
ORIGINAL
BOND SERVICE FUND:
The Investments owned by the bond service fund, U. S. Treasury bonds, 2-1/2%,
due November 15, 1961, with a face value of $20,000.00, were purchased at a discount
of $475.00. This discount is b^ing allocated to income as the investment matures.
The activity in this fund may be shown as follows:
Cash with Treasurer, July I, 1959
Add: Transfers from water fund
Interest received on investment
Area inclusion fee
Total
Deduct: Purchase of U. S. Treasury bonds
Paid to fiscal agent for payment
of matured bond coupons
Cash with Treasurer, June 30, I960
$19,525.00
31,319.50
$15,362.33
46,367.39
12.36
200 ._00
61,942.08
50,844.50
$11,097.58
The Waterworks Revenue Bonds, 1958 are dated July I, 1958 and are due as
follows:
Years
1964-69
1970-74
1975-78
1979-81
1982-85
1986-87
1988
Due Each Year
$20,000.00
25,000.00
30,000.00
35,000.00
40,000.00
45,000.00
47,000.00
Total
Total
$120,000.00
125,000.00
120,000.00
105,000.00
160,000.00
90,000.00
47,000.00
$767,000.00
Interest coupon numbers I and 2 were redeemed by the fiscal agent during the
year. At June 30, I960 $15,659.75 had been transferred to the agent to provide for
the payment of coupon number 3, due July I, I960.
RESERVE FUND;
Resolution No. 397 requires monthly transfers of $120.00 be made to this fund
from the water fund until such time an amount equal to the maximum amount of annual
debt service has been accumulated in the fund. The maximum requirement is for the
year 1982, when interest and principal totaling $52,357.00 will be paid. The fund
presently has $47,520.00; consequently, the monthly transfers of $120.00 will con-
tinue for slightly more than four more years.
MAINTENANCE AND OPERATIONS FUND:
Monthly sums sufficient for the necessary and reasonable maintenance and
operation costs of the enterprise have been transferred to this fund from the
water fund. The amount necessary for the current expenses during the year was
$165,799.60, as shown on exhibit 8.
The fixed assets shown on exhibit A are composed of the following:
Land, water rights, and rights of way $ 123,502.73
Wells, reservoirs, and dams 223,358.75
Purification system 27,686.73
Booster pumps and stations 78,224.99
Transmission and distribution lines 874,537.15
Buildings 18,233.99
Autos and trucks 19,666.71
Equipment 12,291.93
Office fixtures and equipment 15,353.18
Terramar fixed assets (unclassified) 163,566.00
Meters and services 320,706.90
Total—per exhibit A $1,877.129.06
Additions during the year were as follows:
Capital outlay—per exhibit C $15,234.45
Trade-in allowances received 675.00
Water right protection - San Luis Rey lawsuit 8,164.26
Pipelines contributed by consumers and
subdividers 41,265.74
Meters and services contributed 28,430.00
Total $93.769.45
I •_:, ..- j-i
Disposals were as follows:
Distribution lines removed on Chestnut Street $ 881.14
1953 Dodge pickup traded 1,733.83
BiI I ing machine traded 2,779.72
Jeep destroyed by fire 795.00
Meters and services removed from ground 16,712.00
Total $22.901.69
coA/worrs RESPECTING OPERATIONS
The statement of revenues and expenditures is shown on exhibit B. Following
Is a condensed comparative statement of revenues and expenditures for the years
ended June 30, I960 and June 30, 1959.
Year Ended Year Ended Increase
June 30,I960 June 30, 1959 (Decrease)
Revenues $277,897.22 $258,927.25 $ 18,969.97
Deduct operating expenses 165,799.60 167,456.50 ( 1,656.90)
Net revenues before interest
and depreciation I 12,097.62 91,470.75 20,626.87
Deduct:
Interest on bonds 31,319.50 28,709.53 2,609.97
Depreciation 43.572.54 40,306.08 3,266.46
Total 74.892.04 69,015.61 5,876.43
Net revenues after interest and
depreciation 37,205.58 22,455.14 14,750.44
Add:
Depreciation, a non-cash outlay 43,572.54 40,306.08 3,266.46
Net revenues—to surplus $ 80.778.12 $ 62.761.22 $ 18.016.90
The above comparison should be examined with the understanding that the City
purchased the Carlsbad Mutual Water Company on August I, 1958 and only eleven
months of that portion of the Water Department's operations is shown for the year
ended June 30, 1959. Therefore, the decrease in operating expenses is more favorable
than shown. This is primarily a result of the use of more pumped water and less
purchased water.
Following is a computation of the requirements of the gross revenues of the
enterprise, in accordance with Covenant No. 9, Section 21, of Resolution No. 397:
Gross revenues of enterprise—exhibit B $277,897.22
Add: Proceeds from easement and sale of land I,635.00
Total 279,532.22
Deduct: Current expenses for necessary and reasonable
maintenance and operations costs 165,799.60
Net revenues—year ended June 30, I960 113,732.62
Add: Carryover of excess of net revenues over
requirements - previous year I 1,325.20
Total net revenues available to meet current
requirements 125,057.82
Net revenues required for year ended June 30, I960:
Interest and principal requirements $31,319.50
Reserve fund I,440.00
Total 32,759.50
Multiplication factor (per resolution) 1.35
44,225.33
(Carried forward)
(Brought forward) Total net revenues available to
meet current requirements $125,057.82
(Brought forward) $44,225.33
Capital outlay 15,234.45
Expense of San Luis Rey lawsuit paid
from water revenues 8,164.26
Total net revenues required 67,624.04
Excess of net revenues over requirements at
June 30, I960 $ 57.433.78
OPINION
In our opinion the accompanying statement of financial position - all funds,
and the related statements of revenues and expenditures and unappropriated surplus
present fairly the financial position of each fund of the City of Carlsbad Water
Department at June 30, I960, and the results of its operations for the year then
ended. In conformity with generally accepted accounting principals of fund account-
ing applied on a basis consistent with that of the previous year.
