HomeMy WebLinkAbout; ; 1989 Building Authority Financial Statements; 1989-06-30KPMG Peat Marwick
Certified Public Accountants
BUILDING AUTHORITY OF THE
CITY OF CARLSBAD
Combined Financial Statements
June 30, 1989
(With Independent Auditors' Report Thereon)
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Table of Contents
June 30, 1989
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
t
Peat Marwick
Certified Public Accountants
Peat Marwick Main & Co.
750 B Street
San Diego, CA92101
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 (the Authority) as of and for the
year ended June 30, 1989, as listed in the accompanying table of contents.
These component unit financial statements are the responsibility of the
4 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 as of June 30, 1989, and the
results of its operations for the year then ended in conformity with generally
accepted accounting principles.
t
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.
f 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 20, 1989
t
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, 1989
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
2
3
5
5
4
General
80,464
70,525
1,450
369
152.808
106,525
106,525
46.283
46,283
152.808
Debt
Service
50,925
50,925
1,450
1.450
49,475
49,475
50,925
Account Group
General
Long-Term
Debt
49,475
70,525
120,000
120,000
120,000
Totals
(Memorandum
Only)
131,389
70,525
1,450
369
49,475
70.525
323.733
120.000
1,450
106,525
120.000
227,975
49,475
46,283
95.758
323.733
See accompanying notes to combined financial statements.
2
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, 1989
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
5.694
41.694
4.294
4.294
37.400
1,944
(31.450)
(29.506)
Excess (deficiency) of
revenues and other financing
sources over expenditures
and other financing uses 7,894
Debt
Service
1.944
1.944
25,000
7,950
32.950
(31.006)
31,450
(1.944)
29.506
Totals
(Memorandum
Only)
36,000
7.638
43.638
25,000
7,950
37.244
6.394
33,394
(33.394)
Fund balance at beginning of year
Fund balance at end of year
38.389
46.283
(1,500) 6,394
50.975 89.364
49.475 95.758
See accompanying notes to combined financial statements.
3
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Notes to Combined Financial Statements
June 30, 1989
(1) Organization and 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 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 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.
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) 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) Organization and Summary rtf Significant Accounting Policiest Continued
(a) 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.
•
(b) Measurement Focus and Basis for Accounting!
Governmental fund types are accounted for on a "spending" measurement
focus. Accordingly, only current assets and current liabilities
generally 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) Organization and Summary of Significant Accounting Policies. Continued
(b) 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.
(c) Budgets
The Authority does not adopt an annual budget; thus, no budgetary
comparisons are presented.
(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
depository having a market value of at least 10 to 50 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)
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(2) Cash and Investments. Continued
Classification of Investments bv 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, for which
the securities are held by the Authority or its agent
in the Authority's name.
Category 2: Uninsured and unregistered investments, for which 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, for which 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, 1989 consisted of the following:
Cost Market Value
Cash on deposit (All 100% insured) $ 14,243 14,243
U.S. Treasury Bills (Category 2) 117.146 117.462
Total $ 131.389 131.705
(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 the City 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, 1989:
Revenue bonds payable as of June 30, 1988 $ 145,000
Bonds retired (25.000)
Revenue bonds payable as of June 30, 1989 $ 120.000
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:
1990 $ 31,450
1991 34,800
1992 33,000
1993 36.050
135,300
Less amounts representing interest 15.300
$ 120.000
(Continued)
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Notes to Combined Financial Statements, Continued
(4) Revenue Bonds Payable. 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.
(5) Due To and From Other Funds
The following table shows amounts due from the debt service funds of the
Authority to the general fund of the Authority at June 30, 1989:
Due to:
General Fund
Due from:
Principal retirement $ 836
Reserve 614
Total $ 1.450
SUPPLEMENTARY STATEMENTS AND SCHEDULE
10
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Combining Balance Sheet - Debt Service Funds
June 30, 1989
Principal
Interest Retirement Reserve Totals
Assets
Cash and investments $ 6.450 25.836 18.639 50.925
Liabilities and Fund Balance
Liabilities - due to other fund - . 836 614 1,450
Fund balance -
reserved for debt service 6,450 25.000 18.025 49.475
Total liabilities
and fund balance $ 6.450 25.836 18.639 50.925
11
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, 1989
Interest
Principal
Retirement Reserve Totals
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
Fund balance at beginning
of year
Fund balance at end of year
7.950
7.950
(7.95Q)
6,450
6.450
(1,500)
7.950
$ 6.450
836
25,000
25.000
(24.164)
25,000
(836)
24.164
25.000
25.000
1.108
25,000
7.950
32.950
1.108 (31.006)
31,450
(JLJ£S) (1.944)
(1.108) 29.506
(1,500)
18.025 50.975
18.025 49.475
12
BUILDING AUTHORITY OF THE CITY OF CARLSBAD
Schedule of Insurance Coverage
June 30, 1989
Insurance coverage maintained by the City of Carlsbad with the Authority
lieted as additional insured at June 30, 1989 includes:
Tvoe of Coverage
All risk including valuable
papers
Rental income
Equipment floater
Honesty Blanket bond
Amount
$ 29,817,731
72,000
725,639
1,500,000
Term
10/01/88 to 10/01/89
10/01/88 to 10/01/89
10/01/88 to 10/01/89
04/16/89 to 04/16/90
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.
f
13