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HomeMy WebLinkAboutFY Ended September 30, 2001TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 GENERAL PURPOSE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30.2001 TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 GENERAL PURPOSE FINANCIAL STATEMENTS September 30,2001 TABLE OF CONTENTS FINANCIAL SECTION Independent Auditors' Report General Purpose Financial Statements: Combined Balance Sheet - All Fund Types and Account Groups Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (GAAP Basis) -General Fund Notes to General Purpose Financial Statements Supplementary Information - Information Required by Texas Natural Resources Consewation Commission (TNRCC) (C) Auditors' Report on Supplemental Schedules is incorporated in "Independent Auditors" Report on page 1. (D) Notes required by the TNRCC in the Annual Audit Report Requirements for Texas Water Districts and Authorities are incorporated into the notes presented as part of the General Purpose Financial Statements. (E) Schedule of services and rates (F) Schedule of General Fund Expenditures (G) Schedule of Temporary investments -all iunds (H) Analysis of taxes levied and receivable (I) Analysis of changes in general iixed assets and organizational costs (J) General long-term debt sewice requirements - by yea! (K) Analysis of changes in general long-term debt (L) Comparative schedule of revenues and expenditures -iive years (M) Insurance coverage (N) Board members, key administrative personnel and consultants Annual Filing Affidavit THIS PAGE INTENTIONALLY LEFT BLANK. RUTLEDGE CRAlN 8 COMPANY, PC CEfi-IFIE3 P JBLlC ;.CCC'JILTARTS 2401 Garden Park Court, Suit€ B Arl~nglon, Texas 76013 INDEPENDENT AUDITORS REPORT To the Board of Directors Trophy Club Municipal Utility District No. 1 Trophy Club, Texas We have audited the accompanying general purpose financial statements of Trophy Club Municipal Utility District No. 1, as of September 30, 2001 and for the year then ended. These general purpose financial statements are the responsibility of the District's management. Our responsibility is to express an opinion on the general purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our 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, 2001, and the results of its operations for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The accompanying supplemental information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the general purpose financial statements of Trophy Club Municipal Utility District No. 1. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. - December 20.2001 Members - --- Meiro (817) 285-9989 Arnertcan Instilute of C~rtiii~d Public Ac~~~ntanIs Fax (817) 86;-9623 Texas Sooeiv ai Ccrtii,ed Public Accountanls I KurnY LLUB MUNICIPAL UTILITY DISTRICT NO. 1 COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS SEPTEMBER 30. 2001 (Wlth Comparative Totals for September 30, 2000) Governmental Fund Types General Debt Service Assets: Cash and cash equivalents Investments Receivables ( net of allowances for uncollectibles): Taxes Accounts Intergovernmental Miscellaneous Prepaid items Restricted assets: Cash and cash equivalents Loan receivable from government Note receivable Contract receivable Fixed assets Fund Fund Other Debits: Amount available in debt service fund - - Amount to be provided for retirements ofgeneral long-term debt - - Total Assets $ 1.128.082 $ 238.305 LIABILITIES. EQUITY AND OTHER CREDITS Liabilities: Accounts payable Accrued liabililies Liabilities payable from restricted assets: Customer deposits Due to othergovernments Deferred revenue General obligation bonds payable Contractual obligations payable Notes payable Capital leases payable Total Liabilities Equity and other credits: Investment in general fixed asseh Fund balances: Reserved for prepaid items Reserved for loan receivable Reserved for note receivable Unreserved, undesignated Total equity and other credits Total Liabilities, Equity B Other Credits $ 1.128.082 $ 238,305 The accompanying notes are an integral part of this statement EXHIBIT A-I Account Groups General General Long- Fixed Assets Term Debt Totals (Memorandum Only) September 30, September 30, 2001 2000 TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 COMBINED STATEMENT OF REVENUES. EXPENDITURES. AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED SEPTEMBER 30,2001 [With Comparative Totals for '/ear Ended September 30, 2000) Revenues: Water, sewer. fire department Standby fees Inspection and tap connections Ad valorem taxes, penalties and interest Miscellaneous revenues Interest Total revenues Expenditures: Current: Administrative Water andsewer Fire department Contrihution to Trophy ClubNVestlake DPS Capital outlay: Administrative Water and sewer Debt service: Principal Interest Paying agent fees Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Operating transfers in Operating transfers out Total other financing sources (uses) Excess of revenues and other financing sources oval (under) expenditures and other financing uses Fund balances, October 1 Residual equity transfer Fund balances, September 30 EXHIBIT A-2 Totals - Governmental Fund Types (Memorandum Only) General Debt Service September 30, September 30, - Fund Fund 2001 2000 The accompanying notes are an integral part of this statement. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET(GAAP BASIS) AND ACTUAL GENERAL FUND YEAR ENDED SEPTEMBER 30.2007 EXHIBIT A-3 Revenues: Water, sewer, fire department Ad valorem taxes, penalties and intaresl Miscellaneous revenues Interest Total revenues Expenditures: Current: Administrative Fire department Contribution to Trophy ClubM/estlake DPS Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Operating transfers out Total other financing sources (uses) Excess of revenues and otherfinancing sources over (under) expenditures and other financing uses Fund balances, October 1 Residual equity transfer Fund balances, September 30 Variance Favorable - Budget Actual (Unfavorable) The accompanying notes are an integral part ofthis statement. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30,2001 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A Reporting Entity Trophy Club Municipal Utility District No. 1 (the District) was created by an order of the Texas Natural Resources Conservation Commission (TNRCC) (formerly the Texas Water Commission) on March 4, 1975 end confirmed by the electorate of the District at a confirmation election held on October 7, 1975. The Board of Director's held its first meeting on April 24, 1975. The bonds were first sold on June 8. 1976. The District operates pursuant to Article XVI. Chapter 59 of the Texas Constitution and Chapter 54 of the Texas Water Code, as amended. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for the District. The financial statements of the District have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. Ps required by generally accepted accounting principles, these financial statements present the District only. There are no component units which satisfy requirements for blending within the District's financial statements or discrete presentation. Master District The Master District holds legal title to the central water supply system and the central waste disposal system. The proportionate allocation of costs and related beneficial usage rights in the major assets is estimated as follows: (8) Future Water plant and wells Twentv-one inch water line Elevated tank Original treatment plant and land First expanded treatment plant Second expanded treatment plant Administration building . . MUD 1 (A) MUD 2 Development 40.9146 27.14% 31.95% 60.00% 40.00% 0.0046 43.99% 56.01% 0.00% 67.14% 32.86% 0.00% 67.14% 32.86% 0.00% 77.30% 22.70% 0.00% 23.38% (C) 0.00% 76.62% (A) MUD 2 has not paid for its full shares. (8) The developer's original intent was for five districts. (C) MUD 2 does not acknowledge any portion of the cost of the administration building as being their responsibility Pursuant to the provisions of the New Master District Contract dated October 4, 2000, the Master District is managed as a joint venture of the District and MUD2 whereby representatives of the boards of directors of the District and MUD2 serve on the Master District board of directors. Accordingly the financial statements of the Master District have been removed from those of the District effective October 1, 2000 and are presented separately. Agreements exist between the District and MUD2 that compensate the District for water and sewer plant capacity and out of district sales as approved and required by the TNRCC. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30,2001 Based upon this arrangement, all financial transactions relating to water and sewer operations are included in the financial statements of the Master District joint venture. A summary of the Master District financial statements for the year ended September 30, 2001 foliows: Total assets 5 2,208,638 Total liabilities (1,006,724) Total equity 5 1.201.914 Total revenue, including other sources 5 2,805,245 Total expenditures (3.070.309) Excess of revenues over (under) expenditures (265.064) Plus capital expenditures 360.353 Net revenue (loss) before capital expenditures 5 95.289 The Master District Joint Venture financial statements are available at the District's administrative offices. Trophv Club I Westlake Department of Public Safetv Joint Venture Effective October 1, 1999, the District entered into a joint venture in participation with MUDI, the Town of Trophy Club (the "Trophy Club Entities") and the City of Westlake, Texas. Each of the Trophy Club Entities made contributions of assets with related long-term liabilities to the Trophy ClubtWestlake Department of Public Safety Joint Venture ("DPS). Each entity is obligated to contribute a prorata share of DPS' operating budget based upon the relationship of their respective assessed real and personal property values (police protection - Town of Trophy Club and Town of Westlake: fire protection -Trophy Club Entities and Town of Westlake with certain adjustments). The initial term of the venture is for five years duration and renews annually for another five year term until notice of withdrawal by a venturer. Upon termination of the venture, the Trophy Club Entities are entitled to have contributed assets with related debt returned to them. The agreement determining the appointment of the venture's board of directors precludes any single entity from imposing its will on the operations of the venture. Each of the entities provided equipment to be used by DPS. Certain equipment contributed is encumbered by debt. DPS is responsible for making operating lease payments in amounts sufficient to make required payments to creditors. The following is a summary of financial position and results of operations for DPS as of and for the year ended September 30,2001: Total assets Total liabilities Total equity Total revenue Total expenditures Net revenue (loss) The District's share of DPS "true-up" expense (paid after September 30. 2001) was 564,237 The DPS financial statements are available at the District's administrative offices. 9. Measurement Focus, Basis of Accounting and Basis of Presentation The accounts of the District are organized and operated on the basis of funds and account groups. Afund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds are maintained consistent with legal and managerial requirements. Account TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30,2006 groups are a reporting device to account for certain assets and liabilities of the governmentai funds not recorded directly in those funds. The District utilizes governmentai fund types to account for the District's activities and to prepare its financial statements. Governmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting revenues are recognized when susceptible to accrual (i.e., when they ere "measurable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The District considers ail revenues available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on generai long-term debt which is recognized when due, and certain compensated absences and claims and judgments which ere recognized when the obligations are expected to be liquidated with expendable available financial resources. Those revenues susceptible to accrual are ad valorem taxes, interest revenue and charges for services. Penalties and interest on property taxes and miscellaneous revenue are recorded when received, as they are generally not measurable until received. The District reports deferred revenue on its combined