HomeMy WebLinkAbout; ; 1969-70 Audit Report of Examination; 1970-09-18CARLSBAD MUNICIPAL WATER DISTRICT
REPORT ON EXAMINATION
FOR THE YEAR ENDED
JUNE 30, 1970
**********
JAMES GAISER & CO.
CERTIFIED PUBLIC ACCOUNTANTS
JAMES M. GAISER.C.P, A.
HAROLD D. MICKEY. C. P. A.
JAMES GAISER & Co.
CERTIFIED PUBLIC ACCOUNTANTS
P. O. BOX 37, 2965 ROOSEVELT STREET
CARLSBAD, CALIFORNIA 92OOS
(714) 729-2343
M EM BERS
AMERICAN INSTITUTE: OF c. P A's
CALIFORNIA SOCIETY OF C P A'S
CARLSBAD MUNICIPAL WATER DISTRICT
CARLSBAD, CALIFORNIA
BOARD OF DIRECTORS
JUNE 30, 1970
MEMBER
FRED W. MAERKLE
JOHN T. PALMER
W. D. CARMICHAEL
ALLAN 0. KELLY
DONALD A. MAC LEOD
OFFICE
PRESIDENT
VICE-PRESIDENT
SECRETARY
TREASURER
ASSISTANT SECRETARY
AND ASSISTANT TREASURER
TERM
EXPIRES
1-1973
1-1975
1-1975
1-1975
1-1973
GENERAL MANAGER-ENGINEER - JACK Y. KUBOTA
JAMES GAISER & Co.
CERTIFIED PUBLIC ACCOUNTANTS
P. O. BOX 37. 2965 ROOSEVELT STREET
CARLSBAD, CALI FORNIA 92OOS
(714) 739-2343
A M F. R i C A N
THE BOARD OF DIRECTORS
CARLSBAD MUNICIPAL WATER DISTRICT
CARLSBAD, CALIFORNIA
We have examined the balance sheet - all funds - of
Carlsbad Municipal Water District as of June 30, 1970
and the related statements of revenues and expenses, and
changes in fund balances and reserve for construction for
the year then ended. Our examination was made in accord-
ance with generally accepted auditing standards, and
accordingly included such tests of the accounting records
and such other auditing procedures as we considered neces-
sary in the circumstances.
In our opinion, the accompanying balance sheet - all
funds - and the statements of revenues and expenses, and
changes in fund balances and reserve for construction
present fairly the financial position of Carlsbad Municipal
Water District at June 30, 1970 and the results of its
operations for the year then ended, in conformity with
generally accepted accounting principles applied on a basis
consistent with that of the preceding year.
EXPLANATORY COMMENTS
The supplementary information which follows has been
subjected to the tests and other auditing procedures applied
in the examination of the financial statements mentioned
above and, in our opinion, is fairly stated in all material
respects relating to the financial statements taken as a whole.
HISTORY AND ORGANIZATION
Carlsbad Municipal Water District was formed on
March 22, 1954, under the provisions of the Municipal Water
District Act of 1911 to provide water for the City of Carlsbad
and the adjacent, surrounding areas. On May 20, I9b4, the
District became a member of the San Diego County Water Authority
and thus a member of the Metropolitan Water District of Southern
California. The District functions as a wholesaler to the City
of Carlsbad, which maintains its own facilities for distribution
within the City, and also retails its water to consumers in the
La Costa Development and rural areas. One dam, seven reservoirs,
and numerous transmission lines are owned and operated by the
District, which constitutes the major portion of its waterworks
system.
ACCOUNTS AND RECORDS
The District employs the fund system of accounting and
maintains its accounts on the accrual basis. The District's
chart of accounts conforms to the Uniform System of Accounts
for Water Utility Districts as prescribed by the Controller of
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JAMES GAISER S, CO. CERTIFIED PUBLIC ACCOUNTANTS
the State of California. The accounting records maintained were
suitable and well kept, reflecting reasonably adequate internal
control. Interim financial statements and information are pre-
pared and presented to the Board of Directors.
We found the minutes of the Board of Directors in excellent
condition.
INSURANCE AND SURETY BOND COVERAGE
The District had the following insurance coverage at
June 30, 1970:
Primary comprehensive liability -
all business, including $ 5,000
medical payments, non-owned auto-
mobiles, and uninsured motorists:
Bodily injury $ 500,000/$ 500,000
Property damage 500,000
Excess comprehensive liability 500,000
excess of
500,000
Fire insurance coverage on buildings,
Including extended coverage, vandalism,
and malicious mischief 109,000
Employee dishonesty 50,000
All risk insurance on equipment and records 25,000
Depositors forgery coverage 10,000
Fire insurance - caretaker's trailer 5,000
Comprehensive - glass panes and doors -
$ 75 maximum
Auto collision - $ 100 deductible
JAMES GAISER S. CO. CERTIFIED PUBLIC ACCOUNTANT;
The District also has the statutory amount of Workmen's
Compensation Insurance and carries group medical insurance
for its employees.
