HomeMy WebLinkAbout; ; 1970-71 Audit Report of Examination; 1971-06-30CARLSBAD MUNICIPAL WATER DISTRICT
REPORT ON EXAMINATION
FOR THE YEAR ENDED
JUNE 30, 1971
***********
JAMES GAISER & CO.
CERTIFIED PUBLIC ACCOUNTANTS
JAMES M. OAISER, 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
729-2343
MEMBERS
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, 1971
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 M. QAISER, C.P. A.
HAROLD D. MICKEY, C.P. A.
JAMES GAISER & Co.
CERTIFIED PUBLIC ACCOUNTANTS
P.O.BOX 37, Z96S ROOSEVELT STREET
CARLSBAD. CALIFORNIA 92OOS
(714) 7Z9-a343
MEMBERS
AMERICAN INSTITUTE OF C. P. A'S
CALIFORNIA SOCIETY OF C.P. A'S
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, 1971
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, 1971 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, 1954, 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
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
for Water Utility Districts as prescribed by the Controller of
the State of California. The accounting records maintained were
suitable and well kept, reflecting reasonably adequate internal
control. Monthly financial statements and information are pre-
pared and presented to the Board of Directors by the Accounting
Officer.
We found the minutes of the Board of Directors in excellent
condition.
INSURANCE COVERAGE
The District had the following insurance coverage at
June 30, 1971:
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
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JAMES GAISER S> CO. CERTIFIED PUBLIC ACCOUNTANTS
The District also has the statutory amount of Workmen's
Compensation Insurance and carries group medical insurance
for its employees.
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.
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 belowi
ACTUAL BUDGET
(OVER) UNDER
BUDGET
REVENUESt
Water sales, net of cost
District property taxes
Bond proceeds and other
Total Revenues
Totals Forward
$ 237,961 $ 164,234 $ (73,727)
309,986 266,510 (43,476)
125.370 181,600 56,230
673,317 612,344 (60,973)
$ 673,317 $ 612,344 $ (60,973)
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JAMES GAISER S. CO. CERTIFIED PUBLIC ACCOUNTANTS
(OVER) UNDER
ACTUAL BUDGET BUDGET
Totals Forward $ 673,317 $ 612,344 $(60,973)
OPERATING EXPENSES:
PUMPING:
Supervision, labor, and expense 894 1,000 106
Fuel and power 800 600 (200)
Maintenance - structures -0- 100 100
WATER TREATMENT:
Supervision, labor, and expense 2,178 2,000 (178)
Chlorine 3,069 2,500 (569)
Power Usage 739 1,000 261
Chlorine equipment - maintenance 327 400 73
Chlorination station - maintenance -0- 200 200
Laboratory services - testing 103 200 97
TRANSMISSION - DISTRIBUTION:
Supervision, labor, and expense 17,822 19,770 1,948
Repairs and maintenance - pipe-
lines 9,953 5,000 (4,953)
Meter repairs 6,617 2,000 (4,617)
Telemetering 724 1,000 276
Valve repair and greasing 452 500 48
Repairs and maintenance - plant 315 1,000 685
Utilities 240 200 (40)
Miscellaneous supplies 56 100 44
CUSTOMER ACCOUNTS:
Meter reading and supervision 1,902 2,000 98
Uncollectible accounts -0- 200 200
ADMINISTRATIVE AND GENERAL:
Salaries 31,705 31,860 155
Legal, auditing and accounting 11,730 9,600 (2,130)
Directors' fees 5,950 6,000 50
Payroll taxes and employee
benefits 5,303 5,220 (83)
Utilities and telephone 4,613 4,800 187
Insurance 3,302 2,800 (502)
Office expense 2,643 2,050 (593)
Advertising and promotion 2,200 1,000 (1,200)
Auto and truck expense 2,757 2,000 (757)
Meetings, conventions, and dues 2,300 1,800 (500)
Maintenance - general plant 2,003 2,000 (3)
Small tools and equipment
maintenance 455 500 45
Printing and reproduction 454 350 (104)
Engineering 2,644 1,000 (1,644)
Bond service 451 700 249
Miscellaneous 62 100 38
Total Operating Expenses 124,763 111,550 (13,213)
EXCESS OF REVENUES OVER
OPERATING EXPENSES 548,554 500,794 (47,760)
Totals Forward $ 548,554 $ 500,794 $(47,760)
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
(OVER) UNDER
ACTUAL BUDGET BUDGET
Totals Forward $ 548,554 $ 500,794 $ (47,760)
NON-OPERATING EXPENSESt
Debt service - principal and
interest 220,430 241,892 21,462
Capital expenditures and work
in progress 160,962 255,122 94,160
Payment on pipeline contract 428 429 1__
Total Non-Operating
Expenses 381.820 497,443 115,623
INCREASE OR (DECREASE) $ 166.734 $ 3.351 $ (163.383)
During the year, increased revenues resulted from increased
water rates and increased water sales volume and receipt of
delinquent property taxes which were not anticipated at the time
*
of budget preparation. Decreased revenues resulted from
recording the reimbursement ($ 57,701 from the County of San
Diego) as a reduction of the particular job costs rather than
recording it as revenue.