balance sheet. Deferred revenues arise when a potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Governmental funds include the following fund types: The general fund is the District's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Debt service funds account for the servicing of generai long-term debt not being financed by proprietary or nonexpendable trust funds. Account Groups include the following: The general fixed assets account group is used to account for all fixed assets of the District. The general long-term debt eccount group is used to account for general long-term debt and certain other liabilities of the District. C. Assets. Liabilities and Equity 1. Deposits and Investments The District's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorize the District to invest in (1) obligations of the United States or its agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other obligations, the principal of and interest on which are unconditionally guaranteed or insured by the State of Texas or the United States: (4) obligations of states, agencies, counties, cities, and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than A or its equivalent; (5) certificates of deposit by state and national banks domiciled in this state that are (A) guaranteed or insured by the Federal Deposit Insurance Corporation, or its successor; or, (0) secured by obligations that are described by (1) - (4); or. (6) fully collateralized direct repurchase agreements having a defined termination date, secured by obligations described by (I), pledged with third party selected or approved by the District, and placed through a primary government securities dealer. investments are stated at fair value. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30,2001 2. Receivables and Payables Transactions between funds that are representative of lendinglborrowing arrangements outstanding at the end of the fiscal year are referred to as either "interiund receivableslpayables" (i.e., the current portion of interfund loans) or "advances tolfrom other funds." All other outstanding balances between funds are reported as "due tolfrom other funds." Advances between funds are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. Trade accounts receivables are shown net of an allowance for uncollectibles. Trade accounts receivable in excess of ninety days comprise most of the allowance for uncollectibles. Property taxes are levied as of October 1, on the assessed value listed as of the prior January 1, for all real and certain personal property located in the District. The appraisal of property within the District is the responsibility of Denton Appraisal District (Appraisal District) as required by legislation passed by the Texas legislature. The Appraisal District is required under such legislation to assess all property within the Appraisal District on the basis of 100% of its appraised value and is prohibited from applying any assessment ratios. The value of property within the Appraisal District must be reviewed every five years; however, the District may, at its own expense, require annual reviews of appraised values. The District may challenge appraised values established by the Appraisal District through various appeals and, if necessary, legal action. Property taxes for the District are not limited as to rate or amount. In an election held October 7. 1975, the electorate of the District authorized the levy of up to $0.25 per 5100 valuation for the operations and maintenance of the District. Property taxes attach as an enforceable lien on property as of January 1, following the levy date. Taxes are due by Janua~y. 31, following the levy date. Property taxes are recorded as receivables when levied. Following is information regarding the 2000 tax levy: Adjusted taxable values $ 418,847.911 O&M tax levy S0.0598/5100 5 250,471 I&S tax levy SO. 1802/5100 754,764 Total tax levy 50.2400/$100 $ 1,005,235 3. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are therefore recorded as prepaid items. 4. Fixed Assets Fixed assets used in governmental fund types of the District ere recorded in the general fixed assets account group at cost or estimated historical cost f purchased or constructed. Dedicated fixed assets are recorded at their estimated fair value at the date of dedication. Assets in the general fixed assets account group are not depreciated.. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not included in the general fixed assets account group. Public domain ("infrastructure") general fixed assets consisting primarily of drainage systems have been capitalized. 5. Organizational Costs The District, in conformance with requirements of the TNRCC, capitalized costs incurred in the creation of the District. The TNRCC requires capitalization as organizational costs for the construction period all costs incurred in the issue and TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30,2001 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. 6. Long-term Obligations The District reports long-term debt of governmental funds at face value in the general long-term debt account group. Certain other governmental fund obligations not expected to be financed with current available financial resources are also reported in the general long-term debt account group. For governmental fund types. bond premiums and discounts, as well as issuance costs, are recognized during the current period. Bond proceeds are reported as an other financing source net of the applicable premium or discount. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. 7. Fund Equity Rese~ationS of fund balance represent amounts that are not appropriable or are legally segregated for a specific purpose. Reserved fund balance represents the amount of prepaid items. 8. Memorandum Only-Total Columns Total columns on the general purpose financial statements are captioned as "memorandum only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position, results of operations or cash flows in accordance with generally accepted accounting principles. Interfund eliminations have not bean made in the aggregation of this data. 9. Comparative Date/Reclassifications Comparative total data for the prior yaar have been presented in selected sections of the accompanying financial statements in order to provide an understanding of the changes in the District's financial position and operations. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation. II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABlLlN A. Budgetary Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles as follows: 1. The Board of Directors adopts an annual budget for the General Fund on the modified accrual basis. The Board of Directors budgets revenue but does not budget expenditures for the Debt Service Fund. 2. The Board of Directors approves all budget appropriations. Any revisions which alter the total appropriations of the General Fund must be approved by the Board of Directors. The level of budgetary responsibility is by total appropriations of the General Fund. 3. All annual appropriations lapse at fiscal year and. 4. No significant amendments to the budget occurred during the yaar. B. BudgetiGAAP Reconciliation The budget is adopted on the modified accrual basis of accounting, thus there are no reconciling items between the Budget basis and the GAAP basis of accounting. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30! 2001 Ill. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. Cash, Cash Equivalents, and lnvestments At year end, the District's carrying amount of deposits was 534.041 and the bank balance was 534,040. All of the bank balance was covered by federal depository insurance or by collateral held by the District's agent in the District's name. Investments lnvestments are categorized into these three categories of credit risk: 1. Insured or registered, or securities held by the District or its agent in the District's name 2. Uninsured and unregistered, with securities held by the counter party's trust department or agent in the District's name. 3. Uninsured and unregistered, with securities held by the counter party's, or by its trust department or agent but not in the District's name. At year end, the District's investments were as follows: CarrVins Market lnvestments not subject to categorization: Texas Local Government Pool System (TexPool) St106.473 $1LOL4L3 Investments categorized as cash equivalents $1.106.473 TexPool is an external investment pool operated by the Texas Comptroller of Public Accounts and is not SEC registered. The Texas lnterlocal Cooperation Act and the Texas Public lnvestments Act provide for creation of public funds investment pools and permit eligible governmental entities to jointly invest their funds in authorized investments. The fair value of investments in the pool is independently reviewed monthly. At September 30, 2001, the fair value of the position in TexPool approximates fair value of the shares. 8. Receivables Receivables as of year end, including the applicable allowances for uncollectible accounts, are as follows: General Debt Service Total Property taxes receivable $ 4.747 5 13.132 S 17,879 Miscellaneous receivables $ 4 $ $ 4 Receivable from other governments $ 121.902 S $ 121.902 TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30,2001 C. Fixed Assets Activity in the general fixed assets account group for the District was as follows for the year ended September 30. 2001: Land Buildings Furniture and fixtures Machinery and equipment Autos and trucks Water system Sanitary wastewater system Drainage system Construction in progress Engineering fees District Organization Total Balance Balance 9/30/2000 Additions Disposals 9/30/2001 $ 248.093 $ - $ 5 248.093 D. Interfund Receivables and Payables There were no interfund receivable balances as of September 30. 2001 E. Long-Term Debt 1. Combination Tax and Revenue Bonds/Contractual Obligations The District periodically issues combination tax and revenue bonds for general uses and expansions of the system. This debt for the bonds is recorded in the general long-term debt account group (to be repaid from a combination of property tax revenue and revenues of the water and waste water utility system). Combination bonds are as follows: Water works and sewer system combination unlimited tax and revenue bonds, Series 1993, with interest rates ranging from 3.25% to 5.9% , due through 2007. $2,280.000 Water works and sewer system combination unlimited tax and revenue refunding bonds, Series 1997, with interest rates ranging from 4.0% to 5.096, due through 2011, including relat~d capital appreciation bonds. 3.215.000 Total combination tax and revenue bonds Less unaccreted discount Total long-term bonds The District periodically issues other forms of long-term debt including contractual obligations, and public property finance contractual obligations, which are unsecured. The debt for the bonds is recorded in the general long-term debt account group (to be repaid from revenues of the water and waste water utility system). Such other debt is as follows: Public property finance contractual obligations, Series 1996. with interest rate of 5.50%, due through 2006. $302,000 Public property finance contractual obligations. Series 1999, with interest rates ranging from 5.50%. due through 2006. 50.000 Total long-term contractual obligations 352.000 Toral general long-term debt net $ SL72232-3 TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30,2001 2. Notes Payable The District has financed the purchase of personal firefighting equipment with a note payable Annually at $2,445 including interest accruing at 2.50% through September, 2018. S -3OL66 3. Capital Lease Obligations The District shares the purchase of various office equipment with capital leases with the Town of Trophy Club and MUD2. The District's share of the total monthly payments (including interest accruing at 7.0056) is $447, payable through May, 2005. 5 15.914 4. Changes in General Long-Term Debt During the year, the following changes in general long-term debt occurred: Balance Balance 9130/2000 Additions Payments 9/30/2001 Combination tax &revenue bonds $ 6,010,000 5 5 (515,000) 5 5,495,000 Discount on bonds (148,499) 24.122 (124,377) Net combination bonds 5,861,501 (490.878) 5,370,623 Contract obligations 404.000 (52,000) 352,000 6.265.501 (542.878) 5,722.623 Note payable 32,226 ' (1,440j 30.786 Capital lease obligations 19,987 (4,073) 15.914 5 6.297.727 $ 19.987 5 (548,391) $ 5,769,323 5. Debt Service Requirements The requirement to amortize all bonds and contractual obligations outstanding as of Saptambar 30 is summarized below: Year Ending September &I. 2002 2003 2004 2005 2006 Thereafter Total Discount Principal Interest Total 5 639,000 $ 268,973 S 907.973 TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30,2001 The requirements to amortize the note payable and capital lease obligation as of September 30 are summarized below: Year Ending Notes Capital September 30, Payable Lease Oblig. 