HomeMy WebLinkAbout; ; 1984-1985 Costa Real CAFR; 1985-06-30COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
COSTA REAL MUNICIPAL WATER DISTRICT
5950 El Camino Real
Carlsbad, Califomia 92008
FOR THE FISCAL YEAR ENDED
June 30, 1985
Prepared by the Controller
Under the Direction of
SUSAN M. HAASL
DISTEaCT TE^EASURER
COSTA REAL MUNICIPAL WATER DISTEUCT
COi^lPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 1985
TABLE OF CONTENTS
INTRODUCTORY SECTION
PAGE
Transmittal Letter A-1
District Purposes and Powers A-4
District Officials A-5
District Organizatd.on Chart A-6
San Diego County W^ter Authority A-7
Metropolitan W^ter District A-8
FINANCIAL SECTION
Auditor's Opinion B-1
FINANCIAL STATEMENTS
Balance Sheet B-2
S1:ateroent of Revenues and Es^senditures B-4
Sliatement of Fund Equity B-5
Statement of Changes in Financial Position B-6
Notes to Financial Stateaments B-7
SUPPLEMENTARY DATA
Auditor's Letter B-15
Administrative and General, Transmission and
Distribution, and Water Treatment E3q)enses B-16
Iirprovement Districts' Balance Sheet B-17
Iirprovement Districts' Statement of
Revenues and E2q)enditures B-18
Improvement Districts' Statement of Fund Equity B-19
Table of Contents (cantdjiued)
STATISTICAL SECTION
PAGE
Water Purchases C-1
Cost of Purchased Water C-2
Agricultural Usage C-3
Debt Service Coverage C-4
Ehployees C-5
11
INTRCBUCTORY SECTION
<?'^X% Costa Real
Municipal Water District
"^Ij^^J^^ 5950 El Camino Real, Carlsbad, CA 92008
Octobers, 1985 Telephone: (619) 438-2722
Board of Directors
Costa Real Municipal Watier District
5950 El Camino Real
Carlsbad, California 92008
We're pleased to present the Costa Real Municipal Water District
Ccnprehensive Annual Financial Report for the Fiscal Year ended
June 30, 1985.
Hiis r^»rt ^nas pr&paxed by the District's Controller. Respons-
ibility for both the accuracy of the data presented and the
completeness cuid fairness of the presentation, including all
disclosures, rests with the District. We believe tihe data
presented is accurate in all material aspects, and that, it is
presented in a manner designed to fairly set forth the financial
position and results of operations of the District as measured by
the financial activity of its various funds.
ACCOUNTING SYSTEM
Following the principles of govemmental accounting, the District
mcdntains two accounting operations - an Enterprise Fund v^ch is
maintained on an accrual basis and Improvement District Funds,
which are maintained on a. modified accrual basis. By far the
roost significant of t±e two is the Qiterprise Fund. Within this
fund the activities of the utility operaldons are recorded sim:-
ilar to private business enterprise.
Ihe nature of most operations financed and accounted for through
an enterprise fund is such tJiat the demand for the goods and
services provided largely determines the approprdlate level of
revenues and expenses. Increased demand for the goods or ser-
vices causes a higher level of expenses to be incurred, but also
results in a higher level of revenues. Thus, as in commercial
accounting, flexible budgets typically are better for enterprise
fund planning, control, and evaluatd.an purposes than are fixed
budgets.
A-1
THE REPORTING ENTITY AND ITS SERVICES
The funds related to the District included in our corprehensive
financial report are controlled solely by the Dis1:rict. Costia
Real Municipal Water District was formed in 1954 under the
Municipal Water District Law of 1911, California Water Code
S71000. The District covers an area of 20,369 acres at Carlsbad,
30 miles north of downtown San Diego. The distirict's purpose was
to act on behalf of the area to obtain an imported supply of
Colorado River vtater through the facilitd.es of San Diego County
Water Authority (SDCWA) and Metropolitan Water District of
Southern Califomia (MWDSC).
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
constructd-on of the major transmission, storage, and distribution
facilitn.es.
GENERAL OPERATING FUNCTIC»JS
Fiscal Year 1984-85 finished with the District continuing its
enhancement of an already s1:rong fiscal position. Total assets
of the District exceed $34 million and total revenue for the
General Fund exceeded Expenses by $2.9 million.
The assessed valuald-cai of property within the District exceeds
$2.1 billion, and makes the District the 4th largest in terms of
assessed valuation of the 24 member agencies of the San Diego
County Water Authority.
YEAR'S OPERATIONS AND FUTURE PROSPECTS
Fiscal Year 1984-85 was a dynamic year for the District. Three
major terminal regulating reservoirs were begun, a full year of
Major Facilities Charges were received, and the Distirict began
the conversion from contracted engineering services to an in-
house staff.
Looking to Fiscal Year 1985-86, the District will make an effort
to plan for the end of the general obligation debt service
requirements, will make the first two payments on the 1984
Certificate of Participation debt from District funds on hand,
will pi±>lish a plan to deal wit± the major capital facilities of
the Dis1:rict 1±rough biaildout, and will deal with the recovery of
costs for the new in-house engineering activities.
A-2
INDEPENDENT AUDIT
State code requires an annual audit be made of the books and
records of the Costa Real Municipal Water District. This was
acconplished this year by the firm of Ocxjpers & L^rand and their
opinion is included in tJiis report as the Financial Section.
ACKNCMiEIXMENTS
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 t±,e 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
Thanas L. Bramnell, C.P.A.
