HomeMy WebLinkAbout; ; 2003-2004 CAFR; 2004-06-30OF CARLSE
CALIFORNIA
omprenensive
Annual Financial Report
ca/ Year Ended
une 3O. 2OO4
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FISCAL YEAR ENDED
JUNE 30, 2004
1635 Faraday Avenue, Carlsbad, CA 92008
Website: www.ci.carlsbad.ca.us
Prepared by the Finance Department
Photos on Cover: Background photo is of Stagecoach Park (photo taken by Tara Lee Torburn). Photo insets top to
bottom: Girl on spring horse at Stagecoach Park, one of the two lions by artist Nikki de Saint Phalle at Poinsettia Park,
the Caretaker's House at Leo Carrillo Ranch Historic Park.
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2004
TABLE OF CONTENTS
Pae
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 11
Location Map 12
List of City Officials 13
Organization Chart 14
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 and 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 Assets and Liabilities — Agency Funds 54
Notes to the Financial Statements 55
Supplementary Information
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds 80
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds 84
Combining Schedule of Revenues and Expenditures - Budget and Actual
(Budgetary Basis) - Special Revenue Funds 88
Combining Schedule of Revenue and Expenditures - Budget and Actual
(Budgetary Basis) - Debt Service Funds 90
Combining Statement of Net Assets-Internal Service Funds 92
Combining Statement of Revenues, Expenses and Changes in Net Assets -
Internal Service Funds 94
Combining Statement of Cash Flows - Internal Service Funds 96
Combining Statement of Changes in Assets and Liabilities - Agency Funds 100
Schedule of Annual Debt Service Requirements 102
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2004
TABLE OF CONTENTS (CONTINUED)
Page
STATISTICAL SECTION:
(Not covered by Independent Auditor's Report)
Government-wide Information:
Government-wide Expenses by Function 106
Government-wide Revenues 108
Fund Information:
General Governmental Expenditures by Function - Last Ten Fiscal Years 110
General Governmental Revenues by Source - Last Ten Fiscal Years 112
Computation of Legal Debt Margin 114
Schedule of Direct and Overlapping Bonded Debt 115
Construction and Business Activity - Last Ten Fiscal Years 116
Water Enterprise - Revenue Bond Coverage - Last Ten Fiscal Years 117
Schedule of Assessed Valuation - Last Ten Fiscal Years 118
Demographic Statistics - Last Ten Fiscal Years 120
Property Tax Levies and Collections - Last Ten Fiscal Years 121
Principal Employers, 2003-04 122
Principal Taxpayers, 2003-04 123
Top 30 Sales Tax Generators, 2003-04 124
Miscellaneous Statistical Information, 2003-04 125
INTRODUCTORY SECTION
Carlsbad City Council
2004
Five-Year Vision Statements
_^r^LTlr1LS~\ri£^
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...
* 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, (e.g., water, beach, circulation,
and environmental issues) important to local governments actively involves
addressing governmental issues at the local, state and national levels.
* Open government provides for the betterment of the community and encourages
in a non-partisan manner active citizen participation and involvement with the
City Council and the City's Boards and Commissions.
And Carlsbad Efficiently and Effectively...
* Delivers top-quality public services.
» Manages its environment proactively, including:
• Open space
. Wildlife habitats
• Water quality/conservation
• Beach erosion
• Air quality
• Resource conservation and waste reduction
* Promotes a safe and efficient integrated transportation system.
* Maintains citywide "small town" community spirit.
* Provides a community where continuous and life-long learning is supported and
encouraged for people of all ages.
» Looks ahead and works to anticipate changes that are required now in order to
make a better future for its citizens.
City of Carlsbad
Finance Department
September 30, 2004
Honorable Mayor, City Council,
and Citizens of the City of Carlsbad
CITY OF CARLSBAD
Carlsbad, California
LETTER OF TRANSMITTAL
2003-04 COMPREHENSIVE ANNUAL FINANCIAL REPORT
1 am pleased to present the 2003-04 Comprehensive Annual Financial Report of the City of Carlsbad. The
information found in this report is provided by management to the City Council and the public to assist
those interested in understanding the fiscal condition of the City as of June 30, 2004.
Management assumes full responsibility for the completeness and reliability of the information contained in
this report, based upon a comprehensive framework of internal control that it has established for this
purpose. 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.
State law and the City's Municipal Code require that an annual financial report is prepared. This report
fulfills that obligation. It has been prepared in conformity with generally accepted accounting principles
(GAAP) and with the financial reporting requirements prescribed by the Governmental Accounting
Standards Board (GASB). The independent auditing firm of McGladrey & Pullen, LLP have issued an
unqualified ("clean") opinion on the City of Carlsbad's financial statements for the year ended June 30,
2004. The independent auditor's report is located at the front of the financial section of this report.
Management's discussion & analysis (MD&A) immediately follows the independent auditor's report and
provides a narrative introduction, overview and analysis of the basic financial statements. MD&A
complements this letter of transmirtal and should be read in conjunction with it
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, 2004 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
3
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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
92,995, with an expected build-out population of 120,000 residents.
Industries in the City include 3 shopping centers; a regional mall, a specialty
outlet center and a community center; a major family theme park; an auto
mall; ovsr 30 hotels offering 3,500 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
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 provides a full range of services to its citizens and customers including:
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.
Budget Process
The Carlsbad Municipal Code
requires that the City Manager
annually prepare a budget for the
City Council with a message
describing important features, and be
responsible for 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.
City of Carlsbad 2003-04 Strategic Goals
Top-Quality Services - Be a city that provides exceptional services on a daily
basis.
Transportation - Provide and support a safe and efficient transportation system
that moves goods, services, and people through Carlsbad.
Balanced Community Development - Be a city that connects community,
place, and spirit through balanced and well-designed land uses.
Parks/Open Space/Trails - Acquire, develop, and maintain a broad range of
open space and recreational facilities that actively address citizen needs, that are
fiscally responsible, and are consistent with the General Plan and Growth
Management Standards.
Water — Ensure, in the most cost-effective manner reliable, water reliability to the
maximum extent practicable, to deliver high-quality potable and reclaimed water
incorporating drought-resistant community principles.
Environmental Management — Be an environmentally sensitive community by
focusing on: clean storm water, sewage collection and treatment, solid waste, and
cost-effective and efficient use of energy including alternative energy sources.
Financial Health — Pursue and implement proactive strategies that provide and
manage fiscal resources effectively.
Communication — Ensure that community members, Council, and staff are well
informed, leading to a more responsive government and a high level of citizen
confidence in government.
Learning — Promote and support continuous learning opportunities within the
community and the City organization.
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.
FACTORS AFFECTING FINANCIAL CONDITION
Economic Profile
Index of Leading Economic Indicators
San Diego County
145
140 -
135 -
130 -
125
Jan-02 Jul-02 Jan-03 Jul-03 Jan-04
Source: USD Center for Real Estate
Diversification of San Diego County's
employment base after the recession of the early
1990's has helped the region to weather the ups
and downs of the business cycles without the
dramatic declines seen in recent years in other
parts of the State. The leading indicators for the
San Diego region increased for the 13'
consecutive month in July 2004 (the most recent
data available). The indicators are published by
the University of San Diego School of Business
Administration and according to their report, "The
outlook is for solid growth in the local economy at
least through the first half of 2005. One topic that
is on the minds of many San Diegans is the state
of the local housing market. One concern is about
whether we are in a housing price "bubble" after years of double-digit growth in prices. Some people worry
about a repeat of the early 1990s, when housing prices dropped significantly after a large run up. The
circumstances are much different today than they were back then. In the 1990s, we had just come through a
period of huge residential construction, and the local economy was hit as the defense industry faced major
cutbacks. Today, the supply of housing is much tighter after years of slow construction activity, and the local
economy is experiencing solid job growth. Any weakness will likely be caused by a sharp increase in interest
rates from the current low levels, which I don't see in the short term. The outlook for the local housing market is
for a flattening of prices and more difficulty in selling, i.e., a longer time on the market, but no significant drop
in prices."
That is good news for Carlsbad as the strong demand
for housing has continued to push housing prices up
thereby increasing the assessed value base and property
taxes. The median price for a single-family home in
Carlsbad averaged $561,000 for calendar year 2003, a
17% increase from the previous year. Total assessed
property value in the City stands at over $14 billion,
double what it was just five years ago.
Median SFD Home Prices in Carlsbad
(in OOO's)
2003
In fiscal year 2004-05, the City expects to issue 1,198
residential permits, slightly higher than the 834 in
fiscal year 2003-04. The impediment to higher
development has been mainly due to the lack of supply
rather than a lack of demand. Over the next five years,
the City expects to add over 2,500 single-family homes
and 1,000 multi-family units to the residential housing stock in Carlsbad. The completion of these master
planned communities will signal the end to the large-scale residential developments in Carlsbad. As of 2004,
the City's residential housing stock is about 85% built out, with approximately 6,800 housing units remaining to
develop.
Carlsbad, like the region, has benefited from diversification of its employment base and its sources of revenue.
Although, commercial and industrial development has been sluggish recently, it is expected to pick up over the
next five years to average over 1.1 million square feet per year. Some of the major businesses in the City
include the Gemological Institute of America, ViaSat, Invitrogen, Callaway, Taylor Made, Upper Deck, and
many others.
Commercial development has brought much needed entertainment and shopping venues to citizens and visitors
alike, as well as generating additional sales taxes to help pay for City services. Carlsbad is home to Car Country
Carlsbad - an auto mall; the Carlsbad Company Stores - a specialty outlet center; Plaza Camino Real - a
regional shopping mall; and the most recent addition, the Forum at Carlsbad - a community shopping center with
retail shops, restaurants and other commercial sites.
100,000 -,
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
General Fund Revenues
94 95 96 97 98 99 00 01 02 03 04
D Property Tax
D Vehicle Lie Fees
D Sales Tax
• Franchise Taxes
ID Transient Occ Tax
Q All Others
Carlsbad's prime coastal location, its two
premier resort hotels, Legoland - a family
theme park, a regional airport, and its
many businesses, make it a popular
destination for both leisure and business
travelers. The City 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. There are over 3,500
hotel rooms available for visitors to
choose from in Carlsbad. Tourism in
Carlsbad, as in the rest of the state,
declined significantly following the
terrorist attacks of September 11, 2001.
The industry has rebounded and
Carlsbad's hotel tax revenue is expected to
reach back to pre-9/11 levels this year.
For fiscal year 2004-05, the City's revenue projections reflect increasing consumer confidence and the return of
job growth. Increases are expected in most of the tax revenues with overall General fund revenues increasing by
5%. The most significant area of risk in the forecast for Carlsbad is in the impact of the State of California's
budget deficit discussed below.
State of California Budget
The State of California has a significant budget deficit, which they have carried over from year to year by using
various sources of one-time revenues - including that of local governments. The State's budget for fiscal year
2004 took approximately $1.5 million from the City's General fund with the promise to pay it back in the future.
In addition, it authorized deficit reduction bonds, which are to be paid back through a series of
revenue shifts known as the "Triple Flip". This essentially results in the temporary swap of a
25% of the cities' share of sales tax in return for property tax. It should have no effect on the
amount of tax revenues the cities receive eventually, but it will result in the loss of some interest
earnings due to the delay in the timing of the receipt of the taxes.
The State's 2004-05 budget contains additional losses to city revenues. The budget calls for a "contribution"
from cities, counties and special districts totaling $1.3 billion in both the '05 and '06 fiscal years. For the City
of Carlsbad this means a loss of $1.8 million from the General fund and $220,000 from its Redevelopment
Agency in each of the next two years. In exchange for this two year "contribution" to the State, the Governor
has promised his support to pass a constitutional amendment that will provide cities protection from further
raids on their revenues by the State. While it would be preferable for the State to balance its budget without
impacting local government, if the State can limit the effects to those indicated in the proposed agreement and if
the promised revenue protections are achieved, the impact on Carlsbad will be manageable. The danger is that
these will not be enough and that further assaults on City revenue sources will occur.
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 are either constructed along with development or that a
financing plan is in place to pay for the facilities prior to the development of the property. Thus, the initial
capital facilities needed to support the growing population are provided without financially impacting the City or
its current residents. The City also prepares a 20+ year Capital Improvement Program. As part of the Capital
Improvement Program, the amounts needed to pay for the various projects as well as the operating budget
impacts are calculated. In this way, we can anticipate the effects of development from both a capital and an
operating perspective.
In order to assure that the City has the funds to replace these facilities as they age, an Infrastructure Replacement
fund was created. With this fund, the City is setting 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.
In addition to these steps, the City also prepares a long-term financial model for its operating needs. 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 its major enterprise funds.
The City has experienced remarkable revenue growth over the past five to seven years due to the development of
the majority of its commercial sites. The future will bring a few more commercial sites but at a much slower
pace, while residential development will continue for a number of years. There are also a number of new
facilities - mainly parks - planned for the future to serve the growing population. The new facilities will add
operating costs to the City's General fund budget as they are completed and opened for use.
These factors alone will cause the General fund costs to escalate at a higher rate than inflation. In addition, a
number of other factors - mainly rising retirement and health care costs - will create upward pressure on
expenditures, especially over the next five years. These factors have been incorporated into the General fund
forecast, shown on the next page, and projected over the next ten years. While no forecast is ever totally
accurate, it does represent a likely scenario given the assumptions on which it is built.
The forecast reflects the following assumptions:
• Revenue growth will pick up at a moderate pace in 2005 and continue into the future.
• The changes included in the State's budget are implemented; thus, lowering property taxes in fiscal year '05
and '06 and then full revenue receipts after that time.
• All known personnel costs are included, most of which have been negotiated with the employee groups.
Increases are assumed in the City's contribution to its retirement plan. The City 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. Each year, an actuary 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. Due to the sluggish economy, the stock market decline and benefit
enhancements, the City's contribution rate is expected to continue to increase over the next several years.
For more information on the pension plans, please read Note 16 of the notes to the financial statements.
15% increases in health care costs in the near future, slowing to 5% in the future.
Personnel growth (new positions) to remain rather flat at no more than 2% per year.
Estimated operating costs for all capital projects in the timeframes shown in the CIP.
General Fund
2006 2008 2010 2012 2014
Revenues - Projected Budget
The results show that the General fund
would operate at a surplus until 2008,
at which time the forecast goes into a
slight deficit and the deficit continues
to grow to a maximum of 4% of the
budget by 2014. The surpluses are
caused by the surge in revenues that
occurred over the past years. The
City's costs are projected to continue
to grow at a faster pace than revenues,
so it will eventually lead into deficits.
One of the more significant changes
resulting in expenditure growth in the
later years is the projected loss of
Transnet revenues, which are used for street maintenance. Transnet is a Vi cent additional sales tax collected
countywide and used to improve the transportation systems. The current authorization for the sales tax will end
in 2008. SANDAG, the San Diego Association of Governments, is placing a measure on the November ballot to
reauthorize the sales tax for another 40 years. If the measure passes, the deficits in the future years will be
reduced.
Of course, the City does not allow for deficit spending, so it will need to balance the budgets in the out years.
This can be done by reducing costs, raising revenues, or slowing the addition of new facilities until the revenues
have time to catch up. The General fund forecast is a tool available to the City for managing its fiscal resources
effectively and monitoring the achievement of sustainable economic health for the City of Carlsbad.
Cash Management
The City Treasurer is charged with the design of an effective cash management and investment program
consistent with legal requirements and the Carlsbad Investment Policy. The City annually adopts a
comprehensive investment policy specifying, among other things, investment objectives and strategy, type, and
term of investments, reporting requirements, and investment oversight. The City's investments generally
include federal agencies, corporate notes, and investments in the State Treasurer's investment pool. The
modified duration of the investments in the City's investment pool as of June 30, 2004 was 2.06. The average
return realized on the pooled investments declined from 4.24% in fiscal year 2002-03 to 3.43% for fiscal
year 2003-04.
Historical Unrealized Gains/Losses
as Percent of Amortized Cost
Investment income shown in the financial statements includes changes in the fair value of investments as
required under GAAP. 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. This is especially true as
the City holds most of its investments to
maturity rather than selling them at fair value.
The graph at the right shows the amount of
unrealized income reflected in the portfolio
over the last few years. As of June 30, 2004,
the market value is essentially equal to the
amortized cost of the portfolio. Thus, the
investment income for the 2003-04 fiscal year
includes a significant reduction as a result in
the decline in the market value of the portfolio.
This is discussed more thoroughly in the
MD&A.
Major Initiatives
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
Jun-00 Jun-01 Jun-02 Jun-03 Jun-04
The Public Safety services are in the second
year of implementing their Public Safety Technology Plan. The plan replaces the current computer-aided
dispatch system and will allow for mobile computing, mapping and automatic vehicle location. Mobile
computing will allow officers to receive calls on their in-car computer and perform other functions such as email
and accessing regional databases while in the car. A computerized map will show the unit's current location and
location of call. The Automatic Vehicle Location is the real-time tracking of police units with the closest unit to
the call being dispatched. This $2.5 million project has been fully funded through grants and appropriations
from the General fund.
Construction of the Recycled Water Facility is complete, and the remaining pipelines for the project are under
construction. When operational, the plant will be able to generate up to four million gallons of recycled water
per day. It is expected to begin operating in 2005. The project will serve the industrial park area, and increase
the City's water supply and reduce dependence on external suppliers. Funds for this project came from a
combination of grants and loans from State and Federal agencies. The loans will be repaid from revenues
generated by the plant.
Several significant parks are in design and scheduled for construction over the next few years. These include:
• Alga Norte Park and Aquatic Complex, scheduled to open in 2007.
This 33-acre park site will include ball fields, picnic areas, tot lots, a skate
park, a dog park, and an aquatic complex. Total cost estimated at over
$25 million. Funded by impact fees and the General fund.
• Hidden Canyon Park, opening in summer 2005. This 22-acre park will
encompass mainly passive uses including trails, picnic areas and tot lots.
Total cost of $ 1.8 million. Funded by impact fees.
• Aviara Community Park, opening in summer 2005. Amenities will include a ball field, a synthetic
turf soccer field, basketball courts, picnic areas and a tot lot. Total cost of $10.7 million. Funded by
impact fees.
• Pine Avenue Park, opening early in 2006. This park will include a multi-use field, basketball courts,
picnic areas and tot lots, and an ornamental garden. Total cost of $6.2 million. Funded by impact fees.
• Municipal Golf Course, expected opening in 2007. The City will begin the initial clearing and
grubbing operation this fall in anticipation of constructing an 18-hole championship course. Total costs
estimated at $30 million. Funding to come from a combination of General fund advances and tax
exempt bonds.
