HomeMy WebLinkAbout; ; 2012-2013 CAFR; 2013-06-30Fiscal Year Ended June 30, 2013
Comprehensive Annual Financial Report
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FISCAL YEAR ENDED
JUNE 30, 2013
1635 Faraday Avenue, Carlsbad, CA 92008
Website: www.carlsbadca.gov
Prepared by the Finance Department
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CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2013
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION:
City Council’s 2013 Strategic Goals 1
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting, Government Finance Officers
Association 14
Location Map 15
List of City Officials 16
Organization Chart 17
FINANCIAL SECTION:
Independent Auditor’s Report 19
Management’s Discussion and Analysis 22
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position 38
Statement of Activities 40
Fund Financial Statements:
Balance Sheet – Governmental Funds 42
Reconciliation of the Balance Sheet of Governmental Funds to the Statement
of Net Position 44
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds 46
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 48
Statement of Revenues, Expenditures and Changes in Fund Balance –
Budget and Actual – General Fund 49
Statement of Net Position – Proprietary Funds 52
Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds 56
Statement of Cash Flows – Proprietary Funds 58
Statement of Net Position – Fiduciary Funds 62
Statement of Changes in Net Position – Fiduciary Funds 63
Notes to the Financial Statements 64
Supplementary Information
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet – Nonmajor Governmental Funds 100
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances – Nonmajor Governmental Funds 104
Combining Schedule of Revenues and Expenditures – Budget and Actual
(Budgetary Basis) – Special Revenue Funds 108
Combining Schedule of Revenue and Expenditures – Budget and Actual
(Budgetary Basis) – Capital Project Funds 110
Combining Statement of Net Position – Internal Service Funds 112
Combining Statement of Revenues, Expenses and Changes in Net Position –
Internal Service Funds 114
Combining Statement of Cash Flows – Internal Service Funds 116
Combining Statement of Changes in Assets and Liabilities – Agency Funds 120
Combining Statement of Fiduciary Net Position by Project Area – Private Purpose
Trust Funds 122
Combining Statement of Changes in Fiduciary Net Position by Project Area –
Private Purpose Trust Funds 123
Schedule of Annual Debt Service Requirements 124
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CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2013
TABLE OF CONTENTS (CONTINUED)
Page
STATISTICAL SECTION:
Financial Trends:
Net Position by Component – Last Ten Fiscal Years 128
Changes in Net Position – Last Ten Fiscal Years 130
Fund Balances of Governmental Funds – Last Ten Fiscal Years 134
Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 136
General Governmental Tax Revenues by Source – Last Ten Fiscal Years 138
Revenue Capacity:
Water and Wastewater Rates – Last Ten Fiscal Years 139
Assessed Value of Taxable Property – Last Ten Fiscal Years 140
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years 141
Principal Property Taxpayers – Current Year and Nine Years Ago 142
Property Tax Levies and Collections – Last Ten Fiscal Years 143
Debt Capacity:
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 144
Schedule of Direct and Overlapping Bonded Debt – Current Fiscal Year 146
Direct and Overlapping Debt – Last Ten Fiscal Years 148
Legal Debt Margin Information – Last Ten Fiscal Years 150
Pledged-Revenue Coverage – Last Ten Fiscal Years 152
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years 154
Principal Employers – Current Year and Nine Years Ago 156
Operating Information:
Authorized Full and ¾ Time City Government Employees by Major Service Area –
Last Ten Fiscal Years 158
Operating Indicators by Function/Program – Last Eight Fiscal Years 160
Capital Asset Statistics – Last Eight Fiscal Years 162
Introductory Section Introductory Section
Introductory Section
Introductory Section
City of Carlsbad provides exceptional, top quality services on a daily basis by proactively listening,
engaging and responding to its residents.
¾ Balanced community development: Be a city that connects community, place and spirit, through
balanced and economically sustainable land uses.
¾ Resident connection and partnership: Be a city that embraces community connectivity through
the effective use of technological and interpersonal mediums.
¾ 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.
¾ Economic Development: Strengthen the city’s strong and diverse economy, supporting local
businesses, attracting new businesses in targeted industries and solidifying the city’s position as a
key employment hub.
¾ Environmental management: An environmentally sensitive community by focusing on
conservation, storm water, sewage collection and treatment, solid waste, and cost effective and
efficient use of energy including alternative energy sources.
¾ Financial health: Pursue and implement proactive strategies that support sustainable economic
health and manage city resources effectively.
¾ Learning, culture and arts: Promote and support continuous learning, cultural opportunities and
the arts within the community and the city organization.
¾ Parks, open spaces and 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.
¾ 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.
¾ Transportation and circulation: Provide and support a safe and efficient transportation system
that moves people, services and goods throughout the city.
¾ 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.
Carlsbad City Council
Fiscal Year 2013-14
Strategic Goals
City Council continues to clarify and pursue the vision of
Carlsbad that reflects the pride and quality of life.
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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 39 square miles and has a
population of 108,246, with an expected built out
population of 117,000 residents. Industries in the city
include a major regional shopping center; a specialty outlet
center; 34 hotels offering over 3,900 rooms for tourist
lodging; over 20 auto dealers; high technology, multimedia
and biomedical businesses; electronics, golf apparel and
equipment manufacturers; several business and light
industry parks; and numerous land developers building
single and multi-family housing in a variety of community
settings.
This report includes financial statements for the city, the
Housing Authority of the City of Carlsbad, the Carlsbad
Public Improvement Corporation, 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:
x Police protection services
x Development services
x Fire and paramedic services
x Street construction and maintenance
x Water delivery system
x Library and arts programs
x Wastewater system
x Recreation programming for all ages
x Solid waste services
x Park lands
x Housing programs
In addition to the full range of
services normally associated with a
municipality, Carlsbad offers
programs to help local residents and
businesses. Low-income families in
Carlsbad receive assistance from the
city’s Housing Authority and older
residents can take advantage of
Carlsbad’s senior citizen programs.
Budget Process
The Carlsbad Municipal Code
requires that the City Manager
annually prepare a budget for the City
Council with a message describing
important features, and assume
responsibility for the budget’s
administration after adoption. The
budget process begins in January each
year with a review and update of the
City Council’s five-year vision
statements and strategic goals 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
City of Carlsbad Community Vision
Small town feel, beach community character and connectedness
Enhance Carlsbad’s defining attributes - its small town feel and beach community character. Build on the city’s culture of civic engagement, volunteerism and philanthropy.
Open space and the natural environment -Prioritize protection and enhancement of
open space and the natural environment. Support and protect Carlsbad’s unique open
space and agricultural heritage.
Access to recreation and active, healthy lifestyles -Promote active lifestyles and
community health by furthering access to trails, parks, beaches and other recreation
opportunities.
The local economy, business diversity and tourism -Strengthen the city’s strong
and diverse economy and its position as an employment hub in north San Diego County.
Promote business diversity, increased specialty retail and dining opportunities, and
Carlsbad’s tourism.
Walking, biking, public transportation and connectivity -Increase travel options
through enhanced walking, bicycling and public transportation systems. Enhance
mobility through increased connectivity and intelligent transportation management.
Sustainability -Build on the city’s sustainability initiatives to emerge as a leader in
green development and sustainability. Pursue public/private partnerships, particularly on sustainable water, energy, recycling and foods.
History, the arts and cultural resources -Emphasize the arts by promoting a
multitude of events and productions year round. Cutting edge venues to host world class
performances, and celebrate Carlsbad’s cultural heritage in dedicated facilities and
programs.
High quality education and community services -Support quality, comprehensive
education and lifelong learning opportunities, provide housing and community services
for a changing population, and maintain a high standard for citywide public safety.
