2023-ACFRCity of Encinitas
Encinitas,California
Annual Comprehensive Financial Report
and Independent Auditor’s Reports
For the Year Ended June 30,2023
Supported by the Finance Department
Teresa S.McBroome
Tom Gallup
Monica Attili
Quynh Dinh
Kelly Sanderson
Alexis Angelini
Stella Huang
Jenarae Benavente
Catherine Wong
Annemarie Clisby
Jules Ramos
Julie Pickard
Shannon Swiatkowski
Wendy Morgan
Curtis Mueller
Director of Finance/City Treasurer
Assistant Director of Finance
Finance Manager –Accounting
Finance Manager –Operating
Finance Manager -Budget
Finance Analyst
Finance Analyst
Accountant
Accountant
Finance Analyst
Finance Analyst
Senior Payroll Specialist
Payroll Specialist
Finance Technician
Finance Technician
INTRODUCTORY SECTION
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City of Encinitas
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
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 .............................................................................................................. 27
Statement of Activities and Changes in Net Position ...................................................................... 28
Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet ......................................................................................................................... 35
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position ............................................................... 36
Statement of Revenues, Expenditures, and Changes in Fund Balances .................................. 37
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 ............................................................. 38
Proprietary Fund Financial Statements:
Statement of Net Position ........................................................................................................ 40
Statement of Revenues, Expenses, and Changes in Net Position ........................................... 42
Statement of Cash Flows ......................................................................................................... 44
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position ......................................................................................... 51
Statement of Changes in Fiduciary Net Position ...................................................................... 52
Notes to the Basic Financial Statements ......................................................................................... 55
City of Encinitas
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued):
Required Supplementary Information (Unaudited):
Budgetary Information ........................................................................................................................ 125
Budgetary Comparison Schedule:
General Fund ................................................................................................................................ 126
Infrastructure Improvements Special Revenue Fund .................................................................... 128
Schedule of Changes in the Net Pension Liability and Related Ratios ................................................ 130
Schedule of the City’s Proportionate Share of the Net Pension Liability .............................................. 132
Schedule of Contributions - Pension ................................................................................................... 136
Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................... 142
Schedule of Contributions - OPEB ...................................................................................................... 144
Supplementary Information:
Non-Major Governmental Funds:
Combining Balance Sheet ............................................................................................................ 150
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ...................... 152
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Grants and Housing Special Revenue Fund ........................................................................... 154
Development Impact Special Revenue Fund .......................................................................... 155
Lighting and Landscaping Special Revenue Fund ................................................................... 156
Internal Service Funds:
Combining Statement of Net Position ........................................................................................... 158
Combining Statement of Revenues, Expenses, and Changes in Net Position .............................. 159
Combining Statement of Cash Flows ............................................................................................ 160
Fiduciary Funds:
Combining Statement of Fiduciary Net Position ............................................................................ 162
Combining Statement of Changes in Fiduciary Net Position ......................................................... 163
STATISTICAL SECTION (Unaudited)
Index ........................................................................................................................................................ 165
Financial Trends:
Net Position by Components – Last Ten Fiscal Years ........................................................................ 166
Changes in Net Position – Last Ten Fiscal Years ............................................................................... 168
Fund Balances of Governmental Funds – Last Ten Fiscal Years ........................................................ 172
Changes in Fund Balances of Governmental Fund – Last Ten Fiscal Years ....................................... 174
Revenue Capacity:
Assessed Value of Taxable Property – Last Ten Fiscal Years ............................................................ 176
Principal Property Taxpayers – Current year and Nine Years Ago ...................................................... 177
Property Tax Levies and Collections – Last Ten Fiscal Years............................................................. 179
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years.................................................. 180
City of Encinitas
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (Continued)
Page
STATISTICAL SECTION (Continued):
Debt Capacity:
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ............................................................. 184
Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years ................................................ 186
Schedule of Direct and Overlapping Bonded Debt .............................................................................. 187
Legal Debt Margin Information – Last Ten Fiscal Years ...................................................................... 188
Historical Debt Service Coverage – Last Ten Fiscal Years ................................................................. 190
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years .......................................................... 192
General Governmental Tax Revenue by Source................................................................................. 194
Taxable Sales by Business Type – Last Ten Fiscal Years .................................................................. 195
Principal Employers – Current Fiscal Year and Nine Years Ago ......................................................... 196
Operating Information:
Full-Time and Part-Time Employees by Function – Last Ten Fiscal Years ......................................... 197
Operating Indicators by Function – Last Ten Fiscal Years .................................................................. 198
Capital Asset Statistics by Function – Last Ten Fiscal Years .............................................................. 200
Cardiff Sanitary Division:
Rate Schedule for Annual Sewer Charges.......................................................................................... 204
Historical Service Charges Billed ........................................................................................................ 205
Ten Largest Customers ...................................................................................................................... 206
Historical Service Connections ........................................................................................................... 206
San Dieguito Water District:
Schedule of Water Rates .................................................................................................................... 208
Bi-Monthly Meter Service Availability Charges .................................................................................... 208
Historic Potable Water System Revenues – Last Ten Fiscal Years .................................................... 209
Historic Recycled Water System Revenues – Last Ten Fiscal Years .................................................. 209
Summary of Water Production by Source – Last Ten Fiscal Years ..................................................... 210
Summary of Water Deliveries by Source – Last Ten Fiscal Years ...................................................... 210
Sales by Customer Class ................................................................................................................... 211
Total Service Connections by Category – Last Ten Fiscal Years ........................................................ 211
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TRANSMITTAL LETTER • INTRODUCTORY SECTION
i
December 15, 2023
Honorable Mayor, City Council and Citizens of the City of Encinitas, California:
It is a pleasure to present the Fiscal Year 2022-23 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,
2023, and includes financial information for the City of Encinitas (“City”), the San Dieguito Water
District (SDWD), 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, 2023, 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
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 61,085 covers approximately 21 square
miles and is predominately residential with two major commercial corridors.
TRANSMITTAL LETTER • INTRODUCTORY SECTION
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.
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 (SDWD), the Encinitas Housing Authority, and the Encinitas Public
Financing Authority.
MUNICIPAL SERVICES
The City provides a full range of municipal services such as:
Fire suppression, prevention and Emergency Medical Services Law enforcement (contract)
Marine safety (lifeguard services) Parks, beaches and trails
Planning and development services Recreation and arts programs
Street and sidewalk maintenance and repair Traffic control and mobility
Wastewater collection Potable and recycled water (SDWD)
Solid waste and recycling (contract) Stormwater management
Urban forest, park and landscape maintenance (contract) Code enforcement
Code enforcement Animal services (contract)
Facilities maintenance (contract) Affordable housing programs
Building permit and inspection services (contract) Open space
Engineering 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 21 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 based at
the San Elijo Water Reclamation Facility located in Cardiff. The former Pacific View
Elementary School site purchased by the City is located at 608 Third Street and is undergoing
renovation for future use as a community cultural arts center.
BUDGETING OVERVIEW
The City develops and adopts both an operating and a capital budget. The operating budget includes
the proposed revenue and expenditure plan for each department over the next fiscal year. The five-
year financial plan and Capital Improvement Program (CIP) is a long-term plan developed to
demonstrate fiscal sustainability and to plan for the construction and replacement of infrastructure
and other capital assets. The Fiscal Year 2023-24 budget returns to an annual budget cycle, replacing
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TRANSMITTAL LETTER • INTRODUCTORY SECTION
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the biennial operating and budget revise cycle initiated in FY 2001-02. The change is intended to
streamline the budget process and facilitate the transition from print to online budget books.
Any changes to the operating or capital budgets must be approved by the City Council. Each year,
the City Council reviews priorities for the year at its annual Council Retreat. A Council priority is
defined as a topic that will receive significant attention and budget consideration during the year.
Typically, priorities have a one to three-year time limit, although some may continue beyond that
time.
Detailed City financial information is available on the City’s website
at: https://www.encinitasca.gov/government/departments/finance/city-financial-reports.
The City’s award-winning budget book and related budget information can be at:
https://www.encinitasca.gov/government/departments/finance/city-budgets.
FACTORS AFFECTING FINANCIAL CONDITION OF THE CITY
Local Economy – The outlook for the local economy continues to be positive. The City’s strong fiscal
health continues as is evident in a balanced budget, full contingency reserves, a debt ratio that meets
City Council policy, and a AAA credit rating from Standard & Poors. Encinitas enjoys a strong and
well-diversified tax base that has performed well in good economic times and has been able to
weather the impacts of slower economic times. Over the years, 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.
The City’s property tax and sales tax revenue has remained strong and increased from the previous
fiscal year. The net taxable assessed value of property in the City has grown 79 percent since Fiscal
Year 2012-13 (ten years ago). For Fiscal Years 2021-22 and 2022-23 taxable values increased 4.9
percent and 9 percent, respectively. Assessed property values have not experienced a decline over the
last seventeen years, even as values hit their lowest point during the Great Recession in Fiscal Year
2010-11. The housing market in Encinitas continues to remain resilient, despite higher interest rates,
with the median sales price for a single-family home at $1,625,000, nearly twice the San Diego
County average of $820,000. Assessed values will continue to increase with the construction of new
residential housing at sites identified in the City’s Housing Element within the next decade, including
the Fox Point Farms and Sunshine Gardens projects.
Also, Encinitas has over 3,300 businesses reporting retail sales within the City. The top 100 sales tax
producers include a wide variety of businesses such as car dealerships, home improvement stores,
big box retail, gas stations, grocery stores and restaurants. Due to the loss of one of the City’s
automobile dealerships in the spring, sales tax revenue fell below the previous year’s total. However,
another dealership will be occupying the space vacated by the departing dealership in 2024. While
inflation remains a general concern, spending at local restaurants and hotels continues to be robust.
Revenues for both hotel and short-term vacation rentals continue to increase year over year. Visitor
spending in the San Diego region has eclipsed pre-pandemic levels, contributing to an increase in
hotel and short-term vacation rental occupancies. Transient Occupancy Tax (TOT) is collected for
both hotel and short-term vacation rentals at a rate of ten percent of the rent charged by the operator.
Eight percent goes to the General Fund, and two percent is restricted to beach sand replenishment
and stabilization projects in the Coastal Zone Management Fund (212). Encinitas’ location along the
TRANSMITTAL LETTER • INTRODUCTORY SECTION
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coast and many visitor amenities (including its beaches, proximity to theme parks and resort hotel)
make it an attractive tourist destination.
Residential and commercial development activity has steadily increased in Encinitas, despite an
increase in borrowing costs (tied to the federal funds rate). As a result, development related revenues
(collected from planning, building, and engineering fees) have increased over the prior year. It is
anticipated that this trend will continue as a number of large residential development projects
providing affordable housing have been approved and are expected to proceed in the near future, as
part of the City’s Housing Element.
Modest revenue growth is expected in future years from FY 2023-24 through FY 2028-29. While
escalating property values result in additional property tax when homes are sold, less inventory exists
and there remains a need for affordable housing and homeless resources. Inflation, wage growth and
increasing commodity prices are resulting in greater operating and capital costs.
Given the forecast of modest growth in revenues due to economic uncertainties and rising costs due
to wage and inflationary pressures, the City's long term fiscal health must be addressed through more
sustainable approaches to address the community's service needs and, more concerning due to aging
and increasing costs to repair, the City’s CIP priorities into the future. In light of these developments,
Council authorized the creation of a Infrastructure Task Force consisting of seven community
members to study the City’s aging infrastructure and funding opportunities in the future.
General Fund Revenue - Property tax, sales and use tax, TOT and other tax revenue represent
approximately 84 percent of the City’s total General Fund revenue. Property tax revenue in FY 2022-
2023 totaled $61.5 million which was an increase of $5.0 million, or 8.9 percent, compared to FY
2021-22. Sales and use tax revenue in FY 2022-23 decreased by approximately $372,000 or 2.1
percent, to $17.1 million compared to FY 2021-22. TOT totaled approximately $4.8 million, an
increase of approximately $384,000, or 8.6 percent compared to FY 2021-22. Total General Fund
revenues for FY 2022-23 of $100.2 million increased by approximately $7.9 million, or 8.6 percent
compared to revenues in FY 2021-22 of $92.3 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. 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 $61.1 million of general fund bonded debt, financed purchases,
subscription and lease liabilities outstanding at June 30, 2023, with scheduled payments of principal
and interest of $4.5 million in FY 2022-23. This debt service as a percentage of the General Fund
budget is 5.0 percent, which is well below the City’s debt service policy which states that debt service
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paid each year shall not exceed 15 percent of the General Fund budget. The 2008 Roof Lease was
paid off in February 2023, removing $0.18 million of annual debt service from future budgets.
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,
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. 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 $20.0 million and funding available for capital
improvements was $18.3 million as of June 30, 2023.
ACCOMPLISHMENTS
Based on direction by the City Council, highlighted below are the City’s accomplishments this fiscal
year.
Grand Opening of El Portal Undercrossing. Construction of the City’s second rail undercrossing
project at El Portal Street was completed in 2022 and created a new pedestrian and cyclist crossing
under the railway to provide a safe connection between the neighborhoods, school, residences and
businesses in the area.
Completed groundbreaking and met the construction timeline for the Pacific View Site Project.
This project encompasses the renovation of the former Pacific View Elementary School campus into
a new arts and cultural center. Improvements will include replacing the existing roofing, electrical
panels, wiring, restrooms, light fixtures, ceilings, glass, doors, frames, finishes, and other upgrades.
Homelessness Programs. Implemented a streamlined reporting process of unhoused individuals
through the MyEncinitas application (“app”). Also, the Homeless Outreach Program for
Empowerment (HOPE) began in 2020 as a partnership between the City, County, Sheriff’s
Department and the Community Resource Center to provide outreach to individuals that are living
on our streets. Another program of note is the Safe Parking Program run by Jewish Family Services
that provides individuals living in their vehicles a safe place to park at night where they can receive
services.
The City continues to make progress on its Homeless Action Plan (HAP). The hiring of a Homeless
Solutions Manager has amplified the City’s presence on the street and in the region and has already
resulted in 60 individuals being housed since February 2023. To date, staff has held two public
meetings regarding the HAP in April and August 2023 and the City received a $665,000 grant to
provide shelter and wrap-around services to unhoused individuals at a shared location with the City
of Vista.
Staff also provided emergency one-night vouchers paid for by the City during the August 2023
Hurricane Hilary heavy rainstorm event, providing needed shelter to 17 unhoused individuals at an
area motel.
Completed Cycletrack Phase II. The Phase II project included slurry sealing of South Coast
Highway 101 from Chesterfield Drive to K Street and added a two-way cycle track on the west side
TRANSMITTAL LETTER • INTRODUCTORY SECTION
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of South Coast Highway 101 as well as bike lanes in each direction to improve mobility. It also
implemented additional traffic calming measures and increased parking capacity.
Completed Citywide Sewer Master Plan. The plan identifies recommended pipeline rehabilitation
projects, pipeline capacity improvements, pump station operational and capacity improvements, and
several miscellaneous projects. Projects have been prioritized based on capacity and rehabilitation
needs.
Completed Lake Drive emergency repair. In January 2023, a sinkhole occurred on Lake Drive
because of excessive rain that prompted state and federal emergency declarations. The sinkhole was
in the vicinity of the steep section of 48-inch corrugated metal pipe that conveys runoff from the road
down to the bottom of a canyon. A 10- foot section of existing sidewalk on the west side of Lake
Drive was hanging above a 15-foot-deep void. Due to the proximity of the sinkhole to the sidewalk
and roadway, it was determined that immediate repairs should be completed to minimize public safety
hazards and stabilize the area to prevent further damage to the sidewalk and roadway. Emergency
repairs removed the steep section of old corrugated metal pipe, replacing it with the reinforced
concrete pipe, as well as repairs to the sidewalk and road.
Financing for Leucadia Streetscape Project, Segment C. The City applied and received approval
of a $20 million loan from the California Infrastructure and Economic Development Bank (I Bank)
to finance the Leucadia Streetscape, Segment C Westside Improvements Project. The project is a
major streetscape project which will improve mobility, accessibility, and parking conditions in
addition to installing traffic calming measures along the North Coast Highway 101. The City closed
on the loan ahead of schedule to preserve a lower interest rate ahead of interest rates being raised,
saving the city over $500,000. The loan will be repaid at a rate of 3.3 percent over 15 years.
Customer Service Improvements. Permit applicants are now able to utilize the features of the City’s
Customer Self Service (CSS) portal. All documents associated with a discretionary permit application
are now available for the public to view through CSS including project drawings, technical studies,
staff comment letters, and public correspondence. Applicants are now able to request inspections
through CSS instead of calling and waiting for confirmation from the City. Information Technology
support is available to applicants for issues related to uploading documents. This has been well
received and appreciated by applicants. In addition, staff implemented a weekly update of building
permits online for easier access by the public. Also, all payment platforms now accept credit card
payments and those made by electronic check (e-Check).
New Accounting Standards. City staff implemented three new Governmental Accounting Standards
Board (GASB) Statement reporting requirements including GASB No. 87 (Leases), GASB No. 94
(Public-Private and Public-Public Partnerships and Availability Payment Arrangements), and GASB
No. 96 (Subscription-Based Information Technology Agreements).
Funding for Parks and Trails Improvements. City staff secured four grants totaling $1.65 million
to upgrade Cardiff Sports Park lighting, replace playground equipment at Wiro and Orpheus Parks,
and improve beach access and make trails improvements in Olivenhain.
Mobility improvements. Completed the installation of a decomposed granite (DG) path from the La
Costa Avenue bridge to Vulcan Avenue; ADA ramps on Rancho Santa Fe Drive; Pedestrian
improvements on Manchester Avenue; Pedestrian crossings on Diana Street and North Court and
North Coast Highway 101; and bike lane revisions on North Coast Highway 101.
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Annual Street Resurfacing Program. Improving pavement condition citywide is an ongoing goal
of the City of Encinitas. Each year an annual list of streets to resurface is prepared based on existing
condition, need and available funding. This past year, resurfacing was completed on 29 streets
including, but not limited to: Birmingham Drive, Lake Drive, Montgomery Avenue, South Coast
Highway 101 and West E Street.
Open Space Preservation. The City acquired 1.43 acres located at the northeast corner of North
Coast Highway 101 and La Costa Avenue. The property is situated on the border of Encinitas and
Carlsbad with views of the Pacific Ocean and the Batiquitos Lagoon. The parcels are currently vacant
land.
San Diego County Coastal Storm Damage Reduction Project. Encinitas is part of a collaborative
coastal storm damage reduction project with the U.S. Army Corps of Engineers and the City of Solana
Beach. Its goal is to reduce storm and sea level rise related to coastal damage and erosion by adding
sand along 7,800 feet of coastline. Funding is comprised of local, state and federal sources, and the
project is currently in the pre-construction, engineering and design phase. The Cities of Encinitas and
Solana Beach were awarded a state grant from California State Parks Division of Boating and
Waterways in the amount of $11.5 million to be applied to the Non-Federal Sponsor’s share of the
cost for the initial nourishment. A Project Partnership Agreement (PPA) and Right-of-Entry Permit
(ROE) to allow construction of the project was executed in December 2022. Initial construction is
expected to begin in 2024.
Agreements for Crossing Guard Programs. The City worked with San Dieguito Union High
School District and Encinitas Union High School District to develop Memorandum of Understanding
(MOU) Agreements for Crossing Guard Programs in each District for the 2023-24 school year.
Community Safety. Encinitas earned the rank of 28th safest City in California according to the most
recent Safewise Safest Cities Report. San Diego Sheriff’s North Coastal staff have participated in
numerous community events, including Coffee with the Community, town hall meetings, National
Night Out, Taste of Encinitas, and other special events. The North Coastal deputies have greatly
increased their Deputy Initiated Activities in areas of concern identified by Crime Analysts.
The Fire Department implemented “Determinant Dispatching” to reduce the number of emergency
vehicles driving “Code 3” (lights and sirens) to emergencies. The City also adopted an updated
Hazard Mitigation Plan in June 2023. The intent of the plan is to articulate needs for mitigation,
resulting in faster allocation of funding and more effective risk reduction projects. The 2023 update
reflects public feedback regarding hazard concerns, and updated hazard mitigation goals, objectives,
actions/priority actions for the County of San Diego and cities within the region to align with current
and existing countywide plans, procedures, and priorities. The update ensures the City’s plan remains
relevant and current.
Encinitas Boulevard and I-5 Undercrossing Mosaic Installation. As part of the North Coast
Corridor Program, the two Interstate 5 under crossings located in Encinitas at Santa Fe Drive and
Encinitas Boulevard were redesigned. The City of Encinitas had the opportunity to work with
Caltrans on adding artistic elements that would reflect the culture of the city to the side walls of the
under crossings. Installation of the mosaic tiles on the Encinitas Boulevard and I-5 undercrossing was
completed on or about December 2022
Citizens Academy. The City’s inaugural academy concluded in Spring 2023.
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Public Health and Safety Commission. This newly created citizens commission acts in an advisory
capacity and is responsible for communicating and cooperating with City departments and the City’s
law enforcement services provider (San Diego Sheriff’s Department), individual citizens, mental and
social services providers and community groups in identifying public health and safety concerns and
recommending solutions to the City Council for consideration. The Committee also promotes
cooperation and encourages coordination between the Commission, the Fire Department, and the
City’s law enforcement services provider, and other entities, public and private, who are involved
with community safety activities and efforts.
Stonesteps Beach Access Stairway Repairs. Repairs to the stairway to Stonesteps Beach were
completed in summer 2023, which included repair and replacement of the beams, brackets, and
hardware.
Infrastructure Task Force. In November 2022, the City Council authorized the creation of a
Infrastructure Task Force consisting of community members to evaluate the City’s infrastructure
backlog, prioritization process, and anticipated financial needs and opportunities for funding for
future infrastructure.
Approval of the Modal Alternatives Project Implementation Plan (MAP Encinitas). The City
Council approved the MAP Encinitas in February 2023. MAP Encinitas provides the City of
Encinitas with a prioritized list of bicycle and pedestrian projects that reflects the community’s
desires and values, including conceptual plans and cost estimates for the top 35 projects. Public
outreach, including an online survey and two community workshops, was integral to the development
of the MAP Encinitas prioritization criteria and methodology.
MAJOR INITIATIVES AND PROJECTS
On Tuesday, February 14, 2023, the City Council selected the following elements to include as the
categories for its highest priorities:
• Mobility and Alternate Modes
• Engagement and Education
• Housing and Affordability
• Fiscal Stewardship and Effective City Services
• Evolving and Preserving Community Character
• Environmental Health and Leadership
Highlighted below are the projects that align with the above-mentioned focus areas:
Mobility. The Mobility Element is a section of the City’s General Plan that identifies a multimodal
transportation network to serve the community’s needs. The last comprehensive update to the
Mobility Element was in 1989, when the population was lower and transportation options were very
different. Since then, Encinitas has grown to nearly 61,085 residents and transportation options
continue to expand. In Spring 2021, the City began a project to update its Mobility Element—
previously known as the Circulation Element—and create a framework to implement Senate Bill 743
(SB 743), a new state law governing transportation analysis. The City has held two community
workshops to discuss the Element’s proposed goals and street network. The project is expected to be
completed in FY 2023–2024.
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The City recently created a Mobility Manager position to better coordinate planning and engineering
efforts (Vision Zero, Circulation Element, traffic control, infrastructure improvements and CIP
projects), and work with the community to identify and implement practical solutions for mobility.
The Mobility Manager is currently engaging with stakeholder groups, schools and City staff for more
program enhancements, including more bicycle safety training for the public.
In April 2023, staff presented the Safe Routes to School design plans and specifications to City
Council for approval and authorization to advertise for construction bids. The Safe Routes to School
Projects are designed to provide safe pedestrian crossings in the vicinity of Diegueno Middle School,
Oak Crest Middle School, Capri Elementary School, and Ada W. Harris Elementary School. The
project was advertised to solicit construction bids in June 2023 and the work will begin in late
October/early November 2023.
Leucadia At-Grade Rail Crossings. Conceptual plans for two new at-grade railroad crossings for
pedestrians and cyclists at Grandview Street and Phoebe Street were prepared in January 2023 and
shared at a public neighborhood meeting to gather comments from residents. In March 2023, staff
requested funding for the next phase of the project, which includes 30 percent design and a California
Public Utilities Commission (CPUC) application. In June 2023, Staff finalized the Site Project Study
Report. The project is moving into Phase 2 which involves preparing the full CPUC application and
performing preliminary 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.
Design began on the next segment of Leucadia Streetscape at the north end of the corridor between
Jupiter Street and La Costa Avenue. This segment will include new wider sidewalks, green separate
bike lanes, enhanced crosswalks, roundabouts at Grandview and Jupiter, more parking and new trees.
This project focuses on the west side of the 101 and retains the existing medians.
Construction of the Segment C and North Highway 101 drainage work is moving forward for a Fall
2023 groundbreaking. This work should take 18-24 months and is expected to finish in 2025. Staff is
also pursuing an MOU with North County Transit District (NCTD) to share costs for bus shelters
along the Streetscape corridor. If this is successful, it is likely that these shelters could be constructed
with the drainage and Segment C base bid work moving forward.
In February 2023, Council approved, and staff submitted for a FY23 Rebuilding American
Infrastructure with Sustainability and Equity (RAISE) Grant for Leucadia Streetscape Segment A1.
This section of the corridor runs from A Street to Marchetta Street.
Staff also completed construction on Streetscape Segment B striping from Basil Street to Jupiter
Street in May 2023. These improvements included striping bike lanes and improving parking along
this section North Coast Highway 101 through Leucadia.
Santa Fe Drive Corridor Improvements. The project will focus on connection to schools and will
improve mobility for pedestrians, bicyclists, and vehicular traffic, while also improving safety and
connectivity. Improvements include the construction of new bike ways (separated where possible),
new sidewalks, and the addition of a signalized pedestrian crossing near San Dieguito Academy
(SDA) High School. The project will also construct new curb, gutter, asphalt concrete berm and
driveways. The project has been split into an east and west phase. The City recently received a $3
million grant from the State of California for the project. Construction is anticipated to begin
TRANSMITTAL LETTER • INTRODUCTORY SECTION
x
December 2023 on the western phase (Gardena Road to Evergreen Drive). Construction of the east
phase (Evergreen Drive to El Camino Real) is targeted for fall 2023, pending funding availability.
Benefits of the project include:
• Improved mobility and safety throughout the entire corridor, including access to schools,
through new bikeways, sidewalks and intersection improvements.
• Added storm water management measures through new landscaping and trees.
• New proposed protected intersection at Mackinnon Avenue and Nardo Road.
• New proposed protected intersection at Windsor Road and Bonita Drive.
• Separated bikeways where possible, buffered bike lanes in other locations.
Rancho Santa Fe (Trail 82) Design and Construction. This project will incorporate existing trail
elements along the east side of Rancho Santa Fe Road and provide a multiuse trail that connects
Encinitas Boulevard to Camino Del Norte. Trail 82 consists of a Decomposed Granite trail that runs
4,900 feet long. It will have a composite fence that runs the length of it on the traffic adjacent side.
The initial project design was delayed due to numerous challenges with easements, utilities, and new
private developments affecting trail alignment. The project is currently in design and expected to be
at 100% design by December 2023.
Housing in Encinitas. On July 13, 2021, the State of California’s Department of Housing and
Community Development approved the City’s Sixth Cycle Housing Element (2021–2029). As part
of the Housing Element, the City has identified programs and activities to implement over the next
four years to identify and address constraints on development as well as affirmatively furthering fair
housing opportunities and promoting housing throughout the community for all persons. The Housing
Element also identified 14 sites for future housing that would be available to lower income
households.
In March 2023, the City Council directed staff to bring back a proposal for a 100% affordable housing
project on one of the sites located at 634 Quail Gardens Drive (otherwise known as the L-7 property).
The City’s award-winning Permit Ready Accessory Dwelling Unit (PRADU) program was launched
in April 2019. These units, perhaps better known as granny-fats, continue to be an integral part of
Encinitas’ housing conversation.
Citywide Quiet Zone. In March 2023, Council approved a Memorandum of Understanding (MOU)
with North County Transit District (NCTD) for the design of Quiet Zone improvements and staff
submitted funding requests through Senator Padilla and Senator Feinstein’s office for $5 million in
Congressionally directed spending for Quiet Zone construction. The schedule going forward is to
solicit proposals from engineering firms to prepare design plans and studies for the project. Staff
intends to award a design contract in October 2023 and complete the design by Summer 2024. The
limits of the proposed quiet zone will include E Street, D Street, Encinitas Station, and Leucadia
Boulevard.
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.
The City’s CAP set a goal of transitioning the municipal fleet to “zero emission” vehicles (ZEV) by
2030. Since the development of the City’s ZEV Fleet Conversion Plan in 2018, more than 23 fleet
TRANSMITTAL LETTER• INTRODUCTORY SECTION
vehicles have been converted to alternative fueled vehicles. In 2023, the City's fleet included 9
battery-electric vehicles, 13 hybrid vehicles, and 1 plug-in hybrid for a total of 23 alternative fuel
vehicles, 44 percent of the light duty fleet.
Encinitas Habitat Stewardship Program. The Encinitas Habitat Stewardship Program (EHSP) was
created by the City in 2020 to help with the upkeep of City-owned properties that contain sensitive
habitat. The first site was at Cottonwood Creek, where the program was launched in partnership with
the San Diego Botanic Garden. To date, Garden staff and volunteers have removed over three acres
of invasive ice plant and replanted the area with native species. Establishment and plantings continued
into 2023. Efforts focus on invasive removal, slope stabilization and planting native species. The
budget for the EHSP was increased to $200,000 for FY 2023-24. In October 2022, the City Counc il
directed staff to continue working with a subcommittee to create a native plant ordinance for the City.
Detailed information regarding these city projects and others can be found on the City's website at
https :/ /www .encinitasca.gov/ government/city-projects.
A WARDS AND ACKNOWLEDGEMENTS
During 2021, the City was awarded a Distinguished Budget Presentation Award from the
Government Finance Officers Association (GFOA) for its FY 2021-2022 and 2022-2023 budget.
The City meets the program criteria of publishing a budget document as a policy document, as a
financial plan, as an operations guide and as a communications device. This award is the highest form
of recognition in governmental budgeting.
The Government Finance Officers Association (GFOA) awarded its Certificate of Achievement for
Excellence in Financial Reporting to the City of Encinitas for its Annual Comprehensive Financial
Report for the fiscal year ended June 30, 2022. The City believes that the FY 2022-23 Annual
Comprehensive Financial Report continues to meet the GFOA criteria for the award.
CONCLUSION
We deeply appreciate the dedication and leadership of the Mayor and Council Members who have
consistently supported our goal of excellence in all aspects of financial management. The completion
of this report could not have been accomplished without the dedication and hard work of the entire
staff in the Finance Department. Special recognition goes to the Finance Reporting team, Monica
Attili, Stella Huang, Alexis Angelini, Catherine Wong and Jenarae Benavente for their work with the
auditors and the coordination of the preparation of this report.
Respectfully submitted,
q)MvJ--w� ' • -Pamela W. Anti!