Controller
TLB:fw
A-3
DISTRICT PURPOSES AND POWERS
The Costa Real Municipal Water Distirict was originally kncwn as
t±e Carlsbad Municipal W^ter Disturict and was formed March 22,
1954, to apply to the San Diego County Water Authority and the
Califomia Metropolitan Water District for eligibility to receive
Colorado River W^ter.
The District conlljiues today serving the needs of the ci1:izens of
Carlsbad and may levy taxes, issue debt and set fees and rates
necessary to continue to provide the services set forth in the
original design of tJie District.
The Board of Directors of the District sets rates and fees.
These rates and fees are determined by the needs of the District
for operation and maintenance, principal and interest on
obligatd-ons, and system replacement and e35>ansion.
A-4
COSTA REAL MUNICIPAL WATER DISTRICT
LISTING OF DISTRICT OFFICIALS
ELECTED OFFICIALS
Margaret J. Bonas (Term 1/1/83-1/12/87) President
Norman M. Almack (Term 1/1/83-1/12/87) Vice President
Allan 0. Kelly (Term 1/1/83-1/12/87)Asst.Sec'y/Asst. Treas.
Fred W. Maerkle (Term 1/7/85-1/10/89). Secretary
Susan M. Haasl (Term 1/7/85-1/10/89) Treasurer
APPOINTED OFFICIALS
William C. Meadows General Manager
Thanas L. Bramnell Controller
William E. Blakesley Deputy District Engineer
Kurt B. Musser Si:perintendent
CONSULTANTS AND ADVISORS
Linden R. Burzell District Engineer
1002 Bonnie Brae Place
Vista, Califomia 92083
Jennings, Engstrand & Henrikson Legal Counsel
2255 Camino del Rio South
San Diego, Califomia 92108
Coopers & Lybrand Audit Firm
401 West A Street
San Diego, Califomia 92101
A-5
CX)NTROLLER
UIJC (1)
ACCOUNT
CLERK II
22 (2)
SYSTEM
FOREMAN
37 (1)
SYSTEM
OPERATOR III
1
SYSTEM
OPERATOR II
27 <2)
BOARD OF
1 DIRECTORS
1 (5)
i
-J
1
1 GEtlERAL
1 ^ MA!IAGER
UNC (1)
COSTA REAL MUNICIPAL WATER DISTRICT
ORGANIZATION CHART
1984-85
OUTSIDE
CONSULTANTS
SUPERINTENDENT
UNC ill
SERVICE
SUPERVISOR
34 ill
EXECUTIVE
SECRETARY
31 (1)
SENIOR
EtlGINEERIHG
AIDE
JSIS Ul
CONSTRUCTION/
MAlNTENAtlCE
FOREMAN ^7 ^ m
1
ENGINEER
UHC .-LU
ENGIt^ERING
TEQUIICIAN II
CONSTRUCTION/
MAINTENANCE
WORKER II
27 <3)
CONSTRUCTION/
MAINTENANCE
WORKER I
25 (1)
D H CO
9
S
SAN DIEGO COUNTY WATER AUTHORITY
COLORADO RIVER
AQUEDUCT
MEXICO
Carlsbad receives its water supply from the Costa Real Munidpal Water District a member agency of the San Diego County Water Authority,
shown in the map above.
A-7
METROPOLITAN WATER DISTRICT
MCTMOMKITAN VWATIII OISTRICT oa SOUTMCRN CMJfOnmA
MUtNCWM, WATtN 0
CaM*M> faam
OTIMCTl
C—!• aaan La V
OM taam Oran(
Caamm Pama
WMMm«iW«MM Camm
(WKUMA Kom*
AnMMM m im Manno
>«»»l» la Santa An*
Lan«a mach Sanw Mon«a
Camam * la* An
Pitaam
Toffanca
na
SAN OWOO COUNTV
WATiH AUTHONITV
emu mtwm COWTIIUIWT MUMO^AL WATIR oisnwcTS coNsmuf NT crms AND onTmcrs
U Caaam Fkmrtdta MWO
SM Vaaa*
Carni
Co
CudaMv
Oandva
La Vama
San OMwa
WaMM
Canan
CulwCilv
El! Oiv San Omwie
Sama fa
Buano CoioaM
' CMU Raa<
OaLiu Maignu
Ota»
LiaiiKBeil
UMaada
luawa Pat*
Fawmaai Vafav
) Gfowa
UHatfa
Lai
Pata
Pico
Sama fa Sa"xm
Staaattm
SOMA Caw
VaMavMWO
A>ca*a-
Bal^Mnn Patli
••adOwv
Cawna
Ouana
(11
Chula Viau
ElCaian
UMaia
Lamon Crana
San Matcoa
Vt«a
Miliiarv
Ra
P«Mi« tMMv OiocriM
Countv WfaMr Qinnct
San Mated
H<o San OMQO
Vaaay Caniav
Vuiwa
Oango
Piacamta
San Jtian Cioiiitano
Stamen
V«a Park
SanCabnal
Sowm CI Mema
SouMi Pwaaana
TamaiaCkv
WanCoDMa
NOTE: Th* 71 conttiiucnt mamban at tfia MafreooMan Waiar Oinriel ar* th* 13
anfintt eniaa, 12 mumewal awiar dinncti.
<nn*B*« city. Th*r* «r* I3S meofoorano
dlM* «Mmin ih* boundan** of th* Oitiriet.
COMPOSITION OF THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
A-8
#
COSTA REAL MUNICIPAL WATER DISTRICT
REPORT CM EXAMINATION OF FINANCIAL STATEMENTS
For the Year Ended June 30, 1985
B
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, 1985, and the related statements of
revenue 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.
