HomeMy WebLinkAbout03-11-19 Regular Meeting of the La Porte City CouncilLOUIS R. RIGBY
Mayor
JOHN ZEMANEK
Councilmember At Large A
STEV E G I L L ETT
Councilmember At Large B
DANNY EARP
Councilmember District 1
CITY COUNCIL MEETING AGENDA
CHUCK ENGELKEN
Councilmember District 2
BILL BENTLEY
Councilmember District 3
KRISTIN MARTIN
Councilmember District 4
JAY MARTIN
Councilmember District 5
NANCY OJ EDA
Mayor Pro -Tern
Councilmember District 6
Notice is hereby given of a Regular Meeting of the La Porte City Council to be held March 11, 2019,
beginning at 6:00 PM in the City Hall Council Chambers, 604 W. Fairmont Parkway, La Porte, Texas,
for the purpose of considering the following agenda items. All agenda items are subject to action.
1. CALL TO ORDER
2. INVOCATION — The invocation will be given by Councilmember Nancy Ojeda.
PLEDGES —Will be led by Councilmember Steve Gillett.
U.S. Flag
Texas Flag: Honor the Texas Flag. I pledge allegiance to thee, Texas, one state, under God, one, and
indivisible.
3. PUBLIC COMMENTS Limited to five minutes per person.
4. CONSENT AGENDA Approval of Consent Agenda items authorizes each to be implemented in accordance
wth staff recommendations provided. An item may be removed from the Consent Agenda and added to the
Statutory Agenda for full discussion upon request by a member of the Council present at this meeting.
(a) Approve the minutes of the City Council meeting held on February 25, 2019. [Lee Woodward,
City Secretary]
(b) Adopt Ordinance 2019-3735, for the purpose of vacating, abandoning, and closing a portion of
two separate alleys located in Block 715, Town of La Porte. [Ian Clowes, City Planner]
(c) Receive the 2018 Comprehensive Annual Financial (CAFR) Report. [Michael Dolby, Finance
Director]
(d) Award Bid #19009 for replacement of a Ground Storage Tank at Collegeview Water Plant.
[Don Pennell, Public Works Director]
(e) Authorize the La Porte Area Water Authority Manager to negotiate a contract between the La
Porte Area Water Authority and the City of Shoreacres for the design and construction of an
additional La Porte Area Water Authority waterline and metering station. [Don Pennell, Public
Works Director]
5. PRESENTATION, DISCUSSION AND POSSIBLE ACTION
(a) Discussion and possible action regarding appointment to the vacant position on the Chapter
172 Employee, Retiree Insurance & Benefits Board. [Lee Woodward, City Secretary]
(b) Discussion and possible action regarding update of the La Porte Parks, Recreation, and Open
Space Master Plan. [Roz Epting, Parks and Recreation Director]
(c) Discussion and possible action authorizing the City Manager to execute a two-year lease
agreement with the Fairmont Park West Homeowners Association for the use of Fairmont
West Park and swimming pool. [Jason Weeks, Assistant City Manager]
6. REPORTS
(a) Receive a report on the Fiscal Affairs Committee meeting. [Councilmember Engelken]
7. ADMINISTRATIVE REPORTS
• Planning and Zoning Commission Meeting, Thursday, March 21, 2019
• Council Budget Retreat, Saturday, March 23, 2019
• City Council Meeting, Monday, March 25, 2019
• Zoning Board of Adjustment Meeting, Thursday, March 28, 2019
8. COUNCIL COMMENTS Hear announcements concering matters appearing on the agenda; items
of community interest; and/or inquiries of staff regarding specfic factual information or exisiting policy
from the Mayor, Councilmembers, and City staff, for which no formal action will be discussed or taken.
9. EXECUTIVE SESSION
The City Council reserves the right to meet in closed session on any agenda item should the need
arise and if applicable pursuant to authorization by Title 5, Chapter 551, of the Texas Government
Code, in accordance with the authority contained in:
Texas Government Code - Section 551.072- Deliberation regarding purchase, exchange, lease or
value of Real Property: Meet with City Manager and City Attorney to discuss value of real property in
industrial districts, concerning negotiations with industry representatives for terms of new Industrial
District Agreements.
10. RECONVENE into regular session and consider action, if any, on item(s) discussed in executive
session.
11. ADJOURNMENT
If, during the course of the meeting and discussion of any items covered by this notice, City Council determines that a Closed or
Executive Session of the Council is required, then such closed meeting will be held as authorized by Texas Government Code,
Chapter 551, Section 551.071 - consultation with counsel on legal matters; Section 551.072 - deliberation regarding purchase,
exchange, lease or value of real property; Section 551.073 - deliberation regarding a prospective gift; Section 551.074 - personnel
matters regarding the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal of a public officer or
employee; Section 551.076 - implementation of security personnel or devices; Section 551.087 - deliberation regarding economic
development negotiation; Section 551.089 - deliberation regarding security devices or security audits, and/or other matters as
authorized under the Texas Government Code. If a Closed or Executive Session is held in accordance with the Texas
Government Code as set out above, the City Council will reconvene in Open Session in order to take action, if necessary, on the
items addressed during Executive Session.
In compliance with the Americans with Disabilities Act, the City of La Porte will provide for reasonable accommodations for
persons attending public meetings. To better serve attendees, requests should be received 24 hours prior to the meeting.
Please contact Lee Woodward, City Secretary, at 281-470-5019.
CERTIFICATE
I, Lee Woodward, City Secretary, do hereby certify that a copy of the IVbrch 11, 2019, City Council agenda was posted on the City F-bll bulletin
board, a place convenient and readily accessible to the general public at all tirres, and to the Oty's website, www.LaWrteTXgov, in corrpliance
with Chapter 551, Texas Governrrent Code.
DATE OF POSTING
TIME OF POSTING
TAKEN DOWN
Lee Woodward, City Secretary
Council Agenda Item
March 11, 2019
1. CALL TO ORDER
2. INVOCATION — The invocation will be given by Councilmember Nancy Ojeda.
PLEDGES —Will be led by Councilmember Steve Gillett.
U.S. Flag
Texas Flag: Honor the Texas Flag. I pledge allegiance to thee, Texas, one state, under God, one, and
indivisible.
3. PUBLIC COMMENTS Limited to five minutes per person.
******************************************************************
Council Agenda Item
March 11, 2019
4. CONSENT AGENDA Approval of Consent Agenda items authorizes each to be implemented in
accordance wth staff recommendations provided. An item may be removed from the Consent Agenda and
added to the Statutory Agenda for full discussion upon request by a member of the Council present at this
meeting.
(a) Approve the minutes of the City Council meeting held on February 25, 2019. [Lee Woodward,
City Secretary]
(b) Adopt Ordinance 2019-3735, for the purpose of vacating, abandoning, and closing a portion
of two separate alleys located in Block 715, Town of La Porte. [Ian Clowes, City Planner]
(c) Receive the 2018 Comprehensive Annual Financial (CAFR) Report. [Michael Dolby, Finance
Director]
(d) Award Bid #19009 for replacement of a Ground Storage Tank at Collegeview Water Plant.
[Don Pennell, Public Works Director]
(e) Authorize the La Porte Area Water Authority Manager to negotiate a contract between the La
Porte Area Water Authority and the City of Shoreacres for the design and construction of an
additional La Porte Area Water Authority waterline and metering station. [Don Pennell, Public
Works Director]
******************************************************************
LOUIS RIGBY
Mayor
JOHN ZEMANEK
Councilmember At Large A
STEVE GILLETT
Councilmember At Large B
DANNY EARP
Councilmember District 1
CHUCK ENGELKEN
Councilmember District 2
MINUTES OF THE REGULAR MEETING OF THE
CITY COUNCIL OF THE CITY OF LA PORTE
FEBRUARY 25, 2019
BILL BENTLEY
Councilmember District 3
KRISTIN MARTIN
Councilmember District 4
JAY MARTIN
Councilmember District 5
NANCY OJEDA
Councilmember District 6
Mayor Pro-Tem
The City Council of the City of La Porte met in a regular meeting on Monday, February 25, 2019, at the City Hall
Council Chambers, 604 West Fairmont Parkway, La Porte, Texas, at 6:00 p.m., with the following in attendance:
Councilmembers present: Louis Rigby, Steve Gillett, Danny Earp, Chuck Engelken, Bill Bentley, Kristin Martin, Jay
Martin, John Zemanek, Nancy Ojeda
Councilmembers absent: None
Council -appointed officers present: Corby Alexander, City Manager; Lee Woodward, City Secretary; Clark Askins,
Assistant City Attorney
1. CALL TO ORDER — Mayor Rigby called the meeting to order at 6:00 p.m.
2. INVOCATION — The invocation was given by Councilmember Jay Martin.
3. PLEDGES — The pledges of allegiance to the U.S. and Texas flags were led by Councilmember Kristin Martin.
4. PUBLIC COMMENTS (Limited to five minutes per person.) - Chuck Rosa and Thomas Garza offered public
comment.
5. CONSENT AGENDA (All consent agenda items are considered routine by City Council and will be enacted by
one motion. There will be no separate discussion of these items unless a Councilmember requests an item be
removed and considered separately.)
(a) Consider approval or other action regarding minutes of the meeting held on February 11, 2019. [L.
Woodward, City Secretary]
(b) Consider approval or other action regarding Resolution 2019-01 authorizing the resale of tax
delinquent property located at Lots 9 and 10, Block 80, Town of La Porte. [Shelley Wolny, Treasurer]
(c) Consider approval or other action regarding Resolution 2019-02 nominating Valvoline LLC to the
office of the Texas Governor's Office of Economic Development and Tourism. [Ryan Cramer,
Economic Development Coordinator]
(d) Consider approval or other action regarding Resolution 2019-03 supporting H.B. 1192 which
decreases the administration fee for collection of sales tax from 2% to 1 % for the City of La Porte and
La Porte Fire Control District. [Jason Weeks, Assistant City Manager]
Councilmember Engelken moved to approve the consent agenda; the motion was adopted, 9-0.
DISCUSSION AND POSSIBLE ACTION
(a) Discussion and possible action changing the voluntary contribution option on the monthly utility
bill to be used for animal control services instead of beautification and trail system projects.
[Corby Alexander, City Manager]
Page 1 of 2
February 25, 2019 Council Meeting Minutes
Councilmember Engelken moved to split the donation options on the utility bills into two (one for the
current beautification option and another for the animal shelter), have the current funds used for
beautification, and have staff track the funding. Councilmember Oieda moved to amend by striking "split
the donation options" and add "add an option for donating to the animal shelter." The motion to amend
was lost, 4-5, Councilmembers Earp, Engelken, Bentley, and Zemanek, and Mayor Rigby voting against.
The main motion was adopted, 7-2, Councilmembers Oieda and K. Martin voting against.
REPORTS
(a) Receive 2018 La Porte Police Department Racial Profiling Report. [Ron Parker, Police Chief]
(b) Receive report of the La Porte Drainage and Flooding Committee Meeting. [Councilmember J. Martin]
(c) Receive report of the La Porte Development Corporation Board Meeting. [Councilmember Ojeda]
ADMINISTRATIVE REPORTS — City Manager Corby Alexander announced there were no reports to be provided.
9. COUNCIL COMMENTS regarding matters appearing on the agenda; recognition of community members,
city employees, and upcoming events; inquiry of staff regarding specific factual information or existing
policies.
Councilmembers thanked the Parks Department for a successful basketball season and the success of Mardi
Gras on Main Street, as well as for the PD report. Councilmember Bentley said he and the Mayor enjoyed the
Civic Clubs events of the weekend, Councilmember Gillett said he had attended the groundbreaking for the
upcoming Highway 146 projects. Mayor Rigby reminded all of the importance of fighting for local control in the
activities of the Texas Legislature. He also shared that Thursday, April 4, will be the last day to register for the
May general election.
10. EXECUTIVE SESSION — The City Council reserves the right to meet in closed session on any agenda
item, should the need arise, and if applicable pursuant to authorization by Title 5, Chapter 551, of the
Texas Government Code, in in accordance with the authority contained in:
Texas Government Code — Section 551.072 — Deliberation regarding purchase, exchange, lease, or value
of real property: Meet with City Manager and City Attorney to discuss value of real property in industrial
districts, concerning negotiations with industry representatives for terms of new Industrial District
Agreements.
(Councilmember Earp has a Conflict of Interest affidavit on file for this item, did not participate in the deliberations,
and left the meeting as the Council adjourned into executive session.) The Council adjourned into executive
session at 6:28 o.m.
11. RECONVENE into regular session and consider action, if any, on item(s) discussed in executive session.
The Council reconvened into open session at 7:22 o.m. No action was taken.
10. ADJOURN — Without objection, Mayor Rigby adjourned the meeting at 7:23 p.m.
Lee Woodward, City Secretary
Page 2 of 2
February 25, 2019 Council Meeting Minutes
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: March 11, 2019
Requested By: Ian Clowes
Department: Planning and Development
Report: Resolution: Ordinance: X
Exhibits: Ordinance
Deed
Area Map
Appraisal Summary
Appropriations
Source of Funds: N/A
Account Number: N A
Amount Budgeted: N/A
Amount Requested: N/A
Budgeted Item: N/A
SUMMARY & RECOMMENDATION
The City received an application from Mr. Mark Domingue of Chem Spray, Inc. to vacate, abandon, and close a
portion of two separate 16-foot wide alleys, adjacent to the property legally described as Lots 16-24, Block 715
and Lots 6-15, Block 715, Town of La Porte, located at the northwest corner of N. 17t" Street and Spencer
Highway. Mark Domingue of Chem Spray Inc. owns Lots 16-24, while a second property owner, Analytic Stress,
Inc., owns Lots 6-15. (See the area map for details.)
The abandonment process requires that all adjacent property owners either participate in the closure or sign
away rights to their portion of the proposed closure. Analytic Stress, the only other adjacent property owner,
decided to participate in Mr. Domingue's request to close and purchase the right-of-way (ROW). If approved by
Council, there will be two deeds produced, one for each property owner.
The total area of the requested closure equals 4,728 square feet. Upon Council approval, 3,856 square feet will
be sold to Mark Domingue of Chem Spray, with the remaining 872 square feet going to Analytic Stress, Inc. The
applicants are seeking to purchase the ROW in order to expand their current business operations and enhance
security on the site. Staff have determined that there are no City or franchised utilities existing within the alleys.
Comcast, AT&T, and CenterPoint Energy, the three franchise companies, have all provided letters of no objection
to the proposed ROW closure.
In accordance with Sections 62-32 of the City's Code of Ordinances, the City obtained an appraisal of the subject
ROW to establish fair market value. The appraisal report established a value of $2.50 per square foot. The
applicant has submitted closing fees in the amount of $11,820 (4,728 sq. ft. x $2.50) to the City. These funds are
being held in escrow subject to final consideration and action by Council.
Action Required by Council:
Consider approval of an ordinance or other action vacating, abandoning, and closing two separate alleys,
adjacent to the property located on N. 17t" Street and Spencer Highway, legally described as Lots 16-24, Block
715 and Lot 6-15, Block 715, Town of La Porte, and authorize the City Manager to execute two separate deeds
to the adjacent property owners for the subject ROW.
Approved for City Council Agenda
Corby D. Alexander, City Manager Date
ORDINANCE NO. 2019-
AN ORDINANCE VACATING, ABANDONING AND CLOSING A PORTION OF TWO SEPARATE ALLEYS
LOCATED IN BLOCK 715 TOWN OF LA PORTE AND AUTHORIZING THE EXECUTION AND DELIVERY
OF DEEDS TO THE ADJOINING LANDOWNERS; FINDING COMPLIANCE WITH THE OPEN
MEETINGS LAW; CONTAINING A SEVERABILITY CLAUSE; CONTAINING A SAVINGS CLAUSE; AND
PROVIDING AN EFFECTIVE DATE HEREOF.
WHEREAS, the City Council of the City of La Porte has been requested by the record
owners of the properties abutting the hereinafter described portion of two separate alleys
located within Block 715 of the Town of La Porte, to vacate, abandon and close said portion of
the existing alley -ways, and;
WHEREAS, the City Council of the City of La Porte has determined and does hereby find,
determine, and declare that the hereinafter described portion of tie two separate alleys located
within Block 715 of the Town of La Porte is not suitable, needed, or beneficial to the public as a
public road, street, or alley, and the closing of the hereinafter described portion of t#e said two
separate alleys located within Block 715 of the Town of La Porte is for the protection of the public
and for the public interest and benefit, and that the hereinafter described portion of#+e said two
separate alleys located within Block 715 of the Town of La Porte should be vacated, abandoned,
and permanently closed.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE:
Section 1. Under and by virtue of the power granted to the City of La Porte under its home
rule charter, Chapter 62 of the City of La Porte Code of Ordinances and Chapter 253, Texas Local
Government Code, the hereinafter described portion of t e said two separate alleys located
within Block 715 of the Town of La Porte is hereby permanently vacated, abandoned, and closed
by the City of La Porte, such rights -of -way being generally illustrated on Exhibit "A" incorporated
herein, and further described to wit:
2
Tract 1
Being a tract of land containing 3,856 square feet, situated in Block 715, Town of La Porte,
Harris County, Texas, being more particularly described by metes and bounds as follows:
BEGINNING at the southeast corner of Lot 20, Block 715, Town of La Porte, said point
being located at the intersection of the easternmost line of the east/west alley in Block
715, Town of La Porte, and North 17t" Street;
THENCE in a westerly direction along the southern line of the east/west alley in Block 715,
Town of La Porte, a distance of 141 feet to a point on the northern boundary of Lot 15,
Block 715, Town of La Porte;
THENCE in a northerly direction across the east/west alley in Block 715, Town of La Porte,
a distance of 16 feet to the southeast corner of Lot 10, Block 715, Town of La Porte;
THENCE in a northerly direction along the west line of the north/south alley in Block 715,
Town of La Porte, a distance of 100 feet to the southeast corner of Lot 6, Block 715, Town
of La Porte;
THENCE in an easterly direction across the north/south alley in Block 715, Town of La
Porte, a distance of 16 feet to the southwest corner of Lot 25, Block 715, Town of La Porte;
THENCE in a southerly direction along the east line of the north/south alley in Block 715,
Town of La Porte, a distance of 100 feet to the southwest corner of Lot 21, Block 715,
Town of La Porte;
THENCE in an easterly direction along the southern line of Lot 21 in Block 715, Town of La
Porte, a distance of 125 feet the southeast corner of Lot 21, Block 715, Town of La Porte;
THENCE in a southerly direction across the east/west alley in Block 715, Town of La Porte,
a distance of 16 feet to the POINT OF BEGINNING of the herein described tract.
Tract 2
Being a tract of land containing 872 square feet, situated in Block 715, Town of La Porte,
Harris County, Texas, being more particularly described by metes and bounds as follows:
BEGINNING at the southeast corner of Lot 10, Block 715, Town of La Porte, said point
being located at the intersection of the westernmost line of the north/south alley in Block
715, Town of La Porte, and the northern most line of the east/west alley in Block 715,
Town of La Porte;
THENCE in a southerly direction across the east/west alley in Block 715, Town of La Porte,
a distance of 16 feet to a point on the northern most line of lot 15, Block 715, Town of La
Porte;
3
THENCE in a westerly direction along the south line of the east/west alley in Block 715,
Town of La Porte, a distance of 54.5 feet to a point on the north line of lot 13, Block 715,
Town of La Porte;
THENCE in an easterly direction along the southern line of Lot 10 in Block 715, Town of La
Porte, a distance of 54.5 feet to the POINT OF BEGINNING of the herein described tract.
Section 2. That the abandonment, vacation and closure provided for herein is made and accepted
subject to all present zoning and deed restrictions if the latter exist, and all easements, whether
apparent or non -apparent, aerial, surface or underground.
Section 3. That the abandonment, vacation and closure provided for herein shall extend only to
the public right, title, easement and interest and shall be construed to extend only to that interest
which the governing body for the City of La Porte may legally and lawfully abandon, vacate and
close.
Section 4. That the City Manager is hereby authorized to execute and deliver a Deed Without
Warranty to each of the abutting owners upon completion of all conditions and requirements set
forth in this Ordinance.
Section S. That the abutting property owners shall pay all costs associated with procedures
necessitated by the request to abandon the portion of the two separate alleys described in this
Ordinance, plus compensation for the market value of such abandoned property in accordance
Chapter 62 of the City of La Porte Code of Ordinances.
Section 6. The City Council officially finds, determines, recites, and declares that a sufficient
written notice of the date, hour, place, and subject of this meeting of the City Council was posted
at a place convenient to the public at the City Hall of the City for the time required by law
preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government
Code; and that this meeting has been open to the public as required by law at all times during
which this ordinance and the subject matter thereof has been discussed, considered, and
formally acted upon. The City Council further ratifies, approves, and confirms such written notice
and the contents and posting thereof.
Section 7: All ordinances or parts of ordinances in conflict herewith are hereby repealed to the
extent of the conflict only.
F
Section 8: If any part or portion of this ordinance shall be invalid or unconstitutional, such
invalidity or unconstitutionality shall not affect or impair any remaining portions or provisions of
the ordinance.
Section 9. This ordinance shall be effective from and after its passage and approval, and it is so
ordered.
PASSED AND APPROVED THIS DAY OF 2019.
0
ATTEST:
Lee Woodward, City Secretary
Clark T. Askins, Assistant City Attorney
CITY OF LA PORTE, TEXAS
Louis R. Rigby, Mayor
DEED WITHOUT WARRANTY
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY
REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS
INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR
SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
Date: March , 2019
Grantor: CITY OF LA PORTE, TEXAS, a municipal corporation
Mailing Address: 604 West Fairmont Parkway, La Porte, TX 77571
Grantee: MARK L. DOMINGUE
Mailing Address: 4903 Linden St., Bellaire, Texas 77041
Consideration: Ten and No/100 Dollars ($10.00) cash
and other good and valuable considerations
Property: (including any improvements):
Being a tract of land containing 3,856 square feet, situated in Block 715, Town of La Porte,
Harris County, Texas, being more particularly described by metes and bounds as follows:
BEGINNING at the southeast corner of Lot 20, Block 715, Town of La Porte, said point
being located at the intersection of the easternmost line of the east/west alley in Block 715,
Town of La Porte, and North 17'h Street;
THENCE in a westerly direction along the southern line of the east/west alley in Block 715,
Town of La Porte, a distance of 141 feet to a point on the northern boundary of Lot 15, Block
715, Town of LaPorte;
THENCE in a northerly direction across the east/west alley in Block 715, Town of La Porte,
a distance of 16 feet to the southeast comer of Lot 10, Block 715, Town of La Porte;
THENCE in a northerly direction along the west line of the north/south alley in Block 715,
Town of La Porte, a distance of 100 feet to the southeast corner of Lot 6, Block 715, Town
of La Porte;
THENCE in an easterly direction across the north/south alley in Block 715, Town of La
Porte, a distance of 16 feet to the southwest corner of Lot 25, Block 715, Town of La Porte;
THENCE in a southerly direction along the east line of the north/south alley in Block 715,
Town of LaPorte, a distance of 100 feet to the southwest corner of Lot 21, Block 715, Town
of La Porte;
THENCE in an easterly direction along the southern line of Lot 21 in Block 715, Town of
La Porte, a distance of 125 feet the southeast corner of Lot 21, Block 715, Town of La Porte;
THENCE in a southerly direction across the east/west alley in Block 715, Town of La Porte,
a distance of 16 feet to the POINT OF BEGINNING of the herein described tract, and
containing 3,856 square feet, more or less, which tract was vacated, abandoned and closed
by City of La Porte Ordinance No. 2019- passed and approved by the City Council
of the City of La Porte on the day of March, 2019.
Reservations from and Exception to Conveyance and Warranty: This conveyance is made subject
to all and singular the restrictions, conditions, oil, gas, and other mineral reservations, easements,
and covenants, if any, applicable to and enforceable against the above described property as reflected
by the records of the county clerk of the aforesaid county.
Grantor for the consideration and subject to the reservations from and exceptions to conveyance,
conveys to Grantee the property without express or implied warranty, and all warranties that might
arise by common law and the warranties in §5.023 of the Texas Property Code (or its successor) are
excluded.
Attest:
Lee Woodward
City Secretary
Approved:
Clark T. Askins
Assistant City Attorney
City of LaPorte, Texas
in
Corby D. Alexander
City Manager
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on day of , 2019, by
Corby D. Alexander, City Manager of the City of La Porte, Texas, a municipal corporation.
AFTER RECORDING RETURN TO:
ASKINS & ASKINS, P.C.
P.O. Box 1218
La Porte, TX 77572-1218
Notary Public, State of Texas
PREPARED IN THE LAW OFFICE OF:
ASKINS & ASKINS, P.C.
P.O. Box 1218
LaPorte, TX 77572-1218
DEED WITHOUT WARRANTY
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY
REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS
INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR
SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
Date: March , 2019
Grantor: CITY OF LA PORTE, TEXAS, a municipal corporation
Mailing Address: 604 West Fairmont Parkway, La Porte, TX 77571
Grantee: ANALYTIC STRESS RELIEVING, INC.
Mailing Address: 117 Board Rd., Lafayette, Louisiana 70508-3404
Consideration: Ten and No/100 Dollars ($10.00) cash
and other good and valuable considerations
Property: (including any improvements):
Being a tract of land containing 872 square feet, situated in Block 715, Town of La Porte,
Harris County, Texas, being more particularly described by metes and bounds as follows:
BEGINNING at the southeast corner of Lot 10, Block 715, Town of La Porte, said point
being located at the intersection of the westernmost line of the north/south alley in Block
715, Town of La Porte, and the northern most line of the east/west alley in Block 715, Town
of La Porte;
THENCE in a southerly direction across the east/west alley in Block 715, Town of La Porte,
a distance of 16 feet to a point on the northern most line of lot 15, Block 715, Town of La
Porte;
THENCE in a westerly direction along the south line of the east/west alley in Block 715,
Town of La Porte, a distance of 54.5 feet to a point on the north line of lot 13, Block 715,
Town of LaPorte;
THENCE in an easterly direction along the southern line of Lot 10 in Block 715, Town of
La Porte, a distance of 54.5 feet to the POINT OF BEGINNING of the herein described tract,
and containing 872 square feet, more or less, which tract was vacated, abandoned and closed
by City of La Porte Ordinance No. 2019- passed and approved by the City Council
of the City of La Porte on the day of March, 2019.
Reservations from and Exception to Conveyance and Warranty: This conveyance is made subject
to all and singular the restrictions, conditions, oil, gas, and other mineral reservations, easements,
and covenants, if any, applicable to and enforceable against the above described property as reflected
by the records of the county clerk of the aforesaid county.
Grantor for the consideration and subject to the reservations from and exceptions to conveyance,
conveys to Grantee the property without express or implied warranty, and all warranties that might
arise by common law and the warranties in §5.023 of the Texas Property Code (or its successor) are
excluded.
Attest:
Lee Woodward
City Secretary
Approved:
Clark T. Askins
Assistant City Attorney
City of LaPorte, Texas
Corby D. Alexander
City Manager
STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on day of , 2019, by
Corby D. Alexander, City Manager of the City of La Porte, Texas, a municipal corporation.
AFTER RECORDING RETURN TO:
ASKINS & ASKINS, P.C.
P.O. Box 1218
La Porte, TX 77572-1218
Notary Public, State of Texas
PREPARED IN THE LAW OFFICE OF:
ASKINS & ASKINS, P.C.
P.O. Box 1218
LaPorte, TX 77572-1218
R.C. Chuoke & Associates, Inc.
Appraisers & Consultants
P.O. Box 1447
League City, Texas 77574
March 28, 2017
City of La Porte
P.O. Box 1115
LaPorte, Texas 77572
Office- 281-338-9633
Fax- 281-338-9533
RE: Restricted Appraisal regarding the estimated Market Value of a portion
of an existing 16 foot alleyway out of Block 715 of the Town of La Porte,
Harris County, Texas.
Dear Sirs:
In accordance with your request, I have inspected the following described
property for the purpose of estimating the Market Value following described
property as of the date of this Restricted Appraisal. As per our agreement, the
data and analysis is presented in an abbreviated Restricted Appraisal format
and is not intended to contain the full analysis.
BRIEF LEGAL DESCRIPTION OF PROPERTY
Known as a portion of the existing 16 foot alley out of Block 715 of the Town of
La Porte located in Harris County, Texas per the site plan provided. (See Site
plan in addenda).
I hereby certify that I have personally inspected the property described via a
street inspection and that all data gathered by my investigation is from
sources believed reliable and true. In preparing this Restricted Appraisal, a
study of comparable sales and other related market data was performed.
.....Page 2 Continued......
It should clearly be understood that this letter only constitutes only a
statement of the final value and that does not presume to be the complete
analysis of the subject property nor a complete appraisal format and is subject
to the preparation of a detailed appraisal report.
The market values in the subject neighborhood appear to vary generally from
+-$1.50 PSF to over $5.00 PSF for tracts generally similar to the subject
property with locations that range from primary to secondary type roadways.
The "parent tracts" surrounding the subject parcels consists of commercial and
light industrial tracts. Some of these parcels are improved with
office/warehouse facility most with open storage yards. These sites are
reported to have general access public utilities. The site appears to be
generally flat and level. The subject property is located in the 100 year flood
plain. The adjacent properties are primarily improved with commercial office/
warehouse properties some of which include large open paved or stabilized
yard areas. The Highest and Best Use of the subject property is determined to
be for commercial or light industrial use. The client and intended user of this
appraisal is the City of La Porte only. The intended use is to estimate the
current market value of the subject property of this analysis as described
above. There has been no other transfer of the subject property noted for the
past 36 months per client data. The effective date of the appraisal is March 25,
2017. The date of the report is March 28, 2017. The estimated exposure time
is up to 24 months.
After a review of the comparable sales it is my opinion the estimated unit
value range of between $1.50 to $5.00 PSF would be placed on the subject
property with a mid -range value of $2.50 PSF being indicated for the parent
tract. Therefore the unit market value of the subject tract is estimated at
$2.50 PSF which is based on 100% fee simple ownership with no
discounting applied.
Respectfully Submitted,
Chris Chuoke, President
R.C. CHUOKE & ASSOCIATES, INC.
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: March 1 1 .2019
Requested By: Michael Dolby, Director of Finance
Department: FINANCE
Report xx Resolution: Ordinance:
Exhibits:
Exhibits:
Amount Budgeted
Source of Funds: General Fund/Finance
Account Number: 6141-5001
Amount Budgeted $66,100
Amount Requested: $66,100
Budgeted Item: YES NO
SUMMARY & RECOMMENDATION
In accordance with the City Charter, the fiscal year ending September 30, 2018, Comprehensive Annual
Financial Report (CAFR) will be presented to Council by the external auditors Whitley Penn. The audit report
provides the City with reasonable assurance that the financial statements are free of material misstatements. The
auditors designed tests that provide evidence that the financial statements conform to the highest level of
accounting standards. The City of La Porte received an unmodified (clean) opinion from the auditors and no
management comments or deficiencies in internal control were identified.
The City of La Porte has won the Award for Excellence in Financial Reporting from the Government Finance
Officers Association for thirty-seven (37) consecutive years.
Action Required by Council:
Consider approval or action to accept the Fiscal Year Ending September 30, 2018, Comprehensive Annual
Financial Report (CAFR).
Approved for City Council Agenda
Corby Alexander, City Manager
Date
CITY OF LA PORTE, TEXAS
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
For the Fiscal Year Ended
September 30, 2018
Corby Alexander, City Manager
Prepared by:
Department of Finance
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CITY OF LA PORTE
TABLE OF CONTENTS (continued)
Exhibit
Page
/ Table
Introductory Section
Letter of Transmittal
i
GFOA Certificate of Achievement
vii
Organizational Chart
viii
List of Principal Officials
ix
Financial Section
Report of Independent Auditors
1
Management's Discussion and Analysis
7
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Position
A-1
21
Statement of Activities
A-2
22
Fund Financial Statements:
Balance Sheet - Governmental Funds
A-3
24
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
A-4
27
Statement of Revenues, Expenditures, and Changes in Fund Balance
- Governmental Funds
A-5
28
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
A-6
30
Statement of Net Position - Proprietary Funds
A-7
31
Statement of Revenues, Expenses and Changes in Fund Net Position
- Proprietary Funds
A-8
32
Statement of Cash Flows - Proprietary Funds
A-9
33
Notes to the Financial Statements
A-10
35
Required Supplementary Information:
General Fund - Schedule of Revenues, Expenditures, and Changes in
Fund Balance - Budget and Actual
B-1
80
Tax Increment Reinvestment Zone
B-2
81
Notes to Required Supplementary Information
B-2
82
Schedule of Changes in Net Pension Liability and Related Ratios
B-3
83
Schedule of TMRS Contributions
B-4
84
Schedule of Proportionate Share of the TMSRS
B-5
85
Schedule of City's Contributions
B-6
85
Schedule of Changes in the Total OPEB Liability and Related Ratios —
Retiree Health Care Plan
B-7
86
Schedule of Changes in the Total OPEB Liability and Related Ratios —
TMRS Supplemental Death Benefits Fund
B-8
87
Combining and Individual Fund Statements and Schedules:
Combining Statements - Non -major Governmental Funds:
Combining Balance Sheet
C-1
92
Combining Statement of Revenues, Expenditures and Changes in
Fund Balance
C-2
96
Debt Service Fund
C-3
100
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CITY OF LA PORTE
TABLE OF CONTENTS (continued)
Exhibit
Page
/ Table
Financial Section (continued)
Combining and Individual Fund Statements and Schedules:
(continued)
2017 Certificate of Obligation Bonds
C-4
101
Special Revenue Fund — Hotel/Motel Fund
C-5
102
Special Revenue Fund — Section 4B Sales Tax
C-6
103
Special Revenue Fund — Street Maintenance Sales Tax Fund
C-7
104
Special Revenue Fund — Emergency Services Sales Tax Fund
C-8
105
Special Revenue Fund — Restricted Fund
C-9
106
2006 Certificate of Obligation Bond Fund
C-10
107
2010 Certificate of Obligation Bond Fund
C-11
108
2015 Certificate of Obligation Bond Fund
C-12
109
Capital Improvement Fund
C-13
110
Capital Projects Fund — Drainage Improvement Fund
C-14
III
General Fund — Schedule of Expenditures — Budget and Actual
112
Schedules of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual: (continued)
Combining Statement of Net Position
119
Combining Statement of Revenues Expenses
120
Combining Statement of Cash Flows
121
Statistical Section
Net Position by Component
1
126
Changes in Net Position
2
128
Fund Balances of Governmental Funds
3
132
Changes in Fund Balances of Governmental Funds
4
134
Assessed Value and Estimated Value of Taxable Property
5
137
Property Tax Rates - Direct and Overlapping Governments
6
138
Principal Property Taxpayers
7
140
Property Tax Levies and Collections
8
141
Ratios of Outstanding Debt by Type
9
143
Ratio of Net General Bonded Debt to Taxable Value
10
144
Direct and Overlapping Governmental Activities Debt
11
145
Demographic and Economic Statistics
12
146
Principal Employers
13
147
Full -Time Equivalent City Governmental Employees by Function
14
148
Operating Indicators by Function/Program
15
150
Capital Assets Statistics by Function/Program
16
152
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March 11, 2019
To the Honorable Mayor,
Members of City Council, and
Citizens of the City of La Porte, Texas:
The Finance Department and City Manager's Office are pleased to submit the Comprehensive Annual Financial
Report for the City of La Porte, Texas for the fiscal year ended September 30, 2018. This report is published to
provide the City Council, City staff, our citizens, our bondholders and other interested parties with detailed
information concerning the financial condition and activities of the City government. This report consists of
management's representations concerning the finances of the City of La Porte. Consequently, management
assumes full responsibility for the completeness and reliability of all of the information presented in this report.
To provide a reasonable basis for making these representations, management of the City has established a
comprehensive internal control framework that is designed both to protect the government's assets from loss,
theft or misuse and to compile sufficient reliable information for the preparation of the City of La Porte's financial
statements in conformity with GAAP. The cost of internal controls should not outweigh their benefits; therefore
the City of La Porte's comprehensive framework of internal controls has been designed to provide reasonable
rather than absolute assurance that the financial statements will be free from material misstatement. As
management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable
in all material respects.
The City of La Porte's financial statements have been audited by Whitley Penn LLP, a firm of licensed certified
public accountants. The goal of the independent audit was to provide reasonable assurance that the financial
statements of the City of La Porte for the fiscal year ended September 30, 2018 are free of material misstatement.
The independent audit involved examining, on a test basis, evidence supporting the amount and disclosures in
the financial statements, assessing the accounting principles used and significant estimates made by management
and evaluating the overall financial statement presentation. The independent audit concluded, based upon the
audit, that there was a reasonable basis for rendering an unqualified opinion that the City of La Porte's financial
statements for fiscal year ended September 30, 2018 are fairly presented in conformity with GAAP. The
independent auditors' report is presented as a component of the financial section of this report.
The independent audit of the financial statements of the City of La Porte included a federally mandated "Single
Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit
engagements require the independent auditor to report not only on the fair presentation of the financial
statements, but also on the audited government's internal controls and compliance with legal requirements, with
special emphasis on internal controls and legal requirements involving the administration of federal awards.
These reports are available in the City of La Porte's separately issued Single Audit Report. GAAP requires that
management provide a narrative introduction, overview and analysis to accompany the basic financial statements
in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to
complement MD&A and should be read in conjunction with it. The City of La Porte's MD&A can be found
immediately following the report of the independent auditors.
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Profile of the City
The City of LaPorte, incorporated in 1892, is located in the southeast quadrant of Harris County and is bounded
on the north by the Houston ship channel, on the east by Galveston Bay and the south by the Bayport channel.
The City of La Porte currently encompasses 19 square miles and serves a population of 35,371.
The City is a home rule city operating under the Council -Manager form of government. Policymaking and
legislative authority are vested in a governing council consisting of the mayor and eight other members. The city
council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees
and hiring the City Manager, City Secretary and Attorney. The City Manager is responsible for carrying out the
policies and ordinances of the City Council, for overseeing the day-to-day operations of the City and for
appointing the heads of various departments. The Council is elected on a non -partisan basis. The Mayor and
Council members serve three-year staggered terms. Six of the council members are elected by district. The
Mayor and the two remaining council members are elected at large. The City of La Porte provides a full range
of services, including police and fire protection, the construction and maintenance of streets and other
infrastructure and recreational activities and cultural events. Certain services are provided through a legally
separate Water Authority, which functions, as a blended component unit and in essence, is a department of the
City of La Porte, and, therefore, has been included as an integral part of the City of La Porte's financial
statements. Additional information on the Water Authority and other blended component units can be found in
Note 1B of the notes to the financial statements. The City has established a Taxing Increment Reinvestment
Zone one (the Zone). The zone is presented as a blended component unit and is being reported as a governmental
fund type (see Note 113). The City has also established a section 4 B Sales Tax Corporation (see Note 113). The
City also has established a Fire Control, Prevention and EMS District (see note 113). The City's accounting
records for general governmental operations are maintained on modified accrual basis, with the revenues being
recorded when available and measurable and expenditures being recorded when the services or goods are
received and the liabilities are incurred. Accounting records for the City's utilities and other proprietary activities
are maintained on the accrual basis.
The annual budget serves as the foundation for the City of La Porte's financial planning and control.
Budgetary control has been established at the fund level. All agencies of the City of La Porte are required to
submit requests for appropriation to the City Manager on or before May 26 of each year. The City Manager
uses these requests as the starting point for developing a proposed budget. The City Manager then presents
this proposed budget to council for review prior to August. The council is required to hold a public hearing on
the proposed budget and to adopt a final budget by no later than September 30th. The appropriated budget is
prepared by fund, function (e.g., public safety) and department (e.g., police). The directors are given latitude
to approve transfers of appropriations within a department. Transfers of appropriations between funds,
however require the special approval of the city council. Budget -to -actual comparisons are provided in financial
reports for each individual governmental fund for which an appropriated annual budget has been adopted.
For the general fund, this comparison is presented on page 80 as part of the required supplementary
information. For governmental funds, other than the general fund, with appropriated annual budgets, this
comparison is presented in the governmental fund subsection of this report, which starts on page 9 2. Formal
budgetary integration is employed as a management control device during the year for the General Fund and
Enterprise Funds. Formal budget integration is not employed for the Debt Service and Capital Projects
Funds because effective budgetary control is alternatively achieved through bond indenture provisions and
legally binding construction contracts, respectively.
Economic Condition
The information presented in the financial statements is perhaps best understood when it is considered from
the broader perspective of the specific environment within which the City of La Porte operates.
11
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Local Economy
The City of La Porte is located in the southeast quadrant of Harris County, which is a 1, 723 square mile county
is a leading oil, gas and petrochemical areas. The County has more than 3,200 manufacturing plants, the nation's
largest concentration of petrochemical plants, and the third largest United States seaport and is a corporation
management center. A significant part of the County's major employers, manufacturers, education and financial
institutions are located in Houston, the County seat. The Texas Medical Center, located in Harris County, is one
of the nation's largest, providing medical care and educational opportunities. Higher education facilities include:
University of Houston, Rice University, Texas Southern University, St. Thomas University and Houston Baptist
University, all offering full four- year as well as postgraduate programs. The Lyndon B. Johnson Space Center
is also located here. Located some 20 miles southeast of Houston on Galveston Bay in Harris County are the
three communities that make up the La Porte Bayshore Area: La Porte, Morgan's Point and Shoreacres. The area
has a combined population of approximately 40,000. Though much of the image of this area is industrial, the La
Porte- Bayshore area is still characterized by an expanse of resort homes.
Strategic Plan
• Overview
On October 27, 2012, the Mayor, City Council, City Manager and key staff of the City of La Porte met
together in a retreat planning session. The purpose of that meeting was to establish the Council's
Strategic Plan for the next five years. A report was prepared outlining the City Council's Mission, Vision
and Core Values, as well as six overall goals. Each goal had identified objectives and strategies, with
time lines for beginning and completing the goals.
On March 9, 2013, the City Manager and his key staff met. Their purpose was two -fold. First, staff
reviewed and discussed the Mission, Vision and Core Values developed by the City Council and created
Leadership Statements for the staff to follow to ensure their work is consistent with the value of the
City Council. Secondly, staff reviewed and clarified the goals, objectives and strategies identified by
the City Council; if necessary identify additional goals consistent with the overall mission, vision and
values; and establish the framework for an action plan. The result of their work is documented in this
report.
The Strategic Plan will provide a blueprint for action over the next five years. When developing the
annual budget, staff will be tasked with making sure that expenditures and programs further the goals
and Core Values stated in this document. This provides clear direction to the staff as to what priorities
are important to the Council and plans can be made accordingly to make sure that resources are
allocated towards those ends. Additionally, this plan is an excellent communication tool that the
Council and the staff can use when speaking with residents and businesses. Many times, ad hoc
requests can derail longer -term plans. The Strategic Plan outlines a framework for receiving,
prioritizing, and budgeting for resident requests.
All participants, staff and Council, agreed to commit to the success of this plan. A plan only becomes a
useful and working document when all the participants (as a whole and as individuals) make a
commitment to review it regularly, use it monthly, and modify it as needed. It is a tool that can and should
be used regularly to track progress, make notes of variations between expectations and actuals, of
timelines and expenses, to help accomplish each goal, and to hold one another accountable for updates
and completion.
• Mission Statement
The Council reviewed and revised the Mission Statement & Vision Statement of the City and the results
are as follows:
iii
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The City of La Porte embraces our heritage, community values, and opportunities, while enhancing the quality of
life for our citizens
Vision Statement
To provide improved infrastructure, to drive economic growth, and to enhance quality of life for our citizens.
• Core Values
The City Council wanted to specify the core values under which the City and its staff function. Core
values are the general guidelines that establish the foundation for how an organization will operate.
Staff then discussed these value statements to define and gain an understanding of what those Core
Value meant to staff from a leadership perspective. Staff first discussed what the elements of each
Core Value represented, then prepared a Leadership Statement for each one.
The following are the Core Values of the City of La Porte:
➢ Health & Public Safety: City employees will ensure the health and safety of our citizens
by providing and maintaining superior public infrastructure and public safety services.
➢ Integrity & Accountability: City employees will be open, honest and transparent, and be
accountable to the Council so that Council can be responsive to the citizens.
➢ Superior Customer Service: City employees will proactively provide superior customer service in
a positive and timely manner.
➢ Quality in everything we do: City employees will strive for superiority in all services we provide.
• Goal and Plan Development
During the Council Retreat in October 2012, six goals were developed by the Council, with staff
providing assistance in the development of objectives. In March 2013, the staff further added
"meat to the bone" to outline more specifically the actions that would be necessary to achieve the stated
goals. The development and implementation of the action plan will serve to provide Council a
clear understanding of how and when each of their goals will be accomplished. The action plan
proposes to do the following:
➢ Identify a team leader: Each Goal needs a champion who will lead the effort to accomplish the
goal and be held accountable for the action plan that is developed. A team leader for each goal was
assigned.
➢ Identify team members. Likewise each goal needs a larger team, consisting of fellow staff from
across all departmental lines where appropriate, to assist in the implementation process.
➢ Identify partners. Each team should identify the partners, outside the city organization, who can
provide expertise and resources to accomplish the goal.
➢ Define action steps. Each objective needs defined action steps showing Council how the goal will
be accomplished. The action steps provide the basis for benchmarks.
➢ Prepare a timeline. Timelines were prepared for each of the objectives. Staff reviewed those
timelines and recommended adjustments.
The Council -identified goals are:
➢ Improve Infrastructure
➢ Preserve Heritage — to preserve the structure and amenities that make La Porte unique
➢ Ensure that all departments and facilities are ready for any disaster
➢ To encourage economic development/retail development
➢ To provide Superior Customer Service
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➢ To revitalize blight/146
In addition to the six Council -identified goals, it was agreed that key areas of city government were
not included in the goals identified by Council. Staff was tasked with discussing other areas where they
would establish goals and objectives and bring them to Council for consideration and approval to
include in the Strategic Plan. Several new goals were identified and are proposed for Council
consideration:
To provide and maintain superior public safety
Continue to improve the quality of life through recreational amenities
Create a Neighborhood Preservation Program
Provide diverse and timely communications that promote and influence a positive
public perception of La Porte
One critical component to ensuring that the elements of the Strategic Plan are being implemented is to provide
regular status reports to the City Council. Staff prepares and presents to council quarterly written reports
supplemented w i t h oral reports or action items for implementation that may be necessary in-between
written reports.
In fiscal year 2014, City staff appointed key department directors to carry out the major components of the
strategic plan. Staff developed a matrix that identifies target dates for completion of the components of the
strategic plan.
Relevant Financial Policy
City staff is complying with the new GASB pronouncements regarding other post -employment benefits
reporting.
Major Initiatives
Staff is overseeing the design and construction of our fitness center addition. Also, public works is overseeing
the construction of the multi -million dollar infrastructure water/ sewer project.
Long Term Planning
Given the current economy and the uncertainty of the next few years, the City's existing financial position
remains strong. The City has incorporated several strategies to decrease the expenses to the City over the next
several years. Rising costs of personnel and the related benefits have been a challenge to the City; however, over
the last few years, a healthy fund balance in the General Fund has allowed the City to weather these rising costs.
During the upcoming year, the city will monitor the effects of a new municipal utility district that will have 640
single family homes with an average value of $280,000. Also included in this development is $40,000,000 in
multifamily housing and $4,000,000 in senior living housing. Build out is projected over the next five years, and
city property tax revenue from this project is estimated to $1,580,000 annually.
During the upcoming fiscal year, staff will re -negotiate our industrial district agreements with companies within
our industrial district zones. Also the city will benefit annually from increased estimated taxes of $3.3 million
from new construction being taxed at 63% (which becomes available in 2020).
Conservative revenue estimates and efforts to reduce expenditures have contributed to the City's strong
financial position and have allowed the City to weather the economic slump. We are especially pleased
that there have been no property taxes rate increases for (28) twenty-eight years. Additional capital projects
are being funded by utilizing excess fund balances and previously issued debt that had been stranded.
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With the associated fund draw downs, the remaining fund balances continue to meet operational objectives
and current fiscal policies.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence
in Financial Reporting to the City for its comprehensive annual financial report for the fiscal year ended
September 30, 2017.This was the thirty-seventh consecutive year that the City has received this prestigious
award. In order to be awarded a Certificate of Achievement, the City published an easily readable and
efficiently organized comprehensive annual financial report. This report satisfied both generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive
annual financial report continues to meet the Certificate of Achievement Program's requirements and we are
submitting it to the GFOA to determine its eligibility for another certificate. In addition, the city also
received the GFOA's Distinguished Budget Award for its annual budget document. In order to qualify for
the Distinguished Budget Presentation Award, the government's budget document was judged to be proficient
in several categories, including as a pol icy document, a financial plan, an operations guide and a
communications device. Other financial awards to the City are the Popular Financial Report Award from GFOA,
the Investment Policy Award from the Government Treasurer's Organization of Texas, the Transparency Stars
Award from the State of Texas Comptroller and the Achievement of Excellence in Procurement Award from the
National Procurement Institute.
The preparation of this r e p o r t would not have been possible without the efficient and dedicated services
of the entire staff of the finance and administration department. We would like to express our appreciation
to all members of the department who assisted and contributed to the preparation of this report. Credit also
must be given to the mayor and city council for their unfailing support for maintaining the highest standards
of professionalism in the management of the City of La Porte's finances.
Respectfully submitted,
Corby Alexander
City Manager
vi
Michael G. Dolby
Director of Finance
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CITY OF LA PORTE
LIST OF ELECTED AND APPOINTED OFFICIALS
For the Year Ended September 30, 2018
Elected Officials Position
Louis Rigby Mayor
Danny Earp Council Member — District One
Chuck Engelken Council Member — District Two
William Bentley Council Member — District Three
Kristin Martin
Council Member
— District Four
Jay Martin
Council Member
— District Five
Nancy Ojeda
Mayor Pro Tem —
District Six
John Zemanek Council Member — At Large A
Steve Gillett Council Member — At Large B
City Management
Position
Corby Alexander
City Manager
Jason Weeks
Assistant City Manager
Ron Parker
Police Chief
Don Pennell
Director of Public Works
Lee Woodward
City Secretary
Denise Mitrano
Municipal Judge
Michael G. Dolby
Director of Finance
ix
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FINANCIAL SECTION
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REPORT OF INDEPENDENT AUDITORS
To the Honorable Mayor and
Members of City Council
City of LaPorte, Texas
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the City of La Porte, Texas
(the "City"), as of and for the year ended September 30, 2018, and the related notes to the financial
statements, which collectively comprise the City's basic financial statements as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
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To the Honorable Mayor and
Members of City Council
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund
and the aggregate remaining fund information of the City, as of September 30, 2018, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance
with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1 and Note 9 to the financial statements, the City adopted the provisions of
Government Accounting Standards Board ("GASB") Statement No. 75, Accounting and Financial
Reporting for Post -employment Benefits Other Than Pensions, as of June 30, 2018. Our opinion is not
modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, the budgetary comparison, required pension system information and other post -
employment benefit information on pages 7 through 18 and 80 through 87 be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary information
in accordance with auditing standards generally accepted in the United States of America, which consisted
of inquiries of management about the methods of preparing the information and comparing the information
for consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements and schedules, and statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and budgetary comparison schedules are
the responsibility of management and were derived from and relate directly to the underlying accounting
and other records used to prepare the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the combining and individual nonmajor fund financial
statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
2......
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To the Honorable Mayor and
Members of City Council
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 11, 2019,
on our consideration of the City's internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose
of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control over financial reporting and
compliance.
Houston, Texas
March 11, 2019
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MANAGEMENT'S DISCUSSION AND ANALYSIS
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
As management of the City of La Porte, we offer readers of the City of La Porte's financial statements this
narrative overview and analysis of the financial activities of the City of La Porte for the fiscal year ended
September 30, 2018. We encourage readers to consider the information presented here in conjunction with
additional information that we have furnished in our letter of transmittal, which can be found on pages i-vi
of this report.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of resources of the City of La Porte exceeded its liabilities and deferred
inflows of resources at the close of the most recent fiscal year by $116 million (net position). Of this
amount,$31.0 million is restricted for special purposes. The remaining balance is unrestricted net
position, $9.5 million, which can be used to meet the City's ongoing obligations to residents and
creditors.
