HomeMy WebLinkAboutFY Ended September 30, 2010TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2010
C O N T E N T S
Page
FINANCIAL SECTION
ANNUAL FILING AFFIDAVIT ....................................................................................................................... i
INDEPENDENT AUDITOR'S REPORT ..................................................................................................... 1
MANAGEMENT’S DISCUSSION AND ANALYSIS (unaudited) ................................................................. 3
BASIC FINANCIAL STATEMENTS
Government–wide Financial Statements
Statement of Net Assets ......................................................................................................... 11
Statement of Activities ............................................................................................................ 12
Fund Financial Statements
Governmental Funds
Balance Sheet .................................................................................................................. 13
Reconciliation of the Governmental Funds Balance Sheet
to Statement of Net Assets ....................................................................................... 14
Statement of Revenues, Expenditures and Changes in
Fund Balances ......................................................................................................... 15
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities ................................................................................... 16
Notes to Basic Financial Statements ............................................................................................. 17
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule – General Fund ........................................................................ 31
Notes to Required Supplementary Information .............................................................................. 32
INDIVIDUAL SCHEDULES AND OTHER SUPPLEMENTARY INFORMATION
REQUIRED BY TEXAS COMMISSION ON ENVIRONMENTAL QUALITY (TCEQ)
Budgetary Comparison Schedule -Debt Service Fund ...................................................................... 33
TSI-1 Service and Rates ............................................................................................................. 34
TSI-2 General Fund Expenditures and Other Financing Uses.................................................... 37
TSI-3 Temporary Investments..................................................................................................... 38
TSI-4 Taxes Levied and Receivable ........................................................................................... 39
TSI-5 Long-Term Debt Service Requirements – By Year ........................................................... 40
TSI-6 Changes in Long-Term Bonded Debt................................................................................ 44
TSI-7 Comparative Schedules of Revenues and Expenditures - Five Years.............................. 45
TSI-8 Board Members, Key Personnel, and Consultants ........................................................... 47
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ANNUAL FILING AFFIDAVIT
THE STATE OF TEXAS }
COUNTY OF DENTON }
I, ___________________________________________________________________________
(Name of Duly Authorized District Representative)
Of the __________________Trophy Club Municipal Utility District No.1________________________
(Name of 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________________, ________, its annual audit report for the fiscal
year or period ended September 30, 2010 and that copies of the annual audit report have been filed in the district
office, located at 100 Municipal Drive, Trophy Club, Texas, 76262.
The annual filing affidavit and the attached copy of the audit report are being submitted to the Texas Commission
on Environmental Quality in satisfaction of the annual filing requirements of Texas Water Code Section 49.194.
Date:___________________ , 20____By:______________________________________________
(Signature of District Representative)
______________________________________________________
(Typed Name & Title of above District Representative)
Sworn to and subscribed to before me this ________ day of_______________________ , _________.
(SEAL) __________________________________________________
(Signature of Notary)
My Commission Expires On: ______________________, ______________.
Notary Public in the State of Texas.
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
Trophy Club Municipal Utility District No. 1
Trophy Club, Texas
We have audited the accompanying financial statements of the governmental activities and
each major fund of the Trophy Club Municipal Utility District No. 1, (the District), as of and for
the year ended September 30, 2010, which collectively comprise the District’s basic financial
statements as listed in the table of contents. These financial statements are the responsibility
of the District’s management. Our responsibility is to express opinions on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the
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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, and each major fund of the
Trophy Club Municipal Utility District No. 1 as of September 30, 2010, and the changes in
financial position for the year then ended, in conformity with accounting principles generally
accepted in the United States of America.
The management’s discussion and analysis, and budgetary comparison information on pages 3
through 10 and 31 through 32, are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United
States of America. We have applied certain limited procedures, which consisted principally of
inquiries of management regarding the methods of measurement and presentation of the
supplementary information. However, we did not audit the information and express no opinion
on it.
In accordance with Government Auditing Standards, we have issued a report dated January 18,
2011 on our consideration of the District’s internal control over financial reporting and our tests of
compliance with certain provisions of laws, regulations, contracts and grants. The purpose of that
report is to describe the scope of testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. The report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing the results of our
audit.