City Manager
Teresa S. McBroome
Director of Finance/City Treasurer
XI
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xii
LIST OF CITY OFFICIALS
As of June 30, 2023
CITY COUNCIL
Mayor Tony Kranz
Deputy Mayor Joy Lyndes District 3
Council Member Bruce Ehlers District 4
Council Member Kellie Shay Hinze District 2
Council Member Allison Blackwell District 1
EXECUTIVE TEAM MEMBERS
City Manager Pamela Antil
Assistant City Manager Jennifer Campbell
Director of Administrative Services Jace Schwarm
Director of Legislative Services/City Clerk Kathy Hollywood
Director of Development Services Roy Sapa’u
Director of Engineering Jill Bankston
Director of Finance/City Treasurer Teresa S. McBroome
Director of Human Resources/Worker’s Tom Bokosky
Compensation
Director of Information and Technology Jessica Contreras
Director of Parks, Recreation & Cultural Arts Travis Karlen
Fire Chief Josh Gordon
xiii
Electorate
City Council
City Manager City Attorney
Assistant City
Manager
Fire and
Marine Safety
Human
Resources
Information
Technology
Public Works
Utilities
(San Dieguito
Water District and
Wastewater)
Engineering
Finance
Administrative
Services
City Clerk
Development
Services
Parks,
Recreation, &
Cultural Arts
Commission
for the Arts
Environmental
Commission
Parks &
Recreation
Commission
Planning
Commission
Senior
Commission
Traffic and
Public Safety
Commission
Youth
Commission
City of Encinitas Organization Chart
xiv
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Encinitas
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
xv
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FINANCIAL SECTION
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Independent Auditor’s Report
City Council
City of Encinitas
Encinitas, California
Report on the Audit of the Financial Statements
Opinions
We have audited the 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 June 30, 2023, and the related notes to the
financial statements, which collectively comprise the City’s basic financial statements as listed
in the table of contents.
In our opinion, based on our audit and the report of the other auditors, the accompanying
financial statements 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, as of June 30, 2023, and the respective changes in
financial position and cash flows thereof for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
We did not audit the financial statements 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 financial statements were audited by other auditors whose report thereon has been
furnished to us, and our opinion, insofar as it relates to the amounts included for R.E. Badger
Joint Powers Authority, R.E. Badger Financing Authority, San Elijo Joint Powers Authority, and
Encina Wastewater Authority, is based solely on the report of the other auditors.
Assets Net Position Expenses
Business-type Activities 12.35%17.06%3.53%
Each Major Enterprise Fund:
Cardiff Sanitary District 52.72%63.31% 42.48%
San Dieguito Water District 33.40%39.76% 12.47%
Encinitas Sanitary Division 21.47%21.51% 26.82%
Opinion Unit
1
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America (GAAS) and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities
for the Audit of the Financial Statements section of our report. We are required to be
independent of the City and to meet our other ethical responsibilities, in accordance with the
relevant ethical requirements relating to our audit. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
As described further in Note 9 and Note 19 to the financial statements, during the year ended
June 30, 2023, the City implemented Governmental Accounting Standards Board (GASB)
Statement No.96, Subscription-Based Information, which resulted in a restatement of
beginning net position. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
The City’s management is responsible for the preparation and fair presentation of the financial
statements in accordance with accounting principles generally accepted in the United States
of America, and for 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.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the City’s
ability to continue as a going concern for one year after the date that the financial statements
are issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in
accordance with GAAS will always detect a material misstatement when it exists. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control. Misstatements are considered material if there is a
substantial likelihood that, individually or in the aggregate, they would influence the judgment
made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, and design and perform audit procedures responsive to
those risks. Such procedures include examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements.
2
Obtain an understanding of internal control relevant to the audit 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,
no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the City’s ability to continue as a going
concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain
internal control–related matters that we identified during the audit.
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 is the responsibility of
management and, 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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City’s basic financial statements. The combining and individual
nonmajor fund financial statements and budget to actual schedules are presented for
purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and budget to actual
schedules are the responsibility of management and were derived from and relate directly to
the underlying accounting and other records used to prepare the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the
United States of America.
3
In our opinion, the combining and individual nonmajor fund financial statements and budget
to actual schedules are fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
Other Information
Management is responsible for the other information included in the Annual Comprehensive
Financial Report. The other information comprises the introductory section and statistical
section but does not include the financial statements and our auditor's report thereon. Our
opinions on the financial statements do not cover the other information, and we do not
express an opinion or any form of assurance thereon. In connection with our audit of the
financial statements, our responsibility is to read the other information and consider whether
a material inconsistency exists between the other information and the financial statements,
or the other information otherwise appears to be materially misstated. If, based on the work
performed, we conclude that an uncorrected material misstatement of the other information
exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 15, 2023 on our consideration of the City’s internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is solely to describe the
scope of our testing of internal control over financial reporting and compliance and the results
of that testing, and not to provide an opinion on the effectiveness of 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 the City’s internal control over
financial reporting and compliance.
Irvine, California
December 15, 2023
4
City of Encinitas
Management’s Discussion and Analysis
For the Year Ended June 30, 2023
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, 2023. 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 $39.4 million. This is due to a $40.0 million increase
in governmental activities and a $0.6 million decrease in business-type activities.
The City’s total net position increased overall by $19.7 million compared to the previous year. The
governmental activities increased $17.0 million and business-type activities increased $2.7
million. Total assets increased $39.4 million, total liabilities increased $64.6 million, deferred
outflows increased $19.8 million, and deferred inflows decreased $25.1 million.
The City’s total revenues increased $14.1 million from 2022.
Governmental activities revenues increased $12.6 million
Business-type activities revenues increased $1.5 million
The City’s total expenses increased $13.2 million from 2022.
Governmental activities expenses increased $13.7 million
Business-type activities expenses decreased $0.5 million
The City’s total net pension liability increased $37.8 million from 2022.
Governmental liability increased $34.3 million
Business-type liability increased $3.5 million
The City’s total OPEB liability increased $1.9 million from 2022.
Governmental liability increased $1.8 million
Business-type liability increased $0.1 million
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, 2023
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, 2023
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.
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
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
7
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
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, 2023 is compared to the results for 2022 in Table 1.
8
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
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. The Net
position for Fiscal Year 2021-22 was restated to reflect the implementation of GASB 96, the effects of
which are included in this analysis. Net position for the City as a whole increased 5.2 percent from $378.3
million on June 30, 2022, to $398 million at June 30, 2023.
The overall increase in total assets is $39.4 million when compared to the previous year. The
governmental activities total assets increased $40.0 million compared to the previous year with an
increase in cash and investments and capital assets offset by a slight decrease in lease receivables. The
business-type activities total assets decreased $0.6 million compared to the previous year with primary
decreases in inventory and prepaid items, investment in joint ventures, and lease receivables offset by
increases in cash and investments and capital assets.
The overall increase in total liabilities is $64.6 million when compared to the previous year. This is
primarily attributable to substantial increases in long-term liabilities, net pension, and other
postemployment benefit (OPEB) liabilities.
The increase in total assets of $39.4 million, increase in total liabilities of $64.6 million, offset by the
decrease in deferred inflows of $25.1 million and increase in deferred outflows of $19.8 million results in
an increase in the City’s total net position of $19.7 million, or approximately 5.2 percent, compared to
2022. See Table 1.
9
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
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, Planning Services, Engineering Services, 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, 2023
Note: Program revenues only include charges for services, operating grants and contributions, capital grants and contributions and do
not include general revenues.
Chart 2 Property taxes, sales and use taxes, charges for services, operating grants and contributions
and other taxes are the top five categories of total revenue and comprise 90.8 percent of funding for
governmental activities. The remaining categories include, capital grants and contributions, investment
income, intergovernmental and other.
11
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
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 $2.7 million from the last fiscal
year. The program revenues and general revenues totaled $30.2 million, exceeding total expenses of
$27.5 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 $0.3 million in program revenues and an increase of $1.2 million in general revenues from the previous
year. The primary reason for the increase in operating revenue during Fiscal Year 2022-23 was
attributable to an increase in usage of sewer services offset by a decrease in water usage due to the
statewide drought. The operating revenues in SDWD decreased 1.3 percent over prior year. The
operating revenues in Cardiff Sanitary Division (CSD) increased 8.5 percent and the Encinitas Sanitary
Division (ESD) increased 9.6 percent compared to the previous year also due to an increase in usage.
The operating revenues in Affordable Housing (AH) increased 5.9 percent due to an increase in grants
over prior year.
Operating expenses for business-type activities decreased $0.5 million over prior year. Operating
expense for SDWD decreased $1.9 million compared to the previous year which is consistent with the
decrease in water usage which lowered the cost of water treatment. CSD operating expense increased
$1.2 million, ESD operating expense increased $0.2 million, and AH operating expense increased $0.1
million due to inflationary costs in personnel, utilities, and chemicals. The net effect of the overall increase
in revenue and decrease in expenses resulted in a $2.0 million increase in net income over prior year.
Overall, program revenues and general revenues exceeded program expenses during Fiscal Year 2022-
23 resulting in a total net increase in net position of $2.7 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.
12
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
Note: Program revenues only include charges for services, operating grants and contributions, capital grants and contributions and do not
include general revenues.
GENERAL FUND BUDGETARY HIGHLIGHTS
General Fund Revenues $3.8 million above projections
General Fund actual revenues of $100.2 million were $7.9 million, or 8.5 percent, higher than the original
adopted budget and $3.8 million, or 3.9 percent, higher than the final amended budget. Actual revenues
were higher by $7.9 million, or 8.6 percent, when compared to Fiscal Year 2021-22.
For budgeting purposes, the City’s revenue projections have historically been conservative. Table 3
compares revenue projections to actual revenue received, by revenue source:
Table 3
13
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
Actual operating revenue in Fiscal Year 2022-23 (excluding transfers in) exceeded projections by
approximately $3.8 million. Significant variances can be attributed to:
Property taxes are the City’s largest revenue source, making up 61 percent of General Fund
revenue. The City experienced a net taxable value increase of 8.9 percent for the 2022-23 tax
roll, which was modestly more than the increase experienced countywide at 8.4 percent. The
increase in assessed value primarily resulted from transfers of ownership and the Proposition 13
allowable maximum inflationary adjustment of two percent. Sales price increases in 2021 were
reflected on the Fiscal Year 2022-23 tax rolls. The increase in assessed values reflect continued
strength in the local and regional housing market. Many cities saw median price increases due to
low interest rates, high demand, and limited properties. The largest assessed value increase for
the City was reported on a commercial parcel owned by Encinitas Beach Hotel Venture LLC.
Total property tax revenue collected in Fiscal Year 2022-23 exceeded budget projections by $1.8
million, which was the result of higher than anticipated receipts from secured supplemental billings
and documentary transfer tax (associated with transfers of ownership); additional unsecured
property tax from increased or new assessments for Scripps and the Encinitas Beach Hotel; and
a lower-than-expected delinquency rate.
Sales and use taxes are the City’s second largest revenue source, accounting for 17.1 percent of
the City’s revenues, The largest economic segments in the city are general consumer goods,
state, and county pools (mainly the City’s share from on-line sales transactions), restaurants,
hotels, and automobile dealers. Actual revenue received was approximately $0.5 million below
the projection for Fiscal Year 2022-23 due to the relocation of a luxury car dealership in spring
2023.
Revenue recorded in the Franchise Fees category exceeded projections by approximately $0.2
million primarily due to an increase in the fee collected from San Diego Gas and Electric, which
was the result of an increase in the price of electricity and natural gas. The City experienced slight
reductions in revenue collected from cable and satellite television providers as the number of
subscribers continued to decline due to competition from streaming services.
The City collects a Transient Occupancy Tax (TOT) of 10 percent of the rent amount collected on
all occupancies less than 30 days (transient) in duration. General Fund revenue exceeded
projections by approximately $0.9 million, mostly due to continued demand for short-term vacation
rentals and increased reporting and compliance from owners. Revenue collected from TOT is
apportioned 80 percent to the General Fund and 20 percent to the Coastal Zone Management
Fund for sand replenishment and shore stabilization.
In the Licenses, Fees and Permits category, revenue from permit fees collected for short-term
vacation rentals were slightly higher than expected primarily due to a $0.1 million increase in
short-term vacation rental permit fees resulting from increased code enforcement of unpermitted
hosts.
Intergovernmental revenue was 12.5 percent higher than projected. The cities of Solana Beach
and Del Mar contributed more for their share of costs under the cooperative agreement for fire
management services with the City.
14
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
The variance in the fines, forfeitures, and penalties is primarily due to a $0.1 million increase in
parking citations resulting from increased code enforcement by the Sheriff and parking contractor.
The Use of Money and Property category was 8.9 percent above projections which includes a
$0.6 million decrease in the change in fair value of investments offset by interest earnings on cell
tower leases. The City is required to recognize unrealized gains and losses related to fair values.
The implementation of GASB 87 requires that leases recognize interest based on an incremental
borrowing rate.
The Other revenue category was 73.1 percent above projections. This reflects $0.5 million in one-
time Encinitas Ranch Golf Authority surplus net revenue payment to City.
General Fund Expenditures $10.0 million under budget
Operating expenditures for the fiscal year (excluding transfers out) were approximately $10.0 million
under budget. Table 4 compares the expenditure budget to actual expenditures for the fiscal year by
type:
Table 4
The overall variance in the Personnel category of $2.9 million was the result of vacancies across
City departments and new hires entering positions at lower grades or steps than originally
budgeted.
Expenditures on Materials and Supplies in Fiscal Year 2022-23 were approximately $0.3 million
under budget partially due to a delay in furniture and fixtures delivery and installation (which has
been included in FY 2023-24 as a continuing appropriation to pay for the furniture and fixtures).
Additionally, expenditures on computer hardware and software were lower than anticipated and
there were savings in postage due to greater use of other mediums of communication, such as
e-mail, the City’s website, and social media. The purchase of park, beach, trail, and recreation
supplies and fixtures was delayed due to supply chain issues that increased lead times.
15
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
The Contracts and Services category was approximately $7.5 million under budget, which was
primarily a result of variances in the following:
Law enforcement services- expenditures for law enforcement services were $4.2 million lower
than anticipated due to the receipt of the second tranche of ARPA funds. $8.2 million of ARPA
funding was authorized for sheriff contract services late in Fiscal Year 2021-22. However, only
$4.1 million of funding was received. The remaining amount was received in Fiscal Year 2022-
23.
Park, beach and trail maintenance-contract expenditures and utilities costs were $0.5 million
under budget.
Information technology-service contracts were under budget by approximately $0.4 million as
the demand and cost of services was lower than anticipated.
Street and storm water system maintenance- $0.3 million under budget.
Facility operations and maintenance-costs (including utilities) were approximately $0.3 million
lower than anticipated.
Engineering and inspection services-$0.3 million lower than anticipated.
Expenditures for community center, senior and recreation programs were $0.2 million lower
than anticipated.
Excess of Revenues over Expenditures $13.8 million above projections
Actual revenues over expenditures were approximately $24.1 million, compared to a budget of $10.3
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. Refer to Note 2 in the Required Supplementary Information of the ACFR.
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. Actual transfers in for operating expenditures were $1.1 million. Transfer in for returns on
remaining capital projects were $1.5 million. A $20.0 million loan from the California Infrastructure and
Economic Development Bank (IBank) for the Leucadia Streetscape project was initially budgeted in the
General Fund but was recorded in the Capital Projects funds due to the restrictions on use of the funds.
Transfers out of the General Fund operating category were $145,890 more than projected. 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 $31.8 million which included $20 million
of expenditures to be funded from the IBank loan proceeds. Excluding the loan proceeds appropriations
for capital projects from General fund sources totaled $11.8 million compared to $11.7 million in 2022.
Transfers out for debt service totaled $4.1 million which increased by $0.5 million as compared to 2022
due to the new IBank Loan debt service payments.
16
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
Analysis of Fund Balance and Changes in Fund Balance
Fund balance was projected to be $20.4 million as of June 30, 2023, a scheduled decrease of about $8.8
million. Actual fund balance was $34.8 million, or $14.4 million higher than projected; as mentioned
above, revenues were $3.8 million above projected, and expenditures were $10.0 million under projected.
Net transfers out were lower by $0.6 million.
There was an excess of revenues over expenditures of $24.1 million. Factoring net transfers for operating
expenditures, debt service payments, and capital expenditures of $18.6 million, the net result is an
increase in total fund balance of $ 5.5 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, 2023 had a deficit fund balance of $13.9
million due to expected grant funding and commitments that are funded on a reimbursement basis. The
Capital Improvements Capital Projects Fund had a total fund balance of $64.3 million at the end of Fiscal
Year 2022-23 primarily due to the City’s unspent loan proceeds from the IBank loan in the amount of
$20.0 million to be used in the City’s Streetscape project.
CAPITAL ASSETS AND THE CAPITAL IMPROVEMENT PROGRAM
As of June 30, 2023, the City had approximately $308.5 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,
$247.2 million is classified as capital assets under the category of governmental activities, and $61.3
million is classified as capital assets of business-type activities. For more detailed information on capital
assets activity refer to Note 8. In addition, there are $67.9 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: $247.2 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
17
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
expenditure. Eligible project costs are additions to construction in progress (CIP) at fiscal year-end. Costs
for completed projects are recorded as additions to the appropriate capital asset category at year end.
The City spent approximately $24.0 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, City Hall Renovations, separated bike
lanes, and ongoing pavement overlay projects as well as the repair and reconstruction of various streets
and drainage from storm damage.
Business-type Activities
Capital Assets: $61.3 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 $61.3
million increased compared to the prior year’s amount of $59.9 million. During the year, CSD and ESD
capitalized sewer line rehabilitation improvements.
The City’s Affordable Housing Fund carries an investment of about $2.1million 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: $67.9 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.
18
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
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 decreased $1.0
million and the joint venture in the San Dieguito Water District decreased $0.7 million.
DEBT ISSUANCE AND ADMINISTRATION
The City has a total of $83.7 million of long-term obligations for both governmental and business-type
activities as shown in Note 9 of the basic financial statements. The governmental activities debt totaling
$61.1 million includes $2.5 million in leased financing, $1.4 million in subscription and lease liabilities,
and $57.2 million in bonded debt. Besides $61.1 million in debt, the long-term obligations in governmental
activities also includes $8.6 million in claims payable and compensated absences. The financed
purchases consist of borrowings for fire apparatus vehicles. Subscription and lease liabilities consist of
equipment leases and subscription-based information technology agreements with an obligation of
greater than one year. The business-type activities long-term obligation totals $14.1 million and includes
$13.8 million in bonded debt and $0.3 million in compensated absences. Of the $74.9 million total debt
that is due, $5.9 million is due within one year.
Governmental Activities $61.1 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 Pacific View property.
In addition, the City acquired a loan from IBank to fund the Leucadia Streetscape Capital Improvement
Project. Debt payments for all of these bonds and the loan 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
$4.5 million represents approximately four and a half 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 in which the City
made its final payment in the amount of $183,556 during Fiscal Year 2022-23. Additionally, the City
currently leases four fire engine vehicles. The annual lease payments in Fiscal Year 2022-23 were
$213,593.
19
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
Business-type Activities $13.8 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
$10,147,500. 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) during 2021. The City’s credit rating affirmed by S&P issued a credit rating of AA+ on the
City’s 2021 Lease Revenue bonds which is the highest rating available for these types of 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.
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 a
one-year budget before the fiscal year begins on July 1. The City returned to an annual budget cycle in
FY 2023-24 to help streamline the budget process and transition to an online budget book, instead of
adopting two-year budget and appropriating one year at a time. The operating and capital budgets for
Fiscal Year 2023-24 were appropriated by the City Council in June 2023.
The Fiscal Year 2022-23 actual results, when compared to the adopted projections and appropriations,
showed revenues above forecasts and expenditures under budget. Fiscal Year 2023-24 revenues are
expected to increase $2.1 million over the Fiscal Year 2022-23 budget. Property Tax is the City’s largest
revenue source, representing 61 percent of total General Fund revenue. Projections reflect continued
growth, although at a more modest pace due to lower sales activity, that will affect the assessed value
increases from transfers of ownership. Sales Tax revenue estimates are conservative as experts vary on
whether and to what extent a recession will occur, and recent quarters have shown mixed results. Staff
estimates new excise tax revenue totaling $0.25 million for retail cannabis sales, which was not included
in the FY 2022-23 budget.
20
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2023
Expenditures are budgeted to increase by $3.8 million over the Fiscal Year 2022-23 budget, and Fiscal
Year 2023-24 Capital Improvement Program appropriations total $14.2 million. Personnel is the largest
expenditure category, accounting for approximately 52 percent of the General Fund budget. Next year’s
budget includes negotiated adjustments with the Service Employees’ International Union for a new
Memorandum of Understanding effective July 1, 2023, along with additional funding for the City Manager
to make market adjustments necessary for recruitment and retention of unrepresented employees and
managers due to the increasing turnover in this group. Despite a reduction in consumer spending due to
inflationary price increases and slowdown in home sales, it is anticipated that the City will continue to
provide services, maintain a balanced budget, and fully fund its reserves.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is intended to provide our residents, taxpayers, customers, and investors and
creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for
the monies it receives and manages. If you have questions about this report or need additional
information, please contact the Finance Department of the City of Encinitas, 505 South Vulcan Ave,
Encinitas, California 92024, telephone (760) 633-2600, or visit our website at www.encinitasca.gov and
review the Finance Department webpage.
21
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22
BASIC FINANCIAL STATEMENTS
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24
GOVERNMENT-WIDE
FINANCIAL STATEMENTS
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26
City of Encinitas
Statement of Net Position
June 30, 2023
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:
Cash and investments (Note 3) 91,446,838$ 42,580,683$ 134,027,521$
Restricted cash and investments with fiscal agent (Note 3)20,587,399 273,583 20,860,982
Receivables (Note 4)8,817,451 2,661,110 11,478,561
Interest receivable 410,080 192,708 602,788
Lease receivable - due within one year (Note 7) 204,668 70,856 275,524
Inventory and prepaid items 292,940 1,327,681 1,620,621
Total current assets 121,759,376 47,106,621 168,865,997
Noncurrent assets:
Internal balances 101,301 (101,301) -
Investments in joint ventures (Note 5)- 67,919,042 67,919,042
Lease receivable (Note 7)1,562,663 2,448,418 4,011,081
Long-term receivable (Note 6)707,043 - 707,043
Capital assets (Note 8):
Non-depreciable 80,158,465 10,552,472 90,710,937
Depreciable, net 167,012,742 50,790,546 217,803,288
Total capital assets, net 247,171,207 61,343,018 308,514,225
Total noncurrent assets 249,542,214 131,609,177 381,151,391
Total assets 371,301,590 178,715,798 550,017,388
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on bond refunding 1,103,334 - 1,103,334
Pension related (Note 14)28,845,429 3,611,806 32,457,235
OPEB related (Note 15)2,665,792 149,985 2,815,777
Total deferred outflows of resources 32,614,555 3,761,791 36,376,346
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 10,513,735 1,828,339 12,342,074
Interest payable 565,150 164,643 729,793
Unearned revenue 1,144,404 - 1,144,404
Deposits and other liabilities 5,523,630 412,320 5,935,950
Long-term liabilities - due within one year (Note 9)9,750,836 1,826,011 11,576,847
Total current liabilities 27,497,755 4,231,313 31,729,068
Noncurrent liabilities:
Long-term liabilities - due in more than one year (Note 9)59,883,437 12,223,623 72,107,060
Net pension liability (Note 14)61,759,761 7,685,985 69,445,746
Net OPEB liability (Note 15)6,014,129 196,781 6,210,910
Total noncurrent liabilities 127,657,327 20,106,389 147,763,716
Total liabilities 155,155,082 24,337,702 179,492,784
DEFERRED INFLOWS OF RESOURCES
Lease related (Note 7)1,683,197 2,397,043 4,080,240
Pension related (Note 14)2,573,763 1,180,000 3,753,763
OPEB related (Note 15)984,279 47,029 1,031,308
Total deferred inflows of resources 5,241,239 3,624,072 8,865,311
NET POSITION
Net investment in capital assets 203,180,585 46,836,006 250,016,591
Restricted:
Community development 1,474,224 - 1,474,224
Debt service 3,200 2,163 5,363
Flexible saving 199,164 - 199,164
Housing - 368,663 368,663
Capital projects 46,023,481 - 46,023,481
Unrestricted (7,360,830) 107,308,983 99,948,153
Total net position 243,519,824$ 154,515,815$ 398,035,639$
Primary Government
See accompanying Notes to the Basic Financial Statements.
27
City of Encinitas
Statement of Activities and Changes in Net Position
For the Year Ended June 30, 2023
Operating Capital Total
Charges for Grants and Grants and Program
Functions/Programs Expenses Services Contributions Contributions Revenues
Primary government:
Governmental activities:
General government 13,761,807$ 1,434,649$ 4,079,336$ -$ 5,513,985$
Public safety 42,537,995 1,792,386 165,274 - 1,957,660
Public works 7,682,427 2,128 4,067,099 7,974,705 12,043,932
Planning services 25,727,636 5,856,993 343,132 - 6,200,125
Engineering services 1,162,517 1,129,643 - - 1,129,643
Parks and recreation 11,574,782 1,746,481 83,765 624,252 2,454,498
Interest on long-term debt 1,897,361 - - - -
Total governmental activities 104,344,525 11,962,280 8,738,606 8,598,957 29,299,843
Business-type activities:
Cardiff Sanitary Division 5,929,362 5,040,457 - 11,960 5,052,417
San Dieguito Water District 16,801,104 18,171,433 - 261,862 18,433,295
Encinitas Sanitary Division 2,920,816 2,625,808 - 161,336 2,787,144
Affordable Housing 1,889,985 300,741 1,493,447 - 1,794,188
Total business-type activities 27,541,267 26,138,439 1,493,447 435,158 28,067,044
Total primary government 131,885,792$ 38,100,719$ 10,232,053$ 9,034,115$ 57,366,887$
Program Revenues
See accompanying Notes to the Basic Financial Statements.
28
City of Encinitas
Statement of Activities and Changes in Net Position (Continued)
For the Year Ended June 30, 2023
Governmental Business-type
Functions/Programs Activities Activities Total
Primary government:
Governmental activities:
General government (8,247,822)$ -$ (8,247,822)$
Public safety (40,580,335) - (40,580,335)
Public works 4,361,505 - 4,361,505
Planning services (19,527,511) - (19,527,511)
Engineering services (32,874) - (32,874)
Parks and recreation (9,120,284) - (9,120,284)
Interest on long-term debt (1,897,361) - (1,897,361)
Total governmental activities (75,044,682) - (75,044,682)
Business-type activities:
Cardiff Sanitary Division - (876,945) (876,945)
San Dieguito Water District - 1,632,191 1,632,191
Encinitas Sanitary Division - (133,672) (133,672)
Affordable Housing - (95,797) (95,797)
Total business-type activities - 525,777 525,777
(75,044,682) 525,777 (74,518,905)
General revenues:
Taxes:
Property taxes and documentary transfer taxes 62,792,706 1,433,426 64,226,132
Sales and use taxes 17,138,284 - 17,138,284
Transient occupancy taxes 6,019,200 - 6,019,200
Franchise taxes 3,513,674 - 3,513,674
Total taxes 89,463,864 1,433,426 90,897,290
Intergovernmental - unrestricted 279,083 - 279,083
Investment income (loss) 1,418,190 441,813 1,860,003
Rental income - 270,571 270,571
Other 878,385 180,065 1,058,450
Transfers 52,964 (52,964) -
Total general revenues and transfers 92,092,486 2,272,911 94,365,397
Changes in net position 17,047,804 2,798,688 19,846,492
Net position:
Beginning of year, as restated (Note 19)226,472,020 151,717,127 378,189,147
End of year 243,519,824$ 154,515,815$ 398,035,639$
Primary Government
and Changes in Net Position
Net (Expense) Revenue
See accompanying Notes to the Basic Financial Statements.
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30
FUND FINANCIAL STATEMENTS
31
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32
GOVERNMENTAL FUND
FINANCIAL STATEMENTS
33
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34
City of Encinitas
Balance Sheet
Governmental Funds
June 30, 2023
Capital Infrastructure
Improvements Improvements Other Total
General Capital Projects Special Revenue Governmental Governmental
Fund Fund Fund Funds Funds
ASSETS
Cash and investments 39,733,530$ 32,008,100$ 1,243,510$ 10,159,851$ 83,144,991$
Receivables 5,664,426 - 2,655,121 497,409 8,816,956
Interest receivable 332,753 - 11,703 65,624 410,080
Due from other funds (Note 10) 640,475 15,784,131 - - 16,424,606
Inventory and prepaid items 292,940 - - - 292,940
Long-term receivable (Note 6) 17,680 - - 689,363 707,043
Lease receivable (Note 7) 1,767,331 - - - 1,767,331
Restricted cash and investments 299 20,583,900 - 3,200 20,587,399
Total assets 48,449,434$ 68,376,131$ 3,910,334$ 11,415,447$ 132,151,346$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND
FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities 5,526,070$ 4,026,859$ 16,397$ 564,169$ 10,133,495$
Unearned revenue 897,217 - 247,187 - 1,144,404
Due to other funds (Note 10) - - 15,710,539 482,331 16,192,870
Deposits and other liabilities 5,498,621 - - 25,009 5,523,630
Total liabilities 11,921,908 4,026,859 15,974,123 1,071,509 32,994,399
Deferred Inflows of Resources:
Lease related (Note 7) 1,683,197 - - - 1,683,197
Unavailable revenue - - 1,842,122 668,269 2,510,391
Total deferred inflows of resources 1,683,197 - 1,842,122 668,269 4,193,588
Fund Balances (Note 11):
Nonspendable 310,620 - - - 310,620
Restricted 199,164 46,023,481 - 9,675,669 55,898,314
Committed 20,041,586 18,325,791 - - 38,367,377
Unassigned 14,292,959 - (13,905,911) - 387,048
Total fund balances 34,844,329 64,349,272 (13,905,911) 9,675,669 94,963,359
Total liabilities, deferred inflows
of resources, and fund balances 48,449,434$ 68,376,131$ 3,910,334$ 11,415,447$ 132,151,346$
Major Funds
See accompanying Notes to the Basic Financial Statements.
35
City of Encinitas
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position
June 30, 2023
Total Fund Balances - Total Governmental Funds 94,963,359$
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 $4,190,272 reported in internal service funds).
Land 61,862,474
Land easements 2,443,333
Construction in progress 13,911,402
SBITA assets in progress 15,900
Public facilities 122,794,228
Vehicles, equipment and machinery 3,358,054
Right to use assets 1,823,966
Infrastructure 158,754,072
Less: Accumulated depreciation (122,842,090)
Total capital assets adjustment 242,121,339
Deferred loss on refunding in the governmental activities were not financial resources and,
therefore, were not reported in governmental funds. 1,103,334
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.(565,150)
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
$2,510,673 reported in internal service funds):
Amount reported in Government-wide Statement of Net Position:
2013 Community Park Bonds, net of unamortized premium of $43,800 (4,503,800)
2014 Moonlight Beach Tower Series A Bonds, net of unamortized discount of $22,817 (2,517,183)
2015 Library Refunding Bonds, net of unamortized premium of $514,809 (12,259,809)
2017 Park Refunding Bonds, net of unamortized premium of $777,305 (8,577,305)
2021 Pacific View Series A Bonds, net of unamortized discount of $18,110 (9,301,890)
California Infrastructure and Economic Development Bank Loan (20,000,000)
Leases payable (199,677)
Subscription-Based Information Technology Arrangements (1,183,607)
Claims payable (5,552,465)
Compensated absences (3,027,864)
Total long-term liabilities (67,123,600)
Net pension liability is not due and payable in the current period and, therefore, is not required
to be reported in the governmental funds. (60,983,706)
Actuarially determined pension deferred outflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. 28,495,849
Actuarially determined pension deferred inflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. (2,567,950)
Net OPEB liability is not due and payable in the current period and, therefore, is not required to
be reported in the governmental funds. (5,853,705)
Actuarially determined OPEB deferred outflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. 2,594,682
Actuarially determined OPEB deferred inflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. (958,024)
Unavailable revenue deferred inflows of resources are not available for the current period and,
therefore, are deferred in the governmental funds or not recorded in the governmental funds. 2,510,391
Internal service funds were used by management to charge the costs of risk management,
personnel support, fleet maintenance and vehicle replacement to individual funds. The assets
and liabilities of the internal service funds were included in governmental activities in the
Government-wide Statement of Net Position.9,783,005
Net position of governmental activities 243,519,824$
See accompanying Notes to the Basic Financial Statements.