Neighborhood revitalization, community design and livability -Revitalize neighborhoods and enhance citywide community design and livability. Promote a
greater mix of uses citywide, more activities along the coastline and link density to public
transportation. Revitalize the downtown Village as a community focal point and a unique
and memorable center for visitors, and rejuvenate the historic Barrio neighborhood.
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achieve the vision and call out areas upon which the City Council would like to place special emphasis
during the year. Once the vision and priority projects are developed, city staff develops operational goals
and work plans based on the City Council’s direction. These goals and work plans provide the basis for the
development of the annual budget. The City Council adopts the formal budget for all funds at the
beginning of each fiscal year and may amend those budgets throughout the year as necessary.
Budgetary control for the city is maintained through its accounting systems. Expenditures may not exceed
budgeted figures at the fund level. Monthly reports summarizing the results of operations for the city’s
more significant funds are provided to the City Council.
FACTORS AFFECTING FINANCIAL CONDITION
Economic Profile
The University of San Diego (USD) monitors the health of the San Diego economy through its Index of
Leading Economic Indicators. The USD index tracks six variables to evaluate growth trends in the San
Diego economy: unemployment filings, help wanted advertising, local stock prices, consumer confidence,
building permits and the strength of the national economy. The index shows a continued four-year upward
trend, as the Index has improved by almost 4.5 percent from June of last year.
Carlsbad’s economy is tied closely to that
of the San Diego region. General Fund
revenue estimates indicate that Carlsbad is
benefitting from an improving state and
local economic climate. The city’s largest
revenue sources, which are derived from
property tax, sales tax, and transient
occupancy tax (TOT), are expected to
improve in Fiscal Year 2013-14.
Revenues from sales tax and TOT are
highly sensitive to changes in economic
activity, unlike property tax revenues,
which tend to lag behind economic
growth and remain relatively stable over
time.Overall, General Fund revenues are
expected to increase by $3.7 million, or 3.2 percent in Fiscal Year 2013-14, as revenues from sales taxes
and transient occupancy taxes are projected to continue a strong growth trend.
Development related revenues have stagnated in the past year, as the city matures and growth declines.
From 1992 to 2008, commercial and industrial development in Carlsbad averaged approximately 1.1
million square feet per year. As opportunities for new development diminish, commercial and industrial
development is tapering off, falling to an average of approximately 245,000 square feet per year over the
next five fiscal years. Large industrial commercial developments in the next five years include Bressi
Ranch, Carlsbad Raceway and Palomar Forum, Dos Colinas Retirement Community, and the Floral Trade
Center. Commercial office space vacancy has witnessed a decline over the past two years, falling from
over 30 percent in the last quarter of 2009 to just over 20 percent in the first quarter of 2013. Industrial
vacancy fell to 12.4 percent from 15 percent, last year.
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200
300400
500
600
700800
900
2005 2006 2007 2008 2009 2010 2011 2012 2013Thousands Fiscal Year
Median SFR Home Prices
Housing prices in Carlsbad
are following national, state
and regional trends. Data on
single family residence (SFR)
sales from DataQuick indicate
that the median sales price
increased to approximately
$655,000 in the first quarter
of 2013, an increase of over
13 percent compared to the
same quarter in 2012.
According to Movoto,
inventory of units for sale
have dropped in Carlsbad,
from 428 units in April 2012
to 255 units for sale, this
April. The total assessed values in the city are close to $24 billion, a decrease of less than one-tenth of a
percentage point compared to the prior fiscal year (Fiscal Year 2011-12). According to recent growth
projections prepared for the city, Carlsbad will add 683 residential units over the next five fiscal years.
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. A new Lowe’s also opened in the fall of
2013.
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 Park Hyatt
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 Hilton Oceanfront Resort & Spa and the Legoland California
Resort.
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, 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.
Overall, for Fiscal Year 2013-14, General Fund revenue is projected to increase by 3.2 percent from the
previous year’s estimates. Most major sources of tax revenue are expected to increase slightly in Fiscal
Year 2013-14, including property tax (1.5 percent increase), following several years of stagnant growth.
Sales tax is expected to increase by 4 percent and TOT revenues are projected to increase by 6.2 percent as
average daily rates (ADR) increase and additional rooms are placed in the inventory, including the new
Legoland Hotel. Home values are showing substantial appreciation, which is expected to improve assessed
values in the coming years. Development related revenue items are forecast to increase modestly in Fiscal
Year 2013-14, due primarily to an increase in commercial and industrial activity, as compared to the
previous fiscal year.
State of California – In January, Governor Jerry Brown submitted a balanced budget to the
California legislature. The passage of Proposition 30, which temporarily increases income
tax rates and sales tax rates, increased revenue projections and, coupled with budget cuts
made in past years, allowed the governor to claim a fiscal balance for the first time in over a
decade.
The proposed budget aims to maintain a $1 billion reserve and to pay down budgetary debt from prior
years, earmarking $4.2 billion of the budget for this purpose. However, this accumulated debt is projected
at $27.8 billion at the end of Fiscal Year 2012-13. The state also will have to address looming deficits in
state employee health and pension plans, currently over $100 billion in the red and another $100 billion
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deficit in the state’s Unemployment Insurance Fund. The governor’s budget identifies prospective risks
that could adversely affect the budget, including precarious economic conditions at the state and national
level, the threat that the federal government could shift costs to states in order to address federal deficits,
and rising health care costs that continue to plague the state budget. The proposed budget focused spending
on K-12 and higher education and to an expansion of Medi-Cal as the state implements federal health care
reform.
In an effort to address growing pension costs, the California legislature enacted Assembly Bill 340 during
this fiscal year. This legislation strives to reduce pension costs by addressing future and current employee
plans, statewide. The bill reduced pension benefit formulas for new employees; for example, the new
formula for miscellaneous employees is 2 percent at 62 years of age. Another cost reducing measure was a
cap on the amount of compensation that can be used to calculate pension benefits for employees. Under the
new legislation, employees can no longer purchase “airtime” (service credit for years the employee was not
with the pension system) and limited post-retirement employment of public employees.
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 this 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 city annually calculates the amounts needed to
pay for the various projects as well as the anticipated operating budget impacts from those projects. In this
way, the city can anticipate the effects of development from both a capital and an operating perspective.
In order to ensure that the city has the funds to replace these facilities as they age, an Infrastructure
Replacement Fund was created. With this fund, the city sets aside money on an annual basis for major
maintenance and replacement of its infrastructure. Much of the city’s infrastructure is relatively new; thus,
the city is just now beginning to experience the impact of major maintenance requirements. By setting
aside funds now, the citizens of Carlsbad can be assured that the proper maintenance and replacement, as
needed, will be performed on streets, parks, and the many facilities for which the city is responsible. For
Fiscal Year 2013-14, the City Council approved allocating 6.5 percent of General Fund revenues, or $7.8
million, to the Infrastructure Replacement Fund.
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, which was revised in Fiscal Year 2010-
11. The General Fund Reserve Policy sets a minimum reserve of 30 percent of the General Fund
expenditures and also establishes a target reserve of between 40 percent to 50 percent. This reserve can be
used by the City Council for emergencies or one-time purposes.
In addition to these steps, the city also prepares a ten-year financial forecast for the General Fund each
year, in order to understand the fiscal impact of actions taken today on the city’s future. The current
forecast assumes limited growth in residential and commercial development over the next decade and
captures the expected revenue impacts from major projects that are expected to be completed during the
forecast period. The operating costs of new city facilities supported by the General Fund, such as Alga
Norte Park, are also captured in the ten-year forecast. The forecast also assumes that the Carlsbad
Crossings Golf Course will require an ongoing subsidy from the General Fund and, while this subsidy is
expected to decrease over time, it is no longer treated as a loan.
