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HomeMy WebLinkAbout; ; 1981-1982 Costa Real CAFR; 1982-06-30. COMPREHENSIVE ANNUAL FINANCIAL REPORT * OF THE COSTA REAL MUNICIPAL WATER DISTRICT 59.50 El Camino Real Carlsbad, California 92008 PI FQR THE FISCAL YEAR ENDED * June 30, 1982 Prepared by the Controller under the direction of NORMAN M. ALMACK DISTRICT TREASURER COSTA REAL MUNICIPAL WATER DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 1982 TABLE OF CONTENTS INTRODUCTORY SECTION PAGE Transmittal Letter A-1 District Purposes and Powers A-4 District Governing Body A-5 District Staff A-6 San Diego County Water Authority/Metropolitan Water District A-7 FINANCIAL SECTION Auditor's Opinion B-1 FINANCIAL STATEMENTS Balance Sheet B-2 Statement of Revenues and Expenditures B-4 Statement of Equity, Reserves and Fund Balances B-5 Statement of Changes in Financial Position B-6 Notes to Financial Statements B-7 SUPPLEMENTARY DATA Auditor's Letter B-15 Administrative and General, Transmission and Distribution, and Water Treatment Expenses B-16 Improvement Districts' Balance Sheet B-17 Improvement Districts' Statement of Revenues and Expenditures B-18 Improvement Districts' Statement of Equity, Reserves and Fund Balances B-19 Table of Contents (continued) STATISTICAL SECTION PAGE Water Purchases C-1 Cost of Purchased Water C-2 Agricultural Usage C-3 Wholesale Sales C-4 Bonded Debt Service Coverage C-5 Employees and Service Connections C-6 n INTRODUCTORY SECTION Hi COSTK RE/IL /1/1UNICIP/1L 14/ATER DISTRICT 5950 Ei Camino Real. Carisbad, California 92008 Teiepnorie '7M ; ^33-2722 Board of Directors Costa Real Municipal Water District 5950 El Camino Real Carlsbad, California 92008 We're pleased to present the Costa Real Municipal Water District Compre- hensive Annual Financial Report for the Fiscal Year ended June 30, 1982. This report was prepared by the District's Controller. Responsibility for both the accuracy of the data presented and the completeness and fairness of the presentation, including all disclosures, rests with the District. We believe the data presented is accurate in all material aspects; that it is presented in a manner designed to fairly set forth the financial po- sition and results of operations .of the District as measured by the finan- cial activity of its various funds. ACCOUNTING SYSTEM Following the principles of governmental accounting, the District maintains two accounting operations - an Enterprise Fund which is maintained on an accrual basis and Improvement District Funds, which are maintained on a modified accrual basis. By far the most significant of the two is the Enterprise Fund. Within this fund the activities of the utility operations are recorded similar to private business enterprise. The nature of most operations financed and accounted for through an enter- prise fund is such that the demand for the goods and services provided largely determines the appropriate level of revenues and expenses. Increased demand for the goods or services causes a higher level of expenses to be incurred, but also results in a higher level of revenues. Thus, as in com- mercial accounting, flexible budgets typically are better for enterprise fund planning, control, and evaluation purposes than are fixed budgets. The Enterprise Fund of the District, like most proprietary funds, does not adopt a fixed dollar budget. The District does prepare and present for ap- proval of the Board a flexible budget for control of certain expenses, such as payroll, capital improvements from operations, and for planning of cash flows for the coming year. J i ' - ^ , * b'ill Iff IT >''" --' THE REPORTING ENTITY AND ITS SERVICES The funds related to the District included in our comprehensive financial report are controlled solely by the District. The District was created by a vote of the people and the first meeting and election of officers took place on March 22, 1954. The District was originally formed to provide for the procurement, storage, and distribution of Colorado River water and for the use and conservation of ground water in approximately 20,000 acres of the Carlsbad area, which includes most of the City of Carlsbad and some unincorporated areas of San Diego County. The Costa Real Municipal Water District Board of Directors has the sole power to set rates and charges for water and services. The Board may also levy voter approved tax on all taxable property within the District to retire debt incurred in construction of the major transmission, storage, and distribution facilities. GENERAL OPERATING FUNCTIONS Fiscal Year 1981-82 finished with the District continuing its enhancement of an already strong fiscal position. Total assets of the District exceed $13 million and total revenue for the General Fund exceeded Expenses by $655,121. Fiscal Year 1981-82 was