HomeMy WebLinkAbout12-07-1993 Meeting
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LA FORTE AREA WATER AIITHORITY
MINOTEB
DECEMBER 7, 1993
1. The meeting was called to order at 6:35 P.M. by President Jerry
Bramlett.
MEMBERS PRESENT: President Jerry Bramlett,
Secretary/Treasurer Albert Fields, Member James Sweeton, and
Vice President Rodney J. Etchberger.
MEMBERS ABSENT: None
OTHERS PRESENT: Robert T. Herrera, General Manager, John Joerns,
Assistant City Manager, Jeff Litchfield, Director of Finance,
Steve Gillett, Director of Public Works, Chris Breaux of Null &
Associates, Roger Hulbert and Randy Hatfield of City of Houston,
Bob Plaumann, Mayor of Shoreacres and Roger Moreno, City of
Shoreacres.
2. Minutes from the regular meeting held September 14, 1993 were
read. Motion made by Member James Sweeton to accept as read and
seconded by Secretary/Treasurer Albert Fields. Motion was
unanimous.
3. President Jerry Bramlett administered the Oath of Office to
Member Rodney J. Etchberger.
4. Motion made by Secretary/Treasurer Albert Fields and seconded by
Member Rodney J. Etchberger to approve the "catch-up" payment
through September 30, 1993, to the City of Houston in the amount
of $23,937.65. Motion was unanimous.
5. General Manager, Robert T. Herrera introduced Director of
Finance, Jeff Litchfield, who discussed the Annual Financial
Report for the LPAWA. Mr. Litchfield introduced Mr. Chris Breaux
of Null & Associates, who discussed the Audit conducted by the
firm, and stated that the financial statements are in conformance
with general accounting principals.
Motion made by Secretary/Treasurer, Albert Fields, seconded by
Member, Rodney Etchberger, to approve the 1992-93 LPAWA Financial
Report. Motion was unanimous.
6. Director of Finance, Jeff Litchfield, discussed the balance in
the Phase I Bonds as compared to the projected completion cost of
the SEWPP. The funds from Phase II, which has been completed,
are adequate to fund the completion of Phase I. Copies of both
audits were distributed to the Board Members.
LA PORTE AREA
BOARD MEETING
PAGE 2
WATER AU~ORITY •
MINUTES
7. General Manager, Robert T. Herrera, introduced Mr. Roger Hulbert
and Randy Hatfield of the City of Houston. Mr. Hulbert discussed
the proposed interim expansion and answered questions regarding
the expansion.
8. Assistant City Manager, John Joerns, discussed the projections of
potable use. He projected water usage based on 1$ and 2~ growth.
9. There being no further business, motion made by James Sweeton and
seconded by Rodney Etchberger to adjourn. Motion unanimous.
Meeting adjourned at 8:10 P.M.
Al Fields, Secretary-Treasurer
PASSED AND APPROVED:
ON THIS DAY ~~~ ~ 9 , 19~
Jerry Bramlett. President
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LA PORTE AREA WATER AUTHORITY
INTER-OFFICE MEMORANDUM
T0: Robert T. Herrera, General Manager
Board of Directors
Steve Gillett, Director of Public Works
FROM: ,~ eff Litchfield, Director of Finance
DATE: (/'" November 29, 1993
SUBJECT: Fiscal Year 1993 Results of Operations
Attached is an unaudited draft of the financial statements for the Authority
for the period ended September 30, 1993. The audited statements should be
ready for the December 7, 1993 meeting. All number references in this letter
relate to the unaudited statements and will need to be adjusted for any
changes recommended by the Authority's auditors.
The La Porte Area Water Authority (Authority) ended the year with working
capital of $1,849,529. They also had physical facilities with a net value of
$9,118,324, contributed capital of $839,249 and retained earnings of $738,604.
The activity during the year consisted of water billings to participants of
$642,729, billings for debt service of $824,998 and $126,883 in interest
income. The billings for debt service were first applied to offset the
requirements of debt service in the amount of $650,111 and the remaining
$174,887, which represents billings for the reserve and contingency funds, was
applied as contributions from participants.
Expenses incurred by the Authority can be broken down as follows:
• $ 15 in supplies
• 534,856 in payments to Houston for water received
• 12,669 in telephone expense
• 3,000 in Audit Costs
• 40,000 in payments to the City of La Porte for management functions
• 300 in insurance
• 2,110 in other services and charges
Depreciation expense of $295,395 was charged to contributed capital. This was
done because all of the assets were purchased with borrowed funds that were
backed by the three participants. If the Authority ever purchases assets out
of operating funds, we will charge a certain portion of the depreciation to
retained earnings.
During the year, the Authority made principal retirement payments in the
amount of $160,000 which leaves $9,560,000 outstanding.
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Now that we have reviewed the balance sheet and profit and loss statement
items, I would like to go behind the numbers and discuss the actual mechanics
of the Authority.
