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I Carlsbad
California
Comprehensivl
Annual
Financial
Report
for
Fiscal Year Ended
June 30,2008
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FISCAL YEAR ENDED
JUNE 30, 2008
1635 Faraday Avenue, Carlsbad, CA 92008
Website: www. carlsbadca.gov
Prepared by the Finance Department
Cover design by: Kelly Hock & Craddock Stropes
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2008
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 11
Location Map 12
List of City Officials 13
Organization Chart 14
FINANCIAL SECTION:
Independent Auditor's Report 15
Management's Discussion and Analysis 17
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Assets 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 92
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds 96
Combining Schedule of Revenues and Expenditures - Budget and Actual
(Budgetary Basis) - Special Revenue Funds 100
Combining Schedule of Revenue and Expenditures - Budget and Actual
(Budgetary Basis) - Debt Service Funds 102
Combining Schedule of Revenue and Expenditures - Budget and Actual
(Budgetary Basis) Capital Project Funds 102
Combining Statement of Net Assets - Internal Service Funds 104
Combining Statement of Revenues, Expenses and Changes in Net Assets -
Internal Service Funds 106
Combining Statement of Cash Flows - Internal Service Funds 108
Combining Statement of Changes in Assets and Liabilities - Agency Funds 112
Schedule of Annual Debt Service Requirements 114
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2008
TABLE OF CONTENTS (CONTINUED)
Page
STATISTICAL SECTION:
Financial Trends:
Net Assets by Component - Last Seven Fiscal Years 120
Changes in Net Assets - Last Seven Fiscal Years 122
Fund Balances of Governmental Funds - Last Ten Fiscal Years 126
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 128
General Governmental Tax Revenues by Source - Last Ten Fiscal Years 130
Revenue Capacity:
Water and Wastewater Rates - Last Ten Fiscal Years 131
Assessed Value of Taxable Property - Last Ten Fiscal Years 132
Principal Property Taxpayers - Current Year and Nine Years Ago 133
Property Tax Levies and Collections - Last Ten Fiscal Years 134
Debt Capacity:
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 136
Schedule of Direct and Overlapping Bonded Debt - Current Fiscal Year 139
Direct and Overlapping Debt - Last Ten Fiscal Years 140
Legal Debt Margin Information - Last Ten Fiscal Years 142
Pledged-Revenue Coverage - Last Ten Fiscal Years 144
Demographic and Economic Information:
Demographic and Economic Statistics - Last Ten Fiscal Years 146
Principal Employers - Current Year and Nine Years Ago 148
Operating Information:
Authorized Full and % Time City Government Employees by Major Service Area -
Last Ten Fiscal Years 150
Operating Indicators by Function/Program - Last Four Fiscal Years 152
Capital Asset Statistics - Last Four Fiscal Years 153
INTRODUCTORY SECTION
COUNCIL VISION STATEMENTS
Carlsbad City Council
2008
Five-Year Vision Statements
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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 that creates opportunities for
employment to the residents of Carlsbad, economic vitality to the community,
and the necessary revenues to support City services.
* Provides programs, policies and decisions to 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 and is
actively involved addressing governmental issues at the local, state and national
levels.
* Provides an open government leading to 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
4 Promotes a safe and efficient integrated transportation system.
4 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.
C|TY OF CARLSBAD
FINANCE DEPARTMENT
November 10,2008
Honorable Mayor, City Council,
and Citizens of the City of Carlsbad
CITY OF CARLSBAD
Carlsbad, CA 92008
LETTER OF TRANSMITTAL
2007-08 COMPREHENSIVE ANNUAL FINANCIAL REPORT
Honorable Mayor, City Council, and Citizens:
I am pleased to present the 2007-08 Comprehensive Annual Financial Report for the City of Carlsbad. The
information found in this report is provided by management to the City Council and the public to assist
those interested in understanding the fiscal condition of the City as of June 30, 2008.
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 its 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 Mayer Hoffman McCann has issued an
unqualified ("clean") opinion on the City of Carlsbad's financial statements for the year ended June 30,
2008. 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, 2008 noted no material weaknesses in the framework
of internal controls, or significant violations of applicable laws and regulations.
PROFILE OF THE CITY OF CARLSBAD
Carlsbad incorporated in 1952 as a General Law city, although its "village" area dates back more than 100
years. In June 2008, the voters of Carlsbad overwhelmingly approved the City to change to a Charter City.
Carlsbad is located about 35 miles north of the City of San Diego on the southern California coast. The
1635 Faraday Avenue, Carlsbad, CA 92008-7314 PHONE 760-602-2430 FAX 760-602-8553 WWW.CARLSBADCA.GOV
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City is governed by a five-member City Council under the Council/Manager form of government. The City
Council is elected at large on a staggered basis for a term of four years. The City Clerk and City Treasurer
are also elected to four-year terms. The City Council appoints the City
Manager and City Attorney.
The City covers approximately 42 square miles and has a population of
103,811, with an expected build-out population of 110,000 residents.
Industries in the City include three shopping centers; a regional mall, a
specialty outlet center and a community center; a major family theme park;
an auto mall; over 3,600 hotel 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
Wastewater 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
City of Carlsbad Strategic Goals
Balanced Community Development - Connect community, place, and spirit
through balanced and economically sustainable land uses.
Citizen Connection & Partnership — Embrace 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 — Support an environmentally sensitive
community by focusing on: conservation, storm water, wastewater 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 City 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.
Safe Community - Maintain a safe and secure community through collaborative
partnerships. Public safety providers support high standards, deliver protection of
life and property and encourage community involvement in prevention and
preparedness efforts.
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.
statements and strategic goals for the City. The City Council also provides the City with its top 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
Index of Leading Economic Indicators
San Diego County 2000 - X<X-
Economic Profile
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 2008 by 0.8%,
which makes the 29th
consecutive monthly decline in the index in the last 30 months. The decline was primarily led by
unemployment filings, local stock prices and consumer confidence. It is anticipated that there will be a
negative outlook for the San Diego Region through the first half of 2009. The economy requires stability in
the housing market to help improve the economic outlook.
Carlsbad's economy is tied closely to that of the San Diego region, although development patterns may
differ. Carlsbad has experienced strong growth in Fiscal Year 2007-08 in property and transient occupancy
taxes (TOT), however the growth is expected to slow due to the uncertainty in the economy. For Fiscal
Year 2007-08, property taxes grew by 8%, reflecting the continued increase in housing prices as well as
new development. TOT, the City's gauge of the tourism industry, ended Fiscal Year 2007-08 showing a
10% gain, with a large part of that coming from three new hotels: the Sheraton Carlsbad Resort, Hampton
Inn and Homewood Suites. Sales taxes were relatively flat during Fiscal Year 2007-08 due to the slower
economy as well as a decline in auto sales.
Carlsbad's residential real estate market has slowed significantly throughout Fiscal Year 2007-08. The City
issued 249 residential permits this year, a decrease from the 364 in the previous year. The number of
permits declined due to a slow economy. There are a number of new residential communities under
construction or in the final phases of development that will add to the residential housing stock in Carlsbad.
The Villages of La Costa projects known as the Oaks North, 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 almost complete with 523 single-family and 100 multi-family units developed. In addition, the
COPY
Robertson Ranch area, which is expected to contain over 1,000 residential units, is finishing up its master
plan. The completion of these master planned communities will signal an end to the large-scale residential
developments in Carlsbad.
Median SFD Home Prices
2003 2004 2005 2006 2007 2008
As the housing market has cooled,
the housing prices have slowed as
well. The median price for single-
family homes in Carlsbad was
$750,000 for April 2007 compared to
$695,000 for April 2008, a decrease
of 7.3%. The total assessed values in
the City for FY 2009 stand at over
$23.5 billion; an increase of nearly
49% over what they were just five
years ago. With the new
developments mentioned earlier
starting to sell this year, the City has
projected it will add about 1,407
residential units andmore an
additional 2.5 million square feet of commercial/industrial development over the next five years. The City's
residential housing stock is about 90% built out, with approximately 4,568 housing units remaining to
develop.
Commercial and industrial development has also been slowing due to the economy with $694,000 square
feet permitted during Fiscal Year 2007-08 compared to 1.4 million square feet permitted during Fiscal Year
2006-07. It is expected to average 500,000 square feet per year over the next five years with the large
industrial developments including Carlsbad Raceway, Oaks North Industrial Park and the La Costa Town
Center. Some of the major companies in town include the Gemological Institute of America, ViaSat,
Invitrogen, Callaway, Taylor Made, Upper Deck, and many others.
Commercial development has brought much needed entertainment and shopping venues to citizens and
visitors alike, as well as generating additional sales taxes to help pay for City services. Carlsbad is home to
Car Country Carlsbad - an auto mall; the Carlsbad Premium Outlets - a specialty outlet center; Plaza
Camino Real - a regional shopping mall; a Costco center; and the Forum at Carlsbad - a commercial center
with upscale 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 additions being the Sheraton Carlsbad Resort, Homewood
Suites and Hampton Inn.
The City of Carlsbad opened a municipal golf course in August 2007, which is expected to further enhance
the tourism attractions the City offers. The municipal golf course, The Crossings at Carlsbad, is an 18 hole,
destination golf course set in the rolling hills and canyons of Carlsbad. With ocean views, a high quality
golf experience, a first class restaurant and clubhouse, and linkages to hiking trails, The Crossings at
Carlsbad is a destination spot for golfers and non-golfers alike.
The City's base sales taxes are projected to remain flat for Fiscal Year 2008-09 due to the slow economy.
While the growth in housing prices is expected to moderate due to the depressed real estate market, there is
a lag with the property tax revenue and therefore, according to the County Assessor, the City should expect
property tax revenues to increase by over 7.6% for Fiscal Year 2008-09. New building permits are
expected to continue to slow and the development related revenue items have been reduced accordingly for
Fiscal Year 2008-09. And finally, tourism is expected to benefit from the three new hotels that were added
during Fiscal Year 2007-08, with TOT receipts projected to grow by over 8% in the future.
For Fiscal Year 2008-09, the City's revenue projections reflect a slowing of the economy due to a weak
housing market, as well as higher oil and gas prices. Overall General Fund revenues are expected to be
relatively flat during Fiscal Year 2008-09. One of the continued primary areas of risk in the forecast for
Carlsbad is the impact of the State of California's budget deficit discussed below.
State of California
In addition to the soft housing market and a slow 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 years. The LAO's analysis of the Governor's budget
proposal for 2008-09 reflected that the State was projecting a $22 billion deficit. While the State used
several one-time solutions to finally balance its budget 85 days after the beginning of the fiscal year, it has
been recently reported that the State is now projecting an $11 billion deficit for Fiscal Year 2008-09. The
deficit is due to the revenues received to date are not meeting budget expectations. In the past, the State has
balanced its budget by taking City money, and the risk is that they may find a way to make it happen again.
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, the City can anticipate the effects of development
from both a capital and an operating perspective.
While the City of Carlsbad has a long-term history of maintaining sufficient reserves, the City Council took
formal action during Fiscal Year 2007-08 to adopt a reserve policy. The General Fund Reserve Policy sets
a minimum reserve of 30% of the General Fund expenditures and also establishes a target reserve of 40-
50%. This reserve can be used by the City Council for emergencies or one-time purposes.
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 2009, the City
Council approved allocating $7.8 million or 6.5% of the General Fund revenues to the Infrastructure
Replacement Fund.
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 especially with the current weak housing market. 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 could cause the General Fund costs to escalate at a higher rate than inflation. In
addition, a number of other factors, including 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 below 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.
General Fund Revenues and Expenditures
Fiscal Year
•REVENUES
•TOTAL EXPENDITURES
This forecast assumes that revenue growth will be flat for Fiscal Year 2008-09 and then very moderate
growth for the following two years, assuming the economic slowdown will last two to three years. To
project the expenditures, the 10-year forecast includes all known personnel costs, including any benefits
negotiated with the employee groups.
The forecast assumes 10% annual increases in health care costs with the employees paying half of those
increases. It also assumes personnel growth (new positions) to remain rather flat at no more than 1.2% per
year. Cost of living increases between 3% and 4.5% have been added to personnel costs. Pension plan
costs are anticipated to remain essentially at current levels. It assumes that the contribution from the General
Fund to the Infrastructure Replacement Fund remains at 6.5% of General Fund revenues. And finally, it
includes estimated operating costs for General Fund 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 2009 Adopted Budget will remain the same. No new services have been anticipated,
although growth in current services to match the growing population and increases in the consumer price
index have been incorporated.
The results show that the General Fund is balanced into the future with much smaller surpluses than in
previous years' forecasts. This reflects the current economic slowdown and uncertainty. In order to
maintain a balanced ten-year forecast, position growth will be limited. There is a projected surplus in each
year of 0% to 3% depending on which year. This achieves the goal set out by Council to maintain a
balanced budget over the long term.
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 realize its future plans. The General Fund 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. When there is economic
uncertainty, this long-term perspective becomes even more important.
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, 2008 was
1.858. The average return realized on the pooled investments rose from 4.37% in Fiscal Year 2006-07 to
4.45% for Fiscal Year 2007-08.
Historical Unrealized Gains/Losses
as Percent of Amortized Cost
July 2004 -June 2008
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Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr-
04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08
Investment income shown in the financial statements includes changes in the fair value of investments as
required under GAAP. Increases or declines in fair value during the current year, however, do not
necessarily represent trends that will continue, nor is it always possible to realize such amounts. This is
especially true as the City holds most of its
investments to maturity rather than selling
them at fair value.
The graph at the right shows the amount of
unrealized income reflected in the portfolio
over the last few years. The total portfolio
had virtually no unrealized gain or loss on
June 30, 2008. According to the City
Treasurer, "An unrealized gain of
approximately 2% occurred in March 2008,
but due to sharp increases in called bonds and
lower interest rates, the gain decreased. It is
likely that a downward trend will occur in
Fiscal Year 2008-09 as investments with
higher interest rates are called and reinvested
at today's lower market rates."
Major Initiatives
Two new facilities were opened during Fiscal Year 2007-08, the Library Learning Center and the Poinsettia
Park Tennis Courts. A total of two positions were added to help maintain and operate these two new
facilities. Due to the economic uncertainty there were very few changes to the Fiscal Year 2008-09
operating budget.
Several significant projects are 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, parking
facilities, and an aquatic center. The aquatic center plans to include a 50-
meter competition pool, a 12-lane instructional pool and a therapy pool as
well as a water play area with slides. A swimming pool complex was one
of the projects approved by the voters through Proposition C in 2002. The
total cost of the park is estimated to be $22.1 million. The total cost of the
aquatic center is estimated to be $28.3 million. At this time, the City is
reviewing the timing and phasing options for the various components of
this project.
The Leo Carrillo Park - Phase III represents the third phase of this historic park facility
restoration, and includes renovation of additional buildings, construction of additional restrooms,
an arboretum area, and transformation of a barn into a community theater. The total cost is
approximately $2.9 million and design is expected to begin in Fiscal Year 2009-10. In addition, in
Fiscal Year 2008-09 the City plans to expand the event area and construct a new patio area of
approximately 2,500 square feet to provide a more attractive venue for events.
The Public Works Center will include offices, shops, a yard, warehouse and parking to
accommodate the Public Works Department. Initial estimates put the cost at approximately $28.1
million.
The Joint First Responders Training Facility project was authorized under Proposition C, which
was approved in 2002. Preliminary design work is currently underway. In addition to a shooting
range, the facility may include a fire training tower, a residential training prop, and a fire
administration building with classroom and storage facilities. The estimated cost to complete the
project is approximately $24.5 million.
• Relocation of Fire Station No. 3. which is currently located at
the corner of Chestnut and Catalina, is needed to help ensure a
five-minute response time as the City grows eastward. The
new station is budgeted as a 6,200 square foot facility. Total
cost is approximately $7.0 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,
2007. This was the tenth consecutive year that the City has achieved this prestigious award. In order to be
awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently
organized Comprehensive Annual Financial Report. This report must satisfy both GAAP and applicable
legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current Comprehensive
Annual Financial Report continues to meet the Certificate of Achievement Program's requirements, and we
are submitting it to GFOA to determine its eligibility for another certificate.
This report has been a joint effort by many people from many different areas of responsibility. It could not
have been accomplished without their help and the dedicated efforts of all of the accounting staff, especially
Kevin Branca, Assistant Finance Director. I also appreciate the staff of Mayer Hoffman McCann 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, City Manager 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.
Resp< ttfully submitted,
LISA IRVINE
Finance Director
10
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Carlsbad
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2007
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
President
Executive Director
11
SOLANA BEACH
DEL MAR I 1-5
12
CITY OF CARLSBAD
ELECTED CITY OFFICIALS
Claude A. "Bud" Lewis, Mayor
Ann J. Kulchin, Mayor Pro Tem
Matt Hall, Council Member
Julie Nygaard, Council Member
Mark Packard, Council Member
Lorraine M. Wood, City Clerk
Harold "Mac" McSherry, City Treasurer
LEADERSHIP TEAM
Lisa Hildabrand, City Manager
Vacant, Assistant City Manager
James F. Elliott, Deputy City Manager
Glenn Pruim, Public Works Director
Sandra Holder, Community Development Director
Tom Zoll, Police Chief
Kevin Crawford, Fire Chief
Ron Ball, City Attorney
CHAIRPERSONS, COMMISSIONS AND BOARDS
Heath Fox Arts Commission
Richard Erhardt Beach Preservation Committee
April Shute Carlsbad Tourism Business Improvement District Board
Bob Bender Community Television Foundation
Vacant Design Review Board
Sue Ladouceur Historic Preservation Commission
Vacant Housing Commission
Claude A. Lewis Housing and Redevelopment Commission
William Kamenjarin Library Board of Trustees
Sally Lyons Parks and Recreation Commission
Julie Baker Planning Commission
Jack Nelson Senior Commission
Vacant Serra Cooperative Library System Advisory Board
Jacquie Thye Sister City Committee
Vacant Traffic Safety Commission
Vacant Underground Utility Advisory Committee
13
CITY OF CARLSBAD ORGANIZATION CHART
Review
Board \
Arts
Commission
Sister City
Committee
I ELECTORATE j
II '
Historic
Preservation
Commission
Library Board
of
TrusteesCITY
ASURER
iSerra Cooperative)
Library System
| Advisory Board
Parks & Rec
Commission
CITY MANAGER Cl TY ATTORNEY
Senior
Commission
PUBLIC
SAFETY
ADMINISTRATIVE
SERVICES
COMMUNITY
DEVELOPMENT
COMMUNITY
SERVICES
PUBLIC
WORKS
ADMINISTRATION
ENVIRONMENTAL
PROGRAMS
RECREATION
HUMAN
RESOURCES
ENGINEERING
SERVICES
ECONOMIC
DEVELOPMENT
LIBRARY &
THE ARTS
INFORMATION
TECHNOLOGY
GENERAL
SERVICES
GEOGRAPHIC
INFO SYSTEMS
RISK
MANAGEMENT
MAINTENANCE &
OPERATIONS
HOUSING AND
REDEVELOPMENT
Elected :
Council Appointeor-~J
Staff Support
Reporting Relationship—
Proarams
RECORDS
MANAGEMENT
Beach
Preservation
Committee
Community
Television
Foundation
Traffic
Safety
Commission
Underground
Utility Advisory
Committee
, , Hou ing
i :ornm . '-
i Housing &
— i Redevelopment
j Commission
1
j Planning
nfl . .1 mi . ; oni
Iril C; i sba
— j Tourism B.I.D.
i Advisory
COPY
Rev
05/14/08
FINANCIAL SECTION
MHM Mayer Hoffman McCann RC.
An Independent CPA Firm
Conrad Government Services Division
2301 Dupont Drive, Suite 200
Irvine, California 92612
949-474-2020 ph
949-263-5520 fx
www.mhm-pc.com
City Council
City of Carlsbad, California
INDEPENDENT AUDITORS' REPORT
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, as of and for the year ended
June 30, 2008, which collectively comprise the City's basic financial statements, as listed in the table of contents. These
financial statements are the responsibility of the management of the City of Carlsbad. 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 of Carlsbad, California, as of June 30, 2008, and the respective changes in financial position and
cash flows, where applicable, of the City of Carlsbad, California and the respective budgetary comparison information for
the general fund of the City for the year then ended in conformity with accounting principles generally accepted in the
United States of America.
As described further in note 17 to the financial statements, the City changed its method of accounting for postemployment
benefits for fiscal years ending on or after June 30, 2008.
The information identified in the accompanying table of contents as management's discussion and analysis is not a
required part of the basic financial statements, but is supplementary information required by accounting principles
generally accepted in the United States of America. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
City of Carlsbad's basic financial statements. The introductory section, combining and individual nonmajor fund financial
statements and other schedules, and statistical tables are presented for purposes of additional analysis and are not a
required part of the basic financial statements. The combining and individual nonmajor fund financial statements and other
schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The
introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly, we express no opinion on them.
15
MHM
City Council
City of Carlsbad, California
Page Two
In accordance with Government Auditing Standards, we have also issued a report dated October 15, 2008 on our
consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions
of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of
our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing the results of our
audit.
Irvine, California
October 15,2008
16
Management's Discussion and Analysis
As management of the City of Carlsbad ("City"), we offer readers of the City's financial statements this narrative
overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2008. 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
1
Required
Supplementary
Information
This section of the annual report consists of
four parts - management's discussion and
analysis (this section), the basic financial
statements, required supplementary
information, and an optional section that
presents combining statements for non-
major governmental funds and internal
service funds. The basic financial
statements include two kinds of statements
that present different views of the City.
• The first two statements are
Government-wide Financial Statements
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.
> Proprietary Fund Statements offer short- and long-term, financial information about the activities the City
operates like businesses, such as the water and wastewater 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 fund statements that provides detail about our non-major governmental funds,
internal service funds, and fiduciary funds, which are added together and presented in single columns in the basic
financial statements.
The remainder of this overview section of management's discussion and analysis explains the structure and contents
of each of the statements.
. '
1
Government-
wide Financial
Statements
"' 1
Fund
Financial
Statements
Notes
to the
Financial
Statements
Summary O Detail
17
Government-wide Financial Statements
The Government-wide Financial Statements report information about the City as a whole using accounting methods
similar to those used by private-sector companies. The Statement of Net Assets includes all of the City's assets and
liabilities. All of the current year's revenues and expenses are accounted for in the Statement of Activities
regardless of when cash is received or paid.
The two Government-wide Financial Statements report the City's net assets and how they have changed. Net assets
• the difference between the City's assets and liabilities - are one way to measure the City's financial health, or
position. Over time, increases or decreases in the City's net assets are an indicator of whether the City's financial
health is improving or deteriorating, respectively. One needs to consider additional non-financial factors, such as
changes in the City's property tax base and the condition of the City's infrastructure, to assess the overall health of
the City.