In addition to the numerous park projects, the City has embarked on an initiative with the ultimate goal of
connecting community, place, and spirit. The initiative was kicked off with a conference held in March 2003,
which brought together a wide range of community members as well as City staff, to
a" begin a collective dialogue about the future. Over the past year, the process continued as
twelve community focus groups were held throughout the City, attended by more than 400
citizens, to discuss the themes generated at the conference. All the information was
"2 J.v distilled and presented in a Council workshop. At the workshop, Council developed their
%^(tei|'V^ vision for the look and feel of the City's future civic centers and City government
"'>>-, pta<* buildings.
Based on the Council's direction, several initiatives have been launched. The Centre City Gateway project will
develop a land use vision and strategy process for the coastal area near the center of the City. This may be the
eventual site of a Civic Center Plaza. The conceptual planning is underway. In addition, the designs for a
City/Safety Training facility and a Public Works center have been funded. These facilities are expected to be
built in the next few years. Besides designing the hardscape for the City, there is also money in the 2004-05
budget to continue the work of community engagement - continuing the dialogue about what the citizens want
and what they can do together to connect community, place and spirit in Carlsbad.
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, 2003. This was the sixth 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 GAAP 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.
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. I 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, I would like to thank the City
Council and the City's Leadership Team for their leadership and unfailing support in maintaining the highest
standards of professionalism in the management of the City of Carlsbad's finances.
Respectfully submitted,
LISA HILDABRAND
Finance Director
10
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, 2003
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
11
SOLANA BEACH
DEL MAR I 1-5
12
CITY OF CARLSBAD
ELECTED CITY OFFICIALS
Claude A. "Bud" Lewis, Mayor
Ramona Finnila, Mayor Pro Tern
Ann J. Kulchin, Council Member
Matt Hall, Council Member
Mark Packard, Council Member
Lorraine M. Wood, City Clerk
James M. Stanton, City Treasurer
ADMINISTRA TION AND DEPAR TMENT 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
Tom Zoll, Police Chief
Kevin Crawford, Fire Chief
Ron Ball, City Attorney
Julie Clark, Human Resources Director
Douglas Duncanson, Deputy Public Works Director, General Services
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
Gary Hill Arts Commission
Norine Sigafoose Beach Preservation Committee
Colleen Finnegan Community Television Foundation
Sarah Marquez Design Review Board
German Gutierrez Historic Preservation Commission
Edward Scarpelli Housing Commission
Claude A. Lewis Housing and Redevelopment Commission
Rob Swette Library Board of Trustees
Jim Comstock Parks and Recreation Commission
Donald Martin Personnel Board
Frank Whitton Planning Commission
David Ricker Senior Commission
VACANT Serra Cooperative Library System Advisory Board
Leonard Martyns Sister City Committee
Gorden Cress Traffic Safety Commission
VACANT Underground Utility Advisory Committee
13
CITY OF CARLSBAD ORGANIZATION CHART
1Personnel i
Board '
Beach i
Preservation ] —
Committee i
~ ~ ~lCommunity i
Television 1
Foundation i
1
Traffic i
Safety ] —
Commission i
Underground I
Committee i
Design
Review
Board
Housing
Commission
Housing &
Redevelopment
Commission
Planning
Commission
L
1
1
I1
1
1
'l
L1
1
1
1
L1
I
PUBLIC
SAFETY
ADMINISTRATIVE
SERVICES
FIRE
POLICE
KEY
Elected
Council Appointed ~-~i
Staff Support
Reporting Relationship
Programs
0
am
—
CH
FINANCE
HUMAN
RESOURCES
INFORMATION
TECHNOLOGY
RISK
MANAGEMENT
RECORDS
MANAGEMENT
CMAYOR
&
COUNCIL
>»CITY
V TREASURER J
^~^~"—*^
CITY MANAGER CITY ATTORNEY
PUBLIC
WORKS
ADMINISTRATION
ENGINEERING
SERVICES
GENERAL
SERVICES
MAINTENANCE &
OPERATIONS
COMMUNITY}
DEVELOPMENT
COMMUNITY
SERVICES
BUILDING
ECONOMIC
DEVELOPMENT
GEOGRAPHIC
INFO SYSTEMS
HOUSING AND
REDEVELOPMENT
PLANNING
ARTS
LIBRARY
RECREATION
SENIOR
CENTER
Arts
Commission
Sister City
Committee
Historic
Preservation
Commission
Library Board
of
Trustees
Serra Cooperative
Library System
Advisory Board
Parks & Rec
Commission
Senior
Commission
FINANCIAL SECTION
McGladrey&Pullen
Certified Public Accountants
Independent Auditor's Report
The Honorable Mayor and
Members of the City Council
City of 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, 2004, which collectively comprise the City's basic financial statements, as listed in the
table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to
express an opinion on these 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 and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinions.
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 as of June 30, 2004, and the respective changes in financial position and 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, 2004 on
our consideration of the City's internal control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing Standards and should be considered
in assessing the results of our audit.
The Management's Discussion and Analysis as listed in the table of contents is not a required part of the basic
financial statements but is supplementary information required by accounting principles generally accepted in the
United States of America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary information.
However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the City's basic financial statements. The combining and individual nonmajor fund financial statements and other
schedules, 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. Such 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.
McGladrey & Pullen, LIP is a member firm of RSM International,
an affiliation of separate and independent legal entities.
15
The accompanying introductory and statistical sections, as listed in the table of contents, are presented for purposes
of additional analysis and are not a required part of the basic financial statements. This information has not been
subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we
express no opinion on it.
San Diego, California
September 30, 2004
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, 2004. 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.
Overview of the Financial Statements
Required Components of the City of Carlsbad's
Annual Financial Report
Management 's
Discussion
and
Analysis
\
1
Basic
Financial
Statements
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
that 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,
internal service funds, and fiduciary funds, which are added together and presented in single columns in the basic
financial statements.
The remainder of this overview section of management's discussion and analysis explains the structure and contents
of each of the statements.
1
Government-
wide Financial
Statements
I
Fund
Financial
Statements
Notes
to the
Financial
Statements
Summary Detail
17
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, grants and contributions, 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.
- We use internal service funds to report activities that provide services and supplies for the City's other
programs and activities - such as fleet, self-insured benefits, and information technology.
18
• 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 Assets and Liabilities. 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, 2004, as shown below, were $937.8 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. Under GASB 34, the City has until fiscal year 2005-06 in
which to complete a full accounting of its infrastructure.
The City's net assets increased by $87.2 million during the current fiscal year. Approximately 32% of this increase
represents the degree to which increases in operating revenues have exceeded increases in operating expenses.
Approximately 68% represents one-time capital grants and contributions received by the City for the purchase and
acquisition of infrastructure and other capital assets.
CITY OF CARLSBAD'S NET ASSETS
(in millions of dollars)
Governmental Business-Type
Activities
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
2003
$330.9
265.0
595.9
17.5
12.9
30.4
248.2
200.3
117.0
$565.5
2004
$370.3
298.4
668.7
15.2
19.3
34.5
282.7
195.7
155.8
$634.2
Activities
2003
$128.0
175.1
303.1
10.8
7.1
17.9
163.2
96.7
25.2
$285.1
2004
$129.9
193.9
323.8
8.1
12.1
20.2
183.2
102.6
17.8
$303.6
Total
2003
$458.9
440.1
899.0
28.3
20.0
48.3
411.4
297.0
142.2
$850.6
2004
$500.2
492.3
992.5
23.3
31.4
54.7
465.9
298.3
173.6
$937.8
Total
Percentage
Change
2003-04
9.0%
1 1 .9%
10.4%
-17.7%
57.0%
13.3%
13.2%
0.4%
22.1%
10.3%
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 $937.8 million at the close of the most recent fiscal year.
A large portion of the City's net assets (50%) 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.
An additional portion of the City's net assets (32%) represents resources that are subject to external restrictions on
how they may be used. The remaining balance of unrestricted net assets ($173.6 million) may be used to meet the
government's ongoing obligations to citizens and creditors.
Over 50% of the $155.8 million in unrestricted governmental activities net assets is attributable to the General fund.
Although the unrestricted net assets of our business-type activities total $17.8 million, these resources cannot be
19
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 $87.2 million during the
year. This increase occurs when spending is less than the revenues received. This occurred in the current fiscal year
for several reasons: an emphasis on efficiencies resulted in $4.2 million in savings; $13.1 million in "savings" in the
General fund being carried forward into the new fiscal year by various major service areas within the City to
enhance and provide for future services and programs; the build-up of cash reserves in the City's capital project
funds for future capital project construction and acquisition; revenues received in the City's special revenue funds
for future services and programs; and the donation of infrastructure assets from developers.
CITY OF CARLSBAD'S CHANGES IN NET ASSETS
(in millions of dollars)
Governmental Business-type
Activities
Revenues
Program revenues
Charges for services
Operating grants and contributions
Capita] grants and contributions
General revenues
Property taxes
Sales and use taxes
Other taxes
Income from property and investments
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 transfers
Transfers
Increase (decrease) in net assets
Beginning net assets
Ending net assets
2003
$17.0
10.1
45.2
31.4
25.8
15.6
13.3
5.5
163.9
8.5
27.7
12.0
14.6
16.8
1.1
-
-
-
80.7
83.2
(0.6)
82.6
482.9
$565.5
2004
$15.1
14.6
42.2
33.9
24.6
18.3
3.1
4.8
156.6
8.6
30.9
13.8
15.1
19.5
1.0
-
88.9
67.7
1.0
68.7
565.5
$634.2
Activities
2003
$25.5
1.3
19.5
1.7
-
-
5.8
0.2
54.0
-
-
-
-
-
-
19.3
6.1
0.3
25.7
28.3
0.6
28.9
256.2
$285.1
2004
$26.7
1.5
17.4
1.9
-
-
1.2
-
48.7
-
-
-
-
-
21.0
6.9
1.3
29.2
19.5
(1.0)
18.5
285.1
$303.6
Total
2003
$42.5
11.4
64.7
33.1
25.8
15.6
19.1
5.7
217.9
8.5
27.7
12.0
14.6
16.8
1.1
19.3
6.1
0.3
106.4
111.5
-
111.5
739.1
$850.6
2004
$41.8
16.1
59.6
35.8
24.6
18.3
4.3
4.8
205.3
8.6
30.9
13.8
15.1
19.5
1.0
21.0
6.9
1.3
118.1
87.2
-
87.2
850.6
$937.8
Total
Percentage
Change
2003-04
-1.6%
41.2%
-7.9%
8.2%
-4.7%
17.3%
-77.5%
-15.8%
-5.8%
1 .2%
11.6%
15.0%
3.4%
16.1%
-9.1%
8.8%
13.1%
333.3%
11.0%
-21.8%
0.0%
-21.8%
15.1%
10.3%
20
City of Carlsbad
Sources of Revenue for Fiscal Year 2003-04
$205.3 Million
Other (2%)
Grants/
Contributions (32%)
Income from Property and
Investments (2%)
Other Taxes (5%)
TOT (4%)
Property Taxes (17%)
Charges for Services (20%)
Federal Aid (4%)
State Aid (2%)
Sales Tax (12%)
Just over 49% of the City's
governmental funds revenue is
generated through taxes collected
(property, sales, transient occupancy
tax, etc.), and almost 55% of the City's
business-type revenue is generated
through charges for services. The
following chart graphically depicts the
City's revenue sources.
The large decrease in income from
property and investments was primarily
the result of a 19% drop in the average
interest rate earned on the City's cash
portfolio for the year, combined with an
unrealized loss of $8.3 million from
reflecting the value of the City's
investments on a market value basis. This paper loss will never materialize, as the City hold's its investments until
maturity.
The total cost of all programs and services was just over $118 million in fiscal year 2003-04. The City's expenses
cover a range of services:
• General Government (7%)
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
• 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.
Community Development (12%)
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.
Community Services (13%)
Community Services consist of the Library, Cultural
Arts, Recreation, Park Planning, and Senior Citizen
City of Carlsbad
Functional Expenses for Fiscal Year 2003-04
$106.4 Million
Public Safety
26%
Community
Development
12%
21
programs. These programs are provided to a wide range of people and assist in their education and cultural
development.
• Public Works (16%)
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.
• Water Operations (18%)
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.
• 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.
• Other Expenses (2%)
Other expenses include costs associated with the City's Solid Waste division, the City's Storm Water
Protection Program, 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 $68.7 million. This increase was generated by total
revenues of governmental activities of $156.6 million ($71.9 million in program revenues and $84.7 million in
general revenues) offset by $88.9 million in total costs of governmental activities plus $1 million in transfers into
these activities from business-type 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).
22
Governmental Activities
Program Revenues and Expenses
Fiscal Year 2003-04
(in millions)
E3 Program Revenues
Q Expenses
General Public Safety Community Community Public Works
Government Development Services
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 ($15.1 million), grants and contributions
from other governments and organizations to subsidize certain programs ($56.8 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 $84.7 million.
During the 2003-04 fiscal year, the City received additional affordable housing revenue as many of the participants
in the various loan programs sold their homes, and the City shared in the appreciation of their homes values. This
one-time occurrence pushed community development program revenues past expenses for the fiscal year.
Program revenues exceed expenses in Public Works as a large majority of Public Works revenues are used to
acquire and build capital assets (versus covering operating expenses). 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 $45.6 million for the year, while functional expenses
equaled $29.2 million.
Business-Type Activities
Program Revenues and Expenses
Fiscal Year 2003-04
(in millions)
ED Program Revenues
0 Expenses
Water Golf Course Sewer Solid Waste
23
As with the Public Works function in the governmental activities, program revenues are higher than program
expenses. The City received contributions for current and future capital asset acquisitions and construction that will
be reflected as depreciation expense (a program expense) over time. In addition, a small portion of the annual
surplus is set aside for rate stabilization and unanticipated events.
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)
Reserved for Other Purposes $329.7 Million
($31.1 million)
Reserved for Golf Course ^ T*4ffijiBJ!| . >\ Undesignated ($115.5 million)
($15 million)
Designated for Future Continuing
Appropriations
($69.6 million)
Designated for Approved
Reserved to Liquidate Contracts and^^^ Capital Projects
Purchase Orders ($62.3 million)
($36.2 million)
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of
$329.7 million, an increase of $32.5 million in comparison with the prior year. Approximately 35% of this amount
($115.5 million) constitutes undesignated 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 - 19%, (2) to liquidate contracts and purchase orders of the prior period - 11%, (3) for future
programs - 21%, (4) the future construction of a municipal golf course - 5% or (5) for a variety of other restricted
purposes - 9%.
24
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
(in millions of dollars)
Total
Increase Percentage
Revenues
'faxes
Intergovernmental
Licenses and permits
Charges for services
Income from property and investments
Interdepartmental charges
Miscellaneous
Total revenues
Expenses
General government
Public safety
Community development
Community services
Public works
Principal and interest
Total expenses
Excess (deficiency) before transfers
Transfers
Increase (decrease) in fund balance
Beginning fund balance
Ending fund balance
Total
2003
$66.1
6.6
2.0
7.7
4.3
2.7
1.5
90.9
8.1
26.5
6.0
12.9
14.9
0.7
69.1
21.8
(38.8)
(17.0)
88.2
$71.2
2004
$70.9
5.7
2.3
7.6
1.5
2.6
2.4
93.0
8.7
30.5
6.6
13.7
15.8
0.1
75.4
17.6
(4.7)
12.9
71.2
$84.1
(Decrease)
2003-04
$4.8
(0.9)
0.3
(0.1)
(2.8)
(0.1)
0.9
2.1
0.6
4.0
0.6
0.8
0.9
(0.6)
6.3
Change
7.3%
-13.6%
15.0%
-1.3%
-65.1%,
-3.7%
60.0%
2.3%
7.4%
15.1%
10.0%
6.2%
6.0%
-85.7%
9.1%
The General fund is the main
operating fund of the City, and at
the end of the fiscal year had a
total fund balance of $84.1
million, an increase of $12.9
million. The unreserved fund
balance portion of the General
fund was $56.1 million, of which
$13.1 million was designated for
future programs and service
enhancements.
The increase in revenues was
primarily due to four factors: the
continuation of a strong housing
market on property and transfer
taxes, higher natural gas prices
(higher franchise fees), a 14%
increase in the number of
licensed businesses in the City
(higher business license taxes)
and a slight rebound in the
tourism industry (higher transient
occupancy taxes). On the other
hand a 19% drop in the average
interest rate earned on the City's
cash portfolio for the year, combined with an unrealized loss of $1.3 million from reflecting the value of the City's
investments on a market value basis, partially offset the increase in General fund revenues. This paper loss will
never materialize, as the City hold's its investments until maturity.
The increase in General fund expenditures were driven by the following factors:
• Normal salary and benefit increases.
• PERS rates for our miscellaneous plan increased from 0% to 2.258%, and rates for the safety plan increased
from 3.504% to 9.367%.
• First full year for a Communications department within General Government.
• $2.1 million in additional workers' compensation costs.
• Costs associated with the Police department's implementation of a new Computer Aided Dispatch system
(CAD).
• Additional Fire department costs associated with being a member of the North County Dispatch Joint Powers
Authority (NCDJPA).
• A 75% increase in expenditures related to developer-funded studies in the Planning area.
• The opening of the Carrillo Ranch Park.
• Operating costs associated with the former Farmers Insurance building.
Of all the major governmental funds, the only one with a negative fund balance is the Redevelopment debt service
fund. It reflects a negative fund balance of over $10.5 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 the $13.1 million advance back to the City's General fund, as the tax increment
collected within the redevelopment area grows.
Two of the four remaining 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 Bridge and Thoroughfare Districts funds reflect a reduction in fund balance
due to the use of funds to construct Poinsettia Lane and Cannon Road (from El Camino Real to Faraday Avenue).
25
In addition, the General Capital Construction fund also shows a decrease in fund balance due to the construction of
many small projects throughout the City.
Proprietary Funds
The focus of the City's proprietary funds is to provide information on short and long-term financial information
about the activities of the City that act like businesses. These funds focus on the determination of operating income,
changes in net assets (cost recovery), financial position, and cash flows.
The Carlsbad Municipal Water District funds had an operating loss of approximately $575,000 for the year.
Although water sales were up for the year by 3.3%, increased Metropolitan Water District and County Water
Authority fixed charges, as well as consulting expenses associated with a proposed new desalination plant, more
than offset the increase in revenues.
Sewer funds had an annual operating loss of approximately $190,000 for the fiscal year. Total revenues only
decreased from the previous year by 1%; a result of reduced water usage by the City's commercial and industrial
customers. In addition, higher sewer plant operation expenses caused by increasing energy and chemical costs, a
reallocation of personnel costs, and the rehabilitation and resizing of major sewer lines, contributed to the reduction
in operating income for the year.