36
City of Encinitas
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2023
Capital Infrastructure
Improvements Improvements Other Total
General Capital Projects Special Revenue Governmental Governmental
Fund Fund Fund Funds Funds
REVENUES:
Taxes and assessments 86,035,746$ -$ 1,182,462$ 3,379,155$ 90,597,363$
Licenses and permits 379,267 - - - 379,267
Intergovernmental 1,026,194 - 13,860,746 1,036,636 15,923,576
Development impact fees - - - 1,036,487 1,036,487
Charges for services 9,510,414 - - - 9,510,414
Fines, forfeitures and penalties 485,215 - - - 485,215
Use of money and property (loss) 1,192,301 - 87,529 266,171 1,546,001
Other 1,542,803 583,900 - 307,086 2,433,789
Total revenues 100,171,940 583,900 15,130,737 6,025,535 121,912,112
EXPENDITURES:
Current:
General government 14,414,592 - 349,179 106,173 14,869,944
Public safety 32,895,069 - 4,217,541 299,003 37,411,613
Public works 6,799,391 - - 1,529,198 8,328,589
Planning services 9,683,400 - - 305,481 9,988,881
Engineering services 3,325,698 - - 657,129 3,982,827
Parks and recreation 8,017,368 - - 1,314,192 9,331,560
Capital outlay 522,393 23,418,543 - 28,393 23,969,329
Debt service:
Principal 358,461 - - 2,388,599 2,747,060
Interest and fiscal charges 21,509 - - 1,733,349 1,754,858
Total expenditures 76,037,881 23,418,543 4,566,720 8,361,517 112,384,661
REVENUES OVER
(UNDER) EXPENDITURES 24,134,059 (22,834,643) 10,564,017 (2,335,982) 9,527,451
OTHER FINANCING SOURCES (USES):
Issuance of lease and SBITAs 489,210 - - - 489,210
Issuance of debt - 20,000,000 - - 20,000,000
Transfers in (note 10)2,598,226 29,074,522 2,221 5,262,392 36,937,361
Transfers out (note 10) (21,705,226) (1,842,194) (16,257,409) (950,895) (40,755,724)
Total other financing sources (uses)(18,617,790) 47,232,328 (16,255,188) 4,311,497 16,670,847
NET CHANGE IN FUND BALANCES 5,516,269 24,397,685 (5,691,171) 1,975,515 26,198,298
FUND BALANCES (DEFICIT):
Beginning of year 29,328,060 39,951,587 (8,214,740) 7,700,154 68,765,061
End of year 34,844,329$ 64,349,272$ (13,905,911)$ 9,675,669$ 94,963,359$
Major Funds
See accompanying Notes to the Basic Financial Statements.
37
City of Encinitas
Reconciliation of the Governmental Statement of Revenues, Expenditures, and
Changes in Fund Balances to the Statement of Activities
For the Year Ended June 30, 2023
Net Change in Fund Balances - Total Governmental Funds 26,198,298$
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. 14,544,991
The net effect of various miscellanous transaction involving capital assets (i.e. sales, disposals, trade-
ins)
Loss on disposal of capital assets (147,940)
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 $671,490
recorded in internal service funds). (7,728,882)
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 2,750,240
Issuance of long-term debt (20,000,000)
Proceeds from new leases (237,900)
Proceeds from SBITAs (251,310)
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 140,835
Deferred amounts on refund (59,840)
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 (255,401)
Changes in claims payable (986,518)
Changes in the net pension liability (33,766,299)
Changes in the net OPEB liability (1,728,383)
The net effect of various miscellaneous transactions involving pension plans (i.e. deferred outflow/inflow
amortization, contributions after the measurement date) increased Net Position. 35,860,195
The net effect of various miscellaneous transactions involving OPEB plans (i.e. deferred outflow/inflow
amortization, contributions after the measurement date) increased Net Position. 2,378,516
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.(191,989)
A portion of deferred grant revenues are not available to pay for current period expenditures and,
therefore, are not recognized in the funds.246,216
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. 282,975
Change in net position of governmental activities 17,047,804$
See accompanying Notes to the Basic Financial Statements.
38
PROPRIETARY FUND
FINANCIAL STATEMENTS
39
City of Encinitas
Statement of Net Position
Proprietary Funds
June 30, 2023
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
ASSETS
Current assets:
Cash and investments (Note 3) 8,912,218$ 23,192,232$ 10,381,640$
Restricted cash and investments with fiscal agent (Note 3) - 2,163 -
Accounts and taxes receivable 121,878 2,487,491 29,046
Interest receivable 39,495 105,233 47,667
Lease receivable - due in one year (Note 7) - 70,856 -
Inventory and prepaid items - 796,163 415,555
Total current assets 9,073,591 26,654,138 10,873,908
Noncurrent assets:
Lease receivable (Note 7) - 2,448,418 -
Investment in joint ventures (Note 5) 35,573,192 25,196,685 7,149,165
Capital assets (Note 8):
Land - 3,450,544 -
Public works facility right-of-use - 3,378,700 -
Construction in progress 1,723,892 394,980 1,604,356
Capacity rights, net - 145,974 -
Utility, plant, vehicles, and equipment, net 21,108,568 13,767,876 13,665,212
Total capital assets, net 22,832,460 21,138,074 15,269,568
Total noncurrent assets 58,405,652 48,783,177 22,418,733
Total assets 67,479,243 75,437,315 33,292,641
DEFERRED OUTFLOWS OF RESOURCES
Pension related (Note 14) - 3,611,806 -
OPEB related (Note 15) - 149,985 -
Total deferred outflows of resources - 3,761,791 -
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 155,294 1,610,428 58,634
Due to other funds (Note 10) - - -
Accrued interest payable 141,363 23,280 -
Deposits 1,250 393,811 -
Compensated absences - due in one year (Note 9) - 136,115 -
Current portion of long-term debt (Note 9) 245,000 1,350,000 -
Total current liabilities 542,907 3,513,634 58,634
Noncurrent liabilities:
Leases payable - - -
Revenue bonds payable - due in more than one year (Note 9) - 74,372 -
Notes and mortgages payable - due in more than one year (Note 9) 10,745,188 620,000 -
Compensated absences - due in more than one year (Note 9) - 113,137 -
Net pension liability (Note 14) - 7,685,985 -
Net OPEB liability (Note 15) - 196,781 -
Total noncurrent liabilities 10,745,188 8,690,275 -
Total liabilities 11,288,095 12,203,909 58,634
DEFERRED INFLOWS OF RESOURCES
Pension related (Note 14) - 1,180,000 -
OPEB related (Note 15) - 47,029 -
Lease related (Note 7) - 2,397,043 -
Total deferred inflows of resources - 3,624,072 -
NET POSITION
Net investment in capital assets 11,700,924 18,541,537 15,242,673
Restricted:
Debt service - 2,163 -
Housing - - -
Unrestricted 44,490,224 44,827,425 17,991,334
Total net position 56,191,148$ 63,371,125$ 33,234,007$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements.
40
City of Encinitas
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2023
Non-major Governmental
Enterprise Fund Activities
Affordable Internal
Housing Total Service Funds
ASSETS
Current assets:
Cash and investments (Note 3) 94,593$ 42,580,683$ 8,301,847$
Restricted cash and investments with fiscal agent (Note 3) 271,420 273,583 -
Accounts and taxes receivable 22,695 2,661,110 495
Interest receivable 313 192,708 -
Lease receivable - due in one year (Note 7) - 70,856 -
Inventory and prepaid items 115,963 1,327,681 -
Total current assets 504,984 47,106,621 8,302,342
Noncurrent assets:
Lease receivable (Note 7) - 2,448,418 -
Investment in joint ventures (Note 5) - 67,919,042 -
Capital assets (Note 8):
Land - 3,450,544 -
Public works facility right-of-use - 3,378,700 -
Construction in progress - 3,723,228 1,925,356
Capacity rights, net - 145,974 -
Utility, plant, vehicles, and equipment, net 2,102,916 50,644,572 3,124,512
Total capital assets, net 2,102,916 61,343,018 5,049,868
Total noncurrent assets 2,102,916 131,710,478 5,049,868
Total assets 2,607,900 178,817,099 13,352,210
DEFERRED OUTFLOWS OF RESOURCES
Pension related (Note 14) - 3,611,806 349,580
OPEB related (Note 15) - 149,985 71,110
Total deferred outflows - 3,761,791 420,690
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 3,983 1,828,339 380,240
Due to other funds (Note 10) 101,301 101,301 130,435
Accrued interest payable - 164,643 -
Deposits 17,259 412,320 -
Compensated absences - due in one year (Note 9) 6,346 142,461 -
Current portion of long-term debt (Note 9) 88,550 1,683,550 437,092
Total current liabilities 217,439 4,332,614 947,767
Noncurrent liabilities:
Leases payable - - 2,073,581
Revenue bonds payable - due in more than one year (Note 9) - 74,372 -
Notes and mortgages payable - due in more than one year (Note 9) 663,494 12,028,682 -
Compensated absences - due in more than one year (Note 9) 7,432 120,569 -
Net pension liability (Note 14) - 7,685,985 776,055
Net OPEB liability (Note 15) - 196,781 160,424
Total noncurrent liabilities 670,926 20,106,389 3,010,060
Total liabilities 888,365 24,439,003 3,957,827
DEFERRED INFLOWS OF RESOURCES
Pension related (Note 14) - 1,180,000 5,813
OPEB related (Note 15) - 47,029 26,255
Lease related - 2,397,043 -
Total deferred inflows - 3,624,072 32,068
NET POSITION
Net investment in capital assets 1,350,872 46,836,006 2,441,833
Restricted:
Debt service - 2,163 -
Housing 368,663 368,663 -
Unrestricted - 107,308,983 7,341,172
Total net position 1,719,535$ 154,515,815$ 9,783,005$
See accompanying Notes to the Basic Financial Statements.
41
City of Encinitas
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2023
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
OPERATING REVENUES:
Charges for services 5,040,457$ 18,022,341$ 2,625,808$
Rental income - - -
Interfund revenues - 149,092 -
Intergovernmental - - -
Other revenues - 32,170 -
Total operating revenues 5,040,457 18,203,603 2,625,808
OPERATING EXPENSES:
Housing assistance payments - - -
Source of supply - 7,892,257 -
General operations and maintenance 1,250,119 5,024,173 863,153
Facility operations and maintenance 1,937,323 1,960,299 754,291
General and administrative 227,157 - 135,510
Depreciation 600,944 634,863 432,823
Insurance and claims 115,641 115,323 104,013
Total operating expenses 4,131,184 15,626,915 2,289,790
OPERATING INCOME (LOSS)909,273 2,576,688 336,018
NONOPERATING REVENUES (EXPENSES):
Investment income (loss) 80,138 249,922 108,573
Property taxes - 1,433,426 -
Operating grants - - -
Rental income - 146,449 -
Net change from joint ventures (1,369,339) (1,077,761) (631,026)
Gain (loss) on disposal of capital assets - - -
Other nonoperating revenue - 38,011 -
Amortization of bond premium 35,112 74,372 -
Interest expense (428,839) (96,428) -
Total nonoperating revenues (expenses)(1,682,928) 767,991 (522,453)
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (773,655) 3,344,679 (186,435)
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions 11,960 261,862 161,336
Transfers in (Note 10) - - -
Transfers out (Note 10) - - -
Total capital contributions and transfers 11,960 261,862 161,336
CHANGES IN NET POSITION (761,695) 3,606,541 (25,099)
NET POSITION:
Beginning of year 56,952,843 59,764,584 33,259,106
End of year 56,191,148$ 63,371,125$ 33,234,007$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements.
42
City of Encinitas
Statement of Revenues, Expenses, and Changes in Net Position (Continued)
Proprietary Funds
For the Year Ended June 30, 2023
Non-major
Enterprise Fund Governmental
Activities
Affordable Internal
Housing Total Service Funds
OPERATING REVENUES:
Charges for services -$ 25,688,606$ -$
Rental income 124,122 124,122 -
Interfund revenues 116,662 265,754 3,058,423
Intergovernmental 184,079 184,079 -
Other revenues 400 32,570 333,341
Total operating revenues 425,263 26,295,131 3,391,764
OPERATING EXPENSES:
Housing assistance payments 1,522,144 1,522,144 -
Source of supply - 7,892,257 -
General operations and maintenance 142,865 7,280,310 1,616,998
Facility operations and maintenance - 4,651,913 -
General and administrative 111,745 474,412 1,697,409
Depreciation 100,538 1,769,168 671,490
Insurance and claims - 334,977 2,815,213
Total operating expenses 1,877,292 23,925,181 6,801,110
OPERATING INCOME (LOSS)(1,452,029) 2,369,950 (3,409,346)
NONOPERATING REVENUES (EXPENSES):
Investment income (loss) 3,180 441,813 -
Property taxes - 1,433,426 -
Operating grants 1,493,447 1,493,447 -
Rental income - 146,449 -
Net change from joint ventures - (3,078,126) -
Gain (loss) on disposal of capital assets - - (147,497)
Other nonoperating revenue - 38,011 -
Amortization of bond premium - 109,484 -
Interest expense (12,693) (537,960) (31,509)
Total nonoperating revenues (expenses)1,483,934 46,544 (179,006)
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 31,905 2,416,494 (3,588,352)
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions - 435,158 -
Transfers in (Note 10) - - 4,018,327
Transfers out (Note 10) (52,964) (52,964) (147,000)
Total capital contributions and transfers (52,964) 382,194 3,871,327
CHANGES IN NET POSITION (21,059) 2,798,688 282,975
NET POSITION:
Beginning of year 1,740,594 151,717,127 9,500,030
End of year 1,719,535$ 154,515,815$ 9,783,005$
See accompanying Notes to the Basic Financial Statements.
43
City of Encinitas
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2023
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users 4,958,678$ 18,379,017$ 2,628,859$
Cash received from other funds - 149,092 -
Payments to employees (3,079) (3,897,196) -
Payments to suppliers for goods and services (3,695,940) (11,573,255) (2,498,392)
Other operating revenues - 32,170 -
Net cash provided by (used in) operating activities 1,259,659 3,089,828 130,467
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition of capital assets (1,205,109) (394,980) (1,615,442)
Capital contributions received - connection/capacity fees 11,960 261,862 161,336
Principal payments on long-term debt (237,500) (1,295,000) -
Interest payments on long-term debt (431,213) (110,743) -
Capital related payments to other agencies (481,854) (418,748) (482,010)
Proceeds from lease revenues - 138,653 -
Net cash (used in) capital and related financing activities (2,343,716) (1,818,956) (1,936,116)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Proceeds from operating grants - 38,011 -
Proceeds from property taxes - 1,433,426 -
Cash received from other funds - - -
Cash paid to other funds - - -
Net cash provided by (used in) noncapital financing activities - 1,471,437 -
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest income (loss) 67,450 155,502 93,518
Net cash provided by investing activities 67,450 155,502 93,518
Net increase (decrease) in cash and cash equivalents (1,016,607) 2,897,811 (1,712,131)
CASH AND CASH EQUIVALENTS:
Beginning of year 9,928,825 20,296,584 12,093,771
End of year 8,912,218$ 23,194,395$ 10,381,640$
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO
STATEMENT OF NET POSITION:
Cash and investments 8,912,218$ 23,192,232$ 10,381,640$
Restricted cash and investments with fiscal agent - 2,163 -
Total cash and cash equivalents 8,912,218$ 23,194,395$ 10,381,640$
Major Enterprise Funds
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, 2023
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) 909,273$ 2,576,688$ 336,018$
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation 600,944 634,863 432,823
Changes in assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Changes in assets – (increase) decrease:
Accounts and taxes receivable (82,780) 319,057 3,051
Lease receivable - due in one year - - -
Inventory and prepaid items - 608,974 (415,555)
Change in deferred outflows of resources – (increase) decrease:
OPEB-related deferred outflows - (68,561) -
Pension-related deferred outflows - (2,037,521) -
Changes in liabilities – increase (decrease):
Accounts payable and accrued liabilities (168,778) 773,164 (225,870)
Due to other funds - - -
Deposits 1,000 37,619 -
Compensated absences - 35,169 -
Net OPEB liability - 106,912 -
Net pension liability - 3,527,978 -
Change in deferred inflows of resources – increase (decrease):
OPEB-related deferred inflows - (66,101) -
Pension-related deferred inflows - (3,358,413) -
Total adjustments 350,386 513,140 (205,551)
Net cash provided by (used in) operating activities 1,259,659$ 3,089,828$ 130,467$
NON-CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Amortization of original issue premium 35,112$ 74,371$ -$
Total non-cash capital and related financing activities 35,112$ 74,371$ -$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements.
45
City of Encinitas
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2023
Non-major
Enterprise Fund Governmental
Activities
Affordable Internal
Housing Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users 287,122$ 26,253,676$ 3,059,092$
Cash received from other funds 116,662 265,754 -
Payments to employees (103,742) (4,004,017) (1,735,157)
Payments to suppliers for goods and services (1,678,518) (19,446,105) (4,314,859)
Other operating revenues - 32,170 333,341
Net cash provided by (used in) operating activities (1,378,476) 3,101,478 (2,657,583)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition of capital assets - (3,215,531) (2,395,037)
Capital contributions received - connection/capacity fees - 435,158 -
Principal payments on long-term debt (87,186) (1,619,686) (195,921)
Interest payments on long-term debt (12,693) (554,649) (18,032)
Capital related payments to other agencies - (1,382,612) -
Proceeds from lease revenues - 138,653 1,925,356
Net cash (used in) capital and related financing activities (99,879) (6,198,667) (683,634)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Proceeds from operating grants 1,493,447 1,531,458 -
Proceeds from property taxes - 1,433,426 -
Cash received from other funds 5,881 5,881 4,018,327
Cash paid to other funds (52,964) (52,964) (147,000)
Net cash provided by (used in) noncapital financing activities 1,446,364 2,917,801 3,871,327
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest income (loss) 3,292 319,762 -
Net cash provided by investing activities 3,292 319,762 -
Net increase (decrease) in cash and cash equivalents (28,699) 140,374 530,110
CASH AND CASH EQUIVALENTS:
Beginning of year 394,712 42,713,892 7,771,737
End of year 366,013$ 42,854,266$ 8,301,847$
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO
STATEMENT OF NET POSITION:
Cash and investments 94,593$ 42,580,683$ 8,301,847$
Restricted cash and investments with fiscal agent 271,420 273,583 -
Total cash and cash equivalents 366,013$ 42,854,266$ 8,301,847$
See accompanying Notes to the Basic Financial Statements.
46
City of Encinitas
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2023
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) (1,452,029)$ 2,369,950$ (3,409,346)$
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation 100,538 1,769,168 671,490
Changes in assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Changes in assets – (increase) decrease:
Accounts and taxes receivable (20,525) 218,803 669
Lease receivable - due in one year - - -
Inventory and prepaid items (679) 192,740 -
Change in deferred outflows of resources – (increase) decrease:
OPEB-related deferred outflows - (68,561) (43,627)
Pension-related deferred outflows - (2,037,521) (221,625)
Changes in liabilities – increase (decrease):
Accounts payable and accrued liabilities (5,838) 372,678 9,634
Due to other funds - - 65,522
Deposits (1,200) 37,419 -
Compensated absences 1,257 36,426 -
Net OPEB liability - 106,912 82,109
Net pension liability - 3,527,978 488,321
Change in deferred inflows of resources – increase (decrease):
OPEB-related deferred inflows - (66,101) (15,313)
Pension-related deferred inflows - (3,358,413) (285,417)
Total adjustments 73,553 731,528 751,763
Net cash provided by (used in) operating activities (1,378,476)$ 3,101,478$ (2,657,583)$
NON-CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Amortization of original issue premium -$ 109,483$ -$
-$ 109,483$ -$
See accompanying Notes to the Basic Financial Statements.
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48
FIDUCIARY FUND
FINANCIAL STATEMENTS
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50
City of Encinitas
Statement of Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2023
Custodial Funds
Assets:
Cash and investments (Note 3) 5,118,182$
Restricted cash and investments with fiscal agent (Note 3) 1,779,232
Interest receivable 24,962
Current assessments receivable 7,336
Total assets 6,929,712
Liabilities:
Accounts payable 100
Total liabilities 100
Net Position:
Restricted for:
Golf course 2,790,470
Bondholders 4,139,142
Total net position 6,929,612$
See accompanying Notes to the Basic Financial Statements.
51
City of Encinitas
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2023
Custodial Funds
Additions:
Special tax assessments 1,432,022$
Excess golf revenue 2,735,972
Interest income (loss) 88,552
Total additions 4,256,546
Deductions:
Administrative fees 40,533
Contributions to the CFD No. 1 901,525
Surplus net revenue payment to the City 522,966
Bond principal 2,595,000
Bond interest 328,581
Total deductions 4,388,605
Change in net position (132,059)
NET POSITION:
Beginning of year 7,061,671
End of year 6,929,612$
See accompanying Notes to the Basic Financial Statements.
52
NOTES TO THE BASIC
FINANCIAL STATEMENTS
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54
City of Encinitas
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
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.
55
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
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
assets) 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 assets)
that apply to future periods and, therefore, are not recognized as revenue until that time.
The City has four types of items that qualify for reporting in this category.The first three
items are deferred inflows related to pensions,OPEB, and leases. The fourth 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.
56
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
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.
57
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
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.
58
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 –Summary of Significant Accounting Policies (Continued)
B.Measurement Focus, Basis of Accounting and Financial Statements Presentation
(Continued)
Proprietary Fund Financial Statements (Continued)
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.
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 6,500 customers in the southern portion of the City.
The San Dieguito Water District (“SDWD”) Enterprise Fund provides potable and reclaimed
water services to approximately 12,305 customers in Encinitas.
The Encinitas Sanitary Division (“ESD”) Enterprise Fund provides wastewater collection
and treatment services to approximately 4,100 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 an Investment Custodial fund.
The Investment Custodial Fund accounts for the cash invested on behalf of the Encinitas Ranch
Golf Course.
The Custodial Fund accounts for one Community Facilities (Mello-Roos) District for which the City
acts as an agent for debt service activities.
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.
59
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 –Summary of Significant Accounting Policies (Continued)
C.Cash, Cash Equivalents, and Investments (Continued)
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.
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, specific State statutes or applicable City ordinance, resolution, or the Investment Policy
of the California Infrastructure and Development Bank (IBank). Fiscal agents acting on behalf of the
City hold investment funds arising from the proceeds of long-term debt issuances or the IBank loan
proceeds. The funds may be used for specific capital outlays or for the payment of certain bonds
and have been invested only as permitted.
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:
60
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 –Summary of Significant Accounting Policies (Continued)
E.Fair Value Measurement (Continued)
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.
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.
61
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 –Summary of Significant Accounting Policies (Continued)
I.Leases
The City accounts for leases in accordance with GASB Statement No.87,Leases, based on the
principle that leases are financing of the right to use asset.The primary objective of this statement
is to enhance the relevance and consistency of information about governments' leasing activities.
This statement establishes a single model for lease accounting based on the principle that leases
are financings of the right to use an underlying asset. Under this statement, a lessee is required to
recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to
recognize a lease receivable and a deferred inflow of resources. For additional information, refer to
the disclosures in Note 7 Leases Receivable and Note 9 Long-Term Obligations.
At the commencement of the lease, the City initially measures the lease receivable at the present
value of payments expected to be received during the lease term. Subsequently,the lease
receivable is reduced by the principal portion of lease payments received. The deferred inflow of
resources is initially measured as the initial amount of the lease receivable,adjusted for lease
payments received at or before the lease commencement date. Subsequently, the deferred inflows
of resources are recognized as revenue over the life of the lease term.
Key estimates and judgments include how the City determines the discount rate it uses to discount
the expected lease receipts to present value, lease term and lease receipts.
The City used the estimated incremental borrowing rate as the discount rate for leases. The lease
term includes the non-cancellable period of the lease. Lease receipts included in the measurement
of the lease receivable are composed of fixed payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement of its leases and
will remeasure the lease receivable and deferred inflows of resources if certain changes occur that
are expected to significantly affect the amount of the lease receivable.
J.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 improvements 20 - 45 years
Equipment, machinery and vehicles 5 - 20 years
Infrastructure 20 - 50 years
Collection and distribution systems 50 years
Right to use lease asset The estimated life of the lease asset
or the contract term whichever is shorter
The City defines infrastructure as the basic physical assets that allow the City to function.
62
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 –Summary of Significant Accounting Policies (Continued)
J. 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.
K. 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, 2023,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.
L. Subscription-Based Information Technology (IT) Arrangements
The City is a participant in subscription-based IT arrangements as detailed in Note 9 –Long-Term
Obligations. The City recognizes a subscription-based IT payable and right to use IT assets in the
financial statements.
At the commencement of the arrangement, the City initially measures the payable at the present
value of payments expected to be paid during the arrangement term. Subsequently, the payable is
reduced by the principal portion of payments made. The right to use assets are initially measured
at the initial amount of the subscription-based IT payable. Subsequently, the right to use assets are
amortized over the life of the arrangement term.
M. 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.
63
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 –Summary of Significant Accounting Policies (Continued)
M. Unearned Revenue (Continued)
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.
N. 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.
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.
O. 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, 2023.
P. 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.
Q. Compensated Absences
The City’s policy permits its non-fire employees to accumulate up to a maximum of 500 hours
vacation with accrued vacation paid out on separation of employment. Non-fire employees may
elect to receive cash in lieu of vacation up to 80 hours annually. Non-fire represented employees
participate in the City’s short-term disability income protection plan (IPP) program, which provides
employees with protection against loss of income due to illness or injury. Employees may accrue up
to 5 IPP units and do not accrue any sick leave. IPP units have no cash value. Non-fire
unrepresented employees participate in traditional sick leave program instead of IPP. They accrue
96 hours of sick leave per year with no cap on accrual. Currently, unrepresented sick leave has no
cash value and is not reportable to CalPERS as service credit.
64
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 –Summary of Significant Accounting Policies (Continued)
Q. Compensated Absences (Continued)
Fire employees can accrue up to a maximum of 552 hours of vacation, depending on the length of
employment with the City and their classification, with accrued vacation paid out on separation of
employment. Fire employees may accrue from 96 to 180 hours of sick leave per year depending on
their work schedule with no limit on accrual. Upon retirement, employees can opt to cash out
accumulated sick hours up to a maximum of three months salary (728 hours). The remaining hours
are reported to CalPERS for service credit. If a Fire employee chooses to not cash out any sick
leave, then all sick hours are reported to CalPERS for service credit. Fire employees may elect to
receive cash in lieu of sick leave up to a maximum of 36 hours annually depending on their
classification.
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 year 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.
R. 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 14).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, 2021
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
The obligations for net pension liability and OPEB are primarily liquidated from the General Fund.
There is no fixed payment schedule for these liabilities.
65
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 –Summary of Significant Accounting Policies (Continued)
S. 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 15).
The following timeframes are used for OPEB reporting:
Va luation date June 30, 2021
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
T. 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.
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.
U. 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.
66
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 –Summary of Significant Accounting Policies (Continued)
U. Fund Balances (Continued)
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.
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.
V. 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.
67
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 2 –Summary of Significant Accounting Policies (Continued)
V. Property Taxes (Continued)
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 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.
W. 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.
X. Accounting Changes
Current Year Accounting Standards Implementation
The City has evaluated and implemented the following accounting standards effective for the fiscal
year ending June 30, 2023
GASB Statement No. 96 – “Subscription-Based Information Te chnology Arrangements,”
effective for reporting periods beginning after June 30, 2022. For the year ended June 30,
2023, the financial statements include the adoption of GASB Statement No. 96, Subscription-
Based Information Technology Arrangements (SBITA ). This Statement (1) defines a SBITA; (2)
establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a
corresponding subscription liability; (3) provides the capitalization criteria for outlays other than
subscription payments, including implementation costs of a SBITA; and (4) requires note
disclosures regarding a SBITA.
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.100 -“Accounting Changes and Error Corrections”, effective for
reporting periods beginning after June 15, 2023.
GASB Statement No. 101 -“Compensated Absences”, effective for reporting periods
beginning after December 15,2023.
68
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 3 – Cash and Investments
Cash and investments are classified in the accompanying financial statements as follows:
Fiduciary Funds
Governmental Business-type Statement of
Activities Activities Net Position Total
Current assets:
Cash and investments 91,446,838$ 42,580,683$ 5,118,182$ 139,145,703$
Restricted cash and investments with fiscal agent 20,587,399 273,583 1,779,232 22,640,214
Total cash and investments 112,034,237$ 42,854,266$ 6,897,414$ 161,785,917$
Government-wide Statement of Position
Cash and investments at June 30, 2023, consisted of the following:
The City measures and records its investments using fair value measurement guidelines established by
generally accepted accounting principles. These guidelines recognize a three-tiered value hierarchy as
follows:
Level 1 Quoted prices for identical investments in active markets;
Level 2 Observable inputs other than those in Level 2; and
Level 3 Unobservable inputs
Cash on hand 3,219$
Deposits with financial institutions 3,935,849
Restricted cash 22,640,214
Investments 135,206,635
Total cash and investments 161,785,917$
69
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 3 – Cash and Investments (Continued)
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, 2023:
Fair Percentage
Value of Measurement
Heirarchy Investments Input
Investments:
Negotiable Certificates of Deposit 14,374,721$ 10.63% Level 2
U.S. Treasury Securities 61,139,057 45.22% Level 1
U.S. Government Sponsored Enterprise Securities 16,373,620 12.11%Level 2
91,887,398$
Local Agency Investment Fund (LAIF) (1)33,019,319$ 24.42% Uncategorized
California Asset Management Program (CAMP) (2)1,111,790 0.82% Uncategorized
Money Market Mutual Funds 7,940,792 5.87% Uncategorized
San Diego County Investment Pool (3)1,247,336 0.92% Uncategorized
43,319,237$
Total Investments 135,206,635$
(1)The State Treasurer's pooled investment program values participant's shares on amortized cost. This has
been adjusted to fair value using the fair value factor.
(2) CAMP follows GASB 79 which allows it to measure participants' investment at amortized cost.
(3)San Diego County Investment Pool has been converted to fair value based on fair value of the pool and the
City's share of the pool.
The City’s level one investments are from prices derived from such sources as the NYSE, NASDAQ,
and the Chicago Board of Trade, and the City’s level two investments are valued based on a pricing
service that uses matrix pricing.
70
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 3 –Cash and Investments (Continued)
A.Demand Deposits
The carrying amounts of the City’s demand deposits were $3,935,849 at June 30, 2023. Bank
balances were $5,229,029 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 fair 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.
71
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 3 –Cash and Investments (Continued)
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.
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 30%5%
Negotiable Certificates of Deposit Yes 5 years 30%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.
