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Home My WebLink About1972 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 , 1972 --ooOoo-- --ooOoo-- C O N T ENT 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, 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 August 12, 1972 HOUSTON,TEXAS 77002 ROBERT W.MCHONE 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 , 1972, and the related statements of revenues , expenses and fund balances for the nineteen month period 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 notes 7 and 10 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 position of HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 as of March 31 , 1972, and the results of its operations for the nineteen month period then ended, in conformity with generally accepted accounting principles. 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. wjt, /.. ! Our certificate or report upon en 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 I COMBINED BALANCE SH HARRIS COUNTY WATER CONTROL AND MARCH 31 , General General 4n Long-Term Fixed Debt Assets ASSETS Cash Certificate of Deposit , Schedule A-1 Accrued Interest Receivable, Schedule A- Accounts Receivable, Water and Sewer Cus Taxes Receivable, Schedule C-1 Prepaid Coupon Interest on Bonds, Note 1 Due from Other Funds Fixed Assets, Exhibit G 1 376 392 District Organizational Costs, Exhibit H 320 867 Amount to be Provided to Retire Long-Ter, 2 270 000 TOTAL ASSETS 2 270 000 1 697 259 LIABILITIES, RESERVES AND FUND BALANCES Liabilities Accounts Payable Due to Other Funds Bonds Payable, Exhibit F 2 270 000 Total Liabilities 2 270 000 -o- Reserves and Fund Balances Reserve For Uncollected Taxes Authorized Construction Bond Interest, Schedule D-1 Investment in General Fixed Assets 1 697 259 Fund Balances Total Reserves and Fund Balances -o- 1 697 259 TOTAL LIABILITIES, RESERVES AND 2 270 000 1 697 259 The NOTES TO FINANCIAL STATEMENTS are Schedule A-1 CERTIFICATES OF DEPOSIT HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1972 Acc rued Interest Interest Maturity Face Receivable Rate Date Amount March 31 , 1972 Construction Fund Certificate of Deposit No. 12575 7.00% 5/01/72 100 000 4 018 No. 13919 5.25% 5/01/72 102 466 884 Totals, Construction Fund 202 466 4 902 Debt Service Fund Certificate of Deposit No. 12567 7.25% 9/20/72 163 625 6 825 No. 14325 5.75% 9/17/72 103 816 180 Totals, Debt Service Fund 267 441 7 005 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 FROM INCEPTION THROUGH MARCH 31 , 1972 OPERATING REVENUES Water Services, Note 3 19 692 Sewer Services, Note 3 4 434 Garbage Services 5 547 Sewer Inspections 1 750 Late Charges 443 Reconnections 55 Repairs Income 8 TOTAL OPERATING REVENUES 31 929 OPERATING EXPENSES Miscellaneous Expense 805 Bookkeeping Fees 1 950 Elections 225 Fidelity Bonds 609 Garbage Expense 5 344 Legal Fees 2 663 Monthly Services 11 250 Office Supplies 362 Repairs and Maintenance 4 545 Utilities 360 Sewer Inspections Expense 1 750 Sewer Service Expense, Note 14 4 355 Water Service Expense 12 392 TOTAL OPERATING EXPENSES 46 610 NET OPERATING LOSS (14 681 ) OTHER REVENUES (EXPENSES) Water Tap Fees 35 165 Water Tap Expense (18 115) 17 050 NET REVENUE FOR THE PERIOD, Note 4 2 369 FUND BALANCE AT INCEPTION -o- FUND BALANCE, MARCH 31 , 1972 2 369 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 FROM INCEPTION THROUGH MARCH 31 , 1972 REVENUES Taxes 23 273 Penalty and Interest 113 TOTAL REVENUES 23 386 EXPENSES Tax Assessor Collector Fees 2 475 Board of Equalization 200 Legal Fees 200 Fidelity Bond 25 Publication of Legal Notices 19 Office Supplies 68 TOTAL EXPENSES 2 987 NET REVENUES, Note 4 20 399 FUND BALANCE AT INCEPTION -o- Transfers to Debt Service Fund (17 000) FUND BALANCE, MARCH 31 , 1972 3 399 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 , 1972 Taxes Receivable at Inception -o- 1970 and 1971 Original Tax Rolls 24 388 Additions and Corrections 13 Adjusted Tax Roll 24 401 Total to be Accounted For 24 401 Tax Collections: Current Year 16 206 Prior Years 7 067 23 273 Taxes Receivable at March 31 , 1972 1 128 Taxes Receivable by Years 1971 Taxes Receivable 1 076 1970 Taxes Receivable 52 Total Taxes Receivable 1 128 Property Valuations 1971 1970 Land 2 023 822 1 561 863 Improvements 1 816 375 17 500 Personal