HomeMy WebLinkAbout; ; 2012-2013 OPERATING BUDGET AND CIP; 2012-07-012012-2013 Operating Budget &
Capital Improvement ProgramCALIFORNIA
CALIFORNIA
City of Carlsbad
2012-13 Operating Budget
and Capital Improvement Program
Mayor
Matt Hall
City Council
Ann Kulchin
Mark Packard
Keith Blackburn
Farrah Douglas
City Manager
Lisa Hildabrand
Assistant City Manager
John Coates
Deputy City Manager
Cynthia Haas
Prepared by the Finance Department
Finance Director
Chuck McBride
Website: www.carlsbadca.gov
READER’S GUIDE TO THE BUDGET
i
This budget document has been designed to provide the public concise and readable
information about the City of Carlsbad’s 2012-13 budget. The budget is separated into
three major sections: the Overview, the Operating budget, and the Capital Improvement
Program.
Overview
The beginning of the budget document contains the City Manager’s transmittal letter and
overview information. The overview information will provide summary data to the reader
for the Operating budget and the Capital Improvement Program, as well as information
on personnel allocations and debt management issues.
Operating Budget
The Operating budget section has seven tabbed sections. The first section provides a
summary of the operating budget and the remaining six sections provide detailed budget
information for six main functional areas. The summary section begins with a budget
overview, including revenue assumptions, information on the policies used to develop
the budget, and an overview of expenditures. The overview is followed by tables
providing detailed information on fund balances, revenues and expenditures. The
following six sections are separated by functional area, which are Policy and Leadership
Group, Internal Services, Community Development, Community Services, Public Safety,
and Public Works. Within these broad categories, the budget is organized on a
department, or program group, basis. Summaries, financial and descriptive, are included
for departments containing more than one program. The summary page is followed by
detailed information for each program. Some departments consist of one program only,
and thus only one page is included for them. For each summary and program, a
financial history and the 2012-13 budget figures are presented. If applicable, also
included are narrative statements describing program activities, associated workload
measures or performance objectives, key achievements for 2011-12 and key goals for
2012-13.
Capital Improvement Program
The Capital Improvement Program (CIP) is located in the back of the budget document.
An overview of the CIP provides general information about the process used in
preparing the budget for capital projects and describes how development information is
used to project future revenues that fund these projects. In addition, major CIP projects
are highlighted and discussed. The next section contains summary revenue and
expenditure tables by funding source and a detailed project expenditure schedule listing
the cost and timing of each future and current CIP project. Following this schedule are
fund summary pages, which list the revenues and detail expenditures by fund, thus
providing cash flow information and annual projected fund balances for each Capital
Improvement Program fund.
Appendices
The Appendices contain a detailed listing of the 2012-13 Planned Major Capital Outlay
items by department. An Out-of-State Travel Detail is presented next. The last section
of the Appendices provides information on the Gann Limit, budget process, accounting
system and budgetary control, the adopted Resolutions for the budget, and a glossary.
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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
2012
Strategic Goals
City Council continues to clarify and pursue the vision of
Carlsbad that reflects the pride and quality of life.
ABOUT THE CITY OF CARLSBAD
iii
The City of Carlsbad is a unique coastal community
located 35 miles north of the City of San Diego and
surrounded by mountains, lagoons, and the Pacific
Ocean. The city is governed by a five-member City
Council under the Council/Manager form of
government. Although the “village” dates back more
than 100 years, Carlsbad incorporated in 1952 as a
General Law city, and in 2008 became a Charter city.
Currently, the city is over two-thirds developed and is
expected to grow from a population of 107,674 to
117,000 once its 39 square miles are built out.
Industries in the area include a major regional
shopping center; a specialty outlet center; 34 hotels
offering over 3,800 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.
The city provides the full range of services normally associated with a municipality including
police, fire, parks and recreation, library, planning and zoning, building and engineering, various
maintenance services, and administration. The city provides water services through the
Carlsbad Municipal Water District, a subsidiary district of the city. The City Council serves as
the Board of Directors for the Carlsbad Municipal Water District. Solid waste collection is
provided through a franchise agreement with a local refuse collection service.
In addition to the usual city services, Carlsbad offers a wide variety of programs to help local
residents and businesses. The city’s Housing Authority administers federal housing assistance
to 610 low-income households in Carlsbad. Older Carlsbad residents receive assistance
through the city’s senior citizen programs.
School programs and facilities are provided by four different school districts located within the
city boundaries. The City Council has no direct control over these school districts; however, the
Council recognizes the importance of quality school facilities and programs to Carlsbad’s
residents. Thus, the Council and staff work with the school districts on a regular basis.
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S a n F r a n c i s c o
L o s A n g e l e s
S a n D i e g o
N e v a d a
O r e g o n
C a l i f o r n i a C a l i f o r n i a
P a c i f i c
O c e a n P a c i f i c O c e a n
A r i z o n a C a r l s b a d C a r l s b a d
Traffic SafetyCommissionUndergroundUtility AdvisoryCommitteeArtsCommissionHistoricPreservationCommissionLibrary BoardofTrusteesSerra CooperativeLibrary SystemAdvisory BoardParks & RecCommissionSeniorCommissionBeachPreservationCommitteeHousingCommissionHousing &RedevelopmentCommissionPlanningCommissionCarlsbad TourismB.I.D. AdvisoryBoardELECTORATECity ManagerCity TreasurerMayor & CouncilCity ClerkCity AttorneyAssistant City ManagerCommunity &Economic DevelopmentHousing & Neighborhood ServicesFirePoliceParks & RecreationLibrary & ArtsFinanceHuman ResourcesInformation TechnologyProperty & Environmental ManagementInternal ServicesPublic SafetyCommunity DevelopmentCommunity ServicesRevised Feb. 2011KEYElectedCouncil AppointedReporting RelationshipProgramsCity of CarlsbadOrganization ChartDeputy City ManagerTransportationUtilitiesPublic Worksiv
Overview
Overview
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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CITY OF CARLSBAD
BUDGET HIGHLIGHTS
FISCAL YEAR 2012-13
WHERE THE MONEY COMES FROM…
ESTIMATED REVENUES $241.3 MILLION
WHERE THE MONEY GOES…
ADOPTED BUDGET $231.6 MILLION
Taxes 43%
Inter-Departmental
8%
Licenses & Permits 1%
Charges for Services
4%
Income from
Investments &
Property 2%
Inter-Governmental
4% Other 2% Utility Charges 25%
Impact Fees/Special
Taxes 11%
Policy & Leadership
2% Internal Service 13%
Public Safety 20%
Capital Projects 12% Community Services
11%
Comm. Dev. 7%
Non Dept. & Contingency 6%
Utilities 24%
Public Works 5%
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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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
The city’s budget is comprised of two pieces; the Operating Budget and the Capital
Improvement Program Budget (CIP). The CIP provides the funds to build the parks, roads,
buildings, and other infrastructure of the city while the Operating Budget provides the money to
staff and operate the facilities and infrastructure as well as provide important services to the
citizens and visitors of Carlsbad. The operating budget totals $202.7 million and is expected to
generate $205.8 million in revenues. The CIP contains the current year budget allocation of
$28.9 million and outlines approximately 265 future projects at a total cost of $413.1 million.
Capital revenues for Fiscal Year 2012-13 are estimated at $35.5 million. The capital projects
include parks, civic facilities, as well as infrastructure needs anticipated for the future that are
not expected to be constructed by developers.
The budget overview on the following pages will provide the reader with a good
understanding of the budget process and the economic profile of the city as well
as with a broad overview of the services and projects planned for the 2012-13
Fiscal Year. This section also addresses debt management, including a schedule
of the outstanding bond issues. More detail on the city’s numerous programs and
projects can be found throughout the remainder of the document.
BUDGET PROCESS
At the beginning of each
year, the City Council
meets to develop goals
that help city staff
prioritize programs,
projects and services, as
well as the resources
required to fund them.
Based on this direction,
along with input received
at public workshops, city
staff finalizes the overall
city work plan and
develops the proposed
annual budget for the
coming fiscal year. The
City Council adopts the
formal budget for all
funds prior to the
beginning of each fiscal
year and may amend
those budgets throughout
the year as necessary.
The legal level of
budgetary control is at
the fund level and
budgetary control is
maintained through the
city’s accounting system.
Expenditures may not
exceed budgeted
amounts at the fund
level.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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This year, the Carlsbad City Council set strategic goals that will create jobs in a new economy
through the support of local companies and the attraction of new companies; create a
sustainable organization by being an adaptable, responsive and efficient organization that
delivers cost effective, high quality services and retains a motivated, flexible and responsive
staff; through the General Plan update, adapt city land use policies to address population and
demographic trends, maintain the city’s high standards and balance a thriving community with
the need for tranquil, natural open spaces; meet the community’s changing recreation needs,
including more for active seniors and young people, consider accelerating the schedule for
building new parks and community centers, and an expanded trails system and open space;
begin to adapt Carlsbad streets to accommodate and encourage all modes of transportation, not
just cars; and foster the next generation of community leaders.
Carlsbad’s operating budget is a tool that guides the achievement of Council’s vision, goals, and
priority projects for the city. The budget allocates resources to city programs in accordance with
priorities established by residents and the Council. Thus, it is an integral part of making
Carlsbad a wonderful community in which to live, work and play. In addition, the budget is
fiscally conservative and balanced, and provides a blueprint to effectively sustain the community
and essential city services far into the future.
ECONOMIC PROFILE
The US economy
continues to grow at a
lackluster pace.
Gross domestic
product (GDP), the
primary measure of
US output, increased
by 3 percent in the
final quarter of 2011
and, according to
initial estimates
released by the Bureau of Economic Analysis, fell to 2.2 percent in the first quarter of 2012.
The employment situation in the US appears to be improving, as new payroll jobs increased in
January and February by 227,000 and 284,000, respectively, bringing the unemployment rate
down to 8.3 percent in February. Although national unemployment is still high, this is the first
time this measure has dipped below 9 percent since 2008. The UCLA Anderson Forecast does
not expect marked improvement in the economic picture in the next few years, as
unemployment is expected to stay above 8 percent until 2014 and GDP is expected to remain
below a growth rate of 3 percent, annually, during the same forecast period. Several factors are
contributing to the tepid forecast, including the looming expiration of the Bush era tax cuts and
the temporary payroll tax reduction in the coming year. Additionally, Europe is in a recession,
which will have a chilling effect on US exports.
The national housing outlook for the coming year may be a source of mild optimism among
economists. The Case-Shiller Home Price Indices released for February indicate that home
prices continue to decline, nationally, but at a slower rate, indicating that we may be nearing the
bottom of the trough. Historically low interest rates, increases in real rents (up to 10 percent in
some markets), and modest improvements in employment and real wages may signal coming
improvement in the housing market.
The national economy appears to be recovering slowly, but numerous challenges lie ahead.
Financial instability in Europe continues to be a threat, but domestic fiscal policy also clouds the
economic outlook for the US. Federal deficits are expected to top $500 billion per year for the
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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foreseeable future, eroding the fiscal stability of the US. Likewise, increasing gasoline prices
and uncertainty over tax policy in the US threaten the slow recovery.
The outlook for California’s economy is very slow growth over the next few years.
Unemployment in California is currently hovering around 11 percent and is expected to improve
in the coming years, falling to a little over 8 percent in 2014, according to economists at UCLA.
This decrease in the unemployment rate, which had remained above 12 percent since late
2009, indicates some unexpected strength in California’s labor statistics, as the labor force has
actually grown in the past years. A falling unemployment rate coupled with an increase in the
labor force means that the additional jobs have been created. Employment gains in California
have been most pronounced in the Silicon Valley and the San Francisco Bay Area, although
Orange County and San Diego have outpaced national employment growth.
Economic growth in California is expected to be slow over the coming years, as our economy is
linked to the sale of goods and services nationwide, and US consumer demand is not expected
to grow rapidly. There are bright spots in the economic outlook, however. According to the
California New Car Dealers Association (CNCDA), new car dealers sold 1.3 million cars in 2011,
an increase of almost 10 percent over the prior year. Foreclosures have also decreased, as
notices of default dropped by almost 12 percent compared to the fourth quarter of 2010.
Taxable sales are expected to increase by slightly more than 3 percent in 2012, according to the
UCLA Anderson Forecast, and grow by approximately 4 percent in 2013 and 2014.
The outlook for the San Diego economy continues to be positive. Unemployment fell from 10.5
percent in July 2011 to 9 percent in December, although it edged back up to 9.5 percent in
March. The county saw the addition of 5,400 jobs in February, with the largest gains in
education and health services and government. The USD Index of Leading Economic
Indicators continued a two-year trend, increasing by almost six percent compared to January
2011. Following minor decreases in August and October, the index has climbed steadily
through January.
Home prices continue to be
depressed in San Diego county
and, according to DataQuick, the
median single family residence
fell by 2.8 percent (to $345,000)
in the first quarter of 2012,
compared to same period in
2011. Residential building
permits started 2012 very slowly,
especially compared to an
increase of 56 percent in 2011.
The most recent Case-Shiller Home Price Indices show a drop in San Diego home prices of 3.9
percent, between February 2011 and 2012. However, this report also indicated that prices
increased by 0.2 percent month-over-month in February, which may indicate that San Diego,
like the nation, is nearing the bottom.
The chart above reflects historical movement in the USD’s Leading Economic Indicators.
Despite relatively high unemployment and weak housing sales indicators, the economic outlook
for the county remains positive.
Carlsbad’s economy is tied closely to that of the San Diego region. For FY 2011-12, property
taxes decreased by less than one percent, compared to the prior year. Transient Occupancy
Tax (TOT), a gauge of the health of local tourism, is expected to end FY 2011-12 with an 8.4
percent increase over last year. Last years’ TOT was abnormally low due, in part, to change of
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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ownership in one of the city’s major resorts and a remodel at another resort. Sales taxes are
expected to end FY 2011-12 with an increase of 4.5 percent due to the continuing strength in
retail and auto sales. Despite positive growth in our three major General Fund revenue
sources, revenues will be flat compared to FY 2011-12, as we have experienced a decrease in
interest earnings and the expiration of the Vehicle License Fee (VLF).
Housing prices in Carlsbad
continued their downward
trend during the last year.
Data on single family
residence (SFR) sales from
DataQuick indicate that the
median sales price fell to
approximately $580,000 in
the first quarter of 2012, a
decrease of over 8 percent
compared to the same
quarter in 2011. Only one zip
code, 92011, showed an
increase in this time period.
The total assessed values in
the city are close to $24 billion, a decrease of less than one percent compared to the prior fiscal
year (FY 2010-11). According to recent growth projections prepared for the city, Carlsbad will
add 903 residential units over the next five fiscal years.
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
270,000 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 23 percent in the first quarter of 2012. Industrial vacancy
remained stable at around 15 percent.
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 is expected to open in summer 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 Sheraton
Carlsbad Resort and Spa, Homewood Suites and Hampton Inn. A new Hilton will open in
summer 2012 at Ponto Beach.
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
0
100
200
300
400
500
600
700
800
900
2005 2006 2007 2008 2009 2010 2011 2012Thousands
Fiscal Year
Median SFR Home Prices
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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linkages to hiking trails, The Crossings at Carlsbad is a destination spot for golfers and non-
golfers alike.
It is the Council’s goal to ensure that the city remains in good financial health, and there are a
number of steps the city has taken to attain that goal. One of the steps is the Growth
Management Plan. This plan was adopted by the citizens to ensure that all necessary public
facilities were constructed along with development. It also ensures that a financing plan is in
place to pay for the facilities prior to the development of the property.
In addition to the Growth Management Plan, the city also prepares a long-term financial model
for both the capital and operating needs of the city. With a growing city such as Carlsbad, it is
imperative that we plan for the impacts of the economy, serving new development and operating
new public facilities, as well as planning for capital needed to build them. Thus, the city prepares
a ten-year operating forecast for the General Fund, and 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, and calculates the anticipated operating budget impacts.
In this way, the city can anticipate the effects of development from both a capital and an
operating perspective.
One important initiative the city has undertaken to ensure its financial health is the development
of an Infrastructure Replacement Fund. With this fund, the city sets aside a portion of General
Fund revenues 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 experiencing the
impact of 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 many facilities for which the city is responsible.
As national and local
economic conditions
begin to improve,
Carlsbad is well
positioned to reap the
benefits of a diverse
business composition.
Over the past decade,
the city has developed
an economic base that
attracts business,
tourism, and retail
consumers. The city
hosts four regional
shopping areas within
its boundaries; an auto
mall, a large regional
mall, an outlet center, and a high-end retail center in the southern part of the city called The
Forum. A strong tourism industry is served by Legoland and a host of resorts and hotels, as
mentioned previously. All of these factors, combined with relatively stable property values,
provide a strong revenue base to support the high level of city services for our residents. In FY
2012-13, the city is expected to generate over $90 million, or 78 percent of General Fund
revenues, from three sources: property taxes, sales taxes, and transient occupancy taxes
(TOT).
Overall, for FY 2012-13, General Fund revenue is projected to increase by 1.3 percent from the
previous year’s estimates. Most sources of tax revenue are expected to increase slightly in FY
0
20
40
60
80
100
2004 2007 2010 2013e$ MillionsFiscal Year
General Fund Revenues (Top 5)
Other Franchise
SDG&E Franchise
TOT
Property Tax
Sales Tax
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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2012-13, although property taxes are projected to decrease slightly by less than 1 percent.
Sales tax is expected to increase by a little more than 4 percent and TOT revenues are
projected to increase by over 7 percent due, in part, to the addition of the Ponto Hilton. Home
values, as discussed earlier, continue to decline, and we expect assessed values to decrease
slightly again in FY 2012-13. Development related revenue items have been decreased for FY
2012-13, in anticipation of slower building activity. More information on all of the city’s revenues
and programs can be found in the later sections of the document.
