HomeMy WebLinkAbout; ; 2016-2017 Operating Budget and CIP; 2016-06-302016/17CITY OF CARLSBAD
Operating Budget &
Capital Improvement Program
City of Carlsbad
2016-17 Operating Budget
and Capital Improvement Program
Mayor
Matt Hall
City Council
Keith Blackburn
Mark Packard
Lorraine Wood
Michael Schumacher
City Manager
Kevin Crawford
Assistant City Manager
Kathy Dodson
Prepared by the Administrative Services Department
Chuck McBride, Administrative Services Director
Helga Stover, Budget Manager
Website: www.carlsbadca.gov
READER’S GUIDE TO THE BUDGET
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This budget document has been designed to provide the public concise and readable
information about the City of Carlsbad’s 2016-17 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, debt management issues and the budget process.
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,
Administrative 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 2016-17 budget figures are presented. If applicable, narrative
statements are also included describing program activities, associated workload
measures or performance objectives, key achievements for 2015-16 and key goals for
2016-17.
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 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 2016-17 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 accounting systems and budgetary control,
the adopted Resolutions for the budget including the Gann Limit, a glossary, and a list of
acronyms.
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Fiscal Year 2016-17
City Council Goals
Become a leader in multimodal transportation
systems and creative approaches to moving
people and goods through and within Carlsbad.
The City Council expects Carlsbad to become a leader in the
broad array of plans and systems that support more efficient and
effective means of moving people and goods around and through
Carlsbad and the region, including technology that improves traffic signal coordination and
vehicle operation. Major regional projects, including the McClellan-Palomar Airport master
plan update, double tracking of the railroad, widening of I-5 and reconfiguration of the I-5/78
interchange, require continued policy-level involvement to ensure Carlsbad’s interests are
reflected in project design and implementation.
Plan for a new city hall that will meet the future
workplace and operational needs of the city and the
community.
Plan for a new city hall that will be a point of pride for citizens while
greatly improving efficiency and effectiveness by centralizing an
employee base that is currently spread through many facilities. A
strategic approach to locating city operational functions will provide
better coordination among city functions and enhanced customer service.
Promote education to increase civic engagement
and attract and retain talent in Carlsbad.
The City Council will take a stewardship role in encouraging the
development of high quality educational experiences that foster
economic development, civic engagement and community leadership.
This broad goal includes partnering with local school districts, working
to attract an institution of higher education, and cultivating a
community with life and workplace skills that will support Carlsbad’s vision for the future.
Enhance Carlsbad’s coastline to ensure an
exceptional experience in all the ways people want
to enjoy it.
The Carlsbad coastline is a critical element of the city’s identity. The
City Council is committed to making policy decisions to ensure
Carlsbad’s coastline maintains the character the community loves
while enhancing access, amenities and mobility to a level consistent with Carlsbad’s high-
quality community standards. This includes partnering with State Parks, which currently
controls most of Carlsbad’s beaches. This goal also includes physical changes that will enhance
natural beauty, better manage traffic flow, expand walking and biking opportunities, improve
safety and create a uniquely Carlsbad experience.
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Lower the railroad tracks in a trench through the
Village to improve safety, community connectivity,
quality of life and economic value.
The busy rail line that runs through the core of the community divides
Carlsbad. Railroad traffic, which will increase significantly in coming
years, has adverse effects on the City of Carlsbad, especially in the
area between the Agua Hedionda and Buena Vista lagoons. With the planned addition of a
second, parallel track through the Village and Barrio, the city has an opportunity to lower the
tracks below street level, similar to what has been done in other coastal communities.
Achieving this goal would improve safety and increase coastal access. Without this change, the
future quality of life and business climate in the Village would be irreparably harmed, the Barrio
would remain cut off from the coast, and public safety would be severely compromised.
Enhance the health and vitality of the Village and
Barrio, two neighborhoods that represent the historic
heart of Carlsbad.
The city has made significant investments in the revitalization of the
Village and Barrio, starting with “Redevelopment” and continuing with
public-private partnerships and city funded infrastructure
improvements. A new Village and Barrio Master Plan is nearing
completion, and achieving the vision developed with the community through the master
planning process will require continued policy focus and investment.
ABOUT THE CITY OF CARLSBAD
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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 90 percent developed and is
expected to grow from a population of
about 110,000 to 120,000 or more, once
its 39 square miles are built out. Industries
in the area include a major regional
shopping center; a specialty outlet center;
39 hotels offering over 4,400 rooms and
over 1,000 vacation rentals 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 and cultural arts, 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 600 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.
ABOUT THE CITY OF CARLSBAD
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Demographic and Economic Data
When comparing the percentage age distribution of the City of Carlsbad’s population versus the
State of California and the United States, Carlsbad’s population has fewer people in the 0–40
age group, and a higher number of people in the 40+ age group.
Population Age Distribution
Source: US Census Bureau
Carlsbad’s mean household income are substantially higher than the nation, state, and county
income levels.
Source: US Census Bureau
ABOUT THE CITY OF CARLSBAD
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Source: State of California Employment Development Department and US Bureau
of Labor Statistics
Source: US Census Bureau
ABOUT THE CITY OF CARLSBAD
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Source: US Census Bureau
ELECTORATE
City Treasurer
5/13/16
KEY
Elected
Council Appointed
Council Appointed
Organization Chart
City Attorney
Celia Brewer
City CouncilCity Clerk
Community Services
Clay Phillips
Interim Assistant City
Manager
Arts
Commission
Beach
Preservation
Committee
Senior
Commission
Parks & Rec
Commission
Library Board
of
Trustees
HistoricPreservationCommission
Housing
Commission
Traffic Safety
Commission
Planning
Commission
Carlsbad Tourism
B.I.D. Advisory
Board
Carlsbad Golf
Lodging B.I.D.
Advisory Board
City Manager
Kevin Crawford
Special Projects
Gary BarberioAssistant City Manager
Administrative Services
Chuck McBride
Director
Public Safety
Neil Gallucci
Police ChiefMike Davis
Fire Chief
Assistant to the City Manager
Jason Haber
Community Outreach & Engagement
Kristina Ray
Public Works
Patrick Thomas
Director
Effective July 1, 2016
Community & Economic Development
Library & Cultural Arts
Parks & Recreation
Finance
Human Resources
Information Technology
Environmental Programs
General Services
Transportation Engineering
& Construction
Utilitiesviii
Overview
Overview
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CITY OF CARLSBAD BUDGET HIGHLIGHTS
FISCAL YEAR 2016-17
WHERE THE MONEY COMES FROM…
ESTIMATED REVENUES $302.8 MILLION
WHERE THE MONEY GOES…
ADOPTED BUDGET $314.6 MILLION
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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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 $250.1 million and is expected to generate $251.1 million
in revenues. The CIP contains the current year budget allocation of $64.5 million and outlines
approximately 235 continuing and future projects at a total cost of $463 million. Capital revenues
for Fiscal Year 2016-17 are estimated at $51.7 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 providing a broad overview of the services and projects planned for the 2016-17
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.
The Carlsbad City Council has set a vision to make Carlsbad a truly world class city by fulfilling
the core values outlined in the community’s vision of the future, with a particular emphasis in
several strategic areas of focus.
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.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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Walking, biking, public transportation and connectivity
Increase travel options through enhanced walking, bicycling and public transportation
systems. Enhance mobility through increased connectivity and intelligent transportation
management.
Sustainability
Build on the city’s sustainability initiatives to emerge as a leader in green development
and sustainability. Pursue public/private partnerships, particularly on sustainable water,
energy, recycling and foods.
History, the arts and cultural resources
Emphasize the arts by promoting a multitude of events and productions year round.
Cutting edge venues to host world class performances, and celebrate Carlsbad’s cultural
heritage in dedicated facilities and programs.
High quality education and community services
Support quality, comprehensive education and lifelong learning opportunities, provide
housing and community services for a changing population, and maintain a high standard
for citywide public safety.
Neighborhood revitalization, community design and livability
Revitalize neighborhoods and enhance citywide community design and livability. Promote
a greater mix of uses citywide, more activities along the coastline and link density to public
transportation. Revitalize the downtown Village as a community focal point and a unique
and memorable center for visitors, and rejuvenate the historic Barrio neighborhood.
In FY 2016-17, the city organization will continue to focus on achieving the nine core values that
make up the Carlsbad Community Vision, with an emphasis on six priority policy areas set by the
City Council at its annual planning workshop. These include: continuing improvements along city’s
coastline; enhancing the Village and Barrio areas; becoming a leader in multi-modal
transportation and traffic management; lowering the railroad tracks below street level in the Village
to improve safety and protect the local character; promoting lifelong learning through education
partnerships; and planning for a new City Hall that will meet the future workplace and operational
needs of the city and community.
The capital improvement and operating budgets will also enable the city to continue its excellent
level of service to the community by investing in core services such as infrastructure maintenance,
police and fire services, parks and open space management and economic development.
Carlsbad’s operating budget is a tool that guides the achievement of the 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.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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ECONOMIC PROFILE
The US economy is weathering the effects of stock market volatility, stagnation overseas (read
Europe and Japan, inordinately low oil prices, and the economic slowdown in China). The city
appears to be following a familiar trend – slow growth in the fourth quarter followed by even slower
growth in the first quarter. GDP grew a mere 0.5 percent in the first quarter of 2016, following 1.4
percent growth in GDP in the last quarter of 2015. The Bureau of Economic Analysis (BEA) cites
a decrease in spending by the federal government and by private businesses for inventories, as
well as an increase in imports, which negatively affects GDP. The unemployment rate for April
was 5 percent, compared to 5.5 percent last year, although the number of unemployed persons
remains around 7.9 million, which has shown little movement since August 2015. Approximately
160,000 jobs were added in April, with the largest gains seen in professional and business
services, health care, and finance. The most recent UCLA Anderson Forecast, published in April,
has reduced its GDP growth projections from 3.3 percent to 2.7 percent for the coming year.
The US National Home Price Indices, prepared by S&P/Case-Shiller, shows an increase of 5.4
percent in February, compared to prices the previous year. David M. Blitzer, the Managing
Director and Chairman of the Index Committee at S&P Dow Jones Indices, says, “Home prices
continue to rise twice as fast as inflation, but the pace is easing off in the most recent numbers.”
Of cities included in the 20-City Composite Index, six experienced smaller month-over-month
gains in February, indicating some slowing in home price appreciation; San Diego was one of the
six. Mortgage rates remained below 4 percent, nationally in 2015, according to UCLA Anderson.
GDP is expected to remain below 3 percent through
2017. Recent increases in inflation will likely prompt
the Federal Reserve to continue raising the discount
rate, which will put upward pressure on mortgage and
consumer credit rates. Housing starts are expected
to return to 2007 level in 2017, and consumption is
expected to maintain a 3 percent growth rate.
However, exports continue to be hurt by a strong
dollar and weak overseas economies.
The California economy is expected to see modest
improvement over the next few years, with
unemployment hovering around the national average of 5 percent. The economic implications of
a recently proposed increase in the minimum wage, a plan that will step up the hourly wage
annually until it reaches $15 in 2022, remain to be seen. Personal income will be benefited, but
the magnitude of impact on employment is unknown and will vary widely by industry. Economists
at UCLA expect real personal income in the state to exceed 3 percent for 2016 and 2017, and
payrolls are expected to grow modestly over the same two years.
Taxable sales in California continue to be a bright spot and are expected to remain over 4 percent
for the next few years. Consumers are also being helped by low gas prices, which tumbled from
a peak of $4.66 per gallon in October 2012 to a low of $2.29 per gallon in February 2016,
according to data provided by Gas Buddy. The Southern California housing market is heating up,
as the median price of a home increased to $425,000 in March, an increase of 2.4 percent from
February, according to CoreLogic. This increase in the median price was accompanied by an 11
percent increase in home sales in March, which is encouraging, but the continuing lack of
inventory may continue to put upward pressure on home prices. This increasing pressure on
housing stock may account for the almost 18 percent increase in residential building permits
statewide, predicted by the UCLA Anderson forecast for 2016. After 2016, this permit activity is
expect to stabilize at about 121,000 per year, following several years of volatility. According to
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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California Department of Finance data, permit activity fell from 213,000 units in 2004 to a low of
36,000 units in 2009.
The USD Index of Leading Economic Indicators was positive in February, and the trend appears
positive for San Diego County. One component of the index measures residential building
permits, which have increased every month since September, and added another 600 units in
February. The unemployment rate in the county reached 4.7 percent in February, down from 5.5
percent a year ago. The county also added 40,000 jobs, last year, although there was much
slower growth seen in professional, scientific, and technical sectors. According to SANDAG’s
Marnie Cox, many industries, including construction and manufacturing, are still at net losses
when measured from December 2007.
As mentioned previously, S&P Case-Shiller data indicates that San Diego home process slowed
its ascent in February, as the rate of growth was one-tenth of one percent, compared to a monthly
increase of one half percent in January. However, the year-over-year change was a healthy 6.4
percent, so a slowdown in appreciation may be expected. According to CoreLogic, the median
price of a home in San Diego County rose by 5 percent to $525,000 in March compared to the
previous year.
The chart below reflects the historical trend in USD’s Leading Economic Indicators. The index,
which measures local stock prices, help wanted advertising, and other pertinent metrics,
increased by 0.1 percent in February, and has remained in positive territory for four of the past
five months.
Carlsbad’s economy is tied
closely to that of the San Diego
region. For FY 2015-16, property
taxes increased by 4.7 percent
compared to the prior year, as
assessed values rose and units
were added to the base by new
construction. Transient Occupancy
Tax (TOT), a gauge of local
tourism activity, increased by
approximately 3 percent, as
occupancy and average daily rates
(ADR) continue to improve and the
city added some smaller hotels.
Sales tax revenues are projected
to end FY 2015-16 with an
increase of over 5 percent, as the
city sees continued strength in
auto sales, although growth in
sales tax will likely start to stabilize in the coming years. Overall, General Fund revenues are
projected to end the current fiscal year at $142 million, a decrease of less than one percent over
the previous year. For FY 2016-17, the city forecast growth to resume, as General Fund revenues
are expected to increase by almost 3 percent.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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Housing prices in Carlsbad are
following national, state and
regional trends. Data on single
family residence (SFR) sales from
CoreLogic indicates that the median
sales price increased to
approximately $827,000 in the first
quarter of 2016, an increase of
almost than 13 percent compared to
the same quarter in 2015.
According to Movoto, inventory of
units for sale has decreased by 30
percent in Carlsbad, from 370 units
in April 2015 to 259 units for sale,
this April. Total assessed property values in the city are $26.3 billion, an increase of almost 6
percent compared to the prior fiscal year (FY 2015-16). According to recent growth projections
prepared for the city, Carlsbad will add almost 1,700 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 315,000 square feet
per year over the next five fiscal years. Large industrial and commercial developments in the next
five years include a new LegoLand hotel, Carlsbad Oaks, and the expansion of the Viasat
campus. Commercial office space vacancy has witnessed a decline over the past several years,
falling from over 30 percent in the last quarter of 2009 to just under 15.7 percent in the first quarter
of 2015. Industrial vacancy remains at 10.6 percent and retail vacancy for the first quarter of 2016
was 4.8 percent, according to data from CoStar.
Commercial development has brought much needed entertainment and shopping venues to
citizens and visitors alike, as well as generating additional sales tax 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 opened in fall 2013, and La Costa Town Square opened in FY
2014-15.
Development has also enhanced Carlsbad’s reputation as a destination resort for tourism. The
city is host to a major family theme park, LegoLand, and has two luxury resorts available for its
visitors, the Park Hyatt at Aviara and the La Costa Resort & Spa. There are also a number of
other quality hotels and motels in the city, with the most recent additions being the Hilton
Oceanfront Resort & Spa (recently renamed Cape Rey Carlsbad, a Hilton Resort) and the
LegoLand California Resort.
The City of Carlsbad opened a municipal golf course in the summer of 2007 which has further
enhanced the tourism attractions the city offers. The municipal golf course, The Crossings at
Carlsbad, is an 18-hole, destination golf course set in the rolling hills and canyons of Carlsbad.
With ocean views, high quality golf experience, a first class restaurant and clubhouse, and
linkages to hiking trails, The Crossings at Carlsbad is a destination spot for golfers and non-golfers
alike.
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
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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 capital and operating needs. With a growing city such as Carlsbad, it is imperative that
the city plan for the impacts of the economy, serving new development and operating new public
facilities, and plan 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 remain stable, 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 residents. In FY 2016-17, the city is expected to generate $114
million, or almost 80 percent of General Fund revenues, from three main sources: property taxes,
sales taxes, and transient occupancy taxes (TOT).
Overall, for FY 2015-16, General Fund revenue is projected to increase by 2.9 percent from the
previous year’s estimates. Most major sources of tax revenue are expected to increase slightly
in FY 2016-17, including property tax (4 percent increase), which is stabilizing following a year
that saw growth of almost 5 percent. Sales tax is showing a slight decrease (2.4 percent) due to
the timing of the final triple flip payment in FY 2015-16, and TOT revenues are projected to
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increase by almost 3 percent as occupancy and average daily rates (ADR) increase. The forecast
assumes no additions to room inventory in FY 2016-17. Property values continue to appreciate,
however, following the national, state, and regional trends, but growth rates are leveling off.
