HomeMy WebLinkAbout; ; 1991 CMWD CAFR; 1991-06-30CARLSBAD MUNICIPAL WATER DISTRICT
Comprehensive Annual Financial Report
for Fiscal Year Ending June 30, 1991
Introductory Section - A
Comprehensive Annual Financial Report
for Fiscal Year Ending June 30, 1991
Table of Contents
Introductoiy Section
Transmittal Letter A-1
District Purposes and Powers A-2
District Officials A-3
District Organizational Chart A-4
Financial Section
Auditor's Opinion B-1
Balance Sheets B-2
Statement of Operations B-4
Statement of Changes in Equity B-5
Statement of Cash Flows B-6
Notes to Financial Statements B-8
Water Treatment, Transmission and Distribution,
and Administrative and General Expenses B-25
Improvement Districts' Balance Sheet B-26
Improvement Districts' Statement of
Revenues and Expenditures B-27
Supplemental Section
Water Purchases (1986/87 thru 1990/91) C-1
Agricultural Usage (1986/87 thru 1990/91) C-2
Water Purchases and Agricultural Usage - Graph C-3
Cost of Purchased Water (1986/87 thru 1990/91) C-4
Employee Summaries C-5
3
%
Carlsbad
Municipal Water District
5950 El Camino Real, Carlsbad, CA 92008
Engineering: (619) 438-3367
Administration: (619) 438-2722
Fax: (619) 431-1601
Board of Directors
Carlsbad Municipal Water District
5950 El Camino Real
Carlsbad, California 92008
Fiscal Year 1990-91 was another milestone in the development of the
Carlsbad Municipal Water District. Fiscal year 1990-91 was the
first full year that the District acted as a subsidiary district of
the City of Carlsbad. A tremendous amount of effort by City and
District staff culminated with a series of Board actions that laid
the groundwork for changes in the District's functions._ The
actions that are most noteworthy include a full consolidation of
all water-related services and integration of the District's
administrative seirvices into the City's structure.
For the first time in Carlsbad's history, all water-related
services have been combined within the District's service area.
The District is now responsible for operations and maintenance of
the water and sewer systems, water billing and capital project
construction. In addition, the District is now operating and
maintaining the ever-expanding water reclamation system.
Another benefit from the subsidiary district formation is the
consolidation of the District's various administrative services
with the City's structure. This new relationship provides the
District with assistance from professionals in all issues including
finance, law, human resources, purchasing and risk management.
As evidenced by the following documents, the District's financial
situation is continuing to be very sound. In the next few years
the District is scheduled to construct a number of large capital
projects. A reclaimed water system, major potable water pipelines
and large storage reservoirs are all scheduled to occur in the very
near future. Good planning and close monitoring of the District's
financial condition will be essential to ensure funding of these
critical projects.
As in past years, the accomplishments of the District for the past
year could not have occurred without the commitment from both the
Board of Directors and the Water Commission. Their hard work makes
the staff's job so much easier to complete.
Last but definitely not least, a special thanks goes out to every
member of the District and City staff. Our combined efforts have
made the District what it is today, and will ensure a safe and
reliable water supply for Carlsbad's future.
Robert J. GrJ^anjiy
General Manacer
"Serving Carlsbad for over 35 years"
District Purposes and Powers
The Carkbad Municipal Water District (fonnerly Costa Real Mimicipal Water District) was
formed March 22,1954, under the Municipal Water District Act of 1911, to apply for water service
from the San Diego County Water Authority. Local water sources had been utilized to the extent
that an altemate supply was required to meet the demands of Carlsbad. Now in its 37th year of
service, the District has kept pace with the phenomenal demands of an area that is experiencing
tremendous growth. However, just as significantly, the District has retained a "work ethic" that
meets the extremely high level of service that the residents of Carlsbad have grown accustomed to
receiving. This commitment, on the part of all public service providers in the City, has contributed
to the evolution of Carlsbad into one of the most desirable communities in all of San Diego County.
The District's Board of Directors sets all rates and fees which are required for operations and
maintenance of District facilities, principal and interest on debt obligations, and system replacement
and expansion. Expenditures are funded from the various revenue sources available to the District
dependent upon the project's beneficiary. Projects that benefit future residents in the form of new
construction or expansion of existing facilities are funded by fees collected when a building permit
is issued. Likewise, the replacement of existing projects and the day-to-day operations of the
District are funded primarily by water rates. This system ensures equitable financing of all District
activities.
A-2
Carlsbad Munidpal Water District
Listing of District Officials
Board of Directors
Claude "Bud" Lewis, President
Aim Kulchin, Vice President
Eric Larson
JuUanne Nygaard
Margaret Stanton
Water Commission
Fred Maerkle, Chair
Roger Greer, Vice Chair
Margaret Bonas
John Henley
E. J. Woodward, Jr.
Officials
Raymond Patchett, Executive Manager
Robert Greaney, General Manager
Bob Coates, Acting District Engineer
Geoffrey Poole, Administrative Manager
Kurt Musser, Superintendent
A-3
Carlsbad Municipal Water District
Organizational Chart
Board of Directors
r Executive "1
I Manager '
J Water i
"1 Commission '
Receptionist
["Administrative"!
I Manager I
I ^ I
[General Manager/1
District Engineer
Accountant
Accounting
Office Asst.
Engineering
Secretary
Engineering
Office Asst.
r — .-^ •: 1
I Engineering • I Manager I
I ^ I
Senior Engr.
Technician
Engineering
Tecfi. Ill
Engineering
Tech . II
Senior Eng.
