HomeMy WebLinkAbout1985 12 31 Single Audit Report - Harris county water control and improvement district No.108 41
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
INDEX
December 31, 1985
Page
Auditors Report 1
410
Combined Balance Sheet - All Governmental Fund Types and
Account Groups 2
Combined Statement of Revenues, Expenditures, and Changes
in Fund Balances - All Governmental Fund Types 3
+1 Statement of Revenues, Expenditures, and Changes in Fund
Balance - Budget and Actual, General Fund 4
Notes To Financial Statements 5
Supplemental Information
41
Schedule
(Schedules included are checked - X)
X Notes Required by the Water District Accounting Manual
(See Notes To Financial Statements - Pages 5 to 8) D
X Analysis of Changes in Cash and Temporary Investments41
E
X General Long-Term Debt Service Requirements by Fiscal Years F
X Analysis of Changes in General Long-Term Debt G
X Schedule of Temporary Investments H
X Analysis of Taxes Receivable I
X Analysis of Organizational Costs J
X Analysis of Changes in General Fixed Assets K
Schedule of Notes Payable L
(None)
41
X Comparative Schedule of Revenues and Expenditures - Five Years M
X Insurance Coverage N
X Board Members, Key Personnel and Consultants 0
ler X Questionnaire Completed By The Auditor p
X Certificate of The Board of Directors Q
41
41
411
VAN SAHAKIAN
Certified Public Accountant 2400 Lazy Hollow Dr.,Suite 139
Houston, Texas 77063
41
February 20, 1986
41
41 To The Board of Directors of
Harris County Water Control and Improvement District No. 108
I have examined the combined balance sheets - all fund types and
account groups of Harris County Water Control and Improvement District
No. 108 (annexed by the City of Friendswood, Texas) asiof December 31,
1985, and the related statement of combined revenues, expenditures and
changes in fund balances - all governmental fund types, for the nine
month period then ended. My 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
I considered necessary in the circumstances.
In my opinion, the statements referred to above present fairly the
financial position of Harris County Water Control and Improvement
District No. 108 (annexed by the City of Friendswood, Texas) at December
31, 1985, and the results of its operations for the nine month period
Alek then ended, in conformity with generally accepted accounting principles,
applied on a basis consistent with that of the preceding year.
. G�ti C_sc-cam_
41
41
•
0
sR
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTF
(Annexed by the City of Friendswood, Tex
COMBINED BALANCE SHEETS - ALL FUND TYPES AND ACCC
December 31, 1985
Governments
General Fund _
ASSETS
Cash $ 53,348 ;
Time deposits 123,227
Receivables -
'� Accounts 42,834
Taxes
Accrued interest 256
Prepaid expenses 5,128
Land
Water system
1111 Sewage system
Drainage system
Engineering costs
Office building
Furniture and fixtures
Ak, Amount available in Debt Service Fund
Amount to be provided for retirement
of long-term debt
•
Total assets $224,793
LIABILITIES AND FUND EQUITY
Liabilities -
Accounts payable $ 22,594
Refundable deposits 18,781
Undistributed refunds of purchased
sewer services 16,211
Deferred revenue - property taxes
General obligation bonds payable
Total liabilities 57,586
Fund Equity -
% Investment in general fixed assets
Fund balances:
Reserve account- Series 1971 Bonds
Designated for debt service
Undesignated 167,207
111 Total fund equity 167,207
Total liabilities and fund equity $224,793
- 2 -
A
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - GOVERNMENTAL FUND TYPES
For The Nine Month Period Ended December 31, 1985
4
Governmental Fund. Types
40
Debt Capital Totals
Service Projects (Memorandum
General Fund Fund Fund Only)
Revenues -
Water and sewer services $268,759 $268,759
` Tax revenues $279,575 279,575
Penalties and interest 18,491 17,745 $ 88 36, 324
Miscellaneous revenues 1,423 1,423
Total revenues 288,673 297,320 88 586, 081
• Expenditures -
Current:
Purchased sewer services 120,123 120,123
Contracted services 40,045 7,726 47,771
Professional fees 21,358 21,358
Utilities 23,562 23,562
Repairs and maintenance 105,227 105,227
Other operating expenses 25,761 25,761
Property assessment expense 1,343 1,343
Miscellaneous expenses 1,038 1,038
Capital outlay 6,961 6,961
Debt service:
lek
Principal payments 15,000 15,000
Interest paid 89,786 89,786
Total expenditures 343,037 114,893 - 457,930
Excess of revenues over (under)
40 expenditures (54,364) 182,427 88 128,151
Other financing sources (uses) -
Operating transfers in 8,671 8,671
Operating transfers out (8,671) (8,671)
Excess of revenues and other