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
OPERATIONS
A summary of the results of operations for the year ended
June 30, 1971 is shown below:
Operating revenues (net) $ 237,961
Operating expenses 124,763
Net income from operations 113,198
Other revenue (primarily District
property taxes) 333,014
Net income before interest,
depreciation, and extraordinary
debit 446,212
Interest $ 135,430
Provision for depreciation 69,476 204,906
Net income before extra-
ordinary debit _ 241,306
Extraordinary debit -
loss on disposition of fixed
assets - net (26,861)
Net income $ 214.445
CASH - ? 135.953
The fund cash balances at June 30, 1971, were as follows:
On deposit:
General fund $ 84,077
General revolving fund 836
Improvement District No. 1 fund 7,223
Improvement District No. 2 fund 27,860
Improvement District No. 3 fund 10,567
Improvement District No. 4 fund 5,340
On hand;
Petty cash fund 50
Total S 135.953
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.
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JAMES GAISER &. CO. CERTIFIED PUBLIC ACCOUNTANTS
C
TIME CERTIFICATES OF DEPOSIT - $ 272.400
Time Certificates of Deposit in the amount of $ 272,400
were held by Security Pacific National Bank, Carlsbad. Details
of these deposits were confirmed by the depositary bank and are
presented belows
PURCHASE
SETTLEMENT
DATE
4-23-71
6- 1-71
12- 1-70
FACE
AMOUNT
$ 100,000
100,000
72,400
TERM
90 days
30 days
1 year
INTEREST
RATE
4.00%
4.50%
5.50%
INTEREST
PAYABLE
Quarterly
Quarterly
Quarterly
Total $ 272.400
We confirmed directly with the agent of the above-named
depositary bank that it held securities in a pool having a
market value of at least 10% in excess of all deposits reported
by the depositary bank.
C
ACCOUNTS RECEIVABLE - WATER CUSTOMERS - $ 54.423
Requests for confirmation of accounts receivable were mailed
to 51 water consumers, consisting of one positive confirmation
and 50 negative confirmations, and totaled approximately 97%
of the dollar amount of accounts receivable. The positive
confirmation, in the amount of $ 23,197 was received and no
differences were reported. Of the 50 negative confirmations
sent, in the total amount of $ 29,693, only one was received
and was investigated and explained to our satisfaction.
The District does not provide for an allowance for doubtful
accounts on the books since all accounts are considered
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
collectible and prior experience has not indicated a necessity
for such a valuation account.
ACCOUNTS RECEIVABLE - OTHER - $ 8.606
c\,f,
The accounts receivable - other consist of meter and
service installations and repairs for various consumers in
the District.
AGRICULTURAL REBATES RECEIVABLE - $ 14.090
The agricultural rebates receivable represents the amount
due the District from the San Diego County Water Authority for
water consumed for agricultural purposes during the period
April 1, 1971 through June 30, 1971.
INVENTORIES - $ 31.508
/
Inventories of water and materials at June 30, 1971 are
shown belows
Water $ 16,522
Materials (meters, pipe, etc.) 14,986
Total $ 31>508
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
w 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.