Inspector (2)
Executive
Secretary
1
ISuperlntendent I
System Oper.
Supervisor
1
Senior System
Operator
System
Operator II (4)
Const./Maint.
Supervisor
Senior Const./
Maint. Worker
Const./Maint.
Worker 11
Const./Maint.
Worker I (2)
1
Service
Coordinator Storekeeper
Equipment
Operator
Facility Maint,
Leadw/orker
11-27-90
Financial Section - B
CARLSBAD MUNICIPAL WATER DISTRICT
Financial Statements and Schedules
June 30, 1991 and 1990
(With Independent Auditors' Report Thereon)
KPMG Peat Marwick
Certified Public Accountants
750 B Street
San Diego, CA 92101
Independent Auditors' Report
The Board of Directors
Carlsbad Municipal Water District:
We have audited the accompanying balance sheets of Carlsbad Municipal Water
District as of Jvine 30, 1991 and 1990, and the related statements of
operations, changes in equity and cash flows for the years then ended. These
component unit financial statements are the responsibility of the District's
management. Our responsibility is to express an opinion on these component
unit financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the component unit financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the component
unit financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall component unit financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the component unit fineuicial statements referred to above
present fairly, in all material respects, the financial position of Carlsbad
Municipal Water District as of Jtine 30, 1991 and 1990, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the component
unit financial statements taken as a whole. The supplementary information
included in Schedules 1 through 3 is presented for purposes of additional
analysis and is not a required part of the component vinit financial
statements. Such supplementary information, except for that portion marked
"unaudited," on which we express no opinion, has been subjected to the
auditing procedures applied in the audits of the component unit financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the component unit financial statements taken as a whole.
September 20, 1991
B-1
Member Firm of
Klynveld Peat Marwick Goerdeler
CARLSBAD MUNICIPAL WATER DISTRICT
Balance Sheets
June 30, 1991 and 1990
Assets 1991 1990
Current assets:
Cash and cash equivalents (note 2) i 8,234,659 6,007,658
Time certificates of deposit (note 2) 895,000 2,482,000
Accounts receivable 2,056,817 2,095,605
Inventories 177.317 191.805
Total current assets 11.363.793 10.777.068
Restricted assets:
Cash and cash equivalents (note 2) 1,772,181 2,278,459
Investments (note 2) 1,417,015 1,339,058
Interest receivable 18.826 214.456
Total restricted assets 3.208.022 3.831.973
Deferred compensation investments (notes 2 and 10) 1,101,849 862,010
Utility plant (note 3):
Property and equipment, at cost, net of
accumulated depreciation 41,035,792 30,340,339
Construction in progress 743.952 8.914.026
Total utility plant 41.779.744 39.254.365
$ 57.453.408 54.725.416
B-2 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Balance Sheets, Continued
June 30, 1991 and 1990
Liabilities and Equity
Current liabilities:
Accounts payable
Current portion of certificates of
participation payable (note 4)
Interest payable
Accrued expenses
Construction deposits
Total current
unrestricted liabilities
Current liabilities payable from restricted assets;
Current portion of bonds payable (note 5)
Accrued interest and unredeemed bonds and
bond coupons
Total current liabilities
Certificates of participation payable, net of
unamortized issuance costs of $373,940 in
1991 and $400,650 in 1990 (note 4)
Bonds payable
Deferred compensation payable (note 10)
Total liabilities
Equity:
Contributed capital
Retained eamings:
Reserved (note 6)
Unreserved:
Designated (note 6)
Undesignated
Total equity
1991
666,264
645,000
147,088
324,904
71.352
1,854,608
40,000
14.441
1,909,049
11,681,060
1.101.849
34,127,185
570,718
3,069,936
4.993.611
42.761.450
$ 57.453.408
mo
740,598
610,000
153,188
326,040
152.218
1,982,044
623,000
35.308
2,640,352
12,299,350
40,000
862.010
14.691.958 15,841,712
31,059,870
1,154,420
2,710,416
3,958,998
38.883.704
54.725.416
See accompanying notes to financial statements.
B-3
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Operations
Years ended June 30, 1991 and 1990
1990
(as restated,
see note 7)
Operating revenues:
Water sales
Cost of water sales
Gross margin from water sales
Facilities revenue
Miscellaneous revenue
Operating expenses:
Water treatment
Transmission, distribution and maintenance
Administrative and general
Reimbursement agreement
Depreciation
Loss on disposal of assets
Total operating expenses
Loss from operations
Other income (expense):
Property taxes
Interest earned
Rent
Interest expense, net of capitalized interest
Amortization of debt issuance costs
Total other income, net
Net income
$ 6,306,926 6,513,806
(4.455.951) (4.969.862)
1,850,975
871,917
172.932
2.895.824
73,501
1,002,943
1,360,565
26,886
763,170
3.227.065
(331.241)
722,510
1,044,521
21,305
(619,954)
(26.710)
1.141.672
$ 810.431
1,543,944
988,815
194.595
2,727,354
74,346
965,444
1,163,687
24,561
648,974
82.908
2.959.920
(232,566)
668,427
1,524,172
19,775
(645,557)
(26.710)
1,540,107
1.307.541
See accompanying notes to financial statements.