The Government-wide Financial Statements of the City are divided into two categories:
• Governmental activities - Most of the City's basic services, such as police, fire, public works, community
services, community development, and general administration, are included here. Taxes, revenues from other
governments and agencies, income from property and investments, grants and contributions, and charges for
services finance most of these activities.
• Business-type activities - The City charges fees to customers to cover the costs of certain services it provides.
The City's water, wastewater, solid waste services and municipal golf course 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. These statements are presented on a
modified accrual basis of accounting. A reconciliation between the long-term and short-term focus of the
Government-wide Financial Statements is provided immediately following each statement. There are currently
four governmental fund types being used by the City: the General Fund, special revenue funds, debt service
funds and capital project funds.
• 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, and are presented on an accrual basis of accounting.
> 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, wastewater, trash and golf services. In both the Government-wide Financial
Statements and the Fund Financial Statements, these funds are shown under business-type activities.
18
> We use internal service funds to report activities that provide services and supplies for the City's other
programs and activities - such as fleet, self-insured benefits, and information technology.
• Fiduciary funds - These funds are used to account for situations where the City's role is purely custodial, such
as the receipt, temporary investment, and remittance of fiduciary resources to individuals, private
organizations, or other governments. All of the City's fiduciary activities are reported in a separate Statement
of Fiduciary Assets and Liabilities. We exclude these activities from the City's Government-wide Financial
Statements because the City cannot use these assets to finance its operations.
Financial Analysis of the City as a Whole
Net Assets
The City's combined net assets as of June 30, 2008, as shown below, were $1.6 billion. The City's net assets
increased by $140.1 million during the current fiscal year. Approximately 26% of this increase represents the
degree to which increases in operating revenues have exceeded increases in operating expenses. Approximately
74% represents one-time capital grants and contributions received by the City for the purchase and acquisition of
infrastructure and other capital assets.
CITY OF CARLSBAD'S NET ASSETS
(in millions of dollars)
Governmental Business-Type
Activities
Current and other assets
Capital assets
Total assets
Long-term debt outstanding
Other liabilities
Total liabilities
Net assets
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total net assets
2007
$474.8
658.4
1,133.2
13.1
20.0
33.1
646.0
221.4
227.8
$1,095.2
2008
$502.9
725.0
1,227.9
11.9
16.3
28.2
713.0
235.8
250.9
$1,199.7
Activities
2007
$109.0
305.4
414.4
54.0
23.5
77.5
253.6
47.2
33.6
$334.4
2008
$90.0
344.1
434.1
53.0
11.1
64.1
292.7
44.7
32.6
$370.0
Total
2007
$583.8
963.8
1,547.6
67.1
43.5
110.6
899.6
268.6
261.4
$1,429.6
2008
$592.9
1,069.1
1,662.0
64.9
27.4
92.3
1,005.7
280.5
283.5
$1,569.7
Total
Percentage
Change
2007-08
1.6%
10.9%
7.4%
-3.3%
-37.0%
-16.5%
11.8%
4.4%
8.5%
9.8%
As noted earlier, net assets may serve over time as a useful indicator of the City's financial position. For the City of
Carlsbad, assets currently exceed liabilities by $1.6 billion at the close of the most recent fiscal year.
A large portion of the City's net assets (64%) reflects its investment in capital assets (i.e., land, buildings,
machinery, equipment, and infrastructure); less any related debt used to acquire those assets that are still
outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not
available for future spending. Although the City's investment in its capital assets is reported net of related debt, it
should be noted that the resources needed to repay this debt must be provided from other sources since the capital
assets themselves usually won't be used to liquidate these liabilities.
An additional portion of the City's net assets (18%) represents resources that are subject to external restrictions on
how they may be used. The remaining balance of unrestricted net assets ($283.5 million) may be used to meet the
government's ongoing obligations to citizens and creditors.
Just under 55% of the $250.9 million in unrestricted governmental activities net assets is attributable to the General
Fund. Net assets invested in capital assets net of related debt for the City's business activities increased by $39.1
19
million during Fiscal Year 2007-08 due primarily to the receipt of developer donated assets during the year and the
completion of the City's new municipal golf course. A portion of business-type net assets represents the City's
municipal golf course. At the end of Fiscal Year 2007-08, there is a large deficit in unrestricted net assets for the
Golf Course Fund. This is the result of the General Fund advancing money to the Golf Course Fund for the
construction of the course.
Changes in Net Assets
The condensed summary of activities, which follows, shows that net assets increased by $140.1 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, $18.4 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
Golf course
Wastewater
Solid waste
Total expenses
Excess (deficiency) before transfers
Transfers
Increase (decrease) in net assets
Beginning net assets
Ending net assets
2007
$17.2
17.6
49.3
49.3
27.4
22.6
21.5
1.3
206.2
17.2
38.3
13.9
17.9
37.3
0.7
-
-
-
-
125.3
80.9
0.4
81.3
1,013.9
$1,095.2
2008
$21.8
11.4
73.7
52.7
27.0
23.6
25.0
0.5
235.7
14.5
42.8
15.7
18.9
36.0
0.7
-
-
-
-
128.6
107.1
(2.6)
104.5
1,095.2
$1,199.7
Activities
2007
$31.7
2.3
25.1
2.5
-
-
7.6
-
69.2
-
-
-
-
-
-
42.9
0.2
9.6
1.9
54.6
14.6
(0.4)
14.2
320.2
$334.4
2008
$38.9
1.3
30.2
2.7
-
-
9.0
-
82.1
-
-
-
-
-
-
28.8
7.3
10.4
2.6
49.1
33.0
2.6
35.6
334.4
$370.0
Total
2007
$48.9
19.9
74.4
51.8
27.4
22.6
29.1
1.3
275.4
17.2
38.3
13.9
17.9
37.3
0.7
42.9
0.2
9.6
1.9
179.9
95.5
-
95.5
1,334.1
$1,429.6
2008
$60.7
12.7
103.9
55.4
27.0
23.6
34.0
0.5
317.8
14.5
42.8
15.7
18.9
36.0
0.7
28.8
7.3
10.4
2.6
177.7
140.1
-
140.1
1,429.6
$1,569.7
Total
Percentage
Change
2007-08
24.1%
-36.2%
39.7%
6.9%
-1.5%
4.4%
16.8%
-61.5%
15.4%
-15.7%
11.7%
12.9%
5.6%
-3.5%
0.0%
-32.9%
3550.0%
8.3%
36.8%
-1.2%
46.7%
46.7%
7.2%
9.8%
20
City of Carlsbad
Sources of Revenue for Fiscal Year 2007-08
$317.8 Million
Other (1%)
Contributions from
Property Owners (33%)
Income from Property and
Investments (11%)
Other Taxes (3%)
Property Taxes (17%)
Charges for Services (19%)
Just under 44% of the revenues of the
City's governmental funds are generated
through taxes collected (property, sales,
transient occupancy tax, etc.), and just
over 47% of the City's business-type
revenue is generated through charges for
services. The chart to the right
graphically depicts the City's revenue
sources.
The opening of the City's new municipal
golf course added $6.3 million in charges
for services during the year. A major
factor in the large decrease in operating
grants and contributions was the $6.3
million reimbursement the City received
from the Federal Highway Administration
for reimbursement of the 2005 winter
storm damage in the City last fiscal year.
Developers in La Costa Greens, La Costa Oaks, La Costa Ridge, Bressi Ranch, Thompson/Tabata and the Palomar
Forum contributed over $71 million in infrastructure to the City in Fiscal Year 2007-08, accounting for the large
increase in capital contributions. Income from property and investments was impacted by a 206% increase in the
fair market value of investments adjustment made at June 30, 2008 as compared to the previous year end adjustment
(GASB 31 application), a 2% increase in the average yield on the Treasurer's portfolio for the fiscal year, and an
overall increase in the City's total cash of just over 2% for the year.
The total cost of all programs and services was just under $178 million in Fiscal Year 2007-08. Some of the
significant factors affecting the change in expenses from Fiscal Year 2006-07 to Fiscal Year 2007-08 included the
opening of the City's municipal golf course, the transfer of funds from the Self Insured Benefits Fund for the
funding of retiree healthcare costs as required under GASB 45 (an increase in governmental activity expenses), and
the City settled a lawsuit regarding a landslide at the Marbella Condominiums for $11.3 million in the prior fiscal
year (a decrease in Carlsbad Municipal Water District expenses). The City's expenses cover a range of services:
TOT (4%)
Federal Aid (2%)
State Aid (1%)
Sales Tax (9%)
General Government (8%)
This segment of the City is divided into two major
groups, the Policy and Leadership group and the
Administrative Services group. The Policy and
Leadership group encompasses all elected
officials, the chief executive offices for the City
and the Communications team. The
Administrative Services group includes Finance,
Human Resources, Information Technology, Risk
and Records Management. Also included in
General Government are any Council directed
special projects including repairing storm
damages and sink hole repairs.
Public Safety (24%)
Public Safety has always been a top City Council
priority. This major service area includes the
Police Department, whose goal is to provide
quality service to the community to ensure the
City of Carlsbad
Functional Expenses for Fiscal Year 2007-08
$177.7 Million
Wastewater General Government
Solid Waste
2%
Golf Course
4%
Public Works
20%
Public Safety
24%
Community
Development
9%
Community Services
11%
21
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 Land Use Planning,
Geographic Information Systems (GIS), Economic Development and Real Estate Management, the Hiring
Center, Housing and Redevelopment, and Building Inspection departments.
Community Services (11 %)
Community Services consists 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 (20%)
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, Facilities
Maintenance, Building Maintenance, Street Lighting and Traffic Sign and Signal Maintenance programs.
Golf Course (4%)
The City of Carlsbad opened a municipal golf course in the summer of 2007, which has further enhanced the
tourism attractions the City offers. The municipal golf course, The Crossings at Carlsbad, is an 18-hole,
destination golf course set in the rolling hills and canyons of Carlsbad. With ocean views, a high quality golf
experience, a first class restaurant and clubhouse, and linkages to hiking trails, The Crossings at Carlsbad is a
destination spot for golfers and non-golfers alike.
Solid Waste (2%)
The Solid Waste Division of the Public Works Department promotes cost-effective solid waste management
programs through recycling, source reduction, composting, solid waste transfer, and other non-traditional
programs. In addition, funding for Citywide programs related to storm water protection from pollution;
coordination with local, State and federal governments; and compliance with the Existing Development section
of the National Pollutant Discharge Elimination System (NPDES) Urban Storm Water Permit issued by the San
Diego Regional Water Control Board are accomplished in this area.
Water Operations (16%)
The Carlsbad Municipal Water District, a subsidiary of the City of Carlsbad, provides potable and recycled
water service to approximately 85% of the City (approximately 27,000 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.
Wastewater Operations (6%)
The City of Carlsbad operates and maintains a sanitary sewer collection system, which covers approximately
65% of the geographic area of the City. Sewage is treated by the Encina Wastewater Treatment Plant, a
facility jointly owned by the cities of Carlsbad and Vista, the Leucadia County Water District, the Vallecitos
Water District, the Buena Vista Sanitation District, and the Encinitas Sanitary District.
22
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 $104.5 million. This increase was generated by total
revenues of governmental activities of $235.7 million ($106.9 million in program revenues and $128.8 million in
general revenues) offset by $128.6 million in total costs of governmental activities and a $2.5 million transfer to the
Water Funds and a $139,000 transfer to the Solid Waste Fund.
The table below 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).
Governmental Activities
Program Revenues and Expenses
Fiscal Year 2007-08
(in millions)
0 Program Revenues
E3 Expenses
General Public Safety Community Community Public Works
Government Development Services
Revenues are generated through several sources to cover the cost of the City's programs. These revenues include
fees and charges paid by those who directly benefit from the programs ($21.8 million), grants and contributions
from other governments and organizations which subsidize certain programs ($85.1 million), and taxes and other
revenues (such as income from property and investments) received by the City to pay for the "public benefit"
portion, totaling $128.8 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). Many of these projects will begin construction once
sufficient funds have been accumulated. In addition, the donation of capital assets from developers ($44.7 million
this fiscal year) is reflected in the program revenues for Public Works. 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. Several master planned communities have recently been completed or are near
completion (Bressi Ranch, La Costa Greens, and La Costa Ridge), and these developers recently dedicated
infrastructure to the City as required to develop in the City.
23
Business-Type Activities
Business-Type Activities
Program Revenues and Expenses
Fiscal Year 2007-08
(in millions)
0 Program Revenues
0 Expenses
Water Golf Course Wastewater Solid Waste
Program revenues for the City's business-type activities totaled $82.1 million for the year, while functional expenses
equaled $49.1 million. The City's new municipal golf course opened to the public during the summer of 2007. As
this golf course is brand new, it was anticipated that there will be some additional "grow-in" costs during the first
couple years of operation. The solid waste program was the only other program where program expenses exceed
program revenues. The costs in this program increased during the year in order to comply with the 2007 Storm
Water Permit requirements; an unfunded State mandate. During the year, an additional 2.5 positions were added to
the program in order to meet the requirements of the permit.
Water and wastewater program revenues are higher than program expenses primarily due to capital contributions in
the form of capital connection fees, and developer constructed assets donated to the City. Capital construction
expenses are spread over the life of an asset as annual depreciation charges (program expenses).
A more detailed discussion of each of the enterprises can be found in the Proprietary Funds Section.
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 Comprehensive Annual Financial Report (CAFR), no changes were made in the
reporting of any funds.
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 balances may serve as a useful measure of a government's net resources available for spending at
the end of the fiscal year.
24
Reserved for Advances to
Other Funds
($59.5 million)
Governmental Fund Balances
(in millions)
$453 Million
Reserved for Other Purposes ^^ | ^ Undesignated ($ 110.1 million)
($19 million)
Designated for Future Continuin
Appropriations
($133.7 million)
($113.8 million)
Reserved to Liquidate Contracts and
Purchase Orders
($16.9 million)
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of
$453 million, an increase of $34.9 million in comparison with the prior year. Approximately 24% of this amount
($110.1 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 -
25%, (2) for future programs - 30%, (3) advances to other funds - 13% (4) to liquidate contracts and purchase orders
of the prior period - 4%, or (5) for a variety of other restricted purposes - 4%.
25
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 $121 million, a
decrease of $1.6 million.
The unreserved fund
balance portion of the
General Fund was
$64.5 million, of which
$18.4 million was
designated for future
programs and service
enhancements.
The decrease in revenues
was primarily due to
reimbursements received
from the Federal Highway
Administration (FHWA)
for the 2005 winter storm
damage in the City during
the prior fiscal year; the
effects of a weak housing
market (both resales and
the construction of new
homes) on development
related services revenues,
building permits and real
property transfer taxes; a reduction in the franchise fee paid by San Diego Gas & Electric (from reduced sales to the
Cabrillo Power Plant); and interest received from the Golf Course Fund on the advance from the General Fund in the
prior fiscal year (the General Fund received no advance repayments from the Golf Course Fund during the current
fiscal year).
The increase in General Fund expenditures was driven by the following factors:
• Normal salary and benefit increases.
• The purchase of a fire rescue ambulance and replacement equipment.
• The purchase of furniture and equipment for the Senior Center expansion.
• An increase in routine and emergency traffic signal maintenance.
• The upgrading of the City's financial information system.
• Costs related to the 2007 fires in San Diego County.
• Costs related to the Tamarack Avenue sink hole emergency repair.
• The partial funding of the Joint First Responders Training Facility.
One major governmental fund, the Redevelopment Debt Service Fund, had a negative fund balance of just over
$12.1 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. Over the past couple of fiscal years, the agency
has begun to repay the $15.5 million advance back to the City's General Fund, as the tax increment collected within
the redevelopment area grows.
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
(in millions of dollars)
IN FUND BALANCE
Total
Increase Percentage
Total (Decrease)
Revenues
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Income fiomproperty and investments
Miscellaneous
Total revenues
Expenditures
General government
Interdepartmental charges
Public safety
Community development
Community services
Public works
Total expenses
Excess (deficiency) before transfers
Other financing sources (uses)
Transfers in
Transfers out
Increase (decrease) in fund balance
Beginning fund balance
Ending fund balance
2007
$94.1
9.3
2.1
7.6
1.3
5.9
0.7
121.0
17.8
(2.1)
39.6
6.9
16.4
20.3
98.9
22.1
1.4
0.0
(7.5)
16.0
106.6
$122.6
2008
$98.4
3.3
2.0
7.5
1.3
5.1
0.9
118.5
13.8
(2.3)
43.5
7.5
16.9
22.1
101.5
17.0
0.0
0.6
(19.2)
(1.6)
122.6
$121.0
2007-08
$4.3
(6.0)
(0.1)
(0.1)
0.0
(0.8)
0.2
(2.5)
(4.0)
(0.2)
3.9
0.6
0.5
1.8
2.6
Change
4.6%
-64.5%
-4.8%
-1.3%
0.0%
-13.6%
28.6%
-2.1%
-22.5%
9.5%
9.8%
8.7%
3.0%
8.9%
2.6%
26
Of the five remaining major governmental funds, only one fund saw their fund balance decline during the fiscal
year. The Assessment and Other Districts Funds purchased several large infrastructure assets including Poinsettia
Lane, Faraday Avenue and Melrose Drive.
The four 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 predominantly designated for the construction or
purchase of future capital assets.
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.
$40
$30
$20
$10-
SO-1
Business-Type Acthities
Operating Revenues and Expenses
Fiscal Year 2007-08
(in millions)
-&mfS RxxS
V/8888 j JcSSJy%m \y/ji\ wjim ........__
Water Golf Course Wastewater Solid Waste
D Op crating Revenues
53 Operating Expenses
The Carlsbad Municipal Water District (CMWD) funds had an operating loss of approximately $3.8 million for the
year. Although water sales increased by almost 4% for the year from a combination of a 9% rate increase and a 5%
decrease in the number of units sold, operating expenses of $28.1 million exceeded operating revenues by $3.8
million. Operating expenses were actually down compared due to the prior year due to fact that the CMWD settled
a lawsuit (including attorney costs) regarding a landslide at the Marbella Condominiums for $11.3 million. Factors
affecting this year's operating expenses included increased Encina plant operation expenses for operating the City's
new recycled water facility on a full-time basis; a 7% per unit cost increase for purchased water; a 10% increase in
fixed charges from the Metropolitan Water District and the San Diego County Water Authority (suppliers of the
City's potable water); and increased depreciation expenses due to the recently completed recycled water facility and
other newly acquired/constructed water infrastructure assets. Investment earnings and property tax receipts
completely offset the operating loss, resulting in income before transfers and capital contributions of $2 million.
The City's new municipal golf course (The Crossings at Carlsbad) was opened to the general public in August 2007.
The Golf Course Fund issued $18.5 million in bonds during the previous fiscal year, with the first debt service
payment made in September 2007. The City has also advanced the Golf Course Fund $48.6 million to help fund the
construction of the course. The loan from the City and the bond proceeds are anticipated to be repaid through user
fees and other revenues of the golf course. If the golf course net revenue is not sufficient to cover the debt service
payment, the General Fund will make the payment. In the first year of operation, the Golf Course Fund had an
operating loss of $600,000. As this was the first year of operation, it was anticipated the fund would have an
operating loss due to "grow-in" costs.
The Wastewater Funds had an annual operating loss of approximately $1.9 million for the fiscal year. Total
revenues from operations increased 4% from the previous year; the result of a 10.6% rate increase, partially offset
by additional revenues received from the City of Vista last fiscal year to reimburse the City for their share of a
wastewater project. However, this increase in revenues was offset by a 9% increase in wastewater expenses
27
including higher staffing and chemical costs related to the new Encina office building; increased depreciation
expenses as a result of recently acquired wastewater infrastructure, facilities and equipment; the filling of previously
vacant positions; costs related to a new work order system; and costs related to the wastewater rehab at the Agua
Hedionda Lagoon. Non-operating revenues (investment earnings) more than offset the operating loss, resulting in a
gain of $1.4 million for the year.
Solid Waste operations and the Storm Water Protection Program are combined on the City's financial reports, and
showed a slight operating loss for the year of $310,000. Revenues increased in the current year by approximately
13%. This increase is the result of a 7.8% rate increase and additional customers receiving solid waste services in
the City. Operating costs increased 36% due to the additional staff added to assist with the compliance of the storm
water permit. These costs included personnel expenses (salaries and benefits), additional maintenance and
operations expenses, and two additional trucks.
Unrestricted net assets for the Water, Golf Course, Wastewater, and Solid Waste operations at the end of the year
amounted to $32.6 million, or approximately 9% of the net assets of these proprietary funds. These assets will be
used for future rate stabilization efforts, any emergency situations and the replacement of infrastructure assets.
Approximately 12% of the net assets of all the proprietary funds are restricted for future capital construction of new
water and wastewater infrastructure assets. As the funding for the replacement of infrastructure assets is not
restricted, it is reflected in the Statement of Net Assets as unrestricted. However, the City accounts for these
amounts in separate funds, and monitors the balances maintained to ensure that water and wastewater assets can be
replaced when needed. The large unrestricted net assets deficit balance in the Golf Course Fund represents funds
advanced from the City's General Fund that were used for the construction and pre-opening costs of the municipal
golf course.
General Fund Budgetary Highlights for Fiscal Year 2008
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 a total of $860,000 to reflect the net
effect of the following changes:
• A slowing down in residential (both construction and resales), industrial and commercial development
impacting property taxes and real property transfer taxes.
• A reduction in new car sales, a large contributor to the City's sales tax base.
• The impacts on TOT from continued strength in the tourism industry and the addition of the Sheraton,
Homewood Suites and Hampton Inn hotels.
• Additional reimbursements from the Office of Emergency Services and the Federal Highway Administration
for damage from the 2005 winter storms.
• Increased charges for engineering services from the development activities at Robertson Ranch, Cantarini
Ranch and Holly Springs.
The increase from the total original expenditure budget to the final budget amounted to $1.4 million, due
predominantly to:
• Appropriating funds received from developers during the year for developer-funded studies.
• Budgeted expenditures associated with new grant revenues.
• Appropriating donations received.
• Appropriating additional sales tax revenues received as a result of sales tax auditing.
• The purchase of wetland for mitigation purposes.
• Additional costs associated with the San Diego wildfires.
28
The difference between the final budgeted expenditures and the actual expenditures for the year on a budgetary basis
of $19 million can be generally summarized as follows:
• $19 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.
•> $ 18.4 million in "savings" are planned to be used for:
=> Human resources information system software upgrade.
=> Fire apparatus equipment.
=> Innovation projects throughout the City.
=> Public outreach efforts regarding Envision Carlsbad and the proposed power plant.
