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HomeMy WebLinkAboutFY Ended September 30, 1993S L. BrnTON Certified Public Accountant 5017 S. Hulen, Suite 4, 817-346-8315 Fort Worth, Texas 76132 To the Board of Directors Trophy Club Municipal Utility District No. I 100 Municipal Drive Trophy Club, Texas 76262 Directors: I have examined the financial statements of Trophy Club Municipal Utility District No. I for the year ended September 30, 1993, and have issued my report thereon dated November 11, 1993. As part of my examination, I made a study and evaluation of the District's system of internal accounting control to the extent I considered necessary to evaluate the system as required by generally accepted auditing standards. The purpose of my study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessary for expressing an opinion on the District's financial statements. My study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole. The management of Trophy Club Municipal Utility District No. I is responsible for establishing and maintaining a system of internal accounting control. In fulfilling that responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of a system are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any system of internal accounting control, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with procedures may deteriorate. My study and evaluation made for the limited purpose described in the first paragraph would not necessarily disclose all material weaknesses in the system. Accordingly, I do not express an opinion on the system of internal accounting control of Trophy Club Municipal Utility District No. I taken as a whole. However, my study and evaluation disclosed the following recommendations. Trophy Club Municipal Utility District No. I Page Two Vacation Carryover Policy As you know, generally accepted accounting principles require that we quantify and accrue a liability for accrued vacation time, if material. At the present time the total amount is immaterial and no accrual has been made. I recommend that you review your policy to determine that it accurately reflects the Board's intent and addresses the possible mandatory accrual in future years. These conditions were considered in determining the nature, timing, and extent of the audit tests to be applied in my examination of the September 30, 1993, financial statements, and this report does not modify my report dated November 11, 1993, on those financial statements. This report is intended solely for the use of management and should not be used for any other purpose. November 11, 1993 TABLE OF CONTENTS Independent Auditor's Renort General Purnose Financial Statements Combined balance sheet - all fund types and account groups Combined statement of revenues, expenditures and changes in fund halances - all governmental fund types Combined statement of revenues, expenditures and changes in fund balances (budget and actual) - General Fund Notes to general purpose financial statements Su~plementarv Schedules Supplementary schedules included within this repact Schedule of services and rates Schedule of General Fund expenditures Analysis of changes in cash and temporary investments - all funds General long-term debt service requirements - by years Analysis of changes in general long-lerm debt Schedule of temporary investments Analysis of taxes receivable Analysis of organizational costs Analysis of changes in general fixed assels Schedule of notes and capital lease payable Comparative schedule of revenues and expenditures - five years Insurance coverage Board members, key administrative personnel and consultants Quesliomaire to be completed by auditor Individual General Fund account fmancial sratenients Net general fixed assets by funding source Certificate of the Board of Directors Paee - 1 JAMES L. BUXTBN Certified Public Accountant 5017 S. Hulen, Suite 4, 817-346-8315 Fort Worth, Texas 76132 INDEPENDENT AUDITOR'S REPORT Board of Directors Trophy Club Municipal Utility District No. I Trophy Club, Texas I have audited the accon~panying general purpose financial statements of Trophy Club Municipal Utility District No. I as of September 30, 1993, and for the year then ended as identified in the Table of Contents. These general purpose financial statements are the responsibility of Trophy Club Municipal Utility District No. 1's management. My responsibility is to express an opinion on these general purpose fmancial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the general purpose fmancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of Trophy Club Municipal Utility District No. 1 as of September 30, 1993, and the results of its operations for the year then ended, in conformity with accounting principles which utilize governmental fund types rather than an enterprise fund. My audit was conducted for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The supplementary schedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose fmancial statements of Trophy Club Municipal Utility District No. I. This information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in my opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. ASSETS Clirrznt assets Cash: UnrestrictuJ cash Rest]-icted cash Tot;11 cash Temporary investments, at cost: IJnrestricted Tot;~l cash and tcrnporar). investments Accounts rezciv;ible and accrued revenue, less ;~llowance for doubtful accounts of $81.067 wd $113,107 in 1993 ar~d 1992 Ad valorem property taxes receivable Prepeid expenditures Tohl currznt assets Gcner;~l fixed assets Arn~iunl available in Deht Service Fund Provision for hnnllrd debt Amount to be provided for retirement 111 grineriil long-lenn debt TROPHY CLUB MUNICIPAL UTLITY DISTRICT NO. I COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS Sentemher 30. 1993 Totals Governmen~al fund types Account rrouns (memorandom only) Debt Capital Generol General General Selvice Projects fixed long-term September 30, September 30, Fund Fund - Fund debt 1993 1992 (Continued) LIABILITIES Current liabilities - Accounts payable and accrued expenditures Refundable deposits Capital lzaszs pay;ible Notcs payahlz Detkrrzd incnmz Bc>nded dehl payshlz Total liabilities FUND EOUlTY Investmznt in general fixed assets Fund balances: Reserved for customer deposits Resewed for debt service Unrestricted ToVal fund balances Tol;tl eyiiity Total liabilities and Fund equity TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS (Continued) September 30, 1993 Gnvzrnmenktl fund types Account rroops Debt Capital General General General Service Projects fixed long-ten Fund Fund Fond assets - dd7t Totals (memorandum only) September 30, September 30, 1993 1992 The accompanying notes to financial statements are an integral part of this statement. -3- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES Rc\,entres Water and sewer service lnspric(ion und tap connection fes Ad valorem proj~erty taxes Ad valorem property tilx penalties and interest MUD 11 contributions lltlzrsst earned Reinil~urszolenl for line relocation Sale of assets hliscelliineous Interest reimburssn~ent from developer Total revenus Exnendifurrs Current: Water and szwer department Administrative Fire department h4ud I operations Capital outlny Yaw ended September 30. 