HomeMy WebLinkAbout; ; 1977-78 Accountants Report; 1978-10-12CARLSBAD MUNICIPAL WATER DISTRICT
Accountant's Report
Financial Statements and Schedules
June 30, 1978 and 1977
C. PAUL WALKER
CERTIFIED PUBLIC ACCOUNTANT
7O5 THIRD STREET
OCEANS1DE, CALIFORNIA 92OS4
RECEIVED
DEC 04 1978
WOODoiUL-KUBOTA & ASSOC.
CONSULTING ENGINEERS
CARLSBAD
CARLSBAD MUNICIPAL WATER DISTRICT
Table of Contents
June JO, 1978 and 1977
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
TO5 THIRD STREET
OCEANSIDE, CALIFORNIA 92O54
(T14) 722-T089
The Board of Directors
Carlsbad Municipal Water District:
I have examined the balance sheets of Carlsbad Municipal Water
District as of June 30, 1978 and 1977 an^ "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, 1978 and 1977 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 supple-
mentary 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 12, 1978
Exhibit A
Assets
Current assets:
Cash, including time certificates of deposit
and savings accounts
Accounts receivable
Agricultural rebate receivable
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
CARLSBAD MUNICIPAL WATER DISTRICT
Balance Sheets
June 30, 1278 and 1977
1977
257,456
146,743
18,805
23,900
4,767
26,490
90,887
569,048
560,446
95,943
19,793
4,306
2,878
22,918
90,317
796,601
953,717 752,346
6,451,219 5,090,762
99,799
1,755
106,039
2,105
101,554 108,144
Liabilities, Reserves, Equity and Fund Balances
. Current liabilities (payable from current assets):
Accounts payable
Note payable
Accrued expenses
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)1
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
Total fund balance
Commitments (note 6)
1977
119,055
775
9,975
133,170
102,364
3,528
7,679
131,150
262,975 244,721
20,000 5,000
32,455 31,489
125,000 120,000
177.455 156.489
1,973,000 2,098,000
294,624 178,330
101.554 108,144
396,178 286.474
4,332,444 2,864,234
197,400 174,400
736,086 923.535
933.486 1,097.935
8,075.. 538
See accompanying notes to financial statements.
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Revenue and Expense
Years ended June 30, 1978 and 1977
Exhibit B
Operating revenues:
Water sales
Penalty charges and miscellaneous income
Administrative expense reimbursement
Total operating revenues
Operating expenses:
Cost of water sold
Pumping
Water treatment
Transmission and distribution
Customer accounting
Administrative and general
Total operating expenses
Net operating revenues before
deducting depreciation
Provision for depreciation
Net operating revenues (loss) after
deducting depreciation
Other revenues:
Property taxes
Interest earned
CETA reimbursement
Lease of property
Total other revenues
Other expense: N
Interest on bonds and notes payable
Net revenues
1,247,302
8,785
41,780
1,297,867
820,8733,04612,24667,60729,031
173,828
1,106,631
997,016
7,262
21,505
1,025,783
645,636
3,086
19,786
86,421
25,654
173,056
953,639
191,236 72,144
122,897 113,500
68,339 (41,356)
514,283
85,037
6,171
495,575
56,792
3,793
605,491 556,160
673,830 514,804
96,402 101,983
See accompanying notes to financial statements.
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Reserves, Equity and Fund Balances
Years ended June 30, 1978 and 1977
Exhibit C
1978
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
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
286,474
286,474
(551)
116,294
(6,239)
109,704
396,178
99,799
198,412
97,967
19.6 JJ8.
Equity in
Plant, Property
and Equipment
2,864,234
836,0373,700,271
(122,897)
647,316
105,000
2,754
632,173
4,332.444
1,551,508
167,096
2,418,51151,505
143,824
4.552.444
Fund Balances
Appropriated Unappropriated
174,400 923,535
577,428
174,400 1,500,963
122,897
(647,316)
(105,000)
(2,754)
351
(116,294)
6,239
23,000 (23,000)
23,000 (764,877)
197.400 756>Q86
305,655
126,157
140,362
197,400 94,020
69,892
197.4QQ 756.086
1977
Reserves
124,902
124,902
(23,358)
(351)
189,694
(4,413)
161,572
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
110,0002,276
83,115
828,680
132,509
1,706,931
62,174
133,940
2.864.234
Fund Balances
Appropriated Unappropriated
152,400 777,401
412,821
152,400 1,190,222
113,500
(60,981)
(110,000)
(2,276)
351
(189,694)
4,413
22,000 (22,000)
22,000 (266,687)
174.400 923.535
554,215
100,482
114,067
174,400 85,58169,190
174,400 ' 923,535
See accompanying notes to financial statements.