an excellent year for the District in terms of earnings on investments, as the combined interest earnings exceeded $400,000. This was a result of active monitoring of available funds combined with very high yields in terms of interest offered by financial institutions. The assessed valuation of property within the District exceeds $1.7 billion, and makes the District the 6th largest in terms of assessed valuation of the 24 member agencies of the San Diego County Water Authority. CAPITAL PROJECTS The District completed the extension of the Tri-Agencies Pipeline into Squires Dam and completed the interconnection at Encina during the Fiscal Year. De- velopment within the District continues, and planning for the water facilities to provide the necessary service is a high priority of the District. YEAR'S OPERATIONS AND FUTURE PROSPECTS The number of service connections served by the District continued to grow, and plans approved and under consideration by local planning authorities in- dicate considerable future needs. In order to address the demands placed upon the District for facilities, the A_0 District is contemplating a thorough review of all charges by the District during the 1982-83 fiscal year. INDEPENDENT AUDIT State code requires an annual audit be made of the books and records of the Costa Real Municipal Water District. This was accomplished this year by the firm of Coopers & Lybrand and their unqualified opinion is included in this report as the Financial Section. This is the first year in which Coopers & Lybrand has been retained by tne District for purposes of audit, and we wish to express our gratitude to the firm for its professionalism, courtesy and promptness. ACKNOWLEDGMENTS We would like to express our appreciation to all members of the District staff that participated in the preparation of this report. We would also like to thank the members of the Board of Directors for their continued support in the planning and implementation of the financial affairs of the Costa Real Municipal Water District. Sincerely, William C. Meadows General Manager Thomas L. Brammell, C.P.A. Controller PI TLB:fw A-3 Ill DISTRICT PURPOSES AND POWERS The Costa Real Municipal Water District was originally known as the Carlsbad Municipal Water District and was formed March 22, 1954, to apply to the San Diego County Water Authority and the California Metropolitan Water District for eligibility to receive Colorado River Water. The District continues today serving the needs of the citizens of Carlsbad and may levy taxes, issue bonds and set fees and rates necessary to continue to provide the services set forth in the original design of the District. The Board of Directors of the District sets rates and charges for water. These rates are determined by the needs of the District for operation and maintenance, principal and interest on obli- gations, and system replacement and expansion. A-4 DISTRICT GOVERNING BODY The Costa Real Municipal Water District has a five member Board of Directors, elected by Division by popu^lar vote. The members of the Board are: Donald A. MacLeod (term 1/1/81-1/1/85) Mr. MacLeod is President of the Board. Margaret J. Bonas (term 1/1/79-1/1/83, reelected to a term of 1/1/83-1/1/87) Mrs. Bonas is Vice President of the Board. Allan 0. Kelly (term 1/1/79-1/1/83, reelected to a term of 1/1/83-1/1/87) Mr. Kelly is Assistant Secretary and Assistant Treasurer of the Board. Fred W. Maerkle (term 1/1/81-1/1/85) Mr. Maerkle is Secretary of the Board Norman M. Almack (term to 1/1/83, elected to a term of 1/1/83-1/1/87) Mr. Almack is Treasurer of the Board. A-5 DISTRICT STAFF The General Manager of the District is appointed by the Board of Directors. The General Manager appoints all other staff. Engineering and Legal Counsel are provided to the District by consultants, and utilized on an as-needed basis. William C. Meadows, General Manager Mr. Meadows joined the staff in 1980, after gaining experience from private practice as a consultant to special districts and employment in several special districts. Thomas L. Brammell, CPA-Controller Mr. Brammell joined the staff in 1982. Mr. Brammell is a certified public accountant and has extensive background in government. Kurt B. Musser, Superintendent- Mr. Musser joined the staff in 1973, and has risen through the various levels of field operations to his present position. Jack Y. Kubota, Engineer Mr. Kubota provides the engineering services to the District on a contractual basis. Mr. Kubota is the local partner in the firm of Woodside/Kubota and Associates. Paul S. Swirsky, Legal Counsel Mr. Swirsky provides the legal counsel to the District on a contractual basis. Mr. Swirsky is in private practice and is the founding partner of the firm of Swirsky and Sauer. A-6 SAN DIEGO COUNTY WATER AUTHORITY METROPOLITAN WATER