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CARLSBAD MUNICIPAL WATER DISTRICT
RECEIVED
NOV021973 I
I
WOODSIOE - KUBOTA & ASSOC. !
CONSULTING ENGINEERS
REPORT ON EXAMINATION
FOR THE YEAR ENDED
JUNE 30, 1973
***********
JAMES M.GAISER
CERTIFIED PUBLIC ACCOUNTANT
MEMBER'
AMERICAN INSTITUTE OF C.P. A'S
CALIFORNIA SOCIETY OF C.P. A'S
JAMES M.GAISER
CERTIFIED PUBLIC ACCOUNTANT
P.O. BOX 39,2965 ROOSEVELT STREET
CARLSBAD, CALIFORNIA 92OOS
TELEPHONE
(714) 728- 2343
(714) 744- 4411
CARLSBAD MUNICIPAL WATER DISTRICT
CARLSBAD, CALIFORNIA
BOARD OF DIRECTORS
JUNE 30, 1973
MEMBER
FRED W. MAERKLE
DONALD A. MAC LEOD
W. D. CARMICHAEL
ALLAN O. KELLY
HAROLD M. ENGELMANN
OFFICE
PRESIDENT
VICE-PRESIDENT
SECRETARY
TREASURER
ASSISTANT SECRETARY
AND ASSISTANT TREASURER
TERM
EXPIRES
1-1977
1-1977
1-1975
1-1975
1-1975
GENERAL MANAGER - WINDER F. FRIDAY
MEMBER
AMERICAN INSTITUTE OF C. P. A'S
CALIFORNIA SOCIETY OF C.P. A'S
JAM ES M. GAISER
CERTIFIED PUBLIC ACCOUNTANT
P.O. BOX 39, 2965 ROOSEVELT STREET
CARLSBAD, CALIFORNIA 92OOS
TELEPHONE
(714) 729- 2343
(714) 744-4411
THE BOARD OF DIRECTORS
CARLSBAD MUNICIPAL WATER DISTRICT
CARLSBAD, CALIFORNIA
I have examined the combined balance sheet - all funds of
CARLSBAD MUNICIPAL WATER DISTRICT as of June 30, 1973 and the
related combined statement of revenues and expenses - all funds,
and statement of changes in fund balances and reserve for
construction for the year then ended. My 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 I considered necessary in
the circumstances.
In my opinion, such financial statements present fairly the
financial position Of CARLSBAD MUNICIPAL WATER DISTRICT at June
30, 1973 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. The supplementary data included in schedules
1 through 8 and in the comments have been subjected to the
same auditing procedures and, in my opinion, are stated fairly
in all material respects in relation to the basic financial
statements taken as a whole.
September 27, 1973
EXHIBIT A
CARLSBAD MUNICIPAL WATER DISTRICT
COMBINED BALANCE SHEET - ALL FUNDS
JUNE 30, 1973
WITH COMPARATIVE FIGURES FOR 1972
- - - ASSETS
CURRENT ASSETS:
Cash (Note 1)
Time Certificates of Deposit (Note 1)
Accrued interest receivable
Accounts receivable - water customers (Note
Accounts receivable - other
Agricultural rebates receivable
Inventories - water, pipe, etc. (Note 1)
Prepaid insurance
Total Current Assets
PROPERTY AND EQUIPMENT (Note 1)
OTHER ASSETS AND OTHER DEBITS:
Long-term contract and notes receivable
(Note 2)
Work in progress (Note 3)
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
CURRENT LIABILITIES:
Accounts payable
Current installment due on notes (Note 3)
Current installment due on bonds (Note 4)
Unredeemed bond coupons
Accrued payroll taxes and benefits
Accrued interest
Consumers' deposits (Note 5)
Total Current Liabilities
LONG-TERM DEBT, EXCLUDING CURRENT PORTION:
Notes payable (Note 3)
Bonds payable (Note 4)
Total Long -Term Debt, Excluding
Current Portion
RESERVES FOR:
,^m Construction (Schedule 8)
Unamortized bond discount
Work in progress
Authorized expenditures
Long-term receivables
Investment in property and equipment
Total Reserves
FUND BALANCES (Exhibit C)
1973
(SCHEDULE 1)
$ 207,988
250,000
2,191
1) 67,760
11,939
18,072
53,857
300
612,107
3,706,917
126,554
224,675
2,799,110
3,509
300,000
3,453,848
$ 7.772.872
BALANCES - - -
$ 67,087
53,703
95,000
6,606
3,850
34,453
47,232
307,931
107,407
2,543,000
2,650,407
63,771
3,509
224,675
300,000
126,554
3,706,917
4,425,426
389,108
1972
$ 303,149
172,400
51,074
77,552
21,138
44,900
300
670,513
3,474,194
132,114
205,832
2,902,000
3,860
300,000
3,543,806
$ 7.688.513
$ 117,271
53,703
145,000
5,950
4,813
36,159
25j/722
388,618
161,110
2,677,000
2,838,110
47,384
3,860
205,832
300,000
132,114
3,474,194
4,163,384
298,401
TOTALS $ 7.772.872 $ 7.688.513
NOTE: The accompanying notes to financial statements are. an
integral part of this statement.