1993 Totals (memorandum only) Debt Capital Year ended Year ended Gzneral Sewicc Projects September 30, September 30, Ftind - - Fund Fund 1993 1992 (Continued) -4- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I Expenditures (continued) Debt service: Plincipal retirement Interest and fiscal cl~arges Total expenditures Excess (deficiency) of revenues over (under) expmdi~ures Other iin;mcing sources (uses): Operating Lrzlnsfers in Operalin~ twnsfers out 4dj11stment in note p;~y;~ble Proceeds of unlimited tax and revenuz bond rzfunding net of issuance costs and discount uf $132,677 r':l).ii~cnt to ~afilnding bond cscrow agent Tofi~l c~tl~er financing SlJIIrczS (IISCS) Excess (deficit) of revenues and other tini~ncing sources over expetiditurzs i111d OLIMK fi~li~ncirlg IISCS Fl~nd halances at beginning of ywr Fund halimcea at end of year COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES (Continued) Year ended Septcmher 30, 1993 Totals lmernorandum only) Deb1 C~pitdl Year ended Year ended General Service Projects September 30, September 30, Fund Fund - Fund 1993 1992 The accompanying notes to financial statements are an integral part of this statement. -5- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CIIANGES IN FUND BALANCES (BUDGET AND ACTUAL) GENERAL FUND Year ended September 30, 1993 Revenues: Water and sewer service Inspection and tap connection fees Ad valorem property taxes Ad valorem property (ax penalties and interest MUD I1 contributions Interest earned Utilization of opening fund balnnce Sale of assets Miscellmeous Total revenues Expenditures: Water and Sewer Department: Salaries, wages, benetits and taxes Engineering fees Water purchases Contract labor Utilities and telephone Maintenance and repairs Consumable supplies Rent lease equipment Bad debt Other Capital expenditures Total {Vdter and Sewer Department Administrative: Salaries, wages, benefits and taxes Professional fees: Legal Auditing Engineering Contract labor Utilities and telephone Maintenance and repairs Directors fees Printing and office supplies Insurance and bonds Budeet - Actual - Variance favorable - lunfavorable) TROPHY CLUB ~~N~CIPAL UTILITY DISTNCT NO I COMeiNED STATEhfEVT OF REVENUES, EXPENDITURES Am CHANGES IN FUND BALANCES GET Am ACTUAL) GENERAL FUND Year ended September 30, 1993 (Continued) Expenditures: (continued) Administrative: (continued) Travel and seminars Other Capital expenditures Total administrative Fire Department: Saianes, wages. benefits and Professional fees - Auditing Ta office contract services Utilities and telephone MGntenance and repairs Insurance and bonds Debt service Schools and training Uniforms Fuel and supplies Remote c0mmunications Other expenditures Tow Fire Department taxes Variance favorable - (Continued) -7- TROPI-IY CLUB MUNICIPAL UTILITY DISTRICT NO. I COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (BUDGET AND ACTUAL) GENERAL FUND Year ended September 30, 1993 (Continued) MUD I Operations: Professional fees: Legal Auditing Engineering Tax office contract services Maintenance and repairs Directors' fees Insurance and bonds Other Travel and seminars Legal notices and publications Transfers to other funds MUD I Operations Total expenditures Excess (deficiency) of revenues over expenditures Adjustment in note payable Fund balances at beginning of year Fund balances at end of year Variance favorable - {unfavorable) The accompanying notes to financial statements are an integral pan of this statement. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 1. Summary of significant accountin. uolicies a. Renortin? entity - In accordance with generally accepted accounting principles, Trophy Club Municipal Utility District (MUD) No. 1's (the District) general purpose financial statements include all funds, account groups, agencies, boards, commissions, and authorities that are controlled by, or financially dependent upon, the municipal utility district. Control and financial dependence are determined on the basis of the obligation to finance deficits, guarantee debt, select members of the governing authority, and approve the budget; the authority to make a public levy and own assets; the scope of public service; and special financing relationships where there is only partial or no oversight responsibility. All pertinent documents, transactions, contracts, and correspondence with other governmental agencies were reviewed to determine the reporting entity. Based upon this review, using the forgoing criteria, there were no additional organizations to be considered for inclusion in the accompanying financial statements. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 1. Surnmarv of sienificant accounting policies - continued b. Joint venture - The District holds legal title to and operates the central water supply system and the central waste disposal system as "Master District" for the Trophy Club joint venture for the benefit of Trophy Club MUD I, Trophy Club MUD II, and developers in the Trophy Club joint venture. The original ultimate build out of Trophy Club anticipated participation by additional Municipal Utility Districts. The proportionate allocation of costs and related beneficial usage rights in the major assets, based on estimated ultimate usage of such major assets, is as follows: MUD I pgp& Water plant and wells 40.91 Twenty-one (21) inch Fort Worth water line 36.89 Elevated tank 43.99 Original treatment plant and land 67.14 Expanded treatment plant 42.61 Administration building 23.38 MUD 11 27.14 Future Development1 Developer percent 23.11 00.00 00.00 19.99 76.62 (A) (A) hlUD 11 does not acknowledge any portion of the cost of the vdnlin~stration building as being their responsibility. The developers and the districts have an agreement making 11ie District the managing district. The managing district has financial responsibilities which include preparing and administering the budgets. The developers and other districts review and modify their budget. The developers have agreed that any net revenues belong to the districts using the system. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 Summary of significant accountin. ~olicies - continued b. Joint venture - continued Based upon this arrangement, all financial transactions relating to water and sewer operatiorls are included in the financial statements of the managing district in the Water and Sewer Account which is part of the General Fund. The developers have not funded their share of the joint venture. In the event that the municipal utility districts using the system sell more bonds, the developers will sell their interest to those districts. c. Fund presentation - This financial report is in accordance with generally accepted accounting principles which utilize governmental fund types rather than an enterprise fund. d. Fund accountinp - The District has established separate govenlmental fund types, as typically used to report non-enterprise government financial activity, to account for transactions in compliance with legal requirements imposed by the Texas Natural Resources Conservation Commission (TNRCC), formerly the Tesas Water Commission. Funds and account groups used by the District are as follows: Governmental funds General Fund - TO account for all of the general water and sewer revenue of the District not specifically levied or collected for other District funds, and for expenditures related to tlle maintenance of operations. Debt Service Fund - To account for the source and disposition of monies for paying interest and principal on general long-term debt. Capital Projects Fund - To account for the acquisit~on of C~p~lal facilities - being financed from bond proceeds. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 1. Summary of significant accountin? ~olicies - continued d. Fund accounting - continued Account grouas General Fixed Assets - To account for property and equipment of the District. General Lone-Term Debt - To account for the unmatured principal of outstanding General Long-Term Debt. e. Basis of accountin5 -Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Ad Valorem property taxes are recorded as revenue when received or expected to be received within sixty (60) days of year-end. Penalties and interest on property taxes and miscellaneous revenues are recorded when received in cash because they are generally not measurable until actually received. Intergovernmental revenue and interest income earned but not received by year-end are accrued, when their receipt occurs soon enough after the end of the accounting period so as to be both measurable and available. Expenditures are generally recognized under the modified accrual basis of accounung when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long-term debt which are recognized when due. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 1. Summarv of significant accountino policies - continued f. General fixed assets and lone-tern debt - The accounting and reporting treatment applied to fixed assets and long-term liabilities associated with a fund are determined by the fund's measurement focus. All governmental funds are accounted for on a spending or "financial flow" measurement focus. Thus means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Fixed assets used in governmental fund type operations (general fixed assets) are accounted for in the General Fixed Assets Account Group, rather than in governmental fbnds. Public domain ("infrastructure") general fixed assets consisting of certain improvements other than buildings have not been capitalized. No depreciation has been provided on general fixed assets. All fixed assets are valued at historical cost or estimated historical cost, if actual historical cost is not available. Donated assets are valued at their estimated fair value on the date donated. Acquisition of general fled assets are reported at the time of purchase as an expenditure in the General or Capital Projects Fund and capitalized in the General Fixed Assets Account Group. Repairs and maintenance are recognized as expenditures; renewals and betterments are capitillized. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 1. Summan of sienificant accounting policies - continued f. General fixed assets and lone-term debt - continued Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as liabilities in the General Long-Term Debt Account Group. The hvo account groups are not "funds." They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. g. Budeets and budgetarv accountin5 - The Dishict follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The Board of Directors adopts an annual budget for the General Fund on the modified accrual basis. No budget is prepared for the Debt Service and Capital Projects Funds. 2. The Board of Directors approves budget appropriations. Any revisions hat alter tile total appropriations of the General Fund must be approved by the Board of Directors. Therefore, the level of budgetary responsibility is by total appropriations of tlie General Fund. 3. Unused appropriations of the budgeted fund lapse at tile end of each fiscal year. 4. Amendments to the budget dur-ing the year increased revenues $77,548 and expenditure $51,581. TROPHY CLUB MUNICIPAL UTILRY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 Summary of sieniticant accountine uolicies - continued h. Cash and investments - The District maintains a separate bank account for each fund. Except for bond related transactions, the District conducts all its banking and investment transactions with its depository bank. Deposits At September 30, 1993, the canying amount of the District's deposits was $1,163,558 and its total bank balance was $1,214,781. Of the bank balance, $100,000 was covered by federal depository insurance, and $1,114,781 was covered by collateral in the District's name held by the District's agent banks, which are different from the District's depository banks. The District does not carry any bank balance over and above the insured and secured amounts. During fiscal year 1993, the District had no investments other than interest bearing bank accounts, Certificates of Deposits, Treasury Bills and the State of Texas Texpool. Texpool is duly chartered and administered by the State Treasurer's office, and the portfolio normally consists of U. S. T-Bills, T-Notes, collateralized certificates of deposit, and repurchase agreements. Investments are stated at cost which approximates market. The District records all interest earned from investment activities in the respective funds. i. Revenue Recognition - Ad Valorem Propertv taxes - Ad Valorem property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on October 1 and are due and payable by January 31, of the following year. All unpaid taxes levied October 1 become delinquent February 1 of the following year. The District receives most of its payments in December. The District's current tax rate is $.295 per $100 of assessed valuation, which is assessed at one hundred percent (100%) of actual value. Property taxes for the District are not limited as to rate or amount. TROPHY CLUB MUNICIPAL UTlLlTY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 1. Summarv of sienificant account in^ policies - continued j. Total columns - Total columns are captioned "men~orandum only" to indicate that they are presented only to facilitate financial analysis. Data in these columns does not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of these data. Total columns for the prior year are presented to provide an understanding of changes in the District's financial position and operations. Prior year information by fund type is not presented since their inclusion would make the statements unduly complex and difficult to read. 2. Creation of district - The District was created by an order of the Texas Natural Resources Conservation Commission (TNRCC) on March 4, 1975, and confirmed by the electorate of the District at a confmation election held on October 7, 1975. The Board of Directors held its first meeting on April 24, 1975. The first bonds were sold on June 8, 1976. 3. Initial bond sale - The fist bonds were sold in accordance with the bond resolution which required that a portion of the bond proceeds be deposited into the Debt Service Fund for the payment of bond interest during the construction period. 4. Or~anizational costs - Thc District, in conformance with requirements of the TNRCC, capitalized and charged to organizational costs, for the creation period, all costs incurred in the creation of the Dismct allowed by statute. The TNRCC 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 premium 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. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 5. Restricted assets General Fund - Restricted cash represents amounts deposited into an account specifically set aside for refund of customer water deposits. Debt Service Fund - Restricted cash represents amounts deposited into sinking fund accounts for the retirement of bond principal and interest. 