State of California – Governor Jerry Brown continues to face the ongoing
budgetary crisis that has plagued California since the economic downturn. The
State of California has been in a severe fiscal crisis for a number of years and has
relied on a number of dubious strategies to balance its budget, including reliance on
one-time revenues, borrowing from various state funds, and raiding city, county and
special district funds.
In January, the Governor released his proposed budget for Fiscal Year 2012-13. The proposed
budget forecasts a deficit of $9.2 billion through Fiscal Year 2012-13, as the state continues to
face challenges presented by a sluggish economy, high unemployment, and a myriad of
structural budget issues, including high levels of debt and increasing pension liabilities.
Temporary tax revenues of $4.4 billion are included in the proposed budget and assume
passage in November of initiatives that would increase income taxes on high earners and raise
the sales tax rate by one-half percent. The remainder of the deficit is addressed through
additional spending cuts and program realignments. As in the previous year, the proposed
budget includes trigger cuts of $5.4 billion, which provide for additional expenditure reductions if
revenues do not materialize as forecast. Most of these cuts, over $4.8 billion, would come from
schools and community colleges. The deficit projected in the proposed budget grew to $16
billion in May, indicating that lawmakers may have been optimistic in projecting revenues for the
current year.
In June 2011, the state legislature passed ABx1 26 and ABx1 27, dissolving Redevelopment
Agencies (RDA) in the state of California. In December 2011, the California Supreme Court
upheld ABx1 26 and invalidated ABx1 27, which upheld the California legislature’s decision to
dissolve RDAs and eliminated alternative options allowed under ABx1 27. Local RDAs were
required to transfer all assets and obligations to successor agencies, effective February 1, 2012,
as the wind down process begins.
LOOKING FORWARD
In order to strategically address the future needs of the city and to ensure that we maintain a
structurally balanced budget in the long term, the city prepares a ten-year financial forecast.
Revenue projections are developed based on current and forecasted economic variables at the
national, state, and local levels, and provide city leaders with some measurement of future
capacity to support city programs and services. In recent years, revenue growth has become
more difficult to project in the long-term, as we find ourselves in an economic climate that
changes rapidly and unpredictably, and the forecast allows decision makers to adjust for these
changes. The ten-year forecast is updated frequently to avoid potential pitfalls and to ensure
that we identify and resolve fiscal challenges and continue to develop a balanced and
responsible budget.
Over the past several years, the city has addressed the budgetary challenges brought on by the
recent recession and taken deliberate measures to continue to allocate resources in a
responsible manner, minimizing the impact to users of city services. These measures included
a reduction in full-time and hourly full-time equivalent (FTE) positions, delaying the construction
of non-essential capital projects, reducing the funding for capital outlay and goal projects,
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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reducing and/or eliminating cost of living salary increases, requiring employees to pay a larger
portion of their retirement costs, using technology and other tools to create efficiencies, and
reducing certain non-essential service levels with a minimal impact to the community.
The ability to anticipate changes in revenue sources and to balance those resources against the
costs related to ongoing and future programs, services, and infrastructure requirements is
critical to the financial health of the city. The city relies on the General Fund forecast to
effectively manage fiscal resources and map a sustainable and responsible path for attaining
the goals of the community. The tumultuous economic environment experienced in the past few
years makes this long-term perspective even more important.
Overall, General Fund revenues are expected to cover ongoing costs in the coming decade, as
depicted in the graph above. The 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. Ongoing
transfers to the Carlsbad Crossings Golf Course are expected to continue over the forecast
period; however, the transfer decreased from $1.4 million in the current fiscal year to
approximately $950,000 in FY 2012-13, and is expected to decrease to $700,000 by FY 2015-
16. The operating costs of new city facilities supported by the General Fund, such as Alga
Norte Park and the City of Carlsbad’s Safety Training Center, are also captured in the ten-year
forecast. 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, however, are not expected to increase in the next fiscal year and values will
continue to subdue property tax receipts.
The forecast assumes that General Fund revenues will increase by less than two percent in FY
2012-13, as improving economic conditions buoy revenues from 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
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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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 5 percent,
annually, over the life of the forecast. Pension plan costs will increase in FY 2012-13 by
approximately 3.25 percent for miscellaneous employees and 3.5 percent for safety employees,
due primarily to investment losses sustained by CalPERS in FY 2008-09 and updated actuarial
assumptions. The forecast also assumes that $1.8 million is set aside in FY 2012-13 to stabilize
future CalPERS increases or to address unfunded liabilities in both the safety and
miscellaneous retirement plans. 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
between 0.5 percent and 2 percent have been added to personnel 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 FY 2012-13 and modest
surpluses are anticipated after that. However, Carlsbad still faces economic challenges from a
fluctuating economy, continued fixed costs increases, and concerns over the impact that budget
decisions at the state and federal levels could have on the city’s financial situation. While the
ten-year forecast employs conservative estimates, these modest surpluses could evaporate if
the economy stumbles.
FINANCIAL POLICIES
The city has formally adopted a number of financial policies to not only safeguard city assets,
but also to assist in ensuring long-term financial stability.
The city’s General Fund reserve policy sets a minimum reserve of 30 percent of the General
Fund Operating Expenditures. In addition, the policy sets a target reserve of 40 percent to 50
percent of General Fund Operating Expenditures. The minimum reserve may be used for cash
flow needs necessitated by unforeseen emergencies, while reserves in excess of the minimum
will be used only for one-time uses associated with unexpected events, such as economic
downturns or temporary reductions in revenues. In general, General Fund reserves will be used
for one-time uses only. The reserve level, which includes undesignated, unreserved fund
balance, will be calculated using the prior fiscal year's Adopted General Fund Budgeted
expenditures.
The city has also established a formal Investment Policy. It is the policy of the City of Carlsbad
to invest public funds not required for immediate day to day operations in safe, liquid and
medium-term investments that shall yield an acceptable return while conforming to all California
statutes. It is intended that the policy cover the investment activities of all contingency reserves
and inactive cash under the direct authority of the city. Investments of the city and its
component units will be made on a pooled bases; however, investments of bond proceeds will
be held separately if required.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
A-12
2012-13 OPERATING REVENUES
BY FUND TYPE
$205.8 MILLION
OPERATING BUDGET
Revenue Projections
The city’s operations are
divided into various funds.
Each fund has been
established because of
certain restrictions placed
on the use of the
resources received by that
fund. Any unrestricted
funds are placed in the
General Fund. Estimated
revenues for the city’s five
fund types are shown on
the accompanying graph.
General Fund
The fund receiving the largest slice of the revenues is the General Fund, with estimated
revenues of $116.1 million for Fiscal Year 2012-13. The General Fund pays for most of the city
services available to city residents. The majority of the General Fund revenues are derived
from taxes. The following graph illustrates the sources of revenue to the General Fund.
PROPERTY TAX
41%
TRANSFER TAXES
1%SALES TAX
25%
BUS LIC TAX
3%
LICENSES & PERMITS
1%
CHARGES FOR
SERVICES
5%
OTHER REVENUE
5%
INTERGOVERNMENT
1%
FRANCHISE TAX
4%
TRANSIENT TAX
12%INCOME FROM
INVESTMENTS &
PROPERTY
2%
2012-13 GENERAL FUND REVENUES
$116.1 MILLION
CITY OF CARLSBAD BUDGET HIGHLIGHTS
A-13
Property taxes, at $47.8 million, are the largest General Fund revenue. The city receives only
about 18 percent of the property taxes paid by its citizens. The remainder of the tax goes to the
school districts, the state, and other various agencies.
Sales tax is the second largest source of revenue for the General Fund. Sales taxes are
estimated to bring in $28.8 million for Fiscal Year 2012-13. Automobile and retail sales are the
most significant contributors to the category of sales tax.
Transient occupancy taxes (hotel taxes) are estimated at $13.5 million and represent the third
largest revenue source for the city. Franchise taxes, transfer taxes, and business license taxes
make up the remaining $9.5 million in tax revenues estimated to be collected in Fiscal Year
2012-13.
Intergovernmental revenues are revenues collected by the State and other governmental
agencies and allocated to the city based on a formula. Examples of intergovernmental
revenues include motor vehicle license fees, State mandated cost reimbursements, and
homeowner’s exemptions. Intergovernmental revenues are estimated at approximately
$900,000 for the upcoming year.
Licenses and permits account for $1.4 million of the General Fund revenues and include
building permits and other development-related permits. Charges for services are estimated to
be $6.2 million and include fees for engineering, planning, building, recreation, and ambulance
services. Income from investments and property are estimated at $2.6 million.
Other General Fund revenue sources include charges collected from other departments, fines
and forfeitures, and miscellaneous revenues. Those sources total $5.4 million
Special Revenue Funds
Revenues from Special Revenue funds are estimated at $11.3 million for Fiscal Year 2012-13.
Funds collected in this category are legally restricted to specified purposes. Examples of
funding resources include donations, grants, and special assessments. The types of functions
supported with Special Revenue funds include programs such as Section 8 Housing Assistance,
Housing Trust Fund, Community Development Block Grants (CDBG), and maintenance and
assessment districts.
Enterprise Funds
Enterprise funds revenues make up the second largest revenue group, totaling $58.6 million.
Enterprise funds operate similar to a business in that they charge fees to cover the cost of their
services. Examples of the city’s enterprises include water and wastewater services and solid
waste management.
Internal Service Funds
Internal Service fund revenues, projected to be $17.7 million, are derived from charges to the
city programs that benefit from the services rendered. The funds collected must be used
specifically to support the internal service. Examples of the city’s Internal Service funds include
General Liability, Self Insured Benefits, Information Technology, Workers’ Compensation, and
Vehicle Maintenance and Replacement.
Redevelopment Obligation Retirement Funds
The Redevelopment Obligation Retirement Fund (RORF) revenues are expected to total $2.1
million in the upcoming year. On June 29, 2011, California Governor Jerry Brown signed ABX1
26 to dissolve all redevelopment agencies within the State of California. All agencies were
subsequently dissolved as of February 1, 2012, and a Successor Agency was designated to
complete the work of the Carlsbad Redevelopment Agency (RDA) and satisfy the financial
obligations. A Recognized Obligation Payment Schedule (ROPS) was prepared by the
Successor Agency in April 2012 which must ultimately be approved by the Oversight Board, the
CITY OF CARLSBAD BUDGET HIGHLIGHTS
A-14
County of San Diego and the State of California. The initial ROPS identified financial
commitments of the former RDA which will be paid from semi-annual tax increment revenue
received by the Successor Agency. Every six months a new ROPS must be prepared and
approved by the Oversight Board, the County of San Diego and the State of California in order
to receive additional tax increment. Due to the dissolving of the RDA, the RORF will only
receive tax increment revenues and interest earnings on any cash balances. Tax increment
revenues are projected to decrease due to the increase in County of San Diego administrative
costs which are netted against the tax increment revenues received by the Successor Agency.
Operating Budget By Program
The total Operating Budget adopted for the city for FY 2012-13 equals $202.7 million, which is
approximately 4.6 percent higher than the Operating Budget adopted for FY 2011-12. The
Operating Budget includes funding for the General Fund as well as all other city funds, and can
be categorized by main functional area. Six main functional areas that represent the key
businesses of the city have been identified, as well as a Non-Departmental component which
includes fund transfers as well as items that benefit the city as a whole. The graph below shows
the percentage of the Operating Budget applicable to each of the functional areas.
Total funding allocated for the Policy and Leadership Group for 2012-13 is $5.4 million. This
group encompasses all elected officials and the chief executive offices for the city. These
include the offices of the City Council, City Manager, City Clerk, City Attorney, and City
Treasurer, as well as the communications and records management functions.
Internal Services, with a budget of $30.4 million, includes finance, purchasing, human
resources, information technology, property and environmental management, fleet maintenance
and replacement, self-insured benefits, risk management, and workers’ compensation. These
areas mainly provide services to internal city departments.
Public Safety services are funded at $45.6 million and include all of the police and fire programs
such as police patrol, vice/narcotics, juvenile diversion and DARE programs, fire emergency
operations, fire prevention and emergency preparedness.
Policy/
Leadership
3%Internal Services
15%
Public Safety
22%
Non-
Departmental
7%
Community
Services
12%
Community
Development
8%
Public Works
33%
2012-13 OPERATING EXPENDITURES
$202.7 MILLION
CITY OF CARLSBAD BUDGET HIGHLIGHTS
A-15
Community Development, with a budget of $16.4 million, provides the services that guide and
oversee the planning and development of Carlsbad as depicted in the city's General Plan. The
General Plan is the base document that expresses the goals and public policy relative to future
land use. It acts as a "constitution" for development and is the foundation upon which all land
use decisions are based. Also included under Community Development are building and code
enforcement, volunteer programs, neighborhood services, and housing and redevelopment
programs.
Community Services, with a budget of $24.6 million, is made up of the library, parks and
recreation, cultural arts, and seniors programs. These programs are provided to a wide range
of people and assist in their education and cultural development.
The functional area requiring the largest amount of funds is Public Works, with a budget of
$66.3 million. Public Works is responsible for the provision of utility services as well as the
building and maintenance of all of the city’s streets and roadways. It is comprised of the water,
sewer, and solid waste enterprise funds, as well as the Transportation Department and lighting
and landscaping special assessment districts.
The Non-Departmental and Contingency accounts total $13.9 million and include transfers to
other funds, programs benefiting the city as a whole, such as community promotions,
community contributions, assessment services, and the City Council’s contingency account.
Included in the non-departmental group is a $7.5 million transfer to the Infrastructure
Replacement Fund. This program sets aside funds for the replacement of the city’s base
infrastructure. Also included is a $1.8 million transfer to the city’s self-insured benefits fund to
assist with anticipated future pension rate increases. The City Council contingency account,
which is available for emergencies and unforeseen program needs that arise during the year, is
budgeted at $1.5 million. The contingency account amounts to 1.3 percent of the FY 2012-13
General Fund budget.
Staffing
The FY 2012-13 Operating Budget reflects a total net decrease of 9.75 full-time positions. The
net decrease in part-time staff totaled 7.16 of hourly full-time equivalent positions. These
changes result in a city workforce of 674.5 full and three-quarter time employees and 132.58
hourly FTE. The staffing changes in each of the city’s programs are discussed more fully in the
Operating Budget Overview.
CAPITAL IMPROVEMENT PROGRAM
The City of Carlsbad’s Capital Improvement Program (CIP) is a long-range planning document,
which outlines the expenditure plan for current and future capital projects and the corresponding
revenues to pay for those expenditures. Projects in the CIP consist primarily of new construction
or major maintenance and replacement of city facilities such as parks, roads, civic facilities such
as libraries, police and fire stations, and sewer, water, and drainage facilities. The Capital
Improvement Program for 2012-13 totals $28.9 million in new appropriations and an estimated
$201.7 million in continuing appropriations, for a total appropriation of $230.6 million.
Some of the notable capital projects which are planned in the next five years are discussed on
the following pages.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
A-16
Park Development Projects
Alga Norte Community Park and Aquatic Center – The park site is located on 32 acres in the
Southeast Quadrant along Poinsettia Lane between El Camino Real and Alicante Road.
Amenities include:
A 56 meter Olympic sized competition pool with viewing bleachers
A 25 meter, 12 lane swim instruction pool
A 10 by 25 foot therapeutic pool with jets
A 22 foot diameter 6 inch deep kids pool
A “spray-ground” play area for young children
Three lighted softball/baseball fields
One lighted full basketball court and one half court
Batting cages and a concession stand at the ball fields
Picnic areas with barbecues
Playground with 100 percent universally accessible play equipment
An off-leash dog park divided into areas for larger and smaller dogs, including obstacle
course-type play equipment
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
The swimming pool complex was one of the projects approved by the voters through
Proposition C in 2002. Construction of Phase 1 will begin in the summer of 2012.
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 2014-15.
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 $8.6 million.
Maintenance and Operations Center – The city has planned the
construction of a Maintenance and Operations Center (M&O
Center) to physically bring together the citywide maintenance functions into a single facility. The
M&O Center will be located on the available property adjacent to the Fleet Maintenance/Public
Safety Center. It is anticipated that the M&O Center will include offices and support space,
workshops, outside storage, warehouse space and parking to accommodate the city’s
maintenance personnel. This combined group of maintenance functions may include segments
of the Utilities, Transportation, Parks and Recreation, and Property and Environmental
Management departments. The cost of the project is approximately $28.1 million.
Facilities Maintenance – As the city facilities begin to age, maintenance and repair projects are
needed to keep them in good condition. Four projects have currently been identified at a total
CITY OF CARLSBAD BUDGET HIGHLIGHTS
A-17
cost of about $700,000. Included are roof renovation and replacement projects, City Hall
electrical upgrades, and exterior waterproofing at the Safety Center.
Street Projects
Traffic congestion continues to be one of the top concerns among citizens. To help improve the
flow of traffic throughout Carlsbad and to keep the city’s streets in top condition, there are a
number of street projects expected to be completed in the next five years.
Some of the larger street projects include:
Traffic Signal Program – In keeping with the City Council’s goal of improving
traffic flow, the FY 2012-13 CIP includes additional funding of $2.5 million for
the Traffic Signal Program. 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 encourages the use of 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.
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 FY 2014-15. The CIP includes $5.4 million to fund this project in the next five years.
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.
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. The total estimated
cost for these projects is $19.7 million.
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 FY 2012-13 CIP has $3.7 million budgeted for this
program.
Magnolia and Valley Sidewalk and Street Construction – Planned construction includes street
widening and sidewalk improvements along portions of Valley Street and Magnolia Avenue in
the vicinity of Carlsbad High School, Valley Middle School, and Magnolia Elementary School.
The total cost is estimated at $2 million.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
A-18
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 additional funding, in excess of $67 million is
scheduled for these 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 $55.1 million, of which an estimated $17.3 million is to be
funded by the City of Carlsbad, with the remainder of $37.8 million to be funded by the City of
Vista.