sources over (under) expenditures
and other uses (45,693) 182,427 (8,583) 128,151
•
Fund balances, at the beginning of
the period 212,900 218,416 8,583 439,899
40
Fund balances, at the end of the
period $167,207 $400,843 - $568,050
See notes to financial statements
40 - 3 -
40
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
40 IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND
For The Nine Month Period Ended December 31, 1985
40
General Fund
Variance -
Favorable
Budget Actual (Unfavorable)
40 Revenues -
. Water and sewer services $217,840 $268,759 $ 50,919
Penalties and interest 17,389 18,491 1,102
Miscellaneous revenues 1,053 1,423 370
Total revenues 236,282 288,673 52,391
A
Expenditures -
Current:
Purchased sewer services 94,987 120,123 (25,136)
Contracted services 33,727 40,045 (6,318)
Professional fees 15,234 21,358 (6,124)
Utilities 20,877 23,562 (2,685)
Repairs and maintenance 59,000 105,227 (46,227)
Other operating expenses 25,540 25,761 (221)
Capital outlay - 6,961 (6,961)
Total expenditures 249,365 343,037 (93,672)
Deficiency of revenues over
expenditures (13,083) (54,364) (41,281)
Other financing sources -
Operating transfers in - 8,671 8,671
40
Deficiency of revenues over
expenditures and other sources (13,083) (45,693) (32,610)
Fund balances, at beginning of
the period 212,900 212,900 -
0
Fund balance, at end of the
period $199,817 $167,207 $(32,610)
See notes to financial statements
- 4 -
040
40
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
NOTES TO FINANCIAL STATEMENTS
# December 31, 1985
Note 1: Creation of the District and annexation -
Harris County Water Control and Improvement District No. 108 was created
by an order of the Texas Water Rights Commission on October 22, 1968. The Board
A of Directors held its first meeting on November 7, 1968 and the first bonds were
sold on August 31, 1970. In December 1985, the District was annexed by the City
of Friendswood, Texas. The City assumed operating the water and sewer system of
the District on January 1, 1986 and the District will cease to exist on March
16, 1986.
,A Note 2: Significant accounting policies -
. The Texas Water Rights Commission (Texas Department of Water Resources)
adopted a "Water District Accounting Manual" in 1974 and the use of the Manual by
all water districts was required by the Commission beginning January 1, 1975; the
District's accounts are generally maintained in accordance with the Manual. The
modified accrual basis of accounting is followed by the District and all financial
# statements were prepared on this basis. The basic financial statements of the
District conform to the requirements of Statement 1 of the National Council on
Governmental Accounting and with the directives of the Texas Department of Water
Resources.
The transactions of the District are accounted for in fund types and account
'�► groups as follows.
Governmental Fund Types:
General Fund -
To account for all revenues and expenditures not required to be accounted for
in other funds.
IIIlk
Debt Service Fund -
To account for the accumulation of financial resources for, and the payment
of, general long-term debt principal and interest, paid principally from
property taxes levied by the District.
Capital Projects Fund -
40 To account for financial resources designated to construct or acquire capital
facilities and improvements. Such resources are derived principally from
bond proceeds.
Account Groups:
General Fixed Assets -
To account for the facilities of the District.
General Long-Term Debt -
To account for the outstanding principal balance of general long-term debt
obligations.
Memorandum Totals:
40
The memorandum totals represent the aggregate of all governmental fund types
and account groups included in the statements. No eliminations have been made,
and these totals do not present consolidated financial information.
41 - 5 -
41 NOTES TO FINANCIAL STATEMENTS - (Continued)
Note 2: Significant accounting policies - (Continued)
Fund Balances:
Reserved -
'* To indicate fund equity which is legally segregated for specific future use.
Designated -
To indicate fund equity for which the District has made tentative plans.
Undesignated -
To indicate fund equity which is available for use in future periods.
41
General Fixed Assets:
All of the fixed assets of, the district are included in the general fixed
assets group of accounts and are stated at cost. The District has the policy of
expensing currently any repairs or maintenance which do not extend the life of the
assets or increase the assets value. Depreciation is not provided in accordance
* with accepted practice for non-enterprise funds.
