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HomeMy WebLinkAbout1973 03 31 Single Audit Report - Harris county water control and improvement district No.108 { --ooOoo-- AUDIT REPORT HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 HARRIS COUNTY, TEXAS -o- MARCH 31 , 1973 --ooOoo-- I f --ooOoo-- C O N T E N T S Exhibit Schedule ACCOUNTANTS' REPORT COMBINED BALANCE SHEET, ALL FUNDS A CERTIFICATES OF DEPOSIT A-1 REVENUES, EXPENSES AND FUND BALANCE, OPERATING FUND B REVENUES, EXPENSES AND FUND BALANCE, TAX FUND C TAXES RECEIVABLE C-1 REVENUES, EXPENSES AND FUND BALANCE, DEBT SERVICE FUND D BOND INTEREST RESERVE D-1 RECEIPTS AND DISBURSEMENTS , DEBT SERVICE FUND AND CONSTRUCTION FUND E GENERAL LONG-TERM DEBT AND DEBT SERVICE REQUIREMENTS F GENERAL FIXED ASSETS G DISTRICT ORGANIZATIONAL COSTS H NOTES TO FINANCIAL STATEMENTS I --ooOoo-- WHITE, PETROV & MCHONE CERTIFIED PUBLIC ACCOUNTANTS ROBERT A.WHITE 600 JEFFERSON • SUITE 1150 JOSEPH W.PETROV HOUSTON,TEXAS 77002 ROBERT W. MCHONE November 14, 1973 MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS TELEPHONE (713) 224-7758 Board of Directors Harris County Water Control and Improvement District No. 108 Harris County, Texas We have examined the combined balance sheet , all funds, of HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 as of March 31 , 1973, and the related statements of revenues , expenses and fund balances for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The District is in the developmental stage and construction of the fixed assets is not complete at the balance sheet date. In accordance with the suggestions of the Texas Water Rights Commission, the District did not depreciate its general fixed assets. We observed no departures by the District from the requirements of the bond orders except as described in detail in note 11 of the notes to financial statements. In our opinion, the accompanying combined balance sheet , all funds, and the related statements of revenues, expenses and fund balances present fairly the financial postion of HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 as of March 31 , 1973, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. The supplementary information contained in this report has been subjected to the tests and other auditing procedures applied in the examination of the financial statements mentioned above, and, in our opinion, is fairly stated in relation to the financial statements taken as a whole. 44444., ,e"& gOTC711:1)4A----- Our certificate or report upon an audit or examination is delivered to client with the understanding that any publication, advertisement, or copy therefrom, in full or in part,of such certificate or report, shall be in the form to be approved by us. Exhibit A COMBINED BALANCE SF HARRIS COUNTY WATER CONTROL AND MARCH 31 , General General Long-Term Fixed Debt Assets A S SET S Cash Certificate of Deposit, Schedule A-1 Accrued Interest Receivable, Schedule A- Accounts Receivable, Water and Sewer Ser Taxes Receivable, Schedule C-1 Prepaid Coupon Interest on Bonds, Note 1 Due from Other Funds General Fixed Assets, Exhibit G 1 939 111 District Organizational Costs, Exhibit H 607 650 Amount to be Provided to Retire General 2 800 000 TOTAL ASSETS 2 800 000 2 546 761 LIABILITIES, RESERVES AND FUND BALANCES Liabilities Accounts Payable Due to Other Funds Bonds Payable, Exhibit F 2 800 000 Total Liabilities 2 800 000 -o- Reserves and Fund Balances Reserve For Uncollected Taxes Authorized Construction Bond Interest, Schedule D-1 Investment in General Fixed Assets 2 546 761 Fund Balances Total Reserves and Fund Balances -o- 2 546 761 TOTAL LIABILITIES, RESERVES AND 2 800 000 2 546 761 The NOTES TO FINANCIAL STATEMENTS are | , Schedule A-1 CERTIFICATES OF DEPOSIT HARR|S COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH ]l , 1973 | Accrued Interest Interest Maturity Face Receivable Rate Date Amount March 3l , 1973 Construct /on Fund Certificate of Deposit ' No. 346 6.0% 4/17/73 | O] 204 | 372 No. 368 6,0% 4/19/73 51 008 93 Totals , Construction Fund 154 212 l 365 ( ! Debt Service Fund ` ` Certificate of Deposit No. 15902 6,6% 9/20/73 170 448 5 609 No. 77337 5,00% 9/20/73 7 000 35 i No. 17494 5.0% 9/20/73 6 500 2 Totals , Debt Service Fund lA] 948 5 646 < | / > ' / ' / The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. Exhibit B REVENUES, EXPENSES AND FUND BALANCE, OPERATING FUND HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 FOR THE YEAR ENDED MARCH 31 , 1973 OPERATING REVENUES Water Services, Note 7 28 036 Sewer Services , Note 7 10 925 Garbage Services 9 954 Sewer Inspections 650 Late Charges 685 Reconnections 60 Repairs Income 269 TOTAL OPERATING REVENUES 50 579 e OPERATING EXPENSES Miscellaneous Expense 310 Bookkeeping Fees 2 625 Insurance 508 Fidelity Bonds 33 Garbage Expense 10 014 Legal Fees 2 377 Monthly Services 11 400 Office Supplies 430 Repairs and Maintenance 3 285 Utilities 1 850 Sewer Service Expense, Note 14 10 338 Water Service Expense 5 153 Directors Per Diems 1 475 TOTAL OPERATING EXPENSES 49 798 NET OPERATING REVENUES 781 OTHER REVENUES (EXPENSES) Water Tap Fees 22 560 Water Tap Expense ( 6 965) 15 595 NET REVENUE FOR THE PERIOD , Note 6 16 376 FUND BALANCE, MARCH 31 , 1972 2 369 FUND BALANCE, MARCH 31 , 1973 18 745 The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. Exhibit C REVENUES, EXPENSES AND FUND BALANCE, TAX FUND HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 FOR THE YEAR ENDED MARCH 31 , 1973 REVENUES Taxes 49 904 Penalty and Interest 2 TOTAL REVENUES 49 906 EXPENSES Tax Assessor-Collector Fees 2 189 Board of Equalization 200 Legal Fees 200 Fidelity Bond 25 TOTAL EXPENSES 2 614 NET REVENUES , Note 6 47 292 FUND BALANCE, MARCH 31 , 1972 3 399 Transfers to Debt Service Fund (36 500) FUND BALANCE, MARCH 31 , 1973 14 191 The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. Schedule C-1 TAXES RECEIVABLE HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1973 Taxes Receivable, March 31 , 1972 1 128 1972 Original Tax Roll 65 876 Additions and Corrections 1 610 Adjusted Tax Roll 67 486 Total to be Accounted For 68 614 Tax Collections: Current Year 49 892 Prior Years 12 49 904 Taxes Receivable, March 31 , 1973 18 710 Taxes Receivable by Years 1972 Taxes Receivable 17 594 I 1971 Taxes Receivable 1 076 1970 Taxes Receivable 40 Total Taxes Receivable 18 710 Property Valuations 1972 1971 1970 Land 3 946 313 2 023 822 1 561 863 Improvements 4 975 675 1 816 375 17 500 Personal Property 75 820 -o- -o- Total Valuations 8 997 808 3 840 197 1 579 363 Tax Rate Per $100 Valuation 0.75 0.45 0.45 The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. Exhibit D REVENUES, EXPENSES AND FUND BALANCE, DEBT SERVICE FUND HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 FOR THE YEAR ENDED MARCH 31 , 1973 REVENUES Appropriation from Bond Interest Reserve, Schedule D-1 , Note 4 235 000 Accrued Interest on Bonds at Time of Sale 1 590 Interest Earned on Certificates of Deposit , Note 3 34 270 Transfers from Tax Fund 36 500 TOTAL REVENUES 307 360 EXPENSES Bond Interest 260 965 NET REVENUES 46 395 FUND BALANCE, MARCH 31 , 1972 104 734 FUND BALANCE , MARCH 31 , 1973 151 129 The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. f " Schedule D-1 BOND INTEREST RESERVE HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1973 Bond Interest Reserve, March 31 , 1972 315 210 Additions: Two Years Interest During Construction Period , Note 4 $530,000 Series 1972 94 936 ' Total to be Accounted For 410 146 Deductions: Bond Interest Transferred to Debt Service Fund $600,000 