Economic conditions at the national, state, and local level are expected to continue improving at a modest
rate and to provide a boost to most of our major sources of revenue. Home sales, which have been
slumping for several years, are starting to increase substantially and will begin to provide a boost to the
city’s property tax revenues in the following years. Overall, the outlook for General Fund revenues has
improved, since the last year, and revenues are expected to exceed ongoing operating costs, as depicted on
the following graph:
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The forecast assumes that General Fund revenues will increase by a little over three percent in Fiscal Year
2013-14, as improving economic conditions buoy revenues from the property taxes, sales taxes and TOT.
To project the expenditures, all known changes in personnel and maintenance and operations costs are
accounted for. However, the effects of future negotiations with employee bargaining units are not
contemplated in the current ten-year forecast. The city is currently undertaking an evaluation of services in
order to pursue a managed competition process, known as Best Value Services. The financial impact of a
change in service delivery is also not considered in the ten-year forecast.
The forecast assumes that the city’s cost for employee health care will increase by five percent, annually,
over the life of the forecast. Pension benefits continue to be a major driver of overall personnel costs for
the city. CalPERS, the pension plan which funds city employee pensions, has recently decided to
substantially increase required annual pension contributions from participating agencies in order to fully
fund outstanding pension obligations within 30 years; this decision will have a substantial effect on
personnel costs for the city and is not contemplated in the current ten-year forecast. In order to address the
underfunded status of pensions, the City Council has set aside $3.2 million to mitigate these increasing
costs and the forecast assumes that another $2 million is set aside in the Fiscal Year 2013-14 budget. The
forecast further assumes that no new positions are authorized, except those that may be related to the
operating costs of new city facilities supported by the General Fund. Negotiated salary step increases and
cost of living increases are included in personnel costs, in order to provide a conservative estimate of future
costs. The contribution from the General Fund to the Infrastructure Replacement Fund is forecasted to
remain at 6.5 percent of General Fund revenues. Finally, the forecast includes estimated operating costs for
all capital projects in the timeframes shown in the Capital Improvement Program (CIP).
As indicated in the above graph, the General Fund is balanced for Fiscal Year 2013-14 and revenues
exceed expenses over the life of the forecast. Although the revenue forecast is optimistic, Carlsbad is still
exposed to a fragile and slowly recovering economy, which could rapidly deteriorate and adversely affect
local revenues. The forecast also does not contemplate the effects of future budget decisions by the state
and CalPERS, which is expected to address actuarial assumptions relating to mortality rates and investment
returns in the coming years. Despite these threats, responsible fiduciary stewardship and planning have
placed the city in a position to benefit from even modest improvements in the economic environment.
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2012-132013-142014-152015-162016-172017-182018-192019-202020-212021-222022-23$ MillionsFiscal Year
General Fund Revenues and Expenditures
REVENUES
TOTAL EXPENDITURES
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Cash Management
The City Treasurer, an elected official, is charged with the design of an effective cash management and
investment program consistent with legal requirements and the city’s Investment Policy. The city annually
adopts a comprehensive investment policy specifying investment objectives, such as 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, 2013 was 2.136. The average return
realized on the pooled investments declined from 1.65 percent in Fiscal Year 2011-12 to 1.144 percent for
Fiscal Year 2012-13, and it is expected to further decline this fiscal year.
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 an unrealized loss of 0.36
percent for Fiscal Year 2012-13.
According to the City Treasurer, “Should
interest rates retrace to recently
experienced historical lows, an additional
unrealized loss would be anticipated. If
however, interest rates continue at current
levels, the unrealized losses will narrow as
existing positions mature or are called.
When interest rates begin to rise, a portion
of the portfolio will benefit as a result of
its short duration. Reinvestment of
maturing positions and new investments
will begin to capture and reflect new
money rates over time.”
Major Initiatives and Projects
In the city’s Fiscal Year 2013-14 Capital Budget, several significant projects are in design or under
construction over the next few years. Some of the notable capital projects include the following:
Park Development Projects
Alga Norte Community Park and Aquatic Center – Completion of this park, located on 32 acres in the
Southeast Quadrant along Poinsettia Lane between El Camino Real and Alicante Road is expected towards
the end of Calendar Year 2013.
Amenities include:
x A 50 meter Olympic sized competition pool with viewing bleachers
x A 25 meter, 12 lane swim instruction pool
x A 10 by 25 foot therapeutic pool with jets
x A 22 foot diameter 6 inch deep kids pool
x A “spray-ground” play area for young children
x Three lighted softball/baseball fields
x One lighted full basketball court and one half court
x Batting cages and a concession stand at the ball fields
x Picnic areas with barbecues
x Playground with 100 percent universally accessible play equipment
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x An off-leash dog park divided into areas for larger and smaller dogs, including obstacle course-
type play equipment
x A 18,500-square-foot lighted skate park that will include a "street course" section, an area with
challenging elements for more skilled skateboarders and a beginners’ area
Leo Carrillo Phase III – Phase III includes the renovation of additional buildings, construction of additional
restrooms and an arboretum area. The total cost of the remainder of Phase III is approximately $1.9 million
and design is expected to begin in FY 2016-17.
Civic Facilities
Civic facilities include a variety of facilities from
which the city can offer its services to the public.
Fire Station No. 3 Relocation – Fire Station No. 3 is
currently located at the corner of Chestnut and
Catalina. As the city grows eastward, relocation of this
station is needed to help ensure a six minute response
time. The land was previously acquired in the
Robertson Ranch site, and the remaining construction
cost is estimated at $9.4 million.
Library Renovation Projects – Significant renovation
projects are planned at the Dove and the Cole libraries. Improvements are designed to accommodate
current staffing needs, meet patron demands for modern library services and allow for better wireless and
communications services for the public. The estimated renovation cost for both libraries is $3 million.
Facilities Maintenance – As the city facilities begin to age, maintenance and repair projects are needed to
keep them in good condition. Twelve projects have currently been identified at a total cost of about $8.3
million. Included are major refurbishment projects at the Cole and Dove libraries which will be
constructed in conjunction with the renovation projects mentioned above, as well as synthetic turf
replacement at Poinsettia Park soccer fields.
Village and Barrio Area Projects – There are seven new projects proposed this next year for making
improvements to the downtown Village Area and Barrio neighborhoods. The projects include bike and
pedestrian way finding signage and traffic circles, decorative lighting, parking way finding, safety lighting,
and streetscape improvements.
Street and Circulation Projects
Livable Streets continues to be a top Council priority. To help improve the flow of traffic throughout
Carlsbad and to keep the city’s street and pedestrian ways in top condition, there are a number of projects
planned in the next five years. Some of the larger projects are listed below:
Traffic Signal Program – In keeping with the City Council’s goal of improving
traffic flow, the Fiscal Year 2013-14 CIP includes the continuation of the
Traffic Signal Program project. This project will upgrade traffic signal
hardware and software in conjunction with the creation of a communications
network that will be used to manage traffic signal operations and thereby
improve the flow of traffic.
Another area of focus is a concept called “complete streets” which uses street
design to create a sense of place and community through green spaces, medians
and signage, while encouraging a healthier, less vehicle dependent lifestyle.
The City Council identified complete streets as a top priority. One project which
incorporates these concepts could begin this fall with construction of a traffic circle “roundabout” along the
northern end of Carlsbad Boulevard next to Buena Vista Lagoon, making it easier for vehicles, pedestrians
and bicyclists to move through the intersection.
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ADA Improvements – ADA projects throughout the city are scheduled for $1.3 million in funding over the
next five years. The project includes various accessibility improvements, including sidewalk curb ramps
and pedestrian signals.
Avenida Encinas Widening – Widening to full secondary arterial standards along Avenida Encinas from
Palomar Airport Road to just south of Embarcadero Lane is scheduled for design in Fiscal Year 2014-15.
