HomeMy WebLinkAbout; ; 1988 Building Authority Financial Statements; 1988-06-30KPMG Peat Marwick
Certified Public Accountants
BUILDING AUTHORITY OF THE
CITY OF CARLSBAD
Financial Statements
June 30, 1988
(With Independent Auditors' Report Thereon)
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Table of Contents
June 30, 1988
Page
Independent Auditors' 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
Notes to Combined Financial Statements 4-9
Supplementary Statements and Schedule:
Combining Balance Sheet - Debt Service Funds 10
Combining Statement of Revenue, Expenditures and Changes
in Fund Balance - Debt Service Funds 11
Schedule of Insurance Coverage 12
Peat Marwick
Certified Public Accountants
Peat Marwick Main & Co.
225 Broadway, Suite 1400
San Diego, CA 92101
Independent Auditors' Report
The Board of Directors
Building Authority of the
City of Carlsbad, California:
We have audited the accompanying component unit financial statements of the
Building Authority of the City of Carlsbad, California (the Authority) as
of and for the year ended June 30, 1988, as listed in the accompanying
table of contents. These component unit financial statements are the
responsibility of the Authority's management. Our responsibility is to
express an opinion on these component unit financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the component unit financial statements referred to above
present fairly, in all material respects, the financial position of the
Building Authority of the City of Carlsbad, California, as of June 30,
1988, and the results of its operations for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the component
unit financial statements taken as a whole. The combining financial
statements and schedule listed in the accompanying table of contents are
presented for purposes of additional analysis and are not a required part
of the component unit financial statements of the Building Authority of the
City of Carlsbad, California. Such information has been subjected to the
auditing procedures applied in the audit of the component unit financial
statements and, in our opinion, is fairly presented in all material
respects in relation to the component unit financial statements taken as a
whole.
October 28, 1988
Member Firm of
Klynveld Peat Marwick Goerdeler
BUILDING AUTHORITY OF THE
CITY OF CARLSBAD
Combined Balance Sheet - All Governmental Fund
Types and Account Group
June 30, 1988
Governmental Fund Types
Assets
Cash and investments
Net investment in direct
financing lease
Due from other funds
Interest receivable
Amount available in debt service funds
Amount to be provided for retirement of
general long-term debt
Total assets
Liabilities and Fund Balance
Liabilities:
Due to other funds
Deferred revenue
Revenue bonds payable
Total liabilities
Fund balance:
Reserved for debt service
Unreserved - undesignated
Total fund balance
Total liabilities and
fund balance
Notes
3
4
General
$ 41,664
95,000
325
136.989
3,600
95,000
98,600
38.389
38,389
136.989
Debt
Service
47,375
3,600
50,975
50,975
Account Group
General Totals
Long-Term (Memorandum
Debt
50,975
94,025
145.000
145,000
145,000
145.000
Only)
89,039
95,000
3,600
325
50,975
94.025
332,964
3,600
95,000
145,000
243,600
50,975
38,389
89.364
332.964
See accompanying notes to combined financial statements,
BUILDING AUTHORITY OF THE
CITY OF CARLSBAD
Combined Statement of Revenues, Expenditures and Changes in
Fund Balance - All Governmental Fund Types
For the year ended June 30, 1988
Revenues:
Lease payments
Interest on investments
Total revenues
Expenditures:
Principal retirement
Interest
Administrative expenses
Total expenditures
Excess (deficiency)
of revenue
over expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Total other financing
sources (uses)
General
$ 36,000
4.963
40.963
5.541
5.541
35.422
1,547
(32.950)
Excess (deficiency) of
revenues and other financing
sources over expenditures
and other financing uses 4,019
Debt
Service
1.547
1.547
25,000
9,450
34.450
(32.903)
32,950
(1.547)
31.403
Totals
(Memorandum
Only)
36,000
6.510
42.510
25,000
9,450
5.541
39.991
Fund balance at beginning of year
Fund balance at end of year
34.370
38.389
(1,500) 2,519
52.475 86.845
50.975 89.364
See accompanying notes to combined financial statements.
3
BUILDING AUTHORITY OF THE
CITY OF CARLSBAD
Notes to Combined Financial Statements
June 30, 1988
(1) Summary of Significant Accounting Policies
The Building Authority of the City of Carlsbad (the Authority) was
organized on 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 the City of Carlsbad.