JAMES M.GAlSER CERTIFIED PUBLIC ACCOUNTANT
EXHIBIT B
CARLSBAD MUNICIPAL WATER DISTRICT
COMBINED STATEMENT OF REVENUES AND EXPENSES -.ALL FUNDS
FOR THE YEAR ENDED JUNE 30, 1973
WITH COMPARATIVE FIGURES FOR 1972
1973
(SCHEDULE 2) 1972
REVENUES:
Water sales $ 594,254 $ 600,659
Less cost of water sold 366,800 370,640
Net water sales 227,454 230,019
District property taxes 335,841 272,420
Interest income 9,275 10,947
Miscellaneous 14,792 12,089
Total Revenues 587,362 525,475
OPERATING EXPENSES:
Total Operating Expenses (Schedule 7) 191,687 163,497
INCOME BEFORE OTHER EXPENSES AND
EXTRAORDINARY ITEM 395,675 361,978
OTHER EXPENSES:
Interest expense 132,986 130,402
Provision for depreciation (Note 1) 81,152 77,720
Other 360 -
Total Other Expenses 214,498 208,122
INCOME BEFORE EXTRAORDINARY ITEM 181,177 153,856
EXTRAORDINARY ITEM:
Reimbursement of engineering fees, etc.
from County of San Diego - 9,972
NET INCOME (Exhibit C) S 181.177 $ 163.828
NOTE: The accompanying notes to financial statements
are an integral part of this statement.
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
EXHIBIT C
CARLSBAD MUNICIPAL WATER DISTRICT
STATEMENT OF CHANGES IN FUND BALANCES AND RESERVE FOR CONSTRUCTION
FOR THE YEAR ENDED JUNE 30. 1973
GENERAL DISTRICT IMPROVEMENT DISTRICTS
Fund balances, July 1, 1972;
As previously reported
Adjustment (Note 6)
As restated
Reserve for construction, July 1, 1972
Additions or (Deductions):
Net income for the year (Schedule 2)(Exhibit B)
Amortization of bond discount -
a non-cash expense
Depreciation - a non-cash expense (Note 1)
Retirement of long-term debt - bonds (Note 4)
Settlement on lawsuit (Note 2)
Capital expenditures for investment
in property and equipment - net
Payment on notes payable (Note 3)
TOTAL
ALL FUNDS
$ 298,401
134,813
433,214
47,384
181,177
351
81,152
(184,000)
2,136
(54,832)
(53.703)
Fund balances, June 30, 1973 (Schedule 1)(Exhibit A) 1 389.108
£ 63.771
Reserve for construction, June 30, 1973
(Schedule 8)
GENERAL
FUND
113,396
76,701
14,934
2,136
(41.332)
(53,703)
REVOLVING BOND AND INTEREST FUNDS - - -
CONSTRUCTION
FUND
FUND NO. 1 NO. 2 NO. 3 NO. 4 (SCHEDULE 8)
$ (21,417) $ 9,164 $ 76,142 $ 46,176 $ 154,449 $ 33,887 $
134,813
9,164
1.915
76,142 46,176 154,449 33,887
47,384
27,455 5,500 20,225 19,494 29,887
351
20,616 21,344 14,229 10,029
(85,000) (35,000) (44,000) (20,000)
(13,500)
1 112.132 .$ ^1,079 ^ J9,213, $38.371 S 144.903 |..43,.410.
$ 63.771
NOTEi The accompanying notes to financial statements are an integral part of this statement.
JAMES M.GAI5ER ceRTirico PUBLIC ACCOUNTANT
CARLSBAD MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1973
(1) ACCOUNTING METHODS
The District uses a fund system of accounting and
maintains its accounts on the accrual basis. The
District chart of accounts conforms to the Uniform
System of Accounts for Water Utility Districts as
prescribed by the Controller of the State of
California.
The District maintains one general bank account for all
of its funds. As a result, when investments are made,
they are not set up in separate investment accounts
unless it can be determined that the cash for an
investment came from a specific fund. At June 30, 1973,
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 $ 79,400 at June 30, 1973.
The District does not provide for an allowance for
doubtful accounts since all accounts are considered
collectible and prior experience has not indicated a
necessity for such a valuation account.
The inventories consist of water and materials. The
inventory of water is valued at the lower of cost
(Continued - 1)
JAMES AA.GAISER CERTIFIED PUBLIC ACCOUNTANT
CARLSBAD MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1973
(1) ACCOUNTING METHODS (CONTINUED)
(last-in, first-out) or market. The material inventory is
valued at the lower of cost (first-in, first-out) or market.
The property and equipment owned by the District at June 30,
1973 is valued at cost and may be summarized as follows:
Cost of participation - San Diego
County Water Authority $ 33,174
Land and easements 120,848
Reservoirs and dam 1,419,253
Pipelines and pump stations 2,547,742
Chlorination Stations 56,730
Meters and accessories 117,710
Buildings 119,821
Machinery and equipment 61,599
Office fixtures and equipment 17,454
Total 4,494,331
Less accumulated depreciation 787,414
Net Property and Equipment S 3.706.917
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:
ESTIMATED
ASSETS USEFUL LIVES
Reservoirs and dam 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 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;
(Continued - 2)
JAMES M. GAISER CERTIFIED PUBLIC ACCOUNTANT
CARLSBAD MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1973
(1) ACCOUNTING METHODS (CONTINUED)
The cost of participation - San Diego County Water
Authority and the land and easements are not being
depreciated.