Development related revenues are forecast to increase by over 30 percent in FY 2016-17,
compared to the previous year, as some major residential projects are expected to commence
earlier than previously anticipated.
State of California – In January, Governor Jerry Brown submitted a balanced budget
to the California legislature. Revenues provided by Proposition 30, which temporarily
increases income tax rates and sales tax rates, are helping to brace the budget, as is
the seven-year long economic expansion. The state’s budget could be easily
unbalanced by even a minor economic recession.
The proposed budget for FY 2016-17 uses $125.8 billion to cover $122.6 billion in expenditures
and leaves $8 billion, or approximately 6 percent of revenues, for a “rainy day” fund. The passage
of Proposition 2 in 2014 set a constitutional goal of 10 percent of tax revenues to be set aside for
economic downturns in order to mitigate the highly volatile revenue received by the state of
California. Almost 68 percent of General Fund revenues come from personal income tax, and
this source of revenues includes highly volatile capital gains receipts. The state has taken some
measures to reform public employee pensions and restore solvency to the state’s teacher pension
system, but the Governor’s attention turns to the cost of retiree health care benefits in the
preliminary budget. The unfunded liability is currently $72 billion of retiree health benefits and is
projected to grow to $100 billion by Fiscal Year 2020-21, if no action is taken. The proposed
budget assumes that the state can successfully negotiate with bargaining units to have state
employees share in the cost of these benefits. The governor’s budget acknowledges that a
recession could cause a loss in revenues of $55 billion, which would cause a deficit even with the
“rainy day” fund in place.
The governor’s proposed budget also acknowledges the state of California’s infrastructure,
estimating the state has $77 billion in deferred maintenance. The plan submitted would provide
$36 billion over the next decade to address highways and roads and improve public transit. The
other challenge to the state’s fiscal resources is the proposal to raise the minimum wage to $15
per hour. This proposal, raising the minimum wage incrementally over several years, would have
an estimated effect of $4 billion to California’s General Fund by 2021. This, coupled with other
challenges to the budget, could easily upset the precariously balanced budget.
Looking Forward
In order to strategically address the future needs of the city and to ensure that the city maintains
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, with an economic climate that changes rapidly and
unpredictably. 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 fiscal challenges are
identified and resolved, and to ensure the continued of development or a balanced and
responsible budget.
During the Great Recession, the city took deliberate actions to ensure that the budget remained
structurally balanced. 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 priority projects, reducing and/or eliminating cost of living salary
increases, requiring employees to pay a larger portion of their retirement costs, using technology
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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and other tools to create efficiencies, and reducing certain non-essential service levels with a
minimal impact to the community. The ten-year forecast offers a more optimistic and stable
picture for the next few years, and city leadership is beginning to address service areas that need
available resources.
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.
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 cease in FY 2016-17, as existing construction debt is assumed to be paid off in
2016 under the proposed budget. The operating costs of new city facilities projected in the Capital
Improvement Program and supported by the General Fund, such as Alga Norte Park, are also
captured in the forecast. Economic conditions at the national, state, and local level are expected
to continue to improve at a modest rate and to provide a boost to most of the major revenue
sources. Home prices, which saw large decreases during the recession, continue to recover and
are providing support to city’s property tax revenues in the following years, although the levels of
growth over the past two years are starting to temper. Overall, the outlook for General Fund
revenues continues to be positive and revenues are expected to exceed ongoing operating costs
over the period of the forecast.
The forecast assumes that General Fund revenues will increase by 2.9 percent in FY 2016-17,
as economic conditions continue to improve, bolstering revenues from the property 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 forecast also captures
increases in operating costs associated with planned capital improvements, such as future parks
and civic facilities.
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The forecast assumes that the city’s cost for employee health care will increase by slightly more
than five percent, annually, over the life of the forecast. Pension plan costs continue to be a major
driver of overall personnel costs for the city. CalPERS, the pension plan which funds city
employee pension benefits, has recently decided to substantially increase required annual
pension contributions from participating agencies in order to fully fund outstanding pension
obligations within 30 years. This decision, coupled with new mortality assumptions (pensioners
are living longer), will substantially increase personnel costs for the city and are contemplated in
the current ten-year forecast. The cumulative effect of the five year ramp-up in pension costs will
increase the General Fund’s annual contribution by 35 percent from FY 2015-16 to FY 2019-20,
after which costs stabilize and may even decrease. The forecast further assumes that no new
positions are authorized after FY 2015-16, except those that may be related to the operating costs
of new city facilities supported by the General Fund. Negotiated salary step increases and cost
of living increases are included in personnel costs, in order to provide a conservative estimate of
future costs. The contribution from the General Fund to the Infrastructure Replacement Fund is
forecasted to remain at 6.5 percent of General Fund revenues. Finally, the forecast includes
estimated operating costs for all capital projects in the timeframes shown in the Capital
Improvement Program (CIP).
As indicated in the graph on the previous page, the General Fund is balanced for FY 2016-17 and
revenues exceed expenses over the life of the forecast. Although the revenue forecast is
optimistic, Carlsbad faces the same challenges that plague the national and state finances,
including pension costs that are more volatile and the overall health of the economy. Despite
these threats, responsible fiduciary stewardship and planning have placed the city in a position to
benefit from even modest improvements in the economic environment.
(In millions)
2016-17 2017-18 2018-19 2018-19 2019-20
REVENUES
Property Tax 59.2$ 61.5$ 63.5$ 65.3$ 67.1$
Sales Tax 34.1 35.1 36.5 38.1 39.7
Transient Occupancy Tax 20.8 21.6 23.4 25.3 26.5
Franchise Taxes 5.7 5.7 5.8 5.8 5.8
Business License Tax 4.5 4.7 4.8 5.0 5.1
Development Revenues 4.2 3.1 1.6 1.6 1.3
All Other Revenues 17.6 17.8 18.3 19.1 19.4
Total 146.2$ 149.5$ 153.9$ 160.2$ 165.0$
EXPENDITURES
Personnel 87.6$ 91.2$ 95.3$ 99.5$ 102.4$
Maintenance & Operations 40.7 40.8 42.2 43.9 46.0
Capital Outlay 0.3 0.4 0.5 0.5 0.5
Council Contingency 1.5 1.5 1.5 1.5 1.5
Transfers 11.7 12.3 12.6 11.6 11.9
Total 141.8$ 146.2$ 152.1$ 157.1$ 162.4$
SURPLUS/(DEFICIT)4.35$ 3.35$ 1.78$ 3.11$ 2.61$
GENERAL FUND FIVE YEAR FORECAST
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(In millions)
The Appropriations Limitation imposed by Proposition 4 and modified by Proposition 111 (Gann
Limit) creates a restriction on the amount of revenue which can be appropriated in any fiscal year.
The revenues which are subject to the limitation are those considered "proceeds of taxes." The
basis for calculating the limit began in Fiscal Year 1978-79 and is increased based on population
growth and inflation. Carlsbad’s appropriation limit is in excess of three times the annual
appropriation of proceeds of taxes subject to the limit. With such a large margin (approximately
$288 million), and in light of the city’s ten year financial forecast, there is no time in the foreseeable
future where Carlsbad’s annual appropriation of tax proceeds would approach the limit. It is
unlikely the Gann Limit will ever be reached in the future.
FINANCIAL POLICIES
The city has a number of financial policies to not only safeguard city assets, but also to assist in
ensuring long-term financial stability.
LONG RANGE FINANCIAL PLANNING POLICIES
PURPOSE:
Financial planning uses forecasts to provide insight into future financial capacity so that strategies
can be developed to achieve long-term sustainability in light of a government's service objectives
and financial challenges.
A sound financial planning process assesses the long-term financial implications of current and
future operating and capital budgets, providing decision-makers with the long-term fiscal impact
of current policies and budget decisions. A good forecast recognizes the effects of economic
cycles and differentiates between revenue associated with one-time activities and revenue
derived as a result of base economic growth.
BACKGROUND:
Long-term financial planning is a best practice approved by GFOA’s Executive Board. The best
practice concepts related to long-term financial planning are as follows:
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It allows the city to execute a long-range financial plan and supports the overall city strategic plan.
It is a highly collaborative process that considers future scenarios and helps governments
navigate challenges.
Financial forecasting is the process of projecting revenues and expenditures over a long-term
period, using assumptions about economic conditions, future spending scenarios, and other
salient variables.
Long-term financial planning is the process of aligning financial capacity with long-term service
objectives.
GFOA recommends that all governments regularly engage in long-term financial planning that
encompasses the following elements and essential steps:
Time Horizon. A plan should look at least five to ten years into the future. Governments
may elect to extend their planning horizon further if conditions warrant.
Scope. A plan should consider all appropriated funds, but especially those funds that are
used to account for the issues of top concern to elected officials and the community.
Frequency. Governments should update long-term planning activities as needed in order
to provide direction to the budget process, though not every element of the long-range
plan must be repeated.
Content. A plan should include an analysis of the financial environment, revenue and
expenditure forecasts, debt position and affordability analysis, strategies for achieving and
maintaining financial balance, and plan monitoring mechanisms, such as scorecard of key
indicators of financial health.
Visibility. The public and elected officials should be able to easily learn about the long-
term financial prospects of the government and strategies for financial balance. Hence,
governments should devise an effective means for communicating this information,
through either separate plan documents or by integrating it with existing communication
devices.
TEN-YEAR GENERAL FUND FINANCIAL FORECAST
The Administrative Services Department will prepare and maintain a ten-year financial
forecast of revenues and expenditures for the General Fund.
This tool will be used during the annual City Council goal setting and the development of
the annual operating and capital budgets.
The financial forecast will be updated at least twice each year, or more often if unexpected
changes in economic conditions or other unforeseen circumstances warrant more frequent
updates.
The plan will include impacts and timing of new facilities, programs, and mandates.
Any significant changes will be reported to the City Manager and City Council.
STRUCTURALLY BALANCED BUDGET
The city shall adopt an annual budget in which ongoing revenues equal or exceed ongoing
expenditures. If the long-range plan indicates periods where revenues may not equal or
exceed forecasted expenditures, options to correct the imbalance will presented for
consideration.
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Unexpected one-time revenues shall not be used to fund ongoing expenditures.
PLAN MONITORING: MONTHLY FINANCIAL STATUS REPORT
Each month after the close of the books, the Finance Director will prepare and distribute
a Financial Status Report. The report will include, at a minimum, the following sections:
General Fund Revenues – to provide information about the more significant General
Fund revenues, compared with the prior fiscal year, and compared with the current
fiscal year projections. Significant one-time and/or unplanned revenues are
discussed, as well as any other information considered helpful in understanding the
financial position of the General Fund.
General Fund Expenditures – to provide information about General Fund
expenditures, compared with the prior fiscal year, and compared with the current fiscal
year projections. Significant one-time occurrences are explained, as well as any
trends or other information considered helpful in understanding the financial position
of the General Fund and the operations of the city. A table of expenditures by
department is provided with a current year budget-to-actual comparison.
City Council Contingency – the annual adopted budget generally includes
authorization to appropriate funds (Council Contingency) to be used at the Council’s
discretion. Expenditures from this account are one-time expenditures and for items
expected to have a positive impact on the citizens and community of Carlsbad, such
as:
Special Events
Community projects
Donations (usually for non-profit groups/organizations)
Water and Wastewater Utility Operating Revenues and Expenditures – to provide
an overview of revenues and expenditures compared with prior year actuals and the
current year budgeted amounts. Since these are enterprise funds, operating
incomes/losses are discussed.
FIFTEEN-YEAR CAPITAL PROJECT FINANCIAL PLAN
The Administrative Services Department will prepare and maintain a fifteen-year financial
plan for capital project development and construction (this plan will include all funds that
have capital projects, such as the water and wastewater asset construction funds).
The financial plan is updated at a minimum each fiscal year, or more often if unexpected
changes in economic conditions or other unforeseen circumstances prompt more frequent
updates.
Annually in conjunction with the budget process, staff will review the proposed timing of
the projects in the plan to make sure that resources are available and that the timing is
appropriate.
Any significant changes are reported to the City Manager and City Council.
All known future revenues and expenditures are incorporated into the fifteen-year plan to
create cash flows, and any foreseen shortfalls are reviewed.
If there is not sufficient funding projected to pay for a planned project, the project is still
shown in the project schedule, in the “unfunded” section. Staff will pursue funding options
for the projects on the unfunded list.
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Operating impacts of completed capital construction facilities are incorporated into the
General Fund ten-year financial forecast or the long-range financial plan of the funds
affected, as soon as the timing is relatively certain.
TEN-YEAR WATER AND WASTEWATER OPERATING FUND FINANCIAL FORECAST
The Utilities Department and Administrative Services Department will jointly prepare and
maintain a ten-year financial forecast of revenues and expenditures for the Water
Operating Fund and the Wastewater Operating Fund.
The financial forecast will be updated at least once a year as part of the annual budget
process, or more often if unexpected changes in economic conditions or other unforeseen
circumstances warrant more frequent updates.
Utility rates and charges will be evaluated annually and increases (or decreases) will be
recommended in order to meet the long-range financial objectives of each utility.
Cost of Service study – The American Water Works Association (AWWA) recommends
that water utilities’ revenues from water service charges, user rates, and capital charges
(impact fees and system development charges) should be sufficient to pay for:
Annual operation and maintenance expenses
Capital costs including debt service and other capital outlays
Adequate working capital and required reserves
A periodic cost of service study ensures that sufficient revenues are generated for the
above expenses, and that rates and charges are equitably established. The Utilities
Department and Finance Department will conduct a Water/Wastewater Cost of Service
review at least once every five years or as necessary due to significant changes in system
costs and/or system operations.
Any significant changes will be reported to the City Manager and City Council.
OPERATING RESERVE POLICIES
PURPOSE:
To provide guidelines to the City Council and staff for establishing, maintaining and the annual
review of a minimum and target reserve level for the General Fund and proprietary funds listed
below.
BACKGROUND:
The city acts as a steward of public funds – one of the most significant responsibilities of the City
Council, Boards, and managers. Adequate reserves are a necessary component of the city’s
overall financial management strategy and can help offset current and future risks.
The establishment and adherence to fiscal reserve policies enables the city to:
protect the interest of the public and provide rate stabilization and funding, if needed
address short-term temporary unplanned losses (revenue and expenditure)
provide stability during economic cycles, allowing the organization to weather significant
economic downturns
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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address unfunded mandates
manage the consequences of outside agency actions that may result in revenue
reductions
address unexpected emergencies from natural disasters or catastrophic events caused
by human activity
address excessive liabilities or legal judgments against the organization
provide continuity in service delivery
It is the policy of the City of Carlsbad to maintain reserve levels as noted in the following sections,
for unforeseen events such as those listed above.
A review of all reserves listed below will occur as part of the annual budget process, and during
the rate-setting process for the wastewater and water utility enterprises.
GENERAL FUND
The city has a reserve policy in place (Council Policy 74) which sets a minimum reserve at 30
percent of the General Fund Operating Expenditures and a target reserve of 40 to 50 percent
unassigned fund balance of the General Fund Operating Expenditures. The reserve is calculated
using the prior fiscal year’s Adopted General Fund Budgeted Expenditures (including routine
operating transfers and the Council Contingency).
ENTERPRISE FUNDS
Wastewater Operating Fund
The city will target a reserve funding level of 40 percent. The reserve amount is
calculated by dividing unassigned fund balance by total budgeted operating
expenses plus replacement transfers plus budgeted debt service payments.
The annual budget process and setting utility user rates and charges will be used
to achieve and maintain the target reserve level.
Water Operating Fund
The city will target a reserve funding level of 40 percent. The reserve amount is
calculated by dividing unassigned fund balance by total budgeted operating
expenses plus replacement transfers plus budgeted debt service payments.
The annual budget process and setting utility user rates and charges will be used
to achieve and maintain the target reserve level.
INTERNAL SERVICE FUNDS
Worker’s Compensation Fund
The city will maintain a minimum reserve equal to the estimated outstanding claims
as calculated by a third-party administrator. Additional reserve amounts may be
set aside as deemed appropriate based on a third-party actuarial study completed
at two year intervals.
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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During the annual budget process, the target confidence level will be compared
with the projected fund balance, and, if the projected fund balance is greater than
or lesser than the target, a plan to adjust the fund balance will be considered, using:
Increasing revenues through interdepartmental charges
One-time cash contributions from those funds contributing to the shortfall
Risk Management Fund (General Liability)
The city will maintain a minimum reserve equal to the estimated outstanding claims
as calculated by a third-party administrator. Additional reserve amounts may be
set aside as deemed appropriate based on a third-party actuarial study completed
at two year intervals.
During the annual budget process, the reserve level will be compared with the
projected fund balance, and, if the projected fund balance is greater than or lesser
than the target, a plan to adjust the fund balance will be considered, using:
Increasing revenues through interdepartmental charges
One-time cash contributions from those funds contributing to the shortfall
Information Technology Asset Replacement Fund
The city shall maintain a minimum reserve level defined as the amount of
accumulated depreciation of IT capitalized assets based on the original cost of
each capitalized asset, and up to a maximum reserve level defined as the
accumulated depreciation based on the estimated replacement cost (calculated
annually by the Information Technology Department) of each capitalized asset.