Other major wastewater facilities scheduled for construction or replacement within the next five
years include:
Buena Interceptor Sewer Improvements
Foxes Landing Lift Station and Forcemain
Home Plant Lift Station Replacement and Forcemain
Terramar Sewer Replacement
Vancouver Sewer Extension
Water/Recycled Water Lines
Major water/recycled water facilities scheduled for construction or replacement within the next
five years include:
College Boulevard – Cannon to Badger Lane
Maerkle Floating Cover Replacement and Pump Station Improvements
Robertson Ranch Water Transmission Main
Tri-Agencies Water Transmission Pipeline Replacement
Reservoir Repair/Maintenance Program
Recycled Water Service to South Carlsbad
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 $2.3 million programed.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
A-19
SUMMARY
The FY 2012-13 budget was prepared against the backdrop of a mildly improving economy,
especially at the regional level. City revenues, especially those derived from taxable sales and
tourism, are expected to continue improving over the coming year. Increasing revenues,
coupled with the ongoing effects of budget reductions implemented in past years, positions
Carlsbad to benefit from future improvements in economic conditions. The city is also in the
midst of a comprehensive review of our service delivery methods, and is focused on providing
services at the best value, identifying services that can be provided in a more efficient manner
by the city or outsourced to private vendors.
National, state, and local economies showed slight improvements in the past year, but the slow
recovery could face challenges, from instability in Europe to the domestic uncertainty
surrounding future tax rates in the United States. Unemployment remains stubbornly high and
housing markets are showing only marginal improvement, indicating that the economy will
continue to creep along at a sluggish pace for the foreseeable future. Although our forecast
indicates improving conditions in the coming years, the FY 2012-13 budget maintains the fiscal
discipline exercised by the city over the past several years. No new programs, services or
positions are proposed to be added in the coming year.
The City of Carlsbad continues to exercise fiscal responsibility. The city continues to plan for
the long-term and uses a ten-year financial forecast in creating the budget. This long-term
planning tool allows us to model the effects of ongoing fiscal impacts from new facilities,
economic conditions, and changes in personnel costs. The FY 2012-13 budget presents our
continued dedication to the provision of excellent city services and the quality of life valued by
those who live, work and play in Carlsbad.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
A-20
DEBT MANAGEMENT ISSUES
The use of debt has always been a primary issue in the development of the Capital
Improvement Program and the policies to implement the Growth Management Program. Over
the years, the city has issued millions of dollars of bonds and Certificates of Participation
(COPs) to fund streets, buildings, sewer and water facilities, open space acquisitions, and other
infrastructure projects. The city is continually evaluating its outstanding debt as well as potential
future issues to ensure that interest costs are kept at a minimum and the use of the bond funds
is appropriate.
Under state finance law, the city’s outstanding general obligation debt may not exceed 15
percent (as adjusted by 25%, per the law) of total assessed property value. By law, the general
obligation debt subject to the limitation may be offset by amounts set aside for repaying general
obligation bonds. For the last 10 years, the city’s general obligation debt has been under 5% of
the total calculated debt limit.
Since Fiscal Year 2008-09, no debt service payments have been required of the General Fund,
and no new debt is anticipated for the General Fund in the coming year. Of the approximately
$113 million of debt currently outstanding, none will be paid back using General Fund monies.
Rather, the debts will be repaid from sewer revenues, golf course revenues and from property
owners benefiting from the improvements built with bond proceeds. The city has no obligation
to advance funds to the assessment districts if the property owners do not pay.
The table on the following page provides additional information on debt issued by the City of
Carlsbad.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
A-21
The following table identifies the debt the city has issued, the outstanding principal balance, the
2012-13 scheduled principal and interest payments, and the scheduled year of payoff.
Bond Name Repayment Source
Original Bond
Issue
Outstanding
Principal At
6/30/12
2012-13
Payment P&I
Final
Payment
FY
Carlsbad Public Financing Authority Bonds
Revenue Bonds Golf Course 18,540,000$ 17,345,000$ 1,111,600$ 2037
Enterprise Revenue
1996 Refunding Encina JPA
Tax Allocation Sewer Enterprise 11,080,000$ 2,585,000$ 931,469$ 2015
Bonds Revenue
1993 Redevelopment
Tax Allocation Redevelopment 15,495,000$ 9,195,000$ 1,039,627$ 2024
Bonds
CFD #3 2006 -Improvement Area 1
Special Tax Special District 11,490,000$ 10,540,000$ 758,996$ 2037
Bonds
CFD #3 2008-Improvement Area 2
Special Tax Special District 18,175,000$ 13,895,000$ 1,056,293$ 2039
Bonds
Subtotals 74,780,000$ 53,560,000$ 4,897,985$
2005 Poinsettia Lane East (AD 2002-1)
Limited Obligation Assessment 33,085,000$ 29,315,000$ 2,130,421$ 2036
Improvement Bonds District
2003 College Boulevard-Cannon Road (AD 2003-1)
Limited Obligation Assessment 11,760,000$ 10,385,000$ 832,948$ 2035
Improvement Bonds District
1997 Carlsbad Ranch (AD 95-1)
Limited Obligation Assessment 10,175,438$ 5,705,000$ 693,140$ 2023
Improvement Bonds District
1998 Rancho Carrillo (AD 96-1)
Limited Obligation Assessment 19,600,000$ 13,635,000$ 1,245,163$ 2029
Improvement Bonds District
Subtotals 74,620,438$ 59,040,000$ 4,901,672$
Totals 149,400,438$ 112,600,000$ 9,799,657$
City of Carlsbad
Debt Outstanding
FINAL FINAL FINAL
BUDGET BUDGET BUDGET 2012-13
2010-11 2011-12 2012-13 CHANGES
CITY ATTORNEY 7.00 7.00 7.00 0.00
CITY COUNCIL 1.00 1.00 1.00 0.00
CITY MANAGER 8.00 7.00 7.00 0.00
CITY TREASURER 0.75 0.75 0.75 0.00
COMMUNICATIONS 2.75 2.75 2.75 0.00
COMMUNITY AND ECONOMIC DEVELOPMENT 54.00 50.00 47.00 (3.00)
FINANCE AND RISK MANAGEMENT 30.50 30.50 30.50 0.00
FIRE 88.75 87.75 87.75 0.00
HOUSING AND NEIGHBORHOOD SERVICES 11.00 13.00 10.00 (3.00)
HUMAN RESOURCES & WORKERS COMP 9.00 9.00 9.00 0.00
INFORMATION TECHNOLOGY 22.50 22.50 22.50 0.00
LIBRARY & ARTS 52.25 51.25 51.25 0.00
PARKS AND RECREATION 71.95 70.95 68.40 (2.55)
POLICE 162.00 162.00 161.00 (1.00)
PROPERTY AND ENVIRONMENTAL MANAGEMENT 41.60 39.60 40.55 0.95
RECORDS MANAGEMENT 8.00 6.25 6.00 (0.25)
TRANSPORTATION 58.40 54.40 54.40 0.00
UTILITIES 69.55 68.55 67.65 (0.90)
FULL AND 3/4 TIME LABOR FORCE 699.00 684.25 674.50 (9.75)
2010-11 2011-12 2012-13 Difference
Full Time Personnel 694.50 679.75 669.00 (10.75)
3/4 Time Personnel in Full Time Count 4.50 4.50 4.50 0.00
Limited Term Personnel 0.00 0.00 1.00 1.00
Unfunded Full Time Positions (6.00) (3.00)0.00 3.00
Hourly Full Time Equivalent Personnel 138.94 139.74 132.58 (7.16)
TOTAL LABOR FORCE*831.94 820.99 807.08 (13.91)
PERSONNEL ALLOCATIONS
SUMMARY OF REQUESTED LABOR FORCE BY CATEGORY
A-23
2012-13 BUDGET CALENDAR
A-24
DECEMBER
JANUARY
FEBRUARY
MARCH
MAY
JUNE
Budget policies are set
Capital Improvement Program (CIP) kickoff meeting
Departments submit Capital Project requests
Operating revenue is projected for the General Fund
Operating budget manual is distributed to departments
Operating Budget kickoff meeting
Growth projections completed
CIP analysis/review with departments.
Budgets for Internal Service Funds are prepared
Leadership Team meetings to review CIP
CIP revenue projections
Departments submit Operating Budget requests
Finance department analyzes and compiles
Operating Budget submittals
Leadership Team – Final CIP Review
Leadership Team meetings to review Operating Budgets
CIP Budget Workshop: May 22 Council meeting
City Manager’s Team - Final Operating Budget reviews
Preliminary Operating Budget is sent to the printer
City Council Program Options prepared
Operating Budget Workshop: June 5 Council meeting
Citizens Budget Workshop: June 7
Council adopts final budget including Operating Budget,
Capital Improvement Program, and Annual Spending
Limitation: June 26 Council meeting
Operating Budget
Capital Improvement Program (CIP)
APRIL
2012-2013 Operating Budget &
Capital Improvement ProgramCALIFORNIA Operating Budget
Operating Budget Operating Budget
Operating Budget Summary Summary
Operating Budget SummarySummary
2012-13 OPERATING BUDGET OVERVIEW
B-1
The Operating Budget for Fiscal Year 2012-13 totals $199.4 million, with revenues for the year
estimated at $205.8 million. General Fund revenues are estimated at $116.1 million and
General Fund budgeted operating expenditures are $115.1 million.
REVENUE
The following table shows the total operating revenues anticipated to be received by the city for
FY 2011-12, as well as those estimated for FY 2012-13.
PROJECTED ESTIMATED $%
2011-12 2012-13 CHANGE CHANGE
GENERAL FUND 114.6$ 116.1$ 1.5$ 1.3%
SPECIAL REVENUE 12.0 11.3 (0.7) -5.8%
ENTERPRISE 54.4 58.6 4.2 7.7%
INTERNAL SERVICE 15.9 17.7 1.8 11.3%
REDEV. OBLIG. RETIREMENT 3.1 2.1 (1.0) -32.3%
TOTAL 200.0$ 205.8$ 5.8$ 2.9%
FUND
REVENUE SUMMARY
BY FUND TYPE
(in Millions)
Revenue estimates for the Operating Budget indicate that the city will receive a total of $205.8
million in FY 2012-13, a $5.8 million, or 2.9 percent, increase over the prior year’s projections.
The significant changes from the prior year include a $4.2 million, or 7.7 percent, increase in the
Enterprise Funds due to proposed water and wastewater rate increases. The General Fund
shows an increase of $1.5 million, or 1.3 percent, and Special Revenue Funds show a decrease
of $700,000, or 5.8 percent, from the prior year. More information on the city’s revenue sources
can be found in the discussion that follows.
General Fund
General Fund revenues provide a representative picture of the local economy. These revenues
are of particular interest as they fund basic city services, such as Police, Fire, Library, Street
and Park Maintenance, and Recreation programs. The table below provides a summarized
outlook for the major General Fund revenues.
PROJECTED ESTIMATED $%
2011-12 2012-13 CHANGE CHANGE
PROPERTY TAX 48.1$ 47.8$ (0.3)$ -0.6%
SALES TAX 27.6 28.8 1.2 4.4%
TRANSIENT OCCUPANCY TAX 12.5 13.5 1.0 8.0%
FRANCHISE TAXES 4.8 4.9 0.1 2.1%
BUSINESS LICENSE TAX 3.7 3.6 (0.1) -2.7%
DEVELOPMENT REVENUES 2.3 2.0 (0.3) -13.0%
ALL OTHER REVENUE 15.6 15.5 (0.1) -0.6%
TOTAL 114.6$ 116.1$ 1.5$ 1.2%
SIGNIFICANT GENERAL FUND REVENUES
(In Millions)
2012-13 OPERATING BUDGET OVERVIEW
B-2
General Fund revenue sources indicate that Carlsbad is benefitting from an improving state and
local economic climate. Two of our largest revenue sources, sales tax and transient occupancy
tax (TOT) have exhibited healthy growth in FY 2011-12 and are expected to continue that trend
in the coming fiscal year. Revenues from sales tax and TOT increase are highly sensitive to
changes in the economic activity, unlike property tax revenues, which tend to lag behind
economic growth and remain relatively stable over time. Home prices in Carlsbad have
continued to fall over the past year and, in FY 2012-13, property taxes are expected to
decrease slightly, providing approximately $47.8 million to the General Fund, compared to $48.1
million in FY 2011-12. This is based on a 1.2 percent estimated decrease in assessed
valuation, as provided by the County Assessor in May 2012, partially offset by new construction
that has occurred over the past year. The median single family home sales price in Carlsbad is
fell to $580,000 in March 2012, down over 7 percent from last year.
Property taxes tend to lag behind the rest of the economy, as the tax revenue for the upcoming
fiscal year is based on assessed values from January. Thus, the taxes to be received for Fiscal
Year 2012-13 are based on assessed values as of January 1, 2012.
Proposition 13, adopted in
1978, limits the annual
increase in assessed values
for property. Under this
proposition, assessed
values (and the related
property tax) can grow by no
more than two percent per
year. The value upon which
the tax is based is only
increased to the full market
value upon the sale of the
property. Thus, property
taxes tend to grow slowly unless there is a significant amount of housing activity. In past
decade, we have seen robust growth in property taxes due to new development, high turnover
of existing homes, and double-digit growth in housing prices.
Changes in sales tax revenue align
more closely with changes in the
overall condition of the economy, and
are expected to increase as the
current economic recovery gains
steam. Sales taxes are expected to
total $28.8 million for FY 2012-13, an
increase of 4.4 percent compared to
the FY 2011-12 projections.
Approximately 25 percent of
Carlsbad’s sales tax revenue is
historically generated from automobile
sales, which slumped significantly
during the recent economic downturn.
New auto sales are expected to stabilize at around $5.7 million in FY 2012-13, as Carlsbad
recognized substantial growth in auto sales of around 18 percent in CY 2011. California auto
dealers, in general, sold 1.3 million cars, an annual improvement of almost 10 percent and
trucks in 2011, with the Honda Civic being the top seller. Much of this growth was attributed to
latent demand, which is unlikely to continue this rate of growth. General retail sales tax, which
comprises approximately 40 percent of annual sales tax revenue, grew by 8.1 percent in CY
General Retail
40%
Food Products
14%
Transportation
30%
Construction
2%
Business to
Business
13%
Miscellaneous
1%
Sales Tax by Category
Fourth Quarter 2011
2012-13 OPERATING BUDGET OVERVIEW
B-3
2011, outpacing the statewide growth rate of 4.5 percent. Like auto sales, retail sales tax
receipts are expected to grow at a slower rate in FY 2012-13. The budget for FY 2012-13
includes additional sales tax revenues generated from new retail activity, such as the opening of
the Ponto Hilton.
Several years ago, the State of California implemented the “Triple Flip.” The “Triple Flip” is
essentially a temporary swap of a ¼ cent of the cities’ sales taxes in return for property tax. It
was done in order to give the state a revenue source against which they could issue deficit
reduction bonds. The city’s sales tax estimates continue to show this amount as sales tax since
the amount is reflective of what the city would receive.
As can be seen in the chart on the previous page, the city’s sales tax base is heavily weighted
in the transportation (predominantly new car sales) and retail sectors. These two sectors make
up approximately 70 percent of the city’s sales tax base and were negatively impacted by the
recent economic recession. During FY 2011-12, sales tax revenues, especially in the auto and
retail sectors, increased as a slow economic recovery took root in San Diego.
Sales tax estimates also include approximately $800,000 in Proposition 172 funds, which are
earmarked for public safety service expenditures. Proposition 172 requires that the ½ cent
increase in California sales taxes be allocated to local agencies to fund public safety services.
The third highest General
Fund revenue source is
Transient Occupancy
Taxes (TOT, or hotel taxes),
estimated at $13.5 million
for FY 2012-13, an increase
of 8 percent compared to FY
2011-12 estimates. Growth
in the TOT base (existing
hotels) is expected to
increase by 3.5 percent in
FY 2012-13, driven primarily
by forecast increases in the
average daily rate paid for
rooms. The Ponto Hilton, a
new hotel, is also expected
to open in the summer of 2012 and add additional TOT revenues. TOT revenues peaked in FY
2007-08 at $14.3 million and, during the economic downturn, fell to a low of $11.5 million in FY
2009-10. As the graph indicates, this sector appears to be on the mend.
One of the more volatile
General Fund revenues
is the Franchise Tax.
Franchise taxes are paid
by certain industries that
use the city right-of-way
to conduct their
business. The city
currently has franchise
agreements for cable TV
service, solid waste
services, cell sites, fiber
0
5
10
15
2005 2007 2009 2011 2013e
$ Millions
Fiscal Year
Transient Occupancy Taxes
0
1
2
3
4
5
6
2005 2007 2009 2011 2013e
$ Millions
Fiscal Year
Franchise Taxes
Other Franchise
SDG&E Franchise
2012-13 OPERATING BUDGET OVERVIEW
B-4
optic antenna systems and gas and electric services. The cable and solid waste franchises
have been growing along with the growth in population, changes in their rate structures, and the
continued growth of the city’s newest cable franchises, AT&T and Time Warner. Overall,
franchise tax revenues are projected to increase by approximately 2.1 percent, primarily due to
increased receipts from cable and trash services, partially offset by a decrease in gas and
electrical services, which are paid by San Diego Gas and Electric (SDG&E).
SDG&E pays franchise taxes for the use of the public land over which they transport gas and
electricity. The city also receives an “in-lieu” franchise tax based on the value of gas and
electricity transported on SDG&E lines, but purchased from another source. The “in-lieu” tax
captures the franchise taxes on gas and electricity that is transported using public lands but
which would not otherwise be included in the calculations for franchise taxes, due to
deregulation of the power industry. The majority of the “in-lieu” taxes received is attributable to
Cabrillo Power, the operator of the Encina power plant, and is based on the gas used in the
generation of electricity. The continued reduction in operations at the Encina power plant is
projected to negatively impact the “in-lieu” franchise tax paid by SDG&E, leading to the
projected decrease in franchise taxes paid by SDG&E.
Development-related revenues include planning, engineering and building permits, and fees
paid by developers to cover the cost of reviewing and monitoring development activities such as
plan checks and inspections. These revenues are difficult to predict, as many of the planning
and engineering activities occur months or years before any actual development.
