2021-ACFR
City of Encinitas
Encinitas, California
Annual Comprehensive Financial Report
and Independent Auditor’s Reports
For the Year Ended June 30, 2021
Supported by the Finance Department
Teresa S. McBroome
Tom Gallup
Monica Attili
Quynh Dinh
Kelly Sanderson
Alexis Angelini
Stella Huang
Johnny Thai
Annemarie Clisby
Julie Pickard
Annamae Lagdaan
Jules Ramos
Chase Belanio
Barbara Cervantes
Emmanuel Romero
Director of Finance/City Treasurer
Assistant Director of Finance
Finance Manager – Accounting
Finance Manager – Operating
Finance Manager - Budget
Finance Analyst
Finance Analyst
Finance Analyst
Accountant
Payroll Specialist
Finance Technician
Finance Technician
Finance Technician
Contractor
Contractor
INTRODUCTORY SECTION
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City of Encinitas
Comprehensive Annual Financial Report
For the Year Ended June 30, 2021
Table of Contents
Page
INTRODUCTORY SECTION (Unaudited)
Table of Contents
Transmittal Letter .......................................................................................................................................... i
List of City Officials ..................................................................................................................................... .xiii
Organization Chart ..................................................................................................................................... ..xiv
Certificate of Achievement for Excellence in Financial Reporting – GFOA ................................................ .xv
FINANCIAL SECTION
Independent Auditor’s Report on Financial Statements ......................................................................... 1
Management’s Discussion and Analysis (Required Supplementary Information – Unaudited) ........... 5
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position .............................................................................................................. 25
Statement of Activities and Changes in Net Position ...................................................................... 26
Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet ......................................................................................................................... 33
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position ............................................................... 34
Statement of Revenues, Expenditures, and Changes in Fund Balances .................................. 35
Reconciliation of the Governmental Statement of Revenues,
Expenditures, and Changes in Fund Balances to the Government-wide
Statement of Activities and Changes in Net Position ............................................................. 36
Proprietary Fund Financial Statements:
Statement of Net Position ........................................................................................................ 38
Statement of Revenues, Expenses, and Changes in Net Position ........................................... 40
Statement of Cash Flows ......................................................................................................... 42
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position ......................................................................................... 49
Statement of Changes in Fiduciary Net Position ...................................................................... 50
Notes to the Basic Financial Statements ......................................................................................... 53
City of Encinitas
Comprehensive Annual Financial Report
For the Year Ended June 30, 2021
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued):
Required Supplementary Information (Unaudited):
Budgetary Information ........................................................................................................................ 115
Budgetary Comparison Schedule:
General Fund ................................................................................................................................ 116
Infrastructure Improvements Special Revenue Fund .................................................................... 118
Schedule of Changes in the Net Pension Liability and Related Ratios ................................................ 119
Schedule of the City’s Proportionate Share of the Net Pension Liability .............................................. 121
Schedule of Contributions - Pension ................................................................................................... 125
Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................... 131
Schedule of Contributions - OPEB ...................................................................................................... 133
Supplementary Information:
Non-Major Governmental Funds:
Combining Balance Sheet ............................................................................................................ 138
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ...................... 140
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Grants and Housing Special Revenue Fund ........................................................................... 142
Development Impact Special Revenue Fund .......................................................................... 143
Lighting and Landscaping Special Revenue Fund ................................................................... 144
Internal Service Funds:
Combining Statement of Net Position ........................................................................................... 146
Combining Statement of Revenues, Expenses, and Changes in Net Position .............................. 147
Combining Statement of Cash Flows ............................................................................................ 148
STATISTICAL SECTION (Unaudited)
Index ........................................................................................................................................................ 149
Financial Trends:
Net Position by Components – Last Ten Fiscal Years ........................................................................ 150
Changes in Net Position – Last Ten Fiscal Years ............................................................................... 152
Fund Balances of Governmental Funds – Last Ten Fiscal Years ........................................................ 156
Changes in Fund Balances of Governmental Fund – Last Ten Fiscal Years ....................................... 158
Revenue Capacity:
Assessed Value of Taxable Property – Last Ten Fiscal Years ............................................................ 160
Principal Property Taxpayers – Current year and Nine Years Ago ...................................................... 161
Property Tax Levies and Collections – Last Ten Fiscal Years............................................................. 163
Direct and Overlapping Property Tax Ratios – Last Ten Fiscal Years ................................................. 164
City of Encinitas
Comprehensive Annual Financial Report
For the Year Ended June 30, 2021
Table of Contents (Continued)
Page
STATISTICAL SECTION (Continued):
Debt Capacity:
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ............................................................. 168
Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years ................................................ 170
Schedule of Direct and Overlapping Bonded Debt .............................................................................. 171
Legal Debt Margin Information – Last Ten Fiscal Years ...................................................................... 172
Historical Debt Service Coverage – Last Ten Fiscal Years ................................................................. 174
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years .......................................................... 176
General Governmental Tax Revenue by Source................................................................................. 178
Taxable Sales by Business Type – Last Ten Fiscal Years .................................................................. 179
Principal Employers – Current Fiscal Year and Nine Years Ago ......................................................... 180
Operating Information:
Full-Time and Part-Time Employees by Function – Last Ten Fiscal Years ......................................... 181
Operating Indicators by Function – Last Ten Fiscal Years .................................................................. 182
Capital Asset Statistics by Function – Last Ten Fiscal Years .............................................................. 184
Cardiff Sanitary Division:
Rate Schedule for Annual Sewer Charges.......................................................................................... 188
Historical Service Charges Billed ........................................................................................................ 189
Ten Largest Customers ...................................................................................................................... 190
Historical Service Connections ........................................................................................................... 190
San Dieguito Water District:
Schedule of Water Rates .................................................................................................................... 192
Bi-Monthly Meter Service Availability Charges .................................................................................... 192
Historic Potable Water System Revenues – Last Ten Fiscal Years .................................................... 193
Historic Recycled Water System Revenues – Last Ten Fiscal Years .................................................. 193
Summary of Water Production by Source – Last Ten Fiscal Years ..................................................... 194
Summary of Water Deliveries by Source – Last Ten Fiscal Years ...................................................... 194
Sales by Customer Class ................................................................................................................... 195
Total Service Connections by Category – Last Ten Fiscal Years ........................................................ 195
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TRANSMITTAL LETTER i INTRODUCTORY SECTION
i
December 1, 2021
Honorable Mayor, City Council and Citizens of the City of Encinitas, California:
It is a pleasure to present the Fiscal Year 2020-21 Annual Comprehensive Financial Report (ACFR)
for the City of Encinitas and its related entities. This report was prepared to assist those interested in
understanding the financial condition and results of City operations for the fiscal year ended June 30,
2021 and includes financial information for the City of Encinitas (“City”), the San Dieguito Water
District, the Encinitas Housing Authority, and the Encinitas Public Financing Authority. These
financial statements have been prepared in accordance with generally accepted accounting principles
(GAAP) and audited in accordance with generally accepted auditing standards. Responsibility for the
accuracy of the data, the completeness and reliability of the presentation, including all disclosures,
rests with City management.
To provide a reasonable basis for making the presentations shown in this report and to compile
sufficient reliable information for the preparation of the City’s financial statements, the management
of the City has established a comprehensive internal control framework designed to protect the City’s
assets from loss, theft, or misuse. Because the cost of internal controls should not exceed their
benefits, the City’s internal controls have been designed to provide reasonable rather than absolute
assurance that the financial statements will be free from material misstatements.
The City’s financial statements have been audited by Davis Farr LLP, certified public accountants.
The independent auditor concluded based on the audit, that there was reasonable basis for rendering
an unmodified opinion (or a “clean audit”) on the City’s financial statements for the fiscal year ended
June 30, 2021 which means that in the auditor’s opinion, the financial statements accurately present
the City’s financial position.
Management’s Discussion & Analysis (MD&A) immediately follows the independent auditor’s
report and provides a narrative introduction, overview, and analysis of the basic financial statements.
The MD&A complements this letter of transmittal and should be read in conjunction with it.
CITY PROFILE AND BACKGROUND
The City of Encinitas was incorporated in October 1986 as a general law city, bringing together the
communities of New and Old Encinitas, Cardiff-by-the-Sea, Leucadia, and Olivenhain. Encinitas is
located in northern San Diego County approximately 25 miles north of downtown San Diego on the
Southern California coast. The City with an estimated population of 62,000 covers approximately 21
square miles and is predominately residential with two major commercial corridors.
TRANSMITTAL LETTER i INTRODUCTORY SECTION
ii
GOVERNANCE
The City is governed by a City Council consisting of a Mayor and four Council members under the
Council-Manager form of government. The Mayor is elected at-large for a two-year term of office.
The City of Encinitas has transitioned to a system where City Council members are elected by district
instead of serving "at large" with the sequence of elections for district elections in Council Districts
3 and 4 in 2018, and district elections in Council Districts 1 and 2 in 2020. The transition to district-
based elections was completed in 2020. In the general municipal election held on November 3, 2020,
the Mayor was elected for a full two-year term of office and Council Members were elected by district
for a full four-year term of office for Districts 1 and 2.
The City Council appoints the City Manager and City Attorney. All other staff positions are appointed
by the City Manager or her designee. The City Council acts as the Board of Directors for the San
Dieguito Water District, the Encinitas Housing Authority, and the Encinitas Public Financing
Authority.
MUNICIPAL SERVICES
The City provides a full range of municipal services such as:
Fire and paramedic services Law enforcement (contract)
Marine safety Parks, beaches and trails
Development services Recreation services
Street maintenance and construction Traffic control
Wastewater services Water services
CITY FACILITIES
City Hall is located on Vulcan Avenue between D and E Streets, adjacent to the Encinitas Train
Station and downtown. The City maintains an active Community and Senior Center located at
Encinitas Boulevard and Balour Drive; the 44-acre Encinitas Community Park located at 425 Santa
Fe Drive along with 20 other park sites. The City’s Moonlight Beach located at 400 B Street attracts
an estimated three million visitors annually. There are six fire stations located throughout the city as
well as one sheriff substation which is owned and operated by the County of San Diego. The corporate
yard for both the City of Encinitas and San Dieguito Water District is located on Calle Magdalena
near Encinitas Boulevard. The Wastewater Collections division is located at the San Elijo Water
Reclamation Facility located in Cardiff.
BUDGETING OVERVIEW
The City develops and adopts both an operating and a capital budget on a two-year budget cycle.
Amounts are appropriated for the first year only, with the amounts for the second year subject to
revision before appropriation. Any changes to the operating or capital budgets must be approved by
the City Council. The City also publishes a six-year capital improvement program and financial plan
which is updated as part of the two-year budget cycle. This document provides management and the
City Council with long-term financial planning information and tools. Online access to detailed City
financial information is available on the City’s website.
The City uses a web-based tool that allows the user to sort and filter City financial information to
obtain the specific financial information desired. This tool may be found on the City’s website at
https://stories.opengov.com/encinitasca/published/YrCg4GPpU.
TRANSMITTAL LETTER • INTRODUCTORY SECTION
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FACTORS AFFECTING FINANCIAL CONDITION OF THE CITY
Global Pandemic and Local Economy – Encinitas enjoys a strong and well diversified tax base and
over the years, the property values and personal income levels within the City have generated tax
revenues sufficient to support the level of municipal services and facilities for the community to
enjoy. In the past, the tax base has performed well in good economic times and has also been able to
weather the financial impacts during slower economic times. While revenues remained flat during
the previous year with the outbreak and spread of the novel virus, coronavirus (COVID -19), and the
stay at home orders issued by the California Governor, the City’s property tax and sales tax revenue
has remained strong and increased as the pandemic continued this year. The net taxable assessed
value of property in the City has grown 57.3 percent since Fiscal Year 2010-11 (ten years ago). For
Fiscal Years 2019-20 and 2020-21 taxable values increased 4.8 percent and 5.4 percent, respectively.
General Fund Revenue - Property tax, and sales and use tax revenue represent approximately 86
percent of the City’s total General Fund revenue. Property tax revenue in FY 2020-21 totaled $52.5
million which was an increase of $3.0 million, or 6.1 percent, compared to FY 2019-20. Sales and
use tax revenue in FY 2020-21 increased by $1.7 million, or 12.4 percent, to $15.5 million compared
to FY 2019-20. Transient occupancy taxes (TOT) totaled approximately $2.3 million an increase of
approximately $0.4 million or 18.5 percent compared to FY 2019-20. The continuation of the
pandemic affected other revenues in the General Fund such as charges for services related to the
cancellation of recreation program, and a reduction in building and engineering fees, and fines and
penalties. Total General Fund revenues for FY 2020-21 of $83.3 million increased by approximately
$3.5 million or 4.3 percent compared to revenues in FY 2019-20 of $79.8 million.
Financial Strength and Sustainability – Due to the City’s conservative budgeting, strong reserves,
and re-evaluation of its CIP program, the City of Encinitas continues to be well positioned to weather
economic fluctuations. The City has been evaluated and rated by internationally recognized third
party reviewers and on June 29, 2021, Standard & Poor’s Rating Services (S&P) affirmed its ‘AAA’
issuer credit rating (ICR) for the City of Encinitas. According to S&P, the ‘AAA’ ICR reflects the
City’s:
• Very strong economy, with access to a broad and diverse metropolitan statistical area
(MSA);
• Very strong management, with strong financial policies and practices under S&P’s Financial
Management Assessment (FMA) methodology;
• Strong budgetary performance;
• Very strong budgetary flexibility;
• Very strong liquidity; and
• Very strong debt and contingent liability profile.
The City had approximately $42.1 million of general fund bonded debt and capital leases outstanding
at June 30, 2021, with scheduled payments of principal and interest of $3.7 million in FY 2020-21.
This debt service as a percentage of the General Fund budget is 5.2 percent, which is well below the
City’s debt service policy which states that debt service paid each year shall not exceed 15 percent of
the General Fund budget.
Development and Maintenance of Financial Reserves - The City has an established financial policy
regarding maintenance of adequate financial reserves. The City sets aside 20 percent of General Fund
operating expenditures for contingencies (unanticipated events that could negatively impact the
City’s financial condition). The City has never had occasion to draw on this reserve, since its
inception in the early 1990’s. The City also maintains a General Fund budget stabilization reserve,
TRANSMITTAL LETTER i INTRODUCTORY SECTION
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established in 2007 in anticipation of the ensuing recession. This reserve is funded at a minimum of
two percent of operating revenues. The City has not had any need to draw on this reserve, even though
operating revenues remained flat in the previous fiscal year from the effects of the global pandemic
and shutdown orders. Any amounts remaining after these two reserves are fully funded are considered
available for City Council directed use, primarily for future funding of capital improvements. General
Fund reserves for contingencies and budget stabilization total $17.0 million and funding available for
capital improvements was $19.9 million as of June 30, 2021.
ACCOMPLISHMENTS –
Based on direction by the City Council, highlighted below are the City’s accomplishments this fiscal
year.
Response to COVID-19 – As a result of the global pandemic, the City continued to pivot away from
traditional operations and improved the virtual service operations that had begun at the end of of FY
2019-20. Budget cuts were made across the board in all departments. Encinitas administered support
to small businesses through the Coronavirus Aid, Relief, and Economic Security (CARES) Act
providing assistance to 200 small businesses by distributing $500,000 in direct financial assistance
and an additional $75,000 in the form of a grant to the Cardiff-By-The-Sea Foundation which
administered a Grants to Small Businesses program. No cost permits continued to be provided with
accelerated processing to allow businesses to operate outside and in the public right-of-way. Window
clings were delivered to businesses stating “Facial Coverings Required” to help present a unified
message to the patrons of Encinitas businesses the Encinitas CARES program was launched with the
purchase and distribution of 2,000 three-ply masks. The City made great effort to provide extensive
and up to date communication to the public, providing important information as new information
became available on almost a daily basis. The City continued to strengthen its connection with the
Chamber of Commerce and the 101 Associations to assist in the delivery of information to the
business community, and to receive feedback regarding the best and most effective levels of
assistance that the City could provide. The Senior Nutrition Program participation more than doubled
with the City providing more than 80 meals a day. Meals were available for pick-up or delivery.
The City of Encinitas received $209,521 in Community Development Block Grant/CARES Act
funding (CDBG-CV) which was allocated to a COVID-19 Emergency Rental & Utility Assistance
program. Approximately 43 households were assisted. Additionally, $118,126 of previous year
CDBG annual grant award funding was reallocated to increase public service programs being
provided to families in response to the COVID-19 pandemic. The City of Encinitas received an
additional CDBG-CV allocation of $453,824 which is expected to be allocated to eligible assistance
programs in FY 2021-22.
The Encinitas Housing Authority utilized the funds to cover the cost of rent for five months for
families receiving assistance on the program. The program also received $25,852 of CARES Act
Administrative funding to help cover administrative expenses associated with the program.
In September 2020, the Section 8 Housing Choice Voucher Program received $115,004 in CARES
Act related Housing Assistance Payment funding to help those effected by the COVID-19 pandemic.
Digital Services Focus – Digital communication became paramount as society transitioned to an
online environment. The City innovated myEncinitas T.V. and the myEncinitas application to allow
people to learn about the City and conduct business from any location using any type of device. The
myEncinitas solutions combine with existing Customer Self Service functionality enabling customers
to submit permits, pay invoices, schedule inspections, and access information remotely.
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Cyber Security 24/7 Operations – The City implemented a 24/7 cybersecurity monitoring and
response Security Operations Center (SOC) to investigate and mitigate attempted cyber breaches
before they impact services.
Refundings/Refinancings – During FY 2020-21, the City worked on the refinance of the 2014 Lease
Revenue Bonds which were originally issued to purchase the Pacific View property. The City will
save approximately $85,000 per year in debt service costs with an overall savings of $2.1 million
over 24 years.
As the agent for the Community Facilities District #1 (the CFD), the City worked on the refinancing
of the CFD #1 2012 Special Tax Refunding Bonds. The CFD was formed to fund the public
improvements for the Encinitas Ranch master-planned development. The property owners (residents
and businesses) within the CFD will save approximately $230,000 per year in debt service costs with
an overall savings of $2.1 million over nine years.
Homelessness - In further efforts to address homelessness in Encinitas, in February 2021, the City
Council approved Resolution No. 2021-14, adopting the Homeless Action Plan (HAP). The HAP
serves as a guiding document to address the needs of individuals and families experiencing
homelessness in partnership with non-profit homeless services providers, faith-based organizations,
businesses, 101 and chamber organizations, staff, residents, and other stakeholders, to strategically
respond to and address homelessness. In May 2021, the City Council authorized the extension of the
Jewish Family Services Safe Parking Program agreement, which allowed the city to continue leasing
a portion of the Leichtag Commons to provide a Safe Parking Program Lot.
In June 2021, the City Council approved an amendment to continue the Memorandum of
Understanding (MOU) with the Community Resource Center utilizing $250,000 in District 76
Homeless Prevention and Intervention funds with the objective of reducing homelessness through
intervention and supportive services.
Housing Element – The 6th Cycle Housing Element was timely adopted by City Council on April 7,
2021 and certified by the State Department of Housing and Community Development (HCD) on July
13, 2021. This is the first Housing Element that was timely adopted by the City and certified by
HCD.
Community Choice Energy (CCE) - On September 18, 2019, Council officially formed and joined a
new CCE agency, the San Diego Community Power (SDCP), along with the Cities of San Diego,
Chula Vista, Imperial Beach and La Mesa. Since its formation, San Diego Community Power
(SDCP) started work to purchase electricity for over 28,000 Encinitas customers (residential,
commercial, industrial, and municipal). Throughout 2020, SDCP prepared to launch electricity
service by procuring $35 million in start-up loans, hiring staff and electricity procurement
consultants, and completing all necessary regulatory requirements. The new agency will offer
advantages over the City’s incumbent utility, including less carbon intensive energy over time at
competitive prices and with local oversight. In 2021, SDCP began serving electricity to customers as
part of a phased launch. Municipal customers began receiving power in March and commercial
customers were phased in this past June. Residential customers can expect to be served by SDCP in
early 2022. Prior to launch, the City of Encinitas unanimously voted to serve its customers with 100
percent renewable electricity as the base offering, called Power100. Customers may opt down to the
50 percent renewable level, called PowerOn, or opt to receive their power from SDG&E at any time.
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Green Building - The City’s first building code requirements related to the Climate Action Plan
(CAP) went into effect on January 1, 2020. The new regulations require single family, multi-family,
and commercial developments to install Electric Vehicle Charging Station infrastructure of varying
proportions within their project. Additional local green building requirements related to the City’s
Climate Action Plan were under development in FY 2020-21. The proposed requirements would
implement CAP measures related to residential and commercial building energy efficiency,
renewable energy, and building decarbonization. An ordinance enacting these requirements is
anticipated to be adopted by City Council in October 2021.
Electric Vehicle Charging Plaza - The City Council approved an agreement with EVgo Services LLC
to provide the infrastructure and equipment for an Electric Vehicle Charging Plaza. The new plaza
will allow six-electric vehicles to recharge their batteries within proximity to the downtown area and
City Hall with Direct Current Fast Charging technology.
Successful Sand Replenishment and Reuse Projects – In December 2020 following large rainstorms
in November and an emergency storm drain failure, the City made use of sandy material that had
discharged into San Elijo Lagoon. Approximately 500 cubic yards of sand that was deposited during
the storms was removed from San Elijo Lagoon under an emergency permit and placed in the back
beach areas of Moonlight Beach. In June 2021, the San Elijo Lagoon inlet required routine dredging
to maintain the inlet opening to the Lagoon. In partnership with the Nature Collective, the City
assisted the removal of the excess sand and reused the material to rebuild eroded areas of the Cardiff
State Beach Living Shoreline.
San Diego County Coastal Storm Damage Reduction Project – In February 2020, the City received
word that this project would be added to the Army Corps Work Program and that the Army Corps of
Engineers would allocate over $400,000 in federal funding to begin the pre-construction, engineering
and design (PED) phase of this project. In August 2021, monitoring contracts began to be awarded;
monitoring will establish baseline conditions ahead of the project installation and will occur for one
year beginning in early spring 2022. Council previously authorized the acceptance of a total of
$450,000 in grant funding from the Department of Boating and Waterways (DBW) to support the
PED phase. Acceptance of the grant funds reduces the Cities’ non-federal share for the PED phase.
The DBW has been and continues to be a committed partner in the Project. An extension of this grant
was awarded in October 2021.
Best Restored Beach of 2020 Award - In March 2021, the City of Encinitas accepted a national award
from the American Shore and Beach Preservation Association (ASBPA) for the Best Restored Beach
of 2020. The Cardiff State Beach Living Shoreline Project created a coastal dune with repurposed
buried rock revetment and cobblestone, 30,000 cubic yards of sand dredged from the San Elijo
Lagoon inlet and planted native vegetation. The Cardiff State Beach Living Shoreline Project is
considered a pilot project, to be used as an example for other coastal jurisdictions in high wave energy
environments and is in its third year of long-term monitoring and reporting.
Installation of Marine Monitoring Radar - In August 2020, the City entered into an agreement with
WILDCOAST, a nonprofit, community-based organization committed to conserving coastal and
marine ecosystems, to install a Marine Monitoring radar (M2) atop of the Marine Safety Center at
Moonlight Beach. The M2 radar was successfully installed in November 2020 and has been tracking
data since the completion of the install. The intention of installing the M2 was to gather boat activity
data for research purposes to determine if illegal fishing is taking place in the Swami’s State Marine
Conservation Area (SMCA) and to what extent. In December 2020, shortly after install, a sportfishing
charter boat from Oceanside Harbor was caught in the Swami’s SMCA by the City’s M2 Radar and
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California Department of Fish and Wildlife wardens were able to catch the vessel with fishing lines
in the water.
Beacon’s Coastal Bluff Restoration Project - In February 2021, the Planning Commission approved
the installation of the Beacon’s Coastal Bluff Restoration Project. The primary objective of the project
is to stabilize surface soils using native vegetation to protect the access trail, whilst increasing coastal
bluff habitat. The restoration program includes a pilot project using washed up kelp to encourage
natural dune formation as well as utilizing citizen scientists to increase engagement and beach and
bluff stewardship. The installation of the restoration program is slated to begin in November 2021.
Conference of the Parties Panelist - In November 2020, the City participated as a panelist at the Blue
Tech Week Conference, in the Conference of the Parties (COP) 26 technical session. COP organizes
the world’s most significant summit on climate change, attended by the countries that signed the
United Nations Framework Convention on Climate Change (UNFCCC). The City of Encinitas was
invited by COP 26 to participate as a panelist in a roundtable discussion about nature-based solutions
for coastal protection. Panelist that joined the City included Wade Crowfoot, Secretary, California
Natural Resources Agency, Dr. Judith Wolf, Physical Oceanographer, National Oceanography
Centre, and Ben Cutler, Director of Special Projects, Microsoft.
ADUs and JDUs - In November 2020, the City adopted Ordinance No. 2020-10, amending the City’s
ADU and Junior ADU (JADU) development standards based on updates to State Law that became
effective on January 1, 2020. In 2020, the Development Services Department issued 137 Accessory
Dwelling Unit (ADU) permits, with 13 of those being permit-ready ADUs.
Municipal Code Amendments – During Fiscal Year 2020-2021, the City Council adopted several
Ordinances which amended the Encinitas Municipal Code including Ordinance No. 2020-13 which
prohibits the sale and distribution of flavored tobacco products and Ordinance No. 2020-15 which
implemented a sidewalk vending operations permit policy regulating the time, place, and manner of
sidewalk vending operations.
In June 2021, the Rail Corridor Cross-Connect Implementation Plan received an American Planning
Association Award in Transportation Planning from the San Diego Chapter. The award is for a
planning effort in the San Diego region that increases transportation choices for all and helping ease
congestion and reducing climate change impacts.
Transition to a Zero/Low Emissions Vehicle Fleet - The Public Works Department is progressively
moving toward a zero/low emissions municipal fleet. The Fleet Division receives regular delivery of
renewable diesel instead of conventional diesel. Renewable diesel is a non-petroleum-based diesel
that works in unmodified diesel engines and burns 80 percent cleaner than conventional diesel fuel.
All three of the City’s fuel tanks, which are located at the Public Works Facility, as well as Fire
Stations 3 and 4, supply renewable diesel. The renewable diesel is used for all diesel-fueled City
vehicles, including Public Works heavy duty trucks and equipment and all fire engines. The Public
Works fleet is also steadily transitioning to electric light duty vehicles in compliance with the goals
of the CAP. The City owns 42 heavy- and medium-duty diesel vehicles and 46 light duty vehicles.
This fleet includes 33 vehicles currently fueled with renewable diesel, 13 hybrid vehicles, one plug-
in hybrid vehicle, and seven all-electric vehicles.
Public Safety Improvements and Upgrades – The Fire Department worked with the community to
create a Fire Safe Council in the community of Olivenhain. The Fire Department received the 2020
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American Heart Association Mission Lifeline Award which recognizes organizations across the
nation for excellent heart-health care. A Cal OES fire engine was placed at one of the Encinitas fire
stations, which makes the Department responsible to support statewide emergencies, but also gained
the benefit of having the ability to place the OES engine into service if needed. The Department also
continued its annual Fire Prevention Week event, making it a drive-through event this year at the Del
Mar Fairgrounds to make the event social distance-friendly due to the pandemic.
The following CIP and Work Program projects were completed during FY 2020-21:
Park Improvements – The 2003 playground equipment at Moonlight State Beach was replaced with
new playground equipment and a new rubberized pour-in-place surfacing was installed. The project
was completed in August 2020.
South Coast Highway 101 Safety and Mobility Improvements Project – In September 2020, the City
completed a project to add buffers and protected bikeways in each direction on South Coast Highway
101. Narrowed travel lanes and traffic calming resulted in a reduced speed limit that has encouraged
more recreational bike use through the corridor. Sharrows were added to the number two lane for
faster cyclists. This project also added a new pedestrian path between the San Elijo Bridge and the
traffic signal at the State Park Cardiff Reef parking lot.
B Street Sidewalk Improvements Project – In October 2020, the City completed a project that
installed sidewalks, bulb outs, American with Disabilities Act (ADA) compliant curb ramps and
landscaping along the north side of B Street from the alley west of Highway 101 down to Moonlight
Beach.
Pedestrian and Bicycle Improvements – Rectangular rapid flashing beacons (RRFB), advanced
warning signage and crossing striping improvements were completed at Coast Highway 101 and G
Street. Pedestrian crossings were added on Vulcan Avenue at Halcyon, Vulcan and La Costa, and
North Coast Highway and Europa. A decorative, surfboard themed, crosswalk was added on South
Coast Highway 101 at G Street in July 2020. Class II bike lanes were added to both sides of
Willowspring Drive in December 2020.
City Hall Improvements (Phase One) - Much-needed interior improvements at City Hall, including
security upgrades, fire suppression system rehabilitation, (Americans with Disabilities Act) ADA
improvements, and deferred maintenance items including carpet replacement and interior painting,
were completed in January 2021.
Morning Sun Drive & Woodside Lane ADA Improvements Project – In February 2021, the City
completed a project to install ADA compliant sidewalks and driveways throughout the Morning Sun
Ranch neighborhood.
Traffic Signal Painting Project – In March 2021, the City completed a project to repaint the decorative
traffic signal poles and mast arms, bases, safety lights, traffic signal heads and visors, pedestrian
signal heads and other related appurtenances on Coast Highway 101 and Vulcan Avenue.
In April 2021, the City completed a project to enhance access by providing ADA compliant sidewalks
on Gardena Road from Santa Fe Drive north approximately 175 linear feet and on Vulcan Avenue
from Hillcrest Drive north approximately 100 linear feet. This project also constructed eight ADA
compliant curb ramps on Via Molena at Villa Villena, Via Palacia, Via Sarasan and Via Tavira.
TRANSMITTAL LETTER i INTRODUCTORY SECTION
ix
Olympus Park – In May 2021, the City opened a new park in the Leucadia community with a variety
of park amenities, including a dog park, sports court, skate element, pump track, playground
equipment, zip line, two-story slide, picnic tables and benches, bike racks, walking paths, open turf
areas and a tot lot.
Traffic Calming –Speed tables were added along Fortuna Ranch Road to provide traffic calming and
reduce vehicle speeds near the Capri Elementary School.
In July 2021, the FY 2019-20 Annual Pavement Rehabilitation, Overlay and Slurry Project was
completed. The project included pavement work on 44 public streets including installation of ADA
complaint pedestrian ramps and restriping.
MAJOR INITIATIVES AND PROJECTS
The City Council has four Strategic Priority Focus areas which are –
1. Attain a legally compliant Housing Element
2. Better incorporate the rail corridor into our neighborhoods
3. Improve connectivity and mobility for all users
4. Promote green initiatives and protect natural resources.
Highlighted below are the projects that the City is working on as they relate to the City Council’s
focus areas:
1. Attain a legally compliant Housing Element
Housing Element – The 6th Cycle Housing Element was adopted by City Council on April 7, 2021
and submitted to HCD for a 90-day review.
2. Better incorporate the rail corridor into our neighborhoods
Rail Corridor Cross-Connect Implementation Plan – This plan builds on the recommendations
presented in the Rail Corridor Vision Study and Active Transportation Plan, approved by City
Council in February 2018. The Rail Corridor Vision Study is the centerpiece of the Coastal Mobility
and Livability Study (CMLS), a broad effort to examine mobility issues and opportunities in the
Encinitas coastal rail corridor. Using a Caltrans Sustainable Communities Transportation, the Cross
Connect Plan was adopted by City Council on December 16, 2020.
El Portal Pedestrian Rail Crossing - This project will create a grade-separated pedestrian and bicycle
rail crossing near El Portal Street. Construction began in October 2019 and is being managed by the
San Diego Association of Governments. Construction completion is expected in Spring 2022.
3. Improve connectivity and mobility for all users
Mobility Element of the General Plan - The Coastal Mobility and Livability Study (CMLS) and
associated implementation plans will be used in the update of the Mobility (Circulation) Element
Update of the General Plan. The update will be a joint effort with the Planning and Engineering
Divisions. An RFP was released in November and a contract was awarded to WSP in February 2021.
Project will kick-off in Summer 2021.
TRANSMITTAL LETTER • INTRODUCTORY SECTION
x
Modal Alternatives Project Implementation Plan (MAP Encinitas) – The City received Caltrans grant
funding in the amount of $200,000 and matched $50,000 from the General Fund in August 2020.
The intent of the grant is to address local and regional transportation needs and issues through
planning documents that promote a balanced, sustainable, and comprehensive multimodal
transpiration system. An RFP was released in January 2021 and a contract was awarded to Chen
Ryan Associates.
El Camino Real Corridor Specific Plan (LEAP Grant) - The LEAP Grant funding was awarded to the
City in November 2020 to help facilitate the development and implementation of the El Camino Real
Corridor Specific Plan and the Housing Element. An RFP was released in April 2021 and a contract
was awarded to Rick Engineering.
Leucadia 101 Streetscape - This corridor project provides streetscape improvements along North
Coast Highway 101 from A Street to La Costa Avenue. The project includes pedestrian and bicycle
improvements, roundabouts, road lane narrowing and tree plantings throughout the entire corridor.
Construction of Phase 1 (Marcheta Street to Basil Street) began in January 2021 and is scheduled to
be completed in Spring 2022.
Santa Fe Drive South Sidewalk and San Dieguito Academy Frontage Improvements - This project
involves construction of curb, gutter, and sidewalk on the south side of Santa Fe Drive from Gardena
Road to Mackinnon Avenue. In addition, accessible curb ramps will be provided on both sides of the
Santa Fe Drive/Mackinnon Avenue intersection, and landscaping improvements will be provided on
the north side of the street, fronting San Dieguito Academy School. The project has been split into
an east and west phase. Construction of the west phase is scheduled to begin in summer 2022.
Construction of the east phase is targeted for fall 2023, pending funding availability.
Rancho Santa Fe (Trail 82) and El Camino Del Norte (Trail 95) Design and Construction - Design is
complete for Trail 95 and the project will go out to construction in Winter 2021-22. Design is nearly
complete for Trail 82. Once the final design is 100 percent completed, the design will go to the utility
providers along the trail to redesign their facilities to accommodate the new trail.
4. Promote green initiatives and protect natural resources.
Climate Action Plan - The updated Climate Action Plan (CAP) was adopted by Council on January
17, 2018. City staff continues to implement projects, programs, and initiatives that support the goals
of the CAP and reduce greenhouse gas (GHG) emissions. The CAP was updated on November 18,
2020. Some of the major CAP actions that have been completed or will be advanced in the coming
year include:
• Launch a Community Choice Energy (CCE) Program –The new CCE, named San
Diego Community Power (SDCP), has commenced start-up activities including
developing a business plan, hiring staff, and acquiring the financing needed to
purchase and serve renewable electricity to the community. SDCP began serving
power to Encinitas customers in early 2021 and will complete its phased launch in
2022.
• 100% renewable electricity – The City unanimously voted to serve its SDCP
customers with 100 percent renewable electricity as the base offering, called
Power100. Customers may opt down to the 50 percent renewable level, called
PowerOn, or opt to receive their power from SDG&E at any time.
TRANSMITTAL LETTER • INTRODUCTORY SECTION
xi
• Green Building – Development of building ordinances to require and encourage
reduction of fossil fuel energy use – In November 2019, Council adopted an
ordinance that will require additional electrical improvements and electric vehicle
charging stations (EVCS) to be installed at a percentage of parking spaces at
commercial and multi-family properties, as well as require new single-family homes
to come equipped with electrical infrastructure necessary for the home to be “EVCS
ready.” The ordinance went into effect on January 1, 2020. Additional local green
building requirements related to the City’s Climate Action Plan were under
development in FY 2020-21. The proposed requirements would implement CAP
measures related to residential and commercial building energy efficiency,
renewable energy, and building decarbonization. An ordinance enacting these
requirements is anticipated to be adopted by City Council in October 2021.
• Bikeshare Program - Throughout FY 2020-21, City staff worked closely with the
City’s selected bikeshare vendor, BCycle, to prepare for launching a bikeshare
program in the City of Encinitas. The program is expected to launch at the end of
2021 with 100 shared electric bikes and 200 docks stationed around the City for
residents and visitors to borrow and get around town, car-free, for a nominal fee.
• Bicycle Racks - In 2021, the City donated 26 bike racks to California State Parks
Department to be installed at State-managed beaches in Cardiff. The bike racks will
improve safe and emission-free access to local beaches for Encinitas residents.
• In 2021, the City purchased and installed 63 bike racks at various City-owned or
managed locations including, Moonlight Beach, D Street Beach Access, Swami’s
Beach Access, and Olympus Park, to improve bike parking and encourage bike
ridership.
• Senate Bill 1383 - The City’s waste hauler, EDCO, completed the construction of its
anaerobic digestion facility, which processes organic material (food waste and green
waste). Once the organic material is processed, methane is extracted to fuel EDCO’s
collection trucks and the remaining product is a digestate that can be turned into
fertilizer. The facility became operational in early 2021 and residential collection
services in Encinitas began in June of 2021. Per Senate Bill 1383 regulations, all
residents and businesses must recycle organics by January 1, 2022. Since Fall of
2021, EDCO has been enrolling commercial businesses and multi-family dwellings
in the new program with the plan to have everyone enrolled by 2022. Select
businesses that generate food waste will also need to arrange to donate edible food,
as required by the law. The City has several contracts for environmental education
services to support the new organics program and to provide general zero waste
education in the schools and community. There has also been extensive outreach and
support offered via various workshops for the business community to prepare them
for the imminent changes that organics recycling will bring to their daily operations.
Diverting organics from the landfill will significantly reduce greenhouse gas
emissions and help the City meet its Climate Action Plan goal of diverting 65 percent
of total solid waste generated from the landfill by 2020 and 80 percent by 2030.
• Plastics initiative – Implementation of the City of Encinitas Plastics Initiative
regulating the sale and distribution of single-use plastic products in Encinitas
including plastic straws, plastic utensils, and plastic beverage bottles. The Plastics
Initiative is a multi-phased approach, starting in December 2019 through the
Introduction of an Ordinance to require the distribution of plastic straws upon request
only, including takeout and drive-thru, and a prohibition on the distribution of plastic
straws. Phase 2 was initiated in February 2020 and included the development of a
policy to limit the sale or distribution of Plastic Beverage Containers at City Facilities
LIST OF CITY OFFICIALS
As of June 30, 2021
CITY COUNCIL
Mayor Catherine S. Blakespear
Deputy Mayor Tony Kranz District 1
Council Member Kellie Shay Hinze District 2
Council Member Joy Lyndes District 3
Council Member Joe Mosca District 4
EXECUTIVE TEAM MEMBERS
City Manager Pamela Antil
Assistant City Manager Jennifer Campbell
Director of City Clerk/Legislative Services Kathy Hollywood
Public Works Director Jennifer Campbell*
Director of Finance/City Treasurer Teresa S. McBroome
Fire Chief Michael Stein
Director of Human Resources/Worker’s
Compensation
Tom Bokosky
IT Manager
Director of Infrastructure and Sustainability
Jessica Contreras**
Lillian Doherty
Director of Development Services Roy Sapa’u
Director of Administrative Services Jace Schwarm
Director of Parks, Recreation & Cultural
Arts
Travis Karlen
*Acting Public Works Director
**Acting IT Manager
xiii
xiv
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Encinitas
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
xv
FINANCIAL SECTION
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Independent Auditor’s Report
City Council
City of Encinitas
Encinitas, 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 Encinitas, California,(City)as of and for the year ended June 30, 2021, and the
related notes to the basic 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
did not audit the Investment in Joint Ventures of the R.E. Badger Joint Powers Authority, R.E.
Badger Financing Authority, San Elijo Joint Powers Authority, and Encina Wastewater
Authority, which collectively represent the following percentages of assets, net position and
expenses of the following opinion units:
Those statements were audited by other auditors whose reports have been furnished to us,
and our opinions, as they relate to the amounts included for investment in joint ventures, are
based solely on the reports of the other auditors. 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.
Assets Net Position Expenses
Business-type Activities 13.65%19.10%4.41%
Each Major Enterprise Fund:
Cardiff Sanitary District 52.12%63.61%38.79%
San Dieguito W ater District 35.07%43.53%16.48%
Encinitas Sanitary Division 19.77%20.23%30.63%
Opinion Unit
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the City’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
City’s internal control. Accordingly, we express no such opinion.An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinions.
Opinions
In our opinion,based on our audit and the report of other auditors,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 Encinitas, California,as of June 30, 2021, and the
respective changes in financial position and, where applicable, cash flows thereof 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 18 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,Budgetary Comparison Schedule for the General Fund
and the Infrastructure Improvements Special Revenue Fund, Schedule of Changes in the Net
Pension Liability and Related Ratios, Schedule of the City’s Proportionate Share of the Net
Pension Liability, Schedules of Contributions –Pensions, Schedule of Changes in the Net OPEB
Liability and Related Ratios, and the Schedule of Contributions –OPEB 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 Encinitas’basic financial statements. The introductory
section, supplementary information and the statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The supplementary information is the responsibility of management and were derived from
and relate directly to the underlying accounting and other records used to prepare the basic
financial statements. Such information has been subjected to the auditing procedures applied
in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the supplementary information is
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
December 1, 2021 on our consideration of the City of Encinitas' 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 Encinitas’internal control over
financial reporting and compliance.
Irvine, California
December 1, 2021
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4
City of Encinitas
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
The Management’s Discussion and Analysis (“MD&A”) provides a narrative overview and analysis of the
financial activities of the City of Encinitas (“City”) for the fiscal year ended June 30, 2021. The City’s
financial statements include the accounts of the City, the Encinitas Public Financing Authority (EPFA),
the Encinitas Housing Authority (EHA), and the San Dieguito Water District (SDWD). Please read the
MD&A in conjunction with the transmittal letter, the basic financial statements and the accompanying
notes to those financial statements.
