HomeMy WebLinkAbout; ; 2018-2019 CAFR; 2019-06-30Comprehensive Annual
Financial Report
FISCAL YEAR ENDED
June 30, 2019
Fiscal Year Ended June 30, 2019
Comprehensive Annual Financial Report
Comprehensive Annual
Financial Report
Fiscal Year Ended
June 30, 2019
Prepared by the
Finance Department
1635 Faraday Ave.
Carlsbad, CA 92008
www.carlsbadca.gov
i
CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2019
Table of Contents
Page
Introductory Section:
Letter of Transmittal 1
Certificate of Achievement for Excellence in Financial Reporting, Government Finance Officers
Association 30
Location Map 31
List of City Officials 32
Organization Chart 33
Financial Section:
Independent Auditor’s Report 35
Management’s Discussion and Analysis 38 Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position 58
Statement of Activities 60
Fund Financial Statements:
Balance Sheet – Governmental Funds 62
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 64
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 66
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities 68
Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual –
General Fund 69
Statement of Net Position – Proprietary Funds 72
Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds 76
Statement of Cash Flows – Proprietary Funds 78
Statement of Net Position – Fiduciary Funds 82
Statement of Changes in Net Position – Fiduciary Funds 83
Notes to the Financial Statements 84
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios During Measurement Period 130
Schedule of Plan Contributions 133
Schedule of Changes in Net OPEB Liability and Related Ratios During Measurement Period 134
Schedule of Plan Contributions 137
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Table of Contents (continued)
Page
Combining and Individual Fund Financial Statements and Schedules
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet – Nonmajor Governmental Funds 140
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds 144
Combining Schedule of Revenues and Expenditures – Budget and Actual (Budgetary Basis) –
Special Revenue Funds 148
Combining Schedule of Revenue and Expenditures – Budget and Actual (Budgetary Basis) –
Capital Project Funds 150
Combining Statement of Net Position – Internal Service Funds 152
Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds 154
Combining Statement of Cash Flows – Internal Service Funds 156
Combining Statement of Changes in Assets and Liabilities – Agency Funds 160
Statement of Fiduciary Net Position – Private Purpose Trust Fund 162
Changes in Fiduciary Net Position – Private Purpose Trust Fund 163
Statistical Section:
Financial Trends:
Net Position by Component – Last Ten Fiscal Years 166
Changes in Net Position – Last Ten Fiscal Years 168
Fund Balances of Governmental Funds – Last Ten Fiscal Years 172
Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 174
Revenue Capacity:
General Governmental Tax Revenues by Source – Last Ten Fiscal Years 176
Water and Wastewater Rates – Last Ten Fiscal Years 177
Assessed Value of Taxable Property – Last Ten Fiscal Years 178
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years 179
Principal Property Taxpayers – Current Year and Nine Years Ago 181
Property Tax Levies and Collections – Last Ten Fiscal Years 182
Debt Capacity:
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 184
Schedule of Direct and Overlapping Bonded Debt – Current Fiscal Year 186 Direct and Overlapping Debt – Last Ten Fiscal Years 188
Legal Debt Margin Information – Last Ten Fiscal Years 190
Pledged-Revenue Coverage – Last Ten Fiscal Years 192
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years 194
Principal Employers – Current Year and Nine Years Ago 196
Operating Information:
Authorized Full and ¾ Time City Government Employees by Program Area –Last Ten Fiscal Years 198
Operating Indicators by Function/Program – Last Ten Fiscal Years 200
Capital Asset Statistics – Last Ten Fiscal Years 202
Introductory Section Introductory Section
Introductory Section
Introductory Section
Administrative Services Department
Finance Division 1635 Faraday Avenue Carlsbad, CA 92008 760-602-2430 t
www.carlsbadca.gov 760-602-8553 f
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December 5, 2019
Honorable Mayor, City Council,
and Citizens of the City of Carlsbad
CITY OF CARLSBAD
Carlsbad, CA 92008
LETTER OF TRANSMITTAL
2018-19 COMPREHENSIVE ANNUAL FINANCIAL REPORT
Honorable Mayor, City Council, and Citizens:
I am pleased to present the fiscal year 2018-19 Comprehensive Annual Financial Report (CAFR) for the City
of Carlsbad (“city”). The information found in this report is provided by management to the City Council
and the public to assist those interested in understanding the fiscal condition of the city as of June 30, 2019.
Management assumes full responsibility for the completeness and reliability of the information contained
in this report, based upon a comprehensive framework of internal controls that has been established for
this purpose. Because the cost of internal controls should not outweigh its benefits, the city’s
comprehensive framework of internal controls has been designed to provide reasonable, rather than
absolute, assurance that the financial statements will be free from material misstatement.
State law and the city’s Municipal Code require that an annual financial report is prepared. This report
fulfills that obligation. It has been prepared in conformity with generally accepted accounting principles
(GAAP) and with the financial reporting requirements prescribed by the Governmental Accounting
Standards Board (GASB). The independent auditing firm, Davis Farr LLP, has issued an unmodified (“clean”) opinion on the city’s financial statements for the fiscal year that ended June 30, 2019. The independent
auditor’s report is located at the front of the financial section of this report.
Management’s Discussion & Analysis (MD&A) immediately follows the independent auditor’s report and
provides a narrative introduction, overview and analysis of the basic financial statements. The MD&A
complements this letter of transmittal and should be read in conjunction with it.
Also, as a recipient of federal and state financial assistance, the city is required to have a “Single Audit”
performed by our independent audit firm. The Single Audit was designed to meet the special needs of
federal grantor agencies. The standards governing Single Audit engagements require that the independent
auditor report not only on the fair presentation of the financial statements, but also on the audited
government’s internal controls and compliance with legal requirements, with special emphasis on internal
controls and legal requirements involving the administration of federal awards. These reports are available
in the city’s separately issued Compliance Reports and Other Financial Information. The results of the city’s
Single Audit for the fiscal year ended June 30, 2019 noted no material weaknesses in the framework of
internal controls, or significant violations of applicable laws and regulations.
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Profile of the City of Carlsbad
Carlsbad incorporated in 1952 as a General Law City, although its “village” area dates back more than 100
years. In June 2008, the voters of Carlsbad overwhelmingly approved the city to change to a Charter City.
Carlsbad is located on the southern California coast, about 35 miles north of the City of San Diego. The city
is governed by a five-member City Council under the Council Manager form of government. The City Council
is elected by district, on a staggered basis, for a term of four years. The city currently has four districts;
however, the mayor is elected at large. The City Clerk and City Treasurer are also elected to four-year terms.
The City Council appoints the City Manager and City Attorney.
The city covers approximately 39 square
miles and has a population of approximately
115,000, with an expected built out
population of 120,000 residents.
Commercial activities in the city include: a
major regional shopping center, a specialty
outlet center, a commercial center with
upscale retail shops, 45 hotels offering 4,764
rooms, 268 short-term vacation rentals and
668 timeshares for tourist lodging, over 24
auto dealers, high technology, multimedia
and biomedical businesses, electronics, golf
apparel and equipment manufacturers,
several business and light industry parks, and
numerous land developers building single and multi-family housing in a variety of community settings.
This report includes financial statements for the city, the Housing Authority of the City of Carlsbad, the
Carlsbad Public Financing Authority, and the Carlsbad Municipal Water District. Through these entities,
Carlsbad provides a full range of services to its citizens and customers including:
• Police protection services
• Development services
• Fire and paramedic services
• Street construction and maintenance
• Water delivery system
• Library and arts programs
• Wastewater system
• Recreation programming for all ages
• Solid waste services
• Park lands
• Housing programs
In addition to the full range of services normally associated with a municipality, Carlsbad offers programs
to help residents and businesses. The city’s Housing Authority administers federal housing assistance to
approximately 550 low-income households in Carlsbad, and older residents can take advantage of
Carlsbad’s senior citizen programs.
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Budget Process
The City Council sets the overall policy direction for Carlsbad and helps staff prioritize programs, projects
and services to support that direction. Public input plays a critical role in setting both the long-range policy
direction of the city and decisions about day to day spending.
Budgetary control for the city is maintained through its accounting systems. Expenditures may not exceed
budgeted figures at the fund level. Monthly reports summarizing the results of operations for the city’s
more significant funds are provided to the City Council.
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Community Vision
These nine core values make up the Carlsbad Community Vision. They were developed in collaboration with
the community and drive both the day to day work of the city and its long-term planning.
Small town feel, beach community character and connectedness – Enhance Carlsbad’s
defining attributes—its small town feel and beach community character. Build on the
city’s culture of civic engagement, volunteerism and philanthropy.
Open space and the natural environment – Prioritize protection and enhancement of
open space and the natural environment. Support and protect Carlsbad’s unique open space and agricultural heritage.
Access to recreation and active, healthy lifestyles – Promote active lifestyles and
community health by furthering access to trails, parks, beaches and other recreation
opportunities.
The local economy, business diversity and tourism – Strengthen the city’s strong and
diverse economy and its position as an employment hub in north San Diego County.
Promote business diversity, increased specialty retail and dining opportunities, and
Carlsbad’s tourism.
Walking, biking, public transportation and connectivity – Increase travel options through
enhanced walking, bicycling and public transportation systems. Enhance mobility
through increased connectivity and intelligent transportation management.
Sustainability – Build on the city’s sustainability initiatives to emerge as a leader in green
development and sustainability. Pursue public/private partnerships, particularly on sustainable water, energy, recycling and foods.
History, the arts and cultural resources – Emphasize the arts by promoting a multitude
of events and productions year-round and cutting-edge venues to host world class
performances and celebrate Carlsbad’s cultural heritage in dedicated facilities and
programs.
High quality education and community services – Support quality, comprehensive
education and lifelong learning opportunities, provide housing and community services
for a changing population, and maintain a high standard for citywide public safety.
Neighborhood revitalization, community design and livability – Revitalize
neighborhoods and enhance citywide community design and livability. Promote a
greater mix of uses citywide, more activities along the coastline and link density to public
transportation. Revitalize the downtown Village as a community focal point and a unique
and memorable center for visitors and rejuvenate the historic Barrio neighborhood.
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City Council Strategic Policy 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 will be pursed through the continuation of ongoing programs and
as new opportunities arise, and as such, no specific fiscal year 2018-19 Work Plan is proposed.
Future status reporting will be provided on an as needed basis.
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.
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.
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Factors Affecting Financial Condition
The Carlsbad economy generally moves in line with the county and the state. Property taxes for fiscal year
2018-19, increased by almost 5.8 percent compared to the previous year, as assessed values remain strong
in real estate and additional development has entered the inventory. Transient Occupancy tax (TOT) paid
by hotel guests increased by 8.6 percent for the same period, driven primarily by an increase in the average
daily rate (ADR) that hotel guests are paying, the opening of the new LEGOLAND Hotel, the new Westin
Hotel, higher occupancy rates, and additional short-term vacation rentals. Sales tax revenues ended fiscal
year 2018-19 at $40.8 million, an improvement of 16.6 percent, due to continued strength in restaurants,
traveler accommodations, new auto sales, department stores, and increased occupancy at the Shoppes at
Carlsbad. In addition, the state changed the timing in which sales tax payments are remitted to the city.
Overall, General Fund revenues ended the current year up 18.6 percent although some smaller revenue
sources, such as those related to development, have fallen slightly during the year.
In the last ten years, opportunities for development have and continue to diminish. Commercial and
industrial development is tapering off, falling to an average of approximately 147,000 square feet per year
over the next five fiscal years. Large industrial and commercial developments in the next five years include
Carlsbad Senior Housing, the Omni La Costa ballroom expansion, continued development at the Carlsbad
Oaks industrial park, continued expansion of the ViaSat campus, and the Summit Senior Care facility.
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 15.1 percent in November 2019. Additional new industrial supply has
increased the industrial vacancy rate to 12.8 percent (7.5 percent last year) and retail vacancy remains
relatively stable at 2.5 percent (2.7 percent, last year), according to data from CoStar.
With rising home prices contributing
to an affordability crisis in California,
the California Association of
Realtors is predicting a weaker
housing market in the later part of
2019. The association also added
that the surge in home prices due to
supply shortages is finally taking a
toll on the market. Adding more
uncertainty is outmigration, which is
the result of the state’s affordability
crisis, predicted to be a concern for
the California housing market in
2019, should interest rates rise in the future.
Meanwhile, home prices in San Diego County hit an all-time high in April 2019 in coastal North County,
homes are selling at prices higher than during the housing bubble of the mid-2000s, especially in Carlsbad.
The median sales prices in all four zip codes in Carlsbad from this time last year has increased 12.3 percent,
according to the Market Watch report for North San Diego Association of Realtors.
Looking beyond the near-term performance of the housing market, California’s newly elected governor,
Gavin Newsom, and the state legislature have focused directly on the state’s chronic housing shortage, a
problem that has been growing in magnitude for many years. California’s economic future, which is
increasingly jeopardized by the high cost of housing, is at stake according to economists. As Sacramento
searches for solutions, it is up against the reality that land use decisions, such as those related to new
housing, have historically been under the purview of local officials and local zoning regulations.
Growth and new development within the city pose both opportunities as well as challenges. Carlsbad is
approaching “built out”, meaning that areas of undeveloped land in the city limits available for
improvement are limited. The challenge is to focus on “in-fill” projects, consisting of smaller individual
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Thousands
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parcels of land dispersed throughout the city, or rebuilding of existing parcels whose current use may be
enhanced by new development. The city’s goal is to preserve the quality of life for Carlsbad residents and
provide a variety of balanced land uses via established standards for residential, commercial and industrial development.
The city continues to address the overall impacts on the community of future development projects so that
they remain manageable and environmentally balanced. The city’s Growth Management Plan was adopted
by the residents to ensure that all necessary public facilities are 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.
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 Omni La Costa Resort & Spa. There are several 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. An additional 142 new rooms will be added
to the inventory in fiscal year 2019-20 at the Home 2 Hotel.
The City of Carlsbad opened a municipal golf course in the summer of 2007. 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 adjoining hiking trails, the Crossings at
Carlsbad is a destination spot for golfers and non-golfers alike.
General Fund revenue is projected to increase in fiscal year 2019-20 by 3.0 percent from the previous year.
Most major sources of tax revenue are expected to increase, including property tax, which is expected to
grow by 2.6 percent. Sales tax is projected to increase 1.3 percent and TOT revenues are projected to
increase by almost 1.0 percent as occupancy and average daily rates and the number of available rooms
increase. The forecast captures additional room inventory from the Home 2 Hotel in fiscal year 2019-20.
Property values continue to appreciate, as mentioned earlier. Development related revenues are forecast
to decrease by over 35 percent in fiscal year 2019-20, compared to the previous year, a trend that is
expected to continue as buildout is approached.
The State of California’s economy remains larger than all but four nations, with an
annual gross domestic product (GDP) of nearly $3 trillion in 2018. The fiscal year
2019-20 state budget protects the hard-won recovery and is centered on making
necessary investments for a more effective government, promoting affordability
and opportunity, and supporting justice and dignity for all Californians. Data for
2018 reflect that the growth in California’s GDP continues to outpace the nation as
a whole. However, this growth is taking place against a backdrop of increasing risks:
the International Monetary Fund recently projected that 70 percent of the world’s
economy would see a slowing of growth in 2019, and the Federal Reserve also projects slower U.S. growth.
Federal tax reform has not resulted in increased wages for workers. Total wages and salaries in 2018 grew
at almost one-half the rate of growth during the last period of low unemployment (2000). The state budget
recognizes these risks and the inextricable linkage between fiscal prudence and the state’s ability to
promote affordability and economic opportunity. Accordingly, it simultaneously expands the Governor's
commitment to budget resiliency and increases support for California's most vulnerable populations and
working families. The state budget projects short-term revenues of $3.2 billion above the Governor's
Budget. However, most of the increased revenues are constitutionally obligated to reserves, debt
repayment, and schools. Therefore, the budget surplus remains relatively unchanged. Despite the short-
term gains, slower economic growth leads to a lower forecast in out-year revenues—$1.6 billion lower in
2022-23 compared to the forecast in January. The state has built a strong fiscal foundation by paying down
liabilities and building up reserves that will help manage the effects of an economic downturn. Growing
uncertainty related to the global political and economic climate, federal policies, rising costs, and the length
of the current economic expansion require that the budget be prudent. The state budget forecast
recognizes slower growth in the economy but does not predict a recession. The state must be prepared
that even a moderate recession could result in revenue declines of nearly $70 billion and a budget deficit
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of $40 billion over three years. Given the slowing economic forecast and the intensified risks, the state
budget continues to save and prepare for uncertain times ahead. To maintain structural balance in each
year over the forecast period, the state budget proposes to sunset certain program expansions at the end of December 31, 2021. This includes programs in which the growth of expenditures continues to outpace
long-term revenue growth, and where the administration is committed to reforms that bend the cost curve.
Long-Term Financial Planning
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 private development and constructing and operating new public facilities. 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 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 residents of Carlsbad can be assured that the proper maintenance and replacement
will be performed on streets, parks, and many facilities for which the city is responsible.
Employee retirement costs continue to require ongoing prudent fiscal management. Overall, levels of
funding of the city’s plans and the CalPERS system have improved from higher than expected investment
returns over the last two fiscal years. While this boosts the funding position, risks remain in the system.
Required employer contributions will continue to increase over the next few years and actual contribution
increases could exceed expectations if future experience is unfavorable.
City Council issued a pension funding policy in June 2019 to codify its commitment to ensure that resources
will be available to fulfill the city’s contractual retirement promises to its employees, and to minimize the
chance that the funding of these benefits will interfere with providing essential services to the community.
The policy outlines a funding discipline to ensure that adequate resources will be accumulated in a
systematic and disciplined manner to fund the long-term cost of benefits to the plan participants and
annuitants.
With continued demand for enhancing services for the community, keeping up with technology demands
and replacement of aging information technology infrastructure remains an issue. To maintain the city’s
current and proposed standards of performance, and to protect computer systems from ever increasing
outside attacks, viruses and new vulnerabilities, additional resources are continually needed to ensure
systems remain stable and reliable for all users and protected against data intrusion or loss. Additional
funding in the budget has been allocated for needed replacements, upgrades, and security.
The forecast assumes limited growth in residential and commercial development over the foreseeable
future and captures the expected revenue impacts from major projects that are expected to be completed
during the forecast period. The operating costs of new city facilities projected in the Capital Improvement
Program and supported by the General Fund, such as the Orion Center, 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, and it appears that trend is continuing. Overall, the outlook for General Fund operating
revenues continue to be positive and revenues are expected to exceed ongoing operating costs over the
period of the forecast.
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The forecast assumes that General Fund revenues will increase by 1.8 percent in fiscal year 2019-20, as
economic conditions continue to improve, bolstering revenues from the property tax, sales tax, 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.
The forecast assumes that the city’s cost for employee health care will increase by 7.5 percent in fiscal year
2019-20 and annual increases will be smaller in the later years of the forecast. CalPERS, the administrator
of the city’s employee pension plan, will complete their initial stages of their risk mitigation strategy, which
involved lowering the assumed rate of return on pension assets from 7.5 percent to 7.0 percent over a
three-year period. The results of this drop in assumed rate of return on the mature pension plan will
increase pension costs to the city in future years. Annual pension costs after fiscal year 2019-20 are less
severe and are assumed to normalize at an annual increase of three percent. The City Council approved
the payoff of approximately $20 million in the unfunded actuarial liability during the budget adoption
process for fiscal year 2019-20. If similar actions are taken in future years, this will continue to decrease
the city’s annual reserve contribution, holding all other variables that affect annual costs, such as
investment returns, constant. CalPERS may take other actions in the future, to continue to make the
statewide pension fund more fiscally sustainable, and such action will be captured in future forecasts. The
statewide funded status for CalPERS hovers around 70 percent. The forecast does not consider increases
in staffing levels beyond fiscal year 2019-20, except those that may be related to the operating costs of new
city facilities supported by the General Fund. Negotiated salary increases and future salary growth projections are included in personnel costs in the forecast, to provide a conservative estimate of future
costs. The contribution from the General Fund to the Infrastructure Replacement Fund and the General
Capital Construction Fund are both forecasted to remain at 3.0 percent of General Fund revenues each.
Finally, the forecast includes estimated operating costs for all capital projects in the timeframes shown in
the Capital Improvement Program.
Although the city prepares a ten-year forecast, the forecast loses accuracy past year five, due to the
uncertainty of the variables used in the forecast. The forecast indicates revenues exceeding expenditures
for the near future however, beyond year four, the forecast indicates expenditures exceeding revenues. In
order to address later years in the forecast, the city may need to explore potential options to reduce
expenditures or expand the revenue base of the General Fund. 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. There are also factors that drive the forecast that are beyond the control of the city, such
as inflation, global economic cycles, and emergencies. 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.
Capital Improvement Program
The City of Carlsbad Capital Improvement Program reflects the city’s ongoing commitment to maintaining the highest standards of quality facilities for the community today and in the future. It is a planning
document, not a commitment to spend funds. The 15-year program outlines the expenditure plan for future
capital projects and the corresponding revenues to pay for those expenditures.
Projects shown in the Capital Improvement Program are generally defined as any construction,
rehabilitation or 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.
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After City Council adopts the proposed annual Capital Improvement Program budget, projects receive an
appropriation that authorizes spending in the amount specified for the adopted fiscal year only. Estimated
budget information is shown for a 15-year period to provide the most comprehensive information about known future projects. Spending authority in future years is not granted until adoption of the annual
proposed Capital Improvement Program budget associated with each year.
Carlsbad’s philosophy is to take a proactive, long-range planning approach to building high quality facilities
and infrastructure that support the needs and priorities of the community.
I nvesting in Our Quality of Life
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 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 states that unless a standard level of facilities is available to meet new
demands resulting from the city’s growth, development cannot proceed. 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. Facilities such as community centers, parks,
and fire stations have been constructed and opened to the public under this program.
The Capital Improvement Program (CIP) 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 fiscal year 2019-20 CIP, compliance with the Growth Management Plan is continued.
In recent years, there has also been an increased demand for resources to modernize, repair, and replace
existing infrastructure. Prudent financial planning has ensured ongoing funding for these projects. About
half of Carlsbad’s comprehensive Capital Improvement Plan encompasses numerous asset management
programs, which ensure adequate inspection, maintenance, and replacement of buildings and parks, water,
sewer and drainage systems, bridges, and roadways systems.
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Project Evaluation
Development of the Capital Improvement Program is a team effort involving all operational departments,
the city manager’s office, City Council, and the community. Many factors are considered when putting
together projects for the 15-year program.
As the Capital Improvement Program is implemented throughout the year, staff continually re-evaluate
projects’ scopes, costs and schedules to responsibly and cost-effectively manage infrastructure assets at
the required levels of service throughout their lifecycle. Project charters are updated to include project
description, location, summary of need, justification including any legislative or policy citations, cost
estimates and project scores. Community feedback on infrastructure needs is considered and incorporated as appropriate. The Capital Improvement Program is then fully vetted at multiple levels of the city
organization by appropriate staff using an inclusive and transparent process and reviewed on a quarterly
basis.
Capital Improvement Program
Public Health and Safety
City mission, Vision and Organizational Values
Community Values
City Council Goals
Governing and Policy Documents
Funding Availability
Environmental Review
12
F iscal Year 2019-20 Appropriations
In the fiscal year 2019-20 CIP, there are approximately 246 continuing and new projects planned over the
next 15 years. The fiscal year 2019-20 Capital Improvement Program outlines approximately $53.6 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 $51.4 million.
Civic Buildings and Facility Maintenance
$10.4 million
This category includes a variety of facilities such as fire stations, libraries and the new City Hall.
Costs include repair, maintenance, and replacement of civic buildings.
Parks
$1.1 million
Projects include improvements and enhancements to existing parks, such as playground
resurfacing, picnic areas and other needs identified by the community and in recently updated parks master
plans.
Drainage
$2.5 million
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. As the city continues to
age, it is increasingly necessary to balance repairing and replacing the existing lines with enhancing the
current infrastructure to accommodate future needs.
Sewer
$11.3 million
The city’s sewer, or wastewater, projects include numerous pipeline construction and
rehabilitation projects, as well as improvements to the Encina Wastewater Treatment facility. Most new
lines are built and paid for with impact fees collected with new development.
Water and Recycled Water
$10.6 million
Future water and recycled water projects include construction of new pipe lines, replacement
of existing waterlines and reservoir improvements. In fiscal year 2019-20, Carlsbad Municipal Water District
celebrates its thirtieth year producing and delivering recycled water.
Streets and Circulation System
$17.0 million
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. Carlsbad continues to invest in modernizing roads, leveraging
technology to improve traffic systems, and making timely repairs and rehabilitation of the roadways,
bridges, sidewalks and other assets in public rights of way throughout the city.
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N ew CIP Projects
Avenida Encinas Pedestrian Access Improvements
Category: Circulation system
Funding Source: Gas Tax
Managing Department: Transportation
Funding
Design $ 8,000
Construction $ 67,000
TOTAL $ 75,000
About This Project
To connect area businesses and restaurants, a new crosswalk featuring rapid rectangular flashing beacons
will be installed. The project will also create pedestrian access at the intersection of Palomar Airport Road
and Avenida Encinas by modifying the traffic signal and restriping the road.
Project Need
The General Plan Mobility Element seeks to increase transportation options and improve connectivity
within the city for all modes of travel. These improvements will enhance safe pedestrian access to area
businesses and restaurants.
Location
Avenida Encinas north of Palomar Airport Road
14
Aviara and Hidden Canyon Parks
Playground Safety Resurfacing
Category: Park Development
Funding Source:
Infrastructure Replacement
Managing Department:
Parks & Recreation
Funding
Study $ 10,000
Design $ 35,000
Construction $ 555,000
TOTAL $ 600,000
About This Project
The existing poured-in-place safety surfacing at both playgrounds will be removed and replaced with new
poured-in-place surfacing.
Project Need
The existing playground surfacing is deteriorating and requiring increased amounts of patching and
maintenance. It is also getting toward the end of its life span and if replacement is delayed, it may no longer
provide the shock absorption necessary to meet safety specifications.
Location
Aviara Park: 6435 Ambrosia Lane | Hidden Canyon Park: 2685 Vancouver St.
Hidden Canyon Park
Aviara Community Park
15
Calavera Hills Community Center Refurbishment
Category: Facilities
Funding Source:
Infrastructure Replacement
Managing Department:
General Services
Funding
Design $ 45,000
Construction $ 640,000
TOTAL $ 685,000
About This Project
The 18,000 square foot Calavera Hills Community Center is in need of a roof replacement as well as the
replacement of exterior siding and painting.
Project Need
A facilities condition assessment was performed in 2018 that identified these maintenance needs. By
keeping up with building maintenance, the city prolongs the useful life of its facilities and helps ensure
attractive and safe amenities are available for the community.
Location
Calavera Hills Community Park, 2997 Glasgow Drive
16
Cannon Road at Sage Creek Rehabilitation
Category: Circulation system
Funding Source: Gas Tax
Managing Department: Transportation
Funding
Study $ 25,000
Environmental $ 15,000
Design $ 115,000
Construction $ 520,000
TOTAL $ 675,000
About This Project
The road has settled in this area requiring the city to investigate the cause and repair the damaged area.
Project Need
Maintaining city streets and addressing potential problem areas quickly helps ensure safety and prevents
more costly and significant repairs in the future.
Location
Cannon Road east of College Boulevard
17
Citywide Street Lighting Program
Category: Circulation system
Funding Source: Gas Tax
Managing Department: Transportation
Funding
Design $ 30,000
Construction $ 120,000
TOTAL $ 150,000
About This Project
The city maintains and operates more than 7,000 streetlights throughout Carlsbad. From time to time, new
streetlights are needed.
Project Need
This program sets aside funding so the city can provide a timely response when new needs are identified.
Location
Citywide
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Citywide Thermoplastic
Pavement Marking Program
Category: Circulation system
Funding Source: Gas Tax
Managing Department: Transportation
Funding
Construction $ 100,000
TOTAL $ 100,000
About This Project
This project will design and install a special type of pavement marking on city streets throughout the city.
The thermoplastic materials increase reflectivity and visibility of pavement markings like crosswalks and
street legends.
Need
Better visibility of pavement markings improves safety for drivers, bicyclists and pedestrians, supporting
the city’s goal of facilitating all modes of travel.
Location
Citywide
19
Dove Library Parking Lot Accessibility
Category: Facilities
Funding Source:
General Capital Construction
Managing Department:
General Services
Funding
Design $ 50,000
TOTAL $ 50,000
About This Project
Design and cost estimates will be developed to relocate accessibility parking closer to the library entrance.
Project Need
Patrons have requested the city examine relocating existing accessibility parking to enhance convenience
and safety.
Location
Carlsbad City Library, 1775 Dove Lane
20
Fleet Service Center Fuel Island Evaluation
Category: Facilities
Funding Source:
Infrastructure Replacement
Managing Department: General Services
Funding
Environmental $ 140,000
Design $ 10,000
TOTAL $ 150,000
About This Project
This condition assessment of the existing fuel island will include an examination of underground conditions
and recommendations for possible modifications that will modernize systems and equipment.
Project Need
The fuel island is located between the existing Fleet Maintenance facility and the proposed Orion Center.
Evaluation of the fuel island ensures the entire property is comprehensively examined prior to construction
of planned improvements to the Fleet Maintenance facility and the future Orion Center.
Location
Fleet Maintenance facility, 2480 Impala Street
21
Intelligent Traffic Control Devices
Category: Circulation system
Funding Source: Gas Tax
Managing Department: Transportation
Funding
Construction $ 200,000
TOTAL $ 200,000
About This Project
Traffic control devices, such as school flashing beacons and speed feedback signs, will be upgraded so that
they can be programmed remotely, monitored from the city’s Traffic Management Center and have
historical data stored.
Project Need
The ability to control traffic control devices remotely will improve efficiency and save money on
maintenance activities. It will also allow the city to collect data on the effectiveness of various traffic control measures and be more responsive to community feedback.
Location
Citywide
22
Leo Carrillo Ranch Roof Repairs
Category: Facilities
Funding Source:
Infrastructure Replacement Fund
Managing Department:
Parks & Recreation
Funding
Study $ 225,000
Environmental $ 25,000
TOTAL $ 250,000
About This Project
Roof conditions on these historic buildings will be assessed, and a cost estimate will be developed for
recommended roof replacements throughout the park.
Project Need
Through the course of routine maintenance and repair work, a need was identified to take a more
comprehensive, efficient approach to addressing roof conditions and replacements at this historic park.
Location
Leo Carrillo Ranch Historic Park, 6200 Flying Leo Carrillo Way
23
Recycled Water Cathodic Protection Program
Category: Recycled Water
Funding Source:
Recycled Water Replacement
Managing Department: Utilities
Funding
Study $ 20,000
Design $ 20,000
Construction $ 120,000
TOTAL $ 160,000
About This Project
The city has an extensive network of recycled water pipelines throughout Carlsbad. Recycled water is
wastewater that has been treated to a level suitable for irrigation and other non-drinking uses. Because
recycled water is kept separate from the drinking water system, it is delivered through its own set of pipes,
which are purple to distinguish them from other water and wastewater infrastructure. The system is in
need of corrosion control improvements.
Project Need
Maintaining recycled water pipelines and other infrastructure in good working order helps prevent more
costly repairs later and potential interruptions in service.
Location
Citywide
24
Sewer Line Capacity Improvements
Category: Sewer
Funding Source: Sewer Replacement
Managing Department: Utilities
Funding
Design $ 130,000
Construction $ 840,000 TOTAL $ 970,000
About This Project
Various sections of sewer pipeline throughout the city that have existing or buildout capacity issues will be
demolished and upsized.
Project Need
The Sewer Master Plan identifies sections of sewer pipelines that need to be upsized to increase capacity
and avoid sewer spills.
Location
Citywide
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Sewer Modeling
Category: Sewer
Funding Source: Sewer Connection
Managing Department: Utilities
Funding
Study $ 2,400,000
TOTAL $ 2,400,000
About This Project
This project sets aside funding for as-needed contracted professional services to review hydraulic sewer
modeling requests from private developments
Project Need
Private developers are required to submit plans to the city for review to determine if adequate, legal and
safe sewer systems are included in the design.
Location
Citywide
26
Vallecitos Interceptor Sewer
Cleaning and Monitoring
Category: Sewer
Funding Source: Sewer Replacement
Managing Department: Utilities
Funding
Environmental $ 35,000
Design $ 15,000
Construction $ 200,000
TOTAL $ 250,000
About This Project
The project sets aside funding for sewer cleaning and closed-circuit TV monitoring activities for a portion of
sewer interceptor pipe line shared with the Vallecitos Water District.
Project Need
The City of Carlsbad shares ownership of the pipe line with Vallecitos Water District and is responsible for
a portion of the maintenance and operations costs.
Location
Palomar Airport Road from El Camino Real to the Encina Wastewater Treatment Facility on Avenida Encinas
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Water Modeling
Category: Water
Funding Source: Water Connection
Managing Department: Utilities
Funding
Study $ 2,400,000
TOTAL $ 2,400,000
About This Project
This project sets aside funding for as-needed contracted professional services to review hydraulic water
modeling requests from private developments.
Project Need
Private developers are required to submit plans to the city for review to determine if adequate, legal and
safe water and fire sewer systems are included in the design.
Location
Citywide
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F uture Projects
The Capital Improvement Program for fiscal year 2019-20 to fiscal year 2033-34 outlines approximately 246
projects at a cost of $614.9 million. Long-range planning and responsible asset management play key roles
in the development of future capital projects. Using data from various infrastructure master plans, ongoing
asset condition assessments, technical modelling, field inspections as well as community feedback, the
information provided for future years reflects the most comprehensive snapshot of known or anticipated
future projects as well as associated estimated costs.
Unfunded Projects
There are six projects identified in the Capital Improvement Program 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 external 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.
Two projects are partially funded by the Traffic Impact Fee (TIF) Program approved by the City Council on
May 12, 2009. The program was planned to generate enough revenue to pay for 20 percent of the total
costs of these projects, leaving the remaining 80 percent unfunded.
A wards and Acknowledgements
The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate
of Achievement for Excellence in Financial Reporting to the city for its Comprehensive Annual Financial
Report for the fiscal year ended June 30, 2018. This was the 21st consecutive year that the city has achieved
this prestigious award. To be awarded a Certificate of Achievement, a government unit must publish an
easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy
both GAAP and applicable legal requirements.
Streets/Circulation
20%
Civic Projects
14%
Wastewater
26%
Parks 7%
Water
27%
Drainage 3%
Other (loans)
3%
Future Project Costs by Type
Fiscal Year 2019-20 to Fiscal Year 2032-33
$614.9 million
29
A Certificate of Achievement is valid for a period of one year only. The city strives to annually produce a
CAFR which will continue to meet the Certificate of Achievement Program’s requirements. This report will
be also submitted to GFOA to determine eligibility for another certificate.
This report has been a comprehensive effort by many people from many different areas of responsibility.
It could not have been accomplished without their help and the dedicated efforts of all of the finance staff,
especially Ryan Green, Assistant Finance Director and Jill Moya, Senior Accountant. I also appreciate the
staff of Davis Farr LLP for the professional way in which the audit of this financial report was conducted. It
has been a pleasure to work with them. Additionally, I would like to thank the City Council, the City Manager
and the city’s Executive Management Team for their leadership and unfailing support in maintaining the
highest standards of professionalism in the management of the city’s finances.
Respectfully submitted,
Kevin Branca
Finance Director
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31
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Elected Officials
Matt Hall, Mayor
Priya Bhat-Patel, Mayor Pro Tem
Keith Blackburn, Council Member
Cori Schumacher, Council Member
Barbara Hamilton, Council Member
Barbara Engleson, City Clerk
Craig Lindholm, City Treasurer
Leadership Team
Scott Chadwick, City Manager
Celia Brewer, City Attorney
Elaine Lukey, Chief Operations Officer
Debbie Fountain, Community & Economic Development Director
Gary Barberio, Deputy City Manager, Community Services
Heather Pizzuto, Library & Cultural Arts Director
James Wood, Environmental Manager
Jason Haber, Assistant to the City Manager
John Maashoff, Public Works Manager
Judy von Kalinowski, Human Resources Director
Kevin Branca, Finance Director
Kristina Ray, Communication Manager
Kyle Lancaster, Parks & Recreation Director
Laura Rocha, Deputy City Manager, Administrative Services
Maria Callander, Information Technology Director
Marshall Plantz, Transportation Director
Michael Calderwood, Fire Chief
Morgen Fry, Secretary to the City Manager
Neil Gallucci, Police Chief
Paz Gomez, Deputy City Manager, Public Works
Sheila Cobian, City Clerk Services Manager
Vicki Quiram, Utilities Director
Boards and Commission Chairs
Laurenn Barker, Arts Commission
Linda Petrucci, Beach Preservation Committee
Timothy Stripe, Carlsbad Golf Lodging Business Improvement District
Timothy Stripe, Carlsbad Tourism Business Improvement District Board
Chad Majer, Historic Preservation Commission
Vacant, Housing Commission
Art Larson, Library Board of Trustees
Matt Simons, Parks & Recreation Commission
Carolyn Luna, Planning Commission
Ray Pearson, Senior Commission
Chuck Hunter, Traffic Safety Commission
Vacant, Underground Utility Advisory Committee
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Financial Section Financial Section
Financial SectionFinancial Section
INDEPENDENT AUDITOR’S REPORT
City Council
City of Carlsbad
Carlsbad, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, the aggregate remaining fund information of the City of Carlsbad, California, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
35
City Council
City of Carlsbad, California
Page Two
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Carlsbad as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows and the statement of revenues, expenditures and changes in fund balance - budget to actual of the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As described further in note 20 to the financial statements, during the year ended June 30, 2019, the City made prior period adjustments to correct beginning net position. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis, the Schedule of Changes in Net Pension Liability and
Related Ratios During Measurement Period, Schedule of Pension Plan Contributions,
Schedule of Changes in Net OPEB Liability and Related Ratios During Measurement Period
and Schedule of OPEB Plan Contributions be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board who considers it to be an
essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements
that collectively comprise the City of Carlsbad's basic financial statements. The combining
and individual non-major fund financial statements and schedules, the introductory section
and the statistical section are presented for purposes of additional analysis and are not a
required part of the basic financial statements. The combining and individual non-major
fund financial statements and schedules are the responsibility of management and were
derived from and relate directly to the underlying accounting and other records used to
prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the
36
City Council
City of Carlsbad, California
Page Three
combining and individual non-major fund financial statement and schedules are fairly
stated, in all material respects, in relation to the basic financial statements as a whole. The
introductory section and the statistical section have not been subjected to the auditing
procedures applied in the audit of the basic financial statements, and accordingly, we do not
express an opinion or provide any assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 5, 2019 on our consideration of the City of Carlsbad's internal control over
financial reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements and other matters. The purpose of that report
is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering City of
Carlsbad’s internal control over financial reporting and compliance.