As discussed more fully in Mote 10 to the financial statements,
during fiscal 1984, the District and the City of Carlsbad
entered into a water service agreement which provides for, among
other things, the transfer of certain assets and obligations
between the two parties. Values have not yet been agreed
upon by both parties for certain of the items still to be
transferred. The financial statement impact of assets and
obligations not yet transferred cannot presently be determined
and no provision has been made in the accompanying financial
statements for such transfers.
In our opinion, subject to the effects on the financial state-
ments of such adjustments, if any, as might have been required
had the outcome of the uncertainty referred to in the preceding
paragraph been known, the financial statements referred to above
present fairly the financial position of Costa Real Municipal
Water District as of June 30, 1985, 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 28, 1985
B-1
COSTA REAL MUNICIPAL WATER
BALANCE SHEET
June 30, 1985
DISTRICT
ASSETS
General
Improvement
District
Total
(Memorandum Only -Note 11)
Fund Funds 1985 1981
Current assets:
Cash, principally certificates of deposit
Accounts receivable
Inventories (Note 1)
Other current assets
$ 5,199,066
936,820
111 ,005
$ 5,199,066
936,820
111,005
$ 2,311,101
107,531
150,066
12,231
Total current assets 6.276.891 6.276.891 2.913.932
Current restricted assets:
Cash, principally certificates of deposit
Interest receivable 33.351
$1,131,107 1,131,107
33.351
1,360,791
317.000
Total current restricted assets 33.351 1.131.107 1.167,158 1.677,791
Restricted assets:
Cash, principally certificates of deposit
Long-term contract receivable (Note 3)
Issuance costs, net of accumulated
amortization (Note 1)
Investments (Note 1)
112,231
9,076,290
382,171
16,726
382,171 16,726
112,231
9.076,290
350,616
56,380
150,729
12.181,870
Total restricted assets 9.518.521 128,897 9.917,121 13.012,595
Utility plant (Notes 1 and 2)
Property and equipment, at cost, net
of accumulated depreciation
Construction in progress
7,876,613
3.791.978
5,050,631 12,927,271
3.791.978
11 ,039,969
778.605
Total utility plant 11,668,621 5,050,631 16,719,252 11,818,571
Other assets 702 702 8,112
Total assets $27,197,387 $6,911,337 $31,111,721 $29,191,331
The accompanying notes are an integral part of the financial statements.
COSTA REAL MUNICIPAL WATER DISTRICT
BALANCE SHEET
June 30, 1985
LIABILITIES AND FUND EQUITY
General
Improvement
District
Total
(Memorandum Only -Note 11)
Fund Funds 1985 1981
Current liabilities:
Accounts payable
Current portion of certificates of
participation payable (Note 1)
Current portion of notes payable (Note 6)
Interest payable
Accrued expenses
Construction and customer meter deposits
$ 150,626
100,000
23,135
206,175
116,027
170,218
$ 150,626
100,000
23,135
206,175
116,027
170.218
$ 397,812
33,869
206,175
121,905
160,133
Total current liabilities 1,066,781 1,066,781 920,221
Current restricted liabilities:
Current portion of bonds payable (Note 5)
Accrued interest and unredeemed bonds
and bond coupons
$ 115,000
57,519
115,000
57.519
115,000
20,912
Total current restricted liabilities 202,519 202,519 165,912
Long-term debt:
Certificates of participation
payable (Note 1)
Bonds payable (Note 5)
Notes payable (Note 6)
Total liabilities
12 ,500 ,000
62,115
1,023,000
12 ,500 ,000
1,023,000
62,115
12,600,000
1,168,000
85.550
Long-term debt:
Certificates of participation
payable (Note 1)
Bonds payable (Note 5)
Notes payable (Note 6)
Total liabilities 13.628.896 1,225,519 11.851,115 11.939.686
Fund equity:
Equity in utility plant
Appropriated for sinking fund (Note 9)
Appropriated for contingencies (Note 9)
Appropriated for construction (Note 9)
Other appropriations (Note 9)
Unappropriated retained earnings
7,521,217
867,398
500,000
1.976,816
3,881,752
382,171
710,618
681,217
11,105,999
382,171
867,398
500,000
710,618
5.661.093
9,538,376
350,616
710,618
3.922,008
Total fund equity 13.868,191 5.688,818 19.557,309 11,551.618
Total $27,197,387 $6,911,337 $31,111,721 $29,191,331
The accompanying notes are an integral part of the financial statements.
COSTA REAL MUNICIPAL WATER DISTRICT
STATEMENT OF REVENUE AND EXPENDITURES
For The Year Ended June 30, 1985
General
Improv ement
District
Total
(Memorandum Only - Note 11)
Fund Funds 1985 1981
Operating revenue:
Water sales
Miscellaneous revenue
Facilities revenue
$1,528,678
182,180
1.775.819
$1,528 ,678
182,180
1 .775.819
$3,813,535
251,710
701.335
Total operating revenue 6,186,707 6.186.707 1.766,610
Operating expenditures:
Cost of water sold
Water treatment
Transmission and distribution
Administrative and general
Reimbursement agreement
3,007,371
92,111
581,870
578,000
(151,517)
3,007,371
92,111
581,870
578,000
(151,517)
2,635,167
50,087
375,306
599,529
133,186
Total operating expenditures 1,108,138 1,108,138 3,793,275
Net operating revenues
before deducting
depreciation 2,378,569 2,378,569 973,335
Provision for depreciation 160,813 $139,561 300,371 280,295
Net operating revenues
after deducting
depreciation 2,217,756 (139,561) 2,078,195 693.010
Other financing sources (uses):
Property taxes
Interest earned
Lease of property
Interest on bonds, notes payable and
certificates of participation payable
Amortization of issuance costs
303,311
1,617,015
22,000
( 1 ,253,659)
(23,275)
219,706
11,098
(77,191)
553,0 17
1 ,688,113
22,000
( 1,330,853)
(23.275)
506,919
505,719
16,100
(203,170)
Total other financing
sources (uses) 695,122 213,610 909.032 825,898
Excess of revenue and other sources
over expenditures and other uses $2,913,178 $ 71,019 $2,987,227 $1,518,938
The accompanying notes are an integral part of the financial statements.