Property taxes:
Property taxes are reported as revenue in the fiscal year in which they become
available to finance expenditures; tax accounts receivable but not available are
recorded as deferred revenue.
40
Note 3: Bonds payable -
Amount outstanding December 31, 1985 $2,440,000
Interest rates 5.65% to 8.5%
Interest payment dates April 1/October 1
Maturity dates, serially beginning/ending April 1, 1986/
October 1, 2001
The debt service requirements as of December 31, 1985, for the next five fiscal
years and in the aggregate on the bonds outstanding are as follows.
444,
Year Principal Interest Total
1987 $ 90,000 $ 175,620 $ 265,620
1988 100,000 168,730 268,730
1989 105,000 161,327 266,327
40 1990 115,000 153,305 268,305
1991 120,000 144,675 264,675
Thereafter 1,910,000 783,620 2,693,620
Totals $2,440,000 $1,587,277 $4,027,277
4
Note 4: Debt service requirements -
All of the District's 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
A on and pledge of the net revenues to be received from the operation of the District's
waterworks and sanitary sewer system after deduction of reasonable costs of adminis-
tration, efficient operation, and adequate maintenance of the District's service
facilities in the manner provided by Chapter 217, Acts of the Regular Session of the
52nd Legislature of Texas, 1951.
40 - 6 -
41 NOTES TO FINANCIAL STATEMENTS - (Continued)
Note 4: Debt service requirements - (Continued)
Series 1970A - 1971A - 1972 - 1981 Bonds:
The Bond Orders for the above named series of bonds require that while said
41 bonds or any part of the principal and interest thereof are outstanding and unpaid,
there shall be levied an ad valorem tax upon all taxable property within the District
sufficient in amount to pay the interest on such bonds, together with an additional
amount to be placed in the sinking fund sufficient to redeem such bonds at their
maturity. At such time as the net revenues from operation of the system, pledged to
the payment of these bonds, together with money derived from taxes may have accumu-
41 lated a surplus in the sinking fund equal to the sum to be required in the succeed-
ing year to pay the interest and principal of the District's obligations maturing in
that year, the District's annual tax levies may be lowered to produce not less than
25% of the bond maturities for each succeeding year. Whenever the actual experience
of three consecutive years demonstrates that the net revenues are adequate to protect
the maturities of the District's obligations, the District's tax may be wholly abated
41 until further experience demonstrates the necessity to again levy taxes to avoid de-
fault in payments of the District's obligations as they may mature.
Series 1971 Bonds:
The Bond Orders for the Series 1971 Bonds require the establishment of a Reserve
Account by setting out from the net revenues of the system and paying into the Bond
41 Fund (i.e. Debt Service Fund) a sum equal to 20% of the total monthly principal and
interest requirements for the next succeeding maturity of principal and interest
until said fund shall consist of a sum equal to the total principal and interest re-
quirements for the next succeeding year; current interest and principal requirements
are to be deposited in equal monthly installments. At December 31, 1985 the Reserve
Account contained the amounts required by the Bond Orders.
-001
Note 5: Redemption of Bonds -
The outstanding bonds of the District 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 purposes of retirement or refunding, or
both, at par plus accrued interest. Bonds of the Series 1970A and 1971 may be called
on any interest payment date and bonds of the Series 1971A, 1972 and 1981 may be called
on April 1, 1986, April 1, 1987 and April 1, 1995, respectively, or any interest
payment date thereafter.
Note 6: Contract with the City of Friendswood, Texas and undistributed refunds of
41 purchased sewer services -
In 1980, the District entered into a contract with the City of Friendswood,
Texas, whereby the District would pay to the City 85% of its sewer service revenues
for waste disposal. The contract stipulates that the sewer service charge to the
district's customers is to be made on the same basis used by the City to charge its
# customers. Accordingly, the District charged its customers based on the actual
water usage each month, as did the City, and remitted 85% of the revenue from those
charges. The District learned that in 1980 the City changed the basis used to charge
its customers and the District has determined that their customers have been charged
for sewer services in excess of those charged by the City and as a result have.over-
paid the City for sewer services. The District changed its basis for sewer service
40 charges beginning with April 1, 1984 to conform to the basis. used by the City and
filed a claim for refund of overpayments aggregating $46,200 These refunds are
passed on to the District's residential customers on this basis of $3.00 per customer
per month. At December 31, 1985, all of the refunds claimed from the City have been
collected and $29,989 had been distributed to customers; undistributed refunds of
$16,211 have been included in current liabilities.
