02-12-14 Regular Meeting of the La Porte Area Water Authority

Browse Search

Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT C-1 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 7 - Contract Revenue Bonds Payable, Debt Service Requirements and Bond Resolution Requirements (continued) As of September 30, 2013, the debt service requirements on contract revenue bonds outstanding for the next five fiscal years are as follows: Due During Fiscal YearAnnual Requirement for All Bond Series EndingTotalTotalTotal 9/30PrincipalInterestRequirements 2014630,000 58,650 688,650$ 2015650,000 41,838 691,838 2016670,000 22,850 692,850 2017320,000 6,400 326,400 $ 129,7382,270,000$ 2,399,738$ Note 8 - Fund Net Position The Authority provides surface water to the City of La Porte, Texas (the “City”) and the Cities of Shoreacres and Morgan's Point in order for these entities to comply with certain requirements imposed by the Harris County Subsidence District. The City retains the rights to approximately 86% of the water capacity of the Authority with the Cities of Shoreacres and Morgan's Point retaining the rights to the remaining 14%. The City, Shoreacres and Morgan’s Point have agreed to service the debt on the Authority's contract revenue bonds and to fund operations of the Authority in relation to their capacity rights and to purchase water based on actual consumption. As part of the debt service requirements, the participants are billed to build a reserve for future debt service requirements as set forth in the contract revenue bonds of the Authority. During the year, the Authority's billings were applied as follows: Water Supplied and Operating costs( User fees)1,213,334$ Debt Service Billings/ Charges697,727 Capital recovery billings96,127 Total Billings $ 2,007,188 Note 9 - Risk Management The Authority is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the Authority participates (through an endorsement on the City of La Porte’s contract) along with other entities in the Texas Municipal League’s Intergovernmental Risk Pool. The pool purchases commercial insurance at group rates for participants in the pool. Neither the Authority nor the City has additional risk or responsibility to the pool, outside of payment of insurance premiums. Neither the Authority nor the City had significantly reduced insurance coverage or had settlements that exceeded coverage amounts for the past three fiscal years. 18