HomeMy WebLinkAbout01-15-1991 Meeting•
LA PORTS AREA WATER AUTHORITY
MINUTES
JANUARY 15, 1991
1.
2.
The meeting was call ed to order at 6:00 P. M. by President
Jerry Bramlett.
MEMBERS PRESENT: President
Wadsworth, Members-Elect
B1 ackwel l
Jerry Bramlett, Member Mike
Albert Fields and Robert
MEMBERS ABSENT: None
OTHERS PRESENT: Robert Herrera, General Manager; Jeff
Litchfield, Director of Finance; Steve Gillett, Director
of Public Works; Dale Conger, Espey, Huston & Associates;
and Buddy Jacobs, Assistant Director of Public Works
The Oath of Office was administered to Albert Fields and
Robert Blackwell by President Jerry Bramlett.
3. The minutes from the July 10, 1990, regular meeting were read.
Member Mike Wadsworth made motion to approve the minutes as
presented, seconded by President Jerry Bramlett, with Members
AI Fields and Robert Blackwell abstaining. Motion was
unanimous.
4. AI Fields made motion to place Jerry Bramlett in nomination
as President, seconded by Mike Wadsworth. Motion was
unanimous. President Jerry Bramlett made motion to nominate
Mike Wadsworth as Vice President, seconded by Al Fields.
Motion was unanimous. Bnb Blackwell nominated Al Fields as
Secretary-Treasurer, seconded by Mike Wadsworth. Motion was
unanimous.. Discussion was held concerning the frequency of
meetings. They are normal l y held monthly; however, since the
construction phase is virtually complete it is anticipated
that meetings will probably be held once every two to three
months.
5. Catch-up payment to the City of Houston in the amount of
X74, 147. 80 was discussed. Bob Herrera discussed the procedure
for payment processing; after determining the charges were
accurate, pre-payment was made in order to avoid back charges
and penalties, and to maintain a good payment record. Steve
Gillett discussed the City of Houston's spreadsheet, including
the portions of ownership of the plant, water usage, water
rates, etc. Motion to approve catch-up payment was made by
AI Fields and seconded by Mike Wadsworth. Motion was
unanimous.
LA PORTS AREA WATER AUTHDRITY
PAGE TWO
6. The annual La Porte Area Water Authority financial statements
audit was discussed. Jeff Litchfield discussed the audit
figures with the Board, and answered several questions.
Motion to approve the audit as presented was made by Mike
Wadsworth, seconded by AI Fields. Motion was unanimous.
7. Dale Conger discussed the status of the construction. The
contractor is finishing the project and the control systems
computer is being set up. The system should be in operation
within the next couple of weeks. There have been some Iast-
minute problems with the telephone company lines and changes
to separate and higher _grade lines. He also showed a map of
the distribution system in place which should satisfy demands
for the next 20 years. A consideration was left to install
a booster station if additional capacity was required in the
future.
8. Steve Gillett discussed the requirements of a bond for each
Board member, which becomes effective on March i, 1991. These
were executed.
9. A history of the La Porte Area Water Authority was discussed
by General Manager Robert Herrera. AI Fields requested
several i terns be avail ab1 e for his review: budget, bond
covenants, operations contract. Steve Gillett and Jeff
L i tch f i e1 d wi 11 pro vide both new members with copies o f these
items.
10. There being no further business, motion was made by Bob
Blackwell to adjourn, seconded by Mike Wadsworth. Motion was
unanimous and the meeting was adjourned at 7:27 P. M.
1
Al Fi e1 ds
Secretary, Treasurer
PASSED AND APrPROVED:
ON THI S DAY (\~ (~,,~ ~ ~ , 19 C_
Jerry\Bra~-e7,St; Pres i den t
~ A
LA PORTS AREA WATER AUTHORITY
AGENDA
REGULAR MEETING OF THE LA PORTS AREA WATER AUTHORITY TO BE HELD
TUESDAY, JANUARY 15, 1991, IN THE FIRST FLOOR CONFERENCE ROOM OF
THE PUBLIC WORKS BUILDING, 2963 NORTH 23RD STREET, LA PORTS, TEXAS,
BEGINNING AT 6:00 P.M.
1. CALL TO ORDER.
2. ADMINISTER OATH OF OFFICE TO AL FIELDS AND ROBERT BLACKWELL.
3. APPROVE THE MINUTES FROM THE JULY 10, 1990 MEETING.
4. ELECTION OF OFFICERS.
S. CONSIDER APPROVAL OF PAYMENT OF CITY OF HOUSTON "CATCH-UP" IN
THE AMOUNT OF X74,147.80.
6. CONSIDER APPROVAL OF LA PORTS WATER AUTHORITY FINANCIAL
STATEMENTS AUDIT YEARS ENDED 1989-1990.
7. ENGINEER'S REPORT.
8. GENERAL MANAGER'S REPORT.
9. BRIEF HISTORY AND STATUS REPORT OF LA PORTS AREA WATER
AUTHORITY.
10. ADJOURNMENT.
•
OATH OF OFFICE
I, ROBERT BLACKWELL, DO SOLEMNLY SWEAR (OR AFFIRM), THAT I
WILL FAITHFULLY AND IMPARTIALLY EXECUTE THE DUTIES IMPOSED UPON ME
BY LAW AS A MEMBER OF THE LA PORTE AREA WATER AUTHORITY BOARD, AND
I FURTHERMORE SOLEMNLY SWEAR (OR AFFIRM), THAT I HAVE NOT DIRECTLY
OR INDIRECTLY PAID, OFFERED, OR PROMISED TO CONTRIBUTE ANY MONEY
OR VALUABLE THING, OR PROMISED ANY PUBLIC OFFICE EMPLOYMENT, AS A
REWARD TO SECURE MY APPOINTMENT. SO HELP ME GOD.