(2) LONG-TERM RECEIVABLES
The District received $ 2,136 during the year on its
long-term notes receivable in settlement of two
price-fixing anti-trust suits. American Pipe and
Construction Company paid $ 978 leaving a balance of
$ 3,500 to be paid. United Concrete Pipe Corporation
and U. S. Industries paid $ 1,158 leaving a balance of
$ 67 to be paid.
The District received $ 3,424 during the year on its
long-term contract receivable with the San Marcos
County Water District, leaving a balance of $ 122,987
to be paid. Payments are due annually within 90 days
after June 30 of each year until paid in full. The
annual payments are the equivalent of $ 1.00 per acre
foot of water purchased by the San Marcos County
Water District, within the fiscal year preceding the
date of payment. No interest is provided in the contract.
(3) NOTES PAYABLE
Included in notes payable is a note payable to Security
Pacific National Bank bearing interest at 7%, payable
(Continued - 3)
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
CARLSBAD MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1973
(3) NOTES PAYABLE (CONTINUED)
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.
As of June 30, 1973, all payments due under the note had
been timely paid.
Also included in notes payable is an 8% note payable
to Mrs. Ida Dawson in the amount of $ 101,110, secured
by a first deed of trust on the land purchased for the
Squires Dam Expansion Program presently included in work
in progress. The note is payable in semi-annual
principal installments of $ 16,852 until paid. Interest
is also payable semi-annually.
(4) BONDS PAYABLE
On March 1, 1972, the District called $ 56,000 of 5%
bonds of Improvement District #3, which had a maturity
date of March 1, 1991. Of this amount $ 17,000 had been
presented for payment at June 30, 1972 and the remaining
$ 39,000 was presented during the current fiscal year.
The redemption price was the face value of the bond.
(5) CONSUMERS' DEPOSITS
Included in consumers' deposits at June 30, 1973, is
(Continued - 4)
JAMES M GAISER CERTIFIED PUBLIC ACCOUNTANT
CARLSBAD MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1973
(5) CONSUMERS' DEPOSITS (CONTINUED)
$ 22,870 representing the net overpayment received from
La Costa Land Company, An Illinois Corporation, on the
Alga Road project completed this year. This amount will
be repaid or applied to other construction projects at
the option of La Costa Land Company.
(6) FUND BALANCE ADJUSTMENT
At June 30, 1972, the full amount of a note payable was
erroneously charged against the general fund balance. An
adjustment was required to increase the amount to be raised
from future revenues and relieve the fund balance of this
charge.
(Concluded - 5)
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
SCHEDULE 1
CARLSBAD MUNICIPAL WATER DISTRICT
COMBINING BALANCE SHEET - ALL FUNDS
JUNE 30, 1973
- - - ASSETS - - -
CURRENT ASSETS:
Cash
Time Certificates of Deposit
Accrued interest receivable
Accounts receivable - water customers
Accounts receivable - other
Agricultural rebates receivable
Inventories - water, pipe, etc.
Prepaid insurance
Total Current Assets
PROPERTY AND EQUIPMENT
OTHER ASSETS AND OTHER DEBITS:
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 BALANCES
CURRENT LIABILITIES:
Accounts payable
Current installment due on notes
Current installment due on bonds
Unredeemed bond coupons
Accrued payroll taxes and benefits
Accrued interest
Consumers' deposits
Total Current Liabilities
LONG-TERM DEBT, EXCULDINO CURRENT PORTION I
Notes payable
Bonds payable
Total Long -Term Debt, Excluding
Current Portion
RESERVES FOR:
Construction (Schedule 8)
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
(EXHIBIT A)
$ 207,988
250,000
2,191
67,760
11,939
18,072
53,857
300
612,107
3,706,917
126,554
224,675
2,799,110
3,509
300,000
3,453,848
5 7,772,872
$ 67,087
53,703
95,000
6,606
3,850
34,453
47,232
307,931
107,407
2,543,000
2,650,407
63,771
3,509
224,675
300,000
126,554
3,706,917
4,425,426
389,108
S 7,772,872
JAMES M.
GENERAL DISTRICT
GENERAL REVOLVING
FUND FUND
$ 80,113 $ 2,079
9,000
2,191
67,760
11,624
18,072
52,902
300
232,962 11,079
384,414
3,567
224,675
161,110
389,352
$ 1,006.728 S 11,079
$ 67,087 $
53,703
3,850
2,661
47,232
174,533
107,407
107,407
224,675
3,567
384,414
612,656
112,132 11,079
$ 1,006,728 $ 11,079
GA 1 S E R CCRT.F.EO PUBLIC ACCOU
NO. 1
(SCHEDULE 3)
$ 13,081
37,500
50,581
819,771
122,987
795,000
100,000
1,017,987
5 1,888,339
$
45,000
1,070
10,298
56,368
750,000
750,000
100,000
122,987
819,771
1,042,758
39,213
$ 1,888,339
• IMPROVEMENT
NO. 2
(SCHEDULE 4)
$ 82,401
30,000
315
955
113,671
1,230,225
670,000
3,509
673,509
$ 2,017,405
$
25,000
2,467
9,062
36,529
645,000
645,000
63,771
3,509
1,230,225
1,297,505
38,371
$ 2,017,405
DISTRICTS
NO. 3
(SCHEDULE 5)
$ 16,499
140,500
— y
156,999
648,381
643,000
200,000
843,000
? 1,648,389
$
5,000
1,450
10,646
17,096
638,000
638,000
200,000
648,381
848,381 •
144,903
$ 1.648,380
NO. 4
(SCHEDULE 6)
$ 13,815
33,000
46,815
624,126
530,000
530,000
.? 1,200^11
$
20,000 .