6. Chanees in ~eneral fixed assets - A summary of changes in general fixed assets follows: Land Buildings Water system Sewage system Drainage system Machinery and equipment Autos and trucks Furniture and fixtures Engineering fees Capitalized creation and construction period organizational costs Total Additions provided by: Bond issues Contributions by developers Contributions by General Fund Contributions by Debt Service Fund Contributions by Capitd Project Fund Total Balance September 30, 1992 Additions (deletions) Balance September 30, 1993 TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 7. Caoiralized interest - The District capitalizes net interest costs and interest earned as part of the cost of constructing various water and sewer projects when material. 8. General lone-term debt - The annual changes to general long-term debt for the year ended September 30, 1993 are as follows: Caoital Leases Bonded Debt Balance October 1, 1992 $18,329 $13.500 $ 9,229,000 Sale of bonds - 3,500,000 Principal payments (6.750) _(4.121,000) Balance September 30, 1993 8a. Bonded debt - At September 30, 1993, the District's long-term bonded debt consisted of: Range of General Next interest long-term year Subsequent Matun'ty a debt maturities maturities Water works and sewer system combination unlimited tax (Paid by Debt Service Fund) and revenue Serially bonds series through 6.60 - 1987 1997 7.20 $ 890,000 $200,000 $ 690,000 Public Property (Paid by General Fund) Finance con- Serially trdctual obli- through 7.60 - gations 1989 1999 9.00 88.000 12,000 76,000 Water works and sewer system combination unlimited tax and revenue bonds series 1991 Water works and sewer system combination unlimited tax and revenue bonds series 1993 through 5.50 - 2011 7.50 4,130,000 120,000 4,010,000 (Paid by Debt Service Fund) Serially TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENEFUL PURPOSE FINANCIAL STATEMENTS September 30, 1993 8a. Bonded debt (Continued) A schedule of bond maturities is as follows: & Principal Interest Total Total - Tax and revenue bonds authorized and unissued as of September 30, 1993, amounted to $1,229,217. The bonds are payable from the proceeds of an ad vdorem ta.~ levied upon all property subject to luation 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 watenuorki and raniw seiver system. The provision of the bond resolutions relating to debt sewice requirements have been met and the cash allocated for these purposes is sufficient to meet debt senrice requirements for the fiscal year ended September 30, 1993. The outstanding bonds callable for redemption prior to maarity at tile option dthe District. The bonds may be called in whole or in pm for tile puipore of retiremenr or refunding, Or both. at par in addition to unpaid accrued interest. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 8a. Bonded debt - Continued) During 1987, the District issued bonds in the amount of $5,675,000. The proceeds, along with cash on hand in the Debt Service Fund, were used to extinguish the three (3) existing outstanding bond issues. Funds so deposited in an irrevocable trust are adequate to fund principal and interest payments until the remaining bonds are callable. At that time, all outstanding bonds will be retired. Accordingly, the trust account assets and the liabilities for the defeased bonds are not included in the District's financial statements. At September 30, 1993, $5,170,000 in bonds outstanding are considered defeased. During 1993, the District issued $3,500,000 in General Obligation Bonds with an average interest rate of 5.58 percent to advance refund $3,805,000 of $4,695,000 outstanding 1987 Series bonds with an average interest rate of 7.89 percent. The net proceeds of $3,367,123 (after payment of $132,877 in underwriting fees and other issuance costs) plus an additional $900,000 of MUD I Operating and Maintenance funds and $95,000 of Debt Service funds were used to purchase U. S. Securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1987 Series bonds. As a result, $3,805,000 of the 1987 Series bonds are considered to be defeased and the liability for these bonds has been removed from the general long-term debt account group. The District advance refunded the 1987 Series bonds to reduce its total debt service payments over the next 15 years by almost $2,350,000 and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of $1,170,000. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 8b. Notes pavable - Notes payable consist of the following: Amounts due to a financial institution payable $6,750 plus interest annually, 7.2%, due in 1994, secured by equipment $6.750 - The expenditure caption "Fire Department - Other" includes $972 of interest payments. A schedule of maturities is as follows: Year - 1994 Principal $ 6.750 8c. Capital lease ~avables - The District has entered into a lease for equipment. The lease is accounted for as a capital lease. At the end of the lease, the District will own the equipment. Future minimum lease payments for the lease described are as follows: Fiscal Year - Amount 1994 $ 5,476 1995 5,476 1996 5.476 Total 16,428 Less amount representing interest (1.963) Present value of net minimum lease payments $14,465 The expenditure caption "Fire Department - Other" includes $1,612 of interest payments. 9. Commitments - The District follows the guidelines of the TNRCC in its dealings with developers. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 10. Develooer - The District has recorded a receivable due from a Developer for construction repairs related to their percentage of the ownership of assets. Additionally the District has recorded a payable for monies received on the sale of certain assets for the Developer's percentage of ownership. While these items are unrelated, the District intends to exercise the right of offset, if the Developer does not reimburse the District for the repairs. 11. Water and sewer service rates - Both Trophy Club Municipal Utility District No. I and II have established the folloiving water and sewer service ntes which are administered by MUD I as Master District: Tap fee MUD I $350.00 MUD II 390.00 Sewer inspection fee 25.00 Water service only: Treated water: First 3,000 gallons of water used - minimum bill Each additional 1,000 gallons of water used thereafter up to 20,000 gallons Each 1,000 gallons of water used in excess of 20,000 Untreated water: Each 1,000 gallons of water used Inigation water: First 300,000 gallons of water used - minimum bill Each 1,000 gallons of water used in excess of 300,000 Standby fee per month Sewer charge per month - minimum bill Each 1,000 gallons of water used - in excess of 3,000 Sewer charge per month - m&~i,uimum bill (residentid only) TROPHX CLUB MUNICIPAL UTILITY DISTRICT N NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 12. Retirement Plan - The District provides pension benefits for all of its full time employees through a defined contribution single employer Simplified Employee Pension - Individual Retirement Contribution agreement plan administered by the First National Bank of Grapevine, Texas. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. Employees are eligible to participate after completion of six (6) months service. The District contribution rate was adopted by the governing board of the District at five percent (5%) of participating employees' actual compensation. By Board approval and Internal Revenue Service regulations the contribution rates are established annually. Employees are fully vested when they begin participating in the plan. Employees do not have the option to contribute to the plan. The pension, as established does not recognize prior service costs as it is based exclusively on current compensation earned by participants. The District's total payroll, covered payroll and contributions for 1993 were as follows: District's total payroll District's covered payroll District's contribution required and piaid TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30, 1993 13. Interfund operating transfers - Individual fund operating transfers for fiscal year 1993 were as follows: Fund Transfers in Transfers out General Fund: Water and sewer fund $901,388 (a) Maintenance and operations fund 91.495 (b) $992.883 Debt Service Fund $901.388 (a) Capital Projects Fund $91,495 @) (a) Cash used to pay refunding bond escrow agent. (b) To reimburse the Capital Projects fund for expenditures in excess of revenues and close the fund. SUPPLEMENTARY SCHEDULES The following Supplementary Schedules are included to satisfy reporting requirements of the Texas Natural Resources Conservation Commission. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I SUPPLEMENTARY SCHEDULES LNCLUDED WITHIN THIS REPORT September 30, 1993 D. Notes Resuired by the Water District account in^ Manual These are incorporated into the Notes presented as part of the General Purpose Financial Statements. D.(l) Schedule of Services and Rates D.(2) Schedule of General Fund Expenditures E. Analvsis of Changes in Cash and Temporarv Investments - All Funds F. General Long-Term Debt Service Requirements - by Years G. Analvsis of Chanzes in General Long-Term Debt H. Schedule of Tem~oraq Investments 1. Analvsis of Taxes Receivable 1. Analysis of Organizational Costs K. Analvsis of Changes in General Fixed Assets L. Schedule of Notes and Capital Lease Pavable M. Comuarative Schedule of Reven~~es and Ex~endit~~res - Five Years N. Insurance Coveraoe 0. Board Members, Kev Administrative Personnel and Consultants P. Questionnaire to be Completed bv Auditor Q. Individual General Fund Account Financial Statements R. Net General Fixed Assets bv Fundin. Source S. Certificate of the Board of Directors TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I SCHEDULE OF SERVICES AND RATES Year ended September 30, 1993 1. Services provided by the District: Retail water X Wholesale water - - X Drainage X Retail sewer X Wholesale sewer - - Imgation - ParhIRecreation X Fire Protection - - Security - Solid WasteIGarbage - Flood Control - Roads X Participates in joint venture, regional system and/or waste water service (other than - emergency interconnect) - Other 2. Total water consumption (rounded to the nearest 1,000) during the fiscal year: Gallons pumped into system: 434,640 Gallons billed to customers: 408,450 3. Retail rates (based on 518" meter) based on rate order dated June 29, 1993: Minimum Rate per Minimum Usage Flat 1,000 gallons Usage levels Charee fin eallonsl &I& over minimum (in eallons~ Water $9.00 0-3000 No $1.65 3,001 to 3,0j000 $1.85 over 20,000 Sewer $9.00 0-3000 No $1.50 over 3,001" Surcharge: None Sewer usage does not employ winter averaging. Total water and sewer charges per 10,000 gallons usage: First 10,000 gallons used Next 10,000 gallons used Next 10,000 gallons used * hlxximum residential se\ver charze is for 12,000 gdlons. (Continued) -26- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I SCHEDULE OF SERVICES AND RATES Year ended September 30, 1993 (Continued) 4. Number of retail water andlor waste water connections within the Master District as of fiscal year ended September 30, 1993: 1,610 Connections Active Connections Inactive Connections Single family - District #I 945 Single family - District $2 522 Commercial - District #l 127 Commercial - District #2 16 Single family equivalents (SFE's) for: Number of Active SFE Inactive SF!2 Active Connections Connections Connections Multi family 56 247 Commercial 70 345 Other-recreational centers, government & Volunteer Fire Department 16 38 Total 5. Standby fees: The District currently assesses a monthly standby fee of 56.00 to any lot which has water and sewer service available, but not connected. [Continued) -1-7- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I SCHEDULE OF SERVICES AND RATES Year ended September 30, 1993 (Continued) 6. Other rates for retail services provided: Tap fee Impact fee per tap (payable to City of Fort Worth, Texas) Sewer inspection fee For reconnection following disconnection for nonpayment Disconnect or reconnect at customer request Accuracy reading (if meter is found to be correct) Customer deposit (owner of property) Customer deposit (renter of property) Customer deposit (builder) Returned check charge Construction meter Name of contact person: Roger Unger Title : District Manager Phone number: (817) 430-191 1 XlOO TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I SCHEDULE OF GENERAL FUND EXPENDITURES Year ended September 30, 1993 Current: Personnel (including benefits) Professional fees: Legal Auditing Engineering Purchased services for resale Bulk water and sewer service purchases Contracted services: Tax collector Utilities and telephone Maintenance and repairs Administrative expenditures: Directors' fees Printing and office supplies Insurance and bonds Other Fire fighting Transfers to other funds Capital outlay - Acquisition of fixed assets Total expenditures Water and Sewer Systems Fire MUD I Actual Devartment O~erations - Total Number of persons employed by the District: Full-time: 15 TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I ANALYSIS OF CHANGES IN CASH AND TEMPORARY INVESTMENTS - ALL FUNDS Year ended September 30, 1993 Totals Irnernorandurn on1 y) Debt Capital Year ended General Year ended Service Projects September 30, a Septen~ber 30, Jgl~d- Fund 1993 1992 Sources of cash and remporilrv in\*estn~mts Cash receipts from revenues Cash transfers from sub accounts Refundable deposits lntercst earned Miscellanmus revenues Sale of Bonds Total cash and 1clnpor;lry inveslments providd Aprdicalinns of' cash and temporary investn~ents Cash disbursements for current cxpmdirur6s Cash transisrs to sub accounts Payment of bond principal Purcliase of tixed assets by General Water and Sewer Fund Payment lo rehrnding bond escrow agent Total cash nnd temporary investments appliul 1ncrz;tse (decrase) in cash and lenlporary investments Cash xnd temporary investment balances, beginning of year Cash and temporary investment balances, end oi' yc;r TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I GENE"L LONG-TERM DEBT SERVICE REQUIREMEW . ~y YEARS Year ended September 30, 1993 Series 1987 Due during Years Principal Interest due ending due March and Se?lember 30 Seotenlber 1 September 1 T~~~ 1994 - 1995 $200~0~~ 1 61,560 $ 261,560 215,000 I996 230,000 48,360 263,360 1997 33,740 263,740 245,000 1998 17,640 262,640 - 1999 - (Continued) Series I989 Principal due Januarv I $12,000 13,000 14,000 15,000 16,000 18,000 Interest due January and Julv I $ 6,599 5,474 4,357 3,247 2,046 71 1 TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I Due during fiscal years ending Seplentber 30 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2110 2111 GENERAL LONG-TERM DEBT SERVICE REQUIREMENTS - BY YEARS Year ended September 30, 1993 Series 1991 Principal due Seatember 1 $ 120,000 130,000 140,000 150,000 160,000 170,000 180,000 195,000 210,000 225,000 240,000 255,000 275,000 290,000 310,000 335,000 360,000 385.000 $4,130,000 Interest due March and Seolember 1 - Total $ 277,540 397,540 268,540 398,540 258,790 398,790 248,290 398,290 