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HomeMy WebLinkAboutFY Ended September 30, 1978TABLE OF CONTENTS Auditor's Opinion Balance Sheet - All Funds Statement of Revenues, Expenses and Fund Balances - All Funds Statement of Changes in Financial Position - All Funds General Long-term Debt Service Requirements - by Years Analysis of Changes in General Long-term Debt Schedule of Temporary Investments Analysis of Taxes Receivable Analysis of Organizational Costs Analysis of Changes in General Fixed Assets Notes to Financial Statements Supplementary Information: Certificate of Board of Directors Questionnaire to be Completed by Auditor Insurance Coverage Schedule Number Page - 1 Board Members, Key Administrative Personnel and Legal Counsel 2200 FORT WORT14 NAT.L.SANI< BLOC FORT WORTIH. TEXAS 76102 Board of Directors Denton County Municipal Utility District No. 1 Denton County, Texas We have examined the balance sheets of all funds of Denton County Municipal Utility District No. 1 as of March 31, 1978, all funds' related statements of revenues, expenses and fund balances and changes in financial position for the year then ended and the related exhibit and schedules (Exhibit D and Schedules A-1 through A-5). Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The District is in the developmental stage and construction of the fixed assets is not complete at the balance sheet date. In accordance with the suggestions of the Texas Water Rights Commis- sion, the District did not depreciate its general fixed assets. We observed no departures by the District from the recluirements of the bond orders or from applicable laws and regulations. In our opinion, the accompanying financial statements examined by us present fairly the financial position of the Denton County Municipal Utility Dis-trict No. 1 for all funds as of March 31, 1978 and the results of its operations and the changes in financial posi- tion for the year then ended, and in our opinion, Exhibit D and Schedules A-l through A-5 present fairly the information stated therein, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Our examination has been made primarily for the purpose of expres- sing an opinion on the financial statements, taken as a whole. The accompanying supplementary information is presented for analysis purposes and is not necessary for a fair presentation of the financial information referred to in the preceding paragraph. It has been subjected to the tests and other auditing procedures applied in the examination of the financial statements mentioned above and, in our opinion, is fairly stated in all respects material in relation to the financial statements taken as a whole. May 26, 1978 CXIIIBIT A DENTON COUNTY hlUNICIPAL UTILITY DISTRICT NO. 1 BALANCE SIIEET - ALL FUNDS As of hlarch 31, 1978 General General hlernorandum Long-term Fixed Total Debt Fund Asset Fund COnStPUctlo" Fund Debt Service Tax Fund Fund -- ASSETS Current Assets Cash - Unrestricted Cash Restrict~d Cash Total Casll Restricted Tcrnporory Investments Total Cusb and Tcn~porhry Investments - Schedule A-2 Accounts Receivnbie nnd Accrued Revenue - Schedule A-3 (Tax Fund) Totnl Current Assets Genernl Fixed Assets (rt Cost) - Schedulc A-5 Intangible and Other Assets - Notes 3 and 4; Schedule A-4 Provision ior Bondcd Dcbt Totnl Assets LIABILITIES AND FUND BALANCES Current Linbiliries Accounts Payable nnd Accrued Expenses Refundable Deposits Totnl Current Linbilities Bonded Debt Payable - Schedule A-1 and Exhibit D; Noie 7 Total Liabilities Fund Balances Unnllocntcd Fund Balances Investment in Uncollecred Tokes Allocnted Irom Sale of Bands for cO"StTU~ti0" Allocnted from Snle 01 Bonds Contrlbutcd by Developer Total Fund Balances Totcl Liabilities and Fund Bnlcnces -2- EXllIBIT B DENTON COUNTY hlUNICIPAL UTILITY DISTRICT NO. 1 STATEMENT OF REVENUES, EXPENSES AND FUND BALANCES - ALL FUNDS For the year cnded Unrcb 31, 1978 Total - General Operating Fund General Debt General hleinornndum pired Consrruction Service Tax Operating Wiitcr Sewer Total Asset Fund Fund Fund Fund - - Service SerViCC 0th~~ Fund Operating Revenues Service Revenues - Note 8 Tap Connection Revenues Tax Revenues - Schedule A-3 Penalty Rcveiluc Total Operoting Reverlucs Less: Opernting Expenses: Contract Labor hlointenance and Rcpvirs hleter Expense Tnp Connection Expense Pr~feSSional Fees Service Account C~llecTion Bookkeeping Utilities Recurring Operating Expenses Tax Assessor-Collectar Totnl Operaring Erpcnscs Net Income (Loss) from Operations Add: Non-Operating Revenues: ~nterest on Temporary Inveslrnenrs hliscellnncous Revenucs Total Non-Operating Revenues ~ct Income (Lass) Bciore Non-Operating Elpcnses Less: Non-Opcmting Elpenscs: Debt Scrvice Expense Totol Non-Operating Expenses Net Income (Loss) - Note 5 Addirlons to Fund Balances Investment in Uncollected Taxes Trnnsierred from Tax Fund Transferred from Debt Service Fund Total Addltxons to Fund Balances -3- DENTON COUNTY hlUNICIPdL UTILITY DISTRICT NO. 1 STATEMENT OF REVENUES, EXPENSES AND FUND BALANCES - ALL FUNDS or the ycur ended hlorcii 31, 1978 (Continued) Total - General Debt General hlemornndum Pixed Consrruction Service Tox Operating Totnl Asset Fund Fund - Fund - Funrl Fund Deductions iroln Fund Balances Trunsierred to Debt Service Fxind 5 121,000 :5 $ $ $121,000 li Trnnsierred to General Fixed Asset Fund 139.719 -- 139.718 -. - Totnl Deduclions irom Fund Balance p 260.719 .$ 5 $139.719 $121.000 Net Cl~nnge in Fund Bnlance ior tile Year 1 137,287 5 138,719 $ $ (5,018) $ 11,115 5(8.558) - Fund Balances at April 1, 1877 $1,803,871 51,483,646 6 $307,402 S 10.328 Fund Balnnces at March 31. 1978 51 ,941,158 -- :El ,623,365 :=- s 6 S302 38% !?-21 . 473 SE2a) -4- See accompanying notes. EXIIIBIT C OENTON COUNTY hlUNICIPAL UTILITY DISTRICT NO. 1 STATUIENT OF CNANGES IN FINANCIAL POSITION - ALL FUNDS For the ycar cndod March 31. 1978 Debt General Memornndum Canstruction Service Tas Ogercting Total Fund - Fund - Fund Fond Sources of Ca.511 Cash Receipts from Operations Casb Dishurscments :or Onsrations: Cantrnct labor hlctcr Expense Tap Cannecrion Espcnse Profe~sional FCCS Service Account Collection Boolilreenin~ uti~itiEs Recurring Opcroring Expenses Tar Assessor-Col 1cc tor Debt Service Expense Totzll Cash Disbursements for Oper'ztions Net Cash iron, Onerntions Cnsh Transfers >ram OLbcr Funds ToLul Cash Pravlded Qplication of Cnsh Purchase of District Orgnnizntional Costs (Asser Transferred to General Fixed Asset Fund) Casb Trnnsfcrs to Other Funds 'Total Cush Applied Increase (Decrease) in Cnsh CRS~ and Temparnry Investment B~lance at April 1. 1977 Cnsb and Temporary Invesrmcnt Balance at March 31, 1978 -5- See accompanying notes Due During Fiscal Years Ending DENTON COUNTY MUNICIPAL UTILITY DISTRICT NO. 1 GENERAL LONG-TERM DEBT SERVICE REQUIREhlENTS - BY YEARS As of March 31, 1978 Totals Principal Due (March 1) Series 1976 Interest Due (March 1 and September 1) Cash and Temporary Investments Balances at March 31, 1978 Tax Fund $ 5,478 Debt Service Fund 248,930 Total Annual Requirements Total mmr 000 CCC mmm $ SO+ mom < 3 1 m l~ =rI' c a 0 OF11 r+ F m rm rrm in m C U1 r 'T mtim *Pr mx m K C Id La m 1; I, ib rn w Is U? w 1: COY It i. SCHEDULE A-2 DENTON COUNTY MUNICIPAL UTILITY DISTRICT NO. 1 SCHEDULE OF TEMPORARY INVESTMENTS For the year ended March 31, 1978 Accrued Identification Interest o r Receivable Certificate Interest Maturity Balances at at End Funds Number Rate - - Date End of Year of Year - -- Debt Service Fund - Certifi- cate of Deposit 27963 Certifi- cate of Deposit 30730 Certifi- cate of Deposit 30729 Certifi- cate of Deposit 30728 Certifi- cate of Deposit 32424 Certifi- cate of Deposit 33972 Total - All Funds SCHEDULE A-3 DENTON COUNTY MUNICIPAL UTILITY DISTRICT NO. 1 ANALYSIS OF TAXES RECEIVABLE As at March 31, 1978 Taxes Receivable at Beginning of