HomeMy WebLinkAbout1983 11 21 Financial Report - Clearwoods Improvements District (2) 11
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ICLEARWOODS IMPROVEMENT DISTRICT
411 REPORT ON FINANCIAL STATEMENTS
(With Supplemental Material)
PERIOD ENDED NOVEMBER 21, 1983
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BQEEDLOVE PC.
CERTIFIED PUBLIC ACCOUNTANTS
TABLE OF CONTENTS
Exhibits Page
Auditors ' Report 1
-
Combined Balance Sheet All Fund Types and Account Groups A 2
Combined Statement of Revenues, Expenditures and Changes
in Fund Balances - All Governmental Fund Types B 4
Statement of Revenues, Expenditures and Changes in Fund
'' Balances - Budget and Actual - General Fund C 6
Summary of Accounting Policies and Notes to Financial
Statements 7
SUPPLEMENTAL SCHEDULES
11
Schedules
Auditors ' Report on Other Financial Information 15
11
Analysis of Changes in Cash and Temporary Investments -
All Governmental Fund Types A-1 17
General Long-Term Debt and Debt Service Requirements A-2 18
11 Analysis of Changes in General Long-Term Debt A-3 20
Schedule of Temporary Investments A-4 21
Analysis of Taxes Receivable A-5 22
Analysis of Organizational Costs A-6 23
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Analysis of Changes in General Fixed Assets A-7 25
Schedule of Notes Payable - Not Applicable
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Comparative Schedule - Revenues and Expenditures
Five Years A-8 26
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Insurance Coverage A-9 28
1! Board Members, Key Personnel and Consultants A-10 30
Questionnaire Completed by the Auditor 33
1! Certificate of the Board of Directors 41
1! Management Letter 45
BQEEDLOVE OCO, pc.
CERTIFIED PUBLIC ACCOUNTANTS
15531 Kuykendahl,Suite 250
Houston,Texas 77090
(713)440-3347
RICHARD W.BREEDLOVE,CPA DONN A.LAND,CPA
President Vice President
li
January 16, 1984
Board of Directors
Clearwoods Improvement District
Harris County, Texas
1
We have examined the Combined Financial Statements - All Fund Types and
Account Groups of Clearwoods Improvement District as of and for the period
ended November 21, 1983 (date of anneation) , as listed in the table of
contents. Our examination was made in accordance with generally accepted
auditing standards and, accordingly, included such tests of the accounting
.4 records and such other auditing procedures as we considered necessary in
the circumstances.
71
In our opinion, the combined financial statements referred to above pre-
sent fairly the financial position of Clearwoods Improvement District,
Harris County, Texas, and the results of its operations for the period then
ended, in conformity with generally accepted accounting principles applied
on a basis consistent with that of the preceding year.
Exhibit A
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CLEARWOODS IMPROVEMENT DISTRICT
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COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS
NOVEMBER 21, 1983
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Governmental Fund Types C.-
Debt Capital
General Service Prgjects ri
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ASSETS
Cash $ 68 923 $ 27 644 $ 297
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Temporary investments - restricted - 32 523 -
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Total Cash & Temporary Investments 68 923 60 167 297
OP
Accounts receivable - net and accrued receivables 18 012 297 456 -
Due from other funds - - -
Prepaid expenses 1 786 - -
PP
Deposits 130 - -
Physical plant - - -
Organizational costs - - -
010
Amount available in Debt Service Fund - - -
Amount to be provided for retirement of
general long-term debt - - -
Total Assets .$ 88 851, $357 623 $ 297
LIABILITIES AND FUND EQUITY
r
Liabilities:
Accounts payable and accrued expenses $ 37 859 $ 369 $ -
Deferred tax revenue - 284 378 -
Due to other funds - - -
Refundable deposits 15 025 - -
Bonded debt payable - - -
Total Liabilities 52 884 284 747 -
Fund Equity:
Investment in general fixed assets - - -
Fund balances -
Unreserved: [111
Designated for debt service - 72 876 -
Undesignated 35 967 - 297
Total Fund Equity 35 967 72 876 297 til
Total Liabilities and Fund Equity $ 88 851 $357 623 $ 297 ril
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See the accompanyingof AccountingPolicies and Notes to Financial Statements.
Summary
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Account Groups Totals
Long-Term (Memos andvm Only)
II Debt Fixed Assets November 21, 1983 April 30, 1983
4
$ - $ - $ 96 864 $ 122 964
- - 32 523 58 673
- - 129 387 181 637
01,
- - 315 468 67 115
- - - 370
- - 1 786 382
- - 130 130
- 2 748 382 2 748 382 2 815 583
- 299 879 299 879 299 879
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72 876 - 72 876 131 999
4
2 182 124 - 2 182 124 2 123 901
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$2 255 000 $3 048 261 $5 750 032 $5 620 096
1
a
40 $ - $ - $ 38 228 $ 45 644
- - 284 378 14 809
- - - 370
- 15 025 13 899
2 255 000 - 2 255 000 2 255 000
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2 255 000 - 2 592 631 2 329 722
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- 3 048 261 3 048 261 3 115 462
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- - 72 876 131 999
- - 35 967 42 913
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- 3 048 261 3 157 401 3 290 374
1! $2 255 000 $3 048 261 $5 750 032 $5 620 096
11
11 - 3 -
Exhibit B
PIP
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CLEARW00DS IMPROVEMENT DISTRICT
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COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
ALL GOVERNMENTAL FUND TYPES t"
FOR THE PERIOD ENDED NOVEMBER 21, 1983
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Governmental Fund Types
Debt Capital
General Service Projects •
Revenues:
Service revenue $ 164 972 $ - $ -
Tap connection fee 7 860 - - r
Property taxes - 5 663 -
Penalty and interest revenue 7 846 5 468 - it
Insurance claim proceeds - - -
Total Revenues 180 678 11 131 - e
Expenditures: P
Current:
Purchased sewer services 46 446 - -
Purchased and contracted services 78 640 6 215 - r.