The insurance program is currently under review by the
Board of Directors, the insurance broker and the District's
legal counsel to assure adequate coverage for the District.
BUDGETARY PROCEDURES
The operating budget for the year under review, which
was approved by the Board of Directors, was based on the actual
operations of the preceding year. A comparison of the budgeted
revenue and expense amounts and the actual revenue and expense
resulting from the year's operations are shown with the comments
on budget comparison and operations appearing later in this
report.
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
BUDGET COMPARISON
A comparison of the budgeted revenue and expenditure
amounts, as adopted by the Board of Directors, and the
actual revenue and expenditures resulting from the operations
for the year under review, is shown below:
REVENUES:
Water sales, net of cost
District property taxes
Bond proceeds and other
Total Revenues
OPERATING EXPENSES:
Salaries - office
Salaries - operational
Operation and maintenance -
pipeline
Legal and auditing
Directors' fees
Utilities and telephone
Payroll taxes and employee
benefits
Office expense
Engineering
Operation and maintenance -
equipment
Auto and truck expense
Insurance and bonds
Meetings, conventions,
and dues
Advertising and publications
Bad debts
Laboratory tests
Total Operating Expenses
EXCESS OF REVENUES OVER
OPERATING EXPENSES
NON-OPERATING EXPENSES:
Debt service - principal
and interest
Capital expenditures and
work in progress
Payments on pipeline
contracts
Total Non-Operating
Expenses
INCREASE OR (DECREASE)
OVER (UNDER)
ACTUAL BUDGET BUDGET
$ 164,317 $ 140,000 $ 24,317
220,813 226,198 (5,385)
18,564 186,300 (167,736)
403,694
31,001
18,540
8,233
10,473
5,950
5,875
5,014
2,405
866
2,438
1,855
2,566
1,726
2,396
-0-
125
99,463
552,498
27,000
24,000
10,000
8,000
6,000
5,800
4,500
2,500
1,500
2,500
2,200
2,500
1,400
500
200
100
98,700
(148,804)
4,001
(5,460)
(1,767)
2,473
(50)
75
514
(95)
(634)
(62)
(345)
66
326
1,896
(200)
25
763
304,231
217,961
169,319
2,172
389,452
453,798 (149.567)
230,500
328,718
1,889
(12,539)
(159,399)
283
561,107 (171,655)
$ (85.221) $ (107.309) $ (22.088)
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
During the year, increased revenues resulted from increased
water sales volume and decreased revenues resulted from greater
tax delinquencies and delays in obtaining long-term financing
and reimbursements from other agencies which were not antici-
pated at the time of budget preparation.
OPERATIONS
A summary of the results of operations for the year ended
June 30, 1970 is shown below:
Operating revenues (net) $ 164,317
Operating expenses 99,463
Net income from operations 64,854
Other revenue (primarily District
property taxes) 239,377
Net income before interest,
depreciation, and extraordinary
credit 304,231
Interest $ 132,961
Provision for depreciation 65,918 198,879
Net income before extra-
ordinary credit 105,352
Extraordinary credit -
settlement on anti-trust
lawsuit 3,7 95
Net income $ 109,147
CASH - $ 129.795
The fund cash balances at June 30, 1970, were as
follows:
On deposit:
General fund $ 53,024
General revolving fund 5,093
Improvement District No. 1 fund 15,389
Improvement District No. 2 fund 18,900
Improvement District No. 3 fund 25,905
Improvement District No. 4 fund 11,434
On hand:
Petty cash fund 50
Total $ 129.795
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
The cash on deposit was verified by direct correspondence
with the depositary banks and by reconciliation of the amounts
confirmed to the amounts as shown by the records of the District.
Cash on hand was verified by count.
TIME CERTIFICATE OF DEPOSIT - $ 100.000
A Time Certificate of Deposit in the amount of $ 100,000
was held by Security Pacific National Bank, Carlsbad. Details
of this deposit were confirmed by the depositary bank and are
presented below:
PURCHASE
SETTLEMENT FACE INTEREST INTEREST
DATE AMOUNT TERM RATE PAYABLE
6-1-70 $ 100,000 90 days 6.75% Quarterly
The deposit was secured by collateral (California Municipal
bonds in the face amount of $ 407,000) owned by Security Pacific
National Bank. These collateral securities, which we confirmed
by direct correspondence with the depositary bank, had a market
value on June 30, 1970 of $ 327,064.