1,619
1,786
23,405
510,000
510,000
624,126
624,126
43,410
$ 1,200,941
INTANT MOTE- The accomnanvina notes to financial
statements are an integral part of this
statement.
SCHEDULE 2
CARLSBAD MUNICIPAL WATER DISTRICT
COMBINING STATEMENT OP REVENUES AND EXPENSES - ALL FUNDS
FOR THE YEAR ENDED JUNE 30, 1973
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 7)
INCOME BEFORE OTHER EXPENSES
OTHER EXPENSES:Interest expanse
Provision for depreciation
OtherTotal Other Expenses
NET INCOME (Exhibit C)
TOTAL
ALL FUNDS
(EXHIBIT B)
$ 594,254
366,800
227,454
335,841
9,275
14,792
587,362
191,687
395,675
132,986
81,152
360
214,498
5 181,177
GENERAL DISTRICT
GENERAL REVOLVING
FUND FUND
$ 416,079 $ 5,943
256,760 3,668
159,319 2,275
125,708
5,759
6,616
297,402 2,275
191,687
105,715 2f275
14,080
14,934
360
"™ 29,014 ""' '" 360
.S 76,701 $ 1,915
IMPROVEMENT DISTRICTS
CONSTRUCTION
- - - BOND AND INTEREST FUNDS - - - FUND
NO. 1 NO. 2 NO. 3 NO. 4 '(SCHEDULE 8)
$ 11,307
6,969
4,338
72,402
3,424
80,164
80,164
32,093
20,616
52,709
JL 27,415
$ - $ 65,370
40,348
25,022
55,422 37,599
3,516
4,335 417
59,757 66,554
59,757 66,554
32,913 32,100
21,344 14,229
54,257 46,329
6 5.500 S 20.225
$ 17,617
11,004
6,613
44,710
51,323
51,323
21,800
10,029
31,829
S 19..494
$ 77,938
48,051
29,887
29,887
29,887
_
„
L 29,88?
NOTE: The accompanying notes to financial statements are an integral part of this statement.
JAMES M.GAI5CR CERTIFIED PUBUC ACCOUNTANT
SCHEDULE 3
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 1
BALANCE SHEET
JUNE 30, 1973
- ASSETS
Cash
Time Certificates of
Deposit
Long-term contract
receivable
Property and equipment
Future revenue required
to retire bonded debt
Bonds authorized, un-
issued
TOTALS
TOTAL
FUNDS
(SCHEDULE 1)
BOND AND PROPERTY
INTEREST AND BONDED
FUND EQUIPMENT DEBT
$13,081
37,500
122,987
819,771
795,000
100,000
$ 13,081 $ - $
37,500
122,987
819,771
795,000
100,000
S 1.888.339 S 173.568 $ 819.771 $ 895.000
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
TOTALS
1,070
10,298
795,000
100,000
122,987
819,771
39,213
$ 1,070 $
10,298
122,987
39,213
819,771
795,000
100,000
$ 1.888.339 S 173.568 $ 819.771 $ 895.000
NOTE: The accompanying notes to financial statements are an
integral part of this statement.
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 2
BALANCE SHEET
JUNE 30, 1973
SCHEDULE 4
. - - - ASSETS - - -
Cash
Time Certificates of Deposit
Inventory
Accounts receivable - other
Property and equipment
Future revenue required to retire bonded debt
Unamortized bond discount
TOTALS
TOTAL
FUNDS
(SCHEDULE 1)
$ 82,401
30,000
955
315
1,230,225
670,000
3,509
BOND AND
INTEREST
FUND
$ 19,900
30,000
3,509
BOND
CONSTRUCTION
FUND
$ 62,501
955
315
PROPERTY
AND
EQUIPMENT
$
1,230,225
BONDED
DEBT
$
670,000
$ 2.017.405 $ 53.409 $ 63.771 $ 1.230.225 $ 670,000
LIABILITIES, RESERVES, AND
- - - FUND BALANCE
Unredeemed bond coupons
Accrued interest on bonds
Bonds payable
Reserves for:
Construction (Schedule 8)
Unamortized bond discount
Investment in property and equipment
Fund balance
TOTALS
$2,467
9,062
670,000
63,771
3,509
1,230,225
38.371
$ 2,467
9,062
3,509
38,371
$
63,771
670,000
$ 2.017.405 $ 53.409 $ 63,771
1,230,225
1.230.225 $ 670.000
NOTE:The accompanying notes to financial statements are an integral part of this statement.