The accounting policies of the Authority conform to generally accepted
accounting principles as applicable to governmental units. The
following is a summary of the more significant policies:
(a) Relationship to the City of Carlsbad
The Authority is an integral part of the reporting entity of the City
of Carlsbad (the City). The accounts of the Authority have been
included within the scope of the general purpose financial
statements of the City because the City Council of the City
exercises oversight responsibility over the operations of the
Authority. Only the accounts of the Authority are included herein;
therefore, these financial statements do not purport to represent
the financial position or results of operations of the City of
Carlsbad, California.
(b) Basis of Presentation
The accounts of the Authority are organized on the basis of funds or
account groups, each of which is considered to be a separate
accounting entity. The operations of each fund or account group
are accounted for by providing a separate set of self-balancing
accounts that comprise its assets, liabilities, fund balance,
revenues, and expenditures. The various funds and account group
are summarized by type in the financial statements. The fund types
and account group used by the Authority are as follows:
(Continued)
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(1) Summary of Significant Accounting Policies. Continued
(b) Basis of Presentation. Continued
GOVERNMENTAL FUND TYPES;
Governmental funds are used to account for the Authority's expendable
financial resources and related liabilities. The measurement focus
is upon determination of changes in financial position. The
following are the Authority's governmental fund types:
General Fund
The general fund is the general operating fund of the Authority. It
is used to account for all financial resources except those
required to be accounted for in another fund.
Debt Service Funds
Debt service funds are used to account for the accumulation of
resources for, and payment of, general long-term debt, principal,
interest and related costs.
GENERAL LONG TERM DEBT ACCOUNT GROUP:
This account group is used to establish accounting control and
accountability for the Authority's general long-term debt. It is
used to account for all long-term obligations of the Authority.
(c) Measurement Focus and Basis for Accounting
Governmental fund types are accounted for on a "spending" measurement
focus. Accordingly, only current assets and current liabilities
are included on their balance sheets, and the reported fund balance
provides an indication of available, spendable resources.
Operating statements for governmental fund types report increases
(revenues) and decreases (expenditures) in available spendable
resources.
Governmental fund types use the modified accrual basis of accounting.
Revenues are recognized when susceptible to accrual, i.e., both
measurable and available. Available means collectible within the
current period or soon enough thereafter to be used to pay
liabilities of the current period.
(Continued)
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(1) Summary of Significant Accounting Policies, Continued
(c) Measurement Focus and Basis for Accounting, Continued
Revenues that are accrued include interest income.
Governmental fund expenditures are recognized when the liability is
incurred except for principal and interest on long-term debt, which
is recognized when due.
(d) Investments
Investments are stated at cost or amortized cost which approximates
market value.
(e) Total Columns
Total columns on the combined statements are captioned "Totals
(Memorandum Only)" to indicate that they are presented only to
facilitate financial analysis. Data in these columns do not
present financial position, results of operations, 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.
(2) Cash and Investments
Authority for Deposits and Investments;
State statutes require that all deposits be insured or
collateralized. Depositories holding public funds on deposit are
required to maintain collateral in the form of a pool of securities
with the agent of the depositor having a market value of at least
10 to 15 percent in excess of the total amount of all public funds
on deposit. Investments are further limited by the Authority's
policy to invest only in U.S. government obligations purchased
through its Trustee.
(Continued)
6*
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(2) Cash and Investments. Continued
Classification of Cash and Investments by Credit Risk;
As defined in Governmental Accounting Standards Board Statement
No. 3, the Authority's investments are categorized in the following
manner:
Category 1: Investments that are insured or registered, and where
the securities are held by the Authority or its agent
in the Authority's name.
Category 2: Uninsured and unregistered investments, and where the
securities are held by the broker's or dealer's trust
department or agent in the Authority's name.
Category 3: Uninsured and unregistered investments and where the
securities are held by the broker or dealer, or by its
trust department or agent, but not in the Authority's
name.
Cash and investments at June 30, 1988 consisted of and are categorized as
follows:
Cost Market Value
Cash on deposit $ 10,726 10,726
(All 100% insured or collateralized)
U.S. Treasury Bills (Category 2)
Total
(3) Lease Agreements
The Authority has leased the site for the Civic Center from the City
under a ground lease dated November 1, 1967 for a total advance rental
payment of $1. The lease expires upon expiration of the Joint Powers
Agreement between the Authority and the City.
