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CONSULTING ENGINLE.1J
CARLSBAD MUNICIPAL WATER DISTRICT
Accountant's Report
Financial Statements and Schedules
June 30. 1977
C. PAUL WALKER
CERTIFIED PUBLIC ACCOUNTANT
70S THIRD STREET
OCEANS1DE. CALIFORNIA 92OS4
CARLSBAD MUNICIPAL WATER DISTRICT
Table of Contents
June 30. 1977 and 1976
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
TOO THIRD STREET
OCEANSIDE, CALIFORNIA O2OB4
(T14) 722-7880
The Board of Directors
Carlsbad Municipal Water District:
I have examined the balance sheets of Carlsbad Municipal Water District
as of June 30, 1977 and 1976 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, 1977 and
1976 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.
October 27, 1977
CARLSBAD MUNICIPAL WATER DISTRICT
Balance Sheets
June 30, 1977 and 1976
Exhibit A
Assets
Current assets:
Cash, including time certificates of deposit
and savings accounts
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 time certificates of deposits and
savings accounts
Plant, property and equipment, at cost (note 2)
Other assets:
Long-term contract receivable (note 3)
Unamortized bond discount
Total other assets
560, 446
95,943
19,793
A, 306
2,878
22,918
90.317
1976
383,716
96,307
20,846
40,684
6,586
21,540
69.173
796.601 638.852
752,346 491,715
5,090,762 4,754,324
106,039
2.105
110,452
2.456
108.144 112.908
Liabilities, Reserves. Equity and Fund Balances
Current liabilities (payable from current assets):
Accounts payable
Notes payable
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 4)
Total current liabilities (payable
from restricted assets)
Long-term debt, excluding current installments (note 4):
Bonds payable
Reserves:
Construction
Long-term receivable 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
1977 1976
Total fund balance
Commitment (note 6)
102,364
3,528
7,679
131.150
86,317
5,806
5,380
63.968
244.721 161.471
5,000
31,489
120.000
33,106
115.000
156.489 148.106
2,098,000 2,218,000
178,330
108. U4
11,994
112.908
286.474 124.902
2,864,234 2,415,519
174,400
923.535
152,400
777.401
5.997.799
1.097.935 929.801
6.747.853
See accompanying notes to financial statements.
Exhibit B
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Revenue and Expense
Years ended June_3_0, 1977 and 1976
1977 1976
Operating revenues:
Water sales $ 997,016 905,495
Penalty charges and miscellaneous income 7,262 9,598
Administrative expense reimbursement 21,505 9.915
Total operating revenues 1.025.783 925.008
Operating expenses:
Cost of water sold 645,636 534,969
Pumping 3,086 2,248
Water treatment 19,786 17,245
Transmission and distribution 86,421 67,638
Customer accounting 25,654 26,606
Administrative and general 173.056 138.222
Total operating expenses 953.639 786.928
Net operating revenues before
deducting depreciation 72,144 138,080
Provision for depreciation 113.500 104.664
Net operating revenues (loss) after
deducting depreciation (41.356) 33.416
Other revenues:
Property taxes 495,575 460,773
Interest earned 56,792 32,169
CETA reimbursement 3.793 28.802
Total other revenues 556.160 521.744
514,804 555,160
Other expense:
Interest on bonds and notes payable 101.983 108,763
Net revenues $ 412.821 446.397
See accompanying notes to financial statements.
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Reserves,Equity and Fund Balances
Years ended June 30, 1977 and 1976
Exhibit C
1977
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
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
Reserves
. 124,902
12^.902
(23,358)
(351)
189,694
(4,413)
161.572
' 286.474
106,039
122,969
57,466
' 286 .474
Equity in
Plant, Property
and equipment
2,415,519
365.600
2,781,119
(113,500)
84,339
110,000
2,276
83,115
2.864,234
828,680
132,509
1,706,931
62,174
133.940
2.864,234
Fund
Appropriated
152,400
152.400
22.000
22.000
174.400
174,400
174.400
Balances
Unappropriated
777,401
412,821
1.190.222
113,500
(60,981)
(110,000)
(2,276)
351
(189,694)
4,413
(22.000)
(266.687)
554,215
100,482
114,067
85,581
69.190
923.535
1976
Reserves
101,968
101,968
(67,012)
(351)
94,877
(4,580)
22,934
110,452
42,611
(28,161)
Equity in
Plant, Property
and Equipment
1,941,612
327,379
2,268.991
(104,664)
85,617
111,000
55,585
(1,010)
146.528
2.415.519
736,916
102,922
1,373,781
77,844
124.056
Fund Balances
Appropriated Unappropriated
126,400 526,466
446,397
126,400 972.863
104,664
(18,605)
(111,000)
(55,585)
1,010
351
(94,877)
4,580
26,000 (26.000)
26.000 (195,462)
152.400 777.401
451,993
85,240
84,148
152,400 83,570
72,450
See accompanying notes to financial statements.
Exhibit D
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Changes in Financial Position
Years ended June_3_0, 1977 and 1976
1977 1976
Funds provided:
Net revenues $ 412,821 446,397
Items which do not use working capital:
Depreciation 113,500 104,664
Bond discount amortization 351 351
Working capital provided by operations 526,672 551,412
Consumer contributions for pipelines, meters, land
and construction 365,600 327,379
Transfers to inventory from property and equipment - 1,011
Collections on long-term contract receivable 4.413 4.580
884.382
Funds used:
Additions to plant, property and equipment 449,938 412,996
Current installments and repayment of long—term debt 120,000 115,000
Increase in working capital 326,747 356.386
Changes in components of working capital:
Increase (decrease) in current assets:
Cash 437,361 360,439
Receivables (41,503) (24,442)
Inventory 22.522 (8.818)
418.380 327.179
Increase (decrease) in current liabilities:
Accounts payable 16,047 27,282
Notes payable (2,278) (55,585)
Current installments of long-term debt 10,000 5,000
Matured bonds and unredeemed bond interest coupons (1,617) (7,151)
Accrued expenses 2,299 (3,162)
Deposits 67.182 4.409
91.633 (29.207)
Increase in working capital $ 326,747 356.386
See accompanying notes to financial statements.
