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HomeMy WebLinkAbout1979 04 30 Audited Financial Report - Clearwood Improvement Dirstrict CLEAR WOODS IMPROVEMENT DISTRICT - HARRIS COUNTY, TEXAS NOTES TO FINANCIAL STATEMENTS APRIL 30, 1979 Note 6: Equipment Lease Agreements The District is leasing one temporary sewage treatment plant. This lease is summarized as follows: Date of Lease September 19, 1976 Term of Lease 5 years Renewable Option 6 months Minimum Annual Lease Payments for fiscal year ending April 30, 1980 $11,880 This lease has not been capitalized in the financial statements since it does not meet the criteria for capitalization. Note 7: Engineering Report The Bond Orders state that a complete engineering inspection report of the ge operations and physical conditions 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 8: Redemption of Bonds The outstanding bonds of Clear Woods 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 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, respectively, or any interest date thereafter. Note 9: 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, 1978 1,021 April 30, 1979 1,117 Note 10: Operating and Tax Fund Payments to Debt Service Fund 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 -13- CLEAR WOODS IMPROVEMENT DISTRICT - HARRIS COUNTY, TEXAS NOTES TO FINANCIAL STATEMENTS APRIL 30, 1979 Note 10: Operating and Tax Fund Payments to Debt Service Fund (Continued) 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 all payments required by the Bond Order. However, the ad valorem tax levied by the District has been sufficient to meet the annual bond principal and interest payments, not provided by funds from the bond sales. Note 11: Restricted Cash and Temporary Investments The following balances were restricted by the Bond Orders as of April 30, 1979: Restricted For Servicing of Acquisition of Bonded Debt Fixed Assets Cash $ 779 $2,567 Temporary Investments 110,046 - $110,825 $2,567 Note 12: Insurance 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 an in an amount which usually would be carried by private companies engaged in a similar type of business. The District has physical damage coverage of $142,900 with an 80% coinsurance provision and flood coverage of $20,500. The District has comprehensive general liability coverage with a maximum limit of $300,000. Since no objective criteria have been established for insurance coverage, a determination could not be made whether or not the District complied with the requirement. Note 13: Interest Earnings In accordance with the Water District Accounting Manual, which is effective for the District's fiscal year beginning May 1, 1975, all interest on construction fund investments should be transferred to the Debt Service Fund when received. Transactions for the current year are summarized as follows: Interest received not transferred, May 1, 1978 $6,333 Interest received, current year 46 Transfers to Debt Service Fund - Current Year (3,779) Reserve for interest earned not transferred, April 30, 1979 $2,600 -14- CLEAR WOODS IMPROVEMENT DISTRICT - HARRIS COUNTY, TEXAS TAXES RECEIVABLE APRIL 30, 1979 Taxes Receivable, May 1, 1978 $ 21,465 Adjustment for additional taxes levied for prior years 405 21,870 1978 Original Tax Roll 274,589 Adjustments (55) 274,534 Total To Be Accounted For 296,404 Tax Collections: Current Year 264,688 Prior Year 10,486 275,174 Taxes Receivable, April 30, 1979 $ 21,230 Taxes Receivable By Years: 1978 $ 9,847 1977 6,113 1976 2,386 1975 1,217 1974 736 1973 743 1972 67 1971 67 1970 54 $21,230 Property Valuations: 1978 1977 1976 1975 Land $ 8,087,200 $ 7,939,700 $ 6,573,700 $ 5,939,100 Personal Property 718,400 674,000 50,100 439,700 Improvements 33,430,600 30,316,000 23,2:33,100 14,962,600 Total Valuation $42,236,200 $38,929,700 $30,374,900 $21,341,400 Tax Rate Per $100 Valuation $0.65 $0.65 $0.65 $0.65 Tax Year: January 1, 1978 - December 31, 1978 Percent of the assessed valuation to fair market value 100.0% Percent of current taxes collected to current taxes levied 96.4% Percent of current and delinquent taxes collected to current and delinquent taxes outstanding at the beginning of the tax year 92.8% The accompanying notes are an integral part of these financial statements. -8- CLEAR WOODS IMPROVEMENT DISTRICT - HARRIS COUNTY, TEXAS DISTRICT