72
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 3 –Cash and Investments (Continued)
D.Risk Disclosures
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:
Less than 12 to 36 36-60
Total 12 Months Months Months
Inv estm ents:
Local Agency Investment Fund (LAIF )33,019,319$ 33,019,319$ -$ -$
California Asset Management Program 1,111,790 1,111,790 - -
Money Market Mutual Funds 7,940,792 7,940,792 - -
Negotiable Certificates of Deposit 14,374,721 3,398,984 5,338,540 5,637,197
U.S. T reasury Securities 61,139,057 11,754,420 30,598,390 18,786,247
U.S. Government Sponsored Enterprise Securities 16,373,620 4,965,420 2,705,760 8,702,440
San Diego County Investment Pool 1,247,336 1,247,336 - -
Total Inv estments 135,206,635$63,438,061$ 38,642,690$ 33,125,884$
In vestment Type
Remaining Maturity (in Months)
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 $250,000 or less are fully insured by the Federal Deposit Insurance
Corporation (FDIC), and therefore, do not seek a credit rating.CAMP follows GASB 79 liquidity,
maturity quality and diversification requirements to help protect the portfolio and its shareholders
during adverse market conditions. CAMP has a Standard & Poors rating AAAm.
The next table presents the minimum rating required by (where applicable) the Government Code,
the Investment Policy, or the debt agreements, and the actual rating as of year-end for each
investment type.
73
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 3 –Cash and Investments (Continued)
D.Risk Disclosures (Continued)
Minimum
Fair Legal AAA/
Value Rating AA+Not Rated
Investments:
Local Agency Investment Fund (LAIF)33,019,319$ N/A -$ 33,019,319$
California Asset Management Program 1,111,790 N/A 1,111,790 -
Money Market Mutual Funds 7,940,792 AAA 7,940,792 -
Negotiable Certificates of Deposit 14,374,721 N/A - 14,374,721
U.S. Treasury Securities*61,139,057 N/A - 61,139,057
U.S. Government Sponsored Enterprise Securities 16,373,620 N/A 16,373,620 -
San Diego County Investment Pool 1,247,336 N/A 1,247,336 -
Total Investments 135,206,635$26,673,538$ 108,533,097$
*Exempt from rating disclosure
Rating as of Year End
Investment Type
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. The City had no 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.
Custodial Credit Risk -Investments
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 City uses a third-
party bank for its custody and safekeeping service for its investment securities. All City investments
held in custody and safekeeping are held in the name of the City and are segregated from
securities owned by the bank. Investments are settled on Delivery vs. Payment (DVP) in
accordance with the third-party custodial agreement. This is included in the City’s Investment
Policy.
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.
74
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 3 –Cash and Investments (Continued)
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.
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, 2023, receivables consist of the following:
Governmental Business-Type
Activities Activities Total
Accounts receivable 3,260,768$ 2,462,711$ 5,723,479$
Taxes and assessments receivable 640,998 127,273 768,271
Accrued revenues 4,915,685 71,126 4,986,811
Total 8,817,451$ 2,661,110$ 11,478,561$
75
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 5 – Investment in Joint Ventures
Investment in joint ventures consists of the following as of June 30, 2023:
Proprietary Fund Investment in Joint Ventures
Cardiff Sanitary Division San Elijo Joint Facilities 35,573,192$
San Dieguito W ater District R.E. Badger Joint Facilities 24,533,426
San Dieguito W ater District R.E. Badger Financing Authority 663,259
25,196,685
Encinitas Sanitary Division Encina Joint Facilities 7,149,165
Total Investment in Joint Ventures 67,919,042$
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").
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, 2023, CSD's share of those costs was $1,937,323,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, 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.
76
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 5 –Investment in Joint Ventures (Continued)
B.San Dieguito Water District (Continued)
SDW D Santa Fe Facilities
45%55%Filtration Plant
31%69%Filtered Water 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, 2023, SDWD's share of those was $1,960,299,
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.
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 (ESD)
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 4.25 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, 2023, ESD's share
of those costs was $754,291, which is shown as "facility operations and maintenance" in the
accompanying financial statements.
77
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 6 –Long-Term Receivables
Long-term receivables consist of loans to developers and loans to employees for the purchase of
computer equipment, a program approved by the City Council to promote more efficient use of
technology.At June 30, 2023, loans receivable are shown in the next table.
Ir is Apartm ents 446,403$
Leuc adia property loans 242,960
Em ployee c om puter loans 17,680
Total 707,043$
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, 2023 was $446,403.
Leucadia Property Loans
On April 22, 2022,the City entered into two promissory note agreements for a total of $ 235,000 for two
properties secured by a Deed of Trust on the project. The payments under the notes are deferred and
will bear no interest. In the event of default, payment of principal will be due in full, including interest at
the rate of ten percent per annum from the date of recordation of the Deed of Trust.The outstanding
principal receivable on the two notes at June 30, 2023 was $142,960 and $100,000.
78
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 7 –Lease Receivable
Governmental Activities
As of June 30, 2023, the City has six cell tower leases for easements located throughout Encinitas.The
interest rate for each lease is 2.05 percent. The Initial lease agreement term ranges from 7-15 years
with the option to extend for four additional terms of five years. The total amount of lease revenue
recognized in the current reporting period from leases is $477,642 and the total amount of interest
received related to the lease was $41,451. The balance of the lease receivable at June 30, 2023 is
$1,767,331. The City has a deferred inflow of resources associated with these leases that will be
recognized as revenue over the lease term.The balance of the deferred inflow of resources at June
30, 2023 is $1,683,197.
Business-type Activities
As of June 30, 2023, the San Dieguito Water District has three cell tower leases for easements located
throughout Encinitas. The interest rate for each lease is 2.05 percent. The Initial lease agreement term
ranges from 5-10 years with the option to extend for four additional terms of five years. The total
amount of lease revenue recognized in the current reporting period from leases is $152,961 and the
total amount of interest received related to the lease was $52,643. The balance of the lease receivable
at June 30, 2023 is $2,519,274. The District has a deferred inflow of resources associated with these
leases that will be recognized as revenue over the lease term.The balance of the deferred inflow of
resources at June 30,2023 is $2,397,043.
79
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 8 –Capital Assets
A.Governmental Activities
The summary of changes in governmental activities capital assets for the year ended June 30, 2023
is as follows:
Balance Balance
June 30, 2022 Ad ditions Deletions Transfers June 30, 2023
Capital assets, not being depreciated:
Land 61,862,474$ -$ -$ -$ 61,862,474$
Land easements 2,443,333 - - - 2,443,333
Construction in progress 7,937,215 15,306,338 - (7,406,795) 15,836,758
SBITA assets in progress*- 15,900 - - 15,900
Total capital assets, not being depreciated 72,243,022 15,322,238 - (7,406,795) 80,158,465
Capital assets, being depreciated:
Public facilities 121,292,606 245,156 - 1,256,466 122,794,228
Vehicles, equipment and machinery 12,445,182 735,927 (899,570) 94,566 12,376,105
Right to use assets-building 47,765 237,900 (47,765) - 237,900
Right to use assets-equipment 11,321 - - - 11,321
Right to use assets-SBITA assets*1,323,435 251,310 - - 1,574,745
Infrastructure 152,698,309 - - 6,055,763 158,754,072
Total capital assets, being depreciated 287,818,618 1,470,293 (947,335) 7,406,795 295,748,371
Less accumulated depreciation
Public facilities (50,929,431) (3,949,117) - - (54,878,548)
Vehicles, equipment and machinery (7,757,297) (987,196) 751,630 - (7,992,863)
Right to use assets-building (44,090) (47,289) 47,765 - (43,614)
Right to use assets-equipment (4,600) (4,600) - - (9,200)
Right to use assets-subscriptions - (305,280) - - (305,280)
Infrastructure (62,399,234) (3,106,890) - - (65,506,124)
Total accumulated depreciation (121,134,652) (8,400,372) 799,395 - (128,735,629)
Total capital assets being depreciated, net 166,683,966 (6,930,079) (147,940) 7,406,795 167,012,742
Governmental activities capital assets, net 238,926,988$ 8,392,159$ (147,940)$ -$ 247,171,207$
* Beginning balance restated due to implementation of GASB Statement No. 96, Subscription-Based Information Technology
Arrangements. See note 19.
Depreciation expense was charged to the functions/programs of the governmental activities as
follows:
General government 1,862,266$
Public safety 567,064
Public works 3,354,893
Parks and recreation 1,944,659
Internal service funds 671,490
Total depreciation expense 8,400,372$
80
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 8 –Capital Assets (Continued)
B.Business-type Activities
The summary of changes in business-type activities capital assets for the year ended June 30,
2023 is as follows:
Balance Balance
June 30, 2022 Additions Deletions Transfers June 30, 2023
Capital assets, not being depreciated:
Land easements 3,450,544$ -$ -$ -$ 3,450,544$
Public works facility right of use 3,378,700 - - - 3,378,700
Construction in progress 544,296 3,178,932 - - 3,723,228
Total capital assets, not being depreciated 7,373,540 3,178,932 - - 10,552,472
Capital assets, being depreciated:
Structures and improvements 30,465,967 35,159 - - 30,501,126
Collection and distribution 64,285,621 1,442 - - 64,287,063
Machinery and equipment 2,789,762 - - - 2,789,762
Capacity rights 323,191 - - - 323,191
Total capital assets, being depreciated 97,864,541 36,601 - - 97,901,142
Less accumulated depreciation
Structures and improvements (8,651,007) (646,501) - - (9,297,508)
Collection and distribution (34,005,155) (1,049,836)- - (35,054,991)
Machinery and equipment (2,514,513) (66,367) - - (2,580,880)
Capacity rights (170,753) (6,464) - - (177,217)
Total accumulated depreciation (45,341,428) (1,769,168)- - (47,110,596)
Total capital assets being depreciated, net 52,523,113 (1,732,567)- - 50,790,546
Business-type activities capital assets, net 59,896,653$ 1,446,365$-$ -$ 61,343,018$
Depreciation expense was charged to the functions/programs of the business-type activities as
follows:
Cardiff Sanitary Divis ion 600,944$
San Dieguito W ater Dis tric t 634,863
Enc initas Sanitary D ivis ion 432,823
No n-m ajor Affordable Hous ing 100,538
Total 1,769,168$
81
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations
A summary of changes in long-term liabilities for the year ended June 30, 2023 is as follows:
Balance Balance Due Within Due in More
July 1, 2022 Additions Deletions June 30, 2023 One Year Than One Year
Governmental Activities:
Financed Purchases:
2008 Civic Center Roof Replacement 178,599$ -$ (178,599)$ -$ -$ -$
2017 Fire Apparatus 191,268 - (94,446) 96,822 96,822 -
2020 Fire Apparatus 589,970 - (101,475) 488,495 103,977 384,518
2023 Fire Apparatus - PNC - 1,065,760 - 1,065,760 130,688 935,072
2023 Fire Apparatus - Pinnacle - 859,596 - 859,596 105,605 753,991
Equipment Lease Liability 6,349 - (5,066) 1,283 1,283 -
Building Lease Liability 3,716 237,900 (43,222) 198,394 44,808 153,586
Subscription-Based IT Payable* 1,245,650 251,310 (313,353) 1,183,607 307,149 876,458
Bonded Debt:
2013 Community Park Bonds 4,835,000 - (375,000) 4,460,000 390,000 4,070,000
add: original issue premium 52,560 - (8,760) 43,800 - 43,800
2014 Moonlight Beach Tower (Series A) 2,615,000 - (75,000) 2,540,000 80,000 2,460,000
less: original issue discount (23,854) - 1,037 (22,817) - (22,817)
2014 Pacific View (Series B)230,000 - (230,000) - - -
2015 Library Refunding Bonds 12,385,000 - (640,000) 11,745,000 675,000 11,070,000
add: original issue premium 551,581 - (36,772) 514,809 - 514,809
2017 Park Refunding Bonds 8,585,000 - (785,000) 7,800,000 825,000 6,975,000
add: original issue premium 874,468 - (97,163) 777,305 - 777,305
2021 Pacific View (Series A) 9,425,000 - (105,000) 9,320,000 345,000 8,975,000
add: original issue discount (18,933) - 823 (18,110) - (18,110)
California Infrastructure and Economic
Development Bank Loan - 20,000,000 - 20,000,000 1,075,332 18,924,668
Claims payable 4,565,947 2,975,829 (1,989,311) 5,552,465 3,886,726 1,665,739
Compensated absences 2,772,463 5,600,613 (5,345,212) 3,027,864 1,683,446 1,344,418
Total governmental activities 49,064,784 30,991,008 (10,421,519) 69,634,273 9,750,836 59,883,437
Business-type Activities:
2017 CSD Note Payable to SEJPA 10,385,000 - (237,500) 10,147,500 245,000 9,902,500
add: original issue premium 877,799 - (35,111) 842,688 - 842,688
2007 SDW D Note Payable Badger 1,785,000 - (570,000) 1,215,000 595,000 620,000
2004 EHA Housing Note Payable 839,230 - (87,186) 752,044 88,550 663,494
2014 SDW D Water Revenue Bonds 1,480,000 - (725,000) 755,000 755,000 -
add: original issue premium 148,743 - (74,371) 74,372 - 74,372
Compensated absences (SDW D)214,083 385,377 (350,208) 249,252 136,115 113,137
Compensated absences (Affordable
Housing)12,521 22,103 (20,846) 13,778 6,346 7,432
Total business-type activities 15,742,376 407,480 (2,100,222) 14,049,634 1,826,011 12,223,623
Total long-term obligations 64,807,160$31,398,488$(12,521,741)$83,683,907$ 11,576,847$ 72,107,060$
* Beginning Balance restated due to implementation of GASB Statement No. 96, Subscription-Based Information Technology
Arrangements. See Note 19.
82
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations (Continued)
A.Governmental Activities
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 $98,641.
The annual debt service requirements for the lease outstanding at June 30, 2023 are as follows:
Ye ar Ending
June 30 Princ ipal In teres t Total
2024 96,822$ 1,819$ 98,641$
Total 96,822$ 1,819$ 98,641$
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 $115,311.The lease is accounted
for as a financed purchase,as the City will take ownership of the unit at maturity of the lease in
Fiscal Year 2027-28.
The annual debt service requirements for the lease outstanding at June 30, 2023 are as follows:
Year Ending
June 30 Principal Interest Total
2024 103,977$ 11,334$ 115,311$
2025 106,539 8,772 115,311
2026 109,165 6,146 115,311
2027 111,857 3,454 115,311
2028 56,957 698 57,655
Total 488,495$ 30,404$ 518,899$
2023 Fire Apparatus Lease
The City entered into a long-term lease arrangement in Fiscal Year 2022-2023 to finance the
purchase of a 2023 Pierce Enforcer Triple Combination Pumper Truck for $1,065,760. The lease
has a term of seven years, an interest rate of 4.99 percent, and annual payments of $182,260.The
lease is accounted for as a financed purchase, as the City will take ownership of the unit at maturity
of the lease in Fiscal Year 2029-30.
83
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations (Continued)
A.Governmental Activities
The annual debt service requirements for the lease outstanding at June 30, 2023 are as follows:
2023 Fire Apparatus Lease
The City entered into a long-term lease arrangement in Fiscal Year 2022-2023 to finance the
purchase of a 2023 Pierce Enforcer Pumper Engine Truck for $859,596. The lease has a term of
seven years, an interest rate of 4.93 percent, and annual payments of $146,697.The lease is
accounted for as a financed purchase, as the City will take ownership of the unit at maturity of the
lease in Fiscal Year 2029-30.
The annual debt service requirements for the lease outstanding at June 30, 2023 are as follows:
Year Ending
June 30 Principal Interest Total
2024 130,688$ 51,572$ 182,260$
2025 137,291 44,969 182,260
2026 144,227 38,033 182,260
2027 151,515 30,745 182,260
2028 159,169 23,091 182,260
2029-2030 342,870 21,650 364,520
Total 1,065,760$ 210,060$ 1,275,820$
Year Ending
June 30 Principal Interest Total
2024 105,605$ 41,092$ 146,697$
2025 110,876 35,821 146,697
2026 116,409 30,288 146,697
2027 122,219 24,478 146,697
2028 128,318 18,379 146,697
2029-2030 276,169 17,227 293,396
Total 859,596$ 167,285$ 1,026,881$
84
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations (Continued)
A.Governmental Activities (Continued)
Equipment Lease Liability
The City entered into a 29-month lease as lessee for the use of IN700SH Mailing Machine. An
initial lease liability was recorded in the amount of $11,321. As of June 30, 2023, the value of the
lease liability is $1,283. The City is required to make quarterly fixed payments of $1,354.The
lease has an interest rate of 2.05 percent. The equipment’s estimated useful life was 60 months as
of the contract commencement.
The annual debt service requirements for the lease outstanding at June 30, 2023 are as follows:
Year Ending
June 30 Principal In terest Total
2023 1,283$ 7$ 1,290$
Total 1,283$ 7$ 1,290$
2023 Rancho Santa Fe Fire Station Lease
The City entered into a long-term lease arrangement in Fiscal Year 2022-2023 to lease property at
770 Rancho Santa Fe Road for a fire station for $237,900. The lease has a term of five years, an
interest rate of 2.05 percent, and monthly payments of $3,930 with an annual increase of 3.0
percent.The lease is accounted for as a right-to-use asset, as the City will not take ownership of
the unit at maturity of the lease in Fiscal Year 2027-28.
The annual debt service requirements for the lease outstanding at June 30, 2023 are as follows:
Year Ending
June 30 Principal Interest Total
2024 44,808$ 3,649$ 48,457$
2025 47,203 2,708 49,911
2026 49,691 1,717 51,408
2027 52,276 674 52,950
2028 4,416 8 4,424
Total 198,394$ 8,756$ 207,150$
85
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations (Continued)
A.Governmental Activities (Continued)
Subscription-Based Information Technology (IT) Payable
The City has entered into 19 subscription-based IT arrangements for various software applications
and is required to make annual principal and interest payments over the arrangement terms as
noted in the table below. The payable at June 30, 2023, was $1,183,607.
Term in Interest Annual Subscription Subscription
Software Months Rate Payments Liability Asset
Tyler Munis-Payroll & HR Insights SAAS 101 2.53% 2,369$ 16,821$ 19,190$
Controlled Substance Module 34 2.04% 3,180 3,428 7,341
Cisco Subscription 36 2.58% 3,441 6,609 10,050
Aerial Imagery of SD County 32 3.11% 4,233 8,088 12,321
Tyler Munis-Financial Insights SAAS 101 2.53% 4,264 30,278 34,542
Tyler Munis-Revenue Insights SAAS 101 2.53% 4,264 30,278 34,542
Tyler Munis-Bus Mgmnt Insights SAAS 101 2.53% 4,264 30,278 34,542
Tyler Munis-My Civic Bundle SAAS 101 2.53% 4,738 33,642 38,380
Tyler Munis-Energov Community Dev Insights SAAS 101 2.53% 6,633 47,099 53,732
MRI Software 49 2.11% 7,515 23,330 35,097
Gov -Access W ebsite Design 53 2.11% 7,775 35,970 82,345
GOVInvest 95 2.53% 8,418 59,108 71,326
Debt Software 33 2.04% 9,318 18,920 28,238
Opengov-Reporting and Analytics Software 120 2.53% 9,995 101,517 111,512
Bid - Management Software 24 1.58%18,095 18,347 36,442
Microsoft W indows 10 36 2.58%19,962 38,429 58,391
Opengov-Budgeting and Planning Software 96 2.53%52,780 485,566 568,745
Geographic Information System(GIS)36 2.04%58,000 112,548 170,548
SOCBOX 28 3.12%84,109 83,351 167,461
313,353$1,183,607$ 1,574,745$
The future principal and interest lease payments as of June 30, 2023, are as follows:
Year Ending
June 30 Principal Interest Total
2024 307,149$ 29,538$ 336,687$
2025 211,718 21,699 233,417
2026 126,496 16,703 143,199
2027 125,668 13,577 139,245
2028 123,498 10,438 133,936
2029-2032 289,078 12,421 301,499
Total 1,183,607$ 104,376$ 1,287,983$
86
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –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 $510,000.Interest is due and payable semi-annually
at rates ranging from 2.00 percent to 3.00 percent. The bonds were issued at a premium,which is
being amortized over the life of the bonds on a straight-line basis in the government-wide financial
statements. The bonds are payable from lease payments to be made by the City of Encinitas for
the right to use certain real property and related improvements pursuant to a lease agreement
dated March 1, 2013, between the City as lessee and the EPFA as lessor. The bonds are secured
by pledged revenue consisting of all lease revenue paid by the City of Encinitas in addition to any
assets held in trust for the purpose of paying the lease payments. The EPFA has a leasehold on
the property until all the terms of the lease agreement are fulfilled.The refunding bonds are
payable from any source of legally available funds of the City.The bonds are subject to federal
arbitrage requirements.
The annual debt service requirements for the 2013 Lease Revenue Refunding Bonds outstanding
at June 30,2023 are as follows:
Year Ending
June 30 Principal Interest Total
2024 390,000$ 127,950$ 517,950$
2025 400,000 116,100 516,100
2026 410,000 103,950 513,950
2027 425,000 91,425 516,425
2028 435,000 78,525 513,525
2029-2033 2,400,000 184,500 2,584,500
Total 4,460,000$ 702,450$ 5,162,450$
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.
2014 Lease Revenue Bonds (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.
87
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations (Continued)
A.Governmental Activities (Continued)
2014 Lease Revenue Bonds (Moonlight Beach Lifeguard Tower -Continued)
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 EPFA
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 EPFA 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.
On July 28, 2021 the Encinitas Public Financing Authority issued the 2021 Federally Taxable Lease
Revenue Bonds to refund and defease a portion of the outstanding bonds noted above. The total
amount defeased during Fiscal Year 2022 was $8,675,000.
The annual debt service requirements for the 2014 Lease Revenue Bonds, Series A Moonlight
Beach Lifeguard Tower bonds outstanding at June 30,2023 are as follows:
Year Ending
June 30 Principal Interest Total
2024 80,000$ 86,731$ 166,731$
2025 85,000 84,069 169,069
2026 85,000 81,944 166,944
2027 90,000 79,644 169,644
2028 90,000 77,056 167,056
2029-2033 495,000 339,478 834,478
2034-2038 590,000 244,984 834,984
2039-2043 700,000 128,103 828,103
2044-2045 325,000 12,281 337,281
Total 2,540,000$ 1,134,290$ 3,674,290$
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
$1,065,000 through 2036.The bonds are subject to federal arbitrage requirements.
88
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations (Continued)
B.Governmental Activities (Continued)
2015 Library Refunding Bonds (Continued)
The annual debt service requirements for the 2015 Library Refunding Bonds outstanding at June
30,2023 are presented below.
Year Ending
June 30 Principal Interest Total
2024 675,000$ 382,456$ 1,057,456$
2025 700,000 351,581 1,051,581
2026 730,000 322,981 1,052,981
2027 750,000 299,006 1,049,006
2028 770,000 278,081 1,048,081
2029-2033 4,225,000 1,020,684 5,245,684
2034-2037 3,895,000 282,419 4,177,419
Total 11,745,000$2,937,208$ 14,682,208$
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 $1,140,000 through 2031.The bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2017 Park Refunding Bonds outstanding at June 30,
2023 are as follows:
Year Ending
June 30 Principal In terest Total
2024 825,000$ 315,250$ 1,139,500$
2025 870,000 274,000 1,140,250
2026 910,000 230,500 1,144,000
2027 955,000 185,000 1,140,500
2028 1,005,000 137,250 1,142,250
2029-2031 3,235,000 196,050 3,431,050
Total 7,800,000$ 1,338,050$ 9,137,550$
89
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations (Continued)
A.Governmental Activities (Continued)
2021 Pacific View (Series A) Bonds
On July 28, 2021,the Encinitas Public Financing Authority issued $9,505,000 of 2021 Federally
Taxable Lease Revenue Bonds Series A (Pacific View Property)for the purpose of refunding and
defeasing a portion of the $9,130,000 outstanding 2014 Lease Revenue Bonds which were used to
acquire a property known as the Pacific View Property and to pay costs of issuance. The term
bonds mature through 2045 and are subject to mandatory sinking requirements.Interest is due and
payable semi-annually at rates ranging from 0.35 percent to 3.0 percent.Annual debt service is
approximately $560,000 through 2045.The bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2021 Pacific View (Series A) Bonds outstanding at
June 30, 2023 are as follows:
Year Ending
June 30 Principal Interest Total
2024 345,000$ 215,171$ 560,171$
2025 345,000 212,946 557,946
2026 350,000 209,798 559,798
2027 355,000 205,759 560,759
2028 360,000 200,877 560,877
2029-2033 1,895,000 904,750 2,799,750
2034-2038 2,125,000 679,327 2,804,327
2039-2043 2,455,000 358,481 2,813,481
2044-2045 1,090,000 33,770 1,123,770
Total 9,320,000$ 3,020,879$ 12,340,879$
2022 California Infrastructure and Economic Development Bank Loan
On August 1, 2022,the City of Encinitas entered into a $20,000,000 lease financing arrangement
for the Leucadia Streetscape Project consisting of the construction of streetscape improvements
along North Coast Highway 101 in Encinitas.The lease term is for 15 years at an interest rate of
three percent. Interest is payable bi-annually with annual principal payments through August 2037.
90
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations (Continued)
A. Governmental Activities (Continued)
2022 California Infrastructure and Economic Development Bank Loan (Continued)
The annual debt service requirements for the 2022 California Infrastructure and Economic
Development Bak Loan outstanding at June 30, 2023 are as follows:
Year Ending
June 30 Principal Interest Total
2024 1,075,332$ 583,870$ 1,659,202$
2025 1,107,592 551,126 1,658,718
2026 1,140,819 517,400 1,658,219
2027 1,175,044 482,662 1,657,706
2028 1,210,295 446,882 1,657,177
2029-2033 6,618,390 1,658,994 8,277,384
2034-2038 7,672,528 589,040 8,261,568
Total 20,000,000$4,829,974$ 24,829,974$
B.Business-Type Activities
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 30,2023 is $16,047,134.During the year ended June 30, 2023,
interest paid on the 2017 Note Payable was $431,213 and net revenue was $1,602,310,or 240
percent of annual debt service. Management of CSD believes it is in compliance with these
covenants for Fiscal Year 2022-23.
91
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations (Continued)
B.Business-Type Activities (Continued)
2017 CSD Note Payable to San Elijo Joint Powers Authority (SEJPA)(Continued)
The annual debt service requirements for the 2017 CSD Note Payable to SEJPA outstanding at
June 30, 2023 are as follows:
Year Ending
June 30 Principal Interest Total
2024 245,000$ 424,088$ 669,088$
2025 255,000 414,288 669,288
2026 267,500 401,538 669,038
2027 280,000 388,163 668,163
2028 295,000 374,163 669,163
2029-2033 1,707,500 1,634,438 3,341,938
2034-2038 2,125,000 1,220,400 3,345,400
2039-2043 2,545,000 795,156 3,340,156
2044-2047 2,427,500 247,400 2,674,900
Total 10,147,500$5,899,634$ 16,047,134$
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 $635,000 through 2025.
The annual debt service requirements for the 2007 SDWD Note Payable to R.E. Badger Water
Facilities Financing Authority outstanding at June 30, 2023 are as follows:
Year Ending
June 30 Principal Interest Total
2024 595,000$ 40,915$ 636,043$
2025 620,000 13,950 633,950
Total 1,215,000$ 54,865$ 1,269,993$
92
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 –Long-Term Obligations (Continued)
C.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 $780,000 through 2024. The
bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2014 SDWD Water Refunding Bonds outstanding at
June 30, 2023 are as follows:
Year Ending
June 30 Principal In terest Total
2024 755,000$ 15,100$ 770,100$
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, 2023, is $2,039,693. During the year ended June 30, 2023
principal and interest paid was $1,405,744 and net revenue was $5,341,222 or 380 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 2022-23.
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 $98,938 in 2031. The note bears interest at 90
percent of the ten-year US Treasury note, adjustable every six years. The EHA is solely
responsible for repayment of this note.
93
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 9 – Long-Term Obligations (Continued)
B. Business-Type Activities (Continued)
2004 Encinitas Housing Authority (EHA)Note Payable (Continued)
The annual debt service requirements for the 2004 Encinitas Housing Authority Note Payable
outstanding at June 30, 2023 are as follows:
Year Ending
June 30 Principal Interest Total
2024 88,550$ 11,598$ 100,148$
2025 89,757 10,122 99,879
2026 91,226 8,653 99,879
2027 92,719 7,161 99,880
2028 94,221 5,658 99,879
2029-2032 295,571 7,582 303,153
Total 752,044$ 50,774$ 802,818$
Note 10 –Interfund Receivables, Payable and Transfers
A.Due To and From Other Funds
Individual interfund receivables and payables at June 30, 2023 were as follows:
Due from Due to
Other Funds Other Funds
Governmental Funds:
General Fund 640,475$ -$
Capital Improvements Capital Projects Fund 15,784,131 -
Infrastructure Improvements Special Revenue Fund - 15,710,539
Non-major Governmental Funds - 482,331
Enterprise Funds:
Non-major Affordable Housing Enterprise Fund - 101,301
Internal Service Funds - 130,435
Total 16,424,606$ 16,424,606$
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.
94
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 10 –Interfund Receivables, Payable and Transfers (Continued)
B.Transfers In and Out
Transfers in and out between funds for the year ended June 30, 2023 were as follows:
Transfers In Transfers Out
General Fund Infrastructure Improvements 1,068,428$
General Fund Non-Major Governmental Funds 49,650
General Fund Capital Projects Fund 1,480,148
2,598,226
Infrastructure Improvements Capital Projects Fund 2,221
Capital Projects Fund Infrastructure Improvements 15,188,981
Capital Projects Fund Non-Major Governmental Funds 901,245
Capital Projects Fund Non-Major Proprietary Fund 52,964
Capital Projects Fund General Fund 12,931,332
29,074,522
Non-Major Governmental Funds General Fund 4,902,567
Non-Major Governmental Funds Capital Projects Fund 359,825
5,262,392
Internal Service Funds Internal Service Funds 147,000
Internal Service Funds General Fund 3,871,327
4,018,327
Total 40,955,688$
Transfers into the General Fund consist of funds from the State Gasoline Tax, and the City’s
Development Impact Fee Fund, and the Capital Projects Fund. 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.
Transfers into the Capital Improvements Capital Projects Fund represent funds from the General
fund as well as other governmental funds including development impact fees, state and federal
capital grants that are restricted in their use for capital expenditures. All capital projects are
executed and expended through the Capital Improvements Capital Projects Fund.
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.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.
95
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 10 – Interfund Receivables, Payable and Transfers (Continued)
B. Transfers In and Out (Continued)
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.
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.
Note 11 – Fund Balance and Net Position Classifications
The City classifies fund balances, as shown on the Balance Sheet - Governmental Funds as of
June 30, 2023 as follows:
Capital Infrastructure
Improvements Improvements Other
General Capital Projects Special Revenue Governmental
Fund Fund Fund Funds Totals
Nonspendable:
Inventory and prepaid items 292,940$ -$ -$-$ 292,940$
Long-term receivable 17,680 - - - 17,680
Total nonspendable 310,620 - - - 310,620
Restricted:
Capital projects - 46,023,481 - - 46,023,481
Street maintenance and improvements - -- 1,458,480 1,458,480
Cable Franchise PEG funds - -- 374,239 374,239
Environmental initiatives - -- 1,005,941 1,005,941
Affordable housing - -- 234,131 234,131
Donations - -- 84,234 84,234
Parkland and open space - -- 1,702,440 1,702,440
Traffic mitigation - -- 224,877 224,877
Flood control - -- 562,722 562,722
Flexible saving account 198,865 - - - 198,865
Lighting and landscaping
assessments - - - 3,547,967 3,547,967
Fire protection - - - 477,438 477,438
Debt service 299 - - 3,200 3,499
Total restricted 199,164 46,023,481 -9,675,669 55,898,314
Committed:
Capital projects - 18,325,791 - - 18,325,791
Budget stabilization 2,007,833 - - - 2,007,833
Contingency reserve 18,033,753 - - - 18,033,753
Total committed 20,041,586 18,325,791 - - 38,367,377
Unassigned 14,292,959 - (13,905,911) - 387,048
Total Fund Balances 34,844,329$ 64,349,272$ (13,905,911)$ 9,675,669$ 94,963,359$
Major Funds
96
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 11 – Fund Balance and Net Position Classifications (Continued)
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.
