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CITY OF CARLSBAD
CALIFORNIA
WORK
ENJOY!
Comprehensive Annual
Financial Report
For Fiscal Year Ended
June 30, 2001
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FISCAL YEAR ENDED
JUNE 30, 2001
1635 Faraday Avenue, Carlsbad, CA 92008
Website: www.ci.carlsbad.ca.us
Prepared by the Finance Department
Cover Photos:
Top left - Carlsbad neighborhood
Middle - Faraday Building, located at 1635 Faraday, which houses the City's
Community Development, Administrative Services and
Public Works Departments
(Photo by Glenn Cormier, In Site Architectural Photography)
Bottom Right - Carlsbad's Poinsettia Park.
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2001
TABLE OF CONTENTS
INTRODUCTORY SECTION:
Table of Contents i
Council's Five-Year Vision Statements 1
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting,
Government Finance Officers Association 34
Certificate of Award for Outstanding Financial Reporting,
California Municipal Finance Officers 35
Location Map 36
List of City Officials 37
Organization Chart 38
Boards, Commissions and Committees 39
FINANCIAL SECTION:
Independent Auditors'Report 41
General Purpose Financial Statements:
• Combined Balance Sheet - All Fund Types and Account Groups 44
• Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - All Governmental Fund Types 47
• Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual
(Budgetary Basis) - All Governmental Fund Types 48
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30,2001
TABLE OF CONTENTS (CONTINUED)
General Purpose Financial Statements (continued):
• Combined Statement of Revenues, Expenses and Changes
in Retained Earnings - All Proprietary Fund Types 50
• Combined Statement of Cash Flows - All Proprietary Fund Types 51
• Notes to General Purpose Financial Statements 53
Supplemental Data:
Governmental Funds:
General Fund:
• Schedule of Revenues - Budget and Actual (Budgetary Basis) 90
• Schedule of Expenditures - Budget and Actual (Budgetary Basis) 91
• Comparative Schedule of Revenues 92
• Comparative Schedule of Expenditures • 93
Special Revenue Funds:
• Combining Balance Sheet 96
• Combining Statement of Revenues, Expenditures and Changes in
Fund Balances 98
• Combining Schedule of Revenues and Expenditures - Budget and
Actual (Budgetary Basis) 100
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2001
TABLE OF CONTENTS (CONTINUED)
Page
Supplemental Data (continued):
Debt Service Funds:
• Combining Balance Sheet 110
• Combining Statement of Revenues, Expenditures and Changes
in Fund Balances 111
• Redevelopment Areas Debt Service Fund - Budget and Actual
(Budgetary Basis) 112
Capital Projects Funds:
• Combining Balance Sheet 116
• Combining Statement of Revenues, Expenditures and Changes
in Fund Balances 118
Proprietary Funds:
Enterprise Funds:
• Combining Balance Sheet 122
• Combining Statement of Revenues, Expenses and Changes in
Retained Earnings 123
• Combining Statement of Cash Flows 124
Internal Service Funds:
• Combining Balance Sheet 128
• Combining Statement of Revenues, Expenses and Changes in
Retained Earnings 129
Hi
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2001
TABLE OF CONTENTS (CONTINUED)
Page
Supplemental Data (continued):
Internal Service Funds (continued):
• Combining Statement of Cash Flows 130
Fiduciary Funds:
Agency Funds:
• Combining Statement of Changes in Assets and Liabilities 134
Account Groups:
General Fixed Asset Account Group:
• Schedule of General Fixed Assets by Function 138
• Schedule of Changes in General Fixed Assets by Function 139
• Schedule of General Fixed Assets by Source 140
Schedule of Annual Debt Service Requirements 142
STATISTICAL SECTION:
(Not covered by Independent Auditors' Report)
• General Expenditures by Function, Last Ten Fiscal Years 148
• General Revenues by Source, Last Ten Fiscal Years 150
• Ratio of General Bonded Debt to Assessed Valuation and Net
Bonded Debt Per Capita, Last Ten Fiscal Years 152
iv
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2001
TABLE OF CONTENTS (CONTINUED)
STATISTICAL SECTION (continued):
• Computation of Legal Debt Margin 152
• Schedule of Direct and Overlapping Bonded Debt 153
• Ratio of Annual Debt Service for General Bonded Debt to
Total Governmental Expenditures, Last Ten Fiscal Years 154
• Construction and Business Activity, Last Ten Fiscal Years 155
• Water Enterprise - Revenue Bond Coverage,
Last Ten Fiscal Years 156
• Schedule of Assessed Valuation, Last Ten Fiscal Years 158
• Demographic Statistics, Last Ten Fiscal Years 160
• Property Tax Levies and Collections, Last Ten Fiscal Years 161
• Principal Employers, 2000-2001 162
• Principal Taxpayers, 2000-2001 163
• Top 30 Sales Tax Generators, 2000-2001 164
• Miscellaneous Statistical Information, 2000-2001 165
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Carlsbad City Council
Year 2001
FIVE-YEAR VISION STATEMENTS
City Council continues to clarify and pursue the
vision of Carlsbad that reflects the pride and
quality of life for all who live, work, and play here.
Carlsbad's...
• diverse and healthy economic base provides opportunities for employment to the residents
of Carlsbad, economic vitality to the community, and the necessary revenues to support City
services,
• policies and decisions implement the General Plan, enforce the Growth Management Plan,
maintain the safety and security of its citizens, and are based on what is best for Carlsbad,
• leadership role in local and regional planning issues actively involves confronting
governmental issues at the local, state and national levels, and
• operates an open government for the betterment of the community in a non-partisan
manner while encouraging active citizen participation and involvement with the City Council,
and the City's Boards and Commissions.
Carlsbad efficiently and effectively...
• delivers top-quality public services,
• manages environmental concerns proactively, including:
• open space
• water quality/conservation
• beach erosion
• air quality
• resource conservation and waste reduction
• wildlife habitats
• has a safe and efficient integrated transportation system,
• maintains Citywide "small town" community spirit, and
• has a Community where continuous and life-long learning are supported and embraced for
people of all ages.
City of Carlsbad
Finance Department
September 21, 2001
Honorable Mayor, City Council,
and City Manager
CITY OF CARLSBAD
Carlsbad, California
2000-2001 COMPREHENSIVE ANNUAL FINANCIAL REPORT LETTER OF TRANSMITTAL
We are pleased to present the 2000-2001 Comprehensive Annual Financial Report of the City
of Carlsbad to the City Council and the City Manager. This report includes financial statements
for the City, the Housing Authority of the City of Carlsbad, the Carlsbad Public Improvement
Corporation, the Carlsbad Redevelopment Agency, and the Carlsbad Municipal Water District,
as well as the opinion of our independent auditors, Conrad and Associates, LLP. The
completion of this independent audit is an important part of the total financial management
program for the City of Carlsbad.
The information found in this report is provided by management to the City Council and the
public to assist those interested in understanding the fiscal condition of the City as of June 30,
2001. Responsibility for both the accuracy of the data and the completeness and fairness of
the presentation, including all disclosures, rests with the City. To the best of our knowledge and
belief, the enclosed data is accurate in all material respects and is reported in a manner
designed to present fairly the financial position and results of operations of the various funds
and account groups of the City of Carlsbad. All disclosures necessary to enable the reader to
gain an understanding of the government's financial activities have been included.
Background
Although the "village" dates back more than 100
years, Carlsbad incorporated in 1952 as a General
Law city. It is located about 35 miles north of the
City of San Diego on the southern California coast.
The City is governed by a five member City
Council, under the Council/Manager form of
government. The Council is elected at large on a
staggered basis for a term of four years. The City
Clerk and City Treasurer are also elected to four-
year terms. The City Council appoints the City
Manager and City Attorney.
The City covers about 42 square miles and has a
population of 83,469, with an expected build-out
population of 120,000 residents. Industries in the
area include a major regional shopping center, a
1635 Faraday Avenue • Carlsbad, CA 92008-7314 • (760) 602-2430 • FAX (760) 602-8553
www.ci.carlsbad.ca.us • Business License (76O) 6O2-2495 • Utility Billing (760) 602-2420
3
specialty outlet center, 19 auto dealers, 30 hotels offering 3,134 rooms for tourist lodging, high
technology, multimedia, communication and biomedical businesses, electronics, golf apparel
and equipment manufacturers, several business and light industry parks, and numerous land
developers. Carlsbad has created an atmosphere that is very conducive to attracting new
businesses and residents.
Carlsbad is a full-service City providing the following services to its citizens and customers:
• Police department • Development services
• Fire department and paramedic services • Street construction and maintenance
• Water delivery system • Library and arts programs
• Sewer system • Recreation programming for all ages
• Solid waste services • Park lands
• Housing programs
School programs and facilities are provided by four different school districts located within the
City boundaries. Although the City Council has no direct control over these school districts, the
Council recognizes the importance of quality school facilities and programs to Carlsbad's
residents. Council has worked closely with the schools in the past to provide assistance, when
possible, and has included the enhancement of school facilities into the City's strategic goals for
the year.
In addition to the usual City services, Carlsbad offers a variety of programs to help local
residents and businesses. The Carlsbad Police Department, in conjunction with the Senior
Volunteer Patrol, offers a variety of services to residents and visitors of Carlsbad. Whether a
regular visit is made to a homebound citizen or a vacation security consultation is made to
assist residents on security issues in preparation for their vacation, the Police Department is
focused on customer service. They have also implemented a year-round bicycle patrol as well
as a school resource officer program. The school resource officers help to maintain order in and
around schools, to deter crime through enforcement and to foster a positive interaction among
students, citizens and educators.
The City also operates a redevelopment agency that encompasses two separate project areas.
The Village Redevelopment area covers 0.4 square miles of the downtown area. The South
Carlsbad Coastal Redevelopment area is just south of the Village Redevelopment area and
fronts the Pacific Ocean. In addition to the redevelopment project area, the agency operates a
housing authority that provides 491 low and moderate-income families with housing assistance.
The City's literacy program provides adult education to local area residents. Older Carlsbad
residents receive assistance through the City's senior citizen programs. In addition, the City
provides major support for the Convention and Visitors Bureau and sponsors annual
Community Activity Grants to individuals or groups who provide programs to the City that
enhance the quality of life for Carlsbad's residents and/or visitors. Over one million dollars in an
endowment fund has been set aside to fund these grants.
Percentage Increase During the Past Ten Years
200.0%
£ 150.0% --
During the past ten years,
the City has experienced
a significant amount of
change through both
residential and
commercial development.
However, while the City's
population has increased
by 30% during the past
decade, property values,
sales tax revenues and
transient occupancy taxes
have gone up at a much
faster rate as shown in the
following graph. This has
enabled the City the means to consistently provide a high service level for Carlsbad residents.
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0D)
roca>o^a>Q.
100.0% -•
50.0% - -
0.0%
Population
Net Assessed
Values
Sales Tax
Revenues
Transient
Occupancy
Taxes
2000 Strategic Goals and Budget Development
The budget process for the City
of Carlsbad begins in January
each year with a review and
update of the City Council's five-
year vision statements (see
page 1). Through these vision
statements, Council continually
defines and clarifies their vision
of Carlsbad. The strategic goals
for the City are developed next.
The goals further define the
methods used to achieve the
vision and call out areas in
which Council would like to
place special emphasis during
the year. Once these are
developed, staff develops
operational goals based on
Council's direction. These
operational goals are the basis
for the development of the
annual budget. The significant
accomplishments on the
following page reflect the City's
the Council's vision of Carlsbad.
City of Carlsbad
2000 Strategic Goals
• Ensure the effective and efficient delivery of top-
quality services to our Community.
• Develop and implement proactive strategies to ensure
the financial health of the Community and the City.
• Integrate a comprehensive, efficient transportation
system with "quality-of-life" centered land use
decisions.
• Enhance educational opportunities for all segments of
the Community.
progress towards the achievement of the strategic goals and
Significant Events and Accomplishments
During 2000-2001, the City experienced many significant events and accomplishments that
may not be evident from a review of the financial statements. Some of the more important
events are shown below.
South Carlsbad Coastal Redevelopment Area - The formation of the South Carlsbad
Coastal Redevelopment Area, the City's second redevelopment area, was approved by the City
Council in July of 2000. This area is bounded by Agua Hedionda Lagoon on the north, the
Pacific Ocean on the west, Interstate 5 and related properties on the east, and the City limits on
the south. The purpose of the formation of this new redevelopment area includes the
elimination and alleviation of blight found to exist within the project area, increase the supply of
affordable housing and improving the physical, social and economic well-being of residents in
the project area through redevelopment efforts.
On May 15, 2001, Council approved a Work Plan for development of a land use strategy and
master plan for the South Carlsbad Coastal Redevelopment Project Area. At the same time,
approval was given to form a 15-member Citizen's Advisory Committee to assist staff in
development of the land use strategy and master plan.
Focus on Customer Service - The City has placed an emphasis on excellent customer
service, as evidenced by one of the City Council's goals being, "Ensure the effective and
efficient delivery of top-quality services to our Community." As a result of this focus on
customer service, the following new or modified services and facilities, have been created in
Carlsbad:
>^ Sunday Library/Art Gallery Hours - recently, the City has opened up both libraries to
the public on Sundays. The South Carlsbad Library, the Cole Library and the William
D. Cannon Art Gallery are all open seven days a week, with hours of 1 to 5 p.m. on
Sundays.
s Historic Site Brochure - the City created a self guided tour brochure to provide photos
and information on sites of historic interest in Carlsbad.
v' The Citizen's Academy - In an effort to provide education and training to the citizens of
Carlsbad, the City recently implemented a Citizen's Academy, inviting citizens of the
community to come and learn more about the City, departmental functions and
programs available. There were 24 citizens that attended and "graduated" from the
Academy. The feedback from the participants was very positive and the City plans on
providing the Academy on a bi-annual basis.
v' Experience Carlsbad - "Experience Carlsbad" is a program that was developed to
acclimate new employees to the culture of Carlsbad. Included in the training program
are segments on the City's values and mission, benefits orientation, tour of the City, a
conversation with City leaders, customer service workshops, and a follow-up program.
s The City's Website - Carlsbad made several improvements to the City web site during
the year including the introduction of online employment and business license
applications and renewals, and the online library catalog.
Construction of Capital Projects - The City's aggressive Capital Improvement Program
continued in 2000-2001 with an outlay of approximately $22.1 million. As development
continues, the need for development-related services and new facilities is also growing.
Capital projects are prioritized in order to meet and/or exceed the City's Growth Management
Plan standards. This Plan requires a standard level of facilities (including libraries, schools,
parks, water, sewer, etc.) be available to meet the increased demands.
Some of the major capital projects started or completed in 2000-2001 included:
s Cole Library Remodel - Once the South Carlsbad
Library was opened to the public, the Cole Library was
closed down to renovate for safety improvements,
reallocation of staff and public meeting spaces,
mechanical upgrades, and improvements to building
finishes. These improvements were completed in
2000-2001. Furthermore, exterior improvements were
completed during this past year.
v' Street Improvements - Improvements to streets, highways, sidewalks, and traffic
signals continue in the City of Carlsbad. Significant progress has been made on the
traffic circulation projects in response to, and in anticipation of, current and future
development within the City. The Palomar Airport Road and Rancho Santa Fe Road
widening projects had design or construction activity during the past fiscal year. Other
major circulation projects under construction or design include the extensions of
Cannon Road west, Faraday Avenue south and Poinsettia Lane east.
s Public Works Center - Design of a new
Public Works Center is underway and _ _.
construction is expected to begin during
2001-2002. This facility will be located next
to the Safety Center and will include a
warehouse, general offices and yard
facilities for the Public Works Departments.
•/ Leo Carrillo Park - The City continues to
develop and restore this 26.9 acre park in
the southeast quadrant of the City. The
master plan has been completed and work
is underway to rehabilitate existing
structures and to provide landscaping,
parking lots, restrooms, walkways, picnic
facilities, and public art. The general
theme for this park will be passive in nature
with interpretive programming.
ttettft of oM tnttonce tuMgt
v Recycled Water Plant - This project includes preparation of a design report and
construction of numerous recycled waterlines throughout the City to provide a unified
network for the delivery of recycled water.
</ Water Distribution - Several waterlines were worked on during the year including
segments along Poinsettia Lane, El Camino Real, El Fuerte, White Sands Drive, and
across Interstate 5 between Batiquitos Drive and Navigator Circle. In addition,
construction continued on the Cannon Road west transmission main.
v' South Agua Hedionda Interceptor - Phases I and II continued to progress during the
year. This project is designed to provide sewer service to those areas generally
tributary to the south side of Agua Hedionda Lagoon.
J Vista/Carlsbad Interceptor - The Vista/Carlsbad Interceptor project involves installation
of a new and upgraded sewer trunk line through the downtown portion of Carlsbad to
the Encina Water Pollution Control Facility. The interceptor will run along Jefferson
Street from Interstate 5 to Oak Avenue and along Oak Avenue from Jefferson Street to
the west side of the railroad right-of-way. This project is required to handle buildout
flows and replace deteriorated pipelines, and is partially funded by the City of Vista.
Affordable Housing - During 2000-2001,
construction was completed on 230 new
affordable housing units in the City. Laurel
Tree Apartments is a 138-unit, full-featured
complex consisting of two-, three-, and four-
bedroom apartments. Shortly after it opened in
2000, the development won a prestigious
Orchid Award from the San Diego Orchids &
Onions committee for outstanding architecture
and site design. In addition to the Laurel Tree Apartments, Poinsettia Station, a 92 one-, two-
and three-bedroom unit complex was opened near Carlsbad State Beach.
Poinsettia Station is the first transit-oriented residential development in Carlsbad, exemplifying
the principals of smart growth. The development is nearby the Poinsettia Lane transit station,
where the Coaster takes commuters south to San Diego and several stops along the way, as
well as north to the Carlsbad Village and to the Oceanside terminal for connection with other rail
transportation.
Technology Enhancements - In the City's quest to provide top quality services, technology
plays a key role. Technology has not only enhanced the delivery of Carlsbad's services, but it
has also improved the efficiency in which these services are provided. Some of the most recent
improvements in technology implemented in Carlsbad have included:
v' Strategic Technology Plan - During the year, the Strategic Technology Plan Team
developed forms and procedures to be used by City staff for submittal of new system
requests. These tools will be used to perform business case reviews for proposed
technology and to ensure that there are good business reasons to go forward with
potential projects. This review includes doing cost/benefit analysis for proposed
projects.
Intranet - The Intranet site, "@Carlsbad", made its debut on June 25, 2001. The
Intranet is an internal web site that provides a single point of access to information
such as: Human Resources documents and forms, department newsletters, contracts
and agreements, people and facilities finder, connections to other useful sites, and
much more.City Internet - The City's website was upgraded during the year including
a redesigned home page, quick links, a "what's new" section, a facility finder, a library
catalog, an online employment application and submittal page, and the ability to apply
and renew business licenses online.
Records Management - The Records Management department has been providing
historical information to the City via the Document Management System. The system
allows employees the ability to access City information such as agenda bills, minutes,
ordinances, resolutions, plans, drawings, and maps within minutes.
Total City Operations
In 2000-2001, the City of Carlsbad once again enjoyed a fiscal year of solid economic growth.
Beginning with the 1994-95 fiscal year, the local economy has been expanding, resulting in
rising revenue levels for the City. Service levels to the citizens have also grown enabling
Carlsbad to remain a model city, providing effective and efficient top-quality services.
Revenue from All Fund Types
(in thousands)
Category
General Fund
Special Revenue Funds
Debt Service Funds
Capital Projects Funds
Enterprise Funds'1'
Internal Service Funds'11
TOTAL REVENUES
2000-2001
$81,601
13,521
1,716
39,408
35,048
11,360
$182,654
1999-2000
$ 69,363
11,688
1,484
32,717
31,511
9,686
$156,449
2000-2001 over
(under) 1999-2000
$12,238
1,833
232
6,691
3,537
1 ,674
$26,205
Percent
Change
17.6%
15.7
15.6
20.5
11.2
17.3
16.8%
(1) Includes operating and non-operating revenues
For 2000-2001, total revenues collected by the City for all services totaled over $182 million.
General fund revenues grew by 17.6% to $81.6 million. The healthy economy, coupled with
continued low inflation, has kept consumer confidence high, allowing for increased retail sales
and tourism. The Carlsbad Company Stores, a specialty outlet center, has expanded since its
opening in 1997 to well over 60 shops and restaurants that contribute over $1 million annually
to the City's sales tax receipts. Legoland, a family theme park located in Carlsbad, has
expanded recently. Legoland contributes to the City's sales tax base as well as stimulating the
development of new hotels in the area. The effect of the new development and the demand for
housing in Carlsbad is an increasing tax base. The three major revenue sources for the City:
property taxes, sales taxes and transient occupancy taxes (hotel tax) brought in $50.1 million in
fiscal year 2001. These taxes are the major source of funding for most of the City's services
and allow the City to live up to its reputation as one of the premier locations in San Diego
County.
Not only are sales taxes and TOT higher this fiscal year, property taxes have also risen. The
demand for housing has grown as more industries move into the City's highly desirable
industrial corridor. Residential development has had a tough time keeping up with the fast
paced population growth throughout San Diego County. This influx of citizens, as well as the
strong resale market, has pushed the assessed values in Carlsbad up over 18% during the past
year. This translated into higher property taxes for the City.
Despite the strong demand for housing, receipts from many of the pre-construction phases of
development slowed down this year. The number of large master plans working their way
through the development process has dwindled due in part to less land being available for
development. As the City came out of the recession in the mid 1990's, there was a large
backlog of projects ready to process. Most of those are under construction now or were
recently completed. This has resulted in lower planning, engineering and other similar
revenues.
Most City funds experienced higher revenues during the year. Enterprise and Capital Project
funds showed increases predominantly due to increased income from property and
investments. Under the requirements of Governmental Accounting Standards Board Statement
No. 31, the City's investments are stated at their fair value. Any realized gains and losses from
the investment portfolio as well as the net increase or decrease in the fair value of the
investments (unrealized gains/losses) are all recognized as investment income. As of June 30,
2001, income from property and investments for all City pooled funds totaled $21.6 million of
which approximately $8.7 million (40.3%) is a result of the net increase in the fair value of the
investments during fiscal year 2001. The unrealized gain on investments held in the portfolio at
year-end was $4.4 million.
Expenditures (or Expenses) from All Fund Types
(in thousands)
Category
General Fund
Special Revenue Funds
Debt Service Funds
Capital Projects Funds
Enterprise Funds'1'
Internal Service Funds'1'
TOTAL EXPENDITURES
2000-2001
$59,404
7,588
2,564
23,329
23,991
9,636
$126,512
1 999-2000
$52,833
9,733
2,461
40,629
24,122
9,323
$139,101
2000-2001 over
(under) 1999-2000
$ 6,571
(2,145)
103
(17,300)
(131)
313
$(12,589)
Percent
Change
12.4%
(22.0)
4.2
(42.6)
(0.5)
3.4
(9.1)%
(1) Includes operating and non-operating expenses
The revenues collected by the City during 2000-2001 allowed the staff of over 744 full and
hourly full-time equivalent employees to provide a complete range of City services to the 83,469
residents and many businesses in Carlsbad. Spending on all City programs totaled $126.5
million, a decrease of $12.6 million from 1999-2000. While the majority of programs within the
City saw increased spending, spending on capital projects slowed down as many of the projects
10
on the horizon were in the planning stages during the year. Projected expenditures on capital
projects in the next five years exceed $211.2 million. Other factors contributing to the growth in
expenditures were additional programs and services offered through General fund financing.
These programs addressed enhanced customer service, health and safety issues, new
technologies, community outreach, and the City's growth.
The remainder of this report will discuss the revenues and expenditures (or expenses) for each
fund type in the City of Carlsbad for the fiscal year ended June 30, 2001.
General Fund
The City's General fund is used
to record all revenues and
expenditures not specifically
restricted by law or Council
policy. Major sources of
revenue include property tax,
sales tax, transient occupancy
tax (TOT), vehicle license fees,
business license fees,
development revenues, and
interest income.
GENERAL FUND
1992 TO 2001
(in millions)
nm tart
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
General fund revenues provide a representative picture of the local economy. These revenues
are of particular interest as they fund basic City services such as police, fire, library, street and
park maintenance, and recreation programs. Once again, in 2000-2001, the City of Carlsbad
experienced a period of solid economic growth with General fund revenues growing to $81.6
million as shown below.
The remainder of this section will highlight changes in the more significant revenue sources.
General Fund Revenues
(in thousands)
Category
Taxes
Intergovernmental
Licenses and Permits
Charges for Services
Fines & Forfeitures
Income from Property
and Investments
Interdepartmental
Other
TOTAL
2000-2001
$57,435
5,545
3,409
6,171
764
4,817
2,148
1,312
$81,601
1999-2000
$50,037
4,903
3,321
5,499
771
2,227
2,007
598
$69,363
2000-2001 over
(under) 1999-2000
$ 7,398
642
88
672
(7)
2,590
141
714
$12,238
Percent
Change
14.8%
13.1
2.7
12.2
(0.9)
116.3
7.0
119.6
17.6%
11
Taxes
Sales Taxes ($21.2 million) - For the year, sales tax receipts finished up 9% over last
year's collections. This was due to the continuation of a healthy
Up
9%economy, relatively high consumer confidence and additional new retail
sites locating to the City. The three largest economic segments in the
City continue to be new auto sales, department stores and restaurants;
together they generate 54% of the City's sales tax revenues.
In order to comply with a Revenue and Taxation Code provision passed in 1991, a sales tax
rollback of 0.25% went into effect on January 1, 2001. This rollback was due to the State
having back-to-back fiscal years with a reserve fund of at least 4% of its total General fund.
This reduction in the sales tax rate from 7.75% to 7.5% came from the State's share of the
sales tax. The City continued to receive its 1% share.
FOR
SALE
1
Up
17%
Property Taxes ($19.7 million) - The City wrapped up the year with
$19.7 million in property tax revenues, an increase of 17% from fiscal
year 1999-2000. According to the County of San Diego Assessor's
Office reports, assessed values in Carlsbad increased 18% for fiscal
year 2000-2001. This was the largest increase of any city in San
Diego County.
Up11%
Under Proposition 13, assessed values of property can only increase by up to 2% per year.
However, when property changes ownership, the assessed value increases to the full market
value. Therefore, the recent surges in property resales in Carlsbad as well as the development
of new housing, significantly affected property tax revenues for the City.
Transient Occupancy Tax ($9.3 million) - Transient occupancy taxes (TOT) are $936,000 more
than the previous fiscal year. The increase in TOT revenues is due
entirely to the opening of the Courtyard by Marriott Hotel and the Carlsbad
Beach Hilton Gardens in June 2000. Without these two new hotels, TOT
for the year would have actually decreased by 1%. According to PKF
Consulting, room rates have increased during the past year, leading us to
believe that the drop in TOT revenues is due to an increase in the vacancy rate experienced by
local hotels. This is directly attributable to the recent slow down in the economy.
Franchise Taxes ($3.9 million) - Franchise tax revenues are up significantly from the previous
fiscal year. Franchise fees come from public utility sources such as
SDG&E, trash collection franchises and cable franchises conducting
business within City limits. The majority of this year's increase is due to
increased collections from San Diego Gas & Electric (SDG&E).
Up
51%
SDG&E pays franchise taxes for the use of public land over which they transport gas and
electric services. In addition, SDG&E also pays an "in-lieu" franchise tax based on the value of
gas and electricity transported on SDG&E lines put purchased from another source. The
majority of "in-lieu" taxes collected are from Cabrillo Power, the operator of the Encina Plant.
This "in-lieu" tax was put in place to capture the franchise taxes on gas and electricity that is
transported using public lands but which would not otherwise be included in the calculations for
franchise taxes.
12
The franchise taxes paid by SDG&E are up in total by 18.9%. Net electricity sales increased by
11%, while net gas sales increased by 45%. The "in-lieu" taxes are up by 221.6% for the year.
Up
23%
Business License Tax ($2.3 million) - Business license revenues have
increased by $437,000 over 1999-2000 figures. The majority of this
year's increase was due to two factors; the success of our recent
public awareness campaign and the licensing of Cabrillo Power.
In an effort to create equity amongst the business community, as well as bring businesses into
compliance with the City's business license ordinance, the City embarked on a public
awareness campaign. This campaign was designed to educate the business community on the
requirements and procedures for business licensing in the City of Carlsbad. Over 2,100 letters
were mailed to various businesses that were potentially doing business in the City without a
license. The City also implemented a temporary amnesty period through September 30, 2000,
for newly licensed businesses. During this amnesty period, all penalties for prior business
license taxes were waived for newly licensed businesses. The City saw 317 new organizations
obtaining a business license as a result of this program, bringing in over $102,000 in additional
business license revenue.
Up
10%
Transfer Taxes ($1.1 million) - When there is a consideration paid
for real property, the County Assessor's Office charges a transfer
tax. The transfer tax rate in San Diego County is $1.10 per
thousand multiplied by the selling price of the property. The City
receives 50% of the transfer tax charged for sales within the City
of Carlsbad. During the current fiscal year, transfer taxes are up 10% due to
the continuation of a strong housing market.
Intergovernmental
UP
14%
Vehicle License Fees ($4.3 million) - Vehicle License Fees (VLF)
have increased by $524,000 over 1999-2000 figures. Vehicle
License Fees are collected by the Department of Motor Vehicles
and disbursed by the State Controller to the City. The State taxes
motor vehicles in lieu of local property taxes. Vehicle License Fees have
increased this year due to the population growth in the City and the Statewide increase in VLF
received. Registered vehicles include automobiles, trucks, trailers, and motorcycles.
State Assembly Bill 858 went into effect on January 1, 2001. This bill provides a 67.5% VLF
credit to licensed vehicle owners in the State. Vehicle owners have seen a reduced VLF fee
during the year. This reduction is in place for the 2001 and 2002 calendar years. This bill is
double-joined with State Assembly Bill 511, which appropriated money necessary to cover the
reduction in VLF revenues so that cities and counties, the recipients of VLF, will not see any
reduction in their VLF revenues at this time.
Other Intergovernmental Revenues ($911.000) - Other
intergovernmental revenues include miscellaneous receipts received
from the State or Federal governments. Included in the $911,000
received this year are reimbursements from the State for mandated
costs, drug enforcement programs and disaster relief,
13
reimbursements for Peace Officer Standards and Training (POST) expenses, a contribution
from the Encinitas Unified and Carlsbad School Districts to partially offset DARE program and
school resource officer expenses, one-time monies received from the State for "fiscal relief and
reimbursements for booking fees, and a small miscellaneous State grant.
Up10%
Homeowners Exemptions ($316.000) - When property taxes are
calculated on a particular parcel of property, the first $7,000 of
property value is excluded from the property tax calculation. The
State then reimburses the City for this mandated exemption. This
reimbursement is entitled Homeowner Exemption revenue, and is
shown under intergovernmental revenues. Sales of new homes have remained strong during
the fiscal year, as reflected in the revenue received for the year.
Licenses and Permits
I . w ..1 88'Down
3%
Building Permits ($2.1 million) - The most significant source of
development-related revenue this past year was building permits,
down 3%, as compared to fiscal year 2000. Building permits are
issued Residential Units Trend
2500 -
2000
1500
1000
500
-. n I
to cover
the cost of regulating construction
activities. This allows the City the
means to protect overall community
interests. For the fiscal year, 1,823
new homes were started, compared
to 1,838 new homes in fiscal year
2000. For the year, residential home
development was most active in
Rancho Carrillo, La Costa Valley and
Calavera Hills. In addition, there was
an extensive amount of multi-unit
development throughout the City during the year.
Total commercial/industrial building permits issued this year comprised 811,336 commercial
and 463,754 industrial square feet. This compares to 265,487 commercial and 475,664
industrial square feet permitted last fiscal year. Some of the larger commercial projects
permitted included the La Costa Glen apartment buildings, Carlsbad Self Storage, Inns of
America Suites, the Albertson's at La Costa Plaza, and the La Costa Glen Assisted Living
facility.
Other Licenses and Permits ($1.3 million) - Other licenses and
permits consist of plumbing, electric, mechanical, right-of-way,
grading, conditional land use, lagoon, and other miscellaneous permit
revenues. In the previous fiscal year there was a large refund of fees
for a permit application, which was withdrawn. This is a big factor in
the increase in fees for the current fiscal year. Additional increases can be seen
in miscellaneous building permits (plumbing, electrical and mechanical), miscellaneous
development permits (right-of-way and coastal development) and general permits (special use
and fire protection systems).
14
Charges for Services
Development-Related Revenues ($2.9 million) - Development related
revenues, which include planning fees, building department fees and
engineering fees again this year reflect a slowing down of the building
industry in Carlsbad.
Up
55%
Ambulance Fees ($1.4 million) - The City bills any individual who
is transported in one of the City's ambulances. Billing and
collecting of these fees is done by an outside company, which
receives a percentage of the fees collected. For the year,
ambulance fees are 55% or $513,000 higher than fiscal year
1999-2000. The increase is due to higher collection rates and an increase in the City's
population.
Recreation Fees ($1.1 million) - Recreational fees are generated
through instructional classes, youth and adult sports, the triathlon
and other special events, day trips, various aquatic programs, and
lagoon permits. Year-to-date recreation fee revenue is $244,000
more than the previous fiscal year.
Fines and Forfeitures ($764,000) - Fines and forfeitures represent fees collected for code
violations, parking citations, overdue fines and returned checks.
Overdue library fines are up for the year due mainly to the opening of the
new library in the prior fiscal year. However, this was more than offset
by the decrease in revenues received by the City from the court system
for our share of moving violations.
Down
1%
Up
116%
Income From Property and Investments ($4.8 million) - For the year, income from property and
investments is up almost $2.6 million. The increase in interest revenue is
due to two factors. First, General fund revenues have increased
significantly in the current fiscal year. Combining this increase in
revenues with a reduction in expenditures as compared to the previous
fiscal year, the cash balance has increased by 34% this year.
Secondly, the City records the value of their investments at fair market value. This valuation
generates either an unrealized gain or loss, which is reflected in income from property and
investments. Of the 116% change in income from property and investments, 48% was due to
the fluctuation in the fair market valuation of the City's investment from fiscal year 1999-2000 to
2000-2001.
Interdepartmental Charges ($2.1 million) - Interdepartmental charges are $141,000 or 7% more
than last year. Interdepartmental charges are amounts paid by other funds
Up for services provided to them by the General fund. The majority of this
7% year's increase is due to increasing costs in the General fund.
15
Miscellaneous ($1.3 million) - Miscellaneous revenue sources include revenues received by
the City to offset the costs of special studies or projects for
developers, reimbursements for damage done to City streets, right-
of-ways, other City owned property, and other miscellaneous
reimbursements and donations. These amounts vary significantly
from year to year.
Up120%
General Fund Expenditures
(in thousands)
Category
Policy and Leadership Group
Administrative Services
Public Safety
Community Development
Community Services
Public Works
Non-Departmental
Debt Service
TOTAL
2000-2001
$ 2,411
4,720
23,365
5,293
10,678
12,225
642
70
$59,404
1999-2000
$ 2,166
3,755
21,436
5,371
8,132
11,578
384
11
$52,833
2000-2001 over
(under) 1999-2000
$ 245
965
1,929
(78)
2,546
647
258
59
$6,571
Percent
Change
11.3%
25.7
9.0
(1.5)
31.3
5.6
67.0
536.4
12.4%
General fund expenditures were $59.4 million; an increase of $6.6 million from 1999-2000. The
economy continued to remain strong this fiscal year, allowing the City to maintain service levels
and expand or add some programs, including:
Increased Police staffing by the addition
of four new positions
Began Parent Project to help parents
deal with difficult children
Implemented a senior citizen fire and life
safety education program
Removed 1,400 diseased trees from
Hosp Grove
Distribution City of Carlsbad calendars
citywide
Began Sunday hours at both libraries
Remodeled Cole Library
Provided the library catalog online
through the City's internet site
Developed a self-guided tour brochure
of historic sites in Carlsbad
Created an Arts Education Program for
Carlsbad students.