Trophy Club Municipal Utility District No. 1
Page 2
2
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise Trophy Club Municipal Utility District No. 1’s basic financial statements.
The accompanying individual schedules and other supplementary information listed in the table
of contents are presented for the purpose of additional analysis and are not a required part of
the basic financial statements. The accompanying individual schedules and other
supplementary information have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
January 18, 2011
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2010
3
Trophy Club Municipal Utility District No. 1, Texas (the “District”) Management’s Discussion and
Analysis (MD&A) is a narrative overview and analysis designed to provide the reader a means
to identify and understand the financial activity of the District and changes in the District’s
financial position during the fiscal year ended September 30, 2010.
The Management’s Discussion and Analysis is supplemental to, and should be considered
along with, the District’s financial statements.
Financial Highlights
At the close of the fiscal year, the assets of the District exceeded its liabiliti es by
$9,652,128. Of this amount, $2,359,606 is unrestricted net assets and may be used to meet
the District’s ongoing commitments to its citizens and creditors.
The District’s net assets increased by $1,331,946 as a result of operations.
At the end of the fiscal year, the District’s governmental funds reported a combined fund
balance of $4,990,903.
As of September 30, 2010, the unreserved fund balance of the General Fund was
$2,990,479, which is 60% of total General Fund expenditures.
The governmental long-term debt bond obligations of the District increased by $945,000.
Overview of the Financial Statements
The MD&A is intended to introduce the reader to the District’s basic financial statements, which
are comprised of three components: 1. Government-Wide Financial Statements, 2. Fund
Financial Statements, and 3. Notes to Basic Financial Statements. The report also contains
other required supplementary information in addition to the basic financial statements.
Government-Wide Financial Statements – the government wide financial statements are
designed to provide the reader with a general overview of the District’s finances in a way that is
comparable with financial statements from the private sector. The government-wide financial
statements consist of two statements:
1. The Statement of Net Assets – (Page 11) this statement presents information on all of
the District’s assets and liabilities; the difference between the two is reported as net
assets. Over an extended period, the increase or decrease in net assets will serve as a
good indicator of whether the financial position of the District is improving or
deteriorating.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2010
4
Overview of the Financial Statements - continued
2. The Statement of Activities – (Page 12) gives information showing how the District’s net
assets have changed during the fiscal year. All revenues and expenses are reported on
the full accrual basis so certain revenue and expense items will result in cash flows in
future fiscal periods (such as uncollected taxes or unused vacation leave).
In the above statements, the District’s consolidated operations are presented as Governmental
Type Activities - where the District’s basic activities are reported as administration.
Note: the government-wide financial statements are found on pages 11 and 12 of this
report.
Fund Financial Statements - A fund is a grouping of related accounts that is used to maintain
control over resources that have been set aside for specific activities or objectives. Fund
financial statements provide detailed information about the most important funds and not about
the District as a whole as in the government-wide financial statements.
The District uses fund accounting to demonstrate compliance with finance related legal
requirements which can be categorized as governmental fund activities.
Governmental Funds – All of the District’s activities are reported in governmental funds. They
are used to account for those functions known as governmental activities. But unlike
government-wide financial statements, governmental fund financial statements focus on how
monies flow into and out of those funds and their resulting balances at the end of the fiscal
year. Statements of governmental funds provide a detailed short-term view of the District’s
general government operations and the basic services it provides. Such information can be
useful in evaluating a government’s short-term financing requirements.
The District maintains three governmental funds. Information is presented separately in the
Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues,
Expenditures and Changes in Fund Balances for the General Fund, Debt Service Fund and
Capital Projects Fund, all of which are considered to be major funds.
The District adopts annual appropriated budgets for the general fund, and debt service funds.
A budgetary comparison statement is provided for each annually budgeted fund to demonstrate
compliance with its budget.
Notes to the Basic Financial Statements – The notes provide additional information that is
essential to a full understanding of the data presented in the government-wide and fund
financial statements. The notes to the basic financial statements can be found on pages 17-30.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2010
5
Overview of the Financial Statements - continued
Government-wide Financial Analysis
The management discussion and analysis highlights the information provided in both the
Statement of Net Assets and Statement of Activities in the government-wide financial
statements. It may serve over an extended period of time, as a useful indicator of the District’s
financial position. At the end of the fiscal year, the District’s assets exceeded liabilities by
$9,652,128. Of this amount $7,030,474 (72.8%) reflects the District’s investment in capital
assets (e.g., land, buildings, machinery and equipment, net of accumulated depreciation), less
any related outstanding debt used to acquire those assets. The District uses these capital
assets to provide service to the community; therefore these assets are not available for future
spending.