FINANCIAL HIGHLIGHTS
•The City’s total assets increased overall by $13.6 million. This is due to a $5.1 million increase in
governmental activities and a $8.5 million increase in business-type activities.
•The City’s total net position increased overall by $10.8 million compared to the previous year. The
governmental activities increased $3.5 million and business-type activities increased $7.3 million.
Total assets increased $13.6 million, total liabilities increased $3.9 million, deferred outflows
decreased $0.5 million, and deferred inflows also decreased $1.6 million.
•The City’s total revenues increased $5.7 million from 2020.
Governmental activities revenues increased $4.5 million
Business-type activities revenues increased $1.2 million
•The City’s total expenses increased $4.3 million from 2020.
Governmental activities expenses increased $4.9 million
Business-type activities expenses decreased $0.6 million
•The City’s total net pension liability increased $3.6 million from 2020.
Governmental liability increased $4.1 million
Business-type liability decreased $0.5 million
•The City’s total OPEB liability decreased $0.9 million from 2020.
Governmental liability decreased $0.9 million
Business-type liability did not change
OVERVIEW OF THE FINANCIAL STATEMENTS
The MD&A is intended to serve as an introduction to the City’s basic financial statements. The basic
financial statements are composed of three components: 1) government-wide financial statements, 2)
fund financial statements, and 3) notes to the basic financial statements. This report also contains other
required supplementary information in addition to the basic financial statements themselves.
The financial statements presented herein include all the activities of the City and the component unit of
San Dieguito Water District (SDWD) using the integrated approach as prescribed by GASB Statement
5
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
No. 34. The City includes accounts for the Encinitas Public Financing Authority (EPFA) and the Encinitas
Housing Authority (EHA).
The government-wide financial statements present the financial picture of the City from the economic
resources measurement focus using the accrual basis of accounting. They present governmental
activities and business-type activities separately. These statements include all assets of the City including
infrastructure as well as all liabilities including long-term debt. Certain eliminations have occurred as
prescribed by the statement in regard to interfund activity, payables and receivables.
Reporting the City as a Whole
The Statement of Net Position and the Statement of Activities
The government-wide financial statements provide a long-term view of the City’s activities as a whole,
and are composed of the statement of net position and the statement of activities and changes in net
position. These statements are prepared on the accrual basis of accounting, which is similar to the
accounting used by most private-sector companies. Revenues and expenses for the current fiscal year
are recorded, regardless of when cash is received or paid.
The Statement of Net Position presents information on all the City’s assets, deferred outflows-inflows and
liabilities, with the difference between the four reported as net position, which is one way to measure the
City’s financial health. Over time, increases or decreases in the net position is one indicator of whether
the financial condition of the City is improving or declining.
The statement of activities and changes in net position presents information showing how the City’s net
position changed during the most recent fiscal year. All changes in net position are reported as soon as
the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus,
revenues and expenses are reported in this statement for some items that will only result in cash flows
in future fiscal periods. Examples include revenues pertaining to uncollected taxes and expenses
pertaining to earned but unused vacation and sick leave.
In both the statement of net position and the statement of activities and changes in net position, the City
activities are separated as follows:
Governmental Activities – Property, sales and use taxes, user fees, franchise fees, investment
earnings, and state and federal grants revenues finance the governmental activities. Most of the City’s
basic services are reported in this category, including:
General Government
Public Safety
Public Works
Planning
Engineering
Parks, Recreation and Cultural Arts
6
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
Business-type Activities – The City charges a fee to customers to cover all or most of the cost of certain
services it provides. These activities include the water and wastewater operations and a portion of the
City’s affordable housing program.
Reporting the City’s Most Significant Funds
The fund financial statements include statements for each of the three categories of activities:
governmental, business-type (proprietary) and fiduciary. The governmental activities, other than internal
service activities, are prepared using the current financial resources measurement focus and modified
accrual basis of accounting. The business-type activities are prepared using the economic resources
management focus and the accrual basis of accounting. The fiduciary activities include custodial funds
that are prepared using the economic resources management focus and the accrual basis of accounting.
Implementation of GASB 84 requires that fiduciary funds report both a statement of net position and a
statement of changes in fiduciary net position effective for reporting periods beginning after December
15, 2019. Reconciliations of the fund financial statements to the government-wide financial statements
are included to explain the differences created by the integrated approach.
Fund Financial Statements – The City’s fund financial statements provide a greater level of detail
regarding the City’s governmental activities and include the General Fund, Capital Improvements Capital
Projects Fund, Infrastructure Improvements Special Revenue Fund and other non-major governmental
funds. The City reports the General Fund, the Capital Improvements Capital Projects Fund, and the
Infrastructure Improvements Special Revenues Fund as major funds, under the guidance provided by
GASB No. 34. All other governmental funds are considered non-major funds and are reported as one
group.
The General Fund is the largest and most discretionary source of funding for operations, debt service
and capital improvements, via both direct expenditures and transfers to other City funds. The Capital
Improvements Capital Projects Fund accounts for all governmental fund capital improvements, as well
as work projects such as long-term consultant studies. The Infrastructure Improvements Special Revenue
Fund accounts for financial resources from local, state and federal grants which are used primarily to
fund capital improvements. All these expenditures are categorized as capital outlay.
The City’s Major Funds include: Type of Activity:
•General Fund Governmental Activities
•Capital Improvements Capital Projects Fund Governmental Activities
•Infrastructure Improvements Special Revenue Fund Governmental Activities
•City’s Water and Wastewater Enterprises Business-type Activities
San Dieguito Water District
Cardiff Sanitary Division
Encinitas Sanitary Division
7
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
Governmental Funds – Most of the City’s basic services are reported in governmental funds. Unlike the
government-wide financial statements, governmental funds financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available
at the end of the fiscal year. Such information may be useful in evaluating the City’s capacity to finance
its programs in the near future. These funds are reported by using an accounting method called modified
accrual accounting, which measures cash and all other financial assets that can readily be converted to
cash. The governmental funds balance sheet and the governmental funds statement of revenues,
expenditures, and changes in fund balance present information separately for the General Fund, the
Capital Improvements Capital Projects Fund, and the Infrastructure Improvements Special Revenue
Fund, which are all classified as major funds. These statements also report several individual
governmental funds classified as non-major funds, such as Special Revenue and Debt Service Funds,
which are combined into a single, aggregated presentation. Individual fund data for each of the non-major
governmental funds is provided in the supplementary information section.
Proprietary Funds - When the City charges customers for the services it provides, whether to outside
customers or to other units of the City, these services are generally reported in proprietary funds.
Proprietary funds, like government-wide financial statements, are presented on an accrual basis of
accounting. There are two types of proprietary funds – enterprise funds and internal service funds.
Enterprise funds are used to report activities for which external users are charged a fee for goods or
services. Internal service funds are used to report activities that provide supplies and services to other
City programs and activities. The internal service funds are reported with governmental activities in the
government-wide financial statements.
Fiduciary Funds – The City is the trustee, or fiduciary, for certain funds held on behalf of the Community
Facilities District No. 1- the Encinitas Ranch Development and the Encinitas Ranch Golf Course pooled
cash investment funds. The City’s fiduciary activities are reported in a separate statement of fiduciary net
position. These activities are excluded from the City’s other financial statements because the City cannot
use these assets to finance its operations. The City is responsible for ensuring that the assets reported
in these funds are used for their intended purposes.
Financial Analysis of the City Overall
Net Position – The City of Encinitas’ combined net position (i.e. inclusive of all City funds) for the fiscal
year ended June 30, 2021 is compared to the results for 2020 in Table 1.
8
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
Net position represents the simplest test of financial health for the City, indicating the excess or deficit of
assets, and deferred outflows of resources, over liabilities and deferred inflows of resources. Net position
for the City as a whole increased 3.1 percent from $348.6 million on June 30, 2020, to $359.4 million at
June 30, 2021.
•The overall increase in total assets is $13.6 million when compared to the previous year. The
governmental activities total assets increased $5.1 million compared to the previous year with an
increase in receivables and capital assets offset by a decrease in cash and investments as well as
inventory and prepaid items. The business-type activities total assets increased $8.5 million
compared to the previous year with primary increases in investment in joint ventures and capital
assets offset by decreases in cash and investments.
•The overall increase in total liabilities is $3.9 million when compared to the previous year. This is
primarily attributable to an increase in net pension liabilities and current liabilities offset by a decrease
in other postemployment benefits (OPEB) liabilities and long-term liabilities.
•The increase in total assets of $13.6 million, increase in total liabilities of $3.9 million, offset by the
decrease in deferred inflows of $1.6 million and deferred outflows of $0.5 million results in an increase
in the City’s total net position of $10.8 million, or approximately 3.1 percent, compared to 2020. See
Table 1.
9
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
Governmental Activities
Chart 1 reflects the financial impact of the various City programs or the extent to which these programs
generate revenue from fees and grants. The City’s programs include General Government, Public Safety
(Fire and Law Enforcement), Public Works, Development Services (Planning and Engineering) and
Parks, Recreation and Cultural Arts. Each program’s net cost (total cost less revenues generated by the
activities) is presented in the Statement of Activities and Changes in Net Position.
10
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
Note: Program revenues only include charges for services, operating grants and contributions, capital grants and contributions and do
not include general revenues.
Chart 2 reflects that property taxes, sales and use taxes, charges for services, capital grants and
contributions, and operating grants and contributions are the top five categories of total revenue and
comprise 94 percent of funding for governmental activities. The remaining categories include other taxes,
investment income and other.
11
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
Business-type Activities
Business-type activities for the City of Encinitas include water and wastewater operations and the City’s
affordable housing program. These activities increased net position by $7.3 million from the last fiscal
year. The program revenues and general revenues totaled $31.2 million, exceeding total expenses of
$23.9 million. Refer to Table 2, Statement of Activities and Changes in Net Position.
The Statement of Activities and Changes in Net Position for business-type activities reflects an increase
of $2.4 million in program revenues and a decrease of $1.2 million in general revenues from the previous
year. The primary reason for the increase in operating revenue during Fiscal Year 2020-21 was
attributable to SDWD’s increase in water sales of $2.2 million due to an increase in the water rates. The
Board approved the rate increase effective June 1, 2020. The operating revenues in Cardiff Sanitary
Division (CSD) remained stable and the Encinitas Sanitary Division (ESD) increased half a percent
compared to the previous year. Operating expense for SDWD increased $2.1 million compared to the
previous year. The changes in water rates offset the increase in operating expenses resulting in no
change in operating income for SDWD. The CSD and ESD operating income remained stable.
Overall, program revenues and general revenues exceeded program expenses during Fiscal Year 2020-
21 resulting in a total net change of $7.3 million.
Chart 3 below compares program revenue from business-type activities to program expenses. Water
and wastewater operations operated at a surplus, as shown in the Statement of Activities and Changes
in Net Position.
Note: Program revenues only include charges for services, operating grants and contributions, capital grants and contributions and do
not include general revenues.
12
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
GENERAL FUND BUDGETARY HIGHLIGHTS
General Fund Revenues $3 million above projections
General Fund actual revenues of $83.3 million were $5.7 million, or 7.3 percent, higher than the original
adopted budget and $3 million, or 3.8 percent, higher than the final amended budget. Actual revenues
were higher by $3.5 million, or 4.3 percent, when compared to FY 2019-20.
For budgeting purposes, the City’s revenue projections have historically been conservative. Table 1
below compares revenue projections to actual revenue received, by type of revenue:
Table 1
Actual operating revenue in FY 2020-21 (excluding transfers in) exceeded projections by approximately
$3 million. Significant variances can be attributed to:
•Increased property and documentary transfer tax receipts from higher value assessments, higher
than anticipated transfers of ownership and a lower-than-expected delinquency rate.
•Less severe economic impact on sales tax revenues resulting from the COVID-19 pandemic. A
shift to online shopping during the pandemic and a recent legislative change that allowed for the
taxation of additional internet purchases resulted in strong growth in the countywide use tax pool.
Additionally, retailers in the consumer goods category reported strong sales, spurred by federal
stimulus and pent-up consumer demand as most pandemic restrictions were lifted. Lastly,
receipts from auto and transportation related sales exceeded expectations due to low financing
rates, consumer savings from curtailed spending opportunities during the pandemic, federal
stimulus and increased home equity that facilitated greater borrowing.
13
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
•Higher than anticipated transient occupancy tax revenue receipts from short-term vacation
rentals.
•A reduction in development related revenues originating from permits and building inspection
fees, as well as fees collected to support recreation programs (recorded in the Charges for
Services category) resulting from cancellations due to the COVID-19 pandemic.
•Lower than projected revenue in the Fines and Penalties category mostly due to a reduction in
parking citations and vehicle code violations issued during the COVID-19 pandemic. This was
primarily due to fewer vehicles on the road and limited public contact by law enforcement during
this time.
•The change in fair market value of investments in the Use of Money category.
•A reimbursement of approximately $470,000 recorded as other revenue from the Olivenhain
Municipal Water District for the El Camino Real Mobility Striping Improvement project (CS20B).
General Fund Expenditures $3.1 million under budget
Operating expenditures for the fiscal year (excluding transfers out) were approximately $3.1 million under
budget. Table 2 compares the expenditure budget to actual expenditures for the fiscal year by category:
Table 2
Savings in personnel costs was primarily the result of vacancies across City departments.
The Contracts and Services category was approximately $2 million under budget, which was primarily a
result of the following approximate variances:
•Expenditures for law enforcement services and parking citation processing were $445,000 lower
than anticipated due to a decrease in activity during the pandemic.
•Savings of $287,000 in park, beach, and trail maintenance contracts as there was limited usage
by the public during the pandemic, as well as mild weather with fewer severe weather events
during the year.
14
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
•Contract building inspection services were under budget by $253,0000. Activity remained
relatively slow during the pandemic, resulting in reduced expenditures and an associated decline
in revenue collected from building inspection fees.
•Expenditures for utilities were $220,000 under budget due to limited operations and use of
facilities and parks during the pandemic.
•Election costs assessed by the County for election services were $215,000 lower than anticipated.
Staff anticipated additional cost for possible citizen-initiated ballot measures that did not appear
on the November 2020 ballot.
•Tree maintenance was under budget by $147,000 citywide.
•Training and professional development was $123,000 under budget across all departments as
there were limited training opportunities offered during the fiscal year due to pandemic related
restrictions.
•The City's portion of expenditures for Carlsbad Watershed coordination, monitoring and
assessment; obligations under the Stormwater Committee MOU; and SWRCB Annual Discharge
Fee coordination were lower than anticipated by $102,000.
•Expenditures on information technology service contracts were under budget by approximately
$78,000 as the demand and cost of services was lower than anticipated.
•Expenditures on Materials and Supplies in FY 220-21 was approximately $223,000 under budget
due to the following (variances are approximate):
•Savings of approximately $71,000 for street, park, beach, and trail maintenance due to mild
weather conditions and limited usage during the pandemic.
•Expenditures on fuel were under budget by $39,000.
•In person activities, such as City-wide training, new orientations, all hands meetings, Customer
Service Initiative events, in-person interviews and wellness programs were suspended during the
pandemic resulting in $16,000 in savings.
•Expenditures on computer hardware was approximately $10,000 lower than expected due to
fewer computer hardware replacements and purchases during the fiscal year as a staff was
working remotely.
Excess of Revenues over Expenditures $6.2 million above projections
Actual revenues over expenditures were approximately $14.3 million, compared to a budget of $8.2
million. This does not take into account other financing sources and uses which are discussed below.
This result is a combination of revenues being above projections and expenditures being under budget,
as discussed above.
15
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
Other Financing Sources and Uses – General Fund
Other financing sources and uses consisted of transfers in and transfers out during the fiscal year.
Scheduled transfers in included: (a) monies from the Gasoline Taxes Special Revenue Fund, which fund
a portion of the City’s street maintenance program, and (b) monies for impact fees collected for
community facilities and fire mitigation. The impact fees are transferred at year end to reimburse the
General Fund for amounts expended in prior years for the Public Library and Fire Station Rehabilitation
projects. Transfers in for operating were slightly over projections by $27,266, due to CARES Act funding
which subsidized the personnel costs for expenditures related to COVID-19.
Transfers out of the General Fund operating category were $146,133 less than projected. The anticipated
matching shares or subsidies from the General Fund for the Community Development Block Grant
(CDBG) Fund, Section 8 Administration Fund and Pacific Pines Administration Fund were lower than
projected. The Section 8 Administration Fund also received additional CARES Act funding to subsidize
administrative costs. Transfers out to internal service funds include the General Fund’s contribution to
the Self-Insurance fund. Appropriations for capital projects from the General Fund totaled $15 million
compared to $4.8 million in 2020.
Transfers out for debt service totaled $3.7 million which were flat compared to the previous year.
Analysis of Fund Balance and Changes in Fund Balance
Fund balance was projected to be $22.5 million as of June 30, 2021, a scheduled decrease of about $4.7
million. Actual fund balance was $27.4 million, or $4.9 million higher than projected; as mentioned above,
revenues were $3 million above projected and expenditures were $3.1 million under projected. Net
transfers out were higher by $1.5 million.
There was an excess of revenues over expenditures of $14.3 million. Factoring net transfers for operating
expenditures, debt service payments, and capital expenditures of $14.3 million, the net result is a
decrease in total fund balance of $ 0.05 million at year end.
Besides the General Fund, the Capital Improvements Capital Projects Fund and Infrastructure
Improvements Special Revenue Fund are also major funds in the governmental funds. The City executes
capital projects through the Capital Improvements Capital Projects Fund. When a project is designated
and the budget is appropriated, the fund balance of the funding source is transferred to the Capital
Improvements Capital Projects Fund to complete the capital project. Because of the transfers, the
Infrastructure Improvements Special Revenue Fund at June 30, 2021 had a deficit fund balance of $7.1
million due to expected grant funding and commitments. The Capital Improvements Capital Projects Fund
had a total fund balance of $38.1 million at the end of Fiscal Year 2020-21.
16
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
CAPITAL ASSETS AND THE CAPITAL IMPROVEMENT PROGRAM
As of June 30, 2021, the City had approximately $291.7 million invested in a broad range of capital assets
including road and drainage systems, parks and beach facilities, public buildings, water and wastewater
treatment facilities, collection and distribution systems, and affordable housing stock. Of that amount,
$231.9 million is classified as capital assets under the category of governmental activities, and $59.8
million is classified as capital assets of business-type activities. For more detailed information on capital
assets activity refer to Note 7. In addition, there are $68.7 million of assets under business-type activities
classified as investments in joint ventures. These investments consist mainly of capital assets belonging
to related governmental agencies where the City holds an equity interest in the joint venture. The assets
are primarily water and wastewater treatment facilities.
Governmental Activities
Capital Assets: $231.9 million
The City has three Capital Improvements Capital Projects Funds to monitor capital improvements
projects for governmental activities. These projects include public facilities, acquisition of parkland and
park improvements, infrastructure, and certain City “work projects” such as multi-year consultant studies
that meet the criteria for inclusion as capital projects for budgeting purposes. The City uses a dollar
threshold of $100,000 and a useful life of five years or more in its evaluation for capitalizing a capital
expenditure. Eligible project costs are additions to construction in progress (CIP) at fiscal yearend. Costs
for completed projects are recorded as additions to the appropriate capital asset category at year end.
The City spent approximately $22.1 million this fiscal year on capital improvement projects consisting of
a variety of different projects that were either in development or under construction. The primary
emphasis this fiscal year was the Leucadia Streetscape project, Olympus Park, the El Portal
Pedestrian/Bike Underpass project, the Morning Sun Drive Sidewalk project, City Hall Renovations,
General Mobility Improvement projects, Vulcan Avenue Temporary Parking, the Technology
Infrastructure Replacement project, parkland and drainage improvements, and ongoing pavement
overlay projects.
Business-type Activities
Capital Assets: $59.8 million
The City accounts for the acquisition and construction of capital assets for its water and wastewater
operations under its proprietary-type funds as enterprise activities. Capital spending is recorded as
expenses in the appropriate capital fund under each separate activity during the fiscal year. At the end
of the fiscal year, the expenses are analyzed to determine if they meet the criteria to be capitalized as
long-term capital assets. The criteria are the same as the City’s criteria ($100,000 threshold and a
minimum five-year life). Eligible capital expenses are then capitalized to the construction-in-progress
account, while non-eligible expenses are reclassified as operating expenses. Total amounts expensed
on completed projects are then transferred to the appropriate capital asset class. Capital assets at $59.8
million increased compared to the prior year’s amount of $56.9 million. During the year, CSD capitalized
17
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
its share of the Olivenhain trunk improvements which totaled approximately $5.8 million and SDWD wrote
off water lines that were replaced during the year.
The City’s Affordable Housing Fund carries an investment of about $2.4 million in affordable housing
stock under the classification of utility, plant, vehicles and equipment. The City purchased 16 housing
units in 2004. There has not been any capital spending activity in this fund since then.
Investment in Joint Ventures: $68.7 million
The City’s water and wastewater enterprises each hold equity interests in joint ventures with other local
agencies.
SDWD holds an equity interest, along with Santa Fe Irrigation District, in the R.E. Badger Joint Facilities.
SDWD makes capital contributions each year for the replacement and improvement of the Joint Facilities,
which then is added to the investment account at the end of the fiscal year. SDWD also makes monthly
payments to cover its proportional share of annual operating costs.
SDWD also holds an equity interest in the R.E. Badger Water Facilities Financing Authority. The primary
reason for this investment is to provide financing for the acquisition and construction of capital
improvements related to the R.E. Badger Joint Facilities. SDWD has a proportional share of assets in the
debt service reserve only. Therefore, these resources are not available to SDWD for the funding of its
operations.
Cardiff Sanitary Division (CSD) holds an equity interest, along with the City of Solana Beach, in the San
Elijo Joint Powers Authority (SEJPA) Joint Facilities. CSD makes capital contributions each year for the
replacement and improvement of the SEJPA Joint Facilities, which is added to its investment account at
the end of the fiscal year. CSD also makes quarterly payments to cover its proportional share of annual
operating costs. The treatment facilities, also serving other local agencies, bill quarterly for their
proportional share of operations costs and capital improvements.
Encinitas Sanitary Division (ESD) holds an equity interest, along with five other local agencies, in the
Encina Wastewater Authority (EWA) Joint Facilities. ESD makes capital contributions each year for the
replacement and improvement of the EWA Joint Facilities. These capital contributions are additions to
the investment account at the end of the fiscal year. ESD also makes quarterly payments to cover its
proportional share of annual operating costs.
The City’s joint ventures in the Cardiff Sanitary Division and Encinitas Sanitary Division increased $2.2
million and the joint venture in the San Dieguito Water District increased $5.5 million.
DEBT ISSUANCE AND ADMINISTRATION
The City has a total of $66.4 million of long-term obligations for both governmental and business-type
activities as shown in Note 8 of the basic financial statements. The governmental activities debt totaling
$42.1 million include $1.3 million in capital leases, and $40.8 million in bonded debt. Besides $42.1 million
18
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
in debt, the long-term obligations in governmental activities also includes $6.9 million in claims payable
and compensated absences. The capital leases consist of borrowings for the Civic Center Roof
Replacement project and fire apparatus vehicles. The business-type activities long-term obligation totals
$17.4 million and includes $17.2 million in bonded debt and $0.2 million in compensated absences. Of
the $59.3 million total debt that is due, $3.9 million is due within one year.
Governmental Activities $42.1 million
The majority of the City’s long-term debt is bonded debt issued in order to acquire and/or construct public
facilities including City Hall, the Public Library, the Encinitas Community Park and the Pacific View
property. Debt payments for all of these bonds are due semi-annually at fixed amounts, and the debt
matures at various times through 2045. The City’s total annual debt service of approximately $3.9 million
represents approximately five percent of annual General Fund operating revenues.
The City has a policy of utilizing lease/purchase financing for the acquisition of equipment costing more
than $100,000. The City is obligated under a lease/purchase agreement (a private placement with a
financial institution) for improvements made to City Hall in 2008 for the repair of the roof. The annual
payment on that lease is $183,556. Additionally, the City currently leases two fire engine vehicles. The
annual lease payments in FY 2020-21 were $156,296.
Business-type Activities $17.2 million
SDWD and CSD carry long-term debt issued to construct capital improvements to both their distribution
and collection systems and their Joint Facilities. On July 6, 2017, SEJPA on behalf of its members (the
CSD division and the City of Solana Beach) issued 2017 Revenue Bonds for the purpose of funding
facilities and improvements as part of SEJPA’s capital improvements. CSD’s share of the loan is
$10,615,000. The Encinitas Housing Authority has a mortgage loan with a financial institution that partially
funded the acquisition of the City’s affordable housing units (Pacific Pines). The City is not obligated in
any way for repayment of these debt issues.
General Information on City Debt
The City of Encinitas obtained and affirmed an upgrade to its issuer credit rating to AAA by Standard &
Poor’s (S&P) this year. The City’s credit rating affirmed by S&P issued a credit rating of AA+ on the City’s
2021 Lease Revenue bonds. Ratings for lease revenue bond issues are typically one notch lower than
the issuers’ rating due to the payment structure of the bond issue.
19
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2021
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS
The City’s elected and appointed officials consider many economic factors when setting budgets,
including national, state and local economic conditions, trends in residential housing, and the unique
needs of the community. The Finance Department coordinates the development of the operating and
capital budgets presented by the City Manager to the City Council for consideration. The City adopts its
operating budget over a two-year cycle, with legal appropriations set for the first year only. The operating
and capital budgets for Fiscal Year 2021-22 were appropriated by the City Council in June 2021.
The FY 2020-21 actual results, when compared to the adopted projections and appropriations, showed
revenues above forecasts and expenditures under budget. FY 2021-22 revenues are expected to
increase $4.8 million over the FY 2020-21 budget. Expenditures are budgeted to increase by $4.5 million
over the FY 2020-21 budget and capital expenditures are budgeted to increase to $24.3 million primarily
due to the funding of the Leucadia Streetscape project by obtaining financing in the amount of $20
million. Next year’s budget includes a two percent adjustment to employee compensation, which is the
largest expenditure category of the General Fund budget.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is intended to provide our residents, taxpayers, customers, and investors and
creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for
the monies it receives and manages. If you have questions about this report or need additional
information, please contact the Finance Department of the City of Encinitas, 505 South Vulcan Ave,
Encinitas, California 92024, telephone (760) 633-2600, or visit our website at www.encinitasca.gov and
review the Finance Department webpage.
20
BASIC FINANCIAL STATEMENTS
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22
GOVERNMENT-WIDE
FINANCIAL STATEMENTS
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24
City of Encinitas
Statement of Net Position
June 30, 2021
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:
Cash and investments (Note 3)82,428,758$ 47,540,633$ 129,969,391$
Restricted cash and investments with fiscal agent (Note 3)17 146,278 146,295
Receivables (Note 4)7,620,286 3,033,625 10,653,911
Interest receivable 212,423 122,148 334,571
Inventory and prepaid items 796,898 389,384 1,186,282
Total current assets 91,058,382 51,232,068 142,290,450
Noncurrent assets:
Internal balances 80,009 (80,009) -
Investments in joint ventures (Note 5)- 68,662,474 68,662,474
Long-term receivable (Note 6)444,069 - 444,069
Capital assets (Note 7):
Non-depreciable 86,150,613 7,039,038 93,189,651
Depreciable, net 145,742,478 52,757,756 198,500,234
Total capital assets, net 231,893,091 59,796,794 291,689,885
Total noncurrent assets 232,417,169 128,379,259 360,796,428
Total assets 323,475,551 179,611,327 503,086,878
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on bond refunding 287,421 - 287,421
Pension related deferred outflows of resources (Note 13)12,394,140 1,815,089 14,209,229
OPEB related deferred outflows of resources (Note 14)1,184,823 60,059 1,244,882
Total deferred outflows of resources 13,866,384 1,875,148 15,741,532
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 8,142,110 4,135,850 12,277,960
Interest payable 396,326 197,141 593,467
Unearned revenue 4,996,882 - 4,996,882
Deposits and other liabilities 3,989,284 537,935 4,527,219
Long-term liabilities - due within one year (Note 8)6,449,827 1,655,911 8,105,738
Total current liabilities 23,974,429 6,526,837 30,501,266
Noncurrent liabilities:
Long-term liabilities - due in more than one year (Note 8)42,576,624 15,730,204 58,306,828
Net pension liability (Note 13)53,884,405 7,093,742 60,978,147
Net OPEB liability (Note 14)5,926,863 213,196 6,140,059
Total noncurrent liabilities 102,387,892 23,037,142 125,425,034
Total liabilities 126,362,321 29,563,979 155,926,300
DEFERRED INFLOWS OF RESOURCES
Pension related deferred inflows of resources (Note 13)1,254,905 744,071 1,998,976
OPEB related deferred inflows of resources (Note 14)1,353,923 34,381 1,388,304
Total deferred inflows of resources 2,608,828 778,452 3,387,280
NET POSITION
Net investment in capital assets 190,035,875 42,615,968 232,651,843
Restricted:
Community development 987,383 - 987,383
Debt service 172,722 - 172,722
Housing - 386,507 386,507
Capital projects 18,307,101 - 18,307,101
Unrestricted (1,132,295) 108,141,569 107,009,274
Total net position 208,370,786$ 151,144,044$ 359,514,830$
Primary Government
See accompanying Notes to the Basic Financial Statements.
25
City of Encinitas
Statement of Activities and Changes in Net Position
For the Year Ended June 30, 2021
Operating Capital Total
Charges for Grants and Grants and Program
Functions/Programs Expenses Services Contributions Contributions Revenues
Primary government:
Governmental activities:
General government 18,698,862$ 1,361,790$ 1,365,108$ -$ 2,726,898$
Public safety 37,494,513 2,292,593 251,424 - 2,544,017
Public works 11,444,920 105,811 3,561,363 6,387,543 10,054,717
Planning services 7,360,378 3,434,081 767,683 - 4,201,764
Engineering services 9,200,037 457,981 - - 457,981
Parks and recreation 9,247,192 759,536 167,143 510,106 1,436,785
Interest on long-term debt 1,488,333 - - - -
Total governmental activities 94,934,235 8,411,792 6,112,721 6,897,649 21,422,162
Business-type activities:
Cardiff Sanitary Division 3,075,590 5,048,111 - 143,514 5,191,625
San Dieguito Water District 16,217,193 19,037,114 10,000 388,600 19,435,714
Encinitas Sanitary Division 2,751,591 2,759,121 - 18,761 2,777,882
Affordable Housing 1,797,801 329,678 1,357,154 - 1,686,832
Total business-type activities 23,842,175 27,174,024 1,367,154 550,875 29,092,053
Total primary government 118,776,410$ 35,585,816$ 7,479,875$ 7,448,524$ 50,514,215$
Program Revenues
See accompanying Notes to the Basic Financial Statements.
26
City of Encinitas
Statement of Activities and Changes in Net Position (Continued)
For the Year Ended June 30, 2021
Governmental Business-type
Functions/Programs Activities Activities Total
Primary government:
Governmental activities:
General government (15,971,964)$ -$ (15,971,964)$
Public safety (34,950,496) - (34,950,496)
Public works (1,390,203) - (1,390,203)
Planning services (3,158,614) - (3,158,614)
Engineering services (8,742,056) - (8,742,056)
Parks and recreation (7,810,407) - (7,810,407)
Interest on long-term debt (1,488,333) - (1,488,333)
Total governmental activities (73,512,073) - (73,512,073)
Business-type activities:
Cardiff Sanitary Division - 2,116,035 2,116,035
San Dieguito Water District - 3,218,521 3,218,521
Encinitas Sanitary Division - 26,291 26,291
Affordable Housing - (110,969) (110,969)
Total business-type activities - 5,249,878 5,249,878
(73,512,073) 5,249,878 (68,262,195)
General revenues:
Taxes:
Property taxes and documentary transfer taxes 54,839,785 1,227,621 56,067,406
Sales and use taxes 15,453,648 - 15,453,648
Transient occupancy taxes 2,823,055 - 2,823,055
Franchise taxes 2,599,810 - 2,599,810
Total taxes 75,716,298 1,227,621 76,943,919
Intergovernmental - unrestricted 99,985 - 99,985
Investment income 44,858 89,227 134,085
Rental income - 229,132 229,132
Other 1,162,877 574,982 1,737,859
Transfers 9,318 (9,318) -
Total general revenues and transfers 77,033,336 2,111,644 79,144,980
Changes in net position 3,521,263 7,361,522 10,882,785
Net position:
Beginning of year 204,849,523 143,782,522 348,632,045
End of year 208,370,786$ 151,144,044$ 359,514,830$
Primary Government
and Changes in Net Position
Net (Expense) Revenue
See accompanying Notes to the Basic Financial Statements.
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FUND FINANCIAL STATEMENTS
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GOVERNMENTAL FUND
FINANCIAL STATEMENTS
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32
City of Encinitas
Balance Sheet
Governmental Funds
June 30, 2021
Capital Infrastructure
Improvements Improvements Other Total
General Capital Projects Special Revenue Governmental Governmental
Fund Fund Fund Funds Funds
ASSETS
Cash and investments 29,933,035$ 31,894,013$ 5,134,561$ 8,593,341$ 75,554,950$
Receivables 5,657,063 942 1,594,242 367,631 7,619,878
Interest receivable 158,944 - 15,821 37,658 212,423
Due from other funds (Note 9)549,419 8,347,308 - - 8,896,727
Inventory and prepaid items 717,128 - - - 717,128
Long-term receivable 19,987 - - 424,082 444,069
Restricted cash and investments 3 - - 14 17
Total assets 37,035,579$ 40,242,263$ 6,744,624$ 9,422,726$ 93,445,192$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND
FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities 5,172,810$ 2,094,646$ 53,619$ 480,940$ 7,802,015$
Unearned revenue 732,447 - 4,225,582 38,853 4,996,882
Due to other funds (Note 9)- - 8,601,055 209,252 8,810,307
Deposits and other liabilities 3,967,037 - - 22,247 3,989,284
Total liabilities 9,872,294 2,094,646 12,880,256 751,292 25,598,488
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - 1,004,738 463,352 1,468,090
Total deferred inflows of resources - - 1,004,738 463,352 1,468,090
Fund Balances:
Nonspendable 737,115 - - - 737,115
Restricted 172,708 18,226,785 - 8,208,082 26,607,575
Committed 16,998,291 19,920,832 - - 36,919,123
Unassigned 9,255,171 - (7,140,370) - 2,114,801
Total fund balances 27,163,285 38,147,617 (7,140,370) 8,208,082 66,378,614
Total liabilities, deferred inflows
of resources, and fund balances 37,035,579$ 40,242,263$ 6,744,624$ 9,422,726$ 93,445,192$
Major Funds
See accompanying Notes to the Basic Financial Statements.
33
City of Encinitas
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position
June 30, 2021
Total Fund Balances - Total Governmental Funds 66,378,614$
Amounts reported for governmental activities in the Statement of Net Position were different because:
Capital assets used in governmental activities were not financial resources and therefore were
not reported in governmental funds (net of $3,737,459 reported in internal service funds).
Land 61,862,474
Land easements 2,443,333
Construction in progress 21,844,806
Public facilities 119,083,800
Vehicles, equipment and machinery 3,124,766
Infrastructure 128,427,191
Less: Accumulated depreciation (108,630,738)
Total capital assets adjustment 228,155,632
Deferred loss on refunding in the governmental activities were not financial resources and,
therefore, were not reported in governmental funds. 287,421
Interest payable on long-term debt did not require current financial resources.Therefore,
interest payable was not reported as a liability in the Governmental Funds Balance Sheet.(396,326)
Long-term liabilities applicable to the City's governmental activities were not due and payable in
the current period and therefore were not reported in the governmental funds (net of $224,244
reported in internal service funds):
Amount reported in Government-wide Statement of Net Position:
2008 Civic Center roof replacement lease (350,785)
2013 Community Park Bonds, net of unamortized premium of $61,320 (5,261,320)
2014 Moonlight Beach Tower Series A Bonds, net of unamortized discount of $24,892 (2,665,108)
2014 Pacific View Series B Bonds, net of unamortized discount of $124,960 (9,005,040)
2015 Library Refunding Bonds, net of unamortized premium of $588,353 (13,583,353)
2017 Park Refunding Bonds, net of unamortized premium of $971,631 (10,306,631)
Claims payable (4,038,427)
Compensated absences (2,843,387)
Total long-term liabilities (48,054,051)
Net pension liability is not due and payable in the current period and,therefore,is not required
to be reported in the governmental funds. (53,025,716)
Actuarially determined pension deferred outflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. 12,214,396
Actuarially determined pension deferred inflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. (1,252,402)
Net OPEB liability is not due and payable in the current period and,therefore,is not required to
be reported in the governmental funds. (5,792,487)
Actuarially determined OPEB deferred outflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. 1,157,960
Actuarially determined OPEB deferred inflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. (1,323,225)
Unavailable revenue deferred inflows of resources are not available for the current period and,
therefore, are deferred in the governmental funds or not recorded in the governmental funds. 1,468,090
Internal service funds were used by management to charge the costs of risk management,
personnel support,fleet maintenance and vehicle replacement to individual funds.The assets
and liabilities of the internal service funds were included in governmental activities in the
Government-wide Statement of Net Position.8,552,880
Net position of governmental activities 208,370,786$
See accompanying Notes to the Basic Financial Statements.
34
City of Encinitas
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Funds
For the Year Ended June 30, 2021
Capital Infrastructure
Improvements Improvements Other Total
General Capital Projects Special Revenue Governmental Governmental
Fund Fund Fund Funds Funds
REVENUES:
Taxes and assessments 73,643,022$ -$ 576,289$ 2,601,784$ 76,821,095$
Licenses and permits 261,950 - - - 261,950
Intergovernmental 740,163 - 9,592,171 1,232,929 11,565,263
Development impact fees - - - 1,088,887 1,088,887
Charges for services 5,862,696 - - - 5,862,696
Fines, forfeitures and penalties 232,873 - - - 232,873
Use of money and property 301,159 - 59,487 216,534 577,180
Other 2,285,674 281,856 - 225,585 2,793,115
Total revenues 83,327,537 281,856 10,227,947 5,365,719 99,203,059
EXPENDITURES:
Current:
General government 12,929,877 - 1,460,865 142,310 14,533,052
Public safety 34,283,456 - 95,713 240,143 34,619,312
Public works 6,246,296 - - 1,114,064 7,360,360
Planning services 6,265,249 - 160,559 513,600 6,939,408
Engineering services 3,037,830 - - 723,536 3,761,366
Parks and recreation 5,862,135 - - 1,375,643 7,237,778
Capital outlay 244,429 22,120,718 - - 22,365,147
Debt service:
Principal - - - 2,106,004 2,106,004
Interest and fiscal charges - - - 1,611,171 1,611,171
Total expenditures 68,869,272 22,120,718 1,717,137 7,826,471 100,533,598
REVENUES OVER
(UNDER) EXPENDITURES 14,458,265 (21,838,862) 8,510,810 (2,460,752) (1,330,539)
OTHER FINANCING SOURCES (USES):
Transfers in (note 9)7,383,298 24,802,081 3,872,276 4,465,125 40,522,780
Transfers out (note 9)(21,884,286) (9,529,313) (6,282,766) (3,540,313) (41,236,678)
Total other financing sources (uses)(14,500,988) 15,272,768 (2,410,490) 924,812 (713,898)
NET CHANGE IN FUND BALANCES (42,723) (6,566,094) 6,100,320 (1,535,940) (2,044,437)
FUND BALANCES:
Beginning of year 27,206,008 44,713,711 (13,240,690) 9,744,022 68,423,051
End of year 27,163,285$ 38,147,617$ (7,140,370)$ 8,208,082$ 66,378,614$
Major Funds
See accompanying Notes to the Basic Financial Statements.
35
City of Encinitas
Reconciliation of the Governmental Statement of Revenues, Expenditures, and
Changes in Fund Balances to the Government-wide Statement of Activities
and Changes in Net Position
For the Year Ended June 30, 2021
Net Change in Fund Balances - Total Governmental Funds (2,044,437)$
Amounts reported for governmental activities in the Statement of Activities were different because:
Governmental funds reported capital outlay as expenditures.However,in the Government-wide
Statement of Activities and Changes in Net Position,the cost of those assets was allocated over their
estimated useful lives as depreciation expense.This was the amount of capital assets recorded in the
current period. 13,597,737
Depreciation expense on capital assets was reported in the Government-wide Statement of Activities and
Changes in Net Position,but it did not require the use of current financial resources.Therefore,
depreciation expense was not reported as expenditures in the Governmental Funds (net of $650,991
recorded in internal service funds). (6,638,705)
Repayment of long-term liabilities was an expenditure in governmental funds,but the repayment reduced
long-term liabilities in the Government-wide Statement of Net Position.
Principal payment of long-term debt 2,106,004
Amortization expenses were reported in the Government-wide Statement of Activities and Changes in Net
Position,but they did not require the use of current financial resources.Therefore,amortization expenses
were not reported as expenditures in the Governmental Funds.
Bond premium and discount 136,452
Deferred amounts on refunding (19,162)
Certain long-term liabilities were reported in the Government-wide Statement of Activities and Changes in
Net Position,but they did not require the use of current financial resources.Therefore,long-term
liabilities were not reported as expenditures in governmental funds.These amounts represented the
changes in long-term liabilities from prior year.
Changes in compensated absences (333,676)
Changes in claims payable (795,357)
Changes in the net pension liability (3,920,964)
Changes in the net OPEB liability 860,120
The net effect of various miscellaneous transactions involving pension plans (i.e.deferred outflow/inflow
amortization, contributions after the measurement date) increased Net Position. 1,955,718
The net effect of various miscellaneous transactions involving OPEB plans (i.e.deferred outflow/inflow
amortization, contributions after the measurement date) increased Net Position. (51,080)
Interest expense on long-term debt was reported in the Government-wide Statement of Activities and
Changes in Net Position,but it did not require the use of current financial resources.This amount
represented the change in accrued interest from prior year.23,355
A portion of deferred grant revenues are not available to pay for current period expenditures and,
therefore, are not recognized in the funds.(44,659)
Internal service funds were used by management to charge the costs of certain activities to individual
funds. The net revenue of internal service funds was reported with governmental activities. (1,310,083)
Change in net position of governmental activities 3,521,263$
See accompanying Notes to the Basic Financial Statements.