• Continued implementation of the
Records Management system
• Began planning for the Storm Water
Protection Program
• Installed playground park equipment at
Calavera Park
• Planted nearly 200 trees in valid
planting sites
• Held the first Carlsbad Citizen's
Academy
• Expanded Stay 'N' Play and Kidz Camp
programs
• Continued work on the Residential
Traffic Management Program
16
Significant changes noted in the major service areas were as follows:
Policy and Leadership Group
Spending in Policy and Leadership Group increased by $245,000 this
fiscal year. This group includes the City Council, City Manager, City
Clerk, City Attorney, and City Treasurer departments. The increase in
expenditures is attributable to the additional costs related to the Public
Information Program. During the year calendars were created for
distribution to all Carlsbad residents; the calendars highlighted
citywide events including City Council meetings, important phone numbers, a facility
finder, and other items of interest to Carlsbad residents.
Administrative Services
Administrative Services, which includes the
Finance, Purchasing, Human Resources and
Records Management, had an increase in
expenditures in 2000-2001 of $965,000. This
increase can be traced to the continued
installation and training of staff on the document
management system. In addition, Administration
expenses were higher during the year due to the costs of power deregulation consulting,
the airport noise study, work on the telecommunications policy, the Futuring Conference,
and miscellaneous Faraday building costs.
Public Safety
Spending on public safety programs totaled $23.4 million; up $1.9
million, or 9%, from 1999-2000. This increase was shared equally
between police and fire services. The Fire department's fleet
replacement changes increased due to the purchase of two new fire
engines in the Fleet Internal Service Fund, and combined with normal
increases in salaries and benefits, their expenditures were up by
$964,000. Four new police positions were added during the year to
address needs in patrol, traffic, community services, and vice narcotics. In addition,
information technology charges increased by over $200,000 in the Police department to
cover the cost of replacing personal computers as they become obsolete.
Community Development
Community Development, which encompasses the Hiring Center,
Geographic Information Systems (GIS), Economic Development,
Community Promotion, Land Use Planning, Building Inspection, and
related administrative costs had expenditures of $5.3 million for fiscal
year 2000-2001, a decrease of $78,000. The decrease in expenditures
can be traced to lower GIS and Economic Development expenses
during the past twelve months. The GIS area was involved in a software
implementation during the previous fiscal year. Economic Development expenses
dropped as compared to the previous year due to the timing of a tourism study.
17
Community Services
Community services consists of the Library, Cultural Arts, Recreation,
Park Planning, and Senior Citizen programs. This group had total
expenditures of $10.7 million for the year; an increase of $2.5 million.
This past fiscal year was the first full year of operations for the City's
two libraries. An additional full-time employee, as well as five hourly
full-time equivalent positions were added to meet the demand for
services from the two libraries. Another 5.4 hourly full-time equivalent
positions were added so that the libraries could operate on Sundays ^
from 1:00 p.m. to 5:00 p.m. Three full-time recreation specialist
positions were created to replace part-time positions and to provide adequate coverage
and supervision at each of the community centers. Recreation expenditures also included
additional full- and part-time salaries for the Stay 'N' Play, Kidz Camp and Youth Special
Event Programs. The Stay 'N' Play program was added at Magnolia Elementary School
and an additional week of Kidz Camp was offered during the summer. Parks Planning
salaries increased partially due to the conversion a part-time position to a full-time position
and the hiring of a part-time park planning assistant. The park planning assistant was
added to help address the workload issues related to new park development projects
required by the Growth Management Plan.
Public Works
Public Works is charged with building and caring for all of the assets
of the City. It includes Engineering; Parks, Streets and Facilities
Maintenance; Building Maintenance; and Traffic Sign and Signal
Maintenance programs. Total expenditures in 2000-2001 for Public
Works were $12.2 million, an increase of $647,000 over 1999-2000.
Increases during the year were noted in Facilities, Traffic Signals and
Parks Maintenance. Facilities Maintenance increased their staffing to
keep up with the routine building maintenance of the new Faraday facility and the
expansion of the City's library facilities. The City purchased and installed green LED
lamps in all traffic signals at every intersection in the City in an effort to reduce energy
costs, thereby impacting the Traffic Signals expenditures for the year. A large factor in
the increase in parks maintenance costs included the increase in heating and lighting
brought about by the recent surge in energy prices.
Non-Departmental
Non-departmental expenditures consist of programs not specifically associated with a
department. Examples include fees paid to the County for property tax administration and
annual City audit charges. This category increased by $258,000 in 2000-2001, from the
purchase of property near the Carlsbad Arts Offices.
Special Revenue Funds
The City's Special Revenue funds, which account for the collection and use of special or
restricted revenues, received $13.5 million in total revenue in 2000-2001. This is an increase of
$1.8 million, or 15.7%, from last year. A majority of this increase was a $1 million increase in
income from property and investments. An increase in Special Revenue fund revenues
combined with a reduction in Special Revenue expenditures, has lead to a 24% increase in the
average monthly cash balance in the Special Revenue funds throughout the year. In addition,
18
the change in the market value of the City's investments during the fiscal year increased
income from property and investments by 28%. These factors, as well as an overall increase
in the return on the City's investments, have created higher interest earnings for the fiscal year.
There was also a large increase in intergovernmental revenues. Due the fact that
home/apartment rental rates in the San Diego region are some the highest in the country, the
federal government increased the amount of housing assistance they offer Section 8 housing
assistance participants in Carlsbad. They also increased the amount of money the City
receives to help offset the administrative costs of running the program. Furthermore, the State
reimbursed the City additional amounts under the California Library Services Act (CLSA) for
services provided by the City's two libraries.
One new fund was established during the year. The California Law Enforcement Equipment
Program High Technology Grant (CLEEP) is a state grant to be used to enhance law
enforcement budgets for the purchase of high-technology equipment. This can include such
items as computers, cellular phones, night vision equipment, software, digital cameras, and
other high-technology equipment.
Special Revenue Funds
Revenues
(in thousands)
Category
Taxes
Intergovernmental
Charges for Services
Fines and Forfeitures
Income from Property
and Investments
Property Owner
Contributions
Donations
Miscellaneous
TOTAL
2000-2001
$ 1,910
4,729
-
125
2,655
3,377
312
413
$13,521
1999-2000
$1,769
3,976
54
69
1,641
3,281
561
337
$11,688
2000-2001 over
(under) 1999-2000
$ 141
753
(54)
56
1,014
96
(249)
76
$1,833
Percent
Change
8.0%
18.9
(100.0)
81.2
61.8
2.9
(44.4)
22.6
15.7%
Expenditures from the Special Revenue funds support a wide variety of programs and projects.
Some of the major uses for these funds include:
Community service programs such as street lighting, landscaping services for street
trees and median maintenance.
Cultural programs including grants from the California Library Services Act and
California Arts Council, and the Civic Arts program.
Donations, scholarships and bequests for designated library and community service
activities.
19
Endowments designated for community assistance, the preservation of the Flower
Fields at Carlsbad Ranch, the new auditorium at the South Carlsbad Library, and
mitigation credits set aside for future mitigation projects.
Special programs such as the Police Asset Forfeiture Program, Citizens Options for
Public Safety (COPS) Program, Law Enforcement Block Grant, California Law
Enforcement Equipment Program High Technology Grant, library computer
purchase and adult literacy programs, and habitat preservation programs.
Housing assistance through the Tyler Court affordable senior apartments.
Welfare programs such as the HDD-sponsored Carlsbad Housing Authority Rental
Assistance Program, Affordable Housing development and the Senior Nutrition
Program.
Special Revenue Funds
Expenditures
(in thousands)
Category
Public Safety
Community Development
Community Services
Public Works
Principal and Interest
TOTAL
2000-2001
$ 262
4,059
893
2,177
197
$7,588
7999-2000
$ 364
6,167
956
2,245
1
$9,733
2000-2001 over
(under) 1999-2000
$ (102)
(2,108)
(63)
(68)
196
$(2,145)
Percent
Change
(28.0)%
(34.2)
(6.6)
(3.0)
19600.0
(22.0)%
Spending in Special Revenue funds totaled $7.6 million in 2000-2001, a decrease of $2.1
million from 1999-2000. The largest factor in this decrease was a $2 million contribution from
the Low and Moderate Income Housing fund for the purchase of the Tyler Court affordable
senior complex made during the previous fiscal year.
Debt Service Funds
The City's Debt Service funds record the payment of interest and principal on the current
portion of outstanding debt not recorded in other funds. As of June 30, 2001, the total debt
payable from non-enterprise sources, excluding obligations under capital leases and advances,
was $18.9 million. City debt is comprised of the Hosp Grove Certificates of Participation
(COPs) and the Redevelopment Tax Allocation bonds. No general obligation bonds are
outstanding as of June 30, 2001.
20
Debt Service Funds
Revenues
(in thousands)
Category
Taxes
Income from Property and
Investments
Total
2000-2001
$1,575
141
$1,716
1999-2000
$1,385
99
$1,484
2000-2001 over
(under) 1999-2000
$190
42
$232
Percent
Change
13.7%
42.4
15.6%
Debt service revenues totaled $1.7 million, an increase of $232,000 from last year. The
increase in tax revenues was due to higher assessed values within the Redevelopment Area.
Additionally, higher average cash balances in the Hosp Grove and Redevelopment funds during
the year of 31%, as well as an increase in the market value of investments, created the larger
interest earnings in those funds.
Debt Service Funds
Expenditures
(in thousands)
Category
General Government
Principal
Interest and Fiscal
Charges
TOTAL
2000-2001
$ 37
820
1,707
$2,564
1999-2000
$ 15
795
1,651
$2,461
2000-2001 over
(under) 1999-2000
$22
25
56
$103
Percent
Change
146.7%
3.1
3.4
4.2%
General government and interest charges increased from the prior year due to activity in the
new South Carlsbad Coastal Redevelopment Area, the City's second redevelopment area,
which was formed during the 1999-2000 fiscal year.
Capital Projects
A Capital Project fund is one that accounts for the receipt and disbursement of monies that are
restricted for the acquisition or construction of capital facilities (other than those financed by
Enterprise funds). Capital Project funds for the City of Carlsbad include those supported by the
City's public facilities fees, community facilities district (Mello-Roos) taxes, park development
fees, drainage fees, traffic impact fees, bridge and thoroughfare districts and other development
fees, county sales tax funds, and general funds earmarked for capital purposes in the Capital
Construction fund. The capital projects supported by the City's Redevelopment Agency are
also included in this group.
21
Capital Projects Funds
Revenues
(in thousands)
Category
Taxes
Intergovernmental
Charges for Services
Income from Property
and Investments
Contributions from Property
Owners
Miscellaneous
TOTAL
2000-2001
$ 9,227
4,012
257
12,773
12,605
534
$39,408
1999-2000
$ 9,077
5,214
197
6,539
1 1 ,452
238
$32,717
2000-2001 over
(under) 1999-2000
$ 150
(1,202)
60
6,234
1,153
296
$6,691
Percent
Change
1.7%
(23.1)
30.5
95.3
10.1
124.4
20.5%
Tax revenues result from the collection of community facilities district (Mello-Roos) special
taxes and the license tax on new construction. The 2000-2001 increase in tax revenues is the
net result of higher special tax payoffs in Community Facilities District #1 for
industrial/commercial developments, partially offset by a reduction in special tax prepayments in
the Rancho Santa Fe District. Intergovernmental revenues decreased during the year as the
City did not draw down as much TransNet funding as in the past. This is not an indication of a
reduction in money available from TransNet, but rather a timing factor in when the funds will be
used. In addition, the City did not receive the magnitude of state and federal grant funding as in
previous years.
Increases in income from property and investments are the result of the several factors
including the maintenance of larger cash balances during the year (10%), the addition of the
Infrastructure Maintenance fund (6%), increases in property rentals (3%), an increase in the
average portfolio yield for the year (8%), and the majority of the increase was due to the
increase in the market value of the City's investments.
The change in contributions from property owners was primarily the result of higher collections
of Public Facility Fees (PFF) and Bridge and Thoroughfare District No. 2 (BTD #2)
contributions, both of which are collected when building permits are issued.
Capital Projects Funds
Expenditures
(in thousands)
Category
General Government
Capital Outlay
Principal
Interest
TOTAL
2000-2007
$ 1,213
22,067
37
12
$23,329
7999-2000
$ 1,062
39,543
18
6
$40,629
2000-2001 over
(under) 1999-2000
$ 151
(17,476)
19
6
$(17,300)
Percent
Change
14.2 %
(44.2)
105.6
100.0
(42.6)%
22
Capital Project Expenditures
Versus Residential Permits Issued
2500
Spending on capital
projects decreased by
44.2% in 2000-2001 from
the previous year. This
drop was due to several
large projects that were
worked on in the
previous year, including
the Pine School
acquisition, completion of
the Faraday Center and
Dove Library,
construction of Cannon
Road west, completion of
the Faraday Avenue
extension, widening of La Costa Avenue, and the pavement management program.
Historically, capital project spending has matched the residential development occurring within
the City, ensuring that the necessary infrastructure is in place for new Carlsbad residents.
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
I Capital Expenditures - Permits Issued
Enterprise Operations
The City of Carlsbad manages water, sewer, solid waste, and a planned golf course as
Enterprise fund operations. An Enterprise fund is one where most or all of the costs involved
are supported by user fees. Within these funds, the City uses many of the accounting practices
applicable to commercial businesses, including the recording of depreciation on fixed assets
and the allocation of overhead costs from support services. User fees are set on an annual
basis to cover both operating costs and debt service needs.
Enterprise Funds
Total Revenues, Expenses and Net Income
(in thousands)
Water Golf Course Sewer Solid Waste
2000-2001
Revenues
Expenses
Net Income
$23,188
(18,028)
$ 5,160
$ 221
$ 75
$10,853
(5,556)
$ 5,297
$786
(261)
$525
1999-2000
Revenues
Expenses
Net Income
Percent Change
$22,179
(18,609)
$ 3,570
44.5%
$ 161
(199)
$ (38)
297.4%
$ 8,422
(5,165)
$ 3,257
62.6%
$749
(149)
$600
(12.5)%
23
Most of the increase in water revenues during the current fiscal year is due to increases in
investment income. This increase in investment income is due to the maintenance of a higher
cash balance as compared to the prior fiscal year, as well as an increase in the market value of
investments. Water sales were actually down from the previous year due to the heavier than
normal rainfall the region experienced during this past winter, partially offsetting the increase in
income from property and investments. The largest Water Enterprise fund expense, purchased
water, was down 4% for the year mirroring the drop in water sales from the wet winter. The
enterprise recognized $4.8 million in capital contributions during the past fiscal year. Capital
contributions are generated through development impact fees charged to new commercial,
industrial and residential developers for access to the City's potable and reclaimed waterlines.
Design has been completed on a 250-acre municipal golf course located directly south of the
future Veterans Memorial Park. The location is directly accessible to major roads and the
interstate freeway. The City is currently awaiting approval of the plans from environmental
agencies before construction can begin. Revenues to the Golf Course fund for 2000-2001 were
derived entirely from interest on cash balances. Golf course expenses consist primarily of
street assessments and Mello-Roos taxes associated with the land purchased for the municipal
golf course. Another source of cash to the fund (not reflected in the number shown here) was a
$600,000 contribution from the City's General fund to cover future expenses.
A major factor in the rise in Sewer revenues was the maintenance of higher average cash
balances throughout the year, in the Capital Connection Fee and Capital Replacement funds,
and an increase in the market value of the City's investments. The customer base has also
increased adding to the growing revenues. Expenses for sewer operations total $5.6 million,
8% or $391,000 higher than the previous fiscal year. Encina Plant expenses have increased by
7%, primarily the result of higher energy costs. General and administrative costs are up by
$196,000, a result of a more accurate accounting of the Sanitation's share of utility engineering
and utility billing costs assessed through interdepartmental charges.
Solid waste revenues represent charges for recycling fees, non-jurisdictional fees based on the
level of tonnage processed by Waste Management and interest earned on available cash
balances. The increase in solid waste revenues for the year was the result of higher earnings
on the fund's increased cash balances held during the year as well as an increase in the market
value of investments. This increase in investment revenues more than offset the drop in non-
jurisdictional fees incurred by the enterprise. General and administrative costs reflect a
significant increase during the year due to the costs associated with the negotiations with Allied
Waste for continued use of the Palomar Transfer Station.
Internal Service Funds
Internal Service funds are used to account for services provided by a City department to other
City departments. As with an Enterprise fund, the source of revenue is user fees charged to
the departments receiving the service.
24
Internal Service Funds
Total Revenues. Expenses and Net Income
(in thousands)
2000-2001
Revenues
Expenses
Net Income
1999-2000
Revenues
Expenses
Net Income
Percent Change
Fleet
Management
$ 3,409
(2,611)
$ 798
$ 3,073
(2,441)
$ 632
26.3%
Health
Insurance
$ 2,596
(2,343)
$ 253
$ 2,593
(2,767)
$ (174)
245.4%
Information
Technologies
$ 3,366
(2,938)
$ 428
$2,472
(2,276)
$ 196
118.4%
Risk
Management
$1,232
(792)
$ 440
$ 909
(1,080)
$(171)
357.3%
Workers'
Compensation
$757
(952)
$(195)
$ 639
(759)
$(120)
(62.5)%
Fleet Management
Fleet Management operates a central vehicle maintenance program, which services all City
vehicles and other small machinery. Replacement of vehicles, including fire equipment, is an
important component of the program. The City's current policy for funding the replacement of
fleet equipment valued at more than $5,000, is to set aside a certain amount of money each
year in a replacement fund to ensure that there will be sufficient funds available when the
equipment needs to be replaced. Vehicle purchases totaled $1.5 million; $500,000 more than
the previous year. Included in these purchases were two new fire engines. Fleet operating
expenses during 2000-2001 were $2.6 million, which was more than offset by charges for
services to the various funds in the City. The $7.5 million year-end working capital is
earmarked for vehicle replacement.
Health Insurance
The City also operates a Health Insurance Internal Service fund for collecting premiums, paying
claims, premiums, administrative costs, and holding reserve funds. Revenues are generated by
charging departments for their share of the estimated health insurance costs during the year.
At the beginning of the 2001 calendar year, management employees switched their health
coverage to the Public Employees Retirement System Health Plan and dropped out of the
City's self-insured plan. This change can be seen in the reduction in claims expense for the
fund during the year. However, due to the increasing cost of providing health benefits, the rates
charged per employee for health insurance coverage has increased, thereby offsetting any
reduction in charges for services in the fund due to management changing health insurance
plans. For fiscal year 2000-2001, the health insurance Internal Service fund produced a net
income of $327,000, thereby eliminating the prior year negative fund balance.
25
Information Technologies
The City's Information Technologies Internal Service fund accounts for the resources which
support the various City departments in the performance of work tasks through computer
automation and telecommunication services. The department also strives to increase citizen
access to City services through the use of technology. The City continues to invest heavily in
new hardware and software. This continued investment, has led to increased depreciation
charges, which are reflected in charges for services made to the various departments using
information technology services throughout the City. Operating expenses also increased
significantly during the year as the City entered into several new maintenance contracts as well
as hired consultants to assist with citywide technology projects. At year-end, working capital
increased to $2.2 million, up $774,000 from 1999-2000. Of this amount, $577,000 is
earmarked for replacement of equipment in the future.
Risk Management
Revenues in the Risk Management fund are up by 35.5% from last year. The majority of this
revenue represents charges to other departments for general liability coverage. However, the
increase in this fiscal year's revenues as compared to the previous fiscal year was due to a
refund received as a result of prior year audit adjustments. Claims expense and other related
costs for the Risk Management Self-Insurance fund totaled $792,000, down $288,000 from
1999-2000. The City is a member of the California Municipal Excess Liability Program, a group
purchase program for general liability coverage, covering most losses exceeding $500,000 with
up to a maximum of $10,000,000 per occurrence. The decrease in total expenses for the fund
was not the result of fewer liability claims brought against the City, but rather the magnitude of
the claims.
The estimated claims payable for general liability at year-end was $640,000, up $16,000.
Working capital totaled $2.3 million at June 30, 2001, as compared to $2.9 million at June 30,
2000. The drop in working capital was due to a residual operating transfer of $1 million made to
the General fund to refund excess charges collected in prior fiscal years.
Worker's Compensation
Revenues in the Workers' Compensation fund are up slightly from the prior fiscal year. The
bulk of the revenue represents charges to other departments for Workers' Compensation
coverage. The only change in revenue was from reimbursements received in the fund for
settlements and other costs, reimbursed back to the fund. As the City's workforce increases,
the City's exposure to possible worker's compensation incidents also increases. The increase
in the City's staffing levels can be seen in this year's worker's compensation numbers. Also
reflected in the increase in claims expense, is the magnitude of the claims filed. Health
insurance costs have been on the rise, negatively impacting the City's claims expense. Claims
expense makes up the majority of the total expenses in the Workers' Compensation fund.
Claims expense for 2000-2001 amounted to $817,000, compared to $676,000 in 1999-2000.
Workers' Compensation estimated claims payable at year-end was $969,000, again,
moderately higher than the previous fiscal year.
26
Agency Funds
The City uses Agency funds to account for assets held by the City for other individuals, entities
or governments. Typically these funds relate to contractors' cash performance bonds,
assessment district reserve funds and employee and employer payroll tax withholding
accounts.
The City held a total of $16.1 million in Agency funds as of June 30, 2001, compared to $16.6
million at the end of 1999-2000. This decrease is due to a reduction in the amount of contractor
and miscellaneous deposits held by the City.
Cash Management
The City Treasurer is charged with the design of an effective cash management and investment
program consistent with the California Government Code, the Carlsbad Municipal Code and the
Carlsbad Investment Policy. Among other activities this includes arranging for banking
services, forecasting cash receipts and expenditures, investing all inactive cash, and reporting
investment activities. City Council, with the advice of the City Treasurer, annually adopts a
comprehensive investment policy specifying, among other things, investment objectives and
strategy, type and term of investments, reporting requirements, and investment oversight.
Investments are made either as pooled investments or as investments held separately.
Pooled investments are made and managed internally by the City Treasurer and include the
inactive cash of agencies controlled by the City and the various funds of those agencies. Cash
is received into the pool without regard to the agency or fund from which it originated. At the
end of fiscal year 2000-2001, total assets in the pooled investments were $374.1 million. This
represented an increase of $53.4 million, or 16.7%, from fiscal year 1999-2000. Pooled
investments are generally recorded at their market value as required by the Government
Accounting Standards Board statement #31.
The investments in the Treasurer's Pool earned approximately $21.6 million in interest, which
was an increase from $17.6 million earned in the previous fiscal year, due to the maintenance
of a higher average cash balance in the Treasurer's Pool throughout the year. The average
yield of the pooled investments for fiscal year 2000-2001 increased to 6.18% from 5.81% in
fiscal year 1999-2000.
Investments held separately are managed by the Finance Director and generally include bond
proceeds and other funds, which are individually invested. Total assets of investments held
separately were $9.8 million at the end of fiscal year 2000-2001.
The fiscal year 2000-2001 pooled investments and the investments held separately include the
types of instruments indicated on the following page.
27
Treasurer's Pooled Investments Interest Rates
Amount Invested
(In Millions)
Cash and Deposits
Federal Agency Obligations
Treasury Notes
Corporate Notes
Commercial Paper
Investment Pool (LAIF)
0.00-6.08
0.00-7.68
5.50-6.63
4.75-9.50
5.34-6.53
$ 2.2
197.6
4.1
110.5
0.0
59.7
SUBTOTAL $374.1
Investments Held Separately
Cash and Deposits
Mutual Funds
Guaranteed Investment Contracts
Investment Pool (LAIF)
SUBTOTAL
TOTAL
0.00
5.36
5.34
-2.43
-9.33
-6.53
$ .5
5.2
2.7
1.4
$ 9.8
$383.9
Gann Limit - Appropriations Subject to Limit
CITY OF CARLSBAD
PROPOSITION 4 SPENDING LIMIT VERSUS
APPROPRIATION OF PROCEEDS OF TAXES
(IN MILLIONS)
250
200 -
D Spending Limit
• Approp of Taxes
In 1979, Proposition 4, the "Gann"
initiative, was passed. The purpose of
this law is to limit government spending by
putting a cap on the total proceeds of taxes
that may be appropriated each year. This
limit is increased each year through a
formula that takes into consideration
changes in the Consumer Price Index and
state per-capita income. When a city
reaches this limit, excess tax revenue must
be returned to the State or citizens through
a process of refunds, rebates or other
means that may be defined at that time.
The Gann Limit for the City of Carlsbad has
increased steadily since 1979 and still
provides the City with a comfortable
operating margin.
In 1991-1992, state law allowed the
recalculation of the City's limit with new
inflation factors. Using population growth in San Diego County and growth in State per capita
income allowed the Gann limit for 2000-2001 to increase to $225.8 million. Appropriations of
"proceeds of taxes" were only $58.1 million, thus allowing the City a healthy margin of $167.7
million.
28
Economic Outlook
National
On September 11, 2001, terrorists attacked the World Trade Center in New York City, as well
as the Pentagon in Washington, D.C. The World Trade Center in New York is considered to be
the hub of the U.S. financial markets. These attacks crippled the U.S. financial markets as well
as the airline industry for several days. This has also led to a huge decline in airline travel and
consumer confidence, which has snowballed, affecting almost every industry in the country.
There is no prognosis as to when things will "return to normal", but there are signs of increased
airline travel and the stock market has recorded some recent increases, indicating that America
may be ready to resume their normal activities. Some experts suggest that this return to
normalcy may not occur until the war against Afghanistan and terrorism has been completed, or
at least until Americans feel that they are once again safe and secure.
California
The California economy was showing signs of weakness even before the September 11th
attacks. Since that time, the State's economy has further deteriorated resulting in projected
budget deficits for this year and the next. The State's fiscal condition was brought about mainly
by the downturn in the economy, the dot com implosion and the energy crisis. While it's difficult
to tell what the ultimate impact will be on local governments, the last recession has
demonstrated that if the State experiences budget shortfalls, it is likely that local government
revenues will be impacted.
During the last recession, the State took over $2.5 million from Carlsbad in the form of a
reallocation of property taxes. These taxes were never allocated back to the City. This time, it
is possible that the City may lose some portion of its Vehicle License Fees (VLF). VLF is
collected by the Department of Motor Vehicles on all registered vehicles in the State of
California. It is divided among cities and counties and disbursed to cities mainly on the basis of
population. In the past years, the State gave a tax cut to the citizens of California by reducing
the VLF rate by 67%. At this time, the State is backfilling (reimbursing) local governments for
the loss of this revenue from the State's General fund. However, if the State experiences
budget shortfalls, they may choose not to fund the backfill. If this occurs, the City would lose $3
million.
San Diego Region
Diversification of San Diego County's employment base after the recession of the early 1990's
has helped keep the region in positive growth territory, while other parts of California and the
nation are experiencing varied degrees of economic decline. Unfortunately, San Diego's
leading economic indicators, which include local unemployment insurance claims, building
permits, stock prices, consumer confidence, and help wanted advertising are weakening. The
reliability of electricity, the September 11, 2001 terrorist attacks in Washington, D.C. and New
York City, the impact of high gasoline prices on tourism and consumer spending, and the stock
market's volatility will likely be the most significant factors affecting the state, regional and local
economy in the coming year. One area that remains strong is housing. This is attributable in
part to lower mortgage interest rates for purchases and refinances, which has in turn fueled
both housing demand and consumer spending. As long as mortgage interest rates remain low
and the regional demand for housing exceeds the supply, we should see continued strength in
29
this sector. Overall, it is expected that San Diego's economic growth will continue, but
potentially at a much slower rate.
Carlsbad
Carlsbad, like the region, has benefited from diversification of its employment base and its
sources of revenue. The local economy has remained strong as a result of increased demand
for new housing, expansion of the hospitality industry and an increase in local consumer
spending. However, if San Diego's regional economy should begin to weaken significantly we
can expect the same effect to occur in Carlsbad.
Last year we predicted that the industrial/office/commercial market would continue to grow at a
slower pace than prior years. This was a result of over-building of space in 1998 and 1999,
some of which had not yet been leased or sold, in 2000, we saw a slight decline in construction
activity, with over half of the new construction attributed to commercial projects. Some of these
projects included a large self-storage facility, a new hotel, a residential care facility, and
timeshare units. Commercial development impacts our local economy by providing jobs,
increased property taxes through increased property values, higher development related
services revenues (building permits, building, engineering, and planning fees), new transient
occupancy taxes, and additional sales tax revenues. In the upcoming couple of years,
projected commercial developments include La Costa Plaza, Rancho La Costa Village and the
Pavillion at Carlsbad. These three projects will provide over 327,000 square feet in new retail
stores, restaurants, a supermarket, a drug store, and other service establishments, which will
help boost sales tax revenues as well as property taxes.
In fiscal year 2001-2002, we should continue to see a slow down in industrial development as
the supply of available industrial sites dwindles. Provided the local economy remains positive,
we expect to see this sector accelerate as new industrial sites in the Palomar Forum and
Raceway come online during the 2001-2002 timeframe. This type of development enhances
Carlsbad's economy by providing local jobs, increased property taxes and development related
service revenues.
New home construction in Carlsbad remained high for both 1999 and 2000. Carlsbad's coastal
location and quality of life continue to make it a highly desirable location to live; however,
Carlsbad's high-end residential market is beginning to experience some softening. While more
expensive homes continue to sell, they are on the market for longer periods of time with prices
often reduced. As a result of the slower pace in the upper price ranges, many new home
developers in the San Diego region have begun to rethink the high-end housing strategy and
concentrate on the mid-priced home market. Through the construction of new homes,
increased property taxes are generated as well as building, engineering and planning fees.
Carlsbad's prime coastal location, its two premiere resort hotels, Legoland, the airport, and its
many businesses make it a popular destination with both leisure and business travelers. In
fact, Carlsbad's lodging market has experienced significant growth over the past few years.
This is a result of additional room capacity generated from new properties such as the Grand
Pacific Resort, Hilton Gardens Inn, Marriott Residence Inn, and the Courtyard by Marriott,
which cater to the weekday business traveler and the weekend leisure traveler. We expect to
see continued growth as new properties like the Inns of America Suites come on line in late
2001. However, fewer people traveling and the related drop in visitor spending will undoubtedly
have an effect on the Carlsbad hospitality market.
30
Even before the events of September 11, 2001, other parts of California, especially the Bay
Area, were experiencing a decline in occupancy rates. These declines are primarily driven by
sharp decreases in corporate spending for business travel. Since most of Carlsbad's tourist
trade is generated from leisure travel originating in Southern California and the Southwestern
U.S., we do not expect to see as significant of a decline as many of the large cities in California,
unless the overall economy begins to deteriorate rapidly. Furthermore, in a slow economy, and
with a reluctance to fly on commercial aircraft, consumers are apt to stay closer to home and
shorten the duration of their stay. Carlsbad's strong presence in the "long weekend" and "drive"
market should help insulate the City from dramatic declines in occupancy.
In Summary
Despite the threats brought by fiscal
reform and the recent slow down in the
economy, Carlsbad is expected to
continue to prosper. Through careful
planning and prudent financial
management, the City has weathered the
roller coaster ride of the 1990's, and is
entering the 21s' century in strong financial
health. The outlook for the City reflects a
reduction in consumer confidence, slightly
increasing housing prices and continued
development, but at a slower rate than in
the past two years. The uncertainty in the
economy may show itself in more moderate consumer spending which is expected to slow
down the rate of growth in sales taxes and vehicle license fees as well as in tourism, which
effects the transient occupancy taxes. Despite the slowing economy, Carlsbad will continue to
stay focused on achieving its mission of providing top quality services to our citizens and
customers in a manner that enhances the quality of life for all who live, work and play in
Carlsbad.
Certificate of Award for Outstanding Financial Reporting
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of
Carlsbad for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June
30, 2000. This was the fourth consecutive year that the City has achieved this prestigious
award. In order to be awarded a Certificate of Achievement, a government unit must publish an
easily readable and efficiently organized comprehensive annual financial report. This report
must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement
Program's requirements and we are submitting it to GFOA to determine its eligibility for another
certificate.
In addition to the GFOA award, the California Society of Municipal Finance Officers (CSMFO)
presented a Certificate of Award for Outstanding Financial Reporting to the City of Carlsbad for
31
its comprehensive annual financial report for the fiscal year ended June 30, 2000. We believe
our current report continues to conform to the program requirements.
Financial Statement Format
This report is designed to provide both summarized and detailed information on the operation of
each of the City's funds. The report is organized as follows:
Introductory Section - This section contains the table of contents, letter of transmittal,
CAFR awards, location map, list of City officials, organization
chart, and the boards, commissions and committees chart.
Financial Section - This section contains the combined or summarized financial
statements for all funds, as well as the notes to the financial
statements and required supplementary information.
Statistical Information - This section provides data on the City's fiscal activity over the
past ten years including revenues, expenditures, debt, assessed
value, and demographic information.
Accounting System and Budgetary Control
The City's accounting system is designed around the following basic principles:
(1) The City is not a single entity. It is the total of many entities, each with its separate
function and legal restrictions on the use of City resources. In the private sector, a
corporation may have many "subsidiaries" which comprise the parent corporation. In the
public sector, a city government may have a variety of "funds" that provide the basis for
separately recording the financial data related to a specific activity. A fund is an
accounting entity with a complete set of self-balancing accounting records. Each fund has
been established because of some restriction on the use of resources received by that
fund. This report includes the transactions of all entities over which the City Council of the
City of Carlsbad has authority (as defined by the Governmental Accounting Standards
Board).
(2) The City's accounting system operates on a modified accrual basis for all governmental
and agency-type funds. Governmental funds include the General, Special Revenue, Debt
Service, and Capital Projects funds. A modified accrual system is one where: a)
revenues are recognized when they are both measurable and available to liquidate
liabilities of the current period; and b) expenditures are recognized when an event or
transaction is expected to draw upon current spendable resources (rather than future
resources).
(3) The proprietary fund types (Enterprise and Internal Service funds) use the accrual method
of accounting. Revenues and expenses are recorded when earned or incurred,
respectively.
(4) Internal controls exist within the accounting system to ensure safety of assets from
misappropriation, unauthorized use or disposition, and to maintain the accuracy of
32
financial record keeping. These internal controls must be established consistent with
sound management practices based on the cost/benefit of the controls imposed. The cost
of a control should not be excessive in relation to its benefit as viewed by City
management. The internal controls in existence within the City's system are sufficient to
ensure in all material aspects both the safety of the City's assets and the accuracy of the
financial record keeping system.
(5) As a recipient of Federal, State and County financial assistance, the City is also
responsible for ensuring that an adequate framework of internal controls is in place to
ensure compliance with applicable laws and regulations related to those programs. The
framework of internal controls is subject to periodic evaluation by management.
As part of the City's Single Audit, tests are made to determine the adequacy of the
framework of internal controls. This includes the portion relating to Federal assistance
programs, as well as determining that the government has complied with applicable laws
and regulations. The results of the City's Single Audit for the fiscal year ended June 30,
2001, provided no material weaknesses in the framework of internal controls or significant
violations of applicable laws and regulations.
(6) Budgetary control is maintained through monthly reports on all revenue and expenditure
accounts as well as monthly reports summarizing the financial position of the City. The
City Council has the authority to control the budget through adoption of a formal budget at
the beginning of each year and by amending the budget as necessary through the year.