Irvine, California December 5, 2019
37
38
Management’s Discussion and Analysis
Management of the City of Carlsbad (“city”) provides readers this overview and analysis of the financial activities of the
city for the fiscal year ended June 30, 2019. The intent is to assist the reader of these financial statements in better
understanding the impact of financial decisions made by the city. This analysis will focus on the significant changes in an
effort to explain the city’s overall financial condition. The information presented here should be considered in
conjunction with the additional information furnished in the letter of transmittal.
Overview of the Financial Statements
This section of the annual report consists of four parts – management’s discussion and analysis (this section), the basic
financial statements, required supplementary information, and an optional section that presents combining statements
for non-major governmental funds and internal service funds. The basic financial statements include two kinds of
statements that present different views of the city.
• The first two statements are Government-wide Financial Statements that provide both long-term and short-term
information about the city’s overall financial status.
• The remaining statements are Fund Financial Statements that focus on individual parts of the city government,
reporting the city’s operations in more detail than the Government-wide Statements.
o The Governmental Funds Financial Statements detail how general government services, such as public safety,
were financed in the short-term, as well as what remains for future spending.
o Proprietary Funds Statements offer short- and long-term financial information about the activities the city
operates like businesses, such as providing water and wastewater services.
o Fiduciary Funds Statements provide information about the financial relationships – such as contractor and miscellaneous deposits – in which the city acts solely as a trustee or agent for the benefit of others to whom the
resources belong.
The financial statements also include notes that explain some of the information in the financial statements and provide
greater detail. The statements are accompanied by required supplementary information that further explains and
supports the information in the financial statements. In addition to these required elements is the combining fund
statements section that provides financial information about the non-major governmental funds, internal service funds,
and fiduciary funds, which are added together and presented in single columns in the basic financial statements.
The remainder of this overview section of management’s discussion and analysis (MD&A) explains the structure and
content of each of the statements.
Government-wide Financial Statements
The Government-wide Financial Statements report information about the city as a whole, using accounting methods
similar to those used by private-sector companies. The Statement of Net Position includes all of the city’s assets and
liabilities. All of the current year’s revenues and expenses are accounted for in the Statement of Activities, regardless of
when cash is received or paid.
The two Government-wide Financial Statements report the city’s net position and how it has changed. Net position –
the difference between the city’s assets and liabilities – is one way to measure the city’s financial health, or position.
Over time, increases or decreases in the city’s net position are an indicator of whether the city’s financial health is
improving or deteriorating, respectively. Additional non-financial factors should be considered, such as changes in the
city’s property tax base and the condition of the city’s infrastructure, to assess the overall health of the city.
39
The Government-wide Financial Statements of the city are divided into two categories:
• Governmental activities – Most of the city’s basic services, such as police, fire, public works, community services,
and internal services are included here. Taxes, revenues from other governments and agencies, income from
property and investments, grants and contributions, and charges for services finance most of these activities.
• Business-type activities – The city charges fees to
customers to cover the cost of certain services it
provides. The city’s water, wastewater, solid waste
and municipal golf course operations are the
primary business-type activities. Fund Financial Statements
The Fund Financial Statements provide more detailed
information about the city’s most significant funds – not
the city as a whole. Funds are accounting devices used
by the city to keep track of specific sources of funding and
spending for particular purposes.
Some funds are required by state law and bond
covenants, while the city establishes other funds to
control and manage money for particular purposes (such
as the developer impact fee funds) or to show that it is
properly using certain taxes and grants (such as the
Section 8 Rental Assistance Fund).
The city has three kinds of funds:
• Governmental funds – Most of the city’s basic services are included in governmental funds. These funds are used to
account for (1) cash and other financial assets that can readily be converted to cash flow in and out, and (2) balances
left at year-end that are available for future spending. Consequently, the Governmental Funds Statement provide a
detailed short-term view that helps the reader determine the amount of financial resources that can be spent in the
near future to finance the city’s programs. The statements are presented on a modified accrual basis of accounting.
A reconciliation between the long-term and short-term focus of the Government-wide Financial Statements is
provided immediately following each statement. There are currently three governmental fund types being used by
the city: the General Fund, special revenue funds, and capital project funds.
• Proprietary funds – Services for which the city charges customers a fee are generally reported in proprietary funds.
Proprietary funds, like Government-wide Financial Statements, provide both long- and short-term financial
information, and are presented on an accrual basis of accounting.
There are two types of propriety funds, enterprise funds and internal service funds:
o Enterprise funds are used to report activities that provide business-type services, generally to external customers
– such as water, wastewater, solid waste, and golf services. In both the Government-wide Financial Statements
and the Fund Financial Statements, these funds are shown under business-type activities. o Internal service funds are used to report activities that provide services and supplies for the city’s other programs
and activities – such as fleet, workers’ compensation, risk/liability, and information technology.
40
• Fiduciary funds – These funds are used to account for situations where the city’s role is purely custodial, such as the
receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other
governments. All of the city’s fiduciary activities are reported in a separate Statement of Fiduciary Net Position.
These activities are excluded from the city’s Government-wide Financial Statements because the city cannot use these
assets to finance its operations.
Financial Analysis of the City as a Whole
Net Position
The city’s combined net position as of June 30, 2019, as shown below, was $1.811 billion. The city’s net position increased
by $45.1 million as compared to the prior fiscal year. This increase was in large part due to the impacts of the city
recording the annual pension activities as required by Government Accounting Standards Board (GASB) 68 (a large
decrease in the net pension liability and smaller changes in deferred inflows and outflows). Current and other assets
were impacted by revenues exceeding expenses by $45.1 million, leading to an increase in cash and investments of $44.2
million. The increase in revenues is predominantly due to higher interest received (the yield on the treasurer’s portfolio
is up for the year, higher cash balances, and the impacts of GASB 31), an increase in tax revenues (property, sales and
transient occupancy taxes) partially offset by decreased water revenues due to a rainier winter, and a reduction in
developer impact fees due to a slowdown in development. The decrease in capital assets is discussed in more detail in
the capital asset section of this MD&A.
As noted earlier, over time, net position may serve as a useful indicator of the city’s financial position. For the city, assets
currently exceed liabilities by $1.811 billion at the close of the most recent fiscal year.
A large portion of the city’s net position (62.6 percent) reflects its net investment in capital assets (i.e. land, buildings,
machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding.
The city uses these capital assets to provide services to residents; consequently, these assets are not available for future
spending. Although the city’s investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital assets themselves would not
be used to pay for these liabilities.
Total
Percentage
Change
2018 2019 2018 2019 2018 2019 2018-19
Current and other assets $640.2 $672.2 $155.2 $167.4 $795.4 $839.6 5.6%
Capital assets 793.7 787.4 364.5 363.4 1,158.2 1,150.8 -0.6%
Total assets 1,433.9 1,459.6 519.7 530.8 1,953.6 1,990.4 1.9%
Deferred outflows 60.3 59.0 5.6 3.8 65.9 62.8 -4.7%
Other liabilities 27.7 28.8 17.1 23.6 44.8 52.4 17.0%
Net OPEB liability 1.5 1.5 1.0 0.7 2.5 2.2 -12.0%
Net pension liability 167.4 152.9 14.0 10.1 181.4 163.0 -10.1%
Long-term debt outstanding 0.6 0.4 14.9 16.8 15.5 17.2 11.0%
Total liabilities 197.2 183.6 47.0 51.2 244.2 234.8 -3.8%
Deferred inflows 5.8 7.1 0.7 0.8 6.5 7.9 21.5%
Net position
Net investment in
capital assets 793.1 787.0 349.5 346.6 1,142.6 1,133.6 -0.8%
Restricted 236.1 251.9 39.5 38.5 275.6 290.4 5.4%
Unrestricted 262.0 289.0 88.6 97.5 350.6 386.5 10.2%
Total net position $1,291.2 $1,327.9 $477.6 $482.6 $1,768.8 $1,810.5 2.4%
CITY OF CARLSBAD'S NET POSITION
(in millions of dollars)
Governmental Business-Type
Activities Activities Total
41
An additional portion of the city’s net position (16 percent) represents resources that are subject to external restrictions
on usage. The remaining balance of unrestricted net position ($386.5 million) may be used to meet the city’s ongoing
obligations to residents and creditors.
Just over 35 percent of the $289 million in unrestricted governmental activities net position is attributable to the General
Fund. This is an increase from the previous fiscal year, due to strong revenue growth, primarily in property, sales,
transient occupancy, franchise and business license taxes. In addition, the yield on the treasurer’s portfolio continues to
increase, the city’s cash balances continue to grow, and there was a positive impact from GASB 31 in the current fiscal
year, creating additional income from property and investments. The net investment in capital assets for the city
decreased slightly during fiscal year 2018-19, due primarily to a drop off in developer donated assets (streets, sidewalks,
streetlights, water and wastewater lines) combined with higher depreciation charges, netted with an increase in
outstanding debt (primarily Recycled Water). A portion of business-type net position represents the city’s municipal golf
course. At the end of fiscal year 2018-19, there is a large deficit in unrestricted net position for the Golf Course Fund.
This is the result of the General Fund advancing money to the Golf Course Fund for the construction of the course and
partially subsidizing the operations of the course in prior fiscal years.
The condensed summary of activities shows that net position increased by $45.1 million during the year. This increase
occurs when spending is less that the revenues received. There were several reasons for the increase in net position:
$22.4 million in “savings” in the General Fund is being carried forward into the new fiscal year by various major service
areas within the city to enhance and provide for future services and programs (indicating spending levels less than
budgeted expenditures); revenues outpacing budgeted projections due to strong economic conditions; the build-up of
cash reserves in the city’s capital project and enterprise funds for future capital project construction and acquisition, as
well as rate stabilization efforts due to the purchasing of more expensive water from the desalination facility; revenues
received in the city’s special revenue funds for future services and programs; and the donation of infrastructure assets
from developers.
42
Changes in Net Position
Approximately 66.7 percent of the revenues of the city’s governmental funds are generated through taxes collected
(property tax, sales tax, transient occupancy tax (TOT), etc.), and approximately 80 percent of the city’s business-type
revenue is generated through charges for services. The chart on the following page graphically depicts the city’s revenue
sources.
Total
Percentage
Change
2018 2019 2018 2019 2018 2019 2018-19
Revenues
Program revenues
Charges for services $21.0 $21.8 $75.4 $71.9 $96.4 $93.7 -2.8%
Operating grants and contributions 13.1 17.3 1.6 1.2 14.7 18.5 25.9%
Capital grants and contributions 23.0 13.8 5.5 4.9 28.5 18.7 -34.4%
General revenues
Property taxes 66.5 70.0 3.7 4.0 70.2 74.0 5.4%
Sales and use taxes 33.7 38.5 - - 33.7 38.5 14.2%
Other taxes 36.5 39.5 - - 36.5 39.5 8.2%
Income from property and investments 2.5 20.7 1.0 7.8 3.5 28.5 714.3%
Other 0.5 0.4 - 0.1 0.5 0.5 0.0%
Total revenues 196.8 222.0 87.2 89.9 284.0 311.9 9.8%
Expenses
General government 25.2 22.2 - - 25.2 22.2 -11.9%
Public safety 62.6 68.0 - - 62.6 68.0 8.6%
Community services 51.9 58.0 - - 51.9 58.0 11.8%
Public works 36.9 36.9 - - 36.9 36.9 0.0%
Carlsbad Municipal Water District - - 51.7 51.6 51.7 51.6 -0.2%
Golf course - - 10.5 11.0 10.5 11.0 4.8%
Wastewater - - 13.5 15.2 13.5 15.2 12.6%
Solid waste - - 3.1 3.9 3.1 3.9 25.8%
Total expenses 176.6 185.1 78.8 81.7 255.4 266.8 4.5%
Excess (deficiency) before transfers 20.2 36.9 8.4 8.2 28.6 45.1 57.7%
Transfers (0.1) (0.2) 0.1 0.2 - - 0.0%
Increase (decrease) in net position 20.1 36.7 8.5 8.4 28.6 45.1 57.7%
Beginning position, as restated 1,271.1 1,291.2 469.1 474.2 1,740.2 1,765.4 1.4%
Ending net position $1,291.2 $1,327.9 $477.6 $482.6 $1,768.8 $1,810.5 2.4%
Activities Activities Total
CITY OF CARLSBAD'S CHANGES IN NET POSITION
(in millions of dollars)
Governmental Business-Type
43
The city’s revenues have continued to remain strong during this exceptionally long economic expansion since the “Great
Recession.” The city’s “big three” revenue sources are sales, property, and transient occupancy taxes. In the most recent
four fiscal years, property taxes have shown significant growth. An increase in assessed values of 5.4 percent in total for
residential, commercial and industrial properties led to higher property tax revenues. This was the fourth year in a row
since the recession (a lagging indicator of the financial health of the city) that the city saw growth in all three assessed
value components (residential, commercial and industrial). Sales tax revenues were up significantly for the year. The
state recently implemented a new system that impacted the timing of sales tax revenues for the year. Sales tax revenues
for the previous fiscal year were artificially low due to this system conversion; however, the city was made whole in fiscal
year 2018-19. Until the state has been operating the new remittance program for a year, it will be challenging to compare
sales tax revenues by quarter, as there are still some timing differences. Transient occupancy tax continues to grow
through increased occupancy, increased average daily rates and new hotel rooms. Higher room and occupancy rates
throughout the city, as well as the addition of two new hotels (the second LEGOLAND Hotel and the Westin Hotel) led to
higher transient occupancy taxes for the year. The city implemented a new business license system in November 2016,
creating timing differences in the receipt of license revenues. Fiscal year 2018-19 saw the second full year using the new
system. During this transition to the new system, additional staff were added to the team to ensure timely processing
of new business license applications and renewals, generating additional revenues for the fiscal year as compared to the
prior fiscal year. As expected, development slowed down during fiscal year 2018-19, but remained relatively strong for
the year. The city saw infill residential development as well as some of the last remaining master planned community
development. There was very little commercial and industrial development during the year. Income from property and
investments were heavily impacted by three factors: the unrealized gains created by adjusting the city’s investments to
their fair market value at June 30, 2019 (as required by GASB), an increase in the average yield on the treasurer’s portfolio
for the year (an increase in the yield from 1.6 percent last fiscal year to 2.0 percent in the current fiscal year), and a 5.5
percent increase in the average daily cash balance in the General Fund for the year. These three factors combined to
create a significant increase in income from property and investments. Flat water and wastewater rates combined with
a reduction in water led to a reduction in charges for services for the year. A decrease in the donation of developer
constructed assets (roads, pipelines, sidewalks, etc.) and a reduction in developer impact fees due to lower level of
development throughout the city led to the decrease in capital grants and contributions.
The total cost of all programs and services was approximately $266.8 million in fiscal year 2018-19. This was moderately higher (4.5 percent) than the fiscal year 2017-18 figure of $255.4 million. During the fiscal year the city changed its
budget practices, changing the policy surrounding carrying forward unspent appropriations at the end of the fiscal year.
With this change, city departments focused on completing projects that were in process and procuring planned capital
outlay items by the end of the fiscal year. This accelerated the costs that were incurred in fiscal year 2018-19 as compared
to previous fiscal years. There were several other factors that influenced the change in expenses during the fiscal year.
General government expenses were lower from a smaller supplementary CalPERS payment made on the city’s
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miscellaneous plan ($5.2 million less than fiscal year 2017-18), partially offset by higher personnel costs due to personnel
increases. The variance in public safety expenses was driven predominantly by two factors: the additional CalPERS
payment of $14.2 million partially offset by the annual pension accounting adjustments required by GASB 68. Community
services expenses were impacted by the annual pension accounting adjustments required by GASB 68, general salary
and benefit increases, and additional focus on code enforcement. Normal salary and benefit increases combined with
inflationary impacts on maintenance, operations and capital expenses played a predominant role in higher business-type
activities expenses for the year.
• General Government (8 percent)
This segment of the city is divided into three major groups: Policy and Leadership, Administrative Services and non-
departmental charges. The Policy and Leadership group encompasses all elected officials, the chief executive offices for the city, and the Community Outreach and Engagement team. The Administrative Services group includes
Finance, Human Resources (including Workers’ Compensation and Self-Insured Benefits), Information Technology,
and Risk Management. Non-departmental also includes any special projects directed by City.
• Public Safety (25 percent)
Public Safety remains a top City Council priority. This major service area includes the Police Department, whose
mission is to protect and serve the community with integrity, professionalism, and valor. The Fire Department is the
other component of this major service area with a mission to enhance the quality of life by delivering exceptional
services in safeguarding lives, property, and the environment.
• Community Services (22 percent)
Community Services consists of Library and Cultural Arts, Parks and Recreation, City Clerk Services, and Community
and Economic Development. Library and Cultural Arts provides educational, informational and cultural arts services
for all community residents, which contribute to quality of life by supporting lifelong learning, the pursuit of
knowledge, and creating the availability of community gathering places. Parks and Recreation offers comprehensive
opportunities for meeting the recreational and social needs and interests of the community by providing programs
for all segments of the population. The mission of Community and Economic Development is helping people build a
strong community by guiding and facilitating high quality projects, preserving the environment, providing for and
maintaining a strong economic and employment base, and strengthening neighborhoods through partnerships and
collaboration to improve or enhance the quality of life and sense of community within Carlsbad. Community and
Economic Development encompasses Land Use Planning, Economic Development, the Hiring Center, Housing and
Neighborhood Services, Land Development Engineering, and Building. City Clerk Services includes minutes
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preparation, election administration, agenda preparation, legal noticing and publishing, maintaining the Carlsbad
Municipal Code, ensuring public records are archived, preserved, and accessible to the public, and developing and
implementing citywide records management and document management programs.
• Public Works (14 percent)
Public Works is responsible for building and maintaining all the infrastructure assets of the city. This service area
includes Transportation, Construction Management and Inspection, Storm Drain Engineering, Asset Management,
the Buena Vista Channel, Street Lighting, Property and Fleet Management, and Environmental Management.
• Golf Course (4 percent)
The city opened a municipal golf course in the summer of 2007, further enhancing the tourist attractions the city
offers. The municipal golf course, The Crossings at Carlsbad, is an 18-hole golf course set in the rolling hills and
canyons of Carlsbad. With ocean views, a high-quality golf experience, a first-class restaurant and clubhouse, and
connections to hiking trails, The Crossings at Carlsbad is a destination for golfers and non-golfers alike.
• Solid Waste (1 percent)
The Solid Waste Division of the Utilities Department administers and monitors the solid waste contract and the
Palomar Transfer Station agreement, and is responsible for ensuring the waste reduction and recycling components
of the Source Reduction and Recycling Element and Household Hazardous Waste Element comply with state
mandated diversion and disposal requirements. Also included in this section is the Storm Water Protection Program,
whose goal is to provide leadership and stewardship of the city’s resources protecting the city’s beaches, creeks and
lagoons.
• Water Operations (20 percent)
The Carlsbad Municipal Water District (CMWD), a subsidiary of the city, provides potable and recycled water service
to approximately 85 percent of the city (approximately 29,700 customers). CMWD purchases 100 percent of its
potable water, which includes a new local supply of desalinated seawater, as treated water from the Metropolitan
Water District and the San Diego County Water Authority. CMWD also provides recycled water for irrigation
purposes.
• Wastewater Operations (6 percent)
The city operates and maintains a sanitary wastewater collection system, which covers approximately 65 percent of
the geographic area of the city. Wastewater is treated by the Encina Wastewater Treatment Plant, a facility jointly
owned by the cities of Carlsbad, Vista and Encinitas; the Leucadia Wastewater District; the Vallecitos Water District;
and the Buena Sanitation District.
The following sections will provide information about the operations of the governmental and business-type activities
separately.
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Governmental Activities
The increase in net position for governmental activities was $36.7 million. This increase was generated by total
governmental activities revenues of $222 million ($52.9 million in program revenues and $169.1 million in general
revenues) offset by $185.1 million in total costs of governmental activities, and $200,000 in transfers to the Solid Waste
Fund.
The table below presents the total cost of each of the city’s major programs, as well as each program’s revenue (fees
generated by the activities, contributions, and intergovernmental funding. The net cost (the difference between
adjoining bars in the graph) shows the financial burden that was placed on the city’s taxpayers by each of these programs
(costs covered by general revenues).
Revenues are generated through several sources to cover the cost of the city’s programs. These revenues include fees
and charges paid by those who directly benefit from the programs ($21.8 million), grants and contributions from other
governments and organizations which subsidize certain programs ($31.1 million), and taxes and other revenues (such as
income from property and investments) received by the city to pay for the “public benefit” portion, totaling $169.1
million.
Community Services revenues are derived from development activities throughout the city, housing assistance programs,
parks and recreation fees, and library fees. A large portion of Community Services revenues are comprised of housing
assistance programs (Section 8 Rental Assistance, affordable housing loan repayments, and developers paying into the
Affordable Housing Trust Fund) as well as charges for development related services. As expected, development activity
reflected a substantial decrease from the prior fiscal year, offsetting a portion of the program expenses.
The majority of Public Works revenues are used to acquire and build capital assets (versus covering operating expenses).
In addition, the donation of capital assets from developers is reflected in the program revenues for Public Works. Capital
assets are generally constructed or purchased once sufficient funds have been accumulated to pay for the cost. Several
years ago, the city entered a new stage of its lifecycle, from a developing or growing stage, to a mature stage. As the city
47
continues to mature and approach build-out, there will be fewer master planned projects. In past years, these projects
constructed new facilities, roads, parks, and other city-owned infrastructure. The city is shifting its focus towards
maintenance of existing facilities and will use funding sources such as the Infrastructure Replacement Fund to maintain
and replace these assets. There are still some master planned communities that were recently completed or are near
completion, including the La Costa Oaks Industrial Park, Uptown Bressi, Poinsettia 61 and Zone 15. The developers of
these communities have dedicated or will dedicate infrastructure to the city, a requirement for development.
Business-type Activities
Program revenues for the city’s business-type activities totaled $78.1 million for the year, while program expenses
equaled $81.7 million.
Water program revenues are lower than program expenses primarily due to decreased demand for potable and recycled
water resulting from increased rainfall compared to the previous year. In addition, there was no increase in water rates
(water and delivery charges) for calendar year 2019. Water program expenses were higher than last year, due to the
enterprise making an additional CalPERS payment to the operator of the recycled water facility to address the unfunded
liability and partially offset by the net effect of reduced water purchases.
The city’s golf course enterprise was in its twelfth full year of operation and finished the fiscal year with a net loss of $2.8
million. However, excluding depreciation expenses, golf course revenues were sufficient to fund normal golf course
operating expenses,.
Wastewater program revenues were slightly below program expenses due to making an additional CalPERS payment to
address the unfunded liability.
Capital construction expenses are spread over the life of an asset as annual depreciation charges (program expenses)
and are not reflected as an expense in the year acquired.
A more detailed discussion of each of the enterprises can be found in the Proprietary Funds Section.
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Financial Analysis of the City’s Funds
As noted earlier, the city uses fund accounting to ensure compliance with finance related legal requirements. In the
current Comprehensive Annual Financial Report (CAFR), the implementation of a prior GASB pronouncement resulted in
the Community Activity Grants Fund being combined with the General Fund for financial statement presentation.
Governmental Funds
The focus of the city’s governmental funds is to provide information on near-term inflows, outflows, and balances of
spendable resources. This information is useful in assessing the city’s financing requirements. In particular, unassigned
fund balances may serve as a useful measure of a government’s net resources available for spending at the end of the
fiscal year.
There are five fund balance classifications: non-spendable, restricted, committed, assigned, and unassigned. These fund
balance classifications comprise a hierarchy based primarily on the extent to which a government is bound to observe
constraints imposed upon the use of the resources reported in governmental funds. Detail of the fund balances by
classification is shown in Note 10 of the financial statements. As of the end of the current fiscal year, the city’s
governmental funds reported combined ending fund balances of $599.7 million, up $33.3 million from the year before.
Approximately 8 percent ($49.6 million) constitutes non-spendable fund balances, mostly comprised of advances and
loans to other funds. Restricted fund balances can only be spent for a specific purpose stipulated by law and make up
about 42 percent ($251.9 million). Assigned fund balances are intended to be used by the city for specific purposes, but
do not meet the criteria to be classified as restricted or committed. These make up 33 percent ($195.5 million) of the
city’s fund balance. Approximately 17 percent ($101.7 million) of the fund balance is unassigned, which is available for
spending at the city council’s discretion. Of the $101.7 million unassigned fund balance, the City Council has set aside
$19.1 million for economic uncertainty purposes. However, accounting standards require that the $19.1 million set aside
be shown as part of the city’s unassigned fund balance.
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Total
Increase Percentage
(Decrease)Change
2018 2019
Revenues
Taxes $136.2 $148.8 $12.6 9.3%
Intergovernmental 1.3 1.9 0.6 46.2%
Licenses and permits 3.0 2.7 (0.3)-10.0%
Charges for services 10.0 9.1 (0.9)-9.0%
Fines and forfeitures 0.7 0.6 (0.1)-14.3%
Income from property and investments 3.0 9.6 6.6 220.0%
Miscellaneous 1.4 1.5 0.1 7.1%
Total revenues 155.6 174.2 18.6 12.0%
Expenditures
General government 25.9 23.7 (2.2)-8.5%
Interdepartmental charges (3.2)(4.6)(1.4)43.8%
Public safety 58.0 77.3 19.3 33.3%
Community services 38.6 41.5 2.9 7.5%
Public works 15.9 16.8 0.9 5.7%
Total expenses 135.2 154.7 19.5 14.4%
Excess (deficiency) before transfers 20.4 19.5
Transfers in 0.2 0.3
Transfers out (12.9)(13.2)
Increase (decrease) in fund balance 7.7 6.6
Beginning fund balance 171.4 179.1
Ending fund balance $179.1 $185.7
2018-19
Total
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GENERAL FUND
(in millions of dollars)
The General Fund is the main operating fund of the city, and at the end of the fiscal year had a total fund balance of
$185.7 million, an increase of $6.6 million. The unassigned fund balance portion of the General Fund was $101.7 million,
an increase of $19.1 million from last fiscal year. During the fiscal year, the City Council approved a new budget surplus
policy that changed how unspent appropriations from one fiscal year are carried forward into the next fiscal year. This
new policy reduced the amount of carry forward budgets from fiscal year 2018-19 to fiscal year 2019-20 by $6.9 million.
Also, the city made an additional $20 million CalPERS payment during the fiscal year, of which $19.3 million was charged
to the General Fund ($700,000 was charged to the Water and Wastewater Funds). The city used $5.5 million of funds
previously set aside (assigned) for CalPERS stability to help make this payment. A major factor in the decrease in General
Government expenditures is the result of an additional CalPERS payment made last year of $9.7 million versus $5.1
million in fiscal year 2018-19 (General Government’s portion of the $20 million CalPERS payment). Another change
driving the General Government variance was the change made in the accounting for billing services provided by the
Finance Department for the city’s enterprises. This also impacted the change in interdepartmental charges. Public Safety
expenditures were also impacted by the additional CalPERS payment of $20 million, as $14.2 million was charged to this program. Community Services were impacted by the full year operation of the Pine Avenue Community Center,
additional focus on homeless programs, higher nuisance abatement costs, new library programs, and an update of the
Schulman Auditorium sound system. These additional expenditures were heavily offset by the growth in several key
revenues during the year: property taxes, transient occupancy tax, sales tax, business license taxes, franchise fees,
income from property and investments. The economy continues to remain strong. This was evident as all the tax
50
revenues in the city saw moderate to significant growth during the year. As expected, development activity within the
city saw a moderate decrease (charges for services and licenses and fees), after a relatively strong 2017-18 fiscal year.
With the city approaching buildout, several of the remaining large residential master planned communities and
industrial/commercial parks saw a reduction in construction activity as they neared completion, leaving only a small
portion of the city undeveloped. This slower pace is projected to continue and cause a further revenue decline for the
foreseeable future as the city approaches buildout.
In the city’s fiscal year 2018-19 budget, expenditures were expected to increase 6.9 percent over the fiscal year 2017-18
budget to $155.8 million. The total personnel budget for fiscal year 2018-19 was $92.9 million, which was 2.5 percent
more than the previous year’s personnel budget of $90.4 million. The total maintenance and operations (M&O) budget
for fiscal year 2018-19 was $49.5 million, which was 15.9 percent higher than the previous year’s budget of $42.7 million.
The increase in personnel budgets was based on previously negotiated salary and benefit increases, the net addition of
13.3 new staff members (8.0 full-time, a decrease of 3.0 limited-term positions, a transfer of 5.0 full-time staff to the
Information Technology Internal Service Fund, and 3.3 part-time staff), projected retirement rate increases, and
increases in workers compensation costs. Health insurance costs were projected to remain flat for the year. All General
Fund departments assumed a 2.5 percent M&O escalator. In total, General Fund M&O costs were expected to increase
by 15.9 percent due to general increases in internal service charges, a change made in the accounting for billing services
by the Finance Department for the city’s enterprises, increases for tuition reimbursement and citywide training/
development, staff development and succession planning consulting services, costs associated with the implementation
of the Cultural Arts Master Plan, operating costs associated with new park facilities, a new Pest Management Plan, and
additional traffic signal maintenance costs. Transfers out of the General Fund were budgeted at $13.2 million, a $700,000
increase from the prior fiscal year. This increase was due primarily to increases in the transfers from the General Fund
to the Infrastructure Replacement Fund ($700,000). Adding to the adopted budget of $155.8 million for the General
Fund, approximately $25.2 million in unspent fiscal year 2017-18 budgeted expenditures was carried over to fiscal year
2018-19, and there were $8.1 million in open encumbrances as of June 30, 2018.
The Community Facilities District Number 1 Fund continues to collect assessments for the future construction of city
infrastructure and facilities.
The General Capital Construction Fund used a portion of its existing fund balance to fund public beach access
improvements, finish the Park Drive drainage and street improvements project, and Fire Station No. 5 storage building
and roof replacement.
The fund balance in the Infrastructure Replacement Fund increased, as the city continued the annual transfer of funds
from the General Fund for the future replacement of existing infrastructure and facilities. During the year, several
projects were funded within the Infrastructure Replacement Fund, including: the La Costa Avenue storm drain
replacement; preventive maintenance activities such as deck sealing, concrete patching, and repairing spall to increase
the life of bridge structures; and replacing corrugated metal pipe storm drain pipelines with alternative materials.
The Park Development Fund and the Public Facilities Construction Fund used a portion of their existing fund balances for
the Aviara Community Park gathering space, picnic area, and warming kitchen; as well as the restoration of the historic
horse stables, reconstruction of a chicken coop and new restrooms at Leo Carrillo Park.
During the year, the city continued to set aside money for the construction of various projects within these funds.
Historically, the city has not issued debt to fund the construction of capital projects and sets aside funds on an annual
basis until sufficient funds have been collected for the construction of specific projects. In addition, projects will not be
constructed until anticipated annual operating costs can be absorbed into the city’s budget without creating a deficit.
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Proprietary Funds
The purpose of the city’s proprietary fund sections is to provide short- and long-term financial information about the
city’s business-type activities. The analysis focuses on the determination of operating income, changes in net position
(cost recovery), financial position, and cash flows.
CMWD funds had an operating loss of approximately $3.9 million for the year. Operating revenues were approximately
$47.5 million and operating expenses were approximately $51.4 million. One of the larger factors in the operating loss
was the decrease in volume of water sales, which was directly attributable to almost three times more rainfall in the
current year. Water rates were increased in January 2017 and held flat during 2018 and 2019. The cost of purchased
water from the Metropolitan Water District and the San Diego County Water Authority (suppliers of the CMWD’s potable
water) continued to increase. The decrease in purchased water, and the purchase of costlier desalinated water, were
offset primarily by increased pension costs of the operator of the recycled water facility. Increases in income from
property and investments (higher yield on the treasurer’s portfolio, higher average cash balances, and the impacts of
GASB 31) and property taxes (an increase in assessed values of 5.4 percent) resulted in income before transfers and
capital contributions of $5.2 million.
In the twelfth year of operation, the Golf Course Fund had an operating loss of $3.1 million, primarily due to depreciating
the enterprise's assets ($3.5 million). If golf course operating revenues are not sufficient to cover golf course operating
expenses (excluding depreciation), the General Fund will make contributions in the form of lease payments to pay for the shortfall. Revenues remained strong in the current year, but an increase in course maintenance and personnel
expenses drove a lower operating result.
The Wastewater Funds had an annual operating loss of $1.1 million for the fiscal year. Total revenues from operations
were up by $223,000, due primarily to development throughout the city. The increase in operating expenses was
predominantly due to increased CalPERS costs and a depreciation true-up at the operator of the wastewater treatment
facility. Non-operating revenues related to income from property and investments added $1.7 million to the operating income (an increase in the yield on the treasurer’s portfolio, an increase in average cash balances, and the impacts of
GASB 31), resulting in a net gain of $593,000 before transfers and capital contributions.
Solid Waste Operations and Storm Water Programs are combined on the city’s financial reports and showed a net
operating loss of $256,000 for the year. Revenues were essentially the same as the previous fiscal year, and expenses
increased due to planned increases in outside professional service costs (higher fats, oil and grease inspection services
as well as pipeline maintenance costs). The operating loss was more than offset by income from property and
investments (an increase in the yield on the treasurer’s portfolio, an increase in average cash balances, and the impacts
of GASB 31), and resulted in a net gain before transfers and capital contributions of $294,000.
The unrestricted net position for the Water, Golf Course, Wastewater, and Solid Waste Operations at the end of the year
amounted to $96.6 million, or approximately 20 percent of the total enterprise funds net position. The unrestricted net
position may be used for rate stabilization, fluctuations in operating expenses, and unforeseen repairs and
maintenance. Approximately $38.5 million, or 8 percent, of the net position of all the proprietary funds are restricted
for the future capital construction of new and replacement water and wastewater infrastructure assets. Since the
funding for the replacement of infrastructure assets is not restricted, it is reflected in the Statement of Net Position as
unrestricted. The city does, however, account for and monitor these amounts in separate funds to ensure that water
and wastewater assets can be replaced when needed. The large unrestricted net deficit in the Golf Course Fund
represents funds advanced from the city’s General Fund that were used to fund construction, former operating losses
and debt expenses of the municipal golf course.
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General Fund Budgetary Highlights for Fiscal Year 2018-19
Management monitors revenues during the year and updates estimated revenue figures when new information is
received. General Fund revenue estimates were revised moderately during the year, as compared to the originally
budgeted estimates. Some of the factors that led to the $3.5 million increase in revenue estimates included:
• several new federal and state grants were applied for and received during the year;
• increased sales tax revenues due to the State of California changing the timing in remitting sales tax revenues
to the city;
• increased transient occupancy taxes from the addition of two new hotels, higher occupancy rates, and higher
average daily rates;
• additional disaster relief from the California Office of Emergency Services for the 2014 Poinsettia Fire;
• higher interest rates earned on larger than planned cash balances; and
• several new master planned communities and higher than originally budgeted industrial/commercial
development that led to higher building permit and associated revenues (licenses and permits, as well as
charges for services) than originally budgeted.
The increase from the total original expenditure budget to the final budget amounted to $20.9 million primarily due to:
• a $19.3 million supplemental payment made to CalPERS to help stabilize future retirement costs;
• the appropriation of grant money received;
• sales tax audit expenses;
• developer funded studies;
• the appropriation of mutual aid response overtime reimbursements received;
• the implementation of the North Beach lifeguard program;
• additional unfunded litigation and expert expenses related to the Safety Training; and
• maintenance for newly acquired Village H property.
The difference between the final budgeted expenditures and the actual expenditures for the year (on a budgetary basis)
of $31.8 million can be generally summarized as follows:
• Interdepartmental charges were $234,000 below estimates, which are offset against expenditures for reporting
purposes in the financial statements.
• Savings by various major service areas within the city totaling $31.6 million. Current year savings were generated
from:
o unfilled staff vacancies;
o overall awareness of fiscal responsibility throughout the city;
o deferral of projects; and
o accumulated savings set aside for future technology and innovation enhancements.
o Of the $31.6 million in savings, $22.4 million will be carried forward into fiscal year 2019-20 and is planned to
be used for:
✓ innovation projects throughout the city;
✓ Police memorandum of understanding (MOU) increases;
✓ Safety Center air handler replacement;
✓ Parks & Recreation master plan updates;
✓ backfile conversion;
✓ replace Schulman Auditorium sound system;
✓ community public art projects;
✓ three Police vehicles;
53
✓ invasive species mitigation;
✓ unfunded litigation;
✓ outfitting of a new fire engine;
✓ business process and training documentation;
✓ outfitting vehicles;
✓ increased costs for five vehicles:
✓ climate action plan;
✓ crossing guard contract increase;
✓ resident satisfaction/opinion survey;
✓ contracted grant writing;
✓ Harding Community Center office remodel;
✓ Dove Library wayfinding:
✓ retail study; and
✓ talent assessment and succession planning.
For purposes of budgetary presentation, actual revenues have been adjusted to exclude unrealized gains and losses in
investments pursuant to GASB; actual expenditures have been adjusted to include remaining encumbrances.
Capital Asset and Debt Administration
Capital Assets
At the end of fiscal year 2018-19, the city had recorded investments of over $1.1 billion in a broad range of capital assets,
including park facilities, land, buildings, roads, bridges, drainage facilities, water and sewer lines, Police and Fire vehicles,
and other maintenance equipment. This number includes infrastructure assets of the general government which are
required per GASB.