DISTRICT The Costa Real Municipal Water District is a member of the San Diego County Water Authority which is a member of the Metropolitan Water District of Southern California. The San Diego County Water Authority encompasses 896,726 acres and provides the sole source of water to Costa Real. Costa Real is one of 24 member agencies to the County Water Authority. The Metropolitan Water District of Southern California is the source of water to the County Water Authority. The Metropolitan supplies a blend of Colorado River water and State Project water. The member agencies of the County Water Authority use approxi- mately 28 percent of Metropolitan supplies.. FINANCIAL SECTION le COSTA REAL MUNICIPAL WATER DISTRICT REPORT ON EXAMINATION OF FINANCIAL STATEMENTS For The Year Ended June 30, 1982 Coopers &Lybrand certified public accountants To the Board of Directors Costa Real Municipal Water District We have examined the balance sheet of Costa Real Municipal Water District as of June 30, 1982, and the related statements of revenues and expenditures, equity, reserves and fund balances and changes in financial position for the year then ended. Our 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 we considered necessary in the circumstances. In our opinion, the financial statements referred to above present fairly the financial position of Costa Real Municipal Water District as of June 30, 1982, and the results of its operations and the changes in its financial position for the year then ended, in conformity with generally accepted account- ing principles applied on a basis consistent with that of the preceding year. San Diego, California August 26, 1982 B-1 I ff 1 • 1 B 1 • I 1 I » 1 r • fill f I i 1 • • • I • • • • • • « • » • COSTA REAL MUNICIPAL WATER DISTRICT BALANCE SHEET June 30, 1982 ASSETS General Fund Improvement District Funds Total (Memorandum Only) Current assets: Cash, principally certificates of deposit Accounts receivable, less allowance of $13,140 Inventories (Note 1) Other current assets Total current assets Current restricted assets: Cash, principally certificates of deposit Restricted assets: Cash, principally certificates of deposit Long-term contract receivable (Note 3) Total restricted assets Utility plant (Notes 1 and 2) Property and equipment, at cost, net of accumulated depreciation Construction in progress Total utility plant Other assets $1,417,980 286,220 128,783 43,519 1 ,876,502 Total 4,214,329 224,510 4,438,839 7,740 $6,323,081 $1,310,438 294 ,140 72,381 366,521 5,469,312 5,469,312 702 $7,146,973 $1,417,980 286,220 128,783 43,519 1 ,876,502 1,310,438 294,140 72,381 366,521 9,683,641 224,510 9,908,151 8,442 $13,470,054 The accompanying notes are an integral part of the financial statements. B-2 till • i I i • 1 C I • I II II i I i i i I 11 > > ^ ^ II II I i II COSTA REAL MUNICIPAL WATER DISTRICT BALANCE SHEET June 30, 1982 LIABILITIES AND EQUITY, RESERVES AND FUND BALANCES General Fund Improvement District Funds Total (Memorandum Only) Current liabilities (payable from current assets): Accounts payable Current portion of notes payable Accrued expenses, principally interest Construction and customer meter deposits Total current liabilities (payable from current assets) Current liabilities (payable from restricted assets): Current portion of bonds payable Accrued interest and unredeemed bond coupons Total current liabilities (payable from restricted assets) Long-term debt: Bonds payable (Note 4) Notes payable (Note 5) Total long-term debt Equity, reserves and fund balances: Equity in utility plant Reserve for sinking fund Other reserves Unappropriated fund balance Total equity, reserves and fund balances Total $ 392,793 253,865 47,604 140,407 834 ,669 382,897 382,897 4,073,163 1,032,352 5,105,515 $6,323,081 $ 140,000 27,458 167,458 1,453,000 1,453,000 3,849,777 294,140 743,804 638,794 5.526,515 $7,146,973 392,793 253,865 47 ,604 140,407 834,669 140 ,000 27,458 167 ,458 1,453,000 382,897 1,835,897 7,922,940 294,140 743,804 1,671,146 10,632,030 $13.470,054 The accompanying notes are an integral part of the financial statements. B-3 COSTA REAL MUNICIPAL WATER DISTRICT STATEMENT OF REVENUES AND EXPENDITURES For The Year Ended June 30, 1982 Operating revenues: Water sales Miscellaneous revenue Total operating revenues Ope?ating expenditures: Cost of water sold Pumping Water treatment Transmission and distribution Customer accounting Administrative and general Reimbursement agreement General Fund $2,435,201 119,800 2,555,001 1,564,232 1,537 n,4l8 241,583 73,840 402,025 90,580 Total operating expenditures 2,385,215 Net operating revenues before deducting depreciation 169,786 Provision for depreciation 83,236 Net operating revenues after deducting depreciation 86,550 Other financing sources (uses): Property taxes 219,704 Interest earned 382,709 