237,040 397,040 225,040 395,040 214,670 394,670 203,510 398,510 191,225 401,225 177,785 402,785 163,160 403,160 147,320 402,320 130,235 405,235 11 1,535 401,535 91,525 401,525 69,825 404,825 46,375 406,375 21,175 406,175 $3,083.580 $7.213,580 (Continued) Series 1993 Principal Interest due due March and September 1 September 1 10,000 $ 187,805 10,000 187,480 10,000 187,105 10,000 186,705 275,000 186,280 290,000 173,905 300,000 160,565 315,000 145,565 330,000 129,185 350,000 111,365 365,000 92,115 390,000 71,675 410,000 49,445 435,000 25,665 - - - - - - Due during fiscal years ending Seoten~ber 30 1994 1995 1996 1997 I998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 21 10 2111 CLUB MUNICIPAL UTILITY DISTNCT NO. I LONG-TERM DEBT SERVICE REQUIREMENTS - YEARS Year ended September 30, 1993 (continued) _2__ Total Principal due $ 342,000 368,000 394,000 420,000 451,000 478,000 480,000 510,000 540,000 575,000 605,000 645,000 685,000 725,000 310,000 335,000 360,000 385.000 -0 Cash and temporary investment balances at September 30, 1993: Debt Service Fund Annual Re4uirements Total Interest due $ 533,504 509,854 483,992 455,882 425,366 399,656 375,235 349,075 320,410 289,150 255,275 218,995 179,680 137,200 91,525 69,825 46,375 21.175 -4 ___2_22_ Total Principal and Interest $ 875,504 877,854 877,992 875,882 876,366 877,656 855,235 859,075 860,410 864,l 50 860,275 863,995 864,680 862,200 401,525 404,825 406,375 406 175 -4 TROPHY CLUB MUNICIPAL UTILlTY DISTRICT NO. 1 Interest rate ANALYSIS OF CHANGES IN GENERAL LONG-TERh4 DEBT Year ended September 30, 1993 Dates interest payable Maturity dates Bonds outstanding at beginning of current year Bonds sold during current year Retirements: Principal Bonds outstanding at end of current year Retirements: Interest Series Series 1987 1989 Bond issues Series Series 1991 &$& - Total Paying agent's name and address: Series 1987, Series 1989, Series 1991 and 1993: Ameritrust Texas, N. A., P. 0. Box 2320, Dallas, Texas 75211 Bond Authority: Refunding Tax Bonds Other bonds Bonds Amount authorized by voters $12,344,217 S - !$ Amount issued 11,115,000 - Remaining to be issued 1,229,217 - TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I SCHEDULE OF TEMPORARY INVESTMENTS Year ended September 30, 1993 Accrued interest Identification Balances receivable or certificate Interest Maturity at end at end Funds - number a date of year of vear General Fund: None The District had no Temporary Investments at September 30, 1993. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I ANALYSIS OF TAXES RECEIVABLE September 30, 1993 Taxes receivable at beginning of year 1993 tax roll Total to be accounted for Less collections: Current year Prior years Taxes receivable at end of year Taxes receivable by years: 1983 and prior 1984 1985 1986 1987 19SS 1989 1990 1991 1992 Property valuations: Land Improvements Personal property Exemptions Total property valuations Fire Department Maintenance $ 7,625 153.047 160,672 MUD I Maintenance $ 5.592 33 855 39.447 MUD I Dtbt Service - $ 40,792 816.030 856,822 Five years ended September 30. (in thousands except for tax roll amount) 1993 - 1992 - - 1991 1990 - Total - $ 54,009 1.002.932 1,056,941 Tax rate per $100 valuation: Fire maintenance $.045 5.045 Maintenance KO45 S.040 ,010 $.039 ,010 Debt service .035 ,040 ,010 ,240 - ,240 - - ,176 ,200 - ,300 Total - %.295 - =i s.295 $.255 - - s.280 $.349 - Tax rolls (total) $1,002.932 $1.041.499 $ 876,112 % 532.513 $ 700.958 For the year ended September 30, 1993: Percent of current taxes collected to current hxcs levled Percent of current m~d delinquent taxes collected to cunent and delinquent taxes outstandin_e a1 beginning of tax par TROPHY CLUB MUMCIPAL UTILITY DISTRICT NO. I ANALYSIS OF ORGANIZATIONAL COSTS Year ended September 30, 1993 Balances at beginning of year Balances at end of year Additions [decreases] 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 veriod Legal fees Financial consulting fees Operating Bond interest 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 Capital Projects Fund By Debt Service Fund Total district organizational costs - Construction period Total provided TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I ANALYSIS OF CHANGES IN GENERAL FIXED ASSETS Year ended September 30, 1993 General fued assets: Land Buildings Water system Sewage system Drainage system Machinery and equipment Autos and trucks Furniture and fixtures Engineering fees Additions provided by: Bond issues Contributions by developer Contributions by General Fund Balance 9/30/92 Additions (deletions) Balance 9130193 TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I SCHEDULE OF NOTES AND CAPITAL LEASE PAYABLE September 30, 1993 Payable Accrued Interest Maturity at end interest rate - date on notes General long-term debt: FMC Corporation Totals - All funds Capital lease payable Totals - All funds TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I COMPARATIVE SCHEDULE OF REVENUES AND EXPENDITURES Five Years ended September 30 Amount Percent of fund total revenue 1993 - - 1992 1991 1990 - 1989 1993 1992 1991 1990 1989 - - - - - General Fund revenues Water and sewer service $1,321,062 $1,163,310 $1,269.260 $1,277,889 $1,089,259 72.7% 46.5% 69.6% 77.7% 80.556 lnsprct~on and lap connect~on fws 20,974 15,216 6,830 4,820 10,510 1.1 0.6 0.4 0.3 0.8 Ad valorem property taxes 185,694 231.533 299,722 229,744 134,900 10.2 9.2 16.5 3.9 10.0 Ad valorrln property taxes pznaltias and intercst Int&rest earned Miscell;~nu~us Otl~ir Total General Fund revenues Gcncr;rl Fund ixnanditlrrrs I'~rrclli~sed water and sewer services k~yroll Profrssional fics I<eclrr-ring operating expenditures Capili~l outlay 'Transfer Lo interest ;md sinking fund h?iscellanu~us Total General Fund expenditures Excess (deficiency) of General Fund rcvcnues iivltr enpmdilures (Continued) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I COMPARATIVE SCHEDULE OF REVENUES AND EXPENDITURES Five Years ended September 30 (Continued) Drht Service Fund revcnlles .4d valorem property taxes Ad valorem property lax penalties and interest inlerzst wmd Miscellaneous Otlier linancing sources Total Debt Service Fund revenues Del3t Scnrice i'und expendilurcs Principal retirement Interest and fiscal charges I'itylnenl to refunding bond agent Total Debt Service Fund expendit~~rrs I<ncess (deficit) of Dzhl Senrice Fund re\,enilrs over rxpendilurea C:~r~ilal Pnii<ccs Fund revenues Interest cimed Other fin:mcing sources Total Gipital Projects Fund revznuss Copitill Pmizcls Fund expenditures - Ci~pital nutl;~y hfisccl1;mcous Total CapiVal Projzcls Fund expenditures ~XCCSS of Capital Projects Fund r6vcoues ovcr expenditures Percent of fund revenue 1989 - ----- 1993 1992 1991 1990 1989 (Continued) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I Average annual debt service requirement lor unpaid principal and interest COMPARATIVE SCHEDULE OF REVENUES AND EXPENDITURES Five Years ended September 30 (Continued) Amount 1993 - 1992 - 1991 1990 - - 1989 Excess revenues from General Fund and Debt Service Fund before expenditures for debt service Coverdge (cxcess revenues as adjusted d~\,~ilul hy ilnnuai deb1 S~N~CC requlrelnent) Number of rrmrr and sewer connctions ;it cnd of year Totlrl amount of water billed to customers (in thuusi~nds of- g;lllons) 'Total iimounf of water pumped into system (in thousitnds of gallons) (A) Percentaxe uf water billed to water pumped Effluent (in llrousands of gallons) A) During 1989, the calibration equipment