41
- 7 -
,+ NOTES TO FINANCIAL STATEMENTS - (Continued)
Note 7: Water and sewer rates and customers -
The following monthly water and sewer service rates are currently in effect.
Water Service
40
Residential and commercial:
First 5,000 gallons of water used (minimum bill)* $8.75
Each 1,000 gallons of water used thereafter $1.75 / *
*Master metered townhouses and apartment projects
40 charges are based on the first 5,000 gallons of
water used times the number of units.
Sewer Service
Residential and commercial:
* First 3,000 gallons of water used (minimum bill) $7.00
Each 1,000 gallons of water used thereafter $ .90
*Master metered townhouses and apartment projects are
charged $8.00 for each unit.
Sewer service usage is determined by averaging the actual
41 water usage of the four lowest winter months within the
October to February period. The usage factor so determined
is used throughout the succeeding year beginning March 1.
Five Year Summary of Customers
40 December 31, March 31,
1985 1985 1984 1983 1982
1,052 1,078 1,097 1,146 1,158
41
41
41
41
41 - 8 -
0
VAN SAHAKIAN
Certified Public Accountant 2400 Lazy Hollow Dr.,Suite 139
Houston,Texas 77063
40
February 20, 1986
40
40
The Board of Directors
Harris County Water Control and
Improvement District No. 108
Friendswood, Texas 77546
41
In my opinion, the accompanying information is stated fairly in all
material respects in relation to the combined financial statements taken
as a whole, of Harris County Water Control and Improvement District No.
108 (annexed by the City of Friendswood, Texas) for the nine month period
ended December 31, 1985, which are covered by my opinion presented in the
40 first section of this report. The accompanying information is supple-
mental to the combined financial statements and is not essential for a
fair presentation of the financial position and the results of its opera-
tions. My examination was made primarily for the purpose of forming an
opinion on the combined financial statements taken as a whole, and included
such tests of the accounting records from which the supplementary informa-
l!) tion was compiled, and such other auditing procedures as I considered
necessary in the circumstances.
41
•
./77
411
'# Schedule E
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
41 ANALYSIS OF CHANGES IN CASH AND TEMPORARY INVESTMENTS
For The Nine Month Period Ended December 31, 1985
Debt Capital Totals
General Service Projects (Memorandum
Fund Fund Fund Only)
Sources of cash and temporary
investments -
40 Cash receipts from revenues $275,564 244,913 $ 140 $520,617
Cash transfers from other funds 8,671 8,671
• Refundable deposits 3,982 3,982
Undistributed refunds of
purchased sewer services 14,468 14,468
4k Total cash and temporary
investments provided 302,685 244,913 140 547,738
Applications of cash and
temporary investments -
II Cash disbursed for:
Current expenditures 341,766 11,883 353,649
Capital outlay 6,961 6,961
Debt service 104,786 104,786
Cash transfers to other funds 8,671 8,671
41
Total cash and temporary
investments applied 348,727 116,669 8,671 474,067
Increase/(decrease) in cash
and temporary investments (46,042) 128,244 (8,531) 73,671
41 Cash and temporary investment
balances -
At the beginning of the period 222,617 218,897 8,531 450,045
At the end of the period $176,575 $347,141 - $523,716
40
41
* Schedule F
HARRIS COUNTY WATER CONTROL AND IM
(Annexed by the City of F
GENERAL LONG-TERM DEBT SERVICE REQ
December
4,
Series 1970A Series 1981
41 Interest Interest
Principal Due Principlcipal Due Total
Fiscal Due April 1 DUe Due April 1, Annual
Years October 1 October 1 Total April ril 1 October 1 Total Requirements
1987 $ 15,000 $21, 170 $ 36, 170 $ 15,00 5,000 $ 9,962 $ 14,962 $ 265,620
1988. 15,000 19,970 34,970 20,0010,000 9,542 19,542 268,730
