HomeMy WebLinkAbout; ; 2001-2002 CAFR; 2002-06-30COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FISCAL YEAR ENDED
JUNE 30, 2002
1635 Faraday Avenue, Carlsbad, CA 92008
Website: www. ci. carlsbad. ca. us
Prepared by the Finance Department
Cover Photo: The recently completed Faraday Avenue extension from College Boulevard to
Cannon Road.
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2002
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION:
Table of Contents i
City Council's Five-Year Vision Statements 1
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting, Government Finance Officers
Association 9
Certificate of Award for Outstanding Financial Reporting, California Municipal Finance Officers 10
Location Map 11
List of City Officials 12
Organization Chart 13
FINANCIAL SECTION:
Independent Auditor's Report 15
Management's Discussion and Analysis 17
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Assets 30
Statement of Activities 32
Fund Financial Statements:
Balance Sheet - Governmental Funds 34
Reconciliation of the Balance Sheet of Governmental Funds to the Statement
of Net Assets 36
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds 38
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 40
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget to Actual - General Fund 42
Statement of Net Assets - Proprietary Funds 44
Statement of Revenues, Expenses and Changes in Net Assets - Proprietary Funds 48
Statement of Cash Flows - Proprietary Funds 50
Statement of Fiduciary Net Assets - Agency Funds 54
Notes to the Financial Statements 55
Supplementary Information
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds 86
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds 90
Combining Schedule of Revenues and Expenditures - Budget and Actual
(Budgetary Basis) - Special Revenue Funds 94
Combining Schedule of Revenue and Expenditures - Budget and Actual
(Budgetary Basis) - Debt Service Funds 96
Combining Statement of Net Assets - Internal Service Funds 98
Combining Statement of Revenues, Expenses and Changes in Net Assets -
Internal Service Funds 100
Combining Statement of Cash Flows - Internal Service Funds 102
Schedule of Annual Debt Service Requirements 106
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2002
TABLE OF CONTENTS (CONTINUED)
Page
STATISTICAL SECTION:
(Not covered by Independent Auditor's Report)
Government-wide Information:
Government-wide Expenses by Function 112
Government-wide Revenues 114
Fund Information:
General Governmental Expenditures by Function - Last Ten Fiscal Years 116
General Governmental Revenues by Source - Last Ten Fiscal Years 118
Computation of Legal Debt Margin 120
Schedule of Direct and Overlapping Bonded Debt 121
Construction and Business Activity - Last Ten Fiscal Years 122
Water Enterprise - Revenue Bond Coverage - Last Ten Fiscal Years 123
Schedule of Assessed Valuation - Last Ten Fiscal Years 124
Demographic Statistics - Last Ten Fiscal Years 126
Property Tax Levies and Collections - Last Ten Fiscal Years 127
Principal Employers, 2001 - 2002 128
Principal Taxpayers, 2001 - 2002 129
Top 30 Sales Tax Generators, 2001 - 2002 130
Miscellaneous Statistical Information, 2001 - 2002 131
INTRODUCTORY SECTION
Carlsbad City Council
Year 2002
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 21,2002
Honorable Mayor, City Council,
and Citizens of the City of Carlsbad
CITY OF CARLSBAD
Carlsbad, California
LETTER OF TRANSMITTAL
2001-2002 COMPREHENSIVE ANNUAL FINANCIAL REPORT
We are pleased to present the 2001-2002 Comprehensive Annual Financial Report of the City of Carlsbad. This
report is presented in three parts:
1. Introductory Section - Provides the background and context so that the reader can fully understand the
information included in the rest of the report. The introductory section includes this transmittal letter, the
City's organizational chart, awards and recognitions given the City for its financial reporting, and other
relevant information.
2. Financial Section - Contains the basic financial statements for the City as well as other financial
information necessary for the reader to assess the financial position of the City. This section also includes
the audit report from the independent auditing firm of McGladrey & Pullen, LLP.
3. Statistical Section - Provides a broad range of trend data covering key financial indicators from the past
ten fiscal years, as well as demographic and miscellaneous data about the City. This information is
provided to assist the reader in more fully understanding the financial condition of the City.
This year's report has been reformatted to comply with the new financial reporting model developed by the
Governmental Accounting Standards Board (GASB). The objective of the new model is to enhance the
understandability and usefulness of the financial reports of state and local governments. Some of the more
significant changes that you will see in the report include:
• Government-wide Financial Statements - These are the first two financial statements in the report and provide
the reader a broad overview of the financial position and activities of the City.
• Reporting of Infrastructure Assets - On the Government-wide Financial Statements you will notice a line item
for infrastructure assets. These are assets such as streets, traffic signals, storm drains, etc., that were not
previously shown on the books and records of the City. In this financial report, only assets acquired during the
fiscal year are shown. Over the next several years, the City will be accumulating data about the assets acquired
in earlier years and will include them in the financial statements as well. This will allow the reader of the
financial statements to understand the cost of the assets and allow the City to reflect the use of these assets in its
financial statements.
• Change in Budgetary Data - In the past, budgetary comparisons between the final amended budget and the
actual amounts have been shown. The new model now presents not only the final amended budget, but also the
original adopted budget for certain funds. This will provide the reader with more information on the changes in
the budget during the year.
A number of other changes have also been incorporated in this year's Financial Report. These are discussed in more
detail in Management's Discussion and Analysis in the Financial Section of the report.
1635 Faraday Avenue • Carlsbad, CA 92OO8-7314 • (76O) 6O2-2430 • FAX (76O) 6O2-8553
www.ci.carlsbad.ca.us • Business License (76O) 602-2495 • Utility Billing (760) 6O2-242O
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, 2002. Responsibility for both the accuracy
of the data and the completeness and reliability of the presentation, including all disclosures, rests with City
management. To provide a reasonable basis for making these representations, management of the City has
established a comprehensive internal control framework designed both to protect the City's assets from loss, theft, or
misuse and to compile sufficient reliable information for the preparation of the City's financial statements in
conformity with generally accepted accounting principles (GAAP).
Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of
internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements
will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this
report is complete and reliable in all material respects.
Also, as a recipient of federal and state financial assistance, the City is required to have a "Single Audit" performed
by our independent audit firm. The Single Audit was designed to meet the special needs of federal grantor agencies.
The standards governing Single Audit engagements require that the independent auditor report not only on the fair
presentation of the financial statement, but also on the audited government's internal controls and compliance with
legal requirements, with special emphasis on internal controls and legal requirements involving the administration of
federal awards. These reports are available in the City's separately issued Single Audit Report. The results of the
City's Single Audit for the fiscal year ended June 30, 2002 noted no material weaknesses in the framework of
internal controls or significant violations of applicable laws and regulations.
PROFILE OF THE CITY OF CARLSBAD
Carlsbad incorporated in 1952 as a General Law city, although its "village" area dates back more than 100 years. 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 City 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 approximately 42 square miles and has a
population of 88,000, with an expected build-out population of
120,000 residents. Industries in the area include a major
regional shopping center; a specialty outlet center; 19 auto
dealers; 30 hotels offering 3,400 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 conducive to attracting new businesses and residents.
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. Through
these entities, Carlsbad is able to provide the following services to its citizens and customers
Police department
Development services
Fire 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 City Council recognizes the
importance of quality school facilities and programs to Carlsbad's residents. The City Council has worked closely
with the schools in the past to provide assistance, when possible.
Budget Process
The Carlsbad Municipal Code requires that
the City Manager annually propose a budget
for the City Council with a message
describing important features, and be
responsible for the budget's administration
after adoption. The budget process begins
in January each year with a review and
update of the City Council's five-year vision
statements and strategic goals for the City.
The goals outline the methods used to
achieve the vision and call out areas upon
which the City Council would like to place
special emphasis during the year. Once
these are developed, staff develops
operational goals based on the City
Council's direction. These operational
goals are the basis for the development of
the annual budget.
Budgetary control for the City is maintained
through its accounting systems. The City
Council adopts the formal budget at the
beginning of each year and may amend it
throughout the year as necessary.
Expenditures may not exceed budgeted
figures at the fund level. Monthly reports
summarizing the results of operations for
the City's more significant funds are
provided to the City Council.
City of Carlsbad 2001 Strategic Goals
Top Quality Services — Become a City that provides exceptional
services on a daily basis.
Transportation — Provide and maintain a multi-modal transportation
system that moves goods, services, and people throughout Carlsbad in a
safe and efficient manner that is coordinated with community
development.
Quality of Life/Community Development — Develop a community
that promotes quality neighborhoods, established compatible
entertainment and commercial venues, and manages growth by providing
an appropriate balance of facilities and services.
Parks - Provide Parks and Recreation facilities to meet growth
management standards and actively address the priorities of the citizens
of Carlsbad within the CIP budget.
Water- Ensure a 90% reliable, high-quality, diversified water system in
the most cost-effective manner.
Environmental Management - Promote a clean, pollution-free,
resource-conscious environment.
Finance - Implement proactive strategies that provide and manage the
necessary resources to ensure a high quality of life.
Communication — Ensure that citizens, staff, and Council are well
informed, leading to a more responsive government and a higher level of
confidence.
Open Space/Trails - Preserve, enhance, and manage an Open Space
and Citywide Trail System that incorporates a comprehensive HMP.
Learning — Promote and support continuous learning opportunities
within the community and the City organization.
FACTORS AFFECTING FINANCIAL CONDITION
Economic Profile
Diversification of San Diego County's employment base after the recession of the early 1990's has helped the region
to weather the recent recession without significant adverse effects so far. The leading indicators for the San Diego
region declined in May 2002 (the most recent data available) for the second month in a row after it had risen in each
of the four previous months. This indicates that the pace of the recovery may be a little slower than originally
anticipated. The indicators are published by the University of San Diego School of Business Administration and
according to their report, "The long-term outlook remains for an eventual return to strong growth in the local
economy. However, the negative moves in the last two months is an indication that it may take longer than expected
for the local economy to hit full stride, with a full recovery probably being pushed back until the end of the year and
some rough spots in the months ahead."
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 this
sector.
In Carlsbad, the number of permits issued in fiscal year 2001-2002 dropped in half; however, most of the decline
was due to a lack of supply rather than a lack of demand. With supply relatively low, housing prices have continued
to escalate. Median prices for single-family
homes averaged $425,000 for calendar year
2001, a 12% increase from the previous year.
Total assessed values in the City stand at over
$ 13 billion, double what they were just five
years ago.
City of Carlsbad
Median SFD Home Prices
$450
£ $400
$ $350
J $300
.c $250
£ $200W
3 $150Q
$100
$50
$0
1996 1997 1998 1999 2000 2001
The City's residential housing stock is about
80% built out, with approximately 10,000
housing units remaining to develop over the
next 20 years. Although the accelerated pace
is expected to level out over the next few
years, the City still expects to add about
4,600 more residential units in the next five
years.
Carlsbad, like the region, has benefited from
diversification of its employment base and its
sources of revenue. Commercial and industrial development is an indicator of job growth in the City. Carlsbad has
been generating approximately 1,000 new jobs each year for the past five years. Some of the major businesses in the
City include the Gemological Institute of America, ViaSat, Invitrogen, Callaway, Taylor Made, Upper Deck, and
many others. Although commercial and industrial development has slowed over the past year, it is expected that an
additional 4.5 million square feet of commercial/industrial development will occur over the next five years.
Tourism is also one of Carlsbad's major industries and major sources of revenue. The City is host to Legoland, a
family theme park, and has two luxury resorts available for its visitors, the Four Seasons Resort at Aviara and the La
Costa Resort and Spa, as well as numerous other quality hotels and motels. Tourism in Carlsbad, as in the rest of
the state, declined significantly following the terrorist attacks of September 11, 2001, but is expected to recover over
the next year to about the same level as in 2000-2001. Carlsbad's prime coastal location, its two premier resort
hotels, Legoland, the airport, and its many businesses make it a popular destination for both leisure and business
travelers.
Despite the evidence of a recovery on the way, it does not look as if it will happen soon enough to help the State of
California through its budgetary woes. The May revision of the Governor's 2002-2003 budget reports a projected
$23.6 billion deficit through the 2002-2003 fiscal year, or 30% of the State's General fund. While it is difficult to
tell what will be the ultimate impact on the City, the last recession has demonstrated that if the State experiences
budget shortfalls, it is likely that the City of Carlsbad's revenues will also be impacted.
During a similar situation in the early 1990's, the State redirected over $2.5 million of City revenues to the State.
The situation over the next year or two at the State level promises to be a difficult one that could have an adverse
impact on the City's future revenues.
Long-Term Financial Planning
It is the City Council's goal to ensure that the City remains in good financial health, and the City has taken a number
of steps to attain that goal. One of these is the Growth Management Plan. This plan was adopted by the citizens to
ensure that all necessary public facilities were constructed along with development. It also ensures that a financing
plan is in place to pay for the facilities prior to the development of the property.
In addition to the Growth Management Plan, the City also prepares a long-term financial model for both the capital
and operating needs of the City. With a growing city such as Carlsbad, it is imperative that we plan for the impacts
of serving new development and operating new public facilities, as well as planning for the capital needed to build
them. Therefore, the City prepares a ten-year operating forecast for the General fund, and a 20+-year Capital
Improvement Program. As part of the Capital Improvement Program, the City annually calculates the amounts
needed to pay for the various projects and calculates the anticipated operating budget impacts. In this way, we can
anticipate the effects of development from both a capital and an operating perspective.
One of the newer initiatives that the City has undertaken to ensure its financial health is the development of an
Infrastructure Replacement fund. With this fund, the City has begun to set aside money on an annual basis for major
maintenance and replacement of its infrastructure. Much of the City's infrastructure is relatively new; therefore, the
City has not felt the full impact of maintenance. By setting aside funds now, the citizens of Carlsbad can be assured
that the proper maintenance and replacement, when needed, will be performed on streets, parks, and the many
facilities for which the City is responsible.
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. The 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 include the
inactive cash of agencies controlled by the City and the various funds of those agencies. Investments held separately
generally include bond proceeds and other funds, which are individually invested.
Pooled investments generally include federal agencies, corporate notes, and investments in the State Treasurer's
investment pool. The average life of the investments in the City's investment pool as of June 30, 2002 was 1.2 years,
with a modified duration of 1.06. The average return on the pooled investments for fiscal year 2001-2002 was
5.28%.
Investment income includes appreciation on the fair value of investments. Increases or declines in fair value during
the current year, however, do not necessarily represent trends that will continue, nor is it always possible to realize
such amounts, especially in the case of temporary changes in the fair value of investments that the City intends to
hold to maturity. The majority of the City's investments are held to maturity.
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 maintains a combination of insurance
coverage and cash reserves to manage and finance its various types of risk. The City's self-insured retention for both
liability and Worker's Compensation insurance is $500,000. More information about the City's risk management
activity can be found in Note 14 of the notes to the financial statements.
Pension Benefits
The City of Carlsbad contributes to the California Public Employees' Retirement System (PERS), an agent multiple-
employer public employee defined benefit pension plan, for all of its full-time employees. PERS provides retirement
and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Each
year, an actuary engaged by PERS calculates the amount of the annual contribution that the City must make to the
pension plan to ensure that the plan will be able to fully meet its obligations to retired employees on a timely basis.
In June 2002, PERS circulated a letter to all of its member agencies advising them of the negative impact the
sluggish economy and the stock market decline would have on contribution rates for the next several years. The
latest information suggests that rates will increase by between 2% and 6% of pay for the 2002-2003 fiscal year and
by another 5% to 10% of pay for the following year. For more information on the funded status of the pension plans,
please read Note 20 of the notes to the financial statements.
AWARDS AND ACKNOWLEDGEMENTS
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, 2001. 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 its Comprehensive Annual
Financial Report for the fiscal year ended June 30, 2001. We believe our current report continues to conform to the
program requirements.
This report has been a joint effort by many people from many different areas of responsibility. It could not have been
accomplished without their help and the dedicated efforts of all of the accounting staff, especially Kevin Branca,
Assistant Finance Director, and Helga Stover, Senior Accountant. We also appreciate the staff of McGladrey &
Pullen, LLP for the professional way in which the audit of this financial report was conducted. It has been a pleasure
to work with them throughout this period. Additionally, we would like to thank the City Council and the City's
Leadership Team for their leadership and unfailing support for maintaining the highest standards of professionalism
in the management of the City of Carlsbad's finances.
Respectfully submitted,
LISA HILDABRAND
Finance Director
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, 2001
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.
President
Executive Director
California Society of
^Municipal finance Officers
Certificate of Award
Outstanding Financial Reporting 2000-2001
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 20, 2002
Chair, Professional & Technical Standards Committee
Dedicated to Excellence in Municipal Financial Management
10
SOLANA BEACH
DEL MAR I 1-5
11
CITY OF CARLSBAD
ELECTED CITY OFFICIALS
Claude A. "Bud" Lewis, Mayor
Ann J. Kulchin, Mayor Pro Tern
Ramona Finnila, Council Member
Matt Hall, Council Member
Julianne Nygaard, Council Member
Lorraine M. Wood, City Clerk
James M. Stanton, City Treasurer
ADMINISTRA TION 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
Kevin Crawford, Fire Chief
Ron Ball, City Attorney
Julie Clark, Human Resources Director
Douglas Duncanson, Deputy Public Works Director, General Services
Ruth Fletcher, Purchasing Officer
Debbie Fountain, Housing & Redevelopment Director
Robert J. Greaney, Deputy Public Works Director, Maintenance and Operations
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
Glenn Pruim, Deputy Public Works Director, Engineering Services
Aletha L. Rautenkranz, Information Systems Director
CHAIRPERSONS, COMMISSIONS AND BOARDS
Susan Pynes Arts Commission
Ed Andrews Beach Erosion Committee
Don Polese Community Television Foundation
Sarah Marquez Design Review Board
Sue Ladouceur Historic Preservation Commission
Edward Scarpelli Housing Commission
Claude A. Lewis Housing and Redevelopment Commission
William Kamenjarin Library Board of Trustees
William Scott Pieratt Parks and Recreation Commission
Norman Weiss Personnel Board
Seena Trigas Planning Commission
Arthur Wood Senior Commission
VACANT Serra Cooperative Library System Advisory Board
Leonard Martyns Sister City Committee
Jim Courtney Traffic Safety Commission
Steve Jantz Utility Coordinating Commission
12
CITY OF CARLSBAD ORGANIZATION CHART
Personnel i
Board '
Beach i
Erosion [
Committee i
Community i
Television [ —
Foundation i
Traffic i
Safety ]
Commission i
Underground i
Committee i
Design
Review
Board
Housing
Commission
Housing &
Redevelopment
Commission
Planning
Commission
i
L11
1
1
L1
1
1
1
L1
1
1
1
L1
1
PUBLIC
SAFETY
FIRE
POLICE
Arts
Commission
Sister City
Committee
Historic
Preservation
CommissionELECTORATE
Library Board
of
TrusteesMAYOR
&
COUNCIL
CITY
TREASURERCITY CUERK
Serra Cooperative
Library System
Advisory Board
Parks & Rec
Commission
CITY MANAGER CITY ATTORNEY
Senior
Commission
ADMINISTRATIVE
SERVICES
PUBLIC
WORKS
COMMUNITY
DEVELOPMENT
COMMUNITY
SERVICES
ADMINISTRATION
KEY
Elected
Council Appointed i - I
Staff Support
Reporting Relationship
Programs
<0
w
—
cn
HUMAN
RESOURCES
INFORMATION
TECHNOLOGY
PURCHASING
RISK
MANAGEMENT
RECORDS
MANAGEMENT
ENGINEERING
SERVICES
GENERAL
SERVICES
MAINTENANCE &
OPERATIONS
ECONOMIC
DEVELOPMENT
GEOGRAPHIC
INFO SYSTEMS
HOUSING AND
REDEVELOPMENT
PLANNING
LIBRARY
RECREATION
SENIOR
CENTER
14
FINANCIAL SECTION
MCGL ADREY&PULLEN, LLP
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
The Honorable Mayor and Members
of the City Council
City of Carlsbad
Carlsbad, California
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City of Carlsbad, California (the City), as of and for the year
ended June 30, 2002, which collectively comprise the City's basic financial statements as listed in the accompanying table of
contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an
opinion on these basic financial statements based on our audit.