Table 1
Condensed Statements of Net Assets
Governmental Governmental
Activities Activities
2010 2009
Current and other 6,211,302$ 3,922,519$
Capital assets 13,569,240 13,321,251
Total Assets 19,780,542 17,243,770
Long-term liabilities 9,080,647 8,194,694
Other liabilities 1,047,767 728,894
Total Liabilities 10,128,414 8,923,588
Net Assets:
Invested in capital assets,
net of related debt 7,030,474 6,094,174
Restricted 262,048 243,925
Unrestricted 2,359,606 1,982,083
Total Net Assets 9,652,128$ 8,320,182$
District operational analysis – The following table provides a summary analysis of the District’s
consolidated operations for the fiscal years ended September 30, 2010 and 2009.
Governmental activities have increased the District’s net assets by $1,331,946, which amounts
to a 16% increase in net assets for the year ended September 30, 2010.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2010
6
Changes in net assets
Table 2
Changes in Net Assets
Governmental Governmental
Activities Activities
2010 2009
Revenue:
Program revenue
Charges for services 4,351,155$ 4,242,862$
Operating Grants and Contributions 11,200 33,653
General Revenue
Ad valorem taxes 2,216,287 2,405,928
Unrestricted investment earnings 12,724 24,860
Miscellaneous 179,502 165,308
Total Revenue 6,770,868 6,872,611
Expenses:
General government 4,123,417 4,847,131
Fire 997,997 770,108
Interest and fiscal charges 317,508 345,036
Total Expenses 5,438,922 5,962,275
Increase in net assets 1,331,946$ 910,336$
Financial analysis of the District’s funds
Governmental Funds - the main focus of the District’s governmental funds is to provide
information on the flow of monies to and from the funds, and to note the unreserved fund
balance, which is a good indicator of resources available for spending in the near term. The
information derived from these funds is highly useful in assessing the District’s financial
requirements. The unreserved fund balance may serve as a useful measure of the
government’s net resources available for use at the fiscal year-end.
At the end of the fiscal year, the District’s governmental funds reported combined ending fund
balances of $4,990,903, of which 94.1%, or $4,696,336, is unreserved and available to the
District for future spending. Additional fund balance of $272,132 is not available for spending
and is committed to pay debt service.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2010
7
General Fund budgetary highlights
Revenue: Revenues were $165,771 less than budgeted
Water and wastewater charges were $349,582 (8.2%) less than budgeted. The budget
was based on a normal year and the District experienced wet, mild weather reducing the
use of water.
Utility fees of $80,500 were not budgeted. They reflect the amount of fees received in
excess of what was budgeted in the Debt Service Fund.
Expenses: Expenses were $610,241 less than budgeted
Electricity costs were $116,067 less than budget due to reduced electric rates and a
lower use due to mild weather.
Budgeted maintenance and repair costs were $150,691 under budget for the fiscal year.
Capital expenses budgeted for the wastewater treatment plant screen rake installation
of $250,000 and vertical turbine pump for water operations of $155,979 were not
completed during the fiscal year and were carried forward for the 2010-2011 fiscal year.
Debt Service Fund:
Actual debt service fund revenue was $ 30,958 more than budgeted due to the payment
of delinquent taxes. The debt service expenses were $740 less than budgeted.
The debt service fund reserves were increased from $239,434 to $272,132.
Overall:
The District’s revenue totaled $6,786,565 while expenses totaled $7,048,229.
Total fund balance increased from $3,071,612 to $4,990,903; an increase of $1,919,291
or 62.5%.