Expenditures should not exceed budgeted figures. All appropriations expire at year-end
unless specifically carried into the new fiscal year by Council action. The Carlsbad
Municipal Code requires that the City Manager annually prepare a budget for the City
Council with a message describing important features, and be responsible for its
administration after adoption.
Acknowledgments
This report has been a joint effort by many people from many different areas of responsibility.
The dedicated efforts of Kevin Branca, Assistant Finance Director, and all of the accounting
staff, deserve full credit for the preparation and contents of this report. We appreciate
Kreithchele Angeles of Conrad and Associates, L. L. P. for the professional way in which the
audit of this financial report was conducted. It has been a pleasure to work with the Conrad and
Associates staff throughout this period.
Respectfully submitted,
LISA HILDABRAND
Finance Director
33
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Carlsbad,
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2000
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
6^<^-<—
Executive Director
34
California Society ofJ U J
^finance Officers
Certificate of Award
Outstanding Financial Reporting 1999-2000
Presented to the
City of Carlsbad
This certificate is issued in recognition of meeting professional standards and criteria in reporting
which reflect a high level of quality in the annual financial statements
and in the underlying accounting system from which the reports were prepared.
February' 26, 2001
Chair, Professional & Technical Standards Committee
Dedicated to Excellence in Municipal Financial Management
IT
>Y
35
ORANGE
COUNTY
RIVERSIDE COUNTY
OCEANSIDE
CARLSBAD
ENCINITAS
SOLANA BEACH
DEL MAR I T-5
LAJOLLA
SAN DIEGO
CORONADO
IMPERIAL BEACH
TIJUANA
36
CITY OF CARLSBAD
ELECTED CITY OFFICIALS
Claude A. "Bud" Lewis, Mayor
Ann J. Kulchin, Mayor Pro Tem
Ramona Finnila, Council Member
Matt Hall, Council Member
Julianne Nygaard, Council Member
Lorraine Wood, City Clerk
James M. Stanton, City Treasurer
ADMINISTRATION AND DEPARTMENT HEADS
Raymond R. Patchett, City Manager
Frank Mannen, Assistant City Manager
James F. Elliott, Administrative Services Director
Lloyd Hubbs, Public Works Director
Sandra Holder, Community Development Director
Jim Hawks, Police Chief
Mike Smith, (Acting) Fire Chief
Ron Ball, City Attorney
Julie Clark, Human Resources Director
Ruth Fletcher, Purchasing Officer
Debbie Fountain, Housing & Redevelopment Director
Robert J. Greaney, Water Department General Manager
Lisa Hildabrand, Finance Director
Michael Holzmiller, Planning Director
Pat Kelley, Principal Building Inspector
Clifford Lange, Library Director
Erin Letsch, Risk Manager
Ken Price, Recreation Director
Aletha L. Rautenkranz, Information Systems Director
CHAIRPERSONS, COMMISSIONS AND BOARDS
Susan Pynes Arts Commission
Bruce Macklin Beach Erosion Committee
Robert Turner Community Television Foundation
Bill Compas Design Review Board
Gordon Bizieff Historic Preservation Commission
Roy Latas Housing Commission
Claude A. Lewis Housing and Redevelopment Commission
William Kamenjarin Library Board of Trustees
William Scott Pieratt Parks and Recreation Commission
Vacant Personnel Board
Jeff Segall Planning Commission
James Whittaker Senior Commission
Ann L'Heureux Serra Cooperative Library System Advisory Board
Bill Dominguez Sister City Committee
Frank H. Whitton Traffic Safety Commission
Vacant Underground Utility Advisory Committee
37
OJ00
CITY OF CARLSBAD ORGANIZATION CHART
Personnel
Board
Beach
Erosion
Committee
Community
Television
Foundation
Traffic
Safety
Commission
Underground
Utility Advisory
Committee
Design
, Review
Board
Housing
1 Commission
i Housing &
-[ Redevelopment
i Commission
Planning
i Commission
PUBLIC
SAFETY
ADMINISTRATIVE
SERVICES
FIRE
POLICE
KEY
Elected
Council Appointed 'I -
Staff Support
Reporting Relationship
Programs
0
DWl
— ~
rzn
FINANCE
HUMAN
RESOURCES
INFORMATION
TECHNOLOGY
PURCHASING
RISK
MANAGEMENT
RECORDS
MANAGEMENT
MAYOR"\
& )COUNCIL^-/
( CITY >j
VTREASURER/
CITY MANAGER CITY ATTORNEY
PUBLIC
WORKS
ADMINISTRATION
ENGINEERING
SERVICES
GENERAL
SERVICES
MAINTENANCE &
OPERATIONS
COMMUNITY
DEVELOPMENT
COMMUNITY
SERVICES
er %-s:
t**. "!$n1?*
BUILDING
ECONOMIC
DEVELOPMENT
GEOGRAPHIC
INFO SYSTEMS
HOUSING AND
REDEVELOPMENT
PLANNING
ARTS
LIBRARY
RECREATION
SENIOR
CENTER
Arts
Commission
_, Sister City
i Committee
Historic
Preservation
Commission
i Library Board
-« of
i Trustees
i Serra Cooperative
-' Library System
i Advisory Board
' Parks & Rec
, Commission
Senior
Commission
BOARDS, COMMISSIONS, AND COMMITTEES
CITY
COUNCIL
Arts
Commission
Beach Erosion
Committee
Community
Television
Foundation
Design
Review
Board
Historic
Preservation
Commission
Housing
Commission
Housing and
Redevelopment
Commission
Library
Board of
Trustees
Parks and
Recreation
Commission
Personnel
Board
Planning
Commission
Senior
Commission
Serra Cooperative
Library System
Advisory Board
Sister
City
Committee
Traffic
Safety
Commission
Underground
Utility Advisory
Committee
102901
40
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o>
I™*"
<^f\m
OZ
CONRAD
ASSOCIATES, L.L.R
AND CERTIFIED PUBLIC ACCOUNTANTS
1100 MAIN STREET, SUITE C
IRVINE, CALIFORNIA 92614
(949) 474-2020
Fax (949) 263-5520
City Council
City of Carlsbad, California
Independent Auditors' Report
P* We have audited the accompanying general purpose financial statements of the City of Carlsbad,
California as of and for the year ended June 30, 2001, as listed in the table of contents. These general
** purpose financial statements are the responsibility of the management of the City of Carlsbad,
California. Our responsibility is to express an opinion on these general purpose financial statements
"" based on our audit.
m
We conducted our audit in accordance with auditing standards generally accepted in the United States of
«• America and Government Auditing Standards, issued by the Comptroller General of the United States of
JH America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the general purpose financial statements are free of material misstatement. An audit
M includes examining, on a test basis, evidence supporting the amounts and disclosures in the general
^ purpose 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.
if In our opinion, the general purpose financial statements referred to above present fairly, in all material
respects, the financial position of the City of Carlsbad, California as of June 30, 2001, and the results of
pi its operations and the cash flows of its proprietary fund types for the year then ended in conformity with
H accounting principles generally accepted in the United States of America.
p. During the year ended June 30, 2001, the City changed its method of accounting for capital contributions
'•, as a result of implementing GASB Statement No. 33, as described further in note 15 to the financial
** statements.
^ Our audit was made for the purpose of forming an opinion on the general purpose financial statements
m taken as a whole. The combining, individual fund, and individual account group financial statements
and schedules listed in the table of contents are presented for purposes of additional analysis and are not
p a required part of the general purpose financial statements of the City of Carlsbad, California. Such
L~ information has been subjected to the auditing procedures applied in the audit of the general purpose
financial statements and, in our opinion, is fairly stated in all material respects in relation to the general
purpose financial statements taken as a whole. The scope of our audit did not include the statistical
schedules listed in the table of contents and we do not express an opinion on them.
H
I"
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
** MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
41
City Council
City of Carlsbad, California
Page Two
In accordance with Government Auditing Standards, we have also issued our report dated September 21,
2001 on our consideration of the City of Carlsbad's internal control over financial reporting and our tests
of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an
integral part of an audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
September 21,2001
42
43
CITY OP CARLSBAD
Combined Balance Sheet - All Fund Types and Account Groups
June 30, 2001
Assets and Other Debits
Assets:
Cash and investments (note 3)
Receivables:
Loans
Taxes
Accrued interest
Accounts, net
Other
Due from other funds (note 4)
Due from other governments
Advances to other funds (note 5)
Inventory
Prepaid items
Restricted assets:
Cash and investments (note 3)
Accrued interest
Fixed assets, net (notes 6 and 7)
Other debits:
Amount to be provided for retirement of
general long-term debt
Total assets and other debits
Liabilities. Equity and Other Credits
Liabilities:
Accrued liabilities
Accrued interest payable
Due to other funds (note 4)
Advances from other funds (note 5)
Due to other governments
Estimated claims payable (note 17)
Due to bondholders
Current portion of long-term debt (note 10)
Deposits payable
Current liabilities payable from
restricted assets - accrued interest
Deferred revenue
Long-term debt payable (notes 8,9, and 10)
Total liabilities
Equity and Other Credits:
Investment in general fixed assets
Contributed capital (note 15)
Fund balances:
Reserved (note 13)
Unreserved (note 13)
Retained earnings:
Reserved (note 13)
Unreserved (note 13)
Total equity and other credits
Total liabilities, equity and other credits
125,013
8,645,217
13,274,918
11,746,139
58,857,284
70,603,423
Governmental Fund Types
General
$ 62,935,559
184,422
3,537,458
-
49,496
293,278
60,451
2,000
16,762,452
35,585
17,640
Special
Revenue
26,079,826
9,081,414
25,606
131
10,424
-
-
255,335
3,000,000
-
206,815
Debt Capital
Service Projects
2,375,840 151,310,874
_
25,586 8,856
16,026 18,873
384,822
-
-
1,376,096
4,970,854
-
221,133
$ 83,878,341
$ 4,504,688
-
38,659,551
276,659
47,048
4,222
2,417,452
.
12,475,252
158,291,508
839,388
13,403
9,520,854
91,379
252,433
671,741
18,278,357
19,709,453
12,475.252
1,528,500
(11,586,300)
37,987,810 (10,057,800)
9,000
303,935
10,686,580
16,222,805
131,382,123
147,604,928
$ 83,878,341 38,659,551 2,417,452 158,291,508
See accompanying notes to general purpose financial statements.
44
Fiduciary
Proprietary Fund Types Fund Type
Enterprise
110,386,363
_
59,946
-
3,581,106
-
-
-
-
265,334
4,550
1,716,656
28,557
138,271,615
254,314,127
4,406,846
-
-
2,737,200
575,280
-
-
1,834,070
1,521,324
260,843
1,147,349
12,478,164
24,961,076
137,353,743
_
-
1,682,161
90,317,147
229,353,051
254,314,127
Internal
Service Agency
13,095,116 15,979,416
_
20,283
93,522
269,649 486
-
-
-
-
108,000
50,290
_
-
7,059,419
20,582,474 16,093,707
566,762
1,900,056
-
-
-
1,882,393
8,576,226
-
5,617,425
_
-
20,490
2,469,645 16,093,707
8,815,419
_ '
-
_
9,297,410
18,112,829
20,582,474 16,093,707
Account Groups
General General
Fixed Long-Term Totals
Assets Debt (Memorandum Only)
382,162,994
9,265,836
3,677,735
128,552
4,295,983
293,278
60,451
1,633,431
24,733,306
408,919
500,428
1,716,656
28,557
121,033,984 - 266,365,018
20,287,900 20,287,900
121,033,984 20,287,900 715,559,044
10,594,343
1,900,056
60,451
24,733,306
579,502
1,882,393
8,576,226
1,834,070
7,364,141
260,843
10,348,934
20,287,900 32,786,554
20,287,900 100,920,819
121,033,984 - 121,033,984
146,169,162
47,775,801
198,362,560
1,682,161
99,614,557
121,033,984 - 614,638,225
121,033,984 20,287,900 715,559,044
45
46
CITY OF CARLSBAD
Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types
Year Ended June 30,2001
Totals
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Income from property and investments
Interdepartmental charges
Contributions from property owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Public safety
Community development
Community services
Public works
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Proceeds of debt
Total other financing sources (uses)
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures and
other financing uses
Fund balances at beginning of year
Residual equity transfers in (note 16)
Residual equity transfers out (note 16)
Fund balances at end of year
General
$ 57,435,104
5,544,848
3,409,156
6,170,698
763,681
4,816,922
2,147,717
-
-
1,312,367
81,600,493
7,772,055
23,364,767
5,293,259
10,678,280
12,225,167
-
26,613
43,473
59,403,614
22,196,879
252,412
(8,815,546)
51,853
(8,511,281)
13,685,598
56,502,769
1,015,056
(600,000)
$ 70,603,423
Special
Revenue
1,910,205
4,728,709
-
-
124,927
2,654,739
-
3,377,047
311,976
412,986
13,520,589
262,417
4,058,658
892,969
2,176,929
-
145,497
51,381
7,587,851
5,932,738
17,430
(53,647)
29,550
(6,667)
5,926,071
34,133,574
-
(2,071,835)
37,987,810
Debt
Service
1,575,295
-
-
-
-
140,442
-
-
-
-
1,715,737
36,531
-
-
-
-
-
820,000
1,707,041
2,563,572
(847,835)
800,000
(280,000)
-
520,000
(327,835)
(9,563,120)
-
(166,845)
(10,057,800)
Capital
Projects
9,226,819
4,012,120
-
256,609
-
12,772,515
-
12,605,481
-
534,585
39,408,129
1,213,632
-
-
-
-
22,066,731
37,329
11,756
23,329,448
16,078,681
8,474,346
(501,394)
9,850
7,982,802
24,061,483
121,319,821
2,223,624
-
147,604,928
(Memorandum
Only)
70,147,423
14,285,677
3,409,156
6,427,307
888,608
20,384,618
2,147,717
15,982,528
311,976
2,259,938
136,244,948
9,022,218
23,627,184
9,351,917
11,571,249
14,402,096
22,066,731
1,029,439
1,813,651
92,884,485
43,360,463
9,544,188
(9,650,587)
91,253
(15,146)
43,345,317
202,393,044
3,238,680
(2,838,680)
246,138,361
See accompanying notes to general purpose financial statements.
47
CITY OF CARLSBAD
Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual (Budgetary Basis) - All Governmental Fund Types
Year Ended June 30, 2001
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Income from property and investment
Interdepartmental charges
Contributions from property owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Public safety
Community development
Community services
Public works
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Proceeds of debt
Total other financing sources
(uses)
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures and
other financing uses
Fund balances at beginning of year,
Residual equity transfers in
Residual equity transfers out
Fund balances at end of year
General Fund
Budget
$ 58,041,000
5,409,000
3,500,000
5,810,000
797,000
3,725,000
2,100,000
949,640
80,331,640
12,217,776
24,136,954
6,505,683
11,577,407
13,526,446
67,964,266
12,367,374
252,134
(8,815,546)
(8,563,412)
3,803,962
56,502,769
1,000,000
(600,000)
$ 60,706,731
Actual on
Budgetary
Basis
57,435,104
5,544,848
3,409,156
6,170,698
763,681
4,816,922
2,147,717
1,312,367
81,600,493
8,463,275
23,807,754
5,846,994
11,199,889
13,115,205
62,433,117
19,167,376
252,412
(8,815,546)
51,853
(8,511,281)
10,656,095
56,502,769
1,015,056
(600,000)
67,573,920
Variance-
Over
(Under)
(605,896)
135,848
(90,844)
360,698
(33,319)
1,091,922
47,717
362,727
1,268,853
(3,754,501)
(329,200)
(658,689)
(377,518)
(411,241)
(5,531,149)
6,800,002
278
51,853
52,131
6,852,133
15,056
6,867,189
Special Revenue Funds
Budget
342,500
4,366,237
274,899
15,000
923,766
2,744,729
392,924
153,883
9,213,938
579,358
5,333,119
1,369,664
8,719,313
16,001,454
(6,787,516)
-
(6,787,516)
34,133,574
27,346,058
Actual on
Budgetary
Basis
1,910,205
4,728,709
124,927
2,654,739
3,377,047
311,976
412,986
13,520,589
492,250
4,454,488
1,320,686
8,383,683
14,651,107
(1,130,518)
17,430
(53,647)
29,550
(6,667)
(1,137,185)
34,133,574
(2,071,835)
30,924,554
Variance-
Over
(Under)
1,567,705
362,472
(274,899)
109,927
1,730,973
632,318
(80,948)
259,103
4,306,651
(87,108)
(878,631)
(48,978)
(335,630)
(1,350,347)
5,656,998
17,430
(53,647)
29,550
(6,667)
5,650,331
(2,071,835)
3,578,496
See accompanying notes to general purpose financial statements.
48
Debt Service Funds
Budget
1,370,000
40,000
1,410,000
67,938
290,000
1,478,954
1,836,892
(426,892)
-
(426,892)
(10,507,997)
_
(10,934,889)
Actual on
Budgetary
Basis
1,575,295
95,641
1,670,936
36,531
305,000
1,471,151
1,812,682
(141,746)
(280,000)
(280,000)
(421,746)
(10,507,997)
(166,845)
(11,096,588)
Variance-
Over
(Under)
205,295
55,641
260,936
(31,407)
15,000
(7,803)
(24,210)
285,146
(280,000)
(280,000)
5,146
-
(166,845)
(161,699)
Budget
59,753,500
9,775,237
3,500,000
6,084,899
812,000
4,688,766
2,100,000
2,744,729
392,924
1,103,523
90,955,578
12,285,714
24,716,312
11,838,802
12,947,071
22,245,759
290,000
1,478,954
85,802,612
5,152,966
252,134
(8,815,546)
(8,563,412)
(3,410,446)
80,128,346
1,000,000
(600,000)
77,117,900
Totals
(Memorandum Only)
Actual on
Budgetary
Basis
60,920,604
10,273,557
3,409,156
6,170,698
888,608
7,567,302
2,147,717
3,377,047
311,976
1,725,353
96,792,018
8,499,806
24,300,004
10,301,482
12,520,575
21,498,888
305,000
1,471,151
78,896,906
17,895,112
269,842
(9,149,193)
81,403
(8,797,948)
9,097,164
80,128,346
1,015,056
(2,838,680)
87,401,886
Variance-
Over
(Under)
1,167,104
498,320
(90,844)
85,799
76,608
2,878,536
47,717
632,318
(80,948)
621,830
5,836,440
(3,785,908)
(416,308)
(1,537,320)
(426,496)
(746,871)
15,000
(7,803)
(6,905,706)
12,742,146
17,708
(333,647)
81,403
(234,536)
12,507,610
15,056
(2,238,680)
10,283,986
49
CITY OF CARLSBAD
Combined Statement of Revenues, Expenses and
Changes in Retained Earnings - All Proprietary Fund Types
Year Ended June 30, 2001
Operating revenues:
Water sales
Sewer services charges
Other charges for services
Contributions from other
government agencies
Miscellaneous
Total operating revenues
Operating expenses:
Sewer plant operations
Purchased water
Depreciation
Fuel and supplies
Claims expense
General and administrative
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Income from property and investments
Interest expense and fees
Gain (loss) on disposition of assets
Property taxes
Amortization of issuance costs
Total nonoperating revenues
(expenses)
Income before capital contributions
and transfers
Operating transfers in
Operating transfers out
Capital contributions
Net income (loss)
Retained earnings at beginning of year
Residual equity transfers out
Retained earnings at end of year
Enterprise
$ 16,474,378
5,654,116
1,362,335
476,374
909,463
24,876,666
2,153,572
10,587,342
2,912,755
7,426,619
23,080,288
1,796,378
8,798,382
(851,558)
(45,456)
1,370,736
(11,309)
9,260,795
11,057,173
10,103,261
21,160,434
70,838,874
$ 91,999,308
Internal Totals
Service (Memorandum Only)
9,556,849
658,868
10,215,717
1,511,459
525,966
3,717,337
3,881,371
9,636,133
579,584
1,064,078
79,812
1,143,890
1,723,474
121,400
(15,000)
290,495
2,120,369
8,177,041
(1,000,000)
10,297,410
16,474,378
5,654,116
10,919,184
476,374
1,568,331
35,092,383
2,153,572
10,587,342
4,424,214
525,966
3,717,337
11,307,990
32,716,421
2,375,962
9,862,460
(851,558)
34,356
1,370,736
(11,309)
10,404,685
12,780,647
121,400
(15,000)
10,393,756
23,280,803
79,015,915
(1,000,000)
102,296,718
See accompanying notes to general purpose financial statements.
50
CITY OF CARLSBAD
Combined Statement of Cash Flows - All Proprietary Fund Types
Year Ended June 30, 2001
Totals
Cash flows from operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:
Depreciation and amortization
(Increase) decrease in receivables
(Increase) decrease in inventory
(Increase) decrease in prepaid expenses
Increase (decrease) in accrued liabilities
Increase (decrease) in due to other governments
Increase (decrease) in deposits payable
Increase (decrease) in estimated claims payable
Increase (decrease) in deferred revenue
Increase (decrease) in loans payable
Net cash provided by (used for) operating activities
Cash flows from noncapital financing activities:
Cash received from other funds
Cash paid to other funds
Net cash provided by (used for) noncapital
financing activities
Cash flows from capital and related financing activities:
Purchases of fixed assets
Principal payment on bonds
Interest and other fees paid
Property taxes received
Capital contributions received
Net cash provided by (used for) capital
and related financing activities
Cash flows from investing activities:
Interest on investments
Net cash provided by (used for) 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
Enterprise Internal Service (Memorandum Only)
$ 1,796,378
2,912,755
429,175
12,007
(200)
(13,353)
(714,387)
27,266
(387,153)
(107,546)
3,954,942
600,000
600,000
(6,660,830)
(1,661,614)
(935,016)
1,370,736
7,949,547
62,823
8,800,494
8,800,494
13,418,259
96,991,053
$110,409,312
579,584
1,511,459
(244,607)
(10,925)
(15,010)
100,145
39,674
(14,342)
1,945,978
121,400
(1,015,000)
(893,600)
(1,681,648)
(1,681,648)
1,064,078
1,064,078
434,808
12,660,308
13,095,116
2,375,962
4,424,214
184,568
1,082
(15,210)
86,792
(714,387)
27,266
39,674
(401,495)
(107,546)
5,900,920
721,400
(1,015,000)
(293,600)
(8,342,478)
(1,661,614)
(935,016)
1,370,736
7,949,547
(1,618,825)
9,864,572
9,864,572
13,853,067
109,651,361
123,504,428
(Continued)
51
m
CITY OF CARLSBAD
Combined Statement of Cash Flows - All Proprietary Fund Types
(Continued)
Enterprise Internal Service
Reconciliation of cash and cash equivalents to amounts
reported on the balance sheet:
Reported on the balance sheet:
Cash and investments
Restricted assets - cash and investments
Less investments not meeting the definition of cash
equivalents:
Investment contracts
Cash and cash equivalents at end of year
$ 110,386,363
1,716,656
(1,693,707)
$110,409,312
13,095,116
13,095,116
Totals
(Memorandum Only)
123,481,479
1,716,656
(1,693,707)
123,504,428
Supplemental schedule of noncash investing,
capital and financing activities:
Capital assets contributed by (to) other funds 1,553,714 290,495 1,844,209
See accompanying notes to general purpose financial statements.
52
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
Year Ended June 30,2001
(1) Summary of Significant Accounting Policies
The City of Carlsbad, California (Carlsbad) was incorporated on July 16, 1952. Carlsbad
operates under a Council-Manager form of government and provides the following
services: general government, public safety, community development, community
services and public works.
The accounting policies of Carlsbad and its component units conform to generally
accepted accounting principles as applicable to governmental units. The following is a
summary of the more significant policies:
(a) Description and Scope of the Reporting Entity
As required by generally accepted accounting principles, these financial
statements present the City of Carlsbad (City) and its component units, entities for
which the City is considered to be financially accountable. The City is considered
to be financially accountable for an organization if the City appoints a voting
majority of that organization's governing body and the City is able to impose its
will on that organization or there is a potential for that organization to provide
specific financial benefits to or impose specific financial burdens on the City. The
City is also considered to be financially accountable for an organization if that
organization is fiscally dependent upon the City (i.e., it is unable to adopt its
budget, levy taxes, set rates or charges, or issue bonded debt without approval
from the City). In certain cases, other organizations are included as component
units if the nature and significance of their relationship with the City are such that
their exclusion would cause the City's financial statements to be misleading or
incomplete.
Based upon the above criteria, the component units of the City are the Housing
Authority of the City of Carlsbad, the City of Carlsbad Public Improvement
Corporation, the Carlsbad Redevelopment Agency and the Carlsbad Municipal
Water District (District).
Since the City Council serves as the governing board for these component units,
all of the City's component units are considered to be blended component units.
Blended component units, although legally separate entities, are in substance, part
of the City's operations and so data from these units are reported with the
interfund data of the primary government. Only the City of Carlsbad Public
Improvement Corporation and the Carlsbad Redevelopment Agency issue
separate component unit financial statements. Upon their completion, the
financial statements of these component units can be obtained from the Finance
department.
53
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies. (Continued)
(b) Basis of Presentation
The accounts of the City 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/retained
earnings, revenues, and expenditures or expenses. The various funds and account
groups are summarized by type in the financial statements. Fund types and
account groups used by the City are as follows:
GOVERNMENTAL FUND TYPES:
Governmental funds are used to account for the City's expendable financial
resources and related liabilities (except those accounted for in proprietary and
similar trust funds). The measurement focus is based upon determination of
changes in financial position. The following are the City's governmental fund
types:
General Fund
' The General fund is the general operating fund of the City. It is used to account
for all financial resources except those required to be accounted for in another
fund.
Special Revenue Funds
Special revenue funds are used to account for revenues derived from specific
sources (other than major capital projects) that are restricted by law or
administrative regulation to expenditures for specific purposes.
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.
Capital Projects Funds
Capital projects funds are used to account for financial resources to be used for
the acquisition or construction of major capital facilities other than those financed
by proprietary funds.
54
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
PROPRIETARY FUND TYPES:
The City applies all applicable GASB pronouncements in accounting and
reporting for its proprietary operations as well as the following pronouncements
issued on or before November 30, 1989, unless these pronouncements conflict
with or contradict GASB pronouncements: Financial Accounting Standards
Board (FASB) Statements and Interpretations, Accounting Principles Board
(APB) Opinions, and Accounting Research Bulletins (ARBs) of the Committee
on Accounting Procedure. Proprietary funds include the following fund types:
Enterprise Funds
Enterprise funds are used to account for operations (a) that are financed primarily
through user charges, or (b) where the governing body has decided that
determination of net income is appropriate.
Internal Service Funds
Internal service funds are used to account for goods or services provided by one
department to other departments of the City on a cost-reimbursement basis.
FIDUCIARY FUND TYPE:
Fiduciary funds are used to account for assets held by the City in a trustee
capacity or as an agent for individuals, private organizations, other governmental
units, and/or other funds. The following is the City's fiduciary fund type:
Agency Fund
Agency funds are used to account for assets held by the City in an agency
capacity for individuals and private businesses. They do not involve
measurement of results of operations.
ACCOUNT GROUPS:
Account groups are used to establish accounting control and accountability for the
City's general fixed assets and general long-term debt. The following are the
City's account groups:
55
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued')
General Fixed Assets Account Group
This account group is used to account for all fixed assets of the City other than
those accounted for in the proprietary funds.
General Long-Term Debt Account Group
This account group is used to account for all long-term obligations of the City
except those accounted for in the proprietary funds and trust funds.
(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.
The proprietary fund types are accounted for on an "income determination" or
"cost of services" measurement focus. Accordingly, all assets and liabilities are
included on the balance sheet, and the reported fund equity provides an indication
of the historical net worth of the fund. Operating statements for proprietary fund
types report increases (revenues) and decreases (expenses) in total historical net
worth.
Fiduciary fund types are custodial in nature (assets equal liabilities) and do not
involve measurement of results of operations. Fiduciary fund assets and liabilities
are accounted for on the modified accrual basis of accounting.
Governmental fund types use the modified accrual basis of accounting. Revenues
are recognizable 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. In applying the susceptible to
accrual concept to intergovernmental revenues, the legal and contractual
requirements of the individual programs are used as guidance.
Revenues that are accrued include real property taxes, sales tax, transient
occupancy taxes, franchise taxes, vehicle license fees, highway users tax, interest,
and some state and federal grants.
56
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
Real property taxes are levied on October 15 against owners of record at January
1. The taxes are due in two installments, on November 1 and February 1, and
become delinquent after December 10 and April 10, respectively. Tax liens attach
annually as of 12:01 a.m. on the first day of January in the fiscal year for which
the taxes are levied. Under the provisions of NCGA Interpretation 3, property tax
revenue is recognized in the fiscal year for which the taxes have been levied,
provided it is collected within 60 days of the end of the fiscal year.
Governmental expenditures are recorded when the related fund liability is
incurred. Principal and interest on general long-term debt are recorded as fund
liabilities when due or when amounts have been accumulated in the debt service
fund for payments to be made early in the following year.
Proprietary funds use the accrual basis of accounting, i.e., revenues are recognized
in the period earned and expenses are recognized in the period incurred.
(d) Encumbrances
Encumbrance accounting, under which purchase orders, purchase order requests,
contracts and other commitments for the expenditure of monies are recorded in
order to reserve that portion of the applicable appropriation, is employed as an
extension of formal budgetary control in the governmental funds. Encumbrances
outstanding at year-end do not constitute expenditures or liabilities, but are
reported as reservations of fund balance.
(e) Cash and Investments
Cash includes amounts in demand and time deposits. Investments are reported in
the accompanying balance sheet at fair value, except for certain certificates of
deposit and investment contracts that are reported at cost because they are not
transferable and they have terms that are not affected by changes in market
interest rates.
Changes in fair value that occur during a fiscal year are recognized as income
from property and investments reported for that fiscal year. Income from property
and investments includes interest earnings; changes in fair value; any gains or
losses realized upon the liquidation, maturity, or sale of investments; property
rentals and the sale of City owned property.
57
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies. (Continued)
The City pools cash and investments of all funds, except for assets held by fiscal
agents. Each fund's share in this pool is displayed in the accompanying financial
statements as cash and investments. Investment income earned by the pooled
investments is allocated to the various funds based on each fund's average cash
and investments balance.
Restricted cash and investments represent amounts that are restricted under the
terms of debt agreements, including debt service reserves and balances associated
with special assessments for the construction of enterprise fund assets.
(f) Inventories
Inventories consist of materials and supplies that are valued at cost and are
recorded as expenses or expenditures on a first-in, first-out basis when consumed.
(g) Compensated Absences
Vacation pay is payable to employees at the time used or upon termination of
employment. For governmental funds, the cost of accumulated vacation expected
to be paid in the next 12 months is recorded as a fund liability and amounts
expected to be paid after 12 months (if any) are recorded in the general long-term
debt account group. For compensated absences recorded at June 30, 2001, all
balances are expected to be paid within the following 12 months. For proprietary
funds, the cost of vacation is recorded as a liability when earned.
(h) Risk Management
The City accounts for its general liability, a portion of its health insurance, and
workers' compensation activities in internal service funds. The funds are
responsible for collecting premiums from other City funds and departments and
paying claims settlements and insurance premiums. Interfund premiums are
based on the insured fund's claims experience. Incurred but not reported claims
are accrued at year-end if material.
(i) Unbilled Services
Unbilled water revenue of the enterprise funds is recognized as earned when the
water is consumed.
58
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(j) General Fixed Assets
General fixed assets are recorded as expenditures in the governmental fund types
and capitalized at historical cost in the general fixed assets account group. In the
case of gifts or contributions, such assets are recorded at fair market value at the
time received.
Fixed assets consisting of certain improvements other than buildings, including
roads, bridges, curbs and gutters, streets and sidewalks, and drainage systems,
have not been capitalized. Such assets normally are immovable and of value only
to the City. Therefore, the objective of stewardship for capital expenditures is
satisfied without recording these assets.
In the General Fixed Assets Account Group, construction in progress is
transferred to buildings or improvements upon approval by the City Council,
which approximates the completion date.
No depreciation has been provided on general fixed assets,
(k) Fixed Assets - Proprietary Funds
Fixed assets used by proprietary funds are stated at cost or estimated historical
cost. Contributed fixed assets are recorded at estimated fair market value at the
time received. Net interest costs are capitalized on projects during the
construction period.
Depreciation is charged to operations using the straight-line method based on the
estimated useful life of the related asset. The estimated useful life of the assets
are as follows:
Years
Buildings and improvements 10 - 50
Wells, reservoirs and dams 10 -100
Transmission and distribution lines 40 - 70
Sewer, sewer lines and wells 50
Sewage treatment facility 50
Equipment 3-20
59
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies. (Continued)
(1) Deferred Revenue
The deferred revenue reported in the City's financial statements represent money
received during the current or previous fiscal years that has not been earned by the
City as of the end of the fiscal year. These monies will be recognized as revenues
in subsequent fiscal years, once the revenue has been earned.
(m) Advances to Other Funds
Interfund loan receivables are reported as advances and are offset equally by a
fund balance reserve which indicates that they do not constitute expendable
available financial resources and therefore are not available for appropriation.
(n) Residual Equity Transfers
Residual equity transfers represent non-routine transfers of equity between funds,
including amounts transferred to reflect the opening, closing, or reclassification of
funds. Residual equity transfers into the proprietary funds are recorded as capital
contributions.
(o) 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 operations, or cash flows in
conformity with generally accepted accounting principles. Such data is not
comparable to a consolidation since interfund eliminations have not been made.
60
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
Budgetary Data
The City follows these procedures in establishing its budgetary data:
1 . During May or June, the City Manager submits to the City Council a proposed
operating budget for the fiscal year commencing the following July 1 . The budget
includes proposed expenditures and estimated revenues on a departmental basis.
2. Public hearings are conducted at City Council meetings to obtain citizens'
comments during June.
3. Prior to July 1, the budget is enacted legally through passage of an appropriation
resolution.
The City Manager is authorized to make transfers of appropriated amounts from one
department to another within a fund. The legal level of budgetary control is at the fund
level. Revisions that alter the total appropriations of any fund must be approved by the
City Council with the exception of budget adjustments which involve offsetting revenues
and expenditures. The City Manager is authorized to increase or decrease an
appropriation for a specific purpose where the appropriation is offset by unbudgeted
revenue which is designated for said specific purpose. Quarterly budget reviews are
conducted each year and any major changes to the adopted budget are approved by the
City Council at that time. During the year, several supplementary appropriations were
necessary.
Budgets for governmental type funds are adopted on the modified accrual basis, except
that encumbrances are treated as budgeted expenditures in the year purchases are
committed.
Expenditures may not exceed budgeted appropriations at the fund level. All
appropriations lapse at fiscal year-end unless City Council takes action in the form of a
resolution to continue the appropriation into the following fiscal year.
For purposes of budgetary presentation, actual generally accepted accounting principles
(GAAP) expenditures have been adjusted to include encumbrances outstanding and
designations for continuing appropriations at year-end and to exclude any earned leave
accruals at year-end, and certain non-budgeted accruals. Annual budgets are adopted for
the General, special revenue and debt service funds except for the Hosp Grove COPs.
Accordingly, the revenues and expenditures for this fund have been excluded from the
budget basis financial statements. Annual budgets are not adopted for the capital projects
funds; therefore, budget basis financial statements have not been prepared because a
comparison of such budgetary amounts to annual revenues and expenditures is not
meaningful.
