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HomeMy WebLinkAbout02-12-14 Regular Meeting of the La Porte Area Water Authority LA PORTE AREA WATER AUTHORITY MINUTES February 12, 2013(Corrected) 1.The meeting was called to order at 6:00PMbyPresidentDavid Janda. Members Present :Vice President Kenneth Schlather, MembersDennis Steger,RandyWoodard, Doug Martin Members Absent :Excused absence President David Janda Others Present :Public Works Director David Mick,City Controller Phyllis Rinehart, Morgan’s Point Assistant Administrator Brian Schneider; Tom Petersonof Null-Lairson, P.C.;Laura Lynchof Whitley Penn. 2.Meeting was called to order by Kenneth Schlather at 6:00 pm. 3.Officers Elected: David Janda to continue as President, Kenneth Schlather to continue as Vice President, Doug Martin elected as Secretary. 4.The minutes from the meeting held August 1, 2012were reviewed. Motion to approve the minutes by Randy Woodard, seconded by Doug Martin, unanimously approved. 5.Laura Lynch provided the board members with hard copies of a power point presentation summary of the 2012 Annual Financial Report for the LPAWA fiscal year ending September 30, 2012. Tom Peterson provided additional information and clarification related to the financial report as well. After some discussion Randy Woodard moved to approve the 2012 Annual Financial Report, Doug Martin seconded, the 2012 Annual Financial Report was unanimously approved. 6.David Mick provided a final update on the Southeast Water Purification Plant budget review process. The budget issues that have been under consideration between the City of Houston and the remaining co-owners of the Southeast Water Purification since early 2011 are resolved for the time being. The City of Houston did make small concessions in their original budget as discussed with the LPAWA board at the August1, 2012 meeting. No other discussions with the City of Houston are planned at this time. The operator and plant management operations may be considered when the current contract with the City of Houston is up for renewal in 2015. 7.David Mick, on behalf of General Manager Corby Alexander, noted that there were no additional General Manager items or comments to report. 8.Under Board Comments, Kenneth Schlather noted well publicized reports of aging infrastructure across the county and asked about the condition of the LPAWA facilities. With the LPAWA being formed in the mid- 1980’s and facilities constructed in the late 1980’s/early 1990’s, the LPAWA facilities are still relatively new and the LPAWA facilities are in very good condition overall. There were no other board comments. 9.Therebeing no further business, Dennis Steger moved to adjourn, Randy Woodard seconded, the meeting adjourned at 6:23PM Secretary PASSED AND APPROVED ON THIS DAY President LA PORTE AREA WATER AUTHORITY MINUTES February 12, 2013(Corrected) 1.The meeting was called to order at 6:00PMbyPresidentDavid Janda. Members Present :Vice President Kenneth Schlather, MembersDennis Steger,RandyWoodard, Doug Martin Members Absent :Excused absence President David Janda Others Present :Public Works Director David Mick,City Controller Phyllis Rinehart, Morgan’s Point Assistant Administrator Brian Schneider; Tom Petersonof Null-Lairson, P.C.;Laura Lynchof Whitley Penn. 2.Meeting was called to order by Kenneth Schlather at 6:00 pm. 2.3.Officers Elected: David Janda to continue as President, KennithKennethSchlather to continue as Vice President, Doug Martin elected as Secretary. 3.4.The minutes from the meeting held August 1, 2012were reviewed. Motion to approve the minutes by Randy Woodard, seconded by Doug Martin, unanimously approved. 4.5.Laura Lynch provided the board members with hard copies of a power point presentation summary of the 2012 Annual Financial Report for the LPAWA fiscal year ending September 30, 20112012. Tom Peterson provided additional information and clarification related to the financial report as well. After some discussion Randy Woodard moved to approve the 2012 Annual Financial Report, Doug Martin seconded, the 2012 Annual Financial Report was unanimously approved. 5.6.David Mick provided a final update on the Southeast Water Purification Plant budget review process. The budget issues that have been under consideration between the City of Houston and the remaining co-owners of the Southeast Water Purification since early 2011 are resolved for the time being. The City of Houston did make small concessions in their original budget as discussed with the LPAWA board at the August1, 2012 meeting. No other discussions with the City of Houston are planned at this time. The operator and plant management operations may be considered when the current contract with the City of Houston is up for renewal in 2015. 6.7.David Mick, on behalf of General Manager Corby Alexander, noted that there were no additional General Manager items or comments to report. 7.8.Under Board Comments, Kenneth Schlather noted well publicized reports of aging infrastructure across the county and asked about the condition of the LPAWA facilities. With the LPAWA being formed in the mid- 1980’s and facilities constructed in the late 1980’s/early 1990’s, the LPAWA facilities are still relatively new and the LPAWA facilities are in very good condition overall. There were no other board comments. 8.Therebeing no further business, Dennis Steger moved to adjourn, Randy Woodard seconded, the meeting adjourned at 6:23PM Secretary PASSED AND APPROVED ON THIS DAY President LA PORTE AREA WATER AUTHORITY MINUTES July 24, 2013 1.The meeting was called to order at 6:00PMbyPresidentDavid Janda. Members Present :President David Janda, Vice President Kenneth Schlather, SecretaryDoug Martin Members Absent :Excused absencesby Members Randy Woodard and Dennis Steger Others Present :General Manager Corby Alexander, Public Works Director David Mick,Finance Director Michael Dolby, City Controller Phyllis Rinehart, Morgan’s Point Assistant Administrator Brian Schneider. David Mick confirmed that three members do constitute a quorum according to language in the original legislation that created the authority. (A majority of the board members -3 as the board is now constituted -is required.) 