U. S. TREASURY BILL (at cost which
approximates market) - $ 48.200
As of the close of business on June 30, 1970, Security
Pacific National Bank, Carlsbad, held in safekeeping for the
account of Carlsbad Municipal Water District, a U. S. Treasury
Bill in the face amount of $ 50,000. Details of the U. S.
Treasury Bill were confirmed by the depositary bank and are
presented below:
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JAMES GAISER &, CO. CERTIFIED PUBLIC ACCOUNTANTS
PURCHASE
SETTLEMENT MATURITY MATURITY
DATE VALUE DATE COST
5-14-70 $ 50.000 11-12-70 $ 48.200
ACCOUNTS RECEIVABLE - WATER CUSTOMERS - $ 47.012
Requests for confirmation of accounts receivable were mailed
to 48 water consumers or approximately 97% of the total dollar
amount of accounts receivable. Replies were received from 42
debtors, of which 37 owing $ 44,714 reported no differences.
Conditional replies were received from 5 debtors owing $ 538, and
these differences were investigated and explained to our satis-
faction.
The District does not provide for an allowance for doubtful
accounts on the books since all accounts are considered collec-
tible and prior experience has not indicated a necessity for such
a valuation account-
ACCOUNTS RECEIVABLE - OTHER - $ 2.313
The accounts receivable - other - may be summarized as
follows:
Accounts receivable - consumer connections $ 1,292
Accrued interest receivable , 1,021
Total $ 2.313
AGRICULTURAL REBATES RECEIVABLE - $ 17.896
The agricultural rebates receivable represents the amount
due the District from the San Diego County Water Authority for
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
water consumed for agricultural purposes during the period
April 1, 1970 through June 30, 1970.
INVENTORIES - $ 19.347
Inventories of water and materials at June 30, 1970 are
shown below:
Water $ 10,629
Materials (meters, pipe, etc.) 8,718
Total $ 19.347
The water inventory is valued at the lower of cost (last-in,
first-out) or market and the materials inventory is valued at the
lower of cost (first-in, first-out) or market.
We were present to observe the taking of the water and
materials inventories by District personnel at the end of the
fiscal year. We made substantial verification of valuations and
of the arithmetical accuracy of the inventory amounts.
PROPERTY AND EQUIPMENT, at cost (less
accumulated depreciation of $ 571.893) - $ 3.220.631
Changes during the year under review to property and equip-
ment accounts, which are stated at cost, can be summarized as
follows:
ACCOUNT
Cost of parti-
cipation -
San Diego
County Water
Authority
Land and ease-
ments
Reservoirs and
dams
Totals (Forward)
BALANCE
7-1-69
$ 33,174
120,848
1,071,758
$ 1,225,780
—
ADDITIONS RETIREMENTS
$ $
254,048
$ 254,048 $ -0-
9 -
BALANCE
6-30-70
$ 33,174
120,848
1,325.806
$ 1,479,828
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
BALANCE BALANCE
ACCOUNT 7-1-69 ADDITIONS RETIREMENTS 6-30-70
Totals
(Forward) $ 1,225,780 $ 254,048 $ -0- $ 1,479,828
Pipelines and
pump stations 2,037,804 2,037,804
Chlorination
stations 56,730 56,730
Meters and
accessories 42,101 10,604 52,705
Buildings 114,842 590 115,432
Machinery and
equipment 30,715 6,543 37,258
Office fixtures
and equipment 11,734 1,033 12,767
Totals $ 3.519.706 $ 272.818 $ -0- 3,792,524
Less accumulated depreciation 571,893
Net property and equipment $ 3.220.631
The property and equipment are being depreciated on the
basis of the estimated useful life of each individual item
on the straight-line method. The District has consistently
taken a full year's depreciation during the year of disposition
of an asset and no depreciation is taken during the year of
acquisition.
The estimated useful lives of the property and equipment
groups that are being depreciated are shown below:
ESTIMATED
ASSETS USEFUL LIFE
Reservoirs and dams 75 years
Pipelines and pump stations 50 years
Chlorination stations 25 to 40 years
Meters and accessories 25 to 40 years
Buildings 40 years
Machinery and equipment 5 to 20 years
Office fixtures and
equipment 10 years
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
The Cost of Participation - San Diego County Water
Authority and the land and easements are not being depreciated.
LONG-TERM CONTRACT AND NOTES RECEIVABLE - $ 142.232
The long-term receivable balances at June 30, 1970 were as
follows:
Contract receivable - San Marcos
County Water District $ 132,629
Note receivable 2,782
Note receivable 6,821
Total $ 142.232
We confirmed the contract receivable directly with the
San Marcos County Water District and verified the notes re-
ceivable by other auditing procedures.
The $ 132,629 represents the balance due on the sale of a
pipeline to the San Marcos County Water District; the sale was
consummated on November 6, 1963.
