HomeMy WebLinkAbout; ; 1975-76 Accountants Report; 1976-10-25RECEIVED
NOV 1 8 1976
fuc .lu^iM a MSSCC.
CONSULTING ENGINEERS
CARLSBAD MINIGIFAL WATER DISTRICT
Accountant's Report
Financial Statements and Schedules
Years ended June_J30, 1976 and 1975
C. PAUL WALKER
CERTIFIED PUBLIC ACCOUNTANT
705 THIRD STREET
OCEANS1DE. CALIFORNIA 92OS4
CARLSBAD MUNICIPAL WATER DISTRICT
Table of Contents
June 30. 1976 and 1975
Accountant's Report
Exhibit
Balance sheets A
Statements of Revenue and Expense B
Statements of Reserves, Equity and Fund Balances ... C
Statements 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
TOS THIRD STREET
OCEANSIDE, CALIFORNIA 82O54
(714) T22-T889
The Board of Directors
Carlsbad Municipal Water District:
I have examined the balance sheets of Carlsbad Municipal Water District
as of June 30, 1976 and 1975 and the related statements of revenue and expense,
of reserves, equity and fund balances, and of changes in financial position
for the years 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, the above mentioned financial statements present
fairly the financial position of Carlsbad Municipal Water District at June 30,
1976 and 1975 and the results of its operations and changes in financial
position for the years then ended, in conformity with generally accepted
accounting principles applied on a consistent basis. The supplementary data
included in Schedules 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
October 25, 1976
CARLSBAD MUNICIPAL WATER DISTRICT
Balance Sheets
June 30, 1976 and 1975
Exhibit A
l>
Assets
Current assets:
Cash, including $177,400 in time certificates of
deposit ($88,800 in 1975)
Accounts receivable
Agricultural rebate receivable
CETA reimbursement, interest and other receivables
Charges in excess of deposits on construction
projects
Water in storage
Materials inventory
Total current assets
Restricted assets:
Cash, including $47-4,600 in time certificates of
deposits ($363,200 in 1975)
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
1976
383,716
96,307
20,846
40,684
6,586
21,540
69.173 '
491,715
128,674
88,181
15,156
12,338
15,690
19,631
79.900
638.852 359.570
386,318
57.500
491.715 443.818
4,754,324 4,447,003
110,452
2.456
115,032
2.807
112.908 117.839
Liabilities. Reserves, Equity and Fund Balances
Current liabilities (payable from current assets):
Accounts payable
Notes payable
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):
Bonds payable
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
1976 197
86,317
5,806
5,380
63,968
59,035
61,391
AAA
7,654
59.559
161.471 188.527
33,106
115.000
1,000
39,257
110.000
148.106 150.257
2,218,000 2,333,000
11,994
112.908
(15,871)
117.839
124.902 101.968
2,415,519 1,941,612
152.400 126,400
777.401 526.466
$ 5.997.799 5.368.230
929.801 652.866
5.997.799 5.368.230
See accompanying notes to financial statements.
Exhibit B
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Revenue and Expense
Years ended June.JO, 1976 and 1975
1976 1975
Operating revenues:
Water sales $ 905,495 730,291
Penalty charges and miscellaneous income 9,598 9,171
Lawsuit settlement - 6,418
Administrative expense reimbursement 9.915 4.735
Total operating revenues 925.008 750.615
Operating expenses:
Cost of water sold 534,969 461,375
Pumping 2,248 1,667
Water treatment 17,245 19,154
Transmission and distribution 67,638 86,788
Customer accounting 26,606 10,471
Administrative and general 138.222 140.758
Total operating expenses 786.928 720.213
Net operating revenues before
deducting depreciation 138,080 30,402
Provision for depreciation 104.664 97.439
Net operating revenues (loss) after
deducting depreciation 33.416 (67.037)
Other revenues:
Property taxes 460,773 385,294
Interest earned 32,169 31,822
CETA reimbursement 28.802 14.136
Total other revenues 521.744 431.252
555,160 364,215
Other expense:
Interest on bonds and notes payable 108,763 117.092
Net revenues $ 446.397 247.123
See accompanying notes to financial statements.
