HomeMy WebLinkAbout; ; 2016-2017 CAFR; 2017-06-30Fiscal Year Ended June 30, 2017
Comprehensive Annual
Financial Report
Comprehensive Annual
Financial Report
Fiscal Year Ended
June 30, 2017
Prepared by the
Finance Department
1635 Faraday Ave.
Carlsbad, CA 92008
www.carlsbadca.gov
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CITY OF CARLSBAD
Comprehensive Annual Financial Report
Year Ended June 30, 2017
Table of Contents
Page
Introductory Section:
Letter of Transmittal 1
City Council’s FY 2016-17 Strategic Goals 4
Certificate of Achievement for Excellence in Financial Reporting, Government Finance Officers
Association 15
Location Map 16
List of City Officials 17
Organization Chart 18
Financial Section:
Independent Auditor’s Report 19
Management’s Discussion and Analysis 22
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position 42
Statement of Activities 44
Fund Financial Statements:
Balance Sheet – Governmental Funds 46
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 48
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 50
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities 52
Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual –
General Fund 53
Statement of Net Position – Proprietary Funds 56
Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds 60
Statement of Cash Flows – Proprietary Funds 62
Statement of Net Position – Fiduciary Funds 66
Statement of Changes in Net Position – Fiduciary Funds 67
Notes to the Financial Statements 68
Required Supplementary Information
Schedule of Changes in Net Position Liability and Related Ratios During Measurement Period 110
Schedule of Plan Contributions 113
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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 116
Combining Statement of Revenues, Expenditures and Changes in Fund Balances –
Nonmajor Governmental Funds 120
Combining Schedule of Revenues and Expenditures – Budget and Actual (Budgetary Basis) –
Special Revenue Funds 124
Combining Schedule of Revenue and Expenditures – Budget and Actual (Budgetary Basis) –
Capital Project Funds 126
Combining Statement of Net Position – Internal Service Funds 128
Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds 130
Combining Statement of Cash Flows – Internal Service Funds 132
Combining Statement of Changes in Assets and Liabilities – Agency Funds 136
Combining Statement of Fiduciary Net Position by Project Area – Private Purpose Trust Funds 138
Combining Statement of Changes in Fiduciary Net Position by Project Area – Private Purpose
Trust Funds 139
Statistical Section:
Financial Trends:
Net Position by Component – Last Ten Fiscal Years 142
Changes in Net Position – Last Ten Fiscal Years 144
Fund Balances of Governmental Funds – Last Ten Fiscal Years 148
Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 150
General Governmental Tax Revenues by Source – Last Ten Fiscal Years 152
Revenue Capacity:
Water and Wastewater Rates – Last Ten Fiscal Years 153
Assessed Value of Taxable Property – Last Ten Fiscal Years 154
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years 155
Principal Property Taxpayers – Current Year and Nine Years Ago 157
Property Tax Levies and Collections – Last Ten Fiscal Years 158
Debt Capacity:
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 160
Schedule of Direct and Overlapping Bonded Debt – Current Fiscal Year 162
Direct and Overlapping Debt – Last Ten Fiscal Years 164
Legal Debt Margin Information – Last Ten Fiscal Years 166
Pledged-Revenue Coverage – Last Ten Fiscal Years 168
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years 170
Principal Employers – Current Year and Nine Years Ago 172
Operating Information:
Authorized Full and ¾ Time City Government Employees by Program Area –Last Ten Fiscal Years 174
Operating Indicators by Function/Program – Last Ten Fiscal Years 176
Capital Asset Statistics – Last Ten Fiscal Years 178
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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November 29, 2017
Honorable Mayor, City Council,
and Citizens of the City of Carlsbad
CITY OF CARLSBAD
Carlsbad, CA 92008
LETTER OF TRANSMITTAL
2016-17 COMPREHENSIVE ANNUAL FINANCIAL REPORT
Honorable Mayor, City Council, and Citizens:
I am pleased to present the Fiscal Year 2016-17 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, 2017.
Management assumes full responsibility for the completeness and reliability of the information contained
in this report, based upon a comprehensive framework of internal controls that it has established for this
purpose. Because the cost of internal controls should not outweigh its benefits, the city’s comprehensive
framework of internal controls has been designed to provide reasonable, rather than absolute, assurance
that the financial statements will be free from material misstatement.
State law and the city’s Municipal Code require that an annual financial report is prepared. This report
fulfills that obligation. It has been prepared in conformity with generally accepted accounting principles
(GAAP) and with the financial reporting requirements prescribed by the Governmental Accounting
Standards Board (GASB). The independent auditing firm of Davis Farr LLP has issued an unqualified (“clean”)
opinion on the city’s financial statements for the year ended June 30, 2017. 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, 2017 noted no material weaknesses in the framework of
internal controls, or significant violations of applicable laws and regulations.
PROFILE OF THE CITY OF CARLSBAD
Carlsbad incorporated in 1952 as a General Law City, although its “village” area dates back more than 100
years. In June 2008, the voters of Carlsbad overwhelmingly approved the city to change to a Charter City.
Carlsbad is located on the southern California coast, about 35 miles north of the City of San Diego. The city
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is governed by a five member City Council under the Council Manager form of government. The City Council
is elected at large, on a staggered basis, for a term of four years. The City Clerk and City Treasurer are also
elected to four-year terms. The City Council appoints the City Manager and City Attorney.
The city covers approximately 39 square
miles and has a population of 113,725, 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; 39 hotels offering
4,400 rooms and over 1,100 vacation rentals
for tourist lodging; over 20 auto dealers; high
technology, multimedia and biomedical
businesses; electronics, golf apparel and
equipment manufacturers; several business
and light industry parks; and numerous land
developers building single and multi-family
housing in a variety of community settings.
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 local residents and businesses. The city’s Housing Authority administers federal housing assistance
to 600 low-income households in Carlsbad and older residents can take advantage of Carlsbad’s senior
citizen programs.
Budget Process
The Carlsbad Municipal Code requires that the City Manager annually prepare a budget for the City Council
with a message describing important features and to assume responsibility for the budget’s administration
after adoption. The budget process begins in January each year, when the City Council meets to develop
goals that help city staff prioritize programs, projects and services, as well as the resources required to fund
them (see City Council Goals below). Once the goals and priority projects are developed, city staff develops
operational goals and work plans based on the City Council’s direction. These goals and work plans provide
the basis for the development of the annual budget. The City Council adopts the formal budget for all funds
at the beginning of each fiscal year and may amend those budgets throughout the year, as necessary.
Budgetary control for the city is maintained through its accounting systems. Expenditures may not exceed
budgeted figures at the fund level. Monthly reports summarizing the results of operations for the city’s
more significant funds are provided to the City Council.
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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 includes partnering with local school districts, working to attract
an institution of higher education, and cultivating a community with life and workplace skills
that will support Carlsbad’s vision for the future.
Enhance Carlsbad’s coastline to ensure an exceptional experience in all the ways people want
to enjoy it.
The Carlsbad coastline is a critical element of the city’s identity. The City Council is committed
to making policy decisions to ensure Carlsbad’s coastline maintains the character the
community loves while enhancing access, amenities and mobility to a level consistent with
Carlsbad’s high-quality community standards. This includes partnering with State Parks, which
currently controls most of Carlsbad’s beaches. This goal also includes physical changes that
will enhance natural beauty, better manage traffic flow, expand walking and biking
opportunities, improve safety and create a uniquely Carlsbad experience.
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
Economic Profile
The University of San Diego
(USD) monitors the health of
the San Diego economy
through its Index of Leading
Economic Indicators. The
chart to the left reflects
historical movement in the
USD’s Leading Economic
Indicators. The index, which
measures local stock prices,
help wanted advertising, and
other pertinent metrics, rose
0.8 percent in June. The gain
was led by sharp increases in
residential units authorized by
building permits and in the
outlook for the national
economy. Local stock prices and consumer confidence were also slightly higher. These gains were enough
to overwhelm negative moves in initial claims for unemployment insurance and in help wanted advertising
to push the USD Index to its seventh increase in the last eight months and its eighth straight month without
a decline.
Carlsbad’s economy generally moves in tandem with that of the San Diego region. Property taxes for the
current year, Fiscal Year (FY) 2016-17, increased by almost eight percent compared to the previous year,
primarily due to increased assessed values in residential real estate. Transient Occupancy Tax (TOT), taxes
paid by hotel guests, increased by over six percent, bolstered by some new room inventory, higher
occupancy rates and, overall, higher room rates. Sales tax revenues ended FY 2016-17 down almost two
percent, mostly due to one-time receipts resulting from the cessation of the triple flip, last year, a decrease
of 1.5 percent projected for new auto sales, and a decrease in taxable sales at The Shoppes at Carlsbad; a
large portion of their retail establishments are currently closed as the remodeling project continues.
Overall, General Fund revenues for the city are expected to increase by 3.7 percent in the coming fiscal
year, with the three major revenue sources discussed here increasing.
From 1992 to 2008, commercial and industrial development in Carlsbad averaged approximately 1.1 million
square feet per year. As opportunities for new development diminish, commercial and industrial
development is tapering off, falling to an average of approximately 315,000 square feet per year over the
next five fiscal years. Large industrial and commercial developments in the next five years include a new
LEGOLAND hotel, Carlsbad Oaks industrial park, and the expansion of the ViaSat campus. Commercial office
space vacancy has witnessed a decline over the past several years, falling from over 30 percent in the last
quarter of 2009 to 19.4 percent in the fourth quarter of 2016. Industrial vacancy remains at 9.1 percent
(10.6 percent, last year) and retail vacancy for the fourth quarter of 2016 was 2.4 percent (4.8 percent, last
year) according to data from CoStar, a leader in commercial real estate information.
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Housing prices in Carlsbad
remain strong. The median
price for single family
homes (resale), according
to CoreLogic (a leading
provider of consumer,
financial and property
information, analytics and
services to business and
government) data, has
actually decreased slightly
compared to last year,
falling approximately 1.5
percent to $814,000.
Annual median prices fell in
February in the 92009 zip
code (southeast quadrant) and the 92010 zip code (northeast quadrant). However, CoreLogic (also
indicates that, if new construction and condominiums are included, median home prices are up over 9
percent compared to a year ago. According to Movoto (a real estate inventory website), inventories in
Carlsbad remain tight, down by 14 percent from a year ago, so the weakness in pricing may be an anomaly.
Total assessed property values in Carlsbad are $27.7 billion, an increase of 6 percent over FY 2015-16. The
city is expected to add another 1,235 new residential units in the next five years.
Commercial development has brought much needed entertainment and shopping venues to citizens and
visitors alike, as well as generating additional sales tax to help pay for city services. Carlsbad is home to Car
Country Carlsbad – an auto mall; the Carlsbad Premium Outlets – a specialty outlet center; The Shoppes at
Carlsbad – a regional shopping mall; a Costco center; and the Forum at Carlsbad – a commercial center with
upscale retail shops, restaurants and other commercial uses. A Lowe’s home improvement store opened
in fall 2013, and La Costa Town Square opened in fall 2014.
Development has also enhanced Carlsbad’s reputation as a destination resort for tourism. The city is host
to a major family theme park, LEGOLAND, and has two luxury resorts available for its visitors, the Park Hyatt
at Aviara and the La Costa Resort & Spa. There are also a number of other quality hotels and motels in the
city, with the most recent additions being the Hilton Oceanfront Resort & Spa (recently renamed Cape Rey
Carlsbad, a Hilton Resort) and the LEGOLAND California Resort.
The city opened a municipal golf course in the summer of 2007 which has further enhanced the tourism
attractions the city offers. The municipal golf course, The Crossings at Carlsbad, is an 18-hole, destination
golf course set in the rolling hills and canyons of Carlsbad. With ocean views, a high quality golf experience,
a first class restaurant and clubhouse, and linkages to hiking trails, The Crossings at Carlsbad is a destination
spot for golfers and non-golfers alike.
Overall, for FY 2016-17, General Fund revenues increased 2.4 percent from the previous year. Most major
sources of tax revenue are expected to increase in FY 2017-18, including property tax (4.9 percent increase),
which is stabilizing following a year that saw growth of almost 7 percent. Sales tax is projected to increase
8.3 percent and TOT revenues are projected to increase by 3 percent as occupancy and average daily rates
(ADR) increase. The forecast assumes no additions to room inventory in FY 2017-18. Property values
continue to appreciate, however, following the national, state, and regional trends, but appreciation is
leveling off. Development related revenues are forecast to decrease by over 30 percent in FY 2017-18,
compared to the previous year, with permit activity falling after a 30 percent increase in the previous year.
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State of California – In January 2017, Governor Jerry Brown submitted the proposed
budget to the Legislature with an introductory letter that began, “This year’s budget
is the most difficult that we have faced since 2012.” Despite the tax increases in the
state over the past several years, the budget remains precariously balanced, as the
governor’s office began with a forecasted $2 billion shortfall for the upcoming fiscal
year. The May revision indicated that a surging stock market improved revenues by
$2.5 billion, eliminating the shortfall. Despite this improved revenue picture, the
forecast is still $3.3 billion below the previous budget cycle.
The budget for FY 2017-18 acknowledges that, in the past four years, California’s budget has expanded
government spending as the effects of the Great Recession waned. The May revision continues to provide
funding for the rising state minimum wage, expansion of health care coverage to undocumented children
and Californians covered under the Affordable Care Act, and a new earned income tax credit, which is a
new allowance under the California tax code. Challenges continue to plague state lawmakers, as the state
relies on a system under which over 70 percent of General Fund revenues come from a highly volatile
income tax base. The revised budget also acknowledges the growing cost of pensions – contributions to
CalPERS are expected to nearly double from FY 2017-18 to FY 2023-24. To mitigate this growing expense,
the revised budget includes a supplemental payment to CalPERS of $6 billion.
The California state budget assumes no downturn in an economy that has been in mid-expansion for eight
years, compared to previous post-recession expansions of five years, and the governor notes that a
moderate recession could drop state revenues by $20 billion. The revised budget for FY 2017-18 forecasts
$127.7 billion in revenues covering $124 billion in expenditures. The remainder is used to bolster the “rainy
day” fund by $1.8 billion and to liquidate debt. The state budget continues to be a precarious balancing
act, even following a state vote to make permanent income tax increases under Prop 30.
Long-Term Financial Planning
In order to strategically address the future needs of the city and to ensure that the city maintains a
structurally balanced budget in the long term, the city prepares a ten-year financial forecast. Revenue
projections are developed based on current and forecasted economic variables at the national, state, and
local levels, and provide city leaders with some measurement of future capacity to support city programs
and services. In recent years, revenue growth has become more difficult to project in the long-term, with
an economic climate that changes rapidly and unpredictably. The forecast allows decision makers to adjust
for these changes. The ten-year forecast is updated frequently to avoid potential pitfalls and to ensure that
fiscal challenges are identified and resolved, and to ensure the continued development of a balanced and
responsible budget.
During the Great Recession, the city took deliberate actions to ensure that the budget remained structurally
balanced. These measures included a reduction in full-time and hourly full-time equivalent (FTE) positions,
delaying the construction of non-essential capital projects, reducing the funding for capital outlay and
priority projects, reducing and/or eliminating cost of living salary increases, requiring employees to pay a
larger portion of their retirement costs, using technology and other tools to create efficiencies, and reducing
certain non-essential service levels with a minimal impact to the community. The ten-year forecast
identifies increasing labor costs as CalPERS, the administrator for the city’s employee pension plan, embarks
on a strategy to lower the risk in their investment portfolio. The city is taking actions to adjust to these
increases and provide ongoing resources to continue providing service levels expected by our stakeholders.
The ability to anticipate changes in revenue sources and to balance those resources against the costs related
to ongoing and future programs, services, and infrastructure requirements is critical to the financial health
of the city. The city relies on the General Fund forecast to effectively manage fiscal resources and map a
sustainable and responsible path for attaining the goals of the community. The tumultuous economic
environment experienced in the past few years makes this long-term perspective even more important.
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The forecast assumes limited growth in residential and commercial development over the next decade and
captures the expected revenue impacts from major projects that are expected to be completed during the
forecast period. Ongoing transfers to the Carlsbad Crossings Golf Course ceased this fiscal year, following
Council action in the adopted budget to retire outstanding construction debt almost twenty years ahead of
the original maturity. The operating costs of new city facilities projected in the Capital Improvement
Program and supported by the General Fund, such as Pine Avenue Park, are also captured in the forecast.
Economic conditions at the national, state, and local level are expected to continue to improve at a modest
rate and to provide a boost to most of the major revenue sources. Home prices, which saw large decreases
during the recession, continue to recover and are providing support to the city’s property tax revenues in
the following years, although the levels of growth over the past two years are starting to temper. Overall,
the outlook for General Fund revenues continues to be positive and revenues are expected to exceed
ongoing operating costs over the period of the forecast.
The forecast assumes that General Fund revenues will increase by 3.7 percent in FY 2017-18, as economic
conditions continue to improve, bolstering revenues from the property taxes and TOT. To project the
expenditures, all known changes in personnel and maintenance and operations costs are accounted for.
However, the effects of future negotiations with employee bargaining units are not contemplated in the
current ten-year forecast. The forecast also captures increases in operating costs associated with planned
capital improvements, such as future parks and civic facilities.
The forecast assumes that the city’s cost for employee health care increases by 5.75 percent in FY 2017-18
and will increase between five and six percent annually for the remainder of the forecast horizon. CalPERS,
the administrator of the city’s employee pension plan, has embarked on a strategy to pursue investment in
less risky, and volatile, assets within its investment portfolio. CalPERS will be reducing the assumed rate of
return on the pension investment portfolio from 7.5 percent to 7 percent over a three year period in order
to meet this strategic goal. Because of the lengths of time involved in pension investing and the fact that
CalPERS is a mature plan, the effects of this half point decrease in the rate of return will increase annual
pension costs to the city in the future. Increases will not be seen in the operating budget until FY 2018-19,
so this proposed budget is not affected by this change in the coming fiscal year. Between FY 2018-19 and
FY 2020-21, pension costs will increase between six and twelve percent per year. This may not be the last
such action by CalPERS - the CalPERS Board will contemplate a further drop in the assumed investment rate
(or discount rate) at the February 2018 meeting. The forecast does not consider increases in personnel
beyond FY 2017-18, except those that may be related to the operating costs of new city facilities supported
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by the General Fund. Negotiated salary increases and future salary growth projections are included in
personnel costs in the forecast, in order to provide a conservative estimate of future costs. The contribution
from the General Fund to the Infrastructure Replacement Fund is forecasted to remain at 6.5 percent of
General Fund revenues. Finally, the forecast includes estimated operating costs for all capital projects in
the timeframes shown in the Capital Improvement Program (CIP).
As indicated in the graph on the previous page, the General Fund is balanced for FY 2017-18 and revenues
exceed expenses over the life of the forecast. Although the revenue forecast is positive, Carlsbad faces the
same challenges that plague the national and state finances, including pension costs that are more volatile
and the overall health of the economy. Despite these challenges, responsible fiduciary stewardship and
planning have placed the city in a position to benefit from even modest improvements in the economic
environment.
Cash Management
The City Treasurer, an elected official, is charged with the design of an effective cash management and
investment program consistent with legal requirements and the city’s Investment Policy. The city annually
adopts a comprehensive investment policy specifying investment objectives, such as type and term of
investments, reporting requirements, and investment oversight. The city’s investments generally include
federal agencies, corporate notes, and investments in the State Treasurer’s investment pool. The modified
duration of the investments in the city’s investment pool as of June 30, 2017 was 1.942. The average return
realized on the pooled investments increased from 1.155 percent in FY 2015-16 to 1.248 percent for
FY 2016-17, and it is expected to further increase this fiscal year.
Investment income shown in the financial statements includes changes in the fair value of investments as
required under GAAP. Increases or decreases in fair value during the current year, however, do not
necessarily represent trends that will continue, nor is it always possible to realize such amounts. This is
especially true as the city holds its investments to maturity rather than selling them at fair value.
The graph below shows the amount of unrealized income reflected in the portfolio over the last nine years.
The total portfolio had an unrealized loss of 0.368 percent for FY 2016-17. According to the City Treasurer,
Craig Lindholm, “In spite of several short-term interest rate hikes by the Federal Reserve, the yield curve
remains quite flat. While longer dated maturities remain constrained, the 1 to 5 year rates have improved
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as reflected in the figures on the previous page. The Federal Reserve faces challenges to its stated objective
of continuing to increase rates against a backdrop of modest economic growth. We anticipate our portfolio
returns will continue to increase but at a slower rate than previously experienced in prior business cycles.”
Major Initiatives and Projects
In the city’s FY 2017-18 Capital Budget, several significant projects are in design or under construction over
the next five years. Some of the notable capital projects are discussed below.
PARK PROJECTS
The city is currently implementing park projects which were a result of a needs assessment and subsequent
updated master plans. The city worked with the community to identify current needs and priorities for
parks and recreation programs, and summarized the input in the Parks & Recreation Department Master
Plan. The city then updated individual master plans for Poinsettia Community Park, Aviara Community Park,
Pine Avenue Community Park and Leo Carrillo Ranch Historic Park.
Aviara Community Park Event Gathering Space and Picnic Areas – The additional park amenities include a
large passive outdoor public gathering space, group picnic areas, a perimeter walking path and a catering
support room complete with appliances to support outside catering and food and beverage services for
small events. The total cost is $3.6 million.
Poinsettia Park Multi-Use/Multi-Generational Community Center – As a result of the needs assessment,
funds are included to study the feasibility of a multi-use, multi-generation indoor community center,
located at Poinsettia Park, which will serve a larger cross section of the community. Additional planned
improvements include a fenced dog park for both large and small dogs, pickleball courts, updated tot lots
and a multi-sports arena with a picnic area and artificial turf field, at a total cost of $4.4 million.
Leo Carrillo Phase III – This historic park is located in the southeast quadrant of the city. Expenditures
include restoration of the horse stables to allow occupancy for events, an outdoor interpretive plan to
educate and focus on the life and times of Leo Carrillo, his ranch years, and native people and plants. Also
included is visitor way-finding signage and additional lighting. The total estimated cost is $2.8 million.
Pine Avenue Park Community Facility
and Garden Areas – The remaining
elements of the park include a multi-
purpose community center and
gymnasium, a community garden
with rentable plots, and a
botanical/ornamental garden. The
community center and gymnasium
will include basketball, volleyball,
gymnastics, multi-purpose rooms,
meeting rooms, a teen center, and
office space. This final phase of the
park is estimated at $12.3 million.
Robertson Ranch Master Plan – This 13 acre park site is located within the Robertson Ranch development
located in the northeast quadrant of the city. Funding in the amount of $200,000 is included for the
development of a master plan.
CIVIC FACILITY IMPROVEMENTS
Civic facilities include a variety of facilities from which the city provides its services to the public. This
category also includes maintenance of those facilities.
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Maintenance & Operations Center – This city facility will bring together offices, the maintenance yard, a
warehouse, and parking to accommodate the various work groups at one location, currently planned near
the existing Safety Center and Fleet yard. The total estimated project cost is $31.3 million.
Fire Station No. 2 Reconstruction – Fire Station No. 2, located at the corner of El Camino Real and Arenal
Road, was originally constructed in 1969 for one full-time firefighter and a yearly call volume of less than
250. Today, the station maintains a staff of five full-time firefighters with a call volume of approximately
4,000 per year. Funding for the reconstruction project was approved by a vote of the citizens at a cost not-
to-exceed $10.5 million.
Facilities Maintenance – As the city facilities
begin to age, maintenance and repair projects
are needed to keep them in good condition. In
the next five years, $5.1 million has been
allocated to projects, including projects at the
following locations:
Cannon Park Restroom
City Facility Accessibility Upgrades
Faraday Administrative Facility Upgrades
Fire Station No. 1, 4 & 5 Security Fencing
Fleet Maintenance Facility Refurbishment
Leo Carrillo Park Improvements
Senior Center Refurbishment
Village Arts Building Roof and Exterior Refurbishment
STREET AND CIRCULATION PROJECTS
People of all ages and abilities want to go places safely and
conveniently in Carlsbad, whether they drive, walk, bike,
or ride a bus or train. The livable streets concept, also
called "complete streets," acknowledges that streets are
an important part of the livability of today's communities
and ought to be for everyone. Carlsbad has made livable
streets a priority when planning and constructing
improvements to city roadways. In addition to
constructing improvements, the city continues to invest in
the maintenance and operation of the transportation
infrastructure by providing timely repairs and
rehabilitation of the public assets associated with the
roadways and public rights of way throughout the city.
ADA Improvements – ADA projects throughout the city are scheduled for $1.7 million in funding over the
next five years. The project includes various accessibility improvements, including sidewalk curb ramps and
pedestrian signals.
Avenida Encinas Widening – Widening to full secondary arterial standards along Avenida Encinas from
Palomar Airport Road to just south of Embarcadero Lane is scheduled for design in FY 2017-18. The CIP
includes $5.4 million to fund this project in the next five years.
Beach Access Repair/Upgrades – Tamarack Avenue to Pine Avenue – Funding of $5 million is included to
pay for a structural evaluation report for railings, girders, caissons, concrete, etc., along with
recommendations for repair and rehabilitation to keep the beach access facilities in safe condition.
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Bridge Preventative Maintenance Program – This is a new program designed to perform preventative
maintenance activities on bridges throughout the city, at a total budgeted cost of $1.6 million.
Carlsbad Boulevard Pedestrian Lighting – This project will install pedestrian scale lighting along both sides
of Carlsbad Boulevard between Tamarack Avenue and State Street at a total budgeted cost of $1.3 million.
Carlsbad Village Drive and Grand Avenue Pedestrian Improvements – This project is estimated at $1.3
million and will improve pedestrian features including roadway and sidewalk improvements and safety
barriers.
Concrete Repair and Maintenance – The proposed spending plan includes $1 million over the next five years
for repairs to sidewalks, curb and gutter, pedestrian ramps, driveway approaches and cross gutters.
El Camino Real Widening – There are a number of projects that are scheduled over the next five years that
will focus on the widening of El Camino Real, in addition to other improvements, such as median
construction. The projects include widening from Cassia Road to Camino Vida Roble, Arenal Road to La
Costa Avenue and Lisa Street to Crestview Drive. The estimated cost for these roadway sections is $5.5
million.
Pavement Management – Carlsbad’s local streets are maintained on a regular cycle to ensure a good riding
surface and to extend the life of the streets. Part of the maintenance program is the sealing and overlay of
the existing street surface. In addition, any problem areas are addressed as they are identified. The FY
2017-18 CIP has $15.6 million budgeted over the next five years for this program.
Poinsettia Lane Extension from Cassia Road to Skimmer Court – Completion of this segment of Poinsettia
Lane is the final link between Aviara Parkway and El Camino Real. The total cost is estimated at $14.1
million.
Road Diet and Traffic Calming Projects along Chestnut Avenue, Valley Street and Kelly Drive – Several
projects are planned in the next five years to provide complete street solutions so that the varied users of
these roads, including pedestrians and bicyclists, are provided for in a balanced and equitable manner. The
total cost is estimated at $7 million.
Traffic Signals/Traffic Control Improvements – In the next five years, traffic signal projects are planned at
the following locations, at a total budgeted cost of $1.2 million:
Faraday Avenue and Camino Hills Drive
Faraday Avenue and Palmer Way
La Costa Avenue and Levante Street
Maverick Way and Camino De Los Coches
Poinsettia Lane and Cassia Road
Poinsettia Lane and Oriole Court
Village and Barrio Traffic Circles – Installation of traffic circles at intersections throughout the Village and
Barrio is planned at a total cost of $1.5 million.
WATER/WASTEWATER PROJECTS
The city’s water and wastewater projects are vital to the continued health and welfare of its citizens. Most
new lines are built and paid for with impact fees collected from new development. As the city ages, it will
become necessary to repair and replace the lines that already exist, and an increase in these projects is
anticipated in future years. In the next five years, an additional $40.9 million in funding is scheduled for
both new and replacement water and sewer projects.
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Vista/Carlsbad Interceptor & Agua Hedionda Lift Station Replacement – This project consists of a set of
individual projects that will ultimately construct a parallel sewer interceptor system to accommodate
existing and future sewer flows from the cities of Vista and Carlsbad. The individual projects include a main
in Jefferson Street, replacement of the Agua Hedionda Lift Station, and a main from the lift station to the
Encina Wastewater Facility. The overall total cost estimate for this set of projects totals $64 million, of
which approximately 64 percent is funded by the City of Vista and 36 percent by the City of Carlsbad.
Wastewater
Other wastewater facilities scheduled for construction or replacement within the next five years include:
Buena Interceptor Sewer Improvements
Faraday/El Camino Real Sewer Replacement
Foxes Landing Lift Station Wetwell and Pump Replacement
Las Palmas Trunk Sewer
Quarry Creek Sewer Extension
In addition to the new construction and replacement projects and ongoing condition assessments, repairs
and upgrades to the city’s wastewater facilities are expected to cost $3.5 million in the next five years.