Some of this year’s major capital asset additions included:
• improvements to public beach access along Ocean Street;
• completion of the Fire Station No. 5 storage building roof;
• completion of the Faraday building refurbishment project;
• completion of the Leo Carrillo Park Phase III project;
• completion of various Americans with Disabilities Act improvement projects including accessibility
improvements to sidewalks, curb ramps and pedestrian signals;
Total
Percentage
Change Change
2018 2019 2018 2019 2018 2019 2018-19 2018-19
Land $153.2 $153.7 $9.4 $9.4 $162.6 $163.1 $0.5 0.3%
Construction in progress 10.0 16.8 41.6 46.1 51.6 62.9 11.3 21.9%
Buildings and other structures 135.9 136.4 41.0 41.0 176.9 177.4 0.5 0.3%
Improvements other than buildings 81.5 84.3 52.3 52.3 133.8 136.6 2.8 2.1%
Machinery and equipment 43.4 46.0 12.6 12.9 56.0 58.9 2.9 5.2%
Infrastructure 721.9 726.2 342.2 350.4 1,064.1 1,076.6 12.5 1.2%
Wastewater treatment facility - - 57.8 58.1 57.8 58.1 0.3 0.5%
Intangibles 5.0 5.0 - - 5.0 5.0 - 0.0%
1,150.9 1,168.4 556.9 570.2 1,707.8 1,738.6 30.8 1.8%
Accumulated depreciation (357.2) (381.1) (192.4) (206.7) (549.6) (587.8) (38.2) 7.0%
Total $793.7 $787.3 $364.5 $363.5 $1,158.2 $1,150.8 ($7.4)-0.6%
Activities Activities Total
CITY OF CARLSBAD'S CAPITAL ASSETS
(in millions of dollars)
Governmental Business-Type
54
• expansion of the recycled water facility;
• Taylor Morrison of California donated assets (waterlines, improvements to existing street);
• Army Navy Athletic Field donated assets (water lines, sewer lines, improvements to existing streets);
• Miles Pacific Subdivision donated assets (sewer lines, water lines, improvements to existing streets);
• Coastal Living 10 donated assets (waterlines, improvements on existing streets);
• Shoppes at Carlsbad donated assets (waterlines);
• Sohaei Minor Subdivision donated assets (waterlines, improvements to existing roadway);
• 33 vehicles;
• one transit cargo van;
• six police SUV vehicles;
• one sewer inspection truck;
• three trailers;
• one jet ski;
• one full size wheel loader;
• five Hostile Vehicle Mitigation (barrier) systems;
• fixed license plate recognition system;
• one police canine;
• Motorola two-way radios;
• information technology security system and performance enhancement equipment;
• several sewer line projects; and
• several storm drain projects.
In addition to carrying forward appropriations of $230.4 million for previously budgeted projects, the city’s fiscal year
2019-20 capital improvement budget appropriates an additional $53.6 million for capital projects.
These additional appropriations are principally for the following projects: reconstruction of Fire Station No. 2; trail
connectivity to Tamarack State Beach; replacement of Monroe Street Pool; Senior Center refurbishment; Stagecoach
Park synthetic turf replacement; Hosp Grove Park improvements; various channel clearing and storm drain
improvements; improvements at the Encina Water Pollution Control Facility; Supervisory Control and Data Acquisition
(SCADA) improvements; sewer lift station repairs and upgrades; wastewater line refurbishments/replacements at various
locations throughout the city; water valve repair/replacements; Avenida Encinas widening south of Palomar Airport
Road; Terramar area coastal improvements; village decorative lighting; the ongoing pavement management program;
additional water and recycled water lines and continuation of the water valve repair/replacement program and the
northwest quadrant storm drain improvement program.
These projects will be financed by development fees, infrastructure and replacement transfers from the General Fund,
special district fees and taxes, water and wastewater replacement reserves and other sources, including grants and
contributions from other agencies. More detailed information about the city’s capital assets is presented in Note 6 to
the financial statements and in the city’s Capital Improvement Program (CIP) document, which can be found on the city’s
website or obtained from the Administrative Services Department.
55
Long Term Debt
At fiscal year-end, the city had $17.2 million in capital leases and loans, an increase of $1.7 million from last year, as
shown in the table above. Regular payments were made on all the city’s outstanding capital leases and loans, and the
city made an additional draw on the loan with the State Water Resources Control Board. More detail about the city’s
long-term liabilities is presented in Note 7 to the financial statements.
Economic Factors and Next Year’s Budgets and Rates for Fiscal Year 2019-20
• The State of California adopted its fiscal Year 2019-20 Annual Budget with the following provisions affecting the city:
o The state budget projects short-term revenues of $3.2 billion above the Governor’s Budget. Most of increased
revenues are constitutionally obligated to reserves, debt repayment and schools. Therefore, the budget surplus
remains relatively unchanged.
o The state has built a strong fiscal foundation by paying down liabilities and building up reserves that will help
manage the effects of an economic downturn.The state budget forecast recognizes slower growth in the
economy but does not predict a recession.
o In November 2014, California voters approved Proposition 2, which sets aside additional revenues, primarily
from capital gains, to address future economic downturns, instead of increasing ongoing expenditures. This set
aside is also referred to the “rainy day” fund.
o California voters approved to make permanent the income tax increases under Prop 30.
• Net assessed values in the city stand at over $35 billion, a 6.2 percent increase from the prior fiscal year, due to new
construction and escalating home and commercial/industrial property values.
• Sales tax revenues are projected to increase by 3.6 percent. A factor in the projected increase in sales tax revenues
are the newly renovated Shoppes at Carlsbad. Westfield (the former owner of the mall) sold this property in 2015.
The new owners (Brookfield) continue to renovate the mall. In addition, the city continues to see increased internet
sales tax revenues (Wayfair decision), a new Tesla dealership opened in the city in October 2019, new restaurant
and retail establishments, and general increases in sales tax revenues.
• The new Home 2 Hotel (142 rooms) is expected to open in March 2020 adding to the city’s transient occupancy tax
revenues.
• CalPERS is addressing a structural shortfall by lowering the discount rate used to determine the city’s annual pension
costs. The reduction in the discount rate is being phased in over several years. The impact in the fiscal year 2019-
20 budget is a citywide increase in pension costs of 5.1 percent.
• Median home prices for single-family residences in Carlsbad have increased by 14.6 percent from January 2018
($814,000) to January 2019 ($989,000).
• City departments were not given an automatic budget increase, but rather were asked to request a budget for fiscal
year 2019-20 that would be adequate to fund changes in the Consumer Price Index (CPI), any additional funding for
existing contractual obligations, and to make requests for any new programs.
• The city added a net 41 full-time positions and a net 14.1 part-time positions to better align staffing with the services
the city provides.
Total
Percentage
Change
2018 2019 2018 2019 2018 2019 2018-19
Loans $0.0 $0.0 $14.9 $16.8 $14.9 $16.8 12.8%
Capital Leases 0.6 0.4 0.0 0.0 0.6 0.4 -33.3%
Total $0.6 $0.4 $14.9 $16.8 $15.5 $17.2 11.0%
CITY OF CARLSBAD'S OUTSTANDING DEBT
Total
(in millions of dollars)
Governmental
Activities
Business-Type
Activities
56
• Through Memorandums of Understanding (MOUs):
o The Carlsbad City Employees’ Association (CCEA) employees will receive 3.0 percent salary increases on January
1, 2020.
o Fire Management and General Management employees will receive 3.0 percent salary increases on January 1,
2020.
o Carlsbad Police Management Association (CPMA) employees will receive an average 5.5 percent total
compensation increases in December 2019.
o The Carlsbad Police Officers Association (CPOA) received an average of a 5.5 percent total compensation
increases on October 10, 2019.
o The Carlsbad Firefighters Association (CFA) is currently in negotiations and any salary increase will be
appropriated from either the City Council contingency or the General Fund reserves in fiscal year 2019-20.
These factors were considered when preparing the city’s General Fund budget for fiscal year 2019-20. Budgeted
expenditures are expected to increase 7.3 percent to $167.1 million. The total personnel budget for fiscal year 2019-20
is $101.4 million, which is 9.1 percent more than the previous year’s personnel budget of $92.9 million. The total
maintenance and operations (M&O) budget for fiscal year 2018-19 is $53.8 million, which is 8.6 percent higher than the
previous year’s budget of $49.5 million. The total capital outlay budget for fiscal year 2019-20 is $600,000, $400,000 higher than the previous year. The increase in personnel budgets is based on previously negotiated salary and benefit
increases, and the net addition of 34 new full-time and 11.37 part-time staff. Increases in retirement costs (CalPERS
rates), health insurance rates, and worker’s compensation rates also contributed to the increase in budgeted personnel
costs. The maintenance and operations budget for fiscal year 2019-20 includes appropriations for general increases in
internal service charges, general price increases, general contract increases, and costs associated with new programs (i.e.
homeless response program, North Beach lifeguard program, and costs associated with the hiring of new employees
(vehicles, computer, training, etc.). Transfers out of the General Fund are budgeted at $11.5 million, a $1.7 million
decrease from the prior fiscal year. This decrease is due primarily to the elimination of a budget transfer to the Workers
Compensation Fund for fiscal year 2019-20 (a $1.5 million transfer was done in fiscal year 2018-19). Adding to the
adopted budget of $167.1 million for the General Fund, approximately $22.4 million in unspent fiscal year 2018-19
budgeted expenditures will be carried over to fiscal year 2018-19, as well as $11 million in open encumbrances as of
June 30, 2019.
During the current fiscal year, the unassigned fund balance in the General Fund increased by $19.1 million to $101.7
million. Although originally projected to grow by $9.5 million according to the fiscal year 2018-19 adopted budget, the
city made an additional $20 million payment to CalPERS to help stabilize future retirement costs, the city adopted a new
General Fund Surplus Policy which reduced the amount of assigned carry forwards made by the city, and actual General
Fund Revenues (including the $3.3 million impact of GASB 31), all contributing to the increased in the unassigned fund
balance for the year. Based on fiscal year 2019-20 projections, the unassigned General Fund balance is expected to grow
by approximately $3.4 million.
The city took an additional step in fiscal year 2018-19 to prepare to weather economic downturns. An additional General
Fund set aside of $9.1 million was made by the City Council as an Economic Uncertainty Reserve, which can be used to
shore up revenue shortfalls during normal recessions. This was added to the existing $10 million Economic Uncertainty
Reserve for a new total of $19.1 million.
Projected revenues are currently sufficient to build the projects listed in the fiscal year 2019-20 CIP.
The city’s business-type activities reflect the following:
• The effective increase in purchase costs for CMWD is projected to be approximately 3.5 percent. The cost of water
purchased from the San Diego County Water Authority is projected to increase significantly due to decreased county-
wide demand and increases in Metropolitan Water District’s water rates, inter alia; however, cost increases are being
partially mitigated through planned draws on San Diego County Water Authority’s rate stabilization fund. Draws
from Carlsbad Municipal Water District’s rate stabilization fund have allowed CMWD to keep rates low during fiscal
year 2019-20 with rate increases of 1% beginning in January 2020 and 2% in January 2021.
57
• Wastewater rates have been held flat for the past four years; however, increases of 3 percent for calendar year 2020
and 3 percent for calendar year 2021 are needed to offset increased pension costs of the operator of the wastewater
treatment facility, increased energy and chemical costs, and increased capital repair costs. Better than anticipated
financial results in fiscal year 2018-19, healthy reserves, and a positive outlook for the fund mitigated the need for
a rate increase.
• The golf course bonds were paid off in September 2016. As a result, the operation will continue to see improvements
in their cash flows going forward.
• There are no projected significant changes in other revenue sources.
Contacting the City’s Financial Management
This financial report is designed to provide the residents, taxpayers, customers, investors, and creditors with a general
overview of the city’s finances and to demonstrate the city’s accountability for the money it receives. If you have any
questions about this report or need additional information, contact the Administrative Services Department,
1635 Faraday Avenue, Carlsbad, CA 92008, 760-602-2430, or at www.carlsbadca.gov.
June 30, 2019
Governmental Business-Type
ASSETS Activities Activities Total
Cash and investments 571,277,668 $ 205,782,306 $ 777,059,974 $
Receivables:
Interest 2,940,613 1,029,750 3,970,363
Taxes 10,643,829 41,356 10,685,185
Other 1,290,304 831,083 2,121,387
Accounts, net of allowances 101,138 10,065,231 10,166,369
Due from other governments 1,110,079 3,335,169 4,445,248
Inventories 475,716 817,594 1,293,310
Prepaid items 185,098 49,582 234,680
Land held for resale 617,247 - 617,247
Loan and reimbursement receivables, net of allowances 21,706,518 - 21,706,518
Due from Successor Agency 7,255,238 - 7,255,238
Deposits 25,000 - 25,000
Internal balances 54,574,353 (54,574,353) -
Subtotal 672,202,801 167,377,718 839,580,519
Capital assets:
Land 153,680,535 9,375,975 163,056,510
Construction in progress 16,752,652 46,142,826 62,895,478
Buildings and other structures 136,441,283 40,952,166 177,393,449
Improvements other than buildings 84,333,943 52,278,030 136,611,973
Machinery and equipment 46,038,742 12,933,255 58,971,997
Infrastructure 726,181,012 350,381,308 1,076,562,320
Wastewater treatment facility - 58,126,463 58,126,463
Intangible assets 5,017,448 - 5,017,448
Less accumulated depreciation (381,102,511) (206,735,250) (587,837,761)
Total capital assets 787,343,104 363,454,773 1,150,797,877
Total assets 1,459,545,905 530,832,491 1,990,378,396
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - OPEB related items 632,012 346,290 978,302
Deferred outflows of resources - pension related items 58,403,901 3,453,624 61,857,525
Total deferred outflows of resources 59,035,913 3,799,914 62,835,827
Statement of Net Position
Primary Government
The notes to the financial statements are an integral part of this statement.
58
June 30, 2019
Governmental Business-Type
LIABILITIES Activities Activities Total
Accrued liabilities 13,965,477 $ 4,848,932 $ 18,814,409 $
Accrued interest payable - 58,553 58,553
Due to other governments 491 13,084,321 13,084,812
Estimated claims payable 13,115,781 - 13,115,781
Deposits payable 518,704 5,439,254 5,957,958
Unearned revenue 1,186,260 94,236 1,280,496
Noncurrent liabilities:
Due within one year 222,373 1,582,886 1,805,259
Due in more than one year:
Loans payable and capital leases 155,922 15,243,719 15,399,641
Net OPEB liability 1,506,060 719,407 2,225,467
Net pension liability 152,900,419 10,120,726 163,021,145
Total liabilities 183,571,487 51,192,034 234,763,521
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - OPEB related items 243,247 126,373 369,620
Deferred inflows of resources - pension related items 6,902,220 637,005 7,539,225
Total deferred inflows of resources 7,145,467 763,378 7,908,845
NET POSITION
Net investment in capital assets 786,964,809 346,628,168 1,133,592,977
Restricted for:
Capital assets 194,434,512 38,539,621 232,974,133
Lighting and landscaping districts 8,025,279 - 8,025,279
Affordable housing 43,588,233 - 43,588,233
Habitat and agricultural mitigation management 1,523,598 - 1,523,598
Other purposes 4,328,537 - 4,328,537
Unrestricted 288,999,896 97,509,204 386,509,100
Total net position 1,327,864,864 $ 482,676,993 $ 1,810,541,857 $
The notes to the financial statements are an integral part of this statement.
Primary Government
Statement of Net Position (continued)
59
Statement of Activities
For the Year Ended June 30, 2019
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary government:
Governmental activities:
General government 22,234,445 $ 1,678,967 $ 1,492,116 $ 1,860 $
Public safety 67,968,386 4,784,327 357,651 479,803
Community services 57,977,650 10,754,858 10,622,607 3,595,644
Public works 36,897,256 4,573,777 4,834,664 9,764,553
Interest and fiscal charges on long-term debt 3,614 - - -
Total governmental activities 185,081,351 21,791,929 17,307,038 13,841,860
Business-type activities:
Carlsbad Municipal Water District 51,637,830 46,430,864 1,055,502 3,977,628
Golf course 11,034,686 7,978,896 - -
Wastewater 15,238,408 14,098,783 73,299 886,365
Solid waste 3,840,148 3,440,551 131,444 -
Total business-type activities 81,751,072 71,949,094 1,260,245 4,863,993
Total primary government 266,832,423 $ 93,741,023 $ 18,567,283 $ 18,705,853 $
General revenues:
Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Business license taxes
Real property transfer taxes
Income from property and investments
Other general revenues
Transfers
Total general revenues and transfers
Change in net position
Net position at beginning of year, as restated
Net position at end of year
The notes to the financial statements are an integral part of this statement.
Program Revenues
60
Governmental Business-type
Activities Activities Total
(19,061,502) $ -$ (19,061,502) $
(62,346,605) - (62,346,605)
(33,004,541) - (33,004,541)
(17,724,262) - (17,724,262)
(3,614) - (3,614)
(132,140,524) - (132,140,524)
- (173,836) (173,836)
- (3,055,790) (3,055,790)
- (179,961) (179,961)
- (268,153) (268,153)
- (3,677,740) (3,677,740)
(132,140,524) (3,677,740) (135,818,264)
69,951,948 4,002,341 73,954,289
38,510,186 - 38,510,186
26,320,645 - 26,320,645
6,099,806 - 6,099,806
5,321,779 - 5,321,779
1,714,782 - 1,714,782
20,695,305 7,784,199 28,479,504
438,929 112,475 551,404
(219,274) 219,274 -
168,834,106 12,118,289 180,952,395
36,693,582 8,440,549 45,134,131
1,291,171,282 474,236,444 1,765,407,726
1,327,864,864 $ 482,676,993 $ 1,810,541,857 $
Net Revenue (Expense) and
Changes in Net Position
Primary Government
61
Balance SheetGovernmental FundsJune 30, 2019
Community General
General Facilities Capital
ASSETS Fund District No. 1 Construction
Cash and investments 130,019,545 $ 87,332,793 $ 42,557,818 $
Receivables:
Interest 740,112 437,869 214,256
Taxes 10,641,242 2,587 -
Other 916,855 - 181,951
Accounts, net of allowances 82,341 - -
Due from other funds 270,083 - -
Due from other governments 111,397 - -
Inventories 17,659 - -
Prepaid items - - -
Land held for resale - - -
Loans receivable, net of allowances 77,781 - -
Deposits 25,000 - -
Due from Successor Agency 7,255,238 - -
Advances to other funds 55,673,726 1,943,710 -
Total assets 205,830,979 $ 89,716,959 $ 42,954,025 $
LIABILITIES
Accrued liabilities 5,698,852 $ 60,989 $ 287,781 $
Due to other funds - - -
Deposits payable 47,164 5,000 -
Due to other governments 491 - -
Advances from other funds - - -
Unearned revenue 991,531 - -
Total liabilities 6,738,038 65,989 287,781
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - grants - - -
Unavailable revenue - interest on advances 13,416,611 - -
Total deferred inflows of resources 13,416,611 - -
FUND BALANCES
Nonspendable 49,607,793 - -
Restricted - 89,650,970 -
Committed 1,000,000 - -
Assigned 33,367,567 - 42,666,244
Unassigned 101,700,970 - -
Total fund balances 185,676,330 89,650,970 42,666,244
Total liabilities, deferred inflows of
resources, and fund balances 205,830,979 $ 89,716,959 $ 42,954,025 $
The notes to the financial statements are an integral part of this statement.
62
Public Other Total
Infrastructure Park Facilities Governmental Governmental
Replacement Development Construction Funds Funds
119,108,006 $ 11,801,451 $ 27,396,401 $ 103,958,794 $ 522,174,808 $
597,061 59,153 137,383 512,340 2,698,174
- - - - 10,643,829
- - - 191,498 1,290,304
- - 5,657 6,538 94,536
- - - - 270,083
- - - 998,682 1,110,079
- - - - 17,659
- - - 992 992
- - - 617,247 617,247
- - - 21,628,737 21,706,518
- - - - 25,000
- - - - 7,255,238
- - 5,650,000 - 63,267,436
119,705,067 $ 11,860,604 $ 33,189,441 $ 127,914,828 $ 631,171,903 $
232,652 $ 64,941 $ 362,387 $ 1,487,666 $ 8,195,268 $
- - - 270,083 270,083
- - - 465,540 517,704
- - - - 491
- 5,650,000 - 2,113,310 7,763,310
- - - 194,729 1,186,260
232,652 5,714,941 362,387 4,531,328 17,933,116
- - - 107,028 107,028
- - - - 13,416,611
- - - 107,028 13,523,639
- - - 992 49,608,785
- 6,145,663 32,827,054 123,275,480 251,899,167
- - - - 1,000,000
119,472,415 - - - 195,506,226
- - - - 101,700,970
119,472,415 6,145,663 32,827,054 123,276,472 599,715,148
119,705,067 $ 11,860,604 $ 33,189,441 $ 127,914,828 $ 631,171,903 $
63
Reconciliation of the Balance Sheet of Governmental Fundsto the Statement of Net Position
June 30, 2019
Total fund balances - governmental funds 599,715,148 $
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not
reported in the funds.
Governmental funds 774,307,940
Internal service funds 13,035,164
Total capital assets 787,343,104
Deferred outflows are not an available resource and therefore, are not reported in the funds.
Governmental funds 57,398,467
Internal service funds 1,637,446
Total deferred outflows 59,035,913
Internal service funds are used by management to charge the costs of fleet management, self insured
benefits, information technologies, records management, risk management and workers'
compensation to individual funds. The assets and liabilities of the internal service funds are
included in governmental activities in the statement of net position.
Total internal service fund net position 38,292,450
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.(929,773)
Internal service fund net position included as part of total capital assets (13,035,164)
Internal service fund net position included as part of deferred outflows (1,637,446)
Internal service fund net position included as part of long-term liabilities 6,889,653
Internal service fund net position included as part of deferred inflows 597,581
Net internal service fund net position 30,177,301
Interest receivable on advances to other funds is not a current financial resource and therefore, is not
recognized as revenue in the funds until received.13,416,611
A portion of deferred grant revenues are not available to pay for current period expenditures and
therefore, are not recognized in the funds.107,028
Long-term liabilities, including net pension liability, are not due and payable in the current period and
therefore, are not reported in the funds.
Governmental funds (147,895,121)
Internal service funds (6,889,653)
Total long-term liabilities (154,784,774)
Deferred inflows represent an acquisition of net position that applies to a future period so it will not be
recognized until that time.
Governmental funds (6,547,886)
Internal service funds (597,581)
Total deferred inflows (7,145,467)
Net position of governmental activities.1,327,864,864 $
The notes to the financial statements are an integral part of this statement.
64
This
p
a
g
e is intentionally left blank.
65
Statement of Revenues, Expenditures and Changes in Fund BalancesGovernmental FundsFor the Year Ended June 30, 2019
Community General
General Facilities District Capital
Fund No. 1 Construction
Revenues:
Taxes 148,748,285 $ 1,455,868 $ -$
Intergovernmental 1,938,204 - -
Licenses and permits 2,668,048 - -
Charges for services 9,135,341 - -
Fines and forfeitures 539,537 - -
Income from property and investments 9,643,049 3,287,293 -
Contributions from property owners - 1,352,729 -
Donations - - -
Miscellaneous 1,505,358 - 1,077,525
Total revenues 174,177,822 6,095,890 1,077,525
Expenditures:
Current:
General government 23,660,389 103,419 -
Less: interdepartmental charges (4,581,303) - -
Public safety 77,247,700 - -
Community services 41,501,728 - -
Public works 16,808,876 - -
Capital outlay - 562,112 3,095,395
Debt service:
Principal retirement 10,475 - -
Interest and fiscal charges 1,807 - -
Total expenditures 154,649,672 665,531 3,095,395
Excess (deficiency) of revenues
over (under) expenditures 19,528,150 5,430,359 (2,017,870)
Other financing sources (uses):
Transfers in 270,000 - -
Transfers out (13,175,274) - (260,000)
Total other financing sources (uses)(12,905,274) - (260,000)
Net change in fund balances 6,622,876 5,430,359 (2,277,870)
Fund balances at beginning of year 179,053,454 84,220,611 44,944,114
Fund balances at end of year 185,676,330 $ 89,650,970 $ 42,666,244 $
The notes to the financial statements are an integral part of this statement.
66
Public Other Total
Infrastructure Park Facilities Governmental Governmental
Replacement Development Construction Funds Funds
-$ -$ -$ 4,468,867 $ 154,673,020 $
- - - 12,708,617 14,646,821
- - - - 2,668,048
- - - 4,085,716 13,221,057
- - - 41,771 581,308
4,392,019 475,883 1,107,239 4,369,763 23,275,246
- 2,858,952 2,566,524 3,522,672 10,300,877
- - - 1,384,386 1,384,386
- - - 733,560 3,316,443
4,392,019 3,334,835 3,673,763 31,315,352 224,067,206
- - - 269,204 24,033,012
- - - - (4,581,303)
- - - 302,424 77,550,124
- - - 11,448,914 52,950,642
- - - 1,570,630 18,379,506
1,963,002 2,889,559 4,996,962 7,196,314 20,703,344
- - - - 10,475
- - - 3,637 5,444
1,963,002 2,889,559 4,996,962 20,791,123 189,051,244
2,429,017 445,276 (1,323,199) 10,524,229 35,015,962
10,681,000 - - 930,248 11,881,248
- - - (165,248) (13,600,522)
10,681,000 - - 765,000 (1,719,274)
13,110,017 445,276 (1,323,199) 11,289,229 33,296,688
106,362,398 5,700,387 34,150,253 111,987,243 566,418,460
119,472,415 $ 6,145,663 $ 32,827,054 $ 123,276,472 $ 599,715,148 $
67
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2019
Net change in fund balances - total governmental funds 33,296,688 $
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the
cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.
Purchase of capital assets 15,392,073
Loss on the disposal of capital assets (25,000)
Depreciation expense (22,546,514)
Governmental funds do not reflect the donation of capital assets as revenues.656,541
Unpaid interest income on advances to other funds is not a current financial resource, and therefore is
not recognized as revenue in the funds.125,145
Revenues that are recorded in the funds that are not recorded in the statement of activities due to
measurement differences (2,226,048)
The issuance of long-term debt (e.g., leases) provides current financial resources to governmental funds,
the repayment of the principal of long-term debt consumes the current financial resources of
governmental funds.10,475
The net revenue of activities of internal service funds is reported with governmental activities.890,557
Adjustments made to the net pension and net OPEB liabilities do not use current financial resources
and therefore, are not recognized in the funds.11,223,641
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.(103,976)
Change in net position of governmental activities.36,693,582 $
The notes to the financial statements are an integral part of this statement.
68
General Fund
Variance With
Final Budget -
Actual Amounts Over
Original Final (Budgetary Basis)(Under)
Revenues:
Taxes 142,666,000 $ 143,646,000 $ 148,748,285 $ 5,102,285 $
Intergovernmental 879,635 1,602,000 1,938,204 336,204
Licenses and permits 1,864,000 2,301,000 2,668,048 367,048
Charges for services 8,330,000 8,624,000 9,135,341 511,341
Fines and forfeitures 706,000 500,000 539,537 39,537
Income from property and investments 4,323,000 5,515,000 6,343,468 828,468
Miscellaneous 940,000 1,000,000 1,505,358 505,358
Total revenues 159,708,635 163,188,000 170,878,241 7,690,241
Expenditures:
Current:
General government 41,821,064 46,936,060 26,233,606 (20,702,454)
Less: interdepartmental charges (4,697,257) (4,347,000) (4,581,303) (234,303)
Public safety 66,088,047 80,877,142 79,675,188 (1,201,954)
Community services 49,917,481 50,570,461 45,038,586 (5,531,875)
Public works 23,350,786 23,350,786 19,235,168 (4,115,618)
Total expenditures 176,480,121 197,387,449 165,601,245 (31,786,204)
Excess (deficiency) of revenues over (under)
expenditures (16,771,486) (34,199,449) 5,276,996 39,476,445
Other financing sources (uses):
Transfers in 10,000 10,000 270,000 260,000
Transfers out (13,203,101) (13,175,274) (13,175,274) -
Total other financing sources (uses)(13,193,101) (13,165,274) (12,905,274) 260,000
Net change in fund balances (29,964,587) (47,364,723) (7,628,278) 39,736,445 $
Fund balance at beginning of year 179,053,454 179,053,454 179,053,454
Fund balance at end of year 149,088,867 $ 131,688,731 $ 171,425,176 $
The notes to the financial statements are an integral part of this statement.
Budgeted Amounts
For the Year Ended June 30, 2019
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -
69
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund (continued)For the Year Ended June 30, 2019
Actual Amounts
(Budgetary Basis)
Revenues
Actual amounts (budgetary basis) “available for appropriation” from
the budgetary comparison schedule (previous page).170,878,241 $
The recording of unrealized gains and losses on the city's investments
are shown for financial reporting purposes (pursuant to GASB 31),
but are not shown for budgetary purposes.3,299,581
174,177,822 $
Expenditures
Actual amounts (budgetary basis) “total charges to appropriations”
from the budgetary comparison schedule (previous page).165,601,245 $
Differences - budget to GAAP:
Encumbrances are shown in the year encumbered for budgetary purposes,
but in the year paid for financial reporting purposes.(10,951,573)
154,649,672 $
The notes to the financial statements are an integral part of this statement.
BUDGET-TO-GAAP RECONCILIATION
70
This
p
a
g
e is intentionally left blank.
71
Statement of Net PositionProprietary FundsJune 30, 2019
Carlsbad
Municipal Golf
ASSETS Water District Course Wastewater
Current assets:
Cash and investments 139,285,492 $ 2,539,295 $ 49,553,965 $
Receivables:
Interest 701,836 6,534 248,845
Taxes 41,356 - -
Other - 274,904 -
Accounts, net of allowances 7,084,637 2,423 2,140,267
Due from other governments 81,940 - 3,253,229
Inventories 606,056 197,377 14,161
Prepaid items 12,163 37,419 -
Total current assets 147,813,480 3,057,952 55,210,467
Capital assets:
Land 1,905,206 4,841,667 2,629,102
Construction in progress 12,000,927 - 34,141,899
Buildings and other structures 20,781,715 20,170,451 -
Improvements other than buildings 2,322,549 42,820,657 7,134,824
Machinery and equipment 10,838,808 1,762,491 331,956
Infrastructure 233,490,265 - 116,891,043
Wastewater treatment facility - - 58,126,463
Intangible assets - - -
Less accumulated depreciation (84,349,131) (36,727,419) (85,658,700)
Total capital assets (net of accumulated
depreciation)196,990,339 32,867,847 133,596,587
Total noncurrent assets 196,990,339 32,867,847 133,596,587
Total assets 344,803,819 35,925,799 188,807,054
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - OPEB related items 312,768 - 19,886
Deferred outflows of resources - pension related items 2,147,837 - 899,924
Total deferred outflows of resources 2,460,605 - 919,810
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
72
Governmental
Enterprise Funds Activities -
Non-Major Internal
Solid Service
Waste Totals Funds
14,403,554 $ 205,782,306 $ 49,102,860 $
72,535 1,029,750 242,439
- 41,356 -
556,179 831,083 -
837,904 10,065,231 6,602
- 3,335,169 -
- 817,594 458,057
- 49,582 184,106
15,870,172 221,952,071 49,994,064
- 9,375,975 -
- 46,142,826 101,076
- 40,952,166 -
- 52,278,030 -
- 12,933,255 30,267,594
- 350,381,308 -
- 58,126,463 -
- - 1,689,637
- (206,735,250) (19,023,143)
- 363,454,773 13,035,164
- 363,454,773 13,035,164
15,870,172 585,406,844 63,029,228
13,636 346,290 33,805
405,863 3,453,624 1,603,641
419,499 3,799,914 1,637,446
(continued)
73
Statement of Net PositionProprietary Funds (continued)June 30, 2019
Carlsbad
Municipal Golf
LIABILITIES Water District Course Wastewater
Current liabilities:
Accrued liabilities 2,267,623 650,280 797,668
Accrued interest payable 58,553 - -
Due to other governments 7,068,734 - 6,015,587
Estimated claims payable - - -
Current portion of long-term debt 1,582,886 - -
Total current liabilities 10,977,796 650,280 6,813,255
Noncurrent liabilities:
Deposits payable 117,279 449,967 4,872,008
Advance from other funds - 55,504,126 -
Unearned revenue - - 10,000
Net OPEB liability 639,526 - 47,387
Net pension liability 5,872,114 - 2,638,181
Capital lease payable - - -
Loans payable 15,243,719 - -
Total noncurrent liabilities 21,872,638 55,954,093 7,567,576
Total liabilities 32,850,434 56,604,373 14,380,831
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - OPEB related items 113,471 - 7,654
Deferred inflows of resources - pension related items 330,630 - 209,814
Total deferred inflows of resources 444,101 - 217,468
NET POSITION
Net investment in capital assets 180,163,734 32,867,847 133,596,587
Restricted for:
Capital assets 33,863,308 - 4,676,313
Unrestricted 99,942,847 (53,546,421) 36,855,665
Total net position (deficit)313,969,889 $ (20,678,574) $ 175,128,565 $
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.
Net position of business-type activities
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
74
Governmental
Enterprise Funds Activities -
Non-Major Internal
Solid Service
Waste Totals Funds
1,133,361 4,848,932 5,770,209
- 58,553 -
- 13,084,321 -
- - 13,115,781
- 1,582,886 211,114
1,133,361 19,574,692 19,097,104
- 5,439,254 1,000
- 55,504,126 -
84,236 94,236 -
32,494 719,407 80,559
1,610,431 10,120,726 6,450,028
- - 147,952
- 15,243,719 -
1,727,161 87,121,468 6,679,539
2,860,522 106,696,160 25,776,643
5,248 126,373 13,011
96,561 637,005 584,570
101,809 763,378 597,581
- 346,628,168 12,676,098
- 38,539,621 -
13,327,340 96,579,431 25,616,352
13,327,340 $ 481,747,220 38,292,450 $
929,773
482,676,993 $
75
Statement of Revenues, Expenses and Changes in Net PositionProprietary FundsFor the Year Ended June 30, 2019
Carlsbad
Municipal Golf
Water District Course Wastewater
Operating revenues:
Water sales 45,716,221 $ -$ -$
Wastewater service charges - - 14,098,783
Golf course operations - 7,978,896 -
Other charges for services 714,643 - -
Miscellaneous 1,055,502 - 73,299
Total operating revenues 47,486,366 7,978,896 14,172,082
Operating expenses:
Encina plant operations 2,016,462 - 6,986,919
Purchased water 24,128,850 - -
Golf course operations - 7,507,062 -
Depreciation 5,502,191 3,527,563 5,303,919
Fuel and supplies - - -
Claims and premiums expense - - -
Small equipment purchases - - -
General and administrative 19,703,001 - 3,027,481
Total operating expenses 51,350,504 11,034,625 15,318,319
Operating income (loss)(3,864,138) (3,055,729) (1,146,237)
Nonoperating revenues (expenses):
Income from property and investments 5,377,760 117,407 1,739,031
Miscellaneous - 112,475 -
Interest expense and fees (323,352) (61) -
Gain (loss) on sale of property - - -
Property taxes 4,002,341 - -
Total nonoperating revenues (expenses)9,056,749 229,821 1,739,031
Income (loss) before transfers and capital
contributions 5,192,611 (2,825,908) 592,794
Transfers in - - -
Capital contributions:
Capital restricted fees and grants 3,396,615 - 611,757
Developer constructed assets 581,013 - 274,608
Other - - -
Change in net position 9,170,239 (2,825,908) 1,479,159
Total net position (deficit) at beginning of year, as restated 304,799,650 (17,852,666) 173,649,406
Total net position (deficit) at end of year 313,969,889 $ (20,678,574) $ 175,128,565 $
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.