Capital Asset and Debt Administration
The District’s investment in capital assets for its governmental activities as of September 30,
2010 amounted to $13,569,240, net of accumulated depreciation. This represents a broad
range of capital assets including, but not limited to land, buildings, improvements, machinery
and equipment, vehicles, and water, wastewater treatment, and wastewater collection systems,
as well as, organization costs.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2010
8
Capital asset and debt administration – continued
Table 3
Capital Assets at Year-end
Net of Accumulated Depreciation
Governmental Governmental
Activities Activities
2010 2009
Land 248,093$ 248,093$
Buildings 347,741 357,877
Improvements ofher than buildings 90,630 103,796
Machinery and equipment 787,694 854,109
Vehicles 620,575 533,633
Water system 5,067,026 5,338,964
Wastewater treatment system 3,698,312 4,082,727
Wastewater collection system 1,793,388 2,101,115
Organization costs 314,679 397,813
Construction in Progress 601,102 -
Total 13,569,240$ 14,018,127$
A physical inventory of fixed assets was completed during the fiscal year resulting in the
identification of over $696,000 in capital assets that were previously disposed of, yet were still
on the capital assets listing.
The major additions to capital assets for the fiscal year included $601,102 in Construction in
Progress related to the construction of a fire station.
Capital assets net of depreciation at year end: $13,569,240.
Additional information about capital assets may be found in Notes 1 F and 5 in the notes to
financial statements.
Debt administration
Long-Term Debt – at the end of the current fiscal year the consolidated District had $9,080,647
of general obligation bonds, contractual obligation bonds, notes payable, capital lease
obligations, and accrued compensated absences, an increase of 10.8% from the previous fiscal
year. Of this amount, $8,835,471 is backed by the full faith and credit of the government.
During the fiscal year, $2,000,000 in Tax and Revenue Bonds were issued for the purpose of
constructing a fire station.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2010
9
General debt currently outstanding
Table 4
Outstanding Debt at Year-end
Governmental Governmental
Activities Activities
2010 2009
General obligation bonds 8,280,719$ 7,338,272$
Contract obilgations 554,752 753,250
Notes payable 196,052 17,895
Capital lease obligations 19,774 62,660
Compensated absences 29,350 22,617
Total 9,080,647$ 8,194,694$
Economic factors and next year’s budgets and rates:
General fund fiscal 2011 budgetary highlights
Revenue: The District’s operational revenue budget decreased by $77,656.
Property tax revenue budget decreased by $191,540 due to a shift in the tax rate from
operations and maintenance to debt service.
Water and wastewater revenue budget increased by $69,232 due to an increase in
utility rates.
Penalty and service charges decreased by $35,740 due to decreased estimates of
Trophy Club Country Club effluent charges, and the use of out of district portable
meters.
Utility fees revenue increased $167,900 due to the increase in the overall estimated
number of related new building permits from 150 to 180, and a reallocation of the fees to
the Debt Service Fund.
The transfer from reserves for technology improvements.
Expenses: The District’s operational expense budget increased by $178,798.
The majority of the increase is related to the four year plan to replace all existing meter
heads ($85,000).
Overall:
The District’s operational budget is anticipated to have expenses of $4,848,732 on
revenues of $4,747,590, and the use of $101,142 of reserves.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2010
10
Debt Service:
Budgeted debt service revenues have decreased from $1,367,310 in fiscal 2010 to
$1,319,812 in fiscal 2011, a decrease of $47,498, or a 3.5% decrease.
Debt service appropriations increased from $1,367,310 to $1,498,059 as a result of the
$2 million bond issue for the construction of a fire station.
The Debt Service Fund is budgeted for a $178,247 use of reserves.
The District’s overall budget for revenue increased from $7,227,673 in fiscal 2010 to
$7,275,586 in fiscal 2011, a 0.7% increase. Overall, appropriations increased from
$7,227,673 to $7,554,975, a 4.5% increase.
Requests for information
This financial report is designed to provide a general overview of the District’s consolidated
finances for all interested parties. Questions concerning any of the information in this report or
requests for additional information should be directed to the Trophy Club Municipal Utility
District No. 1, Senior Accountant, 100 Municipal Drive, Trophy Club, Texas 76262.
BASIC FINANCIAL STATEMENTS
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2010
The Notes to Financial Statements are
an integral part of this statement.