Consumable supplies and materials 4 276 - -
Recurring operating expenses 56 895 3 024 -
Water tap expense 700 - -
Debt Service: r
Interest and fees - 73 885 -
Principal retirement - - -
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Total Expenditures 186 957 83 124 -
Excess of Revenues Over (Under)
Expenditures (6 279) (71 993) - r
Other Financing Sources (Uses) :
Reclassification of investment
in uncollected taxes - - -
Operating transfers in - 370 -
Operating transfers out (370) - -
Sale of surplus equipment - 12 500 -
Total Other Financing Sources (Uses) (370) 12 870 -
Excess of Revenues and Other Sources
Over (Under) Expenditures and Other
Uses (6 649) (59 123) - r
Fund Balances at May 1, 1983 42 616 131 999 29]
Fund Balances at November 21, 1983 $ 35 967 $ 72 876 $ 297
See the accompanying Summary of Accounting Policies and Notes to Financial Statements.
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11 Totals
(Memorandum Only)
Period Ended Year Ended
November 21, 1983 April 30z 1983
$ 164 972 $ 299 326
7 860 32 428
It 5 663 278 877
4 13 314 24 742
3 241
191 809 638 614
46 446 64 394
84 855 95 313
11 4 276 861
59 919 129 920
700 6 620
11,
73 885 153 333
105 000
RR
270 081 555 441
4
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(78 272) 83 173
4
- (21 955)
370 23 924
(370) (2 856)
12 500
12 500 (887)
A
1! (65 772) 82 286
174 912 92 626
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$ 109 140 $ 174 912
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Exhibit C
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CLEARWOODS IMPROVEMENT DISTRICT
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STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
FOR THE PERIOD ENDED NOVEMBER 21, 1983 PP
Favorable
(Unfavorable)
Actual Budget* Variance
Revenues:
Service revenue $164 972 $168 775 $ (3 803)
OP
Tap connection fee 7 860 - 7 860
Penalty and interest revenues 7 846 1 685 6 161
Total Revenues 180 678 170 460 10 218 O"
Expenditures:
Current: Pr
Purchased sewer services 46 446 67 397 20 951
Purchased and contracted services 78 640 47 037 (31 603)
Consumable supplies and materials 4 276 8 425 4 149
Recurring operating expenses 56 895 44 398 (12 497)
Water tap expense 700 - (700)
Total Expenditures 186 957 167 257 (19 700) PP
Excess of Revenues Over (Under)
Expenditures (6 279) 3 203 (9 482) ptt
Other Financing Sources (Uses)
Operating Transfers Out (370) - (370) PP
Excess of Revenues & Other Sources Over
(Under) Expenditures & Other Uses (6 649) 3 203 (9 852)
OP
Fund Balances at May 1, 1983 42 616 42 616 - k
Fund Balances at November 21, 1983 $ 35 967 $ 45 819 $ (9 852) rp
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*The annual budget was pro-rated for the period because the district only existed for OP
205 days of the year. See Note 12.
See the accompanying Summary of Accounting Policies and Notes to Financial Statements.
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A
CLEARWOODS IMPROVEMENT DISTRICT
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SUMMARY OF ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
NOVEMBER 21, 1983
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NOTE (1) CREATION OF DISTRICT
40 Clearwoods Improvement District, Harris County, Texas was created by acts of
the 59th Legislature, Regular Session 1965. The Board of Directors held its
organizational meeting on August 10, 1965 and the first bonds were sold
41 March 21, 1967.
NOTE (2) SIGNIFICANT ACCOUNTING POLICIES
MN
4 The accompanying financial statements have been prepared on the modified ac-
crual basis of accounting applicable to governmental funds in accordance with
41 the standards established by Statement No. 1 issued by the National Council
on Governmental Accounting, and adopted by the American Institute of Certified
Public Accountants. Under this method, all expenditures, except bond interest,
44 and all revenues currently available are accrued. The transactions of the
District are accounted for in the following funds and account groups:
Governmental Funds
44
General--To account for all revenues and expenditures not required
to be accounted for in other funds.
A
Debt Service--To account for the accumulation of financial resources
for, and the payment of, general long-term debt principal and interest,
4, paid principally from property taxes levied by the District.
' Capital Projects--To account for financial resources designated to
construct or acquire capital facilities and improvements. Such re-
41 sources are derived principally from proceeds of the sale of bonds.
4
Account Groups
04
General Fixed Assets--To account for the facilities of the District.
41 General Long-Term Debt--To account for the oustanding principal balance
of general long-term debt obligations.
Memorandum Totals
411
The memorandum totals represent the aggregate amount of all governmental
funds and account groups included in the statements. No eliminations have
M been made and this total does not present consolidated financial informa-
tion.
•
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CLEARWOODS IMPROVEMENT DISTRICT P„
SUMMARY OF ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
NOVEMBER 21, 1983
Continued OP
NOTE (2) SIGNIFICANT ACCOUNTING POLICIES - CONTINUED !�
General Fixed Assets
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The District capitalizes all costs associated with the creation of the
District. All costs directly associated with the sale of bonds are being
capitalized. From the date of the sale of bonds, through the date of the
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completetion of related improvements, interest revenues and interest expen-
ditures related to bond proceeds are being capitalized. These amounts are
shown on the Balance Sheet as District Organizational Costs and are not
being amortized.
The District capitalized the cost of meters and boxes and residential lines
as part of the water system in General Fixed Assets. The District does not P,
maintain detailed fixed asset records, and thus detailed cost information
on individual assets is not readily available. The full cost of facilities
owned by the District is capitalized; funds provided by others are shown as
contributions on the Balance Sheet. Depreciation of general fixed assets
is not recorded in the accounts of governmental funds.