Year 1977 Year-Or iginal Tax Roll Less: Abatements to Original Tax Roll Adjusted Tax Roll Total -to be Accounted For Less: Collections: Current Year Prior Years' Taxes Taxes Receivable at End of Year Taxes Receivable by Years 1976 1977 Assessed Valuation Summary Property Valuations: Land $12,515,967 Improvements 1,700,840 Total Valuations $14,216,807 Tax Rate Per $100 Valuation $0.95 Tax Year: From: January 1, 1977 to December 31, 1977 Percent of the assessed valuation to fair market value 100.0% Percent of current taxes collected to current taxes levied 89.6% Percent of current and delinquent taxes collected to current and delinquent taxes outstanding at the beginning of the tax year 88.8% SCHEDULE A-4 DENTON COUNTY MUNICIPAL UTILITY DISTRICT NO. 1 ANALYSIS OF ORGANIZATIONAL COSTS For the year ended March 31, 1978 Organizational Costs - Creation Period Engineering and Surveys Filing Fees, Licenses, Legal Notices, and Permits Legal Fees Director Fees and Per Diem Other Costs Total Organizational Costs - Creation Period Organizational Costs - Construction Period- Legal Fees - Financial Consulting Fees Operating Expenses Bond Interest Expense Amortized Bond Discount Total Organizational Costs - Construction Period Total Organizational Costs Amounts Provided: For District Organizational Costs - Creation Period by Construction Fund For District Organizational Costs - Construction Period By Construction Fund By Debt Service Fund Total District Organiza- tional Costs - Construction Period Total Provided Balances at Beginning of Year Balances Addit ions at End (Decreases) of Year -- SCHEDULE 8-5 DENTON COUNTY MUNICIPAL UTILITY DISTRICT NO. 1 ANALYSIS OF CHANGES IN GENERAL FIXED ASSETS For the year ended March 31, 1978 Land Water System Sewage System Drainage System Engineering Fees Totals Additions Provided By: Construction Fund Contributions by Developers Total Balances at Beginning of Year $ 23,675 380,839 429,730 315,198 128,171 $1,277.613 Balances at End Additions (Deletions) of Year DENTON COUNTY MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO FINANCIAL STATEMENTS March 31. 1978 Note 1: Creation of District - Denton County Municipal Utility District No. 1 was created by an order of the Texas Water Rights Comnission on March 4, 1975 and confirmed by the electorate of Denton County Municipal Utility District No. 1 at a confirmation election held on October 7, 1975. The Board of Directors held its first meeting on April 24, 1975, and the first bonds were sold on June 8, 1976. Note 2: Basis of Accounting - The exhibits and supporting schedules contained in this report were prepared on the accrual basis of accounting except for the statement of changes in finan- cial position--all funds, which is a cash basis statement. Furthermore, tax revenues, purchases of supplies for inven- tory and bond interest are not accrued and the amounts shown for these items reflect cash basis accounting treat- ment. Note 3: Bond Interest - In accordance with the bond resolution dated October 29, 1975, a portion 01 the bond proceeds was deposited into the Debt Service Fund for the payment 01 bond interest during the construction period. This bond interest has been capitalized as an organizational cost for the construction period. DENTON COUNTY MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO FINANCIAL STATEMENTS March 31, 1978 Note 4: Organizational Costs - The District, in conformance with requirements of the Texas Water Rights Commission, capi- talizes and charges to organization costs for the creation period, all costs incurred in the creation of the District allowed by statute. The Texas Water Rights Commission also requires capitalization as organizational costs for the construction period all costs incurred in the issue and sale of bonds, bond interest and amortized bond pre- mium and discount, losses on sales of investments, accrued interest on investments purchased, attorney