HomeMy WebLinkAbout; ; 1974-75 Accountants Report; 1975-09-23I
RECEIVED
OCT141975
WOODS»Ut-*U)bUik & ASSOC.
CONSULTING ENGINEERS
CARLSBAD MUNICIPAL WATER DISTRICT
Accountant's Report
Financial Statements and Schedules
June 30. 1975
C. PAUL WALKER
CERTIFIED PUBLIC ACCOUNTANT
70S THIRD STREET
OCEANSIDE, CALIFORNIA 92O54
CARLSBAD MUNICIPAL WATER DISTRICT
Table of Contents
Accountant's Report
Exhibit
Balance Sheet A
Statement of Revenue and Expense B
Statement of Reserves, Equity and Fund Balances C
Statement of Changes in Financial Position D
Notes to Financial Statements
Schedule
Administrative and General, Transmission and Distribution,
and Water Treatment Expenses 1
Additions to Plant, Property and Equipment 2
C.PAUL WALKER
CERTIFIED PUBLIC ACCOUNTANT
705 THIRD STREET
OCEANSIDE, CALIFORNIA O2O54
(714} ZSS-Z&B&
The Board of Directors
Carlsbad Municipal Water District:
I have examined the balance sheet of Carlsbad Municipal Water District
as of June 30, 1975 and the related statements of revenue and expense, of
reserves, equity and fund balances, and of changes in financial position 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. The financial statements for the prior year, included
for comparative purposes, were examined by other certified public accountants.
In my opinion, the above mentioned financial statements present
fairly the financial position of Carlsbad Municipal Water District at June 30,
1975 and the results of its operations and changes in financial position for
the year then ended, in conformity with generally accepted accounting principles
applied on a basis consistent with that of the preceding year. The current
year's supplementary data included in Schedule 1 and 2 have been subjected to
the same auditing procedures, and, in my opinion, are stated fairly in all
material respects when considered in conjunction with the basic financial
statements taken as a whole.
C
September 23, 1975
Exhibit A
Assets
Current assets:
Cash, including $88,800 in time certificates of deposit
($98,000 in 1974-)
Accounts receivable
Agricultural rebate receivable
CETA reimbursement, interest and other receivables
Charges in excess of deposits on construction projects
¥ater in storage
Materials inventory
Total current assets
Restricted assets:
Cash, including $363,200 in time certificates of
deposits ($327,000 in 1974)
Taxes receivable (note 2)
Total restricted assets
Plant, property and equipment, at cost (note 3)
Other assets:
Long-term contract and notes receivable (note 4)
Unamortized bond discount
Total other assets
CARLSBAD MUNICIPAL WATER DISTRICT
Balance Sheet
June 30, 1975
with comparative figures for 197-4
1975
128,674
88,181
15,156
12,338
15,690
19,631
79.900
1974
116,109
68,698
15,794
5,597
32,384
20,771
54.711
359,570 314,064
386,318 450,531
57.500 -
443.818 450.531
4,447,003 4,202,414
115,032
2.807
121,221
3.158
117.839 124.379
Liabilities. Reserves. Equity and Fund Balances
Current liabilities (payable from current assets):
Accounts payable
Notes payable
Current installments of long-term debt
Accrued interest
Accrued payroll taxes and benefits
Construction and customer meter deposits
Total current liabilities (payable
from current assets)
Current liabilities (payable from restricted assets):
Matured bonds payable
Accrued interest on bonds and unredeemed bond coupons
Bonds payable - due within one year (note 5)
Total current liabilities (payable
from restricted assets)
Long-term debt, excluding current installments (note 5):
Notes payable
Bonds payable
Total long-term debt
Reserves:
Construction (deficit)
Long-term receivables and unamortized bond discount
Total reserves
Equity in plant, property and equipment:
Amount by which investment in plant, property and
equipment exceeds outstanding debt incurred for
construction purposes
Fund balances:
Appropriated fund balance - sinking fund
Unappropriated fund balance
Total fund balance
197
188.527
1,000
39,257
110.000
150.257
(15,871)
117.839
101.968
126,400
526.466
652.866
59,035
61,391
-888
7,654
59.559
83,629
-53,703
1,776
6,283
48.603
193.994
39,030
100.000
139.030
53,704
2.333.000 2.443.000
2.333.000 2.496.704
60,025
124.379
184.404
1,941,612 1,552,007
102,400
422.849
525.249
5.368.230 5.091.388
See accompanying notes to financial statements.