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
SCHEDULE 5
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 3
BALANCE SHEET
JUNE 30, 1973
ASSETS
Cash
Time Certificates of
Deposit (see note below)
Property and equipment
Future revenue required
to retire bonded debt
Bonds authorized, un-
issued
TOTALS
TOTAL
FUNDS
(SCHEDULE 1)
$ 16,499
140,500
648,381
643 ,.000
200,000
BOND AND PROPERTY
INTEREST AND
FUND EQUIPMENT
$ 16,499 $
140,500
648,381
BONDED
DEBT
$ -
643,000
200,000
$ 1.648.380 $ 156.999 $ 648.381 $ 843.000
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 (see note
below)
TOTALS
1,450
10,646
643,000
200,000
648,381
144,903
$ 1,450 $
10,646
648,381
144,903
$ -
643,000
200,000
$ 1.648.380 $ 156.999 $ 648.381 $ 843.000
NOTE: The fund balance includes a sinking fund in the amount of
$ 79,400 represented by Time Certificates of Deposit.
The accompanying notes to financial statements are an
integral part of this statement.
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
SCHEDULE 6
CARLSBAD MUNICIPAL WATER DISTRICT
IMPROVEMENT DISTRICT NO. 4
BALANCE SHEET
JUNE 30, 1973
w
- - - ASSETS
Cash
Time Certificates of
Deposit
Property and equipment
Future revenue required
to retire bonded debt
TOTALS
TOTAL
FUNDS
(SCHEDULE 1)
$ 13,815
33,000
624,126
530,000
S 1.200.941
BOND AND
INTEREST
FUND
$ 13,815
33,000
$ 46.815
PROPERTY
AND
EQUIPMENT
$ -
624,126
$ 624.126
BONDED
DEBT
$ -
530,000
$ 530.000
LIABILITIES, RESERVE, AND
FUND BALANCE
Unredeemed bond coupons
Accrued interest on
bonds
Bonds payable
Reserve for investment
in property and
equipment
Fund balance
TOTALS
1,619
1,786
530,000
624,126
43,410
1,619 $
1,786
43,410
624,126
530,000
$ 1.200.941 $ 46.815 S 624.126 $ 530.000
NOTE: The accompanying notes to financial statements are an
integral part of this statement.
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
SCHEDULE 7
CARLSBAD MUNICIPAL WATER DISTRICT
SCHEDULE OP OPERATING EXPENSES - GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 1973
WITH COMPARATIVE FIGURES FOR 1972
1973 1972
PUMPING:
Supervision, labor, and expense
Fuel and power
Totals
WATER TREATMENT:
Chlorine
Supervision, labor, and expense
Power usage
Chlorine equipment - repairs and
maintenance
Laboratory services - testing
Totals
TRANSMISSION - DISTRIBUTION:
Repairs and maintenance - pipelines
Supervision, labor, and expense
Meter repairs
Telemetering
Valve repair and greasing
Repairs and maintenance - plant
Utilities
Miscellaneous supplies
Totals
CUSTOMER ACCOUNTS:
Meter reading and supervision
Uncollectible accounts
Totals
ADMINISTRATIVE AND GENERAL:
Salaries
Engineering
Payroll taxes and employee benefits
Legal, auditing, and accounting
Directors' fees
Utilities and telephone
Auto and truck expense
Insurance
Advertising and promotion
Office
Meetings, conventions, and dues
Maintenance - general plant
Printing and reproduction
Bond service
Small tools and equipment maintenance
Miscellaneous
Totals
Total Operating Expenses (Schedule 2)
915
816
1,731
3,582
2,179
818
426
192
7,197
32,976
20,617
9,529
1,532
1,760
369
87
66,870
2,074
117
2,191
45,999
12,240
11,016
9,600
5,850
5,139
4,985
4,494
3,732
2,882
2,726
2,462
969
619
611
374
113,698
$ 191.687
980
601
1,581
3,466
2,288
784
262
160
6,960
19,971
18,317
7,607
1,368
924
661
236
152
49,236
1,997
1,997
43,040
5,513
9,218
11,313
5,750
4,776
4,085
3,361
4,328
2,611
2,939
3,589
1,029
716
874
581
103,723
$ 163.497
NOTE: The accompanying notes to financial statements are an
integral part of this statement.
JAMES M.GAI5ER CERTIFIED PUBLIC ACCOUNTANT
SCHEDULE 8
CARLSBAD MUNICIPAL WATER DISTRICT
ANALYSIS OF CHANGES IN RESERVE FOR CONSTRUCTION
FOR THE YEAR ENDED JUNE 30, 1973
BOND CONSTRUCTION FUND
IMPROVEMENT
DISTRICT
NO. 2
BALANCE, JULY 1, 1972 $ 47,384
REVENUE:
Water sales 77,938
Less cost of water sold 48,051
Net water sales 29,887
Total Funds Available 77„271
EXPENDITURES:
Metering station, Alga Road Project 13,500
Total Expenditures 13,500
BALANCE, JUNE 30, 1973 (Exhibit C) S 63.771
NOTE: The accompanying notes to financial statements are an
integral part of this statement.