had mechanical malfunctions. As a result, the total of water pumped into tl~e system is not cornat. -42- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I INSURANCE COVERAGE September 30, 1993 lnsurer Type of Amount of corporation TYpe of coverage TQ coverage Name stocldmutual Ernployee tlonesty, etc.: Tax assessor-collector 01-13-93 01-13-94 $ 10,000 Hartford Casualty Publ~c official (wch director) 10-03-92 10-03-93 50,000 Hartford Casualty Hr~okkeeper bond 10-03-92 10-03-93 50,000 Hartford Casualty Director and oflicer liztbility 09-30-92 10-03-93 1,000,000 Colonial Insurance Company U~ilbrella liability 09-30-92 09-30-93 4,000,000 Mid-Continent Casualty Building zurd contents a1111 water syste~u Liahil~ty: General: Bodily injury Properly damage 09-30-92 09-30-93 5,468,000 American Protection 09-30-92 09-30-93 1,000,0001 Mid-Continent Casualty 2,000.000 Automotive (nonownzd): Bodily injury 09-30-92 09-30-93 1,000,000 Mid-Continent Casualty Property damage 1,000,000 Stock Stock Stock Stock Stock Stock Stock Stock Contractor's equipment 09-30-92 09-30-93 60,500 Phoenix Assurance Company Stock Tl~is skltement, prcpnruf from the policies, is intended only as a descriptive summary; no expression of opinion as to the ndyuacy of the coverage is intendtd. Policy clause co- insurance None None None None None None None None None (Continued) Tvne of coverage Volunteer Fire Department: Errors and Omissions liability Excess Errors and Omissions liability Umbrella liability Liahilily: General: Bodily injury Property damage Automotive (nonownul): Bodily injury Properly damage TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I INSURANCE COVERAGE September 30, 1993 (Continued) Insurer Policy Type of clause corporation CO- W stocklmutual insurance Cigna Insurance Company Cipa Insurance Company Cigna Insurance Company Stock None Stock None Stock None Cigna Insurance Company Stock None Cigna Insurance Company Stock None vl 11s .. statement, prcpercd from the policies, is intended only us a descriptive summary; na expression of opinion as to the adequacy of the coverage is intended. -44- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I BOARD MEMBERS, KEY ADMINISTRATIVE PERSONhTL AND CONSULTANTS September 30, 1993 Complete district mailing address: 100 Municipal Drive, Trophy Club, Texas 76262 District business telephone number: (817) 430-1911 Term of Fees office elected and expense Resident and expires or reimbursement of Name and address date hired 09-30-93 Title at vear-end District? Board members Constance S. White 119 Trophy Club Drive Trophy Club, Texas 76262 5190-5/94 $ 600 President Yes T. A. Neidenberger 1033 Sunset Drive Trophy Club, Texas 76262 5/88-5196 $ 600 Vice-president Yes John V. Peters 402 Hilltop Court Trophy Club, Texas 76262 1/91-5196 $ 0 Director Yes R. Peter Reincke, Jr. 3 Colonial Court Appointed Trophy Club, Texas 76262 8/93-5194 $ 100 Director Yes Susan H. McCabe 1136 Sunset Drive Appointed Trophy Club, TX 76262 11/91-5194 $ 550 Secretary-Treasurer Yes Note: No director has any business or family relationships (as defined by the Texas Water Code) with major landowners in the District, with the District's developer or with any of the District's consultants. Key administrative personnel Roger Unger 102 Carnoustie Trophy Club, Texas 76262 4/15/86" $49,000 General Manager Yes * Assumed responsibility of General Manager on 10-15-89. (Continued) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I BOARD MEMBERS, KEY ADMINISTRATIVE PERSONNEL AND CONSULTANTS September 30, 1993 (Continued) Term of office elected and expires or Name and address date hired Fees and expense reimbursement 09-30-93 Resident of District? Title at vear-end Consul tan ts Denton County Appraisal District P. 0. Box 2816 Denton, Texas 04/01/81 Appraiser No Yes Donna Welsh 100 Municipal Drive Trophy Club, Texas 76262 12/01/87 Tax Assessor/ Collector Decker, Jones, McMackin, McClane, Hall & Bates 2400 City Center I1 Fort Worth, Texas 76102 1975 Legal Counsel James L. Buxton, P.C. 5017 S. Hulen Suite 4 Foa Worth, Texas 76132 1983 Certified Public Accountant Carter & Burgess 1100 Macon Street Fort Worth, Texas 76102 1983 Consulting Engineers Gandy, Michener, Swindle and Whitaker, L.L.P. 3500 City Center Tower I1 Fort Worth, Texas 76102 02/01/93 Legal Counsel Booth and Dillon, P.C. 2020 1st City Centre 816 Congress Avenue Austin, Texas 78701 1093 Legal Counscl TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I QUESTIONNAIRE TO BE COMPLETED BY AUDITOR Year ended September 30, 1993 1. On the following chart, provide the appropriate check marks for each listed accounting record. Under the "USED?" block for each record indicate either "NO" (it is not used) or "YES" (it is used). Under the "HOWKEPT?" block indicate if records are maintained manually, by hand, or if data are input to a computer. Under the "WHEN UPDATED?" block show how often entries are made to each record. If entries are made less often than monthly, write in the frequency under "HOW OFTEN?". Indicate who provided the information for the table below: Cathy Moreas RECORD Description of accounts Chart of accounts General journal Cash receipts journal Cash disbursements journal Check register General ledger Customer subsidiary ledger Fixed assets ledger Bank reconciliation Trial balance USED? HOW KEPT! BY BY NO YES HAND COMPUTER -- - 2. Does the district use double entry accounting? 3. What is the usual location of the accounting records? 100 Municipal Drive, Trophy Club, Texas 76262 WHEN UPDATED? HOW DAILY WEEKLY MONTHLY X X X X 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 taken by the Board of Directors of the water district? If Yes is checked for Question 4, have these topics been discussed in a Management Letter to the water district's Board of Directors? (Continued) TROPHY CLUB MUNIClPAL UTILITY DISTRICT NO. I QUESTIONNAIRE TO BE COMPLETED BY AUDITOR Year ended September 30, 1993 (Continued) 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? 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 the applicable bond resolutions? b. Properly escrow the required amount of cash as prescribed by the TNRCC or disburse the escrowed cash according to the terms prescribed by the TNRCC? 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? e. Have a contract for Social Security coverage for its employees with the Texas Employees Retirement System? 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 Employees Retirement System? g. Deposit receipts to the proper funds kept by the approved depository bank? h. Draw checks only on funds approved by the Board of Directors and signed by authorized personnel? X - - YES NO X - - YES NO X - - YES NO X - - YES NO X - - YES NO X - - YES NO X - - YES NO X - YES NO X - - YES NO (Continued) -4s- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I QUESTIONNAIRE TO BE COMPLETED BY AUDITOR Year ended September 30, 1993 (Continued) 7. Note: A management letter is an audit scope requirement of the Water District Accountine Manual. a. The date of the most recent management letter was November 11, 1993. b. Were recommendations explained to and discussed with administrative officials of the water district? c. Is there evidence indicating that the previous year's recommendations have been or are being implemented? 