Changes in net position of business-type activities
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
76
Governmental
Activities -
Non-Major Internal
Solid Waste Totals Service Funds
-$ 45,716,221 $ -$
- 14,098,783 -
- 7,978,896 -
3,440,551 4,155,194 21,864,820
131,444 1,260,245 422,084
3,571,995 73,209,339 22,286,904
- 9,003,381 -
- 24,128,850 -
- 7,507,062 -
- 14,333,673 2,512,781
- - 1,403,148
- - 7,412,274
- - 1,786,335
3,828,187 26,558,669 11,816,224
3,828,187 81,531,635 24,930,762
(256,192) (8,322,296) (2,643,858)
550,001 7,784,199 1,585,203
- 112,475 -
- (323,413) (28,158)
- - 25,601
- 4,002,341 -
550,001 11,575,602 1,582,646
293,809 3,253,306 (1,061,212)
219,274 219,274 1,500,000
- 4,008,372 -
- 855,621 -
- - 451,769
513,083 8,336,573 890,557
12,814,257 37,401,893
13,327,340 $ 38,292,450 $
103,976
8,440,549 $
Enterprise Funds
77
Statement of Cash FlowsProprietary FundsFor the Year Ended June 30, 2019
Carlsbad
Municipal Golf
Water District Course Wastewater
Cash flows from operating activities:
Receipts from customers and users 47,646,208 $ 8,151,568 $ 14,066,685 $
Payments to suppliers (37,155,840) (7,722,350) (3,390,440)
Payments to employees (5,374,439) - (2,322,432)
Internal activity - payments to other funds (2,973,636) - (1,244,941)
Claims and premiums paid - - -
Other receipts 75,657 - 766,304
Net cash provided (used) by operating activities 2,217,950 429,218 7,875,176
Cash flows from noncapital financing activities:
Operating subsidies and transfers from other funds - - -
Advances to other funds - (22,782) -
Net cash provided (used) by capital and
related financing activities - (22,782) -
Cash flows from capital and related financing activities:
Proceeds from capital debt 3,428,908 - -
Capital restricted fees 1,251,894 - 611,757
Purchase of capital assets (4,465,491) (287,266) (7,645,070)
Gross proceeds from the sale of capital assets - - -
Principal paid on capital debt (1,546,234) - -
Interest and other fees paid (330,090) (61) -
Proceeds from state and local grants 2,144,721 - -
Property taxes received 3,994,524 - -
Net cash (used in) capital and related financing
activities 4,478,232 (287,327) (7,033,313)
Cash flows from investing activities:
Interest on investments 5,235,663 115,668 1,696,700
Net increase (decrease) in cash and cash equivalents 11,931,845 234,777 2,538,563
Cash and cash equivalents at beginning of year 127,353,647 2,304,518 47,015,402
Cash and cash equivalents at end of year 139,285,492 $ 2,539,295 $ 49,553,965 $
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
78
Governmental
Activities -
Non-Major Internal
Solid Waste Totals Service Funds
3,491,968 $ 73,356,429 $ 21,882,278 $
(1,602,207) (49,870,837) (9,380,709)
(1,526,212) (9,223,083) (5,628,284)
(656,865) (4,875,442) (234,302)
- - (4,894,656)
131,444 973,405 -
(161,872) 10,360,472 1,744,327
219,274 219,274 1,500,000
- (22,782) -
219,274 196,492 1,500,000
- 3,428,908 -
- 1,863,651 -
- (12,397,827) (1,892,913)
- - 25,601
- (1,546,234) (198,810)
- (330,151) (28,158)
- 2,144,721 -
- 3,994,524 -
- (2,842,408) (2,094,280)
538,216 7,586,247 1,550,039
595,618 15,300,803 2,700,086
13,807,936 190,481,503 46,402,774
14,403,554 $ 205,782,306 $ 49,102,860 $
(continued)
Enterprise Funds
79
Statement of Cash FlowsProprietary Funds (continued)For the Year Ended June 30, 2019
Carlsbad
Municipal Golf
Water District Course Wastewater
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)(3,864,138) $ (3,055,729) $ (1,146,237) $
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization 5,502,191 3,527,563 5,303,919
Other non-operating revenues and expenses - 112,475 -
Change in assets and liabilities:
(Increase) decrease in receivables 1,215,344 60,197 (32,097)
(Increase) decrease in due from other governments 269,120 - 1,056,979
(Increase) decrease in deposits - 2,012 (799,920)
(Increase) decrease in inventories 3,835 (10,684) (2,215)
(Increase) decrease in prepaid items 11,718 (12,969) -
(Increase) decrease in deferred outflows - OPEB related items 14,115 - (3,930)
(Increase) decrease in deferred outflows - pension related items 1,151,292 - 476,577
(Decrease) increase in accrued liabilities 285,066 115,580 59,861
(Decrease) increase in due to other governments 329,150 - 3,275,893
(Decrease) increase in estimated claims payable - - -
(Decrease) increase in deposits payable (29,860) (309,227) 693,005
(Decrease) increase in unearned revenue - - -
(Decrease) increase in net OPEB liability (260,951) - (155)
(Decrease) increase in net pension liability (2,455,523) - (1,036,974)
(Decrease) increase in deferred inflows - OPEB related items 5,718 - 358
(Decrease) increase in deferred inflows - pension related items 40,873 - 30,113
Net cash provided by operating activities 2,217,950 $ 429,218 $ 7,875,177 $
Noncash capital financing activities:
Capital assets contributed by other sources 581,013 $ -$ 274,608 $
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
80
Governmental
Activities -
Non-Major Internal
Solid Waste Totals Service Funds
(256,192) $ (8,322,296) $ (2,643,858) $
- 14,333,673 2,512,781
- 112,475 (30,148)
(1,264) 1,242,180 4,922
- 1,326,099 -
- (797,908) -
- (9,064) (61,635)
- (1,251) (184,106)
(2,695) 7,490 (6,680)
205,954 1,833,823 730,581
169,906 630,413 548,911
- 3,605,043 -
- - 2,250,350
- 353,918 -
52,681 52,681 -
(107) (261,213) (264)
(364,583) (3,857,080) (1,460,210)
245 6,321 607
34,183 105,169 83,076
(161,872) $ 10,360,473 $ 1,744,327 $
-$ 855,621 $ 451,769 $
Enterprise Funds
81
Statement of Net PositionFiduciary FundsJune 30, 2019
Agency Private Purpose
ASSETS Funds Trust Funds
Current assets:
Cash and investments 20,968,099 $ 1,289,292 $
Receivables:
Interest 135,405 18,837
Taxes 4,464 -
Other 22,406 -
Total current assets 21,130,374 1,308,129
Noncurrent assets:
Loans receivable - 3,750,000
Restricted assets:
Cash and investments 4,460,404 -
Total noncurrent assets 4,460,404 3,750,000
Total assets 25,590,778 $ 5,058,129 $
LIABILITIES
Current liabilities:
Accrued liabilities 1,365,302 $ 2,598 $
Accrued interest payable - 79,718
Deposits held for others 24,225,476 -
Current portion of long-term debt - 815,000
Total current liabilities 25,590,778 897,316
Noncurrent liabilities:
Due to the City of Carlsbad - 7,255,238
Tax allocation bonds payable - 3,705,000
Total noncurrent liabilities - 10,960,238
Total liabilities 25,590,778 11,857,554
NET POSITION
Held in trust for redevelopment obligation retirement purposes -$ (6,799,425) $
The notes to the financial statements are an integral part of this statement.
82
Statement of Changes in Net PositionFiduciary FundsFor the Fiscal Year Ended June 30, 2019
Private Pupose
ADDITIONS Trust Funds
Contributions:
Tax increment 3,637,680 $
Income from property and investments 87,708
Total additions 3,725,388
DEDUCTIONS
General and administrative 132,937
Community development 492,876
Interest expense and fees 368,753
Total deductions 994,566
Change in net position 2,730,822
Total net position (deficit) at beginning of year (9,530,247)
Total net position (deficit) at end of year (6,799,425) $
The notes to the financial statements are an integral part of this statement.
83
Notes to the Financial Statements
84
Note 1. Summary of Significant Accounting Policies
The City of Carlsbad, California (“city”), was incorporated on July 16, 1952. The city was a general law city until 2008,
when the citizens in Carlsbad voted and approved the city to become a charter city. The city operates under a
Council-Manager form of government and provides the following services: general government, public safety,
community services and public works.
The accounting policies of the city and its component units conform to accounting principles generally accepted in
the United States of America as applicable to governmental units. The following is a summary of the more significant
policies:
Description and scope of the reporting entity
As required by accounting principles generally accepted in the United States of America, these financial statements
present the financial position of the city and its component units, entities for which the city is considered to be
financially accountable. The city is considered to be financially accountable for an organization if the city appoints a
voting majority of that organization’s governing body and the city is able to impose its will on that organization or
there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens
on the city. The city is also considered to be financially accountable for an organization if that organization is fiscally
dependent upon the city (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt
without approval from the city). In certain cases, other organizations are included as component units if the nature
and significance of their relationship with the city are such that their exclusion would cause the city’s financial
statements to be misleading or incomplete.
Based upon the above criteria, the component units of the city are the Housing Authority of the City of Carlsbad, the
City of Carlsbad Public Improvement Corporation, the Carlsbad Public Financing Authority and the Carlsbad
Municipal Water District (CMWD). The city does not issue separate financial statements for these component units.
Since the City Council serves as the governing board for these component units and there is either a financial
benefit/burden relationship between the component unit and city or the management of the city has the operational
responsibility for the component unit, all of the city’s component units are considered to be blended component
units. Blended component units, although legally separate entities, are in substance part of the city’s operations,
and so data from these units is reported with the interfund data of the primary government.
Government-wide and Fund Financial Statements
The Government-wide Financial Statements (i.e., the Statement of Net Position and the Statement of Activities)
report information on all of the nonfiduciary activities of the city and its blended component units. For the most
part, the effect of interfund activity has been removed from these statements. Governmental activities, which
normally are supported by taxes and intergovernmental revenues, are reported separately from business-type
activities, which rely to a significant extent on user fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment
are offset by program revenues. Direct expenses are those that are clearly identifiable to a specific function or
segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit
from goods, services, or privileges provided by a given function or segment; and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other
items not properly classified as program revenues are reported as general revenues.
Notes to the Financial Statements
85
Note 1. Summary of Significant Accounting Policies (continued)
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even
though the latter are excluded from the Government-wide Financial Statements. Major individual governmental
funds and major individual enterprise funds are reported in separate columns in the Fund Financial Statements.
Measurement focus, basis of accounting, and financial statement presentation
The Government-wide Financial Statements are reported using the economic resources measurement focus and the
accrual basis of accounting, as are the Proprietary Fund and Private Purpose Trust Fund Financial Statements.
Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing
of related cash flows. In applying the susceptible to accrual concept to intergovernmental revenues, the legal and
contractual requirements of the individual programs are used as guidance. Property taxes are recognized as
revenues in the year for which they are levied.
Governmental Fund Financial Statements are reported using the current financial resources measurement focus and
the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and
available. Revenues are considered available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be
available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting, as long as the expenditure reflects a near-term
cash outflow. Principal and interest on long-term debt are recorded as fund liabilities when due.
Revenues that are accrued generally include real property taxes, sales tax, transient occupancy taxes (TOT), franchise
taxes, highway users tax, interest, and some state and federal grants.
Real property taxes are levied on October 15 against property owners of record on January 1 of that year. The taxes
are due in two installments, on November 1 and February 1, and become delinquent after December 10 and April 10,
respectively. Tax liens attach annually as of 12:01 a.m. on the first day of January in the fiscal year for which the
taxes are levied. Under the provisions of NCGA (National Council on Government Accounting) Interpretation 3,
property tax revenue is recognized in the fiscal year for which the taxes have been levied, provided it is collected
within 60 days of the end of the fiscal year.
Agency funds, which are a type of fiduciary funds, are custodial in nature (assets equal liabilities) and do not involve
the recording of city revenues and expenses. Since revenues and expenses are not recognized, agency funds have
no measurement focus, however, assets and liabilities are accounted for on the accrual basis of accounting.
The city reports the following major governmental funds:
• The General Fund is the city’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
• The Community Facilities District (CFD) No. 1 capital project fund is used to account for the receipt of taxes
and fees charged to developers that are restricted for civic facilities, parks, and road segments.
• The General Capital Construction (GCC) capital project fund is used to account for transfers from the
General Fund and expenditures for various capital projects not financed through another capital project
fund.
• The Infrastructure Replacement (IRF) capital project fund is used to account for transfers from the General
Fund and expenditures for the replacement of major infrastructure throughout the city.
Notes to the Financial Statements
86
Note 1. Summary of Significant Accounting Policies (continued)
• The Park Development Fund capital project funds are used to account for receipts of fees charged to
developers for park acquisition and development.
• The Public Facilities Construction (PFF) capital project fund is used to account for the receipt of fees
charged to developers, and expenditures that are restricted for specific public facilities such as parks and
fire stations necessitated by growth.
The city reports the following major enterprise funds:
• The Carlsbad Municipal Water District (CMWD) enterprise funds are used to account for the operation,
maintenance, and capital facility financing of the city’s potable and recycled water systems.
• The Golf Course enterprise fund is used to account for revenues and expenses for the construction,
maintenance and operating activities of the city’s municipal golf course.
• The Wastewater enterprise funds are used to account for the operation, maintenance, and capital facility
financing of the city’s wastewater system.
• The Solid Waste enterprise funds are used to account for the revenues and expenses of the city’s solid
waste source-reduction, recycling and storm water programs.
Additionally, the city reports the following fund types:
• Internal Service funds account for fleet maintenance and replacement, self-insured benefits, information
technology, risk management and workers’ compensation services provided to other departments or
agencies of the city.
• The Agency funds account for assets held by the city for other governments or individuals. These funds
include contractors’ deposits for future development, miscellaneous deposits, as well as debt service
transactions on assessment district bonds for which the city is not obligated.
• The Trust funds account for the activities of the Redevelopment Obligation Retirement Funds, which
accummulates resources for obligations previously incured by the former City of Carlsbad Redevelopment
Agency (RDA).
As a general rule, the effect of interfund activity has been eliminated from the Government-wide Financial
Statements. An exception to this general rule are the charges between CMWD and various other functions of the
city. Elimination of these charges would distort the direct costs and program revenues reported for the various
functions concerned.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund’s principal ongoing operations. The principal operating revenues of the city’s proprietary funds are
charges to customers for sales and services. The city also recognizes new account charges, late fees and
contributions from other agencies as operating revenues. Operating expenses for enterprise and internal service
funds include the cost of sales and services, general and administrative expenses, and depreciation on capital assets.
All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the city’s policy to use restricted resources
first, then unrestricted resources as they are needed. When expenditures are incurred for purposes for which both
restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, restricted revenue will
be applied first. When expenditures are incurred for purposes for which committed, assigned, or unassigned fund balances are available, the policy is to apply committed fund balance first, then assigned fund balance and finally
unassigned fund balance.
Notes to the Financial Statements
87
Note 1. Summary of Significant Accounting Policies (continued)
Cash and investments
Cash includes amounts in demand and time deposits. Investments are reported in the accompanying balance sheet
at fair value, except for certain investment contracts that are reported at cost because they are not transferable and
they have terms that are not affected by changes in market interest rates.
Changes in fair value that occur during a fiscal year are recognized as income from property and investments
reported for that fiscal year. Income from property and investments includes interest earnings; changes in fair value;
any gains or losses realized upon the liquidation, maturity, or sale of investments; property rentals and the sale of
city owned property.
The city pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this
pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by
the pooled investments is allocated to the various funds on a monthly basis, based on each fund’s average cash and
investments balance.
Restricted cash and investments represent amounts that are restricted under the terms of debt agreements.
Inventories
Inventories consist of materials and supplies that are valued at cost and are recorded as expenses or expenditures
on a first-in, first-out basis when consumed.
Compensated absences
Compensated absences are comprised of vacation payable for all city employees, banked overtime (comp time) and
vested sick benefits for certain former district employees. Vacation pay and comp time are payable to employees
at the time used or upon termination of employment. For governmental funds, the cost of accumulated vacation
and comp time expected to be paid in the next 12 months is recorded as a liability in the Self-Insured Benefits internal
service fund. Since the city caps the amount of vacation and comp time employees are allowed to have on the books
at any point in time, for compensated absences recorded at June 30, 2019, all balances are expected to be paid
within the following 12 months. For proprietary funds, the cost of vacation and comp time is recorded as a liability
when earned.
Risk management
The city accounts for its general liability and workers’ compensation activities in internal service funds. The funds
are responsible for collecting premiums from other city funds and departments and paying claims, settlements and
insurance premiums. Interfund premiums are based on the insured fund’s claims experience. Incurred but not
reported claims are accrued at year-end, if material.
Unbilled services
Unbilled water, wastewater and solid waste revenues of the enterprise funds are recognized as earned when the
services are used.
Notes to the Financial Statements
88
Note 1. Summary of Significant Accounting Policies (continued)
Capital assets
Capital assets, which include land (including right-of-way), buildings, equipment and infrastructure assets (e.g.,
roads, bridges, traffic signals, water and wastewater systems, and similar items), are reported in the applicable
governmental or business-type activities columns in the Government-wide Financial Statements. Capital assets are
defined by the city as machinery and equipment and capital construction with an initial, individual cost of more than
$10,000 and an estimated useful life in excess of one year; and intangible assets such as computer software with an
initial cost of more than $100,000, and an estimated useful life in excess of one year. Such assets are recorded at
historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at
acquisition value at the date of donation.
The cost of normal maintenance and repairs that do not add to the value of an asset or materially extend an asset’s
useful life are not capitalized. Construction in progress costs are transferred to their respective capital asset category
upon completion.
Depreciation is charged to operations using the straight-line method based on the estimated useful life of an asset.
The estimated useful lives of depreciable assets are as follows:
Years
Buildings and other structures 10 – 50
Improvements other than buildings 10 – 50
Machinery and equipment 3 – 20
Infrastructure 10 – 100
Wastewater treatment facility (including equipment)
Intangible assets
5 – 75
5 – 10
The city has capitalized all general infrastructure assets acquired or constructed. In addition the land upon which
the streets and roads are constructed (right-of-way) has also been valued and capitalized.
Unearned revenue
The unearned revenue reported in the city’s financial statements represents money received during the current or
previous fiscal years that has not been earned by the city as of the end of the fiscal year. These monies will be
recognized as revenues in subsequent fiscal years, once the revenue has been earned. Deferred outflows
In addition to assets, the statement of financial position reports a separate section for deferred outflows of
resources. This separate financial statement element, deferred outflows of resources, represents a consumption of
net position that applies to a future period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The city has pension-related and other postemployment benefits related items
in this category.
Deferred inflows
In addition to liabilities, the statement of financial position reports a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of
net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until
that time. The city has two types of items that qualify for reporting in this category.
Notes to the Financial Statements
89
Note 1. Summary of Significant Accounting Policies (continued)
The first item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental
funds report unavailable revenues from two sources: interest on advances and grants. This amount is deferred and
recognized as an inflow of resources in the period that the amount becomes available.
The second item, deferred inflows of resources, is reported in the proprietary funds balance sheet and the Statement
of Net Position. The city has pension related and other postemployment benefits related items in this category.
Interfund transactions
Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal
year is referred to as either “due to/from other funds” (short-term interfund loans), “advances to/from other funds”
(long-term interfund loans) or “due from Successor Agency” (long-term trust fund loan). Any residual balances
outstanding between the governmental activities and business-type activities are reported in the Government-wide
Financial Statements as “internal balances.”
The portion of fund balance associated with amounts that have been disbursed to other funds in the form of long-
term interfund advances have been classified as nonspendable unless the funds associated with repayment of the
advance are otherwise restricted for a specific purpose.
Receivables and payables
All trade, service and tax receivables are shown net of an allowance for uncollectibles. The utility billing receivable
allowance is equal to two percent of outstanding billings at June 30, 2019, the ambulance billing receivable allowance
is equal to 40 percent of outstanding billings at June 30, 2019, and the trade and false alarm receivable allowance is
equal to the total of all outstanding receivables that are over 90 days past due plus 30 percent of all remaining
balances. The only exceptions to these rules are receivables that were subsequently paid or were known to be
collectible at year-end, which were not reserved for at June 30, 2019, and any receivables due from other public
agencies.
Loan and reimbursement receivable
The accompanying financial statements reflect the recording of certain loans receivable that represent loans made
to various organizations and individuals. In certain cases, the amount of collection is dependent upon future residual
receipts to be generated by the property or contingent upon the ability of the owner to sell the property at an
amount sufficient to pay all liens against the property, including the obligation to the city. All loan and
reimbursement receivables are shown net of an allowance for uncollectibles.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of
monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension
of formal budgetary control in the governmental funds. Unexpended and unencumbered appropriations lapse at
fiscal year-end unless City Council takes action in the form of a resolution to continue the appropriation into the
following fiscal year.
Notes to the Financial Statements
90
Note 1. Summary of Significant Accounting Policies (continued)
Net position
Net position represents the differences between assets and deferred outflows, and liabilities and deferred inflows.
Net investment in capital assets, consist of capital assets, net of accumulated depreciation, reduced by the
outstanding balances of any borrowings, used for the acquisition, construction or improvement of those assets. Net
investment in capital assets excludes unspent debt proceeds. Net position is reported as restricted when there are
limitations imposed on its use either through the enabling legislation adopted by the city or through external
restrictions imposed by creditors, grantors, or laws or regulations of other governments. It is the city’s policy to
consider restricted net position to have been depleted before unrestricted net position is applied.
Cash flows
Statements of cash flows are presented for proprietary fund types. Cash and cash equivalents include all unrestricted
and restricted highly liquid investments with original purchase maturities of three months or less. Pooled cash and
investments in the city’s Treasury represent monies in a cash management pool and such accounts are similar in
nature to demand deposits.
Long-term obligations
In the Government-wide Financial Statements, and proprietary fund types in the Fund Financial Statements, long-
term debt and other long-term obligations are reported as liabilities in the applicable governmental activities,
business-type activities, or proprietary fund type Statement of Net Position.
Pensions
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions,
and pension expense, information about the fiduciary net position of the city’s California Public Employees’
Retirement System (CalPERS) plans (Plans) and additions to/deductions from the fiduciary net position have been
determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including
refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
For this report, the following timeframes are used:
Valuation Date (VD) June 30, 2017
Measurement Date (MD) June 30, 2018
Measurement Period (MP) July 1, 2017 to June 30, 2018
Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources
related to OPEB, and OPEB expense, information about the fiduciary net position of the city’s plan (OPEB Plan), the
assets of which are held by the California Employers’ Retiree Benefit Trust (CERBT), and additions to/deductions
from the OPEB Plan’s fiduciary net position have been determined by an independent actuary. For this purpose,
benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments
are reported at fair value.
Notes to the Financial Statements
91
Note 1. Summary of Significant Accounting Policies (continued)
Generally accepted accounting principles require that the reported results must pertain to liability and fiduciary net
position information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date (VD) June 30, 2017
Measurement Date (MD) June 30, 2018
Measurement Period (MP) July 1, 2017 to June 30, 2018
Fair Value Measurements
Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest
priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as
follows:
Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly, and fair value is determined through the use of models or other valuation methodologies
including:
• Quoted prices for similar assets or liabilities in active markets;
• Quoted prices for identical or similar assets or liabilities in markets that are inactive;
• Inputs other than quoted prices that are observable for the asset or liability; and
• Inputs that are derived principally from or corroborated by observable market data by correlation or other
means.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These
unobservable inputs reflect the city’s own assumptions about the inputs market participants would use in pricing
the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best
information available in the circumstances and may include the city’s own data.
Note 2. Budgetary Data
The city follows these procedures in establishing its budgetary data:
• During May or June, the city manager submits to the City Council a proposed operating and capital budget
for the fiscal year commencing the following July 1. The budget includes estimated revenues and proposed
expenditures on a departmental and/or project basis.
• A public hearing is conducted at a City Council meeting to obtain citizens’ comments during June.
• Prior to July 1, the budget is enacted legally through passage of an appropriation resolution.
The city manager is authorized to make transfers of appropriated amounts from one department to another within
a fund. The legal level of budgetary control is at the fund level. Revisions that alter the total appropriations of any
fund must be approved by the City Council with the exception of budget adjustments that involve offsetting revenues
and expenditures, and increases in General Liability and Workers’ Compensation Fund claims expenses. The city
manager is authorized to increase or decrease an appropriation for a specific purpose where the appropriation is
Notes to the Financial Statements
92
Note 2. Budgetary Data (continued)
offset by unbudgeted revenue, which is designated for said specific purpose. Monthly reports are provided to the
City Council during the year, and any changes to the adopted budget are approved by the City Council as necessary.
During the year, several supplementary appropriations were necessary.
Budgets for governmental type funds are adopted on the modified accrual basis except that encumbrances are
treated as budgeted expenditures in the year purchases are committed. Expenditures may not exceed budgeted
appropriations at the fund level. All appropriations lapse at fiscal year-end unless City Council takes action in the
form of a resolution to continue the appropriation into the following fiscal year or if the appropriation is less than
$100,000, the city manager may approve to continue the appropriation into the following fiscal year.
For purposes of budgetary presentation, actual revenues have been adjusted to exclude unrealized gains and losses
pursuant to GASB. Actual expenditures have been adjusted to include encumbrances outstanding. Annual budgets
are adopted for the General Fund, special revenue funds except for the Tyler Court Apartments Fund, and a portion
of the Parking-in-Lieu Capital Project Fund (Grants and Other Capital Project Funds). Accordingly, the revenues and
expenditures for the Tyler Court Apartments Fund have been excluded from the budget basis financial statements.
Annual operating budgets are not adopted for the capital projects funds except for the Parking-in-Lieu Fund;
therefore, budget basis financial statements have not been prepared because a comparison of such budgetary
amounts to annual revenues and expenditures is not meaningful.
Note 3. Deposit and Investment Risk
Cash resources of the individual funds are combined to form a pool of cash and investments. The city maintains a
formal Investment Policy Statement (IPS), which is reviewed by the Investment Review Committee and adopted
annually by the City Council. All investments held in the Treasurer’s Pool are consistent with the city’s IPS objectives
of safety of principal, adequacy of liquidity, and achievement of an average market rate of return. The risk
disclosures below apply to the city’s internal investment pool. Portfolio investments are exposed to five types of
risk: custodial (investments and cash deposits), concentration, default, event, and market or interest rate risk.
The city and its agencies invest a portion of the funds in an external investment pool known as the Local Agency
Investment Fund (LAIF). Management and oversight are the responsibility of the California State Treasurer. As of
June 30, 2019, the LAIF performance report shows a fair value factor of 1.001711790. The city’s position in the LAIF
pool is calculated as a percentage of the fair value of the city’s shares to the fair value of the pooled shares.
Investments held outside the Treasurer’s Pool consist mainly of required reserve funds for various bond issues. They
are held by trustees, and are not available for the city’s general expenditures.
Notes to the Financial Statements
93
Note 3. Deposit and Investment Risk (continued)
As of June 30, 2019, the city had the following investments in its portfolio:
Fair Market % of Modified
Treasurer's Pool investments Value Total Duration
U.S. agencies:
United States Treasury Bills & Notes 80,311,926 $ 10.1%1.762
Federal Home Loan Mortgage Corporation 111,159,182 14.0%2.272
Federal National Mortgage Association 59,627,582 7.5%1.152
Federal Home Loan Bank 97,406,322 12.2%2.299
Federal Farm Credit Bank 83,848,917 10.5%2.248
Federal Agricultural Corporation 15,402,236 1.9%2.437
Supranational 19,773,613 2.5%2.822
Refunding Corporation 8,162,037 1.0%1.763
Financing Corporation 5,271,804 0.7%0.237
Tennessee Valley Authority 7,299,840 0.9%1.056
RFCO Strip Principal 2,922,810 0.4%1.280
Subtotal U.S. agencies 491,186,269 61.7%2.129
Corporate notes:
Medium-term corporate notes 163,972,281 20.6%2.159
Subtotal corporate notes 163,972,281 20.6%2.159
LAIF 114,066,817 14.3%-
Certificates of deposit 18,814,466 2.4%1.803
Cash accounts 8,085,527 1.0%-
Total Treasurer’s Pool 796,125,360 100.0%1.815
Investments held outside the Treasurer’s Pool
Money market funds 4,625,347
Guaranteed investment contracts 1,292,770
Subtotal debt service funds/bond proceeds 5,918,117
Other deposits 1,723,887
Petty cash funds 10,405
Total cash and investments 803,777,769 $
Statement of Net Position, Primary Government
Cash and investments 777,059,974 $
Statement of Net Position, Fiduciary Funds
Cash and investments 22,257,391
Restricted cash and investments 4,460,404
Total cash and investments 803,777,769 $
Notes to the Financial Statements
94
Note 3. Deposit and Investment Risk (continued)
Fair Value Measurement
The city categorizes its fair value investments within the fair value hierarchy established by generally accepted
accounting principles. The city has the following recurring fair value measurements as of June 30, 2019:
Level 1 Level 2 Level 3 Total
U.S. Treasury Bills & Notes 80,311,926 $ -$ -$ 80,311,926 $
Refunding Corporation - 8,162,037 - 8,162,037
Federal Agency securities - 402,712,306 - 402,712,306
Medium-term corporate notes - 163,972,281 - 163,972,281
Certificates of Deposit - 18,814,466 - 18,814,466
Total Investments Reported at Fair Value 80,311,926 593,661,090 - 673,973,016
Cash accounts - - - 8,085,527
LAIF - - - 114,066,817
Money market funds - - - 4,625,347
Guaranteed investment contracts - - - 1,292,770
Other deposits - - - 1,723,887
Petty cash funds - - - 10,405
Total cash and investments 80,311,926 $ 593,661,090 $ -$ 803,777,769 $
Fair Value Hierarchy
Custodial credit risk (investments)
The city uses a third-party bank for its custody and safekeeping service for its investment securities. Custodial credit
risk is the risk that the city will not be able to recover the value of its investments in the event of the custodian’s
failure. All city investments held in custody and safekeeping are held in the name of the city and are segregated
from securities owned by the bank. This is the lowest level of custodial credit risk exposure. Investments are settled
on Delivery vs. Payment (DVP) in accordance with the third party custodial agreement.
Custodial credit risk (deposits)
The city maintains cash accounts at one major banking institution. At the conclusion of each business day, balances
in these accounts are “swept” into overnight pooled investments, which are pooled into funds collateralized with
U.S. government securities (guaranteed) or U.S. agency securities (government-sponsored). The California Code
authorizes both of these types of investments. Amounts up to $250,000 are Federal Deposit Insurance Corporation
(FDIC) insured. All funds in non-interest-bearing transaction accounts are fully insured under the Dodd-Frank Wall
Street Reform and Consumer Protection Act.
Concentration credit risk
Concentration credit risk is the heightened risk of potential loss when investments are concentrated in one issuer.
The California state code requires that total investments in medium-term corporate notes of all issuers not exceed
30 percent of the portfolio.
Notes to the Financial Statements
95
Note 3. Deposit and Investment Risk (continued)
For concentration of investments, the city’s IPS requires that no more than five percent of investments in corporate
notes be in any one issuer. There is no similar requirement in either the state code or the city’s IPS for U.S. agencies.
As of June 30, 2019, the portfolio was in compliance with this requirement.
Default credit risk
Default credit risk is the risk that the issuer of the security does not pay either the interest or principal when due.
Debts of most U.S. agencies are not backed by the full faith and credit of the federal government. These agencies
are U.S. government-sponsored. In August 2011, Standard and Poor’s Investor’s Service downgraded U.S. long term
debt one step to AA+. Competing agencies, Moody’s Investors Service and Fitch Ratings, maintained their AAA rating
on U.S. debt. Although the default credit risk of these investments has increased, the city believes the risk of default
remains low.
California state code limits investments in medium-term corporate notes to the top three credit ratings (AAA, AA,
and A). However, it is the city’s policy to limit investments to the top two credit ratings (AAA and AA). As of June 30,
2019, approximately 9.09 percent of the investments in medium-term corporate notes did not have one of these
two credit ratings. These investments were made when the credit ratings were AA or higher. California state code
and the city’s IPS allow the city treasurer to determine the course of action to correct exceptions to the IPS. It is the
intent of the city treasurer to hold these investments in the portfolio until maturity unless events indicate they
should be sold. The default credit risk for corporate notes with a credit rating of single A is considered by the city
treasurer to be within acceptable limits for purposes of holding to maturity. A credit rating of single A is within state
code purchase requirements.
The LAIF is an external investment pool managed by the California State Treasurer. Its investments are short-term
and follow the investment requirements of the State. LAIF is not rated; however, the city treasurer considers the
default credit risk of LAIF to be minimal.
Money market funds held by bond trustees are rated AAA. Investment contracts held by bond trustees are not rated
by rating agencies.
The table below is the minimum rating (where applicable) of the California state code, the city’s investment policy, or debt agreements, and the actual rating at June 30, 2019 for each investment type by Standard & Poor’s Investor’s
Service:
Minimum Exempt Rating as of Year End
Legal from Not
Investment Type Total Rating Disclosure AAA AA A Rated
Treasury securities 80,311,926$ N/A 80,311,926$ -$ -$ -$ -$
Federal agency securities 410,874,343 N/A - - 410,874,343 - -
Medium term notes 163,972,281 AA - 23,284,222 121,780,920 18,907,139 -
Local Agency Investment Fund (LAIF)114,066,817 N/A - - - - 114,066,817
Certificates of deposit 18,814,466 N/A - - - - 18,814,466
Cash accounts 8,085,527 N/A - - - - 8,085,527
Other deposits 1,723,887 N/A - - - - 1,723,887
Petty cash funds 10,405 N/A - - - - 10,405
Investments with fiscal agent
Money market funds 4,625,347 AA-m - 4,625,347 - - -
Guaranteed investment contracts 1,292,770 N/A - - - - 1,292,770
803,777,769$ 80,311,926$ 27,909,569$ 532,655,263$ 18,907,139$ 143,993,872$
Notes to the Financial Statements
96
Note 3. Deposit and Investment Risk (continued)
Interest rate risk
Interest rate risk is the risk that investments will lose market value because of increases in market interest rates. A
rise in market interest rates will cause the market value of investments made earlier at lower interest rates to lose
value. The reverse will cause a gain in market value. As of June 30, 2019, the portfolio had a 0.40 percent gain in
market value based on cost.
The city’s IPS has adopted two means of limiting its exposure to market value losses caused by rising market interest
rates: (1) limiting total portfolio investments to a maximum modified duration of 2.2; and (2) requiring liquid
investments (LAIF and bank accounts) and investments maturing within one year to be equal to an amount that is
not less than two-thirds of the current fiscal year’s operating budget. The city met those requirements as follows:
1. As of June 30, 2019, the modified duration of the portfolio was 1.815. Modified duration is a prospective
measure of the sensitivity of a fixed-income security’s value to changes in market rates of interest. Modified
duration identifies the potential gain/loss in value before it actually occurs. For example, a modified
duration of 1.5 indicates that when and if a one percent change in market interest rates occurs, a 1.5
percent change in the security’s value will result. Investments with modified durations of one to three are
considered to be relatively conservative.
2. As of June 30, 2019, maturities within one year exceeded the required minimum of $184,078,000 (two-
thirds of current year operating budget for the city per the Fiscal Year 2018-19 Operating Budget adopted
by the City Council).
3. As of June 30, 2019, the weighted average maturity of the LAIF underlying debt securities was 173 days. As
of June 30, 2019, LAIF had a 0.1709 percent gain in market value.
4. As of June 30, 2019, the city’s investment portfolio included $20,205,000 of callable step-up notes at par.
Note 4. Due To and From Other Funds
The following table shows amounts due from funds within the city to other funds within the city at June 30, 2019.
Due to Due from
Other Funds Other Funds
General Fund -$ 270,083 $
Other Governmental Funds:
Community Development Block Grant 270,083 -
Totals 270,083 $ 270,083 $
Notes to the Financial Statements
97
Note 5. Advances To and From Other Funds
The following table shows amounts advanced from governmental funds within the city to other funds within the city
at June 30, 2019:
Advances To Amount
General Fund Other Governmental Funds:
Habitat Mitigation 169,600$ (1)
General Fund Enterprise Funds:
Golf Course 55,504,126 (2)
Other Governmental Funds:Other Governmental Funds:
CFD No. 1 Traffic Impact Projects 1,943,710 (3)
Public Facilities Construction Park Development 5,650,000 (4)
63,267,436$
General Fund Fiduciary Funds:
Redevelopment Obligation
Retirement Trust Funds 7,255,238$ (5)
Advances From
Advances to and from other funds are primarily long term advances used to fund capital projects in advance of related revenues.
(1) The advance between the General Fund and the Habitat & Agricultural Management Fund is estimated to be
repaid from future Habitat Mitigation Fees. Interest on the advance will compound annually at the average
interest rate earned by the Treasurer’s Pool during the fiscal year.
(2) The advance between the General Fund and the Golf Course Enterprise Fund is estimated to be repaid through
residual operating income from golf course operations.
(3) The advance between the CFD No. 1 Fund and the Traffic Impact Projects Fund is estimated to be repaid over a
10-15 year period as Traffic Impact Fees are collected.
(4) The advance between the PFF Fund and the Park Development Funds is estimated to be repaid at build-out.
(5) The obligation of the Redevelopment Obligation Retirement Trust Funds represents the obligations of the
custodian of the assets and liabilities of the former redevelopment agency (the Successor Agency) and is
presented in the accompanying financial statements as Due from Successor Agency. Interest on the obligation
will compound annually at three percent per Health and Safety Code Section 34191.4 which was amended by
Senate Bill No. 107. Senate Bill No. 107 went into effect in September 2015.
Notes to the Financial Statements
98
Note 6. Capital Assets
Capital asset activity was as follows for the year ended June 30, 2019:
Balance at Balance at
June 30, 2018 Increases Decreases June 30, 2019
Governmental activities:
Capital assets, not being depreciated:
Land (including right-of-way)153,172,352$ 508,183$ -$ 153,680,535$
Construction in progress 10,042,054 8,213,289 (1,502,691) 16,752,652
Total capital assets,
not being depreciated 163,214,406 8,721,472 (1,502,691) 170,433,187
Capital assets, being depreciated:
Buildings 135,956,852 484,431 - 136,441,283
Improvements, other than buildings 81,453,044 2,880,899 - 84,333,943
Machinery and equipment 43,364,968 3,877,905 (1,204,131) 46,038,742
Infrastructure 721,892,857 4,288,155 - 726,181,012
Intangible assets 5,017,448 - - 5,017,448
Total capital assets,
being depreciated 987,685,169 11,531,390 (1,204,131) 998,012,428
Less accumulated depreciation for:
Buildings (40,084,330) (2,906,625) - (42,990,955)
Improvements, other than buildings (30,896,443) (3,282,576) - (34,179,019)
Machinery and equipment (26,617,510) (3,120,920) 1,179,131 (28,559,299)
Infrastructure (256,625,450) (15,160,298) - (271,785,748)
Intangible assets (2,998,616) (588,874) - (3,587,490)
Total accumulated
depreciation (357,222,349) (25,059,293) 1,179,131 (381,102,511)
Total capital assets
being depreciated, net 630,462,820 (13,527,903) (25,000) 616,909,917
Governmental activities
capital assets, net 793,677,226$ (4,806,431)$ (1,527,691)$ 787,343,104$
Notes to the Financial Statements
99
Note 6. Capital Assets (continued)
Balance at Balance at
June 30, 2018 Increases Decreases June 30, 2019
Business-type activities:
Capital assets, not being depreciated:
Land (including right-of-way)9,375,975$ -$ -$ 9,375,975$
Construction in progress 41,621,369 4,521,457 - 46,142,826
Total capital assets,
not being depreciated 50,997,344 4,521,457 - 55,518,801
Capital assets, being depreciated:
Buildings 40,933,226 18,940 - 40,952,166
Improvements, other than buildings 52,278,030 - - 52,278,030
Machinery and equipment 12,648,604 284,651 - 12,933,255
Infrastructure 342,229,972 8,151,336 - 350,381,308
Wastewater treatment facility 57,806,075 320,388 - 58,126,463
Total capital assets,
being depreciated 505,895,907 8,775,315 - 514,671,222
Less accumulated depreciation for:
Buildings (10,433,757) (893,718) - (11,327,475)
Improvements, other than buildings (34,509,916) (3,248,707) - (37,758,623)
Machinery and equipment (1,835,648) (625,554) - (2,461,202)
Infrastructure (108,974,787) (6,810,748) - (115,785,535)
Wastewater treatment facility (36,647,469) (2,754,946) - (39,402,415)
Total accumulated
depreciation (192,401,577) (14,333,673) - (206,735,250)
Total capital assets
being depreciated, net 313,494,330 (5,558,358) - 307,935,972
Business-type activities
capital assets, net 364,491,674$ (1,036,901)$ -$ 363,454,773$
Notes to the Financial Statements
100
Note 6. Capital Assets (continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government 1,229,434$
Public safety 1,353,967
Community services 4,480,759
Public works 15,482,352
Capital assets held by the internal service funds
(charged to various functions based on
their usage of the assets)2,512,781
Total depreciation expense - governmental activities 25,059,293$
Business-type activities:
Carlsbad Municipal Water District 5,502,191$
Wastewater 5,303,919
Golf course 3,527,563
Total depreciation expense - business-type activities 14,333,673$
Note 7. Long-term Debt
The following is a summary of changes in the principal balance of long-term debt for the year ended June 30, 2019:
Principal Principal
Balance at Balance at Due Within
July 1, 2018 Increases Decreases June 30, 2019 One Year
Governmental activities:
Obligations under capital lease 587,581 $ -$ 209,286 $ 378,295 $ 222,373 $
Total governmental
activities 587,581 $ -$ 209,286 $ 378,295 $ 222,373 $
Principal Principal
Balance at Balance at Due Within
July 1, 2018 Increases Decreases June 30, 2019 One Year
Business-type activities:
Loans payable 14,943,931 $ 3,428,908 $ 1,546,234 $ 16,826,605 $ 1,582,886 $
Total business type
activities 14,943,931 $ 3,428,908 $ 1,546,234 $ 16,826,605 $ 1,582,886 $
Notes to the Financial Statements
101
Note 7. Long-term Debt (continued)
Long-term debt at June 30, 2019 is comprised of the following issues:
Balance at
Governmental long-term debt June 30, 2019
The city has entered into several office equipment lease-purchase agreements. As of
June 30, 2019 the city has not purchased any of the copier equipment. All lease terms
are for 60 months, with interest rates ranging from 6.0% to 7.2%.378,295 $
Sub-total governmental long-term debt 378,295
Less current portion (222,373)
Total long-term portion of governmental debt 155,922 $
Balance at
Business-type long-term debt June 30, 2019
2005 Carlsbad Municipal Water District loan agreement with the State Water Resources
Control Board totaling $9,694,504. Principal is due in varying amounts ranging from
$557,785 to $631,082 on June 1 of each year through 2025, interest payable on June 1 each
year at 2.5% per annum. Payable from recycled water user fees.3,562,982$
2006 Carlsbad Municipal Water District loan agreement with the State Water Resources
Control Board totaling $19,382,546. Principal is due in varying amounts ranging from
$1,025,101 to $1,201,977 on April 1 of each year through 2027, interest payable on April 1
of each year at 2.3% per annum. Payable from recycled water user fees. 8,892,233
2014 Carlsbad Municipal Water District loan agreement, as revised, with the State Water Resources
Control Board authorized to $22,150,000. Principal and interest will not be due until December 2021.