fees and some administrative expenses until construction and acceptance or use of the first revenue producing facility has occurred. As the District purchased i-ts facilities already completed by the developer, only those costs being funded by bond proceeds are being capitalized, Note 5: Pledge of Revenues - The bonds are payable from the proceeds of an ad valorem tax levied upon all property subject to taxation within the District, without limitation as to rate or amount, and are further payable from and secured by a lien on and pledge of the net revenues to be received from the operation of the District's waterworks and sanitary sewer system. -13- DENTON COUNTY MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO FINANCIAL STATEMENTS March 31, 1978 Note 6: Compliance with Debt Service Requirements - The provisions of the bond resolution relating to debt service requirements have been met and the cash allocated for these purposes is sufficient to meet debt service requirements for the fiscal year ending March 31, 1979. The ability of the District to meet future debt service requirements depends primarily on successful collection of taxes levied against property with- in the District and operations of the waterworks and sanitary sewer system. Note 7: Redemption of Bonds - The outstanding bonds of Denton County Municipal Utility District No. 1 are callable for redemption prior to maturity at the option of the District. The bonds may be called in whole or in part for the purpose of retire- ment or refunding, or both, at par in addition to unpaid accrued interest. DENTON COUNTY MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO FINANCIAL STATmlENTS March 31, 1978 Note 8: Water and Sewer Service Rates - The Denton County Municipal Utility District No. 1 has established the following water and sewer service rates whicb became effective as of April Tap Fee Sewer Inspection Fee $ 15.00 Water Service Only Treated Water - First 8,000 gallons of water used - minimum bill Each 1,000 gallons of water used thereafter Untreated Water - First 8.000 gallons of water used - minimbm biil Each 1,000 gallons of water used thereafter to 15,000 gallons of water used Each 1,000 gallons of water used thereafter Standby Fee Per Month Sewer Charge Per Month SUPPLEMENTARY INFORMATION CERTIFICATE OF THE BOARD OF DIRECTORS Denton County Municipal Utility District No. 1 Name of Water District We, the undersigned, do hereby certify that the audit report of the above named Water District for the fiscal year ended March 31, 1978 was received by the Board of Directors on the 1978 and was reviewed and appproved disapproved at a meeting of the Board of Directors of the Water District on the , 1978. ~ignatur'e of Board President Signature of Board Secretary Page 1 of 6 - - QUESTIONNAIRE TO BE COMPLETED BY AUDITOR FOR THE YEAR ENDED MARCH 31, 1978 Denton County Municipal Utility District No. 1 Name of Water District 1. At the time that you (your firm) were engaged by the Board of Directors of the above-named water district to perform this audi-t, was a copy of the Water District Accounting Manual made available to you? Denton County X -- Yes No 2. The Water District Accounting Manual prescribes account- ing principles 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 on the basis of full accrual accounting except for the specific revenue and expense items required to be maintained on the cash basis by the Water District Accounting Manual? c. Maintain the double entry system of accounting? d. Keep a general ledger in accordance with the uniform classification of general ledger accoun.ts prescribed in Water District Accounting Manual? e. Adhere to other provisions of Water District Accounting Manual? 3. Did the Board of Directors of the wa.