61
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(2) Budgetary Data. (Continued)
The following schedule is a reconciliation of the budgetary and GAAP fund balances:
Special Debt
General Revenue Service
Fund Funds Funds
Fund balances-budgetary basis $67,573,920 30,924,554 (11,096,588)
Encumbrances outstanding at year-end 2,051,063 4,083,737
Fund balances designated for
continuing appropriations 1,166,082 3,186,466
Earned leave at year-end (72,556) (10,069)
Non-budgeted accruals (45,000)
Non-budgeted debt service (70,086) (196,878)
Fund balances of unbudgeted funds - - 1,038.788
Fund balances-GAAP basis S70.603.423 37.987.810 (10.057.800^
(3) Cash and Investments
Each participating fund's portion of the City's cash and investment pool is displayed on
the combined balance sheet as "Cash and investments." This category also includes cash
and investments that are held separately by several of the City's funds.
Authority for Deposits and Investments:
The City's investment policy and state statutes authorize the City to invest in obligations
of the U.S. Government, its agencies and instrumentalities; commercial paper rated A-l
by Standard and Poor's Corporation or P-l by Moody's Commercial Paper record with a
maximum maturity of 180 days and not to exceed 15% of the portfolio; banker's
acceptances with a maximum maturity of 180 days and not to exceed 25% of the
portfolio; repurchase agreements with a maximum maturity of one week; certificates of
deposit with national and state licensed or chartered banks or federal or state savings and
loan associations; medium-term corporate notes with a maximum five-year maturity rated
in the top two rating categories and not to exceed 30% of the portfolio; money market
funds whose portfolios consist of one or more of the foregoing investments; a sweep
account and the State Treasurer's investment pool.
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
government securities with a market value of at least 10 percent in excess of the City's
deposit or 50 percent in excess of the deposit as collateral in mortgage pools.
62
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(3) Cash and Investments. (Continued)
Cash and investments are classified in the accompanying combined balance sheet as
follows:
Cash and investments $382,162,994
Restricted assets:
Cash and investments 1,716,656
$383.879.650
Cash and investments held by the City at June 30, 2001 consisted of the following:
Cash on hand (petty cash) $ 5,500
Deposits 5,329,840
Investments 378,544,310
Total cash and investments S383.879.65Q
Deposits:
The following summary presents the amount of the City's deposits which are fully
insured or collateralized with securities held by the City or its agent in the City's name
(Category One), those deposits which are collateralized with securities held by the
pledging financial institution's trust department or agent in the City'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
City's name (Category Three) at June 30,2001.
Category Bank Carrying
Form of Deposit 123 Balance Amount
Demand deposits $300,000 565,797 - 865,797 1,671,340
Bank investment contracts - 3,658,500 - 3,658.500 3.658.500
$300.000 4.224.297 - 4,524.297 5.329.840
63
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(3) Cash and Investments, (Continued)
Investments:
As defined in Governmental Accounting Standards Board Statement No. 3, investments
in securities are categorized in the following manner:
Category 1 - Investments that are insured or registered, which are held by the City or
its agent in the City's name.
Category 2 - Uninsured and unregistered investments, for which the securities are held
by the counterparty's trust department or agent in the City's name.
Category 3 - Uninsured and unregistered investments, for which the securities are held
by the counterparty or by its trust department or agent, but not in the City's name.
Category
Form of Investment 1 23 Carrying
Amount
United States Treasury notes $ 5,099,249 - - 5,099,249
United States Government
agency obligations 197,558,761 - - 197,558,761
Corporate notes 110.531.838 - - 110.531.838
$313.189.848 - - 313,189,848
Investments not subject to categorization:
Investment in Local Agency Investment Fund (a) 62,131,476
Investment in mutual funds 188,179
Investment contracts (b) 3.034.807
S378.544.310
(a) The City is a voluntary participant in the Local Agency Investment Fund (LAIF)
that is regulated by California Government Code Section 16429 under the
oversight of the Treasurer of the State of California. The fair value of the City's
investment in this pool is reported in the accompanying financial statements at
amounts based upon the City's pro-rata share of the fair value provided by LAIF
for the entire LATF portfolio (in relation to the amortized cost of that portfolio).
The balance available for withdrawal is based on the accounting records
maintained by LAIF, which are recorded on an amortized cost basis. Included in
LAIF's investment portfolio are collateralized mortgage obligations, mortgage-
backed securities, other asset-backed securities, loans to certain state funds, and
64
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(3) Cash and Investments, (Continued)
floating rate securities issued by federal agencies, government-sponsored
enterprises, and corporations.
(b) This is contract value. No secondary market exists for resale in order to establish
market value.
The carrying amount of all investments reflected in the above table is at fair value, except
for nonparticipating investment contracts which are carried at cost because they are not
transferable and they have terms that are not affected by changes in market interest rates.
(4) Due To and From Other Funds
The following table shows amounts due from funds within the City to other funds within
the City at June 30, 2001:
Due To Due From
Other Funds Other Funds
General $ - 60,451
Special Revenue Funds:
State Grants 47,048
Capital Projects Funds:
Federal Grants 10,778
State Grants 2.625 -
Totals S60.451 60.451
65
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(5) Advances To and From Other Funds
The following table shows amounts advanced from funds within the City
within the City at June 30, 2001:
Advances From
General Fund
General Fund
General Fund
Advances To
Capital Projects Fund:
Park Development Fund
Debt Service Funds:
Village Redevelopment Area
South Carlsbad Redevelopment Area
Enterprise Funds:
Golf Course Fund
Capital Projects Funds:
BTD#3
BTD#3
Special Revenue Fund
Gas Tax
Gas Tax
Capital Projects Fund Capital Projects Funds:
General Capital Construction Park Development NW Quadrant
Park Development SE Quadrant
BTD#2
BTD#4
BTD#5
Total advances
to other funds
Amount
$ 1,550,000
12,248,019
227,233
2,737,200
2,000,000
1,000,000
1,080,000
2,250,000
500,000
350,000
790.854
$24.733.306
(6) General Fixed Assets
A summary of changes in the general fixed assets account group is as follows:
Land
Buildings
Improvements
Furniture and equipment
Construction in progress
Total
Balance at
Julv 1. 2000
$38,014,845
47,753,464
10,463,535
11,280,361
1.505.117
Increases
3,241,867
8,573,173
158,139
2,109,791
12.895.744
Balance at
Decreases June 30. 2001
41,256,712
(50,400) 56,276,237
(807,871) 9,813,803
(1,819,831) 11,570,321
C12.283.950) 2.116.911
$109.017.322 26.978.714 fl4.962.052^ 121.033.984
66
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(6) General Fixed Assets, (Continued)
Construction in progress in the general fixed assets account group is composed of the
following:
Expended
Project Balance at
Authorization June 30. 2001 Committed
ADA Projects
Leo Carrillo Park (Phase I)
Swim Complex Chlorination Equipment
ADA - Northwest Quadrant Parks
Public Service Center
Safety Center Conference Center Improvements
Safety Center Building Improvements
Police/Fire Cad Implementation
Police Training Range Relocation
Fire Station #5 Storage Building
Chase Field Bathrooms/Snack Bar
Zone 19 Community Park
$ 263,347
4,927,094
140,000
50,000
1,463,407
ts 165,000
50,000
2,000,000
950,000
135,000
190,000
500,000
70,014
1,069,246
5,015
34,848
538,622
13,014
18,382
184,572
41,238
7,464
11,150
123.347
193,333
3,857,848
134,985
15,152
924,785
151,986
31,618
1,815,428
908,762
127,536
178,850
376.653
Totals $10.833.848 2.116.912 8.716.936
(7) Fixed Assets - Proprietary Funds
A summary of proprietary fund type fixed assets at June 30, 2001 is as follows:
Enterprise Internal Service
Land, water rights, rights-of-way
Buildings and improvements
Wells, reservoirs and dams
Transmission and distribution lines
Sewer, sewer lines and wells
Sewage treatment facility
Equipment and vehicles
Construction in progress
Less accumulated depreciation
Fixed assets, net
$ 7,212,043
7,246,703
27,707,752
48,153,591
34,301,588
34,897,995
1,679,381
16.403.009
177,602,062
(39.330.447)
$138.271.615
13,366,894
13,366,894
(6.307.475)
7.059.419
67
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(7) Fixed Assets - Proprietary Funds. (Continued)
Enterprise Fund interest is charged to expense as incurred, except for interest related to
borrowings used for construction, which is capitalized net of interest earned on
construction funds borrowed. Interest capitalization ceases when the construction project
is substantially complete and placed in service. No interest costs were capitalized in the
Enterprise Funds during the year ended June 30, 2001.
The Enterprise funds had various construction contracts in progress at June 30, 2001 with
an estimated cost to complete of approximately $36,277,000.
(8) Obligations Under Capital Leases
On November 15, 1996, the City entered into an Equipment Lease-Purchase Agreement
with Motorola, Inc. for the purchase of equipment and services necessary for the City's
participation in the San Diego County Regional Communications System. The system is
designed to replace existing conventional radio frequencies with a trunked 800 Mhz
system to develop communications capabilities to cope with potential disaster and
improve inter and intra-agency communications in the future.
The maximum amount of credit extended to the City under the terms of the agreement is
$3,235,478, with an option to increase the total by 10%. As of June 30, 2001, the City
has purchased equipment and services under the agreement totaling $1,855,714. The
payment terms are for 15 years at an interest rate of 6.91% per year. The unpaid principal
amount as of June 30, 2001 is $559,308.
The City has entered into several office equipment lease-purchase agreements with
various vendors. As of June 30, 2001, the City has purchased office equipment, totaling
$434,072. All lease terms are for 60 months, with interest rates ranging from 5.56% to
15.50%. The unpaid principal balances total $349,132 as of June 30,2001.
i
68 *
— CITY OF CARLSBAD
^ Notes to General Purpose Financial Statements
** (Continued)
WM
mm
•*• (8) Obligations Under Capital Leases, (Continued)
0am Minimum future lease payments under the capital lease as of June 30, 2001 are:
*" 2002 $ 190,581
- 2003 190,581
2004 190,581
- 2005 151,785
M 2006 85,876
Subsequent to 2006 396.325
<*•
Total minimum future lease payments 1,205,729
^ Less amounts representing stated or implicit interest (297.289)
«• Present value of future lease payments $ 908.440
mm
m (9) Obligations Under Operating Leases
m In June 1988, the Carlsbad Redevelopment Agency entered into an agreement to lease a
parking lot on State Street from a private party. The lease requires monthly rental
"* payments for twenty years.
"™ Minimum future rental payments under the operating lease as of June 30, 2001 are:
2002 $ 69,944
«* 2003 74,140
^ 2004 78,589
2005 83,304
„ 2006 88,303
Subsequent to 2006 192.818
am
Total minimum future rental payments S587.098
m In October, 1998, the City entered into an agreement to lease a 68,000 square foot office
building for the community development, administrative and public works departments.
«M The lease required monthly rental payments of $74,816 for ten years commencing
November 16, 1999. The lease provided for an option to purchase the building between
** the twelfth and twenty-fourth month of the lease at a price of $9,100,000. In January
2001, the City exercised their option to purchase the building.
69
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(10) Lone-Term Debt
The following is a summary of changes in the principal balance of long-term debt for the
year ended June 30, 2001:
Principal
Balance at
July 1. 2000
General long-term debt account group:
Bonds $14,170,000
Certificates of participation 5,570,000
HUD Section 108 Loan 619,950
Obligations under capital leases 904.183
Total general long-term debt S21.264.133
Proprietary funds:
Certificates of participation $ 4,410,000
Installment purchase agreement 9,810,000
Loan payable 1,792,43 5
Accrued assessments 951,044
Obligations under capital leases -
Total enterprise funds S16.963.479
Principal
Balance at
Additions Reductions June 30.2001
91,253
20.490
305,000
515,000
140,000
107.486
13,865,000
5,055,000
479,950
887.950
1.067.486 20.287.900
1,040,000
460,000
107,546
161,614
3,370,000
9,350,000
1,684,889
789,430
20.490
1.769.160 15.214.809
70
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
f 10) Lone-Term Debt. (Continued)
Long-term debt at June 30,2001 is comprised of the following issues:
Balance at
General Long-Term Debt June 30. 2001
1993 Carlsbad Housing and Redevelopment Commission Tax Allocation
Bonds, principal due in amounts ranging from $325,000 to $1,000,000 on
September 1 of each year through 2024. Interest payable on March 1 and
September 1 at rates varying from 5.25% to 5.30% per annum. $13,865,000
1997 Hosp Grove Refunding Certificates of Participation, principal due in
amounts ranging from $540,000 to $735,000 on August 1 of each year
through 2009, interest payable on August 1 and February 1 at rates varying
from 4.10% to 4.70% per annum. Payable from the General Fund, with a
required reserve amount of $659,500. 5,055,000
Community Development Block Grant (CDBG) program - Section 108
loan payable to HUD. Funds used to acquire property for affordable
housing project. Principal due in amounts ranging from $150,000 to
$169,950 on August 1 of each year through 2004. Interest payable on
August 1 and February 1 at rates varying from 8.22% to 8.27% per annum.
Payable from future CDBG entitlements. 479,950
Obligations under capital leases (note 8) 887,950
Total General Long-Term Debt $20.287.900
Proprietary Funds Long-Term Debt
1997 Carlsbad Municipal Water District Refunding Certificates of
Participation, principal due in varying amounts ranging from $1,075,000
to $1,175,000 on May 1 of each year through 2004, interest payable on
May 1 and November 1 each year at rates varying from 4.20% to 4.40%
per annum. The required reserve amount is $740,000. $3,370,000
Encina Financing Joint Powers Authority (EFJPA) Installment Purchase
Agreement, principal due in varying amounts ranging from $480,000 to
$905,000 on August 1 of each year through 2015, interest payable on
February 1 and August 1 each year at rates varying from 4.30% to 5.5%
per annum. The required reserve amount is $942,161. 9,350,000
71
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
Long-Term Debt. (Continued)
Balance at
June 30.2001
1993 Carlsbad Municipal Water District loan agreement with the State
Water Resources Control Board. Principal is due in varying amounts
ranging from $110,665 to $151,558 on November 30 of each year through
2013, interest payable on November 30 of each year at 2.9% per annum. 1,684,889
In December of 1994, the Golf Course Enterprise Fund purchased land
with accrued assessments. Principal is due in varying amounts ranging
from $168,405 to $196,925 in 2004-05. The 2005-06 principal amount of
$206,432 will be reduced by a reserve fund credit of $146,304 which is
already reflected on the City's books. 789,430
Obligations under capital leases (note 8) 20,490
Subtotal proprietary funds 15,214,809
Less unamortized discounts, issuance costs and deferred charges (882,085)
Less current portion (1.834.070)
Total Proprietary Funds Long-Term Debt $12.498.654
72
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(10) Long-Term Debt. (Continued)
Debt service requirements to maturity for general long-term debt are as follows:
2002
2003
2004
2005
2006
2007-2011
2012-2016
2017-2021
2022-2024
Tax
Allocation
Bonds
$ 1,046,234
1,043,777
1,045,403
1,045,977
1,040,634
5,213,113
5,191,569
5,166,898
3,081,875
Certificates
of
Participation
752,285
754,350
754,800
758,475
745,865
2,254,738
-
-
-
HUD
Section
108 Loan
183,408
180,651
176,980
-
-
-
-
-
-
Totals
1,981,927
1,978,778
1,977,183
1,804,452
1,786,499
7,467,851
5,191,569
5,166,898
3,081,875
23,875,480 6,020,513
Less amounts
representing
interest (10.010.4801 (965.513)
Total general
long-term debt S13.865.00Q 5.055.000
541,039
(61.089)
479.950
30,437,032
(11.037.082)
19.399.950
73
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(10) Long-Term Debt. (Continued)
Debt service requirements to maturity for the enterprise funds are as follows:
2002
2003
2004
2005
2006
2007-2011
2012-2015
Less amounts
representing
interest
Carlsbad Municipal
Water District
Certificates of
Participation
$1,220,010
1,219,860
1,226,700
Encina
Installment
Purchase
Agreement
942,161
936,199
936,256
939,581
936,394
4,671,045
3,720,547
Carlsbad
Municipal
Water District
Loan Payable
159,527
159,527
159,527
159,527
159,527
797,635
444,953
Golf Course
Accrued
Assessments
213,617
215,377
215,163
217,098
70,553
3,666,570 13,082,183 2,040,223
(296.570)
Total enterprise
fund debt S3.370.000
(3.732.183)
9.350.000
(355,334)
1.684.889
Totals
2,535,315
2,530,963
2,537,646
1,316,206
1,166,474
5,468,680
4.165.500
931,808 19,720,784
(142.378) (4.526.465)
15.194.319
(11) Rate Covenants
The 1997 Water Revenue Certificates of Participation requires that the District set its
charges for services each year at rates sufficient to produce net revenues (after paying the
operating and maintenance expenses of the District, excluding depreciation) at least 1.15
times the debt service for that year.
The 1997 Encina Financing Joint Powers Authority Wastewater Revenue Bonds require
that the District set its charges for services each year at rates sufficient to produce net
revenues (after paying the operating and maintenance expenses of the District, excluding
depreciation) of at least 1.25 times debt service for that year.
74
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(12) Debt Without Government Commitment
Special Assessment Bonds
As of June 30, 2001, the City has five series of Assessment District Bonds
outstanding in the amount of $42,105,538. These bonds were issued under the
provisions of the Improvement Bond Acts of 1911 and 1915 and were used to finance
public infrastructure improvement projects.
Mortgage Revenue Bonds
Multi-Family Housing Revenue Bonds are issued to provide construction and
permanent financing to developers of multi-family residential rental projects located
in the City to be partially occupied by persons of low or moderate income. The total
mortgage revenue bonds outstanding as of June 30, 2001 is $22,245,000. The bonds,
together with interest thereon, are limited obligations of the City payable solely from
bond proceeds, revenues and other amounts derived solely from home mortgage and
developer loans secured by first deed of trust, irrevocable letters of credit, and
irrevocable surety bonds.
Industrial Development Bonds
The Industrial Development Authority (Authority) of the City has issued $3,172,500
in Industrial Development Revenue Bonds. Any costs relating to the issuance of the
Bonds, as well as the principal and interest payments, are to be paid by the private
party benefiting from the bond issue.
In the opinion of City officials, these bonds are not payable from any revenues or assets
of the City, and neither the full faith and credit nor the taxing power of the City of
Carlsbad, the State of California, nor any political subdivision thereof, is obligated to the
payment of the principal or interest on the bonds. Accordingly, no liability has been
recorded in the General Long-Term Debt Account Group.
75
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(13) Fund B alances/Retained Earnings
The following is a summary of reserved and unreserved fund balances and retained
earnings as of June 30, 2001:
Governmental Fund Types
Special Debt Capital
Fund Balances General Revenue Service Projects
Reserved for:
Loans receivable $ 184,422 9,081,414
Inventory 35,585 - -
Prepaid items 17,640 206,815 - 221,133
Debt service - - 1,528,500
Advances to other funds * 8,551,606 3,000,000 - 4,970,854
Low and moderate income housing - 1,906,391
Habitat mitigation 725,423 -
Nearshore reef mitigation 180,400 - -
Encumbrances 2.051.063 4.083.737 - 11.030.818
Subtotal 11.746.139 18.278.357 1.528.500 16.222.805
Unreserved:
Designated for approved capital projects ... 85,174,830
Designated for continuing
appropriations 1,166,082 3,186,466 - 37,893,659
Undesignated 57.691.202 16.522.987 (11.586.300) 8.313.634
Subtotal 58.857.284 19.709.453 (11.586.300) 131.382.123
Total fund balances $70.603.423 37.987.810 (10.057.800) 147.604.928
* Only reflects that portion of fund balance invested in interfund advances (the General
fund amount is net of $8,210,846 in deferred revenue for measurable but unavailable
interest earned on such advances).
Proprietary Fund Types
Internal
Retained Earnings Enterprise Service
Reserved for debt service $ 1,682,161
Unreserved 90.317.147 9.297.410
Total retained earnings $91.999.308 9.297.410
76
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(13) Fund Balances/Retained Earnings. (Continued)
Reserves for loan receivables, inventory, prepaid items and advances to other funds, net
of accrued interest recorded as deferred revenue, are established to show that certain
assets are already committed to other purposes and are not available for discretionary
expenditures.
Reserves for debt service represent resources legally restricted to the payment of long-
term debt principal and interest maturing in future years.
Reserves for habitat mitigation represent resources set aside as security for the
construction of wetland habitat to ensure the mitigation of certain species required as part
of the Cannon Road West project.
Reserves for nearshore reef mitigation represent resources set aside as security for the
City's share of the potential environmental mitigation costs of the Regional Beach Sand
Project.
Reserves for encumbrances represent commitments related to unperformed contracts for
services and undelivered goods.
Unreserved-undesignated represents the fund balance or retained earnings remaining after
reduction for reserved and designated fund balances or retained earnings.
(14) Accumulated Fund D eficits
The following funds reported deficits in fund balances or retained earnings as of June 30,
2001:
Deficit Balance
Debt Service Funds:
Redevelopment Areas $(11,096,588)
Enterprise Funds:
GolfCourse (336,910)
77
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(15) Change in Accounting Principle
Effective July 1, 2000, GASB Statement No. 33 changed the manner in which capital
contributions are recorded in proprietary funds. Previously such capital contributions had
been credited directly to an equity account called contributed capital. Capital
contributions include donated capital assets and resources restricted for the acquisition,
improvement, or construction of capital assets. As a result of the implementation of
GASB Statement No. 33, capital contributions are now required to be reflected in the
statement of revenues, expenses, and changes in retained earnings. GASB Statement No.
33 requires that this accounting change be made on a prospective basis. On July 1, 2001,
the balance of the contributed capital account will be combined with retained earnings
into a single equity account called net assets in conjunction with the City's
implementation of GASB Statement No. 34.
(16) Residual Equity Transfers
Residual equity transfers are nonrecurring or non-routine transfers of equity between
funds. A summary of significant residual equity transfers at June 30, 2001 is as follows:
Debt Special Capital Internal
General Service Revenue Projects Service
The General fund transferred
a one-time lump sum to the
enterprise-Golf Course fund
for start up costs. $(600,000)
Equity for South Carlsbad
Redevelopment debt service
fund transferred to South
Carlsbad Redevelopment
capital project fund (166,845) 166,845
Excess funds transferred from
Risk Management internal
service fund to the General
fund 1,000,000 (1,000,000)
Other 15,056 (15,056)
78
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(16) Residual Equity Transfers (Continued)
Debt Special Capital Internal
General Service Revenue Projects Service
Equity for Infrastructure
Replacement special revenue
fund transferred to
Infrastructure Replacement
capital project fund (2,056,779) 2,056,779
(17) Risk Management
The City is exposed to various risks of loss related to its operations, including losses
associated with errors and omissions and injuries to employees and members of the
public. The City uses a Risk Management Self-Insurance fund, a Health Insurance fund
and a Workers' Compensation fund (all internal service funds) to account for and finance
its uninsured risks of loss. All funds of the City make payments based on estimates of the
amounts needed to pay prior and current year claims and to establish a reserve for
catastrophe losses.
Since July 1, 1999, the City has been a member of the California Municipal Excess
Liability Program, a group purchase program for general liability coverage. Under this
program, the pool provides coverage up to a maximum of $10,000,000 per occurrence
with a self-insured retention provided by the City in the amount of $500,000. At June 30,
2001, the unencumbered fund equity for the Risk Management Self-Insurance fund was
approximately $2,300,000.
Health insurance coverage for City employees is provided by either Kaiser, CalPERS,
Sharp Healthcare or the Reliastar plan. Approximately 25% of the City's employees are
covered through the Reliastar plan which is administered by CoreSource. Under the
City's agreement with Reliastar, Reliastar will provide coverage for each
individual claim over $75,000. If aggregate claims for the City for any two month
period exceed 125% of the actual claims, Reliastar will assume payment for the excess
amount.
The City is insured for workers' compensation claims by Employers Reinsurance
Corporation (Corporation). The Corporation provides coverage for losses which exceed
the City's self-insured retention of $300,000 per claim.
79
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(17) Risk Management. (Continued)
The estimated claims payable reported at June 30, 2001 is based on the requirements of
Governmental Accounting Standards Board Statement No. 10, which requires that a
liability for claims be reported if information prior to the issuance of the financial
statements indicates that it is probable that a liability has been incurred at the date of the
financial statements and the amount of the loss can be reasonably estimated.Changes hi
the estimated claims payable amounts in fiscal years 2000 and 2001 for the three internal
service funds are as follows:
Claims
Expense and
Beginning Changes in Claim
Balance Estimates Payments
Ending
Balance
Health Insurance fund:
1999-2000
2000-2001
Risk Management fund:
1999-2000
2000-2001
Workers' Compensation fund:
1999-2000
2000-2001
$342,356 1,599,063 (1,557,020) 384,399
384,399 1,127,242 (1,238,724) 272,917
137,232
623,586
833,745
834,734
531,672
188,083
594,164
784,479
(45,318)
(171,668)
(593,175)
(649,738)
623,586
640,001
834,734
969,475
(18) Joint Ventures
Encina Water Pollution Control Facility:
The Encina Water Pollution Control Facility (the Facility) is a sewer facility owned
jointly by the Cities of Carlsbad and Vista, the Leucadia County Water District, the
Buena Vista Sanitation District, the Vallecitos Water District (formerly the San Marcos
County Water District) and the Encinitas Sanitary District. The Encina Wastewater
Authority (EWA) is a joint powers authority established to operate and administer the
facility. It is responsible for the management, maintenance and operations of the joint
system. Ownership interests in the facility are determined by joint agreement at the time
80
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(18) Joint Ventures. (Continued)
the assets are acquired. As of June 30, 2000, the Cities and Districts have the following
approximate ownership interest:
City of Carlsbad 27%
City of Vista 28%
Leucadia County Water District 17%
Vallecitos Water District 17%
Buena Vista Sanitation District 7%
Encinitas Sanitary District 4%
EWA's financial statements for the fiscal year ending June 30, 2000 (the latest available)
reflect the early implementation of GASB 34 and reflect the following:
Total assets $49,884,859
Total liabilities 2.124.453
Net assets $47.760.406
The EWA does not recognize net income or loss. Net operating expenditures in excess of
users' assessments are treated as accounts receivable on the EWA's books and charged to
users' accounts in the following year. Conversely, users' assessments in excess of net
operating expenditures are treated as a liability and credited against users' accounts, also
in the following year. Under this basis, net operating revenues for the EWA totaled
$72,472 in fiscal year 2001. The financial statements of the EWA can be obtained at
6200 Avenida Encinas, Carlsbad, California 92009.
Encina Financing Joint Powers Authority:
The Encina Financing Joint Powers Authority (the Authority) was created on February 1,
1989 between the City of Carlsbad (Carlsbad), the City of Vista (Vista), the Buena Vista
Sanitation District (Buena) and the Leucadia County Water District (Leucadia). The
primary purpose of the Authority is to issue revenue bonds in order to finance the
expansion of the Facility.
The Authority is governed by a Board of Directors, which consists of one director
appointed by each member. The financial statements of the Authority can be obtained at
the City of Carlsbad's City Hall.
In August 1989, the Authority issued $33,500,000 of revenue bonds and executed
installment purchase agreements for approximately the same amount. In February 1997,
bonds were issued by the Authority to refinance and defease the outstanding bonds. Two
of the members (Buena and Vista) defeased their 1989 obligations through available
funds; while Carlsbad and Leucadia refinanced their obligations. Repayment of the
81
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(18) Joint Ventures. (Continued)
bonds will be accomplished through payments made by Carlsbad and Leucadia pursuant
to the new installment purchase agreements. The individual agreements set forth the
purchase price and specify the debt service requirements for each member.
The following is a table of the outstanding balance owed as of June 30, 2001 by each
member.
Installment
Member Agreement Balance
City of Carlsbad $ 9,350,000
Leucadia County Water District 6,3 75,000
City of Vista
Buena Vista Sanitation District -
S15.725.00Q
The installment balances are secured by a pledge of the revenues from each member's
wastewater system, net of a deduction for maintenance and operating costs. Significant
covenants within the agreements require the members to maintain insurance on the
facility, and establish wastewater rates which are sufficient to pay the operating costs and
debt service on the bonds and which will result in net revenues equal to at least 1.25
times the annual installment payments due.
The City's share in the accounts of the Authority is recorded in the Sewer Enterprise
Fund. The expansion of the Facility is shown as a fixed asset of the Sewer Enterprise
Fund.
(19) Participation in San Diego Association of Governments (S ANDAG)
The City is a member of the San Diego Association of Governments (SANDAG), a joint
powers agreement for the purpose of engaging in regional cooperative comprehensive
planning, to assist the Member Agencies, and to provide a regional reviewing
organization for certain federal and state grant projects.
SANDAG is currently comprised of 18 incorporated Cities from the San Diego region
and the County of San Diego.
82
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
T20) Retirement Plan
Plan Description
The City of Carlsbad contributes to the California Public Employees Retirement System
(PERS), an agent multiple-employer public employee defined benefit pension plan.
PERS provides retirement and disability benefits, annual cost-of-living adjustments, and
death benefits to plan members and beneficiaries. PERS acts as a common investment
and administrative agent for participating public entities within the State of California.
Benefit provisions and all other requirements are established by state statutes and city
ordinance. Copies of PERS' annual financial report may be obtained from their executive
office: Lincoln Plaza, 400 P Street, Sacramento, California 95814.
Funding Policy
Participants are required to contribute 7% (9% for safety employees) of their annual
covered salary. The City makes the contributions required of City employees on their
behalf and for their account. The amount paid by the City on behalf of employees for the
year ended June 30, 2001 was $2,402,368. The City is required to contribute at an
actuarially determined rate. For the year ended June 30, 2001, the employer contribution
rate for the City of Carlsbad (as a percentage of covered payroll) was 3.266% for safety
employees and 0.0% for miscellaneous employees. The contribution requirements of
plan members and the City are established by PERS.
Annual Pension Cost
For 2001, the City's annual pension cost (employer contribution) of $370,444 for safety
and $5,607 for miscellaneous to PERS was equal to the City's required and actual
contributions. For 2001, the member contributions paid by the City were $1,013,068 for
safety and $1,389,300 for miscellaneous. The required contribution was determined as
part of the June 30, 1998, actuarial valuation using the entry age normal actuarial cost
method. The actuarial assumptions included (a) 8.25% investment rate of return (net of
administrative expenses), (b) projected annual salary increases of 3.75%, and (c) 2% per
year cost-of-living adjustments. Both (a) and (b) included an inflation component of
3.5%. The actuarial value of PERS assets was determined using techniques that smooth
the effects of short-term volatility in the market value of investments over a four-year
period (smoothed market value). PERS unfunded actuarial accrued liability is being
amortized as a level percentage of projected payroll on a closed basis. The remaining
amortization period for miscellaneous employees at June 30, 2001 is through June 30,
2019; for safety employees at June 30,2001, it is through June 30,2013.
83
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(20)Retirement Plan. (Continued)
Three-Year Trend Information for PERS (Safety)
Fiscal Year
Ending
6/30/99
6/30/00
6/30/01
Annual Pension
Cost (Employer
Contribution)
$ 774,465
525,164
370,444
Percentage of
APC Contributed
100%
100%
100%
Net Pension
Obligation
$ 0
0
0
Three-Year Trend Information for PERS (Miscellaneous)
Fiscal Year
Ending
6/30/99
6/30/00
6/30/01
Annual Pension
Cost (Employer
Contribution)
$1,510,047
437,978
5,607
Percentage of
APC Contributed
100%
100%
100%
Required Supplementary Information
Funded Status of Plan (Safety)
Net Pension
Obligation
$ 0
0
0
Valuation Date
6/30/97
6/30/98
6/30/99
Entry Age
Normal
Accrued
Liability
$45,646,733
53,527,398
59,160,306
Actuarial
Value
of Assets
53,055,298
63,822,496
73,078,737
Unfunded
Liability/
(Excess Assets')
(7,408,565)
(10,295,098)
(13,918,431)
Funded
Status
116.2%
119.2%
123.5%
Annual
Covered
Payroll
8,438,265
9,021,054
9,784,191
UAAL
As a % of
Payroll
(87.797%)
(114.123%)
(142.254%)
84
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(20) Retirement Plan. (Continued)
Funded Status of Plan (Miscellaneous)
Valuation Date
6/30/97
6/30/98
6/30/99
Entry Age
Normal
Accrued
Liability
$51,842,297
56,210,285
62,314,238
Actuarial
Value
of Assets
60,367,455
72,756,235
84,329,881
Unfunded
Liability/
(Excess Assets)
(8,525,158)
(16,545,950)
(22,015,643)
Funded Status
116.4%
129.4%
135.3%
Annual
Covered
Payroll
14,995,218
15,687,958
16,405,530
UAAL
As a % of
Payroll
(56.853%)
(105.469%)
(134.196%)
(21) Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with
Internal Revenue Code Section 457. The plan, available to substantially all full-time
employees, permits them to defer a portion of their salary until future years. Amounts
deferred may not exceed the lesser of $8,500 or 25% of a participant's "includable
compensation," as defined in the participation agreement. Distributions are made upon
the occurrence of the participant's termination, retirement, death or unforeseen
emergency, and in a manner in accordance with the election made by the participant.
The City 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. As of January 1, 1999,
the City has formally established a trust in accordance with Internal Revenue Code
Section 457(g) for all of its deferred compensation plans to provide protection from the
claims of the employer's general creditors.
(22) Post-Retirement Health Care
In addition to the pension benefits described herein, per Resolution 614, all former
employees of the Carlsbad Municipal Water District (including dependents) are eligible
for post-retirement health care benefits if they voluntarily retire 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. Currently, thirteen retirees meet these eligibility requirements and are receiving
benefits.
85
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(22) Post-Retirement Health Care
The City pays for 100% of the premiums for health insurance which is 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
$53,300 were charged to expense for post-retirement health care costs during 2000-2001.
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.
1m
If
M
]
86
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(23) Segment Information for Enterprise Funds
The City maintains four enterprise funds that provide water, sewer and other services.
Segment information for the year ended June 30, 2001 is as follows:
Operating revenues
Operating expenses:
Depreciation
Plant operations
Operating income (loss)
Nonoperating activities:
Property taxes
Capital contributions
Other, net
Net income (loss)
Contributed capital:
Beginning balance
Current year additions
Current year deletions
Ending balance
Fixed assets:
Additions
Deletions
Net working capital
Long-term liabilities
Total assets
Total liabilities
$
$
$
$
$
$
1
Carlsbad
Municipal
Water
District
17,838,830
1,471,885
16.199,156
167,789
1,370,736
4,799,726
3,621,929
9.960.180
66,928,612
66.928.612
2,955,083
fl 11.8431
46.031.581
3.744.745
$121,801,773
8.442,230
Golf
Course
-
146,442
(146,442)
600,000
221,362
674.920
7,465,190
7.465.190
805,291
1.885.790
3.358.225
10,667,452
3.539.172
Sewer
6,530,618
1,440,380
3.562,505
1,527,733
4,703,535
3,768,970
10.000.238
62,956,520
62.956.520
4,571,607
(5.5941
54.574.094
9.259.743
118,144,304
12.747.390
Solid
Waste
507,218
490
259.430
247,298
277,798
525.096
3,421
3.421
(2.45 n
3.468.314
3,700,598
232,284
Totals
24,876,666
2,912,755
20,167,533
1,796,378
1,370,736
10,103,261
7,890,059
21.160.434
137,353,743
137.353.743
8,331,981
(119.8881
105.959.779
16.362.713
254,314,127
24.961,076
Total equity SI 13.359.543 7.128.280 105.396.914 3.468.314 229.353.051
87
CITY OF CARLSBAD
Notes to General Purpose Financial Statements
(Continued)
(24) Commitments and Contingencies
The City is a defendant in certain legal actions arising in the normal course of operations.
In the opinion of management and legal counsel, any liability resulting from these actions
will not result in a material adverse effect on the City's financial position, because the
City has set aside sufficient monies to cover confirmed adverse actions.