Exhibit B
CARLSBAD MIMICIPAL_¥ATER DISTRICT
Statement of Revenue and Expense
Year ended June 30, 1975
with comparative figures for 1974-
1975 1974
Operating revenues:
Water sales $ 730,291 719,733
Penalty charges and miscellaneous income 9,171 5,573
Lawsuit settlement 6,4-18
Administration expense reimbursement 4.735 4.748
Total operating revenues 750.615 730.054
Operating expenses:
Cost of water sold 461,375 441,268
Pumping 1,667 1,992
Water treatment 19,154 10,178
Transmission and distribution 86,788 71,224
Customer accounting 10,471 2,197
Administrative and general 140.758 123.350
Total operating expenses 720.213 650.209
Net operating revenues before
deducting depreciation 30,402 79,845
Provision for depreciation 97,4-39 90.530
Net operating revenues (loss) after
deducting depreciation (67,037) (10,685)
Other revenues:
Property taxes 385,294 382,091
Interest earned 31,822 25,630
CETA reimbursement 14.136 , ^__
Total other revenues 431.252 407.721
364,215 397,036
Other expense:
Interest on bonds and notes payable 117,092 124,823
Net revenues
See accompanying notes to financial statements.
CARLSBAD MUNICIPAL _WATER DISTRICT
Statement of Reserves, Equity and Fund Balances
Year ended June 30, 1975
with comparative < figures for 1974
Exhibit C
1975 1974
Balances at beginning of year
Add:
Net revenues for the year
Contributed utility plant
Depreciation, capital outlay, debt retirement,
loan proceeds and transfers - increase (decrease):
Depreciation, an expense not requiring a current
outlay of funds
Capital 'outlay financed by current operations
and ponstruction reserves
Bonds redeemed
Note principal payments
Loan proceeds used to finance current capital
outlay
Utility plant returned to inventory
Transfers:
For bon<J discount amortization
For authorized construction
For long-term receivables
For sinking fund
Balances at end of year
By District:
General District
Improvement District No. 1
Improvement District No. 2
Improvement District No. 3
Improvement District No. 4
Equity in
Plant, Property Fund Balances
Reserves and Equipment Appropriated Unappropriated
184,404
-
184.404
(120,108)
-
(351)
44,212
(6,189)
(82.436)
101,968
115,032
58,525
(71,589)
101,968
1,552,007 102,400
187,663
1,739.670 102.400
(97,439)
163,348
99,000 •
55,331
(9,315)
(8,983)
24.000
201.942 24.000
1,941,612 126.400
655,072
76,943
1,008,380
87,513 126,400
113,704
1,941,612 126,400
422,849
247,123
669.972
97,439
(43,240)
(99,000)
(55,331)
9,315
8,983
351
(44,212)
6,189
(24.000)
(143.506)
526.466
231,341
67,146
65,303
95,436
67.240
526.466
Reserves
193,834
193.834
(351)
(3,746)
(5,333)
(9,430)
184.404
1,661
119,560
63,183
m.^
Equity in
Plant, Property
and Equipment
1,132,482
274,023
1,406.505
(90,530)
87,329
95,000
53,703
145,502
1.552,007
568,119
49,154
834,525
(3,847)
104.056
1.552.007
Fund
Appropriated
79,400
79,400
23,000
23,000
102,400
102,400
102^400
Balances
Unappropriated
309,708
272,213
581,921
90,530
(87,329)
(95,000)
(53,703)
351
3,746
5,333
(23.000)
(159.072)
422,849
172,579
56,123
54,622
77,743
61,782
422.849
See accompanying notes to financial statements.