B-4
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Changes in Equity
For the years ended June 30, 1991 and 1990
Balance at June 30, 1989
Prior period adjustment
(note 7)
Adjusted June 30, 1989 balance
Net income
Capital contributions:
Cash
Fixed assets
Transfer pursuant to debt
agreements (note 6)
Transfer from designated
retained earnings (note 6)
Balance at June 30, 1990
Net income
Capital contributions:
Cash
Fixed assets
Transfer pursuant to
debt agreements (note 6)
Transfer to designated
retained earnings (note 6)
Balance at June 30, 1991
Contri buted
Capital
$ 18,880,916
9.562.564
Retained Earnings
Unreserved- Unreserved-
Reserved Designated Undesignated
1,135,886 14,399,413
= (9.019.006)
28,443,480 1,135,886 5,380,407
1,672,479
943,911
31,059,570
1,779,841
1,287,474
$ 34.127.185
18,534
(583,702)
359.520
543,558
(543.558)
1,307,541
(18,534)
= (2.669.991) 2.669.991
1,154,420 2,710,416 3,958,998
810,431
583,702
(359.520)
Total
34,959,773
34,959,773
1,307,541
1,672,479
943,911
38,883,704
810,431
1,779,841
1,287,474
57Q.7]g 3.069.936 4.993.611 42.761.450
See accompanying notes to financial statements.
B-5
CARLSBAD MUNICIPAL WATER DISTRICT
Statements of Cash Flows
For the years ended June 30, 1991 and 1990
1990
(as restated,
1991 see note 7)
Cash flows from operating activities:
Loss from operations $ (331,241) (232,566)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 763,170 648,974
(Increase) decrease in accounts receivables 38,788 (136,684)
(Increase) decrease in inventories 14,488 (29,755)
Decrease in accounts payable and
accrued expenses (75.470) (288.812)
Net cash provided by (used in)
operating activities 409.735 (38.843)
Cash flows from non-capital financing activities:
Property taxes received 722,510 668,427
Rent received 21.305 19.775
Net cash provided by non-capital
financing activities 743.815 688.202
Cash flows from capital and related
financing activities:
Acquisition and construction of capital assets (1,663,668) (9,700,106)
Principal payments on bonds (623,000) (70,000)
Interest paid on bonds (972,361) (1,019,532)
Decrease in construction deposits (80,866) (3,696)
Decrease in notes payable - (20,502)
Principal pa3mients on certificate of
participation (610,000) (575,000)
(Decrease) increase in unredeemed
coupons and bonds payable (11,967) 1,867
Major facilities fees received 1.779.841 1.672.479
Net cash used in capital and
related financing activities (2.182.021) (9.714.490)
B-6 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Statement of Cash Flows, Continued
For the years ended June 30, 1991 and 1990
Cash flows from investing activities:
Net decrease in investments and time
certificates of deposit
Increase in deferred compensation payable
Increase in deferred compensation investments
Interest on investments
Net cash provided by
investing activities
Net increase (decrease) in cash and
cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental schedule of noncash investing
and financing activities - Capital assets
contributed by contractors
1991
$ 1,509,043
239,839
(239,839)
1.240.151
1990
(as restated,
see note 7)
7,257,277
215,043
(215,043)
1.510.647
2.749.194 8,767,924
1,720,723
8.286.117
$ 10.006.840
$ 1.287.474
(297,207)
8,583,324
8.286.117
943.911
See accompanying notes to financial statements.
B-7
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements
June 30, 1991 and 1990
(1) Reporting Entity and Simmiary of Significant Accounting Policies
(a) Reporting Entity;
The Carlsbad Municipal Water District, (the District) of the City of
Carlsbad (City) operates under a water service agreement with the
City wherein the District provides all capital facility financing
and development, operation and maintenance and planning for the
consolidated water system, and the City provides all customer
service functions for essentially the entire City of Carlsbad. The
District is a member of the San Diego County Water Authority, from
whom it purchases its water.
On January 1, 1990, the District was established as a component unit
of the City. The City and the District continued to function as
separate entities for reporting purposes through December 31, 1989.
The District is an integral part of the reporting entity of the
City. The accounts of the District 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 District. Only the accounts of the District
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 District maintains two fund types which are combined on the face
of the financial statements, the description of which is as follows:
(1) General Ftind - The general fund is used to accovint 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.
(2) Improvement District Ftinds - Improvement district funds 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.
B-8 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(1) Reporting Entity and Summary of Significant Accounting Policies. Continued
(b) Summary of Significant Accounting Policies:
The accovinting policies of the District conform to generally accepted
accounting principles as applicable to single enterprise funds.
Revenues and expenses are recorded on the accrual basis of
accounting. 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.
(i) Investments:
Investments are recorded at cost, which approximates market
value.
(ii) Inventories:
Inventories of materials are stated at weighted average
cost. Inventory of water is stated at the lower of cost
(last-in, first-out) or market.
(iii) Utility Plant:
Utility plant is stated at cost or, if donated, at estimated
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 estimated useful lives of the
respective assets.
(iv) Vacation and Sick Leave;
The District records a liability equal to 100 percent of
eligible vacation and sick leave available to employees.
(v) Interest Earned:
The District maintains centralized cash and investment
accounts in order to maximize investment retum. The
District allocates interest earned among the various funds
based on each fund's share of the cash and investment balance.
B-9 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(1) Reporting Entity and Summary of Significant Accounting Policies. Continued
(b) Summary of Significant Accounting Policies:
(vi) Cash and Cash Equivalents:
For purposes of the statement of cash flows, cash and cash
equivalents consists of cash on hand, and amounts in the
Local Agency Investment Fvind and County Treasurer Investment
Pool.
(vii) Debt Issuance Costs;
Debt issuance costs related to the 1988 COP are amortized
using a straight-line method over the 16-year life of the
issue.