If, during the annual budget process, the fund does not have sufficient cash
balances to achieve the minimum reserve level, a plan to increase cash balances
will be proposed using:
Increasing revenues through interdepartmental charges
One-time cash contributions from those funds contributing to the shortfall
If, during the annual budget process, the fund has excess cash balances, a plan
to decrease cash balances will be proposed using:
Decreasing revenues from interdepartmental charges
One-time refunds to those funds contributing to the excess
Vehicle Asset Replacement Fund
The city shall maintain a minimum reserve level defined as the amount of
accumulated depreciation of capitalized Fleet assets based on the original cost of
each capitalized asset, and up to a maximum reserve level defined as the
accumulated depreciation based on the estimated replacement cost (calculated
annually by the Public Works Department) of each capitalized asset.
If, during the annual budget process, the fund does not have sufficient cash
balances to achieve the recommended reserve level, a plan to increase cash
balances will be proposed using:
CITY OF CARLSBAD BUDGET HIGHLIGHTS
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Increasing revenues through interdepartmental charges
One-time cash contributions from those funds contributing to the shortfall
If during the annual budget process the fund has excess cash balances, a plan to
decrease cash balances will be proposed using:
Decreasing revenues from interdepartmental charges
One-time refunds to those funds contributing to the excess
GENERAL FUND ECONOMIC UNCERTAINTY COMMITMENT
In addition to the operating reserve, on June 30, 2015, the City Council set aside $10 million from
the General Fund committed fund balance to mitigate revenue losses should another recession
occur. Unlike the General Fund reserve, these funds could be used for ongoing operating
expenditures to ensure the continuation of services with minimal impact to the public.
GENERAL FUND PENSION STABILIZATION COMMITMENT
In addition to the Economic Uncertainty assignment, on June 28, 2016, the City Council set aside
$10 million from the General Fund committed fund balance to mitigate fluctuations in CalPERS
annual pension contribution rates. The commitment will allow the city to use these funds in years
when the rates increase, to alleviate stress on ongoing resources. The designation is not
irreversible; the funds remain in the General Fund and can be reallocated in the future by the City
Council.
INVESTMENT POLICY
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 basis; however, investments of bond proceeds will be held separately if
required.
FINANCING OF PUBLIC IMPROVEMENTS
Council Policy 33 outlines the city’s policies for financing public improvements, primarily to
complete links in the city’s traffic circulation system. Improvements generally include streets and
highways, sewer lines, water lines, drainage facilities, and other improvements as authorized by
law and which the City Council has determined are consistent with the policy.
The underlying principals behind the policy are:
To protect the public interest;
To ensure fairness in the application of the assessments, special taxes, or fees to current
and future property owners;
To ensure full disclosure to current and future property owners of the special district;
To ensure the creditworthiness of any special district debt;
To protect the city's credit rating and financial position;
To ensure that the applicants for special district proceedings, other than city-initiated
proceedings, pay all costs associated with the formation of any special district;
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To establish one policy regarding the requirements that must be met before the City
Council will consider approving the financing of public improvements using special
districts;
To provide city staff, the residents of the city, and owners and developers of property
located within the city with guidance in the application for and consideration of the
establishment of special districts; and
To incorporate the requirements of new legislation pertaining to the use of special districts.
The policy provides the framework for use of Assessment Districts, Community Facilities Districts,
and Bridge and Thoroughfare Districts. The public improvements must be located in the public
rights-of-way dedicated or otherwise granted to the city or other public agency, and construction
of the improvements must serve the public interest as well as the benefit conferred on the
properties within the proposed financing districts. The Policy describes property owner
requirements such as concurrence of a certain percent of property owners wishing to establish
the special district, financial capability and stability of the property owners and proposed project,
as well as the steps of the formation process.
BUDGET SUMMARY
A-21
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 $146.2 million for Fiscal Year 2016-17. 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.
FY 2016-17 GENERAL FUND REVENUES = $146.2 MILLION
Property taxes, at $59.2 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 $34.1 million for Fiscal Year
2016-17. Automobile and retail sales are the most significant contributors to the category of sales
tax.
FY 2016-17 OPERATING REVENUES
BY FUND TYPE = $251.1 MILLION
BUDGET SUMMARY
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Transient occupancy taxes (hotel taxes) are estimated at $20.8 million and represent the third
largest revenue source for the city. Franchise taxes, transfer taxes, and business license taxes
make up the remaining $11.3 million in tax revenues estimated to be collected in Fiscal Year
2016-17.
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 state mandated cost reimbursements, and homeowner’s exemptions. Intergovernmental
revenues are estimated at approximately $834,000 for the upcoming year.
Licenses and permits account for $2.3 million of the General Fund revenues and include building
permits and other development-related permits. Charges for services are estimated to be $9.0
million and include fees for engineering, planning, building, recreation, and ambulance services.
Income from investments and property are estimated at $3.8 million.
Other General Fund revenue sources include charges collected from other departments, fines
and forfeitures, and miscellaneous revenues. Those sources total $4.9 million.
Special Revenue Funds
Revenues from Special Revenue funds are estimated at $11.0 million for Fiscal Year 2016-17.
Funds collected in this category are legally restricted to specified purposes. Examples of
revenues in this category 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 special benefit assessment districts.
Enterprise Funds
Enterprise fund revenues make up the second largest revenue group, totaling $70.5 million.
Enterprise funds operate similar to a business in that they charge fees to cover the cost of their
services. The city has four primary enterprises, including a water utility, a wastewater utility, solid
waste management, and operations of the city’s municipal golf course, The Crossings at
Carlsbad.
Internal Service Funds
Internal Service fund revenues, projected to be $21.6 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 $1.8
million in the upcoming year. On June 29, 2011, California Governor Jerry Brown signed ABX126
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
BUDGET SUMMARY
A-23
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 2016-17 equals $250.1 million, which is
approximately 4.1 percent higher than the Operating Budget adopted for FY 2015-16. 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 and 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.
FY 2016-17 OPERATING BUDGET = $250.1 MILLION
Total funding allocated for the Policy and Leadership Group for 2016-17 is $7.4 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 and Records Management, City Attorney,
City Treasurer, and the Communications department.
Administrative Services, with a budget of $24.5 million, includes Finance, Purchasing, Human
Resources, Information Technology, Self-insured Benefits, Risk Management, and Workers’
Compensation. These areas mainly provide services to internal city departments.
Public Safety services are funded at $55.6 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.
Community & Economic Development, with a budget of $19.2 million, provide 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
BUDGET SUMMARY
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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, and providing for housing and neighborhood services.
Community Services, with a budget of $38.1 million, consists of library and cultural arts, parks
and recreation, and seniors programs. Included in this area is the enterprise fund for operations
of the municipal golf course, The Crossings at Carlsbad. These programs are provided to a wide
range of people and assist in their education, health and well-being, and cultural development.
The functional area requiring the largest amount of funds is Public Works, with a budget of $89.6
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 funding is $15.7 million and includes transfers to other
funds, programs benefiting the city as a whole, such as community promotions, community
contributions, assessment services, transfers to the golf course for debt service payments, and
the City Council’s contingency account. Included in the non-departmental group is a $9.5 million
transfer to the Infrastructure Replacement Fund. This program sets aside funds for the
replacement of the city’s base infrastructure. 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.
Staffing
The FY 2016-17 Operating Budget reflects a total net increase of 2.0 full-time positions, 3.0
limited-term positions, and an increase of part-time staff totaling 3.25 hourly full-time equivalent
(FTE) positions. These changes result in a city workforce of 676.25 full and three-quarter time
employees, 6.75 limited-term positions, and 162.76 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 2016-17 totals $64.5 million in new appropriations and an estimated
$179.5 million in continuing appropriations, for a total appropriation of $244 million. Some of the
notable capital projects which are planned in the next five years are discussed on the following
pages.
Park Development Projects
The city is currently implementing park projects which were a result of a needs assessment and
subsequent updated master plans. The city worked with the community to identify current needs
and priorities for parks and recreation programs, and summarized the input in the Parks &
Recreation Department Master Plan. The city then updated individual master plans for Poinsettia
Community Park, Aviara Community Park, Pine Avenue Community Park and Leo Carrillo Ranch
Historic Park.
BUDGET SUMMARY
A-25
Aviara Community Park Event Gathering Space and Picnic Areas – The additional park amenities
include a large passive outdoor community social space, group picnic areas, a perimeter walking
path and a warming kitchen complete with appliances to support outside catering and food and
beverage services and small events. The total cost is $3.2 million.
Poinsettia Park Multi-Use/Multi-Generational Community Center – As a result of the needs
assessment, funds are included to study the feasibility of a multi-use, multi-generation indoor
community center, located at Poinsettia Park, which will serve a larger cross section of the
community. Additional planned improvements include a fenced dog park for both large and small
dogs, pickleball courts, updated tot lots and a multi-sports arena with a picnic area and artificial
turf field, at a total cost of $4.4 million.
Leo Carrillo Phase III – This
historic park is located in the
southeast quadrant of the city.
Expenditures include restoration
of the horse stables,
implementation of an outdoor
interpretive plan to educate and
focus on the life and times of Leo
Carrillo, his ranch years, and
native people and plants. Also
included is visitor way-finding
signage and additional lighting.
The total estimated cost is $2.4
million.
Pine Avenue Park Community Facility and Garden Areas – The remaining elements of the park
include a multi-purpose community center and gymnasium, a community garden with rentable
plots, and a botanical/ornamental garden. The community center and gymnasium will include
basketball, volleyball, gymnastics, multi-purpose rooms, meeting rooms, a teen center, and office
space. This final phase of the park is estimated at $11.1 million.
Robertson Ranch Master Plan – This 13 acre park site is located within the Robertson Ranch
development located in the northeast quadrant of the city. Funding in the amount of $200,000 is
included for the development of a master plan.
Civic Facilities
Civic facilities include a variety of facilities from which the city can offer its services to the public.
Barrio Street Lighting – An analysis of the need for additional street lighting throughout the Barrio
resulted in a project to add pedestrian scaled lighting around the perimeter of Pine Avenue Park,
at a cost of $660,000.
Maintenance & Operations Center – This city facility will bring together offices, the maintenance
yard, a warehouse, and parking to accommodate the various work groups at one location,
currently planned near the existing Safety Center and Fleet yard. The total estimated project cost
is $29.8 million.
BUDGET SUMMARY
A-26
Facilities Maintenance – As the city facilities begin to age, maintenance
and repair projects are needed to keep them in good condition. In the
next five years, $8.6 million has been allocated to projects, including
projects at the following locations:
Aviara Community Park – Synthetic turf replacement
Beach Access Repairs/Upgrades
Cannon Park Restroom
City Facility Accessibility Upgrades
Hosp Grove Park Improvements
Ocean Street Restroom
Pine Avenue Park Synthetic Turf Replacement
Trails – Additional funding is included for the Lake Calavera Trails system for restrooms and a
drinking fountain.
Village and Barrio Public Gathering Spaces – Funding in the amount of $345,000 is included to
conduct outreach to determine the best locations for public gathering spaces, and, once locations
have been identified, to prepare design concepts, illustrating outdoor gathering places with varied
amenities.
Street and Circulation Projects
People of all ages and abilities want to go places safely and conveniently in Carlsbad. Whether
they drive, walk, bike, or ride a bus or train. The livable streets concept, also called “complete
streets,” acknowledges that streets are an important part of the livability of today's communities
and ought to be for everyone. Carlsbad has made livable streets a priority when planning and
constructing improvements to city roadways. In addition to constructing improvements, the city
continues to invest in the maintenance and operation of the transportation infrastructure by
providing timely repairs and rehabilitation of the public assets associated with the roadways and
public rights of way throughout the city.
ADA Improvements – ADA projects throughout the city are scheduled for $1 million in funding
over the next five years. The project includes various accessibility improvements, including
sidewalk curb ramps and pedestrian signals.
Avenida Encinas Widening – Widening to full secondary arterial standards along Avenida Encinas
from Palomar Airport Road to just south of Embarcadero Lane is scheduled for design in FY 2016-
17. The CIP includes $5.4 million to fund this project in the next five years.
Bridge Preventative Maintenance Program – This is a new program designed to perform
preventative maintenance activities on bridges throughout the city, at a total cost of $1.5 million.
Carlsbad Boulevard Pedestrian Lighting – This project will install pedestrian scale lighting along
both sides of Carlsbad Boulevard between Tamarack Avenue and State Street at a total cost of
$1.3 million.
Carlsbad Boulevard and Tamarack Avenue Pedestrian Improvements – Improvements at the
intersection of Carlsbad Boulevard and Tamarack Avenue includes installation of new concrete
curb, gutter, sidewalk and pedestrian ramps at a total cost of $2.9 million.
Concrete Repair and Maintenance – The proposed spending plan included $1 million in the next
five years for repairs to sidewalks, curb and gutter, pedestrian ramps, driveway approaches and
cross gutters.
BUDGET SUMMARY
A-27
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, in addition to other improvements, such
as median construction. The projects include widening from Cassia Road to Camino Vida Roble,
Arenal Road to La Costa Avenue, Lisa Street to Crestview Drive and Tamarack Avenue to
Chestnut Avenue. In the next five years, $5.1 million in additional funding is included for these
projects, which are expected to cost over $20 million by completion.
Intersection Improvements – Two intersection projects along El Camino Real, at Cannon Road
and at College Boulevard are scheduled to receive an additional $2.6 million in the next five years.
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 2016-17 CIP has $12.6 million budgeted in the next five years for
this program.
Parking Lot Maintenance Program – Parking lot maintenance is a relatively new program and is
scheduled to receive funding of $845,000 in the next five years.
Poinsettia Lane Extension from Cassia Road to Skimmer Court – Completion of this segment of
Poinsettia Lane is the final link between Aviara Parkway and El Camino Real. The total cost is
estimated at $14 million.
Road Diet and Traffic Calming Projects along Chestnut Avenue, Valley Street, Kelly Drive, and
La Costa Avenue – Several projects are planned in the next five years to provide complete street
solutions so that the varied user of these roads, including pedestrians and bicyclists, are provided
for in a balanced and equitable manner. The total cost is estimated at $9 million.
Traffic Signals – In the next five years, four traffic signal installations are planned at the following
locations, at a total cost of $780,000:
El Fuerte Street and Rancho Pancho
Faraday Avenue and Camino Hills Drive
Faraday Avenue and Palmer Way
La Costa Avenue and Levante Street
Village and Barrio Traffic Circles – Installation of traffic
circles at intersections throughout the Village and Barrio
is planned at a total cost of $1.2 million.
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 with impact fees collected with new development. As
the city ages, it will become necessary to repair and replace the lines that already exist, and an
increase in these projects is anticipated in future years. In the next five years, an additional $43.2
million in funding is scheduled for both new and replacement water and sewer projects.
Vista/Carlsbad Interceptor & Agua Hedionda Lift Station Replacement – This project consists of
a set of individual projects that will ultimately construct a parallel sewer interceptor system to
accommodate existing and future sewer flows from the cities of Vista and Carlsbad. The individual
projects include a main in Jefferson Street, replacement of the Agua Hedionda Lift Station, and a
BUDGET SUMMARY
A-28
main from the lift station to the Encina Wastewater Facility. The overall total cost estimate for this
set of projects totals $68 million, of which approximately 64 percent is funded by the City of Vista
and 36 percent by the City of Carlsbad.
Wastewater
Other wastewater facilities scheduled for construction or replacement within the next five years
include:
Buena Interceptor Sewer Improvements
Faraday/El Camino Real Sewer Replacement
Foxes Landing Lift Station Wetwell and Pump Replacement
Las Palmas Trunk Sewer
Marron Road
North Batiquitos
Quarry Creek Sewer Extension
In addition to the new construction and replacement projects and ongoing condition assessments,
repairs and upgrades to the city’s wastewater facilities are expected to cost $3.5 million in the
next five years.
Water Lines
Major water facilities scheduled for construction or replacement within the next five years are
estimated at $38 million, and include the following locations:
Aviara Parkway and Plum Tree
Carlsbad Boulevard – South of Avenida Encinas
Carlsbad Boulevard – Terramar
Fire Flow System Improvements
La Costa High Reservoir Inlet Pipeline
Maerkle Pump Station Improvements and Transmission Main
Maerkle Reservoir Floating Cover Replacement
Santa Fe II Inlet Pipeline
Recycled Water Expansion
Expansion to the Carlsbad Water
Recycling Facility, including construction
of additional pipelines and a reservoir, are
anticipated to cost $33 million. These
facilities are expected to meet the 76
percent increase in future recycled water
demand. The expansion is expected to
increase the recycled water supply from 4
to up to 8 million gallons per day (mgd).
With diminishing potable water resources
available, alternative supplies such as
recycled and desalinated water become
increasingly important in supplementing
the total water supply.
BUDGET SUMMARY
A-29
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 additional $3.3 million will be added to the program in the
next five years.