SIGNATURE
DATE
SUBSCRIBED AND SWORN TO BEFORE ME, BY THE SAID ROBERT BLACKWELL,
THIS THE 15TH DAY OF JANUARY, 1991, TO CERTIFY WHICH WITNESS MY
HAND AND SEAL OF OFFICE.
NOTARY PUBLIC
•
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CITY OF L.A PORTE
INTER-OFFICE MEMORANDUM
AUGUST 16, 1990
T0: Steve Gillett, Public Works Director
FROM: Robert T. Herrera, City Manager
SUBJECT: City of Houston - Quarterly Payment (LPAWA~~t
Please process the payment requested from the City of Houston for LPAWA's share
of the capital costs for the Southeast Water Purification Plant in the amount
of $74,147.80.
Place this request on the first available LPAWA board meeting where a quorum can
be present.
RTH/ms
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Post Office Box 1562 Houston, Texas 77251-1562
Kathryn J. Whitmire, Mayor
CITY COUNCIL MEMBERS: Larry McKaskle Ernest MCGowen, Sr. Vince Ryan Alfred J. Calloway Frank O. Mancuso John G. Goodner Christin Hartung
Dale M. Gorczynski Ben T. Reyes Beverley Clark Eleanor Tinsley Jim Greenwood Sheila Jackson Lee Judson Robinson, Jr. CITY CONTROLLER: George Greanias
S~la~
dir. Robert T. Herrera
General Manager
LaPorte Area Water Authority
P.O. Box 1115
LaPorte, Texas 77571
August 1, 1990
Subject: Cost Sharing Water Project
Contract No. 27680
Southeast Water Purification Plant
Dear dir. Herrera:
rt RECEIVED
AUG 0 6 1990
CITY }vi,~i`Jr~~LRS
QFFIC~
Enclosed for your information is a copy of our current spreadsheet used for
calculating allocated cost on the Southeast Plant Project. LaPorte Area Water
Authority's "catch-up" as of June 30, 1990 is $74,147.80.
If you have any questions, please contact Harish Roopani at 247-3012.
Sincerely,
JJB:HR:ml
Attachment
xc: R, Dale
J. Taylor
ohn J. ~ Baldwin
Deputy Assistant Director
Department of Public Utilties
doc#0023Q/8
SOUTHEAST WATER PURIFICA7IO~ANT
Preliminary Cost Allocation
Cost Element Total Cost Production Pumping Total
To Date MULT 1 MOLT 2 Cost MULT 1 MULT 2 Cost
6/30/90
Raw Water Supply
96 in pipeline
Design 52,055,288.68 1.00 0.32 $657,692.38 0.00 0.00 50.00
Acquisition 5869,382.58 1.00 0.32 5278,202.43 0.00 0.00 50.00
Construction 511,317,830.50 1.00 0.32 53,621,705.76 0.00 0.00 50.00
Pumps & Connections
Design 5243,145.00 1.00 0.35 585,689.87 0.00 0.00 50.00
Construction 55,086,887.49 1.00 0.35 51,792,735.68 0.00 0.00 50.00
Subtotal Rau Water 519,572,534.25 56,436,026.11 50.00 56,436,026.11
Treatment Plant
Land Acquisition 56,560,790.00 0.73 0.11 5510,866.85 0.27 0.11 5188,950.75
Site Cleanup 51,149,371.99 0.73 0.00 50.00 0.27 0.00 50.00
Engineering
Preliminary Phase 5620,409.93 0.73 0.11 548,309.25 0.27 0.11 517,867.81
Siting Study 5145,659.80 0.73 0.11 511,342.04 0.27 0.11 54,195.00
Final Design 160 mgd 56,274,003.91 0.73 0.50 52,290,011.43 0.27 0.50 5846,990.53
Final Design 80 mgd 51,477,870.49 0.73 1.00 51,078,845.46 0.27 1.00 5399,025.03
Construction Phase Svc s 5692,670.40 0.73 1.00 5505,649.39 0.27 1.00 5187,021.01
Construction
Base Amount Earned 566,907,009.44 0.73 1.00 548,842,116.89 0.27 1.00 518,064,892.55
Change Orders 5156,636.10 0.73 1.00 5114,344.35 0.27 1.00 342,291.75
138K Electric Line 51,695,900.00 0.73 0.11 5132,054.08 0.27 0.11 548,841.92
Salary Recovery -PW 348,179.97 0.73 1.00 5254,171.38 0.27 1.00 594,008.59
Force main 265,362.86 0.73 1.00 5193,714.89 0.27 1.00 571,647.97
Construction Mgmt
Inspection/Testing/CM 55,079,992.56 0.73 1.00 53,708,394.57 0.27 1.00 51,371,597.99
Subtotal Plant 591,373,857.45 557,689,820.58 521,337,330.90 579,027,151.48
TOTAL PLANT + RAW 5110,946,391.70 564,125,846.69 521,337,330.90 585,463,177.59
La Porte Area Water Autho rity: 53,366,b06.95 3497,159.81
Distribution
Prelim Engineering 51,132,802.00
Final Design 51,853,728.85
Construction 521,785,970.37
TOTAL DISTRIBUTION 524,772,501.22
La Porte Area Water Authority Distribution:
La Porte Area Water Authority total share:
GRAND TOTAL 5135,718,892.92
MULT 3 MULT 2
0.45 0.11 556,073.70
0.45 0.33 5278,059.33
0.45 0.33 53,267,895.56
NOTES:
1. Peak plant capacity 80 mgd; peak pumping capacity 225 mgd.
2. Assumes ultimate construction of 750 mgd plant.
3. MULT 1 = Production/Pumping Allocation Factor (73/27)
MULT 2 = Cost allocated to this project in context of overall SEWPP project.