ORGANIZATIONAL COSTS APRIL 30, 1979 Balances Balances May 1, 1978 Additions April 30, 1979 Financial Advisors Fees $ 16,250 $ $ 16,250 Discount on Sale of Bonds 11,875 2,539 14,414 Bond Issue Costs 1,286 535 1,821 Bond Interest (Note 5) 245,349 245,349 Other Costs 3,066 3,066 Interest on Temporary Investments (135,825) (135,825) Legal Fees 154,804 154,804 Aik Total $296,805 $3,074 $299,879 Amounts Provided By: Debt Service Fund $2,539 Construction Fund 535 $3,074 The accompanying notes are an integral part of these financial statements. -9- CLEAR WOODS IMPROVEMENT DISTRICT - HARRIS COUNTY, TEXAS GENERAL FIXED ASSETS APRIL 30, 1979 Balances Balances May 1, 1978 Additions April 30, 1979 Drainage System $ 608,329 $ $ 608,329 Sewer System 686,333 182,820 869,153 Water System 653,800 653,800 Engineering 252,171 252,171 Land 29,622 29,622 Total $2,230,255 $182,820 $2,413,075 • Amounts Provided By: Construction Fund $182,820 The accompanying notes are an integral part of these financial statements. -10- CLEAR WOODS IMPROVEMENT DISTRICT - HARRIS COUNTY, TEXAS NOTES TO FINANCIAL STATEMENTS APRIL 30, 1979 Note 1: Creation of District Clear Woods Improvement District, Harris County, Texas, was created by Acts of the 59th Legislature of the State of Texas, Regular Session, 1965. The Board of Directors held its first meeting on August 10, 1965, and the first bonds were sold on March 21, 1967. Note 2: Accounting Methods The financial statements and supplemental information contained in this report were prepared in accordance with the accrual method of accounting except for the Statement of Changes in Financial Position, All Funds, which was prepared on the cash basis. Furthermore, tax revenues and bond interest are not accrued and the amounts shown for these items reflect cash basis accounting treatment. i The District capitalizes all costs associated with the creation of the District. 'p" All costs directly associated with the sale of bonds are being capitalized. From the date of sale of bonds, through the date of the completion of related improvements, interest revenues and interest expenditures related to the bond proceeds are being capitalized. These amounts are shown on the Balance Sheet as District Organizational Costs. In accordance with the requirements of the Texas Department of Water Resources, these amounts are not being amortized. The District capitalizes the cost of meters and boxes and residential lines as a part of the water system in General Fixed Assets. The District does not maintain detailed fixed asset records, and thus detailed cost information on individual assets are not readily available. In accordance with the requirements of the Texas Department of Water Resources, fixed assets are not being depreciated. Accordingly, replacements of fixed assets and repairs are not capitalized. The full cost of facilities owned by the District is capitalized, funds provided by others are shown as contributions in the Balance Sheet. Bond discounts are capitalized and are being amortized over the life of the applicable bond issue in relation to the principal amount outstanding. The District requires water and sewer service customers to pay a deposit which will be refunded or applied against accounts receivable upon termination of service. These refundable deposits are considered to be an adequate allowance for uncollectible accounts and accordingly, no separate allowance is recorded. Amounts paid by one fund for another fund are transferred to the appropriate fund by adjusting fund balance. Any subsequent repayment is reported as a contra-adjustment of fund balance. Loans by one fund to another fund are reported as inter-fund receivables and payables in the Balance Sheet if there is intent to repay the amount and if the debtor fund has the ability to repay the advance timely. -11- CLEAR WOODS IMPROVEMENT DISTRICT - HARRIS COUNTY, TEXAS NOTES TO FINANCIAL STATEMENTS APRIL 30, 1979 Note 3: Water and Sewer Service Rates The District has established the following rates effective September 7, 1978: Water Service Residential and Commercial Monthly Charge: First 8,000 Gallons of Water Used (Minimum Bill) $ 7.00 Each 1,000 Gallons of Water Used Thereafter .65 Sewer Service Residential and Commercial Monthly Charge: First 50,000 Gallons of Water Used (Minimum Bill) 6.00 Each 1,000 Gallons of Water Used Thereafter .25 Tap Fees Residential Tap Fee (3/4" Tap) 475.00 The above fee includes 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-on fee shall be a negotiated amount per square foot of land in addition to the cost of meter, box and installation. Residential and commercial sewer inspection fee 25.00 Deposits Per Customer 15.00 Note 4: Pledge of Tax and Operating Revenues 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 system. Note 5: Bond Interest Reserve In accordance with the Bond Orders, a portion of the bond proceeds was deposited into the Debt Service Fund and reserved for the payment of bond interest during the construction period. This bond interest is being capitalized as a district organizational cost as it is paid and the reserve account reduced accordingly. -12- CLEAR WOODS IMPROVEMENT DI; STATEMENT OF FUND FOR THE YEAR EN. aneral 'ixed :ts Fund FUND BALANCES, MAY 1, 1978 ',060 PRIOR PERIOD ADJUSTMENTS 1,060 ADDITIONS TO FUND BALANCES: Net Income (Note 4) Transferred from Tax Fund Transferred from Debt Service Fund ,539 Transferred from General Operating Fu Transferred from Construction Fund 3/355 Total Additions to Fund Balances 5,894 DEDUCTIONS FROM FUND BALANCES: Payment of Bond Principal Transferred to Tax Fund Transferred to Construction Fund Transferred to General Fixed Assets Transferred to Debt Service Fund Decrease in investment in uncollected -- Total Deductions from Fund Balances- NET CHANGES IN FUND BALANCES 5,894 FUND BALANCES, APRIL 30, 1979 2,954 The accompanying notes are an integri CTEAR WOODS IMPROVEMENT DI STATLMENT OF CHANGES IN Fr FOR THE YEAR EN SOURCES OF CASH: Cash receipts from operations Cash disbursements for operations: Sewer service expense Directors per diem Professional fees Utilities Management of System Office supplies and expense IP` Repairs and maintenance Insurance Board of Equalization Tax Assessor/Collector fees Debt service and related expenses Other Total Cash Disbursements for Oper Net cash from operations Cash transfers from other Funds Sale of certificates of deposit Total Cash Provided APPLICATIONS OF CASH: Payment of bond principal Payments of accounts payable Purchase of fixed assets Purchase of certificates of deposit Payment of customer deposits Cash transfers to other Funds Total Cash Applied INCREASE (DECREASE) IN CASH CASH BALANCE, MAY 1, 1978 CASH BALANCE, APRIL 30, 1979 The accompanying notes are an integra crFAR WOODS IMPROVEMENT DI GENERAL LONG-TERM DEBT AN APRIL Debt Service Requirements Year Ending For The Year Ending 30, 1980 April 30, 1981 Description al Interest Principal Interest Clear Woods Improvement District 0 $ 27,500 $50,000 $ 25,000 Waterworks and Sewer System Combination Tax and Revenue Bonds, Series 1967 Clear Woods Improvement District 0 40,800 10,000 40,200 Waterworks and Sewer System Combination Tax and Revenue Bonds, Series 1967-A Clear Woods Improvement District 0 39,488 10,000 39,150 Waterworks and Sewer System 47- Combination Tax and Revenue Bonds, Series 1972 Clear Woods Improvement District )0 58,060 10,000 57,385 Waterworks and Sewer System Combination Tax and Revenue Bonds, Series 1974 Totals (Note 8) $165,848 $80,000 $161,735 The accompanying notes are an integn CLEAR WOODS IMPROVEMENT DI GENERAL LONG-TERM DEBT AL\ APRIL Series ) Series 1974 Principal Interes Interest Due Total For The Years Due August September 1, Annual Ending April 30, February 1 Februar, March 1 Total Requirements 1980 $ 50,000 $ 27,f $ 58,060 $ 68,060 $ 240,848 1981 50,000 25,( 57,335 67,385 241,735 1982 50,000 22,! 56,710 66,710 237,285 1983 75 000 20 ( 56,035 66,035 257,835 1984 75,000 16,: 55,360 65,360 252,135 1985 75,000 12,! 54,685 74,685 261,485 53,335 73,335 254,723 1986 75,000 g, 1987 75,000 5,( 51,985 71,985 253,010 1988 25,000 1,; 50,635 80,635 270,960 1989 43, 565 78,565 236,790 1990 46,465 76,465 228,840 1991 44,335 74,335 230,860 "' 1992 42,160 72,160 247,160 J 1993 39,940 69,940 236,915 1994 37,690 77,690 236,540 1995 34,650 74,650 135,575 1996 31,570 71,570 129,795 1997 28,490 68,490 124,015 1998 25,410 65,410 118,235 1999 22,330 62,330 122,455 2000 19,250 69,250 126,000 2001 15,400 65,400 118,775 2002 11,550 61,550 61,550 2003 7,700 57,700 57,700 2004 • 3,850 53,850 53,850 - TOTALS $550,000 $138, $953,545 $1,733,545 $4,735,071 The accompanying notes are an int CLEAR WOODS IMPROVEMENT DISTRICT - HARRIS