11
Governmental
Activities
Cash and cash equivalents 5,393,389$
Receivables
Accounts receivable, net 565,902
Taxes 40,015
Other 7,221
Due from other governments 18,093
Prepaids 22,435
Capital assets:
Land 248,093
Buildings 506,790
Improvements other than buildings 265,018
Machinery and equipment 1,179,578
Vehicles 1,615,129
Water system 8,080,057
Wastewater treatment system 5,441,925
Wastewater collection system 2,863,442
Organization costs 2,331,300
Construction in progress 601,102
Accumulated depreciation (9,563,194)
Deferred charges 164,247
TOTAL ASSETS 19,780,542$
Accounts payable 706,954$
Accrued liabilities 22,159
Accrued interest payable 31,630
Due to other governments 123,092
Customer deposits 163,932
Noncurrent liabilities:
Debt due within one year 1,401,296
Debt due in more than one year 7,679,351
Total liabilities 10,128,414
Invested in capital assets, net of related debt 7,030,474
Restricted for debt service 262,048
Unrestricted 2,359,606
TOTAL NET ASSETS 9,652,128$
LIABILITIES
NET ASSETS
ASSETS
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2010
The Notes to Financial Statements are
an integral part of this statement.
12
Net (Expenses)
Revenue and
Changes in
Net Assets
Operating
Charges for Grants and Governmental
Program Activites Expenses Services Contributions Activities
Governmental activities
General government 463,386$ 4,351,155$ -$ 3,887,769$
Water operations 1,605,773 - - (1,605,773)
Wastewater operations 653,588 - - (653,588)
Wastewater collection system 343,863 - - (343,863)
Utility billing 170,608 - - (170,608)
Directors 22,917 - - (22,917)
Manager's office 380,369 - - (380,369)
Human resources 41,201 - - (41,201)
Finance 179,979 - - (179,979)
Facilities management 79,075 - - (79,075)
Information systems 182,658 - - (182,658)
Fire 997,997 - 11,200 (986,797)
Interest on long term debt 317,508 - - (317,508)
Total governmental
activities 5,438,922$ 4,351,155$ 11,200$ (1,076,567)
General Revenues:
Ad valorem taxes 2,216,287
Investment income 12,724
Miscellaneous 179,502
Total general revenues 2,408,513
Change in net assets 1,331,946
Net Assets - beginning of year, as restated 8,320,182
Net Assets - end of year 9,652,128$
Revenues
Program
Governmental Activities
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2010
The Notes to Financial Statements are
an integral part of this statement.
13
Debt Capital Total
General Service Projects Governmental
Fund Fund Fund Funds
Assets
Cash and cash equivalents 3,301,452$ 272,132$ 1,819,805$ 5,393,389$
Receivables:
Accounts receivables, net 565,902 - - 565,902
Taxes 18,469 21,546 - 40,015
Other receivables 7,221 - - 7,221
Due from other governments 18,093 - - 18,093
Prepaids 22,435 - - 22,435
TOTAL ASSETS 3,933,572$ 293,678$ 1,819,805$ 6,047,055$
Liabilities
Accounts payable 593,006$ -$ 113,948$ 706,954$
Accrued liabilities 22,159 - - 22,159
Customer deposits 163,932 - - 163,932
Due to other governments 123,092 - - 123,092
Deferred revenue 18,469 21,546 - 40,015
Total liabilities 920,658 21,546 113,948 1,056,152
Fund Balances
Reserved for prepaids 22,435 - - 22,435
Unreserved and undesignated, reported in:
General fund 2,990,479 - - 2,990,479
Debt service fund - 272,132 - 272,132
Capital projects fund - - 1,705,857 1,705,857
Total fund balances 3,012,914 272,132 1,705,857 4,990,903
TOTAL LIABILITIES AND
FUND BALANCES 3,933,572$ 293,678$ 1,819,805$ 6,047,055$
LIABILITIES AND FUND BALANCES
ASSETS
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO STATEMENT OF NET ASSETS
SEPTEMBER 30, 2010
The Notes to Financial Statements are
an integral part of this statement.
