2020-CAFRCity of Encinitas
Encinitas, California
Comprehensive Annual Financial Report
and Independent Auditor’s Reports
For the Year Ended June 30, 2020
Supported by the Finance Department
Teresa S. McBroome Director of Finance/City Treasurer
Tom Gallup Assistant Director of Finance
Tanya Allsup Finance Manager - Operating
Stella Huang Finance Manager - Reporting
Alexis Angelini Finance Analyst
Monica Attili Finance Analyst
Glenna McShane Finance Analyst
Jessica Huynh Accountant
Katie Schroeder Accountant
Alyce Gonzalez Finance Technician
Annamae Lagdaan Finance Technician
Julie Pickard Finance Technician
Jules Ramos Finance Technician
Chase Belanio Contractor
Delaney Burke Contractor
INTRODUCTORY SECTION
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City of Encinitas
Comprehensive Annual Financial Report
For the Year Ended June 30, 2020
Table of Contents
Page
INTRODUCTORY SECTION (Unaudited)
Table of Contents
Transmittal Letter .......................................................................................................................................... i
List of City Officials ..................................................................................................................................... xii
Organization Chart ..................................................................................................................................... xiii
Certificate of Achievement for Excellence in Financial Reporting – GFOA ................................................ xiv
FINANCIAL SECTION
Independent Auditor’s Report on Financial Statements ......................................................................... 1
Management’s Discussion and Analysis (Required Supplementary Information – Unaudited) ........... 5
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position .............................................................................................................. 25
Statement of Activities and Changes in Net Position ...................................................................... 26
Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet ......................................................................................................................... 33
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position ............................................................... 34
Statement of Revenues, Expenditures, and Changes in Fund Balances .................................. 35
Reconciliation of the Governmental Statement of Revenues,
Expenditures, and Changes in Fund Balances to the Government-wide
Statement of Activities and Changes in Net Position ............................................................. 36
Proprietary Fund Financial Statements:
Statement of Net Position ........................................................................................................ 38
Statement of Revenues, Expenses, and Changes in Net Position ........................................... 40
Statement of Cash Flows ......................................................................................................... 42
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position ......................................................................................... 49
Notes to the Basic Financial Statements ......................................................................................... 53
City of Encinitas
Comprehensive Annual Financial Report
For the Year Ended June 30, 2020
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued):
Required Supplementary Information (Unaudited):
Budgetary Information ........................................................................................................................ 113
Budgetary Comparison Schedule:
General Fund ................................................................................................................................ 114
Infrastructure Improvements Special Revenue Fund .................................................................... 116
Schedule of Changes in the Net Pension Liability and Related Ratios ................................................ 118
Schedule of the City’s Proportionate Share of the Net Pension Liability .............................................. 120
Schedule of Contributions - Pension ................................................................................................... 124
Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................... 130
Schedule of Contributions - OPEB ...................................................................................................... 132
Supplementary Information:
Non-Major Governmental Funds:
Combining Balance Sheet ............................................................................................................ 138
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ...................... 140
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Grants and Housing Special Revenue Fund ........................................................................... 142
Development Impact Special Revenue Fund .......................................................................... 143
Lighting and Landscaping Special Revenue Fund ................................................................... 144
Internal Service Funds:
Combining Statement of Net Position ........................................................................................... 146
Combining Statement of Revenues, Expenses, and Changes in Net Position .............................. 147
Combining Statement of Cash Flows ............................................................................................ 148
Fiduciary Funds:
Statement of Changes in Assets and Liabilities – Agency Funds. ................................................. 151
STATISTICAL SECTION (Unaudited)
Index ........................................................................................................................................................ 153
Financial Trends:
Net Position by Components – Last Ten Fiscal Years ........................................................................ 154
Changes in Net Position – Last Ten Fiscal Years ............................................................................... 156
Fund Balances of Governmental Funds – Last Ten Fiscal Years ........................................................ 160
Changes in Fund Balances of Governmental Fund – Last Ten Fiscal Years ....................................... 162
Revenue Capacity:
Assessed Value of Taxable Property – Last Ten Fiscal Years ............................................................ 164
Principal Property Taxpayers – Current year and Nine Years Ago ...................................................... 165
Property Tax Levies and Collections – Last Ten Fiscal Years............................................................. 166
Direct and Overlapping Property Tax Ratios – Last Ten Fiscal Years ................................................. 168
City of Encinitas
Comprehensive Annual Financial Report
For the Year Ended June 30, 2020
Table of Contents (Continued)
Page
STATISTICAL SECTION (Continued):
Debt Capacity:
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ............................................................. 172
Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years ................................................ 174
Schedule of Direct and Overlapping Bonded Debt .............................................................................. 175
Legal Debt Margin Information – Last Ten Fiscal Years ...................................................................... 176
Historical Debt Service Coverage – Last Ten Fiscal Years ................................................................. 178
Demographic and Economic Information:
Demographic and Economic Statistics – Last Ten Fiscal Years .......................................................... 180
General Governmental Tax Revenue by Source................................................................................. 181
Taxable Sales by Business Type – Last Ten Fiscal Years .................................................................. 182
Principal Employers – Current Fiscal Year and Nine Years Ago ......................................................... 183
Operating Information:
Full-Time and Part-Time Employees by Function – Last Ten Fiscal Years ......................................... 184
Operating Indicators by Function – Last Ten Fiscal Years .................................................................. 186
Capital Asset Statistics by Function – Last Ten Fiscal Years .............................................................. 188
Cardiff Sanitary Division:
Rate Schedule for Annual Sewer Charges.......................................................................................... 192
Historical Service Charges Billed ........................................................................................................ 193
Ten Largest Customers ...................................................................................................................... 194
Historical Service Connections ........................................................................................................... 194
San Dieguito Water District:
Schedule of Water Rates .................................................................................................................... 196
Bi-Monthly Meter Service Availability Charges .................................................................................... 196
Historic Potable Water System Revenues – Last Ten Fiscal Years .................................................... 197
Historic Recycled Water System Revenues – Last Ten Fiscal Years .................................................. 197
Summary of Water Production by Source – Last Ten Fiscal Years ..................................................... 198
Summary of Water Deliveries by Source – Last Ten Fiscal Years ...................................................... 198
Sales by Customer Class ................................................................................................................... 199
Total Service Connections by Category – Last Ten Fiscal Years ........................................................ 199
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TRANSMITTAL LETTER • INTRODUCTORY SECTION
i
November 23, 2020
Honorable Mayor, City Council and Citizens of the City of Encinitas, California:
It is a pleasure to present the Fiscal Year 2019-20 Comprehensive Annual Financial Report (CAFR)
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,
2020 and includes financial information for the City of Encinitas, the San Dieguito Water District,
the Encinitas Housing Authority, and the Encinitas Public Financing Authority. These financial
statements have been prepared in accordance with generally accepted accounting principles (GAAP)
and audited in accordance with generally accepted auditing standards. Responsibility for the accuracy
of the data, the completeness and reliability of the presentation, including all disclosures, rests with
City management.
To provide a reasonable basis for making the presentations shown in this report and to compile
sufficient reliable information for the preparation of the City’s financial statements, the management
of the City has established a comprehensive internal control framework designed to protect the City’s
assets from loss, theft, or misuse. Because the cost of internal controls should not exceed their
benefits, the City’s internal controls have been designed to provide reasonable rather than absolute
assurance that the financial statements will be free from material misstatements.
The City’s financial statements have been audited by Davis Farr LLP, certified public accountants.
The independent auditor concluded based on the audit, that there was reasonable basis for rendering
an unmodified opinion (or a “clean audit”) on the City’s financial statements for the fiscal year ended
June 30, 2020 which means that in the auditor’s opinion, the financial statements accurately present
the City’s financial position.
Management’s Discussion & Analysis (MD&A) immediately follows the independent auditor’s
report and provides a narrative introduction, overview, and analysis of the basic financial statements.
The MD&A complements this letter of transmittal and should be read in conjunction with it.
CITY PROFILE AND BACKGROUND
The City of Encinitas was incorporated in October 1986 as a general law city, bringing together the
communities of New and Old Encinitas, Cardiff-by-the-Sea, Leucadia, and Olivenhain. Encinitas is
located in northern San Diego County approximately 25 miles north of downtown San Diego on the
Southern California coast. The City with an estimated population of 62,000 covers approximately 21
square miles and is predominately residential with two major commercial corridors.
TRANSMITTAL LETTER • INTRODUCTORY SECTION
ii
GOVERNANCE
The City is governed by a City Council consisting of a Mayor and four Council members under the
Council-Manager form of government. The Mayor is elected at-large for a two-year term of office.
The City of Encinitas has transitioned to a system where City Council members are elected by district
instead of serving "at large" with the sequence of elections for district elections in Council Districts
3 and 4 in 2018, and district elections in Council Districts 1 and 2 in 2020. The transition to district-
based elections will be complete in 2020. In the general municipal election held on November 3,
2020, the Mayor was elected for a full two-year term of office and Council Members were elected by
district for a full four-year term of office for Districts 1 and 2.
The City Council appoints the City Manager and City Attorney. All other staff positions are appointed
by the City Manager or her designee. The City Council acts as the Board of Directors for the San
Dieguito Water District, the Encinitas Housing Authority, and the Encinitas Public Financing
Authority.
MUNICIPAL SERVICES
The City provides a full range of municipal services such as:
Fire and paramedic services Law enforcement (contract)
Marine safety Parks, beaches and trails
Development services Recreation services
Street maintenance and construction Traffic control
Wastewater services Water services
CITY FACILITIES
City Hall is located on Vulcan Avenue between D and E Streets, adjacent to the Encinitas Train
Station and downtown. The City maintains an active Community and Senior Center located at
Encinitas Boulevard and Balour Drive; the 44-acre Encinitas Community Park located at 425 Santa
Fe Drive along with 20 other park sites. The City’s Moonlight Beach located at 400 B Street attracts
an estimated three million visitors annually. There are six fire stations located throughout the city as
well as one sheriff substation which is owned and operated by the County of San Diego. The corporate
yard for both the City of Encinitas and San Dieguito Water District is located on Calle Magdalena
near Encinitas Boulevard. The Wastewater Collections division is located at the San Elijo Water
Reclamation Facility located in Cardiff.
BUDGETING OVERVIEW
The City develops and adopts both an operating and a capital budget on a two-year budget cycle.
Amounts are appropriated for the first year only, with the amounts for the second year subject to
revision before appropriation. Any changes to the operating or capital budgets must be approved by
the City Council. The City also publishes a six-year capital improvement program and financial plan
which is updated as part of the two-year budget cycle. This document provides management and the
City Council with long-term financial planning information and tools. Online access to detailed City
financial information is available on the City’s website. This web-based tool allows the user to sort
and filter City financial information to obtain the specific financial information desired. This tool
may be found on the City’s website at https://encinitasca.opengov.com/transparency.
TRANSMITTAL LETTER • INTRODUCTORY SECTION
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FACTORS AFFECTING FINANCIAL CONDITION OF THE CITY
Global Pandemic and Local Economy – In response to the outbreak and spread of the novel virus,
coronavirus (COVID-19), in March 2020, the California Governor issued stay at home orders and
shut down non-essential businesses. Encinitas enjoys a strong and well diversified tax base and over
the years, the property values and personal income levels within the City have generated tax revenues
sufficient to support the level of municipal services and facilities for the community to enjoy. In the
past, the tax base has performed well in good economic times and has also been able to weather the
financial impacts during slower economic times. The net taxable assessed value of property in the
City has grown 51.3 percent since Fiscal Year 2009-10 (ten years ago). Throughout past recessions
the City maintained slight increases each year in net taxable assessed value. For Fiscal Years 2018-
19 and 2019-20 taxable values increased 6.5 percent and 4.8 percent, respectively.
General Fund Revenue - Property tax, and sales and use tax revenue represent approximately 79
percent of the City’s total General Fund revenue. Property tax revenue in FY 2019-20 totaled $49.5
million which was an increase of $2.1 million, or 4.5 percent, compared to FY 2018-19. Sales and
use tax revenue in FY 2019-20 was flat at $13.7 million compared to FY 2018-19. The State
lockdown affected other revenues in the General Fund such as charges for services related to the
cancellation of recreation program and the transient occupancy tax (TOT) revenue as travel came to
a halt. Total General Fund revenues for FY 2019-20 of $79.8 million increased slightly compared to
revenues in FY 2018-19 of $79.1 million.
Financial Strength and Sustainability – Despite the loss in revenue related to COVID-19, due to the
City’s conservative budgeting, strong reserves, and re-evaluation of its CIP program, the City of
Encinitas continues to be well positioned to weather economic fluctuations. The City has been
evaluated and rated by internationally recognized third party reviewers and on January 26, 2017,
Standard & Poor’s Rating Services (S&P) affirmed its ‘AAA’ issuer credit rating (ICR) for the City
of Encinitas.
The City had approximately $43.8 million of general fund bonded debt and capital leases outstanding
at June 30, 2020, with scheduled payments of principal and interest of $3.9 million in FY 2019-20.
This debt service as a percentage of the General Fund budget is 5.4 percent, which is well below the
City’s debt service policy which states that debt service paid each year shall not exceed 15 percent of
the General Fund budget.
Development and Maintenance of Financial Reserves - The City has an established financial policy
regarding maintenance of adequate financial reserves. The City sets aside 20 percent of General Fund
operating expenditures for contingencies (unanticipated events that could negatively impact the
City’s financial condition). The City has never had occasion to draw on this reserve, since its
inception in the early 1990’s. The City also maintains a General Fund budget stabilization reserve,
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, despite the
decline in operating revenues experienced during the last quarter of the fiscal year from the effects
of the global pandemic and shutdown orders. Any amounts remaining after these two reserves are
fully funded are considered available for City Council directed use, primarily for future funding of
capital improvements. General Fund reserves for contingencies and budget stabilization total $16.2
million and funding available for capital improvements was $18.4 million as of June 30, 2020.
TRANSMITTAL LETTER • INTRODUCTORY SECTION
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ACCOMPLISHMENTS
Based on direction by the City Council, highlighted below are the City’s accomplishments this fiscal
year.
Response to COVID-19 - As a result of the global pandemic, a pivot from basic operations was
necessary. Budget cuts were made across the board in all departments. Encinitas was one of the first
cities to provide financial support to small businesses and through the CARES act the City assisted
200 small businesses by distributing $500,000 in direct financial assistance. No cost permits were
provided with accelerated processing to allow businesses to operate outside and in the public right-
of-way. Window clings were delivered to businesses stating “Facial Coverings Required” to help
present a unified message to the patrons of Encinitas businesses. We made great effort to provide
extensive and up to date communication to the public, providing important information as new
information became available on almost a daily basis. We strengthened our connection with the
Chamber of Commerce and the 101 associations to assist in the delivery of information to the business
community, and to receive feedback regarding the best and most effective levels of assistance that
the City could provide. The Senior Nutrition Program participation more than doubled with the City
providing more than 80 meals a day. Meals were available for pick-up or delivery.
The City of Encinitas received $209,521 in Community Development Block Grant/CARES Act
funding (CDBG-CV) which was allocated to a COVID-19 Emergency Rental Assistance program.
Approximately 40 households have been assisted with rental assistance. The City of Encinitas will
receive an additional CDBG-CV allocation of $453,824 which is expected to be allocated to eligible
assistance programs in early 2021.
In March 2020, the City also began providing Temporary Emergency Motel Vouchers to individuals
experiencing homelessness during the pandemic. The program eligibility was limited to those that
meet the definition of “high-risk” as defined by FEMA. On May 6, 2020, the City Council approved
an MOA with the County of San Diego Health and Human Services Agency to provide up to 22 hotel
rooms and the existing agreement with Community Resource Center was extended to provide case
management services.
Additionally, we worked hard to promote the best methods of slowing the spread of COVID-19 by
educating the public on the importance of wearing facial coverings and maintaining social distance
from others. This was achieved through banners, yard signs, the free distribution of 22,000 masks,
and through personal contact by Sheriff Deputies. The positive outcome of this messaging has been
measurable as Encinitas has consistently been one of the communities within the County of San Diego
with the lowest number of COVID-19 cases.
Housing Element – Following approval of the Fifth Cycle Housing Element (2013-2021) by the
California Coastal Commission, the State Housing and Community Development certified the
document in October 2019.
EnerGov (EG) and Customer Self Service (CSS) - EG is a fully integrated enterprise system that
incorporates processes and data from the various city departments. This tool reduces the need for
redundant data processing and provides staff access to information within a single environment. CSS
works with EG and is an outward facing web portal. CSS provides various services to the public,
such as the ability to submit permit applications, access information, and pay invoices. EG and CSS
incorporate electronic application and plan submittals, which greatly reduce paper usage, the need to
TRANSMITTAL LETTER • INTRODUCTORY SECTION
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scan documents, and customer trips to City Hall. The system also routes applications and information
electronically to City reviewers.
The City has over 37,100 contacts within EG, since the City implemented this system in June 2015.
Additionally, there are currently over 8,200 registered CSS users accessing online services since CSS
was rolled out in January 2018.
Fire Prevention now conducts all building permit, plan reviews, and construction inspections
electronically through EG. All Planning, Building, and Land Development Engineering permits are
now submitted entirely online within EG and most can now be paid through the CSS system.
Cyber Security and Telecommuting Upgrades – Infrastructure was implemented to support staff
working remotely during the pandemic. This included implementation of cybersecurity tools to
protect the public, conducting business online with the City, and a remote workforce from a potential
breach.
Leucadia Fast Response Vehicle Pilot Program – The City approved a Fast Response Vehicle (FRV)
Pilot Program with the goal of reducing fire department response times in the North Leucadia/Saxony
Canyon area from January 02, 2019 to July 02, 2020. The FRV program was in service for twelve
hours a day, staffed with an overtime Captain and Firefighter/Paramedic, and utilized a County-
owned Type 6 fire engine at a temporary site. Staff, along with an outside consultant, Fitch &
Associates, evaluated the performance of the FRV program and the pilot program ended after the
results were presented to the City Council.
Community Choice Energy (CCE) - Since 2016, the City has been actively investigating the
feasibility of commencing CCE service for electric customers within the City, with the objective of
allowing electricity customers the choice of selecting a greater percentage of renewable energy,
providing greater local involvement over the provision of electric commodity services, and promoting
competitive commodity rates. The City completed a Technical Feasibility Study which determined
that a CCE program could result in local benefits including the use of renewable energy. On
September 18, 2019, Council officially formed and joined a new CCE agency, the San Diego
Community Power, along with the Cities of San Diego, Chula Vista, Imperial Beach and La Mesa.
Climate Action Plan (CAP) Award – The City continues to receive awards for its Climate Action
Plan and associated implementation efforts. In March 2020, the Climate Action Campaign, a local
non-profit climate advocacy organization, recognized the City of Encinitas with a top-ranking score
of “Silver” in its published regional CAP Report Card for the second year in a row. This recognition
was received for the completion of a robust Climate Action Plan, early-stage implementation efforts
and annual reporting.
Successful Sand Replenishment Project – In winter/spring of 2019, the City of Encinitas procured
and deposited 40,000 cubic yards of compatible beach sand on the north end of the City at Batiquitos
Beach. Benefits to the area were immediately realized; deposited sand improved public safety and
recreation with increased beach widths, and enhanced wildlife habitat for resident and migrating
shorebirds. In February 2020, the City was able to procure over 500 cubic yards of clean beach sand
directly dredged from Batiquitos Lagoon to supplement Moonlight Beach back beach areas.
San Diego County Coastal Storm Damage Reduction Project – In February 2020, the City received
word that this project would be added to the Army Corps Work Program and that the Army Corps of
Engineers would allocate over $400,000 in federal funding to begin the pre-construction, engineering
TRANSMITTAL LETTER • INTRODUCTORY SECTION
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and design (PED) phase of this project. The $400,000 allocated by the Army Corps represents the
full amount of federal funding needed for the year. The PED phase will require an additional $1.5
million in federal funding. Council previously authorized the acceptance of a total of $450,000 in
grant funding from the Department of Boating and Waterways (DBW) to support the PED phase.
Acceptance of the grant funds reduces the Cities’ non-federal share for the PED phase. The DBW
has been and continues to be a committed partner in the Project.
Cardiff Beach Living Shoreline Project Receives National Award – On May 18, 2020, the American
Shore and Beach Preservation Association (ASBPA) announced that the Cardiff State Beach Living
Shoreline project in Encinitas won the top honor for the 2020 Best Restored Beach Award. By
utilizing recovered and imported rock materials, dredged sand from the San Elijo Lagoon inlet and
locally sourced coastal plants, this dune creation project provides an ecological facelift that increases
biodiversity with the added benefit of protecting Coast Highway 101 from ocean surges.
In August 2020, the City entered into an agreement with WILDCOAST, a nonprofit, community-
based organization committed to conserving coastal and marine ecosystems, to install a Marine
Monitoring radar (M2) atop of the Marine Safety Center at Moonlight Beach. The intention of
installing the M2 is to gather boat activity data for research purposes to determine if illegal fishing is
taking place in the Swami’s State Marine Conservation Area (SMCA) and to what extent. This data
will be shared with the M2 working group, which includes the City, WILDCOAST, the Anthropocene
Institute, California Marine Sanctuaries Foundation, National Oceanic and Atmospheric
Administration, Cal Poly San Luis Obispo, and the University of California, Santa Barbara The M2
radar was successfully installed in November 2020, and has been tracking data since the completion
of the install.
Helen Putnam Award for Accessory Dwelling Units (ADU)s – On October 16, 2019, the City
received the 2019 Helen Putnam Award from the League of California Cities for its Housing for
Generations program, under the “Housing Programs and Innovations” category. The Housing for
Generations program was recognized for its innovative, multistep approach to encourage the
permitting and construction of Accessory Dwelling Units (ADU). This program included the
adoption of two new ordinances for ADU and Junior ADU regulations, the sponsoring of state
legislation (SB 1226), and the creation of the Permit Ready Accessory Dwelling Unit (PRADU)
program, which offers property owners a selection of pre-approved ADU building plans, free of
charge.
In 2019, the Development Services Department issued 201 ADU applications, with 103 ADU
building permits, and 108 ADUs permitted in 2020 through October 30. In the first year of the
PRADU program, 29 applications were submitted, 12 permits were issued, and three received
certificates of occupancy. The City updated the ordinances regarding ADUs and JADUs.
Transition to a Zero/Low Emissions Vehicle Fleet - The Public Works Department is progressively
moving toward a zero/low emissions municipal fleet. The Fleet Division receives regular delivery of
renewable diesel instead of conventional diesel. Renewable diesel is a non-petroleum-based diesel
that works in unmodified diesel engines, and burns 80 percent cleaner than conventional diesel fuel.
All three of the City’s fuel tanks, which are located at the Public Works Facility, as well as Fire
Stations 3 and 4, supply renewable diesel. The renewable diesel is used for all diesel-fueled City
vehicles, including Public Works heavy duty trucks and equipment and all fire engines. The Public
Works fleet is also steadily transitioning to electric light duty vehicles in compliance with the goals
of the CAP. The City owns thirty-four (34) heavy- and medium-duty diesel vehicles and forty-six
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(46) light duty vehicles. This fleet includes thirty-two (32) vehicles currently fueled with renewable
diesel, fourteen (14) hybrid vehicles, one (1) plug-in hybrid vehicle, and five (5) all-electric vehicles.
Leaf Blower Ordinance – An ordinance regulating the use of gas-powered leaf blowers was adopted
by Council on July 10, 2019. The ordinance prohibits gas-powered leaf blowers and allows the use
of battery and electric leaf blowers as an alternative. The ordinance took full effect on January 20,
2020.
Public Safety Improvements and Upgrades – The Fire Department replaced cardiac monitors on every
unit and purchased new mechanical CPR devices which will help improve our already great CPR
survival rate. The Department also replaced all the thermal imaging units for all fire stations, which
is a vital piece of equipment that helps locate downed civilians or firefighters. The Department also
purchased a new fire engine for Encinitas Fire Station #3 to replace the previous engine that was used
for the community for the last 17 years.
The following CIP and Work Program projects were completed during FY 2019-20:
Assessment of Fair Housing - Program participants including Housing Authorities and recipients of
Community Development Block Grant program funds are required to take actions to affirmatively
further fair housing choice. The City (along with all San Diego County jurisdictions) updated the
(San Diego Regional) Analysis of Impediments to Fair Housing Choice. The work commenced in
August 2019 and was completed June 2020. The Analysis of Impediments was adopted by the City
Council in June 2020.
ADA Curb Ramp Project – Cardiff Accessibility – This project added ADA improvements at the
intersection of Newcastle Ave. and Chesterfield Drive, and the west side of Newcastle Avenue from
Chesterfield Drive to Aberdeen Drive in Cardiff.
Bonita Drive Sidewalk – In September 2019, a sidewalk was installed on Bonita Drive from Melba
Road to 600 feet to the north.
Safe Routes to School – New crosswalks were installed for Capri Elementary School. Other
improvements included the addition of white edge lines on Caudor Street, the extension of the double
yellow on Plato Place, “Slow School Xing” legends on Capri Road, and the installation of additional
speed limit signs in the area.
Pedestrian Scramble Crosswalks – this project added pedestrian scramble crosswalks on the Coast
Highway 101 at D and E Streets and was completed in May 2020.
Pedestrian Improvements – Rectangular rapid flashing beacons (RRFB), advanced warning signage
and crossing striping improvements were completed at Montgomery Drive and Westminster, Paseo
De las Verdes at the Pedestrian Trail Crossing, Gardendale Road and Clear Valley Road. A crosswalk
and RRFB was added on Vulcan Avenue at F Street. Crosswalk improvements were made at several
locations during the year, including: Lake Drive by the Cardiff Sport Park parking lot, Wandering
Road at Rambling Road, Willowspring Drive from Hickoryhill Drive to Melba Road, and along
Encinitas Boulevard at Calle Magdalena, Westlake St./ Quail Gardens Drive, via Cantebria, El
Camino Real, Village Square Drive and Rancho Santa Fe Road.
Traffic Calming – Vulcan Avenue from E Street to Santa Fe Drive was restriped to narrow travel
lanes, add bike lanes and parking lanes. Vulcan Avenue from Santa Fe Drive to Montgomery Avenue
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was restriped to narrow travel lanes and add parking northbound. Bike lane buffers have also been
added on Garden View Road from El Camino Real to Glen Arbor Drive, Mountain Vista from El
Camino Real to Glen Arbor Drive, Piraeus from Leucadia Blvd to la Costa Avenue, and Via Cantebria
from Encinitas Boulevard to Garden View Road.
Citywide Stormdrain Repair Project - This project targeted corroded corrugated metal pipe storm
drain throughout the city. The work included rehabilitation such as local repairs, lining and
replacements as need.
Senior Center ADA Improvements - This project provided ADA improvements to the Encinitas
Senior Center parking lot including new sidewalks, ramps and paving and parking lot striping.
Highway 101 San Elijo Lagoon Bridge Emergency Repairs - This project removed spalling concrete,
placed new reinforcing steel and placed new concrete under the South Coast Highway 101 bridge
over the San Elijo Lagoon.
Consolidated Plan - The US Department of Housing and Urban Development requires jurisdictions
that receive Community Development Block Grant funds to prepare a Consolidated Plan. The five-
year plan covers the period of July 1, 2020 to June 30, 2025. The work was coordinated through the
County of San Diego and was adopted on April 22, 2020, and submitted to HUD.
Park Improvements – Three shade structures were placed over the playgrounds at Encinitas
Community Park, Leo Mullen Sports Park and Sun Vista Park. Shade at public parks was listed as a
priority by the community during the parks master planning process.
MAJOR INITIATIVES AND PROJECTS
The City Council has four Strategic Priority Focus areas which are –
1. Attain a legally compliant Housing Element
2. Better incorporate the rail corridor into our neighborhoods
3. Improve connectivity and mobility for all users
4. Promote green initiatives and protect natural resources.
Highlighted below are the projects that the City is working on as they relate to the City Council’s
focus areas:
1. Attain a legally compliant Housing Element
Housing Element - Development of the Housing Element Update 2021-2029 began in May 2019 with
the issuance of a Request for Proposal (RFP). On September 18, 2019, the City Council approved
the agreement with Kimley-Horn & Associates, Inc. (Consultant). The Consultant completed a
review of demographics, population and housing to reflect current conditions, and an adequate site
analysis for the 2021-2029 Regional Housing Needs Assessment (RHNA). Public workshops were
held in November 2019 and February 2020, with a joint Planning Commission/City Council public
meeting held in December 2019. City staff submitted the draft Housing Element to HCD in June
2020 for its 60-day review period.
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2. Better incorporate the rail corridor into our neighborhoods
Rail Corridor Cross-Connect Implementation Plan – This plan builds on the recommendations
presented in the Rail Corridor Vision Study and Active Transportation Plan, approved by City
Council in February 2018. The Rail Corridor Vision Study is the centerpiece of the Coastal Mobility
and Livability Study (CMLS), a broad effort to examine mobility issues and opportunities in the
Encinitas coastal rail corridor. Using a Caltrans Sustainable Communities Transportation, the first
workshop was held on May 20, 2019. The survey was completed and the draft concept plans were
prepared for the second workshop held on January 30, 2020. An on-line open house was also
available through February 29, 2020.
El Portal Pedestrian Rail Crossing - This project is fully designed, and construction of a grade-
separated pedestrian and bicycle rail crossing near El Portal Street in Leucadia is starting in
November 2020. The City retained the services of the San Diego Association of Governments to
manage construction of this complicated project.
Verdi Undercrossing – This project consists of a rail undercrossing at Verdi Avenue in Cardiff – the
project is finishing design and grant funding is being sought for construction.
3. Improve connectivity and mobility for all users
Leucadia 101 Streetscape - This 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.
The City Council approved the construction contract for Phase 1 (Marcheta Street to Basil Street)
which is expected to start construction in January 2021.
B Street Sidewalk Improvements - This project constructs new sidewalk, pedestrian ramps, curbs and
gutters and landscaping on the north side of B Street from Highway 101 to Moonlight Beach. The
Notice of Completion was approved on October 28, 2020.
Santa Fe Drive South Sidewalk and San Dieguito Academy Frontage Improvements - This project
involves construction of curb, gutter, and sidewalk on the south side of Santa Fe Drive from Gardena
Road to Mackinnon Avenue. In addition, accessible curb ramps will be provided on both sides of the
Santa Fe Drive/Mackinnon Avenue intersection, and landscaping improvements will be provided on
the north side of the street, fronting San Dieguito Academy School. Public outreach is underway.
Americans with Disabilities Act (ADA) Transition Plan - Under Title II of the ADA, public agencies
are required to conduct a self-evaluation of their programs and services in order to identify any
obstacles or barriers to accessibility. In 2013, the City and San Dieguito Water District conducted a
self-evaluation of its programs, services, administrative employment policies, and facilities on public
property and developed a Self-Evaluation and Transition Plan. The City/District recognizes that ADA
compliance is an ongoing responsibility and has updated the Self-Evaluation and Transition Plans,
Grievance Procedures, Public Notice and Administrative policies PO20, PO21, PO22, and PO23
which was presented to City Council in December 2019 for adoption.
Rancho Santa Fe (Trail 82) and Camino Del Norte (Trail 95) Design and Construction - Design is 95
percent complete for Trail 95. Utility conflicts are being worked out for Trail 82. Adams Run Trail
will require environmental review and permits from Federal Fish and Wildlife regarding habitat
impacts to California Gnatcatcher.
TRANSMITTAL LETTER • INTRODUCTORY SECTION
x
4.Promote green initiatives and protect natural resources.
Climate Action Plan - The updated Climate Action Plan (CAP) was adopted by Council on January
17, 2018. City staff continues to implement projects, programs, and initiatives that support the goals
of the CAP and reduce greenhouse gas (GHG) emissions. The CAP was updated on November 18,
2020. Some of the major CAP actions that have been completed or will be advanced in the coming
year include:
•Launch a Community Choice Energy (CCE) Program –The new CCE has
commenced start-up activities including developing a business plan, hiring staff, and
acquiring the financing needed to purchase and serve renewable electricity to the
community.
•Development of building ordinances to require and encourage reduction of fossil fuel
energy use – In November 2019, Council adopted an ordinance that will require
additional electrical improvements and electric vehicle charging stations (EVCS) to
be installed at a percentage of parking spaces at commercial and multi-family
properties, as well as require new single family homes to come equipped with
electrical infrastructure necessary for the home to be “EVCS ready.” The ordinance
went into effect on January 1, 2020. State-required cost effectiveness studies and
proposed ordinances are currently being drafted to address solar photovoltaic energy
production, energy efficient water heating, building electrification, and other
efficiency measures for commercial and residential properties.
•Support initiatives to divert food waste and recycling out of the landfill - Support
EDCO, the City’s franchise waste hauler, in developing an anaerobic digestion
facility and coordinating curbside pickup of all organic waste, including food waste.
Continue to fund and support community education and outreach programs that
encourage the diversion of food waste through composting and other means and
encourage proper recycling and waste disposal.
•Plastics initiative – Implementation of the City of Encinitas Plastics Initiative
regulating the sale and distribution of single-use plastic products in Encinitas
including plastic straws, plastic utensils, and plastic beverage bottles. The Plastics
Initiative is a multi-phased approach, starting in December 2019 through the
Introduction of an Ordinance to require the distribution of plastic straws upon request
only, including takeout and drive-thru, and a prohibition on the distribution of plastic
straws. Phase 2 was initiated in February 2020 and included the development of a
policy to limit the sale or distribution of Plastic Beverage Containers at City Facilities
and Events. Phase 3 was initiated in April 2020, leading to the adoption of an
ordinance prohibiting the retail sale of expanded polystyrene (EPS) food service
ware, ice chests, and packing materials.
Net Zero Municipal Electricity - In response to a major goal outlined in the Climate Action Plan, the
Public Works Department commissioned a study to evaluate all city facilities, propose energy savings
measures, and design a solar system to offset the remaining demand with the goal of bringing the
City to a net zero energy footprint. The evaluation of city facilities is complete and outlines options
to finance and install energy efficiency measures and multiple solar photovoltaic systems. The
proposal is planned to go to City Council for consideration in 2021.
Olympus Park (formerly Standard Pacific Park) - In 2001, as part of the Maravu Development, the
Standard Pacific parcel was conveyed to the City for parkland mitigation. On October 26, 2016, the
Parks, Beaches, Trails and Open Space Master Plan was approved by City Council. The plan
,..
TRANSMITTAL LETTER• INTRODUCTORY SECTION identified the neighborhood around the Standard Pacific park site as an area that offered low service for recreational opportunities. A park in this area would afford the residents more opportunity to participate in park and recreation activities. On June 28, 2017, City Council awarded a contract to design Standard Pacific Park. The scope of work in the contract includes development of plans, specifications, permits, and environmental documentation for the Standard Pacific park site. The final design documents are complete and are fully entitled to build the park. On April 22, 2020, City Council awarded a contract to construct Olympus Park. Construction of the park began in spring 2020. The park is scheduied to be completed in early 2021. EnerGov (EG) and Customer Self Service (CSS) -The Development Services Department has completed configuring the remaining Building, Planning, and Engineering permits within EG and CSS during 2020, which allows for an online permit application submittal and review process. AW ARDS AND ACKNOWLEDGEMENTS ·The Government Finance Officers Association (GFOA) awarded its Certificate of Achievement forExcellence in Financial Reporting to the City of Encinitas for its Comprehensive Annual FinancialReport for the fiscal year ended June 30,2019. The City believes that the FY 2019-20 ComprehensiveAnnual Financial Report continues to meet the GFOA criteria for the award.Lastly, we deeply appreciate the dedication and leadership of the Mayor and Council Members whohave consistently supported our goal of excellence in all aspects of financial management. Thecompletion of this report could not have been accomplished without the dedication and hard work ofthe entire staff in the Finance Department. Special recognition goes to the Finance Reporting team,Stella Huang, Alexis Angelini, Katie Schroeder, and Jessica Huynh for their work with the auditorsand the coordination of the preparation of this report.Respectfully submitted,Pamela W. Antil City Manager Teresa S. McBroome Director of Finance/City Treasurer XJ
LIST OF CITY OFFICIALS
As of June 30, 2020
CITY COUNCIL
Mayor Catherine S. Blakespear
Deputy Mayor Kellie Hinze District 2
Council Member Tony Kranz District 1
Council Member Jody Hubbard District 3
Council Member Joe Mosca District 4
EXECUTIVE TEAM MEMBERS
City Manager Pamela Antil*
Assistant City Manager Mark Delin
City Clerk/Legislative Services Director Kathy Hollywood
Public Works Director Carl Quiram
Director of Finance/City Treasurer Teresa S. McBroome
Fire Chief Michael Stein
Human Resources Director Tom Bokosky
IT Manager Wendy Flynn
Development Services Director Lillian Doherty
Risk Manager Jace Schwarm
Parks, Recreation & Cultural Arts Director Jennifer Campbell
*Effective October 12, 2020
xii
Commission
for the Arts
Environmental
Commission
Parks &
Recreation
Commission
Planning
Commission
City of Encinitas Organization Chart
ELECTORATE
Senior
Commission
Traffic &
Public Safety
Commission
Youth
Commission
4\
xiii
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Encinitas
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2019
Executive Director/CEO
xiv
FINANCIAL SECTION
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Independent Auditor’s Report
City Council
City of Encinitas
Encinitas, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of
the City of Encinitas, California,(City)as of and for the year ended June 30, 2020, and the
related notes to the basic financial statements, which collectively comprise the City’s basic
financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States
of America; this includes the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
did not audit the Investment in Joint Ventures of the R.E. Badger Joint Powers Authority, R.E.