During FY 2009-10, development related revenues began to turn around from historic lows
experienced in FY 2008-09. During FY 2010-11, development related revenues continued to
strengthen, especially on the non-residential side with the permitting of the new Isis
Pharmaceuticals headquarters and the Hilton Beachfront Hotel. Although not as high as FY
2010-11, development related revenues are projected to end the year very strong in FY 2011-
12, with the development of several master planned residential communities and the
development of the new Legoland Hotel. In FY 2010-11, there were 260 units permitted for
residential housing. For FY 2011-12, 336 residential units have been permitted through April
2012. For FY 2012-13, 183 permits are projected to be issued for residential housing. Although
commercial and industrial building activity weakened in FY 2011-12 as compared to FY 2010-
11, it is expected that activity will pick up again in FY 2012-13 with the projected development of
the new Lowes and La Costa Town Square shopping centers. Due to projected subdued
residential activity as compared to the strong residential development in FY 2011-12, building-
related revenues are expected to drop by 13 percent in FY 2012-13.
Although Business license taxes are closely tied to the health of the local economy, due to
some one-time revenues received during FY 2011-12, they are projected to decrease by 2.7
percent to an estimated $3.6 million. There are currently about 8,900 licensed businesses in
Carlsbad, with just over 2,500 of them home-based.
All other revenues include transfer taxes, interest earnings, ambulance fees, recreation fees,
and other charges and fees. The estimate for Fiscal Year 2012-13 totals $15.5 million, a
$100,000, or 0.6 percent, decrease from the previous year.
Interdepartmental charges are generated through engineering services charged to capital
projects, reimbursed work from other funds and miscellaneous interdepartmental expenses
charged to funds outside the General Fund for services performed by departments within the
General Fund.
Transfer taxes are those taxes paid to the county upon the transfer of interests in real estate.
The tax is 55 cents per $500 of property value, and is split equally between the county and the
2012-13 OPERATING BUDGET OVERVIEW
B-5
city. Carlsbad expects to receive approximately $1.1 million in transfer taxes for FY 2012-13,
which is a $136,000 increase over FY 2011-12. This is mainly due to the increase in the sale of
new homes as well as an increase in distressed home sales. Income from investments and
property includes interest earnings, as well as rental income from city-owned land and facilities.
The city is expected to earn about $1.4 million in interest on its General Fund investments for
Fiscal Year 2012-13 (a projected 1.7 percent yield on the city’s investment portfolio) as well an
additional $200,000 in interest earnings from a loan repayment from the former Redevelopment
Agency.
General Fund Revenues
Overall, as reflected in
the bar chart, General
Fund revenues are
expected to be up 1.2
percent from FY 2011-
12 estimates due to the
increase in sales and
transient occupancy
taxes. Although the
city experienced
revenue growth
between 9 and 17
percent in the late
1990’s, it was not
sustainable growth. Much of those increases were due to the opening of new hotels,
restaurants, retail centers, and new home development. As new development slows, it will be
increasingly more difficult to produce double-digit growth in revenues. Due to the slow pace of
the current economic recovery, limited growth of is anticipated in the next fiscal year and
beyond.
The City has a General Fund reserve policy that sets a minimum reserve of 30 percent of the
General Fund Operating Expenditures. In addition, the policy sets a target reserve of 40
percent to 50 percent of General Fund Operating Expenditures. The minimum reserve would
provide approximately three to four months of operating expenditures for unforeseen
emergencies. At the end of FY 2010-11, the unassigned General Fund balance was
approximately $57.5 million. At the end of FY 2011-12 the reserve is projected to be
approximately $59.1 million, or 51 percent, of the FY 2012-13 Budget. The reserve amount is
consistent with Council Policy 74: General Fund Reserve Guidelines.
Other Funds
Revenues from Special Revenue funds are expected to total $11.3 million in FY 2012-13, a
$700,000, or 5.8 percent, decrease from FY 2011-12. The types of programs supported within
Special Revenue funds are those funded by specific revenue streams such as:
Grants (Rental Assistance-Section 8 and Community Development Block Grants)
Special fees and assessments (Affordable Housing and Maintenance Assessment Districts)
Donations (Library, Cultural Arts, Recreation and Senior Donations)
0
20
40
60
80
100
120
140
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY2012e FY2013e
+15.2%-2.7% -3.4%-2.7% -0.1%
$ Millions +1.9%+1.3%
2012-13 OPERATING BUDGET OVERVIEW
B-6
Rental Assistance
51%
Affordable Housing
11%
Maintenance
Districts
25%
Donations and
Grants
9%
All Others
4%
SPECIAL REVENUE FUNDS
2012-13 PROJECTED REVENUES
The most noteworthy changes in the Special Revenue funds occurred in the Affordable Housing
Trust Fund, the Street Lighting Fund and the Rental Assistance Fund. Estimated revenues
decreased approximately $1 million, $241,000 and $130,000, respectively, from FY 2011-
12. During FY 2011-12, the city received approximately $1.4 million in one-time affordable
housing credits. In order to meet the inclusionary housing obligations for certain areas of the
city (e.g., the southeast and southwest quadrants), units related to developments such as Villa
Loma and Cassia Heights were made available as affordable housing credits for housing
developers to purchase. Due to the small size of certain projects and the difficulty in obtaining
financing, some developers/applicants have opted to purchase affordable housing credits
instead of constructing units.
During FY 2011-12, the city received approximately $205,000 in American Recovery and
Reinvestment Act (ARRA) funds from the California Energy Commission (low interest
loan). The city does not anticipate drawing down any additional loan funds in FY 2012-13.
These revenues are one-time monies which are being used towards the City’s street light retrofit
project. The street light retrofit project will replace the city’s high-pressure sodium vapor lights
with induction lights.
The Federal government is reducing the amount of reimbursements for administrative expenses
for their Section 8 Rental Assistance Program, which is reflected in the reduced estimated
revenues for the Rental Assistance Program in FY 2012-13.
Enterprise fund revenues for FY 2012-13 are projected at $58.6 million, an increase of $4.2
million, or 7.7 percent, over current year projections. The increase in revenues is primarily due
to the planned rate increases for Water and Wastewater funds. Enterprise funds are similar to a
business, in that rates are charged to support the operations that supply the service. Carlsbad
Enterprise funds include water and recycled water delivery, wastewater services, and solid
waste management.
The Water Enterprise Fund revenue is estimated at $43.2 million, an increase of $3.4 million, or
8.5 percent over the current year estimate. These revenues reflect $3.4 million in increased
sales revenue due to proposed rate increases. In December 2011, two year rate increases
2012-13 OPERATING BUDGET OVERVIEW
B-7
were approved by the Board of Directors of the Carlsbad Municipal Water District. The
maximum rate increase approved for January 1, 2013 is 10 percent. Anticipated increases paid
to the San Diego County Water Authority include an 11 percent increase to the wholesale
purchase cost of water (from $957 to $1,063 per acre foot, effective January 1, 2013), and an
8.5 percent increase in the fixed charges for water purchases (from $5.1 million to $5.6 million)
for FY 2012-13. In addition to paying for the wholesale and fixed water costs, the FY 2012-13
Operating Budget includes funding for replacement of Carlsbad’s water infrastructure, ongoing
meter replacements, and building a sufficient operating reserve.
Estimated revenues for Wastewater are $11.9 million, $610,000 over the current year
estimate. The revenue increase reflects proposed rate increases to fund the ongoing cost of
operations, maintenance, and funding for replacement of infrastructure, as well as providing a
sufficient operating reserve. In December 2011, two year rate increases were approved by the
Carlsbad City Council. The maximum rate increase approved for January 1, 2013 is 6 percent.
Internal Service funds show estimated revenues of $17.7 million for FY 2012-13, an increase
of about $1.8 million, or 11.3 percent, from FY 2011-12 projections. Internal Service funds
provide services within the City itself, and include programs such as the self-insurance funds for
Workers’ Compensation and General Liability (Risk Management), as well as Vehicle
Maintenance and Replacement, and Information Technology. Departments pay for services
provided by these funds; therefore, the rates charged for the services are based on the cost to
provide the service. The goal of the Internal Service funds is to match their budgeted expenses
with charges to the departments, after allowing for a certain level of reserves within the fund.
The most significant change occurred in the Self-Insured Benefits Fund. Included in the FY
2012-13 revenues is a $1.8 million transfer from the General Fund to be set aside to assist in
the stabilization of future CalPERS retirement costs.
The Redevelopment Obligation Retirement Fund (RORF) revenues are expected to total
$2.1 million in the upcoming year, a decrease of 32.3 percent, or $1 million, from the projections
from the previous year.
On June 29, 2011, California Governor Jerry Brown signed ABX1 26 to dissolve all
redevelopment agencies within the State of California. All agencies were subsequently
dissolved as of February 1, 2012, and a Successor Agency was designated to complete the
work of the Carlsbad Redevelopment Agency (RDA) and satisfy the financial obligations. A
Recognized Obligation Payment Schedule (ROPS) was prepared by the Successor Agency in
April 2012 which must ultimately be approved by the Oversight Board, the County of San Diego
and the State of California. The initial ROPS identified financial commitments of the former
RDA which will be paid from semi-annual tax increment revenue received by the Successor
Agency. Every six months a new ROPS must be prepared and approved by the Oversight
Board, the County of San Diego and the State of California in order to receive additional tax
increment. Due to the dissolving of the RDA, the RORF will only receive tax increment
revenues and interest earnings on any cash balances. Tax increment revenues are projected to
decrease due to the increase in County of San Diego administrative costs which are netted
against the tax increment revenues received by the Successor Agency.
2012-13 OPERATING BUDGET OVERVIEW
B-8
EXPENDITURES
The city’s Operating Budget for FY 2012-13 totals $202.7 million, which
represents an increase of about $8.9 million, or 4.6 percent, as compared to
the adopted FY 2011-12 Budget. The changes in each of the city’s programs
will be discussed below.
Budgetary Policies
The theme behind this year’s budget development was for the city to continue to provide the
very best services to the community while finding operating efficiencies and reducing costs
wherever possible. The goal was to achieve a balanced budget for the coming fiscal year while
still maintaining the city’s long-term financial health, ensuring that future costs can be met
without negatively impacting the services provided to the community. All known and ongoing
operating expenses were incorporated in the FY 2012-13 Operating Budget, as well as in the
long-term financial forecast. The FY 2012-13 Operating Budget also sets aside $1.8 million as
a transfer from the General Fund to the Self Insured Benefits Fund in order to address the
current unfunded pension liability as well as to help stabilize future pension costs.
Responsible management of the city’s resources includes maintaining a focus on a sustainable
future by ensuring the city remains in good financial health, as today’s decisions will impact
future spending levels. Although the city is entering the new fiscal year in a solid financial
position, future economic challenges remain. The following policies for FY 2012-13 were
established in line with conservative estimates for future revenue growth:
Continue to minimize service level impacts to our residents.
No increase in the number of positions and no growth in maintenance and operations,
unless required for new facilities.
No new programs unless required under a legal mandate.
Significant known personnel increases should be included in departmental budget
projections.
Personnel and operating reductions should be identified in order to offset known budget
increases.
Exercise prudence in budgeting. Consider cost containment measures and budget
discretionary items at minimum levels.
The city uses an “Expenditure Control Budget” (ECB) process in budgeting, where each
department is given a block appropriation containing sufficient funds to provide the current level
of services for the upcoming year. As a result of the economic recession, in both FY 2008-09
and FY 2009-10 block budgets were decreased in response to decreasing revenues. The city
realigned its organizational structure in FY 2010-11, allowing for increased efficiencies with
fewer resources, with overall operations costs remaining at FY 2009-10 levels. For both FY
2011-12 and FY 2012-13, in order to meet rising General Fund expenses, some positions were
eliminated, related service delivery was restructured, and departments were asked to identify
operational reductions to absorb necessary increases in their block budgets. No additional
appropriations are expected during the fiscal year, except in the case of a significant
unanticipated event. As in past years, amounts that are unspent at the end of the fiscal year will
be carried forward to the next year, or will increase the city’s reserves. At the end of FY 2011-
12, the amounts carried forward by each department will be capped at no more than 10 percent
of the previous year’s Adopted Budget.
2012-13 OPERATING BUDGET OVERVIEW
B-9
Budgeted Expenditures
Through the application of these guidelines and policies, the FY 2012-13 Operating Budget of
$202.7 million was developed.
Position Changes
A net decrease of 9.75 full-time positions is reflected in the FY 2012-13 Operating Budget, as
compared to the FY 2011-12 Adopted Budget. Total position decreases include the elimination
of 5.75 positions identified through expenditure reduction efforts, the elimination of two positions
as a result of losing redevelopment funding from the State of California, and the elimination of
three positions that had previously been unfunded, for a total of 10.75 position eliminations,
resulting in approximately $600,000 in total personnel savings citywide for the coming year.
These eliminations are partially offset by the addition of one full-time, limited term position for
facility management at the new Carlsbad Safety Training Center.
The FY 2012-13 Preliminary Operating Budget includes the elimination of the following 10.75
full-time positions:
1.0 Assistant Planner
1.0 Building Inspector II
1.0 Code Compliance Specialist II
1.0 Maintenance Aide
1.0 Meter Reader
1.0 Office Specialist II
1.0 Parks Maintenance Worker II
1.0 Planning Technician
0.25 Records Manager
1.0 Senior Building Inspector
1.5 Tree Trimmer II
The FY 2012-13 Preliminary Operating Budget includes the addition of the following full-time,
limited term position:
1.0 Safety Training Center Facility Manager
The net decrease in hourly staff totals 7.16 FTE. This includes decreases of 5.16 hourly FTE in
Parks and Recreation, 1.0 hourly FTE in Community and Economic Development, 1.0 hourly
FTE in Library and Arts, and 0.75 hourly FTE in Human Resources. These decreases are offset
by an increase of 0.75 hourly FTE in Property and Environmental Management for new facility
building maintenance and custodial services for the City of Carlsbad’s Safety Training Center.
These changes result in a city workforce of 674.50 full and three-quarter time employees, and
132.58 hourly, full-time equivalent positions.
New Facilities
The city has a number of major capital projects scheduled to be built over the next five years.
As the city completes these projects, the costs of maintaining and operating the facilities,
including additional personnel if necessary, are added to departmental operating budgets. The
grand opening of the City of Carlsbad’s Safety Training Center occurred in May 2012.
Additional funds for operating the facility have been incorporated in the FY 2012-13 Operating
Budget in the Property and Environmental Management Department. Additional staffing has
also been added to operate and maintain the facility, as mentioned in the position changes
noted above. Also, about $5,000 has been added to the Parks and Recreation Department
budget to fund a full year of landscape maintenance of the Madison Street expansion of Pine
Avenue Park, completed mid-year of FY 2011-12, and about $6,000 has been added to the
Transportation Department budget for technical support in FY 2012-13 for the completed
portions of the city’s traffic signal program.
2012-13 OPERATING BUDGET OVERVIEW
B-10
Budget by Fund Type
The table below shows the changes in the Operating Budget for FY 2012-13, as compared to
the Adopted Budget for FY 2011-12.
BUDGET BUDGET $%
FUND 2011-12 2012-13 CHANGE CHANGE
GENERAL FUND 111.8$ 115.1$ 3.3$ 3.0%
SPECIAL REVENUE 11.4 10.9 (0.5) -4.4%
ENTERPRISE 53.5 57.2 3.7 6.9%
INTERNAL SERVICE 15.3 18.1 2.8 18.3%
REDEV. OBLIG. RETIREMENT 1.8 1.4 (0.4) -22.2%
TOTAL 193.8$ 202.7$ 8.9$ 4.6%
BUDGET EXPENDITURE SUMMARY
BY FUND TYPE
(In Millions)
The General Fund contains most of the discretionary revenues that support basic core city
services. However, this should not diminish the importance of the other operating funds, as
they also contribute to the array of services available within Carlsbad. The remainder of this
section will provide more information about the budgeted expenditures by fund and program.
GENERAL FUND SUMMARY
BY EXPENDITURE TYPE
BUDGET BUDGET $%
2011-12 2012-13 CHANGE CHANGE
PERSONNEL 72.8$ 73.3$ 0.5$ 0.7%
MAINTENANCE & OPERATIONS 29.4 30.7 1.3 4.4%
CAPITAL OUTLAY 0.1 0.1 - 0.0%
TRANSFERS 9.5 11.0 1.5 15.8%
TOTAL 111.8$ 115.1$ 3.3$ 3.0%
(In Millions)
General Fund
The total Operating Budget for the General Fund for FY 2012-13 is $115.1 million, which is
three percent greater than the previous year’s Adopted Budget of $111.8 million. The total
increase is mainly attributable to a $1.3 million, or 4.4 percent, net increase in Maintenance and
Operations costs and a $1.5 million, or 15.8 percent, overall increase in transfers out of the
General Fund to other city funds, as can be seen in the table above. These changes are
discussed in more detail below.
Personnel costs make up approximately 64 percent of the General Fund budget so any
changes in these costs can have a significant effect on the total budget. The total personnel
budget for FY 2012-13 is $73.3 million, which is $500,000, or 0.7 percent, more than the
previous year’s total personnel budget of $72.8 million. The overall increase was due to several
factors, as discussed on the following page.
2012-13 OPERATING BUDGET OVERVIEW
B-11
GENERAL FUND
PERSONNEL COSTS
(In Millions)
BUDGET BUDGET $%
2011-12 2012-13 CHANGE CHANGE
SALARIES 50.3$ 51.0$ 0.7$ 1.4%
RETIREMENT 13.6 13.1 (0.5)-3.7%
HEALTH INSURANCE 6.5 6.7 0.2 3.1%
WORKERS COMP 1.3 1.4 0.1 7.7%
OTHER PERSONNEL 1.1 1.1 0.0 0.0%
TOTAL 72.8$ 73.3$ 0.5$ 0.7%
The table above shows the breakdown of personnel costs for the General Fund. Overall, total
personnel costs are projected at $73.3 million, an increase of about $500,000, or 0.7 percent,
for FY 2012-13 as compared to FY 2011-12.