36
PROPRIETARY FUND
FINANCIAL STATEMENTS
37
City of Encinitas
Statement of Net Position
Proprietary Funds
June 30, 2021
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
ASSETS
Current assets:
Cash and investments 12,398,629$ 21,632,360$ 13,260,106$
Restricted cash and investments with fiscal agent - - -
Accounts and taxes receivable 57,083 2,946,462 28,646
Interest receivable 32,157 55,159 34,183
Inventory and prepaid items 6,323 259,560 5,303
Total current assets 12,494,192 24,893,541 13,328,238
Noncurrent assets:
Investment in joint ventures 36,454,616 25,375,489 6,832,369
Capital assets:
Land - 3,450,544 -
Public works facility right-of-use - 3,378,700 -
Construction in progress - - 209,794
Capacity rights, net - 158,902 -
Utility, plant, vehicles, and equipment, net 20,997,177 15,102,458 14,195,228
Total capital assets, net 20,997,177 22,090,604 14,405,022
Total noncurrent assets 57,451,793 47,466,093 21,237,391
Total assets 69,945,985 72,359,634 34,565,629
DEFERRED OUTFLOWS OF RESOURCES
Pension related deferred outflows of resources - 1,815,089 -
OPEB related deferred outflows of resources - 60,059 -
Total deferred outflows of resources - 1,875,148 -
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 958,134 2,368,148 791,463
Due to other funds (Note 9)- - -
Accrued interest payable 146,038 51,103 -
Deposits - 519,476 -
Compensated absences - due in one year - 95,536 -
Current portion of long-term debt 230,000 1,240,000 -
Total current liabilities 1,334,172 4,274,263 791,463
Noncurrent liabilities:
Capital leases payable - - -
Revenue bonds payable - due in more than one year - 1,703,115 -
Notes and mortgages payable - due in more than one year 11,297,912 1,785,000 -
Compensated absences - due in more than one year - 96,736 -
Net pension liability - 7,093,742 -
Net OPEB liability - 213,196 -
Total noncurrent liabilities 11,297,912 10,891,789 -
Total liabilities 12,632,084 15,166,052 791,463
DEFERRED INFLOWS OF RESOURCES
Pension related deferred inflows of resources - 744,071 -
OPEB related deferred inflows of resources - 34,381 -
Total deferred inflows of resources - 778,452 -
NET POSITION
Net investment in capital assets 9,469,265 17,362,489 14,405,022
Restricted:
Housing - - -
Unrestricted 47,844,636 40,927,789 19,369,144
Total net position 57,313,901$ 58,290,278$ 33,774,166$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements.
38
City of Encinitas
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2021
Non-major Governmental
Enterprise Fund Activities
Affordable Internal
Housing Total Service Funds
ASSETS
Current assets:
Cash and investments 249,538$ 47,540,633$ 6,873,808$
Restricted cash and investments with fiscal agent 146,278 146,278 -
Accounts and taxes receivable 1,434 3,033,625 408
Interest receivable 649 122,148 -
Inventory and prepaid items 118,198 389,384 79,770
Total current assets 516,097 51,232,068 6,953,986
Noncurrent assets:
Investment in joint ventures - 68,662,474 -
Capital assets:
Land - 3,450,544 -
Public works facility right-of-use - 3,378,700 -
Construction in progress - 209,794 -
Capacity rights, net - 158,902 -
Utility, plant, vehicles, and equipment, net 2,303,991 52,598,854 3,737,459
Total capital assets, net 2,303,991 59,796,794 3,737,459
Total noncurrent assets 2,303,991 128,459,268 3,737,459
Total assets 2,820,088 179,691,336 10,691,445
DEFERRED OUTFLOWS OF RESOURCES
Pension related deferred outflows of resources - 1,815,089 179,744
OPEB related deferred outflows of resources - 60,059 26,863
Total deferred outflows - 1,875,148 206,607
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 18,105 4,135,850 340,095
Due to other funds (Note 9)80,009 80,009 6,411
Accrued interest payable - 197,141 -
Deposits 18,459 537,935 -
Compensated absences - due in one year 4,883 100,419 -
Current portion of long-term debt 85,492 1,555,492 191,162
Total current liabilities 206,948 6,606,846 537,668
Noncurrent liabilities:
Capital leases payable - - 781,238
Revenue bonds payable - due in more than one year - 1,703,115 -
Notes and mortgages payable - due in more than one year 839,307 13,922,219 -
Compensated absences - due in more than one year 8,134 104,870 -
Net pension liability - 7,093,742 858,689
Net OPEB liability - 213,196 134,376
Total noncurrent liabilities 847,441 23,037,142 1,774,303
Total liabilities 1,054,389 29,643,988 2,311,971
DEFERRED INFLOWS OF RESOURCES
Pension related deferred inflows of resources - 744,071 2,503
OPEB related deferred inflows of resources - 34,381 30,698
Total deferred inflows - 778,452 33,201
NET POSITION
Net investment in capital assets 1,379,192 42,615,968 2,765,059
Restricted:
Housing 386,507 386,507 -
Unrestricted - 108,141,569 5,787,821
Total net position 1,765,699$ 151,144,044$ 8,552,880$
See accompanying Notes to the Basic Financial Statements.
39
City of Encinitas
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2021
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
OPERATING REVENUES:
Charges for services 5,048,111$ 18,978,184$ 2,759,121$
Rental income - - -
Interfund revenues - 58,930 -
Intergovernmental - - -
Other revenues - 33,885 -
Total operating revenues 5,048,111 19,070,999 2,759,121
OPERATING EXPENSES:
Housing assistance payments - - -
Source of supply - 6,557,383 -
General operations and maintenance 1,224,108 7,043,472 801,835
Facility operations and maintenance 1,520,097 2,886,039 836,972
General and administrative 217,891 - 130,298
Depreciation 454,813 757,346 441,705
Insurance and claims 57,884 69,482 51,540
Total operating expenses 3,474,793 17,313,722 2,262,350
OPERATING INCOME (LOSS)1,573,318 1,757,277 496,771
NONOPERATING REVENUES (EXPENSES):
Investment income 29,879 35,766 18,706
Property taxes - 1,227,621 -
Operating grants - 10,000 -
Rental income - 123,368 -
Net change from joint ventures 842,956 1,295,329 (489,241)
Gain (loss) on disposal of capital assets - - -
Other nonoperating revenue - 367,845 -
Amortization of bond premium 98,880 74,372 -
Interest expense (443,753) (198,800) -
Total nonoperating revenues (expenses)527,962 2,935,501 (470,535)
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 2,101,280 4,692,778 26,236
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions 143,514 388,600 18,761
Transfers in (Note 9)- 8,759 -
Transfers out (Note 9)- - -
Total capital contributions and transfers 143,514 397,359 18,761
CHANGES IN NET POSITION 2,244,794 5,090,137 44,997
NET POSITION:
Beginning of year 55,069,107 53,200,141 33,729,169
End of year 57,313,901$ 58,290,278$ 33,774,166$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements.
40
City of Encinitas
Statement of Revenues, Expenses, and Changes in Net Position (Continued)
Proprietary Funds
For the Year Ended June 30, 2021
Non-major
Enterprise Fund Governmental
Activities
Affordable Internal
Housing Total Service Funds
OPERATING REVENUES:
Charges for services -$ 26,785,416$ -$
Rental income 105,764 105,764 -
Interfund revenues 123,808 182,738 2,808,331
Intergovernmental 205,870 205,870 -
Other revenues - 33,885 706,614
Total operating revenues 435,442 27,313,673 3,514,945
OPERATING EXPENSES:
Housing assistance payments 1,403,463 1,403,463 -
Source of supply - 6,557,383 -
General operations and maintenance 130,855 9,200,270 999,207
Facility operations and maintenance - 5,243,108 -
General and administrative 147,181 495,370 1,653,573
Depreciation 100,538 1,754,402 650,991
Insurance and claims - 178,906 2,227,202
Total operating expenses 1,782,037 24,832,902 5,530,973
OPERATING INCOME (LOSS)(1,346,595) 2,480,771 (2,016,028)
NONOPERATING REVENUES (EXPENSES):
Investment income 4,876 89,227 -
Property taxes - 1,227,621 -
Operating grants 1,357,154 1,367,154 -
Rental income - 123,368 -
Net change from joint ventures - 1,649,044 -
Gain (loss) on disposal of capital assets - - 538
Other nonoperating revenue - 367,845 -
Amortization of bond premium - 173,252 -
Interest expense (15,764) (658,317) (17,809)
Total nonoperating revenues (expenses)1,346,266 4,339,194 (17,271)
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (329) 6,819,965 (2,033,299)
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions - 550,875 -
Transfers in (Note 9)- 8,759 1,855,216
Transfers out (Note 9)(18,077) (18,077) (1,132,000)
Total capital contributions and transfers (18,077) 541,557 723,216
CHANGES IN NET POSITION (18,406) 7,361,522 (1,310,083)
NET POSITION:
Beginning of year 1,784,105 143,782,522 9,862,963
End of year 1,765,699$ 151,144,044$ 8,552,880$
See accompanying Notes to the Basic Financial Statements.
41
City of Encinitas
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2021
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users 5,082,772$ 18,840,882$ 2,766,280$
Cash received from other funds - 58,930 -
Payments to employees (2,265) (3,633,573) -
Payments to suppliers for goods and services (2,102,108) (11,158,145) (1,660,690)
Other operating revenues - 33,885 -
Net cash provided by (used in) operating activities 2,978,399 4,141,979 1,105,590
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition of capital assets (3,522,610) (51,439) (799,236)
Capital contributions received - connection/capacity fees 143,514 184,800 18,761
Principal payments on long-term debt (284,999) (1,190,000) -
Interest payments on long-term debt (446,573) (211,766) -
Capital related payments to other agencies (667,950) (4,187,788) (1,082,782)
Proceeds from capital lease - - -
Proceeds received from disposal of capital assets - - -
Net cash (used in) capital and related financing activities (4,778,618) (5,456,193) (1,863,257)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Proceeds from operating grants - 377,845 -
Proceeds from property taxes - 1,227,621 -
Proceeds from rental income 123,368
Cash received from other funds - 8,759 -
Cash paid to other funds - - -
Net cash provided by (used in) noncapital financing activities - 1,737,593 -
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest income 52,314 63,274 38,805
Net cash provided by investing activities 52,314 63,274 38,805
Net increase (decrease) in cash and cash equivalents (1,747,905) 486,653 (718,862)
CASH AND CASH EQUIVALENTS:
Beginning of year 14,146,534 21,145,707 13,978,968
End of year 12,398,629$ 21,632,360$ 13,260,106$
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO
STATEMENT OF NET POSITION:
Cash and investments 12,398,629$ 21,632,360$ 13,260,106$
Restricted cash and investments with fiscal agent - - -
Total cash and cash equivalents 12,398,629$ 21,632,360$ 13,260,106$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements.
42
City of Encinitas
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2021
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss)1,573,318$ 1,757,277$ 496,771$
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation 454,813 757,346 441,705
Changes in operating assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Changes in assets – (increase) decrease:
Accounts and taxes receivable 34,661 (152,113) 7,159
Inventory and prepaid items (1,271) (26,333) (1,008)
Change in deferred outflows of resources – (increase) decrease:
OPEB-related deferred outflows - 9,871 -
Pension-related deferred outflows - 687,758 -
Changes in liabilities – increase (decrease):
Accounts payable and accrued liabilities 916,878 1,408,225 160,963
Due to other funds - - -
Deposits - 14,811 -
Compensated absences - 35,072 -
Net OPEB liability - (11,823) -
Net pension liability - (484,060) -
Change in deferred inflows of resources – increase (decrease):
OPEB-related deferred inflows - (8,818) -
Pension-related deferred inflows - 154,766 -
Total adjustments 1,405,081 2,384,702 608,819
Net cash provided by (used in) operating activities 2,978,399$ 4,141,979$ 1,105,590$
NON-CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Amortization of original issue premium 98,880$ 74,372$ -$
Donation of capital assets - 203,800 -
Total non-cash capital and related financing activities 98,880$ 278,172$ -$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements.
43
City of Encinitas
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2021
Non-major
Enterprise Fund Governmental
Activities
Affordable Internal
Housing Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users 311,160$ 27,001,094$ 3,514,537$
Cash received from other funds 123,808 182,738 -
Payments to employees (136,771) (3,772,609) (1,550,112)
Payments to suppliers for goods and services (1,542,577) (16,463,520) (3,568,951)
Other operating revenues - 33,885 -
Net cash provided by (used in) operating activities (1,244,380) 6,981,588 (1,604,526)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition of capital assets - (4,373,285) (77,319)
Capital contributions received - connection/capacity fees - 347,075 -
Principal payments on long-term debt (84,115) (1,559,114) (138,487)
Interest payments on long-term debt (15,764) (674,103) (17,809)
Capital related payments to other agencies - (5,938,520) -
Proceeds from capital lease - - 737,623
Proceeds received from disposal of capital assets - - 538
Net cash (used in) capital and related financing activities (99,879) (12,197,947) 504,546
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Proceeds from operating grants 1,357,154 1,734,999 -
Proceeds from property taxes - 1,227,621 -
Proceeds from rental income - 123,368 -
Cash received from other funds - 8,759 1,855,216
Cash paid to other funds (27,613) (27,613) (1,132,000)
Net cash provided by (used in) noncapital financing activities 1,329,541 3,067,134 723,216
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest income 5,702 160,095 -
Net cash provided by investing activities 5,702 160,095 -
Net increase (decrease) in cash and cash equivalents (9,016) (1,989,130) (376,764)
CASH AND CASH EQUIVALENTS:
Beginning of year 404,832 49,676,041 7,250,572
End of year 395,816$ 47,686,911$ 6,873,808$
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO
STATEMENT OF NET POSITION:
Cash and investments 249,538$ 47,540,633$ 6,873,808$
Restricted cash and investments with fiscal agent 146,278 146,278 -
Total cash and cash equivalents 395,816$ 47,686,911$ 6,873,808$
See accompanying Notes to the Basic Financial Statements.
44
City of Encinitas
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2021
Non-major
Enterprise Fund Governmental
Activities
Affordable Internal
Housing Total Service Funds
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss)(1,346,595)$ 2,480,771$ (2,016,028)$
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation 100,538 1,754,402 650,991
Changes in operating assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Changes in assets – (increase) decrease:
Accounts and taxes receivable (474) (110,767) (408)
Inventory and prepaid items (12,477) (41,089) (19,196)
Change in deferred outflows of resources – (increase) decrease:
OPEB-related deferred outflows - 9,871 (1,869)
Pension-related deferred outflows - 687,758 (19,636)
Changes in liabilities – increase (decrease):
Accounts payable and accrued liabilities 16,406 2,502,472 (36,639)
Due to other funds - - (278,436)
Deposits - 14,811 -
Compensated absences (1,778) 33,294 -
Net OPEB liability - (11,823) 5,528
Net pension liability - (484,060) 137,975
Change in deferred inflows of resources – increase (decrease):
OPEB-related deferred inflows - (8,818) 3,492
Pension-related deferred inflows - 154,766 (30,300)
Total adjustments 102,215 4,500,817 411,502
Net cash provided by (used in) operating activities (1,244,380)$ 6,981,588$ (1,604,526)$
NON-CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Amortization of original issue premium -$ 173,252$ -$
Donation of capital assets - 203,800 -
-$ 377,052$ -$
See accompanying Notes to the Basic Financial Statements.
45
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46
FIDUCIARY FUND
FINANCIAL STATEMENTS
47
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48
City of Encinitas
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2021
Investment Custodial
Custodial Fund Fund
Assets:
Cash and investments (note 3)2,490,890$ 2,387,555$
Restricted cash and investments:
Held by fiscal agents 1,974,851
Interest receivable 5,840 6,087
Current assessments receivable - 9,500
Total assets 2,496,730 4,377,993
Liabilities:
Accounts payable - -
Total liabilities - -
Net Position:
Restricted for:
Golf course 2,496,730 -
Bondholders - 4,377,993
Total net position 2,496,730$ 4,377,993$
49
City of Encinitas
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2021
Investment Custodial
Custodial Fund Fund
Additions:
Special tax assessments -$ 2,554,093$
Interest income (loss)(8,806) (8,361)
Total additions (8,806) 2,545,732
Deductions:
Administrative fees 1,520 30,561
Bond principal - 1,665,000
Bond interest - 913,319
Total Deductions 1,520 2,608,880
Change in net position (10,326) (63,148)
NET POSITION:
Beginning of year, as restated (note 18)2,507,056 4,441,141
End of year 2,496,730$ 4,377,993$
50
NOTES TO THE BASIC
FINANCIAL STATEMENTS
51
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52
City of Encinitas
Notes to the Basic Financial Statements
For the Year Ended June 30,2021
Note 1 –Reporting Entity
The City of Encinitas (the “City”) was incorporated on October 1, 1986, pursuant to an election
approving the San Dieguito Reorganization Plan, which consisted primarily of the detachment of
territory from the Cardiff area and the annexation of the same territory to the City of Solana Beach.
The City is governed by a City Council consisting of a mayor and four council members under the
Council-Manager form of government.
In evaluating how to define the City for financial reporting purposes, management has considered all
potential component units. The primary criteria for including a potential component unit within the
reporting entity are the governing body’s financial accountability and a financial benefit or burden
relationship and whether it is misleading to exclude. A primary government is financially accountable
and shares a financial benefit or burden relationship if it appoints a voting majority of an organization’s
governing body and it is able to impose its will on the organization, or if there is a potential for the
organization to provide specific financial benefits to,or impose specific financial burdens on the primary
government. A primary government may also be financially accountable if an organization is fiscally
dependent on the primary government regardless of whether the organization has a separately elected
governing board, a governing board appointed by a higher level of government, or a jointly appointed
board, and there is a potential for the organization to provide specific financial benefits to, or impose
specific financial burdens on the primary government.
Blended Component Units
Although the following are legally separate from the City, they have been “blended” as though they are
part of the City because the component unit’s governing body is substantially the same as the City’s
and there is a financial benefit or burden relationship between the City and the component unit;
management of the City has operational responsibilities for the component units; and/or the component
units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost
exclusively, benefits the City, even though it does not provide services directly to it.
The San Dieguito Water District (“SDWD”)was formed in 1922 under the laws of the State of California
to supply water services to the central western portion of San Diego County. Certain management,
maintenance, and operating functions are the responsibility of the City, which bills periodically for these
services.
The Encinitas Housing Authority (the “EHA”)was formed on January 26, 1994, under the laws of the
State of California to provide housing assistance to citizens of the City.
The Encinitas Public Financing Authority (the “EPFA”) was formed on November 6, 1991, by the City
and SDWD as a Joint Powers Authority under the laws of the State of California to purchase, finance,
and lease certain real property to the members. The member agencies are the City and the SDWD.
The following specific criteria were used in determining the status of these component units:
Members of the City Council also act as the governing body of the EHA, the EPFA and
SDWD.
The City, the EHA, the EPFA and SDWD are financially interdependent.
53
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 1 –Reporting Entity (Continued)
Blended Component Units (Continued)
The EHA, the EPFA and SDWD are managed, at least in part, by employees of the City,
who provide various support functions including financial reporting and investment
decisions.
Separate financial statements for SDWD are available at the City's administrative office. Separate
financial statements are not required or prepared for the EHA and the EPFA.
Note 2 –Summary of Significant Accounting Policies
A.Basis of Presentation
Financial statement presentation follows the recommendations promulgated by the Governmental
Accounting Standards Board (“GASB”) commonly referred to as accounting principles generally
accepted in the United States of America (“U.S. GAAP”). GASB is the accepted standard-setting
body for establishing governmental accounting and financial reporting standards.
B.Measurement Focus, Basis of Accounting and Financial Statements Presentation
The accounts of the City are organized on the basis of funds, each of which is considered a
separate accounting entity. The operations of each fund are accounted for by providing a separate
set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and
expenditures or expenses, as appropriate. Fund accounting segregates funds according to their
intended purpose and is used to aid management in demonstrating compliance with finance-related
legal and contractual provisions. The minimum number of funds is maintained in accordance with
legal and managerial requirements.
The Statement of Net Position/Balance Sheet reports separate sections for Deferred Outflows of
Resources, and Deferred Inflows of Resources, when applicable.
Deferred Outflows of Resources represent outflows of resources (consumption of net
position) that apply to future periods and, therefore, will not be recognized as an expense
until that time.The City reports deferred loss on refunding, deferred outflows related to
pensions,and Other Post-Employment Benefits (OPEB)in this category.
Deferred Inflows of Resources represent inflows of resources (acquisition of net position)
that apply to future periods and, therefore, are not recognized as revenue until that time.The
City has two types of items that qualify for reporting in this category. The first two items are
deferred inflows related to pensions and OPEB. The third item, unavailable revenue, is
reported only in the governmental funds balance sheet. The governmental funds report
unavailable revenues from grants. This amount is deferred and recognized as an inflow of
resources in the period the amount becomes available.
54
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
B.Measurement Focus, Basis of Accounting and Financial Statements Presentation
(Continued)
Government-wide Financial Statements
The City’s Government-wide Financial Statements include a Statement of Net Position,and a
Statement of Activities and Changes in Net Position. These statements present summaries of
governmental and business-type activities for the City accompanied by a total column.Fiduciary
activities of the City are not included in these statements.
These financial statements are presented on an “economic resources” measurement focus and the
accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital
assets, as well as infrastructure assets, and long-term liabilities,are included in the accompanying
Statement of Net Position. The Statement of Activities presents changes in Net Position. Under
the accrual basis of accounting, revenues are recognized in the period in which they are earned
while expenses are recognized in the period in which the liability is incurred.
Certain types of transactions are reported as program revenues for the City in three categories:
Charges for services
Operating grants and contributions
Capital grants and contributions
Certain eliminations have been made in regard to interfund activities, payables and receivables.
All internal balances in the Statement of Net Position have been eliminated except those
representing balances between the governmental activities and the business-type activities, which
are presented as internal balances and eliminated in the total primary government column. In the
Statement of Activities and Changes in Net Position, internal service fund transactions have been
eliminated; however, those transactions between governmental and business-type activities have
not been eliminated. The following interfund activities have been eliminated:
Due to/from other funds
Transfers in/out
Government Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues,
Expenditures,and Changes in Fund Balances for all major governmental funds and non-major
funds aggregated. An accompanying schedule is presented to reconcile and explain the differences
in Net Position as presented in these statements to the Net Position presented in the Government-
wide Financial Statements. The City has presented all major funds that met the applicable criteria.
All governmental funds are accounted for on a spending,or "current financial resources"
measurement focus and the modified accrual basis of accounting. Accordingly, only current assets
and current liabilities are included on the Balance Sheet. The Statement of Revenues,
Expenditures,and Changes in Fund Balances presents increases (revenues and other financing
sources) and decreases (expenditures and other financing uses) in fund balances.
55
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
B.Measurement Focus, Basis of Accounting and Financial Statements Presentation
(Continued)
Government Fund Financial Statements (Continued)
Under the modified accrual basis of accounting, revenues are recognized in the accounting period
in which they become both measurable and available to finance expenditures of the current period.
Revenues are recorded when received in cash, except for those revenues subject to accrual
(generally 60 days after year end) are recognized when earned.The primary revenue sources,
which have been treated as susceptible to accrual by the City, are property taxes, transient
occupancy taxes, franchise taxes, sales tax, licenses, intergovernmental revenues and other taxes.
Expenditures are recorded in the accounting period in which the related fund liability is incurred.
The Reconciliation of the Fund Financial Statements to the Government-wide Financial Statements
is provided to explain the differences.
The City reports the following major Governmental Funds:
The General Fund is used to account for resources which are not required to be accounted for
in another fund. The fund includes the general activities of the City and other administrative
functions.
The Capital Improvements Capital Projects Fund is used to account for financial resources to
be used for the acquisition or construction of major property, equipment, or facilities which are
generally financed by governmental funds.
The Infrastructure Improvements Special Revenue Fund is used to account for financial
resources from state and federal grants which are primarily to fund operations and capital
improvements.
Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of
Revenues, Expenses,and Changes in Net Position, and a Statement of Cash Flows for each major
Proprietary Fund. A separate column representing Internal Service Funds is also presented in these
statements. However, internal service balances and activities have been combined with the
governmental activities in the Government-wide Financial Statements. The City’s Internal Service
Funds include four individual funds which provide services directly to other City funds. These areas
of service include Risk Management,Wastewater Support, Vehicle Maintenance, and Vehicle
Replacement.
Proprietary funds are accounted for using the "economic resources" measurement focus and the
accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent)
are included on the Statement of Net Position.
56
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
B.Measurement Focus, Basis of Accounting and Financial Statements Presentation
(Continued)
Proprietary Fund Financial Statements (Continued)
The Statement of Revenues, Expenses,and Changes in Net Position presents increases
(revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting,
revenues are recognized in the period in which they are earned while expenses are recognized in
the period in which the liability is incurred. In these funds, receivables have been recorded as
revenue and provisions have been made for uncollectible amounts.
Operating revenues in the proprietary funds are those revenues that are generated from the primary
operations of the fund. All other revenues are reported as non-operating revenues. Operating
expenses are those expenses that are essential to the primary operations of the fund. All other
expenses are reported as non-operating expenses.
The City reports the following major proprietary funds:
The Cardiff Sanitary Division (“CSD”) Enterprise Fund provides wastewater collection and
treatment services to approximately 6,400 customers in the southern portion of the City.
The San Dieguito Water District (“SDWD”) Enterprise Fund provides potable and reclaimed
water services to approximately 11,000 customers in Encinitas.
The Encinitas Sanitary Division (“ESD”) Enterprise Fund provides wastewater collection
and treatment services to approximately 4,000 customers in the northern portion of the City.
Fiduciary Fund Financial Statements
Fiduciary Fund Financial Statements are accounted for according to the nature of the fund. The City
has a Custodial fund and an Investment Trust Fund.
The Custodial Fund accounts for one Community Facilities (Mello-Roos) District for which the City
acts as an agent for debt service activities.
The Investment Trust Fund accounts for the cash invested on behalf of the Encinitas Ranch Golf
Course.
C.Cash, Cash Equivalents, and Investments
The City pools its available cash for investment purposes.The City considers pooled cash and
investment amounts, with original maturities of three months or less, to be cash equivalents.
Highly liquid market investments with maturities of one year or less at time of purchase are stated at
amortized cost. All other investments are stated at fair value. Market value is used as fair value for
those securities for which market quotations are readily available.
57
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
C.Cash, Cash Equivalents, and Investments (Continued)
The Statement of Cash Flows requires presentation of “cash and cash equivalents”. For the
purposes of the statement of cash flows, the City considers all proprietary fund pooled cash and
investments as “cash and cash equivalents,”as such funds are available to the various funds as
needed.
Certain disclosure requirements,if applicable,for deposits and investment risks in the following
areas:
Interest rate risk
Credit risk
o Overall
o Custodial credit risk
o Concentration of credit risk
Foreign currency risk
In addition, other disclosures are specified including use of certain methods to present deposits and
investments, highly sensitive investments, credit quality at year end and other disclosures.
D.Restricted Cash and Investments with Fiscal Agents
Cash and investments with fiscal agents are restricted due to limitations on their use by bond
covenants.Fiscal agents acting on behalf of the City hold investment funds arising from the
proceeds of long-term debt issuances. The funds may be used for specific capital outlays or for the
payment of certain bonds and have been invested only as permitted by specific State statutes or
applicable City ordinance, resolution or bond indenture.
E.Fair Value Measurement
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;
Inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
58
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
E.Fair Value Measurement (Continued)
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.
F.Receivables
Receivables include such items as taxes, intergovernmental revenues, charges for services,
miscellaneous accounts receivable, and interest receivable. No allowance for doubtful accounts has
been established, as the City believes all amounts are considered to be collectible in the normal
course of business.
G.Investments in Joint Ventures
The City’s Cardiff Sanitary Division, San Dieguito Water District, and Encinitas Sanitary Division
(the “City agencies”) participate in joint ventures with other local agencies, generally to provide
water and wastewater treatment more efficiently. Each entity has an ownership interest in the
respective joint facilities,which are accounted for under the equity method of accounting. The City
agencies pay for the fair share of operating costs and make capital contributions for major
maintenance and the upgrade or construction of facilities. The City agencies also record their share
of the results of operations for these joint ventures. Refer to Note 5, Investment in Joint Ventures.
H.Inventory and Prepaid Items
Inventory applies only to SDWD and consists of water meters and other material used in the repair
of capital facilities.Inventory is valued at average-cost using the first-in first-out basis.Prepaid items
are payments made to vendors for services that will benefit periods beyond the fiscal year ended.
The cost of inventory and prepaids are recorded as expenditures/expenses when consumed rather
than purchased.
I.Capital Assets
Capital assets are valued at historical cost or estimated historical cost if the actual historical cost
was not available. Donated capital assets are valued at their acquisition value on the date donated.
City policy has set the capitalization threshold for reporting capital assets at $5,000 for non-
infrastructure assets and $100,000 for infrastructure assets. Depreciation is recorded on a straight-
line basis over estimated useful lives of the assets as follows:
Structures and impro vements 20 - 45 years
Equipment, machinery and vehicles 5 - 20 years
Infrastructure 20 - 50 years
Co lle ctio n and distributio n systems 50 years
The City defines infrastructure as the basic physical assets that allow the City to function.
59
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
I.Capital Assets (Continued)
Governmental fund capital assets include land, land easements, construction in progress, public
facilities (buildings and building improvements), vehicles, equipment and machinery, and
infrastructure assets (e.g., roads, streets and sidewalks, bridges, curbs and gutters, drainage
systems, lighting systems and similar assets).
Proprietary fund capital assets include, land easements, public works facility right of use,
construction in progress, structures and improvements, collection and distribution systems,
machinery and equipment, and capacity rights, which are stated at cost. Contributed assets, which
are principally collection and distribution lines, are stated at cost or estimated acquisition value on
the date of donation.
J.Deposit Liabilities
The City collects deposits from homeowners and commercial enterprises as surety for the payment
of fees and other costs related to planning and engineering services provided by the City.The City
collects two types of deposits: (1) Application Deposits and (2) Security Deposits. Application
deposits are collected on certain projects for which a fee for services has not been established. As
costs for these projects are incurred by the City, the applicant's deposit balance is adjusted,and
revenue (including applicable overhead charges) is recognized. Expenses incurred in excess of the
deposit amounts are billed to the applicant. Any surplus at project completion is returned to the
applicant. Security deposits are collected from the applicant to guarantee required performance.
These may either be in cash or in the form of non-cash,such as performance bonds or letters of
credit. The amount of cash deposits on hand as of June 30, 2021 is reported as a current liability in
the Statement of Net Position and Balance Sheets.Noncash security deposits are not reported as
liabilities, as the corresponding surety is not an asset of the City.
K.Unearned Revenue
Unearned revenue recorded in the government-wide statement of net position for governmental
activities and the governmental fund financial statements consist of federal and state capital grants,
representing voluntary non-exchange transactions, for which advance payments have been
received from the provider for which eligibility requirements, other than timing requirements, have
not been satisfied.
Unearned revenue recorded in the government-wide statement of net position for business-type
activities and the proprietary fund financial statements generally consist of program fees collected
from customers prior to the statement of net position date for recreation programs that begin in the
next fiscal year or donations for capital or work projects, for which the related expenses have not
yet been incurred.
L.Long-Term Debt
For the government-wide financial statements and proprietary fund financial statements, long-term
debt and other financial obligations are reported as liabilities, net of bond premiums or discounts.
60
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
L.Long-Term Debt (Continued)
Bond premiums and discounts are amortized over the life of the bonds using the straight-line
method. Issuance costs are reported as expense when incurred.
Governmental fund financial statements do not present long-term debt but are shown in the
Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net
Position.
M.Arbitrage Rebate Requirement
The City is subject to the Internal Revenue Code (“IRC”) Section 148(f), related to its tax-exempt
revenue bonds. The IRC requires that investment earnings on gross proceeds of any revenue
bonds that are in excess of the amount prescribed be surrendered to the Internal Revenue Service.
The City had no rebate liability for arbitrage as of June 30, 2021.
N.Claims Liabilities
The City accounts for material claims and judgments outstanding at year end. When it is probable
that a claim liability has been incurred at year end, and the amount of the loss can be reasonably
estimated, the City records the estimated loss.
O.Compensated Absences
The City’s policy permits its non-fire employees to accumulate up to a maximum of 500 hours
vacation. Fire employees can accrue up to a maximum of 720 hours of vacation, depending on the
length of employment with the City. Non-fire employees are compensated five days of sick leave
per year with no balances accruing upon separation of employment. Fire employees may accrue up
to 500 hours of sick leave. The combined unused vacation and sick pay will be paid to the
employee or his/her beneficiary upon leaving the City’s employment.The amount due will be
determined using the salary/wage rate in effect at the time of separation.
Government-wide Financial Statements –For governmental and business-type activities,
compensated absences are recorded as expenses and liabilities as incurred.
Fund Financial Statements –In governmental funds, compensated absences are recorded as
expenditures in the years paid, as it is the City’s policy to liquidate any unpaid compensated
absences at June 30 from future resources, rather than currently available financial resources.
The General Fund is typically used to liquidate compensated absences.In proprietary funds,
compensated absences are expensed to the various funds in the period they are earned, and
such fund’s share of the unpaid liability is recorded as a long-term liability of the fund.
61
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
P.Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred
inflows of resources related to pensions, and pension expense,information about the fiduciary net
position of the plans and additions to/deductions from the plans’ fiduciary net position have been
determined on the same basis as they are reported by the plans (Note 13). For this purpose,benefit
payments (including refunds of employee contributions) are recognized when due and payable in
accordance with benefit terms. Investments are reported at fair value.
The following timeframes are used for pension reporting:
Va luation date June 30, 2019
Me as urem ent Date June 30, 2020
Me as urem ent Per iod July 1, 2019 to June 30, 2020
The obligations for net pension liability and OPEB are primarily liquidated from the General Fund.
There is no fixed payment schedule for these liabilities
Q.Other Post-Employment Benefits
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred
inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net
position of the plans and additions to/deductions from the plans’ fiduciary net position have been
determined on the same basis as they are reported by the plans (Note 14).
The following timeframes are used for OPEB reporting:
Va luation date June 30, 2020
Me as ur em ent D ate June 30, 2020
Me as ur em ent Period July 1, 2019 to June 30, 2020
R.Net Position
For government-wide and proprietary fund financial statements, net position represents the
difference between all other elements in the statement of net position and should be displayed in
the following three components.
Net Investment in Capital Assets –This component of net position consists of capital
assets, net of accumulated depreciation,plus deferred outflows of resources attributed to
their acquisition, reduced by the outstanding balances of debt that are attributable to the
acquisition, construction,or improvement of those assets and deferred inflows of resources
attributable to their acquisition.
Restricted –This component of net position consists of restricted assets reduced by
liabilities and deferred inflows of resources related to those assets.
62
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
R.Net Position (Continued)
Unrestricted –This component of net position is the amount of the assets, deferred
outflows of resources, liabilities, and deferred inflows of resources that are not included in
the determination of net investment in capital assets or the restricted component of net
position.
When an expense is incurred for purposes for which both restricted and unrestricted net position
are available, the City’s policy is to apply restricted net position first.
S.Fund Balances
In governmental fund financial statements, fund balances are categorized as follows:
Non-spendable –Items that cannot be spent because they are not in spendable form, such
as prepaid items and inventories,and items that are legally or contractually required to be
maintained intact, such as principal of an endowment or revolving loan funds.
Restricted –Restricted fund balances encompass the portion of net fund resources subject
to externally enforceable legal restrictions. This includes externally imposed restrictions by
creditors, such as through debt covenants, grantors, contributors, laws or regulations of
other governments, as well as restrictions imposed by law through constitutional provisions
or enabling legislation.
Committed –Committed fund balances encompass the portion of net fund resources, the
use of which is constrained by limitations that the government imposes upon itself at its
highest level of decision making, normally the governing body, and that remain binding
unless removed in the same manner. Adoption of a resolution by the City Council is required
to commit resources or rescind the commitment.
Assigned –Assigned fund balances encompass the portion of net fund resources reflecting
the government’s intended use of resources. Assignment of resources can be done by the
highest level of decision making or by a committee or official designated for that purpose.
The City Council adopted a resolution contained within the annual budget that delegates the
authority to the Director of Finance to assign fund balance amounts in the annual financial
statements.
Unassigned –This amount is for any portion of the fund balances that do not fall into one of
the above categories.The General Fund is the only fund that reports a positive unassigned
fund balance amount. In other governmental funds, it is not appropriate to report a positive
unassigned fund balance amount. However, in governmental funds other than the General
Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted,
committed or assigned to those purposes, it may be necessary to report a negative
unassigned fund balance in that particular fund.
63
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
S.Fund Balances (Continued)
When expenditures are incurred for purposes where only unrestricted fund balances are
available, the City uses the unrestricted resources in the following order: committed, assigned,
and unassigned.
T.Property Taxes
Property taxes are levied on July 1 and are payable in two installments: November 1 and February
1 of each year.Property taxes become delinquent on December 10 and April 10, for the first and
second installments, respectively. The lien date is January 1. The County of San Diego, California
(County)bills and collects property taxes and remits them to the City according to a payment
schedule established by the County.
The County is permitted by State law to levy taxes at one percent of full market value (at time of
purchase). The City receives a share of this basic tax levy.
Property tax revenue is recognized in the fiscal year for which the taxes have been levied,provided
the taxes are received within 60 days after the end of the fiscal year. Property taxes received after
this date are not considered available as a resource that can be used to finance the current year
operations of the City and therefore, are not recorded as revenue until collected.
No allowance for doubtful accounts on property taxes receivable was considered necessary.
U.Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of the contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.
V.Accounting Changes
Upcoming Governmental Accounting Standards Implementation
The City is currently analyzing its accounting practices to determine the potential impact on the
financial statements for the following GASB statements:
GASB Statement No. 87 –“Leases,”effective for reporting periods beginning after June
30, 2021.
GASB Statement No. 91 –“Conduit Debt Obligations,”effective for reporting period
beginning after December 15, 2023.
GASB Statement No. 92 –“Omnibus 202,” effective for reporting period beginning after
June 30, 2022.
64
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 2 –Summary of Significant Accounting Policies (Continued)
V.Accounting Changes (Continued)
GASB Statement No. 94 –“Public-Private and Public-Public partnerships and Availability
Payment Arrangements,” effective for reporting period beginning after June 30, 2023.
GASB Statement No. 96 –“Subscription-Based Information Te chnology Arrangements,”
effective for reporting period beginning after June 30, 2023.
GASB Statement No. 97 –“Certain Component Unit Criteria, and Accounting and
Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation
Plans—an amendment of GASB Statements No. 14 and No. 84, and a supersession of
GASB Statement No. 32,”effective for reporting period beginning after June 30, 2022.
GASB Statement No. 98 –“The Annual Comprehensive Financial Report,”effective for
fiscal years ending after December 15, 2021.
Note 3 –Cash and Investments
Cash and investments are classified in the accompanying financial statements as follows:
Fiduc iary Funds
Governm ental Bus iness-type Statem ent of
Ac tivities Ac tivities Net Position Total
Current as sets :
Cash and inves tments 82,428,758$ 47,540,633$ 4,878,445$ 134,847,836$
Restricted c as h and inves tm ents with fis cal agent 17 146,278 1,974,851 2,121,146
Total cash and inv estments 82,428,775$ 47,686,911$ 6,853,296$ 136,968,982$
Governm ent-w ide Statem ent of Pos ition
Cash and investments at June 30, 2021, consisted of the following:
Cash on hand 3,655$
Deposits with financial institutions 3,410,146
Restricted cash 2,121,146
Investments 131,434,035
Total cash and investments 136,968,982$
At June 30, 2021, cash and investments, excluding restricted cash and investments held by fiscal
agent, are reported at fair value based on quoted market prices.The following table represents the fair
value measurements of investments recognized in the accompanying Statement of Net Position
measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair
value measurements fall at June 30, 2021:
65
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 3 –Cash and Investments (Continued)
Percentage
Fair of Measurement
Value Investments Input
Investments:
Local Agency Investment Fund (LAIF)37,937,739$ 28.86%Uncategorized
California Asset Management Program 1,070,730 0.81%Uncategorized
Money Market Mutual Funds 19,380,190 14.75%Uncategorized
Negotiable Certificates of Deposit 13,796,218 10.50%Uncategorized
U.S. Treasury Securities 19,294,310 14.68%Level 2
U.S. Government Sponsored Enterprise Securities 35,741,460 27.19%Level 2
San Diego County Investment Pool 4,213,388 3.21%Uncategorized
Total Investments 131,434,035$
Investment Type
The City’s level two investments are valued based on the level two input of bond valued by a pricing
service that uses matrix pricing.
A.Demand Deposits
The carrying amounts of the City’s demand deposits were $3,410,146 at June 30,2021. Bank
balances were $5,038,149 at that date, the total amount of which was collateralized or insured with
securities held by the pledging financial institutions in the City’s name as discussed below.
The California Government Code requires California banks and savings and loan associations to
secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral
pledged in this manner shall have the effect of perfecting a security interest in such collateral
superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in
the City's name.
The market value of pledged securities must equal at least 110 percent of the City's cash deposits.
California law also allows institutions to secure City’s deposits by pledging first trust deed mortgage
notes having a value of 150 percent of the City’s total cash deposits. The City may waive collateral
requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit
Insurance Corporation (“FDIC”). The City has not waived the collateralization requirements.