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. 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 in the
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 financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund
information of the City of Carlsbad, California, as of June 30, 2002, and the respective changes in financial position and the
cash flows, where applicable, thereof and the respective budgetary comparison for the General fund for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated September 30, 2002 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.
As described in Note 1, the City has implemented a new financial reporting model, as required by the provisions of
Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements — and Management's
Discussion and Analysis -for State and Local Governments, as of June 30, 2002.
The management's discussion and analysis and supplementary information on pages 17 to 28 and 86 to 109, are not a required
part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards
Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the
methods of measurement and presentation of the supplementary information. However, we did not audit the information and
express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the
City's basic financial statements. The accompanying combining statements and schedules of annual debt service
requirements, listed in the table of contents as supplementary information, are presented for purposes of additional analysis
and are not a required part of the basic financial statements. This information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to
the basic financial statements taken as a whole. The letter of transmittal and statistical tables have not been subjected to the
auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.
September 32002
San Diego, California
15
16
Management's Discussion and Analysis
As management of the City of Carlsbad ("City"), we offer readers of the City's financial statements this narrative
overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2002. Our intent is to
assist the reader of these financial statements in better understanding the impact of financial decisions made by the
City. This analysis will focus on the significant changes in an effort to explain the City's overall financial condition.
We encourage readers to consider the information presented here in conjunction with the additional information
furnished in our letter of transmittal.
As these statements represent the City's first statements issued pursuant to Government Accounting Standards
Board (GASB) pronouncement 34, the comparisons to the prior year are not provided on the Government-wide
Financial Statements. Comparative data on the Government-wide Financial Statements will be presented in future
years.
Overview of the Financial Statements
Required Components of the City of Carlsbad's
Annual Financial Report
Management 's
Discussion
and
Analysis
1
1
Basic
Financial
Statements
1
Required
Supplementary
Information
This section of the annual report consists of
four parts - management's discussion and
analysis (this section), the basic financial
statements, required supplementary
information, and an optional section that
presents combining statements for non-
major governmental funds and internal
service funds. The basic financial
statements include two kinds of statements
that present different views of the City.
• The first two statements are
Government-wide Financial Statements-
thai provide both long-term and short-
term information about the City's
overall financial status.
• The remaining statements are Fund
Financial Statements that focus on
individual parts of the City government,
reporting the City's operations in more
detail than the Government-wide
Statements.
— The Governmental Funds
Statements detail how general
government services such as public
safety were financed in the short term as well as what remains for future spending.
- Propriety Fund Statements offer short- and long-term financial information about the activities the City
operates like businesses, such as the water and sewer services.
- Fiduciary Fund Statements provide information about the financial relationships - such as contractor and
miscellaneous deposits - in which the City acts solely as a trustee or agent for the benefit of others to
whom the resources belong.
The financial statements also include notes that explain some of the information in the financial statements and
provide more detailed data. The statements are followed by a section of required supplementary information that
further explains and supports the information in the financial statements. In addition to these required elements, we
have included a section with combining statements that provide detail about our non-major governmental funds and
internal service funds, which are added together and presented in single columns in the basic financial statements.
1
Government-
wide Financial
Statements
Fund
Financial
Statements
Notes
to the
Financial
Statements
Summary Detail
17
The remainder of this overview section of management's discussion and analysis explains the structure and contents
of each of the statements.
Government-wide Financial Statements
The Government-wide Financial Statements report information about the City as a whole using accounting methods
similar to those used by private-sector companies. The Statement of Net Assets includes all of the City's assets and
liabilities. All of the current year's revenues and expenses are accounted for in the Statement of Activities
regardless of when cash is received or paid.
The two Government-wide Financial Statements report the City's net assets and how they have changed. Net assets
• the difference between the City's assets and liabilities - are one way to measure the City's financial health, or
position. Over time, increases or decreases in the City's net assets are an indicator of whether the City's financial
health is improving or deteriorating, respectively. One needs to consider additional non-financial factors, such as
changes in the City's property tax base and the condition of the City's infrastructure, to assess the overall health of
the City.
The Government-wide Financial Statements of the City are divided into two categories:
• Governmental activities - Most of the City's basic services, such as police, fire, public works, community
services, community development, and general administration, are included here. Taxes, revenues from other
governments and agencies, income from property and investments, and charges for services finance most of
these activities.
• Business-type activities - The City charges fees to customers to cover the costs of certain services it provides.
The City's water, sewer, and trash services are the primary business-type activities.
Fund Financial Statements
The Fund Financial Statements provide more detailed information about the City's most significant funds - not the
City as a whole. Funds are accounting devices that the City uses to keep track of specific sources of funding and
spending for particular purposes.
Some funds are required by State law and bond covenants, while the City establishes other funds to control and
manage money for particular purposes (such as the developer impact fee funds) or to show that it is properly using
certain taxes and grants (such as the Section 8 Housing Assistance fund).
The City has three kinds of funds:
• Governmental funds - Most of the City's basic services are included in governmental funds. These funds are
used to account for (1) cash and other financial assets that can readily be converted to cash flow in and out,
and (2) balances left at year-end that are available for spending. Consequently, the Governmental Funds
Statements provide a detailed short-term view that helps the reader determine the amount of financial resources
that can be spent in the near future to finance the City's programs. A reconciliation between the long-term and
short-term focus of the Government-wide Financial Statements is provided immediately following each
statement.
• Proprietary funds - Services for which the City charges customers a fee are generally reported in proprietary
funds. Proprietary funds, like the Government-wide Financial Statements, provide both long- and short-term
financial information.
- There are two types of proprietary funds: enterprise funds and internal service funds.
- We use enterprise funds to report activities that provide business-type services, generally to external
customers - such as water, sewer and trash services. In both the Government-wide Financial Statements
and the Fund Financial Statements, these funds are shown under business-type activities.
18
- We use internal service funds to report activities that provide services and supplies for the City's other
programs and activities - such as fleet, health insurance, and information technology.
• Fiduciary funds - These funds are used to account for situations where the City's role is purely custodial, such
as the receipt, temporary investment, and remittance of fiduciary resources to individuals, private
organizations, or other governments. All of the City's fiduciary activities are reported in a separate Statement
of Fiduciary Net Assets. We exclude these activities from the City's Government-wide Financial Statements
because the City cannot use these assets to finance its operations.
Financial Analysis of the City as a Whole
Net Assets
The City's combined net assets for the fiscal year ended June 30, 2002, as shown below, were $739 million. The
capital asset figure for governmental activities does not include all of the City's infrastructure assets, since the City
has not completed its inventory of infrastructure assets. GASB 34 allows the City an additional four years in which
to have an accounting of its infrastructure complete.
The schedule presented below is for the current year only as opposed to also presenting a comparison with the prior
year, since this is the City's first year implementing GASB 34. As permitted by generally accepted accounting
principles, the City has not restated the fiscal year 2001 financial statements. The fiscal year 2003 report will
include comparison data.
CITY OF CARLSBAD'S NET ASSETS
(in millions of dollars)
Current and other assets
Capital assets
Total assets
Long-term debt outstanding
Other liabilities
Total liabilities
Net assets
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total net assets
Governmental
Activities
2002
$297
217
514
19
12
31
199
154
130
S483
Business-Type
Activities
2002
$122
154
276
13
7
20
141
40
75
$256
Total
Activities
2002
$419
371
790
32
19
51
340
194
205
$739
As noted earlier, net assets may serve over time as a useful indicator of the City's financial position. For the City of
Carlsbad, assets currently exceed liabilities by $739 million at the close of the most recent fiscal year.
The largest portion of the City's net assets (46%) reflects its investment in capital assets (i.e., land, buildings,
machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding.
The City uses these capital assets to provide services to citizens; consequently, these assets are not available for
future spending. Although the City's investment in its capital assets is reported net of related debt, it should be
noted that the resources needed to repay this debt must be provided from other sources since the capital assets
themselves usually won't be used to liquidate these liabilities.
19
An additional portion of the City's net assets (26%) represents resources that are subject to external restrictions on
how they may be used. The remaining balance of unrestricted net assets ($205 million) may be used to meet the
government's ongoing obligations to citizens and creditors.
The majority (approximately 66%) of the $130 million in unrestricted governmental activities net assets is
attributable to the General fund. Although the net assets of our business-type activities total $75 million, these
resources cannot be used to help fund governmental activities. The City can only use these net assets to finance the
continuing operations of the City's enterprises: water, sewer, trash, and golf operations.
Changes in Net Assets
The condensed summary of activities, which follows, shows that net assets increased by $94 million during the year.
This increase can be attributed to several factors including: actual revenues exceeding projections for the year; the
build-up of cash reserves in the City's capital project funds for future capital project construction and acquisition;
and the fact that the costs of capital asset acquisitions are capitalized and depreciated over the useful life of the
assets under full-accrual accounting, versus being expensed in full in the year of acquisition.
CITY OF
Revenues
Program revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues
Property taxes
Sales and use taxes
Other taxes
CARLSBAD'S CHANGES IN
(in millions of dollars)
Governmental
Activities
2002
$14,617
7,985
26,852
28,495
21,004
19,662
Income from property and investments 1 8,095
Other
Total revenues
Expenses
General government
Public safety
Community development
Community services
Public works
Interest on long-term debt
Carlsbad Municipal Water District
Sewer
Other business-type activities
Total expenses
Excess (deficiency) before
special items and transfers
Special item:
Transfers
Increase (decrease) in net assets
Beginning net assets
Ending net assets
5,453
142,163
7,600
25,660
10,539
13,270
15,015
1,673
0
0
0
73,757
63,689
0
17
68,406
414,471
$482,877
NET ASSETS
Business-Type
Activities
2002
$25,525
578
16.155
1,516
0
0
7,010
787
51,571
0
0
0
0
0
0
19,311
6,169
311
25,791
25,797
0
(17)
25,780
230,463
$256,243
Total
2002
$40,142
8,563
43,007
30,011
21,004
19,662
25,105
6,240
193,734
7,600
25.660
10,539
13,270
15,015
1,673
19,311
6,169
311
99,548
94,186
0
0
94,186
644,934
$739,120
20
As these statements represent the City's first statements issued pursuant to GASB 34, the comparisons to the prior
year are not available.
Virtually half of the City's governmental funds revenue is generated through taxes collected (property, sales,
Transient Occupancy Tax, etc.), and almost half of the City's business-type revenue is generated through charges for
services. The following chart graphically depicts the City's revenue sources.
City of Carlsbad
Sources of Revenue for Fiscal Year 2001-2002
Contributions (21%)
Investments from Property
and Investments (13%)
Other (3%)
Other Taxes (6%)
TOT (5%)
Property Taxes (15%)
Charges for Services (21%)
Federal Aid (2%)
State Aid (3%)
Sales Tax (11%)
City of Carlsbad
Functional Expenses for Fiscal Year 2001-2002
Sewer
6%
Water
19%
Public Works
15%
General
Government
8%
Public Safety
26%
Community
Community Development
Services 11%
13%
21
The total cost of all programs and services was just under $100 million in fiscal year 2001-2002. The City's
expenses cover a range of services:
• Public Safety (26%)
Public Safety has always been a top City Council priority. The major service area includes the Police
Department, whose goal is to provide quality service to the community to ensure the preservation of life and
property and the maintenance of law and order. The Fire Department is also part of this major service area
with a mission to enhance the quality of life by delivering exceptional services in safeguarding lives, property,
and our environment.
• Water Operations (19%)
The Carlsbad Municipal Water District, a subsidiary of the City of Carlsbad, provides potable water service to
approximately 85% of the City (66,300 customers). The District purchases 100% of its potable water as
treated water from the Metropolitan Water District and the San Diego County Water Authority. The District
also provides recycled water for irrigational purposes.
• Public Works (15%)
Public Works is charged with building and caring for all of the assets of the City. It includes Engineering;
Parks, Streets, Median, Street Tree, Buena Vista Channel, and Facilities Maintenance; Building Maintenance;
Street Lighting; and Traffic Sign and Signal Maintenance programs.
• Community Services (13%)
Community Services consist of the Library, Cultural Arts, Recreation, Park Planning, and Senior Citizen
programs. These programs are provided to a wide range of people and assist in their education and cultural
development.
• Community Development (11%)
The mission of Community Development is to guide and facilitate the development of the City of Carlsbad.
This is accomplished through the development of high-quality projects and public facilities, preservation of the
local environment, diverse housing, employment and enrichment opportunities, and a strong and stable
economic base. Community Development encompasses the Hiring Center, Geographic Information Systems
(GIS), Economic Development, Community Promotion, Land Use Planning, Housing and Redevelopment, and
Building Inspection.
• General Government (8%)
This segment of the City is divided into two major groups, the Policy and Leadership group and the
Administrative Services group. The Policy and Leadership group encompasses all elected officials and the
chief executive offices for the City, including the City Council, City Manager, City Clerk, City Attorney,
Public Information, and City Treasurer departments. Administrative Services forms the support structures for
the City of Carlsbad and includes the Finance, Purchasing, and Human Resources departments.
• Sewer Operations (6%)
The City of Carlsbad operates and maintains a sanitary sewer collection system, which covers approximately
65% of the geographic area of the City. Sewage is treated by the Encina Wastewater Treatment Plant, a
facility jointly owned by the Cities of Carlsbad and Vista, the Leucadia County Water District, the Vallecitos
Water District, the Buena Vista Sanitation District, and the Encinitas Sanitary District.
22
• Other Expenses (2%)
Other expenses include costs associated with the City's Solid Waste division, development of a municipal golf
course, and interest on the City's long-term debt that is associated with governmental activities.
The following sections will discuss the operations of governmental and business-type activities separately.
Governmental Activities
The increase in net assets for governmental activities was $68 million. This increase was generated by total
revenues of governmental activities ($49 million in program revenues and $93 million in general revenues) of
$142 million offset by $74 million in total costs of governmental activities.
The following table presents the total cost of each of the City's major programs, as well as each function's program
revenues (fees generated by the activities, contributions, and intergovernmental aid). The net cost (the difference
between adjoining bars in the graph) shows the financial burden that was placed on the City's taxpayers by each of
these functions (costs covered by general revenues).
$35
$30
$25
$20
$15
$10
$5
$0
Governmental Activities
Program Revenues and Expenses
(in millions)
D Program Revenues
• Expenses
General Public Safety Community Community
Government Development Services
Public Works
Revenues are generated through several sources to cover the cost of the City's programs. These revenues include
fees and charges paid by those who directly benefit from the programs ($14.6 million), grants and contributions
from other governments and organizations to subsidize certain programs ($34.8 million), and taxes and other
revenues (such as income from property and investments and Vehicle License Fees) received by the City to pay for
the "public benefit" portion, totaling $92.7 million.
The apparent "negative cost" for the Public Works function due to program revenues exceeding expenses is due to
the fact that a large majority of Public Works revenues are used to acquire and build capital assets (versus covering
operating expenses), and the City does not acquire or build a capital asset until the related revenues have been
received. The City is currently in a developing or growing stage, and master plans are being designed to construct
and develop these new facilities, roads, parks, etc.
Business-Type Activities
Program revenues for the City's business-type activities totaled $42.2 million for the year, while functional expenses
equaled $25.8 million.
Business-Type Activities
Program Revenues and Expenses
(in millions)
Program Revenues
Expenses
Water Golf Course Sewer Solid Waste
As with the Public Works function in the governmental activities, program revenues are higher than program
expenses, since the City received contributions for current and future capital asset acquisitions and construction that
will be reflected as program expenses over time as depreciation expense.
Financial Analysis of the City's Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental Funds
The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances
of spendable resources. Such information is useful in assessing the City's financing requirements. In particular,
unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the
end of the fiscal year.
Governmental Fund Balances
(in millions)Committed for Other Restricted Purposes
($30.7 million)
Committed to Pay Debt Service ($660,000)
Committed to Liquidate Contracts
and Purchase Orders
($18.5 million)
Committed for Future Capital
Projects
($50.3 million)Unreserved ($164.9 million)
24
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of
$265 million, an increase of $18.8 million in comparison with the prior year. Approximately 62% of this amount
($164.9 million) constitutes unreserved fund balance, which is available for spending at the government's discretion
based on the purpose for which it was received. The remainder of the fund balance is reserved or designated to
indicate that it is not available for new spending because it has already been committed (1) for future capital projects
($50.3 million), (2) to liquidate contracts and purchase orders of the prior period ($18.5 million), (3) to pay debt
service ($660,000), or (4) for a variety of other restricted purposes ($30.7 million).
The General fund is the chief operating fund of the City, and at the end of the fiscal year had a total fund balance of
$88.2 million, an increase of $17.6 million. The unreserved fund balance portion of the General fund was
$76.1 million, of which $7.8 million was designated for future programs and service enhancements.
The increase in revenues was primarily due to two factors: the continuation of a strong housing market (increased
property taxes) and higher natural gas prices (increased franchise taxes). On the other hand, the effects of terrorism
on tourism (lower Transient Occupancy Taxes) and a third consecutive year of slower growth in Carlsbad (lower
development-related revenues) partially offset the increase in General fund revenues.
On the expenditure side, departments experienced savings from their budgeted allocations, "returning" $12.6 million
to the fund balance. It is important to note, however, that $7.8 million of these expenditure savings is earmarked for
future projects and has been budgeted in the next fiscal year.
The Redevelopment Areas debt service funds reflect a negative fund balance of just under $10.9 million. This
deficit was created when the City's General fund loaned the agency money to cover debt service charges during the
period soon after the agency's bonds were issued, but prior to the agency being able to support the debt service with
property tax increment revenues alone. The agency has begun to repay this debt back to the City's General fund, as
the tax increment collected within the redevelopment area grows.
The majority of the other major governmental funds, which are all capital project funds, showed increases in their
fund balances during the year. However, these increases in fund balances are all designated for the construction or
purchase of future capital projects. The Community Facilities District No. 1 fund is the only major governmental
fund reflecting a reduction in fund balance, due to the purchase of the former Farmer's Insurance building, which
will be utilized as part of the City's planned Civic Center Campus.
Proprietary Funds
The City's proprietary funds provide the same type of information found in the Government-wide Financial
Statements, but in more detail.
The Water funds had an operating income of $ 1.1 million for the year. Due to an extremely dry year and a more
accurate accrual at year-end, water sales were $1.9 million higher than last year. The largest expenditure for the
year was for purchased water, which was higher than last year by $790,000 from increased water usage.
Sewer funds had an annual operating income of $302,000 for the fiscal year. Total revenues were lower than the
previous year due to a decrease in miscellaneous revenues partially offset by an increase in the customer base.
Miscellaneous revenues were down as a result of fewer developer contributions received in the current fiscal year in
the City's sewer benefit areas as well as a change in the accounting for these contributions.
Unrestricted net assets for the Water, Golf, Sewer, and Solid Waste operations at the end of the year amounted to
$75.4 million, almost 30% of the net assets of all proprietary funds. Approximately 67% of the unrestricted net
assets are in the Water and Sewer funds, and represent funds set aside for future capital construction.