Solid waste operations now include the Storm Water Protection Program, previously recorded as a special revenue
fund. A solid waste fee increase went into effect in December 2003, to cover the majority of the costs of this
program.
Unrestricted net assets for the Water, Golf, Sewer, and Solid Waste operations at the end of the year amounted to
$17.8 million, just under 6% of the net assets of all proprietary funds. These assets will be used for future rate
stabilization efforts as well as for any emergency situation. Approximately 34% of the net assets are restricted for
future capital construction, and reside in the Water and Sewer funds.
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 $1.3 million to reflect the following
changes:
• Studies paid for by developers.
• Results of sales and business license tax audits
• State and federal grants not originally budgeted.
• Donations received by the City.
The increase from the total original budgeted expenditures to the final budget amounted to $3.6 million, due
predominantly from:
• Additional workers' compensation costs.
• Appropriating funds received from developers during the year for developer-funded studies.
• Costs associated with sales tax audits.
• Budgeted expenditures associated with new grant revenues.
• Appropriating donations received.
• Appropriated transfers from police grants for the City's purchase and installation of a new Computer Aided
Dispatch (CAD) system.
The difference between the final budgeted expenditures and the actual expenditures for the year on a budgetary basis
of $19.5 million can be generally summarized as follows:
26
$15.5 million in "savings" by the various major service areas within the City. Current year savings were
generated from:
Unfilled vacancies.
Overall awareness of fiscal responsibility throughout the City.
Planned reduction in scope of library software implementation.
Delayed start up of the new CAD project.
A timing delay in the street overlay program.
Rescheduled implementation of new programs for Seniors, Carrillo Ranch and recreation special events.
Deferral of the update of the Housing Element until fiscal year 2004-05.
$2.2 million representing unspent City Council Contingency money that was budgeted for unanticipated
emergencies or unforeseen program needs.
$1.8 million in appropriations not carried forward for major capital outlay and programs with a one-year life
cycle.
Battery back up equipment for traffic signals not purchased.
Unspent Carlsbad Convention and Visitors' Bureau funds.
Unspent employee development and training funds.
Unspent administrative special project funds.
Reduced Communications expenses as the program was in the start up stage during the first part of the
fiscal year.
For purposes of budgetary presentation, actual revenues have been adjusted to exclude unrealized gains and losses
pursuant to GASB 31, actual expenditures have been adjusted to include encumbrances outstanding, and transfers
out have been adjusted to reflect any transfer that was approved through the budget process as an expenditure but
recorded as an advance in the financial statements.
Capital Asset and Debt Administration
Capital Assets
At the end of 2004, the City had recorded an investment of over $571 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, as the
City has not completed its inventory of infrastructure assets. Under GASB 34, the City has until fiscal year 2005-06
in which to complete a full accounting of its infrastructure. New infrastructure purchased or constructed during the
last two fiscal years in the City's governmental funds has been added into the total capital asset figures.
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
2003
$54.3
66.7
10.4
21.5
57.4
80.2
-
290.5
(25.5)
$265.0
2004
$55.1
66.9
10.9
21.2
112.9
61.8
-
328.8
(30.4)
$298.4
Activities
2003
$8.7
2.2
5.5
1.6
128.6
37.8
35.9
220.3
(45.2)
$175.1
2004
$8.7
2.2
5.6
1.6
138.3
48.4
37.7
242.5
(48.6)
$193.9
Total
2003
$63.0
68.9
15.9
23.1
186.0
118.0
35.9
510.8
(70.7)
$440.1
2004
$63.8
69.1
16.5
22.8
251.2
110.2
37.7
571.3
(79.0)
$492.3
Change
2003-04
$0.8
0.2
0.6
(0.3)
65.2
(7.8)
1.8
60.5
(8.3)
$52.2
Total
Percentage
Change
2003-04
1.3%,
0.3%
3.8%
-1.3%
35.1%
-6.6%
5.0%
1 1 .8%
1 1 .7%
11.9%
This year's major capital asset additions included:
• The construction of two major roads: Cannon Road from Interstate 5 to El Camino Real and Faraday Avenue,
east of Cannon Road.
• The widening of El Camino Real, Palomar Airport Road and Olivenhain Road.
27
• Developer-dedicated streets, drainage facilities, water lines, sewer lines, streetlights, and drainage facilities at
Cobblestone Sea Village, the Terraces at Sunny Creek and Rancho Carrillo Villages.
In addition to carrying forward appropriations of $106.2 million for previously budgeted projects, the City's fiscal
year 2004-05 capital budget appropriates an additional $52.5 million for capital projects. These additional
appropriations are principally for park development, a new fire station, the pavement management program, street
projects, enhancing the sewer collection system, additional water lines, traffic signals, miscellaneous civic projects
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 $25.2 million in bonds, certificates of deposit, loans, leases, and accrued assessments
payable, a decrease of $3.1 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.
CITY OF CARLSBAD'S OUTSTANDING DEBT
(in millions of dollars)
Governmental
Activities
Bonds
Certificates of participation
Loans
Obligations under capital leases
Installment purchase agreement
Accrued assessments
Less: Deterred charges
Total
2003
$13.2
3.9
0.2
0.2
-
S17.5
2004
$12.8
3.4
0.1
-
$16.3
Business-Type
Activities
2003
$0.0
1.2
1.5
8.4
0.4
(0.7)
$10.8
2004
$0.0
1.3
7.9
0.3
(0.6)
$8.9
Total
2003
$13.2
5.1
1.7
0.2
8.4
0.4
(0.7)
$28.3
2004
$12.8
3.4
1.3
0.1
7.9
0.3
(0.6)
$25.2
Total
Percentage
Change
2003-04
-3.0%
-33.3%
-23.5%
-50.0%
-6.0%
-25.0%
-11.0%
Economic Factors and Next Year's Budgets and Rates
• The State of California adopted their 2004-05 annual budget with the following provisions affecting the City:
> Vehicle License Fee revenue will be reduced by 67%, and offset by an increase in property taxes in the
same amount.
> The City will be required to make a $1.8 million "contribution" to the State in both this fiscal year and
next fiscal year.
r- The State is implementing a "Triple Flip" whereby the City's sales tax receipts will be reduced by one-
quarter, and this reduction will be made up with property taxes equating to the same amount.
> Both the VLF and "Triple Flip" swaps will have no effect on the ultimate amount of revenues the City
receives, but it will result in a delay in the timing of the receipt of money by the City.
• Total assessed values in the City stand at over $ 16 billion, almost double what they were just six years ago.
• A new retail center in the southernmost part of the City opened in November 2003, positively impacting the
City's sales tax revenues.
• PERS rates for our miscellaneous plan have increased for the 2004-05 fiscal year from 2.258% to 6.938%, and
have increased from 9.367% to 27.573% for our safety plan.
• Retail natural gas prices have stabilized during the past two years, impacting our future franchise fee revenue.
• The Consumer Price Index (CPI) for the western region of the United States for urban households increased by
1.5% during the twelve months ended November 30, 2003.
• The total number of housing units in Carlsbad grew by 3.3% in calendar year 2003, impacting our budgeted
expenditures for fiscal year 2004-05.
• Median home prices have increased by 27% in calendar year 2004 through September 30, 2004.
28
All of these factors were considered in preparing the City of Carlsbad's General fund budget for the 2004-05 fiscal
year. Budgeted expenditures are expected to increase 6.6% to $90.5 million. The increase is mainly due to the
increase in personnel costs. Personnel costs make up approximately 65% of the General fund budget so any changes
in these costs can have a significant effect on the total budget. In addition, just over $13.1 million in unspent 2003-
04 budgeted expenditures will be carried over to the 2004-05 fiscal year, as well as $3.2 million in open
encumbrances as of June 30, 2004.
During the current fiscal year, unreserved fund balance in the General fund decreased to $43 million. This decrease
was the result of reserving $15 million for the upcoming construction of an 18-hole championship golf course. If
the City's budget estimates are realized, the City's budgeted unreserved General fund is expected to increase
modestly by the close of fiscal year 2005.
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.
• Other changes in the Enterprise funds are the result of normal fluctuations in operations.
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, (760) 602-2430, or visit us online at www.ci.carlsbad.ca.us.
29
CITY OF CARLSBAD, CALIFORNIA
Statement of Net Assets
June 30, 2004
Primary Government
ASSETS
Cash and investments
Receivables:
Taxes
Accounts, net
Other
Due from other governments
Inventories
Prepaid items
Loans receivable
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
$ 343,933,119
7,165,289
266,845
314,012
3,110,778
117,735
408,838
10,188,243
659,500
15,580
4,097,419
55,152,578
66,853,662
10,873,878
21,209,462
112,905,006
61,768,235
-
(30,416,447)
298,346,374
$ 668,623,732
Business-type
Activities
S 124,552,184 $
68,803
3,430,721
-
4,386,095
578,721
-
-
953,706
21,300
(4,097,419)
8,663,600
2,258,064
5,556,571
1,568,847
138,271,570
48,438,902
37,738,531
(48,582,225)
193,913,860
S 323,807,971 3
Total
; 468,485,303
7,234,092
3,697,566
314,012
7,496,873
696,456
408,838
10,188,243
1,613,206
36,880
-
63,816,178
69,111,726
16,430,449
22,778,309
251,176,576
110,207,137
37,738,531
(78,998,672)
492,260,234
! 992,431,703
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, 2004
Primary Government
LIABILITIES
Accrued liabilities
Accrued interest payable
Due to other governments
Estimated claims payable
Current portion of long-term debt
Deposits payable
Current liabilities payable from
restricted assets - accrued interest
Deferred revenue
Noncurrent liabilities:
Due in more than one year, net of deferred
charges and unamortized issuance costs
of $559,305
Total liabilities
Governmental
Activities
S 13,194,045
288,699
388,119
3,607,432
1,069,907
144,749
-
551,099
15,208,600
34,452,650
Business-type
Activities
S 6,816,084 3
-
3,100,083
-
805,560
466,073
167,483
734,372
8,090,361
20,180,016
Total
5 20,010,129
288,699
3,488,202
3,607,432
1,875,467
610,822
167,483
1,285,471
23,298,961
54,632,666
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Capital assets
Other purposes
Unrestricted
Total net assets
282,727,367
140,837,356
54,800,201
155,806,158
S 634,171,082
183,234,445
102,585,081
-
17,808,429
$ 303,627,955
465,961,812
243,422,437
54,800,201
173,614,587
S 937,799,037
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, 2004
Program Revenues
Functi on s/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions
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
$ 8,604,212
30,894,018
13,814,331
15,034,661
19,533,596
995,895
88,876,713
20,950,012
53,916
6,890,389
1,300,281
29,194,598
S 118,071,311
$ 570,967
3,698,789
4,203,091
2,102,473
4,532,815
-
15,108,135
18,862,404
-
6,202,700
1,672,526
26,737,630
$ 41,845,765
$ 750,583
247,767
11,079,755
734,499
1,757,012
-
14,569,616
1,391,285
-
60,735
51,923
1,503,943
$ 16,073,559
S 68,497
-
415,217
733,261
40,997,913
-
42,214,888
13,186,002
-
4,190,758
-
17,376,760
S 59,591,648
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
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
$ (7,214,165)
(26,947,462)
1,883,732
(11,464,428)
27,754,144
(995,895)
(16,984,074)
-
-
-
-
(16,984,074)
33,948,761
24,578,301
8,813,426
5,027,425
2,871,715
1,587,201
4,124,672
353,511
3,123,638
283,287
962,741
85,674,678
68,690,604
565,480,478
$634,171,082
Business-type
Activities
$
-
-
-
-
-
-
12,489,679
(53,916)
3,563,804
424,168
16,423,735
16,423,735
1,841,928
-
-
-
-
-
-
-
1,192,792
13,926
(962,741)
2,085,905
18,509,640
285,118,315
$ 303,627,955
Total
$ (7,214,165)
(26,947,462)
1,883,732
(11,464,428)
27,754,144
(995,895)
(16,984,074)
12,489,679
(53,916)
3,563,804
424,168
16,423,735
(560,339)
35,790,689
24,578,301
8,813,426
5,027,425
2,871,715
1,587,201
4,124,672
353,511
4,316,430
297,213
-
87,760,583
87,200,244
850,598,793
$ 937,799,037
33
CITY OF CARLSBAD
Balance Sheet
Governmental Funds
June 30, 2004
ASSETS
Cash and investments
Receivables:
Taxes
Other
Accounts, net
Due from other funds
Due from other governments
Inventories
Prepaid items
Restricted cash and investments
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
General
Fund
$ 71,632,522
7,116,026
300,476
95,130
339,296
65,040
15,165
6,600
-
158,844
-
17,896,310
$ 97,625,409
S 3,477,383
-
56,558
2,027
-
10,031,893
13,567,861
Redevelopment
Debt
Service Funds
$ 2,958,826
27,185
397
-
-
-
-
-
-
-
-
-
S 2,986,408
$
-
-
237,424
13,218,891
-
13,456,315
Bridge and
Thoroughfare
Districts
$ 7,008,960
-
-
-
-
-
-
-
-
-
-
-
$ 7,008,960
$ 7,984
-
-
-
4,483,344
-
4,491,328
Fund balances:
Reserved
Unreserved:
Designated, reported in:
General Fund
Special Revenue Funds
Debt Service Funds
Capital Project Funds
Undesignated, reported in:
General Fund
Special Revenue Funds
Debt Service Funds
Capital Project Funds
Total fund balances
Total liabilities and fund balances
27,916,775
13,124,942
43,015,831
(10,469,907)
84,057,548 (10,469,907)
115,492
2,402,140
2,517,632
$ 97,625,409 S 2,986,408 $ 7,008,960
The notes to the financial statements are an integral part of this statement.
34
Community General Public Other
Facilities Capital Facilities Governmental
District No. 1 Construction Construction Funds
$ 38,215,658 $ 48,402,891 $ 37,202,142 $119,138,842
2,287 - - 19,791
12,184
171,715
-
3,045,738
-
402,238
675,080
10,029,399
4,060,854 - 3,643,344
$ 38,217,945 $ 52,463,745 $ 37,202,142 $137,138,331
Total
Governmental
Funds
$ 324,559,841
7,165,289
313,057
266,845
339,296
3,110,778
15,165
408,838
675,080
10,188,243
25,600,508
$ 372,642,940
$ 75,442 $ 251,879 $ 539,729 $ 5,878,817
339,296
88,191
148,668
3,800,854
137,957 - 148,185
75,442 389,836 539,729 10,404,011
70,170 5,780,140 9,494,089 38,954,422
4,738,227
21,260
38,072,333 3,303,970 27,168,324 43,077,373
_
25,102,548
660,060
42,989,799 - 14,180,430
38,142,503 52,073,909 36,662,413 126,734,320
$ 38,217,945 S 52,463,745 S 37,202,142 $137,138,331
$ 10,231,234
339,296
144,749
388,119
21,503,089
10,318,035
42,924,522
82,331,088
13,124,942
4,738,227
21,260
114,024,140
43,015,831
25,102,548
(9,809,847)
57,170,229
329,718,418
$ 372,642,940
35
CITY OF CARLSBAD
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
June 30, 2004
Total fund balances - governmental funds. S 329,718,418
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported in the funds.
Governmental funds 292,711,353
Internal service funds 5,635,021
Total capital assets 298,346,374
Internal service funds are used by management to charge the costs of fleet
management, self insured benefits, 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.
Total internal service fund net assets 18,538,269
Internal service fund net assets included as part of total capital assets (5,635,021)
Internal service fund net assets included as part of long-term liabilities 3,312
Internal service fund net assets less capital assets 12,906,560
Accrued interest is not due and payable in the current period and, therefore,
is not reported in the funds. (288,699)
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. 9,096,806
A portion of the taxes receivable are not available to pay for current-period
expenditures and, therefore, are deferred in the funds. 670,130
Long-term liabilities, including bonds payable, are not due and payable
in the current period and, therefore, are not reported in the funds.
Governmental funds (16,275,195)
Internal service funds (3,312)
Total long-term liabilities (16,278,507)
Net assets of governmental activities. $ 634,171,082
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, 2004
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 (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficits) at beginning of year
Fund balances (deficits) at end of year
General
Fund
$ 70,831,211
5,717,861
2,328,524
7,583,932
936,406
1,476,749
2,604,355
-
-
1,479,370
92,958,408
8,718,703
30,478,373
6,564,344
13,705,769
15,821,803
-
85,136
9,881
75,384,009
17,574,399
314,266
(4,968,000)
(4,653,734)
12,920,665
71,136,883
$ 84,057,548
Debt
Service Funds
S 2,446,830
-
-
-
-
30,597
-
-
-
-
2,477,427
27,421
-
-
-
-
-
360,000
1,280,059
1,667,480
809,947
-
(240,000)
(240,000)
569,947
(11,039,854)
S (10,469,907)
Thoroughfare
Districts
S
-
-
-
-
107,266
-
1,722,370
-
6,107
1,835,743
-
-
-
-
-
2,568,645
-
-
2,568,645
(732,902)
215,280
(1,863)
213,417
(519,485)
3,037,117
S 2,517,632
The notes to the financial statements are an integral part of this statement.
38
Community
Facilities District
No. 1
$ 3,870,611
344,717
506,953
4,722,281
81,742
88,938
170,680
4,551,601
1,863
(215,280)
(213,417)
4,338,184
33,804,319
$ 38,142,503
General
Capital
Construction
$
430,928
92,000
522,928
1,132,345
1,132,345
(609,417)
36,000
(827,554)
(791,554)
(1,400,971)
53,474,880
$ 52,073,909
Public
Facilities
Construction
$
311,237
4,879,103
2,002
5,192,342
2,885,404
2,885,404
2,306,938
32,000
32,000
2,338,938
34,323,475
$ 36,662,413
Other
Governmental
Funds
$ 2,384,389
16,788,108
2,315,251
155,974
1,199,921
130,130
16,481,922
141,399
55,876
39,652,970
917,153
320,413
7,079,957
209,228
2,222,981
19,730,282
768,842
176,627
31,425,483
8,227,487
8,129,950
(2,076,921)
6,053,029
14,280,516
112,453,804
$ 126,734,320
Total
Governmental
Funds
S 79,533,041
22,505,969
2,328,524
9,899,183
1,092,380
3,901,415
2,734,485
23,682,348
141,399
1,543,355
147,362,099
9,745,019
30,798,786
13,644,301
13,914,997
18,044,784
26,405,614
1,213,978
1,466,567
115,234,046
32,128,053
8,729,359
(8,329,618)
399,741
32,527,794
297,190,624
S 329,718,418
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, 2004
Net change in fund balances - total governmental funds. $ 32,527,794
Amounts reported for governmental activities in the statement of activities are different because:
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.