CARLSBAD MUNICIPAL WATER DISTRICT
Statement of Changes in Financial Position
Year ended June 30, 1975
with comparative figures for 1974
Exhibit D
Funds provided:
Net revenues
Items which do not use working capital:
Depreciation
Bond discount amortization
Working capital provided by operations
Consumer contributions for pipelines and meters
Transfers to inventory from property and equipment
Collections on long-term contracts and notes receivable
Funds used:
Additions to plant, property and equipment
Current installments and repayment of long-term debt
Increase in working capital
Changes in components of working capital:
Increase (decrease) in current assets:
Cash
Receivables
Inventory
Increase (decrease) in current liabilities:
Accounts payable
Notes payable
Current installments of long-term debt
Matured bonds and unredeemed bond interest coupons
Accrued expenses
Deposits
Increase in working capital
24-7,123
97,^39
351
344,913
187,663
8,983
6.189
1974
272,213
90,530
351
363.094
274,023
5.333
642.450
351,011 361,352
163,704 153,703
33.033 127.395
$ 547.748 642.450
(51,648) 108,652
66,392 22,211
24.049 21.625
38.793 152.488
(24,594) 16,542
61,391
(43,703) 5,000
2,472 1,751
(762) 429
10.956 1.371
5.760 25.093
33.033 127.395
See accompanying notes to financial statements.
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements
June 30. 1975
(1) Summary of Significant Accounting Policies
(a) Accounting Method
The District operates and reports as an enterprise utilizing
the accrual method of accounting. Uncollected taxes are
not included in the District's financial statements except
as explained in note 2.
(b) Inventories
The inventory of water in storage is valued at the lower of
cost, (last-in, first-out) or market. The materials in-
ventory is valued at the lower of cost (first-in, first-out)
or market.
(c) Depreciation
Depreciation is computed on the straight-line method over the
estimated lives of the respective assets as follows:
Estimated
Assets Useful Lives
Reservoirs and dams 75 years
Pipelines and pump stations 50 years
Chlorination stations 25 to 4.0 years
Meters and accessories 25 to 4-0 years
Buildings 40 years
Machinery and equipment 5 to 20 years
Office fixtures and equipment 10 years
The District has consistently taken no depreciation during the
year of acquisition of an asset and a full year's depreciation
in the year of disposition. The cost of participation - San
Diego County Water Authority and the land and easements are not
being depreciated.
(2) Taxes Receivable
The San Diego County Assessor improperly recorded the tax rate to be assessed in
Improvement District No. 2 as $.021 rather than $.21. Under the legal options
available to the District to rectify the situation, the District has chosen to
have the additional amount assessed and collected along with the taxes normally
assessed for the fiscal year ending June 30, 1976. The amount accrued as a
receivable at year end represents management?s estimate of the amount the
District would have received during the current year had the county assessor
recorded the proper tax rate.
2
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(3) Plant, Property and Equipment
The plant, property and equipment of the District is summarized below:
1975 1974
Work in progress $ 232,085 270,205
Cost of participation - San Diego
County Water Authority 33,17-4 33,174-
Land and easements 120,848 120,848
Reservoirs and dam 1,534,113 1,4-19,362
Pipelines and pump stations 3,008,64-5 2,802,256
Chlorination stations 65,14-8 65,148
Meters and accessories 182,258 162,008
Buildings 147,952 122,281
Machinery and equipment 69,523 65,835
Office fixtures and equipment 28.346 18.947
Total 5,422,092 5,080,064
Less accumulated depreciation 975.089 877.650
Net plant, property and
equipment I 4.447.003 4.202.414
(4) Long-Term Contract Receivable
On November 6, 1963 the District sold a pipeline to San Marcos County Water
District for |140,000. Payments are due annually within 90 days of fiscal
year end, at the rate of $1.00 per acre foot of water purchased by San Marcos
County Water District within the preceeding fiscal year. The contract
contains no interest provision and had a balance due at June 30, 1975 of
|115,032.
(5) Long-Term Debt
The interest rates and terms of payment of the District's long-term general
obligation bonded debt at June 30, 1975 is as follows:
Current Long-term
portion portion
Improvement District No. 1, 1957 issue,
interest payable semi-annually on March 1.
and September 1:
Due March 1, 1976 at /+% $ 50,000
Due March 1, 1977 through 1987 in varying
amounts and rates ranging from $45,000
to $70,000 and 3.85$ to A.% 655,000
Improvement District No. 2:
Series No. 1, 1958 issue, interest at 5%
payable semi-annually on March 1 and
September 1:
Due March 1, 1976 10,000
Due March 1, 1977 through 1988 in
increasing amounts from $15,000 to
$25,000 210,000
3
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(5) Long-Term Debt. Continued
Current Long-term
portion portion
Improvement District No. 2, continued:
Series No. 2} 1961 issue, interest at ^.5%
payable semi-annually on May 1 and November 1:
Due May 1, 1976 $ 15,000
Due May 1, 1977 through 1991 in increasing
amounts from $15,000 to $25,000 290,000
Series No. 3, 1968 issue, interest at 5% payable
semi-annually on January 1 and July 1:
Due July 1, 1975 10,000
Due July 1, 1976-1983 at $10,000 per year 80,000
Improvement District No. 3, 1961 issue, interest
payable semi-annually on March 1 and September 1.