SUMMARY
The FY 2016-17 budget focuses resources on projects that align with the strategic goals set by
our City Council and the community. Most major revenue sources for the city are improving, and
these ongoing resources will fund building and operating the facilities that will support the future
needs of our residents and visitors. The city has also utilized a growth management plan to
ensure that one-time funds are available for these facilities and infrastructure.
Economic news is mostly optimistic, but the environment is somewhat unpredictable, given
international instability, the pending national election, and challenges at the state level from the
expiration of the temporary sales tax to the unknown effects of the pending increase in the
minimum wage. Although the forecast indicates improving economic conditions for the city in the
coming years, the FY 2016-17 budget maintains the fiscal discipline and planning exercised by
Carlsbad’s City Council over the past decades.
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. Last year, the city set aside $10 million from the
General Fund unassigned fund balance to mitigate revenue losses should another recession
occur. An additional $10 million was set aside in this year’s operating budget to mitigate
fluctuations in the CalPERS annual pension contribution rates. Unlike the General Fund reserve,
these funds can be used for ongoing operating expenditures to ensure the continuation of services
with minimal impact to the public. The FY 2016-17 budget reflects continued dedication to the
provision of excellent city services and the quality of life valued by those who live, work and play
in Carlsbad.
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.
Although the Government Code of the State of California has established maximum General
Obligation debt limits for local governments within the State, the city does not have any
outstanding debt subject to those limitations.
BUDGET SUMMARY
A-30
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. The city currently has
approximately $87 million of debt outstanding, although this budget provides for a large reduction
of that debt. In FY 2016-17, the city will use General Fund resources to call $14.8 million in
outstanding debt on it’s municipal golf course, resulting in a large savings in financing costs, as
the outstanding debt has an average interest cost of 4.5 percent over the remaining 21 year life
of the bonds. Prepayment will result in the avoidance of about $8.4 million in future interest
payments. The city has no other general obligation debt. Outstanding debt obligations of
financing districts within the city do not obligate the City of Carlsbad.
BUDGET SUMMARY
A-31
PROJECTED PROJECTED
BALANCE ESTIMATED ADOPTED BALANCE
PROGRAM AREA July 1, 2016 REVENUES BUDGET June 30, 2017
OPERATING BUDGET
Policy / Leadership Group 7,406,742$
Administrative Services 24,527,078
Community Development 19,182,053
Community Services 38,102,141
Public Safety 55,594,222
Public Works 89,620,517
Non Departmental & Contingencies 15,713,500
SUBTOTAL OPERATING 186,390,055$ 251,106,317$ 250,146,253$ 187,350,119$
CAPITAL IMPROVEMENT PROGRAM
Fiscal Year 2016-17 462,200,645$ 51,672,799$ 64,527,677$ 449,345,767$
2015-16 Continuing Appropriations (179,524,686)
Projected CIP Fund Balance at June 30, 2017 269,821,081
TOTAL OPERATING AND CAPITAL 648,590,700$ 302,779,116$ 314,673,930$ 636,695,886$
PROJECTED PROJECTED
BALANCE PROJECTED ESTIMATED BALANCE
PROGRAM AREA JULY 1, 2015 REVENUES EXPENDITURES JUNE 30, 2016
OPERATING BUDGET
Policy / Leadership Group 6,787,000$
Administrative Services 23,244,563
Community Development 18,600,496
Community Services 37,734,635
Public Safety 51,210,000
Public Works 78,280,724
Non Departmental & Contingencies 15,838,127
SUBTOTAL OPERATING 173,873,303$ 244,212,297$ 231,695,545$ 186,390,055$
CAPITAL IMPROVEMENT PROGRAM
Fiscal Year 2015-16 463,659,040$ 105,566,532$ 107,024,927$ 462,200,645$
TOTAL OPERATING AND CAPITAL 637,532,343$ 349,778,829$ 338,720,472$ 648,590,700$
FISCAL YEAR 2016-17
FISCAL YEAR 2015-16
BUDGET SUMMARY
A-32
The following table identifies the debt the city has issued, the outstanding principal balance, the
2016-17 scheduled principal and interest payments, and the scheduled year of payoff.
Bond Name Repayment Source
Original Bond
Issue
Outstanding
Principal At
6/30/16
2016-17
Payment P&I
Final
Payment
FY
Carlsbad Public Financing Authority Bonds
Revenue Bonds Golf Course 18,540,000$ 15,855,000$ 16,211,100$ 2037 (*)
Enterprise Revenue
1993 Redevelopment
Tax Allocation Redevelopment 15,495,000$ 6,730,000$ 1,036,802$ 2024
Bonds
CFD #3 2006 -Improvement Area 1
Special Tax Special District 11,490,000$ 9,615,000$ 758,287$ 2037
Bonds
CFD #3 2008-Improvement Area 2
Special Tax Special District 18,175,000$ 12,890,000$ 1,051,656$ 2039
Bonds
Subtotals 63,700,000$ 45,090,000$ 19,057,845$
1997 Carlsbad Ranch (AD 95-1)
Limited Obligation Assessment 10,175,438$ 3,420,000$ 944,239$ 2023
Improvement Bonds District
1998 Rancho Carrillo (AD 96-1)
Limited Obligation Assessment 19,600,000$ 10,215,000$ 1,642,154$ 2029
Improvement Bonds District
2013 Reassessment District (AD 2012-1)
Limited Obligation Assessment 31,300,000$ 28,470,000$ 2,145,082$ 2036
Improvement Bonds District
Subtotals 61,075,438$ 42,105,000$ 4,731,475$
Totals 124,775,438$ 87,195,000$ 23,789,320$
(*) The Carlsbad Public Financing Authority Bonds (Golf Course Revenue Bonds) will be prepaid in full in FY 2016-17.
City of Carlsbad
Debt Outstanding
FINAL FINAL FINAL
BUDGET BUDGET BUDGET 2016-17
2014-15 2015-16 2016-17 CHANGES
CITY ATTORNEY 7.00 7.00 6.00 (1.00)
CITY CLERK 3.00 3.00 3.00 0.00
CITY COUNCIL 1.00 1.00 1.00 0.00
CITY MANAGER 7.00 7.00 8.00 1.00
CITY TREASURER 0.75 0.75 0.75 0.00
COMMUNICATIONS 4.75 5.00 5.00 0.00
COMMUNITY AND ECONOMIC DEVELOPMENT 44.00 44.00 44.00 0.00
FINANCE AND RISK MANAGEMENT 31.50 32.50 33.00 0.50
FIRE 89.00 89.00 90.00 1.00
HOUSING AND NEIGHBORHOOD SERVICES 12.00 13.00 13.00 0.00
HUMAN RESOURCES & WORKERS COMP 11.00 11.00 11.00 0.00
INFORMATION TECHNOLOGY 22.50 19.50 20.00 0.50
LIBRARY & CULTURAL ARTS 50.25 50.50 50.50 0.00
PARKS AND RECREATION 61.60 58.15 57.15 (1.00)
POLICE 162.00 168.00 168.00 0.00
PUBLIC WORKS - ADMINISTRATION 6.00 8.05 9.85 1.80
PUBLIC WORKS - ENVIRONMENTAL MANAGEMENT 7.80 8.50 9.50 1.00
PUBLIC WORKS - GENERAL SERVICES (*)33.10 28.10 51.30 23.20
PUBLIC WORKS - TRANSPORTATION (*)55.10 57.35 33.00 (24.35)
PUBLIC WORKS - UTILITIES 58.40 60.85 60.20 (0.65)
RECORDS MANAGEMENT 2.00 2.00 2.00 0.00
PERMANENT FULL AND 3/4 TIME LABOR FORCE 669.75 674.25 676.25 2.00
SUMMARY OF REQUESTED LABOR FORCE BY CATEGORY
2014-15 2015-16 2016-17 Difference
Limited Term Personnel 0.00 3.75 6.75 3.00
Hourly Full Time Equivalent Personnel 157.77 159.51 162.76 3.25
TOTAL LABOR FORCE 827.52 837.51 845.76 8.25
(*) In FY 2016-17 Public Works restructured divisions within the General Services and Transportation
departments resulting in staffing increases in General Services and decreases in Transportation.
PERSONNEL ALLOCATIONS
A-33
2016-17 BUDGET CALENDAR
A-34
Operating Budget Capital Budget
Planning and calendar development Planning and calendar development
Operating Budget Capital Budget
City Council goal setting Kickoff meeting
Ten-year forecast updated Departments update project submittals
Budget policies are set
Block calculation completed
Budget manual finalized
Operating Budget Capital Budget
Kickoff meeting
Department submittals due
Operating Budget Capital Budget
Department budgets due Growth estimates updated
Finance department review Cash flows updated (15 year)
Operating Budget Capital Budget
Meetings with Department Heads Meetings with City Manager
Meetings with City Manager
Operating Budget Capital Budget
Preliminary budget to printer Preliminary budget to printer
Operating Budget Capital Budget
14th City Council Workshop 7th City Council Workshop
21st Citizen's Budget Workshop 21st Citizen's Budget Workshop
28th Budget Adoption 28th Budget Adoption
DECEMBER 2015
MAY 2016
JUNE 2016
JANUARY 2016
FEBRUARY 2016
MARCH 2016
APRIL 2016
2016/17 Operating Budget &
Capital Improvement Program Operating Budget
Operating Budget Operating Budget
Operating Budget Summary Summary
Summary
Operating Budget Summary
2016-17 OPERATING BUDGET OVERVIEW
B-1
The Operating Budget for FY 2016-17 totals $250.1 million, with revenues for the year estimated
at $251.1 million. General Fund revenues are estimated at $146.2 million and General Fund
budgeted operating expenditures are $141.8 million.
REVENUE
The following table shows the total operating revenues anticipated to be received by the city for
FY 2015-16, as well as those estimated for FY 2016-17.
Revenue estimates for the Operating Budget indicate that the city will receive a total of $251.1
million in FY 2016-17, a change of about $6.9 million over the projected FY 2015-16 revenues.
General Fund revenues are expected to increase by $4.2 million, compared to the prior year, as
all sources of revenue indicated in the table increase, with the exception of minor decreases in
revenues from sales tax. Special Revenue funds decreased by 5.6 percent, or $700,000, due to
projected decreases in donations, affordable housing revenues, and General Fund transfers to
the Median Maintenance Fund. Enterprise Fund revenues are projected to increase by $1.2
million, driven primarily by increases in potable and recycled water sales. More information on
the city’s revenue sources is provided in the following discussion.
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 and Cultural
Arts, Street and Park Maintenance, and Recreation programs. The following table provides a
summarized outlook for the major General Fund revenues.
PROJECTED BUDGETED $%
2015-16 2016-17 CHANGE CHANGE
GENERAL FUND 142.0$ 146.2$ 4.2$ 2.9%
SPECIAL REVENUE 11.7 11.0 (0.7) -5.6%
ENTERPRISE 69.3 70.5 1.2 1.8%
INTERNAL SERVICE 19.6 21.6 2.0 10.0%
REDEV. OBLIG. RETIREMENT 1.6 1.8 0.2 12.5%
TOTAL 244.2$ 251.1$ 6.9$ 2.8%
REVENUE SUMMARY
BY FUND TYPE
(in Millions)
FUND
PROJECTED BUDGETED $%
2015-16 2016-17 CHANGE CHANGE
PROPERTY TAX 56.9$ 59.2$ 2.3$ 4.0%
SALES TAX 34.9 34.1 (0.8) -2.4%
TRANSIENT OCCUPANCY TAX 20.3 20.8 0.6 2.8%
FRANCHISE TAXES 5.6 5.7 0.1 1.1%
BUSINESS LICENSE TAX 4.4 4.5 0.1 3.0%
DEVELOPMENT REVENUES 3.1 4.2 1.1 34.4%
ALL OTHER REVENUE 16.8 17.6 0.8 5.0%
TOTAL 142.0$ 146.2$ 4.2$ 2.9%
SIGNIFICANT GENERAL FUND REVENUES
(In Millions)
2016-17 OPERATING BUDGET OVERVIEW
B-2
General Fund revenues continue to indicate a healthy local economy, as growth continues to be
positive. Almost 80 percent of General Fund revenues are derived from three sources – property
tax, sales tax, and transient occupancy tax (TOT). Sales tax receipts and TOT revenues tend to
be much more sensitive to changes in economic conditions, unlike property tax revenues, which
remain relatively stable because of the mitigating effect of Proposition 13, which limits annual
growth in assessed values. Property tax, the largest source of General Fund revenues, is
expected to grow by 4.0 percent in FY 2016-17, as assessed values continue to improve. The
median price of a single family residence (SFR) rose by almost 13 percent compared to last year,
from $734,000 to $827,000. According to CoreLogic, all four zip codes in Carlsbad saw double
digit rates of growth, with the exception of 92009 (La Costa), which rose slightly less than one
percent. Upward pressure on prices may be, in part, the result of lower housing inventories, as
the inventory of homes for sale was 27 percent lower in April 2016, compared to the previous
year. Economists continue to predict tightening in the Federal Reserve monetary policy, but
recent economic indicators may cause the Fed to reconsider this tightening in the short term.
Changes in property tax revenue lags behind changes in the housing market, as the tax revenue
for the upcoming fiscal year is based on assessed values from January. Thus, the tax revenue
that will be received in FY 2016-17 are based on assessed values as of January 1, 2016.
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 decades, the city has seen robust growth in property
tax revenue due to new development, high turnover of existing homes, and double-digit growth in
housing prices.
2016-17 OPERATING BUDGET OVERVIEW
B-3
Sales tax revenues
generally move in step with
economic conditions and
have improved markedly
over the past years. Sales
tax for FY 2016-17 is
expected to dip by 2.4
percent, due primarily to the
expiration of the triple flip
(see below) and decreasing
revenues at a shopping mall
currently in transition.
According to information
from the Anderson School at
UCLA, taxable sales in the
state of California are
expected to maintain growth
of slightly more 4 percent for
calendar years 2017 and
2018. Comparing the fourth quarter of calendar year 2015 to the previous year, sales tax cash
receipts in the State of California increased by 3.5 percent, bolstered by decreasing
unemployment in the state and growth in real personal income. The City of Carlsbad realized an
increase of 1.8 percent in cash receipts for the fourth quarter of 2015. New auto sales, which
comprise approximately one-quarter of city sales tax revenue, hit all-time highs in the fourth
quarter of 2015, as did sales tax receipts from restaurants. City sales tax revenues are expected
to contribute $34.1 million to the General Fund in FY 2016-17, making up 24 percent of the total.
The city continues to benefit from recent additions, such as the LegoLand Hotel and Lowe’s, which
opened in fall 2013, although the city does not forecast many new retail additions in the coming
fiscal year.
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 above, the city’s sales tax base is heavily weighted in the
transportation (predominantly new car sales) and retail sectors. These two sectors account for
two-thirds of taxable sales in Carlsbad. New car sales tax revenue dropped precipitously during
the recent recession, falling from $6.7 million in the fourth quarter of 2007 to a low of $4.4 million
in 2009. In the fourth quarter of 2015, new car sales hit a high in excess of $8 million. Sales tax
receipts flattened out in 2015, decreasing by 1.7 percent in the fourth quarter, compared to the
previous year. This compared with statewide growth of 2.6 percent for the same time period.
Estimates also include approximately $1 million 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.
2016-17 OPERATING BUDGET OVERVIEW
B-4
The third highest General Fund
revenue source is Transient
Occupancy Tax (TOT, or hotel
tax). TOT is forecast to increase by
2.8 percent in FY 2016-17,
stabilizing at a record high of almost
$21 million. As seen in the
accompanying graph, TOT has
increased by over 80 percent since
FY 2010-11, as new hotels, such as
the LegoLand Hotel and the Hilton
Oceanfront Resort & Spa (recently
renamed Cape Rey Carlsbad, a
Hilton Resort) have opened in the
past years. Despite some
headwinds in the tourism sector from a relatively strong dollar and slowing in overseas
economies, and the San Diego Tourism Authority expects the average room night revenues to
improve by almost 5 percent in both 2017 and 2018. Carlsbad currently has approximately 4,400
hotel rooms and over 1,000 vacation rentals, and continues to benefit from increasing daily room
rates and improving occupancy rates.
Franchise Tax revenue has
stabilized over the past years
and is projected at $5.7 million in
FY 2016-17. 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 optic antenna systems and
gas and electric services. The
cable and solid waste franchises
experienced minor revenue
increases that mirror growth in
population and changes in rate structures. Franchise tax revenues are expected to remain
relatively flat in the coming year.
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 tax on gas and electricity that is transported using public lands that would otherwise not
be included in the calculations for the franchise tax, due to deregulation of the power industry.
The majority of “in-lieu” tax 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. As mentioned
previously, electricity demand was unusually high in the current year, but is expected to stabilize
at a lower rate for the coming decade.
Development-related revenues are derived from fees for 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.
2016-17 OPERATING BUDGET OVERVIEW
B-5
During FY 2009-10, development-related revenues began to turn around from historic lows
experienced in FY 2008-09. During FY 2010-11, this revenue source continued to strengthen,
especially on the non-residential side, with the permitting of the new Ionis Pharmaceuticals
headquarters and the Hilton hotel, Cape Rey. Development-related revenues have fluctuated in
the past years in line with increases and decreases in residential, commercial and industrial
development. In FY 2012-13, revenues rose from $2.7 million to $3 million, following a marked
increase in commercial space permitted. In FY 2016-17, the city expects a 34 percent increase
in development related revenues, to approximately $4.2 million. An additional 755 residential
units are expected to be added in the coming fiscal year, compared to 292 in the current year.