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JAMES GAISER &. CO. CERTIFIED PUBLIC ACCOUNTANTS
PROPERTY AND EQUIPMENT, at cost (less
accumulated depreciation of $ 628,859) - $ 3.497.366
Changes during the year under review to property and
equipment accounts, which are stated at cost, can be sum-
marized as follows:
BALANCE BALANCE
ACCOUNTS 7-1-70 ADDITIONS RETIREMENTS 6-30-71
Cost of parti-
cipation -
San Diego
County Water
Authority $ 33,174 $ $ $ 33,174
Land and ease-
ments 120,848 120,848
Reservoirs and
dams 1,325,806 62,325 1,388,131
Pipelines and
pump stations 2,037,804 292,002 (37,200) 2,292,606
Chlorination
stations 56,730 56,730
Meters and
accessories 52,705 9,896 62,601
Buildings 115,432 515 115,947
Machinery and
equipment 37,258 3,770 41,028
Office fixtures
and equ ip—
ment 12,767 5,989 (3,596) 15,160
Totals $ 3.792.524 $ 374.497 $ (40.796) 4,126,225
Less accumulated depreciation 628,859
Net property and equipment $ 3.497.366
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.
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
The estimated useful lives of the property and equipment
groups that are being depreciated are shown belowr
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
The Cost of Participation - San Diego County Water
Authority and the land and easements are not being depreciated.
LONG-TERM CONTRACT AND NOTES RECEIVABLE - $ 136.937
The long-term receivable balances at June 30, 1971 were as
follows:
W
Contract receivable - San Marcos
County Water .District $ 129,676
Note receivable 1,804
Note receivable 5,457
Total $ 136.937
We confirmed the contract receivable directly with the
San Marcos County Water District and verified the notes re-
ceivable by other auditing procedures.
The $ 129,676 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.
c
The note receivable in the amount of $ 1,804 is a seven
year, 5% note which constitutes the District's interest in notes
issued by United Concrete Pipe Corporation and U. S. Industries,
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JAMES GAISER &. CO. CERTIFIED PUBLIC ACCOUNTANTS
Inc. in settlement of an anti-trust suit. The note receivable
in the amount of $ 5,457 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 - $ 22.066
The work in progress at June 30, 1971 consists of the
following r
Squires Dam Expansion $ 19,898
Water System Planning Study 1,756
Tri-City Pipeline Project _ 412
Total $ 22.066
The $ 19,898 includes the cost of an option in the amount
of $ 16,852 to purchase approximately 56.172 acres of real
estate. The option may be exercised on or before April 1, 1972
for a total purchase price of $ 168,516 under certain terms
and conditions. In the event the option is exercised, the
$ 16,852 will be applied toward the payment of the purchase
price under the terms of the agreement.
ACCOUNTS PAYABLE - $ 65.270
Accounts payable generally represents amounts due to trade
creditors in the ordinary course of business and to the con-
struction contractor at June 30, 1971.
The accounts payable balance at June 30, 1971 consisted of
the following:
Accounts payable - trade creditors $ 46,539
Accounts payable - construction
contractor (retention) 18,731
Total $ 65.270
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
c
CONSUMERS' DEPOSITS - $ 9.998
At June 30, 1971, the consumers' deposits consisted of
the following items;
Performance deposits and inspection
deposits $ 6,715
Refunds due on meter installations 3,283
Total $ 9.998
The performance deposits and inspection deposits represent
the unused portion of deposits received by the District, gen-
erally for construction. The refunds due on meter installations
represent amounts owing to consumers for the excess of their
deposits over the actual cost of installation.