Badger Financing Authority, San Elijo Joint Powers Authority, and Encina Wastewater
Authority, which collectively represent the following percentages of assets, net position and
expenses of the following opinion units:
Those statements were audited by other auditors whose reports have been furnished to us,
and our opinions, as they relate to the amounts included for investment in joint ventures, are
based solely on the reports of the other auditors. We conducted our audit in accordance with
auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards,issued by the
Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
Assets Net Positio n Expenses
Business-type Activities 12.48% 17.52%4.22%
Each Major Enterprise Fund :
Cardif f Sanitary District 52.02% 63.45% 43.35%
San Dieguito Water District 29.81% 37.39% 15.55%
Encinitas Sanitary Division 18.16% 18.50% 28.02%
Opinion Unit
1
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the City’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
City’s internal control. Accordingly, we express no such opinion.An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinions.
Opinions
In our opinion,based on our audit and the report of other auditors,the financial statements
referred to above present fairly, in all material respects, the respective financial position of
the governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund information of the City of Encinitas, California,as of June 30, 2020, and the
respective changes in financial position and, where applicable, cash flows thereof for the year
then ended in accordance with accounting principles generally accepted in the United States
of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis,Budgetary Comparison Schedule for the General Fund
and the Infrastructure Improvements Special Revenue Fund, Schedule of Changes in the Net
Pension Liability and Related Ratios, Schedule of the City’s Proportionate Share of the Net
Pension Liability, Schedules of Contributions –Pensions, Schedule of Changes in the Net OPEB
Liability and Related Ratios, and the Schedule of Contributions –OPEB be presented to
supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance.
2
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Encinitas’basic financial statements. The introductory
section, supplementary information and the statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The supplementary information is the responsibility of management and were derived from
and relate directly to the underlying accounting and other records used to prepare the basic
financial statements. Such information has been subjected to the auditing procedures applied
in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the supplementary information is
fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory section and the statistical section have not been subjected to the auditing
procedures applied in the audit of the basic financial statements, and accordingly, we do not
express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
November 23, 2020 on our consideration of the City of Encinitas' internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is to describe
the scope of our testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on internal control over financial reporting
or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering City of Encinitas’internal control over financial
reporting and compliance.
Irvine, California
November 23, 2020
3
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4
City of Encinitas
Management’s Discussion and Analysis
For the Year Ended June 30, 2020
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, 2020. 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 $11.4 million. This is due to a $8.1 million increase in
governmental activities and a $3.3 million increase in business-type activities.
The City’s total net position increased overall by $9.4 million compared to the previous year. The
governmental activities increased $3.9 million and business-type activities increased $5.5 million.
Total assets increased $11.4 million, total liabilities increased $1.8 million, deferred outflows
increased $1.0 million, and deferred inflows also increased $1.2 million.
The City’s total revenues increased $1.6 million from 2019.
Governmental activities revenues increased $1.5 million
Business-type activities revenues increased $0.1 million
The City’s total expenses increased $8.0 million from 2019.
Governmental activities expenses increased $7.2 million
Business-type activities expenses increased $0.8 million
The City’s total net pension liability increased $3.9 million from 2019.
Governmental liability increased $3.3 million
Business-type liability increased $0.6 million
The City’s total OPEB liability decreased $2.1 million from 2019.
Governmental liability decreased $2.0 million
Business-type liability slightly decreased at $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, 2020
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, 2020
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 agency funds that
only report a balance sheet and do not have a measurement focus. Reconciliations of the fund financial
statements to the government-wide financial statements are included to explain the differences created
by the integrated approach.
Fund Financial Statements – The City’s fund financial statements provide a greater level of detail
regarding the City’s governmental activities and include the General Fund, Capital Improvements Capital
Projects Fund, Infrastructure Improvements Special Revenue Fund and other non-major governmental
funds. The City reports the General Fund, the Capital Improvements Capital Projects Fund, and the
Infrastructure Improvements Special Revenues Fund as major funds, under the guidance provided by
GASB No. 34. All other governmental funds are considered non-major funds and are reported as one
group.
The General Fund is the largest and most discretionary source of funding for operations, debt service
and capital improvements, via both direct expenditures and transfers to other City funds. The Capital
Improvements Capital Projects Fund accounts for all governmental fund capital improvements, as well
as work projects such as long-term consultant studies. The Infrastructure Improvements Special Revenue
Fund accounts for financial resources from local, state and federal grants which are used primarily to
fund capital improvements. All these expenditures are categorized as capital outlay.
The City’s Major Funds include: Type of Activity:
General Fund Governmental Activities
Capital Improvements Capital Projects Fund Governmental Activities
Infrastructure Improvements Special Revenue Fund Governmental Activities
City’s Water and Wastewater Enterprises Business-type Activities
San Dieguito Water District
Cardiff Sanitary Division
Encinitas Sanitary Division
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
7
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
accrual accounting, which measures cash and all other financial assets that can readily be converted to
cash. The governmental funds balance sheet and the governmental funds statement of revenues,
expenditures, and changes in fund balance present information separately for the General Fund, the
Capital Improvements Capital Projects Fund, and the Infrastructure Improvements Special Revenue
Fund, which are all classified as major funds. These statements also report several individual
governmental funds classified as non-major funds, such as Special Revenue and Debt Service Funds,
which are combined into a single, aggregated presentation. Individual fund data for each of the non-major
governmental funds is provided in the supplementary information section.
Proprietary Funds - When the City charges customers for the services it provides, whether to outside
customers or to other units of the City, these services are generally reported in proprietary funds.
Proprietary funds, like government-wide financial statements, are presented on an accrual basis of
accounting. There are two types of proprietary funds – enterprise funds and internal service funds.
Enterprise funds are used to report activities for which external users are charged a fee for goods or
services. Internal service funds are used to report activities that provide supplies and services to other
City programs and activities. The internal service funds are reported with governmental activities in the
government-wide financial statements.
Fiduciary Funds – The City is the trustee, or fiduciary, for certain funds held on behalf of the Community
Facilities District No. 1- the Encinitas Ranch Development. 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, 2020 is compared to the results for 2019 in Table 1.
8
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
Net position represents the simplest test of financial health for the City, indicating the excess or deficit of
assets, and deferred outflows of resources, over liabilities and deferred inflows of resources. Net position
for the City as a whole increased 2.8 percent from $339.2 million on June 30, 2019, to $348.6 million at
June 30, 2020.
The overall increase in total assets is $11.4 million when compared to the previous year. The
governmental activities total assets increased $8.1 million compared to the previous year with an
increase in cash and investments, inventory and prepaid items, and capital assets offset by a
decrease in receivables. The business-type activities total assets increased $3.3 million compared to
the previous year with primary increases also in cash and investments, receivables, and inventory
and prepaid items. In addition, the investment in joint ventures increased slightly compared to the
previous year. The only decrease was in capital assets due to a write-off in construction in progress
and an increase in accumulated depreciation in structures and improvements.
The overall increase in total liabilities is $1.8 million when compared to the previous year. This is
primarily attributable to an increase in net pension liabilities and current liabilities offset by a decrease
in other postemployment benefits (OPEB) liabilities and long-term liabilities.
Total
Changes
CY PY CY PY CY PY
2020 2019 2020 2019 2020 2019 %2020 2020 2020 2020
Current assets 93.1$ 91.4$ 53.1$ 49.2$ 146.2$ 140.6$ 4.0%
Capital assets (net)224.8 218.4 56.9 58.7 281.7 277.1 1.7%
Other non-current assets 0.5 0.5 61.1 59.9 61.6 60.4 2.0%
Total assets 318.4 310.3 171.1 167.8 489.5 478.1 2.4%
Deferred outflows 13.6 13.7 2.6 1.5 16.2 15.2 6.6%
Current liabilities 22.4 18.8 4.0 4.1 26.4 22.9 15.3%
Long-term liabilities 100.5 101.0 25.2 26.4 125.7 127.4 (1.3%)-4.6%
Total liabilities 122.9 119.8 29.2 30.5 152.1 150.3 1.2%
Deferred inflows 4.3 3.3 0.7 0.5 5.0 3.8 31.6%
Net position:
Net investment in
capital assets 181.3 172.6 38.1 38.1 219.4 210.7 4.1%
Restricted 23.0 21.0 0.4 0.4 23.4 21.4 9.3%
Unrestricted 0.5 7.3 105.3 99.8 105.8 107.1 (1.2%)
Total net position 204.8$ 200.9$ 143.8$ 138.3$ 348.6$ 339.2$ 2.8%
Table 1
Statement of Net Position
(in millions of dollars)
Governmental Business-type Total Primary
Activities Activities Government
9
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
The increase in total assets of $11.4 million, increase in total liabilities of $1.8 million, deferred inflows
of $1.2 million and deferred outflows of $1.0 million results in an increase in the City’s total net position
of $9.4 million, or approximately 2.8 percent, compared to 2019. See Table 1.
CY PY CY PY CY PY
2020 2019 2020 2019 2020 2019
Program revenues:
Charges for services 8.7$ 9.4$ 24.9$ 23.6$ 33.6$ 33.0$
Operating grants 4.4 4.4 1.2 1.2 5.6 5.6
Capital grants 6.8 6.6 0.6 0.7 7.4 7.3
General revenues:
Property taxes 51.2 49.2 1.2 1.1 52.4 50.3
Sales and use taxes 13.7 13.7 - - 13.7 13.7
Other taxes 5.0 5.3 - - 5.0 5.3
Intergovernmental 0.2 0.2 - - 0.2 0.2
Other general revenue 3.8 3.5 2.1 3.3 5.9 6.8
Total revenues 93.8 92.3 30.0 29.9 123.8 122.2
Program expenses:
General government 17.3 15.3 - - 17.3 15.3
Public safety 35.8 33.1 - - 35.8 33.1
Public works 11.9 9.2 - - 11.9 9.2
Planning and building 7.0 6.8 - - 7.0 6.8
Engineering services 6.3 6.8 - - 6.3 6.8
Parks and recreation 10.0 9.8 - - 10.0 9.8
Interest on long-term debt 1.6 1.7 - - 1.6 1.7
Cardiff Sanitary Division - - 3.1 3.5 3.1 3.5
San Dieguito Water District - - 16.5 16.6 16.5 16.6
Encinitas Sanitary Division - - 3.2 2.0 3.2 2.0
Affordable housing - - 1.7 1.6 1.7 1.6
Total expenses 89.9 82.7 24.5 23.7 114.4 106.4
Change in net position 3.9 9.6 5.5 6.2 9.4 15.8
Transfers in (out)- - - - - -
Increase in net position 3.9 9.6 5.5 6.2 9.4 15.8
Net position - beginning 200.9 191.3 138.3 132.1 339.2 323.4
Net position - ending 204.8$ 200.9$ 143.8$ 138.3$ 348.6$ 339.2$
Activities Activities Government
Table 2
Statement of Activities and Changes in Net Position
(in millions of dollars)
Governmental Business-type Total Primary
10
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
Governmental Activities
Chart 1 reflects the financial impact of the various City programs or the extent to which these programs
generate revenue from fees and grants. The City’s programs include General Government, Public Safety
(Fire and Law Enforcement), Public Works, Development Services (Planning and Engineering) and
Parks, Recreation and Cultural Arts. Each program’s net cost (total cost less revenues generated by the
activities) is presented in the Statement of Activities and Changes in Net Position.
Note: Program revenues only include charges for services, operating grants and contributions, capital grants and contributions and do
not include general revenues.
11
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
Chart 2 reflects that property taxes, sales and use taxes, charges for services, capital grants and
contributions, and other taxes are the top five categories of total revenue and comprise 91 percent of
funding for governmental activities. The remaining categories include operating grants and contributions,
investment income and other.
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 $5.5 million from the last fiscal
year. The program revenues and general revenues totaled $30.0 million, exceeding total expenses of
$24.5 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 $1.2 million in program revenues and a decrease of $1.1 million in general revenues from the previous
year. The primary reason for the increase in operating revenue during Fiscal Year 2019-20 was
attributable to SDWD’s increase in water sales of $1.1 million due to two increases in the water rates.
The Board approved the first rate increase effective May 1, 2019. The second rate increase went into
effect on June 1, 2020. The operating revenues in Cardiff Sanitary Division (CSD) increased slightly by
two percent and the Encinitas Sanitary Division (ESD) increased one percent compared to the previous
year. Supplies expense for SDWD increased $0.3 million compared to the previous year. The changes
in water rates contributed to a $0.8 million increase in net income for SDWD. The CSD and ESD operating
income remained stable.
12
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
Overall, program revenues and general revenues exceeded program expenses during Fiscal Year 2019-
20 resulting in a total net change of $5.5 million.
Chart 3 below compares program revenue from business-type activities to program expenses. Water
and wastewater operations operated at a surplus, as shown in the Statement of Activities and Changes
in Net Position.
Note: Program revenues only include charges for services, operating grants and contributions, capital grants and contributions and do
not include general revenues.
GENERAL FUND BUDGETARY HIGHLIGHTS
General Fund Revenues $4.7 million above projections
General Fund actual revenues of $79.8 million were $2.5 million, or 3.3 percent, higher than the original
budget and $4.7 million, or 6.2 percent, higher than the final budget. Actual revenues were higher by $0.6
million, or 0.8 percent, when compared to FY 2018-19.
Property taxes are the City’s largest revenue source and make up 62 percent of the General Fund
revenue budget. The City of Encinitas receives approximately 24 cents of each dollar of property taxes
revenue generated in the City. Current secured property taxes, along with other property tax categories,
exceeded projections by $1.2 million, or 2.4 percent, compared to the final budget. Total property tax
revenue collected in FY 2019-20 increased by $2.1 million or 4.5 percent more compared with the prior
year. The continued growth in assessed values from transfers of ownership and the full two percent
inflation adjustment applied under Proposition 13 contributed to the increase in property tax revenue. The
13
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
median sale price of a detached single-family residential home in Encinitas was $1,342,500 up from
$1,144,250 compared with the same period January through July in FY 2018-19. The City experienced
a net taxable value increase of 4.8 percent for the FY 2019-20 tax roll, which was slightly less than
countywide at 5.7 percent. With the postponement of property tax payments of affected property owners
due to the virus, COVID-19, the City still collected 86.9 percent of property tax revenue.
Documentary transfer tax exceeded projections by $112,882, which was related to the values of homes
sold and the number of homes sold. The revenue from this category exceeded the budget due to higher
than anticipated transfers of ownership occurring during the fourth quarter, which accounted for 50
percent of the actual amount received.
Sales and use taxes are the City’s second largest revenue source, providing 17 percent of General Fund
revenue. Actual revenue received was over projections by $1,962,478, which was a 16.7 percent
increase compared to the final budget. The increase was from sales through the internet and sales in the
Auto and Transportation, Food and Drugs and in the Building and Construction categories. Due to the
COVID-19 pandemic, the City forecasted a decline of approximately $1.9 million in sales and use taxes
revenues in the third and fourth quarters. The State lockdown orders temporarily shuttered many non-
essential retailers and had a profound impact on most categories within the general consumer goods
group. However, the allocations from the countywide use tax pool surged 36 percent for the taxation of
additional internet purchases. Essential retailers in the Consumer Goods category that remained open in
Encinitas offset some of the expected overall decline in sales receipts. In addition, fewer businesses took
advantage of the State’s sales tax payment deferral program than expected. The year end results were
better than expected with actual revenue received for sales tax exceeding projects by approximately $2
million. However, compared to the previous year, collections were flat and only $50,233 higher, an
increase of 0.4 percent compared with the prior year.
Transient occupancy tax (TOT) is apportioned 80 percent to the General Fund and 20 percent to the
Coastal Zone Management Fund for sand replenishment and shore stabilization. TOT revenue was under
projections by $54,924, a decrease of 2.8 percent from the final budget. Staff forecasted a decline in TOT
revenue of $170,515 due to the stay-at-home orders in place and potential travelers postponing or
cancelling travel plans due to the COVID-19 pandemic.
Overall, franchise taxes were under projections by $46,843, which was a result of a reduction in taxes
collected due to a declining number of paid services not meeting projections and a decrease in total
electricity consumption. The franchise fee revenue is generated from public utility sources, trash
collection franchises, and telecommunication franchises conducting business within the city limits. The
revenue collected from AT&T was $12,106 lower than anticipated and $39,905 below projection for
collections from SDG&E and SoCal Edison.
Licenses and permits were under projections by $16,682. This fell below budget projection by 6.0 percent,
mostly due to lower than anticipated revenue collected from the SB1186 State Mandate Fee for Disability
Access CASp (Certified Access Specialist) Revenue collected in this category was $22,706 less than the
previous fiscal year.
14
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
Intergovernmental revenue was higher than projected by $117,910. This was primarily due to revenue
received from agencies participating in the Joint Technical Community Choice Aggregate (CCA)
Feasibility Study cost sharing agreement, reimbursements of state mandated costs, a payment made by
the California Office of Emergency Services for 2019 storms and payments for excess vehicle license
fees.
Overall charges for services revenue were under projections by $601,836, primarily from engineering
fees, which were $124,191 lower than projected due to lower activity levels in the fourth quarter restricted
by the pandemic shutdown. The building fees were $278,397 lower than projected also due to a lower
activity level. The number of Accessory Dwelling Unit (ADU) and energy efficiency permit fee waiver
credits were higher than expected. During the year, the fee waiver credits totaled $293,551. The revenue
collected from recreation fees were $160,243 higher than expected since staff forecasted the cancellation
of a number of recreation programs.
Fines, forfeitures and penalties, which include vehicle code and red-light violations, were also under
projections by $54,721. Use of money and property, which include investment earnings, exceeded
projections by $2.0 million, due to a higher portfolio amount and the change in fair market value of
investments. The other revenues exceeded projections by $152,848 due to the recording of unclaimed
Flexible Spending Accounts as revenues.
General Fund Expenditures $4.5 million under budget
All General Fund functional areas, including general government/administration, experienced savings in
the current fiscal year, with total savings (budget vs. actual) of over $4.5 million, or 6.2 percent compared
to the final budget. The savings were primarily from personnel costs resulting from vacancies throughout
City departments, and savings in the contracts and services category. In FY 2019-20 the savings in major
functions were from development services, parks and recreation, public safety and general government.
Departments also saved in contracts and services, and materials and supplies expenditures. Overall, all
departments were 2.3 percent to 12.5 percent below budget. Actual General Fund expenditures were
$67.5 million compared to prior year’s actual amount of $65.2 million.
Excess of Revenues over Expenditures $9.1 million above projections
Actual revenues over expenditures were approximately $12.4 million, compared to a budget of $3.2
million. This does not take into account other financing sources and uses which are discussed below.
This result is a combination of revenues being above projections and expenditures being under budget,
as discussed above.
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
15
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
projects. Transfers in for operating were over projections by $297,820, due to the CARES Act funding
which subsidized the personnel costs for expenditures related to COVID-19.
Transfers out of the General Fund operating category were $383,066 less than projected. The
anticipated matching shares or subsidies from the General Fund for the Community Development Block
Grant (CDBG) Fund, Section 8 Administration Fund and Pacific Pines Administration Fund were also
lower than projected. The Section 8 Administration Fund also received additional CARES Act funding to
subsidize administrative costs. Transfers out to internal service funds include the General Fund’s
contribution to the Self-Insurance fund. Appropriations for capital projects from the General Fund totaled
$4.8 million compared to $11.0 million in 2019.
Transfers out for debt service totaled $3.7 million which were flat compared to the previous year.
Analysis of Fund Balance and Changes in Fund Balance
Fund balance was projected to be $18.3 million as of June 30, 2020, a scheduled decrease of about $6.1
million. Actual fund balance was $27.2 million, or $8.9 million higher than projected; as mentioned above,
revenues were $4.7 million above projected and expenditures were $4.5 million under projected.
There was an excess of revenues over expenditures of $12.4 million. Factoring in transfers for debt
service payments of $3.7 million, capital expenditures of $4.8 million and other net transfer activity of
$1.1 million, the net result is an increase in total fund balance of $2.8 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, 2020 had a deficit fund balance of $13.2
million due to expected grant funding and commitments. The Capital Improvements Capital Projects Fund
had a total fund balance of $44.7 million at the end of Fiscal Year 2019-20.
CAPITAL ASSETS AND THE CAPITAL IMPROVEMENT PROGRAM
As of June 30, 2020, the City had approximately $281.7 million invested in a broad range of capital assets
including road and drainage systems, parks and beach facilities, public buildings, water and wastewater
treatment facilities, collection and distribution systems, and affordable housing stock. Of that amount,
$224.8 million is classified as capital assets under the category of governmental activities, and $56.9
million is classified as capital assets of business-type activities. For more detailed information on capital
assets activity refer to Note 7. In addition, there are $61.1 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.
16
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
Governmental Activities
Capital Assets: $224.8 million
The City has three Capital Improvements Capital Projects Funds to monitor capital improvements
projects for governmental activities. These projects include public facilities, acquisition of parkland and
park improvements, infrastructure, and certain City “work projects” such as multi-year consultant studies
that meet the criteria for inclusion as capital projects for budgeting purposes. The City uses a dollar
threshold of $100,000 and a useful life of five years or more in its evaluation for capitalizing a capital
expenditure. Eligible project costs are additions to construction in progress (CIP) at fiscal yearend. Costs
for completed projects are recorded as additions to the appropriate capital asset category at year end.
The City spent approximately $18.7 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 Cardiff Beach Living Shoreline Project also known as the Dune
Restoration project, the Leucadia Streetscape project, the El Portal Pedestrian/Bike Underpass project,
the Morning Sun Drive Sidewalk project, the El Camino Real Z Crossing project, the Leo Mullen Park
Turf Replacement project, General Mobility Improvement projects, the Technology Infrastructure
Replacement project, parkland and drainage improvements, and ongoing pavement overlay projects.
Business-type Activities
Capital Assets: $56.9 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 $56.9
million decreased slightly compared to the prior year’s amount of $58.7 million. During the year, the ESD
deleted CIP projects under the $100,000 threshold and capitalized CIP projects, which increased
accumulated depreciation. SDWD also deleted older CIP projects.
The City’s Affordable Housing Fund carries an investment of about $2.4 million in affordable housing
stock under the classification of utility, plant, vehicles and equipment. The City purchased 16 housing
units in 2004. There has not been any capital spending activity in this fund since then.
Investment in Joint Ventures: $61.1 million
The City’s water and wastewater enterprises each hold equity interests in joint ventures with other local
agencies.
17
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
SDWD holds an equity interest, along with Santa Fe Irrigation District, in the R.E. Badger Joint Facilities.
SDWD makes capital contributions each year for the replacement and improvement of the Joint Facilities,
which then is added to the investment account at the end of the fiscal year. SDWD also makes monthly
payments to cover its proportional share of annual operating costs.
SDWD also holds an equity interest in the R.E. Badger Water Facilities Financing Authority. The primary
reason for this investment is to provide financing for the acquisition and construction of capital
improvements related to the R.E. Badger Joint Facilities. SDWD has a proportional share of assets in the
debt service reserve only. Therefore, these resources are not available to SDWD for the funding of its
operations.
Cardiff Sanitary Division (CSD) holds an equity interest, along with the City of Solana Beach, in the San
Elijo Joint Powers Authority (SEJPA) Joint Facilities. CSD makes capital contributions each year for the
replacement and improvement of the SEJPA Joint Facilities, which is added to its investment account at
the end of the fiscal year. CSD also makes quarterly payments to cover its proportional share of annual
operating costs. The treatment facilities, also serving other local agencies, bill quarterly for their
proportional share of operations costs and capital improvements.
Encinitas Sanitary Division (ESD) holds an equity interest, along with five other local agencies, in the
Encina Wastewater Authority (EWA) Joint Facilities. ESD makes capital contributions each year for the
replacement and improvement of the EWA Joint Facilities. These capital contributions are additions to
the investment account at the end of the fiscal year. ESD also makes quarterly payments to cover its
proportional share of annual operating costs.
The City’s joint ventures in the Cardiff Sanitary Division and Encinitas Sanitary Division increased $1.8
million, which was offset by a decrease of $0.7 million in the City’s joint venture in the San Dieguito Water
District.
DEBT ISSUANCE AND ADMINISTRATION
The City has a total of $68.6 million of long-term obligations for both governmental and business-type
activities as shown in Note 8 of the basic financial statements. The governmental activities debt totaling
$43.8 million include $0.9 million in capital leases, and $42.9 million in bonded debt. Besides $43.8 million
in debt, the long-term obligations in governmental activities also includes $5.7 million in claims payable
and compensated absences. The capital leases consist of borrowings for the Civic Center Roof
Replacement project and fire apparatus vehicles. The business-type activities long-term obligation totals
$19.1 million and includes $18.9 million in bonded debt and $0.2 million in compensated absences. Of
the $62.7 million total debt that is due, $3.7 million is due within one year.
Governmental Activities $43.8 million
The majority of the City’s long-term debt is bonded debt issued in order to acquire and/or construct public
facilities including City Hall, the Public Library, the Encinitas Community Park and the Pacific View
property. Debt payments for all of these bonds are due semi-annually at fixed amounts, and the debt
18
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
matures at various times through 2045. The City’s total annual debt service of approximately $3.9 million
represents approximately five percent of annual General Fund operating revenues.
The City has a policy of utilizing lease/purchase financing for the acquisition of equipment costing more
than $100,000. The City is obligated under a lease/purchase agreement (a private placement with a
financial institution) for improvements made to City Hall in 2008 for the repair of the roof. The annual
payment on that lease is $183,556. Additionally, the City currently leases one fire engine vehicle and
paid one off during FY 2019-20. The annual lease payments in FY 2019-20 were $183,334.
Business-type Activities $18.9 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
$11,057,500. 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 in 2017 an upgrade to its issuer credit rating to AAA by
Standard & Poor’s (S&P). The City’s credit rating affirmed by S&P issued a credit rating of AA+ on the
City’s 2017 Lease Revenue bonds. Ratings for lease revenue bond issues are typically one notch lower
than the issuers’ rating due to the payment structure of the bond issue.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS
The City’s elected and appointed officials consider many economic factors when setting budgets,
including national, state and local economic conditions, trends in residential housing, and the unique
needs of the community. The Finance Department coordinates the development of the operating and
capital budgets presented by the City Manager to the City Council for consideration. The City adopts its
operating budget over a two-year cycle, with legal appropriations set for the first year only. The operating
and capital budgets for Fiscal Year 2020-21 were appropriated by the City Council in June 2020.
The FY 2019-20 actual results, when compared to the adopted projections and appropriations, showed
revenues above forecasts and expenditures under budget. FY 2020-21 revenues are expected to
decrease $3.0 million under FY 2019-20 actual levels. Expenditures are budgeted to decrease slightly
under FY 2019-20 levels and the capital expenditures budgeted to decrease $13.0 million than originally
expected due to continued economic uncertainty from the COVID-19 pandemic. Next year’s budget
includes a two percent adjustment to employee compensation, which is the largest expenditure category
of the General Fund budget.
19
City of Encinitas
Management’s Discussion and Analysis (Continued)
For the Year Ended June 30, 2020
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is intended to provide our residents, taxpayers, customers, and investors and
creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for
the monies it receives and manages. If you have questions about this report or need additional
information, please contact the Finance Department of the City of Encinitas, 505 South Vulcan Ave,
Encinitas, California 92024, telephone (760) 633-2600, or visit our website at www.encinitasca.gov and
review the Finance Department webpage.
20
BASIC FINANCIAL STATEMENTS
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22
GOVERNMENT-WIDE
FINANCIAL STATEMENTS
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24
City of Encinitas
Statement of Net Position
June 30, 2020
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:
Cash and investments (Note 3)85,284,831$ 49,614,387$ 134,899,218$
Restricted cash and investments with fiscal agent (Note 3)156 61,654 61,810
Receivables (Note 4)6,378,887 2,922,858 9,301,745
Interest receivable 341,598 193,016 534,614
Inventory and prepaid items 1,052,989 348,294 1,401,283
Total current assets 93,058,461 53,140,209 146,198,670
Noncurrent assets:
Internal balances 89,545 (89,545) -
Investments in joint ventures (Note 5)- 61,074,910 61,074,910
Long-term receivable (Note 6)483,825 - 483,825
Capital assets (Note 7):
Non-depreciable 81,553,360 10,222,397 91,775,757
Depreciable, net 143,216,748 46,751,714 189,968,462
Total capital assets, net 224,770,108 56,974,111 281,744,219
Total noncurrent assets 225,343,478 117,959,476 343,302,954
Total assets 318,401,939 171,099,685 489,501,624
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on bond refunding 306,583 - 306,583
Pension related deferred outflows of resources (Note 13)12,007,575 2,502,847 14,510,422
OPEB related deferred outflows of resources (Note 14)1,315,490 69,930 1,385,420
Total deferred outflows of resources 13,629,648 2,572,777 16,202,425
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 11,439,981 1,633,378 13,073,359
Interest payable 419,683 212,927 632,610
Unearned revenue 1,477,681 - 1,477,681
Deposits and other liabilities 3,391,179 523,124 3,914,303
Long-term liabilities - due within one year (Note 8)5,629,607 1,642,149 7,271,756
Total current liabilities 22,358,131 4,011,578 26,369,709
Noncurrent liabilities:
Long-term liabilities - due in more than one year (Note 8)43,911,131 17,413,670 61,324,801
Net pension liability (Note 13)49,825,466 7,577,802 57,403,268
Net OPEB liability (Note 14)6,781,455 225,019 7,006,474
Total noncurrent liabilities 100,518,052 25,216,491 125,734,543
Total liabilities 122,876,183 29,228,069 152,104,252
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding - 29,367 29,367
Pension related deferred inflows of resources (Note 13)2,873,994 589,305 3,463,299
OPEB related deferred inflows of resources (Note 14)1,431,887 43,199 1,475,086
Total deferred inflows of resources 4,305,881 661,871 4,967,752
NET POSITION
Net investment in capital assets 181,288,734 38,060,921 219,349,655
Restricted:
Community development 1,308,627 - 1,308,627
Debt service 167,350 2,435 169,785
Housing - 388,490 388,490
Capital projects 21,555,965 - 21,555,965
Unrestricted 528,847 105,330,676 105,859,523
Total net position 204,849,523$ 143,782,522$ 348,632,045$
Primary Government
See accompanying Notes to the Basic Financial Statements.
25
City of Encinitas
Statement of Activities and Changes in Net Position
For the Year Ended June 30, 2020
Operating Capital Total
Charges for Grants and Grants and Program
Functions/Programs Expenses Services Contributions Contributions Revenues
Primary government:
Governmental activities:
General government 17,335,001$ 1,804,550$ 3,000$ -$ 1,807,550$
Public safety 35,791,015 1,521,745 177,126 - 1,698,871
Public works 11,859,286 1,776 3,640,346 6,096,090 9,738,212
Planning services 7,027,696 3,417,094 377,282 - 3,794,376
Engineering services 6,309,896 970,837 - - 970,837
Parks and recreation 10,079,123 1,029,655 203,845 688,731 1,922,231
Interest on long-term debt 1,569,705 - - - -
Total governmental activities 89,971,722 8,745,657 4,401,599 6,784,821 19,932,077
Business-type activities:
Cardiff Sanitary Division 3,093,405 5,046,841 - 288,736 5,335,577
San Dieguito Water District 16,503,660 16,835,266 - 251,344 17,086,610
Encinitas Sanitary Division 3,271,260 2,744,193 - 53,099 2,797,292
Affordable Housing 1,676,260 270,931 1,246,133 - 1,517,064
Total business-type activities 24,544,585 24,897,231 1,246,133 593,179 26,736,543
Total primary government 114,516,307$ 33,642,888$ 5,647,732$ 7,378,000$ 46,668,620$
Program Revenues
See accompanying Notes to the Basic Financial Statements.
26
City of Encinitas
Statement of Activities and Changes in Net Position (Continued)
For the Year Ended June 30, 2020
Governmental Business-type
Functions/Programs Activities Activities Total
Primary government:
Governmental activities:
General government (15,527,451)$ -$ (15,527,451)$
Public safety (34,092,144) - (34,092,144)
Public works (2,121,074) - (2,121,074)
Planning services (3,233,320) - (3,233,320)
Engineering services (5,339,059) - (5,339,059)
Parks and recreation (8,156,892) - (8,156,892)
Interest on long-term debt (1,569,705) - (1,569,705)
Total governmental activities (70,039,645) - (70,039,645)
Business-type activities:
Cardiff Sanitary Division - 2,242,172 2,242,172
San Dieguito Water District - 582,950 582,950
Encinitas Sanitary Division - (473,968) (473,968)
Affordable Housing - (159,196) (159,196)
Total business-type activities - 2,191,958 2,191,958
(70,039,645) 2,191,958 (67,847,687)
General revenues:
Taxes:
Property taxes and documentary transfer taxes 51,251,719 1,159,681 52,411,400
Sales and use taxes 13,744,880 - 13,744,880
Transient occupancy taxes 2,383,060 - 2,383,060
Franchise taxes 2,539,090 - 2,539,090
Total taxes 69,918,749 1,159,681 71,078,430
Intergovernmental - unrestricted 182,449 - 182,449
Investment income 3,030,295 1,716,759 4,747,054
Rental income - 215,140 215,140
Gain on disposal of capital assets 36,013 - 36,013
Other 804,984 185,088 990,072
Transfers (18,666) 18,666 -
Total general revenues and transfers 73,953,824 3,295,334 77,249,158
Changes in net position 3,914,179 5,487,292 9,401,471
Net position:
Beginning of year 200,935,344 138,295,230 339,230,574
End of year 204,849,523$ 143,782,522$ 348,632,045$
Primary Government
and Changes in Net Position
Net (Expense) Revenue
See accompanying Notes to the Basic Financial Statements.
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FUND FINANCIAL STATEMENTS
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GOVERNMENTAL FUND
FINANCIAL STATEMENTS
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32
City of Encinitas
Balance Sheet
Governmental Funds
June 30, 2020
Capital Infrastructure
Improvements Improvements Other Total
General Capital Projects Special Revenue Governmental Governmental
Fund Fund Fund Funds Funds
ASSETS
Cash and investments 31,466,287$ 34,555,030$ 1,990,121$ 10,022,821$ 78,034,259$
Receivables 4,929,517 - 1,105,157 344,213 6,378,887
Interest receivable 246,671 - 16,936 77,991 341,598
Due from other funds (Note 9)1,419,861 13,584,028 - - 15,003,889
Inventory and prepaid items 254,793 - - - 254,793
Long-term receivable 33,039 - - 450,786 483,825
Restricted cash and investments 71 - - 85 156
Total assets 38,350,239$ 48,139,058$ 3,112,214$ 10,895,896$ 100,497,407$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND
FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities 7,201,884$ 3,425,347$ 10,011$ 426,006$ 11,063,248$
Unearned revenue 572,573 - 905,108 - 1,477,681
Due to other funds (Note 9)- - 14,411,678 217,819 14,629,497
Deposits and other liabilities 3,369,774 - - 21,405 3,391,179
Total liabilities 11,144,231 3,425,347 15,326,797 665,230 30,561,605
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - 1,026,107 486,644 1,512,751
Total deferred inflows of resources - - 1,026,107 486,644 1,512,751
Fund Balances:
Nonspendable 287,832 - - - 287,832
Restricted 167,265 26,361,345 - 9,744,022 36,272,632
Committed 16,208,039 18,352,366 - - 34,560,405
Unassigned 10,542,872 - (13,240,690) - (2,697,818)
Total fund balances 27,206,008 44,713,711 (13,240,690) 9,744,022 68,423,051
Total liabilities, deferred inflows
of resources, and fund balances 38,350,239$ 48,139,058$ 3,112,214$ 10,895,896$ 100,497,407$
Major Funds
See accompanying Notes to the Basic Financial Statements.
33
City of Encinitas
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position
June 30, 2020
Total Fund Balances - Total Governmental Funds 68,423,051$
Amounts reported for governmental activities in the Statement of Net Position were different because:
Capital assets used in governmental activities were not financial resources and therefore were
not reported in governmental funds (net of $3,573,508 reported in internal service funds).
Land 61,862,474
Land easements 2,443,333
Construction in progress 17,247,553
Public facilities 113,825,961
Vehicles, equipment and machinery 2,290,229
Infrastructure 125,243,023
Less: Accumulated depreciation (101,715,973)
Total capital assets adjustment 221,196,600
Deferred loss on refunding in the governmental activities were not financial resources and,
therefore, were not reported in governmental funds. 306,583
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.(419,683)
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
$373,264 reported in internal service funds):
Amount reported in Government-wide Statement of Net Position:
2008 Civic Center roof replacement lease (516,789)
2013 Community Park Bonds, net of unamortized premium of $70,080 (5,630,080)
2014 Moonlight Beach Tower Series A Bonds, net of unamortized discount of $25,929 (2,734,071)
2014 Pacific View Series B Bonds, net of unamortized discount of $130,167 (9,214,833)
2015 Library Refunding Bonds, net of unamortized premium of $625,125 (14,200,125)
2017 Park Refunding Bonds, net of unamortized premium of $1,068,795 (11,118,795)
Claims payable (3,243,070)
Compensated absences (2,509,711)
Total long-term liabilities (49,167,474)
Net pension liability is not due and payable in the current period and,therefore,is not required
to be reported in the governmental funds. (49,104,752)
Actuarially determined pension deferred outflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. 11,847,467
Actuarially determined pension deferred inflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. (2,841,191)
Net OPEB liability is not due and payable in the current period and,therefore,is not required
to be reported in the governmental funds. (6,652,607)
Actuarially determined OPEB deferred outflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. 1,290,496
Actuarially determined OPEB deferred inflows of resources are reported in the government-
wide statements but are not reported in the governmental funds. (1,404,681)
Unavailable revenue deferred inflows of resources are not available for the current period and,
therefore, are deferred in the governmental funds or not recorded in the governmental funds. 1,512,751
Internal service funds were used by management to charge the costs of risk management,
personnel support,fleet maintenance and vehicle replacement to individual funds.The assets
and liabilities of the internal service funds were included in governmental activities in the
Government-wide Statement of Net Position.9,862,963
Net position of governmental activities 204,849,523$
See accompanying Notes to the Basic Financial Statements.