MOLT 3 = Distance Allocation on Distribution Pipeline (B/D in Sec 4.08)
4. FINAL PROJECT COSTS TO BE BASED ON ACTUAL EXPENDITURES.
5. COSTS ACCUMULATED TILL JUNE 90
$3,602,028.58
50.00
33,863,766.76
----------------
----------------
• •
Summary
JUNE 30, 1990
La Porte
---------------
Production 3,366,606.95
Pumping 497,159.81
Distribution 0.00
---------------
Total Share: 3,863,766.76
Paid to Date: 3,789,618.96
---------------
"CATCH-UP" 74,147.80
---------------
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The La Porte Area Water Authority (LPAWA) was created by an act of
the Texas Legislature to ensure an adequate supply of surface water
for the Bayshore Area, in response to a mandate by the Harris-
Galveston Coastal Subsidence District to convert to surface water
by 1990. The Authority, after approval by voters, in 1982, began
work on a plan to supply surface water. Various alternatives were
investigated, and by 1985, it appeared that a plant built and
operated by the Authority was the most cost-effective alternative.
Also during this period, potential water customers were contacted,
and interest was expressed by the Cities of La Porte, Morgan's
Point, Seabrook and Shoreacres, along with Bayshore Municipal
Utility District (Bay MUD) and Water Control Improvement District
No. 50. Projected water demands were obtained, and cost estimates
were prepared to reflect total cost, as well as each individual
entity's cost. Availability of raw water at this time presented
no problem, and the Authority began contract negotiations with the
proposed customers for surface water supply.
In April 1986, the City of Houston announced the proposed
construction of the South East Water Purification Plant near
Ellington Air Force Base. Due to this investment, and the probable
need to examine future raw water needs for Houston within ten
years, Houston could offer only a ten year contract for the
purchase of raw water to the Authority. The Authority could,
however, purchase capacity at the proposed Southeast Plant for its
surface water needs.
The Authority began examining the costs of purchasing capacity at
the Southeast Plant, as well as participating with Deer Park in
their proposed plant. Cost analysis indicated the City of Deer
Park option had a substantially higher cost than the Houston Plant
and the original Authority Plant, which were comparable. The
Authority decided that the most cost effective option was to
negotiate a contract with the City of Houston to purchase capacity
at the Southeast Plant, and construct transmission facilities to
deliver surface water to customers.
The City of Seabrook, along with WCID No. 50 indicated that it
would be more cost effective for their surface water needs to be
met by direct dealings with Houston, or through the City of
Pasadena. The remainder of the Authority's customers committed to
the purchase of surface water through the Authority, and the
Authority began contract negotiations with the City of Houston for
purchase of capacity at the Southeast Plant.
•
The Authority investigated various funding sources, and determined
the Texas Water Development Board would provide the most cost
effective funding source. The necessary requirements were pursued
while contract negotiations continued with the Authority's
customers and the City of Houston. Additionally, the Authority
received proposals from several engineering firms to design the
necessary transmission system. The firm of Espey, Huston &
Associates was selected, and began design.
The contract with the City of Houston to purchase capacity at the
Southeast Plant was finalized in December 1987. The Engineer
completed plans and specifications during the following year, as
the Authority acquired the necessary easements for construction.
Bids for construction of the transmission system were received in
January 1989, and construction began in March by the successful
bidder, Mercer Construction Company.
The Southeast Water Purification Plant, scheduled for completion
October 1989, was delayed until October 1990. This in turn delayed
Mercer Construction Company. Upon receipt of water, the Authority
began finalizing the transmission system. Additional telemetry
problems with the phone system have been solved, and the La Porte
Area Water Authority will soon be supplying treated surface water
to the Bayshore area, as envisioned almost ten years ago.
La i'orte AreaW~t~rAuthorit
y
PHONE (71 3) 471 -5020 • P. O. Box 1 1 1 5 • LA PORTE. TEXAS 77572- 1 1 1 5
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January 8 , 1991 Jgly ~ rg9t
La Porte Area Water Authority Ci i~Y t~gNgCERS
Jerry Bramlett, President ~~F{~E
Mike Wadsworth, Director
Al Fields, Director Elect
Robert Blackwell, Director Elect
Enclosed is a draft copy of the Comprehensive Annual Financial Report for the
La Porte Area Water Authority for the fiscal year ended September 30, 1990.
The report was prepared by the Authorities auditing firm, KPMG Peat Marwick.
It was based on data that was compiled by the City of La Porte. This draft
will be replaced by the official report, which will be given to you at the
January 15, 1991 meeting. There should be no changes in any number in the
report.
I have reviewed the report and agree with all numerical aspects of the report.
The La Porte Area Water Authority ended the year in excellent financial
position.
One item which will be of interest to you is the fund equity. We started the
year with a fund equity of -$139,600 and ended the year with a positive fund
equity of $894,583. A major component of the shift of fund equity was the
capitalization of interest expense. Governmental Accounting Principals allow
for the capitalization of part of the interest expense on monies borrowed to
finance a project as long as the project is in progress. In the fiscal year
just ended, we capitalized $743,384 in interest expense.