2.The minutes from the meeting held February 12, 2013were reviewedand approved contingent upon corrections consisting of 1) the meeting was called to order by Kenneth Slather, 2) typographical error in Kenneth’s name in paragraph 2, 3) the Annual FinancialReport approved by the Board at the February 12 meeting was for the fiscal year ending September 30, 2012 (not 2011). 3.David Mick presented the proposed FY 2014 budget for the authority noting that the FY 2014 budget total of $1,138,431 is $57,329 (4.8%) less than the FY 2013 budget. The difference primarily was the $50,000 budgeted for legal expenses in FY 2013 due to the then on-going billing dispute with the City of Houston related to the City of Houston services managing the Southeast Houston Water Purification Plant. The dispute was resolved and the budget allocation for additional legal expenses is not necessary for FY 2014. Also the City of Houston’s FY 2014 cost for the upcoming year is reducedslightly to just under $0.60/1000 gallons. Questions from the board included an inquiry into the increase in budget line item 4002 Machinery/Tools/Equipment that increased from $3,500 in FY 2013 to $9,000 in FY 2014and a question about an increase over the years in the Morgan’s Point demand capacity. David Mick explained that the increase in line item 4002 was due to the need for additional maintenance and repair of valves and other equipment at the take points for the member cities (La Porte, Shoreacres, and Morgan’s Point) and that the increase in water demand capacity for Morgan’s Point was at Morgan’s Point’s request to serve the terminal facility. After some discussion, the FY 2014 budget for the La Porte Area Water Authority was unanimously approved as presented with Doug Martin making the initial motion to accept and seconded by Kenneth Schlather. 4.General Manager Corby Alexandernoted that there were no additional General Manager items or comments to report. 5.There were no other board comments. 6.Themeeting was unanimously adjourned at 6:13 PM Secretary PASSED AND APPROVED ON THIS DAY President Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY HARRIS COUNTY, TEXAS FINANCIAL REPORT For the Year Ended September 30, 2013 Draft 2-4-2014 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY TABLE OF CONTENTS Exhibit Page Report of Independent Auditors 1 Management’s Discussion and Analysis 4 Basic Financial Statements Statement of Net Position B-1 10 Statement of Revenues, Expenses and Changes in Net Position B-2 11 Statement of Cash Flows B-3 12 Notes to the Financial Statements C-1 13 Supplemental Information Supplemental Schedules Included Within this Report 23 Schedule of Service and Rates E 24 Schedule of Enterprise Fund Expenses F 25 Schedule of Temporary Investments G 26 Schedule of Changes in Capital Assets I 27 Long-Term Debt Service Requirements by Years J 28 Analysis of Changes in Long-Term Debt K 29 Statement of Revenues and Expenses - Five Years L 30 Insurance Coverage M 33 Board Members, Key Personnel and Consultants N 34 Schedule of Revenues and Expenses - 36 Budget and Actual (Budgetary Basis) Draft 2-4-2014 (This page intentionally left blank) Draft 2-4-2014 REPORT OF INDEPENDENT AUDITORS To the Board of Directors of The La Porte Area Water Authority La Porte, Texas We have audited the accompanying basic financial statements of the La Porte Area Water Authority (the “Authority”), a component unit of the City of La Porte, Texas as of and for the year ended September 30, 2013, and the related notes to the 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 an opinion 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. 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. 1 Draft 2-4-2014 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Authority, as of September 30, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 11 to the financial statements, the District adopted the provisions of GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities as of September 30, 2013. Our opinion is not modified with respect to this matter. Other Matters Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 4 through 7 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. The Texas Supplementary Information unless marked “unaudited” and the Schedule of Revenues and Expenses – Budget and Actual – (Budgetary Basis), is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Texas City, Texas February 12, 2014 2 Draft 2-4-2014 MANAGEMENT’S DISCUSSION AND ANALYSIS 3 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY Management’s Discussion and Analysis As management of the La Porte Area Water Authority, we offer readers of the Water Authority’s financial statements this narrative overview and analysis of the financial activities of the Water Authority for the fiscal year ended September 30, 2013. Financial Highlights The assets of the La Porte Area Water Authority exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $7,497,334 (net position). Of this amount, $1,870,210, unrestricted net position, may be used to meet the government’s ongoing obligations to citizens and creditors in accordance with the Water Authority’s fund designation and fund policies. The government’s total net position increased by $390,142. The Water Authority’s total bonded debt decreased $642,360 by during the current fiscal year. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction of the Water Authority’s basic financial statements. The La Porte Area Water Authority is considered a component unit of the City of La Porte, Texas since the Water Authority provides approximately 86% of its services for the exclusive benefit of the City of La Porte. The Water Authority’s basic financial statements are comprised of the fund financial statements and notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Fund financial statements – The operations of the Water Authority are recorded in a proprietary (enterprise) fund. 