34
City of Encinitas
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Funds
For the Year Ended June 30, 2020
Capital Infrastructure
Improvements Improvements Other Total
General Capital Projects Special Revenue Governmental Governmental
Fund Fund Fund Funds Funds
REVENUES:
Taxes and assessments 67,987,818$ -$ 489,481$ 2,587,262$ 71,064,561$
Licenses and permits 263,518 - - - 263,518
Intergovernmental 780,807 - 7,442,981 984,666 9,208,454
Development impact fees - - - 2,248,578 2,248,578
Charges for services 6,629,818 - - - 6,629,818
Fines, forfeitures and penalties 655,032 - - - 655,032
Use of money and property 2,810,704 - 64,813 854,049 3,729,566
Other 712,659 - - 525,475 1,238,134
Total revenues 79,840,356 - 7,997,275 7,200,030 95,037,661
EXPENDITURES:
Current:
General government 12,634,244 - 594,138 129,999 13,358,381
Public safety 32,656,252 - - 272,055 32,928,307
Public works 6,263,122 - - 1,129,619 7,392,741
Planning services 6,410,961 - - 208,762 6,619,723
Engineering services 2,784,486 - - 540,417 3,324,903
Parks and recreation 6,713,036 - - 1,246,264 7,959,300
Capital outlay 1,350 18,406,882 - 341,351 18,749,583
Debt service:
Principal - - - 2,025,045 2,025,045
Interest and fiscal charges - - - 1,695,251 1,695,251
Total expenditures 67,463,451 18,406,882 594,138 7,588,763 94,053,234
REVENUES OVER
(UNDER) EXPENDITURES 12,376,905 (18,406,882) 7,403,137 (388,733) 984,427
OTHER FINANCING SOURCES (USES):
Transfers in (note 9)2,617,441 13,929,114 174,514 4,008,281 20,729,350
Transfers out (note 9)(12,210,669) (798,073) (6,485,235) (3,628,937) (23,122,914)
Total other financing sources (uses)(9,593,228) 13,131,041 (6,310,721) 379,344 (2,393,564)
NET CHANGE IN FUND BALANCES 2,783,677 (5,275,841) 1,092,416 (9,389) (1,409,137)
FUND BALANCES:
Beginning of year 24,422,331 49,989,552 (14,333,106) 9,753,411 69,832,188
End of year 27,206,008$ 44,713,711$ (13,240,690)$ 9,744,022$ 68,423,051$
Major Funds
See accompanying Notes to the Basic Financial Statements.
35
City of Encinitas
Reconciliation of the Governmental Statement of Revenues, Expenditures, and
Changes in Fund Balances to the Government-wide Statement of Activities
and Changes in Net Position
For the Year Ended June 30, 2020
Net Change in Fund Balances - Total Governmental Funds (1,409,137)$
Amounts reported for governmental activities in the Statement of Activities were different because:
Governmental funds reported capital outlay as expenditures.However,in the Government-wide
Statement of Activities and Changes in Net Position,the cost of those assets was allocated over their
estimated useful lives as depreciation expense.This was the amount of capital assets recorded in the
current period. 13,821,634
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 $546,864
recorded in internal service funds). (7,688,065)
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 2,025,045
Amortization expenses were reported in the Government-wide Statement of Activities and Changes in Net
Position,but they did not require the use of current financial resources.Therefore,amortization expenses
were not reported as expenditures in the Governmental Funds.
Bond premium and discount 136,450
Deferred amounts on refunding (19,163)
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 (323,971)
Changes in claims payable (590,328)
Changes in the net pension liability (2,592,853)
Changes in the net OPEB liability 2,096,286
The net effect of various miscellaneous transactions involving pension plans (i.e.deferred outflow/inflow
amortization, contributions after the measurement date) increased Net Position. 22,284
The net effect of various miscellaneous transactions involving OPEB plans (i.e.deferred outflow/inflow
amortization, contributions after the measurement date) increased Net Position. (1,182,287)
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.20,910
A portion of deferred grant revenues are not available to pay for current period expenditures and,
therefore, are not recognized in the funds.(556,092)
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. 153,466
Change in net position of governmental activities 3,914,179$
See accompanying Notes to the Basic Financial Statements.
36
PROPRIETARY FUND
FINANCIAL STATEMENTS
37
City of Encinitas
Statement of Net Position
Proprietary Funds
June 30, 2020
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
ASSETS
Current assets:
Cash and investments 14,146,534$ 21,143,272$ 13,978,968$
Restricted cash and investments with fiscal agent - 2,435 -
Accounts and taxes receivable 91,744 2,794,349 35,805
Interest receivable 54,592 82,667 54,282
Inventory and prepaid items 5,052 233,226 4,295
Total current assets 14,297,922 24,255,949 14,073,350
Noncurrent assets:
Investment in joint ventures 34,943,710 19,892,372 6,238,828
Capital assets:
Land - 3,450,544 -
Public works facility right-of-use - 3,378,700 -
Construction in progress 3,152,158 31,104 209,891
Capacity rights, net - 165,365 -
Utility, plant, vehicles, and equipment, net 14,777,222 15,566,998 13,837,600
Total capital assets, net 17,929,380 22,592,711 14,047,491
Total noncurrent assets 52,873,090 42,485,083 20,286,319
Total assets 67,171,012 66,741,032 34,359,669
DEFERRED OUTFLOWS OF RESOURCES
Pension related deferred outflows of resources - 2,502,847 -
OPEB related deferred outflows of resources - 69,930 -
Total deferred outflows of resources - 2,572,777 -
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 41,256 959,923 630,500
Due to other funds (Note 9)- - -
Accrued interest payable 148,858 64,069 -
Deposits - 504,665 -
Compensated absences - due in one year - 76,868 -
Current portion of long-term debt 284,999 1,190,000 -
Total current liabilities 475,113 2,795,525 630,500
Noncurrent liabilities:
Capital leases payable - - -
Revenue bonds payable - due in more than one year - 2,472,486 -
Notes and mortgages payable - due in more than one year 11,597,425 2,330,000 -
Compensated absences - due in more than one year - 80,332 -
Net pension liability - 7,577,802 -
Net OPEB liability - 225,019 -
Total noncurrent liabilities 11,597,425 12,685,639 -
Total liabilities 12,072,538 15,481,164 630,500
DEFERRED INFLOWS OF RESOURCES
Deferred amount on refunding 29,367 - -
Pension related deferred inflows of resources - 589,305 -
OPEB related deferred inflows of resources - 43,199 -
Total deferred inflows of resources 29,367 632,504 -
NET POSITION
Net investment in capital assets 6,017,590 16,600,225 14,047,491
Restricted:
Debt service - 2,435 -
Housing - - -
Unrestricted 49,051,517 36,597,481 19,681,678
Total net position 55,069,107$ 53,200,141$ 33,729,169$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements
38
City of Encinitas
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2020
Non-major Governmental
Enterprise Fund Activities
Affordable Internal
Housing Total Service Funds
ASSETS
Current assets:
Cash and investments 345,613$ 49,614,387$ 7,250,572$
Restricted cash and investments with fiscal agent 59,219 61,654 -
Accounts and taxes receivable 960 2,922,858 -
Interest receivable 1,475 193,016 -
Inventory and prepaid items 105,721 348,294 798,197
Total current assets 512,988 53,140,209 8,048,769
Noncurrent assets:
Investment in joint ventures - 61,074,910 -
Capital assets:
Land - 3,450,544 -
Public works facility right-of-use - 3,378,700 -
Construction in progress - 3,393,153 -
Capacity rights, net - 165,365 -
Utility, plant, vehicles, and equipment, net 2,404,529 46,586,349 3,573,508
Total capital assets, net 2,404,529 56,974,111 3,573,508
Total noncurrent assets 2,404,529 118,049,021 3,573,508
Total assets 2,917,517 171,189,230 11,622,277
DEFERRED OUTFLOWS OF RESOURCES
Pension related deferred outflows of resources - 2,502,847 160,108
OPEB related deferred outflows of resources - 69,930 24,994
Total deferred outflows - 2,572,777 185,102
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 1,699 1,633,378 376,734
Due to other funds (Note 9)89,545 89,545 284,847
Accrued interest payable - 212,927 -
Deposits 18,459 523,124 -
Compensated absences - due in one year 6,167 83,035 -
Current portion of long-term debt 84,115 1,559,114 89,868
Total current liabilities 199,985 4,101,123 751,449
Noncurrent liabilities:
Capital leases payable - - 283,396
Revenue bonds payable - due in more than one year - 2,472,486 -
Notes and mortgages payable - due in more than one year 924,799 14,852,224 -
Compensated absences - due in more than one year 8,628 88,960 -
Net pension liability - 7,577,802 720,714
Net OPEB liability - 225,019 128,848
Total noncurrent liabilities 933,427 25,216,491 1,132,958
Total liabilities 1,133,412 29,317,614 1,884,407
DEFERRED INFLOWS OF RESOURCES
Deferred amount on refunding - 29,367 -
Pension related deferred inflows of resources - 589,305 32,803
OPEB related deferred inflows of resources - 43,199 27,206
Total deferred inflows - 661,871 60,009
NET POSITION
Net investment in capital assets 1,395,615 38,060,921 3,200,244
Restricted:
Debt service - 2,435 -
Housing 388,490 388,490 -
Unrestricted - 105,330,676 6,662,719
Total net position 1,784,105$ 143,782,522$ 9,862,963$
See accompanying Notes to the Basic Financial Statements.
39
City of Encinitas
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2020
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
OPERATING REVENUES:
Charges for services 5,046,841$ 16,783,363$ 2,744,193$
Rental income - 110,176 -
Interfund revenues - 51,903 -
Intergovernmental - - -
Other revenues - 7,907 3,660
Total operating revenues 5,046,841 16,953,349 2,747,853
OPERATING EXPENSES:
Housing assistance payments - - -
Source of supply - 5,495,963 -
General operations and maintenance 1,038,339 6,494,446 636,643
Facility operations and maintenance 1,645,980 2,406,285 780,694
General and administrative 185,128 - 103,976
Depreciation 443,689 805,350 766,955
Insurance and claims 32,100 29,411 29,397
Total operating expenses 3,345,236 15,231,455 2,317,665
OPERATING INCOME (LOSS)1,701,605 1,721,894 430,188
NONOPERATING REVENUES (EXPENSES):
Investment income 482,406 742,550 485,103
Property taxes - 1,159,681 -
Operating grants - - -
Net change from joint ventures 749,640 (1,025,142) (594,909)
Gain (loss) on disposal of capital assets (45,870) - (358,686)
Amortization of bond premium 98,880 74,372 -
Interest expense (451,939) (247,063) -
Total nonoperating revenues (expenses)833,117 704,398 (468,492)
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 2,534,722 2,426,292 (38,304)
Capital contributions 288,736 251,344 53,099
Transfers in (Note 9)- 12,433 -
Transfers out (Note 9)- - -
Total capital contributions and transfers 288,736 263,777 53,099
CHANGES IN NET POSITION 2,823,458 2,690,069 14,795
NET POSITION:
Beginning of year 52,245,649 50,510,072 33,714,374
End of year 55,069,107$ 53,200,141$ 33,729,169$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements.
40
City of Encinitas
Statement of Revenues, Expenses, and Changes in Net Position (Continued)
Proprietary Funds
For the Year Ended June 30, 2020
Non-major
Enterprise Fund Governmental
Activities
Affordable Internal
Housing Total Service Funds
OPERATING REVENUES:
Charges for services -$ 24,574,397$ -$
Rental income 104,964 215,140 -
Interfund revenues 111,666 163,569 2,622,721
Intergovernmental 159,265 159,265 -
Other revenues 269 11,836 390,487
Total operating revenues 376,164 25,124,207 3,013,208
OPERATING EXPENSES:
Housing assistance payments 1,283,217 1,283,217 -
Source of supply - 5,495,963 -
General operations and maintenance 129,058 8,298,486 1,063,042
Facility operations and maintenance - 4,832,959 -
General and administrative 146,283 435,387 2,202,552
Depreciation 100,538 2,116,532 546,864
Insurance and claims - 90,908 1,449,287
Total operating expenses 1,659,096 22,553,452 5,261,745
OPERATING INCOME (LOSS)(1,282,932) 2,570,755 (2,248,537)
NONOPERATING REVENUES (EXPENSES):
Investment income 6,700 1,716,759 -
Property taxes - 1,159,681 -
Operating grants 1,246,133 1,246,133 -
Net change from joint ventures - (870,411) -
Gain (loss) on disposal of capital assets - (404,556) 39,667
Amortization of bond premium - 173,252 -
Interest expense (17,164) (716,166) (12,562)
Total nonoperating revenues (expenses)1,235,669 2,304,692 27,105
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (47,263) 4,875,447 (2,221,432)
Capital contributions - 593,179 -
Transfers in (Note 9)23,633 36,066 2,506,898
Transfers out (Note 9)(17,400) (17,400) (132,000)
Total capital contributions and transfers 6,233 611,845 2,374,898
CHANGES IN NET POSITION (41,030) 5,487,292 153,466
NET POSITION:
Beginning of year 1,825,135 138,295,230 9,709,497
End of year 1,784,105$ 143,782,522$ 9,862,963$
See accompanying Notes to the Basic Financial Statements.
41
City of Encinitas
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2020
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users 4,972,303$ 16,229,770$ 2,690,408$
Cash received from other funds - 51,903 -
Payments to employees (3,235) (3,034,505) -
Payments to suppliers for goods and services (2,910,581) (11,892,360) (1,587,658)
Other operating revenues - 7,907 3,660
Net cash provided by (used in) operating activities 2,058,487 1,362,715 1,106,410
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition of capital assets (487,047) (50,215) (220,946)
Capital contributions received - connection/capacity fees 288,736 168,300 53,099
Principal payments on long-term debt (275,000) (1,135,000) -
Interest payments on long-term debt (454,621) (260,119) -
Capital related payments to other agencies (668,791) (282,309) (976,757)
Proceeds received from disposal of capital assets - - -
Net cash (used in) capital and related financing activities (1,596,723) (1,559,343) (1,144,604)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Operating grants - - -
Proceeds from property taxes - 1,159,682 -
Cash received from other funds - 12,433 -
Cash paid to other funds - --
Net cash provided by (used in) noncapital financing activities - 1,172,115 -
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest income 482,406 742,550 485,103
Net cash provided by investing activities 482,406 742,550 485,103
Net increase (decrease) in cash and cash equivalents 944,170 1,718,037 446,909
CASH AND CASH EQUIVALENTS:
Beginning of year 13,202,364 19,427,670 13,532,059
End of year 14,146,534$ 21,145,707$ 13,978,968$
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO
STATEMENT OF NET POSITION:
Cash and investments 14,146,534$ 21,143,272$ 13,978,968$
Restricted cash and investments with fiscal agent - 2,435 -
Total cash and cash equivalents 14,146,534$ 21,145,707$ 13,978,968$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements.
42
City of Encinitas
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2020
Cardiff San Dieguito Encinitas
Sanitary Water Sanitary
Division District Division
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss)1,701,605$ 1,721,894$ 430,188$
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation 443,689 805,350 766,955
Changes in operating assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Changes in assets – (increase) decrease:
Accounts and taxes receivable (74,538) (663,769) (53,785)
Inventory and prepaid items (1,427) 3,730 (1,214)
Change in deferred outflows of resources – (increase) decrease:
OPEB-related deferred outflows - (2,947) -
Pension-related deferred outflows - (1,049,669) -
Changes in liabilities – increase (decrease):
Accounts payable and accrued liabilities 26,540 (88,935) (35,734)
Due to other funds - - -
Deposits (37,382) (15,318) -
Compensated absences - 9,663 -
Net OPEB liability - (62,087) -
Net pension liability - 504,751 -
Change in deferred inflows of resources – increase (decrease):
OPEB-related deferred inflows - 33,904 -
Pension-related deferred inflows - 166,148 -
Total adjustments 356,882 (359,179) 676,222
Net cash provided by (used in) operating activities 2,058,487$ 1,362,715$ 1,106,410$
NON-CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Amortization of original issue premium 98,880$ 74,372$ -$
Donation of capital assets - 83,044 -
Total non-cash capital and related financing activities 98,880$ 157,416$ -$
Major Enterprise Funds
See accompanying Notes to the Basic Financial Statements.
43
City of Encinitas
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2020
Non-major
Enterprise Fund Governmental
Activities
Affordable Internal
Housing Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users 292,937$ 24,185,418$ 3,013,561$
Cash received from other funds 111,666 163,569 -
Payments to employees (135,186) (3,172,926) (1,469,812)
Payments to suppliers for goods and services (1,433,382) (17,823,981) (2,891,142)
Other operating revenues 269 11,836 -
Net cash provided by (used in) operating activities (1,163,696) 3,363,916 (1,347,393)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition of capital assets - (758,208) (808,160)
Capital contributions received - connection/capacity fees - 510,135 -
Principal payments on long-term debt (82,715) (1,492,715) (170,771)
Interest payments on long-term debt (17,164) (731,904) (12,562)
Capital related payments to other agencies - (1,927,857) -
Proceeds received from disposal of capital assets - - 39,667
Net cash (used in) capital and related financing activities (99,879) (4,400,549) (951,826)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Operating grants 1,246,133 1,246,133 -
Proceeds from property taxes - 1,159,682 -
Cash received from other funds 43,763 56,196 2,506,898
Cash paid to other funds (17,400) (17,400) (132,000)
Net cash provided by (used in) noncapital financing activities 1,272,496 2,444,611 2,374,898
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest income 6,700 1,716,759 -
Net cash provided by investing activities 6,700 1,716,759 -
Net increase (decrease) in cash and cash equivalents 15,621 3,124,737 75,679
CASH AND CASH EQUIVALENTS:
Beginning of year 389,211 46,551,304 7,174,893
End of year 404,832$ 49,676,041$ 7,250,572$
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO
STATEMENT OF NET POSITION:
Cash and investments 345,613$ 49,614,387$ 7,250,572$
Restricted cash and investments with fiscal agent 59,219 61,654 -
Total cash and cash equivalents 404,832$ 49,676,041$ 7,250,572$
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, 2020
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)(1,282,932)$ 2,570,755$ (2,248,537)$
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation 100,538 2,116,532 546,864
Changes in operating assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:
Changes in assets – (increase) decrease:
Accounts and taxes receivable 28,707 (763,385) 353
Inventory and prepaid items (12,998) (11,909) (753,991)
Change in deferred outflows of resources – (increase) decrease:
OPEB-related deferred outflows - (2,947) (24,994)
Pension-related deferred outflows - (1,049,669) (160,108)
Changes in liabilities – increase (decrease):
Accounts payable and accrued liabilities 329 (97,800) 98,602
Due to other funds - - 284,847
Deposits 248 (52,452) -
Compensated absences 2,412 12,075 -
Net OPEB liability - (62,087) 720,714
Net pension liability - 504,751 128,848
Change in deferred inflows of resources – increase (decrease):
OPEB-related deferred inflows - 33,904 27,206
Pension-related deferred inflows - 166,148 32,803
Total adjustments 119,236 793,161 901,144
Net cash provided by (used in) operating activities (1,163,696)$ 3,363,916$ (1,347,393)$
NON-CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Amortization of original issue premium -$ 173,252$ -$
Donation of capital assets - 83,044 -
-$ 256,296$ -$
See accompanying Notes to the Basic Financial Statements.
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46
FIDUCIARY FUND
FINANCIAL STATEMENTS
Agency Fund –These funds are used to account for money and property held by the City as trustee or
custodian.It is custodial in nature (assets equal liabilities).These funds include a Community Facilities (Mello-
Roos) District.
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48
City of Encinitas
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2020
Agency
Fund
ASSETS
Cash and investments (Note 3)2,443,480$
Restricted cash and investments with fiscal agent (Note 3)1,981,550
Interest receivable 9,555
Current assessments receivable 8,430
Total assets 4,443,015$
LIABILITIES
Accounts payable 1,875$
Due to bondholders 4,441,140
Total liabilities 4,443,015$
See accompanying Notes to the Basic Financial Statements.
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50
NOTES TO THE BASIC
FINANCIAL STATEMENTS
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52
City of Encinitas
Notes to the Basic Financial Statements
For the Year Ended June 30, 2020
Note 1 – Reporting Entity
The City of Encinitas (the “City”) was incorporated on October 1, 1986, pursuant to an election
approving the San Dieguito Reorganization Plan, which consisted primarily of the detachment of
territory from the Cardiff area and the annexation of the same territory to the City of Solana Beach.
The City is governed by a City Council consisting of a mayor and four council members under the
Council-Manager form of government.
In evaluating how to define the City for financial reporting purposes, management has considered all
potential component units. The primary criteria for including a potential component unit within the
reporting entity are the governing body’s financial accountability and a financial benefit or burden
relationship and whether it is misleading to exclude. A primary government is financially accountable
and shares a financial benefit or burden relationship if it appoints a voting majority of an organization’s
governing body and it is able to impose its will on the organization, or if there is a potential for the
organization to provide specific financial benefits to, or impose specific financial burdens on the primary
government. A primary government may also be financially accountable if an organization is fiscally
dependent on the primary government regardless of whether the organization has a separately elected
governing board, a governing board appointed by a higher level of government, or a jointly appointed
board, and there is a potential for the organization to provide specific financial benefits to, or impose
specific financial burdens on the primary government.
Blended Component Units
Although the following are legally separate from the City, they have been “blended” as though they are
part of the City because the component unit’s governing body is substantially the same as the City’s
and there is a financial benefit or burden relationship between the City and the component unit;
management of the City has operational responsibilities for the component units; and/or the component
units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost
exclusively, benefits the City, even though it does not provide services directly to it.
The San Dieguito Water District (“SDWD”) was formed in 1922 under the laws of the State of California
to supply water services to the central western portion of San Diego County. Certain management,
maintenance, and operating functions are the responsibility of the City, which bills periodically for these
services.
The Encinitas Housing Authority (the “EHA”) was formed on January 26, 1994, under the laws of the
State of California to provide housing assistance to citizens of the City.
The Encinitas Public Financing Authority (the “EPFA”) was formed on November 6, 1991, by the City
and SDWD as a Joint Powers Authority under the laws of the State of California to purchase, finance,
and lease certain real property to the members. The member agencies are the City and the SDWD.
The following specific criteria were used in determining the status of these component units:
Members of the City Council also act as the governing body of the EHA, the EPFA and
SDWD.
The City, the EHA, the EPFA and SDWD are financially interdependent.
53
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 1 – Reporting Entity (Continued)
Blended Component Units (Continued)
The EHA, the EPFA and SDWD are managed, at least in part, by employees of the City,
who provide various support functions including financial reporting and investment
decisions.
Separate financial statements for SDWD are available at the City's administrative office. Separate
financial statements are not required or prepared for the EHA and the EPFA.
Note 2 – Summary of Significant Accounting Policies
A. Basis of Presentation
Financial statement presentation follows the recommendations promulgated by the Governmental
Accounting Standards Board (“GASB”) commonly referred to as accounting principles generally
accepted in the United States of America (“U.S. GAAP”). GASB is the accepted standard-setting
body for establishing governmental accounting and financial reporting standards.
B. Measurement Focus, Basis of Accounting and Financial Statements Presentation
The accounts of the City are organized on the basis of funds, each of which is considered a
separate accounting entity. The operations of each fund are accounted for by providing a separate
set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and
expenditures or expenses, as appropriate. Fund accounting segregates funds according to their
intended purpose and is used to aid management in demonstrating compliance with finance-related
legal and contractual provisions. The minimum number of funds is maintained in accordance with
legal and managerial requirements.
The Statement of Net Position/Balance Sheet reports separate sections for Deferred Outflows of
Resources, and Deferred Inflows of Resources, when applicable.
Deferred Outflows of Resources represent outflows of resources (consumption of net
position) that apply to future periods and, therefore, will not be recognized as an expense
until that time. The City reports deferred loss on refunding, deferred outflows related to
pensions, and Other Post- Employment Benefits (OPEB) in this category.
Deferred Inflows of Resources represent inflows of resources (acquisition of net position)
that apply to future periods and, therefore, are not recognized as revenue until that time. The
City has two types of items that qualify for reporting in this category. The first item is
deferred gain on refunding, deferred inflows related to pensions and OPEB. The second
item, unavailable revenue, is reported only in the governmental funds balance sheet. The
governmental funds report unavailable revenues from grants. This amount is deferred and
recognized as an inflow of resources in the period the amount becomes available.
54
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 – Summary of Significant Accounting Policies (Continued)
B. Measurement Focus, Basis of Accounting and Financial Statements Presentation
(Continued)
Government-wide Financial Statements
The City’s Government-wide Financial Statements include a Statement of Net Position, and a
Statement of Activities and Changes in Net Position. These statements present summaries of
governmental and business-type activities for the City accompanied by a total column. Fiduciary
activities of the City are not included in these statements.
These financial statements are presented on an “economic resources” measurement focus and the
accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital
assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying
Statement of Net Position. The Statement of Activities presents changes in Net Position. Under
the accrual basis of accounting, revenues are recognized in the period in which they are earned
while expenses are recognized in the period in which the liability is incurred.
Certain types of transactions are reported as program revenues for the City in three categories:
Charges for services
Operating grants and contributions
Capital grants and contributions
Certain eliminations have been made in regard to interfund activities, payables and receivables.
All internal balances in the Statement of Net Position have been eliminated except those
representing balances between the governmental activities and the business-type activities, which
are presented as internal balances and eliminated in the total primary government column. In the
Statement of Activities and Changes in Net Position, internal service fund transactions have been
eliminated; however, those transactions between governmental and business-type activities have
not been eliminated. The following interfund activities have been eliminated:
Due to/from other funds
Transfers in/out
Government Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues,
Expenditures, and Changes in Fund Balances for all major governmental funds and non-major
funds aggregated. An accompanying schedule is presented to reconcile and explain the differences
in Net Position as presented in these statements to the Net Position presented in the Government-
wide Financial Statements. The City has presented all major funds that met the applicable criteria.
All governmental funds are accounted for on a spending or "current financial resources"
measurement focus and the modified accrual basis of accounting. Accordingly, only current assets
and current liabilities are included on the Balance Sheet. The Statement of Revenues,
Expenditures, and Changes in Fund Balances presents increases (revenues and other financing
sources) and decreases (expenditures and other financing uses) in fund balances.
55
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
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 that revenues subject to accrual
(generally 60 days after year end) are recognized when earned. The primary revenue sources,
which have been treated as susceptible to accrual by the City, are property taxes, transient
occupancy taxes, franchise taxes, sales tax, licenses, intergovernmental revenues and other taxes.
Expenditures are recorded in the accounting period in which the related fund liability is incurred.
The Reconciliation of the Fund Financial Statements to the Government-wide Financial Statements
is provided to explain the differences.
The City reports the following major Governmental Funds:
The General Fund is used to account for resources which are not required to be accounted for
in another fund. The fund includes the general activities of the City and other administrative
functions.
The Capital Improvements Capital Projects Fund is used to account for financial resources to
be used for the acquisition or construction of major property, equipment, or facilities which are
generally financed by governmental funds.
The Infrastructure Improvements Special Revenue Fund is used to account for financial
resources from state and federal grants which are primarily to fund operations and capital
improvements.
Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of
Revenues, Expenses, and Changes in Net Position, and a Statement of Cash Flows for each major
Proprietary Fund. A separate column representing Internal Service Funds is also presented in these
statements. However, internal service balances and activities have been combined with the
governmental activities in the Government-wide Financial Statements. The City’s Internal Service
Funds include four individual funds which provide services directly to other City funds. These areas
of service include Risk Management, Wastewater Support, Vehicle Maintenance, and Vehicle
Replacement.
Proprietary funds are accounted for using the "economic resources" measurement focus and the
accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent)
are included on the Statement of Net Position.
56
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 – Summary of Significant Accounting Policies (Continued)
B. Measurement Focus, Basis of Accounting and Financial Statements Presentation
(Continued)
Proprietary Fund Financial Statements (Continued)
The Statement of Revenues, Expenses, and Changes in Net Position presents increases
(revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting,
revenues are recognized in the period in which they are earned while expenses are recognized in
the period in which the liability is incurred. In these funds, receivables have been recorded as
revenue and provisions have been made for uncollectible amounts.
Operating revenues in the proprietary funds are those revenues that are generated from the primary
operations of the fund. All other revenues are reported as non-operating revenues. Operating
expenses are those expenses that are essential to the primary operations of the fund. All other
expenses are reported as non-operating expenses.
The City reports the following major proprietary funds:
The Cardiff Sanitary Division (“CSD”) Enterprise Fund provides wastewater collection and
treatment services to approximately 6,400 customers in the southern portion of the City.
The San Dieguito Water District (“SDWD”) Enterprise Fund provides potable and reclaimed
water services to approximately 11,000 customers in Encinitas.
The Encinitas Sanitary Division (“ESD”) Enterprise Fund provides wastewater collection
and treatment services to approximately 4,000 customers in the northern portion of the City.
Fiduciary Fund Financial Statements
Fiduciary Fund Financial Statements are accounted for according to the nature of the fund. The City
has only Agency funds, which are purely custodial in nature (assets equal liabilities) and thus, do
not involve the measurement of the results of operations. These funds are accounted for on the
accrual basis of accounting.
The Agency 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.
Highly liquid market investments with maturities of one year or less at time of purchase are stated at
amortized cost. All other investments are stated at fair value. Market value is used as fair value for
those securities for which market quotations are readily available.
57
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 – Summary of Significant Accounting Policies (Continued)
C. Cash, Cash Equivalents, and Investments (Continued)
The Statement of Cash Flows requires presentation of “cash and cash equivalents”. For the
purposes of the statement of cash flows, the City considers all proprietary fund pooled cash and
investments as “cash and cash equivalents,” as such funds are available to the various funds as
needed.
Certain disclosure requirements, if applicable, for deposits and investment risks in the following
areas:
Interest rate risk
Credit risk
o Overall
o Custodial credit risk
o Concentration of credit risk
Foreign currency risk
In addition, other disclosures are specified including use of certain methods to present deposits and
investments, highly sensitive investments, credit quality at year end and other disclosures.
D. Restricted Cash and Investments with Fiscal Agents
Cash and investments with fiscal agents are restricted due to limitations on their use by bond
covenants. Fiscal agents acting on behalf of the City hold investment funds arising from the
proceeds of long-term debt issuances. The funds may be used for specific capital outlays or for the
payment of certain bonds and have been invested only as permitted by specific State statutes or
applicable City ordinance, resolution or bond indenture.
E. Fair Value Measurement
Certain assets and liabilities are required to be reported at fair value. The fair value framework
provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3
measurements). The three levels of fair value hierarchy are described as follows:
Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or
liabilities in active markets.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly and fair value is determined through the use of models or other
valuation methodologies including:
Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets or liabilities in markets that are inactive;
Inputs other than quoted prices that are observable for the asset or liability;
Inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
58
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 – Summary of Significant Accounting Policies (Continued)
E. Fair Value Measurement (Continued)
Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value
measurement. These unobservable inputs reflect the City’s own assumptions about the inputs
market participants would use in pricing the asset or liability (including assumptions about risk).
These unobservable inputs are developed based on the best information available in the
circumstances and may include the City’s own data.
F. Receivables
Receivables include such items as taxes, intergovernmental revenues, charges for services,
miscellaneous accounts receivable, and interest receivable. No allowance for doubtful accounts has
been established, as the City believes all amounts are considered to be collectible in the normal
course of business.
G. Investments in Joint Ventures
The City’s Cardiff Sanitary Division, San Dieguito Water District, and Encinitas Sanitary Division
(the “City agencies”) participate in joint ventures with other local agencies, generally to provide
water and wastewater treatment more efficiently. Each entity has an ownership interest in the
respective joint facilities, which are accounted for under the equity method of accounting. The City
agencies pay for the fair share of operating costs and make capital contributions for major
maintenance and the upgrade or construction of facilities. The City agencies also record their share
of the results of operations for these joint ventures. Refer to Note 5, Investment in Joint Ventures.
H. Inventory and Prepaid Items
Inventory applies only to SDWD and consists of water meters and other material used in the repair
of capital facilities. Inventory is valued at average-cost using the first-in first-out basis. Prepaid
items are payments made to vendors for services that will benefit periods beyond the fiscal year
ended. The cost of inventory and prepaids are recorded as expenditures/expenses when
consumed rather than purchased.
I. Capital Assets
Capital assets are valued at historical cost or estimated historical cost if the actual historical cost
was not available. Donated capital assets are valued at their acquisition value on the date donated.
City policy has set the capitalization threshold for reporting capital assets at $5,000 for non-
infrastructure assets and $100,000 for infrastructure assets. Depreciation is recorded on a straight-
line basis over estimated useful lives of the assets as follows:
Structures and improvements 20 - 45 years
Equipment, machinery and vehicles 5 - 20 years
Infrastructure 20 - 50 years
Collection and distribution systems 50 years
The City defines infrastructure as the basic physical assets that allow the City to function.
59
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 – Summary of Significant Accounting Policies (Continued)
I. Capital Assets (Continued)
Governmental fund capital assets include land, land easements, construction in progress, public
facilities (buildings and building improvements), vehicles, equipment and machinery, and
infrastructure assets (e.g., roads, streets and sidewalks, bridges, curbs and gutters, drainage
systems, lighting systems and similar assets).
Proprietary fund capital assets include, land easements, public works facility right of use,
construction in progress, structures and improvements, collection and distribution systems,
machinery and equipment, and capacity rights, which are stated at cost. Contributed assets, which
are principally collection and distribution lines, are stated at cost or estimated acquisition value on
the date of donation.
J. Deposit Liabilities
The City collects deposits from homeowners and commercial enterprises as surety for the payment
of fees and other costs related to planning and engineering services provided by the City. The City
collects two types of deposits: (1) Application Deposits and (2) Security Deposits. Application
deposits are collected on certain projects for which a fee for services has not been established. As
costs for these projects are incurred by the City, the applicant's deposit balance is adjusted and
revenue (including applicable overhead charges) is recognized. Expenses incurred in excess of the
deposit amounts are billed to the applicant. Any surplus at project completion is returned to the
applicant. Security deposits are collected from the applicant to guarantee required performance.
These may either be in cash or in the form of non-cash, such as performance bonds or letters of
credit. The amount of cash deposits on hand as of June 30, 2020 is reported as a current liability in
the Statement of Net Position and Balance Sheets. Noncash security deposits are not reported as
liabilities, as the corresponding surety is not an asset of the City.
K. Unearned Revenue
Unearned revenue recorded in the government-wide statement of net position for governmental
activities and the governmental fund financial statements consist of federal and state capital grants,
representing voluntary non-exchange transactions, for which advance payments have been
received from the provider for which eligibility requirements, other than timing requirements, have
not been satisfied.
Unearned revenue recorded in the government-wide statement of net position for business-type
activities and the proprietary fund financial statements generally consist of program fees collected
from customers prior to the statement of net position date for recreation programs that begin in the
next fiscal year or donations for capital or work projects, for which the related expenses have not
yet been incurred.
L. Long-Term Debt
For the government-wide financial statements and proprietary fund financial statements, long-term
debt and other financial obligations are reported as liabilities, net of bond premiums or discounts.
60
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 – Summary of Significant Accounting Policies (Continued)
L. Long-Term Debt (Continued)
Bond premiums and discounts are amortized over the life of the bonds using the straight-line
method. Issuance costs are reported as expense when incurred.
Governmental fund financial statements do not present long-term debt but are shown in the
Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net
Position.
M. Arbitrage Rebate Requirement
The City is subject to the Internal Revenue Code (“IRC”) Section 148(f), related to its tax-exempt
revenue bonds. The IRC requires that investment earnings on gross proceeds of any revenue
bonds that are in excess of the amount prescribed be surrendered to the Internal Revenue Service.
The City had no rebate liability for arbitrage as of June 30, 2020.
N. Claims Liabilities
The City accounts for material claims and judgments outstanding at year end. When it is probable
that a claim liability has been incurred at year end, and the amount of the loss can be reasonably
estimated, the City records the estimated loss.
O. Compensated Absences
The City’s policy permits its non-fire employees to accumulate not more than two times their current
annual vacation allotment. Fire employees can accrue up to a maximum of 720 hours of vacation,
depending on the length of employment with the City. Non-fire employees are compensated five
days of sick leave per year with no balances accruing upon separation of employment. Fire
employees may accrue up to 240 hours of sick leave. The combined unused vacation and sick pay
will be paid to the employee or his/her beneficiary upon leaving the City’s employment. The amount
due will be determined using the salary/wage rate in effect at the time of separation.
Government-wide Financial Statements – For governmental and business-type activities,
compensated absences are recorded as expenses and liabilities as incurred.
Fund Financial Statements – In governmental funds, compensated absences are recorded as
expenditures in the years paid, as it is the City’s policy to liquidate any unpaid compensated
absences at June 30 from future resources, rather than currently available financial resources.
The General Fund is typically used to liquidate compensated absences. In proprietary funds,
compensated absences are expensed to the various funds in the period they are earned, and
such fund’s share of the unpaid liability is recorded as a long-term liability of the fund.
61
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 – Summary of Significant Accounting Policies (Continued)
P. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred
inflows of resources related to pensions, and pension expense, information about the fiduciary net
position of the plans and additions to/deductions from the plans’ fiduciary net position have been
determined on the same basis as they are reported by the plans (Note 13). For this purpose, benefit
payments (including refunds of employee contributions) are recognized when due and payable in
accordance with benefit terms. Investments are reported at fair value.