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? Please indicate for & depository: a. The name of the depository bank - Northwest Bank b. Amount of F.D.I.C. coverage (if member bank) c. Amount of bond or other security pledged as of the end of the fiscal period (par value) d. Largest cash balance e. Date of largest cash balance f. The amount of bond or security pledged at the time of the largest cash balance (excluding F.D.I.C. coverage) a. The name of the depository bank - Team Bank of Fort Worth b. Amount of F.D.I.C. coverage (if member bank) c. Amount of bond or other security pledged as of the end of the fiscal period @ar value) d. Largest cash balance e. Date of largest cash balance f. The amount of bond or security pledged at the time of the largest cash balance (excluding F.D.I.C. coverage) X - - YES NO A - - YES NO X - - YES NO NONE $ 12.588 12-31-92 NONE (Continued) -49- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I QUESTIONNAIRE TO BE COMPLETED BY AUDITOR Year ended September 30, 1993 (Continued) a. The name of the depository bank - State of Texas, Tex Pool b. Amount of F.D.I.C. coverage (if member bank) c. Amount of bond or other security pledged as of the end of the fiscal period (par value) d. Largest cash balance e. Date of largest cash balance f. The amount of bond or security pledged at the time of the largest cash balance (excluding F.D.I.C. coverage) 9. The water district's taxes were collected by a sub-contracted tax collector. 10. Was the tax assessor-collector bonded as required by law? I I. 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? 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 (1) Receipts are deposited as received into district accounts. X - - YES NO 0 AS RECEIVED (Continued) -50- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I QUESTIONNAIRE TO BE COMPLETED BY AUDITOR Year ended September 30, 1993 (Continued) 13. Were local tax revenues (including delinquent taxes and interest and penalties on taxes) properly separated for debt service? 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. Full and complete explanations andlor references to notes, schedules (or comments in the auditor's report letter) for responses marked (*). X - - YES NO X - YES NO TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I WATER AND SEWER ACCOUNT ONLY BALANCE SHEET September 30, 1993 ASSETS Current Assets Cash: Unrestricted cash Restricted cash Total cash Accounts receivable less allowance of $81,067 Interfund receivables Prepaid expenditures Total current assets LIABILITIES Current Liabilities Accounts payabletaccrued expenditures Refundable deposits Total current liabilities FUND EOUITY Fund balance Reserved for customer deposit Unreserved Total fund balance Total liabilities and fund equity TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I WATER AND SEWER ACCOUNT ONLY BUDGET AND ACTUAL Year ended September 30, 1993 Revenues: Service Inspection and tap connection fees Late fees Interest earned Carryover Miscellaneous Total revenues Expenditures: Water and Sewer Department: Salaries, wages, benefits and taxes Engineering fees Water purchases Contract labor Utilities and telephone Maintenance and repairs Consumable supplies Rent lease equipment Bad debt Other Capital expenditures Total Water and Sewer Department 1,154.966 I. 120,420 Administrative: Salaries, wages, benefits and taxes Professional fees: Legal Auditing Engineering Contract labor Utilities and telephone Maintenance and repairs Directors' fees Printing and office supplies Variance favorable - lunfavorable~ (Continued) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I WATER AND SEWER ACCOUNT ONLY BUDGET AND ACTUAL Year ended September 30, 1993 (Continued) &.&eJ Actual Expenditures: (continued) Administrative: (continued) Insurance and bonds 35,500 33,022 Travel and seminars 8,000 7,722 Other 19,150 19,864 Capital expenditures 13.068 13.068 Total administrative 347,457 353.172 Total expenditures 1.502.423 1.473.592 Excess (deficiency) of revenues over (under) expenditures $48,73 1 (67,23 1) Fund balance, beginning of year Fund balance, end of year Variance favorable - lunfavorable) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I FIRE DEPARTMENT ACCOUNT ONLY BALANCE SHEET September 30, 1993 ASSETS Current Assets: Unrestricted cash Ad Valorem taxes receivable Accounts receivable Total current assets Current Liabilities: Accounts payablelaccrued expenditures Interfund payables Total current liabilities Deferred Income Total liabilities Fund deficit: Unreserved Total liabilities and fund equity LIABILITIES FUND EOUITY TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I FIRE DEPARTMENT ACCOUNT ONLY BUDGET AND ACTUAL Year ended September 30, 1993 Budeet - Revenues: Service $ 12,000 Ad valorem property taxes - MUD I 148,504 MUD I1 contributions 30,207 Ad valorem property tax penalties 1,700 Interest earned 3.000 Total revenues 195.41 1 Expenditures: Administrative Salaries, wages, benefits and taxes Professional fees: Auditing Tax office contract services Utilities and telephone Maintenance and repairs Insurance and bonds Debt service Schools and training Uniforms Fuel and supplies Remote communications Other Capital expenditures Total expenditures Excess (deficiency) of revenues over expenditures S (6.023) Adjustment in note payable Fund deficit, beginning of year Variance favorable - Actual {unfavorable) Fund deficit, end of year TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I MUD I MAINTENANCE AND OPERATIONS ACCOUNT ONLY BALANCE SHEET September 30, 1993 ASSETS Current Assets: Unrestricted cash Accounts receivable Ad Valorem taxes Interfund receivables Total current assets Current Liabilities - Accounts payable Interfund payables Deferred Income Total labilities Fund balance - unreserved Total liabilities and fund equity LIABILITIES FUND EOUITY TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I MUD I MAINTENANCE AND OPERATIONS ACCOUNT ONLY BUDGET AND ACTUAL Year ended September 30, 1993 Revenues: Ad valorem property taxes Interest earned Sale of assets Miscellaneous Total revenues Expenditures: Administrative Professional fees: Legal Auditing Engineering Ad valorem property tax office contract services Transfers to other funds Directors' fees Insurance and bonds Other Travel and seminars Legal notices and publications Maintenance and repairs Total Administrative Excess (deficiency) of revenues over (under) expenditures Fund balance, beginning of year Fund balance, end of year Variance favorable - funfavorable] Iand Buildings Water System Sewage System Drainage System Machinery and eq~~ip~nent Autos and trucks Furniture and fixtures Engineering fees Capitalized construction period costs Less accumulated depreciation Net General Fixed Assets Estimated Useful Lives: WaterISewer System Automobile All other assets TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I NET GENERAL FIXED ASSETS BY FUNDING SOURCE September 30, 1993 Water and Sewer Department and Administrative 40 years 3 years 10 years Fire Department MUD I Operations MUD I Bonds and Develooers Total TROPHY CLUB MUNICIPAL UTILITY DISTRICT N CERTIFICATE OF THE BOARD OF DIRECTORS Year ended September 30, 1993 Trophv Club Municipal Utility District NO. I Name of Water District Denton County We, the undersigned, do hereby certify that the audit report of the above-named Water District for the fiscal year ended September 30, 1993, was received by the Board of Directors on the day of z~d 199$ and was reviewed and (X) approved; ( ) disapproved *7 . *A at a meeting of the Board of Directors of the Water District on the day of J~J~Rv , 199)j Gw- Signature of Board Secretary Signature of Board President