B.Investments Authorized by the California Government Code and the City’s Adopted
Investment Policy
The table below identifies the investment types that are authorized for the City by the California
Government Code (or the City’s investment policy, where more restrictive). The table also identifies
certain provisions of the California Government Code (or the City’s investment policy, where more
restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does
not address investments of debt proceeds held by bond trustees that are governed by the
provisions of debt agreements of the City, rather than the general provisions of the California
Government Code or the City’s investment policy.
66
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 3 –Cash and Investments (Continued)
B.Investments Authorized by the California Government Code and the City’s Adopted
Investment Policy (Continued)
Authorized Maximum Maximum
Authorized by Investment Maximum Percentage of Investment in
Investment Type Policy Maturity Portfolio One Issuer
Repurchased Agreements-Overnight "Sweep"Yes 1 year 20%No Limit
Local Agency Investment Fund (LAIF)Yes N/A 30%State Law Maximum
Other Governmental Managed Investment Pools Yes N/A 30%10% per pool
Money Market Mutual Funds Yes N/A 20%10%
Certificates of Deposit Yes 5 years 10%5%
Negotiable Certificates of Deposit Yes 5 years 10%5%
Bankers' Acceptances Yes 180 days 10%5%
U.S. Treasury Bills, Notes and Bonds Yes 5 years 50%No Limit
U.S. Government Sponsored Enterprises Yes 5 years 60%25%
Commercial Paper Yes 270 days 25%5%
Commercial Medium-Term Notes Yes 5 years 15%5%
Guaranteed Investment Contracts Yes N/A 10%5%
Demand Deposits - Non-Interest Bearing Yes N/A 2%2%
Demand Deposits - Interest Bearing Yes N/A 20%10%
Asset Backed Securities Yes N/A 10%5%
Supranationals Yes 5 years 20%15%
C.Investments Authorized by Debt Agreements
The investment of the proceeds from debt issuances, held by a third-party trustee, is governed by
the provisions of the specific debt agreement rather than by the Government Code or the
Investment Policy. The investment types that are authorized and currently utilized by the City are
Guaranteed Investment Contracts and Money Market Mutual Funds.
D.Risk Disclosures
Disclosures Related to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Generally, the longer the maturity,the greater the sensitivity its fair value is to
changes in market interest rates. One of the ways that the City manages its exposure to interest
rate risk is by purchasing a combination of shorter-term and longer-term investments and by timing
cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity
evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City's investments to interest rate risk is
provided in the table that shows the distribution by maturity is as follows:
67
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 3 –Cash and Investments (Continued)
D.Risk Disclosures (Continued)
Less than 12 to 36 36-60
Total 12 Months Months Months
Investments:
Local Agency Investment Fund (LAIF)37,937,739$ 37,937,739$ -$ -$
California Asset Management Program 1,070,730 1,070,730 - -
Money Market Mutual Funds 19,380,190 19,380,190 - -
Negotiable Certificates of Deposit 13,796,218 745,531 7,728,492 5,322,195
U.S. Treasury Securities 19,294,310 6,020,020 13,274,290 -
U.S. Government Sponsored Enterprise Securities 35,741,460 18,166,020 17,575,440 -
San Diego County Investment Pool 4,213,388 4,213,388 - -
Total Investments 131,434,035$87,533,618$ 38,578,222$ 5,322,195$
Investment Type
Remaining Maturity (in Months)
Disclosures Related to Credit Risk
Credit risk is defined as the risk that an issuer of an investment will not fulfill its obligation to repay
the holder at the maturity date. This is generally measured by the assignment of a rating by a
nationally recognized statistical organization. However, some issuers do not seek a credit rating.
For instance, the California Local Agency Investment Fund (LAIF) has not sought or received a
credit rating. In these cases, the purchaser is solely responsible for performing their own due
diligence before purchasing an investment or participating in an external investment pool.
Certificates of deposit of $250,000 or less are fully insured by the Federal Deposit Insurance
Corporation (FDIC), and therefore, do not seek a credit rating.
The next table presents the minimum rating required by (where applicable) the Government Code,
the Investment Policy, or the debt agreements, and the actual rating as of year-end for each
investment type.
Minimum
Fair Legal AAA/
Value Rating AA+Not Rated
Investments:
Local Agency Investment Fund (LAIF)37,937,739$ N/A -$ 37,937,739$
California Asset Management Program 1,070,730 N/A 1,070,730 -
Money Market Mutual Funds 19,380,190 AAA 19,380,190 -
Negotiable Certificates of Deposit 13,796,218 N/A - 13,796,218
U.S. Treasury Securities*19,294,310 N/A - -
U.S. Government Sponsored Enterprise Securities 35,741,460 N/A 35,741,460 -
San Diego County Investment Pool 4,213,388 N/A 4,213,388 -
Total Investments 131,434,035$60,405,768$ 51,733,957$
*Exempt from rating disclosure
Rating as of Year End
Investment Type
68
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 3 –Cash and Investments (Continued)
D.Risk Disclosures (Continued)
GASB Statement No. 40 requires disclosure by amount and issuer of investments in any one issuer
that represent five percent or more of total investments. Investments in any one issuer (other than
U.S. Treasury securities,mutual funds,and external investment pools) that represents five percent
or more of the City's total investments are as follows:
Is suer In ves tment Type Fair Value
Federal Farm Credit Bank U.S Gover nm ent Spons ored
Enterpris e Sec urities 11,300,020$
Federal Hom e Loan Bank U.S Gover nm ent Spons ored
Enterpris e Sec urities 10,076,704
Disclosures Relating to Custodial Credit Risk
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty
(e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its
investment or collateral securities that are in the possession of another party. The Government
Code and the City's investment policy do not contain legal or policy requirements that would limit
the exposure to custodial credit risk for investments.
E.Investment in State Investment Pool –Local Agency Investment Fund
The City is a participant in the Local Agency Investment Fund (LAIF) which is regulated by
California Government Code Section 16429 under the oversight of the Treasurer of the State of
California. The fair value of the City’s investment in this pool is reported in the accompanying
financial statements at amounts based upon the City’s pro-rata share of the fair value provided by
LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance
available for withdrawal is based on the accounting records maintained by LAIF, which are recorded
on an amortized cost basis. There are no restrictions on participant withdrawals.
F.Investment in California Asset Management Program (CAMP)
The City is a voluntary participant in CAMP, a California Joint Powers Authority that falls under
California Government Code Section 53601(p), which is directed by a Board of Trustees that is
made up of experienced local government finance directors and treasurers. The Pool is required to
maintain an average maturity of less than 60 days and is rated AAA by Standard & Poor's national
rating agency. There are no restrictions on participant withdrawals.
G.Investment in San Diego County Pooled Investment Fund
The San Diego County Pooled Investment Fund (SDCPIF) is a pooled investment fund program
governed by the County of San Diego Board of Supervisors and administered by the County of San
Diego Treasurer and Tax Collector. Investments in SDCPIF are highly liquid as deposits and
withdrawals can be made at any time without penalty. SDCPIF does not impose a maximum
investment limit.
69
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 3 –Cash and Investments (Continued)
G.Investment in San Diego County Pooled Investment Fund (Continued)
The County of San Diego’s bank deposits are either Federally insured or collateralized in
accordance with the California Government Code. Pool detail is included in the County of San
Diego Annual Comprehensive Financial Report (ACFR). Copies of the ACFR may be obtained
from the County of San Diego Auditor-Controller’s Office –1600 Pacific Coast Highway –San
Diego, CA 92101.
Note 4 –Receivables
At June 30, 2021, receivables consist of the following:
Governmental Busine ss-T yp e
Ac tiv itie s Ac tiv itie s Total
Ac counts rec eivable 2,678,248$ 2,909,979$ 5,588,227$
Taxes and as sessments rec eivable 440,205 123,646 563,851
Ac crued r evenues 4,501,833 - 4,501,833
Total 7,620,286$ 3,033,625$ 10,653,911$
Note 5 –Investment in Joint Ventures
Investment in joint ventures consists of the following as of June 30, 2021:
Proprietary Fund Investment in Joint Ventures
Cardiff Sanitary Division San Elijo Joint Facilities 36,454,616$
San Dieguito W ater District R.E. Badger Joint Facilities 24,731,437
San Dieguito W ater District R.E. Badger Financing Authority 644,052
25,375,489
Encinitas Sanitary Division Encina Joint Facilities 6,832,369
Total Investment in Joint Ventures 68,662,474$
A.Cardiff Sanitary Division
Investment in San Elijo Joint Powers Authority (SEJPA)
In 1964, Cardiff Sanitary Division (“CSD”) entered into an agreement with Solana Beach Sanitation
District (“Solana Beach”) for the joint ownership,maintenance, operation, and use of a Wastewater
Treatment Plant and Ocean Outfall (collectively, the "Joint Facilities").
70
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 5 –Investment in Joint Ventures (Continued)
A.Cardiff Sanitary Division (Continued)
In 1987, CSD and Solana Beach agreed to establish the San Elijo Joint Powers Authority
(“SEJPA”), a separate legal entity whose function is to manage and operate the Joint Facilities and
to determine the joint and separate obligations of the members concerning the transmission,
treatment, disposal, and reclamation of wastewater within the respective service territories.On June
30, 1988, CSD and Solana Beach each transferred all of their assets related to the Joint Facilities in
exchange for a 50 percent interest in SEJPA. The Ocean Outfall is jointly owned by SEJPA (21
percent interest) and the City of Escondido (79 percent interest).
SEJPA is responsible for the operations and maintenance of the Joint Facilities as well as the
related administration. The operations and maintenance costs are allocated monthly and billed
quarterly, based on the relative volume of flows after taking into account charges to other agencies
that lease certain capacity rights and share in the costs of operations and maintenance. For the
year ended June 30, 2021, CSD's share of those costs was $1,520,097,which is reported as a
component of "facility operations and maintenance" in the accompanying financial statements.
B.San Dieguito Water District
Investment in R.E. Badger Filtration Plant and related Facilities (the "Joint Facilities")
In 1967,SDWD entered into an agreement with Santa Fe Irrigation District (“Santa Fe”) for the joint
ownership, maintenance, operation, and use of a water treatment plant and various facilities for the
storage and delivery of potable water. During the ensuing years, the SDWD and Santa Fe have
added various facilities and improvements, which are owned in different percentages depending on
the type of facility and the agreements in place. The ownership percentages of these Joint Facilities
are described in the next table.
SDW D Santa Fe Facilities
45%55%Filtration Plant
31%69%Filtered W ater Reservoir
39%61%Joint Pipeline
42%58%San Dieguito W ater Reservoir
Santa Fe is responsible for the operations and maintenance of the Joint Facilities as well as the
related administration.The operations and maintenance costs are allocated monthly on the basis
of the water used by each district, and administrative costs are allocated based on an agreed-upon
cost allocation plan. For the year ended June 30, 2021, SDWD's share of those was $2,886,039,
which is shown as "facility operations and maintenance" in the accompanying financial statements.
Investment in R.E. Badger Water Facilities Financing Authority (the "Financing Authority")
In 1999, SDWD and Santa Fe entered into a joint exercise of powers agreement and formed the
Financing Authority to provide financing for the acquisition and construction of capital improvements
related to the Joint Facilities.
71
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 5 –Investment in Joint Ventures (Continued)
B.San Dieguito Water District (Continued)
The Financing Authority subsequently issued revenue bonds for the purpose of funding those
capital improvements. SDWD and Santa Fe are obligated under Installment Purchase Agreements
to repay their proportionate shares of the long-term financing.
The investment in the Financing Authority consists primarily of SDWD's share of the debt reserve
funds held by a fiscal agent and unamortized bond discounts and issuance costs.
C.Encinitas Sanitary Division
Investment in Encina Water Pollution Control Facility (the "Joint Facilities")
ESD is one of six member agencies with an ownership interest in the Joint Facilities. ESD owns
approximately 2.7 percent of the Joint Facilities, after adjusting for the construction and upgrades to
the Joint Facilities, referred to as "Phase V improvements." This ownership percentage affords ESD
treatment capacity rights of approximately 2.0 million gallons/day, which is in excess of current
needs and sufficient to meet all projected future needs. The Encina Wastewater Authority (Encina)
is responsible for the operations and maintenance of the Joint Facilities, as well as the related
administration. The operations, maintenance, and administrative costs are allocated monthly on the
basis of the relative flows of each member agency. For the year ended June 30, 2021, ESD's share
of those costs was $836,972, which is shown as "facility operations and maintenance" in the
accompanying financial statements.
Note 6 –Long-Term Receivables
Long-term receivables consist of loans to developers and loans to employees for the purchase of
computer equipment, a program approved by the City Council to promote more efficient use of
technology. At June 30, 2021, loans receivable is shown in the next table.
Ir is Apartm ents 424,082$
Employee c om puter loans 19,987
Total 444,069$
Iris Apartments
On April 20, 2012, the City entered into a promissory note agreement with Iris Apartments in the
amount of $350,000, secured by a Deed of Trust on the project.The outstanding principal balance due
to the City bears simple interest at a rate of six percent per annum,commencing on the date of fund
disbursement which was May 2012. Under the terms of the agreement, Iris Apartments is obligated to
make annual payments of principal and interest in the amount equal to 50 percent of residual receipts,
as defined in the promissory note agreement. All principal and unpaid interest will be due and payable
on April 20, 2067. The outstanding principal and interest receivable at June 30, 2021 was $424,082.
72
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 7 –Capital Assets
A.Governmental Activities
The summary of changes in governmental activities capital assets for the year ended June 30, 2021
is as follows:
Balance Balance
June 30, 2020 Additions Deletions Transfers June 30, 2021
Capital assets, not being depreciated:
Land 61,862,474$ -$ -$ -$ 61,862,474$
Land easements 2,443,333 - - - 2,443,333
Construction in progress 17,247,553 7,238,853 (284,320) (2,357,280) 21,844,806
Total capital assets, not being depreciated 81,553,360 7,238,853 (284,320) (2,357,280) 86,150,613
Capital assets, being depreciated:
Public facilities 113,825,961 4,376,144 - 881,695 119,083,800
Vehicles, equipment and machinery 11,770,601 1,438,330 (64,722) - 13,144,209
Infrastructure 125,243,023 1,919,029 (210,446) 1,475,585 128,427,191
Total capital assets, being depreciated 250,839,585 7,733,503 (275,168) 2,357,280 260,655,200
Less accumulated depreciation
Public facilities (43,055,836) (3,894,499) - 34,818 (46,915,517)
Vehicles, equipment and machinery (7,468,104) (853,722) 55,966 - (8,265,860)
Infrastructure (57,098,897) (2,651,118) 53,488 (34,818) (59,731,345)
Total accumulated depreciation (107,622,837) (7,399,339) 109,454 - (114,912,722)
Total capital assets being depreciated, net 143,216,748 334,164 (165,714) 2,357,280 145,742,478
Governmental activities capital assets, net 224,770,108$ 7,573,017$ (450,034)$ -$ 231,893,091$
Depreciation expense was charged to the functions/programs of the governmental activities as
follows:
General government 1,579,558$
Public safety 568,264
Public works 2,854,876
Parks and recreation 1,745,650
Internal service funds 650,991
Total depreciation expense 7,399,339$
73
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 7 –Capital Assets (Continued)
B.Business-type Activities
The summary of changes in business-type activities capital assets for the year ended June 30,
2021 is as follows:
Balance Balance
June 30, 2020 Ad ditions De le tions Transfe rs June 30, 2021
Capital asse ts, not be ing de preciat ed:
Land eas em ents 3,450,544$ -$ -$ -$ 3,450,544$
Public works facility right of us e 3,378,700 - - - 3,378,700
Cons truc tion in progress 3,393,153 4,317,071 (31,104) (7,469,326) 209,794
Total capital asse ts, not be ing de preciate d 10,222,397 4,317,071 (31,104) (7,469,326) 7,039,038
Capital asse ts, be ing de pre ciate d:
Struc tures and im provem ents 23,338,725 4,775 - 5,814,779 29,158,279
Collec tion and dis tribution 66,061,956 203,800 (3,939,542)1,654,547 63,980,761
Ma chinery and equipm ent 2,747,580 82,543 - - 2,830,123
Capac ity rights 323,190 - - - 323,190
Total capital asse ts, being de preciate d 92,471,451 291,118 (3,939,542)7,469,326 96,292,353
Le ss accumulate d de pre ciation
Struc tures and im provem ents (7,507,038) (528,250) - - (8,035,288)
Collec tion and dis tribution (35,746,706) (1,089,266) 3,939,542 - (32,896,430)
Ma chinery and equipm ent (2,308,168) (130,423) - - (2,438,591)
Capac ity rights (157,825) (6,463) - - (164,288)
Total accumulated de pre ciation (45,719,737) (1,754,402) 3,939,542 - (43,534,597)
Total capital asse ts be ing de pre ciate d, ne t 46,751,714 (1,463,284) - 7,469,326 52,757,756
Busine ss-type activ ities capital asse ts, ne t 56,974,111$ 2,853,787$ (31,104)$ -$ 59,796,794$
Depreciation expense was charged to the functions/programs of the business-type activities as
follows:
Cardiff Sanitary Division 454,813$
San Dieguito W ater District 757,346
Encinitas Sanitary Division 441,705
Non-major Affordable Housing 100,538
Total 1,754,402$
74
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 8 –Long-Term Obligations
A summary of changes in long-term liabilities for the year ended June 30, 2021 is as follows:
Balance Balance Due Within Due in More
July 1, 2020 Ad ditions Deletions June 30, 2021 One Year Than One Year
Governmental Activities:
Capital Leases:
2008 Civic Center Roof Replacement 516,789$ -$(166,004)$ 350,785$ 172,186$ 178,599$
2017 Fire Apparatus 373,264 -(89,867) 283,397 92,129 191,268
2020 Fire Apparatus -737,623 (48,620) 689,003 99,033 589,970
Bonded Debt:
2013 Community Park Bonds 5,560,000 - (360,000)5,200,000 365,000 4,835,000
add: original issue premium 70,080 -(8,760)61,320 -61,320
2014 Moonlight Beach Tower (Series A) 2,760,000 -(70,000)2,690,000 75,000 2,615,000
less: original issue discount (25,929) -1,037 (24,892) -(24,892)
2014 Pacific View (Series B)9,345,000 - (215,000)9,130,000 225,000 8,905,000
less: original issue discount (130,167) -5,207 (124,960) -(124,960)
2015 Library Refunding Bonds 13,575,000 - (580,000)12,995,000 610,000 12,385,000
add: original issue premium 625,125 -(36,772) 588,353 -588,353
2017 Park Refunding Bonds 10,050,000 - (715,000)9,335,000 750,000 8,585,000
add: original issue premium 1,068,795 -(97,164) 971,631 -971,631
Claims payable 3,243,070 2,464,599 (1,669,242)4,038,427 2,828,027 1,210,400
Compensated absences 2,509,711 5,014,065 (4,680,389)2,843,387 1,233,452 1,609,935
To tal governmental activities 49,540,738 8,216,287 (8,730,574)49,026,451 6,449,827 42,576,624
Business-type Activities:
2011 CSD Note Payable to SEJPA 60,000 -(60,000)---
add: original issue premium 34,401 -(34,401)---
2017 CSD Note Payable to SEJPA 10,840,000 - (225,000)10,615,000 230,000 10,385,000
add: original issue premium 948,024 -(35,112) 912,912 -912,912
2007 SDW D Note Payable Badger 2,855,000 - (525,000)2,330,000 545,000 1,785,000
2004 EHA Housing Note Payable 1,008,914 -(84,115) 924,799 85,492 839,307
2014 SDW D Water Revenue Bonds 2,840,000 - (665,000)2,175,000 695,000 1,480,000
add: original issue premium 297,487 -(74,372) 223,115 -223,115
Compensated absences (SDW D)157,199 304,933 (269,860)192,272 95,536 96,736
Compensated absences (Affordable
Housing)14,794 7,979 (9,756) 13,017 4,883 8,134
To tal business-type activities 19,055,819 312,912 (1,982,616) 17,386,115 1,655,911 15,730,204
To tal long-term obligations 68,596,557$8,529,199$ (10,713,190)$66,412,566$ 8,105,738$ 58,306,828$
A.Governmental Activities
2008 Civic Center Roof Replacement and Energy Optimization Project
On February 27, 2008, the City entered into a long-term lease arrangement with a financial
institution to finance $2,100,000 of the 2008 improvements to the Encinitas Civic Center. The lease
has a term of fifteen years, an interest rate of 3.69 percent, and semi-annual payments of $91,778.
The project was completed during Fiscal Year 2008-09,and the final payment is due in Fiscal Year
2022-23.The total cost of the project was $3,543,258.
The annual debt service requirements for the lease outstanding at June 30, 2021 are as follows:
Year Ending
June 30 Principal Interest Total
2022 172,186$ 11,370$ 183,556$
2023 178,599 4,957 183,556
Total 350,785$ 16,327$ 367,112$
75
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 8 –Long-Term Obligations (Continued)
A.Governmental Activities (Continued)
2017 Fire Apparatus Lease
The City entered into a long-term lease arrangement in Fiscal Year 2016-17 to finance the
purchase of a 2017 Pierce Arrow XT Pumper Truck for $629,851.The lease has a term of seven
years, an interest rate of 2.50 percent, and annual payments of $98,641.
The annual debt service requirements for the lease outstanding at June 30, 2021 are as follows:
Year Ending
June 30 Principal Interest Total
2022 92,129$ 6,512$ 98,641$
2023 94,446 4,195 98,641
2024 96,822 1,819 98,641
Total 283,397$ 12,526$ 295,923$
2020 Fire Apparatus Lease
The City entered into a long-term lease arrangement in Fiscal Year 2020-2021 to finance the
purchase of a 2020 Pierce Arrow XT Pumper Truck for $737,623.The lease has a term of seven
years, an interest rate of 2.50 percent, and annual payments of $115,310.
The annual debt service requirements for the lease outstanding at June 30, 2021 are as follows:
Capital assets and accumulated depreciation for assets held under capital leases are as follows:
Accumulated Net Capital
Cost Depreciation Assets
Public facilities 3,543,258$ (1,712,575)$ 1,830,683$
Fire apparatus and equipment 1,366,937 (182,553) 1,184,384
Year Ending
June 30 Principal Interest Total
2022 99,033$ 16,278$ 115,311$
2023 101,475 13,836 115,311
2024 103,977 11,334 115,311
2025 106,539 8,772 115,311
2026 109,165 6,146 115,311
2027-2028 168,814 4,154 172,968
Total 689,003$ 60,520$ 749,523$
76
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 8 –Long-Term Obligations (Continued)
A.Governmental Activities (Continued)
2013 Lease Revenue Refunding Bonds (Public Park Construction Project)
On March 20, 2013, the Encinitas Public Financing Authority, a blended component unit of the City,
issued its 2013 Lease Revenue Bonds, Series A (Public Park Construction Project)in the amount of
$7,865,000 to provide funds for the construction of capital improvements to the Encinitas
Community Park. The bonds consist of $7,865,000 of serial bonds, which mature annually through
2033 in installments ranging from $305,000 to $510,000. Interest is due and payable semi-annually
at rates ranging from 2.00 percent to 3.00 percent. The bonds were issued at a premium, which is
being amortized over the life of the bonds on a straight-line basis in the government-wide financial
statements. The bonds are payable from lease payments to be made by the City of Encinitas for the
right to use certain real property and related improvements pursuant to a lease agreement dated
March 1, 2013 between the City as lessee and the Authority as lessor. The bonds are secured by
pledged revenue consisting of all lease revenue paid by the City of Encinitas in addition to any
assets held in trust for the purpose of paying the lease payments. The Authority has a leasehold on
the property until all the terms of the lease agreement are fulfilled.The refunding bonds are payable
from any source of legally available funds of the City.The bonds are subject to federal arbitrage
requirements.
The annual debt service requirements for the 2013 Lease Revenue Refunding Bonds outstanding
at June 30, 2021 are as follows:
Year Ending
June 30 Principal Interest Total
2022 365,000$ 148,206$ 513,206$
2023 375,000 138,722 513,722
2024 390,000 127,950 517,950
2025 400,000 116,100 516,100
2026 410,000 103,950 513,950
2027-2031 2,255,000 324,075 2,579,075
2032-2036 1,005,000 30,375 1,035,375
Total 5,200,000$ 989,378$ 6,189,378$
The bonds maturing on or after October 1, 2023 are subject to optional redemption on any date on
or after October 1, 2022, without a premium.
77
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 8 –Long-Term Obligations (Continued)
A.Governmental Activities (Continued)
2014 Lease Revenue Bonds (Pacific View Property and Moonlight Beach Lifeguard Tower)
On November 26, 2014, the Encinitas Public Financing Authority (on behalf of the City of Encinitas)
issued its 2014 Lease Revenue Bonds, Series A tax-exempt (Moonlight Beach Lifeguard Tower)
and Series B taxable (Pacific View Property) in the amounts of $3,095,000 and $10,365,000,
respectively, to provide funds for the purpose of improving the Moonlight Beach Lifeguard Tower
and financing the acquisition of a property known as the Pacific View Property. The bonds consist
of $3,350,000 of serial bonds and $10,110,000 of term bonds. The serial bonds mature annually
through 2030 in installments ranging from $65,000 to $245,000. The term bonds mature through
2045 and are subject to mandatory sinking requirements. Interest is due and payable semi-annually
at rates ranging from 2.00 percent to 3.50 percent. The bonds were issued at a discount, which is
being amortized over the life of the bonds on a straight-line basis in the government-wide financial
statements.The bonds are payable from lease payments to be made by the City of Encinitas for the
right to use certain real property and related improvements pursuant to a lease agreement dated
November 1, 2014 between the City as lessee and the Authority as lessor. The bonds are secured
by pledged revenue consisting of all lease revenue paid by the City of Encinitas in addition to any
assets held in trust for the purpose of paying the lease payments.The Authority has a leasehold on
the property until all the terms of the lease agreement are fulfilled. The refunding bonds are payable
from any source of legally available funds of the City.The bonds are subject to federal arbitrage
requirements.
The annual debt service requirements for the 2014 Lease Revenue Bonds, Series A Moonlight
Beach Lifeguard Tower bonds outstanding at June 30,2021 are as follows:
Year Ending
June 30 Principal Interest Total
2022 75,000$ 92,831$ 167,831$
2023 75,000 89,831 164,831
2024 80,000 86,731 166,731
2025 85,000 84,069 169,069
2026 85,000 81,944 166,944
2027-2031 470,000 370,491 840,491
2032-2036 550,000 285,488 835,488
2037-2041 650,000 177,756 827,756
2042-2046 620,000 47,813 667,813
Total 2,690,000$ 1,316,954$ 4,006,954$
78
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 8 –Long-Term Obligations (Continued)
A.Governmental Activities (Continued)
2014 Lease Revenue Bonds (Pacific View Property and Moonlight Beach Lifeguard Tower)
(Continued)
The annual debt service requirements for the 2014 Lease Revenue Bonds, Series B Pacific View
Property bonds outstanding at June 30, 2021 are as follows:
Year Ending
June 30 Principal Interest Total
2022 225,000$ 420,225$ 645,225$
2023 230,000 413,113 643,113
2024 240,000 405,475 645,475
2025 245,000 397,288 642,288
2026 255,000 387,741 642,741
2027-2031 1,450,000 1,766,841 3,216,841
2032-2036 1,820,000 1,395,188 3,215,188
2037-2041 2,330,000 887,000 3,217,000
2042-2046 2,335,000 240,875 2,575,875
Total 9,130,000$ 6,313,746$ 15,443,746$
2015 Library Refunding Bonds
On September 1,2015, the Encinitas Public Financing Authority issued $15,645,000 of 2015 Lease
Revenue Refunding Bonds to defease and refund on a current basis, all of the outstanding 2006
Library Bonds which were originally used to finance capital projects that included the construction of
the Encinitas Library and the Encinitas Community Park, in addition to rehabilitating three fire
stations and the public works facility. The bonds consist of serial bonds maturing from 2016 through
2036 in annual installments of $480,000 to $1,025,000. Interest is due and payable semi-annually
at rates ranging from 2.5 percent to 5.0 percent. Annual debt service is approximately $1,065,000
through 2036.The bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2015 Library Refunding Bonds outstanding at June
30,2021 are presented below.
79
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 8 –Long-Term Obligations (Continued)
A.Governmental Activities (Continued)
Year Ending
June 30 Principal Interest Total
2022 610,000$ 446,581$ 1,056,581$
2023 640,000 415,331 1,055,331
2024 675,000 382,456 1,057,456
2025 700,000 351,581 1,051,581
2026 730,000 322,981 1,052,981
2027-2031 3,980,000 1,267,481 5,247,481
2032-2036 4,635,000 594,131 5,229,131
2037 1,025,000 18,578 1,043,578
Total 12,995,000$3,799,120$ 16,794,120$
2017 Park Refunding Bonds
On February 7, 2017, the Encinitas Public Financing Authority issued $11,955,000 of 2017 Lease
Revenue Refunding Bonds to defease and refund on a current basis, all of the outstanding 2010
Park Bonds which were issued for the purpose of refinancing its 2001 Lease Revenue Bonds,
Series A. The refunded 2001 Lease Revenue Bonds, Series A were used to finance the acquisition
of real property (Hall Property) now known as the Encinitas Community Park. The bonds consist of
serial bonds maturing from 2018 through 2031 in annual installments of $580,000 to $1,110,000
and term bonds maturing April 1, 2030 in the amount of $2,125,000. Interest is due and payable
semi-annually at rates ranging from 3.0 percent to 5.0 percent. Annual debt service is
approximately $1,140,000 through 2031.The bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2017 Park Refunding Bonds outstanding at June 30,
2021 are as follows:
Ye ar Ending
June 30 Princ ipal In teres t Total
2022 750,000$ 392,000$ 1,142,000$
2023 785,000 354,500 1,139,500
2024 825,000 315,250 1,140,250
2025 870,000 274,000 1,144,000
2026 910,000 230,500 1,140,500
2027-2031 5,195,000 518,300 5,713,300
Total 9,335,000$ 2,084,550$ 11,419,550$
80
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 8 –Long-Term Obligations (Continued)
B.Business-Type Activities
2011 CSD Note Payable to San Elijo Joint Powers Authority (SEJPA)
On December 1, 2011, the City, on behalf of its members (the Cardiff Sanitary Division and the City
of Solana Beach) refinanced all of its outstanding debt, including its 2003 refunding revenue bonds
and a loan from the State of California. Information on the bond issuance itself is available through
the SEJPA administrative offices. CSD is responsible, via a Third Amended and Restated Loan
Agreement, for the repayment of $4,341,362 of the total borrowing amount of $9,235,000 (or
approximately 47 percent.)The average rate on the borrowing is approximately 2.0 percent. The
bonds were issued at a premium, which is being amortized over the life of the bonds on a straight-
line basis. The issue also resulted in deferred refunding costs, which are also being amortized over
the life of the bonds on a straight-line basis.
During the year ended June 30, 2021, the note was paid off.
2017 CSD Note Payable to San Elijo Joint Powers Authority (SEJPA)
On July 6, 2017 SEJPA, on behalf of its members (the Cardiff Sanitary Division and the City of
Solana Beach)issued 2017 Revenue Bonds (Clean Water Projects) for the purpose of funding
facilities and improvements as part of SEJPA’s capital improvement plan and certain costs of
issuance. The 2017 revenue bonds are not the obligation of the City of Encinitas nor its component
unit, the CSD. The City of Encinitas entered into a Series 2017 Loan Agreement dated June 1,
2017 as a successor to the CSD to assist in the financing of the CSD’s respective share of the
Series 2017 Revenue Bonds. CSD is responsible for the repayment of the loan in the amount of
$11,057,500 of the total borrowing amount of $22,115,000 (50 percent).Annual debt service is
approximately $670,000 from 2020 through 2047. The average rate on the borrowing is
approximately 2.5 percent. The bonds were issued at a premium, which is being amortized over the
life of the bonds on a straight-line basis.
Encinitas has pledged its system revenues to pay for this outstanding obligation. System revenues
are defined as gross revenues less operations and maintenance costs that are related to the
collection,treatment, reclamation,recycling, and disposal of wastewater.Encinitas has covenanted
to collect its system revenues which after allowances for contingencies and error in the estimates,
shall produce gross revenues sufficient in each fiscal year to provide system revenues equal to at
least 1.3 times the annual debt service. Total principal and interest remaining to be paid on the
2017 Note Payable as of June 30, 2021 is $17,383,960.During the year ended June 30, 2021,
interest paid on the 2017 Note Payable was $444,863 and net revenue was $2,300,405, or 343
percent of annual debt service. Management of CSD believes it is in compliance with these
covenants for Fiscal Year 2020-21.
81
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 8 –Long-Term Obligations (Continued)
B.Business-Type Activities (Continued)
2017 CSD Note Payable to San Elijo Joint Powers Authority (SEJPA)(Continued)
The annual debt service requirements for the 2017 CSD Note Payable to SEJPA outstanding at
June 30, 2021 are as follows:
2007 SDWD Note Payable to R.E. Badger Water Facilities Financing Authority (WFFA)
On November 20,2007, the WFFA, on behalf of its members (the Santa Fe Irrigation District and
the San Dieguito Water District) issued $20,685,000 of 2007 Water Revenue Refunding Bonds
while concurrently redeeming all of its outstanding 1999 Water Revenue Bonds. Information on the
bond issuance itself is available through the WFFA administrative offices.SDWD is responsible, via
an Amended and Restated Loan Agreement, for the repayment of $7,705,000 of the total
borrowing. Principal is due and payable annually in amounts ranging from $335,000 to $620,000.
Interest is due and payable semi-annually at rates ranging from 3.5 percent to 4.5 percent.Annual
debt service is approximately $635,000 through 2025.
The annual debt service requirements for the 2007 SDWD Note Payable to R.E. Badger Water
Facilities Financing Authority outstanding at June 30, 2021 are as follows:
Year Ending
June 30 Principal Interest Total
2022 545,000$ 89,396$ 634,396$
2023 570,000 66,043 636,043
2024 595,000 40,915 635,915
2025 620,000 13,950 633,950
Total 2,330,000$ 210,304$ 2,540,304$
Year Ending
June 30 Principal Interest Total
2022 230,000$ 438,113$ 668,113$
2023 237,500 431,213 668,713
2024 245,000 424,088 669,088
2025 255,000 414,288 669,288
2026 267,500 401,538 669,038
2027-2031 1,550,000 1,793,313 3,343,313
2032-2036 1,955,000 1,388,938 3,343,938
2037-2041 2,370,000 970,769 3,340,769
2042-2046 2,862,500 481,000 3,343,500
2047 642,500 25,700 668,200
Total 10,615,000$6,768,960$ 17,383,960$
82
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 8 –Long-Term Obligations (Continued)
B.Business-Type Activities (Continued)
2014 SDWD Water Revenue Refunding Bonds
On September 18,2014,SDWD issued $5,870,000 of Water Revenue Refunding Bonds, Series
2014,to defease and refund on a current basis, all of the outstanding 2004 Water Revenue
Refunding Bonds. The bonds consist of serial bonds maturing from 2016 through 2024 in annual
installments of $570,000 to $755,000. Interest is due and payable semi-annually at rates ranging
from 3.0 percent to 4.0 percent. Annual debt service is approximately $780,000 through 2024. The
bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2014 SDWD Water Refunding Bonds outstanding at
June 30, 2021 are as follows:
Year Ending
June 30 Principal Interest Total
2022 695,000$ 73,100$ 768,100$
2023 725,000 44,700 769,700
2024 755,000 15,100 770,100
Total 2,175,000$ 132,900$ 2,307,900$
Pledged Revenues
SDWD has pledged its net revenues to pay the debt service on these two obligations. Net revenues
are defined as gross revenues less operations and maintenance costs, excluding depreciation,
amortization and other non-cash type charges. Total principal and interest outstanding of the debt
as of June 30, 2021, is $4,848,204. During the year ended June 30, 2021 principal and interest paid
was $1,401,766 and net revenue was $4,538,392, or 324 percent of annual debt service. SDWD
has covenanted to budget for net revenues each fiscal year of at least 115 percent of combined
annual debt service. SDWD’s management believes it is in compliance with these covenants for
Fiscal Year 2020-21.
2004 Encinitas Housing Authority (EHA)Note Payable
In 2004, the EHA secured a note payable with a financial institution of $1,905,338 to partially fund
the acquisition of 16 affordable housing units. The note is secured only by the rental income
generated by the housing units. Principal and interest are due and payable monthly. Annual
principal installments range from $52,417 in 2014 to $98,938 in 2031. The note bears interest at 90
percent of the ten-year US Treasury note, adjustable every six years. The EHA is solely responsible
for repayment of this note.
83
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 8 –Long-Term Obligations (Continued)
B.Business-Type Activities (Continued)
The annual debt service requirements for the 2004 Encinitas Housing Authority Note Payable
outstanding at June 30, 2021 are as follows:
Year Ending
June 30 Principal Interest Total
2022 85,492$ 14,388$ 99,880$
2023 86,891 12,989 99,880
2024 88,282 11,598 99,880
2025 89,757 10,122 99,879
2026 91,226 8,653 99,879
2027-2031 479,001 20,396 499,397
2032 4,150 5 4,155
Total 924,799$ 78,151$ 1,002,950$
Note 9 –Interfund Receivables, Payable and Transfers
A.Due To and From Other Funds
Individual interfund receivables and payables at June 30, 2021 were as follows:
Due from Due to
Other Funds Other Funds
Governm ental Funds :
Gener al Fund 549,419$ -$
Capital Improvem ents Capital P rojec ts Fund 8,347,308 -
In fras truc ture Improvem ents Spec ial R evenue Fund 8,601,055
No n-m ajor Governm ental Funds - 209,252
Enterpris e Funds :
No n-m ajor Affordable Hous ing Enterpris e Fund - 80,009
In ternal S ervic e Funds - 6,411
Total 8,896,727$ 8,896,727$
The amounts due to the General Fund are all short-term borrowings in anticipation of grant revenue
not yet received or for debt service payments.
The amounts due to the Capital Improvements Capital Projects fund represent grant revenues due
from other funds for capital projects.
84
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 9 –Interfund Receivables, Payable and Transfers (Continued)
B.Transfers In and Out
Transfers in and out between funds for the year ended June 30, 2021 were as follows:
Transfers In Transfers Out
General Fund Infrastructure Improvements 1,115,150$
General Fund Non-Major Governmental Funds 50,405
General Fund Internal Service Funds 1,000,000
General Fund Capital Projects Fund 5,217,743
7,383,298
Infrastructure Improvements Capital Projects Fund 3,872,276
Capital Projects Fund Infrastructure Improvements 5,155,845
Capital Projects Fund Non-Major Governmental Funds 3,489,908
Capital Projects Fund Non-Major Proprietary Fund 18,077
Capital Projects Fund General Fund 16,138,251
24,802,081
Non-Major Governmental Funds General Fund 4,025,267
Non-Major Governmental Funds Capital Projects Fund 439,294
Non-Major Governmental Funds Infrastructure Improvements 564
4,465,125
Internal Service Funds Internal Service Funds 132,000
Internal Service Funds Infrastructure Improvements 2,448
Internal Service Funds General Fund 1,720,768
1,855,216
Major Proprietary Fund Infrastructure Improvements 8,759
Total 42,386,755$
Transfers into the General Fund consist of funds from the State Gasoline Tax, Development
Impact Fees and a special subsidy for COVID19 personnel related cost from the Federal CARES
Act.The City accounts for all street maintenance expenditures in the Streets Division budget unit
within the General Fund and transfers all State Gasoline Tax operating revenues from the
Infrastructure Improvements Special Revenue Fund to the General Fund.The City's Development
Impact Fee Funds transfer funds to the General Fund for qualified costs incurred, or to be
incurred in the future years,by the General Fund for the construction of public facilities. The
transfer into the General Fund also include a return of the Opportunity Fund which was originally
funded for housing, land and the development of open space.
Transfers into the Capital Improvements Capital Projects Fund represent funds from other
governmental funds for capital expenditures. All capital projects are executed and expended
through the Capital Improvements Capital Projects Fund.
85
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 9 –Interfund Receivables, Payable and Transfers (Continued)
B.Transfers In and Out (Continued)
Transfers into the non-major governmental funds represent General Fund subsidies for the Senior
Nutrition Program, the Community Development Block Grant (CDBG), the Section 8 Housing
Program, the Home Program, and the Wiro Park Landscape and Lighting District. In 1998, the
Council increased the Transient Occupancy Tax (TOT)from eight percent to ten percent.
The additional two percent of TOT revenue increase is transferred to the Coastal Zone
Management fund for beach and sand replenishment and stabilization projects. The transfers into
the non-major governmental funds also include transfers to the City’s Debt Service Fund and the
Encinitas Public Financing Authority Debt Service Fund to pay for the City’s various debt service
obligations.
Transfers into the Internal Service Funds represent the City’s annual contribution from the
General Fund to the Self Insurance (Risk Management) Fund. The contribution is not mandated
and is established by the City Council during the annual budget process.In addition, the General
Fund also contributes toward vehicle replacement funds annually.