I will attend the January 15, 1991 meeting and will be available to answer any
questions you might have.
Sincerely
J f tchfield, CPA
irector of Finance
xc: `/obert T. Herrera, General Manager
Steve Gillett, Director of Public Works
•
•
La Porte Area Water Authority
Financial Statements and
Supplementary Information
September 30, 1990 and 1989
(With Independent Auditors'
Reports Thereon)
•
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LA PORTE AREA WATER AUTHORITY , ~ ~ : M : ,;, . ` _, . ; _.
t~~.
Table of Contents i=or :.~i~;:u~~.;:,r; ;= _
~..~ __
Independent Auditors' Report
__ Schedule and Exhibit References
Per accompanying
financial statements Per Texas Department
and supplementary of Water
information Resources Manual`
Exhi it Schedule
Financial Statements: A 1
Balance Sheets -All Funds
Statements of Revenues, Expenses and
Changes in Accumulated Deficit - B ~
All Proprietary Fund Types
Statements of Cash Flows -All C ~
Proprietary Fund Types 6
Notes to Financial Statements _
the ule Schedule
Supplementary Information:
Analysis of Changes in Cash E
and Temporary Investments N/A
Long-term Debt Service Requirements F
by Years
Analysis of Changes in Long-term Debt l
~ G
H
Schedule of Temporary Investments 3 I
Analysis of Taxes Receivable N/A J
Analysis of Organizational Costs N/A
Analysis of Changes in General NSA K
Fixed Assets
Schedule of Notes Payable NSA L
Comparative Schedule -Revenues
and Expenditures -General Fund M
and Debt Service Fund NSA
~ N
Insurance Coverage
Board Members, Key Personnel and
O
Consultants $
__,
Questionnaire Completed by the P
Auditors --"
Certificate of the Board of _ Q
Directors
* These are the numbers assigned by the Texas Water Commission; they are provided for cross-
reference purposes. Certain other schedules designated by the Texas Water Commission have
been omitted because necessary information was not available or was included elsewhere in
the accompanying financial statements and supplementary information.
•
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..'fir ~\: ~. ~ _,
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The Board of Directors
La Porte Area Water Authority:
Independent Auditors' Report
We have audited the component unit financial statements of the La Porte Area Water Authority
(Authority) as of September.30, 1990 and 1989 and for the years then ended, as listed in the
accompanying table of contents. These component unit financial statements are the responsibility
of the Authority's management. Our responsibility is to express an opinion on these component
unit financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether
the component unit financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the component unit
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the component unit financial statements (Exhibit A, B and C) referred to above
present fairly in all matenal respects, the financial position of the La Pone Area Water Authority as
of September 30, 1990 and 1989, and the results of its operations and cash flows for the years
then ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic component unit financial
statements taken as a whole. The supplementary information presented in Schedules 1 through $ is
presented for purposes of additional analysis and is not a required part of the basic component unit
financial statements. Such information has been subjected to the audittng procedures applied in the
audits of the basic component unit financial statements and, in our opinion, is fairly presented in all
material respects in relation to the basic component unit financial statements taken as a whole.
December 21, 1990
• Exhibit A
LA PORTE AREA ~'VATER AUTHORITY
Balance Sheets ~,~~ ~ ; : ~; r ; ..-r ~ r-. ~ . ___
AlI Funds _ , , . , ,
September 30, 1990 and 1989
Proprietary fund type
_ enter rise
Assets 1
Current Assets: $ 169 5.014
Cash 94,991 -
Accounts receivable
Temporary investments: 1,258,649 3,244,424
Unrestricted 910,236 521,365
Restricted 9,143 13,713
Accrued interest receivable
Total current assets 2,273,188 3,784.516
Land, building and equipment -construction-in-progress 8,748,511 7,169,508
Total assets $ 11,021,699 10,954,024
Liabilities and Fund Equitv
Current liabilities: 000
45 -
Accountspayable ,
385
220 -
Accrued interest payable ,
731
61 1,293,624
Due to City of La Porte ,
Total current liabilities 327,1 I6 1,293,b24
Revenue bonds payable 9,800,000 9,800.000
Total liabilities 10,127,116 11,093,624
Fund Equitv
Reserved for bond contingency 689,851 521,365
Unreserved 204,732 (660,965)
Total fund equity 894,583 (139,600)
Total liabilities and fund equity ~ • $ 11,021,699 10,954,024
See accompanying notes to financial statements.
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LA PORTE AREA WATER AUTHORITY
Statements of Revenues, Expenses and Changes
in Accumulated Deficit
All Proprietary Fund Types
Years ended September 30, 1990 and 1989
Debt service and maintenance charges
Interest income
Expenses:
Interest expense
Other services and charges
Total expenses
Income (loss) before operating transfers
Operating transfers out
1\Tet income (loss)
Accumulated deficit at beginning of year
Fund equity at end of year
Exhibit B
Proprietary fund type
ente rise
$ 1,074,068 -
143,753 227,767
138,156 227,767
5,482 1,587
143,638 229,354
1,074,183 (1,587)
(40,000) -
1,034,183 (1,587)
(139,600) (138,013)
$ 894,583 (139,600)
See accompanying notes to financial statements.