40
1989 15,000 18,770 33,770 20,0010,000 8,982 18:982 266,327
1990 15,000 17,570 32,570 25,0010,000 8,422 18,422 268,305
1991 15,000 16-,370 31,370 25,0010,000 7,862 17,862 264,675
1992 15,000 15,110 30,110 30,0010,000 7,302 17,302 265,437
1993 15,000 13,850 28,850 30,M5,000 6,602 21,602 265,490
1994 20,000 12,590 32,590 35,00_5,000 5,762 20,762 269,752
41
1995 20,000 10,910 30,910 35,00 5,000 4,922 19,922 267,769
1996 20,000 9,230 29,230 40,005,000 4,082 19,082 265,037
1997. 20,000 7,550 27,550 40,00!0,000 3,102 23, 102 276,077
1998 20,000 5,870 25,870 45,00,0,000 1,977 21,977 275,716
1999 20,000 4,190 24,190 45,00".5,000 706 25,706 283,902
2000 20,000 2,510 22,510 50,00t _ - - 265,985
2001 20,000 830 20,830 55,001 _ _ - 258,455
Totals $265,000 $176,490 $441,490 $510,0010,000 $79,225 $259, 225 $4,027,277
w
Cash and temporary investment balances at Decei
Debt Service Fund $347, 141
40 Note: Interest and principal requirements for t
year, which would have ended March 31, 1�
a
41
40
Schedule G
41
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
ANALYSIS IN CHANGES IN GENERAL LONG-TERM DEBT
11
For The Nine Month Period Ended December 31, 1985
40
Series
1970A 1971 1971A 1972 1981 Totals
41
Interest rate 8.00% to 7.75% 6.00% to 8.5% 5.60% to
8.5% 7.75% 5.65%
Dates interest payable 4/1-10/1 4/1-10/1 4/1-10/1 4/1-10/1 4/1-10/1
Bonds outstanding at
* beginning of the period $280,000 $510,000 $1,035,000 $450,000 $180,000 $2,455,000
Retirements of principal 15,000 - - - - 15,000
Bonds outstanding at
end of the period $265,000 $510,000 $1,035,000 $450,000 $180,000 $2,440,000
41
Retirements of interest $11,222 $19,762 $38,563 $15,188 $5,051 $89,786
41 Paying agents -
Series 1970A,
1971 and 1972 Allied Bank of Texas, Houston, Texas and
First National Bank, Denver, Colorado
Series 1971A
and 1981 Allied Bank of Texas, Houston, Texas
41
Bonds voted: $3,000,000 - Bonds approved: $3,000,000 - Bonds sold: $3,000,000
41
41
41
Schedule H
41
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
41 SCHEDULE OF TEMPORARY INVESTMENTS
December 31, 1985
4
Maturity Face Accrued
Interest Date Amount Interest
General Fund -
40
Time deposit no. 100936 7.8% 1/24/86 $100,000 $ 256
Money-market account
no. 08-000637-9 8.25% - 23,227 -
Total General Fund 123,227 256
41
Debt Service Fund -
Time deposit no. 11527 7.8% 4/1/86 106,590 1,082
Money-market account
40 no. 53-4018545 8.0% - 90,835 -
Total Debt Service
Fund 197,425 1,082
Total all funds $320,652 $1,338
4
40
41
Schedule I
40
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
ANALYSIS OF TAXES RECEIVABLE
For The Nine Month Period Ended December 31, 1985
40
Taxes receivable at the beginning of the period $ 35,224
1984 Original tax roll 274,618
40
Supplemental roll (net) 2,676
Total to be accounted for 312,518
Tax collections -
II Current period 203,137
. Prior years 21,683
224,820
Taxes receivable at the end of the period $ 87,698
40
Taxes receivable by years -
1980 and prior $ 2,569
1981 1,750
1982 2,118
40 1983 2,740
1984 7,039
1985 71,482
$ 87,698
40
Assessed Valuations Summary (000 omitted)
Land Improvements Property Total Valuation Tax Roll
1985 $17,029 $60,965 $1,377 $79,371 34.6 $277.3
40 1984 16,178 56,412 1,236 73,826 37.4 277.2
1983 4,322 26,746 1,127 32,195 84.0 270.4
1982 4,322 26,636 923 31,881 84.0fi 267.2
1981 4,299 26,621 871 31,791 82.0 260.2
Tax collection year - From October 1, 1985 to September 30, 1986
41
Percent of assessed valuation to fair market value 100.0%
Percent of current taxes collected to current tax levied 73.3%
Percent of current and delinquent taxes collected to current and
delinquent taxes outstanding at the beginning of the period 71.9%
41
Schedule J
4
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