The CIP includes $5.2 million to fund this project in the next five years.
Carlsbad Boulevard Bridge Concrete Barriers – Installation of a concrete barriers on the existing bridges
located on Carlsbad Boulevard are planned at a total cost of about $2.3 million, primarily funded through a
federal grant. The bridges are located north of Cannon Road over the power plant outlet channel, and over
the railroad tracks south of State Street.
El Camino Real Widening – There are a number of projects that are scheduled over the next five years that
will focus on the widening of El Camino Real to prime arterial roadway standards, in addition to other
improvements. The projects include widening from Cassia Road to Camino Vida Roble, Arenal Road to
La Costa Avenue, Lisa Street to Crestview Drive and Tamarack to Chestnut. In the next five years, $5.9
million in additional funding is included for these projects.
Pavement Management – Carlsbad’s local streets are maintained on a regular cycle to ensure a good riding
surface and to extend the life of the streets. Part of the maintenance program is the sealing and overlay of
the existing street surface. In addition, any problem areas are addressed as they are identified. The Fiscal
Year 2013-14 CIP has $18.5 million budgeted in the next five years for this program.
Parking Lot Maintenance Program – Parking lot maintenance is a new program scheduled to begin in Fiscal
Year 2013-14 at a total cost of $1.5 million in the next five years.
Water and Wastewater Projects
The city’s water and wastewater projects are vital to the continued health and welfare of its citizens. Most
new lines are built and paid for by developers. As the city ages, it will become necessary to repair and
replace the lines that already exist, and an increase in these projects is anticipated in future years. In the
next five years, an additional $105.4 million in funding is scheduled for both new and replacement water
and sewer projects.
Vista/Carlsbad Interceptor & Agua Hedionda Lift Station Replacement – This project consists of a set of
individual projects that will ultimately construct a parallel sewer interceptor system to accommodate
existing and future sewer flows from the cities of Vista and Carlsbad. The individual projects include a
main in Jefferson Street, replacement of the Agua Hedionda Lift Station, and a main from the lift station to
the Encina Wastewater Facility. The overall total cost estimate for this set of projects totals $56.2 million,
of which an estimated $17.5 million is to be funded by the City of Carlsbad, with the remaining $38.7
million to be funded by the City of Vista.
Wastewater
Other major wastewater facilities scheduled for construction or replacement within the next five years
include:
x Buena Interceptor Sewer Improvements
x Faraday/El Camino Real Sewer Replacement
x Foxes Landing Lift Station and Forcemain
x Las Palmas Trunk Sewer
x Poinsettia Lane Lift Station Emergency Overflow Basin
x Quarry Creek Sewer Extension
x Terra Mar Sewer Replacement
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Water Lines
Major water facilities scheduled for construction or replacement within the next five years include the
following locations:
x Aviara Parkway and Plum Tree
x Carlsbad Boulevard – South of Avenida Encinas
x College Boulevard – Cannon Road to Badger Lane
x Desalinated Seawater Transmission Main
x Fire Flow System Improvements
x Hydroelectric Generator at Palomar Airport Road
x La Costa High Reservoir Inlet Pipeline
x Maerkle Reservoir Floating Cover Replacement
x Tri-agencies Water Transmission Pipeline Replacements
Recycled Water Expansion
Expansion to the Carlsbad Water Recycling Facility, including construction of additional pipelines and a
reservoir, are anticipated to cost $29.4 million over the next five years.
Drainage Projects
The city’s drainage infrastructure plays an important role in handling storm water runoff flows, as well as
maintaining the water quality of the city’s creeks, lagoons and ocean. Carlsbad supports programs that will
ensure that all water bodies within the city are safe and clean and, where possible, open to the public at all
times. The system consists of drainage pipes 30-inches or larger in diameter, large concrete and rock lined
channels, permanent sedimentation basins and miscellaneous large facilities. As the city continues to age,
it will become necessary to repair and replace the lines that already exist. An increase in these projects is
anticipated in future years.
Northwest Quadrant and Park Drive Drainage Improvements – The next five years include continued
improvements to drainage systems in the older parts of Carlsbad, particularly the northwest quadrant, with
an additional $3.6 million programed.
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, 2012. This was the
fifteenth 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. The city strives to develop a
Comprehensive Annual Financial Report which will continue to meet the Certificate of Achievement
Program’s requirements, and this report will be submitted to GFOA to determine its eligibility for another
certificate.
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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 Executive Management Team for their leadership and unfailing support in
maintaining the highest standards of professionalism in the management of the City of Carlsbad’s finances.
Respectfully submitted,
Chuck McBride
Administrative Services Director
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ArtsCommissionHistoricPreservationCommissionLibrary BoardofTrusteesParks & RecCommissionSeniorCommissionBeachPreservationCommitteeHousingCommissionTraffic SafetyCommissionPlanningCommissionCarlsbad TourismB.I.D. AdvisoryBoardELECTORATECity ManagerCity TreasurerMayor & CouncilCity ClerkCity Attorney3/12/2013KEYElectedCouncil AppointedCity of CarlsbadOrganization ChartFire DepartmentAdministrative Services Department Police DepartmentAssistant City ManagerPublic WorksDepartmentFinanceHuman ResourcesInformation TechnologyRecords ManagementLibrary & Cultural Arts DepartmentCommunity & Economic Development DepartmentParks & Recreation DepartmentHousing & Neighborhood ServicesTransportationUtilitiesProperty & Environmental ManagementCarlsbad Golf Lodging B.I.D. Advisory Board17
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Financial Section Financial Section
Financial SectionFinancial Section
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Management’s Discussion and Analysis
Management of the City of Carlsbad (“city”) provides readers this overview and analysis of the financial activities
of the city for the fiscal year ended June 30, 2013. The 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. The information presented here should be
considered in conjunction with the additional information furnished in the letter of transmittal.
Overview of the Financial Statements
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 providing 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 greater detail. 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, included is a section
with combining fund statements that provides financial information about the 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 content
of each of the statements.
Management’s
Discussion
and
Analysis
Basic
Financial
Statements
Required
Supplementary
Information
Required Components of the City of Carlsbad’s
Annual Financial Report
Notes
to the
Financial
Statements
Government-
wide Financial
Statements
Fund
Financial
Statements
Summary Detail
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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 Position 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 position and how it has changed. Net position
– the difference between the city’s assets and liabilities – is one way to measure the city’s financial health, or
position. Over time, increases or decreases in the city’s net position 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 internal services 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 cost of certain services it provides.
The city’s water, wastewater, solid waste and municipal golf course operations 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 future 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
three governmental fund types being used by the city: the General Fund, special revenue 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.
Enterprise funds are used to report activities that provide business-type services, generally to external
customers – such as water, wastewater, solid waste and golf services. In both the Government-wide
Financial Statements and the Fund Financial Statements, these funds are shown under business-type
activities.
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Internal service funds are used to report activities that provide services and supplies for the city’s other
programs and activities – such as fleet, workers’ compensation, and information technology.
• Fiduciary funds – These funds are used to account for situations where the city’s role is purely custodial, such
as the receipt, temporary investment, and remittance of fiduciary resources to individuals, private
organizations, or other governments. All of the city’s fiduciary activities are reported in a separate Statement
of Fiduciary Net Position. These activities are excluded 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 Position
The city’s combined net position as of June 30, 2013, as shown below, was $1.74 billion. The city’s net position
increased by $4.2 million during the current fiscal year. This increase was derived in large part to a significant
increase in current and other assets, a direct result of revenues exceeding expenditures by over $4 million for the
year. The decrease in capital assets was the result of current year depreciation expenses exceeding the addition of
new capital assets. The decrease in long-term debt outstanding was generated from the annual debt service
requirements being met on the city’s outstanding debt. Other liabilities increased due to the reassessment of
outstanding workers’ compensation claims payable (a more conservative estimate was used during the fiscal year)
and accounts payable invoices outstanding at year-end related to the construction of the new Alga Norte Park.