General Fund Budgetary Highlights
Management monitors revenues during the year and will update estimated revenue figures when new information is
received by the City. Estimated revenues were increased during this year by $5.3 million to reflect the following
changes and additions:
25
• Significantly higher franchise fees due to higher gas prices paid by consumers in calendar year 2000.
• The impacts of the events on September 11, 2001 on sales and Transient Occupancy Taxes.
• Higher than anticipated development affecting charges for services and licenses and permits.
• New State grants including financial assistance with the cleanup of one of the City's two lagoons.
• The impacts of increased new car sales from financing incentives offered by automobile manufacturers on the
City's Vehicle License Fee revenues.
• The unanticipated sale and leasing of City-owned property.
The increase from the total original budgeted expenditures to the final budget amounted to $1.2 million, due
predominantly from appropriating funds received from developers during the year for developer-funded studies.
The difference between the final budgeted expenditures and the actual expenditures for the year on a budgetary basis
of $12.6 million can be generally summarized as follows:
• $7.8 million "savings" being carried forward into the new fiscal year by the various major service areas within
the City to enhance and provide for future services and programs.
• $3.8 million representing unspent City Council Contingency money that was budgeted for unanticipated
emergencies or unforeseen program needs.
For purposes of budgetary presentation, actual revenues have been adjusted to exclude unrealized gains and losses
pursuant to GASB 31, and actual expenditures have been adjusted to include encumbrances outstanding.
Capital Asset and Debt Administration
Capital Assets
At the end of 2002, the City had recorded an investment of just over $435 million in a broad range of capital assets,
including park facilities, land, buildings, roads, bridges, water and sewer lines, police and fire vehicles, and other
maintenance equipment. This number does not include infrastructure assets constructed prior to July 1, 2001. The
City has not completed its inventory of infrastructure assets. GASB 34 allows the City an additional four years in
which to have an accounting of its infrastructure. However, new infrastructure that was either purchased or
constructed during the fiscal year in the City's governmental funds has been added into the total capital asset figures,
but these figures are not a good representation of the total infrastructure of the City since the infrastructure inventory
is not complete at this time.
CITY OF CARLSBAD'S CAPITAL ASSETS
(in millions of dollars)
Governmental Business-Type
Activities
Land
Buildings and other structures
Improvements other than buildings
Machinery and equipment
Infrastructure
Construction in progress
Sewage treatment facility
Accumulated depreciation
Total
2001
$41,638
55-723
9,740
19,530
0
51,074
0
177,705
(18,620)
$159,085
2002
$47,077
66,638
10,329
20,636
24,403
69,949
0
239,032
(21,711)
$217,321
Activities
2001
$7,212
2,258
4,989
1,680
110,163
16,403
34,898
177,603
(39,331)
$138,272
2002
$8,664
2,258
5,109
1,613
115,767
27,524
35,359
196,294
(42,227)
$154,067
Total
2001
$48,850
57,981
14,729
21,210
110,163
67,477
34,898
355,308
(57,951)
$297,357
2002
$55,741
68,896
15,438
22,249
140,170
97,473
35,359
435,326
(63,938)
$371,388
Change
2001-2002
$6,891
10,915
709
1,039
30,007
29,9%
461
80,018
(5,987)
$74,031
Total
Percentage
Change
2001-2002
14.1%
18.8%
4.8%
4.9%
27.2%
44.5%
1.3%
22.5%
10.3%
24.9%
26
This year's major capital asset additions included:
• The purchase of land and a building for the City's future City Hall Campus.
• Developer-dedicated streets, drainage facilities, water lines, sewer lines, streetlights, and drainage facilities.
• City-constructed streets, drainage facilities, and traffic signals.
• The purchase of land for development of a new recycled water facility.
In addition to carrying forward appropriations of $137.2 million for previously budgeted projects, the City's fiscal
year 2002-2003 capital budget appropriates an additional $38.0 million on capital projects. These additional
appropriations are principally for park development, the pavement management program, street projects, drainage
facilities, enhancing the sewer collection system, additional water lines and debt payments, traffic signals, and loan
repayments. These projects will be financed by development fees, infrastructure and replacement transfers from the
General fund, special district fees and taxes, water and sewer replacement reserves, and other sources including
grants and contributions from other agencies. More detailed information about the City's capital assets is presented
in Note 6 to the financial statements as well as the City's Capital Improvement Program document available from
the Finance Department.
Long-Term Debt
At year-end, the City had $32.5 million in bonds, certificates of deposit, loans, leases, and accrued assessments
payable, a decrease of $3.0 million from last year, as shown in the table below. More detail about the City's long-
term liabilities is presented in Note 8 to the financial statements.
New Debt
The City entered into long-term capital lease agreements for $6,000 in new Xerox copiers.
CITY OF CARLSBAD'S OUTSTANDING DEBT
(in millions of dollars)
Governmental Business-Type
Activities
Bonds
Certificates of participation
Loans
Obligations under capital leases
Installment purchase agreement
Accrued assessments
Less: Deterred charges
Total
2001
$13,865
5,055
480
908
0
0
0
S20,308
2002
$13,540
4,515
330
791
0
0
0
$19,176
Activities
2001
$0
3,370
1,685
0
9,350
789
(882)
$14,312
2002
$0
2,295
1,574
0
8,870
621
(751)
$12,609
Total
2001
$13,865
8,425
2,165
908
9,350
789
(882)
$34,620
2002
$13,540
6,810
1,904
791
8,870
621
(751)
$31,785
Total
Percentage
Change
2001-2002
-2.3%
-19.2%
-12.1%
-12.9%
-5.1%
-21.3%
-8.2%
Economic Factors and Next Year's Budgets and Rates
• Total assessed values in the City stand at over $13 billion, double what they were just five years ago.
• The May 2002 revision of the Governor's 2002-2003 budget reports a projected $23.6 billion deficit through
the 2002-2003 fiscal year, or 30% of the State of California's General fund.
• Per PKF Consulting, occupancy rates for north coastal San Diego County hotels are down 8.7%, and average
room rates are down 4.6% for the period from January 2002 to August 2002.
• PERS rates for our miscellaneous plan are unchanged for the 2002-2003 fiscal year at 0%, and have decreased
by .491 % for our safety plan.
• Retail natural gas prices have dropped from a high of $1.85 per therm in December 2001 to a current retail
price of $.63 per therm, impacting our future franchise fee revenue.
27
All of these factors were considered in preparing the City of Carlsbad's budget for the 2002-2003 fiscal year.
Budgeted expenditures are expected to drop 2.7% to $82.8 million. This decrease is mainly due to smaller budgets
for the non-departmental accounts and for the City Council Contingency account. In addition, just over $7.8 million
in unspent 2001-2002 budgeted expenditures will be carried over to the 2002-2003 fiscal year, as well as
$2.4 million in open encumbrances as of June 30, 2002.
During the current fiscal year, unreserved fund balance in the General fund increased to $68.3 million. The City of
Carlsbad has appropriated $7.3 million of this amount for spending in the 2002-2003 fiscal year.
The City's business-type activities reflect the following:
• No anticipated rate structure changes during the next fiscal year.
• No projected significant changes in other revenue sources.
Contacting the City's Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a
general overview of the City's finances and to demonstrate the City's accountability for the money it receives. If
you have any questions about this report or need additional information, contact the Finance Department,
1635 Faraday Avenue, Carlsbad, CA 92008. The Finance Department can also be reached at (760) 602-2430, or
visit us online at www.ci.carlsbad.ca.us.
28
29
CITY OF CARLSBAD, CALIFORNIA
Statement of Net Assets
June 30, 2002
Primary Government
ASSETS
Cash and investments
Receivables:
Taxes
Accrued interest
Accounts, net
Other
Due from other governments
Inventory
Prepaid items
Loans receivable
Deposits
Restricted assets:
Cash and investments
Accrued interest
Internal balances
Capital assets:
Land
Buildings and other structures
Improvements other than buildings
Machinery and equipment
Infrastructure
Construction in progress
Sewage treatment facility
Less accumulated depreciation
Total capital assets
Total assets
Governmental
Activities
$ 273,357,848
3,583,220
6,685
584,096
260,325
1,700,205
110,681
353,898
9,816,417
3,196,408
662,816
77,901
2,737,200
47,077,223
66,638,374
10,328,751
20,636,182
24,402,704
69,948,610
-
(21,710,480)
217,321,364
$ 513,769,064
Business-type
Activities
$ 116,867,603 !
54,503
-
3,720,842
-
1,516,522
391,998
6,008
-
-
1,717,329
28,557
(2,737,200)
8,663,600
2,258,064
5,108,962
1,612,818
115,767,359
27,523,616
35,359,277
(42,227,320)
154,066,376.
$ 275,632,538 1
Total
5 390,225,451
3,637,723
6,685
4,304,938
260,325
3,216,727
502,679
359,906
9,816,417
3,196,408
2,380,145
106,458
-
55,740,823
68,896,438
15,437,713
22,249,000
140,170,063
97,472,226
35,359,277
(63,937,800)
371,387,740
$ 789,401,602
The notes to the financial statements are an integral part of this statement.
30
CITY OF CARLSBAD, CALIFORNIA
Statement of Net Assets (Continued)
June 30, 2002
Primary Government
LIABILITIES
Accrued liabilities
Accrued interest payable
Due to other governments
Estimated claims payable
Deposits payable
Current liabilities payable from
restricted assets - accrued interest
Deferred revenue
Noncurrent liabilities:
Due within one year
Due in more than one year, net of deferred
charges and unamortized issuance costs
of $75 1,229
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Capital assets
Other purposes
Unrestricted
Total net assets
Governmental
Activities
$ 7,502,908
347,669
400,634
2,485,326
236,387
-
742,835
1,199,638
17,976,219
30,891,616
198,808,323
120,230,801
33,772,245
130,066,079
$ 482,877,448
Business-type
Activities
$ 1,553,417
-
3,483,238
-
356,096
240,908
1,147,349
1,906,786
10,702,234
19,390,028
140,437,485
40,390,626
-
75,414,399
$ 256,242,510
Total
$ 9,056,325
347,669
3,883,872
2,485,326
592,483
240,908
1,890,184
3,106,424
28,678,453
50,281,644
339,245,808
160,621,427
33,772,245
205,480,478
$ 739,119,958
The notes to the financial statements are an integral part of this statement.
31
CITY OF CARLSBAD
Statement of Activities
For the Year Ended June 30,2002
Program Revenues
Functions/Programs
Primary government:
Governmental activities:
General government
Public safety
Community development
Community services
Public works
Interest on long-term debt
Total governmental activities
Business-type activities:
Carlsbad Municipal Water District
Golf course
Sewer
Solid waste
Total business-type activities
Total primary government
Expenses
$ 7,599,821
25,659,586
10,539,139
13,269,566
15,015,344
1,673,516
73,756,972
19,310,792
98,565
6,168,690
212,605
25,790,652
$ 99,547,624
Charges for
Services
$ 581,696
2,957,412
3,810,305
1,827,661
5,439,861
-
14,616,935
19,101,617
-
5,918,566
505,195
25,525,378
$ 40,142,313
Operating
Grants and
Contributions
$ 656,913
235,094
4,635,185
741,114
1,716,625
-
7,984,931
554,158
-
-
23,323
577,481
$ 8,562,412
Capital
Grants and
Contributions
$ 111,307
55,734
828,410
982,910
24,874,056
-
26,852,417
5,494,045
-
10,660,753
-
16,154,798
$ 43,007,215
General revenues:
Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Business license taxes
Real property transfer taxes
Vehicle license fees
Homeowners exemptions
Income from property and investments
Gain on sale of capital assets
Other general revenues
Transfers
Total general revenues and transfers
Change in net assets
Net assets at beginning of year
Net assets at end of year
The notes to the financial statements are an integral part of this statement.
32
Net Revenue (Expense) and
Changes in Net Assets
Primary Government
Governmental
Activities
$ (6,249,905)
(22,411,346)
(1,265,239)
(9,717,881)
17,015,198
(1,673,516)
(24,302,689)
-
-
-
-
$ (24,302,689)
$ 28,495,155
21,003,988
8,533,329
7,494,684
2,440,387
1,193,198
4,675,269
339,192
18,095,269
244,061
177,354
16,946
92,708,832
68,406,143
414,471,305
$ 482,877,448
Business-type
Activities
$
-
-
-
-
-
-
5,839,028
(98,565)
10,410,629
315,913
16,467,005
$ 16,467,005
$ 1,515,692
-
-
-
-
-
-
24,178
7,010,000
2,575
777,526
(16,946)
9,313,025
25,780,030
230,462,480
$256,242,510
Total
$ (6,249,905)
(22,411,346)
(1,265,239)
(9,717,881)
17,015,198
(1,673,516)
(24,302,689)
5,839,028
(98,565)
10,410,629
315,913
16,467,005
$ (7,835,684)
$ 30,010,847
21,003,988
8,533,329
7,494,684
2,440,387
1,193,198
4,675,269
363,370
25,105,269
246,636
954,880
-
102,021,857
94,186,173
644,933,785
$739,119,958
33
CITY OF CARLSBAD
Balance Sheet
Governmental Funds
June 30,2002
ASSETS
Cash and investments
Receivables:
Taxes
Accrued interest
Accounts, net
Other
Due from other funds
Due from other governments
Inventory
Prepaid items
Restricted assets:
Cash and investments
Accrued interest receivable
Loans receivable
Deposits
Advances to other funds
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accrued liabilities
Due to other funds
Deposits payable
Due to other governments
Advances from other funds
Deferred revenue
Total liabilities
Fund balances:
Reserved
Unreserved:
Designated
Undesignated
Total fund balances
Total liabilities and fund balances
General
Fund
$ 79,447,259
3,542,962
-
82,214
260,325
911,746
279,962
24,866
800
-
-
172,693
-
17,114,158
$ 101,836,985
$ 4,521,683
-
155,771
-
-
9,004,795
13,682,249
12,005,679
7,801,158
68,347,899
88,154,736
$ 101,836,985
Redevelopment
Debt
Service Funds
S 2,034,487
26,007
341
-
-
-
-
-
-
-
-
-
-
-
$ 2,060,835
$
-
-
124,378
12,826,958
-
12,951,336
-
-
(10,890,501)
(10,890,501)
$ 2,060,835
Bridge and
Thoroughfare
Districts
$ 5,758,158
-
-
-
-
-
-
-
-
-
-
-
3,196,408
-
$ 8,954,566
$ 36,644
-
-
272,034
4,971,944
-
5,280,622
1,869,349
1,804,595
-
3,673,944
$ 8,954,566
The notes to the financial statements are an integral part of this statement.
34
Community Public Other
Facilities Park Facilities Governmental
District No. 1 Development Construction Funds
$ 33,598,025 $ 9,533,368 $ 32,552,059 $ 96,079,726
7,749 - - 6,502
6,344
27,062 451,734
.
-
1,420,243
.
282,297
662,816
77,901
9,643,724
.
9,542,798
$ 33,605,774 $ 9,533,368 $ 32,579,121 $118,174,085
Total
Governmental
Funds
$ 259,003,082
3,583,220
6,685
561,010
260,325
911,746
1,700,205
24,866
283,097
662,816
77,901
9,816,417
3,196,408
26,656,956
$ 306,744,734
$ 46,417 $ 73 $ 663,624 $ 1,826,398
810,264
80,616
4,222
4,980,000 - 1,140,854
307,119
46,417 4,980,073 663,624 4,169,473
876,901 134,944 3,042,084 31,853,037
32,682,456 4,418,351 28,873,413 50,625,198
31,526,377
33,559,357 4,553,295 31,915,497 114,004,612
$ 33,605,774 $ 9,533,368 $ 32,579,121 $118,174,085
$ 7,094,839
810,264
236,387
400,634
23,919,756
9,311,914
41,773,794
49,781,994
126,205,171
88,983,775
264,970,940
$ 306,744,734
35
CITY OF CARLSBAD
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
June 30,2002
Amounts reported for governmental activities in the statement of net assets are different because:
Total fund balances - governmental funds. $264,970,940
Capital assets used in governmental activities are not financial resources, and
therefore are not reported in the funds. 210,301,044
Internal service funds are used by management to charge the costs of fleet
management, health insurance, information technologies, records management,
risk management and workers' compensation to individual funds. The assets
and liabilities of the internal service funds are included in governmental
activities in the statement of net assets. 18,544,672
Accrued interest is not due and payable in the current period, and therefore
is not reported in the funds. (347,669)
Interest receivable on advances to other funds is not a current financial
resource, and therefore is not recognized as revenue in the funds until received. 8,569,079
Long-term liabilities, including bonds payable, are not due and payable
in the current period, and therefore are not reported in the funds. (19,160,618)
Net assets of governmental activities. $482,877,448
The notes to the financial statements are an integral part of this statement.
36
37
CITY OF CARLSBAD
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30,2002
Redevelopment Bridge and
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 expenditures
Other financing sources (uses):
Transfers in
Transfers out
Proceeds of debt
Total other financing sources (uses)
General
Fund
$ 63,608,868 1
6,228,406
1,998,210
6,019,183
897,533
5,468,580
2,163,257
-
-
871,957
87,255,994
7,349,200
25,175,288
5,747,482
11,878,854
12,588,928
-
111,660
57,668
62,909,080
24,346,914
371,662
(7,173,189)
5,926
(6,795,601)
Debt Thoroughfare
Service Funds Districts
$ 1,866,103 $
-
-
-
-
113,274 324,437
-
415,380
-
-
1,979,377 739,817
13,886
-
-
-
-
1,303,119
325,000
1,384,403
1,723,289 1,303,119
256,088 (563,302)
1,839,016
(50,000)
-
(50,000) 1,839,016
Net change in fund balances
Fund balances (deficits) at beginning of year
Fund balances (deficits) at end of year
The notes to the financial statements are an integral part of this statement.
17,551,313 206,088 1,275,714
70,603,423 (11,096,589) 2,398,230
$ 88,154,736 $ (10,890,501) $ 3,673,944
Community
Facilities District Park
No. 1 Development
$ 3,862,038 $
-
-
-
-
2,160,941 557,073
-
771,794 982,675
-
-
6,794,773 1,539,748
111,346
-
-
-
-
16,937,203 468,367
.
-
17,048,549 468,367
(10,253,776) 1,071,381
1,355,367
(118,422)
-
1,355,367 (118,422)
(8,898,409) 952,959
42,457,766 3,600,336
$ 33,559,357 $ 4,553,295
Public
Facilities
Construction
$
-
-
-
-
2,312,248
-
3,914,700
-
114,484
6,341,432
90,508
-
-
-
-
4,042,293
_
-
4,132,801
2,208,631
399,981
(1,822,070)
-
(1,422,089)
786,542
31,128,955
$ 31,915,497
Other
Governmental
Funds
$ 2,191,250
8,038,121
-
1,731,882
49,650
7,763,917
120,500
5,166,221
210,453
1,399,976
26,671,970
849,803
423,178
4,568,301
569,871
2,815,638
14,752,193
696,548
252,666
24,928,198
1,743,772
7,866,549
(2,651,948)
-
5,214,601
6,958,373
107,046,239
$ 114,004,612
Total
Governmental
Funds
$ 71,528,259
14,266,527
1,998,210
7,751,065
947,183
18,700,470
2,283,757
11,250,770
210,453
2,386,417
131,323,111
8,414,743
25,598,466
10,315,783
12,448,725
15,404,566
37,503,175
1,133,208
1,694,737
112,513,403
18,809,708
11,832,575
(11,815,629)
5,926
22,872
18,832,580
246,138,360
$ 264,970,940
39
CITY OF CARLSBAD
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended June 30,2002
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - total governmental funds. $ 18,832,580
Governmental funds report capital outlays as expenditures. However, in the
statement of activities, the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense. This is the amount by which
capital outlays exceeded depreciation in the current period. 47,334,639
The issuance of long-term debt (e.g., bonds, leases) provides current financial
resources to governmental funds, while the repayment of the principal
of long-term debt consumes the current financial resources of governmental
funds. Neither transaction, however, has any effect on net assets. Also,
governmental funds report the effect of issuance costs, premiums, discounts,
and similar items when debt is first issued, whereas these amounts are deferred
and amortized in the statement of activities. This amount is the net effect of
these differences in the treatment of long-term debt and related items. 1,496,172
Some expenses reported in the statement of activities do not require the use
of current financial resources, and therefore are not reported as expenditures
in governmental funds. (347,669)
Unpaid interest income on advances to other funds is not a current financial
resource, and therefore is not recognized as revenue in the funds. 658,578
The net revenue of certain activities of internal service funds is reported
with governmental activities. 431,843
Change in net assets of governmental activities. $ 68,406,143
The notes to the financial statements are an integral part of this statement.