2002 $ 2,245 $ 5.358 2003 2,245 5.358 2004 2.245 5,358 2005 2.245 2.233 2006 2,245 Thereafter 26,940 Total 38,165 18,307 Less interest F,379) (2,393) 6. Defeased Debt In prior years, the District has advance refunded previously issued debt. As a result, the refunded bonds were considered to be defeased and the liability was removed irom the general long-term debt account group. During the year. 53,080,000 of defeased bonds were paid leaving no defeased debt outstanding. 7. Additional Long-term Debt Disclosure Tax and revenue bonds authorized and unissued as of September 30.2001 amounted to $1,229,217 The bonds are payable from the proceeds oi ad valorem taxes 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 revenue to be received from the operation of the District's waterworks and sanitary sewer system. The outstanding bonds are callable for redemption prior to maturity at the option of the District as follows: Series 1993 -All maturities from 2003 to 2007 are callable in principal increments of 55,000 on or after September 1. 2002 at par plus unpaid accrued interest to the fixed date for redemptions. Series 1996 -All maturities are callable at anytime in principal increments of 51.000 plus unpaid accrued interest to the fixed date ior redemptions. Series 1997 -All maturities from 2008 to 2011 are callable in principal increments of $5,000 on or after September 1. 2007 at par plus unpaid accrued interest to the iixed date for redemptions. The provisions of the bond resolutions relating to debt service requirements have been met, and the cash allocated for these purposes is sufficient to meet debt service requirements for the year ended September 30, 2001. IV. OTHER INFORMATION A. Risk Management The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; business interruption; errors and omissions; injuries to employees; employee health benefits; and other claims of various nature. Commercial insurance is purchased for the risks of loss to which the District is exposed. Any losses reported but unsettled or incurred and not reported, are believed to be insignificant to the Disrrict's general purpose financial statements. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS September 30,2001 B. Commitments The District follows the guidelines of the TNRCC in its dealings with developers. The District leases certain equipment and a modular building under the provisions of operating leases. One half of the monthly rent ($450 per month) on the modular buildings lease is repaid to the District by the Town of Trophy Club. Future minimum rental payments are $3.600 for 2001. C. Contingent Liabilities The District is currently not subject to any pending litigation. However, the District is an interested party to several administrative hearings at year end. Although the outcome of these matters is not presently determinable, it is the opinion of the District's counsel that resolution of these matters will not have a material adverse effect on the financial condition of the District. The Town of Westlake, Texas has given notice that it intends to withdraw from the Trophy ClubWIestlake Department of Public Safety Joint Venture effective December 31. 2002. The District is negotiating with Westlake and the other venturers and has not determined the cost of the dissolution. D. Concentration Of Credit Risk Property taxes and accounts receivable for utilities are due from citizens and businesses within the District's boundaries. Risk of loss is immaterial due to wide dispersion of receivables and policies which address procedures for filing property tax liens or utility service cut-off. E. Contracts Under the terms of a contract dated September 19, 1991, MUD 1 purchased 3.382 unused water taps from a bankrupt developer. MUD1 had agreed to hold and sell to MUD 2 not less than 1,082 taps for the purchase price paid by MUD 1 plus interest from the date of purchase at a rate of 6.7989%. MUD 2 had an exclusive right to purchase these taps until September 19, 1998, after which time MUD 2 has the right of first refusal on future purchase of unused taps. Through September 30.2001. MUD 2 has purchased 590 waste water connections. $28,754 of revenue for the year ended September 30, 2001 resulted from a contract between the District and Maguire Thomas Partners (MTP) whereby the District has set aside 900 wastewater taps for use by MTP for the future development of the Solana complex. At the point tax revenue from new construction in the Solana complex exceeds the carrying cost of these 900 connections, this revenue stream will cease. Under the terms of a contract whereby MUD 1 and MUD 2 sold an unused portion of the water supply system to the City of Roanoke, Texas, the City of Roanoke will make annual payments to the Master District account of$23,663 including interest through 2006. At September 30, 2001, the District's share (60%) of the receivable was $59.000. F. Operating Transfers During the year ended September 30, 2001. the District Board ordered the transfer of $204,257 to the Debt Service Fund. This amount represents proceeds from sales of sewer taps and interest earned thereon, where the proceeds are intended to be used to pay debt issued by MUDl. SUPPLEMENTARY INFORMATION TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 SUPPLEMENTARY SCHEDULES INCLUDED WITHIN THIS REPORT September 30,2001 (D) Notes required by the TNRCC in the Annual Audit Report Requirements for Texas Water Districts and Authorities are incorporated into the notes presented as part of the General Purpose Financial Statements. (E) Schedule of services and rates. (F) Schedule of General Fund expenditures. (G) Schedule of temporary investments - all funds. (H) Analysis of taxes levied and receivable (I) Analysis of changes in general fixed assets and organizational costs (J) General long-term debt service requirements - by year (K) Analysis of changes in general long-term debt. (L) Comparative schedule of