Net position increased by $5.7 million as a result of operations. As a result of the prior year restatement,
net position decreased by $27.0 million.
The City of La Porte's total expenses were $70.4 million. Program revenues of $19.8 million reduced
the net cost of the City's functions to be financed from the City's general revenues to $56.4 million.
The City of La Porte's total long-term liabilities and debt increased by $18.9 million, or 21%, during
the current fiscal year. This due primarily to the increase in total OPEB liability as a result of the
implementation of GASB Statement No. 75.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City of La Porte's basic financial
statements. The City's basic financial statements are comprised of three components: (1) government -wide
financial statements, (2) fund financial statements and (3) notes to the financial statements. This report also
contains other supplementary information in addition to the basic financial statements themselves.
GOVERNMENT -WIDE STATEMENTS
The government -wide statements report information about the City as a whole using accounting methods
similar to those used by private -sector companies.
The Statement of Net Position and the Statement of Activities, which are the government -wide statements,
report information about the City as a whole and about its activities in a way that helps answer the question
of whether the City is better off this year as compared to last year. These statements include all assets and
liabilities and are presented on the accrual basis of accounting. All current year revenues and expenses are
taken into account regardless of when the cash is received or paid.
The Statement of Net Position presents information on all of the City of La Porte's assets, deferred outflows,
liabilities and deferred inflows with the difference between the three reported as net position. Over time,
deferred outflows, increases and decreases in net position may serve as a useful indicator of whether the
financial position of the City of La Porte is improving or deteriorating.
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
The Statement of Activities presents information showing how the government's net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the underlying event
giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses
are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g.,
uncollected taxes and earned but unused vacation and sick leave).
Both the government -wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through their user fees and charges (business -
type activities). The governmental activities of the City include general government, public safety, public
works, health, welfare and sanitation and culture and recreation. The business -type activities of the City
consist of water and sewer utilities, airport, and the La Porte Area Water Authority.
The government -wide financial statements can be found on pages 21 - 23 of this report.
FUND FINANCIAL STATEMENTS
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds
of the City can be divided into two categories — governmental and proprietary — and utilize different
accounting approaches.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, unlike the government -wide financial
statements, governmental fund financial statements focus on near -term inflows and outflows of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government's near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial statements,
it is useful to compare the information presented for governmental funds with similar information presented
for governmental activities in the government -wide financial statements. By doing so, readers may better
understand the long-term impact of the government's near -term financing decisions. Both the governmental
fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund
balances provide a reconciliation to facilitate this comparison between governmental funds and
governmental activities.
The City maintains fourteen individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and
changes in fund balances for the General Fund, 2017 Certificate of Obligation Bond Fund, Debt Service
Fund and Tax Increment Reinvestment Zone ("TIRZ") which are considered to be major funds. Data from
the other ten governmental funds are combined into a single, aggregated presentation.
The City adopts an annual appropriated budget for its General Fund. Budgetary comparison statements
have been provided to demonstrate compliance with these budgets.
The basic governmental fund financial statements can be found on pages 24 through 30 of this report
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
Pronrietary Funds
The City maintains two types of proprietary funds. Proprietary funds are used to report the same functions
presented as business type activities in the government -wide statements. The City uses proprietary funds
to account for its utilities, airport and water authority. Internal services funds are an accounting device used
to accumulate and allocate costs internally among the City's various functions. The City uses its internal
service funds to account for motor pool services, technology services and insurance. Because these services
predominately benefit the governmental rather than business type functions, they have been included in the
governmental activities in the government -wide financial statements.
Enterprise funds are used to report the same functions presented as business -type activities in the
government -wide financial statements, only in more detail. The City uses enterprise funds to account for
its utility operations, La Porte Area Water Authority and the Airport. All internal service funds are
combined into a single aggregated presentation in the proprietary fund financial statements. The basic
proprietary fund financial statements can be found on pages 31 - 34 of this report.
NOTES TO THE FINANCIAL STATEMENTS
The notes provide additional information that is essential to a full understanding of the data provided in the
government -wide and fund financial statements. The notes can be found on pages 35 - 78 of this report.
OTHER INFORMATION
In addition to the basic financial statements and the accompanying notes, this report also presents certain
required supplementary information concerning the City's progress in funding its obligation to provide
other post employee benefits, pension information and general fund budgetary comparisons. Required
supplementary information can be found on pages 80 - 87 of the City's Comprehensive Annual Financial
Report.
The combining statements referred to earlier in connection with nonmajor governmental funds and internal
services funds are presented immediately following the required supplementary information. Combining
and individual fund statements and supporting schedules can be found beginning on page 92 of the City's
Comprehensive Annual Financial Report.
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of the City's financial position. For
the City, assets and deferred outflows exceed liabilities and deferred inflows by $116 million as of
September 30, 2018, in the primary government as follows:
SUMMARY OF STATEMENT OF NET POSITION
As of September 30, 2018 and 2017
Governmental
Business -type
Activities
Activities
Total
2018 2017
2018
2017
2018
2017
Current and other assets $ 104,687,724 $ 96,892,982 $
15,951,689 $
12,559,374
$ 120,639,413 $
109,452,356
Capital assets, net 78,992,278 84,277,933
32,199,968
33,782,624
111,192,246
118,060,557
Total Assets 183,680,002 181,170,915
48,151,657
46,341,998
231,831,659
227,512,913
Deferred Outflows
6,380,346
8,569,349
697,304
822,088
7,077,650
9,391,437
Other liabilities
6,734,276
6,257,937
1,038,918
1,006,905
7,773,194
7,077,925
Long-term Liabilities
103,146,798
87,284,296
7,108,959
4,115,794
110,255,757
91,587,007
Total Liabilities
109,881,074
93,542,233
8,147,877
5,122,699
118,028,951
98,664,932
Deferred Inflows
4,227,851
715,816
490,100
77,683
4,717,951
793,499
Net Position:
Net investment in capital assets
43,421,145
44,468,918
32,199,968
33,782,624
75,621,113
78,251,542
Restricted
31,025,084
24,105,852
-
520,000
31,025,084
24,625,852
Unrestricted
1,505,194
26,907,445
8,011,016
7,661,080
9,516,210
34,568,525
Total Net Position
$ 75,951,423 $
95,482,215 $
40,210,984 $
41,963,704
$ 116,162,407
$ 137,445,919
Net Investment in Capital Assets
The largest portion of the City's net position (65.1%) reflects its investment in capital assets (e.g., land,
buildings, machinery, equipment, improvements, construction in progress and infrastructure), less any debt
used to acquire those assets that is still outstanding. The City uses these capital assets to provide services
to citizens; consequently, these assets are not available for future spending. Although the City's investment
in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this
debt must be provided from other sources, since the assets themselves cannot be used to liquidate these
liabilities.
Restricted Net Position
A portion of the City's net position, $31.0 million or 26.7% represents resources that are subject to
external restriction on how they may be used.
Unrestricted Net Position
The City reports an unrestricted net position of $9.5 million or 8.2%. This is a decrease of $25.1
million. The decrease is a result of the implementation of GASB Statement No. 75 and the changes
in total OPEB liability.
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
GOVERNMENT -WIDE FINANCIAL ANALYSIS (continued)
The following table provides a summary of the City's operations for the year ended September 30, 2018,
with comparative data total for the year ended September 30, 2017. Governmental activities increased the
City's net position by $4.2 million as a result of operations, and Business -type activities increased net
position by $1.5 million as a result of operations.
Statement of Activities
The following table provides a summary of the City's changes in net position:
CHANGES IN NET POSITION
For the Fiscal Years Ended September 30, 2018 and 2017
Governmental Activities
Business -type
Activities
Total
Revenues
2018
2017
2018
2017
2018
2017
Program revenues:
Charges for Services
$ 8,569,995 $
8,433,091 $
10,109,405
$ 9,594,729
$ 18,679,400 $
18,027,820
Operating grants and
contributions
356,095
1,243,409
-
-
356,095
1,243,409
Capital grants and
contributions
595,260
582,045
126,359
126,359
721,619
708,404
General revenues:
Property taxes
25,413,898
23,857,654
-
-
25,413,898
23,857,654
Other taxes
15,165,838
13,111,468
15,165,838
13,111,468
Industrial payments
14,147,728
14,270,899
-
14,147,728
14,270,899
Investmenteamings
1,228,759
563,868
152,557
110,828
1,381,316
674,696
Miscellaneous
251,508
601,136
-
-
251,508
601,136
Total Revenues
65,729,081
62,663,570
10,388,321
9,831,916
76,117,402
72,495,486
Expenses
General government
15,832,003
15,735,976
15,832,003
15,735,976
Public safety
21,673,188
21,446,421
21,673,188
21,446,421
Public works
9,796,326
4,930,721
9,796,326
4,930,721
Culture and recreation
6,513,794
3,899,678
6,513,794
3,899,678
Health, welfare and sanitation
4,685,795
6,177,554
4,685,795
6,177,554
Interest on long-term debt
1,059,007
2,506,004
-
-
1,059,007
2,506,004
Water services
-
-
8,788,113
6,269,356
8,788,113
6,269,356
Sewer seervices
1,926,133
4,267,901
1,926,133
4,267,901
Airport
-
-
133,093
210,324
133,093
210,324
Total Expenses
59,560,113
54,696,354
10,847,339
10,747,581
70,407,452
65,443,935
Increase in Net Position
Before Transfers
6,168,968
7,967,216
(459,018)
(915,665)
5,709,950 7,051,551
Transfers
(1,922,963)
(2,397,175)
1,922,963
2,397,175
Change in Net Position
4,246,005
5,570,041
1,463,945
1,481,510
5,709,950 7,051,551
Net position, Beginning
95,482,215
89,912,174
41,963,704
40,482,194
137,445,919 130,394,368
Change in accounting policies/standards
(23,776,797)
(3,216,665)
(26,993,462)
Net Position, Ending $ 75,951,423 $ 95,482,215 $ 40,210,984 $ 41,963,704 $ 116,162,407 $ 137,445,919
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
GOVERNMENT -WIDE FINANCIAL ANALYSIS (continued)
The government's total net position as a result of operations increased by $5.7 million during the current
fiscal year. Charges for services represented 25% of total revenues, property taxes and industrial payments
were 52% of total revenues, sales taxes and other taxes were 20%, the remaining revenues accounted for
4% of total revenues. On the expense side, public works expenses were 14%1% of the total, while public
safety was 31%13% and general government was 22%. Water and wastewater, surface water and solid
waste collection expenses were 15% of total expenses. Interest on long term debt was 2% of total expenses.
GOVERNMENTAL ACTIVITIES
A comparison of program expenses to program revenues and revenues by source for governmental activities
follows:
Ilf;;'Xpein and lU:)irogiraim UIlip ,,,, Governmental Activities
$2 a, 000, 000
41.0, 000, 000
$1.5,000,000
$1.0, 000, 000
a
45, 000, 000 IIIIIIIIIIII
General Public safety Public works Culture and lealth, welfare Interest on sang
government recreation and sanitation terns debt:
IN I::ixpenses IIIIIII Revenues
12
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CITY OF LA PORTE
MANAGEMENT'SDISCUSSIONAND ANALYSIS (continued)
GOVERNMENTAL ACTIVITIES (continued)
Revenues sources for governmental activities were distributed as follows:
Revenue lby Souirce
Investment ea
2%
Operating grants and
0%
Capital grants and
1%
lii Charges for Sentices ill Operating grants and Capital grants and Property taxes
lilt Other taxes ill Industrial Iaayrnents investirnenteannings il, Miscellaneous
For the year ended September 30, 2018, revenues without transfers in the governmental activities totaled
$65.7 million. This represents an increase of approximately $3.1 million or 4.9% due primarily to an
increase in sales and other taxes.
13
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
BUSINESS -TYPE ACTIVITIES
Revenues without transfers or interest in the business -type activities totaled $10.4 million, a $556 increase
from the prior year. This increase is due to an increase in charges for services. A comparison between
expenses and program revenues (charges for services) relating to Utility operations follows. Increase in
investment earnings was due to the purchase of new investment securities. Charges for services increased
to an increase in water sales billings.
$3, 000, 000
Expense in n Program lf v inu,,,,, Business iiiness Type Activities
�illl illlllllm
.... ............................. ....
14
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
The City uses fund accounting to ensure and demonstrate compliance with finance -related legal
requirements. As of the close of the current fiscal year, the City's governmental funds reported combined
ending fund balances of $88.6 million, an increase of $6.6 million from the prior year. This increase is due
to an increase in property taxes and cost containment.
As noted earlier, fund accounting is used to demonstrate and ensure compliance with finance -related legal
requirements.
Governmental Funds - The focus of the City's governmental funds is to provide information of near -term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's
financing requirements. In particular, unassigned fund balance may serve as a useful measure of the City's
net resources available for spending at the end of the fiscal year.
The focus of the City's governmental funds it to provide information on near- term inflows, outflows and
balances of spendable resources. Such information is useful in assessing the City's financing requirements.
In particular, unassigned fund balance may serve as a useful measure of a government's net resources
available for spending at the end of the fiscal year.
The General fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned
fund balance of the general fund was $46.8 million, an increase of $6.3 million due to an increase in revenue
collections and cost containment. As a measure of the general fund's liquidity, it may be useful to compare
both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance
represents 117% of total general fund expenditures and total fund balance represents 118% of the same.
The Debt Service fund has a total fund balance of approximately $4.4 million, all of which is restricted for
the payment of debt service. The net increase in fund balance from the prior year of $515 thousand was
due to an increase in property tax revenue.
The 2017 Certificate of Obligation Bonds Fund had a total fund balance of approximately $10.3 million,
all of which is restricted for capital projects. The net decrease in fund balance from the prior year of $127
thousand was due to the expenditures related to public works.
The Tax Increment Reinvestment Zone Fund had a total fund balance of approximately $1.3 million, all of
which is restricted for capital projects. The net increase in fund balance from the prior year of $426
thousand was due to an increase in property tax revenue.
Proprietary Funds. The City's proprietary funds provide the same type of information found in the
government -wide financial statements.
Unrestricted net position of the respective proprietary funds are Utility - $4.8 million, La Porte Area Water
Authority - $7.3 million and Airport - $2.2 million. The changes in net position of the proprietary funds
for 2018 were as follows: Utility — increase of $2.0 million, La Porte Area Water Authority — decrease of
$448 thousand and Airport — decrease of $68 thousand. Increase in the Utility Fund is due to an increase
in water sales billings. The decrease in the La Porte Area Water Authority is due to an increase in operating
expenses, specifically water purchases and a true -up of water purchase cost.
15
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
General Fund Budgetary Highlights
Actual revenues exceeded the final General Fund budgeted revenues by $4.0 million. The two major drivers
were sales and use taxes exceeded budget by $1.3 million, property taxes and industrial payments exceeded
budget by $792 thousand and $773 thousand respectively.
The total appropriations exceeded expenditures by $2.7 million, the majority of which can be attributed to
three departments. General government had a positive variance of $1.7 million, public safety had a positive
variance of $707 thousand and culture and recreation had a positive variance of $253 thousand.
Capital Asset and Debt Administration
Capital Assets. The City's investment in capital assets for its governmental and business -type activities
as of September 30, 2018, amounts to $111.2 million (net of accumulated depreciation). This investment
in capital assets includes land, buildings, roads, park facilities, water and wastewater plants and service
lines, machinery and equipment, and construction in progress. The total decrease in the City's investment
in capital assets for the current fiscal year was approximately $6.9 million. The following table shows
capital assets activity for the 2018 fiscal year:
SCHEDULE OF CAPITAL ASSETS
(net of depreciation)
Governmental Activities
Business -type Activities
Total
2018
2017
2018
2017
2018
2017
Land
$ 10,387,209 $
10,387,209 $
447,791 $
447,791
$ 10,835,000 $
10,835,000
Construction in progress
2,445,613
12,655,665
2,035,288
2,287,458
4,480,901
14,943,123
Infrastructure
22,014,466
13,724,090
-
-
22,014,466
13,724,090
Buildings and improvements
33,792,544
35,861,538
27,449,863
28,827,546
61,242,407
64,689,084
Machinery and equipment
10,352,446
11,649,431
2,267,026
2,219,829
12,619,472
13,869,260
Totals
$ 78,992,278 $
84,277,933 $
32,199,968 $
33,782,624
$ 111,192,246 $
118,060,557
Major capital asset events during the current year include the reporting of a drainage master plan study.
Construction in progress at year-end represents ongoing projects; to include various water and sewer
projects. Additional information on capital assets activity can be found on pages 52 — 53 in the notes to the
financial statements.
16
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
LONG-TERM DEBT
At the end of the current fiscal year, the City had total bonded debt outstanding of $39.6 million. This
amounts is backed by the full faith and credit of the City.
The City of La Porte maintains an "Aa2", "AA", and "AA" by Moody's, Standard and Poor's, and Fitch,
respectively, for general obligation debt.
Additional information on long-term debt activity can be found on pages 54 — 56 in the notes to the financial
statements.
SCHEDULE OF LONG-TERM LIABILITIES
Governmental
Business -type
Total
Activities
Activities
Activities
2018
2017
2018
2017
2018
2017
General Obligation Bonds
18,895,000 $
21,090,000
$ 18,895,000 $
21,090,000
Certificates of Obligation
20,670,000
21,845,000
20,670,000
21,845,000
Premium on Issuance
1,335,219
1,481,277
1,335,219
1,481,277
Developer Agreements
5,722,791
6,503,334
5,722,791
6,503,334
Compensated Absences
3,246,904
2,924,755
143,999
156,940
3,390,903
3,081,695
Net Pension Liability -TNIRS
10,341,647
19,342,457
1,197,227
2,099,132
11,538,874
21,441,589
Net Pension Liability -TESRS
156,731
227,199
-
-
156,731
227,199
Total OPEB Liability
42,778,506
13,870,274
5,767,733
1,859,722
48,546,239
15,729,996
Totals
$ 103,146,798 $
87,284,296 $
7,108,959 $
4,115,794
$ 110,255,757 $
91,400,090
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The unemployment rate for the City of La Porte is currently 4.6 percent which is a decrease from the rate
of 5.8 percent a year ago. This is slightly higher than the state's average unemployment rate of 3.8 percent
which is more than the national average of 3.7 percent.
During the upcoming year, the City will have no increase in the tax rate, no utility fund rate increase, and
will have merit pay and meet and confer increases for non -civil service and civil service employees in the
amount of $732,612. The capital projects include $1.8 million for park and maintenance improvements,
$650,000 for private fiber optic lines, $1.8 million for utility improvements, $10.3 million for utility
improvements funded by bond issue, $1.2 million for street improvements, $922,000 for drainage
maintenance improvements and $433,000 for East Main Street sidewalk project. Also in fiscal year 2019
are included vehicle replacement for $664,590, a $1.2 million transfer from the General Fund for capital
improvements and a $2.0 million transfer from the General Fund for health insurance.
17
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CITY OF LA PORTE
MANAGEMENT'S DISCUSSIONAND ANALYSIS (continued)
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES (continued)
Overall the upcoming General Fund budget represents a decrease of $578,626 from the current year
estimated expenditures. Additionally, an $866,856 surplus is projected for the General Fund. As shown
below, our property values and sales taxes continue to increase
The trend for total assessed values has fluctuated slightly over the past five years resulting in a total increase
of 19% .
Assessed IPirolp irtyValuGiro Ibillions)
$15
$14
$33
$12
$11
$10
$2.9
$2.8
$23
$2.6
$2.5
Salley tax it venu es Giro it millions)
$1!,�.,o
$14.0
$110
$12„0
$11.0
$10.0
$9.0
„0
$7.0
$6.0
$5.0
201!15 2016 2017
REQUESTS FOR INFORMATION
WM
um
This financial report is designed to provide a general overview of the City of La Porte's finances for all
those with an interest in the City's finances. Questions concerning this report or requests for additional
financial information should be directed to the Director of Finance, 604 West Fairmont Parkway, La Porte,
Texas 77571.
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BASIC FINANCIAL STATEMENTS
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Exhibit A-1
CITY OF LA PORTE
STATEMENT OF NET POSITION
September 30, 2018
Governmental
Business -type
Activities
Activities
Total
Assets
Cash and cash equivalents
$ 62,169,992
$ 7,914,156
$ 70,084,148
Investments
34,849,769
6,800,863
41,650,632
Receivables, net allowance for uncollectable
4,943,853
1,223,470
6,167,323
Due from other government
2,556,291
-
2,556,291
Inventories
167,819
13,200
181,019
Capital assets:
Capital assets not subject to depreciation
12,832,822
2,483,079
15,315,901
Capital assets, net of accumulated depreciation
66,159,456
29,716,889
95,876,345
Total capital assets, net
78,992,278
32,199,968
111,192,246
Total Assets
183,680,002
48,151,657
231,831,659
Deferred Outflows of Resources
Deferred charge on refunding
801,301
-
801,301
Deferred outflows - OPEB
3,053,571
411,574
3,465,145
Deferred outflows related to TMRS pensions
2,468,138
285,730
2,753,868
Deferred outflows related to TESRS pensions
57,336
-
57,336
Total Deferred Outflows
6,380,346
697,304
7,077,650
Liabilities
Accounts payable
6,160,107
366,895
6,527,002
Accrued liabilities
513,216
53,536
566,752
Unearned revenue
17,550
1,709
19,259
Customer deposits
-
616,778
616,778
Other liabilities
43,403
-
43,403
Long-term liabilities:
Due within one year
3,897,354
7,728
3,905,082
Due in more than one year
45,972,560
136,271
46,108,831
Net pension liability
10,498,378
1,197,227
11,695,605
Total OPEB liability
42,778,506
5,767,733
48,546,239
Total Liabilities
109,881,074
8,147,877
118,028,951
Deferred Inflows of Resources
Deferred inflows - pension
4,194,526
485,590
4,680,116
Deferred inflows - OPEB
33,325
4,510
37,835
Total Deferred Outflows
4,227,851
490,100
4,717,951
Net Position
Net Investment in capital assets
43,421,145
32,199,968
75,621,113
Restricted for:
Debt service
5,482,613
-
5,482,613
Economic development
6,855,654
6,855,654
Senior citizen programs
10,543
10,543
Replacement of trees
576,940
576,940
Municipal court building & technology
478,343
478,343
Park improvements
260,794
260,794
Public safety
1,531,944
1,531,944
Public works
2,882,710
2,882,710
Other
224,776
224,776
Capital projects
12,720,767
-
12,720,767
Unrestricted
1,505,194
8,011,016
9,516,210
Total Net Position
$ 75,951,423
$ 40,210,984
$ 116,162,407
See Notes to Financial Statements.
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CITY OF LA PORTE
STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2018
Functions/Programs
Governmental activities:
General government
Public safety
Public works
Culture and recreation
Health, welfare and sanitation
Interest on long-term debt
Total governmental activities
Business -type activities:
Water services
Sewer services
Airport
Total business -type activities
Total Primary Government
General revenues:
Taxes:
Property taxes
Sales and use taxes
Industrial payments
Franchise taxes
Unrestricted Investment earnings
Miscellaneous
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position, beginning
Prior period adjustment
Net Position, Ending
See Notes to Financial Statements.
Revenues
Operating Capital Grants
Charges for Grants and and
Expenses Services Contributions Contributions
S 15,832,003
S 3,397,779 S
- S 57,474
21,673,188
1,125,345
352,886 -
9,796,326
267,358
2,559 537,786
6,513,794
1,547,786
650 -
4,685,795
2,231,727
-
1,059,007
-
- -
59,560,113
8,569,995
356,095 595,260
8,788,113 8,726,710 126,359
1,926,133 1,320,816 -
133,093 61,879 -
10,847,339 10,109,405 126,359
S 70,407,452 S 18,679,400 S 356,095 S 721,619
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Exhibit A-2
Net (Expense) Revenues and
Changes in Net Position
Primary Government
Governmental Business -type
Activities Activities Total
$ (12,376,750) $
S (12,376,750)
(20,194,957)
(20,194,957)
(8,988,623)
(8,988,623)
(4,965,358)
(4,965,358)
(2,454,068)
(2,454,068)
(1,059,007)
(1,059,007)
(50,038,763)
(50,038,763)
64,956 64,956
(605,317) (605,317)
(71,214) (71,214)
(611,575) (611,575)
(50,038,763) (611,575) (50,650,338)
25,413,898
25,413,898
12,544,803
12,544,803
14,147,728
14,147,728
2,621,035
-
2,621,035
1,228,759
152,557
1,381,316
251,508
-
251,508
(1,922,963)
1,922,963
-
54,284,768
2,075,520
56,360,288
4,246,005
1,463,945
5,709,950
95,482,215
41,963,704
137,445,919
(23,776,797)
(3,216,665)
(26,993,462)
$ 75,951,423
S 40,210,984
$ 116,162,407
23
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Assets
Current Assets:
Cash and cash equivalents
Investments
CITY OF LA PORTE
BALANCE SHEET
GOVERNMENTAL FUNDS
September 30, 2018
24,2245,916 4,140,071
22,2223,324 68,470
2017
Certificate of Tax Increment
Obligation Reinvestment
10,513,492 3,861,715
Receivables, net of allowance for uncollectible
5,622,240
233,658
-
Due from other funds
137,490
-
-
-
Inventories
122,784
-
-
-
Total Assets $
52,351,754 $
4,442,199
$ 10,513,492 $
3,861,715
Liabilities:
Accounts payable
1,2222,543
-
125,076
2,568,969
Accrued liabilities
497,128
-
-
-
Due to other funds
-
-
137,490
-
Unearned revenues
-
-
350
-
Other payables
933,693
-
-
-
Total Liabilities
2,653,364
-
262,916
2,568,969
Deferred Inflows of Resources
Unavailable revenue - property taxes
251,995
43,735
-
-
Unavailable revenue - fines and fees
752,446
-
-
Unavailable revenue - EMS
395,347
-
-
-
Unavailable revenue - other
991,529
-
-
-
Total Deferred Inflows of Resources
2,391,317
43,735
-
-
Fund Balances:
Nonspendable:
Inventory
122,784
-
-
-
Restricted for:
Debt service
-
4,398,464
-
-
Economic development
-
-
-
1 92,746
Senior citizen programs
-
-
-
-
Replacement of trees
-
-
-
-
Municipal court building and technology
-
-
-
-
Park improvements
-
-
-
-
Public safety
-
-
-
Capital projects
-
-
10,250,576
-
Public works
-
-
-
-
Other
-
-
-
-
Assigned:
420,854
-
-
-
Unassigned:
46,763,435
-
-
-
Total Fund Balances
47,307,073
4,398,464
10,250,576
1,22,92,746
Total Liabilities, Deferred Inflow of Resources
and Fund Balances $
52,351,754 $
4,442,199
$ 10,513,492 $
3,861,715
See Notes to Financial Statements.
24
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Exhibit A-3
Other
Total
Governmental
Governmental
Funds
Funds
15,598,857
$ 58,360,051
8,984,351
31,276,145
1,495,256
7,351,154
-
137,490
-
122,784
$ 26,078,464 $
97,247,624
738,035 $
4,654,623
4,244
501,372
-
137,490
1,143
1,493
1,500
935,193
744,922
6,230,171
-
295,730
-
752,446
-
395,347
-
991,529
-
2,435,052
-
122,784
1,083,817
5,482,22,81
5,562,908
6,855,654
10,543
10,543
576,940
576,940
478,343
478,343
260,794
260,794
1,531,944
1,531,944
12,720,767
22,971,343
2,882,710
2,882,710
224,776
224,776
-
420,854
-
46,763,435
25,333,542
88,582,401
$ 26,078,464 $ 97,247,624
25
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Exhibit A-4
CITY OF LA PORTE
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
For the Year Ended September 30, 2018
Total fund balance, governmental funds $ 88,582,401
Amounts reported for governmental activities in the statement of net position are different
because:
Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds. 69,423,374
Certain other long-term assets (property taxes, court fines, EMS and other receivables) are not
available to pay current period expenditures and therefore are not reported in this fund financial
statement, but are reported in the governmental activities of the statement of net position. 2,435,052
Some liabilities and deferred outflows and inflows are not due and payable in the current period
and are not included in the fund financial statement, but are included in the governmental activities
of the statement of net position.
Bonds payable
(18,895,000)
Certificates of obligation
(20,670,000)
Premium on bonds
(1,335,219)
Deferred charge on refunding
801,301
Interest payable
(43,403)
Due to developer
(5,722,791)
Compensated absences
(3,215,823)
Deferred inflows/outflows related to pensions
(1,669,052)
Deferred inflows/outflows related to OPEB
3,020,246
Net pension liability
(10,498,378)
Total OPEB liability
(42,778,506)
The assets and liabilities of certain internal service funds are not included in the fund financial
statements but are included in the governmental activities of the Statement of Net Position. 16,517,221
Net Position of Governmental Activities $ 75,951,423
See Notes to Financial Statements.
27
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CITY OF LA PORTE
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGESINFUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended September 30, 2018
2017
Certificate of
Tax Increment
Obligation
Reinvestment
General Fund
Debt Service
Bonds
Zone
Revenues
Taxes:
Property taxes and penalties
$ 18,752,165
$ 3,435,051
$ -
$ 3,090,987
Other taxes
90,936
-
-
-
Licenses and permits
668,808
-
-
-
Fines and forfeitures
1,867,095
-
-
-
Sales and use taxes
5,830,345
-
-
Industrial payments
14,147,728
-
-
-
Franchise taxes
2,621,035
-
-
-
Intergovernmental revenues
-
-
-
-
Investment Earnings
652,760
29,595
181,549
1,004
Charges for services
5,686,2223
-
-
-
Miscellaneous
258,020
-
-
-
Total revenues
50,575,115
3,464,646
181,549
3,091,991
Expenditures
Current:
General government
9,856,786
-
-
2,665,515
Public safety
18,071,966
-
-
-
Public works
3,242,618
-
308,972
-
Health and sanitation
2,871,114
-
-
-
Culture and recreation
6,033,177
-
-
-
Capital outlay
-
-
-
-
Debt service:
Principal
-
3,370,000
-
-
Interest and fiscal charges
-
1,156,923
-
-
Total expenditures
40,075,661
4,526,923
308,972
2,665,515
Excess (Deficiency) of Revenues
Over (Under) Expenditures
10,499,454
(1,062,22,77)
(127,423)
426,476
Other Financing Sources (Uses)
Transfers in
57,500
1,577,604
-
-
Transfers out
(6,149,445)
-
-
-
Total Other Financing Sources (Uses)
(6,091,945)
1,577,604
-
-
Net Change in Fund Balance
4,407,509
515,327
(127,423)
426,476
Fund Balances, Beginning (as restated)
42,899,564
3,883,137
10,377,999
866,270
Fund Balances, Ending
$ 47,307,073
$ 4,398,464
$ 10,250,576
$ 1,292,746
See Notes to Financial Statements.
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Exhibit A-5
Other
Governmental
Funds
Total
Governmental
Funds
$ -
$ 25,278,203
-
90,936
-
668,808
225,324
2,092,419
6,623,522
12,453,867
-
14,147,728
-
2,621,035
893,006
893,006
292,535
1,157,443
267,358
5,953,581
40,772
298,792
8,342,517
65,655,818
1,964,649
14,486,950
305,838
18,377,804
877,788
4,429,378
-
2,871,114
298,884
6,332,061
3,428,834
3,428,834
-
3,370,000
-
1,156,923
6,875,993
54,453,064
1,466,524 11,202,754
3,565,200 5,200,304
(3,700,304) (9,849,749)
(135,104) (4,649,445)
1,331,420 6,553,309
24,002,122 82,029,092
$ 25,333,542 $ 88,582,401
29
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Exhibit A-6
CITY OF LA PORTE
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2018
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balance -total governmental funds. $ 6,553,309
Governmental funds report capital outlays as expenditures. However in the statement of activities
the cost of those assets is allocated over their estimated useful lives and reported as depreciation
expense. This is the amount by which depreciation ($7,992,522) exceeded capital outlay
($2,037,151). (5,955,371)
Governmental funds do not present revenues that are not available to pay current obligations. In
contrast, such revenues are reported in the Statement of Activities when earned.
(54,400)
The issuance of long-term debt (e.g., bonds, leases, certificates of obligation) provides current
financial resources to governmental funds, while the repayment of the principal of long-term debt
consumes the current financial resources of governmental funds. Neither transaction, however, has
any effect on net assets. Also governmental funds report the effect of issuance costs, premiums,
discounts, and similar items when debt is first issued, whereas these amounts are deferred and
amortized in the statement of activities. These differences are as follows:
The payment of long-term debt. 3,370,000
Some expenses reported in the statement of activities do not require the use of current financial
resources are therefore are not reported as expenditures in governmental funds. This adjustment
reflects the net change in:
Interest payable
70,071
Deferred outflows related to pensions
(5,124,361)
Deferred inflows related to pensions
(3,478,710)
Net pension liability
9,071,278
Deferred outflows related to OPEB
3,053,571
Deferred inflows related to OPEB
(33,325)
Total OPEB liability
(4,841,931)
Compensated absences payable
(291,068)
Deferred charges on refunding
(118,213)
Amortization of bond premiums
146,058
Payment to developer
1,552,645
The net income (loss) of certain activities of internal service funds is reported with governmental
activities.
326,452
Change in Net Position of Governmental Activities
$ 4,246,005
See Notes to Financial Statements.
30 �u,�„
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ExhibitA-7
CITY
OF LA PORTE
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
September 30, 2018
Business -Type Activities - Enterprise Funds
Governmental
Total
Activities -
Enterprise
Internal Service
Utility
LPAWA
Airport
Funds
Funds
Assets
Current Assets:
Cash and cash equivalents
6,271,455
1,450,718
191,983
$ 7,914,156
$ 3,809,941
Investments
5,289,762
1,334,498
176,603
6,800,863
3,573,624
Other receivables, net of allowance
-
-
-
-
29,063
Due from other governments
-
-
119,927
Inventories
13,200
-
-
13,200
45,035
Accounts receivable, net of allowance
for doubtful accounts
1,064,638
117,200
15,864
1,197,702
-
Accrued interest receivable
20,044
5,055
669
25,768
-
Total Current Assets
12,659,099
2,907,471
385,119
15,951,689
7,577,590
Noncurrent Assets:
Capital assets:
Iand and Improvements
224,308
223,483
447,791
60,914
Construction in progress
2,016,038
19,250
2,035,288
-
Buildings and improvements
156,649
-
5,758,420
5,915,069
Improvements other than buildings
69,694,844
15,429,680
-
85,124,524
-
Vehicles and equipment
4,268,046
47,371
4,315,417
20,172,898
Less accumulated depreciation
(50,490,548)
(10,954,418)
(4,193,155)
(65,638,121)
(10,664,908)
Total Noncurrent Assets
25,869,337
4,522,633
1,807,998
32,199,968
9,568,904
Total Assets
38,528,436
7,430,104
2,193,117
48,151,657
17,146,494
Deferred Outflows
Deferred outflows related to pensions 285,730 285,730
Deferred outflows related to OPEB 411,574 411,574
Total Deferred Outflows 697,304 697,304
Liabilities
Current liabilities
Accounts payable
274,688
88,087 2,620
365,395
23,442
Accrued liabilities
53,536
- 1,500
55,036
11,844
Unearned revenue
-
1,709
1,709
16,057
Customer deposits
616,778
-
616,778
-
Claims and judgments
-
-
546,849
Long -Term Debt, Current Portion
Compensated absences
7,728
- -
7,728
-
Total Current Liabilities
952,730
88,087 5,829
1,046,646
598,192
Noncurrent Liabilities:
Compensated absences
136,271
- -
136,271
31,081
Net pension liability
1,197,227
1,197,227
-
Net OPEB liability
5,767,733
5,767,733
-
Total Noncurrent Liabilities
7,101,231
-
7,101,231
31,081
Total Liabilities
8,053,961
88,087 5,829
8,147,877
629,273
Deferred Inflows of Resources
Deferred inflows related to pensions 485,590 485,590
Deferred inflows related to OPEB 4,510 4,510
Total Deferred Inflows of Resources 490,100 490,100
Net Position
Net Investment in capital assets 25,869,337 - - 25,869,337 9,568,904
Unrestricted 4,812,342 7,342,017 2,187,288 14,341,647 6,948,317
Total Net Position $ 30,681,679 $ 7,342,017 $ 2,187,288 $ 40,210,984 $ 16,517,221
See Notes to Financial Statements
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Exhibit A-8
CITY OF LA PORTE
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For the Year Ended September 30, 2018
Business -Type Activities - Enterprise Funds
Governmental
Total Activities -
Enterprise Internal Service
Utility LPAWA Airport Funds Funds
Operating Revenues
Charges for services 8,726,710 1,320,816 61,879 $ 10,109,405 $ 8,960,422
Miscellaneous - - - - 283
Total Operating Revenues 8,726,710 1,320,816 61,879 10,109,405 8,960,705
Operating Expenses
Personnel
3,692,028
-
(4,475)
3,687,553
1,060,222
Supplies and materials
360,235
15,432
3,736
379,403
194,937
Purchased water
-
1,338,757
-
1,338,757
-
Other services
2,487,431
107,600
20,038
2,615,069
8,443,910
Depreciation
2,062,394
466,374
113,794
2,642,562
1,787,299
Total Operating Expenses
8,602,088
1,928,163
133,093
10,663,344
11,486,368
Operating Income (Loss)
124,622
(607,347)
(71,214)
(553,939)
(2,525,663)
Non -Operating Revenues (Expenses)
Investment earnings (loss)
114,968 33,178 4,411
152,557
71,316
Gain/loss on disposal of capital
assets
(186,025) - -
(186,025)
(1,127)
Total Non -Operating Revenues
(71,057) 33,178 4,411
(33,468)
70,189
Income (Loss) Before
Contributions and Transfers
53,565 (574,169) (66,803)
(587,407)
(2,455,474)
Contributions and Transfers
Capital contributions
-
126,359
126,359
57,474
Transfers from other funds
2,000,000
-
-
2,000,000
2,745,037
Transfer (to) other funds
(74,201)
-
(806)
(75,007)
(20,585)
Total Contributions and
Transfers
1,925,799
126,359
(806)
2,051,352
2,781,926
Change in Net Position
1,979,364
(447,810)
(67,609)
1,463,945
326,452
Net position, beginning
31,921,294
7,789,827
2,252,583
41,963,704
16,190,769
Prior period adjustment
(3,218,979)
2,314
(3,216,665)
-
Net position, Ending
$ 30,681,679
$ 7,342,017
$ 2,187,288
$ 40,210,984 $
16,517,221
See Notes to Financial Statements
32
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Exhibit A-9 (Page 1 of 2)
CITY OF LA PORTE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended September 30, 2018
Cash Flows from Operating Activities
Receipts from customers and users
Disbursed for personnel services
Disbursed for good and services to suppliers
Net Cash Provided (Used) by Operating Activities
Cash Flows From Noncapital Financing Activities
Transfers from other funds
Transfer to other funds
Net Cash Provided (Used) by Noncapital Financial
Activities
Cash Flows from Capital & Related Financing Activities
Proceeds from the sale of equipment
Acquisition and construction of capital assets
Net Cash Provided (Used) by Capital & Related Financing
Activities
Cash Flows from Investing Activities
Purchase of investments
Interest Received
Sales of investments
Net Cash Provided (Used) by Investing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and cash equivalents, beginning
Cash and Cash Equivalents, Ending
See Notes to Financial Statements.
Business -type Activities - Enterprise Funds
Governmental
Total Activities -
Enterprise Internal Service
Utility LPAWA Airport Funds Funds
$ 8,691,248 $ 1,302,635 $
58,987
$ 10,052,870 $
8,954,516
(3,369,992) -
(5,211)
(3,375,203)
(1,070,074)
(2,818,399) (1,473,765)
(26,832)
(4,318,996)
(8,630,933)
2,502,857 (171,130)
26,944
2,358,671
(746,491)
2,000,000
- 2,000,000
2,745,037
(74,201)
(806) (75,007)
(20,585)
1,925,799
(806) 1,924,993
2,724,452
(818,685)
- (818,685)
25,500
(820,961)
(818,685)
(818,685)
(795,461)
(3,607,179)
(323,949)
(72,457)
(4,003,585)
71,316
103,740
31,329
4,140
139,209
(1,728,857)
1,013,549
255,697
33,838
1,303,084
686,399
(2,489,890)
(36,923)
(34,479)
(2,561,292)
(971,142)
1,120,081 (208,053) (8,341) 903,687 211,358
5,151,374 1,658,771 200,324 7,010,469 3,598,583
$ 6,271,455 $ 1,450,718 $ 191,983 $ 7,914,156 $ 3,809,941
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ExhibitA-9 (Page 2 of2)
CITY OF LA PORTE
STATEMENT OF CASH FLOWS
PROPRIETARYFUNDS
For the Year Ended September 30, 2018
Reconciliation of Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities
Operating income (loss)
Adjustments to reconcile operating income to net cash
used by operating activities:
Depreciation
(Increase) decrease in accounts receivable
(Increase) in inventories
Increase (decrease) in accounts payable
Increase (decrease) in deferred outflow -pensions
Increase (decrease) in deferred outflow-OPEB
Increase (decrease in accrued liabilities
Increase (decrease) in unearned revenue
Increase (decrease) in customer deposits
Increase (decrease) in claims
Increase (decrease) in compensated absences
Increase (decrease) in net pension liability
Increase (decrease) in net OPEB liability
(Increase) decrease in deferred inflow -pensions
(Increase) decrease in deferred inflow-OPEB
Net Cash Provided (Used) by Operating Activities
Noncash Investing, Capital and Financing Activities:
Capital asset contributions from governmental funds
See Notes to Financial Statements.
Business -type Activities - Enterprise Funds
Utility
$ 124,622
Governmental
Total Enterprise Activities - Internal
LPAWA Airport Funds Service Funds
$ (607,347) $ (71,214) $ (553,939) $
(2,525,663)
2,062,394
466,374
113,794
2,642,562
1,787,299
(46,283)
(18,181)
(4,601)
(69,065)
(12,155)
(6,600)
(6,600)
(7,126)
35,867
(11,976)
(3,058)
20,833
(61,147)
530,479
5,878
536,357
(372,496)
-
(372,496)
-
(1,350)
-
(1,350)
(335)
-
1,709
1,709
5,966
10,821
-
10,821
-
-
-
76,187
(12,941)
(12,941)
(9,517)
(886,895)
(15,009)
(901,904)
652,267
-
652,267
408,462
(555)
407,907
4,510
-
4,510
$ 2,502,857
$ (171,130) $
26,944
$ 2,358,671 $
(746,491)
34 �u,�„
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENT
Note 1 - Summary of Significant Accounting Policies
The City of La Porte, Texas (the "City") was incorporated under the laws of the State of Texas on
August 10, 1892. The City operates under a "Council -Manager" form of government and provides the
following services as authorized by its charter: public safety, development services, public health and
welfare, culture and recreation and waterworks.
The accounting and reporting policies of the City relating to the funds included in the accompanying basic
financial statements conform to U.S. generally accepted accounting policies (GAAP) applicable to state
and local governments which include the principles prescribed by the Governmental Accounting Standards
Board (GASB), the American Institute of Certified Public Accountants and the Financial Accounting
Standards Board. The more significant accounting policies of the City are prescribed below.
A. Reporting Entity
The City's basic financial statements include the accounts of all City operations. The City, with its elected
governing body of mayor and eight council members, is considered a primary government. As required by
GAAP, the basic financial statements include the City and its component units, entities for which the
government is considered to be financially accountable. Blended component units, although legally separate
entities, are in substance, part of the government's operations. All component units have been included as
blended component units because of the significance of their operations and financial relationships with the
City.
The La Porte Area Water Authority (the "Authority") is governed by a five -member board appointed by
the City Council. Although it is a legally separate entity, the Authority provides services almost exclusively
for the City's water operations, and is in substance a part of the City's primary operations. The Authority
was created by the City to finances the operations involved in obtaining surface water supplies and
converting these supplies to potable water. This water is sold primarily to the City of La Porte (86%) with
the remainder being sold to other neighboring political subdivisions. The operations of the Authority are
reported as a proprietary fund type.
The Tax Increment Reinvestment Zone (the "Zone") is governed by a nine -member board appointed by the
City Council. The Zone provides benefits exclusively for the City through reinvestment financing of ad
valorem taxes, which are utilized for capital improvements for the City of La Porte. The Zone is presented
as a governmental fund type.
The Section 4B Sales Tax Corporation provides services that exclusively benefits the City of La Porte and
is governed by a seven -member board appointed by City Council. The Section 4B Sales Tax Corporation
is presented as a governmental fund type.
The Emergency Service District provides public safety services exclusively to the city of La Porte. The
Emergency Services District is governed by a seven member board appointed by City Council. The district
is a governmental fund type.
The Street Maintenance Component Unit provides infrastructure improvements exclusively to the City of
La Porte. City Council directs staff operations through the annual budget process.
Complete financial statements for each of the individual component units may be obtained through the City
of La Porte.
35
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
B. Government -wide Financial Statements
The government -wide financial statements (i.e., the Statement of Net Position and the Statement of
Activities) report information about the City as a whole. The governmental activities column incorporates
data from governmental funds and internal service funds, while business -type activities incorporate data
from the City's enterprise funds. Separate financial statements are provided for governmental funds and
proprietary funds.
As a general rule, the effect of interfund activity has been eliminated from the government -wide financial
statements. Exceptions to this general rule are payments for interfund services provided and other charges
between the City's various other functions. Elimination of these charges would distort the direct costs and
program revenues reported for the various functions concerned
C. Fund Financial Statements
The fund financial statements provide information about the City's funds and blended component units.
Separate statements for each fund category — governmental and proprietary — are presented. The emphasis
of fund financial statements is on major governmental and enterprise funds, each displayed in a separate
column. All remaining governmental funds are aggregated and reported as nonmajor funds. Major
individual governmental and enterprise funds are reported as separate funds in the fund financial statements.
The City reports the following major Governmental Funds:
General Fund
The General Fund is used to account for all financial transactions that are not accounted for in another fund.
The principal sources of revenues of the General Fund are property taxes, sales and use taxes, franchise
taxes, licenses and permits, and fines and forfeitures. Expenditures are for general government, public
safety, public works and other community services.
Debt Service Fund
The Debt Service Fund is used to account for the payment of interest and principal on all general long-term
debt of the City except for capital leases for which are accounted for in the General Fund. The primary
source of revenue for the Debt Service Fund is general property taxes.
2017 Certificate of Obligation Bonds Fund
The 2017 Certificate of Obligation Bonds Fund is used to account for bond proceeds and expenditures of
those funds related to the construction of a wastewater system.
Tax Increment Reinvestment Zone One Fund (TIRZ)
The Tax Increment Reinvestment Zone One Fund (TIRZ) is used to account for the disposition of property
taxes collected on specific parcels within the boundaries of the TIRZ for the exclusive benefit to pay
developers for capital improvements.
36
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
C. Fund Financial Statements (continued)
The City reports the following major Enterprise Funds:
The Utility Enterprise Fund is used to account for operations of the water and sewer services to the
residents of the City. All activities necessary to provide such services are accounted for in this fund,
but not limited to administration, operations and maintenance of the water and sewer system and
billing and collection activities. The fund also accounts for the accumulation of resources for, and
the payment of, long-term debt principal and interest for water and sewer debt. All costs are
financed through charges to utility customers with rates received regularly and adjusted if necessary
to ensure integrity of the fund.
• La Porte Water Authority is used to account for revenues and expenses related to obtaining raw
surface water and converting it to potable water.
• Airport Fund is used to account for financial activities of the airport which includes rentals, grants
and other revenues.
Additionally, the City reports the Internal Service Funds which are used to account for the Motor Pool,
Technology and Insurance service provide to other departments of the City on a cost reimbursement basis.
During the course of operations the City has activity between funds for various purposes. Any residual
balances outstanding at year end are reported as due from/to other funds. While these balances are reported
in fund financial statements, certain eliminations are made in the preparation of the government -wide
financial statements. Balances between the funds included in the governmental activities (i.e., the
governmental and internal service funds) are eliminated so that only the net amount is included as internal
balances in the governmental activities column. Similarly, balances between the funds included in business -
type activities (i.e., the enterprise funds) are eliminated so that only the net amount is included as internal
balances in the business- type activities column.
Further, certain activity occurs during the year involving transfers of resources between funds. In fund
financial statements these amounts are reported at gross amounts as transfer in/out. While reported in fund
financial statements, certain eliminations are made in the preparation of the government -wide financial
statements. Transfers between the funds included in governmental activities are eliminated so that only the
net amount is included as transfers in governmental activities column. Similarly, balances between the
funds included in business -type activities are eliminated so that only the net amount is included as transfers
in the business -type activities column.
D. Measurement Focus and Basis of Accounting
The accounting and financial reporting treatment is determined by the applicable measurement focus and
basis of accounting. Measurement focus indicates the type of resources being measured such as current
financial resources or economic resources. The basis of accounting indicates the timing of transactions or
events for recognition in the financial statements.
37
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
D. Measurement Focus and Basis of Accounting (continued)
The government -wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when
a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as
revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon
as all eligibility requirements imposed by the provider have been meet.
The governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose the City
considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However,
debt service expenditures, as well as expenditures related to compensated absences and claims and
judgements, are recorded only when payment is due. General capital asset acquisitions are reported as
expenditures in governmental funds. Issuance of long-term debt are reported as other financing sources.
Property taxes, sales taxes, franchise taxes, court fines, and interest associated with the current period are
all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal
period. Entitlements are recorded as revenues when all eligibility requirements are met, including any time
requirements, and the amount is received during the period or within the availability period for this revenue
source (within 60 days of year-end). Expenditure -driven grants are recognized as revenue when the
qualifying expenditures have been incurred and all other eligibility requirements have been met, and the
amount is received during the period of availability period for this revenue source (within 60 days of year-
end). All other revenue items are considered to be measurable and available only when cash is received by
the City.
The proprietary funds are reported using the economic resources measurement focus and the accrual basis
of accounting.
E. Cash and Cash Equivalents and Investments
Cash is defined as currency, demand deposits with banks and other financial institutions, and any
other kind of account that has the general characteristics of demand deposits where funds may
be added or withdrawn at any time without penalty or prior notice. Cash equivalents are defined
as liquid investments that are both readily convertible to known amounts of cash and so near
their maturity they present insignificant risk or changes in value because of changes in interest
rates. Only investments with original maturities of three months or less qualify under this
definition.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
E. Cash and Cash Equivalents and Investments (continued)
The City reports all investments at fair -value, except for investment positions in external
investment pools, such as Texas CLASS, TexPool and LOGIC, which are reported at amortized
cost. The Texas CLASS Board of Trustees, which is comprised of active members of the pool
and elected by the participants guided by the Advisory Board, oversees the management of Texas
CLASS. The State Comptroller of Public Accounts oversees TexPool. LOGIC is directed by a
governing board of experienced local government officials, finance directors and treasurers and
is managed by a team of industry leaders that are focused on providing professional investment
services. Federated Investors is the full service provider to the pools managing the assets
providing participant services, and arranging for all custody and other functions in support of the
pool's operations under contract with the Comptroller.
The City's local government investment pools are recorded at amortized costs as permitted by
GASB Statement No. 79, Certain Investment Pools and Pool Participants.
The City reports all investments, except external investment pools, at fair value based on quoted
market prices at year-end date. The City categorizes fair value measurements of its investments
based on the hierarchy established by generally accepted accounting principles. The fair value
hierarchy, which has three levels, is based on the valuation inputs used to measure an asset's fair
value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are
significant other observable inputs; Level 3 inputs are significant unobservable inputs.
F. Receivables
All receivables are reported at their gross value and, where appropriate, are reduced by the estimated portion
that is expected to be uncollectible.