COSTA REAL MUNICIPAL WATER DISTRICT
STATEMENT OF FUND EQUITY
June 30, 1985
Revenue:
Contributed utility plant
Excess of revenue and other
sources over expenditures
and other uses
Transfers:
Depreciation, an expense not
requiring a current outlay
of funds
Bonds redeemed
Current portion of bond payable
Sinking Fund
Other net transfers
Excess of revenue over transfers
Fund equity, beginning of year
Fund equity, end of year
General
Fund
$2,028 ,131
Equity in Utility Plant
Improv ement Total
(160,813)
1,867,621
5,656.626
$7.52»,217
Districts
Funds
$ (139 , 561)
115,000
(5.137)
2
3.881.750
$3.881.752
(Memorandum Only - Note 11)
1985 1981
$ 2,028,i»3l $ 997,706
(300,371)
115,000
(5.137)
1,867,623
9.538.376
$11.105.999
(280,295)
110,000
1.558
861,969
8.676.107
$9.538.376
Appropriated for
Sinking Fund
Improvement District #3
im— —im
$ 31,555
31,555
350.616
$382.171
$ 29,176
29,176
321.110
$350.616
Appropriated for
Contingencies
General Fund
—Tm—
Appropriated for
Construction
General Fund
19^5"
$867.398 $500.000
867,398 500,000
Other Appropriations General
Improvement District"Funds Fund
1955 TWi
$867.398 $500.000
$(115,000)
115,000
710,618
$ 710,618
$( 110,000)
115,000
(9.999)
(1,999)
715.617
$ 710,618
160,813
(1.367.398)
1,706,593
3.270.253
$1,976.816
Unappropriated Retained Earninga
Improvement ~" Total
(Memorandum Only
1985
Districts
Funds
$2,913,178 $ 71,019
139,561
(10,000)
(115,000)
(31,555)
5.137
32,192
651.755
$681.217
$2,987,227 $1,5
300,371
(115,000)
(31,555)
(1.371.961)
1,739,085
3.922.008
$5.661.093
(1
(
1,6
2.2'
$3.?:
The accompanying notes are an integral part of the financial statements.
B-5
COSTA REAL MUNICIPAL WATER DISTRICT
STATEMENT OF FUND EQUITY
June 30, 1985
General
Fund
Equity in Utility Plant
Improvement Total
Districts
Funds (Memorandum Only - Note 11)
1985 1981
Appropriated for
Sinking Fund
Improvement District #3 im —1981 ^
Appropriated for
Contingencies
General Fund
—rm—
Appropriated for
Construction (ieneral Fund
1955"
Other Appropriations
Improvement District"Funds
"1955 TWi
General
Fund
Unappropriated Retained Earnings
Improvement ~ Total —
Districts (Memorandum Only - Note 11
•Funds
•ibuted utility plant
IS of revenue and other
irces over expenditures
i other uses
srs:
!elation, an expense not
luiring a current outlay
funds
I redeemed
snt portion of bond payable
.ng Fund
• net transfers
of revenue over transfers
uity, beginning of year
uity, end of year
$2,028,131 $ 2,028,i»3l $ 997,706
(160,813)
1,867,621
5.656.626
$7.521-.217
$ (139 , 561)
115,000
(5.137)
2
3.881.750
$3.881.752
(300,371)
115,000
(5.137)
1,867,623
9.538.376
$11.105.999
(280 ,295)
110,000
1.558
861,969
6,676.107
$9.538.376
$ 31,555
31,555
350.616
$382.171
$ 29,176
29,176
321,110
$350.616
$867.398 $500.000
867,398 500,000
$867.398 $500.000
$( 115,000)
115,000
710.618
$ 710.618
$(110,000)
115,000
(9.999)
(1,999)
715.617
$ 710,618
$2,913,178 $ 71,019
160,813
(1.367.398)
1,706,593
3.270.253
$1.976.816
139,561
(10,000)
(115,000)
(31,555)
5.137
32,192
651.755
$681,217
$2,987,227 $1,518,938
300,371
(115.000)
(31 .555)
(1.371.961)
1,739,085
3.922.008
$5.661.093
280,295
( 115 , 000)
(29.176)
5.110
1,630,197
2,291.811
$3.922.008
The accompanying notes are an integral part of the financial statements.