revenues and expenditures -five years (M) Insurance coverage (N) Board members, key administrative personnel and consultants. (0) Management letter to Board of Directors. Annual Filing Affidavit TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. I (E) SERVICES AND RATES September 30,2001 1. Services provided by the District: Retail Water rn Wholesale Water rn Drainage rn Retail Wastewater Wholesale Wastewater Irrigation ParksIRecreation Fire Protection Security Solid WastejGarbage 17 Flood Control Roads rn Participates in joint venture, regional system and/or wastewater service (other than emergency interconnect) Other 2. Retail Rates Based on 518" Meter: Retail Rates Not Applicable Most prevalent type oi meter (if not a 5/8") N/A Flat Rates per 1.000 Minimum Minimum Rate Gallons Over Charge Usage Y/N Minimum Usage Levels WATER: 5 11.00 0 No 5 2.00 0 to 6.000 No 2.15 6.000 to 12,000 No 2.25 12.000 to 25.000 No 2.35 More than 25,000 NOTE: Out of district water rates are determined by contract WASTEWATER: 11.00 0 No 5 2.00 0 to 6,000 No 2.15 6,000 to 12.000 No 2.15 More than 12,000 GOLF COURSE: 0 Yes / $1.000 NIA 0 to 300,000 2.35 300.001 to + STORM DRAIN ASSESSMENT: 5 1.00 NIA Yes NOTE: All rates above were amended to effect beginning August 1,2001 District employs winter averaging for wastewater usage? yes Ci No rn Total water and wastewater charges per 10,000 gallons usage (including surcharges) -efiective August 1. 2001. First 10,000 gallons used 564.20 Next 10,000 gallons used 25.60 Next 10,000 gallons used and subsequent 23.00 Maximum residential wastewater charge is for 12,000 gallons or 526.52. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (E) SERVICES AND RATES (Continued) September 30, 2001 3. Retail Service Providers: Number of retail water and/or wastewater* connections within the District as of the fiscal year end. Provide actual numbers and single family equivalents (ESFC) Inactive Active Active Connections Connections (ESFC) (ESFC) ** Single Family 1,147 1.147 0 Multi-Family 11 132 0 Commercial 79 308 0 Other - recreational centers, government & VFD 15 58 0 TOTAL 1,252 1,645 0 * Number of connections relates to water service, if provided. Otherwise, the number of wastewater connections should be provided. ** 'Inactive" means that water and wastewater connections were made, but service is not being provided. 4. Total water consumption (in thousands) during the fiscal year: Gallons pumped into system: Gallons billed to customers: 5. Standby Fees: Does the District Assess standby fees? Yes W No For the most recent full fiscal year, FY 2001: Debt Service Operations and maintenance Total levy Total Collected Percentage Collected Total levy Total Collected Percentage Collected Have standby fees been levied in accordance with Water Code Section 49.231, thereby constituting a lien on property? Yes No Kl - * Standby fees are levied by the District and constitute a lien under recorded deed restrictions or covenants pursuant to Section 293.150 of Title 30 of Texas Administrative Code. TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (E) SERVICES AND RATES (Continued) September 30! 2001 6. Anticipated sources of funds to be used for debt service payments in the District's following iiscal year: a. Debt Service Tax Receipts 5 734,174 b. Surplus Construction Funds 0 c. Water andlor Wastewater Revenue 0 d. Standby fees 0 e. Debt Service Fund Balance To Be Used 0 f. Interest Revenues 0 g. Other (Describe) 0 TOTAL ANTICIPATED FUNDS TO BE USED 5734.174 7. Location of District: Counties in which district is located: Denton, Tarrant Is the District located entirely within one county? Yes No Is the District located within a city? Not at all Entirely Partially City in which district is located. Town of Troohv Club. Town of Westlake. Is the District located within a city's extra territorial jurisdiction (ETJ)? Entirely Partially [7 Not at ell Unknown ETJ's in which district is located. Is the General Membership of the Board appointed by an office outside the District? Yes No If yes, by whom? CURRENT Personnel Professional fees: Auditing Legal Engineering TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (F) SCHEDULE OF GENERAL FUND EXPENDITURES September 30, 2001 Fire Operating Department Department Current Year Prior Year $ - S 13,002 5 13.002 $ 832,499 Purchased services for resale: Bulk water purchases 753,487 Contract services: Tax administration fee Utilities and telephone 187,508 Repairs and maintenance 14.256 69.796 84.052 220,681 DPS Joint Venture Contribution 258,026 258,026 326.439 Other operating costs 79.030 Administrative expenditures: Directors fees 4,944 Office supplies 269 269 9.625 Insurance and bands 3,100 3,100 21.545 Other admin.expenditures 5,494 5,494 134,031 Capital outlay 107.433 Debt service TOTAL EXPENDITURES 5 14,256 S 370,777 S 385.033 S 2,740.209 Number of employees employeed by the District: Full time Part time Note: The Master District has been removed for current year. It is presented separately as Trophy Club Master District Joint Venture TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (G) SCHEDULE OF TEMPORARY INVESTMENTS September 30, 2001 ldentiiication Interest Maturity Balance Accrued Interest Funds Number Rate Date End of Year End of Year General Fund TexPool 06133-2489 6.49% Demand $ 902,032 Paid daily TexPool 061 33-3821 6.49% Demand 221 Paid daily Total 902.253 Debt Service Fund T~xPool 061 33-3333 6.4956 Demand 204.220 Paid Daily Total -All Funds $ 1,106,473 Taxes receivable, beginning of year 2000 tax levy Total to be accounted for Less collections, write offs &adjustments: Current year Prior years Total TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (H) ANALYSIS OF TAXES LEVIED AN0 RECEIVABLE September 30, 2001 General Fund Debt Operations Fire Total Service Total Taxes receivable, end of yea1 Taxes receivable by year 1989 and prior 1990 1991 1992 1993 1994 1995 1996 1997 1999 2000 - I axes receivable, end of year Property valuations (in 000's): Land Irnprovernenls Personal property Exemptions Tax rate per $100 valuation: Operations Fire Department Debt Sewice Total tax rate per $100 valuation Tax Levy: Percent of taxes collected to taxes levied: TROPHY CLUB MUNICIPAL UTILIW DISTRICT NO. 1 (H) ANALYSIS OF TAXES LEVIED AND RECEIVABLE (Continued) September 30, 2001 - I ax rate for any