Water Lines
Major water facilities scheduled for construction or replacement within the next five years are estimated
at $33.2 million, and include the following locations:
Aviara Parkway and Plum Tree
Carlsbad Boulevard – South of Avenida Encinas
Fire Flow System Improvements
Maerkle Reservoir Floating Cover Replacement
Santa Fe II Inlet Pipeline
Rehabilitation and maintenance programs included in the five year total are estimated at $17 million.
Recycled Water Expansion
Expansion to the Carlsbad Water
Recycling Facility, including construction
of additional pipelines and a reservoir,
are anticipated to cost $34.2 million.
These facilities are expected to meet the
anticipated 76 percent increase in future
recycled water demand. The expansion is
expected to increase the recycled water
supply from 4 up to 8 million gallons per
day (mgd). With diminishing potable
water resources available, alternative
supplies such as recycled and desalinated
water become increasingly important in
supplementing the total water supply.
DRAINAGE PROJECTS
The city’s drainage infrastructure plays an important role in handling storm water runoff flows, as well as
maintaining the water quality of the city’s creeks, lagoons and ocean. Carlsbad supports programs that will
ensure that all water bodies within the city are safe and clean and, where possible, open to the public at all
14
times. The system consists of drainage pipes 30-inches or larger in diameter, large concrete and rock lined
channels, permanent sedimentation basins and miscellaneous large facilities. As the city continues to age,
it will become necessary to repair and replace the lines that already exist. An additional $4.3 million will be
added to the program in the next five years.
AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate
of Achievement for Excellence in Financial Reporting to the city for its CAFR for the fiscal year ended June
30, 2016. This was the 19th consecutive year that the city has achieved this prestigious award. In order to
be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently
organized Comprehensive Annual Financial Report. This report must satisfy both GAAP and applicable legal
requirements.
A Certificate of Achievement is valid for a period of one year only. The city strives to develop a CAFR which
will continue to meet the Certificate of Achievement Program’s requirements, and this report will be
submitted to GFOA to determine its eligibility for another certificate.
This report has been a joint effort by many people from many different areas of responsibility. It could not
have been accomplished without their help and the dedicated efforts of all of the finance staff, especially
Kevin Branca, Finance Director. 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 throughout this
period. 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,
Chuck McBride
Administrative Services Director
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Elected Officials
Matt Hall, Mayor
Keith Blackburn, Mayor Pro Tem
Mark Packard, Council Member
Michael Schumacher, Council Member
Cori Schumacher, Council Member
Barbara Engleson, City Clerk
Craig Lindholm, City Treasurer
Leadership Team
Kevin Crawford, City Manager
Celia Brewer, City Attorney
Marisa Lundstedt, Chief Operating Officer
Gary Barberio, Assistant City Manager
Chris Hazeltine, Parks & Recreation Director
Chuck McBride, Administrative Services Director
Elaine Lukey, Public Works Director
Glen Van Peski, Community & Economic Development Director
Heather Pizzuto, Library & Cultural Arts Director
James Wood, Environmental Manager
Jason Haber, Assistant to the City Manager
John Maashoff, Public Works Manager
Julie Clark, Human Resources Director
Kevin Branca, Finance Director
Kristina Ray, Communication Manager
Michael Davis, Fire Chief
Morgen Fry, Secretary to the City Manager
Neil Gallucci, Police Chief
Nick Lourian, Information Technology Director
Sheila Cobian, City Clerk Services Manager
Wendy Chambers, Utilities Director
Boards and Commission Chairs
Aaron Alter, Arts Commission
Linda Petrucci, Beach Preservation Committee
Timothy Stripe, Carlsbad Golf Lodging Business Improvement District
Timothy Stripe, Carlsbad Tourism Business Improvement District Board
Vacant, Historic Preservation Commission
Vacant, Housing Commission
Beth Hulsart, Library Board of Trustees
Matt Simons, Parks & Recreation Commission
Jeff Segall, Planning Commission
Ray Pearson, Senior Commission
Chuck Hunter, Traffic Safety Commission
Vacant, Underground Utility Advisory Committee
City Attorney City Manager
ELECTORATE
City Treasurer
KEY
Elected
Council Appointed
Council Appointed
Organization Chart
City CouncilCity Clerk
Arts
Commission
Beach
Preservation
Committee
Senior
Commission
Parks & Rec
Commission
Library Board
of
Trustees
HistoricPreservationCommission
Housing
Commission
Traffic Safety
Commission
Planning
Commission
Carlsbad Tourism
B.I.D. Advisory
Board
Carlsbad Golf
Lodging B.I.D.
Advisory Board
Community & Economic Development
Library & Cultural Arts
Parks & Recreation
Finance
Human Resources
Information Technology
Environmental Programs
General Services
Transportation Engineering & Construction
Utilities
Assistant City Manager Community Services Administrative Services Public Works Public Safety
Chief Operations
Officer
Fire
Police
Financial Section Financial Section
City Council City of Carlsbad Carlsbad, California
INDEPENDENT AUDITORS’ REPORT
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, 2017, 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 entity’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 entity’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.
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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, 2017, 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 and major special revenue funds for the year then ended in accordance with accounting principles generally accepted in the United States of America.
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, and Schedule of 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 nonmajor 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 nonmajor 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 combining and individual nonmajor 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.
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City Council City of Carlsbad, California Page Three
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 28, 2017 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 November 28, 2017
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Management’s Discussion and Analysis
Management of the City of Carlsbad (“city”) provides readers this overview and analysis of the financial activities of the
city for the fiscal year ended June 30, 2017. 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, included is a section with
combining fund statements that provides financial information about the non-major governmental funds, internal service
funds, and fiduciary funds, which are added together and presented in single columns in the basic financial statements.
The remainder of this overview section of management’s discussion and analysis (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.
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The Government-wide Financial Statements of the city are divided into two categories:
Governmental activities – Most of the city’s basic services, such as police, fire, public works, community services,
community development, and internal services are included here. Taxes, revenues from other governments and
agencies, income from property and investments, grants and contributions, and charges for services finance most
of these activities.
Business-type activities – The city charges fees to
customers to cover the cost of certain services it
provides. The city’s water, wastewater, solid waste
and municipal golf course operations are the
primary business-type activities.
Fund Financial Statements
The Fund Financial Statements provide more detailed
information about the city’s most significant funds – not
the city as a whole. Funds are accounting devices 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 services 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, and information technology.
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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, 2017, as shown below, was $1.743 billion. The city’s net position increased
by $45.3 million as compared to the prior fiscal year. This increase was derived in large part due to a significant increase
in deferred outflows related to pension costs as well as an increase in current and capital assets, a direct result of
revenues exceeding expenses for the year. Current and other assets were impacted by higher interest received (the yield
on the Treasurer’s portfolio is up for the year as well as higher cash balances), timing differences in the billing of city
utilities (higher accounts, net of allowances), and additional billings to the City of Vista for their share of the
Vista/Carlsbad Wastewater Interceptor project (due from other governments). The increase in capital assets is discussed
in more detail in the capital asset section of this MD&A. Changes in the various components associated with the
Government Accounting Standards Board (GASB) pension pronouncement impacted deferred outflows and inflows, as
well as an increase in the pension liability for the year. This GASB pronouncement required the city to put their net
pension liability on the books. Other liabilities decreased due to smaller year-end accruals from vendor invoices and the
repayment during the year of an error made by the State Board of Equalization which created an overpayment of sales
tax (this overpayment had been previously set aside in a liability to be repaid to the agency). The large decrease in long-
term debt outstanding was created by the city defeasing the outstanding golf course bonds during the year in order to
achieve long-term savings.
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 $1.743 billion at the close of the most recent fiscal year.
Total
Percentage
Change
2016 2017 2016 2017 2016 2017 2016-17
Current and other assets $624.2 $623.3 $145.8 $152.2 $770.0 $775.5 0.7%
Capital assets 789.0 788.9 350.3 360.7 1,139.3 1,149.6 0.9%
Total assets 1,413.2 1,412.2 496.1 512.9 1,909.3 1,925.1 0.8%
Deferred outflows 16.7 48.1 1.9 3.4 18.6 51.5 176.9%
Other liabilities 28.8 24.5 15.2 17.3 44.0 41.8 -5.0%
Net pension liability 128.8 155.2 11.0 12.7 139.8 167.9 20.1%
Long-term debt outstanding 1.0 0.8 33.7 15.9 34.7 16.7 -51.9%
Total liabilities 158.6 180.5 59.9 45.9 218.5 226.4 3.6%
Deferred inflows 10.9 7.0 0.9 0.4 11.8 7.4 -37.3%
Net position
Net investment in
capital assets 788.0 788.1 317.9 344.8 1,105.9 1,132.9 2.4%
Restricted 227.3 234.9 46.0 40.1 273.3 275.0 0.6%
Unrestricted 245.1 249.8 73.3 85.2 318.4 335.0 5.2%
Total net position $1,260.4 $1,272.8 $437.2 $470.1 $1,697.6 $1,742.9 2.7%
Total
CITY OF CARLSBAD'S NET POSITION
(in millions of dollars)
Governmental
Activities
Business-Type
Activities
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A large portion of the city’s net position (65 percent) reflects its net investment in capital assets (i.e. land, buildings,
machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding.
The city uses these capital assets to provide services to citizens; consequently, these assets are not available for future
spending. Although the city’s investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources since the capital assets themselves would not
be used to pay for these liabilities.
An additional portion of the city’s net position (15.8 percent) represents resources that are subject to external restrictions
on how they may be used. The remaining balance of unrestricted net position ($335 million) may be used to meet the
government’s ongoing obligations to citizens and creditors.
Just over 31 percent of the $249.8 million in unrestricted governmental activities net position is attributable to the
General Fund. This is a slight increase from the previous fiscal year, due to strong revenue growth (primarily in property
and transient occupancy taxes (TOT)) and a large increase in development activity (licenses and permits as well as charges
for services). These revenue increases were completely offset by additional transfers made by the General Fund to pay
off the golf course bonds and to fund the relocation of Fire Station No. 2. The city also made a $9 million additional
payment to CalPERS to help stabilize future CalPERS rates. Adjustments made to reflect the city’s pension obligations as
required by GASB helped to create the positive change in unrestricted governmental activities. The net investment in
capital assets for the city increased moderately during Fiscal Year (FY) 2016-17, due primarily to an increase in capital
assets in the city’s business-type activities. These assets primarily include water and sewer lines. A portion of business-
type net position represents the city’s municipal golf course. At the end of FY 2016-17, 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 $45.3 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:
$24.9 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 the economic recovery; 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.
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Changes in Net Position
Approximately 69 percent of the revenues of the city’s governmental funds are generated through taxes collected
(property, sales, transient occupancy, etc.), and just over 77 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
2016 2017 2016 2017 2016 2017 2016-17
Revenues
Program revenues
Charges for services $19.1 $21.1 $63.0 $68.7 $82.1 $89.8 9.4%
Operating grants and contributions 11.9 12.6 5.7 2.5 17.6 15.1 -14.2%
Capital grants and contributions 12.1 22.8 2.0 13.3 14.1 36.1 156.0%
General revenues
Property taxes 59.0 64.0 3.3 3.6 62.3 67.6 8.5%
Sales and use taxes 34.8 34.0 - - 34.8 34.0 -2.3%
Other taxes 33.0 33.5 - - 33.0 33.5 1.5%
Income from property and investments 11.9 2.0 3.2 0.7 15.1 2.7 -82.1%
Other 0.5 0.4 - 0.3 0.5 0.7 40.0%
Total revenues 182.3 190.4 77.2 89.1 259.5 279.5 7.7%
Expenses
General government 16.1 18.4 - - 16.1 18.4 14.3%
Public safety 50.5 56.0 - - 50.5 56.0 10.9%
Community development 17.6 19.5 - - 17.6 19.5 10.8%
Community services 33.6 34.7 - - 33.6 34.7 3.3%
Public works 37.5 34.3 - - 37.5 34.3 -8.5%
Carlsbad Municipal Water District - - 39.5 45.2 39.5 45.2 14.4%
Golf course - - 10.5 10.2 10.5 10.2 -2.9%
Wastewater - - 12.6 12.6 12.6 12.6 0.0%
Solid waste - - 3.0 3.3 3.0 3.3 10.0%
Total expenses 155.3 162.9 65.6 71.3 220.9 234.2 6.0%
Excess (deficiency) before transfers 27.0 27.5 11.6 17.8 38.6 45.3 17.4%
Transfers (1.2) (15.1) 1.2 15.1 - - 0.0%
Increase (decrease) in net position 25.8 12.4 12.8 32.9 38.6 45.3 17.4%
Beginning position 1,234.6 1,260.4 424.4 437.2 1,659.0 1,697.6 2.3%
Ending net position $1,260.4 $1,272.8 $437.2 $470.1 $1,697.6 $1,742.9 2.7%
Activities Activities Total
CITY OF CARLSBAD'S CHANGES IN NET POSITION
(in millions of dollars)
Governmental Business-Type
27
Ever since the city exited the Great Recession, the growth in the city’s “big three” revenue sources has remained strong.
This continued again in FY 2016-17, except for sales taxes. TOT continues to grow and, in the most recent two fiscal
years, the last of the “big three” taxes, property taxes, has shown some significant growth. An increase in assessed values
for residential, commercial and industrial properties (assessed values increased by 5.6 percent) led to higher property
tax revenues. This was the second time since the recession (a lagging indicator of the financial health of the city) that
the city saw growth in all three assessed value components. Higher room and occupancy rates throughout the city led
to higher TOT for the year. Sales tax revenues were down at one of the city’s major shopping venues due to a major
renovation project currently underway, and car sales showed very little growth during the year. On top of that, last fiscal
year saw the completion of the State of California’s “Triple Flip” program with some one-time additional revenues,
leading to an overall decrease in sales tax revenues for the year (timing difference). Income from property and
investments were heavily impacted by two factors: the unrealized losses created by adjusting the city’s investments to
their fair market value at June 30, 2017 (as required by GASB) and interest received from the Department of Finance
(DOF) for interest earned on unpaid mandated costs going back to 2004 in the previous fiscal year. These two factors
led to a large drop in income from property and investments. The end of statewide drought mandated conservation
measures led to an increase in water sales (charges for services) for the year. A large increase in the donation of
developer constructed assets (roads, pipelines, sidewalks, etc.) and the receipt of recycled water grants led to the
increase in capital grants and contributions. The City of Vista continues to reimburse the city for their portion of the
Vista/Carlsbad Wastewater Interceptor project. However, due to timing differences, this is reflected as a decrease in
operating grants and contributions for the business-type activities.
The total cost of all programs and services was just over $234.2 million in FY 2016-17. This was moderately higher than
the FY 2015-16 figure of $220.9 million. A factor in this increase was higher public safety expenses created by the
replacement of the regional communication system backbone, implementation of a pilot Park Ranger program, purchase
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of body worn cameras and associated storage costs, normal salary and benefit increases, and the filling of prior year
vacancies. The property acquisition to house the Carlsbad Service Center (CDBG funds), which will serve low income
residents and higher monthly rent subsidies in the Section 8 program, led to the increase in Community and Economic
Development costs. The increase in purchased water costs, due to decreased drought conservation efforts and the
purchase of more costly desalinated water in the Water Fund, created the increase in expenses for the year in business-
type activities.
General Government (8 percent)
This segment of the city is divided into three major groups: the Policy and Leadership group, the Administrative
Services group and non-departmental charges. The Policy and Leadership group encompasses all elected officials,
the chief executive offices for the city, Records Management, 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. Also included in non-departmental are any
Council directed special projects.
Public Safety (24 percent)
Public Safety has always been 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 also part of this major service area with a mission to enhance the quality of life by delivering exceptional services
in safeguarding lives, property, and our environment.
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Community & Economic Development (8 percent)
The mission of Community and Economic Development is helping people build a strong community by guiding and
facilitating high quality projects, preserving the environment, providing for and maintaining a strong economic 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 & Economic Development encompasses
Land Use Planning, Economic Development, the Hiring Center, Housing & Neighborhood Services, Land Development
Engineering, and Building.
Community Services (15 percent)
Community Services consists of the Libraries, Cultural Arts, and Parks & Recreation programs. The Library & Cultural
Arts Department 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. The Parks & Recreation Department offers comprehensive opportunities for meeting
the recreational and social needs and interests of the community by providing programs for all segments of the
population.
Public Works (15 percent)
Public Works is responsible for building and maintaining all of the infrastructure assets of the city. This service area
includes Transportation, Construction Management & Inspection, Storm Drain Engineering, Asset Management, the
Buena Vista Channel, Street Lighting, Traffic Operations, Planning and Signal Maintenance programs, Property &
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
linkages 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 the waste reduction and recycling components of the
Source Reduction and Recycling Element and Household Hazardous Waste Element to comply with state mandated
AB939, AB341, AB2176, AB1826 and SB1016 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 (19 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 29,000 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. The District also provides recycled water for irrigation
purposes.
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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.
Governmental Activities
The increase in net position for governmental activities was $12.4 million. This increase was generated by total revenues
of governmental activities of $190.4 million ($56.5 million in program revenues and $133.9 million in general revenues)
offset by $162.9 million in total costs of governmental activities, and $15.1 million in transfers to the Golf Course and
Solid Waste funds.
The table below presents the total cost of each of the city’s major programs, as well as each function’s program revenue
(fees generated by the activities, contributions, and intergovernmental aid). The net cost (the difference between
adjoining bars in the graph) shows the financial burden that was placed on the city’s taxpayers by each of these functions
(costs covered by general revenues).
Revenues are generated through several sources to cover the cost of the city’s programs. These revenues include fees
and charges paid by those who directly benefit from the programs ($21.1 million), grants and contributions from other
governments and organizations which subsidize certain programs ($35.4 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 $133.9
million.
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Community Development revenues are largely 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. Development activity was extremely strong during FY 2016-17, thereby offsetting a
large 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. The city
has entered into a new stage of its lifecycle, from a developing or growing stage to a mature stage. As the city continues
to mature and approach build-out, there will be fewer master planned projects being developed. In past years, these
projects constructed new facilities, roads, parks, and other city-owned infrastructure. The city is shifting its focus towards
maintenance of existing facilities, and will use funding sources such as the Infrastructure Replacement Fund to maintain
and replace these assets. However, there are still some master planned communities that were recently completed or
are near completion (La Costa Oaks Industrial Park and Robertson Ranch); the developers of these communities recently
dedicated infrastructure to the city, a requirement for development.
Business-type Activities
Program revenues for the city’s business-type activities totaled $84.6 million for the year, while program expenses
equaled $71.3 million.
Water program revenues are higher than program expenses, primarily due to reimbursements received for work done
on the Carlsbad desalination plant, capital contributions in the form of capital connection fees and developer constructed
assets donated to the city, and the receipt of recycled water grants. Revenues from water sales are higher than the
previous fiscal year due to the net effect of an average 5.25 percent increase in water rates charged to our customers
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(water and delivery charges) that went into effect in January 2016, a 4.85 percent revenue increase that went into effect
in January 2017, and the elimination of state mandated drought conservation efforts.
Wastewater program revenues exceeded program expenses due to personnel vacancies and higher than budgeted
revenues due to a rate increase that went into effect in January 2016 coupled with decreased conservation from the
enterprises’ volumetric based customers.
Capital construction expenses are spread over the life of an asset as annual depreciation charges (program expenses),
and therefore are not reflected as an expense in the year acquired.
The city’s golf course enterprise was in its tenth full year of operation. Golf course revenues were sufficient to fund
normal golf course operating expenses excluding depreciation expenses, resulting in a net loss of $2.7 million.
A more detailed discussion of each of the enterprises can be found in the Proprietary Funds Section.
Financial Analysis of the City’s Funds
As noted earlier, the city uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. In the current Comprehensive Annual Financial Report (CAFR), the implementation of 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. Such information is useful in assessing the city’s financing requirements. In particular, unassigned
fund balances may serve as a useful measure of a government’s net resources available for spending at the end of the
fiscal year.
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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 $553.3 million, up $700,000 from the year before.
Approximately 10 percent of this ($53.8 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 ($234.9 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 34 percent ($185.4 million) of
the city’s fund balance. Approximately 14 percent ($78.2 million) of the fund balance is unassigned, which is available
for spending at the city council’s discretion. Of the $78.2 million unassigned fund balance, the City Council has set aside
$10 million for economic uncertainty purposes. However, accounting standards require that this $10 million set aside
be shown as part of the city’s unassigned fund balance.
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
$171.4 million, a decrease of $22 million. The unassigned fund balance portion of the General Fund was $78.2 million, a
decrease of $16.2 million from last fiscal year. During the year, the General Fund made two large one-time transfers: a
$14.8 million transfer to the Golf Course Fund to pay off the outstanding construction bonds and a $10.5 million transfer
to the General Capital Construction Fund for the relocation of Fire Station No. 2. Finally, the city made an additional $9
million payment to CalPERS to assist in the stabilization of future retirement costs. Of the $9 million payment to CalPERS,
Total
Increase Percentage
(Decrease)Change
2016 2017
Revenues
Taxes $125.6 $129.9 $4.3 3.4%
Intergovernmental 1.1 1.2 0.1 9.1%
Licenses and permits 2.5 3.0 0.5 20.0%
Charges for services 9.0 10.3 1.3 14.4%
Fines and forfeitures 0.8 0.7 (0.1)-12.5%
Income from property and investments 4.9 2.6 (2.3)-46.9%
Miscellaneous 1.2 1.1 (0.1)-8.3%
Total revenues 145.1 148.8 3.7 2.5%
Expenditures
General government 16.8 25.7 8.9 53.0%
Interdepartmental charges (3.5)(3.4)0.1 -2.9%
Public safety 51.6 57.0 5.4 10.5%
Community development 10.3 10.6 0.3 2.9%
Community services 26.7 27.7 1.0 3.7%
Public works 15.7 16.0 0.3 1.9%
Total expenses 117.6 133.6 16.0 13.6%
Excess (deficiency) before transfers 27.5 15.2
Transfers out (12.6)(37.2)
Increase (decrease) in fund balance 14.9 (22.0)
Beginning fund balance 178.5 193.4
Ending fund balance $193.4 $171.4
2016-17
Total
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GENERAL FUND
(in millions of dollars)
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$4.5 million was paid for out of a previously assigned fund balance and $5.5 million was funded through the current year
surplus. These additional expenditures were heavily offset by the growth in several key revenues during the year:
property taxes, TOT, and development-related revenues (licenses and permits as well as charges for services). The
economy continues to improve since the end of the Great Recession. This was evident as development within the city
continued on its strong course. As the city approaches buildout, several of the remaining large residential master planned
communities and industrial/commercial parks saw increased construction activity leaving only a small portion of the city
undeveloped. This pace is projected to continue for at least another fiscal year, until things temper to a much slower
level. One significant decrease in General Fund revenues was due to lower income from property and investments. The
majority of this decrease was due to the impacts of reflecting the city’s investments at their fair market value on June
30, 2017 (as required by GASB), which resulted in an unrealized loss in this fiscal year. This is a temporary adjustment
that is only required to be made on June 30th each fiscal year and then reversed each July 1st.
In the city’s FY 2016-17 budget, expenditures were expected to increase 4.8 percent over the FY 2015-16 budget to
$141.8 million. The total personnel budget for FY 2016-17 was $87.7 million, which was 5.5 percent more than the
previous year’s personnel budget of $82.2 million. The total maintenance and operations (M&O) budget for FY 2016-17
was $42.1 million, which was 7.3 percent higher than the previous year’s budget of $39.2 million. The increase in
personnel budgets was based on previously negotiated salary and benefit increases, the net addition of 8.25 new staff
members (full-time, limited-term and part-time staff), and projected retirement rate increases. Smaller increases were
projected for health insurance and workers’ compensation. Higher M&O budgets reflected increased internal service
fund charges (information technology, risk management, fleet, etc.), general inflationary adjustments, costs associated
with succession planning, expenditure enhancements (police body cameras, Coastal Trolley Study, implementation of
the Climate Action Plan, additional vehicles for Community Service Officers, expansion of the youth basketball program,
mobile library services from a Library Book Bike, a lobbyist and community outreach for the Village Double Tracking
project, a parking study, etc.), and “out-of-block” increases (internal service fund charges, election expenses, ambulance
collection fees, bank fees, animal control, weed abatement, plan check services, recreation class instructors, land
management, and street lighting costs). Capital outlay budgets totaled $300,000 for the year, with a majority of this
budget for facility access control upgrades, vehicles and electric vehicle charging stations. Transfers out of the General
Fund were budgeted at $11.7 million, a $400,000 decrease from the prior fiscal year. This decrease was due to the net
effect of not transferring funds to the Golf Course Fund to assist with their debt payments combined with an increase in
the annual transfer to the Infrastructure Replacement Fund (IRF) (this transfer represents 6.5 percent of budgeted
General Fund revenues) and the Workers’ Compensation Fund. Adding to the adopted budget of $141.8 million for the
General Fund, approximately $24.3 million in unspent FY 2015-16 budgeted expenditures was carried over to FY 2016-
17, $8.5 million in open encumbrances as of June 30, 2016, and a $14.8 million transfer to the Golf Course Fund to pay
off the outstanding balance of their bonds.
The Community Facilities District (CFD) No. 1 Fund continues to collect assessments for the future construction of city
infrastructure and facilities.
The General Capital Construction (GCC) Fund used a portion of its existing fund balance to fund public beach access
improvements and the finish the two municipal libraries remodeling projects.
The fund balance in the IRF 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 IRF,
including the traffic signal monitoring program, several traffic signals, the replacement of synthetic turf at Pine Avenue
Park, the replacement of scoreboards at several city parks, the replacement of aging drainage pipes, and various
refurbishments at the Faraday Center and City Hall.
The Public Facilities Construction Fund (PFF) used a portion of its existing fund balance for the completion of new medians
on El Camino Real, and the initiation of the addition of new park amenities at Pine Avenue Park, Poinsettia Park and Leo
Carrillo Park. However, due to a high level of development during the year in the city, the contributions received from
developers exceeded the costs for these projects.
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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.
Proprietary Funds
The purpose of the city’s proprietary funds is to provide short- and long-term financial information about the city’s
business-type activities. The analysis focuses on the determination of operating income, changes in net position (cost
recovery), financial position, and cash flows.
CMWD funds had an operating gain of approximately $1.8 million for the year. Operating revenues were approximately
$46.8 million and operating expenses were approximately $45 million. One of the larger factors in the operating gain
was the result of reimbursements received for work done on the Carlsbad desalination plant. Water revenues were up
for the year due to an increase in water sales; a direct correlation with reduced drought conservation measures. CMWD
saw a 6.1 percent increase in water sales after Governor Brown eliminated the mandatory water reduction measures as
a result of record breaking rainfall last winter. The increase in sales, coupled with the approval of water rate increases
(5.25 percent in January 2016 and about 4.85 percent in January 2017), led to higher water sale revenues. The cost of
purchased water from the Metropolitan Water District and the San Diego County Water Authority (suppliers of the
CMWD’s potable water) continues to increase and, therefore, CMWD rates must increase to cover the added cost. The
increase in purchased water costs due to decreased drought conservation efforts and the purchase of more costly
desalinated water led to the $5.7 million increase in operating expenses. Decreases in non-operating revenues from
investment earnings partially offset by property tax receipts reduced the operating gain, resulting in income before
transfers and capital contributions of $5.8 million.
In the tenth year of operation, the Golf Course Fund had an operating loss of $3 million, primarily due to depreciating
the enterprise's assets ($3.5 million). When golf course operating revenues are not sufficient to cover golf course
operating expenses, the General Fund will make contributions in the form of lease payments to pay for the shortfall.
Food and beverage sales at the golf course restaurant (The Canyons) remain strong, while golf revenues remain flat.
The Wastewater Funds had an annual operating gain of $1.1 million for the fiscal year. Total revenues from operations
were down by $2.5 million. This was the net effect of $3.1 million in reimbursements from the City of Vista for their
share of the Vista/Carlsbad Wastewater Interceptor project in the prior fiscal year, partially offset by a $500,000 increase
in charges for wastewater services. The small decrease in operating expenses was predominantly due to a decrease in
staffing costs resulting from the reallocation of staff from the Wastewater operation to other operations, to better reflect
each operations workload. Non-operating revenues of $98,000 added to the operating income, resulting in a net gain of
$1.2 million before transfers and capital contributions.
Solid Waste Operations and Storm Water Programs are combined on the city’s financial reports, and showed a net
operating income of $223,000 for the year. Revenues were essentially the same as the previous fiscal year. Expenses
for the year reflected a slight increase. Normal increases in personnel and maintenance and operations expenses,
combined with increased internal service chargebacks, accounted for this variance.