BONDS PAYABLE - CONSTRUCTION
CURRENT - $ 85,000
LONG-TERM - $ 2.789.000
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:
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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
Improvement
District
No. 1:
Improvement
District
No. 2s
Series
Ir
Series
2:
Series
3:
Improvement
District
No. 3:
Improvement
District
No. 4:
1972-only
1973-1975
1976-1977
1978-1980
1981-1982
1983-only
1984-1986
1987-only
1972-only
1973-1976
1977-1983
1984-1987
1988-only
1972-only
1973-only
1974-1975
1976-1982
1983-1987
1988-1991
1971-only
1972-1973
1974-1983
1972-only
1973-1990
1991-only
1971-only
1972-1977
1978-only
1979-1982
1983-1986
1987-1989
1990-1991
4.00%
4.00%
4.00%
3.85%
3.85%
3.85%
3.85%
3 . 85%
5.00%
5.00%
5.00%
5.00%
5.00%
4.25%
4.25%
4.50%
4.50%
4.50%
4.50%
5.00%
5.00%
5.00%
4.75%
4.75%
5.00%
4.50%
4.50%
4.50%
4.00%
4.00%
4.00%
3.50%
$ 40,000
45,000
50,000
55,000
60,000
65,000
70,000
45,000
10,000
10,000
15,000
20,000
25,000
10,000
10,000
10,000
15,000
20,000
25,000
5,000
5,000
10,000
5,000
5,000
614,000
15,000
20,000
25,000
25,000
30,000
35,000
40,000
$ 40,000 $ -0-
135,000
100,000
€xy/»-iy»u j.B^7o D^,UUU 165,000
loni-iop-? •? flc;°/ fin nnn 120 000
65^000
210,000
45,000
10,000 -0-
40,000
105,000
80,000
25,000
10,000 -0-
10,000
20,000
105,000
100,000
100,000
5,000 -0-
10,000
100,000
5,000 -0-
90,000
614,000
15,000 -0-
120,000
25,000
100,000
120,000
105,000
80,000
Total bonds outstanding at June 30, 1971 $ 85,000 $ 2.789.000
The bonding capacity of the District at June 30, 1971 wasc•% $ 6,589,092 as provided for on an assessed valuation of
$ 65,890,918. Bonds outstanding at June 30, 1971, amounted to
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JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
$ 2,874,000 leaving an unused bonding capacity of $ 3,715,092,
The tax rates for the fiscal year ending June 30, 1971 were:
SECURED UNSECURED
TAX TAX
DISTRICT RATE RATE
General District .140 .110
Improvement District No. 1 .090 .092
Improvement District No. 2 .400 .381
Improvement District No. 3 .900 .895
Improvement District No. 4 .050 .040
At June 30, 1971, $ 300,000 in construction bonds, which
were authorized by the voters of the various Improvement
Districts, remained unissued.
*********
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.
September 29, 1971
•' -15-
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
o
CARLSBAD MUNICIPAL WATER DISTRICT
JBALANCE SHEET - ALL FUNDS
JUNE 30, 1971
EXHIBIT A
ASSETS
CURRENT ASSETS:
Cash (Note 1)
Time Certificates of Deposit (Note 1)
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 s
Long-term contract and notes receivable
Work in progress
Future revenue required to retire loan
and 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 installment due on note principal
Current installment due on bond principal
Unredeemed bond coupons
Accrued payroll taxes and employee benefits
Accrued interest
consumers ' deposits
Total Current Liabilities
LONG-TERM DEBT, EXCLUDING CURRENT PORTION t
Note payable (Note 6)
Bonds payable
Total Long-Term Debt, Excluding Current Portion
RESERVES FORs
Construction (Schedule 6)
Unamortized bond discount
Work in progress
Authorized expenditures
Long-term receivables
Investment in property and equipment
Total Reserves
FUND BALANCES (Exhibit C)
TOTALS
TOTAL
ALL FUNDS
$ 135,953
272,400
54,423
8,606
14,090
31,508
300
517,280
3,497,366
136,937
22,066
2,974,000
4,211
300,000
3,437,214
S 7.451.860
$ 65,270
20,000
85,000
6,276
2,863
35,946
SSllssS
80,000
2,789,000
2,869,000
15,171
4,211
22,066
300,000
136,937
3,497,366
3,975,751
381.756
$ 7,451,860
GENERAL DISTRICT
GENERAL REVOLVING
FUND FUND
$ 84,127 $ 836
6,000
54,423
8,288
14,090
29,956
300
191,184 6,836
326,801
7,261
22,066
100,000
129,327
S 647.312 $ 6,836
$ 65,270 $ -
20,000
2,863
1,074
9,998
99,205
80,000
80,000
22,066
7,261
326,801
356,128
111,979 6,836
$ 647,312 $ 6,836
IMPROVEMENT DISTRICTS
NO. 1
(SCHEDULE 2)
$ 7,223
46,000
53,223
858,972
129,676
880,000
100,000
1,109,676
S 2.021.871
$
40,000
876
11,430
52,306
840,000
840,000
100,000
129,676
858_,972
1,088,648
40,917
$ 2,021,871
NO. 2
(SCHEDULE 3)
$ 27,860
40,000
318
1,552
69,730
993,690
720,000
4,211
724,211
S 1.787.631
$
25,000
3,488
9,787
38,275
695,000
695,000
15,171
4,211
993,690
1,013,072
41,284
$ 1,787,631
NO. 3
(SCHEDULE 4)
$ 10,567
156,400
166,967
676,839
709,000
200,000
909,000
S Ir752,806
5
5,000
725
11,738
17,463
704,000
704,000
200,000
676,839
876,839
154,504
$ 1,752,806
NO. 4
(SCHEDULE 5)
$ 5,340
24,000
29,340
641,064
565,000
565,000
? 1,235.^04,
$
15,000
1,187
1,917
18\104
550,000
550,000
641,064
641,064
26,236
$ 1,235,404
NOTE:The accompanying notes to financial statements are an integral part of this statement.