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, 2023 was $18,033,753.
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, 2023 was $2,007,833.
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, 2023 was $14,292,959.
Note 12 – 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 Self-Insurance 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 Self-Insurance 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.
97
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 12 – Risk Management (Continued)
A. City of Encinitas - Risk Management and Insurance Programs (Continued)
The City is a member of the Public Risk Innovation, Solutions, and Management (PRISM), a
member directed risk sharing pool which covers liability claims or losses above the City’s $250,000
self-insured level. PRISM is a separate legal entity formed by the participating municipalities and
counties to provide pooled excess liability insurance coverage to its members. The members do not
hold any ownership stake in PRISM and have no claims to revenue or assets upon withdrawal.
PRISM 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 PRISM 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 $5,000,000 and statutory limits is
provided through contract reinsurance. City departments contribute premiums to the Self-Insurance
Fund based on annual rates set for each work class.
Changes in the balances of claims payable for liability and workers’ compensation during the past
two years are as follows:
Year Ended Year Ended
June 30, 2023 June 30, 2022
Claims payable, beginning of year 4,565,947$ 4,038,427$
Estimated incurred claims, net 2,975,829 2,696,205
Claims payments or closures (1,989,311) (2,168,685)
Claims payable, end of year 5,552,465$ 4,565,947$
B. San Dieguito Water District (SDWD) - Risk Management and Insurance Programs
Risk management programs and support for the SDWD are provided by the City of Encinitas
Administrative Services Department, for which the SDWD pays the City an annual fee (charge for
those services). Management has determined, based on modest self-insurance retention levels and
favorable claims experience, that no liability accruals were necessary.
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 worker's
compensation. As of June 30, 2023 in the opinion of SDWD’s management and general counsel,
there were no material claims which would require accrual in the accompanying financial
statements.
98
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 13 – 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 PRISM and LAWCX
(See Note 12).
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, 2023, the City had remaining contractual commitments totaling approximately $5.4
million for capital projects related to its governmental and business-type activities. The more
significant capital commitments included approximately $2.5 million for street improvement projects,
approximately $1.7 million for CSD pump station upgrades and pipeline rehabilitation-capacity
improvement projects. There were also commitments for park improvements projects for $0.5
million, emergency repairs for $0.2 million, and drainage improvements projects for approximately
$0.5 million.
Note 14 – California Public Employees’ Retirement System
The information in the following table includes the aggregate total pension related items for the
Miscellaneous and Safety plans of the City and the Miscellaneous plan of SDWD:
Miscellaneous Safety SDWD Total
Net Pension Liabilities 29,604,128$ 32,155,633$ 7,685,985$ 69,445,746$
Deferred Outflow of Resources 13,335,347 15,510,082 3,611,806 32,457,235
Deferred Inflow of Resources 221,738 2,352,025 1,180,000 3,753,763
Pension Expense (Income) 4,740,538 1,791,280 (777,228) 5,754,590
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)
99
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – 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, 2020 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.
100
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – 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.
101
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – California Public Employees’ Retirement System (Continued)
Employees Covered by Benefit Terms
As of the measurement date June 30, 2022, the following employees were covered by the benefit
terms for the City’s plans:
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 7.25 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 2022-23 was 10.55 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 13.75 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 2022-23 were 13.66 to 23.68
percent for fire members and 12.78 to 21.84 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.
Miscellaneous Safety SDWD
Active employees 162 62 23
Inactive employees or beneficiaries currently
receiving benefits 181 87 35
Inactive employees entitled to, but not yet receiving
benefits 177 41 16
Total 520 190 74
102
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – 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 6.75 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, 2023 for Tier 1, Tier 2, and PEPRA employees were 14.03 percent, 8.63
percent, and 7.47 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, 2022, the total pension liability was determined by
rolling forward the June 30, 2021 total pension liability. The June 30, 2022 total pension liabilities
were based on the following actuarial methods and assumptions:
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate 6.90%
Inflation
Salary Increases
Mortality Rate Table (1)
Post Retirement Benefit Increase The lesser of contract COLA or 2.30% until Purchasing
Power Protection Allowance floor on purchasing power
applies, 2.30% thereafter
Derived using CalPERS' Membership Data for all funds
Entry Age Actuarial Cost Method
2.30%
Varies by Entry Age and Service
(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of
mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019.
Pre-retirement and Post-retirement mortality rates include generational mortality improvement
using 80 percent of Scale MP-2020 published by the Society of Actuaries. For more details on
this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions
report from November 2021 that can be found on the CalPERS website.
103
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – California Public Employees’ Retirement System (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 6.90 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.
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. Using historical returns of all of the funds’ asset classes, expected
compound (geometric) returns were calculated over the next 20 years using a building-block
approach. The expected rate of return was then adjusted to account for assumed administrative
expenses of 10 Basis points. The expected real rates of return by asset class are as follows:
Assumed
Asset Real Return
Asset Class 1 Allocation Return 1,2
Global Equity - Cap-weighted 30.0% 4.54%
Global Equity - Non-Cap-weighted 12.0 3.84
Private Equity 13.0 7.28
Treasury 5.0 0.27
Mortgage-backed Securities 5.0 0.50
Investment Grade Corporates 10.0 1.56
High Yield 5.0 2.27
Emerging Market Debt 5.0 2.48
Private Debt 5.0 3.57
Real Assets 15.0 3.21
Leverage (5.0) (0.59)
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.
Subsequent Events
On July 12, 2021, CalPERS reported a preliminary 21.3 percent net return on investments for fiscal
year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the
excess return of 14.3 percent prescribes a reduction in investment volatility that corresponds to a
reduction in the discount rate used for funding purposes of 0.20 percent, from 7.00 percent to 6.80
percent.
104
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – California Public Employees’ Retirement System (Continued)
Subsequent Events (Continued)
Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle,
the board elected to defer any changes to the asset allocation until the ALM process concluded,
and the board could make its final decision on the asset allocation in November 2021.
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset
allocation along with the new capital market assumptions, economic assumptions and
administrative expense assumption support a discount rate of 6.90 percent (net of investment
expense but without a reduction for administrative expense) for financial reporting purposes. This
includes a reduction in the price inflation assumption from 2.50 percent to 2.30 percent as
recommended in the November 2021 CalPERS Experience Study and Review of Actuarial
Assumptions. This study also recommended modification to retirement rates, termination rates,
mortality rates and rates of salary increases that were adopted by the board. These new
assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022,
measurement date.
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 Pension
Liability Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at June 30, 2021 (Valuation Date) 126,665,921$ 116,107,354$ 10,558,567$
Changes Recognized for the Measurement Period:
Service Cost 2,760,919 - 2,760,919
Interest on the total pension liability 8,919,419 - 8,919,419
Difference between expected and actual experience (267,280) - (267,280)
Changes of assumptions 4,444,549 - 4,444,549
Contributions from the employer - 4,523,564 (4,523,564)
Contributions from employees - 1,098,127 (1,098,127)
Net investment income, net of administrative expense - (8,737,317) 8,737,317
Benefit payments, including refunds of employee
contributions (5,913,446) (5,913,446) -
Administrative expense - (72,328) 72,328
Net Changes during July 1, 2021 to June 30, 2022 9,944,161 (9,101,400) 19,045,561
Balance at June 30, 2022 (Measurement Date) 136,610,082$ 107,005,954$ 29,604,128$
Increase (Decrease)
Miscellaneous Plan
105
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – California Public Employees’ Retirement System (Continued)
Changes in the Net Pension Liability (Continued)
As of June 30, 2023, the City reported net pension liabilities for its proportionate shares of the net
pension liability of the Safety Plan as follows:
Plan Total Plan Plan Net
Pension Fiduciary Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2021 (Valuation date) 104,235,934$ 87,289,356$ 16,946,578$
Balance at June 30, 2022 (Measurement date) 110,979,116 78,823,483 32,155,633
Net changes during 2021-2022 6,743,182$ (8,465,873)$ 15,209,055$
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, 2022, 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, 2021 rolled forward to June 30, 2022 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, 2022 was as follows:
Safety
Plan
Proportionate share at June 30, 2022 0.48288%
Proportionate share at June 30, 2023 0.46795%
Change - Increase/(Decrease) (0.01493%)
As of June 30, 2023, the City reported net pension liabilities for its proportionate shares of the net
pension liability of the SDWD Plan as follows:
Plan Total Plan Plan Net
Pension Fiduciary Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2021 (Valuation Date) 25,065,548$ 20,907,541$ 4,158,007$
Balance at June 30, 2022 (Measurement Date) 26,430,565 18,744,580 7,685,985
Net changes during 2021-2022 1,365,017$ (2,162,961)$ 3,527,978$
106
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – California Public Employees’ Retirement System (Continued)
Changes in the Net Pension Liability (Continued)
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, 2022, 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, 2021 rolled forward to June 30, 2022 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, 2022
was as follows:
SDWD
Plan
Proportionate share at June 30, 2022 0.21898%
Proportionate share at June 30, 2023 0.16426%
Change - Increase/(Decrease) (0.05472%)
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 6.90 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 (5.90 percent) or one percentage point higher (7.90 percent) than the
current rate:
Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%)Rate (6.90%)(7.90%)
City Miscellaneous 48,411,655$ 29,604,128$ 14,119,946$
City Safety 47,481,675 32,155,633 19,630,055
SDWD 11,288,948 7,685,985 4,721,641
107,182,278$ 69,445,746$ 38,471,642$
Plan's Net Pension Liability/(Asset)
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.
107
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – California Public Employees’ Retirement System (Continued)
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:
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension
For the year ended June 30, 2023, the City recognized pension expense/(income) of $4,740,538,
$1,791,280, and ($777,228) for the Miscellaneous, Safety and SDWD plans, respectively. At June
30, 2023, the City reported deferred outflows resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Deferred Deferred Deferred
Outflows Inflows Outflows Inflows
of Resources of Resources of Resources of Resources
Contribution made after the measurement date 4,800,004$ -$ 3,844,428$ -$
Difference between expected and actual experience 12,020 (221,738) 1,330,805 (349,185)
Difference between employer's contribution and
proportionate share of contribution 3,097,716 - - (2,002,840)
Changes of assumptions - - 3,242,261 -
Net difference between projected and actual earnings on
pension plan investments 5,425,607 - 5,077,824 -
Adjustments due to difference in proportions - - 2,014,764 -
Total 13,335,347$ (221,738)$ 15,510,082$ (2,352,025)$
Miscellaneous Plan Safety Plan
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.
108
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – California Public Employees’ Retirement System (Continued)
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension
(Continued)
The $4,800,004 and $3,844,428 reported as deferred outflows of resources related to contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in
the fiscal year ended June 30, 2024. Other amounts reported as deferred outflows of resources
and deferred inflows of resources related to pensions will be recognized as pension expense as
follows:
Miscellaneous Safety
Plan Plan
Measurement Deferred Outflows Deferred Outflows
Period (Inflows) of (Inflows) of
Ending June 30 Resources Resources
2023 2,126,301$ 2,751,201$
2024 2,055,489 2,222,066
2025 787,451 1,242,824
2026 3,344,364 3,097,538
2027 - -
Thereafter - -
8,313,605$ 9,313,629$
For the year ended June 30, 2023, the City recognized pension income of $777,228 for the SDWD
Plan. At June 30, 2023 the City reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred outflows Deferred inflows
of Resources of Resources
Contribution made after the measurement date 1,090,727$ -$
Difference between expected and actual
experience 154,350 (103,377)
Changes of assumptions 787,590 -
Net difference between projected and actual
earnings on pension plan investments 1,407,868 -
Difference between employer's actual contributions
and proportionate share of contributions 171,271 (283,380)
Adjustments due to difference in proportions - (793,243)
Total 3,611,806$ (1,180,000)$
109
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 14 – California Public Employees’ Retirement System (Continued)
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension
(Continued)
The $1,090,727 reported as deferred outflows of resources related to contributions subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the fiscal year
ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be recognized as pension expense as follows:
Measurement Deferred
Period Outflows (Inflows)
Ending June 30 Of Resources
2024 183,749$
2025 161,433
2026 134,797
2027 861,100
2028 -
Thereafter -
1,341,079$
Note 15 – 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,
2021 and was used to determine the June 30, 2022 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 OPEB Liabilities 6,014,129$ 196,781$ 6,210,910$
Deferred Outflow of Resources 2,665,792 149,985 2,815,777
Deferred Inflow of Resources 984,279 47,029 1,031,308
OPEB Expense 452,055 22,210 474,265
110
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 15 – Other Postemployment Benefits (OPEB) (Continued)
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 ($149
per month in 2022, $151 per month in 2023, 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 12 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, 2021, the
date of the latest actuarial valuation:
Active plan members 233
Inactive plan members or beneficiaries
currently receiving benefits 97
Total 330
111
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 15 – Other Postemployment Benefits (OPEB) (Continued)
B. City of Encinitas Retiree Health Plan (Continued)
Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2022. The total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2021. The
net OPEB liability at June 30, 2023 was:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at June 30, 2021 (Valuation Date) 11,584,059$ 7,380,422$ 4,203,637$
Changes Recognized for the Measurement Period:
Service Cost 214,950 - 214,950
Interest on the total OPEB liability 770,329 - 770,329
Change of assumptions 1,001,453 - 1,001,453
Difference between expected and actual experience (78,230) - (78,230)
Employer contributions - 1,228,804 (1,228,804)
Net investment income - (1,128,691) 1,128,691
Benefit payments, including refunds of member
contributions (957,022) (957,022) -
Administrative expenses - (2,103) 2,103
Net Changes during July 1, 2021 to June 30, 2022 951,480 (859,012) 1,810,492
Balance at June 30, 2022 (Measurement Date) 12,535,539$ 6,521,410$ 6,014,129$
Actuarial Assumptions
The net OPEB liability in the June 30, 2021 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
Discount Rate 6.00%
Inflation 2.50%
Investment Rate of Return
Healthcare Trend Rate
6.00%, assuming actuarially determined contributions funded into
CERBT Investment Strategy 1.
Based on actual rate for 2022 and decreasing in 2023 from 6.25% to
4.50% in 2030 and thereafter.
112
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 15 – Other Postemployment Benefits (OPEB) (Continued)
B. City of Encinitas Retiree Health Plan (Continued)
Actuarial Assumptions (Continued)
The actuarial assumptions used in the June 30, 2021 valuation were based on the results of an
actuarial experience study for the period July 1, 2020 to June 30, 2021.
Discount Rate
The discount rate used to measure the net OPEB liability was 6.0 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 7.59 percent with an additional
margin for adverse deviation.
The table below reflects the 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-Term Expected
Asset Class Allocation Real Rate of Return*
Global equity 49.00% N/A
Fixed income 23.00% N/A
Treasury securities (TIPS) 5.00% N/A
Commodities 3.00% N/A
REITs 20.00% N/A
* Long-term expected rate of return is 6.00 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 (5.0 percent) or
1-percentage-point higher (7.0 percent) than the current discount rate:
Discount Rate - 1%Current Discount Discount Rate + 1%
(5.00%)Rate (6.00%)(7.00%)
Net OPEB Liability 7,494,870$ 6,014,129$ 4,783,916$
113
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 15 – 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% Decrease Current Rate 1% Increase
5.25% decreasing 6.25% decreasing 7.25% decreasing
to 3.50%to 4.50%to 5.50%
Net OPEB Liability 4,593,412$ 6,014,129$ 7,741,187$
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, 2023, the City recognized OPEB expense of $452,055 for the City
Plan. At June 30, 2023 the City reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
OPEB contribution made after the measurement period 1,049,280$ -$
Changes of assumptions 936,710 (13,107)
Difference between expected
actual experience 116,640 (971,172)
Net difference between projected and
actual earnings on investments 563,162 -
2,665,792$ (984,279)$
114
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 15 – 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 $1,049,280 reported as deferred outflows of resources related to contributions subsequent to
the measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year
ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to OPEB will be recognized as OPEB expense as follows:
Measurement Deferred
Period Outflows (Inflows)
Ending June 30 of Resources
2023 (3,261)$
2024 (1,166)
2025 (29,767)
2026 238,099
2027 93,395
Thereafter 334,933
632,233$
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, 2021 was used to
determine the June 30, 2022 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 12 years on a level-percentage of pay basis. SDWD’s funding policy is to
pre-fund the ADC through the trust.
115
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 15 – 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, 2021, the date of
the latest actuarial valuation:
SDWD
Plan
Active plan members 22
Inactive plan members or beneficiaries
currently receiving benefits 14
Total 36
Change in the Net OPEB Liability
SDWD’s net OPEB liability was measured as of June 30, 2022. The total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2021. The
net OPEB liability at June 30, 2023 was:
Total OPEB Plan Fiduciary Net Net OPEB
Liability Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at June 30, 2022 529,704$ 439,835$ 89,869$
(Measurement Date: June 30, 2021)
Changes Recognized for the Measurement Period:
Service cost 16,153 - 16,153
Interest on the total OPEB liability 35,867 - 35,867
Contributions from the employer - 58,628 (58,628)
Net investment income, net of administrative expense - (65,791) 65,791
Difference between expected and actual experience 477 - 477
Benefit payments, including refunds of employee
contributions (37,420) (37,420) -
Change in assumptions 47,129 - 47,129
Administrative expense - (123) 123
Net Changes 62,206 (44,706) 106,912
Balance at June 30, 2023 591,910$ 395,129$ 196,781$
Increase (Decrease)
SDWD Plan
116
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 15 – Other Postemployment Benefits (OPEB) (Continued)
C. San Dieguito Water District – Retiree Health Plan (Continued)
Actuarial Assumptions
The net OPEB liability in the June 30, 2022 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement, unless otherwise
specified:
Actuarial Methods and Assumptions Used to Determine Total OPEB Liability
Actuarial Cost Method: Entry Age Normal
Actuarial Assumptions:
Discount Rate 6.00%
Inflation 2.50%
Wage Inflation 2.80% per annum, in aggregate
Investment Rate of Return 6.00%, assuming actuarially determined
contributions funded into CERBT Investment
Strategy 1.
Healthcare Trend Rate Based on actual rate for 2022 and decreasing in
2023 from 6.25% to 4.50% in 2030 and thereafter.
Discount Rate
The discount rate used to measure the net OPEB liability was 6.0 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 the 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-Term Expected
Asset Class Allocation Real Rate of Return*
Global equity 49.00% N/A
Fixed income 23.00% N/A
Treasury securities (TIPS) 5.00% N/A
Commodities 3.00% N/A
REITs 20.00% N/A
* Long-term expected rate of return is 6.00 percent
117
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 15 – 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 (5.0 percent) or 1-
percentage point higher (7.0 percent) than the current discount rate:
Discount Rate - 1%Current Discount Discount Rate + 1%
(5.00%)Rate (6.00%)(7.00%)
Net OPEB Liability 266,191$ 196,781$ 138,866$
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% Decrease Current Rate 1% increase
5.25% 6.25% 7.25%
decreasing to 3.50%decreasing to 4.50%decreasing to 5.50%
Net OPEB Liability 126,798$ 196,781$ 283,061$
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.
118
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 15 – Other Postemployment Benefits (OPEB) (Continued)
C. San Dieguito Water District – Retiree Health Plan (Continued)
OPEB Expense and Deferred Outflows/Inflows of Resources to OPEB
For the year ended June 30, 2023, SDWD recognized OPEB expense of $22,210 for the SDWD
Plan. At June 30, 2023, SDWD reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contribution subsequent to the measurement date 67,722$ -$
Changes of assumptions 46,166 -
Difference between expected and actual experience 424 (47,029)
Net difference between projected and actual earnings on
OPEB plan investments 35,673 -
Total 149,985$ (47,029)$ The $67,722 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year
ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to OPEB will be recognized as OPEB expense as follows:
Measurement Deferred
Period Outflows (Inflows)
Ending June 30 of Resources
2023 1,679$
2024 1,588
2025 (214)
2026 20,746
2027 2,049
Thereafter 9,386
35,234$
Note 16 – 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.
119
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 16 – Encinitas Ranch Golf Authority (Continued)
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. Depending on the net revenues
from golf operations, the City may benefit financially from the operations. In Fiscal Year 2022-23, the
Board approved a surplus excess net revenue payment to the City of $522,966.
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.
Note 17 – Special Assessment Debt
City of Encinitas - Community Facilities District (CFD) #1: Encinitas Ranch Community
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 $2,284,214 to $2,303,275.
The transaction will save the taxpayers an average of $200,000 in annual debt service of the prior
bonds.
As of June 30, 2023, the outstanding balance on the 2021 Taxable Special Tax Refunding Bonds was
$17,070,000. 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 2021 Taxable 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 both of this Assessment District, collecting the assessments and paying
the Assessment District’s bills, as well as other administrative duties. The City has no duty or obligation
to pay any liabilities or potential liabilities of the Assessment District. 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.
120
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
Note 18 – Other Required Disclosures
Deficit Fund Balances/Net Position
At June 30, 2023, the Infrastructure Improvements Special Revenue fund had a fund deficit of
$13,905,911. The deficit is anticipated to be funded from future grants, other revenues, and operating
or capital transfers.
At June 30, 2023, the Wastewater Support Internal Service fund had a fund deficit of $187,592. The
deficit is anticipated to be funded by Cardiff Sanitary Division and Encinitas Sanitary Division funds.
At June 30, 2023, the Vehicle Maintenance Internal Service fund had a deficit of $180,247. The deficit
is anticipated to be funded by the General Fund, the Cardiff Sanitary Division, Encinitas Sanitary
Division, and San Dieguito Water District funds.
Note 19 – Prior Period Adjustment
With the implementation of GASB 96 – Subscription-Based Information Technology (IT) Arrangements,
the beginning balance of capital assets and long-term liabilities were restated as follows:
Governmental
Activities
Net position, beginning of year, as previously reported 226,394,235$
Subscription-based IT assets 1,323,435
Subscription-based IT payable (1,245,650)
Net position, beginning of year, as restated 226,472,020$
Note 20 – Subsequent Events
On September 28, 2023, the City of Encinitas purchased a 1.43-acre site located at the northwest
corner of Coast Highway 101 and La Costa Avenue for $6,000,000. The property is made of up two
parcels which are zoned for Visitor Service Commercial in the North 101 Corridor Specific Plan. A
significant portion of the northern parcel contains environmental constraint areas including wetland
vegetations and bluffs. These sensitive areas are considered protected environmental resources under
the City’s General Plan and Municipal Code and would be placed in an open space easement upon any
future development of the two parcels. No new development is proposed or anticipated on the two
subject parcels. The purchase was funded with a temporary transfer from the Contingency Reserve.
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122
REQUIRED SUPPLEMENTARY
INFORMATION
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124
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
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.
125
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Note 2 –Budgetary Comparison Schedule
General Fund
Variance with
Original Final Actual Final Budget
REVENUES:
Taxes:
Property 58,107,960$ 59,110,000$ 60,802,331$ 1,692,331$
Real property transfer 600,000 600,000 676,729 76,729
Sales 16,190,000 17,640,000 17,138,284 (501,716)
Franchise 2,891,977 2,391,977 2,581,664 189,687
Transient occupancy 3,424,136 3,922,096 4,836,738 914,642
Total taxes 81,214,073 83,664,073 86,035,746 2,371,673
Licenses and permits 236,000 236,000 379,267 143,267
Intergovernmental 713,726 911,794 1,026,194 114,400
Charges for services 8,249,850 9,304,850 9,510,414 205,564
Fines, forfeitures and penalties 210,253 310,253 485,215 174,962
Use of money and property 1,094,777 1,094,777 1,192,301 97,524
Other 611,793 891,458 1,542,803 651,345
Total revenues 92,330,472 96,413,205 100,171,940 3,758,735
EXPENDITURES:
General government:
City Council 521,443 585,499 450,492 135,007
City Attorney 985,000 985,000 729,057 255,943
City Manager 6,484,625 6,699,307 5,406,071 1,293,236
City Clerk 719,376 740,728 545,736 194,992
Finance 2,693,365 2,800,125 2,405,192 394,933
Non-departmental 5,047,129 5,096,467 4,878,044 218,423
Total general government 16,450,938 16,907,126 14,414,592 2,492,534
Public safety:
Law enforcement 17,681,754 17,681,754 13,489,544 4,192,210
Fire and marine safety 19,374,576 19,778,875 19,405,525 373,350
Total public safety 37,056,330 37,460,629 32,895,069 4,565,560
Public works:
Administration 588,880 618,672 506,968 111,704
Environmental programs 1,500 1,500 747 753
Street maintenance 3,398,265 3,482,679 3,114,883 367,796
Facility maintenance 1,882,965 2,018,965 1,665,245 353,720
Stormwater 1,609,824 1,621,568 1,511,548 110,020
Total public works 7,481,434$ 7,743,384$ 6,799,391$ 943,993$
Budgeted Amounts
126
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Note 2 –Budgetary Comparison Schedule (Continued)
General Fund (Continued)
Varianc e with
Original Final Ac tual Final Budget
Developm ent s ervic es - planning:
Planning 5,258,397$ 6,012,011$ 5,210,572$ 801,439$
Code enforc em ent 2,663,214 3,744,804 3,605,376 139,428
Building s ervic es 890,544 920,757 867,452 53,305
Total developm ent s ervic es - planning 8,812,155 10,677,572 9,683,400 994,172
Developm ent s ervic es - engineering:
City engineering 1,744,529 1,772,233 1,259,190 513,043
Traffic engineer ing 1,041,299 1,051,975 806,743 245,232
Coas tal z one m anagem ent 1,360,823 1,360,823 1,259,765 101,058
Total developm ent s ervic es - engineering 4,146,651 4,185,031 3,325,698 859,333
Parks and rec reation:
Ad minis tration 1,412,777 1,469,360 1,255,155 214,205
Park servic es 3,129,753 3,180,429 2,812,537 367,892
Beac h servic es 774,147 784,147 728,284 55,863
Recreational s ervic es 902,760 917,967 805,469 112,498
Community and s enior c enter 2,589,107 2,687,085 2,415,923 271,162
Total parks and rec reation 8,808,544 9,038,988 8,017,368 1,021,620
Capital outlay:
General Governm ent - - 267,210 (267,210)
Public s afety - 10,000 247,854 (237,854)
Public works 36,100 36,100 7,329 28,771
Total c apital outlay 36,100 46,100 522,393 (476,293)
Debt s er vic e:
In teres t - - 21,509 (21,509)
Princ ipal - - 358,461 (358,461)
Total debt s er vic e - - 379,970 (379,970)
Total e xpe nditure s 82,792,152 86,058,830 76,037,881 10,020,949
EXCESS OF REVENUES OVER EXPENDIT URES 9,538,320 10,354,375 24,134,059 13,779,684
OT HER FINANCING SOURCES (USES)
Is suanc e of leas es and s ubs criptions - - 489,210 489,210
Trans fers in - operating 1,176,166 1,176,166 1,118,078 (58,088)
Trans fers in - capital 2,258,038 2,988,186 1,480,148 (1,508,038)
Trans fer in - other - 20,000,000 - (20,000,000)
Trans fers out - operating (5,966,133) (5,914,280) (5,768,390) 145,890
Trans fers out - capital (6,938,304) (31,831,332) (11,831,332) 20,000,000
Trans fers out - debt s ervic e (5,329,770) (5,621,145) (4,105,504) 1,515,641
Total othe r financing sources (use s)(14,800,003) (19,202,405) (18,617,790) 584,615
NET CHANGE IN FUND BALANCE (5,261,683)$ (8,848,030)$ 5,516,269 14,364,299$
Fund balance - be ginning of year 29,328,060
Fund balance - e nd of year 34,844,329$
Budgeted Amounts
127
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Note 2 – Budgetary Comparison Schedule (Continued)
Infrastructure Improvements Special Revenue Fund
Original Final Actual Variance with
Budget Budget Am ounts Final Budget
REVENUES:
Taxes and assessments 578,064$ 678,064$ 1,182,462$ 504,398$
Intergovernmental 5,147,064 15,295,192 13,860,746 (1,434,446)
Use of money and property - - 87,529 87,529
Total revenues 5,725,128 15,973,256 15,130,737 (842,519)
EXPENDITURES:
Current:
General government 316,747 386,547 349,179 37,368
Public safety - - 4,217,541 (4,217,541)
Total expenditures 316,747 386,547 4,566,720 (4,180,173)
REVENUES OVER
(UNDER) EXPENDITURES 5,408,381 15,586,709 10,564,017 (5,022,692)
OTHER FINANCING SOURCES (USES):
Transfers in - 2,221 2,221 -
Transfers out (5,097,064) (16,280,147)(16,257,409) 22,738
Total other financing sources (uses)(5,097,064) (16,277,926)(16,255,188) 22,738
NET CHANGE IN FUND BALANCE 311,317$ (691,217)$ (5,691,171) (4,999,954)$
Fund balance (deficit) - beginning of year (8,214,740)
Fund balance (deficit) - end of year (13,905,911)$
128
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129
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Measurement period 2021-22 2020-21 2019-20 2018-19 2017-18
Service cost 2,760,919$ 2,455,688$ 2,434,146$ 2,479,472$ 2,258,659$
Interest on total pension liability 8,919,419 8,546,269 8,158,681 7,738,502 7,270,761
Differences between expected and actual experience (267,280) (99,908) 372,587 1,229,327 (486,531)
Changes in assumptions 4,444,549 - - - (739,046)
Benefit payments, including refunds of employee contributions (5,913,446) (5,272,858) (4,892,893) (4,489,668) (4,164,974)
Net change in total pension liability 9,944,161 5,629,191 6,072,521 6,957,633 4,138,869
Total pension liability - beginning 126,665,921 121,036,730 114,964,209 108,006,576 103,867,707
Total pension liability - ending (a)136,610,082$ 126,665,921$ 121,036,730$ 114,964,209$ 108,006,576$
Plan fiduciary net position
Contributions - employer 4,523,564$ 4,188,756$ 3,929,445$ 3,638,301$ 3,755,605$
Contributions - employee 1,098,127 1,090,697 1,026,068 1,018,181 992,534
Investment income (expense) (net of administrative expenses)(8,737,317) 21,437,557 4,507,691 5,588,433 6,559,803
Benefit payments (5,913,446) (5,272,858) (4,892,893) (4,489,668) (4,164,974)
Other (72,328) (94,657) (127,322) (60,191) (351,784)
Net change in plan fiduciary net position (9,101,400) 21,349,495 4,442,989 5,695,056 6,791,184
Plan fiduciary net position - beginning 116,107,354 94,757,859 90,314,870 84,619,814 77,828,630
Plan fiduciary net position - ending (b)107,005,954$ 116,107,354$ 94,757,859$ 90,314,870$ 84,619,814$
Net pension liability - ending (a)-(b)29,604,128$ 10,558,567$ 26,278,871$ 24,649,339$ 23,386,762$
Plan fiduciary net position as a percentage of the
total pension liability 78.33% 91.66% 78.29% 78.56% 78.35%
Covered payroll 14,960,487$ 14,147,287$ 14,169,243$ 13,653,405$ 13,562,192$
Net pension liability as a percentage of covered
payroll 197.88%74.63%185.46% 180.54% 172.44%
Notes to Schedule:
Benefit Changes:
Changes in Assumptions:
*Fiscal Year 2014-15 was the first year of implementation; therefore, only nine years of information are shown.