40
41
CITY OF CARLSBAD
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
General Fund
For the Year Ended June 30,2002
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Income from property and investments
Interdepartmental charges
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 of revenues over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Proceeds of debt
Total other financing sources (uses)
Net change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Budgeted
Original
$ 62,296,000
5,550,000
1,555,000
4,738,000
790,000
3,125,000
2,100,000
500,000
80,654,000
13,813,647
26,792,532
7,002,706
13,962,185
15,106,968
-
-
76,678,038
3,975,962
-
(7,173,189)
-
(7,173,189)
(3,197,227)
70,603,423
$ 67,406,196
Amounts
Final
$ 63,872,000
6,661,678
1,905,000
5,740,000
830,000
3,960,000
2,300,000
650,000
85,918,678
13,193,326
26,798,650
7,798,088
14,347,543
15,605,261
111,660
57,668
77,912,196
8,006,482
371,698
(7,173,189)
-
(6,801,491)
1,204,991
70,603,423
$ 71,808,414
Actual Amounts
(Budgetary Basis)
$ 63,608,868
6,228,406
1,998,210
6,019,183
897,533
4,537,254
2,163,257
871,957
86,324,668
7,956,762
25,436,280
6,302,699
12,269,602
13,130,827
111,660
57,668
65,265,498
21,059,170
371,662
(7,173,189)
5,926
(6,795,601)
14,263,569
70,603,423
$ 84,866,992
Variance With
Final Budget -
Positive
(Negative)
S (263,132)
(433,272)
93,210
279,183
67,533
577,254
(136,743)
221,957
405,990
5,236,564
1,362,370
1,495,389
2,077,941
2,474,434
-
-
12,646,698
13,052,688
(36)
-
5,926
5,890
13,058,578
-
$ 13,058,578
The notes to the financial statements are an integral part of this statement.
42
CITY OF CARLSBAD
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
General Fund (Continued)
For the Year Ended June 30,2002
BUDGET-TO-GAAP RECONCILIATION
Expenditures
Actual amounts (budgetary basis) "total charges to appropriations"
from the budgetary comparison schedule (previous page).
Differences - budget to GAAP:
Encumbrances are shown in the year encumbered for budgetary purposes,
but in the year paid for financial reporting purposes.
The notes to the financial statements are an integral part of this statement.
Actual Amounts
(Budgetary Basis)
Revenues
Actual amounts (budgetary basis) "available for appropriation" from
the budgetary comparison schedule (previous page). $ 86,324,668
The recording of unrealized gains and losses on the City's investments
are shown for financial reporting purposes (pursuant to GASB 31),
but are not shown for budgetary purposes. 931,326
$ 87,255,994
$ 65,265,498
(2,356,418)
$ 62,909,080
43
CITY OF CARLSBAD
Statement of Net Assets
Proprietary Funds
June 30, 2002
ASSETS
Carlsbad
Municipal
Water District
Business-type Activities -
Golf
Course Sewer
Current assets:
Cash and investments
Receivables:
Taxes
Accounts, net
Due from other governments
Inventory
Prepaid items
Total current assets
Noncurrent assets:
Restricted assets:
Cash and investments
Accrued interest
Total restricted assets
Capital assets:
Land
Buildings and other structures
Improvements other than buildings
Machinery and equipment
Infrastructure
Construction in progress
Sewage treatment facility
Less accumulated depreciation
Total capital assets (net of accumulated
depreciation)
Total noncurrent assets
Total assets
The notes to the financial statements are an integral part of this statement.
$ 52,524,907 $ 2,015,487 $ 58,374,123
21,144
2,630,069
1,516,522
386,816
6,008
57,085,466 2,015,487
832,282
5,182
59,211,587
763,214
6,832
770,046
1,909,565
2,258,064
2,185,604
1,030,910
78,807,643
8,812,584
-
(20,797,685)
74,206,685
74,976,731
$ 132,062,197 !
954,115
21,725
975,840
5,075,228 1,678,807
-
2,923,358
581,908
36,959,716
3,618,177 15,092,855
35,359,277
(21,429,635)
8,693,405 71,166,286
8,693,405 72,142,126
g 10,708,892 $ 131,353,713
44
Enterprise Funds
Solid
Waste
$ 3,953,086
33,359
258,491
-
-
-
4,244,936
-
Totals
$ 116,867,603
54,503
3,720,842
1,516,522
391,998
6,008
122,557,476
1,717,329
28,557
Governmental
Activities -
Internal
Service
Funds
$ 14,354,766
-
23,086
-
85,815
70,801
14,534,468
-
1,745,886
-
-
-
-
-
-
-
-
$ 4,244,936
8,663,600
2,258,064
5,108,962
1,612,818
115,767,359
27,523,616
35,359,277
(42,227,320)
154,066,376
155,812,262
$ 278,369,738
.
-
-
14,381,857
-
-
-
(7,361,537)
7,020,320
7,020,320
$ 21,554,788
45
CITY OF CARLSBAD
Statement of Net Assets
Proprietary Funds (Continued)
June 30,2002
Noncurrent liabilities:
Advance from other funds
Deferred revenue
Loan payable
Capital leases payable
Certificates of participation, net of unamortized
issuance costs and deferred charges of $63,233
Installment purchase agreement, net of deferred
charges of $687,996
1,460,350
1,111,767
Business-type Activities -
LIABILITIES
Current liabilities:
Accrued liabilities
Due to other governments
Due to other funds
Estimated claims payable
Current portion of long-term debt
Deposits payable
Total current liabilities
Current liabilities payable from restricted assets:
Accrued interest
Carlsbad
Municipal Golf
Water District Course
$ 1,010,482 $ 2,676 !
2,641,532
-
-
1,233,874 177,912
109,074
4,994,962 180,588
43,274 9,366
Sewer
$ 310,151
841,706
-
-
495,000
247,022
1,893,879
188,268
2,737,200
1,147,349
7,687,004
Accrued assessments
Total noncurrent liabilities
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Capital assets
Unrestricted
Total net assets
-
2,572,117
7,610,353
71,163,908
10,972,602
42,315,334
$ 124,451,844 !
443,113
3,180,313
3,370,267
5,335,180
-
2,003,445
B 7,338,625
-
8,834,353
10,916,500
63,938,397
29,418,024
27,080,792
$ 120,437,213
The notes to the financial statements are an integral part of this statement.
46
Enterprise Funds
Solid
Waste
$ 230,108
-
-
-
-
-
230,108
Total
Proprietary
Funds
$ 1,553,417
3,483,238
-
-
1,906,786
356,096
7,299,537
Governmental
Activities -
Internal
Service
Funds
$ 408,069
-
101,482
2,485,326
5,319
-
3,000,196
240,908
-
-
-
-
.
-
-
230,108
2,737,200
1,147,349
1,460,350
-
1,111,767
7,687,004
443,113
14,586,783
22,127,228
-
-
9,920
-
-
-
9,920
3,010,116
-
-
4,014,828
$ 4,014,828
140,437,485
40,390,626
75,414,399
$ 256,242,510
7,005,081
-
11,539,591
$ 18,544,672
47
CITY OF CARLSBAD
Statement of Revenues, Expenses and Changes in Net Assets
Proprietary Funds
For the Year Ended June 30, 2002
Business-type Activities -
Operating revenues:
Water sales
Sewer service 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 sale of property
Property taxes
Amortization of issuance costs
Total nonoperating revenues
Income before transfers and capital contributions
Transfers in
Transfers out
Capital contributions
Change in net assets
Total net assets at beginning of year
Total net assets at end of year
Carlsbad
Municipal
Water District
$ 18,372,504 3
-
638,736
554,158
579,017
20,144,415
-
11,377,661
1,507,925
-
-
6,177,284
19,062,870
1,081,545
3,239,135
(239,225)
2,574
1,539,870
(8,697)
4,533,657
5,615,202
2,601,467
(2,618,413)
5,494,045
11,092,301
113,359,543
$ 124,451,844 $
Golf
Course Sewer
i - $
5,833,201
85,365
-
183,729 14,780
183,729 5,933,346
2,003,362
-
1,461,342
-
-
98,565 2,166,293
98,565 5,630,997
85,164 302,349
125,181 3,505,461
(529,740)
(7,953)
-
-
125,181 2,967,768
210,345 3,270,117
2,252,753
(2,252,753)
10,660,753
210,345 13,930,870
7,128,280 106,506,343
i 7,338,625 $ 120,437,213
The notes to the financial statements are an integral part of this statement.
48
Enterprise Funds
Solid Waste
$
-
505,196
23,323
-
528,519
-
-
-
-
212,605
212,605
315,914
230,600
-
-
-
-
230,600
546,514
-
-
-
546,514
3,468,314
$ 4,014,828
Totals
$ 18,372,504
5,833,201
1,229,297
577,481
777,526
26,790,009
2,003,362
11,377,661
2,969,267
-
-
8,654,747
25,005,037
1,784,972
7,100,377
(768,965)
(5,379)
1,539,870
(8,697)
7,857,206
9,642,178
4,854,220
(4,871,166)
16,154,798
25,780,030
230,462,480
$ 256,242,510
Governmental
Activities -
Internal
Service Funds
$
-
11,264,178
-
300,460
11,564,638
-
1,636,601
455,480
4,528,813
5,699,182
12,320,076
(755,438)
827,977
-
41,247
-
-
869,224
113,786
174,202
-
143,855
431,843
18,112,829
$ 18,544,672
49
CITY OF CARLSBAD
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2002
Business-type Activities -
Cash flows from operating activities:
Receipts from customers and users
Payments to suppliers
Payments to employees
Internal activity - payments to other funds
Claims paid
Other receipts (payments)
(Decrease) in deposits payable
Net cash provided by operating activities
Cash flows from noncapital financing activities:
Operating subsidies and transfers to other funds
Cash flows from capital and related financing activities:
Capital contributions
Purchases of capital assets
Principal paid on capital debt
Interest and other fees paid
Property taxes received
Net cash (used) in capital and
related financing activities
Cash flows from investing activities:
Interest on investments
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Carlsbad
Municipal
Water District
$ 18,843,301 <
(13,446,741)
(2,034,344)
(1,884,857)
-
1,133,175
(15,810)
2,594,724
(16,946)
1,925,100
(3,303,359)
(1,185,665)
(196,073)
1,539,838
(1,220,159)
3,239,135
4,596,754
47,951,367
Golf
Course Sewer
6 - $ 5,933,515
(500) (2,886,576)
(395,391)
(1,149,546)
-
85,164 14,780
(39,989)
84,664 1,476,793
-
7,882,302
(81,386) (10,553,787)
(168,405) (480,000)
(454,605)
-
(249,791) (3,606,090)
125,181 3,505,461
(39,946) 1,376,164
2,055,433 57,012,493
Cash and cash equivalents at end of year $ 52,548,121 $ 2,015,487 $ 58,388,657
The notes to the financial statements are an integral part of this statement.
50
Enterprise Funds
Solid Waste
$ 38,124
(138,505)
(55,449)
(20,827)
-
509,124
-
332,467
Totals
$ 24,814,940
(16,472,322)
(2,485,184)
(3,055,230)
-
1,742,243
(55,799)
4,488,648
Governmental
Activities -
Internal
Service Funds
$ 11,264,880
(2,994,562)
(2,435,304)
(872,198)
(3,839,265)
546,320
-
1,669,871
(16,946)
-
-
-
-
230,600
563,067
3,390,019
$ 3,953,086
9,807,402
(13,938,532)
(1,834,070)
(650,678)
1,539,838
(5,076,040)
7,100,377
6,496,039
110,409,312
$ 116,905,351
(1,238,879)
-
-
-
(1,238,879)
828,658
1,259,650
13,095,116
$ 14,354,766
51
CITY OF CARLSBAD
Statement of Cash Flows
Proprietary Funds (Continued)
For the Year Ended June 30,2002
Business-type Activities -
Carlsbad
Municipal
Water District
Golf
Course Sewer
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization
Change in assets and liabilities:
(Increase) decrease in receivables
(Increase) decrease in inventory
(Increase) in prepaid items
(Decrease) in accrued liabilities
Increase in due to other governments
Increase in estimated claims payable
(Decrease) in deposits payable
Net cash provided by operating activities
Noncash capital financing activities:
Capital assets contributed by other sources
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
$ 1,081,545 $
1,507,925
85,164 $302,349
1,461,342
(167,939)
(127,288)
(1,458)
(1,748,503)
2,066,252
(15,810)
$ 2,594,724 $
$ 2,025,349 $
14,949
624
-
(500) (1,104,188)
841,706
(39,989)
84,664 $ 1,476,793
$ 2,721,843
$ 52,524,907 $ 2,015,487 $ 58,374,123
763,214 - 954,115
(740,000) - (939,581)
$ 52,548,121 $ 2,015,487 $ 58,388,657
The notes to the financial statements are an integral part of this statement.
52
Enterprise Funds
Solid Waste
Governmental
Activities -
Internal
Totals Service Funds
$ 315,914 $ 1,784,972 $ (755,438)
2,969,267 1,636,601
18,729 (134,261)
(126,664)
(1,458)
(2,176) (2,855,367)
2,907,958
-
(55,799)
$ 332,467 $ 4,488,648 $
$ - $ 4,747,192 $
246,563
22,185
(20,511)
(62,462)
-
602,933
-
1,669,871
318,057
$ 3,953,086 $ 116,867,603 $ 14,354,766
1,717,329
(1,679,581)
$ 3,953,086 $ 116,905,351 $ 14,354,766
53
CITY OF CARLSBAD
Statement of Fiduciary Net Assets
Agency Funds
June 30, 2002
ASSETS
Cash and investments
Taxes receivable
Accrued interest
Total current assets
Contractors' and
Miscellaneous
Deposits
$ 8,421,671
-
-
8,421,671
Assessment
Districts
$ 2,620,113
128,123
84,799
2,833,035
Restricted assets:
Cash and investments
Total assets
LIABILITIES
Held in trust for contractors, bondholders and other purposes
The notes to the financial statements are an integral part of this statement.
8,421,671 $
4,945,743
7,778,778
$ 8,421,671 $ 7,778,778
54
CITY OF CARLSBAD
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies
The City of Carlsbad, California (City) was incorporated on July 16, 1952. The City 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 the City and its component units conform to accounting principles generally accepted in the
United States of America as applicable to governmental units. The following is a summary of the more significant
policies:
Description and scope of the reporting entity
As required by accounting principles generally accepted in the United States of America, these financial statements
present the financial position of the 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 is 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.
Government-wide and Fund Financial Statements
The Government-wide Financial Statements (i.e., the Statement of Net Assets and the Statement of Changes in Net Assets)
report information on all of the nonfiduciary activities of the City and its blended component units. For the most part, the
effect of interfund activity has been removed from these statements. Governmental activities, which normally are
supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a
significant extent on user fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset
by program revenues. Direct expenses are those that are clearly identifiable to a specific function or segment. Program
revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the
operational or capital requirements of a particular function or segment. Taxes and other items not properly classified as
program revenues are reported as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the
latter are excluded from the Government-wide Financial Statements. Major individual governmental funds and major
individual enterprise funds are reported in separate columns in the Fund Financial Statements.
55
CITY OF CARLSBAD
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (Continued)
Measurement focus, basis of accounting, and financial statement presentation
The Government-wide Financial Statements are reported using the economic resources measurement focus and the accrual
basis of accounting, as are the Proprietary Fund and Fiduciary Fund Financial Statements. Revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. In applying
the susceptible to accrual concept to intergovernmental revenues, the legal and contractual requirements of the individual
programs are used as guidance. Property taxes are recognized as revenues in the year for which they are levied.
Governmental Fund Financial Statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay
liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as
under accrual accounting. Principal and interest on 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.
Revenues that are accrued generally include real property taxes, sales tax, transient occupancy taxes, franchise taxes,
vehicle license fees, highway users tax, interest, and some state and federal grants.
Real property taxes are levied on October 15 against property owners of record on January 1 of that year. 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.
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.
The City reports the following major governmental funds:
The General fund is the City's primary operating fund. It accounts for all financial resources of the general government,
except those required to be accounted for in another fund.
The Redevelopment Debt Service Funds are used to account for the accumulation of resources for, and payment of,
principal and interest on the Carlsbad Redevelopment Agency's bonds and other debt, used to finance improvements for
the redevelopment areas of the City.
The Bridge and Thoroughfare Districts capital project funds are used to account for the receipt of fees charged to
developers, and expenditures for street and highway construction.
The Community Facilities District No. 1 capital project fund is used to account for civic facilities, freeway interchanges,
and road segments financed by Community Facilities District No. 1 "special tax revenues" (Mello Roos).
The Park Development capital project funds are used to account for the receipt of fees charged to developers, and
expenditures for park acquisition and development.
The Public Facilities Construction capital project fund is used to account for the receipt of fees charged to developers,
and expenditures for specific public facilities such as libraries and fire stations necessitated by growth.
56
CITY OF CARLSBAD
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (Continued)
Measurement focus, basis of accounting, and financial statement presentation (continued)
The City reports the following major enterprise funds:
The Carlsbad Municipal Water District enterprise fund is used to account for the operation, maintenance, and capital
facility financing of the City's water system.
The Golf Course enterprise fund is used to account for revenues and expenses for the construction activities of the City's
proposed municipal golf course.
The Sewer enterprise fund is used to account for the operation, maintenance, and capital facility financing of the City's
sewer system.
The Solid Waste enterprise fund is used to account for the revenues and expenses of the City's solid waste source-
reduction and recycling programs.
Additionally, the City reports the following fund types:
Internal Service funds account for fleet management, health insurance, information technologies, records management,
risk management and workers' compensation services provided to other departments or agencies of the City.
The Agency funds account for assets held by the City for other funds, governments or individuals. These funds include
contractors' deposits for future development, miscellaneous deposits, as well as debt service transactions on assessment
district bonds for which the City is not obligated.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in
both the Government-wide and Proprietary Fund Financial Statements to the extent that those standards do not conflict
with or contradict guidance of the Governmental Accounting Standards Board (GASB). Governments also have the
option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to
this same limitation. The City has elected to follow the standards set by the GASB as opposed to subsequently issued
private-sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the Government-wide Financial Statements.
Exceptions to this general rule are payments of special taxes (CFD #1) by the golf course and charges between the
Carlsbad Municipal Water District and various other functions of the City. Elimination of these charges would distort the
direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges
provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources,
such as taxes, are reported as general revenues rather than as program revenues.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary fund's
principal ongoing operations. The principal operating revenues of the City's proprietary funds are charges to customers
for sales and services. The City also recognizes new account charges, late fees and contributions from other agencies as
operating revenues. Operating expenses for enterprise and internal service funds include the cost of sales and services,
general and administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first,
then unrestricted resources as they are needed.
