08-22-07 La Porte Area Water Authority minutes

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5. CAPITAL ASSETS An analysis of changes in physical facilities for the year ended September 30,2007, follows: Retirements Beginning and Ending Balance Additions Adjustments Balance Water, sewer and drainage facilities Capital assets, being depreciated Water production and distribution system $ 14,725,570 $ $ $ 14,725,570 Less accumulated depreciation for: Water production and distribution system 5,420,933) ( 441,913) 5,862,846) Total capital assets, being depreciated net 9,304,637 ( 441,913) 8,862,724 Investment in capital assets from: Contributions by participations $ 9,304,637 $( 441,913) $ $ 8,862,724 Depreciation expense of $441 ,913 charged to water services function/program. 6. SOUTHEAST WATER PURIFICATION PLANT The Authority and the City of Houston, Texas have entered into a Cost Sharing Water Project Contract (the "Contract") wherein the Authority, the Cities of La Porte, Morgan's Point and Shoreacres agree to jointly finance the construction and operation of the Southeast Water Purification Plant). Under the terms of the contract, the Authority purchased 4.2 million gallons per day production and 5.25 million gallons per day pumping capacity. The Cities of La Porte, Morgan's Point and Shoreacres have agreed to demand and pumping allocations of the Authority's Purchase of water from the Southeast Plant. The required funds for the undivided interest in the Southeast Plant and the construction of a transmission and distribution system to transport water from the Southeast Plant were provided by issuance of$9.8 million revenue bonds. The water rate to be set by the Authority will not be less than an amount sufficient to provide for payment of all expenses in producing, treating and pumping the water in connection with transmission and distribution systems and to provide payment for the interest and principal of all bonds when the bonds become due and payable. mv ..l J!~ ATIVE r'" tx. 'n .f5J ELI t1I NARY