Lease of property 11,600 Interest on bonds and notes payable (45,442) Total other financing sources (uses) 568,571 Excess of revenues and other sources over expenditures and other uses $655,121 Improvement Total Districts (Memorandum Only) $2,435,201 119,800 $151,127 (151,127) 282,844 26,740 (75,565) 234,019 $82,892 2,555,001 1,564,232 1,537 11,418 241,583 73,840 402,025 90,580 2,385,215 169,786 234,363 (64,577) 5,02,548 409,449 11,600 (121,007) 802,590 $738,013 The accompanying notes are an integral part of the financial statements. B-4 i I I I 1 I I 1 I I f I 1 I t I I I f I I I I I 1 1 I i I 1 I I I I I i I 1 COSTA REAL MUNICIPAL WATER DISTRICT STATEMENT OF EQUITY, RESERVES AND FUND BALANCES June 30, 1982 Revenues: Contributed utility plant Excess of revenues and other sources over expenditures and other uses Transfers: Depreciation, an expense not requiring a current outlay of funds Bonds redeemed Current portion bonds payable Sinking Fund* Net transfers to reserves Excess of revenues over transfers Fund balance, beginning of year as previously reported Reclassification of beginning balances to conform to current year financial statement presentation: Bonds authorized - unissued which were previously shown as an offset to equity Notes payable Prior period adjustments: Contributed utility plant not recorded In prior year Expenses not recorded In prior year Adjusted fund balances, beginning of year Fund balances, end of year General Fund $1,050,796 Equity in Utility Plant Improvement Total Districts Funds (83,236) $ (151,127) 95,000 (875) 967.560 (57.002) 1,768,285 3,987,900 346,335 1,040,000 (49.017) (646,209) 565,088 3,105.603 3,906.779 $4.073.163 $3.849.777 (Memorandum Reserve for Only) Sinking Fund $1,050,796 (234,363) 95,000 (875) 910.558 5,756,185 (299,874) 1,040,000 565,088 (49.017) 7.012.382 $7.922.940 $ 26,740 26.740 267,400 267.400 $294,140 Other Reserves $140,000 36,842 176.842 General Fund Unappropriated Fund Balance ImprovemerTE Total Districts Funds 566,962 83,236 151,127 (105,000) (140,000) (26,740) 2,222 (1,194) (398,168) (1,040,000) 11,532 (27,083) 699,233 293,995 $743,804 $1,032,352 674.293 $638.794 The accompanying notes are an Integral part of the financial statements. B-5 (Memorandum Only) $ 655,121 $ 82,892 $ 738,013 234,363 (105,000) (140,000) (26,740) 2,222 738.357 (35.499) 702,858 568,156 1,747,714 (24,940) 1,722,774 301,065 (1,040,000) 11,532 (27,083) 968,288 $1.671,146 COSTA REAL MUNICIPAL WATER DISTRICT STATEMENT OF CHANGES IN FINANCIAL POSITION For The Year Ended June 30, 1982 (General Fund Improvement Districts Funds Sources of working capital: From operations: Excess of revenues and other sources over expenditures and other uses Charges to operations not $ 655,121 $ 82,892 Increases (decreases) in conponents of working capital: Cash Investments Accounts receivable Inventory Other current assets Restricted cash Accounts payable Current portion of notes payable Accrued expenses Construction and customer meter deposits Cerent portion of bonds payable $ (145,164) 597,060 (54,113) (12,400) 11,238 (170,265) (3,354) 7,467 $102,562 611 (15,000) $ 256,761 $ 88,173 26,292 Total (Memorandum Only) $ 738,013 Depreciation Working capital provided by operations 83,236 738,357 151,127 234,019 234,363 972,376 Cumulative effect of prior period adjustment Contributed utility plant Net transfers to reserves Collection of long-term contract receivable 1,050,796 565,088 38,189 8,363 565,088 1,050,796 38,189 8,363 Total sources of working capital 1,789,153 845,659 2,634,812 Uses of working capital: Additions to utility plant (Current maturity of long-term debt Cumulative effect of prior period adjustments Addition to bond sinking fund Increase in other assets 1,204,498 255,586 64,568 7,740 575,746 155,000 26,740 1,780,244 410,586 64,568 26,740 7,740 Total uses of working capital 1,532,392 757,486 2,289,878 Increase in working capital $ 256,761 $ 88,173 $ 344,934 $ (145,164) 597,060 (54,113) (12,400) 11,238 102,562 (170,265) (3,354) 8,078 26,292 (15,000) $ 344,934 The accompanying notes are an integral part of the financial statements. B-6 COSTA REAL MUNICIPAL WATER DISTRICT NOTES TO FINANCIAL STATEMENTS Hi 1. Summary of Significant Accounting Policies: The accounting policies of the Costa Real Municipal Water District (District) conform to generally accepted accounting principles as applicable to governmental en- tities. The accounts of the District are organized on the basis of funds, each of which is considered a separate set of self-balancing accounts that comprise its assets, liabilities, equity, reserves and fund balances, revenues, and expenditures, as appropriate. Resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The District maintains two fund types as follows: General Fund The General Fund is used to account for the major portion of