88
T3-o
GENERAL FUND
The General fund is used to account for resources traditionally associated with government
which are not required legally or by sound financial management to be accounted for in another
fund.
Major Service Areas
Public Safety
Community
Development
Administrative
Services Community
Services
Policy/Leadership
Group
89
CITY OF CARLSBAD
General Fund
Schedule of Revenues - Budget and Actual
Budgetary Basis
Year Ended June 30, 2001
Taxes:
Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Business license permits
Real property transfer taxes
Total taxes
Intergovernmental:
Vehicle licence fees
Homeowners exemptions
Other
Total intergovernmental
Licenses and permits:
Building permits
Other
Total licenses and permits
Charges for services:
Planning fees
Building department fees
Engineering fees
Ambulance fees
Recreation fees
Other
Total charges for services
Fines and forfeitures
Income from property and investments
Interdepartmental charges
Miscellaneous
Total revenues
Budget
$ 20,291,000
21,130,000
9,500,000
3,820,000
2,200,000
1,100,000
58,041,000
4,200,000
297,000
912,000
5,409,000
2,200,000
1,300,000
3,500,000
750,000
1,500,000
750,000
1,160,000
1,051,000
599,000
5,810,000
797,000
3,725,000
2,100,000
949,640
Actual on
Budgetary
Basis
19,657,514
21,196,726
9,269,484
3,915,976
2,300,367
1,095,037
57,435,104
4,318,128
316,194
910,526
5,544,848
2,102,477
1,306,679
3,409,156
820,456
1,420,181
664,384
1,443,594
1,132,460
689,623
6,170,698
763,681
4,816,922
2,147,717
1,312,367
Variance-
Over
(Under)
(633,486)
66,726
(230,516)
95,976
100,367
(4,963)
(605,896)
118,128
19,194
(1,474)
135,848
(97,523)
6,679
(90,844)
70,456
(79,819)
(85,616)
283,594
81,460
90,623
360,698
(33,319)
1,091,922
47,717
362,727
$ 80,331,640 81,600,493 1,268,853
90
CITY OF CARLSBAD
General Fund
Schedule of Expenditures - Budget and Actual
Budgetary Basis
Year Ended June 30, 2001
General government:
Policy and leadership group:
City council
City manager
City clerk
City attorney
City treasurer
Total policy and leadership group
Administrative services:
Administration
Finance
Purchasing
Human resources
Records management
Total administrative services
Non-departmental
Total general government
Public safety:
Police protection
Fire protection
Total public safety
Community development:
Administration
Hiring center
Geographic information systems
Economic development
Community promotion
Planning
Building inspection
Total community development
Community services:
Library
Cultural arts
Park planning/recreation
Senior programs
Total community services
Public works:
Administration
Engineering
Park maintenance
Street and signal maintenance
Facilities maintenance
Traffic sign maintenance
Total public works
Total expenditures
Budget
254,360
1,396,914
155,526
798,688
147,548
2,753,036
626,408
1,643,143
574,031
1,739,977
1,517,361
6,100,920
3,363,820
12,217,776
14,346,143
9,790,811
24,136,954
605,032
85,849
336,645
248,301
496,176
2,881,137
1,852,543
6,505,683
6,616,355
697,443
3,807,199
456,410
11,577,407
557,013
4,914,250
2,771,803
2,274,006
2,189,126
820,248
13,526,446
$ 67,964,266
Actual on
Budgetary
Basis
233,258
1,298,679
110,029
798,688
114,451
2,555,105
507,865
1,510,744
504,796
1,303,527
1,414,024
5,240,956
667,214
8,463,275
14,045,053
9,762,701
23,807,754
519,614
82,584
316,928
178,650
494,258
2,497,037
1,757,923
5,846,994
6,615,264
684,740
3,524,595
375,290
11,199,889
523,154
4,707,124
2,718,684
2,233,787
2,135,479
796,977
13,115,205
62,433,117
Variance
Over
(Under)
(21,102)
(98,235)
(45,497)
(33,097)
(197,931)
(118,543)
(132,399)
(69,235)
(436,450)
(103,337)
(859,964)
(2,696,606)
(3,754,501)
(301,090)
(28,110)
(329,200)
(85,418)
(3,265)
(19,717)
(69,651)
(1,918)
(384,100)
(94,620)
(658,689)
(1,091)
(12,703)
(282,604)
(81,120)
(377,518)
(33,859)
(207,126)
(53,119)
(40,219)
(53,647)
(23,271)
(411,241)
(5,531,149)
91
CITY OF CARLSBAD
General Fund
Comparative Schedule of Revenues
For the Years Ended June 30, 2000 and 2001
2000 2001 Increase
Actual Actual (Decrease)
Taxes:
Property taxes 16,762,040 19,657,514 2,895,474
Sales and use taxes 19,493,247 21,196,726 1,703,479
Transient occupancy taxes 8,333,196 9,269,484 936,288
Franchise taxes 2,591,779 3,915,976 1,324,197
Business license permits 1,863,514 2,300,367 436,853
Real property transfer taxes 993,026 1,095,037 102,011
Total taxes 50,036,802 57,435,104 7,398,302
Intergovernmental:
Vehicle licence fees 3,793,919 4,318,128 524,209
Homeowners exemptions 288,358 316,194 27,836
Other 821,247 910,526 89,279
Total intergovernmental 4,903,524 5,544,848 641,324
Licenses and permits:
Building permits 2,156,584 2,102,477 (54,107)
Other 1,164,267 1,306,679 142,412
Total licenses and permits 3,320,851 3,409,156 88,305
Charges for services:
Planning fees 563,372 820,456 257,084
Building department fees 1,421,681 1,420,181 (1,500)
Engineering fees 1,114,900 664,384 (450,516)
Ambulance fees 931,045 1,443,594 512,549
Recreation fees 888,477 1,132,460 243,983
Other 579,302 689,623 110,321
Total charges for services 5,498,777 6,170,698 671,921
Fines and forfeitures 770,949 763,681 (7,268)
Income from property and investments 2,226,973 4,816,922 2,589,949
Interdepartmental charges 2,006,923 2,147,717 140,794
Miscellaneous 597,693 1,312,367 714,674
Total revenues 69,362,492 81,600,493 12,238,001
92
CITY OF CARLSBAD
General Fund
Comparative Schedule of Expenditures
For the Years Ended June 30, 2000 and 2001
General government:
Policy and leadership group:
City council
City manager
City clerk
City attorney
City treasurer
Total policy and leadership group
Administrative services:
Administration
Finance
Purchasing
Human resources
Records management
Total administrative services
Non-departmental
Total general government
Public safety:
Police protection
Fire protection
Total public safety
Community development:
Administration
Hiring center
Geographic information systems
Economic development
Community promotion
Planning
Building inspection
Total community development
Community services:
Library
Cultural arts
Park planning/recreation
Senior programs
Total community services
Public works:
Administration
Engineering
Park maintenance
Street and signal maintenance
Facilities maintenance
Traffic sign maintenance
Total public works
Debt service
Total expenditures
2000
Actual
229,049
916,869
201,092
704,593
114,715
2,166,318
263,342
1,299,324
429,997
1,080,223
682,170
3,755,056
383,935
6,305,309
12,876,386
8,559,413
21,435,799
457,029
76,673
316,162
161,251
369,972
2,265,048
1,724,911
5,371,046
4,167,707
495,054
3,130,177
339,062
8,132,000
612,698
4,516,502
2,356,210
2,010,961
1,655,619
425,493
11,577,483
11,038
52,832,675
2001
Actual
233,983
1,187,743
98,558
775,468
114,675
2,410,427
491,642
1,385,831
504,140
1,077,449
1,261,230
4,720,292
641,336
7,772,055
13,841,268
9,523,499
23,364,767
465,517
82,584
262,475
133,875
370,299
2,240,252
1,738,257
5,293,259
6,266,110
645,656
3,400,017
366,497
10,678,280
488,410
4,327,022
2,559,298
2,040,001
2,066,872
743,564
12,225,167
70,086
59,403,614
Increase
(Decrease)
4,934
270,874
(102,534)
70,875
(40)
244,109
228,300
86,507
74,143
(2,774)
579,060
965,236
257,401
1,466,746
964,882
964,086
1,928,968
8,488
5,911
(53,687)
(27,376)
327
(24,796)
13,346
(77,787)
2,098,403
150,602
269,840
27,435
2,546,280
(124,288)
(189,480)
203,088
29,040
411,253
318,071
647,684
59,048
6,570,939
93
SPECIAL REVENUE FUNDS
Special Revenue funds are used to account for specific revenues whose expenditures are
restricted by law or administrative regulation to specified purposes.
Affordable Housing
To account for receipt of fees charged to developers to provide funding assistance for affordable
housing needs of lower and moderate income households.
Community Development Block Grant
To account for federal block grants and commercial and residential loans for community
development.
Donations and Bequests
To account for donations, scholarships, bequests and endowments received from both outside
parties and the General fund, designated for specific City purposes.
Federal Grants
To account for federal grants received to support the City's law enforcement and fire mitigation
programs.
Gas Tax
To account for receipts and expenditures of money apportioned under the Streets and Highways
Code of the State of California.
Infrastructure Replacement
To account for funds set aside for the future repair and replacement of the City's base
infrastructure.
Low and Moderate Income Housing
To account for money administered by the Carlsbad Redevelopment Agency for designated low
and moderate income housing.
Other Funds
To account for any other funds received by the City whose expenditures are restricted by law or
administrative regulation to specified purposes.
94
SPECIAL REVENUE FUNDS (CONTINUED)
Police Asset Forfeiture
To account for money received under federal and state programs distributing property
confiscated from illegal activities.
Section 8 Housing Authority
To account for federal grants for low and moderate income rental assistance payments.
Senior Nutrition
To account for money received and expenditures for senior programs under the Older Americans
Act.
Special Benefit Districts
To account for revenues and expenditures from property tax assessments for street lighting,
landscaping and channel dredging.
State Grants
To account for State of California library, civic arts and law enforcement grants.
Tyler Court Apartments
To account for revenues and expenditures from housing assistance through the Tyler Court
affordable senior apartments.
Community
Development
95
Assets
Cash and investments
Receivables:
Loans
Taxes
Accrued interest
Accounts, net
Due from other governments
Advances to other funds
Prepaid items
Total assets
Liabilities and Fund Balances
Liabilities:
Accrued liabilities
Due to other funds
Deposits payable
Due to other governments
Deferred revenue
Total liabilities
Fund balances:
Reserved for:
Loans receivable
Advances to other funds
Prepaid items
Low and moderate income
housing
Encumbrances
Unreserved:
Designated for continuing
appropriations
Undesignated
Total fund balances
Total liabilities and fund
balances
CITY OF CARLSBAD
Special Revenue Funds
Combining Balance Sheet
June 30, 2001
Community
Affordable Development Donations
Housing Block Grant and Bequests
Federal
Grants
638
$ 11,940,680
$ 15,148
38,548
425
40,506
4,222
14,145 543
Gas
Tax
5,281,580 7,623 7,541,842 138,032 7,084,215
6,658,462 5,568
3,000,000
52,164 7,541,842 138,032 10,084,215
4,039
15,148
6,658,462
638
1,906,391
24,490
3,335,551
11,925,532
$ 11,940,680
44,728 14,145
5,568
425
363,320 39,710
113,897
(361,877) 7,374,090
7,436 7,527,697
52,164 7,541,842
543 4,039
3,000,000
302 3,465,823
137,187 2,728,085
886,268
137,489 10,080,176
138,032 10,084,215
96
Low and
Moderate
Income
Housing
692,571
2,417,384
6,397
131
-
-
-
553
3,117,036
2,929
-
-
-
-
2,929
2,417,384
-
553
_
152
_
696,018
Police Section 8 Special Tyler
Other Asset Housing Senior Benefit State Court
Funds Forfeiture Authority Nutrition Districts Grants Apartments
386,659 518,119 253,435 285 3,136,270 806,897 232,298
-
._
3,029 - 26,604
198,502 16,185 . - 2,100
,
205,199 -
386,659 518,119 660,165 16,470 3,162,874 808,997 232,298
26,278 14,479 133,322 25,270
47,048
71,357 - - - 20,022
-
252,433 ....
350,068 14,479 133,322 72,318 20,022
.
205,199 . ...
- - -
140,715 1,042 7,864 1,991 16,269 22,059
16,155 97,560 - - - 93,582
229,789 419,517 97,034 - 3,013,283 621,038 212,276
Totals
26,079,826
9,081,414
6,397
131
29,633
255,335
3,000,000
206,815
38,659,551
276,659
47,048
91,379
4,222
252,433
671,741
9,081,414
3,000,000
206,815
1,906,391
4,083,737
3,186,466
16,522,987
3,114,107 386,659 518,119 310,097 1,991 3,029,552 736,679 212,276 37,987,810
3,117,036 386,659 518,119 660,165 16,470 3,162,874 808,997 232,298 38,659,551
97
CITY OF CARLSBAD
Special Revenue Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Year Ended June 30, 2001
Revenues:
Taxes
Intergovernmental
Fines and forfeitures
Income from property and
investments
Contributions from property
owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
Public safety
Community development
Community services
Public works
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess(deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Proceeds of debt
Total other financing
sources (uses)
Excess (deficiency) of
revenues and other
financing sources over
(under) expenditures
and other financing uses
Fund balances at beginning
of year
Residual equity transfers out
Fund balances at end of year
Community
Affordable Development Donations Federal Gas
Housing Block Grant and Bequests Grants Tax
$ - - - - 1,516,381
452,891 - 185,519
524,320 67,315 634,824 8,028 540,422
1,856,956 - ...
209,939
2,000 - 63,390 - 2,184
Infrastructure
Replacement
-
-
-
2,383,276 520,206 908,153 193,547 2,058,987
79,651
175,419 338,086
279,133
250,940
468 140,416
464 45,690
-
-
176,351 524,192 279,133 79,651 250,940
2,206,925 (3,986) 629,020 113,896 1,808,047
17,430
(4,312) (22,083) (7,500)
3,546 3,152 - -
3,546 3,152 (4,312) (4,653) (7,500)
2,210,471 (834) 624,708 109,243 1,800,547
9,715,061 8,270 6,902,989 28,246 8,279,629
.
2,056,779
(2,056,779)
$ 11,925,532 7,436 7,527,697 137,489 10,080,176
98
Low and
Moderate
Income
Housing
393,824
130,464
524,288
70,985
416
2,612
74,013
450,275
3,152
3,152
453,427
2,660,680
3,114,107
Police Section 8
Other Asset Housing Senior
Funds Forfeiture Authority Nutrition
3,243,738 110,715
124,927
33,976 40,704 6,670
102,037
33,976 165,631 3,250,408 212,752
36,497
3,180,586
33,938 - - 210,761
2,599
2,104
33,938 36,497 3,185,289 210,761
38 129,134 65,119 1,991
(17,430)
19,700
(17,430) 19,700
38 111,704 84,819 1,991
401,677 406,415 225,278
(15,056)
386,659 518,119 310,097 1,991
Special
Benefit
Districts
265,051
1,520,091
332,773
2,117,915
1,925,989
1,598
511
1,928,098
189,817
-
189,817
2,839,735
3,029,552
Tyler
State Court
Grants Apartments
735,846
45,519 357,446
7,119 5,520
788,484 362,966
146,269
293,582
369,137
515,406 293,582
273,078 69,384
(2,322)
(2,322)
270,756 69,384
465,923 142,892
736,679 212,276
Totals
1,910,205
4,728,709
124,927
2,654,739
3,377,047
311,976
412,986
13,520,589
262,417
4,058,658
892,969
2,176,929
145,497
51,381
7,587,851
5,932,738
17,430
(53,647)
29,550
(6,667)
5,926,071
34,133,574
(2,071,835)
37,987,810
99
CITY OF CARLSBAD
Special Revenue Funds
Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis)
Year Ended June 30, 2001
Revenues:
Taxes
Intergovernmental
Charges for services
Fines and forfeitures
Income from property and
investments
Contributions from property
owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Affordable Housing Trust Community Development Block Grant
Budget
287,483
287,483
Actual on
Budgetary
Basis
Variance-
Over
(Under)Budget
199,637
199,637
1,212,517 2,183,639
717,504
(87,846) 1,202,730
(87,846) 1,202,730
Actual on
Budgetary
Basis
452,891
Variance-
Over
(Under)
(264,613)
250,000
1,250,000
-
1,500,000
524,320
1,856,956
2,000
2,383,276
274,320
606,956
2,000
883,276 717,504
67,315
-
-
520,206
67,315
-
-
(197,298)
701,695 (501,035)
701,695 (501,035)
971,122 (485,226) (181,489) 303,737
100
Donations and Bequests Federal Grants
Revenues:
Taxes
Intergovernmental
Charges for services
Fines and forfeitures
Income from property and
investments
Contributions from property
owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Budget
84,000
287,924
371,924
454,031
Actual on
Budgetary
Basis
Variance-
Over
(Under)
Actual on
Budgetary
Budget Basis
634,824
209,939
63,390
908,153
432,740
550,824
156,872
12,113
(82,107) 475,413
(77,985)
63,390
536,229
(21,291)
(21,291)
557,520
168,985
210,455
7,394
217,849
(48,864)
185,519
8,028
193,547
217,140
454,031 432,740
217,140
(23,593)
Variance-
Over
(Under)
28,647
(4,085)
24,562
6,685
(7,394)
(709)
25,271
(Continued)
101
CITY OF CARLSBAD
Special Revenue Funds
Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis)
Year Ended June 30, 2001
Gas Tax
Budget
Actual on
Budgetary
Basis
Variance-
Over
(Under)
Revenues:
Taxes
Intergovernmental
Fines and forfeitures
Income from property and
investments
Contributions from property
owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
6,444,848
6,444,848
$ (6,444,848)
1,516,381
540,422
2,184
2,058,987
6,444,848
6,444,848
(4,385,861)
1,516,381
540,422
2,184
2,058,987
Low and Moderate Income Housing
Actual on Variance-
Budgetary Over
Budget Basis (Under)
2,058,987
342,500
25,000
500
368,000
122,050
122,050
245,950
393,824
130,464
524,288
71,137
71,137
51,324
105,464
(500)
156,288
(50,913)
(50,913)
453,151 207,201
102
Other Funds Police Asset Forfeiture
Revenues:
Taxes
Intergovernmental
Fines and forfeitures
Income from property and
investments
Contributions from property
owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Budget
192,809
192,809
Actual on
Budgetary
Basis
33,976
33,976
190,808
190,808
(192,809) (156,832)
Variance-
Over
(Under)
33,976
33,976
(2,001)
Budget
15,000
20,000
35,000
135,100
(2,001) 135,100
35,977 (100,100)
Actual on
Budgetary
Basis
124,927
40,704
165,631
135,099
135,099
30,532
Variance-
Over
(Under)
109,927
20,704
130,631
(1)
(1)
130,632
(Continued)
103
CITY OF CARLSBAD
Special Revenue Funds
Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis)
Year Ended June 3 0,2001
Revenues:
Taxes
Intergovernmental
Fines and forfeitures
Income from property and
investments
Contributions from property
owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Section 8 Housing Senior Nutrition
Actual on
Budgetary
Budget Basis
3,035,900
10,000
3,243,738
6,670
3,045,900 3,250,408
3,412,060 3,188,437
3,412,060 3,188,437
(366,160)61,971
Variance-
Over
(Under)
207,838
(3,330)
204,508
(223,623)
(223,623)
428,131
Actual on
Budgetary
Budget Basis
110,000
105,000
215,000
212,752
212,752
2,248
110,715
102,037
212,752
>12,360
212,360
392
Variance-
Over
(Under)
715
(2,963)
(2,248)
(392)
(392)
(1,856)
104
Special Benefits Districts State Grants
Revenues:
Taxes
I ntergovernmental
Fines and forfeitures
Income from property and
investments
Contributions from property
owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Budget
Actual on
Budgetary
Basis
Variance-
Over
(Under)Budget
345,961
Actual on
Budgetary
Basis
735,846
Variance-
Over
(Under)
389,885
151,500
1,494,729
425,399
2,071,628
_
2,274,465
2,274,465
265,051
1,520,091
332,773
2,117,915
_
1,938,835
1,938,835
113,551
25,362
(92,626)
46,287
-
(335,630)
(335,630)
24,483
-
.
370,444
233,803
502,678
-
736,481
45,519
-
7,119
788,484
140,011
484,778
-
624,789
21,036
-
7,119
418,040
(93,792)
(17,900)
-
(111,692)
(202,837)179,080 381,917 (366,037)163,695 529,732
(Continued)
105
CITY OF CARLSBAD
Special Revenue Funds
Combining Schedule of Revenues and Expenditures - Budget and Actual (Budgetary Basis)
Year Ended June 30, 2001
Tyler Court Apartments
Budget
Actual on
Budgetary
Basis
Variance-
Over
(Under)
Revenues:
Taxes
Intergovernmental
Fines and forfeitures
Income from property and
investments
Contributions from property
owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
Public safety
Community development
Community services
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
346,670
2,883
349,553
308,796
308,796
357,446
5,520
362,966
293,582
293,582
10,776
2,637
13,413
(15,214)
(15,214)
Totals
Budget
342,500
4,366,237
15,000
923,766
2,744,729
392,924
428,782
9,213,938
579,358
5,333,119
1,369,664
8,719,313
16,001,454
Actual on
Budgetary
Basis
1,910,205
4,728,709
124,927
2,654,739
3,377,047
311,976
412,986
13,520,589
492,250
4,454,488
1,320,686
8,383,683
14,651,107
Variance-
Over
(Under)
1,567,705
362,472
109,927
1,730,973
632,318
(80,948)
(15,796)
4,306,651
(87,108)
(878,631)
(48,978)
(335,630)
(1,350,347)
40,757 69,384 28,627 (6,787,516)(1,130,518)5,656,998
106
107
108
DEBT SERVICE FUNDS
Debt Service funds are used to account for accumulation of resources for, and payment of,
principal and interest on the City's general bonded debt and special assessment bonds for which
the City is obligated in some manner.
Hosp Grove COPs
To account for payment of debt service on the 1997 Certificates of Participation (1988
Refunding) issued to purchase Hosp Grove.
Redevelopment Bonds
To account for payment of debt service on bonds issued to finance improvements for the
Carlsbad Redevelopment Agency.
Housing and
Redevelopment
Bonds
109
CITY OF CARLSBAD
Debt Service Funds
Combining Balance Sheet
June 30, 2001
Assets
Cash and investments
Receivables:
Taxes
Accrued interest
Total assets
Liabilities
Advances from other funds
Total liabilities
Fund Balances
Hosp Grove Redevelopment
COPs Areas
$1,023,288
15,500
$1,038,788
1,352,552
25,586
526
1,378,664
Totals
2,375,840
25,586
16,026
2,417,452
12,475,252 12,475,252
12,475,252 12,475,252
Reserved for debt service
Unreserved:
Designated for future debt service
Undesignated
Total fund balances
Total liabilities and fund balances
659,500
379,288
1,038,788
$1,038,788
869,000 1,528,500
379,288
(11,965,588) (11,965,588)
1,378,664
(11,096,588) (10,057,800)
2,417,452
110
CITY OF CARLSBAD
Debt Service Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Year Ended June 30, 2001
Hosp Grove Redevelopment
COPs Areas Totals
Revenues:
Taxes
Income from property and
investments
Total revenues
Expenditures:
Current:
General government
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over
(under) expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Total other financing sources (uses)
Excess (deficiency) of revenues and
other financing sources over (under)
expenditures and other financing uses
Fund balances at beginning of year
Residual equity transfers in (out)
Fund balances at end of year
$
44,801
44,801
515,000
235,890
750,890
(706,089)
800,000
800,000
93,911
944,877
-
1,575,295
95,641
1,670,936
36,531
305,000
1,471,151
1,812,682
(141,746)
(280,000)
(280,000)
(421,746)
(10,507,997)
(166,845)
1,575,295
140,442
1,715,737
36,531
820,000
1,707,041
2,563,572
(847,835)
800,000
(280,000)
520,000
(327,835)
(9,563,120)
(166,845)
$ 1,038,788 (11,096,588) (10,057,800)
111
CITY OF CARLSBAD
Debt Service Fund
Redevelopment Areas
Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Year Ended June 30, 2001
Revenues:
Taxes
Income from property and
investments
Total revenues
Expenditures:
Current:
General government
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Budget
$ 1,370,000
40,000
1,410,000
Actual on
Budgetary
Basis
1,575,295
95,641
1,670,936
Variance-
Over
(Under)
205,295
55,641
260,936
67,938
290,000
1,478,954
1,836,892
$ (426,892)
36,531
305,000
1,471,151
1,812,682
(31,407)
15,000
(7,803)
(24,210)
(141,746)285,146
112
113
CAPITAL PROJECTS FUNDS
Capital Projects funds are used to account for the purchase or construction of major capital
facilities which are not financed by Proprietary or Trust funds.
Assessment Districts
To account for capital projects financed by the issuance of assessment district bonds.
Bridge and Thoroughfare Districts
To account for receipts of fees charged to developers for street and highway construction.
Community Facilities District No. 1
To account for civic facilities, freeway interchanges, and road segments financed by Community
Facilities District No. 1 "special tax revenues" (Mello Roos).
Federal Grants
To account for capital projects financed by federal grants.
General Capital Construction
To account for transfers from the General fund for various capital projects and to account for
funds set aside for the future repair and replacement of the City's base infrastructure.
Other Funds
To account for any other funds used by the City for the purchase or construction of major capital
facilities.
Park Development
To account for receipts of fees charged to developers for park acquisition and development.
Planned Local Drainage Areas
To account for receipts of fees charged to developers for drainage facilities necessitated by
growth.
114
CAPITAL PROJECTS FUNDS (CONTINUED)
Public Facilities Construction
To account for receipts of fees charged to developers for specific public facilities such as
libraries and fire stations necessitated by growth.
Rancho Santa Fe Road Project
To account for amounts paid by developers for Rancho Santa Fe Road construction and
improvements.
Redevelopment Agency
To account for financial resources segregated for the rehabilitation of commercial and public
property and capital projects in the Carlsbad Village area.
Sales Tax/TransNet
To account for receipts of County sales tax allocated by the San Diego County Regional
Transportation Commission to finance transportation projects.
State Grants
To account for capital projects financed by state grants.
Traffic Impact Projects
To account for receipts of fees charged to developers for street construction and improvement.
Civic and
Maintenance Projects
Water, Sewer and
Drainage Projects
Street, Interchange
and Traffic Signal
Projects
115
CITY OF CARLSBAD
Capital Projects Funds
Combining Balance Sheet
June 30,2001
Bridge and Community General
Assessment Thoroughfare Facilities Federal Capital Other Park
Districts Districts District No. 1 Grants Construction Funds Development
$ 1,346,673 6,763,211 42,541,507 - 14,491,371 1,676,343
8,856
68,334 - - - -
6,247 - - - -
11,059
200,725
4,970,854
$ 1,352,920 6,831,545 42,550,363 11,059 19,662,950 1,676,343
$ - 26,602 92,597 281 46,154
10,778
4,640,854 - -
63,250
4,667,456 92,597 11,059 109,404
200,725
4,970,854
902,092 1,170,566 8,688 519,246
458,290 1,261,997 1,279,683 - 6,046,033 1,056,945
894,630 - 40,007,517 - - 113,764
(8,688) 7,816,688 505,634
1,352,920 2,164,089 42,457,766 - 19,553,546 1,676,343
8,536,124
_
550
-
-_
-
8,536,674
56,338
-
4,880,000
_
4,936,338
-
1,205
3,599,131
.
-
3,600,336
Assets
Cash and investments
Receivables:
Taxes
Accounts, net
Accrued interest
Due from other governments
Prepaid items
Advances to other funds
Total assets
Liabilities and Fund Balances
Liabilities:
Accrued liabilities
Due to other funds
Advances from other funds
Deposits payable
Deferred revenue
Total liabilities
Fund balances:
Reserved for:
Prepaid items
Advances to other funds
Encumbrances
Unreserved:
Designated for continuing
appropriations
Designated for approved
capital projects
Undesignated
Total liabilities and
fund balances $ 1,352.920 6,831,545 42,550,363 11,059 19,662,950 1,676,343 8,536,674
116
Planned
Local Public
Drainage Facilities
Facilities Construction
7,194,507 31,466,375
248,957
7,443,464 31,466,375
337,420
240,685
240,685 337,420
804,892 217,056
1,549,370 10,230,064
4,848,517 20,681,835
7,202,779 31,128,955
Rancho
Santa Fe Traffic
Road Redevelopment Sales Tax/ State Impact
Project Agency TransNet Grants Projects
17,799,167 1,387,648 11,943,075 874,973 5,289,900
66,981
12,626
1,365,037
20,408
17,799,167 1,487,663 11,943,075 2,240,010 5,289,900
60,206 29,460 186,218 70 4,042
2,625
9,000
60,206 38,460 186,218 2,695 4,042
20,408
749,367 70,771 6,477,820 2,172 106,943
5,826,866 696,709 2,342,393 150,832 3,395,346
11,162,728 661,315 2,936,644 2,084,311 1,783,569
17,738,961 1,449,203 11,756,857 2,237,315 5,285,858
Totals
151,310,874
8,856
384,822
18,873
1,376,096
221,133
4,970,854
158,291,508
839,388
13,403
9,520,854
9,000
303,935
10,686,580
221,133
4,970,854
11,030,818
37,893,659
85,174,830
8,313,634
147,604,928
7,443,464 31,466,375 17,799,167 1,487,663 11,943,075 2,240,010 5,289,900 158,291,508
117
CITY OF CARLSBAD
Capital Projects Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Year Ended June 30, 2001
Revenues:
Taxes
Intergovernmental
Charges for services
Income from property and
investments
Contributions from property
owners
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency)
of revenues over
(under) expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Proceeds of debt
Total other financing
sources(uses)
Excess (deficiency) of
revenues and other
financing sources over
(under) expenditures
and other financing us
Fund balances at beginning
of year
Residual equity transfers in
Residual equity transfers out
Fund balances at end of year
Bridge and
Assessment Thoroughfare
Districts Districts
$
-
99,664 611,074
556,140
233,994
99,664 1,401,208
425,430
9,809 2,020,820
_
-
435,239 2,020,820
(335,575) (619,612)
409,146
-
409,146
(335,575) (210,466)
1,688,495 2,374,555
-
S 1,352,920 2,164,089
Community
Facilities Federal
District No. 1 Grants
8,887,552
17,009
3,280,154
953,451
225,279
13,346,436 17,009
119,835
2,859,652 17,009
_
-
2,979,487 17,009
10,366,949
85.200
-
85,200
10,452,149
32,005,617
-
42.457,766
General
Capital
Construction
197,294
-
1,199,502
_
20,000
1,416,796
21,400
1,528,451
36,030
9.999
1,595,880
(179,084)
7,500,000
(216,194)
7,283,806
7,104,722
10,392,045
2,056,779
19,553,546
Other Park
Funds Development
730,808
111,734 695,199
134,880 811,790
1,669
979,091 1,506,989
418,586
_
-
418,586
979,091 1,088.403
(200,000)
(200,000)
779,091 1,088,403
897,252 2,511,933
-
1,676,343 3.600.336
118
Planned Rancho
Local Public Santa Fe Traffic
Drainage Facilities Road Redevelopment Sales Tax/ State Impact
Facilities Construction Project Agency TransNet Grants Projects
139,674 2.299
1,200,000 2,064,303
256,609
613,999 2,990,960 1,526,677 94,809 999,368 45,374 504,001
204,568 8,209,737 151,517 - - - 1,583,398
13.186 - - 40,457
818,567 11,200,697 1,817,868 366,903 2,199,368 2,109,677 2.127,856
143,428 50,891 - 429,731 - - 22,917
511,653 11,422,602 946,720 53,166 996,044 80,028 1,202,191
1,299
1,757
655,081 11,473,493 946,720 485,953 996.044 80,028 1,225,108
163,486 (272,796) 871.148 (119,050) 1,203,324 2,029,649 902,748
280,000 200.000
(85,200)
9.850
289,850 200,000 (85,200)
163,486 (272,796) 871,148 170,800 1,403,324 1,944,449 902,748
7,039,293 31,401,751 16,867,813 1,111,558 10,353,533 292,866 4,383,110
166,845
Totals
9,226.819
4,012,120
256,609
12,772,515
12,605,481
534,585
39,408,129
1,213,632
22,066,731
37,329
11.756
23,329.448
16,078,681
8,474,346
(501.394)
9.850
7,982.802
24,061,483
121,319,821
2,223,624
7.202,779 31,128,955 17,738,961 1,449,203 11,756,857 2,237,315 5,285.858 147,604.928
119
120
ENTERPRISE FUNDS
Enterprise funds are used to account for operations that are financed and operated in a manner
similar to private business enterprises - where the intent of the governing body is that the costs of
providing goods or services to the general public be financed or recovered primarily through user
charges.
Carlsbad Municipal Water District
To account for the operation, maintenance, planning, capital facility financing, and all customer
service functions of the Carlsbad water system.
Golf Course
To account for revenues, expenses, and the construction activities of the City's proposed
municipal golf course.
Sewer
To account for the operation, maintenance, and capital facility financing of the City's sewer
system.
Solid Waste
To account for revenues and expenses of the City's solid waste source-reduction and recycling
programs.
Carlsbad Municipal
Water District
121
CITY OF CARLSBAD
Enterprise Funds
Combining Balance Sheet
June 30, 2001
Assets:
Current assets:
Cash and investments
Receivables:
Taxes
Accounts, net
Prepaid items
Inventory
Total current assets
Restricted assets:
Cash and investments
Accrued interest
Total restricted assets
Fixed assets
Less accumulated depreciation
Fixed assets, net
Total assets
Liabilities and Fund Equity
Current liabilities:
Accrued liabilities
Due to other governments
Current portion of long-term debt
Deposits payable
Total current liabilities
Current liabilities payable from
restricted assets - accrued interest
payable
Advances from other funds
Deferred revenue
Loan payable
Certificates of participation, net of
unamortized issuance costs and
deferred charges of $124,479
Installment purchase agreement, net of
deferred charges of $757,606
Accrued assessments
Total liabilities
Fund equity:
Contributed capital
Retained earnings:
Reserved for debt service
Unreserved
Total retained earnings
Total fund equity
Total liabilities and fund equity
Carlsbad
Municipal
Water District
$ 47,929,075
21,112
2,462,130
4,550
259,528
50,676,395
762,292
6,832
769,124
89,669,751
(19,313,497)
70,356,254
$ 121,801,773
$ 2,758,985
575,280
1,185,665
124,884
4,644,814
52,671
-
-
1,574,224
2,170,521
_
-
8,442,230
66,928,612
740,000
45,690,931
46,430,931
113,359,543
$ 121,801,773
Golf
Course
2,055,433
_
-
-
-
2,055,433
-
.
8,612,019
8,612,019
10,667,452
1,238
-
168,405
169,643
11,304
2,737,200
-
-
-
_
621,025
3,539,172
7,465,190
.
(336,910)
(336,910)
7,128,280
10,667,452
Sewer
57,011,836
_
847,231
-
5,806
57,864,873
954,364
21,725
976,089
79,320,292
(20,016,950)
59,303,342
118,144,304
1,414,339
-
480,000
1,396,440
3,290,779
196,868
-
1,147,349
-
-
8,112,394
-
12,747,390
62,956,520
942,161
41,498,233
42,440,394
105,396,914
118,144,304
Solid
Waste
3,390,019
38,834
271,745
-
-
3,700,598
-
-
-
-
3,700,598
232,284
-
-
232,284
-
-
-
-
_
-
232,284
3,421
.