Coupled with an estimated addition of over 600,000 square feet of non-residential space, this is
driving strong expectations for development related revenues in the coming year.
Business license taxes are closely tied to the health of the local economy, and are projected to
increase by 3 percent to an estimated $4.5 million in FY 2016-17. There are currently about 9,500
licensed businesses in Carlsbad, with just under 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 FY 2016-17 totals $17.6 million, an $800,000, or 5
percent, increase from the previous year, primarily due to projected improvements in ambulance
fee revenues.
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 $1.10 per $1,000 of property value, split equally between the county and the city. Carlsbad
expects to receive approximately $1.1 million in transfer taxes for FY 2016-17, which is essentially
unchanged from FY 2015-16. Housing prices are continuing to increase in Carlsbad, but
inventories remain low. Economists continue to predict multiple increases in the Fed discount
2016-17 OPERATING BUDGET OVERVIEW
B-6
rate; this could increase historically low mortgage interest rates, which could put some downward
pressure on transfers. 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 $2.1
million in interest on its General Fund investments for Fiscal Year 2016-17, as the yield on the
city’s portfolio is expected to improve modestly to about 1.25 percent and cash balances grow.
Overall, as reflected in the bar chart, General Fund revenues are expected to be up 2.9 percent
from FY 2015-16, as the city experiences growth in all revenues, except sales tax, which is
projected to have a modest decrease. Although the city experienced revenue growth between 9
and 17 percent in the late 1990’s, it was not sustainable. Much of those increases were due to
the opening of new hotels, restaurants, retail centers, and new home construction. As new
development slows, it will be increasingly more difficult to produce double-digit growth in
revenues. An improving economy is certainly driving General Fund revenues higher, but revenue
growth should stabilize at around 4 percent in the coming years.
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 2015-16, the unassigned General Fund balance is projected to be approximately
$88 million. At the end of FY 2016-17, the reserve is projected to be approximately $77 million,
assuming the city pays off an outstanding debt issue. This projected unassigned fund balance
will represent a 54 percent reserve. The reserve amount is consistent with Council Policy 74:
General Fund Reserve Guidelines. More information about the city’s financial policies are located
in the “Budget Highlights – Section A” of this document.
Other Funds
Revenues from Special Revenue funds are expected to total $11 million in FY 2016-17, a
decrease of over 5.6 percent from FY 2015-16. 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)
The most noteworthy changes in the Special Revenue funds occurred in the Affordable Housing
Trust Fund (decreased $276,000, or 54 percent). These amounts represent loan repayments and
can fluctuate significantly from year-to-year. Police Grant revenues decreased $342,000; grants
are generally one-time revenues and fluctuate from year-to-year as well.
Enterprise fund revenues for FY 2016-17 are projected at $70.5 million, an increase of $1.2
million, or almost 2 percent, over current year projections. 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, solid waste
management, and operation of a golf course. In addition to paying for the wholesale and fixed
water costs, the FY 2016-17 Operating Budget includes funding for replacement of Carlsbad’s
water infrastructure, ongoing meter replacements, and building sufficient operating reserves.
2016-17 OPERATING BUDGET OVERVIEW
B-7
The Water Enterprise Fund revenue is estimated at $47.2 million, an increase of $2.3 million, or
5 percent over the current year estimate. Revenue from water sales is expected to increase,
because of the increases paid to the San Diego County Water Authority. Proposed rate increases
for the upcoming fiscal year will be presented in the fall of this year pending results from a cost of
service analysis currently underway.
Estimated revenues for Wastewater are $12.8 million; no change from the current year estimate.
Estimated revenues for the Golf Course are expected to decrease by 14 percent next year, due
to a decrease of revenue received from the General Fund, previously used to cover debt service
payments. The outstanding bonds will be paid off in the coming fiscal year, and no transfer from
the General Fund is budgeted. Revenues from operations at the Golf Course are expected to
increase by 1 percent, and exceed operating expenditures.
Internal Service funds show estimated revenues of $21.6 million for FY 2016-17, a 10 percent
increase over FY 2015-16 projections. An actuarial review of the Workers’ Compensation fund
indicates that it has insufficient cash balances to meet future claims, due primarily to increasing
claims over the past years. In order to remedy this, the budget increases charges to city
departments by 15 percent in the coming years and transfers funds from the General Fund to
stabilize the Workers’ Compensation fund.
There are also increases in Vehicle Maintenance and Information Technology (IT) charges of
9 percent and 13 percent, respectively. Vehicle Maintenance revenues increase in the coming
year due to unusually low fuel costs in the current year and fluctuations from year to year. IT
charges to departments are increasing due to improvements to the city network and costs
associated with new hardware and software. IT charges will continue to increase in the coming
years as the city addresses aging IT infrastructure and moves to more innovative solutions for
business practices.
Internal Service funds account for services provided within the City itself, from one department to
another, on a cost reimbursement basis. These include programs such as Self Insurance,
Workers’ Compensation and General Liability (Risk Management), as well as Vehicle
2016-17 OPERATING BUDGET OVERVIEW
B-8
Maintenance and Replacement, and Information Technology. Departments pay for these
services; therefore, the rates charged are based on the cost to provide the service. The goal of
an Internal Service fund is to match budgeted expenses with charges to the departments.
The Redevelopment Obligation Retirement Fund (RORF) revenues are budgeted at $1.8
million, $205,000 higher than FY 2015-16 estimates. Although the Redevelopment Agency has
been dissolved, the California Department of Finance has approved the repayment of the
approximately $8.1 million (plus accrued interest) loaned to both former redevelopment areas by
the General Fund. Loan payments of approximately $1 million per year will be made to the city,
and 20 percent of this repayment will be set aside for future affordable housing.
2016-17 OPERATING BUDGET OVERVIEW
B-9
EXPENDITURES
The city’s Operating Budget for FY 2016-17 totals $250.1 million, which
represents an increase of about $10 million, or 4.1 percent, as compared to
the adopted FY 2015-16 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, reducing costs wherever
possible, and planning for the future. The goal was to achieve a balanced budget for the coming
fiscal year while still maintaining the city’s long-term financial health and 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 2016-17 Preliminary Operating
Budget, as well as in the long-term financial forecast.
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, the
city will pursue allocating resources in a manner that provides the best services for the people of
Carlsbad. The following policies for FY 2016-17 were established in line with conservative
estimates for future revenue growth:
Continue to provide excellent services to our residents.
Increase in the number of staff positions were allowed in instances where community
priorities would be served. In addition, increases were allowed for short-term staffing
needs to assist with succession planning while maintaining high levels of service.
Modest growth (2 percent) was allowed for maintenance and operations in order to allow
departments to meet escalating costs.
Increases were considered for new initiatives where community priorities would be
served, and for implementation of legal mandates, such as the Climate Action Plan.
All departments exercised prudence in budgeting, considered cost containment
measures, and set discretionary budgets 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. For FY 2016-17, departments were allowed a 2 percent
increase, if needed, for maintenance & operations (M&O) costs. As a result of the economic
recession, block budgets were reduced in both FY 2008-09 and FY 2009-10 in order to align
expenses with falling revenues. In order to gain further operating efficiencies, the city’s
organizational structure was realigned in FY 2010-11. Since the beginning of the recession, the
city has eliminated 38 full-time equivalent (FTE) positions in order to contain costs. In the FY
2016-17 budget, there is a net increase of 2.0 full-time equivalent positions, and 3.0 limited-term
positions. No additional appropriations are expected during the fiscal year, except in the case
of significant unanticipated events. 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 2015-16, the amounts carried forward by each department will be capped at no more than
10 percent of the previous year’s Adopted Budget. Departments are allowed to request
additional carry forward amounts from remaining unspent funds for special one-time projects as
well as items funded in FY 2015-16 which are planned for completion in FY 2016-17.
2016-17 OPERATING BUDGET OVERVIEW
B-10
Budgeted Expenditures
Through the application of these guidelines and policies, the FY 2016-17 Operating Budget of
$250.1 million was developed.
Position Changes
A net increase of 2.0 full-time positions and 3.0 limited-term positions, when compared to the FY
2015-16 Adopted Budget, is reflected in the FY 2016-17 Operating Budget. These position
changes resulted in an approximate citywide personnel increase of $658,766 for the coming
year.
The FY 2016-17 Operating Budget includes the elimination of the following 3.0 permanent full-
time positions:
1.0 Park Maintenance Worker II
2.0 Street Maintenance Worker II
The FY 2016-17 Operating Budget includes the addition of the following 5.0 permanent full-time
positions:
1.0 Climate Action Plan Administrator
1.0 Network Engineer
1.0 Permit Technician
1.0 Public Works Supervisor
1.0 Senior Construction Inspector
The net increase in hourly staff totals 3.25 full-time equivalent (FTE) positions, as shown below:
0.50 FTE Community and Economic Development
2.75 FTE Public Works
These changes result in a city workforce of 676.25 full and three-quarter time employees, 6.75
limited-term employees, and 162.76 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. There
are no new facilities expected to open in FY 2016-17.
New Programs
The FY 2016-17 Operating Budget includes $1 million for implementation of the city’s Climate
Action Plan (CAP), a new program approved by the City Council in September 2015 with
approval of the General Plan Update. The CAP contains various measures that, when
implemented, are intended to reduce greenhouse gas (GHG) emissions within Carlsbad in
accordance with State of California emissions reductions targets. Each of these measures has
specific actions that the city needs to complete, such as adopting ordinances, preparing plans
and conducting public outreach and stakeholder involvement.
2016-17 OPERATING BUDGET OVERVIEW
B-11
Budget by Fund Type
The table below shows the changes in the proposed Operating Budget for FY 2016-17, as
compared to the Adopted Budget for FY 2015-16.
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
The total Operating Budget for the General Fund for FY 2016-17 is $141.8 million, which is 4.8
percent greater than the previous year’s Adopted Budget of $135.3 million. The total increase is
attributable to a $5.5 million (6.7 percent) increase in Personnel, a $2.9 million (7.3 percent)
increase in Maintenance & Operations costs, and a $1.5 million overall decrease in Capital
Outlay, as can be seen in the table above. Transfers to other funds decreased $400,000, or 3.2
percent. These changes are discussed in more detail below.
Personnel costs make up approximately 62 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 2016-17 is $87.7 million, which is $5.5 million, or 6.7 percent greater than the
previous year’s total personnel budget of $82.2 million.
BUDGET BUDGET $%
FUND 2015-16 2016-17 CHANGE CHANGE
GENERAL FUND 135.3$ 141.8$ 6.5$ 4.8%
SPECIAL REVENUE 11.6 11.4 (0.3) -2.2%
ENTERPRISE 70.4 71.7 1.4 1.9%
INTERNAL SERVICE 21.6 23.9 2.3 10.6%
REDEV. OBLIG. RETIREMENT 1.3 1.4 0.1 8.6%
TOTAL 240.2$ 250.1$ 10.0$ 4.1%
BUDGET EXPENDITURE SUMMARY
BY FUND TYPE
(In Millions)
BUDGET BUDGET $%
2015-16 2016-17 CHANGE CHANGE
PERSONNEL 82.2$ 87.7$ 5.5$ 6.7%
MAINTENANCE & OPERATIONS 39.2 42.1 2.9 7.3%
CAPITAL OUTLAY 1.8 0.3 (1.5) -81.6%
TRANSFERS 12.1 11.7 (0.4) -3.2%
TOTAL 135.3$ 141.8$ 6.5$ 4.8%
(In Millions)
GENERAL FUND SUMMARY
BY EXPENDITURE TYPE
2016-17 OPERATING BUDGET OVERVIEW
B-12
The table above shows the breakdown of personnel costs for the General Fund. Salaries include
full and part-time staff costs and are expected to increase in FY 2016-17 by $2.7 million, or 4.7
percent. The increase is mainly due to previously negotiated wage increases scheduled to occur
in FY 2016-17, as well as the net addition of 2.0 full-time staff, 3.0 limited-term and 3.25 part-
time staff.
Retirement rates as projected by CalPERS will increase in FY 2016-17 to 28.86 percent of payroll
for General and Management employees, representing a 6 percent increase, while the
contribution for Safety employees will increase by almost 10 percent to 40.58 percent of
payroll. These rate increases for the city will result in an increase of approximately $1.7 million
for the General Fund in FY 2016-17. These increases are part of a five-year planned increase
in pension costs that is expected to help address large unfunded pension liabilities.
Health insurance costs are up 6.0 percent, and Worker’s Compensation expense is projected to
increase 16.4 percent due to increasing liability estimates and settlements. Miscellaneous other
personnel costs, such as bi-lingual pay, are projected to decrease by $100,000, or 4.2 percent
in FY 2016-17.
Departments with part-time hourly employees were given a 1.5 percent increase. The annual
impact of the adjustments was estimated at $80,000.
Maintenance and Operations costs (or M&O) represent about 30 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 $42.1 million, an increase of
about $2.9 million, or 7.3 percent, for FY 2016-17 as compared to FY 2015-16. Maintenance &
Operations costs are discussed more fully by program later in the report.
Capital Outlay includes budgeted equipment purchases over $1,000. Capital outlay purchases
of $329,000 million are budgeted in the General Fund for FY 2016-17. The complete list listed
of proposed capital purchases is shown on page J-1.
Transfers are amounts anticipated to be transferred from the General Fund to another city fund.
The transfers included in the adopted budget are as follows:
$9,460,000 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 2015-16.
$224,000 to the Storm Water Program for reimbursement for the General Fund portion
of Storm Water expenses.
GENERAL FUND GENERAL FUND
PERSONNEL COSTS PERSONNEL COSTS
(In Millions)
BUDGET BUDGET $%
2015-16 2016-17 CHANGE CHANGE
SALARIES 56.5$ 59.2$ 2.7$ 4.7%
RETIREMENT 15.2 17.4 2.2 14.2%
HEALTH INSURANCE 7.2 7.6 0.4 6.0%
WORKERS COMP 1.9 2.2 0.3 16.4%
OTHER PERSONNEL 1.4 1.3 (0.1) -4.2%
TOTAL 82.2$ 87.7$ 5.5$ 6.7%
2016-17 OPERATING BUDGET OVERVIEW
B-13
$500,000 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.
$1,500,000 to the city’s Workers’ Compensation Fund to cover increased claims
settlements and estimated liability.
Advances are amounts anticipated to be transferred from the General Fund to other 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 below compares
the total FY 2016-17 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 2016-17 Operating Budget, are noted below the chart.
The Policy and Leadership Group consists of all elected officials, the City Manager’s
Office, City Clerk and City Treasurer, the City Attorney’s Office and Community Outreach
and Engagement. The increase of the FY 2016-17 adopted budget includes funding for
the Real Estate Manager position (which was moved from the Finance Department
budget to the City Manager budget), as well as funding in Community Outreach and
Engagement for the Climate Action Plan implementation. Other increases include
Internal Service Fund charges and Professional Services.
The Community and Economic Development Department includes Housing and
Neighborhood Services, Economic Development, Planning, Development Services,
Building Inspection, and Land Use Engineering. The increase over FY 2015-16 is about
$1.2 million, or 12.7 percent, and includes the addition of limited-term staff to assist with
succession planning while ensuring continuous high levels of service, and funding for
GENERAL FUND EXPENDITURES GENERAL FUND EXPENDITURES
BY DEPARTMENT BY DEPARTMENT
(In Millions)
BUDGET BUDGET $%
DEPARTMENT 2015-16 2016-17 CHANGE CHANGE
POLICY & LEADERSHIP GROUP 6.2$ 7.2$ 0.9$ 15.0%
COMMUNITY & ECONOMIC DEV 9.5 10.7 1.2 12.7%
ADM SVCS - FINANCE 4.2 4.2 - 0.4%
ADM SVCS - HUMAN RESOURCES 3.2 3.3 0.1 2.4%
FIRE 20.4 21.1 0.7 3.5%
LIBRARY & CULTURAL ARTS 12.1 12.4 0.3 2.6%
PARKS & RECREATION 15.1 15.6 0.4 3.0%
POLICE 32.3 34.2 1.9 5.9%
PW - ADMINISTRATION 1.6 1.8 0.2 12.6%
PW - ENVIRONMENTAL MANAGEMENT 0.4 0.7 0.3 71.0%
PW - GENERAL SERVICES 8.9 8.3 (0.5) -5.7%
PW - TRANSPORTATION 5.5 6.7 1.2 22.2%
NON-DEPARTMENTAL 16.0 15.7 (0.3) -1.8%
TOTAL 135.3$ 141.8$ 6.5$ 4.8%
2016-17 OPERATING BUDGET OVERVIEW
B-14
consulting services for updating the Housing Element, preparing a parking study,
updating Noise Guidelines, and preparing an Energy Conservation Ordinance as outlined
in the Climate Action Plan. Funding is also included for a lobbyist and community
outreach for the Village Double Tracking project, and to fund the second year of a pilot
program for expedited service from the California Coastal Commission on Carlsbad
projects.