(viii) Reclassifications:
Certain prior year amounts have been reclassified to conform
with current year presentation.
(2) Cash and Investments
Authorized deposits and investments of the District are govemed by the
California Govemment Code as well as policies set forth by the Board
of Directors. Within the contents of these limitations, permissible
investments include; obligations of the U.S. Treasury, agencies and
instrumentalities, bankers' acceptances, commercial paper rated by
Standard and Poor's Corporation or P-l by Moody's Commercial Paper
Record, and certificates of deposit issued by nationally or
state-chartered banks or federal or state savings and loans
associations. Funds may also be invested in the State Treasury's Local
Agency Investment Fund and the County Treasurer Investment Pool.
In order to diversify the District's portfolio, a policy was adopted
which provides for the District to only hold deposits and investments
totalling up to 30% of total available investment capital at any one
bank or savings and loan, up to the lesser of $5,000,000 or 50% of
total available investment capital in the Local Agency Investment Fund
and the option to invest with a registered investment advisory firm.
B-10 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(2) Cash and Investment. Continued
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. A svuranary of cash
and investments is as follows:
Deposits:
Cash
Time certificates of deposit
Deferred compensation investments
(certificates of deposit)
Investments (including cash equivalents)
Less restricted portion
Unrestricted cash and investments
mi
$ 205,185
895,000
1.101.849
2,202,034
11.218.670
13,420,704
3.189.196
$ 10.231.508
mo
235,645
2,482,000
862.010
3,579,655
9.389.530
12,969,185
3.617.517
9.351.668
A reconciliation of cash and cash equivalents for statement of cash flow
purposes is as follows:
Cash
Local Agency Investment Fvond
County Treasurer's Investment Pool
mi
$ 205,185
5,000,000
4.801.655
Total cash and cash equivalents $ 10.006.840
msi
235,645
5,000,000
3.050.472
8.286.117
Deposits;
The following summary presents the amount of the District's deposits
which are fully insured or collateralized with securities held by the
District or its agent in the District's name (Category One), those
deposits which are collateralized with securities held by the pledging
financial institution's trust department or agent in the District's
name (Category Two), and those deposits which are not collateralized or
are collateralized with securities held by the pledging financial
institution or its trust department or agent but not in the District's
name (Category Three) at June 30, 1991:
B-11 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(2) Cash and Investments. Continued
Cash
Time certificates of deposit
Deferred compensation investments
(certificates of deposit)
$
Category
One
120,459
895,000
1.101.849
$ 2.117.308
171,922
171.922
Three
Total Bank Carrying
Balance Amount
292,381
895,000
205,185
895,000
1.101.849 1.101.849
2.289.230 2.202.034
Investments:
The District categorizes investments according to the level of risk
assumed by the District. Category One includes investments that are
insured, registered or held by the District's agent in the District's
name. Category Two includes vininsured and unregistered investments
held by the counterparty's trust department or agent in the District's
name. Category Three includes xininsured and tmregistered investments
held by the counterparty, its trust department or its agent, but not in
the District's name. Certain investments have not been categorized
because securities are not used as evidence of the investment. These
uncategorized investments include ownership interests in pooled
investment funds. The summary below identifies the level of risk
assumed by the District and the total carrying amount and market value
of the District's investments at June 30, 1991.
Category Uncate-Carryi ng Market
One Two Three oorized Amount val ue
Local Agency
Investment Fund $ -5,000,000 5,000,000 5,000,000
County Treasurer
Investment Pool _ -4,801,655 4,801,655 4,801,655
U.S. Treasury Bills 1,345,098 -1,345,098 1,389,207
Money Market Fund
Total
71.917 _ 71.917 81.623 Money Market Fund
Total $ . 1.417.015 9.801.655 11.218.670 11.272.485
B-12 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(3) Utility Plant
A summary of utility plant and the related accumulated depreciation as of
June 30, 1991 and 1990 follows:
Cost of participation - San Diego
Water Authority
Land and easements
Reservoirs and dams
Pipelines and pumping stations
Chlorination stations
Meters and accessories
Buildings
Machinery and equipment
Office fixtures and equipment
Less accvjmulated depreciation
Construction in progress
Net utility plant
1991 1990
$ 33,175 33,175
1,644,436 1,023,186
16,111,281 9,650,951
24,752,639 20,615,977
662,810 83,267
944,393 662,810
486,133 2,206,372
83,267 823,589
2.238.980 410.777
46,957,114 35,510,104
5.921.322 5.169.765
41,035,792 30,340,339
743.952 8,914,026
$ 41.779.744 ,3?, 2^4,365
Interest costs incurred during construction of the District's projects
have been capitalized as costs of acquiring the assets and such costs
will be amortized on a straight-line basis over the life of the related
assets. Interest costs of $337,405 and $391,040 were capitalized in
1991 and 1990, respectively. Total interest costs incurred, including
capitalized amounts during these same periods, were $957,359 and
$1,036,597, respectively.
B-13 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(3) Utility Plant. Continued
Depreciation is computed on the straight-line method over the estimated
lives of the respective assets, as follows:
Assets
Reservoirs and dams
Pipelines and pumping stations
Chlorination stations
Meters and accessories
Buildings
Machinery and equipment
Office fixtures and equipment
Estimated
useful lives
25 to 75 years
50 years
25 to 40 years
25 to 40 years
40 years
5 to 20 years
5 to 10 years
(4) Certificates of Participation
In November 1988, the District issued $14,370,000 in Certificates of
Participation (1988 COP). A portion of the proceeds were used to
refund $12,000,000 of the outstanding 1984 Certificates of
Participation (1984 COP). The District deposited funds in an
irrevocable trust with an escrow agent to provide for all future
service payments on the 1984 COP. As a result, the 1984 COPs are
considered to be defeased and the liability for those certificates is
not included in the District's financial statements. At June 30, 1991,
$10,800,000 of outstanding 1984 COPs are considered defeased.