The following timeframes are used for pension reporting:
Valuation date June 30, 2018
Measurement Date June 30, 2019
Measurement Period July 1, 2018 to June 30, 2019
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. The difference between projected and actual earnings is amortized straight-line
over 5 years. All other amounts are amortized straight-line over the average expected remaining
service lives of all members that are provided with benefits (active, inactive, and retired) as of the
beginning of the measurement period.
The obligations for net pension liability and OPEB are primarily liquidated from the General Fund.
There is no fixed payment schedule for these liabilities
Q. Other Post-Employment Benefits
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred
inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net
position of the plans and additions to/deductions from the plans’ fiduciary net position have been
determined on the same basis as they are reported by the plans (Note 14).
The following timeframes are used for OPEB reporting:
Valuation Date June 30, 2019
Measurement Date June 30, 2019
Measurement Period July 1, 2018 - June 30, 2019
R. Net Position
For government-wide and proprietary fund financial statements, net position represents the
difference between all other elements in the statement of net position and should be displayed in
the following three components.
62
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 – Summary of Significant Accounting Policies (Continued)
R. Net Position (Continued)
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.
S. Fund Balances
In governmental fund financial statements, fund balances are categorized as follows:
Non-spendable – Items that cannot be spent because they are not in spendable form, such
as prepaid items and inventories, and items that are legally or contractually required to be
maintained intact, such as principal of an endowment or revolving loan funds.
Restricted – Restricted fund balances encompass the portion of net fund resources subject
to externally enforceable legal restrictions. This includes externally imposed restrictions by
creditors, such as through debt covenants, grantors, contributors, laws or regulations of
other governments, as well as restrictions imposed by law through constitutional provisions
or enabling legislation.
Committed – Committed fund balances encompass the portion of net fund resources, the
use of which is constrained by limitations that the government imposes upon itself at its
highest level of decision making, normally the governing body, and that remain binding
unless removed in the same manner. Adoption of a resolution by the City Council is required
to commit resources or rescind the commitment.
Assigned – Assigned fund balances encompass the portion of net fund resources reflecting
the government’s intended use of resources. Assignment of resources can be done by the
highest level of decision making or by a committee or official designated for that purpose.
The City Council adopted a resolution contained within the annual budget that delegates the
authority to the Director of Finance to assign fund balance amounts in the annual financial
statements.
63
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 – Summary of Significant Accounting Policies (Continued)
S. Fund Balances (Continued)
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.
T. Property Taxes
Property taxes are levied on July 1 and are payable in two installments: November 1 and February
1 of each year. Property taxes become delinquent on December 10 and April 10, for the first and
second installments, respectively. The lien date is January 1. The County of San Diego, California
(County) bills and collects property taxes and remits them to the City according to a payment
schedule established by the County.
The County is permitted by State law to levy taxes at one percent of full market value (at time of
purchase). The City receives a share of this basic tax levy.
Property tax revenue is recognized in the fiscal year for which the taxes have been levied, provided
the taxes are received within 60 days after the end of the fiscal year. Property taxes received after
this date are not considered available as a resource that can be used to finance the current year
operations of the City and therefore, are not recorded as revenue until collected.
No allowance for doubtful accounts on property taxes receivable was considered necessary.
U. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of the contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.
64
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 2 – Summary of Significant Accounting Policies (Continued)
V. Accounting Changes
Upcoming Governmental Accounting Standards Implementation
The City is currently analyzing its accounting practices to determine the potential impact on the
financial statements for the following GASB statements:
GASB Statement No. 87 – “Leases,” effective for reporting periods beginning after June
15, 2021.
GASB Statement No. 89 – “Accounting for Interest Cost Incurred before the End of a
Construction Period,” effective for reporting periods beginning after December 15, 2020.
GASB Statement No. 91 – “Conduit Debt Obligations,” effective for reporting period
beginning after December 15, 2021.
GASB Statement No. 92 – “Omnibus 202,” effective for reporting period beginning after
June 15, 2021.
GASB Statement No. 93 – “Replacement of Interbank Offered Rates,” effective for
reporting period beginning after June 15, 2021.
GASB Statement No. 94 – “Public-Private and Public-Public partnerships and Availability
Payment Arrangements,” effective for reporting period beginning after June 15, 2022.
GASB Statement No. 96 – “Subscription-Based Information Technology Arrangements,”
effective for reporting period beginning after June 15, 2022.
GASB Statement No. 97 – “Certain Component Unit Criteria, and Accounting and
Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation
Plans—an amendment of GASB Statements No. 14 and No. 84, and a supersession of
GASB Statement No. 32,” effective for reporting period beginning after June 15, 2021.
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 85,284,831$ 49,614,387$ 2,443,480$ 137,342,698$
Restricted cash and investments with fiscal agent 156 61,654 1,981,550 2,043,360
Total cash and investments 85,284,987$ 49,676,041$ 4,425,030$ 139,386,058$
Government-wide Statement of Position
65
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 3 – Cash and Investments (Continued)
Cash and investments at June 30, 2020, consisted of the following:
Cash on hand 3,655$
Deposits with financial institutions 3,191,713
Restricted cash 2,043,360
Investments 134,147,330
Total cash and investments 139,386,058$
At June 30, 2020, cash and investments, excluding restricted cash and investments held by fiscal
agent, are reported at fair value based on quoted market prices. The following table represents the fair
value measurements of investments recognized in the accompanying Statement of Net Position
measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair
value measurements fall at June 30, 2020:
Percentage
Fair of Measurement
Value Investments Input
Investments:
Local Agency Investment Fund (LAIF)36,201,161$ 26.99%Uncategorized
California Asset Management Program 1,057,884 0.79%Uncategorized
Money Market Mutual Funds 3,162,527 2.36%Uncategorized
Negotiable Certificates of Deposit 12,335,593 9.19%Uncategorized
U.S. Treasury Securities 37,257,413 27.77%Level 2
U.S. Government Sponsored Enterprise Securities 39,962,876 29.79%Level 2
San Diego County Investment Pool 4,169,876 3.11%Uncategorized
Total Investments 134,147,330$
Investment Type
The City’s level two investments are valued based on either quoted prices for identical securities in
markets that are not active or quoted prices for similar securities in active markets.
A. Demand Deposits
The carrying amounts of the City’s demand deposits were $3,191,713 at June 30, 2020. Bank
balances were $3,753,480 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.
66
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 3 – Cash and Investments (Continued)
A. Demand Deposits (Continued)
The market value of pledged securities must equal at least 110 percent of the City's cash deposits.
California law also allows institutions to secure City’s deposits by pledging first trust deed mortgage
notes having a value of 150 percent of the City’s total cash deposits. The City may waive collateral
requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit
Insurance Corporation (“FDIC”). The City has not waived the collateralization requirements.
B. Investments Authorized by the California Government Code and the City’s Adopted
Investment Policy
The table below identifies the investment types that are authorized for the City by the California
Government Code (or the City’s investment policy, where more restrictive). The table also identifies
certain provisions of the California Government Code (or the City’s investment policy, where more
restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does
not address investments of debt proceeds held by bond trustees that are governed by the
provisions of debt agreements of the City, rather than the general provisions of the California
Government Code or the City’s investment policy.
Authorized Maximum Maximum
Authorized by Investment Maximum Percentage of Investment in
Investment Type Policy Maturity Portfolio One Issuer
Repurchased Agreements-Overnight "Sweep"Yes 1 year 20%No Limit
Local Agency Investment Fund (LAIF)Yes N/A 30%State Law Maximum
Other Governmental Managed Investment Pools Yes N/A 30%10% per pool
Money Market Mutual Funds Yes N/A 20%10%
Certificates of Deposit Yes 5 years 10%5%
Negotiable Certificates of Deposit Yes 5 years 10%5%
Bankers' Acceptances Yes 180 days 10%5%
U.S. Treasury Bills, Notes and Bonds Yes 5 years 50%No Limit
U.S. Government Sponsored Enterprises Yes 5 years 60%25%
Commercial Paper Yes 270 days 25%5%
Commercial Medium-Term Notes Yes 5 years 15%5%
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.
67
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 3 – Cash and Investments (Continued)
D. Risk Disclosures
Disclosures Related to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Generally, the longer the maturity, the greater the sensitivity its fair value is to
changes in market interest rates. One of the ways that the City manages its exposure to interest
rate risk is by purchasing a combination of shorter-term and longer-term investments and by timing
cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity
evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City's investments to interest rate risk is
provided in the table that shows the distribution by maturity is as follows:
Less than 12 to 36 36-60
Total 12 Months Months Months
Investments:
Local Agency Investment Fund (LAIF)36,201,161$ 36,201,161$ -$ -$
California Asset Management Program 1,057,884 1,057,884 - -
Money Market Mutual Funds 3,162,527 3,162,527 - -
Negotiable Certificates of Deposit 12,335,593 493,142 5,156,883 6,685,568
U.S. Treasury Securities 37,257,413 17,884,867 14,250,585 5,121,961
U.S. Government Sponsored Enterprise Securities 39,962,876 2,007,529 32,666,300 5,289,047
San Diego County Investment Pool 4,169,876 4,169,876 - -
Total Investments 134,147,330$ 64,976,986$ 52,073,768$ 17,096,576$
Investment Type
Remaining Maturity (in Months)
Disclosures Related to Credit Risk
Credit risk is defined as the risk that an issuer of an investment will not fulfill its obligation to repay
the holder at the maturity date. This is generally measured by the assignment of a rating by a
nationally recognized statistical organization. However, some issuers do not seek a credit rating.
For instance, the California Local Agency Investment Fund (LAIF) has not sought or received a
credit rating. In these cases, the purchaser is solely responsible for performing their own due
diligence before purchasing an investment or participating in an external investment pool.
Certificates of deposit of $250,000 or less are fully insured by the Federal Deposit Insurance
Corporation (FDIC), and therefore, do not seek a credit rating.
The next table presents the minimum rating required by (where applicable) the Government Code,
the Investment Policy, or the debt agreements, and the actual rating as of year-end for each
investment type.
68
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 3 – Cash and Investments (Continued)
Minimum
Fair Legal AAA/
Value Rating AA+Not Rated
Investments:
Local Agency Investment Fund (LAIF)36,201,161$ N/A -$ 36,201,161$
California Asset Management Program 1,057,884 N/A 1,057,884 -
Money Market Mutual Funds 3,162,527 AAA 3,162,527 -
Negotiable Certificates of Deposit 12,335,593 N/A - 12,335,593
U.S. Treasury Securities*37,257,413 N/A - -
U.S. Government Sponsored Enterprise Securities 39,962,876 N/A 39,962,876 -
San Diego County Investment Pool 4,169,876 N/A 4,169,876 -
Total Investments 134,147,330$ 48,353,163$ 48,536,754$
*Exempt from rating disclosure
Rating as of Year End
Investment Type
Disclosures Relating to Concentration of Credit Risk
GASB Statement No. 40 requires disclosure by amount and issuer of investments in any one issuer
that represent five percent or more of total investments. Investments in any one issuer (other than
U.S. Treasury securities, mutual funds, and external investment pools) that represents five percent
or more of the City's total investments are as follows:
Issuer Investment Type Fair Value
Federal Farm Credit Bank U.S Government Sponsored
Enterprise Securities 18,750,910$
Federal Home Loan Bank U.S Government Sponsored
Enterprise Securities 10,283,420
Disclosures Relating to Custodial Credit Risk
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty
(e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its
investment or collateral securities that are in the possession of another party. The Government
Code and the City's investment policy do not contain legal or policy requirements that would limit
the exposure to custodial credit risk for investments.
69
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 3 – Cash and Investments (Continued)
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.
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.
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 Comprehensive Annual Financial Report (CAFR). Copies of the CAFR 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, 2020, receivables consist of the following:
Governmental Business-Type
Activities Activities Total
Accounts receivable 2,698,279$ 2,757,587$ 5,455,866$
Taxes and assessments receivable 460,829 165,271 626,100
Accrued revenues 3,219,779 - 3,219,779
Total 6,378,887$ 2,922,858$ 9,301,745$
70
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 5 – Investment in Joint Ventures
Investment in joint ventures consists of the following as of June 30, 2020:
Proprietary Fund Investment in Joint Ventures
Cardiff Sanitary Division San Elijo Joint Facilities 34,943,710$
San Dieguito Water District R.E. Badger Joint Facilities 19,245,731
San Dieguito Water District R.E. Badger Financing Authority 646,641
19,892,372
Encinitas Sanitary Division Encina Joint Facilities 6,238,828
Total Investment in Joint Ventures 61,074,910$
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, 2020, CSD's share of those costs was $1,645,980, which is reported as a
component of "facility operations and maintenance" in the accompanying financial statements.
B. San Dieguito Water District
Investment in R.E. Badger Filtration Plant and related Facilities (the "Joint Facilities")
In 1967, SDWD entered into an agreement with Santa Fe Irrigation District (“Santa Fe”) for the joint
ownership, maintenance, operation, and use of a water treatment plant and various facilities for the
storage and delivery of potable water. During the ensuing years, the SDWD and Santa Fe have
added various facilities and improvements, which are owned in different percentages depending on
the type of facility and the agreements in place. The ownership percentages of these Joint Facilities
are described in the next table.
71
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
SDWD Santa Fe Facilities
45%55%Filtration Plant
31%69%Filtered Water Reservoir
39%61%Joint Pipeline
42%58%San Dieguito Water Reservoir
Note 5 – Investment in Joint Ventures (Continued)
B. San Dieguito Water District (Continued)
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, 2020, SDWD's share of those was $2,406,285,
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
Investment in Encina Water Pollution Control Facility (the "Joint Facilities")
ESD is one of six member agencies with an ownership interest in the Joint Facilities. ESD owns
approximately 2.7 percent of the Joint Facilities, after adjusting for the construction and upgrades to
the Joint Facilities, referred to as "Phase V improvements." This ownership percentage affords ESD
treatment capacity rights of approximately 2.0 million gallons/day, which is in excess of current
needs and sufficient to meet all projected future needs. The Encina Wastewater Authority (Encina)
is responsible for the operations and maintenance of the Joint Facilities, as well as the related
administration. The operations, maintenance, and administrative costs are allocated monthly on the
basis of the relative flows of each member agency. For the year ended June 30, 2020, ESD's share
of those costs was $780,694, which is shown as "facility operations and maintenance" in the
accompanying financial statements.
Note 6 – Long-Term Receivables
Long-term receivables consist of loans to developers and loans to employees for the purchase of
computer equipment, a program approved by the City Council to promote more efficient use of
technology. At June 30, 2020, loans receivable is shown in the next table.
72
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 6 – Long-Term Receivables (Continued)
Iris Apartments 450,786$
Employee computer loans 33,039
Total 483,825$
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, 2020 was $450,786.
Note 7 – Capital Assets
A. Governmental Activities
The summary of changes in governmental activities capital assets for the year ended June 30, 2020
is as follows:
Balance Balance
July 1, 2019 Additions Deletions Transfers June 30, 2020
Capital assets, not being depreciated:
Land 61,862,474$ -$ -$ -$ 61,862,474$
Land easements 2,381,057 62,276 - - 2,443,333
Construction in progress 19,015,179 13,684,941 (291,065) (15,161,502) 17,247,553
Total capital assets, not being depreciated 83,258,710 13,747,217 (291,065) (15,161,502) 81,553,360
Capital assets, being depreciated:
Public facilities 106,466,354 - - 7,359,607 113,825,961
Vehicles, equipment and machinery 10,878,602 1,167,870 (275,871) - 11,770,601
Infrastructure 117,435,353 5,775 - 7,801,895 125,243,023
Total capital assets, being depreciated 234,780,309 1,173,645 (275,871) 15,161,502 250,839,585
Less accumulated depreciation
Public facilities (38,620,122) (4,435,714) - - (43,055,836)
Vehicles, equipment and machinery (7,038,945) (705,030) 275,871 - (7,468,104)
Infrastructure (54,004,711) (3,094,186) - - (57,098,897)
Total accumulated depreciation (99,663,778) (8,234,930) 275,871 - (107,622,837)
Total capital assets being depreciated, net 135,116,531 (7,061,285) - 15,161,502 143,216,748
Governmental activities capital assets, net 218,375,241$ 6,685,932$ (291,065)$ -$ 224,770,108$
Depreciation expense was charged to the functions/programs of the governmental activities as
shown in the next table.
73
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 7 – Capital Assets (Continued)
General government 1,561,128$
Public safety 519,179
Public works 3,306,740
Parks and recreation 2,301,019
Internal service funds 546,864
Total depreciation expense 8,234,930$
B. Business-type Activities
The summary of changes in business-type activities capital assets for the year ended June 30,
2020 is as follows:
Balance Balance
July 1, 2019 Additions Deletions Transfers June 30, 2020
Capital assets, not being depreciated:
Land easements 3,413,320$ 37,224$ -$ -$ 3,450,544$
Public works facility right of use 3,378,700 - - - 3,378,700
Construction in progress 6,792,649 858,576 (558,741) (3,699,331) 3,393,153
Total capital assets, not being depreciated 13,584,669 895,800 (558,741) (3,699,331) 10,222,397
Capital assets, being depreciated:
Structures and improvements 21,170,222 - - 2,168,503 23,338,725
Collection and distribution 64,485,308 45,820 - 1,530,828 66,061,956
Machinery and equipment 2,693,762 53,818 - - 2,747,580
Capacity rights 323,190 - - - 323,190
Total capital assets, being depreciated 88,672,482 99,638 - 3,699,331 92,471,451
Less accumulated depreciation
Structures and improvements (6,661,906) (845,132) - - (7,507,038)
Collection and distribution (34,668,933) (1,077,773) - - (35,746,706)
Machinery and equipment (2,121,005) (187,163) - - (2,308,168)
Capacity rights (151,361) (6,464) - - (157,825)
Total accumulated depreciation (43,603,205) (2,116,532) - - (45,719,737)
Total capital assets being depreciated, net 45,069,277 (2,016,894) - 3,699,331 46,751,714
Business-type activities capital assets, net 58,653,946$ (1,121,094)$ (558,741)$ -$ 56,974,111$
Depreciation expense was charged to the functions/programs of the business-type activities as
follows:
Cardiff Sanitary Division 443,689$
San Dieguito Water District 805,350
Encinitas Sanitary Division 766,955
Non-major Affordable Housing 100,538
Total 2,116,532$
74
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 8 – Long-Term Obligations
A summary of changes in long-term liabilities for the year ended June 30, 2020 is as follows:
Balance Balance Due Within Due in More
July 1, 2019 Additions Deletions June 30, 2020 One Year Than One Year
Governmental Activities:
Capital Leases:
2008 Civic Center Roof Replacement 676,834$ -$ (160,045)$ 516,789$ 166,004$ 350,785$
2013 Fire Apparatus 83,106 - (83,106) - - -
2017 Fire Apparatus 460,927 - (87,663) 373,264 89,868 283,396
Bonded Debt:
2013 Community Park Bonds 5,910,000 - (350,000) 5,560,000 360,000 5,200,000
add: original issue premium 78,840 - (8,760) 70,080 - 70,080
2014 Moonlight Beach Tower (Series A)2,830,000 - (70,000) 2,760,000 70,000 2,690,000
less: original issue discount (26,966) - 1,037 (25,929) - (25,929)
2014 Pacific View (Series B)9,555,000 - (210,000) 9,345,000 215,000 9,130,000
less: original issue discount (135,374) - 5,207 (130,167) - (130,167)
2015 Library Refunding Bonds 14,130,000 - (555,000) 13,575,000 580,000 12,995,000
add: original issue premium 661,897 - (36,772) 625,125 - 625,125
2017 Park Refunding Bonds 10,730,000 - (680,000) 10,050,000 715,000 9,335,000
add: original issue premium 1,165,957 - (97,162) 1,068,795 - 1,068,795
Claims payable 2,652,742 1,812,951 (1,222,623) 3,243,070 2,270,149 972,921
Compensated absences 2,185,740 1,931,775 (1,607,804) 2,509,711 1,163,586 1,346,125
Total governmental activities 50,958,703 3,744,726 (5,162,691) 49,540,738 5,629,607 43,911,131
Business-type Activities:
2011 CSD Note Payable to SEJPA 117,500 - (57,500) 60,000 60,000 -
add: original issue premium 68,802 - (34,401) 34,401 - 34,401
2017 CSD Note Payable to SEJPA 11,057,500 - (217,500) 10,840,000 225,000 10,615,000
add: original issue premium 983,136 - (35,112) 948,024 - 948,024
2007 SDWD Note Payable Badger 3,345,000 - (490,000) 2,855,000 525,000 2,330,000
2004 EHA Housing Note Payable 1,091,629 - (82,715) 1,008,914 84,115 924,799
2014 SDWD Water Revenue Bonds 3,485,000 - (645,000) 2,840,000 665,000 2,175,000
add: original issue premium 371,858 - (74,371) 297,487 - 297,487
Compensated absences (SDWD)147,536 147,294 (137,631) 157,199 76,868 80,331
Compensated absences (Affordable
Housing)12,383 9,302 (6,891) 14,794 6,166 8,628
Total business-type activities 20,680,344 156,596 (1,781,121) 19,055,819 1,642,149 17,413,670
Total long-term obligations 71,639,047$ 3,901,322$ (6,943,812)$ 68,596,557$ 7,271,756$ 61,324,801$
A. Governmental Activities
2008 Civic Center Roof Replacement and Energy Optimization Project
On February 27, 2008, the City entered into a long-term lease arrangement with a financial
institution to finance $2,100,000 of the 2008 improvements to the Encinitas Civic Center. The lease
has a term of fifteen years, an interest rate of 3.69 percent, and semi-annual payments of $91,778.
The project was completed during Fiscal Year 2008-09, and the final payment is due in Fiscal Year
2022-23. The total cost of the project was $3,543,258.
75
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 8 – Long-Term Obligations (Continued)
A. Governmental Activities (Continued)
The annual debt service requirements for the lease outstanding at June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 166,004$ 17,552$ 183,556$
2022 172,186 11,370 183,556
2023 178,599 4,957 183,556
Total 516,789$ 33,879$ 550,668$
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 $98,641. The lease is accounted for
as a capital lease, as the City will be purchasing the unit at the maturity of the lease in Fiscal Year
2023-24.
The annual debt service requirements for the lease outstanding at June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 89,868$ 8,773$ 98,641$
2022 92,129 6,512 98,641
2023 94,446 4,195 98,641
2024 96,821 1,819 98,640
Total 373,264$ 21,299$ 394,563$
Capital assets and accumulated depreciation for assets held under capital leases are as follows:
Accumulated Net Capital
Cost Depreciation Assets
Public facilities 3,543,258$ (1,570,844)$ 1,972,414$
Fire apparatus and equipment 629,851 (136,486) 493,365
76
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 8 – Long-Term Obligations (Continued)
A. Governmental Activities (Continued)
2013 Lease Revenue Refunding Bonds (Public Park Construction Project)
On March 20, 2013, the Encinitas Public Financing Authority, a blended component unit of the City,
issued its 2013 Lease Revenue Bonds, Series A (Public Park Construction Project) in the amount of
$7,865,000 to provide funds for the construction of capital improvements to the Encinitas
Community Park. The bonds consist of $7,865,000 of serial bonds, which mature annually through
2033 in installments ranging from $305,000 to $510,000. Interest is due and payable semi-annually
at rates ranging from 2.00 percent to 3.00 percent. The bonds were issued at a premium, which is
being amortized over the life of the bonds on a straight-line basis in the government-wide financial
statements. The bonds are payable from lease payments to be made by the City of Encinitas for the
right to use certain real property and related improvements pursuant to a lease agreement dated
March 1, 2013 between the City as lessee and the Authority as lessor. The bonds are secured by
pledged revenue consisting of all lease revenue paid by the City of Encinitas in addition to any
assets held in trust for the purpose of paying the lease payments. The Authority has a leasehold on
the property until all the terms of the lease agreement are fulfilled. The refunding bonds are payable
from any source of legally available funds of the City. The bonds are subject to federal arbitrage
requirements.
The annual debt service requirements for the 2013 Lease Revenue Refunding Bonds outstanding
at June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 360,000$ 156,818$ 516,818$
2022 365,000 148,206 513,206
2023 375,000 138,722 513,722
2024 390,000 127,950 517,950
2025 400,000 116,100 516,100
2026-2030 2,185,000 390,675 2,575,675
2031-2033 1,485,000 67,725 1,552,725
Total 5,560,000$ 1,146,196$ 6,706,196$
The bonds maturing on or after October 1, 2023 are subject to optional redemption on any date on
or after October 1, 2022, without a premium.
77
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 8 – Long-Term Obligations (Continued)
A. Governmental Activities (Continued)
2014 Lease Revenue Bonds (Pacific View Property and Moonlight Beach Lifeguard Tower)
On November 26, 2014, the Encinitas Public Financing Authority (on behalf of the City of Encinitas)
issued its 2014 Lease Revenue Bonds, Series A tax-exempt (Moonlight Beach Lifeguard Tower)
and Series B taxable (Pacific View Property) in the amounts of $3,095,000 and $10,365,000,
respectively, to provide funds for the purpose of improving the Moonlight Beach Lifeguard Tower
and financing the acquisition of a property known as the Pacific View Property. The bonds consist
of $3,350,000 of serial bonds and $10,110,000 of term bonds. The serial bonds mature annually
through 2030 in installments ranging from $65,000 to $245,000. The term bonds mature through
2045 and are subject to mandatory sinking requirements. Interest is due and payable semi-annually
at rates ranging from 2.00 percent to 3.50 percent. The bonds were issued at a discount, which is
being amortized over the life of the bonds on a straight-line basis in the government-wide financial
statements. The bonds are payable from lease payments to be made by the City of Encinitas for the
right to use certain real property and related improvements pursuant to a lease agreement dated
November 1, 2014 between the City as lessee and the Authority as lessor. The bonds are secured
by pledged revenue consisting of all lease revenue paid by the City of Encinitas in addition to any
assets held in trust for the purpose of paying the lease payments. The Authority has a leasehold on
the property until all the terms of the lease agreement are fulfilled. The refunding bonds are payable
from any source of legally available funds of the City. The bonds are subject to federal arbitrage
requirements.
The annual debt service requirements for the 2014 Lease Revenue Bonds, Series A Moonlight
Beach Lifeguard Tower bonds outstanding at June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 70,000$ 95,381$ 165,381$
2022 75,000 92,831 167,831
2023 75,000 89,831 164,831
2024 80,000 86,731 166,731
2025 85,000 84,069 169,069
2026-2030 455,000 384,297 839,297
2031-2035 530,000 304,463 834,463
2036-2040 630,000 201,044 831,044
2041-2045 760,000 73,688 833,688
Total 2,760,000$ 1,412,335$ 4,172,335$
78
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 8 – Long-Term Obligations (Continued)
A. Governmental Activities (Continued)
2014 Lease Revenue Bonds (Pacific View Property and Moonlight Beach Lifeguard Tower)
(Continued)
The annual debt service requirements for the 2014 Lease Revenue Bonds, Series B Pacific View
Property bonds outstanding at June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 215,000$ 426,556$ 641,556$
2022 225,000 420,225 645,225
2023 230,000 413,113 643,113
2024 240,000 405,475 645,475
2025 245,000 397,288 642,288
2026-2030 1,390,000 1,826,400 3,216,400
2031-2035 1,735,000 1,480,119 3,215,119
2036-2040 2,215,000 1,000,625 3,215,625
2041-2045 2,850,000 370,500 3,220,500
Total 9,345,000$ 6,740,301$ 16,085,301$
2015 Library Refunding Bonds
On September 1, 2015, the Encinitas Public Financing Authority issued $15,645,000 of 2015 Lease
Revenue Refunding Bonds to defease and refund on a current basis, all of the outstanding 2006
Library Bonds which were originally used to finance capital projects that included the construction of
the Encinitas Library and the Encinitas Community Park, in addition to rehabilitating three fire
stations and the public works facility. The bonds consist of serial bonds maturing from 2016 through
2036 in annual installments of $480,000 to $1,025,000. Interest is due and payable semi-annually
at rates ranging from 2.5 percent to 5.0 percent. Annual debt service is approximately $1,065,000
through 2036. The bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2015 Library Refunding Bonds outstanding at June
30, 2020 are presented in the next table.
79
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 8 – Long-Term Obligations (Continued)
A. Governmental Activities (Continued)
2015 Library Refunding Bonds (Continued)
Year Ending
June 30 Principal Interest Total
2021 580,000$ 476,331$ 1,056,331$
2022 610,000 446,581 1,056,581
2023 640,000 415,331 1,055,331
2024 675,000 382,456 1,057,456
2025 700,000 351,581 1,051,581
2026-2030 3,865,000 1,385,056 5,250,056
2031-2035 4,490,000 745,056 5,235,056
2036-2037 2,015,000 73,059 2,088,059
Total 13,575,000$ 4,275,451$ 17,850,451$
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 $1,140,000 through 2031. The bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2017 Park Refunding Bonds outstanding at June 30,
2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 715,000$ 427,750$ 1,142,750$
2022 750,000 392,000 1,142,000
2023 785,000 354,500 1,139,500
2024 825,000 315,250 1,140,250
2025 870,000 274,000 1,144,000
2026-2030 4,995,000 715,500 5,710,500
2031 1,110,000 33,300 1,143,300
Total 10,050,000$ 2,512,300$ 12,562,300$
80
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 8 – Long-Term Obligations (Continued)
B. Business-Type Activities
2011 CSD Note Payable to San Elijo Joint Powers Authority (SEJPA)
On December 1, 2011, the City, on behalf of its members (the Cardiff Sanitary Division and the City
of Solana Beach) refinanced all of its outstanding debt, including its 2003 refunding revenue bonds
and a loan from the State of California. Information on the bond issuance itself is available through
the SEJPA administrative offices. CSD is responsible, via a Third Amended and Restated Loan
Agreement, for the repayment of $4,341,362 of the total borrowing amount of $9,235,000 (or
approximately 47 percent.) The average rate on the borrowing is approximately 2.0 percent. The
bonds were issued at a premium, which is being amortized over the life of the bonds on a straight-
line basis. The issue also resulted in deferred refunding costs, which are also being amortized over
the life of the bonds on a straight-line basis.
CSD has pledged its net revenues to pay for this outstanding obligation. Net revenues are defined
as gross revenues less operations and maintenance costs, excluding depreciation, amortization
and other non-cash type charges. CSD has covenanted to budget for net revenues each fiscal year
of at least 110 percent of annual debt service. During the year ended June 30, 2020, principal and
interest paid on the 2011 Note Payable was $60,734 and net revenue was $3,015,315, or 4965
percent of annual debt service. Management of CSD believes it is in compliance with these
covenants for Fiscal Year 2019-20.
The annual debt service requirements for the 2011 CSD Note Payable to San Elijo Joint Powers
Authority outstanding at June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 60,000$ 1,710$ 61,710$
Total 60,000$ 1,710$ 61,710$
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.
81
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 8 – Long-Term Obligations (Continued)
B. Business-Type Activities (Continued)
2017 CSD Note Payable to San Elijo Joint Powers Authority (SEJPA) (Continued)
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, 2020 is $18,053,822. During the year ended June 30, 2020,
interest paid on the 2017 Note Payable was $451,388 and net revenue was $3,015,315, or 451
percent of annual debt service. Management of CSD believes it is in compliance with these
covenants for Fiscal Year 2019-20.
The annual debt service requirements for the 2017 CSD Note Payable to SEJPA outstanding at
June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 225,000$ 444,863$ 669,863$
2022 230,000 438,113 668,113
2023 237,500 431,213 668,713
2024 245,000 424,088 669,088
2025 255,000 414,288 669,288
2026-2030 1,477,500 1,867,188 3,344,688
2031-2035 1,867,500 1,474,813 3,342,313
2036-2040 2,290,000 1,052,056 3,342,056
2041-2045 2,752,500 591,100 3,343,600
2046-2047 1,260,000 76,100 1,336,100
Total 10,840,000$ 7,213,822$ 18,053,822$
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.
82
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 8 – Long-Term Obligations (Continued)
B. Business-Type Activities (Continued)
2007 SDWD Note Payable to R.E. Badger Water Facilities Financing Authority (WFFA)
(Continued)
Interest is due and payable semi-annually at rates ranging from 3.5 percent to 4.5 percent. Annual
debt service is approximately $635,000 through 2025.
The annual debt service requirements for the 2007 SDWD Note Payable to R.E. Badger Water
Facilities Financing Authority outstanding at June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 525,000$ 111,465$ 636,465$
2022 545,000 89,396 634,396
2023 570,000 66,043 636,043
2024 595,000 40,915 635,915
2025 620,000 13,950 633,950
Total 2,855,000$ 321,769$ 3,176,769$
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 $780,000 through 2024. The
bonds are subject to federal arbitrage requirements.
The annual debt service requirements for the 2014 SDWD Water Refunding Bonds outstanding at
June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 665,000$ 100,300$ 765,300$
2022 695,000 73,100 768,100
2023 725,000 44,700 769,700
2024 755,000 15,100 770,100
Total 2,840,000$ 233,200$ 3,073,200$
83
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 8 – Long-Term Obligations (Continued)
B. Business-Type Activities (Continued)
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, 2020, is $3,073,200. During the year ended June 30, 2020 principal and interest paid
was $1,395,119 and net revenue was $4,672,150, or 335 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 2019-20.
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 $98,938 in 2031. The note bears interest at 90
percent of the ten-year US Treasury note, adjustable every six years. The EHA is solely responsible
for repayment of this note.
The annual debt service requirements for the 2004 Encinitas Housing Authority Note Payable
outstanding at June 30, 2020 are as follows:
Year Ending
June 30 Principal Interest Total
2021 84,115$ 15,764$ 99,879$
2022 85,492 14,388 99,880
2023 86,891 12,989 99,880
2024 88,282 11,598 99,880
2025 89,757 10,122 99,879
2026-2030 471,289 28,108 499,397
2031-2032 103,088 946 104,034
Total 1,008,914$ 93,915$ 1,102,829$
84
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 9 – Interfund Receivables, Payable and Transfers
A. Due To and From Other Funds
Individual interfund receivables and payables at June 30, 2020 were as follows:
Due from Due to
Other Funds Other Funds
Governmental Funds:
General Fund 1,419,861$ -$
Capital Improvements Capital Projects Fund 13,584,028 -
Infrastructure Improvements Special Revenue Fund 14,411,678
Non-major Governmental Funds - 217,819
Enterprise Funds:
Non-major Affordable Housing Enterprise Fund - 89,545
Internal Service Funds - 284,847
Total 15,003,889$ 15,003,889$
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.
B. Transfers In and Out
Transfers in and out between funds for the year ended June 30, 2020 were as follows:
Transfers In Transfers Out
General Fund Infrastructure Improvements 1,390,360$
General Fund Non-Major Governmental Funds 666,138
General Fund Capital Projects Fund 560,943
2,617,441
Infrastructure Improvements Capital Projects Fund 174,514
Capital Projects Fund Infrastructure Improvements 5,080,791
Capital Projects Fund Non-Major Governmental Funds 2,962,799
Capital Projects Fund Non-Major Proprietary Fund 17,400
Capital Projects Fund General Fund 5,868,124
13,929,114
Non-Major Governmental Funds General Fund 3,944,014
Non-Major Governmental Funds Capital Projects Fund 62,616
Non-Major Governmental Funds Infrastructure Improvements 1,651
4,008,281
Internal Service Funds Internal Service Funds 132,000
Internal Service Funds General Fund 2,374,898
2,506,898
Major Proprietary Fund Infrastructure Improvements 12,433
Non-Major Proprietary Fund General Fund 23,633
Total 23,272,314$
85
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 9 – Interfund Receivables, Payable and Transfers (Continued)
B. Transfers In and Out (Continued)
Transfers into the General Fund consist of funds from the State Gasoline Tax, Development
Impact Fees and a special subsidy for COVID19 personnel related cost from the Federal CARES
Act. The City accounts for all street maintenance expenditures in the Streets Division budget unit
within the General Fund and transfers all State Gasoline Tax operating revenues from the
Infrastructure Improvements Special Revenue Fund to the General Fund. The City's Development
Impact Fee Funds transfer funds to the General Fund for qualified costs incurred, or to be
incurred in the future years, by the General Fund for the construction of public facilities. The
transfers into the General Fund also include a transfer from the Open Space Acquisition Fee
Fund to a sub-fund, Opportunity Fund, for housing, land and the development of open space.
Transfers into the Capital Improvements Capital Projects Fund represent funds from other
governmental funds for capital expenditures. All capital projects are executed and expended
through the Capital Improvements Capital Projects Fund.
Transfers into the non-major governmental funds represent General Fund subsidies for the Senior
Nutrition Program, the Community Development Block Grant (CDBG), the Section 8 Housing
Program, the Home Program, and the Wiro Park Landscape and Lighting District. In 1998, the
Council increased the Transient Occupancy Tax (TOT) from eight percent to ten percent.
The additional two percent of TOT revenue increase is transferred to the Coastal Zone
Management fund for beach and sand replenishment and stabilization projects. The transfers in to
the non-major governmental funds also include transfers to the City’s Debt Service Fund and the
Encinitas Public Financing Authority Debt Service Fund to pay for the City’s various debt service
obligations.
Transfers into the Internal Service Funds represent the City’s annual contribution from the
General Fund to the Self Insurance (Risk Management) Fund. The contribution is not mandated
and is established by the City Council during the annual budget process. In addition, the General
Fund also contributes toward vehicle replacement funds annually.