-ter district impose on you (your firm) any audit requirements in addition to those minimum audit requirements of the Water District Accounti-ng Manual? x -- Yes No X -- Yes No X -- Yes No X -- Yes No S -- Yes No Page - 2 of - 6 QUESTIONNAIRE TO BE COMPLETED BY AUDITOR FOR THE YEAR ENDED MARCH 31, 1978 (Continued) 4. Did you identify, during the course of your examination of the financial statements of the water district, any areas pertaining to accounting matters in which action should be talcen by the Board of Directors of the water disrict? x -- Yes No 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 for your examination? x -- Yes No 6. Did the water district: a. Use the construction fund, tax 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 resolu- tions? b. Properly segregate and maintain the required amount of cash escrowed by the Texas Water Rights Commission or disburse the escromed cash according to the terms prescribed by the Texas Water Rights Commission? c. Do business only with firms or corporations in which members of the Board of Directors had no pecuniary interest? d. Observe the conditions for obtaining grants, gifts, etc., or observe agreements with governmental agencies for the purpose of securing funds or services? X -- Yes No x -- Yes No X -- Yes No (1) -- Yes No NOTE: See Page 6 of 6 for explanation of references (1) - (5) -1.8- Page - 3 of - 6 QUESTIONNAIRE TO BE COMPLETED BY AUDITOR FOR THE YEAR ENDED MARCH 31, 1978 (Continued) 6. Did the water district: (continued) e. Have a contract for Social Security coverage for its employees with the Texas Department of Public Welfare, Social Security Division? f. Make remittances of Social Security taxes according to the terms of the contract for Social Security coverage with the Social Security Division of the Texas Department of Public Welfare? g. Deposit receipts to the proper funds kept by the approved dep0~itOry banlr? h. Draw checks only on funds approved by the Board of Directors and signed by authorized personnel? 7. Do you issue a management letter to administrative officials of the water district at least annually which sets forth your comments (based on matters which came to your attention during your examina- tion) for strengthening internal accounting controls procedures? If Yes is checlied for question 7: (See Question 15) a. Were your recommendations explained to and discussed with administrative officials of the water district? (2) -- Yes No (2 j -- Yes No X -- Yes No X -- Yes No X -- Yes No x -- Yes No b. The date of your most recent management letter was July 22, 1977. Page - 4 of - 6 QUESTIONNAIRE TO BE COMPLETED BY AUDITOR FOR THE YEAR ENDED MARCH 31, 1978 (Continued) 7. (continued) c. Is there evidence indicating that your previous year(sj recommendations have been or are being implemented? x -- Yes No cl. Has a copy of the management letter been filed with the Texas Water Rights Commission x -- Yes No 8. The Texas Water Code makes specific provisions relating to security provided by depository banks. After consideration of the applicable laws pertain- ing to the specific water district, did the depository bank provide adequate security of the correct type? X -- Yes No Please indicate for each depository: (5) a. The name of the depository bank - First National Bank, Fort Worth; b. Amount of F.D. I.C. coverage (if member bank) $40,000 ; c. Amount of bond or other security pledged as of the end of the fiscal year $492,265; d. Largest cash balance $ (4) ; e. Date of largest cash balance (4) ; f. The amount of bond or security pledged at the time of the largest cash balance (excluding F.D.I.C. coverage) $ (4) 9. The water district's taxes were collected by (check one): a. An employee of the district b. The county tax assessor-collector Page - 5 of - 6 QUESTIONNAIRE TO BE COMPLETED BY AUDITOR FOR THE YEAR ENDED MARCH 31, 1978 (Continued) 9. (continued) c. A city or other tax assessor-collector d. More than one of the above 10. Was the tax assessor-collector bonded as required by law? 11. What was: a. The tax assessor-collector bonded for? b. The greatest amount of the district's taxes in the tax assessor-collector's possession at any one time? c. The frequency of tax receipts deposits with the bonded depository? (check one) (1) Daily (2) Weeltly (3) Monthly d. The percent of the assessed valuation to fair market value? 