B-5
COSTA REAL MUNICIPAL WATER DISTRICT
STATEMENT OF CHANGES IN FINANCIAL POSITION
For The Year Ended June 30, 1985
General
Improvement
District
Total
Increase (decrease) in components
of working capital:
Cash
Accounts receivable
Inventories
Other current assets
Restricted cash
Interest receivable
Accounts payable
Current portion of certificates
of participation payable
Current portion of notes payable
Interest payable
Accrued expenses
Construction and customer meter
deposits
Current portion of bonds payable
Increase (decrease) in
working capital •
$2,854,965
529,289
(9,061)
(42,234)
(283,649)
(52,784)
(100,000)
10 ,434
5,878
( 10,085)
$ 73,316
(36,607)
$2,854,965
529,289
(9,061)
(42,234)
73,316
(283,649)
(52,784)
( 100 ,000)
10,434
(30,729)
(10,085)
Fund Funds im 19a4
Sources of working capital:
From operations:
Excess of revenues and other
sources over expenditures
and other uses
Charges to operations not
affecting working capital:
Depreciation
Amortization
$2,913,178
160,8 13
23,275
$ 74,049
139,561
$2,987,227 $
300,374
23,275
1,518,938
280,295
Working capital provided
by operations 3,097,266 213,6 10 3,310,876 1,799,233
Contributed utility plant
Decrease in investments
Collection of long-term contract
receivable
Issuance of certificates of
participation
2,028,434
3,108,580
9,654
2,028,434
3,108,580
9,654
997,706
7,847
12,600,000
Total sources of working
capital 8,234,280 223,264 8,457,544 15,404,786
Uses of working capital:
Additions to utility plant, net
Current maturity of long-term debt
Addition to bond sinking fund
Additions to investments
Issuance costs
5,193,312
123,435
14,780
155,000
31,555
5,193,312
278 ,4 35
31 ,555
14,780
1,387,949
212,771
29,476
12,184,870
450,729
Total uses of working capital 5,331,527 186,555 5,518,082 14,265,795
Increase (decrease) in
working capital $2,902,753 $ 36,709 $2,939,462 $ 1,138,991
991 ,356
119,290
26 ,322
4,767
49,063
317,000
( 178,653)
110,000
(206,475)
(80,843)
(22,836)
10,000
$2,902,753 $ 36,709 $2,939,462 $ 1,138,991
The accompanying notes are an integral part
of the financial statements.
B-6
COSTA REAL MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
The accounting policies of the Costa Real Municipal
Water District (the 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, fund equity, revenue, 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 rates and fees
sufficient to provide for payment of general District
operations and maintenance expenses as well as required
annual debt service. Utilizing the accrual basis of
accounting, revenue is recognized when earned and expenses
are recognized when incurred. Uncollected 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 acquisition appropriations within
separate improvement district funds.
All improvement district funds utilize the modified accrual
basis of accounting. Revenue is recognized when it becomes
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
Utility plant is stated at cost or, if donated by devel-
opers, at engineering estimates of fair market value at
date of transfer. Expenditures for improvements and
betterments (including labor and overhead) are capitalized.
Maintenance, repairs and minor improvements are expensed as
incurred. Depreciation is computed using the straight-line
method over the service lives of the respective assets.
2. Utility Plant:
A summary of utility plant and the related accumulated
depreciation as of June 30, 1985 follows:
Inprovement Total
General Districts (Memorandum Only - Note 11)
Fund Funds IgHs IW?
Utility plant:
Ctost of participation — San
Diego Water Authority $ 33,174 $ 33,174 $ 33,174
Land and easements 16,462 $ 102,785 119,247 119,247
Reservoirs and dams 2,276 1,509,733 1,512,009 1,512,009
Pipelines and pumping
stations 7,458,021 5,250,128 12,708,149 10,679,620
Chlorination stations 12,050 56,730 68,780 66,214
Meters and accessories 479,500 183,310 662,810 662,810
Buildings 295,873 295,873 204,551
Machinery and equipment 310,331 3,675 314,006 263,531
Office fixtures and
equipment 76,818 76,818 97,711
8,684,505 7,106,361 15,790,866 13,638,867
Construction in progress 3,791,978 3,791,978 778,605
12,476,483 7,106,361 19,582,844 14,417,472
Less accumulated
depreciation 807,862 2,055,730 2,863,592 2,598,898
Net utility plant $11,668,621' $5,050,631 $16,719,252 $11,818,574
Continued
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 from the San Diego (bounty Water
Authority within the preceding fiscal year. The contract
contains no interest provision.
Long-term Certificates of Participation:
On May 1, 1984, the District issued $12,600,000 in
Certificates of Participation ("Certificates") for the
acquisition of the land and construction of three water
storage reservoirs. Total estimated costs for the three
reservoirs are included in the following table:
Continued B-9
COSTA REAL MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS, Continued
4. Long-term Certificates of Participation, Continued:
La Costa reservoir (6.0 million gallons) $ 2,400,000
Tri-Agencies reservoir (6.0 million gallons) 3,030,000
Santa Fe II reservoir (9.0 million gallons) 4,950,000
Project costs 10,380,000
Interest cost during construction 1,260,000
Reserve fund 1,260,000
Gross discount allowance 252,000
Issuance costs 188,000
Interest earnings during construction (740,000)
Total uses of funds $12,600,000
The Certificates are payable from all unrestricted revenues
of the District.
Proceeds from the certificates are invested principally in
U.S. Treasury notes in accordance with provisions of the
issue agreement. Issuance costs will be amortized over the
20 year life of the issue. Amortization for fiscal 1985 is
$23,275.
The certificates bear interest ranging from 8% to ^5% per
year, payable semiannually on May 1 and November 1 be-
ginning November 1, 1984. Principal payments are payable
annually beginning May 1, 1986 through May 1, 2004.