District operations which are financed and operated in a manner similar to that of a private business enterprise. The intent of the District is to establish water user rates sufficient to provide for payment of general District operations and maintenance expenses as well as required annual debt service. Utilizing the full accrual basis of accounting, revenues are recognized when they are earned and expenses are recognized when they are incurred. Unbilled water charges receivable are recorded at the end of each reporting period. Improvement District Funds Improvement Districts are used to account for the financing of public improvements as set forth in original bond covenants as established by voter approval. The District accounts for the activity related to each improvement district's debt and construction reserves within separate improvement district funds. All improvement district funds utilize the modified accrual basis of accounting. Revenues are recognized when they become measurable and available to finance expenditures of the current period. Expenditures are recognized when the related liability is incurred. Continued B-7 COSTA REAL MUNICIPAL WATER DISTRICT NOTES TO FINANCIAL STATEMENTS, Continued 1. Summary of Significant Accounting Policies, Continued: Inventories Inventories of materials are stated at weighted moving average cost. Inventory of water is stated on a lower of cost (last in, first out) or market basis. Utility Plant in Service Utility plant in service is stated at cost or, if donated by developers, at engineeMng estimates of fair market value. Expenditures for improvements and betterments (including labor and overhead) are capitalized. Main- tenance, repairs and minor improvements are expensed as incurred. Depreciation is computed using the straight-line method over the service lives of the respective assets. Continued B-8 COSTA REAL MUNICIPAL WATER DISTRICT NOTES TO FINANCIAL STATEMENTS, Continued 2. Utility Plant: A summary of utility plant and the related accumulated depreciation as of June 30, 1982 follows: (}eneral Fund Utility plant: Cost of participation - San Diego Water Authority $ Land and easements Reservoirs and dams Pipelines and pumping stations Chlorination stations Meter and accessories Buildings Machinery and equipment Office fixtures and equipment (Construction in progress Less accumulated depreciation 33,174 16,462 142,451 3,497,809 9,555 490,230 170,657 144,879 97,711 4,602,928 224,510 388,599 Improvement Districts Funds $ 252,070 1,510,196 5,100,379 56,730 183,310 3,675 7,106,360 Total (Memorandum Only) ^ 33,174 268,532 1,652,647 8,598,188 66,285 673,540 170,657 148,554 97.711 11,709,288 224,510 4,827,438 7,106,360 11,933,798 Net utility plant $4,438,839 1,637,048 $5,469,312 2,025,647 $ 9,908,151 Continued B-9 COSTA REAL MUNICIPAL WATER DISTRICT NOTES TO FINANCIAL STATEMENTS, Continued 2. Utility Plant, Continued: 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 in the San Diego County Water Authority and related land and easements are not being depreciated. 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 preceding fiscal year. The contract contains no interest provision. Continued B-10 4. i i 11 t 1 II 1 1 1 1 t 1 1 lill 1 i 1 lill lill 1 1 1 COSTA REAL MUNICIPAL WATER DISTRICT NOTES TO FINANCIAL STATEMENTS, Continued Long-term Debt - Bonds Payable: Bonds payable at June 30, 1982 comprise the following individual Issues: • Improvement District 1 Improvement District 2 Series 1 Improvement District 2 Series 2 Improvement District 2 Series 3 Improvement District 3 Improvement District 4 Total Date of Issue Coupon Interest rate Interest payment dates Principal payment dates 1957 1958-Serles 1 3.85 to 4.0JI 5.0Jt 3/1 & 9/1 3/1 & 9/1 3/1 3/1 1961-Serles 2 4.5> 5/1 & 11/1 5/1 1968-Serles 5.0* 1/1 & 7/1 7/1 3 1961 4.75 & 5.0* 3/1 & 9/1 3/1 1961 3.5 & 4.0» 6/1 & 12/1 12/1 Authorized Authorized-unissued $1,250,000 (100.000) $350,000 $425,000 $125,000 $1,000,000 (200,000) $690,000 $3,840,000 (300,000) Original issue Redeemed as of 6/30/82 1,156,000 (830,000) 350,000 (230.000) 425,000 (225.000) 125,000 (105.000) 8oo;ooo (197.000) 690,000 (360,000) 3,540,000 (1,947,000) Outstanding as of 6/30/82 320,000 120,000 200,000 20,000 603,000 330,000 1,593,000 Less current portion (65,000) (15.000) (20,000) (10,000) (5,000) (25,000) (140,000) Portion due after one year $255,000 $105^000 $180,000 $10j^000 $598^000 $305,000 $1,453,000 Minimum annual principal payments for retirement of outstanding bonds as of June 30, 1982 are as follows: Fiscal years ending June 30, * 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 $ 65,000 70,000 70,000 70,000 45,000 $ 15,000 20,000 20,000 20,000 20,000 25,000 $ 20,000 20,000 20,000 20,000 20,000 25,000 25,000 25,000 25,000 $10,000 10,000 $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 