Purchase of capital assets 26,094,574
Depreciation expense (4,364,946)
Governmental funds do not reflect the donation of capital assets as revenues. 12,478,499
Governmental funds report the entire proceeds from the sale of capital assets as revenue.
However, in the statement of activities, the net gain or loss from the sale of capital
assets is reported. (1,822)
The repayment of the principal of long-term debt consumes the current financial
resources of governmental funds but has no effect on net assets. 1,213,927
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. 22,730
Unpaid interest income on advances to other funds is not a current financial
resource, and therefore is not recognized as revenue in the funds. 190,535
A portion of sales and use taxes is not available to pay for current-period
expenditures and, therefore, is deferred in the funds. (242,308)
The net revenue of certain activities of internal service funds is reported
with governmental activities. 771,621
The notes to the financial statements are an integral part of this statement.
40
Change in net assets of governmental activities. $ 68,690,604
41
CITY OF CARLSBAD
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
General Fund
For the Year Ended June 30, 2004
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
Total other financing sources (uses)
Net change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Budgeted
Original
$ 68,460,000
6,480,000
1,430,000
6,240,000
930,000
3,950,000
2,700,000
700,000
90,890,000
15,550,503
32,354,345
9,542,008
17,903,239
19,008,413
85,136
9,881
94,453,525
(3,563,525)
-
(6,231,800)
(6,231,800)
(9,795,325)
71,136,883
$ 61,341,558
Amounts
Final
$ 68,706,400
6,786,618
1,430,000
6,245,200
930,000
3,950,000
2,700,000
1,441,598
92,189,816
15,626,213
34,202,812
10,390,262
18,215,074
19,566,572
85,136
9,881
98,095,950
(5,906,134)
314,266
(6,231,800)
(5,917,534)
(11,823,668)
71,136,883
$ 59,313,215
Actual Amounts
(Budgetary Basis)
$ 70,831,211
5,717,861
2,328,524
7,583,932
936,406
2,816,383
2,604,355
1,479,370
94,298,042
9,348,423
30,867,419
7,439,940
13,965,927
16,878,522
85,136
9,881
78,595,248
15,702,794
314,266
(4,968,000)
(4,653,734)
11,049,060
71,136,883
$ 82,185,943
Variance With
Final Budget -
Over
(Under)
$ 2,124,811
(1,068,757)
898,524
1,338,732
6,406
(1,133,617)
(95,645)
37,772
2,108,226
(6,277,790)
(3,335,393)
(2,950,322)
(4,249,147)
(2,688,050)
-
-
(19,500,702)
21,608,928
-
1,263,800
1,263,800
22,872,728
-
$ 22,872,728
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, 2004
BUDGET-TO-GAAP RECONCILIATION
Actual Amounts
(Budgetary Basis)
Revenues
Actual amounts (budgetary basis) "available for appropriation" from
the budgetary comparison schedule (previous page). $ 94,298,042
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. (1,339,634)
$ 92,958,408
Expenditures
Actual amounts (budgetary basis) "total charges to appropriations"
from the budgetary comparison schedule (previous page). $ 78,595,248
Differences - budget to GAAP:
Encumbrances are shown in the year encumbered for budgetary purposes,
but in the year paid for financial reporting purposes. (3,211,239)
$ 75,384,009
The notes to the financial statements are an integral part of this statement.
43
CITY OF CARLSBAD
Statement of Net Assets
Proprietary Funds
June 30, 2004
Business-type Activities -
ASSETS
Carlsbad
Municipal
Water District
Golf
Course Sewer
Current assets:
Cash and investments
Receivables:
Taxes
Accounts, net
Due from other governments
Inventories
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
$ 50,849,981 $ 2,095,546 $ 66,079,465
35,443
2,169,501
4,386,095
571,317
58,012,337 2,095,546
678,761
7,404
66,765,630
-
-
953,706
21,300
975,006
1,909,565
2,258,064
2,185,604
994,958
95,577,434
26,277,920
-
(24,030,740)
105,172,805
105,172,805
$ 163,185,142 $
5,075,228 1,678,807
-
3,370,967
573,889
42,694,136
4,057,062 18,103,920
37,738,531
(24,551,485)
9,132,290 79,608,765
9,132,290 80,583,771
1 11,227,836 $ 147,349,401
The notes to the financial statements are an integral part of this statement.
44
Enterprise Funds
Solid
Waste Totals
Governmental
Activities -
Internal
Service
Funds
5,527,192 $ 124,552,184 $ 19,373,278
33,360
582,459
68,803
3,430,721
4,386,095
578,721
955
102,570
6,143,01:133,016,524 19,476,803
953,706
21,300
-
-
975,006
8,663,600
2,258,064
5,556,571
1,568,847
138,271,570
48,438,902
37,738,531
(48,582,225)
193,913,860
194,888,866
S 6,143,011 $ 327,905,390 :
-
-
14,502,256
-
-
-
(8,867,235)
5,635,021
5,635,021
$ 25,111,824
(Continued)
45
CITY OF CARLSBAD
Statement of Net Assets
Proprietary Funds (Continued)
June 30, 2004
Current liabilities payable from restricted assets:
Accrued interest
Noncurrent liabilities:
Advance from other funds
Deferred revenue
Loan payable
Installment purchase agreement, net of deferred
charges of $559,305
Accrued assessments
Total noncurrent liabilities
Total liabilities
NET ASSETS
1,222,598
1,222,598
8,626,317
Business-type Activities -
LIABILITIES
Current liabilities:
Accrued liabilities
Due to other governments
Estimated claims payable
Current portion of long-term debt
Deposits payable
Total current liabilities
Carlsbad
Municipal
Water District
$ 4,031,571
3,100,083
-
120,575
151,490
7,403,719
Golf
Course
$ 300,659 !
-
-
196,925
-
497,584
Sewer
$ 2,169,026
-
-
488,060
314,583
2,971,669
2,737,200
60,128
2,797,328
3,294,912
167,483
734,372
6,807,635
7,542,007
10,681,159
Invested in capital assets, net of related debt
Restricted for:
Capital assets
Unrestricted
Total net assets
103,829,632
44,051,275
6,677,918
$ 154,558,825 !
6,138,037
-
1,794,887
5 7,932,924
73,266,776
58,533,806
4,867,660
$ 136,668,242
The notes to the financial statements are an integral part of this statement.
46
Enterprise Funds
Solid
Waste
$ 314,828
-
-
-
-
314,828
Total
Proprietary
Funds
S 6,816,084
3,100,083
-
805,560
466,073
11,187,800
Governmental
Activities -
Internal
Service
Funds
$ 2,962,811
-
3,607,432
3,312
-
6,573,555
167,483
1,360,219
-
-
_
-
1,360,219
1 ,675,047
4,097,419
734,372
1,222,598
6,807,635
60,128
12,922,152
24,277,435
-
-
_
-
-
6,573,555
-
_
4,467,964
S 4,467,964
183,234,445
102,585,081
17,808,429
$ 303,627,955
5,631,709
_
12,906,560
S 18,538,269
47
CITY OF CARLSBAD
Statement of Revenues, Expenses and Changes in Net Assets
Proprietary Funds
For the Year Ended June 30, 2004
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 on sale of property
Property taxes
Amortization of issuance costs
Total nonoperating revenues
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
Carlsbad
Municipal
Water District
$ 18,219,940 !
-
642,464
1,391,285
2,643
20,256,332
-
10,918,694
1,742,820
-
-
8,170,267
20,831,781
(575,449)
533,453
(115,520)
8,317
1,841,928
(2,711)
2,265,467
1,690,018
-
(1,698,512)
13,186,002
13,177,508
141,381,317
$ 154,558,825 !
Golf
Course Sewer
5 - $
6,119,301
83,399
60,735
2,654
6,266,089
2,376,801
-
1,606,032
-
-
53,916 2,473,286
53,916 6,456,119
(53,916) (190,030)
16,326 587,912
(434,270)
-
-
-
16,326 153,642
(37,590) (36,388)
1,698,512
-
4,190,758
(37,590) 5,852,882
7,970,514 130,815,360
5 7,932,924 $ 136,668,242
The notes to the financial statements are an integral part of this statement.
48
Enterprise Funds
Solid Waste
$
1,672,526
51,923
312
1,724,761
1,300,281
1,300,281
424,480
55,101
55,101
479,581
(962,741)
(483,160)
4,951,124
$ 4,467,964
Totals
$ 18,219,940
6,119,301
2,398,389
1,503,943
5,609
28,247,182
2,376,801
10,918,694
3,348,852
11,997,750
28,642,097
(394,915)
1,192,792
(549,790)
8,317
1,841,928
(2,711)
2,490,536
2,095,621
1,698,512
(2,661,253)
17,376,760
18,509,640
285,118,315
$ 303,627,955
Governmental
Activities -
Internal
Service Funds
S
14,671,295
162,507
14,833,802
1,684,148
533,304
3,832,488
8,871,427
14,921,367
(87,565)
122,112
61,623
183,735
96,170
620,769
(57,769)
112,451
771,621
17,766,648
$ 18,538,269
49
CITY OF CARLSBAD
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2004
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
Increase 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
Cash and cash equivalents at end of year
Carlsbad
Municipal
Water District
$ 18,650,399 $
(14,452,894)
(2,419,023)
(2,088,052)
-
1,393,928
22,631
1,106,989
(1,698,512)
6,189,880
(9,400,090)
(545,345)
(107,569)
1,831,821
(2,031,303)
533,453
(2,089,373)
52,939,354
$ 50,849,981 S
Golf
Course Sewer
$ 6,266,845
(31,180) (2,089,033)
(844,985)
(960,775)
-
270,647 122,141
-
239,467 2,494,193
1,698,512
1,624,293
(394,043) (3,511,760)
(186,060) (520,000)
(370,754)
-
(580,103) (2,778,221)
16,326 587,912
(324,310) 2,002,396
2,419,856 64,090,769
1 2,095,546 $ 66,093,165
The notes to the financial statements are an integral part of this statement.
50
Enterprise Funds
Solid Waste
$ 1,371,995
(522,833)
(634,821)
(190,309)
51,923
75,955
283,800
-
55,101
414,856
5,112,336
$ 5,527,192
Totals
$ 26,289,239
(17,095,940)
(3,898,829)
(3,239,136)
1,838,639
22,631
3,916,604
283,800
7,814,173
(13,305,893)
(1,251,405)
(478,323)
1,831,821
(5,389,627)
1,192,792
3,569
124,562,315
$ 124,565,884
Governmental
Activities -
Internal
Service Funds
$ 15,078,701
(3,464,816)
(2,931,813)
(1,097,757)
(3,222,619)
194,663
4,556,359
547,482
(587,138)
(6,217)
(593,355)
122,112
4,632,598
14,740,680
$ 19,373,278
(Continued)
51
CITY OF CARLSBAD
Statement of Cash Flows
Proprietary Funds (Continued)
For the Year Ended June 30, 2004
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 (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization
Change in assets and liabilities:
(Increase) decrease in receivables
(Increase) in inventories
Decrease in prepaid items
(Decrease) increase in accrued liabilities
Increase in due to other governments
Increase in estimated claims payable
Increase 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
$ (575,449)
1,742,819
3,733,367
(53,916) $(190,030)
1,606,032
(212,005)
(53,299)
7,212
(624,958)
800,038
22,631
$ 1,106,989 $
64,145
(118)
-
293,383 955,412
-
58,752
239,467 S 2,494,193
$ 2,074,502
$ 50,849,981 $ 2,095,546 $ 66,079,465
953,706
(940,006)
S 50,849,981 $ 2,095,546 $ 66,093,165
The notes to the financial statements are an integral part of this statement.
52
Enterprise Funds
Solid Waste
Governmental
Activities -
Internal
Totals Service Funds
424,480 (394,915) $(87,565)
3,348,851 1,684,146
(300,843)
-
-
(47,682)
-
-
-
$ 75,955 S
$ - S
(448,703)
(53,417)
7,212
576,155
800,038
-
81,383
; 3,916,604 S
! 5,807,869 5
31,403
(6,015)
132,280
2,210,521
-
591,589
-
) 4,556,359
; 112,451
5,527,192 $124,552,184
953,706
$ 19,373,278
(940,006)
$ 5,527,192 $ 124,565,884 S 19,373,278
53
CITY OF CARLSBAD
Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2004
ASSETS
Current assets:
Cash and investments $ 17,495,367
Other receivables 40,135
Total current assets 17,535,502
Restricted assets:
Cash and investments 4,760,326
Accrued interest 79,916
Total restricted assets 4,840,242
Total assets S 22,375,744
LIABILITIES
Accrued liabilities $ 396,737
Deposits held for others 21,979,007
Total liabilities S 22,375,744
The notes to the financial statements are an integral part of this statement.
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! and February], 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 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 streets within designated district boundaries.
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 General Capital Construction capital project fund is used to account for transfers from the General fund and
expenditures for various capital projects not financed through another capital project fund.
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, recycling and storm water programs.
Additionally, the City reports the following fund types:
Internal Service funds account for fleet management, self insured benefits, information technology, records management,
risk management and workers' compensation services provided to other departments or agencies of the City.
The Fiduciary 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)
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.
Compensated absences
Compensated absences are comprised of vacation payable for all City employees and vested sick benefits for certain
former District employees. 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 liability
in the Self Insured Benefits Special Revenue fund. For compensated absences recorded at June 30, 2004, 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,
water and sewer systems, 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
completion.
58
CITY OF CARLSBAD
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (Continued)
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
The City capitalized all general infrastructure assets acquired during the three years ended June 30, 2004. No
infrastructure assets acquired prior to that time have been capitalized. In addition the land upon which the streets and
roads are constructed (right-of-way) has not been valued and capitalized. It will be addressed when the remaining
infrastructure assets are capitalized and placed on the City's books. According to GASB 34, the City has until June 30,
2006 to record its 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 not 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 or becomes available.
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, 2004, the ambulance billing receivable allowance is equal to
40% of outstanding billings at June 30, 2004, and the trade receivable allowance is equal to the total of all outstanding
receivables that are over 90 days past due.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies
are recorded in order to reserve thar portion of the appicable appropriation, is employed as an extension of formal
budgetary integration in the governmental funds. Unexpended and unencumbered appropriations of the governmental
funds automatically lapse at the end of the fiscal year. Encumbrances at year end are a portion of the reserved fund balance
and are reappropriated the following year.
Net Assets
Net assets represent the differences between assets and liabilities. Net assets invested in capital assets, net of related debt,
consist of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings, used for
the acquisition, construction or improvement of those assets. Net assets invested in capital assets, net of related debt,
excludes unspent debt proceeds. Net assets are reported as restricted when there are limitations imposed on their use either
through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws
or regulations of other governments. Restricted resources are used first to fund appropriations. The City first applies
restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are
available.
59
CITY OF CARLSBAD
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (Continued)
Cash flows
Statements of cash flows are presented for proprietary fund types. Cash and cash equivalents include all unrestricted and
restricted highly liquid investments with original purchase maturities of three months or less. Pooled cash and investments
in the City's Treasury represent monies in a cash management pool and such accounts are similar in nature to demand
deposits.
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.
Pronouncements issued, not yet effective
The GASB has issued several pronouncements that have effective dates that may impact future financial presentations.
Management has not currently determined what, if any, impact implementation of the following statements may have on
the financial statements of the City.
• GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and
Insurance Recoveries.
» GASB Statement No. 44, Economic Condition Reporting: The Statistical Section.
• GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits
Other Than Pensions.
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 and capital budget
for the fiscal year commencing the following July 1. The budget includes estimated revenues and proposed
expenditures on a departmental and/or project 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.
60
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, actual expenditures have been adjusted to include encumbrances outstanding, and transfers out have
been adjusted to reflect any transfer that was approved through the budget process as an expenditure but recorded as an
advance in the financial statements. Annual budgets are adopted for the General, special revenue funds except for the
Tyler Court Apartments fund, and debt service funds except for the Hosp Grove COPs. Accordingly, the revenues and
expenditures for these two funds have been excluded from the budget basis financial statements. Annual operating
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. Deposit and Investment Risk
Cash resources of the individual funds are combined to form a pool of cash and investments. The City maintains a formal
investment policy, which is reviewed by the Investment Committee and adopted annually by the City Council. All
investments held in the Treasurer's Pool are consistent with the City's investment policy objectives of safety of principal,
adequacy of liquidity, and achievement of an average market rate of return. The risk disclosures below apply to the City's
internal investment pool. Portfolio investments are exposed to four types of risk: custodial (investments and cash
deposits); default; concentration; and market or interest rate risk.
Investments held outside the Treasurer's Pool consist mainly of required reserve funds for various bond issues. They are
held by trustees, and are not available for the City's general expenditures.
61
CITY OF CARLSBAD
Notes to the Financial Statements
Note 3. Deposit and Investment Risk (Continued)
As of June 30, 2004 the City had the following investments in its portfolio:
Treasurer's Pool investments
U.S. agencies:
Federal Home Loan Mortgage Corporation
Federal Home Loan Bank
Federal National Mortgage Association
Federal Farm Credit Bank
Subtotal U.S. agencies
Medium-term corporate notes
LAIF
Cash accounts
Total Treasurer's Pool
Investments held outside the Treasurer's Pool
Debt Service Funds/bond proceeds
Other deposits
Petty cash funds
Total cash and investments
Statement of Net Assets, Primary Government
Cash and investments
Restricted cash and investments
Statement of Net Assets, Fiduciary Funds
Cash and investments
Restricted cash and investments
Total cash and investments
Fair Market
Value
147,341,598
78,755,837
35,099,925
3,007,083
264,204,443
97,989,309
109,885,607
2,622,282
474,701,641
17,318,615
327,883
6,063
492,354,202
$ 468,485,303
1,613,206
17,495,367
4,760,326
S 492,354,202
%of
Total
Modified
Duration
31.0%
16.6%
7.4%
0.6%
55.7%
20.6%
23.1%
0.6%
100.0%
3.383
2.998
2.591
1.645
3.144
1.501
2.055
Custodial credit risk (investments)
The City uses Union Bank of California (UBC) as a third-party custody and safekeeping service for its investment
securities. Custodial credit risk is the risk that the City will not be able to recover the value of its investments in the event
of a UBC failure. All City investments held in custody and safekeeping by UBC are held in the name of the City and are
segregated from securities owned by the bank. This is the lowest level of custodial credit risk exposure.