Note 3 - Schedule of Changes in the Net Pension Liability and Related Ratios
Last Ten Fiscal Years*
City Miscellaneous Plan
Effective with the June 30,2021 valuation date (2022 measurement date),the accounting discount rate was reduced from 7.15%to 6.90%.In determining the long-
term expected rate of return,CalPERS took into account long-term market return expectations as we ll as the expected pension fund cash flows.Projected returns
for all asset classes are estimated,combined with risk estimates,and are used to project compound (geometric)returns over th long terms.The discount rate
used to discount liabilities was informed by the long-term projected portfolio return.In addition,demographic assumptions and the inflation rate assumption were
changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions.There were no changes from 2019 through 2021.In
2018,demographic assumptions and inflation rate were changed in accordance to the 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.In 2016,there were no changes.In 2015,amounts
reported reflect an adjustment of the discount rate from 7.5%(net of administrative expense)to 7.65%(without a reduction for pension plan administrative
expense). In 2014, amounts reported were based on the 7.5% discount rate.
The figures above generally include any liability that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date.
130
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
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) -
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 (expense) (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:
Changes in Assumptions:
*Fiscal Year 2014-15 was the first year of implementation; therefore, only nine years of information are shown.
Effective with the June 30,2021 valuation date (2022 measurement date),the accounting discount rate was reduced from 7.15%to
6.90%.In determining the long-term expected rate of return,CalPERS took into account long-term market return expectations as well
as the expected pension fund cash flows.Projected returns for all asset classes are estimated,combined with risk estimates,and are
used to project compound (geometric)returns over th long terms.The discount rate used to discount liabilities was informed by the
long-term projected portfolio return.In addition,demographic assumptions and the inflation rate assumption were changed in
accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions.There were no changes from 2019
through 2021.In 2018,demographic assumptions and inflation rate were changed in accordance to the 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.In 2016,there were no changes.In 2015,amounts reported reflect an adjustment of the discount rate from 7.5%(net of
administrative expense)to 7.65%(without a reduction for pension plan administrative expense).In 2014,amounts reported were
based on the 7.5% discount rate.
Note 3 - Schedule of Changes in the Net Pension Liability and Related Ratios (Continued)
Last Ten Fiscal Years*
City Miscellaneous Plan
The figures above generally include any liability that may have resulted from voluntary benefit changes that occurred on or before the
Measurement Date.
131
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Measurement pe riod 2021-22 2020-21 2019-20 2018-19 2017-18
Plan's proportion of the net pension liability 0.46795% 0.48288% 0.41435% 0.40330% 0.39412%
Plan's proportionate share of the net pension liability 32,155,633$ 16,946,578$ 27,605,534$ 25,176,127$ 23,125,137$
Plan's covered payroll 6,876,495$ 6,779,318$ 7,089,554$ 6,117,357$ 6,197,680$
467.62%249.97%389.38% 411.55%373.13%
Plan's fiduciary net position 78,823,483$ 87,289,356$ 73,544,213$ 71,581,823$ 69,535,698$
71.03% 83.74%72.71%73.98% 75.04%
Plan's proportionate share of aggregate employer
contributions 3,658,997$ 3,224,229$ 2,979,381$ $ 2,457,135 2,203,690$
Note s to Schedule:
Be nefit changes
Changes in assumptions
*Fiscal Year 2014-15 was the first year of implementation; therefore, only nine years of information are shown.
There were no changes to benefit terms that applied to all member of the Public Agency Pool.
Safe ty Plan
Last Ten Fiscal Y ears*
Note 4 - Sche dule of the City 's Proportionate Share of the Ne t Pe nsion Liability
Effective with the June 30,2021 valuation date (2022 me asurement date),the accounting discount rate was reduced from 7.15%to 6.90%.In determining
the long-term expected rate of return,CalPERS took into account long-term ma rket return expectations as well as the expected pension fund cash flows.
Projected returns for all asset classes are estimated,combined with risk estimates,and are used to project compound (geometric)returns over th long
terms.The discount rate used to discount liabilities was informed by the long-term projected portfolio return.In addition,demographic assumptions and the
inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions.T here were no
changes in 2021,2020 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
132
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
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$
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$
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
Changes in assumptions
*Fiscal Year 2014-15 was the first year of implementation; therefore, only nine years of information are shown.
Plan's fiduciary net position as a percentage of the total
pension liability
Effective with the June 30,2021 valuation date (2022 measurement date),the accounting discount rate was reduced from 7.15%to
6.90%.In determining the long-term expected rate of return,CalPERS took into account long-term market return expectations as well
as the expected pension fund cash flows.Projected returns for all asset classes are estimated,combined with risk estimates,and are
used to project compound (geometric)returns over th long terms.The discount rate used to discount liabilities was informed by the
long-term projected portfolio return.In addition,demographic assumptions and the inflation rate assumption were changed in
accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions.There were no changes in 2021,2020
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.
There were no changes to benefit terms that applied to all member of the Public Agency Pool.
Note 4 - Schedule of the City's Proportionate Share of the Net Pension Liability (Continued)
Last Ten Fiscal Years*
Safety Plan
133
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Measurement period 2021-22 2020-21 2019-20 2018-19 2017-18
Plan's proportion of the net pension liability 0.16426%0.21898% 0.16817% 0.18923% 0.18768%
Plan's proportionate share of the net pension liability 7,685,985$ 4,158,007$ 7,093,742$ 7,577,802$ 7,073,051$
Plan's covered payroll 1,781,652$ 1,853,964$ 1,901,202$ 1,887,782$ $1,918,865
431.40% 224.28% 373.12% 401.41% 368.61%
Plan's fiduciary net position 18,744,579$ 20,907,541$ 17,181,179$ 16,145,141$ 18,744,580$
70.92% 83.41%70.78%68.06%69.48%
Plan's proportionate share of aggregate employer
contributions 712,933$ 617,487$ 1,581,186$ 585,749$ 504,492$
Notes to Schedule:
Benefit changes
Changes in assumptions
*Fiscal Year 2014-15 was the first year of implementation; therefore, only nine 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
Effective with the June 30,2021 valuation date (2022 measurement date),the accounting discount rate was reduced from 7.15%to 6.90%.In
determining the long-term expected rate of return,CalPERS took into account long-term market return expectations as well as the expected pension
fund cash flows.Projected returns for all asset classes are estimated,combined with risk estimates,and are used to project compound (geometric)
returns over th long terms.The discount rate used to discount liabilities was informed by the long-term projected portfolio return.In addition,
demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of
Actuarial Assumptions.There were no changes in 2021,2020 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
There were no changes to benefit terms that applied to all member of the Public Agency Pool.
134
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Measure me nt period 2016-17 2015-16 2014-15 2013-14
Plan's proportion of the net pens ion liability 0.18116%0.18103% 0.18296% 0.06074%
Plan's proportionate share of the net pens ion 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 fiduc iary 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 em ployer
contributions 472,819$ 356,509$ 271,845$ 241,133$
Notes to Schedule :
Bene fit changes
*Fiscal Year 2014-15 was the first year of implem entation; therefore, only nine years of information are shown.
Last T en Fiscal Ye ars*
Note 4 - Sche dule of the City's Proportionate Share of the Net Pension Liability (Continue d)
Effec tive with the June 30,2021 valuation date (2022 measurem ent date),the ac counting dis count rate was reduced from 7.15%to
6.90%.In deter mining the long-term expec ted rate of return,CalPERS took into ac count long-term market return expec tations as well as
the expec ted pens ion fund cash flows.Projec ted returns for all as set clas ses ar e es tim ated,combined with ris k es tim ates ,and ar e used
to projec t compound (geom etric )returns over th long term s.The dis count rate us ed to dis count liabilities was inform ed by the long-term
projec ted portfolio return.In addition,dem ographic assumptions and the inflation rate as sumption were changed in ac cordanc e with the
2021 CalPERS Experienc e Study and Review of Ac tuarial As sumptions .There were no changes in 2021,2020 and 2019.In 2018,
dem ographic as sumptions and inflation rate were changed in accordanc e to CalPERS Experienc e Study and Review of Ac tuarial
As sumptions . In 2017, the ac counting dis count rate was reduc ed from 7.65 perc ent to 7.15 perc ent.
Plan's proportionate s hare of the net pens ion liability as a
per centage of c overed payroll
Plan's fiduc iary net position as a percentage of the total
pension liability
There were no changes to benefit term s that applied to all m em ber of the Public Agency Pool.
San Die guito Water District Plan
135
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Fiscal Ye ar 2022-23 2021-22 2020-21 2019-20 2018-19
Ac tuarially determ ined c ontribution 4,311,914$ 4,095,863$ 3,901,665$ 3,420,863$ 3,252,930$
Contributions in relation to the ac tuarially
determined contributions (4,800,004) (4,523,563) (3,989,449) (3,929,445) (3,637,225)
Contribution de ficiency (excess)(488,090)$ (427,700)$ (87,784)$ (508,582)$ (384,295)$
Covered payroll 17,091,652$ 14,960,487$ 14,147,287$ 14,169,243$ 13,653,405$
Contributions as a percentage of covered
payroll 28.08% 30.24%28.20% 27.73%26.64%
Notes to Schedule
Fis cal Year: June 30, 2023
Valuation Date: June 30, 2020
Methods and assumptions used to determine contribution rates:
Ac tuarial c ost method Entry Age Normal
Am ortization method/period Level perc ent of payroll
As set valuation m ethod Ma rket Value
Inflation 2.30%
Projec ted s alary increas es Va ries by entry age and servic e
Payroll growth 2.75%
Discount rate 6.90%
*Fis cal Year 2014-15 was the firs t year of implem entation; therefore, only nine years of information are shown.
Note 5 - Sche dule of Contributions - Pension
Last T en Fiscal Years*
City Misce llaneous Plan
136
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Fiscal Ye ar 2017-18 2016-17 2015-16 2014-15
Ac tuarially determ ined c ontribution 2,832,401$ 2,723,629$ 2,585,583$ 1,815,263$
Contributions in relation to the ac tuarially
determined c ontributions (3,755,605) (2,944,153) (2,927,539) (2,077,263)
Contribution deficie ncy (e xcess)(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 c overed
payroll 27.69% 22.36% 22.90% 16.04%
Notes to Sche dule
Fiscal Year: June 30, 2023
Valuation Date: June 30, 2020
Methods and assumptions use d to de termine contribution rate s:
Ac tuarial c os t m ethod Entry Age Normal
Am ortiz ation method/period Level perc ent of payroll
As set valuation m ethod Ma rket Value
In flation 2.30%
Projec ted s alary inc reas es Varies by entry age and s ervic e
Payroll growth 2.75%
Discount rate 6.90%
*Fiscal Year 2014-15 was the firs t year of im plem entation; therefore, only eight years of information are show n.
Note 5 - Sche dule of Contributions - Pe nsion (Continue d)
Last T en Fiscal Ye ars*
City Misce llane ous Plan
137
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Fiscal Ye ar 2022-23 2021-22 2020-21 2019-20 2018-19
Contrac tually determined contribution
(ac tuarially determined)3,844,428$ 3,658,997$ 3,224,229$ 2,979,381$ 2,457,135$
Contributions in relation to the actuarially
determined c ontributions (3,844,428) (3,658,997) (3,224,229) (2,979,381) (2,457,135)
Contribution de ficie ncy (e xce ss)-$ -$ -$ -$ -$
Covered payroll 7,246,576$ 6,876,495$ 6,779,318$ 7,089,554$ 6,117,357$
Contributions as a percentage of covered
payroll 53.05%53.21%47.56% 42.02% 40.17%
Note s to Sche dule
Fiscal Year: June 30, 2023
Valuation Date: June 30, 2020
Methods and assumptions use d to dete rmine contribution rates:
Ac tuarial c ost method Entry Age Normal
Am ortiz ation m ethod/period Level percent of payroll
As set valuation method Ma rket Value
In flation 2.30%
Projec ted salary increas es Va ries by entry age and service
Payroll growth 2.75%
Discount rate 6.90%
*Fiscal Year 2014-15 was the first year of implem entation; therefore, only nine years of information are s hown.
Last T en Fiscal Ye ars*
Safety Plan
Note 5 - Sche dule of Contributions - Pe nsion (Continue d)
138
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Fiscal Ye ar 2017-18 2016-17 2015-16 2014-15
Contrac tually determ ined c ontribution
(actuarially determined)2,203,690$ 1,108,343$ 1,609,491$ 1,251,594$
Contributions in relation to the actuarially
determ ined c ontributions (2,203,690) (1,108,343) (1,609,491) (1,251,594)
Contribution de ficie ncy (e xcess)-$ -$ -$ -$
Covered payroll 6,197,680$ 6,017,165$ 5,841,908$ 5,671,755$
Contributions as a perc entage of c overed
payroll 35.56%18.42% 27.55% 22.07%
Note s to Sche dule
Fiscal Year: June 30, 2023
Valuation Date: June 30, 2020
Methods and assumptions used to de termine contribution rates:
Ac tuarial c os t method Entry Age Normal
Am ortiz ation m ethod/period Level percent of payroll
As set valuation m ethod Ma rket Value
In flation 2.30%
Projec ted s alar y inc reas es Varies by entry age and s ervic e
Payroll growth 2.75%
Discount r ate 6.90%
*Fiscal Year 2014-15 was the firs t year of im plem entation; therefore, only nine year s of information are shown.
Last T en Fiscal Ye ars*
Safe ty Plan
Note 5 - Sche dule of Contributions - Pe nsion (Continue d)
139
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Note 5 - Sche dule of Contributions - Pe nsion (Continue d)
Fiscal Ye ar 2022-23 2021-22 2020-21 2019-20 2018-19
Contrac tually determined contribution
(ac tuarially determined) $ 1,090,727 $ 712,933 $ 617,487 $ 1,581,186 585,749$
Contributions in relation to the actuarially
determined c ontributions (1,090,727) (712,933) (617,487) (1,581,186) (585,749)
Contribution de ficie ncy (e xce ss)-$ -$ -$ -$ -$
Covered payroll 2,145,484$ 1,781,652$ 1,853,964$ 1,901,202$ 1,887,782$
Contributions as a percentage of covered
payroll 50.84%40.02%33.31% 83.17% 31.03%
Note s to Sche dule
Fiscal Year: June 30, 2023
Valuation Date: June 30, 2020
Methods and assumptions use d to dete rmine contribution rates:
Ac tuarial c ost method Entry Age Normal
Am ortiz ation m ethod/period Level percent of payroll
As set valuation method Ma rket Value
In flation 2.30%
Projec ted salary increas es Va ries by entry age and service
Payroll growth 2.75%
Discount rate 6.90%
*Fiscal Year 2014-15 was the first year of implem entation; therefore, only nine years of information are s hown.
Last T en Fiscal Ye ars*
San Die guito Wate r District Plan
140
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Note 5 - Sche dule of Contributions - Pe nsion (Continue d)
2017-18 2016-17 2015-16 2014-15
Contrac tually determ ined c ontribution
(actuarially determined)504,492$ 472,819$ 356,509$ 271,845$
Contr ibutions in relation to the actuarially
determ ined c ontributions (504,492) (472,819) (356,509) (271,845)
Contribution de ficie ncy (e xcess)-$ -$ -$ -$
Covered payroll 1,918,865$ 1,862,975$ 1,808,714$ 1,756,033$
Contributions as a perc entage of c overed
payroll 26.29%25.38% 19.71% 15.48%
Note s to Sche dule
Fiscal Year: June 30, 2023
Valuation Date: June 30, 2020
Methods and assumptions used to de termine contribution rates:
Ac tuarial c os t method Entry Age Normal
Am ortiz ation m ethod/period Level percent of payroll
As set valuation m ethod Ma rket Value
In flation 2.30%
Projec ted s alar y inc reas es Varies by entry age and s ervic e
Payroll growth 2.75%
Discount r ate 6.90%
*Fiscal Year 2014-15 was the firs t year of im plem entation; therefore, only nine year s of information are shown.
Last T en Fiscal Ye ars*
San Die guito Wate r Dist rict Plan
141
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Me asure ment Pe riod 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17
Total OPEB liability
Service cost 214,950$ 220,788$ 218,453$ 196,193$ 190,479$ 178,018$
Interest 770,329 775,472 791,330 880,167 867,343 856,058
Differences between expected and actual experience (78,230) 155,520 (291,076) (1,439,425) - -
Changes of assumptions 1,001,453 62,038 - (26,216) - -
Benefit payments, including refunds of member contributions (957,022) (958,086) (937,434) (882,565) (878,114) (892,532)
Ne t change in total OPEB liability 951,480 255,732 (218,727) (1,271,846) 179,708 141,544
Total OPEB liability - beginning 11,584,059 11,328,327 11,547,054 12,818,900 12,639,192 12,497,648
Total OPEB liability - ending (a)12,535,539$ 11,584,059$ 11,328,327$ 11,547,054$ 12,818,900$ 12,639,192$
OPEB fiduciary ne t position
Contributions - employer 1,228,804$ 1,213,291$ 1,370,746$ 1,270,357$ 1,102,937$ 1,092,690$
Net investment income (expense)(1,128,691) 1,726,138 205,412 308,900 358,109 403,267
Benefit payments, including refunds of member contributions (957,022) (958,086) (937,434) (882,565) (878,114) (892,532)
Administrative expense (2,103) (2,385) (2,859) (1,100) (2,366) (2,046)
Other expense - - - - (4,620) -
Ne t change in plan fiduciary net position (859,012) 1,978,958 635,865 695,592 575,946 601,379
Plan fiduciary net position - be ginning 7,380,422 5,401,464 4,765,599 4,070,007 3,494,061 2,892,682
Plan fiduciary net position - e nding (b)6,521,410 7,380,422 5,401,464 4,765,599 4,070,007 3,494,061
Plan net OPEB liability - e nding (a) - (b)6,014,129$ 4,203,637$ 5,926,863$ 6,781,455$ 8,748,893$ 9,145,131$
Plan fiduciary net position as a pe rcentage
of the total OPEB Liability 52.02%63.71%47.68% 41.27% 31.75%27.64%
Covered-employee payroll**25,586,921$ 24,147,416$ 23,224,242$ 22,403,865$ 21,767,304$ 17,816,557$
Plan ne t OPEB liability as a perce ntage
of cov ered-e mploy ee pay roll 23.50%17.41%25.52% 30.27% 40.19%51.33%
* Fiscal Year 2017-18 was the first year of implementation; therefore, only six years of information are shown.
**Except for former Encinitas Fire Protection District employees hired on or before March 15,1985,the City provides the minimum required employer contributions
under the CalPERS Health Plan for eligible retirees and surviving spouses.The mi nimum required employer contribution is statutorily set under PEMHCA.The
employer contribution to OPEB is not based on a measure of pay; thus the covered-employee payroll is presented.
Note 6 - Schedule of Changes in the Ne t OPEB Liability and Re lated Ratios
Last Ten Fiscal Years*
City Plan
142
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Measure ment Period 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17
Total OPEB liability
Service cost 16,153$ 21,430$ 21,235$ 14,633$ 14,241$ 13,309$
Interest 35,867 37,529 35,691 36,301 34,637 33,225
Differences between expected and actual experience 477 (33,644) (4,100) (43,215) - -
Changes of assumptions 47,129 4,477 - 1,843 - -
Benefit payments, including refunds of member contributions (37,420) (29,083) (24,514) (25,651) (25,346) (29,268)
Ne t change in total OPEB liability 62,206 709 28,312 (16,089) 23,532 17,266
Total OPEB liability - be ginning 529,704 528,995 500,683 516,772 493,240 475,974
Total OPEB liability - e nding (a)591,910$ 529,704$ 528,995$ 500,683$ 516,772$ 493,240$
OPEB fiduciary ne t position
Contributions - employer 58,628$ 55,006$ 53,542$ 55,068$ 59,205$ 63,332$
Net investment income (expense)(65,791) 98,249 11,264 16,640 18,590 18,770
Benefit payments, including refunds of member contributions (37,420) (29,083) (24,514) (25,651) (25,346) (29,268)
Ad mi nistrative expense (123) (136) (157) (59) (358) (95)
Ne t change in plan fiduciary ne t position (44,706) 124,036 40,135 45,998 52,091 52,739
Plan fiduciary ne t position - be ginning 439,835 315,799 275,664 229,666 177,575 124,836
Plan fiduciary ne t position - ending (b)395,129 439,835 315,799 275,664 229,666 177,575
Plan ne t OPEB liability - e nding (a) - (b)196,781$ 89,869$ 213,196$ 225,019$ 287,106$ 315,665$
Plan fiduciary ne t position as a perce ntage
of the total OPEB Liability 66.75% 83.03%59.70%55.06% 44.44%36.00%
Cov ered-e mploy ee pay roll**2,049,341$ 2,017,862$ 2,046,974$ 1,903,385$ 1,978,669$ 1,802,043$
Plan ne t OPEB liability as a pe rce ntage
of cov ered-e mploy ee pay roll 9.60%4.45%10.42%11.82% 14.51%17.52%
* Fiscal Year 2017-18 was the first year of implementation; therefore, only six years of information are shown.
**The San Dieguito Water District provides the mi nimum required employer contributions under the CalPERS Health Plan for eligible retirees and surviving spouses.
The mi nimum required employer contribution is statutorily set under PEMHCA.The employer contribution to OPEB is not based on a measure of pay;thus the covered-
employee payroll is presented.
Note 6 - Sche dule of Change s in the Ne t OPEB Liability and Re lated Ratios (Continue d)
Last Te n Fiscal Y ears*
San Die guito Wate r District Plan
143
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18
Actuarially determined contribution (ADC)1,005,796$ 978,878$ 1,151,134$ 1,117,605$ 958,415$ 930,499$
Contributions in relation to the ADC (1,049,280) (1,199,069) (1,157,839) (1,315,490) (1,269,129) (1,092,690)
Contribution deficiency (excess)(43,484)$ (220,191)$ (6,705)$ (197,885)$ (310,714)$ (162,191)$
Covered employee payroll 27,790,659$25,586,921$24,147,416$23,224,242$22,403,865$21,767,304$
Contributions as a percentage of covered
employee payroll 3.78% 4.69% 4.79% 5.66% 5.66% 5.02%
Notes to Schedule
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
12-year period
Asset valuation method Market value
Inflation 2.50% per annum
Payroll growth 2.80% per annum, in aggregate
Investment rate of return 6.00% per annum
Note 7 - Schedule of Contributions - OPEB
Last Ten Fiscal Years*
Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were from the June 30,2022
actuarial valuation report.
City Plan
* Fiscal Year 2017-18 was the first year of implementation; therefore, only six years of information are shown.
144
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2023
Fiscal Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18
Actuarially determined contribution (ADC)48,799$ 48,134$ 48,689$ 48,200$ 53,291$ 52,780$
Contributions in relation to the ADC (67,722) (76,390) (55,006) (68,350) (66,983) (63,332)
Contribution deficiency (excess)(18,923)$ (28,256)$ (6,317)$ (20,150)$ (13,692)$ (10,552)$
Covered employee payroll 2,357,353$ 2,049,341$ 2,017,862$ 2,046,974$ 1,903,385$ 1,978,669$
Contributions as a percentage of covered
employee payroll 2.87% 3.73% 2.73% 3.34% 3.52% 3.20%
Notes to Schedule
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
17-year period
Asset valuation method Market value
Inflation 2.50% per annum
Payroll growth 2.80% per annum, in aggregate
Investment rate of return 6.00% per annum
Last Ten Fiscal Years*
Note 7 - Schedule of Contributions - OPEB (Continued)
Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were from the June 30,2022
actuarial valuation report.
San Dieguito Water District Plan
* Fiscal Year 2017-18 was the first year of implementation; therefore, only six years of information are shown.
145
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146
SUPPLEMENTARY INFORMATION
147
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148
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.
149
City of Encinitas
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2023
Grants and Development Lighting and
Housing Impact Landscaping
ASSETS
Cash and investments 1,821,380$ 3,764,472$ 4,573,999$
Receivables 443,334 - 54,075
Interest receivable 8,611 36,451 20,562
Long-term receivable 194,466 494,897 -
Restricted cash and investments - - -
Total assets 2,467,791$ 4,295,820$ 4,648,636$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities 316,770$ -$ 247,399$
Due to other funds 482,331 - -
Deposits and other liabilities - 25,009 -
Total liabilities 799,101 25,009 247,399
Deferred inflows of resources:
Unavailable revenue 194,466 473,803 -
Total deferred inflows of resources 194,466 473,803 -
Fund Balances:
Nonspendable - - -
Restricted 1,474,224 3,797,008 4,401,237
Total fund balances 1,474,224 3,797,008 4,401,237
Total liabilities, deferred inflows of
resources and fund balances 2,467,791$ 4,295,820$ 4,648,636$
(Continued)
Special Revenue
150
City of Encinitas
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2023
Encinitas Total
Public Other
City Financing Governmental
Debt Service Authority Funds
ASSETS
Cash and investments -$ -$ 10,159,851$
Receivables - - 497,409
Interest receivable - - 65,624
Long-term receivable - - 689,363
Restricted cash and investments - 3,200 3,200
Total assets -$ 3,200$ 11,415,447$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities -$ -$ 564,169$
Due to other funds - - 482,331
Deposits and other liabilities - - 25,009
Total liabilities - - 1,071,509
Deferred inflows of resources:
Unavailable revenue - - 668,269
Total deferred inflows of resources - - 668,269
Fund Balances:
Nonspendable - - -
Restricted - 3,200 9,675,669
Total fund balances - 3,200 9,675,669
Total liabilities, deferred inflows of
resources and fund balances -$ 3,200$ 11,415,447$
Debt Service
151
City of Encinitas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Non-Major Governmental Funds
For the Year Ended June 30, 2023
Grants and Development Lighting and
Housing Impact Landscaping
REVENUES:
Taxes and assessments 932,010$ -$ 2,447,145$
Intergovernmental 1,036,636 - -
Development impact fees - 1,036,487 -
Use of money and property 66,821 107,839 86,878
Other 233,417 - 73,669
Total revenues 2,268,884 1,144,326 2,607,692
EXPENDITURES:
Current:
General government 106,173 - -
Public safety 299,003 - -
Public works 776,431 - 752,767
Development services - planning 305,481 - -
Development services - engineering - - 657,129
Parks and recreation 351,274 - 962,918
Capital outlay 28,393 - -
Debt service:
Principal - - -
Interest and fiscal charges - - -
Total expenditures 1,866,755 - 2,372,814
REVENUES OVER
(UNDER) EXPENDITURES 402,129 1,144,326 234,878
OTHER FINANCING SOURCES (USES):
Proceeds from SBITAs - - -
Transfers in 789,674 350,214 17,000
Transfers out (401,245) (499,650) (50,000)
Total other financing sources (uses)388,429 (149,436) (33,000)
NET CHANGE IN FUND BALANCES 790,558 994,890 201,878
FUND BALANCES:
Beginning of year 683,666 2,802,118 4,199,359
End of year 1,474,224$ 3,797,008$ 4,401,237$
(Continued)
Special Revenue
152
City of Encinitas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)
Non-Major Governmental Funds
For the Year Ended June 30, 2023
Debt Service
Encinitas Total
Public Other
City Financing Governmental
Debt Service Authority Funds
REVENUES:
Taxes and assessments -$ -$ 3,379,155$
Intergovernmental - - 1,036,636
Development impact fees - - 1,036,487
Use of money and property - 4,633 266,171
Other - - 307,086
Total revenues - 4,633 6,025,535
EXPENDITURES:
Current:
General government - - 106,173
Public safety - - 299,003
Public works - - 1,529,198
Development services - planning - - 305,481
Development services - engineering - - 657,129
Parks and recreation - - 1,314,192
Capital outlay - - 28,393
Debt service:
Principal 178,599 2,210,000 2,388,599
Interest and fiscal charges 500,372 1,232,977 1,733,349
Total expenditures 678,971 3,442,977 8,361,517
REVENUES OVER
(UNDER) EXPENDITURES (678,971) (3,438,344) (2,335,982)
OTHER FINANCING SOURCES (USES):
Proceeds from SBITAs - - -
Transfers in 678,971 3,426,533 5,262,392
Transfers out - - (950,895)
Total other financing sources (uses)678,971 3,426,533 4,311,497
NET CHANGE IN FUND BALANCES - (11,811) 1,975,515
FUND BALANCES:
Beginning of year - 15,011 7,700,154
End of year -$ 3,200$ 9,675,669$
153
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, 2023
Final Actual Variance with
Budget Amounts Final Budget
REVENUES:
Taxes and assessments 816,370$ 932,010$ 115,640$
Intergovernmental 1,131,244 1,036,636 (94,608)
Use of money and property 93,965 66,821 (27,144)
Other 233,417 233,417 -
Total revenues 2,274,996 2,268,884 (6,112)
EXPENDITURES:
Current:
General government 111,965 106,173 5,792
Public safety 338,816 299,003 39,813
Public works 941,832 776,431 165,401
Development services - planning 365,735 305,481 60,254
Parks and recreation 462,195 351,274 110,921
Capital Outlay 29,000 28,393 607
Total expenditures 2,249,543 1,866,755 382,788
REVENUES OVER
(UNDER) EXPENDITURES 25,453 402,129 376,676
OTHER FINANCING SOURCES (USES):
Transfers in 824,017 789,674 (34,343)
Transfers out (393,008) (401,245) (8,237)
Total other financing sources (uses)431,009 388,429 (42,580)
NET CHANGE IN FUND BALANCE 456,462$ 790,558 334,096$
FUND BALANCE:
Beginning of year 683,666
End of year 1,474,224$
154
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, 2023
Final Actual Variance with
Budget Amounts Final Budget
REVENUES:
Development impact fees 981,400$ 1,036,487$ 55,087$
Use of money and property 88,021 107,839 19,818
Total revenues 1,069,421 1,144,326 74,905
EXPENDITURES:
Current:
Planning and building - - -
Total expenditures - - -
REVENUES OVER
(UNDER) EXPENDITURES 1,069,421 1,144,326 74,905
OTHER FINANCING SOURCES (USES):
Transfers in 350,214 350,214 -
Transfers out (535,000) (499,650) 35,350
Total other financing sources (uses)(184,786) (149,436) 35,350
NET CHANGE IN FUND BALANCE 884,635$ 994,890 110,255$
FUND BALANCE:
Beginning of year 2,802,118
End of year 3,797,008$
155
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, 2023
Final Actual Variance with
Budget Amounts Final Budget
REVENUES:
Taxes and assessments 2,354,301$ 2,447,145$ 92,844$
Use of money and property 107,321 86,878 (20,443)
Other 22,000 73,669 51,669
Total revenues 2,483,622 2,607,692 124,070
EXPENDITURES:
Current:
Public works 803,881 752,767 51,114
Development services - engineering 769,598 657,129 112,469
Parks and recreation 1,068,413 962,918 105,495
Total expenditures 2,641,892 2,372,814 269,078
REVENUES OVER
(UNDER) EXPENDITURES (158,270) 234,878 393,148
OTHER FINANCING SOURCES (USES):
Transfers in 46,000 17,000 (29,000)
Transfers out (50,000) (50,000) -
Total other financing sources (uses)(4,000) (33,000) (29,000)
NET CHANGE IN FUND BALANCE (162,270)$ 201,878 364,148$
FUND BALANCE:
Beginning of year 4,199,359
End of year 4,401,237$
156
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.