3,464,893
3,464,893
3,468,314
3,700,598
Totals
110,386,363
59,946
3,581,106
4,550
265,334
114,297,299
1,716,656
28,557
1,745,213
177,602,062
(39,330,447)
138,271,615
254,314,127
4,406,846
575,280
1,834,070
1,521,324
8,337,520
260,843
2,737,200
1,147,349
1,574,224
2,170,521
8,112,394
621,025
24,961,076
137,353,743
1,682,161
90,317,147
91,999,308
229,353,051
254,314,127
122
CITY OF CARLSBAD
Enterprise Funds
Combining Statement of Revenues, Expenses and Changes in Retained Earnings
Year Ended June 30, 2001
Operating revenues:
Water sales
Sewer services charges
Other charges for services
Contributions from other
government agencies
Miscellaneous
Total operating revenues
Operating expenses:
Sewer plant operations
Purchased water
Depreciation
General and administrative
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Income from property and investments
Interest expense and fees
Gain (loss) on sale of property
Property taxes
Amortization of issuance costs
Total nonoperating revenues (expenses)
Income before capital contributions
Capital contributions
Net income (loss)
Retained earnings (deficit) at beginning
of year
Retained earnings (deficit) at end of year
Carlsbad
Municipal Golf
Water District Course
$ 16,474,378
-
772,028
452,098
225,030
17,923,534
10,587,342
1,471,885
5,696,518 146,442
17,755,745 146,442
167,789 (146,442)
3,978,186 219,250
(301,235) 2,112
(43,713)
1,370,736
(11,309)
4,992,665 221,362
5,160,454 74,920
4,799,726 600,000
9,960,180 674,920
36,470,751 (1,011,830)
Sewer
5,654,116
107,557
-
1,005,909
6,767,582
2,153,572
-
1,440,380
1,645,897
5,239,849
1,527,733
4,322,413
(552,435)
(1,008)
-
-
3,768,970
5,296,703
4,703,535
10,000,238
32,440,156
Solid Waste
-
482,750
24,276
192
507,218
-
490
259,430
259,920
247,298
278,533
-
(735)
-
-
277,798
525,096
_
525,096
2,939,797
Totals
16,474,378
5,654,116
1,362,335
476,374
1,231,131
25,198,334
2,153,572
10,587,342
2,912,755
7,748,287
23,401,956
1,796,378
8,798,382
(851,558)
(45,456)
1,370,736
(11,309)
9,260,795
11,057,173
10,103,261
21,160,434
70,838,874
46,430,931 (336,910) 42,440,394 3,464,893 91,999,308
123
CITY OF CARLSBAD
Enterprise Funds
Combining Statement of Cash Flows
Year Ended June 30, 2001
Cash flows from operating activities:
Operating income (loss)
Adjustments to reconcile operating income
(loss) to net cash provided by operating activities:
Depreciation and amortization
(Increase) decrease in receivables
(Increase) decrease in inventory
(Increase) decrease in prepaid items
Increase (decrease) in accrued liabilities
Increase (decrease) in due to other governments
Increase (decrease) in deposits payable
Increase (decrease) in deferred revenue
Increase (decrease) in loans payable
Net cash provided by (used for) operating
activities
Cash flows from noncapital financing activities:
Cash received from other funds
Net cash provided by (used for) noncapital
financing activities
Cash flows from capital and related financing
activities:
Purchases of fixed assets
Principal payment on bonds
Interest and other fees paid
Property taxes received
Capital contributions received
Net cash provided by (used for)
capital and related financing activities
Cash flows from investing activities:
Interest on investments
Net cash provided by (used for) 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
Carlsbad
Municipal
Water District
$ 167,789
1,471,885
527,452
9,807
(200)
(303,705)
(357,776)
(143,079)
(107,546)
1,264,627
(2,101,620)
(1,040,000)
(440,576)
1,370,736
4,058,106
1,846,646
3,978,186
3,978,186
7,089,459
40,861,908
$ 47,951,367
Golf Course
(146,442)
(9,849)
(156,291)
600,000
600,000
(805,291)
(161,614)
(2,112)
(969,017)
221,362
221,362
(303,946)
2,359,379
2,055,433
Sewer Solid Waste
1,527,733 247,298
1,440,380 490
(79,619) (18,658)
2,200
279,668 20,533
(356,611)
170,345
(387,153)
2,596,943 249,663
(3,753,919)
(460,000)
(492,328)
3,891,441
(814,806)
4,322,413 278,533
4,322,413 278,533
6,104,550 528,196
50,907,943 2,861,823
57,012,493 3,390,019
Totals
1,796,378
2,912,755
429,175
12,007
(200)
(13,353)
(714,387)
27,266
(387,153)
(107,546)
3,954,942
600,000
600,000
(6,660,830)
(1,661,614)
(935,016)
1,370,736
7,949,547
62,823
8,800,494
8,800,494
13,418,259
96,991,053
110,409,312
124
CITY OF CARLSBAD
Enterprise Funds
Combining Statement of Cash Flows
(Continued)
Carlsbad
Municipal
Water District Golf Course
Reconciliation of cash and cash equivalents to amounts
reported on the balance sheet:
Reported on the balance sheet:
Cash and investments
Restricted assets:
Cash and investments
Less investments not meeting the definition of cash
equivalents:
Investment contracts
Cash and cash equivalents at end of year
Sewer Solid Waste Totals
47,929,075
762,292
(740,000)
2,055,433 57,011,836 3,390,019 110,386,363
954,364 - 1,716,656
(953,707)(1,693,707)
47,951,367 2,055,433 57,012,493 3,390,019 110,409,312
Supplemental schedule of noncash investing,
capital and financing activities:
Capital assets contributed by (to) other funds $ 741,620 812,094 1,553,714
125
126
INTERNAL SERVICE FUNDS
Internal Service funds are used to account for the financing of goods or services provided by one
department or agency of a government to other departments or agencies on a cost reimbursement
basis.
Fleet Management
To account for charges to other funds to provide fleet maintenance and accumulate funds for fleet
replacement.
Health Insurance
To account for charges to other funds and from employees to provide health insurance for full-
time City employees.
Information Technology
To account for charges to other funds for information technology services.
Risk Management
To account for charges to other funds to insure for liability claims against the City.
Workers' Compensation
To account for charges to other funds to insure against Workers' Compensation claims.
Information
Technology Workers'
Compensation
127
CITY OF CARLSBAD
Internal Service Funds
Combining Balance Sheet
June 30, 2001
Fleet Health Information Risk Workers'
Management Insurance Technology Management Compensation Totals
Assets
Current assets:
Cash and investments
Receivables:
Accounts, net
Inventory
Prepaid items
Total current assets
Fixed assets:
Equipment and vehicles
Less accumulated
depreciation
Fixed assets, net
Total assets
Liabilities and Fund Equity
Current liabilities:
Accounts payable
Accrued wages payable
Accrued vacation payable
Capital lease payable
Estimated claims payable
Total current liabilities
Fund equity:
Contributed capital
Retained earnings:
Unreserved
Total fund equity
Total liabilities and
fund equity
$ 5,798,940
11,864
108,000
5,918,804
10,697,892
(5,146,225)
5,551,667
$ 11,470,471
$ 363,682
11,968
16,138
9,876
401,664
3,552,623
7,516,184
11,068,807
346,522 2,332,588
1,317
50,290
398,129 2,332,588
2,666,518
(1,160,298)
1,506,220
398,129 3,838,808
50,091
36,791
55,627
10,614
272,917
272,917 153,123
2,598,257
125,212 1,087,428
125,212 3,685,685
2,733,905
256,468
2,990,373
2,484
(952)
1,532
2,991,905
1,723
7,320
16,928
640,001
665,972
1,911,939
413,994
2,325,933
1,883,161 13,095,116
269,649
108,000
50,290
1,883,161 13,523,055
13,366,894
(6,307,475)
7,059,419
1,883,161 20,582,474
376 415,872
6,118 62,197
88,693
20,490
969,475 1,882,393
975,969 2,469,645
752,600 8,815,419
154,592 9,297,410
907,192 18,112,829
$11,470,471 398,129 3,838,808 2,991,905 1,883,161 20,582,474
128
CITY OF CARLSBAD
Internal Service Funds
Combining Statement of Revenues, Expenses and Changes in Retained Earnings
Year Ended June 30, 2001
Fleet Health Information Risk Workers'
Management Insurance Technology Management Compensation Totals
Operating revenues:
Other charges for services
Miscellaneous
Total operating revenues
Operating expenses:
Depreciation
Fuel and supplies
Claims expense
General and administrative
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Income from property and investments
Gain (loss) on disposition of assets
Total nonoperating revenues
(expenses)
Income (loss) before capital
contributions and transfers
Operating transfers in
Operating transfers out
Capital contributions
Total Contributions and transfers
Net income (loss)
Retained earnings (deficit) at beginning
of year
Residual equity transfer out
Retained earnings (deficit)
at end of year
$ 2,858,915
2,858,915
1,020,498
511,070
1,079,558
2,611,126
247,789
470,343
79,812
550,155
797,944
47,400
254,305
301,705
1,099,649
6,416,535
$ 7,516,184
2,228,481
337,171
2,565,652
2,343,085
2,343,085
222,567
30,287
30,287
252,854
74,000
74,000
326,854
(201,642)
125,212
3,205,000
2,128
3,207,128
490,464
14,896
2,432,163
2,937,523
269,605
158,325
158,325
427,930
(15,000)
36,190
21,190
449,120
638,308
1,087,428
727,473
265,640
993,113
497
557,418
234,198
792,113
201,000
238,821
238,821
439,821
_
439,821
974,173
(1,000,000)
413,994
536,980
53,929
590,909
816,834
135,452
952,286
(361,377)
166,302
166,302
(195,075)
_
(195,075)
349,667
154,592
9,556,849
658,868
10,215,717
1,511,459
525,966
3,717,337
3,881,371
9,636,133
579,584
1,064,078
79,812
1,143,890
1,723,474
121,400
(15,000)
290,495
396,895
2,120,369
8,177,041
(1,000,000)
9,297,410
129
CITY OF CARLSBAD
Internal Service Funds
Combining Statement of Cash Flows
Year Ended June 30, 2001
Cash flows from operating activities:
Operating income (loss)
Adjustments to reconcile operating
income (loss) to net cash provided
by operating activities:
Depreciation and amortization
(Increase) decrease in receivables
(Increase) decrease in inventory
(increase) decrease in prepaid items
Increase (decrease) in accrued liabilities
Increase (decrease) in estimated
claims payable
Increase (decrease) in deferred revenues
Net cash provided by (used for)
operating activities
Cash flows from noncapital
financing activities:
Cash received from other funds
Cash paid to other funds
Net cash provided by (used for)
noncapital financing activities
Cash flows from capital and related
financing activities:
Purchases of fixed assets
Net cash provided by (used for)
capita! and related financing activitic
Cash flows from investing activities:
Interest on investments
Net cash provided by (used for)
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,
capital and financing activities:
Capital assets contributed by (to)
other funds
Fleet
Management
$ 247,789
1,020,498
1,828
(10,925)
103,409
1,362,599
47,400
47,400
(1,550,039)
(1,550,039)
470,343
470,343
330,303
5,468,637
$ 5,798,940
$ 254,305
Health
Insurance
222,567
9,933
(24,725)
(39,337)
(111,482)
(14,167)
42,789
74,000
74,000
30,287
30,287
147,076
199,446
346,522
Information
Technology
269,605
490,464
100
9,715
44,342
814,226
(15,000)
(15,000)
(131,609)
(131,609)
158,325
158.325
825,942
1,506,646
2,332,588
36,190
Risk Workers'
Management Compensation
201,000 (361,377)
497
(256,468)
(8,551) 282
16,415 134,741
(175)
(47,282) (226,354)
(1,000,000)
(1,000,000)
238,821 166,302
238,821 166,302
(808,461) (60,052)
3,542,366 1,943,213
2,733,905 1,883,161
Totals
579,584
1,511,459
(244,607)
(10,925)
(15,010)
100,145
39,674
(14,342)
1,945,978
121,400
(1,015,000)
(893,600)
(1,681,648)
(1,681,648)
1,064,078
1,064,078
434,808
12,660,308
13,095,116
290,495
130
131
132
AGENCY FUNDS
Agency funds are used to account for assets held by a government for other funds, governments
or individuals.
Contractors' and Miscellaneous Deposits
To account for money deposited by contractors for designated future development and other
miscellaneous deposits.
Assessment Districts
To account for the debt service transaction on assessment district bonds for which the City is not
obligated.
133
CITY OF CARLSBAD
Agency Funds
Combining Statement of Changes in Assets and Liabilities
Year Ended June 30, 2001
Balance at
June 30, 2000 Additions Reductions
Balance at
June 30, 2001
Contractors' and Miscellaneous Deposits:
Assets:
Cash and investments
Accounts receivable
Total assets
Liabilities:
Accrued interest payable
Deposits payable
Total liabilities
Assessment Districts:
Assets:
Cash and investments
Taxes receivable
Accrued interest
Total assets
Liabilities:
Due to bondholders
Totals - All Asencv Funds:
Assets:
Cash and investments
Accounts receivable
Taxes receivable
Accrued interest
Total assets
Liabilities:
Accrued interest payable
Due to bondholders
Deposits payable
$ 8,574,896
16,202
$ 8,591,098
$ 1,707,618
6,883,480
S 8,591,098
$ 7,804,501
102,297
95,052
$ 8,001,850
$ 8,001,850
$ 16,379,397
16,202
102,297
95,052
$ 16,592,948
$ 1,707,618
8,001,850
6,883,480
16,888,367
14,822
16,903,189
665,904
23,830,428
24,496,332
5,320,615
20,283
93,522
5,434,420
5,225,956
22,208,982
14,822
20,283
93,522
22,337,609
665,904
5,225,956
23,830,428
(17,946,268)
(30,538)
(17,976,806)
(473,466)
(25,096,483)
(25,569,949)
(4,662,695)
(102,297)
(95,052)
(4,860,044)
(4,651,580)
(22,608,963)
(30,538)
(102,297)
(95,052)
(22,836,850)
(473,466)
(4,651,580)
(25,096,483)
7,516,995
486
7,517,481
1,900,056
5,617,425
7,517,481
8,462,421
20,283
93,522
8,576,226
8,576,226
15,979,416
486
20,283
93,522
16,093,707
1,900,056
8,576,226
5,617,425
Total liabilities $ 16,592,948 29,722,288 (30,221,529)16,093,707
134
135
136
GENERAL FIXED ASSETS ACCOUNT GROUP
General fixed assets are those fixed assets used in operations accounted for in governmental
funds. General fixed assets include all fixed assets not accounted for in an enterprise, internal
service, or trust and agency fund.
Construction in
Progress
Furniture and
Equipment
137
CITY OF CARLSBAD
General Fixed Assets Account Group
Schedule of General Fixed Assets by Function
June 30, 2001
Land
Buildings
Improvements
Furniture and equipment
Construction in progress
Totals
General Culture and Public Public
Government Recreation Safety Works Totals
$ 7,685,134 30,680,408 2,150,407 740,763 41,256,712
17,221,712 25,057,915 13,996,610 - 56,276,237
915,669 8,029,849 526,276 342,009 9,813,803
2,467,306 3,848,019 3,550,465 1,704,531 11,570,321
- 1.313.620 264.670 538.621 2.116.911
$28.289.821 68.929.811 20.488.428 3.325.924 121.033.984
138
CITY OF CARLSBAD
General Fixed Assets Account Group
Schedule of Changes in General Fixed Assets by Function
Year Ended June 30, 2001
General government
Culture and recreation
Public safety
Public works
Totals
General Fixed
Assets at
July 1.2000
$ 17,754,676
67,826,597
20,471,585
2.964.464
$109.017.322
Increases
21,361,436
4,556,894
483,804
576.580
26.978.714
Decreases
(10,826,291)
(3,453,680)
(466,961)
(215.120)
(14.962.052)
General Fixed
Assets at
June 30. 2001
28,289,821
68,929,811
20,488,428
3.325.924
121.033.984
139
CITY OF CARLSBAD
General Fixed Assets Account Group
Schedule of General Fixed Assets by Source
June 30, 2001
As of June 30, 1986 $27,136,537
Net additions subsequent to June 30, 1986:
General Fund 21,124,977
Community development block grants 2,912,726
Federal grants 709,124
State grants 855,967
Street lighting 327,151
Park development 21,164,964
Public facilities 38,028,463
Redevelopment 8.774.075
Total investments in general fixed assets $121.033.984
140
ANNUAL DEBT SERVICE REQUIREMENTS
The following schedules present principal and interest debt service requirements for the City's
debt.
ousing and
Redevelopment
Bonds
HUD Section
108 Loan
Encina Joint Powers
Authority Purchase
Agreement
Water Distnct
COPs
State Loan for
Reclaimed Water Golf Course Accrued
Assessment
141
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements
$15.495.000 - 1993 CARLSBAD HOUSING AND
Fiscal
Year
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
Totals
REDEVELOPMENT COMMISSION TAX ALLOCATION BONDS
Interest Due
September 1
364,883
356,351
347,426
337,976
328,001
317,633
306,607
295,058
282,851
269,989
256,470
242,295
227,332
211,583
195,045
177,589
159,214
139,920
119,576
98,182
75,525
51,675
26.500
Interest Due
March 1
356,351
347,426
337,977
328,001
317,633
306,607
295,058
282,851
269,989
256,470
242,295
227,332
211,583
195,045
177,589
159,213
139,920
119,576
98,183
75,525
51,675
26,500
-
Total
Interest
721,234
703,777
685,403
665,977
645,634
624,240
601,665
577,909
552,840
526,459
498,765
469,627
438,915
406,628
372,634
336,802
299,134
259,496
217,759
173,707
127,200
78,175
26,500
Principal Due
September 1
325,000
340,000
360,000
380,000
395,000
420,000
440,000
465,000
490,000
515,000
540,000
570,000
600,000
630,000
665,000
700,000
735,000
775,000
815,000
855,000
900,000
950,000
1,000,000
Total Annual
Debt Service
1,046,234
1,043,777
1,045,403
1,045,977
1,040,634
1,044,240
1,041,665
1,042,909
1,042,840
1,041,459
1,038,765
1,039,627
1,038,915
1,036,628
1,037,634
1,036,802
1,034,134
1,034,496
1,032,759
1,028,707
1,027,200
1,028,175
1.026.500
S5.187.681 10.010.480 13.865.000
142
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements, (Continued)
$6.595.000 - 1997 HOSP GROVE CERTIFICATES OF PARTICIPATION
Fiscal
Year
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Totals
(1988 Refunding)
Interest Due
August 1
111,678
100,608
88,743
76,058
62,418
48,448
33,373
17,273
Interest Due
February 1
100,607
88,742
76,057
62,417
48,447
33,372
17,272
-
Total
Interest
212,285
189,350
164,800
138,475
110,865
81,820
50,645
17.273
Principal Due
August 1
540,000
565,000
590,000
620,000
635,000
670,000
700,000
735,000
Total Annual
Debt Service
752,285
754,350
754,800
758,475
745,865
751,820
750,645
752,273
5.055.000 6.020.513
$1.199.950 - HUD SECTION 108 LOAN
Fiscal
Year
2001-02
2002-03
2003-04
Totals
Interest Due
August 1
19,787
13,621
7,030
Interest Due
February 1
13,621
7,030
Total
Interest
33,408
20,651
7,030
Principal Due
August 1
150,000
160,000
169,950
Total Annual
Debt Service
183,408
180,651
176,980
143
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements, (Continued)
$7.400.000 - 1997 CARLSBAD MUNICIPAL WATER DISTRICT
Fiscal
Year
2001-02
2002-03
2003-04
Totals
CERTIFICATES
Interest Due
November 1
72,505
49,930
25,850
OF PARTICIPATION (1988 Refunding Proiect)
Interest Due
Mavl
72,505
49,930
25,850
Total
Interest
145,010
99,860
51,700
Principal Due
May 1
1,075,000
1,120,000
1,175.000
Total Annual
Debt Service
1,220,010
1,219,860
1,226,700
$148.285 3.666.570
$11.080.000 - ENCINA FINANCING JOINT POWERS AUTHORITY
Fiscal
Year
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
Totals
INSTALLMENT PURCHASE AGREEMENT
Interest Due
August 1
236,241
225,921
215,278
200,978
188,603
172,791
156,153
139,353
122,816
105,191
86,228
66,241
45,228
23.190
Interest Due
February 1
225,920
215,278
200,978
188,603
172,791
156,153
139,353
122,816
105,191
86,228
66,241
45,228
23,191
-
Total
Interest
462,161
441,199
416,256
389,581
361,394
328,944
295,506
262,169
228,007
191,419
152,469
111,469
68,419
23,190
Principal Due
August 1
480,000
495,000
520,000
550,000
575,000
605,000
640,000
675,000
705,000
740,000
780,000
820,000
860,000
905,000
Total Annual
Debt Service
942,161
936,199
936,256
939,581
936,394
933,944
935,506
937,169
933,007
931,419
932,469
931,469
928,419
928,190
3.732.183 13.082.183
144
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements, (Continued)
$2,331.489 - CARLSBAD MUNICIPAL WATER DISTRICT
Fiscal
Year
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
Totals
STATE LOAN FOR
Interest Due
November 30
48,862
45,653
42,350
38,952
35,455
31,857
28,155
24,345
20,425
16,391
12,240
7,969
2,680
RECLAIMED WATER PROJECTS
Principal Due
November 30
110,665
113,874
117,177
120,575
124,072
127,670
131,372
135,182
139,102
143,136
147,287
151,558
123.219
1.684.889
Total Annual
Debt Service
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
159,527
125.899
2.040.223
$2.618.908 GOLF COURSE ACCRUED ASSESSMENT
Fiscal
Year
2001-02
2002-03
2003-04
2004-05
2005-06
Totals
Interest
45,212
37.465
29.103
20,173
10.425
Principal
168,405
177,912
186,060
196,925
60.128
2&M3Q
Total Annual
Debt Service
213,617
215,377
215,163
217,098
70.553
145
146
O
6
147
CITY OF CARLSBAD
General Expenditures by Function
Last Ten Fiscal Years
Fiscal
Year m
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1 998-99
1999-00
2000-01
Total"'
$53,985,119
55,104,390
62,668,276
60,280,103
59,802,924
65,943,032
80,045,280
112,156,205
105,655,384
92,884,485
General
Govt.
$5,884,582
6,080,919
5,513,101
5,871,248
5,850,829
6,961,469
6,909,151
6,784,525
7,382,909
9,022,218
Public
Safely
$15,989,114
15,734,643
16,351,652
15,915,678
16,850,087
17,410,033
18,631,042
21,927,751
21,799,386
23,627,184
Comm.
Devel.
$5,934,690
5,886,636
6,255,252
6,465,977
7,363,194
7,431,539
7,894,536
8,636,634
11,538,444
9,351,917
Comm.
Services
$7,473,689
7,176,621
7,548,100
7,459,685
7,590,363
8,390,009
6,672,810
7,541,378
9,088,264
11,571,249
Public
Works
$9,088,351
8,376,678
8,847,328
8,111,572
8,956,757
8,816,767
11,437,101
12,689,683
13,822,429
14,402,096
Capital
Projects
$ 5,639,898
7,192,002
12,933,253
12,159,653
9,654,082
13,556,164
23,693,412
52,106,587
39,543,074
22,066,731
Debt
Service
$3,974,795
4,656,891
5,219,590
4,296,290
3,537,612
3,377,051
4,807,228
2,469,647
2,480,878
2,843,090
'"Includes General, Special Revenue, Debt Service and Capital Projects Funds.
(2)Beginning in fiscal year 1997-98, Park Maintenance expenditures are included in Public Works instead of
Community Services.
GENERAL EXPENDITURES BY FUNCTION
2000-01
Capital Projects
24%
Public Works
15%
Debt Service
2%
Community
Services
12%
General
Government
10%
Public Safety
26%
Community
Development
10%
Source: City of Carlsbad Comprehensive Annual Financial Reports
148
TOTAL EXPENDITURES
LAST TEN YEARS
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Fiscal Year
SPENDING ON CAPITAL PROJECTS
LAST TEN YEARS
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Fiscal Year
149
CITY OF CARLSBAD
General Revenues by Source
Last Ten Fiscal Years
Fiscal
Year
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
Total'"
S 58,440,436
58,115,465
62,239,740
69,768,517
74,611,395
98,645,130
122,653,159
145,393,991
115,252,270
136,244,948
Property
Taxes
$15,132,124
15,332,036
13,920,220
13,537,893
13,576,407
14,516,474
15,226,827
17,121,586
19,916,613
23,143,014
Sales
Taxes
$8,723,382
9,167,849
10,840,115
11,399,568
11,542,970
12,495,143
14,817,057
17,129,474
19,493,247
21,196,726
Transient
Occupancy
Taxes
$3,077,595
3,098,793
3,153,084
3,252,270
3,406,917
3,675,472
6,046,092
7,010,249
8,333,196
9,269,484
Other
Taxes
$5,153,213
3,408,805
4,124,250
8,434,825
8,621,717
10,824,890
15,290,601
14,508,643
12,661,882
14,237,832
Business
Licenses
$ 910,532
1,071,342
1,093,827
1,245,830
1,491,159
1,510,462
1,603,744
1,737,850
1,863,514
2,300,367
(1) Includes General, Special Revenue, Debt Service and Capital Projects
Funds.
(2) Includes interdepartmental services category added in 1991-92 and
miscellaneous revenues,
160
£140
=5120
GENERAL REVENUE
LAST TEN YEARS
Fiscal Year
£ 0
t/>§10 H
PROPERTY TAX
AND SALES TAX REVENUE
LAST TEN YEARS
Property Tax
Sales Tax
Fiscal Year
o
CN
Source: City of Carlsbad Comprehensive Annual Financial Reports
150
Other
Licenses
$3,307,980
3,355,533
3,590,927
3,766,340
4,178,844
5,609,730
6,484,025
3,826,686
3,320,851
3,409,156
Intergovern-
mental
$6,087,138
7,107,385
8,019,308
7,590,323
6,426,262
11,764,760
17,091,140
17,801,614
14,094,118
14,285,677
Charges for
Services
S 7,759,224
5,725,597
9,181,814
9,819,230
6,805,386
10,707,653
7,614,902
6,805,147
5,749,416
6,427,307
Fines and
Forfeits
S3 12,984
231,877
231,454
263,411
335,395
317,892
331,318
935,955
839,831
888,608
Investment
Income
$4,826,292
4,866,361
3,996,127
4,415,975
4,862,050
6,075,188
8,632,261
8,925,565
10,495,817
20,384,618
Contributions
From Property
Owners
$ 446,813
380,389
344,851
2,148,548
9,359,802
15,450,861
25,861,948
45,763,304
14,733,063
15,982,528
Other"'
$2,703,159
4,369,498
3,743,763
3,894,304
4,004,486
5,696,605
3,653,244
3,827,918
3,750,722
4,719,631
TRANSIENT OCCUPANCY TAX
LAST TEN YEARS
M
"oQ
co
CHARGES FOR SERVICES
LAST TEN YEARS
Fiscal Year Fiscal Year
151
CITY OF CARLSBAD
Computation of Legal Debt Margin
June 30, 2001
Net assessed valuation S 10.490.115.729
Debt limit (15% of 25% of net assessed valuation as adjusted) 393,379,340
Amount of debt applicable to debt limit:
Bonded debt 13,865,000
Certificates of participation 5,055,000
Obligations under capital leases 887,950
Total amount of debt applicable to debt limit 19,807,950
Legal debt margin $ _JT73.571.390
Percent of debt limit 5%
Source: County of San Diego Office of the Auditor and Controller
152
2000-01 Assessed Valuation:
CITY OF CARLSBAD
Schedule of Direct and Overlapping Bonded Debt
June 30, 2001
$10,617,645,929 (after deducting $178,841,829 redevelopment increment
valuation)
DIRECT AND OVERLAPPING BONDED DEBT:
San Diego County Water Authority
Metropolitan Water District
Carlsbad Unified School District
Carlsbad Unified School District Lease Tax Obligations
Carlsbad Unified School District Community Facilities Dist. No. 1
Oceanside Unified School District
Encinitas Union School District
Encinitas Union School District Lease Tax Obligations
San Marcos Unified School District School Facilities Improvement District
San Marcos Unified School District Community Facilities District No. 5
San Dieguito Union High School Dist. Community Facilities Dist. No. 94-1
San Dieguito Union High School Dist. Community Facilities Dist. No. 94-2
San Dieguito Union High School Dist. Community Facilities Dist. No. 95-2
Olivenhain Municipal Water Dist., Assessment Dist. No. 96-1
City of Carlsbad 1915 Act Bonds
TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
San Diego County General Fund Obligations
San Diego County Pension Obligations
San Diego County Supt. of Schools General Fund Obligations
Mira Costa Community College District Certificates of Participation
Carlsbad Unified School District General Fund Obligations
San Marcos Unified School Dist. Certificates of Participation
Encinitas Union School Dist. Certificates of Participation
Other School District Certificates of Participation
City of Carlsbad General Fund Obligations
TOTAL DIRECT AND OVERLAPPING GF OBLIGATION DEBT:
GROSS COMBINED TOTAL DEBT:
Applicable
6.719 %
1.083
97.855
97.855
100.000
.010
27.374
27.374
30.968
100.000
100.000
98.327
36.882
22.670
100.000
Debt
June 30.2001
$ 291,958
5,712,608
25,930,299
1,957,100
11,255,000
2,950
7,927,187
1,452,191
6,446,924
12,755,000
299,221
21,517,291
332,724
4,875,184
41,535,000
$ 142,290,637
5.502 % $
5.502
5.502
27.344
97.855
27.257
27.374
Various
100.000
$
31,639,622
18,897,895
129,521
1,847,087
57,621,917
328,447
662,451
183,942
5,055,000
116,365,882
$ 258,656,519
(1) Excludes tax and revenue anticipation notes, revenue, mortgage
revenue, and tax allocation bonds and non-bonded capital lease obligations.
Ratios to Assessed Valuation:
Total Gross Overlapping Tax and Assessment Debt.
Ratios to Adjusted Assessed Valuation:
Combined Direct Debt ($5,055,000)
Gross Combined Total Debt
1.32%
0.05%
2.44%
SHARE OF AUTHORIZED & UNSOLD GENERAL OBLIGATION BONDS:
Carlsbad Municipal Water District, I.D. No. 1
Carlsbad Municipal Water District, I.D. No. 3
Source: California Municipal Statistics, Inc.
$99,369
$200,000
153
CITY OF CARLSBAD
Ratio of Annual Debt Service for
General Bonded Debt to Total Governmental Expenditures
Last Ten Fiscal Years
Fiscal
Year
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
Principal
$150,000
Interest
$3,908
Total
Debt
Service0'
$153,908
Total
Governmental
Expenditures*2*
$53,985,119
55,104,390
62,668,276
60,280,103
59,802,924
65,943,032
80,045,280
112,156,205
105,655,384
92,884,485
Ratio of Debt
Service to
Governmental
Expenditures
0.3
(1) Debt service requirement on General Obligation Bonds comprised of 1962 Sewer Bonds Series
B and C and 1966 Library Bonds. Excludes debt service for the Assessment District and the
Building and Parking Authorities.
(2) Includes General, Special Revenue, Debt Service and Capital Project funds.
RATIO OF DEBT SERVICE TO GENERAL EXPENDITURES
LAST TEN YEARS
0.0%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Reports
154
CITY OF CARLSBAD
Construction and Business Activity
Last Ten Fiscal Years
Building
Fiscal Permit
Year Revenue
1991-92 $
1992-93
1993-94
1994-95
1995-96
1996-97 1
219,445
234,063
365,571
644,131
917,788
,262,177
1997-98 2,094,523
1998-99 2,524,063
1999-00 2,156,584
2000-01 2,102,074
Percent
Change
(74.4)
6.7
56.1
76.2
42.4
37.6
65.9
20.5
(14.6)
(2.5)
Estimated
Valuation
$ 42,351,906
49,809,414
71,057,243
145,344,099
162,116,427
305,247,426
479,909,805
588,527,417
468,596,775
513,763,904
Business
License
Revenue
Percent Construction
Change Deposits
$ 910,532 9.4 $4,663,219
1,071,
1,093,
1,245,
1,491,
342 17.7 5,224,780
827 2.1 4,474,153
830 13.9 5,667,913
159 19.7 5,239,235
1,510,462 1.3 6,822,684
1,603,
1,737,
1,863,
744 6.2 5,857,013
850 8.4 5,779,355
514 7.2 6,132,355
2,300,367 23.4 4,782,012
ESTIMATED BUILDING VALUATION
LAST TEN YEARS
Dollars in millions
$600 -j-'
$500-^
$400 - "
$300-''
$200 - x
$100-'_. .<sa flit>*^a 1
I
_
^r*r
^VJ
1
-f^
JS
6
f
-
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Reports
155
CITY OF CARLSBAD
Water Enterprise
Revenue Bond Coverage
Last Ten Fiscal Years
Fiscal
Year
1991-92
1992-93
1993-94
1 994-95
1995-96
1996-97
1997-98
1998-99
1 999-00
2000-01
Gross
Revenue'"
$11,504,798
12,267,854
15,188,913
15,912,020
17,147,790
18,911,511
18,356,555
19,942,226
22,178,880
23,187,752
0) Includes
(2) Includes
Total
Expenses'21
$ 9,520,564
11,421,571
12,286,557
12,690,114
13,998,346
14,692,531
14,583,879
16,732,975
18,609,221
18,027,298
operating and
oneratine and
Net Revenue
Available
For Debt
Service
$1,984,234
846,283
2,902,356
3,221,906
3, 149,444
4,218,980
3,772,672
3,209,251
3,569,659
5,160,454
non-operating
non-oneratine
Principal
$685,000
730,000
775,000
825,000
880,000
1,040,000
955,000
995,000
1,040,000
1,075,000
revenues.
exnenses.
Debt Service Requirements
Interest Total Coverage
$842,538
798,696
751,248
700,098
644,822
494,954
264,695
227,450
187,650
145,010
$1,527,538
1,528,696
1,526,248
1,525,098
1,524,822
1,534,954
1,219,695
1,222,450
1,227,650
1,220,010
1.29
0.55
1.90
2.11
2.07
2.75
3.09
2.63
2.91
4.23
Source: City of Carlsbad Comprehensive Annual Financial Reports
156
WATER ENTERPRISE GROSS REVENUE
VS.
TOTAL EXPENSES
LAST TEN YEARS
$25 n
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Fiscal Year
H GROSS REVENUE
• TOTAL EXPENSES
WATER ENTERPRISE
REVENUE AVAILABLE FOR DEBT SERVICE
LAST TEN YEARS
$6.0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Reports
157
CITY OF CARLSBAD
Schedule of Assessed Valuation
Last Ten Fiscal Years
Fiscal Year
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
Secured Property
$5,823,039,810
5,948,358,026
5,858,987,695
5,673,354,814
5,676,061,219
5,811,751,594
6,232,883,670
7,154,426,710
8,675,347,964
10,289,895,123
isecured Property
$205,094,661
242,255,869
270,120,519
288,206,831
310,402,764
348,706,124
352,854,173
424,962,226
419,824,253
422,862,440
Less Property
Exemptions
$27,414,635
31,586,277
36,151,898
40,417,338
46,279,594
55,138,448
57,681,797
78,827,023
85,462,447
95,111,634
(l) Does not include redevelopment incremental valuation or state-assessed
unitary values.