Minimum annual payments for retirement of the certificates
during the five years after June 30, 1985 are.as follows:
1986 100,000
1987 200,000
1988 300,000
1989 350,000
1990 400,000
Continued B-10
COSTA REAL MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS, Continued
5. Long-term Debt - Bonds Payable:
Bonds payable at June 30, 1985 comprise the following individual issues:
Improvement
District
1
Improvement
District 2
Series 1
Improvement
District 2
Series 2
Improvement
District
3
Improvement
District
1 Total
Date of issue
Coupon interest rate
Interest payment dates
Principal payment dates
1957
3.85 to 1.0$
3/1 & 9/1
3/1
1958-Series 1
5.0%
3/1 & 9/1
3/1
1961-Series 2
1.5*
5/1 & 11/1
5/1
1961
1.75 & 5.0*
3/1 & 9/1
3/1
1961
3.5 & 1.0*
6/1 & 12/1
12/1
Authorized
Authorized-unissued
$1,250,000
(100,000)
$350,000 $125,000 $1,000 ,000
(200,000)
$690,000 $3,715,000
(300,000)
Original issue
Redeemed as of 6/30/85
1 ,150,000
( 1,030,000) 35cr7cro0
(275,000)
125,000
(285,000)
000,000
(212,000)
690,000
(115,000)
3,115,000
(2,217,000)
Outstanding as of 6/3O/85 120,000 75,000 110,000 588,000 215 ,000 1,168,000
Less current portion (70,000) (20,000) (20,000) (5,000) (30,000) (115,000)
Portion due after one year $ 50,000 $ 55.000 $120,000 $583,000 $215^000 $1j^023,000
Minimum annual principal payments for retirement of outstanding bonds as of June 30, 1985 are as follows:
Fiscal years ending June 30,
1986
1987
1988
1989
1990
1991
1992
$ 70,000
50,000
$ 20,000
20,000
35,000
$ 20,000
20,000
25,000
25 ,000
25,000
25,000
$ 5,000
5 ,000
5,000
5,000
5,000
563,000
$ 30,000
30,000
35,000
35,000
35,000
10,000
10,000
$ 115,000
125,000
100,000
65,000
65 ,000
628,000
10,000
Total $120,000 $ 75,000 $110,000 $588,000 $215,000 $1^^168,000
COSTA REAL MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS, Continued
5. 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.
Long-term Debt - Notes:
Note" payable to San Marcos County
Water District, payable
$20,705 annually plus 7-1/4^6
interest
Note payable to vendor, payable
$1,097 monthly including
principal and discount interest
Less principal due in one year
Total
June 30, 1985
$82,820
2,730
85,550
23,435
$62,115
Annual principal payments on long-term notes during the
five years after June 30, 1985 are as follows:
1986
1987
1988
1989
1990
$23,435
20,705
20,705
20,705
7. Employee Retirement Plan:
The District has contracted with the Public Employees'
Retirement System to
full-time employees,
on a percentage of the
the Public Employees'
unfunded prior service
provide a retirement plan for all
(Ilontributions to the Plan are based
employee's salary. As determined by
Retirement System, the District's
liability is approximately $10,000
at June 30, 1985. The expense for providing retirement
benefits under this plan for the year ended June 30, 1985
was $73,072.
Continued B-12
COSTA REAL MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS, Continued
8. Vacation and Sick Pay:
The cost of sick pay is recorded when disbursed. At June
30, 1985, employees of the District had accumulated earned
vacation aggregating approximately $28,000 for which an
accrual has been made.
9. Appropriated Equity:
Sinking Fund - This appropriation 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. Funding of the sinking fund during
fiscal 1985 was by proceeds from property tax and transfers
of interest from the General Fund.
Contingencies - During fiscal 1985, the Board of Directors
appropriated fund equity in an amount equal to 25% of the
annual operating budget. This appropriation was made to
offset the "stand by" fees which are now kept by the City
of Carlsbad as part of the Water Service Agreement (see
Note 10). The "stand by" fees provided a source of revenue
even if water sales were significantly reduced. Amounts
appropriated are to be used for operations in the event of
a temporary decline in water revenue from an unforeseen
event.
Construction - During fiscal I985, the Board of Directors
appropriated fund equity in the amount of $500,000 to
be used for emergency capital improvements. Amounts
appropriated are only to be used for significant non-
recurring items which are not included in the operating
budget.
Other - The following amounts are included in the caption
other appropriations:
Fully Appropriated Assets - The District carries the
long-term contract receivable as an asset in the
improvement district funds and -establishes corres-
ponding appropriations.
Continued P-13
COSTA REAL MUNICIPAL WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS, Continued
Appropriated Equity, Continued:
Debt Service - These appropriations were established
in conjunction with the various bond issues. The
appropriations are restricted to the payment of
current bond service requirements.
Acquisition - The original bond issues of the District
were for the purpose of acquisition of facilities. To
date, through various reimbursements to these acqui-
sition funds, there remains $530,718 appropriated for
acquisition purposes.
10. Contingency:
On May 25, 1983 the District reached an agreement with the
City of Carlsbad wherein the District will provide all
capital facility financing and development, operation and
maintenance and planning for the consolidated water
system. The City will provide all customer service
functions. As a result of the change in function of each
entity, the agreement provides for the exchange of speci-
fied assets and obligations at values to be agreed upon by
the two parties.
As of June 30, >985 net assets with an agreed upon value of
$60,000 and $24,000 have been received and transfered by
the District, respectively. Disposition of the remaining
items have not yet been determined, including a reservoir
and cash reserves presently held by the City which have an
approximate value of $15,000,000.
11. 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
Coopers &LyDrand
certified public accountants
To the Board of Directors
Costa Real Municipal Mater District
^^^"'ination Municipal Water District was made for the purpose of forming an opinion on the basic financial
?Sr«.!^h°V. " * Information on schedules one
through four is presented for purposes of additional analysll
lufh 1n)?f .'•^qf'•ed Pa'-t of the basic financial statemenis!
