HomeMy WebLinkAbout; ; 2005-2006 CAFR; 2006-06-30COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FISCAL YEAR ENDED
JUNE 30, 2006
1635 Faraday Avenue, Carlsbad, CA 92008
Website: www. carlsbadca. gov
Prepared by the Finance Department
INTRODUCTORY SECTION
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2006
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION:
Table of Contents i
City Council's Five- Year Vision Statements 1
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting, Government Finance Officers
Association 13
Location Map 14
List of City Officials 15
Organization Chart 16
FINANCIAL SECTION:
Independent Auditor's Report 17
Management's Discussion and Analysis 19
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Assets 34
Statement of Activities 36
Fund Financial Statements:
Balance Sheet - Governmental Funds 38
Reconciliation of the Balance Sheet of Governmental Funds to the Statement
of Net Assets 40
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds 42
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 44
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual - General Fund 46
Statement of Net Assets - Proprietary Funds 48
Statement of Revenues, Expenses and Changes in Net Assets - Proprietary Funds 52
Statement of Cash Flows - Proprietary Funds 54
Statement of Fiduciary Assets and Liabilities - Agency Funds 58
Notes to the Financial Statements 59
Supplementary Information
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds 90
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds 94
Combining Schedule of Revenues and Expenditures - Budget and Actual
(Budgetary Basis) - Special Revenue Funds 98
Combining Schedule of Revenue and Expenditures - Budget and Actual
(Budgetary Basis) - Debt Service Funds 100
Combining Statement of Net Assets - Internal Service Funds 102
Combining Statement of Revenues, Expenses and Changes in Net Assets -
Internal Service Funds 104
Combining Statement of Cash Flows - Internal Service Funds 106
Combining Statement of Changes in Assets and Liabilities - Agency Funds 110
Schedule of Annual Debt Service Requirements 112
STATISTICAL SECTION:
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2006
TABLE OF CONTENTS (CONTINUED)
Page
Financial Trends:
Net Assets by Component - Last Five Fiscal Years 116
Changes in Net Assets - Last Five Fiscal Years 117
Fund Balances of Governmental Funds - Last Ten Fiscal Years 120
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 122
General Governmental Tax Revenues by Source - Last Ten Fiscal Years 124
Revenue Capacity:
Water and Sewer Rates - Last Ten Fiscal Years 125
Assessed Value of Taxable Property 126
Principal Property Taxpayers 127
Property Tax Levies and Collections 128
Debt Capacity:
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 130
Schedule of Direct and Overlapping Bonded Debt - Current Fiscal Year 133
Direct and Overlapping Debt - Last Nine Fiscal Years 134
Legal Debt Margin Information - Last Ten Fiscal Years 136
Pledged-Re venue Coverage - Last Nine Fiscal Years 138
Demographic and Economic Information:
Demographic and Economic Statistics 140
Principal Employers - Current Year and Nine Years Ago 142
Operating Information:
Authorized Full and 3/4 Time City Government Employees by Major Service Area 144
Operating Indicators by Function/Program - Last Two Fiscal Years 146
Capital Asset Statistics - Last Two Fiscal Years 147
COUNCIL VISION STATEMENTS
Carlsbad City Council
2006
Five-Year Vision Statements
City Council continues to clarify and pursue the vision of
Carlsbad that reflects the pride and quality of life for all who live,
work, and play here.
Carlsbad...
* Provides a 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.
» Occupies a leadership role in local and regional planning, (e.g., water, beach,
circulation, and environmental issues) important to local governments actively
involved in addressing governmental issues at the local, state and national
levels.
* Provides an open government 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
October 5, 2006
Honorable Mayor, City Council,
and Citizens of the City of Carlsbad
CITY OF CARLSBAD
Carlsbad, CA 92008
LETTER OF TRANSMIT!AL
2005-06 COMPREHENSIVE ANNUAL FINANCIAL REPORT
Honorable Mayor, City Council, and Citizens:
I am pleased to present the 2005-06 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, 2006.
Management assumes full responsibility for the completeness and reliability of the information contained in
this report, based upon a comprehensive framework of internal controls 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 has issued an
unqualified ("clean") opinion on the City of Carlsbad's financial statements for the year ended June 30,
2006. 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 transmittal 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 statements, 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 Compliance Reports and Other Financial Information. The results of the
City's Single Audit for the fiscal year ended June 30, 2006 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 lc'52 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
1635 Faraday Avenue • Carlsbad, CA 92008-7314 • (760) 6O2-2430 • FAX (760) 602-8553
www.ci.carlsbad.ca.us • Business License (76O) 602-2495 • Utility Billing (76O) 602-2420 •
Purchasing (760) 602-2460 - FAX (760) 602-8556 - Bid Line (760) 602-2464
Council is elected at large on a staggered basis for a term of four years. The City Clerk and City Treasurer
are also elected to four-year terms. The City Council appoints the City
Manager and City Attorney.
The City covers approximately 42 square miles and has a population of
98,607, with an expected build-out population of 110,000 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; over 33 hotels offering over 3,400 rooms for tourist lodging; high-
technology, multimedia, communication, and biomedical businesses;
electronics, golf apparel, and equipment manufacturers; several business and
light-industry parks; and numerous land developers.
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, the Carlsbad Public Financing Authority,
and the Carlsbad Municipal Water District. Through these entities, Carlsbad provides a full range of
services to its citizens and customers including:
Carlsbad
Police protection services
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, in
part, 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 assume
responsibility 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
City of Carlsbad Strategic Goals
Balanced Community Development - A city that connects community, place,
and spirit through balanced and economically sustainable land uses.
Citizen Connection — A city that embraces Community connectivity through the
effective use of technological and interpersonal mediums.
Communication — Ensure that community members, Council and staff are well
informed, continuing to be a more responsive government while providing a high
level of citizen confidence in its government.
Environmental Management — An environmentally sensitive community by
focusing on: conservation, 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 support
sustainable economic health and manage fiscal resources effectively.
Learning, Culture & Arts — Promote and support continuous learning, cultural
opportunities and the arts within the community and the City organization.
Parks/Open Space/Trails - Acquire, develop, and maintain a broad range of
open space and recreational facilities that actively address citizen needs, which are
fiscally responsible, and are consistent with the General Plan and Growth
Management Standards.
Top-Quality Services - A city that provides exceptional services on a daily
basis.
Transportation/Circulation - Provide and support a safe and efficient
transportation system that moves goods, services, and people through Carlsbad.
Water — Ensure, in the most cost-effective manner, water quality and reliability to
the maximum extent practical, to deliver high-quality potable and reclaimed water
incorporating drought-resistant community principles.
for the City. The City Council also provides the City with its top 15 priority projects, which further defines
the Council's vision. The goals and priority projects outline the methods used to achieve the vision and call
out areas upon which the City Council would like to place special emphasis during the year. Once these are
developed, staff develops operational goals based on the City Council's direction. These operational goals
are the basis for the development of the annual budget.
Budgetary control for the City is maintained through its accounting systems. The City Council adopts the
formal budget at the beginning of each fiscal 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 IndicatorsDiversification 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 University of San Diego (USD) tracks the
San Diego economy through its Index of Leading Economic
Indicators. The USD index tracks six items to evaluate
growth trends in the San Diego economy: unemployment
filings, want ads, local stock prices, consumer confidence,
building permits and the strength of the national economy.
The index declined in September 2006 by 0.6%, which
makes the sixth consecutive monthly decline in the index.
The decline was primarily led by a decline in building
permits, unemployment insurance and help wanted
advertising. Local stock prices, consumer confidence, and the outlook for the national economy were
slightly positive. USD has indicated, "Job growth is expected to cool considerably in the year ahead." In
addition, according to Alan Gin, USD Economist, the housing market and retail sales are also expected to
be slow, while consumer confidence and local stock prices are slightly positive for September 2006. In
addition, Mr. Gin primarily attributed the consumer confidence increase to falling gas prices.
Carlsbad's economy is tied closely to that of the San Diego region, although development patterns may
differ. Carlsbad experienced strong growth in Fiscal Year (FY) 2005-06 in revenues from property and
transient occupancy taxes (TOT). Property taxes grew by over 34% in FY 2005-06, reflecting the
continuing escalation in housing prices as well as the State of California exchanging vehicle license fee and
sales tax revenues for property tax revenue. TOT, the City's gauge of the tourism industry, ended the year
showing a 14% gain, with a large part of that coming from the reopening of a major portion of one of
Carlsbad's premiere resorts. Sales taxes added an additional $750,000 for FY 2005-06 due to good
consumer demand after taking into
consideration the closing of the Robinsons-
May department store at Plaza Camino Real, as
well as the State of California taking a portion
of the City's sales tax in exchange for property
tax revenue.
With supply relatively low, housing prices have
continued to escalate. The median price for
single-family homes in Carlsbad was $748,000
for calendar year 2005, a 5.7% increase from
the previous year. Total assessed values in the
Median SFD Home Prices
City for FY 2006-07 stand at over $20 billion; a 69% increase over what they were just five years ago. The
City has projected it will add about 2,580 more residential units and an additional 4.1 million square feet of
commercial/industrial development over the next five years. The City's residential housing stock is about
89% built out, with approximately 5,270 housing units remaining to develop.
Carlsbad's residential real estate market has continued strong throughout FY 2005-06. The City expects to
issue 1,000 residential permits this year, a decrease from the 1,663 issued in the previous year. The number
of permits is expected to decline due to the nearing of build-out and a slowing economy. There are a
number of new residential communities under construction or in the final phases of development that will
add significantly to the residential housing stock in Carlsbad. Home sales are well under way in the
Calavera Hills project in northeast Carlsbad, with 331 single-family homes and 358 multi-family units
planned. The Villages of La Costa projects known as the Oaks, the Greens and the Ridge are under
construction, and will add approximately 970 single-family and 450 multi-family units. The Bressi Ranch
area is also under construction with 523 single-family and 100 multi-family units to be developed. And
finally, the Robertson Ranch area, which is expected to contain over 1,000 residential units, is finishing up
its master plan. The completion of these planned communities will signal an end to the large-scale
residential developments in Carlsbad.
General Fund Revenues
100'
90 K
80 /
/
\ eo r
40 K
30
20
!•••Tiiimim
97 98 00 01 02 03 04 05 06e 07e
• Sales tax • Property Tax D TOT D VLF • SDGE franchise B Other Franchise
Commercial and industrial developments
have been averaging 800,000 square feet
per year. This is expected to remain
about the same over the next five years to
average 820,000 square feet per year,
with the large industrial developments of
the Forum, Carlsbad Raceway, and Oaks
North. Some of the major companies in
town include the Gemological Institute of
America, ViaSat, Invitrogen, Callaway,
TaylorMade, Upper Deck, and many
others.
Commercial development has brought
much needed entertainment and shopping
venues to citizens and visitors alike, and
has generated additional sales taxes to
help pay for City services. Carlsbad is
home to Car Country Carlsbad - an auto mall; the Carlsbad Premium Outlets - a specialty outlet center;
Plaza Camino Real - a regional shopping mall; a Costco center; and the most recent addition, the Forum at
Carlsbad - a commercial center with retail shops, restaurants and other commercial uses.
Development has also enhanced Carlsbad's reputation as a destination resort for tourism. The City is host
to a major family theme park: Legoland, and has two luxury resorts available for its visitors: the Four
Seasons Resort at Aviara and the La Costa Resort & Spa. There are also a number of other quality hotels
and motels in the City with the most recent addition being the West Inn, which opened in May 2006
bringing the total available hotel rooms in the City to about 3,400.
For the future, there are several new tourist-serving projects in development. The La Costa Resort received
approval to develop up to 197 commercial resort villas on their site. These are expected to be phased in
over the next several years adding over $1.4 million in TOT when completed. Two hotels near the airport
have been approved, which would add an additional 249 hotel rooms, bringing in an estimated $500,000 per
year in TOT. In addition, a new project next to Legoland has been approved for 350 hotel rooms and 350
timeshare units. This project will also be phased in over time and is expected to generate an additional $ 1.4
to $1.7 million per year in TOT.
The City's base sales taxes are projected to grow by 4.0%, while year-over-year sales tax growth is
projected to grow by about 9.2% for FY 2006-07, due to one-time adjustments during FY 2005-06. While
the growth in housing prices is expected to moderate as interest rates rise, there is a lag with the property
tax revenue and therefore, according to the County Assessor, the City should expect assessed values to
increase by over 15% in FY 2006-07. New building permits are predicted to slow slightly as new housing
developments come on line and absorption rates of new homes slows. And finally, tourism is expected to
continue to be strong, with TOT receipts projected to grow by 6% in the future, with the addition of more
available rooms.
For Fiscal Year 2006-07, the City's revenue projections reflect a slowing of the economy due to rising
interest rates, an anticipated softening in the housing market, as well as higher oil and gas prices.
Conservative increases are expected in most of the tax revenues with overall General Fund revenues
increasing by 8.8%. 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
In addition to the risk of a softening of the housing market or a slow down in the economy,
the State of California's fiscal problems also cast a shadow on the City's economic future.
The State of California has been in a severe fiscal crisis for a number of years. Through a
variety of loans, one-time revenues, interfund borrowings and raids on city, county and
special district funds, the State has been able to manage its cash flows and stay solvent.
However, more drastic measures will be needed for the State to finally get its budget in balance.
According to the Legislative Analyst's Office (LAO), the State is facing significant deficits in future years
despite the stronger revenues seen in the past few months. The LAO's report indicates that the State's
2006-07 budget is using a significant portion of the fund balance to cover the State's current operating
shortfall, and a $4.5 to $5 billion shortfall is expected to exist in Fiscal Years 2007-08 and 2008-09. The
ongoing budget shortfalls result from expenditures growing faster than revenues. The State has balanced its
budget by taking city money in the past, and there is a risk that they may continue this practice in the future.
In Fiscal Year 2003-04, the State took approximately $1.5 million in Vehicle License Fees from the City's
General Fund with the promise to pay it back in the future. Then, in November 2003, a ballot measure was
passed authorizing what is known as the "Triple Flip." This is a complicated method of securing payment
for the Deficit Reduction Bonds, issued by the State to balance their budget. It is essentially a temporary
swap of a !4 cent of the cities' sales tax in return for property tax. It should have no effect on the amount of
tax revenues the cities receive, but it will result in the loss of some interest earnings due to the delay in the
timing of the receipt of the taxes.
As a result of the continued attacks on cities revenues, a coalition of cities, counties and special districts got
a measure placed on the November 2004 ballot to put some protections in place for local governments. The
measure included the following provisions:
• Permanently reduces the vehicle license fee (VLF) rate to its current .65% and provides property taxes
to cities and counties to offset the loss on a dollar for dollar basis.
• Guarantees repayment in Fiscal Year 2007 of the VLF amounts taken by the State. (The payment was
repaid by the State during Fiscal Year 2006.)
• Guarantees that the "Triple Flip" will be reversed when the bonds are repaid.
• Prevents the Legislature from reducing the combined property tax shares of cities, special districts, and
the county, except to borrow the funds on a temporary basis to address a "severe state fiscal hardship."
• Provides for mandate relief if the State does not pay the mandated costs.
All of this in return for a contribution to the State totaling $1.3 billion in both the 2005 and 2006 Fiscal
Years from cities, counties and special districts.
The measure passed and as a result, the City of Carlsbad gave the State $1.8 million from the General Fund
and $220,000 from its Redevelopment Agency in Fiscal Years 2004-05 and 2005-06. However, in
exchange for this two year "contribution" to the State, the cities have gained protection from further raids
on their major tax revenues by the State.
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 15+ 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. During Fiscal Year 2007, the City
Council approved allocating $7.2 million or 6.5% of the General Fund revenues to the Infrastructure
Replacement Fund. During Fiscal Year 2006, $4.2 million or 4.0% of the General Fund revenues were
allocated to the Infrastructure Replacement Fund. The increase in the allocation is due to the City's current
financial strength as well as the desire to plan for the future to create and maintain a sustainable community.
In addition to these steps, the City prepares a ten-year financial forecast for the General Fund each year, in
order to understand the effects of actions taken today on the City's future. The City has experienced strong
revenue growth over the past ten years due to the development of the majority of its commercial sites. The
future will bring a few more commercial sites but at a slower pace, while residential development is
expected to slow over the next few years. There are also quite a few City facilities - mainly parks and civic
facilities - planned in 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, including retirement and health care costs, have created upward pressure on
expenditures, especially over the past several 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.
This forecast assumes that revenue growth will
continue at a moderate pace in 2007 and into the
future. To project the expenditures, it includes
all known personnel costs including any benefits
negotiated with the employee groups.
The forecast assumes 15% increases in health
care costs in the near future, slowing to 5% in
the future. It also assumes personnel growth
(new positions) to remain rather flat at no more
than 2% per year. Cost of living increases
between 3 and 5% have been added to personnel
costs. Pension plan costs are anticipated to
General Fund
I REVENUES TOTAL BUDGET
remain essentially at current levels. It assumes that the contribution from the General Fund to the
Infrastructure Replacement Fund is increased to 6.5% of General Fund revenues. This is an increase from
last year's forecast assumption of 4% of the General Fund revenues. And finally, it includes estimated
operating costs for all capital projects in the timeframes shown in the Capital Improvement Program (CIP).
One of the biggest assumptions in the forecast is that services as reflected in the Fiscal Year 2007 Adopted
Budget will remain the same. No new services have been anticipated although growth in current services to
match the growing population has been incorporated.
The results show that the General Fund is balanced into the future with a slight surplus in each year of less
than 5%. This achieves the goal set out by Council to maintain a balanced budget.
The situation was different just a couple of years ago when the forecast projected that the City was headed
for deficits unless corrective measures were taken. For the past few years, Council and staff have worked to
bring the forecast back into balance. Through a combination of enhancing revenue sources and finding
more efficient methods of providing services (and with the help of a strong local economy), the City was
able to turn the forecast around from heading into deficits to a healthy balance.
One of the more significant revenue
enhancements that occurred in 2004 was the
passage of the reauthorization of Transnet
revenues. Transnet is a 1A cent additional sales
tax collected countywide and used to improve
the transportation systems. The current
authorization for the sales tax was to end in
2008. SANDAG, the San Diego Association of
Governments, placed a measure on the
November 2004 ballot to reauthorize the sales
tax for another 40 years. The measure passed
providing the City over $1.5 million in annual
taxes to be spent on street repair, maintenance
and construction, in addition to other potential
project funds.
Forecast Comparison
'04 '06 '08 '10 '12 '14 '16
The ability to understand the future impacts of both changes in revenue sources as well as program needs is
crucial to ensure that the City has the funds available to make its future plans come true. The General Fund
financial forecast is a tool available to the City to achieve the goal of 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, 2006 was
2.022. The average return realized on the pooled investments rose from 3.55% in Fiscal Year 2004-05 to
3.98% for Fiscal Year 2005-06.
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.
4.00% I
3.00%
2.00%
1.00%
0.00%
•1.00%
•2.00%
Jur
Historical Unrealized Gains/Losses
as Percent of Amortized Cost
July 1996 -June 2006
A J\Jy\^ l-UnrealG/l.%1A / i/ y VMt V v\yv
"X
-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06
The graph at the right shows the amount of
unrealized income (loss) reflected in the
portfolio over the last few years. The total
portfolio had an unrealized loss in Fiscal
Year 2006. According to the City
Treasurer, "This unrealized loss occurred as
investments with high interest rates matured
and were reinvested in lower market rates.
It is likely that this trend will reverse in FY
2007 as investments with lower interest
rates mature." This is discussed more
thoroughly in the MD&A.
Major Initiatives
Public safety has always been, and remains,
a top Council priority. After reviewing the
current staffing requirements and the population growth in the City, it was evident that there was a need to
add new Public Safety personnel to maintain the current service levels in the community. In Fiscal Year
2006-07, the Police Department added five positions to serve the public and the Fire Department added
seven positions. Six of the seven positions in the Fire Department were added to support a third ambulance.
Several significant projects in design or under construction over the next
few years. These include:
• The Alga Norte Park and Aquatic Center consists of 30
acres in the Southeast Quadrant with planned amenities that
include ball fields, soccer fields, picnic areas, tot lots, a skate
park, a dog park, restrooms and parking facilities, and an
aquatic center. Construction is scheduled to begin in Fiscal
Year 2007-08. The park is expected to cost $15.9 million and
the aquatic center is estimated at $23.3 million. Funding to
come from impact fees and the General Fund.
• The Carlsbad Municipal Golf Course is an 18-hole championship golf course on property
located north of Palomar Airport Road along College Boulevard. The estimated costs for building
and start up expenses are anticipated to be between
$50 - $60 million. The project will include a 23,000
sq. ft. clubhouse and the total course length will be
6,850 yards. The project is to be funded with
General Fund advances as well as tax exempt
bonds.
The 1st floor area of the existing Senior Center will
be remodeled to include additional amenities for the
senior community. These may include items such
as an exercise room, art room, TV room, multi-
purpose room, game room, health screening room
and a computer room. The 2nd floor will be remodeled to house City offices. The estimated cost
for the renovation is just under $1.6 million and will be funded from Redevelopment bonds and the
General Fund.
10
• A 20,000 square foot community facility and gymnasium are planned for the Pine Park
Community Center. The facility will include basketball, volleyball, gymnastics, multi-purpose
rooms, meeting rooms, a teen center and office space. Design of this $9.0 million facility is
expected to begin in the 2009-10 Fiscal Year. Funded by impact fees.
• Phase II of the 42-acre Poinsettia Park Community Center includes amenities such as a
community facility/gymnasium, enclosed soccer field, tot lot, picnic areas, tennis complex
including a clubhouse and stadium court, and additional parking. The total cost is expected to be
approximately $14.1 million. The construction of seven tennis courts are scheduled to begin in
2006-07 and the remainder of the project is expected to be completed in 2011-12. Funded by
impact fees.