86
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 10 – Fund Balance and Net Position Classifications
The City classifies fund balances, as shown on the Balance Sheet - Governmental Funds as of
June 30, 2020 as follows:
Capital Infrastructure
Improvements Improvements Other
General Capital Projects Special Revenue Governmental
Fund Fund Fund Funds Totals
Nonspendable:
Inventory and prepaid items 254,793$ -$ -$ -$ 254,793$
Long-term receivable 33,039 - - - 33,039
Total nonspendable 287,832 - - - 287,832
Restricted:
Capital projects - 26,361,345 - - 26,361,345
Street maintenance and improvements - - - 1,325,895 1,325,895
Cable Franchise PEG funds - - - 242,052 242,052
Environmental initiatives - - - 840,686 840,686
Affordable housing - - - 200,057 200,057
Donations - - - 204,481 204,481
Parkland and open space - - - 906,678 906,678
Traffic mitigation - - - 1,953,192 1,953,192
Flood control - - - 448,245 448,245
Flexible saving account 167,194 - - - 167,194
Lighting and landscaping
assessments - - - 3,304,927 3,304,927
Law enforcement - - - 317,724 317,724
Debt service 71 - - 85 156
Total restricted 167,265 26,361,345 - 9,744,022 36,272,632
Committed:
Capital projects - 18,352,366 - - 18,352,366
Budget stabilization 1,560,690 - - - 1,560,690
Operating reserve 14,237,349 - - - 14,237,349
Special Project 410,000 - - - 410,000
Total committed 16,208,039 18,352,366 - - 34,560,405
Unassigned 10,542,872 - (13,240,690) - (2,697,818)
Total Fund Balances 27,206,008$ 44,713,711$ (13,240,690)$ 9,744,022$ 68,423,051$
Major Funds
Categorization of Reserves under Adopted City Policies
All unassigned amounts in the City's General Fund are considered reserves under internal City policies.
The City maintains three separate and distinct reserves.
87
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 10 – Fund Balance and Net Position Classifications (Continued)
Categorization of Reserves under Adopted City Policies (Continued)
1) Contingency Reserve – represents funds that are committed for use only in exceptional
circumstances such as catastrophic events that could negatively impact the financial condition
of the City. Funding represents 20 percent of the following year’s operating expenditures, and
no drawdowns have ever been executed from this reserve. City Policy requires a 4/5 vote of the
City Council to authorize draws on this reserve. The amount of the contingency reserve as of
June 30, 2020 was $14,237,349.
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, 2020 was $1,560,690.
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, 2020 was $10,542,872.
Note 11 – Risk Management
A. City of Encinitas - Risk Management and Insurance Programs
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of
assets; errors and omissions; injuries to employees; and natural disasters. The City has a proactive
in-house risk management program, which combines risk mitigation initiatives with a self-insurance
program and excess coverage policies with outside providers.
The City maintains a Self-Insurance Fund to finance and account for its self-insured risks of loss.
The Risk Management fund is accounted for as an internal service fund. It is supported by interfund
charges for workers’ compensation coverage, unemployment insurance, and contributions from
CSD, ESD and the City. The Risk Management fund strives to maintain an adequate net position,
over time, to cover all known and reported claims, as well as an adequate reserve for incurred but
not reported (IBNR) claims.
The City is self-insured for liability claims and losses up to $250,000 per occurrence, and for
workers’ compensation claims and losses up to $350,000 per occurrence.
The City is a member of the California State Association of Counties, Excess Insurance Authority
(CSAC EIA), a joint risk sharing pool which covers liability claims or losses above the City’s
$250,000 self-insured level. CSAC EIA is a separate legal entity formed by the participating
municipalities and counties to provide pooled excess liability insurance coverage to its members.
88
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 11 – Risk Management (Continued)
The members do not hold any ownership stake in CSAC EIA and have no claims to revenue or
assets upon withdrawal.
CSAC EIA is governed by a Board of Directors, who determines policy and necessary funding
levels, including retroactive adjustments for over- or under-funding, which is reflected as
adjustments to current year premiums. The City is covered for losses above $250,000 with excess
coverage through CSAC EIA and excess carriers up to $50 million dollars. All members jointly
share risk liability exposures in excess of each member’s self-insured retention.
The City is a member of the Local Agency Workers Compensation Excess (LAWCX), a California
Joint Powers Insurance Authority. LAWCX provides coverage for claims between $350,000 and
$5,000,000. Excess workers’ compensation coverage between $5,000,000 and statutory limits is
provided through contract reinsurance. City departments contribute premiums to the Self-Insurance
Fund based on annual rates set for each work class.
Changes in the balances of claims payable for liability and workers’ compensation during the past
two years are as follows:
Year Ended Year Ended
June 30, 2020 June 30, 2019
Claims payable, beginning of year 2,652,742$ 2,513,481$
Estimated incurred claims, net 1,812,951 425,000
Claims payments or closures (1,222,623) (285,739)
Claims payable, end of year 3,243,070$ 2,652,742$
A. San Dieguito Water District (SDWD) - Risk Management and Insurance Programs
Risk management programs and support for SDWD are provided by the City of Encinitas Risk
Management Department, for which SDWD pays the City an annual fee (charge for those services).
SDWD paid the City $91,408 for the year ended June 30, 2020.
SDWD is a member of the Association of California Water Agencies - Joint Powers Insurance
Authority (JPIA), which provides coverage for general liability, property and casualty, and workers'
compensation. As of June 30, 2020, in the opinion of the District's management and general
counsel, there were no material claims which would require accrual in the accompanying financial
statements. Management has determined, based on modest self-insurance retention levels and
favorable claims experience, that no self-insurance liabilities were necessary. SDWD has two
outstanding minor claims as of June 30, 2020 and did not pay any claims during the fiscal year.
89
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 12 – Commitments and Contingencies
A. Lawsuits
Numerous claims and suits have been filed against the City in the normal course of conducting City
business. Based upon information received from the City Attorney and the self-insurance
administrator, the estimated liability under such claims would be adequately covered by the reserve
funds in the Self-Insurance Fund and by the excess insurance coverage afforded by CSAC and
LAWCX (See Note 11).
B. Grants
Amounts received or owed from federal and state granting agencies are subject to audit and
adjustment by grantor agencies. While no matters of noncompliance were disclosed by the audit of
the financial statements or Single Audit of the Federal grant programs, grantor agencies may
subject grant programs to additional compliance tests, which may result in disallowed costs. In the
opinion of management, future disallowances of current or prior grant expenditures, if any, would
not have a material adverse effect on the financial position of the City.
C. Construction Commitments
As of June 30, 2020, the City had remaining contractual commitments totaling approximately $9.0
million for capital projects related to its governmental and business-type activities. The more
significant capital commitments included approximately $3.9 million for street improvement projects,
approximately $4.3 million for park improvements and $0.5 million for CSD pump station upgrades
and pipeline rehabilitation-capacity improvement projects. There were also commitments for
drainage improvement projects and emergency repairs projects for approximately $0.3 million.
Note 13 – California Public Employees’ Retirement System
The information in the following table includes the aggregate total pension related items for the
Miscellaneous and Safety plans of the City and the Miscellaneous plan of SDWD:
Miscellaneous Safety SDWD Total
Net Pension Liabilities 24,649,339$ 25,176,127$ 7,577,802$ 57,403,268$
Deferred Outflow of Resources 5,475,873 6,531,702 2,502,847 14,510,422
Deferred Inflow of Resources 1,121,869 1,752,125 589,305 3,463,299
Pension Expense 5,110,859 4,148,554 206,981 9,466,394
The City has the following California Public Employees’ Retirement Plans:
1. The Miscellaneous Plan of the City of Encinitas (Miscellaneous Plan)
2. The Safety Plan of the City of Encinitas (Safety Plan)
a. Fire Plan of the City of Encinitas
b. Lifeguard Plan of the City of Encinitas
3. The Miscellaneous Plan of the San Dieguito Water District (SDWD Plan)
90
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 13 – California Public Employees’ Retirement System (Continued)
Plan Descriptions
Miscellaneous Plan
The City of Encinitas has entered into separate defined benefit pension plans covering
miscellaneous and safety employees with the California Public Employees' Retirement System
(CalPERS). CalPERS is an agent multiple-employer public employee defined benefit pension plan.
The plans provide retirement and disability benefits, annual cost-of-living adjustments, and death
benefits to Plan members and beneficiaries. The Plans are administered by CalPERS, which acts
as a common investment and administrative agent for participating public employers within the
State of California. A menu of benefit provisions as well as other requirements is established by
State statutes within the Public Employees' Retirement Law. The City selects optional benefit
provisions from the benefit menu by contract and adopts those benefits through local ordinances. A
full description of the pension plans regarding number of employees covered, benefit provisions,
assumptions (for funding, but not accounting purposes), and membership information are listed in
the June 30, 2017 Annual Actuarial Valuation Report. This report and CalPERS’ audited financial
statements are publicly available reports that can be obtained at CalPERS’ website under “Forms
and Publications.”
Safety Plan
The Safety Plan is a cost-sharing multiple employer defined benefit plan in which the City
participates with other public agencies that each have fewer than 100 active members and share
the same benefit formula and includes both fire and lifeguard employees, and retirees. The Safety
Plan is administered by the California Public Employees’ Retirement System (CalPERS), which acts
as a common investment and administrative agent for its participating member employers. Benefit
provisions under the Safety Plan are established by State statutes within the Public Employees’
Retirement Law. CalPERS issues publicly available reports that include a full description of the
pension plans regarding benefit provisions, assumptions and membership information that can be
found on the CalPERS website. Copies of the CalPERS annual financial report may be obtained
from the CalPERS Executive Office – 400 P Street, Sacramento, California 95814.
SDWD Plan
The SDWD Plan is a cost-sharing multiple employer defined benefit plan that provides retirement
and disability benefits, annual cost-of-living adjustments, and death benefits to members and
beneficiaries, in which the District participates with other public agencies that each have fewer than
100 active members and share the same benefit formula. The Plan is administered by the California
Public Employees’ Retirement System (CalPERS), which acts as a common investment and
administrative agent for its participating member employers. Benefit provisions under the Plan are
established by State statutes within the Public Employee’s Retirement Law. CalPERS issues
publicly available reports that include a full description of the pension plans regarding benefit
provisions, assumptions and membership information that can be found on the CalPERS website.
Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office
– 400 P Street, Sacramento, California 95814.
91
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 13 – California Public Employees’ Retirement System (Continued)
Benefits Provided
The City's Miscellaneous Plan is an agent multiple-employer plan that is part of the City’s portion of
CalPERS. The Miscellaneous Plan provides employees hired before October 13, 2012 with a Tier 1
benefit equal to 2.7 percent at 55 years of age, calculated based on the single highest year of
qualifying compensation. As of October 13, 2012, the City Council imposed new terms and
conditions on the miscellaneous employees which created a new benefit formula for employees
hired after the effective date of the change (the "Tier 2 miscellaneous plan".) Employees hired
under the Tier 2 miscellaneous plan receive a lower benefit formula, referred to as the two percent
at 60 years of age formula. In addition, legislation enacted by the State of California applying to all
local units of government, referred to as the Public Employees' Pension Reform Act (PEPRA) which
became effective on January 1, 2013, created yet another benefit formula for new hires with no
experience or prior service credit with CalPERS. In the case of the City, this will constitute a "Tier 3
miscellaneous plan" which provides a retirement benefit, referred to as the two percent at 62 years
of age formula. The actual retirement benefit for Tier 2 and Tier 3 miscellaneous employees will be
calculated using the average of the highest 36 consecutive months of qualifying compensation.
The City’s Safety Plan provides Fire Department employees hired before June 23, 2012 with a Tier
1 benefit equal to three percent at 55 years of age, calculated based on the single highest year of
qualifying compensation. Effective June 23, 2012, the City provides for modifications to the pension
benefit formula for employees hired on or after the effective date (the "Tier 2 fire safety plan".) The
three percent at 55 year of age formula is maintained, but the actual retirement benefit will be
calculated using the average of the highest 36 consecutive months of qualifying compensation. In
addition, the PEPRA legislation, created yet another benefit formula for new hires with no
experience or prior service credit with CalPERS. In the case of the City, this will constitute a "Tier 3
fire safety plan" which provides a retirement benefit, referred to as the 2.7 percent at 57 years of
age formula. This plan also utilizes the mandated method of calculation based on the average of
the highest 36 consecutive months of qualifying compensation.
The City’s Safety Plan also provides lifeguard employees hired before October 13, 2012 with a Tier
1 benefit equal to three percent at 55 years of age, calculated based on the single highest year of
qualifying compensation. The lifeguards have Tier 2 and Tier 3 (PEPRA) plans which are identical
to the Fire Plan described above.
The SDWD Plan provides employees hired before October 13, 2012 with a Tier 1 benefit equal to
2.7 percent at 55 years of age, calculated based on the single highest year of qualifying
compensation. As of October 13, 2012, the Board of Directors imposed new terms and conditions
which created a new benefit formula for employees hired after the effective date of the change (the
"Tier 2 Plan"). Employees hired under the Tier 2 Plan receive a lower benefit formula, referred to as
the two percent at 60 years of age formula. In addition, PEPRA created yet another benefit formula
for new hires with no experience or prior service credit with CalPERS. In the case of the District,
this will constitute a "Tier 3 Plan" which provides a retirement benefit, referred to as the 2 percent at
62 years of age formula. The actual retirement benefit for Tier 2 and Tier 3 employees will be
calculated using the average of the highest 36 consecutive months of qualifying compensation.
92
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 13 – California Public Employees’ Retirement System (Continued)
Employees Covered by Benefit Terms
As of the measurement date June 30, 2019, the following employees were covered by the benefit
terms for the City’s plans:
Miscellaneous Safety SDWD
Active employees 150 64 22
Inactive employees or beneficiaries currently
receiving benefits 146 76 33
Inactive employees entitled to, but not yet receiving
benefits 158 54 13
Total 454 194 68
Contributions
Miscellaneous Plan
Employee Contributions
Active City Tier 1 miscellaneous members are required to contribute eight percent of their annual
covered salary (the "employee contribution"). Effective October 13, 2012, all City Tier 1
miscellaneous members contribute the full eight percent, which is credited to their individual
accounts. Members receiving the Tier 2 or Tier 3 benefits are required to contribute seven percent
and 6.25 percent of their annual covered salary, respectively. The employee contribution
requirements are established by State statute.
Employer Contributions
The City is required to contribute the actuarially determined remaining amounts necessary to fund
the benefits for its members (the "employer contributions"). The employer normal cost contribution
rate for Fiscal Year 2019-20 was 10.838 percent for miscellaneous members. The employer
contribution rates are calculated and established annually by CalPERS, based on the actuarial
methods and assumptions as adopted by the CalPERS Board of Administration.
Safety Plan
Active fire and lifeguard members are required to contribute 9 to 12.75 percent of their annual
covered salary (the “employee contribution”). The City is required to contribute the actuarially
determined remaining amounts necessary to fund the benefits for its members (the “employer
contributions”). The employer contribution rates for Fiscal Year 2019-20 was 13.786 to 21.748
percent for fire members and 13.034 to 20.073 percent for lifeguard members. The employer
contribution rates are calculated and established annually by CalPERS, based on the actuarial
methods and assumptions adopted by the CalPERS Board of Administration.
93
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 13 – California Public Employees’ Retirement System (Continued)
SDWD Plan
Active members in the Tier 1 Plan are required to contribute eight percent of their annual covered
salary (the "employee contribution"). Effective October 13, 2012, all Tier 1 members contribute the
full eight percent, which is credited to their individual accounts. Members receiving the Tier 2 or Tier
3 benefits are required to contribute seven percent, and 6.25 percent of their annual covered salary,
respectively. The employee contribution requirements are established by State statute.
SDWD is required to contribute the actuarially determined remaining amounts necessary to fund the
benefits for its members (the "employer contributions"). The employer contribution rates for the year
ended June 30, 2020 for Tier 1, Tier 2, and PEPRA employees were 13.182 percent, 8.081 percent,
and 6.985 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, 2019, the total pension liability was determined by
rolling forward the June 30, 2018 total pension liability. The June 30, 2018 and June 30, 2019 total
pension liabilities were based on the following actuarial methods and assumptions:
Actuarial Methods and Assumptions Used to Determine Total Pension Liability
Actuarial Cost Method
No. 68
Actuarial Assumptions:
Discount Rate 7.15%
Inflation
Salary Increases
Mortality Rate Table
Post Retirement Benefit Increase
Derived using CalPERS' Membership Data for all funds
The lesser of contract COLA or 2.50%until Purchasing
Power Protection Allowance floor on purchasing power
applies, 2.50% thereafter
Entry Age Normal in accordance with the requirements of
2.50%
Varies by Entry Age and Service
Discount Rate
The discount rate used to measure the total pension liability was 7.15%. The projection of cash
flows used to determine the discount rate assumed that contributions from plan members will be
made at the current member contribution rates and that contributions from employers will be made
at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s
fiduciary net position was projected to be available to make all projected future benefit payments of
current plan members. Therefore, the long-term expected rate of return on plan investments was
applied to all periods of projected benefit payments to determine the total pension liability.
94
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 13 – California Public Employees’ Retirement System (Continued)
Discount Rate (Continued)
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term
and long-term market return expectations as well as the expected pension fund cash flows. Using
historical returns of all of the funds’ asset classes, expected compound (geometric) returns were
calculated over the short-term (first ten years) and the long-term (11+ years) using a building-block
approach. Using the expected nominal returns for both short-term and long-term, the present value
of benefits was calculated for each fund. The expected rate of return was set by calculating the
rounded single equivalent expected return that arrived at the same present value of benefits for
cash flows as the one calculated using both short-term and long-term returns. The expected rate of
return was then set equal to the single equivalent rate calculated above and adjusted to account for
assumed administrative expenses. The expected real rates of return by asset class are as
followed:
Assumed
Asset Real Return Real Return
Asset Class 1 Allocation 1 - 10 2 11 + 3
Global equity 50.0%4.80%5.98%
Fixed income 28.0 1.00 2.62
Inflation assets -0.77 1.81
Private equity 8.0 6.30 7.23
Real assets 13.0 3.75 4.93
Liquidity 1.0 -(0.92)
2 An expected inflation of 2.00 percent was used for this period.
3 An expected inflation of 2.92 percent was used for this period.
1 In the CalPERS CAFR, fixed income is included in global debt securities; liquidity is
included in short-term investments; inflation assets are included in both global equity
securities and global debt securities.
95
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 13 – California Public Employees’ Retirement System (Continued)
Changes in the Net Pension Liability
The following tables show the changes in the net pension liability recognized over the measurement
period for the Miscellaneous Plan:
Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at June 30, 2018 (Valuation Date)108,006,576$ 84,619,814$ 23,386,762$
Changes Recognized for the Measurement Period:
Service Cost 2,479,472 - 2,479,472
Interest on the total pension liability 7,738,502 - 7,738,502
Difference between expected and actual experience 1,229,327 - 1,229,327
Contributions from the employer - 3,638,301 (3,638,301)
Contributions from employees - 1,018,181 (1,018,181)
Net investment income, net of administrative expense - 5,588,433 (5,588,433)
Benefit payments, including refunds of employee
contributions (4,489,668) (4,489,668) -
Administrative expense - (60,387) 60,387
Other expense - 196 (196)
Net Changes during July 1, 2018 to June 30, 2019 6,957,633$ 5,695,056$ 1,262,577$
Balance at June 30, 2019 (Measurement Date)114,964,209$ 90,314,870$ 24,649,339$
Increase (Decrease)
As of June 30, 2020, 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, 2018 (Valuation date)92,660,835$ 69,535,698$ 23,125,137$
Balance at June 30, 2019 (Measurement date)96,757,950 71,581,823 25,176,127
Net changes during 2018-2019 4,097,115$ 2,046,125$ 2,050,990$
96
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 13 – California Public Employees’ Retirement System (Continued)
The City’s net pension liability for the Safety Plan is measured as the proportionate share of the net
pension liability. The net pension liability of the Plan is measured as of June 30, 2019, 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, 2018 rolled forward to June 30, 2019 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, 2019 was as follows:
Safety
Plan
Proportionate share at June 30, 2018 0.39412%
Proportionate share at June 30, 2019 0.40330%
Change - Increase/(Decrease)0.00918%
As of June 30, 2020, 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, 2018 (Valuation Date)23,172,973$ 16,099,922$ 7,073,051$
Balance at June 30, 2019 (Measurement Date)23,722,943 16,145,141 7,577,802
Net changes during 2018-2019 549,970$ 45,219$ 504,751$
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, 2019, 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, 2018 rolled forward to June 30, 2019 using standard update
procedures. The District’s proportion of the net pension liability was based on a projection of the
District’s long-term share of contributions to the pension plan relative to the projected contributions
of all participating employers, actuarially determined.
The City’s proportionate share of the net pension liability for the SDWD Plan as of June 30 was as
follows:
SDWD
Plan
Proportionate share at June 30, 2018 0.18768%
Proportionate share at June 30, 2019 0.18923%
Change - Increase/(Decrease)0.00155%
97
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 13 – California Public Employees’ Retirement System (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the Miscellaneous Plan, Safety Plan, and SDWD
Plan as of the measurement date, calculated using the discount rate of 7.15 percent, as well as
what the net pension liability would be if it were calculated using a discount rate that is one
percentage point lower (6.15 percent) or one percentage point higher (8.15 percent) than the
current rate:
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.15%)Rate (7.15%)(8.15%)
City Miscellaneous 40,603,703$ 24,649,339$ 11,514,058$
City Safety 38,436,164 25,176,127 14,304,974
SDWD 10,768,610 7,577,802 4,944,015
89,808,477$ 57,403,268$ 30,763,047$
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.
Amortization of Deferred Outflows and Inflows of Resources
Under GASB No. 68, gains and losses related to changes in total pension liability and fiduciary net
position are recognized in pension expense systematically over time. The first amortized amounts
are recognized in pension expense for the year the gain or loss occurs. The remaining amounts
are categorized as deferred outflows and deferred inflows of resources related to pensions and are
to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Net difference between projected
and actual earnings on pension plan
investments
5 years
All other amounts Straight-line amortization over the expected
average remaining service lifetime (EARSL)
of all members that are provided with
benefits (active, inactive and retired) as of
the beginning of the measurement period.
98
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 13 – California Public Employees’ Retirement System (Continued)
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension
For the year ended June 30, 2020, the City recognized pension expense of $5,110,859,
$4,148,554, and $206,981 for the Miscellaneous, Safety and SDWD plans, respectively. At June
30, 2020, the City reported deferred outflows resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Deferred Deferred Deferred
Outflows Inflows Outflows Inflows
of Resources of Resources of Resources of Resources
Contribution made after the measurement date 3,929,445$ -$ 2,979,381$ -$
Difference between expected and actual experience 832,771 (391,993) 1,643,774 -
Difference between employer's contribution and
proportionate share of contribution - - - (1,106,470)
Changes of assumptions 713,657 (277,142) 1,031,926 (201,379)
Net difference between projected and actual earnings on (346,340)
pension plan investments - (452,734) - -
Adjustments due to difference in proportions - - 876,621 (97,936)
Total 5,475,873$ (1,121,869)$ 6,531,702$ (1,752,125)$
Miscellaneous Plan Safety Plan
The $3,929,445 and $2,979,381 reported as deferred outflows of resources related to contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in
the fiscal year ended June 30, 2021. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Miscellaneous Safety
Plan Plan
Measurement Deferred Outflows Deferred Outflows
Period (Inflows) of (Inflows) of
Ending June 30 Resources Resources
2020 782,917$ 1,526,985$
2021 (369,976) (39,836)
2022 (76,177) 245,658
2023 87,795 67,389
2024 - -
Thereafter - -
424,559$ 1,800,196$
99
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 13 – California Public Employees’ Retirement System (Continued)
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension
(Continued)
For the year ended June 30, 2020, the City recognized pension expense of $206,981 for the SDWD
Plan. At June 30, 2020 the City reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred outflows Deferred inflows
of Resources of Resources
Contribution made after the measurement date 1,581,186$ -$
Difference between expected and actual experience 526,310 (40,778)
Changes of assumptions 361,345 (128,094)
Net difference between projected and actual earnings on
pension plan investments - (132,483)
Difference between employer's actual contributions
and proportionate share of contributions - (140,699)
Adjustments due to difference in proportions 34,006 (147,251)
Total 2,502,847$ (589,305)$
The $1,581,186 reported as deferred outflows of resources related to contributions subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the fiscal year
ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be recognized as pension expense as follows:
Measurement Deferred
Period Outflows (Inflows)
Ending June 30 Of Resources
2020 403,827$
2021 (153,176)
2022 54,934
2023 26,771
2024 -
Thereafter -
332,356$
Note 14 – Other Postemployment Benefits (OPEB)
The City of Encinitas and the San Dieguito Water District maintain separate plans to provide for post-
retirement health care benefits. An actuarial report is prepared every two years to update plan
information and assumptions (when required). The latest actuarial valuation was prepared for June 30,
2019 and was used to determine the June 30, 2019 measurement date amounts.
100
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 14 – Other Postemployment Benefits (OPEB) (Continued)
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 6,781,455$ 225,019$ 7,006,474$
Deferred Outflow of Resources 1,315,490 69,930 1,385,420
Deferred Inflow of Resources 1,431,887 43,199 1,475,086
OPEB Expense 487,417 23,938 511,355
B. City of Encinitas Retiree Health Plan
Plan Description
The City provides postretirement health care benefits through the Public Employees Medical and
Hospital Care Act (PEMHCA), which is a defined benefit agent multiple-employer health benefit
plan administered by CalPERS, to eligible employees who retire directly from the City. The City
pays the cost for lifetime retiree and dependent medical benefits (average premium for CalPERS
health plans available in San Diego County) for fire department employees hired before March 16,
1995. Other City retirees receive the PEMHCA minimum benefit, as determined by CalPERS. The
City’s financial obligation is to provide the CalPERS minimum required employee contribution ($136
per month in 2019, $139 per month in 2020, and in future years, indexed to medical CPI increases)
except for former Encinitas Fire Protection District employees hired on or before March 15, 1995
who receive full retiree health benefits for both the employee and their dependents. The City does
not provide a retiree contribution for dental, vision, or life insurance benefits. The City's OPEB plan
does not issue a separate stand-alone report.
The City has elected to join the California Employers' Retiree Benefit Trust (the "Trust") in
accordance with GASB Statement No. 75, which provides a means to fund the annual OPEB costs,
referred to as the Actuarially Determined Contribution (ADC). The ADC includes the normal cost
(current accrual for benefits being earned) plus an amortization of the unfunded accrued liability or
net OPEB liability over 15 years on level-percentage of pay basis. The City’s funding policy is to
pre-fund the ADC through the Trust.
Eligibility
Employees of the City are eligible for retiree health benefits if they retire from the City and
commence pension benefits under PERS (typically on or after age 50 with at least five years of
PERS eligible service). Membership in the plan consisted of the following at June 30, 2019, the
date of the latest actuarial valuation:
City
Plan
Active plan members 226
Inactive plan members or beneficiaries
currently receiving benefits 86
Total 312
101
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 14 – 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, 2019. The total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2019. The
net OPEB liability at June 30, 2020 was:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at June 30, 2018 (Valuation Date)12,818,900$ 4,070,007$ 8,748,893$
Changes Recognized for the Measurement Period:
Service Cost 196,193 - 196,193
Interest on the total OPEB liability 880,167 - 880,167
Change of assumptions (26,216) (26,216)
Difference between expected and actual experience (1,439,425) (1,439,425)
Employer contributions - 1,270,357 (1,270,357)
Net investment income - 308,901 (308,901)
Benefit payments, including refunds of member
contributions (882,565) (882,565) -
Administrative expenses - (1,101) 1,101
Net Changes during July 1, 2018 to June 30, 2019 (1,271,846)$ 695,592$ (1,967,438)$
Balance at June 30, 2019 (Measurement Date)11,547,054$ 4,765,599$ 6,781,455$
Increase (Decrease)
City Plan
Actuarial Assumptions
The net OPEB liability in the June 30, 2019 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement, unless otherwise
specified:
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate 7.00%
Inflation 2.50%
Wage Inflation 2.75% per annum, in aggregate
Investment Rate of Return
Mortality Rate 1
Pre-retirement Turnover 1
Merit Increases
1 The Experience Study Reports may be accessed on the CalPERS website www.calpers.ca.gov under Forms and Publications.
Entry Age Normal
7.00%, assuming actuarially determined contributions funded into CERBT
Investment Strategy 1.
Derived using CalPERS' 2017 experience study for the CalPERS pension plan
Derived using CalPERS' 2017 experience study for the CalPERS pension plan
Merit increases from the most recent CalPERS pension plan valuation. The
benefits are not payroll related but each individual's projected cost is allocated
over their lifetime as a level-percentage of pay.
102
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 14 – Other Postemployment Benefits (OPEB) (Continued)
Actuarial Assumptions (Continued)
The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an
actuarial experience study for the period July 1, 2018 to June 30, 2019.
Discount Rate
The discount rate used to measure the net OPEB liability was seven percent. This discount rate
assumes the City continues to fully fund for its retiree health benefits through the California
Employers’ Retiree Benefit Trust (CERBT) under its investment allocation Strategy 1. The rate
reflects the CERBT published median interest rate for Strategy 1 of 7.28 percent with an additional
margin for adverse deviation.
The table below reflects long-term expected real rate of return by asset class. The rate of return
was calculated using the capital market assumptions applied to determine the discount rate and
asset allocation. These geometric rates of return are net of administrative expenses.
Target Long-Term Expected
Asset Class Allocation Real Rate of Return*
Global equity 59.00%5.00%
Fixed income 25.00%3.00%
Inflation assets 5.00%2.00%
Commodities 3.00%3.00%
REITs 8.00%5.00%
* Long-term expected rate of return is 7.00 percent
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the City, as well as what the City’s net OPEB
liability would be if it were calculated using a discount rate 1-percentage-point lower (six percent) or
1-percentage-point higher (eight percent) than the current discount rate:
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.00%)Rate (7.00%)(8.00%)
8,106,433$ 6,781,455$ 5,676,401$
Plan's Net OPEB Liability/(Asset)
103
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 14 – Other Postemployment Benefits (OPEB) (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
(5.5%HMO/5.5%PPO decreasing to 4.0%HMO/4.0%PPO) or 1-percentage-point higher
(7.5%HMO/7.5%PPO decreasing to 6.0%HMO/6.0%PPO) than the current healthcare cost trend
rates:
(5.50% HMO/5.50%PPO (6.50% HMO/6.50%PPO (7.50% HMO/7.50%PPO
decreasing to decreasing to decreasing to
4.00% HMO/4.00% PPO)5.00% HMO/5.00% PPO)6.00% HMO/6.00% PPO)
5,620,487$ 6,781,455$ 8,175,324$
Plan's Net OPEB Liability/(Asset)
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, 2020, the City recognized OPEB expense of $487,417 for the City
Plan. At June 30, 2020 the City reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
OPEB contribution made after the
measurement period 1,315,490$ -$
Changes of assumptions - (22,939)
Difference between expected
actual experience - (1,259,497)
Net difference between projected and
actual earnings on investments - (149,451)
1,315,490$ (1,431,887)$
104
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 14 – Other Postemployment Benefits (OPEB) (Continued)
OPEB Liabilities, OPEB Expense and Deferred Outflows/Inflows of Resources to OPEB
(Continued)
The $1,315,490 reported as deferred outflows of resources related to contributions subsequent to
the measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year
ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to OPEB will be recognized as OPEB expense as follows:
Measurement Deferred
Period Outflows (Inflows)
Ending June 30 of Resources
2020 (245,247)$
2021 (245,247)
2022 (206,478)
2023 (185,299)
2024 (183,205)
Thereafter (366,411)
(1,431,887)$
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, 2019 was used to
determine the June 30, 2019 measurement date amounts.
Plan Description
SDWD provides postretirement health care benefits through the Public Employees Medical and
Hospital Care Act (PEMHCA), which is a defined benefit agent multiple-employer health benefit
plan administered by CalPERS, to eligible employees who retire directly from SDWD. Retirees
receive the PEMHCA minimum benefit, as determined by CalPERS. SDWD does not provide a
retiree contribution for dental, vision, or life insurance benefits. SDWD's OPEB plan does not issue
a separate stand-alone report.
SDWD has elected to join the California Employers' Retiree Benefit Trust (the "Trust") in
accordance with GASB Statement No. 75, which provides a means to fund the annual OPEB costs,
referred to as the Actuarially Determined Contribution (ADC). The ADC includes the normal cost
(current accrual for benefits being earned) plus an amortization of the unfunded accrued liability or
net OPEB liability over 15 years on a level-percentage of pay basis. SDWD’s funding policy is to
pre-fund the ADC through the trust.
105
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 14 – Other Postemployment Benefits (OPEB) (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, 2019, the date of the
latest actuarial valuation:
Active plan members 24
Inactive plan members or beneficiaries
currently receiving benefits 21
Total 45
Change in the Net OPEB Liability
SDWD’s net OPEB liability was measured as of June 30, 2019. The total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2019. The
net OPEB liability at June 30, 2020 was:
Total OPEB Plan Fiduciary Net Net OPEB
Liability Position Liability/(Asset)
(a)(b)(c) = (a) - (b)
Balance at June 30, 2019 516,772$ 229,666$ 287,106$
(Measurement Date: June 30, 2018)
Changes Recognized for the Measurement Period:
Service cost 14,633 - 14,633
Interest on the total OPEB liability 36,301 - 36,301
Changes of benefit terms - - -
Difference between expected and actual experience (43,215) - (43,215)
Changes of assumptions 1,843 - 1,843
Contributions from the employer - 55,068 (55,068)
Contributions from employees - - -
Net investment income, net of administrative expense - 16,640 (16,640)
Benefit payments, including refunds of employee
contributions (25,651) (25,651) -
Administrative expense - (59) 59
Other expenses - - -
Net Changes (16,089) 45,998 (62,087)
Balance at June 30, 2020 500,683$ 275,664$ 225,019$
(Measurement Date: June 30, 2019)
Increase (Decrease)
106
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 14 – Other Postemployment Benefits (OPEB) (Continued)
C. San Dieguito Water District – Retiree Health Plan (Continued)
Actuarial Assumptions
The net OPEB liability in the June 30, 2019 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement, unless otherwise
specified:
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate 7.00%
Inflation 2.50%
Wage Inflation 2.75% per annum, in aggregate
Investment Rate of Return
Mortality Rate 1
Pre-retirement Turnover 1
Merit Increases
Entry Age Normal
7.00%, assuming actuarially determined contributions funded into CERBT Investment Strategy 1.
Derived using CalPERS' 2017 experience study for the CalPERS pension plan
Derived using CalPERS' 2017 experience study for the CalPERS pension plan
Merit increases from the most recent CalPERS pension plan valuation. The benefits are not payroll
related but each individual's projected cost is allocated over their lifetime as a level-percentage of pay.
1 The Experience Study Reports may be accessed on the CalPERS website www.calpers.ca.gov
under Forms and Publications.
Discount Rate
The discount rate used to measure the net OPEB liability was 7.00 percent. The projection of cash
flows used to determine the discount rate assumed that District contributions will be made at rates
equal to the actuarily determined contribution rates. Based on those assumptions, the OPEB plan’s
fiduciary net position was projected to be available to make all projected OPEB payments for
current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of
return on OPEB plan investments was applied to all periods of projected benefit payments to
determine the total OPEB liability.
The table below reflects long-term expected real rate of return by asset class. The rate of return
was calculated using the capital market assumptions applied to determine the discount rate and
asset allocation. These geometric rates of return are net of administrative expenses.
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return1
Global equity 59.00%5.50%
Fixed income 25.00%2.35%
Inflation assets 5.00%1.50%
Commodities 3.00%1.75%
REITs 8.00%3.65%
1 Long-term expected rate of return is seven percent
107
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 14 – Other Postemployment Benefits (OPEB) (Continued)
C. San Dieguito Water District – Retiree Health Plan (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of SDWD, as well as what SDWD’s net OPEB liability
would be if it were calculated using a discount rate 1-percentage point lower (6.00 percent) or 1-
percentage point higher (8.00 percent) than the current discount rate:
Discount Rate - 1%Current Discount Discount Rate + 1%
(6.00%)Rate (7.00%)(8.00%)
Net OPEB Liability 282,813$ 225,019$ 176,556$
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
(5.5%HMO/5.5%PPO decreasing to 4.0%HMO/4.0%PPO) or 1-percentage point higher
(7.5%HMO/7.5%PPO decreasing to 6.0%HMO/6.0%PPO) than the current healthcare cost trend
rates:
(5.50% HMO/5.50%PPO (6.50% HMO/6.50%PPO (7.50% HMO/7.50%PPO
decreasing to decreasing to decreasing to
4.00% HMO/4.00% PPO)5.00% HMO/5.00% PPO)6.00% HMO/6.00% PPO)
Net OPEB Liability 171,707$ 225,019$ 289,357$
Contributions
SDWD’s policy is to fund the ADC, which includes the normal cost (current accrual for benefits
being earned) plus an amortization of the net (unfunded accrued) OPEB liability.
OPEB Expense and Deferred Outflows/Inflows of Resources to OPEB
For the year ended June 30, 2020, SDWD recognized OPEB expense of $23,938 for the SDWD
Plan. At June 30, 2020, SDWD reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contribution subsequent to the 68,350$ -$
Changes of assumptions 1,580 -
Net difference between projected and
actual earnings on OPEB plan
investments - (43,199)
Total 69,930$ (43,199)$
108
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 14 – Other Postemployment Benefits (OPEB) (Continued)
C. San Dieguito Water District – Retiree Health Plan (Continued)
OPEB Expense and Deferred Outflows/Inflows of Resources to OPEB (Continued)
The $68,350 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year
ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to OPEB will be recognized as OPEB expense as follows:
Measurement Deferred
Period Outflows (Inflows)
Ending June 30 of Resources
2020 (8,584)$
2021 (8,584)
2022 (6,817)
2023 (5,819)
2024 (5,911)
Thereafter (5,904)
(41,619)$
Note 15 – Encinitas Ranch Golf Authority
The Encinitas Ranch Golf Authority (the “Golf Authority”) is a joint powers authority, formed by the City
and SDWD in 1995 to finance, own, and operate an 18-hole golf course (the “Golf Course”) within the
City. The Golf Course was constructed in connection with the development of the Encinitas Ranch
master-planned community (the “Ranch”). The Ranch is a mixed-use community of residential,
commercial and agricultural development within the City. As a condition to the development of the
Ranch, the Carltas Company (the “Developer”), agreed to dedicate land for and construct the Golf
Course improvements. The Golf Course opened to the public on March 1, 1998 and is managed and
operated under a contract arrangement with a private company.