=> Parking lot improvements at Ponto Beach and the Dove Library.
=> Technology purchases in Public Works to assist with mapping, inventory, and to improve efficiencies.
=> Recycled water retrofits at several City parks and facilities.
=> Future replacement of the Police Department's 800 MHz radios.
=> Enhancements to the Development Services Counter.
=> Development of a financial planning, pricing and decision-making model for Recreation programs.
=> Enhancing security features at the various parks throughout the City.
For purposes of budgetary presentation, actual revenues have been adjusted to exclude unrealized gains and losses in
investments pursuant to GASB 31, and transfers in have been adjusted to reflect any transfer that was approved
through the budget process as a revenue, but recorded as an advance in the financial statements; 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.
Capital Asset and Debt Administration
Capital Assets
At the end of Fiscal Year 2007-08, the City had recorded investments of just under $1.1 billion 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 are required per GASB 34.
CITY OF CARLSBAD'S CAPITAL ASSETS
(in millions of dollars)
Governmental Business-Type
Activities
Land
Construction in progress
Buildings and other structures
Improvements other than buildings
Machinery and equipment
Infrastructure
Wastewater treatment facility
Accumulated depreciation
Total
2007
$128.1
111.3
70.2
30.2
26.5
447.0
-
813.3
(154.9)
$658.4
2008
$128.1
134.2
70.5
39.2
27.0
494.1
-
893.1
(168.1)
$725.0
Activities
2007
$8.7
81.4
20.2
5.6
2.0
216.3
44.9
379.1
(73.7)
$305.4
2008
$8.7
13.4
40.2
53.0
2.5
256.0
49.9
423.7
(79.6)
$344.1
Total
2007
$136.8
192.7
90.4
35.8
28.5
663.3
44.9
1,192.4
(228.6)
$963.8
2008
$136.8
147.6
110.7
92.2
29.5
750.1
49.9
1,316.8
(247.7)
$1,069.1
Total
Percentage
Change
2007-08
$0.0
(45.1)
20.3
56.4
1.0
86.8
5.0
124.4
(19.1)
$105.3
Change
2007-08
0.0%
-23.4%
22.5%
157.5%
3.5%
13.1%
11.1%
10.4%
8.4%
10.9%
29
This year's major capital asset additions included:
• The completion of the City's municipal golf course and clubhouse.
• Developer-dedicated streets, drainage facilities, traffic signals, water and sewer lines and streetlights.
• Installation of synthetic turf at Stagecoach Park.
• Completion of Pine Avenue Park.
• Construction of the Library Learning Center.
• Construction of Fire Station #6.
• Acquisition of the westerly extension of Faraday Avenue.
• Continued development of Rancho Santa Fe Road.
• Completion of the South Agua Hedionda Interceptor Phase II sewer project.
• Continued expansion at the Encina facility.
• Several waterline projects.
In addition to carrying forward appropriations of $144.5 million for previously budgeted projects, the City's Fiscal
Year 2008-09 capital budget appropriates an additional $57.4 million for capital projects. These additional
appropriations are principally for the pavement management program, the widening of El Camino Real, the
replacement of the Carlsbad Boulevard Encinas Creek Bridge, miscellaneous street projects, miscellaneous park
projects, enhancing the sewer collection system, additional water lines, 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.
Long-Term Debt
At year-end, the City had $64.9 million in bonds, certificates of participation, loans, capital leases and agreements, a
decrease of $2.2 million from last year, as shown in the table below. Although additional loans were made by the
State Water Resources Control Board to the Carlsbad Municipal Water District for construction of the new recycled
water facility and new capital leases were entered into for the purchase of golf course equipment, loan payments
made on all of the City's outstanding debt offset these small increases in debt. 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 Business-Type
Activities
Bonds
Certificates of participation
Loans
Installment purchase agreement
Obligations under capital leases
Less: Deferred charges/discounts
Total
2007
$11.7
1.4
-
-
-
-
$13.1
2008
$11.2
0.7
-
-
-
-
$11.9
Activities
2007
$18.5
-
29.1
6.1
0.7
(0.4)
$54.0
2008
$18.5
-
28.5
5.5
1.0
(0.5)
$53.0
Total
2007
$30.2
1.4
29.1
6.1
0.7
(0.4)
$67.1
2008
$29.7
0.7
28.5
5.5
1.0
(0.5)
$64.9
Total
Percentage
Change
2007-08
-1.7%
-50.0%
-2.1%
-9.8%
100.0%
25.0%
-3.3%
30
Economic Factors and Next Year's Budgets and Rates for Fiscal Year 2009
• The State of California adopted its Fiscal Year 2008-09 Annual Budget with the following provisions affecting
the City:
> 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 2008-09 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.
> The City will be required to "contribute" approximately $300,000 from its Village Area Redevelopment
Funds to the State's Education Revenue Augmentation Fund.
> The City will receive reduced Citizens Option for Public Safety (COPS) funding, booking fees and
California Library Services Act (CLSA) Grant funding, totaling approximately $88,000.
• Net assessed values in the City stand at almost $24.3 billion, more than double what they were just seven years
ago.
• Due to the tightening in the credit markets, sales tax revenues are forecasted to grow minimally in the Fiscal
Year 2008-09 Budget.
• PERS rates for the miscellaneous plan have increased slightly for Fiscal Year 2008-09 from 20.5% to 20.8%,
and have increased from 28.5% to 29.6% for the safety plan.
• The Encina power plant continues to be reassessed downward annually due to a reduction in electricity
generated, affecting tax increment revenues in the South Coastal Carlsbad Redevelopment Area and the
franchise fees received by the City.
• The Consumer Price Index (CPI) for the western region of the United States for urban households increased by
2.5% during the twelve months ended November 30, 2007.
• The total number of housing units in Carlsbad grew by 1.3% in Calendar Year 2007, impacting budgeted
expenditures for Fiscal Year 2008-09.
• Median home prices in Carlsbad have decreased by 7.3% from April 2007 ($750,000) to April 2008
($695,000).
• Due to the slow economy, forecasted revenues for development related activities have been reduced
significantly.
• The expansion of the La Costa Resort and the addition of three new hotels will impact future TOT revenues.
• Due to the overall downturn in the economy, City departments were not given additional maintenance and
operational funding to cover changes in the CPI and growth in the City.
• Through Memorandum of Understandings (MOUs), the Carlsbad City Employees' Association (CCEA) will
receive a 3.2% salary increase January 1, 2009; the Carlsbad Police Officers' Association (CPOA) will receive
a 5% salary increase January 1, 2009; and the Carlsbad Firefighters' Association will receive a 3.4% salary
increase January 1, 2009.
These factors were considered when preparing the City of Carlsbad's General Fund budget for Fiscal Year 2008-09.
Budgeted expenditures are expected to increase 1.8% to $118.3 million. The increase is mainly due to an increase in
personnel costs which are partially offset by a decrease in capital outlay requests. 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. The primary factor in the increase in personnel costs is due to labor contracts with the City's employee
groups. The 1% increase in budgeted expenditures is the net result of additional costs related to the opening of the
Library Learning Center and the Poinsettia Park tennis courts, and cost of living adjustments made to salaries and
benefits, offset by several one-time budget items that were included in the 2007-08 Operating Budget. Adding to
the adopted budget of $118.3 million for the General Fund, just over $18.4 million in unspent Fiscal Year 2007-08
budgeted expenditures will be carried over to Fiscal Year 2008-09, as well as $6.6 million in open encumbrances as
of June 30, 2008.
As the City is approaching the buildout 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 (IRF). With this fund, the City sets aside money on an annual basis
for major maintenance and replacement of its infrastructure. In the Fiscal Year 2008-09 Operating Budget, the City
has budgeted a $7.8 million transfer from the General Fund to the IRF, to meet future needs.
31
During the current fiscal year, the unreserved, undesignated fund balance in the General Fund decreased by $6.1
million to $46.1 million due to a $10.9 million transfer made to the General Capital Construction Fund to assist in
the construction of the new Joint First Responders Training Facility.
With the exception of the Public Facilities Construction Fund (PFF) and the Planned Local Drainage Funds (PLDA),
there appears to be sufficient revenues projected to build the projects listed in the Fiscal Year 2008-09 Capital
Improvement Program (CIP). A large increase in the cost of construction materials has occurred over the past four
years, pushing up the cost of all of the City's projects. This cost escalation, as well as the scope or new projects, has
contributed to the projected shortfall of $1.5 million at buildout in the PFF Fund and $7.6 million in the PLDA
Funds. The PFF Fund shortfall at buildout in the Fiscal Year 2008-09 CIP is down from the $12.7 million projected
at buildout in the Fiscal Year 2007-08 CIP. This was achieved by reevaluating the proposed projects to be funded
through the PFF Fund, and finding alternative funding sources for some of these projects. The PFF Fund is not
anticipated to be in a deficit position until 2019, and City staff will continue to monitor the projected deficit in this
fond, and bring additional solutions forward at the appropriate time. This will allow projects to be constructed from
this funding source while the City evaluates future options. City staff is currently preparing updates to the PLDA
Fee program in order to cover that deficit. It is also important to note that as the City approaches buildout, there are
fewer available development projects to pay those fees. While this is not an immediate problem, it is an indication
that the City may not have the money to build all of the projects listed under those programs.
The City's business-type activities reflect the following:
• The combined fixed and variable cost of water purchased from the San Diego County Water Authority is
projected to rise over 13% in Fiscal Year 2008-09. Therefore, water rates may increase during the middle of
Fiscal Year 2008-09 once the City Council evaluates their options.
• Sewer rates may also be adjusted in Fiscal Year 2008-09 at the same time as the water rate adjustments, to
assist with higher costs associated with the Encina Wastewater Plant, higher depreciation expenses from the
addition of completed facilities to the inventory, and continued implementation of the Waste Discharge
Requirement Program (WDR).
• The golf course budget will be brought forward on a calendar year basis in December 2008.
• No projected significant changes in other revenue sources.
Contacting the City's Financial Management
This financial report is designed to provide the 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, 2008
Primary Government
ASSETS
Cash and investments
Receivables:
Taxes
Accounts, net
Other
Due from other governments
Inventories
Prepaid items
Loan and reimbursement receivables
Internal balances
Subtotal
Capital assets:
Land
Construction in progress
Buildings and other structures
Improvements other than buildings
Machinery and equipment
Infrastructure
Wastewater treatment facility
Less accumulated depreciation
Total capital assets
Total assets
Governmental
Activities
$ 429,985,051
6,080,600
708,517
1,044,500
1,484,085
200,431
596,832
13,209,596
49,599,820
502,909,432
128,132,931
134,144,784
70,534,370
39,240,751
26,934,630
494,071,408
-
(168,093,020)
724,965,854
$ 1,227,875,286
Business-type
Activities
$ 131,204,210
18,005
4,424,536
43,408
2,560,586
882,090
12,173
437,510
(49,599,820)
89,982,698
8,663,600
13,410,148
40,174,429
53,052,661
2,521,015
256,013,153
49,882,937
(79,618,571)
344,099,372
$ 434,082,070
Total
$ 561,189,261
6,098,605
5,133,053
1,087,908
4,044,671
1,082,521
609,005
13,647,106
-
592,892,130
136,796,531
147,554,932
110,708,799
92,293,412
29,455,645
750,084,561
49,882,937
(247,711,591)
1,069,065,226
$ 1,661,957,356
The notes to the financial statements are an integral part of this statement.
34
CITY OF CARLSBAD
Statement of Net Assets (Continued)
June 30, 2008
LIABILITIES
Accrued liabilities
Accrued interest payable
Due to other governments
Estimated claims payable
Deposits payable
Unearned revenue
Noncurrent liabilities:
Due within one year
Due in more than one year, net of deferred
charges ($7 15,1 82) and unamortized
premiums ($28 1,740)
Total liabilities
Governmental
Activities
$ 12,082,907
211,099
847
3,213,485
219,715
518,739
1,200,000
10,740,000
28,186,792
Primary Government
Business-type
Activities
$ 2,284,196 $
532,229
6,504,804
-
923,915
799,601
2,530,889
50,483,910
64,059,544
Total
14,367,103
743,328
6,505,651
3,213,485
1,143,630
1,318,340
3,730,889
61,223,910
92,246,336
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
713,025,854
189,693,491
33,887,827
6,948,659
5,297,609
250,835,054
$ 1,199,688,494
292,684,586
44,738,346
-
-
-
32,599,594
$ 370,022,526
1,005,710,440
234,431,837
33,887,827
6,948,659
5,297,609
283,434,648
$ 1,569,711,020
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, 2008
Functions/Programs
Charges for
Expenses Services
Program Revenues
Operating
Grants and
Contributions
Capital
Grants and
Contributions
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
Waste water
Solid waste
Total business-type activities
Total primary government
$ 14,536,746
42,796,527
15,697,060
18,937,760
35,970,779
665,627
128,604,499
28,795,420
7,347,308
10,400,256
2,588,114
49,131,098
$ 177,735,597
$ 2,698,440
4,577,673
3,191,372
2,802,576
8,521,697
-
21,791,758
22,893,837
5,704,164
8,150,889
2,195,258
38,944,148
$ 60,735,906
$ 972,223
245,267
7,489,357
776,638
1,865,348
-
11,348,833
1,236,679
-
14,382
48,677
1,299,738
$ 12,648,571
$
98,763
426,013
593,071
72,590,565
-
73,708,412
19,254,723
-
10,967,847
-
30,222,570
$ 103,930,982
General revenues:
Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Business license taxes
Real property transfer taxes
Vehicle license taxes (VLF)
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
$ (10,866,083)
(37,874,824)
(4,590,318)
(14,765,475)
47,006,831
(665,627)
(21,755,496)
-
-
-
-
(21,755,496)
52,704,486
27,031,484
14,277,351
4,634,049
3,327,814
951,141
449,732
24,954,890
513,190
(2,633,987)
126,210,150
104,454,654
1,095,233,840
$1,199,688,494
Business-type
Activities
$
-
-
-
-
-
-
14,589,819
(1,643,144)
8,732,862
(344,179)
21,335,358
21,335,358
2,710,956
-
-
-
-
-
-
8,030,128
953,796
2,633,987
14,328,867
35,664,225
334,358,301
$ 370,022,526
Total
$ (10,866,083)
(37,874,824)
(4,590,318)
(14,765,475)
47,006,831
(665,627)
(21,755,496)
14,589,819
(1,643,144)
8,732,862
(344,179)
21,335,358
(420,138)
55,415,442
27,031,484
14,277,351
4,634,049
3,327,814
951,141
449,732
32,985,018
1,466,986
-
140,539,017
140,118,879
1,429,592,141
$1,569,711,020
37
CITY OF CARLSBAD
Balance Sheet
Governmental Funds
June 30, 2008
ASSETS
Cash and investments
Receivables:
Taxes
Other
Accounts, net
Due from other governments
Inventories
Prepaid items
Restricted cash and investments
Loans receivable
Advances to other funds
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accrued liabilities
Deposits payable
Due to other governments
Advances from other funds
Unearned/deferred revenue
Total liabilities
General
Fund
$ 69,644,701
5,991,203
1,009,279
589,915
11,836
23,070
56,748
-
147,244
66,034,863
$ 143,508,859
$ 5,481,951
104,007
847
-
16,949,391
22,536,196
Redevelopment Assessment Community
Debt and Other Facilities
Service Funds Districts District No. 1
$ 3,331,296 $ 13,919,918 $ 56,476,025
70,643 - 1,093
14,079
.
.
.
-
.
.
.
$ 3,401,939 $ 13,933,997 $ 56,477,118
$ - $ 115,735 $ 430,833
.
-
15,518,292
.
15,518,292 115,735 430,833
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
56,479,130
18,434,130
44,232
13,774,030
46,059,403
(12,116,353)
120,972,663 (12,116,353)13,818,262
501,804
55,544,481
56,046,285
Total liabilities and fund balances $ 143,508,859 $ 3,401,939 $ 13,933,997 $ 56,477,118
The notes to the financial statements are an integral part of this statement.
38
General
Capital
Construction
Infrastructure
Replacement
Public
Facilities
Construction
Other
Governmental
Funds
Total
Governmental
Funds
$ 65,447,026 $ 38,263,281 $ 42,200,946 $115,838,535 $405,121,728
-
-
-
20,239
-
-
-
-
1,600,021
$ 67,067,286 $ 38,263,281
-
-
62,543
-
-
-
-
-4,550,000
$ 46,813,489
17,661
21,142
53,589
1,452,010
-
378,131
659,500
13,062,352
3,643,344
$ 135,126,264
6,080,600
1,044,500
706,047
1,484,085
23,070
434,879
659,500
13,209,596
75,828,228
$ 504,592,233
$ 244,562
89,397
30,435 $ 490,574
57,472
$ 1,277,774 $ 8,071,864
58,236 219,715
847
10,710,116 26,228,408
17,038,788
333,959 30,435 548,046 12,046,126 51,559,622
4,153,549 144,797 5,600,979 28,517,883 95,442,374
-
-
-
48,735,322
-
-
-
13,844,456
66,733,327
$ 67,067,286
-
-
-
2,531,609
.
-
-
35,556,440
38,232,846
$ 38,263,281
-
-
-
40,664,464
.
-
-
-
46,265,443
$ 46,813,489
-
8,228,566
20,890
58,264,151
.
28,048,648
-
-
123,080,138
$ 135,126,264
18,434,130
8,228,566
20,890
219,514,057
46,059,403
28,048,648
(12,116,353)
49,400,896
453,032,611
$ 504,592,233
39
CITY OF CARLSBAD
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
June 30, 2008
Total fund balances - governmental funds. $ 453,032,611
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 717,626,330
Internal service funds 7,339,524
Total capital assets 724,965,854
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 24,660,603
Internal service fund net assets included as part of total capital assets (7,339,524)
Internal service fund net assets less capital assets 17,321,079
Accrued interest is not due and payable in the current period and, therefore,
is not reported in the funds. (211,099)
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. 16,343,808
A portion of the taxes receivable is not available to pay for current-period
expenditures and, therefore, is deferred in the funds. 176,241
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 (11,940,000)
Net assets of governmental activities. • $1,199,688,494
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, 2008
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Income from property and investments
Contributions from property owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Less: interdepartmental charges
Public safety
Community development
Community services
Public works
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
General
Fund
$ 98,398,973
3,335,595
1,991,521
7,527,261
1,336,293
5,062,505
-
-
865,181
118,517,329
13,764,409
(2,286,527)
43,480,471
7,539,729
16,928,940
22,115,675
-
-
-
101,542,697
Redevelopment
Debt
Service Funds
$ 2,659,546
-
-
-
-
144,547
-
-
-
2,804,093
-
-
-
3,983
-
-
-
440,000
1,267,351
1,711,334
Assessment Community
and Other Facilities District
Districts No. 1
$ - $ 2,183,432
-
-
-
-
736,362 3,237,694
12,309,177 601,047
-
-
13,045,539 6,022,173
464,488 173,962
-
-
-
-
-
16,808,230 3,030,200
-
-
17,272,718 3,204,162
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
16,974,632 1,092,759 (4,227,179)
573,000
(19,163,800)
3,400
(307,000)
(18,590,800)(303,600)
(1,616,168)
122,588,831
789,159
(12,905,512)
(4,227,179)
18,045,441
2,818,011
(463,557)
(463,557)
2,354,454
53,691,831
S 120,972,663 $ (12,116,353) $ 13,818,262 $ 56,046,285
The notes to the financial statements are an integral part of this statement.
42
General
Capital
Construction
$
657,625
-
-
-
3,047,273
-
-
48,807
3,753,705
-
-
-
-
-
2,389,696
-
-
2,389,696
1,364,009
10,868,400
-
10,868,400
12,232,409
54,500,918
$66,733,327
Public
Infrastructure Facilities
Replacement Construction
$ - $ -
1,608,037
-
-
-
2,139,557 3,233,904
3,339,539
-
-
2,139,557 8,181,480
-
-
-
-
-
382,953 5,804,987
-
-
382,953 5,804,987
1,756,604 2,376,493
7,900,000
-
7,900,000
9,656,604 2,376,493
28,576,242 43,888,950
$38,232,846 $46,265,443
Other
Governmental
Funds
$ 2,482,453
13,963,701
-
3,561,794
163,467
6,560,767
7,599,998
280,830
18,271
34,631,281
30,000
-
238,050
8,182,116
207,276
2,238,968
10,594,421
700,000
80,026
22,270,857
12,360,424
1,045,585
(13,428)
1,032,157
13,392,581
109,687,557
$123,080,138
Total
Governmental
Funds
$ 105,724,404
19,564,958
1,991,521
11,089,055
1,499,760
24,162,609
23,849,761
280,830
932,259
189,095,157
14,432,859
(2,286,527)
43,718,521
15,725,828
17,136,216
24,354,643
39,010,487
1,140,000
1,347,377
154,579,404
34,515,753
20,390,385
(19,947,785)
442,600
34,958,353
418,074,258
$453,032,611
43
CITY OF CARLSBAD
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2008
Net change in fund balances - total governmental funds.$ 34,958,353
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
35,004,147
(13,068,656)
Governmental funds do not reflect the donation of capital assets as revenues.44,693,214
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.(14,422)
The repayment of the principal of long-term debt consumes the current financial
resources of governmental funds but has no effect on net assets.1,140,000
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.21,116
Unpaid interest income on advances to other funds is not a current financial
resource, and therefore is not recognized as revenue in the funds.2,731,617
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.
(112,691)
(858,923)
(39,101)
$ 104,454,654
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, 2008
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Income from property and investments
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Less: interdepartmental charges
Public safety
Community development
Community services
Public works
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
$ 102,028,000
2,883,000
1,596,000
6,194,000
1,086,000
3,892,000
750,000
118,429,000
23,091,617
(2,570,000)
45,644,051
11,633,572
20,048,861
27,908,470
125,756,571
(7,327,571)
-
(8,621,800)
(8,621,800)
(15,949,371)
122,588,831
$ 106,639,460
Amounts
Final
$ 98,694,000
4,036,000
1,658,000
7,450,000
1,305,000
3,903,000
567,000
117,613,000
22,948,812
(2,570,000)
46,212,701
11,797,783
20,165,544
28,646,198
127,201,038
(9,588,038)
709,000
(19,471,800)
(18,762,800)
(28,350,838)
122,588,831
$ 94,237,993
Actual Amounts
(Budgetary Basis)
$ 98,398,973
3,335,595
1,991,521
7,527,261
1,336,293
4,094,671
865,181
117,549,495
14,915,428
(2,286,527)
43,885,319
9,750,157
17,672,315
24,167,018
108,103,710
9,445,785
149,960
(7,727,821)
(7,577,861)
1,867,924
122,588,831
$ 124,456,755
Variance With
Final Budget -
Over
(Under)
$ (295,027)
(700,405)
333,521
77,261
31,293
191,671
298,181
(63,505)
(8,033,384)
283,473
(2,327,382)
(2,047,626)
(2,493,229)
(4,479,180)
(19,097,328)
19,033,823
(559,040)
11,743,979
11,184,939
$ 30,218,762
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, 2008
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.