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
EXHIBIT B
CARLSBAD MUNICIPAL WATER DISTRICT
STATEMENT OF REVENUES AND EXPENSES
FOR THE YEAR ENDED JUNE 30, 1971
GENERAL DISTRICT
TOTAL
ALL FUNDS
REVENUES r
Water sales
Less cost of water sold
Net water sales
District property taxes
Interest income
Miscellaneous
Total Revenues
OPERATING EXPENSES t
Total Operating Expenses (Schedule 1)
NET INCOME BEFORE OTHER EXPENSES AND
EXTRAORDINARY DEBIT
OTHER EXPENSES:
Interest expense
Provision for depreciation (Note 5)
Total Other Expenses
NET INCOME BEFORE EXTRAORDINARY DEBIT
EXTRAORDINARY DEBIT t
Loss on disposition of fixed assets - net
(Note 8)
NET INCOME (Exhibit C)
$ 542,
304,
237,
309,
12,
10,
570,
124,
446,
135,
69,
204,
241,
(26,
S 214f
754
793
961
986
138
890
975
763
212
430
476
906
306
861)
445
GENERAL
FUND
$ 277,743
156,386
121,357
97,428
8,387
4,291
231,463
124,763
106,700
6,156
10,619
16,775
89,925
(26,861)
S 63.064
REVOLVING
FUND NO.
$ 4,914 $ 52
2,743 29
2,171 22
62
— 2
2,171 88
2,171 88
35
18
53
2,171 34
S 2.171 $ 34
- - BOND AND
1 NO.
,225
,255
,970
,508
,954
,432
,432
.359
,394
,753
.679
.679
$ 35
19
15
57
2
75
75
35
16
51
24
$ 24
IMPROVEMENT DISTRICTS
INTEREST FUNDS -
2 NO. 3
,333
,808
,525
,703
,493
,721
,721
,263
,284
,547
,174
,174
$ 58,926
32,912
26,014
58,748
3,751
1,152
89,665
89,665
35,371
14,228
49,599
40,066
S 40,066
NO.
$ 23,
13,
10,
33,
44,
44,
23,
9,
33,
10,
S 10.
CONSTRUCTION
FUND
4 (SCHEDULE 6)
908 $
408
500
599
099
099
281
951
232
867
867 S
89,705
50,281
39,424
39,424
39,424
-
-
39,424
39.424
NOTEt The accompanying notes to financial statements are an integral part of this statement.
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
o
CARLSBAD MUNICIPAL WATER DISTRICT
STATEMENT OF CHANGES IN FUND BALANCES AND RESERVE FOR CONSTRUCTION
FOR THE YEAR ENDED JUNE 30. 1971
EXHIBIT C
GENERAL DISTRICT IMPROVEMENT DISTRICTS
Fund balances, June 30, 1970
Reserve for construction, June 30, 1970
Additions or (Deductions) t
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
Net book value of fixed assets disposed of
(Note 8)
Settlement on lawsuit (Note 3)
Payments on pipeline contracts (Note 4)
Capital expenditures for investment
in property and equipment
Proceeds received for note payable (Note 6)
Capital expenditures for work in
progress
Fund balances, June 30, 1971 (Exhibit A)
Reserve for construction, June 30, 1971
(Schedule 6)
TOTAL
ALL FUNDS
$ 226,538
1,879
214.445
351
69,476
(85,000)
28,286
2,342
(428)
(134,830)
100,000
(26,132)
S 381.756
$ 15.171
FUND
$ 42,498
-
63,064
10,619
-
28,286
2,342
(134,830)
100,000_
S 111.979
CONSTRUCTION
FUND NO. 1 NO. 2 NO. 3 NO. 4 (SCHEDULE 6)
$ 5,093 $ 27,844 $ 25,475 $ 105,210 $ 20,418 $
- - - 1,879
2,171 34,679 24,174 40,066 10,867 39,424
351
18,394 16,284 14,228 9,951
(40,000) (25,000) (5,000) (15,000)
(428) - - -
- _
----- (26,132)
S 6.836 S 40.917 S 41,284 S 154.504 S 26.236
S 15.171
NOTEs The accompanying notes to financial statements are an integral part of this statement.