* (Annexed by the City of Friendswood, Texas)
ANALYSIS OF CHANGES IN DISTRICT ORGANIZATIONAL COSTS
For The Nine Month Period Ended December 31, 1985
4
Balances
March 31, 1985 and
December 31, 1985
Costs during organization and construction -
I Legal fees $109,125
. Bond interest 169,468
Amortized bond discount 3,705
Fiscal agent fees 44,000
Bond issue expenses 4,527
Interest on temporary investments (60,013)
40
Total $270,812
41
Amounts provided by -
Capital Projects Fund $157,652
Debt Service Fund 113,160
41 Total $270,812
4
41
41
4
Schedule K
4
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
ANALYSIS OF CHANGES IN GENERAL FIXED ASSETS
41 For The Nine Month Period Ended December 31, 1985
Balances Balances
March 31, December 31,
41 1985 Additions Deductions 1985
Land $ 1,675 $ 1,675
Water system 716,827 716,827
Sewage system 734,252 $104,912 839,164
Drainage system 562,735 562,735
Engineering fees 174,159 174,159
41 Office building 107,949 107,949
Furniture and fixtures 7,346 7,346
Construction in progress -
Lift station rehabilitation 97,951 6,961 $104,912 -
Totals $2,402,894 $111,873 $104,912 $2,409,855
41
Amounts provided by -
II Capital Projects Fund $2,151,805 $2,151,805
General Fund 251,089 $6,961 258,050
Totals $2,402,894 $6,691 - $2,409,855
41
41
41
•
40
40
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT
40 (Annexed by the City of Friendswoo,
COMPARATIVE SCHEDULE - REVENUES AND EXl
By Fiscal Years, For The Four Years Ended Mai
For The Nine Month Period Ended December
Revenues
4, March 31 1985
December 31 1985
General Fund Revenues -
Water and sewer services $268,759 $294,489 ;
Penalties and interest 18,491 30,466
A Tap connection fees - 1,193,
Miscellaneous 1,423 2,340
288,673 328,488
General Fund Expenditures -
Purchased sewer services 120,123 131,502
40 Contracted services 40,045 38,698
Professional fees 21,358 20,352
Utilities 23,562 27,997
Repairs and maintenance 105,227 71,624
Recurring operating expenses 25,761 31,372
Capital outlays 6,96140
-
343,037 321,545
General Fund Revenues Over (Under)
Expenditures $(54,364) $ 6,943 $
# Debt Service Fund Revenues -
Tax revenues $279,575 $268,601 $
Penalties and interest 17,745 24,497
297,320 293,098
40 Debt Service Fund Expenditures -
Contracted services 7,726 8,052
Property assessment fees 1,343 3,013
Miscellaneous expenses 1,038 1,541
Debt service:
Interest 89,786 184,865
40 Principal 15,000 80,000
114,893 277,471
Debt Service Fund Revenues
Over Expenditures $182,427 $ 15,627 $
40 Average annual bond principal
and interest $268,485 $258,354 $
Coverage: Net General Fund Revenues
plus net tax revenues ,87 1.02
Average annual unpaid bond
principal and interest
40
Number of customers 1,052 1,078
*Total water pumped into the system 112.1 141.5
*Total water billed to customers 100.6 125.2
(*in millions of gallons)
40
Schedule N
S
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
INSURANCE COVERAGE
41
December 31, 1985
41
From Amount of Co-
Type of Coverage To Coverage Insurer Insurance
All Risks 11/22/85 $700,000 American Manufacturers 100%
11/22/86 Blanket Mutual Insurance Co.
4 Coverage
($1,000
Deductible)
General Liability/Auto: 11/22/85 The St. Paul Insurance None
Bodily injury 11/22/86 $500,000 Company
Property damage $100,000
'# (Includes non-owned
automobiles)
Excess General Liability/ 11/22/85 $1,000,000 The St. Paul Insurance None
Auto Company
41 Flood Insurance: 9/24/85 $271,000 Omaha Indemnity Company None
Comfort station and 9/24/86
contents, control
house and contents,
office building 5/15/85
and contents 5/15/86
41 Faithful Performance 2/15/85 $25,000 The St. Paul Insurance None
Schedule Bond (5 2/15/88 Company
Directors)
Boiler and Machinery 11/22/85 $500,000 + Amercian Manufacturers None
11/22/86 $50,000extra Mutual Insurance Co.