Salaries include full and part-time staff costs and are expected to increase in FY 2012-13 by
$700,000, or 1.4 percent. The increase is mainly due to previously negotiated wage increases
scheduled to occur in FY 2012-13, as well as the addition of staff to operate and maintain the
new Carlsbad Safety Training Center. Total wage and staffing increases were somewhat offset
by the elimination of 10.75 full-time positions citywide as part of the city’s efforts to reduce costs
in FY 2012-13.
Retirement rates, as projected by CalPERS, will increase in FY 2012-13 by about 0.73 percent
of salary for General and Management employees, representing a 3.25 percent increase, and
by about 1.13 percent of salary for Safety employees, representing a 3.5 percent increase.
These rate increases for the city were offset by retirement cost decreases due to prior year
General, Management and Safety employee labor negotiations, and due to decreases from
position eliminations, resulting in an overall decrease of $500,000, or 3.7 percent, in total
retirement costs. In addition to the retirement costs noted here, an additional $1.8 million has
been budgeted as a transfer to the City’s Self-Insured Benefits Fund as a set aside to help
address anticipated future pension rate increases from CalPERS.
Health insurance rates are projected to increase by about 5 percent in January 2013, while
Worker’s Compensation rates are projected to increase by about 3 percent for the fiscal year.
These increased costs are partially offset by decreases due to a reduction in the overall number
of city personnel, resulting in only slight increases in both areas for the coming year.
Miscellaneous other personnel costs are projected to remain flat for FY 2012-13, with small
increases offset by the overall personnel decreases previously mentioned.
Maintenance & Operations costs (or M&O) represent about 27 percent of the total General
Fund budget, and include the budgets for all program expenses other than personnel, capital
outlay and transfers. Overall, total M&O costs are projected at $30.7 million, an increase of
about $1.3 million, or 4.4 percent, for FY 2012-13 as compared to FY 2011-12. Maintenance
and Operations costs are discussed more fully by program later in the report.
2012-13 OPERATING BUDGET OVERVIEW
B-12
Capital Outlay includes budgeted equipment purchases over $1,000. One major capital outlay
purchase is planned in the General Fund for FY 2012-13, namely $110,000 for the replacement
of three portable EKG monitors for the Fire Department’s emergency medical services team.
This is in addition to the three EKG monitors that were budgeted in the FY 2011-12 Operating
Budget.
Transfers are amounts anticipated to be transferred from the General Fund to another city fund.
The transfers included in this year’s Operating Budget are to the following funds:
$7.5 million to the Infrastructure Replacement Fund for major maintenance and
replacement of city infrastructure. This represents 6.5 percent of the General Fund
Revenues, the same as the percentage transfer for FY 2011-12.
$210,000 to the Storm Water Program for reimbursement for the General Fund portion
of Storm Water expenses.
$527,746 to the Median Maintenance and Street Tree Maintenance Special Revenue
Funds to cover cash shortfalls, as annual assessments collected from property owners
do not cover annual operating expenditures.
$945,000 to the city’s municipal golf course for debt service. The budget and financial
reports for The Crossings Golf Course are on a calendar year basis. In December 2011,
the Carlsbad Public Financing Authority approved The Crossings Golf Course Budget for
calendar year 2012, including this transfer for debt service funding from the General
Fund. At that time, there was no anticipated need for a golf course operations transfer
from the General Fund for Calendar Year 2012.
$1.8 million to the City’s Self-Insured Benefits Fund as a set aside to address anticipated
future pension rate increases from CalPERS.
Advances are amounts anticipated to be transferred from the General Fund to another city
funds and are expected to be repaid to the General Fund in future years. No General Fund
advances are included in this year’s Operating Budget.
Another way of looking at the General Fund budget is by program. The chart on the following
page compares the total FY 2012-13 Budget to the amounts adopted in the previous year. A
brief description of each department and its services and a summary of significant department
budget changes in the FY 2012-13 Operating Budget, are noted below the chart.
2012-13 OPERATING BUDGET OVERVIEW
B-13
GENERAL FUND EXPENDITURES
BY DEPARTMENT
(In Millions)
BUDGET BUDGET $%
DEPARTMENT 2011-12 2012-13 CHANGE CHANGE
POLICY/LEADERSHIP 4.9$ 5.0$ 0.1$ 2.0%
COMMUNITY & ECONOMIC DEV 7.2 7.1 (0.1)-1.4%
FINANCE 3.4 3.5 0.1 2.9%
FIRE 16.9 17.5 0.6 3.6%
HOUSING & NGHBRHD SRVCS 0.6 0.6 0.0 0.0%
HUMAN RESOURCES 2.3 2.3 0.0 0.0%
LIBRARY & ARTS 10.4 10.3 (0.1) -1.0%
PARKS & RECREATION 13.1 12.7 (0.4) -3.1%
POLICE 28.1 27.9 (0.2) -0.7%
PROPERTY & ENVIRO MGT 4.7 5.1 0.4 8.5%
STORM DRAIN ENGINEERING 0.3 0.3 0.0 0.0%
TRANSPORTATION 8.9 8.9 0.0 0.0%
NON-DEPARTMENTAL 11.0 13.9 2.9 26.4%
TOTAL 111.8$ 115.1$ 3.3$ 3.0%
The Policy & Leadership Group consists of all elected officials, the City Manager’s
Office, the City Attorney’s Office, and communications and records management
functions. The $100,000, or 2 percent, net increase for FY 2012-13 is primarily due to an
increase in the City Clerk’s Office for increased election expenses anticipated in the
coming year.
The Community and Economic Development Department includes economic
development, planning, development services, building inspection, and land use
engineering. The decrease of about $100,000, or 1.4 percent, is mainly due to personnel
changes. The department eliminated one vacant full-time Building Inspector II position
and a net total of one hourly FTE position. Some of these savings were used to absorb
costs previously charged to the South Coastal Carlsbad Redevelopment Area, as well as
to fund increases in economic development activity. The department also eliminated two
additional positions that had been unfunded in a prior year.
The Finance Department provides the services of accounting, financial reporting,
capital and operating budgeting, payroll, billing and collections, citywide mail processing,
purchasing and receiving, fiscal oversight, and long-term financial planning for the city.
The increase of about $100,000, or 2.9 percent, is mainly due to personnel cost
increases, as well as an increase in ambulance billings.
The Carlsbad Fire Department provides emergency operations, emergency
preparedness, and fire prevention services to safeguard lives, property and the
environment in the City of Carlsbad. The FY 2012-13 increase of $600,000, or 3.6
percent, is primarily due to contractual wage increases approved in FY 2011-12, as well
as increases in public safety pension rates and health insurance rates. Increases were
slightly offset by $50,000 of budget reductions in overtime, training, travel and vehicle
costs for the department due to the opening of Carlsbad’s Safety Training Center.
2012-13 OPERATING BUDGET OVERVIEW
B-14
The Housing and Neighborhood Services Department includes the city’s
neighborhood services, code enforcement, hiring center and volunteer programs.
Budgeted expenditures for the department are expected to remain flat from FY 2011-12
to FY 2012-13. In the General Fund, the department is eliminating one vacant, full-time
Code Compliance Specialist that had been unfunded in the prior year.
The Human Resources Department supports the city with staffing and recruitment,
employee development, performance management, and compensation and labor
relations services. An increase in contractual services for staff training and development
is offset by a decrease of a 0.75 hourly FTE position. In total for the department, no
significant change is expected for FY 2012-13, as compared to the FY 2011-12 budget.
The Library and Arts Department provides staffing and a wide variety of programming
for two library branches, a library learning center, and a cultural arts office. The
department’s budget is projected to decrease by $100,000, or 1 percent, from FY 2011-
12 to FY 2012-13. This is partially due to the downgrading of two full-time positions and
the elimination of a net total of 1.0 hourly FTE position.
The Parks and Recreation Department plans, staffs
and maintains the city’s parks and recreational facilities,
provides an assortment of recreational programs for all
ages, maintains landscaping at facilities throughout the
city, and manages the city’s open space areas.
Overall, the department’s budget is decreasing by
$400,000, or 3.1 percent, from the prior year, largely
due to the elimination of 3.5 full-time and 0.16 hourly
FTE positions in parks and tree maintenance, due to the
modification of maintenance operations schedules in the
Parks division. In addition, a net total of 5 hourly FTE positions are being eliminated in
Recreation by altering service delivery methods and by coordinating duties between staff
in the Parks and Recreation divisions. These personnel decreases amounted to almost
$500,000 in savings for the department. Also, a decrease of $200,000 was made to the
budget for instructional classes to better reflect actual expenses incurred over the last
few years. These decreases were somewhat offset by a total $200,000 increase to the
budget for a comprehensive City Trails Master Plan update and for a needs assessment
study to address future park and recreation programming needs. In addition, the
department budget increased by about $100,000 due to the transfer of the Special
Events division from the Police Department, including one full-time position.
The Carlsbad Police Department provides high quality public safety services to the
community by enforcing laws and ordinances, preserving the peace, and providing for
the protection of life and property. Overall, the department’s costs are decreasing by
$200,000, or 0.7 percent, for FY 2012-13 as compared to FY 2011-12. Approximately
$100,000 of the decrease is due to the transfer of the Special Events division, including
one full-time position, to the Parks and Recreation Department. Also, in FY 2012-13, the
budget is being reduced by $250,000 for booking fees not anticipated to be charged by
the County and by another $150,000 in overtime, training, travel and vehicle costs due to
savings anticipated from the opening of the City of Carlsbad’s Safety Training Center.
These reductions are offset by previously approved contractual wage increases,
increases in public safety pension rates, health insurance rates, General Liability
insurance and Fleet Replacement costs.
2012-13 OPERATING BUDGET OVERVIEW
B-15
The Property and Environmental Management Department manages all city-owned
property, including real estate, buildings and vehicles. The department also manages
the city’s environmental programs, which include storm water, habitat and other
environmental maintenance and monitoring programs. The approximately $400,000, or
8.5 percent, increase from the prior year’s budget is primarily due to additional costs
associated with the opening of the City of Carlsbad’s Safety Training Center, including
the addition of one full-time and 0.75 hourly FTE positions.
The Utilities Department in the General Fund consists of Storm Drain Engineering
activities. No significant change is expected for FY 2012-13 as compared to the FY
2011-12 budget appropriation.
The Transportation Department manages all streets, traffic and other city-wide
transportation services, including city traffic engineering, traffic signal monitoring and
maintenance, and maintenance of all city streets and roadways. The department budget
is expected to remain relatively flat from FY 2011-12 to FY 2012-13.
Non-departmental expenses include the transfers previously discussed, the Council
Contingency account, and administrative and other expenses not associated with any
one department. The non-departmental budget is expected to increase by $2.9 million,
or 26.4 percent, in FY 2012-13. The increase is largely attributed to budgeting a $1.8
million transfer to the city’s Self Insured Benefits Fund to assist with anticipated future
pension rate increases.
The Council Contingency is a budgeted amount that is available to the City Council to
address unanticipated emergencies or unforeseen program needs during the fiscal year.
Prior to the economic recession, the Council Contingency budget provided between 2
and 2.5 percent of the General Fund Operating Budget for these unforeseen costs. The
Council Contingency was reduced significantly during the last three years to ensure a
balanced budget during the economic recession. For FY 2012-13, the Contingency is
budgeted at 1.3 percent of the General Fund Operating Budget, or $1.5 million, which is
a $1.0 million increase compared to the FY 2011-12 budget.
History of General Fund Adopted Budgeted Expenditures
As reflected in the chart to the left,
the city’s expenditures were
reduced significantly with the City
Council’s revised budget in FY
2008-09, reflecting a 3.3 percent
decrease from the FY 2007-08
Adopted Budget. A further 3.2
percent reduction was made in FY
2009-10 in order to reduce
expenditures in line with
continued General Fund revenue
declines. Expenditure projections
for FY 2010-11 remained
relatively flat, with growth of less than one percent, in anticipation of a flat economy. For FY
2011-12 General Fund expenditures showed a slight increase of 2.2 percent, supported by
projected revenue increases. For FY 2012-13 General Fund expenditures are expected to
increase by $3.3 million, or 3 percent, based on projections of continued economic growth.
100
105
110
115
120
FY 2007-08
$116.5m
FY 2008-09r
$112.7m
FY 2009-10
$109.1m
FY 2010-11
$109.4m
FY 2011-12
$111.8m
FY 2012-13
$115.1m
+9.5%
(3.3%)
(3.2%)
+2.2%
+3.0%
$ Millions
+0.3%
2012-13 OPERATING BUDGET OVERVIEW
B-16
Changes in Other Funds
Special Revenue funds, at $10.9 million, are down $500,000, or 4.4 percent, from the prior
year. This is mainly due to reduced funding for rental assistance and administration for the
federal Community Development Block Grant program.
Enterprise funds total $57.1 million, which is an increase of $3.6 million, or 6.7 percent, over
the FY 2011-12 Adopted Budget. The most significant change in Water Operations is due to the
increase in the cost of water purchased from the San Diego County Water Authority (11 percent
increase in fixed costs and a 8.5 percent increase in variable costs due to a proposed increase
from $957 to $1,063 per acre foot effective January 1, 2012). In addition, the cost of purchasing
recycled water is anticipated to increase up to 11.5 percent when compared to the Adopted
Budget for FY 2011-12. Carlsbad customers have decreased water consumption for several
years; however, in FY 2011-12 the quantities purchased began to level off and even increase
slightly. The quantities purchased are expected to stay the same in FY 2012-13 as in FY 2011-
12. The Operating Budget also includes additional funding for depreciation replacement
transfers related to growth and aging of the water infrastructure system.
Wastewater operations are projected to increase 2.1 percent, or $231,000, over the Adopted
Budget for FY 2011-12. The operating budget includes additional funding for depreciation
replacement transfers related to growth in the wastewater infrastructure system.
The Internal Service funds total $14.9 million, a decrease of $400,000, or 2.6 percent, from the
prior year. The Internal Service funds are self-supporting through user charges. Changes
occurred in a number of these funds, including the following:
The Workers Compensation Fund budget shows a decrease of approximately
$350,000, or 17.1 percent, based on lower claims projected for the fund, as compared to
the prior fiscal years.
The Self Insured Benefits budget shows a decrease of approximately $100,000, or 10
percent, based on a projected decrease in the city’s annual required contribution for
post-employment health benefits from the fund.
The Vehicle Replacement Fund budget varies from year to year depending on the
vehicles to be replaced. The budget for the fund is about $400,000 less than the
previous year, or a 25.8 percent decrease, due to fewer vehicles being due for
replacement than in the previous year. A list of the requested replacement vehicles can
be found at the end of this document.
The Information Technology Fund shows an increase in the department’s budget of
approximately $200,000, or 3.5 percent, from FY 2011-12 to FY 2012-13. This is mostly
due to more technology equipment being due for replacement than in the prior year.
The budgets for the Redevelopment Obligation Retirement Funds (RORF) budgets have
decreased by $400,000 or 22.2 percent, from the Redevelopment Agency Fund budgets shown
in the previous year. On June 29, 2011, California Governor Jerry Brown signed ABX1 26 to
dissolve all redevelopment agencies within the State of California. All agencies were
subsequently dissolved as of February 1, 2012, and a Successor Agency was designated to
complete the work of the Carlsbad Redevelopment Agency (RDA) and satisfy the financial
obligations. The FY 2012-13 Preliminary Operating Budget reflects the initial Recognized
Obligation Payment Schedule (ROPS) that was prepared by the Successor Agency in April
2012, but which must ultimately be approved by the Oversight Board, the County of San Diego
2012-13 OPERATING BUDGET OVERVIEW
B-17
and the State of California. The initial ROPS identified financial commitments of the former
RDA, including $250,000 in administrative costs, which will be paid from semi-annual tax
increment revenue received by the Successor Agency. Every six months a new ROPS must
be prepared and approved by the Oversight Board, the County of San Diego and the State of
California in order to receive additional tax increment. The city eliminated two full-time positions
as a result of the dissolution of the Carlsbad Redevelopment Agency.
SUMMARY
This Operating Budget for FY 2012-13 provides a balanced budget for the coming fiscal year
while continuing with a long-term plan to sustain a balanced budget in future years. Significant
ongoing operating expenses were identified and incorporated in the FY 2012-13 Operating
Budget to ensure the budget reflects the ongoing financial obligations of the city. The Carlsbad
economy is starting to improve, including new corporate headquarters and major hotel, retail
and commercial projects which will strengthen the local economy. In addition, revenues are
improving in the city, with continued gains seen in city sales and hotel tax revenues.
However, Carlsbad still faces economic challenges from a fluctuating economy, an unsteady
real estate market, continued commodity and utility cost increases, and concerns over the
impact that budget decisions at the state and federal levels could have on the city’s financial
situation. To meet these challenges, the city has initiated a program to evaluate all city
operations looking for opportunities to reduce costs through efficiencies, shared services or
contracting out services in some areas when that makes sense. The city has already seen
results from these efforts. As fixed costs like utilities, insurance, and supplies have increased,
departments have been able to reduce costs in other areas to maintain a balanced budget
without impacting services provided to the community.
The City of Carlsbad is entering the new fiscal year in a solid financial position and focused on
the future. Careful planning and responsible management have allowed the city to not only
maintain core services, but to also move ahead on community projects and other investments
that contribute to an excellent quality of life in our community. Promoting a strong local economy
and bringing more jobs to the city is a top priority. Due to continued fiscally conservative
practices, the city is in an excellent position to take advantage of new economic opportunities
that will allow our community to thrive now and for many years in the future.