Such information has not been subjected to the auditing pro-
cedures applied in the examination of the basic finfnoill
statements, and, accordingly, we express no opinion on 1?.
San Diego, California
August 28, 1985
B-15
COSTA REAL MUNICIPAL WATER DISTRICT
ADMINISTRATIVE AND GENERAL, TRANSMISSION AND
DISTRIBUTION, AND WATER TREATMENT EXPENSES
Year Ended June 30, 1985
(Unaudited)
Schedule 1
(Over)
Transmission and distribution:
Labor and expense
Operation and maintenance of system
Vehicle maintenance
Mapping and records
Tools and equipment maintenance
Engineering and special services
Telemetering
Total
$369,094
86,000
50,490
44,319
2,000
27,723
5,000
$333,370
108,733
47,723
66,331
2,441
21,299
4,973
$ 35,724
(22,733)
2,767
(22,012)
(441)
6,424
27
Uider 1984
Budget Actual Budget Actual
iministrative aind general:
Labor and expense $177,089 $207,864 $(30,775) $227,613
Engineering and special services 235,300 185,771 49,529 193,246
Professional fees 43,000 45,067 (2,067) 46,590
Public information 1,734
Directors fees and expenses 30,000 22,813 7,187 22,415
Utilities 28,628 33,690 (5,062) 34,928
Insurance 39,000 35,779 3,221 34,128
Office supplies and expense 15,000 12,785 2,215 17,339
Water conservation 25,000 22,654 2,346 13,617
Data processing expense 9,570 3,417 6,153 6,366
Headquarters maintenance 3,540 8,160 (4,620) 1,553
Total $606,127 $578,000 $ 28^127 $599,529
$217,330
76,726
37,346
10,678
1,372
27,879
3,975
$584,626 $584,870 $ (244) $375,306
Water treatment:
Labor and expense
Chlorine
Chlorine equipment and station -
maintenance
Laboratory services - testing
Total
$ 55,859
6,300
6,500
5,500
$ 59,871
19,256
3,045
10,239
$ (4,012)
(12,956)
3,455
(4,739)
$ 34,326
8,359
1,232
6,170
4
$ 74,159 $ 92,411 $(18,252) 50,087
B-16
COSTA REAL MUNICIPAL WATER DISTRICT Schedule 2
IMPROVEMENT DISTRICTS' BALANCE SHEET
For the Year Ended June 30, 1985
(Unaudited)
Improvement
District #1
Improvement
District #2
Improvement Improvement Total Improvement
District #1
Improvement
District #2 District #3 District #1 1985 19«1
ASSETS
Current restricted assets:
Cash, principally certificates of deposit
Restricted assets:
Cash, principally certificates of deposit
Long-term contract receivable
$ 301,929
16,726
$ 606,023 $ 385,820
382,171
$137,335 $1,131,107
382,171
16,726
$1,360,791
350,616
56,380
Current restricted assets:
Cash, principally certificates of deposit
Restricted assets:
Cash, principally certificates of deposit
Long-term contract receivable
351,655 606,023 767,991 137.335 1,863.001 1,767,787
Utility Plant:
Water Transmission and Distribution Facility
Less accumulated depreciation
1 ,071,916
500,708
1,191,056
951,561
1,108,819
372,120
731,510
228.011
7,106,361
2,055,730
7,106,361
1,916,169
Net utility plant 571,208 3,236,195 736,129 503,199 5,050,631 5,190,192
Other assets
Total assets
_ 702 _ _ 702 702 Other assets
Total assets $ 925,863 $3,813,220 $1,501,120 $610,831 $6,911,337 $6,958,681
LIABILITIES AND EQUITY,
RESERVES AND FUND BALANCES
Current liabilities:
Current portion of bonds payable
Accrued interest and unredeemed
bonds and bond coupons
$ 70,000
10,912
$ 10,000
20,357
$ 5,000
11,675
$ 30,000
11,575
$ 115,000
57,519
$ 115,000
20,912
Total current liabilities (payable
from restricted assets) 80,912 60,357 19,675 11,575 202,519 165,912
Long-term debt, bonds payable 50,000 175,000 583,000 215,000 1,023,000 1 , 168,000
Total liabilities 130,912 235,357 602,675 256,575 1 ,225 ,519 1,333,912
Fund equity:
Equity in utility plant
Appropriation for sinking fund
Other appropriations
Unappropriated retained earnings
118,327
139,227
207,397
3,021,196
128,165
158,202
118,127
382, 171
118,256
222,891
263,502
25,000
95,757
3,881,752
382, 171
710,618
681,217
3,881,750
350,616
710,618
651,755
Total fund equity 791,951 3.607,863 901,715 381,259 5.688,818 5.621,769
Total $ 925,863 $3,813,220 $1,501,120 $610,831 $6,911,337 $6,958,681
4a.