14
Total fund balances - governmental funds 4,990,903$
Amounts reported for governmental activities in the statement of net assets
are different because:
Capital assets used in governmental activities are not current financial resources
and, therefore, are not reported in the governmental funds balance sheet.13,569,240
Costs associated with the issuance of long-term debt are expensed when incurred
in governmental funds. These costs are capitalized and amortized over the
life of the debt in the government wide financial statements.164,247
Revenue reported as deferred revenue in the governmental funds balance sheet
is recognized as revenue in the government wide statement financial statements.40,015
Interest payable on long term debt does not require current financial resources,
therefore, interest payable is not reported as a liability in the governmental
funds balance sheet.(31,630)
Accrued vacation does not require the use of current financial resources;
therefore accrued vacation is not reported as a liability in the governmental
funds balance sheet.(29,350)
Long-term liabilities, including bonds payable are not due and payable in the
current period and, therefore, are not reported in the fund financial statements.(9,051,297)
Net assets of governmental activities 9,652,128$
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2010
The Notes to Financial Statements are
an integral part of this statement.
15
Debt Capital Total
General Service Projects Governmental
Fund Fund Fund Funds
Revenues:
Taxes 1,491,564$ 740,420$ -$ 2,231,984$
Intergovernmental revenues 11,200 - - 11,200
Water and wastewater charges 3,919,084 - - 3,919,084
Standby fees 796 - - 796
Inspection and tap fees 5,775 - - 5,775
Utility fees 80,500 345,000 - 425,500
Investment income 6,171 4,848 1,705 12,724
Miscellaneous 179,502 - - 179,502
Total revenues 5,694,592 1,090,268 1,705 6,786,565
Expenditures:
Current:
General government 119,837 - - 119,837
Water operations 1,882,511 - - 1,882,511
Wastewater operations 711,382 - - 711,382
Wastewater collection system 308,798 - - 308,798
Utility billing 170,608 - - 170,608
Directors 22,917 - - 22,917
Manager's office 380,369 - - 380,369
Human resources 41,201 - - 41,201
Finance 179,979 - - 179,979
Facilities management 79,075 - - 79,075
Information systems 182,658 - - 182,658
Fire 876,521 - - 876,521
Capital Outlay - 644,894 644,894
Debt Service
Principal - 1,055,000 - 1,055,000
Interest and fiscal charges - 311,570 - 311,570
Bond issue costs 80,909 80,909
Total expenditures 4,955,856 1,366,570 725,803 7,048,229
Excess (deficiency) of revenues
over (under) expenditures 738,736 (276,302)(724,098)(261,664)
Other financing sources (uses)
Issuance of bonds - - 2,000,000 2,000,000
Issuance of notes - - 179,955 179,955
Premium on bonds - 1,000 - 1,000
Transfers in - 308,000 250,000 558,000
Transfers out (558,000)- - (558,000)
Total other financing sources (uses)(558,000)309,000 2,429,955 2,180,955
Net change in fund balance 180,736 32,698 1,705,857 1,919,291
Fund Balances - beginning of year 2,832,178 239,434 - 3,071,612
Fund Balances - end of year 3,012,914$ 272,132$ 1,705,857$ 4,990,903$
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
RECONCILIATION OF THE STATEMENT OF REVENUES
EXPENDITURES AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2010
The Notes to Basic Financial Statements are
an integral part of this statement.
16
Net change in fund balances - total governmental funds 1,919,291$
Amounts reported for governmental activities in the statement of activities
are different because:
Depreciation expense on capital assets reported in the statement of activities
does not require the use of current financial resources, therefore, depreciation
expense is not reported as expenditures in the governmental funds.(577,364)
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the costs of those assets is allocated over their
estimated useful lives and reported as depreciation expense. This is the
amount of capital assets recorded in the current period.825,353
Governmental funds reflect the proceeds of capital leases as other financing sources
and payments as expenditures. However, in the government-wide statements,
the proceeds and payments made on capital leases are reflected as changes in
liabilities. This amount reflects the payments under capital leases.42,886
Repayment of principal on long-term debt reduces long-term liabilities in the
statement of net assets, but it is recorded as an expenditure in
the governmental funds.1,255,296
Governmental funds reflect the proceeds from the issuance of bonds and notes
payable as other financing sources; however, in the government-wide
financial statements the proceeds are reflected as increases in liabilities.(2,179,955)
Current year changes in the long term liability for compensated absences do not
require the use of current financial resources; therefore they are not reported
as expenditures in the governmental funds.(6,733)
Governmental funds report the effects of issuance costs, premiums, and deferred
losses on refunding when debt is first issued, whereas the amounts are deferred
and amortized in the statement of activities.74,807
Certain revenues in the government-wide financial statements that do not
produce current financial resources are not reported as revenue in
the governmental funds.(15,697)
Current year changes in accrued interest payable do not require the use of current
financial resources and, therefore, are not reported as expenditures in
governmental funds.(5,938)
Change in net assets of governmental activities 1,331,946$
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
17
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. General Statement
Trophy Club Municipal Utility District No. 1 (the District) was created by an order of the Texas
Commission on Environmental Quality (TCEQ) (formerly the Texas Natural Resources
Conservation Commission) on March 4, 1975 and confirmed by the electorate of the District at a
confirmation election held on October 7, 1975. The Board of Director’s held its first m eeting 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.