Series 1971 26 625 J $370,000 Series 1970A 37 000 $1 ,300,000 Series 1971A 154 084 $530,000 Series 1972 17 291 Total Deductions 235 000 Bond Interest Reserve, March 31 , 1973 175 146 Bond Interest Reserve $370,000 Series 1970A -o- $600,000 Series 1971 -o- $1 ,300,000 Series 1971A 97 501 $530,000 Series 1972 77 645 Bond Interest Reserve 175 146 The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. f Exhibit E RECEIPTS AND DISBURSEMENTS, DEBT SERVICE FUND AND CONSTRUCTION FUND HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 FOR THE YEAR ENDED MARCH 31 , 1973 Debt Service Construction Fund Fund RECEIPTS Proceeds from the Sale of Bonds, Note 4 94 936 419 164 Accrued Interest Received on Bonds at Time of Sale 1 590 Redemption of Certificates of Deposit 230 316 509 148 Interest Received on Certificates of Deposit 20 381 18 785 Transfers from Tax Fund 36 500 Interest Received on Certificates of Deposit Transferred from Construction Fund 17 021 TOTAL RECEIPTS 400 744 947 097 DISBURSEMENTS Interest Received on Certificates of Deposit Transferred to Debt Service Fund 17 021 Construction of System 466 889 Purchase of Certificates of Deposit 146 823 460 894 Payment of Prior Years Accounts Payable 57 860 Payments for Other Funds 15 220 District Organizational Costs, Note 5 34 983 Bond Interest , Note 12 260 731 TOTAL DISBURSEMENTS 407 554 1 052 867 EXCESS OF DISBURSEMENTS OVER RECEIPTS ( 6 810) ( 105 770) CASH BALANCE, MARCH 31 , 1972 7 552 121 279 CASH BALANCE, MARCH 31 , 1973 742 15 509 The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. Exhibit F Page l of 2 | GENERAL LONG-TERM DEBT AND O HARR|S COUNTY WATER CONTROL AND MARCH 31 , ebt Service Requirements ' The Year Ending For The Year Ending ' March 31 , 1974 March 31 , 1975 Description ncipal Interest Principal Interest - Harris County Water Control and Improvement District No, 108 Waterworks and Sewer System Combination Tax and Revenue Bonds, Series 1970A �7 0OO �O �45 Harris County Water Control and Improvement District No. 108 Waterworks and Sewer System Combination Tax and Revenue ' Refunding Bonds, Series 1971 �l UOO �O 000 Harris County Water Control and Improvement District No. lUA Waterworks and Sewer System Combination Tex and Revenue Bonds, Series 1971A l ]D OOO 130 OOO Harris County Water Control and Improvement District No. lDA Waterworks and Sewer System Combination Tax and Revenue Bonds, Series 1972 �7 7OO 7-0- �7 7O0 TOTALS, Notes q and 13 -0- 285 700 -0- 268 645 | *Sold at 97.0% of Par Value / ` ' The NOTES TO FINANCIAL STATEMENTS are Exhibit F Page 2 of 2 GENERAL LONG-TERM DEBT AND DEBT SERVICE REQUIREMENTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1973 Principal Principal Interest Interest Total For The Years Due Due Due Due Annual Ending March 31 April 1 October 1 April 1 October 1 Requirements 1974 132 850 132 850 265 700 1975 134 323 134 322 268 645 1976 117 491 117 491 234 982 1977 30 000 5 000 117 491 110 441 262 932 1978 30 000 5 000 110 229 109 141 254 370 1979 30 000 10 000 108 929 101 028 249 957 1980 35 000 10 000 100 603 99 398 245 001 1981 45 000 10 000 98 973 97 341 251 314 1982 45 000 10 000 96 916 95 285 247 201 1983 50 000 10 000 94 860 93 048 247 908 1984 50 000 15 000 92 623 90 810 248 433 1985 60 000 15 000 90 173 87 985 253 158 1986 60 000 15 000 87 347 85 160 247 507 1987 70 000 15 000 84 523 81 985 251 508 1988 75 000 15 000 81 385 78 654 250 039 1989 80 000 15 000 78 054 75 141 248 195 1990 90 000 15 000 74 541 71 191 250 732 1991 95 000 15 000 70 591 67 073 247 664 1992 105 000 15 000 66 442 62 543 248 985 1993 110 000 15 000 61 912 57 825 244 737 1994 120 000 20 000 57 195 52 645 249 840 1995 130 000 20 000 51 805 46 892 248 697 1996 140 000 20 000 46 052 40 753 246 805 1997 160 000 20 000 39 912 33 913 253 825 1998 