• Exhibit C
LA PORTE AREA WATER AUTHORITY
Statements of Cash Flows -
All Proprietary Fund Types _,r; ~ , , ,, , • .,. ; ~~-~
Years ended September 30, 1990 and 1989 • ,, : ;~. , ~_ ~_ . .... ~ - -
Proprietary fund type
ente rise
Net income (loss) $ 1,034,183 (1,587)
Adjustments to reconcile net loss to net cash provided
by (used for) operating activities:
Increase in accounts receivable (94,991)
4
570 -
713)
(13
Decrease in accrued interest receivable ,
000
45 ,
(14,997)
Increase in accounts payable
Increase in accrued interest payable ,
220,385 (7,662)
Increase (decrease) in due io City of La Porte (1,231,893) 1,133,002
Total adjustments (1,056,929) 1,096,630
Net cash provided by (used for)
i
i
i
746)
(22
1,095,043
v
t
es
operating act ,
Cash flows used in investing activities -capital expenditures (1,579,003) (6,805,080)
Cash flows from financing activities:
Proceeds (repayments) of short-term debt - (~ 19,160)
Proceeds from issuance of long-teen debt - 9,800,000
Net cash provided by financing activities - 9,480,840
Net increase in cash and cash equivalents (1,601,749) 3,770,803
Cash and cash equivalents, beginning of year 3,770,803 -
Cash and cash equivalents, end of year $ 2,169,054 3,770,803
Supplemental disclosure of cash flow information:
Cash paid during the year for interest
net of amount capitalized $ 138,156 227,767
See accompanying notes to financial statements.
• •
LA PORTS AREA WATER AUTHORITY
Notes to Financial Statements
September 30, 1990 _~ ~` ~ - ~- ~ `~`~ ~ ' ~ -~ ' ~ ~_ - ..
(1) Formation
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 or 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 to issue
revenue bonds for the purpose of acquiring and maintaining such systems. The Authority
comprises approximately 20,600 acres in Harris County, Texas.
The Authority's primary operations have consisted of purchasing an undivided interest in
the Southeast Water Purification Plant (the Southeast Plant) under construcrion by the City
of Houston and planning the construction of transmission and distribution systems to
transport water from the Southeast Plant to the customers of the Authority.
(2) Summary of Significant Accounting Policies
The following is a summary of the significant accounting policies followed by the La Porte
Area Water Authority:
(a) Reporting Entity
The financial statements of the Authority include all funds and operations which are
controlled by or dependent on the Authority. The criteria considered in determining
governmental activities to be reported within the Authority's financial statements
include the degree of oversight responsibility exercised by the Board of Directors over
an organization, activity or function, the Authority's accountability for the activity's
fiscal matters, its scope of public service, and the nature of any special financing
relationships which may exist between the Authority and a given governmental activity.
These criteria are based upon and consistent with those promulgated by the
Governmental Accounting Standards Board.
The City of La Porte is the lowest level of government exercising oversight
responsibility and controls over all activities related to the acquisition, operation, and
maintenance of waterworks and sewer systems within the boundaries of the La Porte
Area Water Authority. The Authority is iiScluded in the financial statements of the City
of La Porte, due to the reporting entity concept as defined by the Governmental
Accounting Standards Board, since the Board of Directors is appointed by the City
Council of the City of La Porte, and has the ability to significantly influence operations,
and primary accountability for fiscal matters.
(Continued)
• i
,,= .;~
LA PORTE AREA WATER AUTHORITY
Notes to Financial Statements
(b) Basis of Presentation -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
The Authority maintains an accounting system in accordance with the requirements of
the Texas Department of Water Resources' Water District Accountine Manual.
(d) Cash Equivalents
For purposes of the statements 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) Construction-in-progress
The Authority, in conformity with requirements of the Texas Water Commission,
capitalizes during construction all costs incurred for construction of facilities, the issue
and sale of bonds, attorney's fees, interest and some administrative expenses until
acceptance or use of the revenue-producing facility has occurred. Interest capitalized
during 1990 and 1989 totaled $743,384 and $18,982, respectively.
(3) Cash and Temporary Investments
The Authority holds its cash and temporary investments separately in each of its funds.
Following is a description of the Authority's investment policies and the n~pes of insurance
and collateral maintained on cash and temporary investments.
Statutes o~ the State of Texas and policies mandated by the Authority's Board of Directors
authorize the Authority to invest only in obligations of the U.S. Treasury, certificates of
deposit issued by local financial institutions or money market accounts with local financial
institutions. -.
As of September 30, 1990 and 1989, the ~4nthority had total cash and temporary
investments of $2,169,054 and $3,770,803, respectively. Of this total $169 and $5,014,
was covered by federal depository insurance and $2,168,885 and $3,765,789, respectively
by collateral held at the Federal Reserve Bank at Houston and in third-party banks' trust
departments in the Authority's name. Temporary investments included $500,598 and
$286,489 of pooled investments with the Authority's oversight unit, the City of La Pone.
(Continued)
• •
LA PORTE AREA WATER AUTHORITY
Notes to Financial Statements
(4) Provision for Income Taxes
The Authority is an organization described in Internal Revenue Code Section 115 and no
tax provision is necessary in regard to its excess revenue.
(5) Southeast Water Purification Plant
The Authority and the City of Houston have entered into a Cost Sharing Water Project
Contract (the Contract) wherein the Authority, the Cities of La Porte, Morgan's Point and
Shoreacres, Bayshore Municipal Utility District, and other participants agree to jointly
finance the construction and operation of the Southeast Water Purification Plant. Under the
terms of the Contract, the Authority will purchase 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~and Bayshore Municipal Utility District 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 are
provided by the issuance of $9.8 million revenue bonds.