157
City of Encinitas
Combining Statement of Net Position
Internal Service Funds
June 30, 2023
Risk Wastewater Vehicle Vehicle
Management Support Maintenance Replacement Total
ASSETS
Current assets:
Cash and investments 6,627,757$ -$ -$ 1,674,090$ 8,301,847$
Accounts receivable 495 - - - 495
Inventory and prepaid items - - - - -
Total current assets 6,628,252 - - 1,674,090 8,302,342
Noncurrent assets:
Capital assets:
Construction in progress - - - 1,925,356 1,925,356
Utility, plant, vehicles, and equipment, net - - - 3,124,512 3,124,512
Total noncurrent assets - - - 5,049,868 5,049,868
Total assets 6,628,252 - - 6,723,958 13,352,210
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension related items 137,024 149,539 63,017 - 349,580
Deferred OPEB related items 21,148 34,101 15,861 - 71,110
Total deferred outflows of resources 158,172 183,640 78,878 - 420,690
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 229,042 28,122 12,236 110,840 380,240
Due to other funds - 66,128 64,307 - 130,435
Current portion of leases payable - - - 437,092 437,092
Total current liabilities 229,042 94,250 76,543 547,932 947,767
Noncurrent liabilities:
Lease payable - - - 2,073,581 2,073,581
Net pension liability 304,187 331,972 139,896 - 776,055
Net OPEB liability 47,710 76,932 35,782 - 160,424
Total noncurrent liabilities 351,897 408,904 175,678 2,073,581 3,010,060
Total liabilities 580,939 503,154 252,221 2,621,513 3,957,827
DEFERRED INFLOWS OF RESOURCES
Deferred pension related items 2,278 2,487 1,048 - 5,813
Deferred OPEB related items 7,808 12,591 5,856 - 26,255
Total deferred inflows of resources 10,086 15,078 6,904 - 32,068
NET POSITION
Net investment in capital assets - - - 2,441,833 2,441,833
Unrestricted 6,195,399 (334,592) (180,247) 1,660,612 7,341,172
Total net position 6,195,399$ (334,592)$ (180,247)$ 4,102,445$ 9,783,005$
158
City of Encinitas
Combining Statement of Revenues, Expenses, and Changes in Net Position
Internal Service Funds
For the Year Ended June 30, 2023
Risk Wastewater Vehicle Vehicle
Management Support Maintenance Replacement Total
OPERATING REVENUES:
Interfund revenues 1,457,528$ 1,068,427$ 532,468$ -$ 3,058,423$
Other revenues 101,645 - - 231,696 333,341
Total operating revenues 1,559,173 1,068,427 532,468 231,696 3,391,764
OPERATING EXPENSES:
Operational support services 1,195,904 190,486 230,608 - 1,616,998
Administrative support 664,608 730,943 301,858 - 1,697,409
Insurance and claims 2,815,213 - - - 2,815,213
Depreciation of capital assets - - - 671,490 671,490
Total operating expenses 4,675,725 921,429 532,466 671,490 6,801,110
Operating income (loss)(3,116,552) 146,998 2 (439,794) (3,409,346)
NONOPERATING REVENUES:
Gain (loss) on disposal of capital assets - - - (147,497) (147,497)
Interest expense - - - (31,509) (31,509)
Total nonoperating revenues - - - (179,006) (179,006)
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (3,116,552) 146,998 2 (618,800) (3,588,352)
Transfers in 2,812,541 - - 1,205,786 4,018,327
Transfers out - (147,000) - - (147,000)
Total capital contributions and transfers 2,812,541 (147,000) - 1,205,786 3,871,327
Net change in net position (304,011) (2) 2 586,986 282,975
NET POSITION:
Beginning of year 6,499,410 (334,590) (180,249) 3,515,459 9,500,030
End of year 6,195,399$ (334,592)$ (180,247)$ 4,102,445$ 9,783,005$
159
City of Encinitas
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2023
Risk Wastewater Vehicle Vehicle
Management Support Maintenance Replacement Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from other funds 1,458,197$ 1,068,427$ 532,468$ -$ 3,059,092$
Payments to employees (655,119) (741,443) (338,595) - (1,735,157)
Payments to suppliers and vendors (4,038,365) (179,984) (193,873) 97,363 (4,314,859)
Other revenues 101,645 - - 231,696 333,341
Net cash provided by (used in) operating activities (3,133,642) 147,000 - 329,059 (2,657,583)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING
ACTIVITIES:
Acquisition of capital assets - - - (2,395,037) (2,395,037)
Principal payment on long-term debt - - - (195,921) (195,921)
Interest payments on leases - - - (18,032) (18,032)
Proceeds from lease revenues - - - 1,925,356 1,925,356
Net cash (used in) capital and related financing activities - - - (683,634) (683,634)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in 2,812,541 - - 1,205,786 4,018,327
Transfers (out) - (147,000) - - (147,000)
Net cash provided by (used in) noncapital financing activities 2,812,541 (147,000) - 1,205,786 3,871,327
Net increase (decrease) in cash and cash equivalents (321,101) - - 851,211 530,110
CASH AND CASH EQUIVALENTS:
Beginning of year 6,948,858 - - 822,879 7,771,737
End of year 6,627,757$ -$ -$ 1,674,090$ 8,301,847$
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss) (3,116,552)$ 146,998$ 2$ (439,794)$ (3,409,346)$
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation - - - 671,490 671,490
Changes in operating assets and liabilities:
Accounts receivable 669 - - - 669
Inventory and prepaid items - - - - -
OPEB-related deferred outflows (13,884) (21,146) (8,597) - (43,627)
Pension-related deferred outflows (92,495) (95,357) (33,773) - (221,625)
Accounts payable and accrued liabilities (40,197) (34,200) (13,332) 97,363 9,634
Due to other funds - 28,392 37,130 - 65,522
Net OPEB liability 27,010 40,017 15,082 - 82,109
Net pension liability 204,056 210,132 74,133 - 488,321
OPEB-related deferred inflows (3,179) (7,003) (5,131) - (15,313)
Pension-related deferred inflows (99,070) (120,833) (65,514) - (285,417)
Total adjustments (17,090) 2 (2) 768,853 751,763
Net cash provided by (used in) operating activities (3,133,642)$ 147,000$ -$ 329,059$ (2,657,583)$
There were no non-cash capital and related financing activities.
160
Fiduciary Funds
Custodial Financial Statements are accounted for according to the nature of the fund. The City has an
Investment Custodial Fund and a Custodial Fund.
The Investment Custodial Fund accounts for the cash invested on behalf of the Encinitas Ranch Golf
Course.
The Custodial Fund accounts for one Community Facilities (Mello-Roos) District for which the City act
as an agent for debt service.
161
City of Encinitas
Combining Statement of Fiduciary Net Position
Custodial Funds
For the Year Ended June 30, 2023
Investment Custodial
Custodial Fund Fund Total
Assets:
Cash and investments (Note 3) 2,775,830$ 2,342,352$ 5,118,182$
Restricted cash and investments with fiscal agent (Note 3) - 1,779,232 1,779,232
Interest receivable 14,740 10,222 24,962
Current assessments receivable - 7,336 7,336
Total assets 2,790,570 4,139,142 6,929,712
Liabilities:
Accounts payable 100 - 100
Total liabilities 100 - 100
Net Position:
Restricted for:
Golf course 2,790,470 - 2,790,470
Bondholders - 4,139,142 4,139,142
Total net position 2,790,470$ 4,139,142$ 6,929,612$
162
City of Encinitas
Combining Statement of Changes in Fiduciary Net Position
Custodial Funds
For the Year Ended June 30, 2023
Investment Custodial
Custodial Fund Fund Total
Additions:
Special tax assessments -$ 1,432,022$ 1,432,022$
Excess golf revenue 1,834,447 901,525 2,735,972
Interest income (loss) 23,337 65,215 88,552
Total additions 1,857,784 2,398,762 4,256,546
Deductions:
Administrative fees 4,724 35,809 40,533
Contributions to the CFD No. 1 901,525 - 901,525
Surplus net revenue payment to the City 522,966 - 522,966
Bond principal 530,000 2,065,000 2,595,000
Bond interest 99,860 228,721 328,581
Total deductions 2,059,075 2,329,530 4,388,605
Change in net position (201,291) 69,232 (132,059)
NET POSITION:
Beginning of year 2,991,761 4,069,910 7,061,671
End of year 2,790,470$ 4,139,142$ 6,929,612$
163
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164
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 166
2 Changes in Net Position 168
3 Fund Balances of Governmental Funds 172
4 Changes in Fund Balances of Governmental Funds 174
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 176
6 Principal Property Taxpayers 177
7 Property Tax Levies and Collections 179
8 Direct and Overlapping Property Tax Rates 180
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 184
10 Ratios of General Bonded Debt Outstanding 186
11 Schedule of Direct and Overlapping Bonded Debt 187
12 Legal Debt Margin Information 188
13 Historical Debt Service Coverage 190
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 192
15 General Governmental Tax Revenue by Source 194
16 Taxable Sales by Business Type 195
17 Principal Employers 196
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 197
19 Operating Indicators by Function 198
20 Capital Asset Statistics by Function 200
21 Cardiff Sanitary Division - Summary of Operational Data 204
21 San Dieguito Water District - Summary of Operational Data 208
Sources: Unless otherwise noted, the information in these schedules was derived from the Comprehensive
Annual Financial Reports for the relevant year.
(Unaudited)
165
City of Encinitas
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2023 2022 2021 2020 2019
Government activities:
Net investment in capital assets 203,180,585$ 196,847,248$ 190,035,875$ 181,288,734$ 172,580,765$
Restricted 47,700,069 20,368,737 19,467,205 23,031,942 20,997,390
Unrestricted (7,360,830) 9,178,250 (1,132,294) 528,847 7,357,189
Total governmental activities net position 243,519,824 226,394,235 208,370,786 204,849,523 200,935,344
Business-type activities:
Net investment in capital assets 46,836,006 43,771,341 42,615,968 38,060,921 38,074,788
Restricted 370,826 376,374 386,507 390,925 411,895
Unrestricted 107,308,983 107,569,412 106,620,721 105,330,676 99,808,547
Total business-type activities net position 154,515,815 151,717,127 149,623,196 143,782,522 138,295,230
Primary government:
Net investment in capital assets 250,016,591 240,618,589 232,651,843 219,349,655 210,655,553
Restricted 48,070,895 20,745,111 19,853,712 23,422,867 21,409,285
Unrestricted 99,948,153 116,747,662 105,488,427 105,859,523 107,165,736
Total primary government net position 398,035,639$ 378,111,362$ 357,993,982$ 348,632,045 339,230,574$
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
Fiscal Years
166
City of Encinitas
Net Position by Component (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2018 2017 2016 2015 2014
Government activities:
Net investment in capital assets 169,553,838$ 165,759,601$ 162,923,350$ 157,304,041$ 161,902,991$
Restricted 19,779,315 19,867,542 30,996,309 18,741,022 17,363,704
Unrestricted 1,963,535 9,510,235 (580,736) 9,229,896 38,446,880
Total governmental activities net position 191,296,688 195,137,378 193,338,923 185,274,959 217,713,575
Business-type activities:
Net investment in capital assets 36,547,324 44,977,544 42,501,264 39,806,764 54,362,661
Restricted 421,938 20,237 1,377,006 - 1,039,739
Unrestricted 95,173,238 79,286,895 75,512,969 75,781,002 62,426,804
Total business-type activities net position 132,142,500 124,284,676 119,391,239 115,587,766 117,829,204
Primary government:
Net investment in capital assets 206,101,162 210,737,145 205,424,614 197,110,805 216,265,652
Restricted 20,201,253 19,887,779 32,373,315 18,741,022 18,403,443
Unrestricted 97,136,773 88,797,130 74,932,233 85,010,898 100,873,684
Total primary government net position 323,439,188$ 319,422,054$ 312,730,162$ 300,862,725$ 335,542,779$
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
Fiscal Years
167
City of Encinitas
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2023 2022 2021 2020 2019
Expenses:
Government activities:
General government 13,761,807$ 12,080,268$ 18,698,862$ 17,335,001$ 15,280,238$
Public safety 42,537,995 36,235,733 37,494,513 35,791,015 33,160,544
Public works 7,682,427 12,280,274 11,444,920 11,859,286 9,166,709
Planning 25,727,636 16,217,737 7,360,378 7,027,696 6,878,364
Engineering services 1,162,517 2,377,490 9,200,037 6,309,896 6,762,441
Parks and recreation 11,574,782 10,249,735 9,247,192 10,079,123 9,809,964
Interest and fiscal charges on long-term debt 1,897,361 1,172,018 1,488,333 1,569,705 1,655,750
Total governmental activities expenses 104,344,525 90,613,255 94,934,235 89,971,722 82,714,010
Business-type activities:
Cardiff Sanitary Division 5,929,362 4,757,564 3,075,590 3,093,405 3,548,203
San Dieguito Water District 16,801,104 18,727,669 17,738,041 16,503,660 16,615,687
Encinitas Sanitary Division 2,920,816 2,691,855 2,751,591 3,271,260 2,044,676
Affordable Housing 1,889,985 1,824,080 1,797,801 1,676,260 1,576,162
Recreation Programs - - - - -
Total business-type activities expenses 27,541,267 28,001,168 25,363,023 24,544,585 23,784,728
Total primary government expenses 131,885,792 118,614,423 120,297,258 114,516,307 106,498,738
Program revenues:
Government activities:
Charges for services:
General government 1,434,649 2,768,770 1,361,790 1,804,550 1,239,815
Public safety 1,792,386 2,277,134 2,292,593 1,521,745 2,075,725
Public works 2,128 16,801 105,811 1,776 57,786
Planning and building 5,856,993 5,137,648 3,434,081 3,417,094 2,936,898
Engineering services 1,129,643 629,385 457,981 970,837 1,782,402
Parks and recreation 1,746,481 1,548,671 759,536 1,029,655 1,310,426
Operating grants and contributions 8,738,606 8,761,294 6,112,721 4,401,599 4,421,588
Capital grants and contributions 8,598,957 5,485,313 6,897,649 6,784,821 6,626,283
Total governmental activities program revenues 29,299,843 26,625,016 21,422,162 19,932,077 20,450,923
Business-type activities:
Charges for services:
Cardiff Sanitary Division 5,040,457 4,623,645 5,048,111 5,046,841 4,937,942
San Dieguito Water District 18,171,433 18,572,609 19,037,114 16,835,266 15,727,590
Encinitas Sanitary Division 2,625,808 2,517,372 2,759,121 2,744,193 2,698,745
Affordable Housing 300,741 337,737 329,678 270,931 260,848
Recreation Programs - - - - -
Operating grants and contributions 1,493,447 1,355,858 1,367,154 1,246,133 1,142,424
Capital grants and contributions 435,158 170,438 550,875 593,179 728,700
Total business-type activities program revenues 28,067,044 27,577,659 29,092,053 26,736,543 25,496,249
Total primary government program revenues 57,366,887 54,202,675 50,514,215 46,668,620 45,947,172
Governmental activities (75,044,682) (63,988,239) (73,512,073) (70,039,645) (62,263,087)
Business-type activities 525,777 (423,509) 3,729,030 2,191,958 1,711,521
Total net revenue (expense)(74,518,905)$ (64,411,748)$ (69,783,043)$ (67,847,687)$ (60,551,566)$
Fiscal Years
168
City of Encinitas
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2018 2017 2016 2015 2014
Expenses:
Government activities:
General government 14,403,144$ 11,737,634$ 11,750,737$ 10,810,882$ 9,549,338$
Public safety 30,762,894 29,437,181 27,255,755 25,762,703 25,146,843
Public works 8,325,467 9,205,570 11,743,123 11,565,315 10,239,746
Planning 8,741,589 6,935,754 7,255,460 6,550,992 5,853,995
Engineering services 7,492,540 8,918,281 4,591,315 6,253,352 3,988,720
Parks and recreation 8,429,448 7,046,255 6,778,769 5,205,986 4,735,864
Interest and fiscal charges on long-term debt 1,755,100 2,237,069 2,494,815 2,311,944 1,913,349
Total governmental activities expenses 79,910,182 75,517,744 71,869,974 68,461,174 61,427,855
Business-type activities:
Cardiff Sanitary Division 3,086,434 3,308,454 3,857,531 4,262,565 2,922,446
San Dieguito Water District 13,800,288 13,970,919 13,462,935 15,005,767 13,552,862
Encinitas Sanitary Division 1,652,061 2,037,116 2,306,540 1,731,770 2,438,692
Affordable Housing 1,464,181 1,449,917 1,440,124 1,408,226 1,405,225
Recreation Programs - - - 1,331,565 1,300,555
Total business-type activities expenses 20,002,964 20,766,406 21,067,130 23,739,893 21,619,780
Total primary government expenses 99,913,146 96,284,150 92,937,104 92,201,067 83,047,635
Program revenues:
Government activities:
Charges for services:
General government 1,815,086 1,675,799 1,594,277 1,629,857 1,800,630
Public safety 1,421,393 1,148,567 1,009,713 160,178 202,220
Public works 394,647 65,746 107,279 759,918 -
Planning and building 3,262,604 2,954,523 2,800,413 2,737,225 2,874,894
Engineering services 1,874,562 1,143,830 1,367,902 1,055,311 1,075,885
Parks and recreation 1,405,704 1,796,918 1,741,619 46,846 35,791
Operating grants and contributions 3,253,127 3,419,730 3,349,186 3,878,422 4,345,931
Capital grants and contributions 4,851,823 4,407,963 5,409,098 4,126,194 8,756,281
Total governmental activities program revenues 18,278,946 16,613,076 17,379,487 14,393,951 19,091,632
Business-type activities:
Charges for services:
Cardiff Sanitary Division 4,885,227 4,788,884 4,761,486 4,528,551 4,605,867
San Dieguito Water District 16,852,732 14,851,977 14,684,387 14,785,858 15,297,718
Encinitas Sanitary Division 2,711,075 2,819,006 2,855,690 2,841,235 2,879,605
Affordable Housing 225,468 213,124 218,148 247,349 216,728
Recreation Programs - - - 1,321,471 1,269,179
Operating grants and contributions 1,093,800 1,099,366 1,068,549 1,061,698 994,607
Capital grants and contributions 560,651 736,370 681,412 483,425 1,066,769
Total business-type activities program revenues 26,328,953 24,508,727 24,269,672 25,269,587 26,330,473
Total primary government program revenues 44,607,899 41,121,803 41,649,159 39,663,538 45,422,105
Governmental activities (61,631,236) (58,904,668) (54,490,487) (54,067,223) (42,336,223)
Business-type activities 6,325,989 3,742,321 3,202,542 1,529,694 4,710,693
Total net revenue (expense)(55,305,247)$ (55,162,347)$ (51,287,945)$ (52,537,529)$ (37,625,530)$
Fiscal Years
169
City of Encinitas
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2023 2022 2021 2020 2019
General Revenues and Other Changes in Net Position:
Governmental activities:
Taxes
Property and documentary transfer taxes 63,470,459$ 57,698,089$ 54,839,785$ 51,251,719$ 49,237,265$
Sales taxes 17,138,284 17,510,658 15,453,648 13,744,880 13,694,647
Transient occupancy taxes 5,962,343 5,528,340 2,823,055 2,383,060 2,775,771
Franchise taxes 2,892,778 3,232,999 2,599,810 2,539,090 2,571,367
Intergovernmental revenues 279,083 184,592 99,985 182,449 185,380
Investment income 1,418,190 (2,535,467) 44,858 3,030,295 2,613,728
Other general revenues 878,385 375,920 1,162,877 804,984 827,490
Gain/(Loss) on sale of assets - - - 36,013 12,739
Impairment loss on capital assets - - - - -
Transfers 52,964 16,557 9,318 (18,666) (16,644)
Total governmental activities 92,092,486 82,011,688 77,033,336 73,953,824 71,901,743
Business-type activities:
Property taxes 1,433,426 1,310,943 1,227,621 1,159,681 1,110,248
Intergovernmental-unrestricted - - - - -
Investment income 441,813 (1,215,101) 89,227 1,716,759 1,393,446
Other general revenues 450,636 917,307 804,114 400,228 1,306,547
Gain/(Loss) on sale of assets - - - - 614,324
Transfers (52,964) (16,557) (9,318) 18,666 16,644
Total business-type activities 2,272,911 996,592 2,111,644 3,295,334 4,441,209
Total primary government 94,365,397 83,008,280 79,144,980 77,249,158 76,342,952
Changes in Net Position
Government activities 17,047,804 18,023,449 3,521,263 3,914,179 9,638,656
Business-type activities 2,798,688 573,083 5,840,674 5,487,292 6,152,730
Total primary government 19,846,492$ 18,596,532$ 9,361,937$ 9,401,471$ 15,791,386$
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
Fiscal Years
170
City of Encinitas
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2018 2017 2016 2015 2014
General Revenues and Other Changes in Net Position:
Governmental activities:
Taxes
Property and documentary transfer taxes 46,311,814$ 43,494,220$ 41,210,485$ 38,508,558$ 36,414,507$
Sales taxes 13,252,053 12,549,609 14,166,771 12,569,119 12,067,360
Transient occupancy taxes 2,562,484 2,216,145 2,018,024 1,828,116 1,570,459
Franchise taxes 2,587,443 2,545,854 2,794,144 2,761,335 2,614,844
Intergovernmental revenues 97,163 251,919 388,876 814,337 479,026
Investment income 958,172 770,634 611,350 880,989 705,849
Other general revenues 452,275 961,475 956,824 1,567,168 1,257,002
Gain/(Loss) on sale of assets 61,400 1,937 8,865 107,177 (48,320)
Impairment loss on capital assets - (2,088,668) - - -
Transfers 20,018 - 399,112 (36,068) (33,545)
Total governmental activities 66,302,822 60,703,125 62,554,451 59,000,731 55,027,182
Business-type activities:
Property taxes 1,030,168 959,873 906,106 834,994 787,242
Intergovernmental-unrestricted - (31,828) - - -
Investment income (446,745) 6,925 (63,690) (60,169) 357,357
Other general revenues 1,247,955 - 153,667 63,768 63,768
Gain/(Loss) on sale of assets 8,285 216,146 4,010 18,085 (187,942)
Transfers (20,018) - (399,112) 36,068 33,545
Total business-type activities 1,819,645 1,151,116 600,981 892,746 1,053,970
Total primary government 68,122,467 61,854,241 63,155,432 59,893,477 56,081,152
Changes in Net Position
Government activities 4,671,586 1,798,457 8,063,964 4,933,508 12,690,959
Business-type activities 8,145,634 4,893,437 3,803,523 2,422,440 5,764,663
Total primary government 12,817,220$ 6,691,894$ 11,867,487$ 7,355,948$ 18,455,622$
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
Fiscal Years
171
City of Encinitas
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2023 2022 2021 2020 2019
General fund:
Nonspendable 310,620$ 288,410$ 737,115$ 287,832$ 266,828$
Restricted 199,164 182,172 172,708 167,265 383
Committed 20,041,586 18,405,040 16,998,291 16,208,039 15,545,889
Assigned - - - - -
Unassigned 14,292,959 10,452,438 9,255,171 10,542,872 8,609,231
Total general fund 34,844,329$ 29,328,060$ 27,163,285$ 27,206,008$ 24,422,331$
All other governmental funds:
Nonspendable - - - - -
Restricted 55,699,150 27,188,042 26,434,867 36,105,367 36,435,142
Committed 18,325,791 20,463,699 19,920,832 18,352,366 24,412,850
Assigned - - - - -
Unassigned (13,905,911) (8,214,740) (7,140,370) (13,240,690) (15,438,135)
Total all other governmental funds 60,119,030 39,437,001 39,215,329 41,217,043 45,409,857
Total all governmental funds 94,963,359$ 68,765,061$ 66,378,614$ 68,423,051$ 69,832,188$
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
Fiscal Years
172
City of Encinitas
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2018 2017 2016 2015 2014
General fund:
Nonspendable 267,203$ 727,094$ 1,109,424$ 1,535,601$ 2,052,250$
Restricted 251 1,472,372 - 3,009,269 4,079
Committed 14,691,792 13,937,399 - 8,266,796 8,136,886
Assigned - - - 561,762 561,762
Unassigned 12,334,212 9,514,727 31,775,120 28,029,019 25,151,131
Total general fund 27,293,458$ 25,651,592$ 32,884,544$ 41,402,447$ 35,906,108$
All other governmental funds:
Nonspendable - 296,234 287,756 - 1,565
Restricted 34,724,312 30,282,525 4,305,652 18,741,022 17,358,060
Committed 17,760,602 18,998,215 1,626,219 - -
Assigned - - 24,776,682 - -
Unassigned (14,945,248) (12,183,589) - - -
Total all other governmental funds 37,539,666 37,393,385 30,996,309 18,741,022 17,359,625
Total all governmental funds 64,833,124$ 63,044,977$ 63,880,853$ 60,143,469$ 53,265,733$
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
Fiscal Years
173
City of Encinitas
Changes in Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2023 2022 2021 2020 2019
Revenues:
Taxes and assessments 90,597,363$ 85,156,290$ 76,821,095$ 71,064,561$ 69,403,416$
Intergovernmental 15,923,576 12,340,536 11,565,263 9,208,454 7,161,806
Charges for services 9,510,414 9,804,091 5,862,696 6,629,818 7,383,043
Fines, forfeitures, and penalties 485,215 382,537 232,873 655,032 794,237
Use of money and property 1,546,001 (1,889,065) 577,180 3,729,566 3,437,985
Other 3,849,543 2,708,860 4,143,952 3,750,230 3,089,553
Total Revenues 121,912,112 108,503,249 99,203,059 95,037,661 91,270,040
Expenditures:
Current:
General government 14,869,944 14,961,747 14,533,052 13,358,381 12,783,602
Public safety 37,411,613 36,292,883 34,613,439 32,928,307 31,494,405
Public works 8,328,589 7,672,548 7,360,360 7,392,741 5,875,143
Planning and building 9,988,881 8,643,165 6,939,408 6,619,723 6,570,840
Engineering services 3,982,827 3,738,327 3,761,366 3,324,903 3,851,316
Parks and recreation 9,331,560 8,262,489 7,237,778 7,959,300 7,954,529
Capital outlay 23,969,329 18,858,484 22,371,020 18,749,583 11,925,637
Debt service:
Principal 2,747,060 2,326,207 2,106,004 2,025,045 1,949,298
Interest and fiscal charges 1,754,858 1,460,868 1,611,171 1,695,251 1,774,333
Bond issuance costs - -
Total expenditures 112,384,661 102,216,718 100,533,598 94,053,234 84,179,103
Excess (deficiency) of revenues
over (under) expenditures 9,527,451 6,286,531 (1,330,539)984,427 7,090,937
Other Financing Sources (Uses):
Transfers in 36,937,361 27,674,126 40,635,381 20,729,350 25,249,787
Transfers out (40,755,724)(31,781,303)(41,349,279)(23,122,914)(27,341,660)
Proceeds from leases - - - - -
Proceeds from sale of property - - - - -
Issuance of lease and SBITAs 489,210
Issuance of debt 20,000,000 9,505,000 - - -
Premium on debt - - - - -
Deposit to escrow for bond refunding - (9,297,907) - - -
Bond discounts - - - - -
Total other financing sources (uses)16,670,847 (3,900,084)(713,898)(2,393,564)(2,091,873)
Net change in fund balances 26,198,298$ 2,386,447$ (2,044,437)$ (1,409,137)$ 4,999,064$
Debt service as a percentage of
noncapital expenditures 4.8%4.2%4.3%4.6%4.8%
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
Fiscal Years
174
City of Encinitas
Changes in Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2018 2017 2016 2015 2014
Revenues:
Taxes and assessments 65,845,166$ 61,934,421$ 61,325,308$ 56,825,628$ 53,830,193$
Intergovernmental 6,966,193 6,436,599 6,689,475 7,022,485 5,025,480
Charges for services 7,280,374 6,688,958 6,585,518 5,315,721 5,479,847
Fines, forfeitures, and penalties 704,216 850,153 889,388 802,936 632,776
Use of money and property 1,126,652 1,285,049 1,222,730 899,807 724,310
Other 2,566,551 2,215,452 2,804,043 2,456,996 3,654,621
Total Revenues 84,489,152 79,410,632 79,516,462 73,323,573 69,347,227
Expenditures:
Current:
General government 12,213,808 10,017,430 9,288,227 9,362,214 9,109,412
Public safety 29,478,104 27,724,959 26,976,136 24,902,920 24,164,979
Public works 5,033,316 6,351,537 6,305,340 6,682,424 6,281,800
Planning and building 6,017,914 5,110,298 5,159,777 5,082,589 4,716,315
Engineering services 3,504,336 4,368,601 4,298,563 4,162,630 3,949,352
Parks and recreation 7,879,881 6,610,308 6,366,337 5,091,224 4,672,683
Capital outlay 12,933,995 12,230,552 10,799,083 18,440,036 14,548,894
Debt service:
Principal 2,128,758 2,853,417 2,783,268 2,730,686 2,661,976
Interest and fiscal charges 1,899,328 2,077,770 2,372,231 2,170,164 1,937,144
Bond issuance costs - - - - -
Total expenditures 81,089,440 77,344,872 74,348,962 78,624,887 72,042,555
Excess (deficiency) of revenues
over (under) expenditures 3,399,712 2,065,760 5,167,500 (5,301,314)(2,695,328)
Other Financing Sources (Uses):
Transfers in 30,412,724 35,159,839 44,550,246 24,514,293 20,570,966
Transfers out (32,024,289)(36,650,845)(45,577,444)(25,509,616)(21,328,768)
Proceeds from leases - - - - -
Proceeds from sale of property - - 15,645,000 13,174,373 -
Issuance of lease
Issuance of debt - 11,955,000 115 - -
Premium on debt - 1,360,284 772,212 - -
Deposit to escrow for bond refunding - (14,725,914) (16,820,243) - -
Bond discounts - - - - -
Total other financing sources (uses)(1,611,565)(2,901,636)(1,430,114)12,179,050 (757,802)
Net change in fund balances 1,788,147$ (835,876)$ 3,737,386$ 6,877,736$ (3,453,130)$
Debt service as a percentage of
noncapital expenditures 5.4%6.9%7.5%7.6%7.8%
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
Fiscal Years
175
City of Encinitas
Assessed 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)
2023 18,048,905$ 1,967,470$ 74,674$ 563,556$ 20,654,604$ 0.23920%
2022 16,667,078 1,784,735 66,004 454,187 18,972,004 0.23879%
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%
(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
$20,000,000
2014 2015 2016 2017 2018 2019 2021 2022 2023
Taxable Assessed Value
(In thousands)
Residential Commercial Industrial
Fiscal Years
176
City of Encinitas
Principal Property Taxpayers
Current Fiscal Year and Nine Years Ago
Taxable % of Total Taxable % of Total
Assessed City Assessed Assessed City Assessed
Secured Value Rank Secure Value Secured Value Rank Secure Value
Encinitas Beach Hotel Venture LLC 127,364,142$ 1 0.62%
T R C Encinitas Village LLC 106,719,334 2 0.52%79,605,220$ 1 0.66%
The Resort At Encinitas LLC 95,982,000 3 0.47%- - -
Collwood Pines Apartments LP 85,997,988 4 0.42%54,963,312 3 0.45%
Belmont Village LP 63,755,206 5 0.31%69,272,280 2 0.57%
Pacifico Encinitas Apartment Homes LP 56,698,045 6 0.28%- - -
Encinitas Town Center Asscs LLC 41,676,884 7 0.20%35,679,927 4 0.29%
N C H C 3 LLC 39,353,949 8 0.19%33,914,047 6 0.28%
Weingarten Nostat INC 38,605,890 9 0.19%33,269,389 7 0.27%
Encinitas Marketplace LLC 34,060,811 10 0.17%- - 0.00%
Home Depot USA INC 33,480,778 11 0.16%30,701,514 9 0.25%
Toll West Coast LLC 32,000,000 12 0.16%- - -
S S L Landlord LLC 27,767,509 13 0.14%34,704,622 5 0.29%
Von's Companies INC 26,302,324 14 0.13%26,527,614 11 0.22%
RAF Pacifica Encinitas LLC 22,547,778 15 0.11%- - -
Quail Pointe Apartment Homes LP 22,516,552 16 0.11%15,025,500 21 0.12%
Scripps Health 21,683,205 17 0.11%17,070,232 20 0.14%
Sterling Family Trust 20,932,184 18 0.10%17,921,209 17 0.15%
Plenc El Camino LLC 20,567,044 19 0.10%17,571,263 18 0.14%
Los Angeles Fitness International LLC 20,556,606 20 0.10%- - -
Cardiff Town Center LLC 20,154,141 21 0.10%- - -
Encinitas Propert Owner LLC 18,500,000 22 0.09%- - -
Keith B. and Sara S. Harrison 18,373,405 23 0.09%22,919,272 13 0.19%
Encinitas Senior Living LP 18,192,129 24 0.09%- - -
Camino Village LLC 17,160,682 25 0.08%- - -
PK III Encinitas Marketplace LP - - 31,500,000 8 0.26%
ASN Encinitas LLC - - 27,610,055 10 0.23%
Urschel Laboratories Inc.- - 23,442,461 12 0.19%
Loja Pacific Station - - 19,951,200 14 0.16%
LA Fitness International LLC - - 18,701,886 15 0.15%
UCSD Garden View LLC - - 18,360,000 16 0.15%
Target Corporation - - 17,344,915 19 0.14%
Encinitas Terraces LLC - - 14,699,582 22 0.12%
Terramar Retail Centers LLC - - 14,675,276 23 0.12%
LF Encinitas Properties LLC - - 14,500,000 24 0.12%
Golden Eagle Annuity Investment LP - - 14,402,736 25 0.12%
1,030,948,586$ 5.04%704,333,512$ 5.80%
Source: HdL Companies
Taxpayer
2023 2014
177
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178
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
2023 64,588,327$ 63,292,068$ 97.99%N/A 63,292,068$ 97.99%
2022 59,893,650 58,710,480 98.02%636,343 59,346,823 99.09%
2021 58,237,793 57,268,432 98.34%733,143 58,001,575 99.59%
2020 55,190,058 54,143,122 98.10%785,003 54,928,125 99.53%
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%
Note: N/A is not a missing figure. There is no information until the next year's collection is completed.