G.Inventory
Inventories are valued at costs using the first in/first out (FIFO) method. The costs of governmental fund
type inventories are recorded as expenditures when consumed rather than when purchased. A portion of the
fund balance is classified as non -spendable to reflect minimum inventory quantities considered necessary
for the City's continuing operations.
39
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
H. Capital Assets
Capital assets are reported in the applicable governmental or business -type activities column in the
government -wide financial statements. The City defines capital assets with an initial, individual cost of
$5,000 or greater and an estimated useful life in excess of one year.
As the City constructs or acquires capital assets each period, including infrastructure assets, they are
capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs
which are essentially amounts spent in relation to capital assets that do not increase capacity or efficiency
of the item or increase its estimated useful life. Donated capital assets are recorded at acquisition cost,
which is the price that would be paid to acquire an asset with equivalent service potential at the acquisition
date.
Land and construction in progress are not depreciated. The remainder capital assets are depreciated using
the straight line method over the following estimated useful lives.
Asset Description
Estimated
Useful Life
Buildings
20 years
Building improvements
20 years
Infrastructure
20-30 years
Vehicles
4-10years
Machinery and equipment
4-10 years
Water and sewer systems
10-20 years
I. Compensated Absences
The City's employees earn vacation and sick leave, which may either be taken or accumulated, up to a
certain amount, until paid upon termination or retirement. For all funds, this liability reflects amounts
attributable to cumulative employee services already rendered, where the payment is probable and can be
reasonably estimated. The current and long-term portion of the governmental fund type liabilities are
recorded in the government -wide financial statements. A liability for those amounts is recorded in the
governmental funds only if the liability has matured as a result of employee resignations or retirements.
The proprietary fund type liability is recorded as a liability in the individual proprietary funds since payment
will be made from the resources of these funds.
Policies relating to the accrual payment of these benefits are as follows:
• Vacation — Employees earn from 10-25 days of vacation per year. Upon separation, employees are
paid for all accumulated vacation leave (up to one and one half times their annual accrual rate).
Sick leave — Full time 8 hour employees accrued 3.70 hours per pay period. Full time 24 hour
employees accrue 5.91 hours per pay period and civil service employees accrued 15 days per
calendar year. The maximum sick leave time which may be accumulated by any employee shall be
90 days for regular full time employees. For 24 hour shift personnel, the maximum accrual is 1,152
hours. Civil service employees may accrue unlimited sick leave.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
J. Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or
grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net
position and unrestricted — net position in the government -wide and proprietary fund financial statements,
a flow assumption must be made about the order in which the resources are considered to be applied. It is
the City's policy to consider restricted — net position to have been depleted before unrestricted — net position
is applied.
K. Fund Balance Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources
(the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report
as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial
statements a flow assumption must be made about the order in which the resources are considered to be
applied. It is the City's policy to consider restricted fund balance to have been depleted before using any of
the components of unrestricted fund balance. Further, when the components of unrestricted fund balance
can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund
balance. Unassigned fund balance is applied last.
L. Net Position Classifications
Classification of net position includes three components as follows:
• Net investment in capital assets — This component of net position consists of capital assets,
including restricted capital assets, net of accumulated depreciation and reduced by the outstanding
balances of any bonds, notes or other borrowings, premiums, discounts, and deferred outflows of
resources or deferred inflows of resources from a refunding.
• Restricted — This component of the net position consists of constraints placed on net asset use
through external constraints imposed by creditors, grantors, contributors, or laws or regulations of
other governments or constraints imposed by law through contractual provisions or enabling
legislation.
• Unrestricted net position — This component of net position consists of net position that do not meet
the definition of "restricted" or "net investment in capital assets."
• Unrestricted net position — This component of net position consists of net position that do not meet
the definition of "restricted" or "net investment in capital assets."
41
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
M. Fund Balance
Fund balance of governmental funds is reported in various categories based on the nature of any limitations
requiring the use of resources for specific purposes. The City itself can establish limitations on the use of
resources through either comment (committed fund balance) or an assignment (assigned fund balance).
The committed fund balance classification includes amounts that can be used only for specific purposes
determined by a formal action of the City Council, highest level of decision -making -authority. The City
Council is the highest level of decision -making- authority for the City that can, by adoption of a resolution
prior to the end of the fiscal year, commit fund balance. Once, adopted, the limitation imposed by the
resolution remains in place until a similar action is taken (the adoption of another resolution) to remove or
revise the limitation.
Amount in the assigned fund balance classification are intended to be used by the City for specific purposes,
but do not meet the criteria to be classified as committed. The City Council has by resolution authorized
the City Manager under the authorization of the Fiscal Affairs Committee to assign fund balance. The City
Council may also assign fund balance as it does when appropriating fund balance to cover a gap between
estimated revenues and appropriations in the subsequent year's appropriated budget. Unlike commitments,
assignments generally only exist temporarily. In other words, an additional action does not normally have
to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is
essential to either remove or revise a commitment.
The City strives to maintain a minimum reserve balance of 90 to 120 days for the General Fund and Utility
Fund, and 60 to 90 days of operating expenditures in all other funds as outlined in the City's Financial
Management Policies as adopted by City Council by resolution.
N. Program Revenues
Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use,
or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants
and contributions that are restricted to meeting the operational or capital requirements of a particular
function or segment. All taxes, including those dedicated for specific purposes, and other internally
dedicated resources are reported as general revenues rather than program revenues.
O. General and Debt Service Property Taxes
All taxes due to the City on real or personal property are payable at the Office of the City Assessor -Collector
and may be paid at any time after the tax rolls for the year have been completed and approved, which is
October 1, or as soon thereafter as practicable. Taxes are due upon receipt and all taxes not paid prior to
February 1 are deemed delinquent and are subject to such penalty and interest set forth by the Property Tax
Code. All property located within the City limits on the first day of January of each year are charged with
a special lien in favor of the City from such date for taxes due thereon.
The ad valorem tax rate is allocated each year between the General Fund and the Debt Service Fund. The
full amount estimated to be required for debt service on the general obligation debt is provided by the debt
service tax together with interest earned in the Debt Service Fund.
42
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mu ����
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
P. Industrial Payments
A significant portion of the City's revenue is derived from separate contractual agreements with each
industrial company that lies within the City's extraterritorial jurisdiction (known as the "industrial district").
These companies have agreed to pay an amount "in -lieu of taxes" in the un-annexed area within the City's
extraterritorial jurisdiction. In the current contracts, the entity's agree to pay the City a percentage of what
the ad valorem taxes would have been had the entities land, improvements, and inventory been within the
corporate limits of the City.
Q. Proprietary Funds Operating and Non -operating Revenues and Expenses
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with the proprietary fund's principal ongoing operations. The principal operating revenues of
the enterprise funds are charges to customers for sales and services. Operating expenses for the enterprise
funds and internal service fund include the cost of sales and services, administrative expenses and
depreciation on capital assets. All revenues not meeting this definition are reported as non -operating
revenues and expenses.
R. Budgetary Information
Annual budgets are adopted on a basis consistent with GAAP. Annual appropriated budgets are adopted
for the general, special revenue funds and debt service funds. All annual appropriations lapse at fiscal year-
end. Project length financial plans are adopted for all capital projects funds and are revised annually.
S. Deferred Outflows/Inflows of Resources
Deferred outflows and inflows of resources are reported in the financial position as described below:
A deferred ou flow of resources is a consumption of a government's net position (a decrease in assets in
excess of any related decrease in liabilities or an increase in liabilities in excess of any related increase
in assets) by the government that is applicable to a future reporting period. The City has three items that
qualify for reporting in this category:
• Deferred outflows or resources for refunding - Reported in the government -wide statement of
net position, this deferred charge on refunding results from the difference in the carrying value
of refunded debt and its reacquisition price. This amount is deferred and amortized over the
shorter of the life of the refunded or refunding debt.
43
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
S. Deferred Outflows/Inflows of Resources (continued)
Deferred outflows of resources for pension — Reported in the government -wide financial
statement of net position, this deferred outflow results from pension plan contributions made
after the measurement date of the net pension liability and the results 1) differences between
projected and actual earnings on pension plan investments; 2) changes in actuarial assumptions;
3) differences between expected and actual actuarial experiences and 4) changes in the City's
proportional share of pension liabilities. The deferred outflows of resources related to pensions
resulting from City's contributions subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the next fiscal year. The deferred outflows resulting from
differences between projected and actual earnings on pension plan investments will be amortized
over a closed five year period. The remaining pension related deferred outflows will be amortized
over the expected remaining service lives of all employees (active and inactive employees) that
are provided with pensions through the pension plan.
Deferred outflows of resources for other post -employment benefits (OPEB) other than pension
— Reported in the government wide financial statement of net position, this deferred outflow
results from OPEB plan contributions made after the measurement date of the net OPEB liability
and the results of 1) differences between projected and actual earnings on OPEB plan
investments; 2) changes in actuarial assumptions; 3) differences between expected and actual
actuarial experiences and 4) changes in the City's proportional share of OPEB liabilities. The
deferred outflows of resources related to OPEB resulting from City contributions subsequent to
the measurement date will be recognized as a reduction of the net OPEB liability in the next fiscal
year. The deferred outflows resulting from differences between projected and actual earnings on
OPEB investments will be amortized over a closed five year period. The remaining
postemployment related deferred outflows will be amortized over the expected remaining service
lives of all employees (active and inactive employees) that are provided with OPEB through the
OPEB plan.
A deferred inflow of resources is an acquisition of a government's net positions (an increase in assets in
excess of any related increase in liabilities or a decrease in liabilities in excess of any related decrease in
assets) by the government that is applicable to a future reporting period. The City has three items that
qualify for reporting in this category:
• Deferred inflows of resources for unavailable revenues - Reported only in the governmental
funds balance sheet, unavailable revenues from property taxes arise under the modified accrual
bases of accounting. These amounts are deferred and recognized as an inflow of resources in the
period that the amounts become available.
Deferred inflows of resources for pension — reported in the government -wide financial statement
of net position, these deferred inflows result primarily from 1) changes in actuarial assumptions;
2) differences between expected and actual actuarial experiences and 3) changes in the City's
proportional share of pension liabilities These pension related deferred inflows will be amortized
over the expected remaining service lives of all employees (active and inactive employees) that
are provided with pensions through the pension plan.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
S. Deferred Outflows/Inflows of Resources (continued)
• Deferred inflows of resources for OPEB — Reported in the government wide financial statement
of net position, this deferred inflow results primarily from 1) changes in actuarial assumptions;
and 2) differences between expected and actual actuarial experiences. These OPEB related
deferred inflows will be amortized over the expected remaining service lives of all employees
(active and inactive employees) that are provided with OPEB through the OPEB plan.
T. Pensions
For purposes of measuring the net pension liability for the Texas Municipal Retirement System (TMRS),
pension related deferred outflows and inflows of resources, and pension expense, City specific information
about its Fiduciary Net Position in the TMRS and additions to/deductions from the City's Fiduciary Net
Position have been determined on the same basis as they are reported by TMRS. For this purpose, plan
contributions are recognized in the period that compensation is reported for the employee, which is when
contributions are legally due. Benefit payments and refunds are recognized when due and payable in
accordance with the benefit terms. Investments are reported at fair value.
For purposes of measuring the net pension liability for the Texas Emergency Services Retirement System
(TESRS), pension related deferred outflows and inflows of resources, and pension expense, City specific
information about its Fiduciary Net Position in the TESRS and additions to/deductions from the City's
Fiduciary Net Position have been determined on the same basis as they are reported by TESRS. For this
purpose, plan contributions are recognized in the period that compensation is reported for the employee,
which is when contributions are legally due. Benefit payments and refunds are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
U. Post -employment Healthcare Benefits
The City participates in a defined benefit group -term life insurance plan, both for current and retired
employees, administered by the Texas Municipal Retirement System (TMRS). The City reports the total
liability for this plan on the government -wide and proprietary fund financial statements. The City
administers other post -employment benefits ("OPEB") through a defined benefit medical plan to provide
coverage for eligible retirees and their dependents. Information regarding the City's total OPEB liability is
obtained from TMRS through a report prepared for the City by TMRS' consulting actuary, Gabriel Roeder
Smith & Company, in compliance with GASB Statement No. 75.
V. Use of Estimates
The preparation of financial statements, in conformity with generally accepted accounting principles,
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues, expenditures, and expenses during the reporting period. Actual results could
differ from those estimates.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1 - Summary of Significant Accounting Policies
W. Implementation of New Standards
In the current fiscal year, the City implemented the following new standards. The applicable provisions of
these new standards are summarized below. Implementation is reflected in the financial statements and the
notes to the financial statements.
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions. This Statement replaces the requirements of Statement 45 and requires governments to report a
liability on the face of the financial statements for the OPEB that they provide. Statement 75 requires
governments in all types of OPEB plans to present more extensive note disclosures and required
supplementary information (RSI) about their OPEB liabilities. Among the new note disclosures is a
description of the effect on the reported OPEB liability of using a discount rate and a healthcare cost trend
rate that are one percentage point higher and one percentage point lower than assumed by the government.
The new RSI includes a schedule showing the causes of increases and decreases in the OPEB liability and
a schedule comparing a government's actual OPEB contributions to its contribution requirements.
GASB Statement No. 85, Omnibus 2017. This Statement establishes accounting and financial reporting
requirements for blending component units, goodwill, fair value measurement and application, and
postemployment benefits (pensions and other postemployment benefits).
GASB Statement No. 86, Certain Debt Extinguishment Issues. This Statement establishes standards of
accounting and financial reporting for in -substance defeasance transactions in which cash and other
monetary assets acquired with only existing resources —that is, resources other than the proceeds of
refunding debt —are placed in an irrevocable trust for the purpose of extinguishing debt. This Statement
also amends accounting and financial reporting requirements for prepaid insurance associated with debt
that is extinguished, whether through a legal extinguishment or through an in substance defeasance,
regardless of how the cash and other monetary assets were acquired. Finally, this Statement establishes an
additional disclosure requirement related to debt that is defeased in substance, regardless of how the cash
and other monetary assets were acquired.
The following standards have been issued, but have not been implemented as not yet effective.
GASB Statement No. 83, Certain Asset Retirement Obligations. This Statement establishes criteria for
determining the timing and pattern of recognition of a liability and a corresponding deferred outflow of
resources for asset retirement obligations.
GASB Statement No. 84, Fiduciary Activities. This Statement establishes standards of accounting and
financial reporting for fiduciary activities.
GASB Statement No. 87, Leases. This Statement establishes standards of accounting and financial reporting
for leases by lessees and lessors.
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period.
This Statement establishes accounting requirements for interest cost incurred before the end of a
construction period.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 2 — Deposits and Investments
The Texas Public Funds Investment Act (PFIA), as prescribed in Chapter 2256 of the Texas Government
Code, regulates deposits and investment transactions of the City.
In accordance with applicable statues, the City has a depository contract with an area bank (depository)
providing for interest rates to be earned on deposited funds and for banking charges the City incurs for
banking services received. The City may place funds with the depository in interest and non -interest bearing
accounts. State law provides that collateral pledged as security for bank deposits must have a market value
of not less than the amount of the deposits and must consist of (1)obligations of the United States or its
agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other
obligations, the principal and interest on which are unconditionally guaranteed or insured by the State of
Texas; and/or (4) obligations of states, agencies, counties, cities, and other political subdivisions of any
state having been rated as investment quality by a nationally recognized investment rating firm and having
received a rating of not less than A or its equivalent. City policy requires the collateralization level to be at
least 102% of market value of principal and accrued interest.
The Council has adopted a written investment policy regarding the investment of City funds as required by
the Public Funds Investment Act (Chapter 2256, Texas Government Code). The investments of the City are
in compliance with the City's investment policy. The City's investment policy is more restrictive than the
PFIA requires. It is the City's policy to restrict its direct investments to obligations of the U.S. Government
or U.S. Government Agencies, fully collateralized certificates of deposit, bankers' acceptances, mutual
funds, repurchase agreements and local government investment pools. The maximum maturity allowed is
five years from date of purchase. The City's investment policy does not allow investments in collateralized
mortgage obligations, floating rate investments or swaps.
Cash and Cash Equivalents
The City's cash and investments are classified as: cash and cash equivalents and restricted cash and
investments. The cash and cash equivalents include cash on hand, fully collateralized deposits with financial
institutions and in a privately -managed public funds investment pool account (TexPool and LOGIC and
Texas CLASS). The restricted cash and investments are assets restricted for specific use. The Pools have a
credit rating of AAA from Standard & Poor's Financial Services. The investments which have maturities
at purchase greater than three months consist mainly of U.S. Government treasury bills, treasury notes, and
other U.S. Government obligations.
The following schedule shows the City's recorded cash and equivalents at year-end:
Total Reported Value
Governmental
Internal
Enterprise
Fund
Funds
Service Funds
Funds
Total
Cash deposits
$ 20,822,027
$ 244,383
$ 908,118
$ 21,974,528
Investment pools
37,538,024
3,565,558
7,006,038
48,109,620
Total cash and equivalents
$ 58,360,051
$ 3,809,941
$ 7,914,156
$ 70,084,148
47
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 2 — Deposits and Investments (continued)
Cash and Cash Equivalents (continued)
At September 30, 2018, the carrying amount of deposits was $21,974,527 and the respective bank balances
were $22,307,738 . The City's bank balances were fully insured or collateralized with securities held by
the City's agent in the City's name.
Investments
The City reported the following investments at September 30, 2018:
Total Reported Value
Governmental Internal Enterprise
Fund Funds Service Funds Funds Total
U.S. Government Securities 31,276,145 3,573,624 6,800,863 41,650,632
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are
significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The City has the
following recurring fair value measurements as of September 30, 2018:
U.S. Government Securities (FHLMC) of $15,836,228 were valued using an option -adjusted
discounted cash flow model (Level 2 inputs).
• U.S. Government Securities (FHLB) of $19,836,320 were valued using a documented trade history
in exact security pricing model (Level 2 inputs).
• U.S. Government Securities (FFCB) of $5,978,084 were valued using a documented trade history
in exact security pricing model (Level 1 inputs).
Concentration on Credit Risk
The policy does not require investments to be staggered in a way that protects interest income from the
volatility of interest rates. The policy has not established limitations on percentages of the total portfolio
that may be invested in securities other than the repurchase agreements, Treasury bills and notes or insured
and collateralized Certificates of Deposits.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 2 — Deposits and Investments (continued)
Investments (continued)
Investment Rate Risk
At year-end, the City had the following investments subject to interest rate risk disclosure, under U.S.
GAAP, by investment type:
Weighted
Average Maturity
Percentage of
WAM
Fair Value
(Days)
Portfolio
Calculation
U.S. Government Securities
Federal Home Loan Bank Agency Notes
$ 19,836,320
252
22%
56
Freddie Mac Agency Notes
15,836,228
415
18%
73
Federal Farm Credit Banks
5,978,084
200
7%
13
Total U.S. Government Securities
41,650,632
Local Government Investment Pools:
TexPool
18,870,936
55
21%
12
Texas CLASS
2,018,449
28
2%
1
Logic
27,220,235
34
30%
10
Total Local Government Investment Pools
48,109,620
165
Total
89,760,252
The City's investment policy specifies the maximum stated maturity from the date of purchase for any
individual investments may not exceed 5 years and the maximum dollar weighted average maturity for the
pooled fund group (investment portfolio) may not exceed 2 years.
Credit Risk
The primary objective of the City's adopted Investment Policy is the safety of principal. Credit risk within
the City's portfolio among authorized investments approved by the City's adopted Investment Policy is
represented in U.S. Treasury Bills, Notes or Bonds, and other securities which are guaranteed as to principal
and interest by the full faith and credit of the United States of America, collateralized or fully insured
certificates of deposits, FDIC insured banks in the State of Texas, repurchase agreements if secured by U.S.
Treasury Bills, Notes or Bonds and Public Funds Investment Pools.
All of the City's purchased investments in U.S. Government Securities were rated AA+ and Aaa by
Standard & Poor's and Moody's respectively.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 3 — Property Taxes
The appraisal of property within the City is the responsibility of the Harris County Appraisal District (the
"Appraisal District"). The Appraisal District is required under the Property Tax Code to appraise all
property within the county on the basis of 100% of its market value. The value of real property within the
Appraisal District must be reviewed every five years; however, the City may, at its own expense, require
annual reviews of appraised values. The City may challenge appraised values established by the Appraisal
District through various appeals and, if necessary, take legal action. Under this legislation, the City
continues to set tax rates on City property. However, if the adopted tax rate, excluding tax rates for
repayment of general obligation bonds and other contractual obligations, adjustment for new improvements,
exceeds the effective tax rate and the rollback rate tax rate, qualified voters of the City may petition for an
election to determine whether to limit the tax rate to no more than the rollback tax rate. The City's property
taxes are levied annually in October on the basis of the Appraisal District's assessed values as of January 1
of that calendar year. Appraised values are established by the Appraisal District at market value, assessed
at 100% of appraised value and certified by the Harris County Appraisal District Board of Review. The
City property taxes are billed and collected by the City's Tax Assessor/Collector. Such taxes are applicable
to the fiscal year in which they are levied and become delinquent with an enforceable lien on property on
February 1 of the current calendar year. The City is permitted, by Article XI, Section 5, of the State of
Texas Constitution and the City Charter, to levy property taxes up to $2.50 per $100 of assessed valuation
for general governmental services. Within the $2.50 maximum levy, there is no legal limit upon the amount
of property taxes, which can be levied for debt service. The property tax rates to finance general
governmental services and debt service for fiscal year 2018 were $0.605 and $0.105, respectively, per $100
of assessed valuation. The 2017 assessed value and total tax levy as adjusted through September 30, 2018
were $3,285,939,300 and $23,125,072, respectively. The City has enacted an ordinance providing for
exemption of twenty percent (20%) of the assessed value of residential homesteads plus an additional
$60,000 for persons 65 years of age or older for property taxes. An exemption of $60,000 is allowed for
disabled persons on homesteads and up to $12,000 is allowed for disable veterans on any one piece of
property. Additionally, the market value of agricultural land is reduced to agricultural value for purposes
of the City's tax levy calculation.
Property taxes are levied by October 1 in conformity with Subtitle E, Texas Property Tax Code. Taxes are
due on receipt of the tax bill and are delinquent if not paid before February 1 of the year following the year
in which imposed. On January 1 of each year, a tax lien attaches to property to secure the payment of all
taxes, penalties, and interest ultimately imposed. The Harris County Central Appraisal District ("HCCAD")
establishes appraised values. Taxes are levied by the City Council based on the appraised values and
operating needs of the City.
Tax Increment Reinvestment Zone — Property Taxes
The City, La Porte Independent School District and Harris County are participating taxing entities within
the tax increment reinvestment zone. The amount of a participant's tax increment for a year is the amount
of property taxes levied and collected by a participant for that year on the captured appraised value of real
property taxable by the participant and located in the zone. The captured appraised value of real property
taxable by the participant and located in the zone for that year less the tax increment base, which is the total
appraised value of all real property taxable by the participant and located in the zone on January 1 of the
year in which the zone was designed as such under the tax increment financing act (the "TIF Act").
50
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 3 — Property Taxes (continued)
Tax Increment Reinvestment Zone — Property Taxes (continued)
Each participant is required to collect taxes on property located within the zone in the same manner as other
taxes are collected. The participant is required to pay into the tax increment fund the collected tax
increments by the first day of each calendar quarter or pursuant to the terms of the participation set forth in
their respective inter -local agreements.
Note 4 — Receivables
Amounts are aggregated into a single accounts receivable (net of allowance for uncollectible) line for
certain funds and aggregated columns. Below is the detail of receivables for the General Fund, Debt Service
Fund, 2017 Certificate of Obligation Bonds Fund, TIRZ and nonmajor governmental funds in the aggregate,
including the applicable allowances for uncollectible accounts.
Debt Service Other Total
General Fund Fund Governmental Governmental
Receivables
Taxes S
3,345,488
S 321,545 S
1,126,411 S
4,793,444
Municipal court
752,446
-
-
752,446
Other
696,261
15,396
711,657
Mowing & demolition
646,132
-
-
646,132
EMS
667,334
242
34,524
702,100
Interest
84,642
-
-
84,642
Solid waste
131,615
-
131,615
Due from other governments
-
318,925
318,925
Less: Allowance for uncollectible
(701,678)
(88,129)
(789,807)
Net Receivables. S
5,622,240
S 233,658 S
1,495,256 S
7,351,154
Revenues of the Utility Fund, an enterprise fund, are reported net of uncollectible amounts. Total
uncollectible amount related to utility sales as of year-end was $86,317
51
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 — Capital Assets
Capital assets activity for the year ended September 30, 2018, was as follows:
Balance
Additions
Retirements
Balance
September 30, 2017
(Increases)
and Transfers
September 30, 2018
Governmental activities:
Capital assets, not being depreciated
Land
$ 10,387,209
$
$
$ 10,387,209
Construction in progress
12,655,665
2,106,841
(12,316,893)
2,445,613
Total capital assets, not being depreciated
23,042,874
2,106,841
(12,316,893)
12,832,822
Capital assets being depreciated:
Buildings and Improvements
38,229,531
503,885
38,733,416
Improvements other than buildings
32,762,610
2,466,443
(8,492)
35,220,561
Infrastructure
43,420,095
10,691,227
54,111,322
Machinery and equipment
24,247,538
1,075,096
(230,712)
25,091,922
Total capital assets being depreciated
138,659,774
14,736,651
(239,204)
153,157,221
Less accumulated depreciation for:
Buildings and Improvements
(21,895,587)
(2,899,828)
(24,795,415)
Improvements other than buildings
(13,235,017)
(2,131,001)
(15,366,018)
Infrastructure
(29,696,005)
(2,400,851)
-
(32,096,856)
Machinery and equipment
(12,598,106)
(2,348,141)
206,771
(14,739,476)
Total accumulated depreciation
(77,424,715)
(9,779,821)
206,771
(86,997,765)
Total capital assets being depreciated, net
61,235,059
4,956,830
(32,433)
66,159,456
Governmental activities capital assets, net
$ 84,277,933
$ 7,063,671
$ (12,349,326)
$ 78,992,278
Business -type activities:
Capital assets, not being depreciated
Land
$ 447,791
$ -
$ - $
447,791
Construction in progress
2,287,458
844,913
(1,097,083)
2,035,288
Total capital assets, not being depreciated:
2,735,249
844,913
(1,097,083)
2,483,079
Business -type assets, being depreciated
Buildings and Improvements
156,649
-
156,649
Improvements other than buildings
89,618,066
1,264,878
90,882,944
Machinery and equipment
4,268,220
47,197
4,315,417
Total capital assets being depreciated
94,042,935
1,312,075
95,355,010
Less accumulated depreciation for:
Buildings and Improvements
(55,901)
-
(55,901)
Improvements other than buildings
(60,891,268)
(2,642,562)
(63,533,829)
Machinery and equipment
(2,048,391)
(2,048,391)
Total accumulated depreciation
(62,995,560)
(2,642,562)
(65,638,121)
Total capital assets being depreciated, net
31,047,375
(1,330,487)
29,716,889
Business Type activities capital assets, net
$ 33,782,624
$ (485,574)
$ (1,097,083) $
32,199,968
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 — Capital Assets (continued)
Depreciation was charged to functions/programs of the governmental activities of the primary government
as follows:
Governmental Activities:
General government
$ 1,913,163
Public Safety
2,616,600
Public works
2,110,580
Parks and recreation
1,352,179
Capital assets held by the City's
internal service funds are charged to
various functions based on their usage
of the assets 1,787,299
Total Governmental Activities $ 9,779,821
Depreciation expense of $2,642,562 was charged to the Utility fund.
Construction contract commitments outstanding as of September 30, 2018, are as follows:
Fund
Projects
Total in Progress
General CIP Fund
Street and Drainage Improvements
$ 2,136,624
General CIP Fund
Park Improvements
133,971
General CIP Fund
Building Improvements
175,018
Utility Fund
Meter Replacement Program
339,089
Utility Fund
Water System Improvements
1,616,036
Airport Fund
Runway Improvements
19,250
Technology Fund
Network Improvements
60,913
Total
$ 4,480,901
53
Remaining
Commitment
$ 446,792
107,902
55,016
20,167
243,798
$ 873,675
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 6 — Long -Term Debt and Other Long -Term Obligations
The City issues a variety of long-term debt instruments in order to acquire and/or construct major capital
facilities and equipment for governmental and business -type activities. These instruments include general
obligation bonds, certificates of obligation and revenue bonds. Future ad valorem tax revenues, water and
sewer system revenues or liens on property and equipment secure these debt obligations.
The schedule below details the terms of public property finance contractual obligation, general obligation
bonds, certificates of obligations and revenue bonds outstanding as of September 30, 2018:
2010 Certificates of Obligation
due in annual payments through March 15, 2026; interest at 3.00% to 4.00%
$6,265,000 issued for street, drainage, and park improvements.
2010 General Obligation Refunding Bonds
due in annual payments through March 15, 2020; interest at 2.00% to 4.00%
$4,295,000 issued to refund previous debt.
2012 General Obligation Refunding Bonds
due in annual payments through March 15, 2025; interest at .65% to 3.00%
$9,435,000 issued to refund previous debt.
2014 General obligation Refunding Bonds
due in annual payments through Marchl5, 2025; interest at 2.00% to 3.50%
$9,300,000 issued to refunding previous debt.
2015 Certificates of Obligation
due in annual installments through March 15, 2030; interest at 2.25% to 3.00%
$7,770,000 issued for water and sewer system improvements, and street and drainage
improvements.
2016 General Obligation Refunding Bonds
due in annual payments through March 15, 2029; interest at 2.00% to 4.00%
$3,165,000 issued to refund previous debt.
2017 Certificates of Obligation
due in annual payments through March 15, 2037; interest at 0.14% to 1.82%
$10,635,000 issued for construction of wastewater system
Total Bonds Payable
54
Governmental
3,760,000
780,000
8,585,000
7,065,000
6,705,000
2,465,000
10,205,000
$ 39,565,000
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 6 — Long -Term Debt and Other Long -Term Obligations (continued)
Changes in the City's long-term liabilities for the year ended September 30, 2018 are as follows:
Balance
Balance
Amounts
September 30
September 30
Due Within
2017
Additions Reductions
2018
One Year
Governmental Activities:
Bonds payable:
General Obligation Bonds
$ 21,090,000
$ $ (2,195,000) $
18,895,000
$ 1,265,000
Certificates of Obligation
21,845,000
(1,175,000)
20,670,000
2,470,000
Premium on bond issuance
1,481,277
(146,058)
1,335,219
-
Total bonds payable
44,416,277
(3,516,058)
40,900,219
3,735,000
Due to developers
6,503,334
(780,543)
5,722,791
-
Compensated absences
2,924,755
373,665 (51,516)
3,246,904
162,354
Total Governmental Activities
$ 53,844,366
$ 373,665 $ (4,348,117) $
49,869,914
$ 3,897,354
Business -type Activities:
Compensated absences 156,940 4,764 (17,705) 143,999 7,728
Total Business -type Activities $ 156,940 $ 4,764 $ (17,705) $ 143,999 $ 7,728
Long-term liabilities applicable to the City's governmental activities are not due and payable in the current
period and, accordingly, are not reported as fund liabilities in the governmental funds. Compensated
absences generally are paid by the General Fund for the governmental activities.
General Obligation Bonds and Certificates of Obligation
General Obligation Bonds are direct obligations issued on a pledge of the general taxing power for the
payment of the debt obligations of the City. General Obligations bonds and Certificates of Obligation
require the City to compute, at the time other taxes are levied, the rate of tax required to provide (in each
years bonds are outstanding) a fund to pay interest and principal maturity. The City is in compliance with
this requirement.
Governmental Activities
Fiscal
General Obligation
Bonds
Certificate of Obligation
Year
Principal
Interest
Prinicipal
Interest
2019
$ 2,470,000
$ 558,931
$ 1,265,000
$439,890
2020
2,465,000
485,300
1,295,000
411,818
2021
2,270,000
412,650
1,330,000
381,896
2022
2,335,000
343,575
1,355,000
350,984
2023
2,395,000
272,625
1,390,000
318,875
2024 - 2028
6,425,000
470,700
7,255,000
1,066,017
2029 - 2033
535,000
10,700
4,405,000
364,562
2034 - 2038
-
-
2,375,000
86,083
$ 18,895,000
$ 2,554,481
$20,670,000
$3,420,125
55
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 6 — Long -Term Debt and Other Long -Term Obligations (continued)
Prior Year Refunding of Debt
The City defeased certain outstanding revenue bonds by placing proceeds of new bonds in irrevocable trust
to provide for all future debt service payments. Accordingly, the respective trust accounts and liability for
the defeased bond are not included in the City's financial statements. As of September 30, 2017, the City
does not have bonds considered defeased and outstanding.
Note 7 — Interfund Receivables, Payables and Transfers
The composition of interfund receivables at September 30, 2018 is an amount of $137,490 due to the
general fund from the 2017 certificate of obligation bond fund.
The composition of interfund transfers for the year are as follows:
Transfers To
Other
Internal
Tranfers From
General Debt Service Governmental Utlity
Service
Totals
General Fund
$ - S - $ 1,500,000 S2,000,000
$ 2,649,445
S 6,149,445
Other Government
57,500 1,577,604 2,065,2200
3,700,304
Utility
74,2201
74,2201
Airport
806
806
Internal Service
20,585
20,585
Totals
S 57,500 S 1,577,604 S 3,565,2200 S 2,000,000
S 2,745,037
S 9,945,341
The purpose of interfund transfers during the current year consisted of the following:
Transfers From Transfers To Purpose
Hotel/Motel Fund
General Fund
Utility Fund
Ia Porte Development Corporation
(4B)
General Fund
Utility Fund
Airport fund
Vehicle maintenance Fund
General Fund
Transfer for golf course advertising and City bordering
bay for golf expenditures
Utility Fund
Transfer for capital projects
Debt Service Fund
Annual Transfer for debt service
Debt Service Fund
Annual Transfer for debt service
Insurance Fund
Insurance Fund
Insurance Fund
Insurance Fund
General Fund General CIP Fund
Ia Porte Development Corporation General CIP Fund
(4B)
Total Transfers
56
Transfer for liability insurance, workers comp health
Transfer for liability insurance and workers comp
Transfer for liability insurance and workers comp
Transfer for liability insurance and workers comp
Transfer for capital project
Transfer for capital project
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 8 — Defined -Benefit Pension Plans
Texas Municipal Retirement System
Plan Description and Provisions
The City participates as one of 883 plans in the nontraditional, joint contributory, hybrid defined benefit
pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency
created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas
Government Code (the TMRS Act) as an agent multiple -employer retirement system for municipal
employees in the State of Texas. The TMRS Act places the general administration and management of the
System with a six -member Board of Trustees. Although the Governor, with the advice and consent of the
Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit
pension plan is a tax -qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS issues a
publicly available comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com.
All eligible employees of the City are required to participate in TMRS.
TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing
body of the City, within the options available in the state statutes governing TMRS.
At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the
city -financed monetary credits with interest were used to purchase an annuity. Members may choose to
receive their retirement benefit in one of seven actuarially equivalent payments options. Members may
also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to
12, 24, or 36 monthly payments, which cannot exceed 75% of the member's deposits and interest.
The City has approved an annually repeating (automatic) basis a monetary credit referred to as an updated
service credit (USC) which is a theoretical amount which takes into account salary increases or plan
improvements. If at any time during their career an employee earns a USC, this amount remains in their
account earning interest at 5% until retirement. At retirement, the benefit is calculated as if the sum of the
employee's accumulated contributions with interest and the employer match plus employer -financed
monetary credits, such as USC, with interest were used to purchase an annuity. Additionally, City provides
on an annually repeating (automatic) basis cost of living adjustments (COLA) for retirees equal to a
percentage of the change in the consumer price index (CPI).
A summary of plan provisions for the City are as follows:
Employee deposit rate:
Matching ratio (City to employee):
Years required for vesting:
Service retirement eligibility:
Updated Service Credit:
Annuity Increase to retirees:
Supplemental death benefit — active
employees and retirees
57
7%
2 to 1
10
20 years at any age, 10 years at age 60 and above
100% Repeating Transfers
70% of CPI Repeating
Yes
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 8 — Defined -Benefit Pension Plans (continued)
Benefits Provided (continued)
At the December 31, 2017 valuation and measurement date, the following employees were covered by the
benefit terms:
Inactive employees or beneficiaries currently receiving benefits 207
Inactive employees entitled to but not yet receiving benefits 164
Active employees 373
Total 744
Contributions
The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the
City matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the City.
Under the State law goveming TMRS, the contribution rate for each City is determined annually by the
consulting actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate
is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an
additional amount to finance any unfunded accrued liability.
Employees for the City were required to contribute 7% of their annual gross eamings during the fiscal year. The
contribution rates for the City were 15.97% and 16.11% in calendar years 2017 and 2018, respectively. The
City's contributions to TMRS for the year ended September 30, 2018 were equal to the required contributions.
Net Pension Liability
The City's net pension liability was measured as of December 31, 2017, and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of that date.
Actuarial Assumptions
The total pension liability in the December 31, 2017 actuarial valuation was determined using the following
actuarial assumptions:
Inflation: 2.5%
Overall payroll growth: 3.5% to 10.5% including inflation
Investment Rate of Return: 6.75%
Salary increases were based on a service -related table. Mortality rates for active members, retirees, and
beneficiaries were based on the gender -distinct RP2000 Combined Healthy Mortality Table with Blue Collar
Adjustment with male rates multiplied by 109% and female rates multiplied by 103% and projected on a fully
generational basis with scale BB to account for future mortality improvements. For disabled annuitants, the
gender -distinct RP2000 Disabled Retiree Mortality Table is used, with slight adjustments.
Actuarial assumptions used in the December 31, 2017 valuation were developed primarily from the actuarial
investigation of the experience of TMRS over the four year period from December 31, 2010 to December 31,
2014. They were adopted in 2015 and first used in the December 31, 2015 actuarial valuation. The
postretirement mortality assumption for healthy annuitants and Annuity Purchase Rate (APRs) are based on
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 8 — Defined -Benefit Pension Plans (continued)
Actuarial Assumptions (continued)
the Mortality Experience Investigation Study covering 2009 through 2011 and dated December 31, 2013. In
conjunction with these changes first used in the December 31, 2013 valuation, the System adopted the Entry
Age Normal actuarial cost method and a one-time change to the amortization policy. Assumptions are
reviewed annually. No additional changes were made for the 2017 valuation.
The long-term expected rate of return on pension plan investments is 6.75%. The pension plan's policy in
regard to the allocation of invested assets is established and may be amended by the TMRS Board of Trustees.
Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the
production of income, in order to satisfy the short-term and long-term funding needs of TMRS.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best estimate ranges of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each major asset class. These ranges are combined
to produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation.
The target allocation for each major asset class are summarized in the following table:
Asset Class
U.S. equities
International equities
Core fixed income
Non -core fixed income
Real estate
Real return
Absolute return
Private equity
Long -Term Expected
Real Rate of Return
Target Allocation (Arithmetic)
17.5% 4.55%
17.5%
6.10%
10.0%
1.00%
20.0%
3.65%
10.0%
4.03%
10.0%
5.00%
10.0%
4.00%
5.0%
8.00%
Total 100.0%
Discount Rate
The discount rate used to measure the total pension liability was 6.75%. The projection of cash flows used to
determine the discount rate assumed that employee and employer contributions will be made at the rates
specified in statute. Based on that assumption, the pension plan's fiduciary net position was projected to be
available to make all projected future benefit payments of current active and inactive employees. Therefore,
the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
59
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 8 — Defined -Benefit Pension Plans (continued)
Changes in the Net Pension Liability
Balance at 12/31/2016
Changes for the year:
Service cost
Interest
Change in benefit terms
Difference between expected
and actual experience
Changes in assumptions
Contributions - employer
Contributions - employee
Net investment income
Benefit payments, including refunds,
of employee contributions
Administrative expense
Other charges
Net changes
Balance at 12/31/2017
Sensitivity of the Net Pension Liability
Increase (Decrease)
Total Pension Plan Fiduciary
Liability Net Position
$ 151,230,737 $ 129,789,148
Net Pension
Liability
(a) - (b)
$ 21,441,589
3,714,539 - 3,714,539
10,112,101 - 10,112,101
(658,901) - (658,901)
3,602,160 (3,602,160)
1,578,735 (1,578,735)
17,987,506 (17,987,506)
(6,558,193) (6,558,193) -
(93,223) 93,223
- (4,725) 4,725
6,609,546 16,512,260 (9,902,714)
$ 157,840,283 $ 146,301,408 $ 11,538,875
The following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as
well as what the City's net pension liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (5.75%) or 1-percentage-point higher (7.75%) than the current rate:
Current Single
1% Decrease to Rate Assumption 1% Increase to
5.75% 6.75% 7.75%
City's net pension liability $ 34,246,468 $ 11,538,875 $ (7,030,791)
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's fiduciary net position is available in a separately -issued
TMRS financial report. That report may be obtained on the Internet at www.tmrs.com.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 8 — Defined -Benefit Pension Plans (continued)
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended September 30, 2018, the City recognized pension expense of $3,244,614.
At September 30, 2018, the City reported deferred outflows and inflows of resources related to pensions
from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between actuarial assumptions
and actual experience $ $ 852,172
Changes in actuarial assumptions used - 118,877
Differences between projected
and actual investment earrings - 3,709,067
Contributions subsequent to
the measurement date 2,753,868 -
Total $ 21753,868 $ 4,680,116
Deferred outflows of resources resulting from contributions subsequent to the measurement date of
$2,753,868 will be recognized as a reduction of the net pension liability for the fiscal year ending
September 30, 2019. Other amounts reported as deferred outflows and inflows of resources related to
pensions will be recognized in pension expense as follows:
Net deferred outflows
Fiscal Year
(inflows) of resources
2019
$ (307,914)
2020
(432,670)
2021
(1,993,677)
2022
(1,945,855)
Total
$ (4,680,116)
Texas Emergency Services Retirement System
Plan Description
The City participates in the Texas Emergency Services Retirement System (TESRS), a cost -sharing
multiple -employer defined benefit pension established and administered by the State of Texas. The TESRS
is an agency of the State of Texas and its financial records comply with state statutes and regulations. The
nine members Board of Trustees, appointed by the Governor, establishes policy for the administration of
the Texas Emergency Services Retirement System. TESRS issues a publicly available comprehensive
annual financial report (CAFR) that can be obtained at www.tesrs.org.
61
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 8 — Defined -Benefit Pension Plans (continued)
Plan Description (continued)
The TESRS was created as a standalone agency by the 83rd Legislature via the passage of SB 220, effective
September 1, 2013, to assume the related functions of the abolished Office of the Fire Fighters' Pension
Commissioner. While the agency is new, the System has been in existence since 1977. TESRS, which is
under the authority of Title 8, Subtitle H, Chapters 861-865 of the Texas Government Code, provides death
and disability benefits to active volunteer fire fighters and first responders, and a pension to members with
vested service, as well as to their survivor/beneficiaries.
Benefits Provided
Senate Bill 411, 65th Legislature, Regular Session (1977), created TESRS and established the applicable
benefit provisions. The 79th Legislature, Regular Session (2005), re -codified the provisions and gave the
TESRS Board of Trustees authority to establish vesting requirements, contribution levels, benefit formulas,
and eligibility requirements by board rule. The benefit provisions include retirement benefits as well as
death and disability benefits. Members are 50% vested after the tenth year of service, with the vesting
percent increasing 10% for each of the next five years of service so that a member becomes 100% vested
with 15 years of service.
Upon reaching age 55, each vested member may retire and receive a monthly pension equal to his vested
percent multiplied by six times the City's average monthly contribution over the member's years of
qualified service. For years of service in excess of 15 years, this monthly benefit is increased at the rate of
6.2% compounded annually. There is no provision for automatic postretirement benefit increases.
On and off -duty death benefits and on -duty disability benefits are dependent on whether or not the member
was engaged in the performance of duties at the time of death or disability. Death benefits include a lump
sum amount or continuing monthly payments to a member's surviving spouse and dependent children.
Contributions
Contributions are made by the City for the participating employees. No contributions are required from the
individuals who are members of the TESRS, nor are they allowed. The City is required to make contributions to
the plan for each month an eligible emergency service personnel provides qualified services. The minimum
contribution is $36 per member. Contributions to the pension plan for the year ended September 30, 2018, were
$40,265.
Net Pension Liability
The City's net pension liability was measured as of August 31, 2017, and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of August 31, 2016.
Actuarial Assumptions
The total pension liability in the August 31, 2016 actuarial valuation was determined using the following
actuarial assumptions:
Inflation: 3.00%
Salary Increases: Not applicable
Investment Rate of Return: 7.75%, net of pension plan investment expense, including inflation
62
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 8 — Defined -Benefit Pension Plans (continued)
Actuarial Assumptions (continued)
Mortality rates were based on the RP-2000 Combined Healthy Lives Mortality Tables for males and for
females projected to 2024 by scale AA.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which expected future net real rates of return (expected returns, net of pension plan investment
expense and inflation) are developed for each major asset class. These components are combined to produce
the long-term expected rate of return by weighting the expected future real rates of return by the target asset
allocation percentage (currently 4.97%) and by adding expected inflation (3.00%). hi addition, the final 7.75%
assumption was selected by "rounding down" and thereby reflects a reduction of 0.22% for adverse deviation.
The target allocation and expected arithmetic real rates of return for each major asset class are summarized in
the following table:
Asset Class
Long -Term Expected
Real Rate of Return
Target Allocation (Arithmetic)
Equities
Large cap domestic
32.0%
5.72%
Small cap domestic
10.0%
5.96%
Developed international
21.0%
6.21%
Emerging markets
6.0%
7.18%
Master limited partnership
5.0%
7.61%
Fixed income
Domestic
21.0%
1.61%
International
5.0%
1.81 %
Cash
0.0%
0.00%
Total
100.0%
Weighted average
4.97%
Discount Rate
The discount rate used to measure the total pension liability was 7.75%. No projection of cash flows was used
to determine the discount rate because the August 31, 2016 actuarial valuation showed that expected
contributions would pay the normal cost and amortize the unfunded actuarial accrued liability (UAAL) in 30
years using the conservative level dollar amortization method. Because of the 30-year amortization period with
the conservative amortization method, the pension plan's fiduciary net position is expected to be available to
make all projected future benefit payments of current active and inactive members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected benefit payments to
determine the total pension liability.
63
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 8 — Defined -Benefit Pension Plans (continued)
Sensitivity of the Net Pension Liability
The following presents the net pension liability of the City, calculated using the discount rate of 7.75%, as
well as what the City's net pension liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (6.75%) or 1-percentage-point higher (8.75%) than the current rate:
1% Decrease to
6.75%
Current Single
Rate Assumption
7.75%
1% Increase to
8.75%
City's net pension liability $ 292,683 $ 156,731 $ 70,966
Pension Liabilities, Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
At August 31, 2018, the City reported a liability of $156,731 for its proportionate share of the TESRS's
net pension liability. The net pension liability was measured as of August 31, 2017 and the total pension
liability used to calculate the net pension liability was determined by an actuarial valuation as of August
31, 2016. The City's proportion of the net pension liability was based on the City's contributions to the
pension plan relative to the contributions of all employers to the plan for the period September 1, 2016
through August 31, 2017.
At August 31, 2017 the City's proportion of the collective net pension liability was 0.653% which was a
decrease from its proportion measured as of August 31, 2016 of 0.780%.
For the year ended September 30, 2018, the City recognized TESRS pension expense of $32,886.
At September 30, 2018, the City reported its proportionate share of the TESRS' deferred outflows and
inflows of resources related to pensions from the following sources:
Differences between actuarial assumptions
and actual experience
Changes in actuarial assumptions used
Differences between projected
and actual investment earnings
Contributions subsequent to
the measurement date
Total
Deferred Outflows Deferred Inflows
of Resources of Resources
$ 166 $ -
2,289 -
14,616 -
40,265 -
$ 57,336 $ -
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 8 — Defined -Benefit Pension Plans (continued)
Pension Liabilities, Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions (continued)
Deferred outflows of resources resulting from contributions subsequent to the measurement date of
$40,265 will be recognized as a reduction of the net pension liability for the fiscal year ending September
30, 2019. Other amounts reported as deferred outflows and inflows of resources related to pensions will
be recognized in pension expense as follows:
Fiscal
Year
Net deferred outflows
(inflows) of resources
2019
$ 7,375
2020
13,529
2021
(649)
2022
(3,184)
Total
$ 17,071
Note 9 — Other Post -Employment Benefits
TMRS Supplemental Death Benefits Fund
Benefit Plan Description
The City also participates in the cost sharing multiple -employer defined benefit group -term life insurance
plan operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death
Benefits Fund (SDBF). The City elected, by ordinance, to provide group -term life insurance coverage to
both current and retired employees. The City may terminate coverage under and discontinue participation
in the SDBF by adopting an ordinance before November 1 of any year to be effective the following
January 1.
The death benefit for active employees provides a lump -sum payment approximately equal to the
employee's annual salary (calculated based on the employee's actual earnings, for the 12-month period
preceding the month of death); retired employees are insured for $7,500; this coverage is another post -
employment benefit (OPEB). As the SDBF covers both active and retiree participants, with no segregation
of assets, the SDBF is considered to be an unfunded OPEB plan (i.e. no assets are accumulated).
Membership in the plan as of the measurement date of December 31, 2017 was as follows:
Inactive employees currently receiving benefits 157
Inactive employees entitled to but not yet receiving benefits 21
Active employees 373
Total 551
"
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 — Other Post -Employment Benefits (continued)
Contributions
Contributions are made monthly based on the covered payroll of employee members of the participating
member city. The contractually required contribution rate is determined annually for each city (currently
0.17% of covered payroll). The rate is based on the mortality and service experience of all employees
covered by the SDBF and the demographics specific to the workforce of the city. There is a one-year delay
between the actuarial valuation that serves as the basis for the employer contribution rate and the calendar
year when the rate goes into effect. The funding policy of this plan is to assure that adequate resources are
available to meet all death benefit payments for the upcoming year; the intent is not to prefund retiree term
life insurance during employees' entire careers. As such, contributions are utilized to fund active member
deaths on a pay-as-you-go basis; any excess contributions and investment income over payments then
become net position available for benefits.
Discount Rate
The TMRS SDBF program is treated as unfunded OPEB plan because the SDBF trust covers both active
employees and retirees and the assets are not segregated for these groups. Under GASB Statement No. 75,
the discount rate for an unfunded OPEB plan should be based on 20-year tax-exempt AA or higher
Municipal Bonds. Therefore, a discount rate of 3.31% based on the 20 Year Bond GO Index published by
bondbuyer.com is used as of the measurement date of December 31, 2017. At transition, GASB Statement
No.75 also requires that the total OPEB liability as of the prior fiscal year end be estimated based on the 20
Year Bond GO Index as of the prior fiscal year end. The actuary has estimated the total OPEB liability, as
of December 31, 2016, using a discount rate of 3.78%.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 — Other Post -Employment Benefits (continued)
Actuarial Assumptions
The City's total OPEB liability was measured at December 31, 2017 and was determined by an actuarial
valuation as of that date using the following actuarial assumptions:
Valuation Date:
Methods and Assumptions:
Inflation:
Salary Increases:
Discount rate:
Retirees' share of benefit related costs
Administrative expenses:
Mortality rates — service retirees
Mortality rates — disabled retirees
Other Information
December 31, 2017
2.50%
3.50%to 10.50%, including inflation
3.31%. The discount rate was based on the Fidelity Index's "20-
Year Municipal GO AA Index" rate as of December 31, 2017.
$0
All administrative expenses are paid through the Pension Trust
and accounted for under reporting requirements under GASB
Statement No. 68.
RP2000 Combined Mortality Table with Blue Collar
Adjustment with male rates multiplied by 109% and female rates
multiplied by 103% and projected on a fully generational basis
with scale BB.