Custodial credit risk (deposits)
The City maintains cash accounts at Wells Fargo Bank (WFB) and UBC. At the conclusion of each business day,
balances in these accounts are "swept" into overnight investments, which are in either U.S. government securities
(guaranteed) or in U.S. agency securities (government sponsored). The California Code and the City's Investment Policy
authorize both of these types of investments. A small amount of cash is not swept from the WFB checking accounts to
cover checks that may be presented for payment. Amounts up to $100,000 are FDIC insured.
62
CITY OF CARLSBAD
Notes to the Financial Statements
Note 3. Deposit and Investment Risk (Continued)
Concentration credit risk
Concentration credit risk is the heightened risk of potential loss when investments are concentrated in one issuer. The
California state code requires that total investments in medium-term corporate notes of all issuers not exceed 30% of the
portfolio. As of June 30, 2004, approximately 25% of the City's total portfolio investments, based on cost, were in
medium-term corporate notes.
For concentration of investments in any one issuer, the City's Investment Policy requires that no more than 5% of
investments in corporate notes be in any one issuer. There is no similar requirement in either the state code or the City's
Investment Policy for U.S. agencies. As of June 30, 2004, the portfolio was in compliance with this requirement.
Default credit risk
Default credit risk is the risk that the issuer of the security does not pay either the interest or the principal when due. The
debts of most U.S. agencies are not backed by the full faith and credit of the federal government; however, because the
agencies are U.S. Government-sponsored, they carry AAA credit ratings. The default credit risk of these investments is
minimal.
California state code limits investments in medium-term corporate notes to the top three credit ratings (AAA, AA, and A).
It is the City's policy, however, to limit investments to the top two credit ratings (AAA and AA). As of June 30, 2004,
approximately 49% of the investments in medium-term corporate notes did not have one of these two credit ratings,
however, these investments had credit ratings of at least an A rating. All of these investments were made when the credit
ratings were either AAA or AA. California state code and the City's Investment Policy allow the City Treasurer to
determine the course of action to correct exceptions to the Policy. It is the intent of the City Treasurer to hold these
investments in the portfolio until maturity unless events indicate they should be sold. The default credit risk for corporate
notes with a credit rating of single A is lower than U.S. federal agencies or LAIF, but is considered by the City Treasurer
to be within acceptable limits for purposes of holding to maturity. A credit rating of single A is within State code
requirements.
The Local Agency Investment Fund (LAIF) is an investment pool managed by the California State Treasurer. Its
investments are short-term and follow the investment requirements of the State. As of June 30, 2004, the average maturity
of the LAIF investments was 196 days. LAIF is not rated; however, the City Treasurer considers the default credit risk of
LAIF to be minimal.
Interest rate risk
Interest rate risk is the risk that investments will lose market value because of increases in market interest rates. A rise in
market interest rates will cause the market value of investments made earlier at lower interest rates to lose value. The
reverse will cause a gain in market value. As of June 30, 2004, the portfolio had a 0.2% loss in market value.
The City's investment policy has adopted two means of limiting its exposure to market value losses caused by rising
market interest rates: (1) limiting total portfolio investments to a maximum modified duration of 2.2, and (2) requiring
maturing investments within one year be equal to an amount that is not less than the current fiscal year's operating budget.
The City met those requirements as follows:
1. As of June 30, 2004, the modified duration of the portfolio was 2.055. Modified duration is a measure of the
sensitivity that the value of a fixed-income security has to changes in market rates of interest. Modified duration
identifies the potential gain/loss in value before the gain/loss actually occurs. It is a prospective measurement,
e.g., a modified duration of 1.5 indicates that when and if a 1% change in market interest rates occurs, a 1.5%
change in the value of a security will result. Investments with modified durations of one to three are considered
to be relatively conservative.
2. As of June 30, 2004, maturities within one year exceeded the required minimum of $143,000,000 (total operating
budget for the City per the 2003-04 Operating Budget adopted by the City Council).
63
CITY OF CARLSBAD
Notes to the Financial Statements
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, 2004:
Due to Due from
Other Funds Other Funds
General $ - $ 339,296
Special Revenue Funds:
Section 8 Housing Authority 153,000
Capital Project Funds:
Federal Grants - Intermodal Surface Transportation Efficiency Act 174,742
Other Capital Project Funds 11,554 -
Totals $ 339,296 S 339,296
These balances resulted from expenditures being incurred prior to receipt of the related revenue source.
Note 5. Advances to and from Other Funds
The following table shows amounts advanced from governmental funds within the City to other funds within the City at
June 30, 2004:
Advances From
General Fund
General Fund
General Fund
General Fund
Special Revenue Funds:
Gas Tax
Capital Projects Funds:
General Capital Construction
Advances To
Redevelopment Debt Service Funds
Park Development Capital Projects Fund
Special Benefit Districts Special Revenue Fund
Enterprise Funds
Golf Course
Solid Waste
Bridge and Thoroughfare Districts Capital
Project Fund
Capital Projects Funds:
Park Development
Bridge and Thoroughfare Districts
Assessment and Other Districts
Amount
$ 13,218,891
550,000
30,000
2,737,200
1,360,219
3,643,344
2,430,000
840,000
790,854
$ 25,600,508
Advances to and from other funds are primarily long term advances used to fund capital projects in advance of related
revenues.
64
CITY OF CARLSBAD
Notes to the Financial Statements
Note 6. Capital Assets
Capital asset activity was as follows for the
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
year ended June 30, 2004:
Balance at
July 1,2003
$ 54,385,184 $
80,252,719
134,637,903
66,638,374
10,384,245
21,463,208
57,431,872
155,917,699
(11,566,008)
(2,427,016)
(10,984,968)
(530,126)
(25,508,118)
130,409,581
Increases
767,394
24,616,316
25,383,710
215,288
489,633
1,076,645
55,473,134
57,254,700
(1,372,041)
(406,287)
(2,310,756)
(1,960,008)
(6,049,092)
51,205,608
Balance at
Decreases June 30, 2004
$ - $ 55,152,578
(43,100,800) 61,768,235
(43,100,800) 116,920,813
66,853,662
10,873,878
(1,330,391) 21,209,462
112,905,006
(1,330,391) 211,842,008
(12,938,049)
(2,833,303)
1,140,763 (12,154,961)
(2,490,134)
1,140,763 (30,416,447)
(189,628) 181,425,561
Governmental activities
capital assets, net $265,047,484 $76,589,318 $(43,290,428) $298,346,374
65
CITY OF CARLSBAD
Notes to the Financial Statements
Note 6. Capital Assets (Continued)
Balance at
July 1,2003 Increases
Balance at
Decreases __ June 30, 2004
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
Business-type activities
capital assets, net
8,663,600 $ $ - $ 8,663,600
37,792,947 14,463,112 (3,817,157) 48,438,902
46,456,547
2,258,064
5,556,571
1,565,983
128,559,111
35,903,734
173,843,463
(775,818)
(1,839,433)
(1,160,211)
(31,528,001)
(9,938,362)
(45,241,825)
128,601,638
14,463,112
-
30,232
9,712,459
1,913,783
11,656,474
(55,445)
(148,770)
(72,741)
(2,388,697)
(683,197)
(3,348,850)
8,307,624
(3,817,157) 57,102,502
2,258,064
5,556,571
(27,368) 1,568,847
138,271,570
(78,986) 37,738,531
(106,354) 185,393,583
(831,263)
(1,988,203)
8,450 (1,224,502)
(33,916,698)
(10,621,559)
8,450 (48,582,225)
(97,904) 136,811,358
175,058,185 $22,770,736 (3,915,061) $193,913,860
66
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 $ 533,123
Community development 165,844
Public safety 445,964
Community services 1,111,747
Public works 2,108,266
Capital assets held by the internal service funds
(charged to various functions based on
their usage of the assets) 1,684,148
Total depreciation expense - governmental activities $ 6,049,092
Business-type activities:
Sewer $ 1,606,031
Water 1,742,819
Total depreciation expense - business-type activities $ 3,348,850
67
CITY OF CARLSBAD
Notes to the Financial Statements
Note 7. Accrued Liabilities
Accrued liabilities were as follows
Governmental activities:
General Fund
Bridge and Thoroughfare
Districts
Community Facilities
District No. 1
General Capital Construction
Public Facilities
Construction
Other Governmental Funds
Total governmental
activities
Business-type activities:
Enterprise funds:
Carlsbad Municipal Water
District
Golf Course
Sewer
Solid Waste
* Internal Service Funds
Total business-type
activities
at June 30, 2004:
Salaries and
Vendors Benefits
$1,370,293 $2,028,084
7,984
75,442
251,879
539,729
5,797,065 81,752
$8,042,392 $2,109,836
$3,620,262 $ 411,309
300,659
2,097,713 71,313
46,751 35,736
280,909 2,681,902
$6,346,294 $3,200,260
IFD Refuse
Payable Disposal Total
$ 79,006 $ - $ 3,477,383
7,984
75,442
251,879
539,729
5,878,817
$ 79,006 $ - $10,231,234
$ - $ - $ 4,031,571
300,659
2,169,026
232,341 314,828
2,962,811
$ - $ 232,341 $ 9,778,895
"Internal service funds have been included with governmental activities on the Government-wide Statement of Net Assets.
68
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, 2004:
Principal Principal
Balance at Balance at Due Within
June 30,2003 Additions Reductions June 30,2004 One Year
Governmental activities:
Bonds
Certificates of participation
HUD Section 108 loan
Obligations under capital leases
Total governmental
activities
Business-type activities:
Certificates of participation
Installment purchase agreement
Loan payable
Accrued assessments
Less deferred charges
Total business type activities
Entity-wide total
$13,200,000 $
3,950,000
169,950
178,701
17,498,651
1,175,000
8,375,000
1,460,350
443,113
11,453,463
(644,083)
10,809,380
$28,308,031 $
$ 360,000
590,000
169,950
100,194
1,220,144
1,175,000
520,000
117,177
186,060
1,998,237
(84,778)
1,913,459
$3,133,603
$12,840,000
3,360,000
-
78,507
16,278,507
7,855,000
1,343,173
257,053
9,455,226
(559,305)
8,895,921
$25,174,428
$ 380,000
620,000
-
69,907
1 ,069,907
550,000
120,575
196,925
867,500
(61,940)
805,560
$1,875,467
69
CITY OF CARLSBAD
Notes to the Financial Statements
Note 8. Long-term Debt (Continued)
Long-term debt at June 30, 2004 is comprised of the following issues:
Governmental long-term debt
Balance at
June 30, 2004
1993 Carlsbad Housing and Redevelopment Commission Tax Allocation
Bonds, principal due in amounts ranging from $380,000 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 $620,000 to $735,000 on August 1 of each year
through 2009, interest payable on August 1 and February 1 at rates varying
from 4.40% to 4.70% per annum. Payable from the General Fund, with a
required reserve amount of $659,500.
The City has entered into several office equipment lease-purchase
agreements. As of June 30, 2004, the City has purchased copier equipment
totaling $456,783. All lease terms are for 60 months, with interest rates
ranging from 5.56% to 16.82%.
Sub-total governmental long-term debt
Less current portion
Total long-term portion of governmental debt
Business-type long-term debt
12,840,000
3,360,000
78,507
16,278,507
1,069,907
$ 15,208,600
Balance at
June 30, 2004
1997 Encina Financing Joint Powers Authority (EFJPA) Installment Purchase
Agreement, principal due in varying amounts ranging from $550,000 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 4.50% to 5.50% per
annum. The required reserve amount is $939,581. 7,855,000
1993 Carlsbad Municipal Water District loan agreement with the State
Water Resources Control Board. Principal is due in varying amounts
ranging from $ 120,575 to $ 151,558 on November 30 of each year through
2013, interest payable on November 30 of each year at 2.90% per annum. 1,343,173
In December 1994, the Golf Course Enterprise Fund purchased land
with accrued assessments. Principal is due in the amount of
$196,925 in 2004-05. The 2005-06 principal amount of $206,432 will be reduced
by a reserve fund credit of $ 146,304 which is already reflected on the City's books. 257,053
Subtotal business-type long-term debt 9,455,226
Less unamortized discounts, issuance costs and deferred charges 559,305
Less current portion 805,560
Total long-term portion of business-type debt $ 8,090,361
70
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:
2005
2006
2007
2008
2009
2010-2014
2015-2019
2020-2024
Principal
$ 1,069,907 3
1,037,896
1 ,090,704
1,140,000
1,200,000
2,715,000
3,505,000
4,520,000
$ 16,278,507 3
Interest
i 808,825
756,975
706,090
652,310
595,182
2,486,606
1 ,674,694
623,341
i 8,304,023
Principal
$ 867,500 3
759,200
732,670
771,372
810,182
4,609,302
905,000
-
$ 9,455,226 3
Interest
! 448,706
407,274
360,801
323,661
286,514
811,488
23,190
-
! 2,661,634
Note 9. Rate Covenants
The 1997 Encina Financing Joint Powers Authority Installment Purchase Agreement (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, 2004, the City has five series of Assessment District Bonds outstanding in the amount of $45,352,913.
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 District Agency Funds.
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 which will be partially occupied by persons of low or moderate
income. The total amount of mortgage revenue bonds outstanding as of June 30, 2004 is $48,477,000. 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.
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.
71
CITY OF CARLSBAD
Notes to the Financial Statements
Note 11. Fund Balances
The following is a summary of reserved and unreserved but designated fund balances as of June 30, 2004:
Fund Balances
Reserved for:
Loans receivable
Inventory
Prepaid items
Debt service
Advances to other
other funds*
Flower fields
preservation
Library endowment
Low and moderate
income housing
Habitat mitigation
Golf course
Encumbrances
Totals
Unreserved:
Designated for
approved capital
projects
Designated for
continuing
appropriations
Totals
Undesignated
Total fund
balances
Governmental Funds
Redevelopment Bridge and Community General
Debt Service Thoroughfare Facilities Capital
General Funds Districts District No. 1 Construction
$ 158,844 $ - $ - $ - $
15,165 ....
6,600 ... -
_
8,799,504 - - - 4,060,854
.
.
725,423 -
15,000,000 -
3,211,239 - 115,492 70,170 1,719,286
27,916,775 - 115,492 70,170 5,780,140
1,090,423 37,990,275
13,124,942 - 1,311,717 82,058 3,303,970
13,124,942 - 2,402,140 38,072,333 3,303,970
43,015,831 (10,469,907) - - 42,989,799
$ 84,057,548 $ (10,469,907) $ 2,517,632 $ 38,142,503 $ 52,073,909
Public Other
Facilities Governmental
Construction Funds
$ - $ 10,029,399
-
402,238
659,500
3,643,344
935,000
251,000
1,399,650
-
-
9,494,089 21,634,291
9,494,089 38,954,422
4,446,884 18,746,916
22,721,440 29,089,944
27,168,324 47,836,860
39,943,038
$ 36,662,413 $ 126,734,320
Total
$ 10,188,243
15,165
408,838
659,500
16,503,702
935,000
251,000
1,399,650
725,423
1 5,000,000
36,244,567
82,331,088
62,274,498
69,634,071
131,908,569
115,478,761
$ 329,718,418
* Only reflects that portion of fund balance invested in interfund advances (the General fund amount is net of $9,096,806
in deferred revenue for measurable but unavailable interest earned on such advances).
72
CITY OF CARLSBAD
Notes to the Financial Statements
Note 11. Fund Balances (Continued)
Reserves for loan receivables, inventory, prepaid items and advances to other funds, net of accrued interest recorded as
deferred revenue, are established to show that certain assets are already committed to other purposes and are not available
for discretionary expenditures.
Reserves for debt service represent resources legally restricted to the payment of long-term debt principal and interest
maturing in future years.
Reserves for flower-fields preservation represent resources set aside to support floriculture research for the preservation of
the "Flower Fields" located in Carlsbad.
Reserves for library endowment represent resources set aside to support programs in the Dove Library auditorium.
Reserves for low and moderate income housing are for future Council approved loans to developers.
Reserves for habitat mitigation represent resources set aside as security for the construction of wetland habitat to ensure
the mitigation of certain species required as part of the Cannon Road West project.
Reserves for the golf course represent resources set aside for a future loan to the Golf Course Enterprise fund for the
construction of a municipal golf course.
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.
Note 12. Accumulated Fund Deficits/Negative Net Assets
The following funds reported deficits in fund balances or net assets as of June 30, 2004:
Deficit Balance
Debt Service Funds:
Redevelopment Areas $ (10,469,907)
73
CITY OF CARLSBAD
Notes to the Financial Statements
Note 13. Interfund Transfers
Interfund transfers for the year ended June 30, 2004, consisted of the following:
Fund
Major Funds:
General
Redevelopment, Debt Service Funds
Capital Project Funds:
Bridge and Thoroughfare Districts
Community Facilities District No. 1
General Capital Construction
Public Facilities Construction
Nonmajor Governmental Funds
Enterprise Fund, Carlsbad Municipal Water District
Enterprise Fund, Sewer
Enterprise Fund, Solid Waste
Internal Service Funds
Totals
Transfers
In From
Other Funds
$ 314,266
-
215,280
1,863
36,000
32,000
8,129,950
-
1,698,512
-
620,769
$ 11,048,640
Transfers
Out To
Other Funds
$ 4,968,000
240,000
1,863
215,280
827,554
-
2,076,921
1,698,512
-
962,741
57,769
$ 11,048,640
Transfers are used to (1) move receipts restricted to debt service from the funds collecting the receipts to the debt service
fund as debt service payments become due, (2) move the remaining fund balances of closed funds to the General fund, (3)
move revenues and expenditures to the appropriate funds, and (4) use unrestricted revenues collected in the General fund
to finance various programs accounted for in other funds in accordance with budgetary authorizations.
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 Self
Insured Benefits 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, 2004, the
unencumbered fund equity for the Risk Management Self-Insurance fund was approximately $900,000.
Dental insurance coverage for City employees is administered by CoreSource. Under the City's agreement with
CoreSource, CoreSource will pay dental claims for each covered member, up to a maximum of $1,500 per calendar year.
The City is insured for workers' compensation claims by Continental Casualty. Continental Casualty provides coverage
for losses which exceed the City's self-insured retention of $1,000,000 per claim.