The water rate to be set by the Authority will at all times be not less than an amount
sufficient to provide for payment of all expenses in producing, treating and pumping the
water in connection with the transmission and distribution systems, and to provide payment
for the interest and principal of all bonds when and as the same shall become due and
payable.
(Continued)
LA PORTE AREA WATER AUTHORITY
Notes to Financial Statements
(6) Bonds Payable
On Mazch 7, 1988 (amended epsl 12Acts of the 67th LLegislature of thBStateooflTexas~rRegular Sessionty1981 andeChapter 54 of the Te~OW~ater Codeg~ ~S ptcmber 30~ 990, all of these
. with Chapter 729, page 2,678 eq
bonds had been issued. The bonds are payable from the net revenues of the Authority. The bonds are in $5,000 denominations. Interest on all bonds is payable on June ]and December 1 o eac
yeaz to maturity.
The following is a summary of other information relative to bonds outstanding:
Callable on Principal
Ori~a1 Total Issuance Matttrity date interest paymen[ amount
issue outstanding at Interest ~,>atLnin,R engine datac beemnme ~~ll;lblti
Series am4.td01 September 0__1990 [;~ ~
Series 1988 $5,000,000 5,000,000 4.95% to 7.05% November 1, 1988 December 1, 19918015 December 1, 1998 $5,000,000
Series II 1988 4 800.000 4,$00,000 5.15%_ to7.OS°7o December 1, 1988 December 1, 1992/L016 December 1, 1998 4,800,000
$9.800.000 9.800.000
The various bond indenture Vaon~ s s~niFicfiman~l ~itdano~~ cvc ut~°~ d ~ovuagesebThe Authonity isein compliance w th allnsuch st~tifictant futancial lirnitauons and restrictions~~ minimum
amounts to be maintained to 8
The annual requirements for bonds payable as of September 30, 1990 are as follows:
ti.~ Principal ~~ -*~ J
-
$ 661,156 ~
1991
1992 80,000 659,175
• 1993 160,000
000
170 653,075
644,407
~ ~
1994
1995-1999 ,
1,055,000 3,054,770 b' z
2000.2004 1,480,000
000
085
2 2,657,854
2,056,142 _ >
~ ~
2005-2009 ,
,
000
915
2 1,193,731 ~ ~
,
,
~ ~'~
201-20]7
$9 800,000
11 573,564 ~, >
0
-1
•
The Board of Directors
La Porte Area Water Authority:
•
t. ,.
The primary purpose of our audits of the component unit financial statements of the La Porte Area
Water Authority for the year ended September 30, 1990 and 1989 was to enable us to express an
opinion on the fairness of presentation of the component unit financial statements of the La Porte
Area Water Authority as of and for the years then ended. Based on the information obtained
during the course of our audits, we have responded to the questions contained in the accompanying
questionnaire to be completed ~by the auditors. The response to question 6 should be considered as
an expression of d~tsoP hould be understood that udCh audit procedures can of be relied upon to
craracter of our au ,
disclose all instances of a noncompliance nature.
REPORT DATE
Note: This letter is an integral part of the responses to the questions contained in the accompanying
questionnaire and must be read in connection with it.
u
•
LA PORTE AREA WATER AUTHORIY
Questionnaire Completed by the Auditors
For the year ended September 30, 1990 ~ ;; : ; ; , _ _ _
La Porte Area Water Authority
1. At the time that your firm was engaged by the Board of Directors of
the above-named water district to perform this audit, were copies of
the Annual Audit Report Requirements and the Water District
Accounting Manual made available to you? yeS No
2. The Water District Accounting Manual prescribes accounting methods
and policies. After taking these into consideration, did the local
water district:
a. Maintain a proper classification of expenses and revenues? X -
Yes No
b . Record expenses and revenues according to GAAP and
consistent with the type of accounting system utilized? X
Yes N o
c. Maintain the double entry system of accounting? X
Yes No
d. Adhere to other provisions of the Water District Accounting X .-
manual? Yes No
3. Did the Board of Directors for the water district impose on your firm X
any audit requirements in addition to those stated in the Annual - -
Audit Report Requirements? Yes No
4. Did you identify, during the course of your examination of the
financial statements of the water district, any area pertaining
to accounting matters on which action should be taken by the
Board of Directors of the water district? X
Yes No
If Yes is checked for question 4., have these topics been
discussed in a management letter to the water district's
Board of Directors? N / A
Yes No
See accompanying letter dated December 21, 1990.
(Continued)
2
•
LA PORTE AREA WATER AUTHORIY
Questionnaire Completed by
;, ...
the Auditors ~ -- ~ -. ~~~ ~ J
_~~=~~ _
5. Did you obtain representation from the Board of Directors of the water
district that all records of the water district were made available to you X
for your examination? Yes No
6. Did the water district:
a. Use the Capital Projects Fund and Debt Service Fund only for
purposes authorized by the Board of Directors of the water
district and/or within the provisions of applicable bond resolutions? N / A
Yes No
b. Properly escrow the required amount of cash as prescribed
by the Texas Water Commission or disburse the escrowed cash T
according to the terms prescribed by the Texas Water Commission? ~ / A
Yes N o
c. Do business only with firms or corporations in which
members of the Board of Directors had no pecuniary interest? ~`
Yes No
d. Observe the conditions for obtaining grants, gifts, etc., or observe
agreements with governmental agencies for the purpose of securing ~
funds or services?