RP2000 Combined Mortality Table with Blue Collar Adjustment
with male rates multiplied by 109% and female rates multiplied
by 103% with a 3 year set -forward for both males and females.
The rates are projected on a fully generational basis with scale BB
to account for future mortality improvements subject to the 3%
floor.
The actuarial assumptions used in the December 31, 2017 valuation were based on the results of an actuarial
experience study for the period December 31, 2010 to December 31, 2014.
67
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 — Other Post -Employment Benefits (continued)
Changes in the Total OPEB Liability
Service cost
Interest
Changes of benefit terms
Difference between expected
and actual experience of the total OPEB liability
Changes of assumptions
Benefit payments
Net change in total OPEB liability
Total OPEB liability - beginning
Total OPEB liability - ending
Covered payroll
Total OPEB liability as a percentage of covered payroll
Sensitivity Analysis
$ 27,064
34,660
91,449
(6,766)
146,407
906,769
$ 1,053,176
$ 22,553,362
4.67%
The following presents the total OPEB liability of the employer, calculated using the discount rate of 3.31 %,
as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1
percentage point lower (2.31%) or 1 percentage point higher (4.31%) than the current rate. Note that the
healthcare cost trend rate does not affect the total OPEB liability, so sensitivity to the healthcare cost trend
rate is not shown.
1% Decrease to
2.31%
$ 1,291,214
Current Discount
Rate Assumption
3.31 % _
$ 1,053,176 $
1% Increase to
4.31 %
871,547
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB Activity
For the year ended September 30, 2018, the City recognized OPEB expense of $76,691.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 — Other Post -Employment Benefits (continued)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB Activity (continued)
As of September 30, 2018, the City reported deferred outflows of resources related to OPEB from the
following sources:
Changes assumptions
Contributions subsequent to
the measurement date
Total
Deferred
Deferred
Outflows of
Inflows of
Resources
Resources
$ 76,482 $ -
5,128
$ 81,610 $ -
The $5,128 reported as deferred outflows of resources related to OPEB resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in the
year ending September 30, 2019.
Amounts currently reported as deferred outflows of resources related to OPEB, excluding contributions
subsequent to the measurement date, will be recognized in OPEB expense as follows:
Net deferred
Fiscal outflows (inflows)
Year of resources
2019
2020
2021
2022
2023
Thereafter
Total
Retiree Health Care Plan (RMCP)
Plan Description
$ 14,967
14,967
14,967
14,967
14,967
1,647
$ 76,482
The City's defined benefit OPEB plan, City of La Porte Retiree Health Care Plan (RHCP), provides OPEB
through an implicit healthcare premium for retirees for all permanent full-time employees of the City.
RHCP is a single -employer defined benefit OPEB plan administered by the City. At this time, no assets are
accumulated in a trust to fund the future requirements of the RHCP.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 — Other Post -Employment Benefits (continued)
Benefits provided
RHCP provides access to post retirement employees by offering a "blended premium" structure, that is, the
overall health care premiums for active employees and non -Medicare retirees, are stated in terms of a single
"blended premium". The difference between the underlying retiree claims and the blended overall health
care premium is referred to as an "implicit" subsidy. Because the underlying claims costs for a non -
Medicare retiree are on average higher than the blended premium, there is a positive implicit subsidy for
the non -Medicare retirees.
Employees covered by benefit terms. At December 31, 2016, the following employees were covered by the
benefit terms:
Retirees and beneficiaries 79
Inactive, nonretired members -
Active members 372
Total 451
Total OPEB Liability
The City's total OPEB liability of $47,493,063 was measured as of December 31, 2017, and was
determined by an actuarial valuation as of December 31, 2016.
Actuarial assumptions and methods
The total OPEB liability in the December 31, 2016 actuarial valuation was determined using the following
actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise
specified:
Valuation Date: December 31, 2016
Methods and Assumptions:
Actuarial Cost Method: Individual Entry -Age
Discount Rate: 3.31%
Inflation: 2.50%
Salary Increases: 3.50%to 10.50%, including inflation
Demographic Assumptions: Based on the experience study covering the four year period
ending December 31, 2014 as conducted for the Texas Municipal
Retirement System (TMRS)
Mortality: For healthy retirees, the gender -distinct RP2000 Combined
Healthy Mortality Tables with Blue Collar Adjustment are used
with male rates multiplied by 109% and female rates multiplied
by 103%. The rates are projected on a fully generational basis by
scale BB to account for future mortality improvements.
70
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 — Other Post -Employment Benefits (continued)
Actuarial assumptions and methods (continued)
Health Care Trend Rates: For Pre-65, initial rate of 7.00% declining to an ultimate rate of
4.75% after 12 years; Ultimate trend rate includes a 0.50%
adjustment for the excise tax. For Post-65, initial rate of 6.00%
declining to an ultimate rate of 4.25% after 14 years
Participation Rates: It was assumed that the plan participation would vary based on the
amount of the subsidy provided. For eligible retirees with over 30
years of service, 95% were assumed to participate in the plan at
retirement. For employees with less than 30 years of service, the
assumed participation rate is equal to the percentage of premium
the City subsidizes. For example, retirees eligible for an 85%
subsidy were assumed to elect coverage 85% of the time, while
only 40% of retirees eligible for a 40% subsidy were assumed to
elect coverage.
Other Information:
Note: The discount rate changed from 3.81% as of December 31, 2016
to 3.31% as of December 31, 2017.
Discount Rate
Because the RHCP is unfunded or pay -as -you go, the discount rate is based on 20-year tax-exempt AA
or higher Municipal Bonds or 3.31% as of the measurement date of December 31, 2017 based on the 20
Year Bond GO Index published by bondbuyer.com.
Changes in the Total OPEB Liability
Service cost $ 1,424,797
Interest 11611,153
Changes of benefit terms -
Difference between expected
and actual experience of the total OPEB liability
(43,219)
Changes of assumptions
3,495,450
Benefit payments
(1,140,416)
Net change in total OPEB liability
5,347,765
Total OPEB liability - beginning
42,145,298
Total OPEB liability - ending
$ 47,493,063
Covered payroll
$ 21,799,361
Total OPEB liability as a percentage of covered payroll 217.86%
71
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 — Other Post -Employment Benefits (continued)
Changes in the Total OPEB Liability (continued)
Changes of assumptions reflect a change in the discount rate from 3.8 1% as of December 31, 2016 to 3.3 1%
as of December 31, 2017.
Sensitivity of the total OPEB liability to changes in the discount rate
The following presents the plan's total OPEB liability, calculated using a discount rate of 3.31%, as well
as what the plan's total OPEB liability would be if it were calculated using a discount rate that is one percent
lower or one percent higher:
1% Decrease to
2.31%
$ 55,756,444
Current Discount
Rate Assumption
3.31 %
$ 47,493,063
1% Increase to
4.31 %
$ 40,585,281
Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates
The following presents the plan's total OPEB liability, calculated using the assumed trend rates as well as
what the plan's total OPEB liability would be if it were calculated using a trend rate that is one percent
lower or one percent higher:
1% Decrease to
2.31%
$ 39,467,150
Current Healthcare
Cost Trend Rate
Assumption
3.31 %
$ 47,493,063
1% Increase to
4.31%
$ 58,045,728
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB
For the year ended September 30, 2018, the City recognized OPEB expense of $3,466,000.
At September 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
Deferred
Deferred
Outflows of
Inflows of
Resources
Resources
Differences between expected
and actual experience
$ -
$ 37,835
Changes assumptions
3,060,016
-
Contributions subsequent to
the measurement date
323,519
-
Total
$ 3,383,535
$ 37,835
72
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 — Other Post -Employment Benefits (continued)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB (continued)
The $323,519 reported as deferred outflows of resources related to OPEB resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in the year
ending September 30, 2019.
Amounts currently reported as deferred outflows of resources related to OPEB, excluding contributions
subsequent to the measurement date, will be recognized in OPEB expense as follows:
Net deferred
Fiscal
outflows (inflows)
Year
of resources
2019
$ 430,050
2020
430,050
2021
430,050
2022
430,050
2023
430,050
Thereafter
871,931
Total
$ 3,022,181
Note 10 — Risk Management
The City is exposed to various risks of loss related to torts: theft of, damage to, and destruction of assets;
errors and omissions; and natural disasters. The City's risk management program encompasses various
means of protecting the City against loss by obtaining property, casualty and liability coverage from
participation in a risk pool. The participation of the City in the risk pool is limited to the payment of
premiums. The City is a member of the Texas Municipal League Intergovernmental Risk Pool, an
unincorporated association of 1,860 political subdivisions of the State of Texas. The Pool contracts with a
third party administrator for administration, investigation and adjustment services in the handling of claims.
All loss contingencies, including claims incurred but not reported, if any, are recorded and accounted for
by the Pool. Settled claims have not exceeded insurance coverage in any of the three previous fiscal years.
There has not been any significant reduction in insurance coverage from that of the previous year.
73
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 10 — Risk Management (continued)
The insurance internal service fund is funded by charges to the City's other funds and component units, and
is based primarily upon the contributing funds' full-time employee count. The City self- insures a portion
of health insurance benefits provided to employees. For health insurance the City retains the risk for the
first $165,000 of an individual claim. Excess insurance coverage is purchased to cover individual claims in
excess of $165,000 with a limit of $1,000,000 per coverage period.
Activities during the year for the insurance internal service fund included:
Revenues
Charges to divisions
hlterfund transfers
Charges to employees
Charges to retirees
Cobra charges
Other
Interest revenue
Total revenues
Expenses
Other expenses
Claims administration
Claims incurred
Re -insurance premiums
Insurance premiums
Total expenses
$ 4,677,929
2,747,067
632,798
112,138
1,302
10,137
$ 8,181,371
$ 669,848
182,814
6,784,705
400,246
455.272
$ 8,492,885
Liabilities of the insurance fund are reported when it is probable that a loss has occurred and the amount of
the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but
not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it
depends on many complex factors, such as, inflation, changes in legal requirements and damage awards.
Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement
trends (including frequency and amount of pay-offs), and other economic and social factors. These estimate
of the claims also includes amounts for incremental claim adjustment expenses related to specific claims
and other claim adjustment expense regardless of whether allocated to specific claims.
Changes in the balance of health insurance claims liability for three fiscal years are as follows:
Beginning of
Payments for
End of Year
Year Accrual
Claims
Claims
Accrual
9/30/2016 $ 439,693
$ 6,001,596
$ 6,053,439
$ 387,850
9/30/2017 387,850
5,480,480
5,397,668
470,662
9/30/2018 470,662
6,784,705
6,708,518
546,849
74
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 11 - Contingencies
The City is a defendant in lawsuits. Although the outcome of the lawsuits is not presently determinable, it
is the opinion of the City's management the resolution of these matters will not have a materially adverse
effect on the financial condition of the City.
The City participates in certain federal and state assisted grant programs. These programs are subject to
program compliance audits by the grantors or their representatives. Accordingly, the City's compliance
with applicable grant requirements will be established at a future date. The amount of expenditures which
may be disallowed by the granting agencies cannot be determined at this time, although the City anticipates
such amounts, if any, will be immaterial.
Note 12 — Encumbrances
Appropriations in all budgeted funds lapse at the end of the fiscal year even if they have related
encumbrances. Encumbrances are commitments related to unperformed (executory) contracts for goods or
services (i.e., purchase orders, contracts, and commitments). Encumbrance accounting is utilized to the
extent necessary to assure effective budgetary control and accountability and to facilitate effective cash
planning and control. While all appropriations and encumbrances lapse at year end, valid outstanding
encumbrances (those for which performance under the executory contract is expected in the next year) are
re -appropriated and become part of the subsequent year's budget pursuant to state regulations. At year-end
the amount of encumbrances expected to be honored in the next year were as follows:
Fund Amount
General $ 420,854
Non -major Governmental 17,450
Total $ 438,304
Note 13 — Southeast Water Purification Plant
The La Porte Area Water Authority ("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, which have been retired.
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.
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 14 - Due to Developers
The TIRZ is a party to several agreements with Developers who own property in the La Porte Tax Increment
Zone. The TIRZ is obligated to repay the Developers for public improvements made on the property up to
the amount of incremental tax value gained.
The Authority has entered into agreements with the following Developers: Port Crossing Land, LP, 65 La
Porte, Ltd., Retreat at Bay Forest, LP, Beazer Homes, LP and Senior Associates. Port Crossing Land, LP
has completed the public improvements detailed in the agreement with the Authority, and assigned their
receivable amount to Liberty Property Limited Partnership in 2015.
Port Crossing Land, LP's reimbursable expenditures totaled $12,096,488 including interest at May 27,
2009. In the current fiscal year, the Developer was reimbursed $1,325,582. To date, reimbursements in the
amount of $10,265,364 have been made to Port Crossing/Liberty for incremental tax value gained. Interest
was calculated, and payments were applied to interest first, then principal. No additional interest will be
due under the agreement.
Retreat at Bay Forest, LP's reimbursable expenditures totaled $224,760, including interest of $36,885 for
the pilot channel and excavation costs as of November 20, 2013. No additional interest will be due under
the agreement. During the current fiscal year, a reimbursement of $29,662 was applied to principal.
Beazer Homes Texas LP's reimbursable expenditures for Bayside Crossing totaled $1,449,517 including
interest at August 24, 2016. In the current fiscal year, the Developer was reimbursed $45,443 for interest.
Beazer Homes Texas LP's reimbursable expenditures for Bayside Crossing - Supplemental totaled
$177,498, including interest at August 23, 2017. In the current fiscal year, an additional amount was
calculated for interest.
Senior Associate's reimbursable expenditures and land for Bayside Crossing totaled $466,032 including
interest at August 23, 2017. In the current fiscal year, an additional amount $9,372 was calculated for
interest.
In addition, a Developers has signed a Development Agreement but has not submitted costs for
reimbursements of their projects. Estimated costs, based on agreements, are as follows:
65 LaPorte, Ltd. $ 7,103,500
76
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 15 - Industrial Payments
In 1958, the City created an Industrial Zone adjacent to the City, which presently encompasses
approximately 5,500 acres of land north of Highway 225 and bordering the Houston Ship Channel. The
City annexed sufficient land to completely encircle this Industrial Zone, protecting it from annexation by
any other municipality. The City entered into contracts with all of the Industries located in the Zone whereby
the City annexed a portion of the total value of each industry with the remainder constituting the protected
Industrial District. In addition to the Industrial Zone north of Highway 225, which is referred to as the
"Battleground Industrial District," the City contains an Industrial Zone on its south side referred to as the
"Bayport Industrial District." The Bayport District, created in 1970, covers 2,500 acres.
The City and the Industries, many of which have come to the Industrial Zones since the original contracts,
are presently under contracts, which extend to December 31, 2019. Under the terms of the current contracts,
the industries make payments to the City each year in lieu of taxes. These annual in lieu payments are in an
amount which, when added to the full City taxes on the annexed portion, equal 62% of what the City's taxes
on the industry would be if 100% of the industry was in the City. After the first six years of the contracts,
the percentage increases to 63%. The contracts contain a new construction clause that allows new plant
facilities to make in lieu payments on 25 % of the value of new additions between now and 2013, after 2014,
the percentage drops to 20%. Currently, 140 companies participate in industrial district contracts. These
contracts have served as a valuable economic tool for more than 50 years.
Note 16 — Fund Balance
Assigned fund balance of the General Fund at year-end consisted of the following:
Equipment and supplies for Police Department
Software and software maintenance
Training
Mowing
Ongoing professional GIS services
Scanning imaging for Planning
Security cameras at parks locations
New vehicle support services
Edge system for new vehicles
Animal disposal services
Commercial water meters
Chili cook -off 2018
Cisco wireless controller
Pavement repair supplies
2018 LIDAR data (cost share)
Carpet for Pro -shop
Suport services protective gear
Street sign supplies
P&R Master Plan
Total General Fund Assigned Fund Balance
77
53,625
187,445
4,963
19,900
2,744
5,250
4,055
20,778
7,321
1,040
2,465
6,000
25,556
21,150
3,000
4,800
2,188
8,574
40.000
$ 420,854
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CITY OF LA PORTE, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 17 — Prior Period Adjustment
In the current fiscal year, the City implemented GASB Statement No. 75, Accounting and Financial
Reporting for Posteinployment Benefits Other Than Pension. As a result, the beginning net position of the
City's governmental activities and business -type activities has been restated on Exhibit A-1 Statement of
Activities to reflect the net OPEB liability and deferred outflow of resources related to contributions made
after the prior measurement date of the plan as follows:
Beginning Net Position / Fund Balance as originally
presented
Net OPEB obligation (GASB45)
Contributions made after measurement date
Total OPEB liability (GASB 75)
Net prior period adjustment
Business -Type
Governmental Activities
Activities (Utility Fund) Net Position
$ 95,482,215 $ 41,963,704 $ 137,445,919
13,870,274 1,859,722 15,729,996
289,176 39,433 328,609
(37,936,247) (5,115,820) (43,052,067)
(23,776,797) (3,216,665) (26,993,462)
Beginning Net Position / Fund Balance as restated $ 71,705,418 $ 38,747,039 $ 110,452,457
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REQUIRED SUPPLEMENTARY INFORMATION
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Exhibit B-1
CITY OF LA PORTE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL (BUDGETARYBASIS)
For the Year Ended September 30, 2018
Budgeted Amounts
Variance with
Final Budget
Positive
Original
Final
Actual Amounts
(Negative)
Revenues
Taxes:
Property taxes and penalties
$ 17,960,500
$ 17,960,500
$ 18,752,165
$ 791,665
Other taxes
90,000
90,000
90,936
936
Licenses and permits
491,500
491,500
668,808
177,308
Fines and forfeitures
1,556,150
1,556,150
1,867,095
310,945
Sales and use taxes
4,500,000
4,500,000
5,830,345
1,330,345
Industrial payments
13,375,000
13,375,000
14,147,728
772,728
Franchise taxes
2,428,769
2,428,769
2,621,035
192,266
Investment Earnings
325,000
325,000
652,760
327,760
Charges for services
5,685,692
5,685,692
5,686,223
531
Miscellaneous
169,114
169,114
258,020
88,906
Total revenues
46,581,725
46,581,725
50,575,115
3,993,390
Expenditures
Current:
General government
12,146,671
11,434,105
9,856,786
1,577,319
Public safety
18,312,939
18,826,520
18,071,966
754,554
Public works
3,321,167
3,283,256
3,242,618
40,638
Health and sanitation
2,717,410
2,874,188
2,871,114
3,074
Culture and recreation
6,187,838
6,354,648
6,033,177
321,471
Total expenditures
42,686,025
42,772,717
40,075,661
2,697,056
Excess (Deficiency) of Revenues
-
Over (Under) Expenditures
3,895,700
3,809,008
10,499,454
6,690,446
Other Financing Sources (Uses)
Transfers in
57,500
57,500
57,500
Transfers out
(6,149,445)
(6,149,445)
(6,149,445)
Total Other Financing Sources (Uses)
(6,091,945)
(6,091,945)
(6,091,945) -
Net Change in Fund Balance
(2,196,245)
(2,282,937)
4,407,509 6,690,446
Fund Balances, Beginning
42,899,564
42,899,564
42,899,564
Fund Balances, Ending
$ 40,703,319
$ 40,616,627
$ 47,307,073 $ 6,690,446
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Revenues:
Property taxes
Investment earnings
Total Revenues
Expenditures
Current:
General government
Debt Service:
Principal
Interest and other charges
Total Expenditures
Net change in fund balance
Fund balances - beginning of year
Fund balances - end of year
Exhibit B-2
CITY OF LA PORTE
TAX INCREMENT REINVESTMENT ZONE
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE BUDGET AND ACTUAL
For the Year ended September 30, 2018
Budgeted Amounts
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
$ 3,107,238 $ 3,107,238 $ 3,090,987 $ (16,251)
450 450 1,004 554
3,107,688 3,107,688 3,091,991 (15,697)
416,965
416,965
559,328
(142,363)
1,987,373
1,987,373
1,987,373
-
118,814
118,814
118,814
-
2,523,152
2,523,152
2,665,515
(142,363)
584,536
584,536
426,476
(158,060)
866,270
866,270
866,270
-
$ 1,450,806
$ 1,450,806
$ 1,22,92,746
$ (158,060)
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CITY OF LA PORTE Exhibit B-2
NOTES TO REQUIRED S UPPLEMENTAR Y INFORMA TION
1. Budgetary Controls and Procedures
The objective of the City's budgetary controls is to ensure compliance with legal provisions embodied in
the annual appreciated budget approved by the City Council. The City Manager is required by charter to
submit a proposed budget and accompanying message to City Council by August 1. The Council shall
review and revise the proposed budget as they deem appropriate prior to circulation for the public hearing.
A summary of the proposed budget and notice of the public hearing must be posted in City Hall and be
published in the official newspaper at least 2 weeks prior to the hearing. Annual budgets for General, Debt
Service, Special Revenue and Enterprise Funds are legally adopted by ordinance and must be done so no
later than the last day of the fiscal year. Budgetary control for capital projects funds is achieved through
legally binding construction contracts and project length budgets.
The level of budgetary control (the level at which expenditures cannot legally exceed the appropriated
amount) is the total approved budget for each department. The City Manager is authorized to transfer part
of all of any unencumbered appropriation balance among programs within a department. All other
amendments and/or transfers must be approved by Council.
Annual appropriated budgets are adopted for general, special revenue, and debt service funds, using the
same basis of accounting as for financial reporting. Annual budgets are adopted on a basis consistent with
generally accepted accounting principles (GAAP) except the capital projects funds, which adopt as a whole.
The original budget is adopted by the City Council prior to the beginning of the year.
Appropriations lapse at the end of the year, excluding capital project budgets.
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CITY OF LA PORTE, TEXAS
SCHEDULE OF CHANGES INNET PENSIONLIABILITY AND RELATED RATIOS
TEXAS MUNICIPAL RETIREzWENT SYSTEM
Last Four Measurement Years
Total pension liability
Service Cost
Interest (on the Total Pension Liability)
Difference between expected and actual experience
Changes of assumptions
Benefit payments, including refunds of employee contributions
Net change in total pension liability
Total pension liability — beginning
Total pension liability — ending
Plan fiduciary net position
Contributions — employer
Contributions — employee
Net investment income
Benefit payments, including refunds of employee contributions
Administrative Expense
Other
Net change in plan fiduciary net position
Plan fiduciary net position — beginning
Plan fiduciary net position — ending
Net pension liability
Plan fiduciary net position as a percentage of the total
pension liability
Exhibit B-3
2014 2015 2016 2017
$ 3,045,776
$ 3,401,691
$ 3,600,954
$ 3,714,539
9,108,178
9,564,637
9,653,940
10,112,101
(761,946)
(500,190)
(40,363)
(658,901)
(325,022)
(4,793,355)
(5,304,879)
(6,409,301)
(6,558,193)
6,598,653
6,836,237
6,805,230
6,609,546
130,990,617
137,589,270
144,425,507
151,230,737
$ 137,589,270
$ 144,425,507
$ 151,230,737
$ 157,840,283
$ 3,534,991 $ 3,461,463 $ 3,415,127 $ 3,602,160
1,460,768 1,506,158 1,528,511 1,578,735
6,665,254 181,954 8,314,792 17,987,506
(4,793,355) (5,304,879) (6,409,301) (6,558,193)
(69,591) (110,827) (93,910) (93,223)
(5,722) (5,474) (5,060) (4,724)
6,792,345 (271,605) 6,750,159 16,512,261
116,518,249 123,310,594 123,03 8,989 129,789,148
$ 123,310,594 $ 123,038,989 $ 129,789,148 $ 146,301,409
$ 14,278,676 $ 21,386,518 $ 21,441,589 $ 11,538,874
89.62% 85.19% 85.82% 92.69%
Covered -employee payroll $ 20,708,639 $ 21,421,227 $ 21,823,962 $ 22,553,362
Net pension liability as a percentage of covered employee
payroll 68.95% 99.84% 98.25% 51.16%
GASB 68 requires 10 fiscal years of data to be provided in this schedule. The City will continue to build this schedule over the next 10-year period as the
information becomes available.
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Exhibit B-4
CITY OF LA PORTE, TEXAS
SCHEDULE OF CONTRIBUTIONS
TEXAS MUNICIPAL RETIREMENT SYSTEM
Last Five Fiscal Years
2014
2015
2016
2017
2018
Actuarially Determined Contribution
$ 3,496,424
$ 3,489,185
$ 3,551,472
$ 3,566,725 $
3,616,211
Contributions in relation to the
actuarially determined contribution
(3,496,424)
(3,489,185)
(3,551,472)
(3,566,725)
(3,616,211)
Contribution deficiency (excess)
-
-
-
-
-
Covered employee payroll
$ 20,543,616
$ 21,323,383
$ 22,512,615
$ 22,446,058 $
22,496,785
Contributions as a percentage of
covered employee payroll
17.02%
16.36%
15.78%
15.89%
16.07%
Note: This schedule is required to have 10 years of information, but the information prior to 2014 is not available
NOTES TO SCHEDULE OF CONTRIBUTIONS
Actuarially determined contribution rates are calculated as of December 31 and become effective
Valuation Date: in January 13 months later.
Methods and Assumptions Used to Deternine Contribution Rates:
Actuarial Cost Method
Entry Age Normal
Amortization Method
Level Percentage of Payroll, Closed
Remaining Amortization Period
24 years
Asset Valuation Method
10 Year smoothed market; 15% soft corridor
Inflation
2.50%
Salary Increases
3.50% to 10.5% including inflation
hive stment Rate of Return
6.75%
Retirement Age
Experience -based table of rates that are specific to the City plan of benefits. Last updated for the
2015 valuation pursuant to an experience study of the period 2010 - 2014
Mortality
RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by
109% and female rates multiplied by 103% and projected on a fully generational basis with scale
BB.
Other Information:
There were no benefit changes during the year.
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CITY OF LA PORTE, TEXAS
Exhibit B-5
SCHED ULE OF CITY'S PROPORTIONATE SHARE
OF THE NET PENSION LIABILITY
TEXAS EMERGENCY SERVICES RETIREMENT
SYSTEM
LAST FOUR MEASUREMENT YEARS
2014
2015
2016
2017
City's proportion of the new pension liability 0.721 %
0.982%
0.780%
0.653%
City's proportionate share of the net pensions liability $ 131,018 $
262,121
$ 227,199
$ 156,731
City's covered -employee payroll 18,420
18,617
15,498
27,694
City's proportionate share of the net pension liability as
percentage of its covered -employee payroll 711%
1408%
1466%
566%
Plan fiduciary net position as a percentage of the total pension
liability 83.5%
76.9%
76.3%
81.4%
CITY OF LA PORTE, TEXAS
ExhibitB-6
SCHEDULE OF CITY'S CONTRIBUTIONS
TEXAS EMERGENCY SERVICES RETIREMENT
SYSTEM
LAST FIVE FISCAL YEARS
2014
2015
2016
2017
2018
Contractually required contribution $ 26,055 $
48,820
$ 38,095
$ 26,495
$ 40,265
Contributions in relation to the contractually required
contribution (26,055)
(48,820)
(38,095)
(26,495)
(40,265)
Contribution deficiency (excess) -
-
-
-
-
City's covered -employee payroll 18,420
18,617
15,498
27,964
15,388
Contribution as a percentage of covered -employee payroll 141.4%
262.2%
245.8%
94.7%
261.7%
Note: This schedule is required to have 10 years of information, but the information prior to 2014 is not available.
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Exhibit B-7
CITY OF LA PORTE, TEXAS
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS
CITY OF LA PORTE RETIREE HEALTH CARE PLAN
FOR THE MEASUREMENT YEAR ENDED DECEMBER 31
Total OPEB Liability
2017
Service cost
$ 1,424,797
Interest on the total OPEB liability
1,611,153
Changes in benefit terms
-
Difference between expected and actual
experience of the total OPEB liability
(43,219)
Changes in assumptions
3,495,450
Benefit payments
(1,140,416)
Net change in total OPEB liability
5,347,765
Total OPEB Liability - Beginning
42,145,298
Total OPEB Liability - Ending
$ 47,493,063
Covered payroll $ 21,799,361
Total OPEB liability as a percentage
of covered payroll 217.86%
Notes to the Required Supplementary Information
Ten years of data should be presented but data was unavailable prior to 2018.
There are no plan assets accumulated in a trust that meets the criteria in paragraph 4 of GASB
Statement No. 75.
The discount rate changed from 3.81% as of December 31, 2016 to 3.31% as of December3l, 2018.
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Exhibit B-8
CITY OF LA PORTE, TEXAS
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS
TEXAS MUNICIPAL RETIREMENT SYSTEM SUPPLEMENTAL DEATH BENEFITS FUND
FOR THE MEASUREMENT YEAR ENDED DECEMBER 31
Total OPEB Liability
2017
Service cost
$ 27,064
Interest on the total OPEB liability
34,660
Changes in benefit terms
-
Difference between expected and actual
experience of the total OPEB liability
-
Changes in assumptions
91,149
Benefit payments
(6,766)
Net change in total OPEB liability
146,107
Total OPEB Liability - Beginning
906,769
Total OPEB Liability - Ending
$ 1,052,876
Covered payroll $ 22,553,362
Total OPEB liability as a percentage
of covered payroll 4.67%
Notes to the Required Supplementary Information
Ten years of data should be presented but data was unavailable prior to 2017.
There are no plan assets accumulated in a trust that meets the criteria in paragraph 4 of GASB
Statement No. 75.
No significant methods and assumptions to disclose.
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COMBINING AND INDIVIDIUAL FUND
STATEMENTS AND SCHEDULES
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Non-maior Governmental Funds
Special Revenue Funds
Special Revenue Funds are used to account for specific revenues that are legally restricted for particular
purposes.
Hotel/Motel Occupancy Tax Fund - This fund is used to account for the accumulation of resources from
the Hotel/Motel Tax assessment levied by the City. These monies are to be spent to promote the
development or progress of the City within the guidelines set forth on disposition of revenues collected
under the authority of the Texas Hotel Occupancy Act (Article 1369; Vernon's Texas Civil Statutes).
Section 4B Sales Tax Fund This fund is used to account for funds received from the '/2 cent sales tax
dedicated to certain economic and infrastructure projects.
Street Maintenance Sales Tax Fund — This fund is used to account for the additional sales tax collected for
street maintenance.
Emergency Services Sales Tax Fund — This fund is used to account for the additional sales tax collected for
emergency maintenance.
These funds are used to account for revenues to be received from the Community Development Block Grant
Entitlement Fund.
Restricted Funds — This fund is used to account for funds received from another government or organization
to be used for the specific purpose activity or facility.
Capital Projects Funds
Capital projects funds are used to account for the acquisition and construction of major capital facilities
other than those financed by proprietary funds.
2006 Certificate of Obligation Bonds Fund — This fund is used to account for the proceeds and expenditures
related to the Police Facility, a Sports Complex, South La Porte Trunk Sewer and various other Water/Sewer
projects.
2010 Certificates of Obligation Bond Fund — This fund is used to account for the proceeds and expenditures
related to street, drainage and park improvements.
2015 Certificate of Obligation Bonds Fund — This fund is used to account for bond proceeds and the
expenditure of those funds for water and sewer improvements, and street and drainage improvements.
Drainage bnprovennents — This fund is used to account for the proceeds and expenditures related to the
drainage fees collected.
Capital bnprovennents — This fund is used to account for projects that are generally small in nature and
affect the general operation of the City.
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CITY OF LA PORTE
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
September 30, 2018
Assets
Current Assets:
Cash and cash equivalents
Investments
Receivables
Total Assets
Liabilities:
Accounts payable
Accrued salaries
Other payables
Unearned revenues
Total Liabilities
Fund Balances:
Restricted for:
Debt service
Economic development
Senior citizen programs
Replacement of trees
Municipal court building and technology
Park improvements
Public safety
Capital projects
Public works
Other
Total Fund Balances
Total Liabilities and Fund Balances
cial Revenue Funds
Hotel - Motel Street
Occupancy Section 4B Sales Maintenance Sales
Tax Fund Tax Tax
$ 666,344
612,961
150,707
$ 2,981,857
1,745,983
496,617
1,451,595
1,335,305
250,061
$ 1,430,012 $ 5,224,457 $ 3,036,961
4,626 832 154,251
617 1,669 -
5,243 2,501 154,251
1,083,817
1,424,769 4,138,139 -
2,882,710
1,424,769 5,221,956 2,882,710
$ 1,430,012 $ 5,224,457 $ 3,036,961
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Special Revenue Funds
Emergency
Service Sales
Tax
Restricted
Funds
(Grants)
Exhibit C-1
Page 1 of 2
Total Special
Revenue
Funds
$ 347,109 $ 1,001,792 $ 6,448,697
319,302 921,535 4,935,086
244,232 322,904 1,464,521
$ 910,643 $ 2,246,231 $ 12,848,304
24,450
1,958
26,408
44,483
$ 228,642
-
4,244
1,500
1,500
1,143
1,143
47,126
235,529
1,083,817
5,562,908
- 10,543
10,543
- 576,940
576,940
- 478,343
478,343
- 260,794
260,794
884,235 647,709
1,531,944
- -
2,882,710
- 224,776
224,776
884,235 2,199,105
12,612,775
$ 910,643 $ 2,246,231
$ 12,848,304
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CITY OF LA PORTE
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
September 30, 2018
Capital Projects Funds
2006
2010
2015
Certificate of
Certificate of
Certificate of
Obligation
Obigation
Obligation
Bonds
Bond
Bonds
Assets
Current Assets:
Cash and cash equivalents
$ 3,877
$ 1,156,469
$ 3,667,897
Investments
3,566
29,139
40,883
Receivables
13
110
154
Total Assets
$ 7,456
$ 1,185,718
$ 3,708,934
Liabilities:
Accounts payable
- - 305,712
Accrued salaries
- - -
Other payables
- - -
Unearned revenues
- - -
Total Liabilities
- - 305,712
Fund Balances:
Restricted for:
Debt service
- - -
Economic development
- - -
Senior citizen programs
- - -
Replacement of trees
- - -
Municipal court building and technology
- - -
Park improvements
- - -
Public safety
- - -
Capital projects
7,456 1,185,718 3,403,222
Public works
- - -
Other
- - -
Total Fund Balances
7,456 1,185,718 3,403,222
Total Liabilities and Fund Balances $
7,456 $ 1,185,718 $ 3,708,934
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Exhibit Gl
Page 2 of 2
Capital Project Funds
Total Capital
Total Nonmajor
Capital
Drainage
Projects
Governmental
Improvements
Improvements
Funds
Funds
$ 3,843,440
$ 478,477
$ 9,150,160
$ 15,598,857
3,535,532
440,145
4,049,265
8,984,351
13,395
17,063
30,735
1,495,256
$ 7,392,367
$ 935,685
$ 13,230,160
$ 26,078,464
173,973
29,708
509,393
$ 738,035
-
-
-
4,244
-
-
-
1,500
-
-
-
1,143
173,973
29,708
509,393
744,922
- - - 1,083,817
- - - 5,562,908
- - - 10,543
- - - 576,940
- - - 478,343
- - - 260,794
- - - 1,531,944
7,218,394 905,977 12,720,767 12,720,767
- - - 2,882,710
- - - 224,776
7,218,394 905,977 12,720,767 25,333,542
$ 7,392,367 $ 935,685 $ 13,230,160 $ 26,078,464
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CITY OF LA PORTE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended September 30, 2018
Revenue Funds
Emergency
Hotel/Motel
Section 4b
Street Maintenance
Service Sales
Tax
Sales Tax
Sales Tax
Tax
Revenues
Fines and forfeitures
-
Sales and use taxes
796,924
2,916,380
1,458,190
1,452,028
Intergovernmental revenues
-
-
-
-
Investment earnings
13,147
48,073
27,428
4,467
Charges for services
-
-
-
-
Miscellaneous
5,220
-
-
-
Total revenues
815,291
2,964,453
1,485,618
1,456,495
Expenditures
Current:
General government
496,430
346,636
-
951,318
Public safety
-
-
-
-
Public works
-
-
783,768
-
Culture and recreation
-
-
-
-
Capital outlay
-
-
285,621
103,582
Total expenditures
496,430
346,636
1,069,389
1,054,900
Excess (Deficiency) of Revenues
Over (Under) Expenditures
318,861
2,617,817
416,229
401,595
Other Financing Sources (Uses)
Transfers in
-
-
-
-
Transfers to other funds
(57,500)
(3,079,212)
-
-
Total Other Financing Sources (Uses)
(57,500)
(3,079,212)
-
-
Change in Fund Balance
261,361
(461,395)
416,229
401,595
Fund Balances, Beginning
1,163,408
5,683,351
2,466,481
482,640
Fund Balances, Ending
$ 1,424,769
$ 5,221,956
$ 2,882,710
$ 884,235
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Exhibit G2
Page 1 of 2
Restricted
Total Special
Funds
Revenue
(Grants)
Funds
$ 225,324 $ 225,324
- 6,623,522
893,006 893,006
27,620 120,735
35,552 40,772
66,974
1,861,358
305,838
305,838
78,566
862,334
46,915
46,915
850,647
1,239,850
1,348,940
4,316,295
(167,438) 3,587,064
- (3,136,712)
- (3,136,712)
(167,438) 450,352
/1 "I G A'1 11 l 1 41,
$ 2,199,105 $ 12,612,775
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CITY OF LA PORTE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES INFUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended September 30, 2018
Capital Projects Fund
2010
2015
2006 Certificate
Certificate of
Certificate of
of Obligation
Obigation
Obligation
Capital
Bonds
Bond
Bonds
Improvements
Revenues
Fines and forfeitures
$ -
$ -
$ -
$ -
Sales and use taxes
-
-
-
-
Intergovernmental revenues
-
-
-
-
Investment earnings
3,971
17,974
66,226
72,091
Charges for services
-
-
-
-
Miscellaneous
-
-
-
-
Total revenues
3,971
17,974
66,226
72,091
Expenditures
Current:
General government
-
-
-
103,291
Public safety
-
-
-
-
Public works
-
-
-
-
Culture and recreation
-
-
-
251,969
Capital outlay
-
9,333
1,214,438
619,507
Total expenditures
-
9,333
1,214,438
974,767
Excess (Deficiency) of Revenues
Over (Under) Expenditures
3,971
8,641
(1,148,212)
(902,676)
Other Financing Sources (Uses)
Transfers in
-
-
-
3,565,200
Transfers to other funds
(563,592)
Total Other Financing Sources (Uses)
(563,592)
-
-
3,565,200
Change in Fund Balance
(559,621)
8,641
(1,148,212)
2,662,524
Fund Balances, Beginning (as restated)
567,077
1,177,077
4,551,434
4,555,870
Fund Balances, Ending
$ 7,456
$ 1,185,718
$ 3,403,222
$ 7,218,394
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Exhibit C-2
Page 2 of 2
Capital Projects
Fund
Total Capital
Total Nonmajor
Drainage
Projects
Governmental
Improvements
Funds
Funds
225,324
-
-
6,623,522
-
-
893,006
11,538
171,800
292,535
267,358
267,358
267,358
-
-
40,772
278,896
439,158
8,342,517
-
103,291
$ 1,964,649
-
305,838
15,454
15,454
877,788
-
251,969
298,884
345,706.00
2,188,984
3,428,834
361,160
2,559,698
6,875,993
(82,264)
(2,120,540)
1,466,524
-
3,565,200
3,565,200
(563,592)
(3,700,304)
-
3,001,608
(135,104)
(82,264)
881,068
1,331,420
988,241
11,839,699
24,002,122
$ 905,977
$ 12,720,767
$ 25,333,542
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Exhibit C-3
CITY OF LA PORTE, TEXAS
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Taxes:
Property taxes
Investment earnings
Total revenues
Expenditures
Current:
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Transfers in
Total Other Financing Sources (Uses)
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
Positive
Final Budget
GAAP Actual
(Negative)
2017
$ 3,240,000
$ 3,435,051
$ 195,051
$ 3,304,451
8,000
29,595
21,595
14,220
3,248,000
3,464,646
216,646
3,318,671
3,370,000
3,370,000
-
21850,000
1,156,923
1,156,923
-
1,063,705
4,526,923
4,526,923
-
3,913,705
(1,278,923)
(1,062,277)
216,646
(595,034)
1,577,604
1,577,604
-
937,295
1,577,604
1,577,604
-
937,295
298,681
515,327
216,646
342,261
3,883,137
3,883,137
-
3,540,876
$ 4,181,818
$ 4,398,464
$ 216,646
$ 3,883,137
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Exhibit C-4
CITY OF LA PORTE, TEXAS
CAPITAL PROJECTS FUND - 2017 CERTIFICATE OF OBLIGATION BONDS
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Investment earnings
Total revenues
Expenditures
Current:
General government
Public works
Debt service:
Interest and fiscal charges
Total expenditures
Excess (Dclicicncy) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Proceeds from bond issuance
Total Other Financing Sources (Uses)
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
Final GAAP Positive
Budget Actual (Negative) 2017
$ - $ 181,549 $ 181,549 $ 23
181,549 181,549 23
35,115 308,972 (273,857) -
- - - 257,024
35,115 308,972 (273,857) 257,024
(35,115) (127,423) 455,406 (257,001)
10,635,000
- 10,635,000
(35,115) (127,423) 455,406 10,377,999
10,377,999 10,377,999 - -
$10,342,884 $10,250,576 $ 455,406 $ 10,377,999
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Exhibit C-5
CITY OF LA PORTE, TEXAS
SPECIAL REVENUE FUND - HOTELIMOTEL TAX
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Sales and use taxes
Investment earnings
Miscellaneous
Total revenues
Current:
General government
Total expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Transfers to other funds
Total Other Financing Sources (Uses)
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
GAAP Positive
Final Budget Actual (Negative) 2017
$ 700,000 $ 796,924 $ 96,924 $ 823,980
5,500 13,147 7,647 11,223
- 5,220 5,220 104,286
705,500 815,291 109,791 939,489
686,305 496,430 189,875 826,569
686,305 496,430 189,875 826,569
19,195 318,861 (80,084) 112,920
(57,500) (57,500) - (57,500)
(57,500) (57,500) - (57,500)
(38,305) 261,361 (80,084) 55,420
1,163,408 1,163,408 - 1,107,988
$ 1,125,103 $ 1,424,769 $ (80,084) $ 1,163,408
102
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Exhibit C-6
CITY OF LA PORTE, TEXAS
SPECIAL REVENUE FUND - SECTION 4B SALES TAX
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - B UDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Sales and use taxes
Investment earnings
Total revenues
Expenditures
General government
Total expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Transfers to other funds
Total Other Financing Sources (Uses)
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
Final
GAAP
Positive
Budget
Actual
(Negative)
2017
$ 2,250,000
$2,916,380
$ 666,380
$ 2,491,714
25,000
48,073
23,073
27,619
2,275,000
2,964,453
689,453
2,519,333
770,314
346,636
423,678
526,195
770,314
346,636
423,678
526,195
1,504,686
2,617,817
265,775
1,993,138
(3,079,212)
(3,079,212)
-
(2,025,447)
(3,079,212)
(3,079,212)
-
(2,025,447)
(1,574,526)
(461,395)
265,775
(32,309)
5,683,351
5,683,351
-
5,715,660
$ 4,108,825
$ 5,221,956
$ 265,775
$ 5,683,351
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Exhibit C-7
CITY OF LA PORTE, TEXAS
SPECIAL REVENUE FUND - STREET MAINTENANCE SALES TAX FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Sales and use taxes
Investment earnings
Total revenues
Expenditures
Current:
Public works
Capital outlay
Total expenditures
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
Final
GAAP
Positive
Budget
Actual
(Negative) 2017
$ 1,125,000
$ 1,458,190
$ 333,190 $ 1,245,857
12,000
27,428
15,428 14,149
1,137,000
1,485,618
348,618 1,260,006
288,569 783,768 (495,199) 824,489
- 285,621 (285,621) 126,375
288,569 1,069,389 (780,820) 950,864
848,431 416,229 1,129,438 309,142
2,466,481 2,466,481 - 2,157,339
$ 3,314,912 $ 2,882,710 $ 1,129,438 $ 2,466,481
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Exhibit C-8
CITY OF LA PORTE, TEXAS
SPECIAL REVENUE FUND -EMERGENCY SERVICES SALES TAX FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Sales and use taxes
Investment earnings
Total revenues
Expenditures
Current:
General government
Capital outlay
Total expenditures
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
Final
GAAP
Positive
Budget
Actual
(Negative)
2017
$1,125,000
$1,452,028
$ 327,028
$ 1,226,838
4,500
4,467
(33)
3,538
1,129,500
1,456,495
326,995
1,230,376
982,282
951,318
30,964
925,205
105,091
103,582
1,509
776,803
1,087,373
1,054,900
32,473
1,702,008
42,127
401,595
294,522
(471,632)
482,640
482,640
-
954,272
$ 524,767
$ 884,235
$ 294,522
$ 482,640
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Exhibit C-9
CITY OF LA PORTE, TEXAS
SPECIAL REVENUE FUND - RESTRICTED FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - B UDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Fines and forfeitures
Intergovernmental revenues
Investment earnings
Miscellaneous
Total revenues
Expenditures
Current:
General government
Public safety
Public works
Culture and recreation
Capital outlay
Total expenditures
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
Final
GAAP
Positive
Budget
Actual
(Negative)
2017
$ 120,000
$ 225,324
$ 105,324
$ 337,778
412,986
893,006
480,020
1,077,893
-
27,620
27,620
17,523
850.00
35,552
34,702
36,051
533,836
1,181,502
647,666
1,469,245
196,800
66,974
129,826
63,045
409,344
305,838
103,506
302,058
160,729
78,566
82,163
105,127
-
46,915
(46,915)
62,397
360,795
850,647
(489,852)
820,227
1,127,668
1,348,940
(221,272)
1,352,854
(593,832)
(167,438)
868,938
116,391
2,366,543
2,366,543
-
2,250,152
$ 1,772,711
$ 2,199,105
$ 868,938
$ 2,366,543
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Exhibit C-10
CITY OF LA PORTE, TEXAS
2006 CERTIFICATE OF OBLIGATION BOND FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - B UDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Investment earnings
Total revenues
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Transfers to other funds
Total Other Financing Sources (Uses)
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
Final GAAP Positive
Budget Actual (Negative) 2017
$ - $ 3,971 $ 3,971 $ 3,486
- 3,971 3,971 3,486
- 3,971 3,971 3,486
(563,592) (563,592) - -
(563,592) (563,592) - -
(563,592) (559,621) 3,971 3,486
567,077 567,077 - 563,592
$ 3,485 $ 7,456 $ 3,971 $ 567,077
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Exhibit C-11
CITY OF LA PORTE, TEXAS
2010 CERTIFICATE OF OBLIGATIONBOND FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Investment earnings
Total revenues
Expenditures
Current:
Capital outlay
Total expenditures
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
Final GAAP Positive
Budget Actual (Negative) 2017
$ - $ 17,974 $ 17,974 $ 8,050
- 17,974 17,974 8,050
1,056,113 9,333 1,046,780 8,420
1,056,113 9,333 1,046,780 8,420
(1,056,113) 8,641 (1,028,806) (370)
1,177,077 1,177,077 - 1,177,447