74
CITY OF CARLSBAD
Notes to the Financial Statements
Note 14. Risk Management (Continued)
The estimated claims payable reported at June 30, 2004 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 2003 and 2004 for the three internal service funds are as follows:
Claims
Health Insurance fund:
2002-2003
2003-2004
Beginning
Balance
$ 324,340
$ 300,949
Expense and
Changes in
Estimates
$ 1,223,712
$ 379,151
Claim
Payments
S (1,247,103)
$ (602,237)
Ending
Balance
$ 300,949
$ 77,863
Risk Management fund:
2002-2003 S 1,001,635 $ 123,794 $ (421,026) S 704,403
2003-2004 $ 704,403 S 211,010 $ (294,735) $ 620,678
Workers' Compensation fund:
2002-2003 $ 1,159,351 S 1,807,792 S (956,652) $ 2,010,491
2003-2004 $ 2,010,491 $ 2,094,932 S (1,196,533) $ 2,908,890
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, 2004, the Cities and Districts
have the following approximate ownership interest:
City of Carlsbad 24%
City of Vista 25%
Leucadia County Water District 17%
Vallecitos Water District 23%
Buena Vista Sanitation District 7%
City of Encinitas 4%
EWA's financial statements for the fiscal year ended June 30, 2003 (the latest available) incorporated the provisions of
GASB 34 and reflect the following:
Total assets $ 47,194,922
Total liabilities 1,424,280
Net assets S 45,770,642
The EWA docs 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 revenue for the EWA totaled $5,822 in fiscal year 2003. The financial
statements of the EWA can be obtained at 6200 Avenida Encinas, Carlsbad, California 92009.
75
CITY OF CARLSBAD
Notes to the Financial Statements
Note 15. Joint Ventures (Continued)
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.
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, 2004:
Member
City of Carlsbad
Leucadia County Water District
Agreement
Balance
$ 7,855,000
5,355,000
$ 13,210,000
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 safety employees. The amount paid by the City on behalf of
employees for the year ended June 30, 2004 was $3,922,495. The City is required to contribute at an actuarially
determined rate. For the year ended June 30, 2004, the employer contribution rate for the City of Carlsbad (as a
percentage of covered payroll) was 15.951% for safety employees and 2.258% for miscellaneous employees. The
contribution requirements of plan members and the City are established by PERS.
76
CITY OF CARLSBAD
Notes to the Financial Statements
Note 16. Retirement Plan (Continued)
In October 2003, the City was notified by PERS that the employer contribution rate for the City of Carlsbad (as a
percentage of payroll) will be 27.573% for safety employees and 6.938% for miscellaneous employees for the fiscal year
ended June 30, 2005. At January 1, 2005, the miscellaneous employees plan rates will increase to 16.664% due to the
contract agreement to increase the retirement formula to 3% at 60 years of age.
Annual pension cost
For 2004, the City's annual pension cost (employer contribution) of $1,704,651 for safety and $579,190 for miscellaneous
to PERS was equal to the City's required and actual contributions. For 2004, the member contributions paid by the City
were $1,124.752 for safety and $1,797,744 for miscellaneous. The required contribution was determined as part of the
June 30, 2001, 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) 2.0% 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, 2004 is through June 30, 2022; for safety employees at June 30, 2004, it is through
June 30, 2009.
Three-year trend information for PERS (safety)
Fiscal Year
Ending
Annual Pension
Cost (Employer
Contribution)
Percentage of
APC Contributed
Net Pension
Obligation
6/30/02
6/30/03
6/30/04
473,370
441,058
1,704,651
Three-year trend information for PERS (miscellaneous)
Fiscal Year
Ending
Annual Pension
Cost (Employer
Contribution)
100%
100%
100%
Percentage of
APC Contributed
Net Pension
Obligation
6/30/02 !
6/30/03 !
6/30/04 !
Required supplementary information
Funded status of plan (safety)
579,190
100%
100%
100%
Valuation
Date
6/30/01
6/30/02
6/30/03
Entry Age
Normal
Accrued
Liability
$ 77,957,502
$ 92,896,916
$ 99,827,853
Actuarial
Value
of Assets
$ 87,913,468
$ 83,572,239
$ 85,963,105
Unfunded
Liability/
(Excess
Assets)
$ (9,955,966)
$ 9,324,677
$ 13,864,748
Funded
Status
112.8%
90.0%
86.1%
Annual
Covered
Payroll
$ 11,581,444
$ 12,110,117
$ 12,709,908
UAAL
As a %
of Payroll
(85.965%)
76.999%
109.086%
77
CITY OF CARLSBAD
Notes to the Financial Statements
Note 16. Retirement Plan (Continued)
Funded status of plan (miscellaneous)
Valuation
Date
6/30/01
6/30/02
6/30/03
Entry Age
Normal
Accrued
Liability
$ 79,229,253
$ 88,036,696
$ 121,455,280
Actuarial
Value
of Assets
$ 99,603,848
$ 95,730,136
$ 98,339,566
Unfunded
Liability/
(Excess
Assets)
$(20,374,595)
$ (7,693,440)
$ 23,115,714
Funded
Status
125.7%
108.7%
81.0%
Annual
Covered
Payroll
$ 21,056,410
$ 23,279,207
$ 25,059,422
UAAL
As a %
of Payroll
(96.762%)
(33.049%)
92.244%
Note 17. Postretirement 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 postretirement 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 postretirement health care benefits are funded on a pay-as-you-go basis. Expenditures were approximately $97,150 for
post-retirement health care costs during 2003-04. 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.
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, 2004 are:
2005
2006
2007
2008
83,700
83,700
83,700
7,000
Total minimum future rental payments $ 258,100
78
SUPPLEMENTARY INFORMATION
79
CITY OF CARLSBAD
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2004
Accounts, net
Due from other governments
Prepaid items
Restricted assets, cash and investments
Loan receivables
Advances to other funds
Total assets
LIABILITIES AND FUND BALANCES
Special Revenue Funds
ASSETS
Cash and investments
Receivables:
Taxes
Other
Affordable
Housing
$ 10,291,376
Community
Development
Block Grant
$ 62,892
Donations
and Bequests
$ 9,013,427
Federal
Grants
$ 58,772
Gas
Tax
$ 6,920,907
Low and
Moderate
Income
Housing
$ 2,727,912
6,796
99
510
20,000
7,938,115
3,643,344
$ 18.229,491 $62,892 $ 9,033,937 58,772 $10,564,251
2,091,284
4,826,091
Liabilities:
Accrued liabilities
Due to other funds
Deposits payable
Due to to other governments
Advances from other funds
Deferred revenue
Total liabilities
Fund balances:
Reserved for:
Loans receivable
Prepaid items
Debt service
Advances to other funds
Flower fields preservation
Library endowment
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
9,897 $
9,897
7,938,115
17,735 26,682 6,193 6,176
17,735 26,682 6,193 6,176
20,000
3,643,344
4,033
4,033
2,091,284
1,189,650
7,816
9,084,013
18,219,594
$ 18,229,491
209,729
(164,572)
45,157
$ 62,892
935,000
251,000
8,515
200,953
7,591,787
9,007,255
$ 9,033,937
32,038
20,396
145
52,579
$ 58,772
217,278
4,198,166
2,499,287
10,558,075
$ 10,564,251
210,000
674
2,520,100
4,822,058
$ 4,826,091
80
Special Revenue Funds
Other
Special Police Section 8
Revenue Asset Housing
Funds Forfeiture Authority
$ 241,509 $ 418,754 $ 240
2,615
326,425
382,238
-
$ 241,509 $ 418,754 $ 711,518
Special Storm Tyler
Benefit State Water Court
Districts Grants Program Apartments
$ 2,668,504 $ 5,010 $ - $ 704,360
12,995
2,047
134,514
-
$ 2,683,546 $ 139,524 $ - $ 704,360
Totals
$ 33,113,663
19,791
99
5,172
460,939
402,238
10,029,399
3,643,344
$ 47,674,645
$ 192 $ 23 $ 49,827
153,000
67,550
-
192 23 270,377
382,238
7,010 13,761 4,567
50,100
234,307 354,870 54,336
241,317 418,731 441,141
$ 241,509 $ 418,754 $ 711,518
$ 128,013 $ 15,968 $ - $ -
20,641
30,000
158,013 15,968 - 20,641
-
103,374 32,547
255,649 12,963
2,166,510 78,046 - 683,719
2,525,533 123,556 - 683,719
$ 2,683,546 $ 139,524 $ - $ 704,360
$ 264,739
153,000
88,191
30,000
535,930
10,029,399
402,238
3,643,344
935,000
251,000
1,399,650
637,309
4,198,166
540,061
25,102,548
47,138,715
$ 47,674,645
(Continued)
81
CITY OF CARLSBAD
Combining Balance Sheet
Nonmajor Governmental Funds (Continued)
June 30, 2004
ASSETS
Cash and investments
Debt Service
Fund
Hosp Grove
COPs
$ 665,740
Capital Project Funds
Assessment
and Other
Districts
$ 13,613,542
Federal Infrastructure
Grants Replacement
$ - $14,751,254
Other
Capital
Project
Funds
$ 299,923
Park
Development
$ 5,062,761
Receivables:
Taxes
Other
Accounts, net
Due from other governments
Prepaid items
Restricted assets, cash and investments
Loan receivables
Advances to other funds
Total assets
LIABILITIES AND FUND BALANCES
12,085
231,501
675,080
1,340,820 $13,625,627 $ 231,501 $14,751,254 $ 299,923 $ 5,062,761
Liabilities:
Accrued liabilities
Due to other funds
Deposits payable
Due to to other governments
Advances from other funds
Deferred revenue
Total liabilities
Fund balances:
Reserved for:
Loans receivable
Prepaid items
Debt service
Advances to other funds
Flower fields preservation
Library endowment
Low and moderate income housing
Hncumbrances
Unreserved:
Designated for approved capital projects
Designated for continuing appropriations
Undesignated
Total fund balances
Total liabilities and fund balances
598,046 $ 56,759 $ 11,277 $ - $ 784
174,742 - 11,554
790,854 - - - 2,980,000
1,388,900 231,501 1.277 11,554 2,980,784
659,500
21,260
660,060
141,166
1,620,207
10,475,354
77,206
(77,206)
418,694
341,145
13,980,138
1,528
9,343
277,498
5,000
195,779
1,881,198
1,340,820 12,236,727 14,739,977 288,369 2,081,977
$ 1,340,820 13,625,627 231,501 $ 14,751,254 299,923 $ 5,062,761
82
Capital Project Funds
Planned Rancho
Local Santa Fe Traffic
Drainage Road Redevelopment Sales Tax/ State Impact
Facilities Project Agency TransNet Grants Projects
$9,303,917 $ 21,569,778 $ 1,361,163 $10,586,621 $ 257,384 $ 8,553,096
.
.
148,185 - 18,358
1,405,153 - 869,678 78,467
_
_
_
_
$9,452,102 $ 22,974,931 $ 1,379,521 $11,456,299 $ 335,851 $ 8,553,096
Totals
$ 85,359,439
_
12,085
166,543
2,584,799
-
-
$ 88,122,866
Total Other
Governmental
Funds
$ 119,138,842
19,791
12,184
171,715
3,045,738
402,238
675,080
10,029,399
3,643,344
$ 137,138,331
$ 868,122 $ 3,008,256 $ 34,946 $ 966,585 $ 24,000 $ 45,303
.
_
148,668
.
148,185 - ....
1,016,307 3,008,256 34,946 966,585 172,668 45,303
_
_
_
.
_
.
25,315 18,261,049 80,207 1,519,219 52,750 414,848
4,430,872 - - 1,528,484 106,803 6,666,605
3,979,608 1,705,626 1,264,368 7,442,011 3,630 1,426,340
_
8,435,795 19,966,675 1,344,575 10,489,714 163,183 8,507,793
$9,452,102 $ 22,974,931 $ 1,379,521 $11,456,299 $ 335,851 $ 8,553,096
$ 5,614,078
186,296
-
148,668
3,770,854
148,185
9,868,081
-
-
-
-
-
20,996,982
14,548,750
28,528,623
14,180,430
78,254,785
$ 88,122,866
$ 5,878,817
339,296
88,191
148,668
3,800,854
148,185
10,404,011
10,029,399
402,238
659,500
3,643,344
935,000
251,000
1,399,650
21,634,291
18,746,916
29,089,944
39,943,038
126,734,320
$ 137,138,331
83
CITY OF CARLSBAD
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2004
Special Revenue Funds
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 (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficits) at beginning of year
Fund balances at end of year
Affordable
Housing
$
544,503
99,322
-
75,996
-
3,763,048
-
-
4,482,869
-
-
771,921
-
-
-
1,592
442
773,955
3,708,914
5,496
-
5,496
3,714,410
14,505,184
$ 18,219,594
Community
Development
Block Grant
$
615,638
-
-
117,702
-
-
-
25,496
758,836
-
-
222,286
-
-
314,436
170,000
7,029
713,751
45,085
-
(5,496)
(5,496)
39,589
5,568
$ 45,157
Donations
and Bequests
$
-
-
-
72,895
-
181,327
141,399
1,473
397,094
52,745
-
57,200
158,767
-
-
-
-
268,712
128,382
9,443
-
9,443
137,825
8,869,430
$ 9,007,255
Federal
Grants
$
34,408
-
-
-
-
-
-
-
34,408
-
37,912
-
-
-
-
-
-
37,912
(3,504)
3,823
(15,000)
(11,177)
(14,681)
67,260
$ 52,579
Low and
Moderate
Gas Income
Tax Housing
$ 1,702,712 $ 671,063
-
-
-
83,073 105,314
-
-
-
-
1,785,785 776,377
-
-
73,194
-
-
502,378
619
172
502,378 73,985
1,283,407 702,392
-
(7,500)
(7,500)
1,275,907 702,392
9,282,168 4,119,666
$10,558,075 $4,822,058
84
Special Revenue Funds
Other
Special
Revenue
Funds
$
-
-
-
1,921
-
-
-
-
1,921
-
-
14,480
-
-
_
-
14,480
(12,559)
-
.
(12,559)
253,876
$ 241,317
Police
Asset
Forfeiture
$
-
-
155,974
951
-
-
-
-
156,925
36,190
-
-
-
29,407
_
-
65,597
91,328
(267,236)
(267,236)
(175,908)
594,639
S 418,731
Section 8
Housing
Authority
S
5,749,564
-
-
1,943
-
-
-
-
5,751,507
-
5,719,216
-
-
-
4,421
1,230
5,724,867
26,640
-
26,640
414,501
$ 441,141
Special
Benefit
Districts
$
-
1,808,521
-
21,612
130,130
-
-
-
1,960,263
-
-
-
2,222,981
16,150
_
-
2,239,131
(278,868)
-
.
(278,868)
2,804,401
$2,525,533
Storm Tyler
State Water Court
Grants Program Apartments
$ - $ - $ -
163,365
394,492
_
7 - 6,669
.
_
.
28,907
192,279 - 401,161
246,311
236,140
35,981
.
-
_
.
282,292 - 236,140
(90,013) - 165,021
962,741
(73,796)
(73,796) 962,741
(163,809) 962,741 165,021
287,365 (962,741) 518,698
$ 123,556 $ - $ 683,719
Totals
$ 2,373,775
7,107,478
2,302,335
155,974
488,083
130,130
3,944,375
141,399
55,876
16,699,425
52,745
320,413
7,079,957
209,228
2,222,981
862,371
176,632
8,873
10,933,200
5,766,225
981,503
(369,028)
612,475
6,378,700
40,760,015
$ 47,138,715
(Continued)
85
CITY OF CARLSBAD
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds (Continued)
For the Year Ended June 30, 2004
Revenues:
Taxes
Intergovernmental
Charges for services
Fines and forfeitures
Income from property and investments
Interdepartmental charges
Contributions from property owners
Donations
Miscellaneous
Debt Service
Fund
Assessment
Hosp Grove and Other
COPs Districts
$ - $
-
-
-
47,335 19,518
-
10,261,224
-
-
Capital Project Funds
Federal Infrastructure
Grants Replacement
$ - $ 10,614
361,047
-
-
203,936
-
-
-
-
Other
Capital
Project Park
Funds Development
$ - $
-
-
-
1,890 19,872
-
733,261
-
-
Total revenues
Expenditures:
Current:
General government
Public safety
Community development
Community services
Public works
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (Uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances at beginning of year
Fund balances at end of year
47,335 10,280,742 361,047 214,550 1,890 753,133
800,000
800,000
72,743
520,525 361,452 336,294
37,559
9,621
634,321 3,731,560
634,321 3,731,560
719,982
590,000 - - ...
167,140 - - ...