NOTE (3) WATER AND SEWER SERVICE RATES p
The following residential and commercial water and sewer rates were established
effective on June 1, 1982:
PP
WATER SERVICE ONLY
First 7,000 Gallons of Water Used (Minimum Bill) $ 7.00
Each 1,000 Gallons of Water Used Thereafter .75
SEWER SERVICE ONLY
First 20,000 Gallons of Water Used (Minimum Bill) $ 10.00
Each 1,000 Gallons of Water Used Thereafter .50
TAP FEES PP
Residential Tap Fee (3/4" Tap) $600.00
Residential Tap Fee (3/4" Tap) Non-Residents $750.00
The above fees include the cost of meter, box,
and installation. For connections of over 3/4 r
inch, the District will establish tapping
charges by separate order or agreement.
PP
Commercial Tap Fee
Tap-on fee shall be five cents per square
foot of land in addition to the cost of
meter, box, and installation.
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CLEARWOODS IMPROVEMENT DISTRICT
SUMMARY OF ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
NOVEMBER 21, 1983
11 Continued
NOTE (3) WATER AND SEWER SERVICE RATES - CONTINUED
11 The following residential and commerical water and sewer rates were established
effective on December 1, 1982:
is TAP FEES
Residential Tap Fee (3/4" Tap) $750.00
11 Residential Tap Fee (3/4" Tap) Non-Residents $850.00
The above fees include the cost of meter, box,
and installation. For connections of over 3/4
inch, the District will establish tapping
charges by separate order or agreement.
Commercial Tap Fee •
11 Tap-on fee shall be ten cents per square foot
of land in addition to the cost of meter, box,
and installation. There is an inspection fee
11 of $50.00 for each commercial sewer tap.
NOTE (4) PLEDGE OF TAX AND OPERATING REVENUES
11 The bonds are payable from the proceeds of an ad valorem tax levied
upon all taxable property subject to taxation within the District,
without limitation as to rate or amount, and are further payable from
!! and secured by a lien on and pledge of the net revenues to be received
from the operation of the District's waterworks and sanitary sewer sys-
tem.
11 NOTE (5) ENGINEERING REPORT
The Bond Order states that a complete engineering inspection report of
11 the operations and physical condition of the plant and system shall
be made each year by an independent qualified engineer. At the Balance
Sheet date, said report had not been made.
NOTE (6) REDEMPTION OF BONDS
11 The outstanding bonds of Clearwoods Improvement District, Harris County,
Texas, are callable for redemption prior to maturity at the option of
the District. The bonds may be called in whole or in part, in inverse
numerical order for the purpose of retirement or refunding, or both, at
1! par, in addition to unpaid accrued interest. Bonds of the Series 1967,
Series 1967-A, Series 1972, and Series 1974 may be called on February
1, 1982, August 1, 1982, April 1, 1987, and September 1, 1989, respec-
11 tively, or any interest date thereafter. As of the report date, no
bonds had been called.
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CLEARWOODS IMPROVEMENT DISTRICT
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SUMMARY OF ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
NOVEMBER 21, 1983
Continued
NOTE (7) WATER AND SEWER SERVICE CUSTOMERS
The following is a comparison of the number of metered water and sewer service
customers serviced by the District:
April 30, 1982 1,221
April 30, 1983 1,364
November 21, 1983 1 365 P"
NOTE (8) OPERATING AND TAX FUND PAYMENTS TO DEBT SERVICE FUND
Pis
The Bond Orders state that the District is to transfer on a monthly basis to
the Debt Service Fund, commencing when any part of the water and sewer system
is placed in operation, an amount not less than one-sixth of the next maturing
installment of interest and an amount not less than one-twelfth of the next
maturing installment of principal. In addition, a sum equal to 20% of such
monthly payments is to be paid to the Debt Service Fund until the fund balance
is equal to the total principal and interest requirements for the current year 10
and the next year. At the Balance Sheet date, the Operating and Tax Fund
Revenues had not been sufficient to make payments required by the Bond Order.
However, the ad valorem tax levied by the District and the restricted cash and pp
temporary investments have been sufficient to meet the annual bond principal
and interest payments in the past.
NOTE (9) RESTRICTED CASH AND TEMPORARY INVESTMENTS
The following balances were restricted by the Bond Orders as of November 21,
1983: 1/1
Restricted For ,
Servicing of Acquisition of
Bonded Debt Fixed Assetsv gp
Cash $ 27 644 $ 297 `"
Temporary Investments 32 523 -
A
0.
$ 60 167 $ 297
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CLEARWOODS IMPROVEMENT DISTRICT
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SUMMARY OF ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
NOVEMBER 21, 1983
Continued
4
NOTE (10) INSURANCE
14111
The Bond Orders state that so long as any of the bonds are outstanding, the
District agrees to maintain insurance for the benefit of the holders of bonds,
on the system of a kind and in an amount which usually would be carried by pri-
vate companies engaged in a similar type of business. The District has "all
risk" coverage of $630,000 broken down as follows: Water Plant - $400,000,
4111 $100,000 on one lift station and $65,000 each on the remaining two lift sta-
tions. The District has comprehensive general liability coverage with a
maximum limit of $300,000 and umbrella liability coverage of $1,000,000.
Since no objective criteria has been established for insurance coverage, a
41 determination could not be made as to whether the District complied with the
4 requirement.
'"# NOTE (11) SETTLEMENT
During 1983, the District settled in its favor an amount payable of $25,907
M1 due to the City of Friendswood by the general operating account. The amount
related to payments due for the District's use of the City of Friendswood's
North Interceptor, lift station and force main, to transport sewage to the
Blackhawk Regional Sewage Treatment Plant. The District negotiated the
411
A settlement for a total cost to the District of $5,000. There was also a
4 disputed amount of $23,733 concerning the cost of expansion of this regional
sewage treatment plant. This amount is still in dispute. The District con-
tends that there is no amount payable because of credits due to the District
in the second phase of expansion. The operator of this plant contends there
is an amount payable because the possible credits from the second phase have
qi not occurred yet. If and when the expansion occurs, the District's "credit"
will offset the amount payable.