In addition to the projects listed above, there are several significant civic projects being planned for the City
of Carlsbad. These projects include:
• The Public Works Center includes offices, shops, a yard, warehouse and parking to
accommodate the Public Works Department. Initial estimates put the cost at approximately $26.4
million.
• The Public Safety Training Facility project was authorized under Proposition C, which was
approved in 2002. Preliminary design work is underway. The facility may include a fire training
tower, residential training prop, outdoor seating pavilion, fire administration building with
classroom and storage facilities, in addition to the shooting range.
• The Library Learning Center will provide a permanent location for the Adult Learning and the
Centra de Informacion programs. The existing building adjacent to Holiday Park will be
remodeled and a second story, approximately 5,000 square feet, will be added for a total cost of
$6.1 million.
• Fire Station No. 3 is currently located at the corner of
Chestnut and Catalina. As the City grows eastward,
relocation of this station is needed to help ensure the five-
minute response time. The new station is budgeted as a 6,200
square foot facility and the cost is projected at $6.6 million.
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, 2005. This was the
eighth 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.
11
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. 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,
—L- ~?C~
LISA IRVINE
Finance Director
12
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, 2005
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
13
SOLANA BEACH
DEL MAR I 1-5
14
CITY OF CARLSBAD
ELECTED CITY OFFICIALS
Claude A. "Bud" Lewis, Mayor
Matt Hall, Mayor Pro Tern
Ann J. Kulchin, Council Member
Mark Packard, Council Member
Norine Sigafoose, Council Member
Lorraine M. Wood, City Clerk
Harold "Mac" McSherry, City Treasurer
ADMINISTRATION AND DEPARTMENT HEADS
Raymond R. Patchett, City Manager
Lisa Hildabrand, Assistant City Manager
James F. Elliott, Administrative Services Director
Glenn Pruim, 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
Conrad "Skip" Hammann, City Engineer
Debbie Fountain, Housing & Redevelopment Director
Mark Stone, Deputy Public Works Director, Maintenance and Operations
Lisa Irvine, Finance Director
Vacant, Planning Director
Pat Kelley, Principal Building Inspector
Heather Pizzuto, Library Director
Erin Letsch, Risk Manager
Ken Price, Recreation Director
Greg Clavier, Public Works Manager, General Services
Aletha L. Rautenkranz, Information Systems Director
CHAIRPERSONS, COMMISSIONS AND BOARDS
Gary Hill Arts Commission
Richard Erhardt Beach Preservation Committee
April Shute Carlsbad Tourism Business Improvement District Board
Bob Bender Community Television Foundation
Courtney Heineman Design Review Board
Sue Ladouceur Historic Preservation Commission
Edward Scarpelli Housing Commission
Claude A. Lewis Housing and Redevelopment Commission
Rob Swette Library Board of Trustees
Jim Craig Parks and Recreation Commission
Donald Martin Personnel Board
Marty Montgomery Planning Commission
Mike O'Connell Senior Commission
Vacant Serra Cooperative Library System Advisory Board
Christine Petrou Sister City Committee
Susan Gardner Traffic Safety Commission
Vacant Underground Utility Advisory Committee
15
FINANCIAL SECTION
McGladrey&Pulien
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 30,2006, 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 of Carlsbad's management. Our
responsibility is to express opinions 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 30,2006, and the respective changes in financial position and cash
flows, where applicable, thereof for the year then ended, in conformity with accounting principles generally accepted
in the United States of America.
As described in Note 19 to the basic financial statements, the City retroactively applied the provisions of the
Governmental Accounting Standards Board Statement No. 34 with respect to accounting and reporting for
infrastructure capital assets.
In accordance with Government Auditing Standards, we have also issued our report dated October 5,2006 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 and 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 the 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.
McGladrey & Pullen, LLP is a member firm of RSM International,
an affiliation of separate and independent legal entities.
17
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.
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 them.
Riverside, California
October 5, 2006
18
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, 2006. 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 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 accompanied by 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 1
Government-
wide Financial
Statements
Fund
Financial
Statements
Notes
to the
Financial
Statements
Summary Detail
19
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 Rental 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, trash and golf 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.
20
Just under 60% of the $197.7 million in unrestricted governmental activities net assets is attributable to the General
Fund. Unrestricted net assets for the City's business-type activities decreased by $33.9 million during the 2005-06
Fiscal Year. This was the result of the construction of the City's municipal golf course, which at this point, is
financed completely by an advance from the General Fund.
Changes in Net Assets
The condensed summary of activities, which follows, shows that net assets increased by $63.8 million during the
year. This increase occurs when spending is less than the revenues received. There were several reasons for the
increase in net assets: an emphasis on efficiencies resulting in a reduction in expenses/expenditures, $14 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 and enterprise 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
Capital 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
2005
$17.0
12.8
74.4
41.5
24.7
20.4
9.9
2.4
203.1
11.3
34.4
14.4
16.0
22.1
1.0
-
-
-
99.2
103.9
-
103.9
855.9
$959.8
2006
$18.1
12.1
39.3
43.9
25.4
21.9
11.7
1.3
173.7
15.4
35.8
14.3
16.8
36.0
1.0
-
-
-
119.3
54.4
(0.3)
54.1
959.8
$1,013.9
Activities
2005
$27.5
0.5
17.1
2.0
-
4.2
0.6
51.9
-
-
-
-
-
-
21.4
7.2
1.5
30.1
21.8
-
21.8
303.6
$325.4
2006
$28.2
0.7
11.2
2.3
-
-
3.5
0.1
46.0
-
-
-
-
24. 1
8.3
4.2
36.6
9.4
0.3
9.7
325.4
$335.1
Total
2005
$44.5
13.3
91.5
43.5
24.7
20.4
14.1
3.0
255.0
11.3
34.4
14.4
16.0
22.1
1.0
21.4
7.2
1.5
129.3
125.7
-
125.7
1,159.5
$1,285.2
2006
$46.3
12.8
50.5
46.2
25.4
21.9
15.2
1.4
219.7
15.4
35.8
14.3
16.8
36.0
1.0
24.1
8.3
4.2
155.9
63.8
-
63.8
1,285.2
$1,349.0
Total
Percentage
Change
2005-06
4.0%
-3.8%
-44.8%
6.2%
2.8%
7.4%
7.8%
-53.3%
-13.8%
36.3%
4.1%
-0.7%
5.0%
62.9%
0.0%
12.6%
15.3%
180.0%
20.6%
-49.2%
-100.0%
-49.2%
10.8%
5.0%
22
City of Carlsbad
Sources of Revenue for Fiscal Year 2005-06
$219.7 Million
Grants/
Contributions (23%)
Income from Property and
Investments (7%)
Other Taxes (5%)
TOT (5%)
Other (1%)
Just under 53% of the revenues of the
City's governmental funds are
generated through taxes collected
(property, sales, transient occupancy
tax, etc.), and just under 61% 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 capital grants and
contributions is the result of acquiring a
portion of Poinsettia Lane and the other
associated improvements last fiscal
year. Interest earned by the General
Fund on a $30.3 million advance from
the City's General Fund to the Golf
Course Fund contributed to the 7.8% increase in income from property and investments for the year.
The total cost of all programs and services was just under $156 million in Fiscal Year 2005-06. The City's expenses
cover a range of services:
Property Taxes (21%)
Charges for Services (21%)
Sales Tax (11%)Federal Aid (4%)
State Aid (2%)
General Government (10%)
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. The Administrative Services group includes Finance, Human Resources,
Information Technologies, Risk and Records Management.
General
Government
10%
Public Safety
23%
Public Safety (23%)
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 (9%)
The mission of Community Development is helping people
build a strong community by guiding and facilitating high
quality projects, preserving the environment, providing for
diverse housing and employment, and maintaining a strong
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.
City of Carlsbad
Functional Expenses for Fiscal Year 2005-06
$156 Million
Public Works
23%Community
Community Development
Services
11%
9%
23
• Community Services (11%)
Community Services consist of the Libraries, Cultural Arts, Recreation, Park Planning, and Senior Citizen
programs. These programs are provided to a wide range of people and assist in their education and cultural
development.
• Public Works (23%)
Public Works is responsible for building and maintaining all of the infrastructure assets of the City. This
service area includes Engineering, Parks, Streets, Medians, Street Trees, the Buena Vista Channel, and
Facilities Maintenance, Building Maintenance, Street Lighting and Traffic Sign and Signal Maintenance
programs.
• Water Operations (16%)
The Carlsbad Municipal Water District, a subsidiary of the City of Carlsbad, provides potable water service to
approximately 85% of the City (80,800 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 irrigation purposes.
• Sewer Operations (5%)
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 (3%)
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 expense of the City's long-term debt
that is associated with governmental activities.
The following sections will provide information about the operations of the governmental and business-type
activities separately.
Governmental Activities
The increase in net assets for governmental activities was $54.1 million. This increase was generated by total
revenues of governmental activities of $173.7 million ($69.5 million in program revenues and $104.2 million in
general revenues) offset by $119.3 million in total costs of governmental activities and $315,000 in transfers out.
The following table presents the total cost of each of the City's major programs, as well as each function's program
revenue (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).
24
Governmental Activities
Program Revenues and Expenses
Fiscal Year 2005-06
(in millions)
Q Program Revenues
O Expenses
General Public Safety Community
Government Development
Co mmunity
Services
Public Works
Revenues are generated through several sources to cover the cost of the City's programs. These revenues include
fees and charges paid by those who directly benefit from the programs ($18.1 million), grants and contributions
from other governments and organizations which subsidize certain programs ($51.4 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 $104.2 million.
Program revenues exceed expenses in Public Works. The majority of Public Works revenues are used to acquire
and build capital assets (versus covering operating expenses) that have not yet been constructed. Capital assets are
generally constructed or purchased once sufficient revenue has been accumulated to pay for the cost. The City is
currently in a developing or growing stage, and master plans are continuing to be designed to construct these new
facilities, roads, parks, and other City-owned infrastructure.
Business-Type Activities
Business-Type Activities
Program Revenues and Expenses
Fiscal Year 2005-06
(in millions)
Q Program Revenues
E3 Expenses
Water Sewer Solid Waste
Program revenues for the City's business-type activities totaled $40.1 million for the year, while functional expenses
equaled $36.6 million. The City golf course is currently under construction, so the program revenues and functional
expenditures are still minimal, and therefore not shown on the graph above. The course is expected to open in July
2007.
25
Program revenues are higher than program expenses primarily due to capital contributions in the form of capital
connection fees, developer constructed assets donated to the City, and Federal and State capital construction grants
earmarked to help fund the Recycled Water facilities. Capital construction expenses are spread over the life of an
asset as annual depreciation charges (program expenses). 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. In the current CAFR, one change was made in the reporting of special revenue funds. This change
was to reclassify the Carlsbad Tourism Business Improvement District from a special revenue fund to an agency
fund.
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)
$384.4 Million
Reserved for Other Purposes
($17.5 million)
Reserved for Advances ^^^^^^^ "\ Undesignated (S108.3 million)
to Other Funds
(S47.9 million)
Designated for Future Continuing
Appropriations
($115 million)
Designated for Approved
Capital Projects
($77.9 million)
Reserved to Liquidate Contracts and
Purchase Orders
($17.8 million)
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of
$384.4 million, an increase of $10 million in comparison with the prior year. Approximately 28% of this amount
($108.3 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 because it has already been committed (1) for future capital projects -
20%, (2) to liquidate contracts and purchase orders of the prior period - 5%, (3) for future programs - 30%, (4)
advances to other funds -12% or (5) for a variety of other restricted purposes - 5%.
26
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
(in millions of dollars)
Total
Increase Percentage
Total (Decrease)
Revenues
Taxes
I ntergovemmenta 1
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
Total expenses
Excess (deficiency) before transfers
Transfers
Increase (decrease) in fund balance
Beginning fund balance
Ending fund balance
2005
$75.0
9.8
3.4
8.0
3.0
2.6
2.0
103.8
11.3
33.6
7.0
14.6
16.4
82.9
20.9
(5.6)
15.3
84.1
$99.4
2006
$87.2
I.I
2.5
7.8
2.4
2.6
2.4
106.0
16.1
36.2
7.1
15.4
18.0
92.8
13.2
(6.0)
7.2
99.4
$106.6
2005-06
$12.2
(8.7)
(0.9)
(0.2)
(0.6)
0.0
0.4
2.2
4.8
2.6
O.I
0.8
1.6
9.9
Change
16.3%
-88.8%
-26.5%
-2.5%
-20.0%
0.0%
20.0%
2.1%
42.5%
7.7%
1 .4%
5.5%
9.8%
11.9%
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 $106.6
million, an increase of $7.2
million. The unreserved fund
balance portion of the General
Fund was $61.5 million, of
which $14 million was
designated for future programs
and service enhancements.
The increase in revenues was
primarily due to two factors: the
effects of a strong housing
market on property and transfer
taxes and continued strength in
the tourism industry (higher
transient occupancy tax). The
largest factor in the decrease of
intergovernmental revenues can
be attributed to the fact that the
State has reallocated property
taxes for Vehicle License Fees
(VLF). Thus, instead of receiving
$6.2 million in VLF, the City
received additional property taxes in an equal amount.
The increase in General Fund expenditures were driven by the following factors:
• Normal salary and benefit increases.
• PERS rates for the miscellaneous plan increased from 16.664% to 20.869%, and rates for the safety plan
increased from 27.573% to 27.927% for a total impact of $2.8 million.
• Significant costs to repair severe damage caused by the heavy rains from the 2005 winter storms.
• The purchase of a fire ladder truck.
• The purchase of a new radio frequency identification system in the City's libraries.
One major governmental fund, the Redevelopment Debt Service Fund, had a negative fund balance of just under
$12.6 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.
Of the six remaining major governmental funds, three funds saw their fund balances decline during the fiscal year.
The Assessment and Other Districts Funds purchased several large infrastructure assets including Poinsettia Lane,
College Blvd. and Cannon Road. The Public Facilities Construction Fund financed several large projects including
Aviara Community Park and Pine Avenue Park during Fiscal Year 2005-06. The Rancho Santa Fe Road Project
fund had a decrease in fund balance due to the near completion of construction of this major arterial roadway in the
City of Carlsbad.
Two of the five remaining major governmental funds, which are all capital project funds, had increases in their fund
balances during the year. These increases in fund balances are all designated for the construction or purchase of
future capital assets.
27
Proprietary Funds
The purpose of the City's proprietary funds is to provide short and long-term financial information about the City's
business-type activities. The analysis focuses 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 $4.0 million for the year.
Increased fixed and variable costs from Metropolitan Water District and County Water Authority (suppliers of the
City's potable water), as well as increased depreciation expense due to newly constructed infrastructure assets,
added to the operating loss for the year. In addition, the Carlsbad Water Recycling Facility became operational,
resulting in increased operating costs of that facility. Non-operating revenues (primarily property tax and
investment earnings) offset the majority of the operating loss, resulting in a net loss of approximately $350,000.
The Sewer Funds had an annual operating loss of approximately $1.1 million for the fiscal year. Total revenues
from operations increased 6% from the previous year; however, higher sewer plant operating costs led to an
operating loss for the year. Staffing costs rose 13.4% due to normal salary increases and increases in retirement and
healthcare costs. In addition, there were higher outside services and maintenance expenditures related to the
rehabilitation and repair of sewer lines and pump stations. Non-operating revenue (investment earnings) more than
offset the operating loss, resulting in a slight gain of $41,000 for the year.
Solid Waste operations and the Storm Water Protection Program are combined on the City's financial reports.
Revenues decreased in the current year by approximately 19%. Non-jurisdictional fees paid by the City's solid
waste franchisee for their impact on City streets, are now recorded in a capital project fund versus the Solid Waste
Fund. Operating costs increased 15% due to inflationary increases, the expansion of the Storm Water Protection
Program and enhanced Solid Waste and recycling efforts.
Business-Type Activities
Operating Revenues and Expenses
Fiscal Year 2005-06
(in millions)
0 Operating Revenues
0 Operating Expenses
Water Sewer Solid Waste
The new municipal golf course is under construction and planned funding includes a combination of a loan from the
General Fund and future bonds. The loan from the City and the proposed bond proceeds will be repaid through user
fees and other revenues of the golf course.
Unrestricted net assets for the Water, Sewer, and Solid Waste operations at the end of the year amounted to $9.5
million, or approximately 3% of the net assets of these proprietary funds. These assets will be used for future rate
stabilization efforts as well as for any emergency situation. Approximately 32% of the net assets of all the
proprietary funds are restricted for future capital construction of new and replacement water and sewer infrastructure
assets. The Golf Course Fund has a negative unrestricted net asset balance of $31.8 million. This is the result of
internal financing (General Fund advance) of the construction of the new municipal golf course. This advance will
be repaid to the General Fund in the future.
28
General Fund Budgetary Highlights for Fiscal Year 2006
Management monitors revenues during the year and updates estimated revenue figures when new information is
received by the City. Estimated revenues were decreased during this year by $1.7 million to reflect the net effect of
the following changes:
• The impacts on TOT from continued strength in the tourism industry.
• A slow down in the sale of new automobiles, affecting the City's sales tax revenues.
• Reimbursements received from FEMA and OES for assistance with the 2005 winter storm damage.
• Additional miscellaneous revenues received due to energy rebates, police work at special events, and
additional contributions from property owners for studies, projects and public improvements.
The increase from the total original expenditure budget to the final budget amounted to $3 million, due
predominantly to:
• Local emergency repair work from winter storms.
• Appropriating funds received from developers during the year for developer-funded studies.
• Budgeted expenditures associated with new grant revenues.
• Appropriating donations received.
• Transfer of tree maintenance personnel from the Street Tree Special Revenue Fund to the Parks Department
within the General Fund.
• Interim tourism contracts prior to the formation of the Carlsbad Business Improvement District.
The difference between the final budgeted expenditures and the actual expenditures for the year on a budgetary basis
of $16.3 million can be generally summarized as follows:
• $14 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.
> Deferral of projects.
*t» $ 14 million in "savings" are planned to be used for:
=> Additional technology and software upgrades at the City's libraries, and in Finance, Human Resources,
Fire and Public Works Departments.
=> Upcoming "Futuring Conference."
=> Upcoming renovation costs resulting from the purchase of the former Carlsbad Unified School District
building adjacent to the Senior Center.
=> Expected upgrade of the Senior Center.
=> Projected future park and public pool improvements.
=> Future Police communication improvements including the replacement of the 800 MHz system, new
radios and a mobile command post.
=> Anticipated enhanced citywide street maintenance including additional concrete and asphalt repairs.
=> Anticipated costs associated with updating the City's General Plan and Local Coastal Program, and
revising the associated Municipal Code.
• $2.3 million in unspent major capital outlay appropriations was not carried forward, as well as any remaining
balances from programs with a one-year life cycle.
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 remaining encumbrances, 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.
29
Capital Asset and Debt Administration
Capital Assets
At the end of Fiscal Year 2006, the City had recorded an investment of just over $883 million in a broad range of
capital assets, including park facilities, land, buildings, roads, bridges, drainage facilities, water and sewer lines,
police and fire vehicles, and other maintenance equipment. This number includes infrastructure assets of the general
government which were added per GASB 34 requirements.
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
2005
$124.2
69.2
17.6
21.9
402.3
72.2
-
707.4
(128.9)
$578.5
2006
$128.6
69.5
28.3
23.0
409.7
101.4
-
760.5
(142.9)
$617.6
Activities
2005
$8.7
16.2
5.6
1.5
159.7
40.3
40.3
272.3
(52.1)
$220.2
2006
$8.7
16.9
5.6
1.5
169.6
76.9
42.8
322.0
(56.6)
$265.4
Total
2005
$132.9
85.4
23.2
23.4
562.0
112.5
40.3
979.7
(181.0)
$798.7
2006
$137.3
86.4
33.9
24.5
579.3
178.3
42.8
1,082.5
(199.5)
$883.0
Total
Percentage
Change
2005-06
$4.4
1.0
10.7
1.1
17.3
65.8
2.5
102.8
(18.5)
$84.3
Change
2005-06
3.3%
1.2%
46.1%
4.7%
3.1%
58.5%
6.2%
10.5%
10.2%
10.6%
This year's major capital asset additions included:
• Aviara Community Park
• Recycled Water Flow Equalization Facility
• Buena Vista Lift Station
• Developer-dedicated streets, drainage facilities, traffic signals, water and sewer lines and streetlights
• Construction of the municipal golf course
• Construction of Pine Avenue Park
• Development of the Coastal Rail Trail
• Acquisition of the easterly extension of Poinsettia Lane, easterly extension of Cannon Road and the southerly
extension of College Avenue
• Continued development of Rancho Santa Fe Road
• Installation of synthetic turf at Stagecoach Park
In addition to carrying forward appropriations of $143.7 million for previously budgeted projects, the City's Fiscal
Year 2006-07 capital budget appropriates an additional $48.8 million for capital projects. These additional
appropriations are principally for construction of the golf course, park development, relocation of an existing fire
station, expansion of the library learning center, the pavement management program, street projects, enhancing the
sewer collection system, additional water lines, traffic signals, and miscellaneous civic projects, loans and
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 and in the City's Capital Improvement Program document, which can be
obtained from the Finance Department.