As noted earlier, over time net position may serve as a useful indicator of the city’s financial position. For the City
of Carlsbad, assets currently exceed liabilities by $1.74 billion at the close of the most recent fiscal year.
A large portion of the city’s net position (63 percent) reflects its net investment in capital assets (i.e., land, buildings,
machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding.
The city uses these capital assets to provide services to citizens; consequently, these assets are not available for
future spending. Although the city’s investment in its capital assets is reported net of related debt, it should be noted
that the resources needed to repay this debt must be provided from other sources since the capital assets themselves
would not be used to pay for these liabilities.
An additional portion of the city’s net position (16 percent) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position ($375.1 million) may be
used to meet the government’s ongoing obligations to citizens and creditors.
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Just over 54 percent of the $319 million in unrestricted governmental activities net position is attributable to the
General Fund. The net investment in capital assets for the city decreased by $2.6 million during Fiscal Year 2012-
13 due primarily to an increase in depreciation expense in the water and wastewater funds from the recent
acquisition over the past couple of years of several major capital assets. This increase in depreciation expense
exceeded the addition of new capital assets for the fiscal year, thereby reducing the net investment in capital assets.
A portion of business-type net position represents the city’s municipal golf course. At the end of Fiscal Year 2012-
13, there is a large deficit in unrestricted net position 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 and partially subsidizing the
operations of the course in prior fiscal years.
Changes in Net Position
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The condensed summary of activities shows that net position increased by $4.2 million during the year. This
increase occurs when spending is less than the revenues received. There were several reasons for the increase in net
position: an emphasis on efficiencies resulting in a reduction in expenses/expenditures; a citywide restructuring
initiative that either eliminated or unfunded 10.75 positions; $19.8 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.
Approximately 67 percent of the
revenues of the city’s governmental
funds are generated through taxes
collected (property, sales, transient
occupancy, etc.), and just over 91
percent 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 continuous recovery from the
great recession has resulted in
increases in the city’s leading
revenues: sales taxes and transient
occupancy taxes. Property taxes
tend to be a lagging revenue
source, meaning they don’t
rebound as quickly as the leading
revenues. However, the city did
receive some one-time property tax
revenue from the dissolving of the
former Redevelopment Agency,
completely offsetting the reduction
in ongoing property tax revenues. The Federal Reserve, in an effort to stimulate the economy, continues to lower
interest rates to historic lows, affecting the city’s income from property and investments. Development throughout
the city continues to increase from prior years, resulting in increased developer impact fees (capital contributions),
developer contributed assets (capital contributions) and permitted activity (charges for services). Some additional
one-time revenues were received during the year including reimbursement of prior year administrative fees collected
by the county from the implementation by the state of the “Triple Flip” sales tax and the VLF-in-lieu programs
(charges for services) and reimbursement received for the street lighting retrofit program (charges for services).
Another factor affecting charges for services was water and wastewater rate increases that went into effect in
January 2013. The extraordinary gain in the prior year was due to the dissolving the city’s former Redevelopment
Agency.
The total cost of all programs and services was just over $225.4 million in Fiscal Year 2012-13. This was a $29.9
million, or 15.3 percent, increase over Fiscal Year 2011-12 costs. The increase in governmental activity expenses
(general government in particular) was driven by using the remaining cash balance in the Poinsettia Lane Capital
Project Fund to call outstanding bonds and from returning unused TransNet funds back to the appropriate agency.
Public Works expenses reflect the expensing of a couple of projects that were previously accounted for in
construction in progress. Higher community development expenses reflect the transfer of an outstanding affordable
housing construction loan due to the city to the city’s Successor Agency due to a finding made by the California
Department of Finance. Higher purchased water costs and implementation costs related to the automated meter
reading program in the Water Fund, and higher wastewater depreciation expenses created the increase for the year in
business-type activities.
• General Government (10 percent)
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This segment of the city is divided
into three major groups: the Policy
and Leadership group, the Internal
Services group and non-
departmental charges. The Policy
and Leadership group encompasses
all elected officials, the chief
executive offices for the city, the
Communications team and Records
Management. The Internal Services
group includes Finance, Human
Resources, Information Technology,
Risk Management, and Property and
Environmental Management. Also
included in General Government are
any Council directed special
projects.
• Public Safety (22 percent)
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 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 and Economic Development (10 percent)
The mission of Community and Economic Development is helping people build a strong community by
guiding and facilitating high quality projects, preserving the environment, providing for, and maintaining a
strong economic base and strengthening neighborhoods through partnerships and collaboration to improve or
enhance the quality of life and sense of community within Carlsbad. Community Development encompasses
Land Use Planning, Economic Development, the Hiring Center, Housing and Neighborhood Services, and
Building Inspection.
• Community Services (11 percent)
Community Services consists of the Libraries, Cultural Arts, Parks and Recreation, and Senior Citizen
programs. These programs are provided to a wide range of people, and enhance their education and cultural
development.
• Public Works (16 percent)
Public Works is responsible for building and maintaining all of the infrastructure assets of the city. This
service area includes Transportation, Storm Drains, Medians, Street Trees, the Buena Vista Channel, Street
Lighting, and Traffic Sign and Signal Maintenance programs.
• Golf Course (5 percent)
The City of Carlsbad opened a municipal golf course in the summer of 2007, which further enhances the tourist
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.
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• Solid Waste (1 percent)
The Solid Waste Division of the Utilities Department administers and monitors the solid waste contract and the
Palomar Transfer Station agreement, and is responsible for the waste reduction and recycling components of the
Source Reduction and Recycling Element and Household Hazardous Waste Element to comply with state
mandated AB939 and SB1016 diversion and disposal requirements.
• Water Operations (19 percent)
The Carlsbad Municipal Water District, a subsidiary of the City of Carlsbad, provides potable and recycled
water service to approximately 85 percent of the city (approximately 29,000 customers). The District
purchases 100 percent 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 percent)
The City of Carlsbad operates and maintains a sanitary wastewater collection system, which covers
approximately 65 percent of the geographic area of the city. Wastewater is treated by the Encina Wastewater
Treatment Plant, a facility jointly owned by the cities of Carlsbad, Vista and Encinitas; the Leucadia
Wastewater District; the Vallecitos Water District; and the Buena Sanitation District.
The following sections will provide information about the operations of the governmental and business-type
activities separately.
Governmental Activities
The decrease in net position for governmental activities was $0.2 million. This decrease was generated by total
revenues of governmental activities of $157.2 million ($48.5 million in program revenues and $108.7 million in
general revenues) offset by $156.7 million in total costs of governmental activities and $700,000 in transfers to the
Golf Course and Solid Waste funds.
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).
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 ($17.6 million), grants and contributions
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from other governments and organizations which subsidize certain programs ($30.9 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 $108.7 million.
The majority of Public Works revenues are used to acquire and build capital assets (versus covering operating
expenses). In addition, the donation of capital assets from developers 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 has entered into a new stage of its lifecycle, from a developing or growing stage to a mature
stage. As the city continues to mature and approach build-out, there will be fewer master planned projects being
developed. In past years, these projects constructed new facilities, roads, parks, and other city-owned infrastructure.
The city is shifting its focus towards maintenance of existing facilities, and will use funding sources such as the
Infrastructure Replacement Fund to maintain and replace these assets. However, there are still some master planned
communities that were recently completed or are near completion (La Costa Oaks and Robertson Ranch); the
developers of these communities recently dedicated infrastructure to the city, a requirement for development.