COUNTY, TEXAS CERTIFICATES OF DEPOSIT APRIL 30, 1979 Accrued Interest Interest Maturity Face Receivable Rate Date Amount April 30, 1979 General Operating Fund Certificates of Deposit: No. 45-006541-7 8.00% 5/17/79 $ 17,080 $ 50 46-001715-4 10.125% 5/7/79 100,000 675 Total 117,080 725 Tax Fund Certificates of Deposit: No. 5-290074-11 9.665% 9/7/79 28,000 390 Total 28,000 390 Debt Service Fund Certificates of Deposit: No. 8028 11.375% 6/26/79 100,000 3,884 45-006452-7 8.00% 7/23/79 7,546 90 45-006511-0 8.00% 7/23/79 2,500 22 Total 110,046 3,996 Total - All Funds $255,126 $5,111 The accompanying notes are an integral part of these financial statements. -7- AUDIT REPORT CLEAR WOODS IMPROVEMENT DISTRICT HARRIS COUNTY, TEXAS APRIL 30, 1979 CONTENTS ACCOUNTANTS' REPORT BALANCE SHEET - ALL FUNDS 1 STATEMENT OF REVENUES AND EXPENSE - ALL FUNDS 2 STATEMENT OF FUND BALANCES - ALL FUNDS 3 STATEMENT OF CHANGES IN FINANCIAL POSITION - ALL FUNDS 4 GENERAL LONG-TERM DEBT AND DEBT SERVICE REQUIREMENTS 5, 6 CERTIFICATES OF DEPOSIT 7 TAXES RECEIVABLE 8 DISTRICT ORGANIZATIONAL COSTS 9 GENERAL FIXED ASSETS 10 NOTES TO FINANCIAL STATEMENTS 11, 12, 13, 14 Members American Institute Of DAVID L. MERRITT & COMPANY Members Texas Society Of Certified Public Accountants Certified Public Accountants Certified Public Accountants 400 F.M. 1960 WEST,SUITE 211 HOUSTON,TEXAS 77090 PHONE: 444-2637 August 29, 1979 Board of Directors Clear Woods Improvement District Harris County, Texas We have examined the Balance Sheets of all Funds of Clear Woods Improvement District, Harris County, Texas, as of April 30, 1979, and all Funds related Statements of Revenues, Expenses and Fund Balances and Changes in Financial Position for the year ended April 30, 1979. Our examination was made in accord- ance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we con- sidered necessary in the circumstances. In accordance with the suggestions of the Texas Department of Water Resources, the District did not depreciate its general fixed assets. We have observed no departures by the District from the requirements of the Bond Orders except as described in detail in Note 7 of the Notes to Financial Statements. In our opinion, the accompanying financial statements examined by us present fairly the financial position of the Clear Woods Improvement District, Harris County, Texas, for all Funds as of April 30, 1979, and the results of its operations and changes in financial position for the year then ended, in conformity with generally accepted accounting principles applied on a consistent basis. CLEAR WOODS IMPROVEMENT DI: BALANCE SHE] APRIL : meral General Ig-Term Fixed )t Fund Assets Fund AS Cash Certificates of Deposit Accrued Interest Receivable Accounts Receivable - Water and Sewer S Prepaid Insurance Taxes Receivable 2,413,075 General Fixed Assets Unamortized Bond Discount 299,879 District Organizational Costs 000 Amount to be Provided to Retire General' Amount to be Provided for Bonded Debt TOTAL ASSETS J,000 $2,712,954 LIABILITIES, RESET Liabilities: Accounts Payable Contract Retainage Deferred revenue Refundable Customer Deposits 0,000 Bonds Payable (Note 8) Series 1967 Bond Principal Payable - Series 1967-A Bond Principal. Payable Series 1972 Bond Principal Payable - Series 1974 Bond Principal Payable - 0,000 Total Liabilities Reserves and Fund Balances: Reserve For : Uncollected Taxes Interest Earnings Not Transferred 2 Investment in General Fixed Assets Fund Fund Balances 2,712,954 Total Reserves and Fund Balances TOTAL LIABILITIES, RESERVES AND 0,000 $2,712,954 The accompanying notes are an integr CLEAR WOODS IMPROVEMENT L STATEMENT OF REVENUE: FOR THE YEAR E General Fixed Assets Fund OPERATING REVENUES: Service revenue (Note 3) $ Water tap revenue Tax revenue Penalty and interest Total Operating Revenues OPERATING EXPENSES: Sewer service expense Directors per diem Professional fees Utilities Management of System Office supplies and expense Repairs and maintenance Insurance Board of Equalization Tax Assessor/Collector fees Other Total Operating Expenses NET INCOME FROM OPERATIONS NON-OPERATING REVENUES: Interest Sewer inspection revenue Other Total Non-Operating Revenues NON-OPERATING EXPENSES: Water tap expense Debt service and related expenses Total Non-Operating Expenses NET INCOME (LOSS) (Note 4) $ - The accompanying notes are an integr,