The Authority is comprised of four major functions with each owning its
respective share of the assets and assuming its share of the liabilities. The
four functions and their share of the working capital is:
Function
Operations
Debt Service
Phase I Bond Funds
Phase II Bond Funds
(Purification Plant)
(Transmission Lines)
Total Working Capital
Working Capital
at 9/30/93
$ 1,097,629
123,755
131,370
496,775
$ 1,849,529
Operations is the primary function. The day to day operations are accounted
for in this fund, as well as amounts that have to be established for legal
compliance with the bond resolutions. The amounts that have been established
and collected for the Reserve and Contingency amounts for the two issues total
$877,069. When this amount is subtracted from the total of $1,097,629, it
leaves a true operating working capital balance of $220,560, which represents
an increase of $107,622 over the September 30, 1992 balance.
The Debt Service function has a working capital balance of $123,755. From a
cash standpoint, the function actually has $509,856; however, we have
subtracted accrued interest payable at September 30, 1993 and the amount of
principal retirements that will be made in fiscal year 1993 to calculate its
working capital balance. This function will continue to collect funds each
month in order to make principal and interest payments of $814,408 during the
year.
The balance in the Purification Project function, representing Phase I funds,
is $131,370 at year end. I have provided an internally prepared document that
shows the inception to date activity for this project and have attached it to
this memorandum.
The balance in the Transmission Project function, representing Phase II funds,
is $496,775 at year end. I have also provided a report for this project.
In summary, the Authority is in compliance with all financial legal
requirements and has sufficient operating funds to successfully go about their
day to day operations.
For the Future
The Transmission Project has been complete for some time. The Purification
Project is still under construction.
Included elsewhere in this agenda is a report prepared by the CPA firm of
Coopers & Lybrand which outlines costs for the Purification Project from
inception to March 31, 1992 and projected costs for April 1, 1992 through
completion.
The report includes a schedule titled "Schedule of Participants' share of
Forecasted Construction Costs" and is located on page five of the report. It
indicates that the Authority can expect additional project costs of $390,183
for the period April 1, 1992 through final completion.
The Authority has paid $129,253 for the project during the period April 1,
1992 through September 30, 1993, leaving a remaining estimated exposure of
$260,930.
This remaining exposure amount of $260,930 is $129,560 greater than the amount
remaining for the project of $131,370. Fortunately, the Authority can
utilize the funds that are left over ($496,775) from the transmission project
to fund the completion of the plant. Section 4.02. of the Bond Covenant for
the Transmission issue includes a statement that declares that any funds
remaining after the completion of the transmission project can be used for
"the purchase price of an undivided interest in the Southeast Plant.".
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Statement of Project Cost
La Porte Area Water Authority
Texas Water Development Board Loan # 939
Design and Construction Phase
Water System Improvements
Water Purification Plant Protect
For the period inception through September 30, 1993
Construction
Purchase of Water Purification Plant $ 4,552,571
Leal. Fiscal &_Administrative
Bond Counsel (Baker ~ Botts)
Financial Advisers (Moroney,
Administrative (fiscal fees,
Texas Water Commission Appli
Reserve Fund
Capitalized Interest
103,428
Beissner ~ Co. Inc) 43,000
postage, etc) 7,651
cation Fee 12,500
63,366
348.150
Total Project Cost $ 5,130,666
* - included in this amount is $103,300 used to pay for the construction of an
internal transmission line at the water purification plant
Statement of Project Status
La Porte Area Water Authority
Texas Water Development Board Loan # 939
Design and Construction Phase
Water System Improvements
Water Purification Plant Protect
For the period inception through September, 30, 1993
Source of Funds
TWDB Loan Proceeds (3-31-89) $ 5,000,000
Interest Earnings on Construction Fund 262.036
(3-31-89 to 9-30-93)
Total Sources of Funds 5,262,036
Total Project Costs 5.130.666
Current Accounting Surplus $ 131,370
Statement of Project Cost
La Porte Area Water Authority
Texas Water Development Board Loan # 939
Design and Construction Phase
Water System Improvements
Surface Water Suvvly Transmission Facilities Project
For the period inception through September 30, 1993
Construction
Surface Water Supply Transmission Facilities $ 3,249,017
Land
Property and R.O.W. Acquisition 35,837
Engineering & Related Services
Espey, Huston & Associates 458,814
Legal. Fiscal & Administrative
Bond Counsel (Baker & Botts) 97,716
Financial Advisers (Moroney, Beissner & Co. Inc) 42,000
Administrative (fiscal fees, Authority's legal counsel, etc) 15,562
Interest Expense on pre-funding loan (Bayshore Natl. Bank) 31,443
Capitalized Interest 651.000
Total Project Cost $ 4,581,389
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Statement of Project Status
La Porte Area Water Authority
Texas Water Development Board Loan # 939
Design and Construction Phase
Water System Improvements
Surface Water Suvvly Transmission Facilities Proiect
For the period inception through September 30, 1993
Source of Funds
TWDB Loan Proceeds (3-31-89) $ 4,800,000
Interest Earnings on Construction Fund 278.164
(3-31-89 to 9-30-93)
Total Sources of Funds 5,078,164
Total Project Costs 4.581.389
Current Accounting Surplus $ 496,775