30
Long-Term Debt
At year-end, the City had $31.1 million in bonds, certificates of participation, loans and agreements, an increase of
$7.9 million from last year, as shown in the table below. The increase in debt is attributable to additional loans
made by the State Water Resources Control Board to the Carlsbad Municipal Water District for construction of the
new recycled water facility. 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 ot" participation
Loans
Installment purchase agreement
Less: Deterred charges
Total
2005
$12.5
2.7
-
$15.2
2006
$12.1
2.1
-
$14.2
Business-Type
Activities
2005
$0.0
1.2
7.3
(0.5)
$8.0
2006
$0.0
10.6
6.7
(0.4)
$16.9
Total
2005
$12.5
2.7
1.2
7.3
(0.5)
$23.2
2006
$12.1
2.1
10.6
6.7
(0.4)
$31.1
Total
Percentage
Change
2005-06
-3.2%
-22.2%
783.3%
-8.2%
-20.0%
34.1%
Economic Factors and Next Year's Budgets and Rates for Fiscal Year 2007
• The State of California adopted its 2006-07 annual budget with the following provisions affecting the City:
> The City will no longer be required to make a $1.8 million "contribution" to the State in the 2006-07
Fiscal Year.
> The State implemented the "Triple Flip" in Fiscal Year 2004-05, whereby the City's sales tax receipts
were reduced by one-quarter, and this reduction was made up with property taxes equating to the same
amount. This will continue in the 2006-07 Fiscal Year.
> The "Triple Flip" swap will have no effect on the ultimate amount of revenue the City receives, but it will
result in a delay in the timing of the receipt of money by the City.
• Net assessed values in the City stand at almost $20.7 billion, almost double what they were just five years ago.
• PERS rates for the miscellaneous plan have decreased for the 2006-07 Fiscal Year from 20.869% to 19.810%,
and have decreased from 27.927% to 27.572% for the safety plan. The decrease in rates is a reflection of a
recently implemented rate stabilization policy adopted by PERS to smooth future PERS rates.
• Retail natural gas prices have stabilized during the past fiscal year, creating a minimal impact on the City's
future franchise fee revenue.
• The Consumer Price Index (CPI) for the western region of the United States for urban households increased by
3.1% during the twelve months ended November 30, 2005.
• The total number of housing units in Carlsbad grew by 3.4% in Calendar Year 2005, impacting our budgeted
expenditures for Fiscal Year 2006-07.
• Median home prices in Carlsbad have increased by 5.7% in Calendar Year 2005 to $748,000.
• The Federal Reserve has raised interest rates 17 times since June of 2004, impacting residential development
within the City.
All of these factors were considered when preparing the City of Carlsbad's General Fund budget for the 2006-07
Fiscal Year. Budgeted expenditures are expected to increase 9% to $106.4 million. The increase is mainly due to an
increase in the number of positions and other 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, the
annual transfer to the Infrastructure Replacement Fund is being increased by $2.7 million, to a total of $7.2 million.
Adding to the adopted budget of $106.4 for the General Fund, just under $14 million in unspent 2005-06 budgeted
expenditures will be carried over to the 2006-07 Fiscal Year, as well as $4.6 million in open encumbrances as of
June 30, 2006.
31
As the City is approaching the build out of its remaining vacant land, the City is now ushering in a new era focusing
on maintaining the City's infrastructure rather than building it. In an effort to address this issue, the City has
developed an Infrastructure Replacement Fund (IFR). With this fund, the City sets aside money on an annual basis
for major maintenance and replacement of its infrastructure. In the 2006-07 Operating Budget, the City has
budgeted a $7.2 million transfer from the General Fund to the IFR, an increase of $2.7 million from the prior fiscal
year, to meet our future needs.
During the current fiscal year, the unreserved fund balance in the General Fund increased to $47.5 million due to the
City of Carlsbad's fiscal discipline and a diverse economy. If the City's budget estimates are realized, the City's
budgeted unreserved General Fund balance is expected to increase modestly by the close of Fiscal Year 2007.
With the exception of the Public Facilities Construction Fund (PFF), there are sufficient revenues projected to build
the projects listed in the 2006-07 Capital Improvement Program (CIP). A large increase in the cost of construction
materials has occurred over the past three years, pushing up the cost of all of the City's projects. Although the City
is considering various options to address the future funding of projects in the PFF, $12 million is forecasted to be
loaned to the PFF from the General Capital Construction Fund in Fiscal Year 2006-07. This will allow projects to
be constructed from this funding source while the City evaluates the future options for this fund.
The City's business-type activities reflect the following:
• Water rates will be increasing by 5.0% in Fiscal Year 2006-07.
• Sewer rates will be increasing by 8.5% in Fiscal Year 2006-07.
• No projected significant changes in other revenue sources.
• The Recycled Water Operations Fund budget reflects a 39% increase, or $1,039,000, to fund costs associated
with the new treatment plant: operations, depreciation expense, and debt service on a loan from the State.
• Other changes in the Enterprise funds are the result of inflation, depreciation increases due to expanding
infrastructure, and increased costs for maintenance and repair of the City's infrastructure.
Contacting the City's Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, 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.carlsbadca.gov.
32
33
CITY OF CARLSBAD
Statement of Net Assets
June 30, 2006
Primary Government
ASSETS
Cash and investments
Receivables:
Taxes
Accounts, net
Other
Due from other governments
Inventories
Prepaid items
Loan and reimbursement receivables
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
$ 372,576,531
5,936,014
480,706
202,595
709,340
215,441
332,760
13,112,974
659,500
-
38,118,520
128,582,931
69,476,635
28,273,684
23,073,418
409,728,105
101,370,353
-
(142,877,215)
617,627,911
$ 1,049,972,292
Business-type
Activities
$ 130,016,590 :
27,486
4,082,681
-
1,440,376
552,090
-
437,510
953,706
21,300
(38,118,520)
8,663,600
16,941,971
5,556,571
1,475,229
169,637,849
76,912,553
42,809,292
(56,603,556)
265,393,509
$ 364,806,728 I
Total
$ 502,593,121
5,963,500
4,563,387
202,595
2,149,716
767,531
332,760
13,550,484
1,613,206
21,300
-
137,246,531
86,418,606
33,830,255
24,548,647
579,365,954
178,282,906
42,809,292
(199,480,771)
883,021,420
$ 1,414,779,020
The notes to the financial statements are an integral part of this statement.
34
CITY OF CARLSBAD
Statement of Net Assets (Continued)
June 30, 2006
LIABILITIES
Accrued liabilities
Accrued interest payable
Due to other governments
Estimated claims payable
Deposits payable
Current liabilities payable from
restricted assets - accrued interest
Deferred revenue
Current portion of long-term debt
Noncurrent liabilities:
Due in more than one year, net of deferred
charges and unamortized issuance costs
of $437 ,443
Total liabilities
Governmental
Activities
$ 12,467,878
252,127
4,198,701
4,127,834
199,890
-
666,431
1,090,703
13,080,000
36,083,564
Primary Government
Business-type
Activities
$ 6,281,065 !
182,918
4,915,825
-
534,055
143,992
800,674
993,382
15,891,555
29,743,466
Total
5 18,748,943
435,045
9,114,526
4,127,834
733,945
143,992
1,467,105
2,084,085
28,971,555
65,827,030
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Capital assets
Affordable, low and moderate income housing
Habitat and agricultural mitigation management
Other purposes
Unrestricted
Total net assets
604,116,708
172,473,473
27,453,435
7,041,515
5,131,421
197,672,176
$ 1,013,888,728
249,462,278
107,841,010
-
-
-
(22,240,026)
$ 335,063,262
853,578,986
280,314,483
27,453,435
7,041,515
5,131,421
175,432,150
$ 1,348,951,990
The notes to the financial statements are an integral part of this statement.
35
CITY OF CARLSBAD
Statement of Activities
For the Year Ended June 30, 2006
Functions/Programs
Primary government:
Governmental activities:
General government
Public safety
Community development
Community services
Public works
Interest and fiscal charges on long-term debt
Total governmental activities
Business-type activities:
Carlsbad Municipal Water District
Golf course
Sewer
Solid waste
Total business-type activities
Total primary government
Expenses
$ 15,382,334
35,822,457
14,332,329
16,789,555
35,937,039
1,036,061
119,299,775
24,124,143
2,470,778
8,264,520
1,699,120
36,558,561
$ 155,858,336
Charges for
Services
$ 945,047
3,611,524
4,676,899
2,436,657
6,450,812
-
18,120,939
19,462,185
-
6,800,918
1,892,746
28,155,849
$ 46,276,788
Program Revenues
Operating
Grants and
Contributions
$ 1,113,994
285,408
7,674,290
825,731
2,216,485
-
12,115,908
688,961
-
-
29,214
718,175
$ 12,834,083
Capital
Grants and
Contributions
$ (1,111,525)
21,690
895,077
1,510,100
37,970,512
-
39,285,854
7,593,789
-
3,618,992
-
11,212,781
$ 50,498,635
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 (as restated)
Net assets at end of year
The notes to the financial statements are an integral part of this statement.
36
Net Revenue (Expense) and
Changes in Net Assets
Primary Government
Governmental
Activities
$ (14,434,818)
(31,903,835)
(1,086,063)
(12,017,067)
10,700,770
(1,036,061)
(49,777,074)
-
-
-
(49,777,074)
43,936,095
25,429,074
11,512,552
5,429,311
3,039,678
1,905,842
587,179
371,640
11,681,912
278,824
(315,215)
103,856,892
54,079,818
959,808,910
Business-type
Activities
$
-
-
-
-
-
-
3,620,792
(2,470,778)
2,155,390
222,840
3,528,244
3,528,244
2,257,124
-
-
-
-
-
-
-
3,538,004
56,223
315,215
6,166,566
9,694,810
325,368,452
Total
$ (14,434,818)
(31,903,835)
(1,086,063)
(12,017,067)
10,700,770
(1,036,061)
(49,777,074)
3,620,792
(2,470,778)
2,155,390
222,840
3,528,244
(46,248,830)
46,193,219
25,429,074
11,512,552
5,429,311
3,039,678
1,905,842
587,179
371,640
15,219,916
335,047
-
110,023,458
63,774,628
1,285,177,362
$1,013,888,728 $335,063,262 $1,348,951,990
37
CITY OF CARLSBAD
Balance Sheet
Governmental Funds
June 30, 2006
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
Redevelopment Assessment
General Debt and Other
Fund Service Funds Districts
$ 64,420,482 $ 1,524,825 $ 26,436,794
5,763,301 135,490
61,073 1,471 36,270
403,211
_
62,875
19,568
-
-
124,417
-
52,981,823
Community
Facilities
District No. 1
$ 49,561,783
1
-
-
-
-
-
-
-
-
Total assets
LIABILITIES AND FUND BALANCES
123,836,750 $ 1,661,786 $ 26,473,064 $ 49,561,784
Liabilities:
Accrued liabilities
Due to other funds
Deposits payable
Due to other governments
Advances from other funds
Deferred revenue
Total liabilities
Fund balances:
Reserved
Unreserved:
Designated, 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
$ 4,342,870 $
45,131,308
13,974,339
47,519,083
106,624,730
4,424 $20,243
71,618
2,284
-
12,795,248
17,212,020
2,680
14,232,552
-
14,235,232
-
-
-
4,424 20,243
7,936 99,796
26,460,704 49,441,745
(12,573,446)
(12,573,446)26,468,640 49,541,541
$ 123,836,750 $ 1,661,786 $ 26,473,064 $ 49,561,784
The notes to the financial statements are an integral part of this statement.
38
General Public Rancho Santa Other
Capital Facilities FeRoad Governmental
Construction Construction Project Funds
$ 50,920,111 $ 39,082,547 $ 16,801,496 $ 102,365,050
37,222
103,781
33,051 - - 42,023
136,933 123,468
646,465
.
332,760
659,500
12,988,557
2,850,021 - - 4,643,344
$ 53,803,183 $ 39,082,547 $ 16,938,429 $ 121,942,170
Total
Governmental
Funds
$ 351,113,088
5,936,014
202,595
478,285
260,401
709,340
19,568
332,760
659,500
13,112,974
60,475,188
$ 433,299,713
$ 689,054 $ 698,747 $ 1,935,741 $ 1,082,205
260,401
57,472 - 70,800
4,193,737
8,124,116
135,060 142,699 - 76,714
824,114 898,918 6,129,478 9,614,236
5,816,469 926,220 2,252,258 28,897,315
5,576,058
41,358
16,507,666 37,257,409 8,556,693 35,078,750
.
24,448,169
851,104
30,654,934 - - 17,435,180
52,979,069 38,183,629 10,808,951 112,327,934
$ 53,803,183 $ 39,082,547 $ 16,938,429 $ 121,942,170
$ 8,773,284
260,401
199,890
4,198,701
22,356,668
13,149,721
48,938,665
83,131,302
13,974,339
5,576,058
41,358
173,302,967
47,519,083
24,448,169
(11,722,342)
48,090,114
384,361,048
$ 433,299,713
39
CITY OF CARLSBAD
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
June 30, 2006
Total fund balances - governmental funds. $ 384,361,048
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 611,697,993
Internal service funds 5,929,918
Total capital assets 617.627,911
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 20,221,476
Internal service fund net assets included as part of total capital assets (5,929,918)
Internal service fund net assets less capital assets 14,291,558
Accrued interest is not due and payable in the current period and, therefore,
is not reported in the funds. (252,127)
Retentions payable are not due and payable in the current period and, therefore,
are not reported in the funds. (452,249)
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. 12,567,568
A portion of the taxes receivable is not available to pay for current-period
expenditures and, therefore, is deferred in the funds. (160,992)
A portion of accounts receivables are not available to pay for current-period
expenditures and, therefore, is deferred in the funds. 76,714
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 (14,170,703)
Net assets of governmental activities. $1,013,888,728
The notes to the financial statements are an integral part of this statement.
40
41
CITY OF CARLSBAD
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30,2006
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
S 87,223,261
1,102,240
2,504,019
7,751,673
1,063,268
2,411,227
2,611,380
-
-
1,280,462
105,947,530
16,051,181
36,201,909
7,049,027
15,406,372
18,046,546
-
6,663
460
92,762,158
13,185,372
76,666
(6,033,432)
(5,956,766)
7,228,606
99,396,124
S 106,624,730
Redevelopment
Debt
Service Funds
$ 2,384,571
-
-
-
-
40,429
-
-
-
-
2,425,000
18,503
-
-
-
-
-
395,000
1,485,357
1,898,860
526,140
-
(1,000,000)
(1,000,000)
(473,860)
(12,099,586)
$ (12,573,446)
Assessment
and Other
Districts
$
-
-
-
1,085,231
-
10,014,741
-
39,857
11,139,829
-
-
-
-
15,787,793
-
-
15,787,793
(4,647,964)
3,861,887
(4J84.941)
(323,054)
(4,971,018)
31,439,658
$ 26,468,640
Community
Facilities District
No. 1
S 2,913,558
-
-
-
-
1,068,745
-
612,847
-
-
4,595,150
181,972
-
-
-
6,310
-
188,282
4,406,868
4,406,868
45,134,673
$ 49,541,541
The notes to the financial statements are an integral part of this statement.
42
General Public
Capital Facilities
Construction Construction
$ - $
493,774
-
-
-
1,392,876 1,277,146
-
5,900,483
-
212,939 312
2,099,589 7,177,941
-
2,684,734 7,653,585
_
-
2,684,734 7,653,585
(585,145) (475,644)
600,000
-
600,000
14,855 (475,644)
52,964,214 38,659,273
$52,979,069 $38,183,629
Rancho Santa
Fe Road
Project
$
1,124,810
-
-
438,083
-
3,198,340
-
495,342
5,256,575
-
-
-
-
7,944,216
7,944,216
(2,687,641)
136,933
-
136,933
(2,550,708)
13,359,659
$ 10,808,951
Other
Governmental
Funds
$ 2,340,505
10,306,126
-
3,286,329
1 14,926
2,673,187
28,000
5,638,356
129,558
48,117
24,565,104
59,193
163,124
7,251,070
230,947
2,281,010
12,954,970
635,000
113,058
23,688,372
876,732
7,009,367
(1,115,127)
5,894,240
6,770,972
105,556,962
$112,327,934
Total
Governmental
Funds
$ 94,861,895
13,026,950
2,504,019
11,038,002
1,178,194
10,386,924
2,639,380
25,364,767
129,558
2,077,029
163,206,718
16,310,849
36,365,033
14,300,097
15,637,319
20,327,556
47,031,608
1,036,663
1,598,875
152,608,000
10,598,718
11,684,853
(12,333,500)
(648,647)
9,950,071
374,410,977
$ 384,361,048
43
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, 2006
Net change in fund balances - total governmental funds.$ 9,950,071
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
Depreciation expense
40,516,194
(13,476,971)
Governmental funds do not reflect the donation of capital assets as revenues.11,696,347
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.(15,142)
The repayment of the principal of long-term debt consumes the current financial
resources of governmental funds but has no effect on net assets.1,036,663
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.18,556
Unpaid interest income on advances to other funds is not a current financial
resource, and therefore is not recognized as revenue in the funds.3,001,359
A portion of sales and use taxes previously recoginized in the Statement of Activities, but
had been deferred in the funds.
The net revenue of activities of internal service funds is reported
with governmental activities.
Other
Change in net assets of governmental activities.
(974,360)
2,363,577
(36,476)
$ 54,079,818
The notes to the financial statements are an integral part of this statement.
44
45
CITY OF CARLSBAD
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
General Fund
For the Year Ended June 30, 2006
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
$ 85,961,000
1,647,000
2,750,000
7,091,000
926,000
2,960,000
2,700,000
750,000
104,785,000
19,776,477
38,918,970
9,122,761
20,434,491
22,368,295
6,663
460
110,628,117
(5,843,117)
-
(5,875,000)
(5,875,000)
(11,718,117)
99,396,124
$ 87,678,007
Amounts
Final
$ 83,649,000
2,031,000
2,750,000
7,114,000
926,000
2,960,000
2,700,000
984,000
103,114,000
21,703,254
38,922,233
10,071,706
20,493,265
22,442,827
6,663
460
113,640,408
(10,526,408)
101,444
(6,258,432)
(6,156,988)
(16,683,396)
99,396,124
$ 82,712,728
Actual Amounts
(Budgetary Basis)
$ 87,223,261
1,102,240
2,504,019
7,751,673
1,063,268
3,339,741
2,611,380
1,280,462
106,876,044
17,345,827
36,417,911
7,847,923
16,195,437
19,516,416
6,663
460
97,330,637
9,545,407
76,666
(6,258,432)
(6,181,766)
3,363,641
99,396,124
$ 102,759,765
Variance With
Final Budget -
Over
(Under)
$ 3,574,261
(928,760)
(245,981)
637,673
137,268
379,741
(88,620)
296,462
3,762,044
(4,357,427)
(2,504,322)
(2,223,783)
(4,297,828)
(2,926,411)
-
-
(16,309,771)
20,071,815
(24,778)
-
(24,778)
$ 20,047,037
The notes to the financial statements are an integral part of this statement.
46
CITY OF CARLSBAD
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
General Fund (Continued)
For the Year Ended June 30, 2006
BUDGET-TO-GAAP RECONCILIATION
Actual Amounts
(Budgetary Basis)
Revenues
Actual amounts (budgetary basis) "available for appropriation" from
the budgetary comparison schedule (previous page).
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.
Expenditures
Actual amounts (budgetary basis) "total charges to appropriations"
from the budgetary comparison schedule (previous page).
Differences - budget to GAAP:
Encumbrances are shown in the year encumbered for budgetary purposes,
but in the year paid for financial reporting purposes.
Other financing sources (uses)
Actual amounts (budgetary basis) "total other financing sources (uses)"
from the budgetary comparison schedule (previous page).
Differences - budget to GAAP:
Some advances are budgeted for as transfers out for budgetary purposes,
but reflected as advances for financial reporting purpes.
$ 106,876,044
(928,514)
$ 105,947,530
$ 97,330,637
(4,568,479)
$ 92,762,158
(6,181,766)
225,000
$ (5,956,766)
The notes to the financial statements are an integral part of this statement.
47
CITY OF CARLSBAD
Statement of Net Assets
Proprietary Funds
June 30,2006
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
Current restricted assets:
Cash and investments
Accrued interest
Total current restricted assets
Noncurrent assets:
Loans and reimbursement receivables
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
53,291,630 8,240,727 61,615,700
27,486
2,474,862
749,383
547,257
57,090,618
-
-
1,583 911,793
690,993
4,833
8,242,310 63,223,319
953,706
21,300
975,006
437,510
1,909,565
16,941,971
2,185,604
950,900
108,384,891
33,766,924
-
(28,127,860)
136,011,995
136,011,995
$ 193,102,613 :
5,075,228
-
-
-
-
33,055,162
-
38,130,390
38,130,390
$ 46,372,700
1,678,807
-
3,370,967
524,329
61,252,958
10,090,467
42,809,292
(28,475,696)
91,251,124
91,688,634
$ 155,886,959
The notes to the financial statements are an integral part of this statement.
48
Enterprise Funds
Solid
Waste Totals
Governmental
Activities -
Internal
Service
Funds
$ 6,868,533 $ 130,016,590 $ 21,463,443
694,443
27,486
4,082,681
1,440,376
552,090
2,421
195,873
7,562,976 136,119,223 21,661,737
953,706
21,300
975,006
437,510
8,663,600
16,941,971
5,556,571
1,475,229
169,637,849
76,912,553
42,809,292
(56,603,556)
265,393,509
265,831,019
$ 7,562,976 $ 402,925,248
-
16,212,542
-
-
-
(10,282,624)
5,929,918
5,929,918
$ 27,591,655
(Continued)
49
CITY OF CARLSBAD
Statement of Net Assets
Proprietary Funds (Continued)
June 30,2006
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 $437,443
Total noncurrent liabilities
Total liabilities
NET ASSETS
Business-type Activities -
LIABILITIES
Current liabilities:
Accrued liabilities
Accrued interest payable
Due to other governments
Estimated claims payable
Current portion of long-term debt
Deposits payable
Total current liabilities
Carlsbad
Municipal
Water District
$ 2,416,587
182,918
3,534,203
388,382
156,379
6,678,469
Golf
Course
$ 3,131,106 :
-
-
4,749
3,135,855
Sewer
$ 317,248
-
1,381,622
-
605,000
372,927
2,676,797
36,894,301
10,203,998
10,203,998 36,894,301
16,882,467 40,030,156
143,992
800,674
5,687,557
6,488,231
9,309,020
Invested in capital assets, net of related debt
Restricted for:
Capital assets
Unrestricted
Total net assets
125,419,615
50,725,006
75,525
$ 176,220,146
38,130,390
-
(31,787,846)
$ 6,342,544
85,912,273
57,116,004
3,549,662
$ 146,577,939
The notes to the financial statements are an integral part of this statement.