The note receivable in the amount of $ 2,782 is a seven
year, 5% note which constitutes the District's interest in notes
issued by United Concrete Pipe Corporation and U. S. Industries,
Inc. in settlement of an anti-trust suit. The note receivable
in the amount of $ 6,821 is a six year, 5% note which constitutes
the District's interest in a note issued by American Pipe and
Construction Co. in settlement of an anti-trust suit.
WORK IN PROGRESS - $ 97.411
On April 22, 1970, the District signed a construction agree-
ment with Don Hubbard Contracting Co. in the amount of $ 187,906
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
for the construction and completion of the water system relocations
and extensions for the El Camino Real Highway Project. Construc-
tion commenced during the year under review and was in progress
at June 30, 1970.
The rehabilitation of the Santa Fe reservoir also commenced
during the year under review and was in progress at June 30, 1970.
ACCOUNTS PAYABLE - $ 83.748
Accounts payable generally represented amounts due to trade
creditors in the ordinary course of business and to construction
contractors at June 30, 1970.
The accounts payable balance at June 30, 1970 consisted of
the following:
Accounts payable - trade creditors $ 30,301
Accounts payable - construction contractors 53,447
Total $ 83.748
CONSUMERS' DEPOSITS - $ 8.973
At June 30, 1970, the consumers' deposits consisted of the
following items:
Refundable bonds and inspection deposits $ 7,160
Refunds due on meter installations 1,813
Total $ 8.973
The refundable bonds and inspection deposits represent the
unused portion of deposits received by the District, generally
for construction. The refunds due on meter installations re-
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
present amounts owing to consumers for the excess of their
deposits over the actual cost of installation.
BONDS PAYABLE - CONSTRUCTION
CURRENT - $ 85,000
LONG-TERM - $ 2.874.000
Bonds in the principal amount of $ 85,000 matured during
the year under review, all of which were redeemed by the District.
The remaining bonds are due and payable as follows:
YEARS OF RATE OF AMOUNT DUE CURRENT
MATURITY INTEREST EACH YEAR
Improvement
District
No. 1: 1971-only 4.00%
1972-only 4.00%
1973-1975 4.00%
1976-1977 4.00%
1978-1980 3.85%
1981-1982 3.85%
1983-only 3.85%
1984-1986 3.85%
1987-only 3.85%
Improvement
District
No. 2:
$ 40,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
45,000
Series
1:
Series
2:
1971-only
1972-1976
1977-1983
1984-1987
1988-only
1971-only
1972-1973
1974-1975
1976-1982
1983-1987
1988-1991
5.00%
5.00%
5.00%
5.00%
5.00%
4.25%
4.25%
4.50%
4.50%
4.50%
4.50%
10,000
10,000
15,000
20,000
25,000
10,000
10,000
10,000
15,000
20,000
25,000
PORTION
LONG-TERM
PORTION
$ 40,000 $
10,000
10,000
-0-
40,000
135,000
100,000
165,000
120,000
65,000
210,000
45,000
-0-
50,000
105,000
80,000
25,000
-0-
20,000
20,000
105,000
100,000
100,000
Totals (Forward)$ 60,000 $ 1,485,000
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
YEARS OF RATE OF AMOUNT DUE CURRENT LONG-TERM
MATURITY INTEREST EACH YEAR PORTION PORTION
Totals (Forward)$ 60,000 $ 1,485,000
3: 1970-only
1971-1973
1974-1983
Improvement
District
No. 3: 1971-only
1972-1990
1991-only
Improvement
District
No. 4: 1970-only
1971-only
1972-1977
1978-only
1979-1982
1983-1986
1987-1989
1990-1991
Total bonds outstanding at June 30, 1970 $ 85.000 $ 2.874.000
The bonding capacity of the District at June 30, 1970 was
$ 5,838,535 as provided for on an assessed valuation of
$ 58,385,352. Bonds outstanding at June 30, 1970, amounted to
$ 2,959,000 leaving an unused bonding capacity of $ 2,879,535.
The tax rates for the fiscal year ending June 30, 1970 were:
5.00%
5.00%
5 . 00%
4.75%
4.75%
5.00%
4.50%
4.50%
4.50%
4.50%
4.00%
4.00%
4.00%
3.50%
$ 5,000
5,000
10,000
5,000
5,000
614,000
15,000
15,000
20,000
25,000
25,000
30,000
35,000
40,000
5,000 -0-
15,000
100,000
5,000 -0-
95,000
614,000
15,000 -0-
15,000
120,000
25,000
100,000
120,000
105,000
80,000
DISTRICT
General District
Improvement District No. 1
Improvement District No. 2
Improvement District No. 3
Improvement District No. 4
SECURED
TAX
RATE
.119
.092
.381
.895
.040
UNSECURED
TAX
RATE
.120
.090
.400
.900
.040
At June 30, 1970, $ 300,000 in construction bonds, which
were authorized by the voters of the various Improvement
Districts, remained unissued.