The Administrative Services’ Finance division 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. This budget has remained relatively flat when compared
to the FY 2015-16 budget.
The Administrative Services’ Human Resources division supports the city with staffing
and recruitment, employee development, performance management, and compensation
and labor relations services. The 2.4 percent increase includes $50,000 to fund
increases in legal professional services.
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 2016-17 Operating Budget reflects a
$715,000 (3.5 percent) increase. In addition to negotiated personnel related increases,
funding is included for a full-time Permit Technician as well as additional part-time staff
(an increase of .83 FTE) to assist with background checks and other duties related to the
hiring process. The FY 2016-17 budget also includes a vehicle for the EMS Paramedic
Nurse Coordinator.
The Library and Cultural Arts Department provides staffing and a wide variety of
programming for three library locations, and a cultural arts office. The department’s
budget is projected to increase by $312,000, or 2.6 percent, from FY 2015-16. This
includes funding for increasing costs of the annual Concert in the Parks series, increased
funding for Community Arts Grants and public arts projects throughout the city. An
innovative new program is planned, which will provide mobile library services from a
Library Book Bike.
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. The FY 2016-17
budget is $447,000, or 3 percent
greater than the FY 2015-16
budget. Additional funding is
included to expand the youth
basketball program.
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 increasing by $1.9
2016-17 OPERATING BUDGET OVERVIEW
B-15
million, or 5.9 percent, for FY 2016-17, primarily due to negotiated wage and benefit
increases. Funding was also included for contract services to provide background checks
to streamline the hiring process. The purchase of body worn cameras and associated
storage costs is planned in the next year, along with two additional vehicles for
Community Service Officers to allow for more time spent in the field.
Public Works Administration division has a $197,000, or 12.6 percent increase when
compared to FY 2015-16 due to reallocation of staff to this division.
The Public Works Environmental Management division manages the city’s
environmental programs, which include storm water, habitat and other environmental
maintenance and monitoring programs as well as the implementation of the Climate
Action Plan. The increase of $290,000 from the prior year’s budget includes funding for
a Climate Action Plan Administrator position, and for a contract facilitator to assist in
reporting, training, and coordinating in support of the various programs within this
division.
The Public Works General Services division oversees the city’s fleet and manages the
maintenance of all city-owned facilities, street and storm drain maintenance, and the
Safety Training Center. The FY 2016-17 budget decreased $500,000 from the prior year
due to reorganization within the Public Works departments. In addition to reallocations
to and from other departments within Public Works, funding reflects the addition of one
Public Works Supervisor, and the elimination of two full-time Street Maintenance Worker
positions.
The Public Works Transportation division manages traffic signal operations and
planning, roadway capital projects, asset management (such as the pavement
management program), construction management and inspections, and storm drain
engineering. The FY 2016-17 budget reflects an increase of $1.2 million, or 22.2 percent
over FY 2015-16. Personnel changes included the addition of one Senior Construction
Inspector, and staffing allocation changes to and from other departments within Public
Works. Funding was also included for a Coastal Trolley Study, unplanned traffic signal
repairs, three limited-term interns, and consulting services for implementing the Climate
Action Plan, specifically related to Transportation Demand Management strategies.
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 decrease slightly in FY
2016-17.
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.
For FY 2016-17, the Contingency is budgeted at $1.5 million, with no change when
compared to the prior year.
2016-17 OPERATING BUDGET OVERVIEW
B-16
As reflected in the chart above, the city’s expenditures were reduced significantly with the City
Council’s revised budget in FY 2008-09, and expenditure increases were kept at bay through FY
2012-13. FY 2013-14 expenditures reflected a 10.8 percent increase due to labor costs and
one-time expense for the Poinsettia Fires. The following year, FY 2014-15, estimated
expenditures remained relatively flat. The FY 2015-16 estimated budget reflects an 8.2 percent
increase in expenditures due primarily to increased personnel costs, and the FY 2016-17 budget
is planned with a 4.8 percent increase.
Changes in Other Funds
Special Revenue funds, at $11.4 million, show a $253,000 (2.2 percent) decrease when
compared to FY 2015-16. Budgeted expenditures from the Local Cable Infrastructure Fund are
decreasing by $290,000, while increases are noted in the Rental Assistance program, and the
Buena Vista Channel Maintenance.
Enterprise funds total $71.7 million, an increase of $1.4 million, or 1.9 percent, over the FY
2015-16 Adopted Budget. The most significant increases are in Water Operations, at almost
$1.3 million, and are attributed to increases in the cost of water purchased from the San Diego
County Water Authority (4.3 percent increase in fixed charges and a 7.7 percent increase in
variable costs), and the purchase of 2500 acre feet of desalinated water. The Operating Budget
also includes funding for depreciation replacement transfers related to growth and aging of the
water infrastructure system.
Wastewater operations are projected to remain relatively flat.
Golf Course operations are expected to decrease slightly, $186,000, or 2.3 percent over FY
2015-16, with slight reductions in most cost centers.
2016-17 OPERATING BUDGET OVERVIEW
B-17
The Internal Service funds total $23.9 million, with an increase of $2.3 million, or 10.6 percent
over FY 2015-16. Significant changes are outlined below.
The Workers’ Compensation budget is anticipated to increase $1 million due to
increased claims and settlements.
The General Liability/Risk Management budget reflects a very modest increase of
approximately $28,000, or 1.4 percent. A 0.50 full-time position was added to this
department to accommodate actual workload. Decreases in negotiated premiums
partially offset the increase in personnel costs.
The Self-Insured Benefits budget shows a decrease of approximately $35,000, or 3.2
percent, due to a decrease in the annual Other Post-Employment Benefits (OPEB)
payment for retiree health care.
The Vehicle Replacement budget shows a minor increase of $89,000, or 2.5 percent.
There are 50 planned vehicle replacements in the upcoming year, at a total cost of $3.6
million.
The Vehicle Maintenance costs are expected to decrease approximately $170,000, or
5.1 percent, due to reductions in gas and oil expenditures, as well as overall maintenance
costs. Replacement of vehicles lagged for several years and are now occurring at a more
accelerated rate. The total fleet composition is therefore newer in overall age and also
includes more fuel efficient vehicles, which is expected to result in lower fuel and
maintenance costs.
The Information Technology budget includes both operating and replacement
expenditures. The overall increase is $1.3 million, or 15.8 percent. While replacement
of assets increased about $250,000, the bulk of the overall increase is in the department’s
operating budget. Funding is included for one full-time Network Engineer and temporary
contractual staffing in the Business Intelligence division to assist with data reporting
needs of the organization. The department is anticipating about $700,000 in increases
for software maintenance and contractual services for both existing and new technology
projects.
The budget for the Redevelopment Obligation Retirement Funds (RORF) has
remained flat, when compared to the previous year. The Recognized Obligation
Payments Schedule (ROPS) identifies financial commitments of the former
Redevelopment Agency, including $250,000 in administrative costs, to be paid from
semi-annual tax increment revenue received by the Successor Agency and annual debt
service requirements. 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.
SUMMARY
The Operating Budget for FY 2016-17 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 2016-17 proposed
spending plan to ensure ongoing financial obligations of the city are met. The Carlsbad economy
is well diversified and continues to provide stability to the city’s revenue base, bolstered by strong
assessed property values, retail sales, tourism and, in the coming few years, development
activity. Most of the city’s major revenue sources are improving with the exception of sales tax,
which is due to a timing difference in receipts due to the wind down of the state’s Triple Flip.
2016-17 OPERATING BUDGET OVERVIEW
B-18
Carlsbad continues to benefit form a strong and diverse economic base, and has maintained
financial policies that continue to protect the city from the vagaries of the business cycle,
increasing costs, and unfunded mandates. The city continues to evaluate opportunities to
strengthen financial policies, identify opportunities to improve business practices and provide the
greatest service level possible with finite resources, and continue to provide an environment that
fosters excellence.
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
PROJECTED FUND BALANCES
UNRESERVED PROJECTED
BALANCE PROJECTED PROJECTED BALANCE
FUND JULY 1, 2015 REVENUES EXPENDITURES JUNE 30, 2016
GENERAL FUND $80,236,278 *$141,985,000 $134,279,127 $87,942,151
TOTAL GENERAL FUND 80,236,278 *141,985,000 134,279,127 87,942,151 *
SPECIAL REVENUE
AFFORDABLE HOUSING 14,805,651 933,500 642,912 15,096,239
BUENA VISTA CHANNEL MAINTENANCE 1,363,467 103,000 128,000 1,338,467
CITIZEN'S OPTION FOR PUBLIC SAFETY 265,229 127,000 193,000 199,229
COMMUNITY ACTIVITY GRANTS 1,037,541 8,000 10,000 1,035,541
COMMUNITY DEVELOPMENT BLOCK GRANT 280,796 391,000 507,584 164,212
CULTURAL ARTS DONATIONS 228,387 21,500 25,000 224,887
LIBRARY AND ARTS ENDOWMENT FUND 262,215 2,700 1,000 263,915
LIBRARY GIFTS/BEQUESTS 341,218 308,200 200,000 449,418
LIGHTING AND LANDSCAPING DISTRICT NO. 2 2,268,598 611,500 400,000 2,480,098
LOCAL CABLE INFRASTRUCTURE FUND 744,010 375,400 600,000 519,410
MEDIAN MAINTENANCE 98,682 1,109,000 850,000 357,682
PARKING IN LIEU 460,036 97,000 44,000 513,036
POLICE ASSET FORFEITURE 409,661 34,000 125,000 318,661
POLICE GRANTS (91,813)341,813 250,000 0
RECREATION DONATIONS 291,109 54,000 60,100 285,009
RENTAL ASSISTANCE - SECTION 8 496,214 5,690,000 6,030,000 156,214
SENIOR DONATIONS 319,681 23,000 28,200 314,481
STREET LIGHTING 1,504,152 898,000 893,000 1,509,152
STREET TREE MAINTENANCE 27,968 573,000 570,000 30,968
TOTAL SPECIAL REVENUE 25,112,802 11,701,613 11,557,796 25,256,619
ENTERPRISE
WATER OPERATIONS 16,968,661 36,723,848 34,094,799 19,597,710
RECYCLED WATER OPERATIONS 7,433,024 8,159,492 7,619,809 7,972,707
WASTEWATER OPERATIONS 4,625,864 12,876,361 11,229,874 6,272,351
SOLID WASTE MANAGEMENT 10,868,869 3,416,435 2,874,242 11,411,062
GOLF COURSE 1,272,717 8,106,525 7,694,335 1,684,907
TOTAL ENTERPRISE 41,169,135 69,282,661 63,513,059 46,938,737
INTERNAL SERVICE
WORKERS' COMPENSATION 604,829 3,149,040 4,258,000 (504,131)
RISK MANAGEMENT 1,633,855 2,008,500 2,002,259 1,640,096
SELF-INSURED BENEFITS 1,768,384 929,000 945,602 1,751,782
VEHICLE MAINTENANCE 425,812 2,935,410 2,580,000 781,222
VEHICLE REPLACEMENT 16,341,082 2,539,100 2,892,000 15,988,182
INFORMATION TECHNOLOGY 5,428,232 8,037,973 8,573,702 4,892,503
TOTAL INTERNAL SERVICE 26,202,194 19,599,023 21,251,563 24,549,654
REDEVELOPMENT OBLIGATION RETIREMENT FUNDS
VILLAGE RDA OBLIGATION RETIREMENT FUND 1,152,894 1,644,000 1,094,000 1,702,894
TOTAL REDEVELOPMENT OBLIGATION RETIREMENT FUND 1,152,894 1,644,000 1,094,000 1,702,894
TOTAL OPERATING FUNDS $173,873,303 $244,212,297 $231,695,545 $186,390,055
* FOR THE GENERAL FUND ONLY THIS REPRESENTS UNASSIGNED FUND BALANCE.
B-19
CITY OF CARLSBAD
OPERATING FUNDS
PROJECTED FUND BALANCES
PROJECTED PROJECTED
BALANCE ESTIMATED ADOPTED BALANCE
FUND JULY 1, 2016 REVENUES BUDGET JUNE 30, 2017
GENERAL FUND $87,942,151 *$146,150,403 $141,774,029 $92,318,525 *
TOTAL GENERAL FUND 87,942,151 *146,150,403 141,774,029 92,318,525 *
SPECIAL REVENUE
AFFORDABLE HOUSING 15,096,239 753,727 572,613 15,277,353
BUENA VISTA CHANNEL MAINTENANCE 1,338,467 113,000 186,400 1,265,067
CITIZEN'S OPTION FOR PUBLIC SAFETY 199,229 169,000 158,672 209,557
COMMUNITY ACTIVITY GRANTS 1,035,541 8,000 10,000 1,033,541
COMMUNITY DEVELOPMENT BLOCK GRANT 164,212 600,000 518,171 246,041
CULTURAL ARTS DONATIONS 224,887 16,000 70,000 170,887
LIBRARY AND ARTS ENDOWMENT FUND 263,915 2,700 6,000 260,615
LIBRARY GIFTS/BEQUESTS 449,418 223,500 313,006 359,912
LIGHTING AND LANDSCAPING DISTRICT NO. 2 2,480,098 611,000 305,248 2,785,850
LOCAL CABLE INFRASTRUCTURE FUND 519,410 375,000 235,415 658,995
MEDIAN MAINTENANCE 357,682 739,000 1,073,050 23,632
PARKING IN LIEU 513,036 5,000 44,000 474,036
POLICE ASSET FORFEITURE 318,661 34,000 101,346 251,315
POLICE GRANTS 0 0 0 0
RECREATION DONATIONS 285,009 41,000 132,950 193,059
RENTAL ASSISTANCE - SECTION 8 156,214 5,859,200 6,013,070 2,344
SENIOR DONATIONS 314,481 23,000 47,500 289,981
STREET LIGHTING 1,509,152 886,000 1,010,973 1,384,179
STREET TREE MAINTENANCE 30,968 583,000 570,382 43,586
TOTAL SPECIAL REVENUE 25,256,619 11,042,127 11,368,796 24,929,950
ENTERPRISE
WATER OPERATIONS 19,597,710 38,402,350 39,739,425 18,260,635
RECYCLED WATER OPERATIONS 7,972,707 8,796,000 7,778,974 8,989,733
WASTEWATER OPERATIONS 6,272,351 12,786,600 12,428,882 6,630,069
SOLID WASTE MANAGEMENT 11,411,062 3,546,800 3,821,130 11,136,732
GOLF COURSE 1,684,907 6,976,272 7,970,967 690,212
TOTAL ENTERPRISE 46,938,737 70,508,022 71,739,378 45,707,381
INTERNAL SERVICE
WORKERS' COMPENSATION (504,131)3,943,780 4,261,007 (821,358)
RISK MANAGEMENT 1,640,096 1,986,580 2,028,215 1,598,461
SELF-INSURED BENEFITS 1,751,782 910,000 1,040,000 1,621,782
VEHICLE MAINTENANCE 781,222 3,204,509 3,159,868 825,863
VEHICLE REPLACEMENT 15,988,182 2,566,096 3,648,173 14,906,105
INFORMATION TECHNOLOGY 4,892,503 8,945,800 9,726,262 4,112,041
TOTAL INTERNAL SERVICE 24,549,654 21,556,765 23,863,525 22,242,894
REDEVELOPMENT OBLIGATION RETIREMENT FUNDS
VILLAGE RDA OBLIGATION RETIREMENT FUND 1,702,894 1,849,000 1,400,525 2,151,369
TOTAL REDEVELOPMENT OBLIGATION RETIREMENT FUND 1,702,894 1,849,000 1,400,525 2,151,369
TOTAL OPERATING FUNDS $186,390,055 $251,106,317 $250,146,253 $187,350,119
* FOR THE GENERAL FUND ONLY THIS REPRESENTS UNDESIGNATED, UNRESERVED FUND BALANCE.
