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HomeMy WebLinkAbout; ; 1986 Building Authority Financial Statements; 1986-06-30DIEHL, EVANS AND COMPANY A PARTNERSHIP OF ACCOUNTANCY CORPORATIONS CERTIFIED PUBLIC ACCOUNTANTS BUILDING AUTHORITY OF THE CITY OF CARLSBAD FINANCIAL STATEMENTS WITH REPORT ON EXAMINATION BY CERTIFIED PUBLIC ACCOUNTANTS June 30, 1986 BUILDING- AUTHORITY OF THE CITY OF CARLSBAD Table of Contents June 30, 1986 Page Number Accountants' Report 1 Combined Balance Sheet - All Governmental Fund Types and Account Group 2 Combined Statement of Revenues, Expenditures and Changes in Fund Balance - All Governmental Fund Types 3 Statement of Changes in Bonds Payable 4 Notes to Financial Statements 5-7 Combining Balance Sheet - All Debt Service Funds 8 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - All Debt Service Funds 9 "PHILIP H. HOLTKAMP, C.RA. 'THOMAS M. PERLOWSKI, C.P.A 'WIN G, PETERS, C.PA "DONALD H. PETERSON. C.RA. "DONALD E. CALLAHAN, C.PA "L. PETER SCHERER. C PA. 'RODNEY K. McDANIEL, C.P.A. "RALPH H. WEINTRAUB, C.PA. EDWARD GRODSKY, C.PA. ELLIS C. DlEHL, C.RA. (RETIRED) BRYN B. EVANS, C.PA. (RETIRED) *A PROFESSIONAL CORPORATION DIEHL, EVANS AND COMPANY A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS CERTIFIED PUBLIC ACCOUNTANTS I2O WEST WOODWARD AVENUE ESCONDIDO, CALIFORNIA 92O25-999O (619) 741-3141 OTHER OFFICES August 25, 1986 29GS ROOSEVELT STYLET CARLSBAD, CALIFORNIA 92OO6-2389 (619) 729-23'! .3 i 9 i o NORTH B u s H STREET SANTA ANA, CALIFORNIA 927O6-2894 (7 14) S'la-'-^b 3 ONE CWIC PLAZ-V v-UM'E £65 NEWPORT BEACH, CALIFORNIA 9266O (714} 6^" -^ '->6 ACCOUNTANTS' REPORT BOARD OF DIRECTORS BUILDING AUTHORITY OF THE CITY OF CARLSBAD CARLSBAD, CALIFORNIA We have examined the combined financial statements of the Building Authority of the City of Carlsbad as of and for the year ended June 30, 1986, as listed in the table of contents. 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 combined financial statements referred to above present fairly the financial position of the Building Authority of the City of Carlsbad at June 30, 1986 and the results of its operations and changes in fund balance for the year then ended, in conformity • with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Our examination was made for the purpose of forming an opinion on the combined financial statements taken as a whole. The combining financial statements listed in the table of contents are presented for purposes of additional analysis and are not a required part of the combined financial statements of the Building Authority of the City of Carlsbad. The information has been subjected to the auditing procedures applied in the examination of the combined financial statements, and in our opinion, is fairly stated in all material respects in relation to the combined financial statements taken as a whole. BUILDING AUTHORITY OF THE CITY OF CARLSBAD COMBINED BALANCE SHEET ALL GOVERNMENTAL FUND TYPES AND ACCOUNT GROUP June 30, 1986 ASSETS: Cash and savings held by trustee U.S. Government securities, at cost, (approximates market) Due from other funds Lease payments receivable (Note Ib) Unearned lease finance charges TOTAL ASSETS LIABILITIES: Revenue bonds payable (Note 3) Due to other funds TOTAL LIABILITIES FUND BALANCE (Note 4): Reserve for payment of bond principal and interest Reserve for working capital Unreserved TOTAL FUND BALANCE TOTAL LIABILITIES AND FUND BALANCE Account Group Lease Payments Governmental Fund Types Receivable Working Debt And Bonds Revenue Capital Service Payable $ 4,030 $ 4 $ 4,532 53,229 19,356 1,496 35,779 $ 233,650 (43,650) $ 57,259 $ 1,500 JL59.667 $ 190,0.00 LIABILITIES AND FUND BALANCE $ 190,000 $ 31,583 $ 5,692 31,583 5,692 190,000 53,975 $ 1,500 25,676 25,676 1,500 53,975 ^57,259 $ 1,500 $ 59^667 $ 190,000 Totals (Memorandum 1986 $ 8,566 ! 72,585 37,275 233,650 (43,650) $ 308,426 ! $ 190,000 ! 