50
Enterprise Funds
Solid
Waste
$ 416,124
416,124
Total
Proprietary
Funds
$ 6,281,065
182,918
4,915,825
993,382
534,055
12,907,245
Governmental
Activities -
Internal
Service
Funds
$ 3,242,345
4,127,834
7,370,179
143,992
1,224,219
1,224,219
1,640,343
38,118,520
800,674
10,203,998
5,687,557
54,810,749
67,861,986
-
7,370,179
5,922,633
$ 5,922,633
249,462,278
107,841,010
(22,240,026)
$ 335,063,262
5,929,918
14,291,558
$ 20,221,476
51
CITY OF CARLSBAD
Statement of Revenues, Expenses and Changes in Net Assets
Proprietary Funds
For the Year Ended June 30,2006
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
Small equipment purchases
General and administrative
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Income from property and investments
Interest expense and fees
Intergovernmental
Gain on sale of property
Property taxes
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
$ 18,757,653 I
704,532
688,961
12,838
20,163,984
-
12,121,527
2,264,413
-
-
-
9,738,203
24,124,143
(3,960,159)
1,348,009
-
-
4,450
2,257,124
3,609,583
(350,576)
55,687
-
7,593,789
7,298,900
168,921,246
$ 176,220,146 5
Golf
Course Sewer
5 - $
6,707,125
93,793
-
27,078
6,827,996
2,300,281
-
2,256,075
-
-
-
13,677 3,377,370
13,677 7,933,726
(13,677) (1,105,730)
551,149 1,478,787
(2,457,101) (330,794)
-
(837)
-
(1,905,952) 1,147,156
(1,919,629) 41,426
259,528
-
3,618,992
(1,919,629) 3,919,946
8,262,173 142,657,993
5 6,342,544 $ 146,577,939
The notes to the financial statements are an integral part of this statement.
52
Enterprise Funds
Solid Waste
$
1,892,746
29,214
12,694
1,934,654
1,699,120
1,699,120
235,534
160,059
160,059
395,593
395,593
5,527,040
$ 5,922,633
Totals
$ 18,757,653
6,707,125
2,691,071
718,175
52,610
28,926,634
2,300,281
12,121,527
4,520,488
14,828,370
33,770,666
(4,844,032)
3,538,004
(2,787,895)
3,613
2,257,124
3,010,846
(1,833,186)
315,215
11,212,781
9,694,810
325,368,452
$ 335,063,262
Governmental
Activities -
Internal
Service Funds
$
11,897,287
395,225
12,292,512
1,438,534
928,615
1,951,182
22,317
6,601,857
10,942,505
1,350,007
379,655
27,878
41,516
449,049
1,799,056
633,432
(300,000)
231,089
2,363,577
17,857,899
$ 20,221,476
53
CITY OF CARLSBAD
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2006
Business-type Activities -
Cash flows from operating activities:
Receipts from customers and users
Payments to suppliers
Payments to employees
Internal activity - payments to other funds
Claims paid
Other receipts (payments)
Increase (decrease) in deposits payable
Net cash provided by operating activities
Cash flows from noncapital financing activities:
Operating subsidies and transfers to other funds
Cash flows from capital and related financing activities:
Proceeds from capital debt
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 Golf
Water District Course
$ 19,366,409 $
(17,700,854) (13,677)
(2,762,327)
(2,214,513)
-
701,799 (26,074)
8,367
(2,601,119) (39,751)
55,687 32,757,101
9,493,852
4,975,124
(15,295,143) (23,353,505)
(124,071)
(35,455) (2,457,101)
2,266,743
1,281,050 (25,810,606)
1,348,009 551,149
83,627 7,457,893
53,208,003 782,834
$ 53,291,630 $ 8,240,727 I
Sewer
$ 6,708,123
(3,664,755)
(1,586,061)
(967,976)
-
8,275
-
497,606
259,528
-
1,605,479
(4,126,167)
(575,000)
(365,482)
-
(3,461,170)
1,478,787
(1,225,249)
62,855,074
5 61,629,825
The notes to the financial statements are an integral part of this statement.
54
Enterprise Funds
Solid Waste
$ 1,830,221
(775,705)
(671,635)
(332,112)
-
75,267
-
126,036
-
-
-
-
160,059
286,095
6,582,438
$ 6,868,533
Totals
$ 27,904,753
(22,154,991)
(5,020,023)
(3,514,601)
-
759,267
8,367
(2,017,228)
33,072,316
9,493,852
6,580,603
(42,774,815)
(699,071)
(2,858,038)
2,266,743
(27,990,726)
3,538,004
6,602,366
123,428,349
$ 130,030,715
Governmental
Activities -
Internal
Service Funds
$ 11,897,286
(4,223,761)
(2,904,217)
(878,380)
(3,164,183)
224,083
-
950,828
333,432
782,747
(1,469,435)
-
-
-
(686,688)
379,655
977,227
20,486,216
$ 21,463,443
(Continued)
55
CITY OF CARLSBAD
Statement of Cash Flows
Proprietary Funds (Continued)
For the Year Ended June 30, 2006
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) increase in accrued liabilities
(Decrease) increase in accrued interest payable
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:
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
$ (3,960,159)
2,264,413
(13,677) $ (1,105,730)
2,256,075
(95,777)
(8,536)
(84,782)
162,236
(886,881)
8,367
$ (2,601,119) $
(92,795)
2,670
(26,074) (543,810)
-
29,677
(48,481)
(39,751) $ 497,606
$ 6,919,001 $1,905,918
53,291,630 $ 8,240,727 $ 61,615,700
953,706
(939,581)
53,291,630 $ 8,240,727 $ 61,629,825
The notes to the financial statements are an integral part of this statement.
56
Enterprise Funds Governmental
Solid Waste Totals
$ 235,534 $ (4,844,032)
4,520,488
(29,167) (217,739)
(5,866)
(80,331) (734,997)
162,236
(857,204)
-
(40,114)
$ 126,036 $ (2,017,228)
$ - $ 8,824,919
Activities -
Internal
Service Funds
$ 1,350,007
1,438,534
(1,170)
(25,238)
(319,034)
-
-
(1,492,271)
-
$ 950,828
$ 231,089
$ 6,868,533 $ 130,016,590 $ 21,463,443
953,706
(939,581)
$ 6,868,533 $ 130,030,715 $ 21,463,443
57
CITY OF CARLSBAD
Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2006
ASSETS
Current assets:
Cash and investments $ 24,359,656
Other receivables 257,823
Total current assets 24,617,479
Restricted assets:
Cash and investments 6,891,655
Total assets $ 31,509,134
LIABILITIES
Accrued liabilities $ 197,587
Deposits held for others 31,311,547
Total liabilities $ 31,509.134
The notes to the financial statements are an integral part of this statement.
58
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, the Carlsbad Public Financing
Authority 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 Activities) 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.
59
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, as long as the expenditure reflects a near-term cash outflow. Principal and interest on long-term
debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for
payments to be made early in the following year.
Revenues that are accrued generally include real property taxes, sales tax, transient occupancy taxes, franchise taxes,
vehicle license fees, highway users tax, interest, and some state and federal grants.
Real property taxes are levied on October 15 against property owners of record on January 1 of that year. The taxes are
due in two installments, on November 1 and February 1, and become delinquent after December 10 and April 10,
respectively. Tax liens attach annually as of 12:01 a.m. on the first day of January in the fiscal year for which the taxes are
levied. Under the provisions of NCGA Interpretation 3, property tax revenue is recognized in the fiscal year for which the
taxes have been levied, provided it is collected within 60 days of the end of the fiscal year.
Fiduciary fund types are custodial in nature (assets equal liabilities) and do not involve measurement of results of
operations. Fiduciary fund assets and liabilities are accounted for on the 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 Assessment and Other Districts capital project funds are used to account for capital projects financed by the
issuance of assessment and community facility district bonds.
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.
The Rancho Santa Fe Road Project capital project fund is used to account for the amounts paid by developers and costs
for the construction and improvements related to Rancho Santa Fe Road .
60
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 funds are 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
new municipal golf course.
The Sewer enterprise funds are used to account for the operation, maintenance, and capital facility financing of the City's
sewer system.
The Solid Waste enterprise funds are 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, risk management and
workers' compensation services provided to other departments or agencies of the City.
The Agency funds account for assets held by the City for other funds, governments or individuals. These funds include
contractors' deposits for future development, miscellaneous deposits, as well as debt service transactions on assessment
district bonds for which the City is not obligated.
Financial Accounting Standards Board (FASB) statements and interpretations 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. An
exception to this general rule are the 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.
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.
61
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, 2006, 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.
62
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 has capitalized all general infrastructure assets acquired or constructed in compliance with GASB 34 as of June
30, 2006. In addition the land upon which the streets and roads are constructed (right-of-way) has also been valued and
capitalized as of June 30, 2006.
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.
Interfund Transactions
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.
Receivables and payables
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, 2006, the ambulance billing receivable allowance is equal to
40% of outstanding billings at June 30, 2006, and the trade and false alarm receivable allowance is equal to the total of all
outstanding receivables that are over 90 days past due plus 30% of all remaining balances. The only exception to these
rules are receivables that were subsequently paid or were known to be collectible at year-end, were not reserved for at June
30, 2006.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies
are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal
budgetary integration in the governmental funds. Unexpended and unencumbered 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.
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. The City first applies restricted resources when an expense is incurred for purposes
for which both restricted and unrestricted net assets are available.
63
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. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits
Other Than Pensions.
• GASB Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Infra-Equity Transfers
of Assets and Future Revenues.
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.
64
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 Fund, 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 five types of risk: custodial (investments and cash
deposits); concentration; default; event; and market or interest rate risk.
The City of Carlsbad and its agencies invest funds in an external investment pool known as the Local Area Investment
Fund (LAIF). Management and oversight are the responsibility of the California State Treasurer. As of June 30, 2006, the
LAIF performance report shows a fair value factor of .998185821. The City of Carlsbad's position in the LAIF pool is
calculated as a percentage of the fair value of the City's shares to the fair value of the pooled shares.
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.
65
CITY OF CARLSBAD
Notes to the Financial Statements
Note 3. Deposit and Investment Risk (Continued)
As of June 30, 2006 the City had the following investments in its portfolio:
Fair Market
Treasurer's Pool investments Value
U.S. agencies:
Federal Home Loan Mortgage Corporation $ 154,006,457
Federal Home Loan Bank 173,993,340
Federal National Mortgage Association 101,572,403
Federal Farm Credit Bank 5,873,731
Subtotal U.S. agencies 435,445,931
Corporate notes:
Medium-term corporate notes 51,334,928
Commercial paper -
Subtotal corporate notes 51,334,928
LAIF 16,736,038
Cash accounts 2,742,727
Total Treasurer's Pool 506,259,624
Investments held outside the Treasurer's Pool
Debt Service funds/bond proceeds 28,657,669
Other deposits 534,030
Petty cash funds 6,315
Total cash and investments $ 535,457,638
Statement of Net Assets, Primary Government
Cash and investments $ 502,593,121
Restricted cash and investments 1,613,206
Statement of Fiduciary Assets and Liabilities, Agency Funds
Cash and investments 24,359,656
Restricted cash and investments 6,891,655
Total cash and investments $ 535,457,638
%of
Total
Modified
Duration
30.4%
34.4%
20.1%
1.2%
86.1%
2.478
1.837
2.246
2.123
2.163
10.1%
0.0%
10.1%
3.3%
0.5%
100.0%
1.864
-
1.864
-
-
2.022
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 pooled investments, which are pooled into funds collateralized with
U.S. government securities (guaranteed) or U.S. agency securities (government sponsored). The California Code
authorizes 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 Federal Deposit Insurance Corporation
(FDIC) insured.
66
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, 2006, approximately 10% 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, 2006, 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 principal when due. 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, 2006,
approximately 2% 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, 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 external 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, 2006, the average maturity
of the LAIF investments was 142 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, 2006, the portfolio had a 1.9% 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 are equal to an amount that is not less than two-thirds of the current fiscal year's
operating budget. The City met those requirements as follows:
1. As of June 30, 2006, the modified duration of the portfolio was 2.02. Modified duration is a prospective measure
of the sensitivity of a fixed-income security's value to changes in market rates of interest. Modified duration
identifies the potential gain/loss in value before it actually occurs. For example, 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 security's value will
result. Investments with modified durations of one to three are considered to be relatively conservative.
2. As of June 30, 2006, maturities within one year exceeded the required minimum of $106,000,000 (two-thirds of
current year operating budget for the City per the 2005-06 Operating Budget adopted by the City Council).
67
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, 2006:
Due to Due from
Other Funds Other Funds
Capital Project Funds:
Grants and Other Funds - IDA $ 136,933 $
Grants and Other Funds - Traffic Congestion 123,468
Rancho Santa Fe Road Project - 136,933
Sales Tax/TransNet - Local - 123,468
Totals $ 260,401 $ 260,401
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, 2006:
Advances From Advances To Amount
General Fund Redevelopment Debt Service Funds $ 14,232,552
General Fund Financing Districts Special Revenue Funds 630,751
GeneralFund Enterprise Funds:
Golf Course 36,894,301 (I)
Solid Waste 1,224,219
Special Revenue Funds: Capital Project Funds:
Gas Tax Bridge and Thoroughfare Districts 3,643,344
Sales Tax/TransNet 1,000,000
Capital Projects Funds: Capital Project Funds:
General Capital Construction Park Development 2,430,000
Planned Ixical Drainage Facilities 420,021
$ 60,475,188
Advances to and from other funds are primarily long term advances used to fund capital projects in advance of related
revenues.
(1) The advance between the General Fund and the Golf Course Fund is estimated to be repaid over a 35-40 year period
through bond proceeds, possible disposition of golf course assets, and residual operating income from golf course
operations.
68
CITY OF CARLSBAD
Notes to the Financial Statements
Note 6. Capital Assets
Capital asset activity was as follows for the year ended June 30, 2006:
Governmental activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets,
not being depreciated
Capital assets, being depreciated:
Buildings
Improvements
Machinery and equipment
Infrastructure
Total capital assets,
being depreciated
Less accumulated depreciation for:
Buildings
Improvements
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total capital assets
being depreciated, net
Governmental activities
capital assets, net
Balance at Balance at
July 1,2005 Increases Decreases June 30,2006
$ 124,136,131 $ 4,446,800 $ - $ 128,582,931
72,209,568 46,938,677 (17,777,892) 101,370,353
196,345,699
69,203,460
17,629,241
21,890,701
402,314,322
51,385,477
273,175
10,962,982
2,515,666
7,486,577
(17,777,892)
(318,539)
(1,332,949)
(72,794)
229,953,284
69,476,635
28,273,684
23,073,418
409,728,105
511,037,724 21,238,400 (1,724,282) 530,551,842
(14,314,396)
(3,264,087)
(13,268,461)
(98,047,170)
(128,894,114)
382,143,610
(1,427,900)
(737,053)
(2,056,057)
(10,694,496)
(14,915,506)
6,322,894
72,999
786,612
72,794
932,405
(791,877)
(15,742,296)
(3,928,141)
(14,537,906)
(108,668,872)
(142,877,215)
387,674,627
$ 578,489,309 $ 57,708,371 $ (18,569,769) $ 617,627,911
69
CITY OF CARLSBAD
Notes to the Financial Statements
Note 6. Capital Assets (Continued)
Business-type activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being
depreciated
Capital assets, being depreciated:
Buildings
Improvements, other than buildings
Machinery and equipment
Infrastructure
Sewage treatment facility
Total capital assets, being
depreciated
Balance at
July 1,2005
$ 8,663,600
40,328,185
48,991,785
16,208,704
5,556,571
1,535,443
159,709,825
40,318,093
223,328,636
Increases
$ - :
42,098,354
42,098,354
740,028
-
81,267
9,928,024
2,491,199
13,240,518
Balance at
Decreases June 30, 2006
$ - $ 8,663,600
(5,513,986) 76,912,553
(5,513,986) 85,576,153
(6,761) 16,941,971
5,556,571
(141,481) 1,475,229
169,637,849
42,809,292
(148,242) 236,420,912
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
capita] assets, net
(886,708)
(2,136,973)
(1,260,623)
(36,497,731)
(11,360,409)
(52,142,444)
171,186,192
(340,196)
(148,770)
(64,018)
(3,167,209)
(800,295)
(4,520,488)
8,720,030
(1,226,904)
(2,285,743)
59,376 (1,265,265)
(39,664,940)
(12,160,704)
59,376 (56,603,556)
(88,866) 179,817,356
$ 220,177,977 $ 50,818,384 $ (5,602,852) $ 265,393,509
70
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 $ 538,458
Community development 202,621
Public safety 454,287
Community services 1,440,344
Public works 10,841,262
Capital assets held by the internal service funds
(charged to various functions based on
their usage of the assets) 1,438,534
Total depreciation expense - governmental activities $ 14,915,506
Business-type activities:
Sewer $ 2,256,075
Water 2,264,413
Total depreciation expense - business-type activities $ 4,520,488
71
CITY OF CARLSBAD
Notes to the Financial Statements
Note 7.Accrued Liabilities
Accrued liabilities were as follows at June 30, 2006:
Governmental activities:
General Fund
Assessment and Other
Districts
Community Facilities
District No. 1
General Capital Construction
Public Facilities
Construction
Rancho Santa Fe Road Project
Other Governmental Funds
Subtotals
* Internal Service Funds
* Retentions Payable
Vendors and
Miscellaneous
$ 1,615,001
4,424
20,243
689,054
698,747
1,935,741
1,016,194
5,979,404
225,315
452,249
Salaries and IFD Refuse
Benefits Payable Disposal
$2,646,123 $ 81,746 $
-
.
-
_
.
66,011
2,712,134 81,746
3,017,030
_
Total
$ 4,342,870
4,424
20,243
689,054
698,747
1,935,741
1,082,205
8,773,284
3,242,345
452,249
Total governmental
activities
Business-type activities:
Enterprise funds:
Carlsbad Municipal Water
District
Golf Course
Sewer
Solid Waste
$ 6,656,968 $5,729,164 $ 81,746 $$ 12,467,878
$ 1,966,289
3,131,106
242,452
100,838
$ 450,298 $
-
74,796
44,814
$ - $ 2,416,587
3,131,106
317,248
270,472 416,124
Total business-type
activities $ 5,440,685 $ 569,908 $$ 270,472 $ 6,281,065
* Internal service funds and retentions payable have been included with governmental activities on the Government-wide
Statement of Net Assets.
72
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, 2006:
Governmental activities:
Bonds
Certificates of participation
Obligations under capital leases
Total governmental
activities
Business-type activities:
Installment purchase agreement
Loan payable
Less deferred charges
Total business type activities
Entity-wide total
Principal
Balance at
June 30, 2005 Additions
$ 12,460,000 $
2,740,000
7,366
15,207,366
7,305,000
1,222,599 9,493,852
8,527,599 9,493,852
(497,365)
8,030,234 9,493,852
$23,237,600 $9,493,852
Reductions
$ 395,000
635,000
6,663
1,036,663
575,000
124,071
699,071
(59,922)
639,149
$1,675,812
Principal
Balance at
June 30, 2006
$ 12,065,000
2,105,000
703
14,170,703
6,730,000
10,592,380
17,322,380
(437,443)
16,884,937
$31,055,640
Due Within
One Year
$ 420,000
670,000
703
1,090,703
605,000
388,382
993,382
(60,494)
932,888
$2,023,591
73
CITY OF CARLSBAD
Notes to the Financial Statements
Note 8. Long-term Debt (Continued)
Long-term debt at June 30, 2006 is comprised of the following issues:
Governmental long-term debt
Balance at
June 30, 2006
1993 Carlsbad Housing and Redevelopment Commission Tax Allocation
Bonds, principal due in amounts ranging from $420,000 to $1,000,000 on
September 1 of each year through 2023. 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.
Payable from redevelopment property tax increment revenues.
1997 Hosp Grove Refunding Certificates of Participation, principal due in
amounts ranging from $670,000 to $735,000 on August 1 of each year
through 2008, interest payable on August 1 and February 1 at rates varying
from 4.50% to 4.70% per annum. Payable from the General Fund, with a
required reserve amount of $659,500.
The City has entered into one office equipment lease-purchase
agreement. As of June 30, 2006, the City has purchased copier equipment
totaling $5,926. The lease term is for 60 months, with an interest rate
of 16.82%. This lease expires in November 2006. Payable from General
Fund revenues.
Sub-total governmental long-term debt
Less current portion
Total long-term portion of governmental debt
$ 12,065,000
2,105,000
703
14,170,703
1,090,703
$ 13,080,000
74
CITY OF CARLSBAD
Notes to the Financial Statements
Note 8. Long-term Debt (Continued)
Business-type long-term debt
Balance at
June 30, 2006
1997 Encina Financing Joint Powers Authority (EFJPA) Installment Purchase
Agreement, principal due in varying amounts ranging from $605,000 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 4.90% to 5.50% per
annum. The required reserve amount is $937,169. Payable from sewer
user fees.6,730,000
1993 Carlsbad Municipal Water District loan agreement with the State
Water Resources Control Board. Principal is due in varying amounts
ranging from $123,222 to $151,558 on November 30 of each year through
2013, interest payable on November 30 of each year at 2.90% per annum.