Interest is payable on December 31 of each year at 1.0% per anum. Principal due under the current
amortiztion schedule ranges from $126,795 to $169,208. Payable from recycled water user fees.4,371,390
Subtotal business-type long-term debt 16,826,605
Less current portion (1,582,886)
Total long-term portion of business-type debt 15,243,719 $
Notes to the Financial Statements
102
Note 7. Long-term Debt (continued)
The aggregate maturities of long-term debt are as follows:
Year ended June 30:Principal Interest
2020 222,373 $ 16,877 $
2021 155,922 3,578
378,295 $ 20,455 $
Year ended June 30:Principal Interest
2020 1,582,886 $ 293,595 $
2021 1,620,408 256,074
2022 1,784,490 261,767
2023 1,825,072 221,174
2024 1,866,600 179,634
2025-2029 4,817,012 367,299
2030-2034 694,154 154,130
2035-2039 729,563 118,404
2040-2044 766,778 80,856
2045-2049 805,891 41,392
2050-2051 333,751 5,059
16,826,605 $ 1,979,384 $
Business-type Activities
Governmental Activities
The aggregate maturities for the business-type activities reflect a recent $4,371,390 state water loan. The city is
currently drawing down loan proceeds from an authorized $22.1 million for the expansion of the recycled water
facility. The loan amount will continue to adjust as future draws are made.
Note 8. Rate Covenants and Pledged Revenue
Rate covenants
The CMWD loan agreements with the State Water Resources Control Board requires that CMWD set its charges for
services and rates for fees each year at rates sufficient to produce net revenues (after paying the operating and
maintenance expenses of CMWD, excluding depreciation) of at least one times debt service for that year. All of the revenues of CMWD are pledged to meet these rate covenants and to secure related debt. All rate covenants
requirements were met for the fiscal year ended June 30, 2019.
Notes to the Financial Statements
103
Note 8. Rate Covenants and Pledged Revenue (continued)
Pledged revenue
The city has a number of debt issuances outstanding that are collateralized by the pledging of certain revenues. The
purpose for which the proceeds of the related debt issuances were utilized are disclosed in the debt descriptions of
the accompanying notes. For the current year, debt service payments as a percentage of the pledged gross revenue
(net of certain expenses where so required by the debt agreement) are indicated in the table below. These
percentages also approximate the relationship of debt service to pledged revenues for the remainder of the term of
the commitment:
Debt Service as a
Description of Pledged Annual Amount of Pledged Annual Debt Service Percentage of Pledged
Revenue Revenue (net of expenses)Payments Revenue
Recycled water revenues 2,202,516$ 1,876,482$ 85%
Note 9. Debt without Government Commitment
In the opinion of city officials, the bonds listed below are not payable from any revenues or assets of the city, and
neither the full faith and credit nor the taxing power of the city, the State of California, nor any political subdivision
thereof, is obligated to the payment of the principal or interest on the bond. Accordingly, no liability has been
recorded in the accompanying financial statements.
Limited obligation improvement bonds
As of June 30, 2019, the city has two series of assessment district bonds outstanding in the amount of $32,380,000.
These bonds were issued under the provisions of the Improvement Bond Act of 1915 and were used to finance public
infrastructure improvement projects. The city collects assessments to pay the bond debt. These monies are
accounted for in the assessment districts’ agency funds.
Special tax bonds
As of June 30, 2019, the city has two series Community Facilities District (CFD) bonds outstanding in the amount of
$19,715,000. These bonds were issued under the provisions of the Mello-Roos Community Facilities Act of 1982 and
were used to finance public infrastructure improvement projects. The city collects special taxes to pay the bond
debt. These monies are accounted for in the CFDs’ agency funds.
Mortgage revenue bonds
Multi-Family Housing Revenue Bonds are issued to provide construction and permanent financing to developers of
multi-family residential rental projects located in the city which will be partially occupied by persons of low or
moderate income. The total amount of mortgage revenue bonds outstanding as of June 30, 2019 is $19,876,148.
The bonds, together with interest thereon, are limited obligations of the city payable solely from bond proceeds,
revenues and other amounts derived solely from home mortgage and developer loans secured by first deeds of trust,
irrevocable letters of credit, and irrevocable surety bonds.
Notes to the Financial Statements
104
Note 10. Fund Balances
The following is a summary of the components of fund balances as of June 30, 2019:
Community General
Facilities Capital Infrastructure
Fund Balances General District No. 1 Construction Replacement
Nonspendable:
Inventory 17,659 $ -$ -$ -$
Prepaid items - - - -
Loans receivable 77,781 - - -
Due from Successor Agency*2,273,749 - - -
Advances to other funds*47,238,604 - - -
Totals 49,607,793 - - -
Restricted for:
Affordable housing - - - -
Lighting and landscaping districts - - - -
Habitat and agricultural mitigation/preservation - - - -
Capital projects - 89,650,970 - -
General government - - - -
Public safety - - - -
Community services - - - -
Totals - 89,650,970 - -
Committed to:
Community activity grants 1,000,000 - - -
Totals 1,000,000 - - -
Assigned to:
General government 18,505,261 - - -
Public safety 5,474,886 - - -
Community services 6,184,075 - - -
Public works 3,203,345 - - -
Capital projects - - 42,666,244 119,472,415
Totals 33,367,567 - 42,666,244 119,472,415
Unassigned:
Unassigned 82,565,061 - - -
Economic uncertainty 19,135,909 - - -
Totals 101,700,970 - - -
Total fund balances 185,676,330 $ 89,650,970 $ 42,666,244 $ 119,472,415 $
Governmental Funds
* Only reflects that portion of fund balance invested in interfund advances and loans (the General Fund amount is
net of $13,416,611 in unavailable revenue for measurable but unavailable interest earned on such advances and
loans).
Notes to the Financial Statements
105
Public Other
Park Facilities Governmental
Development Construction Funds Total
-$ -$ -$ 17,659 $
- - 992 992
- - - 77,781
- - - 2,273,749
- - - 47,238,604
- - 992 49,608,785
- - 43,587,241 43,587,241
- - 8,025,279 8,025,279
- - 1,523,598 1,523,598
6,145,663 32,827,054 65,810,825 194,434,512
- - 842,903 842,903
- - 329,918 329,918
- - 3,155,716 3,155,716
6,145,663 32,827,054 123,275,480 251,899,167
- - - 1,000,000
- - - 1,000,000
- - - 18,505,261
- - - 5,474,886
- - - 6,184,075
- - - 3,203,345
- - - 162,138,659
- - - 195,506,226
- - - 82,565,061
- - - 19,135,909
- - - 101,700,970
6,145,663 $ 32,827,054 $ 123,276,472 $ 599,715,148 $
Governmental Funds
Notes to the Financial Statements
106
Note 10. Fund Balances (continued)
Fund balances are reported in the fund statements in the following classifications:
Nonspendable Fund Balance
Nonspendable Fund Balance – this includes amounts that cannot be spent because they are either not
spendable in form (such as inventory) or legally or contractually required to be maintained intact (such as
endowments).
Spendable Fund Balance
Restricted Fund Balance – this includes amounts that can be spent only for specific purposes stipulated by
constitution, external resource providers, or through enabling legislation. If the City Council action limiting
the use of funds is included in the same action (legislation) that created (enables) the funding source, then
it is restricted.
Committed Fund Balance – this includes amounts that can be used only for the specific purposes
determined by a formal action of the City Council. It includes legislation (council action) that can only be
overturned by new legislation requiring the same type of voting consensus that created the original action.
Therefore, if the council action limiting the use of the funds is separate from the action (legislation) that
created (enables) the funding source, then it is committed, not restricted. The city considers a resolution
to constitute the formal action of the City Council that is necessary to commit fund balance.
Assigned Fund Balance – this includes amounts that are designated or expressed by the City Council, but
does not require a formal action like a resolution or ordinance. The City Council has delegated the authority
for the city manager to carry forward certain unspent budget amounts for specific purposes if the amount
is equal to or less than $100,000 to the next fiscal year. The City Council has authorized, through a
resolution, that all outstanding encumbrances at the end of the fiscal year and certain unspent budgeted
amounts above $100,000 to be carried forward into the next fiscal year. These amounts are shown as
assigned fund balance at the end of the fiscal year:
• General government – citywide back file conversion; unfunded litigation costs; climate action plan
communications costs; resident satisfaction/opinion survey; data driven decision making platform;
Smart City initiatives; implementation and maintenance of a learning management system; utility
billing system upgrade; cashiering system upgrade; a new Enterpise Resource Planning system; and
additional inovation-related projects.
• Public safety – a three-year labor contract; crossing guard contract increase; outfitting of a new fire
engine; fire station bay monitor displays; fire Citygate contract; the purchase and outfitting of five
police vehicles; three marked police vehicles; school resource office vehicle and outfitting; and the
outfitting of two former ambulances for police use.a taser replacement program; graffiti trackers; K-9
narcotics training; police license plate readers; new office furniture and space renovations; and
additional part-time employees.
Notes to the Financial Statements
107
Note 10. Fund Balances (continued)
• Community services – housing element costs; replace Schulman Auditorium sound system; business
processes and training documentation; contract for backfile conversion; community public art projects;
parks and recreation master plan updates; third party geotech and traffic analysis; talent assessment
and succession planning; Dove Library collections and technical services space reconfiguration; cultural
arts mobile outreach; Dove Library wayfinding; Leo Carrillo Ranch surface repairs; and Harding
Community Center office remodel.
• Public works – invasive species mitigation; Safety Center air handlers replacement; PriSim replacement;
security upgrade; and supplemental provisions update for public works contracts.
• Capital projects – citywide infrastructure replacement projects; trail connectivity to Tamarack State
Beach; construction of the Orion Center; refurbishments at City Hall and the Faraday Center; beach
access repair/upgrades; Safety Center building improvements; replacement of Fire Station No. 2 and
the Monroe Stree Pool; the ongoing pavement management program; Maerkle Reservoir floating cover
replacement; Maerkle Reservoir transmission main; extension of Poinsettia Lane; sidewalk/street
construction program; Kelly Drive and Park Drive road diet and multiuse trail; analysis and conceptual alignments for two double-track railroad trench alternatioves through the village area; Terramar area
coastal improvements; additional water and recycled water lines; continuation of drainage and street
improvements at the Encina Water Pollution Control Facility; and wastewater line
refurbishments/replacements at various locations throughout the city.
Unassigned Fund Balance – this includes the remaining spendable amounts which are not included in one
of the other classifications. The General Fund is the only fund that reports a positive unassigned fund
balance amount.
It is the city’s policy that restricted resources will be applied first, followed by (in order of application) committed,
assigned, and unassigned resources, in the absence of a formal policy adopted by the City Council.
Note 11. General Fund Balance Policy
Pursuant to Council Policy 74, the city is commited to maintaining General Fund reserves at a target of 40% of
General Fund annual operating expenditures. The total reserve level is calculated using the prior fiscal years adopted
General Fund budgeted expenditures. This reserve is for unforeseen emergencies or catastrophic impacts upon the
city. Reserves are evaluated annually in conjunction with the development of the city’s annual operating budget
process. Staff report to the City Council annually on the status of the reserve levels relative to this policy.
Note 12. Accumulated Fund Deficits/Negative Net Position
The following funds reported deficits in fund balances or net position as of June 30, 2019:
Deficit Balance
Enterprise Funds:
Golf Course (20,678,574)$
The deficit in the Golf Course Fund is the result of the General Fund advancing money to the Golf Course Fund for
the construction of the course and partially subsidizing the operations of the course in prior fiscal years.
Notes to the Financial Statements
108
Note 13. Interfund Transfers
Interfund transfers for the year ended June 30, 2019, consisted of the following:
Transfers Out Amount
General Fund Gas Tax Fund 10,000$
General Capital Construction 260,000
Capital Project Funds:
Infrastructure Replacement General Fund 10,681,000
Enterprise Funds:
Storm Water Protection General Fund 219,274
Internal Service Funds:
Workers' Compensation General Fund 1,500,000
Special Revenue Funds:
Affordable Housing Tyler Court Apartments 100,248
Financing Districts General Fund 775,000
Section 8 Rental Assistance Affordable Housing 55,000
13,600,522$
Transfers In
Transfers are used to: (1) move revenues and expenditures to the appropriate funds; (2) use unrestricted revenues
collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary
authorizations; and (3) move excess cash collected for future capital replacement in accordance with Council
authorization.
Note 14. Risk Management
The city is exposed to various risks of loss related to its operations, including losses associated with errors and
omissions and injuries to employees and members of the public. The city uses a Risk Management Self-Insurance
Fund, a Self-Insured Benefits Fund and a Workers’ Compensation Fund (all internal service funds) to account for and
finance its uninsured risks of loss. All other funds of the city make payments to these funds based on annual
estimates of the amounts needed to pay prior and current year claims and to establish a reserve for catastrophic
losses.
Beginning July 1, 2015, the city joined California State Association of Counties Excess Insurance Authority (CSAC-EIA)
for excess general liability coverage. This coverage was purchased through the city’s broker, Alliant Insurance
Services. Under this program, the city’s coverage is a maximum of $25,000,000 per occurrence with a self-insured
retention (SIR) of $1,000,000. CSAC-EIA is one of the largest risk sharing pools of its kind in the country. At June 30,
2019, the unrestricted fund equity for the Risk Management Self-Insurance Fund was $1,382,629. Funds used by
the Risk Management Fund to liquidate the claims liability predominantly come from the General Fund (85.70%),
the Water funds (5.22%) and the Wastewater funds (2.50%).
Notes to the Financial Statements
109
Note 14. Risk Management (continued)
Through December 31, 2018, the city was self insured for dental insurance. Dental insurance coverage for city
employees was administered by MetLife. Under the city’s previous agreement with MetLife, MetLife paid dental
claims for each covered member, up to a maximum of $1,500 per calendar year. At June 30, 2019, it is estimated
that there are claims still outstanding in the amount of $20,000.
The city is insured for workers’ compensation claims by Safety National. Safety National provides coverage up to a
maximum of $2,000,000 per occurrence for losses which exceed the city’s SIR of $1,250,000 for all employees. At
June 30, 2019, the unrestricted fund equity for the Workers’ Compensation Self-Insurance Fund was $ $2,020,380.
Funds used by the Workers’ Compensation Fund to liquidate the claims liability predominantly come from the
General Fund (92.38%), the Water funds (2.43%) and the Wastewater funds (1.15%).
The estimated claims payable reported at June 30, 2019 is based on the requirements of GASB, which requires that
a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is
probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be
reasonably estimated. Settled cases did not exceed insurance coverage during the past fiscal year.
Changes in the estimated claims payable amounts in Fiscal Years 2018 and 2019 for the three internal service funds
are as follows:
Expense and
Beginning Changes in Claim Ending
Balance Estimates Payments Balance
Self-Insured Benefits Fund:
2017-18 105,258$ 609,912$ 613,003$ 102,167$
2018-19 102,167 269,946 352,113 20,000
Risk Management Fund:
2017-18 2,934,641 1,131,031 1,743,555 2,322,117
2018-19 2,322,117 1,158,709 582,838 2,897,988
Workers’ Compensation Fund:
2017-18 7,355,549 3,701,351 2,615,752 8,441,148
2018-19 8,441,148 4,634,755 2,878,110 10,197,793
Claims
Note 15. Joint Ventures
Encina Water Pollution Control Facilities
The Encina Water Pollution Control Facilities (the facilities) are wastewater facilities owned jointly by the cities of
Carlsbad, Vista and Encinitas and the Leucadia Wastewater District, the Buena Vista Sanitation District and the
Vallecitos Water District. The Encina Wastewater Authority (EWA) is a joint powers authority established to operate
and administer the facilities. It is responsible for the management, maintenance and operations of the joint system.
Each member agency has a specified percentage of ownership in the various components of the Encina Water
Pollution Control Facilities that varies from component to component. Accordingly, each member agency reports
its undivided interest in the facilities as a part of that member agency’s capital assets.
Notes to the Financial Statements
110
Note 15. Joint Ventures (continued)
As of June 30, 2019, the undivided interest of each member agency in the various components of the Encina Water
Pollution Control Facilities aggregated as follows:
City of Carlsbad 24%
City of Vista 25%
Leucadia Wastewater District 17%
Vallecitos Water District 23%
Buena Sanitation District 7%
City of Encinitas 4%
EWA does not recognize net income or loss. Net operating expenditures in excess of users’ assessments are treated
as accounts receivable on EWA’s books and charged to users’ accounts in the following year. Conversely, users’
assessments in excess of net operating expenditures are treated as a liability and credited against users’ accounts,
also in the following year. Under this basis, net operating loss (before member billings) for EWA totaled $466 in
Fiscal Year 2018. The financial statements of EWA can be obtained at 6200 Avenida Encinas, Carlsbad, California
92011 or at www.encinajpa.com.
Encina Financing Joint Powers Authority
The Encina Financing Joint Powers Authority (the Authority) was created on February 1, 1989 between the City of
Carlsbad (Carlsbad), the City of Vista (Vista), the Buena Vista Sanitation District (Buena) and the Leucadia County
Water District (Leucadia). The primary purpose of the Authority is to issue revenue bonds in order to finance the
expansion of the facility.
The Authority is governed by a Board of Directors, which consists of one director appointed by each member. The
financial statements of the Authority can be obtained at the city’s Administrative Services Department.
The city’s share in the accounts of the Authority is recorded in the Wastewater Enterprise Fund. The expansion of
the facility is shown as a capital asset of the Wastewater Enterprise Fund.
Note 16. Pension Plan
Plan description, benefits provided and employees covered
All qualified permanent and probationary employees are eligible to participate in the city’s Safety (sworn police and
fire) and Miscellaneous (all other) Plans (the Plans), agent multiple-employer defined benefit pension plans
administered by CalPERS, which acts as a common investment and administrative agent for its participating member
employers. A full description of the Plans regarding number of employees covered, benefit provisions, assumptions
(for funding, but not accounting purposes), and membership information are listed in the Plan’s June 30, 2017
Annual Actuarial Valuation Report (funding valuation). Details of the benefits provided can be obtained in Appendix
B of the Actuarial Valuation Report. This report and CalPERS’ audited financial statements are publicly available
reports that can be obtained at CalPERS’ website.
Notes to the Financial Statements
111
Note 16. Pension Plan (continued)
Benefits provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments, and death benefits to
plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service,
equal to one year of full time employment. The Plans’ provisions and benefits in effect at June 30, 2019, are
summarized as follows:
On or after
Prior to November 28, 2011 to On or after
Hire date November 28, 2011 December 31, 2012 January 1, 2013
Benefit formula 3% @ 60 2% @ 60 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 60 50 - 63 52 - 67
Monthly benefits, as a % of eligible compensation 2.0% to 3.0%1.092% to 2.418%1.0% to 2.5%
Required employee contribution rates 8%7%6.75%
Required employer contribution rates 12.343%12.343%12.343%
Required employer payment of unfunded liability:
Miscellaneous
$7,126,004
On or after
Prior to October 4, 2010 to On or after
Hire date October 4, 2010 December 31, 2012 January 1, 2013
Benefit formula 3% @ 50 2% @ 50 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 50 - 55 50 - 57
Monthly benefits, as a % of eligible compensation 3%2.0% to 2.7%2.0% to 2.7%
Required employee contribution rates 9%9%12%
Required employer contribution rates 19.595%19.595%19.595%
Required employer payment of unfunded liability:
Safety
$4,523,960
Notes to the Financial Statements
112
Note 16. Pension Plan (continued)
Employees covered
As of June 30, 2018, the following employees were covered by the benefit terms for each Plan:
Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 515 228
Inactive employees or beneficiaries currently not yet receiving benefits 457 98
Active employees 506 187
Total 1,478 513 Contribution description
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution
rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1
following notice of a change in the rate. The total plan contributions are determined through the CalPERS’ annual
actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs
of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued
liability. The employer is required to contribute the difference between the actuarially determined rate and the
contribution rate of employees. For the measurement period ending June 30, 2018 (the measurement date), the
average active employee contribution rate ranged from 6.75 percent to 8.0 percent of annual pay for miscellaneous
employees and 9.0 percent to 12.0 percent of annual pay for safety employees, and the average employer’s
contribution rate is 12.343 percent of annual payroll for miscellaneous employees and 19.595 percent of annual
payroll for safety employees. Employer contribution rates may change if plan contracts are amended. Payments
made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan
member contribution requirements are classified as plan member contributions.
Actuarial methods and assumptions used to determine total pension liability
For the measurement period ending June 30, 2018 (the measurement date), the total pension liability was
determined by rolling forward the June 30, 2017 total pension liability determined in the June 30, 2017 actuarial
accounting valuation. The June 30, 2018 total pension liability was based on the following actuarial methods and
assumptions:
Actuarial cost method Entry Age Normal in accordance with the requirements of GASB 68
Actuarial assumptions
Discount rate 7.15%
Inflation 2.50%
Salary increases Varies by entry age and service
Mortality rate table*Derived using CalPERS' membership data for all funds
Post-retirement benefit increase Contract COLA up to 2.0% until Purchasing Power Protection Allowance Floor on
purchasing power applies; 2.50% thereafter
* The mortality table used was developed based on CalPERS' specific data. The table includes 15 years of
mortality improvements used Society of Actuaries Scalee 90% of scale MP 2016. For more details on this table, please refer
to the 2017 experience study report.
Notes to the Financial Statements
113
Note 16. Pension Plan (continued)
All other actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial
experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement
rates. The Experience Study report can be obtained at the CalPERS website at www.calpers.ca.gov under Forms and
Publications.
Discount rate
The discount rate used to measure the total pension liability was 7.15 percent. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members will be made at the current member
contribution rates and that contributions from employers will be made at statutorily required rates, actuarially
determined. Based on those assumptions, the Plans’ fiduciary net position was projected to be available to make all
projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on
plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Long-term expected rate of return
The long-term expected rate of return on pension plan investments was determined using a building-block method
in which expected future real rates of return (expected returns, net of pension plan investment expense and
inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS staff took into account both short-term and long-
term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the
funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years)
and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-
term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set
by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for
cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then
set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative
expenses.
Current Target Real Return Real Return
Asset Class¹Allocation Years 1 - 10²Years 11+3
Global equity 50.0%4.80%5.98%
Fixed income 28.0 1.00 2.62
Inflation assets 0.0 0.77 1.81
Private equity 8.0 6.30 7.23
Real estate 13.0 3.75 4.93
Liquidity 1.0 0.00 (0.92)
¹ In the System's CAFR, fixed income is included in global debt securities; liquidity is included
in short-term investment; inflation assets are included in both global equity securities
and global debt securities.
2 An expected inflation of 2.0% used for this period.
3 An expected inflation of 2.92% used for this period.
Notes to the Financial Statements
114
Note 16. Pension Plan (continued)
Pension plan fiduciary net position
CalPERS issues a publicly available financial report that includes financial statements and required supplementary
information. That report may be obtained on the California Public Employees’ Retirement System website at
www.calpers.ca.gov under forms and publications.
Changes in net pension liability
Miscellaneous Safety
Plan Plan Total
Net pension liability 83,011,929$ 80,009,216$ 163,021,145$
Deferred outflows of resources - pension related items 26,304,222 35,553,303 61,857,525
Deferred inflows of resources - pension related items (5,103,967) (2,435,258) (7,539,225)
Pension expense 14,566,408 12,650,211 27,216,619
The following table shows the changes in net pension liability recognized over the measurement period.
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at: 6/30/2017 372,190,930$ 270,386,079$ 101,804,851$
Changes Recognized for the Measurement Period:
• Service cost 7,642,062 - 7,642,062
• Interest on the Total Pension Liability 25,874,546 - 25,874,546
• Differences between expected and actual experience (3,023,977) - (3,023,977)
• Changes of assumptions (2,662,243) - (2,662,243)
• Plan to plan resource movement - 3,388 (3,388)
• Contributions from the employer - 22,114,923 (22,114,923)
• Contributions from employees - 3,005,761 (3,005,761)
• Net investment income - 22,720,698 (22,720,698)
• Benefit payments, including refunds of employee contributions (16,887,970) (16,887,970) -
• Administrative expense - (421,336) 421,336
• Other Miscellaneous Income/(Expense)1 - (800,124) 800,124
Net Changes during 2017-18 10,942,418 29,735,340 (18,792,922)
Balance at 6/30/2018 383,133,348$ 300,121,419$ 83,011,929$
1During Fiscal Year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share
of activity related to postemployment benefits for participation in the State of California's agent OPEB plan. Accordingly,
CalPERS recorded a one-time epense as a result of the adoption of GASB 75.
Additionally, CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017-18,
CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity
related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68).
Increase (Decrease)Miscellaneous Plan
Notes to the Financial Statements
115
Note 16. Pension Plan (continued)
Sensitivity of the net pension liability to changes in the discount rate
The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount
rate of 7.15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that
is 1 percentage-point lower (6.15 percent) or 1 percentage-point higher (8.15 percent) than the current rate:
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.15%)Rate (7.15%)(8.15%)
Plan's Net Pension Liability - Miscellaneous 133,945,784$ 83,011,929$ 40,881,618$
Plan's Net Pension Liability - Safety 122,063,576$ 80,009,216$ 45,649,075$
Recognition of gains and losses
Notes to the Financial Statements
116
Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized
in pension expense systematically over time.
Note 16. Pension Plan (continued)
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining
amounts are categorized as deferred inflows and deferred outflows of resources related to pensions and are to be
recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Difference between projected and actual
earnings on pension plan investments
5 year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining
service lifetime (EARSL) of all members that are provided with
benefits (active, inactive, and retired) as of the beginning of the
measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by
the total number of plan participants (active, inactive, and retired).
The EARSL for the Miscellaneous Plan for the June 30, 2018 measurement date is 3.2 years, which was obtained by
dividing the total service years of 4,778 (the sum of remaining service lifetimes of the active employees) by 1,478
(the total number of participants: active, inactive, and retired). Note that inactive employees and retirees have
remaining service lifetimes equal to zero. Also note that total future service is based on the members’ probability
of decrementing due to an event other than receiving a cash refund.
The EARSL for the Safety Plan for the June 30, 2018 measurement date is 4.5 years, which was obtained by dividing
the total service years of 2,315 (the sum of remaining service lifetimes of the active employees) by 513 (the total
number of participants: active, inactive, and retired). Note that inactive employees and retirees have remaining
service lifetimes equal to zero. Also note that total future service is based on the members’ probability of
decrementing due to an event other than receiving a cash refund.
Pension expense and deferred outflows and deferred inflows of resources related to Pensions
For the measurement period ending June 30, 2018 (the measurement date), the city recognized a pension expense
of $27,216,619 for the Plans.
As of June 30, 2018, the city reports other amounts for the Miscellaneous Plan as deferred outflows and deferred
inflows of resources related to pensions as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 17,733,606$ -$
Difference between expected and actual experience - (3,255,576)
Change in allocation between programs 18,099 (18,099)
Changes of assumptions 7,447,418 (1,830,292)
Net difference between projected and actual earnings on pension plan investments 1,105,099 -
Total 26,304,222$ (5,103,967)$
Notes to the Financial Statements
117
Note 16. Pension Plan (continued)
As of June 30, 2018, the city reports other amounts for the Safety Plan as deferred outflows and deferred inflows of
resources related to pension as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 23,119,790$ -$
Difference between expected and actual experience 2,215,947 (726,150)
Changes of assumptions 9,417,619 (1,709,108)
Net difference between projected and actual earnings on pension plan investments 799,947 -
Total 35,553,303$ (2,435,258)$
For the Miscellaneous Plan, $17,733,606 reported as deferred outflows of resources related to employer
contributions subsequent to the measurement date, and for the Safety Plan, $23,119,790 reported as deferred
outflows of resources related to employer contributions subsequent to the measurement date, will be recognized
as a reduction of the net pension liability in the fiscal year ended June 30, 2020. Other amounts reported as deferred
outflows of resources and deferred inflows of resources related to the Miscellaneous Plan pensions will be
recognized as pension expense as follows:
Deferred
Measurement Period Outflows/(Inflows) of
Ended June 30:Resources
2019 7,341,929$
2020 (333,645)
2021 (2,907,306)
2022 (634,329)
2023 -
Thereafter -
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Safety
Plan pensions will be recognized as pension expense as follows:
Deferred
Measurement Period Outflows/(Inflows) of
Ended June 30:Resources
2019 5,651,008$
2020 4,313,840
2021 416,671
2022 (383,264)
2023 -
Thereafter -
Notes to the Financial Statements
118
Note 17. Other Post Employment Benefits (OPEB)
The city and former employees of CMWD are offered other postemployment benefits in the form of health benefits.
The majority of city employees are under the city defined benefit agent multiple-employer plan. CMWD has a
defined benefit agent multiple-employer plan.
Plan descriptions
Carlsbad Municipal Water District (CMWD)
The first Plan is for active and retired employees who were employed with CMWD at the time CMWD was acquired
by the city. Per Resolution No. 614, all former employees of CMWD (including dependents) are eligible for
postretirement health care benefits if they voluntarily retire after the age of 50, with no less than five years of service
and whose age, combined with years of service, equals 70 or more.
The city pays for 100 percent of the premiums for health insurance which is coordinated with Medicare and other
benefits provided by federal and state law, when available, to the extent it reduces the cost of insurance premiums.
This Plan was previously administered by the Association of California Water Agencies (ACWA). Effective March 1,
2019, this Plan is now administed by CalPERS.
City of Carlsbad
City employees are offered health insurance coverage under the Public Employees’ Medical and Hospital Care Act
(PEMHCA), which is administered by CalPERS. Under PEMHCA, the city is required to pay a small portion of the
monthly medical premiums of retired employees (considered a subsidy), if the retired employees continue their
medical coverage under PEMHCA. Surviving spouses of eligible retirees are eligible for the city subsidy. Surviving
spouses/domestic partners of deceased active members are eligible for the city subsidy only if the employee had
attained age 50 with five years of service.
The city pays a monthly subsidy per eligible employee/retiree regardless of coverage elected:
Calendar Year 2017 $128.00
Calendar Year 2018 133.00
Calendar Year 2019 136.00 Thereafter, the subsidy is adjusted annually to reflect changes in the medical component of the Consumer Price
Index.
California Public Employer’s Retiree Benefit Trust Program
The city is participating in the California Employer’s Retiree Benefit Trust Program (CERBT) through irrevocable trust
agreements for both Plans. CERBT is administered by CalPERS. The city’s OPEB fiduciary net position is included in
the CERBT Schedule of Changes in Fiduciary Net Position by Employer report. That report may be obtained on the
California Public Employees’ Retirement System website at www.calpers.ca.gov under forms and publications.
Notes to the Financial Statements
119
Note 17. Other Post Employment Benefits (continued)
Employees covered
As of the June 30, 2018 measurement date, the following employees were covered by the benefit terms for each
Plan:
CMWD City
Inactive employees or beneficiaries currently receiving benefits 18 210
Inactive employees or beneficiaries currently not yet receiving benefits - 315
Active employees 2 695
Total 20 1,220
Contributions
The obligation of CMWD to contribute to the CMWD Plan is established, and may not be amended by the CMWD
Board. The obligation of the city to contribute to the city Plan is established, and as long as the city is a member of
PEMCHA, may not be amended by the City Council. The City Council does have the authority to change health
insurance coverage outside of PEMHCA, which could change the funding obligation for city employees.
Employees are not required to contribute to the Plans. The city and CMWD’s contributions are based on the
actuarially determined contribution (ADC), an amount actuarially determined in accordance with the parameters of
GASB. The ADC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost
each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years
on a “closed” basis. The city’s and CMWD’s contributions for each Plan are as follows:
CMWD City
Fiscal Year 2018-19 Cash Contributions 239,547 $ 370,924 $
Fiscal Year 2018-2019 Estimated Implied Subisdy Payments 28,549 248,636
Fiscal Year 2018-19 Trust Contributions - 90,646
Total Contributions 268,096 $ 710,206 $
Notes to the Financial Statements
120
Note 17. Other Post Employment Benefits (continued)
Net OPEB liability
The city’s and CMWD’s net OPEB liability was measured as of June 30, 2018 and the total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2017 that was rolled forward
to determine the June 30, 2018 total OPEB liability, based on the actuarial methods and assumptions shown on the
following page:
Actuarial Cost Method: Entry Age Normal
Actuarial Assumptions:
Discount Rate 7.00%
Inflation 2.75%
Salary Increases 3.00%
Investment Rate of Return 7.00% with a 45% to 50% confidence based on Bartel
Associates modeling for CERBT Strategy 1.
Mortality Rate1 Derived using CalPERS’ Membership Data for all funds.
Pre-Retirement Turnover2 Derived using CalPERS’ Membership Data for all funds.
Healthcare Trend Rate3 Based in part on premium experience.
Notes: 1. Based on CalPERS 1997-2015 Experience Study. The Experience Study Reports may be accessed on the CalPERS website
www.calpers.ca.gov under Forms and Publications.
2. Based on CalPERS 1997-2015 Experience Study for Miscellaneous Employees. The Experience Study Reports may be accessed on the
CalPERS website www.calpers.ca.gov under Forms and Publications. 3. Short-term healthcare trend’s were developed in consultation with Axene Health Partner’s healcare actuaries. Long-term healthcare
trend developed using Society of Actuaries’ Getzen Model of Long-Run Medical Cost Trends.
Notes to the Financial Statements
121
Note 17. Other Post Employment Benefits (continued)
The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized
in the following table:
CERBT Strategy 1
Asset Class
Target
Allocation
Long-Term Expexted
Real Rate of Return
Global Equity 57% 4.82%
Fixed Income 27% 1.47%
TIPS 5% 1.29%
Commodities 3% 0.84%
REITS 8% 3.76%
Total 100%
Notes: 1. The long-term expected rate of return is 7.00%. 2. Assumed long-term rate of inflation is 2.75%.
Discount rate
The discount rate used to measure the total OPEB liability was 7.00 percent. The projection of cash flows used to
determine the discount rate assumed that city and CMWD contributions will be made at rates equal to the actuarially
determined contribution rates. Based on those assumptions, the OPEB Plans’ fiduciary net position was projected
to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries.
Therefore, the long-term expected rate of return on OPEB Plans investments was applied to all periods of projected
benefit payments to determine the total OPEB liability.