The unrestricted net position for the Water, Golf Course, Wastewater, and Solid Waste Operations at the end of the year
amounted to $84.5 million, or approximately 18 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 $40.1 million, or 8.5 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 position deficit balance in the Golf Course Fund
36
represents funds advanced from the city’s General Fund that were used to fund construction, former operating losses
and debt expenses of the municipal golf course.
General Fund Budgetary Highlights for Fiscal Year 2016-17
Management monitors revenues during the year and updates estimated revenue figures when new information is
received by the city. General Fund revenue estimates were modified moderately during the year, as compared to the
originally budgeted estimates. Some of the factors that led to the $1.9 million increase in revenue estimates included:
several new federal and state grants were applied for and received during the year;
increased property tax revenues due to revised revenue estimates received by the County of San Diego after
the budget had been adopted by the City Council; and
several new master planned communities and a spike in industrial/commercial development led to higher
building permit and associated revenues (licenses and permits, as well as charges for services).
The increase from the total original expenditure budget to the final budget amounted to $12.4 million, due primarily
to:
the appropriation of grant money received;
sales tax audit expenses;
developer funded studies;
the appropriation of mutual aid response overtime reimbursements received;
the appropriation of additional building inspection revenues received; and
additional large payments made to CalPERS in order to help stabilize future retirement costs.
Additional transfers were budgeted for during the year to assist with the funding of the relocation of Fire Station No. 2
and the defeasance of the outstanding golf course bonds.
The difference between the final budgeted expenditures and the actual expenditures for the year (on a budgetary basis)
of $30.4 million can be generally summarized as follows:
Interdepartmental charges were $78,000 below estimates, which are offset against expenditures for reporting
purposes in the financial statements.
$30.3 million in savings by the various major service areas within the city. 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 $30.3 million in savings, $24.9 million will be carried forward into FY 2017-18 and is planned to be used
for:
Talent Management initiatives;
staff development including training and coaching;
succession planning;
completion of a new permitting and business license implementation;
utility billing system upgrade;
Human Capital Management System (HCMS) upgrade;
a new Enterprise Resource Planning system;
continuing the implementation of the new permitting and business license system;
new laptops and office furniture for Human Resources;
37
new office furniture in the City Clerk’s, City Attorney’s, City Manager’s, and Community & Economic
Development offices, and the Senior Center;
new breathing apparatus units for the Fire Department;
the purchase and training of a new K-9 unit;
new command post radios, air cards for the license plate recognition cameras, and new audiovisual
equipment;
costs associated with creating desk manuals and process documentation in Community & Economic
Development;
events to help address homelessness in the city;
activity management software for Community Services;
improved signage for all library facilities;
funding of community public art projects;
engineering manual update;
implementation of the Public Works strategic plan;
minor building renovations at city facilities; and
other one-time capital outlay items, as needed, throughout the city.
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 FY 2016-17, 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.
Total
Percentage
Change Change
2016 2017 2016 2017 2016 2017 2016-17 2016-17
Land $152.2 $153.1 $9.4 $9.4 $161.6 $162.5 $0.9 0.6%
Construction in progress 16.7 7.8 27.5 44.2 44.2 52.0 7.8 17.6%
Buildings and other structures 123.1 123.7 40.7 40.7 163.8 164.4 0.6 0.4%
Improvements other than buildings 80.6 81.5 51.1 51.1 131.7 132.6 0.9 0.7%
Machinery and equipment 36.2 40.5 3.5 3.7 39.7 44.2 4.5 11.3%
Infrastructure 687.0 711.4 330.0 334.9 1,017.0 1,046.3 29.3 2.9%
Wastewater treatment facility - - 57.3 57.5 57.3 57.5 0.2 0.3%
Intangibles 4.1 5.0 - - 4.1 5.0 0.9 22.0%
1,099.9 1,123.0 519.5 541.5 1,619.4 1,664.5 45.1 2.8%
Accumulated depreciation (310.9) (334.1) (169.2) (180.8) (480.1) (514.9) (34.8) 7.2%
Total $789.0 $788.9 $350.3 $360.7 $1,139.3 $1,149.6 $10.3 0.9%
Activities Activities Total
CITY OF CARLSBAD'S CAPITAL ASSETS
(in millions of dollars)
Governmental Business-Type
38
Some of this year’s major capital asset additions included:
El Camino Real widening from Tamarack to Chestnut;
Robertson Ranch East Village donated assets (sewer lines, water lines, storm drain and streets);
the EnerGov permitting software;
the city’s share of the countywide regional communication system;
Pine Avenue synthetic turf;
a license plate reader camera system;
golf cart fleet (89 carts);
29 vehicles;
two dump trucks;
one CAT excavator;
one asphalt roller;
the initiation of the expansion of the recycled water facility;
several waterline projects; and
several storm drain projects.
In addition to carrying forward appropriations of $200.4 million for previously budgeted projects, the city’s FY 2017-18
capital budget appropriates an additional $54 million for capital projects. These additional appropriations are principally
for beach access repair/upgrade from Pine Avenue to Tamarack; the widening of El Camino Real between Cassia Road
and Camino Vida Roble; sidewalk/street construction in the older areas of Carlsbad; rehabilitation work at the Faraday
Center; initiating the relocation of Fire Station No. 3; initial stages of the new Maintenance and Operations Center; city
facility refurbishments; the pavement management program; Maerkle Reservoir floating cover replacement and pump
station improvements; miscellaneous street projects; continuing the implementation of an adaptive traffic signal
program; continuation of the street lighting replacement program; enhancing the wastewater collection system;
continuation of the Vista/Carlsbad wastewater interceptor; additional water and recycled water lines; the recycled water
reservoir repair/replacement program; several drainage projects; improvements at the Encina water pollution control
facility; and miscellaneous civic projects, loans and repayments. These projects will be financed by development fees,
infrastructure and replacement transfers from the General Fund, special district fees and taxes, Water and Wastewater
replacement reserves and other sources, including grants and contributions from other agencies. More detailed
information about the city’s capital assets is presented in Note 6 to the financial statements and in the city’s Capital
Improvement Program (CIP) document, which can be obtained from the Administrative Services Department.
Long Term Debt
At year-end, the city had $16.7 million in capital leases and loans, a decrease of $18 million from last year, as shown in
the table above. The city defeased the outstanding golf course bonds during the year of $15.9 million. In addition,
regular payments were made on all of the city’s outstanding capital leases and loans. More detail about the city’s long-
term liabilities is presented in Note 7 to the financial statements.
Total
Percentage
Change
2016 2017 2016 2017 2016 2017 2016-17
Bonds $0.0 $0.0 $15.9 $0.0 $15.9 $0.0 -100.0%
Loans - - 17.6 15.9 17.6 15.9 -9.7%
Capital leases 1.0 0.8 - - 1.0 0.8 100.0%
Adjusted by: premiums/discounts - - 0.2 - 0.2 - -100.0%
Total $1.0 $0.8 $33.7 $15.9 $34.7 $16.7 -51.9%
Activities Activities Total
CITY OF CARLSBAD'S OUTSTANDING DEBT
(in millions of dollars)
Governmental Business-Type
39
Economic Factors and Next Year’s Budgets and Rates for Fiscal Year 2017-18
The State of California adopted its FY 2017-18 Annual Budget with the following provisions affecting the city:
o Governor Brown submitted a balanced state budget in January 2017 for FY 2017-18 using projected revenues
of $127.7 billion to cover $124 billion in expenditures.
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.
o The “rainy day” fund is projected to grow by $1.8 billion during FY 2017-18.
o The budget continues to provide funding for the rising state minimum wage, expansion of health care coverage
to undocumented children and Californians covered under the Affordable Care Act, and a new earned income
tax credit, a new allowance under the California tax code.
o California voters approved to make permanent the income tax increases under Prop 30.
o Pension costs at the state level are expected to nearly double from FY 2017-18 to FY 2023-24. To mitigate this
growing expense, the budget includes a supplemental payment to CalPERS of $6 billion.
Net assessed values in the city stand at over $30.9 billion, a 7.2 percent increase from the prior fiscal year, due to
new construction and escalating home and commercial property values.
Sales tax revenues are projected to increase by 8.3 percent, due primarily to the timing of revenues at the expiration
of the “Triple Flip.” Another factor in the projected increase in sales tax revenues is the newly renovated The
Shoppes at Carlsbad. Westfield (the former owner of the mall) sold this property in 2015. The new owners (Rouse
Properties) are in the final stages of a major renovation and should have it completed by the fall of 2017.
Prolonged weakness in global demand and a strong dollar continue to place a drag on tourism, however, a report by
Tourism Economics that focuses on San Diego tourism indicates that occupancy growth will remain at less than one
percent for the next two years and average room revenues will increase by over three percent annually for the same
time period.
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 FY 2017-18 budget
is a four percent increase in the pension contributions for miscellaneous employees and a 5.4 percent increase in
the pension contributions for safety employees.
Median home prices for single-family residences in Carlsbad have decreased slightly by 1.5 percent from the first
quarter of 2016 ($827,000) to the first quarter of 2017 ($814,000).
City departments were given maximum increases of 2 percent for maintenance and operational funding to cover
changes in the Consumer Price Index (CPI) and additional funding for existing contractual obligations.
The city added 10 full-time positions, one limited-term position, 16.33 part-time positions and eliminated one full-
time position to better align staffing with the services the city provides.
Through Memorandums of Understanding (MOUs):
o The Carlsbad City Employees’ Association (CCEA) will receive an allocated share of a 4.0 percent raise/stipend
pool on December 31, 2017.
o Fire and General Management employees will receive an allocated share of a 4.0 percent raise/stipend pool on
December 31, 2017.
o Police Management employees will receive an allocated share of a 4.5 percent raise/stipend pool on December
31, 2017.
o The Carlsbad Firefighters Association (CFA) will receive a 2.0 percent base raise on January 1, 2018. Certain fire
classifications will receive a 3.3 percent base raise on January 1, 2018.
o The Carlsbad Police Officers Association (CPOA) will receive a 3.8 percent raise on January 1, 2018.
These factors were considered when preparing the city’s General Fund budget for FY 2017-18. Budgeted expenditures
are expected to increase 2.8 percent to $145.7 million. The total personnel budget for FY 2017-18 is $90.4 million, which
is 2.8 percent more than the previous year’s personnel budget of $87.7 million. The total maintenance and operations
(M&O) budget for FY 2017-18 is $42.7 million, which is 1.5 percent higher than the previous year’s budget of $42.1
million. The increase in personnel budgets is based on previously negotiated salary and benefit increases and the net
40
addition of nine full-time, one limited-term and 16.33 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.
Despite the two percent escalator provided for M&O costs, the FY 2017-18 budget was offset by decreases of one-time
expenditures from the previous fiscal year, and decreases in the internal service charges. Higher M&O budgets general
inflationary adjustments; higher bank credit card fees; increases in legal professional services and citywide training and
development; additional costs associated with nuisance abatement; consulting services to assist with documentation of
business process and procedures related to the new permitting system; operating costs associated with several new park
facilities; fire engine equipment and a chemical detox unit to remove toxic chemicals from firefighters; and upgrades to
the Safety Training Center audio visual equipment. Transfers out of the General Fund are budgeted at $12.5 million, an
$800,000 increase from the prior fiscal year. This increase is due primarily to increases in the transfers from the General
Fund to the IRF ($510,000) and the Median Maintenance and Street Tree Maintenance Special Revenue Funds
($250,000). Adding to the adopted budget of $145.7 million for the General Fund, approximately $24.9 million in unspent
FY 2016-17 budgeted expenditures will be carried over to FY 2017-18, as well as $8 million in open encumbrances as of
June 30, 2017.
During the current fiscal year, the unassigned fund balance in the General Fund decreased by $16.2 million to $78.2
million. During the fiscal year, the General Fund transferred $14.8 million to the Golf Course Fund to pay off the
associated bonds 20 years early. This decision was made as the average coupon on the bonds was 4.5 percent, while the
average yield on the Treasurer’s portfolio over the last couple of years has hovered around one percent. The city also
made an additional $9 million payment to CalPERS to help stabilize future retirement costs. The city used $4.5 million of
the $10 million previously assigned to help address future retirement costs. These additional expenditures were partially
offset by savings achieved in the General Fund due to fiscal discipline, a significant increase in assessed values (higher
property taxes), a strong tourism season (increased TOT revenues), and higher than anticipated development within the
city (increased development related services and building permit revenues). Based on FY 2017-18 projections, the
unassigned General Fund balance is expected to grow by approximately $9.2 million.
The city took an additional step in FY 2014-15 to provide a tool that will allow the city to weather economic downturns.
A General Fund set aside of $10 million was made by the City Council as an Economic Uncertainty Reserve, which can be
used to shore up revenue shortfalls during normal recessions. During FY 2015-16, the City Council took another step to
help stabilize future retirement costs (CalPERS rates) by assigning $10 million of the General Fund to assist in these
efforts. After the additional payment made to CalPERS in FY 2016-17, the CalPERS stability assignment is now $5.5
million.
Projected revenues are currently sufficient to build the projects listed in the FY 2017-18 CIP.
The city’s business-type activities reflect the following:
The combined fixed and variable costs of water purchased from the San Diego County Water Authority are projected
to rise about 4.3 percent in total for FY 2017-18. In November 2016, a public meeting was held to determine how
much water rates would increase effective January 1, 2017 and January 1, 2018. The proposed rate increases are
needed to fund the additional cost of purchased water, and to maintain an adequate reserve balance.
No wastewater rate increases are proposed for calendar year 2018. Better than anticipated financial results in FY
2016-17 mitigated the need for a rate increase.
The golf course bonds were paid off in September 2016. As a result, the operation will 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 citizens, taxpayers, customers, investors, and creditors with a general
overview of the city’s finances and to demonstrate the city’s accountability for the money it receives. If you have any
questions about this report or need additional information, contact the Administrative Services Department,
1635 Faraday Avenue, Carlsbad, CA 92008, 760-602-2430, or visit us online at www.carlsbadca.gov.
41
June 30, 2017
Governmental Business-Type
ASSETS Activities Activities Total
Cash and investments 518,383,452 $ 184,927,010 $ 703,310,462 $
Receivables:
Interest 1,773,167 631,321 2,404,488
Taxes 10,295,484 27,310 10,322,794
Other 1,227,851 704,312 1,932,163
Accounts, net of allowances 83,119 10,419,664 10,502,783
Due from other governments 343,124 9,682,179 10,025,303
Inventories 410,160 726,677 1,136,837
Prepaid items 1,292 21,170 22,462
Loan and reimbursement receivables, net of allowances 24,969,159 - 24,969,159
Due from Successor Agency 10,860,807 - 10,860,807
Deposits 25,000 - 25,000
Internal balances 54,963,339 (54,963,339) -
Subtotal 623,335,954 152,176,304 775,512,258
Capital assets:
Land 153,098,487 9,375,975 162,474,462
Construction in progress 7,774,678 44,229,764 52,004,442
Buildings and other structures 123,742,120 40,705,081 164,447,201
Improvements other than buildings 81,453,044 51,121,786 132,574,830
Machinery and equipment 40,432,960 3,711,152 44,144,112
Infrastructure 711,444,588 334,925,558 1,046,370,146
Wastewater treatment facility - 57,521,662 57,521,662
Intangible assets 5,017,448 - 5,017,448
Less accumulated depreciation (334,100,328) (180,853,632) (514,953,960)
Total capital assets 788,862,997 360,737,346 1,149,600,343
Total assets 1,412,198,951 512,913,650 1,925,112,601
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - pension related items 48,050,715 3,438,754 51,489,469
The notes to the financial statements are an integral part of this statement.
Primary Government
Statement of Net Position
42
June 30, 2017
Governmental Business-Type
LIABILITIES Activities Activities Total
Accrued liabilities 11,820,401 $ 5,846,808 $ 17,667,209 $
Accrued interest payable - 72,187 72,187
Due to other governments - 8,971,455 8,971,455
Estimated claims payable 10,395,448 - 10,395,448
Deposits payable 528,555 2,293,863 2,822,418
Unearned revenue 1,722,038 124,606 1,846,644
Noncurrent liabilities:
Net pension liability 155,221,029 12,654,621 167,875,650
Due within one year 196,969 1,510,433 1,707,402
Due in more than one year 587,580 14,390,630 14,978,210
Total liabilities 180,472,020 45,864,603 226,336,623
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - pension related items 6,960,292 400,979 7,361,271
NET POSITION
Net investment in capital assets 788,078,448 344,836,283 1,132,914,731
Restricted for:
Capital assets 183,244,819 40,097,854 223,342,673
Lighting and landscaping districts 6,526,874 - 6,526,874
Affordable housing 40,527,524 - 40,527,524
Habitat and agricultural mitigation management 1,805,069 - 1,805,069
Other purposes 2,818,349 - 2,818,349
Unrestricted 249,816,271 85,152,685 334,968,956
Total net position 1,272,817,354 $ 470,086,822 $ 1,742,904,176 $
The notes to the financial statements are an integral part of this statement.
Primary Government
Statement of Net Position (Continued)
43
Statement of Activities
For the Year Ended June 30, 2017
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary government:
Governmental activities:
General government 18,374,381 $ 327,035 $ 1,358,332 $ 605 $
Public safety 55,993,808 4,646,438 394,235 -
Community development 19,457,631 6,350,029 8,035,516 336,133
Community services 34,754,541 5,803,819 670,707 1,707,598
Public works 34,316,940 3,952,422 2,171,489 20,744,567
Interest and fiscal charges on long-term debt 3,215 - - -
Total governmental activities 162,900,516 21,079,743 12,630,279 22,788,903
Business-type activities:
Carlsbad Municipal Water District 45,219,261 44,816,640 2,021,855 9,015,116
Golf course 10,210,684 7,119,069 - -
Wastewater 12,626,031 13,466,800 279,236 4,306,723
Solid waste 3,271,556 3,302,612 169,835 -
Total business-type activities 71,327,532 68,705,121 2,470,926 13,321,839
Total primary government 234,228,048 $ 89,784,864 $ 15,101,205 $ 36,110,742 $
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
Net position at end of year
The notes to the financial statements are an integral part of this statement.
Program Revenues
44
Governmental Business-type
Activities Activities Total
(16,688,409) $ -$ (16,688,409) $
(50,953,135) - (50,953,135)
(4,735,953) - (4,735,953)
(26,572,417) - (26,572,417)
(7,448,462) - (7,448,462)
(3,215) - (3,215)
(106,401,591) - (106,401,591)
- 10,634,350 10,634,350
- (3,091,615) (3,091,615)
- 5,426,728 5,426,728
- 200,891 200,891
- 13,170,354 13,170,354
(106,401,591) 13,170,354 (93,231,237)
63,987,996 3,568,505 67,556,501
33,999,152 - 33,999,152
22,266,977 - 22,266,977
5,475,263 - 5,475,263
4,327,839 - 4,327,839
1,393,460 - 1,393,460
1,975,200 749,267 2,724,467
450,854 369,992 820,846
(15,066,962) 15,066,962 -
118,809,779 19,754,726 138,564,505
12,408,188 32,925,080 45,333,268
1,260,409,166 437,161,742 1,697,570,908
1,272,817,354 $ 470,086,822 $ 1,742,904,176 $
Primary Government
Changes in Net Position
Net Revenue (Expense) and
45
Balance Sheet
Governmental Funds
June 30, 2017
Community General
General Facilities Capital
ASSETS Fund District No. 1 Construction
Cash and investments 113,104,250 $ 79,490,324 $ 47,801,823 $
Receivables:
Interest 576,036 272,456 -
Taxes 10,291,182 4,302 -
Other 1,035,832 - -
Accounts, net of allowances 83,119 - -
Due from other governments 111,969 - -
Inventories 17,546 - -
Prepaid items - - -
Loans receivable, net of allowances 69,952 - -
Deposits 25,000 - -
Due from Successor Agency 10,860,807 - -
Advances to other funds 55,911,992 2,070,958 -
Total assets 192,087,685 $ 81,838,040 $ 47,801,823 $
LIABILITIES
Accrued liabilities 4,699,225 $ 28,171 $ 158,638 $
Deposits payable 67,658 - -
Advances from other funds - - -
Unearned revenue 1,372,038 - -
Total liabilities 6,138,921 28,171 158,638
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - sales tax 1,397,466 - -
Unavailable revenue - grants 61,579 - -
Unavailable revenue - interest on advances 13,108,925 - -
Total deferred inflows of resources 14,567,970 - -
FUND BALANCES
Nonspendable 53,751,372 - -
Restricted - 81,809,869 -
Committed 1,000,000 - -
Assigned 38,438,659 - 47,643,185
Unassigned 78,190,763 - -
Total fund balances 171,380,794 81,809,869 47,643,185
Total liabilities, deferred inflows of
resources, and fund balances 192,087,685 $ 81,838,040 $ 47,801,823 $
The notes to the financial statements are an integral part of this statement.
46
Public Other Total
Infrastructure Facilities Governmental Governmental
Replacement Construction Funds Funds
99,150,985 $ 31,105,621 $ 101,345,559 $ 471,998,562 $
339,980 106,592 339,604 1,634,668
- - - 10,295,484
- - 192,019 1,227,851
- - - 83,119
- - 231,155 343,124
- - - 17,546
- - 1,292 1,292
- - 24,899,207 24,969,159
- - - 25,000
- - - 10,860,807
- 6,450,000 - 64,432,950
99,490,965 $ 37,662,213 $ 127,008,836 $ 585,889,562 $
140,174 $ 59,822 $ 1,762,235 $ 6,848,265 $
- - 459,897 527,555
- - 8,798,078 8,798,078
- - 350,000 1,722,038
140,174 59,822 11,370,210 17,895,936
- - - 1,397,466
- - 128,251 189,830
- - - 13,108,925
- - 128,251 14,696,221
- - 1,292 53,752,664
- 37,602,391 115,509,083 234,921,343
- - - 1,000,000
99,350,791 - - 185,432,635
- - - 78,190,763
99,350,791 37,602,391 115,510,375 553,297,405
99,490,965 $ 37,662,213 $ 127,008,836 $ 585,889,562 $
47
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2017
Total fund balances - governmental funds.553,297,405 $
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 778,051,555
Internal service funds 10,811,442
Total capital assets 788,862,997
Deferred outflows are not an available resource and, therefore, are not reported in the funds.
Governmental funds 46,217,138
Internal service funds 1,833,577
Total deferred outflows 48,050,715
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 35,152,444
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.(671,533)
Internal service fund net position included as part of total capital assets (10,811,442)
Internal service fund net position included as part of deferred outflows (1,833,577)
Internal service fund net position included as part of long-term liabilities 8,259,968
Internal service fund net position included as part of deferred inflows 780,026
Net internal service fund net position 30,875,886
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.13,108,925
A portion of the taxes receivable is not available to pay for current-period expenditures and, therefore,
is not recognized in the funds.1,397,466
A portion of deferred grant revenues are not available to pay for current-period expenditures and, therefore,
are not recognized in the funds.189,830
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 (147,745,610)
Internal service funds (8,259,968)
Total long-term liabilities (156,005,578)
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 (6,180,266)
Internal service funds (780,026)
Total deferred inflows (6,960,292)
Net position of governmental activities.1,272,817,354 $
The notes to the financial statements are an integral part of this statement.
48
49
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2017
Community General
General Facilities District Capital
Fund No. 1 Construction
Revenues:
Taxes 129,935,750 $ 2,059,001 $ -$
Intergovernmental 1,147,187 - -
Licenses and permits 3,034,004 - -
Charges for services 10,267,153 - -
Fines and forfeitures 696,784 - -
Income from property and investments 2,594,077 183,429 -
Contributions from property owners - 823,009 21,222
Donations - - -
Miscellaneous 1,105,412 - -
Total revenues 148,780,367 3,065,439 21,222
Expenditures:
Current:
General government 25,670,897 99,521 -
Less: interdepartmental charges (3,344,623) - -
Public safety 56,976,934 - -
Community development 10,565,523 - -
Community services 27,718,348 - -
Public works 16,018,571 - -
Capital outlay - 58,271 2,396,960
Debt service:
Interest and fiscal charges - - -
Total expenditures 133,605,650 157,792 2,396,960
Excess (deficiency) of revenues
over (under) expenditures 15,174,717 2,907,647 (2,375,738)
Other financing sources (uses):
Transfers in 10,000 - 10,500,000
Transfers out (37,223,962) - -
Total other financing sources (uses)(37,213,962) - 10,500,000
Net change in fund balances (22,039,245) 2,907,647 8,124,262
Fund balances at beginning of year 193,420,039 78,902,222 39,518,923
Fund balances at end of year 171,380,794 $ 81,809,869 $ 47,643,185 $
The notes to the financial statements are an integral part of this statement.
50
Public Other Total
Infrastructure Facilities Governmental Governmental
Replacement Construction Funds Funds
-$ -$ 2,170,007 $ 134,164,758 $
- - 10,816,201 11,963,388
- - - 3,034,004
- - 4,041,871 14,309,024
- - 43,129 739,913
305,585 158,639 602,853 3,844,583
- 6,342,879 6,142,467 13,329,577
- - 349,452 349,452
- - 362,066 1,467,478
305,585 6,501,518 24,528,046 183,202,177
- - 2,154,667 27,925,085
- - - (3,344,623)
- - 351,934 57,328,868
- - 8,626,947 19,192,470
- - 2,019,459 29,737,807
- - 1,330,120 17,348,691
2,834,779 766,176 11,546,940 17,603,126
- - 5,161 5,161
2,834,779 766,176 26,035,228 165,796,585
(2,529,194) 5,735,342 (1,507,182) 17,405,592
9,460,000 - 878,916 20,848,916
- - (388,916) (37,612,878)
9,460,000 - 490,000 (16,763,962)
6,930,806 5,735,342 (1,017,182) 641,630
92,419,985 31,867,049 116,527,557 552,655,775
99,350,791 $ 37,602,391 $ 115,510,375 $ 553,297,405 $
51
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2017
Net change in fund balances - total governmental funds.641,630 $
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 14,820,725
Depreciation expense (21,991,236)
Governmental funds do not reflect the donation of capital assets as revenues.7,077,494
Unpaid interest income on advances to other funds is not a current financial resource, and therefore is
not recognized as revenue in the funds.202,490
A portion of the sales tax receivable and grant revenues are not available to pay for current-period
expenditures and, therefore, are not recognized in the funds.498,666
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 9,067
The net revenue of activities of internal service funds is reported with governmental activities.2,454,912
Adjustments made to the net pension liability do not use current financial resources and, therefore, are
not recognized in the funds.8,715,204
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.(20,764)
Change in net position of governmental activities.12,408,188 $
The notes to the financial statements are an integral part of this statement.
52
General Fund
Variance With
Final Budget -
Actual Amounts Over
Original Final (Budgetary Basis)(Under)
Revenues:
Taxes 125,397,000 $ 125,928,000 $ 129,935,750 $ 4,007,750 $
Intergovernmental 834,000 910,000 1,147,187 237,187
Licenses and permits 2,269,000 3,639,000 3,034,004 (604,996)
Charges for services 8,956,000 9,054,000 10,267,153 1,213,153
Fines and forfeitures 767,000 749,000 696,784 (52,216)
Income from property and investments 3,806,000 3,663,000 4,130,424 467,424
Miscellaneous 858,000 870,000 1,105,412 235,412
Total revenues 142,887,000 144,813,000 150,316,714 5,503,714
Expenditures:
Current:
General government 38,219,781 46,078,180 27,705,003 (18,373,177)
Less: interdepartmental charges (3,261,403) (3,267,000) (3,344,623) (77,623)
Public safety 58,685,201 61,730,121 58,389,300 (3,340,821)
Community development 12,920,991 13,488,275 11,795,145 (1,693,130)
Community services 31,562,210 31,919,640 28,667,174 (3,252,466)
Public works 21,503,831 22,088,656 18,409,996 (3,678,660)
Total expenditures 159,630,611 172,037,872 141,621,995 (30,415,877)
Excess (deficiency) of revenues over (under)
expenditures (16,743,611) (27,224,872) 8,694,719 35,919,591
Other financing sources (uses):
Transfers in 10,000 10,000 10,000 -
Transfers out (11,684,000) (37,223,962) (37,223,962) -
Total other financing sources (uses)(11,674,000) (37,213,962) (37,213,962) -
Net change in fund balances (28,417,611) (64,438,834) (28,519,243) 35,919,591 $
Fund balance at beginning of year 193,420,039 193,420,039 193,420,039
Fund balance at end of year 165,002,428 $ 128,981,205 $ 164,900,796 $
The notes to the financial statements are an integral part of this statement.