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 Water Authority, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The statement of net position presents information on all the Water Authority’s assets, liabilities and deferred inflows of resources, with the difference between the three reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Water Authority is improving or deteriorating. The statement of revenues, expenses and changes in net position presents information showing how the government’s net position changed during the fiscal year. All changes in net position are reported when 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 receivables and accounts payable due to suppliers). The fund financial statements can be found on pages 10-12 of this report. 4 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY Management’s Discussion and Analysis (continued) Notes to the Financial Statements – The notes provide additional information that is essential to a full understanding of the data provided in the fund financial statements. The notes to the financial statements can be found on pages 13-19 of this report. Other Information – In addition to the basic financial statements and accompanying notes, this report also presents certain supplementary information concerning the Water Authority’s operations. Required supplementary information can be found on pages 23-36 of this report. Financial Analysis of the Government’s Funds As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the La Porte Area Water Authority, assets exceeded liabilities and deferred inflows of resources by $7,497,334 at the close of the fiscal year. The largest portion of the Water Authority’s net position ($4,479,964) reflects its investment in capital assets (e.g., water production and distribution system), less any related debt used to acquire those assets that are still outstanding. The City uses these capital assets to provide water services to the participants; consequently, these assets are not available for future spending. Although the Water Authority’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. La Porte Area Water Authority’s Net position Business-Type Activities 20132012, restated Current and other assets$ 3,105,835$ 3,030,163 Capital assets 6,809,826 7,274,825 Total Assets 9,915,661 10,304,988 Current liabilities 711,390 841,455 Noncurrent liabilities 1,699,862 2,347,222 Total Liabilities 2,411,252 3,188,677 Total Deferred inflows of resources 7,075 9,119 Net Position: Net Investment in capital assets 4,479,964 4,293,484 Restricted 1,147,160 289,500 Unrestricted 1,870,210 2,524,208 Total Net Position $ 7,497,334$ 7,107,192 An additional portion of the Authority’s net position (15%) represents resources that are subject to external restrictions for debt service. The remaining balance of unrestricted net position ($1,870,210) represents funds available to meet other ongoing obligations to participants and/or creditors. 5 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY Management’s Discussion and Analysis (continued) Analysis of the Water Authority’s Operations – the following table provides a summary of the Water Authority’s operations for the year ended September 30, 2013. La Porte Area Water Authority’s Change in Net position Business-Type Activities 20132012, restated Operating revenues: Charges for Services1,213,334$ $ 1,294,479 Total operating revenues 1,213,334 1,294,479 Operating expenses: Supplies 8,0904,207 Purchased water 999,6471,264,050 Services and charges 95,106107,012 Depreciation 464,999 462,938 Total operating expenses 1,567,842 1,838,207 Operating income (loss) (354,508) (543,728) Nonoperating revenues (expenses) (49,204) (122,272) Income (loss) before contributions and transfers (403,712) (666,000) Capital contributions 793,854 752,242 Change in net position 390,142 86,242 Net Position - Beginning 7,156,249 7,020,950 Prior Period Adjustment (49,057) Net Position - Beginning, as Restated 7,107,192 7,020,950 Total Net Position - ending $ 7,497,334$ 7,107,192 Total net position increased by $390,142 in 2013. The actual water revenue and capital recovery fees for fiscal year ended September 30, 2013, of $1,213,334 were $83,911 higher than the amount budgeted of $1,129,423 due to an increase in consumption. 6 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY Management’s Discussion and Analysis (continued) Capital Assets and Debt Administration Capital Assets - The La Porte Area Water Authority’s investment in capital assets as of September 30, 2013 amounts to $6,809,826 (net of accumulated depreciation). There were not any additions or retirements of capital assets during the current fiscal year. The only activity is current year depreciation in the amount of $464,999. Capital assets at year end consisted of the following: Ending Balance Water, sewer and drainage facilities Water production and distribution system6,809,826$ $ 6,809,826 Additional information of the La Porte Area Water Authority’s capital assets can be found in Note 5 on page 16 of this report. Debt Administration – At the end of the fiscal year, the La Porte Area Water Authority had bonded debt payable of secured solely by water and sewer revenues.The revenue bonds have been rated “AA” by Standard & Poor’s, Fitch and Moody’s rating agencies. Additional information on the Water Authority’s long-term debt can be found in Note 7 on page 17-18 of this report. Economic Facts and Next Year’s Budgets and Rates The Water Authority has benefited from a strong and expanding economy from the past several years. In the coming fiscal year the Water Authority’s budget is expected to remain relatively consistent with prior year. Request for Information This financial report is designed to provide a general overview of the La Porte Area Water Authority’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report of requests for additional information should be addressed to the Director of Finance, 604 West Fairmont Parkway, La Porte, Texas, 77571. 