The Golf Authority is governed by a five-member Board of Directors, the membership of which is
specified in the 1994 Encinitas Ranch Development Agreement. It is a self-sustaining golf course
operation and receives no financial support from the City or SDWD. In future years, depending on the
net revenues from golf operations, the City may benefit financially from the operations. However, this is
unlikely until at least 2030, when the Golf Course bonded debt is expected to be paid off.
The debts and obligations of the Golf Authority are not the debts and obligations of the City or SDWD.
Separate audited financial statements of the Golf Authority are available at the City's administrative
office.
109
City of Encinitas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2020
Note 16 – Special Assessment Debt
City of Encinitas - Community Facilities District (CFD) #1: Encinitas Ranch Community
During Fiscal Year 2012-13, the City, on behalf of the residents and businesses of the Community
Facilities District (“CFD”) #1, refunded all of the outstanding bonds of the 2004 Special Tax Bonds,
Series A, via a current refunding transaction. The CFD #1 issued $32,265,000 par value of 2012
Special Tax Refunding Bonds (Encinitas Ranch Public Improvements), at lower interest rates, while
maintaining the same general terms and conditions, including the final maturity date of September 1,
2030. The transaction will save the taxpayers an average of $170,000 in annual debt service, or about
six percent of the average annual debt service of the prior bonds.
As of June 30, 2020, the outstanding balance on the 2012 Special Tax Refunding Bonds was
$22,300,000. The City acts solely as an agent for CFD #1. The City has no duty or obligation to pay any
liabilities or potential liabilities of the district. Neither the full faith and credit, nor the taxing power of the
City or any other City related agency, is pledged to the repayment of these 2012 Special Tax Refunding
Bonds. Therefore, such bonds are not considered to be a liability of the City and are not included in the
accompanying basic financial statements.
City of Encinitas – Duties and Responsibilities
The City acts as the agent for this Assessment District, collecting the assessments and paying the
CFD’s bills, as well as other administrative duties. The City has no duty or obligation to pay any
liabilities or potential liabilities of the CFD. Neither the full faith and credit, nor the taxing power of the
City or any other City related agency, is pledged in connection with this bond issue. Therefore, such
bonds are not considered to be a liability of the City and are not included in the accompanying basic
financial statements.
Note 17 – Other Required Disclosures
Deficit Fund Balances/Net Position
At June 30, 2020, the Infrastructure Improvements Special Revenue fund had a fund deficit of
$13,290,860. The deficit is anticipated to be funded from future grants, other revenues, and operating
or capital transfers.
At June 30, 2020, the Wastewater Support Internal Service fund had a fund deficit of $334,592. The
deficit is anticipated to be funded by Cardiff Sanitary Division and Encinitas Sanitary Division funds.
At June 30, 2020, the Vehicle Maintenance Internal Service fund had a deficit of $180,246. The deficit
is anticipated to be funded by the General Fund, the Cardiff Sanitary Division, Encinitas Sanitary
Division and San Dieguito Water District funds.
110
REQUIRED SUPPLEMENTARY
INFORMATION
111
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112
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
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.
113
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Note 2 – Budgetary Comparison Schedule
General Fund
Variance with
Original Final Actual Final Budget
REVENUES:
Taxes:
Property 48,366,974$ 48,366,974$ 49,520,037$ 1,153,063$
Real property transfer 520,000 520,000 632,882 112,882
Sales 13,677,709 11,782,402 13,744,880 1,962,478
Franchise 2,230,414 2,230,414 2,183,571 (46,843)
Transient occupancy 2,131,887 1,961,372 1,906,448 (54,924)
Total taxes 66,926,984 64,861,162 67,987,818 3,126,656
Licenses and permits 280,200 280,200 263,518 (16,682)
Intergovernmental 616,547 662,897 780,807 117,910
Charges for services 7,354,684 7,231,654 6,629,818 (601,836)
Fines, forfeitures and penalties 709,753 709,753 655,032 (54,721)
Use of money and property 847,489 847,489 2,810,704 1,963,215
Other 559,811 559,811 712,659 152,848
Total revenues 77,295,468 75,152,966 79,840,356 4,687,390
EXPENDITURES:
General government:
City Council 477,736 477,736 426,127 51,609
City Attorney 380,000 701,621 667,378 34,243
City Manager 4,977,607 5,040,183 4,715,148 325,035
City Clerk 434,314 434,314 416,596 17,718
Finance 2,015,008 2,045,608 1,928,026 117,582
Non-departmental 4,597,466 5,023,653 4,480,969 542,684
Total general government 12,882,131 13,723,115 12,634,244 1,088,871
Public safety:
Law enforcement 15,997,406 15,997,406 15,875,521 121,885
Fire and marine safety 17,048,555 17,415,837 16,780,731 635,106
Total public safety 33,045,961 33,413,243 32,656,252 756,991
Public works:
Administration 456,020 483,430 478,054 5,376
Environmental programs 5,840 5,840 1,389 4,451
Street maintenance 3,075,008 3,075,008 2,882,810 192,198
Facility maintenance 1,643,735 1,645,955 1,482,048 163,907
Stormwater 1,570,517 1,570,517 1,418,821 151,696
Total public works 6,751,120$ 6,780,750$ 6,263,122$ 517,628$
Budgeted Amounts
114
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Note 2 – Budgetary Comparison Schedule (Continued)
General Fund (Continued)
Variance with
Original Final Actual Final Budget
Development services - planning:
Planning 3,409,733$ 3,627,532$ 3,381,911$ 245,621$
Code enforcement 2,389,768 2,690,903 2,265,029 425,874
Building services 773,236 778,616 764,021 14,595
Total development services - planning 6,572,737 7,097,051 6,410,961 686,090
Development services - engineering:
City engineering 1,218,777 1,232,025 1,038,036 193,989
Traffic engineering 688,204 706,204 622,860 83,344
Coastal zone management 1,285,604 1,285,604 1,123,590 162,014
Total development services - engineering 3,192,585 3,223,833 2,784,486 439,347
Parks and recreation:
Administration 1,210,025 1,222,534 1,199,903 22,631
Park services 2,412,460 2,384,166 2,249,731 134,435
Beach services 701,447 701,447 544,159 157,288
Recreational services 781,545 793,516 688,288 105,228
Community and senior center 2,444,391 2,570,836 2,030,955 539,881
Total parks and recreation 7,549,868 7,672,499 6,713,036 959,463
Capital outlay:
Parks and recreation 5,500 5,848 1,350 4,498
Total capital outlay 5,500 5,848 1,350 4,498
Total expenditures*69,999,902 71,916,339 67,463,451 4,452,888
EXCESS OF REVENUES OVER EXPENDITURES 7,295,566 3,236,627 12,376,905 9,140,278
OTHER FINANCING SOURCES (USES)
Transfers in - operating 1,206,321 1,758,678 2,056,498 297,820
Transfers in - capital 1,059,542 1,489,135 560,943 (928,192)
Transfers out - operating (3,780,379) (4,107,000) (3,723,934) 383,066
Transfers out - capital (2,898,639) (4,768,124) (4,768,124) -
Transfers out - debt service (3,730,858) (3,730,858) (3,718,611) 12,247
Total other financing sources (uses)(8,144,013) (9,358,169) (9,593,228) (235,059)
NET CHANGE IN FUND BALANCE (848,447)$ (6,121,542)$ 2,783,677 8,905,219$
Fund balance - beginning of year 24,422,331
Fund balance - end of year 27,206,008$
Budgeted Amounts
*The original budget includes an amendment of $434,380 approved by the City Council before the fiscal
year began.
115
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Note 2 – Budgetary Comparison Schedule (Continued)
Infrastructure Improvements Special Revenue Fund
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES:
Taxes and assessments 532,972$ 532,972$ 489,481$ (43,491)$
Intergovernmental 6,181,804 7,935,187 7,442,981 (492,206)
Use of money and property - - 64,813 64,813
Total revenues 6,714,776 8,468,159 7,997,275 (470,884)
EXPENDITURES:
Current:
General government 239,785 254,285 594,138 (339,853)
Development services - planning - 250,000 - 250,000
Total expenditures 239,785 504,285 594,138 (89,853)
REVENUES OVER
(UNDER) EXPENDITURES 6,474,991 7,963,874 7,403,137 (560,737)
OTHER FINANCING SOURCES (USES):
Transfers in - 174,514 174,514 -
Transfers out (5,795,881) (6,027,010) (6,485,235) (458,225)
Total other financing sources (uses)(5,795,881) (5,852,496) (6,310,721) (458,225)
NET CHANGE IN FUND BALANCE 679,110$ 2,111,378$ 1,092,416 (1,018,962)$
Fund balance - beginning of year (14,333,106)
Fund balance - end of year (13,240,690)$
116
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117
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Measurement period 2018-19 2017-18 2016-17
Service cost 2,479,472$ 2,258,659$ 2,427,983$
Interest on total pension liability 7,738,502 7,270,761 6,965,613
Differences between expected and actual experience 1,229,327 (486,531) (1,781,097)
Changes in assumptions - (739,046) 6,066,080
Changes in benefit terms - - -
Benefit payments, including refunds of employee contributions (4,489,668) (4,164,974) (3,466,120)
Net change in total pension liability 6,957,633 4,138,869 10,212,459
Total pension liability - beginning 108,006,576 103,867,707 93,655,248
Total pension liability - ending (a)114,964,209$ 108,006,576$ 103,867,707$
Plan fiduciary net position
Contributions - employer 3,638,301$ 3,755,605$ 2,944,153$
Contributions - employee 1,018,181 992,534 1,015,196
Investment income (net of administrative expenses)5,588,433 6,559,803 7,826,373
Benefit payments (4,489,668) (4,164,974) (3,466,120)
Other (60,191) (351,784) (102,777)
Net change in plan fiduciary net position 5,695,056 6,791,184 8,216,825
Plan fiduciary net position - beginning 84,619,814 77,828,630 69,611,805
Plan fiduciary net position - ending (b)90,314,870$ 84,619,814$ 77,828,630$
Net pension liability - ending (a)-(b)24,649,339$ 23,386,762$ 26,039,077$
Plan fiduciary net position as a percentage of the
total pension liability 78.56%78.35%74.93%
Covered payroll 13,653,405$ 13,562,192$ 13,167,177$
Net pension liability as a percentage of covered
payroll 180.54%172.44%197.76%
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in Assumptions:
In 2018, demographic assumptions and inflation rate were changed in accordance to CalPERS Experience Study and
Review of Actuarial Assumptions December 2017. In 2017, the accounting discount rate was reduced from 7.65 percent
to 7.15 percent.
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six 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
118
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Measurement period 2015-16 2014-15 2013-14
Service cost 2,192,399$ 2,261,277$ 2,448,194$
Interest on total pension liability 6,690,503 6,333,421 5,943,955
Differences between expected and actual experience (801,667) (126,649) -
Changes in assumptions - (1,637,757) -
Changes in benefit terms - - -
Benefit payments, including refunds of employee contributions (3,178,023) (3,003,676) (2,990,732)
Net change in total pension liability 4,903,212 3,826,616 5,401,417
Total pension liability - beginning 88,752,036 84,925,420 79,524,003
Total pension liability - ending (a)93,655,248$ 88,752,036$ 84,925,420$
Plan fiduciary net position
Contributions - employer 2,927,539$ 2,077,263$ 2,278,140$
Contributions - employee 1,004,970 776,061 1,043,925
Investment income (net of administrative expenses)447,217 1,359,388 9,816,151
Benefit payments (3,178,023) (3,003,676) (2,990,732)
Other (41,718) 49,406 -
Net change in plan fiduciary net position 1,159,985 1,258,442 10,147,484
Plan fiduciary net position - beginning 68,451,820 67,193,378 57,045,894
Plan fiduciary net position - ending (b)69,611,805$ 68,451,820$ 67,193,378$
Net pension liability - ending (a)-(b)24,043,443$ 20,300,216$ 17,732,042$
Plan fiduciary net position as a percentage of the
total pension liability 74.33%77.13%79.12%
Covered payroll 12,783,667$ 12,951,932$ 13,022,309$
Net pension liability as a percentage of covered
payroll 188.08%156.74%136.17%
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in Assumptions:
In 2018, demographic assumptions and inflation rate were changed in accordance to CalPERS Experience Study and
Review of Actuarial Assumptions December 2017. In 2017, the accounting discount rate was reduced from 7.65 percent
to 7.15 percent.
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
Note 3 - Schedule of Changes in the Net Pension Liability and Related Ratios (Continued)
Last Ten Fiscal Years*
City Miscellaneous Plan
119
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Measurement period 2018-19 2017-18 2016-17
Plan's proportion of the net pension liability 0.40330%0.39412%0.39412%
Plan's proportionate share of the net pension liability 25,176,127$ 23,125,137$ 22,930,965$
Plan's covered payroll 6,117,357$ 6,197,680$ 6,017,165$
411.55%373.13%381.09%
Plan's fiduciary net position 71,581,823$ 69,535,698$ 67,653,362$
73.98%75.04%74.69%
Plan's proportionate share of aggregate employer
contributions $ 2,457,135 2,203,690$ 1,108,343$
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in assumptions
In 2018, demographic assumptions and inflation rate were changed in accordance to CalPERS Experience Study and
Review of Actuarial Assumptions December 2017. In 2017, the accounting discount rate was reduced from 7.65 percent
to 7.15 percent.
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
Plan's proportionate share of the net pension liability as a
percentage of covered payroll
Safety Plan
Last Ten Fiscal Years*
Note 4 - Schedule of the City's Proportionate Share of the Net Pension Liability
Plan's fiduciary net position as a percentage of the total pension
liability
120
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Measurement period 2015-16 2014-15 2013-14
Plan's proportion of the net pension liability 0.38281%0.35376%0.22994%
Plan's proportionate share of the net pension liability 19,826,444$ 14,576,416$ 14,308,774$
Plan's covered payroll 5,841,908$ 5,671,755$ 5,115,288$
339.38%257.00%279.73%
Plan's fiduciary net position 63,591,785$ 65,540,377$ 62,697,310$
76.23%81.81%81.42%
Plan's proportionate share of aggregate employer contributions 1,609,491$ 1,250,672$ 1,775,034$
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in assumptions
In 2018, demographic assumptions and inflation rate were changed in accordance to CalPERS Experience Study and
Review of Actuarial Assumptions December 2017. In 2017, the accounting discount rate was reduced from 7.65 percent
to 7.15 percent.
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
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
Safety Plan
Note 4 - Schedule of the City's Proportionate Share of the Net Pension Liability (Continued)
Last Ten Fiscal Years*
121
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Measurement period 2018-19 2017-18 2016-17
Plan's proportion of the net pension liability 0.18923%0.18768%0.18116%
Plan's proportionate share of the net pension liability 7,577,802$ 7,073,051$ 7,141,232$
Plan's covered payroll 1,887,782$ $1,918,865 $1,862,975
401.41%368.61%383.32%
Plan's fiduciary net position 16,145,141$ 16,145,141$ 15,991,467$
68.06%69.48%69.13%
Plan's proportionate share of aggregate employer
contributions 585,749$ 504,492$ 472,819$
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in assumptions
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.
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
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
Last Ten Fiscal Years*
San Dieguito Water District Plan
Note 4 - Schedule of the City's Proportionate Share of the Net Pension Liability (Continued)
122
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Measurement period 2015-16 2014-15 2013-14
Plan's proportion of the net pension liability 0.18103%0.18296%0.06074%
Plan's proportionate share of the net pension liability 6,288,631$ 5,019,493$ 3,779,285$
Plan's covered payroll 1,808,714$ 1,756,033$ 1,712,639$
347.69%285.84%220.67%
Plan's fiduciary net position 15,586,708$ 16,358,655$ 18,489,458$
71.25%76.52%83.03%
Plan's proportionate share of aggregate employer
contributions 356,509$ 271,845$ 241,133$
Notes to Schedule:
Benefit changes There were no changes to benefit terms that applied to all members of the Public Agency Pool.
Changes in assumptions
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.
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
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
San Dieguito Water District Plan
Note 4 - Schedule of the City's Proportionate Share of the Net Pension Liability (Continued)
Last Ten Fiscal Years*
123
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Fiscal Year 2019-20 2018-19 2017-18
Actuarially determined contribution 3,420,863$ 3,252,930$ 2,832,401$
Contributions in relation to the actuarially
determined contributions (3,929,445) (3,637,225) (3,755,605)
Contribution deficiency (excess)(508,582)$ (384,295)$ (923,204)$
Covered payroll 14,169,243$ 13,653,405$ 13,562,192$
Contributions as a percentage of covered
payroll 27.73%26.64%27.69%
Notes to Schedule
Fiscal Year: June 30, 2020
Valuation Date: June 30, 2017
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.63%
Projected salary increases Varies by entry age and service
Payroll growth 2.88%
Discount rate 7.250%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
Note 5 - Schedule of Contributions - Pension
Last Ten Fiscal Years*
City Miscellaneous Plan
124
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Fiscal Year 2016-17 2015-16 2014-15
Actuarially determined contribution 2,723,629$ 2,585,583$ 1,815,263$
Contributions in relation to the actuarially
determined contributions (2,944,153) (2,927,539) (2,077,263)
Contribution deficiency (excess)(220,524)$ (341,956)$ (262,000)$
Covered payroll 13,167,177$ 12,783,667$ 12,951,932$
Contributions as a percentage of covered
payroll 22.36%22.90%16.04%
Notes to Schedule
Fiscal Year: June 30, 2020
Valuation Date: June 30, 2017
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.63%
Projected salary increases Varies by entry age and service
Payroll growth 2.88%
Discount rate 7.250%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of information are shown.
Note 5 - Schedule of Contributions - Pension (Continued)
Last Ten Fiscal Years*
City Miscellaneous Plan
125
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Fiscal Year 2019-20 2018-19 2017-18
Contractually determined contribution (actuarially
determined)2,979,381$ 2,457,135$ 2,203,690$
Contributions in relation to the actuarially determined
contributions (2,979,381) (2,457,135) (2,203,690)
Contribution deficiency (excess)-$ -$ -$
Covered payroll 7,089,554$ 6,117,357$ 6,197,680$
Contributions as a percentage of covered
payroll 42.02%40.17%35.56%
Notes to Schedule
Fiscal Year: June 30, 2020
Valuation Date: June 30, 2017
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.63%
Projected salary increases Varies by entry age and service
Payroll growth 2.88%
Discount rate 7.250%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of
information are shown.
Last Ten Fiscal Years*
Safety Plan
Note 5 - Schedule of Contributions - Pension (Continued)
126
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Fiscal Year 2016-17 2015-16 2014-15
Contractually determined contribution
(actuarially determined)1,108,343$ 1,609,491$ 1,251,594$
Contributions in relation to the actuarially
determined contributions (1,108,343) (1,609,491) (1,251,594)
Contribution deficiency (excess)-$ -$ -$
Covered payroll 6,017,165$ 5,841,908$ 5,671,755$
Contributions as a percentage of covered
payroll 18.42%27.55%22.07%
Notes to Schedule
Fiscal Year: June 30, 2020
Valuation Date: June 30, 2017
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.63%
Projected salary increases Varies by entry age and service
Payroll growth 2.88%
Discount rate 7.250%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of
information are shown.
Last Ten Fiscal Years*
Safety Plan
Note 5 - Schedule of Contributions - Pension (Continued)
127
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Note 5 - Schedule of Contributions - Pension (Continued)
Fiscal Year 2019-20 2018-19 2017-18
Contractually determined contribution
(actuarially determined) $ 1,581,186 585,749$ 504,492$
Contributions in relation to the actuarially
determined contributions (1,581,186) (585,749) (504,492)
Contribution deficiency (excess)-$ -$ -$
Covered payroll 1,901,202$ 1,887,782$ 1,918,865$
Contributions as a percentage of covered
payroll 83.17%31.03%26.29%
Notes to Schedule
Fiscal Year: June 30, 2020
Valuation Date: June 30, 2017
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.63%
Projected salary increases Varies by entry age and service
Payroll growth 2.88%
Discount rate 7.250%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of
information are shown.
Last Ten Fiscal Years*
San Dieguito Water District Plan
128
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Note 5 - Schedule of Contributions - Pension (Continued)
2016-17 2015-16 2014-15
Contractually determined contribution
(actuarially determined)472,819$ 356,509$ 271,845$
Contributions in relation to the actuarially
determined contributions (472,819) (356,509) (271,845)
Contribution deficiency (excess)-$ -$ -$
Covered payroll 1,862,975$ 1,808,714$ 1,756,033$
Contributions as a percentage of covered
payroll 25.38%19.71%15.48%
Notes to Schedule
Fiscal Year: June 30, 2020
Valuation Date: June 30, 2017
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percent of payroll
Asset valuation method Market Value
Inflation 2.63%
Projected salary increases Varies by entry age and service
Payroll growth 2.88%
Discount rate 7.250%
*Fiscal Year 2014-15 was the first year of implementation; therefore, only six years of
information are shown.
Last Ten Fiscal Years*
San Dieguito Water District Plan
129
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Measurement Period 2018-19 2017-18 2016-17
Total OPEB liability
Service cost 196,193$ 190,479$ 178,018$
Interest 880,167 867,343 856,058
Changes of benefit terms - - -
Differences between expected and actual experience (1,439,425) - -
Changes of assumptions (26,216) - -
Benefit payments, including refunds of member contributions (882,565) (878,114) (892,532)
Net change in total OPEB liability (1,271,846) 179,708 141,544
Total OPEB liability - beginning 12,818,900 12,639,192 12,497,648
Total OPEB liability - ending (a)11,547,054$ 12,818,900$ 12,639,192$
OPEB fiduciary net position
Contributions - employer 1,270,357$ 1,102,937$ 1,092,690$
Net investment income 308,900 358,109 403,267
Benefit payments, including refunds of member contributions (882,565) (878,114) (892,532)
Administrative expense (1,100) (2,366) (2,046)
Other expense - (4,620) -
Net change in plan fiduciary net position 695,592 575,946 601,379
Plan fiduciary net position - beginning 4,070,007 3,494,061 2,892,682
Plan fiduciary net position - ending (b)4,765,599 4,070,007 3,494,061
Plan net OPEB liability - ending (a) - (b)6,781,455$ 8,748,893$ 9,145,131$
Plan fiduciary net position as a percentage
of the total OPEB Liability 41.27%31.75%27.64%
Covered-employee payroll 22,403,865$ 21,767,304$ 17,816,557$
Plan net OPEB liability as a percentage
of covered-employee payroll 30.27%40.19%51.33%
* Fiscal Year 2017-18 was the first year of implementation; therefore, only three years of information are shown.
Note 6 - Schedule of Changes in the Net OPEB Liability and Related Ratios
Last Ten Fiscal Years*
City Plan
130
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Measurement Period 2018-19 2017-18 2016-17
Total OPEB liability
Service cost 14,633$ 14,241$ 13,309$
Interest 36,301 34,637 33,225
Differences between expected and actual experience (43,215) - -
Changes of assumptions 1,843 - -
Benefit payments, including refunds of member contributions (25,651) (25,346) (29,268)
Net change in total OPEB liability (16,089) 23,532 17,266
Total OPEB liability - beginning 516,772 493,240 475,974
Total OPEB liability - ending (a)500,683$ 516,772$ 493,240$
OPEB fiduciary net position
Contributions - employer 55,068$ 59,205$ 63,332$
Net investment income 16,640 18,590 18,770
Benefit payments, including refunds of member contributions (25,651) (25,346) (29,268)
Administrative expense (59) (358) (95)
Net change in plan fiduciary net position 45,998 52,091 52,739
Plan fiduciary net position - beginning 229,666 177,575 124,836
Plan fiduciary net position - ending (b)275,664 229,666 177,575
Plan net OPEB liability - ending (a) - (b)225,019$ 287,106$ 315,665$
Plan fiduciary net position as a percentage
of the total OPEB Liability 55.06%44.44%36.00%
Covered-employee payroll 1,903,385$ 1,978,669$ 1,802,043$
Plan net OPEB liability as a percentage 11.82%14.51%17.52%
of covered-employee payroll
* Fiscal Year 2017-18 was the first year of implementation; therefore, only three years of information are shown.
Note 6 - Schedule of Changes in the Net OPEB Liability and Related Ratios (Continued)
Last Ten Fiscal Years*
San Dieguito Water District Plan
131
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Fiscal Year 2019-20 2018-19 2017-18
Actuarially determined contribution (ADC)1,117,605$ 958,415$ 930,499$
Contributions in relation to the ADC (1,315,490) (1,269,129) (1,092,690)
Contribution deficiency (excess)(197,885)$ (310,714)$ (162,191)$
Covered employee payroll 23,224,242$ 22,403,865$ 21,767,304$
Contributions as a percentage of covered
employee payroll 5.66%5.66%5.02%
Notes to Schedule
Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2019-20 were from the June 30, 2019 actuarial valuation report.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percentage of payroll over a closed rolling
15-year period
Asset valuation method Market value
Inflation 2.50% per annum
Payroll growth 2.75% per annum, in aggregate
Investment rate of return 7% per annum. Assumes investing in California Employers' Retirees
Benefit Trust asset allocation Strategy 1.
Retirement age According to the retirement rates under the most recent CalPERS pension
plan experience study.
Mortality Pre-retirement mortality probability based on 2014 CalPERS 1997-2011
Experience Study covering CalPERS participants. Post-retirement
mortality probability based on CalPERS Experience Study 2007-2011
covering participants in CalPERS.
City Plan
* Fiscal Year 2017-18 was the first year of implementation; therefore, only three years of information are
shown.
Note 7 - Schedule of Contributions - OPEB
Last Ten Fiscal Years*
132
City of Encinitas
Required Supplementary Information
For the Year Ended June 30, 2020
Fiscal Year 2019-20 2018-19 2017-18
Actuarially determined contribution (ADC)48,200$ 53,291$ 52,780$
Contributions in relation to the ADC (68,350) (66,983) (63,332)
Contribution deficiency (excess)(20,150)$ (13,692)$ (10,552)$
Covered employee payroll 2,046,974$ 1,903,385$ 1,978,669$
Contributions as a percentage of covered
employee payroll 3.34%3.52%3.20%
Notes to Schedule
Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year
2019-20 were from the June 30, 2019 actuarial valuation report.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period Level percentage of payroll over a closed rolling
15-year period
Asset valuation method Market value
Inflation 2.50% per annum
Payroll growth 2.75% per annum, in aggregate
Investment rate of return 7% per annum. Assumes investing in California Employers' Retirees
Benefit Trust asset allocation Strategy 1.
Retirement age According to the retirement rates under the most recent CalPERS pension
plan experience study.
Mortality Pre-retirement mortality probability based on 2014 CalPERS 1997-2011
Experience Study covering CalPERS participants. Post-retirement
mortality probability based on CalPERS Experience Study 2007-2011
covering participants in CalPERS.
San Dieguito Water District Plan
* Fiscal Year 2017-18 was the first year of implementation; therefore, only three years of
information are shown.
Last Ten Fiscal Years*
Note 7 - Schedule of Contributions - OPEB (Continued)
133
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134
SUPPLEMENTARY INFORMATION
135
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136
NON-MAJOR
GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS:
Grants and Housing -This fund is used to account for financial resources from state and federal grants that
are utilized to fund various City programs such as affordable housing and law enforcement.
Development Impact -This fund is used to account for development impact/mitigation fees that are collected
in connection with land use and construction applications.These monies are utilized to fund specified City
capital improvement projects.
Lighting and Landscaping -This fund is used to account for special assessments and certain restricted
property tax revenues collected from homeowners and businesses.These monies are utilized to fund
specified operational and maintenance costs related to common area landscaping,street lighting and park
maintenance.
DEBT SERVICE FUNDS:
City Debt Service -This fund is used to account for and report financial resources that are restricted,
committed, or assigned to expenditures for the payment of principal and interest on the City long-term debt.
Encinitas Public Financing Authority -This fund is used to account for and report financial resources that
are restricted,committed,or assigned to expenditures for the payment of principal and interest on the
Encinitas Public Financing Authority long-term debt.
137
City of Encinitas
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2020
Grants and Development Lighting and
Housing Impact Landscaping
ASSETS
Cash and investments 1,409,291$ 4,251,088$ 4,362,442$
Receivables 319,025 - 25,188
Interest receivable 7,644 52,644 17,703
Long-term receivable 194,466 256,320 -
Restricted cash and investments - - -
Total assets 1,930,426$ 4,560,052$ 4,405,333$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities 173,656$ -$ 252,350$
Due to other funds 217,819 - -
Deposits and other liabilities - 21,405 -
Total liabilities 391,475 21,405 252,350
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 230,324 256,320 -
Total deferred inflows of resources 230,324 256,320 -
Fund Balances
Restricted 1,308,627 4,282,327 4,152,983
Total fund balances 1,308,627 4,282,327 4,152,983
Total liabilities, deferred inflows of
resources and fund balances 1,930,426$ 4,560,052$ 4,405,333$
(Continued)
Special Revenue
138
City of Encinitas
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2020
Total
Encinitas Public Other
City Financing Governmental
Debt Service Authority Funds
ASSETS
Cash and investments -$ -$ 10,022,821$
Receivables - - 344,213
Interest receivable - - 77,991
Long-term receivable - - 450,786
Restricted cash and investments - 85 85
Total assets -$ 85$ 10,895,896$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities -$ -$ 426,006$
Due to other funds - - 217,819
Deposits and other liabilities - - 21,405
Total liabilities - - 665,230
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - 486,644
Total deferred inflows of resources - - 486,644
Fund Balances
Restricted - 85 9,744,022
Total fund balances - 85 9,744,022
Total liabilities, deferred inflows of
resources and fund balances -$ 85$ 10,895,896$
(Concluded)
Debt Service
139
City of Encinitas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Non-Major Governmental Funds
For the Year Ended June 30, 2020
Grants and Development Lighting and
Housing Impact Landscaping
REVENUES:
Taxes and assessments 355,519$ -$ 2,231,743$
Intergovernmental 984,666 - -
Development impact fees - 2,248,578 -
Use of money and property 156,223 495,343 201,870
Other 525,475 - -
Total revenues 2,021,883 2,743,921 2,433,613
EXPENDITURES:
Current:
General government 129,999 - -
Public safety 272,055 - -
Public works 581,443 - 548,176
Development services - planning 208,762 - -
Development services - engineering - - 540,417
Parks and recreation 305,896 - 940,368
Capital outlay 341,351 - -
Debt service:
Principal - - -
Interest and fiscal charges - - -
Total expenditures 1,839,506 - 2,028,961
REVENUES OVER
(UNDER) EXPENDITURES 182,377 2,743,921 404,652
OTHER FINANCING SOURCES (USES):
Transfers in 270,268 1,750 17,652
Transfers out (308,953) (3,279,984) (40,000)
Total other financing sources (uses)(38,685) (3,278,234) (22,348)
NET CHANGE IN FUND BALANCES 143,692 (534,313) 382,304
FUND BALANCES:
Beginning of year 1,164,935 4,816,640 3,770,679
End of year 1,308,627$ 4,282,327$ 4,152,983$
(Continued)
Special Revenue
140
City of Encinitas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)
Non-Major Governmental Funds
For the Year Ended June 30, 2020
Total
Encinitas Public Other
City Financing Governmental
Debt Service Authority Funds
REVENUES:
Taxes and assessments -$ -$ 2,587,262$
Intergovernmental - - 984,666
Development impact fees - - 2,248,578
Use of money and property - 613 854,049
Other - - 525,475
Total revenues - 613 7,200,030
EXPENDITURES:
Current:
General government - - 129,999
Public safety - - 272,055
Public works - - 1,129,619
Development services - planning - - 208,762
Development services - engineering - - 540,417
Parks and recreation - - 1,246,264
Capital outlay - - 341,351
Debt service:
Principal 160,045 1,865,000 2,025,045
Interest and fiscal charges 23,512 1,671,739 1,695,251
Total expenditures 183,557 3,536,739 7,588,763
REVENUES OVER
(UNDER) EXPENDITURES (183,557) (3,536,126) (388,733)
OTHER FINANCING SOURCES (USES):
Transfers in 183,557 3,535,054 4,008,281
Transfers out - - (3,628,937)
Total other financing sources (uses)183,557 3,535,054 379,344
NET CHANGE IN FUND BALANCES - (1,072) (9,389)
FUND BALANCES:
Beginning of year - 1,157 9,753,411
End of year -$ 85$ 9,744,022$
Debt Service
141
City of Encinitas
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Grants and Housing Special Revenue Fund
For the Year Ended June 30, 2020
Final Actual Variance with
Budget Amounts Final Budget
REVENUES:
Taxes and assessments 394,197$ 355,519$ (38,678)$
Intergovernmental 1,303,826 984,666 (319,160)
Use of money and property 203,516 156,223 (47,293)
Other 568,553 525,475 (43,078)
Total revenues 2,470,092 2,021,883 (448,209)
EXPENDITURES:
Current:
General government 219,592 129,999 89,593
Public safety 311,746 272,055 39,691
Public works 636,869 581,443 55,426
Development services - planning 592,376 208,762 383,614
Parks and recreation 426,184 305,896 120,288
Capital Outlay 405,582 341,351 64,231
Total expenditures 2,592,349 1,839,506 752,843
REVENUES OVER
(UNDER) EXPENDITURES (122,257) 182,377 304,634
OTHER FINANCING SOURCES (USES)
Transfers in 282,838 270,268 (12,570)
Transfers out (308,953) (308,953) -
Total other financing sources (uses)(26,115) (38,685) (12,570)
NET CHANGE IN FUND BALANCE (148,372)$ 143,692 292,064$
FUND BALANCE:
Beginning of year 1,164,935
End of year 1,308,627$
142
City of Encinitas
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Development Impact Special Revenue Fund
For the Year Ended June 30, 2020
Final Actual Variance with
Budget Amounts Final Budget
REVENUES:
Development impact fees 896,928$ 2,248,578$ 1,351,650$
Use of money and property 79,695 495,343 415,648
Total revenues 976,623 2,743,921 1,767,298
Expenditures:
Current:
General government - - -
Total expenditures - - -
REVENUES OVER
(UNDER) EXPENDITURES 976,623 2,743,921 1,767,298
OTHER FINANCING SOURCES (USES)
Transfers in 1,750 1,750 -
Transfers out (3,104,683) (3,279,984) (175,301)
Total other financing sources (uses)(3,102,933) (3,278,234) (175,301)
NET CHANGE IN FUND BALANCE (2,126,310)$ (534,313) 1,591,997$
FUND BALANCE:
Beginning of year 4,816,640
End of year 4,282,327$
143
City of Encinitas
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Lighting and Landscaping Special Revenue Fund
For the Year Ended June 30, 2020
Final Actual Variance with
Budget Amounts Final Budget
REVENUES:
Taxes and assessments 2,181,540$ 2,231,743$ 50,203$
Use of money and property 60,189 201,870 141,681
Other 22,000 - (22,000)
Total revenues 2,263,729 2,433,613 169,884
EXPENDITURES:
Current:
Public works 588,650 548,176 40,474
Development services - engineering 635,540 540,417 95,123
Parks and recreation 1,036,612 940,368 96,244
Total expenditures 2,260,802 2,028,961 231,841
REVENUES OVER
(UNDER) EXPENDITURES 2,927 404,652 401,725
OTHER FINANCING SOURCES (USES)
Transfers in 16,000 17,652 1,652
Transfers out (40,000) (40,000) -
Total other financing sources (uses)(24,000) (22,348) 1,652
NET CHANGE IN FUND BALANCE (21,073)$ 382,304 403,377$
FUND BALANCE:
Beginning of year 3,770,679
End of year 4,152,983$
144
Internal Service Funds
Internal Service Funds are used to finance and account for special activities and services performed by a
designated City department for other departments on a cost reimbursement basis.
Risk Management -This fund is used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the City,or to other governments,on a cost
reimbursement basis for risk management expenditures.
Wastewater Support -This fund is used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the City,or to other governments,on a cost
reimbursement basis for wastewater support expenditures.
Vehicle Maintenance -This fund is used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the City,or to other governments,on a cost
reimbursement basis for vehicle maintenance expenditures.
Vehicle Replacement -This fund is used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the City,or to other governments,on a cost
reimbursement basis for vehicle replacement expenditures.