B-20
Policy and Leadership Group Policy Ldrshp
Policy Ldrshp
Policy and Leadership Group
City Council
City Manager
Community
Outreach &
Engagement
City Attorney City Clerk
Records
City Treasurer
Policy & Leadership
Org Chart by Function
C-1
PROGRAM: POLICY & LEADERSHIP
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $3,643,926 $4,229,706 $4,488,842 $4,806,413
MAINTENANCE & OPERATIONS 1,467,182 1,692,557 1,882,820 2,595,329
CAPITAL OUTLAY 44,976 292,811 389,988 5,000
GRAND TOTAL $5,156,084 $6,215,074 $6,761,650 $7,406,742
FULL TIME POSITIONS 23.50 25.50 25.75 25.75
HOURLY/FTE POSITIONS 1.50 4.89 4.89 4.89
CITY COUNCIL
7%
CITY CLERK
14%
TREASURER
3%
CITY MANAGER
28%
COMMUNICATIONS
28%
CITY ATTORNEY
20%
Admin Services Admin Services
Admin Services
Admin Services
Administrative
Services Director
Human
Resources
Worker’s
Compensation
Self-Insured
Benefits
Finance Information
Technology
Risk
Management
Administrative Services
Org Chart by Function
D-1
PROGRAM: ADMINISTRATIVE SERVICES
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $7,627,657 $8,235,290 $9,237,543 $9,127,191
MAINTENANCE & OPERATIONS 10,152,120 14,537,181 13,221,962 15,655,699
CAPITAL OUTLAY 1,123,200 428,393 651,788 887,265
GRAND TOTAL $18,902,977 $23,200,864 $23,111,293 $25,670,155
FULL TIME POSITIONS 63.00 65.00 63.00 64.00
HOURLY/FTE POSITIONS 2.75 2.00 3.20 3.20
FINANCE
29%
HUMAN
RESOURCES
33%
INFORMATION
TECHNOLOGY
38%
D-2
PROGRAM: FINANCE
FUND: VARIOUS
PROGRAM GROUP: FINANCE SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $3,257,437 $3,384,950 $3,795,958 $3,816,825
MAINTENANCE & OPERATIONS 1,888,796 4,238,026 3,432,763 3,558,096
CAPITAL OUTLAY 23,165 7,870 0 0
GRAND TOTAL $5,169,398 $7,630,846 $7,228,721 $7,374,921
FULL TIME POSITIONS 31.50 31.50 32.50 33.00
HOURLY/FTE POSITIONS 1.00 1.00 1.00 1.00
D-9
PROGRAM: HUMAN RESOURCES
FUND: GENERAL & INTERNAL SERVICE
PROGRAM GROUP: HUMAN RESOURCES SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $1,318,084 $1,457,830 $1,570,199 $1,543,051
MAINTENANCE & OPERATIONS 5,282,970 6,701,294 5,900,766 7,025,921
CAPITAL OUTLAY 2,527 1,561 12,310 0
GRAND TOTAL $6,603,581 $8,160,685 $7,483,275 $8,568,972
FULL TIME POSITIONS 9.00 11.00 11.00 11.00
HOURLY/FTE POSITIONS 0.75 0.00 0.70 0.70
HUMAN
RESOURCES
38%
WORKERS
COMPENSATION
50%
SELF INSURED
BENEFITS
12%
Comm Dev
Community Development
Comm Dev
Community Development
Community &
Economic
Development Director
Housing &
Neighborhood
Services
Building Economic
Development
Land
Development
Engineering
Planning
Community & Economic Development
Org Chart by Function
E-1
PROGRAM: COMMUNITY DEVELOPMENT
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $6,549,585 $6,738,844 $7,673,443 $8,007,290
MAINTENANCE & OPERATIONS 8,941,653 10,197,808 10,047,966 11,174,763
CAPITAL OUTLAY 69,995 65,706 75,000 0
GRAND TOTAL $15,561,233 $17,002,358 $17,796,409 $19,182,053
FULL TIME POSITIONS 54.00 56.00 60.75 63.75
HOURLY/FTE POSITIONS 2.64 3.34 2.34 2.84
COMMUNITY &
ECONOMIC
DEVELOPMENT
49%
HOUSING &
NEIGHBORHOOD
SERVICES
51%
E-2
PROGRAM: COMMUNITY & ECONOMIC DEVELOPMENT
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $5,426,298 $5,555,519 $6,216,076 $6,454,129
MAINTENANCE & OPERATIONS 2,071,379 2,770,216 2,350,819 3,236,634
CAPITAL OUTLAY 0 4,265 45,000 0
GRAND TOTAL $7,497,677 $8,330,000 $8,611,895 $9,690,763
FULL TIME POSITIONS 44.00 44.00 47.75 50.75
HOURLY/FTE POSITIONS 2.00 3.00 2.00 2.00
ADMINISTRATION
12%
LAND
DEVELOPMENT
ENGINEERING
21%
PLANNING
40%
BUILDING
INSPECTION
20%
ECONOMIC
DEVELOPMENT
7%
E-13
PROGRAM: HOUSING & NEIGHBORHOOD SERVICES
FUND: VARIOUS
PROGRAM GROUP: COMMUNITY & ECONOMIC DEVELOPMENT SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $1,123,287 $1,183,325 $1,457,367 $1,553,161
MAINTENANCE & OPERATIONS 6,870,274 7,427,592 7,697,147 7,938,129
CAPITAL OUTLAY 69,995 61,441 30,000 0
GRAND TOTAL $8,063,556 $8,672,358 $9,184,514 $9,491,290
FULL TIME POSITIONS 10.00 12.00 13.00 13.00
HOURLY/FTE POSITIONS 0.64 0.34 0.34 0.84
NEIGHBORHOOD
SERVICES
11%
AFFORDABLE
HOUSING
6%
SECTION 8 RENTAL
ASSISTANCE
63%
COMMUNITY
DEVELOPMENT
BLOCK GRANT
6%
VILLAGE
OBLIGATION
RETIREMENT FUND
15%
Comm Services
Community Services
Comm Services
Community Services
Library and Cultural
Arts Director
Dove Lane Library Cole Library Learning Center Cultural Arts Office
Parks & Recreation
Director
Parks, Trails & Lagoons Recreation Services Park Planning
Community Services
Org Chart by Function
F-1
PROGRAM: COMMUNITY SERVICES
FUND: VARIOUS
PROGRAM GROUP: VARIOUS SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $14,301,348 $14,267,359 $15,617,525 $16,056,643
MAINTENANCE & OPERATIONS 18,520,298 19,925,400 21,560,772 21,857,340
CAPITAL OUTLAY 692,297 183,401 318,187 188,158
GRAND TOTAL $33,513,943 $34,376,160 $37,496,484 $38,102,141
FULL TIME POSITIONS 118.85 111.85 108.65 107.65
HOURLY/FTE POSITIONS 135.10 137.78 139.83 139.83
LIBRARY & ARTS
33%
PARKS &
RECREATION
67%
F-13
PROGRAM: PARKS & RECREATION
FUND: VARIOUS
PROGRAM GROUP: PARKS & RECREATION SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $7,436,751 $7,410,498 $8,129,197 $8,364,221
MAINTENANCE & OPERATIONS 14,731,407 15,859,266 16,781,614 16,813,787
CAPITAL OUTLAY 676,830 172,699 116,000 168,790
GRAND TOTAL $22,844,988 $23,442,463 $25,026,811 $25,346,798
FULL TIME POSITIONS 67.60 61.60 58.15 57.15
HOURLY/FTE POSITIONS 73.60 77.67 80.00 80.00
ADMINISTRATION &
PROGRAMS
36%
MAINTENANCE
33%
GOLF COURSE
31%
Public Safety
Public Safety
Public Safety
Public Safety
Police Chief
Field Operations
Patrol
Communications
Investigations
Information Technology
Records
Special
Investigations
Support Services
Fire Chief
Emergency Preparedness Emergency Operations Support Services Fire Prevention
Public Safety
Org Chart by Function
G-1
PROGRAM: PUBLIC SAFETY
FUND: GENERAL & SPECIAL REVENUE
PROGRAM GROUP: VARIOUS SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $38,284,364 $38,954,551 $40,494,610 $44,150,298
MAINTENANCE & OPERATIONS 8,828,116 9,643,681 11,085,095 11,313,846
CAPITAL OUTLAY 349,414 400,494 1,547,764 130,078
GRAND TOTAL $47,461,894 $48,998,726 $53,127,469 $55,594,222
FULL TIME POSITIONS 249.00 251.00 257.00 258.00
HOURLY/FTE POSITIONS 4.00 4.00 4.00 4.00
FIRE
38%
POLICE
62%
G-12
PROGRAM: FIELD OPERATIONS
FUND: GENERAL
PROGRAM GROUP: POLICE ACCT NO. 0012120
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $10,843,871 $10,899,287 $11,068,585 $12,981,459
MAINTENANCE & OPERATIONS 1,141,974 1,328,103 1,648,331 1,564,222
CAPITAL OUTLAY 7,742 93,390 878,742 26,000
GRAND TOTAL $11,993,587 $12,320,780 $13,595,658 $14,571,681
FULL TIME POSITIONS 70.47 71.47 73.60 77.00
HOURLY/FTE POSITIONS 0.00 0.00 0.00 0.00
WORK PROGRAM:
Respond to calls for service and provide emergency services, preventative patrol, traffic enforcement, and special
enforcement in the community. Enforce laws and ordinances, preserve the peace, and provide for the protection of life
and property through proactive programs of enforcement and prevention.
PROGRAM ACTIVITIES:
Calls for Service
Respond to calls for emergency and non-emergency services.
Investigate crimes.
Enforce laws and ordinances.
Reports
Take reports including crime, arrest, collisions, incident, citation, and field interview.
Response Time
Respond to priority one calls in less than six minutes.
WORKLOAD STATISTICS:
CY2011 CY2012 CY2013 CY2014 CY2015
Police Activities/Calls for Service 93,248 90,122 87,976 91,314 92,061
Cases 7,963 8,314 8,296 8,349 9,253
PERFORMANCE/WORKLOAD MEASURES:
2015 Average Response Times
Priority one calls are those in which there is an immediate threat to
life or property. Our goal is to respond to all priority one calls in an
average of six minutes or less. Priority one calls were 3 percent of
our total call volume in 2015. Priority two (urgent calls) and priority
three (calls for reports) made up 80 percent of our total call volume.
The remaining 17 percent were priority four calls.
SIGNIFICANT CHANGES:
Some positions were reallocated within the department’s divisions to better reflect workload.
Public Works
Public Works
Public Works
Public Works
Public Works Director
Environmental
Management General
Services Transportation Utilities
Administration
Public Works
Org Chart by Function
H-1
PROGRAM: PUBLIC WORKS
FUND: GENERAL & SPECIAL REVENUE
PROGRAM GROUP: VARIOUS SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $15,950,130 $16,132,035 $19,131,826 $20,004,942
MAINTENANCE & OPERATIONS 64,492,153 60,944,994 64,229,786 65,778,302
CAPITAL OUTLAY 2,245,145 1,651,092 3,520,618 3,837,273
GRAND TOTAL $82,687,428 $78,728,121 $86,882,230 $89,620,517
FULL TIME POSITIONS 159.40 160.40 162.85 163.85
HOURLY/FTE POSITIONS 4.59 5.75 5.25 8.00
ADMINISTRATION
2%
TRANSPORTATION
8%
PROPERTY & FLEET
20%
ENVIRONMENTAL
MANAGEMENT
3%
UTILITIES
67%
H-3
PROGRAM: TRANSPORTATION
FUND: GENERAL & SPECIAL REVENUE
PROGRAM GROUP: TRANSPORTATION SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $3,416,045 $3,209,200 $3,948,808 $4,480,997
MAINTENANCE & OPERATIONS 1,869,002 1,966,253 1,943,692 2,645,011
CAPITAL OUTLAY 11,847 30,245 0 55,500
GRAND TOTAL $5,296,894 $5,205,698 $5,892,500 $7,181,508
FULL TIME POSITIONS 26.20 28.40 29.75 33.00
HOURLY/FTE POSITIONS 0.50 0.00 0.00 1.50
H-11
PROGRAM: GENERAL SERVICES
FUND: VARIOUS
PROGRAM GROUP: GENERAL SERVICES SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $5,330,836 $5,401,974 $5,761,034 $5,478,251
MAINTENANCE & OPERATIONS 7,562,669 8,145,671 9,050,344 8,606,348
CAPITAL OUTLAY 2,212,647 1,479,587 3,520,618 3,774,773
GRAND TOTAL $15,106,152 $15,027,232 $18,331,996 $17,859,372
FULL TIME POSITIONS 61.55 59.80 55.70 51.30
HOURLY/FTE POSITIONS 3.09 4.75 4.75 6.00
H-17
PROGRAM: ENVIRONMENTAL MANAGEMENT
FUND: GENERAL & ENTERPRISE
PROGRAM GROUP: ENVIRONMENTAL MANAGEMENT SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $804,676 $819,221 $1,001,325 $1,253,832
MAINTENANCE & OPERATIONS 1,019,191 1,083,104 1,505,582 1,611,419
CAPITAL OUTLAY 17,302 58,139 0 7,000
GRAND TOTAL $1,841,169 $1,960,464 $2,506,907 $2,872,251
FULL TIME POSITIONS 8.05 7.80 8.50 9.50
HOURLY/FTE POSITIONS 0.00 0.00 0.00 0.00
ENVIRONMENTAL
MANAGEMENT
24%
SOLID WASTE
26%
STORM WATER
PROTECTION
50%
H-26
PROGRAM: UTILITIES
FUND: ENTERPRISE
PROGRAM GROUP: UTILITIES SUMMARY
2013-14
ACTUAL
2014-15
ACTUAL
2015-16
BUDGET
2016-17
BUDGET
PERSONNEL $5,682,885 $5,950,452 $7,265,910 $7,381,670
MAINTENANCE & OPERATIONS 53,646,332 49,246,979 51,322,317 52,565,611
CAPITAL OUTLAY 3,349 83,121 0 0
GRAND TOTAL $59,332,566 $55,280,552 $58,588,227 $59,947,281
FULL TIME POSITIONS 57.60 58.40 60.85 60.20
HOURLY/FTE POSITIONS 1.00 1.00 0.50 0.50
Capital Improvement Program
Capital Improvement Program
Capital Improvement Program
Capital Improvement Program
Overview
Overview
Overview
Overview
2016-17 CAPITAL IMPROVEMENT PROGRAM
I-1
OVERVIEW
The City of Carlsbad Capital Improvement Program (CIP) is a 15 year 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 upcoming fiscal year. Information is shown in
subsequent years to provide the most comprehensive information about all of the known future
facilities the City of Carlsbad plans to construct, refurbish, replace, or modify.
The Fiscal Year (FY) 2016-17 Capital Improvement Program outlines approximately $64.5 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 $51.7
million. 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.
In addition to new facilities corresponding to new development, aging infrastructure requires
maintenance and at times, replacement. About 50 percent of Carlsbad’s comprehensive capital
plan encompasses numerous asset management programs to ensure adequate inspection,
maintenance, and replacement of buildings and parks, water, sewer and drainage systems,
bridges, and roadways systems.
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
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.
The CIP and the Operating Budget are integral parts of the total city financing plan. Each year,
staff begins the process by evaluating the construction schedules for city facilities in conjunction
with the workload of the staff needed to complete the projects. Staff considers City Council Goals
and Work Plan, to ensure that the CIP is in alignment with the Council and Community Vision. In
the FY 2016-17 CIP, there are approximately 235 continuing and new projects planned in the next
15 years.
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Projects were analyzed using the criteria shown
in the table. Project timing was also reviewed,
including evaluation of the availability of capital
construction funds, operating funds, and other
resources needed.
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 FY 2030-31 (the next 15 years). All construction costs are
estimates and only projects scheduled for FY 2016-17 funding receive appropriations. 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 is currently implementing park projects which were a result of a needs assessment and
subsequent updated master plans. The city worked with the community to identify current needs
and priorities for parks and recreation programs, and summarized the input in the Parks &
Recreation Department Master Plan. The city then updated individual master plans for Poinsettia
Community Park, Aviara Community Park, Pine Avenue Community Park and Leo Carrillo Ranch
Historic Park.
Aviara Community Park Event Gathering Space and Picnic Areas – The additional park amenities
include a large passive outdoor community social space, group picnic areas, a perimeter walking
path and a warming kitchen complete with appliances to support outside catering and food and
beverage services and small events. The total cost is $3.2 million.
Poinsettia Park Multi-Use/Multi-Generational Community Center – As a result of the needs
assessment, funds are included to study the feasibility of a multi-use, multi-generation indoor
community center, located at Poinsettia Park, which will serve a larger cross section of the
community. Additional planned improvements include a fenced dog park for both large and small
dogs, pickleball courts, updated tot lots and a multi-sports arena with a picnic area and artificial turf
field, at a total cost of $4.4 million.
Project Ranking Criteria
1. Is the project required to ensure the health and
safety of the citizens, as the result of a legal
mandate?
2. Is the project needed soon for growth
management compliance?
3. Is the project needed to meet specific city
standards? (Traffic signals, street lights).
4. Does the project complete or provide part of
the basic infrastructure or complement a
regional plan (example: a linking road
segment)?
5. Are there other reasons to construct the project
(example: Council priority, timing or funding
opportunity, public demand)? Are operating
funds available to operate the facility?
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Leo Carrillo Phase III – This
historic park is located in the
southeast quadrant of the city.
Expenditures include restoration
of the horse stables,
implementation of an outdoor
interpretive plan to educate and
focus on the life and times of Leo
Carrillo, his ranch years, and
native people and plants. Also
included is visitor way-finding
signage and additional lighting.
The total estimated cost is $2.4
million.
Pine Avenue Park Community Facility and Garden Areas – The remaining elements of the park
include a multi-purpose community center and gymnasium, a community garden with rentable
plots, and a botanical/ornamental garden. The community center and gymnasium will include
basketball, volleyball, gymnastics, multi-purpose rooms, meeting rooms, a teen center, and office
space. This final phase of the park is estimated at $11.1 million.
Robertson Ranch Master Plan – This 13 acre park site is located within the Robertson Ranch
development located in the northeast quadrant of the city. Funding in the amount of $200,000 is
included for the development of a master plan.