$ 120,964 $ 1,185,718 $ (1,028,806) $ 1,177,077
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Exhibit C-12
CITY OF LA PORTE, TEXAS
2015 CERTIFICATE OF OBLIGATIONBOND FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES INFUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Investment earnings
Total revenues
Expenditures
Current:
Capital outlay
Total expenditures
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
Final GAAP Positive
Budget Actual (Negative) 2017
$ - $ 66,226 $ 66,226 $ 41,779
- 66,226 66,226 41,779
(1,166,230) 1,214,438 (2,380,668) 1,523,403
(1,166,230) 1,214,438 (2,380,668) 1,523,403
1,166,230 (1,148,212) 2,446,894 (1,481,624)
4,551,434 4,551,434 - 6,033,058
$ 5,717,664 $ 3,403,222 $ 2,446,894 $ 4,551,434
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Exhibit C-13
CITY OF LA PORTE, TEXAS
CAPITAL IMPROVEMENTS FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Investment earnings
Total revenues
Expenditures
Current:
General government
Culture and recreation
Capital outlay
Total expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Variance
Final GAAP Positive
Budget Actual (Negative) 2017
$ 15,000 $ 72,091 $ 57,091 $ 24,127
15,000 72,091 57,091 31,127
194,000
103,291
90,709
35,000
-
251,969
(251,969)
262,852
467,235
619,507
(152,272)
845,281
661,235
974,767
(313,532)
1,143,133
(646,235)
(902,676)
370,623
(1,112,006)
Transfers in
3,565,200
3,565,200
- 2,690,200
Total Other Financing Sources (Uses)
3,565,200
3,565,200
- 2,690,200
Change in Fund Balance
2,918,965
2,662,524
370,623 1,578,194
Fund Balances, Beginning
4,555,870
4,555,870
- 2,977,676
Fund Balances, Ending
$ 7,474,835
$ 7,218,394
$ 370,623 $ 4,555,870
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Exhibit C-14
CITY OF LA PORTE, TEXAS
CAPITAL PROJECTS FUND - DRAINAGE IMPROVEMENTS FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES INFUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2018
With comparative actual totals for the year ended September 30, 2017
Revenues
Investment earnings
Charges for services
Total revenues
Expenditures
Current:
Public works
Capital outlay
Total expenditures
Change in Fund Balance
Fund Balances, Beginning
Fund Balances, Ending
Variance
Final
GAAP
Positive
Budget
Actual
(Negative)
2017
$ 5,000
$ 11,538
$ 6,538
$ 7,708
275,500
267,358
(8,142)
286,470
280,500
278,896
(1,604)
294,178
-
15,454
(15,454)
62,096
(236)
345,706
(345,942)
64,038
(236)
361,160
(361,396)
126,134
280,736
(82,264)
359,792
168,044
988,241
988,241
-
820,197
$ 1,268,977 $
905,977
$ 359,792 $
988,241
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CITY OF LA PORTE, TEXAS
General Fund
Schedule ofRevenues - Budget and Actual
For the Year Ended September 30, 2018
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Taxes:
Ad valorem:
Current
$ 17,700,000
$ 17,700,000
$ 18,650,083
$ 950,083
Delinquent
100,000
100,000
(139,834)
(239,834)
Penalty and interest
160,500
160,500
241,916
81,416
Total ad valorem
17,960,500
17,960,500
18,752,165
791,665
Industrial Payments
13,375,000
13,375,000
14,147,728
772,728
Sales Taxes
4,500,000
4,500,000
5,830,345
1,330,345
Other Taxes
90,000
90,000
90,936
936
Franchise Fees
Electrical
1,528,269
1,528,269
1,732,586
204,317
Gas
140,500
140,500
135,796
(4,704)
Telephone
275,000
275,000
350,010
75,010
Cable
400,000
400,000
313,606
(86,394)
Commercial Solidwaste
85,000
85,000
89,037
4,037
Total Franchise Fees
2,428,769
2,428,769
2,621,035
192,266
Charges for Services
Public safety service fees
488,433
488,433
681,857
193,424
Health and sanitation service fees
3,215,500
3,215,500
3,035,789
(179,711)
Culture and recreation fees
1,598,325
1,598,325
1,512,234
(86,091)
Other service fees
383,434
383,434
456,343
72,909
Total Charges for Services
5,685,692
5,685,692
5,686,223
531
Licenses and permits
Building permits
472,625
472,625
645,978
173,353
Licenses
18,875
18,875
22,830
3,955
Total Licenses and permits
491,500
491,500
668,808
177,308
hivestment income
325,000
325,000
652,760
327,760
Fines and forfeitures
1,556,150
1,556,150
1,867,095
310,945
Miscellaneous
169,114
169,114
258,020
88,906
Total revenues
$ 46,581,725
$ 46,581,725
$ 50,575,115
$ 3,993,390
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CITY OF LA PORTE, TEXAS
Page I of 6
General Fund
Schedule of Expenditures - Budget and Actual
For the year ended September 30, 2018
Variance with
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
General Government
Administration:
Emergency Management:
Personal services
$
267,771
$
277,685
$
260,331
$ 17,354
Supplies
5,255
5,255
4,277
978
Other services and charges
84,014
95,419
92,591
2,828
Total Emergency Management
357,040
378,359
357,199
21,160
General Administration:
Personal services
$
468,824
$
482,879
$
423,147
59,732
Supplies
3,200
3,200
2,495
705
Other services and charges
327,995
327,995
119,931
208,064
Total General Administration
800,019
814,074
545,573
268,501
Community Investment:
Personal services
$
-
$
-
$
-
-
Supplies
32,200
32,200
26,532
5,668
Other services and charges
86,900
86,900
75,424
11,476
Total Community Investment
119,100
119,100
101,956
17,144
Human Resources:
Personal services
$
253,702
$
261,129
$
254,049
7,080
Supplies
2,600
2,600
2,037
563
Other services and charges
210,224
267,224
247,921
19,303
Total Human Resources
466,526
530,953
504,007
26,946
Information Technology
Personal services
$
646,411
$
666,963
$
585,661
81,302
Supplies
255,458
255,458
253,509
1,949
Other services and charges
1,680,890
1,897,714
1,603,609
294,105
Total Information Technology
2,582,759
2,820,135
2,442,779
377,356
Municipal Court:
Personal services
$
743,631
$
761,867
$
757,012
4,855
Supplies and materials
19,750
23,750
23,100
650
Other services and charges
130,881
132,361
103,868
28,493
Capital outlay
-
-
-
Total Municipal Court
894,262
917,978
883,980
33,998
Purchasing:
Personal services
$
256,393
$
271,328
$
270,942
386
Supplies
1,400
1,400
861
539
Other services and charges
11,837
11,837
9,257
2,580
Capital Outlay
-
-
-
Total Purchasing
269,630
284,565
281,060
3,505
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CITY OF LA PORTE, TEXAS Page 2 of 6
General Fund
Schedule of Expenditures -Budget and Actual
For the year ended September 30, 2018
Variance with
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
General Government (continued)
City Secretary:
Personal services
S
370,224
S
384,097
S
383,236
861
Supplies and materials
18,200
18,915
16,531
2,384
Other services and charges
97,570
93,855
66,819
27,036
Capital outlay
-
-
-
Total City Secretary
485,994
496,867
466,586
30,281
Legal:
Personal services
S
13,245
S
13,245
S
13,245
-
Supplies and materials
-
-
-
Other services and charges
171,000
171,000
138,405
32,595
Capital outlay
-
-
-
Total Legal
184,245
184,245
151,650
32,595
City Council:
Personal services
S
37,462
S
37,907
S
37,632
275
Supplies and materials
9,500
9,500
7,859
1,641
Other services and charges
20,121
20,121
17,412
2,709
Capital outlay
-
-
-
Total City Council
67,083
67,528
62,903
4,625
Total Administration
6,226,658
6,613,804
5,797,693
816,111
Finance:
Accounting:
Personal services
S
757,634
S
777,342
S
713,255
S 64,087
Supplies
7,650
9,390
9,401
(11)
Other services and charges
91,701
105,124
81,367
23,757
Capital Outlay
-
-
-
Total Accounting
856,985
891,856
804,023
87,833
Nondepartmental:
Personal services
S
537,570
S
537,570
S
491,990
45,580
Supplies
5,300
5,300
4,282
1,018
Other services and charges
2,418,166
1,261,455
916,769
344,686
Capital Outlay
-
-
-
Total Nondepartmental
2,961,036
1,804,325
1,413,041
391,284
Tax Office:
Personal services
S
180,452
S
173,754
S
110,641
63,113
Supplies and materials
3,880
3,880
2,490
1,390
Other services and charges
302,270
302,270
284,766
17,504
Capital outlay
-
-
-
Total Tax Office
486,602
479,904
397,897
82,007
Total Finance
4,304,623
3,176,085
2,614,961
561,124
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CITY OF LA PORTE, TEXAS
General Fund
Schedule of Expenditures - Budget and Actual
For the year ended September 30, 2018
General Government (continued)
Planning and Engineering:
Planning and Engineering:
Personal services
Supplies
Other services and charges
Capital Outlay
Total Planning and Engineering
Inspection:
Personal services
Supplies
Other services and charges
Capital Outlay
Total Inspection
Total Planning and Engineering
Total General Government
Public Safety
Fire
Fire Prevention:
Personal services
Supplies
Other services and charges
Capital Outlay
Total Fire Prevention
Fire suppression:
Personal services
Supplies
Other services and charges
Capital Outlay
Total Fire Suppression
Emergency medical services:
Personal services
Supplies
Other services and charges
Capital Outlay
Total Emergency Services
Total Fire
Page 3 of 6
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
$ 515,841
$ 530,554
$ 476,147
54,407
12,280
12,2280
7,892
4,388
119,447
119,447
83,2200
36,247
647,568
662,2281
567,2239
95,042
$ 748,044
$ 769,856
$ 761,908
7,948
22,460
23,460
22,926
534
179,843
178,843
92,059
86,784
950,347
972,159
876,893
95,266
1,597,915
1,634,440
1,444,132
190,308
12,129,196
11,424,329
9,856,786
1,567,543
$ 330,307 $ 335,581 $ 325,317 10,264
11,171 11,171 10,953 218
11,483 12,483 11,857 626
$ 1,521,957 $ 1,532,707
49,992 49,992
263,734 284,734
$ 1,493,794 38,913
52,528 (2,536)
279,797 4,937
$ 1,847,809
$ 1,924,717
$ 2,024,926
(100,2-09)
182,175
199,2221
199,148
73
772,694
772,694
671,825
100,869
33,000
30,579
27,115
3,464
2,835,678
2,927,2211
2,923,014
4,197
5,024,322
5,153,879
5,097,2260
56,619
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CITY OF LA PORTE, TEXAS
Page 4 of 6
General Fund
Schedule of Expenditures -Budget and Actual
For the year ended September 30, 2018
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Public Safety (continued)
Police
Police Administration:
Personal services
S 707,844
S 751,703
S 719,437
S 32,266
Supplies
35,625
39,025
35,337
3,688
Other services and charges
253,338
256,099
229,952
26,147
Capital Outlay
15,800
9,514
6,814
2,700
Total Police Administration
1,012,607
1,056,341
991,540
64,801.00
Police Patrol
Personal services
S 5,667,461
S 5,803,676
S 5,528,350
275,326
Supplies
231,090
296,918
296,914
4
Other services and charges
905,338
901,267
904,998
(3,731)
Capital Outlay
151,680
103,532
86,142
17,390
Total Police Patrol
6,955,569
7,105,393
6,816,404
288,989
Criminal Investigation
Personal services
S 2,127,569
S 2,198,966
S 2,049,528
149,438
Supplies
60,709
65,309
59,667
5,642
Other services and charges
180,819
175,599
168,010
7,589
Capital Outlay
-
-
-
Total Criminal Investigation
2,369,097
2,439,874
2,277,205
162,669
Support Services
Personal services
S 2,636,241
S 2,753,980
S 2,577,886
176,094
Supplies
112,572
117,522
116,945
577
Other services and charges
202,531
202,531
194,726
7,805
Capital Outlay
-
-
-
Total Support Services
2,951,344
3,074,033
2,889,557
184,476
Total Police
13,288,617
13,675,641
12,974,706
700,935
Total Public Safety
18,312,939
18,829,520
18,071,966
757,554
Public Works
Public Works Administration:
Personal services
S 595,115 S
636,657 S
636,140
517
Supplies and materials
8,740
14,364
12,831
1,533
Other services and charges
49,214
45,044
41,200
3,844
Capital outlay
12,000
12,000
12,000
Total Public Works Administration
665,069
708,065
702,171
5,894
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CITY OF LA PORTE, TEXAS
Page 5 of 6
General Fund
Schedule of Expenditures - Budget and Actual
For the year ended September 30, 2018
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Public Works (continued)
Streets:
Personal services
$
1,715,595
$
1,665,981
$
1,663,957
2,024
Supplies
131,610
132,606
116,265
16,341
Other services and charges
800,393
769,100
754,301
14,799
Capital Outlay
8,500
7,504
5,924
1,580
Total Streets
2,656,098
2,575,191
2,540,447
34,744
Total Public Works
3,321,167
3,283,256
3,242,618
40,638
Health and Sanitation
Residential solidwaste:
Personal services
$
1,302,767
$
1,330,545
$
1,355,635
(25,090)
Supplies
265,055
284,055
283,053
1,002
Other services and charges
1,132,088
1,242,088
1,215,006
27,082
Capital Outlay
-
-
-
Total Residential Solidwaste
2,699,910
2,856,688
2,853,694
2,994
Commercial solidwaste:
Other services and charges
17,500
17,500
17,420
80
Total Commercial Solidwaste
17,500
17,500
17,420
80
Total Health and Sanitation
2,717,410
2,874,188
2,871,114
3,074
Culture & Recreation
Park Maintenance:
Personal services
$
1,418,809
$
1,506,579
$
1,508,163
$ (1,584)
Supplies and materials
121,750
128,750
154,258
(25,508)
Other services and charges
846,088
954,693
953,707
986
Capital outlay
84,000
10,790
10,450
340
Total Park Maintenance
2,470,647
2,600,812
2,626,578
(25,766)
Recreation:
Personal services
$
725,548
$
689,149
$
613,702
75,447
Supplies
84,818
84,818
81,981
2,837
Other services and charges
76,211
76,211
82,460
(6,249)
Capital Outlay
76,800
63,515
52,086
11,429
Total Recreation
963,377
913,693
830,229
83,464
Special Services:
Personal services
$
400,605
$
406,809
$
349,953
56,856
Supplies
21,800
21,800
20,382
1,418
Other services and charges
63,252
67,252
67,081
171
Capital Outlay
-
-
-
Total Special Services
485,657
495,861
437,416
58,445
117
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CITY OF LA PORTE, TEXAS
General Fund
Schedule of Expenditures - Budget and Actual
For the year ended September 30, 2018
Culture & Recreation (continued)
Parks Administration:
Personal Services
Supplies
Other Services and Charges
Capital Outlay
Total Parks Administration
Golf Course - Club House
Personal Services
Supplies
Other Services and Charges
Capital Outlay
Total Golf Course
Golf Course - Maintenance
Personal Services
Supplies
Other Services and Charges
Capital Outlay
Total Golf Course
Total Culture & Recreation
Total General Fund
Page 6 of 6
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
$
517,599
$
531,978
$
505,343
26,635
8,950
8,950
8,228
722
96,079
96,079
48,097
47,982
622,628
637,007
561,668
75,339
$
448,485
$
483,914
$
447,075
36,839
63,490
71,889
68,064
3,825
74,864
74,164
60,637
13,527
11,000
3,301
-
3,301
597,839
633,268
575,776
57,492
$
637,244
$
655,862
$
636,481
19,381
153,125
173,992
112,405
61,587
162,796
167,796
168,627
(831)
112,000
86,133
83,997
2,136
1,065,165
1,083,783
1,001,510
82,273
6,205,313
6,364,424
6,033,177
331,247
$
42,686,025
$
42,775,717
$
40,075,661
$ 2,700,056
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CITY OF LA PORTE, TEXAS
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
September 30, 2018
Assets
Current Assets:
Cash and cash equivalents
Investments
Other receivables, net of allowance
Due from other governments
Inventories
Total Current Assets
Noncurrent Assets:
Capital assets:
Land and improvements
Equipment
Less accumulated depreciation
Total Non -Current Assets
Total Assets
Liabilities
Current liabilities:
Accounts payable
Accrued liabilities
Unearned revenue
Claims and judgments
Total Current Liabilities
Noncurrent Liabilities:
Accrued compensated absences
Total Noncurrent Liabilities
Total Liabilities
Net Position
Invested in capital assets
Unrestricted
Total Net Position
Vehicle
Employee
Replacement
Health
Fund
Insurance
Technology
Total
2,070,460
703,967
1,035,514
$ 3,809,941
1,973,496
647,571
952,557
3,573,624
7,478
18,509
3,076
29,063
-
119,927
-
119,927
45,035
-
-
45,035
4,096,469
1,489,974
1,991,147
7,577,590
- -
60,914
60,914
19,421,008 -
751,890
20,172,898
(10,316,509) -
(348,399)
(10,664,908)
9,104,499 -
464,405
9,568,904
13,200,968 1,489,974
2,455,552
17,146,494
22,561 881
10,734 1,110
- 16,057
- 546,849
33,295 564,897
31,081 -
31,081 -
64,376 564,897
- 23,442
- 11,844
- 16,057
546,849
- 598,192
31,081
- 31,081
629,273
9,104,499 - 464,405 9,568,904
4,032,093 925,077 1,991,147 6,948,317
$ 13,136,592 $ 925,077 $ 2,455,552 $ 16,517,221
119
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Operating Revenues
Charges for Services
Other
Total Operating Revenues
Operating Expenses
CITY OF LA PORTE, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
For the Year Ended September 30, 2018
Vehicle Employee
Replacement Health
Fund Insurance Technology
3,100,799 5,426,197 433,426
Total
$ 8,960,422
283
3,100,799 5,426,480 433,426 8,960,705
Personnel
744,028
316,194
-
1,060,222
Other expenses
143,824
8,176,691
123,395
8,443,910
Supplies and materials
179,572
-
15,365
194,937
Depreciation
1,685,984
-
101,315
1,787,299
Total Operating Expenses
2,753,408
8,492,885
240,075
11,486,368
Operating Income (Loss)
347,391
(3,066,405)
193,351
(2,525,663)
Non -Operating Revenues
Investment Earnings
40,105
10,137
21,074
71,316
Gain/loss on disposal of capital assets
(1,127)
-
-
(1,127)
Total Non -Operating Revenues
38,978
10,137
21,074
70,189
Income (Loss) Before Contributions
and Transfers
386,369
(3,056,268)
214,425
(2,455,474)
Contributions and Transfers
Capital contributions
57,474
- -
57,474
Transfers from other funds
-
2,745,037 -
2,745,037
Transfers (to) other funds
(20,585)
- -
(20,585)
Total Contributions and Transfers
36,889
2,745,037 -
2,781,926
Change in Net Position
423,258
(311,231) 214,425
326,452
Net position, beginning
12,713,334
1,236,308 2,241,127
16,190,769
Net position, Ending $
13,136,592
$ 925,077 $ 2,455,552
$ 16,517,221
120i
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CITY OF LA PORTE, TEXAS
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the Year Ended September 30, 2018
Cash Flows from Operating Activities
Receipts from customers
Disbursed for personnel services
Disbursed for goods and services to suppliers
Net Cash Provided (Used) by Operating
Activities
Cash Flows From Noncapital Financing Activities
Transfer from other funds
Transfers to other funds
Net Cash Provided by Noncapital
Financial Activities
Cash Flows from Capital & Related Financing
Activities
Proceeds from the sale of equipment
Acquisition and construction of capital assets
Activities
Cash Flows from Investing Activities
Interest received
Purchase of Investments
Sale of investments
Net Cash Provided by Investing Activities
Net Increase (Decrease) in Cash and Cash
Equivalents
Cash and Cash Equivalents, Beginning
Cash and Cash Equivalents, Ending
Reconciliation of Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities
Operating income (loss)
Adjustments to reconcile operating income to
net cash used by operating activities:
Depreciation
(Increase) decrease in accounts receivable
(Increase) in inventories
Increase (decrease)in accounts payable
Increase (decrease in accrued liabilities
Increase (decrease) in unearned revenue
Increase (decrease) in claims
Increase (decrease) in compensated absences
Net Cash Provided (Used) by Operating
Activities
Vehicle Employee
Replacement Health
Fund Insurance Technology Total
$ 3,096,225 $ 5,425,856 $ 432,435 $ 8,954,516
(753,874) (316,200) - (1,070,074)
(335,293) (8,107,951) (187,689) (8,630,933)
2,007,058 (2,998,295) 244,746 (746,491)
2,745,037 2,745,037
(20,585) (20,585)
(20,585) 2,745,037 2,724,452
25,500
25,500
(759,118)
(61,843)
(820,961)
(733,618)
-
(61,843)
(795,461)
40,105
10,137
21,074
71,316
(1,213,471)
(180,968)
(334,418)
(1,728,857)
379,057
182,961
124,381
686,399
(794,309)
12,130
(188,963)
(971,142)
458,546 (241,128) (6,060) 211,358
1,611,914 945,095 1,041,574 3,598,583
$ 2,070,460 $ 703,967 $ 1,035,514 $ 3,809,941
$ 347,391 $ (3,066,405) $ 193,351 (2,525,663)
1,685,984
101,315 1,787,299
(4,574)
(6,590)
(991) (12,155)
(7,126)
- (7,126)
(4,771)
(7,447)
(48,929) (61,147)
(329)
(6)
(335)
-
5,966
5,966
76,187
76,187
(9,517)
-
(9,517)
$ 2,007,058 $ (2,998,295) $ 244,746 $ (746,491)
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STATISTICAL SECTION
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STATISTICAL SECTION
This part of the City's comprehensive annual financial report presents detailed information as a
context for understanding what the information in the financial statements, note disclosures and
required supplementary information says about the City's overall financial health.
Contents
Page
Financial Trends
These schedules contain trend information to help the reader understand
how the City's financial performance and well-being have changed over 126
time.
Revenue Capacity
These schedules contain information to help the reader assess the City's 137
most significant local revenue source, the property tax.
Debt Capacity
These schedules present information to help the reader assess the
affordability of the City's current levels of outstanding debt and the City's 144
ability to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the
reader understand the environment within which the City's financial 148
activities take place.
Operating Information
These schedules contain service and infrastructure data to help the reader
understand how the information in the City's financial report relates to the 150
services the City provides and the activities it performs.
Sources - Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial report for the relevant year.
125i
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City of LaPorte, Texas
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
2009 2010 2011 2012
Governmental Activities
Investment in capital assets
$ 32,667,469 $
35,194,777 $
37,323,705
$ 46,813,655
Restricted
16,169,693
18,108,170
8,060,185
8,728,729
Unrestricted
16,838,404
13,904,445
26,859,397
21,621,240
Total Governmental Activities
Net Position
$ 65,675,566 $
67,207,392 $
72,243,287
$ 77,163,624
Business -type Activities
Investment in capital assets
Restricted
Unrestricted
Total Business -type Activities
Net Position
Primary Government
Net investment in capital assets
Restricted
Unrestricted
Total Primary Government
Net Position
$ 40,206,362 $
40,595,009 $
37,606,236
$ 37,566,663
1,352,867
1,459,834
680,136
559,309
2,472,578
2,027,477
4,199,014
3,790,669
$ 44,031,807 $
44,082,320 $
42,485,386
$ 41,916,641
$ 72,873,832
$ 75,789,786
$ 74,929,941
$ 84,380,318
17,522,560
19,568,004
8,740,321
9,288,038
19,310,982
15,931,923
31,058,411
25,411,909
$ 109,707,374
$ 111,289,713
$ 114,728,673
$ 119,080,265
126
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Table 1
2013
2014
2015
2016
2017
2018
$ 49,304,074
$ 54,506,024
$ 43,582,704
$ 48,367,017
$ 44,468,918
$ 43,421,145
8,902,103
11,088,233
14,507,643
17,854,935
24,105,852
13,404,093
22,529,801
18,634,881
21,693,064
23,690,222
26,907,445
1,505,194
$ 80,735,978
$ 84,229,138
$ 79,783,411
$ 89,912,174
$ 95,482,215
$ 58,330,432
$ 36,347,233
$ 35,872,947
$ 34,807,773
$ 34,291,664
$ 33,782,624 $ 32,199,968
2,096,178
1,930,369
1,250,850
846,400
520,000 -
2,300,991
2,669,258
4,110,877
5,344,130
7,661,080 8,011,016
$ 40,744,402
$ 40,472,574
$ 40,169,500
$ 40,482,194
$ 41,963,704 $ 40,210,984
$ 85,651,307
$ 90,378,971
$ 78,390,476
$ 82,658,681
$ 78,251,542
$ 75,621,113
10,998,281
13,018,602
15,758,492
18,701,335
24,625,852
13,404,093
24,830,792
21,304,139
25,803,941
29,034,352
34,568,525
9,516,210
$ 121,480,380
$ 124,701,712
$ 119,952,909
$ 130,394,368
$ 137,445,919
$ 98,541,416
127i
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City of La Porte, Texas
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
2009
2010
2011
2012
Expenses
Governmental Activities
General government
$
11,442,946
$
11,497,476
$
14,574,511
$
14,091,176
Public safety
15,495,372
17,108,837
16,305,997
17,374,566
Public works
8,095,274
4,601,382
6,279,510
3,784,047
Health, welfare and sanitation
2,378,808
2,521,222
2,453,634
2,423,898
Culture and recreation
4,222,945
6,483,006
6,032,602
6,361,313
Interest on long-term debt
1,527,041
1,556,740
1,871,431
1,268,112
Total Governmental Activities Expenses
43,162,386
43,768,663
47,517,685
45,303,112
Business -type activities
Water services
4,832,857
5,721,303
6,942,077
7,691,088
Sewer services
2,603,424
2,674,456
3,093,526
2,932,057
Airport
183,186
181,040
194,392
182,700
Bay Forest Golf Course
1,436,792
1,485,097
-
-
Sylvan Beach Convention Center
25,649
-
-
-
Total Business -type Activities Expenses
9,081,908
10,061,896
10,229,995
10,805,845
Total Primary Government Expenses
$
52,244,294
$
53,830,559
$
57,747,680
$
56,108,957
Program Revenues
Governmental Activities
Charges for services
General government
$
3,060,864
$
3,116,325
$
711,994
$
843,898
Public safety
1,681,028
1,593,247
3,506,254
3,127,595
Public works
4,610
1,066,936
329,502
267,534
Health, welfare and sanitation
1,848,717
1,842,135
2,046,369
2,197,491
Culture and recreation
447,719
660,780
1,474,247
1,384,810
Operating grants and contributions
-
-
-
-
General government
-
-
7,649
239,654
Public safety
5,092,923
928,389
610,967
431,076
Public works
-
-
427,732
766,127
Health, welfare and sanitation
59,112
64,025
Culture and recreation
13,260
11,633
107,419
78,348
Capital grants and contributions
-
-
-
-
General government
-
-
-
Public works
1,259,614
-
1,338
644
Total Governmental Activities Program
Revenues
13,467,847
9,283,470
9,223,471
9,337,177
Business -type Activities
Charges for services:
Water services
4,520,092
3,849,661
6,267,432
6,054,683
Sewer services
3,362,791
3,307,484
3,534,535
3,600,979
Airport
53,325
53,216
56,429
28,340
Bay Forest golf Course
1,067,105
1,002,234
-
-
Sylvan Beach Convention Center
2,479
-
-
-
Capital grants and contributions
1,785,653
860,304
1,441,674
858,431
Total Business -type Activities Program Revenues
10,791,445
9,072,899
11,300,070
10,542,433
Total Primary Government Program Revenues
$
24,259,292
$
18,356,369
$
20,523,541
$
19,879,610
Net (Expense)/Revenue
Governmental activities
$
(29,694,539)
$
(34,485,193)
$
(38,294,214)
$
(35,965,935)
Business -type activities
1,709,537
(988,997)
1,070,075
(263,412)
Total Primary Government Net Expense
$
(27,985,002)
$
(35,474,190)
$
(37,224,139)
$
(36,229,347)
120 ��oom�o�� o�m�ouuuuv�om�o uumou �mm� �mm� m
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Table 2
2013
2014
2015
2016
2017
2018
$ 13,854,988
$ 14,115,210
$ 12,962,387
$ 14,255,413
$ 15,735,976
$ 15,832,003
17,765,388
20,436,450
19,081,622
21,114,939
21,446,421
21,673,188
4,451,455
6,259,764
4,088,146
4,422,464
4,930,721
9,796,326
2,327,982
2,519,298
5,748,206
6,059,896
3,899,678
4,685,795
5,721,611
5,854,546
3,497,174
3,439,722
6,177,554
6,513,794
1,384,875
1,403,628
1,585,354
1,782,508
2,506,004
1,059,007
45,506,299
50,588,896
46,962,889
51,074,942
54,696,354
59,560,113
8,207,204
7,731,776
5,064,287
4,985,902
6,269,356
8,788,113
2,598,649
2,802,013
4,347,309
4,374,763
4,267,901
1,926,133
210,323
229,603
230,006
210,590
210,324
133,093
11,016,176
10,763,392
9,641,602
9,571,255
10,747,581
10,847,339
$ 645,517
$
825,532
$
3,981,230
$
3,035,577
$
2,538,477
$ 3,397,779
3,313,735
3,208,256
1,664,782
1,913,289
1,553,872
1,125,345
265,962
269,830
336,917
343,682
354,096
267,358
2,204,153
2,223,234
2,255,095
2,244,061
2,401,783
2,231,727
1,444,002
1,509,412
2,057,253
1,614,085
1,584,863
1,547,786
2,841
2,982
-
-
-
-
433,367
545,738
307,016
436,375
1,119,223
352,886
20,168
258,119
23,143
17,731
123,435
2,559
393,035
1,207,958
1,205
756
751
650
470
292
3,030,480
607,357
582,045
537,786
8,723,250
10,051,353
13,657,121
10,212,913
10,258,545
9,463,876
5,693,598
5,406,545
4,308,578
4,795,719
5,982,350
8,726,710
3,420,370
3,422,627
3,587,825
3,652,071
3,551,728
1,320,816
56,246
56,157
59,181
62,849
60,651
61,879
1,398,291
1,125,777
787,285
534,168
126,359
126,359
10,568,505
10,011,106
8,742,869
9,044,807
9,721,088
10,235,764
$ 19,291,755
$
20,062,459
$
22,399,990
$
19,257,720
$
19,979,633
$ 19,699,640
$ (36,783,049)
$
(40,537,543)
$
(33,305,768)
$
(40,862,029)
$
(44,437,809)
$ (50,096,237)
(447,671)
(752,286)
(898,733)
(526,448)
(1,026,493)
(611,575)
$ (37,230,720)
$
(41,289,829)
$
(34,204,501)
$
(41,388,477)
$
(45,464,302)
$ (50,707,812)
127 ��oom�o�� o�m�ouuuuv�om�o uumou �mm� �mm� m
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City of LaPorte, Texas
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
2009
2010
2011
2012
General Revenues and Other Changes in
Net Position
Governmental Activities
Property taxes
$
16,391,237
$
17,742,405
$
17,163,861
$
17,251,131
Industrial payments
10,554,872
10,732,488
10,192,582
10,471,444
Sales and use taxes
5,787,406
5,913,679
6,235,537
8,267,162
Franchise taxes
2,160,425
2,170,699
2,195,824
2,311,944
Investment earnings
687,567
293,943
216,465
142,951
Other revenues
92,599
164,237
374,727
167,922
Gain/(Loss) no sale of capital assets
-
-
4,244,239
1,939,699
Transfers
(778,855)
(1,000,432)
2,706,874
334,029
Total Governmental Activities
34,895,251
36,017,019
43,330,109
40,886,282
Business -type Activities
Investment earnings
72,814
39,078
33,243
12,309
Other revenues
-
-
6,622
16,387
Gain/(Loss) on saleof capital assets
-
-
-
-
Transfers
778,855
1,000,432
(2,706,874)
(334,029)
Total Business -type Activities
851,669
1,039,510
(2,667,009)
(305,333)
Total Primary Government
$
35,746,920
$
37,056,529
$
40,663,100
$
40,580,949
Change in Net Position
Governmental activities
$
5,200,712
$
1,531,826
$
5,035,895
$
4,920,347
Business -type activities
2,561,206
50,514
(1,596,934)
(568,745)
Total Primary Government
$
7,761,918
$
1,582,340
$
3,438,960
$
4,351,602
130 �u,�„ �����,��
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Table 2 (Page 2 of 2)
2013
2014
2015
2016
2017
2018
$ 17,782,090
$
19,925,095
$
20,765,774
$
24,098,174
$
23,857,654
$
25,413,898
11,107,848
11,554,949
12,269,152
14,377,602
14,270, 899
14,147,728
8,717,613
10,104,500
10,743,862
9,862,705
10,859,215
12,544,803
2,184,020
2,252,404
2,411,827
2,300,464
2,252,253
2,621,035
84,170
106,024
204,346
380,268
563,868
1,228,759
432,405
458,770
164,004
766,683
601,136
251,508
720,356
(371,039)
(1,504,570)
(795,104)
(2,397,175)
(1,922,963)
41,028,502
44,030,703
45,054,395
50,990,792
50,007,850
54,284,768
8,468
8,624
25,440
44,038
110,828
152,557
36,378
100,795
-
-
-
-
(720,356)
371,039
1,504,570
795,104
2,397,175
1,922,963
(675,510)
480,458
1,530,010
839,142
2,508,003
2,075,520
$ 40,352,992
$
44,511,161
$
46,584,405
$
51,829,934
$
52,515,853
$
56,360,288
$ 4,245,453
$
3,493,160
$
11,748,627
$
10,128,763
$
5,570,041
$
4,188,531
(1,123,181)
(271,828)
631,277
312,694
1,481,510
1,463,945
$ 3,122,272
$
3,221,332
$
12,379,904
$
10,441,457
$
7,051,551
$
5,652,476
131 �u,�„ �����,��
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General Fund
Nonspendable
Committed
Assigned
Unassigned
Total General Fund
City of LaPorte, Texas
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2009
2010
2011
2012
$ 102,203
$ 135,162
$ 138,607
$ 94,401
109,546
132,558
95,923
30,003
13,382,280
11,836,769
19,118,624
23,840,153
$ 13,594,029
$ 12,104,489
$ 19,353,154
$ 23,964,557
All Other Governmental Funds
Restricted $ 2,761,058
Committed 21,460,995
Unassigned -
Total All Other
Governmental Funds $ 24,222,053
$ 4,420,190
24,019,140
$ 14,084,212
9,078,724
$ 28,439,330 $ 23,162,936
$ 12,572,942
6,553,417
(30,832)
$ 19,095,527
132..
32 „������ �,������������� „���� ��������u �u,�„ �„ ����� ,h
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Table 3
2013 2014 2015 2016 2017
2018
$ 125,190
$ 102,775
$ 88,954
$ 89,165
$ 102,058
$ 122,784
3,500,000
8,500,000
7,000,000
6,000,000
2,000,000
-
103,690
78,182
257,147
4,439,879
297,359
420,854
23,856,087
21,294,383
25,216,547
29,385,827
40,500,147
46,763,435
$ 27,584,967
$ 29,975,340
$ 32,562,648
$ 39,914,871
$ 42,899,564
$ 47,307,073
$ 12,193,956
5,585,628
$ 14,177,078
2,961,849
(790)
$ 24,421,383
1,916,608
$ 24,860,811
2,977,676
$ 34,573,658
4,555,870
$ 41,275,328
$ 17,779,584 $ 17,138,137 $ 26,337,991 $ 27,838,487 $ 39,129,528 $ 41,275,328
133 „������ �,������������� „���� ��������u �u,�„ �u,�„ ����� h
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City of LaPorte, Texas
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
Revenues
Taxes
Licenses and permits
Fines and forfeuitures
Charges for services
Intergovernmental
Interest
Miscellaneous
Total Revenues
Expenditures
General government
Public safety
Public works
Health and sanitation
Culture and recreation
Debt service:
Principal
Interest
Bond issuance cost
Capital outlay
Total Expenditures
(Deficiency) of Revenues
(Under) Expenditures
Other Financing Sources (Uses)
General obligation bonds issued
Refunding bonds issued
Certificate obligation bonds issued
Premium on refunding bonds issued
Premium on certificate obligations
Payment to refunding bond escrow agent
Transfers in
Transfers out
Sale of capital assets
Insurance recoveries
Total Other Financing Sources (Uses)
Net Change in Fund Balances
2009
2010
2011
2012
$ 34,929,693
$ 36,681,503
$ 35,760,570
$ 38,352,720
641,614
476,478
312,962
465,052
1,832,570
1,802,785
1,723,590
1,758,101
4,469,922
6,083,767
5,680,416
5,957,389
4,868,313
988,532
917,206
1,239,434
610,270
262,993
193,301
128,939
105,221
125,142
241,670
36,354
47,457,603
46,421,200
44,829,715
47,937,989
9,869,159
9,787,606
10,288,502
10,461,877
13,858,540
14,611,737
15,688,305
15,751,731
6,663,539
2,818,921
3,118,074
3,438,629
2,087,069
2,232,848
2,182,184
2,225,768
3,817,253
5,048,448
5,313,523
5,260,591
1,695,000
1,755,000
1,740,000
2,170,000
1,572,212
1,387,566
1,871,371
1,519,769
-
200,000
-
150,897
15,556,898
10,843,496
8,713,827
8,583,249
55,119,670
48,685,622
48,915,786
49,562,511
(7,662,067)
(2,264,422)
(4,086,071)
(1,624,522)
-
6,265,000
-
-
-
4,295,000
-
9,435,000
-
224,008
-
364,013
14,231,895
(4,409,763)
-
(9,638,626)
(12,118,702)
9,158,123
4,248,140
2,710,677
136,559
(10,545,233)
(5,011,924)
(2,643,894)
-
5,024
6,822,126
1,941,346
2,249,752
4,992,159
6,058,342
2,168,516
$ (5,412,315) $ 2,727,737 $ 1,972,271 $ 543,994
Debt service as a percentage of noncapital expenditures
8.3% 8.3% 9.0% 9.0%
134
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Table 4
2013
2014
2015
2016
2017
2018
$ 39,834,904
$ 43,837,240
$ 46,155,069
$ 50,376,219
$ 51,574,722
$ 54,591,769
368,130
497,756
1,346,552
596,451
535,741
668,808
1,886,763
1,790,849
1,953,698
1,996,073
1,965,249
2,092,419
6,008,845
6,305,127
6,994,772
6,555,228
6,069,248
5,953,581
568,052
1,572,360
3,195,238
1,024,097
1,077,893
893,006
76,027
96,409
184,029
349,551
531,369
1,157,443
425,845
261,204
398,872
728,390
517,828
298,792
49,168,566
54,360,945
60,228,230
61,626,009
62,272,050
65,655,818
11,043,438
13,828,179
11,953,166
11,706,047
13,301,718
14,486,950
16,321,608
17,428,040
17,698,818
18,323,687
18,873,276
18,377,804
3,247,404
3,432,583
2,916,113
3,028,953
4,161,399
4,429,378
2,244,341
2,334,184
2,457,565
2,644,295
2,730,308
2,871,114
5,226,886
5,440,724
5,727,700
5,848,613
5,998,452
6,332,061
2,365,000
2,640,000
4,625,582
4,281,085
4,178,629
3,370,000
1,385,204
1,217,883
1,589,644
1,451,075
1,385,122
1,156,923
-
153,884
-
-
-
5,499,508
5,446,287
6,331,893
4,439,319
3,840,207
3,428,834
47,333,389
51,921,764
53,300,481
51,723,074
54,469,111
54,453,064
1,835,177
2,439,181
6,927,749
9,902,935
7,802,939
11,202,754
10,635,000
-
9,300,000
-
3,165,000
-
-
-
7,770,000
-
-
-
608,166
-
403,795
-
-
-
365,502
-
-
-
(9,749,587)
-
(3,490,716)
-
-
3,883,920
3,911,990
3,069,474
2,851,124
3,684,995
5,200,304
(3,629,974)
(4,761,324)
(6,556,417)
(3,979,419)
(7,849,825)
(9,849,749)
215,342
500
-
-
2,625
-
-
-
210,854
-
-
-
469,288
(690,255)
4,859,413
(1,050,216)
6,472,795
(4,649,445)
$ 2,304,465
$ 1,748,926
$ 11,787,162
$ 8,852,719
$ 14,275,734
$ 6,553,309
9.0%
8.3%
13.2%
12.1%
11.0%
8.9%
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Table 5
City of LaPorte, Texas
ASSESSED VALUE AND ESTMATED VALUE
OF TAXABLE PROPERTY
Last Ten Fiscal Years
Assessed Value
Fiscal Year
Less Other Total Taxable
Total
Estimated
as a Percent of
Ended
Real
Personal
Exemptions & Assessed
Direct
Actual Taxable
Actual Taxable
June 30
Property
Property
Abatements Value
Tax Rate
Value
Value
2009
$ 2,237,095,319
$ 469,916,389
502,091,647 $ 2,204,920,061
0.71000
$ 2,204,920,061
100%
2010
2,261,046,846
582,963,159
515,111,496 2,328,898,509
0.71000
2,328,898,509
100%
2011
2,055,914,368
672,621,147
514,928,797 2,213,606,718
0.71000
2,213,606,718
100%
2012
2,079,843,021
720,515,678
535,441,621 2,264,917,078
0.71000
2,264,917,078
100%
2013
2,080,199,179
797,558,553
536,721,284 2,341,036,448
0.71000
2,341,036,448
100%
2014
2,176,582,621
986,494,475
590,232,231 2,572,844,865
0.71000
2,752,844,865
100%
2015
2,626,580,963
745,093,978
617,133,762 2,754,541,179
0.71000
2,754,541,179
100%
2016
2,692,041,032
978,850,207
629,133,265 3,041,758,024
0.71000
3,041,758,024
100%
2017
3,025,879,671
880,297,401
751,959,455 3,154,217,617
0.71000
3,154,217,617
100%
2018
3,270,392,733
830,253,210
814,706,643 3,285,939,300
0.71000
3,285,939,300
100%
Source - Hams County Certified Tax Rolls and Corrections
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City of LaPorte, Texas
PROPERTY TAX RATES -
DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
City of La Porte by fund
General
Debt service
Total Direct Rates
Harris County Flood Control District
Harris County
Port of Houston Authority
Harris County Board of Education
Hospital District
La Porte ISD
San Jacinto Jr. College District
Total Direct and Overlapping Rates
Tax rates per $100 of assessed valuation
Source: Harris County Appraisal District
2009
2010
2011
2012
0.61900
0.61900
0.60500
0.60500
0.09100
0.09100
0.10500
0.10500
0.71000
0.71000
0.71000
0.71000
0.02922
0.02923
0.02809
0.02809
0.39224
0.38805
0.39117
0.40021
0.01636
0.02054
0.01856
0.01952
0.00605
0.00658
0.00658
0.00662
0.19216
0.19216
0.19216
0.18216
1.32500
1.32500
1.35500
1.33000
0.17080
0.17628
0.18560
0.18560
2.84183
2.84784
2.88716
2.86220
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Table 6
2013
2014
2015
2016
2017
2018
0.64000
0.61400
0.60500
0.60500
0.60500
0.60500
0.07000
0.09600
0.10500
0.10500
0.10500
0.10500
0.71000
0.71000
0.71000
0.71000
0.71000
0.71000
0.02827
0.02736
0.02733
0.02829
0.02831
0.02878
0.41455
0.41731
0.41923
0.41656
0.41801
0.41858
0.01716
0.01531
0.01342
0.01334
0.01256
0.01155
0.00636
0.00600
0.00540
0.00520
0.00520
0.00519
0.17000
0.17000
0.17000
0.17179
0.17110
0.17108
1.33000
1.33000
1.45000
1.42000
1.38000
1.38000
0.18560
0.18560
0.17578
0.18238
0.18334
0.17933
2.86194
2.86158
2.97116
2.94756
2.90852
2.90451
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Table 7
City of LaPorte,
Texas
PRINCIPAL PROPERTY
TAXPAYERS
Current Year and
Nine
Years Ago
2018
2009
%of
%of
Taxable
Total Taxable
Taxable
Total Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Rank
Value
Value
Rank
Value
2019
Hrus Underwood LLC
$ 127,186,309
1
3.87%
Liberty Property
122,066,968
2
3.71%
Equistar Chemicals LP
61,880,868
3
1.88%
Dnow LP
42,547,078
4
1.29%
Oxy Vinyls LP
40,697,859
5
1.24%
INEOS USA LLC
37,999,780
6
1.16%
Centerpoint Energy Inc
26,646,522
7
0.81%
Dow Chemical
25,349,178
8
0.77%
Ravago Americas LLC
24,920,075
9
0.76%
Ashland Industries Europe,Gmbh
23,727,359
10
0.72%
2009
Port Crossing Land LP
$ 56,971,629
1
2.58%
Conoco Phillips Co.
49,954,346
2
2.27%
Oxy Vinyls LP
49,177,149
3
Equistar Chemicals LP
48,358,225
4
Underwood Dist
38,866,438
5
Incos USA LLC
38,002,780
6
Wilson Supply
36,620,565
7
PPG Industries Inc.
29,927,698
8
Granite Underwood Dist Ctr LP
24,412,945
9
Dow Chemical
24,406,127
10
Subtotal
533,021,996
16.22%
396,697,902
17.99%
Other Taxpayers
2,752,917,304
83.78%
1,808,222,159
82.01%
Total
$ 3,285,939,300
100.00%
$ 2,204,920,061
100.00%
140i
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Table 8
Fiscal Year
Ended
September 30
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
City of La Porte, Texas
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Collected within the
Taxes levied
Fiscal Year of the
Levy
Collections
Total Collections to Date
for
% of
in Subsequent
% of
Fiscal Year
Amount
Levy
Years
Amount
Levy
$ 15,654,937
$ 15,377,149
98.20
$ 338,115
$ 15,715,264
100.4
16,542,483
16,309,818
98.60
206,683
16,516,501
99.8
15,871,498
15,599,930
98.30
264,012
15,863,942
100.0
16,080,911
15,860,664
986.00
223,583
16,084,247
100.0
16,621,361
16,518,207
99.40
169,735
16,687,942
100.4
18,267,201
18,090,456
99.00
191,978
18,282,434
100.1
19,514,402
19,304,486
98.90
4,350
19,308,836
98.9
21,596,463
21,299,848
98.60
150,365
21,450,213
99.3
22,269,063
22,109,029
99.30
(151,174) *
21,957,855
98.6
23,125,072
22,798,488
98.59
-
22,798,488
98.6
* Shows a negative amount due to the refund of taxes.
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City of La Porte, Texas
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Governmental Activities
Fiscal Year General Certificates
Ended Obligation of Limited
September 30 Bonds Obligation Tax Bonds
Business -type Activities
Total
Revenue Other* Primary
Bonds Obligations Government
2009 $
10,870 $
22,445 $
4,320 $ $
2010
11,665
26,350
4,050
2011
10,940
25,605
3,780
2012
17,050
20,150
1,620
2013
16,875
18,905
1,350
2014
23,726
10,845
540
2015
21,220
17,230
-
2016
22,815
12,335
2017
21,090
11,210
2018
18,895
20,670
Note: Details regarding the City's
outstanding debt
can be found in the note to the financial statements.
See Demographic and Economic
Statistics for personal income and population data.
* Includes premium on bonds.
143
Table 9
% of
Personal Per
Income Capita
6,443 $
44,078
N/A
$ 1,241
5,660
47,725
N/A
1,298
4,813
45,138
N/A
1,322
3,945
42,765
N/A
1,212
3,117
40,248
N/A
1,165
2,208
37,319
N/A
1,072
930
39,380
N/A
891
320
35,470
N/A
991
-
32,300
N/A
1,086
39,565
N/A
1,121
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Table 10
Fiscal Year
Ended
September 30
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Tax
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
City of LaPorte, Texas
RATIOS OF NET GENERAL BONDED DEBT TO TAXABLE VALUE
GENERAL BONDED DEBT PER CAPITA,
AND TAXABLE VALUE OF ALL PROPERTY
Last Ten Fiscal Years
General
Less
Obligation
Certificates of
Debt Service
Net Bonded
Bonds
Obligation
Fund
Debt
$ 15,190
$ 22,445
$ 2,000
$ 35,63
15,715
26,350
2,151
39,91
14,720
25,605
3,118
37,2C
18,670
20,150
3,113
35,7C
18,225
18,905
2,490
34,64
24,266
10,845
2,769
32,34
21,220
17,230
3,161
35,28
22,815
12,335
3,541
31,6C
21,090
11,210
3,883
28,41
18,895
20,670
4,398
35,16
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(2) Population data can be found in the demographic and economic statistics table.
Ratio of
Bonded Debt
Percentage of
to Assessed
Personal
Value
Income (2)
Per Capita (2)
1.6%
N/A
$ 1,051
1.7%
0.005%
965
1.7%
0.004%
1,152
1.6%
0.004%
1,090
1.5%
0.004%
1,165
1.3%
0.003%
1,072
1.3%
0.004%
1,006
1.0%
0.003%
899
0.9%
0.003%
810
1.0%
0.003%
994
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Table 11
City of La Porte, Texas
Direct and Overlapping Governmental Activities Debt
As of September 30, 2018
Governmental Unit
Debt repaid with property taxes
Estimated
Estimated
Share of
Debt Percentage
Overlapping
Outstanding Applicable
Debt
Harris County
$ 2,200,173,022
0.65%
$ 14,301,125
Harris County Department of Education
6,555,000
0.65%
42,608
Harris County Flood Control District
83,075,000
0.65%
539,988
Harris County Toll Road
-
0.65%
-
Harris County Hospital District
59,490,000
0.65%
386,685
La Porte I. S. D.
335,450,000
0.65%
139,044,025
Porte of Houston Authority
613,699,397
0.65%
3,989,046
San Jacinto Jr. College District
381,881,805
0.65%
23,180,226
Total Net Overlapping Debt
$ 3,680,324,224
181,483,701
City of La Porte Direct Debt*
$ 39,565,000
39,565,000
Total Direct and Overlapping Debt
*Approximately $19,668,027 of the city's outstanding debt is self supporting.
Source: Texas Municipal Reports
Percentage are based on total property values.
Source: Texas Municipal Reports
Percentages are based on total property values.
$ 221,048,701
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Table 12
City of La Porte, Texas
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Fiscal Years
Fiscal Year
Per Capita
Ended
Personal
Personal
Median
School
Unemployment
September 30
Population (1)
Income (2)
Income (2)
Age (3)
Enrollment (4)
Rate (5)
2009
36,779
N/A
N/A
N/A
7,830
9.4%
2010
33,800
$ 853,355,716
$ 25,604
33
7,781
8.2%
2011
34,138
880,399,908
26,172
33
7,732
9.0%
2012
35,280
878,708,768
25,952
33
7,739
6.3%
2013
34,553
917,811,538
26,894
33
7,729
6.3%
2014
34,813
937,182,978
27,186
33
7,634
5.0%
2015
35,074
1,001,483,958
28,823
33
7,648
4.6%
2016
35,148
1,052,095,094
30,127
33
7,753
5.8%
2017
35,086
1,052,095,094
30,127
33
7,713
5.8%
2018
35,371
1,052,095,094
30,127
37
7,701
4.6%
N/A - information not available.
Data sources:
(1) Estimated population provided by US Census Bureau.
(2) Personal income and per capita personal income is currently unavailable.
(3) Median age data prior to 2010 is not available, medium age provided by 2010 Census.
(4) School enrollment provided by La Porte Independent School District
(5) Unemployment rates provided from thebureau of Labor Statistics
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Table 13
City of LaPorte, Texas
Principal Employers
Current Year and Ten Years Ago
2018
Zoos
Percentage
Percentage
of Total City
of Total City
Employer
Employees
Employment
Employer
Employees
Employment
Equistar Chemicals
1,635
8.70%
LaPorte ISD
1,227
4.49%
La Porte ISD
1,042
5.55%
Rockwood Service Corp.
700
2.56%
DuPont Chemical
545
2.90%
Longview Inspection Corp.
664
2.43%
J V Piping
440
2.34%
Quest Tru TEC
636
2.33%
Total Petrochemicals USA
409
2.18%
Oxy Vinyls, LP
530
1.94%
City of La Porte
390
2.08%
City of La Porte
381
1.39%
Ineos
385
2.05%
Ineos
350
1.28%
Mobley Industrial
382
2.03%
Sulzer Hickham
330
1.21%
Kateon Natie Houston
350
1.86%
Air Liquide
170
0.62%
CCC Group Inc.
300
1.60%
PPG Industries
150
0.55%
Total
5,878
31.28%
Total
5,138
18.80%
Source: CenterPoint Energy
Note: This list includes companies within the City limits of La Porte and within the industrial districts.
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City of LaPorte, Texas
FULL-TIME EQUIVALENT CITY GOVERNMENTAL EMPLOYEES BY FUNCTION
Last Ten Fiscal Years
Full-time Equivalent Employees as of September 30
Function
2009
2010
2011
2012
2013
General government
78
79
90
90
88
Public safety
143
144
144
151
152
Public works
32
32
32
32
30
Health and sanitation
22
22
24
24
23
Culture and recreation
45
46
46
46
42
Water services
25
25
25
25
25
Sewer services*
20
20
20
20
20
Golf course*
12
12
Sylvan Beach
Convention Center
4
Total
381
380
381
388
380
Source: City of La Porte Human Resource Department
*2011 thru 2017 are blank due to funding golf course workers out of the General Fund.
Sylvan Beach is managed by Harris County who uses private contractors.
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Table 14
Full-time Equivalent Employees as of September 30
'%AI A 'IAA G 'IAA L 'lAA'7 'IAA O
88
89
89
89
90
154
154
154
154
155
30
30
30
33
35
23
23
22
23
23
42
42
44
42
42
24
25
25
25
25
20
20
20
20
20
381 383 384 386 390
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City of LaPorte, Texas
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function
2009
2010
2011
2012
2013
Police
Physical arrests
2,737
2,538
2,354
2,311
2,205
Tickets processed
16,098
16,603
14,619
13,221
13,861
Fire
Number of calls answered
1,409
1,559
1,483
1,195
1,219
Inspections
600
690
725
812
950
Highways and streets
Street resurfacing (linear feet)
23,559
38,365
60,472
69,580
13,520
Potholes repaired
1,012
1,236
465
1,173
271
Sanitation
Cubic yards of garbage collected
29,894
29,642
27,961
42,589
30,625
Cubic yards of trash collected
78,900
43,368
45,778
54,641
32,137
Culture and recreation
Fitness center admissions
53,401
78,118
64,989
64,279
64,587
Water
Number of water meters
11,968
12,015
12,061
12,129
12,129
Average daily consumption
4.0
3.9
4.6
4.3
4.0
(millions of gallons)
Water main breaks
498
417
666
311
379
Wastewater
Average daily sewage treatment
2.8
3.7
2.8
3.3
2.7
(thousands of gallons)
Golf Course
Number of paid rounds played
36,009
31,271
34,848
34,038
32,257
Source - Various City departments.
150 i
m���
u.. 0AA��l III' iouuuu �ii.�i1`��` ��11IIV �1IIV IUI� vlllflmm�M�� u mfiti111�uuuuur�ou mfiti�uuuuuv'��uum you
Table 15
2014 2015 2016 2017 2018
2,032
2,152
2,399
1,826
1,968
14,151
14,316
13,231
11,900
15,605
1,262
1,378
1,356
1,532
1,536
1,020
383
1,025
852
550
11,183
11,172
22,172
18,602
13,015
165
342
236
118
231
54,812
50,945
26,458
48,716
56,406
40,701
31,518
40,569
44,733
36,174
64,587
64,587
64,587
64,587
90,583
12,129
12,129
12,129
12,129
12,682
3.8
3.9
3.8
3.7
3.8
411
200
217
199
220
2.6
3.8
3.8
3.5
3.9
32,741 29,965 26,794 26,840 26,006
151 ���„���.„
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h
City of La Porte, Texas
CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function
Public safety
Police station
Police officers
Reserve officers
Fire stations
Sanitation
Collection trucks
Highways and streets
Streets (miles)
Streetlights
Traffic signals
Culture and recreation
Parks acreage
Parks acreage
Swimming pools
Recreation centers
Senior center
Water and sewer
Water mains (miles)
Fire hydrants
Sanitary sewers (miles)
Storm sewers (miles)
Source - Various City departments.
2009
2010
2011
2012
2013
1
1
1
1
1
74
75
75
74
74
1
2
2
2
6
4
4
4
4
4
14
14
14
12
12
126
126
126
125
297
2,387
2,387
2,415
2,415
2,415
7
5
5
6
6
356
356
356
188
188
21
21
21
22
22
6
5
5
5
5
1
4
4
3
3
1
1
1
1
1
180
180
181
182
183
1,168
1,179
1,186
1,199
1,226
191
191
192
192
192
92
95
97
60
112
152 ���„���.