Property -o- -o- Total Valuations 3 840 197 1 579 363 Tax Rate Per $100 Valuation, Note 11 0.45 0.45 The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. Exhibit i REVENUES, EXPENSES AND FUND BALANCE, DEBT SERVICE FUND HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 FROM INCEPTION THROUGH MARCH 31 , 1972 REVENUES Appropriation from Bond Interest Reserve, :. DepositAccrued Interest on Bonds at Time of Sale 36 993 Interest Earned on Certificates of Transfers from Tax Fund 17 000 TOTAL REVENUES 215 595 EXPENSES Bond Interest :. NET REVENUES 104 734 FUND BALANCE AT INCEPTION -o- The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. \ ' - Schedule D-1 BOND INTEREST RESERVE HARR|S COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 37 , 7872 Bond Interest Reserve, at Inception -u- Addit7ons: Two Years Interest During Construction Period, Note 5 *$600,000 Series 1970, 102 OOO $370,000 Series1970 A 72 486 $1 ,300,000 Series 1971 A 251 585 426 07/ Total to be Accounted For 426 071 Deductions: Bond Interest Transferred to Debt Service Fund *$600,000 Series 1970 51 ODD $370,000 Series 1970 A 35 486 *$600"000 Series 1971 24 375 Total Deductions llO 867 Bond Interest Reserve, March 31 , 1972 315 210 Bond Interest Reserve $370,000 Series 1970 A 37 OOO $600,000 Series 7977 26 625 $1 ,300,000 Series 1971 A 251 585 Bond intare�t Reserve. 315 210 * The $600,000 Series 1970 was refunded by the $600,000 Series 1971 . The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. Exhibit E RECEIPTS AND DISBURSEMENTS, CONSTRUCTION FUND HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 FROM INCEPTION THROUGH MARCH 31 , 1972 RECEIPTS Proceeds from the Sale of Bonds, Note 5 1 781 025 Redemption of Certificates of Deposit 909 006 Interest Received on Certificates of Deposit 16 188 TOTAL RECEIPTS 2 706 219 DISBURSEMENTS Construction of System 1 299 830 Purchase of Certificates of Deposit 1 125 000 Payments for Other Funds 13 358 District Organizational Costs, Note 6 146 752 TOTAL DISBURSEMENTS 2 584 940 EXCESS OF RECEIPTS OVER DISBURSEMENTS 121 279 CASH BALANCE AT INCEPTION -o- CASH BALANCE AT MARCH 31 , 1972 121 279 The NOTES TO FINANCIAL STATEMENTS are an integral part of this report. Exhibit F Page l of 2 GENERAL LONG-TERM DEBT AND HARR|S COUNTY WATER CONTROL AND MARCH 31 ' Debt Service Requirements Year Ending Year Ending / March 31 , 1973 March 31 , 1974 Description Principal Interest Principal interest ` Harris County Water Control and Improvement District No. 108 � Waterworks and Sewer System Combination Tax and Revenue Bonds, Series 1970 * -o- -o- -m- -o- Harris County Water Control and Improvement District No. 108 / / Waterworks and Sewer System Combination Tau and Revenue | Bonds, Series 1970-A, Notes ll and 13 ** -o- 37 OOU -o- 37 OOO Harris County Water Control and Improvement District No. 108 Waterworks and Sewer System Combination Tax and Revenue Refunding Bonds, Series 1971 -o- 51 OOO -o- 51 OOU Harris County Water Control and Improvement District No. 108 Waterworks and Sewer System Combinstion Tax and Revenue Bonds, Series 1971-A, Note 13 -0- 154 084 -0- 130 000 242 O84 218 OOO K TOTALS, Note � �� , * Sold at 99, 1% of Par Value ++ Sold at 95.0% of Par Value �«* Sold at 97.T1, of Par Value The NOTES TO FINANCIAL STATEMENTS ar, | Exhibit F Page 2 of 2 GENERAL LONG-TERM DEBT AND DEBT SERVICE REQUIREMENTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 i MARCH 31 , 1972 Principal Interest Interest Total For The Years Due Due Due Annual Ending March 31 October 1 April 1 October 1 Requirements 1973 133 084 109 000 242 084 1974 109 000 109 000 218 000 1975 110 473 110 472 220 945 1976 93 641 93 642 187 283 1977 3o 000 93 641 92 723 216 364 1978 30 000 92 510 91 591 214 lol 1979 35 000 91 379 83 710 210 089 1980 4o 000 83 285 82 185 205 47o 1981 45 000 81 760 80 466 207 226 1982 45 000 80 041 78 748 203 789 1983 50 000 78 323 76 847 205 17o 1984 55 000 76 423 74 947 206 37o 1985 65 000 74 310 72 460 211 770 1986 65 000 71 823 69 972 206 795 1987 7o 000 69 335 67 304 206 639 1988 75 000 66 704 64 479 206 183 1989 80 000 63 879 61 472 205 351 1990 90 000 6o 873 58 029 208 902 1991 90 000 57 429 54 585 202 014 1992 100 000 53 955 50 730 204 685 1993 105 000 5o 100 46 688 201 788 1994 120 000 46 057 42 183 208 240 1995 125 000 41 342 37 274 203 616 