757,140
(709,805)
593,268
9,687,474
361,452
(405)
336,294
(121,744)
47,180
(45,290)
719,982
33,151
90,195 10,321,795 (405) 3,609,816 (45,290) 33,151
1,250,625 1,914,932 405 11,130,161 333,659 2,048,826
: 1,340,820 $12,236,727 14,739,977 $288,369 $2,081,977
86
Capital Project Funds
Planned Rancho
Local Santa Fe
Drainage Road
Facilities Project
$ - $
514,214 4,533,346
-
-
81,857 155,884
-
645,363
-
-
1,241,434 4,689,230
-
-
-
-
957,271 11,198,208
_
-
957,271 11,198,208
284,163 (6,508,978)
2,220
(634,321)
(632,101)
284,163 (7,141,079)
8,151,632 27,107,754
$8,435,795 $19,966,675
Redevelopment Sales Tax/
Agency TransNet
$ - $
4,193,556
12,916
-
50,756 53,659
-
-
-
-
63,672 4,247,215
605,438
-
-
-
-
15,441 4,360,271
2,210
614
623,703 4,360,271
(560,031) (113,056)
1,929,752
(862,198)
1,067,554
507,523 (113,056)
837,052 10,602,770
$ 1,344,575 $ 10,489,714
Traffic
State Impact
Grants Projects
$ - $ -
78,467
-
-
1,538 75,593
-
897,699
-
-
80,005 973,292
148,668
-
-
-
-
240,860 147,986
_
-
389,528 147,986
(309,523) 825,306
50,594
(211,374)
(160,780)
(470,303) 825,306
633,486 7,682,487
$ 163,183 $8,507,793
Totals
$ 10,614
9,680,630
12,916
-
664,503
-
12,537,547
-
-
22,906,210
864,408
-
-
-
-
18,867,911
2,210
614
19,735,143
3,171,067
6,348,447
(1,707,893)
4,640,554
7,811,621
70,443,164
$ 78,254,785
Total Other
Governmental
Funds
$ 2,384,389
16,788,108
2,315,251
155,974
1,199,921
130,130
16,481,922
141,399
55,876
39,652,970
917,153
320,413
7,079,957
209,228
2,222,981
19,730,282
768,842
176,627
31,425,483
8,227,487
8,129,950
(2,076,921)
6,053,029
14,280,516
112,453,804
$ 126,734,320
87
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds
Year Ended June 30, 2004
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
$ 1,347,000
824,196
522,804
1,451,700
1 ,446,627
5,073
234,440
506,918
(272,478)
35,908
90,275
(54,367)
4,917,823
(4,917,823)
528,400
255,951
272,449
10,000
47,994
(37,994)
Actual
Amounts
(Budgetary
Basis)
$ 4,654,498
781,771
3,872,727
758,836
923,480
(164,644)
601,918
277,227
324,691
36,032
69,879
(33,847)
1,891,704
719,656
1,172,048
816,842
74,659
742,183
7,792
21,490
(13,698)
Variance
Over
(Under)
$ 3,307,498
(42,425)
3,349,923
(692,864)
(523,147)
(169,717)
367,478
(229,691)
597,169
124
(20,396)
20,520
1,891,704
(4,198,167)
6,089,871
288,442
(181,292)
469,734
(2,208)
(26,504)
24,296
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds (Continued)
Year Ended June 30, 2004
Actual Amounts
(Budgetary
Budget Basis)
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
$ 55,000 3
256,694
(201,694)
5,697,929
5,729,525
(31,596)
1,966,880
3,627,782
(1,660,902)
195,851
459,034
(263,183)
5 169,215
77,692
91,523
5,751,507
5,729,434
22,073
2,028,506
2,342,505
(313,999)
197,606
316,545
(118,939)
Variance
Over
(Under)
$ 114,215
(179,002)
293,217
53,578
(91)
53,669
61,626
(1,285,277)
1,346,903
1,755
(142,489)
144,244
Storm Water Program
Total revenues
Total expenditures
Net change in fund balance
Totals
Total revenues
Total expenditures
Net change in fund balance
11,523,108
18,162,819
16,914,456
11,334,338
5,391,348
(6,828,481)
5,580,118 S 12,219,829
89
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Debt Service Funds
Year Ended June 30, 2004
Budget
Actual
Amounts
(Budgetary
Basis)
Variance
Over
(Under)
Redevelopment Areas
Total revenues
Total expenditures
Net change in fund balance
2,066,200
1,686,718
2,527,580
1,667,480
461,380
(19,238)
379,482 $860,100 $480,618
90
91
CITY OF CARLSBAD
Combining Statement of Net Assets
Internal Service Funds
June 30, 2004
ASSETS
Current assets:
Cash and investments
Receivables:
Accounts, net
Inventory
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
Estimated claims payable
Current portion of long-term debt
Total current liabilities
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Fleet Self Insured
Management Benefits
$ 7,646,800 $ 3,313,219
955
102,570
7,750,325 3,313,219
11,495,425
(6,385,281)
5,110,144
5,110,144
$ 12,860,469 S 3,313,219
S 104,680 $ 2,487,730
77,863
1,580
106,260 2,565,593
106,260 2,565,593
5,108,564
7,645,645 747,626
$ 12,754,209 $ 747,626
Information
Technology
$ 3,917,368
-
-
3,917,368
3,006,831
(2,481,954)
524,877
524,877
$ 4,442,245
$ 325,688
-
1,732
327,420
327,420
523,145
3,591,680
S 4,114,825
92
Records Risk Workers'
Management Management Compensation Total
$ 1,558,900 $ 2,936,991 $ 19,373,278
955
- - - 102,570
1,558,900 2,936,991 19,476,803
14,502,256
- - (8,867,235)
- - 5,635,021
~ ~5,635,0~
$ 1,558,900 $ 2,936,991 S 25,111,824
38,220 $ 6,493 $ 2,962,811
620,678 2,908,891 3,607,432
3,312
658,898 2,915,384 6,573,555
658,898 2,915,384 6,573,555
5,631,709
900,002 21,607 12,906,560
900,002 $ 21,607 $ 18,538,269
93
CITY OF CARLSBAD
Combining Statement of Revenues, Expenses and Changes in Net Assets
Internal Service Funds
For the Year Ended June 30, 2004
Operating revenues:
Other charges for services
Miscellaneous
Total operating revenues
Operating expenses:
Depreciation
Fuel and supplies
Claims expense
General and administrative
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Income from property and investments
Gain (loss) on 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
Fleet
Management
$ 3,053,379
87,523
3,140,902
1,168,826
533,304
-
1,348,897
3,051,027
89,875
60,550
74,240
134,790
224,665
_
-
112,451
337,116
12,417,093
$ 12,754,209
Self Insured
Benefits
$ 2,904,615
1,517
2,906,132
-
-
891,433
2,054,188
2,945,621
(39,489)
3,287
-
3,287
(36,202)
_
-
-
(36,202)
783,828
S 747,626
Information
Technology
$ 3,888,912
-
3,888,912
504,324
-
-
3,769,002
4,273,326
(384,414)
38,911
(12,617)
26,294
(358,120)
620,769
-
-
262,649
3,852,176
$ 4,114,825
94
Records
Management
$ 923,105
-
923,105
10,998
-
-
972,012
983,010
(59,905)
(34)
-
(34)
(59,939)
_
(57,769)
-
(117,708)
117,708
$
Risk
Management
$ 651,068
20,099
671,167
-
603,627
568,035
1,171,662
(500,495)
5,673
-
5,673
(494,822)
_
-
-
(494,822)
1,394,824
$ 900,002
Workers'
Compensation
$ 3,250,216 <
53,368
3,303,584
-
2,337,428
159,293
2,496,721
806,863
13,725
-
13,725
820,588
_
-
-
820,588
(798,981)
$ 21,607 1
Totals
5 14,671,295
162,507
14,833,802
1,684,148
533,304
3,832,488
8,871,427
14,921,367
(87,565)
122,112
61,623
183,735
96,170
620,769
(57,769)
112,451
771,621
17,766,648
$ 18,538,269
95
CITY OF CARLSBAD
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2004
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
Net cash provided by (used in) operating activities
Cash flows from noncapital financing activities:
Operating subsidies and transfers to other funds
Cash flows from capital and related financing activities:
(Purchases) sales of capital assets
Principal paid on capital debt
Net cash provided by (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
Cash and cash equivalents at end of year
Fleet Self Insured
Management Benefits
$ 3,053,379 S 3,312,021
(1,354,172)
(596,887)
(248,805)
(1,095,412)
118,957 2,238
972,472 2,218,847
(413,508)
(2,981)
(416,489)
60,550 3,287
616,533 2,222,134
7,030,267 1,091,085
S 7,646,800 $ 3,313,219
Information
Technology
$ 3,888,912
(1,720,036)
(1,495,251)
(384,851)
288,774
605,251
(189,148)
(3,236)
(192,384)
38,911
740,552
3,176,816
$ 3,917,368
96
Records
Management
$ 923,105
(188,262)
(580,106)
(253,333)
(98,596)
(57,769)
15,518
15,518
(34)
(140,881)
140,881
$
Risk Workers'
Management Compensation
S 651,068 $ 3,250,216 5
(202,346)
(172,075) (87,494)
(140,049) (70,719)
(687,352) (1,439,855)
20,100 53,368
(530,654) 1,705,516
-
5,673 13,725
(524,981) 1,719,241
2,083,881 1,217,750
$ 1,558,900 $ 2,936,991 !
Total
5 15,078,701
(3,464,816)
(2,931,813)
(1,097,757)
(3,222,619)
194,663
4,556,359
547,482
(587,138)
(6,217)
(593,355)
122,112
4,632,598
14,740,680
B 19,373,278
(Continued)
97
CITY OF CARLSBAD
Combining Statement of Cash Flows
Internal Service Funds (Continued)
For the Year Ended June 30, 2004
Fleet Self Insured Information
Management Benefits Technology
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) in inventory
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
89,875 $ (39,489) $ (384,414)
1,168,825
31,434
(6,015)
(31)
$ 972,472 $ 2,218,847
504,324
(311,647)
752
2,480,700
(223,085)
54,800
114,064
288,774
112,451 S
98
Records Risk Workers'
Management Management Compensation Total
$ (59,905) $ (500,495) $ 806,863 $ (87,565)
10,997 - - 1,684,146
31,403
(6,015)
76,728 - 132,280
(49,688) (23,162) 254 2,210,521
(83,725) 898,399 591,589
S (98,596) S (530,654) $ 1,705,516 $ 4,556,359
112,451
99
CITY OF CARLSBAD
Combining Statement of Changes in Assets and Liabilities
Agency Funds
June 30, 2004
Contractors' and Miscellaneous Deposits
ASSETS
Current assets:
Cash and investments
Accrued interest
Total current assets
LIABILITIES
Accounts payable
Deposits held for others
Total liabilities
Balance
July 1,2003
$ 12,088,228
-
$ 12,088,228
$ 22,051
12,066,177
S 12,088,228
Additions
$ 28,452,778
27,683
$ 28,480,461
$ 13,671,638
29,039,614
$ 42,711,252
Deductions
$ 26,865,170
15,953
$ 26,881,123
$ 13,378,898
27,733,016
S 41,111,914
Balance
June 30, 2004
$ 13,675,836
11,730
$ 13,687,566
$ 314,791
13,372,775
$ 13,687,566
Assessment Districts
ASSETS
Current assets:
Cash and investments
Accrued interest
Total current assets
Restricted assets:
Cash and investments
Accrued interest
Total restricted assets
Total assets
LIABILITIES
Accounts payable
Deposits held for others
Total liabilities
Balance
July 1 , 2003
$ 3,179,074
29,766
3,208,840
4,017,696
83,592
4,101,288
$ 7,310,128
$ 2,811
7,307,317
$ 7,310,128
Additions
S 5,689,356
77,238
5,766,594
894,630
79,916
974,546
$ 6,741,140
S 185,026
6,074,498
$ 6,259,524
Deductions
$ 5,048,899
78,599
5,127,498
152,000
83,592
235,592
$ 5,363,090
S 105,891
4,775,583
$ 4,881,474
Balance
June 30, 2004
$ 3,819,531
28,405
3,847,936
4,760,326
79,916
4,840,242
$ 8,688,178
S 81,946
8,606,232
S 8,688,178
100
CITY OF CARLSBAD
Combining Statement of Changes in Assets and Liabilities
Agency Funds (Continued)
June 30, 2004
Total Agency Funds
ASSETS
Current assets:
Cash and investments
Accrued interest
Total current assets
Restricted assets:
Cash and investments
Accrued interest
Total restricted assets
Total assets
LIABILITIES
Accounts payable
Deposits held for others
Total liabilities
Balance
July 1,2003
$ 15,267,302
29,766
15,297,068
4,017,696
83,592
4,101,288
$ 19,398,356
S 24,862
19,373,494
$ 19,398,356
Additions
$ 34,142,134
104,921
34,247,055
894,630
79,916
974,546
$ 35,221,601
$ 13,856,664
35,114,112
$ 48,970,776
Deductions
$ 31,914,069
94,552
32,008,621
152,000
83,592
235,592
$ 32,244,213
S 13,484,789
32,508,599
S 45,993,388
Balance
June 30, 2004
$ 17,495,367
40,135
17,535,502
4,760,326
79,916
4,840,242
S 22,375,744
$ 396,737
21,979,007
S 22,375,744
101
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements
$15,495,000 - 1993 Carlsbad Housing and
Redevelopment Commission Tax Allocation Bonds
Fiscal Year
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
$ 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 4,119,021
Interest Due
March 1
S 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
-
$ 3,781,045
Total
Interest
$ 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
$ 7,900,066
Principal Due
September 1
$ 380,000
395,000
420,000
440,000
465,000
490,000
515,000
540,000
570,000
600,000
630,000
665,000
700,000
735,000
775,000
815,000
855,000
900,000
950,000
1,000,000
S 12,840,000
Total Annual
Debt Service
S 1,045,977
1,040,634
1,044,240
1,041,665
1 ,042,909
1,042,840
1,041,459
1,038,765
1,039,627
1,038,915
1,036,628
1,037,634
1,036,802
1,034,134
1,034,496
1,032,759
1,028,707
1,027,200
1,028,175
1,026,500
$ 20,740,066
$6,595,000 - 1997 Hosp Grove Certificates of Participation
(1988 Refunding)
Fiscal Year
2004-05
2005-06
2006-07
2007-08
2008-09
Interest Due
August 1
S 76,058 $
62,418
48,448
33,373
17,273
Interest Due
February 1
62,417 S
48,447
33,372
17,272
-
Total Principal Due Total Annual
Interest August 1 Debt Service
138,475 S
110,865
81,820
50,645
17,273
620,000 S
635,000
670,000
700,000
735,000
758,475
745,865
751,820
750,645
752,273
Totals 237,570 $161,508 S 399,078 $ 3,360,000 S 3,759,078
102
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements (Continued)
$11,080,000 - Encina Financing Joint Powers Authority
Installment Purchase Agreement
Fiscal Year
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
August 1
$ 200,978
188,603
172,791
156,153
139,353
122,816
105,191
86,228
66,241
45,228
23,190
$ 1,306,772
Interest Due
February 1
$ 188,603
172,791
156,153
139,353
122,816
105,191
86,228
66,241
45,228
23,191
-
$ 1,105,795
Total
Interest
$ 389,581
361,394
328,944
295,506
262,169
228,007
191,419
152,469
111,469
68,419
23,190
S 2,412,567
Principal Due
August 1
$ 550,000
575,000
605,000
640,000
675,000
705,000
740,000
780,000
820,000
860,000
905,000
S 7,855,000
Total Annual
Debt Service
$ 939,581
936,394
933,944
935,506
937,169
933,007
931,419
932,469
931,469
928,419
928,190
$ 10,267,567
$2,331,489 - Carlsbad Municipal Water District
State Loan for Reclaimed Water Projects
Interest Due
Fiscal Year November 30
2004-05 $
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
Totals S
$2,618,908 - Golf Course Accrued
Fiscal Year
2004-05 $
2005-06
38,952 3
35,455
31,857
28,155
24,345
20,425
16,391
12,240
7,969
2,680
218,469 3
Assessment
Interest
20,173 3
10,425
Principal Due
November 30
! 120,575
124,072
127,670
131,372
135,182
139,102
143,136
147,287
151,558
123,219
> 1,343,173
Principal
> 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
125,899
. _$ 1.561,642
Total Annual
Debt Service
$ 217,098
70,553
Totals S 30,598 S 257.053 287,651
103
104
STATISTICAL SECTION
105
CITY OF CARLSBAD
Government-wide Expenses by Function
Fiscal
Year
2001-02(1)
2002-03
2003-04
General
Government
$7,599,821
8,517,581
8,604,212
Public
Safety
$25,659,586
27,747,646
30,894,018
Community
Development
$10,539,139
12,351,779
13,814,331
Community
Services
$13,269,566
14,190,510
15,034,661
Public
Works
$15,015,344
16,825,872
19,533,596
Interest on
Long-Term
Debt
$1,673,516
1,048,264
995,895
(1)The City first began issuing Government-wide statements in fiscal year 2001-02.
GOVERNMENT-WIDE EXPENSES BY FUNCTION
2003-04
Sewer ^ u Generalbewer other „
Carlsbad Municipal
Water District
18%
Interest on Long-
Term Debt
1%
Public Works
16%
Government
Community
Services
13%
Public Safety
26%
Community
Development
12%
Source: City of Carlsbad Comprehensive Annual Financial Reports
106
Carlsbad
Municipal
Water Golf Solid
District Course Sewer Waste Total
$19,310,792 $98,565 $6,168,690 $212,605 $99,547,624
19,261,199 93,341 6,103,668 218,014 106,357,874
20,950,012 53,916 6,890,389 1,300,281 118,071,311
107
CITY OF CARLSBAD
Government-wide Revenues
PROGRAM REVENUES
Fiscal
Year
2001-02(1)
2002-03
2003-04
Charges for
Services
$40,142,313
42,464,001
41,845,765
Operating Grants
and
Contributions
$8,562,412
11,406,166
16,073,559
Capital Grants
and
Contributions
$43,007,215
64,719,339
59,591,648
(1*The City first began issuing Government-wide statements in fiscal year 2001-02.
GOVERNMENT-WIDE REVENUES BY FUNCTION
2003-04
Income from
Vehicle License Property and
Fees Investments Charges for
2% 2% Services
21%
Operating
Grants and
Contributions
8%
Capital Grants
and
Contributions
29%
Source: City of Carlsbad Comprehensive Annual Financial Reports
108
GENERAL REVENUES
Taxes
$70,676,423
74,398,635
78,668,757
Vehicle
License
Fees
$4,675,269
5,066,902
4,124,672
Income from
Property and
Investments
$25,105,269
19,182,978
4,316,430
Miscellaneous
$1,564,886
598,688
650,724
Total
$193,733,797
217,836,709
205,271,555
109
CITY OF CARLSBAD
General Governmental Expenditures by Function*l)
Last Ten Fiscal Years
Fiscal
Year(2>
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
Total
$ 60,280,103
59,802,924
65,943,032
80,045,280
112,156,205
105,655,384
92,884,485
112,513,403
108,662,936
115,234,046
General
Government
$ 5,871,248
5,850,829
6,961,469
6,909,151
6,784,525
7,382,909
9,022,218
8,414,743
8,805,313
9,745,019
Public
Safety
$ 15,915,678
16,850,087
17,410,033
18,631,042
21,927,751
21,799,386
23,627,184
25,598,466
26,797,864
30,798,786
Community
Development
$ 6,465,977
7,363,194
7,431,539
7,894,536
8,636,634
11,538,444
9,351,917
10,315,783
12,146,247
13,644,301
(1)Includes General, Special Revenue, Debt Service, and Capital Projects Funds.
(2) Beginning in fiscal year 1997-98, Park Maintenance expenditures are included in Public Works instead of Community Services.
GENERAL GOVERNMENTAL EXPENDITURES
BY FUNCTION
2003-04
Capital Projects
23%
Public Works
16%
Debt Service
2%
Community
Services
12%
General
Government
8%
Public Safety
27%
Community
Development
12%
Source: City of Carlsbad Comprehensive Annual Financial Reports
110
Community
Services
$ 7,459,685
7,590,363
8,390,009
6,672,810
7,541,378
9,088,264
11,571,249
12,448,725
13,026,341
13,914,997
Public
Works
$8,111,572
8,956,757
8,816,767
11,437,101
12,689,683
13,822,429
14,402,096
15,404,566
18,176,697
18,044,784
Capital
Outlay
$12,159,653
9,654,082
13,556,164
23,693,412
52,106,587
39,543,074
22,066,731
37,503,175
26,410,483
26,405,614
Debt
Service
$ 4,296,290
3,537,612
3,377,051
4,807,228
2,469,647
2,480,878
2,843,090
2,827,945
3,299,991
2,680,545
SPENDING ON CAPITAL PROJECTS
LAST TEN YEARS
TOTAL EXPENDITURES
LAST TEN YEARS
$o $0
Fiscal Year Fiscal Year
111
CITY OF CARLSBAD
General Governmental Revenues by Source*'*
Last Ten Fiscal Years
Fiscal
Year
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
Total(2)
$69,768,517
74,611,395
98,645,130
122,653,159
145,393,991
115,252,270
136,244,948
131,323,111
141,617,437
147,362,099
Property
Taxes
$13,537,893
13,576,407
14,516,474
15,226,827
17,121,586
19,916,613
23,143,014
28,495,155
31,410,575
33,948,756
Sales
Taxes
$11,399,568
11,542,970
12,495,143
14,817,057
17,129,474
19,493,247
21,196,726
21,660,902
25,542,844
25,571,192
Transient
Occupancy
Taxes
$3,252,270
3,406,917
3,675,472
6,046,092
7,010,249
8,333,196
9,269,484
8,533,329
8,387,388
8,813,426
Business
Licenses
$1,245,830
1,491,159
1,510,462
1,603,744
1,737,850
1,863,514
2,300,367
2,440,387
2,305,178
2,871,715
Other
Taxes
$8,434,825
8,621,717
10,824,890
15,290,601
14,508,643
12,661,882
14,237,832
10,398,486
6,510,259
8,327,952
(1)
(2)
Includes General, Special Revenue, Debt Service, and Capital Projects Funds.