CITY OF CARLSBAD
OPERATING FUNDS
REVENUE ESTIMATES
ACTUAL PROJECTED ESTIMATED AS %DIFFERENCE
REVENUE REVENUE REVENUE OF FY 11-12 2011-12 TO
REVENUE SOURCE 2010-11 2011-12 2012-13 PROJECTED 2012-13
GENERAL FUND
TAXES
PROPERTY TAX $48,409,518 $48,107,000 $47,805,000 -0.6%($302,000)
SALES TAX 26,386,132 27,561,000 28,782,000 4.4%1,221,000
TRANSIENT TAX 11,568,576 12,545,000 13,482,000 7.5%937,000
FRANCHISE TAX 4,649,535 4,785,000 4,883,000 2.1%98,000
BUSINESS LICENSE TAX 3,581,368 3,689,000 3,556,000 -3.6%(133,000)
TRANSFER TAX 910,976 950,000 1,086,000 14.3%136,000
TOTAL TAXES 95,506,105 97,637,000 99,594,000 2.0%1,957,000
INTERGOVERNMENTAL
VEHICLE LICENSE FEES 483,273 53,000 0 -100.0%(53,000)
HOMEOWNERS EXEMPTION 372,945 375,000 377,000 0.5%2,000
OTHER INTERGOVERNMENTAL 1,066,496 799,000 496,000 -37.9%(303,000)
TOTAL INTERGOVERNMENTAL 1,922,714 1,227,000 873,000 -28.9%(354,000)
LICENSES AND PERMITS
BUILDING PERMITS 767,581 665,000 596,000 -10.4%(69,000)
OTHER LICENSES & PERMITS 822,704 870,000 780,000 -10.3%(90,000)
TOTAL LICENSES & PERMITS 1,590,285 1,535,000 1,376,000 -10.4%(159,000)
CHARGES FOR SERVICES
PLANNING FEES 285,268 350,000 314,000 -10.3%(36,000)
BUILDING DEPT. FEES 681,264 628,000 563,000 -10.4%(65,000)
ENGINEERING FEES 668,756 640,000 573,000 -10.5%(67,000)
AMBULANCE FEES 2,471,422 2,525,000 2,581,000 2.2%56,000
RECREATION FEES 1,694,304 1,500,000 1,527,000 1.8%27,000
OTHER CHARGES OR FEES 660,770 673,000 685,000 1.8%12,000
TOTAL CHARGES FOR SERVICES 6,461,784 6,316,000 6,243,000 -1.2%(73,000)
FINES AND FORFEITURES 1,001,462 900,000 916,000 1.8%16,000
INCOME FROM INVESTMENTS
AND PROPERTY*2,219,842 2,321,000 2,574,000 10.9%253,000
INTERDEPARTMENTAL CHARGES 3,015,094 3,700,000 3,675,000 -0.7%(25,000)
OTHER REVENUE SOURCES 2,652,756 977,000 855,000 -12.5%(122,000)
TOTAL GENERAL FUND $114,370,042 $114,613,000 $116,106,000 1.3%$1,493,000
* INTEREST IS CALCULATED ON AN AMORTIZED COST BASIS
B-20
CITY OF CARLSBAD
OPERATING FUNDS
REVENUE ESTIMATES
ACTUAL PROJECTED ESTIMATED AS %DIFFERENCE
REVENUE REVENUE REVENUE OF FY 11-12 2011-12 TO
REVENUE SOURCE 2010-11 2011-12 2012-13 PROJECTED 2012-13
SPECIAL REVENUE FUNDS
AFFORDABLE HOUSING
AFFORDABLE HOUSING FEES $69,730 $1,720,000 $174,000 -89.9%($1,546,000)
FEDERAL GRANT 89,988 24,350 580,000 2281.9%555,650
STATE GRANT 1,000 0 980 0.0%980
INTEREST 199,045 60,000 260,000 333.3%200,000
OTHER 601,205 460,000 220,000 -52.2%(240,000)
TOTAL AFFORDABLE HOUSING 960,968 2,264,350 1,234,980 -45.5%(1,029,370)
BUENA VISTA CHANNEL MAINTENANCE
BUENA VISTA FEES 82,679 100,000 100,000 0.0%0
INTEREST 17,632 25,700 21,950 -14.6%(3,750)
TOTAL BUENA VISTA CHANNEL MAINTENANCE 100,311 125,700 121,950 -3.0%(3,750)
CITIZEN'S OPTION FOR PUBLIC SAFETY
STATE FUNDING (AB3229)104,732 83,000 110,388 33.0%27,388
INTEREST 6 1,000 0 -100.0%(1,000)
TOTAL CITIZENS OPTION FOR PUBLIC SAFETY 104,738 84,000 110,388 31.4%26,388
COMMUNITY ACTIVITY GRANTS
INTEREST 13,753 5,000 15,000 200.0%10,000
TOTAL COMMUNITY ACTIVITY GRANTS 13,753 5,000 15,000 200.0%10,000
COMMUNITY DEVELOPMENT BLOCK GRANT
FEDERAL GRANT 405,785 0 0 0.0%0
INTEREST 950,929 24,000 0 -100.0%(24,000)
OTHER 1,032,304 0 0 0.0%0
TOTAL COMMUNITY DEVELOPMENT BLOCK GRANT 2,389,018 24,000 0 -100.0%(24,000)
CULTURAL ARTS DONATIONS
DONATIONS 41,690 23,000 34,000 47.8%11,000
INTEREST 1,623 400 0 -100.0%(400)
OTHER 5,000 6,000 7,500 25.0%1,500
TOTAL CULTURAL ARTS DONATIONS 48,313 29,400 41,500 41.2%12,100
LIBRARY AND ARTS ENDOWMENT FUND
INTEREST 3,450 1,000 4,000 300.0%3,000
TOTAL LIBRARY AND ARTS ENDOWMENT FUND 3,450 1,000 4,000 300.0%3,000
LIBRARY GIFTS/BEQUESTS
GIFTS/BEQUESTS 195,312 128,600 120,000 -6.7%(8,600)
INTEREST 2,589 1,000 0 -100.0%(1,000)
TOTAL LIBRARY GIFTS/BEQUESTS 197,901 129,600 120,000 -7.4%(9,600)
LIGHTING AND LANDSCAPING DISTRICT NO. #2
LLD #2 FEES 415,424 412,500 489,632 18.7%77,132
INTEREST 16,118 20,000 28,399 42.0%8,399
TOTAL LIGHTING AND LANDSCAPING DIST. NO. #2 431,542 432,500 518,031 19.8%85,531
LOCAL CABLE INFRASTRUCTURE FUND
CABLE FEES 356,330 326,000 362,000 11.0%36,000
INTEREST 6,507 3,000 7,000 133.3%4,000
TOTAL LOCAL CABLE INFRASTRUCTURE FUND 362,837 329,000 369,000 12.2%40,000
MEDIAN MAINTENANCE
MEDIAN MAINTENANCE FEES 358,994 359,000 358,029 -0.3%(971)
INTEREST 148 0 0 0.0%0
OTHER 253,850 359,500 378,089 5.2%18,589
TOTAL MEDIAN MAINTENANCE 612,992 718,500 736,118 2.5%17,618
POLICE ASSET FORFEITURE
ASSET FORFEITURES 49,473 50,000 50,000 0.0%0
INTEREST 10,521 3,000 12,000 300.0%9,000
TOTAL POLICE ASSET FORFEITURE 59,994 53,000 62,000 17.0%9,000
POLICE GRANTS
FEDERAL GRANT 247,572 185,000 668,615 261.4%483,615
INTEREST (2,197) 0 0 0.0%0
TOTAL POLICE GRANTS 245,375 185,000 668,615 261.4%483,615
B-21
CITY OF CARLSBAD
OPERATING FUNDS
REVENUE ESTIMATES
ACTUAL PROJECTED ESTIMATED AS %DIFFERENCE
REVENUE REVENUE REVENUE OF FY 11-12 2011-12 TO
REVENUE SOURCE 2010-11 2011-12 2012-13 PROJECTED 2012-13
SPECIAL REVENUE FUNDS - CONTINUED
PUBLIC ART
INTEREST $2,182 $0 $0 0.0%$0
TOTAL PUBLIC ART 2,182 0 0 0.0%0
RECREATION DONATIONS
DONATIONS & GRANTS 65,385 30,200 20,750 -31.3%(9,450)
INTEREST 3,226 1,000 0 -100.0%(1,000)
TOTAL RECREATION DONATIONS 68,611 31,200 20,750 -33.5%(10,450)
RENTAL ASSISTANCE
FEDERAL GRANT 6,620,340 5,879,000 5,703,538 -3.0%(175,462)
INTEREST 20,440 3,000 16,704 456.8%13,704
OTHER 21,558 20,000 50,000 150.0%30,000
TOTAL RENTAL ASSISTANCE 6,662,338 5,902,000 5,770,242 -2.2%(131,758)
SENIOR DONATIONS
DONATIONS 12,956 8,000 8,000 0.0%0
INTEREST 2,632 1,000 2,000 100.0%1,000
OTHER 14,841 14,000 15,000 7.1%1,000
TOTAL SENIOR DONATIONS 30,429 23,000 25,000 8.7%2,000
STREET LIGHTING
GOVERNMENT GRANTS AND LOANS 581,412 204,500 0 -100.0%(204,500)
STREET LIGHTING FEES 732,058 879,200 730,557 -16.9%(148,643)
OTHER 283,357 28,000 141,387 405.0%113,387
INTEREST (1,696) 13,800 12,230 -11.4%(1,570)
TOTAL STREET LIGHTING 1,595,131 1,125,500 884,174 -21.4%(241,326)
STREET TREE MAINTENANCE
TREE MAINTENANCE FEES 466,663 465,000 461,493 -0.8%(3,507)
INTEREST 4,989 1,500 0 -100.0%(1,500)
OTHER 0 114,000 149,657 31.3%35,657
TOTAL STREET TREE MAINTENANCE 471,652 580,500 611,150 5.3%30,650
TOTAL SPECIAL REVENUE FUNDS $14,361,535 $12,043,250 $11,312,898 -6.1%($730,352)
B-22
CITY OF CARLSBAD
OPERATING FUNDS
REVENUE ESTIMATES
ACTUAL PROJECTED ESTIMATED AS %DIFFERENCE
REVENUE REVENUE REVENUE OF FY 11-12 2011-12 TO
REVENUE SOURCE 2010-11 2011-12 2012-13 PROJECTED 2012-13
ENTERPRISE FUNDS
WATER OPERATIONS
WATER SALES $18,160,522 $21,200,000 $23,300,000 9.9%$2,100,000
READY TO SERVE CHARGES 7,371,202 8,020,000 8,750,000 9.1%730,000
PROPERTY TAXES 2,755,099 2,930,000 2,930,000 0.0%0
NEW ACCOUNT CHARGES 123,440 100,000 100,000 0.0%0
BACK-FLOW PROGRAM FEES 120,051 125,000 125,000 0.0%0
PENALTY FEES 280,534 280,000 280,000 0.0%0
INTEREST (10,339) 2,800 1,000 -64.3%(1,800)
ENGINEERING OVERHEAD 90,732 80,000 80,000 0.0%0
SERVICE CONNECTION FEES 89,560 90,000 90,000 0.0%0
OTHER 3,386,098 244,000 245,800 0.7%1,800
TOTAL WATER OPERATIONS 32,366,899 33,071,800 35,901,800 8.6%2,830,000
RECYCLED WATER OPERATIONS
WATER SALES 4,038,481 4,912,000 5,404,000 10.0%492,000
READY-TO-SERVE CHARGE 525,300 575,000 625,000 8.7%50,000
RECYCLED WATER CREDITS 1,018,673 1,000,000 1,000,000 0.0%0
INTEREST 73,721 125,000 100,000 -20.0%(25,000)
OTHER 288,304 106,650 136,650 28.1%30,000
TOTAL RECYCLED WATER OPERATIONS 5,944,479 6,718,650 7,265,650 8.1%547,000
WASTEWATER OPERATIONS
SERVICE CHARGES 9,952,563 10,895,000 11,530,000 5.8%635,000
MISC SEWER 20,491 20,000 20,000 0.0%0
ENGINEERING OVERHEAD 185,353 185,000 175,000 -5.4%(10,000)
PENALTY FEES 79,510 90,000 80,000 -11.1%(10,000)
INTEREST 48,841 61,000 66,000 8.2%5,000
OTHER 237,374 80,000 70,000 -12.5%(10,000)
TOTAL WASTEWATER OPERATIONS 10,524,132 11,331,000 11,941,000 5.4%610,000
SOLID WASTE MANAGEMENT
INTEREST 127,950 163,000 160,000 -1.8%(3,000)
RECYCLING FEES (AB939)277,451 275,000 275,000 0.0%0
PENALTY FEES 54,286 53,000 53,000 0.0%0
TRASH SURCHARGE 2,683,658 2,600,000 2,700,000 3.9%100,000
OTHER 296,556 218,943 265,200 21.1%46,257
TOTAL SOLID WASTE MANAGEMENT 3,439,901 3,309,943 3,453,200 4.3%143,257
TOTAL ENTERPRISE FUNDS $52,275,411 $54,431,393 $58,561,650 7.6%$4,130,257
B-23
CITY OF CARLSBAD
OPERATING FUNDS
REVENUE ESTIMATES
ACTUAL PROJECTED ESTIMATED AS %DIFFERENCE
REVENUE REVENUE REVENUE OF FY 11-12 2011-12 TO
REVENUE SOURCE 2010-11 2011-12 2012-13 PROJECTED 2012-13
INTERNAL SERVICE FUNDS
WORKERS' COMPENSATION
INTERDEPARTMENTAL $1,327,400 $1,457,230 $1,500,830 3.0%$43,600
INTEREST 88,873 115,574 0 -100.0%(115,574)
OTHER 1,099,703 4,280 0 -100.0%(4,280)
TOTAL WORKERS' COMPENSATION 2,515,976 1,577,084 1,500,830 -4.8%(76,254)
RISK MANAGEMENT
INTERDEPARTMENTAL 1,563,720 1,656,970 1,858,560 12.2%201,590
INTEREST 8,985 0 0 0.0%0
OTHER 28,493 25,000 0 -100.0%(25,000)
TOTAL RISK MANAGEMENT 1,601,198 1,681,970 1,858,560 10.5%176,590
SELF-INSURED BENEFITS
INTERDEPARTMENTAL 799,077 832,878 874,522 5.0%41,644
OTHER 76,411 38,072 1,838,072 4727.9%1,800,000
TOTAL SELF-INSURED BENEFITS 875,488 870,950 2,712,594 211.5%1,841,644
VEHICLE MAINTENANCE
INTERDEPARTMENTAL 2,638,434 2,885,809 2,720,170 -5.7%(165,639)
INTEREST 3,078 6,369 0 -100.0%(6,369)
OTHER 30,272 19,637 32,000 63.0%12,363
TOTAL VEHICLE MAINTENANCE 2,671,784 2,911,815 2,752,170 -5.5%(159,645)
VEHICLE REPLACEMENT
INTERDEPARTMENTAL 2,167,436 1,862,321 1,820,012 -2.3%(42,309)
INTEREST 202,480 213,232 300,000 40.7%86,768
OTHER 45,691 3,494 0 -100.0%(3,494)
TOTAL VEHICLE REPLACEMENT 2,415,607 2,079,047 2,120,012 2.0%40,965
INFORMATION TECHNOLOGY
INTERDEPARTMENTAL 6,514,147 6,682,808 6,639,381 -0.7%(43,427)
INTEREST 58,255 15,000 68,000 353.3%53,000
OTHER 60,667 15,000 400 -97.3%(14,600)
TOTAL INFORMATION TECHNOLOGY 6,633,069 6,712,808 6,707,781 -0.1%(5,027)
TOTAL INTERNAL SERVICE FUNDS $16,713,122 $15,833,674 $17,651,947 11.5%$1,818,273
B-24
CITY OF CARLSBAD
OPERATING FUNDS
REVENUE ESTIMATES
ACTUAL PROJECTED ESTIMATED AS %DIFFERENCE
REVENUE REVENUE REVENUE OF FY 11-12 2011-12 TO
REVENUE SOURCE 2010-11 2011-12 2012-13 PROJECTED 2012-13
REDEVELOPMENT OBLIGATION RETIREMENT FUNDS
VILLAGE RDA OBLIGATION RETIREMENT FUND
RENTAL INCOME $14,862 $8,800 $0 -100.0%($8,800)
TAX INCREMENT 2,820,708 2,665,000 2,130,000 -20.1%(535,000)
INTEREST 40,155 10,000 15,000 50.0%5,000
OTHER 7,718 2,800 0 -100.0%(2,800)
TOTAL VILLAGE OPERATIONS / DEBT SERVICE 2,883,443 2,686,600 2,145,000 -20.2%(541,600)
VILLAGE LOW AND MODERATE INCOME HOUSING
TAX INCREMENT 705,177 399,680 0 -100.0%(399,680)
INTEREST 357,718 17,000 0 -100.0%(17,000)
OTHER 0 15,000 0 -100.0%(15,000)
TOTAL VILLAGE LOW AND MOD INCOME HOUSING 1,062,895 431,680 0 -100.0%(431,680)
SCC RDA OBLIGATION RETIREMENT FUND
INTEREST 96,129 15,000 0 -100.0%(15,000)
OTHER 0 3,300 0 -100.0%(3,300)
TOTAL SCCRDA OPERATIONS / DEBT SERVICE 96,129 18,300 0 -100.0%(18,300)
SCC LOW AND MODERATE INCOME HOUSING
INTEREST 3,380 1,000 0 -100.0%(1,000)
TOTAL SCCRDA LOW AND MOD INCOME HOUSING 3,380 1,000 0 -100.0%(1,000)
TOTAL REDEVELOPMENT FUNDS $4,045,847 $3,137,580 $2,145,000 -31.6%($992,580)
TOTAL OPERATING FUNDS $201,765,957 $200,058,897 $205,777,495 2.9%$5,718,598
B-25
Policy Ldrshp
Policy and Leadership Group
Policy Ldrshp
Policy and Leadership Group
C-1
PROGRAM: POLICY AND LEADERSHIP
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $3,861,613 $3,673,460 $3,694,798 $3,688,230
MAINTENANCE & OPERATIONS 1,305,760 1,474,534 1,536,004 1,618,321
CAPITAL OUTLAY 94,264 78,635 52,632 104,762
GRAND TOTAL $5,261,637 $5,226,629 $5,283,434 $5,411,313
FULL TIME POSITIONS 27.50 27.50 24.75 24.50
HOURLY/FTE POSITIONS 0.00 0.00 0.50 0.50
CITY COUNCIL
7%CITY CLERK
3%
TREASURER
4%
CITY MANAGER
28%
COMMUNICATIONS
20%
RECORDS
MANAGEMENT
15%
CITY ATTORNEY
25%
C-4
PROGRAM: CITY TREASURER
FUND: GENERAL
PROGRAM GROUP: CITY TREASURER ACCT NO. 0010310
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $105,520 $106,976 $109,511 $106,587
MAINTENANCE & OPERATIONS 84,375 74,286 88,411 88,225
CAPITAL OUTLAY 0 0 0 0
GRAND TOTAL $189,895 $181,262 $197,922 $194,812
FULL TIME POSITIONS 0.75 0.75 0.75 0.75
HOURLY/FTE POSITIONS 0.00 0.00 0.00 0.00
PROGRAM GROUP DESCRIPTION:
The Office of the City Treasurer is an elected position which has the mission of providing professional cash
management for the City of Carlsbad and all of its agencies including, among others, the Carlsbad Municipal Water
District and the Carlsbad Redevelopment Obligation Retirement Fund.