The 1988 COPs bear interest ranging from 5.6% to 7.3% per year, payable
semi-annually on May 1 and November 1. Principal payments are payable
annually through May 1, 2004. The debt agreement stipulates that the
District adhere to specified covenants. At June 30, 1991, the District
was in compliance with these requirements.
B-14 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(4) Certificates of Participation. Continued
Principal maturities of the 1988 COPs during the years subsequent to
June 30, 1991 are as follows:
1992
1993
1994
1995
1996
Thereafter
Less unamortized issuance costs
Less current portion
$ 645,000
685,000
730,000
775,000
825,000
9.040.000
12,700,000
(373,940)
(645.000)
$ 11.681.060
(5) Bonds Payable
Bonds payable at June 30, 1991 are as follows;
Date of issue
Coupon interest rates
Interest pasrment dates
Principal payment dates
Authorized and issued
Redeemed as of June 30, 1991
Outstanding as of June 30, 1991
(Due on December 1, 1991)
Improvement
District 4
1961
3.5 & 4.0%
6/1 S. 12/1
12/1
690,000
(650.000)
$ 40.000
B-15 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(6) Reserved/Designated Retained Eamings
The following is a summary of reserved/designated retained eamings as of
June 30, 1991 and 1990:
1991 1990
Reserved pursuant to debt agreements:
Debt service $ 40,000 623,702
Acquisition 530.718 530.718
* 570.718 1.154.420
Designated for:
Contingencies 1,769,549 1,856,112
Construction 500,000 500,000
Replacement projects 800.387 354.304
$ 3.069.936 2.710.416
The following reserves have been established pursuant to debt agreements:
(a) Debt Service:
These reserves were established in conjunction with the various bond
issues. The reservations are restricted to the pasrraent of current
bond service requirements.
(b) Acquisition;
The original bond issues of the District were for the purpose of
acquisition of facilities. To date, through various reimbursements
to these acquisition funds, there remains $530,718 reserved for
acquisition purposes.
The following designations of retained eamings have been established:
(a) Contingencies:
During fiscal 1991 and 1990, the Board of Directors designated an
amount equal to 25% of the subsequent years 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 (Note 8). The "stand by" fees provide a source
of revenue even if water sales are significantly reduced. Amounts
appropriated are to be used for operations in the event of a
B-16 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(6) Reserved/Designated Retained Eamings. Continued
(a) Contingencies. Continued:
temporary decline in water revenue from an unforeseen event. The
designated amount was $1,769,549 and $1,856,112 at June 30, 1991
and 1990, respectively.
(b) Construction:
During fiscal 1985, the Board of Directors designated an amotmt 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.
(c) Replacement Projects;
During fiscal 1984, the Board of Directors established a program for
funding replacement projects. The balances of $800,387 and $354,304
at June 30, 1991 and 1990, respectively, are the cumulative result
of fees collected and expenditures identified as replacement
projects during the period that this program has been in place.
(7) Prior Period Adjustment
In prior years, the District recorded fees charged to developers to
connect to the water system as revenues rather than as contributed
capital. The 1990 financial statements have been restated to reflect
the reclassification of the accumulation of these fees in the amount of
$9,562,564 from retained eamings to contributed capital and to
appropriately present the 1990 fees as contributed capital rather than
as revenue.
(8) Agreement With the City of Carlsbad
As part of an agreement with the City of Carlsbad, the City has set aside
in a water utility fund, approximately $5,090,000 as of June 30, 1991,
for the acquisition and construction of certain specific projects which
will benefit the District. This agreement also specifies that if and
when a piece of property presently held by the City is sold or leased,
all proceeds will be donated to the District.
B-17 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(9) Defined Benefit Pension Plan
(a) Plan Description:
The District contributes to the California Public Employees'
Retirement System (PERS), an agent multiple-employer public
employee retirement system that acts as a common investment and
administrative agent for participating public entities within the
state of California. For the years ended June 30, 1991 and 1990,
the District's payroll for employees covered by the PERS was
$1,229,551 and $1,047,044, respectively. Total payroll for the
same period was $1,325,207 and $1,152,725, respectively.
All full-time District employees are eligible to participate as
members of the PERS. Benefits vest after five years of service.
District employees who retire at or after age 60 with five years of
credited service are entitled to an annual retirement benefit,
payable monthly for life, in an amount equal to 2% of their average
salary during their last 12 months of emplo)niient or another period
of 12 months selected by the member if the average pay rate was
higher. The PERS also provides death and disability benefits.
These benefit provisions and all other requirements are established
by state statute and District ordinance.
District employees contribute 7% of their anntial salary to the PERS.
This is paid by the District for the benefit of the employees in
lieu of salary. The District is required to contribute the
reraaining amounts necessary to fund the benefits for its members,
using the actuarial basis recommended by the PERS actuaries and
actuarial consultants and adopted by the Board of Administration.
(b) Funding Status and Progress:
The amount shown as the "pension benefit obligation" is a
standardized disclosure measure of the present value of pension
benefits, adjusted for the effects of projected salary increases
and step-rate benefits, estimated to be payable in the future as a
result of employee service to date. The measure is intended to
help users assess the funding status of the PERS on a going-concem
basis, assess progress made in accumulating sufficient assets to
pay benefits when due and make comparisons among employers. The
measure is the actuarial present value of credited projected
benefits and is independent of the funding method used to determine
contributions to the PERS.