Includes interdepartmental services, donations, and miscellaneous revenues.
GENERAL GOVERNMENTAL REVENUE
LAST TEN YEARS
PROPERTY TAX
AND SALES TAX REVENUE
LAST TEN YEARS
vi NO r- oo ONON ON ON ON ONON ON ON ON ON
O —e oo -ts M »s fs
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Reports
Fiscal Year
D Property Tax • Sales Tax
112
Licenses
Inter- and Charges for
Governmental Permits Services
$7,590,323 $3,766,340 $9,819,230
6,426,262 4,178,844 6,805,386
11,764,760 5,609,730 10,707,653
17,091,140 6,484,025 7,614,902
17,801,614 3,826,686 6,805,147
14,094,118 3,320,851 5,749,416
14,285,677 3,409,156 6,427,307
14,266,527 1,998,210 7,751,065
19,775,324 2,042,529 10,058,671
22,505,969 2,328,524 9,899,183
TRANSIENT OCCUPANCY TAX
LAST TEN YEARS
10 -f
<tm f^HLffULc o •0 ~|
1 "" 1i '-l-lTi
f\ m 4 EiJii": Bira BJpg ^jHfej mm ^ _ 1 _ i « 1 «
C-sCSOVOVONOOOO
Income from
Fines and Property and
Forfeitures Investments
$263,411 $4,415
335,395 4,862
317,892 6,075
331,318 8,632
935,955 8,925
839,831 10,495
888,608 20,384
947,183 18,700
923,068 14,801
1,092,380 3,901
975
050
188
,261
,565
,817
,618
,470
,549
,415
Contributions
from Property
Owners
$2,148,548 $
9,359,802
15,450,861
25,861,948
45,763,304
14,733,063
15,982,528
11,250,770
14,546,966
23,682,348
Other(2)
3,894,304
4,004,486
5,696,605
3,653,244
3,827,918
3,750,722
4,719,631
4,880,627
5,313,086
4,419,239
CHARGES FOR SERVICES
LAST TEN YEARS
12 -
r*H- <» 10 •eo
3 8 -
§
c 6 •
tt1.
J5 4 •
O
« 2-
J|J 0 •
o
>4
^
a
OSOS
~fl~
- ||-ujyj
OS OSOS OS
^^m i&
iMl
OS OS O O OOS OS O 0 0
\
-
.
• "P ^
f) ^o o0 O
Fiscal Year Fiscal Year
113
CITY OF CARLSBAD
Computation of Legal Debt Margin
June 30, 2004
Net assessed valuation $ 14.303.050.347
Debt limit (15% of 25% of net assessed valuation as adjusted) 536.364,388
Amount of debt applicable to debt limit:
Bonded debt 12,840,000
Certificates of participation 3,360,000
Obligations under capital leases 78.507
Total amount of debt applicable to debt limit 16.278.507
Legal debt margin $ 520,085,881
Percent of debt limit 3,0%
Source: County of San Diego Office of the Auditor and Controller
114
CITY OF CARLSBAD
Schedule of Direct and Overlapping Bonded Debt
June 30, 2004
2003-04 Assessed Valuation: $14,654,767,555
Redevelopment Incremental Valuation: 351,717,208
Adjusted Assessed Valuation: $14,303,050,347
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/30/04
Metropolitan Water District 1.175 $ 5,257,831
Carlsbad Unified School District 98.066 22,799,138
Carlsbad Unified School District Lease Tax Obligations 98.066 465,814
Carlsbad Unified School District Community Facilities District No. 1 100.000 9,700,000
Oceanside Unified School District 0.008 5,900
Vista Unified School District 0.069 66,488
Encinitas Union School District 28.808 7,587,030
San Marcos Unified School District School Facilities Improvement District 36.912 7,494,250
San Marcos Unified School District Community Facilities District No. 5 100.000 26,975,000
San Dieguito Union High School District Community Facilities District No. 94-1 100.000 289,506
San Dieguito Union High School District Community Facilities District No. 94-2 98.327 20,818,677
San Dieguito Union High School District Community Facilities District No. 95-2 36.882 321,922
San Dieguito Union High School District combined Community Facilities District 28.740 13,921,656
Olivenhain Municipal Water District, Assessment District No. 96-1 22.168 4,490,128
City of Carlsbad 1915 Act Bonds 100.000 44,985,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $165,178,340
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
San Diego County General Fund Obligations 6.231% $ 26,900,161
San Diego County Pension Obligations 6.231 79,063,783
San Diego County Superintendent of Schools General Fund Obligations 6.231 129,449
Mira Costa Community College District Certificates of Participation 26.874 1,408,198
Carlsbad Unified School District General Fund Obligations 98.066 56,657,631
San Marcos Unified School District General Fund Obligations 31.739 2,051,926
Encinitas Union School District Certificates of Participation 28.808 534,388
Other School District Certificates of Participation Various 261,324
City of Carlsbad General Fund Obligations 100.000 3,360,000
TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 170,366,860
COMBINED TOTAL DEBT $335,545,200'"
'''Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease
obligations.
Ratios to 2003-04 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.15%
Ratios to Adjusted Assessed Valuation:
Combined Direct Debt ($3,360,000) 0.02%
Combined Total Debt 2.35%
SHARE OF AUTHORIZED AND UNSOLD GENERAL OBLIGATION BONDS:
Oceanside Unified School District $4,040
Vista Unified School District $19,072
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/04: $0
Source: California Municipal Statistics, Inc.
115
Fiscal
Year
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
CITY OF CARLSBAD
Construction and Business Activity
Last Ten Fiscal Years
Building
Permit
Revenue
644,131
917,788
1,262,
2,094,
177
523
2,524,063
2,156,
2,102,
1,085,
986,
1,282,
$600 -|
$500 •
$400 •
$300 -
$200 -
$100 •
$0 -
584
074
819
890
126
E
S
Percent
Chan
76
42
37
65
20
ge
2
4
6
9
5
(14.6)
(2 5)
(48.3)
(9
29
1)
9
Estimated
Valuation
$145,344,099
162,
305,
479,
588,
468,
513,
272,
265,
323,
STIMATED VALUATION
116,427
247,426
909,805
527,417
596,775
763,904
671,912
175,025
157,350
Business
License
Revenue
$1
1
1
1
1
1
2
245,830
491,159
510,462
603,744
737,850
863,514
300,367
2,440,387
2,305,178
2
OF BUILDING
PERMITS ISSUED - LAST TEN YEARS
/
s
X
"1-f
xi manA
o\ t
1
> r~
x
-
iL
90 O-OS ^
^m
-
mT"1 — •;ooo oors
871,715
jg&g^gL
OO
]
b Oo oM M
1
Fiscal Year
Percent
Change
13.9
19.7
1.3
6.2
8.4
7.2
23.4
6.1
(5.5)
24.6
Source: City of Carlsbad Comprehensive Annual Financial Reports
116
CITY OF CARLSBAD
Water Enterprise
Revenue Bond Coverage
Last Ten Fiscal Years
Fiscal
Year
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
Gross
Revenue0'
$ 15,912,020
17,147,790
18,911,511
18,356,555
19,942,226
22,178,880
23,187,752
24,925,994
23,791,166
22,640,030
Total
Expenses'2'
$ 12,690,114
13,998,346
14,692,531
14,583,879
16,732,975
18,609,221
18,027,298
19,310,792
19,261,199
20,950,012
Net Revenue
Available for
Debt Service
$ 3,221,906
3,149,444
4,218,980
3,772,672
3,209,251
3,569,659
5,160,454
5,615,202
4,529,967
1,690,018
Principal
$ 825,000
880,000
1,040,000
955,000
995,000
1,040,000
1,075,000
1,120,000
1,175,000
0
Debt Service
Interest
$ 700,098
644,822
494,954
264,695
227,450
187,650
145,010
99,860
51,700
0
Requirements
Total
$ 1,525,098
1,524,822
1,534,954
1,219,695
1,222,450
1,227,650
1,220,010
1,219,860
1,226,700
0
Coverage
2.11
2.07
2.75
3.09
2.63
2.91
4.23
4.60
3.69
N/A
oQ
(1)
(2)
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
D GROSS REVENUE • TOTAL EXPENSES
WATER ENTERPRISE REVENUE
AVAILABLE FOR DEBT SERVICE
LAST TEN YEARS
$6 -i
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Reports
117
CITY OF CARLSBAD
Schedule of Assessed Valuation
Last Ten Fiscal Years
Less Property
Fiscal Year Secured Property Unsecured Property Exemptions
1994-95 $ 5,673,354,814 $ 288,206,831 $ 40,417,338
1995-96 5,676,061,219 310,402,764 46,279,594
1996-97 5,811,751,594 348,706,124 55,138,448
1997-98 6,232,883,670 352,854,173 57,681,797
1998-99 7,154,426,710 424,962,226 78,827,023
1999-00 8,675,347,964 419,824,253 85,462,447
2000-01 10,289,895,123 422,862,440 95,111,634
2001-02 11,586,003,633 519,294,090 115,461,551
2002-03 12,801,430,765 487,682,538 131,448,341
2003-04 14,054,283,700 559,694,669 153,968,422
Does not include redevelopment incremental valuation or State-assessed unitary values.
Source: County of San Diego Office of the Auditor and Controller
118
Total
Assessed Valuation"'
$ 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
13,157,664,962
14,460,009,947
Homeowner's
Exemptions
$ 96,173,142
98,488,810
100,249,766
103,825,400
108,623,200
119,026,600
127,530,200
139,157,200
147,953,400
156,595,600
Net Assessed
Valuation
$ 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
13,009,711,562
14,303,050,347
Percentage
Change
(2.9)
0.3
2.8
7.0
15.1
20.3
18.0
13.0
9.8
9.9
NET TAXABLE VALUE
LAST TEN YEARS
03
Q
$16 -
$14 -
Fiscal Year
119
Year
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2010 (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* °
66,479
68,010
70,532
73,688
77,550
82,030
83,469
88,013
90,271
92,995
103,121(2)
108,5 14<2)
CITY OF CARLSBAD
Demographic Statistics
Last Ten Fiscal Years
Population
Percent
Change
(0.2)
2.3
3.7
4.5
5.2
5.8
1.8
5.4
2.6
3.0
10.9
5.2
County
Population0'
2,658,584
2,682,093
2,724,437
2,794,785
2,853,258
2,911,468
2,883,595
2,918,300
2,961,579
3,017,204
3,388,400(3)
3,863,500<3)
City
Population
Percent
of County
2.5
2.5
2.6
2.6
2.7
2.8
2.9
3.0
3.0
3.1
3.0
2.8
(1) Source: State Department of Finance.
(2) Source: Based on City of Carlsbad projected residential construction estimates in 2004-05 Capital Improvement Program.
(3) Source: State Department of Finance Population Projections (May 2003).
POPULATION
LAST TEN YEARS
100,000 -'
90,000 - '
80,000 - '
70,000 - '
60,000 - '
50,000 - '
40,000 - '
30,000 - '
20,000 •
10,000 • '
£o\
E^SJ
/MB
§ON
E^a
im.
r-
ON
ON
apa
fsm
00&>a^
f=i
-"-:
8ON
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oo
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§
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ism
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Fiscal Year
120
CITY OF CARLSBAD
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal
Year
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
$35 Y
$30 •'
.1 $25 - '
§ $20 - '
a
v $15-'
-2 fl•3 $10-'Q
$5 -'
$0 -I«LJir9a
Total Total Current
Current Levy Collections
$11,977,833 $10,843,322
11,891,199 11,164,134
12,227,583 11,551,981
13,277,486 12,636,654
15,115,611 14,421,616
17,923,250 17,110,252
20,959,581 20,085,365
23,554,392 22,705,762
26,220,028 25,200,220
32,215,674 30,859,058
PROPERTY TAX LEVIES & COLLECTIONS
LAST TEN FISCAL YEARS
r~m •r*ILy^/fcfitaTB [ [LI 1 1 il 1[[[[[[[^^fe§ BBBPjjii! ^^^^Ks IBKis BHUr? BBH^^ IBBBiij?i — ^^^ | -P.^ | ,,. | _^^^j , «^_p_
o r* oo ON o -HON ON ON ON o oON ON ON ON O O
Fiscal Year
a LEVIES B COLLECTIONS
1Itft
0 0O 0
% of Levy
Collected
90.5
93.9
94.5
95.2
95.4
95.5
95.8
96.4
96.1
95.8
I
t
11
HI
Source: County of San Diego Office of the Auditor and Controller
121
CITY OF CARLSBAD
Principal Employers
2003-04
FIRM
Manufacturing
Callaway Golf
Invitrogen
Taylor Made Golf- Adidas Golf Company
Acushnet Golf
Tyco-Healthcare
Seasilver USA
ViaSat
Ashworth
PRODUCT/SERVICE
Golf Equipment
Research Supplies
Golf Equipment
Golf Equipment
Respiratory Products
Nutritional Supplements
Data Communications
Golf Apparel
EMPLOYEES
1,785
900
645
535
500
500
450
400
Non-Manufacturing
Carlsbad Unified School District
Four Seasons Resort - Aviara
City of Carlsbad
La Costa Resort & Spa
Gemological Institute of America
ISIS Pharmaceuticals
24-Hour Fitness
SOMC Group, Inc.
LEGOLAND, California
San Diego Gas & Electric
Hoehn Motors
Upper Deck
Education
Resort
Municipal Government
Hotel/Health Spa
Gemological School
Research and Development
Health Club Headquarters
Software Distributor
Family Theme Park
Utilities
Car Dealership
Trading Cards
950
900
646
604
600
506
450
410
372
325
300
300
Source: City of Carlsbad, Chamber of Commerce
122
Taxpayer
CITY OF CARLSBAD
Principal Taxpayers
2003-04
Callaway Golf Company
Aviara Resort Associates
La Costa Hotel & Spa Corporation
Continuing Life
Legoland California, Inc.
Bressi Gardenlane LLC
Prentiss Properties
Borders, Inc.
H. G. Fenton Company
Real Estate Collateral Mgmt. Co.
Gemological Institute
Universe Institutional
Percentage of Net
Assessed
Type of Business
Manufacturer
Resort & Golf Course
Hotel & Health Spa
Senior Retirement Community
Family Theme Park
Real Estate
Real Estate
Retail Sales
Distribution Warehouse
Real Estate
Gemological School
Residential Apartment Rentals
Valuation
$159,353,837
138,722,821
132,292,486
125,451,962
105,000,000
76,495,927
71,845,631
68,001,543
63,028,919
62,465,278
55,520,616
52,549,615
$1,110,728,635
Valuation* '
1.1%
1.0%
0.9%
0.9%
0.7%
0.5%
0.5%
0.5%
0.4%
0.4%
0.4%
0.4%
7.8%
(i)Net assessed valuation for 2003/04:$14,303,050,347
Source: County of San Diego Office of the Auditor and Controller
123
CITY OF CARLSBAD
Top 30 Sales Tax Generators
2003-04
Firm Product/Service
Aviara Resort Associates
Bob Baker Jeep
Bob Baker Volkswagen
Carlsbad Toyota
Carlsbad Volvo
Costco Wholesale
Dixon Ford
Hoehn Acura
Hoehn Honda
Invitrogen Corporation
J C Penney Company
La Costa Resort & Spa
Legoland
Lexus Carlsbad
Macy's Department Store
North County CMC
North County Hyundai
Pacific Sales Kitchen & Bath
Polo Ralph Lauren Outlet
Reliable Wholesale Lumber
Robinsons-May Department Store
Rorick Buick/Cadillac
Sears Roebuck & Company
The Gap
Townsend Lincoln/Mercury
Toyota Motor Credit
Verizon Wireless
Vons Grocery Company
Weseloh Chevrolet
Worthington Dodge
* Companies are listed in alphabetical order.
Hotel/Food Sales
Car Dealership
Car Dealership
Car Dealership
Car Dealership
General Stores
Car Dealership
Car Dealership
Car Dealership
Manufacturer of Research Supplies
Department Store
Hotel/Food Sales/Spa
Family Theme Park
Car Dealership
Department Store
Car Dealership
Car Dealership
Furniture/Appliance
Clothing Store
Building Materials
Department Store
Car Dealership
Department Store
Clothing Store
Car Dealership
Automobile Lessor
Wireless Telecommunication
Grocery/Food Markets
Car Dealership
Car Dealership
Source: MBIA MuniServices Company
124
CITY OF CARLSBAD
Miscellaneous Statistical Information
2003-04
Date of Incorporation July 16, 1952
Type of City General Law
Form of Government Council/Manager
Area 42.19 sq. miles
Population (CA Dept. of Finance Report 01 /04/04) 92,995
Net Assessed Valuation $14,303,050,347
Streets:
Number of Street Lights 6,432
Miles of Streets 293
Fire Protection:
Number of Stations 6
Number of Firefighters & Officers 73
Police Protection:
Number of Stations 1
Number of Sworn Police Officers 107
Municipal Water District:
Number of Customers 79,050
Number of Water Connections 24,560
Average Daily Consumption (in Millions of Gallons) 18.4
Miles of Lines and Mains 431
Miles of Sewers 232
Recreation and Culture:
Number of Parks 39
Acres of Parks (Improved Community & Special Use Areas) 295
Acres of Open Space (Special Resource Areas & General
City-Owned Open Space) 490
Number of Pools 1
Number of Libraries 2
Number of Materials in Circulation 353,339
Total Number of Authorized Full-Time City Employees 646
Source: City of Carlsbad, Finance Department
125
126