$ 117,549,495
967,834
$ 118,517,329
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.
$ 108,103,710
(6,561,013)
The notes to the financial statements are an integral part of this statement.
$ 101,542,697
47
CITY OF CARLSBAD
Statement of Net Assets
Proprietary Funds
June 30, 2008
Business-type Activities -
ASSETS
Carlsbad
Municipal
Water District
Golf
Course Wastewater
Current assets:
Cash and investments
Receivables:
Taxes
Accounts, net
Due from other governments
Inventories
Prepaid items
Total current assets
Noncurrent assets:
Cash and investments - restricted for debt service
Accrued interest - restricted for debt service
Loans and reimbursement receivables
Subtotal
Capital assets:
Land
Construction in progress
Buildings and other structures
Improvements other than buildings
Machinery and equipment
Infrastructure
Wastewater treatment facility
Less accumulated depreciation
Total capital assets (net of accumulated
depreciation)
Total noncurrent assets
Total assets
$ 60,639,055 $ 1,284,159 $ 59,249,296
18,005
2,815,568
370,250
697,869
12,173
64,552,920
-
-
-
1,909,565
10,718,506
20,231,020
2,322,549
863,474
171,732,597
-
(33,584,875)
174,192,836
174,192,836
$ 238,745,756
-
135,249
-
180,239
-
1,599,647
1,361,489
22,108
-
1,383,597
5,075,228
-
19,943,409
46,666,513
1,170,745
-
-
(208,227)
72,647,668
74,031,265
$ 75,630,912
-
1,055,349
2,190,336
3,982
-
62,498,963
953,706
21,300
437,510
1,412,516
1,678,807
2,691,642
-
4,063,599
486,796
84,280,556
49,882,937
(45,825,469)
97,258,868
98,671,384
$ 161,170,347
The notes to the financial statements are an integral part of this statement.
48
Enterprise Funds
Solid
Waste Totals
Governmental
Activities -
Internal
Service
Funds
$ 7,716,505 $ 128,889,015 $ 24,203,823
18,005
418,370 4,424,536
2,560,586
882,090
12,173
8,134,875 136,786,405
2,315,195
43,408
437,510
2,796,113
8,663,600
13,410,148
40,174,429
53,052,661
2,521,015
256,013,153
49,882,937
(79,618,571)
344,099,372
346,895,485
$ 8,134,875 $ 483,681,890
-
2,470
-
177,361
161,953
24,545,607
-
-
-
-
-
-
18,331,053
-
-
(10,991,529)
7,339,524
7,339,524
$ 31,885,131
(Continued)
49
CITY OF CARLSBAD
Statement of Net Assets
Proprietary Funds (Continued)
June 30, 2008
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
$ 791,062
140,419
4,149,119
-
1,358,963
171,940
6,611,503
Golf
Course
$ 408,701
275,683
-
-
496,926
281,181
1,462,491
Waste water
$ 599,079
116,127
2,355,685
-
675,000
470,794
4,216,685
Noncurrent liabilities:
Advance from other funds
Deferred revenue
Capital leases payable
Loans payable
Revenue bonds payable, net of deferred charges of
$398,466 and unamortized discounts of $281,740
Installment purchase agreement, net of deferred
charges of $316,716
Total noncurrent liabilities
Total liabilities
27,106,476
48,647,601
735,876
18,148,274
27,106,476 67,531,751
33,717,979 68,994,242
799,601
4,493,284
5,292,885
9,509,570
NET ASSETS
Invested in capital assets, net of related debt 145,727,397 54,229,615 92,727,574
Restricted for:
Capital assets 20,316,163 - 24,422,183
Unrestricted 38,984,217 (47,592,945) 34,511,020
Total net assets $ 205,027,777 6,636,670 $ 151,660,777
The notes to the financial statements are an integral part of this statement.
50
Enterprise Funds
Solid
Waste
Total
Proprietary
Funds
Governmental
Activities -
Internal
Service
Funds
485,354 $ 2,284,196 £ 4,011,043
532,229
6,504,804
3,213,485
2,530,889
923,915
485,354 12,776,033
952,219 49,599,820
799,601
735,876
27,106,476
18,148,274
4,493,284
7,224,528
-
-
-
-
.
952,219 100,883,331
1,437,573 113,659,364
292,684,586
44,738,346
6,697,302 32,599,594
$ 6,697,302 $ 370,022,526
7,224,528
7,339,524
.
17,321,079
$ 24,660,603
51
CITY OF CARLSBAD
Statement of Revenues, Expenses and Changes in Net Assets
Proprietary Funds
For the Year Ended June 30, 2008
Business-type Activities -
Carlsbad
Municipal
Water District
Golf
Course Wastewater
Operating revenues:
Water sales
Sewer service charges
Golf course operations
Other charges for services
Contributions from other government agencies
Miscellaneous
Total operating revenues
Operating expenses:
Encina plant operations
Purchased water
Golf course operations
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 (loss) on sale of property
Property taxes
Total nonoperating revenues
Income (loss) before transfers and capital
contributions
Transfers in
Transfers out
Capital contributions:
Capital restricted fees
Developer constructed assets
Other
Change in net assets
Total net assets at beginning of year (as restated)
Total net assets at end of year
$ 22,316,941
5,704,164
8,054,276
576,896
1,221,680
190,445
24,305,962
729,531
13,476,537
-
3,276,239
10,611,644
28,093,951
(3,787,989)
3,811,258
(689,584)
(11,885)
2,710,956
5,820,745
2,032,756
2,495,187
2,038,688
17,216,035
14,999
23,797,665
181,230,112
$ 205,027,777 5
-
-
631,153
6,335,317
-
5,804,576
208,227
916,126
6,928,929
(593,612)
279,262
(418,379)
.
-
(139,117)
(732,729)
-
-
-
(732,729)
7,369,399
; 6,636,670
96,613
14,382
97,756
8,263,027
3,129,114
-
-
2,566,142
4,500,808
10,196,064
(1,933,037)
3,493,511
(204,192)
.
-
3,289,319
1,356,282
-
1,341,550
9,626,297
-
12,324,129
139,336,648
$ 151,660,777
The notes to the financial statements are an integral part of this statement.
52
Enterprise Funds
Solid Waste
$
-
-
2,195,258
48,677
34,442
2,278,377
-
-
-
-
-
-
2,588,114
2,588,114
(309,737)
446,097
-
-
-
-
446,097
136,360
138,800
-
_
-
-
275,160
6,422,142
$ 6,697,302
Totals
$ 22,316,941
8,054,276
5,704,164
2,868,767
1,284,739
953,796
41,182,683
3,858,645
13,476,537
5,804,576
6,050,608
-
-
-
18,616,692
47,807,058
(6,624,375)
8,030,128
(1,312,155)
-
(11,885)
2,710,956
9,417,044
2,792,669
2,633,987
-
3,380,238
26,842,332
14,999
35,664,225
334,358,301
$ 370,022,526
Governmental
Activities -
Internal
Service Funds
$
-
-
14,056,377
-
54,273
14,110,650
-
-
1,775,762
1,171,296
11,127,837
993,867
6,471,979
21,540,741
(7,430,091)
1,502,456
-
140,878
(61,563)
-
1,581,771
(5,848,320)
-
(581,400)
_
-
674,888
(5,754,832)
30,415,435
$ 24,660,603
53
CITY OF CARLSBAD
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2008
Business-type Activities -
Carlsbad
Municipal
Water District
Golf
Course Waste water
Cash flows from operating activities:
Receipts from customers and users
Payments to suppliers
Payments to employees
Internal activity - payments to other funds
Claims paid
Marbella settlement
OPEB funding of accrued liability
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
Capital grants
(Purchase) sale 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
24,240,522 $ 5,570,670 $ 8,051,285
(18,783,742) (6,563,086) (5,254,907)
(3,156,616) - (1,137,016)
(2,458,449) - (1,131,475)
(11,285,000)
(1,218,156)
7,968
(12,653,473)
631,153
276,432
(84,831)
244,474
82,869
855,230
2,495,187
542,233
2,038,688
1,414,999
(6,229,043)
(1,172,574)
(689,584)
2,720,527
(1,374,754)
3,811,258
-
(5,167,583)
-
(190,923)
(418,379)
-
(5,776,885)
260,595
1,341,550
(6,562,912)
-
(640,000)
(204,192)
-
(6,065,554)
3,493,511
(7,721,782)
68,360,837
(5,601,121)
8,246,769
(1,716,813)
60,980,234
$ 60,639,055 $ 2,645,648 S 59,263,421
The notes to the financial statements are an integral part of this statement.
54
Enterprise Funds
Solid Waste
$ 2,423,178
(1,487,654)
(890,727)
(352,631)
-
-
-
83,119
-
(224,715)
138,800
-
-
-
-
-
-
446,097
360,182
7,356,323
$ 7,716,505
Totals
$ 40,285,655
(32,089,389)
(5,184,359)
(3,942,555)
-
(11,285,000)
-
(259,410)
367,269
(12,107,789)
2,633,987
542,233
3,380,238
(10,315,496)
(6,229,043)
(2,003,497)
(1,312,155)
2,720,527
(13,217,193)
8,011,461
(14,679,534)
144,944,163
$ 130,264,629
Governmental
Activities -
Internal
Service Funds
$ 14,093,422
(4,542,204)
(3,085,163)
(739,942)
(3,678,137)
-
(5,457,992)
54,273
-
(3,355,743)
(3,076,587)
140,878
(1,097,449)
-
-
-
-
(956,571)
1,501,913
(5,886,988)
30,090,811
$ 24,203,823
(Continued)
55
CITY OF CARLSBAD
Statement of Cash Flows
Proprietary Funds (Continued)
For the Year Ended June 30, 2008
Business-type Activities -
Carlsbad
Municipal
Water District
Golf
Course Wastewater
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) decrease in inventories
(Increase) decrease in prepaid items
(Decrease) increase in accrued liabilities
(Decrease) increase in accrued interest payable
(Decrease) increase in due to other governments
(Decrease) increase in estimated claims payable
(Decrease) increase in deposits payable
(Decrease) increase in deferred revenue
Net cash provided by operating activities
Noncash capital financing activities:
Capital assets contributed by other sources
Capital assets acquired under capital lease agreements
Total noncash capital financing activities
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
$ (3,787,989) $ (593,612) $ (1,933,037)
3,276,239 208,227 2,566,142
1,346,685
(127,309)
(12,173)
(13,692,257)
(135,094)
470,457
7,968
-
$ (12,653,473) $
(133,494)
(180,239)
-
337,855
-
-
276,432
-
(84,831) $
(112,143)
(79)
-
106,604
-
132,336
82,869
12,538
855,230
$ 17,216,035 $$ 9,626,297
449,614
$ 17,216,035 $ 449,614 $ 9,626,297
$ 60,639,055 $ 1,284,159
1,361,489
$ 59,249,296
953,706
(939,581)
$ 60,639,055 $ 2,645,648 S 59,263,421
The notes to the financial statements are an integral part of this statement.
56
Enterprise Funds Governmental
Activities -
Internal
Solid Waste Totals Service Funds
$ (309,737) $ (6,624,375) $ (38,995)
6,050,608 1,775,762
227,921 1,328,969 37,045
(307,627) (39,066)
(12,173) (161,953)
(142,899) (13,390,697) (4,450,686)
(135,094)
602,793
(477,850)
367,269
- 12,538 -
$ (224,715) S (12,107,789) $ (3,355,743)
26,842,332 $ 674,8
$ 26,842,332 $ 674,8
$ 7,716,505 $ 128,889,015 $ 24,203,823
2,315,195
- (939,581) -_
$ 7,716,505 $ 130,264,629 $ 24,203,823
57
CITY OF CARLSBAD
Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2008
ASSETS
Current assets:
Cash and investments
Receivables:
Taxes
Other
Prepaid items
Total current assets
Restricted assets:
Cash and investments
$ 27,806,779
30,636
75,727
557,132
28,470,274
7,846,179
Total assets 36,316,453
LIABILITIES
Accrued liabilities
Deposits held for others
Total liabilities
245,441
36,051,012
36,316,453
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, parks, 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 Infrastructure Replacement Fund capital project fund is used to account for transfers from the General Fund and
expenditures for the replacement of major infrastructure througout the City.
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 parks and fire stations necessitated by growth.
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, maintenance and
operating activities of the City's new municipal golf course.
The Wastewater enterprise funds are used to account for the operation, maintenance, and capital facility financing of the
City's wastewater 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 internal service fund. Since the City caps the amount of vacation employees are
allowed to have on the books at any point in time, for compensated absences recorded at June 30, 2008, 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, self insured dental program, 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, wastewater and solid waste revenues of the enterprise funds are recognized as earned when the services
are used.
Capital assets
Capital assets, which include land (including right-of-way), buildings, equipment and infrastructure assets (e.g., roads,
bridges, traffic signals, water and wastewater 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 capital 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
Wastewater treatment facility (including equipment) 5-75
The City has capitalized all general infrastructure assets acquired or constructed in compliance with GASB 34. In addition
the land upon which the streets and roads are constructed (right-of-way) has also been valued and capitalized.
Unearned/deferred revenue
The unearned 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, 2008, the ambulance billing receivable allowance is equal to
40% of outstanding billings at June 30, 2008, 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, 2008.
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. Long-term 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. 51, Accounting and Financial Reporting for Intangible Assets
« GASB Statement No. 52, Land and Other Real Estate Held as Investments by Endowments
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, and transfers in have been adjusted to reflect any transfer that was approved through the budget
process as a revenue, but recorded as an advance in the financial statements. 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 except for the
Redevelopment Areas 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 a portion of its 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, 2008, the LAIF performance report shows a fair value factor of .999950219. 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, 2008 the City had the following investments in its portfolio:
Treasurer's Pool investments
U.S. agencies:
Federal Home Loan Bank
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Federal Farm Credit Bank
Federal Agricultual Corporation
Tennessee Valley Authority
Housing Urban Development
Subtotal U.S. agencies
Corporate notes:
Medium-term corporate notes
Subtotal corporate notes
LA IF
Cash accounts
Total Treasurer's Pool
Investments held outside the Treasurer's Pool
Money market funds
LA IF
Guaranteed investment contracts
Subtotal debt service funds/bond proceeds
Fair Market
Value
189,372,340
113,314,375
69,360,747
29,008,325
6,108,372
2,218,195
1,034,708
410,417,062
89,411,223
89,411,223
68,235,587
2,391,693
570,455,565
21,571,716
1,676,024
1,613,206
24,860,946
%of
Total
33.1%
19.9%
12.2%
5.1%
1.1%
0.4%
0.2%
72.0%
15.7%
15.7%
12.0%
0.4%
100.0%
Modified
Duration
2.080
2.241
1.801
1.614
2.733
3.421
1.036
2.059
2.459
2.459
-
-
1.858
Other deposits
Petty cash funds
Total cash and investments
Statement of Net Assets, Primary Government
Cash and investments
Statement of Fiduciary Assets and Liabilities, Agency Funds
Cash and investments
Restricted cash and investments
Total cash and investments
1,519,448
6,260
$ 596,842,219
$ 561,189,261
27,806,779
7,846,179
$ 596,842,2l9~
Custodial credit risk (investments)
The City uses a third-party bank for its 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 the custodian's failure. All
City investments held in custody and safekeeping 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. Investments are settled on a Delivery vs.
Payment (DVP) in accordance with the third party custodial agreement.
Custodial credit risk (deposits)
The City maintains cash accounts at two major banking institutions. 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
66
CITY OF CARLSBAD
Notes to the Financial Statements
Note 3. Deposit and Investment Risk (Continued)
both of these types of investments. A small amount of cash is not swept from the checking accounts to cover checks that
may be presented for payment. Amounts up to $100,000 are Federal Deposit Insurance Corporation (FDIC) insured.
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, 2008, approximately 16.3% of the City's total portfolio investments, based on cost, were in
medium-term corporate notes.
For concentration of investments, 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, 2008, 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).
However, it is the City's policy to limit investments to the top two credit ratings (AAA and AA). As of June 30, 2008,
approximately 1.4% of the investments in medium-term corporate notes did not have one of these two credit ratings.
These two investments had credit ratings of A and BBB+. Both of these investments were made when the credit ratings
were 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 greater 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 purchase requirements. A credit rating of
BBB is considered investment grade for non-California municipality investments.
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, 2008, the average maturity
of the LAIF investments was 191 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, 2008, the portfolio had a 0.7% gain 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 to be 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, 2008, the modified duration of the portfolio was 1.858. 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, 2008, maturities within one year exceeded the required minimum of $124,700,000 (two-thirds of
current year operating budget for the City per the 2007-08 Operating Budget adopted by the City Council).
67
CITY OF CARLSBAD
Notes to the Financial Statements
Note 4. Due To and From Other Funds
There were no amounts due from funds within the City to other funds within the City at June 30, 2008.
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, 2008:
Advances From Advances To Amount
General Fund Redevelopment Debt Service Funds $ 15,518,292 (1)
General Fund Financing Districts Special Revenue Funds 916,751
General Fund Enterprise Funds:
GolfCourse 48,647,601 (2)
Solid Waste 952,219 (3)
Special Revenue Funds: Capital Project Funds:
Gas Tax Bridge and Thoroughfare Districts 3,643,344 (4)
Capital Projects Funds: Capital Project Funds:
General Capital Construction Park Development 1,180,000 (4)
Planned Local Drainage Facilities 420,021 (4)
Public Facilities Construction Park Development 4,550,000 (5)
$ 75,828,228
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 Redevelopment Debt Service Funds is estimated to be repaid over a
10-15 year period as the tax increment collected within the redevelopment areas grow. Interest on the advance will
compound annually at the average interest rate earned by the Treasurer's Pool during the fiscal year.
(2) The advance between the General Fund and the Golf Course Fund is estimated to be repaid over a 35-40 year period
through possible disposition of golf course assets and residual operating income from golf course operations. Interest
on the advance will compound annually at the average interest rate earned by the Treasurer's Pool during the fiscal
year.
(3) The advance between the General Fund and the Solid Waste Fund is estimated to be repaid at $136,000 per annum.
(4) These advances are estimated to be repaid in Fiscal Year 2008-09.
(5) The advance between the Public Facilities Construction Fund and the Park Development Funds is estimated to be
repaid at build-out.
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, 2008:
Balance at
July 1, 2007 Increases
Governmental activities:
Capital assets, not being depreciated:
Land (including right-of-way)
Construction in progress
Total capital assets,
not being depreciated
Capital assets, being depreciated:
Buildings
Improvements, other than buildings
Machinery and equipment
Infrastructure
Total capital assets,
being depreciated
Less accumulated depreciation for:
Buildings
Improvements, other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total capital assets
being depreciated, net
$ 128,132,931
111,317,618
239,450,549
70,232,559
30,192,088
26,463,958
446,960,843
573,849,448
(17,147,590)
(5,020,898)
(15,334,775)
(117,380,719)
(154,883,982)
418,965,466
$
34,213,268
34,213,268
301,811
9,048,663
2,563,758
47,188,149
59,102,381
(1,464,666)
(1,255,850)
(2,563,635)
(9,560,265)
(14,844,416)
44,257,965
Decreases
$
(11,386,102)
(11,386,102)
-
-
(2,093,086)
(77,584)
(2,170,670)
-
-
1,557,794
77,584
1,635,378
(535,292)
Balance at
June 30, 2008
$ 128,132,931
134,144,784
262,277,715
70,534,370
39,240,751
26,934,630
494,071,408
630,781,159
(18,612,256)
(6,276,748)
(16,340,616)
(126,863,400)
(168,093,020)
462,688,139
Governmental activities
capital assets, net $ 658,416,015 $ 78,471,233 $ (11,921,394) $ 724,965,854
69
CITY OF CARLSBAD
Notes to the Financial Statements
Note 6. Capital Assets (Continued)
Business-type activities:
Capital assets, not being depreciated:
Land (including right-of-way)
Construction in progress
Total capital assets,
not being depreciated
Capital assets, being depreciated:
Buildings
Improvements, other than buildings
Machinery and equipment
Infrastructure
Wastewater treatment facility
Total capital assets,
being depreciated
Less accumulated depreciation for:
Buildings
Improvements, other than buildings
Machinery and equipment
Infrastructure
Wastewater treatment facility
Total accumulated depreciation
Total capital assets
being depreciated, net
Balance at
July 1 , 2007
$ 8,663,600
81,368,923
90,032,523
20,213,224
5,556,571
2,019,241
216,253,793
44,929,167
288,971,996
(1,572,799)
(2,434,436)
(1,120,619)
(43,092,586)
(25,442,363)
(73,662,803)
215,309,193
Increases
$
12,471,553
12,471,553
19,961,205
47,499,145
613,459
39,863,876
4,953,770
112,891,455
(420,259)
(148,693)
(263,602)
(4,357,903)
(860,151)
(6,050,608)
106,840,847
Decreases
$
(80,430,328)
(80,430,328)
-
(3,055)
(111,685)
(104,516)
-
(219,256)
-
3,055
13,176
78,609
-
94,840
(124,416)
Balance at
June 30, 2008
$ 8,663,600
13,410,148
22,073,748
40,174,429
53,052,661
2,521,015
256,013,153
49,882,937
401,644,195
(1,993,058)
(2,580,074)
(1,371,045)
(47,371,880)
(26,302,514)
(79,618,571)
322,025,624
Business-type activities
capital assets, net $ 305,341,716 $119,312,400 $ (80,554,744) $ 344,099,372
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 $ 545,392
Community development 202,011
Public safety 447,194
Community services 2,044,546
Public works 9,829,512
Capital assets held by the internal service funds
(charged to various functions based on
their usage of the assets) 1,775,761
Total depreciation expense - governmental activities $ 14,844,416
Business-type activities:
Wastewater $ 2,566,142
Water 3,276,239
Golf course 208,227
Total depreciation expense - business-type activities $ 6,050,608
71
CITY OF CARLSBAD
Notes to the Financial Statements
Note 7. Accrued Liabilities
Accrued liabilities were as follows at June 30, 2008:
Vendors and
Miscellaneous
Salaries and
Benefits
IFD
Payable
Refuse
Disposal
$ 1,661,546 $3,668,181
115,735
152,224 $
Total
$ 5,481,951
115,735
Governmental activities:
General Fund
Assessment and Other
Districts
Community Facilities
District No. 1
General Capital Construction
Infrastructure Replacement
Public Facilities
Construction
Other Governmental Funds
Subtotals
* Internal Service Funds
Total governmental
activities
Business-type activities:
Enterprise funds:
Carlsbad Municipal Water
District
Golf Course
Wastewater
Solid Waste
Total business-type
activities
* Internal service funds have been included with governmental activities on the Government-wide Statement of Net
Assets.