86
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 10 –Fund Balance and Net Position Classifications
The City classifies fund balances, as shown on the Balance Sheet -Governmental Funds as of
June 30, 2021 as follows:
Capital In fras truc ture
Im provem ents Im provem ents Other
General Capital Projec ts Spec ial Revenue Governm ental
Fund Fund Fund Funds Totals
Nons pendable:
In ventory and prepaid item s 717,128$ -$ -$ -$ 717,128$
Long-term receivable 19,987 - - - 19,987
Total nons pendable 737,115 - - - 737,115
Restricted:
Capital projec ts - 18,226,785 - - 18,226,785
Street m aintenanc e and im provem ents - - - 1,756,326 1,756,326
Cable Franc his e PEG funds - - - 274,099 274,099
Environm ental initiatives - - - 456,365 456,365
Af fordable hous ing - - - 144,116 144,116
Donations - - - 128,045 128,045
Parkland and open s pac e - - - 766,273 766,273
Traffic m itigation - - - 758,248 758,248
Flood c ontrol - - - 258,987 258,987
Flexible s aving ac count 172,705 - - - 172,705
Lighting and lands caping
as sessments - - - 3,300,296 3,300,296
Law enforc em ent - - - 365,313 365,313
Debt ser vic e 3 - - 14 17
Total res tric ted 172,708 18,226,785 - 8,208,082 26,607,575
Committed:
Capital projec ts - 19,920,832 - - 19,920,832
Budget s tabiliz ation 1,700,925 - - - 1,700,925
Operating res erve 15,297,366 - - - 15,297,366
Total c om mitted 16,998,291 19,920,832 - - 36,919,123
Unas signed 9,255,171 - (7,140,370) - 2,114,801
Total Fund Balanc es 27,163,285$38,147,617$ (7,140,370)$ 8,208,082$ 66,378,614$
Ma jor Funds
Categorization of Reserves under Adopted City Policies
All unassigned amounts in the City's General Fund are considered reserves under internal City policies.
The City maintains three separate and distinct reserves.
87
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 10 –Fund Balance and Net Position Classifications (Continued)
Categorization of Reserves under Adopted City Policies (Continued)
1)Contingency Reserve –represents funds that are committed for use only in exceptional
circumstances such as catastrophic events that could negatively impact the financial condition
of the City.Funding represents 20 percent of the following year’s operating expenditures,and
no drawdowns have ever been executed from this reserve. City Policy requires a 4/5 vote of the
City Council to authorize draws on this reserve. The amount of the contingency reserve as of
June 30, 2021 was $15,297,366.
2)Budget Stabilization Reserve –was established in 2007 to help mitigate potential fluctuations
in operating revenues,or to fund unanticipated operating expenditures. Funding levels are
mandated at two to five percent of the following year’s budgeted operating revenues. Any
changes to the level of funding for this reserve also require a 4/5 vote of the City Council.In
practice,this reserve has been funded within the established range since 2007, and changes
are made during the annual budget process. The amount of the budget stabilization reserve
committed as of June 30, 2021 was $1,700,925.
3)General Undesignated Reserve –this reserve represents any remaining unassigned fund
balance after funding levels have been established for (1) and (2) above.These funds may be
allocated in any manner the City Council designates. The amount of the general undesignated
reserve as of June 30,2021 was $9,255,171.
Note 11 –Risk Management
A.City of Encinitas -Risk Management and Insurance Programs
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of
assets;errors and omissions;injuries to employees; and natural disasters. The City has a proactive
in-house risk management program, which combines risk mitigation initiatives with a self-insurance
program and excess coverage policies with outside providers.
The City maintains a Self-Insurance Fund to finance and account for its self-insured risks of loss.
The Risk Management fund is accounted for as an internal service fund. It is supported by interfund
charges for workers’compensation coverage, unemployment insurance,and contributions from
CSD, ESD and the City.The Risk Management fund strives to maintain an adequate net position,
over time, to cover all known and reported claims, as well as an adequate reserve for incurred but
not reported (IBNR) claims.
The City is self-insured for liability claims and losses up to $250,000 per occurrence, and for
workers’compensation claims and losses up to $350,000 per occurrence.
The City is a member of the California State Association of Counties, Excess Insurance Authority
(CSAC EIA), a joint risk sharing pool which covers liability claims or losses above the City’s
$250,000 self-insured level. CSAC EIA is a separate legal entity formed by the participating
municipalities and counties to provide pooled excess liability insurance coverage to its members.
88
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 11 –Risk Management (Continued)
A.City of Encinitas -Risk Management and Insurance Programs (Continued)
The members do not hold any ownership stake in CSAC EIA and have no claims to revenue or
assets upon withdrawal.
CSAC EIA is governed by a Board of Directors,who determines policy and necessary funding
levels, including retroactive adjustments for over-or under-funding, which is reflected as
adjustments to current year premiums. The City is covered for losses above $250,000 with excess
coverage through CSAC EIA and excess carriers up to $50 million dollars. All members jointly
share risk liability exposures in excess of each member’s self-insured retention.
The City is a member of the Local Agency Workers Compensation Excess (LAWCX), a California
Joint Powers Insurance Authority. LAWCX provides coverage for claims between $350,000 and
$5,000,000.Excess workers’compensation coverage between $5,000,000 and statutory limits is
provided through contract reinsurance. City departments contribute premiums to the Self-Insurance
Fund based on annual rates set for each work class.
Changes in the balances of claims payable for liability and workers’compensation during the past
two years are as follows:
Ye ar Ended Ye ar Ended
June 30, 2021 June 30, 2020
Claim s payable, beginning of year 3,243,070$ 2,652,742$
Estim ated inc urred c laim s, net 2,464,599 1,812,951
Claim s paym ents or c los ures (1,669,242) (1,222,623)
Claim s payable, end of year 4,038,427$ 3,243,070$
A.San Dieguito Water District (SDWD) -Risk Management and Insurance Programs
Risk management programs and support for SDWD are provided by the City of Encinitas Risk
Management Department, for which SDWD pays the City an annual fee (charge for those services).
SDWD paid the City $91,408 for the year ended June 30, 2021.
SDWD is a member of the Association of California Water Agencies -Joint Powers Insurance
Authority (JPIA), which provides coverage for general liability, property and casualty,and workers'
compensation. As of June 30, 2021, in the opinion of the District's management and general
counsel, there were no material claims which would require accrual in the accompanying financial
statements.Management has determined,based on modest self-insurance retention levels and
favorable claims experience,that no self-insurance liabilities were necessary.SDWD has two
outstanding minor claims as of June 30, 2021 and did not pay any claims during the fiscal year.
89
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 12 – Commitments and Contingencies
A. Lawsuits
Claims and lawsuits have been filed against the City in the normal course of conducting City
business. The estimated liability under such Claims is adequately covered by the reserve funds in
the Self-Insurance Fund and by the excess insurance coverage afforded by CSAC and LAWCX
(See Note 11).
B. Grants
Amounts received or owed from federal and state granting agencies are subject to audit and
adjustment by grantor agencies. While no matters of noncompliance were disclosed by the audit of
the financial statements or Single Audit of the Federal grant programs, grantor agencies may
subject grant programs to additional compliance tests, which may result in disallowed costs. In the
opinion of management, future disallowances of current or prior grant expenditures, if any, would
not have a material adverse effect on the financial position of the City.
C. Construction Commitments
As of June 30, 2021, the City had remaining contractual commitments totaling approximately $10.1
million for capital projects related to its governmental and business-type activities. The more
significant capital commitments included approximately $8.0 million for street improvement projects,
approximately $0.3 million for park improvements, $0.2 million in drainage improvements, $0.2
million for CSD and ESD pipeline rehabilitation projects and $1.4 million for CSD pump station
upgrades improvement projects.
Note 13 – California Public Employees’ Retirement System
The information in the following table includes the aggregate total pension related items for the
Miscellaneous and Safety plans of the City and the Miscellaneous plan of SDWD:
Miscellaneous Safety SDWD Total
Net Pension Liabilities 26,278,871$ 27,605,534$ 7,093,742$ 60,978,147$
Deferred Outflow of Resources 5,500,798 6,893,342 1,815,089 14,209,229
Deferred Inflow of Resources 76,598 1,178,307 744,071 1,998,976
Pension Expense 4,548,787 3,934,127 975,950 9,458,864
The City has the following California Public Employees’ Retirement Plans:
1. The Miscellaneous Plan of the City of Encinitas (Miscellaneous Plan)
2. The Safety Plan of the City of Encinitas (Safety Plan)
a. Fire Plan of the City of Encinitas
b. Lifeguard Plan of the City of Encinitas
3. The Miscellaneous Plan of the San Dieguito Water District (SDWD Plan)
90
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 13 –California Public Employees’Retirement System (Continued)
Plan Descriptions
Miscellaneous Plan
The City of Encinitas has entered into separate defined benefit pension plans covering
miscellaneous and safety employees with the California Public Employees' Retirement System
(CalPERS). CalPERS is an agent multiple-employer public employee defined benefit pension plan.
The plans provide retirement and disability benefits, annual cost-of-living adjustments,and death
benefits to Plan members and beneficiaries. The Plans are administered by CalPERS, which acts
as a common investment and administrative agent for participating public employers within the
State of California. A menu of benefit provisions as well as other requirements is established by
State statutes within the Public Employees'Retirement Law. The City selects optional benefit
provisions from the benefit menu by contract and adopts those benefits through local ordinances. A
full description of the pension plans regarding number of employees covered, benefit provisions,
assumptions (for funding, but not accounting purposes), and membership information are listed in
the June 30,2018 Annual Actuarial Valuation Report. This report and CalPERS’audited financial
statements are publicly available reports that can be obtained at CalPERS’ website under “Forms
and Publications.”
Safety Plan
The Safety Plan is a cost-sharing multiple employer defined benefit plan in which the City
participates with other public agencies that each have fewer than 100 active members and share
the same benefit formula and includes both fire and lifeguard employees,and retirees.The Safety
Plan is administered by the California Public Employees’ Retirement System (CalPERS), which acts
as a common investment and administrative agent for its participating member employers. Benefit
provisions under the Safety Plan are established by State statutes within the Public Employees’
Retirement Law. CalPERS issues publicly available reports that include a full description of the
pension plans regarding benefit provisions, assumptions and membership information that can be
found on the CalPERS website. Copies of the CalPERS annual financial report may be obtained
from the CalPERS Executive Office –400 P Street, Sacramento, California 95814.
SDWD Plan
The SDWD Plan is a cost-sharing multiple employer defined benefit plan that provides retirement
and disability benefits, annual cost-of-living adjustments,and death benefits to members and
beneficiaries, in which the District participates with other public agencies that each have fewer than
100 active members and share the same benefit formula. The Plan is administered by the California
Public Employees’Retirement System (CalPERS),which acts as a common investment and
administrative agent for its participating member employers. Benefit provisions under the Plan are
established by State statutes within the Public Employee’s Retirement Law. CalPERS issues
publicly available reports that include a full description of the pension plans regarding benefit
provisions, assumptions and membership information that can be found on the CalPERS website.
Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office
–400 P Street, Sacramento, California 95814.
91
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 13 –California Public Employees’Retirement System (Continued)
Benefits Provided
The City's Miscellaneous Plan is an agent multiple-employer plan that is part of the City’s portion of
CalPERS.The Miscellaneous Plan provides employees hired before October 13,2012 with a Tier 1
benefit equal to 2.7 percent at 55 years of age, calculated based on the single highest year of
qualifying compensation. As of October 13, 2012,the City Council imposed new terms and
conditions on the miscellaneous employees which created a new benefit formula for employees
hired after the effective date of the change (the "Tier 2 miscellaneous plan".) Employees hired
under the Tier 2 miscellaneous plan receive a lower benefit formula, referred to as the two percent
at 60 years of age formula. In addition, legislation enacted by the State of California applying to all
local units of government, referred to as the Public Employees' Pension Reform Act (PEPRA) which
became effective on January 1, 2013, created yet another benefit formula for new hires with no
experience or prior service credit with CalPERS. In the case of the City,this will constitute a "Tier 3
miscellaneous plan" which provides a retirement benefit,referred to as the two percent at 62 years
of age formula.The actual retirement benefit for Tier 2 and Tier 3 miscellaneous employees will be
calculated using the average of the highest 36 consecutive months of qualifying compensation.
The City’s Safety Plan provides Fire Department employees hired before June 23, 2012 with a Tier
1 benefit equal to three percent at 55 years of age, calculated based on the single highest year of
qualifying compensation. Effective June 23, 2012, the City provides for modifications to the pension
benefit formula for employees hired on or after the effective date (the "Tier 2 fire safety plan".) The
three percent at 55 year of age formula is maintained, but the actual retirement benefit will be
calculated using the average of the highest 36 consecutive months of qualifying compensation. In
addition, the PEPRA legislation, created yet another benefit formula for new hires with no
experience or prior service credit with CalPERS. In the case of the City, this will constitute a "Tier 3
fire safety plan"which provides a retirement benefit,referred to as the 2.7 percent at 57 years of
age formula.This plan also utilizes the mandated method of calculation based on the average of
the highest 36 consecutive months of qualifying compensation.
The City’s Safety Plan also provides lifeguard employees hired before October 13,2012 with a Tier
1 benefit equal to three percent at 55 years of age, calculated based on the single highest year of
qualifying compensation. The lifeguards have Tier 2 and Tier 3 (PEPRA) plans which are identical
to the Fire Plan described above.
The SDWD Plan provides employees hired before October 13, 2012 with a Tier 1 benefit equal to
2.7 percent at 55 years of age, calculated based on the single highest year of qualifying
compensation. As of October 13, 2012, the Board of Directors imposed new terms and conditions
which created a new benefit formula for employees hired after the effective date of the change (the
"Tier 2 Plan"). Employees hired under the Tier 2 Plan receive a lower benefit formula, referred to as
the two percent at 60 years of age formula. In addition, PEPRA created yet another benefit formula
for new hires with no experience or prior service credit with CalPERS. In the case of the District,
this will constitute a "Tier 3 Plan" which provides a retirement benefit, referred to as the 2 percent at
62 years of age formula.The actual retirement benefit for Tier 2 and Tier 3 employees will be
calculated using the average of the highest 36 consecutive months of qualifying compensation.
92
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 13 –California Public Employees’ Retirement System (Continued)
Employees Covered by Benefit Terms
As of the measurement date June 30,2020, the following employees were covered by the benefit
terms for the City’s plans:
Miscellaneous Safety SDW D
Active employees 158 61 22
Inactive employees or beneficiaries currently
receiving benefits 156 83 33
Inactive employees entitled to, but not yet receiving
benefits 174 50 13
Total 488 194 68
Contributions
Miscellaneous Plan
Employee Contributions
Active City Tier 1 miscellaneous members are required to contribute eight percent of their annual
covered salary (the "employee contribution"). Effective October 13, 2012, all City Tier 1
miscellaneous members contribute the full eight percent, which is credited to their individual
accounts. Members receiving the Tier 2 or Tier 3 benefits are required to contribute seven percent
and 6.25 percent of their annual covered salary, respectively. The employee contribution
requirements are established by State statute.
Employer Contributions
The City is required to contribute the actuarially determined remaining amounts necessary to fund
the benefits for its members (the "employer contributions"). The employer normal cost contribution
rate for Fiscal Year 2020-21 was 11.755 percent for miscellaneous members. The employer
contribution rates are calculated and established annually by CalPERS, based on the actuarial
methods and assumptions as adopted by the CalPERS Board of Administration.
Safety Plan
Active fire and lifeguard members are required to contribute 9 to 12.75 percent of their annual
covered salary (the “employee contribution”).The City is required to contribute the actuarially
determined remaining amounts necessary to fund the benefits for its members (the “employer
contributions”). The employer contribution rates for Fiscal Year 2020-21 were 13.884 to 23.558
percent for fire members and 13.044 to 21.746 percent for lifeguard members. The employer
contribution rates are calculated and established annually by CalPERS, based on the actuarial
methods and assumptions adopted by the CalPERS Board of Administration.
93
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 13 –California Public Employees’ Retirement System (Continued)
Contributions (Continued)
SDWD Plan
Active members in the Tier 1 Plan are required to contribute eight percent of their annual covered
salary (the "employee contribution"). Effective October 13,2012, all Tier 1 members contribute the
full eight percent,which is credited to their individual accounts. Members receiving the Tier 2 or Tier
3 benefits are required to contribute seven percent, and 6.25 percent of their annual covered salary,
respectively.The employee contribution requirements are established by State statute.
SDWD is required to contribute the actuarially determined remaining amounts necessary to fund the
benefits for its members (the "employer contributions"). The employer contribution rates for the year
ended June 30, 2021 for Tier 1,Tier 2,and PEPRA employees were 14.194 percent, 8.794 percent,
and 7.732 percent,respectively. The employer contribution rates are calculated and established
annually by CalPERS, based on the actuarial methods and assumptions as adopted by the
CalPERS Board of Administration.
Net Pension Liability
Actuarial Methods and Assumptions Used to Determine Total Pension Liability (All Plans)
For the measurement period ended June 30, 2020, the total pension liability was determined by
rolling forward the June 30,2019 total pension liability. The June 30, 2019 and June 30, 2020 total
pension liabilities were based on the following actuarial methods and assumptions:
Ac tuarial Cos t Method
No . 68
Ac tuarial Assumptions :
Discount R ate 7.15%
In flation
Salary In creas es
Mo rtality Rate Table
Pos t Retirem ent Benefit Inc reas e
Entry Age Nor mal in ac cordanc e with the requirem ents of
2.50%
Varies by Entry Age and Servic e
Derived us ing CalPERS' Mem ber ship Data for all funds
The les ser of contrac t COLA or 2.50%until Purc has ing Power
Protec tion Allowanc e floor on purchas ing power applies ,2.50%
thereafter
Discount Rate
The discount rate used to measure the total pension liability was 7.15 percent. The projection of
cash flows used to determine the discount rate assumed that contributions from plan members will
be made at the current member contribution rates and that contributions from employers will be
made at statutorily required rates, actuarially determined.Based on those assumptions, the Plan’s
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.
94
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 13 –California Public Employees’ Retirement System (Continued)
Discount Rate (Continued)
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 of the funds’ asset classes,expected compound (geometric) returns were
calculated over the short-term (first ten 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
followed:
As sumed
As set Real Return Real Return
As set Class 1 Al location 1 - 10 2 11 + 3
Global equity 50.0%4.80%5.98%
Fixed income 28.0 1.00 2.62
Inflation assets -0.77 1.81
Private equity 8.0 6.30 7.23
Real assets 13.0 3.75 4.93
Liquidity 1.0 -(0.92)
2 An expected inflation of 2.00 percent was used for this period.
3 An expected inflation of 2.92 percent was used for this period.
1 In the CalPERS ACFR, fixed income is included in global debt securities; liquidity is
included in short-term investments; inflation assets are included in both global equity
securities and global debt securities.
95
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 13 –California Public Employees’ Retirement System (Continued)
Changes in the Net Pension Liability
The following tables show the changes in the net pension liability recognized over the measurement
period for the Miscellaneous Plan:
Total Pension Plan Fiduciary Net Net Pe nsion
Liability Position Liability/(Asse t)
(a)(b)(c) = (a) - (b)
Balanc e at June 30, 2019 (Va luation D ate)114,964,209$ 90,314,870$ 24,649,339$
Changes Recogniz ed for the Meas urem ent Period:
Servic e Cos t 2,434,146 - 2,434,146
In terest on the total pens ion liability 8,158,681 - 8,158,681
Difference between expec ted and ac tual experience 372,587 - 372,587
Contributions from the em ployer - 3,929,445 (3,929,445)
Contributions from employees - 1,026,068 (1,026,068)
Net inves tm ent inc om e, net of adm inis trative expens e - 4,507,691 (4,507,691)
Benefit paym ents , inc luding refunds of em ployee
contributions (4,892,893) (4,892,893) -
Ad minis trative expens e - (127,322) 127,322
Other expens e - - -
Net Changes during July 1, 2019 to June 30, 2020 6,072,521 4,442,989 1,629,532
Balanc e at June 30, 2020 (Me as urement Date)121,036,730$ 94,757,859$ 26,278,871$
Increase (De crease )
As of June 30, 2021, the City reported net pension liabilities for its proportionate shares of the net
pension liability of the Safety Plan as follows:
Plan T otal Plan Plan N et
Pe nsion Fiduciary Pension
Liability Net Position Liability/(Asse t)
Balanc e at June 30, 2019 (Valuation date)96,757,950$ 71,581,823$ 25,176,127$
Balanc e at June 30, 2020 (Meas urem ent date)101,149,747 73,544,213 27,605,534
Net c hanges during 2019-2020 4,391,797$ 1,962,390$ 2,429,407$
96
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 13 –California Public Employees’ Retirement System (Continued)
The City’s net pension liability for the Safety Plan is measured as the proportionate share of the net
pension liability. The net pension liability of the Plan is measured as of June 30, 2020,and the total
pension liability for each Plan used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update
procedures. The City’s proportion of the net pension liability was based on a projection of the City’s
long-term share of contributions to the pension plans relative to the projected contributions of all
participating employers, actuarially determined.
The City’s proportionate share of the net pension liability for the Safety Plan as of measurement
date June 30, 2020 was as follows:
Safe ty
Plan
Propor tionate s hare at June 30, 2019 0.40330%
Propor tionate s hare at June 30, 2020 0.41435%
Change - Inc reas e/(Dec reas e)0.01105%
As of June 30, 2021, the City reported net pension liabilities for its proportionate shares of the net
pension liability of the SDWD Plan as follows:
Plan T otal Plan Plan Ne t
Pension Fiduciar y Pe nsion
Liability Ne t Position Liability/(Asse t)
Balanc e at June 30, 2019 (Va luation D ate)23,722,943$ 16,145,141$ 7,577,802$
Balanc e at June 30, 2020 (Me as ur em ent D ate)24,274,921 17,181,179 7,093,742
Ne t c hanges during 2019-2020 551,978$ 1,036,038$ (484,060)$
The City’s net pension liability for the SDWD Plan is measured as the proportionate share of the net
pension liability.The net pension liability of the Plan is measured as of June 30, 2020, and the total
pension liability for the Plan used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update
procedures. The District’s proportion of the net pension liability was based on a projection of the
District’s long-term share of contributions to the pension plan relative to the projected contributions
of all participating employers, actuarially determined.
The City’s proportionate share of the net pension liability for the SDWD Plan as of June 30 was as
follows:
SDWD
Plan
Proportionate share at June 30, 2019 0.18923%
Proportionate share at June 30, 2020 0.16817%
Change - Increase/(Decrease)(0.02106%)
97
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 13 –California Public Employees’ Retirement System (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the Miscellaneous Plan, Safety Plan, and SDWD
Plan as of the measurement date,calculated using the discount rate of 7.15 percent, as well as
what the net pension liability would be if it were calculated using a discount rate that is one
percentage point lower (6.15 percent) or one percentage point higher (8.15 percent) than the
current rate:
Discount Rate - 1%Curre nt D iscount Discount Rate + 1%
(6.15%)Rate (7.15%)(8.15%)
City Mis cellaneous 42,790,678$ 26,278,871$ 12,665,510$
City Safety 41,342,044 27,605,534 16,333,427
SDW D 10,324,142 7,093,742 4,424,564
94,456,864$ 60,978,147$ 33,423,501$
Plan's Net Pe nsion Liability/(Asse t)
Pension Plan Fiduciary Net Position
Detailed information about the Miscellaneous, Safety,and SDWD Plans’fiduciary net position is
available in a separately issued CalPERS financial report.
Amortization of Deferred Outflows and Inflows of Resources
Under GASB No. 68, gains and losses related to changes in total pension liability and fiduciary net
position are recognized in pension expense systematically over time.The first amortized amounts
are recognized in pension expense for the year the gain or loss occurs. The remaining amounts
are categorized as deferred outflows and deferred inflows 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:
Net difference between projected
and actual earnings on pension plan
investments
5 years
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.
98
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 13 –California Public Employees’ Retirement System (Continued)
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension
For the year ended June 30, 2021, the City recognized pension expense of $4,548,787,
$4,718,175, and $975,950 for the Miscellaneous,Safety and SDWD plans, respectively. At June
30, 2021,the City reported deferred outflows resources and deferred inflows of resources related to
pensions from the following sources:
Defe rred Deferred Deferre d Defe rred
Outflows Inflows Outflows Inflows
of Re source s of Re sour ce s of R esource s of Resource s
Contribution made after the meas urem ent date 3,989,449$ -$ 3,224,229$ -$
Differenc e between expec ted and ac tual experienc e 688,611 (30,408) 2,140,669 -
Differenc e between em ployer's contribution and
proportionate s hare of c ontribution - - - (1,086,352)
Changes of assumptions (46,190) - (91,955)
Net difference between projec ted and ac tual earnings on
pens ion plan investments 822,738 - 599,984 -
Adjustm ents due to differenc e in proportions - - 928,460 -
Total 5,500,798$ (76,598)$ 6,893,342$ (1,178,307)$
Misce llaneous Plan Safety Plan
The $3,989,449 and $3,224,229 reported as deferred outflows of resources related to contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in
the fiscal year ended June 30, 2022. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Misce llane ous Safe ty
Plan Plan
Measur ement Defe rre d O utflows De fe rre d O utflows De fe rre d O utflows
Pe riod (Inflows) of (Inflows) of (Inflows) of
Ending June 30 Re source s Re source s Re sour ce s T otal
2021 135,391$ 618,682$ 754,073$
2022 429,190 913,889 1,343,079
2023 484,993 657,612 1,142,605
2024 385,177 300,623 685,800
2025 - - -
Thereafter - - -
1,434,751$ 2,490,806$ 3,925,557$
99
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 13 –California Public Employees’Retirement System (Continued)
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension
(Continued)
For the year ended June 30, 2021, the City recognized pension expense of $975,950 for the SDWD
Plan. At June 30, 2021 the City reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Defe rre d outflows Defe rred inflows
of Re sour ce s of Resource s
Contribution m ade after the m eas urem ent date 617,487$ -$
Differenc e betw een expec ted and ac tual
exper ienc e 365,562 -
Changes of as sumptions - (50,595)
Ne t differenc e between projec ted and ac tual
earnings on pens ion plan inves tm ents 210,731 -
Differenc e betw een em ployer 's ac tual c ontributions
and proportionate s hare of c ontributions 599,448 (62,330)
Ad jus tm ents due to differenc e in proportions 21,861 (631,146)
Total 1,815,089$ (744,071)$
The $617,487 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the fiscal year
ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be recognized as pension expense as follows:
Measure me nt Defe rred
Pe riod Outflows (Inflows)
Ending June 30 Of Resource s
2021 (1,085)$
2022 193,277
2023 160,267
2024 101,072
2025 -
Thereafter -
453,531$
100
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 14 –Other Postemployment Benefits (OPEB)
The City of Encinitas and the San Dieguito Water District maintain separate plans to provide for post-
retirement health care benefits. An actuarial report is prepared every two years to update plan
information and assumptions (when required). The latest actuarial valuation was prepared for June 30,
2020 and was used to determine the June 30,2020 measurement date amounts.
A.Summary
The information in the following table includes the aggregate total OPEB related items for the City
and SDWD:
City SDWD Total
Net O PEB Liabilities 5,926,863$ 213,196$ 6,140,059$
Deferred O utflow of Res ourc es 1,184,823 60,059 1,244,882
Deferred Inflow of R es ourc es 1,353,923 34,381 1,388,304
OPEB Expens e 411,207 29,428 440,635
B.City of Encinitas Retiree Health Plan
Plan Description
The City provides postretirement health care benefits through the Public Employees Medical and
Hospital Care Act (PEMHCA), which is a defined benefit agent multiple-employer health benefit
plan administered by CalPERS, to eligible employees who retire directly from the City. The City
pays the cost for lifetime retiree and dependent medical benefits (average premium for CalPERS
health plans available in San Diego County)for fire department employees hired before March 16,
1995.Other City retirees receive the PEMHCA minimum benefit, as determined by CalPERS. The
City’s financial obligation is to provide the CalPERS minimum required employee contribution ($136
per month in 2019, $139 per month in 2020, and in future years, indexed to medical CPI increases)
except for former Encinitas Fire Protection District employees hired on or before March 15, 1995
who receive full retiree health benefits for both the employee and their dependents.The City does
not provide a retiree contribution for dental, vision, or life insurance benefits. The City's OPEB plan
does not issue a separate stand-alone report.
The City has elected to join the California Employers' Retiree Benefit Trust (the "Trust")in
accordance with GASB Statement No.75, which provides a means to fund the annual OPEB costs,
referred to as the Actuarially Determined Contribution (ADC).The ADC includes the normal cost
(current accrual for benefits being earned)plus an amortization of the unfunded accrued liability or
net OPEB liability over 15 years on level-percentage of pay basis.The City’s funding policy is to
pre-fund the ADC through the Trust.
Eligibility
Employees of the City are eligible for retiree health benefits if they retire from the City and
commence pension benefits under PERS (typically on or after age 50 with at least five years of
PERS eligible service). Membership in the plan consisted of the following at June 30, 2020, the
date of the latest actuarial valuation:
101
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
Note 14 – Other Postemployment Benefits (OPEB) (Continued)
B. City of Encinitas Retiree Health Plan (Continued)
Active plan members 226
Inactive plan members or beneficiaries
currently receiving benefits 86
Total 312
Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2020. The total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2020. The
net OPEB liability at June 30, 2021 was:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at June 30, 2019 (Valuation Date)11,547,054$ 4,765,600$ 6,781,454$
Changes Recognized for the Measurement Period:
Service Cost 218,453 - 218,453
Interest on the total OPEB liability 791,330 - 791,330
Change of assumptions - -
Difference between expected and actual experience (291,076) (291,076)
Employer contributions - 1,370,746 (1,370,746)
Net investment income - 205,412 (205,412)
Benefit payments, including refunds of member
contributions (937,434) (937,434) -
Administrative expenses - (2,860) 2,860
Net Changes during July 1, 2019 to June 30, 2020 (218,727) 635,864 (854,591)
Balance at June 30, 2020 (Measurement Date)11,328,327$ 5,401,464$ 5,926,863$
Actuarial Assumptions
The net OPEB liability in the June 30, 2020 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement, unless otherwise
specified:
Actuarial Cost Method:Entry Age Normal
Actuarial Assumptions:Discount Rate 7.00%
Inflation 2.50%
Investment Rate of Return
Healthcare Trend Rate
7.00%, assuming actuarially determined contributions funded into
CERBT Investment Strategy 1.
Based on actual rate for 2021 and decreasing in 2022 from 6.00% to
5.00% in 2024 and thereafter.
102
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 14 –Other Postemployment Benefits (OPEB)(Continued)
B.City of Encinitas Retiree Health Plan (Continued)
Actuarial Assumptions (Continued)
The actuarial assumptions used in the June 30, 2020 valuation were based on the results of an
actuarial experience study for the period July 1,2019 to June 30,2020.
Discount Rate
The discount rate used to measure the net OPEB liability was seven percent. This discount rate
assumes the City continues to fully fund for its retiree health benefits through the California
Employers’ Retiree Benefit Trust (CERBT) under its investment allocation Strategy 1. The rate
reflects the CERBT published median interest rate for Strategy 1 of 7.28 percent with an additional
margin for adverse deviation.
The table below reflects long-term expected real rate of return by asset class. The rate of return
was calculated using the capital market assumptions applied to determine the discount rate and
asset allocation.These geometric rates of return are net of administrative expenses.
Target Long-T erm Expe cte d
As se t Class Allocation Real Rate of Re turn*
Global equity 59.00%5.50%
Fixed inc om e 25.00%2.35%
In flation as sets 5.00%1.50%
Commodities 3.00%1.75%
REITs 8.00%3.65%
* Long-term expec ted rate of return is 7.00 percent
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the City, as well as what the City’s net OPEB
liability would be if it were calculated using a discount rate 1-percentage-point lower (six percent) or
1-percentage-point higher (eight percent) than the current discount rate:
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.00%)Rate (7.00%)(8.00%)
Net OPEB Liability 7,209,086$ 5,926,863$ 4,855,595$
103
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 14 –Other Postemployment Benefits (OPEB)(Continued)
B.City of Encinitas Retiree Health Plan (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the net OPEB liability of the City,as well as what the City’s net OPEB
liability would be if it were calculated using healthcare cost trend rates 1-percentage-point lower or
1-percentage-point higher than the current healthcare cost trend rates:
1% D ecre ase Current Rate 1% Increase
5.00% de creasing 6.00% de creasing 7.00% de cr easing
to 4.00%to 5.00%to 6.00%
Net OPEB Liability 4,698,465$ 5,926,863$ 7,404,833$
Contributions
The City’s policy is to fund the ADC, which includes the normal cost (current accrual for benefits
being earned) plus an amortization of the net (unfunded accrued) OPEB liability.
OPEB Liabilities, OPEB Expense and Deferred Outflows/Inflows of Resources to OPEB
For the year ended June 30, 2021, the City recognized OPEB expense of $411,207 for the City
Plan. At June 30, 2021 the City reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Defe rre d De fe rred
Outflows Inflows
of Resour ce s of R esource s
OPEB c ontribution m ade after the m eas urem ent
period 1,157,839$ -$
Changes of as sumptions - (19,663)
Differenc e betw een expec ted
ac tual experienc e - (1,334,260)
Ne t differenc e betw een projec ted and
ac tual earnings on inves tments 26,984 -
1,184,823$ (1,353,923)$
104
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 14 –Other Postemployment Benefits (OPEB)(Continued)
B.City of Encinitas Retiree Health Plan (Continued)
OPEB Liabilities, OPEB Expense and Deferred Outflows/Inflows of Resources to OPEB
(Continued)
The $1,157,839 reported as deferred outflows of resources related to contributions subsequent to
the measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year
ended June 30, 2022.Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to OPEB will be recognized as OPEB expense as follows:
Measurement Defe rred
Period Outflows (Inflows)
Ending June 30 of Resource s
2021 (253,034)$
2022 (214,265)
2023 (193,086)
2024 (190,991)
2025 (219,590)
Thereafter (255,973)
(1,326,939)$
C.San Dieguito Water District –Retiree Health Plan
The San Dieguito Water District maintains a separate plan to provide for post-retirement health care
benefits. An actuarial report is prepared every two years to update plan information and
assumptions (when required). The latest actuarial valuation as of June 30, 2020 was used to
determine the June 30, 2020 measurement date amounts.
Plan Description
SDWD provides postretirement health care benefits through the Public Employees Medical and
Hospital Care Act (PEMHCA),which is a defined benefit agent multiple-employer health benefit
plan administered by CalPERS,to eligible employees who retire directly from SDWD. Retirees
receive the PEMHCA minimum benefit, as determined by CalPERS. SDWD does not provide a
retiree contribution for dental, vision, or life insurance benefits. SDWD's OPEB plan does not issue
a separate stand-alone report.
SDWD has elected to join the California Employers'Retiree Benefit Trust (the "Trust") in
accordance with GASB Statement No.75, which provides a means to fund the annual OPEB costs,
referred to as the Actuarially Determined Contribution (ADC). The ADC includes the normal cost
(current accrual for benefits being earned) plus an amortization of the unfunded accrued liability or
net OPEB liability over 15 years on a level-percentage of pay basis. SDWD’s funding policy is to
pre-fund the ADC through the trust.
105
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 14 –Other Postemployment Benefits (OPEB)(Continued)
C.San Dieguito Water District –Retiree Health Plan (Continued)
Eligibility
Employees of SDWD are eligible for retiree health benefits if they retire from SDWD and commence
pension benefits under CalPERS (typically on or after age 50 with at least five years of CalPERS
eligible service). Membership in the plan consisted of the following at June 30,2020, the date of the
latest actuarial valuation:
Ac tive plan m em bers 24
In ac tive plan m em bers or benefic iaries
currently rec eiving benefits 21
Total 45
Change in the Net OPEB Liability
SDWD’s net OPEB liability was measured as of June 30, 2020. The total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2020. The
net OPEB liability at June 30, 2021 was:
Total OPEB Plan Fiduciary Net Ne t OPEB
Liability Position Liability/(Asse t)
(a)(b)(c) = (a) - (b)
Balanc e at June 30, 2020 500,683$ 275,664$ 225,019$
(Meas urem ent Date: June 30, 2019)
Changes Rec ogniz ed for the Measurem ent Period:
Servic e cos t 21,235 - 21,235
In teres t on the total OPEB liability 35,691 - 35,691
Contributions from the em ployer - 53,542 (53,542)
Net inves tm ent inc om e, net of adminis trative expens e - 11,264 (11,264)
Differ enc e between expec ted and ac tual experienc e (4,100) - (4,100)
Benefit paym ents , inc luding refunds of em ployee
contributions (24,514) (24,514) -
Adm inis trative expens e - (157) 157
Net Changes 28,312 40,135 (11,823)
Balanc e at June 30, 2021 528,995$ 315,799$ 213,196$
(Meas urem ent Date: June 30, 2020)
Incre ase (De cr ease )
106
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 14 –Other Postemployment Benefits (OPEB)(Continued)
C.San Dieguito Water District –Retiree Health Plan (Continued)
Actuarial Assumptions
The net OPEB liability in the June 30, 2020 actuarial valuation was determined using the following
actuarial assumptions,applied to all periods included in the measurement, unless otherwise
specified:
Ac tuarial Cos t Method:
Ac tuarial Assumptions :
Discount Rate 7.00%
In flation 2.50%
Wage Inflation 2.75% per annum , in aggregate
In ves tm ent Rate of Return
Healthc are Trend Rate
Entry Age Norm al
7.00%, as suming ac tuarially determ ined c ontributions funded into CERBT Inves tment
Bas ed on ac tual rate for 2021 and dec reas ing in 2022 from 6.00% to 5.00% in 2024 and
ther eafter.
Discount Rate
The discount rate used to measure the net OPEB liability was 7.00 percent. The projection of cash
flows used to determine the discount rate assumed that District contributions will be made at rates
equal to the actuarily determined contribution rates. Based on those assumptions, the OPEB plan’s
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 plan investments was applied to all periods of projected benefit payments to
determine the total OPEB liability.
The table below reflects long-term expected real rate of return by asset class.The rate of return
was calculated using the capital market assumptions applied to determine the discount rate and
asset allocation. These geometric rates of return are net of administrative expenses.
Asset Class
Target
Al location
Long-term Expected
Real Rate of Return*
Global equity 59.00%5.50%
Global debt security 25.00%2.35%
Inflation assets 5.00%1.50%
Commodities 3.00%1.75%
Real estate investment trusts 8.00%3.65%
100.00%
* Long-term expected rate of return is 7.00 percent
107
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 14 –Other Postemployment Benefits (OPEB)(Continued)
C.San Dieguito Water District –Retiree Health Plan (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of SDWD,as well as what SDWD’s net OPEB liability
would be if it were calculated using a discount rate 1-percentage point lower (6.00 percent) or 1-
percentage point higher (8.00 percent)than the current discount rate:
Discount R ate - 1%Curre nt Discount Discount Rate + 1%
(6.00%)Rate (7.00%)(8.00%)
Ne t OPEB Liability 273,049$ 213,196$ 162,977$
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the net OPEB liability of SDWD, as well as what SDWD’s net OPEB liability
would be if it were calculated using healthcare cost trend rates 1-percentage point lower or 1-
percentage point higher than the current healthcare cost trend rates:
1% Decre ase Curre nt Rate 1% incr ease
5.00%6.00%7.00%
de creasing to 4.00%de creasing t o 5.00%de cr easing to 6.00%
Ne t O PEB Liability 153,171$ 213,196$ 285,905$
Contributions
SDWD’s policy is to fund the ADC, which includes the normal cost (current accrual for benefits
being earned) plus an amortization of the net (unfunded accrued) OPEB liability.
OPEB Expense and Deferred Outflows/Inflows of Resources to OPEB
For the year ended June 30, 2021, SDWD recognized OPEB expense of $29,428 for the SDWD
Plan. At June 30,2021,SDWD reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
De ferred Outflows Deferred Inflows
of Re source s of Resource s
OPEB contribution s ubs equent to
the m eas urem ent date 55,006$ -$
Changes of as sumptions 1,317 -
Differenc e between expec ted and
ac tual experienc e (34,381)
Net difference between projec ted
and ac tual earnings on O PEB
plan inves tments 3,736 -
Total 60,059$ (34,381)$ 108
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 14 –Other Postemployment Benefits (OPEB)(Continued)
C.San Dieguito Water District –Retiree Health Plan (Continued)
OPEB Expense and Deferred Outflows/Inflows of Resources to OPEB (Continued)
The $55,006 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year
ended June 30,2022. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to OPEB will be recognized as OPEB expense as follows:
Measurement Defe rre d
Pe riod Outflows (Inflows)
Ending June 30 of Resource s
2021 (7,363)$
2022 (5,598)
2023 (4,600)
2024 (4,691)
2025 (6,492)
Thereafter (584)
(29,328)$
Note 15 –Encinitas Ranch Golf Authority
The Encinitas Ranch Golf Authority (the “Golf Authority”)is a joint powers authority, formed by the City
and SDWD in 1995 to finance, own,and operate an 18-hole golf course (the “Golf Course”) within the
City.The Golf Course was constructed in connection with the development of the Encinitas Ranch
master-planned community (the “Ranch”).The Ranch is a mixed-use community of residential,
commercial and agricultural development within the City. As a condition to the development of the
Ranch,the Carltas Company (the “Developer”), agreed to dedicate land for and construct the Golf
Course improvements. The Golf Course opened to the public on March 1, 1998 and is managed and
operated under a contract arrangement with a private company.
The Golf Authority is governed by a five-member Board of Directors,the membership of which is
specified in the 1994 Encinitas Ranch Development Agreement. It is a self-sustaining golf course
operation and receives no financial support from the City or SDWD. In future years, depending on the
net revenues from golf operations,the City may benefit financially from the operations.However, this is
unlikely until at least 2030, when the Golf Course bonded debt is expected to be paid off.
The debts and obligations of the Golf Authority are not the debts and obligations of the City or SDWD.
Separate audited financial statements of the Golf Authority are available at the City's administrative
office.
109
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 16 –Special Assessment Debt
City of Encinitas -Community Facilities District (CFD)#1: Encinitas Ranch Community
During Fiscal Year 2012-13, the City, on behalf of the residents and businesses of the Community
Facilities District (“CFD”)#1, refunded all of the outstanding bonds of the 2004 Special Tax Bonds,
Series A, via a current refunding transaction.The CFD #1 issued $32,265,000 par value of 2012
Special Tax Refunding Bonds (Encinitas Ranch Public Improvements), at lower interest rates, while
maintaining the same general terms and conditions, including the final maturity date of September 1,
2030. The transaction will save the taxpayers an average of $170,000 in annual debt service, or about
six percent of the average annual debt service of the prior bonds.