Yes No
e. Have a contract for Social Security coverage for its employees with
the Social Security Division of the Texas Employees Retirement N / A
System? T
Yes 1\ o
f . Make remittances of Social Security taxes according to the terms of
the contract for Social Security coverage with the Social Security T
Division of the Employees Retirement System of Texas? N / A
Yes No
'~ Nothing came to our attenrion during the course.of our examination
which indicated that the laws are not being observed.
See accompanying letter dated December 21, 1990.
(Continued)
3
LA PORTE AREA WATER AUTHORIY . ,,. , , ~ , . 1 _,
Questionnaire Completed by the Auditors ~ ';
g. Deposit receipts to the proper funds kept by the approved X
depository bank? Yes No
h. Draw checks only on funds approved by the Board of Directors X
and signed by authorized personnel? yeS No
7 . Management letter.
a. The date of your most recent management letter was ~ ~ A
M AMT LETTER DATE. yeS No
b. Were your recommendations explained to and discussed with
administrative officials of the water disu-ict? yes No
c. Is there evidence indicating that the previous year's
recommendations have been or are being implemented? yes No
8. The Texas Water Code makes specific provisions relating to security
provided by depository banks. After consideration of the applicable
laws pertaining to the specific water district, did the depository bank
provide adequate security of the correct type? es 'N o
Please indicate for each depository:
A. (1) The name of the depository bank Ba~shore National Bank
(2) Amount of FDIC coverage (if member bank) ~ 100 000
(3) Amount of bond or other security pledged as of the end of the fiscal year
2
(4) Largest cash balance $1 388 926
(5) Date of largest cash balance Qctober 1989 --
(6) The amount of bond or security pledged at the time of the largest cash balance
(excluding FDIC coverage) $2 500 000
See accompanyir-g letter dated December 21, 1990.
(Continued)
• •
4
LA PORTE AREA WATER AUTHORIY
- - f!,~~~ - - -
Questionnaire Completed by the Auditors ~~ ~- • • -• ..- ' ~ ,~'
9. The water district's taxes were collected by an employee of the district
10. Was the tax assessor-collector bonded as required by law?
1 L What was:
a. The tax assessor-collector bonded for?
b. The greatest amount of the district's taxes in the tax assessor-
collector'spossession at any one time?
c. The frequency of tax receipts deposits with the bonded
depository? (check one)
(1) Daily
(2) Weekly
(3) Monthly
12. We (check one):
a. Actually examined the records of the tax assessor-collector.
b . Received written confirmation for tax data from the tax
assessor-collector.
c. Accepted tax data furnished by the district's administrative offices.
13. Were local tax revenues (including delinquent taxes, and interest and
penalties on taxes) properly separated for debt service?
N/A
Yes No
N/A
Yes No
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Yes No
14. Was the water district in compliance with applicable bond resolutions,
with the general or special legislation under which the district was
created and with the specific statutes excerpted and included in the
Legal Compliance Guidelines in Section 70-03-1 of--the Water
District Accounting Manual? -
Yes No
* Nothing came to our attention during the course of our examination
which indicated that the resolutions and laws were not being observed.
See accompanying letter dated December 21, 1990.
(Continued)
•
5
LA PORTE AREA ~'VATER AUTHORIY
Questionnaire Completed by the Auditors ~ _ , r, , . ; ,
15. Full and complete explanations and/or references to notes, schedules
(or comments in the Audit Report Letter for responses marked (*).
Our accompanying letter dated DATE OF L.ET"~ER_ is an integral part of our
responses in this questionnaire and must be read in connection with it.
See accompanying letter dated December 21, 1990.
CERTIFICATE OF THE BOARD OF DIRECTORS
La Porte Area Water Authority Harris
Name of Water District County
We, the undersigned, do hereby certify that the audit report of the above named Water District for
the fiscal year ended September 30, 1990 and 1989 was received by the Board of Directors on the
th day of and was reviewed and X approved disapproved;
at a meeting of the Board of Directors of the Water District on the th day of
Signature of Board Secretary
Signature of Board President
~~dlll~ 1
LA PORTE AREA WATER AUTHORTTY
Long-term Debt Service Requirements by Years
September 30,1990
Series 1988 _ Series II 1988
Due during Interest due
fiscal years Principal due December 1,
in December 1. ,jgne ] .