Business-Type Activities
Program revenues for the city’s business-type activities totaled $68.9 million for the year, while program expenses
equaled $68.7 million.
Water 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; the combined amount of these
contributions was just under of $1.9 million. Additionally, a $1.6 million reimbursement from the prior Marbella
lawsuit was another large factor contributing to the operating gain. Capital construction expenses are spread over the
life of an asset as annual depreciation charges (program expenses).
The city’s golf course enterprise was in its sixth full year of operation. Golf course revenues were sufficient to fund
normal golf course operating expenses. However, golf course operating expenses also included interest on the
advance from the General Fund, principal and interest related to the golf course bonds issued for the construction of
the course, and depreciation related to the new golf course assets, resulting in a net loss of $4.3 million.
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), the implementation of Government
Accounting Standards Board (GASB) No. 54 resulted in the Community Activity Grants Fund being combined with
the General Fund for financial statement presentation.
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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, unassigned
fund balances may serve as a useful
measure of a government’s net resources
available for spending at the end of the
fiscal year.
The city implemented GASB 54 in Fiscal
Year 2010-11, which created five fund
balance classifications instead of the
three shown previously. These fund
balance classifications: nonspendable,
restricted, committed, assigned and unassigned, comprise a hierarchy based primarily on the extent to which a
government is bound to observe constraints imposed upon the use of the resources reported in governmental funds.
Detail of the fund balances by classification is shown in note 11 of the financial statements.
As of the end of the current fiscal year, the city’s governmental funds reported combined ending fund balances of
$505.7 million, up
$500,000 from the year
before. Approximately 12
percent of this ($58.1
million) constitutes
nonspendable fund
balances, mostly
comprised of advances and
loans to other funds.
Restricted fund balances
can only be spent for a
specific purpose stipulated
by law and make up about
45 percent ($228.9
million). Assigned fund
balances are intended to be
used by the city for
specific purposes but do
not meet the criteria to be
classified as restricted or
committed. These make
up 29 percent ($148.1
million) of the city’s fund
balance. Approximately
14 percent ($69.6 million)
of the fund balance is
unassigned, which is
available for spending at
the city council’s
discretion.
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
$154.5 million, an increase of $12.1 million. The unassigned fund balance portion of the General Fund was
$69.6 million.
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The increase in revenues was primarily due to the increases in the leading tax revenues, sales tax and transient
occupancy taxes. As the economy continues to show signs of improvement, these revenues rose which resulted in
the majority of the increases in the General Fund. The city did receive some one-time property tax revenues, the
result of the State of California dissolving the city’s former redevelopment areas. In addition, the city received a
large refund of prior year administrative fees collected by the county from the implementation by the state of the
“Triple Flip” sales tax and the Vehicle License Fee (VLF)-in-lieu programs (miscellaneous revenues). Decreases
were realized in ongoing property taxes, which are lagging revenues, and in the yield on the Treasurer’s portfolio
(decreased income from property and investments).
In the city’s 2012-13 Fiscal Year budget, maintenance and operations budgets were kept relatively flat for all
departments, unless increases were required for new facilities. A total of 10.75 full-time positions were eliminated
and 1.0 full-time, limited term position was created. These reductions were partially offset by anticipated increases
in health, retirement and previously negotiated salary and benefit increases. Additional costs associated with the
opening of the City of Carlsbad’s Safety Training Center and a $1.8 million transfer from the General Fund to the
city’s Self Insured Benefits Fund to assist with anticipated future pension rate increases were also incorporated into
the Fiscal Year 2012-13 budget. Overall, the General Fund budget increased by $3.3 million for the 2012-13 Fiscal
Year. The majority of this increase ($2.9 million) was due to an increase in budgeted transfers out from the General
Fund to other city funds for infrastructure replacement, PERS stabilization, and median and street tree maintenance.
The General Capital Construction (GCC) Fund had just under $8.8 million in capital expenditures during the fiscal
year, which was predominantly for the construction of Alga Norte Park, the Safety Training Facility, and the traffic
signal program. These costs led to a reduction in the GCC fund balance of just over $8.6 million.
Due to the construction of the new Alga Norte Park, the Public Facilities Construction Fund (PFF) saw its fund
balance decrease by just under $9.7 million.
The reduction in the fund balances of both the GCC and PFF funds was anticipated, as the city has been setting aside
money for several years for the construction of various projects within each of these funds. Historically, the city has
not issued debt to fund the construction of capital projects, and sets aside funds on an annual basis until sufficient
funds have been collected for the construction of the project. In addition, projects will not be constructed until
anticipated annual operating costs can be absorbed into the city’s budget without creating a deficit.
The two remaining major governmental funds, which are both 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 position
(cost recovery), financial position, and cash flows.
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The Carlsbad Municipal Water District (CMWD) funds had an operating gain of approximately $3.3 million for the
year. Operating revenues were $44.2 million and operating expenses were $40.9 million. The largest factor
resulting in the operating gain is the increase in water sales revenue due to increased rates. Impacted by the
continued annual increases in water rates (about 8 percent in January 2013), residents continued to conserve water
during the year. The drought, technically speaking, is over and most restrictions have been lifted. Consumers are
being advised, however, to continue to use water wisely and reduce where practical because water in general, is a
dwindling resource. The cost of purchased water from the Metropolitan Water District and the San Diego County
Water Authority (suppliers of the District’s potable water) continues to increase and, therefore, CMWD rates must
increase to cover the added cost. Another large factor contributing to the operating gain was a $1.6 million
reimbursement from the prior Marbella lawsuit. Non-operating revenues from investment earnings on the capital
replacement funds and property tax receipts added to the operating gain, resulting in income before transfers and
capital contributions of $6.1 million.
In the sixth year of operation, the Golf Course Fund had an operating loss of $3 million, primarily due to
depreciating the enterprise's assets ($3.3 million). The other factor contributing to this loss was a timing difference.
This timing difference resulted from changing the budgeting from a calendar year basis to a fiscal year basis. When
golf course operating revenues are not sufficient to cover golf course operating expenses, the General Fund will
make contributions in the form of lease payments to pay for the shortfall. Food and beverage sales at the golf course
restaurant (The Canyons) remain strong, and golf rounds and revenues are on the rise.
The Wastewater Funds had an annual operating loss of $1.1 million for the fiscal year. Total revenues from
operations increased $1.3 million from the previous year due to service charge rate increases and reimbursement
from the City of Vista for their share of a portion of the Vista-Carlsbad Wastewater Interceptor project. However,
operating expenses increased by $2.1 million from the previous fiscal year. Increases in depreciation expense, a
result of new sewer system infrastructure, and a decrease in capitalized assets, account for the increase in operating
expenses. Non-operating revenues of $126,000 helped to offset the operating loss, resulting in a net loss of $1
million before transfers and capital contributions.
Solid Waste Operations and Storm Water Programs are combined on the city’s financial reports, and showed a net
operating income of $238,000 for the year. Revenues were relatively flat when compared to the prior fiscal year and
expenses decreased about $75,000, primarily due to a reallocation of interdepartmental charges to better reflect the
enterprise’s share of those charges.
The unrestricted net position for the Water, Golf Course, Wastewater, and Solid Waste Operations at the end of the
year amounted to $55.7 million, or approximately 13.6 percent of the total enterprise fund net position. The
unrestricted net position may be used for rate stabilization, fluctuations in operating expenses, and unforeseen
repairs and maintenance. Approximately $46 million, or 11.3 percent, of the net position of all the proprietary funds
are restricted for the future capital construction of new and replacement water and wastewater infrastructure assets.