PROGRAM ACTIVITIES:
Cash Management
Develop projections of cash receipts and cash expenditures from various city and external sources.
Maintain records of cash receipts and cash disbursements into the Treasury.
Retrieve daily on-line bank statements and return check listing, verify receipt of anticipated deposits, ensure that
all checks paid by the bank were valid city checks.
Transfer cash daily into or out of the general checking account to ensure that appropriate balances are
maintained for the anticipated activity of the next day.
Execute all electronic wires of funds, ensuring that all are signed by authorized personnel and are supported by
proper documentation.
Develop contracts for cost-effective banking, both retail and custody services.
Arrange for lines of credit and short-term loans as needed.
Develop, maintain, and ensure compliance with all Treasury internal controls.
Investment Management
Develop and maintain the city’s Investment Policy and present annually, or as necessary, to the City Council for
approval. Incorporate in the Investment Policy any changes in the city’s financial requirements that affect
investments. Ensure compliance with the California Government Code.
Develop and maintain a pool of investments for the city and its agencies.
Research daily international and national financial markets and the financial forecasts.
Determine daily the type of investments that should be made, considering the current cash position and financial
markets. Determine the dollar amount of the investment and the desired maturity date.
Solicit telephone bids from approved financial institutions/brokers for available investments.
Evaluate investment alternatives and effect investment purchases. Prepare trade authorizations and arrange for
payment, delivery, and safekeeping of all purchases. Verify receipt and correctness of investments made.
Maintain record for all investments and investment income.
Reconcile the custodian’s monthly report of investments held with Treasury records.
Arrange for collateral contracts as required.
Implementation of changes as mandated by the Dodd-Frank Act.
C-5
PROGRAM: CITY TREASURER PAGE TWO
FUND: GENERAL
PROGRAM GROUP: CITY TREASURER ACCT NO. 0010310
PROGRAM ACTIVITIES (continued):
Reporting and Oversight
Develop and present to the City Council monthly reports of investment activities.
In a timely manner, disclose to the City Council any information that could potentially threaten the safety and
liquidity of the investment pool.
Develop and present to the City Council annual reports summarizing and analyzing the financial markets and the
portfolio performance for the past fiscal year. Compare the past fiscal year with the four preceding fiscal years to
provide perspective.
Develop investment data for the city’s Comprehensive Annual Financial Report.
Develop investment data for the city’s annual financial audit conducted by an independent auditor.
Develop agenda, convene, conduct, and record proceedings of the Investment Review Committee each quarter,
or more frequently as needed.
Meet frequently with Council and Leadership team to coordinate monetary policy with financial goals.
WORKLOAD STATISTICS:
(Est.)
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Portfolio Balance (millions of $)$556 $563 $570 $574 $601 $603
Investment Activity
Transactions 165 397 381 454 445 464
Average Buy (millions)$4.20 $1.91 $2.21 $2.29 $1.98 $2.98
181 percent increase in number of transactions between FY 2007 and FY 2012
KEY GOALS FOR 2012-13:
Financial Health
Anticipate and meet the changing investment needs of the city in order to optimize investment returns, consistent
with maintaining safety of principal, and ensuring sufficient liquidity.
Learning, Culture & Arts
Offer speaking engagements on city cash management and investments.
Further develop the Treasury page of the city’s website, informing the community of the mission of the Office of
the Treasury, the city’s Investment Policy, and investment activities. Use the website as a forum to receive and
respond to community comments and questions.
SIGNIFICANT CHANGES:
None
Internal Srvcs
Internal Services
Internal ServicesInternal Srvcs
D-1
PROGRAM: INTERNAL SERVICES
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $11,192,551 $11,459,089 $11,634,680 $14,906,974
MAINTENANCE & OPERATIONS 12,068,937 15,262,482 14,157,676 14,420,884
CAPITAL OUTLAY 1,930,337 1,426,045 2,162,186 1,965,581
GRAND TOTAL $25,191,825 $28,147,616 $27,954,542 $31,293,439
FULL TIME POSITIONS 107.25 103.60 101.60 102.55
HOURLY/FTE POSITIONS 4.84 5.34 5.34 5.34
FINANCE
19%
HUMAN
RESOURCES
26%
INFORMATION
TECHNOLOGY
21%
PROPERTY &
ENVIROMENTAL
MANAGEMENT
34%
D-2
PROGRAM: FINANCE
FUND: VARIOUS
PROGRAM GROUP: FINANCE SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $3,034,291 $3,123,498 $3,192,173 $3,295,080
MAINTENANCE & OPERATIONS 2,049,395 3,332,213 2,364,886 2,738,598
CAPITAL OUTLAY 2,724 1,731 0 0
GRAND TOTAL $5,086,410 $6,457,442 $5,557,059 $6,033,678
FULL TIME POSITIONS 31.00 30.50 30.50 30.50
HOURLY/FTE POSITIONS 1.00 1.00 1.00 1.00
FINANCE
72%
RISK MANAGEMENT
28%
D-13
PROGRAM: PROPERTY & ENVIRONMENTAL MANAGEMENT
FUND: VARIOUS
PROGRAM GROUP: PROPERTY & ENVIRONMENTAL MANAGEMENT
SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $4,322,105 $3,687,995 $3,871,993 $4,004,812
MAINTENANCE & OPERATIONS 3,830,465 4,560,021 5,167,049 5,391,302
CAPITAL OUTLAY 1,171,333 649,815 1,670,065 1,224,500
GRAND TOTAL $9,323,903 $8,897,831 $10,709,107 $10,620,614
FULL TIME POSITIONS 43.25 41.60 39.75 40.55
HOURLY/FTE POSITIONS 1.34 1.84 1.84 2.59
ADMINISTRATION,
MANAGEMENT &
MAINTENANCE
47%
SAFETY TRAINING
CENTER
4%
STORM WATER
PROTECTION
13%
VEHICLE
MAINTENANCE
27%
VEHICLE
REPLACEMENT
12%
Comm Dev
Community Development
Comm Dev
Community Development
E-1
PROGRAM: COMMUNITY DEVELOPMENT
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $7,453,173 $6,914,615 $7,168,923 $6,777,043
MAINTENANCE & OPERATIONS 12,996,704 10,981,903 10,113,562 9,620,003
CAPITAL OUTLAY 4,422,210 -33,248 0 0
GRAND TOTAL $24,872,087 $17,863,270 $17,282,485 $16,397,046
FULL TIME POSITIONS 67.00 65.00 63.00 57.00
HOURLY/FTE POSITIONS 3.14 3.64 3.64 2.64
COMMUNITY &
ECONOMIC
DEVELOPMENT
43%
HOUSING &
NEIGHBORHOOD
SERVICES
57%
E-2
PROGRAM: COMMUNITY & ECONOMIC DEVELOPMENT
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $6,202,085 $5,724,072 $5,874,489 $5,631,652
MAINTENANCE & OPERATIONS 3,151,609 2,105,146 1,477,327 1,429,960
CAPITAL OUTLAY 284 28,615 0 0
GRAND TOTAL $9,353,978 $7,857,833 $7,351,816 $7,061,612
FULL TIME POSITIONS 56.00 54.00 50.00 47.00
HOURLY/FTE POSITIONS 2.50 3.00 3.00 2.00
ADMINISTRATION
9%
LAND
DEVELOPMENT
ENGINEERING
24%
PLANNING
40%
BUILDING
INSPECTION
21%
Economic
Development
4%
E-13
PROGRAM: HOUSING & NEIGHBORHOOD SERVICES
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $1,251,088 $1,190,543 $1,294,434 $1,145,391
MAINTENANCE & OPERATIONS 9,845,095 8,876,757 8,636,235 8,190,043
CAPITAL OUTLAY 4,421,926 -61,863 0 0
GRAND TOTAL $15,518,109 $10,005,437 $9,930,669 $9,335,434
FULL TIME POSITIONS 11.00 11.00 13.00 10.00
HOURLY/FTE POSITIONS 0.64 0.64 0.64 0.64
NEIGHBORHOOD
SERVICES
6%
AFFORDABLE
HOUSING
6%
SECTION 8
66%
CDBG
6%
REDEVELOPMENT
15%
Comm Srvcs
Community Services
Comm Srvcs
Community Services
F-1
PROGRAM: COMMUNITY SERVICES
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $14,224,438 $14,422,982 $14,846,860 $14,473,086
MAINTENANCE & OPERATIONS 9,598,816 9,487,608 10,275,192 10,150,696
CAPITAL OUTLAY 94,917 125,532 0 0
GRAND TOTAL $23,918,171 $24,036,122 $25,122,052 $24,623,782
FULL TIME POSITIONS 125.95 124.20 122.20 119.65
HOURLY/FTE POSITIONS 124.26 124.26 124.26 118.10
LIBRARY & ARTS
42%
PARK & RECREATION
58%
Public Safety
Public Safety
Public Safety
Public Safety
G-1
PROGRAM: PUBLIC SAFETY
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $35,869,983 $35,443,397 $36,019,199 $36,886,194
MAINTENANCE & OPERATIONS 8,257,572 8,566,207 8,993,106 8,615,357
CAPITAL OUTLAY 541,909 229,874 184,723 122,775
GRAND TOTAL $44,669,464 $44,239,478 $45,197,028 $45,624,326
FULL TIME POSITIONS 250.75 250.75 249.75 248.75
HOURLY/FTE POSITIONS 4.00 4.00 4.00 4.00
FIRE
38%
POLICE
62%
Public Works
Public Works
Public Works
Public Works
H-1
PROGRAM: PUBLIC WORKS
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $12,027,292 $12,481,161 $13,246,125 $13,214,777
MAINTENANCE & OPERATIONS 45,860,152 44,455,197 49,529,093 53,106,005
CAPITAL OUTLAY 346,416 108,073 11,710 0
GRAND TOTAL $58,233,860 $57,044,431 $62,786,928 $66,320,782
FULL TIME POSITIONS 134.30 127.95 122.95 122.05
HOURLY/FTE POSITIONS 2.20 1.70 2.00 2.00
TRANSPORTATION
15%
UTILITIES
85%
H-2
PROGRAM: TRANSPORTATION
FUND: VARIOUS
PROGRAM GROUP: TRANSPORTATION SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $6,461,130 $5,503,828 $6,024,526 $5,918,342
MAINTENANCE & OPERATIONS 4,041,763 5,192,999 4,078,438 4,184,096
CAPITAL OUTLAY 22,745 75,510 0 0
GRAND TOTAL $10,525,638 $10,772,337 $10,102,964 $10,102,438
FULL TIME POSITIONS 62.35 58.40 54.40 54.40
HOURLY/FTE POSITIONS 2.00 1.00 1.00 1.00
ADMINISTRATION
49%
STORMWATER
INSPECTION
2%
STREET
MAINTENANCE
28%
TRAFFIC SIGNAL
MAINTENANCE
8%STREET LIGHTING
10%LIGHTING &
LANDSCAPING
DISTRICT NO. 2
2%
H-14
PROGRAM: UTILITIES
FUND: VARIOUS
PROGRAM GROUP: UTILITIES SUMMARY
2009-10
ACTUAL
2010-11
ACTUAL
2011-12
BUDGET
2012-13
BUDGET
PERSONNEL $5,566,162 $6,977,333 $7,221,599 $7,296,435
MAINTENANCE & OPERATIONS 41,818,389 39,262,198 45,450,655 48,921,909
CAPITAL OUTLAY 323,671 32,563 11,710 0
GRAND TOTAL $47,708,222 $46,272,094 $52,683,964 $56,218,344
FULL TIME POSITIONS 71.95 69.55 68.55 67.65
HOURLY/FTE POSITIONS 0.20 0.70 1.00 1.00
STORM DRAIN
ENGINEERING
1%
BV CHANNEL
MAINTENANCE
1%
WATER UTILITY
74%
WASTEWATER
UTILITY
19%
SOLID WASTE
1%
STORM DRAIN
MAINTENANCE
3%
Capital Improvement Program
Capital Improvement Program
Capital Improvement Program
Capital Improvement Program
Overview
Overview
Overview
Overview
2012-13 CAPITAL IMPROVEMENT PROGRAM
I-1
OVERVIEW
The City of Carlsbad Capital Improvement Program (CIP) is a planning document that outlines
the expenditure plan for future capital projects and the corresponding revenues to pay for those
expenditures. The CIP is a financial planning document, not a commitment for spending. All
construction costs are estimates and are reviewed and further refined each year. Spending
authorization is given only at the time the City Council formally adopts the proposed budget, and,
at that time, funds are only appropriated for the following fiscal year. Information is shown in
subsequent years to provide the most comprehensive overview of all the known future facilities
the City of Carlsbad plans to construct.
The Fiscal Year (FY) 2012-13 Capital Improvement Program outlines approximately $28.9 million
in new appropriations to provide additional funding for the continuation of existing projects as well
as funding for new projects. Projected revenues during the same fiscal year are estimated at
$35.5 million. Revenues are collected as building permits are issued; as the need for facilities
arises, the money is used to fund the new facilities. As the city continues to grow and develop,
there is a corresponding increase in the demand for development-related services and new
facilities. To ensure that the necessary infrastructure and facilities are built on a schedule that
meets or exceeds this demand, the citizens of Carlsbad adopted a Growth Management Plan in
1986. The Growth Management Plan states that unless a standard level of facilities is available to
meet new demands resulting from the city’s growth, development cannot proceed. This Plan is
the foundation for making decisions about the timing and prioritization of the capital projects
under consideration. A discussion of the city's Growth Management Plan is located at the end of
this report. The remainder of the report explains the process and the results of the city’s plan for
its capital facilities.
Proposition C was approved by the voters of Carlsbad in November 2002. It allowed the City to
expend over $1 million (per project) of city funds to help finance the following projects:
City/Safety Training Center
A portion of Cannon Road – East of College (Reach 4)
Trails and Open Space
A Swimming Pool Complex
After the voters approved the ballot initiative, the city set aside $35 million for Proposition C
projects. Currently, $16.2 million has been appropriated for Alga Norte Park, $13.7 million has
been appropriated for the Joint First Responders Training Facility, and $100,000 is allocated for
design of a City Administrative Training Facility. The balance of approximately $5 million has
been allocated to Trails and Open Space.
It is still anticipated that the city will continue to meet its growth management standards. This
reflects the Council’s continued commitment to construct the facilities as needed to serve the
current and anticipated development occurring throughout the city.
PROJECT EVALUATION
What is the definition of a CIP project? Projects that are shown in the CIP are generally defined
as any construction (or reconstruction/replacement) of major infrastructure such as streets,
libraries, parks, fire stations and administrative facilities, water, sewer and drainage facilities, and
other facilities that are located on or in the ground. In most cases, the total construction cost of
each of these assets is recorded and tracked as part of the City’s inventory of capital
infrastructure assets and other city-owned property.
2012-13 CAPITAL IMPROVEMENT PROGRAM
I-2
The CIP and the Operating Budget are integral
parts of the total city financing plan. Staff began
the process by evaluating the construction
schedules for city facilities in conjunction with the
workload of the staff needed to complete the
projects. Staff also met with the City Council to
identify their priorities. In the FY 2012-13 CIP,
there are approximately 265 continuing and new
projects planned in the next 15 years. All
projects were analyzed using the criteria shown
in the table. Project timing was reviewed, and an
evaluation of the availability of capital
construction funds as well as operating funds
was then factored into the evaluation process.
CAPITAL PROJECTS
The following two sections provide information about the major capital projects. The first section
focuses on projects planned in the next five years, and the second section contains an overview
of the entire expenditure plan through the FY 2026-27 (the next 15 years). All construction costs
are estimates and only funding for projects scheduled for FY 2012-13 is appropriated. The
information shown in the future years reflect the most comprehensive snapshot of the known
future facilities and their associated cost at this point in time.
THE NEXT FIVE YEARS
PARK PROJECTS
The city has planned a number of park projects over the next five years which will enhance the
recreational opportunities for Carlsbad’s residents and allow the city to meet the standards for
park acreage as set forth in the growth management plan. Some of the more significant projects
are listed below.
Alga Norte Community Park and Aquatic Center – The park site is located on 32 acres in the
Southeast Quadrant along Poinsettia Lane between El Camino Real and Alicante Road.