563,000 $ 25,000 30,000 30,000 30,000 30,000 35,000 35,000 35,000 40,000 40,000 $ 140,000 155,000 145,000 145 ,000 120,000 90,000 65,000 65,000 628,000 40,000 Total $320,000 $120,^000 $200^000 $20^00 $603^000 $330,000 $1,593,000 I I 1 Continued B-11 COSTA REAL MUNICIPAL WATER DISTRICT NOTES TO FINANCIAL STATEMENTS, Continued 4. Long-term Debt - Bonds Payable, Continued: A sinking fund was established in conjunction with the issuance of bonds for Improvement District No. 3. Board Resolution No. 128 prescribes the establishment of the sinking fund for the payment of debt as it becomes due. 5. Long-term Debt - Notes: June 30, 1982 Note payable to bank, payable $60,000 semi-annually plus 5- 7/8jt interest. $1.80,000 Note payable to bank, payable $50,000 semi-annually plus 6- 1/4jt interest. 250,000 Note payable to San Marcos County Water District, payable $20,705 annually plus 7-1/456 interest. 165,636 Note payable collateralized by computer, payable $1,097 monthly including principal and discount interest 41,126 636,762 Less principal due in one year 253,865 Total $382,897 Annual principal payments on long-term notes during the five years after June 30, 1982 are as follows: 1983 $253,865 1984 103,865 1985 83,865 1986 20,705 1987 20,705 Continued B-12 COSTA REAL 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. Contributions to the Plan are based on a percentage of the employee's salary which is deter- mined by the Public Employees' Retirement System. The District's unfunded prior service liability is approxi- mately $13,000 at June 30, 1982. The expense for providing retirement benefits under this plan for the year ended June 30, 1982 was $28,751. 7. Vacation Pay and Sick Pay: The cost of vacation and sick pay are recorded when dis- bursed. At June 30, 1982, employees of the District had accumulated earned vacation aggregating approximately $9,575 for which no accrual has been made. 8. Reserves Sinking Fund - This reserve was established in conjunction with the issuance of bonds for Improvement District No. 3. Board Resolution No. 128 prescribes the establishment of the sinking fund for the payment of debt as it becomes due. The sinking fund was funded in fiscal 1982 by proceeds from property tax and transfers of interest from the General Fund. Fully Reserved Assets - The District carries the long-term accounts receivable as an asset in the improvement district funds and establishes corresponding reserves. Debt Service - These reserves were established in con- junction with the various bond issues. The reserves are restricted to the payment of current bond service requirements. Construction - The original bond issues of the District were for the purpose of construction of facilities. To date, through various reimbursements to these construction funds there remains $530,722 reserved for construction purposes. Continued B-13 COSTA REAL MUNICIPAL WATER DISTRICT NOTES TO FINANCIAL STATEMENTS, Continued 9. Prior Period Adjustments: Utility plant in the amount of $565,088 was contributed in fiscal 1981 and not recorded. Proper treatment is to increase the utility plant account as well as the related equity accounts. Consequently, there is no effect on fiscal 1981 net income for the contribution. Certain depreciation and bond interest expense were not recorded during fiscal 1981. Had these amounts been properly recorded, general fund excess of revenues and other sources over expenditures and other uses would have been reduced by $76,100 for the year ended June 30, I98I. 10. Total Columns On Statements: Total columns on the statements are captioned "Memorandum Only" to indicate that they are presented only to facili- tate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles, nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. B-14 To the Board of Directors Costa Real Municipal Water District Our examination was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The infor- mation on schedules one through four is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the examination of the basic financial statements, and, accordingly, we express no opinion on it. San Diego, California August 26, 1982 B-15 Schedule 1 COSTA REAL MUNICIPAL WATER DISTRICT ADMINISTRATIVE AND GENERAL, TRANSMISSION AND DISTRIBUTION, AND WATER TREATMENT EXPENSES Year Ended June 30, 1982 (Unaudited) Administrative and general: Salaries Engineering and special services Professional fees Public information Directors fees Utilities, telephone and postage Auto and maintenance Insurance Meetings, conventions and dues Office supplies and expense Bad debt expense Loss on sale of excess inventories Small tools and equipment maintenance Water conservation Programming and computer expense Total Transmission and distribution: Labor and expense Repairs and maintenance - pipelines Engineering and special services Meter repairs Telemetering Supplies Equipment rental New meter service Total $112,703 78,672 44,446 5,308 11,247 27,206 16,778 15,581 13,798 19,116 13,140 9,180 3,507 23,429 7,914 $402,025 $113,930 31,035 59,361 8,497 1,445 1,670 1,206 24,439 $241,583 Water treatment: Chlorine Labor and expense Chlorine equipment and station - maintenance Laboratory services - testing Total $ 4,160 3,700 364 3,194 $11,418 B-16 C... REA_ .,NICL..._ WAT_.. _ISTR.