57
CITY OF CARLSBAD
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (Continued)
Implementation of new accounting principles
> Governmental Accounting Standards Board Statement No. 34
The City adopted the provisions of GASB Statement No. 34, Basic Financial Statements - and Management's
Discussion and Analysis -for State and Local Governments. This statement affects the manner in which the City
records transactions and presents financial information. State and local governments have traditionally used a
financial reporting model substantially different from the one used to prepare private-sector financial reports.
GASB Statement No. 34 establishes new requirements and a new reporting model for the annual financial reports of
state and local governments. The statement was developed to make annual reports of state and local governments
easier to understand and more useful to the people who use governmental financial information to make decisions.
Management's Discussion and Analysis - GASB Statement No. 34 requires that financial statements be
accompanied by a narrative introduction and analytical overview of the City's financial activities in the form of
"management's discussion and analysis" (MD&A). This analysis is similar to the analysis provided in the annual
reports of private-sector organizations.
Government-wide Financial Statements - The reporting model includes financial statements prepared using full
accrual accounting for all of the City's activities. This approach includes not just current assets and liabilities, but
also capital and other long-term assets as well as long-term liabilities. Accrual accounting also reports all of the
revenues and costs of providing services each year, not just those received or paid in the current year or soon
thereafter. These financial statements include the Statement of Net Assets and the Statement of Activities.
Statement of Net Assets - The Statement of Net Assets is designed to display the financial position of the City
(government and business-type activities). The City now reports all capital assets in the Government-wide
Statement of Net Assets and reports depreciation expenses - the cost of "using up" capital assets - in the Statement
of Activities. The net assets of the City are broken down into three categories - 1) invested in capital assets, net of
related debt; 2) restricted; and 3) unrestricted.
Statement of Activities - The Government-wide Statement of Activities reports expenses and revenues in a format
that focuses on the cost of each of the City's functions. The expense of individual functions is compared to the
revenue generated directly by the function.
Accordingly, the City has recorded capital and certain other long-term assets and liabilities in the Statement of Net
Assets, and has reported all revenues and the cost of providing services under the accrual basis of accounting in the
Statement of Activities.
> Governmental Accounting Standards Board Statement No. 37
The City adopted the provisions of GASB Statement No. 37, Basic Financial Statements — and Management's
Discussion and Analysis -for State and Local Governments: Omnibus. This statement amends GASB Statement
No. 34 to either 1) clarify certain provisions or 2) modify other provisions that the GASB believes may have
unintended consequences in some circumstances. Accordingly, the City considered the effects of this statement
when adopting the provisions of GASB Statement No. 34, as previously described.
58
CITY OF CARLSBAD
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (Continued)
Implementation of new accounting principles (continued)
> Governmental Accounting Standards Board Statement No. 38
The City adopted the provisions of GASB Statement No. 38, Certain Financial Statement Note Disclosures. This
statement modifies, establishes, and rescinds certain financial statement disclosure requirements. Accordingly,
certain footnote disclosures have been revised to conform to the provisions of GASB Statement No. 38.
> Governmental Accounting Standards Board Interpretation No. 6
The City adopted the provisions of GASB Interpretation No. 6, Recognition and Measurement of Certain Liabilities
and Expenditures in Governmental Fund Financial Statements. This interpretation clarifies the application of
standards for modified accrual recognition of certain liabilities and expenditures in areas where differences have
arisen, or could arise, in interpretation and practice. This interpretation impacts the fund level financial statements
(governmental funds only, not proprietary or fiduciary funds) required by GASB Statement No. 34 but has no direct
impact on the Government-wide Financial Statements. Accordingly, the City has not recognized the current portion
of certain long-term liabilities and related expenditures in the Governmental Fund Financial Statements for amounts
not considered to be due and payable as of June 30, 2002.
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.
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 on a monthly basis, 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.
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.
59
CITY OF CARLSBAD
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (Continued)
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. For compensated
absences recorded at June 30, 2002, 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.
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.
Unbilled services
Unbilled water revenue of the enterprise funds is recognized as earned when the water is consumed.
Capital assets
Capital assets, which include land, buildings, equipment and infrastructure assets (e.g., roads, bridges, traffic signals, and
similar items), are reported in the applicable governmental or business-type activities columns in the Government-wide
Financial Statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $10,000
and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
The cost of normal maintenance and repairs that do not add to the value of an asset or materially extend an asset's useful
life are not capitalized. Construction in progress costs are transferred to their respective fixed asset category upon
approval by the City Council.
Depreciation is charged to operations using the straight-line method based on the estimated useful life of an asset. The
estimated useful lives of depreciable assets are as follows:
Years
Buildings and other structures 10-50
Improvements other than buildings 20 - 50
Machinery and equipment 3—20
Infrastructure 10-100
Sewage treatment facility 50
During the year ended June 30, 2002, the City capitalized general infrastructure assets acquired during the year ended
June 30, 2002. No retroactive infrastructure assets have been capitalized. As per GASB 34, the City has until its year
ended June 30, 2006 to record its retroactive general infrastructure assets.
Deferred revenue
The deferred revenue reported in the City's financial statements represents money received during the current or previous
fiscal years that has not been earned by, or is available to, 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.
60
CITY OF CARLSBAD
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (Continued)
Receivables and payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as either "due to/from other funds" (short-term interfund loans) or "advances to/from other funds" (long-
term interfund loans). Any residual balances outstanding between the governmental activities and business-type activities
are reported in the Government-wide Financial Statements as "internal balances."
Advances between funds, as reported in the Fund Financial Statements, are offset by a fund balance reserve account in the
applicable governmental fund to indicate that they are not available for appropriation and are not expendable available
financial resources.
All trade, service and tax receivables are shown net of an allowance for uncollectibles. The utility billing receivable
allowance is equal to 1% of outstanding billings at June 30, 2002, the ambulance billing receivable allowance is equal to
40% of outstanding billings at June 30, 2002, and the trade receivable allowance is reserved for on a case-by-case basis.
Long-term obligations
In the Government-wide Financial Statements, and proprietary fund types in the Fund Financial Statements, long-term
debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type
activities, or proprietary fund type Statement of Net Assets. Bond premiums, discounts, and issuance costs are deferred
and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the
applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term
of the related debt.
In the Fund Financial Statements, governmental fund types recognize bond premiums, discounts, and issuance costs
during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on
debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing
uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service
expenditures.
Fund equity
In the Fund Financial Statements, governmental funds report reservations of fund balance for amounts that are not
available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund
balance represent tentative management plans, and are subject to change.
Note 2. Budgetary Data
The City follows these procedures in establishing its budgetary data:
» 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 estimated revenues and proposed expenditures
on a departmental basis.
» Public hearings are conducted at City Council meetings to obtain citizens' comments during June.
» Prior to July 1, the budget is enacted legally through passage of an appropriation resolution.
61
CITY OF CARLSBAD
Notes to the Financial Statements
Note 2. Budgetary Data (Continued)
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 that 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. Monthly reports are provided to the City
Council during the year, and any changes to the adopted budget are approved by the City Council as necessary. 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 revenues have been adjusted to exclude unrealized gains and losses
pursuant to GASB 31, and actual expenditures have been adjusted to include encumbrances outstanding. 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.
Note 3. Cash and Investments
Cash resources of the individual funds are combined to form a pool of cash and investments. The City values all of its
cash and invested cash at fair value on a portfolio basis. The City manages its pooled idle cash and investments under a
formal investment policy that is reviewed by the Investment Committee and adopted annually by the City Council and that
follow the guidelines of the State of California Government Code. Individual investments cannot be identified with any
single fund because the City may be required to liquidate its investments at any time to cover large cash outlays required
in excess of normal operating needs. Funds must request large outlays in advance in order that the City Treasurer will
have the funding available.
The carrying amount of the City's cash and invested cash at June 30, 2002, and reconciliation to amounts shown on the
Combined Balance Sheet are as follows:
Cash and investments:
Cash on hand $ 1,172,149
Carrying amount of total investments 407,420,974
$ 408,593,123
Combined Balance Sheet:
Cash and invested cash $ 401,267,235
Restricted cash with fiscal agents 7,325,888
$ 408,593,123
62
CITY OF CARLSBAD
Notes to the Financial Statements
Note 3. Cash and Investments (Continued)
At June 30, 2002, the carrying amount of the City's cash deposits totaled $1,172,149 and the bank balance of the City's
cash deposits maintained in financial institutions is $4,597,895. The cash deposits are held by the City's agent in the
City's name. Of the $4,597,895 maintained in financial institutions, $193,880 is insured by the Federal Depository
Insurance Corporation and the remainder is collateralized with securities held by the pledging financial institution, or by
its trust department or agent but not in the City's name. The primary difference between the carrying amount and the bank
balance are deposits in transit and outstanding checks. In accordance with state statutes, the Corporation maintains
deposits at those depository institutions insured by the Federal Deposit Insurance Corporation. The California
Government Code requires California banks and savings and loan associations to collateralize the deposits of
governmental entities by pledging government securities as collateral. The market value of pledged securities must equal
at least 110% of those deposits. California law also allows financial institutions to secure the deposits of governmental
entities by pledging first trust deed mortgage notes having a collateral value of 150% of a corporation's total deposits.
The City is authorized by its investment policy, in accordance with Section 53601 of the California Government Code, to
invest in the following instruments:
» Securities issued or guaranteed by the Federal Government or its agencies
» Bankers' acceptances that are eligible for purchase by the Federal Reserve System
» Commercial paper, rated A-l/P-1, secured by an irrevocable line of credit or government securities
» Repurchase agreements with a maximum maturity of one year
« Certificates of deposit with national and state licensed or chartered banks; federal or state savings and loan
associations
* Medium-term corporate notes, rated AAA or AA
» Money market funds
In accordance with GASB Statement 3, cash deposits and investments, the City's investments are categorized, according
to the following criteria, to give an indication of the level of risk assumed by the City at year-end.
Category 1 includes investments that are insured or registered or for which the securities are held by the City or its
agent in the City's name.
Category 2 includes 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 includes 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. •
63
CITY OF CARLSBAD
Notes to the Financial Statements
Note 3. Cash and Investments (Continued)
The following is the summary of investments as of June 30, 2002:
City held investments:
U.S. Government securities
Corporate notes
Total City held investments
Category
1 2
$ - $ 187,298,058 <
113,514,505
300,812,563
Fair
3 Uncategorized Value
8 - $ - $ 187,298,058
113,514,505
300,812,563
Restricted trustee held investments:
U.S. Government securities
California State Local Agency
Investment Fund (LAIF)
Bank repossession agreements
Guaranteed investment contracts
Total restricted trustee held
investments
506,077
506,077 6,819,811
506,077
-
481,943
3,017,162
3,320,706
481,943
3,017,162
3,320,706
7,J
Unrestricted trustee held
investments:
U.S. Government securities 409,573 409,573
Investment in pool:
LAIF 98,872,950 98,872,950
Total investments $ 301,318,640 $$106,102,334 $ 407,420,974
Investments
State statutes authorize the City to invest any available funds in securities issued or guaranteed by the United States
Treasury or agencies of the United States, bank certificates of deposit, bankers acceptances, negotiable certificates of
deposit, the State Treasurer's Investment Pool (LAIF), repurchase agreements, commercial paper and bonds, and
registered warrants or treasury notes of the State of California and its agencies. An advisory board has been established to
monitor LAIF's compliance with regulations and investment alternatives established by the State.
The City participates in a voluntary external investment pool, LAIF, which is managed by the State Treasurer. LAIF has
oversight provided by the Local Agency Investment Advisory Board. The Board consists of five members as designated
by State statute. The Chairman of the Board is the State Treasurer or his designated representative. The fair value of the
City's shares in the pool approximates the fair value of the position in the pool.
At June 30, 2002, the City's pooled investments in LAIF in the amount of $99,354,893 are not subject to custodial credit
risk categorization. The total estimated fair value invested by all public agencies in LAIF is $48,082,558,174. Of that
amount, 100% is invested in nonderivative financial products.
64
CITY OF CARLSBAD
Notes to the Financial Statements
Note 3. Cash and Investments (Continued)
Cash with fiscal agents
The City has monies held by trustees pledged to the payment or security of certain bonds. These are subject to the same
risk category as the invested cash. The California Government Code provides that these monies, in absence of specific
statutory provisions governing the issuance of bonds or certificates, may be invested in accordance with the ordinance,
resolutions or indentures specifying the types of investments its trustees or fiscal agents may make. These ordinances,
resolutions or indentures are generally more restrictive than the City's general investment policy.
Note 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, 2002:
Due to
Other Funds
General
Special Revenue Funds:
Section 8 Housing Authority
Community Development Block Grant
Capital Project Funds:
Federal Grants - ISTEA
Internal Service Funds:
Records Management
Totals
529,184
5,948
275,132
101,482
Due from
Other Funds
911,746
911,746 $ 911,746
These balances resulted from expenditures being incurred prior to receipt of the related revenue source.
65
CITY OF CARLSBAD
Notes to the Financial Statements
Note 5. Advances to and from Other Funds
The following table shows amounts advanced from funds within the City to other funds within the City at June 30, 2002:
Advances From Advances To Amount
General Fund
General Fund
General Fund
Special Revenue Funds:
Gas Tax
Gas Tax
Capital Projects Funds:
General Capital Construction
Debt Service Funds:
Village Redevelopment Area
South Carlsbad Redevelopment Area
Capital Projects Funds:
Park Development SW Quadrant
Enterprise Funds:
Golf Course Fund
Capital Projects Funds:
Bridge and Thoroughfare District #2
Bridge and Thoroughfare District #3
Capital Projects Funds:
Park Development NW Quadrant
Park Development SE Quadrant
Bridge and Thoroughfare District #2
Assessment and Other Districts
$12,587,729
239,229
1,550,000
2,737,200
2,471,944
2,000,000
1,180,000
2,250,000
500,000
1,140,854
$ 26,656,956
Advances to and from other funds are primarily long term advances used to fund capital projects in advance of related
financing/assessments.
66
CITY OF CARLSBAD
Notes to the Financial Statements
Note 6. Capital Assets
Capital asset activity was as follows for the year ended June 30, 2002:
Governmental activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets,
not being depreciated
Capital assets, being depreciated:
Buildings
Improvements
Machinery and equipment
Infrastructure
Total capital assets,
being depreciated
Less accumulated depreciation for:
Buildings
Improvements
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total capital assets,
being depreciated, net
Governmental activities
capital assets, net
Balance at
July 1,2001 Increases
Balance at
Decreases June 30, 2002
$ 41,637,888 $ 5,443,726 $ (4,391) $ 47,077,223
51,074,094 19,469,898 (595,382) 69,948,610
92,711,982
84,992,516
66,373,248
24,913,624 (599,773) 117,025,833
55,722,703
9,740,052
19,529,761
-
10,915,671
588,699
2,100,617
24,402,704
66,638,374
10,328,751
(994,196) 20,636,182
24,402,704
38,007,691 (994,196) 122,006,011
(9,044,873)
(1,646,094)
(7,928,301)
(18,619,268)
(1,149,094)
(376,859)
(2,201,945)
(3,727,898)
-
-
636,686
636,686
(10,193,967)
(2,022,953)
(9,493,560)
(21,710,480)
34,279,793 (357,510) 100,295,531
$ 159,085,230 S 59,193,417 $ (957,283) $217,321,364
67
CITY OF CARLSBAD
Notes to the Financial Statements
Note 6. Capital Assets (Continued)
Business-type activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being
depreciated
Capital assets, being depreciated:
Buildings
Improvements, other than buildings
Machinery and equipment
Infrastructure
Sewage treatment facility
Total capital assets, being
depreciated
Less accumulated depreciation for:
Buildings
Improvements
Machinery and equipment
Infrastructure
Sewage treatment facility
Total accumulated depreciation
Total capital assets,
being depreciated, net
Balance at
July 1,2001
$ 7,212,043
16,403,009
23,615,052
2,258,064
4,988,639
1,679,381
110,162,931
34,897,995
153,987,010
(664,929)
(1,633,107)
(1,090,145)
(27,370,274)
(8,571,992)
(39,330,447)
114,656,563
Increases
$ 1,451,557
12,014,484
13,466,041
-
120,323
17,118
5,604,428
748,929
6,490,798
(55,446)
(102,088)
(111,131)
(2,024,904)
(675,698)
(2,969,267)
3,521,531
Balance at
Decreases June 30, 2002
$ - $ 8,663,600
(893,877) 27,523,616
(893,877) 36,187,216
2,258,064
5,108,962
(83,681) 1,612,818
115,767,359
(287,647) 35,359,277
(371,328) 160,106,480
(720,375)
(1,735,195)
72,394 (1,128,882)
(29,395,178)
(9,247,690)
72,394 (42,227,320)
(298,934) 117,879,160
Business-type activities
capital assets, net $ 138,271,615 $ 16,987,572 $(1,192,811) $154,066,376
68
CITY OF CARLSBAD
Notes to the Financial Statements
Note 6. Capital Assets (Continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government $ 310,720
Community development 165,523
Public safety 416,978
Community services 1,072,060
Public works 128,555
Capital assets held by the internal service funds
(charged to various functions based on
their usage of the assets) 1,634,062
Total depreciation expense - governmental activities $ 3,727,898
Business-type activities:
Sewer $ 1,461,342
Water 1,507,925
Total depreciation expense - business-type activities $ 2,969,267
69
CITY OF CARLSBAD
Notes to the Financial Statements
Note 7. Accrued Liabilities
Accrued liabilities were as follows at June 30, 2002:
Governmental Funds:
General Fund
Bridge and Thoroughfare
Districts
Community Facilities
District No. 1
Park Development
Public Facilities
Construction
Other Governmental Funds
Total Governmental Funds
Vendors
Salaries and IFD
Benefits _ Payable
Refuse Miscellaneous
Disposal _ Accruals
$1,326,911 $3,109,780 $79,299 $
36,644
Total
5,693 $4,521,683
36,644
45,902
73
663,624
1,642,678 161,234
515
-
.
22,486
46,417
73
663,624
1,826,398
$3,715,832 $3,271,014 $79,299 $$ 28,694 $7,094,839
Business-type Activities:
Enterprise funds:
Carlsbad Munipal Water
District
Golf Course
Sewer
Solid Waste
* Internal Service Funds
Total Business-type
Activities
$ 670,343
-
248,476
8,347
223,539
$1,150,705
$ 340,139 $ - $ - $
2,676
61,675
1,296 - 220,465
184,260
$ 590,046 $ - $220,465 $
$1,010,482
2,676
310,151
230,108
270 408,069
270 $1,961,486
* Internal service funds have been included with governmental activities on the Government-wide Statement of Net Assets.
70
CITY OF CARLSBAD
Notes to the Financial Statements
Note 8. Long-term Debt
The folowing is a summary of changes in the principal balance of long-term debt for the year ended June 30, 2002:
Principal Principal
Balance at Balance at Due Within
June 30,2001 Additions Reductions June 30,2002 One Year
Governmental activities:
Bonds
Certificates of participation
HUD Section 108 loan
Obligations under capital leases
Total governmental activity
Business-type activities:
Certificates of participation
Installment purchase agreement
Loan payable
Accrued assessments
Less deferred charges
$13,865,000
5,055,000
479,950
908,440
20,308,390
3,370,000
9,350,000
1,684,889
789,430
15,194,319
(882,085)
1 4,312,234
$ - $ 325,000
540,000
150,000
5,926 123,459
5,926 1,138,459
1,075,000
480,000
110,665
168,405
1,834,070
(130,856)
1,703,214
$ 13,540,000
4,515,000
329,950
790,907
19,175,857
2,295,000
8,870,000
1,574,224
621,025
13,360,249
(751,229)
12,609,020
$ 340,000
565,000
160,000
134,638
1,199,638
1,120,000
495,000
113,874
177,912
1,906,786
-
1,906,786
Entity-wide total $34.620,624 $ 5,926 $2,841,673 $31,784,877 $3,106,424
71
CITY OF CARLSBAD
Notes to the Financial Statements
Note 8. Long-term Debt (Continued)
Long-term debt at June 30, 2002 is comprised of the following issues:
Governmental long-term debt
Balance at
June 30, 2002
1993 Carlsbad Housing and Redevelopment Commission Tax Allocation
Bonds, principal due in amounts ranging from $340,000 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. The City
posted a surety bond in lieu of cash reserve in the amount of $1,055,953.