other special district which (a) encompass less than a county, (b) provides water, wastewater collection, drainage or roads to property in the district and (c) taxes property in the district. Name of Special Districts Service Provided Tax Rate Total rate (s) of special districts 5 -- Tax rates (per $100 net taxable value) for all overlapping jurisdictions, Include any taxing entities which overlap 10% or more of the District. Denton Tarrant County County County Citv Dentonnarrant $ 0.23193 5 0.27479 Town oi Troohv Club 0.46051 School District Northwest l~~i~arroll ISD 1.69136 1.88500 2.38380 2.15979 Special Districts no1 included above Hospital District 0.23407 Tarrant County Junior College 0.10641 Total Special Districts 0.34048 Total District Tax Rate 0.24000 0.24000 Total Overlapping Tax District 5 2.62380 $ 2.74027 TROPHY CLUB MUNICIPAL UTlLiTY DISTRICT NO. 1 (I) ANALYSIS OF CHANGES IN GENERAL FIXED ASSETS September 30, 20C1 Physical Facilities: Land Buildings Water system Sanitary wastewater system Drainage system Machinery and equipment Autos and trucks Furniture and fixtures Engineering fees Construction in Progress Totai Physical Facilities District Organizational Cosls -Creation Period: Engineering and surveys Filing fees, licenses, legal notice & permits Legal fees Director fees and per diem Other costs District Oroanizational Costs - Construclion Period: - Legal fees Financial consulting fees Operating Bond interest Amortized bond discount Totai District Organizalional Costs - I otai Physical Facilities & organization costs Amounts Provided By: General Fund: Dedicated by developers Revenue Debt Service Fund - Revenue Capital Projects Fund: Bond proceeds Revenue Baiance 9/3012000 Balance Additions Disposals 9130/2001 Balance Balance 9/3012000 Disposals Additions 9/30/2001 Tctai Amounts Provided TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (J) GENERAL LONG-TERM DEBT SERVICE REQUIREMENTS - BY YEARS September 30, 2001 Series 1993 combination Tax Bonds Due During Fiscal Principal Due Interest Due Years Ending 1 -Sep Mar IISep 1 Total TROPHY CLUB MUNiClPAL UTILITY DISTRICT NO. 1 (J) GENERAL LONG-TERM DEBT SERVICE REQUIREMENTS - BY YEARS (Continued) September 30,ZOCl Ser es 1996 Pun c Prgoer~y Finance Contracl~al Obl1ga119ns DL~ DLI nq F scs Pr~nc pal DLE niElESI Dde Years ~nding l-sep Mar l/Sep 1 Total TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (J) GENERAL LONG-TERM DEBT SERVICE REQUIREMENTS - BY YEARS (Continued) September 30,ZOCl Series 1997 Combination Tax Bonds Due During Fiscal Principal Due Interest Due Years Ending 1 -Ssp Mar l1Sep 1 Total 2011 380,000 18,620 398.620 3,215,000 $ 756,455 $ 3,971,455 Discount (124,377) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (J) GENERAL LONG-TERM DEBT SERVICE REQUIREMENTS - BY YEARS (Continued) September 30, 2001 Series 1999 Public Property Finance Contraclual Obligations Due During Fiscal Principal Due Interest Due Years Ending I -Sep Mar 1ISep 1 Total TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (J) GENERAL LONG-TERM DEBT SERVICE REQUIREMENTS - BY YEARS (Continued) September 30, 2001 Annual Requirements for All Series Due During Fiscal Total Total Total Principal Years €"ding Principal Due lnteresl Due 8 Interest Due TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (K) ANALYSIS OF CHANGES IN GENERAL LONG-TERM September 30, 2001 Series Series Series Series 1993 1996 CO's 1997 Tax 1999 CO's Total Interest rate 3.25-5.996 5,5070 3.25.5.956 5.50% Date interest payable 311 8 911 1211 8 611 311 8 911 411 Maturity date Bonds outstanding at beginning of year $ 2,595,000 5 344.000 $ 3,266,501 $ 60.000 S 6,265,501 Accretion of capital appreciation bonds Bonds sold during current year Retirements of principal (315,000) (42,000) (200.000) (1 0,000) (567.000) Bonds outstanding at end of year S 2,260,000 $ 302,000 $ 3,090,623 S 50.000 S 5,722,523 Retirements of interest $ 145.565 5 17.768 5 130.280 5 3,300 5 296.913 TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (K) ANALYSIS OF CHANGES IN GENERAL LONG-TERM (Continued) September 30, 20C1 Paying agents Name & City: Series 1989, Series 1993, and Series 1997 Series 1996 and 1999 JP Morgan Chase P.O. Box 21 9053 Dallas, Texas 75221-9053 Texas National Bank 3205 E. Hwy 114 Southlake, Texas 76052 Tax Other Refunding Bond Authority Bonds Bonds Bonds Amount authorized by voters 5 12,344,217 $ 5 Amount issued (1 1,115,000) Remaining to be issued 5 1,229,217 $ 5 The general obligation bonds were authorized on October 7, 1975, Debt Service Fund cash and cash equivalents balance as of September 30,2001: 5- Average annual debt sewice payment (principal & interest) for remaining term of debt:$- TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (L) COMPARATIVE SCHEDULES OF REVENUE AND EXPENDITURES - GENERAL FUND September 30,2001 Amaunts Percent of total revenue REVENUE 2001 2000 1999 1998 1997 2001 2000 1999 1998 1997 ----- Water and sewer service 5 - $ 2,384,991 $ 2,100,966 $ 2,062.330 $ 1,660,973 0.0% 79.3% 73.1% 77.8% 58.0% Inspeclion &tap connection fees 64,403 94,455 83,981 63,805 0.0% 2 3.3% 3.2% 2.256 Ad valorem property twes 263,059 142,693 368,892 303,944 259.468 72.5% 4.7% 12.8% 11.5% 9.1% Penaities and interest 1.422 36,150 36.280 33,853 31.384 0.4% 1.2% 1.3% 1.3% 1.1% Interest earned 69,713 116,548 84,208 74.393 92,101 19.2% 3.9% 2.97'. 2.856 3.2% Miscellaneous and other 28.754 263.933 85,991 91,236 295.157 7.9% 8.8% 3.07'. 33.4% 10.3% Proceeds from debt 105,000 458,600 0.0% 0.0% 3.706 0.0% 16.0% ----- Tolai revenue 362,948 3,008,718 2,875,792 2,649,737 2,861,486 100.0% 100.0% 100.0% 100.0% 100.0% ----- MPENDINRES Purchased water and sewer services Salari~, wagffi and employee benefits Professional fees Recurring operating expenditures Contribution to Trophy Club I Wesllake Dept. of Public Safety Joint Venture Capital outlay Debt service Payment to escrow agent Total Expenditures Excess (deficiency) of revenues over (under) expenditures S (Z,085) $ 268,509 $ 219,049 $ 53,025 $ (55.245) ----- I 8.9% 7.656 2.0% -1.956 ----- Total Aclive Retail Water andior Wastewater Connections 1.252 1,211 1,179 1,106 1,088 (Continued) TROPHY CLUB MUNICIPAL UTILITY DiSTRlCT NO. 1 (L) COMPARATiVE SCHEDULES OF REVENUE AND EXPENDITURES - DEBT SERVICE FUND (Continued) September 30,2001 Amounts Percent of total revenue REVENUE 2001 2000 1999 1998 1997 2001 2000 1999 1998 1997 Ad valorem property taxes $ 740,089 $ 604.423 $ 738,161 $ 700.912 $ 649,257 91.555 95.5% 96.7% 96.5% 15.996 Penalties and interest 4.984 4.800 4,836 7.033 2.158 0.655 0.8% 0.6% 1.0% 0.1% Interest earned 23.352 23.642 20,326 18,601 17.174 2.955 3.75'. 