-.^ IMPROVEMENT DISTRICTS' BALANCE SHEET For the Year Ended June 30, 1982 (Unaudited) .ule ^ ASSETS Current restricted assets: •Cash, principally certificates of deposit Restricted assets: Cash, principally certificates of deposit Long-term accounts receivable Utility Plant: Water Transmission and Distribution Facility Less accumulated depreciation Net utility plant Other assets: Unamortized bond discount Total other assets Total assets LIABILITIES Current liabilities: Current portion of bonds payable Accrued interest and unredeemed bond coupons Total current liabilities Long-term debt, bonds payable Total long-term debt Equity, reserves and fund balances: Equity in utility plant Reserve for sinking fund Reserves Unappropriated fund balance Total equity, reserves and fund balances Total improvement )lstrlct #1 Improvement District #2 Improvement District #3 Improvement District #4 Total $249,825 $ 566,004 $ 356,857 $137,752 $1,310,438 72,381 294,140 294,140 72,381 322,206 566,004 650,997 137,752 1 ,'676,959 1,074,916 439.472 4,191,056 691,637 1,108,850 307,796 731,540 198,145 7,106,362 1,637,050 635,444 3,499.419 702 801.054 533.395 5,469.312 702 702 702 $957,650 $4,066,125 $1,452,051 $671,147 $7,146,973 $ 65,000 $ 45,000 $ 5,000 $ 25 ,000 $ 140,000 4,371 6,773 10,830 5,484 27,458 69,371 51,773 15,830 30,484 167,458 255,000 295,000 598,000 305,000 1,453,000 255,000 295,000 598,000 305,000 1,453,000 315,444 137,380 180,455 3,122,887 433,165 163,300 198,050 294,140 148,259 197.772 213,396 25,000 97,267 3,849,777 294,140 743,804 638,794 633,279 3,719,352 838,221 335.663 5,526,515 $957,650 $4,066,125 $1,452,051 $671,147 $7,146,973 B-17 I I I I f I I I i I I I I I I i I I I ] I I ! I I 11 I I E I I I I I COSTA REAL MUNICIPAL WATER DISTRICT IMPROVEMENT DISTRICTS' STATEMENT OF REVENUES AND EXPENDITURES For the Year Ended June 30, I982 (Unaudited) Schedule 3 Improvement Improvement Improvement Improvement District #1 District #2 District »3 District #4 Operating expenditures: Depreciation Net operating loss Other financing sources (uses): Property taxes Interest income Interest Total other financing sources (uses) Excess of other sources over expenditures and other uses $20,413 (20,413) 85,085 (15,034) 70.051 $49,638 $99,175 (99,175) 51,320 (18,585) 32.735 $(66,440) $ 21,543 (21,543) 101,319 26,740 (29,462) 98,597 $77,054 $ 9,996 (9,996) 45,120 (12,484) 32,636 $22,640 Total $151,127 (151,127) 282,844 26,740 (75,565) 234,019 $8.2,892 B-18 COSTA REAL MUNICIPAL WATER DISTRICT IMPROVEMENT DISTRICTS* STATEMENT OF EQUITY, RESERVES AND FUND BALANCES For the Year Ended June 30, 1962 (Unaudited) Schedule 4 Equity in Utility Plant lH?)rovemen€ laftravment laproveoeni laproveaenT Resarves Improvenent lnprov«w»rE Ia|NX>veiBenE ImprovenanT' District »1 Dlatrict #2 Diatrict »3 District #4 Total District #1 District »2 District #3 District »4 Total Add: Contributed utility plant Net reserves Transfers - increases (decreases): DeiM^ciaticx) charged to net revalues BoiKis retired Current portiai bonds payable Net transfer to reserves Transfer to sir fund Fund bala*^ beginmrig year as previously reported Reclassification of beginning balances to oonfom to current year financial atatemait presentation: Bonds authorized - unissued vhich were previously abomi as w offset to equity Prlcr pericxl adjustments: Contributed utility plant not recorded in prior year Expenara not recorded in prior year Adjusted belanoe, June 30, 1981 Balanoe June 30, 1982 $(20,413) $ (99,175) $(21,543) 60,000 30,000 5,000 275,857 $315,444 (169) (82) (352,853) (328,433) 565,088 3.192.231 •3.122,887 214.675 $198,050 $ (9,996) (624) 39.587 (69.344) (16.625) (10,620) 275,857 2,979,996 543,108 188,939 $,077 224,016 $ (151,127) 95,000 (875) (57,002) 3,987,900 3,906,779 $ 65,000 $ 45,000 $ 5,000 (8,450) 45,292 (646,209) 100,000 565,088 $213,396 $3,849,777 180,830 $237,380 388,165 $433.165 56.550 45,000 50,292 80,830 389,359 97,967 (1,194) 200,000 297,967 $348,259 $25,000 $ 140,000 36,842 25,000 176.842 568,156 298,806 Sinking Fund Unappropriated Fund Balance Improvement Improvement Improvement Improvement Improvement District »3 District #1 District #2 District »3 Diatrict #4 $ 26,740 26,740 267 ,400 866,962 26T,400 $25,000 $1.043.80tt $294,140 $ 49,638 20,413 (60,000) (65,000) 8,450 (46,499) 208,741 16,240 224.981 $178,482 $(66,440) $ 77,054 99,175 (40,000) (45,000) (52.265) 