1997 Hosp Grove Refunding Certificates of Participation, principal due in
amounts ranging from $565,000 to $735,000 on August 1 of each year
through 2009, interest payable on August 1 and February 1 at rates varying
from 4.20% to 4.70% per annum. Payable from the General Fund, with a
required reserve amount of $659,500.
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 $160,000 to
$170,000 on August 1 of each year through 2004. Interest payable on
August 1 and February 1 at rates varying from 8.24% to 8.27% per annum.
Payable from future CDBG entitlements.
Equipment Lease-Purchase Agreement with Motorola, Inc., dated November 15,
1996, for the purchase of equipment and services necessary for the City's
participation in the San Diego County Regional Communications System.
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, 2002, 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 City has entered into several office equipment lease-purchase
agreements. As of June 30, 2002, the City has purchased copier equipment
totaling $456,783. All lease terms are for 60 months, with interest rates
ranging from 5.56% to 15.11%.
Sub-total governmental long-term debt
Less current portion
Total long-term portion of governmental debt
$ 13,540,000
4,515,000
329,950
518,635
272,272
19,175,857
1,199,638
$ 17,976,219
72
CITY OF CARLSBAD
Notes to the Financial Statements
Note 8. Long-term Debt (Continued)
Balance at
Business-type long-term debt June 30, 2002
1997 Carlsbad Municipal Water District Refunding Certificates of
Participation, principal due in varying amounts ranging from $1,120,000 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 4.30% to 4.40% per
annum. The required reserve amount is $740,000. $ 2,295,000
1997 Encina Financing Joint Powers Authority (EFJPA) Installment Purchase
Agreement, principal due in varying amounts ranging from $495,000 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 5.50% per
annum. The required reserve amount is $939,581. 8,870,000
1993 Carlsbad Municipal Water District loan agreement with the State
Water Resources Control Board. Principal is due in varying amounts
ranging from $113,874 to $151,558 on November 30 of each year through
2013, interest payable on November 30 of each year at 2.90% per annum. 1,574,224
In December 1994, the Golf Course Enterprise Fund purchased land
with accrued assessments. Principal is due in varying amounts ranging
from $177,912 to $196,925 through 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. 621,025
Subtotal business-type long-term debt 13,360,249
Less unamortized discounts, issuance costs and deferred charges 751,229
Less current portion 1,906,786
Total long-term portion of business-type debt $ 10,702,234
73
CITY OF CARLSBAD
Notes to the Financial Statements
Note 8. Long-term Debt (Continued)
The aggregate maturities of long-term debt are as follows:
Governmental Activities Business-Type Activities
Year ended June 30:
2003
2004
2005
2006
2007
2008-2012
2013-2017
2018-2022
2023-2024
Principal
$ 1,199,638
1,266,625
1,120,918
1,092,096
1,147,484
4,154,096
3,165,000
4,080,000
1,950,000
$ 19,175,857
Interest
$ 974,627
906,045
840,224
783,351
728,574
2,873,520
2,024,606
1,077,296
104,675
$ 10,312,918
Principal
$ 1,906,786
1,998,237
867,500
759,200
732,670
4,236,079
2,859,777
-
-
$ 13,360,249
Interest
$ 624,177
539,409
448,706
407,274
360,801
1,231,126
213,727
-
-
$ 3,825,220
Note 9. 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.
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.
Note 10. Debt Without Government Commitment
Special assessment bonds
As of June 30, 2002, the City has five series of Assessment District Bonds outstanding in the amount of $39,252,239.
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. The City collects assessments to pay the bond debt. These monies are
accounted for in the Assessment Districts Agency Fund.
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 amount of mortgage revenue bonds outstanding as of June 30, 2002 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 deeds of trust, irrevocable letters of credit, and irrevocable
surety bonds.
74
CITY OF CARLSBAD
Notes to the Financial Statements
Note 10. Debt Without Government Commitment (Continued)
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, the above 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 accompanying financial statements.
Note 11. Fund Balances/Retained Earnings
The following is a summary of reserved and unreserved fund balances as of June 30, 2002:
Governmental Fund Types
Fund Balances
Reserved for:
Loans receivable
Inventory
Prepaid items
Debt service
Advances to other funds*
Flower fields preservation
Low and moderate income
housing
Habitat and nearshore reef
mitigation
Encumbrances
Subtotal
General
$ 172,693
24,866
800
-
8,545,079
-
-
905,823
2,356,418
12,005,679
Special
Revenue
$ 9,643,724
-
282,297
-
4,471,944
935,000
631,865
-
4,606,773
20,571,603
Debt Capital
Service Projects Total
$ - $ - $ 9,816,417
24,866
283,097
659,500 - 659,500
5,070,854 18,087,877
935,000
-
631,865
905,823
11,474,358 18,437,549
659,500 16,545,212 49,781,994
Unreserved:
Designated for approved
capital projects
Designated for continuing
appropriations
Subtotal
Undesignated
Total fund balances
7,801,158
1,699,687
1,388,791
48,636,134 50,335,821
66,679,401 75,869,350
7,801,158 3,088,478 115,315,535 126,205,171
68,347,899 17,453,624 (10,371,479) 13,553,731 88,983,775
$88,154,736 $41,113,705 $(9,711,979) $145,414,478 $264,970,940
* Only reflects that portion of fund balance invested in interfund advances (the General fund amount is net of $8,569,079
in deferred revenue for measurable but unavailable interest earned on such advances).
75
CITY OF CARLSBAD
Notes to the Financial Statements
Note 11. Fund Balances/Retained Earnings (Continued)
Business-type Funds
Net Assets
Invested in capital assets, net of related debt
Restricted for capital assets
Unrestricted
Enterprise
$ 140,437,485 $
40,390,626
75,414,399
$ 256,242,510 $
Internal
Service
7,005,081
11,539,591
18,544,672
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 flower-fields preservation represent resources set aside to support floriculture research for the preservation of
the "Flower Fields" located on the Carlsbad Ranch.
Reserves for habitat and nearshore reef 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, and 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 and unrestricted represents the fund balance or net assets remaining after reduction for reserved
and designated fund balances or net assets.
76
CITY OF CARLSBAD
Notes to the Financial Statements
Note 12. Accumulated Fund Deficits/Negative Net Assets
The following funds reported deficits in fund balances or net assets as of June 30, 2002:
Deficit Balance
Debt Service Funds:
Redevelopment Areas
Special Revenue Funds:
Community Development Block Grant
Internal Service Funds:
Records Management
$ (10,890,501)
$ (11,454)
$ (7,457)
Note 13. Interfund Transfers
Interfund transfers for the year ended June 30, 2002, consisted of the following:
Fund
Transfers
In From
Other Funds
Transfers
Out To
Other Funds
Major Funds:
General
Debt Service Funds:
Redevelopment Debt Service Funds
Capital Project Funds:
Bridge and Thoroughfare Districts
Community Facilities District No. 1
Park Development
Public Facilities Construction
Nonmajor Governmental Funds
Enterprise Funds:
Carlsbad Municipal Water District
Sewer
Totals
371,662 $
1,839,016
1,355,367
399,981
7,866,549
2,601,467
2,252,753
7,173,189
50,000
118,422
1,822,070
2,651,948
2,618,413
2,252,753
$ 16,686,795 $ 16,686,795
Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that
statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts
to the debt service fund as debt service payments become due, (3) move the remaining fund balances of closed funds to the
General fund, and (4) use unrestricted revenues collected in the General fund to finance various programs accounted for in
other funds in accordance with budgetary authorizations.
77
CITY OF CARLSBAD
Notes to the Financial Statements
Note 14. 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, 2002, the
unencumbered fund equity for the Risk Management Self-Insurance fund was approximately $1,900,000.
Health insurance coverage for City employees is provided by either Kaiser, CalPERS, Sharp Healthcare or the Reliastar
plan. Approximately 25% of the City's benefited 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 $500,000 per claim.
The estimated claims payable reported at June 30, 2002 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 in the estimated claims payable amounts in
fiscal years 2001 and 2002 for the three internal service funds are as follows:
Claims
Health Insurance fund:
2000-2001
2001-2002
Beginning
Balance
$ 384,399
$ 272,917
Expense and
Changes in
Estimates
$ 1,127,242
$ 1,237,549
Claim
Payments
$ (1,238,724) !
$ (1,186,126) i
Ending
Balance
& 272,917
B 324,340
Risk Management fund:
2000-2001 $ 623,586 $ 188,083 $ (171,668) $ 640,001
2001-2002 $ 640,001 $ 537,362 $ (175,728) $ 1,001,635
Workers' Compensation fund:
2000-2001 $ 834,734 $ 784,479 $ (649,738) $ 969,475
2001-2002 $ 969,475 $ 892,658 $ (702,782) $ 1,159,351
78
CITY OF CARLSBAD
Notes to the Financial Statements
Note 15. 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, Vista
and Encinitas and the Leucadia County Water District, the Buena Vista Sanitation District and the Vallecitos Water
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 the assets are acquired. As of June 30, 2001, the Cities and Districts
have the following approximate ownership interest:
City of Carlsbad 25%
City of Vista 22%
Leucadia County Water District 20%
Vallecitos Water District 20%
Buena Vista Sanitation District 8%
City of Encinitas 5%
EWA's financial statements for the fiscal year ended June 30, 2001 (the latest available) incorporated the provisions of
GASB 34 and reflect the following:
Total assets $ 47,686,858
Total liabilities 1,407,406
Net assets $ 46,279,452
The EWA does not recognize net income or loss. Net operating expenditures in excess of users' assessments are treated as
accounts receivable on 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 expenses for the EWA totaled $48,018 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 Finance department.
79
CITY OF CARLSBAD
Notes to the Financial Statements
Note 15. Joint Ventures (Continued)
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 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, 2002:
Agreement
Member Balance
City of Carlsbad $ 8,870,000
Leucadia County Water District 6,050,000
$ 14,920,000
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.
Note 16. 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 ordinances. 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 the City's miscellaneous and fire employees on their behalf and for their account. The City
makes 8% of the required 9% contributions for the City's police employees. The amount paid by the City on behalf of
employees for the year ended June 30, 2002 was $2,566,898. The City is required to contribute at an actuarially
determined rate. For the year ended June 30, 2002, the employer contribution rate for the City of Carlsbad (as a
percentage of covered payroll) was 3.995% for safety employees and 0.0% for miscellaneous employees. The
contribution requirements of plan members and the City are established by PERS.
80
CITY OF CARLSBAD
Notes to the Financial Statements
Note 16. Retirement Plan (Continued)
Annual pension cost
For 2002, the City's annual pension cost (employer contribution) of $472,638 for safety and $0 for miscellaneous to PERS
was equal to the City's required and actual contributions. For 2002, the member contributions paid by the City were
$1,006,719 for safety and $1,560,179 for miscellaneous. The required contribution was determined as part of the June 30,
1999, 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, 2002 is through June 30, 2020; for safety employees at June 30, 2002, it is through June 30, 2011.
Three-year trend information for PERS (safety)
Fiscal Year
Ending
6/30/00
6/30/01
6/30/02
Annual Pension
Cost (Employer
Contribution)
$ 525,164
$ 370,444
$ 472,638
Percentage of
APC Contributed
100%
100%
100%
Net Pension
Obligation
$
Three-year trend information for PERS (miscellaneous)
Fiscal Year
Ending
Annual Pension
Cost (Employer
Contribution)
Percentage of
APC Contributed
Net Pension
Obligation
6/30/00 !
6/30/01 5
6/30/02 3
5 437,978
5 5,607
6
100%
100%
100%
$
$
$
Required supplementary information
Funded status of plan (safety)
Valuation
Date
Entry Age
Normal
Accrued
Liability
Actuarial
Value
of Assets
Unfunded
Liability/
(Excess
Assets)
Funded
Status
Annual
Covered
Payroll
UAAL
As a %
of Payroll
6/30/98
6/30/99
6/30/00
$ 53,527,398
$ 59,160,306
$ 70,002,794
$ 63,822,496
$ 73,078,737
$ 84,606,890
$(10,295,098)
$(13,918,431)
$(14,604,096)
119.2%
123.5%
120.9%
9,021,054
9,784,191
10,319,561
(114.123%)
(142.254%)
(141.519%)
81
CITY OF CARLSBAD
Notes to the Financial Statements
Note 16. Retirement Plan (Continued)
Funded status of plan (miscellaneous)
Valuation
Date
6/30/98
6/30/99
6/30/00
Entry Age
Normal
Accrued
Liability
$ 56,210,285
$ 62,314,238
$ 71,350,783
Actuarial
Value
of Assets
$ 72,756,235
$ 84,329,881
$ 94,556,898
Unfunded
Liability/
(Excess
Assets)
$(16,545,950)
$(22,015,643)
$(23,206,115)
Funded
Status
129.4%
135.3%
132.5%
Annual
Covered
Payroll
$ 15,687,958
$ 16,405,530
$ 19,396,170
UAAL
As a %
of Payroll
(105.469%)
(134.196%)
(119.643%)
Note 17. 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, fourteen retirees meet these eligibility requirements and are receiving benefits.
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 $64,800 were
charged to expense for post-retirement health care costs during 2001-2002. 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. The City has not addressed how it will fund this program as of June 30, 2002. The GASB is currently
working on an exposure draft to address the accounting and disclosure treatment for this type of plan.
Note 18. Commitments and Contingencies
Operating lease
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, adjusted annually based upon an increase in the consumer price
index, not to exceed 6% of the previous year's rents, and re-adjusted in years 10 and 15 based upon market rental values,
through August 2007.
Minimum future rental payments under the operating lease as of June 30, 2002 are:
2003
2004
2005
2006
2007
Subsequent to 2007
Total minimum future rental payments
70,300
70,300
70,300
70,300
70,300
70,300
$ 421,800
82
CITY OF CARLSBAD
Notes to the Financial Statements
Note 18. Commitments and Contingencies (Continued)
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.
During the year ended June 30, 2002, the City was involved in a consolidated claim involving the acquisition of right-of-
way for the construction of a public works project in which the City was ordered by the trial court to pay approximately
$3,200,000 for physical and economic cost and damages and legal costs suffered by property owners. The City is
currently appealing the economic damages and legal costs portions of the judgment, consisting of damages to unaffixed,
moveable personal property and to improvements pertaining to realty, and as such, has only accrued approximately
$272,000 related to the claim at June 30, 2002. Management intends to vigorously defend its position in the appellate
court, and it is the belief of the City's legal counsel that the City will prevail on appeal of the economic damages and
accordingly, believes that exposure beyond the $272,000 is remote.
The City has deposited approximately $3,200,000 with the San Diego County Treasury related to the above claim in order
to proceed with this appeal.
Note 19. Restatement of Prior Year Net Assets
Effective July 1, 2001, the City restated certain deposits payable to net assets in the Sewer fund. The restatement was
done to properly reflect fees collected, net of related expenses, as net assets rather than as deposits payable. The fees will
be used in the future to construct capital projects. The effect of the restatement is shown below.
Sewer Fund
Net assets at July 1,2001 $ 105,396,914
Reclassification of a portion of 2000-2001 deposits payable to net assets 1,109,429
Net assets at July 1, 2001, as restated $ 106,506,343
83
84
SUPPLEMENTARY INFORMATION
85
CITY OF CARLSBAD
Combining Balance Sheet
jimajor Governmental Funds
June 30,2002
ASSETS
Cash and investments
Receivables:
Taxes
Accrued interest
Accounts, net
Due from other governments
Affordable
Housing
$ 5,718,209
-
-
-
-
Community
Development
Block Grant
$ 50
-
-
-
23,663
Donations
and Bequests
$8,057,101 :
-
-
-
-
Federal
Grants
$ 106,124
-
-
25
31,976
Low and
Moderate
Gas Income
Tax Housing
$ 6,536,634 $1,306,092
6,502
85
-
-
Prepaid items
Restricted assets:
Cash and investments
Accrued interest receivable
Loan receivables
Advances to other funds
7,286,907 5,568 2,351,249
4,47 \, 944
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Vccrued liabilities
Due to other funds
Deposits payable
Due to to other governments
Advances from other funds
Deferred revenue
Total liabilities
$13,005,116 $ 29,281 $8,057,101
14,218 30,565 13,615
5,948
4,222
.
14,218 40,735 13,615
$ 138,125 $11,008,578 $3,663,928
16,555 694,044 2,747
.
.
16,555 694,044 2,747
Fund balances:
Reserved for:
Loans receivable
Prepaid items
Debt service
Advances to other funds
Flower fields preservation
Low and moderate income housing
Encumbrances
Unreserved:
Designated for approved capital projects
Designated for continuing appropriations
Undesignated
Total fund balances
Total liabilities and fund balances
7,286,907 5,568 2,351,249
631,865
26,651 482,693
5,045,475 (499,715)
935,000
47,645
118,809
6,942,032
4,471,944
1,783 3,514,762
1,699,687
2,634
113,127 - 76,364
6,660 628,141 1,230,934
12,990,898 (11,454) 8,043,486 121,570 10,314,534 3,661,181
$13,005,116 $ 29,281 $8,057,101 $ 138,125 $11,008,578 $3,663,928
.e notes to the financial statements are an integral part of this statement.
86
Special Revenue Funds
Debt Service
Fund
Other
Special Police Section 8 Special
Revenue Asset Housing Benefit
Funds Forfeiture Authority Districts
Storm Tyler
State Water Court Hosp Grove
Grants Program Apartments COPs
$271,278 $589,179 $$3,037,766 $ 303,045 $1,355,214 $ 381,965 $ 437,805
986
706,777
282,297
18,155
662,816
77,901
$271,278 $589,179 $990,060 $3,055,921 $ 303,045 $1,355,214 $ 381,965 $1,178,522
54,375
529,184
60,214
124,363 31,714 132,920
20,402
643,773 124,363 31,714 132,920 20,402
282,297
659,500
32,459 16,027 128,451 11,813 341,855
116,004
238,819 473,175 47,963
845,113
1,957,994
57,238
202,280
62,136
818,303 361,563 519,022
271,278 589,179 346,287 2,931,558 271,331 1,222,294 361,563 1,178,522
$271,278 $589,179 $990,060 $3,055,921 $ 303,045 $1,355,214 $ 381,965 $1,178,522
87
CITY OF CARLSBAD
Combining Balance Sheet
Nonmajor Governmental Funds (Continued)
June 30,2002
ASSETS
Cash and investments
Assessment
and Other
Districts
$2,405,813
Federal
Grants
$
General
Capital
Construction
$11,942,010
Infrastructure
Replacement
$ 8,407,831
Other
Capital
Project
Funds
$1,108,150
Receivables:
Taxes
Accrued interest
Accounts, net
Due from other governments
Prepaid items
Restricted assets:
Cash and investments
Accrued interest receivable
Loan receivables
218,982
332,960
Advances to other funds
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accrued liabilities
Due to other funds
Deposits payable
Due to to other governments
Advances from other funds
Deferred revenue
Total liabilities
-
$2,405,813
28,482
1,140,854
1,169,336
-
$ 332,960
57,828
275,132
332,960
5,070,854
$17,012,864 :
34,102
94,875
128,977
-
$ 8,407,831 $1,327,132
101,888 176,348
101,888 176,348
Fund balances:
Reserved for:
Loans receivable
Prepaid items
Debt service
Advances to other funds
Flower fields preservation
Low and moderate income housing
Encumbrances
Unreserved:
Designated for approved capital projects
Designated for continuing appropriations
Undesignated
Total fund balances
Total liabilities and fund balances
345,070
495,176
396,231
5,070,854
938,722
4,665,433
6,208,878
200,583 157,210
1,175,226 578,855
6,930,134 414,719
1,236,477 16,883,887 8,305,943 1,150,784
$2,405,813 $ 332,960 $17,012,864 $ 8,407,831 $1,327,132
The notes to the financial statements are an integral part of this statement.