��..
Table 16
2014
2015
2016
2017
2018
1
1
1
1
1
74
76
75
78
79
2
3
3
2
4
4
4
4
4
4
12
14
17
16
16
297
272
272.5
272.5
273
2,415
2,415
2,415
2,415
2,905
6
7
7
7
7
188
188
188
188
188
22
22
22
22
22
5
5
5
5
5
2
2
2
2
2
1
1
1
1
1
184
185
187
187
189
1,256
1,265
1,276
1,291
1,314
192
193
194
194
194
112
115
115
116
116
153 ���„����
��..,
���„������
��� 1 ����������
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h
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: March 11, 2019
Requested By: Don Pennell, Public Works Director
Department: Public Works
Report: x Resolution: Ordinance:
Exhibit: Bid Tabulation
Exhibit: Vendor Access Report
Exhibit: Letter of Recommendation
Budset
Source of Funds: 003
Account Number: 003-7085-533-5110
Amount Budgeted: $310,000
Amount Requested: $328,440
Budgeted Item: Yes
SUMMARY & RECOMMENDATION
On February 12, 2019 the City opened and read the Public Works project sealed bid (419009) for Ground Storage
Tank Replacement at Collegeview Water Plant. The bid requests were advertised in the Bay Area Observer, posted
on the City of La Porte website and Public Purchase. Sixty (60) vendors were notified with twenty-six (26)
downloading the bid documents and two (2) contractors returning bids. Schier Construction Company submitted
the lowest bid in the amount of $312,800. Dunham Engineering, Inc. has submitted a letter of recommendation.
The bid exceeds remaining available budget by $2,800. Staff requests to utilize contingency funds from the Utility
Fund (003) which has $50,000 available to cover this amount and any project contingency needed, not to exceed
$15,640.
Proiect Benefits, Liabilities, and Operating Cost:
Benefits:
• The existing tank is over forty (40) years old and has exceeded its useful life. Also, the proposed project
provides for increasing the height of the tank to a standard 24 feet, which will add 50,000 gallons in
storage capacity.
Liabilities of Maintaining the Status Quo:
• The tank will experience continued deterioration and possible water quality issues if the replacement is
deferred for an extended period of time.
Operating Costs:
• Maintenance costs will be decreased.
Action Required of City Council:
Consider approval or other action authorizing the City Manager to execute a contract with Schier Construction
Company for the Ground Storage Tank Replacement at Collegeview Water Plant in the amount of $312,800,
plus a 5% project contingency of $15,640, for a total authorization of $328,440.
Approved for City Council Agenda
Corby D. Alexander, City Manager Date
College Station, TX
McAllen, TX
Oklahoma City, OK NGINEERING
INSPEG'TION.OESIGN. RESULTS.
City of La Porte, Texas
Attn: Ray Mayo, Water Superintendent
Ref.: Water Tank Replacement Q Water Plant #7
Phone: 979-690-6555
Fax: 979-690-7034
TX Registration #: F-2253
www.DunhamEngineering.com
The purpose of this letter is to recommend a contractor for the ref. project. A total of
two contractors submitted bids for the project on Feb. 12, 2019. The engineer's estimate
of probable cost for the project was $500,000.
The apparent low bidder was Schier Construction Company of Houston, Texas with a
base bid of $312,800.
The second bidder was W.W. Payton Construction Company of Brookshire, Texas with
a base bid of $390,000.
Schier Construction Company is recommended for award of the contract. They have
performed similar work for both the City and the engineer and completed all work in a
timely and professional manner and in accordance with the contract documents.
Schier Construction Company is recommended for award of the above ref. project.
Please call if you have any questions.
jimmvD. Dunham, P. E.
Access Report
Agency
Bid Number
Bid Title
City of La Porte (TX)
19009
Ground Storage Tank Replacment - Collegeview Wa
Vendor Name
Accessed First Time
Hearn Company
2019-01-24 09:38 AM CST
Iseler Demolition, Inc
2019-01-30 11:39 AM CST
BidClerk
2019-01-29 01:20 AM CST
PLW Waterworks, LLC
2019-01-24 10:11 AM CST
Grand Cayon Minority Contractors Ass
2019-01-28 10:35 PM CST
Pittsburg Tank & Tower Maintenance
(2019-02-01 03:31 PM CST
KSA Engineers
2019-01-30 11:44 AM CST
Schier Construction Company Inc.
2019-01-31 01:48 PM CST
IMS
2019-01-25 10:11 AM CST
Dale Dobbins
2019-01-24 03:13 PM CST
Superior Grouting
2019-02-11 12:10 PM CST
Dodge Data & Analytics
2019-01-24 10:10 AM CST
SmartProcure
2019-01-25 06:10 AM CST
Tukmol General Contractor
2019-01-29 03:25 AM CST
Advanced Starlight International
2019-02-01 05:44 AM CST
american tank company
2019-02-11 04:18 PM CST
North America Procurement Council
2019-01-24 11:26 PM CST
Onvia
2019-01-24 01:01 PM CST
SUPERIOR TANK COMPANY INC.
2019-02-06 10:56 AM CST
Perkens WS Corporation
2019-01-27 11:45 PM CST
Webtech
2019-01-26 02:10 AM CST
Precision Plant Services, LLC.
2019-01-24 11:01 AM CST
W.W. Payton Corportion
2019-01-24 06:15 PM CST
United Industries Group, Inc.
2019-01-29 12:15 PM CST
American Structures Inc.
2019-01-29 01:24 PM CST
L&L Supplies
2019-01-28 04:14 PM CST
Documents
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage Tan4
Bid 19009 Ground Storage TanE
iter Plant
c Replacement012119.pdf❑
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c Replacement012119.pdf❑
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c Replacement012119.pdf❑
c Replacement012119.pdf❑
c Replacement012119.pdf❑
c Replacement012119.pdf❑
c Replacement012119.pdf❑
c Replacement012119.pdf❑
c Replacement012119.pdf❑
c Replacement012119.pdf❑
c Replacement012119.pdf❑
c Replacement012119.pdf❑
c Replacement012119.pdf❑
c Replacement012119.pdf❑
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c Replacement012119.pdf❑
BID TABULATION -BID 19009 GROUND STORAGE TANK REPLACEMENT-COLLEGEVIEW WATER PLANT
SCHIER
CONSTRUCTION
COMPANY
WW PAYTON
CORPORATION
Item No.
Description
1
Ground Storage Tank Replacement
TOTAL BASE BID
$312,800.00
$390,000.00
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: March 11, 2019
Requested By: Don Pennell, Public Works Director
Department: Public Works
Report: X Resolution: Ordinance:
Exhibits: Request to Construct
Hydraulic Report
Shoreacres Contract
HB 1311
Appropriation
Source of Funds: N/A
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item:
SUMMARY & RECOMMENDATION
The La Porte Area Water Authority (LPAWA) Board, at its February 13, 2019, meeting, authorized the Water
Authority Manager (La Porte City Manager) to negotiate a contract with the City of Shoreacres for the
construction of an additional waterline and meter station to the Shoreacres water plant on Shoreacres Boulevard,
east of South Broadway. The City of Shoreacres will bear all costs associated with survey, easement
acquisition, design, and construction of the project. The constructed waterline will become property of and be
managed/operated by the LPAWA.
Public Works staff requested that a hydraulic analysis be performed to determine if the water supply from the
LPAWA waterline at Bayside Drive and South Broadway was feasible. The analysis determined that there was
only minor influence on the LPAWA system with no negative impact at maximum daily flow. The route of the
proposed waterline is on the last page of the hydraulic analysis report.
Currently there is LPAWA supply to Shoreacres Water Plant 42 at the end of Bayou Forest Drive. There is no
LPAWA supply to Water Plant 41 on Shoreacres Boulevard. When there are higher water demands, the Water
Plant 41 starts and the ground storage tank begins to empty. The tank can be refilled with the well on site but is
limited in the amount of use to 10 percent of total water used by the Harris Galveston Subsidence District. The
tank is currently refilled after demand decreases using Plant 42 and the Shoreacres distribution system. The
additional LPAWA waterline will eliminate this type of operation and reduce the possibility of Shoreacres
being without water.
The contract between LPAWA and Shoreacres allows for the additional waterline requested when all costs
associated with construction are borne by the City of Shoreacres. Shoreacres has been approved for and secured
a loan from the Texas Water Development Board (TWDB) for the design and construction of the additional
LPAWA waterline. 1981 House Bill 1311 creating the LPAWA requires the LPAWA Board and La Porte City
Council approval for the LPAWA to enter into contracts or agreements. Staff recommends approval of the
additional waterline design and construction by the City of Shoreacres. The contract draft is to be provided for
LPAWA Board and La Porte City Council approval.
Action Required by Council:
Consider approval or other action authorizing the LPAWA Manager to negotiate a contract with the City of
Shoreacres for the design and construction of an additional LPAWA waterline and metering station.
Approved for City Council Agenda
Corby Alexander, City Manager Date
ENROLLED /
H.B. No. 1311
1 AN ACT
2 relating to the creation, administration, powers, duties,
3 operations, functions, and financing of the La Porte Area Water
4 Authority.
5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
6 SECTION 1. CREATION OF AUTHORITY. (a) Under and pursuant
7 to the provisions of Article XVI, Section 59, of the Texas
8 Constitution a conservation and reclamation district is created in
9 Harris County, Texas, to be known- as the "La Porte Area Water
10 Authority," hereinafter called the authority, that will be a
r
11 governmental agency and a body politic and corporate.
12 (b) The creation of the authority is declared to be
13 essential to the accomplishment of the purposes of Article XVI,
14 Section 59, of the Texas Constitution.
15 SECTION 2. FINDINGS. (a) It is found that the boundaries
16 and field notes of the authority form a closure, and if any mistake
17 is made in copying the field notes in the legislative process, or
` 18 otherwise a mistake is made in the field notes, it in no way
19 affects the organization, existence, and validity of the authority,
20 or the right of the authority to issue revenue bonds or revenue
21 refunding bonds for the purposes for which the authority is
22 created, or to pay.the principal of and interest on bonds, or in
23 any other manner affect the legality or operation of the authority
24 or its governing body.
'e.
I
r
H.B. No. 1311
1 (b) It is determined and found that all of the land and
2 other property included within the area and boundaries of the
3 authority and land and properties that may feasibly be served by
4 the authority will be benefited by the works and project that are
5 to be accomplished by the authority pursuant to the powers
6 conferred by Article XVI, Section 59, of the Texas Constitution,
7 and that the authority is created to serve a public use and
8 benefit.
9 SECTION 3. BOUNDARIES. The authority comprises all of the
10 territory contained within the following described area:
11 BEGINNING at a point in the south right-of-way line of
12 Spencer Highway (100 foot wide), said point being the intersection
13 of the south right-of-way line of Spencer Highway and the east line
14 of the San Jacinto College 141 acre tract; said point being
15 coincident with the northwest corner of College View Municipal
16 Utility District as per Article 8280-381 of Vernon's Civil Statutes
17 of the State of Texas;
18 THENCE, southerly along the west line of the College View
19 Municipal Utility District and the east line of the San Jacinto
20 College 141 acre tract to its intersection with the north line of
21 Fairmont Parkway 250 foot right-of-way, same being the southeast
22 corner of the said San Jacinto College 141 acre tract and the
23 southwest corner of the College View Municipal Utility District;
24 THENCE, southerly along a projection of the west line of the
25 College View Municipal Utility District and the east line of the
26 San Jacinto College 141 acre tract to its intersection with the
27 south right-of-way line of Fairmont Parkway 250 foot right-of-way
`a
no
3
H.B. No. 1311
1 to a point for corner;
2 THENCE, east along the south line of Fairmont Parkway 250
3 foot wide right-of-way to its intersection with the west line of a
4 200 foot wide Harris County Flood Control District right-of-way for
5 Willow Spring Gully which is designated as Ditch No. B112-00-00,
6 for a point for corner;
7 THENCE, southwesterly coincident with the meanders of the
8 west line of the 200 foot wide right-of-way of Willow Spring Gully,
9 Harris County Flood Control District Ditch B112-00-00, to its
10 intersection with the north corporate. limit of the City of
11 Pasadena, same being the north line of a 200 foot wide strip
12 annexed by the City of Pasadena and also being the south line of
13 the W. M. Jones Survey and the north line of the George B.
14 McKinstry Survey, Abstract No. 47, for a point for corner;
15 THENCE, east with the north line of the George B. McKinstry
16 Survey A-47 and the south line of the W. M. Jones Survey and the
17 corporate limit line of the City of Pasadena to the east line of
is the .200 foot wide right-of-way of Willow Spring Gully, Harris
19 County Flood Control District Ditch B112-00-00;
20 THENCE, southwesterly with the east line of the 200 foot wide
21 right-of-way of Willow Spring Gully Harris County Flood Control
22 District Ditch B112-00-00 to a point 469 feet south of the north
23 line of the George B. McKinstry Survey A-47;
24 THENCE, east 469 feet south of and parallel to the north line
25 of the George B. McKinstry Survey A-47 to a point 200 feet west of
26 the west line of that certain tract of land conveyed to Dart
27 Industries and El Paso Products Company by Friendswood Development
3
i
H.,B. No. 1311
1 Company by deed dated March 14, 1974, and recorded under Film Code
2 Number 103-11-0868, Deed Records, Harris County, Texas;
3 THENCE, north 200 feet west of and parallel to the west line
4 of the property owned by Dart industries and El Paso Products
5 Company a distance of 469 feet to the north line of the George B.
6 McKinstry Survey A--47 and the corporate limit line of the City of
7 Pasadena, Harris County, Texas;
8 THENCE, easterly along the north line of the George B.
9 McKinstry Survey, Abstract No. 47, to its intersection with the
10 center line of Big Island Slough, for a point for corner;
11 THENCE, southerly along the meanders of the center line of
12 Big Island Slough to its intersection with a line parallel to and
13 3410 feet more or less measured at right angles southerly from the
14 north line of the George B. McKinstry Survey, Abstract No. 47, for
15 a point for corner, said point being on the north line of that
16 territory annexed to the City of Houston by Ordinance No. 65-1555
17 B-R;
18 THENCE, easterly along the north line of the said territory
19 described by City of Houston Ordinance No. 65-1555 B-R, and its
20 easterly extension, to its intersection with the west right-of-way
21 line of the G. H. & S. A. Railroad, for a point for corner;
22 THENCE, southerly along the west right-of-way'line of the
23 G. H. & S. A. Railroad to its intersection with the westerly
24 extension of the north right-of-way line of McCabe Road;
25 THENCE, easterly with the westward projection of the north
26 right-of-way line of McCabe Road, and the north right-of-way line
27 of McCabe Road, and the eastward projection of the north
4
4
H.B. No. 1311
1 right-of-way line of McCabe Road, to a point in the east
2 right-of-way line of Old State Highway 146 (also known as South
3 Broadway), said point being the intersection of the north
4 right-of-way line of McCabe Road, extended easterly, with the east
5 right-of-way.line of Old State Highway 146;
6 THENCE, southerly along the east right-of-way line of Old
7 State Highway 146 (also known as South Broadway)•to a point for
8 corner, said point being the intersection of the east right-of-way
9 line of State Highway 146 with the north line of the Pine Bluff
10 Addition and the south line of the Crescent View Addition;
11 THENCE, easterly along the north line of the Pine Bluff
12 Addition and the south line of the Crescent View.Addition to a
13 point at the intersection of the north line of the Pine Bluff
14 Addition with the westerly shoreline of Galveston Bay;
15 THENCE, northwesterly, northerly, and northeasterly following
16 the meanders of the shoreline of Galveston Bay to its intersection
17 with Donaldson Avenue, being a south city Limit line of the City of
18 Morgan's Point;
19 THENCE, northwesterly along the north right-of-way .line of
20 Donaldson Avenue to its intersection with the east right-of-way of
21 Blackwell Street; '
22 THENCE, north along the east right-of-way line of Blackwell
23 Street, to a point of intersection with the south right-of-way line
24 of Barbours Cut Boulevard;
25 THENCE, westerly along the south right-of-way line of
26 Barbours Cut Boulevard, to the northeast corner of Block 978, Town
27 of Era Porte, Harris County, Texas;
5
3
H.B. No. 1311
1 THENCE, north across Barbours Cut Boulevard, to a point for
2 corner in the north right-of-way line of Barbours Cut Boulevard;
3 THENCE, west along the north right-of-way line of Barbours
4 Cut Boulevard to its intersection with the east right-of-way line
5 of North Broadway, for a point for corner;
6 THENCE, north along the east right-of-way line of North
7 Broadway, and along the east right-of-way line of North Broadway,
8 extended to its intersection with the shoreline of San Jacinto Bay,
9 being the most northwesterly corner of the corporate limit of the
10 City of Morgan's Point;
11 THENCE, easterly along the most north city limit line of the
12 City of Morgan's Point, to a point of intersection with a line
13 which is parallel to and 2500' westerly from the center line of the
14 Houston Ship Channel;
15 THENCE, in a northwesterly direction along the line which is
16 parallel to and 2500' from the center line of the Houston Ship
17 Channel to a point of intersection with the east right-of-way line
18 of State Highway 134;
19 THENCE, south along the east right-of-way lane of State
20 Highway 134, and the east right-of-way line of State Highway 134,
21 projected south, to a point for corner in the south right-of-way
22 line of State Highway 225;
23 THENCE, southeasterly along the south right-of-way line of,
24 State Highway 225, to.its intersection with the west right-of-way
25 line of Underwood Road;
26 THENCE, south along the west right-of-way line of Underwood
27 Road to its intersection with the north right-of-way line of
L
R
H.B. No. 1311
1 Spencer Highway, for point for corner;
2 THENCE, west along the north right-of-way line of Spencer
3 Highway to its intersection with the east property line of the San
4 Jacinto College 141 acre tract, projected north;
5 THENCE, south across the right-of-way of Spencer Highway
6 along the north projection of the east property lane of the San
7 Jacinto College 141 acre tract, to the POINT OF BEGINNING.
8 SECTION 4. GENERAL POWERS AND DUTIES. (a) The authoritv is
9 vested with, and shall have and exercise, all of the rights,
10 powers, privileges, authority, and functions conferred by the
11 general law of this state applicable to municipal utility
12 districts, including without limitation those conferred by• Chapter
13 54, Water Code, as amended, but if any provision of the general law
14 is in conflict or inconsistent with this Act, this Act shall
15 prevail. All general laws applicable to municipal utility
16 districts not in conflict or inconsistent with the provisions of
17 this Act are hereby adopted and incorporated by reference with the
is same effect as if incorporated in full by this Act.
19 (b) The powers and functions conferred'on the authority are
20 granted subject to the policy of the state to encourage the
21 development and use of integrated area -wide waste collection,
22 treatment, and disposal systems to serve the waste disposal needs
23 of the citizens of the state, it being an objective of the policy
24 to avoid the economic burden to the people and the impact on the
25 quality of the water in the state that result from the construction
26 and operation of numerous small waste collection, treatment, and
27 disposal facilities to serve an area when an integrated area -wide
7
s
1
2
3
4
5
6
7
8
9
10
11
12
13
14
i5
16
17
18
19
20
21
22
23
24
25
26
27
H.B. No. 1311
waste collection, treatment, and disposal system for the area can
reasonably be provided.
SECTION S. SPECIFIC POWERS AND DUTIES. (a) Not by way of
limitation, the authority has the rights, powers, privileges, and
functions provided by this section.
(b) The authority may acquire surface and underground water
supplies from sources both inside and outside the boundaries of the
authority and may conserve, store, transport, treat, purify,'
distribute, sell, and deliver water to persons, corporations,
municipal corporations, political subdivisions of the state, and
others, inside and within 30 miles of the boundaries of the
authority.
(c) The authority may collect and transport the domestic,
industrial, or communal wastes of the entities described in
Subsection (b) of this section including the purposes of Chapter
30, Water Code, as amended.
(d) The authority may make, purchase, construct, lease, or
otherwise acquire property, works, facilities, and improvements,
whether previously existing or to be made, constructed, or
acquired, inside or outside the boundaries of the authority,
necessary to carry out the rights, powers, and authority granted by
this Act and the general law.
(e) The authority may enter into contracts of not exceeding
40 years' duration with persons, corporations, municipal
corporations, including the City of La Porte, political
subdivisions of the state, and others, on terms and conditions the
board of directors of the authority considers desirable, fair, and
8
F1
H.B. No. 1311
1 advantageous for the performance of its rights, powers, and
2 authorities under this Act. Before entering into those contracts,
3 except those between the authority and the City of La Porte, the
4 board of the authority shall secure the approval of the city
5 council of the City of La Porte. The contracts may provide that
6 they shall continue_in effect until bonds issued by the authority
7 to finance the cost of facilities authorized by this Act, and
8 refunding bonds issued in lieu of those bonds, are paid. Chapter
9 224, Acts of the 56th Legislature, Regular Session, 1959, as
10 amended (Article 1109j, Vernon's Texas Civil Statutes), shall apply
11 to.any contract between the authority and any city or town,
12 including the City of La Porte.
13 (f) The authority may enter into contracts with others for
14 transporting their water and may act jointly with others in the
15 performance of all functions and purposes of the authority. Before
16 entering into those contracts, except those between the authority
17 and the City of La Porte, the board of the authority shall secure
18 the approval of the city council of the City of La Porte.
19 (g) An election is not required by the authority for
20 approval of contracts with municipal corporations or other
21 political subdivisions for services listed in this Act.
22 (h) This Act does not preclude the authority from acquiring
23 water rights under any law or permit provided acquisition of the
24 water rights is approved by order or subsequent permit from the
25 Texas Water Commission.
26 (i) The` rights, powers, privileges, and functions granted to
27 the authority are subject to the powers granted to the Gulf Coast
9
H.B. No. 1311
1 Waste Disposal Authority in Chapter 409, Acts of the 61st
2 Legislature, 1969, as amended (Article 762ld-2, Vernon's Texas
3 Civil Statutes), to provide disposal systems, and before acquiring
4 or constructing waste treatment and disposal facilities, the
5 authority must obtain the consent of the Gulf Coast Waste Disposal
6 Authority, or the Texas Water Commission if the consent of the Gulf
7 Coast Waste Disposal Authority is unreasonably withheld or delayed.
8 SECTION 6. CONFIRMATION ELECTION. (a) Before the authority
9 is created, the city council of the City of La Porte must call a
10 confirmation election to determine if the proposed authority will
11 be created.
12 (b) Except as provided by this section, the confirmation
13 election must be called and held in the manner provided by Sections
14 54.027, 54.028, and 54.029, Water Code.
15 (c) Notice of the election shall'be published in a newspaper
16 of general circulation in the City of La Porte.
17 (d) Ballots of the election shall be printed to provide for
18 voting for or against the following proposition: "The creation of
19 the La Porte Area Water Authority."
20 (e) The city council of the City of La Porte shall assume
21 the election duties imposed on temporary directors by Chapter 54,
22 Water. Code. There shall be but one election; if the election
23 fails; this Act shall be null and void and of no effect.
24 SECTION 7. EXCLUSIONS OF LAND. (a) It shall not be
25 necessary for the board of directors to call or hold a hearing on
26 the exclusions of land or other property from the authority, but
27 the board shall hold such a hearing on the written petition of any
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H.B. No. 1311
1 landowner or other property owner within the authority filed with
2 the secretary of the board before the passage of the first order or
3 resolution authorizing bonds to be issued by the authority.
4 (b) The board may act on the petition in the same manner
5 that it may act on a petition for the addition of land under
6 Sections 54.711-54.715, Water Code, and no notice of hearing is
7 required other than notice of the meeting at which action is taken
8 under Section 54.109, Water Code.
9 (c) The. board, on its own motion, may call and hold an
10 exclusions hearing or hearings in the .manner provided by the
11 general law.
12 SECTION 8. ANNEXATION. Land may be added or annexed to the
13 authority in the manner provided by Chapter 54, Water Code, and
14 without the consent of any city as provided by the Municipal
15 Annexation Act, as amended (Article 970a, Vernon's Texas Civil
16 Statutes), either before or after revenue bonds of the authority
17 have been issued, and no such boundary change shall have any effect
18 on the validity of any bonds of the authority. Any land annexed
19 must be contiguous to and adjacent to the authority.
20 SECTION 9. TAXES; OTHER DISTRICTS. (a) The authority may
21 not impose, levy, assess, or collect taxes on any property, and the
22 authority may not issue bonds or create indebtedness that would be
23' payable directly from ad valorem taxes levied by the authority.
24 (b) The enactment of this law does not have the effect of
25 preventing the organization of conservation and reclamation
26 districts or of preventing boundary changes of those districts
27 within the boundaries of the authority as authorized by Article
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H..B. No. 1311
1
XVI, Section 59, and Article III, Section 52, of the Texas
2
Constitution.
3
(c) To encourage the state policy stated in Section 4 of
4
this Act and to prevent wasteful duplication, all conservation and
5
reclamation districts created in the future within the boundaries
6
of the authority shall, however, contract with the authority for
7
the provision of facilities and services that the authority is
8
authorized to provide under this ,Act whenever the authority has or
9
in its determination can provide those facilities and services.
10
SECTION 10. BOARD OF DIRECTORS. - (a) Powers of the
11
authority shall be exercised by a board of five directors, none of
12
whom shall be a member of the city council of the City of La. Porte
13
during his term as director.
14
:(b) One director must reside outside the city limits of La
15
Porte but within the boundaries of the authority.
16
(c) By September 1, 1981, the city council of the City of La
17
Porte shall assign position numbers to each director's office and
18
shall appoint directors to those positions for two-year terms as
19
follows:
20
(1) those directors occupying Positions Number 1 and Number
21
2 shall serve until September 1, 1982, and until their successors
22
have been appointed and qualified; and
23
.(2) those directors occupying Positions Number 3, Number 4,
24
and Number 5 shall serve until September 1, 1983, and until their
25
successors have been appointed and qualified.
26
(d) On the expiration of those terms, the city council of
27
the City of U Porte.shall fill those positions by appointment of a
12
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H.S. No. 1311
1 director to each position for a term of two years, so that two
2 directors shall be appointed in one year and three directors in the
3 next year in continuing sequence.
4 (e) A vacancy in the office of director, because of the
5 failure or refusal of one or more directors to qualify or serve,
6 because of death or.incapacitation, or for any other reason, shall
7 be filled by appointment of the city council of the City of La
8 Porte for the unexpired term.
9 (f) Each director shall serve without emolument or
10 compensation paid by the authority.
11 (g) Each director shall qualify by subscribing to the
12 constitutional oath of office and providing a bond in the amount of
13 $5,000 for the faithful performance of his duties. The cost of the
14 bond shall be paid by, the authority. The bond of the first
15 directors shall be approved by the mayor of the City of La Porte
16 and filed in the office of the city manager of the City of La
I
17 Porte. The bonds of directors appointed after the first directors
18 shall be approved by the authority's board of directors and shall
19 be recorded in a record kept for that purpose in the office of the
20 authority.
21 (h) At the first meeting in September of each year, or after
22 the annual vacancies in the board of directors, are filled, the
23 board shall elect a president, a vice-president, a secretary, and
24 any other officers as in the judgment of the board are considered
25 necessary. The vice-president shall perform all duties and
26 exercise all power conferred by this Act or the provisions of the
27 general law on the president when the president is absent or fails
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H.B. No. 1311
or declines to act. Any order adopted or other action taken at a
meeting of the board at which the president is absent may be signed
by the vice-president, or the board may authorize the president to
sign the order or other action.
(i) At the direction of the board of directors, the general
manager of the authority may execute all contracts entered into by
the board on behalf of the authority.
(j) A majority of the duly qualified directors shall
constitute a quorum of any meeting of the board of directors, and a
concurrence of a majority of those directors present and voting
shall be sufficient in all matters pertaining to the business of
the authority, including the letting of construction work, purchase
of existing facilities, and matters relating to construction. work.
:SECTION 11. GENERAL MANAGER. (a) The city manager of the
City.of La Porte shall be the general manager of the authority. If
the position of city manager is ever abolished, the chief executive
officer of the City of La Porte or his designee shall serve as
general manager. The general manager shall serve without emolument
or compensation paid by the board.
(b) The general manager is the chief executive 'officer of
the authority. Under policies established by the board, he is
responsible to the board of directors for the following duties:
(1) administering the directives of the board;
(2) keeping the authority's records, including minutes of
the board's meetings;
(3) coordinating with state, federal, and local agencies;
(4) developing plans and programs for the board's approval;
14
H.B. No. 1311
1 (5) formulating a budget for the authority's fiscal year
2 subject to the approval of both the board and the city council of
3 the City of La Porte;
4 •(6) hiring, supervising, training, and discharging the
5 authority's employees;
6 (7) contracting for or retaining technical, scientific,
7 legal, fiscal, and other professional services; and
8 (8) performing any other duties assigned to him by the
9 board.
10 (c) The general manager and each employee of the authority
11 charged with -the collection, custody, or payment of money 'of the
12 authority shall execute a fidelity bond, approved by the board of
13 directors as to form, amount, and surety. The authority shall pay
14 the premiums on the general manager's and the employees' bonds
15 under this section.
16 (d) Pursuant to the provisions of The Interlocal Cooperation
17 Act, as amended (Article 4413(32c), Vernon's Texas Civil Statutes),
1s the authority shall offer to enter into an interlocal contract or
19 agreement with the City of La Porte for the performance of
20 administrative functions.
21 SECTION 12. GENERAL FINANCIAL AUTHORITY. (a) The authority
22 may reimburse the City of La Porte for all reasonable expenses
23 incurred in connection with the creation and establishment of the
24 authority, including publication costs, legal fees, and charges for
25 the services of other consultants and other incidental costs.
26 (b) The authority may, with the prior approval of the city
27 council of the City of La Porte, borrow money from time to time for
15
H..B. No. 1311
1 the purpose of carrying out any of the powers granted to the
2
authority by:
3
(1) issuing and selling negotiable or nonnegotiable notes
4
and providing the terms and conditions of those notes and the
5
rights of the holders of those notes payable from and secured by
6
the sources described in this Act;
7
(2) issuing and selling revenue bonds without the necessity
8
of an election and providing the terms and conditions of those
9
bonds and the rights of the holders of those bonds payable from -and
10
secured by the sources described in this Act; and
11
(3) delivering those notes and bonds to the United States,
12
or any agency or instrumentality of the United States, or to the
13
State of Texas, or any agency or instrumentality of the State of
14
Texas, when it is determined by the board of directors to be in the
15
best interest of the authority.
16
(c) The authority may invest any money held in any sinking
17
fund, reserve fund, or other fund or any money not required for
18
immediate use or disbursement in the securities as provided by this
19
Act.
20
(d) The authority may apply for, accept, and administer
21
grants, loans, and other assistance from the United States and any
22
agency or instrumentality of this state or any other state to carry
23
out the purpose of this Act, and to enter into any agreement in
24
relation to those grants, loans, or other assistance as may be
25
provided by the authority that is not in conflict with the
26
constitution of this state.
27
(e) The authority may fix, charge, alter, and collect
16
H.B. No. 1311
1 reasonable rentals, rates, fees, and other charges for the use of
2 any facilities or for any services rendered by the authority and
3 provide for the imposition of reasonable penalties for any of those
4 rentals, rates, fees, and charges that are delinquent, and further
5 to comply with its mandatory duty to fix, charge, alter, and
6 collect the rentals, rates, fees, and charges that are sufficient
7 to produce revenues adequate to fulfill any agreement with the
8 holders of bonds or notes issued under the provisions of this Act.
9 SECTION 13. BONDS AND NOTES. (a) Bonds and notes of the
10 authority shall be authorized by resolution or resolutions of the
11 board, concurred in by at least a majority of the board members and
12 further approved by the city council of the City of La Porte before
13 issuance.
14 (b) The bonds and notes shall have the form,
15 characteristics, and bear the designation; bear the date or dates;
16 mature at the time or times, serially, term, or otherwise, in not
17 more than 40 years from their dates; bear interest at the rate or
18 rates, payable annually, semiannually, quarterly, or otherwise; be
19 in the denominations; be in the form, either coupon or registered;
20 carry the registration privileges as to principal only or as to
21 both principal and interest and as to successive exchange of coupon
22 for registered bonds or notes or vice versa, and' sugcessive
23 exchange of bonds or notes of one denomination for bonds or notes
24 of other denominations; be executed in the manner; be payable at
25 the place 'or places within or without the state; and be sold for
26 the price or prices, as provided in the resolution or resolutions
27 authorizing the bonds and notes.
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H.B. No. 1311
1 (c)
Bonds or notes may be issued
in one or more installments
2 and from
time to time as required.
3 (d)
The proceeds from the sale
of the bonds or notes shall
4 be deposited
in the depository bank or banks
and shall be paid out
5 pursuant
to the terms and conditions
as may be agreed on by the
6 authority and the purchasers.
7 (e) Bonds or notes and any coupons appurtenant to the bonds
8 or notes issued under this Act shall be signed by the president or
9 vice-president of the board of directors, be attested by the
10 board's secretary, and bear the seal of the authority.
11 (f) The resolution or resolutions authorizing the issuance
12 of any installment or any series of bonds or notes may provide the
13 extent to which the authority, in executing the bonds or notes and
14 appurtenant coupons, may use facsimile signatures and facsimile
15 seals instead of manual signatures and manually impressed seals.
16 If any officer whose manual or facsimile signature appears on a
17 bond or note or any coupon ceases to be an officer before the bond
18 or note is delivered, the signature is valid and sufficient for all
19 purposes as if he had remained in office until the delivery had
20 been made.
21 (g) Neither the members or officers of the authority nor
22 anyone executing the bonds, notes, or coupons for and on behalf of
23 the authority shall be liable personally on the bonds, notes, or
24 coupons of the authority by reason of participation in any way in
25 the issuance of them.
26 (h) The bonds or notes of the authority may be secured by
27 and payable from pledges of all or any part of the revenues,
18
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H.B. No. 1311
1 receipts, or assets of the authority or the revenues of any one or
2 more leases or other contracts made, all of which shall be
3 specified by the resolution of the authority or in the trust
4 indenture or other instrument securing the bonds or notes. The
5 pledge may reserve the right, under conditions specified in it, to
6 issue additional bonds or notes that will be on a parity with or
7 subordinate to the bonds or notes being issued.
8 (i) A pledge or security instrument made by the authority is
9 valid and binding from the time when it is made. The revenues,
10 receipts, or assets so pledged and entrusted and thereafter
11 received by the authority shall immediately be subject to the lien
12 of the pledge or security instrument without any physical delivery
13 or further act. The lien of the pledge or security instrument is
14 valid and binding against all parties having claims of any kind in
15 tort, contract, or otherwise against the authority, irrespective of
16 whether the parties have notice of it. It is not necessary for the
17 resolution or any security instrument or other instrument by which
is a pledge or security interest is created to be recorded or filed,
19 and compliance with any provision of any other law is not required
20 in order to perfect the pledge or other security interest.
21 (j) A resolution.authorizing bonds or notes or a trust
22 indenture securing bonds or notes may contain provisions, that
23 shall be a part of the agreement with the holders, as to:.
24 (1) pledging all or any designated part of the revenues and
25 receipts of the authority, received or to be received from the
26 planning, financing, ownership or operation of, leasing, or
27 otherwise in connection with, any specified facilities or assets to
19
H.B. No. 1311
1 secure the payment of the bonds or notes;
2 (2) pledging all or any part of assets of the authority,
3 including any obligation acquired by the authority, to secure the
4 payment of the bonds or notes;
5 (3) the use and disposition of rentals, rates, fees, and
6 other charges made or received by the authority;
7 (4) pledging to fix, charge, alter, and collect rents,
8 rates, fees, and other charges with respect to any designated
9 facilities or assets that will be sufficient to produce revenues
10 adequate to pay all expenses necessary to the operation and
11 maintenance of the designated facilities or assets of the
12 authority, to pay the interest on"and principal of.all bonds or
13 notes issued and payable out of the revenues and receipts when and
14 as they become due and payable, to pay all sinking fund and reserve
15 or other fund payments agreed to be made in respect to any of those
16 bonds or notes payable out of the revenues and receipts when and as
17 they become due and payable, and to fulfill the terms of any
18 agreement made with the holders of the bonds or notes and with any
19 person in their behalf;
20 (5) the setting aside of reserves or sinking funds and the
21 regulation and disposition of them;
22 (6) limitations on the purpose to which the proceeds from
23 the sale of the bonds or notes may be applied and pledging the
24 proceeds to secure the payment of the bonds or notes;
25 (7) limitations on the issuance of additional bonds and on
26 the refunding of outstanding or other bonds or notes;
27 (8) the acquisition, construction, improvement, operation,
20
H.B. No. 1311
I
extension,
enlargement, maintenance, and repair of
any facilities
2
or assets
and the duties of the authority with reference to them;
3
(9)
the procedure, if any, by which the
terms of any
4
agreement
with bondholders or noteholders may
be amended or
5
abrogated,
the amount of bonds or notes the holders
of the bonds or
6
notes are
required to give consent to, and the manner in which the
7
consent may
be given;
8
(10)'
limitations on the amount of money to
be spent by the
9
authority
for administrative or other expenses;
.10
(11)
vesting in a trustee or other_fiduciary
the nronerty_
11 rights, powers, and duties in trust as the authority determines,
12 which may include any of the rights, -powers, and duties, of the
13 trustee appointed by the bondholders or noteholders pursuant to
14 this Act, and abrogating the right of the bondholders or
15 noteholders to appoint a trustee under this Act or limiting the
16 rights, powers, and duties of the trustee;
17 (12) placing the management, operation, and control of
18 specified facilities or assets of the authority in the hands of a
19 board of trustees to be named in the resolution or trust indenture
20 and specifying the terms of office of the board of trustees, their
21 powers and duties, the manner of exercising their powers and
22 duties, the appointment of successors, and all matters pertaining
23 to their organization and duties; and
24 (13) any other matters, of like or different character, that
25 in any way affect the security or protection of the bonds or notes
26 or the bondholders or noteholders.
27 (k) The resolution authorizing the issuance of the bonds or
01
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H.B. No. 1311
notes or the trust indenture or other instrument securing them may
provide that in the event of a default or, under the conditions
stated in those instruments, a threatened default in the payment of
principal of or interest on bonds or notes, any court of competent
jurisdiction may, on petition of the holders of outstanding bonds
or notes, appoint a receiver with authority to collect and receive
pledged revenues and receipts, and the instruments may limit or
qualify the rights of less than all of the holders of the
outstanding bonds or notes payable from the same source to
institute or prosecute any litigation affecting the authority's
properties or revenues.
(1) Bonds or notes, including refunding bonds, authorized by
this Act may be additionally secured by a trust indenture under
which:the trustee may be a bank having trust powers located either
inside or outside the state. The bonds or notes, within the
discretion of both the authority and the city council of the City
of La Porte, may be additionally secured by a mortgage or a deed of
trust lien or security interest on facilities or assets of the
authority and all real property, franchises, easements, leases, and
contracts and all rights appurtenant to the properties, vesting in
the trustee power to sell the facilities or assets for the payment
of the indebtedness, power to operate the facilities or assets, and
all other powers and authority for the further security of the
bonds or notes. The trust indenture, regardless of the mortgage or
the deed of trust lien or security interest in the facilities or
assets, may contain any provisions prescribed by the authority and
the city council of the City of La Porte for the security of the
22
I
H.B. No. 1311,
1 bonds or notes and the preservation of the trust estate, and may
2 make provision for amendment or modification of them, and may
3 condition the right to spend the authority's money or sell the
4 authority's facilities or assets on approval of a registered
5 professional engineer selected as provided in the trust indenture,
6 and may make any other provisions for protecting and enforcing the
7 rights and remedies of the bondholders or noteholders as may be
8 reasonable and proper and not in violation of the law. The
9 resolution or trust indenture may also contain provisions governing
10 the issuance of bonds and notes to replace lost, stolen, or
11 mutilated bonds or notes,
12 (m) The authority may direct the investment of money in the
13 funds created by the resolutions, trust indentures, or other
14 instruments securing the bonds or notes. From the proceeds from
15 the sale of the bonds or notes, the authority may set aside amounts
16 for payments into the interest and sinking fund until completion of
17 construction and until adequate revenues and receipts are
18 available from operations to pay principal and interest and amounts
19 for payments into reserve funds, and provisions for this may be
20 made in the resolution authorizing the bonds, notes, or the trust
21 indenture or other instrument securing the bonds or notes.
22 Proceeds from the sale of the bonds or notes may, be used for the
23 payment of all expenses of issuing and selling the bonds or notes.
24 (n) The proceeds from the sale of the bonds and notes and
25 money in any funds created in connection with the bonds or notes
26 may be invested:
27 (1) in direct or indirect obligations of or obligations
23
H.B. No. 1311
1 unconditionally guaranteed by the United States maturing in the
2 manner that may be specified by the resolution authorizing the
3 bonds or notes or the trust indenture or other instrument securing
4 the bonds or notes; or
5 (2) in certificates of deposit of any bank or trust company
6 whose deposits are secured by the obligations described in
7 Subdivision (1) of this subsection.
8 (o) With the prior approval of the city council of the City
9 of La Porte, the authority may provide by resolution for the
10 issuance of refunding bonds or motes to refund outstanding bonds or
11 notes issued under this Act and their accrued interest. The
12 authority may sell the refunding bonds or notes and use the
13 proceeds to retire the outstanding bonds or notes issued under this
14 Act or the authority may exchange the refunding bonds or notes for
15 the outstanding bonds or notes. The issuance of the refunding
16 bonds or notes, their maturity, the rights of the bondholders, and
17 the duties of the authority with respect to refunding bonds or
1.8 notes are governed by the provisions of this Act relating to
19 original bonds or notes, to the extent that they may be made
20 applicable. The authority may also refund any bonds or notes under
21 any general law of the state.
22 (p) After bonds and notes, including refunding bonds and
23 notes; are authorized by the authority, the bonds and notes and the
24 record relating to their issuance shall be submitted to the
25 attorney general for his examination as to their validity. If the
26 bonds and notes recite. that they are secured by a pledge of the
27 revenues and receipts of a lease or leases or other contract or
24
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H.B. No. 1311
1 contracts previously made between the authority and any person, the
2 leases and contracts may also be submitted to the attorney general.
3 if the bonds or notes have been validly authorized and if the
4 leases or contracts have been made in accordance with the
5 -constitution and laws of this state, the attorney general shall
5 approve the bonds or notes and the leases or contracts, and the
7 bonds or notes shall be registered by the comptroller of public
8 accounts.
19 (q) After the bonds or notes, and the leases or other
10 contracts, if any, are submitted, have been approved by the
11 attorney general, and the bonds and notes have been registered by
12 the comptroller of public accounts and delivered to the purchasers,
13 the bonds and notes and any underlying leases and contracts are
14 incontestable for any cause.
15 (r) Payment of bonds and notes according to the term and
16 tenor, performance of agreements with the holders of bonds or notes
17 or any person in their behalf, and performance of official duties
18 prescribed by the provisions of this Act in connection with any
19 bonds or notes may be enforced in any court of competent
20 jurisdiction by mandamus or other appropriate proceeding.
21 (s) Bonds issued under this Act and coupons, if any,
22 representing interest on them, shall, when delivered, be considered
23 and construed to be a "security" within the meaning of Chapter 8 of
24 the Uniform Commercial Code.
25 (t) Bonds and notes issued under this Act, the interest on
26 them, and the profit from the sale of them, shall be exempt from
27 taxation by the state or by any municipal corporation, county, or
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H.B. No. 1311
1 other political subdivision or taxing district of the state.
2 (u) Bonds and notes issued under this Act, together with the
3 interest on them, shall be secured by and payable only from the
4 sources provided by the terms of this Act.
5 (v) This Act shall not be construed to authorize the giving
6 or lending of the credit of the state or to be a pledge of the
7 credit of the state for the payment of any bonds or notes issued
8 under this Act and the purchasers and holders of any bonds or notes
9 shall never have the right to demand payment from any revenues,
10 receipts, or assets of the authority except those pledged to the
11 payment of bonds or notes. This state, however, pledges and agrees
12 with the holders of any bonds or notes issued under this Act that
13 it will not limit or alter the rights vested in the authority to
14 fulfill the terms of any agreements made with the holders of the
15 bonds or notes consistent herewith, or in any way impair the rights
16 and remedies of the holders until the bonds or notes, together with
17 interest on them, with interest on any unpaid installments of
18 interest, and all costs and expenses for which the authority is
19 liable in connection with any action or proceedings by or on behalf
20 of the holders, are fully met and discharged. The authority may
21 include this pledge and agreement of the state in any agreements it
22 makes with the holders of the bonds or notes.
23 SECTION 14, CONSTRUCTION PROJECTS. Before the issuance of
24 bonds or notes to finance a construction project, the authority
25 must submit the plans for the project to the Texas Water Commission
26 for approval in the manner provided by Section 54.516, Water Code.
27 SECTION 15. EACILITIES; EMINENT DOMAIN. (a) The authority
26
H.B. No. 1311
1 may construct, lay, maintain, and operate canals, laterals,
2 ditches, levees, pipelines, and all other facilities for the
3 transportation and distribution of water, together with service
4 roads and all other facilities incidental to and designed for use
5 in connection with the transportation and distribution of water,
6 under, along, and: across any railroad, railroad right-of-way,
7 canal, stream, pipeline, utility line, streets or alleys in cities,
8 towns, and villages, subject to reasonable regulation by the
9 cities, towns, and villages, and public roads and highways, but the
10 crossings shall not impair the uses of the facilities crossed, and
11 the facilities shall be promptly restored to their former condition
12 of usefulness.
13 (b) In the event that the authority, in the exercise of the
14 power of eminent domain or power of relocation, or any other power
15 granted under this Act, makes necessary the relocation, raising,
16 rerouting or changing the grade of, or altering the construction
17 of, any highway, railroad, electric transmission line,,telegraph or
18 telephone properties and facilities, or pipeline, all such
19 necessary relocation, raising, rerouting, changing of grade or
20 alteration of construction shall be accomplished at the sole
21 expense of the authority. The term "sole expense" shall mean the
22 actual cost of such relocation, raising, lowering, rerouting, or
23 change in grade or alteration of construction in providing
24 comparable replacement without enhancement of such facilities,
25 after deducting therefrom the net salvage value derived from the
26 old facility.
27 (c) The authority shall not be required to give bond for
27
H.,B. No. 1311
1 appeal dr bond for costs in any condemnation suit or any other suit
2 to which it may be a party.
3 SECTION 16. DEPOSITORY; ACCOUNTS. (a) With the prior
4 approval of the city council of the City of La Porte, the board of
5 directors of the authority shall select any bank or banks in the
6 State of Texas to act as depository or depositories for the funds
7 of the authority. To the extent that funds in the depository bank
8 or banks are not insured by the Federal Deposit Insurance
9
Corporation, they shall be
secured in the manner
provided by law
10
for the security of funds of
the City of La Porte.
So long as the
11
provisions of Chapter 179,
Acts of the 60th Legislature,
Regular
12
Session, 1967 (Article 2529c,
Vernon's Texas Civil
Statutes), are
13
observed, any director of
the authority may be
a shareholder in
14 said depository bank or banks.
15 (b) A complete system of accounts shall be kept by the
16 authority and an audit of its affairs for each year shall be
17 prepared by an independent certified public accountant, or a firm
18 of independent certified public accountants, of recognized
19 integrity and ability. The fiscal year of the authority shall be
20 from October 1 to September 30 of the following year, unless and
21 until changed by the board. A written report of the audit shall be
22 delivered to each member of the board not later than 90 days after
23 the close of each fiscal year. A copy of the audit report shall be
24 delivered on request to the holder or holders of at least 25
25 percent of the then outstanding bonds of the authority. At least
26 five additional copies of the audit shall be delivered to the
27 office of the authority, one of which shall be kept on file and
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
H.B. No. 1311
shall constitute a public record open to inspection by any
interested person or persons during normal office hours and one
copy of the audit report shall be filed with the City of La Porte.
The cost of the audit shall be paid by the authority.
SECTION 17. AUTHORITY OFFICE. The board of directors shall
designate, establish, and maintain an office or offices of the
authority as provided by Section 54.110, Water Code.
SECTION 17a. POWERS WITHIN EXTRATERRITORIAL JURISDICTION.
Notwithstanding any other provision of this Act to the contrary,
none of the authority's powers, privileges, rights, or functions
may be exercised in connection with any property, works,
facilities, improvements, political subdivision, or proposed
annexation of territory located in whole or in part within the
extraterritorial jurisdiction or within the corporate limits
(either general or limited purpose) of any city with a population
of 1.2 million or more unless the authority obtains specific
written consent of such city. Such written consent, to be
effective, must be in the form of an ordinance duly adopted by the
governing body of such city.
SECTION 18. NOTES AND BONDS AS INVESTMENTS AND SECURITY.
All bonds of the authority are legal and authorized investments for
banks, savings banks, trust companies, savings ' and loan
associations, insurance companies, fiduciaries, trustees, and
sinking funds of cities, towns, villages, counties, school
districts, and political subdivisions of the state and public
agencies of the state. The bonds shall be eligible to secure the
deposit of funds of the state or of a city, town, village, county,
29
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2
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4
S
6
7
8
9
10
11
H.B. No. 1311
school district, or any other agency or political subdivision of
the state. The bonds shall be lawful and sufficient security for
those deposits to the extent of their face value, when accompanied
by all unmatured coupons appurtenant thereto.
SECTION 19. EMERGENCY. The importance of this legislation
and the crowded condition of the calendars in both houses create an
emergency and an imperative public- necessity that the
constitutional rule requiring bills to be read on three several
days in each house be suspended, and this rule is hereby suspended,
and that this Act take effect and be in force from and after its
passage, and it is so enacted.
30
H.B. No. 1311
President of the Senate Speaker of the House
I certify that H.B. No. 1311 was passed by the House on April
2, 1981, by the following vote: Yeas 140, Nays 0, 9 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 1311 on May 30, 1981, by the following vote: Yeas 129, Nays 1,
1 present, not voting; and, pursuant to the provisions of Article
XVI, Section 59(d) of the Constitution of Texas, a copy of H.B. No.
1311 was transmitted to the Governor on February 20, 1981, and the
recommendation of the Texas Water Commission was filed with the
Speaker of the House on March 6, 1981.
Chief Clerk of the House
I certify that H.B. No. 1311 was passed by the Senate, with
amendments, on May 27, 1981, by the following vote: Yeas 31, Nays
APPROVED:
Date
Governor
Secretary of the Senate
31
E f
r_
Amendment No.
Amend H. B. 1311 as follows:
(1) By adding after the only sentence in Section 8 the -following
L-.
sen-te_nC_e: &'Any land annexed must be contiguous 1w-i and adjacent
to the authority."e
(2) By adding as Section 17a the following: ,
Section 17a« Notwithstanding any other provision of this
Act to the contrary, none of the authority's powers, privileges,
rights, or functions may be exercised in connection with any
property, works., facilities, improvements, political subdivision,
or proposed annexation of territory located in whole or in
r, part within the extraterritorial jurisdiction or within the
corporate limits (either general or limited purpose) of any
city with a population of 1.2 million or more unless the authority
obtains specific written -consent of such city. Such written
consent, to be effective, must be in the form of an ordinance
duly adopted by the governing body of such city.