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. As a result, were local -tax 'eoenues (including delinquent taxes and interest and penalties on taxes) properly separated for debt service? X -- Yes No .I -- Yes NO Page 6 of G - - QUESTIONNAIRE TO BE COMPLETED BY AUDITOR FOR THE YEAR ENDED MARCH 31, 1978 (Continued) 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? 15. Other Cornments of the Auditor: Although issuance of a management letter is our policy, none is to he issued in the current year, as prior year recommendations were imple- mented and there have been no changes in the District's basic ODerations. (1) No intergovernmental transactions. (2) District has no employees. (3) Receipts are deposited as received into district account. (4) Based on audit review, security pledged exceeded cash and tem- porary investment balances at all times. (5) The District also maintains a tax depository account at Jetero Rank, Westfield, Texas. It is the policy of the District that deposi-ts held in the account are not to exceed F. D. I .C. coverage of $40,000. x -- Yes No 0 "3FQ "UIrnV1 mcce IiiO w PPW E~mm c r E6-v ammm "'.:.:G DENTON COUNTY hlUNICIPAL UTILITY DISTRICT NO. 1 BOARD hlEhlBERS, KEY ADMINISTRATIVE PERSONNEL AND LEGAL COUNSEL March 31. 1978 Name and Address Wesley Wayne Obermefcr 207 Oakmont Drive Ronnoke. Tesns 76262 Dennls C. Diamond 302 Inverness Ronnolic, Texas 76262 Earl W. tlortfor 1609 V~newood Fort Worth, Texas 76112 George 11. Marrow 709 T~nglcwood East Irving, Texas 75060 dimmic C. Smith 7519 Nelicrest Dallas, Texas 75230 Willis F. Brown 1200 Summit Fort IYorth, Texas Term Relationstlip with hlajar of Ofiicc Board hlembers Resldcnx knd Owners, Engineer, Elected and Annual of ATtorneY and Tar Expires Salary District7 Assessor-Collector 21- 2-77 Per Diem Yes None President 4- 7-79 Date Hired McGown, Gadfrey, Decker, Inception hlchlacirln, Shipmnn & hlcC1onc 1800 Commerce Building Fort lVorth, Tekns Kenneth R. Byrd P. 0. Box 00663 llouston. Terrs 77090 Per Diem Vicc President Yes Per Diem Secretary/ No Treasurer Per Diem Asst. Secretnryl No Treasurer Per Dieni Dircczor NO District Manager and Other Key Administrative Personnel Pees Paid $9,046 Bookkeeper, Bill- No ing and Callec- tion Agent District Le~al Counsel Fees Paid $6,783 NO District Tux Asscssor-Collector Pees Pnid $3,091 No None None Nono None None None None DENTON COUNTY hlUNICIPAL UTILITY DISTRICT NO. I BOARD hlEhlBERS . KEY ADhIINISTRATIVE PERSONNEL AND LEGAL COUNSEL March 31, 1978 Nome and Address Wesley Wayne Obermcier 207 Oalrmont Drive Roanoke, Tenas 76262 Dennis C. Oiomond 302 Inverness Roanoke. Tcrus 76262 Earl W. Horttor 1609 vinewood Fort Worth. Tcsns 76112 George H. hlorrow 709 Tnnglewood East Irving, Texas 75060 Jimmic C. Smith 7519 Bellcrest Dollas, Texas 75230 IYiliis F. Braivn 1200 Summit Port Worth, Texas McCown. Gadlrey, Decker. hlchlackin, Shipman & hfcClnne 1800 Commerce Building Fort IYOrth. TCXI~S Kenneth R. Byrd P. 0. Box 90663 ilo~ston. Texas 77090 Term Relorionship with hlojor of Office Board hleinbers Resident hnd Owners, Engineer. Elected nnd Annun1 01 Attorney and Tar Expires Salnry Title Dist~ict? ASSCSSO~-CU~IBC~O~ -1- 2-77 Per Di em President Yes None 4- 7-79 9-14-77 Pcr Diem Vice Presidenr. Yes None '1- 1-78 Dnre Hired Contract Inception Per Diem Secretary/ No Tre85urer Per Diem Asst. Secretary/ No Treasurer Per Diem DirccTor No District hlnnager and Other Key Administrctive Personnel Pees Paid $9,046 Bookkeeper. Bill- No iog and Callcc- Zion Agent District Lcgzl Counsel Pees Paid 56,783 No Districr Tax Assessor-Collector Pees Paid Contract $3,091 No NO,," None None