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JAMES GAISER S. CO. CERTIFIED PUBLIC ACCOUNTANTS
We wish to express our sincere appreciation to the general
manager and the personnel of Carlsbad Municipal Water District
for the cooperation and courtesies extended to us during our
examination.
Yours very truly,
September 18, 1970 // JAMES GAISER & CO.
Certified Public Accountants
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
EXHIBIT A
BALANCE SHEET - ALL FUNDS
JUNE 30, 1970
- - - ASSETS - - -
,_ CURRENT ASSETS:
( 1 Cash (Note I)
Time Certificate of Deposit (Note 1)
U. S. Treasury Bill (at cost which
approximates market)
Accounts receivable - water customers
Accounts receivable - other
Agricultural rebates receivable
Inventories - water, pipe, etc. -
at cost (Note 2)
Prepaid insurance
Total Current Assets
PROPERTY AND EQUIPMENT, NET - at cost (Note 5)
OTHER ASSETS AND OTHER DEBITS:
Long-term contract and notes receivable
Work in progress
Future revenue required to retire
bonded debt
Unamortized bond discount
Bonds authorized, unissued
^ Total Other Assets and Other Debits
TOTALS
- - - LIABILITIES, RESERVES, AND FUND BALANCE -
CURRENT LIABILITIES:
Accounts payable
Current installments due on bond principal
Unredeemed bond coupons
Accrued payroll taxes and employee benefits
Accrued interest on bonds
Consumers' deposits
Total Current Liabilities
LONG-TERM DEBT, EXCLUDING CURRENT PORTION -
Bonds payable
RESERVES FOR:
Construction (Schedule 6)
Unamortized bond discount
Work in progress
Authorized expenditures
4^ Long-term receivables
Investment in property and equipment
Total Reserves
FUND BALANCES (Exhibit C)
TOTALS
GENERAL DISTRICT
TOTAL
ALL FUNDS
$ 129,795
100,000
48,200
47,012
2,313
17,896
19,347
300
364,863
3,220,631
142,232
97,411
2,959,000
4,562
300,000
3,503,205
$ 7*088.699
$ 83,748
85,000
5,438
2,384
35,903
8,973
221,446
2,874,000
1,879
4,562
97,411
300,000
142,232
3,220,631
3,766,715
226,538
$ 7,088.699
GENERAL
FUND
$ 53,074
47,012
1,853
17,896
17,468
300
,137,603
318,725
9,603
66,788
76,391
$ 532.719
$ 83,748
2,384
8,973
95,105
66,788
9,603
318,725
395,116
42,498
$ 532,719
REVOLVING NO. 1
FUND (SCHEDULE 2)
$ 5,093 $ 15,389
25,000
5,093 40,389
736,278
132,629
920,000
100,000
1,152,629
$ 5.093 $ 1,929.296
$ - $ -
40,000
581
11,964
E^ O ^ A ^O «£ * D 4r -3
op n n nn
100,000
132,629
736.278
968,907
5,093 27,844
S 5.093 $ 1.929.296
IMPROVEMENT DISTRICTS
NO. 2
(SCHEDULE 3)
$ 18,900
18,000
l,-879
38,779
824,735
30,623
745,000
4,562
780,185
$ 1,643.699
$
25,000
1,275
10,150
36,425
720,000
1,879
4,562
30,623
824,735
861,799
25,475
$ 1.643.699
NO. 3
(SCHEDULE 4)
$ 25,905
43,000
48,200
460
117,565
691,067
714,000
200,000
914,000
$ 1.722.632
$
5,000
538
11,817
17,355
709,000
200,000
691,067
891,067
105,210
$ 1.722.632
NO. 4
(SCHEDULE 5)
$ 11,434
14,000
25,434
649,826
580,000
580,000
$ 1.255.260
$
15,000
3,044
1,972
20,016
565,000
649,826
649,826
20,418
$ 1.255.260
NOTE: The accompanying notes to financial statements are an integral part of this statement.
JAMES GAlSER & CO. CERTIFIED PUBLIC ACCOUNTANTS
EXHIBIT B
CARLSBAD MUNICIPAL WATER DISTRICT
STATEMENT OF REVENUES AND EXPENSES
FOR THE YEAR ENDED JUNE 30, 1970
GENERAL DISTRICT
REVENUES :
Water sales.