ADOPTED
MAY 27 1961
sbaor..y of the 8ofiabr .
p
Amend the caption to conform to the
body of the bill
MAY 27 1981
0
� the Safi�
THIS CONTRACT IS SUBJECT TO ARBITRATION
UNDER THE TEXAS GENERAL ARBITRATION ACT
CONTRACT FOR THE SUPPLY OF POTABLE WATER AND THE
CONSTRUCTION, FINANCING AND OPERATION OF WATER TREATMENT
TRANSMISSION AND DISTRIBUTION FACILITIES
THIS CONTRACT (the "Contract") made and entered into as of
, 19, by and between La Porte Area Water
the Cam____ day of �
Authority (the "Authority"), a conservation and reclamation district
in Harris County, Texas, and a governmental agency and a body politic
and corporate, created by Chapter 729, page 2678, Acts of the 67th
Legislature of the State of Texas, Regular Session, 1981 (the "Act"),
and the City of Shoreacres, Texas, a municipal corporation of the
State of Texas (the "City"),
WHEREAS, the Harris -Galveston Coastal Subsidence District
(the "Subsidence District"), was created by the Legislature of Texas
in 1975 for the purpose of regulating the withdrawal of groundwater
from the area within the boundaries of Harris County and Galveston
County in order to end subsidence which contributes to or precipitates
flooding, inundation or overflow of any area within the District;
WHEREAS, the Subsidence District is charged with the duty
and has the power to control and prevent subsidence within its
boundaries by reducing the amount of groundwater withdrawals from
all wells within the Subsidence District which produce groundwater,
including those owned and operated by corporations, governmental
subdivisions or agencies and other organizations;
WHEREAS, the City and other Participants named in Section
2.01 hereof are required by the rules nd regulations of the Subsidence
i �
District to reduce their respective withdrawals of groundwater from
their wells and replace such withdrawals with surface water which has
been properly treated for domestic use;
WHEREAS, the Authority was created primarily for the purpose
of providing water treatment and transmission facilities necessary to
serve municipal corporations, political subdivisions and others within
an area described in Section 3 of the Act, and may provide such facilities
to persons, corporations, municipal corporations, political subdivi-
sions and others within an area described within Section 5(b) of the Act;
WHEREAS, under the Act the Authority has specific power,
among others, to (a) acquire surface Water supplies from sources inside
and outside its boundaries, (b) treat, purify, transport, distribute,
sell and deliver Water (as defined herein) to corporations, municipal
corporations, political subdivisions of the State of Texas and others,
(c) purchase, construct or otherwise acquire facilities and improvements
necessary to carry out its powers, and (d) issue and sell its revenue
bonds, without the necessity of an election, for the purpose, among
others, of paying the cost of such facilities and improvements;
WHEREAS, at the request and for the benefit of the City and
such other Participants, the Authority proposes (a) to enter into a
contract with the City of Houston, Harris County, Texas, a municipal
corporation organized and existing under the laws of the State of Texas,
for the purchase of an undivided interest in the Pumping and Production
Capacity of the City of Houston's Southeast Water Purification Plant
(hereinafter called the "Southeast Plant") and potable surface water
from the City of H ouston's Southeast Plant, in an aggregate amount suf-
ficient to supply the estimated potable surface Water requirements of
-2-
the participants through the year 1994; and (b) (i) to purchase and con-
struct the Water pumping, transmission, distribution, metering and all
other related facilities necessary to transport potable surface Water
from the Southeast Plant to the Authority and the Water Distribution
Systems of the Participants, including the City; and (ii) to issue, sell
and deliver its revenue bonds in an aggregate principal amount sufficient
to pay in full (x) the costs of acquiring the Authority's share of the
Southeast Plant, the Transmission System and the Distribution System
and (y) other related costs including the cost of issuing such bonds;
WHEREAS, the Authority has heretofore entered into or will
enter into Contracts for the Supply of Potable Water and the Construction,
Financing and Operation of Water Transmission and Distribution Facilities
with all of the Participants other than the City and all such Contracts
and this Contract (collectively, the "Water Sales Contracts") will be
substantially the same in all material respects in their terms, conditions
and provisions;
WHEREAS, in order to comply with the rules and regulations of
the Subsidence District at the earliest feasible date, the City desires
to purchase Water from the Authority on the terms and conditions
herein set forth and the Authority is willing to sell Water to the City
upon the same terms and conditions; and
WHEREAS, the Authority and the City are authorized to enter
into this Contract pursuant to the Act, V.A.T.C.S. Article 4413 (32c),
and other applicable laws;
NOW, THEREFORE, in consideration of the mutual premises and
covenants and agreements herein contained, the Authority and the City
hereby agree as follows:
-3-
ARTICLE I
Definition of Terms
Section 1.01 Unless the context requires otherwise, the
following terms and phrases shall have meanings as follows:
(1) Act - Chapter 729, page 2678 et seq., Acts of the 67th
legislature of the State of Texas, Regular Session,
1981.
(2) Authority - The La Porte Area Water Authority.
(3) Authority Director - the General Manager of the La Porte
Area Water Authority, or his designated representative.
(4) Board - The Board of Directors of the Authority.
(5) Bond Resolution - any resolution or order of the Author-
ity, duly approved by the City, which authorizes the
issuance of any Bonds.
(6) Bonds - any revenue bonds issued by the Authority, as
authorized by this Contract and any Bond Resolution,
whether one or more issues, and the interest appertaining
thereto, to finance the Authority's participation in the
Southeast Plant, the Transmission System, and the Distri-
bution System, including all improvements, enlargements,
and expansions thereof, and any Bonds issued to refund
such bonds.
(7) C_ity - the City of Shoreacres, Harris County, Texas.
(8) City System - the City's existing waterworks and sanitary
sewer system, together with all present and future
extensions, additions, replacements and improvements
thereto.
(9) Code - the Internal Revenue Code of 1986, as amended.
(10) CWA - the Coastal Water Authority, previously known as
the Coastal Industrial Water Authority.
(11) Demand Allocation Factor - the percentage of the produc-
tion capacity of the Southeast Plant which the Authority
is entitled to use at any given time. The initial Demand
Allocation Factor for the Authority will be the percentage
of the actual production construction cost paid by the
Authority divided by the total actual production construc-
tion cost, as specified in Section 2.01 of the Houston
Contract. The initial Demand Allocation Factor is 5.25%.
-4-
(12) Distribution System -- those facilities used to transport
treated surface Water from the termination of the trans-
mission facilities shown on Exhibit "C", attached hereto,
and fully incorporated by reference herein, to
each Participant's take point.
(13) Excess Production Fee - the rate to be charged to the
City by the Authority for use of production capacity
above the City's share of committed capacity from the
Southeast Plant which shall be payable in the amounts
and at the times as set forth in Section 4.05 of the
Houston Contract.
(14) Excess Pumpage Fee - the rate to be charged to the City
by the Authority for use of pumping facilities associated
with the Southeast Plant in excess of the City's share
of committed capacity for the Project, which shall be
payable in the amounts and at the times as set forth in
Section 4.05 of the Houston Contract.
(15) Fiscal Year - the Fiscal Year of the Authority, as
designated in Section 16(b) of the Act, which is from
October 1 to September 30 of the following year, unless
and until changed by the Board.
(16) Houston - the City of Houston, Harris County, Texas.
(17) Houston Contract - the contract between the Authority and
Houston, which shall be in all material respects in accor-
dance with the terms and provisions of the contract at-
tached to this Contract as Exhibit "A", incorporated by
reference herein as if recited in this Contract verbatim,
providing for the purchase by the Authority of: an
undivided interest in the Southeast Plant as well as
potable treated surface Water from the Southeast Plant.
(18) Houston Director - the Director of the City of Houston's
Department of Public Works and Engineering or any other
person designated by such Director.
(19) La Porte - the City of LaPorte, Harris County, Texas.
(20) "MGD" - an abbreviation for million gallons per day. As
used in this Contract, "MGD" refers to a quantity of
Water during a period of time expressed for convenience
in terms of an average daily quantity during a calendar
month (unless a different period of time is specified).
The volume of two MGD for a calendar month, for example,
is calculated as follows: Two million gallons multiplied
by the number of days in such calendar month.
(21) operation and Maintenance Expenses - all costs of pro-
viding Water to Participants under the Water Sales
-5-
Contracts, except for costs funded by Bond proceeds;
debt service on the Authority's Bonds and amounts re-
quired to fund any reserve fund, contingency fund,
rebate fund, or any other fund established under any
Bond Resolution, including without limitation all opera-
tion and Maintenance Costs billed to the Authority by
Houston, all operating and Maintenance Costs incurred
by the Authority related to the Transmission system and
the Distribution System, and all administrative costs
incurred by the Authority (including insurance).
(22) "Part ici ants" - the City and all of the other parties
named in Section 2.01 hereof who have executed a Contract
substantially similar to this Contract. The term also
includes any customer who executes a Water Sales Contract
pursuant to the provisions of Section 11.09 hereof from
and after such execution.
(23) Production Capacity - the maximum rate of production of
Created surface Water from the Southeast Plant, which
equals 80 MGD.
(24) Pum in Allocation Factor - the percentage of the South-
east Plant's pumping and related treated Water storage
capacity which the Authority is entitled to -use at any
given time. The initial Pumping Allocation Factor for
the Authority will equal the actual construction cost
of the pumping and storage facilities paid by the Author-
ity divided by the total actual construction cost for
such pumping and storage facilities. The initial Pumping
Allocation Factor is 2.33%.
(25) Pumping Capacity - the maximum rate of delivery of
treated surface Water from the Southeast Plant, which
equals 225 MGD (expressed as a peak hour pumping rate).
(26) Service Area -- that area described in Sections 3 and
5 (b} of the Act.
(27) Southeast Plant - the Project described in the Houston
Contract generally, and specifically described in Exhibit
"B" to the Houston Contract.
(28) Subsidence District - the Harris -Galveston Coastal Sub-
sidence District.
(29) Transmission System - those facilities, including pipe-
lines, easements, pumping, and other devices to deliver
treated surface Water from the take point at the Southeast
Plant, shown on Exhibit "A" attached to the Houston
Contract, to that point shown on Exhibit "C" of this
Contract, which includes necessary storage and pumping
facilities to deliver treated surface water to each
aM.
Participant.
(30) "Water" - the term "Water" means potable treated surface
Water that has been supplied by Houston in accordance
with the Houston Contract.
(31) Water Sales Contracts - this Contract, the contracts
between the Authority and the other Participants named
in Section► 2.01 of this Contract, and any Contract
between the Authority and a new Participant. All water
Sales Contracts are and shall be in a form substantially
similar to this one.
ARTICLE II
Purchase and Construction of the Authority's Share
of the Southeast Plant and Transmission System;
Execution of Contracts
Section 2.01 With the full cooperation of the City (and the
other Participants) the Authority agrees to purchase an initial Demand
Allocation Factor of 5.25% and an initial Pumping Allocation Factor of
2.33% in the Southeast Plant, in accordance with the Houston Contract,
attached hereto as Exhibit "A". Each Participant's share of the initial
Demand Allocation Factor and initial Pumping Allocation factor are set
forth below opposite the name of each party.
% SHARE SHARE % SHARE SHARE
PARTICIPANT OF IDAF* OF IDAF* OF IPAF** OF IPAF**
City of La Porte 83.30% 4.375% 83.30% 1.94%
Bayshore MUD 7.67% 0.400% 7.67% 0.18%
City of Shoreacres 4.74% 0.2500 4.74% 0.11%
City of Morgans Point 4.29% 0.225% 4.29% 0.10%
* IDAF - Initial Demand Allocation Factor
** IPAF - Initial Pumping Allocation Factor
Section 2.02 Promptly after the execution and delivery of
this Contract, and after the execution and delivery of the Houston Con-
tract by the Authority.and Houston, the Authority shall proceed promptly
to (a) acquire sufficient land for all easements or rights -of -way neces-
sary to deliver Water from the Southeast Plant to the Participants as
-7-
provided herein; (b) cause its engineers to prepare detailed plans and
specifications for the construction of the Transmission System and
Distribution System; and (c) obtain the approval of all such plans and
specifications by the Texas Department of Health and all other govern-
mental agencies having jurisdiction.
Section 2.03 The pro rata share of each Participant in the
actual construction cost of the Transmission System and the Distribution
System shall be calculated when sufficient engineering and cost data
are available to the Authority. Each Participant, including the City,
shall approve the finalized construction cost formula and the City's
share of the actual construction cost for the Transmission System and
Distribution System to be paid by the City and the other Participants,
prior to the Authority's sale of bonds to finance the Distribution
System and Transmission System.
Section 2.04 It is expressly understood and agreed that
the acquisition of land, easements, and rights -of -way, the awarding of
Contracts, the approval of plans and specifications and the approval of
changes in said plans and specifications, and the supervision of
construction of the Southeast Plant, the Transmission System, and the
Distribution System are solely within the discretion and control of the
Authority.
Section 2.05 It is expressly understood and agreed that any
obligation.on the part of the Authority to acquire, construct, improve,
enlarge, extend, repair, complete or operate the Authority's share of
the Southeast Plant, the Transmission System, and the Distribution
System shall be subject to:
ME
(a) The availability of sufficient funds timely to Pay all
of the costs of construction of the Authority's share of
the Southeast Plant and the Transmission System and the
Distribution System;
(b) The Authority's ability to obtain all sites, rights -
of way, easements, labor, equipment and materials as
required for the construction of the Authority's share
of the Southeast Plant, Transmission System, and Distri-
bution System; and
(c) The Authority's obtaining all permits, licenses and ap-
provals required to construct and operate the Authority's
share of the Southeast Plant, the Transmission System,
and the Distribution System, provided the Authority
shall exercise its best efforts at reasonable expense so
to do.
section 2.06 Any duly designated representative of the City
shall, subject to making suitable arrangements through the Authority
Director and the Houston Director, and subject to reasonable safety
regulations, have access during normal working hours to the Southeast
Plant, the Transmission System and the Distribution System during
construction in progress and thereafter, and may make such inspections
thereof as may be deemed necessary or desirable. Such representatives
of the City shall also have full access during normal business hours,
upon reasonable notice, to all of the Authority's contracts, books,
records and other data relating to the construction or operation of
the Authority's share of the Southeast Plant, the Transmission System,
and the Distribution System.
Section 2.07 The City recognizes that the Houston Contract
may be amended from time to time, particularly in regards to the rates
for the sale, transportation, and delivery of potable water charged by
Houston to the Authority. The City agrees to be bound by such amendments
as they may occur. The Authority shall use its best efforts to negotiate
said amendments so as to benefit all Participants in the Authority's
Q'�
share of the Southeast Plant, the Transmission System and the distribu-
tion system. In any event, no amendment to the Houston Contract shall
supersede or diminish the obligation of the City to adhere to the pro-
visions of this Contract or the City's obligation to pay for its share
of the debt service attributable to any Bonds issued pursuant hereto,
or otherwise to adhere to the Bond Resolution authorizing the sale of
such Bonds.
Section 2.08 The City recognizes that the Water to be
delivered by the Authority hereunder will be potable treated surface
water (i) that has been purchased by and delivered to the Authority by
Houston as the operator of the Southeast Plant; and (ii) that shall
meet all applicable purity standards at the point of delivery to the
Participant of the Texas Department of Health and all other governmental
agencies with appropriate jurisdiction, as specified in Exhibit "A".
The City has satisfied itself that such water will be suitable for its
needs. THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, WHICH EXTEND
BEYOND THE DESCRIPTION ABOVE.
Section 2.09 The City may have the right to sell and deliver
Water to bulk purchasers thereof or other Participants who are not
customers of the City System, provided (a) all water sold and delivered
to any such purchaser or Participant, for all purposes of this Contract,
shall be treated as a part of the Water delivered by the Authority to
the City hereunder, (b) the City shall not be relieved of its obligations
hereunder to pay for all such Water; (c) the Authority shall never be
required, without the written approval of all other Participants, to
deliver to the City any Water in excess of that resulting from the
City's share of the Demand Allocation or Pumping Allocation factor in
_10_
0
the Southeast Plant; and (d) the City will not enter into any tame -or -
pay contract whereby a person agrees to take, or to take or pay for
Water provided to the City under this Contract or otherwise agrees to
purchase any Water provided to the City under this Contract without
the prior written consent and approval of the Authority.
ARTICLE III
Issuance of Bonds
Section 3.01 At such time as the Board deems it appropriate,
after considering the advice of its financial advisor and after the
Authority has entered into Water Sales Contracts with all of the
Participants, the Authority will exercise its best efforts to issue,
sell and deliver, in one or more series, its Bonds, payable solely
from the charges of the Authority payable under such Water Sales Con-
tracts, in the aggregate principal amount of $ or such
lesser amount as may be necessary or desirable in the opinion of the
Board to pay for the cost of acquisition, purchase or construction of
the Authority's share of the Southeast Plant, the Transmission System
and the Distribution System and all related costs including without
limitation initial operation and Maintenance Expenses, all financing,
accounting, engineering, legal, printing and other expenses and costs
incurred in issuing such Bonds, interest on the Bonds and operating
and maintenance expenses of the Authority's share of the Southeast
Plant and the Transmission System and the Distribution System during.
the period of construction, and amounts necessary to fund the interest
on and sinking fund established to provide for the payment of the in-
terest on and the principal of, the Bonds and any reserve fund, contin-
gency fund, operating reserve fund or other fund provided for in the
-11-
Bond Resolution, plus an amount sufficient to pay and reimburse the La
Porte for the Authority's administrative and overhead expenses thereto-
fore incurred and directly attributable and chargeable to the acquisi-
tion of the Authority's share of the Southeast Plant, the Transmission
System and the Distribution System.
Section 3.02 When the Authority desires to issue Bonds, it
shall deliver to the City and to La Porte for their approval as to
substance and form a proposed Bond Resolution (complete except for
interest rates, name of the initial purchaser or purchasers of the
Bonds and the discount or premium thereon) and the Authority's estimate
of the amount required to (a) pay or provide for the payment of (i)
all interest on, and principal of, the Bonds as and when the same
shall become due and payable and (ii) all reserve, contingency and/or
other funds provided for in such Bond Resolution and (b) fulfill the
terms of any agreement or covenant made by the Authority with the
owners of such Bonds or any person on their behalf. If the City con-
sents to such Bond Resolution or fails to object thereto as provided in
Section 3.03 hereof, the Authority shall thereafter be fully authorized
to issue such Bonds and to charge and collect the monthly minimum charge
specified in section 7.01 hereof from the City in respect thereof.
Section 3.03 Within fifteen (15) days of the receipt of the
Authority's proposed Bond Resolution, the City shall either consent
thereto (as evidenced by the adoption of an ordinance or resolution of
its City Council) or institute arbitration proceedings as provided here-
in to settle any claim, objection or controversy which the City might
raise concerning the form of the proposed Bond Resolution, otherwise
any such claim, objection or controversy shall be deemed waived. Issu-
-12-
ance of the Bonds shall not occur until arbitration, if any, is concluded.
Section 3.04 Promptly after the City and La Porte approve
the proposed Bond Resolution, the Authority shall proceed with the
preparation of such data, materials and documents as may be necessary
in the opinion of its financial advisor to facilitate the sale and
delivery of the Bonds, and the City agrees promptly to furnish the
Authority with all such financial information and other data as may
reasonably be required by the Authority in the sale of the Bonds in
compliance with all applicable laws, rules and regulations; provided,
however, that no representation, covenant or warranty of the City,
except as contained in this Contract, shall be included by the Authority
in any sales documents in connection with the sale of the Bonds without
the approval of the City. Following the sale and delivery of the Bonds,
the Authority shall furnish the City with a debt service schedule
showing the amounts required to pay all interest on and principal of
the Bonds as the same shall become due and payable.
Section 3.05 All Bonds shall be authorized, executed, issued,
sold and delivered in substantial compliance with the provisions of the
Act, including without limitation Section 13 thereof, and the Texas
Bond Procedures Act of 1981, as supplemented and amended. The proceeds
of sale of the Bonds, after deducting the costs of issuance and funding
any debt service, reserve, contingency, escrow or other funds which
are required by the Bond Resolution to be funded from such proceeds,
shall be deposited into the special construction fund provided for in
the Bond Resolution and used to pay the costs of acquisition, purchase
and construction of the Authority's share of the Southeast Plant, the
Transmission System and the Distribution System.
-13-
Section 3.06 In case of any deficiency in such special con-
struction fund to pay or provide for the timely payment of the costs
of acquisition and construction of the Authority's share of the Southeast
Plant, the Transmission System and the Distribution System, the Authority
shall proceed in the manner provided above to issue, sell and deliver
such further or additional series of its Bonds, as may be necessary to
provide funds for such purpose, and the City agrees to assist and
cooperate with the Authority in whatever means reasonably possible to
expedite such issuance and sale of additional Bonds and to avoid delays
in construction or defaults of construction payments. Any surplus
funds on hand in such special construction fund, after payment of all
costs of acquisition or construction of the Authority's share of the
Southeast Plant, the Transmission System and the Distribution System,
and all expenses of issuing such bonds, and after funding all reserve,
escrow, sinking or other funds required by the Bond Resolutions(s) to
be so funded, shall be transferred to and deposited in the debt service
fund or sinking fund created by the Bond Resolution to provide for the
payment of the principal of, and interest on, such Bonds.
ARTICLE IV
operation of the Southeast Plant; Sale and Delivery of Water
Section 4.01 The City recognizes that, pursuant to the terms of
the Houston Contract, the Authority is not entitled to operate the
Southeast Plant, but rather is a customer and equitable owner of a
portion of said plant. The Authority shall be responsible for operating
and maintaining the Transmission System and the Distribution System.
Section 4.02 In accordance with the terms and subject to the
conditions as set forth in this Contract and the Houston Contract, the
-14-
Authority shall sell and deliver (or cause to be delivered) to the City
at the points of delivery hereinafter specified, and the City agrees to
purchase from and pay the Authority for the potable Water used by the
City. The City is required to make payments to the Authority even if
no Water is delivered to the City by the Authority in accordance with
the provisions of Section 6.05.
The unit of measurement for water delivered hereunder shall be
1,000 gallons of water U. S. Standard Liquid Measure.
Subject to the first paragraph of this section, the City shall
be entitled to receive the entire amount of the City's share of the
Demand Allocation Factor and Pumping Allocation Factor. The City may
take Water from the Southeast Plant through the Authority Transmission
System, but may not take Water from the Southeast Plant that exceeds
the City's share of Production Capacity of the Southeast Plant multi-
plied by City's then current share of the Demand Allocation Factor,
nor may City take Water from the Southeast Plant through the Authority's
Transmission System at a rate which exceeds the City's share of the
Pumping Capacity of the Southeast Plant multiplied by the City's
then current share of Pumping Allocation Factor.
In the event that the Southeast Plant is not being operated at its
Production Capacity or its Pumping Capacity, the City may, with the
agreement of the Authority Director and the Houston Director, use a
portion or all the unused Production Capacity or Pumping Capacity of
the Southeast Plant during a billing period. When such additional
Production Capacity or Pumping Capacity is used, the City shall pay
the Excess Production Fee or the Excess Pumpage Fee, or both, as the
case may be, as are established in Section 4.05 of the Houston Contract,
-15-
attachdd hereto as Exhibit "A", and billed by Houston to the Authority.
Nothing herein, shall be construed to limit or frustrate the right
of City, the Authority or any other Participant to enter into agreements
for the alteration of any Participant's share of the Demand Allocation
Factor or Pumping Allocation Factor.
NOTICE: In addition, the Authorit reserves the right to limit the
amount of Water actually received by the City (by the use of flow regu-
lators, throttlin2 devices or other restrictive metering devices) to the
amount of reserved production or pum2ing capacity of the City, and at an
instantaneous rate equal to said production capacity or pumping ca i t .
Section 4.03 In consideration of and subject to the other terms
and conditions of this Contract, the Authority shall make, and the City
shall take, delivery of Water at the points of delivery specified in
Exhibit "C" annexed hereto and hereby made a part of this Contract. In
the event that the City desires Water to be delivered at a substitute
or additional point of delivery, the City shall give the Authority
written notice and the full particulars with respect thereto and such
substitute or additional point of delivery will be established by the
mutual agreement of the parties; provided, however, any cost or additional
cost associated with any such substitute or additional point of delivery
shall be borne by the City and the Authority shall have no obligation
to effect the delivery of Water at any such delivery point until all
such costs have been paid or reasonably provided for in the opinion of
the Board. Title to, possession and control of and responsibility for
all Water deliverable to the City hereunder shall remain in the Authority
up to the discharge side of the Authority's meter at each of the points
of delivery specified herein or pursuant to other provisions hereof
-16-
whereupon title to, possession and control of, and responsibility for
all such Water shall immediately pass to and vest in the City. Each
party hereto shall save and hold the other harmless from all claims,
demands and causes of action which may arise while said Water is under
its ownership and control.
section 4.04 It is recognized and understood by both parties to
this Contract that the City now owns and operates a system of wells
producing Water and that the City may elect to attempt to acquire and
operate additional wells, subject to the approval of all regulatory
authorities. While nothing in this Contract shall obligate the City to
continue the operation of its own Water wells, the City nevertheless
agrees that the Water supplied hereunder will be its principal source
of Water, and if it continues the operation of its own Water wells,
the City will coordinate the production therefrom in such manner as to
minimize large daily fluctuations in the quantity of Water taken under
this Contract.
ARTICLE V
Metering Equipment
Section 5.01 The Authority shall install, operate and maintain at
its expense the necessary measuring equipment of standard type for
measuring properly the quantity of Water delivered under this Agreement.
Such measuring equipment shall be located on Authority's supply main at
each point of delivery. such meter or meters and other equipment so
installed shall remain the property of Authority. Each of the partici-
pants shall have access to such measuring equipment at all reasonable
times, to inspect and to employ an independent laboratory to check
measuring equipment, but the reading, calibration and adjustment thereof
=WAS
shall be done only by the employees or agents of Authority. For the
purpose of this Contract, the original record or reading of the main
meter shall be the journal or other record book of Authority in its
office in which the records of the employees or agents of Authority
who take the reading are or may be transcribed. Upon written request
of any of the Participants, the Authority will provide a copy of such
journal or record book, or permit them to have access to the same in
the office of Authority during reasonable business hours.
Section 5.02 Calibration of Meters Once each Fiscal Year, on a
date as near the end of such Fiscal Year as practicable, the Authority
shall calibrate its meters at each point of delivery (and if requested
in writing by the receiving Participant, in the presence of a represen-
tative of such receiving Participant), and the parties shall jointly
observe any adjustments which are made to the meter in case any adjust-
ments shall be necessary, and if the check meter hereinafter provided
for has been installed, the same shall also be calibrated by the re-
ceiving Participant in the presence of a representative of Authority
and the parties shall jointly observe any adjustment in case any
adjustment is necessary. If the City shall in writing request the
Authority to calibrate its meter and the Authority shall give to the
City forty-eight (48) hours written notice of the time when any such
calibration is to be made and a representative of the City is not
present at the time set, the Authority may proceed with calibration
and adjustment in the absence of any representative of City.
Section. 5.03 Testing of Meters. If the City or the Authority at
any time observes a variation between a main delivery meter and the
check meter, if any such check meter shall be installed, such party
will 'promptly notify the other party, and the parties shall then cooperate
to procure an immediate calibration test and joint observation of any
adjustment and the malfunctioning meter shall then be adjusted to
accuracy. Each party shall give the other party forty-eight (48)
hours' notice of the time of any test or meter so that the other party
may conveniently have a representative present. In addition, any
Participant may request the Authority to provide a periodic calibration
test of the measuring equipment► for any reason. If the calibration
test shows that the Authority's meter is accurate within the below -
described tolerances, then such Participant shall pay for the test
performed. If the calibration test shows that the Authority's meter
is not accurate within the below described tolerances, then the Authority
shall pay for said meter calibration test.
Section 5.04 Adjustments to Meters if, upon any test, the
percentage of inaccuracy of metering equipment is found to be in excess
of three percent (3%), registration thereof shall be corrected for a
period extending back to the time when such inaccuracy began, if such
time is ascertainable, and if such time is not ascertainable, then for
a period extending back one-half (1/2) of the time elapsed since the
last date of calibration► but in no event further back than a period of
six (6) months. If, for any reason, the main .meter is out of service
or out of repair so that the amount of water delivered cannot be
ascertained or computed from the reading thereof, the water delivered,
through the period such meter is out of service or out of repair, shall
be estimated and agreed upon by the parties thereto upon the basis of
the best data available. For such purpose, the best data available
shall be deemed to be the registration of any check meter if the same
5Vz
has been installed and is accurately registering. otherwise, the best
data available shall be deemed any other meters in the transmission
line or treatment plant which can be related to the main delivery meter.
if no other meters in the system are operational which will allow
determination of delivered quantity, then the Authority shall determine
the amount of Water delivered during such period which may be estimated
(i) by correcting the error if the percentage of error is ascertainable
by calibration test or mathematical calculation, or (ii) by estimating
the quantity of delivery by deliveries during the preceding periods
under similar conditions when the meter was registering accurately.
ARTICLE VI
Rates and Charges
Section 6.01 The City and the Authority recognize the statutory
and contractual duty of the Authority to fix and from time to time to
alter and revise the rates and charges for Water delivery services to
be furnished and made available to the Participants so that the revenues
received by the Authority therefrom will at all times be not less than
an amount sufficient to:
(a) Pay or provide for the payment of all expenses (including but
not limited to operation and Maintenance Expenses) incurred
by the Authority and billed to the Authority by Houston in
producing, treating, and pumping the Water actually delivered
to the City;
(b) Pay all expenses of the Authority incurred in connection with
the Transmission System and Distribution System, including
but not limited to operation and maintenance expenses connected
with the Transmission System and Distribution System; and
(c) Pay or provide for the payment of:
(i) all of principalhofall premium, Bonds any,
whenand
andinterest
the on,
same and
shall
become due and payable; and
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(ii) any sinking fund, and all reserve, contingency and
other fund payments to be made in respect of any Bonds
when, and as the same shall become due and payable; and
(iii) fulfill the terms of any agreements or covenants with the
owners of any Bonds and/or with any person on their behalf.
The City recognizes that the Authority must fix and from time to
time alter and revise its rates and charges for Water delivery services
from the Southeast Plant. through the Authority's Transmission System
and Distribution System so that the gross revenues and the net revenues
actually received by the Authority from the Participants will produce
revenues sufficient as aforesaid on the basis of actual cash requirements,
with full allowance being made for delinquencies and costs of collections.
Section 6.02 The parties further recognize that the rates and
charges payable hereunder and under the other Water sales contracts
will be the only source of funds (other than bond proceeds) available
to the Authority with which to discharge its obligations hereunder, and
further, that the Authority is not organized for profit and that its
rates and charges should be at all times the lowest rates and charges
which are consistent with the aims and objectives of this Contract, the
efficient and economical provision of water delivery services to all
Participants now or hereafter served by the Authority and good business
management on the part of the Authority.
section 6.03 For the services rendered and to be rendered by the
Authority under this Contract, the City agrees to pay to the Authority,
at the time and in the manner hereinafter set forth, so long as this
Contract is in force and effect, the rates and charges established as set
forth in this Contract.
Section 6.04 Notwithstanding any term or provision herein to the
-21-
contrary, the City shall make payment of all rates and charges payable
hereunder to the Authority without regard to whether the Authority has
completed the acquisition, construction, improvement, enlargement, ex-
tension, or repair of its share of the Southeast Plant, or of the
Transmission System or the Distribution System, without regard to whether
the Southeast Plant, the Transmission System, or the Distribution
System is operating, or is operable, or its output is suspended, inter-
rupted, reduced or curtailed or has been terminated or abandoned,
entirely or in part, and without regard to any other condition or cause.
Section 6.05 On or before May 1 of each year, the City (and each
of the other Participants) shall submit its best estimate of the volume
of Water it will purchase from the Authority during the Fiscal Year
commencing on the following October 1. On or before June 1 of each
year, the Authority shall then prepare and submit to the City (and
each of the other Participants) the Authority's best estimate of the
costs and expenses which will be incurred by the City to purchase Water
from the Authority, including all rates and charges specified above,
during the Fiscal Year commencing on such October 1. The total of all
such estimated costs and expenses, after deducting any surplus funds
which may be on hand or after adding such amount as may be deemed
reasonable to restore during the year any deficiency of funds on hand,
shall then be divided by the estimated total volume of Water which will
be delivered to all of the Participants during said year. The quotient
(expressed in dollars per thousand gallons, the "Budgeted Unit Expense")
shall be used, subject to the remaining provisions of this Article VI,
for billing purposes during said Fiscal Year.
gPr_t_ion 6.06 In the event the Authority experiences any material
-22-
5
variation in the costs and expenses of operating and maintaining the
Project or in the volume of Water delivered thereby, it may adjust the
Budgeted Unit Expense by whatever amount is necessary, in the Board's
opinion, provided (a) written notice with respect thereto, specifying
the material facts involved, is given to the City and each of the other
Participants and (b) the adjustment shall not be effective until the
first day of the second month following the receipt of such notice, ex-
cept any adjustment resulting from action taken in any emergency and any
decrease in the Budgeted Unit Expense may be made effective with the
next monthly statement submitted to the City (and the other Participants).
Section 6.07
The Authority is empowered to establish and fund such
reserve funds as it deems necessary and prudent for the operation of
the Authority's share of the Southeast Plant, the Transmission System,
and the Distribution System. Amounts necessary to fund such reserve
funds shall be chargeable to the City (and the other Participants) as
a portion of the Budgeted Unit Expense. Said reserve funds may include
(but not necessarily be limited to) a reserve fund for the payment of
principal and interest on the bonds, an operating reserve fund, a con-
tingency reserve fund, and a capital repair reserve fund. Said reserve
funds may only be established by resolution or order adopted by the
Board. Further, said reserve funds may be funded, in whole or in part,
by proceeds from the sale of the Bonds, or by proceeds obtained by the
Authority from authorized Operating Charges (or capacity charges, as
the case may be) collected from all Participants.
ARTICLE VII
Billing and Payment
Section 7.01 On or before the tenth (loth) day of each
IMM
calendar month commencing 10, 19 , and continuing
thereafter throughout the term of this Contract, the Authority shall
submit to the City (and to each of the other Participants) a statement
invoicing the Authority's charges for the previous billing period.
Each such statement shall specify (a) the volume of the Water delivered
to the City during such month multiplied by the Budgeted Unit Expense
(as adjusted, if such be the case); (b) the Production and Pumping
Operation and Maintenance Expenses due by the City in respect of such
month (calculated on the basis of the actual volume of Water delivered
to the City); (c) the City's share of operation and Maintenance Expenses;
(d) the City's monthly minimum charge due by the City pursuant to the
provisions of this Contract; and (e) the total of all such charges.
The City shall pay each such statement promptly upon its receipt thereof,
and any amount not paid within forty (40) days of the date of said
statement shall bear interest at the rate of ten percent (10%) per
annum until paid and, if any part of the amount past due and unpaid
(including interest) is collected by the Authority through the services
of an attorney, there shall be added thereto the amount of a reasonable
attorney's fee.
Notwithstanding the above, and regardless of whether. the City actu-
ally takes Water from the Authority, the City shall pay, as the same
becomes due and payable, a monthly minimum charge which represents the
City's share of principal and premium (if any) plus interest charges
on all Bonds issued pursuant to this Contract (together with all funding
requirements for all reserve and other funds established under any Bond
Resolution). Said monthly minimum charge shall be calculated as follows:
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MONTHLY MINIMUM CHARGE _
A X S+ C X B+ D X E+ F X E+ G X H+)(6
I X H
12 6 12 6 12
A - The total of all principal and mandatory sinking fund payments
of, and premium on, all outstanding Bonds due within the next
twelve (12) months, the net proceeds of which have been or
are to be used for Production Capacity and Pumping Capacity.
B - Percentage of City's share of the Authority's Initial Demand
and Pumping Allocation Factor in Section 2.01 of Houston
Contract. In this instance, the Authority's share is 100o and
the share of each Participant is as follows:
La Porte - 83.30%
Morgan's Point -- 4.29%
Shoreacres - 4.74%
Bayshore Municipal Utility District - 7.67%
C - Total interest due on all outstanding Bonds due within the
next six (6) months, the net proceeds of which have been or
are to be used for Production Capacity and Pumping Capacity.
D -- The total of all principal and mandatory sinking fund payments
of, and premium on, all outstanding Bonds due within the next
twelve (12) months, the net proceeds of which have been or
are to be used for the Transmission System.
E - Percentage of the City's share of the total cost to construct
Transmission System, as established in Section 2.03 of this
Contract.
F - Total interest due within the next six (6) months on all out-
standing bonds, the net proceeds of which have been or are to
be used for the Transmission System.
G - The total of all principal and mandatory sinking fund payments
of, and premium on, all outstanding Bonds within the next
twelve (12) months, the net proceeds of which have been or
are to be used for the Distribution System.
H -- Percentage of the City's share of the total cost to construct
the Distribution System, as established in Section 2.03 of
this Contract.
I - Total interest due within the next six (6) months on all out-
standing bonds, the net proceeds of which have been or are to
be used for the Distribution System.
The proceeds of the Bonds used for a particular purpose shall
include: (i) the Authority's costs of issuing such Bonds; (ii) any
amounts deposited to a fund or funds pursuant to the Bond Resolution
W&M
authorizing such Bonds; and (iii) the proceeds of any Bonds issued to
refund such Bonds. .If Bonds are issued for more than one of the purposes
listed above, or for any other purpose, the Authority shall allocate
such Bond proceeds pro rata in accordance with such uses.
Section 7.02 In the event the City fails to pay any statement
when it is due and payable, the Authority may give notice of such
delinquency to the City and if all statements then due and unpaid,
including interest thereon, are not paid within thirty (30) days after
the delivery of such notice, then the City agrees that (a) the Authority
shall be authorized, at its option, to file suit for the collection
thereof and to collect any amounts due and unpaid, together with interest
thereon at the maximum legal rate and reasonable attorney's fees, and
(b) the Authority may, at its option and in addition to all other available
remedies, terminate the delivery of Water to the City under this Contract
until all amounts due and unpaid are paid in full as herein specified.
Section 7.03 in order to assure obtaining the lowest possible
interest cost with respect to the Authority's Bonds, the City agrees
that it is in its best interest to establish a reliable record of
payment of the Authority's rates and charges. Accordingly, the City
further agrees that it shall be unconditionally obligated to pay all
sums payable to the Authority hereunder and it shall pay the same
without set-off, counterclaim, abatement, suspension, or diminution
except as otherwise expressly provided herein, and this Contract shall
not terminate, nor shall the City have any right to terminate this
Contract, nor be entitled to the abatement of any payment or any reduc-
tion thereof, nor shall the obligations hereunder of the City be other-
wise affected for any reason that might be considered failure of consi-
-26-
deration, eviction or constructive eviction, destruction or damage_ to
the Authority's share of the Southeast Plant, the Transmission System,
or the Distribution System, failure of the Authority to perform or ob-
serve any agreement, whether expressed or implied, or any duty, liabi-
lity or obligation arising out of or connected with the Contract, it
being the intention of the parties that all sums required to be paid by
the City to the Authority hereunder shall continue to be payable in all
events and the obligations of the City hereunder shall continue unaffec-
ted, unless the requirement to pay the same shall be reduced or termin-
ated pursuant to an express provision of this Contract. If the City
disputes any amount to be paid to the Authority, the City shall nonethe-
less promptly make payments as billed by the Authority, and if it is
subsequently determined by agreement, arbitration, regulatory decision
or court decision that such disputed payment should have been less, the
Authority will then make proper adjustments to all Participants so that
the Participant will receive credit for its overpayments. Nothing con-
tained in this Section 7.03 shall be construed to release the Authority
from performance of any of the agreements on its part in this Contract.
ARTICLE VIII
Depository; Budget and Audits
Section 8.01 Pursuant to the provisions of section lb(a) of
the Act, the Board shall select such depository or depositories as it
deems prudent for the funds of the Authority.
Section 8.02 On or before June 1 of each year the Board shall
cause to be prepared a tentative budget for the ensuing Fiscal Year.
Said tentative budget shall be delivered by the Authority to the City
and the other Participants, which shall have an opportunity to prepare
and submit to the Board its comments thereon. Said comments shall be
-27-
delivered by the Board to the Authority and the other Participants
within 30 days of the receipt of the tentative budget. Thereafter, the
Board shall review the comments from the City and all other Participants
and shall prepare its budget on or before August 1 for the ensuing Fis-
cal Year. Said Budget, when prepared, shall be delivered to the City.
Section 8.03 Pursuant to the provisions of Section 16(b) of
the Act, the Board shall cause an audit of its affairs to be prepared
by an independant Certified Public Accountant or an independant firm
of Certified Public Accountants. A written report of the audit shall
be delivered to each member of the Board not later than 90 days after
the close of each Fiscal Year. Copies of the audit shall be delivered
to the office of the Authority, one of which shall be kept on file and
shall constitute a public record open to inspection by any interested
person or persons during normal office hours of the Authority. One
copy of the audit shall be delivered to each Participant. The cost of
the audit shall be paid by the Authority, and shall be an Operation
and Maintenance- Expense.
ARTICLE IX
Covenants of the Authority
Section 9.01 The Authority represents and covenants that (a)
it is duly authorized and empowered to enter into this Contract and (b)
it has and will have, throughout the term of this Contract, good right
and lawful power to execute, deliver and perform its obligations here-
under.
Section 9.02 The Authority covenants and agrees that it will
exercise its best efforts (a) to operate, maintain and manage the
Authority's share of the Southeast Plant, the Transmission System, and the
Distribution System or cause the same to be operated, maintained and
managed in an efficient and economical manner in accordance with stan-
dards normally used by utilities owning like properties and in accordance
with the standards established in Exhibit "A" and (b) to make or cause
to be made all needed replacements, additions, betterments and improve-
ments thereto in such manner that the efficiency of the Authority's
share of the Southeast Plant, the Transmission System, and the Distri-
bution System shall be fully maintained; provided, however, the Autho-
rity may temporarily interrupt or reduce deliveries of Water to the
City if the Authority determines that such interruption or reduction
is necessary in case of emergencies or to install equipment, make
repairs, replacements or inspections, or perform any other maintenance
work on the Authority's share of the Southeast Plant, the Transmission
System, the Distribution System or any part thereof. The Authority
shall inform the City of any such planned interruption or reduction,
giving the reason therefor, and will attempt to schedule the same at a
time which will cause the least interference with the operations of
the Participants. The foregoing is subject to the provisions of the
Houston Contract.
Section 9.03 The Authority covenants and agrees that it will
comply with all terms, covenants and provisions of the Houston Contract,
and will exercise its best efforts to enforce compliance by Houston of
its obligations thereunder in accordance with the respective terms
thereof.
Section 9.04 The Authority covenants and agrees to use its
best efforts to collect all charges due for Water supplied by it pursu-
ant to the Water Sales Contracts as the same shall become due, and shall
-29-
at all times maintain and promptly and vigorously enforce its rights
against any Participant which does not pay such charges when due.
Section 9.05 The Authority covenants and agrees to enforce
diligently the provisions of the Water Sales Contracts and shall duly
perform its covenants and agreements thereunder. The Authority shall
not consent or agree to, or permit any rescission of or amendment to,
any Water Sales Contract which will materially impair or adversely
affect the rights of the Authority thereunder or the rights or security
of the owners of any Bonds. Any action by the Authority in violation
of the foregoing covenant and agreement shall be null and void as to
the Authority and any other party to any Water Sales Contract.
Section 9.06 In any and all dealings between the Participants,
the Authority covenants to act in a matter comporting with accepted
standards of good faith and fair dealing.
Section 9.07 The Authority covenants and agrees to abide by
the terms of the conservation plan as adopted by the Authority, attached
hereto as Exhibit D, and to monitor and require compliance by all
Participants of said conservation plan.
ARTICLE X
Covenants of the City
Section 10.01 The City represents and covenants that (a) it
is duly authorized and empowered to enter into this Contract and (b) it
has and will have, as long as any Bonds are outstanding, good right and
lawful power to execute, deliver and perform its obligations under
this Contract and to fix and collect rates and charges for the service
provided by the City System sufficient to satisfy such obligations.
Section 10.02 Notwithstanding any term or provision hereof
or in the Houston Contract to the contrary, the obligation of the City
-30-
to make the payments under Section 7.01 hereof shall be payable solely
from the revenues and receipts of the City System. Such obligation
may be characterized as an obligation to pay on a "take or pay" basis
whether or not:
(a) The Southeast Plant, the Transmission System, and the
Distribution System or any part thereof is completed, is
operating or operable or its output is suspended, inter-
rupted, curtailed or terminated in whole or in part; or
(b) Any Water is delivered or provided under this Contract.
Said obligations shall not be deemed to constitute a debt of
the City or a pledge of its faith and credit; provided, however, nothing
herein contained shall be construed as preventing the City, in its
sole discretion, from making any such payment from sources other than
said revenues and receipts. Such obligation to make payments from
the revenues and receipts of the City System shall be absolute and
unconditional and shall constitute an operating expense of the City
System for all purposes.
Section 10.03 The City covenants and agrees to establish,
maintain and collect rates and charges for the service provided by
the City System which shall produce revenues and receipts at least
sufficient to enable the City to pay the Authority, when due, all
amounts payable by the City under this Contract and to pay any and all
such other amounts payable from, or which might constitute a charge and
a lien upon, the revenues and receipts derived from the operation of
the City System, including all operation and maintenance expenses and the
principal of, premium, if any, and interest on all revenue bonds and
other obligations related to the City System.
Section 10.04 The City covenants and agrees that it shall
-31-
(a) at all times operate the properties in the City System and the
business in connection therewith in an efficient manner and at a
reasonable cost, (b) at all times maintain the City System in good
repair, working order and condition, and (c) from time to time make all
necessary and proper repairs, renewals, replacements, additions,
betterments and improvements with respect to the City System so that
at all times the business carried on in connection therewith shall be
properly and advantageously conducted; provided, however, this covenant
shall not be construed as requiring the City to expend any funds which
are derived from sources other than the operation of the City System
and provided further that nothing herein shall be construed as preventing
the City from doing so.
Section 10.05 The City covenants and agrees that during the
term of this Contract (and any extension thereof) it will not sell or
otherwise dispose of or encumber all or substantially all of the City
System; provided, however, that the City may, in the ordinary course of
business, abandon, sell or otherwise dispose of any property or equipment
included in the City System if the City determines in good faith that
such property or equipment is surplus, obsolete or otherwise not required
for the efficient operation and maintenance of the City System.
Section 10.06 The City covenants and agrees that it shall take
no action the effect of which would be to prevent, hinder or delay the
Authority from the timely fulfillment of its obligations under this
Contract.
Section 10.07 The City convenants and agrees that it shall
not (a) issue any bonds, notes or other evidences of indebtedness, (b)
incur lease obligations which, under generally accepted accounting
-32-
principles, would appear as a liability on its balance sheet or (c)
enter into an agreement with any party other than the Authority to take
or pay for Water, which bonds, notes, evidences of indebtedness, lease
s or agreement is payable from the revenues derived from the City System
on a parity with, or superior in right of payment to, the operating
expenses of the City System. The City represents, covenants, and agrees
that the payments due to the Authority under this Contract are operating
expenses of the City System.
Section 10.08 (A) The City covenants and agrees with the
Authority for the benefit of the Authority, the other Participants, the
holders of the Bonds, and any other person interested in the exclusion
from gross income for federal income tax purposes of the interest on
(and original issue discount, if any, with respect to) the Bonds as
follows:
( a) No action will be taken by the City, and there will be
no omission of any action by the City, which act or omission will
adversely affect any exclusion from gross income for federal income
tax purposes of interest on the Bonds,and, in particular, shall
comply with those provisions of Section 103 and Sections 141 through
150 of the Internal Revenue Code of 1986, as amended (the "Code"),
that affect the exclusion from gross income for federal income tax
purposes of the interest on the Bonds.
(b) The City will not enter into any contract (or other
arrangement) for the sale of Water acquired from the Authority
pursuant to this Contract that will adversely affect the exclusion
from gross income for federal income tax purposes of the interest
on the Bonds.
(c) The City shall not take, or omit to take, any action if
such action or omission would cause the Bonds to be federally
guaranteed, within the meaning of Section 149(b) of the Code.
(B) The City represents and warrants that it is not now a
party to any contract whereby a person agrees to take or pay for Water
delivered by the City System. The City further covenants and agrees
-33-
understand that the allocation factors specified in Section 2.01 hereof
are based upon representations made by the City (and the other Partici-
pants) as to the requisite Demand Allocation Factor and the Pumping
Allocation Factor needed for participation in the Southeast Plant. The
City also understands that the Authority is the equitable owner of the
Demand Allocation Factor and the Pumping Allocation Factor of the South-
east Plant (as specified in Section 2.01) of the Southeast Plant and
is a customer of the Southeast Plant. Neither the Authority, the City,
or the other Participants are entitled to an expansion of the Authority's
share in the Southeast Plant, or an expansion of the City's share of the
Authority's Demand Allocation Factor and the Pumping Allocation Factor
in the Southeast Plant.
The Authority covenants with the City that if the City desires to
obtain an expansion of its share of the Demand Allocation Factor or
Pumping Allocation Factor (or both), that upon written request to the
Authority by the City of such an expansion, the Authority will proceed
to request that Houston expand the Authority's Pumping Allocation
Factor or Demand Allocation Factor in the Southeast Plant. The Author-
ity makes no warranties or covenants other than that it will use its
best efforts to obtain the requested expansion, and does not guarantee
an expansion in the City's share of the Demand Allocation Factor or
Pumping Allocation Factor if, as, or when needed. The City understands
that in the event it requests an increase in its share of the Demand
Allocation Factor or Pumping Allocation Factor (or both), that it will
be liable to pay for its increased capacity in the plant, together
with any and all necessary improvements in the Transmission System or
the Distribution System.
-35-
Section 11.02 Pursuant to Section 3.03 of the Houston Contract,
in the event that. Houston undertakes an expansion of the Southeast
Plant, the Authority shall have the option of increasing its Demand
Allocation Factor, its Pumping Allocation Factor, or both, by paying to
Houston a sum or sums of money representing an additional capital con-
tribution to the cast of such future expansion of the Southeast Plant
(as defined in the Houston Contract) to increase its Production Capacity
and its Pumping Capacity. Houston shall give one hundred fifty (150)
days advance written notice to the Authority of any proposed future
enlargement or expansion of the Southeast Plant. Immediately upon re-
ceipt of same from Houston, the Authority shall give written notice to
the City and the other Participants of such proposed future enlargement
or expansion of the Southeast Plant. At any time during the one hundred
fifty (150) days notice period, the Authority shall be authorized to
give notice of intent to enter into such agreement. The Authority will
not give notice to enter into such agreement, unless it receives writ-
ten notice from the City, or any other Participant, of its respective
desire to increase its share of the Demand Allocation Factor or Pumping
Allocation Factor. The Authority and the City agree, in giving or
responding to any such notice, to act timely and in good faith in order
to permit an orderly enlargement or expansion of the Southeast Plant
for the lowest cost reasonably obtainable without causing undue delay.
The Authority and the City understand that the option rights
provided to the Authority in the Houston Contract in this Section shall
be limited to an allocation of capacity in the expanded Southeast Plant
equal to or less than the then current demand allocations.
Section 11.03 If, in order to continue to supply the Authority
-36-
(arid therefore the City) Water at its Demand Allocation Factor, and
directly related and necessary to the operation and maintenance of the
Southeast Plant, it becomes necessary to perform a major replacement
to the Southeast Plant, plans and specifications for such repairs
shall be made and reviewed by the Houston Director and the Authority
Director. The Authority will pay its pro rata share of the cost of any
such work, and will pass its costs through to the City in direct propor-
tion to the City's share of same. Upon inspection and review of the
work, the Authority shall pay its pro rata share of any such repair or
replacement of the Southeast plant within ninety (90) days after accep-
tance of the completed repair or replacement by the Authority, and
shall invoice the City for its share of same. The Authority shall
never be required to pay for portions or replacements, additions or
transmission facilities that solely relate to the Participants or
their customers, nor shall the City ever be required to pay for portions
or replacements, additions or transmission facilities that solely
relate to other Participants of the Authority, or customers of the
southeast Plant other than the Authority.
ARTICLE XII
Easements and Vesting of Title
Section 12.01 During the term of this Contract, the Author-
ity shall have the right to use the streets, alleys and public ways
and places of the City for the purpose of constructing, operating
and maintaining any Water transmission lines, distribution lines,
and related facilities which constitute a part of the Authority's
share of the Southeast Plant, the Transmission System, and the Distri-
bution System.