Amenities include:
A 56 meter Olympic sized competition pool with viewing bleachers
A 25 meter, 12 lane swim instruction pool
A 10 by 25 foot therapeutic pool with jets
A 22 foot diameter 6 inch deep kids pool
A “spray-ground” play area for young children
Three lighted softball/baseball fields
One lighted full basketball court and one half court
Batting cages and a concession stand at the ball fields
Picnic areas with barbecues
Playground with 100 percent universally accessible play equipment
An off-leash dog park divided into areas for larger and smaller dogs, including obstacle
course-type play equipment
An 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
Project Ranking Criteria
1. Is the project required to ensure the health
and safety of the citizens, as the result of a
legal mandate, or to maintain compliance
with the City’s Growth Management Plan?
Are operating funds available to operate the
facility?
2. Is the project needed soon for growth
management compliance?
3. Is the project needed now for other City
standards (example: ball field standards)?
4. Does the project complete or provide part of
the basic infrastructure (example: a linking
road segment)?
5. Are there other reasons to construct the
project (example: Council priority, timing or
funding opportunity, public demand)?
2012-13 CAPITAL IMPROVEMENT PROGRAM
I-3
The swimming pool complex was one of the projects approved by the voters through Proposition
C in 2002. Construction of Phase 1 is expected to begin in the summer of 2012, at a total
estimated cost of $40 million.
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 2014-15.
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 $8.6 million.
Maintenance and Operations Center – The city has planned the construction of a Maintenance
and Operations Center (M&O Center) to physically bring together the citywide maintenance
functions into a single facility. The M&O Center will be located on the available property adjacent
to the Fleet Maintenance/Public Safety Center. It is anticipated that the M&O Center will include
offices and support space, workshops, outside storage, warehouse space and parking to
accommodate the city’s maintenance personnel. This combined group of maintenance functions
may include segments of the Utilities, Transportation, Parks and Recreation, and Property and
Environmental Management departments. The cost of the project is approximately $28.1
million.
Facilities Maintenance – As the city facilities begin to age, maintenance and repair projects are
needed to keep them in good condition. Four projects have currently been identified at a total
cost of about $700,000. Included are roof renovation and replacement projects, City Hall
electrical upgrades, and exterior waterproofing at the Safety Center.
STREET PROJECTS
Traffic congestion continues to be one of the top concerns among citizens. To help improve the
flow of traffic throughout Carlsbad and to keep the city’s streets in top condition, there are a
number of street projects expected to be completed in the next five years. Some of the larger
street projects include:
Traffic Signal Program – In keeping with the City Council’s goal of improving
traffic flow, the FY 2012-13 CIP includes additional funding of $2.5 million for the
Traffic Signal Program. 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 encourages the use of street design to create a sense of
place and community through green spaces, medians and
signage, while encouraging a healthier, less vehicle dependent
2012-13 CAPITAL IMPROVEMENT PROGRAM
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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.
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 FY
2014-15. The CIP includes $5.4 million to fund this project in the next five years.
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. 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. The total estimated cost for
these projects is $19.7 million.
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 FY 2012-13 CIP has $3.7 million budgeted for this program.
Magnolia and Valley Sidewalk and Street Construction – Planned construction includes street
widening and sidewalk improvements along portions of Valley Street and Magnolia Avenue in the
vicinity of Carlsbad High School, Valley Middle School, and Magnolia Elementary School. The
total cost is estimated at $2 million.
WATER/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 additional funding, in excess of $67 million is
scheduled for these 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 $55.1 million, of which an estimated $17.3 million is to be
funded by the City of Carlsbad, with the remainder of $37.8 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:
Buena Interceptor Sewer Improvements
Foxes Landing Lift Station and Forcemain
Home Plant Lift Station Replacement and Forcemain
Terramar Sewer Replacement
Vancouver Sewer Extension
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Water/Recycled Water Lines
Major water/recycled water facilities scheduled for construction or replacement within the next five
years include:
College Boulevard – Cannon to Badger Lane
Maerkle Floating Cover Replacement and Pump Station Improvements
Robertson Ranch Water Transmission Main
Tri-Agencies Water Transmission Pipeline Replacement
Reservoir Repair/Maintenance Program
Recycled Water Service to South Carlsbad
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 $2.3 million programed.
CAPITAL PROJECTS THROUGH FISCAL YEAR 2026-27
The CIP for FY 2012-13 to FY 2026-27 outlines approximately 129 continuing projects and 136
future projects for a total of 265 projects at a cost of approximately $414.7 million as shown
below:
Project Type Percent Total Cost
Streets/Circulation 31% 127,786,201
Civic Projects 14% 59,869,011
Wastewater 18% 74,205,787
Parks 19% 77,935,602
Water 9% 38,830,200
Drainage 4% 16,447,965
Other (loans)5% 19,622,799
Total Future 100% 414,697,565
CIP Projects - All Future Project Costs
Park and recreational facility construction and acquisition projects total approximately $77.9
million, or 19 percent. During the next fiscal year, the Parks and Recreation Department is
planning to reevaluate the future park needs in all quadrants of the city. Current projects planned
are listed below, in addition to when the design and/or construction are expected to begin.
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PARK PROJECTS BY QUADRANT
Citywide Park and Recreational Project
Veteran’s Memorial Park: FY 2023-27
Business Park Recreational Facility: FY 2023-27
Northwest Quadrant
Pine Avenue Park Community Building: FY 2023-27
Northeast Quadrant
Robertson Ranch Park Site Development: FY 2023-27
Southwest Quadrant
Poinsettia Park Community Building: FY 2018-22
Aviara Community Facility: FY 2023-27
Southeast Quadrant
Alga Norte Community Park: FY 2012-13
Alga Norte Community Park Phase II: FY 2018-22
Leo Carrillo Park Phase III: FY 2016-17
Aviara Community Facility – Located in the southwest quadrant of the city, this project includes
the construction of an 18,000 square foot community facility that would include meeting and
activity rooms, as well as park offices.
Veterans Memorial Park – This project is located south and east
of Aqua Hedionda Lagoon adjacent to the city golf course, The
Crossings at Carlsbad. The Master Plan includes the following
improvements: community leisure needs, open space interpretive
area, parking and maintenance facility. Other suggested uses for
this park include an amphitheater complex, sports complex,
conference center and numerous other active/passive recreations
amenities.
Approximately 31 percent of future expenditures, or $127.8 million, are planned for street and
traffic signal construction projects. Projects include several road-widening projects, and funding
for sidewalk construction, concrete repair work and pavement management. Currently there are
16 traffic signals identified and recommended for construction in future years.
Wastewater projects are expected to cost over $74.2 million, or 18 percent, for repayment of
bonds for the expansion of the Encina Wastewater Facility, and the Encina Water Pollution
Control Facility projects, and numerous pipeline construction and rehabilitation projects.
Future water projects include construction of new waterlines, both potable and recycled,
concurrent with new development. Replacement of existing potable waterlines and reservoir
improvements are also included in this category. A total of $38.8 million, or 9 percent of the total
CIP, is planned for these projects.
Construction of civic facilities such as libraries, administrative facilities, police and fire facilities are
currently estimated at $59.9 million, or 14 percent of the total planned capital expenditures to
build out.
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OPERATING COST FOR FUTURE CAPITAL PROJECTS
In the next five years there are several capital construction projects which will require increases to
the City’s annual operating budget once they are completed and put in service. The table below
outlines the estimated net annual operating cost by year for those projects over the next five
years. These projected operating costs have been included in the city’s financial forecasts.
FY2013-14 FY2014-15 FY2015-16 FY2016-17 FY2017-18
Alga Norte Park 380,000$ 390,000$ 401,000$ 413,000$ 426,000$
Alga Norte Aquatic Complex 220,000$ 226,000$ 232,000$ 239,000$ 247,000$
Fire Station #3 (relocation)34,000$ 35,000$ 36,000$ 37,000$
Maintenance and Operations Center 404,000$ 415,000$ 427,000$ 441,000$
Poinsettia Park Phase 2 500,000$ 516,000$
Leo Carrillo Park Phase 3 150,000$ 155,000$
Annual Totals 600,000$ 1,054,000$ 1,083,000$ 1,765,000$ 1,822,000$
(*) The actual timing and cost will vary depending on construction schedules and operational requirements
Estimated (*) Annual Operating Cost
Major Capital Projects
UNFUNDED PROJECTS
There are several projects identified in the CIP for which there is no identifiable funding source
and, in some cases, where only partial funding has been identified. The City will investigate
obtaining possible outside funding such as Federal and State grants, loans, or other financing
sources. Once funding is identified for these projects, the project costs will have to be reviewed
and updated to reflect actual cost estimates. The unfunded projects do not receive annual
inflationary increases. These projects are:
Agua Hedionda Channel(partial)*
Business Park Recreational Facility (partial)
Cannon Lake Park
Cannon Road - Reach 4B – Cannon Rd./College Boulevard to City Limits
Carlsbad Boulevard Widening Mountain View to Northerly City Limits (partial)**
Carlsbad Boulevard/Palomar Airport Road Improvements (partial)**
Carlsbad Boulevard Realignment, Segments 3-5
Coastal Rail Trail Reach 1
Hosp Grove/Buena Vista Lagoon Improvements
Pine Avenue Park – Madison Property Phase 2
Robertson Ranch (NE Quadrant) Park Development (partial)
(*) The Agua Hedionda Channel project is funded in part with Planned Local Drainage Area
fees. The unfunded amount is listed in this section.
(**) These projects are in the Traffic Impact Fee (TIF) program approved by the City
Council on May 12, 2009, which was planned to generate enough revenue to pay for 20
percent of the total cost of these projects, the remaining 80 percent is unfunded.
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FUTURE GROWTH AND DEVELOPMENT
There are a variety of revenues that are used to fund the capital projects. In order to estimate
future revenues from development, several assumptions about the rate and type of future
development need to be made. These assumptions can change from year-to- year and correlate
with the economic climate.
Every year, city staff evaluates all existing and future private development projects and compares
this information to the capacity of the city using adopted general plans. Information about existing
development activity combined with estimates of how remaining net developable land might
develop is then summarized to prepare future projections about when and where residential and
non-residential development will occur. The following table shows the number of residential units
and non-residential square feet of development used in calculating estimated revenues for FY
2012-13 and subsequent years.
Year
Residential
Units
Non-Residential
Square Feet
2012-13 183 366,841
2013-14 169 130,067
2014-15 126 365,670
2015-16 223 232,972
2016-17 202 300,446
Years 2018-2022 1,027 2,655,977
Years 2023-2027 1,876 4,780,354
Totals 3,806 8,832,327
Projected Development
Residential and Nonresidential Construction
Finance Department staff prepares cash flow schedules using current fund balances combined
with future estimated fees paid by those developments, and compares the available funds to the
expenditure plan to ensure that funding will be sufficient for construction of the capital projects as
planned in the CIP. In addition to evaluating whether or not capital funds are sufficient, significant
operating cost impacts and availability of staff resources are also considered to evaluate the
timing of projects. Where funding discrepancies occur, alternative financing methods and project
timing are again evaluated and recommendations are made to resolve the discrepancies.
Residential development has slowed significantly due to the economic recession. The number of
annual building permits issued is projected to decline compared to the previous five-year period.
The development schedules of the remaining vacant parcels are driving the timing of the future
units. There are 3,806 units remaining before the city is predominantly built out.
Residential development for FY 2012-13 is projected at 183 units, and, over the next five years
will average 181 units annually. This is compared to an average of over 265 units per year for the
previous five-year period. The decline, particularly in the next five years, is expected to continue,
in part, due to the current economic downturn and also due to the decreasing supply of
developable land.
The amount of non-residential development is also projected to decline over the next five years.
The average annual square feet of non-residential development for the past five years was about
513,300 square feet.
For FY 2012-13, the estimate is for 367,000 square feet, and the average annual development for
the next five-year period is approximately 279,200 square feet per year. Projects include several
neighborhood commercial/retail developments located in or near the areas where most of the
2012-13 CAPITAL IMPROVEMENT PROGRAM
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residential development has occurred or where new development is planned over the next
several years. In the southeast quadrant, commercial projects include retail and restaurants, and
a daycare facility and church. A senior care facility is planned in the northeast quadrant.
Additional commercial development is planned at Bressi Village and a 250 room hotel at
Legoland is planned. Industrial development consists of various new office and industrial
projects. The desalination plant is also anticipated within the next five years. Development
estimates provide the data and basis for estimating future fee revenues, which are calculated by
multiplying each applicable development fee by the estimated number of dwelling units and/or
square feet of construction expected during each year.
REVENUES
Over the next 15 years, revenues for Capital Projects are an estimated $541 million and are
segregated into five major funding sources: (1) fees generated by development in Carlsbad, (2)
special district fees and taxes (Community Facilities Districts and Bridge and Thoroughfare
Benefit Districts), (3) water and wastewater replacement funds, (4) infrastructure replacement
funds (other than wastewater and water), and (5) other sources including grants, bond issues,
and contributions from other agencies.
Capital Improvement Program Revenues
FY2012-13 to FY2026-27
$541 million
Approximately 21 percent of all capital revenue is received as a result of development, and is
dependent upon assumptions made about the city's annual growth in dwelling units and
commercial/industrial square feet. Development revenues include Public Facilities Fees (PFF),
Traffic Impact Fees (TIF), Park-In-Lieu Fees (PIL), Planned Local Drainage (PLD) Fees, Water
Connection Fees (MFF), and Sewer Connection charges. Revenue from special districts, such
as Community Facilities Districts (CFD) and Bridge and Thoroughfare Benefit Districts (BTD)
comprise 6 percent of the total. Water and wastewater replacement revenues generated by user
fees equal approximately 29 percent of total revenues, and are used to pay for replacement of
existing water and sewer facilities. Infrastructure replacement revenues, equal to 24 percent, are
transfers from the city’s General Fund which are being set aside to pay for replacement of major
capital facilities other than wastewater and water facilities. The remaining 20 percent consists of
Developer Fees
21%
Financing
Districts
6%
Utility
Replacement
Transfers
29%
Infrastructure
Replacement
Transfers
24%
Other Agencies
20%
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revenues from other agencies and include federal and state grants, the county sales tax program
(TransNet), redevelopment agency revenue, and contributions from cities, developers, and other
agencies.
CALCULATION OF FUTURE FEES
The revenue projections in the Capital Improvement Program reflect the growth assumptions
identified in the previous section. The following information delineates how those assumptions
were applied to estimate future development revenues. The mix of multi-family and single-family
residential units is assumed to be 35 percent and 65 percent, respectively, and reflects the
anticipated mix of residential development for each Local Facilities Management Zone. The
building permit valuation used for computing Public Facilities Fees is $180,437 per multi-family
dwelling unit, and $319,912 per single-family dwelling unit. A building permit valuation of $42 per
square foot of construction is used to calculate non-residential Public Facilities Fees.
In order to calculate estimated revenues for Traffic Impact Fees (TIF), the number of average
daily trips was computed for each type of development use. An attached multi-family residential
dwelling unit is assigned either eight or six trips and a detached single-family unit is assigned 10
trips per day. The trips-per-day value for commercial and industrial buildings are 40 and eight
trips per 1,000 square feet of development, respectively, although the actual volume of trips
generated by commercial/industrial building can vary widely depending on the ultimate land use.
Community Facilities District (CFD) No. 1 is a citywide district established to finance various civic
facilities required under the city’s Growth Management Plan. CFD No. 3 was established for the
Faraday Avenue and Melrose Drive Extensions east of El Camino Real, as well as the extension
of El Fuerte.
Park-in-Lieu Fees are collected for the purchase and development of parkland within each
quadrant of the city, and the fees are based on the acquisition cost of parkland. Projects in the
CIP funded with Park-in-Lieu Fees include future park site acquisition, development and
restoration.
Bridge and Thoroughfare Fee Districts (BTD) are formed by property owners to finance specific
road construction projects located within the district boundaries. Poinsettia Lane - Aviara
Parkway (BTD No. 2) was formed to finance the construction of Poinsettia Lane between Aviara
Parkway and El Camino Real and Aviara Parkway between Palomar Airport Road and Poinsettia
Lane.
SUMMARY
The FY 2012-13 CIP is being driven by the city’s commitment to ensure that facilities are
available to serve the developing areas as well as the current residents. Carlsbad’s philosophy
has been to build quality capital facilities, which meet, and at times exceed, Growth Management
standards. Phasing projects over a period of years to match funding availability for construction
and operations is often used to meet the needs of growth management. The FY 2012-13 Capital
Improvement Program reflects the commitment of Carlsbad’s City Council and staff to continue
providing its residents with a better quality of life.
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GROWTH MANAGEMENT PLAN
The Growth Management Plan was developed and voted into law by the citizens of Carlsbad in
1986. The plan was established to manage development within the city by linking residential,
commercial, and industrial development directly to standards for availability of public services and
facilities.
The Growth Management Plan has established precise standards for eleven public facilities.
Standards must be met at all times as growth occurs. Facilities for which standards have been
established are as follows:
- City Administrative - Library
- Wastewater Treatment - Parks
- Circulation - Drainage
- Fire - Open Space
- Schools - Sewer Collection
- Water Distribution
The plan requires that appropriate public facilities be available, in conformance with the adopted
performance standards, as development occurs. Unless all of the 11 public facility standards
have been met, no new development can occur.
The Growth Management Plan impacts both the Operating Budget and the Capital Improvement
Program. The detailed level of planning required by Growth Management has allowed Carlsbad’s
Capital Improvement Program to anticipate the funding needed for capital improvements in the
next 15 years. The timing of construction of facilities is governed by the rate of development and
the 11 performance standards. New public facilities often require additional staffing and other
resources, which affects the Operating Budget. Facilities such as community centers, parks, and
fire stations have been constructed and opened to the public under this program.
The Capital Improvement Program has been designed to specifically address areas where new or
expanded facilities will be needed to maintain compliance with the adopted performance
standards. With the adoption of the FY 2012-13 CIP, compliance with the Growth Management
Plan is continued.
Schedule of Capital Projects Capital Proj
Schedule of Capital ProjectsCapital Proj
Fund Summary Fund Summary
Fund Summary
Fund Summary
Appendices
Appendices
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