JAMES M. GAISER CERTIFIED PUBLIC ACCOUNTANT
CARLSBAD MUNICIPAL WATER DISTRICT
_____ COMMENTS
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 retails its water to consumers in the
La Costa Development and rural areas and also functions as a
wholesaler to the City of Carlsbad, which maintains its own
facilities for distribution within the City. 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 uses a 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 the State
of California. The accounting records maintained were suitable
and well kept, reflecting reasonably adequate internal control.
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
Monthly financial statements and information are prepared and
presented to the Board of Directors by the Accounting Officer.
I found the minutes of the Board of Directors in excellent
**" condition.
INSURANCE COVERAGE
The District had the following insurance coverage at
June 30, 1973:
Primary comprehensive liability -
all business, including $ 5,000
medical payments, owned automobiles,
uninsured motorists and non-owned
automobiles:
Bodily injury $ 500,000/$ 500,000
Property damage 500,000
Liability - non auto, including
general liability, products and
completed operations and employees'
non-ownership
500,000
Excess comprehensive liability 1,000,000
Fire insurance coverage on buildings
and caretaker's trailer including
extended coverage, vandalism,
and malicious mischief 139,500
Employee dishonesty 50,000
Equipment and records - all risks 25,000
Depositors' forgery coverage 10,000
Comprehensive - glass panes and doors Actual cash value
The District also has the statutory amount of Workmen's
^ Compensation Insurance and carries group medical insurance for
its employees.
-2-
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
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
revenues and expenses and the actual revenues and expenses
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 revenues and expenses, as
adopted by the Board of Directors, and the actual revenues and
expenses resulting from operations for the year under review, is
shown below:
(OVER) UNDER
BUDGET BUDGET ACTUAL
REVENUES:
Water sales, net of cost $ 212,867 $ (14,587) $ 227,454
District property taxes 319,191 (16,650) 335,841
Bond proceeds and other 18,600 (7,603) 26,203
Total Revenues 550,658 (38,840) 589,498
Totals Forward $ 550,658 $ (38,840) $ 589,498
-3-
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
BUDGET
Totals Forward $ 550,658
OPERATING EXPENSES:
PUMPING:
Supervision, labor, and expense 1,000
Fuel and power 850
Maintenance - structures 100
WATER TREATMENT:
Supervision, labor, and expense 2,435
Chlorine 3,600
Power usage 1,000
Chlorine equipment and station -
maintenance 1,600
Laboratory services - testing 250
TRANSMISSION - DISTRIBUTION:
Supervision, labor, and expense 31,014
Repairs and maintenance -
pipelines; valve repair
and greasing 15,000
Meter repairs 5,000
Telemetering 1,500
Repairs and maintenance - plant 1,000
Utilities 300
Miscellaneous supplies 100
CUSTOMER ACCOUNTS:
Meter reading and supervision 2,134
Uncollectible accounts 200
ADMINISTRATIVE AND GENERAL:
Salaries 44,984
Legal, auditing, and accounting 9,600
Directors' fees 6,000
Payroll taxes and employee
benefits 13,100
Utilities and telephone 4,800
Insurance 4,200
Office expense 3,050
Advertising and promotion 3,000
Auto and truck expense 3,600
Meetings, conventions, and dues 3,000
Maintenance - general plant 3,000
Small tools and equipment
maintenance 1,000
Printing and reproduction 500
Engineering 5,000
Bond service 700
Miscellaneous 750
Total Operating Expenses $ 173,367
EXCESS OF REVENUES OVER
OPERATING EXPENSES
Totals Forward
377,291
$ 377,291
.(OVER) UNDER
BUDGET , ACTUAL
$ (38,840) $ 589,498
85
34
100
256
18
182
1,174
58
10,397
915
816
2,179
3,582
818
426
192
20,617
(17,976)
(4,529)
(32)
(760)
(69)
13
60
83
(1,015)
-
150
2,084
(339)
(294)
168
(732)
(1,385)
274
538
389
(469)
(7,240)
81
376
32,976
9,529
1,532
1,760
369
87
2,074
117
45,999
9,600
5,850
11,016
5,139
4,494
2,882
3,732
4,985
2,726
2,462
611
969
12,240
619
374
$ (18,320) $ 191,687
(20,520)397,811
$ (20,520) $ 397,811
-4-
JAMES M. GAINER CERTIFIED PUBLIC ACCOUNTANT
Totals Forward
NON-OPERATING EXPENSES:
Debt service - principal
and interest
Capital expenditures and
work in progress
Total Non-Operating
Expenses
TOTALS
BUDGET
240,229
212,618
452,847
(OVER) UNDER
BUDGET ACTUAL
$ 377,291 $ (20,520)
(130,460)
157,786
27,326
$ (75.556) $ (47.846)
$ 397,811
370,689
54,832
425,521
$ (27.710)
OPERATIONS
A summary of the results of operations for the year ended
June 30, 1973 is shown below:
Operating revenues (net)
Operating expenses
Income from operations
Other revenue (primarily District
property taxes)
Income before other expenses
Other Expenses:
Interest
Provision for depreciation
Other
Net Income
$ 132,986
81,152
360
$ 227,454
191,687
35,767
359,908
395,675
214,498
S 181.177
-5-
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
CASH - $ 207.988
The fund cash balances at June 30, 1973, were as follows:
On deposit:
General fund $ 80,013
General revolving fund 2,079
Improvement District No. 1 fund 13,081
Improvement District No. 2 fund 82,401
Improvement District No. 3 fund 16,499
Improvement District No. 4 fund 13,815
On hand:
Petty cash fund 100
Total $ 207.988
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 CERTIFICATES OF DEPOSIT - $ 250.000
Time Certificates of Deposit in the amount of $ 250,000
iwere held by West Coast National Bank, Carlsbad Branch, at
June 30, 1973. Details of these deposits were confirmed by
the depositary bank and are presented below:
PURCHASE
SETTLEMENT INTEREST INTEREST FACE
DATE TERM RATE PAYABLE AMOUNT
11-30-72 1 year 6.125% Quarterly $ 100,000
3-30-73 180 days 7.125% Quarterly 100,000
6-26-73 180 days 8.125% Quarterly 50,000
Total $ 250.000
I confirmed directly with the agent of the above-named
•mm
depositary bank that they held securities in a pool having a
market value of at least 10% in excess of all deposits reported
by the bank.