B-18 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(9) Defined Benefit Pension Plan. Continued
(b) Funding Status and Progress, Continued:
The pension benefit obligation was computed as part of an actuarial
valuation performed as of Jtine 30, 1990. Significant actuarial
assumptions used in the valuation include;
(1) A rate of retum on the investment of present and future assets
of 8.5% a year compounded annually;
(2) Projected salary increases of 5% a year compounded annually,
attributable to inflation;
(3) Additional projected salary increases of 2% a year, attributable
to seniority/merit, and
(4) No post-retirement benefit increases.
Assets in excess of the pension benefit obligation applicable to the
District's employees totalled $88,617 at June 30, 1990 (the date of
the latest actuarial valuation), as follows:
Pension benefit obligation:
Retirees and beneficiaries currently receiving
benefits and terminated employees not yet
receiving benefits $ 485,676
Current employees:
Accumulated employee contributions, including
allocated investment eamings 500,674
Employer-financed vested 329,899
Employer-financed nonvested 58.549
Total pension benefit obligation 1,374,798
Net assets available for benefits, at cost
(market value, $1,659,513) 1.463.415
Assets in excess of the pension benefit
obligation $ 88.617
Changes in the pension benefit obligation from last
year due to changes in actuarial asstamptions $ 27.021
B-19 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(9) Defined Benefit Pension Plan. Continued
(c) Actuarially Determined Contribution Requirements and Contribution
Made:
PERS uses the Entry Age Normal Actuarial Cost Method which is a
projected benefit cost method. It takes into account those
benefits that are expected to be eamed in the future as well as
those already accrued. According to this cost method, the normal
cost for an employee is the level amount which would fund the
projected benefit if it were paid annually from date of employment
until retirement. PERS uses a modification of the Entry Age Cost
Method in which the employer's total normal cost is expressed as a
level percentage of payroll.
PERS also uses the level percentage of payroll method to amortize any
unfunded actuarial liabilities. At June 30, 1991 and 1990, the
District did not have any unfunded actuarial liabilities. The
amortization period of the unfunded actuarial liability ended on
June 30, 1990.
The significant actuarial assumptions used to compute the actuarially
determined contribution requirement are the same as those used to
compute the pension benefit obligation as described above.
The actuarially determined employer and employee contributions
applicable to the District at June 30, 1991 and 1990 were as
follows:
Required normal cost
contribution
Less overfunding
Total required
contributions
1991 1990
Contri-
butions
$ 183,916
$ 91.417
Covered
Payroll
Contri- Covered
butions Payroll
15.0 % 154,031 14.7 %
(92.499) (7.5)% (55.420) (5.3)%
99,^11 .4 %
B-20 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(9) Defined Benefit Pension Plan. Continued
(c) Actuarially Determined Contribution Requirements and Contribution
Made. Continued;
1221 mQ
Contri- Covered Contri- Covered
butions Payroll butions Payroll
Contributions made by
the District $ 71,741 5.8 % 80,826 7.7 %
Contributions made by
the District on
behalf of the employees 63.273 5-2 % 73,374
Total actual
contributions $ 135.014 % 154.200
The District has a surplus as a result of prior year actuarial
gains. In order to maintain a level pattern of contributions, the
District has chosen not to apply it to fully offset the current
years contributions.
The following is three-year trend information which gives an
indication of the progress made in accumulating sufficient assets
to pay benefits when due. The pension benefit obligation has not
yet been calculated by PERS for the plan year 1991; therefore, some
of the percentages noted below were not available (N/A) for
disclosure:
1991 1990 1989
Net assets available for benefits as
a percentage of pension benefit
obligation (PBO) N/A 106.5% 106.6%
Assets in excess of the PBO as a
percentage of annual covered payroll N/A 8.5% 7.4%
Actuarially determined employer
contributions as a percentage of
annual covered payroll -5% 2.4% 3.6%
B-21 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(9) Defined Benefit Pension Plan. Continued
(c) Actuarially Determined Contribution Requirements and Contribution
Made. Continued;
Ten-year historical trend information is not available from the
California Public Employees Retirement System; therefore, only the
available information is presented below.
Fiscal year ended Jtine 30.
1990 1989 1988 1987
Net assets available
for benefits
(at cost) $ 1,463,415 1,217,447 981,451 823,110
Pension benefit
obligation (PBO) 1,374,798 1,141,723 941,218 749,880
Net assets as a
% of PBO 106.5% 106.6% 104.3% 109.8%
Assets in excess
of PBO 88,617 75,730 40,240 73,240
Annual covered
payroll 1,047,044 1,026,090 960,250 825,380
Assets in excess of
PBO as a % of annual
covered payroll 8.5% 7.4% 4.2% 8.9%
B-22 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(10) Deferred Compensation Plan
The District offers its employees a deferred compensation plan created in
accordance with Internal Revenue Code Section 457. The plan, available
to all District employees, permits them to defer a portion of their
salary until future years. The deferred compensation is not available
to employees until termination, retirement, death, or unforeseen
emergency.
All amounts of compensation deferred under the plan, all investments and
rights purchased with those amotmts, and all income attributable to
those amounts, or rights, are (until paid or made available to the
employee or other beneficiary) solely the property and rights of 'the
District (without being restricted to the provisions of benefits under
the plan), subject only to the claims of the District's general
creditors. Participants' rights under the plan are equal to those of
general creditors of the District in an amount equal to the fair market
value of the deferred account of each participant.