Payable from recycled water user fees.
2005 Carlsbad Municipal Water District loan agreement with the State
Water Resources Control Board. Principal is due in varying amounts
ranging from $260,712 to $627,584 on June 1 of each year through
2025, interest payable on June 1 of each year at 2.50% per annum.
Payable from recycled water user fees.
Subtotal business-type long-term debt
Less unamortized discounts, issuance costs and deferred charges
Less current portion
Total long-term portion of business-type debt
1,098,528
9,493,852
17,322,380
437,443
993,382
15,891,555
The aggregate maturities of long-term debt are as follows:
Governmental Activities Business-type Activities
Year ended June 30:
2007
2008
2009
2010
2011
2012-2016
2017-2021
2022-2025
Principal
1,090,703
1,140,000
1,200,000
490,000
515,000
3,005,000
3,880,000
2,850,000
$ 14,170,703 :
Interest
706,090
652,310
595,182
552,840
526,459
2,186,569
1,286,898
231,875
$ 6,738,223
Principal
993,382
1,183,817
1,232,937
1,277,427
1,327,294
6,180,075
2,707,469
2,419,979
$ 17,322,380 :
Interest
743,363
554,490
507,031
458,380
406,925
1,201,798
508,899
153,117
$ 4,534,003
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.
75
CITY OF CARLSBAD
Notes to the Financial Statements
Note 9. Rate Covenants (Continued)
The 2005 Carlsbad Municipal Water District loan agreement with the State Water Resources Control Board requires that
the District set its charges for services and rates for fees each year at rates sufficient to produce net revenues (after paying
the operating and maintenance expenses of the District, excluding depreciation) of at least 1.0 times debt service for that
year.
Note 10. Debt without Government Commitment
Special assessment bonds
As of June 30, 2006, the City has six series of Assessment District Bonds outstanding in the amount of $73,621,457.
These bonds were issued under the provisions of the Improvement Bond Acts of 1911 and 1915 and were used to finance
public infrastructure improvement projects. The City collects assessments to pay the bond debt. These monies are
accounted for in the Assessment Districts Agency funds.
Community Facilities District No. 3
As of June 30, 2006, the City has Community Facilities District No. 3 (CFD #3) Bonds outstanding in the amount of
$11,490,000. These bonds were issued under the provisions of the Mello-Roos Community Facilities Act of 1982 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 CFD #3 Agency fund.
Mortgage revenue bonds
Multi-Family Housing Revenue Bonds are issued to provide construction and permanent financing to developers of multi-
family residential rental projects located in the City which will be partially occupied by persons of low or moderate
income. The total amount of mortgage revenue bonds outstanding as of June 30, 2006 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.
76
77
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, 2006:
Governmental Funds
Fund Balances
Redevelopment Assessment Community
Debt Service and Other Facilities
General Funds Districts District No. 1
Reserved for:
Loans receivable
Inventory
Prepaid items
Debt service
Advances to other other funds*
Flower fields preservation
Library endowment
Low and moderate income housing
Encumbrances
Totals
Unreserved:
Designated for approved capital
projects
Designated for continuing
appropriations
Totals
Undesignated
Total fund balances
124,417
19,568
40,414,255
4,573,068
45,131,308
13,974,339
13,974,339
7,936
7,936
1,320,833
25,139,871
47,519,083 (12,573,446)
99,796
99,796
44,897,160
4,544,585
26,460,704 49,441,745
$106,624,730 $(12,573,446) $26,468,640 $49,541,541
* Only reflects that portion of fund balance invested in interfund advances (the General Fund amount is net of $12,567,568
in deferred revenue for measurable but unavailable interest earned on such advances).
78
CITY OF CARLSBAD
Notes to the Financial Statements
Note 11. Fund Balances (Continued)
Governmental Funds
General
Capital
Construction
$
2,850,021
2,966,448
5,816,469
Public Rancho Santa Other
Facilities Fe Road Governmental
Construction Project Funds
$ $ $ 12,988,557
332,760
659,500
4,643,344
935,000
251,000
2,142,000
926,220 2,252,258 6,945,154
926,220 2,252,258 28,897,315
Total
$ 13,112,974
19,568
332,760
659,500
47,907,620
935,000
251,000
2,142,000
17,770,880
83,131,302
7,379,062 3,866,109 20,422,496 77,885,660
16,507,666
16,507,666
30,654,934
29,878,347
37,257,409
_
4,690,584
8,556,693
_
20,273,670
40,696,166
42,734,453
115,009,062
192,894,722
108,335,024
$52,979,069 $38,183,629 $10,808,951 $112,327,934 $384,361,048
79
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 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, 2006:
Deficit Balance
Debt Service Funds:
Redevelopment Areas $ (12,573,446)
Internal Service Funds:
Risk Management (52,394)
SO
CITY OF CARLSBAD
Notes to the Financial Statements
Note 13.Interfund Transfers
Interfund transfers for the year ended June 30, 2006, consisted of the following:
Fund
Transfers
In From
Other Funds
Transfers
Out To
Other Funds
Major Funds:
General
Redevelopment Debt Service Funds
Capital Project Funds:
Assessment and Other Districts
General Capital Construction
Rancho Santa Fe Road Project
Nonmajor Governmental Funds
Enterprise Funds, Carlsbad Municipal Water District
Enterprise Funds, Sewer
Internal Service Funds
Totals
76,666 $6,033,432
1,000,000
3,861,887
600,000
136,933
7,009,367
55,687
259,528
633,432
$ 12,633,500
4,184,941
-
-
1,115,127
-
-
300,000
$ 12,633,500
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, 2006, the
unencumbered fund equity for the Risk Management Self-Insurance fund was approximately ($52,000) due to the large
increase in estimated claims payable reserves in Fiscal Year 2004-05. Although there is currently insufficient cash in the
fund to pay all existing and anticipated expenditures at June 30, 2006, additional cash will be available in the fund to cover
these claims through the rates being charged during the 2006-07 Fiscal Year. The existing deficit will also be addressed
through the rates set in the 2006-07 annual budget.
The City is a defendant in a substantial property damage claim resulting from the heavy rains that occurred in fiscal year
2005. In the opinion of the City's legal counsel, this claim is without substantial merit and should not result in a
judgement which would have a material adverse effect of the City's financial statements. However, should the other party
prevail, the City will be financially obligated. It is not possible at this time to determine the ultimate amount, if any, that
the City may be obligated for.
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.
81
CITY OF CARLSBAD
Notes to the Financial Statements
Note 14. Risk Management (Continued)
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. At June 30, 2006, the unencumbered
fund equity for the Workers' Compensation Self-Insurance fund was approximately $1,212,000.
The estimated claims payable reported at June 30, 2006 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. Settled claims have not exceeded insurance coverage
in any of the past three fiscal years. Changes in the estimated claims payable amounts in Fiscal Years 2005 and 2006 for
the three internal service funds are as follows:
Claims
Beginning
Balance
Expense and
Changes in
Estimates
Claim
Payments
Ending
Balance
Self-Insured Benefits fund:
2004-2005
2005-2006
77,863
78,486
403,965
396,579
(403,342)
(397,199)
78,486
77,866
Risk Management fund:
2004-2005
2005-2006
620,678
1,927,843
1,537,137
(551,681)
(229,972)
(624,142)
1,927,843
752,020
Workers' Compensation fund:
2004-2005
2005-2006
2,908,890
3,613,777
1,838,796
934,484
(1,133,909)
(1,250,313)
3,613,777
3,297,948
Note 15. Joint Ventures
Encina Water Pollution Control Facilities
The Encina Water Pollution Control Facilities (the Facilities) are sewer facilities 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
facilities. It is responsible for the management, maintenance and operations of the joint system. Ownership interests in
the facilities are determined by joint agreement at the time the assets are acquired. As of June 30, 2006, the Cities and
Districts have the following approximate ownership interest:
City of Carlsbad
City of Vista
Leucadia Wastewater District
Vallecitos Water District
Buena Sanitation District
City of Encinitas
25%
22%
20%
20%
8%
5%
EWA's financial statements for the fiscal year ended June 30, 2005 (the latest available) incorporated the provisions of
GASB 34 and reflect the following:
Total assets
Total liabilities
Net assets
66,487,445
3,649,739
$ 62,837,706
The EWA does not recognize net income or loss. Net operating expenditures in excess of users' assessments are treated as
accounts receivable on EWA's books and charged to users' accounts in the following year. Conversely, users'
82
CITY OF CARLSBAD
Notes to the Financial Statements
Note 15. Joint Ventures (Continued)
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 income for the EWA totaled $12,088 in Fiscal Year 2005. The
financial statements of the EWA can be obtained at 6200 Avenida Encinas, Carlsbad, California 92011 or at
www.encinajpa.com.
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, 2006:
Agreement
Member Balance
City of Carlsbad $ 6,730,000
Leucadia Wastewater District 4,590,000
$ 11,320,000
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 capital 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 8% (9% for safety employees) of their annual covered salary. The City makes 7%
of the required 8% contributions for non-safety employess, and 8% of the required 9% contributions for the City's safety
employees. The City is required to contribute at an actuarially determined rate. For the year ended June 30, 2006, the
employer contribution rate for the City of Carlsbad (as a percentage of covered payroll) was 27.927% for safety employees
83
CITY OF CARLSBAD
Notes to the Financial Statements
Note 16. Retirement Plan (Continued)
and 20.869% for miscellaneous employees. The contribution requirements of plan members and the City are established
by PERS.
In October 2006, the City was notified by PERS that the employer contribution rate for the City of Carlsbad (as a
percentage of payroll) will be 28.462% for safety employees and 20.478% for miscellaneous employees for the fiscal year
ended June 30, 2008.
Annual pension cost
For Fiscal Year 2005-06, the City's annual pension cost (employer contribution) of $4,152,149 for safety and $5,667,848
for miscellaneous to PERS was equal to the City's required and actual contributions. For Fiscal Year 2005-06, the
member contributions paid by the City and its employees were $1,377,883 for safety and $2,254,137 for miscellaneous.
The required contribution was determined as part of the June 30, 2003, actuarial valuation using the entry age normal
actuarial cost method. The actuarial assumptions included (a) 7.75% investment rate of return (net of administrative
expenses), (b) projected annual salary increases of 3.25% to 14.45% depending on age, service and type of employment,
(c) 3.0% inflation factor, (d) payroll growth of 3.25%, and (e) individual salary growth that utilizes a merit scale varying
by duration of employment coupled with an assumed annual inflation growth of 3.0% and an annual production growth of
0.25%. Initial unfunded liabilities are amortized over a closed period that depends on the plan's date of entry into
CalPERS. Subsequent plan amendments are amortized as a level percentage of pay over a closed 20-year period. Gains
and losses that occur in the operation of the plan are amortized over a rolling period, which results in an amortization of
about 6% of unamortized gains and losses each year. If the plan's accrued liability exceeds the actuarial value of plan
assets, then the amortization payment on the total unfunded liability may not be lower than the payment calculated over a
30 year amortization period.
Three-year trend information for PERS (safety)
Fiscal Year
Ending
Annual Pension
Cost (Employer
Contribution)
Percentage of
APC Contributed
Net Pension
Obligation
6/30/04
6/30/05
6/30/06
1,704,651
3,917,550
4,152,149
Three-year trend information for PERS (miscellaneous)
100%
100%
100%
Fiscal Year
Ending
Annual Pension
Cost (Employer
Contribution)
Percentage of
APC Contributed
Net Pension
Obligation
6/30/04
6/30/05
6/30/06
579,190
3,112,596
5,667,848
100%
100%
100%
84
CITY OF CARLSBAD
Notes to the Financial Statements
Note 16. Retirement Plan (Continued)
Required supplementary information
Funded status of plan (safety)
Valuation
Date
6/30/03
6/30/04
6/30/05
Entry Age
Normal
Accrued
Liability
$ 99,827,853
$ 110,306,847
$ 123,237,518
Actuarial
Value
of Assets
$ 85,963,105
$ 92,529,369
$ 102,021,173
Unfunded
Liability/
(Excess
Assets)
$ 13,864,748
$ 17,777,478
$ 21,216,345
Funded
Status
86.1%
83.9%
82.8%
Annual
Covered
Payroll
$ 12,709,908
$ 13,382,181
$ 14,305,227
UAAL
Asa%
of Payroll
109.1%
132.8%
148.3%
Funded status of plan (miscellaneous)
Valuation
Date
Entry Age
Normal
Accrued
Liability
Actuarial
Value
of Assets
Unfunded
Liability/
(Excess
Assets)
Funded
Status
Annual
Covered
Payroll
UAAL
As a%
of Payroll
6/30/03 $ 121,455,280 $ 98,339,566 $ 23,115,714 81.0% $ 25,059,422 92.2%
6/30/04 $ 132,074,893 $ 105,423,856 $ 26,651,037 79.8% $ 26,476,671 100.7%
6/30/05 $ 149,626,877 $ 117,576,007 $ 32,050,870 78.6% $ 26,688,294 120.1%
Note 17.Postretirement Healthcare
The majority of City of Carlsbad employees are under the City of Carlsbad defined contribution plan. The Carlsbad
Municipal Water District has a defined benefit plan.
Carlsbad Municipal Water District
The first plan is for active and retired employees that were employed with the Carlsbad Municipal Water District
(CMWD) at the time the District was acquired by the City. Per Resolution 614, all former employees of CMWD
(including dependents) are eligible for postretirement health care benefits if they voluntarily retire after the age of 50, with
no less than five years of service and whose age, combined with years of service, equals 70 or more. There are
approximately eleven active and thirteen retired plan members as of June 30, 2006.
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. This plan is
administered by the Association of California Water Agencies (ACWA). Expenditures were approximately $103,000 for
post-retirement health care costs during Fiscal Year 2005-06. Based on an actuarial valuation performed as of June 30,
2006, the District's liability for the current and past service costs of these benefits is approximately $2,821,000.
City of Carlsbad
City of Carlsbad retirees are eligible for a postretirement healthcare subsidy. This plan is administered by the Public
Employees Retirement System (PERS). There are approximately 630 active and 93 retired plan members as of June 30,
2006. Surviving spouses of eligible retirees are eligible for the City subsidy. Surviving spouses/domestic partners of
deceased active members are eligible for the City subsidy only if the employee had attained age 50 with five years of
service.
85
CITY OF CARLSBAD
Notes to the Financial Statements
Note 17. Postretirement Healthcare (Continued)
The City pays a monthly subsidy per eligible employee/retiree regardless of coverage elected:
Calendar year 2006 $64.60
Calendar year 2007 $80.80
Calendar year 2008 $97.90
Thereafter, the subsidy is adjusted annually to reflect changes in the medical component of the Consumer Price Index.
Expenditures for postretirement health care benefits are funded on a pay-as-you-go basis. Expenditures were
approximately $63,000 for City subsidy payments during Fiscal Year 2005-06. Based on an actuarial valuation
performed as of June 30, 2006, the City's liability for the current and past service costs of these benefits is approximately
$7,771,000.
The GASB recently issued Statement No. 45 to address the accounting and disclosure treatment for this type of plan.
Effective with the fiscal year ending June 30, 2008, the City will be required to recognize postretirement health care costs
on an accrual basis over a period approximating the employees' years of service, and to provide information about
actuarial liabilities associated with these benefits, and whether and to what extent progress is being made in funding the
plan.
Note 18. Commitments and Contingencies
Operating lease
In June 1988, the Carlsbad Redevelopment Agency entered into an agreement to lease a parking lot on State Street from a
private party. The lease requires monthly rental payments, adjusted annually based upon an increase in the consumer price
index, not to exceed 6% of the previous year's rents, and re-adjusted in years 10 and 15 based upon market rental values,
through August 2007. Current fiscal year lease payments totaled $88,720.
Minimum future rental payments under the operating lease as of June 30, 2006 are:
2007 94,044
2008 15,674
Total minimum future rental payments $ 109,718
Water purchase agreements
On March 25, 1991, the Carlsbad Municipal Water District (CMWD) entered into a twenty year agreement with the
Leucadia County Water District, to purchase recycled water to be used primarily for irrigation at the La Costa Resort &
Spa golf course, and for other appropriate uses within the CMWD's boundaries. CMWD agreed to purchase of minimum
of 394 acre feet of recycled water per fiscal year, at a basic price of retail potable water charged to residential users within
the CMWD boundary. The current cost is $688.25 per acre foot or a minimum of $271,170.50 per fiscal year, regardless
of the actual amount used.
On August 5, 2003, CMWD entered into a twenty-two year agreement with the Vallecitos Water District, to purchase
three million gallons per day (3,360 acre feet) of recycled water for uses throughout CMWD's boundaries. The agreement
stipulates that CMWD pay for the actual operating costs of the Mahr Reservoir, which produces the water, since CMWD
is the only customer of the water produced. The estimated operating costs for the period ended June 30, 2006 is $640,000.
86
CITY OF CARLSBAD
Notes to the Financial Statements
Note 19. Change in Accounting Principle
Effective July 1, 2005, the City capitalized all general infrastructure assets acquired prior to July 1, 2001 in the Statement
of Net Assets, in accordance with GASB 34. The cumulative effect of this change in accounting principle upon the
beginning net assets balance of governmental activities is as follows:
Governmental
Activities
Net assets at July 1, 2005 $ 738,099,131
Capitalization of all general
infrastructure assets acquired
prior to July 1, 2001 221,709.779
Net assets at July 1, 2005, as restated $ 959.808.910
87
88
SUPPLEMENTARY INFORMATION
89
CITY OF CARLSBAD
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2006
Special Revenue Funds
ASSETS
Cash and investments
Receivables:
Taxes
Other
Accounts, net
Affordable
Housing
$ 11,209,014
Community
Development
Block Grant
$ 18,542
Donations and
Endowments
$ 1,734,312
10,175
Financing
Districts
$ 2,697,640
11,015
9,494
Gas
Tax
$ 5,711,247
Due from other funds
Due from other governments
Prepaid items
Restricted assets, cash and investments
Loan receivables
Advances to other funds
Total assets
LIABILITIES AND FUND BALANCES
295,407
10,001,933
16,252
224,404
4,643,344
21,506,354 $ 259,198 $ 1,744,487 $2,718,149 $10,354,591
Liabilities:
Accrued liabilities
Due to other funds
Deposits payable
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
12,677 $ 34,794 $ 21,753 $ 92,068 $ 6,934
630,751
12,677
10,001,933
34,794 21,753 722,819
224,404
6,934
4,643,344
1,932,000
25,810
9,533,934
21,493,677
$ 21,506,354
108,956
(108,956)
224,404
$ 259,198
935,000
251,000
21,431
172,401
342,902
1,722,734
$ 1,744,487
131,506
1,863,824
1,995,330
$2,718,149
364,450
1,269,574
4,070,289
10,347,657
$ 10,354,591
90
Special Revenue Funds
Low and Other
Habitat and Moderate Special
Agricultural Income Revenue
Management Housing Funds
$ 7,041,515 $ 3,163,802 $1,210,814
37,222
368
-
2,762,220
$ 7,041,515 $ 5,963,612 $1,210,814
Police
Grants and Section 8 Tyler
Asset Rental Court
Forfeiture Assistance Apartments
$ 715,830 $ 92,767 $1,016,066
12,703
332,760
-
$ 715,830 $ 438,230 $ 1,016,066
Totals
$ 34,611,549
37,222
11,383
32,372
311,659
332,760
12,988,557
4,643,344
$ 52,968,846
$ - $ 3,854 $ 7,488
-
3,854 7,488
2,762,220
210,000
4,669 5,739 4,762
12,684 - 209
7,024,162 2,981,799 1,198,355
7,041,515 5,959,758 1,203,326
$ 7,041,515 $ 5,963,612 $1,210,814
$ 27,831 $ 26,233 $
42,800 21,724
27,831 69,033 21,724
332,760
53,553 2,175
50,901
583,545 34,262 994,342
687,999 369,197 994,342
$ 715,830 $ 438,230 $ 1,016,066
$ 233,632
64,524
630,751
928,907
12,988,557
332,760
4,643,344
935,000
251,000
2,142,000
723,051
1,269,574
4,306,484
24,448,169
52,039,939
$ 52,968,846
(Continued)
91
CITY OF CARLSBAD
Combining Balance Sheet
Nonmajor Governmental Funds (Continued)
June 30,2006
ASSETS
Cash and investments
Debt Service
Fund
Hosp Grove
COPs
$ 876,778
Capital Project Funds
Bridge and
Thoroughfare
Districts
$ 9,373,847
Grants
and Other
Funds
$ 188,859
Infrastructure
Replacement
$ 21,744,498
Park
Development
$ 6,004,845
Receivables:
Taxes
Other
Accounts, net
Due from other funds
Due from other governments
Prepaid items
Restricted assets, cash and investments
Loan receivables
Advances to other funds
15,684
659,500
266,281
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accrued liabilities
Due to other funds
Deposits payable
Advances from other funds
Deferred revenue
Total liabilities
$ 1,551,962 $ 9,373,847 :
S - $ 798 :
3,643,344
3,644,142
S 455,140
$ 177,579
260,401
437,980
$21,744,498 $6,004,845
$ 18,330 $ 1,047
2,430,000
18,330 2,431,047
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
659,500
21,490 464,867 1,441,725 974,443
41,358
851,104
1,551,962
$ 1,551,962
4,901,391
806,824
5,729,705
$ 9,373,847
(447,707)
17,160
$ 455,140
2,401,556
17,882,887
21,726,168
$ 21,744,498
2,344,866
254,489
3,573,798
$ 6,004,845
92
Capital Project Funds
Planned
Local
Drainage
Facilities
$ 9,680,624
_
76,714
-
-
-
-
-
-
-
$ 9,757,338
Traffic
Redevelopment Sales Tax/ Impact
Agency TransNet Projects
$ 930,122 $ 8,148,844 $ 10,805,084
_
.