Less cost of water sold
Net water sales
District property taxes
Interest income
Miscellaneous
Total Revenues
OPERATING EXPENSES:
Total Operating Expenses (Schedule 1)
NET INCOME BEFORE INTEREST,
DEPRECIATION AND EXTRAORDINARY
CREDIT
•^ OTHER EXPENSES:
' Interest expense
Provision for depreciation (Note 5)
Total Other Expenses
NET INCOME BEFORE EXTRAORDINARY CREDIT
EXTRAORDINARY CREDIT:
Settlement on lawsuit (Note 3)
NET INCOME (Exhibit C)
TOTAL
ALL FUNDS
$ 422,873
258,556
164,317
220,813
9,610
8,954
403,694
99,463
304,231
132,961
65,918
198,879
105,352
3,795
$ 109.147
IMPROVEMENT DISTRICTS
GENERAL REVOLVING - - - BOND AND INTEREST FUNDS -
FUND FUND NO. 1
$ 272,108 $
201,358
70,750
69,650
6,615
3,794
150,809
99,463
51,346
10,514
10,514
40,832
3,795
$ 44.627 $
5,366 $ 34,744
2,061 13,140
3,305 21,604
52,410
2,565
3,305 76,579
3,305 76,579
36,959
18,394
55,353
3,305 21,226
3.305 $ 21.226
NO. 2
$ -
39,074
1,822
40,896
40,896
36,438
12,896
49,334
(8,438)
$ (8.438)
NO. 3
$ 26,201
10,048
16,153
37,043
2,995
773
56,964
56,964
35,607
14,228
49,835
7,129
S 7.129
CONSTRUCTION
- - - FUNDS
NO. 4 (SCHEDULE 6)
$ 32,062 $
12,110
19,952
22,636
42,588
42,588
23,957
9,886
33,843
8,745
$ 8.745 $
52,392
19,839
32,553
32,553
32,553
-
32,553
32.553
NOTE: The accompanying notes to financial statements are an integral part of this statement.
JAMES GAISER S. CO. CERTIFIED PUBLIC ACCOUNTANTS
EXHIBIT C
CARLSBAD MUNICIPAL WATER DISTRICT
STATEMENT OF CHANGES IN FUND BALANCES AND RESERVE FOR CONSTRUCTION
FOR THE YEAR ENDED JUNE 30, 1970
1
Fund balances, June 30, 1969
Reserve for construction, June 30, 1969
Additions or (Deductions) :
Net income for the year (Exhibit B)
Amortization of bond discount -
a non-cash expense
Depreciation - a non-cash expense (Note 5)
Retirement of long-term debt -
bonds
Payments on pipeline contracts
(Note 4)
Capital expenditures for investment
*"~\ in property and equipment
Capital expenditures for work in
progress
GENERAL DISTRICT IMPROVEMENT DISTRICTS
CONSTRUCTION
T'OTZXT. r)T71'MT?T?ZlT "DTPT/nt X7TTsTr" ROTJri atJPi T'NTTiT?'DT?C rn TPTTNTPiC _ _ TPTTMFi
ALL FUNDS FUND FUND NO. 1 NO. 2 NO. 3 NO. 4 (SCHEDULE 6)
$ 263,026 $ 79,536 $ 3,960 $ 28,224 $ 45,666 $ 88,853 $ 16,787 $ -
46,466 - - - 46,466
109,147 44,627 3,305 21,226 (8,438) 7,129 8,745 32,553
351 - - 351 -
65,918 10,514 - 18,394 12,896 14,228 9,886
(85,000) ~ - (40,000) (25,000) (5,000) (15,000)
(2,172) - (2,172)
(92,179) (92,179) - _____
(77,140) - - - - - - (77,140)
Fund balances, June 30, 1970 (Exhibit A)
Reserve for construction, June 30, 1970
(Schedule 6)
$ 226.538 $ 42.498
1.879
$ 5.093 $ 27.844 $ 25.475 $ 105,210 $ 20,418
$ 1.879
NOTE: The accompanying notes to financial statements are an integral part of this statement.
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1970
NOTE 1: The District maintains one general bank account for all of the
funds. As a result, when investments are made, they are not
set up in separate investment accounts unless it can be deter-
mined that the cash for an investment came from a specific
fund. At June 30, 1970, the investment in Time Certificates
of Deposit was allocated to the various funds on the basis of
available cash in excess of normal requirements in each fund.
The balance in the sinking fund in Improvement District No. 3
was $ 72,400 at June 30, 1970.
NOTE 2: The inventories consist of water and materials. The inventory
of water is valued at the lower of cost (last-in, first-out)
or market. The materials inventory is valued at the lower of
cost (first-in, first-out) or market.
NOTE 3: The District received $ 3,795 during the year on its long-term
notes receivable in settlement of two price-fixing anti-trust
suits. American Pipe and Construction Company paid $ 1,364,
leaving a balance of $ 6,821 to be paid. United Concrete Pipe
Corporation and U. S. Industries paid $ 2,431, leaving a bal-
ance of $ 2,782 to be paid.