Containing sinking fund requirements from 1976
through 1990 at increasing annual amounts from
$26,000 to $52,000, providing for retirement of
fixed maturities when due and to redeem callable
bonds on their optional maturity dates. Call
provisions apply to bonds maturing in 1991 in
increasing amounts over the life of the issue.
Principal due March 1, 1976 at 4-75$ 5,000
Principal due March 1, 1977 through 1990
at 4.75$ 70,000
Principal due March 1, 1991 at 5% 558,000
Improvement District No. 1+, 1961 issue, interest
payable semi-annually on June 1 and December 1:
Due December 1, 1975 at U-50% 20,000
Due December 1, 1976 through 1990 in
varying amounts and rates ranging from
$20,000 to $40,000 and 3.5% to l>.5% 470.000
Total
At June 30, 1975 the District had $300,000 of authorized but unissued
construction bonds.
(6) Employee Retirement Plan
The District' has contracted with the Public Employees' Retirement System to
provide a retirement plan for all full time employees. The District has
no past service liability and all obligations are funded in the year of
service. The expense for providing retirement benefits under this plan for
the year ended June 30, 1975 was $8,081.
CARLSBAD MJMGIPAL_WATER DISTRICT
Administration and General, Transmission and
Distribution,and Water Treatment Expenses
Year ended June 30, 1975
•with compara.tive figures for 1974-
Schedule 1
197
Administrative and General:
Salaries
Engineering
Payroll taxes and employee benefits
Legal, auditing and accounting
Advertisng and promotion
Directors1 fees
Utilities and telephone
Auto and truck expense
Insurance
Meetings, conventions and dues
Office
Maintenance, general plant
Printing and reproduction
Bond service costs
Small tools and equipment maintenance
Miscellaneous
Total
Transmission and Distribution:
Supervision, labor and expense
Payroll taxes and employee benefits
Repairs and maintenance, pipelines
Engineering services
Meter repairs
Telemetering
Miscellaneous supplies
Utilities
Total
Water Treatment:
Chlorine
Supervision, labor and expense
Payroll taxes and employee benefits
Power usage
Chlorine equipment arid station, maintenance
Laboratory services, testing
1974
49,386
14*633
7,831
14>039
8,814
6,400
7,070
7,605
6,222
5,376
4,596
4,061
763
1,054
2,052
856
140.758
44,319
7,015
22,812
2,363
7,711
2,052
81
435
86.788
9,605
2,772
440
2,153
3,784
400
43,584
17.536
7,100
12,999
6,264
6,050
5,898
5,460
.4,357
3,826
3,345
2,993
844
821
707
1.566
123.350
35,343
6,102
21,102
-6,593
1,636
-448
^224
5,951
1,995
254
1,186
538
254
Total 10.178
Schedule 2
CARLSBAD MUNICIPAL WATER DISTRICT
Additions to Plant, Property and Equipment
Year ended June 30, 1975
Contributed pipelines:
Casitas de La Costa $ 36,
Villa, La Costa 10,000
Majorca West, lot 248 11,090
Orleans East ' 8,000
Beckman Industries 30,000
Avenida Encinas 32,000
2500 Navarra 26,092
Jerez Court 12.576
Total 165,905
Meters and services contributed 21,758
Reservoir painting 102,120
Arenal Road pipeline 5,115
Tri-agency pipeline study 14,552
Headquarter building 15,066
South aqueduct study 2,587
Point "D" pressure reducing station 3,092
Poinsettia master plan study 3,644
Other engineering studies and projects 1,084
Reservoir landscaping 3,000
NCR accounting machine 9,315
Postage machine 790
Radio 572
Other field and office equipment 2.411