2.77'. 2.6% 0.495 Miscellaneous and other 40,295 5.05S 0.075 0.0% 0.0% 0.0% Proceeds from debt issue Total revenue EXPENDITURES Principal retirement 515,000 455.000 400.000 300,000 405.000 63.7% 71.975 52.4% 41.355 9.9% Interest and fiscal charges 277,091 298,715 316.260 341.998 330.772 34.396 47.27'. 41.45'. 47.1% 8.1Sb Payn~ent to refunding bond agent 3.337.767 0.0% 0.0% 0.0Sb 0.0% 82.076 ~ebi issue costs Totai Expenditures Excess (deficiency) of revenues over (under) expenditures $ 16,629 $ (120.850) $ 47,083 $ 84.548 $ (61.180) 2.1% -19.155 6.2% 11.6% -1.575 TROPHY CLUB MUNICIPAL UTILITY DISTRiCT NO. 1 (M) INSURANCE COVERAGE September 30, 20C1 Type oi Policy Amount oi Corporation Clause Type oi coverage Coverage Name Stock!MutualCo-insuranc' DISTRICT Director and Officers Liability $ 5,000.000 National Union Fire Stock None Building 8 Contents and Water System 5,789,000 National Union Fire Stock 100% Extra expense 50,000 Comprehensive General and Contractual Liability: National Union Fire Stock None General Aqqreqate 4.000.000 .- - Products 8 Completed Operations Aggregate 2.000.000 Personal 8 Advertisinn lniurv 2.000.000 - .. Fire Damage Medical Expense Each Occurance (3) Inland Marine Crime Declarations Blanket Employee Dishonesty and Bond Forgery or Alteration Contractor's equipment Umbrella Liability General Aggregate Products B Cornpleted Operations Aggregate Pollution liability Commercial Automobile Liability Workers' Compensation 58,753 National Union Fire Stock None 100.000 National Union Fire Stock None 50,000 41,375 National Union Fire Stock 90% National Union Fire Stock None 4.000.000 4,000.000 1,000,000 National Union Fire Stock None 1,000.000 American Int'l South Stock None Based on Salary Texas Municipal League Mutual None TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (N) BOARD MEMBERS, KEY ADMINISTRATIVE PERSONNEL AND CONSULTANTS September 30, 2001 Complete District Mailing Address: 100 Municipal Drive, Trophy Club, Texas 76262 District Business Telephone Number: Metro (817) 430-191 1 Fees and Term of Office Expense Title Resident Elected/Expires Reimbursement at of Name and address or Date Hired 9/30/2001 Year End District? Board Members Constance S. White 119 Trophy Club Drive Trophy Club. TX 76262 5/98 - 5/02 $2,400 Director Yes Jim Hase 209 lnverness Secretary1 Trophy Club, TX 76262 5/00 - 5/04 2.000 Treasurer Yes Dean Henry 308 Oakmont Drive Trophy Club. TX 76262 5/00 - 5/04 2,500 President Yes Dave Robison 2 Cricket! Court Trophy Club, TX 76262 5/98 - 5/02 2,100 Director Yes Wesley W. Obermeier 207 Oakmont Trophy Club. TX 76262 5/98 - 5/02 3,700 Vice-President Yes Note: No director is disqualified from serving on this board under the Texas Water Code (Continued) TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1 (N) BOARD MEMBERS, KEY ADMINISTRATIVE PERSONNEL AND CONSULTANTS (Continued) September 30, 2001 Fees and Term of Office Expense Title Resident Elected/Expires Reimbursement at oi Name and address or Date Hired 9/30/2001 Year End District? Key Administrative Personnel Cathy Morgas 2158 Wedgewood Drive District Grapevine, TX 76051 2/1/1991 589,630 Manager No *Assumed responsibility of District Manager on 5/8/2000 Denton County Appraisal District P.O. BOX 2816 Denton. TX 76202 Rutiedge Crain & Company, PC 2401 Garden Park Court. Suite B Arlington. TX 76013 Carter 8 Burgess P.O. Box 985006 Fort Worth. TX 76185-5006 Freese 8 Nichols, Inc. 4055 lntl Plaza, Suite 200 Fort Worth, TX 76109 Camp. Dresser 8 McKee, Inc P.O. Box 74594 Dept. Member 44 Chicago. IL 60690 4/1/1981 9,939 Appraiser No 91511 997 6,150 Auditors No Consulting 1983 45,335 Engineer No Consulting 7/1/2001 20,702 Engineer No Consuiting 1 O/l/2000 212.323 Engineer No Whitaker. Chalk, Swindle 8 Sawyer, LLP 3500 City Center, Tower iI Legal Fort Worth, TX 76102 10/1 11 999 5,462 Counsel No ANNUAL FILING AFFIDAVIT THE STATE OF TWS 1 J COUNTY OF DENTON 1 (Name of Duly Authorized District Representative) of the Trophv Club Municipal Utilitv District No. 1 (Name oi District) hereby swear, or affirm, that the district named above has reviewed and approved at a meeting of the Board of Directors of the District on the -day of , 19- its annual audit report of the fiscal year or period ended September 30. 2001 and that copies of the annual audit report have been filed in the district office, located at 100 Municipal Drive, Trophy Club. Texas, 76262. This annual filing affidavit and the attached copy of the annual audit report are being submitted to the Texas Natural Resource Conservation Commission in satisfaction of all annual filing requirements within Section 49.194 of the Texas Water Code. Date: . 19- (Signature of District Representative) (Typed Name and Title of District Official) Sworn to and subscribed to before me this - day of ,19-. (Seal) (Signature of Notary) My Commission Expires On: , 19-, Notaiy Public in and for the State of Texas. ANNUAL FILING AFFIDAVIT THE STATE OF TEXAS COUNTY OF DENTON I, Cathy M. Morgas (Name of Duly Authorized District Representative) of the Trophv Club Municipal Utility District No. 1 (Name of District) hereby swear, or affirm, that the district named above has revieweb and approved at a meeting of the Board of Directors of the District on the 14 day of February , 1@00$s annual audit report of the fiscal year or period ended September 30. 2001 and that copies of the annual audit report have been filed in the district office. located at 100 Municipal Drive. Trophy Club, Texas, 76262. This annual filing affidavit and the attached copy of the annual audit report are being submitted to the Texas Natural Resource Conservation Commission in satisfaction of all annual filing requirements within Section 49.194 of the Texas Water Code. i-\ \. R 'A Date: February 15, rw - 2002 bignature of District ~e~rebntative) Cathy M. Morgas, District Manager (Typed Name and Title of District Official) Sworn to and subscribed to before me this 2 day of February xw 200,2 My Commission Expires On: 12/03/2005 ,yB-, Notary Public in and for the State of Texas.