Source: County of San Diego Office of the Auditor and Controller
158
Total
Assessed Valuation10
$6,000,719,836
6,159,027,618
6,092,956,316
5,921,144,307
5,940,184,389
6,105,319,270
6,528,056,046
7,500,561,913
9,009,709,770
10,617,645,929
Homeowner's
Exemptions
S 90,728,114
92,131,120
94,519,630
96,173,142
98,488,810
100,249,766
103,825,400
108,623,200
119,026,600
127,530,200
Net Assessed
Valuation
$5,909,991,722
6,066,896,498
5,998,436,686
5,824,971,165
5,841,695,579
6,005,069,504
6,424,230,646
7,391,938,713
8,890,683,170
10,490,115,729
Percentage
Change
8.0
2.7
(1.1)
(2.9)
0.3
2.8
7.0
15.1
20.3
18.0
NET TAXABLE VALUE
LAST TEN YEARS
Dollars in billions
$12 n
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Fiscal Year
159
CITY OF CARLSBAD
Demographic Statistics
Last Ten Fiscal Years
Year
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
20 10 (Estimate)
2020 (Estimate)
(1) Source - State
Square
Miles
42.2
42.2
42.2
42.2
42.2
42.2
42.2
42.2
42.2
42.2
42.2
42.2
Department of Finance.
Population'0
65,331
66,481
66,652
66,479
68,010
70,532
73,688
77,550
82,030
83,469
97,126(2)
105,289(2)
Population
Percent
Change
1.9
1.8
0.9
(0.2)
2.3
3.7
4.5
5.2
5.8
1.8
16.4
8.4
County
Population0'
2,583,470
2,614,222
2,638,511
2,658,584
2,682,093
2,724,437
2,794,785
2,853,258
2,911,468
2,883,595
3,388,400(3)
3,863,500(3)
(2) Source - based on City of Carlsbad projected residential construction
estimates in 2001-02 Capital Improvement Program.
(3) Source - State Department of Finance Interim County Population Projections (June 2001).
90,000 -(
80,000 - '
70,000 • '
60,000 • '
50,000 • '
40,000 • '
30,000-'
20,000 •'
10,000 • '
POPULATION
LAST TEN YEARS
^IIUJ
ft!?-
-
.
•
SB
!>
?'
,
/IE
1
¥
'.
£3
i
•t
•
an
f.
Is
>t
J
JV
!
£
1*
'-
—s
C
'
£S
(^
-*v
h
j
4*
s\
t*
1 1
tf
£ —
/53T
&,
"$
***
£*
U.
$
v
(,'
"•£
-
City
Population
Percent
of County
2.5
2.5
2.5
2.5
2.5
2.6
2.6
2.7
2.8
2.9
2.9
2.7
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Fiscal Year
160
CITY OF CARLSBAD
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal
Year
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
Total
Current Lew
$14,932,937
13,990,844
12,373,782
11,977,833
11,891,199
12,227,583
13,277,486
15,115,611
17,923,250
20,959,581
Total Current
Collections
$13,795,525
12,776,232
11,593,369
10,843,322
11,164,134
11,551,981
12,636,654
14,421,616
17,110,252
20,085,365
% of Levy
Collected
92.4
91.3
93.7
90.5
93.9
94.5
95.2
95.4
95.5
95.8
PROPERTY TAX LEVIES & COLLECTIONS
LAST TEN FISCAL YEARS
Dollars in millions
$25-f
$20 -
$0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Fiscal Year
ID LEVIES BCOLLECTIONS
Source: County of San Diego Office of the Auditor and Controller
161
CITY OF CARLSBAD
Principal Employers
2000-2001
FIRM PRODUCT/SERVICE EMPLOYEES
MANUFACTURING
Callaway Golf
Taylor Made Golf-Adidas Golf Company
Tyco-Mallinckrodt
Acushnet Golf
Ashworth, Inc.
ViaSat
Modern Postcard/The Iris Group, Inc.
Republic Tool & Manufacturing Company
Synrron Bioresearch, Inc.
Invitrogen
Beckman Coulter
The Upper Deck
Schumacher
NON-MANUFA CTURING
Westfield Shoppingtown/Plaza Camino Real
Four Seasons Resort-Aviara
LEGOLAND California
City of Carlsbad
La Costa Resort & Spa
Carlsbad Company Stores
Carlsbad Unified School District
Grand Pacific Resorts
Gemological Institute of America
24-Hour Fitness
SOMC Group, Inc.
Farmers Insurance
PinnFund USA
San Diego Gas & Electric Company
ISIS Pharmaceuticals
COSTCO Wholesale
Prescription Solutions
Toyota Carlsbad/Lexus
Golf Equipment
Golf Equipment
Respiratory Products
Golf Equipment
Golf Apparel
Data Communications
Custom Promotional Cards
Tools
Test Kits & Diagnostics
Research Supplies
Medical Diagnostic Reagent
Sports Trading Cards
Chemical Purification Systems
Shopping Mall
Resort
Family Theme Park
Municipal Government
Hotel/Health Spa
Outlet Shopping Center
Education
Hotel Management/Timeshare Development
Gemlogical School
Health Club Headquarters
Software Distributor
Insurance Services
Mortgage Banking
Power Generation
Research and Development
Grocer/Wholesale/Retail
Prescription Services
Car Dealership
2000
727
650
540
394
375
320
300
300
295
260
250
248
3000
1100
1100
1030
950
850
800
700
500
400
380
350
325
325
300
285
250
250
Source: City of Carlsbad Chamber of Commerce
162
CITY OF CARLSBAD
Principal Taxpayers
2000-01 Percentage of Net
Assessed
Taxpayer
Cabrillo Power, LLC
Callaway Golf Company
Legoland California, Inc.
La Costa Hotel & Spa Corporation
Aviara Resort Associates
Real Estate Collateral Mgmt. Co.
Prentiss Properties
H. G. Fenton Company
Air Products & Chemicals
Standard Pacific Corporation
SSR Western MultiFamily, LLC
Type of Business
Power Generation
Manufacturer
Family Theme Park
Hotel & Health Spa
Resort & Golf Course
Real Estate
Real Estate
Distribution Warehouse
Manufacturer
General Contractor
Real Estate
Valuation
$298,576,808
187,083,605
177,211,809
132,214,291
119,818,629
76,499,989
64,652,790
57,133,163
51,921,351
49,262,713
45,710,000
$1,260,085,148
Valuation' '
2.8%
1.8%
1.7%
1.3%
1.1%
0.7%
0.6%
0.5%
0.5%
0.5%
0.4%
12.0%
(1)Net assessed valuation for 2000-01: $10,490,115,729
Source: County of San Diego Office of the Auditor and Controller
163
CITY OF CARLSBAD
Top 30 Sales Tax Generators
2000-2001
Firm Product/Service
Arco AM/PM Mini Mart
Aviara Resort Associates
Bob Baker Cadillac
Bob Baker Jeep/Eagle/Hyundai
Bob Baker Volkswagen
Callaway Golf Company
Carlsbad Mitsubishi
Carlsbad Toyota
Carlsbad Volvo
Claim Jumper Restaurant
Costco Wholesale
Discover Infiniti Carlsbad
Dixon Ford
Ford Credit Titling Trust
Gap Outlet
Hoehn Acura
Hoehn Honda
Invitrogen Corporation
J C Penney Company
Jim Finney Pontiac
K & P Fuel Service Station
La Costa Hotel & Spa
Legoland
Lexus Carlsbad
Macy's Department Store
Oreo Construction Supply
Polo Ralph Lauren Outlet
Reliable Wholesale Lumber
Robinsons-May Department Store
Schumacher
Automated Fuel Management
Hotel/Food Sales
Car Dealership
Car Dealership
Car Dealership
Golf Manufacturer
Car Dealership
Car Dealership
Car Dealership
Restaurant
General Stores
Car Dealership
Car Dealership
Automobile Lessor
Clothing Store
Car Dealership
Car Dealership
Manufacturer of Research Supplies
Department Store
Car Dealership
Automated Fuel Management
Hotel & Health Spa
Family Theme Park
Car Dealership
Department Store
Construction Material Supply
Clothing Store
Building Materials
Department Store
Chemical Purifier
Source: Municipal Resource Consultants (MRC)
164
CITY OF CARLSBAD
Miscellaneous Statistical Information
2000-2001
Date of Incorporation
Type of City
Form of Government
Area
Population (CA Dept of Finance Report 1/1/00)
Net Assessed Valuation
Number of Street Lights
Miles of Streets
Fire Protection:
Number of Stations
Number of Firefighters & Officers
Police Protection:
Number of Stations
Number of Sworn Police Officers
Municipal Water District:
Number of Customers
Number of Water Connections
Average Daily Consumption
Miles of Lines and Mains
Miles of Sewers
Recreation and Culture:
Number of Parks
Acres of Parks (Improved Community & Special Use Areas)
Acres of Open Space (Special Resource Areas & General
City-Owned Open Space)
Number of Pools
Number of Libraries
Number of Volumes
Total Number of Authorized Full Time City Employees
July 16, 1952
General Law
Council/Manager
42.19sq. miles.
83,469
$10,490,115,729
6,138
281.33
6
73
1
103
70,000
23,000
18.8 million gallons
400
149
34
205
1,634
1
2
276,185
625.25
Source: City of Carlsbad Finance Department
165
166
CARLSBAD REDEVELOPMENT AGENCY
Component Unit Financial Statements
and Supplemental Data
Year Ended June 30,2001
(With Independent Auditors' Report)
CARLSBAD REDEVELOPMENT AGENCY
Component Unit Financial Statements and Supplemental Data
Year Ended June 30,2001
TABLE OF CONTENTS
Page
Financial Section:
Independent Auditors' Report 1
Component Unit Financial Statements:
Combined Balance Sheet - All Governmental Fund Types
and Account Groups 2
Combined Statement of Revenues, Expenditures and Changes
in Fund Balances - All Governmental Fund Types " 4
Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual -
Special Revenue and Debt Service Funds 5
Notes to Component Unit Financial Statements 6
Supplemental Data:
Special Revenue Funds:
Combining Balance Sheet 17
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances 18
Debt Service Funds:
Combining Balance Sheet 19
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances 20
Capital Projects Funds:
Combining Balance Sheet 21
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances 22
Report on Compliance and on Internal Control Over Financial
Reporting Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards 23
CONRAD
ASSOCIATES, L.L.P.
AND CERTIFIED PUBLIC ACCOUNTANTS
1100 MAIN STREET, SUITE C
IRVINE, CALIFORNIA 92614
(949) 474-2020
Fax (949) 263-5520
The Board of Commissioners
Carlsbad Redevelopment Agency
Carlsbad, California
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of the Carlsbad Redevelopment Agency, a
component unit of the City of Carlsbad, as of and for the year ended June 30, 2001, as listed in the table of
contents. These component unit financial statements are the responsibility of the management of the
Carlsbad Redevelopment Agency. Our responsibility is to express an opinion on these component unit
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and Government 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 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 Carlsbad Redevelopment Agency at June 30, 2001, and the results of
operations for the year then ended, in conformity with accounting principles generally accepted in the
United States of America.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole.
The supplemental data listed in the table of contents is presented for purposes of additional analysis and is
not a required part of the financial statements of the Carlsbad Redevelopment Agency. Such information
has been subjected to the auditing procedures applied in the audit of the financial statements and, in our
opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report dated September 21,
2001 on our consideration of the Carlsbad Redevelopment Agency's internal control over financial
reporting and our tests of its compliance with certain provision of laws, regulations, contracts and grants.
September 21,2001
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
CARLSBAD REDEVELOPMENT AGENCY
Combined Balance Sheet - All Governmental Fund Types and Account Groups
June 30,2001
Governmental Fund Types
Assets and Other Debits
Cash and investments (note 3)
Accounts receivable
Loans receivable
Taxes receivable
Interest receivable
Prepaid expenditures
Fixed assets (note 8)
Amount available in debt service fund
Amount to be provided for retirement
of general long-term debt
Total assets and other debits
Liabilities and Fund Balances
Liabilities:
Accrued expenses
Deposits payable
Advances from the City
of Carlsbad (note 6)
Bonds payable (note 5)
Total liabilities
Fund Balances and Other Credits:
Investment in general fixed assets
Fund balances (note 9):
Reserved for loans receivable
Reserved for prepaid expenditures
Reserved for debt service
Reserved for encumbrances
Unreserved:
Designated for approved capital projects
Designated for continuing appropriations
Undesignated
Total fund balances and other credits
Special
Revenue
Debt
Service
$ 924,869
2,417,384
6,397
131
553
25,586
526
$ 2,929
20,022
12,475,252
22,951 12,475,252
2,417,384
553
152
869,000
908,294 (11,965,588)
Total liabilities, fund balances and other credits $3,349,334
See accompanying notes to component unit financial statements.
2
Capital
Projects
1,352,552 1,387,648
66,981
12,626
20,408
$3,349,334 1,378,664 1,487,663
29,460
9,000
38,460
20,408
70,771
661,315
696,709
3,326,383 (11,096,588) 1,449,203
1,378,664 1,487,663
Account Groups
General
Fixed
Assets
-
-
-
-
-
6,191,477
6,191,477
-
_
-
General
Long-Term Totals
Debt (Memorandum Only)
3,665,069
66,981
2,417,384
31,983
13,283
20,961
6,191,477
13,865,000 13,865,000
13,865,000 26,272,138
32,389
29,022
12,475,252
13,865,000 13,865,000
13,865,000 26,401,663
6,191,477
_
-
-
-
_
-
-
6,191,477
6,191,477
6,191,477
2,417,384
20,961
869,000
70,923
661,315
696,709
(11,057,294)
(129,525)
13,865,000 26,272,138
CARLSBAD REDEVELOPMENT AGENCY
Combined Statement of Revenues, Expenditures
and Changes in Fund Balances - All Governmental Fund Types
Year Ended June 30, 2001
Revenues:
Property tax increment
Charges for services
Income from property and
investments
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Community development
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Proceeds of debt
Total other financing
sources (uses)
Excess (deficiency) of
revenues and other
financing sources over
(under) expenditures
and other financing uses
Fund balances at beginning of year
Residual equity transfers in
Residual equity transfers (out)
Total residual equity transfe
Fund balances at end of year
Special
Revenue
$ 393,824
487,910
5,520
887,254
364,567
416
2,612
367,595
519,659
3,152
3,152
522,811
2,803,572
-
-
$ 3,326,383
Debt
Service
1,575,295
95,641
1,670,936
36,531
305,000
1,471,151
1,812,682
(141,746)
(280,000)
(280,000)
(421,746)
(10,507,997)
(166,845)
(166,845)
(11,096,588)
Capital Totals
Projects (Memorandum Only)
2,299
256,609
94,809
13,186
366,903
429,731
53,166
1,299
1,757
485,953
(119,050)
280,000
9,850
289,850
170,800
1,111,558
166,845
166,845
1,449,203
1,971,418
256,609
678,360
18,706
2,925,093
466,262
364,567
53,166
306,715
1,475,520
2,666,230
258,863
280,000
(280,000)
13,002
13,002
271,865
(6,592,867)
166,845
(166,845)
-
(6,321,002)
See accompanying notes to component unit financial statements.
CARLSBAD REDEVELOPMENT AGENCY
Combined Statement of Revenues, Expenditures
and Changes in Fund Balances - Budget and Actual -
Special Revenue and Debt Service Funds
Year Ended June 30,2001
Special Revenue
Revenues:
Property tax increment
Income from property and
investment
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Community development
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Operating transfers out
Proceeds of debt
Total other financing
sources (uses)
Excess (deficiency) of
revenues and other
financing sources over
(under) expenditures
and other financing uses
Fund balances at
beginning of year
Residual equity transfers (out)
Fund balances at end of year
Debt Service
Budget Actual
$ 342,500 393,824
371,670 487,910
3,383 5,520
717,553 887,254
430,846 364,567
416
2,612
430,846 367,595
286,707 519,659
3,152
3,152
286,707 522,811
2,803,572 2,803,572
-
$ 3,090,279 3,326,383
Variance
Over
(Under)
51,324
116,240
2,137
169,701
(66,279)
416
2,612
(63,251)
232,952
3,152
3,152
236,104
_
-
236,104
Budget
1,370,000
40,000
-
1,410,000
67,938
-
290,000
1,478,954
1,836,892
(426,892)
-
(426,892)
(10,507,997)
-
(10,934,889)
Actual
1,575,295
95,641
-
1,670,936
36,531
-
305,000
1,471,151
1,812,682
(141,746)
(280,000)
-
(280,000)
(421,746)
(10,507,997)
(166,845)
(11,096,588)
Variance
Over
(Under)
205,295
55,641
'-
260,936
(31,407)
-
15,000
(7,803)
(24,210)
285,146
(280,000)
-
(280,000)
5,146
.
(166,845)
(161,699)
See accompanying notes to component unit financial statements.
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
Year Ended June 30,2001
(1) Organization and Summary of Significant Accounting Policies
The Carlsbad Redevelopment Agency (Agency) was established in July 1976 with the
adoption of Ordinance No. 1191 by the Carlsbad City Council pursuant to the California
Community Redevelopment Law, now codified as Part 1, Division 24, of the State of
California Health and Safety Code. The Agency has the broad authority to acquire,
rehabilitate, develop, administer, and sell or lease property. The Agency is not subject to
federal or state income taxes.
The principal objectives of the Agency are to eliminate blighted influences within the
"Village "Area" of the City of Carlsbad (City), stimulate and attract private investment,
generate added employment through increased specialty goods and services, and expand
the City's sales tax revenue.
The principal objectives of the Agency are to eliminate blight and environmental
deficiencies within the "South Carlsbad Coastal Redevelopment Project Area" of the City
of Carlsbad (City), assemble land into parcels suitable for modern, integrated
development, replan, redesign, and develop properties which are stagnant or improperly
utilized, increase, improve and preserve the community's supply of housing affordable to
very low, low, and moderate income households, develop new beach and coastal
recreational opportunities, facilitate the redevelopment of the Encina power generating
facility, fund the Carlsbad Boulevard realignment, enhance the commercial and
recreational functions in the Project Area, and strengthen the economic base of the
Project Area.
The Agency is an integral part of the reporting entity of the City. The funds and account
groups of the Agency have been included within the scope of the general purpose
financial statements of the City because the City Council is the governing board over the
operations of the Agency. Only the funds and account groups of the Agency 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.
The accounting policies of the Agency 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 Agency are organized on the basis of funds and account
groups, each of which is considered to be a separate accounting entity. The
operations of each fund and account group are accounted for by providing a
separate set of self-balancing accounts that comprise its assets, liabilities, fund
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(1) Organization and Summary of Significant Accounting Policies, (Continued)
balance, revenues, and expenditures. The various funds and account groups are
summarized by type in the financial statements. The fund types and account
groups used by the Agency are as follows:
GOVERNMENTAL FUND TYPES
Governmental funds are used to account for the Agency's expendable financial
resources and related liabilities. The measurement focus is upon determination of
changes in financial position. The following are the Agency's governmental fund
types:
Special Revenue Funds
Special revenue funds are used to account for revenues derived from specific
sources (other than major capital projects) that are restricted by law or
administrative regulation to expenditures for specified purposes.
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.
Capital Projects Funds
Capital projects funds are used to account for financial resources to be used for
the acquisition or construction of major capital facilities.
ACCOUNT GROUPS
Account groups are used to establish accounting control and accountability for the
Agency's general fixed assets and general long-term debt. The following are the
Agency's account groups:
General Fixed Assets Account Group
This account group is used to account for all fixed assets of the Agency, other
than assets held for resale.
General Long-Term Debt Account Group
This account group is used to establish accounting control and accountability for
the Agency's general long-term debt. This account group is used to account for
all long-term obligations of the Agency.
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(1) Organization and Summary of Significant Accounting Policies, (Continued)
(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 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.
The modified accrual basis of accounting is utilized by the governmental fund
types. 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.
Revenues that are accrued include the tax increment on real property taxes and
interest income.
Real property taxes are levied on October 15 against owners of record at January
1. The taxes are due in two installments, on November 1 and February 1, and
become delinquent after December 10 and April 10, respectively. Tax liens attach
annually as of 12:01 a.m. on the first day of January in the fiscal years for which
the taxes are levied. Under the provisions of NCGA Interpretation 3, property tax
revenue is recognized in the fiscal year for which the taxes have been levied,
provided it is collected within 60 days of the end of the fiscal year.
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) Encumbrances
Encumbrance accounting, under which purchase orders, purchase order requests,
contracts and other commitments for the expenditure of monies are recorded in
order to reserve that portion of the applicable appropriation, is employed as an
extension of formal budgetary control in the governmental funds. Encumbrances
outstanding at year-end do not constitute expenditures or liabilities, but are
reported as reservations of fund balance for subsequent-year expenditures.
(d) Cash and Investments
The Agency participates in the pooled cash and investment fund of the City of
Carlsbad. Pooled investments are stated at fair value. The Agency's equity in the
pooled cash is included in the financial statements as cash and investments.
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(1) Organization and Summary of Significant Accounting Policies, (Continued)
Interest earned as a result of the pooling is accrued in the cash and investment
pool and allocated to the appropriate funds as part of the monthly interest
allocation.
Investments are reported in the accompanying balance sheet at fair value, except
for nonparticipating certificates of deposit and investment contracts that are
reported at cost because they are not transferable and they have terms that are not
affected by changes in market interest rates.
Changes in fair value that occur during a fiscal year are included with income
from property and investments reported for that fiscal year. Income from property
and investments includes interest earnings, changes in fair value, and any gains or
losses realized upon the liquidation, maturity, or sale of investments as well as
any income from property owned by the Agency.
(e) Compensated Absences
Vacation pay is payable to employees at the time used or upon termination of
employment. The cost of accumulated vacation expected to be paid in the next 12
months is recorded as a fund liability; currently no amounts are expected to be
paid after 12 months.
(f) Total Columns
Total columns on the accompanying combined financial 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 balance in conformity with generally accepted
accounting principles. Such data is not comparable to a consolidation. Interfund
eliminations have not been made in the aggregation of this data.
(2) Budgetary Data
The budget for the Agency is established by the City of Carlsbad. The City Manager is
authorized to make transfers of appropriated amounts from one department to another
within a fund. The legal level of budgetary control is at the fund level. Revisions that
alter the total appropriations of any fund must be approved by the City Council with the
exception of budget adjustments which involve offsetting revenues and expenditures. The
City Manager is authorized to increase or decrease an appropriation for a specific purpose
where the appropriation is offset by unbudgeted revenue which is designated for said
specific purpose. Quarterly budget reviews are conducted each year and any major
changes to the adopted budget are approved by the City Council at that time.
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(2) Budgetary Data, (Continued)
Budgets are adopted on the modified accrual basis, except that encumbrances are treated
as budgeted expenditures in the year purchases are committed. Expenditures may not
exceed budgeted appropriations at the fund level. Unencumbered appropriations lapse at
year-end. Annual budgets are adopted for the special revenue and debt service funds.
(3) Cash and Investments
Cash and investments held by the Agency at June 30,2001 consisted of the following:
Cash on hand (petty cash) $ 150
Deposits 91,783
Investments 3,573,136
Total cash and investments $3.665.069
Authority for Deposits and Investments
The Agency's investment policy and state statutes authorize the Agency to invest in
obligations of the U.S. Government, its agencies and instrumentalities; commercial paper
rated A-l by Standard and Poor's Corporation or P-l by Moody's Commercial Paper
record with a maximum maturity of 180 days or 15% of the portfolio; banker's
acceptances with a maximum maturity of 180 days or 25% of the portfolio; repurchase
agreements with a maximum maturity of one week; certificates of deposit with national
and state licensed or chartered banks or federal or state savings and loan associations;
medium-term corporate notes with a maximum five-year maturity rated in the two top
rating categories and not to exceed 30% of the portfolio; money market funds whose
portfolios consist of one or more of the foregoing investments; a sweep account and the
State Treasurer's investment pool.
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.
Deposits:
The following summary presents the amount of the Agency's deposits which are fully
insured or collateralized with securities held by the Agency or its agent in the Agency's
name (Category One), those deposits which are collateralized with securities held by the
pledging financial institution's trust department or agent in the Agency'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
Agency's name (Category Three) at June 30,2001.
10
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(3) Cash and Investments, (Continued)
Category Bank Carrying
Form of Deposit l_ 23 Balance Amount
Demand deposits
Classification of Investments by Credit Risk:
As defined in Governmental Accounting Standards Board Statement No. 3, the Agency's
investments in securities are categorized in the following manner:
Category 1 - Investments that are insured or registered, which are held by the Agency
or its agent in the Agency's name.
Category 2 - Uninsured and unregistered investments, for which the securities are held
by the counterparty's trust department or agent in the Agency's name.
Category 3 - Uninsured and unregistered investments, for which the securities are held
by the counterparty or by its trust department or agent, but not in the Agency's name.
At June 30, 2001, the Agency had the following investments which are not categorizable
by credit risk:
Carrying Amount/
Investment Market Value
Investments held by Agency not subject to categorization:
Investment in State of California Pooled Investment Account $ 907,794
Investment in City's pooled cash fund 2,665,342
Total investments $3.573.136
The Agency is a voluntary participant in the Local Agency Investment Fund (LAIF) that
is regulated by California Government Code Section 16429 under the oversight of the
Treasurer of the State of California. The fair value of the Agency's investment in this
pool is reported in the accompanying financial statements at amounts based upon the
Agency's pro-rata share of the fan: value provided by LAIF for the entire LAIF portfolio
(in relation to the amortized cost of that portfolio). The balance available for withdrawal
is based on the accounting records maintained by LAIF, which are recorded on an
amortized cost basis. Included in LAIF's investment portfolio are collateralized
mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to
certain state funds, and floating rate securities issued by federal agencies, government-
sponsored enterprises, and corporations.
11
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(4) Pension Plan
The Agency's employees are included in the City's pension plan which is administered
by the California Public Employees Retirement System (PERS). PERS is 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.
All full-time employees are eligible to participate as members of the PERS. Benefits vest
after an employee has been a member of the plan for five years. Employees are eligible
to retire after age 50 with 5 years of credited service. Annual retirement benefits are
determined based on age at retirement, the length of membership service and the amount
of earnings based on the highest twelve consecutive months average. The PERS also
provides death and disability benefits. These benefit provisions and all other
requirements are established by state statute.
Employees are required to make contributions equaling 7% of gross pay. This is paid by
the City for the benefit of the employees in lieu of salary. The City is also required to
contribute the remaining 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 PERS Board of Administration.
Additional disclosures required by Governmental Accounting Standards Board Statement
No. 27 are not available for the Agency as a separate entity. This information for the
City's reporting entity is presented in the Comprehensive Annual Financial Report of the
City of Carlsbad.
(5) Long-Term Debt
The following is a summary of changes in long-term debt for the year ended June 30,
2001:
Principal Principal
Balance at Additional Balance at
July 1,2000 Obligations Deletions June 30,2001
Bonds payable $14.170.000 - (305.000^ 13.865.000
12
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(5) Long-Term Debt, (Continued)
On August 15, 1993, the Agency issued $15,495,000 in tax allocation bonds with an
average interest rate of 5.3% to finance redevelopment activities within the Village
Redevelopment Project Area and to advance refund $11,185,000 of outstanding 1988
series tax allocation bonds with an average interest rate of 7.3%. These bonds were
called in full on November 1,1997.
Debt service requirements to maturity for the bonds, including sinking fund payments,
are as follows:
2002 $ 1,046,234
2003 1,043,777
2004 1,045,403
2005 1,045,977
2006 1,040,634
Subsequent to 2006 18,653,455
23,875,480
Less amounts representing interest (10,010,480)
Bonds payable $13.865.000
(6) Advances from the City of Carlsbad
Since activation of the Redevelopment Agency in July 1976, the City has advanced the
Agency monies for approved expenditures. Advances from the City bear interest equal to
the City's interest rate received on pooled investments. There is no stated maturity date.
The outstanding balance at June 30, 2001 is $12,475,252.
13
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(7) Obligations Under Operating Leases
In June 1988, the Agency entered into an agreement to lease a parking lot on State Street
from a private party. The lease requires monthly rental payments for twenty years.
Minimum future rental payments under operating lease as of June 30, 2001 are:
2002 $ 69,944
2003 74,140
2004 78,589
2005 83,304
2006 88,303
Subsequent to 2006 192,818
Total minimum future rental payments $587,098
(8) General Fixed Assets
A summary of changes in the general fixed assets account group is as follows:
Balance at Balance at
July 1,2000 Additions Deletions June 30,2001
Land $2,285,824 - - 2,285,824
Buildings 3,461,598 - - 3,461,598
Improvements 444,055 - - 444,055
Total $6.191.477 - - 6.191.477
(9) Fund Balances
Reserves for the loan receivable and prepaid expenditures are established to show that
certain assets are already committed for other purposes and are not available for
discretionary expenditures.
Reserve for debt service represents resources legally restricted to the payment of general
long-term debt principal and interest maturing in future years.
Reserve for encumbrances represents commitments related to unperformed contracts for
services and undelivered goods.
14
CARLSBAD REDEVELOPMENT AGENCY
Notes to Component Unit Financial Statements
(Continued)
(9) Fund Balances, (Continued)
Unreserved-undesignated balances represent the fund balance remaining after reduction
for reserved and designated fund balances.
The Village Redevelopment Area Debt Service Fund reported a deficit fund balance of
$10,898,538.
The South Carlsbad Redevelopment Area Debt Service Fund reported a deficit fund
balance of $198,050 at June 30,2001.
15
SUPPLEMENTAL DATA
16
CARLSBAD REDEVELOPMENT AGENCY
Special Revenue Funds
Combining Balance Sheet
June 30, 2001
Assets and Other Debits
Cash and investments
Loans receivable
Taxes receivable
Interest receivable
Prepaid expenditures
Total assets and other debits
Liabilities and Fund Balances
Liabilities:
Accrued expenses
Deposits payable
Total liabilities
Fund Balances:
Reserved for loans receivable
Reserved for prepaid expenditures
Reserved for encumbrances
Unreserved:
Undesignated
Total fund balances
Total liabilities and fund balances
Low and
Moderate
Income
Housing
$ 692,571
2,417,384
6,397
131
553
$ 3,117,036
$ 2,929
2,929
2,417,384
553
152
696,018
3,114,107
$ 3,117,036
Tyler
Court
Apartments
232,298
232,298
20,022
20,022
212,276
212,276
232,298
Totals
924,869
2,417,384
6,397
131
553
3,349,334
2,929
20,022
22,951
2,417,384
553
152
908,294
3,326,383
3,349,334
17
CARLSBAD REDEVELOPMENT AGENCY
Special Revenue Funds
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
Year Ended June 30,2001
Revenues:
Property tax increment
Income from property and
investment
Miscellaneous
Total revenues
Expenditures:
Current:
Community development
Debt Service:
Principal
Interest Expense
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Proceeds of debt
Total other financing
sources (uses)
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures and
other financing uses
Fund balances at beginning of year
Fund balances at end of year
Low and
Moderate
Income
Housing
$ 393,824
130,464
524,288
70,985
416
2,612
74,013
450,275
Tyler
Court
Apartments
.
357,446
5,520
362,966
293,582
_
-
293,582
69,384
Totals
393,824
487,910
5,520
887,254
364,567
416
2,612
367,595
519,659
3,152
3,152
453,427
2,660,680
69,384
142,892
3,152
3,152
522,811
2,803,572
$ 3,114,107 212,276 3,326,383
18
CARLSBAD REDEVELOPMENT AGENCY
Debt Service Funds
Combining Balance Sheet
June 30, 2001
Assets and Other Debits
Cash and investments
Taxes receivable
Interest receivable
Total assets and other debits
Liabilities and Fund Balances
Liabilities:
Advances from the City of Carlsbad
Total liabilities
Fund Balances:
Reserved for debt service
Unreserved:
Undesignated
Total fund balances
Total liabilities and fund balances
South
Village Carlsbad
Redevelopment Redevelopment
Area Area Totals
$
$
1,323,369
25,586
526
1,349,481
29,183 1,352,552
25,586
526
29,183 1,378,664
$ 12,248,019
12,248,019
869,000
(11,767,538)
(10,898,538)
227,233 12,475,252
227,233 12,475,252
869,000
(198,050) (11,965,588)
(198,050) (11,096,588)
$ 1,349,481 29,183 1,378,664
19
CARLSBAD REDEVELOPMENT AGENCY
Debt Service Funds
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
Year Ended June 30,2001
South
Village Carlsbad
Redevelopment Redevelopment
Area Area Totals
Revenues:
Property tax increment
Income from property and
investments
Total revenues
Expenditures:
Current:
General government
Debt Service:
Principal
Interest expense
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Operating transfers out
Total other financing
sources (uses)
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures and
other financing uses
Fund balances at beginning of year
Residual equity transfers (out)
Fund balances (deficit) at end of year
$ 1,575,295
93,038
1,668,333
15,957
305,000
1,457,917
1,778,874
(110,541)
(280,000)
(280,000)
(390,541)
(10,507,997)
1,575,295
2,603 95,641
2,603 1,670,936
20,574 36,531
305,000
13,234 1,471,151
33,808 1,812,682
(31,205) (141,746)
(280,000)
(280,000)
(31,205) (421,746)
(10,507,997)
(166,845) (166,845)
$ (10,898,538)(198,050) (11,096,588)
20
CARLSBAD REDEVELOPMENT AGENCY
Capital Projects Funds
Combining Balance Sheet
June 30, 2001
South
Village Carlsbad
Redevelopment Redevelopment
Area Area Totals
Assets and Other Debits
Cash and investments
Accounts receivable
Interest receivable
Prepaid expenditures -
Total assets and other debits
Liabilities and Fund Balances
Liabilities:
Accrued expenses
Deposits payable
Total liabilities
Fund Balances:
Reserved for prepaid expenditures
Reserved for encumbrances
Unreserved:
Designated for approved
capital projects
Designated for continuing
appropriations
Undesignated
Total fund balances
Total liabilities and fund balances
$
$
$
$
1,387,648
66,981
12,626
20,408
1,487,663
29,460
9,000
38,460
20,408
70,771
661,315
696,709
1,449,203
1,487,663
1,387,648
66,981
12,626
20;408
1,487,663
29,460
9,000
38,460
20,408
70,771
661,315
696,709
1,449,203
1,487,663
21
CARLSBAD REDEVELOPMENT AGENCY
Capital Projects Funds
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
Year Ended June 30,2001
South
Village Carlsbad
Redevelopment Redevelopment
Area Area
Revenues:
Property Tax Increment
Charges for services
Income from property and
investment
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Capital outlay
Debt Service:
Principal
Interest Expense
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Operating transfers in
Loan proceeds
Total other financing
sources (uses)
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures and
other financing uses
Fund balances at beginning of year
Residual equity transfers in
Fund balances at end of year
Totals
$ 2,299
256,609
94,809
13,186
366,903
429,731
53,166
1,299
1,757
485,953
(119,050)
280,000
9,850
289,850
170,800
1,278,403
2,299
256,609
94,809
13,186
366,903
429,731
53,166
1,299
. - 1,757
485,953
(119,050)
280,000
9,850
289,850
170,800
(166,845) 1,111,558
166,845 166,845
$ 1,449,203 1,449,203
22
CONRAD
ASSOCIATES,
AND CERTIFIED PUBLIC ACCOUNTANTS
1100 MAIN STREET, SUITE C
-R IRVINE, CALIFORNIA 92614
(949) 474-2020
Fax (949) 263-5520
The Board of Commissioners
Carlsbad Redevelopment Agency
Carlsbad, California
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL
REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
We have audited the financial statements of Carlsbad Redevelopment Agency as of and for the
year ended June 30, 2001, and have issued our report thereon dated September 21, 2001. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States of America.