7 Draft 2-4-2014 (This page intentionally left blank) 8 Draft 2-4-2014 BASIC FINANCIAL STATEMENTS 9 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT B-1 STATEMENT OF NET POSITION September 30, 2013 Assets Current assets: Cash $ 897,753 Investments1,349,654 Accounts receivable, net of allowance for doubtful accounts 171,414 Accrued interest receivable 1,136 Restricted assets: Restricted cash and temporary investments685,878 Total current assets 3,105,835 Noncurrent assets: Water production and distribution system15,435,810 Less: accumulated depreciation(8,625,984) Total noncurrent assets 6,809,826 Total Assets $ 9,915,661 Liabilities Current liabilities: Accounts payable$ 78,618 Current liabilities (payable from restricted assets): Current portion of revenue bonds630,000 Accrued interest2,772 Total current liabilities 711,390 Noncurrent liabilities Revenue bond, net of current portion1,699,862 Total Liabilities 2,411,252 Deferred Inflows of Resources Deferred gain on refunding 7,075 Total deferred inflows of resources 7,075 Net Position Net investment in capital assets 4,479,964 Restricted for debt service 1,147,160 Unrestricted1,870,210 Total net position $ 7,497,334 See Notes to the Financial Statements. 10 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT B-2 TATEMENT OF REVENUES, EXPENSES AND S CHANGES IN NET POSITIO N For the Year Ended September 30, 2013 Operating Revenues Charges for services1,213,334$ Total operating revenues 1,213,334 Operating Expenses Supplies8,090 Purchased wate999,647 r Other services and charges95,106 Depreciation 464,999 Total operating expenses 1,567,842 Operating income (loss)(354,508) Nonoperating Revenues (Expenses) Interest income4,362 Interest expense and fiscal charges (53,566) Total nonoperating revenue (expenses) (49,204) Income (loss) before contributions and transfers(403,712) Capital contributions 793,854 Change in net position390,142 Net Position - Beginning 7,156,249 Prior Period Adjustment (49,057) Net Position - Beginning, as Restated 7,107,192 Total Net Position- Ending $ 7,497,334 See Notes to the Financial Statements. 11 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT B-3 STATEMENT OF CASH FLOWS Year Ended September 30, 2013 Cash Flows from Operating Activities Receipts from customers1,226,031$ Payments to suppliers(1,237,322) Net cash provided by operating activities (11,291) Cash Flows from Capital and Related Financing Activities Payments received from participants for debt service697,727 Payments received from participants for capital recovery96,127 Principal payments on revenue bonds(625,000) Interest paid on capital debt(73,556) Net cash provided by capital and related financing activities 95,298 Cash Flows from Investing Activities Sale of investments(136,885) Interest and dividends4,219 Net cash provided by investing activities (132,666) Net (decrease) in cash and cash equivalents(48,659) Balances - beginning of the year 1,632,290 Balances - end of the year $ 1,583,631 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss)(354,508)$ Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense464,999 Change in assets and liabilities: Receivables, net12,697 Accounts payable(134,479) Net Cash provided by operating activities $ (11,291) Reconciliation of total cash and cash investments: Current Assets - cash and cash equivalents897,753$ Restricted Assets - cash and cash equivalents685,878 Total cash and cash equivalents $ 1,583,631 See Notes to the Financial Statements. 12 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT C-1 NOTES TO THE FINANCIAL STATEMENTS Note 1 - Creation of Authority The La Porte Area Water Authority (the “Authority”) was created on May 30, 1981 by Chapter 729, Page 2678, Acts of the 67th Legislature of the State of Texas. This bill authorizes the Authority to purchase, construct or otherwise acquire waterworks systems, sanitary sewer systems, storm sewer systems and drainage facilities or parts of such systems of facilities and to operate and maintain such facilities. The Authority is authorized to set rates for services related to the aforementioned systems and facilities, and issue revenue bonds for the purpose of acquiring and maintaining such systems. The Authority comprises approximately 20,600 acres in Harris County, Texas. Note 2 -Summary of Significant Accounting Policies The accounting policies of the Authority conform with generally accepted accounting principles. The following is a summary of the most significant policies: A. Reporting Entity Generally accepted accounting principles for local governments include those principles prescribed by the Governmental Accounting Standards Board (GASB), the American Institute of Certified Public Accountants in the publication entitled Audits of State and Local Governmental Units and by the Financial Accounting Standards Board (when applicable). GASB Statement 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements(“GASB 62”), which incorporates into the GASB’s authoritative literature certain accounting and financial reporting guidance that is included in the following pronouncements issued on or before November 30, 1989, which does not conflict or contradict GASB pronouncements: 1) Financial Accounting Standards Board (FASB) Statements and Interpretations; 2) Accounting Principles Board Opinions; 3) Accounting Research Bulletins of the American Institute of Certified Public Accountants’ (AICPA) Committee on Accounting Procedure. Implementation of GASB 62 is reflected in the financial statements and notes to the financial statements. Consideration regarding the potential for inclusion of other entities, organizations or functions in the Authority's financial reporting entity is based on criteria prescribed by generally accepted accounting principles. These same criteria are evaluated in considering whether the Authority is a part of any other governmental or other type of reporting entity. Criteria for determining component unit status under generally accepted accounting principles included considerations pertaining to organizations for which the primary government is financially accountable and considerations pertaining to other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The La Porte Area Water Authority is considered a component unit of the City of La Porte, Texas by virtue of meeting the criteria noted above. The primary factor in determining component unit status is that the Authority provides approximately 86% of its services for the exclusive benefit of the City of La Porte. The Authority's financial operations are included as an Enterprise Fund in the City's Comprehensive Annual Financial Report as a blended component unit. The City of La Porte is referred to as “Primary Government” throughout the authority’s financial statements. 