Budgeted Amounts
For the Year Ended June 30, 2017
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
53
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
General Fund (Continued)
For the Year Ended June 30, 2017
Actual Amounts
(Budgetary Basis)
Revenues
Actual amounts (budgetary basis) “available for appropriation” from
the budgetary comparison schedule (previous page).150,316,714 $
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.(1,536,347)
148,780,367 $
Expenditures
Actual amounts (budgetary basis) “total charges to appropriations”
from the budgetary comparison schedule (previous page).141,621,995 $
Differences - budget to GAAP:
Encumbrances are shown in the year encumbered for budgetary purposes,
but in the year paid for financial reporting purposes.(8,016,345)
133,605,650 $
The notes to the financial statements are an integral part of this statement.
BUDGET-TO-GAAP RECONCILIATION
54
55
Statement of Net Position
Proprietary Funds
June 30, 2017
Carlsbad
Municipal Golf
ASSETS Water District Course Wastewater
Current assets:
Cash and investments 122,689,636 $ 1,800,260 $ 47,103,071 $
Receivables:
Interest 420,356 3,840 161,515
Taxes 27,310 - -
Other - 155,552 968
Accounts, net of allowances 7,644,186 1,674 1,980,755
Due from other governments 826,862 - 8,855,317
Inventories 548,778 163,590 14,309
Prepaid items 21,170 - -
Total current assets 132,178,298 2,124,916 58,115,935
Capital assets:
Land 1,905,206 4,841,667 2,629,102
Construction in progress 21,389,271 - 22,840,493
Buildings and other structures 20,636,100 20,068,981 -
Improvements other than buildings 2,322,549 42,670,657 6,128,580
Machinery and equipment 811,230 2,567,966 331,956
Infrastructure 222,179,603 - 112,745,955
Wastewater treatment facility - - 57,521,662
Intangible assets - - -
Less accumulated depreciation (73,697,471) (30,803,668) (76,352,493)
Total capital assets (net of accumulated
depreciation)195,546,488 39,345,603 125,845,255
Total noncurrent assets 195,546,488 39,345,603 125,845,255
Total assets 327,724,786 41,470,519 183,961,190
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - pension related items 2,142,010 - 851,251
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
56
Governmental
Enterprise Funds Activities -
Internal
Solid Service
Waste Totals Funds
13,334,043 $ 184,927,010 $ 46,384,890 $
45,610 631,321 138,499
- 27,310 -
547,792 704,312 -
793,049 10,419,664 -
- 9,682,179 -
- 726,677 392,614
- 21,170 -
14,720,494 207,139,643 46,916,003
- 9,375,975 -
- 44,229,764 -
- 40,705,081 -
- 51,121,786 -
- 3,711,152 25,577,480
- 334,925,558 -
- 57,521,662 -
- - 1,689,637
- (180,853,632) (16,455,675)
- 360,737,346 10,811,442
- 360,737,346 10,811,442
14,720,494 567,876,989 57,727,445
445,493 3,438,754 1,833,577
(Continued)
57
Statement of Net Position
Proprietary Funds (Continued)
June 30, 2017
Carlsbad
Municipal Golf
LIABILITIES Water District Course Wastewater
Current liabilities:
Accrued liabilities 2,100,235 442,115 2,354,332
Accrued interest payable 72,187 - -
Due to other governments 6,648,075 - 2,323,380
Estimated claims payable - - -
Current portion of long-term debt 1,510,433 - -
Total current liabilities 10,330,930 442,115 4,677,712
Noncurrent liabilities:
Deposits payable 142,302 613,396 1,538,165
Advance from other funds - 55,634,872 -
Unearned revenue 82,790 - 10,000
Net pension liability 7,353,361 - 3,306,162
Capital lease payable - - -
Loans payable 14,390,630 - -
Total noncurrent liabilities 21,969,083 56,248,268 4,854,327
Total liabilities 32,300,013 56,690,383 9,532,039
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - pension related items 100,362 - 201,561
NET POSITION
Net investment in capital assets 179,645,425 39,345,603 125,845,255
Restricted for:
Capital assets 30,062,207 - 10,035,647
Unrestricted 87,758,789 (54,565,467) 39,197,939
Total net position (deficit)297,466,421 $ (15,219,864) $ 175,078,841 $
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 -
58
Governmental
Enterprise Funds Activities -
Internal
Solid Service
Waste Totals Funds
950,126 5,846,808 4,972,136
- 72,187 -
- 8,971,455 -
- - 10,395,448
- 1,510,433 187,223
950,126 16,400,883 15,554,807
- 2,293,863 1,000
- 55,634,872 -
31,816 124,606 -
1,995,098 12,654,621 7,514,869
- - 557,876
- 14,390,630 -
2,026,914 85,098,592 8,073,745
2,977,040 101,499,475 23,628,552
99,056 400,979 780,026
- 344,836,283 10,066,343
- 40,097,854 -
12,089,891 84,481,152 25,086,101
12,089,891 $ 469,415,289 35,152,444 $
671,533
470,086,822 $
59
Statement of Revenues, Expenses and Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2017
Carlsbad
Municipal Golf
Water District Course Wastewater
Operating revenues:
Water sales 44,089,527 $ -$ -$
Wastewater service charges - - 13,466,800
Golf course operations - 7,119,069 -
Other charges for services 727,113 - -
Miscellaneous 2,021,855 - 279,236
Total operating revenues 46,838,495 7,119,069 13,746,036
Operating expenses:
Encina plant operations 1,017,275 - 3,709,178
Purchased water 23,188,770 - -
Golf course operations - 6,619,307 -
Depreciation 4,785,645 3,487,374 3,918,867
Fuel and supplies - - -
Claims and premiums expense - - -
Small equipment purchases - - -
General and administrative 16,068,108 - 5,040,691
Total operating expenses 45,059,798 10,106,681 12,668,736
Operating income (loss)1,778,697 (2,987,612) 1,077,300
Nonoperating revenues (expenses):
Income from property and investments 563,288 49,292 98,268
Miscellaneous - 202,583 -
Interest expense and fees (159,435) (104,003) -
Gain (loss) on sale of property 7,749 159,660 -
Property taxes 3,568,505 - -
Total nonoperating revenues (expenses)3,980,107 307,532 98,268
Income (loss) before transfers and capital
contributions 5,758,804 (2,680,080) 1,175,568
Transfers in - 14,811,100 -
Capital contributions:
Capital restricted fees and grants 5,946,583 - 2,436,238
Developer constructed assets 3,068,533 - 1,870,485
Other - - -
Change in net position 14,773,920 12,131,020 5,482,291
Total net position (deficit) at beginning of year 282,692,501 (27,350,884) 169,596,550
Total net position (deficit) at end of year 297,466,421 $ (15,219,864) $ 175,078,841 $
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 -
60
Governmental
Activities -
Internal
Solid Waste Totals Service Funds
-$ 44,089,527 $ -$
- 13,466,800 -
- 7,119,069 -
3,302,612 4,029,725 19,390,917
169,835 2,470,926 106,344
3,472,447 71,176,047 19,497,261
- 4,726,453 -
- 23,188,770 -
- 6,619,307 -
- 12,191,886 2,205,672
- - 1,236,777
- - 6,150,453
- - 597,263
3,249,643 24,358,442 9,317,680
3,249,643 71,084,858 19,507,845
222,804 91,189 (10,584)
38,419 749,267 101,150
- 202,583 -
- (263,438) (50,657)
- 167,409 87,797
- 3,568,505 -
38,419 4,424,326 138,290
261,223 4,515,515 127,706
255,862 15,066,962 1,697,000
- 8,382,821 -
- 4,939,018 -
- - 630,206
517,085 32,904,316 2,454,912
11,572,806 32,697,532
12,089,891 $ 35,152,444 $
20,764
32,925,080 $
Enterprise Funds
61
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2017
Carlsbad
Municipal Golf
Water District Course Wastewater
Cash flows from operating activities:
Receipts from customers and users 43,611,436 $ 7,200,199 $ 14,371,149 $
Payments to suppliers (32,179,078) (6,583,672) (7,241,793)
Payments to employees (4,557,385) - (1,953,706)
Internal activity - payments to other funds (2,556,054) - (1,284,367)
Claims and premiums paid - - -
Other receipts 911,165 - 279,236
Other payments - (72,745) -
Net cash provided (used) by operating activities 5,230,084 543,782 4,170,519
Cash flows from noncapital financing activities:
Operating subsidies and transfers from other funds - 14,811,100 -
Advances to other funds - (480,401) -
Net cash provided (used) by capital and
related financing activities - 14,330,699 -
Cash flows from capital and related financing activities:
Proceeds from capital debt 166,025 - -
Capital restricted fees 1,959,476 - 2,436,238
Purchase of capital assets (4,370,990) (801,198) (11,870,838)
Gross proceeds from the sale of capital assets 7,749 159,660 -
Principal paid on capital debt (1,935,365) (15,855,000) -
Interest and other fees paid (401,021) (338,814) -
Proceeds from state and local grants 3,987,107 - -
Property taxes received 3,566,047 - -
Net cash (used in) capital and related financing
activities 2,979,028 (16,835,352) (9,434,600)
Cash flows from investing activities:
Interest on investments 142,932 45,452 (63,247)
Net increase (decrease) in cash and cash equivalents 8,352,044 (1,915,419) (5,327,328)
Cash and cash equivalents at beginning of year 114,337,592 3,715,679 52,430,399
Cash and cash equivalents at end of year 122,689,636 $ 1,800,260 $ 47,103,071 $
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
62
Governmental
Activities -
Internal
Solid Waste Totals Service Funds
2,901,614 $ 68,084,398 $ 19,394,063 $
(856,145) (46,860,688) (6,414,626)
(1,236,550) (7,747,641) (4,745,126)
(583,224) (4,423,645) (200,381)
- - (5,041,864)
169,835 1,360,236 116,711
- (72,745) -
395,530 10,339,915 3,108,777
255,862 15,066,962 1,697,000
- (480,401) -
255,862 14,586,561 1,697,000
- 166,025 -
- 4,395,714 -
- (17,043,026) (1,594,769)
- 167,409 155,991
- (17,790,365) (176,311)
- (739,835) (50,657)
- 3,987,107 -
- 3,566,047 -
- (23,290,924) (1,665,746)
(7,191) 117,946 75,654
644,201 1,753,498 3,215,685
12,689,842 183,173,512 43,169,205
13,334,043 $ 184,927,010 $ 46,384,890 $
(Continued)
Enterprise Funds
63
Statement of Cash Flows
Proprietary Funds (Continued)
For the Year Ended June 30, 2017
Carlsbad
Municipal Golf
Water District Course Wastewater
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)1,778,697 $ (2,987,612) $ 1,077,300 $
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization 4,785,645 3,487,374 3,918,867
Change in assets and liabilities:
(Increase) decrease in receivables (1,210,258) 182,197 243,079
(Increase) decrease in due from other governments (559,092) - (1,922,217)
(Increase) decrease in inventories 174,797 28,958 (454)
(Increase) decrease in prepaid items (4,012) - -
(Increase) decrease in deferred outflows - pension related items (844,225) - (474,435)
(Decrease) increase in accrued liabilities (1,380,397) 6,677 (40,340)
(Decrease) increase in due to other governments 1,911,968 (72,745) 430,296
(Decrease) increase in estimated claims payable - - -
(Decrease) increase in deposits payable 5,054 (101,067) 661,270
(Decrease) increase in unearned revenue - - -
(Decrease) increase in net pension liability 796,328 - 412,410
(Decrease) increase in deferred inflows - pension related items (224,421) - (135,257)
Net cash provided by operating activities 5,230,084 $ 543,782 $ 4,170,519 $
Noncash capital financing activities:
Capital assets contributed by other sources 3,068,533 $ -$ 1,870,485 $
Unrealized gains (losses)(1,102,159) $ (13,338) $ (455,494) $
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
64
Governmental
Activities -
Internal
Solid Waste Totals Service Funds
222,804 $ 91,189 $ (10,584) $
- 12,191,886 2,205,672
(401,151) (1,186,133) 242,835
- (2,481,309) -
- 203,301 43,270
- (4,012) 20,638
(243,122) (1,561,782) (988,762)
460,418 (953,642) 188,136
- 2,269,519 -
- - 630,513
- 565,257 -
153 153 -
440,007 1,648,745 1,286,490
(83,579) (443,257) (509,431)
395,530 $ 10,339,915 $ 3,108,777 $
-$ 4,939,018 $ 630,206 $
(116,709) $ (1,687,700) $ (348,326) $
Enterprise Funds
65
Statement of Net Position
Fiduciary Funds
June 30, 2017
Private
Purpose
Agency Trust
ASSETS Funds Funds
Current assets:
Cash and investments 19,069,498 $ 1,192,773 $
Receivables:
Interest 109,303 4,107
Taxes 932 -
Other 9,247 -
Prepaid items 4,129 -
Total current assets 19,193,109 1,196,880
Noncurrent assets:
Loans receivable - 3,750,000
Restricted assets:
Cash and investments 5,124,822 -
Total noncurrent assets 5,124,822 3,750,000
Total assets 24,317,931 $ 4,946,880 $
LIABILITIES
Current liabilities:
Accrued liabilities 935,011 $ 2,699 $
Accrued interest payable - 106,143
Deposits held for others 23,382,920 -
Current portion of long-term debt - 735,000
Total current liabilities 24,317,931 843,842
Noncurrent liabilities:
Due to the City of Carlsbad - 10,860,807
Tax allocation bonds payable - 5,295,000
Total noncurrent liabilities - 16,155,807
Total liabilities 24,317,931 16,999,649
NET POSITION
Held in trust for redevelopment obligation retirement purposes -$ (12,052,769) $
The notes to the financial statements are an integral part of this statement.
66
Statement of Changes in Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2017
Private
Pupose
Trust
ADDITIONS Funds
Contributions:
Tax increment 2,454,954 $
Income from property and investments 7,766
Total additions 2,462,720
DEDUCTIONS
General and administrative 380,652
Interest expense and fees 539,003
Total deductions 919,655
Change in net position 1,543,065
Total net position (deficit) at beginning of year (13,595,834)
Total net position (deficit) at end of year (12,052,769) $
The notes to the financial statements are an integral part of this statement.
67
Notes to the Financial Statements
68
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 development, community services and public works.
The accounting policies of the city and its component units conform to accounting principles generally accepted in
the United States of America as applicable to governmental units. The following is a summary of the more significant
policies:
Description and scope of the reporting entity
As required by accounting principles generally accepted in the United States of America, these financial statements
present the financial position of the city and its component units, entities for which the city is considered to be
financially accountable. The city is considered to be financially accountable for an organization if the city appoints a
voting majority of that organization’s governing body and the city is able to impose its will on that organization or
there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens
on the city. The city is also considered to be financially accountable for an organization if that organization is fiscally
dependent upon the city (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt
without approval from the city). In certain cases, other organizations are included as component units if the nature
and significance of their relationship with the city are such that their exclusion would cause the city’s financial
statements to be misleading or incomplete.
Based upon the above criteria, the component units of the city are the Housing Authority of the City of Carlsbad, the
City of Carlsbad Public Improvement Corporation, the Carlsbad Public Financing Authority and the Carlsbad
Municipal Water District (CMWD).
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
69
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
70
Note 1. Summary of Significant Accounting Policies (continued)
• 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 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
71
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, 2017, 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, self-insured dental, 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
72
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 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
73
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 three sources: interest on advances, sales tax 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 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, 2017, the ambulance billing receivable allowance
is equal to 40 percent of outstanding billings at June 30, 2017, 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, 2017, 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
74
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, 2015
Measurement Date (MD) June 30, 2016
Measurement Period (MP) July 1, 2015 to June 30, 2016
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.
Notes to the Financial Statements
75
Note 1. Summary of Significant Accounting Policies (continued)
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.
• Public hearings are conducted at City Council meetings to obtain citizens’ comments during June.
• Prior to July 1, the budget is enacted legally through passage of an appropriation resolution.
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
offset by unbudgeted revenue, which is designated for said specific purpose. Monthly reports are provided to the
City Council during the year, and any changes to the adopted budget are approved by the City Council as necessary.
During the year, several supplementary appropriations were necessary.
Budgets for governmental type funds are adopted on the modified accrual basis except that encumbrances are
treated as budgeted expenditures in the year purchases are committed. Expenditures may not exceed budgeted
appropriations at the fund level. All appropriations lapse at fiscal year-end unless City Council takes action in the
form of a resolution to continue the appropriation into the following fiscal year.
For purposes of budgetary presentation, actual revenues have been adjusted to exclude unrealized gains and losses
pursuant to GASB. 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.
Notes to the Financial Statements
76
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, 2017, the LAIF performance report shows a fair value factor of 0.998940671. 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
77
Note 3. Deposit and Investment Risk (continued)
As of June 30, 2017 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 125,902,867 $ 17.5%2.390
Federal National Mortgage Association 89,422,103 12.4%2.097
Federal Home Loan Bank 80,011,478 11.1%2.103
Federal Home Loan Mortgage Corporation 67,668,820 9.4%2.534
Federal Farm Credit Bank 60,980,566 8.5%2.275
Federal Agricultural Corporation 21,725,734 3.0%1.790
Refunding Corporation 9,272,288 1.3%2.003
Financing Corporation 8,989,726 1.2%2.014
Tennessee Valley Authority 3,722,900 0.5%2.903
RFCO Strip Principal 2,826,660 0.4%3.263
Subtotal U.S. agencies 470,523,142 65.3%2.258
Corporate notes:
Medium-term corporate notes 134,977,144 18.8%2.225
Subtotal corporate notes 134,977,144 18.8%2.250
LAIF 94,405,887 13.1%-
Certificates of deposit 15,613,005 2.2%2.102
Cash accounts 4,200,495 0.6%-
Total Treasurer’s Pool 719,719,673 100.0%1.942
Investments held outside the Treasurer’s Pool
Money market funds 4,758,951
Guaranteed investment contracts 2,409,361
Subtotal debt service funds/bond proceeds 7,168,312
Other deposits 1,797,100
Petty cash funds 12,470
Total cash and investments 728,697,555 $
Statement of Net Position, Primary Government
Cash and investments 703,310,462 $
Statement of Net Position, Fiduciary Funds
Cash and investments 20,262,271
Restricted cash and investments 5,124,822
Total cash and investments 728,697,555 $
Notes to the Financial Statements
78
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, 2017:
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 two major banking institutions. At the conclusion of each business day, balances
in these accounts are “swept” into overnight pooled investments, which are pooled into funds collateralized with
U.S. government securities (guaranteed) or U.S. agency securities (government-sponsored). The California Code
authorizes both of these types of investments. A small amount of cash is not swept from the checking accounts to
cover checks that may be presented for payment. Amounts up to $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.
Level 1 Level 2 Level 3 Total
U.S. Treasury Bills & Notes 125,902,867 $ -$ -$ 125,902,867 $
Refunding Corporation 9,272,288 - - 9,272,288
Federal Agency securities - 335,347,987 - 335,347,987
Medium-term corporate notes - 134,977,144 - 134,977,144
Certificates of Deposit - 15,613,005 - 15,613,005
Total Investments Reported at Fair Value 135,175,155 485,938,136 - 621,113,291
Cash accounts - - - 4,200,495
LAIF - - - 94,405,887
Money market funds - - - 4,758,951
Guaranteed investment contracts - - - 2,409,361
Other deposits - - - 1,797,100
Petty cash funds - - - 12,470
Total cash and investments 135,175,155 $ 485,938,136 $ -$ 728,697,555 $
Fair Value Hierarchy
Notes to the Financial Statements
79
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, 2017, 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,
2017, approximately 1.56 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 greater than U.S. federal
agencies, but is considered by the city treasurer to be within acceptable limits for purposes of holding to maturity.
A credit rating of single A is within state code purchase requirements.
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) the California state code, the city’s investment policy, or
debt agreements, and the actual rating at June 30, 2017 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 125,902,867$ N/A 125,902,867$ -$ -$ -$ -$
Federal agency securities 344,620,275 N/A - - 344,620,275 - -
Medium term notes 134,977,144 AA - 33,189,463 90,781,122 11,006,559 -
Local Agency Investment Fund (LAIF)94,405,887 N/A - - - - 94,405,887
Certificates of deposit 15,613,005 N/A - - - - 15,613,005
Cash accounts 4,200,495 N/A - - - - 4,200,495
Other deposits 1,797,100 N/A - - - - 1,797,100
Petty cash funds 12,470 N/A - - - - 12,470
Investments with fiscal agent
Money market funds 4,758,951 N/A - 4,758,951 - - -
Guaranteed investment contracts 2,409,361 N/A - - - - 2,409,361
728,697,555$ 125,902,867$ 37,948,414$ 435,401,397$ 11,006,559$ 118,438,318$
Notes to the Financial Statements
80
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, 2017, the portfolio had a 0.66 percent loss 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, 2017, the modified duration of the portfolio was 1.942. 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, 2017, maturities within one year exceeded the required minimum of $166,764,000 (two-
thirds of current year operating budget for the city per the Fiscal Year 2016-17 Operating Budget adopted
by the City Council).
3. As of June 30, 2017, the weighted average maturity of the LAIF underlying debt securities was 194 days. As
of June 30, 2017, LAIF had a 0.106 percent loss in market value.
4. As of June 30, 2017, the city’s investment portfolio included $25,305,000 of callable step-up notes.
Note 4. Due To and From Other Funds
The city had no amounts that were due from funds within the city to other funds within the city at June 30, 2017.
Notes to the Financial Statements
81
Note 5. Advances To and From Other Funds
The following table shows amounts advanced from governmental funds within the city to other funds within the city
at June 30, 2017:
Advances to and from other funds are primarily long term advances used to fund capital projects in advance of
related revenues.
(1) The advance between the General Fund and the Habitat & Agricultural Management Fund is estimated to be
repaid from future Habitat Mitigation Fees. Interest on the advance will compound annually at the average
interest rate earned by the Treasurer’s Pool during the fiscal year.
(2) The advance between the General Fund and the Golf Course Enterprise Fund is estimated to be repaid through
residual operating income from golf course operations.
(3) The advance between the CFD No. 1 Fund and the Traffic Impact Projects Fund is estimated to be repaid over a
10-15 year period as Traffic Impact Fees are collected.
(4) The advance between the PFF Fund and the Park Development Funds is estimated to be repaid at build-out.
(5) The obligation of the Redevelopment Obligation Retirement Trust Funds represents the obligations of the
custodian of the assets and liabilities of the former redevelopment agency (the Successor Agency) and is
presented in the accompanying financial statements as Due from Successor Agency. Interest on the obligation
will compound annually at 3 percent per Health and Safety Code Section 34191.4 which was amended by Senate
Bill No. 107. Senate Bill No. 107 went into effect in September 2015.
Advances To Amount
General Fund Other Governmental Funds:
Habitat Mitigation 277,120$ (1)
General Fund Enterprise Funds:
Golf Course 55,634,872 (2)
Other Governmental Funds:Other Governmental Funds:
CFD No. 1 Traffic Impact Projects 2,070,958 (3)
Public Facilities Construction Park Development 6,450,000 (4)
64,432,950$
General Fund Fiduciary Funds:
Redevelopment Obligation
Retirement Trust Funds 10,860,807$ (5)
Advances From
Notes to the Financial Statements
82
Note 6. Capital Assets
Capital asset activity was as follows for the year ended June 30, 2017:
Balance at Balance at
July 1, 2016 Increases Decreases June 30, 2017
Governmental activities:
Capital assets, not being depreciated:
Land (including right-of-way)152,207,069$ 891,418$ -$ 153,098,487$
Construction in progress 16,659,747 3,625,851 (12,510,920) 7,774,678
Total capital assets,
not being depreciated 168,866,816 4,517,269 (12,510,920) 160,873,165
Capital assets, being depreciated:
Buildings 123,085,992 656,128 - 123,742,120
Improvements, other than buildings 80,562,176 890,868 - 81,453,044
Machinery and equipment 36,261,632 5,204,528 (1,033,200) 40,432,960
Infrastructure 687,030,699 24,413,889 - 711,444,588
Intangible assets 4,065,600 951,848 - 5,017,448
Total capital assets,
being depreciated 931,006,099 32,117,261 (1,033,200) 962,090,160
Less accumulated depreciation for:
Buildings (34,649,877) (2,704,104) - (37,353,981)
Improvements, other than buildings (24,072,763) (3,389,132) - (27,461,895)
Machinery and equipment (23,227,587) (2,966,044) 965,006 (25,228,625)
Infrastructure (227,097,330) (14,548,755) - (241,646,085)
Intangible assets (1,820,869) (588,873) - (2,409,742)
Total accumulated
depreciation (310,868,426) (24,196,908) 965,006 (334,100,328)
Total capital assets
being depreciated, net 620,137,673 7,920,353 (68,194) 627,989,832
Governmental activities
capital assets, net 789,004,489$ 12,437,622$ (12,579,114)$ 788,862,997$
Notes to the Financial Statements
83
Note 6. Capital Assets (continued)
Balance at Balance at
July 1, 2016 Increases Decreases June 30, 2017
Business-type activities:
Capital assets, not being depreciated:
Land (including right-of-way)9,375,975$ -$ -$ 9,375,975$
Construction in progress 27,554,662 17,838,022 (1,162,920) 44,229,764
Total capital assets,
not being depreciated 36,930,637 17,838,022 (1,162,920) 53,605,739
Capital assets, being depreciated:
Buildings 40,673,540 31,541 - 40,705,081
Improvements, other than buildings 51,121,786 - - 51,121,786
Machinery and equipment 3,471,210 801,198 (561,256) 3,711,152
Infrastructure 329,986,540 4,939,018 - 334,925,558
Wastewater treatment facility 57,295,227 226,435 - 57,521,662
Total capital assets,
being depreciated 482,548,303 5,998,192 (561,256) 487,985,239
Less accumulated depreciation for:
Buildings (8,704,417) (699,499) - (9,403,916)
Improvements, other than buildings (28,069,320) (3,220,880) - (31,290,200)
Machinery and equipment (2,933,670) (286,841) 561,256 (2,659,255)
Infrastructure (95,799,809) (6,543,091) - (102,342,900)
Wastewater treatment facility (33,715,787) (1,441,574) - (35,157,361)
Total accumulated
depreciation (169,223,003) (12,191,885) 561,256 (180,853,632)
Total capital assets
being depreciated, net 313,325,300 (6,193,693) - 307,131,607
Business-type activities
capital assets, net 350,255,937$ 11,644,329$ (1,162,920)$ 360,737,346$
Notes to the Financial Statements
84
Note 6. Capital Assets (continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
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, 2017:
Governmental activities:
General government 1,216,612$
Community development 294,688
Public safety 1,408,449
Community services 4,091,493
Public works 14,979,994
Capital assets held by the internal service funds
(charged to various functions based on
their usage of the assets)2,205,672
Total depreciation expense - governmental activities 24,196,908$
Business-type activities:
Carlsbad Municipal Water District 4,785,644$
Wastewater 3,918,867
Golf course 3,487,374
Total depreciation expense - business-type activities 12,191,885$
Principal Principal
Balance at Balance at Due Within
July 1, 2016 Increases Decreases June 30, 2017 One Year
Governmental activities:
Obligations under capital lease 969,927 $ -$ 185,378 $ 784,549 $ 196,969 $
Total governmental
activities 969,927 $ -$ 185,378 $ 784,549 $ 196,969 $
Principal Principal
Balance at Balance at Due Within
July 1, 2016 Increases Decreases June 30, 2017 One Year
Business-type activities:
Bonds 15,855,000 $ -$ 15,855,000 $ -$ -$
Loans payable 17,670,403 166,025 1,935,365 15,901,063 1,510,433
33,525,403 166,025 17,790,365 15,901,063 1,510,433
Plus premiums 202,583 - 202,583 - -
Total business type
activities 33,727,986 $ 166,025 $ 17,992,948 $ 15,901,063 $ 1,510,433 $
Notes to the Financial Statements
85
Note 7. Long-term Debt (continued)
Long-term debt at June 30, 2017 is comprised of the following issues:
Balance at
Governmental long-term debt June 30, 2017
The city has entered into several office equipment lease-purchase agreements. As of
June 30, 2017 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%784,549 $
Sub-total governmental long-term debt 784,549
Less current portion (196,969)
Total long-term portion of governmental debt 587,580 $
Balance at
Business-type long-term debt June 30, 2017
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
$530,908 to $631,082 on June 1 of each year through 2025, interest payable on June 1 each
year at 2.5% per annum. Payable from recycled water user fees.4,638,071$
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
$979,525 to $1,201,978 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. 10,873,812
2014 Carlsbad Municipal Water District loan agreement with the State Water Resources
Control Board authorized to $29,500,000. Principal will not be due until June 2019.
Interest is payable on June 30 each year at 1.0% per anum. An amortization schedule is not
yet available for amounts drawn down to date. Payable from recycled water user fees.389,180
Subtotal business-type long-term debt 15,901,063
Less current portion (1,510,433)
Total long-term portion of business-type debt 14,390,630 $
Notes to the Financial Statements
86
Note 7. Long-term Debt (continued)
The aggregate maturities of long-term debt are as follows:
The aggregate maturities for the business-type activities do not reflect a $389,180 water loan as the city is currently
drawing down loan proceeds for the expansion of the recycled water facility. Once the final draw has been made,
this loan will be added to the amortization schedules.
Note 8. Rate Covenants and Pledged Revenue
Rate covenants
The 2005 CMWD loan agreement 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, 2017.
Year ended June 30:Principal Interest
2018 196,969 $ 42,281 $
2019 209,285 29,965
2020 222,373 16,877
2021 155,922 3,578
784,549 $ 92,701 $
Year ended June 30:Principal Interest
2018 1,510,433 $ 366,050 $
2019 1,546,234 330,248
2020 1,582,886 293,595
2021 1,620,408 256,074
2022 1,658,821 217,661
2023-2027 7,593,101 495,591
15,511,883 $ 1,959,219 $
Business-type Activities
Governmental Activities
Notes to the Financial Statements
87
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
amount and term of the remainder of these commitments are indicated in the debt service to maturity tables
presented in the accompanying notes. The purpose for which the proceeds of the related debt issuances were
utilized are disclosed in the debt descriptions of the accompanying notes. For the current year, debt service
payments as a percentage of the pledged gross revenue (net of certain expenses where so required by the debt
agreement) are indicated in the table below. These percentages also approximate the relationship of debt service
to pledged revenues for the remainder of the term of the commitment:
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, 2017, the city has three series of assessment district bonds outstanding in the amount of $39,185,000.
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, 2017, the city has two series CFD bonds outstanding in the amount of $21,305,000. 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, 2017 is $20,592,457.
The bonds, together with interest thereon, are limited obligations of the city payable solely from bond proceeds,
revenues and other amounts derived solely from home mortgage and developer loans secured by first deeds of trust,
irrevocable letters of credit, and irrevocable surety bonds.
Debt Service as a
Description of Pledged Annual Amount of Pledged Annual Debt Service Percentage of Pledged
Revenue Revenue (net of expenses)Payments Revenue
Recycled water revenues 3,508,413$ 1,876,482$ 53%
Notes to the Financial Statements
88
Note 10. Fund Balances
The following is a summary of the components of fund balances as of June 30, 2017:
Community General
Facilities Capital Infrastructure
Fund Balances General District No. 1 Construction Replacement
Nonspendable:
Inventory 17,546 $ -$ -$ -$
Prepaid items - - - -
Loans receivable 69,952 - - -
Due from Successor Agency*6,182,846 - - -
Advances to other funds*47,481,028 - - -
Totals 53,751,372 - - -
Restricted for:
Affordable housing - - - -
Lighting and landscaping districts - - - -
Habitat and agricultural mitigation/preservation - - - -
Capital projects - 81,809,869 - -
General government - - - -
Public safety - - - -
Community development - - - -
Community services - - - -
Totals - 81,809,869 - -
Committed to:
Community activity grants 1,000,000 - - -
Totals 1,000,000 - - -
Assigned to:
CalPERS stability 5,500,000 - - -
General government 18,024,788 - - -
Public safety 4,670,438 - - -
Community development 2,322,660 - - -
Community services 3,563,962 - - -
Public works 4,356,811 - - -
Capital projects - - 47,643,185 99,350,791
Totals 38,438,659 - 47,643,185 99,350,791
Unassigned:
Unassigned 68,190,763 - - -
Economic uncertainty 10,000,000 - - -
Totals 78,190,763 - - -
Total fund balances 171,380,794 $ 81,809,869 $ 47,643,185 $ 99,350,791 $
Governmental Funds
Notes to the Financial Statements
89
Public Other
Facilities Governmental
Construction Funds Total
-$ -$ 17,546 $
- 1,292 1,292
- - 69,952
- - 6,182,846
- - 47,481,028
- 1,292 53,752,664
- 40,526,232 40,526,232
- 6,526,874 6,526,874
- 1,813,726 1,813,726
37,602,391 63,832,559 183,244,819
- 614,641 614,641
- 450,930 450,930
- 229,902 229,902
- 1,514,219 1,514,219
37,602,391 115,509,083 234,921,343
- - 1,000,000
- - 1,000,000
- - 5,500,000
- - 18,024,788
- - 4,670,438
- - 2,322,660
- - 3,563,962
- - 4,356,811
- - 146,993,976
- - 185,432,635
- - 68,190,763
- - 10,000,000
- - 78,190,763
37,602,391 $ 115,510,375 $ 553,297,405 $
Governmental Funds
Notes to the Financial Statements
90
Note 10. Fund Balances (continued)
* Only reflects that portion of fund balance invested in interfund advances and loans (the General Fund amount is
net of $13,108,925 in unavailable revenue for measurable but unavailable interest earned on such advances and
loans).
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 not delegated to any
other persons or bodies the authority to assign fund balance to specific purposes. The City Council has
authorized, through a resolution, that all outstanding encumbrances at the end of the fiscal year, certain
unspent budgeted amounts to be carried forward into the next fiscal year, and has set aside funds to
stabilize future pension costs. These amounts are shown as assigned fund balance at the end of the fiscal
year:
• CalPERS stability – the City Council has set assigned these funds to be used to address fluctuating
CalPERS rates caused by volatile market conditions. The assignment has defined parameters that will
determine when and how much will be used to stablize CalPERS rates.
• General government – Talent Management initiatives; staff development including training and
coaching; citywide fall barbeque; succession planning; continuing the implementation of the new
permitting and business license implementation; utility billing system upgrade; Human Capital
Management System (HCMS) upgrade; a new Enterprise Resource Planning system; new laptops and
office furniture for Human Resources; and new office furniture in the City Clerk’s, City Attorney’s and
City Manager’s offices. Communications will be creating a training program for staff on how to
communicate effectively with the public and testing new methodology for making city information
digitally available to the public.
• Public safety – new breathing apparatuses for the Fire Department; the purchase and training of a new
K-9 unit; new command post radios, air cards for the license plate recognition cameras, and new
audiovisual equipment.
Notes to the Financial Statements
91
Note 10. Fund Balances (continued)
• Community development – new office furniture; training and coaching for staff; and costs associated
with creating desk manuals and process documentation. Housing and Neighborhood Services will be
conducting events to address homelessness.
• Community services – the Parks and Recreation Department will be purchasing activity management
software and furniture for the Senior Center. The Library and Cultural Arts Department will be
purchasing improved signage for all library facilities, and continuing to fund community public arts
projects.
• Public works – engineering manual update, succession planning, and implementing a strategic plan.
• Capital projects – citywide infrastructure replacement projects, City Hall exterior refurbishments, open
space acquisiton, beach access improvements, Safety Center improvements, Fire Station No. 2
replacement, Dove Library improvements, Village and beach streetscape improvements, Lake Calavera
trails construction, traffic signal program, parking lot maintenance program, Kelly Drive repair, Fleet
Maintenance building refurbishment, and storm drain replacement program.
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
It is the policy of the city to maintain a minimum reserve for unforeseen emergencies or catastrophic impacts upon
the city, and whenever fiscally possible and financially prudent, to maintain a greater target reserve. The minimum
reserve of the General Fund is 30 percent of General Fund operating expenditures and the target reserve is a range
of 40 percent to 50 percent of General Fund operating expenditures. The minimum reserve would provide
approximately three to four months of operating expenditures for unforeseen emergencies and the target reserve
of 40 percent to 50 percent would provide approximately five to six months of operating expenditures for
catastrophic events.
Note 12. Accumulated Fund Deficits/Negative Net Position
The following funds reported deficits in fund balances or net position as of June 30, 2017:
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.
Deficit Balance
Enterprise Funds:
Golf Course (15,219,864)$
Notes to the Financial Statements
92
Note 13. Interfund Transfers
Interfund transfers for the year ended June 30, 2017, consisted of the following:
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; (3) move resources for jointly funded projects to the primary funding source; (4) defease golf course
bonds; and (5) 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,
2017, the unrestricted fund equity for the Risk Management Self-Insurance Fund was $1,149,760. Funds used by
the Risk Management Fund to liquidate the claims liability predominantly come from the General Fund (84.54%),
the Water funds (7.02%) and the Wastewater funds (3.12%).
Transfers Out Amount
General Fund Gas Tax Capital Project Fund 10,000$
Capital Project Funds:
General Capital Construction General Fund 10,500,000
Infrastructure Replacement General Fund 9,460,000
Sales Tax/TransNet Gas Tax Capital Project Fund 204,871
Enterprise Funds:
Golf Course General Fund 14,811,100
Storm Water Protection General Fund 255,862
Internal Service Funds:
Fleet Management General Fund 197,000
Workers' Compensation General Fund 1,500,000
Special Revenue Funds:
Affordable Housing Tyler Court Apartments 174,045
Financing Districts General Fund 500,000
37,612,878$
Transfers In
Notes to the Financial Statements
93
Note 14. Risk Management (continued)
Dental insurance coverage for city employees is administered by MetLife. Under the city’s agreement with MetLife,
MetLife will pay dental claims for each covered member, up to a maximum of $1,500 per calendar year.
The city is insured for workers’ compensation claims by 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 $1,000,000 per claim for police and
fire employees, and $750,000 for all other employees. At June 30, 2017, the unrestricted fund equity for the
Workers’ Compensation Self-Insurance Fund was $2,185,709. Funds used by the Workers’ Compensation Fund to
liquidate the claims liability predominantly come from the General Fund (91.08%), the Water funds (3.42%) and the
Wastewater funds (1.37%).
The estimated claims payable reported at June 30, 2017 is based on the requirements of GASB, which requires that
a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is
probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be
reasonably estimated. Settled cases did not exceed insurance coverage during the past fiscal year.
Changes in the estimated claims payable amounts in Fiscal Years 2016 and 2017 for the three internal service funds
are as follows:
Expense and
Beginning Changes in Claim Ending
Balance Estimates Payments Balance
Self-Insured Benefits Fund:
2015-16 97,200$ 923,817$ 915,679$ 105,338$
2016-17 105,338 631,465 631,545 105,258
Risk Management Fund:
2015-16 2,019,176 (340,881)567,566 1,110,729
2016-17 1,110,729 2,998,566 1,174,654 2,934,641
Workers’ Compensation Fund:
2015-16 6,983,969 3,963,018 2,627,442 8,319,545
2016-17 8,319,545 1,395,639 2,359,635 7,355,549
Claims
Notes to the Financial Statements
94
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. As of June 30, 2016, 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 gain (before member billings) for EWA totaled $2,810 in
Fiscal Year 2016. 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
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. Benefit provisions under the Plans are established by State of California statute and city resolution.
CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit
provisions, assumptions and membership information that can be found on the CalPERS website.
Notes to the Financial Statements
95
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, 2017, are
summarized as follows:
Employees Covered
As of June 30, 2015, the following employees were covered by the benefit terms for each Plan:
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 28.857%28.857%28.857%
Miscellaneous
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 40.581%40.581%40.581%
Safety
Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 461 207
Inactive employees or beneficiaries currently not yet receiving benefits 420 86
Active employees 474 184
Total 1,355 477
Notes to the Financial Statements
96
Note 16. Pension Plan (continued)
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, 2016 (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 28.857 percent of annual payroll for miscellaneous employees and 40.581 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, 2016 (the measurement date), the total pension liability was
determined by rolling forward the June 30, 2015 total pension liability determined in the June 30. 2015 actuarial
accounting valuation. The June 30, 2016 total pension liability was based on the following actuarial methods and
assumptions:
All other actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial
experience study for the period from 1997 to 2011, 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.
Change of Assumption
There were no changes of assumptions.
Actuarial cost method Entry Age Normal
Asset valuation method Market value of assets
Actuarial assumptions
Discount rate 7.65%*
Inflation 2.75%
Salary increases Varies by entry age and service
Investment rate of return 7.5% net of pension plan investment and administration expenses; includes inflation
Mortality rate table Derived using CalPERS' membership data for all funds
Post-retirement benefit increase Contract COLA up to 2.75% until Purchasing Power Protection Allowance Floor on
purchasing power applies; 2.75% thereafter
* the net discount rate after administrative expenses is 7.50%
Notes to the Financial Statements
97
Note 16. Pension Plan (continued)
Discount Rate
The discount rate used to measure the total pension liability was 7.65 percent. To determine whether the municipal
bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would
most likely result in a discount rate that would be different from the actuarially assumed discount rate. The tests
revealed that the assets would not run out. Therefore, the current 7.65 percent discount rate is appropriate and the
use of the municipal bond rate calculation is not deemed necessary. The long term expected discount rate of 7.65
percent is applied to all plans in the Public Employees Retirement Fund (PERF). The cash flows used in the testing
were developed assuming that both members and employers will make their required contributions on time and as
scheduled in all future years. The stress test results are presented in a detailed report called “GASB Crossover Testing
Report” that can be obtained at the CalPERS website under the GASB 68 section.
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. Taking into account historical
returns of all the Public Employees Retirement Funds’ (PERF) asset classes (which includes the agent plan and two
cost-sharing plands or PERF A, B, and C funds), expected compound (geometric) returns were calculated over the
short-term (first 10 years) and the long-term (11 – 60 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 PERF fund.
The expected rate of return was set by calculating the 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 rounded down to the
nearest one quarter of one percent.
The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated
using the capital market assumptions applied to determine the discount rate and asset allocation. These rates of
return are net of administrative expenses. The target allocation shown was adopted by the Board effective on July
1, 2015.
Current Target Real Return Real Return
Asset Class Allocation Years 1 - 10¹Years 11+²
Global equity 51.0%5.25%5.71%
Global debt securities 20.0 0.99 2.43
Inflation assets 6.0 0.45 3.36
Private equity 10.0 6.83 6.95
Real estate 10.0 4.50 5.13
Infrastructure and forestland 2.0 4.50 5.09
Liquidity 1.0 (0.55)(1.05)
¹ An expected inflation of 2.5% used for this period.
² An expected inflation of 3.0% used for this period.
Notes to the Financial Statements
98
Note 16. Pension Plan (continued)
Pension Plan Fiduciary Net Position
The plan fiduciary net position disclosed in the city’s GASB report may differ from the plan assets reported in the
city’s actuarial valuation report due to several reasons. First, CalPERS must keep Reserves for Deficiencies and
Fiduciary Self Insurance. These amounts are excluded for rate setting purposes in the city’s actuarial valuation report
while required to be included for GASB reporting purposes. In addition, differences may result from early CAFR
closing and final reconciled reserves.
Changes in Net Pension Liability
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: 6/30/2015 322,606,958$ 242,447,633$ 80,159,325$
Changes Recognized for the Measurement Period:
• Service cost 6,836,445 - 6,836,445
• Interest on the Total Pension Liability 24,192,948 - 24,192,948
• Changes of benefit terms - - -
• Differences between expected and actual experience (2,605,228) - (2,605,228)
• Changes of assumptions - - -
• Plan to plan resource movement - - -
• Contributions from the employer - 9,562,926 (9,562,926)
• Contributions from employees - 2,833,466 (2,833,466)
• Net investment income - 1,330,196 (1,330,196)
• Benefit payments, including refunds of employee contributions (14,344,528) (14,344,528) -
• Administrative expense - (147,759) 147,759
Net Changes during 2015-16 14,079,637 (765,699) 14,845,336
Balance at 6/30/2016 336,686,595$ 241,681,934$ 95,004,661$
Increase (Decrease)Miscellaneous Plan
Notes to the Financial Statements
99
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 7.65 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 (6.65 percent) or 1 percentage-point higher (8.65 percent) than the current rate:
Recognition of Gains and Losses
Under GASB 68, deferred inflows and deferred outflows of resources related to pensions are recognized in pension
expense systematically over time.
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.
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at: 6/30/2015 247,020,357$ 187,329,833$ 59,690,524$
Changes Recognized for the Measurement Period:
• Service cost 5,209,900 - 5,209,900
• Interest on the Total Pension Liability 18,557,781 - 18,557,781
• Changes of benefit terms - - -
• Differences between expected and actual experience (941,378) - (941,378)
• Changes of assumptions - - -
• Plan to plan resource movement - - -
• Contributions from the employer - 6,836,098 (6,836,098)
• Contributions from employees - 1,933,363 (1,933,363)
• Net investment income - 990,545 (990,545)
• Benefit payments, including refunds of employee contributions (12,197,119) (12,197,119) -
• Administrative expense - (114,168) 114,168
Net Changes during 2015-16 10,629,184 (2,551,281) 13,180,465
Balance at 6/30/2016 257,649,541$ 184,778,552$ 72,870,989$
Increase (Decrease)
Safety Plan
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.65%)Rate (7.65%)(8.65%)
Plan's Net Pension Liability - Miscellaneous 140,143,103$ 95,004,661$ 57,684,355$
Plan's Net Pension Liability - Safety 108,509,751$ 72,870,989$ 43,691,612$
Notes to the Financial Statements
100
Note 16. Pension Plan (continued)
The amortization period differs depending on the source of the gain or loss:
Difference between projected and actual
earnings
5 year straight-line amortization
All other amounts Straight-line amortization over the average expected remaining
service livetime (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, 2016 measurement date is 3.1 years, which was obtained by
dividing the total service years of 4,157 (the sum of remaining service lifetimes of the active employees) by 1,355
(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, 2016 measurement date is 4.6 years, which was obtained by dividing
the total service years of 2,186 (the sum of remaining service lifetimes of the active employees) by 477 (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, 2016 (the measurement date), the city recognized a pension expense
of $17,777,299 for the Plans.
As of June 30, 2016, the city reports other amounts for the Miscellaneous Plan as deferred outflows and deferred
inflows of resources related to pensions as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 14,680,998$ -$
Difference between expected and actual experience 461,474 (1,764,832)
Change in allocation between programs 228,451 (228,451)
Changes of assumptions - (2,035,992)
Net difference between projected and actual earnings on pension plan investments 13,238,760 -
Total 28,609,683$ (4,029,275)$
Notes to the Financial Statements
101
Note 16. Pension Plan (continued)
As of June 30, 2016, the city reports other amounts for the Safety Plan as deferred outflows and deferred inflows of
resources related to pension as follows:
For the Miscellaneous Plan, $14,680,998 reported as deferred outflows of resources related to employer
contributions subsequent to the measurement date, and for the Safety Plan, $12,380,267 reported as deferred
outflows of resources related to employer contributions subsequent to the measurement date, will be recognized
as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred
outflows of resources and deferred inflows of resources related to the Miscellaneous Plan pensions will be
recognized as pension expense as follows:
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Safety
Plan pensions will be recognized as pension expense as follows:
Note 17. Postretirement Healthcare
The city and former employees of CMWD are offered other postemployment benefits (OPEB) in the form of health
benefits. The majority of city employees are under the city defined contribution plan. CMWD has a defined benefit
plan.
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 12,380,267$ -$
Difference between expected and actual experience 366,962 (736,731)
Changes of assumptions - (2,595,265)
Net difference between projected and actual earnings on pension plan investments 10,132,557 -
Total 22,879,786$ (3,331,996)$
Deferred
Measurement Period Outflows/(Inflows) of
Ended June 30:Resources
2017 (349,986)$
2018 938,254
2019 5,893,641
2020 3,417,501
2021 -
Thereafter -
Deferred
Measurement Period Outflows/(Inflows) of
Ended June 30:Resources
2017 405,533$
2018 405,534
2019 3,846,812
2020 2,509,644
2021 -
Thereafter -
Notes to the Financial Statements
102
Note 17. Postretirement Healthcare (continued)
Plan descriptions
Carlsbad Municipal Water District
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. There are approximately three active and 17
retired plan members as of the actuarial report dated June 30, 2015.
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 is administered by the Association of California Water Agencies (ACWA).
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. There are approximately 631 active and 164 retired plan members as of the
actuarial report dated June 30, 2015. 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 2015 $122.00
Calendar Year 2016 125.00
Calendar Year 2017 128.00
Thereafter, the subsidy is adjusted annually to reflect changes in the medical component of the Consumer Price
Index.
California Public Employer’s Retiree Benefit Trust Program
The city is participating in the California Employer’s Retiree Benefit Trust Program (CERBT) through irrevocable trust
agreements for both plans. CERBT, an agent multiple-employer plan, is administered by CalPERS. The city does not
issue separate stand-alone financial reports for either of the two plans. The city’s OPEB financial statements will be
included in the CalPERS annual financial report. The CalPERS annual financial report can be obtained by contacting
their executive office: Lincoln Plaza, 400 P Street, Sacramento, California 95814.
Funding policy
The obligation of 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.
Notes to the Financial Statements
103
Note 17. Postretirement Healthcare (continued)
Employees are not required to contribute to the plan. The city and CMWD are required to contribute the annual
required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters
of GASB. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal
cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed
thirty years on a “closed” basis. The city’s and CMWD’s annual OPEB costs for the current year and the related
information for each plan are as follows:
Annual OPEB cost
The city’s and CMWD’s annual OPEB costs, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for the year ended June 30, 2017 were as follows:
Three-year trend information for OPEB (CMWD)
Three-year trend information for OPEB (city)
CMWD City
2016-17 Annual Required Contribution (ARC)133,108 $ 606,343 $
2016-17 Recognized Implicit Rate Subsidy (30,127) (345,482)
2016-17 Contributions Made (102,981) (260,861)
Increase (Decrease) in Net OPEB Obligation - -
Net OPEB Obligation - beginning of year - -
Net OPEB Obligation - end of year -$ -$
Percentage of
Year Annual OPEB Cost Net OPEB
Ended OPEB Cost Contributed Obligation
6/30/15 196,864$ 100.0%-$
6/30/16 133,108 100.0%-
6/30/17 133,108 100.0%-
Percentage of
Year Annual OPEB Cost Net OPEB
Ended OPEB Cost Contributed Obligation
6/30/15 257,995$ 100.0%-$
6/30/16 606,343 100.0%-
6/30/17 606,343 100.0%-
Notes to the Financial Statements
104
Note 17. Postretirement Healthcare (continued)
Funded status and funding progress
The funded status of the plans as of the actuarial report dated June 30, 2015 was as follows:
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of
events in the future. Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revision as actual results are compared to past expectations
and new estimates are made about the future. The required schedule of funding progress presented as required
supplementary information provides multi-year trend information that shows whether the actuarial value of plan
assets is increasing or decreasing over time relative to the actuarial accrued liability for the benefits.
Actuarial methods and assumptions
Projections of benefits are based on the substantive plan (the plan as understood by the employer and plan
members) and include the types of benefits in force at the valuation date. Actuarial calculations are required to be
performed every two years, reflect a long-term perspective, and employ methods and assumptions that are designed
to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the
long-term perspective of the calculations. Unfunded liabilities are amortized over a closed period based on a level
dollar amortization over 30 years. There are 23 years remaining as of June 30, 2017.
In the June 30, 2015 actuarial valuation, the projected unit credit cost method was used to determine the benefit
obligations. The actuarial assumptions for the city and CMWD plan included a seven percent investment rate of
return (net of administrative expenses) and a medical inflation rate of between 5.75 percent per annum and 5.75
percent per annum depending on whether the party was pre-65 or post-65 respectively. The medical inflation rate
was graded down each year in various increments to an ultimate rate of 4.5 percent.
The annual required contribution under this method equals the normal cost plus the amortization of the unfunded
actuarial accrued liability. The plan costs are derived by making certain specific assumptions as to the rates of
interest, mortality, turnover, and the like, which are assumed to hold for many years into the future. Actual
experience may differ somewhat from the assumptions and the effect of such differences is spread over all periods.
Due to these differences, the costs determined by the valuation must be regarded as estimates of the true plan
costs.
CMWD City
Actuarial Accrued Liability (a)3,998,588 $ 10,958,937 $
Actuarial Value of Plan Assets (b)3,054,475 9,015,859
Unfunded Actuarial Accrued Liability 944,113 $ 1,943,078 $
Funded Ratio (b)/(a)76.4%82.3%
Covered Payroll 235,235 $ 51,752,862 $
UAAL as a percentage of Covered Payroll 401.3%3.8%
Notes to the Financial Statements
105
Note 17. Postretirement Healthcare (continued)
Funded status of plan (CMWD)
Funded status of plan (city)
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 $1,386 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
$2,270 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, 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 394 acre feet of recycled
water per fiscal year, at a basic price of retail potable water charged to residential users within the CMWD boundary.
The cost per that agreement was $1,222.84 per acre foot or a minimum of $481,800 per fiscal year, regardless of
the actual amount used. On September 1, 2013, CMWD and Leucadia Wastewater District revised the original
agreement and extended the term of the agreement for a minimum of five years. The agreement will continue year-
to-year past the five year term unless either party provides notice of termination. The cost per the revised
agreement is shown in the table on the following page and is based on the actual amount used:
Entry Age Unfunded
Normal Actuarial Liability/Funded Annual UAAL
Valuation Accrued Value of (Excess Ratios Covered As a %
Date Liability Assets (AVA)Assets)AVA Payroll of Payroll
6/30/11 4,010,189 $ 2,414,763 $ 1,595,426 $ 60.2%412,676 $ 386.6%
6/30/13 4,530,503 2,634,756 1,895,747 58.2%339,692 558.1%
6/30/15 3,998,588 3,054,475 944,113 76.4%236,190 399.7%
Entry Age Unfunded
Normal Actuarial Liability/Funded Annual UAAL
Valuation Accrued Value of (Excess Ratios Covered As a %
Date Liability Assets (AVA)Assets)AVA Payroll of Payroll
6/30/11 6,304,638 $ 6,587,204 $ (282,566) $ 104.5%50,750,171 $ -0.6%
6/30/13 6,718,554 7,573,752 (855,198) 112.7%50,321,654 -1.7%
6/30/15 10,958,937 9,015,859 1,943,078 82.3%53,419,371 3.6%
Notes to the Financial Statements
106
Note 18. Commitments and Contingencies (continued)
Additionally, CMWD and the Leucadia Wastewater District share equally all rebates or other incentive payments
from the Metropolitan Water District, San Diego County Water Authority, or other governmental agency during the
term of the revised agreement for recycled water produced by Leucadia Wastewater District 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. The
agreement stipulates that CMWD 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, 2017 is $1,627,184.
As of June 30, 2017, 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:
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).
Price per
Acre Feet (AF)AF
Up to 200 AF 950 $
201 to 250 AF 900
251 to 300 AF 850
351 AF or Greater 800
Outstanding
Encumbrances
General Fund 8,016,344 $
Community Facilities District No. 1 495,805
General Capital Construction 1,112,037
Infrastructure Replacement 1,749,862
Public Facilities Construction 8,747,674
Nonmajor Governmental Funds in the Aggregate 3,791,893
Total 23,913,615 $
Notes to the Financial Statements
107
Note 19. Successor Agency Trust for Assets of Former Redevelopment Agency (continued)
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.
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, 2017:
The 1993 Carlsbad Housing and Redevelopment Commission Tax Allocation Bonds were issued totaling $15,495,000.
Principal is due in amounts ranging from $735,000 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 $1,055,953. Bonds are payable from redevelopment property tax
increment revenues. Minimum annual debt service requirements have not been established for the obligation of
the Successor Agency to the city.
The aggregate maturities of long-term debt are as follows:
Principal Principal
Balance at Balance at Due Within
July 1, 2016 Increases Decreases June 30, 2017 One Year
Bonds 6,730,000$ -$ 700,000$ 6,030,000$ 735,000$
Due to the City of Carlsbad 11,603,382 212,085 954,660 10,860,807 -
18,333,382$ 212,085$ 1,654,660$ 16,890,807$ 735,000$
Year ended June 30:Principal Interest
2018 735,000 $ 299,134 $
2019 775,000 259,496
2020 815,000 217,759
2021 855,000 173,707
2022 900,000 127,200
2023-2024 1,950,000 104,675
6,030,000 $ 1,181,971 $
Notes to the Financial Statements
108
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:
Note 20. Subsequent Events
In December 2016, the CalPERS Board of Administration voted to lower the discount rate from 7.5 percent to 7.0
percent over the next three years. For public agencies, the discount rate changed approved by the Board for the
next three fiscal years ending June 30, 2019, 2020, and 2021 are 7.375 percent, 7.25 percent, and 7.00 percent,
respectively.
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)2,462,720$ 1,036,803$ 42%
Required Supplementary
Information
109
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios During Measurement Period
Total Pension Liability
Miscellaneous Plan
Measurement Total Pension Service Changes of
Period Liability - Beginning Cost Interest Benefit Terms
2013–14¹292,931,044 $ 6,908,307 $ 21,793,340 $ -$
2014–15 310,018,027 6,674,982 23,142,961 -
2015–16 322,606,958 6,836,445 24,192,948 -
Safety Plan
2013–14¹227,568,288 $ 5,425,425 $ 16,876,220 $ -$
2014–15 239,340,454 5,048,529 17,775,039 -
2015–16 247,020,357 5,209,900 18,557,781 -
Plan Fiduciary Net Position
Miscellaneous Plan
Plan Fiduciary Net
Measurement Net Position Contributions Contributions Investment
Period Beginning Employer Employee Income²
2013–14¹204,354,694 $ 8,004,157 $ 3,039,951 $ 35,526,156 $
2014–15 239,310,294 8,434,882 2,703,715 5,362,753
2015–16 242,447,633 9,562,926 2,833,466 1,330,196
Safety Plan
2013–14¹161,108,415 $ 6,141,746 $ 1,853,365 $ 27,905,516 $
2014–15 186,479,563 6,491,856 1,726,785 4,107,305
2015–16 187,329,833 6,836,098 1,933,363 990,545
110
Required Supplementary Information
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
-$ -$ (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
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 Position 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
(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
111
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 Covered - as a Percentage
Measurement of the Total Employee of Covered -
Miscellaneous Plan Period Liability Payroll Employee Payroll
2013–14¹77.19%32,856,020 $ 215.20%
2014–15¹75.15% 33,730,770 237.64%
2015–16¹71.78% 35,303,101 269.11%
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%
¹ Historical information is required only for measurement periods for which GASB 68 is applicable.
² Net of administrative expenses.
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, 2015 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 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 administrative expense.) In 2014, amounts reported were based
on the 7.5 percent discount rate.
112
Required Supplementary Information
Schedule of Plan Contributions¹
Miscellaneous Plan Contributions
in Relation to Contributions
Actuarially the Actuarially Contribution Covered -as a Percentage
Fiscal Year Determined Determined Deficiency Employee of Covered-
Ending Contribution Contribution (Excess)Payroll Employee Payroll
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 10,342,213 (10,342,213) - 35,845,774 28.85%
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 7,696,221 (7,696,221) - 18,965,085 40.58%
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
2016-17 were derived from the June 30, 2014 funding valuation reports.
Actuarial Cost Method Entry Age Normal
Amortization Method/Period For details, see June 30, 2013 Funding Valuation Report
Inflation 2.75 percent
Salary Increases Varies by Entry Age and Service.
Payroll Growth 3.00 percent
Investment Rate of Return 7.5 percent net of pension plan investment and
administrative expenses, including inflation
Retirement Age The probabilities of retirement are based on the 2010
CalPERS Experience Study for the period from 1997 to 2007.
Mortality The probabilities of mortality are based on the 2010
CalPERS Experience Study for the period from 1997 to 2007.
Pre-retirement and post-retirement mortality rates include
5 years of projected mortality improvement using Scale AA
published by the Society of Actuaries.
113
114
Combining and Individual Fund
Statements and Schedules
115
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2017
Community
Affordable Development
Housing Block Grant Donations
Cash and investments 14,984,903 $ 45,986 $ 2,468,141 $
Receivables:
Interest 51,376 158 8,463
Other - - -
Due from other governments - 89,332 -
Prepaid items - - -
Loan receivables, net of allowances 24,674,803 224,404 -
Total assets 39,711,082 $ 359,880 $ 2,476,604 $
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accrued liabilities 11,072 $ 129,978 $ 18,728 $
Deposits payable - - -
Advances from other funds - - -
Unearned revenue - - -
Total liabilities 11,072 129,978 18,728
Deferred inflows of resources:
Unavailable revenue - grants - - -
Fund balances:
Nonspendable:
Prepaid items - - -
Restricted:
Affordable housing 39,700,010 - -
Lighting and landscaping districts - - -
Habitat and agricultural mitigation/preservation - - 943,657
Capital projects - - -
General government - - -
Public safety - - -
Community development - 229,902 -
Community services - - 1,514,219
Total fund balances 39,700,010 229,902 2,457,876
Total liabilities, deferred inflows of
resources and fund balances 39,711,082 $ 359,880 $ 2,476,604 $
ASSETS
Special Revenue Funds
116
Other Police
Habitat and Special Grants and Section 8 Tyler
Financing Agricultural Revenue Asset Rental Court
Districts Management Funds Forfeiture Assistance Apartments Totals
6,635,357 $ 1,142,786 $ 560,646 $ 455,229 $ 446,490 $ 427,833 $ 27,167,371 $
20,984 4,403 1,922 1,833 1 - 89,140
14,995 - 79,977 - - 21 94,993
- - - 107,949 - - 197,281
- - - - - 1,292 1,292
- - - - - - 24,899,207
6,671,336 $ 1,147,189 $ 642,545 $ 565,011 $ 446,491 $ 429,146 $ 52,449,284 $
144,462 $ -$ 27,904 $ 17,975 $ 11,100 $ 3,305 $ 364,524 $
- - - - 8,208 25,510 33,718
- 277,120 - - - - 277,120
- - - - - - -
144,462 277,120 27,904 17,975 19,308 28,815 675,362
- - - 96,106 - - 96,106
- - - - - 1,292 1,292
- - - - 427,183 399,039 40,526,232
6,526,874 - - - - - 6,526,874
- 870,069 - - - - 1,813,726
- - - - - - -
- - 614,641 - - - 614,641
- - - 450,930 - - 450,930
- - - - - - 229,902
- - - - - - 1,514,219
6,526,874 870,069 614,641 450,930 427,183 400,331 51,677,816
6,671,336 $ 1,147,189 $ 642,545 $ 565,011 $ 446,491 $ 429,146 $ 52,449,284 $
(Continued)
Special Revenue Funds Special Revenue Funds
117
Combining Balance Sheet
Nonmajor Governmental Funds (Continued)
June 30, 2017
Grants
Assessment Bridge and and Other
and Other Thoroughfare Gas Capital
Districts Districts Tax Project Funds
Cash and investments 3,570,079 $ 11,790,407 $ 13,096,198 $ 1,329,916 $
Receivables:
Interest 7,945 40,428 44,854 4,699
Other - - - -
Due from other governments - - - 33,874
Prepaid items - - - -
Loan receivables, net of allowances - - - -
Total assets 3,578,024 $ 11,830,835 $ 13,141,052 $ 1,368,489 $
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accrued liabilities -$ -$ 159,346 $ 1,225 $
Deposits payable 426,179 - - -
Advances from other funds - - - -
Unearned revenue - - 350,000 -
Total liabilities 426,179 - 509,346 1,225
Deferred inflows of resources:
Unavailable revenue - grants - - - 32,145
Fund balances:
Nonspendable:
Prepaid items - - - -
Restricted:
Affordable, low and moderate income housing - - - -
Lighting and landscaping districts - - - -
Habitat and agricultural mitigation/preservation - - - -
Capital projects 3,151,845 11,830,835 12,631,706 1,335,119
General government - - - -
Public safety - - - -
Community development - - - -
Community services - - - -
Total fund balances 3,151,845 11,830,835 12,631,706 1,335,119
Total liabilities, deferred inflows of
resources and fund balances 3,578,024 $ 11,830,835 $ 13,141,052 $ 1,368,489 $
ASSETS
Capital Project Funds
118
Planned
Local Traffic Total Other
Park Drainage Sales Tax/Impact Governmental
Development Facilities TransNet Projects Totals Funds
13,220,919 $ 6,617,912 $ 6,331,984 $ 18,220,773 $ 74,178,188 $ 101,345,559 $
45,333 22,693 21,717 62,795 250,464 339,604
- - 97,026 - 97,026 192,019
- - - - 33,874 231,155
- - - - - 1,292
- - - - - 24,899,207
13,266,252 $ 6,640,605 $ 6,450,727 $ 18,283,568 $ 74,559,552 $ 127,008,836 $
646,067 $ 11,225 $ 416,956 $ 162,892 $ 1,397,711 $ 1,762,235 $
- - - - 426,179 459,897
6,450,000 - - 2,070,958 8,520,958 8,798,078
- - - - 350,000 350,000
7,096,067 11,225 416,956 2,233,850 10,694,848 11,370,210
- - - - 32,145 128,251
- - - - - 1,292
- - - - - 40,526,232
- - - - - 6,526,874
- - - - - 1,813,726
6,170,185 6,629,380 6,033,771 16,049,718 63,832,559 63,832,559
- - - - - 614,641
- - - - - 450,930
- - - - - 229,902
- - - - - 1,514,219
6,170,185 6,629,380 6,033,771 16,049,718 63,832,559 115,510,375
13,266,252 $ 6,640,605 $ 6,450,727 $ 18,283,568 $ 74,559,552 $ 127,008,836 $
Capital Project Funds
119
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
Community
Affordable Development Financing
Housing Block Grant Donations Districts
Revenues:
Taxes -$ -$ -$ -$
Intergovernmental - 870,446 - -
Charges for services 60,647 - - 2,345,137
Fines and forfeitures - - - -
Income from property and investments 212,680 188,023 5,848 15,656
Contributions from property owners 127,165 - - -
Donations - - 349,452 -
Miscellaneous 238,665 - 15,070 57,577
Total revenues 639,157 1,058,469 370,370 2,418,370
Expenditures:
Current:
General government - - - -
Public safety - - - -
Community development 552,586 750,523 - -
Community services - - 438,530 1,580,929
Public works - - - 730,120
Capital outlay - 308,112 44,784 1,244
Debt service:
Interest and fiscal charges - - - -
Total expenditures 552,586 1,058,635 483,314 2,312,293
Excess (deficiency) of revenues
over (under) expenditures 86,571 (166) (112,944) 106,077
Other financing sources (uses):
Transfers in 174,045 - - 500,000
Transfers out - - - -
Total other financing sources (uses)174,045 - - 500,000
Net change in fund balances 260,616 (166) (112,944) 606,077
Fund balances at beginning of year 39,439,394 230,068 2,570,820 5,920,797
Fund balances at end of year 39,700,010 $ 229,902 $ 2,457,876 $ 6,526,874 $
Special Revenue Funds
120
Other Police
Habitat and Special Grants and Section 8 Tyler
Agricultural Revenue Asset Rental Court
Management Funds Forfeiture Assistance Apartments Totals
-$ -$ -$ -$ -$ -$
- - 355,578 6,658,528 - 7,884,552
- - - - 532,830 2,938,614
- - 43,129 - - 43,129
1,949 - 2,066 214 449 426,885
190,730 341,095 - - - 658,990
- - - - - 349,452
- - - 50,754 - 362,066
192,679 341,095 400,773 6,709,496 533,279 12,663,688
- 143,075 - - - 143,075
- - 351,934 - - 351,934
140,130 - - 6,877,238 306,470 8,626,947
- - - - - 2,019,459
- - - - - 730,120
- 199,203 64,707 - 8,459 626,509
5,161 - - - - 5,161
145,291 342,278 416,641 6,877,238 314,929 12,503,205
47,388 (1,183) (15,868) (167,742) 218,350 160,483
- - - - - 674,045
- - - - (174,045) (174,045)
- - - - (174,045) 500,000
47,388 (1,183) (15,868) (167,742) 44,305 660,483
822,681 615,824 466,798 594,925 356,026 51,017,333
870,069 $ 614,641 $ 450,930 $ 427,183 $ 400,331 $ 51,677,816 $
(Continued)
Special Revenue Funds
121
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds (Continued)
For the Year Ended June 30, 2017
Grants
Assessment Bridge and and Other
and Other Thoroughfare Gas Capital
Districts Districts Tax Project Funds
Revenues:
Taxes -$ -$ 2,170,007 $ -$
Intergovernmental - - - 79,777
Charges for services - - - -
Fines and forfeitures - - - -
Income from property and investments 12,817 30,163 24,390 4,514
Contributions from property owners - 108,962 - 238,440
Donations - - - -
Miscellaneous - - - -
Total revenues 12,817 139,125 2,194,397 322,731
Expenditures:
Current:
General government 1,956,021 - - 43,871
Public safety - - - -
Community development - - - -
Community services - - - -
Public works - - 600,000 -
Capital outlay - 37,636 2,177,226 111,475
Debt service:
Interest and fiscal charges - - - -
Total expenditures 1,956,021 37,636 2,777,226 155,346
Excess (deficiency) of revenues
over (under) expenditures (1,943,204) 101,489 (582,829) 167,385
Other financing sources (uses):
Transfers in - - - -
Transfers out - - (214,871) -
Total other financing sources (uses)- - (214,871) -
Net change in fund balances (1,943,204) 101,489 (797,700) 167,385
Fund balances at beginning of year 5,095,049 11,729,346 13,429,406 1,167,734
Fund balances at end of year 3,151,845 $ 11,830,835 $ 12,631,706 $ 1,335,119 $
Capital Project Funds
122
Planned
Local Traffic Total Other
Park Drainage Sales Tax/Impact Governmental
Development Facilities TransNet Projects Totals Funds
-$ -$ -$ -$ 2,170,007 $ 2,170,007 $
- - 2,851,872 - 2,931,649 10,816,201
- - 1,103,257 - 1,103,257 4,041,871
- - - - - 43,129
35,444 18,020 12,472 38,148 175,968 602,853
1,707,703 425,486 - 3,002,886 5,483,477 6,142,467
- - - - - 349,452
- - - - - 362,066
1,743,147 443,506 3,967,601 3,041,034 11,864,358 24,528,046
- - 11,700 - 2,011,592 2,154,667
- - - - - 351,934
- - - - - 8,626,947
- - - - - 2,019,459
- - - - 600,000 1,330,120
1,201,279 240,999 3,458,364 3,693,452 10,920,431 11,546,940
-
- - - - - 5,161
1,201,279 240,999 3,470,064 3,693,452 13,532,023 26,035,228
541,868 202,507 497,537 (652,418) (1,667,665) (1,507,182)
- - 204,871 - 204,871 878,916
- - - - (214,871) (388,916)
- - 204,871 - (10,000) 490,000
541,868 202,507 702,408 (652,418) (1,677,665) (1,017,182)
5,628,317 6,426,873 5,331,363 16,702,136 65,510,224 116,527,557
6,170,185 $ 6,629,380 $ 6,033,771 $ 16,049,718 $ 63,832,559 $ 115,510,375 $
Capital Project Funds Capital Project Funds
123
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds
Year Ended June 30, 2017
Actual
Amounts Variance
(Budgetary Over
Budget Basis)(Under)
Affordable Housing
Total revenues 708,700 $ 776,592 $ 67,892 $
Total expenditures 650,967 552,586 (98,381)
Net change in fund balance 57,733 224,006 166,273
Community Development Block Grant
Total revenues 737,000 1,058,635 321,635
Total expenditures 1,454,854 1,070,116 (384,738)
Net change in fund balance (717,854) (11,481) 706,373
Donations
Total revenues 415,700 393,403 (22,297)
Total expenditures 1,003,494 532,521 (470,973)
Net change in fund balance (587,794) (139,118) 448,676
Financing Districts
Total revenues 2,899,200 2,469,752 (429,448)
Total expenditures 3,519,633 2,581,916 (937,717)
Net change in fund balance (620,433) (112,164) 508,269
Habitat and Agricultural Management
Total revenues - 205,687 205,687
Total expenditures 545,889 145,291 (400,598)
Net change in fund balance (545,889) 60,396 606,285
Other Special Revenue Funds
Total revenues 355,000 347,465 (7,535)
Total expenditures 591,671 466,124 (125,547)
Net change in fund balance (236,671) (118,659) 118,012
(Continued)
124
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds (Continued)
Year Ended June 30, 2017
Actual
Amounts Variance
(Budgetary Over
Budget Basis)(Under)
Police Grants and Asset Forfeiture
Total revenues 383,544 $ 405,608 $ 22,064 $
Total expenditures 739,463 425,668 (313,795)
Net change in fund balance (355,919) (20,060) 335,859
Section 8 Rental Assistance
Total revenues 6,605,000 6,709,497 104,497
Total expenditures 7,105,474 6,877,238 (228,236)
Net change in fund balance (500,474) (167,741) 332,733
Totals
Total revenues 12,104,144 12,366,639 262,495
Total expenditures 15,611,445 12,651,460 (2,959,985)
Net change in fund balance (3,507,301) $ (284,821) $ 3,222,480 $
125
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Capital Project Funds
Year Ended June 30, 2017
Actual
Amounts Variance
(Budgetary Over
Budget Basis)(Under)
Parking-in-Lieu (Grants and Other Capital Project Funds)
Total revenues 247,000 $ 247,272 $ 272 $
Total expenditures 44,288 44,159 (129)
Net change in fund balance 202,712 $ 203,113 $ 401 $
126
127
Combining Statement of Net Position
Internal Service Funds
June 30, 2017
Fleet Self Insured
ASSETS Management Benefits
Current assets:
Cash and investments 18,335,643 $ 5,938,607 $
Receivables:
Interest 62,872 -
Inventories 392,614 -
Total current assets 18,791,129 5,938,607
Noncurrent assets:
Capital assets:
Machinery and equipment 20,487,279 -
Intangible assets - -
Less accumulated depreciation (12,753,618) -
Total capital assets (net of accumulated
depreciation)7,733,661 -
Total noncurrent assets 7,733,661 -
Total assets 26,524,790 5,938,607
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - pension related items 360,259 -
LIABILITIES
Current liabilities:
Accrued liabilities 182,684 4,040,568
Estimated claims payable - 105,258
Current portion of long-term debt - -
Total current liabilities 182,684 4,145,826
Noncurrent liabilities:
Deposits payable - -
Net pension liability 1,320,565 -
Capital lease payable - -
Total noncurrent liabilities 1,320,565 -
1,503,249 4,145,826
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - pension related items 33,288 -
NET POSITION
Net investment in capital assets 7,733,661 -
Unrestricted 17,614,851 1,792,781
25,348,512 $ 1,792,781 $
Total liabilities
Total net position
128
Information Risk Workers’
Technology Management Compensation Total
7,848,421 $ 4,589,354 $ 9,672,865 $ 46,384,890 $
26,723 15,737 33,167 138,499
- - - 392,614
7,875,144 4,605,091 9,706,032 46,916,003
5,090,201 - - 25,577,480
1,689,637 - - 1,689,637
(3,702,057) - - (16,455,675)
3,077,781 - - 10,811,442
3,077,781 - - 10,811,442
10,952,925 4,605,091 9,706,032 57,727,445
1,331,385 88,227 53,706 1,833,577
592,424 136,582 19,878 4,972,136
- 2,934,641 7,355,549 10,395,448
187,223 - - 187,223
779,647 3,071,223 7,375,427 15,554,807
- 1,000 - 1,000
5,538,772 465,523 190,009 7,514,869
557,876 - - 557,876
6,096,648 466,523 190,009 8,073,745
6,876,295 3,537,746 7,565,436 23,628,552
732,333 5,812 8,593 780,026
2,332,682 - - 10,066,343
2,343,000 1,149,760 2,185,709 25,086,101
4,675,682 $ 1,149,760 $ 2,185,709 $ 35,152,444 $
129
Combining Statement of Revenues, Expenses and Changes in Net Position
Internal Service Funds
For the Year Ended June 30, 2017
Fleet Self Insured
Management Benefits
Operating revenues:
Other charges for services 4,972,226 $ 942,263 $
Miscellaneous 39,062 -
Total operating revenues 5,011,288 942,263
Operating expenses:
Depreciation 1,640,545 -
Fuel and supplies 1,236,777 -
Claims and premiums expense - 865,621
Small equipment purchases 22,559 -
General and administrative 1,227,078 -
Total operating expenses 4,126,959 865,621
Operating income (loss)884,329 76,642
Nonoperating revenues (expenses):
Income from property and investments 44,121 -
Interest expense - -
Gain (loss) on sale of property 87,797 -
Total nonoperating revenues (expenses)131,918 -
Income (loss) before transfers and
capital contributions 1,016,247 76,642
Transfers in 197,000 -
Capital contributions 289,152 -
Change in net position 1,502,399 76,642
Total net position at beginning of year 23,846,113 1,716,139
Total net position at end of year 25,348,512 $ 1,792,781 $
130
Information Risk Workers’
Technology Management Compensation Totals
9,149,068 $ 1,951,580 $ 2,375,780 $ 19,390,917 $
48,350 18,932 - 106,344
9,197,418 1,970,512 2,375,780 19,497,261
565,127 - - 2,205,672
- - - 1,236,777
- 3,547,890 1,736,942 6,150,453
574,704 - - 597,263
7,612,352 416,224 62,026 9,317,680
8,752,183 3,964,114 1,798,968 19,507,845
445,235 (1,993,602) 576,812 (10,584)
14,815 9,370 32,844 101,150
(50,657) - - (50,657)
- - - 87,797
(35,842) 9,370 32,844 138,290
409,393 (1,984,232) 609,656 127,706
- - 1,500,000 1,697,000
341,054 - - 630,206
750,447 (1,984,232) 2,109,656 2,454,912
3,925,235 3,133,992 76,053 32,697,532
4,675,682 $ 1,149,760 $ 2,185,709 $ 35,152,444 $
131
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2017
Fleet Self Insured
Management Benefits
Cash flows from operating activities:
Receipts from customers and users 4,972,226 $ 945,409 $
Payments to suppliers (1,551,526) -
Payments to employees (845,861) -
Internal activity - payments to other funds (137,595) -
Claims and premiums paid - (684,159)
Other receipts 49,429 -
Net cash provided by (used in) operating activities 2,486,673 261,250
Cash flows from noncapital financing activities:
Operating subsidies and transfers (to) from other funds 197,000 -
Cash flows from capital and related financing activities:
Purchase of capital assets (1,289,525) -
Gross proceeds from the sale of capital assets 155,991 -
Principal paid on capital debt - -
Interest expense - -
Net cash provided by (used in) capital and related
financing activities (1,133,534) -
Cash flows from investing activities:
Interest on investments 31,703 -
Net increase (decrease) in cash and cash equivalents 1,581,842 261,250
Cash and cash equivalents at beginning of year 16,753,801 5,677,357
Cash and cash equivalents at end of year 18,335,643 $ 5,938,607 $
132
Information Risk Workers’
Technology Management Compensation Total
9,149,068 $ 1,951,580 $ 2,375,780 $ 19,394,063 $
(4,801,644) (61,456) - (6,414,626)
(3,533,114) (255,502) (110,649) (4,745,126)
(39,351) (21,655) (1,780) (200,381)
- (1,668,042) (2,689,663) (5,041,864)
48,350 18,932 - 116,711
823,309 (36,143) (426,312) 3,108,777
- - 1,500,000 1,697,000
(305,244) - - (1,594,769)
- - - 155,991
(176,311) - - (176,311)
(50,657) - - (50,657)
(532,212) - - (1,665,746)
10,849 7,549 25,553 75,654
301,946 (28,594) 1,099,241 3,215,685
7,546,475 4,617,948 8,573,624 43,169,205
7,848,421 $ 4,589,354 $ 9,672,865 $ 46,384,890 $
(Continued)
133
Combining Statement of Cash Flows
Internal Service Funds (Continued)
For the Year Ended June 30, 2017
Fleet Self Insured
Management Benefits
Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities:
Operating income (loss)884,329 $ 76,642 $
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization 1,640,545 -
Change in assets and liabilities:
(Increase) decrease in receivables 10,367 3,146
(Increase) in inventories 43,270 -
(Increase) in prepaid items - -
(Increase) in deferred outflows - pension related items (173,235) -
Increase (decrease) in accrued liabilities (19,967) 181,542
Increase (decrease) in estimated claims payable - (80)
Increase (decrease) in net pension liability 142,223 -
Increase (decrease) in deferred inflows - pension related items (40,859) -
Net cash provided by (used in) operating activities 2,486,673 $ 261,250 $
Noncash capital financing activities:
Capital assets contributed by other funds 289,152 $ -$
Unrealized gains (losses)(156,557) $ -$
134
Information Risk Workers’
Technology Management Compensation Total
445,235 $ (1,993,602) $ 576,812 $ (10,584) $
565,127 - - 2,205,672
- - 229,322 242,835
- - - 43,270
20,638 - - 20,638
(742,349) (45,277) (27,901) (988,762)
(47,447) 60,155 13,853 188,136
- 1,823,911 (1,193,318) 630,513
1,017,786 136,870 (10,389) 1,286,490
(435,681) (18,200) (14,691) (509,431)
823,309 $ (36,143) $ (426,312) $ 3,108,777 $
341,054 $ -$ -$ 630,206 $
(68,976) $ (41,590) $ (81,203) $ (348,326) $
135
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2017
Contractors’ and Miscellaneous Deposits
Balance Balance
ASSETS July 1, 2016 Additions Deductions June 30, 2017
Current assets:
Cash and investments 13,757,645 $ 52,723,318 $ 53,344,025 $ 13,136,938 $
Receivables:
Interest 37,984 42,100 37,984 42,100
Taxes - 14 14 -
Other - 3,544 3,544 -
Prepaid items 5,630 4,129 5,630 4,129
Total current assets 13,801,259 $ 52,773,105 $ 53,391,197 $ 13,183,167 $
LIABILITIES
Accrued liabilities 1,182,879 $ 54,861,656 $ 55,160,206 $ 884,329 $
Deposits held for others 12,618,380 4,833,439 5,152,981 12,298,838
Total liabilities 13,801,259 $ 59,695,095 $ 60,313,187 $ 13,183,167 $
Assessment Districts
Balance Balance
ASSETS July 1, 2016 Additions Deductions June 30, 2017
Current assets:
Cash and investments 6,465,092 $ 21,658,867 $ 22,191,399 $ 5,932,560 $
Receivables:
Interest 65,105 67,203 65,105 67,203
Taxes 1,319 932 1,319 932
Other 89,161 9,247 89,161 9,247
Total current assets 6,620,677 21,736,249 22,346,984 6,009,942
Restricted assets:
Cash and investments 5,751,318 - 626,496 5,124,822
Total restricted assets 5,751,318 - 626,496 5,124,822
Total assets 12,371,995 $ 21,736,249 $ 22,973,480 $ 11,134,764 $
LIABILITIES
Accrued liabilities 41,440 $ 29,780 $ 20,538 $ 50,682 $
Deposits held for others 12,330,555 20,507,194 21,753,667 11,084,082
Total liabilities 12,371,995 $ 20,536,974 $ 21,774,205 $ 11,134,764 $
(continued)
136
Combining Statement of Changes in Assets and Liabilities
Agency Funds (continued)
For the Year Ended June 30, 2017
Total Agency Funds
Balance Balance
ASSETS July 1, 2016 Additions Deductions June 30, 2017
Current assets:
Cash and investments 20,222,737 $ 74,382,185 $ 75,535,424 $ 19,069,498 $
Receivables:
Interest 103,089 109,303 103,089 109,303
Taxes 1,319 946 1,333 932
Other 89,161 12,791 92,705 9,247
Prepaid items 5,630 4,129 5,630 4,129
Total current assets 20,421,936 74,509,354 75,738,181 19,193,109
Restricted assets:
Cash and investments 5,751,318 - 626,496 5,124,822
Total current assets 5,751,318 - 626,496 5,124,822
Total assets 26,173,254 $ 74,509,354 $ 76,364,677 $ 24,317,931 $
LIABILITIES
Accrued liabilities 1,224,319 $ 54,891,436 $ 55,180,744 $ 935,011 $
Deposits held for others 24,948,935 25,340,633 26,906,648 23,382,920
Total liabilities 26,173,254 $ 80,232,069 $ 82,087,392 $ 24,317,931 $
137
Combining Statement of Fiduciary Net Position by Project Area
Private Purpose Trust Funds
June 30, 2017
Redevelopment Redevelopment Total
Obligation Obligation Private
Retirement Retirement Purpose
Trust Fund Trust Fund Trust
ASSETS Village Project Area SCCRA Project Area Funds
Current assets:
Cash and investments 1,192,773 $ -$ 1,192,773 $
Receivables:
Interest 4,107 - 4,107
Total current assets 1,196,880 - 1,196,880
Noncurrent assets:
Loans receivable 3,750,000 - 3,750,000
Total assets 4,946,880 - 4,946,880
LIABILITIES
Current liabilities:
Accrued liabilities 2,699 - 2,699
Accrued interest payable 106,143 - 106,143
Current portion of long-term debt 735,000 - 735,000
Total current liabilities 843,842 - 843,842
Noncurrent liabilities:
Due to the City of Carlsbad 7,973,560 2,887,247 10,860,807
Tax allocation bonds payable 5,295,000 - 5,295,000
Total noncurrent liabilities 13,268,560 2,887,247 16,155,807
Total liabilities 14,112,402 2,887,247 16,999,649
NET POSITION
Held in trust for redevelopment
obligation retirement purposes (9,165,522) $ (2,887,247) $ (12,052,769) $
138
Combining Statement of Changes in Fiduciary Net Position by Project Area
Private Purpose Trust Funds
For the Year Ended June 30, 2017
Redevelopment Redevelopment Total
Retirement Retirement Private
Obligation Obligation Purpose
Trust Fund Trust Fund Trust
ADDITIONS Village Project Area SCCRA Project Area Funds
Contributions:
Redevelopment Property Tax Trust Fund (RPTTF) revenues 2,454,954 $ -$ 2,454,954 $
Income from property and investments 7,766 - 7,766
Total additions 2,462,720 - 2,462,720
DEDUCTIONS
General and administrative 380,652 - 380,652
Interest expense and fees 469,107 69,896 539,003
Total deductions 849,759 69,896 919,655
Change in net position 1,612,961 (69,896) 1,543,065
Total net position (deficit) at beginning of year (10,778,483) (2,817,351) (13,595,834)
Total net position (deficit) at end of year (9,165,522) $ (2,887,247) $ (12,052,769) $
139
140
Statistical Section
Statistical Section
141
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 142
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 153
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 160
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 170
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 174
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)
2008 2009 2010 2011
Governmental activities
Net investment in capital assets 713,026$ 742,500$ 767,719$ 774,269$
Restricted for:
Capital assets 189,694 186,597 178,669 184,419
Lighting and landscaping districts 2,152 2,196 2,827 2,133
Affordable housing 33,888 35,330 36,187 40,005
Habitat and agricultural mitigation management 6,949 7,115 6,600 5,377
Other purposes 3,145 2,412 2,710 5,298
Unrestricted 250,835 268,779 279,737 284,825
Total governmental activities net position 1,199,689$ (1)1,244,929$ (1)1,274,449$ 1,296,326$
Business-type activities
Net investment in capital assets 292,684$ 308,440$ 317,238$ 314,691$
Restricted for:
Capital assets 44,738 43,167 44,241 44,954
Unrestricted 32,600 28,469 34,556 38,278
Total business-type activities net position 370,022$ (1)380,076$ (1)396,035$ 397,923$
Total government
Net investment in capital assets 1,005,710$ 1,050,940$ 1,084,957$ 1,088,960$
Restricted for:
Capital assets 234,432 229,764 222,910 229,373
Lighting and landscaping districts 2,152 2,196 2,827 2,133
Affordable housing 33,888 35,330 36,187 40,005
Habitat and agricultural mitigation management 6,949 7,115 6,600 5,377
Other purposes 3,145 2,412 2,710 5,298
Unrestricted 283,435 297,248 314,293 323,103
Total net position 1,569,711$ 1,625,005$ 1,670,484$ 1,694,249$
Source: City of Carlsbad Comprehensive Annual Financial Reports
(1) Net position for prior years were restated in FY 2007-08, to reflect the application of GASB 45.
(2) 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.
(3) Net position for the prior year was restated in FY 2014-15, to reflect the applicaton of GASB 68.
142
2012 2013 2014 2015 2016 2017
780,727$ 782,500$ 784,210$ 783,298$ 788,035$ 788,078$
192,713 182,685 175,468 178,228 176,279 183,245
2,246 2,958 4,703 5,263 5,921 6,527
38,434 37,390 39,317 39,544 40,390 40,528
4,799 2,665 1,713 1,708 1,758 1,805
4,022 3,685 3,774 3,059 2,948 2,818
308,470 (2)319,317 328,602 223,522 245,078 249,816
1,331,411$ 1,331,200$ 1,337,787$ (3)1,234,622$ (3)1,260,409$ 1,272,817$
311,392$ 307,000$ 305,681$ 307,122$ 317,927$ 344,836$
45,522 45,990 46,632 47,315 45,950 40,098
47,530 55,758 66,083 69,922 73,285 85,153
404,444$ 408,748$ 418,396$ (3)424,359$ (3)437,162$ 470,087$
1,092,119$ 1,089,500$ 1,089,891$ 1,090,420$ 1,105,962$ 1,132,914$
238,235 228,675 222,100 225,543 222,229 223,343
2,246 2,958 4,703 5,263 5,921 6,527
38,434 37,390 39,317 39,544 40,390 40,528
4,799 2,665 1,713 1,708 1,758 1,805
4,022 3,685 3,774 3,059 2,948 2,818
356,000 375,075 394,685 293,444 318,363 334,969
1,735,855$ 1,739,948$ 1,756,183$ 1,658,981$ 1,697,571$ 1,742,904$
143
Changes in Net Position
Last Ten Fiscal Years
(dollars in thousands)
2008 2009 2010 2011 2012
Expenses
Governmental activities
General government 14,537$ 12,859$ 23,038$ (2)16,907$ 16,675$
Public safety 42,796 44,632 44,371 45,011 45,576
Community development 15,697 16,168 18,920 17,043 17,689
Community services 18,938 20,270 18,755 25,136 25,398
Public works 35,971 35,190 35,383 25,759 28,441
Interest and fiscal charges on long-term debt 666 588 547 453 298
Total governmental activities 128,605 129,707 141,014 130,309 134,077
Business-type activities
Carlsbad Municipal Water District 28,796 30,134 33,923 34,978 35,985
Golf course 7,347 13,040 (1)11,927 11,538 11,190
Wastewater 10,400 11,836 10,434 11,751 11,330
Solid waste 2,588 2,580 2,535 2,565 2,922
Total business-type activities 49,131 57,590 58,819 60,832 61,427
Total government 177,736$ 187,297$ 199,833$ 191,141$ 195,504$
Program Revenues
Governmental activities
Charges for services:
General government 2,698$ 847$ 341$ 1,793$ 315$
Public safety 4,578 4,591 4,358 4,502 4,379
Community development 3,191 2,177 3,110 4,332 3,567
Community services 2,803 3,000 3,089 2,934 2,747
Public works 8,522 3,573 4,196 3,567 3,717
Operating grants and contributions 11,349 12,120 11,445 12,033 11,813
Capital grants and contributions 73,708 27,722 32,459 13,557 15,429
Total governmental activities 106,849 54,030 58,998 42,718 41,967
Business-type activities
Charges for services:
Carlsbad Municipal Water District 22,894 24,574 29,865 30,715 35,776
Golf course 5,704 5,801 5,625 5,850 6,127
Wastewater 8,151 8,531 9,580 10,053 10,989
Solid waste 2,195 3,032 2,988 3,015 2,961
Operating grants and contributions 1,300 1,824 1,734 1,263 1,201
Capital grants and contributions 30,223 14,612 17,882 5,640 4,560
Total business-type activities 70,467 58,374 67,674 56,536 61,614
Total government 177,316$ 112,404$ 126,672$ 99,254$ 103,581$
Net (Expense)/Revenue:
Governmental activities (21,756)$ (75,677)$ (82,016)$ (87,591)$ (92,110)$
Business-type activities 21,336 784 8,855 (4,296) 187
Total government net expense (420)$ (74,893)$ (73,161)$ (91,887)$ (91,923)$
144
2013 2014 2015 2016 2017
23,574$ (5)20,187$ 16,108$ 16,147$ 18,374$
48,468 48,942 48,856 50,463 55,994
23,061 (6)16,286 17,201 17,581 19,458
24,839 29,055 31,429 33,610 34,754
36,806 30,314 36,273 37,464 34,317
4 1 - 1 3
156,752 144,785 149,867 155,266 162,900
41,626 43,547 40,897 39,458 45,219
10,668 11,032 10,538 10,545 10,211
13,556 12,488 12,629 12,613 12,626
2,918 2,856 2,973 2,997 3,272
68,768 69,923 67,037 65,613 71,328
225,520$ 214,708$ 216,904$ 220,879$ 234,228$
1,469$ 289$ 1,382$ 296$ 327$
4,025 3,950 4,220 3,980 4,647
4,174 4,378 5,160 5,211 6,350
2,813 4,354 5,374 5,500 5,804
5,073 3,720 4,014 4,152 3,952
13,199 11,919 12,242 11,912 12,630
17,741 16,129 19,105 12,042 (9)22,789
48,494 44,739 51,497 43,093 56,499
44,240 (7)46,750 47,461 39,854 (10)44,817
6,278 6,635 6,709 6,988 7,119
12,402 12,896 12,875 12,963 13,467
3,060 3,320 3,245 3,206 3,302
38 90 59 5,646 2,471
2,855 3,198 5,879 2,011 13,322
68,873 72,889 76,228 70,668 84,498
117,367$ 117,628$ 127,725$ 113,761$ 140,997$
(108,258)$ (100,046)$ (98,370)$ (112,173)$ (106,401)$
105 2,966 9,191 5,055 13,170
(108,153)$ (97,080)$ (89,179)$ (107,118)$ (93,231)$
(Continued)
145
Changes in Net Position (Continued)
Last Ten Fiscal Years
(dollars in thousands)
2008 2009 2010 2011 2012
General Revenues and Other Changes in Net Position
Governmental activities
Taxes:
Property taxes 52,705$ 55,338$ 55,113$ 54,049$ 51,538$
Sales and use taxes 27,031 23,098 23,031 25,660 28,094
Transient occupancy taxes 14,277 12,752 11,490 11,569 12,872
Franchise taxes 4,634 5,274 4,906 4,650 4,852
Business license taxes 3,328 3,422 3,458 3,581 2,695
Real property transfer taxes 951 621 758 911 925
Vehicle license fees 450 353 309 483 53 (3)
Income from property and investments 24,955 19,828 12,523 8,372 6,088
Other general revenues 513 359 391 328 419
Extraordinary gain/(loss)- - - - 20,477 (4)
Transfers (2,634) (127) (443) (135) (1,810)
Total governmental activities 126,210 120,918 111,536 109,468 126,203
Business type activities
Property taxes 2,711 2,861 2,822 2,779 2,721
Income from property and investments 8,030 5,908 3,686 2,109 2,054
Other general revenues 954 209 153 3,599 106
Transfers 2,634 127 443 135 1,810
Total business-type activities 14,329 9,105 7,104 8,622 6,691
Total government 140,539$ 130,023$ 118,640$ 118,090$ 132,894$
Change in Net Position
Governmental activities 104,454$ 45,241$ 29,520$ 21,877$ 34,093$
Business-type activities 35,665 9,889 15,959 4,326 6,878
Total government 140,119$ 55,130$ 45,479$ 26,203$ 40,971$
Source: City of Carlsbad Comprehensive Annual Financial Reports
(1) In FY 2008-09, the city's municipal golf course began making debt service payments and depreciating its assets.
(2) 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.
(3) The State of California ceased sending the city vehicle license fee revenues in FY 2011-12.
(4) 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.
(5) 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 to surplus construction funds from the Poinsettia Lane Assessment District to be used in the refunding of
Reassessment District No. 2012-1.
(6) The large increase in FY 2012-13 includes a $3.8 million transfer of an affordable housing loan receivable to the Successor Housing Agency
trust fund as required by the California Department of Finance.
(7) The increase in FY 2012-13 was the result of a combination of a five percent increase in the number of water units sold coupled with an average
eight percent increase in water rates charged to customers and a reimbursement from a lawsuit involving a landslide.
(8) The extraordinary loss in FY 2013-14 resulted from the restatement of accrued interest on prior year advances made by the city to the Successor
Housing Agency per California state mandate.
(9) The decrease in FY 2015-16 was a result of one-time funds received from the federal government in the previous fiscal year for the 2014 Poinsettia
Fire, as well as the receipt of retroactive mandated cost reimbursements.
(10) The decrease in FY 2015-16 was a result of a decrease in water sales during the fiscal year from drought conservation measures.
(11) The increase in FY 2015-16 is a result of higher cash balances that generate interest, an increase in investment earnings, and interest
received from the California Department of Finance earned on unpaid mandated costs.
146
2013 2014 2015 2016 2017
52,861$ 52,608$ 55,992$ 58,945$ 63,988$
28,403 30,520 32,146 34,843 33,999
14,702 17,472 19,713 20,943 22,267
5,118 4,907 5,427 5,632 5,475
3,834 4,177 4,548 4,895 4,328
1,058 1,080 1,406 1,546 1,393
55 - - - -
1,792 6,917 4,564 11,910 (11)1,975
426 429 609 486 451
- (10,289) (8)- - -
(656) (1,188) (1,264) (1,240) (15,067)
107,593 106,633 123,141 137,960 118,809
2,904 2,897 3,133 3,306 3,569
555 2,498 1,870 3,163 749
85 99 623 39 370
655 1,188 1,264 1,240 15,067
4,199 6,682 6,890 7,748 19,755
111,792$ 113,315$ 130,031$ 145,708$ 138,564$
(665)$ 6,587$ 24,771$ 25,787$ 12,408$
4,304 9,648 16,081 12,803 32,925
3,639$ 16,235$ 40,852$ 38,590$ 45,333$
147
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
2008 2009 2010 2011 (2)2012
General Fund
Reserved 56,479$ 59,303$ 59,586$ -$ -$
Unreserved 64,494 66,302 68,935 - -
Nonspendable - - - 53,943 54,228
Restricted - - - - -
Committed - - - 1,000 1,000
Assigned - - - 23,584 22,955
Unassigned - - - 57,533 61,384
Total General Fund 120,973$ 125,605$ 128,521$ 136,060$ 139,567$
All Other Governmental Funds
Reserved 38,963$ 34,573$ 50,617$ -$ -$
Unreserved, reported in:
Special revenue funds 36,277 40,207 41,449 - -
Debt service funds (12,095) (11,150) (17,824) - -
Capital project funds 268,915 276,183 262,612 (1)- -
Nonspendable
Special revenue funds - - - 433 440
Debt service funds - - - - -
Capital project funds - - - 250 -
Restricted
Special revenue funds - - - 65,585 64,401
Debt service funds - - - - -
Capital project funds - - - 171,214 177,372
Committed
Special revenue funds - - - - -
Debt service funds - - - - -
Capital project funds - - - - -
Assigned
Special revenue funds - - - - -
Debt service funds - - - - -
Capital project funds - - - 123,473 123,465
Unassigned
Special revenue funds - - - - -
Debt service funds - - - (18,658) - (3)
Capital project funds - - - - -
Total all other governmental funds 332,060$ 339,813$ 336,854$ 342,297$ 365,678$
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
$10 million in excess development fees paid by Rancho Santa Fe Road property owners.
(2) GASB 54, which requires changes in the reporting categories for fund balances, was implemented in FY 2010-11.
(3) AB1x26 and AB 1484 were implemented in FY 2011-12. The former Redevelopment Agency debt service funds were transfered to trust funds.
(4) The large decreases in the restricted fund balance in the capital projects fund is a result of increased expenditures during FY 2012-13 and
2013-14 for the construction of Alga Norte Community Park.
(5) Beginning in FY 2015-16, the Gas Tax fund balance was reclassified from Special Revenue to Capital Project.
148
2013 2014 2015 2016 2017
-$ -$ -$ -$ -$
- - - - -
57,719 56,707 56,381 55,324 53,751
- - - - -
1,000 1,000 1,000 1,000 1,000
26,200 27,838 40,865 42,692 38,439
69,578 75,615 80,274 94,404 78,191
154,497$ 161,160$ 178,520$ 193,420$ 171,381$
-$ -$ -$ -$ -$
- - - - -
- - - - -
- - - - -
435 430 3 4 1
- - - - -
- - - - -
61,938 66,833 66,300 51,013 (5)51,677
- - - - -
167,009 (4)157,712 (4)161,499 176,280 (5)183,245
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
121,861 131,627 136,237 131,939 146,994
- - - - -
- - - - -
- - - - -
351,243$ 356,602$ 364,039$ 359,236$ 381,917$
149
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
2008 2009 2010 2011 2012
Revenues:
Taxes 105,724$ 103,874$ 100,249$ 103,660$ 105,595$
Intergovernmental 19,565 10,029 12,108 12,847 9,603
Licenses and permits 1,991 1,022 1,484 1,590 1,852
Charges for services 11,089 9,616 10,215 9,938 10,092
Fines and forfeitures 1,500 1,402 1,199 1,051 892
Income from property and investments 24,163 19,132 12,719 9,278 6,253
Contributions from property owners 23,850 3,117 (2)4,580 5,473 9,927
Donations 281 174 203 310 206
Miscellaneous 932 926 1,263 2,521 697
Total revenues 189,095 149,292 144,020 146,668 145,117
Expenditures:
Current:
General government 14,433 12,896 22,778 16,937 16,992
Less: Interdepartmental charges (2,287) (3,676) (3,991) (3,015) (3,750)
Public safety 43,719 45,003 44,686 44,157 44,915
Community development 15,726 16,294 18,272 16,980 17,587
Community services 17,136 17,517 16,493 22,560 22,815
Public works 24,355 23,851 23,851 13,078 11,773
Capital outlay 39,010 22,097 19,727 20,985 17,367
Debt service:
Principal retirement 1,140 1,200 490 515 851
Interest and fiscal charges 1,347 1,188 1,016 935 308
Total expenditures 154,579 136,370 143,322 133,132 128,858
Excess (deficiency) of revenues
over (under) expenditures 34,516 12,922 698 13,536 16,259
Other financing sources (uses):
Proceeds from the sale of property - - - - -
Issuance of debt - - - 581 -
Transfers in 20,390 9,101 21,837 9,802 19,887
Transfers out (19,948) (9,637) (22,578) (10,937) (23,097)
Extraordinary gain (loss)- - - - 12,847 (3)
Total other financing sources (uses)442 (536) (741) (554) 9,637
Net change in fund balances 34,958$ 12,386$ (43)$ 12,982$ 25,896$
Debt service as percentage of noncapital
expenditures (1)2.08%2.01%1.18%1.26%0.99%
Source: City of Carlsbad Comprehensive Annual Financial Reports
(1) Noncapital expenditures are total expenditures less capital outlay (to the extent capitalized for the Government-wide Statement of Net
Position) and expenditures for capitalized assets included within the functional expenditure categories.
(2) Steep drop in development throughout the city due to the economic recession starting in FY 2008-09.
(3) AB1x26 and AB 1484 were implemented in FY 2011-12. The net assets of the former Redevelopment Agency were incorporated into trust funds.
(4) Increase in taxes in FY 2014-15 due to growth in property and TOT taxes.
(5) Includes a transfer out to the Golf Course Fund in the amount of $14.8 million for the defeasance of the golf course construction bonds
during FY 2016-17.
150
2013 2014 2015 2016 2017
109,447$ 114,996$ 123,411$ (4) 129,617$ 134,165$
11,513 10,602 10,359 11,290 11,963
2,016 2,184 2,369 2,467 3,034
10,261 11,278 13,181 12,913 14,309
861 876 837 854 740
2,362 7,604 6,442 9,970 3,845
12,029 9,042 10,688 8,009 13,330
411 210 440 417 349
1,969 1,219 2,550 1,503 1,467
150,869 158,011 170,277 177,040 183,202
23,072 21,471 17,903 17,221 27,925
(3,858) (3,566) (3,807) (3,471) (3,345)
46,162 47,333 48,915 52,015 57,329
18,805 15,689 17,363 17,918 19,192
22,094 25,816 27,138 28,380 29,738
11,299 15,442 16,350 17,465 17,349
28,602 18,702 20,050 34,669 17,603
316 159 - - -
6 5 5 6 5
146,498 141,051 143,917 164,203 165,796
4,371 16,960 26,360 12,837 17,406
- - - - -
- - - - -
8,087 11,477 14,857 9,970 20,849
(14,792) (16,415) (16,420) (12,710) (37,613) (5)
- - - - -
(6,705) (4,938) (1,563) (2,740) (16,764)
(2,334)$ 12,022$ 24,797$ 10,097$ 642$
0.24%0.13%0.00%0.00%0.00%
151
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
2008 52,704$ 28,012$ 14,277$ 4,634$ 3,328$ 951$ 1,818$ 105,724$
2009 55,338 24,765 (1)12,752 (1)5,274 3,422 621 1,702 103,874
2010 55,113 (1)22,819 11,490 4,906 (1)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 (2)28,733 (3)12,872 (3)4,852 3,669 925 3,006 (4)105,595
2013 52,888 29,301 14,702 (5)5,118 3,834 1,058 2,546 109,447
2014 52,607 31,464 17,472 (6)4,907 4,178 1,080 3,288 114,996
2015 55,992 (7)33,202 19,713 (8)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 (7)34,543 22,267 (9)5,475 4,328 1,393 2,171 134,165
Change
2008-2017 21%23%56%18%30%46%19%27%
(1) Reflects the impact of the economic recession.
(2) 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.
(3) Reflects improvement in the economy.
(4) The large increases are due to state Section 2103 allocations which became effective in FY 2010-11 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.
(5) The increase in TOT in FY 2012-13 is due to the opening of two new hotels and higher occupancy and room rates throughout the city.
(6) The increase in TOT in FY 2013-14 is due to the opening of one new hotel and higher occupancy and room rates throughout the city.
(7) Reflects improvement in the housing market and new construction.
(8) The increase in TOT in FY 2014-15 is due to the re-opening of one renovated hotel, the openings of several new hotels, and higher
occupancy and room rates throughout the city.
(9) The increase in TOT in FY 2016-17 is due to higher room rates throughout most of the city's hotels and an increase in available rooms.
Source: City of Carlsbad Comprehensive Annual Financial Reports
* Includes Vehicle License Fees (VLF) in lieu, property tax increment, low/moderate housing, set aside taxes and CFD No. 1 special taxes.
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total General Governmental Tax Revenues
Last Ten Fiscal Years
(in thousands)
Property Tax
Sales and Use Taxes
TOT
Other
Fiscal Year
152
Water and Wastewater Rates
Last Ten Fiscal Years
Wastewater
Fiscal Year
Base Price Per
Unit (1)
Monthly Base
Rate
2008 $12.12 $1.76 $16.20
2009 14.54 2.12 17.65
2010 16.78 2.29 (2)20.93
2011 18.00 2.70 23.03
2012 19.80 2.97 24.53
2013 21.38 3.20 25.02
2014 20.07 3.19 25.52
2015 21.08 3.35 26.03
2016 22.19 3.53 27.81
2017 24.11 3.84 27.81
Source: City of Carlsbad
Note: Rates shown are for a 5/8" meter, which is the standard household meter size.
(1) One unit of water equals 748 gallons.
(2) Tiered rates were implemented starting in FY 2009-10. From that point on, the base price shown is for tier 1,
which applies to the first 12 units of usage per month at a single family residence.
Water
Monthly Delivery
Charge
153
Assessed Value of Taxable Property
Last Ten Fiscal Years
(dollars in millions)
Fiscal
Year
Residential
Property
Commercial
Property
Industrial
Property
Exemptions
and Other
Taxable
Property (1)
Net
Assessed
Valuation
Change
From Prior
Year
Estimated
Property Tax
Revenue (2)
Total Direct
Tax Rate (3)
2008 16,988$ 2,635$ 1,883$ 534$ 22,040$ 9.87%42$ 0.1927%
2009 17,683 3,132 2,102 600 23,517 6.70%45 0.1927%
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 (4)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%
(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
(4) The increase in estimated property tax revenue is due to improvements in the housing market and new construction.
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
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Taxable Assessed Property Value
Last Ten Fiscal Years
(in millions)
Residential Property
Commercial Property
Industrial Property
Fiscal Year
154
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
Augmentatio
n 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)
2008 0.1927%0.3412%0.1576%0.1497%0.0937%0.0198%0.0453%1.0000%0.0419%1.0419%
2009 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0393 1.0393
2010 0.1927 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
(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 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
155
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
(rate per $100 of assessed value)
Total Tax
Rates (2)
County
Tax Rate
Areas (3)
Carlsbad
Unified
Schools
Oceanside
Unified
Schools
San Marcos
Unified
Schools
Vista Unified
Schools
Encinitas
Union
Schools
Palomar
Comm.
College
Palomar
Pomerado
Hospital
MWD /
SDCWA
Total Voter
Approved
Rates (1)
1.0423 1 - - - - 0.0423%- - - 0.0423%
1.0458 46 - - - - 0.0423 - - 0.0035 0.0458
1.0528 3 0.0528 - - - - - - - 0.0528
1.0563 58 0.0528 - - - - - - 0.0035 0.0563
1.0634 3 - - - - 0.0423 0.01757 - 0.0035 0.0634
1.0730 5 - - - 0.05195 - 0.01757 - 0.0035 0.0730
1.0739 3 0.0528 - - - - 0.01757 - 0.0035 0.0739
1.0764 2 - - 0.0729 - - - - 0.0035 0.0764
1.0798 1 0.0528 - - - - - 0.0235 0.0035 0.0798
1.0939 29 - - 0.0729 - - 0.01757 - 0.0035 0.0939
1.0995 1 - 0.0960 - - - - - 0.0035 0.0995
1.0999 1 - - 0.0729 - - - 0.0235 0.0035 0.0999
1.1174 11 - - 0.0729 - - 0.01757 0.0235 0.0035 0.1174
(1) The majority of voter approved debt is related to various school district bonds.
(2) The Total Tax Rate is the 1.00% Proposition 13 rate plus the Voter Approved Debt rate.
(3) Tax rate areas are determined by the County of San Diego. There are currently thirteen tax rates distributed among the
164 tax rate areas in the city. The table above shows the number of tax rate areas affected by each of the rates.
Fiscal Year 2016-17 Voter Approved Debt Tax Rates for all Rate Areas
Source: County of San Diego Auditor and Controller's Office
156
Principal Property Taxpayers
Current Year and Nine Years Ago
Taxpayer
Taxable Assessed
Value Rank
Percentage of
Total City Net
Assessed Value
Taxable Assessed
Value Rank
Percentage of
Total City Net
Assessed Value
La Costa Resort & Spa 286,092,490$ 1 1.01%126,131,849$ 3 0.57%
La Costa Glen Retirement Community 246,872,105 2 0.87%160,479,289 1 0.73%
The Forum Shopping Center 190,772,571 3 0.67%--
Legoland California, LLC 188,771,482 4 0.66%116,351,777 4 0.53%
The Shoppes at Carlsbad 160,522,329 5 0.56%--
Park Hyatt Aviara Resort 150,750,000 6 0.53%132,196,556 2 0.60%
La Costa Town Center, LLC 134,282,791 7 0.47%--
Carlsbad Premium Outlets 124,045,636 8 0.44%109,602,750 5 0.50%
Pacific View Apartments 119,907,699 9 0.42%--
The Reserve at Carlsbad Apartments 112,000,000 10 0.39%79,307,037 8 0.36%
Callaway Golf Company --100,856,885 6 0.46%
Borders, Inc.--81,002,094 7 0.37%
H.G. Fenton Company --75,411,647 9 0.34%
Pulte Home Corp --62,467,200 10 0.28%
Total 1,714,017,103$ 6.03%1,043,807,084$ 4.74%
Net assessed valuation 28,423,782,189$ 22,040,017,749$
Source: County of San Diego Offices of the Auditor and Controller and County Assessor
2017 2008
157
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
2008 $56,098,718 $52,622,619 93.80%$1,895,030 $54,517,649 97.18%
2009 59,297,940 55,759,900 94.03%1,885,866 57,645,766 97.21%
2010 58,433,851 55,030,915 94.18%1,348,424 56,379,339 96.48%
2011 56,792,002 53,953,149 95.00%872,640 54,825,789 96.54%
2012 53,682,809 52,778,359 98.32%726,856 53,505,215 99.67%
2013 54,469,819 53,677,921 98.55%544,341 54,222,262 99.55%
2014 55,883,499 55,042,944 98.50%479,163 55,522,107 99.35%
2015 60,266,230 59,509,285 98.74%475,659 59,509,285 98.74%
2016 63,363,527 62,595,504 98.79%355,646 62,595,504 98.79%
2017 67,116,590 66,233,111 98.68%N/A 66,233,111 98.68%
Source: County of San Diego Office of the Auditor and Controller
(1) Includes real property transfer taxes, homeowner exemptions and Proposition 172 public safety sales taxes.
(2) Total collections include secured, unsecured, homeonwer's exception and supplementary amounts distributed by the county.
Collections within the
Fiscal Year of the Levy Total Collections to Date
$0
$20
$40
$60
$80
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Property Tax Levies & Collections
Last Ten Fiscal Years
(in millions)
Total Tax Levy for Fiscal Year (1)
Total Collections to Date
Fiscal Year
158
159
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(dollars in thousands except per capita)
Fiscal Year
Bonds / Special
Debt (4)
Certificates of
Participation Capital Leases Loans Payable
2008 11,205 735 - -
2009 10,740 - - -
2010 10,250 - - -
2011 9,735 - - 581
2012 - - - 475
2013 - - - 159
2014 - - - -
2015 - - - -
2016 (5)- - 970 -
2017 - - 784 -
Sources: MuniServices, LLC, California Department of Finance, and US Census Data
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
(1) During FY 2006-07, Carlsbad Municipal Golf Course Revenue Bonds were issued for $18.5 million.
(2) The State Water Resources Control Board issued low interest loans for the Carlsbad Water Recycling Facility for $9.7 million
during FY 2005-06, and $19.4 million in FY 2006-07. An additional loan of $29.5 million was authorized in FY 2015-16, of which
$389,180 has been issued to date.
(3) 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.
(4) 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, per AB1x26 and AB1484.
(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 the FY 2016-17
Governmental Activities
$0
$200
$400
$600
$800
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Fiscal Year
Outstanding Debt per Capita
Last Ten Fiscal Years
160
Bonds / Special
Debt (1)
Installment
Purchase
Agreements
Loan Payable
(2)
Capital
Leases Total
Percentage
of Personal
Income (3)Per Capita
18,540 5,485 28,465 958 65,388 0.92%629.88
18,265 4,810 27,106 736 61,657 0.84%596.26
17,975 4,105 25,715 502 58,547 0.79%557.30
17,670 3,365 24,290 256 55,897 1.38%524.58
17,345 2,585 22,830 14 43,249 1.00%401.67
17,237 1,697 21,335 - 40,428 0.92%373.48
16,645 905 19,837 - 37,387 0.77%339.36
16,260 - 18,429 - 34,689 0.71%313.49
16,058 - 17,670 - 34,698 0.60%307.25
- (6)- 15,901 - 16,685 0.28%146.71
Business-Type Activities
161
City of Carlsbad
Schedule of Direct and Overlapping Bonded Debt
Current Fiscal Year
Fiscal Year 2016-17 Assessed Valuation:29,373,751,955$
Redevelopment Incremental Valuation:949,969,766
Adjusted Assessed Valuation:28,423,782,189$
Total Debt City’s Share of
Overlapping Tax and Assessment Debt:06/30/17 Debt 6/30/17
Metropolitan Water District 74,905,000$ 1.143%856,164$
Palomar Community College District 639,550,855 2.749%17,581,253
Carlsbad Unified School District 168,548,765 98.084%165,319,371
Oceanside Unified School District 234,822,525 0.005%11,741
Vista Unified School District 96,229,882 0.716%689,006
Encinitas Union School District 49,961,066 31.331%15,653,302
San Marcos Unified School District 275,461,541 18.544%51,081,588
San Marcos Unified School District School Facility Improvement District 2,819,069 20.156%568,212
San Marcos Unified School District CFD No. 4 17,275,000 32.779%5,662,572
San Marcos Unified School District CFD No. 5 16,075,000 100.000%16,075,000
San Dieguito Union High School District 316,250,000 9.265%29,300,563
San Dieguito Union HS District CFD No. 94-1 79,107 100.000%79,107
San Dieguito Union HS District CFD No. 94-2 28,460,289 98.160%27,936,620
San Dieguito Union HS District CFD No. 95-2 3,674,857 13.293%488,499
Palomar Health District 443,465,867 1.651%7,321,621
Olivenhain Municipal Water District, Assess. Dist. No. 96-1 11,675,000 22.264%2,599,322
City of Carlsbad CFD No. 3, I.A. No. 1 & No. 2 21,305,000 100.000%21,305,000
City of Carlsbad 1915 Act Bonds 39,185,000 100.000%39,185,000
Total Overlapping Tax and Assessment Debt 2,439,743,823$ 401,713,941$
Overlapping General Fund Obligation Debt:
San Diego County General Fund Obligations 291,180,000$ 6.322%18,408,400$
San Diego County Pension Obligations 605,520,000 6.322%38,280,974
San Diego County Superintendent of Schools General Fund Obligations 11,460,000 6.322%724,501
Mira Costa Community College District Certificates of Participation 12,265,000 27.680%3,394,952
Palomar Community College District General Fund Obligations 3,280,000 2.749%90,167
Carlsbad Unified School District General Fund Obligations 46,295,000 98.084%45,407,988
San Marcos Unified School District General Fund Obligations 57,876,115 18.544%10,732,547
Vista Unified School District Certificates of Participation 2,710,000 0.716%19,404
San Dieguito Union High School District General Fund Obligations 12,730,000 9.265%1,179,435
Total Overlapping General Fund Obligation Debt 1,043,316,115$ 118,238,368$
Overlapping Tax Increment Debt (Successor Agency):6,030,000 100.000%6,030,000 (3)
Total Overlapping Debt:3,489,089,938$ 525,982,309$
City of Carlsbad Direct Debt:
City of Carlsbad Governmental Activities Obligations -$ 0.000%-$
Total City of Carlsbad Direct Debt -$ -$
Combined Total Debt 3,489,089,938$ 525,982,309$ (2)
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) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.
non-bonded capital lease obligations.
Ratios to FY 2016-17 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.37%
Ratios to Adjusted Assessed Valuation:
Governmental Activities Direct Debt 0.00%
Combined Total Debt 1.85%
(3) Created by the dissolution of the Redevelopment Agency in FY 2011-12 per AB1x26 and AB1484.
Percent
Applicable (1)
162
163
City of Carlsbad
Direct and Overlapping Debt
Last Ten Fiscal Years
(rate per $1,000 of assessed value)
2008 2009 2010
Overlapping Tax and Assessment Debt:
Metropolitan Water District 0.187$ 0.160$ 0.147$
Palomar Community College District 0.224 0.208 0.207
Carlsbad Unified School District 2.521 5.513 5.401
Carlsbad Unified School District CFD No. 1 0.318 0.263 0.230
Oceanside Unified School District - - 0.001
Vista Unified School District 0.029 0.033 0.043
Encinitas Union School District 0.270 0.228 0.205
San Marcos Unified School District - - -
San Marcos Unified School District School Facility Improvement District 0.282 0.250 0.227
Palomar Health District 0.303 0.389 0.383
Leucadia County Water District and I.D. No. 1 - - -
San Marcos Unified School District CFD No. 4 0.270 0.248 0.245
San Marcos Unified School District CFD No. 5 1.114 1.016 1.000
San Dieguito Union High School District - - -
San Dieguito Union HS District CFD No. 94-1 0.012 0.011 0.004
San Dieguito Union HS District CFD No. 94-2 0.867 0.793 1.105
San Dieguito Union HS District CFD No. 95-2 0.004 0.004 0.022
San Dieguito Union HS District combined CFD 0.668 0.626 0.218
Olivenhain Municipal Water District, Assess. Dist. No. 96-1 0.177 0.157 0.151
City of Carlsbad CFD No. 3, I.A. No. 1 & No. 2 1.338 1.246 1.244
City of Carlsbad 1915 Act Bonds 3.091 2.806 2.685
Total Overlapping Tax and Assessment Debt 11.675$ 13.951$ 13.518$
Overlapping General Fund Obligation Debt:
San Diego County General Fund Obligations 1.051$ 1.304$ 1.201$
San Diego County Pension Obligations 3.094 2.782 2.470
San Diego City Superintendent of Schools General Fund Obligations 0.051 0.046 0.061
Mira Costa Community College District Certificates of Participation 0.052 0.046 0.043
Palomar Community College District General Fund Obligations 0.011 0.010 0.010
Carlsbad Unified School District General Fund Obligations 2.404 2.206 2.132
San Marcos Unified School District General Fund Obligations 0.082 0.076 0.834
Vista Unified School District Certificates of Participation - - -
Encinitas Union School District Certificates of Participation 0.013 0.008 0.004
San Dieguito Union High School District General Fund Obligations - - 0.048
Other Unified School District Certificates of Participation 0.001 0.002 0.002
Total Overlapping General Fund Obligation Debt 6.759$ 6.480$ 6.805$
Overlapping Tax Increment Debt (Successor Agency):-$ -$ -$
Total Overlapping Debt:18.434 20.431 20.323
City of Carlsbad Direct Debt:
City of Carlsbad Governmental Activities Obligations 0.033 - -
Total City of Carlsbad Direct Debt 0.033$ -$ -$
Combined Total Debt 18.467$ 20.431$ 20.323$
Source: MuniServices, LLC and California Municipal Statistics, Inc.
164
2011 2012 2013 2014 2015 2016 2017
0.129$ 0.110$ 0.080$ 0.062$ 0.049$ 0.039$ 0.030$
0.447 0.448 0.375 0.361 0.562 0.520 0.619
8.660 8.527 8.312 7.921 7.073 6.370 5.816
0.192 0.149 0.103 0.052 - - -
0.001 0.001 0.001 - - - -
0.039 0.038 0.031 0.028 0.025 0.022 0.024
0.357 0.338 0.454 0.426 0.385 0.515 0.551
- 3.103 1.711 2.248 2.087 1.922 1.797
0.202 0.176 0.076 0.057 0.035 0.027 0.020
0.444 0.434 0.353 0.336 0.308 0.285 0.258
- - - - - - -
0.241 0.236 0.230 0.292 0.254 0.232 0.199
0.979 0.950 0.918 0.864 0.690 0.626 0.566
- - 0.621 0.607 0.967 0.906 1.031
0.004 0.004 0.004 0.004 0.003 0.003 0.003
1.093 1.106 1.082 1.032 0.928 0.855 0.983
0.022 0.022 0.022 0.023 0.021 0.019 0.017
0.215 - - - - - -
0.147 0.142 0.138 0.139 0.031 0.102 0.091
1.080 1.063 1.045 1.000 0.903 0.836 0.750
2.640 2.569 2.107 2.018 1.727 1.564 1.379
16.892$ 19.416$ 17.663$ 17.470$ 16.048$ 14.843$ 14.134$
1.133$ 1.155$ 1.070$ 0.983$ 0.857$ 0.709$ 0.648$
2.410 2.300 2.017 1.865 1.664 1.497 1.347
0.059 0.055 0.047 0.042 0.036 0.031 0.025
0.036 0.032 0.028 0.023 0.018 0.014 0.119
0.009 0.008 0.006 0.006 0.005 0.004 0.003
2.089 2.028 1.967 2.086 1.846 1.692 1.598
0.831 0.837 0.458 0.441 0.407 0.376 0.378
- - 0.001 0.001 0.001 0.001 0.001
- - - - - - -
0.049 0.059 0.051 0.049 0.047 0.044 0.041
0.002 0.002 - - - - -
6.618$ 6.476$ 5.645$ 5.496$ 4.881$ 4.368$ 4.160$
-$ -$ 0.376$ 0.341$ 0.290$ 0.250 0.212
23.510 25.892 23.684 23.307 21.219 19.461 18.506
0.025 0.021 0.007 - - - -
0.025$ 0.021$ 0.007$ -$ -$ -$ -$
23.535$ 25.913$ 23.691$ 23.307$ 21.219$ 19.461$ 18.506$
165
Legal Debt Margin Information
Last Ten Fiscal Years
(dollars in thousands)
2008 2009 2010 2011 2012
Net assessed valuation 22,040,018$ 23,517,153$ 23,234,948$ 23,012,997$ 22,982,172$
Debt limit (25% x 15%)826,501 881,893 871,311 862,987 861,831
Less amount of debt applicable to limit:
Bonded debt 29,745 29,005 28,225 27,405 17,345 (1)
Certificates of participation 735 - - - -
Loan payable - - - 581 475
Obligations under capital leases 958 736 502 256 14
Total net debt applicable to limit 31,438 29,741 28,727 28,242 17,834
Legal debt margin 795,063$ 852,152$ 842,584$ 834,745$ 843,997$
Total net debt applicable to the limit
as a percentage of debt limit 3.80%3.37%3.30%3.27%2.07%
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 may be offset by amounts set aside for repaying
general obligation bonds.
(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, per AB1x26 and AB1484.
(2) The golf course bonds were defeased during FY 2016-17.
0%
1%
2%
3%
4%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Percent of Debt Applicable to the Legal Debt Limit
Last Ten Fiscal Years
Fiscal Year
166
2013 2014 2015 2016 2017
22,956,650$ 23,522,746$ 25,489,468$ 26,924,891$ 28,423,782$
860,874 882,103 955,855 1,009,683 1,065,892
17,005 16,645 16,260 15,855 - (2)
- - - - -
159 - - - -
- - - 970 785
17,164 16,645 16,260 16,825 785
843,710$ 865,458$ 939,595$ 992,858$ 1,065,107$
1.99%1.89%1.70%1.67%0.07%
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
167
Pledged-Revenue Coverage
Last Ten Fiscal Years
2008 2009 2010 2011 2012
Wastewater Revenue Bonds
Gross revenues (1), (7)11,134,290$ 10,551,005$ 10,837,232$ 11,564,398$ 12,391,225$
Less expenses (2), (7)6,645,724 7,523,300 6,197,845 6,060,142 6,645,436
Net available revenue 4,488,566$ 3,027,705$ 4,639,387$ 5,504,256$ 5,745,789$
Debt service
Principal (7)640,000$ 675,000$ 705,000$ 740,000$ 780,000$
Interest (7)295,506 262,169 228,006 191,419 152,468
Total debt service 935,506$ 937,169$ 933,006$ 931,419$ 932,468$
Coverage 4.80 3.23 4.97 5.91 6.16
Recycled Water Loans
Gross revenues (3)4,714,098$ 5,749,477$ 6,635,220$ 5,942,531$ 7,002,009$
Less expenses (4)2,484,843 2,925,479 3,300,263 3,629,787 4,133,530
Net available revenue 2,229,255$ 2,823,998$ 3,334,957$ 2,312,744$ 2,868,479$
Debt service
Principal (5)1,041,202$ 1,223,781$ 1,252,343$ 1,282,018$ 1,312,398$
Interest 799,759 652,702 624,140 594,463 564,084
Total debt service 1,840,961$ 1,876,483$ 1,876,483$ 1,876,481$ 1,876,482$
Coverage 1.21 1.50 1.78 1.23 1.53
Golf Course Revenue Bonds
Gross revenues (1), (8)6,614,579$ 7,680,342$ 7,080,711$ 7,582,458$ 7,863,951$
Less expenses (2), (8)6,312,031 6,848,161 6,426,412 6,356,592 6,177,438
Net available revenue 302,548$ 832,181$ 654,299$ 1,225,866$ 1,686,513$
Debt service
Principal (6), (8)-$ 275,000$ 290,000$ 305,000$ 325,000$
Interest (8)827,050 821,550 810,250 798,350 785,750
Total debt service 827,050$ 1,096,550$ 1,100,250$ 1,103,350$ 1,110,750$
Coverage 0.37 0.76 0.59 1.11 1.52
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) FY 2006-07 is the first year loan payments were made.
(6) FY 2008-09 is the first year for principal payment.
(7) Debt service was completed during FY 2015-16.
(8) The golf course bonds were defeased during FY 2016-17.
168
2013 2014 2015 2016 2017
12,599,601$ 13,699,286$ 13,723,835$ 13,723,835$ -$
7,094,310 6,989,194 7,249,798 7,249,798 -
5,505,291$ 6,710,092$ 6,474,037$ 6,474,037$ -$
820,000$ 860,000$ 905,000$ 905,000$ -$
111,469 68,419 23,191 - -
931,469$ 928,419$ 928,191$ 905,000$ -$
5.91 7.23 6.97 7.15 n/a
8,160,109$ 9,392,061$ 9,210,258$ 8,216,362$ 8,371,467$
4,019,176 3,640,786 3,826,699 4,679,706 4,863,054
4,140,933$ 5,751,275$ 5,383,559$ 3,536,656$ 3,508,413$
1,343,498$ 1,375,337$ 1,407,932$ 1,441,301$ 1,475,461$
532,983 501,144 468,550 435,182 401,021
1,876,481$ 1,876,481$ 1,876,482$ 1,876,483$ 1,876,482$
2.21 3.06 2.87 1.88 1.87
6,777,292$ 7,747,116$ 8,428,375$ 8,196,853$ -$
5,954,896 6,125,159 6,302,019 6,273,320 -
822,396$ 1,621,957$ 2,126,356$ 1,923,533$ -$
340,000$ 360,000$ 385,000$ 405,000$ -$
771,600 755,850 739,088 721,313 -
1,111,600$ 1,115,850$ 1,124,088$ 1,126,313$ -$
0.74 1.45 1.89 1.71 n/a
169
Demographic and Economic Statistics
Last Ten Fiscal Years
Year
Total
Population
% of S.D.
County
Population
% Change from
Previous Year Median Age
Average
Household Size
2008 103,811 3.30%2.44%39.7 2.45
2009 103,406 3.30%-0.39%39.4 2.50
2010 105,055 3.30%1.59%38.7 2.53
2011 106,555 3.42%1.43%39.4 2.53
2012 107,674 3.43%1.05%40.3 2.58
2013 108,246 3.44%0.53%39.3 2.63
2014 110,169 3.45%1.78%40.3 2.53
2015 110,653 3.43%0.44%41.1 2.30
2016 112,930 3.43%2.06%42.1 2.68
2017 113,725 3.43%0.70%41.9 2.58
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.
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.
170
% High School
Graduate
% Bachelor's
Degree or
Higher
Personal
Income (1)
(millions)
Per Capita
Personal
Income (2)
City
Unemployment
Rate
96.4%49.3% n/a 68,214$ 3.00%
95.8%50.9% n/a 70,833$ 3.90%
n/a n/a n/a 70,581$ 6.50%
96.2%51.6%4,048$ 37,985$ (2)6.80%
95.3%50.6%4,304$ 39,975$ 6.30%
88.5%35.4%4,403$ 40,672$ 5.90%
95.6%51.3%4,862$ 44,134$ 6.30%
96.0%51.9%4,907$ 44,345$ 4.30%
95.6%54.8%5,741$ 50,838$ 5.20%
95.8%54.2%6,060$ 53,285$ 4.20%
(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.
171
Principal Employers
Current Year and Nine Years Ago
Employer Employees Rank
% of Total City
Employment Employees Rank
% of Total City
Employment
Manufacturing
Life Technologies 1,982 1 2.87%3,716 1 6.69%
Genoptix, Inc.613 2 0.89%- --
Nordson Asymtek 600 3 0.87%- --
Taylor Made Golf Company, Inc.554 4 0.80%2,075 2 3.74%
Zimmer Dental Inc.472 5 0.68%332 8 0.60%
Callaway Golf Company 429 6 0.62%1,637 3 2.95%
Ionis Pharmaceuticals 342 7 0.50%- --
Titleist and Foot-Joy Worldwide 322 8 0.47%400 6 0.72%
Systems, Machines Automation 300 9 0.43%294 9 0.53%
Upper Deck 293 10 0.42%364 7 0.66%
Crestone Group Baking Co.- --575 4 1.04%
Asymtek - --492 5 0.89%
Acushnet Golf - --400 6 0.72%
Astec America - --291 10 0.52%
Non-Manufacturing
Legoland California, LLC 2,302 1 3.33%986 3 1.78%
ViaSat, Inc.1,565 2 2.27%1,837 1 3.31%
Omni La Costa Resort & Spa 1,175 3 1.70%1,087 2 1.96%
Carlsbad Unified School District 988 4 1.43%950 4 1.71%
Gemological Institute of America, Inc.846 5 1.23%587 7 1.06%
OptumRX, Inc.787 6 1.14%- --
City of Carlsbad 683 7 0.99%851 5 1.53%
Glenbrook at Home, LLC 661 8 0.96%- --
Park Hyatt Aviara Resort 616 9 0.89%709 6 1.28%
24-Hour Fitness, USA 553 10 0.80%430 10 0.77%
Grand Pacific Resorts 540 8 0.97%
Macy's 496 9 0.89%
Subtotal Employees 16,083 23.29%19,049 34.30%
Total Employees (estimate)69,053 55,538
Source: Carlsbad Business License Data
2017 2008
172
173
Authorized Full and 3/4 Time City Government Employees by Program Area
Last Ten Fiscal Years
Program Area 2008 2009 2010 2011 2012
Policy and Leadership Group
City Attorney 7.00 7.00 7.00 7.00 7.00
City Clerk - - - - -
City Council 1.00 1.00 1.00 1.00 1.00
City Manager 7.00 8.00 8.00 8.00 7.00
City Treasurer 0.75 0.75 0.75 0.75 0.75
Communications 3.75 3.75 3.75 2.75 2.75
Records Management 8.00 8.00 8.00 8.00 6.25
Administrative Services
Finance and Risk Management 32.00 32.00 31.00 30.50 30.50
Human Resources and Workers' Comp 10.00 10.00 10.00 9.00 9.00
Information Technology 19.00 19.50 19.00 22.50 (2)22.50
Public Safety
Police 162.00 162.00 162.00 162.00 162.00
Fire 88.75 88.75 88.75 88.75 87.75
Community Development
Community and Economic Development 50.00 50.00 50.00 54.00 (2)50.00
Housing and Neighborhood Services 10.00 10.00 10.00 11.00 (2)13.00
Community Services
Library and Arts 53.00 53.00 53.00 52.25 51.25
Parks and Recreation 30.50 30.50 72.10 (1)71.95 70.95
Public Works
Environmental Management - - - - -
General Services, Engineering, Environmental 173.05 174.80 133.00 (1)- (2)-
General Services - - - - -
Property and Fleet - - - 41.60 (2)39.60
Public Works Administration - - - - -
Transportation - - - 58.40 (2)54.40
Utilities 55.45 55.20 55.40 69.55 (2)68.55
Full and 3/4 Time Authorized Employees 711.25 714.25 712.75 699.00 684.25
Net Increase/(decrease) over prior year 21.00 3.00 (1.50) (13.75) (14.75)
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).
A 3/4 time employee is scheduled to work 1,560 hours per year (including vacation and sick-leave).
(1) During FY 2009-10, the Parks Department was moved from Public Works to Parks and Recreation.
(2) During FY 2010-11, the Community Services, Public Works and Information Technology groups were reorganized to better reflect
the needs of the city.
(3) During FY 2014-15, the Policy and Leadership and Community Services groups were reorganized to better reflect the needs of the city.
(4) During FY 2015-16 and FY 2016-17, the Public Works group restructured divisions to better reflect the future needs of the city.
174
2013 2014 2015 2016 2017
7.00 7.00 7.00 7.00 6.00
- - 3.00 (3)3.00 3.00
1.00 1.00 1.00 1.00 1.00
7.00 7.00 7.00 7.00 8.00
0.75 0.75 0.75 0.75 0.75
2.75 2.75 4.75 (3)5.00 5.00
6.00 5.00 2.00 (3)2.00 2.00
30.50 31.50 31.50 32.50 33.00
9.00 9.00 11.00 11.00 11.00
22.50 22.50 22.50 19.50 20.00
161.00 161.00 162.00 168.00 168.00
87.75 88.00 89.00 89.00 90.00
47.00 44.00 44.00 44.00 44.00
10.00 10.00 12.00 13.00 13.00
51.25 51.25 50.25 (3)50.50 50.50
68.40 67.60 61.60 (3)58.15 57.15
- - - 8.50 (4)9.50
- - - - -
- - - - -
40.55 40.60 39.90 28.10 (4)51.30 (4)
- - - 8.05 (4)9.85
54.40 53.40 55.90 57.35 33.00 (4)
67.65 65.40 64.60 60.85 (4)60.20
674.50 667.75 669.75 674.25 676.25
(9.75) (6.75) 2.00 4.50 2.00
175
Operating Indicators by Function/Program
Last Ten Fiscal Years
2008 2009 2010 2011 2012
General Government
Number of recruitments processed 54 39 44 31 35
Number of new hires 118 75 61 39 22
Business licenses processed 9,405 9,029 9,173 9,539 9,303
Number of payments processed 41,991 41,381 40,310 41,344 39,075
Public Safety
Police
Calls for service 94,126 94,492 94,678 97,414 93,248
Average priority one response (minutes)6.0 5.9 6.0 5.5 5.9
Cases 11,259 10,309 8,826 8,188 7,963
Fire
Emergency responses 6,705 7,853 9,503 9,084 9,106
Response time: arrivals on scene within goal standard 89%85%74%71%72%
Community Development
Affordable housing units completed 168 90 6 5 -
Financial assistance to affordable housing projects 1,932,000$ 1,014,000$ 3,750,000$ 525,000$ 780,000$
Building permits issued n/a n/a n/a 2,600 1,400
Building inspections conducted 35,000 15,000 15,500 19,500 19,000
Final inspections (residential dwelling units)700 200 300 260 271
Final inspections (commercial square feet)n/a n/a n/a n/a n/a
Code enforcement actions 5,500 4,484 3,400 4,320 3,827
Community Services
Library - total material circulation 1,291,611 1,334,875 1,365,127 1,362,700 1,358,839
Library - patron visits 662,794 670,932 749,514 858,788 858,422
Arts - number of events 62 58 54 44 50
Arts - attendance of events 76,000 80,000 80,000 80,000 75,000
Recreation - youth sports participants 1,200 1,200 1,200 1,200 1,200
Recreation - adult sports participants 5,400 5,400 5,400 5,400 5,450
Recreation - enrichment class enrollees 15,000 13,539 13,075 13,300 12,650
Recreation - special events participants 6,400 10,700 12,000 9,000 10,000
Recreation - aquatics classes conducted 271 350 368 470 557
Trees trimmed 1,808 1,820 1,816 2,221 1,863
Public Works
Streets
Road miles resurfaced- overlay or slurry seal 11.9 4.7 15.3 3.8 25.2
Carlsbad Municipal Water District
Average consumption (millions of gallons per day)18.1 17.7 15.3 (1)14.1 (1)14.4
Annual water deliveries (acre feet)20,271 19,867 17,142 (1)15,786 (1)16,104
Water connections 27,770 27,890 27,910 27,978 28,379
Wastewater
Sewage pumped (millions of gallons per day)7.96 7.11 7.10 7.57 6.92
Annual flow (millions of gallons)2,906 2,595 2,590 2,762 2,524
Wastewater connections 22,200 22,331 22,335 22,342 22,631
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 the year.
(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 delayed due to the implementation of a new permitting system during FY 2016-17.
176
2013 2014 2015 2016 2017
93 117 102 77 122
43 82 59 96 301
9,422 10,327 10,735 11,449 8,142 (5)
38,441 39,310 40,663 41,398 41,304
90,122 87,976 91,314 92,061 84,858
5.8 5.8 6.5 6.1 5.9
8,314 8,296 8,349 9,253 8,884
10,755 9,925 9,830 11,455 12,515
71%63%63%64%64%
59 - - - -
7,408,000$ -$ 2,646,000$ -$ 1,280,000$
1,500 1,400 1,600 3,000 4,500
24,000 19,000 21,000 23,000 27,000
440 190 200 200 600
n/a 45,000 60,000 60,000 95,000
4,943 4,794 5,389 10,994 n/a (6)
1,348,333 1,369,369 1,293,282 1,103,090 1,243,228
821,045 791,533 804,003 609,679 (4)720,205
50 62 80 88 n/a
80,000 75,000 87,000 85,000 n/a
1,200 2,292 (2)1,000 1,000 968
5,200 5,600 6,150 5,600 4,500
12,200 10,350 19,030 (3)19,632 17,402
13,000 13,600 17,841 (3)19,474 12,150
575 1,018 (2)1,224 684 733
1,936 1,920 2,018 1,965 1,971
24.3 14.8 18.1 20.0 23.8
15.4 15.9 14.6 12.1 11.0
17,248 17,801 16,368 13,578 12,324
28,947 29,045 29,190 29,190 29,782
6.65 5.89 6.17 5.82 5.90
2,426 2,151 2,252 2,125 2,153
22,955 23,282 23,431 23,431 23,747
177
Capital Asset Statistics
Last Ten Fiscal Years
2008 2009 2010 2011 2012
Community Services
Number of parks and community fields 31 31 31 31 31
Acres of developed parks 183 183 183 183 183
Acres of open space and community fields 790 790 790 790 790
Miles of trails 35 38 47 47 47
Number of pools 1 1 1 1 1
Number of community centers 4 4 4 4 4
Number of libraries 2 3 3 3 3
Number of records in library catalog 373,592 367,161 365,371 370,228 370,034
Public Safety
Fire Protection
Number of stations 6 6 6 6 6
Number of fire trucks 11 11 11 11 12
Number of ambulances 5 5 5 5 5
Number of other fire vehicles 14 14 14 14 15
Police Protection
Number of patrol and other vehicles 93 91 91 90 90
Number of motorcycles 17 18 15 11 11
Public Works
Carlsbad Municipal Water District
Miles of lines and mains 442 447 447 518 527 (1)
Wastewater
Miles of sewers 265 269 282 284 288
Streets
Miles of streets 338 340 340 340 340
Number of street lights 7,066 7,100 7,113 7,126 7,142
Number of traffic signals 164 168 172 172 172
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.
178
2013 2014 2015 2016 2017
31 33 33 33 33
183 281 319 319 319
755 728 728 728 728
47 47 47 47 47
1 3 3 3 3
4 4 4 4 4
3 3 3 3 3
373,010 361,507 357,862 341,745 341,122
6 6 6 6 6
12 13 12 12 12
6 8 7 6 5
15 16 15 18 20
88 114 114 106 106
13 13 14 15 12
534 534 534 559 559
288 288 288 288 288
343 346 347 348 350
7,179 7,236 7,262 7,265 7,334
174 174 177 177 177
179
180