1991 8 - 336,018
1992 80,000 334,037
1993 85,000 329,869
1994 90,000 325,272
1995 95,000 320,229
1996 105,000 314,574
1997 110,000 308,282
1998 120,000 301,350
1999 125,000 293,784
2000 135,000 285,557
2001 145,000 276,525
2002 155,000 266,697
2003 165,000 256,055
7004 180,000 244,408
2005 190,000 231,780
2006 205,000 218,200
2007 220,000 203,483
2008 235,000 187,671
2009 250,000 170,818
2010 265,000 152,921
2011 285,000 133,738
2012 305,000 113,087
2013 330,000 90,862
2014 350,000 66,975
2015 375,000 41,419
2016 400,000 14,100
2017 - -
5 5,000,000 5,817,711
Total annual
requirements
la 1 series
Interest due
Principal due December 1,
Total December 1. June 1. ~41~1
336,018
414,037
414,869
415,272
415,229
419,574
a 18,282
421,350
418,784
420,557
421,525
421,697
421,055
424,408
421,780
423,200
423,483
422,671
420,818
417,921
418,738
418,087
420,862
416,975
416,419
414,100
10,817,711
75,000
80,000
85,000
95,000
100,000
105,000
115>000
120,000
130,000
140>000
150,000
160,000
170,000
185,000
195,000
210,000
225,000
240,000
255,000
275,000
295,000
315,000
335,000
360,000
385,000
4,soo,ooo
325,138
325,138
323,206
319,135
314,636
309,546
303,840
297,663
290,866
283,432
275,368
266,522
256,877
246,413
235,150
222,945
209,786
195,713
180,596
164,438
147,172
128,622
108,672
x7,244
64,331
39,833
13,571
5,935,853
661,156
739,175
813,075
814,407
814,865
x24,120
622,122
824,013
824,650
823,989
826,893
828,219
827,932
830,821
826,930
831,145
828,269
828,384
826,414
822,359
820,910
821,709
824,534
819>219
815,750
813,933
398,571
21,553,564
325,138
325,138
398,206
399,135
399,636
404,546
403,840
402,663
405,866
403,432
405>368
406,522
406,877
406,413
405,150
407,945
404,786
405,713
405,596
404,438
402,172
403,622
403,672
402,244
399,331
399,833
398,571
10,735,853
CJ
ch ule 2
LA PORTE AREA WATER AUTHORITY , k ~ ~ , r ~ ~ ~, ,_
Analysis of Changes in Long-term Debt `'V`~~; J~,~~-~!'~ ` ~'~-_ ' ,-_ . _~
.. ~ .:
September 30, 1990
Interest rate
Dates interest payable
Maturity dates
Bonds outstanding at beginning of year
Bonds sold during the year
Retirements -principal
Bonds outstanding at end of year
Retirements -interest
Bond
ri 1 issues
Series II 1988
4.95% - 7.05% 5.15% - 7.05%
6/1-12/1 6/1-12/1
12/1/91-12/1/15 12/1/92-12/1/16
$5,000,000
54,800,000
5,000,000
336,018
Paying agent's name and address:
Series 1988 First City National Bank of Houston
and Series II 1988 P.O. Box 809
Account X18226 Houston, TX 7 1001
4,800,000
325,138
• ch u]
LA PORTE AREA WATER AUTHORITY"~ ; ~ ~_ ? ~ . ; : , : _ ~ •.
Schedule of Temporary Investments - ` - ~ - -
September 30, 1990
Identification
Depositor number
Federal Reserve Bank -
Houston:
U.S. Treasury Bills 912794VF18
Pooled investments -
oversight unit -
Accrued
interest
Balance receivable
Interest Maturity Sept 99er 30, Sept 990r 30,
dam
6.99 10/18/90 1,668,287
._ - 500.598
X2,168,885
9.143
9,143
Schedule 4
LA PORTE AREA WATER AUTHORITY
Insurance Coverage
September 30,1990
• Type of Policy clause
From T~ Amount of coveraee Phic~number In u r corooration coinsurance
T y,n of insurance
Public official bond March 1,1990 March 1,1991 $5,000 -director 10083-88-8 andtGuartanty Coelity Stock No
Public official bond March 1,1990 March 1,1991 $5,000 -director 10111-86 ~atGd~Sut~ey Codelity Stock No
Public official bond March 1,1990 March 1,1991 $5,000 -director 10110-86 and GuaSrtan y Codelity Stock No
Public official bond March 1,1990 March 1,1991 $5,000 -director 10084-88-4 andtGuasranty Coelity Stock No
~~
:,;
_~
~, r
c
v:
~n
o Z
D
c ~
-~ ~
~~
C ~
TI
~c -~
~ ~
Schedule
LA PORTE AREA WATER AUTHORITY
Board Members, Key Personnel and Consultants
September 30, 1990 ._
. e ~ ~ ~
Complete authority mailing address: P.O. Box 1115
La Pone, Texas 77 571
District business telephone number: (713) 471-5020
Term of
office elected
and expires Fees and salaries
year ended Title at Resident
Name and address or date hired ~e.~ember 30. 1990 year-end of district
Board Members:
Jerry Brainlett October 1990 None President Yes
718 South Kansas September 1991
La Porte, TX 77571
Vacant* August 1989 None Secretary/ Yes
September 1990 Treasurer
Vacant*
August 1987
September 1989
None
Vice President Yes
Mike Wadsworth October 1990
10347 Shellrock September 1991
La Porte, TX 77571
Kev Administrative Personnel:
None
Director Yes
Robert Herrera ~ Salary paid General Yes
9723 Stonemont by City of Manager
La Pone, TX 77571 La Porte
* Mr. Graves & Mr. Matthews resigned during the year. Their replacements have been
appointed by the cities but they have not been sworn in as of yet. Theca replacements are Al
Fields and Robert Blackwell. (Continued)
Schedule 5. Cont.
LA PORTE AREA WATER AUTHORITY
Board Members, Key Personnel and Consultants,_ __
Terns of
office elected Fees and salaries
and expires year ended Title at Resident
Name and address or date hired September 30. 1990 year-end_ of istrict
Consultants:
Espey/Huston Engineers, Inc. IvT/A 574,730 Engineers N/A
888 West Belt Dnve South
Suite 200
Houston, TX 77042
KPMG Peat Marwick N/A 4,500 Auditors N/A
1 Corporate Plaza
2525 Bay Area Blvd.
Houston, TX 77058
Attorneys:
John Armstrong N/A 808 Attorneys N/A
Askins & Armsvong, P.C.
Attorneys at Law
702 W. Fairmont Parkway
La Porte, TX 77572
Baker & Botts N/A - Attorneys N/A
910 Louisiana
One Shell Plaza
Houston, TX 77002
Moroney Beissner & Co. N/A - Financial N/A
Suite 1865, Post Oak Central consultant s
2000 Post Oak Boulevard
Houston, TX 77056