$
$
$
430,833
244,562
30,435
490,574
1,164,434 113,340
4,138,119 3,781,521
502,710 3,508,333
4,640,829 $7,289,854 1
418,515 $ 372,547 :
408,701
478,706 120,373
135,022 77,254
1,440,944 $ 570,174 :
430,833
244,562
30,435
490,574
1,277,774
152,224 - 8,071,864
4,011,043
$ 152,224 $ - $12,082,907
$ - $ - $ 791,062
408,701
599,079
273,078 485,354
$ - $ 273,078 $ 2,284,196
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, 2008:
Governmental activities:
Bonds
Certificates of participation
Obligations under capital leases
Total governmental
activities
Business-type activities:
Bonds
Installment purchase agreement
Loans payable
Obligations under capital leases
Less deferred charges
Plus premiums
Total business type
activities
Principal
Balance at
June 30, 2007
$11,645,000
1,435,000
Additions Reductions
$ - $ 440,000
700,000
Principal
Balance at
June 30, 2008
$11,205,000
735,000
Due Within
One Year
$ 465,000
735,000
$13,080,000 $$1,140,000 $11,940,000 $1,200,000
$18,540,000
6,125,000
29,095,779
699,111
54,459,890
(789,409)
291,635
$53,962,116
$
-
542,234
449,614
991,848
-
-
$ 991,848
$
640,000
1,172,574
190,923
2,003,497
(74,227)
9,895
$1,939,165
$18,540,000
5,485,000
28,465,439
957,802
53,448,241
(715,182)
281,740
$53,014,799
$ 275,000
675,000
1,358,963
221,926
2,530,889
-
-
$2,530,889
Long-term debt at June 30, 2008 is comprised of the following issues:
Governmental long-term debt
Balance at
June 30, 2008
1993 Carlsbad Housing and Redevelopment Commission Tax Allocation
Bonds, principal due in amounts ranging from $465,000 to $1,000,000 on
September 1 of each year through 2024. Interest payable on March 1 and
September 1 at rates varying from 5.25% to 5.30% per annum. The City
posted a surety bond in lieu of cash reserve in the amount of $1,055,953.
Payable from redevelopment property tax increment revenues. $ 11,205,000
1997 Hosp Grove Refunding Certificates of Participation, final principal due in
an amount of $735,000 on August'1 of 2008, final interest payable on August 1
of 2008 at a rate of 4.70%. Payable from the General Fund, with a required
reserve amount of $659,500. 735,000
Sub-total governmental long-term debt 11,940,000
Less current portion 1,200,000
Total long-term portion of governmental debt $ 10,740,000
73
CITY OF CARLSBAD
Notes to the Financial Statements
Note 8. Long-term Debt (Continued)
Balance at
Business-type long-term debt June 30, 2008
2006 Carlsbad Public Financing Authority (Golf Course) Revenue Bonds, principal due
in varying amounts ranging from $275,000 to $1,185,000 on September 1 of each
year beginning in 2008 through 2036, interest payable on March 1 and September 1
of each year through 2036, at rates varying from 4.00% to 5.00% per annum. The
required reserve amount is $1,238,325. Payable from golf course operating
revenues and lease payments by the City. $ 18,540,000
1997 Encina Financing Joint Powers Authority (EFJPA) Installment Purchase
Agreement, principal due in varying amounts ranging from $675,000 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 5.125% per
annum. The required reserve amount is $937,169. Payable from sewer
user fees. 5,485,000
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. 839,487
2005 Carlsbad Municipal Water District loan agreement with the State
Water Resources Control Board. Principal is due in varying amounts
ranging from $425,113 to $631,082 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. 8,869,864
2006 Carlsbad Municipal Water District loan agreement with the State
Water Resources Control Board. Principal is due in varying amounts
ranging from $798,669 to $1,201,977 on April 1 of each year through
2027, interest payable on April 1 of each year at 2.30% per annum.
Payable from recycled water user fees. 1 8,756,088
The Carlsbad Public Financing Authority has entered into several golf course maintenance
• equipment lease purchase agreements and G.P.S. equipment lease purchase agreements.
As of June 30, 2008, the City has purchased maintenance equipment and G.P.S. equipment
totaling $1,170,745. The lease terms range from 50 to 60 months, with interest rates ranging
from 4.75% to 7.71%. The leases expire between April 2012 and March 2013. Payable from
golf course operating revenues and lease payments by the City. 957,802
Subtotal business-type long-term debt 53,448,241
Less unamortized premiums, issuance costs and deferred charges (433,442)
Less current portion (2,530,889)
Total long-term portion of business-type debt $50,483,910
74
CITY OF CARLSBAD
Notes to the Financial Statements
Note 8. Long-term Debt (Continued)
The aggregate maturities of long-term debt are as follows:
Governmental Activities Business-type Activities
Year ended June 30:
2009
2010
2011
2012
2013
2014-2018
2019-2023
2024-2028
2029-2033
2034-2038
Principal
$ 1,200,000
490,000
515,000
540,000
570,000
3,330,000
4,295,000
1,000,000
-
-
$ 11,940,000
Interest
$ 595,182
552,840
526,459
498,765
469,627
1,854,113
856,337
26,500
-
-
$ 5,379,823
Principal
$ 2,530,889
2,620,114
2,716,197
2,807,040
2,668,866
11,123,686
10,791,495
9,344,954
4,430,000
4,415,000
$ 53,448,241
Interest
$ 1,805,090
1,715,404
1,620,832
1,518,943
1,424,168
5,866,953
4,331,842
2,711,256
1,511,550
409,387
$ 22,915,425
Note 9.Rate Covenants
The 1997 Encina Financing Joint Powers Authority Installment Purchase Agreement requires that the District set its
charges for services each year at rates sufficient to produce net revenues (after paying the operating and maintenance
expenses of the District, excluding depreciation) of at least 1.25 times debt service for that year.
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.
The 2006 Carlsbad Public Financing Authority (Golf Course) Revenue Bond require the Authority to set rates, fees and
charges which, when added to other revenues received from the Authority, are at least sufficient to yield gross revenues
which are sufficient to pay all operating and maintenance expenses estimated by the Authority, and the principal and
interest on the bonds as they become due and payable, reserve requirements, and all other payments required to meet any
other obligations of the Authority. If the Authority is unable to generate sufficient revenues to make the principal and
interest payments on the bonds as they become due, the City of Carlsbad's General Fund will make the payments.
All rate covenants requirements were met for the year ended June 30, 2008.
75
CITY OF CARLSBAD
Notes to the Financial Statements
Note 10. Debt without Government Commitment
In the opinion of City officials, the bonds listed below 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 bond. Accordingly, no liability has been recorded in
the accompanying financial statements.
Limited obligation improvement bonds
As of June 30, 2008, the City has six series of Assessment District Bonds outstanding in the amount of $68,331,504.
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.
Special tax bonds
As of June 30, 2008, the City has two series of Community Facilities District (CFD) Bonds outstanding in the amount of
$29,490,000. 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 special taxes to pay the bond debt.
These monies are accounted for in the CFDs' Agency funds.
Mortgage revenue bonds
Multi-Family Housing Revenue Bonds are issued to provide construction and permanent financing to developers of multi-
family residential rental projects located in the City which will be partially occupied by persons of low or moderate
income. The total amount of mortgage revenue bonds outstanding as of June 30, 2008 is $24,400,000. 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 of the City has issued a $2,070,000 Industrial Development Revenue Bond. The
total prinicpal amount oustanding as of June 30, 2008 is $1,500,000. Any costs relating to the issuance of the Bond, as
well as the principal and interest payments, are to be paid by the private party benefiting from the bond issue.
76
77
CITY OF CARLSBAD
Notes to the Financial Statements
Note 11. Fund Balances
The following is a summary of reserved and unreserved fund balances as of June 30, 2008:
Governmental Funds
Fund Balances
Reserved for:
Loans receivable
Inventory
Prepaid items
General
$ 147,244
23,070
56,748
Redevelopment
Debt Service
Funds
$ - '
-
-
Assessment
and Other
Districts
$
-
-
Community
Facilities
District No. 1
$
-
-
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
49,691,055
6,561,013 44,232
56,479,130 44,232
18,434,130
2,551,521
11,222,509
18,434,130
46,059,403 (12,116,353)
501,804
501,804
53,957,508
1,586,973
13,774,030 55,544,481
Total fund balances $120,972,663 $(12,116,353) $13,818,262 $56,046,285
* Only reflects that portion of fund balance invested in interfund advances (the General Fund amount is net of $16,343,808
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
$
1,600,021
2,553,528
4,153,549
Infrastructure
Replacement
$
144,797
144,797
Public
Facilities
Construction
$
4,550,000
1,050,979
5,600,979
Other
Governmental
Funds
$ 13,062,352
378,131
659,500
3,643,344
935,000
250,000
3,521,267
6,068,289
28,517,883
Total
$ 13,209,596
23,070
434,879
659,500
59,484,420
935,000
250,000
3,521,267
16,924,642
95,442,374
12,418,882 44,848,730 113,776,641
48,735,322
48,735,322
13,844,456
2,531,609
2,531,609
35,556,440
28,245,582
40,664,464
_
21,664,877
66,513,607
28,048,648
132,421,002
246,197,643
111,392,594
$66,733,327 $38,232,846 $46,265,443 $123,080,138 $453,032,611
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, 2008:
Deficit Balance
Debt Service Funds:
Redevelopment Areas $ (12,116,353)
80
CITY OF CARLSBAD
Notes to the Financial Statements
Note 13. Interfund Transfers
Interfund transfers for the year ended June 30, 2008, consisted of the following:
Transfers In Transfers Out Amount
General Fund
Redevelopment Debt Service Funds
General Capital Construction
Infrastructure Replacement
Debt Service Funds:
Hosp Grove COPs
Capital Project Funds:
Redevelopment Agency
Sales Tax/TransNet
Traffic Impact Projects
Enterprise Funds:
Carlsbad Municipal Water District
Solid Waste
Information Technology Internal Service Fund
Gas Tax Special Revenue Fund
Redevelopment Agency Capital Project Funds
General Fund
Information Technology Internal Service Fund
General Fund
General Fund
Redevelopment Debt Service Funds
Grants and Other Capital Project Funds
Community Facilities District No. 1 Capital Project Fund
Self Insured Benefits Internal Service Fund
General Fund
563,000
10,000
3,400
10,850,000
18,400
7,900,000
275,000
307,000
28
463,557
2,495,187
138,800
$ 23,024,372
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 catastrophic 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, 2008, the
unrestricted fund equity for the Risk Management Self-Insurance fund was approximately $144,000.
Dental insurance coverage for City employees is administered by MetLife. Under the City's agreement with MetLife,
MetLife will pay dental claims for each covered member, up to a maximum of $1,500 per calendar year.
The City is insured for workers' compensation claims by Continental Casualty. Continental Casualty provides coverage
up to a maximum of $2,500,000 per occurrence for losses which exceed the City's self-insured retention of $1,000,000
per claim for police and fire employees, and $750,000 for all other employees. At June 30, 2008, the unrestricted fund
equity for the Workers' Compensation Self-Insurance fund was approximately $2,988,000.
81
CITY OF CARLSBAD
Notes to the Financial Statements
Note 14. Risk Management (Continued)
The estimated claims payable reported at June 30, 2008 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 did not exceed insurance coverage
during the past fiscal year. However, in Fiscal Year 2006-07, the City settled a large property damage claim related to the
Marbella condominiums that exceeded the City's insurance coverage. The City has received some reimbursements from
their insurance carrier for this excess amount, and continues to pursue additional recoveries.
Changes in the estimated claims payable amounts in Fiscal Years 2007 and 2008 for the three internal service funds are as
follows:
Self-Insured Benefits fund:
2006 - 07
2007-08
Claims
Beginning
Balance
Expense and
Changes in
Estimates
Claim
Payments
Ending
Balance
77,866
75,208
457,325
840,672
(459,983)
(840,672)
75,208
75,208
Risk Management fund:
2006-07
2007-08
752,020
542,521
307,805
258,371
(517,304)
(640,703)
542,521
160,189
Workers' Compensation fund:
2006 - 07
2007-08
3,297,948
3,073,606
887,759
1,597,765
(1,112,101)
(1,693,283)
3,073,606
2,978,088
Note 15. Joint Ventures
Encina Water Pollution Control Facilities
The Encina Water Pollution Control Facilities (the Facilities) are wastewater 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,
2008, 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%
82
CITY OF CARLSBAD
Notes to the Financial Statements
Note 15. Joint Ventures (Continued)
EWA's financial statements for the fiscal year ended June 30, 2007 (the latest available) reflect the following:
Total assets $ 106,498,723
Total liabilities 6,441,743
Net assets $ 100,056,980
The EWA does not recognize net income or loss. Net operating expenditures in excess of users' assessments are treated as
accounts receivable on EWA's books and charged to users' accounts in the following year. Conversely, users'
assessments in excess ofnet operating expenditures are treated as a liability and credited against users' accounts, also in
the following year. Under this basis, net operating income (before member billings) for the EWA totaled $58,382 in
Fiscal Year 2007. 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 30,2008:
Member
City of Carlsbad
Leucadia Wastewater District
Agreement
Balance
$ 5,485,000
3,735,000
$ 9,220,000
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 Wastewater Enterprise Fund. The expansion of the
Facility is shown as a capital asset of the Wastewater Enterprise Fund.
83
CITY OF CARLSBAD
Notes to the Financial Statements
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, 2008, the
employer contribution rate for the City of Carlsbad (as a percentage of covered payroll) was 28.462% for safety employees
and 20.478% for miscellaneous employees. The contribution requirements of plan members and the City are established
by PERS.
In October 2007, the City was notified by PERS that the employer contribution rate for the City of Carlsbad (as a
percentage of payroll) will be 29.619% for safety employees and 20.819% for miscellaneous employees for the fiscal year
ended June 30, 2009.
Annual pension cost
For Fiscal Year 2007-08, the City's annual pension cost (employer contribution) of $5,198,332 for safety and $6,737,651
for miscellaneous to PERS was equal to the City's required and actual contributions. For Fiscal Year 2007-08, the
member contributions paid by the City and its employees were $1,677,263 for safety and $2,657,076 for miscellaneous.
The required contribution was determined as part of the June 30, 2005, 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 PERS.
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)
Annual Pension
Fiscal Year Cost (Employer Percentage of Net Pension
Ending Contribution) APC Contributed Obligation
6/30/06 $ 4,152,149 100% $
6/30/07 4,453,495 100%
6/30/08 5,198,332 * 100%
* Includes 27 pay periods during the fiscal year, verus 26 pay periods in the previous two fiscal years.
84
CITY OF CARLSBAD
Notes to the Financial Statements
Note 16. Retirement Plan (Continued)
Three-year trend information for PERS (miscellaneous)
Fiscal Year
Ending
6/30/06
6/30/07
6/30/08
Annual Pension
Cost (Employer
Contribution)
$ 5,667,848
5,746,407
6,737,651 *
Percentage of
APC Contributed
100%
100%
100%
Net Pension
Obligation
* Includes 27 pay periods during the fiscal year, verus 26 pay periods in the previous two fiscal years.
Required supplementary information
The Schedule of Funding Progress below shows the recent history of the actuarial value of assets, actuarial liability, their
relationship, and the relationship of the unfunded actuarial accrued liability to payroll. The Schedule of Funding Progress
presented below presents multi-year trend information about whether the actuarial value of plan assets is increasing or
decreasing over time, relative to the actuarial accrued liability for benefits.
Funded status of plan (safety)
Valuation
Date
6/30/05
6/30/06
6/30/07
Funded status
Valuation
Date
6/30/05
6/30/06
6/30/07
Entry Age
Normal
Accrued
Liability
$ 123,237,518
136,506,300
146,615,477
Actuarial
Value
of Assets
$ 102,021,173
111,646,998
122,431,038
Unfunded
Liability/
(Excess
Assets)
$ 21,216,345
24,859,302
24,184,439
Funded
Status
82.8%
81.8%
83.5%
Annual
Covered
Payroll
$ 14,305,227
15,030,260
16,504,247
UAAL
As a %
of Payroll
148.3%
165.4%
146.5%
of plan (miscellaneous)
Entry Age
Normal
Accrued
Liability
$ 149,626,877
164,803,264
181,709,370
Actuarial
Value
of Assets
$ 117,576,007
131,137,658
146,130,775
Unfunded
Liability/
(Excess
Assets)
$ 32,050,870
33,665,606
35,578,595
Funded
Status
78.6%
79.6%
80.4%
Annual
Covered
Payroll
$ 26,688,294
28,237,819
30,101,458
UAAL
As a %
of Payroll
120.1%
119.2%
118.2%
85
CITY OF CARLSBAD
Notes to the Financial Statements
Note 17. Postretirement Healthcare
During the year ended June 30, 2008, the City implemented GASB Statement No. 45, which changed the accounting and
financial reporting used by local government employers for postemployment benefits. Previously, the costs of such
benefits were generally recognized as expenditures/expenses of local government employers on a pay-as-you-go basis.
The new reporting requirements for these benefit programs, as they pertain the the City of Carlsbad and the Carlsbad
Municipal Water District, are set forth below.
The City of Carlsbad (City) and former employees of the Carlsbad Municipal Water District (CMWD) are offered other
post employment benefits (OPEB) in the form of health benefits. 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.
Plan descriptions
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).
City of Carlsbad
City of Carlsbad (City) employees are offered health insurance coverage under the Public Employee' Medical and
Hospital Care Act (PEMHCA), which is administed by the California Public Employees Retirement System (CalPERS).
Under PEMHCA, the City is required to pay a small portion of the monthly medical premiums of retired employees
(considered a subsidy), if the retired employees continue their medical coverage under PEMHCA. 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.
The City pays a monthly subsidy per eligible employee/retiree regardless of coverage elected:
Calendar year 2007 $80.80
Calendar year 2008 97.90
Calendar year 2009 101.00
Thereafter, the subsidy is adjusted annually to reflect changes in the medical component of the Consumer Price Index.
California Public Employer's Retiree Benefit Trust Program
The City is participating in the California Employer's Retiree Benefit Trust Program (CERBT) through irrevocable trust
agreements for both plans. CERBT, an agent multiple-employer plan, is held and after the first three years, will be
administered by the California Public Employee's Retirement System (CalPERS). The City does not issue separate stand-
alone financial reports for either of the two plans. The City's OPEB financial statements will be included in the CalPERS
annual financial report. The CalPERS annual financial report can be obtained by contacting their executive office: Lincoln
Plaza, 400 P Street, Sacramento, California 95814.
Funding policy
The obligation of the CMWD to contribute to the CMWD plan is established, and may not be amended by the CMWD
Board. The obligation of the City to contribute to the City plan is established, and as long as the City is a member of
PEMHCA, may not be amended by the City Council. The City Council does have the authority to change health insurance
coverage outside of PEMHCA, which could change the funding obligation for City employees.
86
CITY OF CARLSBAD
Notes to the Financial Statements
Note 17. Postretirement Healthcare (Continued)
Employees are not required to contribute to the plan. The City and CMWD are required to contribute the annual required
contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB
Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal
cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty
years. The City's and CMWD's annual OPEB costs for the current year and the related information for each plan are as
follows:
Annual OPEB cost
CMWD City
2007-08 Annual Required Contribution (ARC) $ 195,235 $ 643,109
2007-08 Contributions Made (195,235) (643,109)
Funding of Prior Year Obligation (2,495,187) (4,895,909)
Increase (Decrease) in Net OPEB Obligation (2,495,187) (4,895,909)
Net OPEB Obligation - beginning of year, as restated 2,495,187 4,895,909
Net OPEB Obligation - end of year $ - $ -
The City's and CMWD's annual OPEB costs, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for the year ended June 30, 2008 were as follows:
Percentage of
Year Annual OPEB Cost Net OPEB
Ended OPEB Cost Contributed Obligation
Carlsbad Municipal Water District 6/30/08 $ 195,235 100.0% $
City of Carlsbad 6/30/08 $ 643,109 100.0% $
Funded status and funding progress
The funded status of the plans as of June 30, 2006, was as follows:
CMWD City
Actuarial Accrued Liability (a) $ 2,548,860 $ 5,404,319
Actuarial Value of Plan Assets (b) - -
Unfunded Actuarial Accrued Liability _$ 2,548,860 _$ 5,404,319
Funded Ratio (b)/(a) Q.Q% Q.Q%
During Fiscal Year 2007-08, the City and CMWD fully funded the actuarial accrued liabilities calculated as of June 30,
2006. The City and CMWD are required to have bi-annual actuarial valuations. The actuarial valuations as of June 30,
2008 will reflect the funding of the actuarial accrued liabilities by the City and CMWD.
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in
the future. Amounts determined regarding the funded status of the plan and the annual required contributions of the
employer are subject to continual revision as actual results are compared to past expectations and new estimates are made
about the future. The required schedule of funding progress presented as required supplementary information provides
multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time
relative to the actuarial accrued liability for the benefits.
87
CITY OF CARLSBAD
Notes to the Financial Statements
Note 17. Postretiremen! Healthcare (Continued)
Actuarial methods and assumptions
Projections of benefits are based on the substantive plan (the plan as understood by the employer and plan members) and
include the types of benefits in force at the valuation date. Actuarial calculations reflect a long-term perspective and
employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the
actuarial value of assets, consistent with the long-term perspective of the calculations.
In the June 30, 2006 actuarial valuation, the entry age normal actuarial cost method was used. The actuarial assumptions
included a 7.75 percent investment rate of return (net of administrative expenses), a three percent annual inflation rate, a
medical inflation rate often percent per annum graded down each year in one percent increments to an ultimate rate of five
percent, and a City subsidy rate increasing at a rate of five percent grading down to three percent.
The annual required contribution under this method equals the normal cost plus the amortization of the unfunded actuarial
accrued liability over a thirty (30) year period. The plan costs are derived by making certain specific assumptions as to the
rates of interest, mortality, turnover, and the like, which are assumed to hold for many years into the future. Actual
experience may differ somewhat from the assumptions and the effect of such differences is spread over all periods. Due to
these differences, the costs determined by the valuation must be regarded as estimates of the true plan costs.