As of June 30, 2021,the outstanding balance on the 2012 Special Tax Refunding Bonds was
$20,635,000.The City acts solely as an agent for CFD #1. The City has no duty or obligation to pay any
liabilities or potential liabilities of the district. Neither the full faith and credit, nor the taxing power of the
City or any other City related agency, is pledged to the repayment of these 2012 Special Tax Refunding
Bonds. Therefore, such bonds are not considered to be a liability of the City and are not included in the
accompanying basic financial statements.
City of Encinitas –Duties and Responsibilities
The City acts as the agent for this Assessment District, collecting the assessments and paying the
CFD’s bills, as well as other administrative duties. The City has no duty or obligation to pay any
liabilities or potential liabilities of the CFD. Neither the full faith and credit, nor the taxing power of the
City or any other City related agency,is pledged in connection with this bond issue. Therefore, such
bonds are not considered to be a liability of the City and are not included in the accompanying basic
financial statements.
Note 17 –Other Required Disclosures
Deficit Fund Balances/Net Position
At June 30, 2021, the Infrastructure Improvements Special Revenue fund had a fund deficit of
$7,140,370. The deficit is anticipated to be funded from future grants,other revenues,and operating or
capital transfers.
At June 30, 2021, the Wastewater Support Internal Service fund had a fund deficit of $334,590. The
deficit is anticipated to be funded by Cardiff Sanitary Division and Encinitas Sanitary Division funds.
At June 30, 2021, the Vehicle Maintenance Internal Service fund had a deficit of $180,249.The deficit
is anticipated to be funded by the General Fund, the Cardiff Sanitary Division, Encinitas Sanitary
Division and San Dieguito Water District funds.
110
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30,2021
Note 18 –Prior Period Restatement
The City implemented the Governmental Accounting Standards Board (GASB) Statement No. 84
related to Fiduciary Activities. Accordingly, Net Position for the custodial funds was restated as of July
1, 2020 as follows:
Investment
Custodial Fund
Custodial
Fund
Beginning net position, as previousy reported -$ -$
Implementation of GASB 84 2,057,056 4,441,141
Net position, beginning of year, as restated 2,057,056$ 4,441,141$
Note 19 –Subsequent Event
On July 28, 2021, Encinitas Public Financing Authority (on behalf of the City of Encinitas)issued
Federally Taxable Lease Revenue Refunding Bonds, Series 2021A in the amount of $9,505,000 to
advance refund a portion of outstanding Lease Revenue Bonds, Series 2014B issued to acquire Pacific
View property and pay costs of issuance in connection with the issuance of the 2021 Bonds. The Series
2021 Bonds are limited obligations of the EPFA secured solely by the lease revenue payments paid by
the City of Encinitas for the use and occupancy of the leased property. Annual debt service payments
range from $ 117,928 to $ 574,581. The final maturity date for the 2021 Term Bonds is October 1,
2044.
On August 4, 2021, the City of Encinitas on behalf of the Community Facilities District No. 1 issued
taxable special tax refunding Bonds in the amount of $19,105,000 to advance refund the outstanding
2012 taxable special tax refunding bonds, fund a reserve and pay costs of issuance and insurance in
connection with the issuance of the 2021 Bonds. The Series 2021 Bonds are payable from and secured
by a pledge of certain special tax revenue and are not an obligation of the City. The bonds mature
September 1, 2030 and annual debt service payments range from $ 2,273,401 to $ 2,308,734.
111
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112
REQUIRED SUPPLEMENTARY
INFORMATION
113
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114
City of Encinitas
Required Supplementary Information
For the Year Ended June 30,2021
Note 1 –Budgetary Information
Budget and Budgetary Accounting:
The City follows these procedures in establishing the budgetary data reflected in the required
supplementary information and other supplementary information budgetary comparison schedules:
The City Council adopts a two-year operating budget,with appropriations for the first year only. The annual
budget provides for the general operations of the City. It includes all proposed expenditures and inter-fund
transfers, and the means of financing them. The Council also approves any amendments to appropriations
throughout the year, generally at the mid-year budget review in February.This “appropriated budget” covers
substantially all City expenditures, with the exception of capital improvement projects, which expenditures
constitute a legally authorized “non-appropriated budget.” The legal level of budgetary control is the fund
level. The budget figures used in the required supplementary information are both original and final
budgeted amounts. The final budget amount includes any amendments approved during the year.
Formal budgetary integration is employed as a management control device. Commitments for materials and
services, such as purchase orders and contracts, are recorded during the year as encumbrances to assist
in controlling expenditures.Appropriations which are unencumbered lapse at year end. City Council
approval is required to include any unencumbered appropriations at year end in the following fiscal year’s
budget as continuing appropriations.
Budgets for the General Fund and special revenue funds are adopted on a basis substantially consistent
with accounting principles generally accepted in the United States of America. Accordingly, actual revenue
and expenditures can be compared with related budgeted amounts without any significant reconciling items.
No budgetary comparisons are presented for the debt service,capital projects, or proprietary funds,as the
City is not legally required to adopt an annual budget for those types of funds.
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is
restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes
exceed allowed appropriations, the excess must either be refunded to the State Controller,returned to the
taxpayers through revised tax rates or revised fee schedules, or an excess in one year may be offset
against a deficit in the following year. Further,Section 5 of Article XIIIB allows the City to designate a
portion of fund balance for general contingencies to be used in future years without limitation.
Expenditures in the Infrastructure Improvements Fund exceeded appropriations by $675,806. This is due to
COVID-19 expenditures to be reimbursed by the Federal government (CARES Act and the American
Rescue Plan Act). The actuals expense over budget was offset by actual revenues exceeding the budget
by $1,017,754.
115
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Note 2 –Budgetary Comparison Schedule
General Fund
Variance with
Original Final Actual Final Budget
REVENUES:
Taxes:
Property 51,689,530$ 52,189,530$ 52,521,878$ 332,348$
Real property transfer 520,000 600,000 1,155,082 555,082
Sales 11,898,717 13,290,000 15,453,648 2,163,648
Franchise 2,206,311 2,206,311 2,253,970 47,659
Transient occupancy 1,650,704 1,650,704 2,258,444 607,740
Total taxes 67,965,262 69,936,545 73,643,022 3,706,477
Licenses and permits 235,200 262,680 261,950 (730)
Intergovernmental 674,947 674,947 740,163 65,216
Charges for services 6,958,742 6,606,063 5,862,696 (743,367)
Fines, forfeitures and penalties 404,153 404,153 232,873 (171,280)
Use of money and property 837,361 724,166 301,159 (423,007)
Other 548,811 1,680,565 2,285,674 605,109
Total revenues 77,624,476 80,289,119 83,327,537 3,038,418
EXPENDITURES:
General government:
City Council 473,279 473,279 439,692 33,587
City Attorney 690,500 690,500 690,465 35
City Manager 5,101,113 5,217,580 4,982,657 234,923
City Clerk 726,049 726,049 485,720 240,329
Finance 2,059,020 2,059,020 1,979,410 79,610
Non-departmental 4,417,894 4,578,539 4,351,933 226,606
Total general government 13,467,855 13,744,967 12,929,877 815,090
Public safety:
Law enforcement 16,774,200 16,774,200 16,431,437 342,763
Fire and marine safety 17,262,109 18,011,940 17,852,019 159,921
Total public safety 34,036,309 34,786,140 34,283,456 502,684
Public works:
Administration 509,743 509,743 499,523 10,220
Environmental programs 2,100 2,100 981 1,119
Street maintenance 2,908,005 2,858,005 2,800,092 57,913
Facility maintenance 1,586,552 1,618,952 1,515,951 103,001
Stormwater 1,553,956 1,603,956 1,429,749 174,207
Total public works 6,560,356$ 6,592,756$ 6,246,296$ 346,460$
Budgeted Amounts
116
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Note 2 –Budgetary Comparison Schedule (Continued)
General Fund (Continued)
Variance with
Original Final Actual Final Budget
Development services - planning:
Planning 3,172,637$ 3,456,747$ 3,277,151$ 179,596$
Code enforcement 2,410,113 2,560,113 2,190,390 369,723
Building services 1,004,433 805,058 797,708 7,350
Total development services - planning 6,587,183 6,821,918 6,265,249 556,669
Development services - engineering:
City engineering 1,231,819 1,236,819 1,190,958 45,861
Traffic engineering 606,530 658,885 609,752 49,133
Coastal zone management 1,282,414 1,282,418 1,237,120 45,298
Total development services - engineering 3,120,763 3,178,122 3,037,830 140,292
Parks and recreation:
Administration 1,263,461 1,213,461 1,237,063 (23,602)
Park services 2,545,596 2,542,796 2,234,300 308,496
Beach services 581,935 683,937 573,243 110,694
Recreational services 673,177 529,717 436,025 93,692
Community and senior center 2,143,464 1,674,506 1,381,504 293,002
Total parks and recreation 7,207,633 6,644,417 5,862,135 782,282
Capital outlay:
Public safety 27,000 68,020 67,393 627
Public works 179,641 179,641 177,036 2,605
Total capital outlay 206,641 247,661 244,429 3,232
Total expenditures 71,186,740 72,015,981 68,869,272 3,146,709
EXCESS OF REVENUES OVER EXPENDITURES 6,437,736 8,273,138 14,458,265 6,185,127
OTHER FINANCING SOURCES (USES)
Transfers in - operating 2,548,289 2,138,289 2,165,555 27,266
Transfers in - capital 4,733,514 6,906,605 5,217,743 (1,688,862)
Transfers out - operating (3,614,052) (3,275,094) (3,128,961) 146,133
Transfers out - capital (8,182,832) (15,038,252) (15,038,252) -
Transfers out - debt service (3,722,269) (3,722,269) (3,717,073) 5,196
Total other financing sources (uses)(8,237,350) (12,990,721) (14,500,988) (1,510,267)
NET CHANGE IN FUND BALANCE (1,799,614)$ (4,717,583)$ (42,723) 4,674,860$
Fund balance - beginning of year 27,206,008
Fund balance - end of year 27,163,285$
Budgeted Amounts
117
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Note 2 –Budgetary Comparison Schedule (Continued)
Infrastructure Improvements Special Revenue Fund
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES:
Taxes and assessments 544,881$ 544,881$ 576,289$ 31,408$
Intergovernmental 4,330,780 6,107,095 9,592,171 3,485,076
Use of money and property - - 59,487 59,487
Total revenues 4,875,661 6,651,976 10,227,947 3,575,971
EXPENDITURES:
Current:
General government 291,331 791,331 1,460,865 (669,534)
Public safety - - 95,713 (95,713)
Development services - planning - 250,000 160,559 89,441
Total expenditures 291,331 1,041,331 1,717,137 (675,806)
REVENUES OVER
(UNDER) EXPENDITURES 4,584,330 5,610,645 8,510,810 2,900,165
OTHER FINANCING SOURCES (USES):
Transfers in - 3,872,276 3,872,276 -
Transfers out (4,002,057) (6,209,133) (6,282,766) (73,633)
Total other financing sources (uses)(4,002,057) (2,336,857) (2,410,490) (73,633)
NET CHANGE IN FUND BALANCE 582,273$ 3,273,788$ 6,100,320 2,826,532$
Fund balance (deficit) - beginning of year (13,240,690)
Fund balance (deficit) - end of year (7,140,370)$
118
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Measurement period 2019-20 2018-19 2017-18
Service cost 2,434,146$ 2,479,472$ 2,258,659$
Interest on total pension liability 8,158,681 7,738,502 7,270,761
Differences between expected and actual experience 372,587 1,229,327 (486,531)
Changes in assumptions - - (739,046)
Changes in benefit terms - - -
Benefit payments, including refunds of employee contributions (4,892,893) (4,489,668) (4,164,974)
Net change in total pension liability 6,072,521 6,957,633 4,138,869
Total pension liability - beginning 114,964,209 108,006,576 103,867,707
Total pension liability - ending (a)121,036,730$ 114,964,209$ 108,006,576$
Plan fiduciary net position
Contributions - employer 3,929,445$ 3,638,301$ 3,755,605$
Contributions - employee 1,026,068 1,018,181 992,534
Investment income (net of administrative expenses)4,507,691 5,588,433 6,559,803
Benefit payments (4,892,893) (4,489,668) (4,164,974)
Other (127,322) (60,191) (351,784)
Net change in plan fiduciary net position 4,442,989 5,695,056 6,791,184
Plan fiduciary net position - beginning 90,314,870 84,619,814 77,828,630
Plan fiduciary net position - ending (b)94,757,859$ 90,314,870$ 84,619,814$
Net pension liability - ending (a)-(b)26,278,871$ 24,649,339$ 23,386,762$
Plan fiduciary net position as a percentage of the
total pension liability 78.29%78.56%78.35%
Covered payroll 14,169,243$ 13,653,405$ 13,562,192$
Net pension liability as a percentage of covered
payroll 185.46%180.54%172.44%
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in Assumptions:
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of information are shown.
There were no changes in 2020 and 2019.In 2018,demographic assumptions and inflation rate were changed in accordance to
CalPERS Experience Study and Review of Actuarial Assumptions December 2017.In 2017,the accounting discount rate was
reduced from 7.65 percent to 7.15 percent.
Note 3 - Schedule of Changes in the Net Pension Liability and Related Ratios
Last Ten Fiscal Years*
City Miscellaneous Plan
119
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Measurement period 2016-17 2015-16 2014-15 2013-14
Service cost 2,427,983$ 2,192,399$ 2,261,277$ 2,448,194$
Interest on total pension liability 6,965,613 6,690,503 6,333,421 5,943,955
Differences between expected and actual experience (1,781,097) (801,667) (126,649) -
Changes in assumptions 6,066,080 - (1,637,757) -
Changes in benefit terms - - - -
Benefit payments, including refunds of employee contributions (3,466,120) (3,178,023) (3,003,676) (2,990,732)
Net change in total pension liability 10,212,459 4,903,212 3,826,616 5,401,417
Total pension liability - beginning 93,655,248 88,752,036 84,925,420 79,524,003
Total pension liability - ending (a)103,867,707$ 93,655,248$ 88,752,036$ 84,925,420$
Plan fiduciary net position
Contributions - employer 2,944,153$ 2,927,539$ 2,077,263$ 2,278,140$
Contributions - employee 1,015,196 1,004,970 776,061 1,043,925
Investment income (net of administrative expenses)7,826,373 447,217 1,359,388 9,816,151
Benefit payments (3,466,120) (3,178,023) (3,003,676) (2,990,732)
Other (102,777) (41,718) 49,406 -
Net change in plan fiduciary net position 8,216,825 1,159,985 1,258,442 10,147,484
Plan fiduciary net position - beginning 69,611,805 68,451,820 67,193,378 57,045,894
Plan fiduciary net position - ending (b)77,828,630$ 69,611,805$ 68,451,820$ 67,193,378$
Net pension liability - ending (a)-(b)26,039,077$ 24,043,443$ 20,300,216$ 17,732,042$
Plan fiduciary net position as a percentage of the
total pension liability 74.93%74.33%77.13%79.12%
Covered payroll 13,167,177$ 12,783,667$ 12,951,932$ 13,022,309$
Net pension liability as a percentage of covered
payroll 197.76%188.08%156.74%136.17%
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in Assumptions:
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of information are shown.
There were no changes in 2020 and 2019.In 2018,demographic assumptions and inflation rate were changed in accordance to
CalPERS Experience Study and Review of Actuarial Assumptions December 2017.In 2017,the accounting discount rate was reduced
from 7.65 percent to 7.15 percent.
Note 3 - Schedule of Changes in the Net Pension Liability and Related Ratios (Continued)
Last Ten Fiscal Years*
City Miscellaneous Plan
120
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Measurement period 2019-20 2018-19 2017-18
Plan's proportion of the net pension liability 0.41435%0.40330%0.39412%
Plan's proportionate share of the net pension liability 27,605,534$ 25,176,127$ 23,125,137$
Plan's covered payroll 7,089,554$ 6,117,357$ 6,197,680$
389.38%411.55%373.13%
Plan's fiduciary net position 73,544,213$ 71,581,823$ 69,535,698$
72.71%73.98%75.04%
Plan's proportionate share of aggregate employer
contributions 2,979,381$ $ 2,457,135 2,203,690$
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in assumptions
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
Safety Plan
Last Ten Fiscal Years*
Note 4 - Schedule of the City's Proportionate Share of the Net Pension Liability
There were no changes in 2020 and 2019.In 2018,demographic assumptions and inflation rate were changed in
accordance to CalPERS Experience Study and Review of Actuarial Assumptions.In 2017,the accounting discount
rate was reduced from 7.65 percent to 7.15 percent.
Plan's fiduciary net position as a percentage of the total pension
liability
Plan's proportionate share of the net pension liability as a
percentage of covered payroll
121
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Measurement period 2016-17 2015-16 2014-15 2013-14
Plan's proportion of the net pension liability 0.39412%0.38281%0.35376%0.22994%
Plan's proportionate share of the net pension liability 22,930,965$ 19,826,444$ 14,576,416$ 14,308,774$
Plan's covered payroll 6,017,165$ 5,841,908$ 5,671,755$ 5,115,288$
a percentage of covered payroll
381.09%339.38%257.00%279.73%
Plan's fiduciary net position 67,653,362$ 63,591,785$ 65,540,377$ 62,697,310$
pension liability
74.69%76.23%81.81%81.42%
Plan's proportionate share of aggregate employer
contributions 1,108,343$ 1,609,491$ 1,250,672$ 1,775,034$
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in assumptions
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
Note 4 - Schedule of the City's Proportionate Share of the Net Pension Liability (Continued)
Last Ten Fiscal Years*
Safety Plan
There were no changes in 2020 and 2019.In 2018,demographic assumptions and inflation rate were changed in
accordance to CalPERS Experience Study and Review of Actuarial Assumptions.In 2017,the accounting discount rate
was reduced from 7.65 percent to 7.15 percent.
122
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Measurement period 2019-20 2018-19 2017-18
Plan's proportion of the net pension liability 0.16817%0.18923%0.18768%
Plan's proportionate share of the net pension liability 7,093,742$ 7,577,802$ 7,073,051$
Plan's covered payroll 1,901,202$ 1,887,782$ $1,918,865
373.12%401.41%368.61%
Plan's fiduciary net position 17,181,179$ 16,145,141$ 17,181,179$
70.78%68.06%69.48%
Plan's proportionate share of aggregate employer
contributions 1,581,186$ 585,749$ 504,492$
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in assumptions
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of information are shown.
Note 4 - Schedule of the City's Proportionate Share of the Net Pension Liability (Continued)
Last Ten Fiscal Years*
San Dieguito Water District Plan
There were no changes in 2020 and 2019.In 2018,demographic assumptions and inflation rate were
changed in accordance to CalPERS Experience Study and Review of Actuarial Assumptions.In 2017,the
accounting discount rate was reduced from 7.65 percent to 7.15 percent.
Plan's fiduciary net position as a percentage of the total
pension liability
Plan's proportionate share of the net pension liability as a
percentage of covered payroll
123
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Measurement period 2016-17 2015-16 2014-15 2013-14
Plan's proportion of the net pension liability 0.18116%0.18103%0.18296%0.06074%
Plan's proportionate share of the net pension liability 7,141,232$ 6,288,631$ 5,019,493$ 3,779,285$
Plan's covered payroll $1,862,975 1,808,714$ 1,756,033$ 1,712,639$
383.32%347.69%285.84%220.67%
Plan's fiduciary net position 15,991,467$ 15,586,708$ 16,358,655$ 18,489,458$
69.13%71.25%76.52%83.03%
Plan's proportionate share of aggregate employer
contributions 472,819$ 356,509$ 271,845$ 241,133$
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in assumptions
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of information are shown.
Note 4 - Schedule of the City's Proportionate Share of the Net Pension Liability (Continued)
Last Ten Fiscal Years*
San Dieguito Water District Plan
There were no changes in 2020 and 2019.In 2018,demographic assumptions and inflation rate were changed in
accordance to CalPERS Experience Study and Review of Actuarial Assumptions.In 2017,the accounting discount
rate was reduced from 7.65 percent to 7.15 percent.
Plan's proportionate share of the net pension liability
as a percentage of covered payroll
Plan's fiduciary net position as a percentage of the
total pension liability
124
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Fiscal Year 2020-21 2019-20 2018-19
Actuarially determined contribution 3,901,665$ 3,420,863$ 3,252,930$
Contributions in relation to the actuarially
determined contributions (3,989,449) (3,929,445) (3,637,225)
Contribution deficiency (excess)(87,784)$ (508,582)$ (384,295)$
Covered payroll 14,147,287$ 14,169,243$ 13,653,405$
Contributions as a percentage of covered
payroll 28.20%27.73%26.64%
Notes to Schedule
Fiscal Year: June 30, 2021
Valuation Date: June 30, 2018
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.50%
Projected salary increases Varies by entry age and service
Payroll growth 2.75%
Discount rate 7.00%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of information are shown.
Note 5 - Schedule of Contributions - Pension
Last Ten Fiscal Years*
City Miscellaneous Plan
125
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Fiscal Year 2017-18 2016-17 2015-16 2014-15
Actuarially determined contribution 2,832,401$ 2,723,629$ 2,585,583$ 1,815,263$
Contributions in relation to the actuarially
determined contributions (3,755,605) (2,944,153) (2,927,539) (2,077,263)
Contribution deficiency (excess)(923,204)$ (220,524)$ (341,956)$ (262,000)$
Covered payroll 13,562,192$ 13,167,177$ 12,783,667$ 12,951,932$
Contributions as a percentage of covered
payroll 27.69%22.36%22.90%16.04%
Notes to Schedule
Fiscal Year: June 30, 2021
Valuation Date: June 30, 2018
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.50%
Projected salary increases Varies by entry age and service
Payroll growth 2.75%
Discount rate 7.00%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of information are shown.
Note 5 - Schedule of Contributions - Pension (Continued)
Last Ten Fiscal Years*
City Miscellaneous Plan
126
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Fiscal Year 2020-21 2019-20 2018-19
Contractually determined contribution (actuarially
determined)3,224,229$ 2,979,381$ 2,457,135$
Contributions in relation to the actuarially determined
contributions (3,224,229) (2,979,381) (2,457,135)
Contribution deficiency (excess)-$ -$ -$
Covered payroll 6,779,318$ 7,089,554$ 6,117,357$
Contributions as a percentage of covered
payroll 47.56%42.02%40.17%
Notes to Schedule
Fiscal Year: June 30, 2021
Valuation Date: June 30, 2018
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.50%
Projected salary increases Varies by entry age and service
Payroll growth 2.75%
Discount rate 7.00%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of
information are shown.
Note 5 - Schedule of Contributions - Pension (Continued)
Last Ten Fiscal Years*
Safety Plan
127
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Fiscal Year 2017-18 2016-17 2015-16 2014-15
Contractually determined contribution
(actuarially determined)2,203,690$ 1,108,343$ 1,609,491$ 1,251,594$
Contributions in relation to the actuarially
determined contributions (2,203,690) (1,108,343) (1,609,491) (1,251,594)
Contribution deficiency (excess)-$ -$ -$ -$
Covered payroll 6,197,680$ 6,017,165$ 5,841,908$ 5,671,755$
Contributions as a percentage of covered
payroll 35.56%18.42%27.55%22.07%
Notes to Schedule
Fiscal Year: June 30, 2021
Valuation Date: June 30, 2018
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.50%
Projected salary increases Varies by entry age and service
Payroll growth 2.75%
Discount rate 7.00%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of
information are shown.
Note 5 - Schedule of Contributions - Pension (Continued)
Last Ten Fiscal Years*
Safety Plan
128
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Note 5 - Schedule of Contributions - Pension (Continued)
Fiscal Year 2020-21 2019-20 2018-19
Contractually determined contribution
(actuarially determined) $ 617,487 $ 1,581,186 585,749$
Contributions in relation to the actuarially
determined contributions (617,487) (1,581,186) (585,749)
Contribution deficiency (excess)-$ -$ -$
Covered payroll 1,853,964$ 1,901,202$ 1,887,782$
Contributions as a percentage of covered
payroll 33.31%83.17%31.03%
Notes to Schedule
Fiscal Year: June 30, 2021
Valuation Date: June 30, 2018
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.50%
Projected salary increases Varies by entry age and service
Payroll growth 2.75%
Discount rate 7.00%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of
information are shown.
Last Ten Fiscal Years*
San Dieguito Water District Plan
129
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Note 5 - Schedule of Contributions - Pension (Continued)
2017-18 2016-17 2015-16 2014-15
Contractually determined contribution
(actuarially determined)504,492$ 472,819$ 356,509$ 271,845$
Contributions in relation to the actuarially
determined contributions (504,492) (472,819) (356,509) (271,845)
Contribution deficiency (excess)-$ -$ -$ -$
Covered payroll 1,918,865$ 1,862,975$ 1,808,714$ 1,756,033$
Contributions as a percentage of covered
payroll 26.29%25.38%19.71%15.48%
Notes to Schedule
Fiscal Year: June 30, 2021
Valuation Date: June 30, 2018
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.50%
Projected salary increases Varies by entry age and service
Payroll growth 2.75%
Discount rate 7.00%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only seven years of
information are shown.
Last Ten Fiscal Years*
San Dieguito Water District Plan
130
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Measurement Period 2019-20 2018-19 2017-18 2016-17
Total OPEB liability
Service cost 218,453$ 196,193$ 190,479$ 178,018$
Interest 791,330 880,167 867,343 856,058
Changes of benefit terms - - - -
Differences between expected and actual experience (291,076) (1,439,425) - -
Changes of assumptions - (26,216) - -
Benefit payments, including refunds of member contributions (937,434) (882,565) (878,114) (892,532)
Net change in total OPEB liability (218,727) (1,271,846) 179,708 141,544
Total OPEB liability - beginning 11,547,054 12,818,900 12,639,192 12,497,648
Total OPEB liability - ending (a)11,328,327$ 11,547,054$ 12,818,900$ 12,639,192$
OPEB fiduciary net position
Contributions - employer 1,370,746$ 1,270,357$ 1,102,937$ 1,092,690$
Net investment income 205,412 308,900 358,109 403,267
Benefit payments, including refunds of member contributions (937,434) (882,565) (878,114) (892,532)
Administrative expense (2,859) (1,100) (2,366) (2,046)
Other expense - - (4,620) -
Net change in plan fiduciary net position 635,865 695,592 575,946 601,379
Plan fiduciary net position - beginning 4,765,599 4,070,007 3,494,061 2,892,682
Plan fiduciary net position - ending (b)5,401,464 4,765,599 4,070,007 3,494,061
Plan net OPEB liability - ending (a) - (b)5,926,863$ 6,781,455$ 8,748,893$ 9,145,131$
Plan fiduciary net position as a percentage
of the total OPEB Liability 47.68%41.27%31.75%27.64%
Covered-employee payroll 23,224,242$ 22,403,865$ 21,767,304$ 17,816,557$
Plan net OPEB liability as a percentage
of covered-employee payroll 25.52%30.27%40.19%51.33%
* Fiscal Year 2017-18 was the first year of implementation; therefore, only four years of information are shown.
Note 6 - Schedule of Changes in the Net OPEB Liability and Related Ratios
Last Ten Fiscal Years*
City Plan
131
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Measurement Period 2019-20 2018-19 2017-18 2016-17
Total OPEB liability
Service cost 21,235$ 14,633$ 14,241$ 13,309$
Interest 35,691 36,301 34,637 33,225
Differences between expected and actual experience (4,100) (43,215) - -
Changes of assumptions - 1,843 - -
Benefit payments, including refunds of member contributions (24,514) (25,651) (25,346) (29,268)
Net change in total OPEB liability 28,312 (16,089) 23,532 17,266
Total OPEB liability - beginning 500,683 516,772 493,240 475,974
Total OPEB liability - ending (a)528,995$ 500,683$ 516,772$ 493,240$
OPEB fiduciary net position
Contributions - employer 53,542$ 55,068$ 59,205$ 63,332$
Net investment income 11,264 16,640 18,590 18,770
Benefit payments, including refunds of member contributions (24,514) (25,651) (25,346) (29,268)
Administrative expense (157) (59) (358) (95)
Net change in plan fiduciary net position 40,135 45,998 52,091 52,739
Plan fiduciary net position - beginning 275,664 229,666 177,575 124,836
Plan fiduciary net position - ending (b)315,799 275,664 229,666 177,575
Plan net OPEB liability - ending (a) - (b)213,196$ 225,019$ 287,106$ 315,665$
Plan fiduciary net position as a percentage
of the total OPEB Liability 59.70%55.06%44.44%36.00%
Covered-employee payroll 2,046,974$ 1,903,385$ 1,978,669$ 1,802,043$
Plan net OPEB liability as a percentage
of covered-employee payroll 10.42%11.82%14.51%17.52%
* Fiscal Year 2017-18 was the first year of implementation; therefore, only four years of information are shown.
Note 6 - Schedule of Changes in the Net OPEB Liability and Related Ratios (Continued)
Last Ten Fiscal Years*
San Dieguito Water District Plan
132
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Fiscal Year 2020-21 2019-20 2018-19 2017-18
Actuarially determined contribution (ADC)1,151,134$ 1,117,605$ 958,415$ 930,499$
Contributions in relation to the ADC (1,157,839) (1,315,490) (1,269,129) (1,092,690)
Contribution deficiency (excess)(6,705)$ (197,885)$ (310,714)$ (162,191)$
Covered employee payroll 24,147,416$ 23,224,242$ 22,403,865$ 21,767,304$
Contributions as a percentage of covered
employee payroll 4.79%5.66%5.66%5.02%
Notes to Schedule
Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2020-21 were from the June 30, 2019 actuarial valuation report.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percentage of payroll over a closed rolling
15-year period
Asset valuation method Market value
Inflation 2.50% per annum
Payroll growth 2.75% per annum, in aggregate
Investment rate of return 7.00% per annum
City Plan
* Fiscal Year 2017-18 was the first year of implementation; therefore, only four years of information are shown.
Note 7 - Schedule of Contributions - OPEB
Last Ten Fiscal Years*
133
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2021
Fiscal Year 2020-21 2019-20 2018-19 2017-18
Actuarially determined contribution (ADC)48,689$ 48,200$ 53,291$ 52,780$
Contributions in relation to the ADC (55,006) (68,350) (66,983) (63,332)
Contribution deficiency (excess)(6,317)$ (20,150)$ (13,692)$ (10,552)$
Covered employee payroll 2,017,862$ 2,046,974$ 1,903,385$ 1,978,669$
Contributions as a percentage of covered
employee payroll 2.73%3.34%3.52%3.20%
Notes to Schedule
Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2020-21 were from the June 30, 2019 actuarial valuation report.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percentage of payroll over a closed rolling
15-year period
Asset valuation method Market value
Inflation 2.50% per annum
Payroll growth 2.75% per annum, in aggregate
Investment rate of return 7.00% per annum
San Dieguito Water District Plan
* Fiscal Year 2017-18 was the first year of implementation; therefore, only four years of information are shown.
Last Ten Fiscal Years*
Note 7 - Schedule of Contributions - OPEB (Continued)
134
SUPPLEMENTARY INFORMATION
135
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136
NON-MAJOR
GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS:
Grants and Housing -This fund is used to account for financial resources from state and federal grants that
are utilized to fund various City programs such as affordable housing and law enforcement.
Development Impact -This fund is used to account for development impact/mitigation fees that are collected
in connection with land use and construction applications.These monies are utilized to fund specified City
capital improvement projects.
Lighting and Landscaping -This fund is used to account for special assessments and certain restricted
property tax revenues collected from homeowners and businesses.These monies are utilized to fund
specified operational and maintenance costs related to common area landscaping,street lighting and park
maintenance.
DEBT SERVICE FUNDS:
City Debt Service -This fund is used to account for and report financial resources that are restricted,
committed, or assigned to expenditures for the payment of principal and interest on the City long-term debt.
Encinitas Public Financing Authority -This fund is used to account for and report financial resources that
are restricted,committed,or assigned to expenditures for the payment of principal and interest on the
Encinitas Public Financing Authority long-term debt.
137
City of Encinitas
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2021
Grants and Development Lighting and
Housing Impact Landscaping
ASSETS
Cash and investments 1,137,866$ 3,068,425$ 4,387,050$
Receivables 351,843 - 15,788
Interest receivable 4,101 21,674 11,883
Long-term receivable 194,466 229,616 -
Restricted cash and investments - - -
Total assets 1,688,276$ 3,319,715$ 4,414,721$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities 219,052$ -$ 261,888$
Due to other funds 209,252 - -
Unearned revenue 38,853 - -
Deposits and other liabilities - 22,247 -
Total liabilities 467,157 22,247 261,888
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 233,736 229,616 -
Total deferred inflows of resources 233,736 229,616 -
Fund Balances
Restricted 987,383 3,067,852 4,152,833
Total fund balances 987,383 3,067,852 4,152,833
Total liabilities, deferred inflows of
resources and fund balances 1,688,276$ 3,319,715$ 4,414,721$
(Continued)
Special Revenue
138
City of Encinitas
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2021
Total
Encinitas Public Other
City Financing Governmental
Debt Service Authority Funds
ASSETS
Cash and investments -$ -$ 8,593,341$
Receivables - - 367,631
Interest receivable - - 37,658
Long-term receivable - - 424,082
Restricted cash and investments - 14 14
Total assets -$ 14$ 9,422,726$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities -$ -$ 480,940$
Due to other funds - - 209,252
Unearned revenue - - 38,853
Deposits and other liabilities - - 22,247
Total liabilities - - 751,292
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - 463,352
Total deferred inflows of resources - - 463,352
Fund Balances
Restricted - 14 8,208,082
Total fund balances - 14 8,208,082
Total liabilities, deferred inflows of
resources and fund balances -$ 14$ 9,422,726$
(Concluded)
Debt Service
139
City of Encinitas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Non-Major Governmental Funds
For the Year Ended June 30, 2021
Grants and Development Lighting and
Housing Impact Landscaping
REVENUES:
Taxes and assessments 345,840$ -$ 2,255,944$
Intergovernmental 1,232,929 - -
Development impact fees - 1,088,887 -
Use of money and property 74,149 87,658 54,696
Other 221,633 - 3,952
Total revenues 1,874,551 1,176,545 2,314,592
EXPENDITURES:
Current:
General government 142,310 - -
Public safety 240,143 - -
Public works 596,461 - 517,603
Development services - planning 513,600 - -
Development services - engineering - - 723,536
Parks and recreation 394,344 - 981,299
Debt service:
Principal - - -
Interest and fiscal charges - - -
Total expenditures 1,886,858 - 2,222,438
REVENUES OVER
(UNDER) EXPENDITURES (12,307) 1,176,545 92,154
OTHER FINANCING SOURCES (USES):
Transfers in 304,609 405,747 37,696
Transfers out (613,546) (2,796,767) (130,000)
Total other financing sources (uses)(308,937) (2,391,020) (92,304)
NET CHANGE IN FUND BALANCES (321,244) (1,214,475) (150)
FUND BALANCES:
Beginning of year 1,308,627 4,282,327 4,152,983
End of year 987,383$ 3,067,852$ 4,152,833$
(Continued)
Special Revenue
140
City of Encinitas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)
Non-Major Governmental Funds
For the Year Ended June 30, 2021
Total
Encinitas Public Other
City Financing Governmental
Debt Service Authority Funds
REVENUES:
Taxes and assessments -$ -$ 2,601,784$
Intergovernmental - - 1,232,929
Development impact fees - - 1,088,887
Use of money and property - 31 216,534
Other - - 225,585
Total revenues - 31 5,365,719
EXPENDITURES:
Current:
General government - - 142,310
Public safety - - 240,143
Public works - - 1,114,064
Development services - planning - - 513,600
Development services - engineering - - 723,536
Parks and recreation - - 1,375,643
Debt service:
Principal 166,004 1,940,000 2,106,004
Interest and fiscal charges 17,553 1,593,618 1,611,171
Total expenditures 183,557 3,533,618 7,826,471
REVENUES OVER
(UNDER) EXPENDITURES (183,557) (3,533,587) (2,460,752)
OTHER FINANCING SOURCES (USES):
Transfers in 183,557 3,533,516 4,465,125
Transfers out - - (3,540,313)
Total other financing sources (uses)183,557 3,533,516 924,812
NET CHANGE IN FUND BALANCES - (71) (1,535,940)
FUND BALANCES:
Beginning of year - 85 9,744,022
End of year -$ 14$ 8,208,082$
Debt Service
141
City of Encinitas
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Grants and Housing Special Revenue Fund
For the Year Ended June 30, 2021
Final Actual Variance with
Budget Amounts Final Budget
REVENUES:
Taxes and assessments 347,325$ 345,840$ (1,485)$
Intergovernmental 1,366,404 1,232,929 (133,475)
Use of money and property 129,350 74,149 (55,201)
Other 238,083 221,633 (16,450)
Total revenues 2,081,162 1,874,551 (206,611)
EXPENDITURES:
Current:
General government 209,826 142,310 67,516
Public safety 339,381 240,143 99,238
Public works 629,503 596,461 33,042
Development services - planning 627,356 513,600 113,756
Parks and recreation 512,281 394,344 117,937
Capital Outlay 50,000 - 50,000
Total expenditures 2,368,347 1,886,858 481,489
REVENUES OVER
(UNDER) EXPENDITURES (287,185) (12,307) 274,878
OTHER FINANCING SOURCES (USES)
Transfers in 351,290 304,609 (46,681)
Transfers out (613,546) (613,546) -
Total other financing sources (uses)(262,256) (308,937) (46,681)
NET CHANGE IN FUND BALANCE (549,441)$ (321,244) 228,197$
FUND BALANCE:
Beginning of year 1,308,627
End of year 987,383$
142
City of Encinitas
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Development Impact Special Revenue Fund
For the Year Ended June 30, 2021
Final Actual Variance with
Budget Amounts Final Budget
REVENUES:
Development impact fees 1,213,806$ 1,088,887$ (124,919)$
Use of money and property 79,695 87,658 7,963
Total revenues 1,293,501 1,176,545 (116,956)
Expenditures:
Current:
General government - - -
Total expenditures - - -
REVENUES OVER
(UNDER) EXPENDITURES 1,293,501 1,176,545 (116,956)
OTHER FINANCING SOURCES (USES)
Transfers in 405,747 405,747 -
Transfers out (2,821,347) (2,796,767) 24,580
Total other financing sources (uses)(2,415,600) (2,391,020) 24,580
NET CHANGE IN FUND BALANCE (1,122,099)$ (1,214,475) (92,376)$
FUND BALANCE:
Beginning of year 4,282,327
End of year 3,067,852$
143
City of Encinitas
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Lighting and Landscaping Special Revenue Fund
For the Year Ended June 30, 2021
Final Actual Variance with
Budget Amounts Final Budget
REVENUES:
Taxes and assessments 2,203,034$ 2,255,944$ 52,910$
Use of money and property 61,251 54,696 (6,555)
Other 22,000 3,952 (18,048)
Total revenues 2,286,285 2,314,592 28,307
EXPENDITURES:
Current:
Public works 571,410 517,603 53,807
Development services - engineering 843,641 723,536 120,105
Parks and recreation 978,939 981,299 (2,360)
Total expenditures 2,393,990 2,222,438 171,552
REVENUES OVER
(UNDER) EXPENDITURES (107,705) 92,154 199,859
OTHER FINANCING SOURCES (USES)
Transfers in 37,141 37,696 555
Transfers out (130,000) (130,000) -
Total other financing sources (uses)(92,859) (92,304) 555
NET CHANGE IN FUND BALANCE (200,564)$ (150) 200,414$
FUND BALANCE:
Beginning of year 4,152,983
End of year 4,152,833$
144
Internal Service Funds
Internal Service Funds are used to finance and account for special activities and services performed by a
designated City department for other departments on a cost reimbursement basis.
Risk Management -This fund is used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the City,or to other governments,on a cost
reimbursement basis for risk management expenditures.
Wastewater Support -This fund is used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the City,or to other governments,on a cost
reimbursement basis for wastewater support expenditures.
Vehicle Maintenance -This fund is used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the City,or to other governments,on a cost
reimbursement basis for vehicle maintenance expenditures.
Vehicle Replacement -This fund is used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the City,or to other governments,on a cost
reimbursement basis for vehicle replacement expenditures.