NOTE 4: Under the provisions of Ordinance No. 10 of the Carlsbad
Municipal Water District, the District may enter into a contract
with a consumer to refund his cost of installing a pipeline,
which will become a portion of the District's primary distri-
bution system. The annual payments on these contracts amounts
to 50% of the actual consumption charges received by the
District from the sale and delivery of water through the fa-
cilities but no annual payment may exceed 20% of the cost of
the facilities.
The payments continue for a period of ten years or until the
total cost of the line has been refunded, whichever occurs
first. After ten years, the District has no further obligation,
even though the entire cost has not been refunded.
At June 30, 1969, the District had signed contracts with un-
paid balances totaling $ 14,108. At June 30, 1970, two of
three remaining contracts exceeded ten years and therefore
were terminated. The remaining contract had a balance of
$ 6,002 at June 30, 1970. On September 2, 1970, the District
paid $ 428 as its final payment on the remaining contract
since this contract then exceeded ten years.
(Continued) - 1.
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1970
NOTE 5: The property and equipment owiieu by the District at June 30,
1970 is valued at cost and may be summarized as follows:
Cost of participation - San Diego
County Water Authority
Land and easements
Reservoirs and dams
Pipelines and pump stations
Chlorination stations
Meters and accessories
Buildings
Machinery and equipment
Office fixtures and equipment
Total
Less accumulated depreciation
Net Property and Equipment
$ 33,174
120,848
1,325,806
2,037,804
56,730
52,705
115,432
37,258
12,767
3,792,524
571,893
$ 3.220.631
Depreciation of the property and equipment is provided by the
straight-line method and is based on the estimated useful
lives of the related assets as follows:
ASSETS
Reservoirs and dams
Pipelines and pump stations
Chlorination stations
Meters and accessories
Buildings
Machinery and equipment
Office fixtures and equipment
ESTIMATED
USEFUL LIFE
75 years
50 years
25 to 40 years
25 to 40 years
40 years
5 to 20 years
10 years
The District has consistently taken a full year's depreciation
during the year of disposition of an asset and no depreciation
is taken during the year of acquisition.
The cost of participation - San Diego County Water Authority
and the land and easements are not being depreciated.
NOTE 6: On August 5, 1970, the District borrowed $ 100,000 from Security
Pacific National Bank. The loan proceeds are to be used for the
construction and completion of water system relocations and ex-
tensions for the El Camino Real Highway Project.
The loan is evidenced by a 7% unsecured note with interest pay-
able quarterly beginning November 5, 1970. Principal is to be
paid in annual installments of $ 20,000 or more on the fifth
day of August each year, beginning August 5, 1971. The District
may prepay any unpaid principal balance of the note at any time,
without any penalty.
(Concluded) - 2,
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
SCHEDULE OF OPERATING EXPENSES - GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 1970
SCHEDULE 1
PUMPING:
Supervision, labor, and expense
Fuel and power
WATER TREATMENT:
Supervision, labor, and expense
Chlorine
Power usage
Chlorine equipment - repairs and
maintenance
Laboratory services - testing
TRANSMISSION - DISTRIBUTION:
Supervision, labor, and expense
Repairs and maintenance - pipelines
Meter repairs
Telemetering
Repairs and maintenance - plant
Utilities
Miscellaneous supplies
CUSTOMER ACCOUNTS:
Meter reading and supervision
ADMINISTRATIVE AND GENERAL:
Salaries
Legal and auditing
Directors' fees
Payroll taxes and employee benefits
Utilities and telephone
Insurance
Office expense
Advertising and promotion
Auto and truck expense
Meetings, conventions, and dues
Maintenance - general plant
Small tools and equipment maintenance
Printing and reproduction
Engineering
Miscellaneous
Total Operating Expenses (Exhibit B)
813
689
1,980
1,898
725
345
125
14,016
4,254
2,081
702
363
178
43
31,001
10,473
5,950
5,014
4,283
2,566
2,296
1,922
1,855
1,726
929
801
474
164
66
$ 1,502
5,073
21,637