175 000 20 000 33 073 26 516 254 589 1999 195 000 20 000 25 676 18 370 259 046 2000 220 000 20 000 17 530 9 305 266 835 2001 230 000 20 000 8 465 840 259 305 TOTALS 2 430 000 370 000 2 179 964 2 077 946 7 057 910 The NOTES TO FINANCIAL STATEMENTS are an integral part of this report . Exhibit G GENERAL FIXED ASSETS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1973 Balances Balances April 1 , 1972 Additions March 31 , 1973 Drainage System 397 066 225 498 622 564 Sewer System 530 046 176 992 707 038 Water System 330 843 102 859 433 702 Engineering 118 437 55 695 174 132 Land -o- 1 675 1 675 i TOTAL , Notes 10 and 11 1 376 392 562 719 1 939 111 Additions Provided By 1 Construction Fund Disbursed 466 889 Accrued 95 830 Total Amount Provided 562 719 i The NOTES TO FINANCIAL STATEMENTS are an integral part of this report . Exhibit H DISTRICT ORGANIZATIONAL COSTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1973 Balances Balances April 1 , 1972 Additions March 31 , 1973 Directors Per Diems 4 925 4 925 Bond Coupon Interest, Note 4 110 861 235 000 345 861 Legal Fees 103 138 24 550 127 688 Fiscal Advisory Fees 33 400 10 600 44 000 Bond Discount 63 254 15 900 79 154 Publication of Legal Notices 2 340 176 2 516 Creation of District 1 050 73 1 123 Bond Printing Expense 1 205 355 1 560 Election Expense 516 100 616 1 Other 178 29 207 TOTAL , Note 5 320 867 286 783 607 650 Additions Provided By Construction Fund Disbursed 34 983 Accrued 900 35 883 Debt Service Fund 235 000 General Long-Term Debt , Discount on Sale of Bonds 15 900 Total Amount Provided 286 783 The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. Exhibit I Page 1 of 4 NOTES TO FINANCIAL STATEMENTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1973 Note 1 : Creation of District Harris County Water Control and Improvement District No. 108 was created by an order of the Texas Water Rights Commission effective October 22, 1968. The Board of Directors held its first meeting on November 7, 1968, and the first bonds were sold on August 31 , 1970. Note 2: Accounting Methods The exhibits and supporting schedules contained in this report were prepared on the accrual method of accounting except for Exhibit C which was prepared on the modified accrual method and Exhibit E which was prepared on the cash basis. Note 3: Interest Earned on Investments The District has adopted the policy of transferring interest earned on investments of the construction fund permanently to the debt service fund. Interest on construction fund investments amounted to $15,248 for the current year. Note 4: Bond Interest Reserve In accordance with Section VIII of 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. Note 5: District Organizational Cost The District has elected to capitalize and charge to district organizational costs all costs incurred in the issue and sale of bonds, costs of creating and organizing the District and some administrative costs until construction of fixed assets is completed. Exhibit I Page 2 of 4 NOTES TO FINANCIAL STATEMENTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1973 Note 6: Pledge of Tax and Operating Revenue 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 7: Water and Sewer Service Rates The District has established the following water and sewer service rates: Residential and Commercial Combined Water and Sewer Service First 8,000 Gallons of Water Used (Minimum Bill )* 8.75 Each 1 ,000 Gallons of Water Used Thereafter .45 Water Service Only First 8,000 Gallons of Water Used (Minimum Bill ) 5.00 Each 1 ,000 Gallons of Water Used Thereafter .45 Sewer Service Only Sewer Service (Minimum Bill ) 3.75 *Master metered townhouses are based on first 5,000 gallons of water used time the number of units. Note 8: Water and Sewer Service Customers The