9,651
123,468
68,525
_
,
.
.
$ 939,773 $ 8,340,837 $ 10,805,084
Totals
$ 66,876,723
_
76,714
9,651
123,468
334,806
-
-
-
-
$ 67,421,362
Total Other
Governmental
Funds
$ 102,365,050
37,222
103,781
42,023
123,468
646,465
332,760
659,500
12,988,557
4,643,344
$ 121,942,170
$ 111,627
-
-
420,021
76,714
608,362
-
-
-
-
-
-
434,021
5,297,131
3,417,824
-
9,148,976
$ 9,757,338
$ 33,410 $ 383,254 $ 122,528
_
6,276
1,000,000
.
39,686 1,383,254 122,528
_
_
.
_
,
-
233,203 1,062,799 1,589,555
282,432 6,327,102
666,884 5,612,352 2,765,899
.
900,087 6,957,583 10,682,556
$ 939,773 $ 8,340,837 $ 10,805,084
$ 848,573
260,401
6,276
7,493,365
76,714
8,685,329
-
-
-
-
6,222,103
19,152,922
15,925,828
17,435,180
58,736,033
$ 67,421,362
$ 1,082,205
260,401
70,800
8,124,116
76,714
9,614,236
12,988,557
332,760
659,500
4,643,344
935,000
251,000
2,142,000
6,945,154
'20,422,496
20,273,670
42,734,453
112,327,934
$ 121,942,170
93
CITY OF CARLSBAD
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2006
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
$
295,407
57,102
240,700
847,500
1,440,709
252,157
252,157
1,188,552
472,573
472,573
1,661,125
19,832,552
$21,493,677
Community
Development
Block Grant
$
1,046,363
143,195
1,189,558
249,045
243,536
492,581
696,977
(472,573)
(472,573)
224,404
$ 224,404
Donations and
Endowments
$
54,850
39,787
129,558
224,195
67,870
181,964
249,834
(25,639)
.
(25,639)
1,748,373
$ 1,722,734
Financing
Districts
$
1,989,367
62,664
28,000
6,000
2,086,031
2,281,010
144,423
2,425,433
(339,402)
-
(339,402)
2,334,732
$1,995,330
Gas
Tax
$ 1,743,693
169,708
3,735
1,917,136
2,820,665
2,820,665
(903,529)
57,839
(7,500)
50,339
(853,190)
11,200,847
$ 10,347,657
94
Special Revenue Funds
Low and
Habitat and Moderate
Agricultural Income
Management Housing
$ - $ 596,812
158,796 148,791
82,888
241,684 745,603
2,316 97,339
2,316 97,339
239,368 648,264
Other Police
Special Grants and Section 8 Tyler
Revenue Asset Rental Court
Funds Forfeiture Assistance Apartments
$<t c; <r-p - 3> 4>
32,462 158,974 6,013,874
431,118
114,926
28,610 12,624 1,577 17,788
13,257
61,072 286,524 6,028,708 448,906
28,058
163,124
5,732,312 280,377
48,983
51,124
77,041 214,248 5,732,312 280,377
(15,969) 72,276 296,396 168,529
Totals
$ 2,340,505
7,547,080
2,532,437
114,926
1,024,240
28,000
940,123
129,558
13,257
14,670,126
28,058
163,124
6,681,416
230,947
2,281,010
3,259,748
12,644,303
2,025,823
530,412
(480,073)
50,339
239,368 648,264
6,802,147 5,311,494
$7,041^515 $5,959,758
(15,969) 72,276 296,396 168,529
1,219,295 615,723 72,801 825,813
$ 1,203,326 $ 687,999 $ 369,197 $ 994,342
2,076,162
49,963,777
$ 52,039^939
(Continued)
95
CITY OF CARLSBAD
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds (Continued)
For the Year Ended June 30, 2006
Debt Service
Fund Capital Project Funds
Bridge and Grants
Hosp Grove Thoroughfare and Other Infrastructure Park
COPs Districts Funds Replacement Development
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 at beginning of year
Fund balances at end of year
1,699,046
58,197
-
_
58,197
197,491
1,273,232
540
1,471,263
9,407
-
_
1,708,453
512,908
-
24,862
537,770
109,261
1,510,100
_
1,619,361
20,312
116 1,549,158 1,457,728 216,470
635,000 ....
113,058 - ...
748,058 20,428
(689,861) 1,450,835
800,000
800,000
110,139 1,450,835
1,441,823 4,278,870
$1,551,962 $ 5,729,705
1,549,158
159,295
(565,888)
(565,888)
(406,593)
423,753
$ 17,160
1,457,728
(919,958)
4,250,000
4,250,000
3,330,042
18,396,126
$21,726,168
216,470
1,402,891
-
1,402,891
2,170,907
$ 3,573,798
96
Capital Project Funds
Planned
Local
Drainage Redevelopment
Facilities Agency
$ - $
-
21,675
-
233,658 90,993
-
740,738 20,000
-
-
974,396 132,668
-
569,654
-
-
1,263,885 232,199
_
-
1,263,885 801,853
(289,489) (669,185)
1,000,000
(69,166)
930,834
(289,489) 261,649
9,438,465 638,438
$9,148,976 $ 900,087
Sales Tax/
TransNet
$
1,060,000
732,217
-
201,165
-
-
-
-
1,993,382
7,418
-
-
-
-
4,469,661
_
-
4,477,079
(2,483,697)
428,955
-
428,955
(2,054,742)
9,012,325
$ 6,957,583
Traffic
Impact
Projects
$
-
-
235,867
-
1,154,163
-
9,458
1,399,488
3,405
-
-
-
-
506,005
-
509,410
890,078
-
890,078
9,792,478
$ 10,682,556
Totals
$
2,759,046
753,892
-
1,590,750
-
4,698,233
-
34,860
9,836,781
31,135
-
569,654
-
-
9,695,222
_
-
10,296,011
(459,230)
5,678,955
(635,054)
5,043,901
4,584,671
54,151,362
$ 58,736,033
Total Other
Governmental
Funds
$ 2,340,505
10,306,126
3,286,329
114,926
2,673,187
28,000
5,638,356
129,558
48,117
24,565,104
59,193
163,124
7,251,070
230,947
2,281,010
12,954,970
635,000
113,058
23,688,372
876,732
7,009,367
(1,115,127)
5,894,240
6,770,972
105,556,962
$ 112,327,934
97
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds
Year Ended June 30, 2006
Affordable Housing
Total revenues
Total expenditures
Net change in fund balance
Community Development Block Grant
Total revenues
Total expenditures
Net change in fund balance
Donations and Endowments
Total revenues
Total expenditures
Net change in fund balance
Financing Districts
Total revenues
Total expenditures
Net change in fund balance
Gas Tax
Total revenues
Total expenditures
Net change in fund balance
Habitat and Agricultural Management
Total revenues
Total expenditures
Net change in fund balance
Low and Moderate Income Housing
Total revenues
Total expenditures
Net change in fund balance
Budget
$ 1,570,000
438,599
1,131,401
1,080,000
1,092,916
(12,916)
202,000
585,975
(383,975)
2,111,000
3,195,031
(1,084,031)
2,069,211
7,130,358
(5,061,147)
9,669
(9,669)
698,000
134,793
563,207
Actual
Amounts
(Budgetary
Basis)
$ 1,604,481
277,967
1,326,514
1,189,558
601,537
588,021
249,340
271,265
(21,925)
2,120,569
2,556,939
(436,370)
1,995,664
3,185,115
(1,189,451)
344,308
6,985
337,323
791,418
103,078
688,340
Variance
Over
(Under)
$ 34,481
(160,632)
195,113
109,558
(491,379)
600,937
47,340
(314,710)
362,050
9,569
(638,092)
647,661
(73,547)
(3,945,243)
3,871,696
344,308
(2,684)
346,992
93,418
(31,715)
125,133
(Continued)
98
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds (Continued)
Year Ended June 30,2006
Budget
Actual Amounts
(Budgetary
Basis)
Variance
Over
(Under)
Other Special Revenue Funds
Total revenues
Total expenditures
Net change in fund balance
Police Grants and Asset Forfeiture
Total revenues
Total expenditures
Net change in fund balance
Section 8 Rental Assistance
Total revenues
Total expenditures
Net change in fund balance
Totals
Total revenues
Total expenditures
Net change in fund balance
43,000
98,712
(55,712)
269,000
318,704
(49,704)
6,008,000
5,981,340
26,660
14,050,211
18,986,097
78,631
81,803
(3,172)
297,005
267,801
29,204
6,028,708
5,734,487
294,221
14,699,682
13,086,977
35,631
(16,909)
52,540
28,005
(50,903)
78,908
20,708
(246,853)
267,561
649,471
(5,899,120)
$ (4,935,886) $ 1,612,705 $ 6,548,591
99
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Debt Service Funds
Year Fnded June 30, 2006
Budget
Actual
Amounts
(Budgetary
Basis)
Variance
Over
(Under)
Redevelopment Areas
Total revenues
Total expenditures
Net change in fund balance
2,265,000
1,914,976
2,461,851
1,898,860
196,851
(16,116)
350,024 562,991 $212,967
100
101
CITY OF CARLSBAD
Combining Statement of Net Assets
Internal Service Funds
June 30,2006
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
Total current liabilities
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Reet Self Insured
Management Benefits
$ 8,487,389 $ 3,468,849
1,449 972
195,873
8,684,711 3,469,821
13,071,542
(7,536,772)
5,534,770
5,534,770
$ 14,219,481 $ 3,469,821
$ 161,864 $ 2,754,463
77,866
161,864 2,832,329
161,864 2,832,329
5,534,770
8,522,847 637,492
$ 14,057,617 $ 637,492
Information
Technology
$ 4,217,553
4,217,553
3,141,000
(2,745,852)
395,148
395,148
$ 4,612,701
$ 246,316
246,316
246,316
395,148
3,971,237
$ 4,366,385
102
Risk Workers'
Management Compensation Total
772,698 $ 4,516,954 $ 21,463,443
2,421
195,873
772,698 4,516,954 21,661,737
16,212,542
(10,282,624)
5,929,918
5,929,918
772,698 $ 4,516,954 $ 27,591,655
73,072
752,020
6,630
3,297,948
3,242,345
4,127,834
825,092 3,304,578 7,370,179
825,092 3,304,578 7,370,179
(52,394) 1,212,376
$ (52,394) $ 1,212,376
5,929,918
14,291,558
$ 20,221,476
103
CITY OF CARLSBAD
Combining Statement of Revenues, Expenses and Changes in Net Assets
Internal Service Funds
For the Year Ended June 30,2006
Operating revenues:
Other charges for services
Miscellaneous
Total operating revenues
Operating expenses:
Depreciation
Fuel and supplies
Claims expense
Small equipment purchases
General and administrative
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Income from property and investments
I ntergo vernmental
Gain (loss) on sale of property
Total nonoperating revenues (expenses)
Fleet Self Insured
Management Benefits
$ 3,437,292 $ 848,481
15,016
3,452,308 848,481
1,276,098
928,615
735,589
-
1,443,359
3,648,072 735,589
(195,764) 112,892
188,111
-
39,516
227,627
Information
Technology
$ 4,126,816
-
4,126,816
162,436
-
-
22,317
3,936,688
4,121,441
5,375
86,996
27,878
2,000
116,874
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
31,863
333,432
231,089
596,384
13,461,233
112,892
(300,000)
(187,108)
824,600
122,249
122,249
4,244,136
$ 14,057,617 $ 637,492 $ 4,366,385
104
Risk
Management
$ 1,284,459
309,763
1,594,222
1,104,140
1,104,140
490,082
21,391
21,391
511,473
511,473
(563,867)
$ (52,394)
Workers'
Compensation
$ 2,200,239 S
70,446
2,270,685
1,215,593
117,670
1,333,263
937,422
83,157
83,157
1,020,579
300,000
1,320,579
(108,203)
$ 1,212,376 $
Totals
; 11,897,287
395,225
12,292,512
1,438,534
928,615
1,951,182
22,317
6,601,857
10,942,505
1,350,007
379,655
27,878
41,516
449,049
1,799,056
633,432
(300,000)
231,089
2,363,577
17,857,899
; 20,221,476
105
CITY OF CARLSBAD
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2006
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:
Capital contributions
Purchases of capital assets
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
$ 3,437,291 $ 848,481
(1,576,313)
(719,564)
(276,913)
(735,588)
15,016 107,507
879,517 220,400
333,432 (300,000)
(1,426,969)
(1,426,969)
188,111
(25,909) (79,600)
8,513,298 3,548,449
$ 8,487,389 $ 3,468,849
Information
Technology
$ 4,126,816
(1,858,956)
(1,886,097)
(433,030)
(51,267)
782,747
(42,466)
740,281
86,996
776,010
3,441,543
$ 4,217,553
106
Risk
Management
$ 1,284,459
(788,492)
(211,564)
(137,947)
(897,174)
31,114
(719,604)
-
Workers'
Compensation
$ 2,200,239
-
(86,992)
(30,490)
(1,531,421)
70,446
621,782
300,000
-
Total
$11,897,286
(4,223,761)
(2,904,217)
(878,380)
(3,164,183)
224,083
950,828
333,432
782,747
(1,469,435)
(686,688)
21,391
(698,213)
1,470,911
$ 772,698
83,157
1,004,939
3,512,015
$ 4,516,954
379,655
977,227
20,486,216
$21,463,443
(Continued)
107
CITY OF CARLSBAD
Combining Statement of Cash Flows
Internal Service Funds (Continued)
For the Year Ended June 30, 2006
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
(195,764) $ 112,892 $ 5,375
1,276,098
(367)
(25,238)
(175,212)
162,436
(803)
108,931
(620)
(219,078)
$ 879,517 $ 220,400 $(51,267)
$ 231,089 $
108
Risk Workers'
Management Compensation Total
490,082 $ 937,422 $ 1,350,007
1,438,534
(1,170)
(25,238)
(33,863) 188 (319,034)
(1,175,823) (315,828) (1,492,271)
(719,604) $ 621,782 $ 950,828
231,089
109
CITY OF CARLSBAD
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2006
Contractors' and Miscellaneous Deposits
ASSETS
Balance
July 1,2005 Additions Deductions
Balance
June 30, 2006
Current assets:
Cash and investments
Accrued interest
Total current assets
LIABILITIES
Accrued liabilities
Deposits held for others
Total liabilities
17,540,809
35,619
3,017,775
14,558,653
36,307,836
26,255
35,192,574
51,632
23,124,226
39,318,731
26,057,822
35,295,250
18,656,071
10,242
$ 17,576,428 $ 36,334,091 $ 35,244,206 $ 18,666,313
84,179
18,582,134
$ 17,576,428 $ 62,442,957 $ 61,353,072 $ 18.666.313
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
Accrued liabilities
Deposits held for others
Total liabilities
Balance
July 1,2005
$ 5,073,928
106,853
5,180,781
7,200,334
88,335
7,288,669
$ 12,469,450
$ 87,700
12,381,750
$ 12,469,450
Additions
$ 19,112,012
334,861
19,446,873
958,101
-
958,101
$ 20,404,974
$ 178,951
8,097,422
$ 8,276,373
Deductions
$ 18,482,355
194,133
18,676,488
1,266,780
88,335
1,355,115
$ 20,031,603
$ 153,243
7,749,759
$ 7,903,002
Balance
June 30, 2006
$ 5,703,585
247,581
5,951,166
6,891,655
-
6,891,655
$ 12,842,821
$ 113,408
12,729,413
$ 12,842,821
(Continued)
110
CITY OF CARLSBAD
Combining Statement of Changes in Assets and Liabilities
Agency Funds (Continued)
For the Year Ended June 30, 2006
Total Agency Funds
ASSETS
Current assets:
Cash and investments
Accrued interest
Total current assets
Restricted assets:
Cash and investments
Accrued interest
Total current assets
Total assets
LIABILITIES
Accrued liabilities
Deposits held for others
Total liabilities
Balance
July 1,2005
$ 22,614,737
142,472
22,757,209
7,200,334
88,335
7,288,669
$ 30,045,878
$ 3,105,475
26,940,403
$ 30,045,878
Additions
$ 55,419,848
361,116
55,780,964
958,101
-
958,101
$ 56,739,065
$ 23,303,177
47,416,153
$ 70,719,330
Deductions
$ 53,674,929
245,765
53,920,694
1,266,780
88,335
1,355,115
$ 55,275,809
$ 26,211,065
43,045,009
$ 69,256,074
Balance
June 30, 2006
$ 24,359,656
257,823
24,617,479
6,891,655
-
6,891,655
$ 31,509,134
$ 197,587
31,311,547
$ 31,509,134
111
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements
$15,495,000 -1993 Carlsbad Housing and
Redevelopment Commission Tax Allocation Bonds
Fiscal Year
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
$ 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
$ 3,453,044
Interest Due
March 1
$ 306,607
295
282
269
,058
,851
,989
256,470
242,295
227,332
211
195
177
,583
,045
,589
159,213
139,920
119
98
75
51
,576
,183
,525
,675
26,500
$ 3,135
-
,411
Total
Interest
$ 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
$ 6,588,455
Principal Due Total Annual
September 1 Debt Service
$ 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
,044,240
,041,665
,042,909
,042,840
,041,459
,038,765
,039,627
,038,915
,036,628
,037,634
,036,802
,034,134
,034,496
,032,759
,028,707
,027,200
,028,175
,026,500
$ 12,065,000 $ 18,653,455
$6,595,000 -1997 Hosp Grove Certificates of Participation
(1988 Refunding)
Fiscal Year
Interest Due
August 1
Interest Due
February 1
Total
Interest
Principal Due
August 1
Total Annual
Debt Service
2006-07
2007-08
2008-09
Totals
48,448
33,373
17,273
33,372
17,272
81,820
50,645
17,273
670,000
700,000
735,000
99,094 $50,644 $
751,820
750,645
752,273
149,738 $ 2,105,000 $ 2,254,738
112
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements (Continued)
$11,080,000 - Encina Financing Joint Powers Authority
Installment Purchase Agreement
Fiscal Year
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
Totals
Interest Due
August 1
$ 172,791
156,153
139,353
122,816
105,191
86,228
66,241
45,228
23,190
$ 917,191
Interest Due
February 1
$ 156,153
139,353
122,816
105,191
86,228
66,241
45,228
23,191
-
$ 744.401 — :
Total
Interest
$ 328,944
295,506
262,169
228,007
191,419
152,469
111,469
68,419
23,190
$ 1,661,592
Principal Due
August 1
$ 605,000
640,000
675,000
705,000
740,000
780,000
820,000
860,000
905,000
$ 6,730,000
Total Annual
Debt Service
$ 933,944
935,506
937,169
933,007
931,419
932,469
931,469
928,419
928,190
$ 8,391,592
$2,331,489 - Carlsbad Municipal Water District
State Loan for Reclaimed Water Projects
Fiscal Year
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
Interest Due
November 30
$ 31,857
28,155
24,345
20,425
16,391
12,240
7,969
2,682
Principal Due
November 30
$ 127,670
131,372
135,181
139,102
143,136
147,287
151,558
123,222
Total Annual
Debt Service
$ 159,527
159,527
159,526
159,527
159,527
159,527
159,527
125,904
Totals $ 144.064 S 1.098.528 $ 1.242.592
113
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements (Continued)
$9,493,852 - Carlsbad Municipal Water District
State Water Resources Control Board Loan
Fiscal Year
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
2024-25
Interest Due
June 1
$ 382,562
230,829
220,517
209,948
199,115
188,011
176,630
164,964
153,006
140,749
128,186
115,309
102,110
88,581
74,713
60,500
45,930
30,997
15,690
Principal Due
June 1
$ 260,712
412,445
422,756
433,325
444,158
455,262
466,644
478,310
490,268
502,524
515,087
527,965
541,164
554,693
568,560
582,774
597,344
612,277
627,584
Total Annual
Debt Service
$ 643,274
643,274
643,273
643,273
643,273
643,273
643,274
643,274
643,274
643,273
643,273
643,274
643,274
643,274
643,273
643,274
643,274
643,274
643,274
Totals 9.493.852 $12,222.199
114
STATISTICAL SECTION
CITY OF CARLSBAD
Statistical Section
This section of the City of Carlsbad's Comprehensive Annual Financial Report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures, and required supplementary information says about the City's overall financial health.
Contents Page
Financial Trends 116
These schedules contain trend information to help the reader understand how the
City's financial performance and well-being have changed over time.
Revenue Capacity 125
These schedules contain information to help the reader assess the City's most
significant local revenue source, property taxes.
Debt Capacity 130
These schedules present information to help the reader assess the affordability of
the City's current levels of outstanding debt, and the City's ability to issue
additional debt in the future.
Demographic and Economic Information 140
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the City's financial activities take
place.
Operating Information 144
These schedules contain service and infrastructure data to help the reader
understand how the information in the City's financial report relates to the
services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the
Comprehensive Annual Financial Reports for the relevant year. The City implemented GASB
Statement 34 in Fiscal Year 2001-02; schedules presenting government-wide information
include information beginning in that year.
115
CITY OF CARLSBAD
Net Assets by Component
Last Five Fiscal Years
(dollars in thousands)
2002(1)2003 2004 2005
Source: City of Carlsbad Comprehensive Annual Financial Reports.