Changes in OPEB liability
CMWD City
Plan Plan Total
Net OPEB liability 533,073$ 1,692,394$ 2,225,467$
Deferred outflows of resources - OPEB related items 268,096 710,206 978,302
Deferred inflows of resources - OPEB related items (96,278) (273,342) (369,620)
OPEB expense 35,351 577,075 612,426
Notes to the Financial Statements
122
Note 17. Other Post Employment Benefits (continued)
The changes in the net OPEB liability for the CMWD plan are shown below:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at: 6/30/2018 (Measurement Date: 6/30/2017) 4,061,904$ 3,268,229$ 793,675$
Changes Recognized for the Measurement Period:
• Service cost 12,595 - 12,595
• Interest on the total OPEB liability 275,029 - 275,029
• Contributions from the employer - 291,039 (291,039)
• Net investment income - 263,258 (263,258)
• Benefit payments, including refunds of employee contributions (291,039) (291,039) -
• Administrative expense - (6,071) 6,071
Net Changes (3,415) 257,187 (260,602)
Balance at 6/30/2019 (Measurement Date: 6/30/2018)4,058,489$ 3,525,416$ 533,073$
CMWD Plan Increase (Decrease)
The changes in the net OPEB liability for the city Plan are shown below:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at: 6/30/2018 (Measurement Date: 6/30/2017) 11,757,255$ 10,059,309$ 1,697,946$
Changes Recognized for the Measurement Period:
• Service cost 507,914 - 507,914
• Interest on the total OPEB liability 838,617 - 838,617
• Contributions from the employer - 569,855 (569,855)
• Net investment income - 800,892 (800,892)
• Benefit payments, including refunds of employee contributions (569,855) (569,855) -
• Administrative expense - (18,664) 18,664
Net Changes 776,676 782,228 (5,552)
Balance at 6/30/2019 (Measurement Date: 6/30/2018)12,533,931$ 10,841,537$ 1,692,394$
City Plan Increase (Decrease)
Notes to the Financial Statements
123
Note 17. Other Post Employment Benefits (continued) Sensitivity of the net OPEB liability to changes in the discount rate
The following presents the net OPEB liability of the CMWD and city if it were calculated using a discount rate that is
one percentage point lower or one percentage point higher than the current rate, for measurement period ended
June 30, 2018:
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.00%)Rate (7.00%)(8.00%)
Plan's Net OPEB Liability - CMWD 1,011,141$ 533,073$ 139,507$
Plan's Net OPEB Liability - City 3,310,813$ 1,692,394$ 355,733$
Sensitivity of the net OPEB liability to changes in the health care cost trend rates
The following presents the net OPEB liability of the CMWD and city if it were calculated using health care cost trend
rates that are one percentage point lower or one percentage point higher than the current rate, for measurement
period ended June 30, 2018:
Health Care Cost
Trend Rate - 1%
Current Health
Care Cost Trend
Rate
Health Care Cost
Trend Rate + 1%
(6.50%/5.50%
decreasing to 3.00%)
(7.50%/6.50%
decreasing to
4.00%)
(8.50%/7.50%
decreasing to
5.00%)
Plan's Net OPEB Liability - CMWD 103,929$ 533,073$ 1,049,904$
Plan's Net OPEB Liability - City 99,135$ 1,692,394$ 3,661,929$
OPEB plan fiduciary net position
The CERBT issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained from the California Public Employees’ Retirement System, CERBT, P.O.
Box 942703, Sacramento, CA 94429-2703.
Recognition of deferred outflows and deferred inflows of resources
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense
systematically over time.
Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are
categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in
future OPEB expense. The initial recognition period is five years.
Notes to the Financial Statements
124
Note 17. Other Post Employment Benefits (continued)
OPEB expense and deferred outflows/inflows of resources related to OPEB (CMWD)
For the fiscal year ended June 30, 2019, the CMWD recognized OPEB expense of $35,351. As of the fiscal year ended
June 30, 2019, the CMWD reported deferred outflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to measurement date 268,096$ -$
Net difference between projected and actual earnings on
OPEB plan investments - (96,278)
Total 268,096$ (96,278)$
The $268,096 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2018
measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30,
2020. Other amounts reported as deferred inflows of resources related to OPEB will be recognized as expense as
follows:
Deferred
Fiscal Year Outflows/(Inflows)
Ended:of Resources
2020 (29,780)$
2021 (29,780)
2022 (29,780)
2023 (6,938)
2024 -
Thereafter -
OPEB expense and deferred outflows/inflows of resources related to OPEB (city)
For the fiscal year ended June 30, 2019, the city recognized OPEB expense of $577,075. As of the fiscal year ended
June 30, 2019, the city reported deferred outflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to measurement date 710,206$ -$
Net difference between projected and actual earnings on
OPEB plan investments - (273,342)
Total 710,206$ (273,342)$
Notes to the Financial Statements
125
Note 17. Other Post Employment Benefits (continued)
The $710,206 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2018
measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30,
2020.
Other amounts reported as deferred inflows of resources related to OPEB will be recognized as expense as follows:
Deferred
Fiscal Year Outflows/(Inflows)
Ended:of Resources
2020 (84,621)$
2021 (84,621)
2022 (84,623)
2023 (19,477)
2024 -
Thereafter -
Note 18. Commitments and Contingencies
Operating leases
The city has two parking lot leases with North County Transit District. On June 15, 1976, the city entered into a
month-to-month lease for the parking lot located to the east of the railroad tracks between Carlsbad Village Drive
and Oak Avenue. The current lease amount is approximately $1,433 per month and payable monthly. On September
1, 1988, the city entered into a month-to-month lease for the parking lot located on Washington Street to the west
of the railroad tracks between Carlsbad Village Drive and Oak Avenue. The current lease amount is approximately
$2,411 per month and payable annually. Both parking lot leases may be increased annually by the Consumer Price
Index – Average U.S. Cities.
Water purchase agreements
On March 25, 1991, CMWD entered into a twenty year agreement with the Leucadia Wastewater District (LWD), to
purchase recycled water to be used primarily for irrigation at the La Costa Resort & Spa golf course, and for other
appropriate uses within the CMWD boundaries. CMWD agreed to purchase a minimum of about 394 acre feet (AF)
of recycled water per fiscal year (with actual amounts varying based on seasonal demands), at 99 percent of the
retail potable water charged to residential users within the CMWD boundary. The cost per that agreement was
$1,222.84 per AF or a minimum of $481,800 per fiscal year. On September 1, 2013, CMWD and LWD revised the
original agreement and extended the term of the agreement for a minimum of five years. The revised agreement
removed the required minimum quantity to be delivered (394 AF). The agreement was to continue year-to-year
beyond the five year term unless either party provides notice of termination. CMWD provided notice to LWD that
the agreement would terminate effective August 30, 2018, and the agreement was terminated.
During the term of the revised agreement, CMWD and the LWD shared equally all rebates or other incentive
payments from the Metropolitan Water District, San Diego County Water Authority, and any other governmental
agency for recycled water produced by LWD for CMWD.
On August 5, 2003, CMWD entered into a twenty-two year agreement with the Vallecitos Water District, to purchase
three million gallons per day (3,360 acre feet) of recycled water for uses throughout CMWD’s boundaries. Per the
agreement, there is an annual reconciliation that trues up the monthly payments to the actual cost for the water
Notes to the Financial Statements
126
Note 18. Commitments and Contingencies (continued)
purchased each fiscal year. The recycled water cost is adjusted every July 1st and shall not exceed 75 percent of the
wholesale cost of potable water from SDCWA. The agreement also stipulates that CMWD will pay for its share of
the actual operating costs (up to a maximum cost of 75 percent of the wholesale cost of potable water from the San
Diego County Water Authority) of the Mahr Reservoir, which produces the water. The estimated operating costs
paid by CMWD for the period ended June 30, 2019 is $1,277,618.
As of June 30, 2019, city commitments for outstanding encumbrances (purchase orders and contracts for goods and
services not yet delivered) by major governmental fund and nonmajor funds in the aggregate are as follows:
Outstanding
Encumbrances
General Fund 10,951,573 $
Community Facilities District No. 1 1,125,354
General Capital Construction 1,855,743
Infrastructure Replacement 1,886,839
Park Development 388,667
Public Facilities Construction 1,161,981
Nonmajor Governmental Funds in the Aggregate 4,662,715
Total 22,032,872 $
Note 19. Successor Agency Trust for Assets of Former Redevelopment Agency
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the bill”) which provides for the
dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the
city that previously had reported a redevelopment agency within the reporting entity of the city as a blended
component unit.
The bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local
government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units
of state and local government. On January 10, 2012, the City Council elected to become the Successor Agency for
the former redevelopment agency in accordance with the bill as part of City Council Resolution No. 2012-013 and
Housing and Redevelopment Commission Resolution No. 519.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California
cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight
board, remaining assets can only be used to pay enforceable obligations in existence at the date of the dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual
commitments). In future years, successor agencies will only be allowed revenue in the amount that is necessary to
pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency
until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been
liquidated.
Notes to the Financial Statements
127
Note 19. Successor Agency Trust for Assets of Former Redevelopment Agency (continued)
On March 7, 2014, the city received notice from the California Department of Finance that the loans previously made
by the city to the former redevelopment agency are enforceable obligations and that they were made for legitimate
redevelopment purposes. This approval allows the city to list repayment of these loans on future Redevelopment
Obligation Payment Schedules (ROPS).
In accordance with the timeline set forth in the bill (as modified by the California Supreme Court on December 29,
2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entities
as of February 1, 2012.
Long-term Debt
The following is a summary of changes in the principal balance of long-term debt for the year ended June 30, 2019:
Principal Principal
Balance at Balance at Due Within
July 1, 2018 Increases Decreases June 30, 2019 One Year
Bonds 5,295,000$ -$ 775,000$ 4,520,000$ 815,000$
Due to the City of Carlsbad 9,103,922 122,820 1,971,504 7,255,238 -
14,398,922$ 122,820$ 2,746,504$ 11,775,238$ 815,000$
The 1993 Carlsbad Housing and Redevelopment Commission Tax Allocation Bonds were issued totaling $15,495,000.
Principal is due in amounts ranging from $815,000 to $1,000,000 on September 1 of each year through 2024. Interest
is payable on March 1 and September 1 at rates varying from 5.25% to 5.30% per annum. The city posted a surety
bond in lieu of a cash reserve in the amount of $1,055,953. Bonds are payable from redevelopment property tax
increment revenues. Minimum annual debt service requirements have not been established for the obligation of
the Successor Agency to the city.
The aggregate maturities of long-term debt are as follows:
Year ended June 30:Principal Interest
2020 815,000 $ 217,759 $
2021 855,000 173,707
2022 900,000 127,200
2023 950,000 78,175
2024 1,000,000 26,500
4,520,000 $ 623,341 $
Notes to the Financial Statements
128
Note 19. Successor Agency Trust for Assets of Former Redevelopment Agency (continued)
Pledged Revenue
The Successor Agency has a debt issuance outstanding that is collateralized by the pledging of certain revenues. The
amount and term of the remainder of this commitment is indicated in the debt service to maturity table presented
above. The purpose for which the proceeds of the related debt issuance was utilized is disclosed in the debt
description above. For the current year, debt service payments as a percentage of pledged gross revenue (net of
certain expenses where so required by the debt agreement) are indicated in the table on the following page. This
percentage also approximates the relationship of debt service to pledged revenues for the remainder of the term of
the commitment:
Debt Service as a
Description of Annual Amount of Annual Debt Service Percentage of Pledged
Pledged Revenue Pledged Revenue Payments Revenue
Tax increment (Village Area)3,725,388$ 1,034,496$ 28%
Note 20. Prior Period Adjustment
In 2016, the city’s Wastewater Fund received a construction deposit from the City of Vista. These funds were
incorrectly recorded as a deposit (asset) from the City of Vista instead of a deposit (liability) from the City of Vista
with offsetting revenue recognition. The effect of reflecting this liability and revenue correctly on the beginning net
position of the Wastewater Fund is reflected below.
Wastewater
Net position at July 1, 2018 $ 176,963,234
Recognize liability for deposit
made by the City of Vista (3,313,828)
Net position at July 1, 2018, as restated $ 173,649,406
Business-Type
Activities
Net position at July 1, 2018 $ 477,646,405
Recognize liability for deposit
made by the City of Vista (3,313,828)
Net position at July 1, 2018, as restated $ 474,332,577
Statement of Revenues, Expenses and
Changes in Net Position
Proprietary Funds
Statement of Net Position
Required Supplementary
Information
129
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios During Measurement Period
Total Pension Liability
Measurement Total Pension Service Changes of
Period Liability - Beginning Cost Interest Benefit Terms
Miscellaneous Plan
2013–14¹292,931,044 $ 6,908,307 $ 21,793,340 $ -$
2014–15¹ 310,018,027 6,674,982 23,142,961 -
2015–16¹ 322,606,958 6,836,445 24,192,948 -
2016–17¹ 336,686,595 7,836,970 25,085,808 -
2017–18¹ 372,190,930 7,642,062 25,874,546 -
Safety Plan
2013–14¹227,568,288 $ 5,425,425 $ 16,876,220 $ -$
2014–15¹ 239,340,454 5,048,529 17,775,039 -
2015–16¹ 247,020,357 5,209,900 18,557,781 -
2016–17¹ 257,649,541 5,825,080 19,305,098 - 2017–18¹ 285,701,762 5,985,155 20,248,091 -
Plan Fiduciary Net Position
Plan Fiduciary Net
Measurement Net Position Contributions Contributions Investment
Period Beginning4 Employer Employee Income²
Miscellaneous Plan2013–14¹204,354,694 $ 8,004,157 $ 3,039,951 $ 35,526,156 $
2014–15¹ 239,310,294 8,434,882 2,703,715 5,362,753
2015–16¹ 242,447,633 9,562,926 2,833,466 1,330,196
2016–17¹ 241,681,934 14,677,334 2,820,046 26,893,994
2017–18¹ 270,386,079 22,114,923 3,005,761 22,720,698
Safety Plan
2013–14¹161,108,415 $ 6,141,746 $ 1,853,365 $ 27,905,516 $
2014–15¹ 186,479,563 6,491,856 1,726,785 4,107,305
2015–16¹ 187,329,833 6,836,098 1,933,363 990,545
2016–17¹ 184,778,552 12,379,181 1,922,500 20,385,351
2017–18¹ 206,161,081 8,675,370 2,169,504 17,250,148
¹ Historical information is required only for measurement periods for which GASB 68 is applicable.
² Net of administrative expenses.
3 During Fiscal Year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions
(GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for
participation in the State of California's agent OPEB plan. Accordingly, CalPERS recorded a one-time
expense as a result of the adoption of GASB 75.
Additionally, CalPERS employees participate in various State of California agent pension plans and
during Fiscal Year 2017-18, CalPERS recorded a correction to previously reported financial statements to
properly reflect its proportionate share of activity related to pensions in accordance with GASB
Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68).
4 Includes any beginning of year adjustment.
130
Difference Benefit Payments,
Between Expected Including Refunds Net Change in
and Actual Changes of of Employee Total Pension Total Pension
Experience Assumptions Contributions Liability Liability - Ending (a)
-$ -$ (11,614,664) $ 17,086,983 $ 310,018,027 $
1,300,520 (5,737,798) (12,791,734) 12,588,931 322,606,958 (2,605,228) - (14,344,528) 14,079,637 336,686,595
(3,079,012) 20,988,178 (15,327,609) 35,504,335 372,190,930
(3,023,977) (2,662,243) (16,887,970) 10,942,418 383,133,348
-$ -$ (10,529,479) $ 11,772,166 $ 239,340,454 $
638,786 (4,517,683) (11,264,768) 7,679,903 247,020,357 (941,378) - (12,197,119) 10,629,184 257,649,541
(705,417) 16,661,943 (13,034,483) 28,052,221 285,701,762 2,726,755 (1,332,336) (13,797,333) 13,830,332 299,532,094
Benefit Payments,Plan Net Pension
Including Refunds Other Changes Net Change Plan Fiduciary Liability/(Asset)
of Employee In Fiduciary in Fiduciary Net Position Ending
Contributions Net Position3 Net Position Ending (b)(a) - (b)
(11,614,664) $ -$ 34,955,600 $ 239,310,294 $ 70,707,733 $
(12,791,734) (572,277) 3,137,339 242,447,633 80,159,325
(14,344,528) (147,759) (765,699) 241,681,934 95,004,661
(15,327,609) (359,620) 28,704,145 270,386,079 101,804,851
(16,887,970) (1,218,072) 29,735,340 300,121,419 83,011,929
(10,529,479) $ -$ 25,371,148 $ 186,479,563 $ 52,860,891 $
(11,264,768) (210,908) 850,270 187,329,833 59,690,524
(12,197,119) (114,168) (2,551,281) 184,778,552 72,870,989
(13,034,483) (270,020) 21,382,529 206,161,081 79,540,681
(13,797,333) (935,892) 13,361,797 219,522,878 80,009,216
131
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios During Measurement Period (continued)
Plan Fiduciary Plan Net Pension
Net Position Liability/(Asset)
as a Percentage as a Percentage
Measurement of the Total Covered of Covered -
Period Liability Payroll PayrollMiscellaneous Plan
2013–14¹77.19%32,856,020 $ 215.20%2014–15¹75.15% 33,730,770 237.64%
2015–16¹71.78% 35,303,101 269.11%
2016–17¹72.65% 37,336,682 272.67%
2017–18¹78.33% 36,214,870 229.22%
Safety Plan 2013–14¹77.91%18,629,989 $ 283.74%
2014–15¹75.84% 18,020,162 331.24%
2015–16¹71.72% 18,658,097 390.56%
2016–17¹72.16% 19,072,985 417.03%2017–18¹73.29% 20,768,094 385.25%
Notes to Schedule:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan
changes which have occurred after June 30, 2016 valuation date. This applies for voluntary benefit
changes as well as any offers of two years additional service credit (a.k.a. Golden Handshakes).
Changes of Assumptions: In 2018, demographic assumptions and inflation rate were changed in accordance to the
CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no
changes in the discount rate. In 2017, the accounting discount rate reduced from 7.65 percent to
7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment
of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a
reduction for pension plan administration expense). In 2014, amounts reported were based on
the 7.5 percent discount rate.
132
Required Supplementary Information
Schedule of Plan Contributions¹
Contributions
in Relation to Contributions
Actuarially the Actuarially Contribution as a Percentage
Fiscal Year Determined Determined Deficiency Covered of Covered
Ending Contribution Contribution (Excess)Payroll Payroll
Miscellaneous Plan
06/30/14 8,004,157 $ (8,004,157) $ -$ 32,856,020 $ 24.36%
06/30/15 8,434,882 (8,434,882) - 33,730,770 25.01%
06/30/16 9,562,926 (9,562,926) - 35,303,101 27.09%
06/30/17 10,338,549 (14,677,334) (4,338,785) 37,336,682 39.31%06/30/18 11,083,979 (22,092,810) (11,008,831) 36,214,870 61.00%
06/30/19 11,954,252 (17,733,606) (5,779,354) 39,130,545 45.32%
Safety Plan
06/30/14 6,141,746 $ (6,141,746) $ -$ 18,629,989 $ 32.97%
06/30/15 6,491,856 (6,491,856) - 18,020,162 36.03%
06/30/16 6,836,098 (6,836,098) - 18,658,097 36.64%06/30/17 7,695,135 (12,379,181) (4,684,046) 19,072,985 64.90%
06/30/18 8,658,116 (8,658,116) - 20,768,094 41.69%06/30/19 8,899,136 (23,119,790) (14,220,654) 22,328,023 103.55%
¹ Historical information is required only for measurement periods for which GASB 68 is applicable.
Notes to Schedule:
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2018-19 were derived from the June 30, 2016 funding valuation reports.
Actuarial Cost Method Entry Age Normal
Amortization Method/Period For details, see June 30, 2015 Funding Valuation Report
Asset Valuation Method Market Value of Assets. For details, see June 30, 2015
Funding Valuation Report.
Inflation 2.75 percent
Salary Increases Varies by entry age and service.
Payroll Growth 3.00 percent
Investment Rate of Return 7.375 percent net of pension plan investment and
administrative expenses; includes inflation.
Retirement Age The probabilities of retirement are based on the 2014
CalPERS Experience Study for the period from 1997 to 2011.
Mortality The probabilities of mortality are based on the 2014
CalPERS Experience Study for the period from 1997 to 2011.
Pre-retirement and post-retirement mortality rates include
20 years of projected mortality improvement using Scale BB
published by the Society of Actuaries.
133
Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios During Measurement Period
Total OPEB Liability
Measurement Total OPEB Service Changes of
Period¹Liability - Beginning Cost Interest Benefit Terms
CMWD Plan
2016–17 4,041,120 $ 12,228 $ 274,428 $ -$
2017–18 4,061,904 12,595 275,029 -
City Plan
2016–17 11,102,453 $ 493,120 $ 789,709 $ -$ 2017–18 11,757,255 507,914 838,617 -
Plan Fiduciary Net Position
Plan Fiduciary NetMeasurementNet Position Contributions Contributions Investment
Period¹Beginning Employer Employee Income²
CMWD Plan2016–17 3,077,703 $ 133,108 $ -$ 323,290 $
2017–18 3,268,229 291,039 - 263,258
City Plan
2016–17 9,114,475 $ 614,664 $ -$ 958,197 $
2017–18 10,059,309 569,855 - 800,892
134
Difference Benefit Payments,
Between Expected Including Refunds Net Change in
and Actual Changes of of Employee Total OPEB Total OPEB
Experience Assumptions Contributions Liability Liability - Ending (a)
-$ -$ (265,872) $ 20,784 $ 4,061,904 $
- - (291,039) (3,415) 4,058,489
-$ -$ (628,027) $ 654,802 $ 11,757,255 $ - - (569,855) 776,676 12,533,931
Benefit Payments,Plan Net OPEB
Including Refunds Other Changes Net Change Plan Fiduciary Liability/(Asset)of Employee In Fiduciary in Fiduciary Net Position Ending
Contributions Net Position Net Position Ending (b)(a) - (b)
(265,872) $ -$ 190,526 $ 3,268,229 $ 793,675 $
(291,039) (6,071) 257,187 3,525,416 533,073
(628,027) $ -$ 944,834 $ 10,059,309 $ 1,697,946 $
(569,855) (18,664) 782,228 10,841,537 1,692,394
135
Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios During Measurement Period (continued)
Plan Fiduciary Plan Net OPEBNet Position Liability/(Asset)
as a Percentage Covered - as a Percentage
Measurement of the Total Employee of Covered -Period¹Liability Payroll Employee Payroll
CMWD Plan
2016–17 80.46%165,769 $ 478.78%2017–18 86.87%106,131 502.28%
City Plan 2016–17 85.56%54,645,089 $ 3.11%2017–18 86.50%55,473,250 3.05%
¹ Historical information is required only for measurement periods for which GASB 75 is applicable.² Net of administrative expenses.
136
Required Supplementary Information
Schedule of Plan Contributions¹
Contributions
in Relation to Contributions
Actuarially the Actuarially Contribution Covered -as a Percentage
Fiscal Year Determined Determined Deficiency Employee of Covered-
Ending2 Contribution Contribution (Excess)Payroll3 Employee Payroll
CMWD Plan
06/30/18 77,750 $ (291,039) $ (213,289) $ 106,131 $ 274.23%06/30/19 78,177 (268,096) (189,919) 64,872 413.27%
City Plan 06/30/18 692,943 $ (569,855) $ 123,088 $ 55,473,250 $ 1.03%
06/30/19 710,206 (710,206) - 61,393,696 1.16%
¹ Historical information is required only for measurement periods for which GASB 75 is applicable.
2 Represents the fiscal year ending for the measurement period.
3 Represents payroll for the following fiscal year end.
Notes to Schedule:
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2018-19 were derived from the June 30, 2017 funding valuation reports.
Actuarial Cost Method Entry Age Normal
Amortization Method/Period Level dollar over closed 30 year period
Inflation 2.75 percent
Salary Increases Varies by Entry Age and Service
Payroll Growth 3.00 percent
Investment Rate of Return 7.0 percent net of pension plan investment and
administrative expenses, including inflation
Retirement Age The probabilities of retirement are based on the
CalPERS Experience Study for the period from 1997 to 2015.
Mortality The probabilities of mortality are based on the
CalPERS Experience Study for the period from 1997 to 2015.
137
This
p
a
g
e is intentionally left blank.
138
Combining and Individual Fund
Statements and Schedules
139
Combining Balance SheetNonmajor Governmental Funds
June 30, 2019
Community
Affordable Development Financing
Housing Block Grant Donations Districts
Cash and investments 21,527,399 $ -$ 2,611,503 $ 8,181,379 $
Receivables:
Interest 105,214 - 13,098 41,050
Other - - 1,530 15,452
Accounts, net of allowances - - - 4,985
Due from other governments - 515,525 - -
Prepaid items - - - -
Land held for resale - 617,247 - -
Loan receivables, net of allowances 21,628,737 - - -
Total assets 43,261,350 $ 1,132,772 $ 2,626,131 $ 8,242,866 $
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accrued liabilities 94,305 $ 239,797 $ 93,307 $ 217,587 $
Due to other funds - 270,083 - -
Deposits payable - - - -
Advances from other funds - - - -
Unearned revenue - - - -
Total liabilities 94,305 509,880 93,307 217,587
Deferred inflows of resources:
Unavailable revenue - grants - - - -
Fund balances:
Nonspendable:
Prepaid items - - - -
Restricted:
Affordable housing 43,167,045 - - -
Lighting and landscaping districts - - - 8,025,279
Habitat and agricultural mitigation/preservation - - - -
Capital projects - - - -
General government - - - -
Public safety - - - -
Community services - 622,892 2,532,824 -
Total fund balances 43,167,045 622,892 2,532,824 8,025,279
Total liabilities, deferred inflows of
resources and fund balances 43,261,350 $ 1,132,772 $ 2,626,131 $ 8,242,866 $
ASSETS
Special Revenue Funds
140
Other Police
Habitat and Special Grants and Section 8 Tyler
Agricultural Revenue Asset Rental Court
Management Funds Forfeiture Assistance Apartments Totals
1,684,657 $ 796,101 $ 358,893 $ 319,108 $ 187,234 $ 35,666,274 $
8,541 3,991 2,299 - 505 174,698
- 77,716 - - 1,101 95,799
- - - 1,553 - 6,538
- - 107,028 - - 622,553
- - - - 992 992
- - - - - 617,247
- - - - - 21,628,737
1,693,198 $ 877,808 $ 468,220 $ 320,661 $ 189,832 $ 58,812,838 $
-$ 34,905 $ 31,274 $ 20,249 $ 29,695 $ 761,119 $
- - - - - 270,083
- - - 14,686 24,675 39,361
169,600 - - - - 169,600
- - - - - -
169,600 34,905 31,274 34,935 54,370 1,240,163
- - 107,028 - - 107,028
- - - - 992 992
- - - 285,726 134,470 43,587,241
- - - - - 8,025,279
1,523,598 - - - - 1,523,598
- - - - - -
- 842,903 - - - 842,903
- - 329,918 - - 329,918
- - - - - 3,155,716
1,523,598 842,903 329,918 285,726 135,462 57,465,647
1,693,198 $ 877,808 $ 468,220 $ 320,661 $ 189,832 $ 58,812,838 $
(continued)
Special Revenue Funds
141
Combining Balance SheetNonmajor Governmental Funds (continued)
June 30, 2019
Grants
Assessment Bridge and and Other
and Other Thoroughfare Gas Capital
Districts Districts Tax Project Funds
Cash and investments 3,368,498 $ 12,641,114 $ 14,615,864 $ 1,685,803 $
Receivables:
Interest 12,036 63,367 73,146 8,451
Other - - - -
Accounts, net of allowances - - - -
Due from other governments - - 375,138 -
Prepaid items - - - -
Land held for resale - - - -
Loan receivables, net of allowances - - - -
Total assets 3,380,534 $ 12,704,481 $ 15,064,148 $ 1,694,254 $
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accrued liabilities -$ -$ 319,635 $ 7,165 $
Due to other funds - - - -
Deposits payable 426,179 - - -
Advances from other funds - - - -
Unearned revenue - - 194,729 -
Total liabilities 426,179 - 514,364 7,165
Deferred inflows of resources:
Unavailable revenue - grants - - - -
Fund balances:
Nonspendable:
Prepaid items - - - -
Restricted:
Affordable, low and moderate income housing - - - -
Lighting and landscaping districts - - - -
Habitat and agricultural mitigation/preservation - - - -
Capital projects 2,954,355 12,704,481 14,549,784 1,687,089
General government - - - -
Public safety - - - -
Community services - - - -
Total fund balances 2,954,355 12,704,481 14,549,784 1,687,089
Total liabilities, deferred inflows of
resources and fund balances 3,380,534 $ 12,704,481 $ 15,064,148 $ 1,694,254 $
ASSETS
Capital Project Funds
142
Planned
Local Traffic Total Other
Drainage Sales Tax/Impact Governmental
Facilities TransNet Projects Totals Funds
5,948,993 $ 7,395,475 $ 22,636,773 $ 68,292,520 $ 103,958,794 $
29,825 37,182 113,635 337,642 512,340
- 95,699 - 95,699 191,498
- - - - 6,538
- 991 - 376,129 998,682
- - - - 992
- - - - 617,247
- - - - 21,628,737
5,978,818 $ 7,529,347 $ 22,750,408 $ 69,101,990 $ 127,914,828 $
77,712 $ 262,524 $ 59,511 $ 726,547 $ 1,487,666 $
- - - - 270,083
- - - 426,179 465,540
- - 1,943,710 1,943,710 2,113,310
- - - 194,729 194,729
77,712 262,524 2,003,221 3,291,165 4,531,328
- - - - 107,028
- - - - 992
- - - - 43,587,241
- - - - 8,025,279
- - - - 1,523,598
5,901,106 7,266,823 20,747,187 65,810,825 65,810,825
- - - - 842,903
- - - - 329,918
- - - - 3,155,716
5,901,106 7,266,823 20,747,187 65,810,825 123,276,472
5,978,818 $ 7,529,347 $ 22,750,408 $ 69,101,990 $ 127,914,828 $
Capital Project Funds
143
Combining Statement of Revenues, Expenditures and Changes in Fund BalancesNonmajor Governmental FundsFor the Year Ended June 30, 2019
Community
Affordable Development Financing
Housing Block Grant Donations Districts
Revenues:
Taxes -$ -$ -$ -$
Intergovernmental - 625,448 - -
Charges for services 30,687 - - 2,408,304
Fines and forfeitures - - - -
Income from property and investments 1,179,139 200,665 79,149 278,611
Contributions from property owners 734,556 - - -
Donations - - 1,384,386 -
Miscellaneous 492,876 - 14,998 18,564
Total revenues 2,437,258 826,113 1,478,533 2,705,479
Expenditures:
Current:
General government - - - -
Public safety - - - -
Community services 649,105 509,404 413,978 1,791,280
Public works - - - 970,630
Capital outlay - - 70,244 -
Debt service:
Interest and fiscal charges - - - -
Total expenditures 649,105 509,404 484,222 2,761,910
Excess (deficiency) of revenues
over (under) expenditures 1,788,153 316,709 994,311 (56,431)
Other financing sources (uses):
Transfers in 100,248 - - 775,000
Transfers out (55,000) - - -
Total other financing sources (uses)45,248 - - 775,000
Net change in fund balances 1,833,401 316,709 994,311 718,569
Fund balances at beginning of year 41,333,644 306,183 1,538,513 7,306,710
Fund balances at end of year 43,167,045 $ 622,892 $ 2,532,824 $ 8,025,279 $
Special Revenue Funds
144
Other Police
Habitat and Special Grants and Section 8 Tyler
Agricultural Revenue Asset Rental Court
Management Funds Forfeiture Assistance Apartments Totals
-$ -$ -$ -$ -$ -$
- - 808,269 7,494,252 - 8,927,969
- - - - 529,511 2,968,502
- - 41,771 - - 41,771
70,118 26,130 16,752 213 8,166 1,858,943
17,202 424,979 - - - 1,176,737
- - - - - 1,384,386
- - - 207,122 - 733,560
87,320 451,109 866,792 7,701,587 537,677 17,091,868
- 211,387 - - - 211,387
- - 302,424 - - 302,424
199,893 - - 7,479,465 405,789 11,448,914
- - - - - 970,630
- 59,262 527,044 - 54,531 711,081
3,637 - - - - 3,637
203,530 270,649 829,468 7,479,465 460,320 13,648,073
(116,210) 180,460 37,324 222,122 77,357 3,443,795
- - - 55,000 - 930,248
- - - - (100,248) (155,248)
- - - 55,000 (100,248) 775,000
(116,210) 180,460 37,324 277,122 (22,891) 4,218,795
1,639,808 662,443 292,594 8,604 158,353 53,246,852
1,523,598 $ 842,903 $ 329,918 $ 285,726 $ 135,462 $ 57,465,647 $
(continued)
Special Revenue Funds
145
Combining Statement of Revenues, Expenditures and Changes in Fund BalancesNonmajor Governmental Funds (continued)For the Year Ended June 30, 2019
Grants
Assessment Bridge and and Other
and Other Thoroughfare Gas Capital
Districts Districts Tax Project Funds
Revenues:
Taxes -$ -$ 4,468,867 $ -$
Intergovernmental - - 396,575 956,847
Charges for services - - - -
Fines and forfeitures - - - -
Income from property and investments 111,164 468,437 542,930 65,467
Contributions from property owners - 302,370 23,644 22,480
Donations - - - -
Miscellaneous - - - -
Total revenues 111,164 770,807 5,432,016 1,044,794
Expenditures:
Current:
General government 17 - - 46,100
Public safety - - - -
Community services - - - -
Public works - - 600,000 -
Capital outlay - - 3,441,492 47,005
Debt service:
Interest and fiscal charges - - - -
Total expenditures 17 - 4,041,492 93,105
Excess (deficiency) of revenues
over (under) expenditures 111,147 770,807 1,390,524 951,689
Other financing sources (uses):
Transfers in - - - -
Transfers out - - (10,000) -
Total other financing sources (uses)- - (10,000) -
Net change in fund balances 111,147 770,807 1,380,524 951,689
Fund balances at beginning of year 2,843,208 11,933,674 13,169,260 735,400
Fund balances at end of year 2,954,355 $ 12,704,481 $ 14,549,784 $ 1,687,089 $
Capital Project Funds
146
Planned
Local Traffic Total Other
Drainage Sales Tax/Impact Governmental
Facilities TransNet Projects Totals Funds
-$ -$ -$ 4,468,867 $ 4,468,867 $
22,895 2,404,331 - 3,780,648 12,708,617
- 1,117,214 - 1,117,214 4,085,716
- - - - 41,771
241,988 257,890 822,944 2,510,820 4,369,763
234,094 - 1,763,347 2,345,935 3,522,672
- - - - 1,384,386
- - - - 733,560
498,977 3,779,435 2,586,291 14,223,484 31,315,352
- 11,700 - 57,817 269,204
- - - - 302,424
- - - - 11,448,914
- - - 600,000 1,570,630
1,122,365 1,549,809 324,562 6,485,233 7,196,314
-
- - - - 3,637
1,122,365 1,561,509 324,562 7,143,050 20,791,123
(623,388) 2,217,926 2,261,729 7,080,434 10,524,229
- - - - 930,248
- - - (10,000) (165,248)
- - - (10,000) 765,000
(623,388) 2,217,926 2,261,729 7,070,434 11,289,229
6,524,494 5,048,897 18,485,458 58,740,391 111,987,243
5,901,106 $ 7,266,823 $ 20,747,187 $ 65,810,825 $ 123,276,472 $
Capital Project Funds
147
Combining Schedule of Revenues and ExpendituresBudget and Actual (Budgetary Basis)Special Revenue FundsYear Ended June 30, 2019
Actual
Amounts Variance
(Budgetary Over
Budget Basis)(Under)
Affordable Housing
Total revenues 1,434,000 $ 2,077,873 $ 643,873 $
Total expenditures 1,042,989 760,871 (282,118)
Net change in fund balance 391,011 1,317,002 925,991
Community Development Block Grant
Total revenues 412,500 822,037 409,537
Total expenditures 1,150,320 509,404 (640,916)
Net change in fund balance (737,820) 312,633 1,050,453
Donations
Total revenues 1,446,500 1,444,551 (1,949)
Total expenditures 1,105,585 519,116 (586,469)
Net change in fund balance 340,915 925,435 584,520
Financing Districts
Total revenues 3,331,500 2,571,924 (759,576)
Total expenditures 3,840,329 3,028,804 (811,525)
Net change in fund balance (508,829) (456,880) 51,949
Habitat and Agricultural Management
Total revenues 54,000 51,993 (2,007)
Total expenditures 270,348 203,530 (66,818)
Net change in fund balance (216,348) (151,537) 64,811
Other Special Revenue Funds
Total revenues 440,000 438,336 (1,664)
Total expenditures 507,778 430,051 (77,727)
Net change in fund balance (67,778) $ 8,285 $ 76,063 $
(continued)
148
Combining Schedule of Revenues and ExpendituresBudget and Actual (Budgetary Basis)Special Revenue Funds (continued)Year Ended June 30, 2019
Actual
Amounts Variance
(Budgetary Over
Budget Basis)(Under)
Police Grants and Asset Forfeiture
Total revenues 884,000 $ 858,178 $ (25,822) $
Total expenditures 1,007,909 932,712 (75,197)
Net change in fund balance (123,909) (74,534) 49,375
Section 8 Rental Assistance
Total revenues 7,575,000 7,701,490 126,490
Total expenditures 8,305,230 7,487,365 (817,865)
Net change in fund balance (730,230) 214,125 944,355