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Since the funding for the replacement of infrastructure assets is not restricted, it is reflected in the Statement of Net
Position as unrestricted. The city does, however, account for and monitor these amounts in separate funds to ensure
that water and wastewater assets can be replaced when needed. The large unrestricted net position deficit balance in
the Golf Course Fund represents funds advanced from the city’s General Fund that were used to fund construction,
former operating losses and debt expenses of the municipal golf course.
General Fund Budgetary Highlights for Fiscal Year 2013
Management monitors revenues during the year and updates estimated revenue figures when new information is
received by the city. General Fund revenue estimates were only modified slightly during the year as compared to
the originally budgeted estimates. Some of the factors that led to the $1.1 million increase in revenue estimates
included:
• Several new federal and state grants were applied for and received during the year.
• Increased transient occupancy tax (TOT) revenue received as a result a new hotel and an increase in tourism.
• One-time property tax revenue received as a result of the dissolution of the former redevelopment areas by the
State of California.
The slight increase from the total original expenditure budget to the final budget amounted to $348,000, due
primarily to the appropriations of the grant money received, sales tax audit expenses, and developer funded studies.
The difference between the final budgeted expenditures and the actual expenditures for the year (on a budgetary
basis) of $20.9 million can be generally summarized as follows:
• $19.8 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.
Accumulated savings set aside for future technology and innovation enhancements.
$19.8 million in “savings” are planned to be used for:
⇒ Professional consultant services for the desalination project
⇒ Fire and Police equipment replacement
⇒ Additional communication efforts for the new Alga Norte Park
⇒ Redesign of the city’s website
⇒ City Hall lobby and office remodeling
⇒ Council Chambers audio/visual updates
⇒ Lighting retrofits at several city parks
⇒ Synthetic turf replacement/installation at several park sites
⇒ Fuel island cover
⇒ City facility improvements
⇒ Hardware and software upgrades related to a new permitting system
⇒ City-owned real estate title, surveying and consulting services
⇒ Envision Carlsbad/zoning update
⇒ Innovation projects throughout the city
⇒ Conversion to a new integrated library system
⇒ Other one-time capital outlay items, as needed, throughout the city
• Contributing to the increase in the unassigned General Fund balance of $1.1 million.
For purposes of budgetary presentation, actual revenues have been adjusted to exclude unrealized gains and losses in
investments pursuant to GASB 31; actual expenditures have been adjusted to include remaining encumbrances.
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Capital Asset and Debt Administration
Capital Assets
At the end of Fiscal Year 2012-13, the city had recorded investments of just over $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.
Some of this year’s major capital asset additions included:
• The completion of several road segments:
o Rancho Santa Fe Road
o College Blvd./Cannon Road reach 3
• The Rancho Santa Fe Road bridge over San Marcos Creek
• Construction of the Joint First Responders Training Facility
• Lake Calavera Reservoir improvements
• North Agua Hedionda sewer interceptor
• Several waterline projects
• Several storm drain projects
In addition to carrying forward appropriations of $170.1 million for previously budgeted projects, the city’s Fiscal
Year 2013-14 capital budget appropriates an additional $44.7 million for capital projects. These additional
appropriations are principally for various improvements to the Village and Barrio areas of the city, the remodeling
and refurbishments at both the Cole and Dove Libraries, the pavement management program, the acquisition of open
space (Prop C projects), continuing work on the coastal rail trail, park and Senior Center improvements, facilities
maintenance projects, the replacement and upgrade of the Carlsbad Blvd. bridge, miscellaneous street projects,
enhancing the wastewater collection system, additional water and recycled water lines, the water reservoir
repair/replacement program, several drainage projects, improvements at the Encina water pollution control facility,
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
Wastewater 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.
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Long-Term Debt
At year-end, the city had $40.5 million in bonds, loans, capital leases and agreements, a decrease of $2.9 million
from last year, as shown in the table below. Payments made on all of the city’s outstanding debt created the
reduction in the city’s. More detail about the city’s long-term liabilities is presented in note 8 to the financial
statements.
Economic Factors and Next Year’s Budgets and Rates for Fiscal Year 2014
• The State of California adopted its Fiscal Year 2013-14 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 2013-14 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.
Through the passage of Proposition 30, additional sales tax and income tax revenues are expected to be
generated at the state level.
If state revenues fall short of projections there is a trigger to determine if cuts are necessary which could
impact local agencies.
Assembly Bill 340 was passed in an effort to address growing pension costs at both the state and local
levels.
• Net assessed values in the city stand at almost $23.9 billion, a 2.5 percent increase from the prior fiscal year
due to new construction and increasing home prices.
• Sales tax revenues are projected to continue to grow moderately with a 4 percent forecasted increase in the
Fiscal Year 2013-14 Budget due in part to the opening of the new Legoland Hotel and Palomar Commons
(Lowes) shopping center.
• Due to the opening of the new Legoland Hotel and projected higher room rates, transient occupancy taxes
(TOT) are expected to grow by 6.2 percent.
• PERS rates for the miscellaneous plan have increased for Fiscal Year 2013-14 from 23.1 percent to 24 percent,
and rates have also increased from 33.2 percent to 33.9 percent for the safety plan.
• The city will set aside an additional $2,000,000 to assist in the stabilization of future PERS rates.
• Median home prices in Carlsbad have increased by 13 percent from March 2012 ($580,000) to March 2013
($655,000).
• City departments were given maximum increases of 2 percent for maintenance and operational funding to
cover changes in the Consumer Price Index (CPI), minimal new capital outlay, and additional personnel
funding for only existing contractual obligations.
• The city eliminated 12 full-time positions and added 5.25 positions in the General Fund. The additional staff is
primarily for the operating of the new Alga Norte Park due to open in Fiscal Year 2013-14.
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• Through Memorandum of Understandings (MOU’s):
o The Carlsbad City Employees’ Association (CCEA) will now be part of a pay for performance
compensation program effective January 1, 2014.
o CCEA employees received a 3 percent raise in July 2013 and will receive a 3 percent raise and/or
stipend in January 2014.
o Management and Fire Management employees received an allocated share of a 3 percent
raise/stipend pool in September 2013 and will receive a $1,600 stipend in January 2014.
o Carlsbad Police Officers’ Association (CPOA) employees will receive a $2,400 stipend in October
2013 and a $2,700 stipend in January 2014.
• The Carlsbad Firefighters Association (CFA) and the Carlsbad Police Management Association (CPMA) are
currently in negotiations.
These factors were considered when preparing the City of Carlsbad’s General Fund budget for Fiscal Year 2013-14.
Budgeted expenditures are expected to increase 3.9 percent to $119.7 million. The total personnel budget for Fiscal
Year 2013-14 is $74.2 million, which is 1.3 percent more than the previous year’s personnel budget of $73.3
million. The total maintenance and operations (M&O) budget for Fiscal Year 2013-14 is $31.6 million, which is 2.7
percent higher than the previous year’s budget of $30.7 million. The increase in personnel and M&O budgets is due
primarily to the opening of the new Alga Norte Park and CPI adjustments given to the various operating
departments. Operating transfers out of the General Fund are budgeted at $13.8 million, a $2.8 million increase
from the prior fiscal year. This increase is due to the city budgeting an additional $200,000 transfer to the city’s
Self-Insured Benefits Fund as a set aside to address anticipated future pension rate increases from CalPERS, a $1.5
million transfer to the city’s General Capital Construction Fund to pay for seven new village and barrio
revitalization projects, a $750,000 additional transfer to the city’s General Liability Fund for increases to settlements
and estimated claims payable, and an additional $300,000 transfer to the city’s Infrastructure Replacement Fund for
major maintenance and replacement of city infrastructure. Adding to the adopted budget of $119.7 million for the
General Fund, approximately $19.8 million in unspent Fiscal Year 2012-13 budgeted expenditures will be carried
over to Fiscal Year 2013-14, as well as $6.4 million in open encumbrances as of June 30, 2013.