Required supplementary information
Funded status of plan (CMWD)
Valuation
Date
Entry Age
Normal
Accrued
Liability
Actuarial
Value
of Assets
Unfunded
Liability/
(Excess
Assets)
Funded
Status
6/30/06 $ 2,548,860 $$ 2,548,860 0.0%
Funded status of plan (City)
Valuation
Date
Entry Age
Normal
Accrued
Liability
Actuarial
Value
of Assets
Unfunded
Liability/
(Excess
Assets)
Funded
Status
6/30/06 $ 5,404,319 $$ 5,404,319 0.0%
* During Fiscal Year 2007-08, the City and the CMWD fully funded the actuarial accrued liabilities calculated as of June
30, 2006.
88
CITY OF CARLSBAD
Notes to the Financial Statements
Note 18. Commitments and Contingencies
Operating lease
The Agency has three parking lot leases and one building lease, all on a month-to-month lease term.
Water purchase agreements
On March 25, 1991, 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 a 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
$724.49 per acre foot or a minimum of $285,449 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, 2008 is $726,000.
Note 19. Prior Period Adjustments
The City and the Carlsbad Municipal Water District (CMWD) adjusted their net assets to recognize the net other post
employment benefit (OPEB) obligations for the prior eight fiscal years. The cumulative effect of these changes on the
beginning net assets balance of business-type and governmental activities, and on the Self Insured Benefits Internal
Service Fund and the Carlsbad Municipal Water District Fund are as follows:
Net assets at July 1,2007
Recognize net OPEB obligation for eight prior fiscal years
Net assets at July 1, 2008, as restated
Governmental
Activities
$ 1,100,129,749
(4,895,909)
$ 1,095,233,840
Business-type
Activities
$ 336,853,488
(2,495,187)
$ 334,358,301
Net assets at July 1, 2007
Recognize net OPEB obligation for eight prior fiscal years
Net assets at July 1, 2008, as restated
Self Insured
Benefits
Internal
Service Fund
$ 8,685,705
(4,895,909)
$ 3,789,796
Carlsbad
Municipal
Water District
Enterprise Fund
$ 183,725,299
(2,495,187)
$ 181,230,112
89
90
SUPPLEMENTARY INFORMATION
91
CITY OF CARLSBAD
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2008
Special Revenue Funds
ASSETS
Affordable
Housing
Community
Development
Block Grant
Donations and
Endowments
Financing
Districts
Gas
Tax
Cash and investments
Receivables:
Taxes
Other
Accounts, net
Due from other governments
Prepaid items
Restricted assets, cash and investments
Loan receivables
Advances to other funds
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accrued liabilities
Deposits payable
Advances from other funds
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
$ 13,761,129 $ 57,003 $ 1,849,537 $3,206,991 $ 6,070,154
6,273
10,244,631
42,903
224,404
$ 31,444 $ 15,827
31,444 15,827 15,380 1,061,592
10,244,631 224,404
440,676
3,643,344
$ 24,005,760 $ 324,310 $ 1,849,537 $3,213,264 $10,154,174
10,611 $ 144,841 $ 273,510
4,769
- 916,751 -
273,510
3,643,344
;
2,507,267
5,061
.
-
11,217,357
23,974,316
$ 24,005,760
•
-
10,675
2,278
-
71,126
308,483
$ 324,310
935,000
250,000
-
11,618
_
205,263
432,276
1,834,157
$ 1,849,537
;-
224,973
_
-
1,926,699
2,151,672
$3,213,264
;-
416,706
3,817,353
2,003,261
-
9,880,664
$10,154,174
92
Habitat and
Agricultural
Management
$ 7,023,159
$ 7,023,159
$ 74,500
74,500
1,998,973
4,949,686
6,948,659
$ 7,023,159
Low and
Moderate
Income
Housing
$ 4,952,105
17,661
2,593,317
$ 7,563,083
$ 4,475
4,475
2,593,317
1,014,000
9,708
3,941,583
7,558,608
$ 7,563,083
Other
Special
Revenue
Funds
$1,327,458
$1,327,458
$ 208
208
9,800
10,877
1,306,573
1,327,250
$1,327,458
Special Revenue Funds
Police
Grants and Section 8
Asset Rental
Forfeiture Assistance
$ 937,162 $ 1,980,141
41,128
378,131
$ 937,162 $ 2,399,400
$ 12,873 $ 25,426
19,071
12,873 44,497
378,131
162
190,561
733,728 1,976,610
924,289 2,354,903
$ 937,162 $ 2,399,400
Tyler
Court
Apartments Totals
$1,516,230 $ 42,681,069
17,661
475 6,748
41,128
483,579
378,131
13,062,352
3,643,344
$1,516,705 $ 60,314,012
$ - $ 593,715
23,695 47,535
916,751
23,695 1,558,001
13,062,352
378,131
3,643,344
935,000
250,000
3,521,267
688,703
3,819,631
4,408,935
1,493,010 28,048,648
1,493,010 58,756,011
$1,516,705 $ 60,314,012
(Continued)
93
CITY OF CARLSBAD
Combining Balance Sheet
Nonmajor Governmental Funds (Continued)
June 30, 2008
ASSETS
Debt Service
Fund Capital Project Funds
Bridge and Grants
Hosp Grove Thoroughfare and Other
COPs Districts Funds
Planned
Local
Park Drainage
Development Facilities
Cash and investments
Receivables:
Taxes
Other
Accounts, net
Due from other governments
Prepaid items
Restricted assets, cash and investments
Loan receivables
Advances to other funds
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accrued liabilities
Deposits payable
Advances from other funds
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
6,496 $ 11,619,298 $ 3,020,542 $9,531,748 $ 9,991,406
14,394
659,500
680,390 $ 11,619,298 $ 3,020,542 $9,531,748 $ 9,991,406
659,500
20,890
680,390
$ - $ 9,988 $ - $ 13.917
3,643,344 - 5,730,000 420,021
3,643,344 9,988 5,730,000
7,588,844
387,110
224,697
2,269,297
516,560 3,801,748
7,975,954 3,010,554 3,801,748
433,938
86,553
6,364,074
3,106,841
9,557,468
$ 680.390 $ 11,619,298 $ 3,020,542 $9,531,748 $ 9,991,406
94
Capital Project Funds
Rancho Santa
Fe Road Redevelopment
Project Agency
$ 18,132,479 $ 310,351
.
-
12,461
813,206
-
-
-
-
$ 18,945,685 $ 322,812
$ 515,392 $ 118,969
10,701
-
515,392 129,670
-
-
-
-
-
-
2,444,103 50,581
12,313,985
3,672,205 142,561
-
18,430,293 193,142
$ 18,945,685 $ 322,812
Traffic
Sales Tax/ Impact
TransNet Projects
$ 8,070,922 $12,474,224
_
.
.
155,225
-
-
-
-
$ 8,226,147 $ 12,474,224
$ 6,899 $ 18,894
-
-
6,899 18,894
-
-
-
-
-
-
2,127,743 445,909
3,449,340 9,043,559
2,642,165 2,965,862
-
8,219,248 12,455,330
$ 8,226,147 $12,474,224
Totals
$ 73,150,970
_
-
12,461
968,431
-
.
-
-
$ 74,131,862
$ 684,059
10,701
9,793,365
10,488,125
-
-
.
-
-
.
5,379,586
41,029,099
17,235,052
-
63,643,737
$ 74,131,862
Total Other
Governmental
Funds
$ 115,838,535
17,661
21,142
53,589
1,452,010
378,131
659,500
13,062,352
3,643,344
$ 135,126,264
$ 1,277,774
58,236
10,710,116
12,046,126
13,062,352
378,131
659,500
3,643,344
935,000
250,000
3,521,267
6,068,289
44,848,730
21,664,877
28,048,648
123,080,138
$ 135,126,264
95
CITY OF CARLSBAD
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2008
Special Revenue Funds
Revenues:
Taxes
Intergovernmental
Charges for services
Fines and forfeitures
Income from property and investments
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
Affordable
Housing
$
407,147
60,302
.
764,803
673,026
-
167
1,905,445
-
-
348,035
-
-
-
-
-
348,035
1,557,410
Community
Development Donations and
Block Grant Endowments
$ - $
477,978
-
-
84,297 103,110
-
280,830
2,528
562,275 386,468
-
-
169,450 52,841
201,853
-
288,591
-
-
458,041 254,694
104,234 131,774
Financing
Districts
$
-
2,308,351
-
160,947
6,000
-
-
2,475,298
-
-
-
-
2,238,968
157,496
-
-
2,396,464
78,834
Gas
Tax
$ 1,817,567
-
-
-
357,206
-
-
261
2,175,034
-
-
-
-
-
1,603.077
-
-
1,603,077
571,957
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
(10,000)
1,557,410 104,234 131,774 78,834 561,957
22,416,906 204,249 1,702,383 2,072,838 9.318,707
$23,974,316 $ 308,483 $ 1,834,157 $2,151,672 $ 9,880,664
96
Habitat and
Agricultural
Management
$
413,627
176,137
589,764
1,310,995
1,310,995
(721,231)
Low and
Moderate
Income
Housing
$ 664,886
278,837
943,723
106.100
106,100
837,623
Other
Special
Revenue
Funds
$
73,527
67,891
141,418
30,000
5,423
35,423
105,995
Special
Police
Grants and
Asset
Forfeiture
$
222,957
163,467
48,515
434,939
238,050
238,050
196,889
Revenue Funds
Section 8
Rental
Assistance
$
6,352,276
53,219
15,315
6,420,810
5,283,979
5,283,979
1,136,831
Tyler
Court
Apartments Totals
$ - $ 2,482,453
7,460,358
450,456 2,819,109
163,467
73,159 2,411,247
923,054
280,830
18,271
523,615 16,558,789
30,000
238,050
262,594 7,533,994
207,276
2,238,968
2,049,164
262,594 12,297,452
261,021 4,261,337
(10,000)
(10,000)
(721,231)
7,669,890
$6,948,659
837,623
6,720,985
$7,558,608
105,995
1,221,255
$ 1,327,250
196,889
727,400
$ 924,289
1,136,831
1,218,072
$2,354,903
261,021 4,251,337
1,231,989 54,504,674
$1,493,010 $ 58,756,011
(Continued)
97
CITY OF CARLSBAD
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds (Continued)
For the Year Ended June 30, 2008
Debt Service
Fund
Hosp Grove
COPs
Capital Project Funds
Bridge and
Thoroughfare
Districts
Grants
and Other
Funds
Park
Development
Planned
Local
Drainage
Facilities
Revenues:
Taxes
Intergovernmental
Charges for services
Fines and forfeitures
Income from property and investments
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
40,795 655,321
272,788
1,655,001
69,931
696,880
459,030
594,554
207,450 559,093
581,269
62,275
40,795 928,109 2,421,812 1,053,584 643,544
959,121
700,000 ....
80,026 ....
780,026
(739,231) . 928,109
275,000
275,000
(464,231) 928,109
1,144,621 7,047,845
$ 680,390 $ 7,975,954
207,450
2,214,362
(28)
(28)
2,214,334
796,220
$ 3,010,554
559,093 959,121
494,491 (315,577)
-
494,491 (315,577)
3,307,257 9,873,045
$ 3,801,748 $9,557,468
98
Capital Project Funds
Rancho Santa
Fe Road Redevelopment
Project Agency
$ - $
3,230,683
13,719
-
1,138,916 112,113
4,030,187
-
-
8,399,786 125,832
-
648,122
-
-
2,970,825 892,381
_
-
2,970,825 1,540,503
5,428,961 (1,414,671)
307,000
(3,400)
303,600
5,428,961 (1,111,071)
13,001,332 1,304,213
$ 18,430,293 $ 193,142
Sales Tax/
TransNet
$
1,617,659
728,966
-
427,643
-
-
-
2,774,268
-
-
-
-
2,486,438
.
-
2,486,438
287,830
28
-
28
287,858
7,931,390
$ 8,219,248
Traffic
Impact
Projects
• $
-
-
-
664,502
1,020,260
-
-
1,684,762
-
-
-
-
469,949
_
-
469,949
1,214,813
463,557
-
463,557
1,678,370
10,776,960
$12,455,330
Totals
$
6,503,343
742,685
-
4,108,725
6,676,944
-
-
18,031,697
-
648,122
-
-
8,545,257
_
-
9,193,379
8,838,318
770,585
(3,428)
767,157
9,605,475
54,038,262
$ 63,643,737
Total Other
Governmental
Funds
$ 2,482,453
13,963,701
3,561,794
163,467
6,560,767
7,599,998
280,830
18,271
34,631,281
30,000
238,050
8,182,116
207,276
2,238,968
10,594,421
700,000
80,026
22,270,857
12,360,424
1,045,585
(13,428)
1,032,157
13,392,581
109,687,557
$ 123,080,138
99
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds
Year Ended June 30, 2008
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
$ 2,140,996
464,728
1,676,268
518,940
709,474
(190,534)
209,270
482,575
(273,305)
2,421,305
3,073,401
(652,096)
1,918,628
4,033,043
(2,114,415)
3,309,968
(3,309,968)
906,900
154,782
752,118
Actual
Amounts
(Budgetary
Basis)
$ 1,737,606
353,096
1,384,510
562,275
468,716
93,559
363,423
266,312
97,111
2,439,626
2,621,437
(181,811)
2,099,424
2,019,783
79,641
495,821
1,310,995
(815,174)
886,650
115,808
770,842
Variance
Over
(Under)
$ (403,390)
(111,632)
(291,758)
43,335
(240,758)
284,093
154,153
(216,263)
370,416
18,321
(451,964)
470,285
180,796
(2,013,260)
2,194,056
495,821
(1,998,973)
2,494,794
(20,250)
(38,974)
18,724
(Continued)
100
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds (Continued)
Year Ended June 30, 2008
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
Budget
$ 139,500
56,100
83,400
420,237
439,216
(18,979)
6,490,969
6,032,910
458,059
15,166,745
18,756,197
$ (3,589,452)
Actual
Amounts
(Budgetary
Basis)
$ 125,096
45,223
79,873
424,275
238,050
186,225
6,412,571
5,284,141
1,128,430
15,546,767
12,723,561
$ 2,823,206
Variance
Over
(Under)
$ (14,404)
(10,877)
(3,527)
4,038
(201,166)
205,204
(78,398)
(748,769)
670,371
380,022
(6,032,636)
$ 6,412,658
101
CITY OF CARLSBAD
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Debt Service Funds
Year Ended June 30, 2008
Budget
Actual
Amounts
(Budgetary
Basis)
Variance
Over
(Under)
Redevelopment Areas
Total revenues
Total expenditures
Net change in fund balance
2,805,614
1,731,746
2,768,429
1,711,334
1,073,868 1,057,095
(37,185)
(20,412)
(16,773)
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Capital Project Funds
Year Ended June 30, 2008
Budget
Actual
Amounts
(Budgetary
Basis)
Variance
Favorable
(Unfavorable)
Redevelopment Areas:
Total revenues
Total expenditures
Net change in fund balance
80,640
2,338,528
116,319
1,591,083
35,679
747,445
(2,257,888) $ (1,474,764) $783,124
102
103
CITY OF CARLSBAD
Combining Statement of Net Assets
Internal Service Funds
June 30, 2008
ASSETS
Current assets:
Cash and investments
Receivables:
Accounts, net
Inventory
Prepaid items
Total current assets
Noncurrent assets:
Capital assets:
Machinery and equipment
Less accumulated depreciation
Total capital assets (net of accumulated
depreciation)
Total noncurrent assets
Total assets
LIABILITIES
Current liabilities:
Accrued liabilities
Estimated claims payable
Total current liabilities
Total liabilities
NET ASSETS
Invested in capital assets
Unrestricted
Total net assets
Fleet
Management
$ 9,835,249
2,031
177,361
-
10,014,641
15,197,837
(8,568,616)
6,629,221
6,629,221
$ 16,643,862
$ 235,992
-
235,992
235,992
6,629,221
9,778,649
$ 16,407,870
Self Insured
Benefits
$ 4,479,166
439
-
32,922
4,512,527
-
-
-
-
$ 4,512,527
$ 3,185,457
75,208
3,260,665
3,260,665
-
1,251,862
$ 1,251,862
Information
Technology
$ 3,549,252
-
-
-
3,549,252
3,133,216
(2,422,913)
710,303
710,303
$ 4,259,555
$ 390,771
-
390,771
390,771
710,303
3,158,481
$ 3,868,784
104
Risk Workers'
Management Compensation
$ 356,177 $ 5,983,979
129,031
356,177 6,113,010
Total
$ 24,203,823
2,470
177,361
161,953
24,545,607
18,331,053
(10,991,529)
7,339,524
7,339,524
$ 356,177 $ 6,113,010
$ 51,527 $ 147,296
160,189 2,978,088
211,716 3,125,384
211,716 3,125,384
144,461 2,987,626
$ 144,461 $ 2,987,626
$ 31,885,131
$ 4,011,043
3,213,485
7,224,528
7,224,528
7,339,524
17,321,079
$ 24,660,603
105
CITY OF CARLSBAD
Combining Statement of Revenues, Expenses and Changes in Net Assets
Internal Service Funds
For the Year Ended June 30, 2008
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
Intergovernmental
Gain (loss) on sale of property
Total nonoperating revenues (expenses)
Income (loss) before transfers and
capital contributions
Transfers out
Capital contributions
Change in net assets
Total net assets at beginning of year (as restated)
Total net assets at end of year
Fleet
Management
$ 4,492,165
20,539
4,512,704
1,528,291
1,171,296
-
9,473
1,466,417
4,175,477
337,227
525,758
•
(61,563)
464,195
801,422
-
674,888
1,476,310
14,931,560
$ 16,407,870
Self Insured
Benefits
$ 959,734
-
959,734
-
-
840,672
-
562,083
1,402,755
(443,021)
400,274
-
-
400,274
(42,747)
(2,495,187)
-
(2,537,934)
3,789,796
$ 1,251,862
Information
Technology
$ 5,419,703
-
5,419,703
247,471
-
-
984,394
4,544,663
5,776,528
(356,825)
227,607
140,878
-
368,485
11,660
(581,400)
-
(569,740)
4,438,524
$ 3,868,784
106
Risk
Management
$ 1,322,380
27,807
1,350,187
-
640,703
-
339,349
980,052
370,135
6,717
-
-
6,717
376,852
-
-
376,852
(232,391)
$ 144,461
Workers'
Compensation
$ 1,862,395
5,927
1,868,322
-
1,693,283
-
121,550
1,814,833
53,489
342,100
-
-
342,100
395,589
-
-
395,589
2,592,037
$ 2,987,626
Totals
$ 14,056,377
54,273
14,110,650
1,775,762
1,171,296
3,174,658
993,867
7,034,062
14,149,645
(38,995)
1,502,456
140,878
(61,563)
1,581,771
1,542,776
(3,076,587)
674,888
(858,923)
25,519,526
$ 24,660,603
107
CITY OF CARLSBAD
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2008
Cash flows from operating activities:
Receipts from customers and users
Payments to suppliers
Payments to employees
Internal activity - payments to other funds
Claims paid
OPEB funding of accrued liability
Other receipts (payments)
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
(Purchase) sale 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
Fleet
Management
$ 4,491,832
(1,665,444)
(687,810)
(322,766)
20,539
1,836,351
(731,445)
(731,445)
525,215
1,630,121
8,205,128
Self Insured
Benefits
$ 959,295
291,215
(873,594)
(5,457,992)
(5,081,076)
(2,495,187)
-
400,274
(7,175,989)
11,655,155
Information
Technology
$ 5,419,703
(2,780,568)
(2,345,068)
(340,060)
(45,993)
(581,400)
140,878
(366,004)
(225,126)
227,607
(624,912)
4,174,164
Cash and cash equivalents at end of year $ 9,835,249 $ 4,479,166 $ 3,549,252
108
Risk Workers'
Management Compensation Total
$ 1,322,380
(96,192)
(238,658)
(62,319)
(1,023,035)
27,807
(70,017)
$ 1,900,212 $14,093,422
(4,542,204)
(104,842) (3,085,163)
(14,797) (739,942)
(1,781,508) (3,678,137)
(5,457,992)
5,927 54,273
4,992 (3,355,743)
(3,076,587)
140,878
(1,097,449)
(956,571)
6,717 342,100 1,501,913
(63,300) 347,092 (5,886,988)
419,477 5,636,887 30,090,811
356,177 $ 5,983,979 $24,203,823
(Continued)
109
CITY OF CARLSBAD
Combining Statement of Cash Flows
Internal Service Funds (Continued)
For the Year Ended June 30, 2008
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 opening activities:
Depreciation and amortization
Change in assets and liabilities:
(Increase) decrease in receivables
(Increase) in inventory
(Increase) in prepaid items
Increase (decrease) in accrued liabilities
Increase (decrease) in estimated claims payable
Net cash provided by (used in) operating activities
$ 337,227 $ (443,021) $ (356,825)
1,528,291
(439)(333)
(39,066)
(32,922)
10,232 (4,604,694)
247,471
63,361
$ 1,836,351 $ (5,081,076) $ (45,993)
Noncash capital financing activities:
Capital assets contributed by other funds $ 674,8
110
Risk Workers'
Management Compensation Total
$ 370,135 $ 53,489 $ (38,995)
1,775,762
37,817 37,045
(39,066)
(129,031) (161,953)
(57,820) 138,235 (4,450,686)
(382,332) (95,518) (477,850)
(70,017) $ 4,992 $ (3,355,743)
$ 674,8
111
CITY OF CARLSBAD
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2008
Contractors' and Miscellaneous Deposits
ASSETS
Current assets:
Cash and investments
Receivables:
Other
Prepaid items
Total current assets
LIABILITIES
Accrued liabilities
Deposits held for others
Total liabilities
Assessment Districts
ASSETS
Current assets:
Cash and investments
Receivables:
Taxes
Other
Total current assets
Restricted assets:
Cash and investments
Total restricted assets
Total assets
LIABILITIES
Accrued liabilities
Deposits held for others
Total liabilities
Balance
July 1, 2007
$ 17,333,830
-
544,060
$ 17,877,890
$ 487,842
17,390,048
$ 17,877,890
Balance
July 1,2007
$ 6,738,666
45,035
78,031
6,861,732
6,716,274
6,716,274
$ 13,578,006
$ 141,553
13,436,453
$ 13,578,006
Additions
$ 41,376,063
7,772
557,133
$ 41,940,968
$ 42,861,251
3,863,955
$ 46,725,206
Additions
$ 13,620,237
30,636
80,371
13,731,244
1,335,225
1,335,225
$ 15,066,469
$ 236,834
14,546,727
$ 14,783,561
Deductions
$ 42,314,283
7,749
544,061
$ 42,866,093
$ 43,264,272
4,386,059
$ 47,650,331
Deductions
$ 8,947,734
45,035
82,698
9,075,467
205,320
205,320
$ 9,280,787
$ 197,767
8,800,112
$ 8,997,879
Balance
June 30, 2008
$ 16,395,610
23
557,132
$ 16,952,765
$ 84,821
16,867,944
$ 16,952,765
Balance
June 30, 2008
$ 11,411,169
30,636
75,704
11,517,509
7,846,179
7,846,179
$ 19,363,688
$ 180,620
19,183,068
$ 19,363,688
(Continued)
112
CITY OF CARLSBAD
Combining Statement of Changes in Assets and Liabilities
Agency Funds (Continued)
For the Year Ended June 30, 2008
Total Agency Funds
ASSETS