CIVIC FACILITY IMPROVEMENTS
Civic facilities include a variety of facilities from which the city can offer its services to the public.
Barrio Street Lighting – An analysis of the need for additional street lighting throughout the Barrio
resulted in a project to add pedestrian scaled lighting around the perimeter of Pine Avenue Park,
at a cost of $660,000.
Maintenance & Operations Center – This city facility will bring together offices, the maintenance
yard, a warehouse, and parking to accommodate the various work groups at one location, currently
planned near the existing Safety Center and Fleet yard. The total estimated project cost is $29.8
million.
Facilities Maintenance – As the city facilities begin to age, maintenance
and repair projects are needed to keep them in good condition. In the next
five years, $8.6 million has been allocated to projects, including projects at
the following locations:
Aviara Community Park – Synthetic turf replacement
Beach Access Repairs/Upgrades
Cannon Park Restroom
City Facility Accessibility Upgrades
Hosp Grove Park Improvements
Ocean Street Restroom
Pine Avenue Park Synthetic Turf Replacement
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Trails – Additional funding is included for the Lake Calavera Trails system for restrooms and a
drinking fountain.
Village and Barrio Public Gathering Spaces – Funding in the amount of $345,000 is included to
conduct outreach to determine the best locations for public gathering spaces, and, once locations
have been identified, to prepare design concepts, illustrating outdoor gathering places with varied
amenities.
STREET AND CIRCULATION PROJECTS
People of all ages and abilities want to go places safely and conveniently in Carlsbad. Whether
they drive, walk, bike, or ride a bus or train. The livable streets concept, also called "complete
streets," acknowledges that streets are an important part of the livability of today's communities
and ought to be for everyone. Carlsbad has made livable streets a priority when planning and
constructing improvements to city roadways. In addition to constructing improvements, the city
continues to invest in the maintenance and operation of the transportation infrastructure by
providing timely repairs and rehabilitation of the public assets associated with the roadways and
public rights of way throughout the city.
ADA Improvements – ADA projects throughout the city are scheduled for $1 million in funding over
the next five years. The project includes various accessibility improvements, including sidewalk
curb ramps and pedestrian signals.
Avenida Encinas Widening – Widening to full secondary arterial standards along Avenida Encinas
from Palomar Airport Road to just south of Embarcadero Lane is scheduled for design in FY 2016-
17. The CIP includes $5.4 million to fund this project in the next five years.
Bridge Preventative Maintenance Program – This is a new program designed to perform
preventative maintenance activities on bridges throughout the city, at a total cost of $1.5 million.
Carlsbad Boulevard Pedestrian Lighting – This project will install pedestrian scale lighting along
both sides of Carlsbad Boulevard between Tamarack Avenue and State Street at a total cost of
$1.3 million.
Carlsbad Boulevard and Tamarack Avenue Pedestrian Improvements – Improvements at the
intersection of Carlsbad Boulevard and Tamarack Avenue includes installation of new concrete
curb, gutter, sidewalk and pedestrian ramps at a total cost of $2.9 million.
Concrete Repair and Maintenance – The proposed spending plan included $1 million in the next
five years for repairs to sidewalks, curb and gutter, pedestrian ramps, driveway approaches and
cross gutters.
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, in addition to other improvements, such
as median construction. The projects include widening from Cassia Road to Camino Vida Roble,
Arenal Road to La Costa Avenue, Lisa Street to Crestview Drive and Tamarack Avenue to Chestnut
Avenue. In the next five years, $5.1 million in additional funding is included for these projects,
which are expected to cost over $20 million by completion.
Intersection Improvements – Two intersection projects along El Camino Real, at Cannon Road and
at College Boulevard are scheduled to receive an additional $2.6 million in the next five years.
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
2016-17 CAPITAL IMPROVEMENT PROGRAM
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sealing and overlay of the existing street surface. In addition, any problem areas are addressed
as they are identified. The FY 2016-17 CIP has $12.6 million budgeted in the next five years for
this program.
Parking Lot Maintenance Program – Parking lot maintenance is a relatively new program and is
scheduled to receive funding of $845,000 in the next five years.
Poinsettia Lane Extension from Cassia Road to Skimmer Court – Completion of this segment of
Poinsettia Lane is the final link between Aviara Parkway and El Camino Real. The total cost is
estimated at $14 million.
Road Diet and Traffic Calming Projects along Chestnut Avenue, Valley Street, Kelly Drive, and La
Costa Avenue – Several projects are planned in the next five years to provide complete street
solutions so that the varied user of these roads, including pedestrians and bicyclists, are provided
for in a balanced and equitable manner. The total cost is estimated at $9 million.
Traffic Signals – In the next five years, four traffic signal installations are planned at the following
locations, at a total cost of $780,000:
El Fuerte Street and Rancho Pancho
Faraday Avenue and Camino Hills Drive
Faraday Avenue and Palmer Way
La Costa Avenue and Levante Street
Village and Barrio Traffic Circles – Installation of traffic
circles at intersections throughout the Village and Barrio
is planned at a total cost of $1.2 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 with impact fees collected with new development. As the city
ages, it will become necessary to repair and replace the lines that already exist, and an increase
in these projects is anticipated in future years. In the next five years, an additional $43.2 million in
funding is scheduled for both new and replacement water and sewer projects.
Vista/Carlsbad Interceptor & Agua Hedionda Lift Station Replacement – This project consists of a
set of individual projects that will ultimately construct a parallel sewer interceptor system to
accommodate existing and future sewer flows from the cities of Vista and Carlsbad. The individual
projects include a main in Jefferson Street, replacement of the Agua Hedionda Lift Station, and a
main from the lift station to the Encina Wastewater Facility. The overall total cost estimate for this
set of projects totals $68 million, of which approximately 64 percent is funded by the City of Vista
and 36 percent by the City of Carlsbad.
Wastewater
Other wastewater facilities scheduled for construction or replacement within the next five years
include:
Buena Interceptor Sewer Improvements
Faraday/El Camino Real Sewer Replacement
Foxes Landing Lift Station Wetwell and Pump Replacement
Las Palmas Trunk Sewer
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Marron Road
North Batiquitos
Quarry Creek Sewer Extension
In addition to the new construction and replacement projects and ongoing condition assessments,
repairs and upgrades to the city’s wastewater facilities are expected to cost $3.5 million in the next
five years.
Water Lines
Major water facilities scheduled for construction or replacement within the next five years are
estimated at $38 million, and include the following locations:
Aviara Parkway and Plum Tree
Carlsbad Boulevard – South of Avenida Encinas
Carlsbad Boulevard – Terramar
Fire Flow System Improvements
La Costa High Reservoir Inlet Pipeline
Maerkle Pump Station Improvements and Transmission Main
Maerkle Reservoir Floating Cover Replacement
Santa Fe II Inlet Pipeline
Recycled Water Expansion
Expansion to the Carlsbad Water
Recycling Facility, including construction
of additional pipelines and a reservoir, are
anticipated to cost $33 million. These
facilities are expected to meet the 76
percent increase in future recycled water
demand. The expansion is expected to
increase the recycled water supply from 4
to up to 8 million gallons per day (mgd).
With diminishing potable water resources
available, alternative supplies such as
recycled and desalinated water become
increasingly important in supplementing
the total water supply.
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 additional $3.3 million will be added to the program in the
next five years.
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CAPITAL PROJECTS THROUGH FISCAL YEAR 2030-31
The CIP for FY 2016-17 to FY 2030-31 outlines approximately 235 projects at a cost of $463 million
as shown below:
OVERVIEW OF FY 2016-17 TO 2030-31
The spending plan includes $45.2, million, or 10 percent for future park development projects
located within all four quadrants of the city.
Approximately 28 percent of future expenditures, or $128.6 million, are planned for street and traffic
signal construction projects. Projects include several road-widening projects, road diet and traffic
calming projects, Carlsbad Boulevard Realignment, and funding for sidewalk construction, concrete
repair work, ADA projects, and parking lot and pavement maintenance.
Wastewater projects are expected to cost over $98.8 million, or 21 percent for numerous pipeline
construction and rehabilitation projects, as well as improvements to the Encina Wastewater
Treatment facility.
Future water and recycled water projects include construction of new waterlines, both potable and
recycled, and expansion of the Carlsbad Water Recycling Facility. Replacement of existing potable
waterlines and reservoir improvements are also included in this category. A total of $79.5 million,
or 17 percent of the total CIP, is planned for these projects.
Construction and maintenance of civic facilities such as libraries, administrative buildings, and
police and fire facilities are currently estimated at $75.2 million, or 16 percent of the total planned
capital expenditures to build out.
Drainage projects are 4 percent of the total spending plan, at $17.6 million and the remaining 4
percent, or $18.2 million are for loans and repayments. There are times when one fund will loan
money to another fund to cover a temporary shortfall due to the timing of revenues and
expenditures.
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.
Project Type Percent Total Cost
Streets/Circulation 28%128,648,553
Civic Projects 16%75,224,860
Wastewater 21%98,830,483
Parks 10%45,229,920
Water 17%79,482,800
Drainage 4%17,603,507
Other (loans)4%18,180,162
Total Future 100%463,200,285
CIP Projects - All Future Project Costs
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These projects are:
Business Park Recreational Facility (partial)
Cannon Lake Park
Carlsbad Boulevard Widening Mountain View to Northerly City Limits (partial)**
Carlsbad Boulevard/Palomar Airport Road Improvements (partial)**
Carlsbad Boulevard Realignment, Segments 3-5
Robertson Ranch (NE Quadrant) Park Development (partial)
(**) 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.
FUTURE GROWTH AND DEVELOPMENT
There are a variety of revenues that are used to fund the capital projects. In order to estimate
revenues received 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 tend to
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
2016-17 and subsequent years to build out.
Finance Department staff prepare financial forecasting schedules to ensure that funding will be
sufficient for construction of 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 in evaluating 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 Non-Residential
Year Units Square Feet
2016-17 755 601,098
2017-18 402 375,651
2018-19 189 208,732
2019-20 190 200,646
2020-21 135 190,796
2021-26 1,731 2,182,473
2027-buildout 2,252 3,300,889
Totals 5,654 7,060,285
Projected Development
Residential and Non-Residential Construction
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About 5,600 residential units are anticipated for future development, and it is currently estimated
that the city is about 90 percent built out. Future development estimates increased over the prior
fiscal year estimates, because in FY 2015-16 the updated General Plan added units to meet the
housing element requirements of the city. Residential development for FY 2016-17 is projected at
755 units, and, over the next five years should average 334 units per year. The amount of non-
residential development is projected at about 1.6 million square feet over the next five years, a
decrease of 600,000 square feet from the prior five year period.
Projects include several neighborhood commercial/retail developments, a winery and culinary
center, hotels and timeshares, and other office and mixed use projects. Development estimates
provide data 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 $642.8 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
FY2016-17 to FY2030-31
$642.8 million
Approximately 25 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
4 percent of the total. Water and wastewater replacement revenues generated by user fees equal
2016-17 CAPITAL IMPROVEMENT PROGRAM
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approximately 30 percent of total revenues, and are used to pay for replacement of existing water
and sewer facilities. Infrastructure replacement revenues, equal to 28 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 17 percent consists of revenues from
other agencies and include federal and state grants, the county sales tax program (TransNet) 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 $198,400 per multi-family
dwelling unit, and $366,800 per single-family dwelling unit. A building permit valuation of $51 per
square foot of construction is used to calculate non-residential Public Facilities Fees.
In order to calculate estimated revenues for Traffic Impact Fees, 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 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 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.
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SUMMARY
The FY 2016-17 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, in
addition to reflecting the needs and wants of all who live, work and play in Carlsbad. 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 2016-17 Capital Improvement Program
reflects the commitment of Carlsbad’s City Council and staff to continue providing its residents with
a better quality of life.
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 11 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 2016-17 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
PRIOR YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6-15
YEARS 2016-17 2017-18 2018-19 2019-20 2020-21 2022-31
BEGINNING FUND BALANCE N/A 9,219,758 375,160 34,176 70,316 179,640 40,788
REVENUES
DEVELOPER FEES 155,402 159,016 36,140 109,324 1,261,148 2,381,638
TOTAL REVENUES N/A 155,402 159,016 36,140 109,324 1,261,148 2,381,638
CAPITAL PROJECTS
POINSETTIA LANE - REACH E CASSIA ROAD TO SKIMMER COURT 2,086,000 9,000,000 500,000 - - 1,400,000 1,000,000
POINSETTIA LANE - REACHES A,B,C,F,G & AVIARA PKWY REIMB - - - - - - 1,168,833
TOTAL PROJECT EXPENDITURES 2,086,000 9,000,000 500,000 - - 1,400,000 2,168,833
ENDING FUND BALANCE N/A 375,160 34,176 70,316 179,640 40,788 253,593
PRIOR YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6-15
YEARS 2016-17 2017-18 2018-19 2019-20 2020-21 2022-31
BEGINNING FUND BALANCE N/A 544,085 443,085 537,586 632,087 726,590 827,093
REVENUES
DEVELOPER FEES 24,000 94,501 94,501 94,503 100,503 3,542,192
TOTAL REVENUES N/A 24,000 94,501 94,501 94,503 100,503 3,542,192
CAPITAL PROJECTS
BTD#3 RECONCILIATION AND CLOSEOUT - 125,000 - - - - -
TOTAL PROJECT EXPENDITURES - 125,000 - - - - -
ENDING FUND BALANCE N/A 443,085 537,586 632,087 726,590 827,093 4,369,285
PRIOR YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6-15
YEARS 2016-17 2017-18 2018-19 2019-20 2020-21 2022-31
BEGINNING FUND BALANCE N/A 61,596,513 62,252,953 62,856,228 63,443,096 64,091,168 65,055,137
REVENUES
DEVELOPER SPECIAL TAXES 816,439 713,276 696,868 758,072 963,970 18,525,158
TOTAL REVENUES N/A 816,439 713,276 696,868 758,072 963,970 18,525,158
CAPITAL PROJECTS
CFD#1 ADMINISTRATION - 110,000 110,000 110,000 110,000 - -
CIVIC CENTER 100,000 50,000 - - - - 30,417,000
COLE LIBRARY EXPANSION - - - - - - 5,645,000
LOAN - CFD #1 TO TIF 2,230,162 - - - - - -
MAINTENANCE AND OPERATIONS CENTER 17,861,264 - - - - - -
MAINTENANCE AND OPERATIONS CENTER - ART 143,000 - - - - - -
VETERAN'S MEMORIAL PARK (ALL QUADRANTS)- - - - - - 23,240,000
TOTAL PROJECT EXPENDITURES 20,334,426 160,000 110,000 110,000 110,000 - 59,302,000
ENDING FUND BALANCE N/A 62,252,953 62,856,228 63,443,096 64,091,168 65,055,137 24,278,295
BTD NO. 2 AVIARA PARKWAY - POINSETTIA LANE
BTD NO. 3 CANNON ROAD WEST
COMMUNITY FACILITIES DISTRICT NO. 1 (CFD 1)
K-1
PRIOR YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6-15
YEARS 2016-17 2017-18 2018-19 2019-20 2020-21 2022-31
BEGINNING FUND BALANCE N/A 12,597,759 13,187,159 14,012,499 14,877,801 15,786,853 16,745,008
REVENUES
TRANSFER FROM OPERATING FUND 1,140,000 1,175,340 1,215,302 1,259,052 1,308,155 13,081,550
TOTAL REVENUES N/A 1,140,000 1,175,340 1,215,302 1,259,052 1,308,155 13,081,550
CAPITAL PROJECTS
RECYCLED WATER CONDITION ASSESSMENT PROGRAM - 200,000 200,000 200,000 200,000 200,000 1,000,000
CARLSBAD WATER RECYCLING FACILITY (ENCINA CAPITAL PROJECTS)- 70,600 100,000 100,000 100,000 100,000 1,000,000
RECYCLED WATER VALVE & APPURTENANCE REPLACEMENT PROGRAM - 50,000 50,000 50,000 50,000 50,000 500,000
SCADA INTEGRATED MASTER PLAN - 80,000 - - - - -
WATER, RECYCLED, AND SEWER MASTER PLAN - 150,000 - - - - -
TOTAL PROJECT EXPENDITURES - 550,600 350,000 350,000 350,000 350,000 2,500,000
ENDING FUND BALANCE N/A 13,187,159 14,012,499 14,877,801 15,786,853 16,745,008 27,326,558
WATER REPLACEMENT - RECYCLED
K-13
Appendices
Appendices
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2. The projects are consistent with applicable goals and implementing policies the Land Use
and Community Design, Mobility, Public Safety, Open Space, Conservation, and Recreation, and
Sustainability Elements of the General Plan, as described in Exhibit "A."
3. As required by the General Plan, the proposed improvements are consistent with the
city's Growth Management Plan in that the projects ensure that the necessary improvements are
provided for police and fire facilities, facility maintenance, parks, drainage, transportation, water,
sewer and recycled water projects, in accordance with the performance standards contained in
the city's Growth Management regulations.
Ill
Ill
Ill
Ill
Ill
Ill
Ill
Ill
Ill
Ill
Ill
Ill
Ill
Ill
-2-L-26