On May 9, 2009, citizens voted to consolidate the District and Trophy Club Municipal Utility District
No. 2 (MUD2). As a result, the District reports consolidated activity and balances for the District
and the entities formerly known as MUD2 and the Trophy Club Master District Joint Venture (a
joint venture of MUD1 and MUD2).
The Governmental Accounting Standards Board (GASB) is the accepted standar d 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.
B. Financial Reporting Entity
As required by accounting principles generally accepted in the United States of America, these
financial statements include the activities of the District and any organizations for which the
District is financially accountable or for which the nature and significance of their relationship with
the District are such that exclusion would cause the reporting entity's financial statements to be
misleading or incomplete.
The definition of the reporting entity is based primarily on the notion of financial accountability. A
primary government is financially accountable for the organizations that make up its legal entity. It
is also financially accountable for legally separate organizations if its officials appoint a voting
majority of an organization's governing body and either it is able to impose its will on that
organization or there is a potential for the organization to provide specific financial benefits to, or
to impose specific financial burdens on, the primary government. A primary government may also
be financially accountable for governmental organizations that are fiscally dependent on it.
A primary government has the ability to impose its will on an organization if it can significantly
influence the programs, projects, or activities of, or the level of services performed or provided by,
the organization. A financial benefit or burden relationship exists if the primary government (a) is
entitled to the organization's resources; (b) is legally obligated or has otherwise assumed the
obligation to finance the deficits of, or provide financial support to, the organization; or (c) is
obligated in some manner for the debt of the organization. Some organizations are included as
component units because of their fiscal dependency on the primary government. An organization
is fiscally dependent on the primary government if it is unable to adopt its budget, levy taxes, set
rates or charges, or issue bonded debt without approval by the primary government. Accordingly,
the District has no component units.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
18
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
C. Government-Wide and Fund Financial Statements
The government-wide financial statements (the statement of net assets and the statement of
activities) report information on all of the activities of the District, except for fiduciary funds. The
effect of interfund activity has been removed from these statements. Governmental activities,
which normally are supported by taxes and intergovernmental revenues, are reported separately
from business-type activities, which rely to a significant extent on fees and charges for support.
The activities of the District are comprised only of governmental activities.
The statement of activities demonstrates the degree to which the direct expenses of a given
program are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific program. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given program
and 2) operating or capital grants and contributions that are restricted to meeting the operational
or capital requirements of a particular program. Taxes and other items not properly included
among program revenues are reported instead as general revenues.
Fund Financial Statements
The District segregates transactions related to certain functions or activities in separate funds
in order to aid financial management and to demonstrate legal compliance. These
statements present each major fund as a separate column on the fund financial statements.
The District does not report any non-major funds.
Governmental funds are those funds through which most governmental functions typically are
financed. The measurement focus of governmental funds is on th e sources, uses and
balance of current financial resources. The District has presented the following major
governmental funds:
General Fund
The General Fund is the main operating fund of the District. This fund is used to
account for all financial resources not accounted for in other funds. All general tax
revenues and other receipts that are not restricted by law or contractual agreement to
some other fund are accounted for in this fund. General operating expenditures, fixed
charges and capital improvement costs that are not paid through other funds are paid
from the General Fund.
Debt Service Fund
The Debt Service Fund is used to account for resources accumulated and payments
made for principal and interest on the long-term debt of governmental funds.