COSTA RFAL MUNICIPAL WATER DISTRICT Schedule 3
IMPROVEMENT DISTRICTS' STATEMENT OF REVENUES AND EXPENDITURES
For the Year Ended June 30, 1985
(Unaudit ed)
Improveme nt Improv ement Improv ement Improvement Total
District #1 District #2 District #3 District #1 1985
Operating expenditures:
Depreciation $20,113 $ 87,611 $21,511 $ 9,966 $139,561 $139,558
Net operating loss (20,113) (87,611) (21,511) (9,966) ( 139 ,561) ( 139 ,558)
Other financing sources (uses):
Property taxes
Interest earned
Interest on bonds and notes payable
91,131
(10,871)
69 ,609
( 15,099)
11,507
11,098
(31.197)
17 ,159
(16,721)
219 ,706
11 ,098
(77,191)
212,029
32,100
(56,529)
Total other financing sources (uses) 80,257 51,510 18,108 30,735 213,610 217,600
Excess of other sources over expenditures
and other uses $59,811 $(33,131) $26,567 $20,769 $ 71,019 $ 78,012
COSTA REAL MUNICIPAL WATER* DISTRICT
IMPROVEMENT DISTRICTS' STATEMENT OF FUND EQUITY
For the Year Ended June 30, 1985
(Unaudited)
Schedul'
Tmprovement
Diatrict #1
Excess of revenue and other
sources over expenditures
and other uses
Transfers:
Depreciation, an expense
not requiring a current
outlay of funds $(20,113)
Bonds redeemed 70,000
Current portion bonds
payable
Sinking fund
Other net transfers (5.137)
Excess of revenue over
transfers W,150
Fund equity, beginning of year 404,177
Fund equity, end of year $448.327
Equity_in Utility Plant
Improveaent Improvement Improvement
District #2 District #3 District #4
(87.641)
40,000
(47,641)
3.069.137
$3.021.496
$(21,511)
5,000
$ (9.966) 30.000
Total
Appropriated for-
Sinking Fund
Improvement
District »3
$ (139.561)
145,000
(5.437:
2
3.881.750
<3.881.752
$ 31,555
31,555
350.616
$382.171
Other
Improvement
District #1
Appropriations
Improvement Improvement Improvement
District #2 District #3 District »4 Total
$(70,000)
70,000
139.227
$139>227
$(40,000)
40,000
428.165
$428.165
$ (5,000)
5,000
148.256
$148.256
$(30,000)
30,000
$(145,000)
145,000
740.648
$740.648
Unappropriated Retained Earnings
Improvement Improvement Improvement Improvement
District #1 District #2 District #3 District #4
$ 59,844 $(33,131) $ 26,567 $ 20,769 $ ^
20,413 (5,000)
(70,000)
_5,^?7
10,694
196.703
$207.397
87,641
(5,000)
(40,000)
21.541
(5.000)
(31,555)
9,966
(30,000)
13 (1
(14
(3
3
$68
B-19
COSTA REAL MUNICIPAL WATER* DISTRICT
IMPROVEMENT DISTRICTS' STATEMENT OF FUND EQUITY
For the Year Ended June 30. 1985
(Unaudited)
Schedule 4
Improvement
District #1
ts of revenue and other
trees over expenditures
I other uses
ifers:
treciation, an expense
lot requiring a current
)utlay of funds
ids redeemed
•rent portion bonds
layable
iking fund
ler net transfers
IS of revenue over
nsfers
equity, beginning of year
equity, end of year
$(20,413)
70,000
(5.437)
44 ,150
404 ,177
$448 ,327
Equity In Utility Plant
Improvement Improvement Improvement
District #2 District #3 District #4
(87,641)
40,000
(47,641)
3.069.137
$3,021.496
$(21,541)
5,000
(16,541)
164.968
$148.427
$ (9.966) 30.000
Total
Appropriated for-
Sinking Fund
Improvement
District #3
$ (139,56i:
145,000
(5.437!
2
3.881.750
$3.881.752
$ 31.555
31.555
350.616
$382.171
Improvement
District #1
Other
Improvement
District #2
$(70,000)
70,000
139.227
$139.227
$(40,000)
40,000
428.165
$428.165
Uppropri
improve
ations
iprovement
District #3
Improvement
District #4 Total
$ (5,000)
5,000
148.256
$148.256
$(30,000)
30,000
25.000
$25.000
$(145,000)
145,000
740.648
$740.648
Unappropriated Retained Earninga
Improvement Improvement Improvement Improvement
District #1 District #2 District #3 District #4
$ 59,844 $(33,131) $ 26,567 $ 20,769
20,413
(5,000)
(70,000)
—Liiil
10,691
196.703
$207.397
87,641
(5,000)
(40,000)
21,541
(5,000)
(31,555)
9,966
(30,000)
Total
$ 71,049
139,561
(10,000)
(145,000)
(31,555)
5.437
32.492
651.755
$684,247
B-19
COSTA REAL MUNICIPAL WATER DISTRICT
DEBT SERVICE COVERAGE
LAST FIVE YEARS
(IN $1,000)
80-81 81-82 82-83 83-84 84-85
Gyrating Revenues 2,473 2,555 2,680 4,766 6,486
Operating Expenses 2,101 2,385 2,545 3,793 4,108
Net Operating Revenue
before Depreciation 372 170 135 973 2,378
Depreciation 179 235 252 280 300
Net Operating Revenue
(Loss) after Depre-
ciation 193 (65) (117) 693 2,078
# Other Revenues 747 924 793 1,029 2,263
Other Expenses 145 121 102 203 1,354
Net Revenues 795 738 574 1,519 2,987
Net Revenue Available for
Debt Service Exclusive
of Depreciation and
Interest on Debt 1,056 1,048 1,045 1,856 4,618
Annual Debt Service 212 206 212 197 1,476
Coverage Factor 5.0 5.1 4.9 9.4 3.3
C-4
COSTA REAL MUNICIPAL WATER DISTRICT
EMPLOYEES
8(^-81 81-82 82-83 83-84 84-85
Employees
Management
Engineering
Clerical
Field
Total
2.0 2.0 2.0 2.0 2.0
3.0 3.0 3.0 3.5 3.5 3.0 3.0
6.0 6.0 6.0 13.0 13.0
11.0 11.5 11.5 18.0 21.0
c-5