Capital Project Funds
Planned
Local
Drainage
Facilities
$ 8,070,239
212,244
$8,282,483
Rancho
Santa Fe Traffic
Road Redevelopment Sales Tax/ State Impact
Project Agency TransNet Grants Projects
$19,961,516 $ 1,101,022 $8,160,141 $ 486,544 $6,335,998
6,259
1,342
61,702 263,165
$19,961,516 $ 1,108,623 $8,221,843 $ 749,709 $6,335,998
Total Other
Governmental
Funds
$ 96,079,726
6,502
6,344
451,734
1,420,243
282,297
662,816
77,901
9,643,724
9,542,798
$ 118,174,085
84,193
212,244
296,437
621,450
4,754,233
2,610,363
7,986,046
$ 8,282,483
54,702 25,814 116,594 30,629 702
54,702 25,814 116,594 30,629 702
762,967 33,826 2,371,333 14,934 104,985
3,113,820 468,648 4,254,350 602,848 4,136,697
16,030,027 580,335 1,479,566 101,298 2,093,614
19,906,814 1,082,809 8,105,249 719,080 6,335,296
$19,961,516 $ 1,108,623 $8,221,843 $ 749,709 $6,335,998
1,826,398
810,264
80,616
4,222
1,140,854
307,119
4,169,473
9,643,724
282,297
659,500
9,542,798
935,000
631,865
10,157,853
19,525,459
31,099,739
31,526,377
114,004,612
$ 118,174,085
89
CITY OF CARLSBAD
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2002
Revenues:
Taxes
Intergovernmental
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 expenditures
Other financing sources (uses):
Transfers in
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 (deficits) at end of year
Affordable
Housing
$
36,616
502,215
704,909
7,500
1,251,240
183,992
-
1,113
769
185,874
1,065,366
-
1,065,366
11,925,532
$ 12,990,898
Community
Development Donations
Block Grant and Bequests
$ - $ -
413,549
44,724 474,696
145,012
112,622
1,100
458,273 733,430
217,577
217,641
75,350
150,458
33,778
477,163 217,641
(18,890) 515,789
-
(18,890) 515,789
7,436 7,527,697
$ (11,454) $8,043,486
Federal
Grants
$
178,423
9,267
97,831
-
285,521
53,623
207,044
50,256
-
310,923
(25,402)
7,492
7,492
(17,910)
139,480
$ 121,570
Low and
Moderate
Gas Income
Tax Housing
$ 1,572,165 $ 497,620
424,706 113,969
-
1,996,871 611,589
63,614
1,866,937
524
377
1,866,937 64,515
129,934 547,074
111,924
(7,500)
104,424
234,358 547,074
10,080,176 3,114,107
$10,314,534 $3,661,181
The notes to the financial statements are an integral part of this statement.
90
Special Revenue Funds
Other
Special
Revenue
Funds
$
19,031
19,031
111, 768
22,644
134,412
(115,381)
-
(115,381)
386,659
Police
Asset
Forfeiture
$
49,650
34,626
84,276
5,724
5,724
78,552
(7,492)
(7,492)
71,060
518,119
Section 8
Housing
Authority
$
3,899,081
2,621
2,061
3,903,763
3,862,491
2,947
2,135
3,867,573
36,190
-
36,190
310,097
Debt Service
Fund
Special Storm Tyler
Benefit State Water Court Hosp Grove
Districts Grants Program Apartments COPs
$C C c cJ> ~ J> M> J>
265,934
1,680,638 - - 4,612
186,158 30,129 116,497 385,302 94,249
120,500 ...
1,987,296 296,063 116,497 389,914 94,249
363,831
240,627
33,418 - - -
2,085,290 - 730,348
37,044
540,000
214,515
2,085,290 397,249 767,392 240,627 754,515
(97,994) (101,186) (650,895) 149,287 (660,266)
1,873,189 - 800,000
(364,162)
(364,162) 1,873,189 - 800,000
(97,994) (465,348) 1,222,294 149,287 139,734
3,029,552 736,679 - 212,276 1,038,788
$271,278 $589,179 $346,287 $2,931,558 $271,331 $1,222,294 $361,563 $1,178.522
91
CITY OF CARLSBAD
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds (Continued)
For the Year Ended June 30,2002
Revenues:
Taxes
Intergovernmental
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 expenditures
Other financing sources (Uses):
Transfers in
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
Assessment
and Other
Districts
$
130,955
1,047,160
76,015
1,254,130
434,694
701,738
1,136,432
117,698
-
117,698
1,118,779
$1,236,477
Other
General Capital
Federal Capital Infrastructure Project
Grants Construction Replacement Funds
$ - $ - $ 121,465 $
342,827 - - 218,982
1,936,574 554,919 94,561
89,889
826,506
342,827 2,763,080 676,384 403,432
342,827 1,475,917 842,691 662,742
342,827 1,475,917 842,691 662,742
1,287,163 (166,307) (259,310)
1,515,428 3,000,000 33,751
(300,000)
1,515,428 3,000,000 (266,249)
2,802,591 2,833,693 (525,559)
14,081,296 5,472,250 1,676,343
$ - $16,883,887 $ 8,305,943 $1,150,784
The notes to the financial statements are an integral part of this statement.
92
Capital Project Funds
Planned Rancho
Local Santa Fe Traffic
Drainage Road Redevelopment Sales Tax/ State Impact
Facilities Project Agency TransNet Grants Projects
q> - j> - 41 •* j> ~ Ip ~4>
25,449 - - 1,661,702 1,032,174
10,016
.
483,661 1,155,215 65,202 495,056 45,179 364,405
-
668,726 1,650,250 - - - 860,275
.
463,300 5,500 - - 17,994
1,177,836 3,268,765 80,718 2,156,758 1,077,353 1,242,674
408,337 - 6,772
.
.
.
.
394,569 1,100,912 52,426 6,283,131 649,773 193,236
1,506
1,092
394,569 1,100,912 463,361 6,283,131 656,545 193,236
783,267 2,167,853 (382,643) (4,126,373) 420,808 1,049,438
50,000 474,765
(33,751) - (1,939,043)
16,249 474,765 (1,939,043)
783,267 2,167,853 (366,394) (3,651,608) (1,518,235) 1,049,438
7,202,779 17,738,961 1,449,203 11,756,857 2,237,315 5,285,858
$7,986,046 $19,906,814 $ 1,082,809 $8,105,249 $ 719,080 $6,335,296
Total Other
Governmental
Funds
$ 2,191,250
8,038,121
1,731,882
49,650
7,763,917
120,500
5,166,221
210,453
1,399,976
26,671,970
849,803
423,178
4,568,301
569,871
2,815,638
14,752,193
696,548
252,666
24,928,198
1,743,772
7,866,549
(2,651,948)
5,214,601
6,958,373
107,046,239
$ 114,004,612
93
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds
Year Ended June 30,2002
Affordable Housing
Total revenues
Total expenditures
Net change in fund balance
Community Dev Block Grant
Total revenues
Total expenditures
Net change in fund balance
Donations and Bequests
Total revenues
Total expenditures
Net change in fund balance
Federal Grants
Total revenues
Total expenditures
Net change in fund balance
Gas Tax
Total revenues
Total expenditures
Net change in fund balance
Low & Moderate Income Housing
Total revenues
Total expenditures
Net change in fund balance
Other Special Revenue Funds
Total revenues
Total expenditures
Net change in fund balance
Budget
$ 1,010,000
284,516
725,484
737,688
1,423,199
(685,511)
223,432
592,836
(369,404)
278,429
425,634
(147,205)
1,550,000
6,628,850
(5,078,850)
538,424
143,513
394,911
15,000
171,514
(156,514)
Actual
Amounts
(Budgetary
Basis)
$ 1,251,240
212,525
1,038,715
458,273
959,856
(501,583)
733,430
265,286
468,144
285,521
312,706
(27,185)
1,996,871
5,381,699
(3,384,828)
611,589
67,149
544,440
19,031
166,871
(147,840)
Variance
Favorable
(Unfavorable)
$ 241,240
71,991
313,231
(279,415)
463,343
183,928
509,998
327,550
837,548
7,092
112,928
120,020
446,871
1,247,151
1,694,022
73,165
76,364
149,529
4,031
4,643
8,674
94
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds (Continued)
Year Ended June 30, 2002
Police Asset Forfeiture
Total revenues
Total expenditures
Net change in fund balance
Section 8 Housing Authority
Total revenues
Total expenditures
Net change in fund balance
Special Benefit Districts
Total revenues
Total expenditures
Net change in fund balance
State Grants
Total revenues
Total expenditures
Net change in fund balance
Storm Water Program
Total revenues
Total expenditures
Net change in fund balance
Tyler Court Apartments
Total revenues
Total expenditures
Net change in fund balance
Totals
Total revenues
Total expenditures
Net change in fund balance
Budget
50,000
130,602
(80,602)
4,650,604
4,758,456
(107,852)
2,028,182
3,084,499
(1,056,317)
240,009
534,214
(294,205)
1,878,240
(1,878,240)
355,197
269,116
86,081
11,676,965
20,325,189
$ (8,648,224) $
Actual
Amounts
(Budgetary
Basis)
84,276
5,724
78,552
3,903,763
3,883,600
20,163
1,987,296
2,213,741
(226,445)
296,063
409,062
(112,999)
116,497
1,109,247
(992,750)
389,914
240,627
149,287
12,133,764
15,228,093
1 (3,094,329) $
Variance
Favorable
(Unfavorable)
34,276
124,878
159,154
(746,841)
874,856
128,015
(40,886)
870,758
829,872
56,054
125,152
181,206
116,497
768,993
885,490
34,717
28,489
63,206
456,799
5,097,096
5,553,895
95
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Debt Service Funds
Year Ended June 30,2002
Budget
Actual
Amounts
(Budgetary
Basis)
Variance
Favorable
(Unfavorable)
Redevelopment Areas
Total revenues
Total expenditures
Net change in fund balance
1,540,000
1,742,600
1,979,377
1,723,289
439,377
19,311
(202,600) $256,088 $458,688
96
97
CITY OF CARLSBAD
Combining Statement of Net Assets
Internal Service Funds
June 30,2002
ASSETS
Current assets:
Cash and investments
Receivables:
Accounts, net
Inventory
Prepaid items
Total current assets
Noncurrent assets:
Capital assets:
Machinery and equipment
Less accumulated depreciation
Total capital assets (net of accumulated
depreciation)
Total noncurrent assets
Total assets
LIABILITIES
Current liabilities:
Accrued liabilities
Due to other funds
Estimated claims payable
Current portion of long-term debt
Total current liabilities
Noncurrent liabilities:
Capital leases payable
Total noncurrent liabilities
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Fleet
Management
$ 6,070,719
22,472
85,815
-
6,179,006
11,413,022
(5,721,162)
5,691,860
5,691,860
11,870,866
109,056
-
2,367
111,423
4,952
4,952
116,375
5,684,541
6,069,950
$ 11,754,491
Health Information
Insurance Technology
$ 724,102 $ 2,818,297
614
-
58,686 12,115
783,402 2,830,412
2,730,986
(1,552,214)
1,178,772
1,178,772
783,402 4,009,184
44,521 147,275
-
324,340
2,952
368,861 150,227
4,968
4,968
368,861 155,195
1,170,852
414,541 2,683,137
$ 414,541 $ 3,853,989
The notes to the financial statements are an integral part of this statement.
98
Records
Management
$
_
-
-
-
235,365
(86,712)
148,653
148,653
148,653
Risk Workers'
Management Compensation
$ 2,923,273 $ 1,818,375
.
-
-
2,923,273 1,818,375
2,484
(1,449)
1,035
1,035
2,924,308 1,818,375
Total
$ 14,354,766
23,086
85,815
70,801
14,534,468
14,381,857
(7,361,537)
7,020,320
7,020,320
21,554,788
54,628
101,482
-
-
156,110
46,305 6,284
-
1,001,635 1,159,351
-
1,047,940 1,165,635
408,069
101,482
2,485,326
5,319
3,000,196
9,920
9,920
156,110 1,047,940 1,165,635 3,010,116
148,653
(156,110)
1,035
1,875,333 652,740
7,005,081
11,539,591
(7,457) $ 1,876,368 $ 652,740 $ 18,544,672
99
CITY OF CARLSBAD
Combining Statement of Revenues, Expenses and Changes in Net Assets
Internal Service Funds
For the Year Ended June 30,2002
Operating revenues:
Other charges for services
Miscellaneous
Total operating revenues
Operating expenses:
Depreciation
Fuel and supplies
Claims expense
General and administrative
Fleet
Management
$ 2,843,183
103,196
2,946,379
1,126,737
440,363
-
1,226,578
Health Information
Insurance Technology
$ 2,712,833 $ 3,646,212
-
2,712,833 3,646,212
461,992
15,117
2,464,033
3,154,830
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Income from property and investments
Gain (loss) on sale of property
Total nonoperating revenues (expenses)
Income (loss) before transfers and
capital contributions
Transfers in
Transfers out
Capital contributions
Change in net assets
Total net assets at beginning of year
Total net assets at end of year
2,793,678
152,701
541,829
143,855
685,684
11,068,807
2,464,033
248,800
289,329
289,329
125,212
3,631,939
14,273
347,881
41,247
389,128
40,529 154,031
40,529 154,031
168,304
168,304
3,685,685
11,754,491 $ 414,541 $ 3,853,989
100
Records Risk
Management Management
$ 788,100 $ 737,160
10,300
788,100 747,460
47,375 497
-
1,125,533
922,384 247,944
969,759 1,373,974
(181,659) (626,514)
176,949
-
176,949
(181,659) (449,565)
1 74,202
_
(7,457) (449,565)
2,325,933
$ (7,457) $ 1,876,368
Workers'
Compensation
$ 536,690 !
186,964
723,654
-
939,247
147,446
1,086,693
(363,039)
108,587
-
108,587
(254,452)
-
.
(254,452)
907,192
$ 652,740 1
Totals
£ 11,264,178
300,460
11,564,638
1,636,601
455,480
4,528,813
5,699,182
12,320,076
(755,438)
827,977
41,247
869,224
113,786
174,202
143,855
431,843
18,112,829
5 18,544,672
101
CITY OF CARLSBAD
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2002
Cash flows from operating activities:
Receipts from customers and users
Payments to suppliers
Payments to employees
Internal activity - payments to other funds
Claims paid
Other receipts (payments)
Net cash provided by (used in) operating activities
Cash flows from capital and related financing activities:
Purchases of capital assets
Cash flows from investing activities:
Interest on investments
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The notes to the financial statements are an integral part of this statement.
Fleet Health
Management Insurance
$ 2,843,182 $ 2,713,536
(1,155,099)
(478,994)
(295,951)
(2,376,485)
92,588
1,005,726 337,051
(1,082,509)
348,562 40,529
271,779 377,580
5,798,940 346,522
$ 6,070,719 $ 724,102
Information
Technology
$ 3,646,212
(1,556,392)
(1,302,108)
(321,490)
-
-
466,222
(134,544)
154,031
485,709
2,332,588
$ 2,818,297
102
Records Risk Workers'
Management Management Compensation Total
$ 788,100 $ 737,160 :
(283,071)
(386,966) (179,066)
(96,237) (93,126)
(719,317)
266,768
21,826 12,419
(21,826)
176,949
189,368
2,733,905
$ 536,690 1
-
(88,170)
(65,394)
(743,463)
186,964
(173,373)
108,587
(64,786)
1,883,161
J 11,264,880
(2,994,562)
(2,435,304)
(872,198)
(3,839,265)
546,320
1,669,871
(1,238,879)
828,658
1,259,650
13,095,116
$ 2,923,273 $ 1,818,375 $ 14,354,766
103
CITY OF CARLSBAD
Combining Statement of Cash Flows
Internal Service Funds (Continued)
For the Year Ended June 30,2002
Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities:
Operating income (loss)
Adjustments to reconcile operating income to net cash
provided by operting activities:
Depreciation and amortization
Change in assets and liabilities:
(Increase) decrease in receivables
(Increase) decrease in inventory
(Increase) decrease in prepaid items
Increase (decrease) in accrued liabilities
Increase (decrease) in estimated claims payable
Net cash provided by (used in) operating activities
Noncash capital financing activities:
Capital assets contributed by other funds
Fleet
Management
Health
Insurance
Information
Technology
152,701 $ 248,800 $ 14,273
1,126,737
(10,608)
22,185
(285,289)
461,992
703
(8,396)
44,521
51,423
(12,115)
2,072
1,005,726 $ 337,051 $ 466,222
$ 143,855 $
The notes to the financial statements are an integral part of this statement.