(1) The City first began calculating net asset balances in Fiscal Year 2001 -02.
(2) The large increase in 2005-06 reflects the addition of infrastructure assets as per OASB34 requirements.
(3) Net Assets Restricted for Other Purposes increased significantly in Fiscal Years 2003-04 and 2004-05 to set aside funds
for future golf course construction ($15 million in 2003-04 and an additional $15.3 million in 2004-05).
(4) The large decrease in 2005-06 reflects an additional $30.3 million advance received from the General Fund.
2006
Governmental activities
Invested in capital assets, net of related debt $ 198,808 $ 248,219 $
Restricted for:
Capital assets 130,545 139,760
Affordable, low and moderate income housing 16,652 18,625
Habitat and agricultural mitigation management 5,980 6,840
Other purposes (3)
Unrestricted
4,260 6,019
126,632 146,018
Total governmental activities net assets $ 482,877 $ 565,481 $
282,728 $ 342,232 $
151,395 175,663
23,042 25,144
6,893 7,528
20,451 35,173
149,662 152,352
634,171 $ 738,092 $
604,117 (2)
172,474
27,453
7,042
5,131
197,672
1,013,889
Business-type activities
Invested in capital assets, net of related debt $ 143,175 $ 165,943 $
Restricted for:
Capital assets
Unrestricted
96,807 96,666
16,261 22,509
Total business-type activities net assets $ 256,243 $ 285,118 $
Total government
Invested in capital assets, net of related debt $ 341,983 $ 414,162 $
Restricted for:
Capital assets 227,352 236,426
Affordable, low and moderate income housing 16,652 18,625
Habitat and agricultural mitigation management 5,980 6,840
Other purposes
Unrestricted
Total net assets
$1,500
$1,000
$500
$0
4,260 6,019
142,893 168,527
$ 739,120 $ 850,599 $
Total Governmental Net Assets
(in millions)
, - _ ,,, , ji
"fl — fl — 1 — B~~r
2002 2003 2004 2005 2006
Fiscal Year
185,971 $ 213,101 $
102,585 100,597
15,072 11,670
303,628 $ 325,368 $
468,699 $ 555,333 $
253,980 276,260
23,042 25,144
6,893 7,528
20,451 35,173
164,734 164,022
937,799 $ 1,063,460 $
D Total Unrestricted
• Total Restricted
D Invested in Capital
Assets
249,462
107,841
(22,240) (4)
335,063
853,579
280,315
27,453
7,042
5,131
175,432
1,348,952
116
CITY OF CARLSBAD
Changes in Net Assets
Last Five Fiscal Years
(dollars in thousands)
Expenses
Governmental activities
General government
Public safety
Community development
Community services
Public works
Interest and fiscal charges on long-term debt
Total governmental activities
Business-type activities
Carlsbad Municipal Water District
Golf course
Sewer
Solid waste
Total business-type activities
Total government
Program Revenues
Governmental activities
Charges for services:
General government
Public safety
Community development
Community services
Public works
Operating grants and contributions
Capital grants and contributions
Total governmental activities
Business-type activities
Charges for services:
Carlsbad Municipal Water District
Sewer
Solid waste
Operating grants and contributions
Capital grants and contributions
Total business-type activities
Total government
Net (Expense)/Revenue:
Governmental activities
Business-type activities
Total government net expense
2002 2003 2004 2005 2006
$ 7,600 3
25,660
10,539
13,270
15,015
1,673
73,757
19,311
98
6,169
213
25,791
$ 99,548 $
$ 582 $
2,957
3,810
1,828
5,440
7,985
26,852
49,454
19,102
5,919
505
577
16,155
42,258
3 91,712 3
3 (24,303) 3
16,467
3 (7,836) $
8,518 $
27,748
12,004
14,538
16,826
1,048
80,682
19,261
93
6,104
218
25,676
106,358 3
750 $
3,269
4,261
2,086
6,668
10,139
45,180
72,353
18,276
6,286
868
1,267
19,539
46,236
118,589 3
(8,329) 3
20,560
12,231 3
8,604 $
30,894
13,814
15,035
19,534
996
88,877
20,950
54
6,891
1,300
29,195
118,072 3
571 $
3,699
4,203
2,102
4,533
14,570
42,215
71,893
18,862
6,203
1,673
1,504
17,377
45,619
117,512 3
(16,984) 5
16,424
(560) $
11,353
34,366
14,363
16,033
22,064
1,014
99,193
21,422
25
7,235
1,488
30,170
129,363
926
3,232
5,934
2,292
4,633
12,817
74,414
104,248
18,788
6,378
2,348
508
17,122
45,144
149,392
5,055
14,974
20,029
$ 15,382
35,822
14,332
16,790
35,937
1,036
119,299
24,124
2,471
8,265
1,699
36,559
3 155,858
3 945
3,611
4,677
2,437
6,451
12,116
39,286
69,523
19,462
6,801
1,893
718
11,213
40,087
$ 109,610
3 (49,776)
3,528
3 (46,248)
117
CITY OF CARLSBAD
Changes in Net Assets
Last Five Fiscal Years
(dollars in thousands)
General Revenues and Other Changes in Net Assets
Governmental activities
Taxes:
Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Business license taxes
Real property transfer taxes
Vehicle license fees
Income from property and investments
Other general revenues
Transfers
Total governmental activities
Business type activities
Property taxes
Income from property and investments
Other general revenues
Transfers
Total business-type activities
Total government
Change in Net Assets
Governmental activities
Business-type activities
Total government
2002 2003 2004 2005 2006
$ 28,495 $
21,004
8,533
7,495
2,440
1,193
4,675
18,095
762
17
92,709
1,516
7,010
804
(17)
9,313
$ 102,022 $
$ 68,406 5
25,780
$ 94,186 S
: 31,411 $
25,767
8,387
3,730
2,305
1,127
5,067
13,347
390
(600)
90,931
1,672
5,836
208
600
8,316
; 99,247 $
; 82,602 $
28,876
; 111,478 $
33,949 $
24,578
8,813
5,027
2,872
1,587
4,125
3,124
637
963
85,675
1,842
1,193
14
(963)
2,086
87,761 $
68,691 $
18,510
87,201 $
: 41,479 $
24,759
10,072
5,683
2,890
1,646
2,136
9,910
441
(150)
98,866
2,025
4,162
579
-
6,766
105,632 $
103,921 $
21,740
125,661 $
43,936
25,429
11,513
5,429
3,040
1,906
587
11,682
650
(315)
103,857
2,257
3,538
56
315
6,166
110,023
54,081
9,694
63,775
Source: City of Carlsbad Comprehensive Annual Financial Report.
Note: Data in this table is available from the date the City implemented GASB 34 (Fiscal Year 2001-02).
118
119
CITY OF CARLSBAD
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
General Fund
Reserved
Unreserved
Total General Fund
All Other Governmental Funds
Reserved
Unreserved, reported in:
Special revenue funds
Capital project funds
Debt service funds (1)
Total all other governmental funds
1997
9,825
21,171
30,996
12,107
11,517
72,097
2,498
98,219
1998
10,346
31,498
41,844
27,255
15,016
87,336
433
$ 130,040
1999 2000
12,893
39,221
52,114
30,938
18,639
102,038
291
$ 151,906
14,324
42,179
56,503
27,658
20,458
108,866
(11,092)
145,890
2001
11,746
58,857
70,603
36,030
19,709
131,382
(11,586)
175,535
$80,000
$60,000
$40,000
$20,000
$0
General Fund Balance
(in thousands)
E3 Reserved
H Unreserved
1-997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Fiscal Year
Source: City of Carlsbad Comprehensive Annual Financial Report.
(1) Effective July 1, 1999, the City changed the manner in which it accounted for advances from the City to the Redevelopment
Agency, and began recording such advances as a liability on the balance sheet of the funds obligated for the repayment.
(2) A $35 million transfer was made from the General Fund to the General Capital Construction Fund to assist in the construction
of four large projects.
120
2002 2003 (2) 2004 2005 2006
12,006 $ 12,794 $ 27,917 $ 44,996 $ 45,131
76,149 58,343 56,141 54,400 61,494
8,155 $ 71,137 $ 84,058 $ 99.396 $ 106,625
$ 37,776 $ 44,265 $ 54,414 $ 49,583 $ 38,000
20,542 21,011 29,841 30,031 30,024
128,869 171,227 171,194 206,711 221,393
(10,371) (10,449) (9,789) (11,317) (11,681)
$ 176,816 $ 226,054 $ 245,660 $ 275,008 $ 277,736
121
CITY OF CARLSBAD
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
1997(1)1998 1999 2000 2001
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
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Proceeds of advances
Proceeds of debt
Total other financing sources (uses)
Net change in fund balances
Debt service as percentage of noncapital
expenditures (2,3)
$ 41,512 $
14,650
4,235
10,708
318
6,075
2,042
15,451
220
3,434
98,645
49,010
-
-
-
-
13,556
992
2,385
65,943
32,702
3,530
(3,525)
539
-
544
$ 33,246 $
51,381 $
20,296
4,883
7,615
331
8,632
1,919
16,610
220
1,514
113,401
6,748
18,631
7,895
6,673
11,437
23,854
1,663
3,144
80,045
33,356
2,069
(2,097)
579
9,252
9,803
43,159 $
57,508 $
17,802
3,827
6,805
936
8,925
1,934
45,763
350
1,544
145,394
6,784
21,928
8,636
7,541
12,690
52,107
825
1,645
112,156
33,238
2,603
(2,603)
589
589
33,827 $
62,268 $
14,094
3,321
5,749
840
10,496
2,007
14,733
561
1,183
115,252
7,383
21,799
11,538
9,088
13,823
39,543
821
1,660
105,655
9,597
15,533
(15,533)
-
332
332
9,929 $
70,147
14,286
3,409
6,427
889
20,385
2,148
15,982
312
2,260
136,245
9,022
23,627
9,352
11,571
14,402
22,067
1,029
1,814
92,884
43,361
9,544
(9,651)
-
91
(16)
43,345
Source: City of Carlsbad Comprehensive Annual Financial Report.
(1) In Fiscal Year 1997-98, the City went through a major reorganization. At this time, five major service areas were created, as
reflected in Fiscal Year 1997-98 and thereafter.
(2) Noncapital expenditures are total expenditures less capital outlay (to the extent capitalized for the Government-wide
Statement of Net Assets) and expenditures for capitalized assets included within the functional expenditure categories.
(3) Information not available for years prior to GASB 34 implementation.
122
2002 2003 2004 2005 2006
$ 71,528 $
14,267
1,998
7,751
947
18,700
2,284
11,251
210
2,386
131,322
8,415
25,598
10,316
12,449
15,404
37,503
1,133
1,694
112,512
18,810
11,833
(11,816)
6
23
$ 18,833 $
74,156 $
19,775
2,043
10,059
923
14,802
2,815
14,547
149
2,349
141,618
8,805
26,798
11,799
13,374
18,177
26,410
1,672
1,628
108,663
32,955
47,846
(48,581)
_
(735)
32,220 $
79,533 $
22,506
2,329
9,899
1,092
3,902
2,735
23,682
141
1,543
147,362
9,745
30,799
13,644
13,915
18,045
26,406
1,214
1,466
115,234
32,128
8,729
(8,329)
_
400
32,528 $
84,065 5
24,245
3,393
10,433
1,084
10,741
2,700
49,446
164
1,107
187,378
12,113
33,819
14,319
14,744
18,737
46,420
1,040
1,501
142,693
44,685
10,228
(10,228)
_
-
44,685 $
; 94,862
13,027
2,504
11,038
1,178
10,387
2,639
25,365
130
2,077
163,207
16,311
36,365
14,300
15,637
20,327
47,032
1,037
1,599
152,608
10,599
11,685
(12,334)
_
(649)
9,950
3.74%4.01%3.01%2.65%2.48%
123
CITY OF CARLSBAD
General Governmental Tax Revenues by Source
Last Ten Fiscal Years
(in thousands)
Property
Fiscal Year Tax *
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
$ 22,126
26,249
26,688
27,335
30,656
28,512
31,412
33,949
35,650
43,936
Sales and
Use Taxes
$ 12,495
14,817
17,129
19,493
21,197
21,661
25,543
25,571
(1) 26,331
27,294
Transient
Occupancy
Taxes
$ 3,675
6,046
7,010
8,333
9,269
8,533
(3) 8,387
8,814
10,072
11,513
Real
Business Property
Franchise
Taxes
$ 1,513
(6) 1,714
1,954
2,592
3,916
(4) 7,495 (5)
3,730
5,027
5,683
5,429
License Transfer
Taxes
$ 1,510 $
1,604
1,738
1,864
2,300
2,440
2,305
2,872 (2)
2,890
3,040
Total Tax
Taxes Misc. Taxes Revenue
466 $ 1
836 1
1,081 1
993 1
1,095 1
1,193 1
1,127 1
1,587 1
1,646 1
1,906 1
,237 $ 43,022
,719 52,985
,908 57,508
,658 62,268
,714 70,147
,694 71,528
,652 74,156
,713 79,533
,793 84,065
,744 94,862
Change
1997-2006 99%118%213%259%
Total General Governmental Tax
101%.
Revenues
309% 41%. 120%.
(in thousands)
50,000 -
40,000 -
30,000 -
20 000 -
10,000 -
_^-*—
t*^
JHw-"**
»-— *^
• , ^,-i^^BBW^ -- l^^m
1997 1998
— • *^
— •— ^*^
— — =•=*
1999 2000
^<*£^1
2001 2002
Fiscal Year
^*-~-^~~~~*^
^m •—
*^»*es£Z"—
2003 2004
. .
— IT -
— B -*
1
— - — — 1ji,
2005 2006
+ Property Tax
—•—Sales and
Taxes
— — Transient
Use
Occupancy Taxes
Other
Source: City of Carlsbad.
* Includes Vehicle License Fees (VLF) in lieu, property tax increment, low/moderate housing, set aside taxes and CFD#1 special taxes.
(1) Vehicle License Fee revenue began decreasing in 2004-05 because the City began receiving property taxes in lieu of a portion of the VLF.
(2) This reflects the results from hiring a company to assist in the identification of unlicensed businesses, and the recovery of
non-reported and under-reported business license taxes.
(3) The City modified the methodology used in accruing sales tax revenue for the year, in accordance with Generally Accepted
Accounting Principles (GAAP).
(4) The drop in transient occupancy tax was the result of the impacts from September 11, 2001 on tourism.
(5) This was the result of higher natural gas prices paid by consumers in calendar year 2000.
(6) Reflects the opening of the Four Seasons Resort at Aviara.
124
CITY OF CARLSBAD
Water and Sewer Rates
Last Ten Fiscal Years
Water Sewer
Monthly Base
Fiscal Year Charge Unit (1) Rate
1997 $9.25 $1.70 $15.00
1998 9.25 1.70 15.00
1999 9.25 1.70 15.00
2000 9.25 1.60 15.00
2001 9.25 1.60 13.00
2002 9.25 1.60 13.00
2003 9.25 1.60 13.00
2004 9.25 1.60 13.00
2005 9.25 1.60 13.00
2006 9.25 1.60 13.50
Source: City of Carlsbad.
Note: Rates shown are for on 5/8" meter, which is the standard household meter size.
(1) One unit of water equals 748 gallons.
125
CITY OF CARLSBAD
Assessed Value of Taxable Property
(dollars in millions)
Fiscal
Year
1997 3
1998
1999
2000
2001
2002
2003
2004
2005
2006
15,000 n
10,000
5,000
Residential Commercial Industrial
Property Property Property
4,458 $ 688 $ 552
4,723 766 631
5,315 954 713
6,418 1,036 854
7,367 1,192 1,282
8,543 1,310 1,341
9,612 1,413 1,469
10,700 1,516 1,231
11,984 1,749 1,266
13,619 1,962 1,398
Taxable
(in
[LFL.FLlLlt/1
Exemptions
and Other Net Assessed Total Property Total Direct
Taxable Valuation Tax Revenue Tax Rate (2)
Property (1)
$ 307 $ 6,005 $ 11.238 0.187%
304 6,424 12.410 0.193%
410 7,392 14.196 0.192%
583 8,891 16.762 0.189%
649 10,490 19.658 0.187%
657 11,851 22.286 0.188%
516 13,010 24.974 0.192%
856 14,303 26.960 0.188%)
742 15,741 30.220 0.192%
729 17,708 33.751 0.191%
Assessed Value
millions)
n 1
•-i •: n Un -m-i
1997 1998 1999 2000 2001 2002 2003 2004 2005
—i
Q Residential Property
• Commercial Property
H— 1 D Industrial Property
2006
Fiscal Year
Source: County of San Diego, California Auditor and Controller.
Notes: Information about estimated actual value of property is not available; the assessed value is based on the most
recent sales value and includes secured property only.
(1) Other property includes farm, rural, institutional, recreational, state secured property, unsecured property, personal property and fixtures,
and fixtures.
(2) The total direct tax rate was calculated by dividing the total property tax revenue by the total taxable value.
(3) In Fiscal Year 2003-04, there was an increase in the assessed valuation of the power plant subsequent to its purchase by Cabrillo Power.
126
CITY OF CARLSBAD
Principal Property Taxpayers
Current Year and Nine Years Ago
2006 1997
Taxpayer
Greystone Homes Inc
Aviara Resort Associates
KSL La Costa Resort
Cpg Carlsbad Holdings LLC
Continuing Life
Prentiss Properties
Borders, Inc.
Legoland California, Inc.
H.G. Fenton Company
Pulte Home Corp
Callaway Golf Company
San Diego Gas & Electric
Upper Deck Company
Real Estate Collateral Mgmt. Co.
Puritan-Bennett Corporation
Plaza Camino Real Shopping Ctr.
Aviara Land Associates LTD
Hughes Aircraft Company
Vons Companies, Inc.
Total
Net assessed valuation
Taxable Assessed
Value
$ 144,779,270
125,256,000
124,657,356
105,346,743
93,828,207
76,456,459
75,213,933
71,000,000
68,998,021
68,322,346
-
-
-
-
-
-
-
-
-
$ 953,858,335
$ 17,707,928,440
Rank
1
2
3
4
5
6
7
8
9
10
Percentage of
Total City
Taxable
Assessed Value
(1)
0.82%
0.71%
0.70%
0.59%
0.53%
0.43%
0.42%
0.40%
0.39%
0.39%
-
-
-
-
-
-
-
-
-
5.39%
Taxable Assessed
Value
0
0
109,176,067
0
-
-
-
-
-
-
63,171,578
298,803,993
59,670,485
48,680,000
33,023,600
31,405,087
26,022,165
23,412,450
23,090,328
$ 716,455,753
$ 6,005,069,504
Rank
2
3
1
4
5
6
7
8
9
10
Percentage of
Total City
Taxable
Assessed Value
(1)
0
0
1.82%
0
-
-
-
-
-
-
1.05%
4.98%
0.99%
0.81%
0.55%
0.52%
0.43%
0.39%
0.38%
11.5%
Source: County of San Diego Office of the Auditor and Controller.
127
CITY OF CARLSBAD
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Total Current
Levy(l)
12,010,693
13,601,772
15,717,747
18,306,661
21,551,102
24,108,706
26,709,097
29,382,034
39,785,892 (3)
44,915,159
Property T
Last
Total Current "/
Collections (2) (
11,265,012
12,916,890
14,995,541
17,472,632
20,662,671
23,237,535
25,674,795
28,154,961
38,162,630
43,053,536
ax Levies & Collections
Ten Fiscal Years
it of Levy
Collected
93.8%
95.0%
95.4%
95.4%-
95.9%
96.4%
96.1%
95.8%
95.9%
95.9%
50
40 H
I 30 -
§ 20-
10
0
D Total Current Levy (1)
11 Total Current
Source: County of San Diego Office of the Auditor and Controller.
(1) Includes real property transfer taxes, homeowner exemptions and Proposition 172 public safety sales taxes.
(2) Total Current Collections includes prior year delinquencies and adjustments; delinquency collections by year are not available.
(3) In Fiscal Year 2004-05, the City received $4.9 million in property tax payments in lieu of vehicle license fees.
128
129
CITY OF CARLSBAD
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(dollars in thousands except per capita)
Governmental Activities
Fiscal Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Bonds / Special
Debt
$ 21,185
14,740
14,460
14,170
13,865
13,540
13,200
12,840
12,460
12,065
Certificates of
Participation
$ 6,615
6,595
6,075
5,570
5,055
4,515
3,950
3,360
2,740
2,105
Capital Leases
$ 2,512
2,399
633
904
888
791
179
79
7
1
Loans Payable
$ 990
875
750
620
480
330
170
-
-
-
Outstanding Debt per Capita
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) In Fiscal Year 2005-06, the State Water Resources Control Board issued a low interest loan for the Carlsbad Water Recycling
Facility for $9.5 million.
(2) Percentage of personal income is calculated using personal income for the prior year.
Source: County of San Diego, California Auditor and Controller. Information about estimated actual value of property is not
presently available and therefore not presented on these statements.