1,731
69,520
$ 99.463
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
SCHEDULE 2
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 1
BALANCE SHEET
JUNE 30, 1970
COMBINED
ASSETS - - - FUNDS
BOND AND
INTEREST
FUND
PROPERTY
AND
EQUIPMENT
BONDED
DEBT
Cash
Time Certificate of
Deposit
Long-term contract
receivable
Property and equipment,
net
Future revenue required
to retire bonded debt
Bonds authorized, un-
issued
Totals
15,389 $ 15,389 $
25,000 25,000
132,629 132,629
736,278
920,000
100,000 -
736,278
920,000
100,000
$ 1.929.296 $ 173.018 $ 736.278 $ 1.020.000
LIABILITIES, RESERVES, AND
- - - FUND BALANCE - - -
Unredeemed bond coupons
Accrued interest on
bonds
Bonds payable
Reserves for:
Authorized expenditures
Long-term receivable
Investment in property
and equipment
Fund balance
$581
11,964
920,000
100,000
132,629
736,278
27,844
$ 581
11,964
132,629
27,844
$
-
-
736,278
920,000
100,000
Totals (Exhibit A) $ 1.929.296 $ 173.018 $ 736.278 $ 1.020.000
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 2
BALANCE SHEET
JUNE 30, 1970
SCHEDULE 3
- - - ASSETS - - -
Cash
Time Certificate of Deposit
Inventory
Property and equipment, net
Work in progress
Future revenue required to retire bonded debt
Unamortized bond discount
Totals
COMBINED
FUNDS
$ 18,900
18,000
1,879
824,735
30,623
745,000
4,562
$ 1.643.699
BOND AND
INTEREST
FUND
$ 18,900
18,000
4,562
$ 41.462
BOND
CONSTRUCTION
FUND
$ -
1,879
30,623
$ 32.502
PROPERTY
AND
EQUIPMENT
$ -
824,735
$ 824.735
BONDED
DEBT
$ -
745,000
$ 745.000
LIABILITIES, RESERVES, AND
- - - FUND BALANCE - - -
Unredeemed bond coupons
Accrued interest on bonds
Bonds payable
Reserves for:
Construction (Schedule 6)
Work in progress
Unamortized bond discount
Investment in property and equipment
Fund balance
Totals (Exhibit A)
1,275
10,150
745,000
1,879
30,623
4,562
824,735
25,475
$ 1.643.699
$ 1,275
10,150
4,562
25,475
$ 41.462
$ -
745,000
1,879
30,623
$ 32.502
824,735
$ 824.735 $ 745.000
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 3
BALANCE SHEET
JUNE 30, 1970 __
SCHEDULE 4
- - - ASSETS - - -
Cash
U. S. Treasury Bill (at
cost which approximates
market)
Time Certificate of Deposit
Accrued interest receivable
Property and equipment, net
Future revenue required to
retire bonded debt
Bonds authorized, unissued
Totals
COMBINED
FUNDS
48,200
BOND AND
INTEREST
FUND
48,200
PROPERTY
AND
EQUIPMENT
25,905 $ 25,905 $
BONDED
DEBT
43,000
460
691,067
714,000
200,000
43,000
460
691,067
: :
_
714,000
200,000
$ 1.722.632 $ 117.565 $ 691.067 $ 914.000
LIABILITIES, RESERVES, AND
- - - FUND BALANCE - - -
Unredeemed bond coupons
Accrued interest on bonds
Bonds payable-
Reserves for:
Authorized expenditures
Investment in property and
equipment
Fund balance
Totals (Exhibit A)
538
11,817
714,000
200,000
691,067
105,210
538 $
11,817
105,210
691,067
714,000
200,000
$ 1.722.632 $ 117.565 $ 691.067 $ 914.000
JAMES GAISER S. CO. CERTIFIED PUBLIC ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 4
BALANCE SHEET
JUNE 30, 1970 •
SCHEDULE 5
- - - ASSETS - - -
Cash
Time Certificate of
Deposit
Property and equipment,
net
Future revenue required to
retire bonded debt
Totals
BOND AND PROPERTY
COMBINED INTEREST AND
FUNDS FUND EQUIPMENT
? 11,434 $ 11,434 $
14,000 14,000
649,826 - 649,826
580,000 - -
BONDED
DEBT
580,000
$ 1.255.260 $ 25.434 $ 649.826 $ 580.000
LIABILITIES, RESERVES, AND
v - - - FUND BALANCE - - -
Unredeemed bond coupons
Accrued interest on bonds
Bonds payable
Reserve for investment
in property and equipment
Fund balance
Totals (Exhibit A)
3,044 $ 3,044 $
1,972 1,972
580,000
649,826
20,418 20,418
649,826
580,000
$ 1.255.260 $ 25.434 $ 649.826 $ 580.000
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
SCHEDULE 6
CARLSBAD MUNICIPAL WATER DISTRICT
ANALYSIS OF CHANGES IN RESERVE FOR CONSTRUCTION
FOR THE YEAR ENDED JUNE 30, 1970
BOND CONSTRUCTION FUND
IMPROVEMENT
DISTRICT
NO. 2
BALANCE, JUNE 30, 1969
REVENUE:
Water sales
Less cost of water sold
Net water sales
Total Funds Available
EXPENDITURES:
Engineering, supplies, and
progress payments to construction
contractors
Total Expenditures
BALANCE, JUNE 30, 1970 (Exhibit C)
$ 46,466
52,392
19,839
32,553
79,019
77,140
77,140
$ 1.879
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS