HomeMy WebLinkAbout; ; 2020-2021 ACFR Annual Comprehensive Financial Report; 2021-06-30JUNE 30, 2021
FISCAL YEAR ENDED
Annual Comprehensive Financial Report
{city of
Carlsbad
Ca f o r n a
Fiscal Year Ended June 30, 2021
Annual Comprehensive Financial Report
{city of
Carlsbad
Annual Comprehensive
Financial Report
Fiscal Year Ended
June 30, 2021
Prepared by the
Finance Department
1635 Faraday Ave.
Carlsbad, CA 92008
www.carlsbadca.gov
{city of
Carlsbad
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CITY OF CARLSBAD
Annual Comprehensive Financial Report
Year Ended June 30, 2021
Table of Contents
Page
Introductory Section:
Letter of Transmittal 1
Certificate of Achievement for Excellence in Financial Reporting, Government Finance Officers
Association 19
Location Map 20
List of City Officials 21
Organization Chart 22
Financial Section:
Independent Auditor’s Report 23
Management’s Discussion and Analysis 26
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position 46
Statement of Activities 48
Fund Financial Statements:
Balance Sheet – Governmental Funds 50
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 53
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 54
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities 57
Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual –
General Fund 58
Statement of Net Position – Proprietary Funds 60
Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds 64
Statement of Cash Flows – Proprietary Funds 66
Statement of Fiduciary Net Position – Fiduciary Funds 70
Statement of Changes in Fiduciary Net Position – Fiduciary Funds 71
Notes to the Financial Statements 72
Required Supplementary Information 119
120
125
126
Schedule of Changes in Net Pension Liability and Related Ratios During Measurement Period
Schedule of Pension Plan Contributions
Schedule of Changes in Net OPEB Liability and Related Ratios During Measurement Period
Schedule of OPEB Plan Contributions 129
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Table of Contents (continued)
Page
Combining and Individual Fund Financial Statements and Schedules 131
Combining Balance Sheet – Nonmajor Governmental Funds 132
Combining Statement of Revenues, Expenditures and Changes in Fund Balances –
Nonmajor Governmental Funds 136
Combining Schedule of Revenues and Expenditures – Budget and Actual (Budgetary Basis) –
Special Revenue Funds 140
Combining Schedule of Revenue and Expenditures – Budget and Actual (Budgetary Basis) –
Capital Project Funds 143
Combining Statement of Net Position – Internal Service Funds 144
Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds 146
Combining Statement of Cash Flows – Internal Service Funds 148
Combining Statement of Fiduciary Net Position 152
Combining Statement of Changes in Fiduciary Net Position 153
Statistical Section:
Table of Contents 155
Financial Trends
Net Position by Component – Last Ten Fiscal Years 156
Changes in Net Position – Last Ten Fiscal Years 158
Fund Balances of Governmental Funds – Last Ten Fiscal Years 162
Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 164
Revenue Capacity
General Governmental Tax Revenues by Source – Last Ten Fiscal Years 166
Water and Wastewater Rates – Last Ten Fiscal Years 167
Assessed Value of Taxable Property – Last Ten Fiscal Years 169
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years 170
Principal Property Taxpayers – Current Year and Nine Years Ago 172
Property Tax Levies and Collections – Last Ten Fiscal Years 173
Debt Capacity
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 175
Schedule of Direct and Overlapping Bonded Debt – Current Fiscal Year 176
Direct and Overlapping Debt – Last Ten Fiscal Years 178
Legal Debt Margin Information – Last Ten Fiscal Years 180
Pledged-Revenue Coverage – Last Ten Fiscal Years 182
Demographic and Economic Information
Demographic and Economic Statistics – Last Ten Fiscal Years 184
Principal Employers – Current Year and Nine Years Ago 187
Operating Information
Authorized Full and ¾ Time City Government Employees by Program Area – Last Ten Fiscal Years 188
Operating Indicators by Function/Program – Last Ten Fiscal Years 190
Capital Asset Statistics – Last Ten Fiscal Years 192
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Introductory Section
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Introductory Section
{city of
Carlsbad
Administrative Services Branch
Finance Department 1635 Faraday Avenue Carlsbad, CA 92008 760-602-2430 t
www.carlsbadca.gov 760-602-8553 f
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November 30, 2021
Honorable Mayor, City Council,
and Residents of the City of Carlsbad
City of Carlsbad
Carlsbad, CA 92008
LETTER OF TRANSMITTAL
FISCAL YEAR 2020-21 ANNUAL COMPREHENSIVE FINANCIAL REPORT
Honorable Mayor, City Council, and Residents:
I am pleased to present the fiscal year 2020-21 Annual Comprehensive Financial Report 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, 2021.
Management assumes full responsibility for the completeness and reliability of the information contained
in this report, based upon a comprehensive framework of internal controls that has been established for
this purpose. Because the cost of internal controls should not outweigh its benefits, the city’s
comprehensive framework of internal controls has been designed to provide reasonable, rather than
absolute, assurance that the financial statements will be free from material misstatement.
State law and the Carlsbad Municipal Code require that an annual financial report is prepared. This report
fulfills that obligation. It has been prepared in conformity with generally accepted accounting principles
(GAAP) and with the financial reporting requirements prescribed by the Governmental Accounting
Standards Board (GASB). The independent auditing firm, Davis Farr LLP, has issued an unmodified (“clean”)
opinion on the city’s financial statements for the fiscal year that ended June 30, 2021. The independent
auditor’s report is located at the front of the financial section of this Annual Comprehensive Financial
Report.
Management’s Discussion and 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.
As a recipient of federal and state financial assistance, the city is required to have a “Single Audit”
performed by an independent audit firm. The Single Audit is 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 will be completed in
January 2022 and made publicly available on the city’s website in the city’s separately issued Compliance
Reports and Other Financial Information.
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Profile of the City of Carlsbad
Carlsbad incorporated in 1952 as a General Law City, although its “village” area dates back more than 100
years. In June 2008, the voters of Carlsbad overwhelmingly approved the city to change to a Charter City.
Carlsbad is located on the southern California coast, about 35 miles north of the City of San Diego. The city
is governed by a five-member City Council under the Council Manager form of government. The City Council
is elected by district, on a staggered basis, for a term of four years. The city currently has four districts;
however, the mayor is elected at large. The City Clerk and City Treasurer are also elected to four-year terms.
The City Council appoints the City Manager and City Attorney.
The city covers approximately 39 square miles
and has a population of approximately
115,000, with an expected built out
population of 120,000 residents. Commercial
activities in the city include: a major regional
shopping center, a specialty outlet center, a
commercial center with upscale retail shops,
43 hotels offering 5,059 rooms, 325 short-
term vacation rentals and 668 timeshares for
tourist lodging, over 23 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 of Carlsbad, 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:
• Development services
• Fire and paramedic services
• Housing programs
• Library and arts programs
• Park lands
• Police protection services
• Recreation programming for all ages
• Solid waste services
• Street construction and maintenance
• Water delivery system
• Wastewater system
In addition to the full range of services normally associated with a municipality, Carlsbad offers programs
to help residents and businesses. The city’s Housing Authority administers federal housing assistance to
more than 500 low-income households in Carlsbad, and older residents can take advantage of Carlsbad’s
senior citizen programs.
Carlsbad
San Diego
County
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Budget Process
The City Council sets the overall policy direction for Carlsbad and helps staff prioritize programs, projects
and services to support that direction. Public input plays a critical role in setting both the long-range policy
direction of the city and decisions about day-to-day spending.
Public input specific to the budget process involved four main opportunities: City Council goal-setting,
presentation of goal work plans, presentation of the preliminary budget and the budget adoption public
hearing.
The City Council gathered in February and March 2021 for three public workshops to develop goals
for the fiscal year 2021-22 budget. Taking into account work that was already put in motion through public
input into the fiscal year 2020-21 budget, the City Council asked staff to focus on four main areas:
• Engage the community through a citizens committee to create a new plan to manage growth in
Carlsbad in a way that maintains an excellent quality of life
• Reduce the homeless unsheltered population, among those who want help, by 50% within five
years, with quarterly reports until the city decreases the unsheltered homeless population or five
years
• Bring the Fire Department into conformance with Standards of Cover evaluation
• Conduct a facilitated City Council Workshop to work on team building and City Council
communication and an ethics ordinance to support the delivery of superior public service
In addition to these four goals, the City Council asked that three principles be integrated into day-to-day
activities. These include early and meaningful public engagement, technology infrastructure, and diversity,
equity and inclusion.
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 and the public on the city’s website.
BUDGET SCHEDULE
January
Departments begin preparing budgets
April
Prepare and refine draft budget
May
Preliminary budget to the City Council
June
Rnal budget adoption
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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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Economic and Fiscal Issues Facing the City
Over one year ago, the unprecedented impacts of the Coronavirus Disease 2019 (“COVID-19”) began
challenging the City of Carlsbad, the state of California, the nation, and the entire world. The World Health
Organization declared COVID-19 a global pandemic on March 11, 2020. The city subsequently declared a
local emergency on March 17, 2020, and a countywide stay-at-home order began on March 19, 2020. The
governor introduced a tiered reopening system, called the “Blueprint for a Safer Economy” on August 28,
2020, imposing criteria on tightening and loosening COVID-19 allowable activities. On June 15, 2021, the
governor ordered the full reopening of California’s economy because vaccine supply was sufficient and
hospitalization rates were stable and low. However, during the entire fiscal year the world, nation, state
and city grappled with the ongoing economic effects of COVID-19.
The economic impacts of COVID-19 to the federal, state, and regional economies have been unparalleled,
impacting all businesses. Those impacts have been disproportionate depending on industry, size of
business, and even ownership structure. In Carlsbad, the most profound effects have been concentrated in
the restaurant, travel, entertainment and leisure & hospitality sectors. Prior to the pandemic, Carlsbad
boasted a low estimated unemployment rate of 2.9%. At the height of the pandemic, unemployment spiked
to 13.8%. Unemployment improved to a low estimate of 5.7% in November 2020, before rising to 6.6% in
December 2020 amid the surge of cases and corresponding health orders. Since then, estimated
unemployment has dropped again and was at 6.6% in June 2021.
To spawn economic recovery, several federal, state and local programs were approved, providing
substantial resources for businesses. This includes the American Rescue Plan, the Paycheck Protection
Program, for which Carlsbad companies were recipients at a higher rate than any other North County city
in the first round; the State of California Small Business Relief Program, and the City of Carlsbad’s Economic
Recovery and Revitalization Initiative. Due to many of these programs, traditional debt-financing has been
less appealing for businesses. National interest rates held lower than pre-pandemic levels, with one-year
rates at 0.07%, ten-year rates at 1.45%, and 30-year rates at 2.06% in June 2021.
Maintaining good fiscal health remains a top priority of the city. Meeting this objective preserves the city’s
ability to continue providing important programs and services to the community. Past economic challenges
and prudent financial planning have provided opportunities for developing solutions to address lost
revenues while preserving vital services. Revenues, along with the local economy, have begun to recover
as COVID-19 restrictions were lifted, but the recovery will be partially offset by the loss of federal and state
aid that was provided during the pandemic. Some sectors like leisure & hospitality have bounced back very
strong during the 2021 summer, but others, like business travel, are projected to recover slowly, which
could have a lasting impact on the city’s third largest revenue source, transient occupancy tax. Expenditures
and revenues will be closely monitored, disciplined spending and long-term financial planning remain
critical to ensuring the future sustainability of important city programs and services.
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Long -Term Financial Planning
Strategic planning begins with determining the city's fiscal capacity based upon long-term financial
forecasts of recurring available revenues and future financial obligations. Prior to the adoption of the annual
budget, the finance department prepares a Ten-Year Financial Forecast (“Forecast”) that evaluates known
internal and external issues impacting the city's financial condition. The Forecast is intended to help the city
achieve the following:
1. The city can attain and maintain financial sustainability
2. The city has sufficient long-term information to guide financial decisions
3. The city has sufficient resources to provide programs and services for the stakeholders
4. Identify potential risks to on-going operations in the long-term financial planning process and
communicate these risks on an annual basis
5. Establish mechanisms to identify early warning indicators
6. Identify changes in expenditure or revenue structures needed to deliver services or to meet the
goals adopted by the City Council
It is important to stress that the Forecast is not a budget. It does not make expenditure decisions, but rather
highlights the need to prioritize the allocation of the city’s limited resources, to ensure the continuation of
core city services. The purpose of the plan is to provide the City Council, key stakeholders, and the public
an overview of the city’s fiscal health based on various financial and service level assumptions over the next
ten years; and allow for the discussion of necessary steps to be initiated during the development and
implementation of future budgets. The Forecast is intended to look beyond the annual budget cycle and
serve as a planning tool to bring a long-term perspective to the budget process. The Forecast also takes into
consideration Council Policies that need to be met on an annual basis including General Fund reserve
guidelines, pension funding guidelines, etc. Should ongoing projected expenditures exceed ongoing
projected revenues in any given year, the City Manager will need to identify steps to mitigate the shortfalls
prior to presenting a balanced budget to the City Council for consideration during the annual budget
development process.
It should be noted that the Forecast is a snapshot in time and will change as additional information is made
available and incorporated into the fiscal projections. COVID-19 and the economic uncertainty associated
with the pandemic period has increased the volatility of projecting future revenues.
The city prepares a long-term financial model for both capital and operating needs. It is imperative that the
city plan for the impacts of development, constructing and operating new public facilities, and planning
resources needed to build them. The city prepares a ten-year operating forecast for the General Fund, a
fifteen-year Capital Improvement Program, and a five-year Strategic Digital Transformation Investment
Program. As part of the Capital Improvement Program and new Strategic Digital Transformation Investment
Program, the city annually calculates the amounts needed to pay for the various projects and calculates the
anticipated operating budget impacts. In this way, the city can anticipate the effects of development from
both a capital and an operating perspective.
One important initiative the city has undertaken to ensure its financial health is the development of an
Infrastructure Replacement Fund. With this fund, the city sets aside a portion of General Fund revenues on
an annual basis for major maintenance and replacement of its infrastructure. Much of the city’s
infrastructure is relatively new; thus, the city is just now experiencing the impact of maintenance
requirements. By setting aside funds annually, the residents of Carlsbad can be assured that the proper
maintenance and replacement, as needed, will be performed on streets, parks, and many facilities for which
the city is responsible.
Employee retirement costs continue to require ongoing prudent fiscal management. City Council issued a
pension funding policy to codify its commitment to ensure that resources will be available to fulfill the city’s
contractual retirement promises to its employees, and to minimize the chance that the funding of these
benefits will interfere with providing essential services to the community. The policy outlines a funding
discipline to ensure that adequate resources will be accumulated in a systematic and disciplined manner to
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fund the long-term cost of benefits to the plan participants and annuitants. Overall funding levels of the
city’s plans are reviewed annually, and the City Council recently approved two additional discretionary
contributions of $10 million and $6.4 million to boost the city’s funding level to 80%, the city’s minimum
targeted level. While this enhances the city’s funding position, risks remain in the system. Required
employer contributions will continue to increase over the next few years and actual contribution increases
could exceed expectations if future investment return rates or other factors are unfavorable.
Revenue and expenditure growth projections
The city’s Forecast considers the annual growth of all currently known elements of city revenues and
expenditures. Projecting revenues is particularly difficult when considering the short-term impacts of
COVID-19 on the economy, leaving the timing of an economic rebound and future growth volatility
uncertain. When forecasting expenditures, some of the major factors considered are rising healthcare and
workers’ compensation costs, underperforming pension programs, and general inflation in both personnel
and operating expenditures. Currently, the city projects expenditure growth will outpace revenue growth
in the near future. In order to support the increase in ongoing costs, the city will need to consider alternative
options, such as ways to increase economic activity that will drive sustainable increases in the city’s current
revenue base, an expansion of the city’s revenue base or a reduction of the city’s current service offerings
and associated costs.
American Rescue Plan Act
The federal American Rescue Plan Act of 2021 was passed on March 11, 2021 and allocated $12.6 million
in COVID-19 recovery funds to the city, half in fiscal year 2020-21 and half in fiscal year 2021-22. The
American Rescue Plan Act provides an infusion of resources to help turn the tide on the pandemic, to
address its economic fallout and to lay the foundation for a strong recovery. In accordance with the
American Rescue Plan Act, funds are allowed to be used through Dec. 31, 2024 and may be used to:
• Support urgent COVID-19 response efforts,
• Replace lost public sector lost revenue,
• Support immediate economic stabilization, and
• Address systemic public health and economic challenges.
The funds are restricted from being used to offset tax cuts or for pension liabilities. The city plans to use the
funds as a replacement of revenue to partially offset the negative economic impacts from the pandemic.
To substantiate the use of these funds for revenue replacement, the American Rescue Plan Act requires the
city to demonstrate the extent of revenue reduction. Additional guidelines are still expected and pending
from the United States Department of the Treasury. Following the current guidance, the city’s revenue loss
from the COVID-19 pandemic is estimated to have resulted in a total projected revenue loss of more than
the $12.6 million available.
FINANCIAL MANAGEMENT POLICIES
Revenue Policies
The development and maintenance of balanced and reliable revenue streams is the primary revenue
objective of the city. Efforts are directed to optimize existing revenue sources while periodically reviewing
potential new revenue sources. The need to promote a healthy business climate is recognized as one
method to maximize existing revenue sources. Revenue estimates are prepared on an annual basis during
the preparation of the budget, and major revenue categories are continuously projected on a ten-year
basis. Revenues are estimated conservatively using accepted standards and estimates provided by the state
and other governmental agencies. Alternative revenue sources are periodically evaluated to determine
their applicability to meet identified city needs. Sources of revenue are evaluated and modified as necessary
and allowable to assure a diversified and growing revenue base that improves the city’s ability to handle
fluctuations in individual sources.
Revenues from “one-time” or limited duration revenue sources are not used for ongoing operating
expenses. Fees and charges for services are evaluated and, if necessary, adjusted annually to ensure that
they generate sufficient revenues to meet service delivery costs. The city establishes user charges at a level
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generally related to the full cost (operating, direct, indirect, and capital costs) of providing the service,
unless City Council determines that a subsidy from the General Fund is in the public interest. The city also
considers market rates and charges levied by other municipalities of similar size for like services when
establishing rates, fees, and charges. Enterprise and Internal Service Funds are to be self-supporting.
Expenditure and Budget Policies
Major expenditure categories are projected on a ten-year basis. The city operates on a current funding
basis. Expenditures are budgeted and controlled so as not to exceed current revenues plus the planned use
of any accumulated fund balances. Ongoing annual operating expenditures shall not exceed annual
operating revenues, unless directed by the City Council.
The City Manager shall prepare and submit to the City Council annually a proposed operating, strategic
digital transformation investment program and capital investment program budget each year, and the
budgets are adopted by June 30 of each year. Financial status reports are prepared monthly and posted on
the city’s website. Because the budget is based on estimates, from time to time, it is necessary to make
adjustments to finetune the line-items within it. Various levels of administrative control are utilized to
maintain the budget’s integrity. Program managers are accountable for the line-item level of control of their
individual program budgets. Department heads are accountable for the fund level of control for funds
within their departments. Finance oversees the general level of accountability related to budgetary integrity
through systematic checks and balances and various internal controls.
The city’s General Fund Surplus Policy-City Council Policy No. 87 outlines the use of surplus funds resulting
from unrestricted General Fund actual revenues exceeding total actual expenditures, encumbrances, and
commitments for a given fiscal year. It is the intent of the city to use all surplus funds generated to meet
reserve policies, and the reduction or avoidance of long-term liabilities. The city will not use year-end
surplus funds to fund ongoing operations unless otherwise approved by the City Council.
The city will use surplus funds to replenish any General Fund reserve deficiencies, up to the minimum level
as set forth in the General Fund Reserve Policy-City Council Policy No. 74 and then any pension liability
deficiencies, as defined in City Council Policy No. 86, Pension Funding Policy.
The City Manager is then authorized to approve the carryforward of any unencumbered and unspent and
unencumbered budget for a particular item less than $100,000 into the following fiscal year. These items
are limited to one-time expenditures and cannot be for ongoing services, programs or personnel. Any
remaining surplus funds in excess of reserve and pension liability deficiencies and items equal to or greater
than $100,000 will be brought forward for City Council approval.
The city adheres to long-range financial planning best practices by forecasting revenues and expenditures
over a long-term period, using assumptions about economic conditions, future spending scenarios, and
other salient variables. Financial planning allows the city to execute overall strategies to support the process
of aligning financial capacity with long-term service objectives. Financial forecasts are updated at least once
a year, or more often, if unexpected changes in economic conditions or other unforeseen circumstances
exist. Any significant changes are reported to the City Manager and the City Council. Otherwise, these
financial forecasts will be used as a tool during the development of the annual budget process and to set
utility rates as needed.
In March 2021, the City Council adopted a Long Term General Fund Capital Funding Policy-City Council Policy
No. 91 which is designed to ensure the needs of the city are met; provide a funding source for long-term,
large value capital purchases; and demonstrate continued prudent fiscal management. Additionally, the
policy set guidelines for establishing a plan to replenish capital fund balances to include both how such
replenishment is to be funded and the period over which the replenishment is to occur. The city commits
to targeting a transfer to the city’s long-term capital funds of 6% of budgeted General Fund revenues that
will be proposed during the annual budget process or on an as needed basis.
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Reserve Policies
The city formally mandates the levels at which reserves shall be maintained for the General Fund and
informally sets minimum target levels for the Enterprise and Internal Service Funds.
The General Fund Reserve Policy-City Council Policy No. 74 was most recently updated and approved by the
City Council in June 2019. The purpose of the policy is to establish a target minimum level of designated
reserves in the General Fund to:
• Reduce the risk of financial impacts resulting from a natural disaster or other catastrophic events;
• Respond to the challenges of a changing economic environment, including prolonged downturns
in the local, state or national economy; and
• Demonstrate continued prudent fiscal management and creditworthiness.
The city commits to maintaining General Fund reserves (the term reserve refers to any unassigned fund
balance) at a target of 40% of General Fund annual operating expenditures. The total reserve level will be
calculated using the prior years adopted General Fund budgeted expenditures.
At the discretion of the City Council, reserve levels in excess of the 40% target requirement, may be used
for one-time opportunity cost purposes. Reserve funds will not be spent for any function other than the
specific direction in the annual budget or by a separate City Council action.
As a general budget principle concerning the use of reserves, the City Council decides whether or not to
appropriate funds from reserves. Reserve funds will not be spent for any function other than the specific
purpose of the reserve account from which they are drawn without specific direction in the annual budget
or by a separate City Council action.
The Wastewater and Water Operating Fund Reserves target a reserve funding level of 40%. The reserve
amount is calculated by dividing unassigned fund balance by total budgeted operating expenses plus
replacement transfers plus budgeted debt service payments. The annual budget process and setting utility
user rates and charges will be used to achieve and maintain the target reserve level.
The city’s Workers’ Compensation Fund will maintain a minimum reserve equal to the estimated
outstanding claims as calculated by a third-party administrator. Additional reserve amounts may be set
aside as deemed appropriate based on a third-party actuarial study completed at two-year intervals. During
the annual budget process, the target confidence level will be compared with the projected fund balance,
and, if the projected fund balance is greater than or lesser than the target, a plan to adjust the fund balance
will be considered, using either or both increasing revenues through interdepartmental charges and one-
time cash contributions from those funds contributing to the shortfall.
The Risk Management Fund (General Liability) will maintain a minimum reserve equal to the estimated
outstanding claims as calculated by a third-party administrator. Additional reserve amounts may be set
aside as deemed appropriate based on a third-party actuarial study completed at two-year intervals. During
the annual budget process, the reserve level will be compared with the projected fund balance, and, if the
projected fund balance is greater than or lesser than the target, a plan to adjust the fund balance will be
considered, using either or both increasing revenues through interdepartmental charges and one-time cash
contributions from those funds contributing to the shortfall.
The Information Technology Asset Replacement Fund shall maintain a minimum reserve level defined as
the amount of accumulated depreciation of capitalized assets based on the original cost of each capitalized
asset, and up to a maximum reserve level defined as the accumulated depreciation based on the estimated
replacement cost of each capitalized asset.
The Vehicle Asset Replacement Fund shall maintain a minimum reserve level defined as the amount of
accumulated depreciation of capitalized Fleet assets based on the original cost of each capitalized asset,
and up to a maximum reserve level defined as the accumulated depreciation based on the estimated
replacement cost of each capitalized asset.
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Investment Policy
The city has established a formal Investment Policy. It is the policy of the City of Carlsbad to invest public
funds not required for immediate day-to-day operations in safe, liquid and medium-term investments that
shall yield an acceptable return while conforming to all California statutes. It is intended that the policy
cover the investment activities of all contingency reserves and inactive cash under the direct authority of
the city. Investments of the city and its component units will be made on a pooled basis; however,
investments of bond proceeds will be held separately if required.
Pension Funding Policy
The city’s Pension Funding Policy-City Council Policy No. 86 embodies funding and accounting principles to
ensure that resources will be available to fulfill the city’s contractual promises to its employees. The policy
objectives include using actuarially determined contributions, or ADC, provided by CalPERS, funding the full
amount of the ADC each year, maintaining no less than a combined minimum of 80% funded ratio, and
demonstrating accountability and transparency by communicating all information necessary for assessing
the city’s progress toward meeting its pension funding objectives.
In the event the city is unable to meet the minimum combined pension funded ratio of 80% with current
resources (i.e., without borrowing or using reserves), the Finance Director will identify a reasonable period
to return to a minimum 80% funded ratio status.
Strategic Digital Transformation Investment Program
The Strategic Digital Transformation Investment Program, or SDTIP, is a comprehensive approach to
planning for and funding digital transformation efforts throughout the city. It is informed by the City Council
approved Connected Carlsbad: An Inclusive City Innovation Roadmap, the Internal Digital Information
Network Action Plan, the Information Technology Strategy, and complimented by a five-year projected
roadmap of digital transformation investments. The SDTIP is the strategic plan for technology and digital
transformation combined with project descriptions, costs, funding sources and timelines. The purpose of
this program, new for fiscal year 2021-22, is to provide for an annual investment strategy, not a
commitment for spending, and outlines a five-year expenditure plan for future digital transformation and
technology projects and the corresponding revenues necessary to pay for them.
This investment program is organized into the five primary goal areas approved by the City Council:
• Pursue Communitywide Digital Transformation focuses on the foundational elements, including
connectivity, up-to-date hardware and software, and a robust security strategy while providing an
aspirational vision for the future.
• Build Capacity for Data-Driven Government focuses on the policies, procedures and staffing
necessary for the city to fully capture the value of emerging models of data analytics.
• Foster a Vibrant Civic Engagement Culture builds upon the first two goals with a human- centered
perspective that an engaged city that uses data and technology in a way that respects people and
their privacy will support a vibrant culture where residents, organizations and businesses are
invested in their community and its future.
• Enhance Accessibility and Transparency recognizes that open government and approaching
problem-solving from an accessibility perspective leads to better outcomes for all.
• Promote Safety and Sustainability Through Connectivity leads to understanding the
interconnected nature of our communities that can achieve environmental, mobility and
sustainability goals when approached in a cross-departmental and community informed manner.
Projects will receive an appropriation that authorizes spending in the amount specified for the adopted
fiscal year only. Estimated budget information is shown for a five-year period to provide the most
comprehensive information about known future projects. Spending authority in future years is not granted
until adoption of the annual proposed SDTIP budget associated with each year.
11
The Information Technology (IT) Department is organized into five divisions: Enterprise Applications,
Infrastructure and Operations, Geographic Information Systems, Public Safety Technology and
Administration. These five divisions work together to provide services in three core areas that are crucial
to digital transformation efforts:
Investing in Digital Tran s formation
As the city continues to grow and develop, the use of technology has also grown exponentially over the last
two decades. The SDTIP outlines the financial resources needed to ensure that the technology
infrastructure is in place to enable the city to provide services to the community. Prudent financial planning
will ensure that ongoing funding for investment in technology is available.
SDTIP Project Evaluation
Making decisions on technology implementations is a challenging and complex task. The challenging nature
of these decisions is exacerbated by the expanding reach of technology and the increasingly
interdisciplinary nature of emerging technologies. A major component of the SDTIP is the establishment of
a cross-departmental approach to technology leadership to evaluate, prioritize, budget for and adopt digital
transformation efforts. A new administrative order has been developed that provides a collaborative forum
for key staff to validate and prioritize technology implementations. This approach also provides a structured
venue to explore how particular configurations of a technology implementation may positively or negatively
affect others within the organization. The process to evaluate digital transformation initiatives is ongoing
and meetings may be held on a monthly,
bimonthly or quarterly basis depending on
the need.
A number of factors are considered when
putting together projects for the five-year
program. All digital transformation and
technology projects shall be consistent
categories on the right.
Proposed projects are evaluated and
prioritized by a set of criteria that include:
• Alignment with City Council goals
and IT strategic plans, architecture,
security and technology standards,
including legislative and regulatory
mandates, and other goals
Strategic Digital
Transformation
Investment
Program
Public health
and safety
City Mission,
Vision and
Organizational
Values
Community
values
City Council
goals
Governing
and policy
documents
Funding
availability
Environmental
review
Technology
standards and
strategic
plans
Applications
Enterprise applications
Geographic Information
Systems
Public Safety technology
Business systems
Infrastructure
Networking
Datacenter systems
Client systems
Security
Administration
Contracts and agreements
Accounts payable
Asset replacement
12
• Coordination of IT investments across the enterprise to avoid duplication, maximizing the return
on investment and increasing efficiency
• Effective articulation of the business case including valid operational benefits of the project
• Accuracy and reasonableness of cost and benefit estimates
• Consideration of potential project risks and identification of appropriate means to manage those
risks
• Adherence to standard project management practices
• Capacity of staffing resources to implement the project
As the SDTIP is implemented throughout the year, staff will continually re-evaluate projects’ scopes, costs
and schedules to responsibly and cost-effectively manage city resources.
SDTIP Fiscal Year 2021 -22 Appropriations
In fiscal year 2021-22, there are approximately 33 continuing and new projects planned over the next five
years at an estimated total cost of $26.9 million. Included in the $26.9 million is approximately $15.4 million
in estimated new costs over the course of the same timeframe to provide additional funding for the
continuation of existing projects as well as funding for new projects. Within the $15.4 million is
approximately $4.9 million of estimated new appropriations for fiscal year 2021-22 for these same projects.
Pursue Communitywide Digital Transformation
$13.1 million
This goal includes updating connectivity, providing up-to-date hardware and software, and a robust security
strategy.
Build Capacity for Data-driven Decision Making
$0.8 million
This goal’s projects include the policies, procedures and staffing necessary for the city to fully capture the
value of emerging models of data analytics. It also includes building a comprehensive approach to citywide
Build Capacity for
Data-driven
Decision Making
3%
Enhance
Accessibility and
Transparency
6%
Foster a Vibrant
Civic Engagement
Culture
6%
Promote Security and
Sustainability through
Connectivity
36%
Pursue
Communitywide
Digital Transformation
49%
Estimated Total Projects Costs by Goal
FY 2021-22 to FY 2025-26
$26.94 million
13
data management to enable data-rich key performance metrics and effective operation of city
departments. A data policy and resources will be created to align departments with standards of data
cataloging for compliance ease of data sharing
Foster a Vibrant Civic Engagement Culture
$1.6 million
The city’s civic engagement culture builds upon the first two goals with a human-centered perspective that
an engaged city that uses data and technology in a way that respects people and their privacy. Projects in
this category will support a vibrant culture where residents, organizations and businesses are invested in
their community and its future.
Enhance Accessibility and Transparency
$1.7 million
This goal recognizes that open government and approaching problem-solving from an accessibility
perspective leads to better outcomes for all. Projects in this category include Civic Engagement with Open
Data, Online Permitting/Electronic Reviews, Records Management System and a Virtual Permitting Counter.
Promote Security and Sustainability through Connectivity
$9.7 million
Projects in this goal include the annual replacement of hardware and technology infrastructure, a Facility
Security Master Plan, the replacement of the Police Computer Aided Dispatch System and a Unified
Communication System to replace the city’s aging phone system.
SDTIP Future Appropriations
The City of Carlsbad’s SDTIP for fiscal year 2021-22 to fiscal year 2025-26 outlines 33 projects at an
estimated total cost of $26.94 million. Of the $26.94 million, $15.41 million is for new or increased funding
for projects over the next five years. The information provided for future years reflects the most
comprehensive snapshot of known or anticipated future projects as well as associated estimated costs.
Build Capacity for Data-
driven Decision Making
5%
Enhance Accessibility
and Transparency
7%
Foster a Vibrant
Civic Engagement
Culture
3%
Promote Security and
Sustainability through
Connectivity
47%
Pursue Communitywide
Digital Transformation
38%
Estimated Future Projects Costs by Goal
FY 2021-22 to FY 2025-26
$15.41 million
14
Capital Improvement Program
The City of Carlsbad Capital Improvement Program, or CIP, reflects
the city’s ongoing commitment to maintaining the highest
standards of quality facilities for the community today and in the
future. It is a planning document, not a commitment for spending.
The 15-year program outlines the expenditure plan for future
capital projects and the corresponding revenues to pay for those
expenditures.
Projects that are shown in the CIP are generally defined as any
construction, rehabilitation or replacement of major infrastructure
such as streets, libraries, parks, fire stations and administrative
facilities, water, sewer and drainage facilities, and other facilities that are located on or in the ground. In
most cases, the total construction cost of each of these assets is recorded and tracked as part of the city’s
inventory of capital infrastructure assets and other city-owned property.
Once the City Council adopts the proposed annual CIP budget, projects receive an appropriation that
authorizes spending in the amount specified for the adopted fiscal year only. Estimated budget information
is shown for a 15-year period to provide the most comprehensive information about known future projects.
Spending authority in future years is not granted until adoption of the annual proposed CIP budget
associated with each year.
Carlsbad’s philosophy is to take a proactive, long-range planning approach to building high quality facilities
and infrastructure that support the needs and priorities of the community. The CIP is organized by the
following project classifications:
I nvesting in Quality of Life
As the city continues to grow and develop, there is a corresponding increase in the demand for
development-related services and new facilities. To ensure that the necessary infrastructure and facilities
are built on a schedule that meets or exceeds this demand, the citizens of Carlsbad adopted a Growth
Management Plan in 1986. The plan was established to manage development within the city by linking
residential, commercial, and industrial development directly to standards for availability of public services
and facilities.
Planning
Study
Plan
Assessment
Maintenance &
Operations
Technical master plans
Repair
Refurbishment/
Rehabilitation
Modifications
Improvements
Maintenance Program
Monitoring
Replacement
Upgrade
Capital Projects
Regulatory & Policy-
Driven:
Legal requirements,
compliance with Growth
Management Plan,
Climate Action Plan,
defined projects to
implement policies,
plans and goals adopted
by City Council
Community
Enhancements: new
facilities, expansions,
parks & trails, traffic
signals, coastal
improvements
Project
Accounting
CFD #1 Admin
Open Space
Acquisition
Loans
Repayment/Transfer
.. ., .. ., .. .,
J
]
11 .... .. ,. ,. ,.
15
The Growth Management Plan states that unless a standard level of facilities is available to meet new
demands resulting from the city’s growth, development cannot proceed. Recently, certain actions, such as
imposing a moratorium, have been determined to be impermissible by the California Housing and
Community Development Department, per Senate Bill 330, Housing Crisis Act of 2019, which became
effective on Jan. 1, 2020.
The detailed level of planning required by Growth Management has allowed the city’s CIP to anticipate the
funding needed for capital improvements in the next 15 years. Facilities such as community centers, parks
and fire stations have been constructed and opened to the public under this program.
The CIP has been designed to specifically address areas where new or expanded facilities will be needed to
maintain compliance with the adopted performance standards. With the adoption of the fiscal year 2021-
22 CIP, compliance with the Growth Management Plan is continued.
Prudent financial planning has ensured ongoing funding to modernize, repair, and replace existing
infrastructure projects through numerous asset management programs, which ensure adequate inspection,
maintenance, and replacement of buildings and parks, water, sewer and drainage systems, bridges, and
roadways systems.
CIP Project Evaluation
Development of the CIP is a team effort involving all operational departments, the City Manager’s Office,
the City Council, and the community. Community feedback on infrastructure needs is considered and
incorporated as appropriate. The CIP is fully vetted at multiple levels of the city organization by appropriate
staff using an inclusive and transparent process, and reviewed on a quarterly basis.
As the CIP is implemented throughout
the year, staff continually re-evaluate
projects’ scopes, costs and schedules to
responsibly and cost-effectively
manage infrastructure assets at the
required levels of service throughout
their lifecycle. Recommendations for
project funding consider current
project status, project scheduling and
sequencing requirements, project
constraints, and current staff capacity.
Project charters are updated to include
project description, location, summary
of need, justification including any
legislative or policy citations, cost
estimates, and project scores.
In anticipation of revenue decreases in some capital funding sources, staff recommended funding
adjustments in fiscal year 2021-22 that focused on matching existing resources with realistic and achievable
project schedules. New project requests were minimized and the city remains committed to continue work
on projects that are already underway.
Capital
Improvement
Program
Public health
and safety
City mission,
vision and
organizational
values
Community
values
Environmental
review
Governing and
policy
documents
Funding
availability
City
Council
goals
16
CIP F iscal Year 20 2 1 -2 2 A ppropriations
In the fiscal year 2021-22 CIP, there are approximately 254 continuing and new projects planned over the
next 15 years. The fiscal year 2021-22 CIP outlines $56.2 million in new appropriations to provide additional
funding for the continuation of existing projects as well as funding for 21 new projects. Projected revenues
during the same fiscal year are estimated at $65.8 million.
Civic Buildings and Facility Maintenance
$8.2 million
This category includes a variety of facilities such as fire stations, libraries and the new City Hall. Costs include
repair, maintenance and replacement of civic buildings.
Parks
$2.6 million
Projects include improvements and enhancements to existing parks, such as playground resurfacing, picnic
areas and other needs identified by the community and in recently updated parks master plans.
Drainage
$7.2 million
The city’s drainage infrastructure plays an important role in handling storm water runoff flows, as well as
maintaining the water quality of the city’s creeks, lagoons and ocean. As the city continues to age, it is
increasingly necessary to balance repairing and replacing the existing lines with enhancing the current
infrastructure to accommodate future needs.
L -
FY 2021-22 Appropriations by Category
$56.2 mill ion
Project Accounting _
25%
Planning
1%
Maintenance &
Operations
40%
Capital Projects
34%
17
Wastewater
$11.5 million
The city’s sewer, or wastewater, projects include numerous pipeline construction and rehabilitation
projects, as well as improvements to the Encina Wastewater Treatment facility. Most new lines are built
and paid for with impact fees collected with new development.
Water and Recycled Water
$3.1 million
Future water and recycled water projects include construction of new pipe lines, replacement of existing
waterlines and reservoir improvements. The Carlsbad Municipal Water District has been producing and
delivering recycled water for over 30 years.
Transportation
$23.6 million
People of all ages and abilities want to go places safely and conveniently in Carlsbad, whether they drive,
walk, bike, or ride a bus or train. Carlsbad continues to invest in modernizing roads, leveraging technology
to improve traffic systems, and making timely repairs and rehabilitation of the roadways, bridges, sidewalks
and other assets in public rights-of-way throughout the city.
CIP F uture Projects
The CIP for fiscal year 2021-22 to fiscal year 2035-36 outlines approximately 254 projects at a cost of $669
million in new or additional funding. Long-range planning and responsible asset management play key roles
in the development of future capital projects. Using data from various infrastructure master plans, ongoing
asset condition assessments, technical modelling, field inspections as well as community feedback, the
information provided for future years reflects the most comprehensive snapshot of known or anticipated
future projects as well as associated estimated costs.
III y
•
,H, , , , ,
Transportation
23%
Water/Recycled
Water
22%
Future Project Costs By Type
FY 2021-22 to FY 2035-36
$669 million
Civic Facilities
12%
Parks
9%
Drainage
6%
Wastewater
28%
18
Unfunded Projects
There are six projects identified in the Capital Improvement Program for which there is no identifiable
funding source and, in some cases, where only partial funding has been identified. The city will investigate
obtaining possible external funding, such as federal and state grants, loans, or other financing sources. Once
funding is identified for these projects, the project costs will have to be reviewed and updated to reflect
actual cost estimates. The unfunded projects do not receive annual inflationary increases. Two projects are
partially funded by the Traffic Impact Fee Program. The program was planned to generate enough revenue
to pay for 20% of the total costs of these projects, leaving the remaining 80% unfunded.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate
of Achievement for Excellence in Financial Reporting to the city for its Annual Comprehensive Financial
Report for the fiscal year ended June 30, 2020. This was the 23rd consecutive year that the city has achieved
this prestigious award. To be awarded a Certificate of Achievement, a government unit must publish an
easily readable and efficiently organized Annual Comprehensive 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 annually produce an
Annual Comprehensive Financial Report which will continue to meet the Certificate of Achievement
Program’s requirements. This report will be also submitted to GFOA to determine eligibility for another
certificate.
This report has been a comprehensive effort by many people from many different areas of responsibility. It
could not have been accomplished without their help and the dedicated efforts of all of the finance staff,
especially Roxanne Muhlmeister, Assistant Finance Director and Kim Riboni, Senior Accountant. I also
appreciate the staff of Davis Farr LLP for the professional way in which the audit of this financial report was
conducted. It has been a pleasure to work with them. Additionally, I would like to thank the City Council,
the City Manager and the city’s Executive Management Team for their leadership and unfailing support in
maintaining the highest standards of professionalism in the management of the city’s finances.
Respectfully submitted,
Ryan Green
Finance Director
Business Park Recreational Facility (partial funded)6,600,000 $
Cannon Lake Park (6.7 acres)2,243,000
Carlsbad Blvd. Mountain View to Northerly City Limits (partially funded) 6,905,600
Carlsbad Blvd. and Palomar Airport Road (partially funded)14,109,600
Carlsbad Blvd. Realignment (segments 3-5)26,100,000
College Boulevard Extension30,000,000
Total Unfunded Projects85,958,200 $
f r
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Carlsbad
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
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21
As of 6/30/2021
Elected Officials
Matt Hall, Mayor
Keith Blackburn, Mayor Pro Tem – District 2
Vacant, Council Member – District 1
Priya Bhat-Patel, Council Member – District 3
Teresa Acosta, Council Member – District 4
Barbara Engleson, City Clerk
Craig Lindholm, City Treasurer
Leadership Team
Scott Chadwick, City Manager
Celia Brewer, City Attorney
Geoff Patnoe, Assistant City Manager
Gary Barberio, Deputy City Manager, Community Services
Laura Rocha, Deputy City Manager, Administrative Services
Paz Gomez, Deputy City Manager, Public Works
Michael Calderwood, Fire Chief
Mickey Williams, Police Chief
Babaq Taj, Engineering Manager
David Graham, Chief Innovation Officer
Faviola Medina, City Clerk Services Manager
James Wood, Environmental Management Director
Jason Haber, Intergovernmental Affairs Director
Jeff Murphy, Community Development Director
John Maashoff, Public Works Manager
Judy von Kalinowski, Human Resources Director
Kristina Ray, Communication & Engagement Director
Kyle Lancaster, Parks & Recreation Director
Mandy Mills, Housing & Homeless Services Director
Maria Callander, Information Technology Director
Morgen Fry, Executive Assistant to the City Manager
Ryan Green, Finance Director
Sheila Cobian, Director of Legislative and Constituent Services
Suzanne Smithson, Library & Cultural Arts Director
Tom Frank, Transportation Director
Vicki Quiram, Utilities Director
Boards and Commissions Chairs
Eric Larson, Agricultural Conversion Mitigation Fee Ad Hoc Citizens’ Advisory Committee
Emma Jadhav, Arts Commission
Fred Briggs, Beach Preservation Commission
Timothy Stripe, Carlsbad Golf Lodging Business Improvement District
Timothy Stripe, Carlsbad Tourism Business Improvement District Board
Rebecca Tam, Community Development Block Grant Citizen Advisory Committee
Chad Majer, Historic Preservation Commission
John Nguyen-Cleary, Housing Commission
Michael Fabiano, Independent Redistricting Commission
Gina Payne McBride, Library Board of Trustees
Michael Luna, Parks & Recreation Commission
Roy Meenes, Planning Commission
John Rodenhausen, Senior Commission
Monica Gocan, Traffic & Mobility Commission
22
Polu:e Department
Mickey Williams
June 30, 2021
Commun1c;d:1cn & Engagement
Knst1na Ray
lntergovemmental Affairs
Ja son Haber
AS'Slst:ant City Manager
Geoff Patnoe
Human Resources
JudyVon Kalrsowst1
Information Technology
Mana Calander
lnnovatron, & Econonwc
Development
DaVld Graham
City Attorney
Cel ,a Brewer
(city of
Carlsbad
Fire Department
Whchael Calderwood I I
Financial Section
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Independent Auditor’s Report
City Council
City of Carlsbad
Carlsbad, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of
the City of Carlsbad, California, as of and for the year ended June 30, 2021, 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.
23
Davis Farr
CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Karman Avenue I Suite 1100 I Irvine, CA 92612
Main: 949.474.2020 I Fax: 949.263.5520
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, California, as of June 30, 2021, and the respective changes in financial position and,
where applicable, cash flows thereof and the statement of revenues, expenditures and
changes in fund balance –budget and actual of the general fund for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As described further in note 21 to the financial statements, during the year ended June 30,
2021, the City implemented Governmental Accounting Standards Board (GASB) Statement
No.84. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis, the Schedule of Changes in Net Pension Liability and
Related Ratios During Measurement Period, Schedule of Pension Plan Contributions, Schedule
of Changes in Net OPEB Liability and Related Ratios During Measurement Period and Schedule
of OPEB Plan Contributions be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic,
or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide
any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Carlsbad’s basic financial statements. The combining and
individual nonmajor fund financial statements, 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 the budget to actual
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
24
City Council
City of Carlsbad, California
Page Three
United States of America. In our opinion, the combining and individual nonmajor fund financial
statements and budget to actual 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 them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
November 30, 2021 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 solely 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 30, 2021
25
26
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, 2021. 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 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
The financial statements 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 nonmajor 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 assessment and
business improvement districts – 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 explain and support
the information in the financial statements. In addition to these required elements is the combining fund statements section that provides financial information about the nonmajor 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,
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 provides
a detailed short-term view that helps the reader determine the amount of financial resources that can be spent in
the near future to finance the city’s programs. The statements are presented on a modified accrual basis of
accounting. A reconciliation between the long-term and short-term focus of the Government-wide Financial
Statements is provided immediately following each statement. There are currently three governmental fund types being used by the city: the General Fund, special revenue funds, and capital project funds.
• Proprietary funds – Services for which the city charges customers a fee are generally reported in proprietary funds.
Proprietary funds, like Government-wide Financial Statements, provide both long- and short-term financial
information, and are presented on an accrual basis of accounting.
There are two types of propriety funds, enterprise funds and internal service funds:
o Enterprise funds are used to report activities that provide business-type services, generally to external customers
– such as water, wastewater, solid waste, and golf services. In both the Government-wide Financial Statements
and the Fund Financial Statements, these funds are shown under business-type activities.
o Internal service funds are used to report activities that provide services and supplies for the city’s other programs
and activities – such as fleet, workers’ compensation, risk/liability, and information technology.
• 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.
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Required Components of the
Annual Financial Report
Management's
Discussion and
Analysis
Government-
wide Financial
Statements
Summary ..
Basic Financial
Statements
Fund Financial
Statements
..
Required
Supplementary
Information
Detail
28
Financial Analysis of the City as a Whole
Net Position
The city’s combined net position as of June 30, 2021, as shown below, was $1.86 billion. The city’s net position increased
by $28.5 million as compared to the prior fiscal year. This increase was heavily impacted by revenues exceeding expenses
for the year which resulted in a $14.7 million increase in citywide cash balances. Other factors leading to the higher net position included an increase in receivable balances, capital assets, a reduction in outstanding debt, the impacts of the
city recording the annual pension activities (an increase in deferred outflows and smaller increases in the net pension
liability and deferred inflows), and decreases in other liabilities (lower accrued liabilities and estimated claims payable).
These increases were partially offset by an increase in deposits payable and various other minor changes. The increase
in capital assets is discussed in more detail in the capital asset section of this MD&A.
As noted earlier, over time, net position may serve as a useful indicator of the city’s financial position. For the city, assets
currently exceed liabilities by $1.86 billion at the close of the fiscal year.
A large portion of the city’s net position, 62%, reflects its net investment in capital assets (i.e. land, buildings, machinery,
equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding. The city uses
these capital assets to provide services to residents; consequently, these assets are not available for future spending. Although the city’s investment in its capital assets is reported net of related debt, 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. The net investment in capital assets for the city increased slightly during fiscal year 2020-21 due primarily to
additional developer donated assets (streets, sidewalks, streetlights, water and wastewater lines) netted with a decrease
in outstanding debt (primarily Recycled Water).
Of the city’s total net position, 17% represents resources that are subject to external restrictions on usage. The remaining
balance of unrestricted net position ($399.6 million) may be used to meet the city’s ongoing obligations to residents and
creditors.
Total
Percentage
Change
2020 2021 2020 2021 2020 2021 2020-21
Current and other assets $702.3 $675.5 $167.5 $218.5 $869.8 $894.0 2.8%
Net OPEB asset 0.0 0.0 0.8 0.0 0.8 0.0 -100.0%
Capital assets 791.3 789.3 366.5 375.2 1,157.8 1,164.5 0.6%
Total assets 1,493.6 1,464.8 534.8 593.7 2,028.4 2,058.5 1.5%
Deferred outflows 33.5 46.1 2.2 3.5 35.7 49.6 38.9%
Other liabilities 33.8 44.6 25.3 18.1 59.1 62.7 6.1%
Net OPEB liability 3.7 2.8 0.2 0.4 3.9 3.2 -17.9%
Net pension liability 139.2 154.4 11.0 12.0 150.2 166.4 10.8%
Long-term debt outstanding 0.0 0.0 13.6 13.7 13.6 13.7 0.7%
Total liabilities 176.7 201.8 50.1 44.2 226.8 246.0 8.5%
Deferred inflows 4.4 1.0 0.4 0.1 4.8 1.1 -77.1%
Net position
Net investment in
capital assets 791.1 789.3 351.2 361.5 1,142.3 1,150.8 0.7%
Restricted 268.5 269.1 41.2 41.5 309.7 310.6 0.3%
Unrestricted 286.4 249.7 94.1 149.9 380.5 399.6 5.0%
Total net position, as restated $1,346.0 $1,308.1 $486.5 $552.9 $1,832.5 $1,861.0 1.6%
Total
CITY OF CARLSBAD'S NET POSITION
(in millions of dollars)
Governmental
Activities
Business-Type
Activities
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The remaining net position is unrestricted, meaning it can be used for future spending and largely coincided with the
increase in city cash. Notably, the unrestricted net position of governmental activities decreased and the business-type
activities balance increased from the previous fiscal year. This was largely due to a $47 million transfer from the General
Fund to the Golf Course Fund. The General Fund had previously advanced funds to the Golf Course Fund for the
construction of the course and partially subsidized the operations of the course in prior fiscal years. However, it was
determined that repayment of the advance balance is not projected in the near or foreseeable future.
Changes in Net Position
The condensed summary of activities below shows that net position increased by $28.5 million during the year. This
increase occurs when revenues earned and special items are greater than expenses incurred.
Percentage
Change
2020 2021 2020 2021 2020 2021 2020-21
Revenues
Program revenues
Charges for services $19.2 $20.0 $70.4 $75.2 $89.6 $95.2 6.2%
Operating grants and contributions 18.5 26.5 0.4 3.5 18.9 30.0 58.7%
Capital grants and contributions 16.8 9.6 6.3 7.6 23.1 17.2 -25.5%
General revenues
Property taxes 73.9 78.2 4.2 4.5 78.1 82.7 5.9%
Sales and use taxes 36.5 42.6 - - 36.5 42.6 16.7%
Other taxes 31.4 28.8 - - 31.4 28.8 -8.3%
Income from property and investments 20.2 5.1 5.0 0.6 25.2 5.7 -77.4%
Other 0.6 0.5 - - 0.6 0.5 -16.7%
Total revenues 217.1 211.3 86.3 91.4 303.4 302.7 -0.2%
Expenses
General government 24.3 20.0 - - 24.3 20.0 -17.7%
Public safety 75.2 80.3 - - 75.2 80.3 6.8%
Community services 60.8 57.7 - - 60.8 57.7 -5.1%
Public works 41.4 35.5 - - 41.4 35.5 -14.3%
Carlsbad Municipal Water District - - 51.2 56.3 51.2 56.3 10.0%
Golf course - - 10.3 10.3 10.3 10.3 0.0%
Wastewater - - 16.9 9.0 16.9 9.0 -46.7%
Solid waste - - 4.4 5.1 4.4 5.1 15.9%
Total expenses 201.7 193.5 82.8 80.7 284.5 274.2 -3.6%
Excess (deficiency) before transfers 15.4 17.8 3.5 10.7 18.9 28.5 50.8%
Special items - Golf Course debt - (8.4) - 8.4 - - 0.0%
Transfers (0.3) (47.3) 0.3 47.3 - - 0.0%
Increase (decrease) in net position 15.1 (37.9) 3.8 66.4 18.9 28.5 50.8%
Beginning position, as restated 1,330.9 1,346.0 482.7 486.5 1,813.6 1,832.5 1.0%
Ending net position $1,346.0 $1,308.1 $486.5 $552.9 $1,832.5 $1,861.0 1.6%
Activities Activities Total
Governmental Business-Type
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There were several reasons for the increase in net position:
• Intergovernmental revenues received from COVID-19 related programs such as the CARES Act, American Rescue
Plan Act, and Operation Collaboration
• Fiscal discipline implemented by the city due to the budget uncertainty resulting from COVID-19 restrictions
• “Savings” in the General Fund totaling $17.9 million is being carried forward into fiscal year 2021-22 by various
major service areas within the city to enhance and provide for future services and programs (indicating that
spending levels in fiscal year 2020-21 were less than budgeted expenditures)
• Revenues and transfers received in the city’s capital project funds for future projects
• Donations of infrastructure assets from developers
Approximately 71% of the revenues of the city’s governmental funds are generated through taxes collected (i.e. property
tax, sales tax, transient occupancy tax, etc.), and approximately 82% of the city’s business-type revenue is generated through charges for services. The chart below graphically depicts the city’s revenue sources.
The city’s revenues, particularly transient occupancy tax, sales tax and recreation related revenues, were projected to be
significantly impacted by COVID-19 related restrictions. Most of the city’s hotels, including the larger hotels, were closed
for a significant portion of the year, and many parks and recreation programs were cancelled and closed during the
majority of the fiscal year due to the COVID-19 emergency. One measure of the magnitude that the pandemic had on
the city’s transient occupancy tax revenues is the average occupancy rate. In fiscal year 2020-21, the city’s hotels had an
average occupancy rate of 58% compared to 70% in fiscal year 2018-19. As a result, transient occupancy tax revenues
finished at levels comparable with fiscal year 2012-13. Similarly, recreation fee revenues were 47% lower than pre-pandemic periods, also in line with fiscal year 2012-13 revenues. Conversely, sales tax revenues were boosted by the
federal stimulus packages and increased consumer savings, as well as the expiration of a deferment program that allowed
small businesses to delay their sales tax payments. These factors led to the city’s highest sales tax revenues during any
fiscal year.
The city’s largest revenue source, property taxes, increased due to assessed values increasing by 4.8% in total for all
components: residential, commercial and industrial properties. This was the sixth year in a row that the city had growth
in all three assessed value components. The city also experienced increases in aircraft taxes due to an increase in the
number of aircraft domiciled at Palomar Airport and an increase in payments for previous years’ taxes due to extensions
that were allowed during the COVID-19 pandemic that expired in the current year.
The city experienced an increase in business license revenue, despite a decrease in the number of businesses licensed in
the city at June 30, 2021, due largely to increased economic activity. Development remained relatively strong for the
year, although it expectedly slowed when compared to the prior fiscal year. The city saw infill residential development
Sources of Revenue for Fiscal Year 2020-21
$302.7 Million
Charges for Services
Property Tax
Sales Tax
Federal and State Aid
Contributions from Property Owners
Transient Occupancy Tax
Other Taxes and Revenues
32%
28%
14%
8%
7%
5%
6%
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(especially in the Village area of the city) as well as some of the last remaining master planned community development.
There was very little commercial and industrial development during the year, similar to the prior fiscal year.
Income from property and investments were heavily impacted by three factors: unrealized losses created by adjusting
the city’s investments to their fair market value at June 30, 2021, a decrease in the average yield on the treasurer’s
portfolio for the year (down 72 basis points from last fiscal year to 1.35%), and a 0.8% increase in the average cash
balance. These factors combined to create a decrease in income from property and investments when compared to the prior fiscal year.
The primary contributors to the city’s charges for services are water and wastewater customers. An increase in total
water revenues was driven primarily by higher demand and rate increases implemented in January 2020 and 2021.
Wastewater charges increased due to rate increases and development throughout the city. During the COVID-19
shutdown, a decrease in commercial customer water usage partially offset the wastewater revenue increase because
commercial and industrial wastewater rates in Carlsbad are based on water usage. Together, these factors led to an increase in charges for services for the year for both water and wastewater. Additionally, the city’s municipal golf course
experienced an increase in charges for services due to higher demand for allowable recreation activities during the
shutdown.
The total cost of all programs and services was $274.2 million in fiscal year 2020-21 which was moderately lower (3.6%)
than prior fiscal year costs of $284.5 million. The majority of the decrease in program costs came from salary and benefit
cost savings related to facility closures during the pandemic, and the city’s efforts to defer costs while city revenues were largely uncertain. Departments were asked to eliminate travel, postpone trainings, delay new programs, defer the hiring
of new staff members, and to be additionally prudent in their spending of city funds. Increases were seen in public safety
as the city focused efforts on emergency related projects such as Operation Collaboration, a north county collaboration
to vaccinate residents. The city’s water district also saw increases as the cost of water and amount of water purchased
increased.
• General Government (7%)
This segment of the city is divided into three major groups: Policy & Leadership, Administrative Services and non-
departmental charges. The Policy and Leadership group encompasses all elected officials, the City Manager and City
Attorney offices, the Communications & Engagement team, and the Legislative & Constituent Services team. The Administrative Services group includes Finance, Human Resources (including Workers’ Compensation and Risk
Management), Information Technology, and Innovation & Economic Development. Non-departmental also includes
any special projects directed by the City Council.
Functional Expenses for Fiscal Year 2020-21
$274.2 Million
General Government
Public Safety
Community Services
Public Works
Water
Golf Course
Wastewater
Solid Waste
7%
29%
21%
13%
21%
4%
3%
2%
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• Public Safety (29%)
Public Safety remains a top City Council priority. This major service area includes the Police Department, whose mission is to protect and serve the community with integrity, professionalism and valor. The Fire Department is the
other component of this major service area with a mission to enhance the quality of life by delivering exceptional
services in safeguarding lives, property, and the environment.
• Community Services (21%)
Community Services consists of Library & Cultural Arts, Parks & Recreation, Community Development and Housing
& Homeless Services. These city service areas ensure the city’s planning and building policies are carried out, foster
lifelong learning, support strong neighborhoods, administer affordable housing and homeless response programs,
attend to the community’s health and wellness and promote transparency in government. Library & Cultural Arts
provides educational, informational and cultural arts services for all community residents, which contribute to
quality of life by supporting lifelong learning, the pursuit of knowledge, and creating the availability of community
gathering places. Parks & Recreation offers comprehensive opportunities for meeting the recreational and social
needs and interests of the community by providing programs for all segments of the population. Community
Development’s primary roles include the day-to-day administration of the local, state, and federal land use
regulations, promoting economic and business development, protecting life and property, enhancing public health,
and preserving the environment. Community Development encompasses Land Use Planning, Building, Code
Enforcement, and Land Development Engineering.
• Public Works (13%)
Public Works is responsible for building and maintaining all city infrastructure assets. This service area includes Public
Works Administration, Facilities & Fleet, Environmental Management, Transportation, Construction Management &
Inspection and Utilities. Construction Management & Inspection manages construction of major projects, inspection
and oversight of private development grading, stormwater and improvements inspection and oversight of all activity
in the public right-of-way. Environmental Management oversees the climate action plan program, the habitat
management plan program, the sustainable materials management program, solid waste, and provides coordination
of the municipal component of the National Pollutant Discharge Elimination System Municipal Storm Water Permit.
Fleet & Facilities supports the maintenance of city vehicles and facilities. The Transportation Department cares for
road infrastructure and projects, keeps people and traffic moving, maintains streets and storm drains, maintains
street lighting, and provides incident response for city and private property.
• Water (21%)
The Carlsbad Municipal Water District (CMWD), a subsidiary of the city, provides potable and recycled water service
to approximately 28,900 customers within a 32.3 square mile service area. CMWD purchases 100% of its potable
water, which includes a local supply of desalinated seawater, as treated water from the Metropolitan Water District
and the San Diego County Water Authority. CMWD also provides recycled water for irrigation purposes which is
produced at the Carlsbad Water Recycling Facility, as well as purchased from the Vallecitos Water District.
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• Golf Course (4%)
The city opened a municipal golf course in the summer of 2007, further enhancing the tourist attractions the city
offers. The municipal golf course, The Crossings at Carlsbad, is an 18-hole golf course set in the rolling hills and
canyons of Carlsbad. With ocean views, a high-quality golf experience, a first-class restaurant and clubhouse, and
connections to hiking trails, The Crossings at Carlsbad is a destination for golfers and non-golfers alike.
• Wastewater (3%)
The city operates and maintains a sanitary wastewater collection system that provides wastewater services to approximately two thirds of the city’s population, covering approximately 74% 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.
• Solid Waste (2%)
The Solid Waste Division administers and monitors the solid waste contract and the Palomar Transfer Station
agreement and is responsible for ensuring the waste reduction and recycling components of the Source Reduction
and Recycling Element and Household Hazardous Waste Element comply with state mandated diversion and disposal requirements. Also included in this section is the Storm Water Protection Program, whose goal is to provide
leadership and stewardship of the city’s resources protecting the city’s beaches, creeks and lagoons.
The following sections provide information about the operations of the governmental and business-type activities.
Governmental Activities
The decrease in net position for governmental activities was $36.7 million. This decrease was primarily driven by the $47
million transfer from the governmental activities to the business-type activities. The transfer was required a result of the
collectability of the General Fund’s prior advances to the Golf Course Fund. Total revenues from governmental activities
of $211.3 million ($56.1 million in program revenues and $155.2 million in general revenues) offset by $193.5 million in
total costs of governmental activities partially offset the decrease resulting from the transfers.
The following table presents the total cost of each of the city’s major programs, as well as each program’s revenue (fees generated by the activities, contributions, and intergovernmental funding). The net cost (the difference between
adjoining bars in the graph) shows the financial burden that was placed on the city’s taxpayers by each of these programs
(costs covered by general revenues).
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Revenues are generated through several sources to cover the cost of the city’s programs. Total revenues of $211.3 million
include fees and charges paid by those who directly benefit from the programs ($20.0 million), grants and contributions from other governments and organizations which subsidize certain programs ($36.1 million), and taxes and other
revenues (such as income from property and investments) received by the city to pay for the “public benefit” portion.
Community Services revenues are derived from development activities throughout the city, housing assistance programs,
parks and recreation fees, and library fees. A large portion of Community Services revenues are comprised of housing
assistance programs (Section 8 Rental Assistance, affordable housing loan repayments, and developers paying into the
Affordable Housing Trust Fund) as well as charges for development related services. As expected, development activity reflected a moderate decrease from the prior fiscal year, offsetting only a portion of the program expenses.
The majority of Public Works revenues are used to acquire and build capital assets (versus covering operating expenses).
In addition, the donation of capital assets from developers is reflected in the program revenues for Public Works. Capital
assets are generally constructed or purchased once sufficient funds have accumulated to pay for the entire asset cost.
Several years ago, the city entered a new stage of its lifecycle, from a developing or growing stage, to a mature and
maintenance focused stage. As the city continues to mature and approach buildout, there will be fewer master planned
projects. In past years, these projects constructed new facilities, roads, parks, and other city-owned infrastructure. The
city is shifting its focus towards maintenance of existing facilities and will use funding sources such as the Infrastructure
Replacement Fund to maintain and replace these assets. There are still some master planned communities that were
recently completed or are near completion, such as Poinsettia 61. The developers of these communities have dedicated
or will dedicate infrastructure to the city, a requirement for development.
$9.4 $7.7
$20.4 $18.7 $20.0
$80.3
$57.7
$35.5
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
General Government Public Safety Community Services Public Works
Program Revenues $56.2 Program Expenses $193.5
Governmental Activities
Program Revenues and Expenses
Fiscal Year 2020-21(in millions)
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Business-type Activities
Program revenues for the city’s business-type activities totaled $86.3 million for the year, while program expenses
equaled $80.7 million.
Water program revenues are generated primarily from the sale of water, but also from developer donated assets and grants. Program expenses were slightly higher than revenues; however, the water program also collected $4.5 million in
general revenues to end the fiscal year with a positive change in net position. The revenues were impacted by an increase
in water demand and rates (1% beginning in January 2020 and 2021) offset by a decrease in capital grants. Water program
expenses were higher than the prior year due to increased water purchase cost and more water purchases needed to
meet the demand.
Wastewater program revenues finished significantly higher at $20.7 million than program expenses of $9.0 million due
to the recognition of $4.8 million in capital restricted fees, $1.2 million in large developer donated assets of sewer lines
at El Camino Real and Telaga Road, and operating revenues exceeding operating expenses.
The city’s golf course enterprise was in its 14th full year of operation and finished the fiscal year with a net loss of $2.2
million. The demand for golf, an outdoor activity largely excluded from COVID-19 related restrictions, experienced
historical highs across the nation, in the region and at the city’s municipal course. The course witnessed over 82,000
rounds played which more than offset lost revenues from food & beverage sales. Golf course revenues were sufficient
to fund normal golf course operating expenses (i.e. excluding depreciation expense).
Solid waste revenues are primarily generated from fees charged to waste removal services customers to support the
city’s integrated waste management plan which include recycling efforts and proper waste disposal programs. Expenses
were planned to surpass revenues as many waste management programs have increased in level of effort and cost, such
as solid waste, recycling, and organics management services, household hazardous waste collection and disposal, and
environmental outreach and education. Despite the current year loss, the fund has sufficient reserves.
$53.6
$20.7
$8.1
$3.9
$56.3
$9.0 $10.3
$5.1
$0
$10
$20
$30
$40
$50
$60
Water Wastewater Golf Course Solid Waste
Program Revenues $86.3 Program Expenses $80.7
Business-Type Activities
Program Revenues and Expenses
Fiscal Year 2020-21(in millions)
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Capital construction expenses are spread over the life of an asset as annual depreciation charges (program expenses)
and are not reflected as an expense in the year acquired.
A more detailed discussion of each of the enterprises can be found in the Proprietary Funds Section.
Financial Analysis of the City’s Funds
As noted earlier, the city uses fund accounting to ensure compliance with finance related legal requirements. In the
current Annual Comprehensive Financial Report, the city implemented GASB Statement No. 84, Fiduciary Activities, and
GASB Statement No. 98, The Annual Comprehensive Financial Report.
Governmental Funds
The focus of the city’s governmental funds is to provide information on near-term inflows, outflows, and balances of
spendable resources. This information is useful in assessing the city’s financing requirements. In particular, unassigned
fund balances may serve as a useful measure of a government’s net resources available for spending at the end of the
fiscal year.
There are five fund balance classifications: nonspendable, 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. At the end of the current fiscal year, the city’s governmental
funds reported combined ending fund balances of $594.9 million, down $26.4 million from the year before.
Approximately 1% ($3.4 million) constitutes nonspendable fund balances, mostly comprised of advances and loans to
other funds. Restricted fund balances can only be spent for a specific purpose stipulated by law and make up about 45%
($269.1 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 over 37% ($222.3 million) of the city’s fund balance. Almost 17% ($99.0 million) of the fund balance is unassigned, which is available for spending at the City Council’s
discretion. Of the unassigned fund balance, the City Council has $9.6 million set aside for economic uncertainty purposes.
However, accounting standards require that the $9.6 million set aside be shown as part of the city’s unassigned fund
balance.
Governmental Fund Balances for Fiscal Year 2020-21
$594.9 Million
Nonspendable
Restricted Purposes
Committed
Assigned
Unassigned
0.6%
45.2%
0.2%
37.4%
16.6%
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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
$159.8 million, a decrease of $31.1 million. As previously mentioned, the City Council authorized the transfer of $47.0
million in nonspendable fund balance to the golf course fund which is the primary cause of the decrease.
The unassigned fund balance portion of the General Fund was $99.3 million, a decrease of $10.7 million from last fiscal
year. During the fiscal year the city used a portion of the General Fund’s unassigned balance: $1.5 million of the economic
set aside was used to cover COVID-19 related costs; $10 million of the unassigned balance was used to paydown the
city’s unfunded pension liability; $3.5 million of the unassigned balance was transferred to the city’s long-term capital
project funds for future projects; and $4.2 million of the unassigned balance was used to fund the one-time costs
associated with the City Council’s goals. Partially offsetting these decreases includes revenues that exceeded total
expenditures, and changes in open purchase orders at fiscal year end, among other factors.
The city’s General Fund Reserve Policy, outlined in City Council Policy No. 74, commits the city to maintaining General
Fund reserves at a target of 40% of General Fund annual operating expenditures. The total reserve level is to be calculated using the prior fiscal year’s adopted General Fund budgeted expenditures and is outlined below:
GENERAL FUND RESERVE BALANCE
(in millions of dollars)
Actual Target
Unassigned General Fund balance $ 99.3 $ 65.4
Economic uncertainty set aside (9.6) -
Unassigned fund balance, excluding economic uncertainty 89.7 65.4
Fiscal year 2020-21 adopted General Fund budgeted expenditures $ 163.6 $ 163.6
General Fund reserve percentage 61% 40%
General Fund reserve percentage, excluding economic uncertainty 55% 40%
General Fund revenues increased by 4.7% compared to the prior year. The increase was largely driven by increases in all
major taxes: property, sales, and transient occupancy. In total, taxes collected were $8.1 million higher, the majority of
which was seen in the fourth quarter of the fiscal year. The city also saw a large increase in intergovernmental revenues, a result of $6.3 million received in American Rescue Plan Act funding as well as CARES Act funding from the federal
government. The city applied the entire American Rescue Plan Act funding received towards general governmental
services as the city’s revenue losses associated with the COVID-19 pandemic exceeded the city’s total allotment. These
increases were largely offset by a significant decline in income from property and investments. The city’s investment
portfolio saw large decreases as the interest rates in bond markets declined significantly.
Due to the uncertainties in revenue the city experienced as a result of the pandemic, costs were closely monitored, and
expenditures were deferred throughout much of the fiscal year. The city realized savings in general government and
community services as some city facilities were shut down due to COVID-19 restrictions, and innovation projects slowed
when compared to the prior year. Public safety expenditure increases were realized in emergency operations, field
operations and investigative services. A major factor in the increase was the additional $10 million CalPERS discretionary
payment made during the fiscal year, that will have lasting effects and lower the city’s future retirement costs
A summary of the General Fund’s revenues, expenditures and changes in fund balance is shown on the following page.
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The Community Facilities District No. 1 Fund continues to collect assessments for the future construction of city
infrastructure and facilities.
The General Capital Construction Fund used a portion of its existing fund balance towards improvements at City Hall, Fire
Station No. 2, the Calavera Park Gateway, and various other projects. The expenditures were partially offset by a transfer
from the General Fund for future projects.
The fund balance in the Infrastructure Replacement Fund increased as the city continued the annual transfer of funds
from the General Fund for the future replacement of existing infrastructure and facilities. Projects for the year included the Police and Fire Headquarters refurbishment and various other projects.
The Park Development Fund continued to collect assessments for the future construction and refurbishment of city
facilities.
During the year, the city continued to set aside money for the construction of various projects within these and other
governmental 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.
Total
Increase Percentage
(Decrease)Change
2020 2021
Revenues
Taxes $141.3 $149.4 $8.1 5.7%
Intergovernmental 3.4 10.1 6.7 197.1%
Licenses and permits 2.7 2.4 (0.3) -11.1%
Charges for services 7.5 7.5 0.0 0.0%
Fines and forfeitures 0.5 0.4 (0.1) -20.0%
Income from property and investments 12.0 5.6 (6.4) -53.3%
Miscellaneous 1.7 1.6 (0.1) -5.9%
Total revenues 169.1 177.0 7.9 4.7%
Expenditures
General government 25.2 22.0 (3.2) -12.7%
Interdepartmental charges (5.1) (5.1)0.0 0.0%
Public safety 70.5 78.3 7.8 11.1%
Community services 43.2 40.5 (2.7) -6.3%
Public works 18.6 18.5 (0.1) -0.5%
Total expenditures 152.4 154.2 1.8 1.2%
Excess (deficiency) before transfers 16.7 22.8
Transfers in 0.0 0.0
Transfers out (11.5) (57.0)
Increase (decrease) in fund balance 5.2 (34.2)
Beginning fund balance, as restated 185.6 194.0
Ending fund balance $190.8 $159.8
2020-21
Total
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GENERAL FUND
(in millions of dollars)
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Proprietary Funds
The purpose of the city’s proprietary fund sections is to provide short-term 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.
The Carlsbad Municipal Water District (CMWD) funds experienced an operating loss of approximately $4.5 million for the
year. Operating revenues were approximately $51.5 million and operating expenses were approximately $55.9
million. Water purchases was one of the larger factors in the operating loss and caused by cost increases of water
purchased from the Metropolitan Water District and the San Diego County Water Authority (suppliers of the CMWD’s
potable water). The loss was offset by an increase in volume of water sales, which was primarily attributable to lower
than expected rainfall in the current year and a 2% increase in CMWD’s water rates effective January 2021, and a $1.8M
settlement agreement received from the water authorities. Nonoperating income included property and investments of
$0.5 million and property taxes of $4.5 million. Income before transfers, capital contributions and special items for the year was $0.2 million.
The Wastewater Fund had an annual operating gain of $6.0 million for the fiscal year. Total revenues from operations
were up from the prior year and budget, due primarily to higher commercial water consumption, the rate determining
factor for commercial customers. Revenues were also increased from fees collected from sewer benefit areas that was
repurposed for use on capital projects. Lower operating expenses were primarily the result of decreased wastewater
plant costs and decreased depreciation expense on recently added capital assets. Nonoperating revenues did not result in any change to the $6.0 million operating income before transfers and capital contributions.
In the fourteenth year of operation, the Golf Course Fund had an operating loss of $2.2 million. Excluding depreciation
of the enterprise's assets ($3.6 million), the Golf Course Fund’s income was $1.4 million. Revenues exceeded
expectations in the current year due to phased reopening of businesses closed from COVID-19 restrictions driving
increased participation in outdoor activities. This increase in revenue driven by higher rounds played was combined with
an increase in green fees during the year. While revenue increased, golf related costs are generally fixed in nature and
did not increase at the same rate.
Solid Waste Operations and Storm Water Programs are combined on the city’s financial reports and showed a net
operating loss of $1.1 million for the year. Revenues were slightly lower than the previous fiscal year, and expenses
increased due to planned outside professional service costs: for solid waste, recycling, and organics management
services; household hazardous waste collection and disposal; and environmental outreach and education. Nonoperating
revenues did not result in any change to the $1.1 million operating income before transfers and capital contributions.
The unrestricted net position for the Water, Golf Course, Wastewater and Solid Waste Operations at the end of the year
amounted to $148.3 million, or approximately 27% of the total enterprise funds net position. This unrestricted balance
increased mostly from removal of the Golf Course Fund advance. Each fund’s unrestricted net position may be used for
rate stabilization for the respective fund’s services, fluctuations in operating expenses, and unforeseen repairs and
maintenance. Approximately $41.5 million, or 8%, of the net position of all the proprietary funds are restricted for future capital construction of new and replacement water and wastewater infrastructure assets. Since 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.
General Fund Budgetary Highlights for Fiscal Year 2020-21
Management monitors revenues during the year and updates estimated revenue figures when new information is
received. General Fund revenue estimates were revised minimally during the year, as compared to the originally
budgeted estimates. Some of the factors that led to the $1.6 million increase in revenue estimates included:
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• An increase in sales tax revenue resulting from a 1st quarter sales tax audit
• The revenue adjustment to offset fiscal year 2020-21 mutual aid overtime for Operation Collaboration COVID-19 vaccination program expenses
• Grant funds received from the Coastal Conservancy for the South Carlsbad Boulevard Climate Adaptation Project
• Adult literacy and family literacy grant funds received during the year
• Reimbursement for mutual aid overtime
• Developer deposits received during the year
• Revenue received from neighboring cities to fund the Innovate78 contract agreement with San Diego Regional
Economic Development Corporation
• Reimbursement from SANDAG for the Carlsbad Connector program
The increase from the total original expenditure and transfers budget to the final budget amounted to $90.8 million
primarily due to:
• Transfers of $47 million to the Golf Course Fund and $3.5 million to the Infrastructure Replacement Fund
• Outstanding purchase orders at June 30, 2020 totaling $10.5 million carried forward into fiscal year 2020-21
• The remaining balance of innovation funds at June 30, 2020 totaling $10.8 million carried forward into fiscal
year 2020-21 and transferred to the Technology Investment Capital Fund
• The appropriation of additional funds related to COVID-19 related expenditures
• The appropriation for increased parks sanitizing and cleaning costs related to COVID-19
• The carryforward of other unspent funds at June 30, 2020 planned to be used for: o External legal services
o A Unified Communication System
o Schulman Auditorium AV system maintenance
o Redistricting contractor services
o Mylar back file conversion project
o Additional Climate Action Plan costs
o Preventative health screenings for chronic conditions per National Fire Protection Association Guidelines
o Cannon Park playground refurbishment
o Public arts
o COVID-19 related cleaning services and
• Mutual aid overtime costs
• Additional costs related to the modification of overtime calculations for Fire employees
• The appropriation of grant money received
• Developer funded studies
The difference of $25.7 million between the final budgeted expenditures plus transfers and the actual expenditures plus transfers for the year, on a budgetary basis, can be generally summarized as follows:
• Higher than expected intergovernmental revenues, sales tax and transient occupancy tax
• Interdepartmental charges were $0.2 million above estimates, which are offset against expenditures for
reporting purposes in the financial statements.
• Savings by various major service areas within the city making up the remaining difference. Current year savings
were generated from:
o The closure of purchase orders that had no activity during the past 12 months
o Departments cutting back on expenditures due to the COVID-19 pandemic
o Unfilled staff vacancies
o Overall awareness of fiscal responsibility throughout the city
o Deferral of projects
o Accumulated savings set aside for future technology and innovation enhancements
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.
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Capital Asset and Debt Administration
Capital Assets
At the end of fiscal year 2020-21, 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 wastewater lines, Police and Fire
vehicles, and other maintenance equipment. This number includes infrastructure assets of the general government which are required per GASB.
Some of this year’s major capital asset additions included:
• Installation of digital information network
• Installation of adaptive signal coordination systems
• Improvements to Village Art building
• Replacement of Hidden Canyon playground mat
• Installation of one traffic signal
• Replacement of data switches
• Improvements to Dove library parking lot
accessibility, lighting and sidewalk
• Replacement of city records management system
with Laserfiche software
• Upgrade to financial systems software to Finance
Enterprise
• Acquisition of a parcel of land known as Windsor
Pointe
• Replacement of City Hall monitors
• Replacement of recycled water pipelines
• Whiting-Turner donated assets (wastewater lines, drainage and improvements on existing streets)
• Presidio Cornerstone donated assets (water and wastewater lines)
• Carlsbad Buena Vista donated assets (water and
wastewater lines, sidewalks, improvements on
existing streets and street lighting)
• Seascape development donated assets (water lines,
wastewater lines, drainage, sidewalks, street lighting
and improvements on existing streets)
• Ocean Street 8 Owner donated assets (water lines,
drainage, sidewalks and improvements on existing
streets)
• Pivotal 650 California Street donated assets (water
and wastewater lines, and improvements on existing
streets)
• Tabata Family Trust donated assets (water lines,
wastewater lines, drainage, sidewalks, street lighting and improvements on existing streets)
• Pino Vitti donated assets (water lines, wastewater
lines, sidewalks, street lighting and improvements on
existing streets)
• Magnolia A3 donated assets (water lines, wastewater
lines, drainage, sidewalks, landscaping and
improvements on existing streets)
• NWB Carlsbad donated assets (water lines and
improvements to existing streets)
• 11 defibrillators
• 46 vehicles
• One wet dry hydro-excavator
• One trailer mounted jetting unit
Total
Percentage
Change Change
2020 2021 2020 2021 2020 2021 2020-21 2020-21
Land $155.9 $160.6 $9.3 $9.3 $165.2 $169.9 $4.7 2.8%
Construction in progress 16.2 18.1 24.8 21.4 41.0 39.5 (1.5) -3.7%
Buildings and other structures 138.3 138.3 41.1 41.2 179.4 179.5 0.1 0.0%
Improvements other than buildings 93.8 98.9 53.2 53.5 147.0 152.4 5.4 3.7%
Machinery and equipment 51.7 52.2 13.9 14.0 65.6 66.2 0.6 0.9%
Infrastructure 734.3 738.3 379.6 402.5 1,113.9 1,140.8 26.9 2.4%
Wastewater treatment facility - - 60.3 62.4 60.3 62.4 2.1 3.5%
Intangibles 5.0 6.5 - - 5.0 6.5 1.5 29.7%
1,195.2 1,212.9 582.2 604.3 1,777.4 1,817.2 39.8 2.2%
Accumulated depreciation (403.9) (423.6) (215.7) (229.0) (619.6) (652.6) (33.0) 5.3%
Total $791.3 $789.3 $366.5 $375.3 $1,157.8 $1,164.6 $6.8 0.6%
Activities Activities Total
CITY OF CARLSBAD'S CAPITAL ASSETS
(in millions of dollars)
Governmental Business-Type
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• One motorcycle
• One CCTV transporter
• One stump cutter
• One woodchipper
• One vacuum excavator
• One utility four-wheeler
In addition to carrying forward appropriations of $246.4 million for previously budgeted projects, the city’s fiscal year
2021-22 capital improvement budget appropriated an additional $56.2 million for capital projects.
These additional appropriations were principally for the following projects: Avenida Encinas widening south of Palomar
Airport Road; Carlsbad Boulevard waterline replacement at Terramar; Carlsbad Water Recycling Encina capital projects;
citywide drainage improvement program; Desalinated Water Flow Facility No. 5 projects; El Camino Real widening from
Poinsettia Lane to Camino Vida Roble; Encina capital projects; fleet fuel island upgrade; Kelly Drive and Park Drive complete street improvements; Leo Carrillo Ranch roof repairs; Park Drive street and drainage improvements; pavement
management program; SCADA improvements; sewer lift station repairs and upgrades; Terramar area coastal
improvements; Veterans Memorial Park; water system rehabilitation and replacement; and the transfer of Fire Station
No. 4 funds to the General Fund.
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 of the
financial statements and in the city’s Capital Improvement Program (CIP) document, which can be found on the city’s
website or obtained from the Administrative Services Department.
Long-term Debt
CITY OF CARLSBAD'S OUTSTANDING DEBT
(in millions of dollars)
Governmental Business-Type Percentage
Activities Activities Total Change
2020 2021 2020 2021 2020 2021 2020-21
Loans $0.0 $0.0 $15.3 $13.7 $15.3 $13.7 -10.5%
Capital leases 0.2 0.0 0.0 0.0 0.2 0.0 -100.0%
Total $0.2 $0.0 $15.3 $13.7 $15.5 $13.7 -11.6%
At fiscal year-end, the city had $13.7 million in loans and capital leases, a decrease of $1.8 million from last year, as shown
in the table above. Regular payments were made on all the city’s outstanding loans and capital leases. More detail about
the city’s long-term liabilities is presented in Note 7 of the financial statements.
Economic Factors and Next Year’s Budgets and Rates for Fiscal Year 2021-22
• The State of California adopted its Fiscal Year 2021-22 Annual Budget and is projecting reserves reach $21 billion
and an ending fund balance of $7 billion. The budget reflects significantly higher revenues than were estimated at
the time of the fiscal year 2021-22 Budget Act due to the impacts of COVID-19. Further, the budget package uses
$8.9 billion in American Rescue Plan Act fiscal relief funds to offset General Fund revenue losses that have occurred,
relative to the pre‑pandemic trajectory, due to the COVID-19 public health emergency. This lowers General Fund
costs by that amount. The spending plan dedicates the vast majority to one-time or temporary program augmentations. Some major General Fund spending choices in the 2021-22 Budget Act affecting the city are listed
below.
o Pay down deferrals of required minimum annual funding to schools and community colleges
o Golden State Stimulus payments
o Funding for housing and homelessness programs, including flexible aid to local governments to address
homelessness in their communities
o Second round of grants to small businesses and nonprofit cultural institutions
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o Wildfire and forest resilience package
o Statewide broadband infrastructure
o A variety of resources and environment programs
o Litter abatement and beautification projects on state highways and local roads
o Increasing eligibility and participation in the CalWORKS and food assistance programs
• Property tax, the largest source of General Fund revenues, is expected to grow by 1.8% in fiscal year 2021-22. While
the residential real estate market in Carlsbad has seen significant increases in values, commercial property assessed
values are expected to remain flat. The median price of a single-family residence in Carlsbad, based on resale data
from Zillow, was up by 13.7% year over year in March 2021.
• Sales Tax revenues generally move in step with economic conditions. Overall, the City of Carlsbad’s economy has
been neutral during the pandemic – the economic conditions of some segments have suffered, and others have
grown. The city has also been benefitting from sales tax revenues on internet sales generated as a result of the
Wayfair or AB147 law that went into effect in October 2019. Until fiscal year 2019-20, sales tax revenues had
improved markedly, peaking in fiscal year 2018-19 at $40.8 million. Easing of the COVID-19 related restrictions is
expected to lead to an 11% increase over fiscal year 2020-21 levels to a total of $44.0 million in sales tax revenues
for fiscal year 2021-22. This is 8% higher than the sales tax peak of $40.8 million in fiscal year 2018-19 and is expected
due to high levels of consumer savings coupled with pent-up demand for particular segments
• Transient Occupancy Tax (TOT, or hotel tax) is forecasted to increase by 47% in fiscal year 2021-22 when compared
to estimated fiscal year 2020-21 revenues. The increase, while significant, is still lower than peak levels seen in fiscal
year 2018-19. The recovery of TOT is expected to be partial as the city’s hotels are largely driven by the tourists in
the summer and group business travel in the winter. With the economy fully reopened in June, the summer season
is expected to be robust. However, with the trend of remote work and decreased business travel that is largely
related to the impacts of COVID-19, the city’s business-related travel is anticipated to recover slowly. The city saw
the opening of the Home2Suites and the Springhill Suites hotels during fiscal year 2021-22, but the impact of new
openings has been overshadowed by the COVID-19 disease containment and suppression measures.
• The city approved 23.5 new full-time positions and 6.2 part-time positions in the General Fund, primarily in the
following main areas:
o New positions to support the new Housing & Homeless Services Department
o Nine paramedic firefighters
o New positions for the Police Department’s Homeless Outreach Team
o A senior program manager for the Diversity, Equity & Inclusion Program
o Several part-time to full-time position conversions
o Several new part-time positions and the reinstatement of part-time aquatic positions to pre-COVID-19 levels
• As part of CalPERS’ strategy to ensure the plan’s sustainability, CalPERS deliberately raised participating agencies’
contributions over several years to improve the plan’s long-term funded status. In support of CalPERS strategies for
plan sustainability, and as part of the city’s strategic, long-term approach to financial management, the city actively
manages its unfunded pension liability. The City Council approved an additional discretionary contribution of $10
million to decrease future costs of the city’s unfunded actuarial liability. This active management helps ensure
resources are available to fulfill the city’s contractual promises to its employees and minimizes the chance that
funding these pension benefits will interfere with the city’s ability to provide essential public services
• Through Memorandums of Understanding (MOUs):
o The Carlsbad City Employees’ Association (CCEA) employees will receive a 2.5% salary increase on Jan. 1, 2022. o The Carlsbad Firefighters Association (CFA) will receive a 4.0% salary increase on Jan. 1, 2022.
o The City Council has not determined what the following groups will receive on Jan. 1, 2022:
Fire Management and General Management employees
Carlsbad Police Management Association (CPMA) employees (currently negotiating)
Carlsbad Police Officers Association (CPOA) employees (currently negotiating)
These factors were considered when preparing the city’s General Fund budget for fiscal year 2021-22. Budgeted
expenditures increased by 12.8% to $184.6 million. The total personnel budget for fiscal year 2021-22 is $116.3 million,
which is 10.7% more than the previous year’s personnel budget of $105.0 million. The total maintenance and operations
budget for fiscal year 2021-22 is $60.3 million, which is 17.8% more than the previous year’s budget of $51.2 million. The
{city of
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total capital outlay budget for fiscal year 2021-22 is $0.9 million, $0.5 million more than the previous year. The fiscal year
2021-22 budget reflects the plan to reinstate city services back to pre-pandemic levels and operationalize the City
Council’s goals. The increase includes $5.9 million in one-time costs associated with the goals and the addition of 23.5
new full-time and 6.2 part-time employees which are mostly associated with the goals.
Transfers out of the General Fund are budgeted at $7.1 million, a $0.1 million increase from the prior fiscal year. The
General Fund transferred $5.4 million to the General Capital Construction Fund for major new construction of city
infrastructure and facilities; the similar transfer to the Infrastructure Replacement Fund for maintenance or replacement
of city infrastructure and facilities was not needed because of the offset for the cancellation of $5.1 million in funds for
the Fire Station 4 Expansion project.
Adding to the adopted budget of $184.6 million for the General Fund, funds will be carried over to fiscal year 2021-22:
approximately $2.0 million in unspent fiscal year 2020-21 budgeted expenditures, $9.8 million in unspent innovation
fund budgeted expenditures, $6.4 million for a CalPERS additional discretionary payment, and $12.2 million in open encumbrances as of June 30, 2021.
During the current fiscal year, the unassigned fund balance in the General Fund decreased by $10.9 million to $99.3
million. However, due to fiscal discipline, expenditures were below the budget by $25.7 million. Based on fiscal year
2021-22 projections, the unassigned General Fund balance is expected to be reduced by approximately $5.8 million.
Projected revenues are currently sufficient to build the approved projects listed in the fiscal year 2020-21 CIP. The city’s business-type activities reflect the following:
Water revenues are expected to increase from 2% rate increase starting January 2022 assuming the same quantity of
water sold. Wastewater revenues are projected to increase slightly due to customer demand and a shift of demand from
residential to commercial customers.
The effective increase in purchase costs for CMWD is projected to be approximately 3.9%. The cost of water purchased from the San Diego County Water Authority is projected to increase due to decreased countywide demand and increases
in Metropolitan Water District’s water rates, inter alia. Cost increases are being partially mitigated through planned
draws on San Diego County Water Authority’s rate stabilization fund. Healthy reserves have allowed CMWD to keep local
rates low during fiscal year 2021-22. A recent cost of service study will set rate increases based on increased purchase
rates, capital repair costs and increases to cost of materials starting in 2022.
Wastewater rates increased 3% for calendar year 2021 with planned increases based on a recent cost study expected to
go into effect in 2022. The increases are needed to offset increasing costs of capital repair based on an updated sewer
master plan and higher costs of materials, increasing costs of odor control chemicals, and increased costs from the
operator of the wastewater treatment facility.
Solid Waste revenues are projected to increase moderately and the fund expects to run a deficit due to increasing waste
management requirements imposed by the state. Sufficient reserves are able to sustain the increase costs without
significant price increases in the short term.
The Golf Course Fund projected a slight increase in revenues from an increase in rates in July 2021 offset by an expected decrease from reopening of other competing businesses and activities. As a result, the operation expected to continue
to see improvements in their cash flows going forward.
Contacting the City’s Financial Management
This financial report is designed to provide the residents, taxpayers, customers, investors, and creditors with a general
overview of the city’s finances and to demonstrate the city’s accountability for the money it receives. If you have any
questions about this report or need additional information, contact the Administrative Services Department,
1635 Faraday Avenue, Carlsbad, CA 92008, 760-602-2430, or find additional information at www.carlsbadca.gov.
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June 30, 2021
Governmental Business-Type
ASSETS Activities Activities Total
Cash and investments 624,616,452 $ 196,386,006 $ 821,002,458 $
Deposits 200,432 - 200,432
Receivables:
Interest 5,247,445 685,482 5,932,927
Taxes 13,527,673 29,974 13,557,647
Other 1,046,864 554,328 1,601,192
Accounts, net of allowances 1,923,145 11,647,966 13,571,111
Due from other governments 1,343,695 5,552,542 6,896,237
Internal balances (2,627,139) 2,627,139 -
Inventories 344,776 813,227 1,158,003
Prepaid items 2,777,822 151,713 2,929,535
Loan and reimbursement receivables, net of allowances 24,833,116 - 24,833,116
Land held for resale 2,285,722 - 2,285,722
Capital assets:
Land 160,619,596 9,330,718 169,950,314
Construction in progress 18,154,248 21,380,351 39,534,599
Buildings and other structures 138,281,470 41,175,467 179,456,937
Improvements other than buildings 98,889,725 53,509,748 152,399,473
Machinery and equipment 52,220,679 13,963,957 66,184,636
Infrastructure 738,257,324 402,470,807 1,140,728,131
Wastewater treatment facility - 62,425,149 62,425,149
Intangible assets 6,483,648 - 6,483,648
Less accumulated depreciation (423,571,946) (229,028,524) (652,600,470)
Total capital assets 789,334,744 375,227,673 1,164,562,417
Total assets 1,464,854,747 593,676,050 2,058,530,797
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - OPEB related items 2,916,391 538,649 3,455,040
Deferred outflows of resources - pension related items 43,201,359 2,971,345 46,172,704
Total deferred outflows of resources 46,117,750 3,509,994 49,627,744
The notes to the financial statements are an integral part of this statement.
Primary Government
Statement of Net Position
46
{_city of
Carlsbad
June 30, 2021
Governmental Business-Type
LIABILITIES Activities Activities Total
Accrued liabilities 18,279,836 $ 4,042,877 $ 22,322,713 $
Accrued interest payable - 44,276 44,276
Due to other governments 49,132 12,961,396 13,010,528
Estimated claims payable 14,146,021 - 14,146,021
Deposits payable 11,195,474 939,873 12,135,347
Unearned revenue 915,942 38,327 954,269
Noncurrent liabilities:
Due within one year - 1,658,821 1,658,821
Due in more than one year:
Loans payable and capital leases - 12,091,078 12,091,078
Net OPEB liability 2,799,783 354,191 3,153,974
Net pension liability 154,426,420 12,047,042 166,473,462
Total liabilities 201,812,608 44,177,881 245,990,489
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - OPEB related items 182,976 65,955 248,931
Deferred inflows of resources - pension related items 842,684 48,824 891,508
Total deferred inflows of resources 1,025,660 114,779 1,140,439
NET POSITION
Net investment in capital assets 789,334,744 361,477,774 1,150,812,518
Restricted for:
Capital assets 212,635,840 41,461,775 254,097,615
Lighting and landscaping districts 9,225,568 - 9,225,568
Affordable housing 40,988,135 - 40,988,135
Other purposes 6,250,598 - 6,250,598
Unrestricted 249,699,344 149,953,835 399,653,179
Total net position 1,308,134,229 $ 552,893,384 $ 1,861,027,613 $
The notes to the financial statements are an integral part of this statement.
Primary Government
Statement of Net Position (continued)
47
{_city of
Carlsbad
Statement of Activities
For the Year Ended June 30, 2021
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary government:
Governmental activities:
General government 20,002,696 $ 1,259,648 $ 8,033,583 $ 930 $
Public safety 80,294,584 5,020,236 2,650,581 -
Community services 57,654,582 8,079,724 10,859,966 1,488,437
Public works 35,480,588 5,662,440 4,914,549 8,076,137
Interest and fiscal charges on long-term debt 436 - - -
Total governmental activities 193,432,886 20,022,048 26,458,679 9,565,504
Business-type activities:
Carlsbad Municipal Water District 56,318,872 49,667,581 1,792,425 2,107,290
Golf course 10,280,089 8,107,466 - -
Wastewater 9,062,816 14,026,739 1,157,360 5,493,915
Solid waste 5,086,004 3,387,077 534,632 -
Total business-type activities 80,747,781 75,188,863 3,484,417 7,601,205
Total primary government 274,180,667 $ 95,210,911 $ 29,943,096 $ 17,166,709 $
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
Special items-Golf Course debt
Transfers
Total general revenues, special items, and transfers
Change in net position
Net position at beginning of year, as restated
Net position at end of year
The notes to the financial statements are an integral part of this statement.
Program Revenues
48
{city of
Carlsbad
Governmental Business-type
Activities Activities Total
(10,708,535) $ -$ (10,708,535) $
(72,623,767) - (72,623,767)
(37,226,455) - (37,226,455)
(16,827,462) - (16,827,462)
(436) - (436)
(137,386,655) - (137,386,655)
- (2,751,576) (2,751,576)
- (2,172,623) (2,172,623)
- 11,615,198 11,615,198
- (1,164,295) (1,164,295)
- 5,526,704 5,526,704
(137,386,655) 5,526,704 (131,859,951)
78,239,492 4,490,519 82,730,011
42,579,211 - 42,579,211
15,583,688 - 15,583,688
5,773,811 - 5,773,811
5,704,576 - 5,704,576
1,786,173 - 1,786,173
5,035,615 639,262 5,674,877
516,472 - 516,472
(8,427,362) 8,427,362 -
(47,272,546) 47,272,546 -
99,519,130 60,829,689 160,348,819
(37,867,525) 66,356,393 28,488,868
1,346,001,754 486,536,991 1,832,538,745
1,308,134,229 $ 552,893,384 $ 1,861,027,613 $
Primary Government
Changes in Net Position
Net Revenue (Expense) and
49
Balance Sheet
Governmental Funds
June 30, 2021
Community General
General Facilities Capital Infrastructure
ASSETS Fund District No. 1 Construction Replacement
Cash and investments 160,339,923 $ 94,992,909 $ 43,092,669 $ 124,415,160 $
Receivables:
Interest 730,248 329,881 - 433,878
Taxes 13,526,783 890 - -
Other 851,243 15,283 - -
Accounts, net of allowances 468,173 - - -
Due from other funds 300,012 - - -
Due from other governments 287,001 - - -
Inventories 10,564 - - -
Prepaid items 649,970 - - -
Land held for resale - - - -
Loans receivable, net of allowances 1,531,162 - - -
Deposits 200,432 - - -
Advances to other funds 1,253,825 1,525,948 - -
Total assets 180,149,336 $ 96,864,911 $ 43,092,669 $ 124,849,038 $
LIABILITIES
Accrued liabilities 7,710,563 $ 141,930 $ 1,250,560 $ 484,569 $
Due to other funds 993,748 - - -
Deposits payable 10,724,357 13,000 - -
Due to other governments 2,967 - - -
Advances from other funds - - - -
Unearned revenue 737,627 - - -
Total liabilities 20,169,262 154,930 1,250,560 484,569
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 159,458 - - -
Total deferred inflows of resources 159,458 - - -
FUND BALANCES
Nonspendable 3,445,521 - - -
Restricted - 96,709,981 - -
Committed 1,000,000 - - -
Assigned 56,114,979 - 41,842,109 124,364,469
Unassigned 99,260,116 - - -
Total fund balances 159,820,616 96,709,981 41,842,109 124,364,469
Total liabilities, deferred inflows of
resources, and fund balances 180,149,336 $ 96,864,911 $ 43,092,669 $ 124,849,038 $
The notes to the financial statements are an integral part of this statement.
50
{city of
Carlsbad
Other Total
Park Governmental Governmental
Development Funds Funds
14,098,254 $ 135,771,804 $ 572,710,719 $
49,166 3,543,590 5,086,763
- - 13,527,673
- 180,338 1,046,864
- 1,449,866 1,918,039
- - 300,012
- 1,056,694 1,343,695
- 2,145 12,709
- 856 650,826
- 2,285,722 2,285,722
- 23,301,954 24,833,116
- - 200,432
- 5,744,116 8,523,889
14,147,420 $ 173,337,085 $ 632,440,459 $
-$ 1,311,704 $ 10,899,326 $
- 300,012 1,293,760
- 456,149 11,193,506
- 46,165 49,132
5,650,000 2,873,889 8,523,889
- 178,315 915,942
5,650,000 5,166,234 32,875,555
- 4,505,452 4,664,910
- 4,505,452 4,664,910
- 856 3,446,377
8,497,420 163,892,740 269,100,141
- - 1,000,000
- - 222,321,557
- (228,197) 99,031,919
8,497,420 163,665,399 594,899,994
14,147,420 $ 173,337,085 $ 632,440,459 $
51
-
52
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Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2021
Total fund balances - governmental funds 594,899,994 $
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 769,696,375
Internal service funds 19,638,369
Total capital assets 789,334,744
Deferred outflows are not an available resource and therefore, are not reported in the funds.
Governmental funds 44,277,540
Internal service funds 1,840,210
Total deferred outflows 46,117,750
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 47,424,399
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (1,633,391)
Internal service fund net position included as part of total capital assets (19,638,369)
Internal service fund net position included as part of deferred outflows (1,840,210)
Internal service fund net position included as part of long-term liabilities 7,016,857
Internal service fund net position included as part of deferred inflows 39,408
Net internal service fund net position 31,368,694
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.34,458
Development fees receivable are not a current financial resource and therefore are not recognized as
revenue in the funds until received.1,429,966
A portion of deferred grant revenues are not available to pay for current period expenditures and
therefore are not recognized in the funds.125,000
Interest receivable on housing loans is not a current financial resource and therefore is not recognized
as revenue in the funds until received.3,075,486
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 (150,209,346)
Internal service funds (7,016,857)
Total long-term liabilities (157,226,203)
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 (986,252)
Internal service funds (39,408)
Total deferred inflows (1,025,660)
Net position of governmental activities 1,308,134,229 $
The notes to the financial statements are an integral part of this statement.
53
{city of
Carlsbad
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2021
Community General
General Facilities District Capital
Fund No. 1 Construction
Revenues:
Taxes 149,397,305 $ 1,424,880 $ -$
Intergovernmental 10,115,918 - -
Licenses and permits 2,398,980 - -
Charges for services 7,503,388 - -
Fines and forfeitures 423,380 - -
Income from property and investments 5,641,716 349,229 -
Contributions from property owners - 512,370 -
Donations - - -
Miscellaneous 1,604,683 - 154,470
Total revenues 177,085,370 2,286,479 154,470
Expenditures:
Current:
General government 22,099,329 105,795 -
Less: interdepartmental charges (5,146,267) - -
Public safety 78,328,413 - -
Community services 40,500,659 - -
Public works 18,463,529 - -
Capital outlay - 476,385 5,086,289
Debt service:
Principal retirement 7,970 - -
Interest and fiscal charges 218 - -
Total expenditures 154,253,851 582,180 5,086,289
Excess (deficiency) of revenues
over (under) expenditures 22,831,519 1,704,299 (4,931,819)
Other financing sources (uses):
Transfers in 10,000 - 4,500,000
Transfers out (57,012,546) - -
Total other financing sources (uses)(57,002,546) - 4,500,000
Net change in fund balances (34,171,027) 1,704,299 (431,819)
Fund balances at beginning of year, as restated 193,991,643 95,005,682 42,273,928
Fund balances at end of year 159,820,616 $ 96,709,981 $ 41,842,109 $
The notes to the financial statements are an integral part of this statement.
54
{city of
Carlsbad
Other Total
Infrastructure Park Governmental Governmental
Replacement Development Funds Funds
-$ -$ 4,640,131 $ 155,462,316 $
- - 13,537,077 23,652,995
- - - 2,398,980
- - 4,111,694 11,615,082
- - 5,751 429,131
204,670 41,052 781,012 7,017,679
- 1,240,730 4,096,601 5,849,701
- - 321,213 321,213
- - 27,191 1,786,344
204,670 1,281,782 27,520,670 208,533,441
- - 244,777 22,449,901
- - - (5,146,267)
- - 402,874 78,731,287
- - 12,766,757 53,267,416
- - 1,527,264 19,990,793
3,333,332 1,118 12,493,070 21,390,194
- - - 7,970
- - 16,961 17,179
3,333,332 1,118 27,451,703 190,708,473
(3,128,662) 1,280,664 68,967 17,824,968
4,500,000 - 750,000 9,760,000
- - (60,000) (57,072,546)
4,500,000 - 690,000 (47,312,546)
1,371,338 1,280,664 758,967 (29,487,578)
122,993,131 7,216,756 162,906,432 624,387,572
124,364,469 $ 8,497,420 $ 163,665,399 $ 594,899,994 $
55
56
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, 2021
Net change in fund balances - total governmental funds (29,487,578) $
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 17,604,642
Gain on the disposal of capital assets (99,428)
Depreciation expense (22,688,260)
Governmental funds do not reflect the donation of capital assets as revenues.1,543,454
Unpaid interest income on advances to other funds is not a current financial resource and therefore is
not recognized as revenue in the funds until received.16,756
Received interest income on advances to other funds is not a current financial resource and therefore is
recognized as revenue in the funds.(2,681,952)
Writ-offs of previously recognized interest income on golf course advance is not recognized as an
expenditure in the governmental funds.(8,427,362)
Unpaid development fees are not a current financial resource and therefore are not recognized as
revenue in the funds until received.1,429,966
Revenues that are recorded in the funds that are not recorded in the statement of activities due to
measurement differences.64,506
Unpaid interest revenue on advances for housing loans is not a current financial and therefore is not
recognized as revenue in the funds until received.3,075,486
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.7,970
The net revenue of activities of internal service funds is reported with governmental activities.514,975
Adjustments made to the net pension and net OPEB liabilities do not use current financial resources
and therefore, are not recognized in the funds.1,257,034
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.2,266
Change in net position of governmental activities (37,867,525) $
The notes to the financial statements are an integral part of this statement.
57
Ccityof
Carlsbad
General Fund
Variance With
Actual Amounts Final Budget -
Original Final (Budgetary Basis)Over/(Under)
Revenues:
Taxes 140,716,000 $ 140,780,200 $ 149,397,305 $ 8,617,105 $
Intergovernmental 924,000 1,757,249 10,115,918 8,358,669
Licenses and permits 1,814,000 1,814,000 2,398,980 584,980
Charges for services 7,415,000 7,827,822 7,503,388 (324,434)
Fines and forfeitures 515,000 515,000 423,380 (91,620)
Income from property and investments 7,482,000 7,492,000 7,998,952 506,952
Miscellaneous 956,000 1,224,238 1,604,683 380,445
Total revenues 159,822,000 161,410,509 179,442,606 18,032,097
Expenditures:
Current:
General government 23,434,636 43,407,013 25,419,627 (17,987,386)
Less: interdepartmental charges (4,955,962) (4,955,962) (5,146,267) (190,305)
Public safety 71,766,577 81,238,585 80,132,785 (1,105,800)
Community services 42,648,122 49,127,083 44,264,702 (4,862,381)
Public works 18,762,702 23,170,537 21,654,706 (1,515,831)
Total expenditures 151,656,075 191,987,256 166,325,553 (25,661,703)
Excess (deficiency) of revenues over (under)
expenditures 8,165,925 (30,576,747) 13,117,053 43,693,800
Other financing sources (uses):
Transfers in 10,000 10,000 10,000 -
Transfers out (7,009,000) (57,512,546) (57,012,546) 500,000
Total other financing sources (uses)(6,999,000) (57,502,546) (57,002,546) 500,000
Net change in fund balances 1,166,925 (88,079,292) (43,885,493) 44,193,799 $
Fund balance at beginning of year, as restated 193,991,643 193,991,643 193,991,643
Fund balance at end of year 195,158,568 $ 105,912,351 $ 150,106,150 $
The notes to the financial statements are an integral part of this statement.
Budgeted Amounts
For the Year Ended June 30, 2021
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -
58
{city of
Carlsbad
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -
General Fund (continued)
For the Year Ended June 30, 2021
Actual Amounts
(Budgetary Basis)
Revenues
Actual amounts (budgetary basis) “available for appropriation” from
the budgetary comparison schedule (previous page).179,442,606 $
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.(2,357,236)
177,085,370 $
Expenditures
Actual amounts (budgetary basis) “total charges to appropriations”
from the budgetary comparison schedule (previous page).166,325,553 $
Differences - budget to GAAP:
Encumbrances are shown in the year encumbered for budgetary purposes,
but in the year paid for financial reporting purposes.(12,071,702)
154,253,851 $
The notes to the financial statements are an integral part of this statement.
BUDGET-TO-GAAP RECONCILIATION
59
{city of
Carlsbad
Statement of Net Position
Proprietary Funds
June 30, 2021
Carlsbad
Municipal Golf
ASSETS Water District Course Wastewater
Current assets:
Cash and investments 134,471,029 $ 2,791,263 $ 45,350,047 $
Receivables:
Interest 472,560 6,896 158,024
Taxes 29,974 - -
Other - 25,149 -
Accounts, net of allowances 8,348,664 2,207 2,321,298
Due from other funds 1,048,262 - -
Due from other governments 2,607,382 - 2,945,160
Inventories 657,997 140,712 14,518
Prepaid items 89,002 62,540 171
Total current assets 147,724,870 3,028,767 50,789,218
Capital assets:
Land 1,914,871 4,786,745 2,629,102
Construction in progress 2,266,081 6,631 19,107,639
Buildings and other structures 21,005,016 20,170,451 -
Improvements other than buildings 2,322,172 44,052,752 7,134,824
Machinery and equipment 10,989,380 1,906,589 1,067,988
Infrastructure 262,320,164 - 140,150,643
Wastewater treatment facility - - 62,425,149
Intangible assets - - -
Less accumulated depreciation (95,902,091) (43,858,439) (89,267,994)
Total capital assets (net of accumulated
depreciation)204,915,593 27,064,729 143,247,351
Total noncurrent assets 204,915,593 27,064,729 143,247,351
Total assets 352,640,463 30,093,496 194,036,569
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - OPEB related items 384,066 - 90,912
Deferred outflows of resources - pension related items 1,771,129 - 780,681
Total deferred outflows of resources 2,155,195 - 871,593
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
60
{city of
Carlsbad
Governmental
Activities -
Nonmajor Internal
Solid Service
Waste Totals Funds
13,773,667 $ 196,386,006 $ 51,905,733 $
48,002 685,482 160,682
- 29,974 -
529,179 554,328 -
975,797 11,647,966 5,106
- 1,048,262 -
- 5,552,542 -
- 813,227 332,067
- 151,713 2,126,996
15,326,645 216,869,500 54,530,584
- 9,330,718 -
- 21,380,351 820,801
- 41,175,467 -
- 53,509,748 -
- 13,963,957 34,714,847
- 402,470,807 -
- 62,425,149 -
- - 3,155,837
- (229,028,524) (19,053,116)
- 375,227,673 19,638,369
- 375,227,673 19,638,369
15,326,645 592,097,173 74,168,953
63,671 538,649 159,908
419,535 2,971,345 1,680,302
483,206 3,509,994 1,840,210
(continued)
Enterprise Funds
61
Statement of Net Position
Proprietary Funds (continued)
June 30, 2021
Carlsbad
Municipal Golf
LIABILITIES Water District Course Wastewater
Current liabilities:
Accrued liabilities 1,451,268 427,050 662,949
Accrued interest payable 44,276 - -
Due to other funds - - 46,534
Due to other governments 8,246,700 - 4,703,753
Estimated claims payable - - -
Current portion of loans payable 1,658,821 - -
Total current liabilities 11,401,065 427,050 5,413,236
Noncurrent liabilities:
Deposits payable 102,690 481,006 356,177
Unearned revenue - - 10,000
Net OPEB liability 207,532 - 72,541
Net pension liability 7,180,879 - 3,165,198
Loans payable 12,091,078 - -
Total noncurrent liabilities 19,582,179 481,006 3,603,916
Total liabilities 30,983,244 908,056 9,017,152
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - OPEB related items 56,302 - 5,320
Deferred inflows of resources - pension related items 29,102 - 12,828
Total deferred inflows of resources 85,404 - 18,148
NET POSITION
Net investment in capital assets 191,165,694 27,064,729 143,247,351
Restricted for:
Capital assets 36,704,578 - 4,757,197
Unrestricted 95,856,738 2,120,711 37,868,314
Total net position (deficit)323,727,010 $ 29,185,440 $ 185,872,862 $
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 -
62
{city of
Carlsbad
Governmental
Enterprise Funds Activities -
Nonmajor Internal
Solid Service
Waste Totals Funds
1,501,610 4,042,877 7,380,510
- 44,276 -
7,980 54,514 -
10,943 12,961,396 -
- - 14,146,021
- 1,658,821 -
1,520,533 18,761,884 21,526,531
- 939,873 1,968
28,327 38,327 -
74,118 354,191 204,229
1,700,965 12,047,042 6,812,628
- 12,091,078 -
1,803,410 25,470,511 7,018,825
3,323,943 44,232,395 28,545,356
4,333 65,955 11,799
6,894 48,824 27,609
11,227 114,779 39,408
- 361,477,774 19,638,369
- 41,461,775 -
12,474,681 148,320,444 27,786,030
12,474,681 $ 551,259,993 47,424,399 $
1,633,391
552,893,384 $
63
Statement of Revenues, Expenses and Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2021
Carlsbad
Municipal Golf
Water District Course Wastewater
Operating revenues:
Water sales 49,313,865 $ -$ -$
Wastewater service charges - - 14,026,739
Golf course operations - 8,105,675 -
Other charges for services 353,716 - -
Miscellaneous 1,792,425 1,791 1,157,360
Total operating revenues 51,460,006 8,107,466 15,184,099
Operating expenses:
Encina plant operations 1,218,079 - 4,060,896
Purchased water 27,362,142 - -
Golf course operations - 6,696,313 -
Depreciation 5,914,562 3,577,013 4,355,958
Fuel and supplies - - -
Claims and premiums expense - - -
Small equipment purchases - - -
General and administrative 21,499,580 6,763 713,862
Total operating expenses 55,994,363 10,280,089 9,130,716
Operating income (loss)(4,534,357) (2,172,623) 6,053,383
Nonoperating revenues (expenses):
Income from property and investments 496,313 95,044 30,908
Interest expense and fees (292,567) - -
Gain (loss) on sale of property (90) - -
Property taxes 4,490,519 - -
Total nonoperating revenues (expenses)4,694,175 95,044 30,908
Income (loss) before transfers, capital contributions and special items 159,818 (2,077,579) 6,084,291
Transfers in - 47,031,506 -
Transfers out - - -
Capital contributions:
Capital restricted fees and grants 863,016 - 4,251,735
Developer constructed assets 1,244,274 - 1,242,180
Other - - -
Special items-Golf Course debt - 8,427,362 -
Change in net position 2,267,108 53,381,289 11,578,206
Total net position (deficit) at beginning of year 321,459,902 (24,195,849) 174,294,656
Total net position (deficit) at end of year 323,727,010 $ 29,185,440 $ 185,872,862 $
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 -
64
{_city of
Carlsbad
Governmental
Activities -
Nonmajor Internal
Solid Waste Totals Service Funds
-$ 49,313,865 $ -$
- 14,026,739 -
- 8,105,675 -
3,387,077 3,740,793 22,785,718
534,632 3,486,208 518,465
3,921,709 78,673,280 23,304,183
- 5,278,975 -
- 27,362,142 -
- 6,696,313 -
- 13,847,533 2,712,987
- - 1,488,319
- - 5,461,168
- - 687,076
5,047,690 27,267,895 14,862,263
5,047,690 80,452,858 25,211,813
(1,125,981) (1,779,578) (1,907,630)
16,997 639,262 63,198
- (292,567) (3,360)
- (90) 42,739
- 4,490,519 -
16,997 4,837,124 102,577
(1,108,984) 3,057,546 (1,805,053)
281,040 47,312,546 40,000
(40,000) (40,000) -
- 5,114,751 -
- 2,486,454 -
- - 2,280,028
- 8,427,362 -
(867,944) 66,358,659 514,975
13,342,625 46,909,424
12,474,681 $ 47,424,399 $
(2,266)
66,356,393 $
Enterprise Funds
65
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2021
Carlsbad
Municipal Golf
Water District Course Wastewater
Cash flows from operating activities:
Receipts from customers and users 49,690,413 $ 8,094,756 $ 13,893,397 $
Receipts from interfund charges - - -
Payments to suppliers (40,235,138) (6,594,784) (1,994,462)
Payments to employees (7,414,680) - (2,312,409)
Internal activity - payments to other funds (3,413,519) - (1,395,257)
Claims and premiums paid - - -
Other receipts 1,792,425 1,791 1,157,360
Other disbursements (5,956) - (4,189,543)
Net cash provided (used) by operating activities 413,545 1,501,763 5,159,086
Cash flows from noncapital financing activities:
Transfers from other funds - - -
Net cash provided (used) by capital and
related financing activities - - -
Cash flows from capital and related financing activities:
Capital restricted fees 803,826 - 4,251,735
Purchase of capital assets (6,820,548) (365,381) (13,128,426)
Gross proceeds from the sale of capital assets - - -
Principal paid on capital debt (1,620,408) - -
Interest and other fees paid (256,076) - -
Proceeds from state and local grants 59,190 - -
Property taxes received 4,499,984 - -
Net cash (used in) capital and related financing
activities (3,334,032) (365,381) (8,876,691)
Cash flows from investing activities:
Interest on investments 604,701 91,258 81,033
Net increase (decrease) in cash and cash equivalents (2,315,786) 1,227,640 (3,636,572)
Cash and cash equivalents at beginning of year 136,786,815 1,563,623 48,986,619
Cash and cash equivalents at end of year 134,471,029 $ 2,791,263 $ 45,350,047 $
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
66
{city of
Carlsbad
Governmental
Activities -
Nonmajor Internal
Solid Waste Totals Service Funds
3,386,859 $ 75,065,425 $ -$
- - 23,863,664
(2,197,160) (51,021,544) (9,832,818)
(1,942,214) (11,669,303) (7,737,413)
(722,531) (5,531,307) (201,624)
- - (5,552,574)
534,632 3,486,208 -
- (4,195,499) -
(940,414) 6,133,980 539,235
241,040 241,040 40,000
241,040 241,040 40,000
- 5,055,561 -
- (20,314,355) (2,584,322)
- - 397,276
- (1,620,408) (147,952)
- (256,076) (3,360)
- 59,190 -
- 4,499,984 -
- (12,576,104) (2,338,358)
30,002 806,994 101,380
(669,372) (5,394,090) (1,657,743)
14,443,039 201,780,096 53,563,476
13,773,667 $ 196,386,006 $ 51,905,733 $
(continued)
Enterprise Funds
67
Statement of Cash Flows
Proprietary Funds (continued)
For the Year Ended June 30, 2021
Carlsbad
Municipal Golf
Water District Course Wastewater
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)(4,534,357) $ (2,172,623) $ 6,053,383 $
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization 5,914,562 3,577,013 4,355,958
Changes in assets and liabilities:
(Increase) decrease in receivables 22,832 (10,919) (133,342)
(Increase) decrease in due from other fund (1,048,262) - -
(Increase) decrease in due from other governments 202,498 - -
(Increase) decrease in inventories (114,152) 7,649 (717)
(Increase) decrease in prepaid items (80,590) 6,653 (171)
(Increase) decrease in OPEB asset 844,526 - -
(Increase) decrease in deferred outflows - OPEB related items (11,337) - (347,150)
(Increase) decrease in deferred outflows - pension related items (739,411) - (3,962)
(Decrease) increase in accrued liabilities (2,056,695) (82,043) 90,298
(Decrease) increase in due to other funds - - 46,534
(Decrease) increase in due to other governments 1,282,601 - (832,464)
(Decrease) increase in estimated claims payable - - -
(Decrease) increase in deposits payable (5,956) 176,033 (4,189,543)
(Decrease) increase in unearned revenue - - -
(Decrease) increase in OPEB liability 207,532 - (45,208)
(Decrease) increase in net pension liability 653,694 - 284,619
(Decrease) increase in deferred inflows - OPEB related items 5,824 - (121,184)
(Decrease) increase in deferred inflows - pension related items (129,764) - 2,035
Net cash provided by operating activities 413,545 $ 1,501,763 $ 5,159,086 $
Noncash capital financing activities:
Capital assets contributed by other sources 1,244,274 $ -$ 1,242,180 $
The notes to the financial statements are an integral part of this statement.
Business-Type Activities -
68
{city of
Carlsbad
Governmental
Activities -
Nonmajor Internal
Solid Waste Totals Service Funds
(1,125,981) $ (1,779,578) $ (1,907,630) $
- 13,847,533 2,712,987
56,464 (64,965) 57,299
- (1,048,262) -
- 202,498 -
- (107,220) 184,413
- (74,108) (440,974)
- 844,526 -
(4,048) (362,535) (12,094)
(161,350) (904,723) (671,493)
239,587 (1,808,853) 564,315
7,980 54,514 -
- 450,137 -
- - (183,637)
- (4,019,466) -
(56,682) (56,682) -
(6,624) 155,700 4,056
152,953 1,091,266 612,602
2,081 (113,279) 6,215
(44,795) (172,524) (386,824)
(940,415) $ 6,133,979 $ 539,235 $
-$ 2,486,454 $ 2,280,028 $
Enterprise Funds
69
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2021
Private Purpose Custodial
ASSETS Trust Fund Funds
Current assets:
Cash and investments 1,426,697 $ 6,711,318 $
Receivables:
Assessments - 19,975
Interest 4,975 41,802
Taxes - 64,139
Total current assets 1,431,672 6,837,234
Noncurrent assets:
Loans receivable 4,391,761 -
Restricted assets:
Cash and investments - 4,458,829
Total noncurrent assets 4,391,761 4,458,829
Total assets 5,823,433 11,296,063
LIABILITIES
Current liabilities:
Accrued liabilities 404 88,936
Accrued interest payable 50,350 -
Bonds payable - due within one year 900,000 -
Total current liabilities 950,754 88,936
Noncurrent liabilities:
Bonds payable - due in more than one year 1,950,000 -
Total liabilities 2,900,754 88,936
NET POSITION
Restricted for:
Individuals, organizations and other governments - 11,207,127
Redevelopment obligation retirement purposes 2,922,679 -
Total net position 2,922,679 $ 11,207,127 $
The notes to the financial statements are an integral part of this statement.
70
{city of
Carlsbad
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2021
Private Purpose Custodial
ADDITIONS Trust Fund Funds
District assessment collections -$ 5,659,874 $
Property taxes 3,013,484 1,355,775
Income (loss) from property and investments (67,626) 57,000
Interest on housing loans 836,498 -
Total additions 3,782,356 7,072,649
DEDUCTIONS
Distributions to beneficiaries - 796,085
General and administrative 78,985 67,290
Bond principal - 3,175,000
Bond Interest expense and fees 160,918 1,781,108
Total deductions 239,903 5,819,483
Change in net position 3,542,453 1,253,166
Net position (deficit) at beginning of year, as restated (619,774) 9,953,961
Net position (deficit) at end of year 2,922,679 $ 11,207,127 $
The notes to the financial statements are an integral part of this statement.
71
Ccityof
Carlsbad
Notes to the Financial Statements
72
Note 1. Summary of Significant Accounting Policies
The City of Carlsbad, California (“city”), was incorporated on July 16, 1952. The city was a general law city until 2008,
when the citizens in Carlsbad voted and approved the city to become a charter city. The city operates under a
Council-Manager form of government and provides the following services: general government, public safety,
community services and public works.
The accounting policies of the city and its component units conform to accounting principles generally accepted in
the United States of America as applicable to governmental units. The following is a summary of the more significant
policies:
Description and scope of the reporting entity
As required by accounting principles generally accepted in the United States of America, these financial statements
present the financial position of the city and its component units, entities for which the city is considered to be
financially accountable. The city is considered to be financially accountable for an organization if the city appoints a
voting majority of that organization’s governing body and the city is able to impose its will on that organization or
there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens
on the city. The city is also considered to be financially accountable for an organization if that organization is fiscally
dependent upon the city (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt
without approval from the city). In certain cases, other organizations are included as component units if the nature
and significance of their relationship with the city are such that their exclusion would cause the city’s financial
statements to be misleading or incomplete.
Based upon the above criteria, the component units of the city are the Housing Authority of the City of Carlsbad, the
City of Carlsbad Public Improvement Corporation, the Carlsbad Public Financing Authority and the Carlsbad
Municipal Water District. The city does not issue separate financial statements for these component units.
Since the City Council serves as the governing board for these component units and there is either a financial
benefit/burden relationship between the component unit and city or the management of the city has the operational
responsibility for the component unit, all of the city’s component units are considered to be blended component
units. Blended component units, although legally separate entities, are in substance part of the city’s operations,
and so data from these units is reported with the interfund data of the primary government.
Government-wide and Fund Financial Statements
The Government-wide Financial Statements (i.e., the Statement of Net Position and the Statement of Activities)
report information on all of the nonfiduciary activities of the city and its blended component units. For the most
part, the effect of interfund activity has been removed from these statements. Governmental activities, which
normally are supported by taxes and intergovernmental revenues, are reported separately from business-type
activities, which rely to a significant extent on user fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment
are offset by program revenues. Direct expenses are those that are clearly identifiable to a specific function or
segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit
from goods, services, or privileges provided by a given function or segment; and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other
items not properly classified as program revenues are reported as general revenues.
{city of
Carlsbad
Notes to the Financial Statements
73
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.
Custodial funds, which are a type of fiduciary fund, account for assets held by the city for other governments or
individuals. These funds report using an economic resources measurement focus and include all inflows, outflows
and balances reflecting the fund’s net position.
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.
{city of
Carlsbad
Notes to the Financial Statements
74
Note 1. Summary of Significant Accounting Policies (continued)
•The Park Development Fund capital project funds are used to account for receipts of fees charged to
developers for park acquisition and development.
The city reports the following major enterprise funds:
•The Carlsbad Municipal Water District (CMWD) enterprise funds are used to account for the operation,
maintenance, and capital facility financing of the city’s potable and recycled water systems.
•The Golf Course enterprise fund is used to account for revenues and expenses for the construction,
maintenance and operating activities of the city’s municipal golf course. The city has elected to promote
the golf course fund from a nonmajor enterprise fund to a major fund.
•The Wastewater enterprise funds are used to account for the operation, maintenance, and capital facility
financing of the city’s wastewater system.
The city reports the following nonmajor enterprise fund:
•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 Custodial funds account for assets held by the city for other governments or individuals. These funds
include debt service transactions on assessment district bonds for which the city is not obligated and the
city’s two Business Improvement Districts: the Carlsbad Tourism Business Improvement District and the
Carlsbad Golf Lodging Business Improvement District.
•The Trust fund accounts for the activities of the Redevelopment Obligation Retirement Fund, which
accumulates resources for obligations previously incurred 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 is the charges between the Carlsbad Municipal Water District 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.
{city of
Carlsbad
75
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (continued)
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.
Change in accounting principles
The city implemented Government Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities during
fiscal year 2020-21. This change in accounting principle resulted in a prior period adjustment, increasing the net
position of custodial funds being reported in the Statement of Changes in Fiduciary Net Position. Prior to the
implementation of this statement the custodial funds were not required to report a net position. This change also
required a prior period adjustment as an increase to net position in the Statement of Activities for Governmental
Activities and the Statement of Revenues, Expenditures and Changes in Fund Balances, Governmental Funds. This
increase was a result of moving the accumulated interest income earned on developer deposits from the Fiduciary
Funds to the General Fund, as all developer construction deposits are now held and accounted for in the General
Fund, as required by GASB 84. See footnote 21, Prior Period Adjustment for more detailed information.
The requirements of GASB 84 will enhance consistency and comparability by (1) establishing specific criteria for
identifying activities that should be reported as fiduciary activities and (2) clarifying whether and how business-type
activities should report their fiduciary activities. Greater consistency and comparability enhance the value provided
by the information reported in financial statements for assessing government accountability and stewardship.
The city also implemented GASB Statement No. 98, The Annual Comprehensive Financial Report during fiscal year
2020-21 which establishes the term annual comprehensive financial report and its acronym ACFR.
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.
{city of
Carlsbad
Notes to the Financial Statements
76
Note 1. Summary of Significant Accounting Policies (continued)
Compensated absences
Compensated absences are comprised of vacation payable for all city employees and banked overtime (comp time).
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, 2021, all balances are expected to be paid within the following 12 months. For proprietary
funds, the cost of vacation and comp time is recorded as a liability when earned.
Risk management
The city accounts for its general liability and workers’ compensation activities in internal service funds. The funds
are responsible for collecting premiums from other city funds and departments and paying claims, settlements and
insurance premiums. Interfund premiums are based on the insured fund’s claims experience. Incurred but not
reported claims are accrued at year-end, if material.
Unbilled services
Unbilled water, wastewater and solid waste revenues of the enterprise funds are recognized as earned when the
services are used.
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
Infrastructure 10 – 100
Intangible assets 5 – 10
Machinery and equipment 3 – 20
Wastewater treatment facility (including equipment) 5 – 75
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.
{city of
Carlsbad
Notes to the Financial Statements
77
Note 1. Summary of Significant Accounting Policies (continued)
Unearned revenue
The unearned revenue reported in the city’s financial statements represents money received during the current or
previous fiscal years that has not been earned by the city as of the end of the fiscal year. These monies will be
recognized as revenues in subsequent fiscal years, once the revenue has been earned.
Deferred outflows
In addition to assets, the statement of financial position reports a separate section for deferred outflows of
resources. This separate financial statement element, deferred outflows of resources, represents a consumption of
net position that applies to a future period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The city has pension-related and other postemployment benefits related items in
this category.
Deferred inflows
In addition to liabilities, the statement of financial position reports a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net
position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that
time. The city has two types of items that qualify for reporting in this category.
The first item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental
funds report unavailable revenues from two sources: interest on advances, loans and grants. This amount is deferred
and recognized as an inflow of resources in the period that the amount becomes available.
The second item, deferred inflows of resources, is reported in the proprietary funds balance sheet and the Statement
of Net Position. The city has pension related and other postemployment benefits related items in this category.
Interfund transactions
Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal
year is referred to as either “due to/from other funds” (short-term interfund loans), “advances to/from other funds”
(long-term interfund loans) or “due from Successor Agency” (long-term trust fund loan). Any residual balances
outstanding between the governmental activities and business-type activities are reported in the Government-wide
Financial Statements as “internal balances.”
The portion of fund balance associated with amounts that have been disbursed to other funds in the form of long-
term interfund advances have been classified as nonspendable unless the funds associated with repayment of the
advance are otherwise restricted for a specific purpose.
{city of
Carlsbad
Notes to the Financial Statements
78
Note 1. Summary of Significant Accounting Policies (continued)
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 2% of outstanding billings at June 30, 2021, the ambulance billing receivable allowance is equal
to 40% of outstanding billings at June 30, 2021, and the trade and false alarm receivable allowance is equal to 18%
of the total of all outstanding receivable balance at June 30, 2021. 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,
2021, 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.
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.
{city of
Carlsbad
Notes to the Financial Statements
79
Note 1. Summary of Significant Accounting Policies (continued)
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, 2019
Measurement Date (MD) June 30, 2020
Measurement Period (MP) July 1, 2019 to June 30, 2020
Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB asset/liability, deferred outflows of resources and deferred inflows of
resources related to OPEB, and OPEB expense, information about the fiduciary net position of the city’s plan (OPEB
Plan), the assets of which are held by the California Employers’ Retiree Benefit Trust (CERBT), and additions to and
deductions from the OPEB Plan’s fiduciary net position have been determined by an independent actuary. For this
purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms.
Investments are reported at fair value.
Generally accepted accounting principles require that the reported results must pertain to liability and fiduciary net
position information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date (VD) June 30, 2019
Measurement Date (MD) June 30, 2020
Measurement Period (MP) July 1, 2019 to June 30, 2020
Compensated absences, OPEB obligation and net pension liability
The obligations for compensated absences, the OPEB obligation and net pension liability are primarily liquidated
from the General Fund. There is no fixed payment schedule for these liabilities.
{city of
Carlsbad
Notes to the Financial Statements
80
Note 1. Summary of Significant Accounting Policies (continued)
Fair value measurements
Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest
priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as
follows:
Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active
markets.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly, and fair value is determined through the use of models or other valuation methodologies
including:
•Quoted prices for similar assets or liabilities in active markets;
•Quoted prices for identical or similar assets or liabilities in markets that are inactive;
•Inputs other than quoted prices that are observable for the asset or liability; and
•Inputs that are derived principally from or corroborated by observable market data by correlation or other
means.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These
unobservable inputs reflect the city’s own assumptions about the inputs market participants would use in pricing
the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best
information available in the circumstances and may include the city’s own data.
Note 2. Budgetary Data
The city follows these procedures in establishing its budgetary data:
•During May or June, the City Manager submits a proposed operating, strategic digital transformation
investment program and capital improvement program budgets for the fiscal year commencing the
following July 1 to the City Council. The budget includes estimated revenues and proposed expenditures on
a departmental and/or project basis.
•In June, a public hearing is conducted at a City Council meeting to obtain citizens’ comments.
•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, increases in General Liability and Workers’ Compensation Fund claims expenses, and increases in
Encina Wastewater Authority 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 financial 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.
{city of
Carlsbad
Notes to the Financial Statements
81
Note 2. Budgetary Data (continued)
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 the City Council takes action in the
form of a resolution to continue the appropriation into the following fiscal year or, if the appropriation is less than
$100,000, the City Manager may approve to continue the appropriation into the following fiscal year.
For purposes of budgetary presentation, actual revenues have been adjusted to exclude unrealized gains and losses
pursuant to GASB. Actual expenditures have been adjusted to include encumbrances outstanding. Annual budgets
are adopted for the General Fund, special revenue funds except for the Tyler Court Apartments Fund, and a portion
of the Parking-in-Lieu Capital Project Fund (Grants and Other Capital Project Funds). Accordingly, the revenues and
expenditures for the Tyler Court Apartments Fund have been excluded from the budget basis financial statements.
Annual operating budgets are not adopted for the capital projects funds except for the Parking-in-Lieu Fund;
therefore, budget basis financial statements have not been prepared because a comparison of such budgetary
amounts to annual revenues and expenditures is not meaningful.
Note 3. Deposit and Investment Risk
Cash resources of the individual funds are combined to form a pool of cash and investments. The city maintains a
formal Investment Policy Statement, 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 Investment Policy
Statement objectives of safety of principal, adequacy of liquidity, and achievement of an average market rate of
return. The risk disclosures on the next page 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, 2021, the LAIF performance report shows a fair value factor of 1.00008297. 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.
The city and its agencies invest a portion of the funds in an external investment pool known as the California Asset
Management Program (CAMP). CAMP is a California Joint Powers Authority directed by a Board of Trustees, which
is made up of local government finance directors and treasurers.
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.
{city of
Carlsbad
Notes to the Financial Statements
82
Note 3. Deposit and Investment Risk (continued)
As of June 30, 2021, the city had the following investments in its portfolio:
Fair % of Modified
Treasurer's Pool investments Value Total Duration
U.S. agencies:
United States Treasury Bills & Notes 71,633,795 $ C 8.7% 1.637
Federal Home Loan Mortgage Corporation 61,337,368 7.4% 2.862
Federal National Mortgage Association 49,288,221 6.0% 2.987
Federal Home Loan Bank 88,589,949 10.7% 3.399
Federal Farm Credit Bank 87,301,449 10.6% 2.890
Federal Agricultural Corporation 17,636,515 2.1% 3.379
Supranational 32,863,776 4.0% 2.607
Tennessee Valley Authority 1,074,240 0.1% 3.058
Subtotal U.S. agencies 409,725,313 49.6%3.075
Agency backed passthrough securities
Federal Home Loan Mortgage Corporation 14,373,742 1.7% 1.826
Federal National Mortgage Association 1,899,556 0.2% 0.793
Subtotal agency backed passthrough securities 16,273,298 1.9% 1.706
Corporate notes:
Medium-term corporate notes 202,236,011 24.5% 2.021
Subtotal corporate notes 202,236,011 24.5%2.021
Municipal bonds:
Municipal bonds 26,040,598 3.2% 3.575
Subtotal municipal bonds 26,040,598 3.2%3.575
CAMP 1,006,349 0.1%-
LAIF 140,235,814 17.0%-
Certificates of deposit 21,538,503 2.6%-
Cash accounts 9,476,180 1.1%-
Total Treasurer’s Pool 826,532,066 100.0% 2.114
Investments held outside the Treasurer’s Pool
Money market funds 4,677,782 83.2%-
Guaranteed investment contracts 942,770 16.8%-
Subtotal debt service funds/bond proceeds 5,620,552 100.0% 0.000
Other deposits 1,437,414
Petty cash funds 9,270
Total cash and investments 833,599,302 $
Statement of Net Position, Primary Government
Cash and investments 821,002,458 $
Statement of Net Position, Fiduciary Funds
Cash and investments 8,138,015
Restricted cash and investments 4,458,829
Total cash and investments 833,599,302 $
{city of
Carlsbad
Notes to the Financial Statements
83
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, 2021:
Custodial credit risk (investments)
The city uses a third-party bank for its custody and safekeeping service for its investment securities. Custodial credit
risk is the risk that the city will not be able to recover the value of its investments in the event of the custodian’s
failure. All city investments held in custody and safekeeping are held in the name of the city and are segregated from
securities owned by the bank. This is the lowest level of custodial credit risk exposure. Investments are settled on
Delivery vs. Payment (DVP) in accordance with the third-party custodial agreement.
Custodial credit risk (deposits)
The city maintains cash accounts at one major banking institution. At the conclusion of each business day and if
advantageous to the city, balances in these accounts are “swept” into overnight pooled investments, which are
pooled into funds collateralized with U.S. government securities (guaranteed) or U.S. agency securities (government-
sponsored). The California Code authorizes both of these types of investments. Amounts up to $250,000 are Federal
Deposit Insurance Corporation (FDIC) insured. All funds in non-interest-bearing transaction accounts are fully insured
under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Concentration credit risk
Concentration credit risk is the heightened risk of potential loss when investments are concentrated in one issuer.
The California state code and the city’s Investment Policy Statement require that total investments in medium-term
corporate notes of all issuers not exceed 30% of the portfolio.
Level 1 Level 2 Level 3 Total
U.S. treasury bills & notes 71,633,795 $ -$ -$ 71,633,795 $
U.S. agencies & supranational - 338,091,518 - 338,091,518
Agency backed passthrough securities - 16,273,298 - 16,273,298
Medium-term corporate notes - 202,236,011 - 202,236,011
Municipal bonds - 26,040,598 26,040,598
Certificates of deposit - 21,538,503 - 21,538,503
Subtotal investments reported at fair value 71,633,795 $ 604,179,928 $ -$ 675,813,723
Cash and investments not reported at fair value
Cash accounts 9,476,180
CAMP 1,006,349
LAIF 140,235,814
Money market funds 4,677,782
Guaranteed investment contracts 942,770
Other deposits 1,437,414
Petty cash funds 9,270
Total cash and investments 833,599,302 $
Fair Value Hierarchy
{city of
Carlsbad
Notes to the Financial Statements
84
Note 3. Deposit and Investment Risk (continued)
For concentration of investments, the city’s Investment Policy Statement requires that no more than 5% of
investments in corporate notes or passthrough securities be in any one issuer. There is no similar requirement in
either the state code or the city’s Investment Policy Statement for U.S. agencies. As of June 30, 2021, 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,
2021, approximately 18% of the investments in medium-term corporate notes did not have one of these two credit
ratings. These investments were initially made when the credit ratings were AA or higher. California state code and
the city’s Investment Policy Statement allow the city Treasurer to determine the course of action to correct
exceptions to the Investment Policy Statement. It is the intent of the city treasurer to hold these investments in the
portfolio until maturity unless events indicate they should be sold. The default credit risk for corporate notes with a
credit rating of single A is considered by the city Treasurer to be within acceptable limits for purposes of holding to
maturity. A credit rating of single A is within state code purchase requirements.
The Local Agency Investment Funds (LAIF) is an external investment pool managed by the California State Treasurer.
The California Asset Management Program (CAMP) is an external investment pool managed by PFM Asset
Management LLC. These 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 to be minimal. CAMP is rated AAA by Standard
and Poor’s Investor Services.
Money market funds held by bond trustees are rated AAA. Investment contracts held by bond trustees are not rated
by rating agencies.
{city of
Carlsbad
Notes to the Financial Statements
85
Note 3. Deposit and Investment Risk (continued)
The table below is the minimum rating (where applicable) of the California state code, the city’s investment policy,
or debt agreements, and the actual rating at June 30, 2021 for each investment type by S&P Investor’s Service:
Note for this schedule:
Certificates of Deposit are FDIC insured.
As of June 30, 2021, five investments in medium term notes had a credit rating of a single A (A) which is below the
double A (AA) rating required by the Investment Policy. These investments were initially made in accordance with
the city's Investment Policy. California state code and the city's Investment Policy allow the City Treasurer to
determine the course of action to correct exceptions to the policy. It is the intent of the City Treasurer to hold these
assets in the portfolio until maturity unless events indicate a sale should be made. These investments are paying
interest at the required times and their principal is considered secure.
Minimum Exempt
Legal from Not
Investment Type Total Rating Disclosure AAA AA A Rated
Treasury securities 71,633,795$ N/A 71,633,795$ -$ -$ -$ -$
Federal agency securities 338,091,518 N/A - - 338,091,518 - -
Agency backed passthrough securities 16,273,298 AA - 16,273,298 - - -
Medium term notes 202,236,011 AA - 27,808,172 138,239,224 36,188,615 -
Municipal bonds 26,040,598 AA - 3,487,088 22,553,510 -
California Asset Management Program (CAMP)1,006,349 N/A - 1,004,415 - - -
Local Agency Investment Fund (LAIF)140,235,814 N/A - - - - 140,235,814
Certificates of deposit 21,538,503 N/A - - - - 21,538,503
Cash accounts 9,476,180 N/A - - - - 9,476,180
Other deposits 1,437,414 N/A - - - - 1,437,414
Petty cash funds 9,270 N/A - - - - 9,270
Investments with fiscal agent
Money market funds 4,677,782 AA-m - 4,677,782 - - -
Guaranteed investment contracts 942,770 N/A - - - - 942,770
833,599,302$ 71,633,795$ 53,250,755$ 498,884,252$ 36,188,615$ 173,639,951$
Rating as of Year End
{city of
Carlsbad
Notes to the Financial Statements
86
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, 2021, the portfolio had a 1.02% gain in market
value based on cost.
The city’s Investment Policy Statement 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, 2021, the modified duration of the portfolio was 2.114. 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 1.0% change in market interest rates occurs, a 1.5% 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, 2021, maturities within one year exceeded the required minimum of $292,643,525 (two-
thirds of current year operating budget for the city per the Fiscal Year 2020-21 operating budget adopted
by the City Council).
3. As of June 30, 2021, the weighted average maturity of the LAIF underlying debt securities was 191 days. As
of June 30, 2021, LAIF had a 0.4806% loss in market value.
4. As of June 30, 2021, the city’s investment portfolio included $1,500,000 of callable step-up notes at par.
{city of
Carlsbad
Notes to the Financial Statements
87
Note 4. Due To and From Other Funds
The following table shows amounts due from funds within the city to other funds within the city at June 30, 2021.
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, 2021:
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 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.
3 The advance between the Public Facilities Fees Fund and the Park Development Funds is estimated to be repaid
at build-out.
4 The advance between the Affordable Housing Fund and the Section 8 Rental Assistance Fund is a short-term
advance and will be repaid as rental payments due on port-in rental participants is collected by the city from the
participating housing agencies.
Due to Due from
Other Funds Other Funds
General Fund 993,748 $ 1 300,012 $
Other Governmental Funds:
Community Development Block Grant 300,012 2 -
Enterprise Funds:
Carlsbad Municipal Water District - 1,048,262
Wastewater 46,534 1 -
Nonmajor Solid Waste 7,980 1 -
Totals 1,348,274 $ 1,348,274 $
Advances From Advances To Amount
General Fund Other Governmental Funds:
Habitat Mitigation 1,253,825$ 1
Other Governmental Funds:Other Governmental Funds:
CFD No. 1 Traffic Impact Projects 1,525,948 2
Public Facilities Construction Park Development 5,650,000 3
Affordable Housing Section 8 Rental Assistance 94,116 4
8,523,889$
{city of
Carlsbad
Notes to the Financial Statements
88
Note 6. Capital Assets
Capital asset activity was as follows for the year ended June 30, 2021:
Balance at Balance at
June 30, 2020 Increases Decreases June 30, 2021
Governmental activities:
Capital assets, not being depreciated:
Land (including right-of-way)155,896,231$ 4,723,365$ -$ 160,619,596$
Construction in progress 16,236,469 19,187,308 (17,269,529) 18,154,248
Total capital assets,
not being depreciated 172,132,700 23,910,673 (17,269,529) 178,773,844
Capital assets, being depreciated:
Buildings 138,281,470 - - 138,281,470
Improvements, other than buildings 93,825,851 5,063,874 - 98,889,725
Machinery and equipment 51,645,979 5,996,727 (5,422,027) 52,220,679
Infrastructure 734,252,385 4,004,939 - 738,257,324
Intangible assets 5,017,448 2,203,989 (737,789) 6,483,648
Total capital assets,
being depreciated 1,023,023,133 17,269,529 (6,159,816) 1,034,132,846
Less accumulated depreciation for:
Buildings (45,782,463) (2,859,311) - (48,641,774)
Improvements, other than buildings (35,960,421) (3,685,622) - (39,646,043)
Machinery and equipment (31,479,443) (3,753,574) 5,284,255 (29,948,762)
Infrastructure (286,933,074) (15,074,482) - (302,007,556)
Intangible assets (3,721,147) (28,258) 421,594 (3,327,811)
Total accumulated
depreciation (403,876,548) (25,401,247) 5,705,849 (423,571,946)
Total capital assets
being depreciated, net 619,146,585 (8,131,718) (453,967) 610,560,900
Governmental activities
capital assets, net 791,279,285$ 15,778,955$ (17,723,496)$ 789,334,744$
{city of
Carlsbad
Notes to the Financial Statements
89
Note 6. Capital Assets (continued)
Balance at Balance at
June 30, 2020 Increases Decreases June 30, 2021
Business-type activities:
Capital assets, not being depreciated:
Land (including right-of-way)9,330,718$ -$ -$ 9,330,718$
Construction in progress 24,786,724 21,094,581 (24,500,954) 21,380,351
Total capital assets,
not being depreciated 34,117,442 21,094,581 (24,500,954) 30,711,069
Capital assets, being depreciated:
Buildings 41,103,821 71,646 - 41,175,467
Improvements, other than buildings 53,224,688 285,437 (377) 53,509,748
Machinery and equipment 13,890,645 73,312 - 13,963,957
Infrastructure 379,576,446 22,894,361 - 402,470,807
Wastewater treatment facility 60,308,682 2,677,411 (560,944) 62,425,149
Total capital assets,
being depreciated 548,104,282 26,002,167 (561,321) 573,545,128
Less accumulated depreciation for:
Buildings (12,238,699) (914,234) - (13,152,933)
Improvements, other than buildings (41,006,047) (3,088,790) 287 (44,094,550)
Machinery and equipment (3,133,498) (2,066,255) - (5,199,753)
Infrastructure (120,598,237) (6,784,611) - (127,382,848)
Wastewater treatment facility (38,765,741) (993,643) 560,944 (39,198,440)
Total accumulated
depreciation (215,742,222) (13,847,533) 561,231 (229,028,524)
Total capital assets
being depreciated, net 332,362,060 12,154,634 (90) 344,516,604
Business-type activities
capital assets, net 366,479,502$ 33,249,215$ (24,501,044)$ 375,227,673$
{city of
Carlsbad
Notes to the Financial Statements
90
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, 2021:
Governmental activities:
General government 912,571$
Public safety 1,448,515
Community services 4,915,154
Public works 15,412,020
Capital assets held by the internal service funds
(charged to various functions based on
their usage of the assets)2,712,987
Total depreciation expense - governmental activities 25,401,247$
Business-type activities:
Carlsbad Municipal Water District 5,914,562$
Wastewater 4,355,958
Golf course 3,577,013
Total depreciation expense - business-type activities 13,847,533$
Principal Principal
Balance at Balance at Due Within
July 1, 2020 Increases Decreases June 30, 2021 One Year
Governmental activities:
Obligations under capital lease 155,922 $ -$ 155,922 $ -$ -$
Total governmental activities 155,922 $ -$ 155,922 $ -$ -$
Principal Principal
Balance at Balance at Due Within
July 1, 2020 Increases Decreases June 30, 2021 One Year
Business-type activities:
Loans payable 15,326,593 $ 43,714 $ 1,620,408 $ 13,749,899 $ 1,658,821 $
Total business type activities 15,326,593 $ 43,714 $ 1,620,408 $ 13,749,899 $ 1,658,821 $
{city of
Carlsbad
Notes to the Financial Statements
91
Note 7. Long-term Debt (continued)
No long-term governmental debt exists at June 30, 2021. Business-type long-term debt at June 30, 2021 is comprised
of the following issues:
Balance at
Business-type long-term debt June 30, 2021
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
$586,023 to $631,082 on June 1 of each year through 2025, interest payable on June 1 each
year at 2.5% per annum. Payable from recycled water user fees.2,433,468$
2006 Carlsbad Municipal Water District loan agreement with the State Water Resources
Control Board totaling $19,382,546. Principal is due in varying amounts ranging from
$1,072,798 to $1,201,977 on April 1 of each year through 2027, interest payable on April 1
of each year at 2.3% per annum. Payable from recycled water user fees. 6,818,453
2014 Carlsbad Municipal Water District loan agreement, as revised, with the State Water Resources
Control Board authorized to $22,150,000. Principal and interest will not be due until Dec. 2023.
Interest is payable on Dec. 31 of each year at 1.0% per annum. Principal due under the current
amortization schedule ranges from $129,308 to $172,563. Payable from recycled water user fees.4,497,978
Subtotal business-type long-term debt 13,749,899
Less current portion (1,658,821)
Total long-term portion of business-type debt 12,091,078 $
{city of
Carlsbad
Notes to the Financial Statements
92
Note 7. Long-term Debt (continued)
The aggregate maturities of long-term debt are as follows:
The aggregate maturities for the business-type activities reflect a recent $43,714 increase in the state water loan.
The city is currently drawing down loan proceeds from an authorized $22.1 million for the expansion of the recycled
water facility. The loan amount will continue to adjust as future draws are made.
Note 8. Rate Covenants and Pledged Revenue
Rate covenants
The CMWD loan agreements with the State Water Resources Control Board requires that CMWD set its charges for
services and rates for fees each year at rates sufficient to produce net revenues (after paying the operating and
maintenance expenses of CMWD, excluding depreciation) of at least one times debt service for that year. All of the
water 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, 2021.
Pledged revenue
The city has a number of debt issuances outstanding that are collateralized by the pledging of certain revenues. The
purpose for which the proceeds of the related debt issuances were utilized are disclosed in the debt descriptions of
the accompanying notes. For the current year, debt service payments as a percentage of the pledged gross revenue
(net of certain expenses where so required by the debt agreement) are indicated in the table below. These
percentages also approximate the relationship of debt service to pledged revenues for the remainder of the term of
the commitment:
Year ended June 30: Principal Interest
2022 1,658,821 $ 217,661 $
2023 1,698,146 178,336
2024 1,867,713 183,057
2025 1,910,220 140,550
2026 1,306,860 97,050
2027-2031 1,881,566 219,496
2032-2036 714,255 157,186
2037-2041 750,689 120,751
2042-2046 788,982 82,459
2047-2051 829,228 42,213
2052-2053 343,419 5,159
13,749,899 $ 1,443,918 $
Business-type Activities
Description of Pledged Annual Amount of Pledged Annual Debt Service Pledged Revenue as a
Revenue Revenue (net of expenses)Payments Percentage of Debt
Water revenues 6,367,037$ 1,876,482$ 339%
{city of
Carlsbad
Notes to the Financial Statements
93
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, 2021, the city has two series of assessment district bonds outstanding in the amount of $27,685,000.
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’ custodial funds.
Special tax bonds
As of June 30, 2021, the city has two series Community Facilities District (CFD) bonds outstanding in the amount of
$18,050,000. 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’ custodial 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, 2021 is $16,250,000.
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.
{city of
Carlsbad
Notes to the Financial Statements
94
Note 10. Fund Balances
The following is a summary of the components of fund balances as of June 30, 2021:
Community General
Facilities Capital
Fund Balances General District No. 1 Construction
Nonspendable:
Inventory 10,564 $ -$ -$
Prepaid items 649,970 - -
Loans receivable 1,531,162 - -
Advances to other funds 1,253,825 - -
Totals 3,445,521 - -
Restricted for:
Affordable housing - - -
Lighting and landscaping districts - - -
Capital projects - 96,709,981 -
General government - - -
Public safety - - -
Community services - - -
Totals - 96,709,981 -
Committed to:
Community activity grants 1,000,000 - -
Totals 1,000,000 - -
Assigned to:
General government 13,388,622 - -
Public safety 2,269,806 - -
Community services 5,084,504 - -
Public works 3,273,135 - -
Deposits 10,724,357 - -
CalPERS Contribution 6,400,000 - -
City Council Goals 7,194,499 - -
Capital projects 7,780,056 - 41,842,109
Totals 56,114,979 - 41,842,109
Unassigned:
Unassigned 89,624,207 - -
Economic uncertainty 9,635,909 - -
Totals 99,260,116 - -
Total fund balances 159,820,616 $ 96,709,981 $ 41,842,109 $
Governmental Funds
{city of
Carlsbad
95
Other
Infrastructure Park Governmental
Replacement Development Funds Total
-$ -$ -$ 10,564 $
- - 856 650,826
- - - 1,531,162
- - - 1,253,825
- - 856 3,446,377
- - 40,988,135 40,988,135
- - 9,225,568 9,225,568
- 8,497,420 107,428,439 212,635,840
- -941,429 941,429
- -488,501 488,501
- - 4,820,668 4,820,668
- 8,497,420 163,892,740 269,100,141
- - - 1,000,000
- - - 1,000,000
- - - 13,388,622
- - - 2,269,806
- - - 5,084,504
- - - 3,273,135
- - - 10,724,357
- - - 6,400,000
- - - 7,194,499
124,364,469 - - 173,986,634
124,364,469 - - 222,321,557
- - (228,197) 89,396,010
- - - 9,635,909
- - (228,197) 99,031,919
124,364,469 $ 8,497,420 $ 163,665,399 $ 594,899,994 $
Notes to the Financial Statements
96
Note 10. Fund Balances (continued)
Fund balances are reported in the fund statements in the following classifications:
Nonspendable Fund Balance
Nonspendable Fund Balance 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 City Council action
limiting the use of the funds is separate from the action (legislation) that created (enables) the funding source, then
it is committed, not restricted. The city considers a resolution to constitute the formal action of the City Council that
is necessary to commit fund balance.
Assigned Fund Balance – this includes amounts that are designated or expressed by the City Council, but does not
require a formal action like a resolution or ordinance. The City Council has delegated the authority for the City
Manager to carry forward certain unspent budget amounts for specific purposes if the amount is equal to or less
than $100,000 to the next fiscal year. The City Council has authorized, through a resolution, that all outstanding
encumbrances at the end of the fiscal year and certain unspent budgeted amounts above $100,000 to be carried
forward into the next fiscal year. The assigned fund balance also includes an additional discretionary contribution to
CalPERS and a transfer to the city’s long-term capital funds approved by the City Council through a resolution, and
deposits that are required to be returned to developers. These amounts are shown as assigned fund balance at the
end of the fiscal year:
• General Government – Unspent funds for innovation projects; leadership team training; Faraday Center offices
ClickShare installation; conference registration; and Program management Certificate training.
• Public Safety – Homeless outreach team vehicles; reserve aerial ladder truck; fire station computers; fire station
iPad replacements; Fire Department wellness pilot program; Fire Department utility terrain vehicle; firefighting
foam mandate costs; self-contained breathing apparatus storage cylinder mandate costs; Fire Department office
furniture; fire records online payment form; Fire Department digital dashboard equipment; temporary pet
shelter program; miscellaneous programming; barriers for the Village Faire; radio encryption installation; Police
Department Nakoa wellness program. Encumbrances rolled forward include fire apparatus replacement and
encryption software upgrades for radios, among other items.
• Community Services – unspent developer deposits; unspent planning grant funds; unspent Library & Cultural
Arts grant funds; environmental analysis for the Housing Element; Mills Act creation; digital matrix processor;
eBulletin Board software upgrade; laptop purchases; arts education consultant; arts maintenance contract;
office renovation and security; Leo Carrillo market lighting; property boundary surveys; and master plan costs.
Encumbrances rolled forward include citywide parks restroom custodial maintenance services agreement;
Interfaith community services; rental assistance; building plan check consultant; planning consultant for
developing design review standards; landscape plan check and inspection agreement; and other professional
services and items.
{city of
Carlsbad
Notes to the Financial Statements
97
Note 10. Fund Balances (continued)
• Public Works – fall safety system. Encumbrances rolled forward include electrical maintenance services
agreement; mechanical/HVAC agreement; vehicle replacements; citywide street sweeping services; citywide
facility custodial maintenance services; Urban Corps of San Diego citywide litter removal and storm drain
inspection and cleaning services; solid waste, recycling, and organics management services among other items.
• City Council Goals – Fire Department Standards of Cover workplan execution, including two ambulances and
additional paramedic firefighters; homeless workplan implementation, including the hotel/motel voucher
program; and a citizens committee.
• Deposits to be reimbursed
• CalPERS ADC – CalPERS Additional Discretionary Contribution
• COVID-19 – Unspent COVID-19 Economic Revitalization Funds. Encumbrances rolled forward include small
business loan services, and website content development and social media management services.
• Capital projects – City Council assigned general fund surplus budget from fiscal year 2020-21 to fund the city’s
long-term capital project fund.
Unassigned Fund Balance – this includes the remaining spendable amounts which are not included in one of the
other classifications. The General Fund is the only fund that reports a positive unassigned fund balance amount.
It is the city’s policy that restricted resources will be applied first, followed by (in order of application) committed,
assigned, and unassigned resources, in the absence of a formal policy adopted by the City Council.
Note 11. General Fund Balance Policy
Pursuant to Council Policy 74, the city is committed to maintaining General Fund reserves at a target of 40% of
General Fund annual operating expenditures. The total reserve level is calculated using the prior fiscal years adopted
General Fund budgeted expenditures. This reserve is for unforeseen emergencies or catastrophic impacts upon the
city. Reserves are evaluated annually in conjunction with the development of the city’s annual operating budget
process. Staff report to the City Council annually on the status of the reserve levels relative to this policy.
Note 12. Accumulated Fund Deficits/Negative Net Position
The following funds reported deficits in fund balances or net position as of June 30, 2021:
The deficit in the Habitat and Agricultural Management Fund is the result of the General Fund advancing money for
the purchase of mitigation credits in a prior fiscal year. The advance is returned to the General Fund in periodic
payments from developer impact fees collected in the Habitat and Agricultural Management Fund.
Deficit Balance
Special Revenue Funds:
Habitat and Agricultural Management (228,197)$
{city of
Carlsbad
Notes to the Financial Statements
98
Note 13. Interfund Transfers
Interfund transfers for the year ended June 30, 2021, 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 Council
authorizations; and (3) move excess cash collected for future capital replacement in accordance with Council
authorization.
The transfer from the General Fund to the Golf Course Fund totaling $47,031,506 was due to the recognition that
the repayment of advances from the General Fund to the Golf Course Fund loans from initial golf course construction
and subsequent operating costs is not scheduled to happen in the near and foreseeable future.
Note 14. Risk Management
The city is exposed to various risks of loss related to its operations, including losses associated with errors and
omissions and injuries to employees and members of the public. The city uses a Risk Management Self-Insurance
Fund and a Workers’ Compensation Fund (all internal service funds) to account for and finance its uninsured risks of
loss. All other funds of the city make payments to these funds based on annual estimates of the amounts needed to
pay prior and current year claims and to establish a reserve for catastrophic losses.
Transfers Out Amount
General Fund Gas Tax Fund 10,000$
Capital Project Funds:
General Capital Construction General Fund 4,500,000
Infrastructure Replacement General Fund 4,500,000
Enterprise Funds:
Storm Water Protection General Fund 281,040
Golf Course General Fund 47,031,506
Internal Service Funds:
Fleet Maintenance and Replacement Storm Water Protection 40,000
Special Revenue Funds:
Financing Districts General Fund 700,000
Section 8 Rental Assistance Affordable Housing 50,000
57,112,546$
Transfers In
{city of
Carlsbad
Notes to the Financial Statements
99
Note 14. Risk Management (continued)
Beginning July 1, 2019, the city joined the California Insurance Pool Authority (CIPA) for excess general liability
coverage. This coverage was purchased directly through the pool’s manager, Kiser & Company. Under this program,
the city’s coverage is a maximum of $43,000,000 per occurrence with a self-insured retention of $1,000,000. CIPA
has been in existence since 1978. At June 30, 2021, the unrestricted fund equity for the Risk Management Self-
Insurance Fund was $948,337. Funds used by the Risk Management Fund to liquidate the claims liability
predominantly come from the General Fund (81.36%), the Water Fund (6.64%), the Solid Waste Fund (3.72%) and
the Wastewater Fund (2.97%).
The city is self-insured for workers’ compensation claims for claims up to $1,250,000 and insured by Safety National
thereafter and up to statutory limits. At June 30, 2021, the unrestricted fund equity for the Workers’ Compensation
Self-Insurance Fund was $2,915,297. Funds used by the Workers’ Compensation Fund to liquidate the claims liability
predominantly come from the General Fund (95.68%), the Water Fund (1.59%) and the Wastewater fund (0.71%).
The estimated claims payable reported at June 30, 2021 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 2019-20 and 2020-21 for the two internal service
funds are as follows:
Expense and
Beginning Changes in Claim Ending
Balance Estimates Payments Balance
Risk Management Fund:
2019-20 2,897,988 1,284,264 718,182 3,464,070
2020-21 3,464,070 1,297,338 1,140,040 3,621,368
Workers’ Compensation Fund:
2019-20 10,197,793 2,993,863 2,335,294 10,856,362
2020-21 10,856,362 2,637,645 2,969,354 10,524,653
Claims
{city of
Carlsbad
Notes to the Financial Statements
100
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, 2021, the undivided interest of each member agency in the various components of the Encina Water
Pollution Control Facilities aggregated as follows:
City of Vista 25%
City of Carlsbad 24%
Vallecitos Water District 23%
Leucadia Wastewater District 17%
Buena Sanitation District 7%
City of Encinitas 4%
EWA does not recognize net income or loss. Net operating expenditures in excess of users’ assessments are treated
as accounts receivable on EWA’s books and charged to users’ accounts in the following year. Conversely, users’
assessments in excess of net operating expenditures are treated as a liability and credited against users’ accounts,
also in the following year. Under this basis, net operating loss (before member billings) for EWA totaled $47,551 in
fiscal year 2019-20. The financial statements of EWA can be obtained 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.
{city of
Carlsbad
Notes to the Financial Statements
101
Note 16. Pension Plan
Plan description, benefits provided and employees covered
All qualified permanent and probationary employees are eligible to participate in the city’s Safety (sworn police and
fire) and Miscellaneous (all other) Plans (the Plans), agent multiple-employer defined benefit pension plans
administered by CalPERS, which acts as a common investment and administrative agent for its participating member
employers. A full description of the Plans regarding number of employees covered, benefit provisions, assumptions
(for funding, but not accounting purposes), and membership information are listed in the Plan’s June 30, 2020
Annual Actuarial Valuation Reports (funding valuations). Details of the benefits provided can be obtained in
Appendix B of the Actuarial Valuation Report. This report and CalPERS’ audited financial statements are publicly
available reports that can be obtained at CalPERS’ website.
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, 2021, are
summarized as follows:
On or after
Prior to November 28, 2011 to On or after
Hire date November 28, 2011 December 31, 2012 January 1, 2013
Benefit formula 3% @ 60 2% @ 60 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 60 50 - 63 52 - 67
Monthly benefits as a % of eligible compensation 2.0% to 3.0% 1.092% to 2.418% 1.0% to 2.5%
Required employee contribution rates 8.00%7.00%7.50%
Required employer contribution rates 15.119%12.601%8.411%
$5,486,476
Miscellaneous
Required employer payment of unfunded liability:
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 9.00%9.00%13.50%
Required employer contribution rates 23.412%20.592%13.905%
Required employer payment of unfunded liability:$4,008,843
Safety
{city of
Carlsbad
Notes to the Financial Statements
102
Note 16. Pension Plan (continued)
Employees covered
As of June 30, 2019, the following employees were covered by the benefit terms for each Plan:
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, 2019 (the measurement date), the
average active employee contribution rate ranged from 7.0% to 8.0% of annual pay for miscellaneous employees
and 9.0% to 13.5% of annual pay for safety employees, and the average employer’s contribution rate is 12.787% of
annual payroll for miscellaneous employees and 21.401% 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
The June 30, 2019 valuation was rolled forward to determine the June 30, 2020 total pension liability, based on the
following actuarial methods and assumptions:
Actuarial cost method Entry Age Normal in accordance with the requirements of GASB 68
Actuarial assumptions
Discount rate 7.15%
Inflation 2.50%
Salary increases Varies by entry age and service
Mortality rate table* Derived using CalPERS' membership data for all funds
Post-retirement benefit increase Contract COLA up to 2.5% until Purchasing Power Protection Allowance
Floor on purchasing power applies; 2.50% thereafter
* The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based
on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and post-retirement
mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the
Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of
Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.
Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 588 258
Inactive employees or beneficiaries currently not yet receiving benefits 497 101
Active employees 525 199
Total 1,610 558
{city of
Carlsbad
Notes to the Financial Statements
103
Note 16. Pension Plan (continued)
Discount rate
The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members will be made at the current member
contribution rates and that contributions from employers will be made at statutorily required rates, actuarially
determined. Based on those assumptions, the Plans’ fiduciary net position was projected to be available to make all
projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on
plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Long-term expected rate of return
The long-term expected rate of return on pension plan investments was determined using a building-block method
in which expected future real rates of return (expected returns, net of pension plan investment expense and
inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term
market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’
asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the
long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and
long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by
calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash
flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set
equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The expected real rates of return by asset class are as follows:
Current Target Real Return Real Return
Asset Class¹Allocation Years 1 - 10²Years 11+3
Public equity 50.0%4.80%5.98%
Global fixed income 28.0 1.00 2.62
Inflation sensitive assets 0.0 0.77 1.81
Private equity 8.0 6.30 7.23
Real estate 13.0 3.75 4.93
Liquidity 1.0 0.00 (0.92)
¹ In the System's Consolidated Annual Financial Report, fixed income is included in global debt securities;
liquidity is included in short-term investment; inflation assets are included in both global equity
securities and global debt securities.
2 An expected inflation of 2.0% used for this period.
3 An expected inflation of 2.92% used for this period.
{city of
Carlsbad
Notes to the Financial Statements
104
Note 16. Pension Plan (continued)
Pension plan fiduciary net position
CalPERS issues a publicly available financial report that includes financial statements and required supplementary
information. That report may be obtained on the California Public Employees’ Retirement System website at
www.calpers.ca.gov under forms and publications.
Changes in net pension liability
The following tables show the changes in net pension liability recognized over the measurement period.
Miscellaneous Safety
Plan Plan Total
Net pension liability 87,678,609$ 78,794,853$ 166,473,462$
Deferred outflows of resources - pension related items 26,795,767 19,376,937 46,172,704
Deferred inflows of resources - pension related items (536,120) (355,388) (891,508)
Pension expense 7,160,510 12,658,758 19,819,268
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at 6/30/2019 401,846,361$ 322,051,935$ 79,794,426$
Changes recognized for the measurement period:
• Service cost 7,748,623 - 7,748,623
• Interest on the total pension liability 28,392,127 - 28,392,127
• Differences between expected and actual experience 1,167,225 - 1,167,225
• Changes of assumptions - - -
• Plan to plan resource movement - - -
• Contributions from the employer - 10,637,969 (10,637,969)
• Contributions from employees - 3,338,003 (3,338,003)
• Net investment income - 15,901,834 (15,901,834)
• Benefit payments1 (19,590,424) (19,590,424) -
• Administrative expense - (454,014) 454,014
• Other miscellaneous income/(expense)- - -
Net changes during fiscal year 2019-20 17,717,551 9,833,368 7,884,183
Balance at 6/30/2020 419,563,912$ 331,885,303$ 87,678,609$
1 Includes refunds of employee contributions
Increase (Decrease)Miscellaneous Plan
{city of
Carlsbad
Notes to the Financial Statements
105
Note 16. Pension Plan (continued)
Sensitivity of the net pension liability to changes in the discount rate
The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount
rate of 7.15%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1
percentage-point lower (6.15%) or 1 percentage-point higher (8.15%) than the current rate:
Recognition of gains and losses
Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized
in pension expense systematically over time.
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at 6/30/2019 314,256,438$ 243,910,793$ 70,345,645$
Changes recognized for the measurement period:
• Service cost 6,578,451 - 6,578,451
• Interest on the total pension liability 22,410,699 - 22,410,699
• Differences between expected and actual experience 4,071,899 - 4,071,899
• Changes of assumptions - - -
• Plan to plan resource movement - - -
• Contributions from the employer - 10,321,371 (10,321,371)
• Contributions from employees - 2,581,027 (2,581,027)
• Net investment income - 12,053,297 (12,053,297)
• Benefit payments1 (16,362,437) (16,362,437) -
• Administrative expense - (343,854) 343,854
• Other miscellaneous income/(expense)- - -
Net changes during fiscal year 2019-20 16,698,612 8,249,404 8,449,208
Balance at 6/30/2020 330,955,050$ 252,160,197$ 78,794,853$
1 Includes refunds of employee contributions
Increase (Decrease)
Safety Plan
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.15%)Rate (7.15%)(8.15%)
Plan's Net Pension Liability - Miscellaneous 141,847,666$ 87,678,609$ 42,773,187$
Plan's Net Pension Liability - Safety 124,400,833$ 78,794,853$ 41,465,389$
{city of
Carlsbad
Notes to the Financial Statements
106
Note 16. Pension Plan (continued)
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining
amounts are categorized as deferred inflows and deferred outflows of resources related to pensions and are to be
recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Difference between projected and actual
earnings on pension plan investments
5-year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining
service lifetime (EARSL) of all members that are provided with
benefits (active, inactive, and retired) as of the beginning of the
measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by
the total number of plan participants (active, inactive, and retired).
The EARSL for the Miscellaneous Plan for the June 30, 2020 measurement date is 3.2 years, which was obtained by
dividing the total service years of 5,119 (the sum of remaining service lifetimes of the active employees) by 1,606
(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, 2020 measurement date is 4.7 years, which was obtained by dividing
the total service years of 2,624 (the sum of remaining service lifetimes of the active employees) by 558 (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, 2020 (the measurement date), the city recognized a pension expense
of $19,819,268 for the Plans.
As of the June 30, 2020 measurement date, the city reports other amounts for the Miscellaneous Plan as deferred
outflows and deferred inflows of resources related to pensions as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 16,501,759$ -$
Difference between expected and actual experience 1,632,200 (188,998)
Changes of assumptions - (166,390)
Net difference between projected and actual earnings on pension plan investments 3,491,543 -
Total 21,625,502$ (355,388)$
{city of
Carlsbad
Notes to the Financial Statements
107
Note 16. Pension Plan (continued)
As of the June 30, 2020 measurement date, 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, $16,501,759 reported as deferred outflows of resources related to employer
contributions subsequent to the measurement date, and for the Safety Plan, $14,253,194 reported as deferred
outflows of resources related to employer contributions subsequent to the measurement date, will be recognized
as a reduction of the net pension liability in the fiscal year ended June 30, 2022. Other amounts reported as deferred
outflows of resources and deferred inflows of resources related to the Miscellaneous Plan pensions will be
recognized as pension expense as follows:
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Safety
Plan pensions will be recognized as pension expense as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 14,253,194$ -$
Difference between expected and actual experience 5,461,988 (92,009)
Changes of assumptions 2,173,295 (444,111)
Net difference between projected and actual earnings on pension plan investments 2,658,725 -
Total 24,547,202$ (536,120)$
Deferred
Measurement Period Outflows/(Inflows) of
Ended June 30:Resources
2021 (20,906)$
2022 1,573,196
2023 1,840,289
2024 1,375,776
2025 -
Thereafter -
Deferred
Measurement Period Outflows/(Inflows) of
Ended June 30:Resources
2021 3,198,758$
2022 2,398,823
2023 2,512,576
2024 1,647,731
2025 -
Thereafter -
{city of
Carlsbad
Notes to the Financial Statements
108
Note 17. Other Postemployment Benefits (OPEB)
The city offers other postemployment benefits in the form of health benefits to two employee groups: City of
Carlsbad employees and former CMWD employees. The majority of city and former CMWD employees are under
the city defined benefit agent multiple-employer plan.
Benefit descriptions by employee group
Former Carlsbad Municipal Water District (CMWD) employees
The benefit plan is for active and retired employees who were employed with CMWD at the time CMWD was
acquired by the city. Per Resolution No. 614, all former employees of CMWD (including dependents) are eligible for
postretirement health care benefits if they voluntarily retire after the age of 50, with no less than five years of service
and whose age, combined with years of service, equals 70 or more.
The city pays for 100% of the health insurance premiums 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 CalPERS.
City of Carlsbad employees
City employees are offered health insurance coverage under the Public Employees’ Medical and Hospital Care Act
(PEMHCA), which is administered by CalPERS. Under PEMHCA, the city is required to pay a small portion of the
monthly medical premiums of retired employees (considered a subsidy), if the retired employees continue their
medical coverage under PEMHCA. Surviving spouses and domestic partners of eligible retirees are eligible for the
city subsidy. Surviving spouses and 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 2019 $136.00
Calendar Year 2020 139.00
Calendar Year 2021 143.00
Thereafter, the subsidy is adjusted annually to reflect changes in the medical component of the Consumer Price
Index.
California Public Employer’s Retiree Benefit Trust Program
The city is participating in the California Employer’s Retiree Benefit Trust Program (CERBT) through irrevocable trust
agreements for both plans. CERBT is administered by CalPERS. The city’s OPEB fiduciary net position is included in
the CERBT Schedule of Changes in Fiduciary Net Position by Employer report. That report may be obtained on the
California Public Employees’ Retirement System website at www.calpers.ca.gov under forms and publications.
{city of
Carlsbad
Notes to the Financial Statements
109
Note 17. Other Postemployment Benefits (continued)
Employees covered
As of the June 30, 2020, the measurement date, the following employees were covered by the benefit terms for
each benefit tier:
Contributions
The obligation of CMWD to contribute to the CMWD plan is established and may not be amended by the CMWD
Board. The obligation of the city to contribute to the city plan is established, and as long as the city is a member of
PEMCHA, may not be amended by the City Council. The City Council does have the authority to change health
insurance coverage outside of PEMHCA, which could change the funding obligation for city employees.
Employees are not required to contribute to the plan. The city and CMWD’s contributions are based on the
actuarially determined contribution (ADC), an amount actuarially determined in accordance with the parameters of
GASB. The ADC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost
each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years
on a “closed” basis. The city’s and CMWD’s contributions are as follows:
Inactive employees or beneficiaries currently receiving benefits 257
Inactive employees or beneficiaries currently not yet receiving benefits 293
Active employees 779
Total 1,329
Fiscal Year 2020-21 Cash Contributions 626,418 $
Fiscal Year 2020-21 Estimated Implied Subsidy Payments 448,323
Administrative expenses paid outside of trust 5,816
Fiscal Year 2020-21 Trust Contributions 100,000
Total Contributions 1,180,557 $
{city of
Carlsbad
Notes to the Financial Statements
110
Note 17. Other Postemployment Benefits (continued)
Net OPEB liability
The city’s net OPEB liability was measured as of June 30, 2020 and the total OPEB liability used to calculate the net
OPEB liability was determined by an actuarial valuation dated June 30, 2019, based on the actuarial methods and
assumptions shown below:
Actuarial Cost Method: Entry Age Normal
Actuarial Assumptions:
Discount Rate 7.00%
Inflation 2.75%
Salary Increases 3.00%
Investment Rate of Return 7.00% with a 45% to 50% confidence based on Bartel
Associates modeling for CERBT Strategy 1.
Mortality Rate1 Derived using CalPERS’ Membership Data for all funds.
Pre-Retirement Turnover2 Derived using CalPERS’ Membership Data for all funds.
Healthcare Trend Rate3 Based in part on premium experience.
Notes:
1. Based on CalPERS 1997-2015 Experience Study. The Experience Study Reports may be accessed on the
CalPERS website www.calpers.ca.gov under Forms and Publications.
2. Based on CalPERS 1997-2015 Experience Study for Miscellaneous Employees. The Experience Study Reports
may be accessed on the CalPERS website www.calpers.ca.gov under Forms and Publications.
3. Short-term healthcare trends were developed in consultation with Axene Health Partner’s healthcare
actuaries. Long-term healthcare trend developed using Society of Actuaries’ Getzen Model of Long-Run
Medical Cost Trends.
{city of
Carlsbad
Notes to the Financial Statements
111
Note 17. Other Postemployment Benefits (continued)
The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized
in the following table:
CERBT Strategy 1
Asset Class
Target
Allocation
Long-Term Expected
Real Rate of Return
Global Equity 59% 4.82%
Fixed Income 25% 1.47%
TIPS 5% 1.29%
Commodities 3% 0.84%
REITs 8% 3.76%
Total 100%
Notes:
1. The long-term expected rate of return is 7.00%.
2. Assumed long-term rate of inflation is 2.75%.
Discount rate
The discount rate used to measure the total OPEB liability was 7.00%. The projection of cash flows used to determine
the discount rate assumed that city contributions will be made at rates equal to the actuarially determined
contribution rates. Based on those assumptions, the OPEB Plans’ fiduciary net position was projected to be available
to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the
long-term expected rate of return on OPEB Plans investments was applied to all periods of projected benefit
payments to determine the total OPEB liability.
{city of
Carlsbad
Notes to the Financial Statements
112
Note 17. Other Postemployment Benefits (continued)
The changes in the net OPEB (asset)/liability are shown below:
Sensitivity of the net OPEB (asset)/liability to changes in the discount rate
The following presents the net OPEB (asset)/liability of CMWD and city if it were calculated using a discount rate
that is one percentage point lower or one percentage point higher than the current rate, for measurement period
ended June 30, 2020:
Sensitivity of the net OPEB (asset)/liability to changes in the health care cost trend rates
The following presents the net OPEB (asset)/liability of the CMWD and city if it were calculated using health care
cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for
measurement period ended June 30, 2020:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a)(b)(c) = (a) - (b)
Balance at 6/30/2020 (Measurement date of 6/30/2019)18,437,935$ 15,341,653$ 3,096,282$
Changes Recognized for the Measurement Period:
• Service cost 657,941 - 657,941
• Interest on the total OPEB liability 1,301,721 - 1,301,721
• Actuarial assumption changes (281,685) - (281,685)
• Contributions from the employer - 1,085,866 (1,085,866)
• Net investment income - 541,912 (541,912)
• Benefit payments, including refunds of employee contributions (999,866) (999,866) -
• Administrative expense - (7,493) 7,493
Net Changes 678,111 620,419 57,692
Balance at 6/30/2021 (Measurement date of 6/30/2020)19,116,046$ 15,962,072$ 3,153,974$
Increase (Decrease)
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.00%)Rate (7.00%)(8.00%)
Plan's Net OPEB Liability 5,538,181$ 3,153,974$ 1,180,212$
Health Care Cost
Trend Rate - 1%
Current Health Care
Cost Trend Rate
Health Care Cost
Trend Rate + 1%
(6.50%/5.50%
decreasing to 3.00%)
(7.50%/6.50%
decreasing to 4.00%)
(8.50%/7.50%
decreasing to 5.00%)
Plan's Net OPEB Liability 813,092$ 3,153,974$ 6,036,313$
{city of
Carlsbad
Notes to the Financial Statements
113
Note 17. Other Postemployment Benefits (continued)
Recognition of deferred outflows and deferred inflows of resources
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense
systematically over time.
Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are
categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in
future OPEB expense. The initial recognition period is five years.
OPEB expense and deferred outflows/inflows of resources related to OPEB
For the fiscal year ended June 30, 2021, the city recognized OPEB expense of $1,065,607. As of the fiscal year ended
June 30, 2021, the city reported deferred outflows of resources related to OPEB from the following sources:
The $1,180,557 reported as deferred outflows of resources related to contributions subsequent to the June 30,
2020 measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending
June 30, 2021. Other amounts reported as deferred outflows and inflows of resources related to OPEB will be
recognized as expense as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to measurement date 1,180,557$ -$
Difference between expected and actual experience 950,091 -
Changes of assumptions 968,709 (248,931)
Net difference between projected and actual earnings
on OPEB plan investments 355,683 -
Total 3,455,040$ (248,931)$
Deferred
Fiscal Year Outflows/(Inflows)
Ended:of Resources
2022 260,980$
2023 348,968
2024 375,384
2025 351,683
2026 245,333
Thereafter 443,204
{city of
Carlsbad
Notes to the Financial Statements
114
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 $1,513 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
$2,627 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 August 5, 2003, CMWD entered into a 22-year agreement with the Vallecitos Water District, to purchase three
million gallons per day (3,360 acre feet) of recycled water for uses throughout CMWD’s boundaries. Per the
agreement, there is an annual reconciliation that trues up the monthly payments to the actual cost for the water
purchased each fiscal year. The recycled water cost is adjusted every July 1st and shall not exceed 75% of the
wholesale cost of potable water from SDCWA. The agreement also stipulates that CMWD will pay for its share of the
actual operating costs (up to a maximum cost of 75% 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, 2021 is $2,193,339.
Golf course advances
The Golf Course Fund previously showed an advance from other funds balance in the amount of $47,031,506
representing loans received from the city’s General Fund that were used to fund the initial course construction and
some operating costs. For financial statement purposes, these loans were reclassified to “Transfers In” recognizing
that the repayment of these loans is not scheduled to happen in the near and foreseeable future.
The city has not forgiven the loans and the advances are now being disclosed as a contingent liability of the Golf
Course Fund. The balance of these loans is $55,458,868 in total, $47,031,506 of principal and $8,427,362 of interest.
The city discontinued accruing interest on the advances in fiscal year 2013-14. Should sufficient resources in the golf
course become available to make repayments in the future, those repayments of this contingent liability will take
place, and will be recorded as transfers out from the Golf Course Fund at that time.
{city of
Carlsbad
Notes to the Financial Statements
115
Note 18. Commitments and Contingencies (continued)
Encumbrances
As of June 30, 2021, 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.
Outstanding
Encumbrances
Governmental Activities
General Fund 12,124,490 $
Community Facilities District No. 1 1,042,627
General Capital Construction 11,194,844
Infrastructure Replacement 4,902,195
Public Facilities Construction 368,223
Non-major Governmental Funds in the Aggregate 7,066,546
Subtotal Governmental Activities 36,698,925
Business Like Activities-Enterprise Funds
Carlsbad Municipal Water District 4,595,553
Golf Course 10,685
Wastewater 2,998,332
Non-Major Solid Waste 943,544
Subtotal Enterprise Funds 8,548,114
Internal Service Funds 4,099,193
Total 49,346,232 $
{city of
Carlsbad
Notes to the Financial Statements
116
Note 19. Successor Agency Trust for Assets of Former Redevelopment Agency (continued)
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California
cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight
board, remaining assets can only be used to pay enforceable obligations in existence at the date of the dissolution
(including the completion of any unfinished projects that were subject to legally enforceable contractual
commitments). In future years, successor agencies will only be allowed revenue in the amount that is necessary to
pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency
until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been
liquidated.
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 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, 2021:
Principal Principal
Balance at Balance at Due Within
June 30, 2020 Increases Decreases June 30, 2021 One Year
Bonds 3,705,000$ -$ 855,000$ 2,850,000$ 900,000$
Due to the City of Carlsbad 2,681,689 - 2,681,689 - -
Total 6,386,689$ -$ 3,536,689$ 2,850,000$ 900,000$
{city of
Carlsbad
Notes to the Financial Statements
117
Note 19. Successor Agency Trust for Assets of Former Redevelopment Agency (continued)
The 1993 Carlsbad Housing and Redevelopment Commission Tax Allocation Bonds were issued totaling $15,495,000.
Principal is due in amounts ranging from $900,000 to $1,000,000 on September 1 of each year through 2024. Interest
is payable on March 1 and September 1 at rate of 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.
The aggregate maturities of long-term debt are as follows:
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 on the previous page. 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 below. This
percentage also approximates the relationship of debt service to pledged revenues for the remainder of the term of
the commitment:
Note 20. Special Items – Golf Course Debt
The Golf Course Fund previously showed an advance from other funds representing loans received from the city’s
General Fund that were used to fund the initial course construction and some operating costs. The repayment of
these loans is not scheduled to happen in the near and foreseeable future. The city has not forgiven the loans and
the advances are now being disclosed as a contingent liability of the Golf Course Fund. The balance of these loans is
$55,458,868 in total, $47,031,506 of principal and $8,427,362 of interest. For financial statement purposes, the
principal balance was reclassified to “Transfers In” and the interest balance as a special item for the year ended June
30, 2021. Should sufficient resources in the golf course become available to make repayments in the future, those
repayments of this contingent liability will take place, and will be recorded as transfers out from the Golf Course
Fund at that time.
Year ended June 30: Principal Interest
2022 900,000 127,200
2023 950,000 78,175
2024 1,000,000 26,500
2,850,000 $ 231,875 $
Debt Service as a
Description of Annual Amount of Annual Debt Service Percentage of Pledged
Pledged Revenue Pledged Revenue Payments Revenue
Tax increment 3,782,356$ 1,028,708$ 27%
{city of
Carlsbad
Notes to the Financial Statements
118
Note 21. Prior Period Adjustment
The city implemented Governmental Accounting Standards Board (GASB) Statement No. 84 related to Fiduciary
Activities during fiscal year 2020-21. The requirements of this statement will enhance consistency and comparability
by establishing specific criteria for identifying activities that should be reported as fiduciary activities. Greater
consistency and comparability enhance the value provided by the information reported in financial statements for
assessing government accountability and stewardship.
This statement converts the former agency funds, which previously only reported assets and liabilities, to custodial
funds with an economic resources measurement focus and additions and deductions being reported. This statement
also required that all monies held as developer construction deposits in the agency fund now be held and accounted
for in the city’s General Fund.
Accordingly, the net position was restated as of July 1, 2020 as follows:
Statement of Activities
Governmental Activities
Net position at July 1, 2020 $ 1,342,872,773
GASB 84 implementation 3,128,981
Net position at July 1, 2020, as restated $ 1,346,001,754
Statement of Changes in Fiduciary Net Position
Custodial Funds
Net position at July 1, 2020 $ -
GASB 84 implementation 9,953,961
Net position at July 1, 2020, as restated $ 9,953,961
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
General Fund
Net position at July 1, 2020 $ 190,862,662
GASB 84 implementation 3,128,981
Net position at July 1, 2020, as restated $ 193,991,643
{city of
Carlsbad
Required Supplementary
Information
119
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios During Measurement Period
Total Pension Liability
Measurement Total Pension Service Changes of
Period1 Liability - Beginning Cost Interest Benefit Terms
Miscellaneous Plan
2013–14 292,931,044 $ 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 -
2016–17 336,686,595 7,836,970 25,085,808 -
2017–18 372,190,930 7,642,062 25,874,546 -
2018–19 383,133,348 7,393,365 27,175,110 -
2019–20 401,846,361 7,748,623 28,392,127 -
Safety Plan
2013–14 227,568,288 $ 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 -
2016–17 257,649,541 5,825,080 19,305,098 -
2017–18 285,701,762 5,985,155 20,248,091 -
2018–19 299,532,094 6,317,755 21,269,278 -
2019–20 314,256,438 6,578,451 22,410,699 -
¹ Historical information is required only for measurement periods for which GASB 68 is applicable.
120
{city of
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Difference Benefit Payments,
Between Expected Including Refunds Net Change in
and Actual Changes of of Employee Total Pension Total Pension
Experience Assumptions Contributions Liability Liability - Ending (a)
-$ -$ (11,614,664) $ 17,086,983 $ 310,018,027 $
1,300,520 (5,737,798) (12,791,734) 12,588,931 322,606,958
(2,605,228) - (14,344,528) 14,079,637 336,686,595
(3,079,012) 20,988,178 (15,327,609) 35,504,335 372,190,930
(3,023,977) (2,662,243) (16,887,970) 10,942,418 383,133,348
2,338,341 - (18,193,803) 18,713,013 401,846,361
1,167,225 - (19,590,424) 17,717,551 419,563,912
-$ -$ (10,529,479) $ 11,772,166 $ 239,340,454 $
638,786 (4,517,683) (11,264,768) 7,679,903 247,020,357
(941,378) - (12,197,119) 10,629,184 257,649,541
(705,417) 16,661,943 (13,034,483) 28,052,221 285,701,762
2,726,755 (1,332,336) (13,797,333) 13,830,332 299,532,094
2,425,561 - (15,288,250) 14,724,344 314,256,438
4,071,899 - (16,362,437) 16,698,612 330,955,050
121
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios During Measurement Period (continued)
Plan Fiduciary Net Position
Plan Fiduciary Net
Measurement Net Position Contributions Contributions Investment
Period1 Beginning2 Employer Employee Income3
Miscellaneous Plan
2013–14 204,354,694 $ 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
2016–17 241,681,934 14,677,334 2,820,046 26,893,994
2017–18 270,386,079 22,114,923 3,005,761 22,720,698
2018–19 300,121,419 17,745,975 3,040,423 19,551,424
2019–20 322,051,935 10,637,969 3,338,003 15,901,834
Safety Plan
2013–14 161,108,415 $ 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
2016–17 184,778,552 12,379,181 1,922,500 20,385,351
2017–18 206,161,081 8,675,370 2,169,504 17,250,148
2018–19 219,522,878 23,119,896 2,380,740 14,331,677
2019–20 243,910,793 10,321,371 2,581,027 12,053,297
¹
2
3
4 During Fiscal Year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No.
75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pension (GASB 75),
CalPERS reported its proportionate share of activity related to postemployment benefits for participation in
the State of California's agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the
adoption of GASB 75.
Additionally, CalPERS employees participate in various State of California agent pension plans and during
Fiscal Year 2017-18, CalPERS recorded a correction to previously reported financial statements to properly
reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68,
Accounting and Financial Reporting for Pensions (GASB 68).
Historical information is required only for measurement periods for which GASB 68 is applicable.
Net of administrative expenses.
Includes any beginning of year adjustment.
122
{city of
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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 Position4 Net Position Ending (b)(a) - (b)
(11,614,664) $ -$ 34,955,600 $ 239,310,294 $ 70,707,733 $
(12,791,734) (572,277) 3,137,339 242,447,633 80,159,325
(14,344,528) (147,759) (765,699) 241,681,934 95,004,661
(15,327,609) (359,620) 28,704,145 270,386,079 101,804,851
(16,887,970) (1,218,072) 29,735,340 300,121,419 83,011,929
(18,193,803) (213,503) 21,930,516 322,051,935 79,794,426
(19,590,424) (454,014) 9,833,368 331,885,303 87,678,609
(10,529,479) $ -$ 25,371,148 $ 186,479,563 $ 52,860,891 $
(11,264,768) (210,908) 850,270 187,329,833 59,690,524
(12,197,119) (114,168) (2,551,281) 184,778,552 72,870,989
(13,034,483) (270,020) 21,382,529 206,161,081 79,540,681
(13,797,333) (935,892) 13,361,797 219,522,878 80,009,216
(15,288,250) (156,148) 24,387,915 243,910,793 70,345,645
(16,362,437) (343,854) 8,249,404 252,160,197 78,794,853
123
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios During Measurement Period (continued)
Plan Fiduciary Plan Net Pension
Net Position Liability/(Asset)
as a Percentage as a Percentage
Measurement of the Total Covered of Covered -
Period1 Liability Payroll Payroll
Miscellaneous Plan
2013–14 77.19%32,960,515 $ 214.52%
2014–15 75.15% 33,609,704 238.50%
2015–16 71.78% 35,141,036 270.35%
2016–17 72.65% 35,845,774 284.01%
2017–18 78.33% 36,214,870 229.22%
2018–19 80.14% 39,130,545 203.92%
2019–20 79.10% 42,138,677 208.07%
Safety Plan 2013–14 77.91%18,013,144 $ 293.46%
2014–15 75.84% 18,378,393 324.79%
2015–16 71.72% 18,514,525 393.59%
2016–17 72.16% 18,965,085 419.41%
2017–18 73.29% 20,768,094 385.25%
2018–19 77.62% 22,328,023 315.06%
2019–20 76.19% 24,695,745 319.06%
¹ Historical information is required only for measurement periods for which GASB 68 is applicable.
Notes to Schedule:
Benefit Changes:
Changes of Assumptions:
The figures above do include any liability impact that may have resulted from plan changes which have occurred after June 30,
2019 valuation date. This applies for voluntary benefit changes as well as any offers of two years additional service credit (a.k.a.
Golden Handshakes).
In 2019 and 2020,there were no changes.In 2018,demographic assumptions and inflation rate were changed in accordance to
the CalPERS Experience Study and Review of Actuarial Assumptions December 2017.There were no changes in the discount
rate.In 2017,the accounting discount rate reduced from 7.65%to 7.15%.In 2016,there were no changes.In 2015,amounts
reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense)to 7.65% (without a reduction for
pension plan administration expense). In 2014, amounts reported were based on the 7.5% discount rate.
124
{:city of
Carlsbad
Required Supplementary Information
Schedule of Pension Plan Contributions¹
Contributions
in Relation to Contributions
Actuarially the Actuarially Contribution as a Percentage
Fiscal Year Determined Determined Deficiency Covered of Covered
Ending Contribution Contribution (Excess)Payroll Payroll
Miscellaneous Plan
06/30/2014 8,004,157 $ (8,004,157) $ -$ 32,960,515 $ 24.28%
06/30/2015 8,434,882 (8,434,882) - 33,609,704 25.10%
06/30/2016 9,562,926 (9,562,926) - 35,141,036 27.21%
06/30/2017 10,338,549 (14,677,334) (4,338,785) 35,845,774 40.95%
06/30/2018 10,456,115 (22,114,923) (11,658,808) 36,214,870 61.07%
06/30/2019 11,966,625 (17,745,975) (5,779,350) 39,130,545 45.35%
06/30/2020 10,633,467 (10,633,467) - 42,138,677 25.23%
06/30/2021 11,098,619 (16,501,759) (5,403,140) 43,884,424 37.60%
Safety Plan
06/30/2014 6,141,746 $ (6,141,746) $ -$ 18,013,144 $ 34.10%
06/30/2015 6,491,856 (6,491,856) - 18,378,393 35.32%
06/30/2016 6,836,098 (6,836,098) - 18,514,525 36.92%
06/30/2017 7,695,135 (12,379,181) (4,684,046) 18,965,085 65.27%
06/30/2018 8,658,116 (8,658,116) - 20,768,094 41.69%
06/30/2019 8,899,136 (23,119,790) (14,220,654) 22,328,023 103.55%
06/30/2020 10,323,721 (10,323,721) - 24,695,745 41.80%
06/30/2021 9,656,334 (14,253,194) (4,596,860) 26,392,461 54.00%
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
2020-21 were derived from the June 30, 2018 funding valuation reports.
Actuarial Cost Method Entry Age Normal
Amortization Method/Period For details, see June 30, 2018 Funding Valuation Report
Asset Valuation Method Market Value of Assets. For details, see June 30, 2018
Funding Valuation Report
Inflation 2.50%
Salary Increases Varies by entry age and service
Payroll Growth 2.75%
Investment Rate of Return 7.00% net of pension plan investment and
administrative expenses; includes inflation
Retirement Age The probabilities of retirement are based on the 2017
CalPERS Experience Study for the period from 1997 to 2015
Mortality The probabilities of mortality are based on the 2017
CalPERS Experience Study for the period from 1997 to 2015.
Pre-retirement and post-retirement mortality rates include
20 years of projected mortality improvement using Scale BB
published by the Society of Actuaries.
125
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Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios During Measurement Period
Total OPEB Liability
Measurement Total OPEB Service Changes of
Period¹Liability - Beginning Cost Interest Benefit Terms
2016–17 15,143,574 $ 505,348 $ 1,064,137 $ -$
2017–18 15,819,160 520,509 1,113,646 -
2018–19 16,592,421 536,124 1,167,930 -
2019–20 18,437,935 657,941 1,301,716 -
Plan Fiduciary Net Position
Plan Fiduciary Net
Measurement Net Position Contributions Contributions Investment
Period¹Beginning Employer Employee Income²
2016–17 12,192,178 $ 747,772 $ -$ 1,281,487 $
2017–18 13,327,538 860,894 - 1,064,150
2018–19 14,366,953 978,302 - 887,132
2019–20 15,341,653 1,085,866 - 541,912
¹ Historical information is required only for measurement periods for which GASB 75 is applicable.
2 Net of administrative expenses.
126
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Difference Benefit Payments,
Between Expected Including Refunds Net Change in
and Actual Changes of of Employee Total OPEB Total OPEB
Experience Assumptions Contributions Liability Liability - Ending (a)
-$ -$ (893,899) $ 675,586 $ 15,819,160 $
- - (860,894) 773,261 16,592,421
(203,116) 1,232,232 (887,656) 1,845,514 18,437,935
- (281,685) (999,866) 678,106 19,116,041
Benefit Payments,Plan Net OPEB
Including Refunds Other Changes Net Change Plan Fiduciary Liability/(Asset)
of Employee In Fiduciary in Fiduciary Net Position Ending
Contributions Net Position Net Position Ending (b)(a) - (b)
(893,899) $ -$ 1,135,360 $ 13,327,538 $ 2,491,622 $
(860,894) (24,735) 1,039,415 14,366,953 2,225,468
(887,656) (3,078) 974,700 15,341,653 3,096,282
(999,866) (7,493) 620,419 15,962,072 3,153,969
127
Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios During Measurement Period (Continued)
Related Ratios
Plan Fiduciary Plan Net OPEB
Net Position Liability/(Asset)
as a Percentage Covered - as a Percentage
Measurement of the Total Employee of Covered -
Period¹Liability Payroll Employee Payroll
2016–17 84.25%54,810,859 $ 4.55%
2017–18 86.59%56,982,964 3.91%
2018–19 83.21%61,458,568 5.04%
2019–20 83.50%66,834,422 4.72%
¹ Historical information is required only for measurement periods for which GASB 75 is applicable.
128
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Required Supplementary Information
Schedule of OPEB Pension Plan Contributions¹
Contributions
in Relation to Contributions
Actuarially the Actuarially Contribution Covered -as a Percentage
Fiscal Year Determined Determined Deficiency Employee of Covered-
Ending2 Contribution Contribution (Excess)Payroll Employee Payroll
06/30/2018 770,693 $ (860,894) $ (90,201) $ 56,982,964 $ 1.51%
06/30/2019 788,383 (978,302) (189,919) 61,458,568 1.59%
06/30/2020 941,129 (1,085,864) (144,735) 66,834,422 1.62%
06/30/2021 962,244 (1,180,557) (218,313) 70,276,885 1.68%
¹ Historical information is required only for measurement periods for which GASB 75 is applicable.
2 One plan, rather than two, was reported beginning in fiscal year ending 06/30/2021.
Notes to Schedule:
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2020-21 were derived from the June 30, 2019 funding valuation reports.
Actuarial Cost Method Entry Age Normal, Level % of pay
Amortization Method/Period Level dollar over 28-year fixed period
Inflation 2.75%
Salary Increases Varies by Entry Age and Service based on the CalPERS
Experience Study for the period from 1997 to 2015.
Payroll Growth 3.00%
Investment Rate of Return 7.0% net of pension plan investment and
administrative expenses, including inflation
Retirement Age The probabilities of retirement are based on the CalPERS
Experience Study for the period from 1997 to 2015.
Mortality The probabilities of mortality are based on the CalPERS
Experience Study for the period from 1997 to 2015.
Mortality Improvement Post-retirement mortality projected fully generational
with Scale MP-2019.
129
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T
h
is
p
a
g
e is intentionally left blank.
130
Combining and Individual Fund
Statements and Schedules
131
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2021
Community
Affordable Development Financing
Housing Block Grant Donations Districts
Cash and investments 16,689,733 $ -$ 2,895,693 $ 9,464,509 $
Receivables:
Interest 3,133,685 - 10,107 31,140
Other - - - 16,214
Accounts, net of allowances - - - -
Due from other governments - 468,306 - -
Inventories - -2,145 -
Prepaid items - -- -
Land held for resale 324,223 1,961,499 - -
Loan receivables, net of allowances 23,301,954 - - -
Advances to other funds 94,116 - - -
Total assets 43,543,711 $ 2,429,805 $ 2,907,945 $ 9,511,863 $
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accrued liabilities 45,546 $ 201,669 $ 15,401 $ 286,295 $
Due to other funds - 300,012 - -
Due to other governments - -- -
Deposits payable - -- -
Advances from other funds - -- -
Unearned revenue - -- -
Total liabilities 45,546 501,681 15,401 286,295
Deferred inflows of resources:
Unavailable revenue 3,075,486 - - -
Fund balances:
Nonspendable:
Prepaid items - - - -
Restricted:
Affordable housing 40,422,679 - - -
Lighting and landscaping districts - - - 9,225,568
Capital projects - - - -
General government - - - -
Public safety - - - -
Community services - 1,928,124 2,892,544 -
Unassigned - - - -
Total fund balances 40,422,679 1,928,124 2,892,544 9,225,568
Total liabilities, deferred inflows of
resources and fund balances 43,543,711 $ 2,429,805 $ 2,907,945 $ 9,511,863 $
ASSETS
Special Revenue Funds
132
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Other Police
Habitat and Special Grants and Section 8 Tyler
Agricultural Revenue Asset Rental Court
Management Funds Forfeiture Assistance Apartments Totals
1,022,064 $ 870,233 $ 517,329 $ 423,753 $ 375,620 $ 32,258,934 $
3,564 3,035 2,109 830 3 3,184,473
- 73,840 - - 666 90,720
- - - - - -
- - - 143,404 - 611,710
- - - - - 2,145
- - - - 856 856
- - - - - 2,285,722
- - - - - 23,301,954
- - - - - 94,116
1,025,628 $ 947,108 $ 519,438 $ 567,987 $ 377,145 $ 61,830,630 $
-$ 5,679 $ 25,578 $ 18,302 $ 17,312 $ 615,782 $
- - - - - 300,012
- - - 46,165 - 46,165
- - - 735 29,234 29,969
1,253,825 - - 94,116 - 1,347,941
- - 5,359 172,956 - 178,315
1,253,825 5,679 30,937 332,274 46,546 2,518,184
- - - - - 3,075,486
- - - - 856 856
- - - 235,713 329,743 40,988,135
- - - - - 9,225,568
- - - - - -
- 941,429 - - - 941,429
- - 488,501 - - 488,501
- - - - - 4,820,668
(228,197) - - - - (228,197)
(228,197) 941,429 488,501 235,713 330,599 56,236,960
1,025,628 $ 947,108 $ 519,438 $ 567,987 $ 377,145 $ 61,830,630 $
(continued)
Special Revenue Funds
133
Combining Balance Sheet
Nonmajor Governmental Funds (continued)
June 30, 2021
Grants Planned
Assessment Bridge and and Other Local
and Other Thoroughfare Gas Capital Drainage
Districts Districts Tax Project Funds Facilities
Cash and investments 3,464,775 $ 12,648,466 $ 17,584,878 $ 1,779,759 $ 4,672,546 $
Receivables:
Interest 8,685 44,110 61,330 7,120 16,298
Other - - - - 490
Accounts, net of allowances - 1,429,966 - - -
Due from other governments - - 386,685 57,044 -
Inventories - - - - -
Prepaid items - - - - -
Land held for resale - - - - -
Loan receivables, net of allowances - - - - -
Advances to other funds - - - - -
Total assets 3,473,460 $ 14,122,542 $ 18,032,893 $ 1,843,923 $ 4,689,334 $
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accrued liabilities -$ -$ 189,842 $ -$ 979 $
Due to other funds - - - - -
Due to other governments - - - - -
Deposits payable 426,180 - - - -
Advances from other funds - - - - -
Unearned revenue - - - - -
Total liabilities 426,180 - 189,842 - 979
Deferred inflows of resources:
Unavailable revenue - 1,429,966 - - -
Fund balances:
Nonspendable:
Prepaid items - - - - -
Restricted:
Affordable, low and moderate income housing - - - - -
Lighting and landscaping districts - - - - -
Capital projects 3,047,280 12,692,576 17,843,051 1,843,923 4,688,355
General government - - - - -
Public safety - - - - -
Community services - - - - -
Unassigned - - - - -
Total fund balances 3,047,280 12,692,576 17,843,051 1,843,923 4,688,355
Total liabilities, deferred inflows of
resources and fund balances 3,473,460 $ 14,122,542 $ 18,032,893 $ 1,843,923 $ 4,689,334 $
ASSETS
Capital Project Funds
134
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Public Traffic Total Other
Facilities Sales Tax/Impact Governmental
Construction TransNet Projects Totals Funds
30,905,041 $ 8,856,520 $ 23,600,885 $ 103,512,870 $ 135,771,804 $
107,842 29,978 83,754 359,117 3,543,590
- 89,128 - 89,618 180,338
19,900 - - 1,449,866 1,449,866
- 1,255 - 444,984 1,056,694
- - - - 2,145
- - - - 856
- - - - 2,285,722
- - - - 23,301,954
5,650,000 - - 5,650,000 5,744,116
36,682,783 $ 8,976,881 $ 23,684,639 $ 111,506,455 $ 173,337,085 $
13,885 $ 262,779 $ 228,437 $ 695,922 $ 1,311,704 $
- - - - 300,012
- - - - 46,165
- - - 426,180 456,149
- - 1,525,948 1,525,948 2,873,889
- - - - 178,315
13,885 262,779 1,754,385 2,648,050 5,166,234
- - - 1,429,966 4,505,452
- - - - 856
- - - - 40,988,135
- - - - 9,225,568
36,668,898 8,714,102 21,930,254 107,428,439 107,428,439
- - - - 941,429
- - - - 488,501
- - - - 4,820,668
- - - - (228,197)
36,668,898 8,714,102 21,930,254 107,428,439 163,665,399
36,682,783 $ 8,976,881 $ 23,684,639 $ 111,506,455 $ 173,337,085 $
135
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2021
Community
Affordable Development Financing
Housing Block Grant Donations Districts
Revenues:
Taxes -$ -$ -$ -$
Intergovernmental - 1,440,502 - -
Charges for services 22,634 - - 2,457,690
Fines and forfeitures - - - -
Income from property and investments 245,888 166,213 6,460 19,240
Contributions from property owners 273,120 - - -
Donations - - 321,213 -
Miscellaneous - - 2,674 14,171
Total revenues 541,642 1,606,715 330,347 2,491,101
Expenditures:
Current:
General government - - - -
Public safety - - - -
Community services 424,624 636,782 201,259 2,005,001
Public works - - - 927,264
Capital outlay 4,200,000 300,000 - -
Debt service:
Interest and fiscal charges - - - -
Total expenditures 4,624,624 936,782 201,259 2,932,265
Excess (deficiency) of revenues
over (under) expenditures (4,082,982) 669,933 129,088 (441,164)
Other financing sources (uses):
Transfers in - - - 700,000
Transfers out (50,000) - - -
Total other financing sources (uses)(50,000) - - 700,000
Net change in fund balances (4,132,982) 669,933 129,088 258,836
Fund balance (deficit) at beginning of year 44,555,661 1,258,191 2,763,456 8,966,732
Fund balance (deficit) at end of year 40,422,679 $ 1,928,124 $ 2,892,544 $ 9,225,568 $
Special Revenue Funds
136
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Other Police
Habitat and Special Grants and Section 8 Tyler
Agricultural Revenue Asset Rental Court
Management Funds Forfeiture Assistance Apartments Totals
-$ -$ -$ -$ -$ -$
- - 464,537 9,070,879 - 10,975,918
- - - - 604,338 3,084,662
- - 5,751 - - 5,751
1,551 343 1,066 2,888 2,128 445,777
16,962 302,404 - - - 592,486
- - - - - 321,213
4,696 - - 5,650 - 27,191
23,209 302,747 471,354 9,079,417 606,466 15,452,998
- 196,533 - - - 196,533
- - 402,874 - - 402,874
- - - 9,024,884 474,207 12,766,757
- - - - - 927,264
- 139,468 27,873 - - 4,667,341
16,961 - - - - 16,961
16,961 336,001 430,747 9,024,884 474,207 18,977,730
6,248 (33,254) 40,607 54,533 132,259 (3,524,732)
- - - 50,000 - 750,000
- - - - - (50,000)
- - - 50,000 - 700,000
6,248 (33,254) 40,607 104,533 132,259 (2,824,732)
(234,445) 974,683 447,894 131,180 198,340 59,061,692
(228,197) $ 941,429 $ 488,501 $ 235,713 $ 330,599 $ 56,236,960 $
(continued)
Special Revenue Funds
137
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds (continued)
For the Year Ended June 30, 2021
Grants
Assessment Bridge and and Other
and Other Thoroughfare Gas Capital
Districts Districts Tax Project Funds
Revenues:
Taxes -$ -$ 4,640,131 $ -$
Intergovernmental - - - 253,900
Charges for services - - - -
Fines and forfeitures - - - -
Income from property and investments 4,720 22,969 47,949 6,421
Contributions from property owners - - 194,729 44,960
Donations - - - -
Miscellaneous - - - -
Total revenues 4,720 22,969 4,882,809 305,281
Expenditures:
Current:
General government - - - 48,244
Public safety - - - -
Community services - - - -
Public works - - 600,000 -
Capital outlay 8,867 - 2,472,180 260,821
Debt service:
Interest and fiscal charges - - - -
Total expenditures 8,867 - 3,072,180 309,065
Excess (deficiency) of revenues
over (under) expenditures (4,147) 22,969 1,810,629 (3,784)
Other financing sources (uses):
Transfers in - - - -
Transfers out - - (10,000) -
Total other financing sources (uses)- - (10,000) -
Net change in fund balances (4,147) 22,969 1,800,629 (3,784)
Fund balances at beginning of year 3,051,427 12,669,607 16,042,422 1,847,707
Fund balances at end of year 3,047,280 $ 12,692,576 $ 17,843,051 $ 1,843,923 $
Capital Project Funds
138
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Planned
Local Public Traffic Total Other
Drainage Facilities Sales Tax/Impact Governmental
Facilities Construction TransNet Projects Totals Funds
-$ -$ -$ -$ 4,640,131 $ 4,640,131 $
- - 2,307,259 - 2,561,159 13,537,077
- - 1,027,032 - 1,027,032 4,111,694
- - - - - 5,751
(776) 194,323 12,946 46,683 335,235 781,012
669,774 1,557,155 - 1,037,497 3,504,115 4,096,601
- - - - - 321,213
- - - - - 27,191
668,998 1,751,478 3,347,237 1,084,180 12,067,672 27,520,670
- - - - 48,244 244,777
- - - - - 402,874
- - - - - 12,766,757
- - - - 600,000 1,527,264
1,569,895 164,848 2,152,292 1,196,826 7,825,729 12,493,070
-
- - - - - 16,961
1,569,895 164,848 2,152,292 1,196,826 8,473,973 27,451,703
(900,897) 1,586,630 1,194,945 (112,646) 3,593,699 68,967
- - - - - 750,000
- - - - (10,000) (60,000)
- - - - (10,000) 690,000
(900,897) 1,586,630 1,194,945 (112,646) 3,583,699 758,967
5,589,252 35,082,268 7,519,157 22,042,900 103,844,740 162,906,432
4,688,355 $ 36,668,898 $ 8,714,102 $ 21,930,254 $ 107,428,439 $ 163,665,399 $
139
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds
For the Year Ended June 30, 2021
Actual
Amounts Variance
(Budgetary Over
Budget Basis)(Under)
Affordable Housing
Total revenues 1,204,279 $ 845,714 $ (358,565) $
Total expenditures 5,632,518 4,674,624 (957,894)
Net change in fund balance (4,428,239) (3,828,910) 599,329
Community Development Block Grant
Total revenues 1,551,030 1,606,715 55,685
Total expenditures 3,050,296 2,021,741 (1,028,555)
Net change in fund balance (1,499,266) (415,026) 1,084,240
Donations
Total revenues 336,541 361,895 25,354
Total expenditures 810,903 232,610 (578,293)
Net change in fund balance (474,362) 129,285 603,647
Financing Districts
Total revenues 3,259,066 3,286,271 27,205
Total expenditures 3,944,676 3,024,034 (920,642)
Net change in fund balance (685,610) 262,237 947,847
Habitat and Agricultural Management
Total revenues 30,230 35,581 5,351
Total expenditures 83,779 16,961 (66,818)
Net change in fund balance (53,549) 18,620 72,169
Other Special Revenue Funds
Total revenues 296,000 314,104 18,104
Total expenditures 452,470 451,446 (1,024)
Net change in fund balance (156,470) $ (137,342) $ 19,128 $
(continued)
140
{:city of
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Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Special Revenue Funds (continued)
For the Year Ended June 30, 2021
Actual
Amounts Variance
(Budgetary Over
Budget Basis)(Under)
Police Grants and Asset Forfeiture
Total revenues 425,257 $ 478,314 $ 53,057 $
Total expenditures 852,482 447,627 (404,855)
Net change in fund balance (427,225) 30,687 457,912
Section 8 Rental Assistance
Total revenues 8,950,124 9,130,221 180,097
Total expenditures 9,225,163 9,032,784 (192,379)
Net change in fund balance (275,039) 97,437 372,476
Totals
Total revenues 16,052,527 16,058,815 6,288
Total expenditures 24,052,287 19,901,827 (4,150,460)
Net change in fund balance (7,999,760) $ (3,843,012) $ 4,156,748 $
141
{:city of
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142
Combining Schedule of Revenues and Expenditures
Budget and Actual (Budgetary Basis)
Capital Project Funds
For the Year Ended June 30, 2021
Actual
Amounts Variance
(Budgetary Over
Budget Basis)(Under)
Parking-in-Lieu (Grants and Other Capital Project Funds)
Total revenues 17,064 $ 47,438 $ 30,374 $
Total expenditures 50,000 48,244 (1,756)
Net change in fund balance (32,936) $ (806)$ 32,130 $
143
Ccityof
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Combining Statement of Net Position
Internal Service Funds
June 30, 2021
Fleet Self-Insured
ASSETS Management Benefits
Current assets:
Cash and investments 20,105,624 $ 5,615,815 $
Receivables:
Interest 70,109 -
Accounts, net of allowances 5,106 -
Inventories 332,067 -
Prepaid items 4,461 -
Total current assets 20,517,367 5,615,815
Noncurrent assets:
Capital assets:
Machinery and equipment 29,618,343 -
Construction in progress - -
Intangible assets - -
Less accumulated depreciation (15,607,609) -
Total capital assets (net of accumulated depreciation)14,010,734 -
Total assets 34,528,101 5,615,815
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - OPEB related items 36,415 -
Deferred outflows of resources - pension related items 317,895 -
Total deferred outflows of resources 354,310 -
LIABILITIES
Current liabilities:
Accrued liabilities 348,743 5,615,815
Estimated claims payable - -
Total current liabilities 348,743 5,615,815
Noncurrent liabilities:
Deposits payable 968 -
Net OPEB liability 46,698 -
Net pension liability 1,288,875 -
Total noncurrent liabilities 1,336,541 -
1,685,284 5,615,815
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - OPEB related items 2,597 -
Deferred inflows of resources - pension related items 5,223 -
Total deferred inflows of resources 7,820 -
NET POSITION
Net investment in capital assets 14,010,734 -
Unrestricted 19,178,573 -
33,189,307 $ -$
Total liabilities
Total net position
144
Ccityof
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Information Risk Workers’
Technology Management Compensation Total
7,436,689 $ 4,967,238 $ 13,780,367 $ 51,905,733 $
25,918 17,322 47,333 160,682
- - - 5,106
- - - 332,067
2,122,535 - - 2,126,996
9,585,142 4,984,560 13,827,700 54,530,584
5,096,504 - - 34,714,847
820,801 - - 820,801
3,155,837 - - 3,155,837
(3,445,507) - - (19,053,116)
5,627,635 - - 19,638,369
15,212,777 4,984,560 13,827,700 74,168,953
113,454 7,038 3,001 159,908
1,219,678 88,665 54,064 1,680,302
1,333,132 95,703 57,065 1,840,210
1,264,526 138,462 12,964 7,380,510
- 3,621,368 10,524,653 14,146,021
1,264,526 3,759,830 10,537,617 21,526,531
- 1,000 - 1,968
144,673 9,004 3,854 204,229
4,945,074 359,482 219,197 6,812,628
5,089,747 369,486 223,051 7,018,825
6,354,273 4,129,316 10,760,668 28,545,356
8,477 513 212 11,799
20,041 1,457 888 27,609
28,518 1,970 1,100 39,408
5,627,635 - - 19,638,369
4,535,483 948,977 3,122,997 27,786,030
10,163,118 $ 948,977 $ 3,122,997 $ 47,424,399 $
145
Combining Statement of Revenues, Expenses and Changes in Net Position
Internal Service Funds
For the Year Ended June 30, 2021
Fleet Self-Insured Information
Management Benefits Technology
Operating revenues:
Other charges for services 6,066,234 $ -$ 12,530,344 $
Miscellaneous 33,250 - 48,270
Total operating revenues 6,099,484 - 12,578,614
Operating expenses:
Depreciation 2,271,706 - 441,281
Fuel and supplies 1,488,319 - -
Claims and premiums expense - - -
Small equipment purchases 50,151 - 636,925
General and administrative 1,735,362 - 12,504,070
Total operating expenses 5,545,538 - 13,582,276
Operating income (loss)553,946 - (1,003,662)
Nonoperating revenues (expenses):
Income from property and investments 50,099 - (28,270)
Interest expense - - (3,360)
Gain (loss) on sale of property 374,856 - (332,117)
Total nonoperating revenues (expenses)424,955 - (363,747)
Income (loss) before transfers and
capital contributions 978,901 - (1,367,409)
Transfers in 40,000 - -
Transfers out - (1,834,163) -
Capital contributions 1,085,280 - 1,194,748
Change in net position 2,104,181 (1,834,163) (172,661)
Total net position at beginning of year 31,085,126 1,834,163 10,335,779
Total net position at end of year 33,189,307 $ -$ 10,163,118 $
146
{:city of
Carlsbad
Risk Workers’
Management Compensation Totals
2,308,836 $ 1,880,304 $ 22,785,718 $
59,053 377,892 518,465
2,367,889 2,258,196 23,304,183
- - 2,712,987
- - 1,488,319
2,194,785 3,266,383 5,461,168
- - 687,076
480,350 142,481 14,862,263
2,675,135 3,408,864 25,211,813
(307,246) (1,150,668) (1,907,630)
1,928 39,441 63,198
- - (3,360)
- - 42,739
1,928 39,441 102,577
(305,318) (1,111,227) (1,805,053)
- 1,834,163 1,874,163
- - (1,834,163)
- - 2,280,028
(305,318) 722,936 514,975
1,254,295 2,400,061 46,909,424
948,977 $ 3,122,997 $ 47,424,399 $
147
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2021
Fleet Self-Insured
Management Benefits
Cash flows from operating activities:
Receipts from customers and users 6,107,407 $ 594,421 $
Payments to suppliers (1,782,816) -
Payments to employees (1,209,723) -
Internal activity - payments to other funds (154,668) -
Claims and premiums paid - -
Net cash provided by (used in) operating activities 2,960,200 594,421
Cash flows from noncapital financing activities:
Operating subsidies and transfers (to) from other funds 40,000 (1,834,163)
Cash flows from capital and related financing activities:
Purchase of capital assets (1,761,111) -
Gross proceeds from the sale of capital assets 397,276 -
Principal paid on capital debt - -
Interest expense - -
Net cash provided by (used in) capital and related
financing activities (1,363,835) -
Cash flows from investing activities:
Interest on investments 58,257 -
Net increase (decrease) in cash and cash equivalents 1,694,622 (1,239,742)
Cash and cash equivalents at beginning of year 18,411,002 6,855,557
Cash and cash equivalents at end of year 20,105,624 $ 5,615,815 $
148
{city of
Carlsbad
Information Risk Workers’
Technology Management Compensation Total
12,578,609 $ 2,367,890 $ 2,215,337 $ 23,863,664 $
(7,898,594) (151,408) - (9,832,818)
(6,056,893) (309,869) (160,928) (7,737,413)
(34,656) (11,100) (1,200) (201,624)
- (2,046,712) (3,505,862) (5,552,574)
(1,411,534) (151,199) (1,452,653) 539,235
- - 1,834,163 40,000
(823,211) - - (2,584,322)
- - - 397,276
(147,952) - - (147,952)
(3,360) - - (3,360)
(974,523) - - (2,338,358)
(12,628) 6,253 49,498 101,380
(2,398,685) (144,946) 431,008 (1,657,743)
9,835,374 5,112,184 13,349,359 53,563,476
7,436,689 $ 4,967,238 $ 13,780,367 $ 51,905,733 $
(continued)
149
Combining Statement of Cash Flows
Internal Service Funds (continued)
For the Year Ended June 30, 2021
Fleet Self-Insured
Management Benefits
Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities:
Operating income (loss)553,946 $ -$
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization 2,271,706 -
Change in assets and liabilities:
(Increase) decrease in receivables 7,926 -
(Increase) in inventories 184,413 -
(Increase) in prepaid items (4,461) -
(Increase) in deferred outflows - OPEB related items (2,567) -
(Increase) in deferred outflows - pension related items (132,841) -
Increase (decrease) in accrued liabilities 2,844 594,421
Increase (decrease) in estimated claims payable - -
Increase (decrease) in net OPEB liability 860 -
Increase (decrease) in net pension liability 115,898 -
Increase (decrease) in deferred inflows - OPEB related items 1,318 -
Increase (decrease) in deferred inflows - pension related items (38,842) -
Net cash provided by (used in) operating activities 2,960,200 $ 594,421 $
Noncash capital financing activities:
Capital assets contributed by other funds 1,085,280 $ -$
150
{:city of
Carlsbad
Information Risk Workers’
Technology Management Compensation Total
(1,003,662) $ (307,246) $ (1,150,668) $ (1,907,630) $
441,281 - - 2,712,987
- - 49,373 57,299
- - - 184,413
(436,513) - - (440,974)
(8,804) (517) (206) (12,094)
(482,641) (31,663) (24,348) (671,493)
(40,634) 6,316 1,368 564,315
- 148,073 (331,710) (183,637)
2,954 173 69 4,056
444,668 32,325 19,711 612,602
4,524 267 106 6,215
(332,707) 1,073 (16,348) (386,824)
(1,411,534) $ (151,199) $ (1,452,653) $ 539,235 $
1,194,748 $ -$ -$ 2,280,028 $
151
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2021
Assessment Business Improvement
ASSETS Districts Districts Total
Current assets:
Cash and investments 4,516,804 $ 2,194,514 $ 6,711,318 $
Receivables:
Assessments 12,240 7,735 19,975
Interest 34,148 7,654 41,802
Taxes 64,139 - 64,139
Total current assets 4,627,331 2,209,903 6,837,234
Restricted assets:
Cash and investments 4,458,829 - 4,458,829
Total assets 9,086,160 2,209,903 11,296,063
LIABILITIES
Accrued liabilities 26,746 62,190 88,936
Total liabilities 26,746 62,190 88,936
NET POSITION
Restricted for:
Individuals, organizations and other governments 9,059,414 $ 2,147,713 $ 11,207,127 $
152
{city of
Carlsbad
Combining Statement of Changes in Fiduciary Net Position
Custodial Funds
For the Year Ended June 30, 2021
Assessment Business Improvement
ADDITIONS Districts Districts Total
District assessment collections 3,453,276 $ 2,206,598 $ 5,659,874 $
Income from property and investments 42,077 14,923 57,000
Property Taxes 1,355,775 - 1,355,775
Total additions 4,851,128 2,221,521 7,072,649
DEDUCTIONS
Distributions to beneficiaries - 796,085 796,085
General and administrative - 67,290 67,290
Bond principal 3,175,000 - 3,175,000
Bond Interest expense and fees 1,781,108 - 1,781,108
Total deductions 4,956,108 863,375 5,819,483
Change in net position (104,980) 1,358,146 1,253,166
Net position (deficit) at beginning of year, as restated 9,164,394 789,567 9,953,961
Net position (deficit) at end of year 9,059,414 $ 2,147,713 $ 11,207,127 $
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155
Statistical Section
This section of the City of Carlsbad’s Annual Comprehensive 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 156
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 166
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 175
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 184
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 188
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 Annual Comprehensive
Financial Reports for the relevant year.
{city of
Carlsbad
Net Position by Component
Last Ten Fiscal Years
(dollars in thousands)
2011-12 2012-13 2013-14 2014-15
Governmental activities
Net investment in capital assets 780,727$ 782,500$ 784,210$ 783,298$
Restricted for:
Capital assets 192,713 182,685 175,468 178,228
Lighting and landscaping districts 2,246 2,958 4,703 5,263
Affordable housing 38,434 37,390 39,317 39,544
Habitat and agricultural mitigation management 4,799 2,665 1,713 1,708
Other purposes 4,022 3,685 3,774 3,059
Unrestricted 308,470 319,317 328,602 223,522
Total governmental activities net position 1,331,411$ 1,331,200$ 1,337,787$ 1,234,622$ 1
Business-type activities
Net investment in capital assets 311,392$ 307,000$ 305,681$ 307,122$
Restricted for:
Capital assets 45,522 45,990 46,632 47,315
Unrestricted 47,530 55,758 66,083 69,922
Total business-type activities net position 404,444$ 408,748$ 418,396$ 424,359$ 1
Total government
Net investment in capital assets 1,092,119$ 1,089,500$ 1,089,891$ 1,090,420$
Restricted for:
Capital assets 238,235 228,675 222,100 225,543
Lighting and landscaping districts 2,246 2,958 4,703 5,263
Affordable housing 38,434 37,390 39,317 39,544
Habitat and agricultural mitigation management 4,799 2,665 1,713 1,708
Other purposes 4,022 3,685 3,774 3,059
Unrestricted 356,000 375,075 394,685 293,444
Total net position 1,735,855$ 1,739,948$ 1,756,183$ 1,658,981$
Source: City of Carlsbad Annual Comprehensive Financial Reports
1 Net position for the prior year was restated in FY 2014-15, to reflect the application of GASB 68, Accounting &
Financial Reporting for Pensions
2 Habitat and agricultural mitigation management was combined with other purposes in FY 2019-20 due to
immateriality.
3 In FY 2020-21 a transfer of $47 million was made from the General Fund to the Golf Course Fund. The recorded
advance from the General Fund to the Golf Course Fund was removed as it was determined that repayment of the
advance is not projected in the near or foreseeable future.
156
{cityof
Carlsbad
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
788,035$ 788,078$ 793,090$ 786,965$ 791,124$ 789,335$
176,279 183,245 182,811 194,434 206,067 212,636
5,921 6,527 7,307 8,025 8,967 9,225
40,390 40,528 41,500 43,588 44,885 40,988
1,758 1,805 1,640 1,524 -2 -
2,948 2,818 2,800 4,329 5,444 6,251
245,078 249,816 262,023 289,000 286,386 249,699 3
1,260,409$ 1,272,817$ 1,291,171$ 1,327,865$ 1,342,873$ 1,308,134$
317,927$ 344,836$ 349,548$ 346,628$ 351,153$ 361,477$
45,950 40,098 39,522 38,540 41,244 41,462
73,285 85,153 88,576 97,509 94,140 149,954 3
437,162$ 470,087$ 477,646$ 482,677$ 486,537$ 552,893$
1,105,962$ 1,132,914$ 1,142,638$ 1,133,593$ 1,142,277$ 1,150,812$
222,229 223,343 222,333 232,974 247,311 254,098
5,921 6,527 7,307 8,025 8,967 9,225
40,390 40,528 41,500 43,588 44,885 40,988
1,758 1,805 1,640 1,524 -2 -
2,948 2,818 2,800 4,329 5,444 6,251
318,363 334,969 350,599 386,509 380,526 399,653
1,697,571$ 1,742,904$ 1,768,817$ 1,810,542$ 1,829,410$ 1,861,027$
157
Changes in Net Position
Last Ten Fiscal Years
(dollars in thousands)
2011-12 2012-13 2013-14 2014-15
Expenses
Governmental activities
General government 16,675$ 23,574$ 3 20,187$ 16,108$
Public safety 45,576 48,468 48,942 48,856
Community services 43,087 47,900 4 45,341 48,630
Public works 28,441 36,806 30,314 36,273
Interest and fiscal charges on long-term debt 298 4 1 -
Total governmental activities 134,077 156,752 144,785 149,867
Business-type activities
Carlsbad Municipal Water District 35,985 41,626 43,547 40,897
Golf course 11,190 10,668 11,032 10,538
Wastewater 11,330 13,556 12,488 12,629
Solid waste 2,922 2,918 2,856 2,973
Total business-type activities 61,427 68,768 69,923 67,037
Total government 195,504$ 225,520$ 214,708$ 216,904$
Program Revenues
Governmental activities
Charges for services:
General government 315$ 1,469$ 289$ 1,382$
Public safety 4,379 4,025 3,950 4,220
Community services 6,314 6,987 8,732 10,534
Public works 3,717 5,073 3,720 4,014
Operating grants and contributions 11,813 13,199 11,919 12,242
Capital grants and contributions 15,429 17,741 16,129 19,105
Total governmental activities 41,967 48,494 44,739 51,497
Business-type activities
Charges for services:
Carlsbad Municipal Water District 35,776 44,240 5 46,750 47,461
Golf course 6,127 6,278 6,635 6,709
Wastewater 10,989 12,402 12,896 12,875
Solid waste 2,961 3,060 3,320 3,245
Operating grants and contributions 1,201 38 90 59
Capital grants and contributions 4,560 2,855 3,198 5,879
Total business-type activities 61,614 68,873 72,889 76,228
Total government 103,581$ 117,367$ 117,628$ 127,725$
Net (Expense)/Revenue:
Governmental activities (92,110)$ (108,258)$ (100,046)$ (98,370)$
Business-type activities 187 105 2,966 9,191
Total government net expense (91,923)$ (108,153)$ (97,080)$ (89,179)$
158
{city of
Carlsbad
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
16,147$ 18,374$ 25,192$ 10 22,234$ 24,267$ 20,003$
50,463 55,994 62,630 10 67,968 75,249 80,295
51,191 54,212 51,897 57,978 60,771 57,654
37,464 34,317 36,875 36,897 41,419 35,481
1 3 2 4 2 -
155,266 162,900 176,596 185,081 201,708 193,433
39,458 45,219 51,658 51,638 51,198 56,319
10,545 10,211 10,560 11,035 10,252 10,280
12,613 12,626 13,495 15,238 16,931 9,063
2,997 3,272 3,089 3,840 4,382 5,086
65,613 71,328 78,802 81,751 82,763 80,748
220,879$ 234,228$ 255,398$ 266,832$ 284,471$ 274,181$
296$ 327$ 816$ 1,679$ 1,030$ 1,260$
3,980 4,647 4,805 4,784 4,711 5,020
10,711 12,154 11,588 10,755 9,324 8,080
4,152 3,952 3,768 4,574 4,142 5,662
11,912 12,630 13,054 17,307 18,437 26,459
12,042 7 22,789 22,993 13,842 16,802 9,565
43,093 56,499 57,024 52,941 54,446 56,046
39,854 8 44,817 50,095 46,431 46,332 49,668
6,988 7,119 7,973 7,979 6,637 8,108
12,963 13,467 13,885 14,099 13,849 14,027
3,206 3,302 3,427 3,440 3,563 3,387
5,646 2,471 1,611 1,260 399 3,484
2,011 13,322 5,484 4,864 6,327 7,601
70,668 84,498 82,475 78,073 77,107 86,275
113,761$ 140,997$ 139,499$ 131,014$ 131,553$ 142,321$
(112,173)$ (106,401)$ (119,572)$ (132,140)$ (147,262)$ (137,387)$
5,055 13,170 3,673 (3,678) (5,656) 5,527
(107,118)$ (93,231)$ (115,899)$ (135,818)$ (152,918)$ (131,860)$
(continued)
159
Changes in Net Position (continued)
Last Ten Fiscal Years
(dollars in thousands)
2011-12 2012-13 2013-14 2014-15
General Revenues and Other Changes in Net Position
Governmental activities
Taxes:
Property taxes 51,538$ 52,861$ 52,608$ 55,992$
Sales and use taxes 28,094 28,403 30,520 32,146
Transient occupancy taxes 12,872 14,702 17,472 19,713
Franchise taxes 4,852 5,118 4,907 5,427
Business license taxes 2,695 3,834 4,177 4,548
Real property transfer taxes 925 1,058 1,080 1,406
Vehicle license fees 53 1 55 - -
Income from property and investments 6,088 1,792 6,917 4,564
Other general revenues 419 426 429 609
Extraordinary gain/(loss)20,477 2 - (10,289) 6 -
Special items-Golf Course debt - - - -
Transfers (1,810) (656) (1,188) (1,264)
Total governmental activities 126,203 107,593 106,633 123,141
Business type activities
Property taxes 2,721 2,904 2,897 3,133
Income from property and investments 2,054 555 2,498 1,870
Other general revenues 106 85 99 623
Transfers 1,810 655 1,188 1,264
Special items-Golf Course debt - - - -
Total business-type activities 6,691 4,199 6,682 6,890
Total government 132,894$ 111,792$ 113,315$ 130,031$
Change in Net Position
Governmental activities 34,093$ (665)$ 6,587$ 24,771$
Business-type activities 6,878 4,304 9,648 16,081
Total government 40,971$ 3,639$ 16,235$ 40,852$
Source: City of Carlsbad Annual Comprehensive Financial Reports
1 The State of California ceased sending the city vehicle license fee revenues in FY 2011-12.
2 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.
3 The large increase in FY 2012-13 includes a repayment to SANDAG of $1.4 million in excess Transnet Funds on inactive/closed projects and a transfer of $4.5
million in surplus construction funds from the Poinsettia Lane Assessment District to be used in the refunding of Reassessment District No. 2012-1.
4 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.
5 The increase in FY 2012-13 was the result of a combination of a 5% increase in the number of water units sold coupled with an average 8% increase in water rates
charged to customers and a reimbursement from a lawsuit involving a landslide.
6 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.
7 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.
8 The decrease in FY 2015-16 was a result of a decrease in water sales during the fiscal year from drought conservation measures.
9 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.
10 The increase in FY 2017-18 is mainly due to changes in the city's pension discount rate.
11 The decrease is FY 2020-21 in income from property and investments was caused by unrealized losses created by adjusting the city's investments to fair market
value at June 30, 2021 and a decrease in the average yield on the treasurer's portfolio for the year.
12 In FY 2020-21 a transfer of $47 million was made from the General Fund to the Golf Course Fund. The recorded advance from the General Fund to the Golf Course
Fund was removed as it was determined that repayment of the advance is not projected in the near or foreseeable future.
160
{city of
Carlsbad
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
58,945$ 63,988$ 66,524$ 69,952$ 73,885$ 78,239$
34,843 33,999 33,674 38,510 36,491 42,579
20,943 22,267 24,233 26,320 18,898 15,584
5,632 5,475 5,812 6,100 5,864 5,774
4,895 4,328 5,026 5,322 5,414 5,705
1,546 1,393 1,463 1,715 1,247 1,786
- -- - - -
11,910 9 1,975 2,551 20,695 20,239 5,036 11
486 451 519 439 559 516
- -- - - -
- -- - - (8,427) 12
(1,240)(15,067)(136) (219) (303) (47,273)12
137,960 118,809 139,666 168,834 162,294 99,519
3,306 3,569 3,743 4,002 4,226 4,491
3,163 749 986 7,784 4,963 639 11
39 370 3 113 - -
1,240 15,067 136 219 303 47,273 12
- -- - - 8,427 12
7,748 19,755 4,868 12,118 9,492 60,830
145,708$ 138,564$ 144,534$ 180,952$ 171,786$ 160,349$
25,787$ 12,408$ 20,094$ 36,694$ 15,032$ (37,868)$
12,803 32,925 8,541 8,440 3,836 66,357
38,590$ 45,333$ 28,635$ 45,134$ 18,868$ 28,489$
161
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
2011-12 2012-13 2013-14 2014-15 2015-16
General Fund
Nonspendable 54,228$ 57,719$ 56,707$ 56,381$ 55,324$
Committed 1,000 1,000 1,000 1,000 1,000
Assigned 22,955 26,200 27,838 40,865 42,692
Unassigned 61,384 69,578 75,615 80,274 94,404
Total General Fund 139,567$ 154,497$ 161,160$ 178,520$ 193,420$
All Other Governmental Funds
Nonspendable
Special revenue funds 440$435$430$3$4$
Capital project funds - - - - -
Restricted
Special revenue funds 64,401 61,938 66,833 66,300 51,013 2
Capital project funds 177,372 167,009 1 157,712 1 161,499 176,280 2
Assigned
Capital project funds 123,465 121,861 131,627 136,237 131,939
Unassigned
Special revenue funds - - - - -
Debt service funds - - - - -
Total all other governmental funds 365,678$ 351,243$ 356,602$ 364,039$ 359,236$
Source: City of Carlsbad Annual Comprehensive Financial Reports
1 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.
2 Beginning in FY 2015-16, the Gas Tax fund balance was reclassified from a Special Revenue fund to a Capital Project fund.
3 In FY 2019-20, the General Fund advanced money to the Habitat Mitigation Fund, a Special Revenue fund, to be repaid to the
General Fund once funds are available.
4 In FY 2020-21 a transfer of $47 million was made from the General Fund to the Golf Course Fund. The recorded advance from the General Fund
to the Golf Course Fund was removed as it was determined that repayment of the advance is not projected in the near or foreseeable future.
162
{_city of
Carlsbad
2016-17 2017-18 2018-19 2019-20 2020-21
53,751$ 51,628$ 49,608$ 49,008$ 3,446$ 4
1,000 1,000 1,000 1,000 1,000
38,439 43,855 33,367 30,733 56,115
78,191 82,570 101,701 110,122 99,260
171,381$ 179,053$ 185,676$ 190,863$ 159,821$
1$ 1$ 1$1$ 1$
- -- -
51,677 53,246 57,465 59,295 56,465
183,245 182,812 194,434 206,067 212,635
146,994 151,306 162,139 165,267 166,206
- -- (234) 3 (228)
- -- -
381,917$ 387,365$ 414,039$ 430,396$ 435,079$
163
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(dollars in thousands)
2011-12 2012-13 2013-14 2014-15
Revenues:
Taxes 105,595$ 109,447$ 114,996$ 123,411$ 3
Intergovernmental 9,603 11,513 10,602 10,359
Licenses and permits 1,852 2,016 2,184 2,369
Charges for services 10,092 10,261 11,278 13,181
Fines and forfeitures 892 861 876 837
Income from property and investments 6,253 2,362 7,604 6,442
Contributions from property owners 9,927 12,029 9,042 10,688
Donations 206 411 210 440
Miscellaneous 697 1,969 1,219 2,550
Total revenues 145,117 150,869 158,011 170,277
Expenditures:
Current:
General government 16,992 23,072 21,471 17,903
Less: Interdepartmental charges (3,750) (3,858) (3,566) (3,807)
Public safety 44,915 46,162 47,333 48,915
Community services 40,402 40,899 41,505 44,501
Public works 11,773 11,299 15,442 16,350
Capital outlay 17,367 28,602 18,702 20,050
Debt service:
Principal retirement 851 316 159 -
Interest and fiscal charges 308 6 5 5
Total expenditures 128,858 146,498 141,051 143,917
Excess (deficiency) of revenues
over (under) expenditures 16,259 4,371 16,960 26,360
Other financing sources (uses):
Transfers in 19,887 8,087 11,477 14,857
Transfers out (23,097) (14,792) (16,415) (16,420)
Extraordinary gain (loss)12,847 2 - - -
Total other financing sources (uses)9,637 (6,705) (4,938) (1,563)
Net change in fund balances 25,896$ (2,334)$ 12,022$ 24,797$
Debt service as percentage of noncapital
expenditures1 0.99%0.24%0.13%0.00%
Source: City of Carlsbad Annual Comprehensive 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 With the dissolution of Redevelopment Agencies state-wide, the former Redevelopment Agency debt service funds were
transferred to trust funds in FY 2011-12.
3 Increase in taxes in FY 2014-15 due to growth in property and TOT taxes.
4 Includes a transfer out to the Golf Course Fund in the amount of $14.8 million for the defeasance of the golf course
construction bonds during FY 2016-17.
5 Increase in investment income for FY 2018-19 is due to an increase in the average yield on the investment portfolio for
the year as well as an increase due to the fair value adjustment done on investments at fiscal year end (per GASB 31).
6 Increase in public safety expenditures in FY 2018-19 is due to a voluntary $14.2 million additional payment to CalPERS to
reduce the city's unfunded pension liability in the safety plan.
7 Decrease in tax revenue for sales and transient occupancy taxes for FY 2020-21 is due to the effects of the COVID-19
pandemic and resulting stay at home orders on sales and transient occupancy taxes.
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2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
129,617$ 134,165$ 141,118$ 154,673$ 147,535$ 7 155,462$
11,290 11,963 11,608 14,647 15,505 23,653
2,467 3,034 2,999 2,668 2,739 2,399
12,913 14,309 14,145 13,221 11,525 11,615
854 740 679 581 760 429
9,970 3,845 4,622 23,275 5 24,989 7,018
8,009 13,330 12,898 10,301 6,623 5,850
417 349 332 1,385 426 321
1,503 1,467 1,991 3,316 2,641 1,786
177,040 183,202 190,392 224,067 212,743 208,533
17,221 27,925 26,625 24,033 25,762 22,450
(3,471) (3,345) (3,160) (4,581) (5,052) (5,146)
52,015 57,329 58,568 77,550 6 70,997 78,731
46,298 48,930 49,039 52,951 56,931 53,267
17,465 17,349 17,220 18,380 19,995 19,991
34,669 17,603 26,885 20,703 22,171 21,390
- - 10 10 11 8
6 5 7 5 12 17
164,203 165,796 175,194 189,051 190,827 190,708
12,837 17,406 15,198 35,016 21,916 17,825
9,970 20,849 11,513 11,881 11,183 9,760
(12,710) (37,613) 4 (13,590) (13,600) (11,486) (57,053)
- -- - - -
(2,740) (16,764) (2,077) (1,719) (303) (47,313)
10,097$ 642$ 13,121$ 33,297$ 21,613$ (29,488)$
0.00%0.00%0.01%0.01%0.01%0.01%
165
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
2011-12 51,538$ 28,733$ 12,872$ 4,852$ 3,669$ 925$ 3,006$ 105,595$
2012-13 52,888 29,301 14,702 5,118 3,834 1,058 2,546 109,447
2013-14 52,607 31,464 17,472 4,907 4,178 1,080 3,288 114,996
2014-15 55,992 1 33,202 19,713 2 5,427 4,548 1,406 3,123 123,411
2015-16 58,946 35,232 20,943 5,632 4,895 1,545 2,424 129,617
2016-17 63,988 1 34,543 22,267 3 5,475 4,328 1,393 2,171 134,165
2017-18 66,523 34,972 24,234 4 5,812 5,026 5 1,463 3,088 6 141,118
2018-19 69,952 40,795 7 26,320 6,100 5,322 1,715 4,469 154,673
2019-20 73,889 37,585 8 18,898 8 5,864 5,414 1,247 4,638 147,535
2020-21 78,247 43,726 15,584 8 5,774 5,705 1,786 4,640 155,462
Percentage change from FY 2011-12 to FY 2020-21:
45% 66% 35% 24% 59% 96% 85% 50%
1 Reflects improvement in the housing market and new construction.
2 The increase in TOT in FY 2014-15 is due to the openings of several new hotels and higher occupancy and room rates throughout the city.
3 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.
4 The increase in TOT in FY 2017-18 is due to higher room rates throughout most of the city's hotels and an opening of a new hotel.
5 The increase in Business License Taxes in FY 2017-18 is due to a significant number of delinquent payments being collected.
6 The increase in Gas Taxes in FY 2017-18 is due to new ongoing allocations received from the state's Road Maintenance and Rehabilitation Account.
7 The increase in Sales and Use Taxes in FY 2018-19 is due to overall growth and the ending of the state's sales and use tax "triple flip" in FY 2017-18.
8 The decreases in tax revenue for sales tax for FY 2019-20 and transient occupancy taxes for FY 2019-20 and FY 2020-21 is due to the effects of the COVID-19
pandemic and resulting stay at home orders on sales and transient occupancy taxes.
* Property Tax category also includes Vehicle License Fees (VLF) in lieu, property tax increment and CFD No. 1 special taxes.
Source: City of Carlsbad Annual Comprehensive Financial Reports
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Total General Governmental Tax Revenues - Last Ten Fiscal Years
(in thousands)
Property Tax Sales and Use Taxes TOT Other
166
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Water and Wastewater Rates
Last Ten Fiscal Years
Wastewater
Fiscal Year
Monthly Delivery
Charge
Base Price Per
Unit1
Monthly Base
Rate
2011-12 $19.80 $2.97 $24.53
2012-13 21.38 3.20 25.02
2013-14 20.07 3.19 25.52
2014-15 21.08 3.35 26.03
2015-16 22.19 3.53 27.81
2016-17 24.11 3.84 27.81
2017-18 24.72 3.94 27.81
2018-19 24.72 3.94 27.81
2019-20 25.02 4.04 28.66
2020-21 25.52 4.13 29.52
Source: City of Carlsbad
Water
1 One unit of water equals 748 gallons. The base price shown is for tier 1, which applies to the first
12 units of usage per month at a single family residence.
Note: Rates shown are for a 5/8" meter, which is the standard household meter size.
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Assessed Value of Taxable Property
Last Ten Fiscal Years
(dollars in millions)
Fiscal
Year
Residential
Property
Commercial
Property
Industrial
Property
Exemptions
and Other
Taxable
Property1
Net Assessed
Valuation
Change From
Prior Year
Estimated
Property Tax
Revenue2
Total Direct
Tax Rate3
2011-12 17,306 3,133 1,983 560 22,982 -0.13 44 0.1927
2012-13 17,222 3,237 1,884 614 22,957 -0.11 44 0.1927
2013-14 17,774 3,298 1,871 580 23,523 2.47 45 0.1927
2014-15 19,450 3,603 1,847 589 25,489 8.36 49 0.1927
2015-16 20,431 3,973 1,909 612 26,925 5.63 52 0.1927
2016-17 21,472 4,238 2,092 622 28,424 5.57 55 0.1927
2017-18 22,707 4,355 2,378 555 29,995 5.53 58 0.1927
2018-19 24,077 4,528 2,541 490 31,636 5.47 61 0.1927
2019-20 25,379 4,964 2,673 640 33,656 6.39 65 0.1927
2020-21 26,507 5,224 2,809 677 35,217 4.64 68 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.
3 The total direct tax rate is the city's proportionate share of Proposition 13 property taxes collected within the tax rate area.
Source: County of San Diego, California Auditor and Controller's Office
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.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Taxable Assessed Property Value
Last Ten Fiscal Years
(in millions)
Residential Property Commercial Property Industrial Property
169
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Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(rate per $100 of assessed value)
Fiscal
Year
City of
Carlsbad
Total Direct
Rate2
Carlsbad
Unified
School
District
San Diego
County
Educational
Revenue
Augmentation
Fund
Mira Costa
Community
College
Tri City
Hospital
District
All Other
Rates
Total Prop
13 Rate3
Voter
Approved
Debt4
Total Tax
Rate5
2011-12 0.1927% 0.3412% 0.1576% 0.1497% 0.0937% 0.0198% 0.0453% 1.0000% 0.0748% 1.0748%
2012-13 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0768 1.0768
2013-14 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0743 1.0743
2014-15 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0710 1.0710
2015-16 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0681 1.0681
2016-17 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0563 1.0563
2017-18 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0791 1.0791
2018-19 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0758 1.0758
2019-20 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.1015 1.1015
2020-21 0.1927 0.3412 0.1576 0.1497 0.0937 0.0198 0.0453 1.0000 0.0999 1.0999
Allocation of 1% Ad Valorem Property Taxes
Overlapping Rates for Tax Rate Area 090001
Source: County of San Diego, California Auditor and Controller's Office
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 The city has no general obligation bonds; therefore the Basic Tax Rate is the same as the Total Direct Tax Rate.
3 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%). With few exceptions, propertyis
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.
4 The majority of voter approved debt is related to various school district and hospital bonds.
5 The Total Tax Rate is the 1.00% Proposition 13 rate plus the Voter Approved Debt rate.
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Direct and Overlapping Property Tax Rates (continued)
Last Ten Fiscal Years
(rate per $100 of assessed value)
Total Tax
Rates1
County
Tax Rate
Areas2
Carlsbad
Unified
Schools
Oceanside
Unified
Schools
San Marcos
Unified
Schools
Vista
Unified
Schools
Encinitas
Union
Schools
Mira Costa
Comm.
College
Palomar
Comm.