Totals
Total revenues 15,577,500 15,966,382 388,882
Total expenditures 17,230,488 13,871,853 (3,358,635)
Net change in fund balance (1,652,988) $ 2,094,529 $ 3,747,517 $
149
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Capital Project Funds
Year Ended June 30, 2019
Actual
Amounts Variance
(Budgetary Over
Budget Basis)(Under)
Parking-in-Lieu (Grants and Other Capital Project Funds)
Total revenues 44,500 $ 44,004 $ (496) $
Total expenditures 93,205 93,105 (100)
Net change in fund balance (48,705) $ (49,101) $ (396) $
150
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151
Combining Statement of Net PositionInternal Service FundsJune 30, 2019
Fleet Self-Insured
ASSETS Management Benefits
Current assets:
Cash and investments 19,207,775 $ 5,991,656 $
Receivables:
Interest 94,748 30,148
Accounts, net of allowances 6,602 -
Inventories 458,057 -
Prepaid items - -
Total current assets 19,767,182 6,021,804
Noncurrent assets:
Capital assets:
Machinery and equipment 24,897,028 -
Construction in progress - -
Intangible assets - -
Less accumulated depreciation (13,901,245) -
Total capital assets (net of accumulated depreciation 10,995,783 -
Total assets 30,762,965 6,021,804
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - OPEB related items 7,741 -
Deferred outflows of resources - pension related items 299,024 -
Total deferred outflows of resources 306,765 -
LIABILITIES
Current liabilities:
Accrued liabilities 628,229 4,101,538
Estimated claims payable - 20,000
Current portion of long-term debt - -
Total current liabilities 628,229 4,121,538
Noncurrent liabilities:
Deposits payable - -
Net OPEB liability 18,447 -
Net pension liability 1,220,276 -
Capital lease payable - -
Total noncurrent liabilities 1,238,723 -
1,866,952 4,121,538
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - OPEB related items 2,979 -
Deferred inflows of resources - pension related items 74,932 -
Total deferred inflows of resources 77,911 -
NET POSITION
Net investment in capital assets 10,995,783 -
Unrestricted 18,129,084 1,900,266
29,124,867 $ 1,900,266 $
Total liabilities
Total net position
152
Information Risk Workers’
Technology Management Compensation Total
7,167,089 $ 4,575,092 $ 12,161,248 $ 49,102,860 $
33,637 22,946 60,960 242,439
- - - 6,602
- - - 458,057
- - 184,106 184,106
7,200,726 4,598,038 12,406,314 49,994,064
5,370,566 - - 30,267,594
101,076 - - 101,076
1,689,637 - - 1,689,637
(5,121,898) - - (19,023,143)
2,039,381 - - 13,035,164
9,240,107 4,598,038 12,406,314 63,029,228
23,934 1,491 639 33,805
1,166,366 88,212 50,039 1,603,641
1,190,300 89,703 50,678 1,637,446
982,824 50,584 7,034 5,770,209
- 2,897,988 10,197,793 13,115,781
211,114 - - 211,114
1,193,938 2,948,572 10,204,827 19,097,104
- 1,000 - 1,000
57,034 3,554 1,524 80,559
4,681,873 340,349 207,530 6,450,028
147,952 - - 147,952
4,886,859 344,903 209,054 6,679,539
6,080,797 3,293,475 10,413,881 25,776,643
9,212 574 246 13,011
476,090 11,063 22,485 584,570
485,302 11,637 22,731 597,581
1,680,315 - - 12,676,098
2,183,993 1,382,629 2,020,380 25,616,352
3,864,308 $ 1,382,629 $ 2,020,380 $ 38,292,450 $
153
Combining Statement of Revenues, Expenses and Changes in Net PositionInternal Service FundsFor the Year Ended June 30, 2019
Fleet Self-Insured
Management Benefits
Operating revenues:
Other charges for services 5,043,320 $ 373,181 $
Miscellaneous 64,551 -
Total operating revenues 5,107,871 373,181
Operating expenses:
Depreciation 1,822,995 -
Fuel and supplies 1,403,148 -
Claims and premiums expense - 382,553
Small equipment purchases 16,986 -
General and administrative 1,296,843 -
Total operating expenses 4,539,972 382,553
Operating income (loss)567,899 (9,372)
Nonoperating revenues (expenses):
Income from property and investments 708,908 -
Interest expense - -
Gain (loss) on sale of property 25,601 -
Total nonoperating revenues (expenses)734,509 -
Income (loss) before transfers and
capital contributions 1,302,408 (9,372)
Transfers in - -
Capital contributions 350,693 -
Change in net position 1,653,101 (9,372)
Total net position at beginning of year 27,471,766 1,909,638
Total net position at end of year 29,124,867 $ 1,900,266 $
154
Information Risk Workers’
Technology Management Compensation Totals
11,352,800 $ 2,091,149 $ 3,004,370 $ 21,864,820 $
32,643 50,967 273,923 422,084
11,385,443 2,142,116 3,278,293 22,286,904
689,786 - - 2,512,781
- - - 1,403,148
- 1,759,733 5,269,988 7,412,274
1,769,349 - - 1,786,335
10,004,525 407,743 107,113 11,816,224
12,463,660 2,167,476 5,377,101 24,930,762
(1,078,217) (25,360) (2,098,808) (2,643,858)
271,211 153,651 451,433 1,585,203
(28,158) - - (28,158)
- - - 25,601
243,053 153,651 451,433 1,582,646
(835,164) 128,291 (1,647,375) (1,061,212)
- - 1,500,000 1,500,000
101,076 - - 451,769
(734,088) 128,291 (147,375) 890,557
4,598,396 1,254,338 2,167,755 37,401,893
3,864,308 $ 1,382,629 $ 2,020,380 $ 38,292,450 $
155
Combining Statement of Cash FlowsInternal Service FundsFor the Year Ended June 30, 2019
Fleet Self-Insured
Management Benefits
Cash flows from operating activities:
Receipts from customers and users 5,112,793 $ 343,033 $
Payments to suppliers (1,863,932) -
Payments to employees (849,455) -
Internal activity - payments to other funds (135,111) -
Claims and premiums paid - (334,467)
Net cash provided by (used in) operating activities 2,264,295 8,566
Cash flows from noncapital financing activities:
Operating subsidies and transfers (to) from other funds - -
Cash flows from capital and related financing activities:
Purchase of capital assets (1,693,172) -
Gross proceeds from the sale of capital assets 25,601 -
Principal paid on capital debt - -
Interest expense - -
Net cash provided by (used in) capital and related
financing activities (1,667,571) -
Cash flows from investing activities:
Interest on investments 692,896 -
Net increase (decrease) in cash and cash equivalents 1,289,620 8,566
Cash and cash equivalents at beginning of year 17,918,155 5,983,090
Cash and cash equivalents at end of year 19,207,775 $ 5,991,656 $
156
Information Risk Workers’
Technology Management Compensation Total
11,385,446 $ 2,142,116 $ 2,898,890 $ 21,882,278 $
(7,377,110) (129,902) (9,765) (9,380,709)
(4,368,633) (271,433) (138,763) (5,628,284)
(74,551) (22,610) (2,030) (234,302)
- (1,242,144) (3,318,045) (4,894,656)
(434,848) 476,027 (569,713) 1,744,327
- - 1,500,000 1,500,000
(199,741) - - (1,892,913)
- - - 25,601
(198,810) - - (198,810)
(28,158) - - (28,158)
(426,709) - - (2,094,280)
271,014 148,070 438,059 1,550,039
(590,543) 624,097 1,368,346 2,700,086
7,757,632 3,950,995 10,792,902 46,402,774
7,167,089 $ 4,575,092 $ 12,161,248 $ 49,102,860 $
(continued)
157
Combining Statement of Cash FlowsInternal Service Funds (continued)For the Year Ended June 30, 2019
Fleet Self-Insured
Management Benefits
Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities:
Operating income (loss)567,899 $ (9,372) $
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization 1,822,995 -
Other non-operating revenues and expenses - (30,148)
Change in assets and liabilities:
(Increase) decrease in receivables 4,922 -
(Increase) in inventories (61,635) -
(Increase) in prepaid items - -
(Increase) in deferred outflows - OPEB related items (1,529) -
(Increase) in deferred outflows - pension related items 126,300 -
Increase (decrease) in accrued liabilities 74,416 130,253
Increase (decrease) in estimated claims payable - (82,167)
Increase (decrease) in net OPEB liability (61) -
Increase (decrease) in net pension liability (276,256) -
Increase (decrease) in deferred inflows - OPEB related items 139 -
Increase (decrease) in deferred inflows - pension related items 7,105 -
Net cash provided by (used in) operating activities 2,264,295 $ 8,566 $
Noncash capital financing activities:
Capital assets contributed by other funds 350,693 $ -$
158
Information Risk Workers’
Technology Management Compensation Total
(1,078,217) $ (25,360) $ (2,098,808) $ (2,643,858) $
689,786 - - 2,512,781
- - - (30,148)
- - - 4,922
- - - (61,635)
- - (184,106) (184,106)
(4,730) (295) (126) (6,680)
527,603 55,469 21,209 730,581
413,643 (60,372) (9,029) 548,911
- 575,871 1,756,646 2,250,350
(187) (12) (4) (264)
(1,059,921) (77,051) (46,982) (1,460,210)
430 27 11 607
76,745 7,750 (8,524) 83,076
(434,848) $ 476,027 $ (569,713) $ 1,744,327 $
101,076 $ -$ -$ 451,769 $
159
Combining Statement of Changes in Assets and LiabilitiesAgency FundsFor the Year Ended June 30, 2019
Contractors’ and Miscellaneous Deposits
Balance Balance
ASSETS July 1, 2018 Additions Deductions June 30, 2019
Current assets:
Cash and investments 14,599,174 $ 58,203,828 $ 56,499,715 $ 16,303,287 $
Receivables:
Interest 60,735 81,653 60,735 81,653
Taxes - 37 37 -
Other 17,572 5,110 22,682 -
Prepaid items 2,639 - 2,639 -
Total current assets 14,680,120 $ 58,290,628 $ 56,585,808 $ 16,384,940 $
LIABILITIES
Accrued liabilities 811,759 $ 59,413,818 $ 58,889,837 $ 1,335,740 $
Deposits held for others 13,868,361 5,632,361 4,451,522 15,049,200
Total liabilities 14,680,120 $ 65,046,179 $ 63,341,359 $ 16,384,940 $
Assessment Districts
Balance Balance
ASSETS July 1, 2018 Additions Deductions June 30, 2019
Current assets:
Cash and investments 6,587,811 $ 6,425,740 $ 8,348,739 $ 4,664,812 $
Receivables:
Interest 78,951 53,753 78,952 53,752
Taxes 4,030 4,464 4,030 4,464
Other 17,360 22,406 17,360 22,406
Total current assets 6,688,152 6,506,363 8,449,081 4,745,434
Restricted assets:
Cash and investments 5,124,822 - 664,418 4,460,404
Total restricted assets 5,124,822 - 664,418 4,460,404
Total assets 11,812,974 $ 6,506,363 $ 9,113,499 $ 9,205,838 $
LIABILITIES
Accrued liabilities 52,724 $ 51,961 $ 75,123 $ 29,562 $
Deposits held for others 11,760,250 5,908,700 8,492,674 9,176,276
Total liabilities 11,812,974 $ 5,960,661 $ 8,567,797 $ 9,205,838 $
(continued)
160
Combining Statement of Changes in Assets and LiabilitiesAgency Funds (continued)For the Year Ended June 30, 2019
Total Agency Funds
Balance Balance
ASSETS July 1, 2018 Additions Deductions June 30, 2019
Current assets:
Cash and investments 21,186,985 $ 64,629,568 $ 64,848,454 $ 20,968,099 $
Receivables:
Interest 139,686 135,406 139,687 135,405
Taxes 4,030 4,501 4,067 4,464
Other 34,932 27,516 40,042 22,406
Prepaid items 2,639 - 2,639 -
Total current assets 21,368,272 64,796,991 65,034,889 21,130,374
Restricted assets:
Cash and investments 5,124,822 - 664,418 4,460,404
Total current assets 5,124,822 - 664,418 4,460,404
Total assets 26,493,094 $ 64,796,991 $ 65,699,307 $ 25,590,778 $
LIABILITIES
Accrued liabilities 864,483 $ 59,465,779 $ 58,964,960 $ 1,365,302 $
Deposits held for others 25,628,611 11,541,061 12,944,196 24,225,476
Total liabilities 26,493,094 $ 71,006,840 $ 71,909,156 $ 25,590,778 $
161
Statement of Fiduciary Net PositionPrivate Purpose Trust FundJune 30, 2019
Redevelopment
Obligation
Retirement
ASSETS Trust Fund
Current assets:
Cash and investments 1,289,292 $
Receivables:
Interest 18,837
Total current assets 1,308,129
Noncurrent assets:
Loans receivable 3,750,000
Total assets 5,058,129
LIABILITIES
Current liabilities:
Accrued liabilities 2,598
Accrued interest payable 79,718
Current portion of long-term debt 815,000
Total current liabilities 897,316
Noncurrent liabilities:
Due to the City of Carlsbad 7,255,238
Tax allocation bonds payable 3,705,000
Total noncurrent liabilities 10,960,238
Total liabilities 11,857,554
NET POSITION
Held in trust for redevelopment
obligation retirement purposes (6,799,425) $
162
Changes in Fiduciary Net PositionPrivate Purpose Trust FundFor the Year Ended June 30, 2019
Redevelopment
Retirement
Obligation
ADDITIONS Trust Fund
Contributions:
Redevelopment Property Tax Trust Fund (RPTTF) revenues 3,637,680 $
Income from property and investments 87,708
Total additions 3,725,388
DEDUCTIONS
General and administrative 625,813
Interest expense and fees 368,753
Total deductions 994,566
Change in net position 2,730,822
Total net position (deficit) at beginning of year (9,530,247)
Total net position (deficit) at end of year (6,799,425) $
163
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164
Statistical Section
Statistical Section
Statistical SectionStatistical Section
165
Statistical Section
This section of the City of Carlsbad’s Comprehensive Annual Financial Report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the city’s overall financial health.
Table of Contents Page
Financial Trends 166
These schedules contain trend information to help the reader understand how the city’s financial
performance and well-being have changed over time.
Revenue Capacity 176
These schedules contain information to help the reader assess the city’s water and wastewater revenue sources as well as the city’s most significant local revenue source, property taxes.
Debt Capacity 184
These schedules present information to help the reader assess the affordability of the city’s current levels
of outstanding debt, and the city’s ability to issue additional debt in the future.
Demographic and Economic Information 194
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the city’s financial activities take place.
Operating Information 198
These schedules contain service and infrastructure data to help the reader understand how the
information in the city’s financial report relates to the services the city provides and the activities it
performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual
Financial Reports for the relevant year.
Net Position by Component
Last Ten Fiscal Years
(dollars in thousands)
2010 2011 2012 2013
Governmental activities
Net investment in capital assets 767,719$ 774,269$ 780,727$ 782,500$
Restricted for:
Capital assets 178,669 184,419 192,713 182,685
Lighting and landscaping districts 2,827 2,133 2,246 2,958
Affordable housing 36,187 40,005 38,434 37,390
Habitat and agricultural mitigation management 6,600 5,377 4,799 2,665
Other purposes 2,710 5,298 4,022 3,685
Unrestricted 279,737 284,825 308,470 (1)319,317
Total governmental activities net position 1,274,449$ 1,296,326$ 1,331,411$ 1,331,200$
Business-type activities
Net investment in capital assets 317,238$ 314,691$ 311,392$ 307,000$
Restricted for:
Capital assets 44,241 44,954 45,522 45,990
Unrestricted 34,556 38,278 47,530 55,758
Total business-type activities net position 396,035$ 397,923$ 404,444$ 408,748$
Total government
Net investment in capital assets 1,084,957$ 1,088,960$ 1,092,119$ 1,089,500$
Restricted for:
Capital assets 222,910 229,373 238,235 228,675
Lighting and landscaping districts 2,827 2,133 2,246 2,958
Affordable housing 36,187 40,005 38,434 37,390
Habitat and agricultural mitigation management 6,600 5,377 4,799 2,665
Other purposes 2,710 5,298 4,022 3,685
Unrestricted 314,293 323,103 356,000 375,075
Total net position 1,670,484$ 1,694,249$ 1,735,855$ 1,739,948$
Source: City of Carlsbad Comprehensive Annual Financial Reports
(1) The significant increase in FY 2011-12 is due to the dissolution of the city's Redevelopment Agency which created a large
extraordinary gain for the year.
(2) Net position for the prior year was restated in FY 2014-15, to reflect the application of GASB 68.
166
2014 2015 2016 2017 2018 2019
784,210$ 783,298$ 788,035$ 788,078$ 793,090$ 786,965$
175,468 178,228 176,279 183,245 182,811 194,434
4,703 5,263 5,921 6,527 7,307 8,025
39,317 39,544 40,390 40,528 41,500 43,588
1,713 1,708 1,758 1,805 1,640 1,524
3,774 3,059 2,948 2,818 2,800 4,329
328,602 223,522 245,078 249,816 262,023 289,000
1,337,787$ (2)1,234,622$ (2)1,260,409$ 1,272,817$ 1,291,171$ 1,327,865$
305,681$ 307,122$ 317,927$ 344,836$ 349,548$ 346,628$
46,632 47,315 45,950 40,098 39,522 38,540
66,083 69,922 73,285 85,153 88,576 97,509
418,396$ (2)424,359$ (2)437,162$ 470,087$ 477,646$ 482,677$
1,089,891$ 1,090,420$ 1,105,962$ 1,132,914$ 1,142,638$ 1,133,593$
222,100 225,543 222,229 223,343 222,333 232,974
4,703 5,263 5,921 6,527 7,307 8,025
39,317 39,544 40,390 40,528 41,500 43,588
1,713 1,708 1,758 1,805 1,640 1,524
3,774 3,059 2,948 2,818 2,800 4,329
394,685 293,444 318,363 334,969 350,599 386,509
1,756,183$ 1,658,981$ 1,697,571$ 1,742,904$ 1,768,817$ 1,810,542$
167
Changes in Net Position
Last Ten Fiscal Years
(dollars in thousands)
2010 2011 2012 2013
Expenses
Governmental activities
General government 23,038$ (1)16,907$ 16,675$ 23,574$ (4)
Public safety 44,371 45,011 45,576 48,468
Community services 37,675 42,179 43,087 47,900 (5)
Public works 35,383 25,759 28,441 36,806
Interest and fiscal charges on long-term debt 547 453 298 4
Total governmental activities 141,014 130,309 134,077 156,752
Business-type activities
Carlsbad Municipal Water District 33,923 34,978 35,985 41,626
Golf course 11,927 11,538 11,190 10,668
Wastewater 10,434 11,751 11,330 13,556
Solid waste 2,535 2,565 2,922 2,918
Total business-type activities 58,819 60,832 61,427 68,768
Total government 199,833$ 191,141$ 195,504$ 225,520$
Program Revenues
Governmental activities
Charges for services:
General government 341$ 1,793$ 315$ 1,469$
Public safety 4,358 4,502 4,379 4,025
Community services 6,199 7,266 6,314 6,987
Public works 4,196 3,567 3,717 5,073
Operating grants and contributions 11,445 12,033 11,813 13,199
Capital grants and contributions 32,459 13,557 15,429 17,741
Total governmental activities 58,998 42,718 41,967 48,494
Business-type activities
Charges for services:
Carlsbad Municipal Water District 29,865 30,715 35,776 44,240 (6)
Golf course 5,625 5,850 6,127 6,278
Wastewater 9,580 10,053 10,989 12,402
Solid waste 2,988 3,015 2,961 3,060
Operating grants and contributions 1,734 1,263 1,201 38
Capital grants and contributions 17,882 5,640 4,560 2,855
Total business-type activities 67,674 56,536 61,614 68,873
Total government 126,672$ 99,254$ 103,581$ 117,367$
Net (Expense)/Revenue:
Governmental activities (82,016)$ (87,591)$ (92,110)$ (108,258)$
Business-type activities 8,855 (4,296) 187 105
Total government net expense (73,161)$ (91,887)$ (91,923)$ (108,153)$
168
2014 2015 2016 2017 2018 2019
20,187$ 16,108$ 16,147$ 18,374$ 25,192$ (11)22,234$
48,942 48,856 50,463 55,994 62,630 (11)67,968
45,341 48,630 51,191 54,212 51,897 57,978
30,314 36,273 37,464 34,317 36,875 36,897
1 - 1 3 2 4
144,785 149,867 155,266 162,900 176,596 185,081
43,547 40,897 39,458 45,219 51,658 51,638
11,032 10,538 10,545 10,211 10,560 11,035
12,488 12,629 12,613 12,626 13,495 15,238
2,856 2,973 2,997 3,272 3,089 3,840
69,923 67,037 65,613 71,328 78,802 81,751
214,708$ 216,904$ 220,879$ 234,228$ 255,398$ 266,832$
289$ 1,382$ 296$ 327$ 816$ 1,679$
3,950 4,220 3,980 4,647 4,805 4,784
8,732 10,534 10,711 12,154 11,588 10,755
3,720 4,014 4,152 3,952 3,768 4,574
11,919 12,242 11,912 12,630 13,054 17,307
16,129 19,105 12,042 (8)22,789 22,993 13,842
44,739 51,497 43,093 56,499 57,024 52,941
46,750 47,461 39,854 (9)44,817 50,095 46,431
6,635 6,709 6,988 7,119 7,973 7,979
12,896 12,875 12,963 13,467 13,885 14,099
3,320 3,245 3,206 3,302 3,427 3,440
90 59 5,646 2,471 1,611 1,260
3,198 5,879 2,011 13,322 5,484 4,864
72,889 76,228 70,668 84,498 82,475 78,073
117,628$ 127,725$ 113,761$ 140,997$ 139,499$ 131,014$
(100,046)$ (98,370)$ (112,173)$ (106,401)$ (119,572)$ (132,140)$
2,966 9,191 5,055 13,170 3,673 (3,678)
(97,080)$ (89,179)$ (107,118)$ (93,231)$ (115,899)$ (135,818)$
(continued)
169
Changes in Net Position (continued)
Last Ten Fiscal Years
(dollars in thousands)
2010 2011 2012 2013
General Revenues and Other Changes in Net Position
Governmental activities
Taxes:
Property taxes 55,113$ 54,049$ 51,538$ 52,861$
Sales and use taxes 23,031 25,660 28,094 28,403
Transient occupancy taxes 11,490 11,569 12,872 14,702
Franchise taxes 4,906 4,650 4,852 5,118
Business license taxes 3,458 3,581 2,695 3,834
Real property transfer taxes 758 911 925 1,058
Vehicle license fees 309 483 53 (2)55
Income from property and investments 12,523 8,372 6,088 1,792
Other general revenues 391 328 419 426
Extraordinary gain/(loss)- - 20,477 (3)-
Transfers (443) (135) (1,810) (656)
Total governmental activities 111,536 109,468 126,203 107,593
Business type activities
Property taxes 2,822 2,779 2,721 2,904
Income from property and investments 3,686 2,109 2,054 555
Other general revenues 153 3,599 106 85
Transfers 443 135 1,810 655
Total business-type activities 7,104 8,622 6,691 4,199
Total government 118,640$ 118,090$ 132,894$ 111,792$
Change in Net Position
Governmental activities 29,520$ 21,877$ 34,093$ (665)$
Business-type activities 15,959 4,326 6,878 4,304
Total government 45,479$ 26,203$ 40,971$ 3,639$
Source: City of Carlsbad Comprehensive Annual Financial Reports
(1) The large increase in general government expenses in FY 2009-10 is primarily a result of a refund of over $10 million in excess
development fees paid by Rancho Santa Fe Road property owners.
(2) The State of California ceased sending the city vehicle license fee revenues in FY 2011-12.
(3) The extraordinary gain in FY 2011-12 resulted from the transfers of the assets and liabilities of the former Redevelopment Agency to
Successor Agency trust funds.
(4) The large increase in FY 2012-13 includes a repayment to SANDAG of $1.4 million in excess Transnet Funds on inactive/closed
projects and a transfer of $4.5 million in surplus construction funds from the Poinsettia Lane Assessment District to be used in the
refunding of Reassessment District No. 2012-1.
(5) The large increase in FY 2012-13 includes a $3.8 million transfer of an affordable housing loan receivable to the Successor Housing
Agency trust fund as required by the California Department of Finance.
(6) The increase in FY 2012-13 was the result of a combination of a five percent increase in the number of water units sold coupled with
an average eight percent increase in water rates charged to customers and a reimbursement from a lawsuit involving a landslide.
(7) The extraordinary loss in FY 2013-14 resulted from the restatement of accrued interest on prior year advances made by the city to
the Successor Housing Agency per California state mandate.
(8) The decrease in FY 2015-16 was a result of one-time funds received from the federal government in the previous fiscal year for the
2014 Poinsettia Fire, as well as the receipt of retroactive mandated cost reimbursements.
(9) The decrease in FY 2015-16 was a result of a decrease in water sales during the fiscal year from drought conservation measures.
(10) The increase in FY 2015-16 is a result of higher cash balances that generate interest, an increase in investment earnings, and
interest received from the California Department of Finance earned on unpaid mandated costs.
(11) The increase in FY 2017-18 is mainly due to changes in the city's pension discount rate.
170
2014 2015 2016 2017 2018 2019
52,608$ 55,992$ 58,945$ 63,988$ 66,524$ 69,952$
30,520 32,146 34,843 33,999 33,674 38,510
17,472 19,713 20,943 22,267 24,233 26,320
4,907 5,427 5,632 5,475 5,812 6,100
4,177 4,548 4,895 4,328 5,026 5,322
1,080 1,406 1,546 1,393 1,463 1,715
- - - - - -
6,917 4,564 11,910 (10)1,975 2,551 20,695
429 609 486 451 519 439
(10,289) (7)- - - - -
(1,188) (1,264) (1,240) (15,067) (136) (219)
106,633 123,141 137,960 118,809 139,666 168,834
2,897 3,133 3,306 3,569 3,743 4,002
2,498 1,870 3,163 749 986 7,784
99 623 39 370 3 113
1,188 1,264 1,240 15,067 136 219
6,682 6,890 7,748 19,755 4,868 12,118
113,315$ 130,031$ 145,708$ 138,564$ 144,534$ 180,952$
6,587$ 24,771$ 25,787$ 12,408$ 20,094$ 36,694$
9,648 16,081 12,803 32,925 8,541 8,440
16,235$ 40,852$ 38,590$ 45,333$ 28,635$ 45,134$
171
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
2010 2011 (2)2012 2013
General Fund
Reserved 59,586$ -$ -$ -$
Unreserved 68,935 - - -
Nonspendable - 53,943 54,228 57,719
Restricted - - - -
Committed - 1,000 1,000 1,000
Assigned - 23,584 22,955 26,200
Unassigned - 57,533 61,384 69,578
Total General Fund 128,521$ 136,060$ 139,567$ 154,497$
All Other Governmental Funds
Reserved 50,617$ -$ -$ -$
Unreserved, reported in:
Special revenue funds 41,449 - - -
Debt service funds (17,824) - - -
Capital project funds 262,612 (1)- - -
Nonspendable
Special revenue funds - 433 440 435
Debt service funds - - - -
Capital project funds - 250 - -
Restricted
Special revenue funds - 65,585 64,401 61,938
Debt service funds - - - -
Capital project funds - 171,214 177,372 167,009 (4)
Committed
Special revenue funds - - - -
Debt service funds - - - -
Capital project funds - - - -
Assigned
Special revenue funds - - - -
Debt service funds - - - -
Capital project funds - 123,473 123,465 121,861
Unassigned
Special revenue funds - - - -
Debt service funds - (18,658) - (3)-
Capital project funds - - - -
Total all other governmental funds 336,854$ 342,297$ 365,678$ 351,243$
Source: City of Carlsbad Comprehensive Annual Financial Reports
(1) The large decrease in FY 2009-10 in the unreserved fund balance in the capital project funds is primarily a result of
a refund of over $10 million in excess development fees paid by Rancho Santa Fe Road property owners.
(2) GASB 54, which requires changes in the reporting categories for fund balances, was implemented in FY 2010-11.
(3) AB1x26 and AB 1484 were implemented in FY 2011-12. The former Redevelopment Agency debt service funds were
transferred to trust funds.
(4) The large decreases in the restricted fund balance in the capital projects fund is a result of increased expenditures
during FY 2012-13 and 2013-14 for the construction of Alga Norte Community Park.
(5) Beginning in FY 2015-16, the Gas Tax fund balance was reclassified from a Special Revenue fund to a Capital Project
fund.
172
2014 2015 2016 2017 2018 2019
-$ -$ -$ -$ -$ -$
- - - - - -
56,707 56,381 55,324 53,751 51,628 49,608
- - - - - -
1,000 1,000 1,000 1,000 1,000 1,000
27,838 40,865 42,692 38,439 43,855 33,367
75,615 80,274 94,404 78,191 82,570 101,701
161,160$ 178,520$ 193,420$ 171,381$ 179,053$ 185,676$
-$ -$ -$ -$ -$ -$
- - - - - -
- - - - - -
- - - - - -
430 3 4 1 1 1
- - - - - -
- - - - - -
66,833 66,300 51,013 (5)51,677 53,246 57,465
- - - - - -
157,712 (4)161,499 176,280 (5)183,245 182,812 194,434
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
131,627 136,237 131,939 146,994 151,306 162,139
- - - - - -
- - - - - -
- - - - - -
356,602$ 364,039$ 359,236$ 381,917$ 387,365$ 414,039$
173
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
2010 2011 2012 2013
Revenues:
Taxes 100,249$ 103,660$ 105,595$ 109,447$
Intergovernmental 12,108 12,847 9,603 11,513
Licenses and permits 1,484 1,590 1,852 2,016
Charges for services 10,215 9,938 10,092 10,261
Fines and forfeitures 1,199 1,051 892 861
Income from property and investments 12,719 9,278 6,253 2,362
Contributions from property owners 4,580 5,473 9,927 12,029
Donations 203 310 206 411
Miscellaneous 1,263 2,521 697 1,969
Total revenues 144,020 146,668 145,117 150,869
Expenditures:
Current:
General government 22,778 16,937 16,992 23,072
Less: Interdepartmental charges (3,991) (3,015) (3,750) (3,858)
Public safety 44,686 44,157 44,915 46,162
Community services 34,765 39,540 40,402 40,899
Public works 23,851 13,078 11,773 11,299
Capital outlay 19,727 20,985 17,367 28,602
Debt service:
Principal retirement 490 515 851 316
Interest and fiscal charges 1,016 935 308 6
Total expenditures 143,322 133,132 128,858 146,498
Excess (deficiency) of revenues
over (under) expenditures 698 13,536 16,259 4,371
Other financing sources (uses):
Proceeds from the sale of property - - - -
Issuance of debt - 581 - -
Transfers in 21,837 9,802 19,887 8,087
Transfers out (22,578) (10,937) (23,097) (14,792)
Extraordinary gain (loss)- - 12,847 (2) -
Total other financing sources (uses)(741) (554) 9,637 (6,705)
Net change in fund balances (43)$ 12,982$ 25,896$ (2,334)$
Debt service as percentage of noncapital
expenditures (1)1.18%1.26%0.99%0.24%
Source: City of Carlsbad Comprehensive Annual Financial Reports
(1) Noncapital expenditures are total expenditures less capital outlay (to the extent capitalized for the Government-wideStatement of Net Position) and expenditures for capitalized assets included within the functional expenditure categories.
(2) With the dissolution of Redevelopment Agencies state-wide, the former Redevelopment Agency debt service funds were
transferred to trust funds in FY 2011-12.
(3) Increase in taxes in FY 2014-15 due to growth in property and TOT taxes.
(4) Includes a transfer out to the Golf Course Fund in the amount of $14.8 million for the defeasance of the golf course
construction bonds during FY 2016-17.
(5) Increase in investment income for FY 2018-19 is due to an increase in the average yield on the investment portfolio
for the year as well as an increase due to the fair value adjustment done on investments at fiscal year end (per GASB 31).
(6) Increase in public safety expenditures in FY 2018-19 is due to a voluntary $14.2M additional payment to CalPERS
to reduce the city's unfunded pension liability in the safety plan.
174
2014 2015 2016 2017 2018 2019
114,996$ 123,411$ (3) 129,617$ 134,165$ 141,118$ 154,673$
10,602 10,359 11,290 11,963 11,608 14,647
2,184 2,369 2,467 3,034 2,999 2,668
11,278 13,181 12,913 14,309 14,145 13,221
876 837 854 740 679 581
7,604 6,442 9,970 3,845 4,622 23,275 (5)
9,042 10,688 8,009 13,330 12,898 10,301
210 440 417 349 332 1,385
1,219 2,550 1,503 1,467 1,991 3,316
158,011 170,277 177,040 183,202 190,392 224,067
21,471 17,903 17,221 27,925 26,625 24,033
(3,566) (3,807) (3,471) (3,345) (3,160) (4,581)
47,333 48,915 52,015 57,329 58,568 77,550 (6)
41,505 44,501 46,298 48,930 49,039 52,951
15,442 16,350 17,465 17,349 17,220 18,380
18,702 20,050 34,669 17,603 26,885 20,703
159 - - - 10 10
5 5 6 5 7 5
141,051 143,917 164,203 165,796 175,194 189,051
16,960 26,360 12,837 17,406 15,198 35,016
- - - - - -
- - - - - -
11,477 14,857 9,970 20,849 11,513 11,881
(16,415) (16,420) (12,710) (37,613) (4)(13,590) (13,600)
- - - - - -
(4,938) (1,563) (2,740) (16,764) (2,077) (1,719)
12,022$ 24,797$ 10,097$ 642$ 13,121$ 33,297$
0.13%0.00%0.00%0.00%0.01%0.01%
175
General Governmental Tax Revenues by Source
Last Ten Fiscal Years
(dollars in thousands)
Fiscal
Year
Property
Tax *
Sales and
Use Taxes
Transient
Occupancy
Taxes
Franchise
Taxes
Business
License
Taxes
Real
Property
Transfer
Taxes Gas Tax
Total Tax
Revenue
2010 55,113$ 22,819$ 11,490$ 4,906$ 3,458$ 758$ 1,704$ 100,248$
2011 54,049 26,386 11,569 4,650 3,581 911 2,514 103,660
2012 51,538 (1)28,733 (2)12,872 (2)4,852 3,669 925 3,006 (3)105,595
2013 52,888 29,301 14,702 (4)5,118 3,834 1,058 2,546 109,447
2014 52,607 31,464 17,472 (4)4,907 4,178 1,080 3,288 114,996
2015 55,992 (5)33,202 19,713 (6)5,427 4,548 1,406 3,123 123,411
2016 58,946 35,232 20,943 5,632 4,895 1,545 2,424 129,617
2017 63,988 (5)34,543 22,267 (7)5,475 4,328 1,393 2,171 134,165
2018 66,523 34,972 24,234 (8)5,812 5,026 (9)1,463 3,088 (10)141,118
2019 69,952 40,795 (11)26,320 6,100 5,322 1,715 4,469 154,673
Change
2010-2019 27%79%129%24%54%126%162%54%
(1) Primarily the result of commercial and industrial property reassessments and lower amounts received from delinquent taxes. Beginning
February 1, 2012, tax increment revenue from the former Redevelopment Agency is recorded in the Successor Agency Trust Fund.
(2) Reflects improvement in the economy.
(3) The large increases are due to state Section 2103 allocations which became effective in FY 2011 to allocate funds from a motor vehicle fuel
excise tax that replaced previous city and county allocations from the Proposition 42 sales tax on gasoline.
(4) The increase in TOT in FY 2013 and FY 2014 is due to the opening of two new hotels and higher occupancy and room rates citywide.
(5) Reflects improvement in the housing market and new construction.
(6) The increase in TOT in FY 2015 is due to the openings of several new hotels and higher occupancy and room rates throughout the city.
(7) The increase in TOT in FY 2017 is due to higher room rates throughout most of the city's hotels and an increase in available rooms.
(8) The increase in TOT in FY 2018 is due to higher room rates throughout most of the city's hotels and an opening of a new hotel.
(9) The increase in Business License Taxes in FY 2018 is due to a significant number of delinquent payments being collected.
(10) The increase in Gas Taxes in FY 2018 is due to new ongoing allocations received from the state's Road Maintenance and Rehabilitation Account.
(11) The increase in Sales and Use Taxes in FY 2019 is due to overall growth and the ending of the state's sales and use tax "triple flip" in FY 2018.
* Includes Vehicle License Fees (VLF) in lieu, property tax increment, low/moderate housing, set aside taxes and CFD No. 1 special taxes.
Source: City of Carlsbad Comprehensive Annual Financial Reports
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Total General Governmental Tax Revenues -Last Ten Fiscal Years
(in thousands)
Property Tax Sales and Use Taxes TOT Other
Fiscal Year
176
Water and Wastewater Rates
Last Ten Fiscal Years
Wastewater
Fiscal Year
Base Price Per
Unit (1)
Monthly Base
Rate
2010 $16.78 $2.29 $20.93
2011 18.00 2.70 23.03
2012 19.80 2.97 24.53
2013 21.38 3.20 25.02
2014 20.07 3.19 25.52
2015 21.08 3.35 26.03
2016 22.19 3.53 27.81
2017 24.11 3.84 27.81
2018 24.72 3.94 27.81
2019 24.72 3.94 27.81
Source: City of Carlsbad
Note: Rates shown are for a 5/8" meter, which is the standard household meter size.
(1) One unit of water equals 748 gallons. The base price shown is for tier 1,
which applies to the first 12 units of usage per month at a single family residence.
Water
Monthly Delivery
Charge
177
Assessed Value of Taxable Property
Last Ten Fiscal Years
(dollars in millions)
Fiscal
Year
Residential
Property
Commercial
Property
Industrial
Property
Exemptions
and Other
Taxable
Property (1)
Net
Assessed
Valuation
Change
From Prior
Year
Estimated
Property Tax
Revenue (2)
Total Direct
Tax Rate (3)
2010 $17,086 $3,340 $2,192 $617 $23,235 -1.20%$45 0.1927%
2011 16,946 3,355 2,111 601 23,013 -0.96%44 0.1927%
2012 17,306 3,133 1,983 560 22,982 -0.13%44 0.1927%
2013 17,222 3,237 1,884 614 22,957 -0.11%44 0.1927%
2014 17,774 3,298 1,871 580 23,523 2.47%45 0.1927%
2015 19,450 3,603 1,847 589 25,489 8.36%49 0.1927%
2016 20,431 3,973 1,909 612 26,925 5.63%52 0.1927%
2017 21,472 4,238 2,092 622 28,424 5.57%55 0.1927%
2018 22,707 4,355 2,378 555 29,995 5.53%58 0.1927%
2019 24,077 4,528 2,541 490 31,636 5.47%61 0.1927%
(1) Other property includes farm, rural, institutional, recreational, state secured property, unsecured property, personal property and fixtures.
(2) Estimated property tax revenues do not include special assessments, redevelopment tax increment or community facilities district revenues.
Source: County of San Diego, California Auditor and Controller
Notes: Information about estimated actual value of property is not available; the assessed value is based on the most
recent sales value and includes secured property only.
(3) The total direct tax rate is the city's proportionate share of Proposition 13 property taxes collected within the tax rate area.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Taxable Assessed Property Value
Last Ten Fiscal Years
(in millions)
Residential Property Commercial Property Industrial Property
Fiscal Year
178
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(rate per $100 of assessed value)
Fiscal Year
City of
Carlsbad
Total
Direct
Rate (5)
Carlsbad
Unified
School
District
San Diego
County
Educational
Revenue
Augmentation
Fund
Mira Costa
Community
College
Tri City
Hospital
District
All Other
Rates
Total Prop
13 Rate (2)
Voter
Approved
Debt (3)
Total Tax
Rate (4)
2010 0.01927%0.3412%0.1576%0.1497%0.0937%0.0198%0.0453%1.0000%0.0408%1.0408%
2011 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0432 1.0432
2012 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0748 1.0748
2013 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0768 1.0768
2014 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0743 1.0743
2015 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0710 1.0710
2016 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0681 1.0681
2017 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0563 1.0563
2018 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0791 1.0791
2019 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0758 1.0758
(1) The tax rate history above is for Tax Rate Area 09000, which has the highest total assessed value of the all the tax rate areas in the city.