Exhibit C
o-
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 construction reserves
Bonds redeemed
Note principal payments
Loan proceeds used to finance current capital outlay
Utility plant returned to inventory
Transfers:
For bond 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
CARLSBAD MUNICIPAL WATER DISTRICT
.atements of Reserves, Equity and Fund Balances
Years ended June 30_, 1976 and 1975
Reserves
101,968
101.968
(67,012)
(351)
94,877
(4,580)
22,934
124.902
110,452
42,611
(28,161)
12A.902
Equity in
Plant, Property Fund
and Equipment Appropriated
1,941,612 126,400
327.379
2,268.991 126.400
85,617
111,000
55,585
(1,010)
— ?f\ non
146.528 26,000
2.415,519 152.400
736,916
102,922
1,373,781
77,844 152,400
124.056
2.415.519 152.400
Balances
Unappropriated
526,466
446,397
972.863
104,664
(18,605)
(111,000)
(55,585)
1,010
351
(94,877)
4,580
(26,000)
(195,462)
TTT^AQl
451,993
85,240
84,H8
83,570
72.450
777^401
Reserves
184,404
184.404
(120,108)
(351)
44,212
(6,189)
182,436)
101.968
115,032
58,525
(71,589)
101.968
Equity in
Plant, Property
and Equipment
1,552,007
187.663
1,739,670
(97,439)
163,348
99,000
55,331
(9,315)
(8,983)
201.942
1.941.612
655,072
76,943
1,008,380
87,513
113,704
1.941.612
1975
Fund Balances
Appropriated Unappropriated
102,400 422,849
247,123
102.400 669.972
97,439
(43,240)
(99,000)
(55,331)
9,315
8,983
351
(44,212)
6,189
24,000 (24.000)
24.000 (143.506)
126,400 526.466
231,341
67,146
65,303
126,400 95,436
67.240
126.400 526.466
See accompanying notes to financial statements.
Exhibit D
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Changes in Financial Position
Years ended June_30, 1976 and 1975
1276
Funds provided:
Net revenues '$ 446,397 247,123
Items which, do not use working capital:
Depreciation 104., 664. 97,439
Bond discount amortization 351 351
Working capital provided by operations 551,412 344*913
Consumer contributions for pipelines, meters, land
and construction 327,379 187,663
Transfers to inventory,from property and equipment 1,011 8,983
Collections on long-term contracts and notes
receivable 4.580 6.189
Funds used:
Additions to plant, property and equipment 412,996 351,011
Current installments and repayment of long-term debt 115,000 163,704
Increase in working capital 356.386 33.033
Changes in components of working capital:
Increase (decrease) in current assets:
Cash 360,439 (51,648)
Receivables (24,442) 66,392
Inventory (8.818) 24.049
327.179 38.793
Increase (decrease) in current liabilities:
Accounts payable 27,282 (24,594)
Notes payable (55,585) 61,391
Current installments of long-term debt 5,000 (43,703)
Matured bonds and unredeemed bond interest coupons (7,151) 2,472
Accrued expenses (3,162) (762)
Deposits 4.409
Increase in working capital
See accompanying notes to financial statements.
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements
June.'30, 1976 and 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 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 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 in 1975 as $.021 rather than $.21. Under the legal
options available to the District to rectify the situation, the District chose
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 June 30, 1975 represents management's estimate of the amount
the District would have received during the year ended June 30, 1975 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:
1976 1975
Work in progress $ 229,629 232,085
Cost of participation - San Diego
County Water Authority 33,174- 33,174
Land and easements 123,848 120,848
Reservoirs and dams 1,536,613 1,534,113
Pipelines and pump stations 3,370,317 3,008,645
Chlorination stations 67,378 65,148
Meters and accessories 214,531 182,258
Buildings 149,653 147,952
Machinery and equipment 74,502 69,523
Office fixtures and equipment 30.586 28.346
Total 5,830,231 5,422,092
Less accumulated depreciation 1.075.907 975.089
Net plant, property and
equipment
(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 proceeding fiscal year. The contract
contains no interest provision and had a balance due at June 30, 1976 of
$110,452 ($115,032 at June 30, 1975).