NOTE (12) ANNEXATION
41
On November 21, 1983, Clearwoods Improvement District was annexed by the City
of Friendswood, Friendswood, Texas.
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SUPPLEMENTAL SCHEDULES
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BQEEDLOVE OCO, pc.
CERTIFIED PUBLIC ACCOUNTANTS
15531 Kuykendahl.Suite 250
Houston,Texas 77090
(713)440-3347
RICHARD W.BREEDLOVE,CPA DONNA.LAND,CPA
President Vice President
111
January 16, 1984
a
Board of Directors
Clearwoods Improvement District
Harris County, Texas
111
In our opinion, the accompanying information is stated fairly in all ma-
terial respects in relation to the financial statements taken as a whole,
of Clearwoods Improvement District for the period ended November 21, 1983,
date of annexation, which are covered by our opinion presented in the first
section of this report. The accompanying information is supplemental to
411 the financial statements and is not essential for a fair presentation of
4 financial position and results of operations. Our examination, which was
made primarily for the purpose of forming an opinion on the financial state-
!! taken as a whole, included such tests of the accounting records, from
which the supplementary information was compiled, and such other auditing
procedures as we considered necessary in the circumstances.
we
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The Schedule of Notes Payable is not included due to inactivity in
that area. P
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Schedule A-1
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CLEARWOODS IMPROVEMENT DISTRICT
ANALYSIS OF CHANGES IN CASH AND TEMPORARY INVESTMENTS -
ALL GOVERNMENTAL FUND TYPES
NOVEMBER 21, 1983
4 Governmental Fund Types
Debt Capital Memorandum
1 General Service Projects Total
4 Sources of Cash and Temporary Investments:
Cash receipts from revenues $216 044 $ (1 523) $ - $214 521
411 Cash transfer from other fund - 370 - 370
Sale of equipment - 12 500 - 12 500
41, Total Cash and Temporary Investments 216 044 11 347 - 227 391
4 Applications of Cash and
Temporary Investments:
411 Cash Disbursements for -
4 Current expenditures 195 777 9 610 - 205 387
Debt service - 73 884 - 73 884
Cash transfer to other fund 370 - - 370
4
Total Cash and
Temporary Investments Applied 196 147 83 494 - 279 641
4 Increase (Decrease) in Cash and
Temporary Investments 19 897 (72 147) - (52 250)
4 Cash and Temporary Investment Balances
Beginning of Year 49 026 132 314 297 181 637
40
Cash and Temporary Investment Balances
End of Year $ 68 923 S 60 167 $ 297 $129 3R7
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4
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4
Schedule A-2 ■'
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CLEARWOODS IMPROVEMENT DISTRICT .
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GENERAL LONG-TERM DEBT AND DEBT SERVICE REQUIREMENTS
NOVEMBER 21, 1983
Series 1967 Series 1967A 1,1
Principal Interest Due Principal Interest Due
For the Years Due August 1, Due August 1,
Ending April 30, February 1 February 1 Total February 1 February 1 Total p
1984 $ 75 000 $ 16 250 $ 91 250 $ 10 000 $ 38 400 $ 48 400
1985 75 000 12 500 87 500 10 000 37 800 47 800 �„
1986 75 000 8 750 83 750 10 000 37 200 47 200
1987 75 000 5 000 80 000 10 000 36 600 46 600 a
1988 25 000 1 250 26 250 75 000 36 000 111 000
1989 - - - 75 000 31 500 106 500
1990 - - - 75 000 27 000 102 000
1991 - - - 75 000 22 500 97 500
1992 - - - 100 000 18 000 118 000 p
1993 - - - 100 000 12 000 112 000
1994 - - - 100 000 6 000 106 000
1995 - - - - - - p
1996 - - - - - -
1997 - - - - - -
1998 - - - - - -
1999 - - - - - - PP
2000 - - - - - -
2001 - - - - - -
•
2002 - - - - - - P
2003 - - - - - -
2004 - - - - - -
TOTALS $325 000 $ 43 750 $368 750 $640 000 $303 000 $943 000 r
a
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Cash and Temporary Investment Balances at November 21, 1983 - Debt Service Fund $ 60 167
p
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11
11
11
11
Series 1972 Series 1974
11 Principal Interest Due Principal Interest Due
Due October 1, Due September 1, Total Annual
11 April 1 April 1 Total March 1 March 1 Total Requirements
$ 10 000 $ 37 125 $ 47 125 $ 10 000 $ 55 360 $ 65 360 $ 252 135
15 000 36 500 51 500 20 000 54 685 74 685 261 485
11 15 000 35 438 50 438 20 000 53 335 73 335 254 723
20 000 34 425 54 425 20 000 51 985 71 985 253 010
20 000 33 075 53 075 30 000 50 635 80 635 270 960
11 20 000 31 725 51 725 30 000 48 565 78 565 236 790
20 000 30 375 50 375 30 000 46 465 76 465 228 840
30 000 29 025 59 025 30. 000 44 335 74 335 230 860
1! 30 000 27 000 57 000 30 000 42 160 72 160 247 160
30 000 24 975 54 975 30 000 39 940 69 940 236 915
30 000 22 850 52 850 40 000 37 690 77 690 236 540
40 000 20 925 60 925 40 000 34 650 74 650 135 575
11 40 000 18 225 58 225 40 000 31 570 71 570 129 795
40 000 15 525 55 525 40 000 28 490 68 490 124 015
40 000 12 825 52 825 40 000 25 410 65 410 118 235
11 50 000 10 125 60 125 40 000 22 330 62 330 122 455
50 000 6 750 56 750 50 000 19 250 69 250 126 000
50 000 3 375 53 375 50 000 15 400 65 400 118 775
1! -
- - 50 000 11 550 61 550 61 550
-
50 000 7 700 57 700 57 700
- - - 50 000 3 850 53 850 53 850
11 $550 000 $430 263 $980 263 $740 000 $725 355 $1 465 355 $3 757 368
11
1!