145
City of Encinitas
Combining Statement of Net Position
All Internal Service Funds
June 30, 2021
Risk Wastewater Vehicle Vehicle
Management Support Maintenance Replacement Total
ASSETS
Cash and investments 6,475,158$ 83,442$ 39,917$ 275,291$ 6,873,808$
Accounts receivable 408 - - - 408
Inventory and prepaid items 79,770 - - - 79,770
Total current assets 6,555,336 83,442 39,917 275,291 6,953,986
Noncurrent assets:
Capital assets:
Utility, plant, vehicles, and equipment, net - - - 3,737,459 3,737,459
Total noncurrent assets - - - 3,737,459 3,737,459
Total assets 6,555,336 83,442 39,917 4,012,750 10,691,445
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension related items 57,343 80,574 41,827 - 179,744
Deferred OPEB related items 6,200 13,432 7,231 - 26,863
Total deferred outflows of resources 63,543 94,006 49,058 - 206,607
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 272,260 43,455 24,380 - 340,095
Due to other funds - - - 6,411 6,411
Current portion of capital leases payable - - - 191,162 191,162
Total current liabilities 272,260 43,455 24,380 197,573 537,668
Noncurrent liabilities:
Capital lease payable - - - 781,238 781,238
Net pension liability 273,946 384,924 199,819 - 858,689
Net OPEB liability 31,010 67,188 36,178 - 134,376
Total noncurrent liabilities 304,956 452,112 235,997 781,238 1,774,303
Total liabilities 577,216 495,567 260,377 978,811 2,311,971
DEFERRED INFLOWS OF RESOURCES
Deferred pension related items 799 1,122 582 - 2,503
Deferred OPEB related items 7,084 15,349 8,265 - 30,698
Total deferred inflows of resources 7,883 16,471 8,847 - 33,201
NET POSITION
Net investment in capital assets - - - 2,765,059 2,765,059
Unrestricted 6,033,780 (334,590) (180,249) 268,880 5,787,821
Total net position 6,033,780$ (334,590)$ (180,249)$ 3,033,939$ 8,552,880$
146
City of Encinitas
Combining Statement of Revenues, Expenses, and Changes in Net Position
All Internal Service Funds
For the Year Ended June 30, 2021
Risk Wastewater Vehicle Vehicle
Management Support Maintenance Replacement Total
OPERATING REVENUES:
Interfund revenues 1,260,867$ 979,839$ 567,625$ -$ 2,808,331$
Other revenues 504,871 - - 201,743 706,614
Total operating revenues 1,765,738 979,839 567,625 201,743 3,514,945
OPERATING EXPENSES:
Operational support services 700,229 101,660 196,346 972 999,207
Administrative support 533,666 748,625 371,282 - 1,653,573
Insurance and claims 2,227,202 - - - 2,227,202
Depreciation of capital assets - - - 650,991 650,991
Total operating expenses 3,461,097 850,285 567,628 651,963 5,530,973
Operating income (loss)(1,695,359) 129,554 (3) (450,220) (2,016,028)
NONOPERATING REVENUES:
Gain (loss) on disposal of capital assets - - - 538 538
Interest expense - - - (17,809) (17,809)
Total nonoperating revenues - - - (17,271) (17,271)
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (1,695,359) 129,554 (3) (467,491) (2,033,299)
Transfers in 1,720,768 2,448 - 132,000 1,855,216
Transfers out - (132,000) - (1,000,000) (1,132,000)
Total capital contributions and transfers 1,720,768 (129,552) - (868,000) 723,216
Net change in net position 25,409 2 (3) (1,335,491) (1,310,083)
NET POSITION:
Beginning of year 6,008,371 (334,592) (180,246) 4,369,430 9,862,963
End of year 6,033,780$ (334,590)$ (180,249)$ 3,033,939$ 8,552,880$
147
City of Encinitas
Combining Statement of Cash Flows
All Internal Service Funds
For the Year Ended June 30 , 2021
Risk Wastewater Vehicle Vehicle
Management Support Maintenance Replacement Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from users 1,765,330$ 979,839$ 567,625$ 201,743$ 3,514,537$
Payments to employees (491,027) (705,482) (353,603) - (1,550,112)
Payments to suppliers and vendors (2,848,660) (75,345) (190,908) (454,038) (3,568,951)
Net cash provided by (used in) operating activities (1,574,357) 199,012 23,114 (252,295) (1,604,526)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition of capital assets - - - (77,319) (77,319)
Principal payment on long-term debt - - - (138,487) (138,487)
Interest payments on capital leases - - - (17,809) (17,809)
Proceeds from capital lease 737,623 737,623
Proceeds from sale of capital assets - - - 538 538
Net cash (used in) capital and related financing activities - - - 504,546 504,546
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in 1,720,768 2,448 - 132,000 1,855,216
Transfers (out)- (132,000) - (1,000,000) (1,132,000)
Net cash provided by (used in) noncapital financing activities 1,720,768 (129,552) - (868,000) 723,216
Net increase (decrease) in cash and cash equivalents 146,411 69,460 23,114 (615,749) (376,764)
CASH AND CASH EQUIVALENTS:
Beginning of year 6,328,747 13,982 16,803 891,040 7,250,572
End of year 6,475,158$ 83,442$ 39,917$ 275,291$ 6,873,808$
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss)(1,695,359)$ 129,554$ (3)$ (450,220)$ (2,016,028)$
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation - - - 650,991 650,991
Changes in operating assets and liabilities:
Accounts receivable (408) - - - (408)
Inventory and prepaid items (19,196) - - - (19,196)
OPEB-related deferred outflows (1,514) (935) 580 - (1,869)
Pension-related deferred outflows (7,413) (7,979) (4,244) - (19,636)
Accounts payable and accrued liabilities 100,940 29,473 7,578 (174,630) (36,639)
Due to other funds - - - (278,436) (278,436)
Net OPEB liability 6,851 2,764 (4,087) - 5,528
Net pension liability 49,190 58,140 30,645 - 137,975
OPEB-related deferred inflows 1,983 1,746 (237) - 3,492
Pension-related deferred inflows (9,431) (13,751) (7,118) - (30,300)
Total adjustments 121,002 69,458 23,117 197,925 411,502
Net cash provided by (used in) operating activities (1,574,357)$ 199,012$ 23,114$ (252,295)$ (1,604,526)$
There were no non-cash capital and related financing activities.
148
City of Encinitas Statistical Section
This section of the City of Encinitas' Comprehensive Annual Financial Report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, required supplementary and
supplementary information says about the City's overall financial health.
Contents Page
Financial Trends - These schedules contain trend information to help the reader understand how the
City's financial performance and well-being have changed over time.
1 Net Position by Components 150
2 Changes in Net Position 152
3 Fund Balances of Governmental Funds 156
4 Changes in Fund Balances of Governmental Funds 158
Revenue Capacity - These schedules contain information to help the reader assess the City's most
significant local revenue source which is property tax.
5 Assessed Value of Taxable Property 160
6 Principal Property Taxpayers 161
7 Property Tax Levies and Collections 163
8 Direct and Overlapping Property Tax Rates 164-167
Debt Capacity - 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.
9 Ratios of Outstanding Debt by Type 168-169
10 Ratios of General Bonded Debt Outstanding 170
11 Schedule of Direct and Overlapping Bonded Debt 171
12 Legal Debt Margin Information 172
13 Historical Debt Service Coverage 174
Demographics and Economic Information - These schedules offer demographics and economic indicators
to help the reader understand the environment within which the City's financial activities take place.
14 Demographic and Economic Statistics 176
15 General Governmental Tax Revenue by Source 178
16 Taxable Sales by Business Type 179
17 Principal Employers 180
Operating Information - 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.
18 Full-time and Part-Time Employees by Function 181
19 Operating Indicators by Function 182
20 Capital Asset Statistics by Function 184
21 Cardiff Sanitary Division - Summary of Operational Data 188-190
21 San Dieguito Water District - Summary of Operational Data 192-195
Sources: Unless otherwise noted, the information in these schedules was derived from the Annual Comprehensive
Financial Reports for the relevant year.
(Unaudited)
149
City of Encinitas
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2021 2020 2019 2018 2017
Government activities:
Net investment in capital assets 190,035,875$ 181,288,734$ 172,580,765$ 169,553,838$ 165,759,601$
Restricted 19,467,205 23,031,942 20,997,390 19,779,315 19,867,542
Unrestricted (1,132,294)528,847 7,357,189 1,963,535 9,510,235
Total governmental activities net position 208,370,786 204,849,523 200,935,344 191,296,688 195,137,378
Business-type activities:
Net investment in capital assets 42,615,968 38,060,921 38,074,788 36,547,324 44,977,544
Restricted 386,507 390,925 411,895 421,938 20,237
Unrestricted 106,620,721 105,330,676 99,808,547 95,173,238 79,286,895
Total business-type activities net position 149,623,196 143,782,522 138,295,230 132,142,500 124,284,676
Primary government:
Net investment in capital assets 232,651,843 219,349,655 210,655,553 206,101,162 210,737,145
Restricted 19,853,712 23,422,867 21,409,285 20,201,253 19,887,779
Unrestricted 105,488,427 105,859,523 107,165,736 97,136,773 88,797,130
Total primary government net position 357,993,982$ 348,632,045$ 339,230,574 323,439,188$ 319,422,054$
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
Fiscal Years
150
City of Encinitas
Net Position by Component (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2016 2015 2014 2013 2012
Government activities:
Net investment in capital assets 162,923,350$ 157,304,041$ 161,902,991$ 157,395,370$ 153,516,469$
Restricted 30,996,309 18,741,022 17,363,704 9,980,695 -
Unrestricted (580,736) 9,229,896 38,446,880 37,646,551 43,857,634
Total governmental activities net position 193,338,923 185,274,959 217,713,575 205,022,616 197,374,103
Business-type activities:
Net investment in capital assets 42,501,264 39,806,764 54,362,661 32,247,941 25,155,766
Restricted 1,377,006 - 1,039,739 - -
Unrestricted 75,512,969 75,781,002 62,426,804 79,816,600 83,232,015
Total business-type activities net position 119,391,239 115,587,766 117,829,204 112,064,541 108,387,781
Primary government:
Net investment in capital assets 205,424,614 197,110,805 216,265,652 189,643,311 178,672,235
Restricted 32,373,315 18,741,022 18,403,443 9,980,695 -
Unrestricted 74,932,233 85,010,898 100,873,684 117,463,151 127,089,649
Total primary government net position 312,730,162$ 300,862,725$ 335,542,779$ 317,087,157$ 305,761,884$
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
Fiscal Years
151
City of Encinitas
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2021 2020 2019 2018 2017
Expenses:
Government activities:
General government 18,698,862$ 17,335,001$ 15,280,238$ 14,403,144$ 11,737,634$
Public safety 37,494,513 35,791,015 33,160,544 30,762,894 29,437,181
Public works 11,444,920 11,859,286 9,166,709 8,325,467 9,205,570
Planning 7,360,378 7,027,696 6,878,364 8,741,589 6,935,754
Engineering services 9,200,037 6,309,896 6,762,441 7,492,540 8,918,281
Parks and recreation 9,247,192 10,079,123 9,809,964 8,429,448 7,046,255
Interest and fiscal charges on long-term debt 1,488,333 1,569,705 1,655,750 1,755,100 2,237,069
Total governmental activities expenses 94,934,235 89,971,722 82,714,010 79,910,182 75,517,744
Business-type activities:
Cardiff Sanitary Division 3,075,590 3,093,405 3,548,203 3,086,434 3,308,454
San Dieguito W ater District 17,738,041 16,503,660 16,615,687 13,800,288 13,970,919
Encinitas Sanitary Division 2,751,591 3,271,260 2,044,676 1,652,061 2,037,116
Affordable Housing 1,797,801 1,676,260 1,576,162 1,464,181 1,449,917
Recreation Programs - - - - -
Total business-type activities expenses 25,363,023 24,544,585 23,784,728 20,002,964 20,766,406
Total primary government expenses 120,297,258 114,516,307 106,498,738 99,913,146 96,284,150
Program revenues:
Government activities:
Charges for services:
General government 1,361,790 1,804,550 1,239,815 1,815,086 1,675,799
Public safety 2,292,593 1,521,745 2,075,725 1,421,393 1,148,567
Public works 105,811 1,776 57,786 394,647 65,746
Planning and building 3,434,081 3,417,094 2,936,898 3,262,604 2,954,523
Engineering services 457,981 970,837 1,782,402 1,874,562 1,143,830
Parks and recreation 759,536 1,029,655 1,310,426 1,405,704 1,796,918
Operating grants and contributions 6,112,721 4,401,599 4,421,588 3,253,127 3,419,730
Capital grants and contributions 6,897,649 6,784,821 6,626,283 4,851,823 4,407,963
Total governmental activities program revenues 21,422,162 19,932,077 20,450,923 18,278,946 16,613,076
Business-type activities:
Charges for services:
Cardiff Sanitary Division 5,048,111 5,046,841 4,937,942 4,885,227 4,788,884
San Dieguito W ater District 19,037,114 16,835,266 15,727,590 16,852,732 14,851,977
Encinitas Sanitary Division 2,759,121 2,744,193 2,698,745 2,711,075 2,819,006
Affordable Housing 329,678 270,931 260,848 225,468 213,124
Recreation Programs - - - - -
Operating grants and contributions 1,367,154 1,246,133 1,142,424 1,093,800 1,099,366
Capital grants and contributions 550,875 593,179 728,700 560,651 736,370
Total business-type activities program revenues 29,092,053 26,736,543 25,496,249 26,328,953 24,508,727
Total primary government program revenues 50,514,215 46,668,620 45,947,172 44,607,899 41,121,803
Governmental activities (73,512,073) (70,039,645) (62,263,087) (61,631,236) (58,904,668)
Business-type activities 3,729,030 2,191,958 1,711,521 6,325,989 3,742,321
Total net revenue (expense)(69,783,043)$ (67,847,687)$(60,551,566)$ (55,305,247)$(55,162,347)$
Fiscal Years
152
City of Encinitas
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2016 2015 2014 2013 2012
Expenses:
Government activities:
General government 11,750,737$ 10,810,882$ 9,549,338$ 10,616,440$ 12,064,527$
Public safety 27,255,755 25,762,703 25,146,843 24,629,613 23,062,746
Public works 11,743,123 11,565,315 10,239,746 10,851,147 8,560,330
Planning 7,255,460 6,550,992 5,853,995 4,353,831 5,008,179
Engineering services 4,591,315 6,253,352 3,988,720 3,813,678 5,817,932
Parks and recreation 6,778,769 5,205,986 4,735,864 5,542,550 5,578,716
Interest and fiscal charges on long-term debt 2,494,815 2,311,944 1,913,349 1,932,904 1,811,714
Total governmental activities expenses 71,869,974 68,461,174 61,427,855 61,740,163 61,904,144
Business-type activities:
Cardiff Sanitary Division 3,857,531 4,262,565 2,922,446 3,373,704 3,385,439
San Dieguito W ater District 13,462,935 15,005,767 13,552,862 12,200,431 12,448,911
Encinitas Sanitary Division 2,306,540 1,731,770 2,438,692 1,983,786 1,719,176
Affordable Housing 1,440,124 1,408,226 1,405,225 1,499,863 1,492,811
Recreation Programs - 1,331,565 1,300,555 1,153,840 1,187,788
Total business-type activities expenses 21,067,130 23,739,893 21,619,780 20,211,624 20,234,125
Total primary government expenses 92,937,104 92,201,067 83,047,635 81,951,787 82,138,269
Program revenues:
Government activities:
Charges for services:
General government 1,594,277 1,629,857 1,800,630 1,775,756 1,789,943
Public safety 1,009,713 160,178 202,220 91,495 99,047
Public works 107,279 759,918 - - -
Planning and building 2,800,413 2,737,225 2,874,894 1,894,785 2,155,076
Engineering services 1,367,902 1,055,311 1,075,885 955,986 736,786
Parks and recreation 1,741,619 46,846 35,791 39,946 14,580
Operating grants and contributions 3,349,186 3,878,422 4,345,931 3,759,864 5,896,502
Capital grants and contributions 5,409,098 4,126,194 8,756,281 6,462,979 3,626,279
Total governmental activities program revenues 17,379,487 14,393,951 19,091,632 14,980,811 14,318,213
Business-type activities:
Charges for services:
Cardiff Sanitary Division 4,761,486 4,528,551 4,605,867 4,755,573 4,970,662
San Dieguito W ater District 14,684,387 14,785,858 15,297,718 13,687,156 12,922,922
Encinitas Sanitary Division 2,855,690 2,841,235 2,879,605 2,933,319 2,897,592
Affordable Housing 218,148 247,349 216,728 214,115 214,503
Recreation Programs - 1,321,471 1,269,179 1,059,009 1,273,007
Operating grants and contributions 1,068,549 1,061,698 994,607 1,103,639 1,105,851
Capital grants and contributions 681,412 483,425 1,066,769 1,003,057 460,688
Total business-type activities program revenues 24,269,672 25,269,587 26,330,473 24,755,868 23,845,225
Total primary government program revenues 41,649,159 39,663,538 45,422,105 39,736,679 38,163,438
Governmental activities (54,490,487) (54,067,223) (42,336,223) (46,759,352) (47,585,931)
Business-type activities 3,202,542 1,529,694 4,710,693 4,544,244 3,611,100
Total net revenue (expense)(51,287,945)$(52,537,529)$(37,625,530)$(42,215,108)$(43,974,831)$
Fiscal Years
153
City of Encinitas
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2021 2020 2019 2018 2017
General Revenues and Other Changes in Net Position:
Governmental activities:
Taxes
Property and documentary transfer taxes 54,839,785$ 51,251,719$ 49,237,265$ 46,311,814$ 43,494,220$
Sales taxes 15,453,648 13,744,880 13,694,647 13,252,053 12,549,609
Transient occupancy taxes 2,823,055 2,383,060 2,775,771 2,562,484 2,216,145
Franchise taxes 2,599,810 2,539,090 2,571,367 2,587,443 2,545,854
Intergovernmental revenues 99,985 182,449 185,380 97,163 251,919
Investment income 44,858 3,030,295 2,613,728 958,172 770,634
Other general revenues 1,162,877 804,984 827,490 452,275 961,475
Gain/(Loss) on sale of assets - 36,013 12,739 61,400 1,937
Impairment loss on capital assets - - - - (2,088,668)
Transfers 9,318 (18,666) (16,644) 20,018 -
Total governmental activities 77,033,336 73,953,824 71,901,743 66,302,822 60,703,125
Business-type activities:
Property taxes 1,227,621 1,159,681 1,110,248 1,030,168 959,873
Intergovernmental-unrestricted - - - - (31,828)
Investment income 89,227 1,716,759 1,393,446 (446,745) 6,925
Other general revenues 804,114 400,228 1,306,547 1,247,955 -
Gain/(Loss) on sale of assets - - 614,324 8,285 216,146
Transfers (9,318) 18,666 16,644 (20,018) -
Total business-type activities 2,111,644 3,295,334 4,441,209 1,819,645 1,151,116
Total primary government 79,144,980 77,249,158 76,342,952 68,122,467 61,854,241
Changes in Net Position
Government activities 3,521,263 3,914,179 9,638,656 4,671,586 1,798,457
Business-type activities 5,840,674 5,487,292 6,152,730 8,145,634 4,893,437
Total primary government 9,361,937$ 9,401,471$ 15,791,386$ 12,817,220$ 6,691,894$
The City reports recreation programs as a business-type activity beginning in Fiscal Year 2011-12.
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
Fiscal Years
154
City of Encinitas
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2016 2015 2014 2013 2012
General Revenues and Other Changes in Net Position:
Governmental activities:
Taxes
Property and documentary transfer taxes 41,210,485$ 38,508,558$ 36,414,507$ 34,974,578$ 32,788,129$
Sales taxes 14,166,771 12,569,119 12,067,360 11,585,145 10,613,188
Transient occupancy taxes 2,018,024 1,828,116 1,570,459 1,491,998 1,413,926
Franchise taxes 2,794,144 2,761,335 2,614,844 2,323,616 2,144,162
Intergovernmental revenues 388,876 814,337 479,026 541,079 635,097
Investment income 611,350 880,989 705,849 552,512 387,066
Other general revenues 956,824 1,567,168 1,257,002 1,596,026 1,780,543
Gain/(Loss) on sale of assets 8,865 107,177 (48,320) - -
Impairment loss on capital assets - - - - -
Transfers 399,112 (36,068) (33,545) 1,809,656 (668,877)
Total governmental activities 62,554,451 59,000,731 55,027,182 54,874,610 49,093,234
Business-type activities:
Property taxes 906,106 834,994 787,242 749,378 725,551
Intergovernmental-unrestricted - - - 189,676 -
Investment income (63,690) (60,169) 357,357 3,118 188,259
Other general revenues 153,667 63,768 63,768 - -
Gain/(Loss) on sale of assets 4,010 18,085 (187,942) - -
Transfers (399,112) 36,068 33,545 (1,809,656) 668,877
Total business-type activities 600,981 892,746 1,053,970 (867,484) 1,582,687
Total primary government 63,155,432 59,893,477 56,081,152 54,007,126 50,675,921
Changes in Net Position
Government activities 8,063,964 4,933,508 12,690,959 8,115,258 1,507,303
Business-type activities 3,803,523 2,422,440 5,764,663 3,676,760 5,193,787
Total primary government 11,867,487$ 7,355,948$ 18,455,622$ 11,792,018$ 6,701,090$
The City reports recreation programs as a business-type activity beginning in Fiscal Year 2011-12.
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
Fiscal Years
155
City of Encinitas
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2021 2020 2019 2018 2017
General fund:
Nonspendable 737,115$ 287,832$ 266,828$ 267,203$ 727,094$
Restricted 172,708 167,265 383 251 1,472,372
Committed 16,998,291 16,208,039 15,545,889 14,691,792 13,937,399
Assigned - - - - -
Unassigned 9,255,171 10,542,872 8,609,231 12,334,212 9,514,727
Total general fund 27,163,285 27,206,008 24,422,331 27,293,458 25,651,592
All other governmental funds:
Nonspendable - - - - 296,234
Restricted 26,434,867 36,105,367 36,435,142 34,724,312 30,282,525
Committed 19,920,832 18,352,366 24,412,850 17,760,602 18,998,215
Assigned - - - - -
Unassigned (7,140,370) (13,240,690) (15,438,135) (14,945,248) (12,183,589)
Total all other governmental funds 39,215,329 41,217,043 45,409,857 37,539,666 37,393,385
Total all governmental funds 66,378,614$ 68,423,051$ 69,832,188$ 64,833,124$ 63,044,977$
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
Fiscal Years
156
City of Encinitas
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2016 2015 2014 2013 2012
General fund:
Nonspendable 1,109,424$ 1,535,601$ 2,052,250$ 1,980,075$ 2,868,533$
Restricted - 3,009,269 4,079 7,996,400 -
Committed - 8,266,796 8,136,886 9,847,719 19,371,624
Assigned - 561,762 561,762 561,762 -
Unassigned 31,775,120 28,029,019 25,151,131 21,160,822 17,964,935
Total general fund 32,884,544 41,402,447 35,906,108 41,546,778 40,205,092
All other governmental funds:
Nonspendable 287,756 - 1,565 - -
Restricted 4,305,652 18,741,022 17,358,060 13,036,985 13,471,421
Committed 1,626,219 - - - -
Assigned 24,776,682 - - 2,135,100 2,169,209
Unassigned - - - - -
Total all other governmental funds 30,996,309 18,741,022 17,359,625 15,172,085 15,640,630
Total all governmental funds 63,880,853$ 60,143,469$ 53,265,733$ 56,718,863$ 55,845,722$
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
Fiscal Years
157
City of Encinitas
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2021 2020 2019 2018 2017
Revenues:
Taxes and assessments 76,821,095$ 71,064,561$ 69,403,416$ 65,845,166$ 61,934,421$
Intergovernmental 11,565,263 9,208,454 7,161,806 6,966,193 6,436,599
Charges for services 5,862,696 6,629,818 7,383,043 7,280,374 6,688,958
Fines, forfeitures, and penalties 232,873 655,032 794,237 704,216 850,153
Use of money and property 577,180 3,729,566 3,437,985 1,126,652 1,285,049
Other 4,143,952 3,750,230 3,089,553 2,566,551 2,215,452
Total Revenues 99,203,059 95,037,661 91,270,040 84,489,152 79,410,632
Expenditures:
Current:
General government 14,533,052 13,358,381 12,783,602 12,213,808 10,017,430
Public safety 34,619,312 32,928,307 31,494,405 29,478,104 27,724,959
Public works 7,360,360 7,392,741 5,875,143 5,033,316 6,351,537
Planning and building 6,939,408 6,619,723 6,570,840 6,017,914 5,110,298
Engineering services 3,761,366 3,324,903 3,851,316 3,504,336 4,368,601
Parks and recreation 7,237,778 7,959,300 7,954,529 7,879,881 6,610,308
Capital outlay 22,365,147 18,749,583 11,925,637 12,933,995 12,230,552
Debt service:
Principal 2,106,004 2,025,045 1,949,298 2,128,758 2,853,417
Interest and fiscal charges 1,611,171 1,695,251 1,774,333 1,899,328 2,077,770
Bond issuance costs - - - -
Total expenditures 100,533,598 94,053,234 84,179,103 81,089,440 77,344,872
Excess (deficiency) of revenues
over (under) expenditures (1,330,539)984,427 7,090,937 3,399,712 2,065,760
Other Financing Sources (Uses):
Transfers in 40,522,780 20,729,350 25,249,787 30,412,724 35,159,839
Transfers out (41,236,678)(23,122,914)(27,341,660)(32,024,289)(36,650,845)
Proceeds from capital lease - - - - -
Proceeds from sale of property - - - - -
Issuance of debt - - - - 11,955,000
Premium on debt - - - - 1,360,284
Deposit to escrow for bond refunding - - - - (14,725,914)
Bond discounts - - - - -
Total other financing sources (uses)(713,898)(2,393,564)(2,091,873)(1,611,565)(2,901,636)
Net change in fund balances (2,044,437)$ (1,409,137)$ 4,999,064$ 1,788,147$ (835,876)$
Debt service as a percentage of
noncapital expenditures 4.3%4.6%4.8%5.4%6.9%
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
Fiscal Years
158
City of Encinitas
Changes in Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2016 2015 2014 2013 2012
Revenues:
Taxes and assessments 61,325,308$ 56,825,628$ 53,830,193$ 51,528,542$ 49,089,142$
Intergovernmental 6,689,475 7,022,485 5,025,480 8,520,220 6,537,855
Charges for services 6,585,518 5,315,721 5,479,847 4,450,756 4,406,737
Fines, forfeitures, and penalties 889,388 802,936 632,776 611,029 657,364
Use of money and property 1,222,730 899,807 724,310 572,481 639,676
Other 2,804,043 2,456,996 3,654,621 2,141,439 2,715,266
Total Revenues 79,516,462 73,323,573 69,347,227 67,824,467 64,046,040
Expenditures:
Current:
General government 9,288,227 9,362,214 9,109,412 9,430,487 9,277,443
Public safety 26,976,136 24,902,920 24,164,979 23,655,367 22,853,121
Public works 6,305,340 6,682,424 6,281,800 6,057,646 5,843,228
Planning and building 5,159,777 5,082,589 4,716,315 4,238,882 4,655,501
Engineering services 4,298,563 4,162,630 3,949,352 3,716,994 3,804,813
Parks and recreation 6,366,337 5,091,224 4,672,683 4,377,047 4,333,303
Capital outlay 10,799,083 18,440,036 14,548,894 18,836,006 12,803,379
Debt service:
Principal 2,783,268 2,730,686 2,661,976 2,295,614 2,359,932
Interest and fiscal charges 2,372,231 2,170,164 1,937,144 2,050,068 1,872,773
Bond issuance costs - - - - -
Total expenditures 74,348,962 78,624,887 72,042,555 74,658,111 67,803,493
Excess (deficiency) of revenues
over (under) expenditures 5,167,500 (5,301,314)(2,695,328)(6,833,644)(3,757,453)
Other Financing Sources (Uses):
Transfers in 44,550,246 24,514,293 20,570,966 23,363,240 17,661,946
Transfers out (45,577,444)(25,509,616)(21,328,768)(24,208,239)(18,354,656)
Proceeds from capital lease - - - 555,384 599,639
Proceeds from sale of property 15,645,000 13,174,373 - 7,865,000 -
Issuance of debt 115 - - - -
Premium on debt 772,212 - - 131,400 -
Deposit to escrow for bond refunding (16,820,243) - - - -
Bond discounts - - - - -
Total other financing sources (uses)(1,430,114)12,179,050 (757,802)7,706,784 (93,071)
Net change in fund balances 3,737,386$ 6,877,736$ (3,453,130)$ 873,140$ (3,850,524)$
Debt service as a percentage of
noncapital expenditures 7.5%7.6%7.8%7.3%7.2%
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
Fiscal Years
159
City of Encinitas
As sessed Value of Taxable Property
Last Ten Fiscal Years
(In thousands of dollars)
Fiscal Year
Ended June 30
Residential
Property
Commercial
Property
Industrial
Property
All Other
Property (1)
Total Net
Taxable
Assessed Value
(2)
Total Direct
Tax Rate % (3)
2021 15,834,152$ 1,704,972$ 42,250$ 501,200$ 18,082,574$ 0.23867%
2020 15,019,491 1,624,044 44,910 471,498 17,159,943 0.23819%
2019 14,191,006 1,546,386 44,994 590,531 16,372,917 0.23769%
2018 13,453,667 1,436,502 42,618 433,992 15,366,779 0.23749%
2017 12,622,536 1,390,398 41,805 417,474 14,472,213 0.24019%
2016 11,864,809 1,359,004 41,187 437,972 13,702,972 0.23978%
2015 11,073,358 1,323,412 39,665 433,569 12,870,004 0.24534%
2014 10,393,910 1,300,287 39,501 413,663 12,147,361 0.24570%
2013 10,030,357 1,247,785 37,766 408,020 11,723,928 0.23974%
2012 9,886,681 1,154,923 34,944 421,308 11,497,856 0.23866%
(1) All Other Property includes the following categories: dry farm, institutional, irrigated, recreational, vacant land,
exempt and unsecured properties.
(2) The "total net taxable assessed value" is net of tax-exempt property. Homeowners' exemptions are not included
in the totals shown.
(3) The total direct tax rate is the City's proportionate share of Proposition 13 property taxes collected within the tax area.
Source: HdL Companies
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Ta xable Assessed Value
(In thousands)
Residential
Commercial
Industrial
Fiscal Years
160
City of Encinitas
Principal Property Taxpayers
Current Fiscal Year and Nine Years Ago
Taxable % of Total Taxable % of Total
Assessed City Assessed Assessed City Assessed
Secured Value Rank Secure Value Secured Value Rank Secure Value
TRC Encinitas Village LLC 104,552,344$ 1 0.58%-$ - -
Collwood Pines Apartments LP 83,447,246 2 0.47%54,972,120 2 0.48%
Belmont Village LP 61,864,192 3 0.35%29,255,866 8 0.25%
Pacifico Encinitas Apartment Home LP 55,016,352 4 0.31%- - -
Encinitas Town Center Association LLC 40,440,758 5 0.23%45,031,266 4 0.39%
NCHC 3 LLC 38,186,693 6 0.21%- - -
Weingarten Nostat Inc 37,460,820 7 0.21%- - -
Encinitas MarketPlace LLC 33,050,550 8 0.18%- - -
Home Depot USA Inc.32,487,722 9 0.18%28,374,005 10 0.25%
RPG Pacifica Station LLC 30,125,718 10 0.17%- - -
Encinitas Beach Hotel Venture LLC 28,740,000 11 0.16%- - -
S S L Landlord LLC 26,943,911 12 0.15%21,647,020 12 0.19%
Mission Ridge LLC 26,291,662 13 0.15%- - -
Vons Companies Inc.25,522,184 14 0.14%- - -
RAF Pacifica Encinitas LLC 21,879,000 15 0.12%- - -
Quail Pointe Apartment Homes LP 21,848,701 16 0.12%15,010,089 19 0.13%
Sterling Family Trust 20,283,365 17 0.11%17,226,857 15 0.15%
Paul H Meardon Trust 20,132,898 18 0.11%- - -
Plenc El Camino LLC 19,957,018 19 0.11%16,888,954 16 0.15%
Los Angeles Fitness Int'l LLC 19,946,888 20 0.11%- - -
Quail Meadows Properties LLC 19,682,437 21 0.11%- - -
Cardiff Town Center LLC 19,556,365 22 0.11%- - -
Keith B. and Sara S. Harrison 16,782,434 23 0.09%13,448,430 23 0.12%
Camino Village LLC 16,651,689 24 0.09%- - -
Essex Heights LLC 16,589,704 25 0.09%
Scripps Health - - 76,363,047 1 0.66%
James P. Garraphy - - 46,467,461 3 0.40%
Terramar Retail Centers LLC - - 35,623,212 5 0.31%
North Coast Health Center LLC - - 32,409,699 6 0.28%
WRI El Camino LP - - 31,977,500 7 0.28%
PK III Encinitas Marketplace LP - - 28,600,000 9 0.25%
Urschel Laboratories Inc.- - 22,443,243 11 0.20%
Lofts at Moonlight Beach LLC - - 20,107,555 13 0.17%
Encinitas Plaza LLC - - 17,367,711 14 0.15%
Hughes Encinitas Limited - - 16,612,808 17 0.14%
Golden Eagle Annuity Investment LP - - 16,120,480 18 0.14%
Encinitas Terraces LLC - - 14,128,780 20 0.12%
Bellflower Capital LP - - 13,759,223 21 0.12%
North Coast Business Park - - 13,514,314 22 0.12%
ARV Assisted Living Inc - - 13,000,000 24 0.11%
SDCC Properties - - 13,000,000 24 0.11%
837,440,651$ 4.68%653,349,640$ 5.68%
Source: HdL Companies
Taxpayer
2021 2012
161
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162
City of Encinitas
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Taxes Levied Collections
Year Ended for the Percent in Subsequent Percentage of
June 30 Fiscal Year Amount of Levy Years Amount Levy
2021 59,267,005$ 57,955,925$ 97.79%N/A 57,955,925 97.79%
2020 55,190,058 54,143,122 98.10%548,636 54,691,758 99.10%
2019 53,427,075 52,652,248 98.55%540,612 53,192,860 99.56%
2018 50,804,445 50,172,791 98.76%171,827 50,344,618 99.09%
2017 48,540,436 47,871,961 98.62%330,704 48,202,665 99.30%
2016 34,443,972 33,961,174 98.60%235,730 34,196,904 99.28%
2015 32,251,814 31,755,994 98.46%168,077 31,924,071 98.98%
2014 30,550,301 30,009,574 98.23%133,208 30,142,782 98.67%
2013 29,207,237 28,712,036 98.30%157,287 28,869,323 98.84%
2012 28,100,611 27,540,858 98.01%238,418 27,779,276 98.86%
2011 27,541,487 26,888,921 97.63%#VALUE!#VALUE!
Source: County of San Diego Auditor and Controller: Property Tax Apportionment
Total Collections to Date
Collected within the
Fiscal Year of Levy
163
City of Encinitas
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
2021 2020 2019 2018 2017
%%%%%
City of Encinitas Basic Rate 0.23867 0.23819 0.23769 0.23695 0.23644
City of Encinitas Total Direct Rate (1)0.23867 0.23819 0.23769 0.23695 0.23644
Overlapping Rates: (2)
City of Encinitas 0.24020 0.24020 0.24020 0.24020 0.24020
Encinitas Landscape & Lighting District 0.02100 0.02100 0.02100 0.02100 0.02100
Autistic Pupils Minors Elementary 0.00000 0.00000 0.00000 0.00000 0.00000
Autistic Pupils Minors High 0.00000 0.00000 0.00000 0.00000 0.00000
Cardiff, Encinitas Elementary 0.24870 0.24870 0.24870 0.24870 0.24870
Children's Institutions Tuition 0.00107 0.00107 0.00107 0.00107 0.00107
County General 0.08020 0.08020 0.08020 0.08020 0.08020
County Library 0.01969 0.01969 0.01969 0.01969 0.01969
County School Service 0.00643 0.00643 0.00643 0.00643 0.00643
County School Service-Capital Outlay 0.00161 0.00161 0.00161 0.00161 0.00161
County Service Area No. 17 0.00251 0.00251 0.00251 0.00251 0.00251
CW A San Dieguito W ater District, OMW D 0.02510 0.02510 0.02510 0.02510 0.02510
Development Centers for Handicapped Elementary 0.00000 0.00000 0.00000 0.00000 0.00000
Development Centers for Handicapped High 0.00000 0.00000 0.00000 0.00000 0.00000
Educable Mentally Retarded Minors 0.00161 0.00161 0.00161 0.00161 0.00161
Educational Revenue Augmentation Fund 0.08620 0.08620 0.08620 0.08620 0.08620
Mira Costa Community College 0.08150 0.08150 0.08150 0.08150 0.08150
Physically Handicapped Minors Elementary 0.00268 0.00268 0.00268 0.00268 0.00268
Physically Handicapped Minors High 0.00268 0.00268 0.00268 0.00268 0.00268
Regional Occupational Centers 0.00375 0.00375 0.00375 0.00375 0.00375
San Dieguito Union High 0.13610 0.13610 0.13610 0.13610 0.13610
San Dieguito W ater District 0.03590 0.03590 0.03590 0.03590 0.03590
Trainable Mentally Retarded Minors Elementary 0.00161 0.00161 0.00161 0.00161 0.00161
Trainable Mentally Retarded Minors High 0.00161 0.00161 0.00161 0.00161 0.00161
Oceanside (19/85001),Vista (19/85701) Projects 0.00000 0.00000 0.00000 0.00000 0.00000
Total Prop 13 Rate (3)1.00000 1.00000 1.00000 1.00000 1.00000
(1) Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical
section information.
(2) General Fund tax rates are representative and based upon the direct and overlapping rates for the largest General Fund
tax rate area (TRA) by net taxable value.
Fiscal Years
Notes;
(3) In 1978, the voters of the State of California passed Proposition 13, which limited property taxes to a total maximum rate
of one percent based upon the assessed value of the property being taxed. Each year the assessed value of property may
be increased by an "inflation factor" (limited to a maximum increase of two percent). W ith few exceptions, property is only
reassessed at the time that it was sold to a new owner. At that point, the new assessed value is reassessed at the purchase
price of the property sold. The assessed valuation data shown above represents the only data currently available with
respect to the actual market value.
164
City of Encinitas
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
2016 2015 2014 2013 2012
%%%%%
City of Encinitas Basic Rate 0.23978 0.24534 0.24002 0.23974 0.23866
City of Encinitas Total Direct Rate (1)0.23978 0.24534 0.24002 0.23974 0.23866
Overlapping Rates: (2)
City of Encinitas 0.24020 0.24020 0.24020 0.24020 0.24020
Encinitas Landscape & Lighting District 0.02100 0.02100 0.02100 0.02100 0.02100
Autistic Pupils Minors Elementary 0.00000 0.00000 0.00000 0.00000 0.00000
Autistic Pupils Minors High 0.00000 0.00000 0.00000 0.00000 0.00000
Cardiff, Encinitas Elementary 0.24870 0.24870 0.24870 0.24870 0.24870
Children's Institutions Tuition 0.00107 0.00107 0.00107 0.00107 0.00107
County General 0.08020 0.08020 0.08020 0.08020 0.08020
County Library 0.01969 0.01969 0.01969 0.01969 0.01969
County School Service 0.00643 0.00643 0.00643 0.00643 0.00643
County School Service-Capital Outlay 0.00161 0.00161 0.00161 0.00161 0.00161
County Service Area No. 17 0.00251 0.00251 0.00251 0.00251 0.00251
CW A San Dieguito W ater District, OMW D 0.02510 0.02510 0.02510 0.02510 0.02510
Development Centers for Handicapped Elementary 0.00000 0.00000 0.00000 0.00000 0.00000
Development Centers for Handicapped High 0.00000 0.00000 0.00000 0.00000 0.00000
Educable Mentally Retarded Minors 0.00161 0.00161 0.00161 0.00161 0.00161
Educational Revenue Augmentation Fund 0.08620 0.08620 0.08620 0.08620 0.08620
Mira Costa Community College 0.08150 0.08150 0.08150 0.08150 0.08150
Physically Handicapped Minors Elementary 0.00268 0.00268 0.00268 0.00268 0.00268
Physically Handicapped Minors High 0.00268 0.00268 0.00268 0.00268 0.00268
Regional Occupational Centers 0.00375 0.00375 0.00375 0.00375 0.00375
San Dieguito Union High 0.13610 0.13610 0.13610 0.13610 0.13610
San Dieguito W ater District 0.03590 0.03590 0.03590 0.03590 0.03590
Trainable Mentally Retarded Minors Elementary 0.00161 0.00161 0.00161 0.00161 0.00161
Trainable Mentally Retarded Minors High 0.00161 0.00161 0.00161 0.00161 0.00161
Oceanside (19/85001),Vista (19/85701) Projects 0.00000 0.00000 0.00000 0.00000 0.00000
Total Prop 13 Rate (3)1.00000 1.00000 1.00000 1.00000 1.00000
(3) In 1978, the voters of the State of California passed Proposition 13, which limited property taxes to a total maximum
rate of one percent based upon the assessed value of the property being taxed. Each year the assessed value of property
may be increased by an "inflation factor" (limited to a maximum increase of two percent). W ith few exceptions, property is
only reassessed at the time that it was sold to a new owner. At that point, the new assessed value is reassessed at the
purchase price of the property sold. The assessed valuation data shown above represents the only data currently available
with respect to the actual market value.
(1) Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical
section information.
Notes:
Fiscal Years
(2) General Fund tax rates are representative and based upon the direct and overlapping rates for the largest General
Fund tax rate area (TRA) by net taxable value.
165
City of Encinitas
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
2021 2020 2019 2018 2017
%%%%%
Gen Bond Cardiff 2000A 0.03701 0.03727 0.03737 0.03028 -
Gen Bond Cardiff 2000 Election,2010 Ref. Bonds - - - 0.03192
MW D D/S Remainder of SDCW A 1501999 0.00350 0.00350 0.00350 0.00350 0.00350
Total Voter Approved Rate 0.04051 0.04077 0.04087 0.03378 0.03542
Total Tax Rate 1.04051 1.04077 1.04087 1.03378 1.03542
Source: HdL Companies; County of San Diego Office of Property Tax Services
Fiscal Years
166
City of Encinitas
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
2016 2015 2014 2013 2012
%%%%%
Gen Bond Cardiff 2000A - - - - -
Gen Bond Cardiff 2000 Election,2010 Ref. Bonds 0.03324 0.03554 0.03386 0.03458 0.03489
MW D D/S Remainder of SDCW A 1501999 0.00350 0.00350 0.00350 0.00350 0.00370
Total Voter Approved Rate 0.03674 0.03904 0.03736 0.03808 0.03859
Total Tax Rate 1.03674 1.03904 1.03736 1.03808 0.03859
Source: HdL Companies; County of San Diego Office of Property Tax Services
Fiscal Years
167
City of Encinitas
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Fiscal Year
Ended
June 30 Bonded Debt Capital Leases
Total Governmental
Activities
2021 40,821,452$ 1,323,185$ 42,144,637$
2020 42,897,904 890,053 43,787,957
2019 44,899,354 1,220,867 46,120,221
2018 46,830,807 1,633,559 48,464,366
2017 48,953,813 2,205,282 51,159,095
2016 52,933,882 2,050,840 54,984,722
2015 55,431,687 2,513,713 57,945,400
2014 44,546,848 2,964,400 47,511,248
2013 46,736,383 3,446,376 50,182,759
2012 40,645,759 3,281,606 43,927,365
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
(1) Debt per Capita is calculated by dividing the total primary government amount by the City
population shown on the Demographic and Economic statistical page.