Balance
July 1,2007 Additions Deductions
Balance
June 30, 2008
Current assets:
Cash and investments
Receivables:
Taxes
Other
Prepaid items
Total current assets
$ 24,072,496 $ 54,996,300 $ 51,262,017 $ 27,806,779
45,035
78,031
544,060
30,636
88,143
557,133
45,035
90,447
544,061
30,636
75,727
557,132
24,739,622 55,672,212 51,941,560 28,470,274
Restricted assets:
Cash and investments
Total current assets
Total assets
LIABILITIES
Accrued liabilities
Deposits held for others
Total liabilities
6,716,274
6,716,274
1,335,225 205,320
1,335,225 205,320
$ 629,395
30,826,501
$ 43,098,085
18,410,682
43,462,039
13,186,171
7,846,179
7,846,179
$ 31,455,896 $ 57,007,437 $ 52,146,880 $ 36,316,453
$ 265,441
36,051,012
$ 31,455,896 $ 61,508,767 $ 56,648,210 $ 36,316,453
113
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements
$15,495,000 -1993 Carlsbad Housing and
Redevelopment Commission Tax Allocation Bonds
Fiscal Year
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
$ 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
$ 2,828,804
Interest Due
March 1
$ 282,851
269,989
256,470
242,295
227,332
211,583
195,045
177,589
159,213
139,920
119,576
98,183
75,525
51,675
26,500
-
$ 2,533,746
Total
Interest
$ 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
$ 5,362,550
Principal Due
September 1
$ 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
$ 11,205,000
Total Annual
Debt Service
$ 1,042,909
1,042,840
1,041,459
1,038,765
1,039,627
1,038,915
1,036,628
1,037,634
1,036,802
1,034,134
1,034,496
1,032,759
1,028,707
1,027,200
1,028,175
1,026,500
$ 16,567,550
$6,595,000 -1997 Hosp Grove Certificates of Participation
(1988 Refunding)
Fiscal Year
2008-09
Interest Due
August 1
17,273
Interest Due
February 1
Total
Interest
17,273 $
Principal Due
August 1
735,000
Total Annual
Debt Service
752,273
114
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements (Continued)
$11,080,000 - Encina Financing Joint Powers Authority
Installment Purchase Agreement
Fiscal Year
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
Totals
Interest Due
August 1
$ 139,353
122,816
105,191
86,228
66,241
45,228
23,190
$ 588.247
Interest Due
February 1
$ 122,816
105,191
86,228
66,241
45,228
23,191
-
$ 448.895
Total
Interest
$ 262,169
228,007
191,419
152,469
111,469
68,419
23,190
$ 1.037.142
Principal Due
August 1
$ 675,000
705,000
740,000
780,000
820,000
860,000
905,000
$ 5.485,000
Total Annual
Debt Service
$ 937,169
933,007
931,419
932,469
931,469
928,419
928,190
$ 6,522,142
$2,331,489 - Carlsbad Municipal Water District
State Loan for Reclaimed Water Projects
Fiscal Year
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
Interest Due Principal Due
November 30 November 30
$ 24,345 $
20,425
16,391
12,240
7,969
2,682
135,182
139,102
143,136
147,287
151,558
123,222
Total Annual
Debt Service
$ 159,527
159,527
159,527
159,527
159,527
125,904
Totals $ 84,052 839.487
115
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements (Continued)
$9,694,504 - Carlsbad Municipal Water District
State Water Resources Control Board Loan
Fiscal Year
2008-4)9
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
Totals
$19,382,546
State Water
Fiscal Year
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-2 1
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
Totals
Interest Due
June 1
$ 221,747 $
211,119
200,225
189,059
177,614
165,883
153,859
141,534
128,901
115,952
102,679
89,075
75,130
60,837
46,186
31,169
15,777
$ 2,126,746 $
- Carlsbad Municipal Water District
Resources Control Board Loan
Interest Due
April 1
$ 430,954 $
413,021
394,239
375,025
355,370
335,262
314,691
293,648
272,121
250,098
227,569
204,522
180,944
156,825
132,150
106,908
81,086
54,670
27,646
$ 4,606,749 $
Principal Due
June 1
425,113
435,741
446,634
457,800
469,245
480,976
493,000
505,326
517,959
530,908
544,180
557,785
571,729
586,023
600,673
615,690
631,082
8,869,864
Principal Due
April 1
798,669
816,602
835,384
854,598
874,253
894,361
914,932
935,975
957,502
979,525
,002,054
,025,101
,048,679
,072,798
,097,473
,122,715
,148,537
,174,953
,201,977
18,756,088
Total Annual
Debt Service
$ 646,860
646,860
646,859
646,859
646,859
646,859
646,859
646,860
646,860
646,860
646,859
646,860
646,859
646,860
646,859
646,859
646,859
$10,996,610
Total Annual
Debt Service
$ 1,229,623
1,229,623
1,229,623
1,229,623
1,229,623
1,229,623
1,229,623
1,229,623
,229,623
,229,623
,229,623
,229,623
,229,623
,229,623
,229,623
1,229,623
1,229,623
1,229,623
1,229,623
$23,362,837
116
CITY OF CARLSBAD
Schedule of Annual Debt Service Requirements (Continued)
$18,540,000 - Carlsbad Public Financing Authority
Carlsbad Municipal Golf Course Revenue Bonds
Fiscal Year
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
2025-26
2026-27
2027-28
2028-29
2029-30
2030-31
2031-32
2032-33
2033-34
2034-35
2035-36
2036-37
Totals
Interest Due
September 1
$ 413,525 $
408,025
402,225
396,125
389,625
381,975
373,875
365,212
356,100
346,537
335,287
323,287
310,537
299,737
288,437
276,637
262,687
247,950
232,425
216,112
199,012
181,012
162,112
142,200
121,275
99,337
76,275
52,087
26,662
$ 7,686,292 $
Interest Due
March 1
408,025
402,225
396,125
389,625
381,975
373,875
365,213
356,100
346,538
335,288
323,288
310,538
299,738
288,438
276,638
262,688
247,950
232,425
216,113
199,013
181,013
162,113
142,200
121,275
99,338
76,275
52,088
26,663
-
7,272,783
Total
Interest
$ 821,550
810,250
798,350
785,750
771,600
755,850
739,088
721,312
702,638
681,825
658,575
633,825
610,275
588,175
565,075
539,325
510,637
480,375
448,538
415,125
380,025
343,125
304,312
263,475
220,613
175,612
128,363
78,750
26,662
$14,959,075
Principal Due Total Annual
September 1 Debt Service
$ 275,000 $
290,000
305,000
325,000
340,000
360,000
385,000
405,000
425,000
450,000
480,000
510,000
540,000
565,000
590,000
620,000
655,000
690,000
725,000
760,000
800,000
840,000
885,000
930,000
975,000
1,025,000
1,075,000
1,130,000
1,185,000
,096,550
,100,250
,103,350
,110,750
,111,600
,115,850
,124,088
,126,312
,127,638
,131,825
,138,575
,143,825
,150,275
,153,175
,155,075
,159,325
,165,637
,170,375
,173,538
,175,125
,180,025
,183,125
,189,312
,193,475
,195,613
,200,612
,203,363
,208,750
,211,662
$ 18,540.000 $ 33,499,075
$1,170,745 - Carlsbad Public Financing Authority
Carlsbad Municipal
Fiscal Year
2008-09
2009-10
2010-11
2011-12
2012-13
Golf Course Leases
Interest Due
Monthly
44,325
32,582
20,208
4,400
146
Principal Due
Monthly
221,926
233,669
246,043
242,355
13,809
Total Annual
Debt Service
266,251
266,251
266,251
246,755
13,955
Totals $ 101,661 $ 957,802 $ 1,059,463
117
118
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 120
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 131
These schedules contain information to help the reader assess the City's most
significant local revenue source, property taxes.
Debt Capacity 136
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 146
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 150
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.
119
CITY OF CARLSBAD
Net Assets by Component
Last Seven Fiscal Years
(dollars in thousands)
Governmental activities
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 governmental activities net assets
2002(1)
$ 198,808
130,545
16,652
5,980
4,260
126,632
$ 482,877
2003
248,219
139,760
18,625
6,840
6,019
146,018
2004
$ 282,728
2005
342.232
565,481
151,395
23,042
6,893
20,451 (3)
149,662
$ 634,171 $
175,663
25,144
7,528
35,173
152,352
738,092
Business-type activities
Invested in capital assets, net of related debt $ 143,175
Restricted for:
Capital assets 96,807
Unrestricted 16,261
Total business-type activities net assets $ 256,243
165,943
96,666
22,509
$ 285,118
185,971
102,585
15,072
303,628
213,101
100,597
11,670
325,368
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 4,260 6,019
Unrestricted 142,893 168,527
Total net assets $ 739,120 $ 850,599
468,699
253,980
23,042
6,893
20,451
164,734
(3)
555,333
276,260
25,144
7,528
35,173
164,022
937,799 $ 1,063,460
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 GASB34 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 by the Golf Course Fund.
(5) Beginning in Fiscal Year 2006-07, the City began reflecting funds set aside for the replacement of water and wastewater infrastructure
as unrestricted net assets since these funds are not restricted per the GASB.
(6) Net assets for prior years were restated in Fiscal Year 2007-08, to reflect the application of GASB 45.
120
2006 2007 2008
$ 604,117 (2) $
172,474
27,453
7,042
5,131
197,672
$ 1,013,889 $
$ 234,560 $
107,841
(22,240) (4)
$ 320,161 $
$ 838,677 $
280,315
27,453
7,042
5,131
175,432
645,995 $
178,559
30,356
7,670
4,849
232,701
1,100,130 $
253,645 $
47,164 (5)
36,044 (5)
336,853 $
899,640 $
225,723
30,356
7,670
4,849
268,745
713,026
189,694
33,888
6,949
5,297
250,835
1,199,689 (6)
292,684
44,738
32,600
370,022 (6)
1,005,710
234,432
33,888
6,949
5,297
283,435
$ 1,334,050 $ 1,436,983 $ 1,569,711
121
CITY OF CARLSBAD
Changes in Net Assets
Last Seven Fiscal Years
(dollars in thousands)
2002 2003 2004 2005 2006
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
Wastewater
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
Golf course
Wastewater
Solid waste
Operating grants and contributions
Capital grants and contributions
Total business-type activities
Total government
Net (Expcnse)/Revenue:
Governmental activities
Business-type activities
Total government net expense
$ 7,600
25,660
10,539
13,270
15,015
1,673
73,757
19,311
98
6,169
213
25,791
$ 99,548
$ 8,518
27,748
12,004
14,538
16,826
1,048
80,682
19,261
93
6,104
218
25,676
$ 106,358
$ 8,604
30,894
13,814
15,035
19,534
996
88,877
20,950
54
6,891
1,300
29,195
$ 118,072
$ 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
$ 15,382 (1)
35,822
14,332
16,790
35,937
1,036
119,299
24,124
2,471
8,265
1,699
36,559
$ 155,858
$582
2,957
3,810
1,828
5,440
7,985
26,852
49,454
$ 750
3,269
4,261
2,086
6,668
10,139
45,180
72,353
$ 571
3,699
4,203
2,102
4,533
14,570
42,215
71,893
$ 926
3,232
5,934
2,292
4,633
12,817
74,414
104,248
$ 945
3,611
4,677
2,437
6.451
12,116
39,286
69,523
19,102 18,276 18,862 18,788 19,462
5,919 6,286 6,203 6,378 6,801
505 868 1,673 2,348 1,893
577 1,267 1,504 508 718
16,155 19,539 17,377 17,122 11,213
42,258 46,236 45,619 45,144 40,087
$ 91,712 $ 118,589 $ 117,512 $ 149,392 $ 109,610
$ (24,303) $ (8,329) $ (16,984) $ 5,055 $ (49,776)
16,467 20,560 16,424 14,974 3,528
$ (7,836) $ 12,231 $ (560) $ 20,029 S (46,248)
122
2007 2008
$ 12,273
38,327
13,860
17,913
37,278
688
120,339
40,383 (2)
200
9,590
1,901
52,074
$ 172,413
$ 1,194
4,170
4,158
2,639
5,083
17,597 (3)
49,254 (4)
84,095
22,186
-
7,507
1,966
2,296
25,053 (4)
59,008
$ 143,103
$ (36,244)
6,934
$ (29,310)
$ 14,537
42,796
15,697
18,938
35,971
666
128,605
28,796
7,347
10,400
2,588
49,131
$ 177,736
$ 2,698
4,578
3,191
2,803
8,522
11,349
73,708
106,849
22,894
5,704
8,151
2,195
1,300
30,223
70,467
$ 177,316
$ (21,756)
21,336
$ (420)
(Continued)
123
CITY OF CARLSBAD
Changes in Net Assets (Continued)
Last Seven Fiscal Years
(dollars in thousands)
2002 2003 2004 2005 2006
General Revenues and Other Changes in Net Assets
Governmental activities
Taxes:
Property taxes $ 28,495
Sales and use taxes 21,004
Transient occupancy taxes 8,533
Franchise taxes 7,495
Business license taxes 2,440
Real property transfer taxes 1,193
Vehicle license fees 4,675
Income from property and investments 18,095
Other general revenues 762
Transfers 17
Total governmental activities 92,709
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
1,516
7,010
804
(17)
9,313
$ 102,022
$ 68,406
25,780
$ 94,186
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 (5) $
24,759
10,072
5,683
2,890
1,646
2,136 (5)
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).
(1) In Fiscal Year 2005-06, the City incurred clean-up and repair costs related to the winter storms of 2005.
(2) In Fiscal Year 2006-07, the Water Enterprise settled a lawsuit regarding a landslide at the Marbella Condominiums for $11.3 million
and the Enterprise transferred funds to the Self Insured Benefits Fund for the proposed funding of retiree healthcare costs as
required under GASB 45.
(3) The large increase in Fiscal Year 2006-07 reflects a $6.3 million reimbursement from the Federal Highway Administration for
reimbursement of the 2005 winter storm damage in the City.
(4) The large increase in Fiscal Year 2006-07 reflects the recording of infrastructure assets acquired by the City for development
at Bressi Ranch, the Oaks South, the Ridge and the Greens communities.
(5) Beginning in Fiscal Year 2004-05, the City began receiving additional property tax revenue in-lieu of reduced vehicle license fees.
124
2007 2008
$ 49,284
27,445
12,929
5,346
3,056
1,262
608
21,455
700
400
122,485
$ ' 52,705
27,031
14,277
4,634
3,328
951
450
24,955
513
(2,634)
126,210
2,504
7,621
34
(400)
9,759
132,244
2,711
8,030
954
2,634
14,329
$ 140,539
86,241
16,693
$ 102,934
104,454
35,665
S 140,119
125
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
Debt service funds (1)
Capital project funds
1999(1)
12,893
39,221
52,114
30,938
18,639
291
102,038
Total all other governmental funds $ 151,906
2000
14,324
42,179
56,503
27,658
20,458
(11,092)
108,866
$ 145,890
2001
11,746
58,857
70,603
$ 36,030
19,709
(11,586)
131,382
$ 175,535
2002
12,006
76,149
8,155
37,776
20,542
(10,371)
128,869
2003
176,816
12,794
58,343 (2)
71,137
44,265
21,011
(10,449)
171,227
226,054
General Fund Balance
(in thousands)
$80,000
$60,000
$40,000
$20,000
$0 B Reserved
• Unreserved
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 in Fiscal Year 2003 from the General Fund to the General Capital Construction Fund to assist
in the construction of four large projects.
(3) $15 million was reserved at the end of the 2005 Fiscal Year for future advances to the Golf Course Fund.
(4) $30.3 million was reserved at the end of the 2006 Fiscal Year for future advances to the Golf Course Fund.
(5) A $9.7 million transfer was made in Fiscal Year 2007 from the General Fund to the Golf Course Fund to assist
in the construction of the City's new municipal golf course.
(6) $18.8 million in transfers were made in Fiscal Year 2008 from the General Fund to the Infrastructure Replacement Fund and
the General Capital Construction Fund for future capital projects.
126
2004 2005 2006 2007 2008
27,917
56,141
(3) $
84,058
44,996
54,400
(4) $
$ 99,396
45,131
61,494
$ 106,625
56,505 (5)
66,084
$ 122,589
56,479
64,494
$ 120,973
54,414 49,583 38,000 44,352 38,963
29,841
(9,789)
171,194
S 245,660
30,031
(11,317)
206,711
30,024
(11,681)
221,393
32,485
(12,423)
231,071
36,277
(12,095)
268,915 (6)
275,008 277,736 295,485 $ 332,060
127
CITY OF CARLSBAD
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines and forfeitures
Income from property and investments
Contributions from property owners
Donations
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Less: Interdepartmental charges
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):
Proceeds from the sale of property
Proceeds of advances
Proceeds of debt
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Debt service as percentage of noncapital
expenditures (1,2)
1999 2000 2001 2002 2003
$ 57,508 $
17,802
3,827
6,805
936
8,925
45,763
350
1,544
143,460
6,784
(1,934)
21,928
8,636
7,541
12,690
52,107
825
1,645
110,222
33,238
589
-
2,603
(2,603)
589
$ 33,827 $
62,268 $
14,094
3,321
5,749
840
10,496
14,733
561
1,183
113,245
7,383
(2,007)
21,799
11,538
9,088
13,823
39,543
821
1,660
103,648
9,597
-
332
15,533
(15,533)
332
9,929 $
70,147 $
14,286
3,409
6,427
889
20,385
15,982
312
2,260
134,097
9,022
(2,148)
23,627
9,352
11,571
14,402
22,067
1,029
1,814
90,736
43,361
-
91
9,544
(9,651)
(16)
43,345 $
71,528 $
14,267
1,998
7,751
947
18,700
11,251
210
2,386
129,038
8,415
(2,284)
25,598
10,316
12,449
15,404
37,503
1,133
1,694
110,228
18,810
-
6
11,833
(11,816)
23
18,833 $
74.156
19,775
2,043
10,059
923
14,802
14,547
149
2,349
138,803
8,805
(2,815)
26,798
11,799
13,374
18,177
26,410
1,672
1,628
105.848
32,955
-
-
47,846
(48,581)
(735)
32,220
3.86%4.17%
Source: City of Carlsbad Comprehensive Annual Financial Report.
1I) 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.
(2) Information not available for years prior to GASB 34 implementation.
128
2004 2005 2006 2007 2008
$ 79,533 $
22,506
2,329
9,899
1,092
3,902
23,682
141
1,543
144,627
9,745
(2,735)
30,799
13,644
13,915
18,045
26,406
1,214
1,466
112,499
84,065 $
24,245
3,393
10,433
1,084
10,741
49,446
164
1,107
184,678
12,113
(2,700)
33,819
14,319
14,744
18,737
46,420
1,040
1,501
139,993
94,862 $
13,027
2,504
11,038
1,178
10,387
25,365
130
2,077
160,568
16,311
(2,639)
36,365
14,300
15,637
20,327
47,032
1,037
1,599
149,969
; 101,196 $
25,097
2,094
10,937
1,387
22,270
10,311
173
950
174,415
18,013
(2,151)
39,832
13,998
16,667
22,481
30,765
1,091
1,333
142,029
105,724
19,565
1,991
11,089
1,500
24,163
23,850
281
932
189,095
14,433
(2,287)
43,719
15,726
17,136
24,355
39,010
1,140
1,347
154,579
32,128 44,685 10,599 32,386 34,516
1,364
8,729
(8,329)
10,228
(10,228)
11,685
(12,334)
9,723
(9,760)
20,390
(19,948)
400 (649)1,327 442
32,528 $44,685 9,950 $ 33,713 $ 34,958
3.10%2.71%2.41%2.01%2.08%
129
CITY OF CARLSBAD
General Governmental Tax Revenues by Source
Last Ten Fiscal Years
(in thousands)
Transient
Property Sales and Occupancy Franchise
Fiscal Year Tax * Use Taxes Taxes Taxes
1999 $ 26,688 $ 17.129 $ 7,010 $ 1,954
2000 27.335 19,493 8,333 2,592
2001 30,656 21,197 9,269 3,916
Business
License
Taxes
$ 1.738
1,864
2,300
2002 28,512 21,661 8,533 (4) 7,495 (5) 2,440
2003 31,412 25,543 (3) 8,387 3,730
2004 33,949 25,571 8,814 5,027
2005 35,650 (1) 26,331 10,072 5,683
2006 43,936 27,294 11,513 5,429
2007 49,284 27,889 12,929 5,346
2008 52,705 28,012 14,277 4,634
Change
1999-2008 97% 64% 104% 137%
Total General Governmental
(in thousands)
f.(\ (\r\c\ou,uuu — — ~ _ „ — . . . — —
50,000 -
40,000 - ./
^— -* — ^30,000 ^--"*—- - — *•— - """*» »""^ ^ in.!.. m —
^ ^_ nm^""*^
20,000 - _^— -*• ^^ - " •
10 000 - - ^**^"^ ^*"~'^,l_ ...i.-'"" ' I, — — ""
2,305
2,872 (2)
2,890
3,040
3,056
3,328
91%
Keal
Property
Transfer Total Tax
Taxes Misc. Taxes Revenue
$ 1,081 $ ,908 $ 57.508
993 ,658 62,268
,095 ,714 70,147
,193 ,694 71,528
,127 ,652 74,156
,587 ,713 79,533
,646 ,793 84,065
,906 ,744 94,862
,262 (6) ,430 101,196
951 ,817 105,724
-12% -5% 84%
Tax Revenues
^
-m- •—
__ -
1999 2000 2001 2002 2003 2004 2005 2006 2007
Fiscal Year
^
1 • Property Taxi• Sales and Use Taxes
_H TOT
| Other
•*•* 1
2008
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 2001.
(6) Reflects the beginning of the downturn in the housing market.
130
CITY OF CARLSBAD
Water and Wastewater Rates
Last Ten Fiscal Years
Water Wastewater
Fiscal Year
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Monthly Delivery Base Price Per
Charge Unit(l)
$9.25 $1.70
9.25
9.25
9.25
9.25
9.25
9.25
9.25
9.75
12.12
.60
.60
.60
.60
.60
.60
.60
.68
.76
Monthly Base
Rate
$15.00
15.00
13.00
13.00
13.00
13.00
13.00
13.50
14.65
16.20
Source: City of Carlsbad.