130
Business-Type Activities
Accrued
Assessments
$ 2,375
1,985
1,252
951
789
621
443
257
-
-
Certificates of
Participation
$ 8,160
6,360
5,405
4,410
3,370
2,295
1,175
-
-
-
Installment
Purchase
Agreements
$ 11,080
10,675
10,250
9,810
9,350
8,870
8,375
7,855
7,305
6,730
Loan Payable
(1)
$ 2,097
1,999
1,897
1,792
1,705
1,574
1,460
1,343
1,223
10,592
Total
$ 55,014
45,628
40,722
38,227
35,502
32,536
28,952
25,734
23,735
31,493
Percentage of
Personal
Income (2)
-
-
-
-
0.69%
0.60%
0.53%
0.47%
0.42%
0.53%
Per Capita
$ 819.88
655.57
558.60
488.54
426.49
369.22
319.41
277.62
249.46
319.38
131
132
CITY OF CARLSBAD
Schedule of Direct and Overlapping Bonded Debt
Current Fiscal Year
2005-06 Assessed Valuation:
Redevelopment Incremental Valuation:
Adjusted Assessed Valuation:
OVERLAPPING TAX AND ASSESSMENT DEBT:
Metropolitan Water District
Carlsbad Unified School District
Carlsbad Unified School District CFD No. 1
Oceanside Unified School District
Vista Unified School District
Encinitas Union School District
San Marcos Unified School District School Facility Improvement District
San Marcos Unified School District CFD No. 4
San Marcos Unified School District CFD No. 5
San Dieguito Union HS District CFD No. 94-1
San Dieguito Union HS District CFD No. 94-2
San Dieguito Union HS District CFD No. 95-2
San Dieguito Union High School District combined CFD
Palomar Pomerado Hospital District
Olivenhain Municipal Water District, Assess. Dist. No. 96-1
City of Carlsbad CFD No. 3, LA. No. 1
City of Carlsbad 1915 Act Bonds
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
San Diego County General Fund Obligations
San Diego County Pension Obligations
San Diego City Superintendent of Schools General Fund Obligations
Mira Costa Community College Dist Certificates of Participation
Palomar Community College District General Fund Obligations
Carlsbad Unified School District General Fund Obligations
San Marcos Unified School District General Fund Obligations
Encinitas Union School District Certificates of Participation
Other School District Certificates of Participation
City of Carlsbad General Fund Obligations
TOTAL DIRECT AND OVERLAPPING GEN FUND DEBT
COMBINED TOTAL DEBT
(1) Percentage of overlapping agency's assessed valuation located within boundaries of the city,
obligations.
Ratios to 2005-06 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.12%
Ratios to Adjusted Assessed Valuation:
Combined Direct Debt ($2,105,000) 0.01%
Combined Total Debt 2.06%
Source: California Municipal Statistics, Inc.
$ 17,965,430,228
257,501,788
$ 17,707,928,440
Total Debt
6/30/2006
$ 389,565,000
19,985,811
8,445,000
96,920,000
108,749,882
22,506,805
18,328,019
14,115,000
25,795,000
278,485
20,366,850
839,613
48,440,000
80,000,000
19,335,000
11,490,000
73,370,000
$ 958,530,465
$ 389,852,147
1,231,282,916
12,495,000
4,760,000
8,425,000
56,330,000
5,910,000
1,410,000
10,140,000
2,105,000
$ 1,722,710,063
$ 2,681,240,528
Percent
Applicable (1)
1.223%
97.627%
100.000%
0.006%
0.115%
30.607%
37.048%
23.403%
100.000%
100.000%
98.080%
12.035%
30.399%
2.204%
22.168%
100.000%
100.000%
6.293%
6.293%
6.293%
26.708%
2.816%
97.627%
31.771%
30.607%
Various
100.000%
City's Share of
Debt 6/30/06
$ 4,764,380
19,511,548
8,445,000
5,815
125,062
6,888,658
6,790,164
3,303,333
25,795,000
278,485
19,975,806
101,047
14,725,276
1,763,200
4,286,183
11,490,000
73,370,000
$ 201,618,957
$ 24,533,396
77,484,634
786,310
1,271,301
237,248
54,993,289
1,877,666
431,559
9,802
2,105,000
$ 163,730,205
$ 365,349,162
133
CITY OF CARLSBAD
Direct and Overlapping Debt
Last Nine Fiscal Years
(rate per $1,000 of assessed value)
OVERLAPPING TAX AND ASSESSMENT DEBT:
San Diego County Water Authority
Metropolitan Water District
Carlsbad Unified School District
Carlsbad Unified School District Lease Tax Obligations
Carlsbad Unified School District CFD No. 1
Oceanside Unified School District
Vista Unified School District
Encinitas Union School District
Encinitas Union School District Lease Tax Obligations
San Marcos Unified School District School Fac. Improv. Dist.
Tri-City Hospital District
Palomar Pomerado Hospital District
Leucadia County Water District and I.D. No. 1
Vallecitos Water District and I.D. No. 6
San Marcos Unified School District CFD No. 4
San Marcos Unified School District CFD No. 5
San Dieguito Union HS District CFD No. 1
San Dieguito Union HS District CFD No. 94-1
San Dieguito Union HS District CFD No. 94-2
San Dieguito Union HS District CFD No. 95-2
San Dieguito Union HS District combined CFD
Olivenhain Municipal Water District, I.D. No. 1
Olivenhain Municipal Water District, Assess. Dist. No. 96-1
City of Carlsbad CFD No. 3,1.A. No. 1
City of Carlsbad 1915 Act Bonds
1998
0.068
0.696
4.009
1.076
1.778
1.032
0.226
1.023
0.012
0.004
0.017
0.683
4.702
1999
0.054
0.691
3.502
0.729
1.638
0.941
0.174
0.785
1.752
2.581
0.011
0.611
6.467
2000
0.040
0.611
2.909
0.186
1.315
0.874
0.131
0.682
1.457
1.319
0.005
0.553
4.908
2001
0.028
0.545
2.472
0.187
1.073
0.756
0.138
0.615
1.216
0.029
2.051
0.032
0.465
3.959
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
San Diego County General Fund Obligations
San Diego County Pension Obligations
San Diego City Superintendent of Schools General Fund Obligations
Mira Costa Community College District Certificates of Participation
Palomar Community College District General Fund Obligations
Carlsbad Unified School District General Fund Obligations
San Marcos Unified School District General Fund Obligations
San Marcos Unified School District Certificates of Participation
Encinitas Union School District Certificates of Participation
Other School District Certificates of Participation
City of Carlsbad General Fund Obligations
3.958 J
2.935
0.017
0.061
5 3.584 3
2.569
0.016
0.246
5 3.524 !
2.149
0.014
0.207
S 3.016
1.801
0.012
0.176
1.733 1.514 1.460 5.493
0.103
0.268
0.026
1.027
0.075
0.212
0.028
0.822
0.050
0.166
0.021
0.626
0.031
0.063
0.018
0.482
Note: Data is unavailable for 1997.
Source: California Municipal Statistics, Inc.
134
2002 2003 2004 2005 2006
$ o.oiv ;
0.481
2.099
0.122
0.909
0.005
0.678
0.050
0.629
-
-
1.059
0.025
1.816
0.028
-
0.400
-
3.287
$ 2.701 3
1.470
0.011
0.145
-
4.843
-
0.015
0.078
0.022
0.381
S 0.008 :
0.398
1.832
0.070
0.789
0.004
0.621
0.020
0.544
-
-
1.909
0.023
1.628
0.025
-
0.357
-
2.809
> 2.281 3
3.951
0.010
0.121
-
4.392
-
-
0.045
0.021
0.304
S
0.368
1.594
0.033
0.678
0.005
0.530
-
0.524
-
-
1.886
0.020
1.456
0.023
0.973
0.314
-
3.145
i 1.881 3
5.528
0.009
0.098
-
3.961
0.143
-
0.037
0.018
0.235
$
0.319
1.342
-
0.578
0.005
0.471
-
0.448
-
-
1.677
0.018
1.298
0.020
0.884
0.279
-
4.848
> 1.855
5.008
0.051
0.085
-
3.557
0.122
-
0.032
0.015
0.174
$
0.269
1.102
-
0.477
0.007
0.389
-
0.383
0.100
0.187
1.457
0.016
1.128
0.006
0.832
0.242
0.649
4.143
$ 1.385
4.376
0.044
0.072
0.013
3.106
0.106
-
0.024
0.001
0.119
135
CITY OF CARLSBAD
Legal Debt Margin Information
Last Ten Fiscal Years
(dollars in thousands)
1997 1998 1999 2000 2001
Net assessed valuation
Debt limit (25% x 15%)
Amount of debt applicable to limit:
Bonded debt
Certificates of participation
Obligations under capital leases
Total net debt applicable to limit
Legal debt margin
Total net debt applicable to the limit
as a percentage of debt limit
$ 6,005,070
225,190
21,185
6,615
113
27,913
$ 197,277
$ 6,424,231
240,909
14,740
6,595
2,399
23,734
$ 217,175
$ 7,391,939
277,198
14,460
6,075
633
21,168
$ 256,030
$ 8,890,683
333,401
14,170
5,570
904
20,644
$ 312,757
$ 10,490,116
393,380
13,865
5,055
888
19,808
$ 373,572
12.4%9.9 7.6%6.2%)5.0%
12.0% -
0 f\C/fl _
A ftCTL „
v <lfc
1997
' v >• >
' ^, -,"
- <'•
'*' ^ ''i
1998 1999
.>:
2000
Fisca
-, • "
2001
lYeai
'• • :
2002
-&"• *•
"V.-- \
2003 2004
:-,,
2005
"?••;
2006
Note: Under state finance law, the City's outstanding general obligation debt should not exceed 15 percent (as adjusted) of total
assessed property value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for
repaying general obligation bonds.
136
2002
11,850,679
444,400
2003
13,009,712
487,864
2004
14,303,050
536,364
2005
15,741,122
590,292
2006
17,707,928
664,047
13,540
4,515
791
18,846
$ 425.554
13,200
3,950
179
17,329
$ 470,535
12,840
3,360
79
16,279
$ 520,085
12,460
2,740
7
15,207
$ 575,085
12,065
2,105
1
14,171
$ 649,876
4.2%3.6%3.0%2.6%2.1%
137
CITY OF CARLSBAD
Pledged-Revenue Coverage
Last Nine Fiscal Years
Sewer Revenue Bonds
Debt Service
Fiscal
Year
1998
1999
2000
2001
2002
2003
2004
2005
2006
Gross
Revenues (1)
(3) $ 7,531,548
7,897,329
8,421,638
11,089,995
9,438,807
9,342,266
6,854,001
8,557,183
8,306,783
Less: Expenses
(2)
$ 3,037,634
3,762,721
3,792,799
4,352,912
4,707,348
4,584,265
5,284,357
5,156,663
6,009,282
Net Available
Revenue
$ 4,493,914
4,134,608
4,628,839
6,737,083
4,731,459
4,758,001
1,569,644
3,400,520
2,297,501
Principal
$ 405,000
425,000
440,000
460,000
480,000
495,000
520,000
550,000
575,000
Interest
$ 513,179
517,672
500,371
482,027
462,162
441,199
416,256
387,581
361,394
Coverage
4.89
4.39
4.92
7.15
5.02
5.08
1.68
3.63
2.45
Source: City of Carlsbad
(1) Include operating and non-operating revenues.
(2) Include operating and non-operating expenses, excluding depreciation.
(3) Fiscal Year 1997-98 is the first year debt service payments were made.
(4) Include recycled water operating and non-operating revenues and fees.
(5) Include recycled water operating and non-operating expenses, excluding depreciation.
(6) No debt service payments will be made on the outstanding loan until Fiscal Year 2006-07.
138
Recycled Water Loan
Debt Service
Gross
Revenues (4)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2,404,369
Less: Expenses
(5)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2,347,032
Net Available
Revenue
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
57,337
Principal (6)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-
Interest (6)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-
Coverage
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-
139
CITY OF CARLSBAD
Demographic and Economic Statistics
Last Ten Fiscal Years
% of S.D.
Total County % Change from Avg. Household
Year Population Population Previous Year Median Age Size
1996 65,500 2% 1.6% n/a n/a
1997 67,100 3% 2.4% n/a n/a
1998 69,600 3% 3.7% n/a n/a
1999 72,900 3% 4.7% n/a n/a
2000 78,247 3% 7.3% 38.9 2.46
2001 83,242 3% 6.4% 38.9 2.46
2002 88,120 3% 5.9% 39.4 2.48
2003 90,643 3% 2.9% 39.7 2.48
2004 92,695 3% 2.3% 40.0 2.50
2005 95,146 3% 2.2% 40.4 2.47
2006 98,607 3% 4.0% 40.7 2.52
Sources: Population data is from the California Department of Finance and SANDAG.
Household and demographic characteristics estimates are from SANDAG Current Estimates, the U.S. Census Bureau
Census 2000 and American Community Survey.
Income estimates are derived from data from the Bureau of Economic Analysis, U.S. Census Bureau Census 2000.
Current population estimates are from SANDAG.
Unemployment rate estimates are from the California Employment Development Department.
(1) Values in inflation-adjusted 2005 dollars.
(2) Per Capita Personal Income and Unemployment Rate are calculated on a calendar year basis, and therefore not yet
available for 2006.
(3) Personal Income is the total aggregate income that correlates to the total population.
140
Educational Attainment
; High School
Graduate
n/a
n/a
n/a
n/a
93%
n/a
n/a
n/a
n/a
95%
n/a
% Bachelor's
Degree or
Higher
n/a
n/a
n/a
n/a
46%
n/a
n/a
n/a
n/a
47%
n/a
Personal Income
(1,3) (millions)
n/a
n/a
n/a
n/a
$4,863
$5,087
$5,292
$5,331
$5,552
$5,708
n/a
Per Capita
Personal Income
n/a
n/a
n/a
n/a
$62,100
$61,100
$60,100
$58,800
$59,900
$60,200
n/a
Unemployment
Rate (2)
n/a
n/a
n/a
n/a
2.5%
2.7%
3.4%
3.4%
3.1%
2.8%
n/a
141
CITY OF CARLSBAD
Principal Employers
Current Year and Nine Years Ago
Manufacturing
2006
Employees Rank
% of Total City
Employment
1997
Employees Rank
Callaway Golf
Invitrogen
ViaSat
Taylor Made Golf - Adidas Golf Company
Acushnet Golf
The Upper Deck
Zimmer Dental
Asymtek
Dot Hill Systems
Beckman Coulter
Cobra Golf Inc. II
Nellcor Puritan Bennett Corp.
Smith & Nephew DonJoy, Inc.
Ashworth, Inc.
Republic Tool & Mfg. Company
Palomar Products
1,637
982
726
650
530
333
321
278
275
263
2
3
4
5
6
7
8
9
10
2.9%
1.8%
1.3%
1.2%
1.0%
0.6%
0.6%
0.5%
0.5%
0.5%
2,250
275
400
700
1,000
1,000
602
400
400
300
10
Non-Manufacturing
La Costa Resort & Spa
Carlsbad Unified School District
LEGOLAND, California
Four Seasons Resort - Aviara
City of Carlsbad
Grand Pacific Resorts
Gemological Institute of America
Prescription Solutions
Eastridge
Costco
ISIS Pharmaceuticals
Plaza Camino Real
Car Country Carlsbad
Farmers Insurance
San Diego Gas & Electric
Software of the Month Club
Subtotal Employees
Total Employees
1,068
950
801
781
660
465
421
420
415
379
12,355
1
2
3
4
5
6
7
8
9
10
1.9%
1.7%
1.4%
1.4%
1.2%
0.8%
0.8%
0.8%
0.7%
0.7%
22.2%
1,050
610
526
450
300
3,000
500
400
300
245
14,708
2
3
4
6
8
1
5
7
9
10
(2)
(2)
55,538
Source: Carlsbad Business License Data (2006) and Carlsbad Chamber of Commerce (1997).
(1) Total Employee count is not available for 1997.
(2) These employers are now tracked by individual store versus combined by mall name.
142
143
CITY OF CARLSBAD
Authorized Full and 3/4 Time City Government Employees by Major Service Area
Last Nine Fiscal Years
1997 1998 1999
Major Service Area
General Government
City Council
City Manager
Communications
City Treasurer
City Attorney
Administration
Records Management
Information Technology
Finance
Risk Management
Human Resources and Worker's Comp
Public Safety
Police
Fire
Community Development
Community Development Administration
Building Inspection
Economic Development
Geographic Information
Planning
Housing and Redevelopment
Community Services
Library
Cultural Arts
Recreation & Senior Programs
Public Works
Administration & Environmental Programs
Engineering Services
General Services
Maintenance & Operations
Full and 3/4 Time Authorized Employees
Increase/(decrease) over prior year
Source: City of Carlsbad Operating Budget
Notes: A full-time employee is scheduled to work 2,080 hours per year (including vacation and sick-leave).
A 3/4 time employee is scheduled to work 1,560 hours per year (including vacation and sick-leave).
In 1997 the City went though a reorganization and Major Service Areas (MSAs) were created.
2000 2001
1.00
8.00
-
0.75
5.00
-
3.60
5.40
19.00
1.00
8.00
115.00
79.00
4.00
11.00
1.00
1.00
24.00
10.00
31.50
3.00
20.00
6.75
38.00
52.75
76.75
525.50
-
1.00
8.00
-
0.75
5.00
-
3.60
6.40
19.00
1.00
8.00
122.00
79.00
4.75
13.00
1.00
1.00
24.00
10.00
32.50
3.00
21.50
7.00
34.00
50.75
76.75
533.00
7.50
1.00
9.00
-
0.75
5.00
-
4.00
13.00
19.00
2.00
8.00
128.00
79.00
4.75
13.00
1.00
2.00
24.00
10.00
32.25
3.00
21.50
7.25
37.00
47.25
81.25
553.00
20.00
1.00
6.75
-
0.75
6.00
2.00
8.00
14.00
26.00
2.00
9.00
134.00
79.75
4.75
13.00
1.00
2.00
24.00
10.00
40.75
4.00
22.00
3.00
49.00
51.75
70.00
584.50
31.50
1.00
6.00
1.00
0.75
6.00
2.00
8.00
15.00
27.00
2.00
9.00
138.00
79.75
3.75
13.00
1.00
2.00
24.00
10.00
41.75
4.00
27.00
3.00
48.70
55.75
70.30
599.75
15.25
144
2002 2003 2004 2005 2006
1.00
6.00
1.00
0.75
7.00
2.00
8.00
15.00
27.00
2.00
10.00
143.00
79.75
3.00
13.00
1.00
2.00
25.00
10.00
46.25
4.75
30.00
3.50
58.70
57.25
70.30
627.25
27.50
1.00
6.00
2.75
0.75
7.00
2.00
8.00
16.00
28.00
2.00
10.00
150.00
79.75
3.00
13.00
1.00
2.00
25.00
10.00
48.00
4.75
33.00
6.00
57.00
57.75
73.00
646.75
19.50
1.00
6.00
2.75
0.75
7.00
2.00
8.00
16.00
28.00
2.00
10.00
148.00
79.75
3.00
13.00
1.00
2.00
25.00
10.00
48.00
5.00
33.00
6.00
57.00
58.75
73.00
646.00
(0.75)
1.00
6.00
2.75
0.75
7.00
2.00
8.00
16.00
28.00
2.00
10.00
148.00
79.75
3.00
13.00
1.00
2.00
25.00
10.00
48.00
5.00
32.50
14.20
51.10
82.85
47.10
646.00
-
1.00
6.00
2.75
0.75
7.00
2.00
8.00
16.00
27.00
2.00
10.00
151.00
79.75
4.00
13.00
1.00
2.00
24.00
10.00
48.00
5.00
32.50
14.20
51.60
91.95
49.50
660.00
14.00
145
CITY OF CARLSBAD
Operating Indicators by Function/Program
Last Two Fiscal Years
2005 2006
General Government
Number of recruitments processed
Number of new hires and promotions
Business licenses processed
Public Safety
Police
Calls for service
Average priority one response (minutes)
Cases
67
50
8,507
74,546
6.8
10,059
83
135
8,955
79,855
6.3
10,605
Fire
Inspections - new construction
Emergency responses
Fires extinguished
Community Development
Affordable housing units completed
Financial assistance to affordable housing projects
Residential building permits issued
Code enforcement inspections
Building inspections conducted
Final inspections (dwelling units)
Planning applications considered
Community Services
Library - total material circulation
Library - patron visits
Arts - number of events
Arts - attendance of events
Recreation - youth sports participants
Recreation - adult sports participants
Recreation - enrichment classes held
Recreation - enrichment class enrollees
Recreation - special events participants
Public Works
Streets
Road miles - overlay or slurry seal
Trees trimmed
Carlsbad Municipal Water District
Potable water deliveries - acre feet
Average daily consumption (gal/single family)
Water customers
6,705
220
439
$1,600,000
1,745
5,600
53,267
1,702
197
1,282,974
731,326
65
50,000
1,100
5,100
1,650
16,700
2,000
28.20
1,767
19,172
363
83,400
7,245
218
110
$1,440,000
948
5,600
51,000
1,440
162
1,237,311
898,511
62
65,000
1,150
5,150
1,650
16,700
3,500
32.30
1,800
19,885
398
83,800
Sewer
Sewage pumped (mgd)
Annual flow (mgd)
Sewer customers
7.36
2,688
62,570
6.62
2.416
64,095
Source: City of Carlsbad
146
CITY OF CARLSBAD
Capital Asset Statistics
Last Two Fiscal Years
2005 2006
Community Services
Number of parks
Acres of parks
Acres of open opace
Miles of trails
Number of pools
Number of community centers
Number of libraries
Number of materials in library collections
39
295
625
13
1
2
2
373,998
39
295
625
27
1
2
2
380,000
Public Safety
Fire Protection
Number of stations
Number of fire trucks
Number of ambulances
Number of other fire vehicles
6
11
4
11
6
11
4
11
Police Protection
Number of patrol and other vehicles
Number of motorcycles
85
13
82
13
Public Works
Carlsbad Municipal Water District
Number of water connections
Miles of lines and mains
25,900
434
27,000
488
Sewer
Number of sewer connections
Miles of sewers
20,500
254
21,839
282
Streets
Miles of streets
Number of street lights
Number of traffic signals
295
6,445
138
338
6,786
152
Source: City of Carlsbad
147
148