JAMES OAISER & CO. ccirririxo ruvue ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1971
NOTE li 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, 1971, 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 $ 92,400 at June 30, 1971.
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 $ 2,342 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 $ 5,457 to be paid. United Concrete Pipe
Corporation and U. S. Industries paid $ 978,.leaving a bal-
ance of $ 1,804 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.
The District had one contract with a balance of $ 6,002 at
June 30, 1970. On September 2, 1970, the District paid
$ 428 as its final payment on this contract since this con-
tract then exceeded ten years.
(Continued) - 1,
JAMES GAISER & CO. CERTIFIED PUBUC ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1971
NOTE 5:
c
The property and equipment owned by the District at June 30,
1971 is valued at cost and may be summarized as follows:
NOTE 6:
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
1,388,131
2,292,606
56,730
62,601
115,947
41,028
15,160
4,126,225
628,859
$ 3.497.366
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 followsr
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.
On August 5, 1970, the District borrowed $ 100,000 from Security
Pacific National Bank. The loan proceeds were 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 5f 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. $ 20,000 was paid on the note in
August, 1971.
(Continued) - 2,
JAMES GAISER &. CO. CERTIFIED PUBLIC ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1971
NOTE 7: On April 12, 1971, the District entered into an option agree-
ment with Ida Dawson for an option to purchase approximately
56.172 acres of real estate in the vicinity of Squires Dam,
Carlsbad, California. Included in work in progress is the
cost of this option in the amount of $ 16,852. The option
may be exercised on or before April 1, 1972 for a total pur-
chase price of $ 168,516 under certain terms and conditions.
In the event the option is exercised, the $ 16,852 will be
applied toward the payment of the purchase price under the
terms of the agreement. If the option is not exercised, the
District will forfeit the $ 16,852.
NOTE 8r The loss on disposition of fixed assets - net consists of
the following:
Loss on relocation of pipelines $ 28,000
Gain on sale of vehicles (1,139)
Difference $ 26.861
(Concluded) - 3
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
SCHEDULE 1
CARLSBAD MUNICIPAL WATER DISTRICT
SCHEDULE OF OPERATING EXPENSES - GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 1971
•o
PUMPING:
Supervision, labor, and expense
Fuel and power
WATER TREATMENT:
Chlorine
Supervision, labor, and expense
Power usage
Chlorine equipment - repairs and
maintenance
Laboratory services - testing
TRANSMISSION - DISTRIBUTION:
Supervision, labor, and expense
Repairs and maintenance - pipelines
Meter repairs
Telemetering
Valve repair and greasing
Repairs and maintenance - plant
Utilities
Miscellaneous supplies
CUSTOMER ACCOUNTS:
Meter reading and supervision
ADMINISTRATIVE AND GENERAL:
Salaries
Legal, auditing, and accounting
Directors' fees
Payroll taxes and employee benefits
Utilities and telephone
Insurance
Auto and truck expense
Engineering
Office
Meetings, conventions, and dues
Advertising and promotion
Maintenance - general plant
Small tools and equipment maintenance
Printing and reproduction
Bond service
Miscellaneous
Total Operating Expenses (Exhibit B)
894
800
3,069
2,178
739
327
103
17,822
9,953
6,617
724
452
315
240
56
31,705
11,730
5,950
5,303
4,613
3,302
2,757
2,644
2,643
2,300
2,200
2,003
455
454
451
62
1,694
6,416
36,179
1,902
78,572
$ 124.763
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
SCHEDULE 2