13 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT C-1 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 2 - Summary of Significant Accounting Policies (continued) B. Fund Accounting The operations of the Authority are recorded in an enterprise fund. Enterprise funds are used to account for operations (a) that are financed primarily through user charges or (b) where the governing body has decided that determination of net income is appropriate. The enterprise fund is a proprietary fund type. C. Basis of Accounting Enterprise Funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are presented on the statement of net position is a classified format to distinguish between current and long-term assets and liabilities. Net position is presented in three components: net investment in capital assets; restricted; and unrestricted. Enterprise fund operating statements present increases (e.g., revenues), decreases (e.g., expenses) and changes in net position. Enterprise funds are accounted for using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized at the time liabilities are incurred. D. Cash Equivalents For purposes of the statement of cash flows, the Authority considers cash held in demand accounts and all short-term investments with a maturity at date of purchase of three months or less to be cash equivalents. E. Physical Facilities and Depreciation Fixed assets, which consist of a water production and distribution system, are shown at original cost. Interest paid during construction of facilities, if any, is also included in this cost. Depreciation has been provided for the Authority's water production and distribution system using the straight-line method over a 30-year estimated useful life. Note 3 - Cash and Cash Equivalents Cash and cash equivalents represent the Authority’s equity interest in the City’s consolidated cash and cash equivalents account consisting of demand accounts and short-term investments with a maturity at date of purchase of three months or less. State statutes require that all funds in depository institutions be covered by federal depository insurance and/or be secured in the manner provided by law for security of funds. Cash and cash equivalent balances held by the City were entirely covered by federal depository insurance or security as required at September 30, 2013. At year end a portion of the Authority’s cash and temporary investments were restricted as follows: Restricted for retirement of current debt service liabilities and reserve requirements per bond covenants685,878$ Total Restricted Cash and Temporary Investments685,878$ 14 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT C-1 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 4 - Temporary Investments Temporary investments represent the Authority’s equity interest in the City’s investment pool. At year end a portion of the Authority’s cash and temporary investments were restricted as follow: The carrying amount for temporary investments, at September 30, 2013, was $1,349,654, which is fair value. This represents 7.72% of the City’s total portfolio. Pooled investments with the City consist of obligations of the United States and its agencies and investment pools in accordance with state statutes and the City’s investment policies. Securities are registered and held by their agent in the City’s name. Interest earnings are allocated on a pro-rata basis. The investment pool is not registered with the SEC or subject to any regulatory oversight. The fair value of the position in the pool is the same as the value of pool shares. The City has adopted GASB Statement No. 31, which establishes accounting and reporting standards for all of the City’s investments. In accordance with Statement No. 31, the City reports all investments at fair value, except for “money market investments” and “2a7-like pools”. Money market investments, which are short-term highly liquid debt instruments that may include U.S. Treasury and agency obligations, are reported at amortized costs. Investment positions in external investment pools that are operated in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940, such as TexPool and LOGIC, are reported using the pools’ share price. Interest Rate Risk The Authority’s investment policy specifies that the maximum stated maturity, from the date of purchase for any individual investment may not exceed 5 years and the maximum dollar-weighted average maturity for the pooled fund group may not exceed 2 years. At year end, the Authority’s dollar-weighted average maturity of the investment portfolio was as follows: Weighted Average Investment TypeMaturity (months) Public funds investment pools1.6 Federal Home Loan Mortgage Corporation (FHLMC)33.4 Federal Farm Credit Bank (FFCB)24.0 Federal National Mortgage Association (FNMA)45.6 Farmer Mac(FAMCA)13.0 Portfolio Weighted Average Maturity23.5 15 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT C-1 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 4 - Temporary Investments (continued) Concentration of Credit Risk The Authority’s investment policy places no limit on the amount the government may invest in any one issuer. At September 30, 2013, the Authority’s investment portfolio consisted of the following investments: Percentage of Investment TypeTotal Portfolio Public funds investment pools66% US Agency securities34% 100% Credit Risk At year end balances in TexPool, a privately managed public funds investment pool was rated AAAm by Standard & Poor’s and balances in LOGIC, a privately managed public funds investment pool was rated AAAm by Standard & Poor’s. Federal Home Loan Mortgage Corporation notes, Federal Home Loan Banks bonds, Farmer Mac and Federal Farm Credit Bank notes were rated AA+ by Standard & Poor’s. All credit ratings met acceptable levels required by legal guidelines prescribed in both the PFIA and the Authority’s investment policy. Note 5 - Capital Assets An analysis of changes in physical facilities for the year ended September 30, 2013 follows: BeginningRetirements &Ending BalanceAdditionsAdjustmentsBalance Capital assets being depreciated Water production and distribution system$ 15,435,810$ $ 15,435,810$ Less accumulated depreciation for: Water production and distribution system (8,160,985) (464,999) (8,625,984) Total capital assets being depreciated, net 7,274,825 (464,999) 6,809,826 Investment in capital assets from: Contributions by participants$ 7,274,825$ (464,999)$ 6,809,826$ *Depreciation expense of $464,999 charged to water services function/program. 