145
City of Encinitas
Combining Statement of Net Position
All Internal Service Funds
June 30, 2020
Risk Wastewater Vehicle Vehicle
Management Support Maintenance Replacement Total
ASSETS
Cash and investments 6,328,747$ 13,982$ 16,803$ 891,040$ 7,250,572$
Inventory and prepaid items 60,574 - - 737,623 798,197
Total current assets 6,389,321 13,982 16,803 1,628,663 8,048,769
Noncurrent assets:
Capital assets:
Utility, plant, vehicles, and equipment, net - - - 3,573,508 3,573,508
Total noncurrent assets - - - 3,573,508 3,573,508
Total assets 6,389,321 13,982 16,803 5,202,171 11,622,277
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension related items 49,930 72,595 37,583 - 160,108
Deferred OPEB related items 4,686 12,497 7,811 - 24,994
Total deferred outflows of resources 54,616 85,092 45,394 - 185,102
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 171,320 13,982 16,802 174,630 376,734
Due to other funds - - - 284,847 284,847
Current portion of capital leases payable - - - 89,868 89,868
Total current liabilities 171,320 13,982 16,802 549,345 751,449
DEFERRED INFLOWS OF RESOURCES
Deferred pension related items 10,230 14,873 7,700 - 32,803
Deferred OPEB related items 5,101 13,603 8,502 - 27,206
Total deferred inflows of resources 15,331 28,476 16,202 - 60,009
Noncurrent liabilities:
Capital lease payable - - - 283,396 283,396
Net pension liability 224,756 326,784 169,174 - 720,714
Net OPEB liability 24,159 64,424 40,265 - 128,848
Total noncurrent liabilities 248,915 391,208 209,439 283,396 1,132,958
Total liabilities 420,235 405,190 226,241 832,741 1,884,407
NET POSITION
Net investment in capital assets - - - 3,200,244 3,200,244
Unrestricted 6,008,371 (334,592) (180,246) 1,169,186 6,662,719
Total net position 6,008,371$ (334,592)$ (180,246)$ 4,369,430$ 9,862,963$
146
City of Encinitas
Combining Statement of Revenues, Expenses, and Changes in Net Position
All Internal Service Funds
For the Year Ended June 30, 2020
Risk Wastewater Vehicle Vehicle
Management Support Maintenance Replacement Total
OPERATING REVENUES:
Interfund revenues 1,150,872$ 915,690$ 556,159$ -$ 2,622,721$
Other revenues 389,838 443 206 - 390,487
Total operating revenues 1,540,710 916,133 556,365 - 3,013,208
OPERATING EXPENSES:
Operational support services 739,854 105,657 213,788 3,743 1,063,042
Administrative support 666,661 1,013,068 522,823 - 2,202,552
Insurance and claims 1,449,287 - - - 1,449,287
Depreciation of capital assets - - - 546,864 546,864
Total operating expenses 2,855,802 1,118,725 736,611 550,607 5,261,745
Operating income (loss)(1,315,092) (202,592) (180,246) (550,607) (2,248,537)
NONOPERATING REVENUES:
Gain (loss) on disposal of capital assets - - - 39,667 39,667
Interest expense - - - (12,562) (12,562)
Total nonoperating revenues - - - 27,105 27,105
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (1,315,092) (202,592) (180,246) (523,502) (2,221,432)
Transfers in 1,691,898 - - 815,000 2,506,898
Transfers out - (132,000) - - (132,000)
Total capital contributions and transfers 1,691,898 (132,000) - 815,000 2,374,898
Net change in net position 376,806 (334,592) (180,246) 291,498 153,466
NET POSITION:
Beginning of year 5,631,565 - - 4,077,932 9,709,497
End of year 6,008,371$ (334,592)$ (180,246)$ 4,369,430$ 9,862,963$
147
City of Encinitas
Combining Statement of Cash Flows
All Internal Service Funds
For the Year Ended June 30 , 2020
Risk Wastewater Vehicle Vehicle
Management Support Maintenance Replacement Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from users 1,541,063$ 916,133$ 556,365$ -$ 3,013,561$
Payments to employees (454,058) (675,318) (340,436) - (1,469,812)
Payments to suppliers and vendors (2,236,806) (112,236) (209,004) (333,096) (2,891,142)
Net cash provided by (used in) operating activities (1,149,801) 128,579 6,925 (333,096) (1,347,393)
CASHFLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition of capital assets - - - (808,160) (808,160)
Principal payment on long-term debt - - - (170,771) (170,771)
Interest payments on capital leases - - - (12,562) (12,562)
Proceeds from sale of capital assets - - - 39,667 39,667
Net cash (used in) capital and related financing activities - - - (951,826) (951,826)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in 1,691,898 - - 815,000 2,506,898
Transfers (out)- (132,000) - - (132,000)
Net cash provided by (used in) noncapital financing activities 1,691,898 (132,000) - 815,000 2,374,898
Net increase (decrease) in cash and cash equivalents 542,097 (3,421) 6,925 (469,922) 75,679
CASH AND CASH EQUIVALENTS:
Beginning of year 5,786,650 17,403 9,878 1,360,962 7,174,893
End of year 6,328,747$ 13,982$ 16,803$ 891,040$ 7,250,572$
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss)(1,315,092)$ (202,592)$ (180,246)$ (550,607)$ (2,248,537)$
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation - - - 546,864 546,864
Changes in operating assets and liabilities:
Accounts receivable 353 - - - 353
Inventory and prepaid items (16,368) - - (737,623) (753,991)
OPEB-related deferred outflows (4,686) (12,497) (7,811) - (24,994)
Pension-related deferred outflows (49,930) (72,595) (37,583) - (160,108)
Accounts payable and accrued liabilities (28,324) (3,421) 6,924 123,423 98,602
Due to other funds - - - 284,847 284,847
Net OPEB liability 224,756 326,784 169,174 - 720,714
Net pension liability 24,159 64,424 40,265 - 128,848
OPEB-related deferred inflows 5,101 13,603 8,502 - 27,206
Pension-related deferred inflows 10,230 14,873 7,700 - 32,803
Total adjustments 165,291 331,171 187,171 217,511 901,144
Net cash provided by (used in) operating activities (1,149,801)$ 128,579$ 6,925$ (333,096)$ (1,347,393)$
There were no non-cash capital and related financing activities.
148
AGENCY FUND
FIDUCIARY FUNDS
The Agency Fund is used to account for assets held by the City in a trustee capacity for individuals,private
organizations, other governments, and/or other funds.
Community Facilities District #1 -This fund accounts for all money collected to pay for the debt service of
the Community Facilities District #1 for which the City acts as paying agent but has no legal commitment or
obligation.
149
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150
City of Encinitas
Statement of Changes in Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2020
Balance Balance
July 1, 2019 Additions Deletions June 30, 2020
Community Facilities District #1
Assets:
Cash and investments 2,333,543$ 2,709,297$ (2,599,360)$ 2,443,480$
Restricted cash and investments:
Held by fiscal agents 1,993,947 2,592,643 (2,605,040) 1,981,550
Interest receivable - 9,555 - 9,555
Current assessments receivable 18,889 8,430 (18,889) 8,430
Total assets 4,346,379$ 5,319,925$ (5,223,289)$ 4,443,015$
Liabilities:
Accounts payable - 9,789 (7,914) 1,875
Due to bondholders 4,346,379$ 1,699,761$ (1,605,000)$ 4,441,140$
Total liabilities 4,346,379$ 1,709,550$ (1,612,914)$ 4,443,015$
151
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152
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 154
2 Changes in Net Position 156
3 Fund Balances of Governmental Funds 160
4 Changes in Fund Balances of Governmental Funds 162
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 164
6 Principal Property Taxpayers 165
7 Property Tax Levies and Collections 166
8 Direct and Overlapping Property Tax Rates 168
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 172
10 Ratios of General Bonded Debt Outstanding 174
11 Schedule of Direct and Overlapping Bonded Debt 175
12 Legal Debt Margin Information 176
13 Historical Debt Service Coverage 178
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 180
15 General Governmental Tax Revenue by Source 181
16 Taxable Sales by Business Type 182
17 Principal Employers 183
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 184
19 Operating Indicators by Function 186
20 Capital Asset Statistics by Function 188
21 Cardiff Sanitary Division - Summary of Operational Data 192
22 San Dieguito Water District - Summary of Operational Data 196
Sources: Unless otherwise noted, the information in these schedules was derived from the Comprehensive
Annual Financial Reports for the relevant year.
(Unaudited)
153
City of Encinitas
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2020 2019 2018 2017 2016
Government activities:
Net investment in capital assets 181,288,734$ 172,580,765$ 169,553,838$ 165,759,601$ 162,923,350$
Restricted 23,031,942 20,997,390 19,779,315 19,867,542 30,996,309
Unrestricted 528,847 7,357,189 1,963,535 9,510,235 (580,736)
Total governmental activities net position 204,849,523 200,935,344 191,296,688 195,137,378 193,338,923
Business-type activities:
Net investment in capital assets 38,060,921 38,074,788 36,547,324 44,977,544 42,501,264
Restricted 390,925 411,895 421,938 20,237 1,377,006
Unrestricted 105,330,676 99,808,547 95,173,238 79,286,895 75,512,969
Total business-type activities net position 143,782,522 138,295,230 132,142,500 124,284,676 119,391,239
Primary government:
Net investment in capital assets 219,349,655 210,655,553 206,101,162 210,737,145 205,424,614
Restricted 23,422,867 21,409,285 20,201,253 19,887,779 32,373,315
Unrestricted 105,859,523 107,165,736 97,136,773 88,797,130 74,932,233
Total primary government net position 348,632,045$ 339,230,574 323,439,188$ 319,422,054$ 312,730,162$
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
Fiscal Years
154
City of Encinitas
Net Position by Component (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2014 2013 2012 2011
Government activities:
Net investment in capital assets 157,304,041$ 161,902,991$ 157,395,370$ 153,516,469$ 139,575,875$
Restricted 18,741,022 17,363,704 9,980,695 - -
Unrestricted 9,229,896 38,446,880 37,646,551 43,857,634 56,799,902 160
Total governmental activities net position 185,274,959 217,713,575 205,022,616 197,374,103 196,375,777
Business-type activities:
Net investment in capital assets 39,806,764 54,362,661 32,247,941 25,155,766 30,076,172
Restricted - 1,039,739 - - -
Unrestricted 75,781,002 62,426,804 79,816,600 83,232,015 72,608,845 168
Total business-type activities net position 115,587,766 117,829,204 112,064,541 108,387,781 102,685,017
Primary government:
Net investment in capital assets 197,110,805 216,265,652 189,643,311 178,672,235 169,652,047
Restricted 18,741,022 18,403,443 9,980,695 - -
Unrestricted 85,010,898 100,873,684 117,463,151 127,089,649 129,408,747176
Total primary government net position 300,862,725$ 335,542,779$ 317,087,157$ 305,761,884$ 299,060,794$
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
Fiscal Years
155
City of Encinitas
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2020 2019 2018 2017 2016
Expenses:
Government activities:
General government 17,335,001$ 15,280,238$ 14,403,144$ 11,737,634$ 11,750,737$
Public safety 35,791,015 33,160,544 30,762,894 29,437,181 27,255,755
Public works 11,859,286 9,166,709 8,325,467 9,205,570 11,743,123
Planning 7,027,696 6,878,364 8,741,589 6,935,754 7,255,460
Engineering services 6,309,896 6,762,441 7,492,540 8,918,281 4,591,315
Parks and recreation 10,079,123 9,809,964 8,429,448 7,046,255 6,778,769
Interest and fiscal charges on long-term debt 1,569,705 1,655,750 1,755,100 2,237,069 2,494,815
Total governmental activities expenses 89,971,722 82,714,010 79,910,182 75,517,744 71,869,974
Business-type activities:
Cardiff Sanitary Division 3,093,405 3,548,203 3,086,434 3,308,454 3,857,531
San Dieguito Water District 16,503,660 16,615,687 13,800,288 13,970,919 13,462,935
Encinitas Sanitary Division 3,271,260 2,044,676 1,652,061 2,037,116 2,306,540
Affordable Housing 1,676,260 1,576,162 1,464,181 1,449,917 1,440,124
Recreation Programs - - - - -
Total business-type activities expenses 24,544,585 23,784,728 20,002,964 20,766,406 21,067,130
Total primary government expenses 114,516,307 106,498,738 99,913,146 96,284,150 92,937,104
Program revenues:
Government activities:
Charges for services:
General government 1,804,550 1,239,815 1,815,086 1,675,799 1,594,277
Public safety 1,521,745 2,075,725 1,421,393 1,148,567 1,009,713
Public works 1,776 57,786 394,647 65,746 107,279
Planning and building 3,417,094 2,936,898 3,262,604 2,954,523 2,800,413
Engineering services 970,837 1,782,402 1,874,562 1,143,830 1,367,902
Parks and recreation 1,029,655 1,310,426 1,405,704 1,796,918 1,741,619
Operating grants and contributions 4,401,599 4,421,588 3,253,127 3,419,730 3,349,186
Capital grants and contributions 6,784,821 6,626,283 4,851,823 4,407,963 5,409,098
Total governmental activities program revenues 19,932,077 20,450,923 18,278,946 16,613,076 17,379,487
Business-type activities:
Charges for services:
Cardiff Sanitary Division 5,046,841 4,937,942 4,885,227 4,788,884 4,761,486
San Dieguito Water District 16,835,266 15,727,590 16,852,732 14,851,977 14,684,387
Encinitas Sanitary Division 2,744,193 2,698,745 2,711,075 2,819,006 2,855,690
Affordable Housing 270,931 260,848 225,468 213,124 218,148
Recreation Programs - - - - -
Operating grants and contributions 1,246,133 1,142,424 1,093,800 1,099,366 1,068,549
Capital grants and contributions 593,179 728,700 560,651 736,370 681,412
Total business-type activities program revenues 26,736,543 25,496,249 26,328,953 24,508,727 24,269,672
Total primary government program revenues 46,668,620 45,947,172 44,607,899 41,121,803 41,649,159
Governmental activities (70,039,645) (62,263,087) (61,631,236) (58,904,668) (54,490,487)
Business-type activities 2,191,958 1,711,521 6,325,989 3,742,321 3,202,542
Total net revenue (expense)(67,847,687)$ (60,551,566)$ (55,305,247)$ (55,162,347)$ (51,287,945)$
Fiscal Years
156
City of Encinitas
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2014 2013 2012 2011
Expenses:
Government activities:
General government 10,810,882$ 9,549,338$ 10,616,440$ 12,064,527$ 10,912,556$
Public safety 25,762,703 25,146,843 24,629,613 23,062,746 22,324,624
Public works 11,565,315 10,239,746 10,851,147 8,560,330 10,981,355
Planning 6,550,992 5,853,995 4,353,831 5,008,179 5,539,148
Engineering services 6,253,352 3,988,720 3,813,678 5,817,932 3,646,306
Parks and recreation 5,205,986 4,735,864 5,542,550 5,578,716 6,243,769
Interest and fiscal charges on long-term debt 2,311,944 1,913,349 1,932,904 1,811,714 2,029,477
Total governmental activities expenses 68,461,174 61,427,855 61,740,163 61,904,144 61,677,235
Business-type activities:
Cardiff Sanitary Division 4,262,565 2,922,446 3,373,704 3,385,439 3,715,529
San Dieguito Water District 15,005,767 13,552,862 12,200,431 12,448,911 11,622,126
Encinitas Sanitary Division 1,731,770 2,438,692 1,983,786 1,719,176 1,992,334
Affordable Housing 1,408,226 1,405,225 1,499,863 1,492,811 244,748
Recreation Programs 1,331,565 1,300,555 1,153,840 1,187,788 -
Total business-type activities expenses 23,739,893 21,619,780 20,211,624 20,234,125 17,574,737
Total primary government expenses 92,201,067 83,047,635 81,951,787 82,138,269 79,251,972
Program revenues:
Government activities:
Charges for services:
General government 1,629,857 1,800,630 1,775,756 1,789,943 2,453,152
Public safety 160,178 202,220 91,495 99,047 98,202
Public works 759,918 - - - -
Planning and building 2,737,225 2,874,894 1,894,785 2,155,076 1,816,765
Engineering services 1,055,311 1,075,885 955,986 736,786 1,063,822
Parks and recreation 46,846 35,791 39,946 14,580 1,149,350
Operating grants and contributions 3,878,422 4,345,931 3,759,864 5,896,502 6,964,053
Capital grants and contributions 4,126,194 8,756,281 6,462,979 3,626,279 4,854,393
Total governmental activities program revenues 14,393,951 19,091,632 14,980,811 14,318,213 18,399,737
Business-type activities:
Charges for services:
Cardiff Sanitary Division 4,528,551 4,605,867 4,755,573 4,970,662 4,830,204
San Dieguito Water District 14,785,858 15,297,718 13,687,156 12,922,922 12,438,502
Encinitas Sanitary Division 2,841,235 2,879,605 2,933,319 2,897,592 2,895,879
Affordable Housing 247,349 216,728 214,115 214,503 216,723
Recreation Programs 1,321,471 1,269,179 1,059,009 1,273,007 -
Operating grants and contributions 1,061,698 994,607 1,103,639 1,105,851 -
Capital grants and contributions 483,425 1,066,769 1,003,057 460,688 712,827
Total business-type activities program revenues 25,269,587 26,330,473 24,755,868 23,845,225 21,094,135
Total primary government program revenues 39,663,538 45,422,105 39,736,679 38,163,438 39,493,872
Governmental activities (54,067,223) (42,336,223) (46,759,352) (47,585,931) (43,277,498)
Business-type activities 1,529,694 4,710,693 4,544,244 3,611,100 3,519,398
Total net revenue (expense)(52,537,529)$ (37,625,530)$ (42,215,108)$ (43,974,831)$ (39,758,100)$
Fiscal Years
157
City of Encinitas
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2020 2019 2018 2017 2016
General Revenues and Other Changes in Net Position:
Governmental activities:
Taxes
Property and documentary transfer taxes 51,251,719$ 49,237,265$ 46,311,814$ 43,494,220$ 41,210,485$
Sales taxes 13,744,880 13,694,647 13,252,053 12,549,609 14,166,771
Transient occupancy taxes 2,383,060 2,775,771 2,562,484 2,216,145 2,018,024
Franchise taxes 2,539,090 2,571,367 2,587,443 2,545,854 2,794,144
Intergovernmental revenues 182,449 185,380 97,163 251,919 388,876
Investment income 3,030,295 2,613,728 958,172 770,634 611,350
Other general revenues 804,984 827,490 452,275 961,475 956,824
Gain/(Loss) on sale of assets 36,013 12,739 61,400 1,937 8,865
Impairment loss on capital assets - - - (2,088,668) -
Transfers (18,666) (16,644) 20,018 - 399,112
Total governmental activities 73,953,824 71,901,743 66,302,822 60,703,125 62,554,451
Business-type activities:
Property taxes 1,159,681 1,110,248 1,030,168 959,873 906,106
Intergovernmental-unrestricted - - - (31,828) -
Investment income 1,716,759 1,393,446 (446,745) 6,925 (63,690)
Other general revenues 400,228 1,306,547 1,247,955 - 153,667
Gain/(Loss) on sale of assets - 614,324 8,285 216,146 4,010
Transfers 18,666 16,644 (20,018) - (399,112)
Total business-type activities 3,295,334 4,441,209 1,819,645 1,151,116 600,981
Total primary government 77,249,158 76,342,952 68,122,467 61,854,241 63,155,432
Changes in Net Position
Government activities 3,914,179 9,638,656 4,671,586 1,798,457 8,063,964
Business-type activities 5,487,292 6,152,730 8,145,634 4,893,437 3,803,523
Total primary government 9,401,471$ 15,791,386$ 12,817,220$ 6,691,894$ 11,867,487$
The City reports recreation programs as a business-type activity beginning in Fiscal Year 2011-12.
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
Fiscal Years
158
City of Encinitas
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2014 2013 2012 2011
General Revenues and Other Changes in Net Position:
Governmental activities:
Taxes
Property and documentary transfer taxes 38,508,558$ 36,414,507$ 34,974,578$ 32,788,129$ 32,292,988$
Sales taxes 12,569,119 12,067,360 11,585,145 10,613,188 10,244,506
Transient occupancy taxes 1,828,116 1,570,459 1,491,998 1,413,926 1,276,980
Franchise taxes 2,761,335 2,614,844 2,323,616 2,144,162 2,108,420
Intergovernmental revenues 814,337 479,026 541,079 635,097 1,488,770
Investment income 880,989 705,849 552,512 387,066 657,796
Other general revenues 1,567,168 1,257,002 1,596,026 1,780,543 1,695,520
Gain/(Loss) on sale of assets 107,177 (48,320) - - -
Impairment loss on capital assets - - - - -
Transfers (36,068) (33,545) 1,809,656 (668,877) -
Total governmental activities 59,000,731 55,027,182 54,874,610 49,093,234 49,764,980
Business-type activities:
Property taxes 834,994 787,242 749,378 725,551 706,175
Intergovernmental-unrestricted - -189,676 - -
Investment income (60,169) 357,357 3,118 188,259 508,089
Other general revenues 63,768 63,768 - - 401,013
Gain/(Loss) on sale of assets 18,085 (187,942) - - -
Transfers 36,068 33,545 (1,809,656) 668,877 -
Total business-type activities 892,746 1,053,970 (867,484) 1,582,687 1,615,277
Total primary government 59,893,477 56,081,152 54,007,126 50,675,921 51,380,257
Changes in Net Position
Government activities 4,933,508 12,690,959 8,115,258 1,507,303 6,487,482
Business-type activities 2,422,440 5,764,663 3,676,760 5,193,787 5,134,675
Total primary government 7,355,948$ 18,455,622$ 11,792,018$ 6,701,090$ 11,622,157$
The City reports recreation programs as a business-type activity beginning in Fiscal Year 2011-12.
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
Fiscal Years
159
City of Encinitas
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2020 2019 2018 2017 2016
General fund:
Reserved -$ -$ -$ -$ -$
Unreserved, designated - - - - -
Unreserved, undesignated - - - - -
Nonspendable 287,832 266,828 267,203 727,094 1,109,424
Restricted 167,265 383 251 1,472,372 -
Committed 16,208,039 15,545,889 14,691,792 13,937,399 -
Assigned - - - - -
Unassigned 10,542,872 8,609,231 12,334,212 9,514,727 31,775,120
Total general fund 27,206,008$ 24,422,331 27,293,458 25,651,592 32,884,544
All other governmental funds:
Reserved - - - - -
Unreserved, designated - - - - -
Nonspendable - - - 296,234 287,756
Restricted 36,105,367 36,435,142 34,724,312 30,282,525 4,305,652
Committed 18,352,366 24,412,850 17,760,602 18,998,215 1,626,219
Assigned - - - - 24,776,682
Unassigned (13,240,690) (15,438,135) (14,945,248) (12,183,589) -
Total all other governmental funds 41,217,043 45,409,857 37,539,666 37,393,385 30,996,309
Total all governmental funds 68,423,051$ 69,832,188$ 64,833,124$ 63,044,977$ 63,880,853$
(1) GASB No.54 required changes in reporting categories for fund balances and was implemented in Fiscal Year 2010-11.
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
Fiscal Years
160
City of Encinitas
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2014 2013 2012 2011(1)
General fund:
Reserved -$ -$ -$ -$ -$
Unreserved, designated - - - - -
Unreserved, undesignated - - - - -
Nonspendable 1,535,601 2,052,250 1,980,075 2,868,533 2,648,338
Restricted 3,009,269 4,079 7,996,400 - 633,245
Committed 8,266,796 8,136,886 9,847,719 19,371,624 42,274,327
Assigned 561,762 561,762 561,762 - -
Unassigned 28,029,019 25,151,131 21,160,822 17,964,935 1,850,582
Total general fund 41,402,447 35,906,108 41,546,778 40,205,092 47,406,492
All other governmental funds:
Reserved - - - - -
Unreserved, designated - - - - -
Nonspendable - 1,565 - - 145,686
Restricted 18,741,022 17,358,060 13,036,985 13,471,421 8,290,163
Committed - - - - 7,570,021
Assigned - - 2,135,100 2,169,209 -
Unassigned - - - - -
Total all other governmental funds 18,741,022 17,359,625 15,172,085 15,640,630 16,005,870
Total all governmental funds 60,143,469$ 53,265,733$ 56,718,863$ 55,845,722$ 63,412,362$
(1) GASB No.54 required changes in reporting categories for fund balances and was implemented in Fiscal Year 2010-11.
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
Fiscal Years
161
City of Encinitas
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2020 2019 2018 2017 2016
Revenues:
Taxes and assessments 71,064,561$ 69,403,416$ 65,845,166$ 61,934,421$ 61,325,308$
Intergovernmental 9,208,454 7,161,806 6,966,193 6,436,599 6,689,475
Charges for services 6,629,818 7,383,043 7,280,374 6,688,958 6,585,518
Fines, forfeitures, and penalties 655,032 794,237 704,216 850,153 889,388
Use of money and property 3,729,566 3,437,985 1,126,652 1,285,049 1,222,730
Other 3,750,230 3,089,553 2,566,551 2,215,452 2,804,043
Total Revenues 95,037,661 91,270,040 84,489,152 79,410,632 79,516,462
Expenditures:
Current:
General government 13,358,381 12,783,602 12,213,808 10,017,430 9,288,227
Public safety 32,928,307 31,494,405 29,478,104 27,724,959 26,976,136
Public works 7,392,741 5,875,143 5,033,316 6,351,537 6,305,340
Planning and building 6,619,723 6,570,840 6,017,914 5,110,298 5,159,777
Engineering services 3,324,903 3,851,316 3,504,336 4,368,601 4,298,563
Parks and recreation 7,959,300 7,954,529 7,879,881 6,610,308 6,366,337
Capital outlay 18,749,583 11,925,637 12,933,995 12,230,552 10,799,083
Debt service:
Principal 2,025,045 1,949,298 2,128,758 2,853,417 2,783,268
Interest and fiscal charges 1,695,251 1,774,333 1,899,328 2,077,770 2,372,231
Bond issuance costs - - - - -
Total expenditures 94,053,234 84,179,103 81,089,440 77,344,872 74,348,962
Excess (deficiency) of revenues
over (under) expenditures 984,427 7,090,937 3,399,712 2,065,760 5,167,500
Other Financing Sources (Uses):
Transfers in 20,729,350 25,249,787 30,412,724 35,159,839 44,550,246
Transfers out (23,122,914)(27,341,660)(32,024,289)(36,650,845)(45,577,444)
Proceeds from capital lease - - - - -
Proceeds from sale of property - - - - 15,645,000
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)(2,393,564)(2,091,873)(1,611,565)(2,901,636)(1,430,114)
Net change in fund balances (1,409,137)$ 4,999,064$ 1,788,147$ (835,876)$ 3,737,386$
Debt service as a percentage of
noncapital expenditures 4.6%4.8%5.4%6.9%7.5%
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
Fiscal Years
162
City of Encinitas
Changes in Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2014 2013 2012 2011
Revenues:
Taxes and assessments 56,825,628$ 53,830,193$ 51,528,542$ 49,089,142$ 48,100,768$
Intergovernmental 7,022,485 5,025,480 8,520,220 6,537,855 8,369,571
Charges for services 5,315,721 5,479,847 4,450,756 4,406,737 6,376,261
Fines, forfeitures, and penalties 802,936 632,776 611,029 657,364 856,392
Use of money and property 899,807 724,310 572,481 639,676 657,798
Other 2,456,996 3,654,621 2,141,439 2,715,266 3,803,927
Total Revenues 73,323,573 69,347,227 67,824,467 64,046,040 68,164,717
Expenditures:
Current:
General government 9,362,214 9,109,412 9,430,487 9,277,443 10,155,732
Public safety 24,902,920 24,164,979 23,655,367 22,853,121 22,107,692
Public works 6,682,424 6,281,800 6,057,646 5,843,228 6,051,253
Planning and building 5,082,589 4,716,315 4,238,882 4,655,501 5,539,148
Engineering services 4,162,630 3,949,352 3,716,994 3,804,813 3,646,306
Parks and recreation 5,091,224 4,672,683 4,377,047 4,333,303 5,293,664
Capital outlay 18,440,036 14,548,894 18,836,006 12,803,379 8,559,193
Debt service:
Principal 2,730,686 2,661,976 2,295,614 2,359,932 2,481,223
Interest and fiscal charges 2,170,164 1,937,144 2,050,068 1,872,773 2,056,501
Bond issuance costs - - - - 395,404
Total expenditures 78,624,887 72,042,555 74,658,111 67,803,493 66,286,116
Excess (deficiency) of revenues
over (under) expenditures (5,301,314)(2,695,328)(6,833,644)(3,757,453)1,878,601
Other Financing Sources (Uses):
Transfers in 24,514,293 20,570,966 23,363,240 17,661,946 13,133,224
Transfers out (25,509,616)(21,328,768)(24,208,239)(18,354,656)(13,133,224)
Proceeds from capital lease - - 555,384 599,639 -
Proceeds from sale of property 13,174,373 - 7,865,000 - 19,530,000
Issuance of debt - - - - -
Premium on debt - - 131,400 - 215,515
Deposit to escrow for bond refunding - - - - -
Bond discounts - - - - (19,040,000)
Total other financing sources (uses)12,179,050 (757,802)7,706,784 (93,071)705,515
Net change in fund balances 6,877,736$ (3,453,130)$ 873,140$ (3,850,524)$ 2,584,116$
Debt service as a percentage of
noncapital expenditures 7.6%7.8%7.3%7.2%7.6%
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
Fiscal Years
163
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)
2020 15,019,491$ 1,624,044$ 44,910$ 471,498$ 17,159,943$ 0.23819%
2019 14,191,006 1,546,386 44,994 590,531 16,372,917 0.23769%
2018 13,453,667 1,436,502 42,618 433,992 15,366,779 0.23749%
2017 12,622,536 1,390,398 41,805 417,474 14,472,213 0.24019%
2016 11,864,809 1,359,004 41,187 437,972 13,702,972 0.23978%
2015 11,073,358 1,323,412 39,665 433,569 12,870,004 0.24534%
2014 10,393,910 1,300,287 39,501 413,663 12,147,361 0.24570%
2013 10,030,357 1,247,785 37,766 408,020 11,723,928 0.23974%
2012 9,886,681 1,154,923 34,944 421,308 11,497,856 0.23866%
2011 9,767,731 1,110,811 36,036 427,619 11,342,197 0.23472%
(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
$16,000,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Taxable Assessed Value
(In thousands)
Residential
Commercial
Industrial
Fiscal Years
164
City of Encinitas
Principal Property Taxpayers
Current Fiscal Year and Nine Years Ago
Taxable % of Total Taxable % of Total
Assessed City Assessed Assessed City Assessed
Secured Value Rank Secure Value Secured Value Rank Secure Value
TRC Encinitas Village LLC 102,502,299$ 1 0.60%-$ - -
Collwood Pines Apartments 81,811,027 2 0.48%54,989,195 1 0.49%
Belmont Village 60,651,170 3 0.35%34,888,651 3 0.31%
Pacifico Encinitas Apartment 53,937,600 4 0.31%- - -
Encinitas Town Center Association 39,647,819 5 0.23%32,047,374 7 0.28%
NCHC3 LLC 37,437,936 6 0.22%- - -
Weingarten Nostat Inc 36,726,296 7 0.21%- - -
Encinitas MarketPlace LLC 32,402,500 8 0.19%- - -
SS L Landlord LLC 26,415,600 9 0.15%- - -
Mission Ridge LLC 25,776,141 10 0.15%- - -
Vons Companies Inc.25,021,750 11 0.15%23,656,410 10 0.21%
Paul H Meardon Trust 24,778,879 12 0.14%- - -
RPG Pacifica Station LLC 24,480,000 13 0.14%- - -
Keith B. and Sara S. Harrison 22,998,798 14 0.13%13,783,984 24 0.12%
Shea Homes LP 22,399,779 15 0.13%- - -
RAF Pacifica Encinitas 21,450,000 16 0.13%- - -
Quail Pointe Apartment Homes LP 21,420,297 17 0.12%18,521,307 16 0.16%
Sterling Family Trust 19,859,936 18 0.12%17,088,066 18 0.15%
Plenc El Camino LLC 19,565,707 19 0.11%16,762,733 20 0.15%
Los Angeles Fitness Int'l LLC 19,555,774 20 0.11%- - -
Home Depot USA Inc.18,283,005 21 0.11%30,141,290 9 0.27%
Encinitas Beach Hotel Venture 17,079,828 22 0.10%- - -
Camino Village LLC 16,325,186 23 0.10%- - -
Essex Heights LLC 16,264,417 24 0.09%- - -
Golden Eagle Annuity Invest LP 15,994,271 25 0.09%- - -
PK III Encinitas Marketplace LP - - - 39,923,138 2 0.35%
John W. and Jeanne M. Skow - - - 33,184,744 4 0.29%
North Coast Health Center LLC - - - 32,167,480 5 0.28%
Lofts at Moonlight Beach LLC - - - 32,157,075 6 0.28%
WRI El Camino LP - - - 31,738,510 8 0.28%
Urschel Laboratories Inc.- - - 22,349,242 11 0.20%
ASN Encinitas LLC - - - 22,340,551 12 0.20%
North Coast Business Park - - - 21,902,917 13 0.19%
SDCC Properties - - - 21,796,618 14 0.19%
KSL Encinitas Resort Corporation - - - 21,485,238 15 0.19%
Encinitas Plaza LLC - - - 17,237,911 17 0.15%
Scripps Health - - - 17,027,828 19 0.15%
Hughes Encinitas Limited - - - 16,359,579 21 0.14%
Encinitas Terraces LLC - - - 14,023,187 22 0.12%
Terramar Retail Centers LLC - - - 13,990,000 23 0.12%
Bellflower Capital LP - - - 13,606,399 25 0.12%
802,786,015.00 4.66%613,169,427$ 5.29%
Source: HdL Companies
Taxpayer
2020 2011
165
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
2020 55,190,058$ 54,143,122$ 98.10%-$ 54,143,122$ 98.10%
2019 53,427,075 52,652,248 98.55%540,612 52,652,248 98.55%
2018 50,804,445 50,172,791 98.76%171,827 50,344,617 99.09%
2017 48,540,436 47,871,961 98.62%330,704 48,202,665 99.30%
2016 34,443,972 33,961,174 98.60%235,730 34,196,904 99.28%
2015 32,251,814 31,755,994 98.46%168,077 31,924,071 98.98%
2014 30,550,301 30,009,574 98.23%133,208 30,142,782 98.67%
2013 29,207,237 28,712,036 98.30%157,287 28,869,323 98.84%
2012 28,100,611 27,540,858 98.01%238,418 27,779,276 98.86%
2011 27,541,487 26,888,921 97.63%548,636 27,437,557 99.62%
Source: County of San Diego Auditor and Controller: Property Tax Apportionment
Total Collections to Date
Collected within the
Fiscal Year of Levy
166
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167
City of Encinitas
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
2020 2019 2018 2017 2016
%%%%%
City of Encinitas Basic Rate 0.23819 0.23769 0.23695 0.23644 0.23978
City of Encinitas Total Direct Rate (1)0.23819 0.23769 0.23695 0.23644 0.23978
Overlapping Rates: (2)
City of Encinitas 0.24020 0.24020 0.24020 0.24020 0.24020
Encinitas Landscape & Lighting District 0.02100 0.02100 0.02100 0.02100 0.02100
Autistic Pupils Minors Elementary 0.00000 0.00000 0.00000 0.00000 0.00000
Autistic Pupils Minors High 0.00000 0.00000 0.00000 0.00000 0.00000
Cardiff, Encinitas Elementary 0.24870 0.24870 0.24870 0.24870 0.24870
Children's Institutions Tuition 0.00107 0.00107 0.00107 0.00107 0.00107
County General 0.08020 0.08020 0.08020 0.08020 0.08020
County Library 0.01969 0.01969 0.01969 0.01969 0.01969
County School Service 0.00643 0.00643 0.00643 0.00643 0.00643
County School Service-Capital Outlay 0.00161 0.00161 0.00161 0.00161 0.00161
County Service Area No. 17 0.00251 0.00251 0.00251 0.00251 0.00251
CWA San Dieguito Water District, OMWD 0.02510 0.02510 0.02510 0.02510 0.02510
Development Centers for Handicapped Elementary 0.00000 0.00000 0.00000 0.00000 0.00000
Development Centers for Handicapped High 0.00000 0.00000 0.00000 0.00000 0.00000
Educable Mentally Retarded Minors 0.00161 0.00161 0.00161 0.00161 0.00161
Educational Revenue Augmentation Fund 0.08620 0.08620 0.08620 0.08620 0.08620
Mira Costa Community College 0.08150 0.08150 0.08150 0.08150 0.08150
Physically Handicapped Minors Elementary 0.00268 0.00268 0.00268 0.00268 0.00268
Physically Handicapped Minors High 0.00268 0.00268 0.00268 0.00268 0.00268
Regional Occupational Centers 0.00375 0.00375 0.00375 0.00375 0.00375
San Dieguito Union High 0.13610 0.13610 0.13610 0.13610 0.13610
San Dieguito 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
Oceanside (19/85001),Vista (19/85701) Projects 0.00000 0.00000 0.00000 0.00000 0.00000
Total Prop 13 Rate (3)1.00000 1.00000 1.00000 1.00000 1.00000
(1) Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical
section information.
(2) General Fund tax rates are representative and based upon the direct and overlapping rates for the largest General Fund
tax rate area (TRA) by net taxable value.