Compliance
As part of obtaining reasonable assurance about whether the financial statements of the Carlsbad
Redevelopment Agency are free of material misstatements, we performed tests of its compliance
with certain provisions of laws, regulations, contracts and grants, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
Such provisions included those provisions of laws and regulations identified in the Guidelines
for Compliance Audits of California Redevelopment Agencies, issued by the State Controller and
as interpreted in the Suggested Auditing Procedures for Accomplishing Compliance Audits of
California Redevelopment Agencies, issued by the Governmental Accounting and Auditing
Committee of the California Society of Certified Public Accountants. However, providing an
opinion on compliance with those provisions was not an objective of our audit and, accordingly,
we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Carlsbad Redevelopment Agency's
internal control over financial reporting in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and not to provide assurance on the
internal control over financial reporting. Our consideration of the internal control over financial
reporting would not necessarily disclose all matters in the internal control over financial
reporting that might be material weaknesses. A material weakness is a condition in which the
design or operation of one or more of the internal control components does not reduce to a
relatively low level the risk that misstatements in amounts that would be material in relation to
the financial statements being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We noted no matters
involving the internal control over financial reporting and its operation that we consider to be
material weaknesses.
This report is intended for the information of management and the State Controller and is not
intended to be and should not be used by anyone other than these specified parties.
September 2 1,2001
23
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
r'1
r
CITY OF CARLSBAD
PUBLIC IMPROVEMENT CORPORATION
Financial Statements and Supplemental Data
Year Ended June 30,2001
(With Independent Auditors' Report Thereon)
CONRAD AND
ASSOCIATES, L.L.P.CERTIFIED PUBLIC ACCOUNTANTS
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Financial Statements and Supplemental Data
Year Ended June 30,2001
TABLE OF CONTENTS .
Page
Independent Auditors' Report 1
Combined Balance Sheet - Governmental Fund Type and Account Group 2
Combined Statement of Revenues, Expenditures and Changes in Fund Balances -
Debt Service Funds 3
Notes to Financial Statements 4
Supplemental Data:
Combining Balance Sheet - Debt Service Funds 11
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Debt Service Funds 12
CONRAD AND CERTIFIED PUBLIC ACCOUNTANTS
ASSOCIATES, L.L.R 1100 MAIN STREET, SUITE C
IRVINE, CALIFORNIA 92614
(949) 474-2020
Fax (949) 263-5520
Board of Directors
City of Carlsbad Public Improvement Corporation
Carlsbad, California
Independent Auditors' Report
We have audited the accompanying component unit financial statements of the City of Carlsbad
Public Improvement Corporation (the Corporation) as of and for the year ended June 30, 2001, as
listed in the accompanying table of contents. These component unit financial statements are the
responsibility of the Corporation'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 auditing standards generally accepted in the United
States of America. 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 City of Carlsbad Public Improvement Corporation
as of June 30, 2001, and the results of its operations for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
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 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 City of Carlsbad Public Improvement
Corporation. 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 stated in all material
respects in relation to the component unit financial statements taken as a whole.
September 12, 2001
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Combined Balance Sheet -
Governmental Fund Type and Account Group
June 30, 2001
Governmental
Fund Type
Assets
Cash and investments held by the City (note 2)
Cash and investments held by trustee (note 2)
Net investment in direct financing lease (note 3)
Interest receivable
Amount available in debt service fund
Amount to be provided for retirement of
certificates of participation
Total assets
Debt
Service
$ 361,336
1,424,244
6,617,088
22,332
$8.425.000
Account
Group
General
Long-Term
Debt
1,807,912
6,617,088
8.425.000
Totals
(Memorandum
Only)
361,336
1,424,244
6,617,088
22,332
1,807,912
6,617,088
16.850.000
Liabilities and Fund Balances
Liabilities:
Deferred revenue
Certificates of participation payable (note 4)
Total liabilities
$6,617,088
6,617,088
8,425,000
8,425,000
6,617,088
8,425,000
15,042,088
Fund balances:
Reserved for debt service (notes 4 and 6) 1,807,912 - 1,807,912
Total fund balances 1,807,912 - 1,807,912
Total liabilities and fund balances $8.425.000 8.425.000 16.850.000
See accompanying notes to financial statements.
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Combined Statement of Revenues, Expenditures
and Changes in Fund Balances - Debt Service Funds
Year Ended June 30, 2001
Revenues:
Lease payments
Interest on investments
Total revenues
Debt Service
$1,985,217
87,917
2,073,134
Expenditures:
Principal
Interest
Administrative expense
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Total other financing sources (uses)
Excess (deficiency) of revenues
and other financing sources over
(under) expenditures and other
financing uses
Fund balances at beginning of year
Fund balances at end of year
1,555,000
421,305
2,235
1,978,540
94,594
60,107
(60,107)
94,594
1,713,318
$1.807.912
See accompanying notes to financial statements.
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
Year Ended June 30,2001
(1) Organization and Summary of Significant Accounting Policies
The City of Carlsbad Public Improvement Corporation (the Corporation) was organized
on June 1, 1988 under the Nonprofit Public Benefit Corporation law for the purpose of
financing and constructing certain improvements. The Corporation is not subject to
federal or state income taxes.
The Corporation is an integral part of the reporting entity of the City of Carlsbad,
California (the City). The accounts of the Corporation have been included within the
scope of the general purpose financial statements of the City because the City Council has
financial accountability over the operations of the Corporation. Only the accounts of the
Corporation are included herein; therefore, these financial statements do not purport to
represent the financial position or results of operations of the City.
The accounting policies of the Corporation 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 Corporation are organized on the basis of funds and an
account group, each of which is considered to be a separate accounting entity.
The operations of each fund and 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 the account group are
summarized by type in the financial statements. The fund types and the account
group used by the Corporation are as follows:
GOVERNMENTAL FUND TYPE
The governmental fund is used to account for the Corporation's expendable
financial resources and related liabilities. The measurement focus is upon
determination of changes in financial position. The following is the Corporation's
governmental fund type:
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 Corporation's general long-term debt. It is used to account for all long-term
obligations of the Corporation.
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
(1) Organization and Summary of Significant Accounting Policies, (Continued)
(b) Measurement Focus and Basis of Accounting
The governmental fund type is accounted for on a "spending" measurement focus.
Accordingly, only current assets and current liabilities are generally included on
its balance sheet, and the reported fund balance provides an indication of
available, spendable resources. The operating statement for the governmental
fund type report increases (revenues) and decreases (expenditures) in available,
spendable resources.
The governmental fund type uses 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. Revenues that are
accrued include interest income.
The 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 Corporation does not adopt an annual budget, therefore, no budgetary
comparisons are presented.
(d) Cash and Investments
Investments are reported in the accompanying balance sheet at fair value, except
for certain certificates of deposit and investment contracts that are reported at cost
because they are not transferable and they have terms that are not affected by
changes in market interest rates.
Changes in fair value that occur during a fiscal year are recognized as interest on
investments reported for that fiscal year. Interest on investments includes interest
earnings, changes in fair value, and any gains or losses realized upon the
liquidation, maturity, or sale of investments.
(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. Such data is not comparable to a consolidation. Interfund eliminations
have not been made in the aggregation of this data.
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
t Notes to Financial Statements
(Continued)
«
(2) Cash and Investments
Authority for Investments
The Trust Agreement by and among the First Trust of California, as successor trustee, the
<• Corporation and the City, dated June 1, 1988, authorizes the trustee to invest in Federal
Treasury Securities, Federal Agency Securities, interest-bearing demand or time deposits,
obligations of U.S. corporations having assets in excess of $500,000,000 and carrying
one of the three highest ratings by Moody's and Standard and Poor's Corporation,
repurchase agreements, money market funds, commercial paper rated A-l by Standard
and Poor's Corporation and P-l by Moody's Commercial Paper with original maturities
* of not more than 180 days, bankers acceptances with maturities of not more than 180
days, and tax-exempt obligations rate in one of the three highest ratings by Moody's and
Standard and Poor's Corporation.
Classification of Deposits by Credit Risk
t The following summary presents the amount of the Corporation's deposits which are
fully insured or collateralized with securities held by the Corporation or its agent in the
Corporation's name (Category 1), those deposits which are collateralized with securities
held by the pledging financial institution's trust department or agent in the Corporation's
name (Category 2), 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 Corporation's name (Category 3) at June 30, 2001.
Category Bank Carrying
Form of Deposit 123 Balance Amount
Deposits managed by fiscal agent:
* Bank Investment agreements $ - 1.399.500 - 1.399.500 1.399.500
Classification of Investment by Credit Risk
As defined in Governmental Accounting Standards Board Statement No. 3, investments
in securities are categorized in the following manner:
•Category 1 - Investments that are insured or registered, which are held by the
Corporation or its agent in the Corporation's name.
Category 2 - Uninsured and unregistered investments, for which the securities are held
by the counterparty's trust department or agent in the Corporation's name.
•
Category 3 - Uninsured and unregistered investments, for which the securities are held
by the counterparty or by its trust department or agent, but not in the Corporation's name.
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
As of June 30, 2001, the Corporation had $361,336 invested in the City of Carlsbad's
cash and investments pool and $24,744 invested in Federal Agency treasury money
market mutual funds which are not categorizable by credit risk.
(3) Lease Agreements
Hosp Grove
Under the terms of a lease agreement dated June 1, 1988, the City has leased property
known as Hosp Grove to the Corporation and the Corporation has leased back to the City
the same property and all improvements constructed thereon. The Agreement requires
the City to pay semiannual lease payments to the Corporation equal to the debt service
requirements of the Certificates of Participation issued by the Corporation on June 1,
1988 (the Certificates). Under the terms of the lease agreement between the City and the
Corporation, the City is required to make lease payments on January 15 and July 15 until
the Certificates have been paid in full. In addition, the City must pay all taxes,
assessments, insurance, maintenance and utilities on the property and its improvements.
The lease expires on August 1, 2008 or upon the date of retirement of the Certificates.
The lease has been accounted for as a direct financing lease.
Carlsbad Municipal Water District
Under the terms of a Lease Agreement dated September 1, 1997, the Carlsbad Municipal
Water District (District) has leased the Project (which represents the additions,
betterments, extensions and improvements of the Water System) to the Corporation and
the Corporation has leased back to the District the same Project. All right, title and
interest in each component of the Project shall vest in the District immediately upon
execution and delivery of the Agreement. All revenues (which consists of all income,
rents, rates, fees, charges and other monies derived from the ownership or operation of
the Water System) are irrevocably pledged to the payment of the installment payments.
The Agreement requires the district to pay semi-annual lease payments to the Corporation
equal to the debt service requirements of the 1997 Water Revenue Certificates of
Participation issued by the Corporation on September 1, 1997. Under the terms of the
Lease Agreement between the District and the Corporation, the District is required to
make lease payments on April 15 and October 15 until the Certificates have been paid in
full. The lease expires on May 1, 2004 or upon the date of retirement of the Certificates.
The lease has been accounted for as a direct financing lease.
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
(4) Certificates of Participation
Hosp Grove
The Corporation issued Refunding Certificates of Participation (Hosp Grove Project)
Series 1997 pursuant to a Trust Agreement by and among the Corporation, the City and
the Trustee. The Certificates represent an undivided interest in the lease payments made
by the City to the Corporation. The Certificates mature on August 1 of each year through
2008. The Corporation is required to maintain a debt service reserve of $659,500. As of
June 30, 2001, the reserve balance was $675,000.
Debt service requirements to maturity for the Certificates are as follows:
Year ending June 30,
2002 $ 752,285
2003 754,350
2004 754,800
2005 758,475
2006 745,865
2007-2009 2,254,736
6,020,511
Less amounts representing interest (965,511)
Outstanding balance $5.055.000
Carlsbad Municipal Water District
The Corporation issued 1997 Water Revenue Certificates of Participation (1988
Refunding Project) pursuant to a Trust Agreement by and among the Corporation, the
Water District and the Trustee. The Certificates represent an undivided interest in the
lease payments made by the Water District to the Corporation. The Certificates mature
on May 1 of each year through 2004. The Corporation is required to maintain a debt
service reserve of $740,000. As of June 30, 2001, the reserve balance was $768,145.
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
(4) Certificates of Participation, (Continued)
Debt service requirements to maturity for the Certificates are as follows:
Year ending June 30,
2002 1,220,010
2003 1,219,860
2004 1,226,700
3,666,570
Less amounts representing interest (296,570)
Outstanding balance $3.370.000
The following is a summary of changes in the general long-term debt of the Corporation
for the year ended June 30, 2001:
Balance at Balance at
July 1,2000 Additions Reductions June 30,2001
Refunding Certificates of
Participation (Hosp Grove
Project) Series 1997 $5,570,000 - (515,000) 5,055,000
1997 Water Revenue
Certificates of Participation
(1988 Refunding Project) 4,410,000 (1,040,000) 3,370,000
$9.980.000 - (1.555.000) 8.425.000
(5) Rate Covenants
The 1997 Water Revenue Certificates of Participation require that the District set its
charges for services each year at rates sufficient to produce net revenues (after paying the
operating and maintenance expenses of the District, excluding depreciation) at least 1.15
times the debt service for that year.
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Notes to Financial Statements
(Continued)
(6) Fund Balances
The reserve for debt service represents resources legally restricted to the payment of
general long-term debt principal and interest maturing in future years.
10
SUPPLEMENTAL DATA
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Combining Balance Sheet - Debt Service Funds
June 3 0,2001
Assets
Cash and investments held by the City
Cash and investments held by trustee
Net investment in direct financing lease
Interest receivable
Total assets
Hosp Grove
Lease
Payment
$ 361,336
2,452
4,016,212
$4.380.000
Reserve
659,500
15,500
Carlsbad Municipal
Water District
Lease
Payment Reserve
979 761,313
2,600,876
6,832
Total
361,336
1,424,244
6,617,088
22,332
2.601.855 768.145 8.425.000
Liabilities and Fund Balances
Liabilities:
Deferred revenue
Total liabilities
Fund balances:
Reserved for debt service
Total fund balances
Total liabilities and fund balances $4.380.000
$4,016,212
4,016,212
363,788
363,788
$4.380.000
-
675,000
675,000
675.000
2,600,876
2,600,876
979
979
2.601.855
-
768,145
768,145
768.145
6,617,088
6,617,088
1,807,912
1,807,912
8.425.000
11
CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances - Debt Service Funds
Year Ended June 30, 2001
Revenues:
Lease payments
Interest on investments
Total revenues
Expenditures:
Principal
Interest
Administrative expenses
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financial sources (uses):
Operating transfers in
Operating transfers out
Total other financing sources
(uses)
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures and
other financing uses
Fund balances at beginning of year
Fund balances at end of year
Hosp Grove
Lease
Payment Reserve
515,000
233,655
2,235
750,890
Carlsbad Municipal
Water District
Lease
Payment Reserve Total
$800,000 - 1,185,217 - 1,985,217
26,104 18,697 1,012 42,104 87,917
826,104 18,697 1,186,229 42,104 2,073,134
1,040,000
187,650
1,227,650
1,555,000
421,305
2,235
1,978,540
75,214 18,697 (41,421) 42,104 94,594
18,697 - 41,410 - 60,107
_^ (18,697) - (41,410) (60,107)
18,697 (18,697) 41,410 (41,410)
93,911
269,877 675,000
S363.788 675.000
(11) 694 94,594
990 767,451 1,713,318
979 768.145 1.807.912
12
ENCINA FINANCING JOINT POWERS AUTHORITY
Financial Statements and Supplementary Information
Year Ended June 30,2001
(With Independent Auditors' Report Thereon)
r
CONFIAD AND
ASSOCIATES, LLR CERTIFIED PUBLIC ACCOUNTANTS
ENCINA FINANCING JOINT POWERS AUTHORITY
Financial Statements and Supplementary Information
Year Ended June 30,2001
TABLE OF CONTENTS
Page
Independent Auditors' Report 1
Combined Balance Sheet - Governmental Fund Type and Account Group 2
Combined Statement of Revenues, Expenditures and Changes in
Fund Balances - Debt Service Funds 3
Notes to Financial Statements 4
Supplementary Information:
Combining Balance Sheet - Debt Service Funds 9
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances - Debt Service Funds 10
CONRAD AND CERTIFIED PUBLIC ACCOUNTANTS
ASSOCIATES, L.L.R 1100 MAIN STREET, SUITE C
IRVINE, CALIFORNIA 92614
(949) 474-2020
Fax (949) 263-5520
Board of Directors
Encina Financing Joint Powers Authority
Carlsbad, California
Independent Auditors' Report
We have audited the accompanying combined financial statements of the Encina Financing Joint
Powers Authority (the Authority) as of and for the year ended June 30, 2001, as listed in the
accompanying table of contents. These combined financial statements are the responsibility of
the Authority's management. Our responsibility is to express an opinion on these combined
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America. 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 combined financial statements referred to above present fairly, in all material
respects, the financial position of the Encina Financing Joint Powers Authority as of June 30,
2001, and the results of its operations for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the combined financial statements
taken as a whole. The supplementary information listed in the accompanying table of contents is
presented for purposes of additional analysis and is not a required part of the combined financial
statements of the Encina Financing Joint Powers Authority. Such information has been
subjected to the auditing procedures applied in the audit 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.
'£••*
September 7, 2001
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
ENCINA FINANCING JOINT POWERS AUTHORITY
Combined Balance Sheet-
Governmental Fund Type and Account Group
June 30,2001
Assets
Governmental
Fund Type
Debt Service
Investments held by trustee (note 2) $ 1,608,421
Interest receivable 36,612
Installment sale receivable (note 3) 15,725,000
Amount available in debt service funds
for retirement of revenue bonds
Amount to be provided for retirement
of revenue bonds
Account Group
General
Long-Term Totals
Debt (Memorandum Only)
1,608,421
36,612
15,725,000
Total assets $17.370.033
1,645,033
14,079,967
15.725.000
1,645,033
14,079,967
33.095.033
Liabilities and Fund Balances
Liabilities:
Revenue bonds payable (note 3)
Deferred revenue (note 3)
Total liabilities
Fund balances:
Reserved for debt service (note 4)
Total fund balances
$
15,725,000
15,725,000
1,645,033
1,645,033
$17.370.033
15,725,000
15,725,000
15.725.000
15,725,000
15,725,000
31,450,000
1,645,033
1,645,033
33.095.033
See accompanying notes to financial statements.
ENCINA FINANCING JOINT POWERS AUTHORITY
Combined Statement of Revenues, Expenditures and Changes in Fund Balances -
Debt Service Funds
Year Ended June 30,2001
t
Revenues:
Installment payments from members
Interest on investments
Total revenues
Expenditures:
Debt service:
Principal
Interest
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Total other financing sources (uses)
Excess (deficiency) of revenues and
other financing sources over (under)
expenditures and other financing uses
Fund balances at beginning of year
Fund balances at end of year
Debt Service
$1,499,061
87,959
1,587,020
775,000
810,716
1,585,716
1,304
87,935
(87,935)
1,304
1,643,729
$1.645.033
See accompanying notes to financial statements.
ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
Year Ended June 30,2001
(1) Summary of Significant Accounting Policies
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) Description of Reporting Entity
The Encina Financing Joint Powers Authority (the Authority) was created on
February 1, 1989 by the Buena Sanitation District, the City of Carlsbad, the
Leucadia Water District, and the City of Vista. The purpose of the Authority was
to issue revenue bonds in order to acquire additional capacity for the Encina
Water Pollution Control Facility (Facility) and to finance any other authorized
costs. The Authority is governed by a Board of Directors which consists of one
director appointed by each member. Action can be taken at any meeting of the
Board by the vote of any three directors. The Authority is not subject to federal or
state income taxes. From time to time, the Authority will issue debt on behalf of
those members wishing to participate in the financing.
(b) Fund Accounting
The basic accounting and reporting entity is a "fund." A fund is defined as an
independent fiscal and accounting entity with a self-balancing set of accounts,
recording resources, related liabilities, obligations, reserves and equities
segregated for the purpose of carrying out specific activities or attaining certain
objectives in accordance with special regulations, restrictions, or limitations.
The accounting records of the Authority are organized on the basis of funds and
an account group classified for reporting purposes as follows:
Governmental Funds
The Debt Service Fund is used to account for the accumulation of resources for,
and the payment of, general long-term debt, principal, interest and related costs.
Account Group
The General Long-Term Debt Account Group is used to establish accountability
for the Authority's general long-term debt. It is used to account for all long-term
obligations of the Authority.
ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(c) Measurement Focus and Basis for Accounting
Governmental fund types are accounted for on an "expendable" measurement
focus. Accordingly, only current assets and current liabilities are generally
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. 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) Budgets
The Authority does not adopt an annual budget, therefore, no budgetary
comparisons are presented.
(e) Cash and Investments
Investments are reported in the accompanying balance sheet at fair value, except
for certain certificates of deposit and investment contracts that are reported at cost
because they are not transferable and they have terms that are not affected by
changes in market interest rates.
Changes in fair value that occur during a fiscal year are recognized as interest on
investments reported for that fiscal year. Interest on investments includes interest
earnings, changes in fair value, and any gains or losses realized upon the
liquidation, maturity, or sale of investments.
(f) 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 balance 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.
ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
(2) Investments Held By Trustee
Authority for Investments
The Trust Agreement by and among State Street Bank and Trust Company of California,
as Trustee, and the Authority dated February 1, 1997 authorizes the trustee to invest in
U.S. Treasury Securities, U.S. Agency Securities, interest-bearing demand or time
deposits, money market funds rated AAAm, AAAm-G or better by Standard & Poor's
Corporation, commercial paper rated A-1+ by Standard and Poor's Corporation and P-l
by Moody's Investors Service with original maturities of not more than 270 days, bankers
acceptances rated A-l or A-1+ by Standard & Poor's Corporation and P-l by Moody's
Investors Service with maturities of not more than 180 days, certain municipal
obligations, as defined in the Trust Agreement, and investment agreements approved by
AMBAC Indemnity Corporation with notice to Standard and Poor's.
Classification of Investments by Credit Risk
As defined in Governmental Accounting Standards Board Statement No. 3, investments
in securities are categorized in the following manner:
Category 1 - Investments that are insured or registered, which 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 counterparty's trust department or its agent in the Authority's name.
Category 3 - Uninsured and unregistered investments, for which the securities are held
by the counterparty's trust department or its agent, but not in the Authority's name.
As of June 30, 2001, the Authority had $1,831 invested in mutual funds and $1,606,590
invested in a guaranteed investment contract which are not categorizable by credit risk.
(3) Waste water Revenue Bonds
In February 1997, the Authority issued Wastewater Revenue Refunding Bonds, 1997
Series A to refund the remaining balance of outstanding Revenue Bonds, 1989 Series A
bonds. The 1997 Refunding Bonds bear interest with rates ranging from 4.0% to 5.5%.
ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
(3) Wastewater Revenue Bonds, (Continued)
The following is a table of the outstanding balance owed on the 1997 Refunding Bonds as
of June 30, 2001:
Installment Approximate
Member Balance Share
City of Carlsbad $ 9,350,000 59.45%
Leucadia Water District 6,375,000 40.55%
$15.725.000
Covenants within the Installment Purchase Agreements require the members to, among
other things, (1) maintain insurance on the facility, and (2) establish wastewater rates
which are sufficient to pay the operating costs and debt service on the bonds and which
will result in net revenues equal to at least 125% of the annual installment payments due.
In addition, under the debt agreements, the Authority must maintain reserve funds equal
to the lesser of the maximum annual debt service on the bonds or 10% of the original
principal amount of the bonds.
Required sinking fund payments begin in 2011. These payments are reflected in the
following schedule:
Year ending June 30,
2002 $ 1,582,328
2003 1,577,067
2004 1,575,053
2005 1,580,177
2006 1,572,828
2007-2011 7,855,863
2012-2015 6,258,600
22,001,916
Less amounts representing interest (6,276,916)
Outstanding balance $15.725.000
ENCINA FINANCING JOINT POWERS AUTHORITY
Notes to Financial Statements
(Continued)
(3) Wastewater Revenue Bonds, (Continued)
The following is a summary of changes in the general long-term debt of the Authority for
the year ended June 30, 2001:
Balance at Balance at
July 1,2000 Additions Reductions June 3 0,2001
Wastewater Revenue Bonds $16.500.000 - 775.000 15.725.000
(4) Reserves for Debt Service
The reserves for debt service represent resources legally restricted to the payment of
general long-term debt principal and interest maturing in future years.
SUPPLEMENTARY INFORMATION
ENCINA FINANCING JOINT POWERS AUTHORITY
Debt Service Funds
Combining Balance Sheet
June 3 0,2001
Assets
Investments held by trustee
Interest receivable
Installment sale receivable
Total assets
City of Carlsbad Leucadia County Water District
Debt Payment Reserve Debt Payment Reserve Total
$
9,350,000
$9.350.000
954,364
21,725
976.089
6,375,000
6.375.000
654,057 1,608,421
14,887 36,612
- 15,725,000
668.944 17.370.033
Liabilities and Fund Balances
Liabilities:
Deferred revenue $9,350,000
Fund balances:
Reserved for debt service -
Total liabilities
and fund balances $9.350.000
976,089
6,375,000
976.089 6.375.000
15,725,000
668,944 1,645,033
668.944 17.370.033
ENCINA FINANCING JOINT POWERS AUTHORITY
Debt Service Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Year Ended June 30, 2001
City of Carlsbad Leucadia County Water District
Revenues:
Installment payments
from members
Interest on investments
Total revenues
Expenditures:
Debt service:
Principal
Interest
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Operating transfers in
Operating transfers out
Total other financing
sources (uses)
Excess (deficiency)
of revenues and
other financing
sources over (under)
expenditures and
other financing uses
Fund balances at beginning of year
Fund balances at end of year
Debt Payment
$890,560
170
890,730
460,000
482,026
942,026
(51,296)
51,467
(171)
51,296
ear
$ -
Reserve Debt Payment
608,501
51,439 1,108
51,439 609,609
315,000
328,690
643,690
51,439 (34,081)
171 35,189
(51,467) (1,108)
(51,296) 34,081
143
975,946
976.089
Reserve Total
1,499,061
35,242 87,959
35,242 1,587,020
775,000
810,716
1,585,716
35,242 1,304
1,108 87,935
(35,189) (87,935)
(34,081)
1,161 1,304
667,783 1,643,729
668.944 1.645.033
10
r
CONRAD AND
CITY OF CARLSBAD
Carlsbad, California
Single Audit Report on
Federal Award Programs
Year ended June 30, 2001
ASSOCIATES, M-R CERTIFIED PUBLIC ACCOUNTANTS
CITY OF CARLSBAD
Single Audit Report on Federal Award Programs
Year ended June 30, 2001
TABLE OF CONTENTS
Report on Compliance and on Internal Control over Financial
Reporting Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 1
Report on Compliance with Requirements Applicable to Each
Major Program, Internal Control over Compliance and on the
Schedule of Expenditures of Federal Awards in Accordance with OMB
Circular A-133 2
Schedule of Expenditures of Federal Awards 4
Notes to Schedule of Expenditures of Federal Awards 5
Financial Data Schedule 6
Schedule of Findings and Questioned Costs 10
Summary Schedule of Prior Audit Findings 11
CONRAD AND CERTIFIED PUBLIC ACCOUNTANTS
1 100 MAIN STREET, SUITE c
IRVINE, CALIFORNIA 9261 4
(949) 474-2020
Fax (949) 263-5520
L.L.P
The Honorable Members of City Council
City of Carlsbad
Carlsbad, California
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL
REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
We have audited the financial statements of the City of Carlsbad (City) as of and for the year
ended June 30, 2001, and have issued our report thereon dated September 21, 2001. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States of America.
Compliance
As part of obtaining reasonable assurance about whether the City's financial statements are free
of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grants, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit and, accordingly, we do not
express such an opinion. The results of our tests disclosed no instances of noncompliance that are
required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial
reporting in order to determine our auditing procedures for the purpose of expressing our opinion
on the financial statements and not to provide assurance on the internal control over financial
reporting. Our consideration of the internal control over financial reporting would not
necessarily disclose all matters in the internal control over financial reporting that might be
material weaknesses. A material weakness is a condition in which the design or operation of one
or more of the internal control components does not reduce to a relatively low level the risk that
misstatements in amounts that would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by employees in the normal course
of performing their assigned functions. We noted no matters involving the internal control over
financial reporting and its operation that we consider to be material weaknesses.
This report is intended for the information of the City's management and federal awarding
agencies and pass-through entities and is not intended to be and should not be used by anyone
other than these specified parties.
September 21,2001
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
CONRAD AND CERTIFIED PUBLIC ACCOUNTANTS
ASSOCIATES, L.L.R 1100 MAIN STREET, SUITE C
IRVINE, CALIFORNIA 92614
(949) 474-2020
Fax (949) 263-5520
The Honorable Members of City Council
City of Carlsbad
Carlsbad, California
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH
MAJOR PROGRAM, INTERNAL CONTROL OVER COMPLIANCE AND ON
THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS IN ACCORDANCE
WITH OMB CIRCULAR A-133
Compliance
We have audited the compliance of the City of Carlsbad (City) with the types of compliance
requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that are applicable to each of its major federal programs for the year
ended June 30, 2001. The City's major federal programs are identified in the summary of
auditor's results section of the accompanying schedule of findings and questioned costs.
Compliance with the requirements of laws, regulations, contracts and grants applicable to each of
its major federal programs is the responsibility of the City's management. Our responsibility is
to express an opinion on the City's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted
in the United States of America; the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States of
America; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations. Those standards and OMB Circular A-133 require that we plan and perform the
audit to obtain reasonable assurance about whether noncompliance with the types of compliance
requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the City's
compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion. Our audit does not provide a legal determination on the City's compliance with those
requirements.
In our opinion, the City complied, in all material respects, with the requirements referred to
above that are applicable to each of its major federal programs for the year ended June 30, 2001.
Internal Control Over Compliance
The management of the City is responsible for establishing and maintaining effective internal
control over compliance with requirements of laws, regulations, contracts and grants applicable
to federal programs. In planning and performing our audit, we considered the City's internal
control over compliance with requirements that could have a direct and material effect on a major
federal program in order to determine our auditing procedures for the purpose of expressing our
opinion on compliance and to test and report on internal control over compliance in accordance
with OMB Circular A-133.
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
The Honorable Members of City Council
City of Carlsbad
Page Two
Our consideration of the internal control over compliance would not necessarily disclose all
matters in the internal control that might be material weaknesses. A material weakness is a
condition in which the design or operation of one or more of the internal control components
does not reduce to a relatively low level the risk that noncompliance with applicable
requirements of laws, regulations, contracts and grants that would be material in relation to a
major federal program being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We noted no matters
involving the internal control over compliance and its operation that we consider to be material
weaknesses.
Schedule of Expenditures of Federal Awards and Financial Data Schedule
We have audited the financial statements of the City as of and for the year ended June 30", 2001,
and have issued our report thereon dated September 21, 2001. Our audit was performed for the
purpose of forming an opinion on the financial statements taken as a whole. The accompanying
schedule of expenditures of federal awards and financial data schedule are presented for purposes
of additional analysis as required by OMB Circular A-133 and are not a required part of the
financial statements. Such information has been subjected to the auditing procedures applied in
the audit of the financial statements and, in our opinion, is fairly stated, in all material respects,
in relation to the financial statements taken as a whole.
This report is intended for the information of the City's management and federal awarding
agencies and pass-through entities and is not intended to be and should not be used by anyone
other than these specified parties.
September 21,2001
CITY OF CARLSBAD
Schedule of Expenditures of Federal Awards
Year ended June 30, 2001
Federal Grantor/
Pass-through Grantor/
Program Title
U.S. Department of Housing and Urban
Development:
Direct Assistance:
Section 8 Housing Certificate Program
Section 8 Housing Voucher Program
Community Development Block Grant
Subtotal
U.S. Department of Health and Human Services:
Pass-through the County of San Diego:
Senior Nutrition Program
U.S. Department of Agriculture:
Pass-through the County of San Diego:
Senior Nutrition Program
Direct Assistance:
Cooperative Forestry Assistance
Subtotal
U.S. Department of Justice:
Direct Assistance:
Law Enforcement Block Grant
Police Asset Forfeiture
Subtotal
U.S. Department of Transportation:
Pass-through the California
Department of Transportation:
Intermodal Surface Transportation
Efficiency Act - Bike Lanes
Total federal financial expenditures
* Major program.
Catalog of
Federal
Domestic
Assistance
Number
93.045
10.558
10.664
16.592
16.000
20.205
Program
Identification
Number
Federal Amount
Assistance Provided to
Expenditures Subrecipients
14.857
14.855
14.218
CA077CE
CA077VO
B93MC060563
248,427 *
2,936,861 *
524,193 *
3,709,481
-
-
213,757
213,757
34111
34111
96-LB-VX-2303
11-119914
22,140
88,575
90,810
179,385
79,929
53,927
133,856
17,008
4,061,870 213,757
See accompanying notes to schedule of expenditures of federal awards.
CITY OF CARLSBAD
Notes to the Schedule of Expenditures of Federal Awards
Year ended June 30, 2001
(1) Summary of Significant Accounting Policies Applicable to the Schedule of Expenditures
of Federal Awards
(a) Scope of Presentation
The accompanying schedule presents only the expenditures incurred by the City of
Carlsbad (City) that are reimbursable under programs of federal agencies providing
financial assistance. For the purposes of this schedule, financial assistance includes
both federal financial assistance received directly from a federal agency, as well as
federal funds received indirectly by the City from a non-federal agency or other
organization. Only the portion of program expenditures reimbursable with such
federal funds are reported in the accompanying schedule. Program expenditures in
excess of the maximum federal reimbursement authorized or the portion of the
program expenditures that were funded with state, local or other non-federal funds
are excluded from the accompanying schedule.
(b) Basis of Accounting
The expenditures included in the accompanying schedule were reported on the
modified accrual basis of accounting. Under the modified accrual basis of
accounting, expenditures are incurred when the City becomes obligated for payment
as a result of the receipt of the related goods and services. Expenditures reported
included any property or equipment acquisitions incurred under the federal program.
(c) Subrecipients
During the fiscal year ended June 30, 2001, the City disbursed $213,757 of its
Community Development Block Grant to various subrecipients to be used for the
allowable expenditures as provided in the grant agreement.
FINANCIAL DATA SCHEDULE
CITY OF CARLSBAD
Schedule of Findings and Questioned Costs
Year ended June 30, 2001
(A) Summary of Auditors' Results
1. An unqualified report was issued by the auditors on the financial statements of the
auditee.
2. There were no material weaknesses in internal control over financial reporting nor
were there any reportable conditions, based upon our audit of the financial
statements of the auditee.
3. The audit disclosed no noncompliance which is material to the financial statements
of the auditee.
4. There were no material weaknesses or other reportable conditions in internal control
over major programs of the auditee.
5. An unqualified report was issued by the auditors on compliance for major programs.
6. The audit disclosed no audit findings required by the auditors to be reported under
paragraph .510(a) of OMB Circular A-133.
7. The major programs of the auditee were CFDA No. 14.857 and 14.855 U.S.
Department of Housing and Urban Development - Section 8 Housing Certificate and
Voucher programs and CFDA No. 14.218 U.S. Department of Housing and Urban
Development Community Development Block Grant program. As of April 1, 2001,
CFDA No. 14.857 and CFDA No. 14.855 were consolidated into CFDA No. 14.871.
8. The dollar threshold used to distinguish Type A and Type B programs was $300,000.
9. The auditee was considered to be a low risk auditee for the year ended June 30, 2001
for major program determination.
(B) Findings Related to the Financial Statements which are Required to be Reported in
Accordance with GAGAS
There were no auditors' findings required to be reported in accordance with GAGAS.
(C) Findings and Questioned Costs for Federal Awards as Defined in Paragraph .510(a) of
OMB Circular A-133
There were no auditors' findings required to be reported in accordance with paragraph
.510(a) of OMB Circular A-133.
10
CITY OF CARLSBAD
Summary Schedule of Prior Audit Findings
Year ended June 30,2001
5
There were no prior year audit findings.
11