Yours very truly,
C .
For Everts and Esenoff
Certified Public Accountants
CPW/ewt
Exhibit A
ASSETS
CURRENT ASSETS;
Cash with Treasurer, City of Carlsbad
Cash in Security-First National Bank -Trust #C-(
Accounts receivable - water accounts (net of res<
for losses)
Accounts receivable - other
Accrued interest receivable
Warehouse stock (net of reserve for losses)
Work in progress
Prepaid expenses
Total current assets
INVESTMENTS:
U. S. Treasury Notes, 45, due February 15, 1962
U. S. Treasury bonds, 2-1/25, due November 15, I?
FIXED ASSETS
Reserve
Fund
$ 2,520.00
2,520.00
45,000.00
LESS ALLOWANCE FOR DEPRECI AT ION
Net fixed assets
FUTURE BOND REQUIREMENTS
$47,520.00
Maintenance
and Operat ion
Fund
2,048.53
28,124.68
5,816.67
I 15.29
56,105.17
I,877,129.06
560,494.44
1,516,654.62
$1,552,759.79
LIABILITIES, RESERVES, AND SURPLUS
CURRENT LIABILITIES;
Accounts payable
Matured bond interest coupons
Pipeline, meter, and service deposits
Total current liabilities
WATERWORKS REVENUE BONDS - 1958
I I,474.26
2,585.45
15,857.71
RESERVES AND
Reserve for capital invested in fixed assets
Reserve for bond principal and interest
Unappropriated surplus—exhibit C 47,520.00
$47,520.00
1,516,654.62
22,247.46
$1,552,759.79
Note: On July 28, 1959 the voters of the City of C
additional water revenue bonds in the amou
not yet been issued.
Exhibit B
CITY OF CARLSBAD WATER DEPARTMENT
Statement of Revenues and Expenditures
July I, 1959 to June 30, I960
REVENUES - PLEDGED TO REQUIREMENTS FROM RESOLUTION 0397;
Water sales$270,092.34
Penalties for late payment of water accounts 2,640.96
Rents received 2,756.00
Pi peline fees 437.50
Charges for turning on water 276.00
. Interest earned on investments 1,807.04
Loan meter fees 330.00
Miscellaneous 388.60
Total 278,728.44
Less reduction for accounts in dispute 831.22
Total revenues 277,897.22
EXPENSES;
Maintenance and operations expense—'schedule B-l:
Water production and purification $80,915.57
Water transmission and distribution 45,671.33
General and administrative 39,212.70
Total expenses except interest and
depreciation deducted below 165,799.60
Net revenues before Interest and depreciation 112,097.62
DEDUCT;
Interest on bonds 31,319.50
Provision for depreciation 43,572.54
Total 74.692.04
Net revenues after deducting current expenses,
interest, and depreciation / 37,205.58
ADD;
Provision for depreciation, and expense which did
not require a current cash outlay 43^572.54
Net revenues available for retirement of bonds,
capital outlay, and other Water Department
purposes—to exhibit C $ 80.778.12
Exhibit C
CITY OF CARLSBAD WATER DEPARTMENT
Analysis of Unappropriated Surplus
July I, 1959 to June 30, 1960
UNAPPROPRIATED SURPLUS. JULY I. 1959
ADDITIONS;
Net revenues for yeai — exhibit B
Proceeds from easement on sale of land
Total additions
Total available
DEDUCTIONS;
Transferred to Bond Service Fund:
Total transferred
Less deducted as interest expense
on exhibit B
Transferred to Reserve Fund
Expenses on San Luis Ray lawsuit paid
from Water Fund
Capital outlay:
Water Department 's share of building
costs
Accounting machine - 1/2 Interest
Street improvements to property
owned at corner of Elm and
Roosevelt Streets
Pipelines installed at Water
Department expense
I960 Ford pickup truck
Denver hammer and spade
Trailer
Total deductions
$ 67,673.91
$46,367.39
31,319.50
2,193
3,426
84
60
1,364.79
5,919
1,611
516
91
21
10
200.00
$80,778.12
I ,635.00
82.413.12
150,087.03
15,047.89
1,440.00
8,164.26
15,234.45
39,886.60
UNAPPROPRIATED SURPLUS, JUNE 30, I960—to exhibit A $110,200.43
CITY OF CARLSBAD WATER DEPARTMENT
Schedule B-l
Schedule of Maintenance and Operations Expenses
July I, 1959 to June 30, I960
Water production and purification:
Salaries and wages
Power
Supplies and expense
Maintenance - water production facilities
Mi seel Ianeous
Purchased water
Total
Water transmission and distribution:
Salari es and wages
Power
Maintenance:
Pumping stations and reservoirs
Transmission and distribution lines
Meters and services, including cost
of replacements
Mi see I Ianeous
Total
General and administrative:
Salaries and wages
Operation and maintenance - mobile equipment
Professional services
Office supplies and expense
Small tools and shop supplies
Maintenance and supplies - buildings
Insurance and taxes
Contributions to retirement and group insurance
Sick leave and vacation salaries
Other general and administrative expense
Total
Less portion applied to construction work
Net
$ 4,833.81
6,192.30
1,732.78
385.19
153.88
67.617.61
25,631.60
13,697.01
1,027.15
959.82
4,159.03
196.72
16,202.71
2,361.06
3,387.88
2,149.34
873.92
370.75
10,656.37
3,750.12
2,357.56
1.066.30
43,176.01
3,963.31
$ 80,915.57
45,671.33
39,212.70
Total—to exhibit B $165.799.60