(5) Lang-Term Debt
The interest rates and terms of payment of the District's long-term general
obligation bonded debt at June 30, 1976 and 1975 are as follows:
June 30
1976 1975
Improvement District No. 1, 1957 issue,
interest payable semi-annually on
March 1 and September 1:
Due March 1 of each year through
1987 in varying amounts and rates
ranging from $50,000 to $70,000
and from 3.85$ to L,% $ 655,000 705,000
Improvement District No. 2:
Series No. 1, 1958 issue, interest at
5% payable semi-annually on March 1
and September 1:
Due March 1 of each year through
1988 in increasing amounts from
$15,000 to $25,000 210,000 220,000
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(5) Long-Term Debt
Improvement District No. 2, continued:
Series No. 2} 1961 issue3 interest at
A-5% payable semi-annually on May 1
and November 1:
Due May 1 of each year through 1991
in increasing amounts from $15,000
to |25,000
Series No. 3, 1968 issues interest at
5% payable semi-annually on January 1
and July 1:
Due July 1 of each year through 1983
at $10,000 per year
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 redemption
of callable bonds on their optional
maturity dates. Call provisions apply to
bonds maturing in 1991 in increasing
amounts over the life of the issue.
Due March 1 of each year through 1990
at $5,000 per year, interest at J^.75%
Due March 1, 1991 at 5%
Improvement District No. U, 1961 issue,
interest payable semi-annually on June 1
and December 1:
Due December 1 of each year through
1990 in varying amounts and rates
ranging from $20,000 to $40,000 and
3.5% to 4.5%
Total
Principal due within one
year
Long-term portion
June 30
197
$ 290,000 305,000
80,000 90,000
70,000 75,000
558,000 558,000
^70.000 A90.000
115,000 110,000
2.218.000 2.333.000
2.333.000
At June 30, 1976 and 1975 the District had $300,000 of authorized but unissued
construction bonds.
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial, Statements, Continued
(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, 1976 was $6,767 and $8,081 for the year ended
June 30, 1975.
Schedule 1
c
CARLSBAD MUNICIPAL WATER DISTRICT
Administration and General, Transmission and
Distribution, and Water Treatment Expenses
Years ended Junejto, 1976 and 1975
Administrative and General:
Salaries
Engineering and special services
Payroll taxes and employee benefits
Legal, auditing and accounting
Advertising and promotion
Directors' fees
Utilities and telephone
Auto and truck expense
Insurance
Meetings, coventions 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 and special services
Meter repairs
Telemetering
Miscellaneous supplies
Utilities
Total
Water Treatment:
Chlorine
Supervision, labor and expense
Payroll taxes and employee benefits
Power usage
Chlorine equipment and station, maintenance
Laboratory services, testing
1976 197
44,216
19^506
7,664
12,090
9,548
6,700
7,043
6,511
6,585
3,068
6,579
3,964
1,604
1,049
712
1.383
138,222
38,243
6,725
14,865
964
5,380
1,070,_
391
67.638
9,445
2,953
497
1,973
2,037
340
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
2^361
7,711
2,052
81
435
86.788
9,605
2,772
440
2,153
3,784
400
Total $ 17.245
CARLSBAD MUNICIPAL WATER DISTRICT
Additions to Plant, Property and Equipment
Year ended June 30, 1976
Schedule 2
Contributed pipelines:
Sabrina Greens
La Costa Vista
La Costa Spa
Casa Grande
Costa Verde
Alicante Hills
Seaview Condos
Total
Contributed land:
San Diego Gas-and Electric Co.
Meters and services contributed
El Camino Real Interim System
Corrosion Control Study
Tri-agency pipeline study
Headquarter building
South aqueduct study
Point "D" pressure reducing station
Poinsettia master plan study
Other engineering studies and projects
Reservoir landscaping
Programming
Trucks
IBM typewriter
Chlorination station
Fencing Squires Dam
Other field and office equipment
19,500
3,350
30,000
37,550
5,000
155,696
10.000
261,096
3,000
33,283
8,507
5,002
1,347
.703
200
82,865
453
200
1,066
949
5,865
735
2,230
462
5.033