11
11
11
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Schedule A-3 u
CLEARWOODS IMPROVEMENT DISTRICT
ANALYSIS OF CHANGES IN GENERAL LONG-TERM DEBT
NOVEMBER 21, 1983
p
BOND ISSUES
Series Series Series Series
1967 1967-A 1972 1974 Totals t .
Interest rate 5.00% 6.00% 6.75% 6.75% to 7.70%
Dates interest payable 8/1;2/1 8/1;2/1 10/1;4/1 9/1;3/1
OP
Bonds outstanding at
beginning of current year $325 000 $640 000 $550 000 $740 000 $2 255 0006'
Bonds sold during current year - - - - --!
Retirements - principal - - - - -
Po
Bonds oustanding at
end of current year $325 000 $640 000 $550 000 $740 000 $2 255 000
Retirements - interest $ 8 125 $ 19 200 $ 18 563 $ 27 680 $ 73 568
Paying agent's name and address: Allied Bank of Texas - Houston, Texas
Bonds voted: $6,480,000 1111
Bonds approved: $4,500,000
Bonds sold: $2,850,000
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Schedule A-4
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11
CLEARWOODS IMPROVEMENT DISTRICT
11 SCHEDULE OF TEMPORARY INVESTMENTS
NOVEMBER 21, 1983
11
Accrued
Interest Receivable
11 Fund Interest Rate Maturity Date Face Amount November 21, 1983
Debt Service Fund:
11 Certificate of Deposit -
No. 400403055 8.99% 12/23/83 $32 523 $ 473
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Schedule A-5
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CLFARWOODS IMPROVEMENT DISTRICT
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ANALYSIS OF TAXES RECEIVABLE
NOVEMBER 21, 1983
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Taxes Receivable at Beginning of Year - May 1, 1983 $ 14 808
1983 - Original tax roll 275 227
Total to be Accounted for 290 035
Less: Collections - PP
Current year $ -
Prior years taxes 5 657 5 657
rP
Total Taxes Receivable
at End of Period -
November 21, 1983 $284 378 !PP
Taxes Receivable by Years: •
PP
1983 $275 227
1982 6 575
1981 744
1980 976
1979 395
1978 235
1977 226
Total Taxes Receivable $284 378
r
ASSESSED VALUATION SUMMARY - FIVE YEARS
1983 1982 1981 1980 1979
Property Valuations
Land $ 7 702 300 $ 7 691 700 $ 7 716 700 $ 8 167 700 $ 7 998 200
Improvements 33 760 200 33 381 300 33 343 300 37 100 600 35 572 700
Personal Property 880 000 797 940 795 600 910 800 777 900
Valuation Totals $42 340 500 $41 870 940 $41 855 600 $46 179 100 $44 348_ 800
!P
Tax Rate per
$100 Valuation $.65 $.65_ $.65 $.65
Tax Year: January 1 , 1983 to December 31, 1983
Percent of assessed valuation to fair market value 100%
Percent of current year's taxes collected to current taxes levied 0%*
Percent of current and delinquent taxes collected to current and
delinquent taxes outstanding at the beginning of the tax year 2%*
111
*The tax rolls were mailed one day before the annexation date.
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t
schedule A-6
CLEARWOODS IMPROVEMENT DISTRICT
ANALYSIS OF ORGANIZATIONAL COSTS
NOVEMBER 21, 1983
11
Balances Balances
May 1, 1983 November 21, 1983
11 Financial Advisor's Fees $ 16 250 $ 16 250
1 Discount on Sale of Bonds 14 414 14 414
tit
Bond Issue Costs 1 821 1 821
Bond Interest 245 349 245 349
Other Costs 3 066 3 066
Interest on Temporary Investments (135 825) (135 825)
411 Legal Fees 154 804 154 804
TOTAL $ 299 879 $ 299 879
4
Amounts Provided By:
Capital Projects Fund $ 299 879 $ 299 879
1,
4
1!
1
1!
1!
11
11 - 23 -
Schedule A-7
CLEARWOODS IMPROVEMENT DISTRICT
ANALYSIS OF CHANGES IN GENERAL FIXED ASSETS
NOVEMBER 21, 1983
Balances Balances
May 1, 1983 Reductions* November 21, 1983
Drainage System $ 608 329 $ - $ 608 329
11 Sewer System 1 268 805 (67 200) 1 201 605
Water System 653 800 - 653 800
1!
Engineering 255 027 255 027
11 Land 29 622 - 29 622
TOTAL $2 815 583 $ (67 200) $2 748 383
1! Amounts Provided By:
General Fund $ 105 920 $ - $ 105 920
Capital Projects Fund 2 706 163 (67 200) 2 638 963
1! Contributed by Developers 3 500 - 3 500
TOTAL $2 815 583 $ (67 200) $2 748 383
11
1!
11
1!
11
1!
11 *This reduction occurred because the District sold some excess sewer system
equipment.
- 25 -
Schedule A-8111,
66,
4
r s:
CLEARSJOODS IMPROVEMENT DISTRICT
p
COMPARATIVE SCHEDULE - REVENUES AND EXPENDITURES -
FOUR YEARS ENDED APRIL 30, 1983 AND PERIOD ENDED NOVEMBER 21, 1983
Period Ended Years Ended I'
November 21, 1983 1983 1982
GENERAL FUND REVENUES:
Service revenues $164 972 $299 326 $238 366
Tap connection fee 7 860 32 428 105 168 is
Penalty and interest revenues 7 846 8 887 6 613
Insurance claim proceeds - 3 241 - OP
Total General Fund Revenues 180 678 343 882 350 147
OP
GENERAL FUND EXPENDITURES:
Purchased sewer services 46 446 64 394 104 230 '.