104
Records Risk Workers'
Management Management Compensation Total
$ (181,659) $ (626,514) $ (363,039) $ (755,438)
47,375 497 - 1,636,601
256,468 - 246,563
22,185
(20,511)
156,110 20,334 (210) (62,462)
361,634 189,876 602,933
21,826 $ 12,419 $ (173,373) $ 1,669,871
$ 174,202 $ - $ - $ 318,057
105
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements
$15,495,000 -1993 Carlsbad Housing and
Redevelopment Commission Tax Allocation Bonds
Fiscal Year
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
Interest Due
September 1
$ 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
S 4,822,798
Interest Due
March 1
$ 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
-
$ 4,466,448
Total
Interest
$ 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
$ 9,289,246
Principal Due Total Annual
September 1 Debt Service
$ 340,000 $ 1,043,777
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
,045,403
,045,977
,040,634
,044,240
,041,665
,042,909
,042,840
,041,459
,038,765
,039,627
,038,915
,036,628
,037,634
,036,802
,034,134
,034,496
,032,759
,028,707
,027,200
,028,175
1,000,000 1,026,500
$ 13,540,000 $22,829,246
106
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements (Continued)
$6,595,000 - 1997 Hosp Grove Certificates of Participation
(1988 Refunding)
Fiscal Year
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Totals
$1,199,950 -HUD Section
Fiscal Year
2002-03
2003-04
Totals
Interest Due
August 1
$ 100,608
88,743
76,058
62,418
48,448
33,373
17,273
$ 426,921
108 Loan
Interest Due
August 1
$ 13,621
7,030
S 20,651
Interest Due
February 1
$ 88,742
76,057
62,417
48,447
33,372
17,272
$ 326,307
Interest Due
February 1
$ 7,030
$ 7,030
Total
Interest
$ 189,350
164,800
138,475
110,865
81,820
50,645
17,273
$ 753,228
Total
Interest
$ 20,651
7,030
$ 27,681
Principal Due
August 1
$ 565,000
590,000
620,000
635,000
670,000
700,000
735,000
$ 4,515,000
Principal Due
August 1
$ 160,000
169,950
$ 329,950
Total Annual
Debt Service
$ 754,350
754,800
758,475
745,865
751,820
750,645
752,273
$ 5,268,228
Total Annual
Debt Service
$ 180,651
176,980
$ 357,631
107
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements (Continued)
$7,400,000 - 1997 Carlsbad Municipal Water District
Certificates of Participation (1988 Refunding Project)
Fiscal Year
2002-03
2003-04
Totals
$11, 080,000 -Encina
Installment Purchase
Fiscal Year
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
Interest Due
November 1
$ 49,930
25,850
$ 75,780
Financing Joint Powers
Agreement
Interest Due
August 1
$ 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
$ 1,747,971
Interest Due
May 1
$ 49,930
25,850
$ 75,780
Authority
Interest Due
February 1
$ 215,278
200,978
188,603
172,791
156,153
139,353
122,816
105,191
86,228
66,241
45,228
23,191
-
$ 1,522,051
Total
Interest
$ 99,860
51,700
S 151,560
Total
Interest
$ 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
S 3,270,022
Principal Due
May 1
$ 1,120,000
1,175,000
$ 2,295,000
Principal Due
August 1
$ 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
$ 8,870,000
Total Annual
Debt Service
S 1,219,860
1,226,700
$ 2,446,560
Total Annual
Debt Service
$ 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
$ 12,140,022
108
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements (Continued)
$2,331,489 - Carlsbad Municipal Water District
State Loan for Reclaimed Water Projects
Fiscal Year
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
$2,618,908 - Golf Course Accrued Assessment
Fiscal Year
2002-03
2003-04
2004-05
2005-06
Interest Due
November 30
$ 45,653
42,350
38,952
35,455
31,857
28,155
24,345
20,425
16,391
12,240
7,969
2,680
$ 306,472
Interest
$ 37,465
29,103
20,173
10,425
Principal Due
November 30
$ 113,874
117,177
120,575
124,072
127,670
131,372
135,182
139,102
143,136
147,287
151,558
123,219
$ 1,574,224
Principal
$ 177,912
186,060
196,925
60,128
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
125,899
$ 1,880,696
Total Annual
Debt Service
$ 215,377
215,163
217,098
70,553
Totals 97,166 $ 621,025 718,191
109
110
STATISTICAL SECTION
Ill
CITY OF CARLSBAD
Government-wide Expenses by Function
Fiscal
Year
2001-02
General
Government
$7,599,821
Public
Safety
Community
Development
Community
Services
Public
Works
$25,659,586 $10,539,139 $13,269,566 $15,015,344
Interest on
Long-Term
Debt
$1,673,516
(i)The City first began issuing Government-wide statements in fiscal year 2001-2002.
GOVERNMENT-WIDE EXPENSES BY FUNCTION
2001-2002
Carlsbad Municipal
Water District
19%
Interest on Long-
Term Debt
2%
Public Works
15%
Golf Course
1%
General Government
8%
Community
Services
13%
Public Safety
26%
Solid Waste
1%
Community
Development
11%
Source: City of Carlsbad Comprehensive Annual Financial Reports
112
Carlsbad
Municipal
Water Golf Solid
District Course Sewer Waste Total
$19,310,792 $98,565 $6,168,690 $212,605 $99,547,624
113
CITY OF CARLSBAD
Government-wide Revenues
Fiscal
Year
2001-02(i)$40,142,313
PROGRAM REVENUES
Charges for
Services
Operating Grants
and
Contributions
Capital Grants
and
Contributions
S,562,412 $43,007,215
'The City first began issuing Government-wide statements in fiscal year 2001-2002.
GOVERNMENT-WIDE REVENUES BY FUNCTION
2001-2002
Investments
13%
Vehicle License
Fees
2%
Income from
Property and Misccllaneous
1%
Charges for
Services
21%
Operating
Grants and
Contributions
4%
Capital Grants
and
Contributions
22%
Source: City of Carlsbad Comprehensive Annual Financial Reports
114
GENERAL REVENUES
Vehicle Income from
License Property and
Taxes Fees Investments Miscellaneous Total
$70,676,433 $4,675,269 $25,105,269 $1,564,886 $193,733,797
115
CITY OF CARLSBAD
General Governmental Expenditures by Function'''
Last Ten Fiscal Years
Fiscal
Year12'
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
Total
$ 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
112,513,403
General
Government
$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
8,414,743
Public
Safety
$ 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
25,598,466
Community
Development
$ 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
10,315,783
(1)Includes General, Special Revenue, Debt Service, and Capital Projects Funds.
Beginning in fiscal year 1997-98, Park Maintenance expenditures are included in Public Works instead of Community Services.
GENERAL GOVERNMENTAL EXPENDITURES
BY FUNCTION
2001-2002
Capital Projects
33%
Public Works
14%
Debt Service
2%
Community
Services
11%
Source: Cily of Carlsbad Comprehensive Annual Financial Reports
General
Government
7%
Public Safety
23%
Community
Development
116
Community
Services
$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
12,448,725
Public
Works
$ 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
15,404,566
Capital
Outlay
$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
37,503,175
Debt
Service
$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
2,827,945
SPENDING ON CAPITAL PROJECTS
LAST TEN YEARS
TOTAL EXPENDITURES
LAST TEN YEARS
$120 n
Fiscal Year Fiscal Year
117
CITY OF CARLSBAD
General Governmental Revenues by Source1"
Last Ten Fiscal Years
Fiscal
Year
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
Total(2)
$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
131,323,111
Property
Taxes
$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
28,495,155
Sales
Taxes
$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
21,660,902
Transient
Occupancy
Taxes
$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
8,533,329
Business
Licenses
$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
2,440,387
Other
Taxes
$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
10,398,486
Includes General, Special Revenue, Debt Service, and Capital Projects Funds.
(2) Includes interdepartmental services category added in 1991-1992, donations, and miscellaneous revenues.
GENERAL GOVERNMENTAL REVENUE
LAST TEN YEARS
PROPERTY TAX
AND SALES TAX REVENUE
LAST TEN YEARS
160 -
140 -V3
.1 12° '
§ 10° "
.£ 80 -
£ 60-
o 40-
20 •
0 -f
'- l
-
-
f3*
1
^.
-\
^LJ
* '
^
!
s*"
-
n
-
*?
1
r?!
;-
jS.
1
\
00 0VON 0\ C\ON CS CN
O — Mo oo o
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Reports
Fiscal Year
D Property Tax m Sales Tax
118
Inter-
Governmental
$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
14,266,527
Licenses
and
Permits
$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
1,998,210
Charges for
Services
$ 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
7,751,065
Fines and
Forfeitures
$231,877
231,454
263,411
335,395
317,892
331,318
935,955
839,831
888,608
947,183
Income from
Property and
Investments
$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
18,700,470
Contributions
from Property
Owners
$ 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
11,250,770
Other(2)
$ 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
4,880,627
TRANSIENT OCCUPANCY TAX
LAST TEN YEARS
CHARGES FOR SERVICES
LAST TEN YEARS
co
oQ
8 -
6 •
£?\ <"Zft
f> TT V}OS CN ONa\ o\ o\
Fiscal Year
12
«, 10co
= 8
it e=
~-~-^*HI— *-^-CJ<SC4
Fiscal Year
119
CITY OF CARLSBAD
Computation of Legal Debt Margin
June 30, 2002
Net assessed valuation $ 11.850.678.972
Debt limit (15% of 25% of net assessed valuation as adjusted) 444.400.461
Amount of debt applicable to debt limit:
Bonded debt 13,540,000
Certificates of participation 4,515,000
Obligations under capital leases 790.907
Total amount of debt applicable to debt limit 18.845.907
Legal debt margin $ 425.554.554
Percent of debt limit 4.2%
Source: County of San Diego Office of the Auditor and Controller
120
CITY OF CARLSBAD
Schedule of Direct and Overlapping Bonded Debt
June 30, 2002
2001-2002 Assessed Valuation $ 12,220,682,340
Redevelopment Incremental Valuation 230,846,168
Adjusted Assessed Valuation $ 11,989,836,172
OVERLAPPING TAX & ASSESSMENT DEBT: % Applicable Debt 6/30/02
San Diego County Water Authority 6.390% $ 205,758
Metropolitan Water District 1.134 5,704,871
Carlsbad Unified School District 97.966 24,872,673
Carlsbad Unified School District Lease Tax Obligations 97.966 1,449,897
Carlsbad Unified School District Community Facilities District No.l 100.000 10,775,000
Oceanside Unified School District 0.009 4,451
Vista Unified School District 0.059 54,280
Encinitas Union School District 28.045 8,035,921
Encinitas Union School District Lease Tax Obligations 28.045 597,359
San Marcos Unified School District School Facilities Improvement District 36.671 7,459,988
San Marcos Unified School District Community Facilities District No. 5 100.000 12,550,000
San Dieguito Union High School District Community Facilities District No. 94-1 100.000 299,221
San Dieguito Union High School District Community Facilities District No. 94-2 98.327 21,517,291
San Dieguito Union High School District Community Facilities District No. 95-2 36.882 332,724
Olivenhain Municipal Water District, Assessment District No. 96-1 22.480 4,744,404
City of Carlsbad 1915 Act Bonds 100.000 38,955,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT: $137,558,838
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
San Diego County General Fund Obligations 6.159% $ 32,014,239
San Diego County Pension Obligations 6.159 17,423,811
San Diego County Superintendent of Schools General Fund Obligations 6.159 130,725
Mira Costa Community College District Certificates of Participation 27.386 1,717,102
Carlsbad Unified School District General Fund Obligations 97.966 57,388,483
San Marcos Unified School District Certificates of Participation 29.717 182,760
Encinitas Union School District Certificates of Participation 28.045 918,473
Other School District Certificates of Participation Various 263,276
City of Carlsbad General Fund Obligations 100.000 4,515,000
TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT: $ 114,553,869
COMBINED TOTAL DEBT: $ 252,112,707(l)
(l) Excludes tax and revenue anticipation notes, revenue, mortgage revenue, and tax allocation bonds and nonbonded capital lease
obligations.
Ratios to 2001-02 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.13 %
Ratios to Adjusted Assessed Valuation:
Combined Direct Debt ($4,515,000) 0.04 %
Combined Total Debt 2.10%
SHARE OF AUTHORIZED AND UNSOLD GENERAL OBLIGATION BONDS:
Carlsbad Municipal Water District, I.D. No. 1 $ 99,384
Carlsbad Municipal Water District, I.D. No. 3 200,000
Source: California Municipal Statistics, Inc.
121
CITY OF CARLSBAD
Construction and Business Activity
Last Ten Fiscal Years
Fiscal
Year
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
Building
Permit
Revenue
B 234,063
365,571
644,131
917,788
1,262,177
2,094,523
2,524,063
2,156,584
2,102,074
1,085,819
Percent
Change
6.7
56.1
76.2
42.4
37.6
65.9
20.5
(14.6)
(2.5)
(48.3)
Estimated
Valuation
$ 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
272,671,912
Business
License
Revenue
$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
2,440,387
Percent
Change
17.7
2.1
13.9
19.7
1.3
6.2
8.4
7.2
23.4
6.1
Construction
Deposits
$5,224,780
4,474,153
5,667,913
5,239,235
6,822,684
5,857,013
5,779,355
6,132,355
4,782,012
5,319,736
S600 -
$500 •
= $400 -
c $300
£ $200 -oQ
$100 -
$0
ESTIMATED VALUATION OF BUILDING
PERMITS ISSUED - LAST TEN YEARS
Fiscal Year
Source: City ol'Carlsbad Comprehensive Annual Financial Reports
122
CITY OF CARLSBAD
Water Enterprise
Revenue Bond Coverage
Last Ten Fiscal Years
Fiscal
Year
Gross
Revenue*''
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
$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
24,925,994
Net Revenue
Total ^ Available for
Expenses'21 Debt Service
$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
19,310,792
$ 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
5,615,202
Principal
$ 730,000
775,000
825,000
880,000
1,040,000
955,000
995,000
1,040,000
1,075,000
1,120,000
Debt Service Requirements
Interest Total Coverage
$ 798,696
751,248
700,098
644,822
494,954
264,695
227,450
187,650
145,010
99,860
$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
1,219,860
0.55
1.90
2.11
2.07
2.75
3.09
2.63
2.91
4.23
4.60
(I)Includes operating and non-operating revenues.
Includes operating and non-operating expenses.
WATER ENTERPRISE GROSS REVENUE
VS. TOTAL EXPENSES
LAST TEN YEARS
$25 -i
Fiscal Year
DGROSS REVENUE •TOTAL EXPENSES
WATER ENTERPRISE REVENUE
AVAILABLE FOR DEBT SERVICE
LAST TEN YEARS
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Reports
123
CITY OF CARLSBAD
Schedule of Assessed Valuation
Last Ten Fiscal Years
Fiscal Year
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
Secured Property
$ 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
11,586,003,633
Unsecured Property
$ 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
519,294,090
Less Property
Exemptions
$ 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
115,461,551
(i)Does not include redevelopment incremental valuation or State-assessed unitary values.
Source: County of San Diego Office of the Auditor and Controller
124
Total
Assessed Valuation
$ 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
11,989,836,172
(i)
Homeowner's
Exemptions
$ 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
139,157,200
Net Assessed
Valuation
$ 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
11,850,678,972
Percentage
Change
2.7
(1.1)
(2.9)
0.3
2.8
7.0
15.1
20.3
18.0
13.0
NET TAXABLE VALUE
LAST TEN YEARS
$12 n
Fiscal Year
125
Year
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
20 10 (Estimate)
2020 (Estimate)
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
Population'"
66,481
66,652
66,479
68,010
70,532
73,688
77,550
82,030
83,469
88,000
98,588<2)
103,799<2)
CITY OF CARLSBAD
Demographic Statistics
Last Ten Fiscal Years
Population
Percent
Change
County
Population''"
1.8
0.9
(0.2)
2.3
3.7
4.5
5.2
5.8
1.8
5.4
12.0
5.3
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
2,918,300
3,388,400'
3,863,500'
<3)
(3)
City
Population
Percent
of County
2.5
2.5
2.5
2.5
2.6
2.6
2.7
2.8
2.9
3.0
2.9
2.7
(1) Source: State Department of Finance.
(2) Source: Based on City of Carlsbad projected residential construction estimates in 2002-2003 Capital Improvement Program.
(3) Source: State Department of Finance Interim County Population Projections (June 2002).
POPULATION
LAST TEN YEARS
100,000 -'
90,000 • '
80,000 - '
70,000 - '
60,000 - '
50,000 - '
40,000 - '
30,000 - '
20,000 - '
10,000 • '
f~i
'
,
flCNCN
___
TfONos
— ™
£2
«nCNcs
__
£3
NOosOS
~
""**"
L_
l~0\o\
_
90o\o\
f~i
0>c\c\
~
J
0
0o
•
~
*m*m
—
00
~
~
™~™
£2
no0
~
•7
Fiscal Year
126
CITY OF CARLSBAD
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal
Year
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
Total
Current Levy
$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
23,554,392
Total Current
Collections
$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
22,705,762
% of Levy
Collected
91.3
93.7
90.5
93.9
94.5
95.2
95.4
95.5
95.8
96.4
PROPERTY TAX LEVIES & COLLECTIONS
LAST TEN FISCAL YEARS
Fiscal Year
D LEVIES M COLLECTIONS
Source: County of San Diego Office of the Auditor and Controller
127
CITY OF CARLSBAD
Principal Employers
2001-2002
FIRM PRODUCT/SERVICE EMPLOYEES
Manufacturing
Callaway Golf
Taylor Made Golf- Adidas Golf Company
ViaSat
Acushnet Golf
Ashworth
Melles-Griot, Inc.
Invitrogen
Beckman Coulter
Modern Postcard/The Iris Group, Inc.
Syntron Bioresearch, Inc.
The Upper Deck
Schumacher
Non-Manufacturing
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 Palisades
Gemological Institute of America
24-Hour Fitness
SOMC Group, Inc.
San Diego Gas & Electric Company
ISIS Pharmaceuticals
Costco Wholesale
Prescription Solutions
Toyota Carlsbad/Lexus
Federal Express
Golf Equipment
Golf Equipment
Data Communications
Golf Equipment
Golf Apparel
Laser Optics
Research Supplies
Medical Diagnostic Reagent
Custom Promotional Cards
Test Kits & Diagnostics
Sports Trading Cards
Chemical Purification Systems
Shopping Mall
Resort
Family Theme Park
Municipal Government
Hotel/Health Spa
Outlet Shopping Center
Education
Hotel Mgmt/Timeshare Development
Gemological School
Health Club Headquarters
Software Distributor
Power Generation
Research and Development
Grocer/Wholesale/Retail
Prescription Services
Car Dealership
Postal/Packaging/Shipping
2500
727
700
540
394
300
295
260
250
250
250
248
3000
1100
1100
1030
950
850
800
700
500
400
380
325
300
285
250
250
250
Source: City of Carlsbad, Chamber of Commerce
128
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
Craig Realty Group
CITY OF CARLSBAD
Principal Taxpayers
2001 - 2002
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
Real Estate
Percentage of Net
Assessed
Valuation Valuation(1)
$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
40,755,070
$1,300,840,218
2.8%
1.8%
1.7%
1.3%
1.1%
0.7%
0.6%
0.5%
0.5%
0.5%
0.4%
0.4%
12.4%
(1)Net assessed valuation for 2001-2002:$10,490,646,919
Source: County of San Diego Office of the Auditor and Controller
129
CITY OF CARLSBAD
Top 30 Sales Tax Generators
2001 -2002
Finn Product/Service
Aviara Resort Associates
Bob Baker Jeep
Bob Baker Volkswagen
Carlsbad Toyota
Costco Wholesale
Discover Infmiti Carlsbad
Dixon Ford
Ho elm Acura
Hoelin Honda
Invitrogen Corporation
J C Penney Company
Jim Finney Pontiac
Legoland
Lexus Carlsbad
Macy's Department Store
Pacific Sales Kitchen & Bath
Reliable Wholesale Lumber
Robinsons-May Department Store
Rorick Buick/Cadillac
Sears Roebuck & Company
Townsend Lincoln/Mercury
Toyota Motor Credit
Vons Grocery Company
Weseloh Chevrolet
Worthington Dodge
Hotel/Food Sales
Car Dealership
Car Dealership
Car Dealership
General Stores
Car Dealership
Car Dealership
Car Dealership
Car Dealership
Manufacturer of Research Supplies
Department Store
Car Dealership
Family Theme Park
Car Dealership
Department Store
Furniture/Appliance
Building Materials
Department Store
Car Dealership
Department Store
Car Dealership
Automobile Lessor
Grocery/Food Markets
Car Dealership
Car Dealership
Source: Municipal Resource Consultants (MRC)
130
CITY OF CARLSBAD
Miscellaneous Statistical Information
2001 - 2002
Date of Incorporation
Type of City
Form of Government
Area
Population (CA Dept of Finance Report 1/1/02)
Net Assessed Valuation
Number of Street Lights
Miles of Streets
July 16, 1952
General Law
Council/Manager
42.19 square miles
88,000
$11,850,678,972
6,138
281
Fire Protection:
Number of Stations
Number of Firefighters and Officers
Police Protection:
Number of Stations
Number of Sworn Police Officers
6
73
109
Municipal Water District:
Number of Customers
Number of Water Connections
Average Daily Consumption
Miles of Lines and Mains
Miles of Sewers
75,000
24,300
18.8 million gallons
400
149
Recreation and Culture:
Number of Parks
Acres of Parks (Improved Community and Special-Use Areas)
Acres of Open Space (Special Resource Areas and General
City-Owned Open Space)
Number of Pools
Number of Libraries
Number of Volumes
Total Number of Authorized Full-Time City Employees
37
214
490
1
2
280,458
642.75
Source: City of Carlsbad Finance Department
131
132