383,369 214,036 $161,771 21,543 (5,000) (5,000) (6,228) (26,740) 55,629 (169,333) (179,986) 324,624 144.638 $200,267 $22,640 9,996 (25,000) 7,636 115,638 (25,000) 90,638 $98,274 Total $ 82,892 151,127 (105,000) (140,000) 2,222 (26,740) (35,499) (24,940) 699,233 674,293 $638,794 B-19 COSTA REAL MUNICIPAL WATER DISTRICT STATISTICAL SECTION The following data is presented in order for the reader to get a better understanding of the District and its operations. The information is taken from various sources and while appropriate efforts were taken to ensure that the material provided is as accurate as possible, the information was not audited, and is solely the responsibility of the District staff. COSTA REAL MUNICIPAL WATER DISTRICT WATER PURCHASES (ACRE FEET) MONTH 77-78 78-79 79-80 80-81 81-82 Average July 1,156.4 1,250.7 1.386.0 1,350.2 1.441.6 1.317.3 August 1,113.0 1,353.2 1.373.8 1.621.6 1.660.2 1.424.4 September 969.1 1,240.5 1.467.2 1.448.0 1.509.4 1.326.8 October 1.150.5 1,216.9 1.344.6 1.303.4 1.422.4 1.287.6 November 957.3 832.2 972.1 1.105.3 1.187.6 1.010.9 December 668.1 623.0 995.7 937.0 736.0 792.0 January 376.9 488.9 593.8 770.0 518.1 549.5 February 399.4 409.5 472.5 607.1 587.3 495.2 March 428.2 582.7 512.6 594.3 633.7 550.3 April 598.1 784.1 967.3 952.5 793.5 819.1 May 1,047.7 1,127.5 891.7 1,265.2 1,134.4 1,093.3 June 1,146.6 1.253.1 1.245.3 1.353.0 1,091.2 1.217.8 Annual 10,011.3 11.162.3 12.222.6 13.307.6 12.715.4 11.883.8 The Costa Real Municipal Water District purchases all of its water from the San Diego County Water Authority. C-1 COSTA REAL MUNICIPAL WATER DISTRICT COST OF PURCHASED WATER (IN $1,000) MONTH 77-78 78-79 79-80 80-81 81-82 Average July 92.5 114.6 164.9 178.2 198.9 149.8 August 89.1 123.9 163.5 214.1 229.1 163.9 September 77.3 113.6 174.6 191.1 208.3 153.0 October 92.0 111.5 160.0 172.0 196.3 146.4 November 76.6 76.2 115.7 145.9 163.9 115.7 December 53.4 57.1 118.5 123.7 101.6 90.9 January 30.2 47.5 71.5 101.6 71.5 64.5 February 32.0 • 39.8 57.2 80.1 81.0 58.0 March 34.2 56.6 62.0 78.4 87.4 63.8 April 47.8 76.1 117.0 125.7 114.3 96.2 May 83.8 109.5 107.9 167.0 156.4 124.9 June 91.7 121.7 150.7 178.6 150.6 138.7 Annual 800.9 1,048.0 1,463.8 1.756.6 1,759.4 1.365.8 The total cost of purchased water to the District was up only slightly in 1981-82, This is a reflection of the reduction in water purchased in 1981-82 of 592.2 acre feet, a 5% decrease from 1980-81. This decrease did not offset the increase in price of water to the District. C-2 COSTA REAL MUNICIPAL WATER DISTRICT AGRICULTURAL USAGE (ACRE FEET) m MONTH 77-78 78-79 79-80 80-81 81-82 Average -July 528.1 497.2 508.5 434.8 449.7 483.7 IH August 374.8 578.0 608.1 658.2 701.9 584.2 September 561.6 488.4 728.8 630.5 689.8 619.9 m October 426.6 523.0 539.7 539.6 609.9 527.8 -November 397.5 227.9 387.0 484.9 461.8 391.9 -December 155.6 167.5 348.5 278.1 155.3 221.0 January 20.8 78.5 82.3 253.0 82.2 103.4 z February 29.6 59.6 52.0 125.7 131.9 79.8 March 64.4 91.9 100.4 113.9 118.2 97.8 ma April 138.4 267.4 54.0 358.4 113.2 186.3 May 308.6 403.1 60.7 345.2 322.8 288.1 m June 304.5 349.8 350.7 392.5 308.3 341.2 Annual 3.310.5 3.732.3 3.820.7 4,614.8 4.145.0 3.925.1 COSTA REAL MUNICIPAL WATER DISTRICT WHOLESALE SALES (ACRE FEET) MONTH 79-80 80-81 81-82 Average m July 577.8 630.6 634.2 614.2 August 591.1 619.8 621.5 610.8 IR September 587.8 544.5 547.1 559.8 October 474.3 460.7 482.2 472.4 November 379.5 445.3 442.5 422.5 December 400.7 359.8 330.9 363.8 -January 299.7 322.5 298.0 306.8 -February 250.3 311.0 290.9 284.1 March 295.9 317.0 331.3 314.8 April 389.2 454.3 399.6 414.4 May 433.5 541.9 467.4 481.0 -June 558.6 586.8 498.7 548.1 Annual 5.238.4 5.594.2 5.344.3 5,392.3 C-4 COSTA REAL MUNICIPAL WATER DISTRICT BONDED DEBT SERVICE COVERAGE LAST FIVE YEARS (IN $1,000) Operating Revenues Operating Expenses Net Operating Revenue before Depreciation Depreciation Net Operating Revenue (Loss) after Depre- ciation Other Revenues Other Expenses Net Revenues Net Revenue Available for Debt Service Ex- clusive of Depreci- ation and Interest on Bond Debt Annual Bond Debt Service Coverage Factor 77-78 1.298 1.107 191 123 68 605 96 577 796 201 4.0 78-79 1.556 1.442 114 122 (8) 538 118 412 625 211 3.0 79-80 1.985 1.692 293 153 140 658 158 640 878 215 4.1 80-81 2.473 2.101 372 179 193 747 145 795 1.056 212 5.0 81-82 2.555 2.385 170 235 (65) 924 121 738 1.048 206 5.1 C-5 COSTA REAL MUNICIPAL WATER DISTRICT EMPLOYEES AND SERVICE CONNECTIONS Employees Management Clerical Field Total 77-78 2.0 3.0 5.0 10.0 78-79 2.0 3.0 5.0 10.0 79-80 2.0 3.0 5.0 10.0 80-81 2.0 3.0 6.0 11.0 81-82 2.0 3.5 6.0 11.5 Metered Services (Retail) 2500 est. 2900 est. 3050 est. 3400 est. 3438 Metered Services per Employee Management Clerical Field 1250 833 500 1450 967 580 1525 1017 610 1700 1133 567 1719 982 573 C-6