40 expense-$500
deductible
Tax Assessor/Collector 1/1/85 $25,000 The St. Paul Insurance None
Bond until Company
cancelled
41
•
41
40
41 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 Schedule 0
(Annexed by the City of Friendswood, Texas)
BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS
December 31, 1985
Mailing address: 4300 Laura Leigh Lane, Friendswood, Texas 77546
Business telephone number: Tebco Services, Inc. , Operator - 713/955-0555
41
Board Members
Term Fees and Expense
Expires Reimbursements Title
Margaret K. George 4/1/88 $6,624 President
,+ 3960 Laura Leigh Lane (Note 2)
Friendswood, TX 77546
Mary B. Jones 4/1/86 $1,447 Vice
P.O. Box 194 President
Friendswood, TX 77546
40 Gina Runnels 4/1/86 $2,167 Secretary
16731 David Glen
Friendswood, TX 77546
Harvey Hilimon, Jr. 4/1/86 $1,100 Member
17150 Barcelona Drive
Friendswood, TX 77546
41
Jack A. Roberts 4/1/86 $450 Member
16919 Oxnard
Friendswood, TX 77546
Note 1: All directors were residents of the District and no director has any
business or family relationships (as defined by the Texas Water Code)
41 with major landowners in the District, with the District's developer or
with any of the District's consultants.
Date Hired Fees Paid Title
Key Administrative Personnel:
Note 2: Assigned the responsibility of administering the day-to-day business of the
41 District at a monthly compensation of $600.
Consultants:
Smith, Murdagh, Little & Crawford 1/19/70 $ 3,223 Legal counsel
1200 Travis Street
Houston, TX 77002
41
Alta Carbone 4/19/70 $ 9,000 Tax collector
P.O. Box 343
Pearland, TX 77581
Harris County Appraisal District 1/1/84 $ 1,343 Central Appraisal
40 District 6, 4624 Fairmont Parkway District
Houston, TX 77504
Eco-Resources, Inc. 5/20/76 to $23,028 Operator of the
P.O. Box 487 9/6/85 System
Alief, TX 77411
* Tebco Services, Inc. 9/7/85 $20,080 Operator of the
P.O. Box 691208 System
Houston, TX 77269-1208
Julien Reeves, Inc . 9/7/85 $ 2,325 Bookkeeping
1506 Whispering Pines services
Houston, TX 77055
41
40
A
41
41
OTHER SUPPLEMENTAL INFORMATION
(Not Subjected To Audit Procedures)
41
41
0
41
41
0
Schedule P
41 Page 1
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108
(Annexed by the City of Friendswood, Texas)
QUESTIONNAIRE TO BE COMPLETED BY THE AUDITORS
41 December 31, 1985
1. On the following chart, provide the appropriate check marks for each listed
accounting record. If entries are made less often than monthly, write in
the frequency.
41 Information for the table below provided by: Julien Reeves, District Book-
keeper.
RECORD USED? HOW KEPT? WHEN UPDATED?
By By How
No Yes Hand Computer Daily Weekly Monthly . Often?
* Description of account x
Chart of Accounts x x As required
General Journal x x x
Cash Receipts Journal x x x
41
Check Register x x x
General Ledger x x x
Customer Subsidiary ledger x x x
Fixed assets ledger x
41
Bank reconciliation x x x
Trial balance x x x
YES NO
41
2. Does the district use double entry accounting? x
3. What is the usual location of accounting records?
Julien Reeves, Inc.
1506 Whispering Pines
* Houston, TX 77055
4. Did you identify, during the course of your examination of the financial
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? x
41 If "Yes" is checked for Question 4, have these topics been discussed
in a Management Letter to the water district's Board of Directors.
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? x
# 6. Did the water district:
a. Use the capital projects fund and debt service fund only for the
purposes authorized by the Board of Directors of the water district
and/or within the provisions of applicable bond resolution. x
41
QUESTIONNAIRE TO BE COMPLETED BY THE AUDITORS _ (Continued) Schedule P
Page 2
6. Did the water district: - (Continued) YES NO
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? N/A
c. Do business only with firms or corporations in which members of the
Board of Directors had no pecuniary interest? x
d. Observe the conditions for obtaining grants, gifts, etc. , or observe
agreements with governmental agencies for the purpose of securing
41 funds or services? x
e. Have a contract for Social Security coverage for its employees with
the Texas Employees Retirement System? N/A
f. Make remittances of Social Security taxes according to the terms of
the contract for Social Security coverage with Social Security
41 Division of the Texas Employees Retirement System? N/A
• g. Deposit receipts to the proper funds kept by the approved deposit-
ory bank? x
h. Draw checks only on funds approved by the Board of Directors and
signed by authorized personnel? x
• 7. Did you issue a management letter to administrative officials of the
water district which sets forth your comments, based on matters which
came to you attention during your examination, for strengthening
internal accounting controls and improving administrative efficiency
and procedures? x
41 a. Were your recommendations explained to and discussed with adminis-
trative officials of the water district? N/A
b. The date of your most recent management letter was May 8, 1985.