-37-
Section 12.02 In accordance with the provisions of Article
1109j, V.A.T.C.S., at such time as the Bonds and all other indebtedness
incurred by the Authority in the acquisition, construction, improvement
or extension of the Authority's share of the Southeast Plant► the
Transmission System and the Distribution System is paid in full, an
undivided interest in the Authority's share of the Southeast Plant, the
Transmission System and the Distribution System equal to a fraction the
numerator of which is the aggregate amount of all Production Capacity
and Pumping Capacity of the City and the denominator of which is the
total amount of all Production Capacity and Pumping Capacity of all
of the Participants, shall automatically and irrevocably vest in the
City without the necessity of the execution and delivery of any convey-
ance by the Authority. If requested in writing by the City, the Author-
ity will execute, acknowledge and deliver to the City an appropriate
instrument acknowledging that such vesting of title has occured,
but such instrument shall not be necessary to effect the automatic
vesting of title which shall occur as set forth above.
ARTICLE XIII
Section 13.01 The Authority agrees to carry fire, casualty, public
liability and other insurance in amounts and against risks which are
consistent with accepted insurance practices of companies owning and
operating similar facilities in Harris County, Texas; provided, how-
ever, the Authority shall not be required to carry liability insurance
except to insure itself against risk of loss due to claims for which
it can, in the opinion of the Authority's legal counsel, be liable
under the Texas Tort Claims Act or any similar applicable law or
aim
judicial decision. All such insurance shall be written by responsible
insurance carriers selected by the Authority in amounts sufficient
to avoid the application of any co-insurance clauses contained in
the policies effecting such insurance (and in any event for less
than 80% of full insurable value).
If the Southeast Plant should be materially damaged or destroyed
by fire or other casualty, the Authority shall, as expeditiously as
possible, diligently prosecute, or cause to be prosecuted, the recon-
struction or replacement thereof as nearly as possible to the condition
thereof immediately prior to such damage or destruction and shall apply
the proceeds from any insurance to the payment of the cost of such re-
construction or replacement. The insurance proceeds, if any, remaining
after the application thereof to such reconstruction or replacement
shall be deposited in the Authority's interest and sinking fund (and
the capacity charges to be paid thereafter by the Participants
shall be reduced pro tanto). If the damage or destruction materially
reduces the Authority's ability to deliver Water hereunder and the
insurance proceeds are not sufficient to pay for the entire cost of
reconstruction or replacement, the Authority is authorized to draw
upon any contingency reserve fund and, if it is exhausted, then the
Participants shall make up any deficiency pro rata in accordance
with their reserved capacity in the Southeast Plant.
ARTICLE XIV
Arbitration
Section 14.01 Any dispute which is specifically stated to be
subject to arbitration under the provisions of this Contract shall be
promptly submitted to an arbitrator mutually agreed to by the Authority
-39-
and City. Such arbitrator shall promptly proceed to resolve the
disputes submitted to him pursuant to the terms of this section, if
Authority and City can agree on a single arbitrator.
Section 14.02 Any dispute or disagreement which is expressly made
subject to arbitration by the terms of this Contract (and if the
Authority and City cannot agree on a single arbitrator as provided in
the preceding paragraph) shall be submitted to arbitration in Houston,
Texas, by a board of three (3) arbitrators upon the written notice of
either the Authority or the City, which notice shall name one arbitra-
tor. The party receiving such written notice shall within ten (10) days
by written notice to the other, name a second arbitrator. The two
(2) arbitrators so appointed shall name a third, within ten (10)
days after appointment of the second arbitrator, failing which a third
arbitrator shall be appointed by a District Court in Harris County,
Texas, as provided in the Texas Arbitration Act.
Section 14.03 The arbitrators so appointed shall promptly hear
and determine the question or questions submitted pursuant to the
procedures established by the Texas General Arbitration Act, shall
render their decision with all reasonable speed and dispatch, but in
no event later than thirty (30) days after the conclusion of evidence.
if within said period a decision is not rendered by the arbitrators,
or a majority thereof, new arbitrators may be named and shall act
hereunder at the election of the Authority or the City in like manner
as if none had been previously named.
Section 14.04 The decision of the arbitrator or of the majority
of the arbitrators shall be final and binding upon the parties hereto
as to the question or questions submitted, and a judgment upon an
-40-
award rendered in such arbitration proceedings may be entered in any
court of competent jurisdiction. The expense of arbitration shall
be borne one-half by the Authority, and one-half by the City, except
that each party shall bear the compensation and expenses of its
counsel and witnesses.
Any cost of such arbitration (including cost of counsel and
witnesses) paid by the Authority shall be considered an Operation and
Maintenance Expense.
ARTICLE XV
Miscellaneous
Section 15.01 This Contract shall be effective upon the day and
year first above written and shall continue in force and effect until
, 2027 and thereafter shall continue in force until all
Bonds and refunding Bonds, and all other obligations (including the
Houston Contract), if any, of the Authority, shall have been paid.
Section 15.02 No change or modification of this Contract shall
be made which will affect adversely the prompt payment when due of
all moneys required to be paid by each Participant under the terms
of this Contract and no such change shall be effective which would
cause a violation of any provisions of any resolution of the Authority
authorizing the issuance of the Bonds or any Bonds issued to refund
any of the Bonds.
Section 15.03 Unless otherwise provided herein, any notice,
communication, request, reply or advice (herein severally and'collec-
tively, for convenience, called "notice") herein provided or per-
mitted to be given, made or accepted by any party to any other
party, must be in writing and may be given or be served by depositing
-41-
the same in the United States mail, postpaid, or by delivering the
same to an officer of such party, or by prepaid telegram when appro-
priate, addressed to the party to be notified; provided however,
that any notice of breach of this Contract, forfeit or Force Majeure
shall be sent by Certified Mail with return receipt requested. Notice
deposited in the mail in the manner hereinabove described shall be
conclusively deemed to be effective, unless otherwise stated herein,
from and after the expiration of ten days after it is so deposited.
Notice given in any other manner shall be effective only if and when
received by the party to be notified. For the purposes of notice,
the addresses of the parties shall, until changed as hereinafter
provided, be as follows:
if to the Authority, to:
La Porte Area Water Authority, Post office Box 1115, La Porte
Texas 77571 Attn: General Manager
If to the City as follows:
The parties hereto shall have the right from time to time and at any
time to change their respective addresses and each shall have the
right to specify as its address any other address by at least fifteen
(15) days written notice to the other parties hereto.
Section 15.04 This Contract shall be governed by the applicable
laws of the State of Texas and the United States of America and any
applicable federal, state, or county permits, rules► orders, and
regulations of any state or federal governmental authority having
-42-
jurisdiction, but nothing contained herein shall be construed as a
waiver of any right,to question or contest any such law, order, rule
or regulation in any forum having jurisdiction.
Section 15.05 The parties hereto agree that if any of the
provisions of this Contract should.be or be held to be invalid or to
contravene the laws of the State of Texas, or the United States of
America, such fact shall not invalidate the whole agreement, but it
shall be construed as though not containing that particular provision,
and the rights and obligations of the parties hereto shall be construed
and remain in force accordingly.
Section 15.06 The parties hereto agree that upon the expiration
of this Contract the City shall have the right to continued service
for an additional period of forty (40) years or for such other time as
may be agreed, upon execution of an appropriate agreement between
City and the Authority.
Section 15.07 It is not intended hereby to specify (and this
Contract shall not be considered as specifying) an exclusive remedy
for any default, but all such other remedies (other than termination)
existing at law or in equity may be availed of by the City or other
Participants and shall be cumulative. Recognizing however, that the
Authority's undertaking to provide and maintain a supply of Water
hereunder is an obligation, failure in the performance of which
cannot be adequately compensated in money damages alone, the Authority
agrees, in the event of any default on its part, that the City shall
have available to it the equitable remedy of mandamus and specific
performance in addition to any other legal or equitable remedies
(other than termination) which may also be available. Recognizing
-43-
that failure in the performance of the City' s obligations hereunder
could not be adequately compensated in money damages alone, the
City agrees in the event of any default on its part that the Authority
shall have available to it the equitable remedy of mandamus and
specific performance in addition to any other legal or equitable
remedies (other than termination) which may also be available to the
Authority. Notwithstanding anything to the contrary contained in
this Contract, any right or remedy or any default hereunder, (except
the right of the Authority to receive any payments which shall never
be determined to be waived), shall be waived unless asserted by a
proper proceeding at law or in equity within two (2) years plus
one (1) day after the occurrence of such default.
Section 15.08 All amounts due under this- Contract, including,
but not limited to, payments due under this Contract or damages for
the breach of this Contract, small be paid and be due, in Harris
County, Texas, which is the County in which the Authority's principal
administrative offices are located. It is specifically agreed
among the parties to this Contract that Harris County, Texas is the
place of performance of this Contract; and in the event that any
legal proceeding is brought to enforce this Contract or any pro-
vision hereof, the same shall be brought in Harris County, Texas.
Section 15.09 If by reason of Force Majeure any party hereto
shall be rendered unable wholly or in part to carry out its obliga-
tions under this Contract (other than the obligation of each Partici-
pant to make the payments required under Section 7.01 of this Contract)
then if such party shall give notice and full particulars of such
force majeure in writing to the other parties within a reasonable
MM
5
time'after occurrence of the event or cause relied on, the obligation
of the party giving such notice, so far as it is affected by such
force majeure, shall be suspended during the continuance of the
inability then claimed, but for no longer period, and any such party
shall endeavor to remove or overcome such inability with all reasonable
dispatch. The term "Force Majeure" as employed herein shall mean
acts of God, strikes, lockouts, or other industrial disturbances,
acts of public enemy, orders of any kind of the Government of the
United States or the State of Texas, or any civil or military authority,
insurrection, riots, epidemics, landslides, lightning, earthquakes,
fires, hurricanes, storms, floods, washouts, droughts, arrests, re-
straint of government and people, civil disturbances, explosions,
breakage or accidents to machinery, pipelines or canals, partial or
entire failure of water supply, and inability on the part of the
Authority to deliver Water hereunder for any reason, or on account
of any other causes not reasonably within the control of the party
claiming such inability, except for the payments from the Participants
to the Authority.
Section 15.10 This Agreement and any addenda hereinafter set
forth constitute all the understandings between the parties hereto,
and there are no oral representations, stipulat•:ions, warranties or
understandings with respect to the subject matter of this agreement
which are not fully expressed herein. Neither this Agreement nor its
execution has been induced by any representations, stipulations, war-
ranties or understandings of any kind other than those herein expressed.
No amendment, addition to, alteration, modification or waiver of
all or any part of this Agreement shall be of any force or effect
-45-
unless in writing and signed by the Authority, the City and any other
Participant affected by such change. If the terms and conditions of
this Agreement and the terms and conditions of any purchase order or
order acknowledgment written in connection with this Agreement con-
flict, then the terms and conditions of this Agreement shall govern.
Section 15.11 No waiver by any party hereto of one or more
defaults by any other party hereto in the performance of any of the
provisions of this Agreement shall operate or be construed as a waiver
of any other or further default or defaults, whether of a like or
different character.
Section 15.12 This Agreement shall bind and benefit the parties
hereto and their respective successors and assigns, and shall not be
assignable by any party without written consent of the other parties.
Section 15.13 This contract is to be construed according to
the laws of the State of Texas.
Section 15.14 The topical headings used herein have been inserted
for convenience only and shall not be construed as having any sub-
stantive significance or meaning whatsoever or as indicating that
all of the provisons of this Agreement relating to any particular
topic are to be found in any particular Article.
IN WITNESS WHEREOF, the parties hereto, acting under authority
of their respective governing bodies, have caused this Contract to be
executed in several counterparts, each of which shall be an original,
but all collectively constituting one and the same instrument, all
as of the day and year first written.
-46-
LA PORTE AREA WATER AUTHORITY
By:
--�_ President
ATTEST:
By: �1�-
Secretary
AT T
By:
APPROVED:
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CITY OF LA PORTE, TEXAS
By: GZ
Mayor
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ATTEST:'-,
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By:
City Secretary
-47-
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SURFACE WATER LINE HYDRAULIC MODEL
ENGINEERING REPORT
January 11, 2019
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Elm uobbFendley
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Texas Registration No. 274
Construction Management ■ Geographic Information Systems ■ Hydraulics and Hydrology ■ Land
Development
Public Works ■ Right -of -Way Acquisition ■ Site Development ■ Subsurface Utility Engineering
Surveying ■ Telecommunications ■ Transportation ■ Utility Coordination and Design
13430 Northwest Houston, Texas Voice (713) 462- Fax (713) 462- www.cobbfendley.com
Freeway, Suite 1100 77040-6138 3242 3262
City Shoreacres offm
CobbFe"ndley
January 11, 2019 �'�
Page 2 of 5
1.0 SCOPE
Cobb, Fendley & Associates, Inc. (CobbFendley) was authorized by the City of
Shoreacres ("CITY") to perform the following in connection with a potable water
system analysis. The City desired to develop a hydraulic water model in order to
evaluate pressures in the surface water delivery line from La Porte Area Water
Authority (LPAWA). Specifically the scope of work entails:
• Develop a water model utilizing WaterCad to analyze Shoreacres proposed
3,280 feet of 6" water line to be connected to the LPAWA's existing 8"
transmission water line.
• Evaluate water pressure in the proposed system.
• This analysis will look at both the existing and proposed water infrastructure
effects under a 300 gpm delivery rate and.
• This analysis will look at both the existing and proposed water infrastructure
effects under the historical maximum Shoreacres 430 gpm water withdraw
rate.
• The water model will help define anticipated pressure changes throughout
LPAWA's existing water infrastructure with the addition of Shoreacres
proposed 6" water line connection.
• The proposed 3,280 feet of 6" water line will be constructed by Shoreacres
and become property of the LPAWA.
2.0 GENERAL INFORMATION
2.1 SERVICE AREA
The city limits serve as Shoreacres water service area. The water system
currently has 660 active connections. At complete build -out the system will have
867 connections. The LPAWA Contract allocation limit for Shoreacres is 325,000
gallons per day.
2.2 EXISTING WATER SYSTEM
The City owns and operates two water plants. Water Plant No. 1 is located on
Shoreacres Boulevard between Old TX-146 and Byway Drive. The plant
components include the following:
• 1-426,000 gallon Ground Storage Tank
• 1-68,000 gallon Ground Storage Tank
• 1-18,000 gallon Hydropneumatic Tank
• 3-700 gpm Booster Pumps
• 1-150 gpm Water Well
• 1-300 gpm Water Well
• 1-8 inch tank fill line (tied to distribution system)
Water Plant No. 2 is located at the north end of Bayou Forest Drive. Surface
water is delivered from LPAWA at a rate of 300 gpm to this plant via a
transmission line, metering station and connection to the ground storage tank.
The plant components include the following:
13430 Northwest Freeway, Suite 1100 1 Houston, Texas 77040 1 713.462.3242 1 fax 713.462.3262 1 www.cobbfendley.com
City of Shoreacres
January 11, 2019
Page 3 of 5
• 1-127,000 gallon Ground Storage Tank
• 1-50,000 gallon Elevated Storage Tank
• 3-500 gpm Booster Pumps
• 1-750 gpm Water Well
• 1-300 gpm Surface Water feed
The distribution system is made up of a network of water lines that range in size
from 2 to 8 inches in diameter. These lines are as follows:
• 48,637 LF of 2" Water Line
• 786 LF of 3" Water Line
• 5,950 LF of 4" Water Line
• 21,694 LF of 6" Water Line
• 5,826 LF of 8" Water Line
LPAWA's 8" surface water line transfers treated water to LPAWA's Humphreville
Water Plant located on the West ROW of Humphreville Street. LPAWA's surface
water line is located just North of Shoreacres. An existing 6" water connection is
at the intersection of State Highway 146 South and McCabe Road that services
Shoreacres Water Plant No. 2. The proposed 6" water connection will be at the
intersection of South Broadway Street and Bayside Drive that will service
Shoreacres Water Plant No. 1.
• 5,400 LF of 8" Water Line
3.0 MODELING THE SYSTEM
3.1 GIS BACKGROUND INFORMATION
A GIS map was developed from existing maps and information obtained by the
City and was used to input lengths and locations of the existing lines into the
WaterCad modeling software.
3.2 SCENARIOS
The water model was set up to run three different physical scenarios in order to
compare different configurations and their effect on the surface water line.
Scenario 1 is the existing condition of LPAWA's water delivery to Water Plant No.
2 at a 300 gpm flow rate. Scenario 2 is a proposed 6" surface water line
connected to Water Plant No. 1 with a 300 gpm rate. Scenario 3 is a proposed 6"
surface water line connected to Water Plant No. 1 with the historical max water
withdraw by Shoreacres of 430 gpm. In each scenario, we looked at average
daily system pressure.
13430 Northwest Freeway, Suite 1100 1 Houston, Texas 77040 1 713.462.3242 1 fax 713.462.3262 1 www.cobbfendley.com
City of Shoreacres
January 11, 2019
Page 4 of 5
Scenario 1 — Existing System
Run the existing water system. Treated surface water is delivered to Shoreacres
Water Plant No. 2 from LPAWA's water system at a rate of 300 gpm. LPAWA's
surface water line is to be set at existing condition of 95 psi "static" pressure and
80 psi "dynamic" pressure, at the Humphreville Water Plant. These pressure
settings were provided by LPAWA.
Scenario 2 — Shoreacres proposed 3,280 feet of 6" surface water line to be
connected to LPAWA's existing 8" water line. Water withdraw rate is 300
gpm.
Run scenario with Shoreacres proposed 3,280 feet of 6" water line connected
with a 300 gpm rate at Shoreacres Water Plant No. 1 and LPAWA's
Humphreville Water Plant. Shoreacres Water Plant No. 2 was not included in this
model. Shoreacres Water Plant No. 2 will not be in service and will only be used
for emergency purposes.
Exhibit 1 — Proposed Surface Water at Water Plant No. 1 connection
Scenario 3 — Shoreacres proposed 3,280 feet of 6" surface water line to be
connected to LPAWA's existing 8" water line. Water withdraw rate is 430
gpm.
Run scenario with Shoreacres proposed 3,280 feet of 6" water line connected
with a 430 gpm rate at Shoreacres Water Plant No. 1 and 300 gpm at LPAWA's
Humphreville Water Plant. Shoreacres Water Plant No. 2 was not included in this
model. Shoreacres Water Plant No. 2 will not be in service and will only be used
for emergency purposes.
13430 Northwest Freeway, Suite 1100 1 Houston, Texas 77040 1 713.462.3242 1 fax 713.462.3262 1 www.cobbfendley.com
City of Shoreacres
January 11, 2019
Page 5 of 5
3.3 RESULTS
Shoreacres proposes to install a new connection point at the intersection of
Broadway (Spur 501) and Bayside Drive to provide surface water to Shoreacres
Water Plant No. 1 located near City Hall on Shoreacres Blvd. This new
connection point will become the primary take point for the LPAWA Contract
allocation limit for Shoreacres of 325,000 gallons per day. The existing take point
which currently provides surface water to Shoreacres Water Plant #2 is located
at Hwy 146 and McCabe Road will remain in service.
For our analysis of the water distribution system, we achieved the following
pressures:
AVERAGE
AVERAGE
AVERAGE
PRESSURE
PRESSURE
PRESSURE
EXHIBIT
SCENARIO
DESCRIPTION
(PSI) @
(PSI) @
(PSI) @
LPAWA'S
SHOREACRES
SHOREACRES
WATER
WATER
WATER PLANT
PLANT
PLANT NO. 1
NO. 2
1
1
Existing Condition
80
N/A
80
Proposed Surface
1
2
Water Line and
68
61
N/A
300 GPM Rate
Proposed Surface
1
3
Water Line and
60
43
N/A
430 GPM Rate
Scenario 1 water model using existing average pressure of 80 psi at LPAWA's
Humphreville Water Plant and calculated to 80 psi with the existing connection to
Shoreacres Water Plant No. 2. The 80 psi was a result of a 300 gpm water
withdraw rate at the Humphreville Water Plant and Shoreacres Water Plant No. 2
running at the same time.
Scenario 2 water model average pressure at LPAWA's Humphreville Water Plant
calculated to 68 psi with the proposed connection to Shoreacres Water Plant No.
1. The 68 psi was a result of a concurring 300 gpm water withdraw rate at both
the Humphreville Water Plant and Shoreacres Water Plant No. 1. Shoreacres
Water Plant No. 1 pressure reading was 61 psi.
Scenario 3 water model average pressure at LPAWA's Humphreville Water Plant
calculated to 60 psi with the proposed connection to Shoreacres Water Plant No.
1. The 60 psi was a result of a 300 gpm water withdraw rate at the Humphreville
Water Plant and a historical max of 430 gpm water withdraw rate at Shoreacres
Water Plant No. 1. Shoreacres Water Plant No. 1 pressure reading was 43 psi.
We conclude that moving the surface water delivery point from Water Plant No. 2
to Water Plant No. 1 will maintain an average dynamic rate of 68 psi at the
LPAWA's Humphreville Water Plant as shown in Scenario 2.
13430 Northwest Freeway, Suite 1100 1 Houston, Texas 77040 1 713.462.3242 1 fax 713.462.3262 1 www.cobbfendley.com
City ofSfioreacres
CAPITAL IMPROVEMENT PROJECTS
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city of Shoreacres
601 Shore Acres Blvd, Shoreacres, TX. 77571 PH 281-471-2244
- FAX 281-471-8955 www.citVofshoreacres.us
January 15, 2019
Mr. Stephen Barr
President; La Porte Area Water Authority
2963 N. 23 rd Street
LaPorte, TX 77571
Re: City of Shoreacres - Water Transmission Pipeline
Dear Mr. Barr
David Jennings
Mayor
Troy Harrison
City Manager
The City of Shoreacres is requesting the La Porte Area Water Authority (LPAWA) to consider
authorizing design and construction by Shoreacres of an additional surface water transmission pipeline
to feed the City's more centralized Water Plant No. 1. This is necessary to provide better water service
to the citizens of the City of Shoreacres.
Additional information is provided in the Surface Water Line Hydraulic Model provided by
CobbFendley.
We appreciate your consideration into this request and plan to move into design upon approval from
the LPAWA board.
If you have any questions, please contact me at 281-471-2244
Sincerely,
Troy D. Harrison, LCC
City Manager/Chief of Police
City of Shoreacres
Cc: David Jennings — Mayor, City of Shoreacres
Don Pennell — Director LPAWA
Kerry Lackey - CobbFendley
REOUEST FOR CITY
Agenda Date Requested March 11, 2019
Requested By: Lee Woodward
Department: Q4, Swmtary
Report X Resolution: Ordinance:
Appropriation
Source of Funds: N/A
Account Number: N/A
Amount Budgeted: N/A
Amount Requested: N/A
Budgeted Item: YES NO
SUMMARY & RECOMMENDATION
The Chapter 172 Employee, Retiree Insurance & Benefits Board has a vacant position (Citizen Position 1) following the
resignation of Martha Gillett. The Council is being asked to consider an appointment to fill the vacancy of Citizen
Position I for an unexpired portion of the two-year term ending of August 31, 2019.
Action Required by Council:
Discussion and possible action regarding appointment to the vacant position on the Chapter 172 Employee, Retiree
Insurance & Benefits Board with a term expiring on August 31, 2019.
Approved for City Council Agenda
Corby D. Alexander, City Manager
Date
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: March 11, 2019
Requested By: Rosalyn Epting
Department: Parks & Recreation
Report: Resolution: Ordinance:
Exhibits:
Appropriation
Source of Funds: N/A
Acct Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: YES NO
SUMMARY & RECOMMENDATION
The Parks & Recreation Department is starting the process of updating the Parks, Recreation, and Open Space Master Plan.
The consultant that has been hired for this process is Halff Associates. Aaron Tuley from Halff Associates will discuss the
Master Plan process and receive any feedback from Council.
Action Required by Council:
Discussion and possible action regarding the City of La Porte Parks, Recreation, and Open Space Master Plan.
Approved for City Council Agenda
Corby D. Alexander, City Manager
Date
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: March 11, 2019
Requested By: Jason Weeks, Asst. City Manager
Department: CMO
Report: Resolution: :Ordinance:
Exhibit: 10/1/1978 agreement with HOA
Exhibit: Administrative Code for Pools
Exhibit: New 2-vear agreement with HOA
Budget
Source of Funds:
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: YES NO
SUMMARY & RECOMMENDATION
On October 1, 1978, the City entered into a 40-year agreement with the Fairmont Park West Community
Improvement Association (HOA) for the lease/rent of the park & swimming pool property located at Oakmont Drive,
Rustic Gate Road, and Cedarmont Drive in the Fairmont Park West subdivision. The HOA paid $40 in advance ($1
per year for the 40-year agreement) for the right to operate and maintain the park and pool property. This agreement
expired on September 30, 2018. According to the agreement, upon termination of the agreement "any permanent
improvements erected on the leased premises by the HOA shall be the property of the City."
There were many discussions last year pertaining to the City assisting with costs to "get the swimming pool up and
going for use" during the summer. The CMO and Parks & Recreation Department provided assistance financially
and with necessary staff to assist the HOA in getting the swimming pool "up and running." During the FY 2018-19
budget process, the Council discussed several options moving forward concerning the Fairmont Park West park and
swimming pool (demo pool, demo pool and build splash -pad, and enter into a new agreement with HOA). Ultimately,
the Council gave staff direction to meet with the HOA and determine if a short-term extension to the agreement could
be agreed upon.
The City Manager and HOA representative Mike Patterson met the last week of September 2018 to iron out what the
short-term extension agreement would need to include. Staff drafted an agreement that was reviewed by the City's
attorney, then sent it to Mr. Patterson for review. The City Manager met again with Mr. Patterson and several HOA
board members in February 2019 to discuss the drafted agreement.
Before the Council tonight is a two-year extension agreement allowing the Fairmont Park West HOA to continue to
operate the Fairmont Park West park and swimming pool. The highlights of the agreement are:
• Two-year agreement (October 1, 2018, to September 30, 2020)
• Annual rental amount of $1 ($2 for term of agreement)
• Annually, City will allocate $20,000 for maintenance of the swimming pool and club house to include the
swimming pool pumps, chemicals, and repairs.
• Swimming pool will be open to the general public, including individuals who are not residents of Fairmont
Park West Subdivision, without charge or fee.
• HOA will maintain at their own cost the necessary lifeguards to operate the Class B pool in a manner as
required by law.
• HOA would be responsible for general, routine, and normal maintenance of Fairmont Park West grounds.
• HOA would be responsible for acquiring liability coverage in the amount of $2 million dollars for each
occurrence and $4 million dollars in aggregate to cover any accidents occurring on leased property. This
is the same coverages the City maintains for other City swimming pool facilities.
Action Required by Council:
Discuss, consider and possibly act upon a two-year lease agreement for Fairmont Park West HOA to maintain
and operate the Fairmont Park West park and swimming pool.
Approved for City Council Agenda
Corby D. Alexander
Date
THE STATE OF TEXAS S
§ KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF HARRIS §
This Agreement of Lease, made the lst day of October,
1978, by and between the CITY OF LA PORTE, a municipal cor-
poration, Harris County, Texas, hereinafter called LESSOR,
and FAIRMONT PARK WEST COMMUNITY IMPROVEMENT ASSOCIATION,
INC., a Texas non-prdfit corporation having its principal
office in Harris County, Texas, hereinafter called LESSEE,
W I T N E S S E T H:
That the Parties hereto, for and in consideration of the
premises, and the rents, covenants and agreements contained
herein, agree as follows:
I. 11 P�Al
Cay
LESSOR hereby leases and rents to LESSEE, the following
described tract of land, hereinafter referred to simply as
"Park," and being more particularly described as follows,
to -wit:
That certain lot, tract, or parcel of land,
known as "Reserve 'A," containing 1.162
acres, more or less, as shown on the Plat
of Section Three (3), FAIRMONT PARK WEST,
as recorded in Volume 270, Page 63, of the
Map Records of Harris County, Texas, refer-
ence to which is here made for all purposes.
11.
The term of this lease is for a period beginning on the
lst day of October, 1978, and ending on the 30th day of
September, 2018.
Upon the expiration date of this lease, no notice to
quit possession shall be necessary, and LESSEE covenants to
peaceably surrender possession of the premises to LESSOR on
that date.
loom
As rent for the use and occupancy of the leased premises,
LESSEE hereby agrees, binds and obligates itself to pay unto
4 �J� 0
LESSOR the total sum of Forty Dollars ($40.00), in advance
upon the execution hereof, representing an annual rental of
One Dollar ($1.00), payable in advance for the entire lease
term.
we
IV.
LESSEE shall not have the right to sell or assign this
lease, or to sublet the leased premises, or any part thereof.
V.
This lease is entered into pursuant to the authority of
City of La Porte Ordinance No. 705-1, passed and approved by
the City Commission of the City of La Porte on the 20th day
of September, 1978.
LESSEE certifies that it is a duly qualified homeowner's
association, which meets the minimum standards promulgated
by the United States Department of Housing and Urban Develop-
ment, for qualification for FHA and/or VA loans; and that it
has been incorporated as a Texas non-profit corporation.
LESSOR leases the demised premises to LESSEE, for
operation by LESSEE as a park and recreation area, for the
recreationofresidents and their guests of Sections Two (2),
Three (3), Four (4), and future Section Five (5), all in
Fairmont Park West, all being subdivisions in the W. M. Jones
Survey, A-482, Harris County, Texas, according to the respect-
ive maps or plats thereof which have been filed, or which
hereafter may be filed, in the office of the County Clerk of
Harris County, Texas, reference to which is here made for all
purposes.
Section Two (2) has one Hundred Seventy-two (172) build-
ing sites; Section Three (3) has Two Hundred Twenty-five (225)
building sites; Section Four (4) has Two Hundred Twenty-two
(222) building sites; and Section Five (5) will, when
developed, have approximately One Hundred Fifty-three (153)
building sites.
ME
LESSEE shall not place or suffer any Deed of Trust,
Mortgage, Mechanic's, or any other type of lien, on the
demised premises, or upon the permanent improvements thereon
erected, and any person, firm or corporation making any loans
-3-
or advances to LESSEE, for such improvements, shall look
solely to the revenues of LESSEE for the retirement of any
such indebtedness by LESSEE.
VII.
LESSOR reserves the right, from time to time, acting
by and through its City Commission, to establish minimum
standards for the type and quality of facilities to be
erected by LESSEE on the demised premises, and for the
maintenance thereof, and for the staffing of such facilities;
providing minimum ratios of off street parking, based upon
the amount of acreage in the demised premises; and such other
matters regarding the health, welfare, and safety, of the
persons utilizing such facilities as the City Commission in
its discretion may from time to time promulgate. Nothing
contained in this lease shall be construed as a restriction
upon the power of the City Commission of the City of La Porte,
from time to time to promulgate, by Ordinance, such reason-
able rules and regulations concerning the maintenance, oper-
ation, health, safety and welfare of the park facility herein
demised, and of the persons utilizing the same.
VIII.
Ordinance No. 705-1 of the City of La Porte, together
with Exhibit "All attached thereto, containing the current
minimum standards of the United States Department of Housing
and Urban Development, for homeowner's associations, are
hereby incorporated by reference in this lease, and made a
part hereof for all purposes.
IX.
LESSEE shall be obligated to maintain its leased
premises in a good state of repair and neat appearance, and
keep the grass mowed at all times. LESSEE shall provide
adequate refuse containers on the demised premises, and
regularly deposit the contents of same into such refuse con-
tainers as may be required by the LESSOR, from time to time,
-4-
or by such independent contractor as may serve the area, -if
the general area in which the demised premises is located is
not provided refuse collection service by LESSOR. LESSEE
shall provide necessary permanent sanitary facilities,
telephone, and other services that may be required to protect
the health, welfare and safety of LESSEE'S patrons.
►M
LESSEE agrees to obtain and maintain at its sole cost
and expense, public liability insurance and property damage
insurance on the leased premises to protect LESSOR and LESSEE
against all loss or damage from the claims of all persons who
may be in or on these premises by the invitation, consent or
sufferance of LESSEE. Such public liability insurance shall
have minimum bodily injury limits of One Hundred Thousand
Dollars ($100,000) for each person and Three Hundred Thousand
Dollars ($300,000) for each accident, and property damage
limits of One Hundred Thousand Dollars ($100,000) for each
accident with respect to any accident occurring on the leased
premises. LESSEE shall furnish LESSOR certificates of all
insurance coverage.
XI.
LESSEE shall use due care and diligence in all activi-
ties and operations on the premises, and will indemnify and
save harmless from any liabilities, loss, costs or other
expense of any nature. LESSEE shall give LESSOR immediate
notice of any matter covered hereby and shall forward to
LESSEE every demand, notice, summons or other process received
in any claim or legal proceeding covered hereby.
In case of bankruptcy or insolvency on the part of
LESSEE, or in case of any receiver being appointed to take
charge of the property, or any portion of the property of
LESSEE, in or upon the premises hereby leased, then and in
-5-
such event the LESSOR may, at its option, declare this lease
to be terminated or forfeited by the LESSEE; and LESSOR shall
be entitled in such event to the immediate possession of such
premises and no receiver, trustee in bankruptcy, or assigns
for the benefit of creditors shall acquire in any such case
any of the rights of the LESSEE hereunder; the landlord's
lien, however, in such event, shall not cease and the liability
of the LESSEE for the damages on account of breach of any
obligation to be performed by the LESSEE under the terms of
this lease shall continue and remain in full force and effect.
Failure on the part of the LESSEE to perform any of the
terms, agreements, conditions and covenants imposed by this
lease shall, at the option of the LESSOR, cancel the lease
and all rights of LESSEE shall be thereupon terminated and
all buildings and permanent improvements placed on said Park
by LESSEE shall become the property of the LESSOR; provided,
however, LESSEE shall have sixty (60) days written notice
from LESSOR in which to correct any default before cancel-
lation. In the event that LESSEE fails to correct any such
default during such sixty (60) day period, LESSOR, its agents
or attorneys, shall have the right to re-enter and remove all
persons therefrom without being deemed guilty of any manner
of trespass and without prejudice to any remedies for arrears
of rent or breach of covenant, or LESSOR, its agents or
attorneys, may resume possession of the premises and re -let
the same for the remainder of the term for the best rental
it may obtain, for account of LESSEE, which shall make good
any deficiency. The failure of the LESSOR to insist in any
one or more instances -upon performance of any of the terms
or conditions of this lease shall not be construed as a
waiver or relinquishment of the future performance of any
such term or condition.
-6-
XIV.
Upon the termination of this lease, it is understood and
agreed between the parties that any permanent improvements
erected on the leased premises by LESSEE shall be the property
of LESSOR.
XV.
LESSOR covenants that LESSOR has good right and lawful
authority to execute this Lease, that throughout the term
hereof LESSEE shall have, hold and enjoy peaceful and uninter-
rupted possession of all of the premises hereby leased and
granted, subject always to the performance of the covenants,
as herein provided to be paid and performed by LESSEE.
XVI.
Notices provided for in this Lease shall be sufficient
if sent by registered mail, postage prepaid, addressed, if to
LESSOR, to the City of La Porte, 604 W. Fairmont Parkway,
Attention: Mayor, La Porte, Texas; and, if to LESSEE, to
its registered agent, Eddie V. Gray, 707 Memorial Drive,
Baytown, Texas 77520, or to such other respective addresses
as the Parties hereto may designate in writing from time to
time.
Nothing in this Lease contained shall be construed as
requiring LESSEE.to allow the use of the demised premises by
persons other than the lawful residents of the said Sections
Two (2), Three (3), Four (4), and Five (5), Fairmont Park
West Subdivisions, Harris County, Texas, and their invitees.
However, members of the Association and their invitees shall
be entitled to use of such facility on a non-discriminatory
basis, subject to the reasonable rules and regulations of
LESSEE.
XVIII.
All references herein contained to LESSOR and to LESSEE,
shall be deemed to include the successors, assigns, and
legal representatives of each.
IN WITNESS WHEREOF, the Parties hereto have hereunto
signed and sealed this instrument in several duplicate
originals, this the lst day of October, 1978.
CITY OF 9 TE (LESSOR)
J. J. Meza, May
ATTEST:
>22
City C1E5i k
FAIRMONT PARK WEST COMMUNITY
IMPROVEMENT ASSOCIATION, INC.
(LESSEE)
V�
BYEddie V. Gray, ent
ATTWT:
ZLecr t y
THE STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day person-
ally appeared J. J. MEZA, known to me to be the person whose
name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same for the purposes and consider-
ation therein expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 19
day of October , A.D. 1978.
rMaryPu_%1Tcin and for
Harris County, Texas
-8-
THE STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day person-
ally appeared EDDIE V. GRAY, known to me to be the person whose
name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same for the purposes and consider-
ation therein expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 19
day of October , A.D. 1978.
Notary Pub A_c in and for
Harris County, Texas
Texas Administrative Code Next Rule"
TITLE 25 HEALTH SERVICES
PART 1 DEPARTMENT OF STATE HEALTH SERVICES
CHAPTER 265 GENERAL SANITATION
SUBCHAPTER L STANDARDS FOR PUBLIC POOLS AND SPAS
RULE §265.181 General Provisions
(a) Scope and purpose of rules. These rules address minimum standards for design and construction of pools
and spas. These rules also establish minimum operating standards for pools and spas to assure proper filtration,
chemical, and general maintenance of water and safety to users. These standards are based in part on the
American National Standards Institute and the National Spa and Pool Institute Standards for Public Swimming
Pools (ANSI/NSPI-1 1991) and the American National Standards Institute and National Spa and Pool Institute
Standards for Public Spas (ANSI/NSPI-2 1992). These rules are in addition to any municipal or federal laws
applicable to pools and spas. These rules implement Texas Health and Safety Code, Title 5, Subtitle A,
§341.064(g), and are considered good public health engineering and safety practices.
(b) Application of rules.
(1) A pool or spa constructed prior to October 1, 1999 will be defined as "pre-10/01/99." A pool or spa
constructed on or after October 1, 1999 will be defined as "post-10/01/99." A pool or spa is considered
constructed on the date that a building permit for construction of the pool or spa is issued by a municipality or,
if no building permit is required, the pool/spa operator/owner must produce adequate written documentation of
the date that excavation or electrical service to the pool or spa begins, whichever is first.
(2) A pool or spa serving only one or two dwellings (a single family home or a duplex), regardless of whether
the pool or spa is permanently or temporarily installed in or above the ground, is exempt from these rules.
(3) Each section of the rules states the extent to which the rule applies to post- 10/01/99 or pre- 10/01/99 pools,
spas, or facilities.
(4) The standards for pools or spas that apply to pools or spas constructed on or after October 1, 1999, are
contained in these rules. Except for rules that specifically apply to pre-10/01/99 pools and spas, the standards
for pool or spa design and construction are those standards that were in existence at the time the pool or spa
was initially constructed, including then -applicable local, state and federal laws except as otherwise stated in
these rules. Owners of pre- 10/01/99 pools and spas may follow the rules applicable to post- 10/0 1/99 pools and
spas.
(5) The standards for spa design, construction, and operation that apply to post- 10/01/99 and pre- 10/01/99
spas are contained or referenced in §265.205 of this title (relating to Construction, Operation, and Maintenance
of Post- 10/0 1/99 and Pre- 10/01/99 Spas).
(6) The standards for pool or spa operation that apply to pre-10/01/99 pools or spas are the provisions that
specifically state that they are applicable to pre- 10/01/99 pools or spas.
(7) The standards contained in these rules shall be met notwithstanding minor variations in equipment,
materials, or design if:
(A) the variation provides the quality, strength and durability equal to or greater than the standards contained
in these rules; and
(B) the operation, maintenance, safety, and sanitation of the pool or spa are not adversely affected by the
variation.
(8) Where a local regulatory authority has jurisdiction for the regulation of pools and spas, such authorities
may, as statutorily allowed, adopt standards that vary from these standards; however, such standards shall be
the same as, equivalent to, or more stringent than these standards and shall be in accordance with good public
health engineering and safety practices.
(c) Stricter codes and standards. Whenever a pool or spa owner is in compliance with a more recent code or
standard that is stricter than these rules, that standard shall be deemed as in compliance with these rules on a
particular subject.
(1) Except as expressly provided in these rules, an owner whose pool or spa was constructed in compliance
with a standard applicable on the date of construction is not required to modify construction to comply with a
subsequent construction standard for post-10/01/99 pools and spas.
(2) Except as expressly provided in these rules, an owner whose pool or spa equipment was in compliance
with a standard applicable at the time installation of equipment is not required to purchase and reinstall
equipment complying with a subsequent equipment standard for post-10/01/99 pools and spas in these rules.
(3) Post- 10/01/99 and pre- 10/01/99 facilities shall be required to meet the operational standard that is most
applicable to their use. For example, if a pool is operated as a Class C pool but will be made available for use
by the general public, the pool shall meet Class B operational standards for lifeguards, etc.; or if a pool is
normally operated as a Class B pool but, is used for a private parry and is closed to the general public for the
duration of the parry the pool shall meet Class C operational standards.
(4) A post- 10/0 1/99 facility shall be required to meet the applicable construction standard that is most
restrictive for its intended use. For example, if a pool at a facility that is generally classified as a Class C pool
open for use by the general public at any time, it shall be constructed to meet Class B pool standards.
Source Note: The provisions of this §265.181 adopted to be effective September 1, 2004, 29 TexReg 7704
THE STATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF HARRIS §
LEASE AGREEMENT FOR FAIRMONT PARK WEST POOL AND PARK
This Agreement of Lease, effective the 1st day of October, 2018, by and between the CITY OF
LA PORTE, TEXAS, a municipal corporation located in Harris County, Texas, hereinafter called
LESSOR, and FAIRMONT PARK WEST HOMEOWNERS ASSOCIATION, a Texas non-profit
corporation having its principal office in Harris County, Texas, hereinafter called LESSEE,
WITNESSETH:
That the Parties hereto, for and.in consideration of the premises, and the rents, covenants and
agreements contained herein, agree as follows:
This lease is entered into pursuant to Texas Local Government Sec. 253.006(b), which
authorizes a municipality by ordinance or resolution to lease a swimming pool owned by the
municipality, subject to the requirement that it be operated by the lessee as a public swimming pool.
LESSOR hereby leases and rents to LESSEE for the operation of a public swimming pool and
appurtenant park space with playground equipment, the following described tract of land (hereinafter
referred to as the "leased premises"), and commonly known as "Fairmont West Park," and being more
particularly described as follows, to -wit -
That certain lot, tract, or parcel of land, known as "Reserve 'A'," containing
1.162 acres, more or less, as shown on the Plat of Section Three (3),
FAIRMONT PARK WEST, as recorded in Volume 270, Page 63, of the Map
Records of Harris County, Texas, reference to which is here made for all
purposes.
The term of this lease is for a two-year period beginning on the 1st day of October, 2018, and
ending on the 30th day of September, 2020.
Upon the expiration date of this lease, no notice to quit possession shall be necessary, and
LESSEE covenants to peaceably surrender possession of the premises to LESSOR on that date.
IV.
As rent for the use and occupancy of the leased premises, LESSEE hereby agrees, binds and
obligates itself to pay unto LESSOR the total sum of Two Dollars ($2.00), in advance upon the execution
hereof, representing an annual rental of One Dollar ($1.00), payable in advance for the entire lease
term
1yj
LESSEE certifies that it is a duly qualified homeowners association, which meets the minimum
standards promulgated by the United States Department of Housing and Urban Development, for
qualification for FHA and/or VA loans; and that it has been incorporated as a Texas non-profit
corporation.
VI.
LESSEE shall not have the right to sell or assign this lease, or to sublet the leased premises, or
any part thereof. Furthermore, LESSEE shall not place or suffer any Deed of Trust, Mortgage,
Mechanic's, or any other type of lien, on the leased premises, or upon the permanent improvements
thereon erected, and any person, firm or corporation making any loans or advances to LESSEE, for
such improvements, shall look solely to the revenues of LESSEE for the retirement of any such
indebtedness by LESSEE. Notwithstanding the foregoing, LESSEE shall have the right to rent the
leased premises to a third party on an hourly and daily basis for special events such as birthday parties
and family reunions.
VII.
The LESSEE shall open the Fairmont Park West swimming pool and appurtenant park space to
the general public, including to individuals who are not residents of Fairmont Park West subdivision,
without charge or fee. Due to the swimming pool being available for use by the general public, the
LESSEE shall provide the required number of lifeguards (one lifeguard and one second responder) for
operation of a Class B pool, in accordance with Texas Administrative Code Section Title 25, Part 1,
Chapter 265, Section 265.199, at the sole cost to the LESSEE. LESSOR will annually appropriate
$20,000.00 to provide general, routine and normal upkeep (i.e. application of swimming pool chemicals,
cleaning, etc.) of the swimming pool and pool house. However, the LESSEE shall be responsible for
general, routine and normal maintenance of the appurtenant park space, specifically including the
playground equipment and other amenities situated thereon, and agrees to be responsible for mowing
and landscaping of the leased premises (including areas immediately surrounding the swimming pool).
In addition, LESSEE is required to maintain and pay all utility expenses, including but not limited to
electricity, water and sanitary sewer, for operation of the leased premises.
Vill.
Nothing contained in this lease shall be construed as a restriction upon the power of the City
Council of the City of La Porte, from time to time to promulgate such reasonable rules and regulations
concerning the maintenance, operation, health, safety and welfare of the park facility herein demised,
and of the persons utilizing the same.
IX.
LESSEE shall have the right to erect facilities, equipment or permanent improvements on the
leased premises, during the term of the lease. However, LESSOR reserves the right, from time to time,
acting by and through its City Council, to establish minimum standards for the type and quality of
facilities to be erected by LESSEE on the leased premises, and for the staffing of such facilities; provide
minimum ratios of off street parking, based upon the amount of acreage in the leased premises; and,
adopt such other measures regarding the health, welfare, and safety, of the persons utilizing such
facilities as the City Council in its discretion may from time to time promulgate.
X.
LESSEE shall be obligated to maintain the leased premises in a good state of repair and neat
appearance, and keep the grass mowed at all times. LESSEE shall provide adequate refuse containers
on the leased premises, and regularly deposit the contents of same into such refuse containers as may
be required by the LESSOR, from time to time, or by such independent contractor as may serve the
area, if the general area in which the leased premises is located is not provided refuse collection service
by LESSOR. LESSEE shall provide necessary permanent sanitary facilities, telephone, and other
services that may be required to protect the health, welfare and safety of LESSEE'S patrons.
/V41
LESSEE agrees to obtain and maintain at its sole cost and expense, public liability insurance
and property damage insurance on the leased premises to protect LESSOR and LESSEE against all
loss or damage from the claims of all persons who may be in or on these premises by the invitation,
consent or sufferance of LESSEE. Such public liability insurance shall have limits of liability of a
minimum of Two Million Dollars ($2,000,000) for each occurrence and Two Million Dollars ($2,000,000)
for sudden events and Four Million Dollars ($4,000,000) in aggregate, with respect to any accident
occurring on the leased premises. LESSEE shall furnish LESSOR certificates of all insurance
coverage.
LESSEE shall use due care and diligence in all activities and operations on the leased premises,
and will indemnify and save harmless LESSOR from any liabilities, loss, costs or other expense of any
nature. LESSEE shall give LESSOR immediate notice of any matter covered hereby and shall forward
to LESSOR every demand, notice, summons or other process received in any claim or legal proceeding
covered hereby.
In case of bankruptcy or insolvency on the part of LESSEE, or in case of any receiver being
appointed to take charge of the property, or any portion of the property of LESSEE, in or upon the
premises hereby leased, then and in such event the LESSOR may, at its option, declare this lease to
be terminated or forfeited by the LESSEE; and LESSOR shall be entitled in such event to the immediate
possession of such premises and no receiver, trustee in bankruptcy, or assigns for the benefit of
creditors shall acquire in any such case any of the rights of the LESSEE hereunder; the landlord's lien,
however, in such event, shall not cease and the liability of the LESSEE for the damages on account of
breach of any obligation to be performed by the LESSEE under the terms of this lease shall continue
and remain in full force and effect.
XIV.
Failure on the part of the LESSEE to perform any of the terms, agreements, conditions and
covenants imposed by this lease shall, at the option of the LESSOR, give right to LESSOR to cancel
the lease and all rights of LESSEE shall be thereupon terminated and all buildings and permanent
improvements placed on the leased premises by LESSEE shall become the property of the LESSOR;
provided, however, LESSEE shall have at least sixty (60) days or agreed -upon days written notice from
LESSOR in which to correct any default before cancellation. Upon receiving the written notice from the
LESSOR, the LESSEE shall provide a written response and plan to remedy the default. LESSOR and
LESSEE will negotiate in good faith to address and implement LESSEE's plan for correcting the default.
In the event that LESSEE fails to correct any such default during such sixty (60) day period or agreed -
upon days, LESSOR, its agents or attorneys, shall have the right to re-enter and remove all persons
therefrom without being deemed guilty of any manner of trespass and without prejudice to any remedies
for arrears of rent or breach of covenant, or LESSOR, its agents or attorneys, may resume possession
of the premises and re -let the same for the remainder of the term for the best rental it may obtain, for
account of LESSEE, which shall make good any deficiency. The failure of the LESSOR to insist in any
one or more instances upon performance of any of the terms or conditions of this lease shall not be
construed as a waiver or relinquishment of the future performance of any such term or condition.
I:NTI
Upon the termination of this lease, it is understood and agreed between the parties that any
permanent improvements erected (defined as any structure that is permanently attached to land,
buildings or systems) on the leased premises by LESSEE shall be the property of LESSOR.
XV1.
LESSOR covenants that LESSOR has good right and lawful authority to execute this Lease, that
throughout the term hereof LESSEE shall have, hold and enjoy peaceful and uninterrupted possession
of all of the premises hereby leased and granted, subject always to the performance of the covenants,
as herein provided to be paid and performed by LESSEE.
XVII.
Notices provided for in this Lease shall be sufficient if sent by registered mail, postage prepaid,
addressed, if to LESSOR, to the City of La Porte, 604 W. Fairmont Parkway, Attention: City
Manager, La Porte, Texas; and, if to LESSEE, to its registered agent, AVR Management, 12929 Gulf
Freeway #320, Houston, Texas 77034, or to such other respective addresses as the Parties hereto
may designate in writing from time to time.
XVIII.
All references herein contained to LESSOR and to LESSEE, shall be deemed to include the
successors, assigns, and legal representatives of each.
IN WITNESS WHEREOF, the Parties hereto have hereunto signed and sealed this instrument
in several duplicate originals, this the day of , 2019.
CITY OF LA PORTE, TEXAS
City Manager
ATTEST:
City Secretary
APPROVED:
City Attorney
President, Fairmont Park West
Vice -President, Fairmont Park West
Council Agenda Item
March 11, 2019
6 (a) Receive report of the Fiscal Affairs Committee — Councilmember Engelken
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Council Agenda Item
March 11, 2019
7. ADMINISTRATIVE REPORTS
• Planning and Zoning Commission Meeting, Thursday, March 21, 2019
• Council Budget Retreat, Saturday, March 23, 2019
• City Council Meeting, Monday, March 25, 2019
• Zoning Board of Adjustment Meeting, Thursday, March 28, 2019
8. COUNCIL COMMENTS Hear announcements concering matters appearing on the agenda; items
of community interest; and/or inquiries of staff regarding specfic factual information or exisiting policy
from the Mayor, Councilmembers, and City staff, for which no formal action will be discussed or
taken.
The City Council reserves the right to meet in closed session on any agenda item should the need
arise and if applicable pursuant to authorization by Title 5, Chapter 551, of the Texas Government
Code, in accordance with the authority contained in:
Texas Government Code - Section 551.072 - Deliberation regarding purchase, exchange, lease
or value of Real Property: Meet with City Manager and City Attorney to discuss value of real property
in industrial districts, concerning negotiations with industry representatives for terms of new
Industrial District Agreements.
10. RECONVENE into regular session and consider action, if any, on item(s) discussed in executive
session.
11. ADJOURNMENT
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