Note: Rates shown are for a 5/8" meter, which is the standard household meter size.
(1) One unit of water equals 748 gallons.
131
CITY OF CARLSBAD
Assessed Value of Taxable Property
Last Ten Fiscal Years
(dollars in millions)
Fiscal
Year
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Residential
Property
$ 5,315
6,418
7,367
8,543
9,612
10,700
11,984
13,619
15,650
16,988
20,000
15,000 -
10,000 -
5,000
Commercial
Property
1 954~
1,036
1,192
1,310
1,413
1,516
1,749
1,962
2,181
2,635
Industrial
Property
$ r\T
854
1,282
1,341
1,469
1,231
1,266
1,398
1,660
1,883
Exemptions
and Other
Taxable
Property (1)
$ 410
583
649
657
516
856
742
729
569
534
Net Assessed
Valuation
$ 7,392
8,891
10,490
11,851
13,010
14,303
15,741
17,708
20,060
22,040
Total Property
Tax Revenue
(2)
$ 14.196
16.762
19.658
22.286
24.974
26.960
33.330
38.041
43.651
47.197
(4)
Total Direct
Tax Rate (3)
0.192%
0.189%
0.187%
0.188%
0.192%
0.188%
0.212%
0.215%
0.218%
0.214%
Taxable Assessed Value
(in millions)
•n fi
E.3 Residential Property
• Commercial Property
D Industrial Property
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
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.
(2) Property tax revenues do not include special assessments, redevelopment tax increment or community facilities
district revenues.
(3) The total direct tax rate was calculated by dividing the total property tax revenue by the total taxable value.
(4) In Fiscal Year 2004-05, there was an increase in the property taxes received, offset by a decrease in Vehicle License Fees (VLF).
132
CITY OF CARLSBAD
Principal Property Taxpayers
Current Year and Nine Years Ago
2008 1999
Taxpayer
Continuing Life Communities LLC
Aviara Resort Associates LLC
KSL La Costa Resort Corp.
Legoland California, Inc.
Ruby's Diner - Carlsbad
Callaway Golf Company
Borders, Inc.
PPC Cascade LLC
H.G. Fenton Company
Pulte Home Corp.
San Diego Gas & Electric Co.
Real Estate Collateral Mgmt. Co.
Prentiss Properties Acquisition
Villages of La Costa
Air Products & Chemicals, Inc.
Puritan-Bennett Corporation
Total
Net assessed valuation
Taxable Assessed
Value
$ 160,479,289
132,196,556
126,131,849
116,351,777
109,602,750
100,856,885
81,002,094
79,307,037
75,411,647
62,467,200
-
-
-
-
-
-
$ 1,043,807,084
$ 22,040,017,749
Rank
1
2
3
4
5
6
7
8
9
10
Percentage of
Total City Net
Assessed Value
0.73%
0.60%
0.57%
0.53%
0.50%
0.46%
0.37%
0.36%
0.34%
0.28%
-
-
-
-
-
-
4.74%
Taxable Assessed
Value
-
$ 144,818,525
182,345,611
135,708,865
-
108,670,798
-
-
-
-
249,463,675
103,992,732
60,715,971
51,102,000
46,124,487
39,013,804
$ 1,121,956,468
$ 7,391,938,713
Rank
3
2
4
5
1
6
7
8
9
10
Percentage of
Total City Net
Assessed Value
-
1.96%
2.47%
1.84%
-
1 .47%
-
-
-
-
3.37%
1.41%
0.82%
0.69%
0.62%
0.53%
15.18%
Source: County of San Diego Office of the Auditor and Controller, County Assessor, and MuniServices, LLC
133
CITY OF CARLSBAD
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Year
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Total Current
Levy (1)
18,159,348
21,153,690
24,597,515
27,351,054
30,178,314
33,117,599
44,057,622
49,806,112
51,854,596
56,098,718
(3)
Total Current
Collections (2)
17,303,313
20,176,885
23,572,005
26,360,056
29,018,421
31,753,020
42,251,018
47,723,226
49,219,793
52,622,619
% of Levy
Collected
95.30%
95.40%
95.80%
96.40%
96.20%
95.90%
95.90%
95.80%
94.90%
93.80%
60 n
50 -
40 -
30
20 -
10 -
0
Property Tax Levies & Collections
Last Ten Fiscal Years
(in millions)
nil D Total Current Levy (1)
• Total Current Collections (2)
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) Starting in Fiscal Year 2004-05, the City received additional property tax payments in lieu of vehicle license fees.
134
135
CITY OF CARLSBAD
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(dollars in thousands except per capita)
Fiscal Year
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Governmental Activities
Bonds / Special
Debt
$ 14,460
14,170
13,865
13,540
13,200
12,840
12,460
12,065
11,645
11,205
Certificates of
Participation
$ 6,075
5,570
5,055
4,515
3,950
3,360
2,740
2,105
1,435
735
Capital Leases
$ 633
904
888
791
179
79
7
1
-
-
Loans Payable
$ 750
620
480
330
170
-
-
-
-
-
$800
Outstanding Debt per Capita
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) During Fiscal Year 2006-07, Carlsbad Municipal Golf Course Revenue Bonds were issued for $18.5 million.
(2) The State Water Resources Control Board issued low interest loans for the Carlsbad Water Recycling Facility
for $9.7 million during Fiscal Year 2005-06, and $19.4 million in Fiscal Year 2006-07.
(3) Percentage of personal income is calculated using personal income for the prior year.
Sources: MuniServices, LLC, California Department of Finance, US Census Data.
136
Business-Type Activities
Accrued Bonds / Special
Assessments Debt (1)
$ 1,252 $
951
789
621
443
257
-
-
18,540
18,540
Certificates of
Participation
$ 5,405
4,410
3,370
2,295
1,175
-
-
-
-
Installment
Purchase
Agreements
$ 10,250
9,810
9,350
8,870
8,375
7,855
7,305
6,730
6,125
5,485
Loan
Payable (2)
$ 1,897
1,792
1,705
1,574
1,460
1,343
1,223
10,592
29,096
28,465
Capital
Leases
S
-
-
-
-
-
-
-
699
958
Total
$ 40,722
38,227
35,502
32,536
28,952
25,734
23,735
31,493
67,540
65,388
Percentage
of Personal
Income (3)
1.03%
0.77%
0.66%
0.58%
0.51%
0.45%
0.40%
0.50%
1.04%
0.95%
Per Capita
$ 558.60
488.54
426.49
369.22
319.41
277.24
250.12
319.27
666.49
629.88
137
138
CITY OF CARLSBAD
Schedule of Direct and Overlapping Bonded Debt
Current Fiscal Year
Fiscal Year 2007-08 Assessed Valuation:
Redevelopment Incremental Valuation:
Adjusted Assessed Valuation:
OVERLAPPING TAX AND ASSESSMENT DEBT:
Metropolitan Water District
Palomar Community College 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
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 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
Encinitas Union School District Certificates of Participation
Other School District Certificates of Participation
City of Carlsbad General Fund Obligations
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT
COMBINED TOTAL DEBT
(1) Percentage of overlapping agency's assessed valuation located within boundaries of the city.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and
non-bonded capital lease obligations.
Ratios to Fiscal Year 2007-08 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.15%
Ratios to Adjusted Assessed Valuation:
Combined Direct Debt ($735,000) 0.003%
Combined Total Debt . 1.85%
Source: MuniServices, l.LC and County of San Diego Office of the Auditor and Controller
$ 22,366,861,213
326,843,464
$ 22,040,017,749
Total Debt
06/30/08
$ 327,215,000
158,000,000
56,924,271
7,000,000
118,450,000
138,209,882
18,925,496
16,128,019
24,380,000
24,550,000
266,492
19,489,750
803,455
48,440,000
309,443,319
17,965,000
29,490,000
68,125,000
$ 1,383,805,684
$ 357,645,000
1,053,187,916
17,267,500
4,240,000
7,690,000
54,285,000
5,435,000
900,000
8,185,000
735,000
$ 1,509,570,416
$ 2,893,376,100
Percent
Applicable (1)
1.26%
3.12%
97.62%
100.00%
0.01%
0.46%
31.50%
38.47%
24.40%
100.00%
100.00%
98.08%
12.04%
30.40%
2.16%
21.69%
100.00%
100.00%
6.48%
6.48%
6.48%
26.96%
3.12%
97.62%
33.37%
31.50%
Various
100.00%
City's Share of
Debt 6/30/08
$ 4,116,365
4,928,020
55,567,196
7,000,000
5,923
633,001
5,961,531
6,205,255
5,949,451
24,550,000
266,492
19,115,547
96,696
14,725,276
6,683,976
3,895,890
29,490,000
68,125,000
$ 257,315,619
$ 23,157,514
68,193,918
1,118,071
1,143,231
239,851
52,990,846
1,813,877
283,500
32,097
735,000
$ 149,707,905
$ 407,023,524
139
CITY OF CARLSBAD
Direct and Overlapping Debt
Last Ten Fiscal Years
(rate per SI,000 of assessed value)
OVERLAPPING TAX AND ASSESSMENT DEBT:
San Diego County Water Authority
Metropolitan Water District
Palomar Community College 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
City of Carlsbad 1915 Act Bonds
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
1999
1.752
2.581
0.011
0.611
6.467
3.584
2.569
0.016
0.246
1.514
0.075
0.212
0.028
0.822
2000
1.457
1.319
0.005
0.553
4.908
3.524
2.149
0.014
0.207
1.460
0.050
0.166
0.021
0.626
2001
$ 0.054 3
0.691
3.502
0.729
1.638
0.941
0.174
0.785
5 0.040 $
0.611
2.909
0.186
1.315
0.874
0.131
0.682
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
3.016
1.801
0.012
0.176
5.493
0.031
0.063
0.018
0.482
Source: California Municipal Statistics, Inc. & MuniServices, LLC
140
2002 2003 2004 2005 2006 2007 2008
$ 0.017 $
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 $
1.470
0.011
0.145
-
4.843
-
0.015
0.078
0.022
0.381
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 $
3.951
0.010
0.121
-
4.392
-
-
0.045
0.021
0.304
$
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
1.881 $
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
$
0.224
0.239
0.897
-
0.386
0.011
0.322
-
0.327
0.080
0.302
1.255
0.014
0.975
0.005
0.734
0.203
0.573
3.553
1.125 $
4.306
0.058
0.061
0.012
2.694
0.093
-
0.018
0.001
0.072
0.187
0.224
2.521
-
0.318
0.029
0.270
-
0.282
0.303
0.270
1.114
0.012
0.867
0.004
0.668
0.177
1.338
3.091
1.051
3.094
0.051
0.052
0.011
2.404
0.082
-
0.013
0.001
0.033
141
CITY OF CARLSBAD
Legal Debt Margin Information
Last Ten Fiscal Years
(dollars in thousands)
1999 2000 2001 2002 2003
Net assessed valuation
Debt limit (25% x 15%)
Less 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
$ 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
S 10,490,116
393,380
13,865
5,055
888
19,808
S 373,572
S 11,850,679
444,400
13,540
4,515
791
18,846
$ 425,554
$ 13,009,712
487,864
13,200
3,950
179
17,329
$ 470,535
7.64%6.19%5.04%
Percent of Debt Applicable to the Legal Debt Limit
12.00%
8.00%
4.00%
0.00%
4.24%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
3.55%
Note: Under state finance law, the City's outstanding general obligation debt should not exceed 15 percent (as adjusted by 25% per the law) 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.
(1) $ 18.5 million in golf course bonds were issued in Fiscal Year 2006-07. If the golf course net operating revenue is not sufficient to cover the debt
service payment, the General Fund will make the debt service payment.
142
2004
$ 14,303,050
536,364
12,840
3,360
79
16,279
520,085
2005
15,741,122
590,292
12,460
2,740
7_
15,207
$ 575,08~
2006
664,047
12,065
2,105
1_
14,171
649,876
2007 2008
$ 20,059,893
752,246
30,185
1,435
31,620
$ 22,040,018
826,501
(1) 29,745
735
30,480
$ 720,626 S 796,021
3.04%2.58%2.13%4.20%3.69%
143
CITY OF CARLSBAD
Fledged-Revenue Coverage
Last Ten Fiscal Years
1999 2000 2001 2002 2003
Wastewater Revenue Bonds
Gross revenues (1)
Less expenses (2)
Net available revenue
Debt service
Principal
Interest
Total debt service
Coverage
Recycled Water Loans
Gross revenues (3)
Less expenses(4)
Net available revenue
Debt service
Principal (5)
Interest
Total debt service
Coverage
Golf Course Revenue Bonds
Gross revenues (1)
Less expenses(2)
Net available revenue
Debt service
Principal (6)
Interest
Total debt service
Coverage
$ 7,897,329 !
3,245,049
$ 4,652,280 :
$ 425,000 !
517,672
$ 942,672 !
4.94
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
£ 8,421,638
3,292,428
6 5,129,210
6 440,000
500,371
5 940,371
5.45
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
$ 11,089,995
3,870,885
$ 7,219,110
$ 460,000
482,027
$ 942,027
7.66
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
$ 9,438,807 $ 9,342,266
4,245,186 4,143,066
$ 5,193,621 S 5,199,200
480,000
462,162
n/a n/a n/a
5.51
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
495,000
441,199
942,162 $ 936,199
5.55
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Source: City of Carlsbad
(1) Include operating and non-operating revenues.
(2) Include operating and non-operating expenses, excluding interest expense and depreciation.
(3) Include recycled water operating and non-operating revenues and fees.
(4) Include recycled water operating and non-operating expenses, excluding interest expense and depreciation.
(5) Fiscal Year 2006-07 is the first year loan payments were made.
(6) Fiscal Year 2008-09 is the first year for principal payment.
144
2004 2005 2006 2007 2008
$
$
$
$
6,854,001
4,868,101
1,985,900
520,000
416,256
936,256
$ 8,557,183
4,767,082
$ 3,790,101
$ 550,000
389,581
$ 939,581
$ 8,306,783
5,647,888
$ 2,658,895
$ 575,000
361,394
$ 936,394
$ 11,325,931
6,839,519
$ 4,486,412
$ 605,000
328,944
$ 933,944
$ 11,756,538
7,538,608
$ 4,217,930
$ 640,000
295,506
$ 935,506
2.12 4.03 2.84 4.80 4.51
n/a n/a
n/a n/a
n/a n/a
n/a n/a
n/a n/a
n/a n/a
n/a
n/a
n/a
n/a
n/a
n/a
$ 4,187,044
1,936,752
$ 2,250,292
$ 537,565
268,821
$ 806,386
$ 4,714,098
2,456,688
$ 2,257,410
$ 1,172,574
827,914
$ 2,000,488
n/a n/a n/a 2.79 1.13
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
$ 6,614,579
6,312,031
$ 302,548
$
827,050
n/a n/a n/a n/a $ 827,050
n/a n/a n/a n/a 0.37
145
CITY OF CARLSBAD
Demographic and Economic Statistics
Last Ten Fiscal Years
Year
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Total
Population
72,900
78,247
83,242
88,120
90,643
92,823
94,896
98,641
101,337
103,811
%ofS.D.
County
Population
2.65%
2.78%
2.91%
3.02%
3.05%
3.08%
3.12%
3.22%
3.27%
3.30%
% Change from
Previous Year
4.74%
7.33%
6.38%
5.86%
2.86%
2.41%
2.23%
3.95%
2.73%
2.44%
Median Age
n/a
38.9
38.9
39.4
39.7
40.2
40.6
40.9
41.2
39.7
Avg. Household
Size
n/a
2.46
2.46
2.48
2.48
2.51
2.48
2.51
2.53
2.45
Sources: MuniServices, LLC, and previously published City of Carlsbad CAFR Reports
Population projections are from the California Department of Finance.
Household and demographic characteristics estimates are from MuniServices current estimates, the U.S. Census Bureau
Census 2000 and American Community Survey.
Income estimates are derived from the Bureau of Economic Analysis, U.S. Census Bureau Census 2000 data,
and adjusted for inflation.
Unemployment rate estimates are from the California Employment Development Department,
Bureau of Labor Statistics.
(1) Personal Income is the total aggregate income that correlates to the total population.
146
Educational Attainment
% High School
Graduate
n/a
n/a
93.10%
n/a
n/a
n/a
95.00%
95.40%
n/a
96.40%
% Bachelor's
Degree or
Higher
n/a
n/a
45.60%
n/a
n/a
n/a
46.90%
53.00%
n/a
49.30%
Personal
Income ( 1 )
(millions)
$ 4,614
5,028
5,261
5,476
5,545
5,842
6,017
6,338
6,721
7,081
Per Capita
Personal
Income
$ 63,297
64,259
63,205
62,138
61,178
62,937
63,403
64,252
66,325
68,214
Unemployment
Rate
n/a
2.50%
2.70%
3.40%
3.40%
3.10%
2.80%
2.60%
4.00%
3.00%
147
CITY OF CARLSBAD
Principal Employers
Current Year and Nine Years Ago
Employer
Manufacturing
Invitrogen Corp.
Taylor Made-Adidas Golf Co.
Callaway Golf
Crestone Group Baking Co.
Asymtek
Acushnet Golf
Titleist
Upper Deck
Zimmer Dental
Systems, Machines Automation
Astec America
Nellcor Puritan Bennett Corp.
West Coast Composite
Cobra Golf, Inc., II
Ashworth, Inc.
Palomar Products
No Fear
Syntron Bioresearch, Inc.
Schumacher Company
Non-Manufacturing
ViaSat, Inc.
La Costa Resort & Spa
LEGOLAND California
Carlsbad Unified School District
City of Carlsbad
Four Seasons Resort Aviara
GIA Laboratory
Grand Pacific Resorts
Macy's
24-Hour Fitness
Plaza Camino Real
Carlsbad Company Stores
Gemological Institute of America
SOMC Group, Inc.
Farmer's Insurance
ISIS Pharmaceuticals
San Diego Gas & Electric Company
Costco Wholesale
Subtotal Employees
Total Employees
Source: Carlsbad Business License Data (2008) and Carlsbad Chamber of Commerce (1999).
(1) Total employee count is not available for 1999.
(2) These employers are now tracked by individual store versus combined by mall name.
2008
Employees
3,716
2,075
1,637
575
492
400
400
364
332
294
291
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
1,837
1,087
986
950
851
709
587
540
496
430
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
19,049
55,538
Rank
1
2
3
4
5
6
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
% of Total City
Employment
6.69%
3.74%
2.95%
1.04%
0.89%
0.72%
0.72%
0.66%
0.60%
0.53%
0.52%
3.31%
1.96%
1.78%
1.71%
1.53%
1 .28%
1.06%
0.97%
0.89%
0.77%
34.30%
1999
Employees Rank
450
2,000
280
250
1,000
700
675
394
300
250
250
248
350
950
1,100
750
775
1,100
3,000
750
466
380
350
350
325
285
17,728
n/a (1)
2
3
4
6
7
9
9
10
8
3
2
5
4
2
1
5
6
7
8
8
9
10
(2)
(2)
148
149
CITY OF CARLSBAD
Authorized Full and 3/4 Time City Government Employees by Major Service Area
Last Ten Fiscal Years
Major Service Area
1999 2000 2001 2002 2003
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
lncrease/(decrease) over prior year
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
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
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).
150
2004 2005 2006 2007 2008
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
1.00
7.00
3.75
0.75
7.00
2.00
8.00
19.00
28.00
2.00
10.00
157.00
87.75
5.00
13.00
1.00
3.00
27.00
10.00
48.00
5.00
30.50
15.20
54.60
96.20
48.50
690.25
30.25
1.00
7.00
3.75
0.75
7.00
2.00
8.00
19.00
28.00
2.00
10.00
162.00
88.75
3.00
14.00
2.00
4.00
27.00
10.00
48.00
5.00
30.50
18.15
56.90
98.00
55.45
711.25
21.00
151
CITY OF CARLSBAD
Operating Indicators by Function/Program
Last Four Fiscal Years
2005 2006 2007 2008
General Government
Number of recruitments processed
Number of new hires and promotions
Business licenses processed
Number of payments processed
Public Safety
Police
Calls for service
Average priority one response (minutes)
Cases
Crime prevention programs/services
Fire
Emergency responses
Response time: arrivals on scene within eight minutes
Community Development
Affordable housing units completed
Financial assistance to affordable housing projects
Residential building permits issued
Building inspections conducted
Final inspections (dwelling units)
Code enforcement inspections
Response time: inspections performed by next working day
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
Wastewater
Sewage pumped (millions of gallons per day)
Annual flow (millions of gallons)
Wastewater customers
Source: City of Carlsbad
67
78
8,507
41,354
73,667
6.8
9,525
677
6,594
87%
439
$1,600,000
1,745
53,267
1,702
5,600
94%
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
20,281
7.36
2,688
16,454
64
124
8,955
40,283
74,546
6.3
10,059
743
5,908
88%
110
$1,440,000
943
51,000
1,440
5,600
97%
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
23,099
6.62
2,416
18,754
74
105
8,926
41,337
87,213
6.0
11,178
888
6,705
89%
66
$3,009,000
472
33,523
765
6,800
96%
1,286,654
685,782
58
64,000
1,150
5,300
1,650
16,700
5,200
23.80
1,806
21,500
393
25,791
6.81
2,486
20,858
54
118
9,405
41,991
94,126
5.7
11,259
965
7,853
89%
168
$1,932,000
337
26,801
700
5,500
98%
1,291,611
662,524
62
76,000
1,200
5,400
1,750
18,000
6,400
11.90
1,814
20,271
386
27,770
7.96
2,905
22,200
152
CITY OF CARLSBAD
Capital Asset Statistics
Last Four Fiscal Years
2005 2006 2007 2008
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
Public Safety
Fire Protection
Number of stations
Number of fire trucks
Number of ambulances
Number of other fire vehicles
Police Protection
Number of patrol and other vehicles
Number of motorcycles
Public Works
Carlsbad Municipal Water District
Miles of lines and mains
Wastewater
Miles of sewers
Streets
Miles of streets
Number of street lights
Number of traffic signals
373,
30
295
625
13
11
2
2
1,998
30
295
625
27
11
2
2
356,385
31
348
625
31
11
2
2
371,885
31
348
625
35
11
2
2
373,592
4
II
85
13
431
232
295
6,445
138
6
11
4
11
82
13
434
254
308
6,786
152
5
13
90
12
442
265
332
7,372
155
5 *
14 *
93 *
17 *
442
265
338
7,588
164
Source: City of Carlsbad
Includes new replacement vehicles, and excludes vehicles classified as out-of-service at June 30th of that particular fiscal year.
153
154