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 1
BALANCE SHEET
JUNE 30. 1971
ASSETS
Cash
Time Certificates of
Deposit
Long-term contract
receivable
Property and equipment,
net - at cost
Future revenue required
to retire bonded debt
Bonds authorized, un-
issued
Totals
COMBINED
FUNDS
$ 7,223
46,000
129,676
858,972
880,000
100,000
$ 2.021.871
BOND AND PROPERTY
INTEREST AND
FUND EQUIPMENT
$ 7,223 $
46,000
129,676
858,972
- -
- . -
$ 182.899 S 858.972
BONDED
DEBT
$ -
-
-
-
880,000
100,000
S 980.000
IP LIABILITIES, RESERVES, AND
FUND BALANCE - - -
Unredeemed bond coupons
Accrued interest on
bonds
Bonds payable
Reserves fort
Authorized expenditures
Long-term receivable
Investment in property
and equipment
Fund balance
Totals (Exhibit A) $ 2.021.871 $ 182.899 $ 858.972 $ 980.000
$
11,
880,
100,
129,
858,
40,
876
430
000
000
676
972
917
$
11,
129,
40,
876
430
676
917
$ - $ -
880,
100,
858,972
000
000
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
CARLSBAD MUNICIPAL WATER DISTRICT
-IMPROVEMENT DISTRICT NO. 2
BALANCE SHEET
JUNE 30. 1971
SCHEDULE 3
- - - ASSETS - - -
Cash
Time Certificates of Deposit
Inventory
Accounts receivable - other
Property and equipment, net - at cost
Future revenue required to retire bonded debt
Unamortized bond discount
Totals
COMBINED
FUNDS
$ 27,860
40,000
1,552
318
993,690
720,000
4.211
$ 1.787.631
BOND AND
INTEREST
FUND
$ 14,559
40,000
4,211
S 58.770
BOND
CONSTRUCTION
FUND
$ 13,301
1,552
318
$ 15r171
PROPERTY
AND
EQUIPMENT
993,690
993.690
BONDED
DEBT
720,000
$ 720,000
LIABILITIES, RESERVES, AND
FUND BALANCE
Unredeemed bond couponsAccrued interest on bondsBonds payable
Reserves forsConstruction (Schedule 6)Unamortized bond discountInvestment in property and equipmentFund balance
Totals (Exhibit A)
3,488
9,787720,000
15,171
4,211
993,690
41.284
$ 1.787.631
$ 3,488
9,787
4,211
41,284
g 58.770"
720,000
15,171
993,690
S 15.171 $ 993.690 S 720.000
JAMES OAISER & CO. ccnririEO PUBLIC ACCOUNTANTS
SCHEDULE 4
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 3
BALANCE SHEET
JUNE 30. 1971
c
- - - ASSETS
Cash
Time Certificates of Deposit
Property and equipment.
net - at cost
Future revenue required to
retire bonded debt
Bonds authorized, unissued
COMBINED
FUNDS
$ 10,567
156,400
676,839
709,000
200,000
BOND AND
INTEREST
FUND
$ 10,567
156,400
-
-
-
PROPERTY
AND BONDED
EQUIPMENT DEBT
$ ~ $ -
- -
676,839-
709,000
200,000
Totals $ 1.752.806 $ 166.967 $ 676.839 $ 909.000
c
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)
725
11,738
709,000
200,000
676,839
154,504
$ 725
11,738
154.504
676,839
709,000
200,000
$ 1.752.806 $ 166.967 $ 676.839 $ 909.000
JAMES GAISER & CO. CERTIFIED PUBLIC ACCOUNTANTS
SCHEDULE 5
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 4
BALANCE SHEET
JUNE 30, 1971
c
ASSETS
Cash
Time Certificates of
Deposit
Property and equipment,
net - at cost
Future revenue required to
retire bonded debt
Totals
BOND AND PROPERTY
COMBINED INTEREST AND
FUNDS FUND EQUIPMENT
? 5,340 $ 5,340 $
24,000 24,000
641,064 - 641,064
565,000 - -
BONDED
DEBT
565,000
$ 1.235.404 $ 29.340 5 641.064 $ 565.000
LIABILITIES, RESERVES, AND
FUND BALANCE
Unredeemed bond coupons
Accrued interest on bonds
Bonds payable
Reserve for investment
in property and equipment
Fund balance
Totals (Exhibit A)
1,187 $ 1,187 $
1,917 1,917
565,000
641,064
26,236 26,236
641,064
565,000
$ 1.235.404 $ 29.340 $ 641.064 $ 565.000
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, 1971
BOND CONSTRUCTION FUND
IMPROVEMENT
DISTRICT
NO. 2
BALANCE, JUNE 30, 1970 $ 1,879
REVENUE:
Water sales 89,705
Less cost of water sold (50,281)
Net water sales 39,424
Total Funds Available . 41,303
EXPENDITURES:
Engineering, supplies, and
progress payments to construction
contractor 26,132
Total Expenditures 26,132
C BALANCE, JUNE 30, 1971 (Exhibit C) $ 15.171
JAMES GAISER &. CO. CERTIFIED PUBLIC ACCOUNTANTS