Fiscal Years
(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;
168
City of Encinitas
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
2015 2014 2013 2012 2011
%%%%%
City of Encinitas Basic Rate 0.24534 0.24002 0.23974 0.23866 0.23472
City of Encinitas Total Direct Rate (1)0.24534 0.24002 0.23974 0.23866 0.23472
Overlapping Rates: (2)
City of Encinitas 0.24020 0.24020 0.24020 0.24020 0.26648
Encinitas Landscape & Lighting District 0.02100 0.02100 0.02100 0.02100 0.01596
Autistic Pupils Minors Elementary 0.00000 0.00000 0.00000 0.00000 0.00009
Autistic Pupils Minors High 0.00000 0.00000 0.00000 0.00000 0.00009
Cardiff, Encinitas Elementary 0.24870 0.24870 0.24870 0.24870 0.26240
Children's Institutions Tuition 0.00107 0.00107 0.00107 0.00107 0.00146
County General 0.08020 0.08020 0.08020 0.08020 0.07570
County Library 0.01969 0.01969 0.01969 0.01969 0.01995
County School Service 0.00643 0.00643 0.00643 0.00643 0.00687
County School Service-Capital Outlay 0.00161 0.00161 0.00161 0.00161 0.00173
County Service Area No. 17 0.00251 0.00251 0.00251 0.00251 0.00291
CWA San Dieguito Water District, OMWD 0.02510 0.02510 0.02510 0.02510 0.00344
Development Centers for Handicapped Elementary 0.00000 0.00000 0.00000 0.00000 0.00043
Development Centers for Handicapped High 0.00000 0.00000 0.00000 0.00000 0.00044
Educable Mentally Retarded Minors 0.00161 0.00161 0.00161 0.00161 0.00196
Educational Revenue Augmentation Fund 0.08620 0.08620 0.08620 0.08620 0.08570
Mira Costa Community College 0.08150 0.08150 0.08150 0.08150 0.08590
Physically Handicapped Minors Elementary 0.00268 0.00268 0.00268 0.00268 0.00303
Physically Handicapped Minors High 0.00268 0.00268 0.00268 0.00268 0.00304
Regional Occupational Centers 0.00375 0.00375 0.00375 0.00375 0.00438
San Dieguito Union High 0.13610 0.13610 0.13610 0.13610 0.14400
San Dieguito Water District 0.03590 0.03590 0.03590 0.03590 0.00992
Trainable Mentally Retarded Minors Elementary 0.00161 0.00161 0.00161 0.00161 0.00197
Trainable Mentally Retarded Minors High 0.00161 0.00161 0.00161 0.00161 0.00198
Oceanside (19/85001),Vista (19/85701) Projects 0.00000 0.00000 0.00000 0.00000 0.00017
Total Prop 13 Rate (3)1.00000 1.00000 1.00000 1.00000 1.00000
(3) In 1978, the voters of the State of California passed Proposition 13, which limited property taxes to a total maximum
rate of one percent based upon the assessed value of the property being taxed. Each year the assessed value of property
may be increased by an "inflation factor" (limited to a maximum increase of two percent). 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.
Notes:
(2) General Fund tax rates are representative and based upon the direct and overlapping rates for the largest General
Fund tax rate area (TRA) by net taxable value.
Fiscal Years
169
City of Encinitas
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
2020 2019 2018 2017 2016
%%%%%
Gen Bond Cardiff 2000A 0.03727 0.03737 0.03028 - -
Gen Bond Cardiff 2000 Election,2010 Ref. Bonds - - - 0.03192 0.03324
MWD D/S Remainder of SDCWA 1501999 0.00350 0.00350 0.00350 0.00350 0.00350
Total Voter Approved Rate 0.04077 0.04087 0.03378 0.03542 0.03674
Total Tax Rate 1.04077 1.04087 1.03378 1.03542 1.03674
Source: HdL Companies; County of San Diego Office of Property Tax Services
Fiscal Years
170
City of Encinitas
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
2015 2014 2013 2012 2011
%%%%%
Gen Bond Cardiff 2000A - - - - -
Gen Bond Cardiff 2000 Election,2010 Ref. Bonds 0.03554 0.03386 0.03458 0.03489 0.03715
MWD D/S Remainder of SDCWA 1501999 0.00350 0.00350 0.00350 0.00370 0.00370
Total Voter Approved Rate 0.03904 0.03736 0.03808 0.03859 0.04085
Total Tax Rate 1.03904 1.03736 1.03808 1.03859 0.04085
Source: HdL Companies; County of San Diego Office of Property Tax Services
Fiscal Years
171
City of Encinitas
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Fiscal Year
Ended
June 30 Bonded Debt Capital Leases
Total Governmental
Activities
2020 42,897,904$ 890,053$ 43,787,957$
2019 44,899,354 1,220,867 46,120,221
2018 46,830,807 1,633,559 48,464,366
2017 48,953,813 2,205,282 51,159,095
2016 52,933,882 2,050,840 54,984,722
2015 55,431,687 2,513,713 57,945,400
2014 44,546,848 2,964,400 47,511,248
2013 46,736,383 3,446,376 50,182,759
2012 40,645,759 3,281,606 43,927,365
2011 42,641,535 3,036,899 45,678,434
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
(1) Debt per Capita is calculated by dividing the total primary government amount by the City
population shown on the Demographic and Economic statistical page.
Governmental Activities
172
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)
2020 5,992,487$ 11,882,425$ 1,008,914$ 18,883,826$ 62,671,783$ 1,008
2019 7,201,858 12,226,938 1,091,629 20,520,425 66,640,646 1,051
2018 8,376,231 12,960,295 1,173,058 22,509,584 70,973,950 1,124
2017 9,510,602 1,559,300 1,253,177 12,323,079 63,482,174 1,019
2016 10,609,973 2,205,893 1,331,410 14,147,276 69,131,998 1,117
2015 11,669,345 2,833,824 1,391,715 15,894,884 73,840,284 1,200
2014 13,645,000 3,447,591 1,444,731 18,537,322 66,048,570 1,079
2013 14,670,000 4,045,028 1,495,415 20,210,443 70,393,202 1,162
2012 15,660,000 4,625,969 1,544,434 21,830,403 65,757,768 1,090
2011 16,620,000 5,300,000 1,591,681 23,511,681 69,190,115 1,147
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
population shown on the Demographic and Economic statistical page.
(1) Debt per Capita is calculated by dividing the total primary government amount by the City
Business-type Activities
173
City of Encinitas
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Fiscal Certificates of Participation Percentage
Year Ended and Assessed of Assessed Per
June 30 Lease Revenue Bonds Valuation (1)Value Capita
2020 42,897,904$ 17,159,943,000$ 0.25%690
2019 44,899,354 16,372,917,000 0.27%708
2018 46,830,807 15,366,779,000 0.30%741
2017 48,953,813 14,472,213,000 0.34%786
2016 52,933,882 13,702,972,000 0.39%855
2015 55,431,687 12,870,004,000 0.43%901
2014 44,546,848 12,147,361,000 0.37%728
2013 46,736,383 11,723,928,000 0.40%772
2012 40,645,759 11,497,856,000 0.35%674
2011 42,641,535 11,342,197,000 0.38%712
Source: Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020
(1) Assessed valuation has been used because the actual market value of taxable property is not readily available in the State
of California. The assessed valuation information can be found in the Assessed Value and Estimated Actual Value of Taxable
Property schedule of the Statistical Section.
Notes: Details regarding the City's outstanding debt can be found in the Notes to the Basic Financial Statements. General
bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds of
which, the City has none.
Outstanding General Bonded Debt
174
City of Encinitas
Schedule of Direct and Overlapping Bonded Debt
June 30, 2020
FY 2019-20 Assessed Valuation:$17,161,621,182 City's Share of
Total Debt Applicable Overlapping Debt
June 30, 2020 % (1)June 30, 2020
OVERLAPPING TAX AND ASSESSMENT DEBT:
Metropolitan Water District 37,300,000$ 0.555%207,015$
Mira Costa Community College District 71,270,000 15.044%10,721,859
Cardiff School District 23,899,573 100.000%23,899,573
Encinitas Union School District 46,395,383 68.135%31,611,494
San Dieguito Union High School 347,365,000 24.779%86,073,573
San Dieguito Union High School District Community Facilities Districts 37,230,000 31.492%11,724,628
City of Encinitas Community Facilities District No. 1 22,300,000 100.000%22,300,000
Olivenhain Municipal Water District, Assessment District No. 96-1 7,130,000 26.062%1,858,221
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 188,396,363$
DIRECT AND OVERLAPPING GENERAL FUND DEBT
San Diego County General Fund Obligations 231,350,000$ 3.085%7,137,148$
San Diego County Pension Obligations 456,040,000 3.085%14,068,834
San Diego County Superintendent of Schools Obligations 9,350,000 3.085%288,448
San Dieguito Union High School District General Fund Obligations 12,730,000 24.779%3,154,367
City of Encinitas Bonded Debt 41,290,000 100.000%41,290,000
City of Encinitas Bond Premiums and Discounts 1,607,904 100.000%1,607,904
City of Encinitas Capital Leases 890,053 100.000%890,053
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 68,436,754$
TOTAL DIRECT DEBT 43,787,957$
TOTAL OVERLAPPING DEBT 213,045,160$
COMBINED TOTAL DEBT 256,833,117$ (2)
(1)The percentage of overlapping applicable to the City is estimated using taxable assessed property value. Applicable
percentages were estimated by determining the portion of the overlapping districts' assessed value that is within the
City divided by the districts' total taxable assessed value.
(2)Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and non-bonded capital lease obligations.
Ratios to FY 2019-20 Assessed Valuation:
Total Overlapping Tax and Assessment Debt..…………………………….1.10%
Total Direct Debt ($ 43,787,957).……...……..….……………………….…0.26%
Combined Total Debt…...…….………….….….…….………....…………….1.50%
Source: County of San Diego Assessor
175
City of Encinitas
Legal Debt Margin Information
Last Ten Fiscal years
(In thousands)
2020 2019 2018 2017 2016
Assessed valuation 17,159,943$ 16,372,917$ 15,366,779$ 14,472,213$ 13,702,972$
Conversion percentage equal 25%25%25%25%25%
to 25% of assessed valuation
Adjusted assessed valuation 4,289,986 4,093,229 3,841,695 3,618,053 3,425,743
Debt limit percentage 15%15%15%15%15%
Debt limit 643,498 613,984 576,254 542,708 513,861
Total net debt applicable to limit:42,898 44,899 46,831 48,954 52,934
Legal debt margin 600,600$ 569,085$ 529,423$ 493,754$ 460,927$
Total debt applicable to the limit
as a percentage of debt limit 6.67%7.31%8.13%9.02%10.30%
Notes: Details regarding the City's outstanding debt can be found in the Notes to the Financial
Statements section.
Source: HdL Companies
Fiscal Years
The Government Code of the State of California provides for a legal debt limit of 15 percent of gross assessed valuation.
However, this provision was enacted when assessed valuation was based upon 25 percent of market value. Effective with
Fiscal Year 1981-82, each parcel is assessed at 100 percent of market value (as of the most recent change in ownership for
that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the
current full valuation perspective to the 25 percent level that was in effect at the time that the legal debt margin was enacted by
the State of California for local governments located within the state.
176
City of Encinitas
Legal Debt Margin Information (Continued)
Last Ten Fiscal years
(In thousands)
2015 2014 2013 2012 2011
Assessed valuation 12,870,004$ 12,147,361$ 11,723,928$ 11,497,856$ 11,342,197$
Conversion percentage equal 25%25%25%25%25%
to 25% of assessed valuation
Adjusted assessed valuation 3,217,501 3,036,840 2,930,982 2,874,464 2,835,549
Debt limit percentage 15%15%15%15%15%
Debt limit 482,625 455,526 439,647 431,170 425,332
Total net debt applicable to limit:55,432 44,547 46,736 40,646 42,641
Legal debt margin 427,193$ 410,979$ 392,911$ 390,524$ 382,691$
Total debt applicable to the limit
as a percentage of debt limit 11.49%9.78%10.63%9.43%10.03%
Notes: Details regarding the City's outstanding debt can be found in the Notes to the Financial
Statements section.
Source: HdL Companies
Fiscal Years
The Government Code of the State of California provides for a legal debt limit of 15 percent of gross assessed valuation.
However, this provision was enacted when assessed valuation was based upon 25 percent of market value. Effective with
Fiscal Year 1981-82, each parcel is assessed at 100 percent of market value (as of the most recent change in ownership for that
parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full
valuation perspective to the 25 percent level that was in effect at the time that the legal debt margin was enacted by the State of
California for local governments located within the state.
177
City of Encinitas
Historical Debt Service Coverage
Last Ten Fiscal Years
2020 2019 2018 2017 2016
Revenues:
Operating revenues - including connection fees 17,121,649$ 15,961,300$ 17,219,494$ 15,142,544$ 14,852,061$
Non-operating revenues 1,902,231 2,307,498 1,092,337 1,048,764 1,013,297
Gross Revenues 19,023,880 18,268,798 18,311,831 16,191,308 15,865,358
Total Operating & Non-Operating Expenses 16,429,284 16,541,314 15,198,929 14,263,288 13,800,671
Net Income 2,594,596 1,727,484 3,112,902 1,928,020 2,064,687
Add:
Interest expense 247,063 292,354 328,050 366,740 412,108
Depreciation and amortization expense 1,830,492 2,208,775 1,848,913 978,627 1,514,716
Net Revenues Available for Debt Service 4,672,151 4,228,613 5,289,865 3,273,387 3,991,511
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 133,619 152,919 171,619 191,244 211,144
2007 Note Payable to Financing Authority - Principal Payments 490,000 475,000 455,000 440,000 415,000
2014 Water Revenue Refunding Bonds - Interest Charges 126,500 148,775 167,225 185,075 202,400
2014 Water Revenue Refunding Bonds - Principal Payments 645,000 625,000 605,000 585,000 570,000
Total Debt Service 1,395,119$ 1,401,694$ 1,398,844$ 1,401,319$ 1,398,544$
Coverage by Net Revenues Available for Debt Service 335%302%378%234%285%
2020 2019 2018 2017 2016
Revenues:
Operating revenues - including connection fees (1)5,335,578$ 5,013,316$ 5,081,021$ 5,006,574$ 4,862,274$
Non-operating revenues 581,284 496,059 162,951 140,095 149,151
Gross Revenues 5,916,862 5,509,375 5,243,972 5,146,669 5,011,425
Total Operating & Non-Operating Expenses 3,797,174 3,548,203 3,578,417 3,380,180 3,949,288
Net Income 2,119,688 1,961,172 1,665,555 1,766,489 1,062,137
Add:
Interest expense 451,938 472,324 491,983 71,727 91,757
Depreciation and amortization expense 443,689 389,390 386,019 754,400 1,303,272
Net Revenues Available for Debt Service 3,015,315 2,822,886 2,543,557 2,592,616 2,457,166
Less: Debt Service
2003 Note Payable to SEJPA - Interest Charges - - - - -
2003 Note Payable to SEJPA - Principal Payments - - - - -
2011 Note Payable to SEJPA - Interest Charges 3,234 29,788 55,402 79,889 91,757
2011 Note Payable to SEJPA - Principal Payments 57,500 663,846 640,352 612,192 593,530
2017 Note Payable to SEJPA-Interest Charges 451,388 451,388 294,656 - -
2017 Note Payable to SEJPA-Principal Payments 217,500 - - - -
Total Debt Service 729,622$ 1,145,021$ 990,410$ 692,081$ 685,287$
Coverage by Net Revenues Available for Debt Service 413%247%257%375%359%
Source: City of Encinitas Finance Department
Debt service coverage requirement is a minimum 110 percent of net revenue including connection fees.
The above schedules include connection fees in operating revenues.
San Dieguito Water District
Cardiff Sanitary Division
Debt service coverage requirement is a minimum 115 percent of net revenue including connection fees. The above schedules include connection
fees in operating revenues.
178
City of Encinitas
Historical Debt Service Coverage (Continued)
Last Ten Fiscal years
2015 2014 2013 2012 2011
Revenues:
Operating revenues - including connection fees 15,152,433$ 15,715,575$ 13,789,636$ 13,170,422$ 12,574,450$
Non-operating revenues 927,526 827,676 869,568 813,610 817,872
Gross Revenues 16,079,959 16,543,251 14,659,204 13,984,032 13,392,322
Total Operating & Non-Operating Expenses 15,481,543 14,066,485 12,198,228 12,448,911 11,614,631
Net Income 598,416 2,476,766 2,460,976 1,535,121 1,777,691
Add:
Interest expense 475,775 622,075 657,963 698,908 725,936
Depreciation and amortization expense 2,271,907 1,490,806 1,476,044 1,294,904 1,196,007
Net Revenues Available for Debt Service 3,346,098 4,589,647 4,594,983 3,528,933 3,699,634
Less: Debt Service Paid
2004 Water Revenue Refunding Bonds - Interest Charges 144,720 380,731 408,906 433,950 452,244
2004 Water Revenue Refunding Bonds - Principal Payments 665,000 640,000 615,000 595,000 575,000
2007 Note Payable to Financing Authority - Interest Charges 224,994 241,344 256,744 270,352 281,494
2007 Note Payable to Financing Authority - Principal Payments 405,000 385,000 375,000 365,000 350,000
2014 Water Revenue Refunding Bonds - Interest Charges 106,061 - - - -
2014 Water Revenue Refunding Bonds - Principal Payments - - - - -
Total Debt Service 1,545,775$ 1,647,075$ 1,655,650$ 1,664,302$ 1,658,738$
Coverage by Net Revenues Available for Debt Service 216%279%278%212%223%
2015 2014 2013 2012 2011
Revenues:
Operating revenues - including connection fees (1)4,615,399$ 4,758,606$ 4,755,573$ 5,087,182$ 5,337,717$
Non-operating revenues 120,668 1,216,941 39,015 79,347 355,974
Gross Revenues 4,736,067 5,975,547 4,794,588 5,166,529 5,693,691
Total Operating & Non-Operating Expenses 4,371,847 3,189,268 3,310,986 3,385,439 3,746,748
Net Income 364,220 2,786,279 1,483,602 1,781,090 1,946,943
Add:
Interest expense 109,282 266,822 142,898 248,400 267,533
Depreciation and amortization expense 1,555,955 200,459 800,000 404,640 932,273
Net Revenues Available for Debt Service 2,029,457 3,253,560 2,426,500 2,434,130 3,146,749
Less: Debt Service
2003 Note Payable to SEJPA - Interest Charges - - - 255,000 273,800
2003 Note Payable to SEJPA - Principal Payments - - - 490,000 470,000
2011 Note Payable to SEJPA - Interest Charges 109,282 131,967 142,898 28,945 -
2011 Note Payable to SEJPA - Principal Payments 579,366 563,037 546,540 25,000 -
2017 Note Payable to SEJPA-Interest Charges - - - - -
2017 Note Payable to SEJPA-Principal Payments - - - - -
Total Debt Service 688,648$ 695,004$ 689,438$ 798,945$ 743,800$
Coverage by Net Revenues Available for Debt Service 295%468%352%305%423%
Source: City of Encinitas Finance Department
Debt service coverage requirement is a minimum 110 percent of net revenue including connection fees.
The above schedules include connection fees in operating revenues.
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
179
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
2020 62,183 2.2%(1.90%)43.1 2.60 9.6%
2019 63,390 1.9%0.37%42.9 2.56 2.6%
2018 63,158 1.9%1.40%41.5 2.45 2.8%
2017 62,288 1.9%0.64%41.5 2.50 3.8%
2016 61,893 1.9%0.61%41.5 2.50 4.5%
2015 61,518 2.0%0.51%41.5 2.50 4.2%
2014 61,204 2.1%1.05%41.5 2.49 5.2%
2013 60,568 2.0%0.37%41.5 2.50 5.5%
2012 60,346 2.0%0.73%42.2 2.45 9.2%
2011 59,910 2.0%0.47%42.0 2.50 7.3%
NOTE: City population figures have been revised to match updated population from the California State
Department of Finance as of January 1, 2020.
Sources: California Department of Finance; US Census Bureau QuickFacts; Employment Development Department
180
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
2020 51,251,719$ 13,744,880$ 2,383,060$ 2,539,090$ 69,918,749$
2019 49,237,265 13,694,647 2,775,771 2,571,367 68,279,050
2018 46,311,814 13,252,053 2,562,484 2,587,443 64,713,794
2017 43,494,220 12,549,609 2,216,145 2,545,854 60,805,828
2016 41,210,486 14,166,771 1,616,171 2,358,567 59,351,995
2015 38,508,558 12,569,119 1,828,116 2,761,335 55,667,128
2014 36,414,507 12,067,360 1,570,459 2,614,844 52,667,170
2013 34,974,578 11,585,145 1,491,998 2,323,616 50,375,337
2012 32,788,129 10,613,188 1,413,926 2,144,162 46,959,405
2011 32,292,988 10,244,506 1,276,980 2,108,420 45,922,894
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
$60,000,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Total General Governmental Tax Revenues
Property Tax
Sales Tax
Transient Occupancy Tax
Franchise Tax
Fiscal Years
181
City of Encinitas
Taxable Sales by Business Type
Last Ten Fiscal Years
2020 2019 2018 2017 2016
Autos and Transportation 1,703,500$ 1,806,753$ 1,744,199$ 1,627,531$ 1,684,618$
Building and Construction 959,367 1,133,022 924,933 1,021,600 980,140
Business and Industry 730,647 629,112 567,665 623,641 738,490
Food and Drugs 1,109,984 1,110,862 1,010,551 931,650 1,005,870
Fuel and Service Stations 1,099,387 1,630,124 1,025,386 1,191,164 1,382,946
General Consumer Goods 3,181,523 3,812,472 3,400,696 3,492,330 3,535,734
Restaurants and Hotels 2,140,574 2,560,108 2,274,664 2,264,487 2,113,116
Total 10,924,982$ 12,682,453$ 10,948,094$ 11,152,403$ 11,440,914$
2015 2014 2013 2012 2011
Autos and Transportation 1,638,839$ 1,519,006$ 1,446,737$ 1,427,132$ 1,330,270$
Building and Construction 944,334 887,182 820,467 868,790 774,109
Business and Industry 556,835 573,032 560,723 518,699 537,840
Food and Drugs 1,028,085 1,001,942 1,003,491 995,511 945,542
Fuel and Service Stations 1,500,416 1,559,342 1,577,783 1,569,265 1,351,288
General Consumer Goods 3,476,481 3,355,540 3,165,746 3,117,547 2,818,809
Restaurants and Hotels 1,978,072 1,825,971 1,699,705 1,624,007 1,442,976
Total 11,123,062$ 10,722,015$ 10,274,652$ 10,120,951$ 9,200,834$
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.
182
City of Encinitas
Principal Employers
Current Fiscal Year and Nine Years Ago
% of Total City % of Total City
Employer Industry Employees Rank Employment Employees Rank Employment
Scripps Memorial Hospital Health Care & Social Assistance 1,017 1 3.22%650 1 2.34%
Paul Ecke Ranch Agriculture 453 2 1.43%250 5 0.90%
Walmart Supercenter Retail 335 3 1.06%- - -
Home Depot Retail 303 4 0.96%250 3 0.90%
Encinitas Union School Dist Education 300 5 0.95%- - -
YMCA Recreation Facilities 300 6 0.95%300 2 1.08%
Scripps Rehabilitation Services Health Care & Social Assistance 265 7 0.84%- - -
Target Retail 250 8 0.79%250 4 0.90%
San Diego Hebrew Homes Health Care & Social Assistance 220 9 0.70%220 6 0.79%
Objectiva Software Solutions Technology 201 10 0.64%- - -
Quality Children's Services Child Care Services - - - 205 7 0.74%
California Bank & Trust Financial Services - - - 200 10 0.72%
Encinitas City Hall Government Office - - - 200 9 0.72%
Seacrest Village Retire Community Health Care & Social Assistance - - - 200 8 0.72%
Subtotal Employees 3,644 9.00%2,725 8.37%
Total Employees 31,600 27,772
Note: Total Employees number is historical data from zip codes 92007, 92023 and 92024.
Source: Data Axle
2020 2011
183
City of Encinitas
Full-Time and Part-Time Employees by Function
Last Ten Fiscal Years
Function 2020 2019 2018 2017 2016
General government 50.05 49.55 44.60 46.75 46.75
Public safety 70.00 69.00 69.00 69.00 69.00
Public works 34.00 34.00 27.55 28.55 28.55
Engineering services*- - - 27.17 27.17
Parks and recreation 21.25 21.25 22.25 20.18 20.18
Planning and building*- - - 27.25 27.25
Development services*48.00 48.00 53.00 - -
Subtotal 223.30 221.80 216.40 218.90 218.90
San Dieguito Water District 24.00 24.00 24.00 24.00 24.00
Fiscal Years
Function 2015 2014 2013 2012 2011
General government 46.75 44.75 44.75 44.55 44.25
Public safety 66.00 66.00 63.00 63.00 63.00
Public works 28.55 29.55 29.25 28.85 28.85
Engineering services*27.17 27.17 26.42 27.42 27.47
Parks and recreation 20.18 21.18 21.18 21.18 21.18
Planning and building*27.25 27.25 26.75 26.75 26.75
Development services*- - - - -
Subtotal 215.90 215.90 211.35 211.75 211.50
San Dieguito Water District 24.00 23.00 25.00 25.40 25.40
*Engineering and Planning/Building merged into Development Services during FY 2017-18.
Fiscal Years
Source: City of Encinitas Human Resources Department
184
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185
City of Encinitas
Operating Indicators by Function
Last Ten Fiscal years
2020 2019 2018 2017 2016
San Diego County Sheriff's Department
Criminal arrests 1,061 1,161 1,130 1,612 1,997
Traffic arrests 202 355 213 201 263
Traffic accidents 221 281 307 289 274
Traffic citations 7,009 9,635 5,501 4,891 14,873
Calls for service 19,406 19,190 20,019 19,372 22,518
Deputy initiated action 21,106 25,725 22,612 24,625 27,481
Fire:
Number of emergency fire calls 476 934 532 283 328
Number of EMS/rescue 4,031 6,270 4,775 4,717 4,098
Other 1,532 1,711 2,382 1,035 1,517
Inspections 1,532 2,198 3,145 2,122 2,133
Engineering:
Number of permits issued 360 399 424 440 436
Parks and recreation:
Number of recreation class registrations 10,310 17,812 15,444 16,338 15,500
Number of facility rentals 491 550 537 492 538
Planning and building:
Number of planning permits issued 242 194 222 276 263
Number of new dwelling units issued 76 71 160 94 117
Environmental review 4 6 3 7 4
Appeals 7 5 6 6 11
Plan checks 2,464 2,409 2,147 1,807 2,339
Code enforcement complaints 1,341 1,090 878 1,282 1,199
Water:
New connections 225 114 50 39 77
Average daily consumption (millions of gallons)4.71 4.82 5.21 4.85 4.56
Sewer:
New connections 16 14 62 65 33
Average daily sewage treatment (millions of gallons)1.26 1.21 2.20 2.27 2.20
The City of Encinitas contracts with the County of San Diego Sheriff's Department to provide
law enforcement services.
Source: City of Encinitas Fire, Parks, Recreation and Cultural Arts, Development Services, and San Dieguito Water District
186
City of Encinitas
Operating Indicators by Function (Continued)
Last Ten Fiscal years
2015 2014 2013 2012 2011
San Diego County Sheriff's Department
Criminal arrests 1,743 1,595 1,548 1,231 1,047
Traffic arrests 551 331 383 485 535
Traffic accidents 297 323 372 441 472
Traffic citations 13,650 10,357 11,381 11,349 12,024
Calls for service 21,335 19,394 20,559 20,150 20,602
Deputy initiated action 27,339 29,849 31,281 29,862 29,224
Fire:
Number of emergency fire calls 300 383 102 124 96
Number of EMS/rescue 3,844 3,806 3,697 3,495 3,498
Other 1,265 1,458 1,932 1,737 1,520
Inspections 2,072 2,143 2,163 2,252 2,263
Engineering:
Number of permits issued 383 351 269 392 397
Parks and recreation:
Number of recreation class registrations 16,289 16,236 11,175 11,119 10,697
Number of facility rentals 557 578 421 749 377
Planning and building:
Number of planning permits issued 335 298 207 202 177
Number of new dwelling units issued 135 161 63 121 51
Environmental review 10 9 6 7 4
Appeals 6 7 5 3 3
Plan checks 1,737 1,391 990 948 882
Code enforcement complaints 1,063 1,153 1,199 1,270 1,645
Water:
New connections 69 131 64 79 9
Average daily consumption (millions of gallons)5.49 5.71 5.61 5.32 5.21
Sewer:
New connections 53 22 50 44 14
Average daily sewage treatment (millions of gallons)2.22 2.36 2.40 2.38 2.43
The City of Encinitas contracts with the County of San Diego Sheriff's Department to provide
law enforcement services.
Source: City of Encinitas Fire, Parks, Recreation and Cultural Arts, Development Services, and San Dieguito Water District
187
City of Encinitas
Capital Asset Statistics by Function
Last Ten Fiscal Years
2020 2019 2018 2017 2016
Law enforcement: *
Number of sub-stations 1 1 1 1 1
Fire department:
Fire stations 7 7 6 6 6
Public works:
Streets (miles) **168 168 168 201 201
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 325 325 382 382 382
Habitat/open space acreage 90 90 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 9 9 7 7
Water:
Water mains (miles)174 174 175 170 168
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.
188
City of Encinitas
Capital Asset Statistics by Function (Continued)
Last Ten Fiscal Years
2015 2014 2013 2012 2011
Law enforcement: *
Number of sub-stations 1 1 1 1 1
Fire department:
Fire stations 6 6 6 5 5
Public works:
Streets (miles) **201 201 201 201 201
Engineering:
Signalized intersections 63 63 63 63 63
Parks and recreation:
Community and senior center 1 1 1 1 1
Developed parks 18 18 18 18 18
Undeveloped parks 4 4 4 4 4
Parkland acres 382 382 382 382 382
Habitat/open space acreage 87 87 87 87 87
Marine life refuge 1 1 1 1 1
Trails/streetscapes (miles)41/10 41/10 41/10 41/10 41/10
Lifeguard towers 7 7 7 7 7
Water:
Water mains (miles)168 168 168 168 168
Maximum daily capacity (millions of gallons)15 15 15 15 15
Source: City of Encinitas Fire, Parks, Recreation and Cultural Arts, Development Services, and San Dieguito Water District
** Prior to FY 2017-18 data included both City and privately maintained streets. In FY 2017-18, data includes
only City maintained streets.
* The City of Encinitas contracts with the County of San Diego Sheriff's Department to provide law enforcement
services.
189
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190
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.
191
Table 1
Cardiff Sanitary Division
Rate Schedule for Annual Service Charges
As of June 30, 2020
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 $35,400.30
Bakery (wholesale)/Food Processor BW 11.31 --
Supermarket SM 11.31 1,030 11,649.30
Mortuary MT 11.31 300 3,393.00
Restaurant R 11.31 600 6,786.00
(1) Sewer rates are based on water consumption (fixed charge based on meter size and consumption component).
The consumption is based on HCF (hundred cubic feet - 748 gallons).
Non-Residential (Commercial) = Water Consumption For Meter Readings Occurring Between July-June of Preceding Year
Residential = 2 Lowest Periods of Water Consumption For Meter Readings Occurring Between Dec.-May (most recent available 5-year period)
New Connections (no prior water consumption
history)
New Connections (no prior water consumption
history)
Multi Family/Trailer Park* and Non-Residential Fixed Meter Charge
Water Consumption Periods To Be Used
192
Table 2
Cardiff Sanitary Division
Historical Service Charges Billed
Last Ten Fiscal Years
Fiscal Year
Residential
(Tax Roll)
Commercial
(Tax Roll)
Commercial
(Manual) Total Billed
Single
Family
Average
2020 4,083,220$ 645,501$ 130,882$ 4,859,603$ 665
2019 4,048,063 633,674 126,925 4,808,662 662
2018 4,065,382 595,450 118,660 4,779,492 665
2017 3,958,853 597,392 135,581 4,691,826 648
2016 3,873,157 610,169 135,107 4,618,432 634
2015 4,033,393 623,032 135,587 4,792,012 610
2014 3,812,338 599,324 134,910 4,546,572 622
2013 3,935,414 666,099 126,677 4,728,190 652
2012 4,058,990 645,560 123,822 4,828,372 676
2011 3,984,339 628,165 127,210 4,739,715 664
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.
193
Table 3
Cardiff Sanitary Division
Ten Largest Customers
Fiscal Year 2019-20
Parcel Sewer Service Percentage of
Property Owner Count Charges Sewer Charges
Scripps Health 1 101,311.78$ 2.08%
Collwood Pines Apartments LP 3 78,715.02 1.62%
State of California Parks & Rec.2 49,488.55 1.02%
San Dieguito Union High School District 2 47,979.64 0.99%
Georges Restaurant Inc.1 36,326.80 0.75%
944 Regal Road LLC 1 34,661.68 0.71%
K&K Lumber Co.2 30,258.52 0.62%
Newport Taft, Inc.1 29,606.26 0.61%
Cardiff Town Center LLC 1 28,237.86 0.58%
Belmont Village LLC 1 27,972.24 0.58%
Subtotal 15 464,558.35$ 9.56%
Total Billed 4,859,603$
Source: Cardiff Sanitary Division
Commercial
Total Connections Residential Industrial Total
Year (Billed Parcels)EDU's EDU's EDU's
2020 6,457 7,262 1,207 8,469
2019 6,456 7,247 1,205 8,452
2018 6,442 7,223 1,202 8,425
2017 6,435 7,186 1,187 8,373
2016 6,416 7,157 1,187 8,344
2015 6,394 7,132 1,187 8,319
2014 6,375 7,126 1,176 8,302
2013 6,365 7,083 1,174 8,257
2012 6,334 7,067 1,154 8,221
2011 6,329 7,033 1,124 8,187
Source: Cardiff Sanitary Division
Last Ten Fiscal Years
Cardiff Sanitary Division
Historical Service Connections
Table 4
194
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.
195
Customer Class Residential Rate Tier Potable Recycled
Single-family residential 0-12 units 3.19$ -$
13-20 units 5.06 -
21-40 units 6.25 -
41+ units 7.12 -
Multi-family residential (per dwelling)0-8 units 3.19 -
9-12 units 5.06 -
13-16 units 6.25 -
17+ units 7.12 -
Agriculture Uniform 5.42 4.34
Commercial Uniform 5.42 4.34
Government Uniform 5.93 4.74
Public Uniform 5.93 4.74
Landscaping Uniform 6.25 5.00
Construction Uniform 6.36 5.09
(1) Per Unit (one hundred cubic feet or 748 gallons)
Source: San Dieguito Water District
Bi-Monthly Meter Service Availability Charges (2)
As of June 30, 2020
W ater Meter Service Infrastructure Fire Meter Service
Availability Access Availability
Meter Size Charge Charge Charge
5/8" & 3/4"45.16$ 7.32$ 9.61$
1"66.50 11.72 9.61
1-1/2"119.37 21.96 10.83
2"183.06 38.06 18.88
3"331.78 70.28 47.77
4"544.21 120.04 97.59
6"1,074.78 219.60 276.40
8"1,711.73 380.64 584.82
Source: San Dieguito Water District
As of June 30, 2020
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
196
Meter
Fiscal Potable Percentage Availability Percent
Year W ater Sales Change (3)Charge Change (3)
2020 10,944,746$ 7.3%4,162,249$ 8.4%
2019 10,203,984 (9.1%)3,839,847 1.8%
2018 11,222,736 18.5%3,772,759 6.4%
2017 9,467,085 (0.4%)3,544,758 1.2%
2016 9,503,108 (2.3%)3,503,933 2.6%
2015 9,728,434 (8.6%)3,415,227 5.8%
2014 10,649,157 15.3%3,227,823 4.5%
2013 9,236,462 8.3%3,087,794 (3.4%)
2012 8,528,418 3.9%3,196,605 6.3%
2011 8,205,876 14.8%3,007,127 20.2%
(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 W ater Sales Change Charges (4)Change
2020 644,436$ 9.7%97,431$ 12.2%
2019 587,272 (31.2%)86,801 0.8%
2018 853,052 19.0%86,098 9.4%
2017 716,826 2.1%78,732 (7.5%)
2016 702,301 8.3%85,149 5.7%
2015 648,398 40.8%80,585 34.2%
2014 460,383 15.0%60,048 N/A
2013 400,244 (5.4%)- N/A
2012 422,925 (19.2%)- N/A
2011 523,397 (2.7%)- 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
197
Fiscal Local Imported Total Recycled Total
Year W ater W ater Potable W ater Production
2020 2,555 3,127 5,682 587 6,269
2019 2,173 3,407 5,580 550 6,130
2018 3,450 2,660 6,110 714 6,824
2017 1,446 3,984 5,430 654 6,084
2016 1,400 3,839 5,239 628 5,867
2015 603 5,726 6,329 736 7,065
2014 1,136 5,598 6,734 692 7,426
2013 4,200 2,395 6,595 678 (6)7,273
2012 3,719 2,663 6,382 578 (6)6,960
2011 4,434 1,901 6,335 511 6,846
Fiscal Percent Percent
Year Potable Change Recycled Change
2020 5,277 (2.2%)587 6.7%
2019 5,397 (7.6%)550 (23.0%)
2018 5,838 10.4%714 9.2%
2017 5,287 3.4%654 4.1%
2016 5,112 (16.7%)628 (14.7%)
2015 6,134 (4.9%)736 6.4%
2014 6,449 2.6%692 2.1%
2013 6,284 5.5%678 (6)17.3%
2012 5,957 9.8%578 (6)13.1%
2011 5,425 (4.0%)511 2.6%
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
198
Acre-Feet Percent of
Customer Description Sold Water Sold
Agriculture 186 3.5%
Commercial 501 9.5%
Construction 40 0.8%
Government 21 0.4%
Landscaping 328 6.2%
Multi-Family Residential 1,102 20.9%
Public 106 2.0%
Single-Family Residential 2,993 56.7%
Total Sales 5,277 100.0%
Source: San Dieguito Water District
Fiscal Percent Percent
Years Potable Increase Recycled Increase
2020 12,086 1.9%98 5.4%
2019 11,861 0.6%93 9.4%
2018 11,790 0.4%85 (2.3%)
2017 11,740 0.2%87 6.1%
2016 11,721 0.7%82 1.2%
2015 11,644 0.3%81 5.2%
2014 11,610 0.9%77 0.0%
2013 11,502 0.2%77 4.1%
2012 11,476 0.7%74 2.8%
2011 11,397 0.1%72 (1.4%)
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, 2020
Table 8
San Dieguito Water District
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200
3
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