College
Palomar
Health
District
MWD /
SDCWA3
Total Voter
Approved
Rates4
1.0561% 1 0.0000% 0.0000% 0.0000% 0.0000% 0.0423% 0.0137% 0.0000% 0.0000% 0.0000%0.0560%
1.0596 37 - - - - 0.0423 0.0137 - - 0.0035 0.0596
1.0669 3 - - - - 0.0423 - 0.0211 - 0.0035 0.0669
1.0731 2 - - 0.0559 - - 0.0137 - - 0.0035 0.0731
1.0804 24 - - 0.0559 - - - 0.0211 - 0.0035 0.0804
1.0964 3 0.0827 - - - - 0.0137 - - - 0.0964
1.0999 54 0.0827 - - - - 0.0137 - - 0.0035 0.0999
1.1132 1 - 0.0960 - - - 0.0137 - - 0.0035 0.1132
1.1048 5 - -- 0.0803 - - 0.0211 - 0.0035 0.1048
1.1073 3 0.0827 - - - - - 0.0211 - 0.0035 0.1073
1.1091 1 - - 0.0559 - - 0.0137 - 0.0360 0.0035 0.1091
1.1164 11 - - 0.0559 - - - 0.0211 0.0360 0.0035 0.1164
1.1359 1 0.0827 - - - - 0.0137 - 0.0360 0.0035 0.1359
Fiscal Year 2020-21 Voter Approved Debt Tax Rates for all Rate Areas
Source: County of San Diego, California Auditor and Controller's Office
1 The Total Tax Rate is the 1.00% Proposition 13 rate plus the Voter Approved Debt rate.
2 Tax rate areas are determined by the County of San Diego. There are currently thirteen tax rates distributed among the 146 tax rate areas of the city. The table above shows the
number of tax rate areas affected by each of the rates.
3 MWD is the Metropolitan Water District and SDCWA is the San Diego County Water Authority.
4 The majority of voter approved debt is related to various school district and hospital bonds.
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Principal Property Taxpayers
Current Year and Nine Years Ago
Taxpayer
Taxable Assessed
Value Rank
Percentage
of Total City
Net
Assessed
Value
Taxable Assessed
Value Rank
Percentage
of Total City
Net
Assessed
Value
Poseidon Water Desalination Plant 424,822,973$ 1 1.21% -$ 0.00%
La Costa Glen Retirement Community 276,265,671 2 0.78 230,236,508 1 1.00
Legoland California, LLC 252,623,430 3 0.72 128,722,242 3 0.00
La Costa Resort & Spa 240,911,267 4 0.68 116,833,774 5 0.51
The Forum Shopping Center 206,583,259 5 0.59 84,882,929 8 0.37
Levine Investments Limited Partnership 182,685,818 6 0.52
The Shoppes at Carlsbad 178,546,161 7 0.51 102,117,463 7 0.44
Park Hyatt Aviara Resort 160,542,900 8 0.46 149,845,296 2 0.65
Grand Pacific Carlsbad LP 160,427,282 9 0.46
La Costa Town Center, LLC 154,861,764 10 0.44
Carlsbad Premium Outlets 114,617,062 6 0.50
Pacific View Apartments 121,249,952 4 0.53
P P C Cascade LLC 82,935,307 9 0.36
HG Fenton Company 79,102,340 10 0.34
Total 2,238,270,525$ 6.36% 1,210,542,873$ 5.27%
Net assessed valuation 35,217,379,111$ 22,982,171,525$
Source: County of San Diego, California Assessor's Office
2021 2012
172
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Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Year
Total Tax Levy for
Fiscal Year1 Amount2
Percentage of
Levy
Collections in
Subsequent Years Amount
Percentage of
Levy
2011-12 $53,682,809 $52,778,359 98.32%$748,269 $53,526,628 99.71%
2012-13 54,469,819 53,677,921 98.55 575,090 54,253,011 99.60
2013-14 55,883,499 55,042,944 98.50 526,607 55,569,551 99.44
2014-15 60,266,230 59,509,285 98.74 550,190 60,059,475 99.66
2015-16 63,363,527 62,595,504 98.79 489,759 63,085,263 99.56
2016-17 67,116,590 66,233,111 98.68 561,730 66,794,841 99.52
2017-18 70,221,876 69,383,391 98.81 534,234 69,917,625 99.57
2018-19 74,560,530 73,518,065 98.60 554,726 74,072,791 99.35
2019-20 78,446,259 77,076,471 98.25 780,401 77,856,872 99.25
2020-21 82,787,902 81,504,185 98.45 N/A 81,504,185 98.45
1 Includes real property transfer taxes, homeowner exemptions and Proposition 172 public safety sales taxes.
2 Total collections include secured, unsecured, homeowners' exception and supplementary amounts distributed by the county.
Collections within the
Fiscal Year of the Levy Total Collections to Date
Source: County of San Diego, California Auditor and Controller's Office
$0
$20
$40
$60
$80
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Property Tax Levies & Collections
Last Ten Fiscal Years
(in millions)
Total Tax Levy for Fiscal Year1 Total Collections to Date
173
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174
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(dollars in thousands except per capita)
Fiscal
Year Capital Leases Loans Payable
Bonds/
Special Debt1
Installment
Purchase
Agreements Loan Payable2 Capital Leases Total
Percentage of
Personal
Income
Per
Capita
2011-12 -$ 475$ 17,345$ 3 2,585$ 22,830$ 14$ 43,249$ 1.00%401.67$
2012-13 -159 17,237 1,697 21,335 -40,428 0.92 373.48
2013-14 --16,645 905 19,837 -37,387 0.77 339.36
2014-15 --16,260 -18,429 -34,689 0.71 313.49
2015-16 970 -16,058 -17,670 -34,698 0.60 307.25
2016-17 784 --4 -15,901 -16,685 0.28 146.71
2017-18 588 ---14,944 -15,532 0.24 135.51
2018-19 378 ---16,827 -17,205 0.25 149.30
2019-20 156 ---15,327 -15,483 0.25 135.27
2020-21 ----13,750 -13,750 0.18 119.05
Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
Sources: MuniServices, LLC, California Department of Finance and US Census Data
Governmental Activities Business-Type Activities
1 Bond/Special Debt is net of amortized premiums.
2 The State Water Resources Control Board issued low interest loans for the Carlsbad Water Recycling Facility in 2005, 2006 and 2014. Varying amounts of principal and interest
are due annually. Payments are funded from recycled water user fees.
3 During FY 2006-07, Carlsbad Municipal Golf Course Revenue Bonds were issued for $18.5 million.
4 The Carlsbad Municipal Golf Course Revenue Bonds were defeased during FY 2016-17.
$402 $373 $339 $313 $307
$147 $136 $149 $135 $119
$0
$200
$400
$600
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Outstanding Debt per Capita
Last Ten Fiscal Years
(in dollars)
175
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Schedule of Direct and Overlapping Bonded Debt
Current Fiscal Year
Fiscal Year 2020-21 Assessed Valuation:$36,740,028,230
Redevelopment Incremental Valuation:1,522,649,119
Adjusted Assessed Valuation:$35,217,379,111
Total Debt City’s Share of
Overlapping Tax and Assessment Debt:06/30/21 Debt 6/30/21
Metropolitan Water District 26,830,000$ 1.13%303,179$
Mira Costa Community College District 306,265,000 27.76 85,003,851
Palomar Community College District 650,751,375 2.69 17,524,735
Carlsbad Unified School District 317,807,031 98.19 312,061,080
Carlsbad Unified School District Community Facilities District No 1 1,215,000 100.00 1,215,000
Oceanside Unified School District 253,121,176 0.00 10,125
Vista Unified School District 124,109,882 0.77 950,682
Encinitas Union School District 45,278,945 30.26 13,703,220
San Marcos Unified School District 279,770,706 17.80 49,793,590
San Marcos Unified School District CFD No. 4 14,220,000 32.78 4,661,174
San Marcos Unified School District CFD No. 5 12,675,000 100.00 12,675,000
San Dieguito Union High School District 431,325,000 8.88 38,288,720
San Dieguito Union HS District CFD No. 94-2 24,270,000 98.34 23,867,846
San Dieguito Union HS District CFD No. 95-2 5,790,000 8.92 516,294
Palomar Health District 415,526,602 1.66 6,901,897
Olivenhain Municipal Water District, Assess. Dist. No. 96-1 6,315,000 22.06 1,392,773
City of Carlsbad CFD No. 3, I.A. No. 1 & No. 2 18,050,000 100.00 18,050,000
City of Carlsbad 1915 Act Bonds 27,685,000 100.00 27,685,000
Total Overlapping Tax and Assessment Debt 2,961,005,717$ 614,604,166$
Source: MuniServices, LLC and County of San Diego, California Auditor and Controller's Office
1 Percentage of overlapping agency's assessed valuation located within boundaries of the city.
Percent
Applicable1
176
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Schedule of Direct and Overlapping Bonded Debt (continued)
Current Fiscal Year
Total Debt City’s Share of
Overlapping General Fund Obligation Debt:06/30/21 Debt 6/30/21
San Diego County General Fund Obligations 211,585,000$ 6.30% 13,334,087$
San Diego County Pension Obligation Bonds 400,125,000 6.30 25,215,878
San Diego County Superintendent of Schools General Fund Obligations 8,585,000 6.30 541,027
Palomar Community College District General Fund Obligations 1,560,000 2.69 42,011
Carlsbad Unified School District General Fund Obligations 38,190,000 98.19 37,499,525
San Marcos Unified School District General Fund Obligations 72,899,158 17.80 12,974,592
Vista Unified School District Certificates of Participation 995,000 0.77 7,622
San Dieguito Union High School District General Fund Obligations 12,730,000 8.88 1,130,042
Total Overlapping General Fund Obligation Debt 746,669,158$ 90,744,784$
Overlapping Tax Increment Debt (Successor Agency):2,850,000 100.00 2,850,000 2
Total Overlapping Debt:3,710,524,875$ 708,198,950$
City of Carlsbad Direct Debt:
City of Carlsbad Governmental Activities Obligations -$ 100.00 -$
Total City of Carlsbad Direct Debt -$ -$
Combined Total Debt 3,710,524,875$ 708,198,950$ 3
Source: MuniServices, LLC and County of San Diego, California Auditor and Controller's Office
1 Percentage of overlapping agency's assessed valuation located within boundaries of the city.
2 Created by the dissolution of the Redevelopment Agency in FY 2011-12.
3 Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds.
Ratios to FY 2020-21 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.67%
Ratios to FY 2020-21 Adjusted Assessed Valuation:
Governmental Activities Direct Debt 0.00%
Combined Total Debt 1.92%
Percent
Applicable1
177
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Direct and Overlapping Debt
Last Ten Fiscal Years
(rate per $1,000 of assessed value)
2011-12 2012-13 2013-14
Overlapping Tax and Assessment Debt:
Metropolitan Water District 0.110$ 0.080$ 0.062$
Mira Costa Community College District - - -
Palomar Community College District 0.448 0.375 0.361
Carlsbad Unified School District 8.527 8.312 7.921
Carlsbad Unified School District CFD No. 1 0.149 0.103 0.052
Oceanside Unified School District 0.001 0.001 -
Vista Unified School District 0.038 0.031 0.028
Encinitas Union School District 0.338 0.454 0.426
San Marcos Unified School District 3.103 1.711 2.248
San Marcos Unified School District Facility Improvement District 0.176 0.076 0.057
San Marcos Unified School District CFD No. 4 0.236 0.230 0.292
San Marcos Unified School District CFD No. 5 0.950 0.918 0.864
San Dieguito Union High School District -0.621 0.607
San Dieguito Union HS District CFD No. 94-1 0.004 0.004 0.004
San Dieguito Union HS District CFD No. 94-2 1.106 1.082 1.032
San Dieguito Union HS District CFD No. 95-2 0.022 0.022 0.023
San Dieguito Union HS District combined CFD - - -
Palomar Health District 0.434 0.353 0.336
Olivenhain Municipal Water District, Assess. Dist. No. 96-1 0.142 0.138 0.139
City of Carlsbad CFD No. 3, I.A. No. 1 & No. 2 1.063 1.045 1.000
City of Carlsbad 1915 Act Bonds 2.569 2.107 2.018
Total Overlapping Tax and Assessment Debt 19.416$ 17.663$ 17.470$
Overlapping General Fund Obligation Debt:
San Diego County General Fund Obligations 1.155$ 1.070$ 0.983$
San Diego County Pension Obligation Bonds 2.300 2.017 1.865
San Diego City Superintendent of Schools General Fund Obligations 0.055 0.047 0.042
Mira Costa Community College District Certificates of Participation 0.032 0.028 0.023
Palomar Community College District General Fund Obligations 0.008 0.006 0.006
Carlsbad Unified School District General Fund Obligations 2.028 1.967 2.086
San Marcos Unified School District General Fund Obligations 0.837 0.458 0.441
Vista Unified School District Certificates of Participation - 0.001 0.001
San Dieguito Union High School District General Fund Obligations 0.059 0.051 0.049
Other Unified School District Certificates of Participation 0.002 - -
Total Overlapping General Fund Obligation Debt 6.476$ 5.645$ 5.496$
Overlapping Tax Increment Debt (Successor Agency):-$ 0.376$ 0.341$
Total Overlapping Debt:25.892 23.684 23.307
City of Carlsbad Direct Debt:
City of Carlsbad Governmental Activities Obligations 0.021 0.007 -
Total City of Carlsbad Direct Debt 0.021$ 0.007$ -$
Combined Total Debt 25.913$ 23.691$ 23.307$
Source: MuniServices, LLC and County of San Diego, California Auditor and Controller's Office
178
(._City of
Carlsbad
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
0.049$ 0.039$ 0.030$ 0.023$ 0.017$ 0.013$ 0.009$
- -- 0.918 0.750 0.590 2.414
0.562 0.520 0.619 0.571 0.530 0.493 0.498
7.073 6.370 5.816 5.298 7.474 6.944 8.861
- -- 0.051 0.045 0.039 0.035
- -- - - - -
0.025 0.022 0.024 0.018 0.028 0.027 0.027
0.385 0.515 0.551 0.506 0.461 0.421 0.389
2.087 1.922 1.797 1.706 1.571 1.521 1.414
0.035 0.027 0.020 0.014 0.009 0.004 -
0.254 0.232 0.199 0.181 0.164 0.146 0.132
0.690 0.626 0.566 0.509 0.456 0.404 0.360
0.967 0.906 1.031 1.032 0.956 0.925 1.087
0.003 0.003 0.003 0.003 - - -
0.928 0.855 0.983 0.908 0.800 0.736 0.678
0.021 0.019 0.017 0.016 0.018 0.017 0.015
- -- - - - -
0.308 0.285 0.258 0.244 0.228 0.212 0.196
0.031 0.102 0.091 0.079 0.069 0.058 0.040
0.903 0.836 0.750 0.684 0.623 0.561 0.513
1.727 1.564 1.379 1.240 1.024 0.892 0.786
16.048$ 14.843$ 14.134$ 14.001$ 15.223$ 14.003$ 17.454$
0.857$ 0.709$ 0.648$ 0.572$ 0.510$ 0.436$ 0.379$
1.664 1.497 1.347 1.168 1.016 0.860 0.716
0.036 0.031 0.025 0.023 0.020 0.018 0.015
0.018 0.014 0.119 0.005 0.001 - -
0.005 0.004 0.003 0.002 0.002 0.001 0.001
1.846 1.692 1.598 1.447 1.313 1.176 1.065
0.407 0.376 0.378 0.459 0.421 0.401 0.368
0.001 0.001 0.001 - - - -
0.047 0.044 0.041 0.039 0.036 0.034 0.032
- -- - - - -
4.881$ 4.368$ 4.160$ 3.715$ 3.319$ 2.926$ 2.576$
0.290$ 0.250$ 0.212$ 0.177$ 0.143$ 0.110$ 0.090$
21.219 19.461 18.506 17.893 18.685 17.039 20.120
-0.036 0.028 0.020 0.012 0.005 -
-$ 0.036$ 0.028$ 0.020$ 0.012$ 0.005$ -$
21.219$ 19.497$ 18.534$ 17.913$ 18.697$ 17.044$ 20.120$
179
Legal Debt Margin Information
Last Ten Fiscal Years
(dollars in thousands)
2011-12 2012-13 2013-14 2014-15
Net assessed valuation 22,982,172$ 22,956,650$ 23,522,746$ 25,489,468$
Debt limit (25% x 15%)861,831 860,874 882,103 955,855
Less amount of debt applicable to limit:
Bonded debt 17,345 17,005 16,645 16,260
Loan payable 475 159 - -
Obligations under capital leases 14 - - -
Total net debt applicable to limit 17,834 17,164 16,645 16,260
Legal debt margin 843,997$ 843,710$ 865,458$ 939,595$
Total net debt applicable to the limit
as a percentage of debt limit 2.07%1.99%1.89%1.70%
Source: City of Carlsbad Annual Comprehensive Financial Reports
1 The golf course bonds were defeased during FY 2016-17.
Note: Under state finance law, the city's outstanding general obligation debt should not exceed 15% (as adjusted by
25% per the law) of total assessed property value. By law, the general obligation debt subject to the limitation may be
offset by amounts set aside for repaying general obligation bonds.
2.07%1.99%1.89%1.70%1.67%
0.07%0.05%0.03%0.01%0.00%
0.00%
1.00%
2.00%
3.00%
4.00%
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Percent of Debt Applicable to the Legal Debt Limit
Last Ten Fiscal Years
180
(City of
Carlsbad
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
26,924,891$ 28,423,782$ 29,994,964$ 31,635,528$ 33,655,907$ 35,217,379$
1,009,683 1,065,892 1,124,811 1,186,332 1,262,097 1,320,652
15,855 - 1 ----
- - ----
970 785 588 378 156 -
16,825 785 588 378 156 -
992,858$ 1,065,107$ 1,124,223$ 1,185,954$ 1,261,941$ 1,320,652$
1.67%0.07%0.05%0.03%0.01%0.00%
181
Pledged-Revenue Coverage
Last Ten Fiscal Years
2011-12 2012-13 2013-14 2014-15
Wastewater Revenue Bonds
Gross revenues 1, 5 12,391,225$ 12,599,601$ 13,699,286$ 13,723,835$
Less expenses 2, 5 6,645,436 7,094,310 6,989,194 7,249,798
Net available revenue 5,745,789$ 5,505,291$ 6,710,092$ 6,474,037$
Debt service
Principal 5 780,000$ 820,000$ 860,000$ 905,000$
Interest 5 152,468 111,469 68,419 23,191
Total debt service 932,468$ 931,469$ 928,419$ 928,191$
Coverage 6.16 5.91 7.23 6.97
Recycled Water Loans
Gross revenues 3 7,002,009$ 8,160,109$ 9,392,061$ 9,210,258$
Less expenses 4 4,133,530 4,019,176 3,640,786 3,826,699
Net available revenue 2,868,479$ 4,140,933$ 5,751,275$ 5,383,559$
Debt service
Principal 1,312,398$ 1,343,498$ 1,375,337$ 1,407,932$
Interest 564,084 532,983 501,144 468,550
Total debt service 1,876,482$ 1,876,481$ 1,876,481$ 1,876,482$
Coverage 1.53 2.21 3.06 2.87
Golf Course Revenue Bonds
Gross revenues 1, 6 7,863,951$ 6,777,292$ 7,747,116$ 8,428,375$
Less expenses 2, 6 6,177,438 5,954,896 6,125,159 6,302,019
Net available revenue 1,686,513$ 822,396$ 1,621,957$ 2,126,356$
Debt service
Principal 6 325,000$ 340,000$ 360,000$ 385,000$
Interest 6 785,750 771,600 755,850 739,088
Total debt service 1,110,750$ 1,111,600$ 1,115,850$ 1,124,088$
Coverage 1.52 0.74 1.45 1.89
Source: City of Carlsbad Annual Comprehensive 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.
5 Debt service on the wastewater revenue bonds was completed during FY 2015-16.
6 The golf course bonds were defeased during FY 2016-17.
3 Includes water (potable and recycled) operating and non-operating revenues and fees. In FY 2020-21 the State Water Resources
Board confirmed the pledged revenue includes potable, which was excluded in prior years.
4 Includes water (potable and recycled) operating and non-operating expenses, excluding interest expense and depreciation. In FY
2020-21 the State Water Resources Board confirmed the pledged revenue includes potable, which was excluded in prior years.
182
(_ City of
Carlsbad
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
13,723,835$ -$ -$ -$ -$ -$
7,249,798 -----
6,474,037$ -$ -$ -$ -$ -$
905,000$ -$ -$ -$ -$ -$
------
905,000$ -$ -$ -$ -$ -$
7.15 n/a n/a n/a n/a n/a
8,216,362$ 8,371,467$ 9,869,958$ 8,198,882$ 7,557,893$ 56,446,838$ 3,4
4,679,706 4,863,054 5,559,509 6,472,817 5,926,215 50,079,801 3,4
3,536,656$ 3,508,413$ 4,310,449$ 1,726,065$ 1,631,678$ 6,367,037$
1,441,301$ 1,475,461$ 1,510,433$ 1,546,234$ 1,582,886$ 1,620,408$
435,182 401,021 366,049 330,248 293,596 256,074
1,876,483$ 1,876,482$ 1,876,482$ 1,876,482$ 1,876,482$ 1,876,482$
1.88 1.87 2.30 0.92 0.87 3.39
8,196,853$ -$ -$ -$ -$ -$
6,273,320 -----
1,923,533$ -$ -$ -$ -$ -$
405,000$ -$ -$ -$ -$ -$
721,313 -----
1,126,313$ -$ -$ -$ -$ -$
1.71 n/a n/a n/a n/a n/a
183
Demographic and Economic Statistics
Last Ten Fiscal Years
Year
Total
Population
% of S.D.
County
Population
% Change from
Previous Year
% High
School
Graduate
% Bachelor's
Degree or
Higher Median Age
2011-12 107,674 3.43% 1.05% 95.3% 50.6%40.3
2012-13 108,246 3.44 0.53 88.5 35.4 39.3
2013-14 110,169 3.45 1.78 95.6 51.3 40.3
2014-15 110,653 3.43 0.44 96.0 51.9 41.1
2015-16 112,930 3.43 2.06 95.6 54.8 42.1
2016-17 113,725 3.43 0.70 95.8 54.2 41.9
2017-18 114,622 3.43 0.79 95.7 55.0 42.3
2018-19 115,241 3.44 0.54 95.7 58.1 42.6
2019-20 114,463 3.42 -0.68 95.0 59.5 44.4
2020-21 115,501 3.48 0.91 95.2 59.5 42.9
Sources: MuniServices, LLC
Population projections are from the California Department of Finance
2 Unemployment increase in FY 2019-20 is due to the COVID-19 pandemic.
Educational Attainment
1 Personal income is the estimated total aggregate income for the total population.
Unemployment rate estimates are from the California Employment Development Department, Bureau of Labor Statistics.
Household and demographic characteristics estimates are from the United States Census Data Sets Tables.
184
,(._City of
Carlsbad
Average
Household
Size
Personal
Income
(millions) 1
Per Capita
Personal
Income
City
Unemployment
Rate
2.58 4,304$ 39,975$ 6.30%
2.63 4,403 40,672 5.90
2.53 4,862 44,134 6.30
2.30 4,907 44,345 4.30
2.68 5,741 50,838 5.20
2.58 6,060 53,285 4.20
2.60 6,496 56,675 3.00
2.60 6,889 59,780 2.60
2.60 6,101 53,300 13.50 2
2.38 7,751 67,111 8.11
185
186
Principal Employers
Current Fiscal Year and Nine Years Ago
Employer Industry Employees Rank
% of Total City
Employment Employees Rank
% of Total City
Employment
ViaSat, Inc.Information Technology 2,481 1 3.23%2,193 3 4.01%
Legoland California Hospitality/Tourism 2,300 2 2.99%1,158 6 2.12%
Thermo Fisher Scientific Life Sciences 1,982 3 2.58%4,142 1 7.57%
Omni La Costa Resort & Spa Hospitality/Tourism 1,300 4 1.69%886 8 1.62%
Carlsbad Unified School District Education 1,092 5 1.42%885 9 1.62%
TaylorMade Golf Company Action Sports 960 6 1.25%2,498 2 4.57%
City of Carlsbad Government 748 7 0.97%
Nortek Security & Control Information Technology 637 8 0.83%
HM Electronics, Inc.Information Technology 571 9 0.74%
Gemological Institute of America Research/Education 555 10 0.72%1,344 5 2.46%
Callaway Golf Company Action Sports 1,637 4 2.99%
Genoptix, Inc.Life Sciences 1,098 7 2.01%
Alphatec Spine, Inc.Medical Manufacturing 765 10 1.40%
Subtotal Employees 12,626 16.44%16,606 30.36%
Total Employees Citywide (estimate)76,800 54,700
Source: City of Carlsbad Business License Data
Fiscal Year 2020-21 Fiscal Year 2011-12
187
{_city of
Carlsbad
Authorized Full-Time and 3/4-Time City Government Employees by Program Area
Last Ten Fiscal Years
Program Area 2011-12 2012-13 2013-14 2014-15
Policy and Leadership Group
City Attorney 7.00 7.00 7.00 7.00
City Clerk Services 6.25 6.00 5.00 5.00
City Council 1.00 1.00 1.00 1.00
City Manager 7.00 7.00 7.00 7.00
City Treasurer 0.75 0.75 0.75 0.75
Communications & Engagement 2.75 2.75 2.75 4.75 1
Administrative Services
Administration - - - -
Finance 30.50 30.50 31.50 31.50
Human Resources 9.00 9.00 9.00 11.00
Information Technology 22.50 22.50 22.50 22.50
Innovation & Economic Development - - - -
Public Safety
Police 162.00 161.00 161.00 162.00
Fire 87.75 87.75 88.00 89.00
Community Services
Community Services Administration - - - -
Community Development 50.00 47.00 44.00 44.00
Housing & Homeless Services 13.00 10.00 10.00 12.00
Library & Cultural Arts 51.25 51.25 51.25 50.25 1
Parks & Recreation 70.95 68.40 67.60 61.60 1
Public Works
Construction Management & Inspection - - - -
Environmental Management - - - -
Fleet & Facilities - - - -
General Services 39.60 39.55 40.60 39.90
Public Works Administration - - - -
Transportation 54.40 54.40 53.40 55.90
Utilities 68.55 67.65 65.40 64.60
Limited Term Personnel (Full-Time)- 1.00 2.00 -
Total Full Time Authorized Employees 684.25 674.50 669.75 669.75
Net Increase/(decrease) over prior year (14.75) (9.75) (4.75) -
Source: City of Carlsbad Operating Budget
Notes: Table Includes both full-time and 3/4 time employees
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 2014-15, the Policy and Leadership and Community Services divisions were reorganized.
2 During FY 2015-16, FY 2016-17, FY 2019-20 and FY 2020-21, the Public Works division restructured divisions.
3 During FY 2018-19, Police IT was consolidated with city IT, resulting in the transfer of 5.0 FTEs.
4 During FY 2018-19, Housing & Neighborhood Services was combined with Community Development.
5 During FY 2020-21, Housing & Homeless Services was established.
6 During FY 2020-21, employees were moved from City Manager and Community Development to create a new office of Innovation
& Economic Development and Community Services Administration.
188
{city of
Carlsbad
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
7.00 6.00 7.00 7.00 8.00 8.00
5.00 5.00 6.00 6.00 7.00 7.00
1.00 1.00 1.00 2.00 2.00 2.00
7.00 8.00 8.00 9.00 12.00 7.00 6
0.75 0.75 0.75 0.75 1.00 1.00
5.00 5.00 5.00 7.00 7.00 7.00
- -- - -3.00
32.50 33.00 32.00 32.00 33.00 28.00
11.00 11.00 11.00 11.00 14.00 17.00
19.50 20.00 27.00 32.00 3 35.00 37.00
- -- - -4.00 6
168.00 168.00 168.00 170.00 3 183.00 186.00
89.00 90.00 90.00 92.00 97.75 111.00
- -- - 3.00 3.00 6
44.00 44.00 44.00 59.00 4 67.00 53.00 5, 6
13.00 13.00 13.00 - 4 -14.00 5
50.50 50.50 50.50 50.50 52.50 52.50
58.15 57.15 57.00 55.00 55.00 55.00
- -- - -15.20 2
8.50 2 9.50 2 9.70 9.60 11.05 11.95
- -- - -35.10 2
28.10 2 51.30 2 52.00 53.00 47.85 2 -
8.05 2 9.85 2 12.30 7.40 7.60 7.85
57.35 2 33.00 2 32.00 35.00 44.15 2 43.70
60.85 2 60.20 2 59.00 61.75 62.10 63.95
3.75 6.75 7.75 4.75 0.75 -
678.00 683.00 693.00 704.75 750.75 773.25
8.25 5.00 10.00 11.75 46.00 22.50
189
Operating Indicators by Function/Program
Last Ten Fiscal Years
2011-12 2012-13 2013-14 2014-15
General Government
Number of applications processed (full and part-time) 1,998 10,904 1 9,527 8,551
Number of external new hires (full and part-time) 16 151 1 284 299
Number of internal promotions / transfers (full-time only)6 6 47 41
Business licenses processed 9,303 9,422 10,327 10,735
Number of outgoing payments processed 39,075 38,441 39,310 40,663
Public Safety
Police
Calls for service 93,248 90,122 87,976 91,314
Average priority one response (minutes)5.9 5.8 5.8 6.5
Cases 7,963 8,314 8,296 8,349
Fire
Emergency responses 9,106 10,755 9,925 9,830
Response time: arrivals on scene within goal standard 72%71%63%63%
Community Development
Affordable housing units completed - 59 - -
Financial assistance to affordable housing projects 780,000$ 7,408,000$ -$ 2,646,000$
Building permits issued 1,400 1,500 1,400 1,600
Building inspections conducted 19,000 24,000 19,000 21,000
Final inspections (residential dwelling units)271 440 190 200
Final inspections (commercial square feet)n/a n/a 45,000 60,000
Code Enforcement Actions (activities)3,827 4,943 4,794 5,389
Community Services
Library - total material circulation 1,358,839 1,348,333 1,369,369 1,293,282
Library - patron visits 858,422 821,045 791,533 804,003
Cultural Arts - number of events 50 50 62 80
Arts - attendance of events 75,000 80,000 75,000 87,000
Recreation - youth sports participants 1,200 1,200 2,292 2 1,000
Recreation - adult sports participants 5,450 5,200 5,600 6,150
Recreation - enrichment class enrollees 12,650 12,200 10,350 19,030 3
Recreation - special events participants 10,000 13,000 13,600 17,841 3
Recreation - aquatics classes conducted 557 575 1,018 2 1,224
Trees trimmed 1,863 1,936 1,920 2,018
Public Works
Streets
Centerline road miles resurfaced with overlay or slurry seal 25.2 24.3 14.8 18.1
Carlsbad Municipal Water District
Average consumption (millions of gallons per day)14.4 15.4 15.9 14.6
Annual water deliveries (acre feet)16,104 17,248 17,801 16,368
Water connections 28,379 28,947 29,045 29,190
Wastewater
Sewage pumped (millions of gallons per day)6.92 6.65 6.53 5.90
Annual flow (millions of gallons)2,524 2,426 2,384 2,152
Wastewater connections 22,631 22,955 23,282 23,431
Source: City of Carlsbad
1 Beginning in FY 2012-13, part-time applicants were added to the number of applicants and new hires.
2 Increases in the number of participants is the result of the opening of the Alga Norte Community Park in FY 2013-14.
3 Increases in the number of enrichment class and special events participants are the results of overall higher attendance
and including recategorized classes previously not classified or included as enrichment classes or special events in prior years.
4 The decrease in patron visits is due to the temporary closures of library facilities for remodeling during FY 2015-16.
5 The decrease is due to the time involved with the implementation of a new licensing system during FY 2016-17.
6 Restated in FY 2019-20. Various large commercial, industrial and residential projects were permitted.
7 Reporting of information is not available for FY 20167-17 due to the implementation of a new permitting system.
8 Beginning in FY 2016-17, 2,500 acre feet of contracted desalinated water is included in the water purchase totals.
10 Data is for the calendar year.
11 FY 2019-20 had decreases in some public facing programs and services due to the impacts of the COVID-19 pandemic.
190
{city of
Carlsbad
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
8,037 9,544 9,455 8,495 8,012 5,469
260 292 311 345 248 181
31 58 44 66 66 34
11,449 8,142 (5)11,267 9,546 10,180 10,164
41,398 41,304 41,869 43,520 44,128 41,164
92,061 84,858 90,760 99,562 112,323 110,448
6.1 5.9 5.8 5.7 5.5 5.2
9,253 8,884 8,643 8,705 8,774 8,222
11,455 12,183 6 12,520 6 12,833 6 13,331 6 12,345
64%78%6 76%6 76%6 75%6 75%
- - - - 157 10 119
-$ 1,280,000$ -$ -$ -$ 8,300,000$
3,000 4,500 4,392 4,884 6 4,464 4,645
23,000 27,000 22,671 21,527 6 21,209 17,044
200 600 289 215 6 268 309
60,000 95,000 155,292 2,350,975 6 365,644 403,397
10,994 n/a 7 9,538 8,154 6 7,360 6,443
1,103,090 1,243,228 1,169,247 1,185,390 975,024 11 536,078 11
609,679 4 720,205 685,188 668,973 483,233 11 20,214 11
88 79 82 96 51 11 135 11
85,000 79,067 65,817 61,531 37,913 11 9,724 11
1,000 968 1,003 1,260 993 11 -
5,600 4,500 4,800 4,800 2,400 11 -
19,632 17,402 12,996 17,900 9,641 11 3,270 11
19,474 12,150 11,645 9,600 3,705 11 300 11
684 733 778 830 770 11 715 11
1,965 1,971 1,954 4,340 4,678 4,500
20.0 23.8 25.8 8.3 14.9 -
12.1 13.1 14.3 13.0 12.7 13.5
13,578 14,616 8 16,032 14,563 14,249 14,731
29,190 29,782 30,054 30,131 30,265 30,439
6.17 5.82 6.32 6.03 6.31 6.27
2,252 2,125 2,306 2,200 2,305 2,288
23,431 23,747 23,863 23,959 24,040 24,103
191
Capital Asset Statistics
Last Ten Fiscal Years
2011-12 2012-13 2013-14 2014-15
Community Services
Number of parks and community fields 31 31 33 33
Acres of developed parks and community fields 183 183 281 319
Acres of open space and community fields 790 755 728 728
Miles of open space trails 47 47 47 47
Number of pools 1 1 3 3
Number of community centers 4 4 4 4
Number of libraries 3 3 3 3
Number of Materials in Library Collections 645,414 625,893 581,865 574,775
Public Safety
Fire Protection
Number of stations 6 6 6 6
Number of fire trucks 12 12 13 12
Number of ambulances 5 6 8 7
Number of other fire vehicles 15 15 16 15
Police Protection
Number of patrol and other vehicles 90 88 114 114
Number of motorcycles 11 13 13 14
Public Works
Carlsbad Municipal Water District
Miles of pipelines 527 534 534 534
Wastewater
Miles of sewers 288 288 288 288
Streets
Miles of streets 340 343 346 347
Number of street lights 7,142 7,179 7,236 7,262
Number of traffic signals 172 174 174 177
Source: City of Carlsbad
1 During FY 2018-19, the number of vehicles was updated to include both active and reserve vehicles.
2 In FY 2019-20, a change in the reporting methodology was implemented to include all first responder vehicles.
3 In FY 2019-20, only active lines were counted. Prior years included abandoned and future lines.
192
(_ City of
Carlsbad
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
33 33 33 33 33 33
319 319 319 319 319 322
728 728 728 787 802 817
47 47 47 52 52 67
3 3 3 3 3 3
4 4 5 5 5 5
3 3 3 3 3 3
563,581 491,956 477,149 473,154 477,042 497,407
6 6 6 6 1 6 6
12 12 13 14 1 13 2 13
6 5 5 5 1 6 2 6
18 20 20 25 1 25 2 27
106 106 96 119 1 119 119
15 12 13 13 1 15 15
559 559 559 559 535 3 535
288 288 288 288 272 265
348 350 350 350 350 350
7,265 7,334 7,337 7,388 7,520 7,527
177 177 178 179 181 181
193
T
h
is
p
a
g
e is intentionally left blank.
194