37,275 227,275 53,975 1,500 25,676 81.151 308 '26 Only) 1985 fc 34,718 43,396 33,536 271,100 (56,100) | 326,650 £ 215,000 33,536 248,536 56,175 1,500 20,439 78,114 See accompanying accountants' report and notes to financial slat.emm e n t' BUILDING .AUTHORITY OF THE CITY OF CARLSBAD COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - ALL GOVERNMENTAL FUND TYPES For the fiscal year ended June 30, 1986 REVENUE: Lease payments - finance charges Interest on investments TOTAL REVENUE EXPENDITURES: Interest Administrative expense TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Lease payments received - principal Bonds paid Operating transfers in Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUE AND OTHER SOURCES OVER EXPENDI- TURES AND OTHER USES FUND BALANCE, July 1, 1985 FUND BALANCE, June 30, 1986 Work ing Revenue Capital $ 12,450 5,076 $ 19 17,526 17,526 23,550 (35,839) 112,289) 19 2,347 2,347 (2,328) 2,328 2,328 5,237 20,439 1,500 Debt Service 1,739 1,739 12,450 12,450 (10,711! $ 25,676 $ 1,500 (2,200) 56,175 53,975 Totals (Memorandum Only) 19861985 12,450 6,834 19,284 12,450 2,347 14,797 4,487 !l,450) 13,800 7,125 20,925 13,800 1,007 14,807 6,118 (25,000) 35,729 (2,218) 23,550 (25,000) 38,057 (38-, 057) 22,200 (25,000) 42,413 (42,413) (2,800) 3,037 3,318 78,114 74,796 81,151 $ 78,114 See accompanying accountants' report and notes to financial statements. 3 BUILDIN-G AUTHORITY OF THE CITY OF CARLSBAD STATEMENT OF CHANGES IN BONDS PAYABLE For the fiscal year ended June 30, 1986 * BALANCE AT JULY 1, 1985 $ 215,000 Payments made 25,000 BALANCE AT JUNE 30, 1986 See accompanying accountants' report and notes to financial statements BUILDING. AUTHORITY OF THE CITY OF CARLSBAD NOTES TO FINANCIAL STATEMENTS June 30, 1986 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a. The financial statements have been prepared on the modified accrual basis. b. The leasing of the facilities to the City has been accounted for as a direct finance lease whereby the long-term lease has been treated as a sale of the facilities to the City and the lease payments receiv- able represent the selling price. Finance charges included in the lease payments are taken into income each year as earned on a declin- ing balance method over the life of the lease. This method has the effect of recording income in an amount that equals bond interest expense each year. 2. HISTORY AND ORGANIZATION: The Building Authority of the City of Carlsbad was organized October 1, 1967 under a joint exercise of powers agreement between the City of Carlsbad and the County of San Diego for the purpose of financing and constructing a civic center building for lease to the City of Carlsbad. Any net earnings or net assets of the Authority after providing for all debts and obligations of the Authority are distributable upon dissolution to only the City of Carlsbad. The Authority leased the site from the City of Carlsbad on November 1, 1967 for the sum of $ 1 which represents the rent for the full term of the lease. The site lease will terminate at the end of the sublease. On November 1, 1967 the Authority entered into a sublease with the City of Carlsbad under the terms of which the Authority agreed to construct the above-mentioned civic center facilities and lease them back to the City for annual rental payments of $ 36,000, payable in advance on July 1. The leaseback will terminate on October 31, 2007 or such earlier time when all debts of the Authority are paid in full. The City also agreed to pay as additional rent all taxes, assessments, insurance premiums and administrative costs of the Authority. 3. REVENUE BONDS PAYABLE: To provide funds for the construction of the City Hall, the Authority sold $ 460,000 principal amount of revenue bonds with interest at 6%. The bonds were issued under a trust indenture with Crocker National Bank as Trustee. The bonds mature serially December 15 each year as follows; $ 25,000 in years 1986, 1987, 1988, 1989, and $ 90,000 due thereafter. See accompanying accountants' report. BUILDING AUTHORITY OF THE CITY OF CARLSBAD NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1986 3. REVENUE BONDS PAYABLE (Continued): Bonds maturing on or after December 15, 1979 are subject to call in whole or in part at the option of the Authority at prices ranging from 100.75% to 104% of the principal amount of the bonds. 