As the city is approaching the buildout of its remaining vacant land, the city is ushering in a new era, focusing on
maintaining infrastructure rather than building it. In an effort to address this issue, the city has developed an
Infrastructure Replacement Fund (IRF). In this fund, the city sets aside money on an annual basis for major
maintenance and replacement of its infrastructure. In the Fiscal Year 2013-14 Operating Budget, the city has
budgeted a $7.8 million transfer from the General Fund to the IRF to meet future needs.
During the current fiscal year, the unassigned fund balance in the General Fund increased by $8.2 million to $69.6
million due to fiscal discipline, additional one-time revenues received from the dissolution of the former
redevelopment areas within the city, a strong tourism season (increased TOT revenues), higher than anticipated
development within the city (increased development related services revenue) and one-time revenue received from
actions taken by the California Supreme Court regarding administrative fees associated with the collection of the
“Triple Flip”. Based on Fiscal Year 2013-14 projections, the unassigned General Fund balance is expected to grow
approximately $1 million.
There appears to be sufficient revenue projected to build the projects listed in the Fiscal Year 2013-14 Capital
Improvement Program (CIP).
The city’s business-type activities reflect the following:
• The combined fixed and variable costs of water purchased from the San Diego County Water Authority are
projected to rise about 3.75 percent and 5 percent respectively in Fiscal Year 2013-14. In November 2013, a
public meeting will be held to determine how much water rates will increase effective January 1, 2014. The
proposed rate increases are needed to fund the additional cost of purchased water, and to maintain an adequate
reserve balance.
• Proposed wastewater rate increases will also be discussed during the public meeting to be held in November
2013. If approved, these rates would be effective January 1, 2014. This proposed rate increase is needed to
assist with higher depreciation expenses from the addition of completed facilities to the inventory, and to
maintain an adequate reserve balance.
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• The timing of the golf course budget changed this year from being brought forward on a calendar year basis in
December of each year to now aligning with the city’s fiscal year budget which is brought forward every June.
The Fiscal Year 2014 budget reflects a projected operating loss of over $998,000. The City Council has
authorized the General Fund to transfer the anticipated loss to the Golf Course Fund during the fiscal year.
• There are 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 Administrative Services Department,
1635 Faraday Avenue, Carlsbad, CA 92008, (760) 602-2430, or visit us online at www.carlsbadca.gov.
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June 30, 2013
Governmental Business-Type
ASSETS Activities Activities Total
Cash and investments 464,469,701 $ 157,711,216 $ 622,180,917 $
Receivables:
Taxes 7,151,820 16,051 7,167,871
Accounts, net of allowances 311,752 8,000,163 8,311,915
Other 1,050,281 43,408 1,093,689
Due from other governments 680,115 2,641,990 3,322,105
Inventories 245,841 1,276,861 1,522,702
Prepaid items 880,258 18,604 898,862
Land held for resale 454,000 - 454,000
Loan and reimbursement receivables, net of allowances 22,310,423 - 22,310,423
Due from Successor Agency 18,817,228 - 18,817,228
Deposits 25,000 - 25,000
Internal balances 55,463,119 (55,463,119) -
Subtotal 571,859,538 114,245,174 686,104,712
Capital assets:
Land 150,588,126 9,318,388 159,906,514
Construction in progress 47,333,665 7,560,463 54,894,128
Buildings and other structures 101,312,100 40,596,836 141,908,936
Improvements other than buildings 45,458,749 50,856,805 96,315,554
Machinery and equipment 28,298,901 2,793,263 31,092,164
Infrastructure 655,780,796 314,518,463 970,299,259
Wastewater treatment facility - 52,584,214 52,584,214
Intangible assets 3,186,520 -3,186,520
Less accumulated depreciation (249,299,808) (133,182,186) (382,481,994)
Total capital assets 782,659,049 345,046,246 1,127,705,295
Total assets 1,354,518,587 $459,291,420 $1,813,810,007 $
The notes to the financial statements are an integral part of this statement.
Primary Government
CITY OF CARLSBAD
Statement of Net Position
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June 30, 2013
Governmental Business-Type
LIABILITIES Activities Activities Total
Accrued liabilities 11,899,201 $ 2,316,578 $ 14,215,779 $
Accrued interest payable - 391,857 391,857
Due to other governments - 6,555,689 6,555,689
Estimated claims payable 7,878,007 - 7,878,007
Deposits payable 951,831 999,177 1,951,008
Unearned revenue 2,430,823 10,000 2,440,823
Noncurrent liabilities:
Due within one year, net of unamortized
discounts ($36,634) and unamortized
premiums ($9,895)159,052 2,691,821 2,850,873
Due in more than one year, net of unamortized
discounts ($30,909) and unamortized
premiums ($222,372)- 37,578,039 37,578,039
Total liabilities 23,318,914 50,543,161 73,862,075
NET POSITION
Net investment in capital assets 782,499,997 307,000,440 1,089,500,437
Restricted for:
Capital assets 182,685,135 45,989,562 228,674,697
Affordable housing 37,390,269 - 37,390,269
Habitat and agricultural mitigation management 2,664,405 - 2,664,405
Other purposes 6,642,478 - 6,642,478
Unrestricted 319,317,389 55,758,257 375,075,646
Total net position 1,331,199,673 $ 408,748,259 $ 1,739,947,932 $
The notes to the financial statements are an integral part of this statement.
Primary Government
CITY OF CARLSBAD
Statement of Net Position (Continued)
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CITY OF CARLSBAD
Notes to the Financial Statements
Note 8. Long-term Debt (continued)
The aggregate maturities of long-term debt are as follows:
Year ended June 30:Principal Interest Principal Interest
2014 159,052 $ 798 $ 2,718,560 $ 1,328,096 $
2015 - - 2,697,932 1,230,828
2016 - - 1,846,300 1,156,494
2017 - - 1,900,461 1,103,660
2018 - - 1,960,433 1,047,875
2019-2023 - - 10,791,495 4,331,842
2024-2028 - - 9,344,955 2,711,256
2029-2033 - - 4,430,000 1,511,550
2034-2037 - - 4,415,000 409,387
159,052 $ 798 $ 40,105,136 $ 14,830,988 $
Governmental Activities Business-Type Activities
Note 9. Rate Covenants and Pledged Revenue
Rate covenants
The 1997 Encina Financing Joint Powers Authority Installment Purchase Agreement requires that the Wastewater Fund set
its charges for services each year at rates sufficient to produce net revenues (after paying the operating and maintenance
expenses of the Fund, 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 (authority) Revenue Bonds 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 equal to or greater than amounts required 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 adequate 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 of the revenues of the Wastewater Fund, Water District, and the Golf Course Fund are pledged to meet these rate
covenants and to secure the related debt.
All rate covenants requirements were met for the fiscal year ended June 30, 2013.
Pledged revenue
The city and its component units have a number of debt issuances outstanding that are collateralized by the pledging of
certain revenues. The amount and term of the remainder of these commitments are indicated in the debt service to
maturity tables presented in the accompanying notes. The purpose for which the proceeds of the related debt issuances
were utilized are disclosed in the debt descriptions of the accompanying notes. For the current year, debt service payments
as a percentage of the pledged gross revenue (net of certain expenses where so required by the debt agreement) are
indicated in the table on the following page. These percentages also approximate the relationship of debt service to
pledged revenues for the remainder of the term of the commitment:
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Statistical Section
Statistical Section
Statistical SectionStatistical 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 128
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 139
These schedules contain information to help the reader assess the City’s most
significant local revenue source, property taxes.
Debt Capacity 144
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 154
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 158
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.
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