(Continued)
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(3) Lease Agreement. Continued
On the same date, the Authority entered into an agreement with the City
to lease back to it the Civic Center site and the facilities to be
constructed thereon. The agreement requires annual lease payments of
$36,000 payable in advance on each July 1 until the Authority's revenue
bonds have been paid or provision for payment has been made. In
addition, the City must pay, upon written notice, all taxes,
assessments, insurance and administrative costs of the Authority. The
lease expires on September 30, 2007 or upon final payment of the
bonds. This lease has been accounted for as a direct financing lease.
(4) Revenue Bonds Payable
The following is a summary of changes in revenue bonds payable for the
year ended June 30, 1988:
Revenue bonds payable as of June 30, 1987 $ 170,000
Bonds retired (25.000)
Revenue bonds payable as of June 30, 1988 $ 145.000
The Authority issued the 1967 Carlsbad Building Authority Revenue Bonds
in an original amount of $460,000 with interest payable at 6.0% per
annum. The bonds were issued under a trust indenture with Crocker
National Bank as Trustee. The bonds mature serially on December 15 of
each year in amounts ranging from $25,000 to $35,000.
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.
Debt service requirements to maturity are as follows:
1989 $ 32,950
1990 31,450
1991 34,800
1992 33,000
1993 36.050
168,250
Less amounts representing interest 23.250
$ 145.000
(Continued)
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(4) Revenue Bonds Payablef Continued
In accordance with the terms of the bond indenture, cash balances of the
following funds are restricted to be used for specified purposes as
follows:
General Fund - An amount necessary to pay administrative expenses and
maintain $1,500 in working capital shall be maintained in this fund.
Amounts accumulated after meeting the requirements of the interest,
principal retirement, and reserve funds and the working capital
requirements shall be declared surplus and may be used to reimburse the
City for rent previously paid.
Debt Service Funds;
Interest and Principal 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 shall be
transferred to these funds as necessary from the General Fund.
Reserve Fund - An amount at least equal to one half the maximum
annual debt service ($18,025) shall be maintained at all times. Any
excess shall on June 30, and December 30 of each year be transferred
to the General Fund. Moneys in this fund may be used to pay the
principal and/or interest on the last maturity of bonds outstanding.
SUPPLEMENTARY STATEMENTS AND SCHEDULE
BUILDING AUTHORITY OF THE
CITY OF CARLSBAD
Combining Balance Sheet - Debt Service Funds
June 30, 1988
Assets
Cash and investments
Due from general fund
Total assets
Fund Balance
Reserved for debt service
Total fund balance
Interest
4,350
3.600
7.950
7.950
Principal
Retirement Reserve Totals
25,000 18,025 47,375
,600
25.000 18.025 50.975
10
BUILDING AUTHORITY OF THE
CITY OF CARLSBAD
Combining Statement of Revenue, Expenditures and Changes
in Fund Balance - Debt Service Funds
For the year ended June 30, 1988
Interest
Revenue - interest
on investments $ -
Expenditures:
Principal retirement
Interest
Total expenditures
Excess (deficiency)
of revenue
over expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Total other financing
sources (uses)
Excess (deficiency)
of revenue
and other financing
sources over
expenditures and
other financing
uses (1,500)
Fund balance at beginning of year 9.450
Fund balance at end of year $ 7.950
Principal
Retirement Reserve Totals
9.450
9.450
(9,450)
7,950
7.950
25,000
25.000
(25.000)
25,000
25.000
25.000
25.000
1.547
25,000
1.547 (32.903)
32,950
(1.547) (1.547)
(1.547)
18.025 50.975
11
BUILDING AUTHORITY OF THE
CITY OF CARLSBAD
Schedule of Insurance Coverage
June 30, 1988
Insurance coverage maintained by the City of Carlsbad with the Authority
listed as additional insured at June 30, 1988 includes:
Type of Coverage
All risk including valuable
papers and rental income
Equipment floater
Honesty Blanket bond
Amount
26,074,000
725,639
500,000
Term
10/01/87 to 10/01/88
10/01/87 to 10/01/88
04/16/88 to 04/16/89
Effective as of January 1, 1986, the Authority has not been covered under
a liability insurance policy but is included under the City of
Carlsbad's self-insurance fund.
I
12