02-08-17 Regular Meeting of the La Porte Area Water Authority

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r-� IV. CAPITAL ASSETS An analysis of changes in physical facilities for the year ended September 30, 2016 follows: Capital assets being depreciated: Water production and distribution system Less accumulated depreciation: Water production and distribution system Total capital assets being depreciated, net Investment in capital assets from: Contribution by participants Beginning Ending Balance Additions Deletions Balance $ 15,435,810 $ 41,241 $ - $ 15,477,051 [ 9,555 983) ( 465-687) ( 10,021,670) $ 5,879.827 $(. 424,446) $ - $ 5,455,381 $ 5,879,927 $( 424,446) $ - $ 5,455,381 * Depreciation expense of $465,687 charged to water services function/program. V. 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 (Southeast 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 revenues 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. 15