-6-
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
ACCOUNTS RECEIVABLE - WATER CUSTOMERS - $ 67.760
Requests for confirmation of accounts receivable were
mailed to 92 water consumers, consisting of 12 positive con-
formations and 80 negative confirmations, and totaled approxi-
mately 93% of the dollar amount of accounts receivable. Nine
positive confirmations, in the amount of $ 40,507 were received
and no differences were reported. No replies were received on
three positive confirmations, in the amount of $ 16,350; however,
alternate procedures were used to satisfy myself. Of the
80 negative confirmations sent, in the total amount of $ 5,902,
no exceptions were received.
The District does not provide for an allowance for doubtful
accounts on the books since all accounts are considered collect-
ible and prior experience has not indicated a necessity for
such a valuation account.
ACCOUNTS RECEIVABLE - OTHER $ 11.939
The accounts receivable - other consists of meter and
service installations and repairs for various consumers in the
District in the amount of $ 6,778, and $ 5,161 consisting of
construction and subdivision charges for which no deposit has
yet been received.
AGRICULTURAL REBATES RECEIVABLE - $ 18.072
The agricultural rebates receivable represent the amount
due the District from the San Diego County .Water Authority for
water consumed for agricultural purposes during the period
April 1, 1973 through June 30, 1973.
—7—
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
INVENTORIES - $ 53.857
Inventories of water and materials at June 30, 1973 are
shown below:
Water $ 17,476
Materials (meters, pipe, etc.) 36,381
Total $ 53.857
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.
I was present to observe the taking of the water and
materials inventories by the District personnel at the end of
the fiscal year. I tested the count valuations and the arithmetical
accuracy of the inventory amounts.
PROPERTY AND EQUIPMENT - $ 3.706.917
Changes, during the year under review, to property and equip-
ment accounts are summarized as follows:
BALANCE BALANCE
ACCOUNTS 7-1-72 ADDITIONS RETIREMENTS 6-30-73
Cost of partici-
pation - San
Diego County
Water Authority $ 33,174 $ $ - $ 33,174
Land and easements 120,848 - - 120,848
Reservoirs and
dam 1,409,447 9,806 - 1,419,253
Pipelines and pump
stations 2,294,637 253,105 - 2,547,742
Chlorination
stations 56,730 - - 56,730
Meters and
accessories 78,315 39,395 - 117,710
Buildings 117,671 2,150 - 119,821
Machinery and
equipment 52,356 10,280 (1,037) 61,599
Office fixtures
and equipment 17,454 - - 17,454
Totals $ 4.180.632 $ 314.736 $ (1.037) 4,494,331
Less accumulated depreciation (787,414)
Net property and equipment $ 3.706.917
-8-
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
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 LIVES
Reservoirs and dam 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 - $ 126.554
The long-term receivable balances at June 30, 1973 were as
follows :
Contract receivable - San Marcos
County Water District $ 122,987
Notes receivable - United Concrete
Pipe Corporation and U. S.
Industries, Inc. 67
Note receivable - American Pipe and
Construction Co. _ 3 , 500
Total $ 126.554
I confirmed the contract receivable directly with the
San Marcos County Water District and verified the notes re-
ceivable by alternate procedures.
-9-
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
The $ 122,987 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. Payments are due annually
within 90 days after June 30 of each year until paid in full.
v&&*'
The annual payments are the equivalent of $ 1.00 per acre foot
of water purchased by the San Marcos County Water District
within the fiscal year preceding the date of payment. No
interest is provided in the contract.
The notes receivable in the amount of $ 67 are seven year,
5% notes which constitute 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 $ 3,500 is a six year, 5% note which con-
stitutes the District's interest in a note issued by American
Pipe and Construction Co. in settlement of an anti-trust suit.