Purchased and contracted services 78 640 85 070 81 996
Consumable supplies and materials 4 276 4 486 1 599 WI
Recurring operating @xpenses 56 895 122 650 112 115
Water tap expense 700 6 620 1 585
PR
Total General Fund Expenditures 186 957 283 220 301 525 I
EXCESS GENERAL FUND REVENUES
OVER (UNDER) EXPENDITURES $ (6 279) $ 60 662 $ 48 622
y.
DEBT SERVICE FUND REVENUES:
Tax revenues $ 5 663 $278 877 $276 487 r
Penalty and interest revenues 844 4 933 6 911
Interest on investments 4 624 10 922 6 211
!II
Total Debt Service Fund Revenues 11 131 294 732 289 609
DEBT SERVICE FUND EXPENDITURES:
Tax collection expenditures 9 240 13 888 9 912 IIII
Debt service - Interest and fees 73 884 153 333 157 510 ip
Debt service - Principal - 105 000 80 000
Total Debt Service Fund Expenditures 83 124 272 221 247 422
EXCESS DEBT SERVICE FUND REVENUES
OVER (UNDER) EXPENDITURES $ (71 993) $ 22 511 $ 42 187
Average annual unpaid bond principal & interest $178 922 $178 922 $182 509 tip
Coverage (excess general fund revenue plus
net tax revenue = average annual unpaid bond
principal & interest) (.05) 1.68 1.73
No. of Water & Sewer Customers 1 365 1 364 1 221
Total Water Pumped into System ( '000 gallons) 75 634 146 989 136 810
Total Water Billed to Customers ( '000 gallons) 75 481 144 808 123 595 f.
- 26 -
Percent of Fund Totals
Years Ended Period Ended Years Ended
1981 1980- November 21, 1983 1983 1982 1981 1980
$231 304 $227 463 91.3 % 87.1 % 68.1 % 94.4 % 87.5 %
3 100 10 552 4.4 9.4 30.0 1.3 4.1
10 493 21 964 4.3 2.6 1.9 4.3 8.4
244 897 259 979 100.0 100.0 100.0 100.0 100.0
14! - - 25.7 18.7 29.8 - -
83 659 67 413 43.5 24.8 23.4 34.1 25.9
41 3 010 2 540 2.4 1.3 0.5 1.2 1.0
151 860 112 136 31.5 35.7 32.0 62.0 43.1
2 175 4 545 .4 1.9 0.5 0.9 1.7
4 240 704 186 634 103.5 82.4 86.2 98.2 71.7
$ 4 193 $ 73 345 (3.5)% 17.6 % 13.8 % 1.8 % 28.3 %
A
1! $290 178 $289 630 50.9 % 94.6 % 95.5 % 92.7 % 94.3 %
2 300 5 264 7.6 1.7 2.4 0.7 1.7
20 578 12 197 41.5 3.7 2.1 6.6 4.0
313 056 307 091 100.0 100.0 100.0 100.0 100.0
A1!
9 973 8 900 83.0 4.7 3.4 3.2 2.9
164 713 168 693 663.8 52.0 54.4 52.6 54.9
80 000 75 000 - 35.6 27.6 25.6 24.4
141
254 686 252 593 746.8 92.3 85.4 81,4 82,2
11 $ 58 370 $ 54 498 . . (646.8)% 7.7 % 14.6 % 18,6 % 17.8 %
ii
$184 890 $187 260
I
1! 1.54 1.89
1 220 1 210
159 466 122 346
139 394 112 372
- 27 -
Schedule A-9
MI
drit
OP
CLEARWOODS IMPROVEMENT DISTRICT
OP
INSURANCE COVERAGE
NOVEMBER 30, 1983
OP
is
TYPE OF COVERAGE FROM TO AMOUNT '
Facilities
Fire and lightning, extended coverage,
explosion, vandalism, malicious PP
mischief, earthquake and flood 6/13/83 6/13/84 $ 630,000
Employee Hongsty. etc.
OP
Tax Assessor/Collector 1/01/83 12/31/84 $ 10,000 t_
Directors 2/15/82 2/15/85 $ 5,000 OP
Each Director
Comprehensive General Liability P'
Liability and Contractual Liability
Bodily injury, per person and aggregate 6/13/83 6/13/84 $ 300,000
Property damage, per person and aggregate 6/13/83 6/13/84 100,000
Umbrella Liability 6/13/83 6/13/84 $1,000,000
Public Officials and Employees Liability Po
Per loss and annual aggregate 6/13/83 6/13/86 $1,000,000
rim
r
r
r
r
r
r
- 28 -
INSURER CO-INSURANCE
NAME TYPE CLAUSE
11 Utica National Insurance Co. , of Texas Stock No
St. Paul Insurance Co. Stock No
St. Paul Insurance Co. Stock No
41
11 Graphic Arts Mutual Mutual No
1: Utica National Insurance Co. , of Texas Stock No
International Surplus Lines, Ins. Co. Stock No
11
11
11
11
11
11
11
.. 29 -
Schedule A-101r
aid
OP
CLEARWOODS IMPROVEMENT DISTRICT
OP
BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS it
NOVEMBER 21, 1983
Relationship
PO
Term of BOARD MEMBERS with Major Land
office Resident Owners, Engineer,
Elected & of Attorney & Tax
NAME AND ADDRESS extires Salary Title District Assessor/Collector ir
Robert H. Boger 4/02/83 Per Diem President Yes None it
5115 Royal Parkway 4/02/85
Friendswood, Texas 77546 PP
t
t.