Tax Rate Area 09000 was chosen as the most representative for the city.
(2) In 1978, California voters passed Proposition 13 which limited property taxes to a total maximum rate of 1.00% based on the assessed
value of each property being taxed. This 1.00% is shared by all taxing agencies within a tax rate area.
Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2 percent).
With few exceptions, property is only reassessed at the time that it is sold to a new owner. At that point, the purchase price
of the property becomes the new assessed value.
(3) The majority of voter approved debt is related to various school district and hospital bonds.
(4) The Total Tax Rate is the 1.00% Proposition 13 rate plus the Voter Approved Debt rate.
(5) The city has no general obligation bonds; therefore the Basic Tax Rate is the same as the Total Direct Tax Rate.
Allocation of 1% Ad Valorem Property Taxes
Overlapping Rates for Tax Rate Area 09000 (1)
Source: County of San Diego Auditor and Controller's Office
179
Direct and Overlapping Property Tax Rates (continued)
Last Ten Fiscal Years
(rate per $100 of assessed value)
Total Tax
Rates (2)
County
Tax Rate
Areas (3)
Carlsbad
Unified
Schools
Oceanside
Unified
Schools
San Marcos
Unified
Schools
Vista
Unified
Schools
Encinitas
Union
Schools
Mira Costa
Comm.
College
Palomar
Comm.
College
Palomar
Health
District
MWD /
SDCWA
Total Voter
Approved
Rates (1)
1.0545 1 - - - - 0.0416%0.0129%- - - 0.0545%
1.0580 44 - - - - 0.0416 0.0129 - - 0.0035 0.0580
1.0660 3 - - - - 0.0416 - 0.0209 - 0.0035 0.0660
1.0723 3 0.0593 - - - - 0.0129 - - - 0.0723
1.0758 57 0.0593 - - - - 0.0129 - - 0.0035 0.0758
1.0760 5 - - - 0.0516 - - 0.0209 - 0.0035 0.0760
1.0829 2 - - 0.0665 - - 0.0129 - - 0.0035 0.0829
1.0837 3 0.0593 - - - - - 0.0209 - 0.0035 0.0837
1.0909 29 - - 0.0665 - - - 0.0209 - 0.0035 0.0909
1.0968 1 0.0593 - - - - 0.0129 - 0.0210 0.0035 0.0968
1.1039 1 - - 0.0665 - - 0.0129 - 0.0210 0.0035 0.1039
1.1119 11 - - 0.0665 - - - 0.0209 0.0210 0.0035 0.1119
1.1124 1 - 0.0960 - - - 0.0129 - - 0.0035 0.1124
(1) The majority of voter approved debt is related to various school district and hospital bonds.
(2) The Total Tax Rate is the 1.00% Proposition 13 rate plus the Voter Approved Debt rate.
(3) Tax rate areas are determined by the County of San Diego. There are currently thirteen tax rates distributed among the
161 tax rate areas in the city. The table above shows the number of tax rate areas affected by each of the rates.
Fiscal Year 2018-19 Voter Approved Debt Tax Rates for all Rate Areas
Source: County of San Diego Auditor and Controller's Office
180
Principal Property Taxpayers
Current Year and Nine Years Ago
Taxpayer
Taxable Assessed
Value Rank
Percentage of
Total City Net
Assessed
Value
Taxable Assessed
Value Rank
Percentage of
Total City Net
Assessed
Value
Poseidon Water Desalination Plant 544,402,445$ 1 1.72%$ --
La Costa Glen Retirement Community 260,922,718 2 0.82%230,280,630 1 0.99%
La Costa Resort & Spa 237,065,147 3 0.75%204,343,913 3 0.88%
Legoland California, LLC 226,235,083 4 0.72%126,054,123 4 0.54%
The Forum Shopping Center 198,561,381 5 0.63%84,274,577 9 0.36%
The Shoppes at Carlsbad 173,289,771 6 0.55%--
La Costa Town Center, LLC 143,481,791 7 0.45%--
Carlsbad Premium Outlets 126,982,812 8 0.40%114,030,700 6 0.49%
Pacific View Apartments 124,725,402 9 0.39%121,238,334 5 0.52%
The Reserve at Carlsbad Apartments 115,900,559 10 0.37%82,580,928 10 0.36%
Park Hyatt Aviara Resort --216,600,922 2 0.93%
Callaway Golf Company --99,591,497 7 0.43%
Grand Pacific Palisades Resort --95,986,981 8 0.41%
Total 2,151,567,109$ 6.80%1,374,982,605$ 5.92%
Net assessed valuation 31,635,528,433$ 23,234,947,883$
Source: County of San Diego Offices of the Auditor and Controller and County Assessor
2019 2010
181
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Year
Total Tax Levy for
Fiscal Year (1)Amount (2)
Percentage of
Levy
Collections in
Subsequent Years Amount
Percentage of
Levy
2010 $58,433,851 $55,030,915 94.18%$1,356,961 $56,387,876 96.50%
2011 56,792,002 53,953,149 95.00%884,139 54,837,288 96.56%
2012 53,682,809 52,778,359 98.32%746,650 53,525,009 99.71%
2013 54,469,819 53,677,921 98.55%571,980 54,249,901 99.60%
2014 55,883,499 55,042,944 98.50%517,082 55,560,026 99.42%
2015 60,266,230 59,509,285 98.74%530,047 60,039,332 99.62%
2016 63,363,527 62,595,504 98.79%459,299 63,054,803 99.51%
2017 67,116,590 66,233,111 98.68%511,597 66,744,708 99.45%
2018 70,221,876 69,383,391 98.81%415,935 69,799,326 99.40%
2019 74,560,530 72,869,105 97.73%N/A 72,869,105 97.73%
(1) Includes real property transfer taxes, homeowner exemptions and Proposition 172 public safety sales taxes.
(2) Total collections include secured, unsecured, homeowners' exception and supplementary amounts distributed by the county.
Collections within the
Fiscal Year of the Levy Total Collections to Date
Source: County of San Diego Office of the Auditor and Controller
$0
$20
$40
$60
$80
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Property Tax Levies & Collections
Last Ten Fiscal Years
(in millions)
Total Tax Levy for Fiscal Year (1)Total Collections to Date
Fiscal Year
182
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p
a
g
e is intentionally left blank.
183
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(dollars in thousands except per capita)
Fiscal Year
Bonds / Special
Debt (1)
Certificates of
Participation Capital Leases Loans Payable
2010 10,250$ $ -$ -$ -
2011 9,735 - - 581
2012 - - - 475
2013 - - - 159
2014 - - - -
2015 - - - -
2016 (5)- - 970 -
2017 - - 784 -
2018 - - 588 -
2019 - - 378 -
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
(1) The 1993 Carlsbad Housing & Redevelopment Commission Tax Allocation Bonds were transferred to a trust fund due to the dissolution
of the Redevelopment Agency in FY 2011-12.
(2) During FY 2006-07, Carlsbad Municipal Golf Course Revenue Bonds were issued for $18.5 million.
(3) The State Water Resources Control Board issued low interest loans for the Carlsbad Water Recycling Facility in 2005, 2006 and 2014.
Varying amounts of principal and interest are due annually. Payments are funded from recycled water user fees.
(4) Percentage of personal income is calculated using per capita personal income beginning in 2011, in prior years the percentage is
calculated using household median income.
(5) The Bond/Special Debt is net of amortized premiums and the Loan Payable is net of unamortized discounts.
(6) The Carlsbad Municipal Golf Course Revenue Bonds were defeased during FY 2016-17.
Governmental Activities
Sources: MuniServices, LLC, California Department of Finance, and US Census Data
$557 $ 525
$ 402 $ 373 $ 339 $ 313 $ 307
$ 147 $ 136 $ 149
$0
$200
$400
$600
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Fiscal Year
Outstanding Debt per Capita
Last Ten Fiscal Years
(in dollars)
184
Bonds / Special
Debt (2)
Installment
Purchase
Agreements
Loan Payable
(4)
Capital
Leases Total
Percentage
of Personal
Income (3)Per Capita
17,975$ 4,105$ 25,715$ 502$ 58,547$ 0.79%557.30$
17,670 3,365 24,290 256 55,897 1.38%524.58
17,345 2,585 22,830 14 43,249 1.00%401.67
17,237 1,697 21,335 - 40,428 0.92%373.48
16,645 905 19,837 - 37,387 0.77%339.36
16,260 - 18,429 - 34,689 0.71%313.49
16,058 - 17,670 - 34,698 0.60%307.25
- (6)- 15,901 - 16,685 0.28%146.71
- - 14,944 - 15,532 0.24%135.51
- - 16,827 - 17,205 0.25%149.30
Business-Type Activities
185
City of CarlsbadSchedule of Direct and Overlapping Bonded Debt
Current Fiscal Year
Fiscal Year 2018-19 Assessed Valuation:$33,056,672,643
Redevelopment Incremental Valuation:1,421,144,210
Adjusted Assessed Valuation:$31,635,528,433
Total Debt City’s Share of
Overlapping Tax and Assessment Debt:06/30/19 Debt 6/30/19
Metropolitan Water District 48,050,000$ 1.139%547,290$
Mira Costa Community College District 85,850,000 27.650%23,737,525
Palomar Community College District 618,718,625 2.708%16,754,900
Carlsbad Unified School District 240,948,680 98.132%236,447,759
Carlsbad Unified School District Community Facilities District No 1 1,430,000 100.000%1,430,000
Oceanside Unified School District 222,457,302 0.004%8,898
Vista Unified School District 141,249,882 0.623%879,987
Encinitas Union School District 47,547,433 30.705%14,599,439
San Marcos Unified School District 274,121,554 18.129%49,695,497
San Marcos Unified School District School Facility Improvement District 1,380,653 19.644%271,215
San Marcos Unified School District CFD No. 4 15,800,000 32.779%5,179,082
San Marcos Unified School District CFD No. 5 14,440,000 100.000%14,440,000
San Dieguito Union High School District 333,920,000 9.055%30,236,456
San Dieguito Union HS District CFD No. 94-2 25,725,000 98.343%25,298,737
San Dieguito Union HS District CFD No. 95-2 6,050,000 9.338%564,949
Palomar Health District 431,124,259 1.670%7,199,775
Olivenhain Municipal Water District, Assess. Dist. No. 96-1 9,765,000 22.262%2,173,884
City of Carlsbad CFD No. 3, I.A. No. 1 & No. 2 19,715,000 100.000%19,715,000
City of Carlsbad 1915 Act Bonds 32,380,000 100.000%32,380,000
Total Overlapping Tax and Assessment Debt 2,570,673,388$ 481,560,393$
Source: MuniServices, LLC and County of San Diego Office of the Auditor and Controller
(1) Percentage of overlapping agency's assessed valuation located within boundaries of the city.
Percent
Applicable (1)
186
City of CarlsbadSchedule of Direct and Overlapping Bonded Debt (continued)
Current Fiscal Year
Total Debt City’s Share of
Overlapping General Fund Obligation Debt:06/30/19 Debt 6/30/19
San Diego County General Fund Obligations 255,365,000$ 6.316%16,128,853$
San Diego County Pension Obligation Bonds 508,765,000 6.316%32,133,597
San Diego County Superintendent of Schools General Fund Obligations 10,085,000 6.316%636,969
Mira Costa Community College District Certificates of Participation 150,000 27.650%41,475
Palomar Community College District General Fund Obligations 2,140,000 2.708%57,951
Carlsbad Unified School District General Fund Obligations 42,315,000 98.132%41,524,556
San Marcos Unified School District General Fund Obligations 73,382,458 18.129%13,303,506
Vista Unified School District Certificates of Participation 1,895,000 0.623%11,806
San Dieguito Union High School District General Fund Obligations 12,730,000 9.055%1,152,702
Total Overlapping General Fund Obligation Debt 906,827,458$ 104,991,415$
Overlapping Tax Increment Debt (Successor Agency):4,520,000 100.000%4,520,000 (2)
Total Overlapping Debt:3,482,020,846$ 591,071,808$
City of Carlsbad Direct Debt:
City of Carlsbad Governmental Activities Obligations -$ 0.000%-$
Total City of Carlsbad Direct Debt -$ -$
Combined Total Debt 3,482,020,846$ 591,071,808$ (3)
Source: MuniServices, LLC and County of San Diego Office of the Auditor and Controller
(1) Percentage of overlapping agency's assessed valuation located within boundaries of the city.
(2) Created by the dissolution of the Redevelopment Agency in FY 2011-12.
(3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax
allocation bonds and non-bonded capital lease obligations.
Ratios to FY 2018-19 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.46%
Ratios to FY 2018-19 Adjusted Assessed Valuation:
Governmental Activities Direct Debt 0.00%
Combined Total Debt 1.87%
Percent
Applicable (1)
187
City of CarlsbadDirect and Overlapping Debt
Last Ten Fiscal Years
(rate per $1,000 of assessed value)
2010 2011 2012 2013
Overlapping Tax and Assessment Debt:
Metropolitan Water District 0.147$ 0.129$ 0.110$ 0.080$
Mira Costa Community College District - - - -
Palomar Community College District 0.207 0.447 0.448 0.375
Carlsbad Unified School District 5.401 8.660 8.527 8.312
Carlsbad Unified School District CFD No. 1 0.230 0.192 0.149 0.103
Oceanside Unified School District 0.001 0.001 0.001 0.001
Vista Unified School District 0.043 0.039 0.038 0.031
Encinitas Union School District 0.205 0.357 0.338 0.454
San Marcos Unified School District - - 3.103 1.711
San Marcos Unified School District Facility Improvement District 0.227 0.202 0.176 0.076
San Marcos Unified School District CFD No. 4 0.245 0.241 0.236 0.230
San Marcos Unified School District CFD No. 5 1.000 0.979 0.950 0.918
San Dieguito Union High School District - - - 0.621
San Dieguito Union HS District CFD No. 94-1 0.004 0.004 0.004 0.004
San Dieguito Union HS District CFD No. 94-2 1.105 1.093 1.106 1.082
San Dieguito Union HS District CFD No. 95-2 0.022 0.022 0.022 0.022
San Dieguito Union HS District combined CFD 0.218 0.215 - -
Palomar Health District 0.383 0.444 0.434 0.353
Olivenhain Municipal Water District, Assess. Dist. No. 96-1 0.151 0.147 0.142 0.138
City of Carlsbad CFD No. 3, I.A. No. 1 & No. 2 1.244 1.080 1.063 1.045
City of Carlsbad 1915 Act Bonds 2.685 2.640 2.569 2.107
Total Overlapping Tax and Assessment Debt 13.518$ 16.892$ 19.416$ 17.663$
Overlapping General Fund Obligation Debt:
San Diego County General Fund Obligations 1.201$ 1.133$ 1.155$ 1.070$
San Diego County Pension Obligation Bonds 2.470 2.410 2.300 2.017
San Diego City Superintendent of Schools General Fund Obligations 0.061 0.059 0.055 0.047
Mira Costa Community College District Certificates of Participation 0.043 0.036 0.032 0.028
Palomar Community College District General Fund Obligations 0.010 0.009 0.008 0.006
Carlsbad Unified School District General Fund Obligations 2.132 2.089 2.028 1.967
San Marcos Unified School District General Fund Obligations 0.834 0.831 0.837 0.458
Vista Unified School District Certificates of Participation - - - 0.001
Encinitas Union School District Certificates of Participation 0.004 - - -
San Dieguito Union High School District General Fund Obligations 0.048 0.049 0.059 0.051
Other Unified School District Certificates of Participation 0.002 0.002 0.002 -
Total Overlapping General Fund Obligation Debt 6.805$ 6.618$ 6.476$ 5.645$
Overlapping Tax Increment Debt (Successor Agency):-$ -$ -$ 0.376$
Total Overlapping Debt:20.323 23.510 25.892 23.684
City of Carlsbad Direct Debt:
City of Carlsbad Governmental Activities Obligations - 0.025 0.021 0.007
Total City of Carlsbad Direct Debt -$ 0.025$ 0.021$ 0.007$
Combined Total Debt 20.323$ 23.535$ 25.913$ 23.691$
Source: MuniServices, LLC and California Municipal Statistics, Inc.
188
2014 2015 2016 2017 2018 2019
0.062$ 0.049$ 0.039$ 0.030$ 0.023$ 0.017$
- - - - 0.918 0.750
0.361 0.562 0.520 0.619 0.571 0.530
7.921 7.073 6.370 5.816 5.298 7.474
0.052 - - - 0.051 0.045
- - - - - -
0.028 0.025 0.022 0.024 0.018 0.028
0.426 0.385 0.515 0.551 0.506 0.461
2.248 2.087 1.922 1.797 1.706 1.571
0.057 0.035 0.027 0.020 0.014 0.009
0.292 0.254 0.232 0.199 0.181 0.164
0.864 0.690 0.626 0.566 0.509 0.456
0.607 0.967 0.906 1.031 1.032 0.956
0.004 0.003 0.003 0.003 0.003 -
1.032 0.928 0.855 0.983 0.908 0.800
0.023 0.021 0.019 0.017 0.016 0.018
- - - - - -
0.336 0.308 0.285 0.258 0.244 0.228
0.139 0.031 0.102 0.091 0.079 0.069
1.000 0.903 0.836 0.750 0.684 0.623
2.018 1.727 1.564 1.379 1.240 1.024
17.470$ 16.048$ 14.843$ 14.134$ 14.001$ 15.223$
0.983$ 0.857$ 0.709$ 0.648$ 0.572$ 0.510$
1.865 1.664 1.497 1.347 1.168 1.016
0.042 0.036 0.031 0.025 0.023 0.020
0.023 0.018 0.014 0.119 0.005 0.001
0.006 0.005 0.004 0.003 0.002 0.002
2.086 1.846 1.692 1.598 1.447 1.313
0.441 0.407 0.376 0.378 0.459 0.421
0.001 0.001 0.001 0.001 - -
- - - - - -
0.049 0.047 0.044 0.041 0.039 0.036
- - - - - -
5.496$ 4.881$ 4.368$ 4.160$ 3.715$ 3.319$
0.341$ 0.290$ 0.250$ 0.212$ 0.177$ 0.143$
23.307 21.219 19.461 18.506 17.893 18.685
- - - - -
-$ -$ -$ -$ -$ -$
23.307$ 21.219$ 19.461$ 18.506$ 17.893$ 18.685$
189
Legal Debt Margin Information
Last Ten Fiscal Years
(dollars in thousands)
2010 2011 2012 2013
Net assessed valuation 23,234,948$ 23,012,997$ 22,982,172$ 22,956,650$
Debt limit (25% x 15%)871,311 862,987 861,831 860,874
Less amount of debt applicable to limit:
Bonded debt 28,225 27,405 17,345 (1)17,005
Loan payable - 581 475 159
Obligations under capital leases 502 256 14 -
Total net debt applicable to limit 28,727 28,242 17,834 17,164
Legal debt margin 842,584$ 834,745$ 843,997$ 843,710$
Total net debt applicable to the limit
as a percentage of debt limit 3.30%3.27%2.07%1.99%
Source: City of Carlsbad Comprehensive Annual Financial Reports
Note: Under state finance law, the city's outstanding general obligation debt should not exceed 15 percent (as adjusted by 25
percent per the law) of total assessed property value. By law, the general obligation debt subject to the limitation
(1) The 1993 Carlsbad Housing & Redevelopment Commission Tax Allocation Bonds were transferred to a trust fund due to
(2) The golf course bonds were defeased during FY 2016-17.
may be offset by amounts set aside for repaying general obligation bonds.
the dissolution of the Redevelopment Agency in FY 2011-12.
3.30%3.27%
2.07%1.99%1.89%1.70%1.67%
0.07%0.05%0.03%0%
1%
2%
3%
4%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Percent of Debt Applicable to the Legal Debt Limit
Last Ten Fiscal Years
Fiscal Year
190
2014 2015 2016 2017 2018 2019
23,522,746$ 25,489,468$ 26,924,891$ 28,423,782$ 29,994,964$ 31,635,528$
882,103 955,855 1,009,683 1,065,892 1,124,811 1,186,332
16,645 16,260 15,855 - (2)- -
- - - - - -
- - 970 785 588 378
16,645 16,260 16,825 785 588 378
865,458$ 939,595$ 992,858$ 1,065,107$ 1,124,223$ 1,185,954$
1.89%1.70%1.67%0.07%0.05%0.03%
191
Pledged-Revenue Coverage
Last Ten Fiscal Years
2010 2011 2012 2013
Wastewater Revenue Bonds
Gross revenues (1), (5)10,837,232$ 11,564,398$ 12,391,225$ 12,599,601$
Less expenses (2), (5)6,197,845 6,060,142 6,645,436 7,094,310
Net available revenue 4,639,387$ 5,504,256$ 5,745,789$ 5,505,291$
Debt service
Principal (5)705,000$ 740,000$ 780,000$ 820,000$
Interest (5)228,006 191,419 152,468 111,469
Total debt service 933,006$ 931,419$ 932,468$ 931,469$
Coverage 4.97 5.91 6.16 5.91
Recycled Water Loans
Gross revenues (3)6,635,220$ 5,942,531$ 7,002,009$ 8,160,109$
Less expenses (4)3,300,263 3,629,787 4,133,530 4,019,176
Net available revenue 3,334,957$ 2,312,744$ 2,868,479$ 4,140,933$
Debt service
Principal 1,252,343$ 1,282,018$ 1,312,398$ 1,343,498$
Interest 624,140 594,463 564,084 532,983
Total debt service 1,876,483$ 1,876,481$ 1,876,482$ 1,876,481$
Coverage 1.78 1.23 1.53 2.21
Golf Course Revenue Bonds
Gross revenues (1), (6)7,080,711$ 7,582,458$ 7,863,951$ 6,777,292$
Less expenses (2), (6)6,426,412 6,356,592 6,177,438 5,954,896
Net available revenue 654,299$ 1,225,866$ 1,686,513$ 822,396$
Debt service
Principal (6)290,000$ 305,000$ 325,000$ 340,000$
Interest (6)810,250 798,350 785,750 771,600
Total debt service 1,100,250$ 1,103,350$ 1,110,750$ 1,111,600$
Coverage 0.59 1.11 1.52 0.74
Source: City of Carlsbad Comprehensive Annual Financial Reports
(1) Includes operating and non-operating revenues and transfers in from the General Fund.
(2) Includes operating and non-operating expenses, excluding interest expense and depreciation.
(3) Includes recycled water operating and non-operating revenues and fees.
(4) Includes recycled water operating and non-operating expenses, excluding interest expense and depreciation.
(5) Debt service on the wastewater revenue bonds was completed during FY 2015-16.
(6) The golf course bonds were defeased during FY 2016-17.
192
2014 2015 2016 2017 2018 2019
13,699,286$ 13,723,835$ 13,723,835$ -$ -$ -$
6,989,194 7,249,798 7,249,798 - - -
6,710,092$ 6,474,037$ 6,474,037$ -$ -$ -$
860,000$ 905,000$ 905,000$ -$ -$ -$
68,419 23,191 - - - -
928,419$ 928,191$ 905,000$ -$ -$ -$
7.23 6.97 7.15 n/a n/a n/a
9,392,061$ 9,210,258$ 8,216,362$ 8,371,467$ 9,869,958$ 8,198,882$
3,640,786 3,826,699 4,679,706 4,863,054 5,559,509 5,996,366
5,751,275$ 5,383,559$ 3,536,656$ 3,508,413$ 4,310,449$ 2,202,516$
1,375,337$ 1,407,932$ 1,441,301$ 1,475,461$ 1,510,433$ 1,546,234$
501,144 468,550 435,182 401,021 366,049 330,248
1,876,481$ 1,876,482$ 1,876,483$ 1,876,482$ 1,876,482$ 1,876,482$
3.06 2.87 1.88 1.87 2.30 1.17
7,747,116$ 8,428,375$ 8,196,853$ -$ -$ -$
6,125,159 6,302,019 6,273,320 - - -
1,621,957$ 2,126,356$ 1,923,533$ -$ -$ -$
360,000$ 385,000$ 405,000$ -$ -$ -$
755,850 739,088 721,313 - - -
1,115,850$ 1,124,088$ 1,126,313$ -$ -$ -$
1.45 1.89 1.71 n/a n/a n/a
193
Demographic and Economic Statistics
Last Ten Fiscal Years
Year
Total
Population
% of S.D.
County
Population
% Change from
Previous Year
% High
School
Graduate
% Bachelor's
Degree or
Higher Median Age
2010 105,055 3.30%1.59%n/a n/a 38.7
2011 106,555 3.42%1.43%96.2%51.6%39.4
2012 107,674 3.43%1.05%95.3%50.6%40.3
2013 108,246 3.44%0.53%88.5%35.4%39.3
2014 110,169 3.45%1.78%95.6%51.3%40.3
2015 110,653 3.43%0.44%96.0%51.9%41.1
2016 112,930 3.43%2.06%95.6%54.8%42.1
2017 113,725 3.43%0.70%95.8%54.2%41.9
2018 114,622 3.43%0.79%95.7%55.0%42.3
2019 115,241 3.44%0.54%95.7%58.1%42.6
Sources: MuniServices, LLC
Population projections are from the California Department of Finance
(2) Per Capita Personal Income is reported starting in FY 2010-11; prior amounts are Median Household Income, adjusted for inflation.
Educational Attainment
Household and demographic characteristics estimates are from the United States Census Data Sets Tables.
Unemployment rate estimates are from the California Employment Development Department, Bureau of Labor Statistics.
(1) Personal income is the estimated total aggregate income for the total population.
194
Average
Household
Size
Personal
Income (1)
(millions)
Per Capita
Personal
Income (2)
City
Unemployment
Rate
2.53 n/a 70,581$ 6.50%
2.53 4,048$ 37,985$ (2)6.80%
2.58 4,304$ 39,975$ 6.30%
2.63 4,403$ 40,672$ 5.90%
2.53 4,862$ 44,134$ 6.30%
2.30 4,907$ 44,345$ 4.30%
2.68 5,741$ 50,838$ 5.20%
2.58 6,060$ 53,285$ 4.20%
2.60 6,496$ 56,675$ 3.00%
2.60 6,889$ 59,780$ 2.60%
195
Principal Employers
Current Year and Nine Years Ago
Employer Industry Employees Rank
% of Total City
Employment Employees Rank
% of Total City
Employment
Legoland California Hospitality/Tourism 2,300 1 3.26%1,022 5 1.88%
ViaSat Information Technology 2,153 2 3.05%1,940 3 3.57%
Life Technologies Life Sciences 1,982 3 2.81%3,988 1 7.34%
Omni La Costa Resort & Spa Hospitality/Tourism 1,300 4 1.84%838 7 1.54%
Carlsbad Unified School District Education 1,032 5 1.46%983 6 1.81%
Gemological Institute of America Research/Education 856 6 1.21%- --
City of Carlsbad Government 746 7 1.06%713 9 1.31%
Nortek Security Control Information Technology 637 8 0.90%- --
Optum UnitedHealth Groug Life Sciences 571 9 0.81%- --
HM Electronics Information Technology 571 9 0.81%- --
Taylor Made Golf Company Action Sports 570 10 0.81%2,075 2 3.82%
Callaway Golf Company Action Sports - --1,637 4 3.01%
Park Hyatt Aviara Resort Hospitality/Tourism - --823 8 1.51%
Nordson Asymtek Manufacturing - --671 10 1.23%
Subtotal Employees 12,718 18.01%14,690 27.03%
Total Employees (estimate)70,614 54,347
Source: Carlsbad Business License Data
2019 2010
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Authorized Full and 3/4 Time City Government Employees by Program Area
Last Ten Fiscal Years
Program Area 2010 2011 2012 2013
Policy and Leadership Group
City Attorney 7.00 7.00 7.00 7.00
City Clerk and Records Management 8.00 8.00 6.25 6.00
City Council 1.00 1.00 1.00 1.00
City Manager 8.00 8.00 7.00 7.00
City Treasurer 0.75 0.75 0.75 0.75
Communications 3.75 2.75 2.75 2.75
Administrative Services
Finance and Risk Management 31.00 30.50 30.50 30.50
Human Resources and Workers' Comp 10.00 9.00 9.00 9.00
Information Technology 19.00 22.50 (1)22.50 22.50
Public Safety
Police 162.00 162.00 162.00 161.00
Fire 88.75 88.75 87.75 87.75
Community Services
Community and Economic Development 50.00 54.00 (1)50.00 47.00
Housing and Neighborhood Services 10.00 11.00 (1)13.00 10.00
Library and Arts 53.00 52.25 51.25 51.25
Parks and Recreation 72.10 71.95 70.95 68.40
Public Works
Environmental Management - - - -
General Services, Engineering, Environmental 133.00 - (1)- -
General Services - 41.60 (1)39.60 40.55
Public Works Administration - - - -
Transportation - 58.40 (1)54.40 54.40
Utilities 55.40 69.55 (1)68.55 67.65
Full and 3/4 Time Authorized Employees 712.75 699.00 684.25 674.50
Net Increase/(decrease) over prior year 6.50 (13.75) (14.75) (9.75)
Source: City of Carlsbad Operating Budget
Notes: A full-time employee is scheduled to work 2,080 hours per year (including vacation and sick-leave).
(1) During FY 2010-11, the Community Services, Public Works and Information Technology divisions were reorganized.
(2) During FY 2014-15, the Policy and Leadership and Community Services divisions were reorganized.
(3) During FY 2015-16 and FY 2016-17, the Public Works division restructured divisions. (4) During FY 2018-19, Police IT was consolidated with city IT, resulting in the transfer of 5.0 FTEs.
A 3/4 time employee is scheduled to work 1,560 hours per year (including vacation and sick-leave).
198
2014 2015 2016 2017 2018 2019
7.00 7.00 7.00 6.00 7.00 7.00
5.00 5.00 5.00 5.00 6.00 6.00
1.00 1.00 1.00 1.00 1.00 1.00
7.00 7.00 7.00 8.00 8.00 9.00
0.75 0.75 0.75 0.75 0.75 0.75
2.75 4.75 (2)5.00 5.00 5.00 5.00
31.50 31.50 32.50 33.00 32.00 32.00
9.00 11.00 11.00 11.00 11.00 11.00
22.50 22.50 19.50 20.00 27.00 32.00 (4)
161.00 162.00 168.00 168.00 168.00 169.00 (4)
88.00 89.00 89.00 90.00 90.00 90.00
44.00 44.00 44.00 44.00 44.00 46.00
10.00 12.00 13.00 13.00 13.00 12.00
51.25 50.25 (2)50.50 50.50 50.50 50.50
67.60 61.60 (2)58.15 57.15 57.00 55.00
- - 8.50 9.50 9.70 9.60
- - - - -
40.60 39.90 28.10 (3)51.30 (3)52.00 53.00
- - 8.05 (3)9.85 (3)12.30 7.65
53.40 55.90 57.35 (3)33.00 (3)32.00 35.00
65.40 64.60 60.85 (3)60.20 59.00 61.75
667.75 669.75 674.25 676.25 685.25 693.25
(6.75) 2.00 4.50 2.00 9.00 8.00
199
Operating Indicators by Function/ProgramLast Ten Fiscal Years
2010 2011 2012 2013
General Government
Number of applications processed (full and part-time)5,260 2,416 1,998 10,904 (8)
Number of external new hires (full and part-time)27 31 16 151 (8)
Number of internal promotions / transfers (full-time only)34 5 6 6
Business licenses processed 9,173 9,539 9,303 9,422
Number of outgoing payments processed 40,310 41,344 39,075 38,441
Public Safety
Police
Calls for service 94,678 97,414 93,248 90,122
Average priority one response (minutes)6.0 5.5 5.9 5.8
Cases 8,826 8,188 7,963 8,314
Fire
Emergency responses 9,503 9,084 9,106 10,755
Response time: arrivals on scene within goal standard 74%71%72%71%
Community Development
Affordable housing units completed 6 5 - 59
Financial assistance to affordable housing projects 3,750,000$ 525,000$ 780,000$ 7,408,000$
Building permits issued n/a 2,600 1,400 1,500
Building inspections conducted 15,500 19,500 19,000 24,000
Final inspections (residential dwelling units)300 260 271 440
Final inspections (commercial square feet)n/a n/a n/a n/a
Code Enforcement Actions 3,400 4,320 3,827 4,943
Community Services
Library - total material circulation 1,365,127 1,362,700 1,358,839 1,348,333
Library - patron visits 749,514 858,788 858,422 821,045
Cultural Arts - number of events 54 44 50 50
Arts - attendance of events 80,000 80,000 75,000 80,000
Recreation - youth sports participants 1,200 1,200 1,200 1,200
Recreation - adult sports participants 5,400 5,400 5,450 5,200
Recreation - enrichment class enrollees 13,075 13,300 12,650 12,200
Recreation - special events participants 12,000 9,000 10,000 13,000
Recreation - aquatics classes conducted 368 470 557 575
Trees trimmed 1,816 2,221 1,863 1,936
Public Works
Streets
Road miles resurfaced- overlay or slurry seal 15.3 3.8 25.2 24.3
Carlsbad Municipal Water District
Average consumption (millions of gallons per day)15.3 (1)14.1 (1)14.4 15.4
Annual water deliveries (acre feet)17,142 (1)15,786 (1)16,104 17,248
Water connections 27,910 27,978 28,379 28,947
Wastewater
Sewage pumped (millions of gallons per day)7.10 7.57 6.92 6.65
Annual flow (millions of gallons)2,590 2,762 2,524 2,426
Wastewater connections 22,335 22,342 22,631 22,955
Source: City of Carlsbad
(1) Water deliveries and consumption decreased significantly in FY 2008-09 through 2010-11 as a result of conservation efforts.
(2) Increases in the number of participants is the result of the opening of the Alga Norte Community Park in FY 2013-14.
(3) Increases in the number of enrichment class and special events participants are the results of overall higher attendance and including
recategorized classes previously not classified or included as enrichment classes or special events in prior years.
(4) The decrease in patron visits is due to the temporary closures of library facilities for remodeling during FY 2015-16.
(5) The decrease is due to the time involved with the implementation of a new licensing system during FY 2016-17.
(6) Reporting of information is not available for FY 20167-17 due to the implementation of a new permitting system.
(7) Beginning in FY 2016-17, 2,500 acre feet of contracted desalinated water is included in the water purchase totals.
(8) Beginning in FY 2012-13, part-time applicants were added to the number of applicants and new hires.
200
2014 2015 2016 2017 2018 2019
9,527 8,551 8,037 9,544 9,455 8,495
284 299 260 292 311 345
47 41 31 58 44 66
10,327 10,735 11,449 8,142 (5)11,267 9,546
39,310 40,663 41,398 41,304 41,869 43,520
87,976 91,314 92,061 84,858 90,760 99,562
5.8 6.5 6.1 5.9 5.8 5.7
8,296 8,349 9,253 8,884 8,643 8,705
9,925 9,830 11,455 12,515 12,039 12,378
63%63%64%64%61%65%
- - - - - -
-$ 2,646,000$ -$ 1,280,000$ -$ -$
1,400 1,600 3,000 4,500 4,392 4,133
19,000 21,000 23,000 27,000 22,671 27,222
190 200 200 600 289 545
45,000 60,000 60,000 95,000 155,292 1,829,394
4,794 5,389 10,994 n/a (6)9,538 10,950
1,369,369 1,293,282 1,103,090 1,243,228 1,169,247 1,185,390
791,533 804,003 609,679 (4)720,205 685,188 668,973
62 80 88 79 82 96
75,000 87,000 85,000 79,067 65,817 61,531
2,292 (2)1,000 1,000 968 1,003 1,260
5,600 6,150 5,600 4,500 4,800 4,800
10,350 19,030 (3)19,632 17,402 12,996 17,900
13,600 17,841 (3)19,474 12,150 11,645 9,600
1,018 (2)1,224 684 733 778 830
1,920 2,018 1,965 1,971 1,954 4,340
14.8 18.1 20.0 23.8 25.8 8.3
15.9 14.6 12.1 13.1 14.3 13.0
17,801 16,368 13,578 14,616 (7) 16,032 14,563
29,045 29,190 29,190 29,782 30,054 30,131
6.53 5.90 6.17 5.82 6.32 6.03
2,384 2,152 2,252 2,125 2,306 2,200
23,282 23,431 23,431 23,747 23,863 23,959
201
Capital Asset Statistics
Last Ten Fiscal Years
2010 2011 2012 2013
Community Services
Number of parks and community fields 31 31 31 31
Acres of developed parks and community fields 183 183 183 183
Acres of open space and community fields 790 790 790 755
Miles of open space trails 47 47 47 47
Number of pools 1 1 1 1
Number of community centers 4 4 4 4
Number of libraries 3 3 3 3
Number of Materials in Library Collections 642,118 645,414 645,414 625,893
Public Safety
Fire Protection
Number of stations 6 6 6 6
Number of fire trucks 11 11 12 12
Number of ambulances 5 5 5 6
Number of other fire vehicles 14 14 15 15
Police Protection
Number of patrol and other vehicles 91 90 90 88
Number of motorcycles 15 11 11 13
Public Works
Carlsbad Municipal Water District
Miles of lines and mains 447 518 (1)527 534
Wastewater
Miles of sewers 282 284 288 288
Streets
Miles of streets 340 340 340 343
Number of street lights 7,113 7,126 7,142 7,179
Number of traffic signals 172 172 172 174
Source: City of Carlsbad
(1) During FY 2010-11, the figure for miles of lines and mains was adjusted to include recycled lines and mains.
(2) During FY 2018-19, the number of vehicles was updated to include both active and reserve vehicles.
202
2014 2015 2016 2017 2018 2019
33 33 33 33 33 33
281 319 319 319 319 319
728 728 728 728 728 787
47 47 47 47 47 52
3 3 3 3 3 3
4 4 4 4 5 5
3 3 3 3 3 3
581,865 574,775 563,581 491,956 477,149 473,154
6 6 6 6 6 6 (2)
13 12 12 12 13 14 (2)
8 7 6 5 5 5 (2)
16 15 18 20 20 25 (2)
114 114 106 106 96 119 (2)
13 14 15 12 13 13 (2)
534 534 559 559 559 559
288 288 288 288 288 288
346 347 348 350 350 350
7,236 7,262 7,265 7,334 7,337 7,388
174 177 177 177 178 179
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