16 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT C-1 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 6 - Southeast Water Purification Plant The Authority and the City of Houston, Texas have entered into a Cost Sharing Water Project Contract (the “Contract”) wherein the Authority, the Cities of La Porte, Morgan's Point and Shoreacres agree to jointly finance the construction and operation of the Southeast Water Purification Plant (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 revenue bonds. The water rate to be set by the Authority will not be less than an amount sufficient to provide for payment of all expenses in producing, treating and pumping the water in connection with transmission and distribution systems and to provide payment for the interest and principal of all bonds when the bonds become due and payable. Note 7 - Contract Revenue Bonds Payable, Debt Service Requirements and Bond Resolution Requirements On May 13, 2010, the La Porte Area Water Authority issued $4.085 million in Contract Revenue Refunding Bonds, Series 2010, with an average interest rate of 2.773% to purchase U.S. Government State and Local Government Series securities that were placed in an irrevocable trust for the purpose of generating resources for all future debt service payments of $2.95 million of unlimited tax bonds. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the statement of net position. The bonds are payable from the net revenue of the Authority. The bonds are in $5,000 denominations. Interest is payable on March 15 and September 15 of each year to maturity. The Authority is in compliance with all significant requirements and restrictions contained in the bond resolution. Bonds payable at September 30, 2013, are comprised of the following issue. Interest AmountInterestMaturity Payment OutstandingRateDateDate $ 2.25-4.00%March 15, 2017March 15/2,270,000 September 15 Bonds payable activity for the year ended September 30, 2013 was as follows: Amounts BeginningRetirements &EndingDue Within Bonds and Notes PayableBalanceAdditionsAdjustmentsBalanceOne Year Contract Revenue Refunding $ $ (625,000)2,895,000$ 2,270,000$ 630,000$ Premium on bonds 77,222(17,360)59,862 $ $ (642,360)2,972,222$ 2,329,862$ 630,000$ 17 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT C-1 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 7 - Contract Revenue Bonds Payable, Debt Service Requirements and Bond Resolution Requirements (continued) As of September 30, 2013, the debt service requirements on contract revenue bonds outstanding for the next five fiscal years are as follows: Due During Fiscal YearAnnual Requirement for All Bond Series EndingTotalTotalTotal 9/30PrincipalInterestRequirements 2014630,000 58,650 688,650$ 2015650,000 41,838 691,838 2016670,000 22,850 692,850 2017320,000 6,400 326,400 $ 129,7382,270,000$ 2,399,738$ Note 8 - Fund Net Position The Authority provides surface water to the City of La Porte, Texas (the “City”) and the Cities of Shoreacres and Morgan's Point in order for these entities to comply with certain requirements imposed by the Harris County Subsidence District. The City retains the rights to approximately 86% of the water capacity of the Authority with the Cities of Shoreacres and Morgan's Point retaining the rights to the remaining 14%. The City, Shoreacres and Morgan’s Point have agreed to service the debt on the Authority's contract revenue bonds and to fund operations of the Authority in relation to their capacity rights and to purchase water based on actual consumption. As part of the debt service requirements, the participants are billed to build a reserve for future debt service requirements as set forth in the contract revenue bonds of the Authority. During the year, the Authority's billings were applied as follows: Water Supplied and Operating costs( User fees)1,213,334$ Debt Service Billings/ Charges697,727 Capital recovery billings96,127 Total Billings $ 2,007,188 Note 9 - Risk Management The Authority is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the Authority participates (through an endorsement on the City of La Porte’s contract) along with other entities in the Texas Municipal League’s Intergovernmental Risk Pool. The pool purchases commercial insurance at group rates for participants in the pool. Neither the Authority nor the City has additional risk or responsibility to the pool, outside of payment of insurance premiums. Neither the Authority nor the City had significantly reduced insurance coverage or had settlements that exceeded coverage amounts for the past three fiscal years. 18 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY EXHIBIT C-1 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 10 - Economic Dependency The Authority receives all of its support from three municipalities, with the City of La Porte being the largest contributor at approximately 86%. In addition, the Authority contracts with the City of La Porte to provide administrative oversight and operate the Authority’s transmissions system. Note 11 – Implementation of New GASB Standards In June 2011, the GASB issued Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. This statement will improve financial reporting by standardizing the presentation of deferred outflows of resources and deferred inflows of resources and their effects on a government’s net position. The requirements of this statement are effective for financial statements for periods beginning after December 15, 2011. The District has implemented GASB No. 63 in this annual report. In March 2012, the GASB issued Statement No. 65, Items Previously Reported as Assets and Liabilities. This statement will improve financial reporting by reclassifying certain items that were previously reported