Lee B. Simmons 4/02/83 Per Diem Vice-Pres. Yes None
15747 Wandering Trail 4/02/85 pp
Friendswood, Texas 77546
w
Herman M. Hayley 5/01/82 Per Diem Secretary Yes None
5315 Shady Oaks Lane 4/30/84 OP
Friendswood, Texas 77546 t,
William M. Fuss 4/02/83 Per Diem Director Yes None OP
16330 Forest Bend 4/02/85
Friendswood, Texas 77546
ril
Peter S. Cunningham 5/01/82 Per Diem Director Yes None
5219 Shady Oaks Lane 4/30/84
Friendswood, Texas 77546
011
CONSULTANTS Date Hired Fees Paid Re&ident of District
District Operator
Water District Services Co. 2/15/67 $ 38 150 No
4234 Richmond
Houston, Texas 77027
District Legal Counselfill
Smith & Murdaugh 4/29/66 $ 16 809 No
1200 Travis Street, #1811
Houston, Texas 77022r
District Assessor/Collector
William Spencer 3/07/73 $ 6 216 No
5318 Pasadena Blvd. fil
Deer Park, Texas 77536
District Bookkeeper
Myrtle Cruz, Inc. 8/02/78 $ 3,309 No
1617 Fannin, Suite 100
Houston, Texas 77002r
District Auditor
Breedlove & Co. , P.C. 4/80 $ 4,400 No
15531 Kuykendahl, #250
Houston, Texas 77090
- 30 -
QUESTIONNAIRE COMPLETED BY THE AUDITOR
I
I
I
MP
OP
w
CLEARWOODS IMPROVEMENT DISTRICT
QUESTIONNAIRE TO BE COMPLETED BY THE AUDITOR
FOR THE PERIOD ENDED NOVEMBER 21, 1983
00
1 . At the time that you were engaged by the Board of Directors of
the above name district to perform this audit, was a copy of
the Water District Accounting Manual made available to you? YES
OP
2. The Water District Accounting Manual prescribes accounting
methods and policies. After taking these into consideration, P
did the local water district:
a. Maintain a proper classification of expenditures and re- p
venues? YES
b. Record expenditures and revenues according to GAAP and
OR
consistent with the type of accounting system utilized? YES
c. Maintain the double entry system of accounting? YES
/R
d. Keep a general ledger in accordance with the uniform
classification of general ledger accounts prescribed in
the Water District Accounting Manual? YES p
e. Adhere to other provisions of the Water District Account- I
ing Manual? YES
3. Did the Board of Directors of the water district impose on you any
audit requirements in addition to those stated in the Annual Audit P
Report Requirements? NO
4. Did you identify, during the course of your examination of the fi-
nancial statements of the water district, any areas pertaining to
accounting matters in which action should be taken by the Board of
Directors of the water district? NO
5. Did you obtain representation from the Board of Directors of the
water district that all records of the water district were made
available to you for your examination? YES
OP
6. Did the water district:
a. Use the capital projects fund and debt service fund only for OP
the purposes authorized by the Board of Directors of the water
district and/or within the provisions of the applicable bond
resolutions? YES
- 32 -
CLEARWOODS IMPROVEMENT DISTRICT
QUESTIONNAIRE TO BE COMPLETED BY THE AUDITOR (cont'd)
FOR THE PERIOD ENDED NOVEMBER 21, 1983
b. Properly escrow the required amount of cash as prescribed
by the Texas Water Commission or disburse the escrowed
cash according to the terms prescribed by the Texas Water
Commission? YES
c. Do business only with firms or corporations in which mem-
bers of the Board of Directors had no pecuniary interest? YES
d. Observe the conditions for obtaining grants, gifts, etc. ,
11 or observe agreements with governmental agencies for the
purpose of securing funds or services? YES
e. Have a contract for Social Security coverage for its
11 employees with the Texas Employees Retirement System? NO*
f. Make remittances of Social Security taxes according to
the terms of the contract for Social Security coverage
with the Social Security Division of the Texas Employees
Retirement System? NO*
1 g. Deposit receipts to the proper funds kept by the approved
depository bank? YES
h. Draw checks only on funds approved by the Board of Direc-
11
tors and signed by authorized personnel? YES
11
7. Did management you issue a letter to administrative officials of
the water district which sets forth your comments (based on matters
11 which come to your attention during your examination) for strength-
ening internal controls and improving administrative efficiency and
procedures? YES
11 a. Were your recommendations explained to and discussed with
administrative officials of the water district? YES
11 b. The date of your most recent management letter was
January 16, 1984.
c. Is there evidence indicating that your previous year's recommen-
li dations have been or are bein implemented? YES
11 d. Has a copy of the management letter been filed with the Texas
Department of Water Resources? YES
11 *The District has no paid employees .
- 33 -
OP
gi
CLEARWOODS IMPROVEMENT DISTRICT111
-
QUESTIONNARIE TO BE COMPLETED BY THE AUDITOR (cont'd) ttw
FOR THE PERIOD ENDED NOVEMBER 21, 1983
OP
8. The Texas Water Code makes specific provisions relating to security provided
by depository banks. After consideration of the applicable laws pertaining
OP
to the specific water district, did the depository bank provide adequate
security of the correct type? NO
Please indicate for each depository: 1P
General Fund Tax Fund OP
a. Name Community National Bank Texas Commerce Bank
O
b. Amount of F.D.I.C. P
coverage $100,000 $100,000
c. Amount of bond or
other security pledged
as of the end of the
year None None
010
d. Largest cash balance $115,641 $ 13,631
e. Date of largest
cash balance 10/12/83 6/20/83
f. Amount of bond or security
pledged at the time of the
largest cash balance
(excluding F.D.I.C.