Exhibit D
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Changes in Financial Position
Years ended June 30, 1978 and 1977
1978 1977
Funds provided:
Net revenues $ 577,428 412,821
Items which do not use working capital:
Depreciation 122,897 113,500
Bond discount amortization 351 351
Working capital provided by operations 700,676 526,672
Consumer contributions for pipelines, meters and
construction 836,037 365,600
Collections on long-term contract receivable 6,239 4,413
Decrease in working capital 65,402 -
$ 1,6J38,354 896,685
Funds used:
Additions to plant, property and equipment 1,483,354 449,938
Current installments and repayment of long-term debt 125,000 120,000
Increase in working capital - 326,747
896,685
Changes in components of working capital:
Increase (decrease) in current assets:
Cash (101,619) 437,361
Receivables 71,295 (41,503)
Inventory 4,142 22,522
(26,182) 418,380
Increase (decrease) in current liabilities:
Accounts payable 16,69! 16,047
Notes payable (2,753) (2,278)
Current installments of long-term debt 5,000 10,000
Matured bonds and unredeemed bond interest coupons 15,966 (l,6l7)
Accrued expenses 2,296 2,299
Deposits 2,020 67,182
39,220 91,633
Increase (decrease) in working capital $ (65,402) 326,747
See accompanying notes to financial statements.
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements
June 30, 1978 and 1977
(1) Summary of Significant Accounting Policies
(a) Aceaunting 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 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) Plant, Property and Equipment
The plant, property and equipment of the District is summarized below:
1978 1977
Work in progress $ 905,516 266,578
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 1,544,073
Pipelines and pumping stations 4,448,646 3,707,583
Chlorination stations 67,378 67,378
Meters and accessories 355,914 261,140
Buildings 161,456 161,456
Machinery and equipment 82,150 79,144
Office fixtures and equipment 39,153 33,781
Total 7,761,308 6,277,955
Less accumulated depreciation 1,310,089 1,187,193
Net plant, property and
equipment $ 6,4'51t219
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.
(4) Long-Term Debt
The interest rates and terms of payment of the District's long-term general
obligation bonded debt at June JO, 1978 and 1977 are as follows:
June JO
1978 1977
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 4% $ 550,000 605,000
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 $25,000 180,000 195,000
Series No. 2, 196! 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 $25,000 260,000 275,000
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 60,000 70,000
Improvement District No. 3» 1961 issue,
interest payable semi-annually on March 1
and September 1. Containing sinking fund
requirements from 1979 through 1990 at
increasing annual amounts from $30,000
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 4.75% 60,000 65,000
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 3
1978 1977
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 4.5% $ 43Q.OQO 450,000
Total
Principal due within one
year 125,000 120,000
Long-term portion 1,973,000 2,098,000
$ 2,098,000 _2f218.000
At June 30, 1978 and 1977 the District had $300,000 of authorized but unissued
construction bonds.
(5) 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's
unfunded prior service liability is approximately $4,955 at June 30, 1978
and $3,000 at June 30, 1977. The expense for providing retirement benefits
under this plan for the year ended June 30, 1978 was $10,866 and $10,131 for
the year ended June 30, 1977-
(6) Commitments
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 participants'
water systems. Management estimates the District's share of the cost to
approximate $1,500,000. Construction commenced in 1978 and is expected to be
completed early in 1979. The District had $600,000 on deposit with the
San Diego County Water Authority as of June 30, 1978, which was to be applied
to the District's share of the cost. Such amount is included in the work in
progress indicated in note 2.
Effective July 1, 1978 the District has entered into an agreement with San Marcos
County Water District and Olivenhain Municipal Water District for the construc-
tion, operation, maintenance, repairs and management of certain transmission
and storage facilities, referred to by the District as the South Aqueduct
Connection. The District's share of the construction cost is estimated to be
$715,000.
4
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(?) Management
In February 1978* after the District's acting general manager had been absent
due to illness, Mr. Jack Kubota assumed responsibilities in managing the
District's operations. Mr. Kubota is a partner in the firm of Woodside,
Kubota and Associates, the District's consulting engineering firm, whose
services fill the District's entire engineering needs. On September 6,
1978 Mr. Kubota was appointed as acting general manager by the District's
Board of Directors. The fees billed to the District by tfoodside, Kubota
and Associates for general engineering, special services, maintenance
programs, capital expenditures and services chargeable to customers or
developers amounted to $63,246 for 1978, including charges for Mr. Kubota's
management services, and $64,026 for 1977-
CARLSBAD MUNICIPAL WATER DISTRICT
Administration and General, Transmission and
Distribution, and Water Treatment Expenses
Years ended June 30, 1978 and 1977
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
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
48,878
27,605
11,186
14,750
16,405
6,350
8,838
6,498
13,047
4,551
7,590
3,353
1,850
979
471
1,477
173,828
39,239
7,965
8,991
6,196
3,687
874
655
67,607
6,478
1,402
330
2,420
853
763
52,100
26,685
10,032
13,600
8,016
6,400
8,114
6,597
10,614
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
M^l
10,525
2,944
559
2,304
2,966
488
Total 12,246 19.786
Schedule 2
CARLSBAD MUNICIPAL WATER DISTRICT
Additions to Plant, Property and Equipment
Year ended June 30, 1978
Pipelines:
Altamira III $ 86,083
Altamira IV 95,6~79
La Costa Estates North 263,000
Spinnaker Hills Unit #1 100,500
Spinnaker Hills Unit #2 41,750
Spinnaker Hills Unit #3 154,250
Meters and services 94,774
Additions to on-going projects:
Squires Dam enlargement 83
South Aqueduct connection 769
Tri-Agency pipeline 634,859
CMWD Headquarters relocation 3,228
Kodak projector 756
Weather station 456
Motorola antenna and line kit, pager, etc. 1,466
Postage meter 2,165
IBM typewriter 820
Vapor recovery system 635
Other office machinery and equipment 1,632
Other field machinery and equipment 449