as assets and liabilities as deferred outflows of resources or deferred inflows of resources or as outflows or inflows of resources. The requirements of this statement are effective for financial statements for periods beginning after December 15, 2012. The District has implemented GASB No. 65 in this annual report. The deferred inflows of resources element of the financial statements represent an acquisition of net position that applies to future periods and will be not be recognized as an inflow of resources until that time. The Authority’s deferred gain on refunding of $7,075 is the only item reported as deferred inflows of resources. Note 12 – Prior Period Adjustment The Authority implemented GASB Statement 65, Items Previously Reported as Assets and Liabilities during the fiscal year ended September 30, 2013. In accordance with GASB 65, debt issuance costs should be recognized as expenses in the period incurred. Previously, debt issuance cost were recorded as assets and amortized over the life of the debt. The implementation of GASB 65 resulted in the following prior period adjustment to the net position of the governmental activities: Net position - beginning of the year: As originally presented $7,156,249 Effect of change in accounting principle (49,057) As restated$7,107,192 19 Draft 2-4-2014 (This page intentionally left blank.) 20 Draft 2-4-2014 SUPPLEMENTARY INFORMATION 21 Draft 2-4-2014 (This page intentionally left blank.) 22 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SUPPLEMENTAL SCHEDULES INCLUDED WITHIN THIS REPORT September 30, 2013 (Schedules included are checked or explanatory notes provided for omitted schedules.) D. Notes Required by the Water District Accounting Manual See “Notes to the Financial Statements (Exhibit C-1),” Pages 13-19 E. Schedule of Services and Rates F. Schedule of Enterprise Fund Expenses G. Schedule of Temporary Investments H. Analysis of Taxes Levied and Receivable (No tax levy) I. Schedule of Changes in Fixed Assets J. Long-Term Debt Service Requirements, by Years K. Analysis of Changes in Long-Term Debt L. Statement of Revenues and Expenses, Enterprise Fund – Five Years M. Insurance Coverage N. Board Members, Key Personnel and Consultants O. Statement of Revenues, Expenses and Changes in Working Capital - Budget and Actual, Non-GAAP Presentation 23 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SCHEDULE E SCHEDULE OF SERVICE AND RATES Year ended September 30, 2013 1.Services provided by the District: _____ Retail Water X Wholesale Water _____Drainage _____ Retail Sewer _____ Wholesale Sewer ___ Irrigation _____ Parks/Recreation _____ Fire Protection Security _____ Solid Waste/Garbage _____ Flood Control _ _Roads _____ Participates in joint venture, regional system, and and/or wastewater service (other than emergency interconnect) _____ Other 2.Total Water Consumption during the Fiscal Year: (You may omit this information if your district does not provide water) Gallons pumped into system:1,558,812,000Water Accountability Ratio: (Gallons billed/Gallons pumped) Gallons billed to customers:1,495,635,00095.9% 3.Standby fees: Does the District assess standby fees? Yes ____ No X 4.Location of District: County in which the District is located: Harris County Is the District located entirely within one county? Yes X No_____ Is the District located within a City? Entirely Partly X Not at all City in which District is located Morgan’s Point, Shoreacres and La Porte Is the Authority located within a city’s extra territorial jurisdiction (ETJ)? Entirely Partly X Not at all City in which Authority is located Morgan’s Point, Shoreacres and La Porte Is the general membership of the Board appointed by an office outside the Authority? Yes X No If yes, by Whom? La Porte City Council 24 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SCHEDULE F SCHEDULE OF ENTERPRISE FUND EXPENSES September 30, 2013 Professional Fees Auditing6,000$ Other14,388 Purchased Service for Resale Bulk water purchase999,647 Contracted Services Management/operation (primary government)66,338 Administrative Expenses Supplies8,090 Other administrative8,380 Other Expenses Depreciation464,999 Total Expenses $ 1,567,842 Number of persons employed by the District- 25 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SCHEDULE G SCHEDULE OF TEMPORARY INVESTMENTS Year ended September 30, 2013 Accrued Interest MaturityFaceInterest Rate*DateAmountReceivable Equity interest in City of La Porte's investment pool0.84%Demand1,349,654$ 1,136$ Pooled investments with the City of La Porte consist of obligations of the United States and its agencies and investment pools in accordance with state statutes and the City of La Porte’s investment policies. *Approximate return for September 2013. 26 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SCHEDULE I SCHEDULE OF CHANGES IN CAPITAL ASSETS Year ended September 30, 2013 BeginningRetirements &Ending BalanceAdditionsAdjustmentsBalance Capital assets being depreciated Water production and distribution system$ 15,435,810$ $ 15,435,810$ Less accumulated depreciation for: Water production and distribution system (8,160,985) (464,999) (8,625,984) Total capital assets being depreciated, net 7,274,825 (464,999) 6,809,826 Investment in capital assets from: Contributions by participants$ 7,274,825$ (464,999)$ 6,809,826$ See Accompanying Auditor’s Report. 27 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SCHEDULE J LONG-TERM DEBT SERVICE REQUIREMENTS BY YEARS September 30, 2013 Due During Fiscal YearAnnual Requirement for All Bond Series EndingTotalTotalTotal 9/30PrincipalInterestRequirements 2014630,000 58,650 688,650$ 2015650,000 41,838 691,838 2016670,000 22,850 692,850 2017320,000 6,400 326,400 $ 129,7382,270,000$ 2,399,738$ See Accompanying Auditor’s Report. 