following is a comparison of the number of metered water and sewer service customers serviced by the District: March 31 , 1972 220 March 31 , 1973 383 Note 9: Redemption of Bonds The outstanding bonds of Harris County Water Control and Improvement District No. 108 are callable for redemption prior to maturity at the option of the District. The bonds may be called in whole or in part for the purpose of retirement or refunding, or both, at par in addition to unpaid accrued interest. Bonds of the Series 1970A, 1971 , 1971A and 1972 may be called on October 1 , 1985, April 1 , 1985, April 1 , 1986 and April 1 , 1987, respectively, or any interest date thereafter. Exhibit I Page 3 of 4 NOTES TO FINANCIAL STATEMENTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1973 Note 10: Insurance Coverage Bond Order dated March 3, 1970, Section X, Paragraph E, requires that as long as any of the bonds are outstanding, the District will maintain insurance on its facilities for the benefit of bondholders of a type and in an amount which usually would be carried by private companies engaged in a similar type of business. At the balance sheet date the District carried the following insurance: Insuror: National Standard Insurance Co. Policy Number: 7299358 Policy Period: 11/22/72 to 11/22/73 Amount of Coverage: $170,000 Type of Coverage: Fire and Lightning, Extended Coverage, Vandalism and Malicious Mischief Description of Property Covered: Water and Sewer Plants Insuror: Maryland American General Insurance Co. Policy Number: 50-759501 Policy Period : 11/22/72 to 11 /22/73 Amount of Coverage: $100,000/$300,000/$25,000 Type of Coverage: Manufacturers' and Contractors' Liability Note 11 : Engineering Report The Bond Order dated March 3, 1970, Section X, Paragraph I , states that a complete engineering inspection report of the 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 12: Prepaid Coupon Interest Coupon interest in the amount of $132,850, was transmitted to the bond paying agent in March , 1973, for the interest due April 1 , 1973. Exhibit I Page 4 of 4 NOTES TO FINANCIAL STATEMENTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1973 Note 13: Supplemental Coupons All bonds of the Series 1970A and Series 1971A have supplemental coupons attached so that the total interest paid on each bond shall be 10% per annum from January 1 , 1971 to October 1 , 1973, on the Series 1970A and from October 1 , 1971 to October 1 , 1974 on the Series 1971A. All bonds of the Series 1971 Refunding Bonds shall have supplemental coupons attached so that the total interest paid on each bond will be equal to eight and one-half per cent (8-1/2%) per annum from July 1 , 1971 , to October 1 , 1973, and ten per cent (10%) per annum from October 1 , 1973 to April 1 , 1978. Bonds of the Series 1972 maturing in the years 1982 through 2000, aggregating $490,000, have supplemental coupons attached so that the total interest paid on each bond shall be nine per cent (9%) per annum from June 1 , 1972 to April 1 , 1976. Note 14: Contract with City of Friendswood On October 19, 1971 , the District entered into a waste disposal contract with the City of Friendswood , Texas. Under the terms of this contract , the District constructed lines and facilities to transport waste to the sanitary sewer trunk line facilities of the City. Also, on March 30, 1972 , the District paid the City $239,000 for expansion and improvement of the City's sewage treatment facilities to meet all state and federal regulations. Under this contract the District is entitled to have up to 460,000 gallons per day treated by the City. The City is responsible for all maintenance and operation of the plant . As of June 15, 1972, the District must pay $3.00 per connection, per month for sewer treatment service.