c. Is there evidence indicating that previous year(s) recommenda-
tions have been or are being implemented? x
• Note: The Water District was annexed by the City of Friendswood,
Texas in December 1985. Reviews of internal controls and account-
ing procedures were made in connection with testing and examin-
ing accounting records; a management letter was not prepared.
d. Has a copy of the Management Letter been filed with the Texas
• Department of Water Resources? N/A
8. The Texas Water Code makes specific provisions relating to the security
provided by depository banks. After consideration of the applicable
laws pertaining to the specific water district, did the depository
bank provide adequate security of the correct type?
• Please indicate for each depository:
See page 3
9. The water district's taxes were collected by: (check one)
a. An employee of the district
• b. The county tax assessor/collector
c. A city or other tax assessor/collector x
d. More than one of the above
41
41 41 41 41 41 41 41 41 I 4 a
c
to
to
'.3
H
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 z
(Annexed by the City of Friendswood, Texas)
SCHEDULE RELATING TO QUESTION 8
December 31, 1985 t=1
'3
O
try
n
O
Community Texas Allied b
a. Name of depository bank National Commerce - Interfirst Interfirst Village Mainland Allied Mission
Friendswood Friendswood Post Oak Fannin Savings Savings Jetero Bend1-3
w
b. Amount of FDIC or FSLIC '<
coverage $100,000 $100,000 $100,000 $100,000 $100,000 $100, 000 $100,000 $100,000 x
tin
c. Amount of bond or other >
security pledged at the o
end of the period $100,000 - $200,000 - - - - $125,000
0
d. Largest cash balance $57,818 $43,520 $159,525 $75,073 $96,139 $90,835 $45,414 $210,462
e. Date of largest cash balance 11/25/85 8/27/85 4/24/85 12/13/85 9/30/85 12/10/85 11/20/85 9/25/85
n
f. Amount of bond or security
pledged at the time of the
rt
largest cash balance (ex-
cluding FDIC or FSLIC G
$125,000
coverage) $100,000 - $200,000 - - - -
m
a a
w 0'
m m
w0
ro
QUESTIONNAIRE TO BE COMPLETED BY THE AUDITORS - (Continued) Schedule P
Page 4
41
YES NO
10. Was the tax assessor-collector bonded as required by law? x
11. What was:
40
a. The tax assessor-collector bonded for? $25,000
b. The greatest amount of the district's taxes in the tax assessor-
collector's possession at any one time? $57,818
c. The frequency of tax receipts deposits with the bonded depository?
40 (Check one)
(1) Daily ) Deposits are made daily during the high period
(2) Weekly of collections; deposits are made less frequently
(3) Monthly ) thereafter.
41 d. The percent of the assessed valuation to fair market value? 100%
12. We: (Check one)
a. Actually examined the records of the tax assessor-collector x
b. Received written confirmation for the tax data from the tax
assessor-collector
41
c. Accepted tax data furnished by the district's administrative
offices..
13. As a result, were local tax revenues (including delinquent taxes and
interest and penalties on taxes) properly separated for debt service? x
40 14. Was the water district in compliance with applicable bond resolutions,
with the general or special legislation under which the district was
created and with the specific statutes excerpted and included in the
Legal Compliance Guidelines in Section 70-03-1 of the Water District
Accounting Manual? x
15. Other comments of the Auditor:
40
None
41
41
41
40
Schedule Q
41
CERTIFICATE OF THE BOARD OF DIRECTORS
HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISCTRICT NO. 108
41 (Annexed by the City of Friendswood, Texas)
We, the undersigned, do hereby certify that the audit report of the above-
named Water District for the nine month period ended December 31, 1985, was
41 received by the Board of Directors on the // �`Q day of i j 1L ,
'1986 and was reviewed and ,approved; disapproved at a meetingf�f of the
Board of Directors of the Water District on the //C`o day of ;" 1 / , 1986.
40
G✓
Signs ure of oard Secretary Sigma ure of Bo7p1 Presi ent
41
40
41
41
40