28 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SCHEDULE K ANALYSIS OF CHANGES IN LONG-TERM DEBT Year ended September 30, 2013 Series 2010Total Interest rate2.25% to 4.0% Date interest payable03/15;09/15 Maturity dates03/15/11-03/15/17 Bonds outstanding at beginning of year2,895,000$ 2,895,000$ Retirements(625,000) (625,000) Refunded Issued Bonds outstanding at end of year2,270,000$ 2,270,000$ Interest paid73,556$ 73,556$ Paying Agent/Registrar Refunding Bonds Series 2010 the Bank of New York Mellon Trust Company, N.A. – Dallas, Texas Contract TaxRevenueRefunding Bond AuthorityBonds*BondsBonds Amount authorized by voters-$ N/AN/A Amount issued- - 4,085,000 Remaining to be issued-$ -$ -$ * Includes all bonds secured with tax revenues. Bonds in this category may also be secured with other revenues in combination with taxes. Cash and temporary investment balances as of September 30, 2013$ 2,933,285 Average annual debt service payment (principal and interest) for remaining term of all debt$ 599,934 29 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY STATEMENT OF REVENUES AND EXPENSES - FIVE YEARS September 30, 2013 AMOUNTS 20132012201120102009 Operating Revenues User fees$1,213,334$1,294,479$ 1,246,186 $ 962,843$ 985,972 Operating Expenses Supplies8,0904,2075,3437,050 46 Purchased water999,6471,264,0501,006,229818,482 745,775 Services and charges95,106107,01281,11089,202 85,459 Depreciation 464,999 460,877 451,689 4 62,938 461,465 Total Operating Expenses 1,567,842 1,553,559 1,376,1991,282,969 1 ,838,207 Operating Loss (354,508) (543,728) (307,373) (413,356) (296,997) Nonoperating Revenues (Expenses) Interest income4,3625,94525,16729,957 77,870 Interest expense (53,566) (128,217) (112,713) (243,859) (272,369) Net nonoperating Revenues (49,204) (122,272) (87,546) (213,902) (194,499) Income (loss) Before Contributions and Operating Transfers(403,712) (666,000) (394,919) (627,258) (491,496) Contributions793,854752,242791,435860,304 860,388 Net Income (Loss)$ 390,142$ 396,516 $ 8 6,242$ 233,046$ 368,892 No restatement for years 2011 - 2004 See Accompanying Auditor's Report. 30 Draft 2-4-2014 SCHEDULE L PERCENT OF TOTAL REVENUES 20132012201120102009 100.00%100.00%100.00%100.00%100.00% 0.67%0.32%0.43%0.73%0.00% 82.39%97.65%80.74%85.01%75.64% 7.84%8.27%6.51%9.26%8.67% 38.32%35.76%36.98%47.93%45.81% 129.21%142.00%124.67%142.93%130.12% -29.21%-42.00%-24.67%-42.93%-30.12% 0.36%0.46%2.02%3.11%7.90% -4.41%-9.90%-9.04%-25.33%-27.62% -4.07%-9.45%-7.03%-22.22%-19.74% -33.27%-51.45%-31.69%-65.15%-49.85% 65.43%58.11%63.51%89.35%87.26% 32.15%6.66%31.82%24.19%37.41% 31 Draft 2-4-2014 (This page intentionally left blank.) 32 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SCHEDULE M INSURANCE COVERAGE September 30, 2013 Amount ofPolicy Clause Type of CoverageFrom/ToInsurer Name CoverageInsurance Comprehensive General and $ - Texas Municipal League None 10/01/12- Contractual Liability Bodily Intergovernmental Risk Pool* 10/01/13 Injury and Property Damage: Per occurrence 2,000,000 Aggregate 4,000,000 Deductible 5,000 10/01/12- Pollution Liability 2,000,000 Texas Municipal League None 10/01/13 Intergovernmental Risk Pool* 10/01/12- Errors and Omissions**Texas Municipal League None 10/01/13 Intergovernmental Risk Pool* Per act 3,000,000 Aggregate 6,000,000 Deductible 5,000 10/01/12- Automobile LiabilityTexas Municipal League None 10/01/13 Intergovernmental Risk Pool* Each occurrence 1,000,000 Each person 25,000 Deductible 1,000 **Directors are covered under the errors and omission policy. See Accompanying Auditor’s Report. 33 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SCHEDULE N Page 1 of 2 BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS September 30, 2013 Authority's Mailing Address:City of La Porte Michael Dolby 604 W. Fairmont Parkway La Porte, Texas 77571 Authority's Business Phone Number: (281) 471-5020 Term of Office/ Appointed/Expense Resident of Name and AddressExpiresReimbursementsTitle at Year EndAuthority Board Members David Janda8/30/2012President 3601 East Desert Dr. YesPosition 4 La Porte, TX 775718/31/2014 Doug Martin6/11/2012Member 1103 Oak Leaf YesPosition 3 La Porte, TX 775718/31/2015 Randy Woodard8/30/2013Member 2601 S. BroadwayYesPosition 1 La Porte, TX 775718/31/2015 Ken Schlather8/30/2012Vice President 9811 CatlettYesPosition 5 La Porte, TX 775718/31/2014 Dennis H. Steger8/30/2013Member 3201 Bayshore Dr.YesPosition 2 La Porte, TX 775718/31/2015 Key Administrative Personnel Corby AlexanderGeneral Manager Michael DolbyDirector of Finance Note: No director has any business or family relationship (as defined by the Texas Water Code) with major landowners in the Authority or with any of the Authority’s consultants. See Accompanying Auditor’s Report. 34 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SCHEDULE N Page 2 of 2 BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS September 30, 2013 Fees and Expense Name and AddressDate HiredReimbursementsTitle Consultants City of La Porte1981$62,852Management/Operator 604 W. Fairmont Parkway La Porte, TX 77571 Whitley Penn, LLP2012$6,000Auditor 2000 Loop 197 North, Suite 200 Texas City, Texas 77590 The Bank of New York1999$0Paying Agent Global Corporate Trust 2001 Bryan Street, 10th Floor Dallas, TX 75201 See Accompanying Auditor’s Report. 35 Draft 2-4-2014 LA PORTE AREA WATER AUTHORITY SCHEDULE OF REVENUES AND EXPENSES - BUDGET AND ACTUAL - (BUDGETARY BASIS) Year Ended September 30, 2013 Actual (Budgetary Variance Over Original BudgetFinal BudgetBasis)(Under) Revenues Water revenue billing 1,129,423$ 1,129,423$ 1,213,334$ 83,911$ Total Revenues 1,129,4231,129,423 1,213,334 83,911 Operating Expenses Supplies8,2008,2008,090110 Purchased water1,055,4641,055,464999,64755,817 Other services and charges132,096132,09695,10636,990 Depreciation- - 464,999(464,999) Total Operating Expenses 1,195,7601,195,760 1,567,842 (372,082) Operating Income (Loss) (66,337)(66,337) (354,508) (288,171) Nonoperating Revenues (Expenses) Interest income5,0005,0004,362 (638) Interest expense and fiscal charges(73,556) (73,556) (53,566) 19,990 Total Nonoperating Revenues (Expenses) (68,556)(68,556) (49,204) 19,352 Income (Loss) Before Contributions and Transfers (134,893)(134,893) (403,712) (268,819) Capital Contributions794,683794,683793,854 (829) Change in Net Position659,790 659,790 390,142 (269,648) Net Position - Beginning 7,156,2497,156,249 7,156,249 Prior Period Adjustment (49,057)(49,057) (49,057) Net Position - Beginning, as Restated 7,107,1927,107,192 7,107,192 (269,648) Total Net Position- Ending$ 7,766,9827,766,982$ 7,497,334$ (539,296)$ See Accompanying Auditor’s Report. 36