The District believes it has no liability for losses under the plan but
does have the duty of due-care that would be required of an ordinary
prudent investor. The District believes that it is highly unlikely
that it will use the assets to satisfy the claims of general creditors
in the future.
(11) Post-retirement Health Care
In addition to the pension benefits described in Note 8, the District, in
accordance with the District's Administrative Code, provides
post-retirement health care benefits to full-time employees (including
their dependents) who voluntarily retired after the age of 50 with no
less than 5 years of service and whose age combined with years of
service equals 70 or more or who have reached the mandatory retirement
age with at least 5 years of service. Currently, one retiree meets
these eligibility requirements and is receiving benefits.
The District will pay 100% of the premiums for health insurance which
will be coordinated with Medicare and other benefits provided by
federal and state law, when available, to the extent it reduces the
cost of insurance premiums. Expenditures for post-retirement health
care benefits are funded on a pay-as-you-go basis. Expenditures of
approximately $1,182 and $974 were charged to expense for
post-retirement health care costs during 1991 and 1990, respectively.
B-23 (Continued)
CARLSBAD MUNICIPAL WATER DISTRICT
Notes to Financial Statements, Continued
(11) Post-retirement Health Care. Continued
Based on an actuarial valuation performed as of November 1991, the
District's liability for the current and past service costs of these
benefits is approximately $1,600,000.
(12) Commitments
Various construction contracts were in progress at June 30, 1991 with an
estimated cost to complete of approximately $800,000.
(13) Risk Management
The District is exposed to various risks of loss related to torts; damage
to and destruction of assets; errors and omissions; injuries to
employees; and natural disasters. The District has joined with other
water agencies in the State of Califomia to form the Joint Powers
Insurance Authority (JPIA), a public entity risk pool currently
operating as a common risk management and insurance program for 178
member water agencies. The District pays an annual premium to JPIA for
its general insurance coverage. Premiums are calculated by JPIA based
upon loss history at the District as well as for the water agencies
pool as a whole. The premium to the District for this coverage is
approximately $55,500 annually, although a portion may be rebated if
actual losses are less than originally estimated. The expense for the
year ended June 30, 1991 was approximately $35,000 after such rebates.
The Joint Powers Agreement creating the JPIA provides that the JPIA
will be self-insured for liability up to $500,000 per occurrence and
will reinsure through commercial companies for claims up to $19,500,000
for each insured event. Claims settlements have not exceeded coverage
provided by the JPIA pool.
B-24
Schedule 1
CARLSBAD MUNICIPAL WATER DISTRICT
Water Treatment, Transmission, Distribution and Maintenance
and Administrative and General Expenses
For the year ended June 30, 1991
(With comparative totals for the year ended June 30, 1990)
(Unaudited)
(Over)
under 1990
Water treatment, transmission,
distribution and maintenance
expenses:
Chlorine
Equipment, maintenance,
materials and supplies
Laboratory services testing
Labor
Water distribution
Pipeline installation
Pipeline repair and maintenance
Fire hydrant maintenance and
installation
Waterline markout
Vehicle maintenance
Facility maintenance
Total
Administrative and general:
Administration labor
Engineering
Professional fees
Directors fees and expenses
Utilities
Insurance
Office supplies and expense
Water conservation
Budget Actual Budget Actual
$ 15,000 12,549 2,451 15,056
5,000 2,815 2,185 3,131
25,000 26,610 (1,610) 26,390
1,003,978 844,302 159,676 827,684
43,000 42,516 484 32,697
35,000 23,838 11,162 31,162
42,500 32,339 10,161 28,683
14,000 6,368 7,632 12,782
700 1,453 (753) 979
46,000 39,770 6,230 38,761
25.000 43.884 (18.884) 22.465
* 1.255.178 1.076.444 178.734 1.039.790
394,942 367,128 27,814 245,385
604,978 540,597 64,381 542,151
82,000 152,061 (70,061) 188,445
19,750 21,965 (2,215) 17,765
55,700 60,837 (5,137) 45,716
71,000 14,877 56,123 54,783
60,500 44,407 16,093 38,428
30.000 158.693 (128.693) 31.014
Total $ 1.318.870 1.360.565 (41.695) 1,1^3,687
B-25
CARLSBAD MUNICIPAL WATER DISTRICT
Improvement Districts' Combining Balance Sheet
June 3U, 1991
(With comparative totals for June 30, 1990)
Schedule 2
03
CTl
Improvement Improvement Improvement Improvement Total
Assets District #1 District #2 District #3 District #4 1991 1990
Current restricted assets:
Cash i
Investments 374,912 772,202
13,624
524,928
700
85,815
14,324
1,757,857
26,289
2,252,169
374,912 772,202 538,552 86,515 1,772,181 2,278,458
Utility plant
Less accumulated depreciation
1,074,916
(618,564)
4,191,056
(1,474,395)
1,108,849
(501,666)
731,540
(285,177)
7,106,361
(2,879,802)
7,106,361
(2,743,404)
456,352 2,716,661 607,183 446,363 4,226,559 4,362,957
831,264 3,488,863 1,145,735 532.878 5.998.740 6.641.415
Liabilities and Equity
Current liabilities payable from
restricted assets:
Current portion of bonds payable
Accrued interest and unredeemed
bonds and bond coupons
--
13,624
40,000
817
40,000
14,441
623,000
35,308
Total current
liabilities payable
from restricted assets 13,624 40,817 54,441 658,308
Bonds payable ----_ 40,000
Total liabilities --13,624 40,817 54,441 698,308
Equity 831,264 3,488,863 1,132,111 492,061 5,944,299 5,943,107
4 831,264 3,48H,863 1,145,735 532,878 5,998.740 6.641,415
CARLSBAD MUNICIPAL WATER DISTRICT
Improvement Districts' Schedule of Revenues and Expenditures
For the year ended June 30, 1991
(With comparative totals for the year ended June 30, 1990)
Schedule 3
Improvement
District #1
Improvement
District #2
Improvement
District #3
Improvement
District #4 1991
Total
1990
Operating expense - depreciation $ 19,432 86,575 21,541 8,849 136,397 136,397
Net operating loss (19,432) (86,575) (21,541) (8,849) (136,397) (136,397)
UJ
Other income (expense):
Property taxes
Interest earned
Interest on bonds payable
29,084
17
60,927
(1,190)
8
63,499
(19,927)
28
8,312
(2,468)
53
161,822
(23,585)
8,010
183,206
(31,890)
1
ro Total other income, net 29,084 59,754 43,580 5,872 138,290 159,326
Net income (loss) $ 9,652 (26.821) 22,039 (2.977) 1,893 22.929
Supplemental Section - C
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
a variety of sources and while appropriate measures were taken to ensure
material provided is as accurate as possible, the information was not audited,
and is solely the responsibility of District staff.