1996 135 000 36 434 31 977 203 411 1997 140 000 31 137 26 488 197 625 1998 150 000 25 647 20 610 196 257 1999 165 000 19 77o 14 151 198 921 2000 180 000 13 311 7 111 200 422 2001 185 000 6 271 840 192 111 TOTALS 2 270 000 1 911 937 1 809 684 5 991 621 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 1 MARCH 31 , 1972 Drainage System 397 066 Sewer System 530 046 Water System 330 843 Engineering 118 437 TOTAL, Notes 7 and 10 1 376 392 Additions Provided By Construction Fund Disbursed 1 299 830 Accrued 60 512 1 360 342 Operating Fund 16 050 Total Amount Provided 1 376 392 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 Bond Coupon Interest 110 861 Legal Fees 103 138 Fiscal Advisory Fees 33 00 Bond Discount 63 254 Publication of Legal Notices 2 340 Creation of District 1 050 Bond Printing Expense 1 205 Election Expense 516 Paying Agent ' s Fees 178 Total , Note 6 i :. Exhibit I Page 1 of 4 NOTES TO FINANCIAL STATEMENTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1972 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 E which was prepared on a cash basis. Note 3: Water and Sewer Service Rates The District has established the following water and sewer service rates effective January 3, 1969. Residential and Commercial Combined Water and Sewer Service First 8,000 Gallons of Water Used (Minimum Bill ) 7.00 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 ) 2.00 Note 4: 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. Exhibit I Page 2 of 4 NOTES TO FINANCIAL STATEMENTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1972 Note 5: 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 6: 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. Note 7: 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 8: 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 1970 and Series 1971 may be called on April 1 , 1985, or any interest date thereafter. Bonds of the Series 1970-A and Series 1971 -A may be called on October 1 , 1985 and April 1 , 1986, respectively or any interest date thereafter. Note 9: Water and Sewer Service Customers The number of metered water and sewer service customers serviced by the District at March 31 , 1972 was 220. Exhibit I Page 3 of 4 NOTES TO FINANCIAL STATEMENTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1972 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 owned recently completed facilities that were not insured. Note 11 : Agreement with Developer On August 31 , 1970, the developer of the District entered into a guarantee of payment of any and all amounts needed for debt service (principal , interest and all costs and expenses) connected with the $370,000 Series 1970-A issue of bonds in the event an independent firm of Certified Public Accountants states that the District will not have adequate revenue from other sources after payment of reasonable and necessary operating costs and expenses. The developer shall not be liable under this guarantee during the initial two years that the bonds are outstanding, but thereafter the obligations of the developer shall remain in full force as long as any of the Series 1970-A bonds are out- standing or until such time that the assessed valuation of the District reaches $8,000,000 or the City of Houston, Texas, assumes and agrees to pay the obligations of the District on said bonds. The obligations of the developer under this guarantee shall be reduced to the extent that the District fails, starting with the taxes to be collected in 1973, to maintain a tax levy of at least $0.45 per $100 valuation and/or if the District does not maintain rates for services equal to those initially set by the District . Note 12: Prepaid Coupon Interest This amount was transmitted to the bond paying agent in March, 1972, for the interest due April 1 , 1972. Note 13: Supplemental Coupons All bonds of the Series 1970-A and Series 1971-A 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 1970-A and from October 1 , 1971 to October 1 , 1974 on the Series 1971-A. Exhibit I Page 4 of 4 NOTES TO FINANCIAL STATEMENTS HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 MARCH 31 , 1972 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; however, the District received only $2.00 per connection, per month from the residents of the District for sewer service (see note 3) .