Source: County of San Diego Auditor and Controller: Property Tax Apportionment
Total Collections to Date
Collected within the
Fiscal Year of Levy
179
City of Encinitas
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
2023 2022 2021 2020 2019
%%%%%
City of Encinitas Basic Rate 0.23920 0.23879 0.23867 0.23819 0.23769
City of Encinitas Total Direct Rate (1)0.23920 0.23879 0.23867 0.23819 0.23769
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
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
CWA San Dieguito Water District, OMWD 0.02510 0.02510 0.02510 0.02510 0.02510
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 Water 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
Total Prop 13 Rate (3)1.00000 1.00000 1.00000 1.00000 1.00000
Fiscal Years
(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). With 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.
Notes;
(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.
180
City of Encinitas
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
2018 2017 2016 2015 2014
%%%%%
City of Encinitas Basic Rate 0.23695 0.23644 0.23978 0.24534 0.24002
City of Encinitas Total Direct Rate (1)0.23695 0.23644 0.23978 0.24534 0.24002
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
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
CWA San Dieguito Water District, OMWD 0.02510 0.02510 0.02510 0.02510 0.02510
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 Water 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
Total Prop 13 Rate (3)1.00000 1.00000 1.00000 1.00000 1.00000
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.
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). With 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.
181
City of Encinitas
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
2023 2022 2021 2020 2019
%%%%%
Gen Bond Cardiff 2000A 0.03398 0.03701 0.03701 0.03727 0.03737
Gen Bond Cardiff 2000 Election, 2010 Ref. Bonds - - - - -
MWD D/S Remainder of SDCWA 1501999 0.00350 0.00350 0.00350 0.00350 0.00350
Total Voter Approved Rate 0.03748 0.04051 0.04051 0.04077 0.04087
Total Tax Rate 1.03748 1.04051 1.04051 1.04077 1.04087
Source: HdL Companies; County of San Diego Office of Property Tax Services
Fiscal Years
182
City of Encinitas
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
2018 2017 2016 2015 2014
%%%%%
Gen Bond Cardiff 2000A 0.03028 - - - -
Gen Bond Cardiff 2000 Election,2010 Ref. Bonds - 0.03192 0.03324 0.03554 0.03386
MWD D/S Remainder of SDCWA 1501999 0.00350 0.00350 0.00350 0.00350 0.00350
Total Voter Approved Rate 0.03378 0.03542 0.03674 0.03904 0.03736
Total Tax Rate 1.03378 1.03542 1.03674 1.03904 1.03736
Source: HdL Companies; County of San Diego Office of Property Tax Services
Fiscal Years
183
City of Encinitas
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Fiscal Year
Ended
June 30 Bonded Debt
and Other Debt
Financed Purchases
(2)
Total Governmental
Activities
2023 57,159,987$ 2,510,673$ 59,670,660$
2022 39,510,821 959,836 40,470,657
2021 40,821,453 1,323,184 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
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
Governmental Activities
(2) Due to implementation of GASB Statement No. 87, Leases, in FY 2021-22, lease contracts that
transfer ownership are reported as financed purchases; previously reported as capital leases.
(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.
184
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)
2023 2,044,371$ 10,990,187$ 752,044$ 13,786,602$ 73,457,262$ 1,203
2022 3,413,743 11,262,800 839,230 15,515,773 55,986,430 910
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
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
Business-type Activities
(2) Due to implementation of GASB Statement No. 87, Leases, in FY 2021-22, lease contracts that
transfer ownership are reported as financed purchases; previously reported as capital leases.
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
185
City of Encinitas
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal years
Fiscal Certificates of Participation Percentage
Year Ended and Lease Revenue Bonds Assessed of Assessed Per
June 30 and Other Debt Valuation (1)Value Capita
2023 57,159,987$ (2) 20,654,603,853$ 0.28%936
2022 39,510,821 18,972,004,352 0.21%642
2021 40,821,453 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
(2) Net Bonded Debt for FY 2023 is $ 57,156,787. Using this value the percentage of assessed value and per capita remain
the same as reported above.
Source: Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023
(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 Debt
186
City of Encinitas
Schedule of Direct and Overlapping Bonded Debt
June 30, 2023
FY 2022-23 Assessed Valuation:$20,657,211,510 City's Share of
Total Debt Applicable Overlapping Debt
June 30, 2023 % (1)June 30, 2023
OVERLAPPING TAX AND ASSESSMENT DEBT:
Metropolitan Water District $19,215,000 0.568%109,141$
Mira Costa Community College District 376,155,000 15.381%57,856,401
Cardiff School District 22,688,273 100.000%22,688,273
Encinitas Union School District 42,125,407 69.413%29,240,509
San Dieguito Union High School 416,410,000 25.427%105,880,571
San Dieguito Union High School District Community Facilities Districts 32,860,000 1.657-100.10,640,461
City of Encinitas Community Facilities District No. 1 17,040,000 100.000%17,040,000
Olivenhain Municipal Water District, Assessment District No. 96-1 4,605,000 31.124%1,433,260
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 244,888,616$
DIRECT AND OVERLAPPING GENERAL FUND DEBT
San Diego County General Fund Obligations $229,680,000 3.145%7,223,436$
San Diego County Pension Obligations 277,990,000 3.145%8,742,786
San Diego County Superintendent of Schools Obligations 6,935,000 3.145%218,106
San Dieguito Union High School District General Fund Obligations 12,730,000 25.427%3,236,857
Cardiff School District General Fund Obligations 3,842,000 100.000%3,842,000
59,670,660 100.000%59,670,660
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 82,933,844$
TOTAL DIRECT DEBT 59,670,660$
TOTAL OVERLAPPING DEBT 268,151,801$
COMBINED TOTAL DEBT 327,822,461$ (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 lease obligations.
Ratios to FY 2022-23 Assessed Valuation:
Total Overlapping Tax and Assessment Debt..…………………………….1.19%
Total Direct Debt ($ 59,670,660).……...……..….……………………….…0.29%
Combined Total Debt…...…….………….….….…….………....…………….1.59%
Source: County of San Diego Assessor
City of Encinitas General Fund Obligations
187
City of Encinitas
Legal Debt Margin Information
Last Ten Fiscal years
(In thousands)
2023 2022 2021 2020 2019
Assessed valuation 20,654,604$ 18,972,004$ 18,082,574$ 17,159,943$ 16,372,917$
Conversion percentage equal 25%25%25%25%25%
to 25% of assessed valuation
Adjusted assessed valuation 5,163,651 4,743,001 4,520,644 4,289,986 4,093,229
Debt limit percentage 15%15%15%15%15%
Debt limit 774,548 711,450 678,097 643,498 613,984
Total net debt applicable to limit:37,160 39,511 40,821 42,898 44,899
Legal debt margin 737,388$ 671,939$ 637,276$ 600,600$ 569,085$
Total debt applicable to the limit
as a percentage of debt limit 4.80%5.55%6.02%6.67%7.31%
Notes: Details regarding the City's outstanding debt can be found in the Notes to the Financial
Statements section.
Source: HdL Companies
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.
Fiscal Years
188
City of Encinitas
Legal Debt Margin Information (Continued)
Last Ten Fiscal years
(In thousands)
2018 2017 2016 2015 2014
Assessed valuation 15,366,779$ 14,472,213$ 13,702,972$ 12,870,004$ 12,147,361$
Conversion percentage equal 25%25%25%25%25%
to 25% of assessed valuation
Adjusted assessed valuation 3,841,695 3,618,053 3,425,743 3,217,501 3,036,840
Debt limit percentage 15%15%15%15%15%
Debt limit 576,254 542,708 513,861 482,625 455,526
Total net debt applicable to limit:46,831 48,954 52,934 55,432 44,547
Legal debt margin 529,423$ 493,754$ 460,927$ 427,193$ 410,979$
Total debt applicable to the limit
as a percentage of debt limit 8.13%9.02%10.30%11.49%9.78%
Notes: Details regarding the City's outstanding debt can be found in the Notes to the Financial
Statements section.
Source: HdL Companies
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.
Fiscal Years
189
City of Encinitas
Historical Debt Service Coverage
Last Ten Fiscal years
2023 2022 2021 2020 2019
Revenues:
Operating revenues - including connection fees 18,465,466$ 18,680,901$ 19,255,799$ 17,121,649$ 15,961,300$
Non-operating revenues 1,867,809 1,433,512 1,764,599 1,902,231 2,307,498
Gross Revenues 20,333,275 20,114,413 21,020,398 19,023,880 18,268,798 -
Total Operating & Non-Operating Expenses 16,801,105 18,742,622 16,142,824 16,429,284 16,541,314
Net Income 3,532,170 1,371,791 4,877,574 2,594,596 1,727,484
Add:
Interest expense 96,428 148,990 198,800 247,063 292,354
Depreciation and amortization expense 1,712,624 2,202,665 (537,982) 1,830,492 2,208,775
Net Revenues Available for Debt Service 5,341,222 3,723,446 4,538,392 4,672,151 4,228,613
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 66,044 89,397 111,466 133,619 152,919
2007 Note Payable to Financing Authority - Principal Payments 570,000 545,000 525,000 490,000 475,000
2014 Water Revenue Refunding Bonds - Interest Charges 44,700 73,100 100,300 126,500 148,775
2014 Water Revenue Refunding Bonds - Principal Payments 725,000 695,000 665,000 645,000 625,000
Total Debt Service 1,405,744$ 1,402,497$ 1,401,766$ 1,395,119$ 1,401,694$
Coverage by Net Revenues Available for Debt Service 380%265%324%335%302%
2023 2022 2021 2020 2019
Revenues:
Operating revenues - including connection fees (1)5,052,417$ 4,655,765$ 5,191,624$ 5,335,578$ 5,013,316$
Non-operating revenues 80,138 - 128,759 581,284 496,059
Gross Revenues 5,132,555 4,655,765 5,320,383 5,916,862 5,509,375
Total Operating & Non-Operating Expenses 4,560,023 4,527,786 3,918,544 3,797,174 3,548,203
Net Income 572,532 127,979 1,401,839 2,119,688 1,961,172
Add:
Interest expense 428,839 435,813 443,753 451,938 472,324
Depreciation and amortization expense 600,944 576,187 454,813 443,689 389,390
Net Revenues Available for Debt Service 1,602,315 1,139,979 2,300,405 3,015,315 2,822,886
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
2011 Note Payable to SEJPA - Principal Payments - - 60,000 57,500 663,846
2017 Note Payable to SEJPA-Interest Charges 431,213 438,113 444,863 451,388 451,388
2017 Note Payable to SEJPA-Principal Payments 237,500 230,000 225,000 217,500 -
Total Debt Service 668,713$ 668,113$ 731,573$ 729,622$ 1,145,021$
Coverage by Net Revenues Available for Debt Service 240%171%314%413%247%
Debt service coverage requirement is a minimum 110 percent of net revenue including connection fees.
The above schedules include connection fees in operating revenues.
Source: City of Encinitas Finance Department
Cardiff Sanitary Division
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
190
City of Encinitas
Historical Debt Service Coverage (Continued)
Last Ten Fiscal years
2018 2017 2016 2015 2014
Revenues:
Operating revenues - including connection fees 17,219,494$ 15,142,544$ 14,852,061$ 15,152,433$ 15,715,575$
Non-operating revenues 1,092,337 1,048,764 1,013,297 927,526 827,676
Gross Revenues 18,311,831 16,191,308 15,865,358 16,079,959 16,543,251
Total Operating & Non-Operating Expenses 15,198,929 14,263,288 13,800,671 15,481,543 14,066,485
Net Income 3,112,902 1,928,020 2,064,687 598,416 2,476,766
Add:
Interest expense 328,050 366,740 412,108 475,775 622,075
Depreciation and amortization expense 1,848,913 978,627 1,514,716 2,271,907 1,490,806
Net Revenues Available for Debt Service 5,289,865 3,273,387 3,991,511 3,346,098 4,589,647
Less: Debt Service Paid
2004 Water Revenue Refunding Bonds - Interest Charges - - - 144,720 380,731
2004 Water Revenue Refunding Bonds - Principal Payments - - - 665,000 640,000
2007 Note Payable to Financing Authority - Interest Charges 171,619 191,244 211,144 224,994 241,344
2007 Note Payable to Financing Authority - Principal Payments 455,000 440,000 415,000 405,000 385,000
2014 Water Revenue Refunding Bonds - Interest Charges 167,225 185,075 202,400 106,061 -
2014 Water Revenue Refunding Bonds - Principal Payments 605,000 585,000 570,000 - -
Total Debt Service 1,398,844$ 1,401,319$ 1,398,544$ 1,545,775$ 1,647,075$
Coverage by Net Revenues Available for Debt Service 378%234%285%216%279%
2018 2017 2016 2015 2014
Revenues:
Operating revenues - including connection fees (1)5,081,021$ 5,006,574$ 4,862,274$ 4,615,399$ 4,758,606$
Non-operating revenues 162,951 140,095 149,151 120,668 1,216,941
Gross Revenues 5,243,972 5,146,669 5,011,425 4,736,067 5,975,547
Total Operating & Non-Operating Expenses 3,578,417 3,380,180 3,949,288 4,371,847 3,189,268
Net Income 1,665,555 1,766,489 1,062,137 364,220 2,786,279
Add:
Interest expense 491,983 71,727 91,757 109,282 266,822
Depreciation and amortization expense 386,019 754,400 1,303,272 1,555,955 200,459
Net Revenues Available for Debt Service 2,543,557 2,592,616 2,457,166 2,029,457 3,253,560
Less: Debt Service
2003 Note Payable to SEJPA - Interest Charges - - - - -
2003 Note Payable to SEJPA - Principal Payments - - - - -
2011 Note Payable to SEJPA - Interest Charges 55,402 79,889 91,757 109,282 131,967
2011 Note Payable to SEJPA - Principal Payments 640,352 612,192 593,530 579,366 563,037
2017 Note Payable to SEJPA-Interest Charges 294,656 - - - -
2017 Note Payable to SEJPA-Principal Payments - - - - -
Total Debt Service 990,410$ 692,081$ 685,287$ 688,648$ 695,004$
Coverage by Net Revenues Available for Debt Service 257%375%359%295%468%
Debt service coverage requirement is a minimum 110 percent of net revenue including connection fees.
The above schedules include connection fees in operating revenues.
Source: City of Encinitas Finance Department
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
191
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
2023 61,085 2.2%(0.7%)42.7 2.60 3.3%
2022 61,515 2.2%(1.24%)43.0 2.62 4.8%
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%
Note: City population figures have been revised to match updated population from the California State
Department of Finance as of January 1, 2023.
Sources: California Department of Finance; US Census Bureau QuickFacts; Employment Development Department
192
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193
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
2023 62,792,706$ 17,138,284$ 6,019,200$ 3,513,674$ 89,463,864$
2022 57,668,544 17,510,658 5,557,884 3,232,999 83,970,085
2021 54,839,785 15,453,648 2,823,055 2,599,810 75,716,298
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
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
$70,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total General Governmental Tax Revenues
Property Tax
Sales Tax
Transient Occupancy Tax
Franchise Tax
Fiscal Years
194
City of Encinitas
Taxable Sales by Business Type
Last Ten Fiscal Years
2023 2022 2021 2020 2019
Autos and Transportation 2,262,471$ 2,415,492$ 2,129,102$ 1,703,500$ 1,806,753$
Building and Construction 905,295 1,231,281 1,115,852 959,367 1,133,022
Business and Industry 519,058 733,928 545,444 730,647 629,112
Food and Drugs 990,035 1,177,803 1,236,743 1,109,984 1,110,862
Fuel and Service Stations 1,148,609 1,776,681 1,112,245 1,099,387 1,630,124
General Consumer Goods 2,793,903 3,999,149 3,882,876 3,181,523 3,812,472
Restaurants and Hotels 2,303,750 2,928,890 2,248,344 2,140,574 2,560,108
Total 10,923,121$ 14,263,224$ 12,270,606$ 10,924,982$ 12,682,453$
2018 2017 2016 2015 2014
Autos and Transportation 1,744,199$ 1,627,531$ 1,684,618$ 1,638,839$ 1,519,006$
Building and Construction 924,933 1,021,600 980,140 944,334 887,182
Business and Industry 567,665 623,641 738,490 556,835 573,032
Food and Drugs 1,010,551 931,650 1,005,870 1,028,085 1,001,942
Fuel and Service Stations 1,025,386 1,191,164 1,382,946 1,500,416 1,559,342
General Consumer Goods 3,400,696 3,492,330 3,535,734 3,476,481 3,355,540
Restaurants and Hotels 2,274,664 2,264,487 2,113,116 1,978,072 1,825,971
Total 10,948,094$ 11,152,403$ 11,440,914$ 11,123,062$ 10,722,015$
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.
195
City of Encinitas
Principal Employers
Current Fiscal Year and Nine Years Ago
% of Total City % of Total City
Employer Employees Rank Employment Employees Rank Employment
Scripps Memorial Hospital 1,017 1 2.99%650 1 2.21%
Chuze Fitness 700 2 2.06%
Walmart Supercenter 335 3 0.99%350 2 1.19%
Target 250 4 0.74%250 4 0.85%
Encinitas City Hall 243 5 0.72%200 8 0.68%
San Diego Hebrew Homes 220 6 0.65%220 7 0.75%
Seacrest Village Retire Community 200 7 0.59%200 8 0.68%
Magdalena Ecke Family YMCA 200 7 0.59%300 3 1.02%
Encinitas Union School District 200 7 0.59%
Aviara Healthcare Center 150 10 0.44%- --
Home Depot 150 10 0.44%250 4 0.85%
Encinitas Ranch Golf Course 150 10 0.44%- --
Rancho Santa Fe Security 150 10 0.44%- --
North Coastal Sheriff Dept 150 10 0.44%- --
Scripps Rehabilitation Svc - -- 250 4 0.85%
California Bank & Trust - -- 200 8 0.68%
Subtotal Employees 4,115 12.11%2,870 9.74%
Total Employees 33,986 29,458
Note: Total Employees number is historical data from zip codes 92007, 92023 and 92024.
Source: Data Axle & City of Encinitas Human Resources Department
2023 2014
196
City of Encinitas
Full-Time and Part-Time Employees by Function
Last Ten Fiscal Years
Function 2023 2022 2021 2020 2019
General government 48.65 52.05 50.05 50.05 49.55
Public safety 71.00 70.00 70.00 70.00 69.00
Public works 36.00 35.00 34.00 34.00 34.00
Engineering services*- - - - -
Parks and recreation 21.50 21.50 21.25 21.25 21.25
Planning and building*- - - - -
Development services* 62.00 52.50 48.00 48.00 48.00
Subtotal 239.15 231.05 223.30 223.30 221.80
San Dieguito Water District 25.00 24.00 24.00 24.00 24.00
Function 2018 2017 2016 2015 2014
General government 44.60 46.75 46.75 46.75 44.75
Public safety 69.00 69.00 69.00 66.00 66.00
Public works 27.55 28.55 28.55 28.55 29.55
Engineering services*- 27.17 27.17 27.17 27.17
Parks and recreation 22.25 20.18 20.18 20.18 21.18
Planning and building*- 27.25 27.25 27.25 27.25
Development services*53.00 - - - -
Subtotal 216.40 218.90 218.90 215.90 215.90
San Dieguito Water District 24.00 24.00 24.00 24.00 23.00
*Engineering and Planning/Building merged into Development Services during FY 2017-18.
Source: City of Encinitas Human Resources Department
Fiscal Years
Fiscal Years
197
City of Encinitas
Operating Indicators by Function
Last Ten Fiscal years
2023 2022 2021 2020 2019
San Diego County Sheriff's Department
Criminal arrests 1,102 949 1,006 1,061 1,161
Traffic arrests*158 381 226 202 355
Traffic accidents 279 299 286 221 281
Traffic citations 8,659 8,778 3,399 7,009 9,635
Calls for service 18,386 19,826 20,221 19,406 19,190
Deputy initiated action 16,822 17,104 16,138 21,106 25,725
Fire:
Number of emergency fire calls 457 673 299 476 934
Number of EMS/rescue 5,659 5,120 4,492 4,031 6,270
Other 1,573 566 850 1,532 1,711
Inspections 2,650 2,224 1,004 1,532 2,198
Engineering:
Number of permits issued 463 497 430 360 399
Parks and recreation:
Number of recreation class registrations 9,322 6,322 4,247 10,310 17,812
Number of facility rentals 187 168 38 491 550
Planning and building:
Number of planning permits issued 197 210 183 242 194
Number of new dwelling units issued 41 41 69 76 71
Environmental review - - - 4 6
Appeals 7 10 5 7 5
Plan checks 2,329 2,575 2,815 2,464 2,409
Code enforcement complaints 985 863 1,239 1,341 1,090
Water:
New connections 140 38 (48) 225 114
Average daily consumption (millions of gallons)4.44 4.99 5.21 4.71 4.82
Sewer:
New connections 2 5 43 16 14
Average daily sewage treatment (millions of gallons)1.28 1.15 1.22 1.26 1.21
The City of Encinitas contracts with the County of San Diego Sheriff's Department to provide law enforcement services.
* Before FY23, the numbers were pulled a different way. The number of traffic arrests can involve traffic offenses and
number of DUI related arrests. Since 2023, this number will only present as DUI related arrests.
Source: City of Encinitas Fire, Parks, Recreation and Cultural Arts, Development Services, and San Dieguito Water District
198
City of Encinitas
Operating Indicators by Function (Continued)
Last Ten Fiscal years
2018 2017 2016 2015 2014
San Diego County Sheriff's Department
Criminal arrests 1,130 1,612 1,997 1,743 1,595
Traffic arrests 213 201 263 551 331
Traffic accidents 307 289 274 297 323
Traffic citations 5,501 4,891 14,873 13,650 10,357
Calls for service 20,019 19,372 22,518 21,335 19,394
Deputy initiated action 22,612 24,625 27,481 27,339 29,849
Fire:
Number of emergency fire calls 532 283 328 300 383
Number of EMS/rescue 4,775 4,717 4,098 3,844 3,806
Other 2,382 1,035 1,517 1,265 1,458
Inspections 3,145 2,122 2,133 2,072 2,143
Engineering:
Number of permits issued 424 440 436 383 351
Parks and recreation:
Number of recreation class registrations 15,444 16,338 15,500 16,289 16,236
Number of facility rentals 537 492 538 557 578
Planning and building:
Number of planning permits issued 222 276 263 335 298
Number of new dwelling units issued 160 94 117 135 161
Environmental review 3 7 4 10 9
Appeals 6 6 11 6 7
Plan checks 2,147 1,807 2,339 1,737 1,391
Code enforcement complaints 878 1,282 1,199 1,063 1,153
Water:
New connections 50 39 77 69 131
Average daily consumption (millions of gallons)5.21 4.85 4.56 5.49 5.71
Sewer:
New connections 62 65 33 53 22
Average daily sewage treatment (millions of gallons)2.20 2.27 2.20 2.22 2.36
The City of Encinitas contracts with the County of San Diego Sheriff's Department to provide law enforcement services.
* Before FY23, the numbers were pulled a different way. The number of traffic arrests can involve traffic offenses and
number of DUI related arrests. Since 2023, this number will only present as DUI related arrests.
Source: City of Encinitas Fire, Parks, Recreation and Cultural Arts, Development Services, and San Dieguito Water District
199
City of Encinitas
Capital Asset Statistics by Function
Last Ten Fiscal Years
2023 2022 2021 2020 2019
Law enforcement: *
Number of sub-stations 1 1 1 1 1
Fire department:
Fire stations 6 6 6 7 7
Public works:
Streets (miles) **172 172 172 168 168
Engineering:
Signalized intersections 62 60 59 63 63
Parks and recreation:
Community and senior center 1 1 1 1 1
Developed parks 20 20 19 18 18
Undeveloped parks 2 2 3 4 4
Parkland acres 328 328 328 325 325
Habitat/open space acreage 90 90 90 90 90
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 9
Water:
Water mains (miles)168 168 168 174 174
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.
200
City of Encinitas
Capital Asset Statistics by Function (Continued)
Last Ten Fiscal Years
2018 2017 2016 2015 2014
Law enforcement: *
Number of sub-stations 1 1 1 1 1
Fire department:
Fire stations 6 6 6 6 6
Public works:
Streets (miles) **168 201 201 201 201
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 9 7 7 7 7
Water:
Water mains (miles)175 170 168 168 168
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.
201
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202
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.
203
Table 1
Cardiff Sanitary Division
Rate Schedule for Annual Service Charges
As of June 30, 2023
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 $35,400.30
Bakery (wholesale)/Food Processor BW 11.31 --
Supermarket SM 11.31 1,030 11,649.30
Mortuary MT 11.31 300 3,393.00
Restaurant R 11.31 600 6,786.00
(1) Sewer rates are based on water consumption (fixed charge based on meter size and consumption component).
The consumption is based on HCF (hundred cubic feet - 748 gallons).
Non-Residential (Commercial) = Water Consumption For Meter Readings Occurring Between July-June of Preceding Year
Residential = 2 Lowest Periods of Water Consumption For Meter Readings Occurring Between Dec.-May (most recent available 5-year period)
New Connections (no prior water consumption
history)
New Connections (no prior water consumption
history)
Multi Family/Trailer Park* and Non-Residential Fixed Meter Charge
Water Consumption Periods To Be Used
204
Table 2
Cardiff Sanitary Division
Historical Service Charges Billed
Last Ten Fiscal Years
Fiscal Year
Residential
(Tax Roll)
Commercial
(Tax Roll)
Commercial
(Manual) Total Billed
Single
Family
Average
2023 4,183,531$ 562,072$ 128,444$ 4,874,048$ 654
2022 3,743,734 527,843 128,444 4,400,021 608
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
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.
205
Table 3
Cardiff Sanitary Division
Ten Largest Customers
Fiscal Year 2022-23
Parcel Sewer Service Percentage of
Property Owner Count Charges Sewer Charges
Collwood Pines Apartments LP 3 87,823$ 1.82%
944 Regal Road LLC 1 84,904 1.75%
Cardiff Town Center LLC 1 48,525 1.00%
K&K Lumber Co.2 37,219 0.77%
Belmont Village LLC 1 36,730 0.76%
Georges Restaurant Inc.1 28,564 0.59%
West Village Inc.1 23,833 0.49%
Cardiff Investment Properties LLC 1 22,994 0.48%
P C G Plus LLC 1 22,588 0.47%
Newport Taft, Inc.1 22,331 0.46%
Subtotal 13 415,510 8.59%
Total Billed 4,838,173$
Source: Cardiff Sanitary Division
Commercial
Total Connections Residential Industrial Total
Year (Billed Parcels)EDU's EDU's EDU's
2023 6,559 7,313 1,207 8,520
2022 6,533 7,306 1,207 8,513
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
Source: Cardiff Sanitary Division
Last Ten Fiscal Years
Cardiff Sanitary Division
Historical Service Connections
Table 4
206
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.
207
Customer Class Residential Rate Tier Potable Recycled
Single-family residential 0-12 units 3.46$ -$
13-20 units 6.21 -
21-40 units 7.01 -
41+ units 8.33 -
Multi-family residential (per dwelling) 0-8 units 3.46 -
9-12 units 6.21 -
13-16 units 7.01 -
17+ units 8.33 -
Agriculture Uniform 5.95 5.71
Commercial Uniform 5.95 5.71
Government Uniform 6.56 5.71
Public Uniform 6.56 5.71
Landscaping Uniform 6.88 5.71
Construction Uniform 7.02 5.71
(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, 2023
Water Meter Service Infrastructure Fire Meter Service
Availability Access Availability
Meter Size Charge Charge Charge
5/8" & 3/4"49.56$ 8.48$ 10.40$
1"73.30 13.56 10.40
1-1/2"132.13 25.44 9.26
2"203.01 44.10 16.06
3"368.52 81.40 40.44
4"604.91 139.08 82.48
6"1,195.35 254.40 233.38
8"1,904.16 440.96 493.66
Source: San Dieguito Water District
As of June 30, 2023
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
208
Meter
Fiscal Potable Percentage Availability Percent
Year Water Sales Change (3)Charge Change (3)
2023 11,264,426$ 7.3%4,271,543$ (1.4%)
2022 10,494,914 (17.2%)4,331,404 (0.5%)
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%
(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
2023 869,275$ (0.9%)114,744$ 7.1%
2022 876,925 4.4%107,132 3.0%
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
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
209
Fiscal Local Imported Total Recycled Total
Year Water Water Potable Water Production
2023 1,115 4,246 5,361 623 5,985
2022 1,598 4,191 5,790 710 6,500
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
Fiscal Percent Percent
Year Potable Change Recycled Change
2023 4,985 (10.8%)623 (12.3%)
2022 5,590 (4.1%)710 1.0%
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%
distribution system and/or water pumped or used through the fire distribution system.
Source: San Dieguito Water District
San Dieguito Water District
(5) Potable water production is defined as water either produced locally or purchased from
imported sources.
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
210
Acre-Feet Percent of
Customer Description Sold Water Sold
Agriculture 109.93 2.2%
Commercial 528.30 10.6%
Construction 21.56 0.4%
Government 41.52 0.8%
Landscaping 307.28 6.2%
Multi-Family Residential 1,043.38 20.9%
Public 104.69 2.1%
Single-Family Residential 2,828.70 56.7%
Total Sales 4,985.36 100.0%
Source: San Dieguito Water District
Fiscal Percent Percent
Years Potable Increase Recycled Increase
2023 12,305 1.2%102 1.0%
2022 12,165 0.3%101 0.0%
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%
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, 2023
Table 8
San Dieguito Water District
211
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212
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