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements
June 30, 1977 and 1976
(1) Summary of Significant Accounting Policies
(a) Accounting Method
The District operates and reports as an enterprise utilizing
the accrual method of accounting, except uncollected property
taxes are not included in the District's financial statements.
(b) Inventories
The inventory of water in storage 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.
(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 4.0 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) Plant. Property and Equipment
The plant, property and equipment of the District is summarized below:
1977 1976
Work in progress $ 266,578 229,629
Cost of participation - San Diego
County Water Authority 33,174 33,174
Land and easements 123,848 123,848
Reservoirs and dams 1,544,073 1,536,613
Pipelines and pump stations 3,707,383 3,370,317
Chlorination stations 67,378 67,378
Meters and accessories 261,140 214,531
Buildings 161,456 149,653
Machinery and equipment 79,144 74,502
Office fixtures and equipment 33.781 30.586
Total 6,277,955 5,830,231
Less accumulated depreciation 1.187.193 1.075.907
Net plant, property and
equipment $ 5.090.762
2
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(3) 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.
U) Long-Term Debt
The interest rates and terms of payment of the District's long-term general
obligation bonded debt at June 3o, 1977 and 1976 are as follows:
June 30
1977 1976
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$> $ 605,000 655,000
Improvement District No. 2:
Series No. 1, 1958 issue, interest at
5% payable semi-annually on March 1
and September 1:
Due March 1 of each year through
1988 in increasing amounts from
$15,000 to $25,000 195,000 210,000
Series No. 2, 1961 issue, interest at
4-5$ payable semi-annually on May 1
and November 1:
Due May 1 of each year through 1991
in increasing amounts from $15,000
to $25,000 275,000 290,000
Series No. 3, 1968 issue, 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 70,000 80,000
Improvement District No. 3, 1961 issue,
interest payable semi-annually on March 1
and September 1. Containing sinking
fund requirements from 1978 through 1990
at increasing annual amounts from $28,000
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% 65,000 70,000
Due March 1, 1991 at 5% 558,000 558,000
3
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(4) Long-Term Debt, continued
June'30
1977 1976
Improvement District No. 4, 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 4.556 $ 450.000 470.000
Total $ 2.218.000 2.333.000
Principal due within one
year 120,000 115,000
Long-term portion 2.098.000 2,218,000
$ 2.218.000 2.333.000
At June 30, 1977 and 1976 the District had $300,000 of authorized but unissued
construction bonds.
(5) Employee Retirement Flan
The District has contracted with the Public Employees' Retirement System to
provide a retirement plan for all full-time employees. The District's
unfunded prior service liability is approximately $3,000 at June 30, 1977.
The expense for providing retirement benefits under this plan for the year
ended June 30, 1977 was $10,131 and $6,767 for the year ended June 30, 1976.
(6) C ommitment
The District is a joint participant in the Tri-Agency Pipeline Project along with
the City of Oceanside, Vista Irrigation District and the San Diego County Water
Authority. The Water Authority is administering the project and will finance,
a portion of the cost. The purpose of the project is to construct additional
water mains to run from the second aqueduct to the individual participants1
water systems. Management estimates the District's share of the cost to
approximate $1,000,000. Construction is expected to commence in 1978 and be
completed early in 1979.
CARLSBAD MUNICIPAL WATER DISTRICT
Administration and General, Transmission and
Distribution, and Water Treatment Expenses
Years ended June_3_0, 1977 and 1976
Schedule 1
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, conventions and dues
Office supplies and expense
Maintenance, general plant
Printing and reproduction
Bond service costs
Small tools and equipment maintenance
Water conservation
Mi s c ellane ous
Total
Transmission and Distribution:
Supervision, labor and expense
Payroll taxes and employee benefits
Repairs and maintenance, pipelines
Engineering and special services
Meter repairs
Telemetering
Utilities
Total
Water Treatment:
Chlorine
Supervision, labor and expense
Payroll taxes and employee benefits
Power usage
Chlorine equipment and station, maintenance
Laboratory services, testing
1977 1976
52,100
26,685
10,032
13,600
8,016
6,400
8,114
6,597
10,604
5,422
6,795
6,303
1,508
1,010
1,126
8,734
—
173.056
43,582
7,821
23,475
2,377
7,566
1,009
591
86.421
10,525
2,944
559
2,304
2,966
488
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
Total
Schedule 2
CARLSBAD MUNICIPAL WATER DISTRICT
Additions to Plant, Property and Equipment
Year ended June 30, 1977
Pipelines:
La Costa Nueva $ 4,000
La Costa de Harbella 20,000
La Costa Valley #5, Lot 245 15,000
La Costa Pacific Villas 15,000
Palomar Business Park 280,889
Meters and services 46,609
Cross-tie#,D-2 Reservoir 7,460
Valley Street relocation 1,978
Additions to on-going projects:
Squires Dam #2 21
Tri-Agency Pipeline 15,346
South aqueduct connection. 21,233
Calavera Lake water study 496
Santa Fe pressure reducing station 52
Ford Courier 3,007
Utility body-vehicle #22 1,168
Mobile home renovation 6,468
Paving - Squires Dam road and drive 4,727
Office equipment 3,195
Office wiring and fan guards 608
Field machinery and equipment 2.681
$ 449.938