Governmental Activities
168
City of Encinitas
Ratios of Outstanding Debt by Type (Continued)
Last Ten Fiscal Years
Fiscal Year
Ended
June 30
Water Bonds
and Notes
CSD Note
Payable
EHA Note
Payable
Total Business-
type Activities
Total Primary
Government
Debt Per
Capita (1)
2021 4,728,115$ 11,527,912$ 924,799$ 17,180,826$ 59,325,463$ 952
2020 5,992,487 11,882,425 1,008,914 18,883,826 62,671,783 1,008
2019 7,201,858 12,226,938 1,091,629 20,520,425 66,640,646 1,051
2018 8,376,231 12,960,295 1,173,058 22,509,584 70,973,950 1,124
2017 9,510,602 1,559,300 1,253,177 12,323,079 63,482,174 1,019
2016 10,609,973 2,205,893 1,331,410 14,147,276 69,131,998 1,117
2015 11,669,345 2,833,824 1,391,715 15,894,884 73,840,284 1,200
2014 13,645,000 3,447,591 1,444,731 18,537,322 66,048,570 1,079
2013 14,670,000 4,045,028 1,495,415 20,210,443 70,393,202 1,162
2012 15,660,000 4,625,969 1,544,434 21,830,403 65,757,768 1,090
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
population shown on the Demographic and Economic statistical page.
(1) Debt per Capita is calculated by dividing the total primary government amount by the City
Business-type Activities
169
City of Encinitas
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Fiscal Certificates of Participation Percentage
Year Ended and Assessed of Assessed Per
June 30 Lease Revenue Bonds Valuation (1)Value Capita
2021 40,821,452$ 18,082,574,472$ 0.23%655
2020 42,897,904 17,159,943,000 0.25%690
2019 44,899,354 16,372,917,000 0.27%708
2018 46,830,807 15,366,779,000 0.30%741
2017 48,953,813 14,472,213,000 0.34%786
2016 52,933,882 13,702,972,000 0.39%855
2015 55,431,687 12,870,004,000 0.43%901
2014 44,546,848 12,147,361,000 0.37%728
2013 46,736,383 11,723,928,000 0.40%772
2012 40,645,759 11,497,856,000 0.35%674
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021
(1) Assessed valuation has been used because the actual market value of taxable property is not readily available in the State
of California. The assessed valuation information can be found in the Assessed Value and Estimated Actual Value of Taxable
Property schedule of the Statistical Section.
Notes: Details regarding the City's outstanding debt can be found in the Notes to the Basic Financial Statements. General
bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds of
which, the City has none.
Outstanding General Bonded Debt
170
City of Encinitas
Schedule of Direct and Overlapping Bonded Debt
June 30, 2021
FY 2020-21 Assessed Valuation:$18,084,459,057 City's Share of
Total Debt Applicable Overlapping Debt
June 30, 2021 % (1)June 30, 2021
OVERLAPPING TAX AND ASSESSMENT DEBT:
Metropolitan W ater District 26,830,000$ 0.554%148,638$
Mira Costa Community College District 306,265,000 15.086%46,203,138
Cardiff School District 23,406,075 100.000%23,406,075
Encinitas Union School District 45,278,945 68.435%30,986,646
San Dieguito Union High School 431,325,000 24.879%107,309,347
San Dieguito Union High School District Community Facilities Districts 35,910,000 32.097%11,525,860
City of Encinitas Community Facilities District No. 1 20,635,000 100.000%20,635,000
Olivenhain Municipal W ater District, Assessment District No. 96-1 6,315,000 31.076%1,962,449
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 242,177,153$
DIRECT AND OVERLAPPING GENERAL FUND DEBT
San Diego County General Fund Obligations 211,585,000$ 3.088%6,533,745$
San Diego County Pension Obligations 400,125,000 3.088%12,355,860
San Diego County Superintendent of Schools Obligations 8,585,000 3.088%265,105
San Dieguito Union High School District General Fund Obligations 12,730,000 24.879%3,167,097
City of Encinitas Bonded Debt 39,350,000 100.000%39,350,000
City of Encinitas Bond Premiums and Discounts 1,471,452 100.000%1,471,452
City of Encinitas Capital Leases 1,323,185 100.000%1,323,185
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 64,466,444$
TOTAL DIRECT DEBT 42,144,637$
TOTAL OVERLAPPING DEBT 264,498,960$
COMBINED TOTAL DEBT 306,643,597$ (2)
(1)The percentage of overlapping applicable to the City is estimated using taxable assessed property value. Applicable
percentages were estimated by determining the portion of the overlapping districts' assessed value that is within the
City divided by the districts' total taxable assessed value.
(2)Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and non-bonded capital lease obligations.
Ratios to FY 20120-21 Assessed Valuation:
Total Overlapping Tax and Assessment Debt..…………………………….1.34%
Total Direct Debt ($ 42,144,637).……...……..….……………………….…0.23%
Combined Total Debt…...…….………….….….…….………....…………….1.70%
Source: County of San Diego Assessor
171
City of Encinitas
Legal Debt Margin Information
Last Ten Fiscal years
(In thousands)
2021 2020 2019 2018 2017
Assessed valuation 18,082,574$ 17,159,943$ 16,372,917$ 15,366,779$ 14,472,213$
Conversion percentage equal 25%25%25%25%25%
to 25% of assessed valuation
Adjusted assessed valuation 4,520,644 4,289,986 4,093,229 3,841,695 3,618,053
Debt limit percentage 15%15%15%15%15%
Debt limit 678,097 643,498 613,984 576,254 542,708
Total net debt applicable to limit:40,821 42,898 44,899 46,831 48,954
Legal debt margin 637,276$ 600,600$ 569,085$ 529,423$ 493,754$
Total debt applicable to the limit
as a percentage of debt limit 6.02%6.67%7.31%8.13%9.02%
Notes: Details regarding the City's outstanding debt can be found in the Notes to the Financial
Statements section.
Source: HdL Companies
Fiscal Years
The Government Code of the State of California provides for a legal debt limit of 15 percent of gross assessed valuation.
However,this provision was enacted when assessed valuation was based upon 25 percent of market value.Effective with
Fiscal Year 1981-82,each parcel is assessed at 100 percent of market value (as of the most recent change in ownership for
that parcel).The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the
current full valuation perspective to the 25 percent level that was in effect at the time that the legal debt margin was enacted by
the State of California for local governments located within the state.
172
City of Encinitas
Legal Debt Margin Information (Continued)
Last Ten Fiscal years
(In thousands)
2016 2015 2014 2013 2012
Assessed valuation 13,702,972$ 12,870,004$ 12,147,361$ 11,723,928$ 11,497,856$
Conversion percentage equal 25%25%25%25%25%
to 25% of assessed valuation
Adjusted assessed valuation 3,425,743 3,217,501 3,036,840 2,930,982 2,874,464
Debt limit percentage 15%15%15%15%15%
Debt limit 513,861 482,625 455,526 439,647 431,170
Total net debt applicable to limit:52,934 55,432 44,547 46,736 40,646
Legal debt margin 460,927$ 427,193$ 410,979$ 392,911$ 390,524$
Total debt applicable to the limit
as a percentage of debt limit 10.30%11.49%9.78%10.63%9.43%
Notes: Details regarding the City's outstanding debt can be found in the Notes to the Financial
Statements section.
Source: HdL Companies
Fiscal Years
The Government Code of the State of California provides for a legal debt limit of 15 percent of gross assessed valuation.
However,this provision was enacted when assessed valuation was based upon 25 percent of market value.Effective with
Fiscal Year 1981-82,each parcel is assessed at 100 percent of market value (as of the most recent change in ownership for that
parcel).The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full
valuation perspective to the 25 percent level that was in effect at the time that the legal debt margin was enacted by the State of
California for local governments located within the state.
173
City of Encinitas
Historical Debt Service Coverage
Last Ten Fiscal Years
2021 2020 2019 2018 2017
Revenues:
Operating revenues - including connection fees 19,255,799$ 17,121,649$ 15,961,300$ 17,219,494$ 15,142,544$
Non-operating revenues 1,764,599 1,902,231 2,307,498 1,092,337 1,048,764
Gross Revenues 21,020,398 19,023,880 18,268,798 18,311,831 16,191,308
Total Operating & Non-Operating Expenses 16,142,824 16,429,284 16,541,314 15,198,929 14,263,288
Net Income 4,877,574 2,594,596 1,727,484 3,112,902 1,928,020
Add:
Interest expense 198,800 247,063 292,354 328,050 366,740
Depreciation and amortization expense (1)(537,982) 1,830,493 2,208,775 1,848,913 978,627
Net Revenues Available for Debt Service 4,538,392 4,672,152 4,228,613 5,289,865 3,273,387
Less: Debt Service Paid
2004 Water Revenue Refunding Bonds - Interest Charges - - - -
2004 Water Revenue Refunding Bonds - Principal Payments - - - -
2007 Note Payable to Financing Authority - Interest Charges 111,466 133,619 152,919 171,619 191,244
2007 Note Payable to Financing Authority - Principal Payments 525,000 490,000 475,000 455,000 440,000
2014 Water Revenue Refunding Bonds - Interest Charges 100,300 126,500 148,775 167,225 185,075
2014 Water Revenue Refunding Bonds - Principal Payments 665,000 645,000 625,000 605,000 585,000
Total Debt Service 1,401,766$ 1,395,119$ 1,401,694$ 1,398,844$ 1,401,319$
Coverage by Net Revenues Available for Debt Service (2)324%335%302%378%234%
(1) Depreciation and amortization includes the change in Investment in Joint Ventures from other agencies.
2021 2020 2019 2018 2017
Revenues:
Operating revenues - including connection fees (1)5,191,624$ 5,335,578$ 5,013,316$ 5,081,021$ 5,006,574$
Non-operating revenues 128,759 581,284 496,059 162,951 140,095
Gross Revenues 5,320,383 5,916,862 5,509,375 5,243,972 5,146,669
Total Operating & Non-Operating Expenses 3,918,544 3,797,174 3,548,203 3,578,417 3,380,180
Net Income 1,401,839 2,119,688 1,961,172 1,665,555 1,766,489
Add:
Interest expense 443,753 451,938 472,324 491,983 71,727
Depreciation and amortization expense 454,813 443,689 389,390 386,019 754,400
Net Revenues Available for Debt Service 2,300,405 3,015,315 2,822,886 2,543,557 2,592,616
Less: Debt Service
2003 Note Payable to SEJPA - Interest Charges - - - - -
2003 Note Payable to SEJPA - Principal Payments - - - - -
2011 Note Payable to SEJPA - Interest Charges 1,710 3,234 29,788 55,402 79,889
2011 Note Payable to SEJPA - Principal Payments 60,000 57,500 663,846 640,352 612,192
2017 Note Payable to SEJPA-Interest Charges 444,863 451,388 451,388 294,656 -
2017 Note Payable to SEJPA-Principal Payments 225,000 217,500 - - -
Total Debt Service 731,573$ 729,622$ 1,145,021$ 990,410$ 692,081$
Coverage by Net Revenues Available for Debt Service 314%413%247%257%375%
Source: City of Encinitas Finance Department
Debt service coverage requirement is a minimum 110 percent of net revenue including connection fees.
The above schedules include connection fees in operating revenues.
San Dieguito Water District
Cardiff Sanitary Division
(2) Debt service coverage requirement is a minimum 115 percent of net revenue including connection fees. The above schedules include
connection fees in operating revenues.
174
City of Encinitas
Historical Debt Service Coverage (Continued)
Last Ten Fiscal years
2016 2015 2014 2013 2012
Revenues:
Operating revenues - including connection fees 14,852,061$ 15,152,433$ 15,715,575$ 13,789,636$ 13,170,422$
Non-operating revenues 1,013,297 927,526 827,676 869,568 813,610
Gross Revenues 15,865,358 16,079,959 16,543,251 14,659,204 13,984,032
Total Operating & Non-Operating Expenses 13,800,671 15,481,543 14,066,485 12,198,228 12,448,911
Net Income 2,064,687 598,416 2,476,766 2,460,976 1,535,121
Add:
Interest expense 412,108 475,775 622,075 657,963 698,908
Depreciation and amortization expense (1)
Net Revenues Available for Debt Service 3,991,511 3,346,098 4,589,647 4,594,983 3,528,933
Less: Debt Service Paid
2004 Water Revenue Refunding Bonds - Interest Charges - 144,720 380,731 408,906 433,950
2004 Water Revenue Refunding Bonds - Principal Payments - 665,000 640,000 615,000 595,000
2007 Note Payable to Financing Authority - Interest Charges 211,144 224,994 241,344 256,744 270,352
2007 Note Payable to Financing Authority - Principal Payments 415,000 405,000 385,000 375,000 365,000
2014 Water Revenue Refunding Bonds - Interest Charges 202,400 106,061 - - -
2014 Water Revenue Refunding Bonds - Principal Payments 570,000 - - - -
Total Debt Service 1,398,544$ 1,545,775$ 1,647,075$ 1,655,650$ 1,664,302$
Coverage by Net Revenues Available for Debt Service (2)285%216%279%278%212%
(1) Depreciation and amortization includes the change in Investment in Joint Ventures from other agencies.
2016 2015 2014 2013 2012
Revenues:
Operating revenues - including connection fees (1)4,862,274$ 4,615,399$ 4,758,606$ 4,755,573$ 5,087,182$
Non-operating revenues 149,151 120,668 1,216,941 39,015 79,347
Gross Revenues 5,011,425 4,736,067 5,975,547 4,794,588 5,166,529
Total Operating & Non-Operating Expenses 3,949,288 4,371,847 3,189,268 3,310,986 3,385,439
Net Income 1,062,137 364,220 2,786,279 1,483,602 1,781,090
Add:
Interest expense 91,757 109,282 266,822 142,898 248,400
Depreciation and amortization expense 1,303,272 1,555,955 200,459 800,000 404,640
Net Revenues Available for Debt Service 2,457,166 2,029,457 3,253,560 2,426,500 2,434,130
Less: Debt Service
2003 Note Payable to SEJPA - Interest Charges - - - - 255,000
2003 Note Payable to SEJPA - Principal Payments - - - - 490,000
2011 Note Payable to SEJPA - Interest Charges 91,757 109,282 131,967 142,898 28,945
2011 Note Payable to SEJPA - Principal Payments 593,530 579,366 563,037 546,540 25,000
2017 Note Payable to SEJPA-Interest Charges - - - - -
2017 Note Payable to SEJPA-Principal Payments - - - - -
Total Debt Service 685,287$ 688,648$ 695,004$ 689,438$ 798,945$
Coverage by Net Revenues Available for Debt Service 359%295%468%352%305%
Source: City of Encinitas Finance Department
Debt service coverage requirement is a minimum 110 percent of net revenue including connection fees.
The above schedules include connection fees in operating revenues.
(2) Debt service coverage requirement is a minimum 115 percent of net revenue including connection fees. The above schedules
include connection fees in operating revenues.
San Dieguito Water District
Cardiff Sanitary Division
175
City of Encinitas
Demographic and Economic Statistics
Last Ten Fiscal years
Fiscal Year
Ended June 30 City Population
% of San Diego
County
Population
% Change
from Previous
Year
Median
Age
Average
Household
Size
Unemployment
Rate
2021 62,289 2.2%0.17%43.6 2.56 4.8%
2020 62,183 2.2%-1.90%43.1 2.60 9.6%
2019 63,390 1.9%0.37%42.9 2.56 2.6%
2018 63,158 1.9%1.40%41.5 2.45 2.8%
2017 62,288 1.9%0.64%41.5 2.50 3.8%
2016 61,893 1.9%0.61%41.5 2.50 4.5%
2015 61,518 2.0%0.51%41.5 2.50 4.2%
2014 61,204 2.1%1.05%41.5 2.49 5.2%
2013 60,568 2.0%0.37%41.5 2.50 5.5%
2012 60,346 2.0%0.73%42.2 2.45 9.2%
NOTE: City population figures have been revised to match updated population from the California State
Department of Finance as of January 1, 2021.
Sources: California Department of Finance; US Census Bureau QuickFacts; Employment Development Department
176
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1177
City of Encinitas
General Governmental Tax Revenue by Source
Last Ten Fiscal Years
Fiscal Year
Ended
June 30
Property and
Documentary
Transfer Tax Sales and Use Tax
Transient
Occupancy Tax Franchise Tax Total Tax Revenue
2021 53,747,471$ 15,453,648$ 2,823,055$ 2,599,811$ 74,623,985
2020 51,251,719 13,744,880 2,383,060 2,539,090 69,918,749
2019 49,237,265 13,694,647 2,775,771 2,571,367 68,279,050
2018 46,311,814 13,252,053 2,562,484 2,587,443 64,713,794
2017 43,494,220 12,549,609 2,216,145 2,545,854 60,805,828
2016 41,210,486 14,166,771 1,616,171 2,358,567 59,351,995
2015 38,508,558 12,569,119 1,828,116 2,761,335 55,667,128
2014 36,414,507 12,067,360 1,570,459 2,614,844 52,667,170
2013 34,974,578 11,585,145 1,491,998 2,323,616 50,375,337
2012 32,788,129 10,613,188 1,413,926 2,144,162 46,959,405
Property Tax Levies and Collections
Source: City of Encinitas Finance Department
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
To tal General Governmental Tax Revenues
Property Tax
Sales Tax
Transient Occupancy Tax
Franchise Tax
Fiscal Years
178
City of Encinitas
Taxable Sales by Business Type
Last Ten Fiscal Years
2021 2020 2019 2018 2017
Autos and Transportation 2,129,102$ 1,703,500$ 1,806,753$ 1,744,199$ 1,627,531$
Building and Construction 1,115,852 959,367 1,133,022 924,933 1,021,600
Business and Industry 545,444 730,647 629,112 567,665 623,641
Food and Drugs 1,236,743 1,109,984 1,110,862 1,010,551 931,650
Fuel and Service Stations 1,112,245 1,099,387 1,630,124 1,025,386 1,191,164
General Consumer Goods 3,882,876 3,181,523 3,812,472 3,400,696 3,492,330
Restaurants and Hotels 2,248,344 2,140,574 2,560,108 2,274,664 2,264,487
Total 12,270,606$ 10,924,982$ 12,682,453$ 10,948,094$ 11,152,403$
2016 2015 2014 2013 2012
Autos and Transportation 1,684,618$ 1,638,839$ 1,519,006$ 1,446,737$ 1,427,132$
Building and Construction 980,140 944,334 887,182 820,467 868,790
Business and Industry 738,490 556,835 573,032 560,723 518,699
Food and Drugs 1,005,870 1,028,085 1,001,942 1,003,491 995,511
Fuel and Service Stations 1,382,946 1,500,416 1,559,342 1,577,783 1,569,265
General Consumer Goods 3,535,734 3,476,481 3,355,540 3,165,746 3,117,547
Restaurants and Hotels 2,113,116 1,978,072 1,825,971 1,699,705 1,624,007
Total 11,440,914$ 11,123,062$ 10,722,015$ 10,274,652$ 10,120,951$
Source: HdL Companies
Note: Due to the confidentiality of this information, the names of the ten largest revenue payers are not available. The
categories presented are intended to provide alternative information regarding the sources of the City's revenue.
179
City of Encinitas
Principal Employers
Current Fiscal Year and Nine Years Ago
% of Total City % of Total City
Employer Industry Employees Rank Employment Employees Rank Employment
Scripps Memorial Hospital Health Care & Social Assistance 1,017 1 3.33%650 1 2.24%
Walmart Supercenter Retail 335 2 1.10%- - 0.00%
Dudek & Associates Engineers - Consulting 275 3 0.90%- - 0.00%
Paul Ecke Ranch Agriculture 250 4 0.82%- - 0.00%
Target Retail 250 5 0.82%250 5 0.86%
Encinitas Union School Dist Education 225 6 0.74%- - 0.00%
San Diego Hebrew Homes Health Care & Social Assistance 220 7 0.72%220 7 0.76%
Objectiva Software Solutions Technology 201 8 0.66%- - 0.00%
Paul Ecke Ranch Agriculture 201 9 0.66%- - 0.00%
Best Buy Retail 200 10 0.66%- - 0.00%
Encinitas City Hall Government Office 200 -0.66%200 9 0.69%
Magdalena Ecke Family YMCA Recreation Facilities 200 -0.66%200 10 0.69%
YMCA Recreation Facilities - -- 300 2 1.03%
Home Depot Retail - -- 250 3 0.86%
Scripps Rehabilitation Svc Health Care & Social Assistance - -- 250 4 0.86%
Lomas Santa Fe Country Club Golf Courses - -- 220 6 0.76%
California Bank & Trust Banks - -- 200 8 0.69%
Subtotal Employees 3,574 11.72%2,740 9.43%
Total Employees 30,496 29,053
Note: Total Employees number is historical data from zip codes 92007, 92023 and 92024.
Source: Data Axle
2021 2012
180
City of Encinitas
Full-Time and Part-Time Employees by Function
Last Ten Fiscal Years
Function 2021 2020 2019 2018 2017
General government 50.05 50.05 49.55 44.60 46.75
Public safety 70.00 70.00 69.00 69.00 69.00
Public works 34.00 34.00 34.00 27.55 28.55
Engineering services*- - - - 27.17
Parks and recreation 21.25 21.25 21.25 22.25 20.18
Planning and building*- - - - 27.25
Development services*48.00 48.00 48.00 53.00 -
Subtotal 223.30 223.30 221.80 216.40 218.90
San Dieguito Water District 24.00 24.00 24.00 24.00 24.00
Fiscal Years
Function 2016 2015 2014 2013 2012
General government 46.75 46.75 44.75 44.75 44.55
Public safety 69.00 66.00 66.00 63.00 63.00
Public works 28.55 28.55 29.55 29.25 28.85
Engineering services*27.17 27.17 27.17 26.42 27.42
Parks and recreation 20.18 20.18 21.18 21.18 21.18
Planning and building*27.25 27.25 27.25 26.75 26.75
Development services*- - - - -
Subtotal 218.90 215.90 215.90 211.35 211.75
San Dieguito Water District 24.00 24.00 23.00 25.00 25.40
*Engineering and Planning/Building merged into Development Services during FY 2017-18.
Fiscal Years
Source: City of Encinitas Human Resources Department
181
City of Encinitas
Operating Indicators by Function
Last Ten Fiscal years
2021 2020 2019 2018 2017
San Diego County Sheriff's Department
Criminal arrests 1,006 1,061 1,161 1,130 1,612
Traffic arrests 226 202 355 213 201
Traffic accidents 286 221 281 307 289
Traffic citations 3,399 7,009 9,635 5,501 4,891
Calls for service 20,221 19,406 19,190 20,019 19,372
Deputy initiated action 16,138 21,106 25,725 22,612 24,625
Fire:
Number of emergency fire calls 299 476 934 532 283
Number of EMS/rescue 4,492 4,031 6,270 4,775 4,717
Other 850 1,532 1,711 2,382 1,035
Inspections 1,004 1,532 2,198 3,145 2,122
Engineering:
Number of permits issued 430 360 399 424 440
Parks and recreation:
Number of recreation class registrations 4,247 10,310 17,812 15,444 16,338
Number of facility rentals 38 491 550 537 492
Planning and building:
Number of planning permits issued 183 242 194 222 276
Number of new dwelling units issued 69 76 71 160 94
Environmental review 0 4 6 3 7
Appeals 5 7 5 6 6
Plan checks 2,815 2,464 2,409 2,147 1,807
Code enforcement complaints 1,239 1,341 1,090 878 1,282
Water:
New connections -48 225 114 50 39
Average daily consumption (millions of gallons)5.21 4.71 4.82 5.21 4.85
Sewer:
New connections 43 16 14 62 65
Average daily sewage treatment (millions of gallons)1.22 1.26 1.21 2.20 2.27
The City of Encinitas contracts with the County of San Diego Sheriff's Department to provide
law enforcement services.
Source: City of Encinitas Fire, Parks, Recreation and Cultural Arts, Development Services, and San Dieguito W ater District
182
City of Encinitas
Operating Indicators by Function (Continued)
Last Ten Fiscal years
2016 2015 2014 2013 2012
San Diego County Sheriff's Department
Criminal arrests 1,997 1,743 1,595 1,548 1,231
Traffic arrests 263 551 331 383 485
Traffic accidents 274 297 323 372 441
Traffic citations 14,873 13,650 10,357 11,381 11,349
Calls for service 22,518 21,335 19,394 20,559 20,150
Deputy initiated action 27,481 27,339 29,849 31,281 29,862
Fire:
Number of emergency fire calls 328 300 383 102 124
Number of EMS/rescue 4,098 3,844 3,806 3,697 3,495
Other 1,517 1,265 1,458 1,932 1,737
Inspections 2,133 2,072 2,143 2,163 2,252
Engineering:
Number of permits issued 436 383 351 269 392
Parks and recreation:
Number of recreation class registrations 15,500 16,289 16,236 11,175 11,119
Number of facility rentals 538 557 578 421 749
Planning and building:
Number of planning permits issued 263 335 298 207 202
Number of new dwelling units issued 117 135 161 63 121
Environmental review 4 10 9 6 7
Appeals 11 6 7 5 3
Plan checks 2,339 1,737 1,391 990 948
Code enforcement complaints 1,199 1,063 1,153 1,199 1,270
Water:
New connections 77 69 131 64 79
Average daily consumption (millions of gallons)4.56 5.49 5.71 5.61 5.32
Sewer:
New connections 33 53 22 50 44
Average daily sewage treatment (millions of gallons)2.20 2.22 2.36 2.40 2.38
The City of Encinitas contracts with the County of San Diego Sheriff's Department to provide
law enforcement services.
Source: City of Encinitas Fire, Parks, Recreation and Cultural Arts, Development Services, and San Dieguito W ater District
183
City of Encinitas
Capital Asset Statistics by Function
Last Ten Fiscal Years
2021 2020 2019 2018 2017
Law enforcement: *
Number of sub-stations 1 1 1 1 1
Fire department:
Fire stations 6 7 7 6 6
Public works:
Streets (miles) **172 168 168 168 201
Engineering:
Signalized intersections 63 63 63 63 63
Parks and recreation:
Community and senior center 1 1 1 1 1
Developed parks 19 18 18 18 18
Undeveloped parks 3 4 4 4 4
Parkland acres 328 325 325 382 382
Habitat/open space acreage 90 90 90 87 87
Marine life refuge 1 1 1 1 1
Trails/streetscapes (miles)41/10 41/10 41/10 41/10 41/10
Lifeguard towers 9 9 9 9 7
Water:
W ater mains (miles)168 174 174 175 170
Maximum daily capacity (millions of gallons)15 15 15 15 15
Source: City of Encinitas Fire, Parks, Recreation and Cultural Arts, Development Services, and San Dieguito Water District
** Prior to FY 2017-18 data included both City and privately maintained streets. In FY 2017-18, data includes
only City maintained streets.
* The City of Encinitas contracts with the County of San Diego Sheriff's Department to provide law enforcement
services.
184
City of Encinitas
Capital Asset Statistics by Function (Continued)
Last Ten Fiscal Years
2016 2015 2014 2013 2012
Law enforcement: *
Number of sub-stations 1 1 1 1 1
Fire department:
Fire stations 6 6 6 6 5
Public works:
Streets (miles) **201 201 201 201 201
Engineering:
Signalized intersections 63 63 63 63 63
Parks and recreation:
Community and senior center 1 1 1 1 1
Developed parks 18 18 18 18 18
Undeveloped parks 4 4 4 4 4
Parkland acres 382 382 382 382 382
Habitat/open space acreage 87 87 87 87 87
Marine life refuge 1 1 1 1 1
Trails/streetscapes (miles)41/10 41/10 41/10 41/10 41/10
Lifeguard towers 7 7 7 7 7
Water:
W ater mains (miles)168 168 168 168 168
Maximum daily capacity (millions of gallons)15 15 15 15 15
Source: City of Encinitas Fire, Parks, Recreation and Cultural Arts, Development Services, and San Dieguito Water District
** Prior to FY 2017-18 data included both City and privately maintained streets. In FY 2017-18, data includes
only City maintained streets.
* The City of Encinitas contracts with the County of San Diego Sheriff's Department to provide law enforcement
services.
185
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186
Cardiff Sanitary Division
Summary of Operational Data
The following tables are being presented as supplementary information based on
requirements for bonds issued to CSD for continuing bond disclosure certificate.
187
Table 1
Cardiff Sanitary Division
Rate Schedule for Annual Service Charges
As of June 30, 2021
Users/Class
Sub
Category
Fixed Meter
Charge HCF Rate
Median Annual
HCF Median Charge
Group I Residential
Single Family SF $47.13 5.51$ 87.20 527.60$
Multi Family MF See below 5.51 - $373.12/unit
Trailer Park TP See below 5.51 - $373.12/unit
Non-Residential
Commercial Group II See below See below 5.79$ See below See below
Commercial Group III See below See below 7.53 See below See below
Commercial Group IV See below See below 11.31 See below See below
Meter Size Annual Charge Meter Size Annual Charge
5/8"47.13$ 1-1/2"235.67$
3/4"70.70$ 2"377.06$
1"117.83$ 3"706.99$
* Multi Family/Trailer Park = Fixed Meter Charge x 2
Users/Class
Sub
Category
Unit Cost
(perHCF)
Median Annual
HCF (New
Connections)
Median Usage Charge
(New Connections)
Group II Commercial
Softwater Service SW 5.79$ --$
Car Wash CW 5.79 1,520 8,800.80
Office Building OF 5.79 200 1,158.00
Fire Station FS 5.79 110 636.90
Professional Building (Doctor)PB 5.79 160 926.40
Veterinary Clinic VC 5.79 --
Athletic Gymnasium G 5.79 1,340 7,758.60
Laundromat L 5.79 990 5,732.10
Department and Retail Store DRS 5.79 120 694.80
Warehouse W 5.79 1,050 6,079.50
Hospital, Convalescent Home HCH 5.79 3,240 18,759.60
Parks PB 5.79 510 2,952.90
Church-Membership Organization C 5.79 440 2,547.60
Membership Organization (Non-Church)MO 5.79 240 1,389.60
Social Services SS 5.79 160 926.40
Group III Commercial
Hotels-Motels (without restaurant)HM 7.53$ 890 $6,701.70
Repair and Service Station RSS 7.53 70 527.10
Shopping Center SC 7.53 1,030 7,755.90
Kennel K 7.53 900 6,777.00
Coffee Shop CS 7.53 --
Amusement Park AP 7.53 --
Nightclub/Bar NC 7.53 320 2,409.60
Commercial Laundry CL 7.53 --
Manufacturing M 7.53 180 1,355.40
Lumber Yard LY 7.53 --
Group IV Commercial
Hotels-Motel (with restaurant)HM 11.31$ 3,130 $35,400.30
Bakery (wholesale)/Food Processor BW 11.31 --
Supermarket SM 11.31 1,030 11,649.30
Mortuary MT 11.31 300 3,393.00
Restaurant R 11.31 600 6,786.00
(1) Sewer rates are based on water consumption (fixed charge based on meter size and consumption component).
The consumption is based on HCF (hundred cubic feet - 748 gallons).
Residential = 2 Lowest Periods of Water Consumption For Meter Readings Occurring Between Dec.-May (most recent available 5-year period)
New Connections (no prior water consumption
history)
New Connections (no prior water consumption
history)
Multi Family/Trailer Park* and Non-Residential Fixed Meter Charge
Water Consumption Periods To Be Used
Non-Residential (Commercial) = Water Consumption For Meter Readings Occurring Between July-June of Preceding Year
188
Table 2
Cardiff Sanitary Division
Historical Service Charges Billed
Last Ten Fiscal Years
Fiscal Year
Residential
(Tax Roll)
Commercial
(Tax Roll)
Commercial
(Manual) Total Billed
Single
Family
Average
2021 4,100,948$ 648,304$ 128,444$ 4,877,696$ 665
2020 4,083,220 645,501 130,882 4,859,603 665
2019 4,048,063 633,674 126,925 4,808,662 662
2018 4,065,382 595,450 118,660 4,779,492 665
2017 3,958,853 597,392 135,581 4,691,826 648
2016 3,873,157 610,169 135,107 4,618,432 634
2015 4,033,393 623,032 135,587 4,792,012 610
2014 3,812,338 599,324 134,910 4,546,572 622
2013 3,935,414 666,099 126,677 4,728,190 652
2012 4,058,990 645,560 123,822 4,828,372 676
Cardiff Sanitary Division bills most customers through the San Diego County property tax billing service.
Delinquency rates have been between 1.8 -3.0 percent during the period presented.
Delinquencies do not apply to direct billings.
189
Table 3
Cardiff Sanitary Division
Ten Largest Customers
Fiscal Year 2020-21
Parcel Sewer Service Percentage of
Property Owner Count Charges Sewer Charges
Scripps Health 1 101,311.78$ 2.08%
Collwood Pines Apartments LP 3 78,715.02 1.62%
State of California Parks & Rec.2 49,488.55 1.02%
San Dieguito Union High School District 2 47,979.64 0.99%
Georges Restaurant Inc.1 36,326.80 0.75%
944 Regal Road LLC 1 34,661.68 0.71%
K&K Lumber Co.2 30,258.52 0.62%
Newport Taft, Inc.1 29,606.26 0.61%
Cardiff Town Center LLC 1 28,237.86 0.58%
Belmont Village LLC 1 27,972.24 0.58%
Subtotal 15 464,558.35$ 9.56%
Total Billed 4,859,603$
Source: Cardiff Sanitary Division
Commercial
Total Connections Residential Industrial Total
Year (Billed Parcels)EDU's EDU's EDU's
2021 6,500 7,292 1,253 8,545
2020 6,457 7,262 1,207 8,469
2019 6,456 7,247 1,205 8,452
2018 6,442 7,223 1,202 8,425
2017 6,435 7,186 1,187 8,373
2016 6,416 7,157 1,187 8,344
2015 6,394 7,132 1,187 8,319
2014 6,375 7,126 1,176 8,302
2013 6,365 7,083 1,174 8,257
2012 6,334 7,067 1,154 8,221
Source: Cardiff Sanitary Division
Last Ten Fiscal Years
Cardiff Sanitary Division
Historical Service Connections
Table 4
190
Net Position by Components
Summary of Operational Data
The following tables are being presented as supplementary information based on
requirements for bonds issued by SDWD for continuing bond disclosure certificate.
191
Customer Class Residential Rate Tier Potable Recycled
Single-family residential 0-12 units 3.19$ -$
13-20 units 5.06 -
21-40 units 6.25 -
41+ units 7.12 -
Multi-family residential (per dwelling)0-8 units 3.19 -
9-12 units 5.06 -
13-16 units 6.25 -
17+ units 7.12 -
Agriculture Uniform 5.42 4.34
Commercial Uniform 5.42 4.34
Government Uniform 5.93 4.74
Public Uniform 5.93 4.74
Landscaping Uniform 6.25 5.00
Construction Uniform 6.36 5.09
(1) Per Unit (one hundred cubic feet or 748 gallons)
Source: San Dieguito Water District
Bi-Monthly Meter Service Availability Charges (2)
As of June 30, 2021
Water Meter Service Infrastructure Fire Meter Service
Availability Access Availability
Meter Size Charge Charge Charge
5/8" & 3/4"45.16$ 7.32$ 9.61$
1"66.50 11.72 9.61
1-1/2"119.37 21.96 10.83
2"183.06 38.06 18.88
3"331.78 70.28 47.77
4"544.21 120.04 97.59
6"1,074.78 219.60 276.40
8"1,711.73 380.64 584.82
Source: San Dieguito Water District
As of June 30, 2021
Rate (1)
Table 2
San Dieguito Water District
(2)San Dieguito Water District charges a bi-monthly service availability charge,which covers the costs for
the maintenance of meters,water lines,and storage facilities,to ensure that water is available upon
demand.This charge also covers customer service costs for meter reading and billing.The Infrastructure
Access Charge is levied by the San Diego County Water Authority and is collected from the customer by the
District.
Table 1
San Dieguito Water District
Schedule of Water Rates
192
Meter
Fiscal Potable Percentage Availability Percent
Year Water Sales Change (3)Charge Change (3)
2021 12,667,405$ 15.7%4,352,715$ 4.6%
2020 10,944,746 7.3%4,162,249 8.4%
2019 10,203,984 (9.1%)3,839,847 1.8%
2018 11,222,736 18.5%3,772,759 6.4%
2017 9,467,085 (0.4%)3,544,758 1.2%
2016 9,503,108 (2.3%)3,503,933 2.6%
2015 9,728,434 (8.6%)3,415,227 5.8%
2014 10,649,157 15.3%3,227,823 4.5%
2013 9,236,462 8.3%3,087,794 (3.4%)
2012 8,528,418 3.9%3,196,605 6.3%
(3) Due to the varying number of billing cycles in a fiscal year, changes year-over-year may not be
comparable.
Source: San Dieguito Water District
Meter
Fiscal Recycled Percent Availability Percent
Year Water Sales Change Charges (4)Change
2021 840,143$ 30.4%104,023$ 6.8%
2020 644,436 9.7%97,431 12.2%
2019 587,272 (31.2%)86,801 0.8%
2018 853,052 19.0%86,098 9.4%
2017 716,826 2.1%78,732 (7.5%)
2016 702,301 8.3%85,149 5.7%
2015 648,398 40.8%80,585 34.2%
2014 460,383 15.0%60,048 N/A
2013 400,244 (5.4%)- N/A
2012 422,925 (19.2%)- N/A
Source: San Dieguito Water District
(4) The District first implemented a meter availability charge for recycled customers on September
1, 2013.
Historic Recycled Water System Revenues
Last Ten Fiscal Years
Table 3
San Dieguito Water District
Historic Potable Water System Revenues
Last Ten Fiscal Years
Table 4
San Dieguito Water District
193
Fiscal Local Imported Total Recycled Total
Year Water Water Potable Water Production
2021 2,392 3,820 6,212 703 6,916
2020 2,555 3,127 5,682 587 6,269
2019 2,173 3,407 5,580 550 6,130
2018 3,450 2,660 6,110 714 6,824
2017 1,446 3,984 5,430 654 6,084
2016 1,400 3,839 5,239 628 5,867
2015 603 5,726 6,329 736 7,065
2014 1,136 5,598 6,734 692 7,426
2013 4,200 2,395 6,595 678 (6)7,273
2012 3,719 2,663 6,382 578 (6)6,960
Fiscal Percent Percent
Year Potable Change Recycled Change
2021 5,832 10.5%703 19.8%
2020 5,277 (2.2%)587 6.7%
2019 5,397 (7.6%)550 (23.0%)
2018 5,838 10.4%714 9.2%
2017 5,287 3.4%654 4.1%
2016 5,112 (16.7%)628 (14.7%)
2015 6,134 (4.9%)736 6.4%
2014 6,449 2.6%692 2.1%
2013 6,284 5.5%678 (6)17.3%
2012 5,957 9.8%578 (6)13.1%
distribution system and/or water pumped or used through the fire distribution system.
Source: San Dieguito Water District
Table 5
Summary of Water Deliveries by Source
Last Ten Fiscal Years
(6)Since FY 2011-12,Recycled Water Production and Delivery figures are revised to include
water provided to the Encinitas Ranch Golf Authority (ERGA).Beginning in FY 2011-12,the
San Elijo Joint Powers Authority (SEJPA)began directly providing recycled water to ERGA.The
recycled water provided to ERGA credits towards the District's production and delivery water to
ERGA and the District ceased selling recycled water as ERGA falls within the District's sphere
of influence.
Note: The differences between potable water production and deliveries represents water loss in
San Dieguito Water District
Summary of Water Production by Source
Last Ten Fiscal Years
Potable Production (in acre-feet)(5)
Table 6
San Dieguito Water District
(5) Potable water production is defined as water either produced locally or purchased from
imported sources.
194
Acre-Feet Percent of
Customer Description Sold Water Sold
Agriculture 197 3.4%
Commercial 471 8.1%
Construction 57 1.0%
Government 20 0.3%
Landscaping 393 6.7%
Multi-Family Residential 1,209 20.7%
Public 105 1.8%
Single-Family Residential 3,379 57.9%
Total Sales 5,832 100.0%
Source: San Dieguito Water District
Fiscal Percent Percent
Years Potable Increase Recycled Increase
2021 12,127 0.3%101 3.1%
2020 12,086 1.9%98 5.4%
2019 11,861 0.6%93 9.4%
2018 11,790 0.4%85 (2.3%)
2017 11,740 0.2%87 6.1%
2016 11,721 0.7%82 1.2%
2015 11,644 0.3%81 5.2%
2014 11,610 0.9%77 0.0%
2013 11,502 0.2%77 4.1%
2012 11,476 0.7%74 2.8%
Source: San Dieguito Water District
Total Service Connections by Category
Last Ten Fiscal Years
Table 7
San Dieguito Water District
Sales by Customer Class
As of June 30, 2021
Table 8
San Dieguito Water District
195
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196
5 0 5 S . V u l c a n A v e n u e
E n c i n i t a s , C A 9 2 0 2 4
P h o n e : (7 6 0 ) 6 3 3 -2 6 0 0
F a x : (7 6 0 ) 6 3 3 -2 8 7 9
w w w .E n c i n i t a s C A .G o v