Carlsbad Municipal Water District
Water Purchases
(Acre Feet)
Month 86/87 87/88 88/89 89/90 90/91 Average
•
July 1,620.4 1,687.9 1,886.3 1,997.2 1,962.2 1,830.8
August 1,745.3 1,828.0 1,797.4 2093.6 1,943.6 1,881.6
• September 1,474.0 1,624.2 1,674.9 1,741.3 1,882.7 1,679.4
October 1,130.0 1,149.4 U17.3 1,712.5 1,766.0 1,455.0
Novemba: 1,054.5 858.5 1,003.4 1,445.2 1,491.8 1,170.7
• December 868.3 753.1 893.5 1397.0 1,154.9 1,013.4
January 746.9 698.9 897.7 896.9 1218.8 891.8
Febmary 775.1 906.6 847.9 854.0 8183 840.4
• March 796.0 U00.0 1,140.8 1,1933 679.7 1,022.0
April 1301.6 1,152.7 1,409.8 12032 916.6 1,196.8
May 1,526.7 1,529.0 1,6512 1,775.1 13202 1,560.4
• June 1,6322 1,668.6 1,667.5 1,609.5 1294.8 1,574.5
Annual Demands 14,671.0 15,156.9 16387.7 17,918.8 16,449.6 16,116.8
C-1
Carlsbad Municipal Water District
Agricultural Usages
(Acre Feet)
Month 86/87 87/88 88/89 89/90 90/91 Average
July 251.9 207.1 266.5 259.3 296.3 256.2
August 318.5 275.2 259.0 309.8 343.7 3012
September 260.0 289.5 233.1 253.3 258.5 258.9
October 167.8 86.9 295.7 234.4 228.7 202.7
November 55.9 72.4 79.3 129.9 130.0 93.5
December 76.8 44.8 62.2 93.7 72.2 69.9
January 74.4 87.0 176.0 70.4 53.9 92.3
February 68.5 100.1 170.3 78.4 57.0 94.9
March 153.0 138.1 178.7 128.4 57.1 131.1
April 194.6 124.4 244.5 187.9 120.8 174.4
May 189.6 226.0 138.4 247.2 130.7 186.4
June 238.5 249.1 213.4 2352 164.4 220.1
Annual Demands 2,049.5 1,900.6 2317.1 2,227.9 1,9133 2,081.7
C-2
Carlsbad M.W.D.
Ag. Usage vs. Total Sales
Thousands
1987 1988 1989 1990 1991
Agriculture • Other
C-3
Caiisbad Munidpal Wato* District
Cost of Purdiased Wata*
On $1,000)
Month 86/87 87/88 88/89 89/90 90/91 Average
• July 400.2 416.9 484.8 553.2 543.5 479.7
August 431.1 451.5 461.9 579.9 538.4 492.6
September 364.1 4012 430.4 482.3 521.5 439.9
• October 279.1 283.9 390.0 474.4 489.2 383.3
November 260.5 212.0 257.9 400.3 4132 308.8
December 214.5 186.0 229.6 387.0 319.9 267.4
• January 184.5 176.1 2352 248.4 337.6 236.4
February 191.4 228.5 222.2 236.6 226.7 221.1
March 196.6 327.6 298.9 330.5 188.3 268.4
• April 321.5 290.5 369.4 3333 253.9 313.7
May 377.1 385.3 432.6 491.7 365.7 410.5
June 403.2 420.5 436.9 445.8 358.7 413.0
Annual Demands 3,623.8 3,780.0 4249.8 4,963.4 4,556.6 4234.7
C-4
Carlsbad Municipal Water District
Employee Summaries
Division 86/87 87/88 88/89 89/90 90/91
Managerial
Administration
Engineering
Operations
Total
3.0
4.0
5.0
14.0
26.0
4.0
4.0
6.0
15.0
29.0
4.0
3.0
6.0
15.0
28.0
4.0
5.0
7.0
15.0
31.0
4.0
6.0
7.0
14.0
31.0
Tenure Summary
>20 Years
15-19 Years
10-14 Years
5-9 Years
<5 Years
Avg. Years
of Service
2
4
8
7
10
8.9
C-5