coverage) None None
r
r
r
- 34 -
11 CLEARWOODS IMPROVEMENT DISTRICT
QUESTIONNAIRE TO BE COMPLETED BY THE AUDITOR (cont'd)
FOR THE PERIOD ENDED NOVEMBER 21, 1983
11
Debt Service Fund _ Capital Projects Fund
` Commonwealth Texas Commerce Texas Commerce
Savings Texas Commerce Bank Bank-Friendswood Texas Commerce Bank Bank-Friendswood
11
11 $100,000 $100,000 $100,000 $100,000 $100,000
1
None None None None None
11 $ 66,422 $ 28,928 $ 66 $ 267 $ 30
11 7/30/83 7/25/83 5/01/83- 5/01/83- 5/01/83-
11/21/83 11/21/83 11/21/83
11 (no change) (no change) (no change)
11
None None None None None
4111
11
11
11
- 35 -
OP
CLEARNOODS IMPROVEMENT DISTRICT
OP
QUESTIONNAIRE TO BE COMPLETED BY THE AUDITOR (cont'd)
FOR THE PERIOD ENDED NOVEMBER 21, 1983
OP
9. The water district's taxes were collected by (check one) :
OP
a. An employee of the district
b. The county tax assessor/collector r
c. A city or other tax assessor/collector __X__
d. More than one of the above
10. Was the tax assessor/collector bonded as required by law? YES
11 . What was:
a. The tax assessor/collector bonded for? $10,000
b. The greatest amount of the district's taxes in the tax
assessor's possession at any one time? $ 1,180
c. The frequency of the tax receipts deposited with the [111,
bonded depository?
1. Daily X
2. Weekly
3. Monthlyfn
d. The percent of the assessed valuation to fair market
value? 100.0%
12. We (check one) :
1111
a. Actually examined the records of the tax asessor/collector. X
b. Received written confirmation for tax data from the tax
assessor/collector.
c. Accepted tax data furnished by the district 's office. r
13. As a result, were local tax revenues (including delinquent taxes
and interest and penalties on taxes) properly separated for debt
service? YES
- 36 -
CLEARWOODS IMPROVEMENT DISTRICT
QUESTIONNAIRE TO BE COMPLETED BY THE AUDITOR (cont'd)
FOR THE PERIOD ENDED NOVEMBER 21, 1983
14. Was the water district in compliance with applicable bond resolu-
11 tions, with the general or special legislation under which the
district was created and with specific statutes excerpted and in-
cluded in the Legal Compliance Guidelines in Section 70-03-1 of
the Water District Accounting Manual? YES*
11
111
3
* The District bond resolutions require a complete engineering inspection report
annually. A complete inspection report has not been made; however, specific
engineering reports are made and the Engineer is consulted for all additions
and expansions.
The provisions of the bond resolutions relating to debt service requirements
have not been met. The bond orders state that the District is to transfer on
a monthly basis to the Debt Service Fund, commencing when any part of the water
and sewer system is placed in operation, an amount not less than one-sixth of
the next maturing installment of interest and an amount not less than one-
twelfth of the next maturing installment of the principal. In addition, an
amount equal to 20% of such monthly payments is to be paid to the Debt Service
Fund until the balance is equal to the total principal and interest requirements
for the current year and the next succeeding year. At the Balance Sheet date,
the Operating and Tax Fund Revenues have not been sufficient to make payments
required by the Bond Order. However, the ad valorem tax levied by the District
and the restricted cash and temporary investments have been sufficient to meet
the annual bond principal and interest payments in the past and there is no in-
dication that the requirements will not be met in the future.
I
- 37 -
r#1
3
CERTIFICATE OF THE BOARD OF DIRECTORS
I
I
11
CERTIFICATE OF THE BOARD OF DIRECTORS
11 CLEARWOODS IMPROVEMENT DISTRICT HARRIS
Name of Water District County
We, the undersigned, do hereby certify that the audit of the above named
11 water district from the period from May 1, 1983 to November 21, 1983
(annexation date) was received by the Board of Directors on the
of February, 1984, and was reviewed and approved disapproved at
11 a meeting of the Board of Directors on the th day of , 1984.
11
Signature of the Board Secretary Signature of the Board President
11
11
1!
11
11
11
I
I
7 7
MANAGEMENT LETTER
1
I
111
I
1
bQEEDLOVE oco, p.c.
CERTIFIED PUBLIC ACCOUNTANTS
I 1 5531 Kuykendahi.Suite 250
Houston,Texas 7r090
(713)440-3347
RICHARD W.BREEDLOVE,CPA DONN A.LAND,CPA
President Vice President
11
11 t
Jane ary 16, 1984
qBoard of Directors
Clearwoods Improvement District
Harris County, Texas
11
Re: Period Ended November 21 , 1933 (annexation date)
11 Dear Board members:
We have examined the financial statements of the above named District. As part
11 of our examination, we made a study and evaluation of the District 's system of
internal accounting control to the extent we considered necessary to evaluate
the system as required by generally accepted auditing standards. Under these
.1 standards, the purpose of such evaluation is to establish a basis for reliance
thereon in determining the nature, timing, and extent of other auditing pro-
cedures that are necessary for expressing an opinion on the financial
Istatements.
There are inherent limitations that should be recognized in considering the po-
tential effectiveness of any system of internal accounting control. Projection
of any evaluation of internal accounting control to future periods is subject to
141 the risk that the procedures may become inadequate because of changes in condi-
tions and that the degree of compliance with the procedures may deteriorate.
ql
Our study and evaluation of the District 's system of internal accounting control
for this specific period ended, which was made for the purpose set forth in the
first paragraph above was not designed for the purpose of expressing an opinion
11 on internal accounting control, and it would not necessarily disclose all weak-
nesses in the system. No major internal control weaknesses were noted during
the examination of the District's financial statements for the period then
!I ended.
Very truly yours,
4.1 41.iji ‘tei,g0.4__
411 Richard W. Breedlove
I
I