4. FUND BALANCES: In accordance with the terms of the indenture, cash balances of the following funds are restricted to be used for specified purposes as follows: Interest and Retirement Funds - on or before August 1 of each year, a sum sufficient to pay twelve months' interest due on the next succeeding December 15 and June 15 as well as the amount of principal maturing on the next succeeding December 15. Reserve Fund - an amount at least equal to one half maximum annual debt service ($ 18,725) shall be maintained at all times. Any excess shall on June 30 and December 30 of each year be transferred to the Revenue Fund. Moneys in this fund may be used to pay the principal and/or interest on the last maturity of bonds outstanding. Working Capital Fund - an amount necessary to pay administrative expenses and maintain a $ 1,500 balance in this fund. Revenue Fund - amounts accumulated in this fund after meeting requirements of the interest and redemption, reserve and working capital funds shall be declared surplus and may be used to reimburse the City for rent previ- ously paid. 5. INSURANCE: Insurance coverage maintained by the City of Carlsbad with the Authority listed as additional insured at June 30, 1986 includes: Type of Coverage All risk including valuable papers and rental income Equipment floater Boiler and machinery Comprehensive crime Amount $ 12,565,200 597,156 1,000,000 500,000 Term 10/01/85 to 10/01/86 10/01/85 to 10/01/86 12/20/85 to 12/20/86 04/16/86 to 04/16/87 As of January 1, 1986, the Authority no longer has coverage for liability insurance. As of June 30, 1986, there were no asserted or unasserted claims outstanding against the Authority. See accompanying accountants' report. BUILDING AUTHORITY OF THE CITY OF CARLSBAD NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1986 6. COMPARATIVE DATA: Comparative total data for the prior year have been presented in the ac- companying financial statements in order to provide an understanding of changes in the Authority's financial position and operations. However, comparative (i.e. presentation of prior year totals by fund type) data have not been presented in each of the statements since their inclusion would make the statements unduly complex and difficult to read. 7 . TOTAL COLUMNS: Total columns on the Combined Statements are captioned Memorandum Only to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operat- ions, or changes in fund balances in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. See accompanying accountants' report. 7 SUPPLEMENTARY INFORMATION BUILDING AUTHORITY OF THE CITY OF CARLSBAD COMBINING BALANCE SHEET ALL DEBT SERVICE FUNDS June 30, 1986 Totals ASSETS: Cash and savings held by trustee U.S. Government securities, at cost, (approximates market) Due from Revenue Fund TOTAL ASSETS Interest $ 5 10,945 _£_ 10,950 Retirement $ 166 24,834 $ 25.000 Reserve $ 4,361 19,356 $ 23,717 1986 $ 4,532 19,356 35,779 i__5 9j_6_6 7 1985 $ 30,532 29,117 JL59.649 LIABILITIES: Due to Revenue Fund $ 5,692 $ 5,692 $ 3,474 FUND BALANCE (Note 4): Reserved for payment of bond principal and interest TOTAL LIABILITIES AND FUND BALANCE $ 10,950 $ 25,000 18,025 10,950 $ 25,000 $ 23,717 53,975 56,175 See accompanying accountants' report and notes to financial statements. 8 BUILDING AUTHORITY OF THE CITY OF CARLSBAD COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - ALL DEBT SERVICE FUNDS For the fiscal year ended June 30, 1986 REVENUE: Interest on investments Interest Retirement Reserve Totals 1986 1985 57 $ 164 $ 1,518 $ 1,739 $ 3,284 EXPENDITURES: Interest 12,450 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES (12,393) OTHER FINANCING SOURCES (USES): Bonds paid Operating transfers in 10,893 Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) 10,893 EXCESS (DEFICIENCY) OF REVENUE AND OTHER SOURCES OVER EXPEN- DITURES AND OTHER USES (1,500) FUND BALANCE, July 1, 1985 12,450 FUND BALANCE, June 30, 1986 12,450 13,800 164 (25,000) 24,836 (164) . 25,000 1 25,000 1,518 (10,711) (25,000) 35,729 (2,218) (2,218) (2,218) 8,511 (700) (-2,200) 18,725 56,175 $ 18,025 $ 53,975 (10,516) (25,000) 40,317 (1,151) 14,166 3,650 52,525 i 56_J75 See accompanying accountants' report and notes to financial statements.