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r; LA PORTE AREA WATER AUTHORITY INTER-OFFICE MEMORANDUM T0: Robert T. Herrera, General Manager Board of Directors Steve Gillett, Director of Public Works FROM: ,~ eff Litchfield, Director of Finance DATE: (/'" November 29, 1993 SUBJECT: Fiscal Year 1993 Results of Operations Attached is an unaudited draft of the financial statements for the Authority for the period ended September 30, 1993. The audited statements should be ready for the December 7, 1993 meeting. All number references in this letter relate to the unaudited statements and will need to be adjusted for any changes recommended by the Authority's auditors. The La Porte Area Water Authority (Authority) ended the year with working capital of $1,849,529. They also had physical facilities with a net value of $9,118,324, contributed capital of $839,249 and retained earnings of $738,604. The activity during the year consisted of water billings to participants of $642,729, billings for debt service of $824,998 and $126,883 in interest income. The billings for debt service were first applied to offset the requirements of debt service in the amount of $650,111 and the remaining $174,887, which represents billings for the reserve and contingency funds, was applied as contributions from participants. Expenses incurred by the Authority can be broken down as follows: • $ 15 in supplies • 534,856 in payments to Houston for water received • 12,669 in telephone expense • 3,000 in Audit Costs • 40,000 in payments to the City of La Porte for management functions • 300 in insurance • 2,110 in other services and charges Depreciation expense of $295,395 was charged to contributed capital. This was done because all of the assets were purchased with borrowed funds that were backed by the three participants. If the Authority ever purchases assets out of operating funds, we will charge a certain portion of the depreciation to retained earnings. During the year, the Authority made principal retirement payments in the amount of $160,000 which leaves $9,560,000 outstanding.