WORK IN PROGRESS - $ 224.675
The work in progress at June 30, 1973 consists of the
following:
Squires Dam Expansion $ 200,824
Oceanside - Carlsbad Inter Tie 17,993
Water System Planning Study 1,829
Tri-Agency Pipeline Project 3,072
Headquarters Addition 809
La Costa Reservoir 68
South Aqueduct Connection 80
Total $ 224.675
The Squires Dam Expansion includes the cost of approxi-
mately 56 acres of land purchased from Mrs. Ida Dawson during
.',***
*** the last fiscal year.
-10-
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
'ACCOUNTS PAYABLE - $ 67.087
The accounts payable at June 30, 1973 represents amounts due
to trade creditors in the ordinary course of business.
CONSUMERS1 DEPOSITS - $ 47.232
At June 30, 1973, consumers' deposits consist of the
following items:
Overpayment - La Costa Land
Company $ 22,870
Performance deposits and
inspection deposits 15,615
Refunds due and deposits on
meter installations 8,747
Total S 47.232
The performance deposits and inspection deposits represent
the unused portion of deposits received by the District, gen-
erally for construction. The refunds due and deposits on meter
installations include amounts owing to consumers for the excess
of their deposits over the actual cost of installation and
deposits for meters not yet installed. The overpayment from La
Costa Land Company represents an excess reimbursement for costs
on the Alga Road project. This amount will be refunded or applied
to other construction projects at the option of La Costa Land
Company, An Illinois Corporation.
NOTES PAYABLE
CURRENT - $ 53,703
LONG-TERM - $ 107.407
At June 30, 1973, notes payable consist of the following:
-11-
JAMES M.GAISER CERTIFIED PUBLIC ACCOUNTANT
CURRENT L.ONG-TERM
Security Pacific National Bank
Mrs. Ida Dawson
Totals
$ 20,000
33,703
$ 40,000
67,407
$ 53.703 $ 107.407
The note payable to Security Pacific National Bank bears
interest at 7%, payable quarterly. Principal is to be paid in
annual installments of $ 20,000 or more on the fifth day of
August each year. The District may prepay any unpaid principal
balance of the note at any time without any penalty. As of
June 30, 1973, all payments due under the note have been timely
paid.
The note payable to Mrs. Ida Dawson bears interest at 8%
and is secured by a first deed of trust on approximately 56 acres
of land purchased during the last fiscal year as part of the
Squires Dam Expansion Program. Principal is payable in semi-
annual installments of $ 16,852 and interest is also payable
semi-annually commencing October 1, 1972.
BONDS PAYABLE - CONSTRUCTION
CURRENT - $ 95,000
LONG-TERM - S 2.543.000
Bonds in the principal amount of $ 95,000 matured during
the year under review, all of which were redeemed by the District.
Bonds in the principal amount of $ 50,000 which were due but not
presented for payment at June 30, 1972 were also redeemed. In
addition, $ 56,000 of 5% bonds of Improvement District # 3, which
had a maturity date of March 1, 1991, were called by the District
as of March 1, 1972. Of these bonds, $ 17,000 had been presented
-12-
JAMES M.GAISfcR CERTIFIED PUBLIC ACCOUNTANT
for payment at June 30, 1972. The remaining $ 39,000 were
redeemed by the District during the current fiscal year.
The remaining bonds are due and payable as follows:
Improvement
District
No. 1:
Improvement
District
No. 2:
Series 1:
Series 2:
Series 3:
Improvement
District
No. 3:
Improvement
District
No. 4:
YEARS OF
MATURITY
1974-only
1975-only
1976-1977
1978-1980
1981-1982
1983-only
1984-1986
1987 -only
1974-only
1975-1976
1977-1983
1984-1987
1988-only
1974-only
1975-only
1976-1982
1983-1987
1988-1991
1973-only
1974-only
1975-1983
1974-only
1975-1990
1991-only
1973-only
1974-1977
1978-only
1979-1982
1983-1986
1987-1989
1990-1991
RATE OF
INTEREST
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%
4.50%
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%
AMOUNT DUE
EACH YEAR
$ 45,000
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
15,000
20,000
25,000
5,000
10,000
10,000
5,000
5,000
558,000
20,000
20,000
25,000
25,000
30,000
35,000
40,000
CURRENT
PORTION
10,000
10,000
5,000
5,000
20,000
LONG-TERM
PORTION
$ 45,000 $
45,000
100,000
165,000
120,000
65,000
210,000
45,000
20,000
105,000
80,000
25,000
10,000
105,000
100,000
100,000
10,000
90,000
80,000
558,000
80,000
25,000
100,000
120,000
105,000
80,000
Total bonds outstanding at June 30, 1973 $ 95.000 $ 2.543.000
-13-
JAMES M.GAIi'ER CERTIFIED PUBLIC ACCOUNTANT
The tax rates for the fiscal year ending June 30, 1973, were:
SECURED UNSECURED
TAX TAX
DISTRICT RATE RATE
General District .140 .140
Improvement District No. 1 .080 .080
Improvement District No. 2 .290 .290
Improvement District No. 3 .450 .450
Improvement District No. 4 .050 .050
At June 30, 1973, $ 300,000 in construction bonds, which
were authorized by the voters of the various Improvement
Districts, remained unissued.
-14-
JAMES M.GAISER ceRTiriED PUBLIC ACCOUNTANT