Capital Projects Fund
The Capital Projects Fund is used to account for funds received and expended for the
acquisition and construction of infrastructure and other capital assets.
D. Measurement Focus and Basis of Accounting
Measurement focus refers to what is being measured; 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 measurement made, regardless of
the measurement focus applied.
The government-wide statements are reported using the economic resources measurement focus
and the accrual basis of accounting.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
19
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
D. Measurement Focus and Basis of Accounting – Continued
The economic resources measurement focus means all assets and liabilities (whether current or
non-current) are included on the statement of net assets and the operating statements present
increases (revenues) and decreases (expenses) in net total assets. Under the accrual basis of
accounting, revenues are recognized when earned. Expenses are recognized at the time the
liability is incurred.
Governmental fund financial statements are reported using the current financial resources
measurement focus and are accounted for using the modified accrual basis of accounting. Under
the modified accrual basis of accounting, revenues are recognized when susceptible to accrual;
i.e., when they become both 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 be used to pay liabilities of the
current period. The District considers receivables collected within sixty da ys after year-end to be
available and recognizes them as revenues of the current year. Expenditures are recorded when
the related fund liability is incurred. However, debt service expenditures are recorded only when
payment is due.
The revenues susceptible to accrual are interest income and ad valorem taxes. All other
governmental fund revenues are recognized when received.
E. Cash and Investments
The District’s cash and cash equivalents are considered to be cash on hand, demand deposits,
and short-term investments of three months or less from the date of acquisition.
The District’s investment policy requires that all monies be deposited with the authorized District
depository or 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 stat e and
national banks domiciled in this state that are (A) guaranteed or insured by the Federal Deposit
Insurance Corporation, or its successor; or, (B) 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 (1), pledged with third party selected or approved by the
District, and placed through a primary government securities dealer.
All investments are recorded at fair value based on quoted market prices. Fair value is the
amount at which a financial instrument could be exchanged in a current transaction between
willing parties.
F. Capital Assets
Capital assets, which include property, plant, and equipment, are reported in the government-wide
financial statements. All capital assets are valued at historical cost or estimated historical cost if
actual historical cost is not available. Donated assets are valued at their fair market value on the
date donated. Repairs and maintenance are recorded as expenses. Renewals and betterments
are capitalized. Interest has not been capitalized during the construction period on property, plant
and equipment.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
20
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
F. Capital Assets – Continued
Assets capitalized have an original cost of $5,000 or more and over one year of useful life.
Depreciation has been calculated on each class of depreciable property using the straight-line
method. Estimated useful lives are as follows:
Buildings 50 Years
Improvements other than buildings 15 - 30 Years
Machinery and equipment 6 - 15 Years
Vehicles 6 - 12 Years
Water and wastewater systems 30 - 65 Years
G. Accumulated Vacation, Compensated Time and Sick Leave
The District has no employees of its own, but instead, personnel services are furnished under a
contract with the Town of Trophy Club, Texas. The District records an allocation of personnel
costs from the Town in personnel expense accounts rather than as single line item paya ble to the
Town. Accordingly, the District also records current payroll and an allocation in compensated
absences earned by the personnel assigned to it. The District reports this liability using the
Town’s vacation policy; however, the Town retains primary liability for its employee vacation pay.
H. Organizational Costs
The District, in conformance with requirements of the TCEQ, capitalized costs incurred in the
creation of the District. The TCEQ requires capitalization of 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. The District amortizes the organizational
costs using the straight-line method over a period of 22 to 45 years.
I. Net Assets
Net assets represent the difference between assets and liabilities. Net assets invested in capital
assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by
the outstanding balances of any borrowing used for the acquisition, construction or improvements
of those assets, and adding back unspent proceeds. Net assets are reported as restricted when
there are limitations imposed on their use either through the enabling legislations adopted by the
District or through external restrictions imposed by creditors, grantors or laws or regulations of
other governments.
J. Estimates
In preparing financial statements in conformity with accounting principles generally accepted in the
United States of America, management is required to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosures of contingent assets and
liabilities, and the reported amounts of revenue and expenses/expenditures. Actual results could
differ from those estimates.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
21
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
K. Subsequent Events
The District has evaluated all events or transactions that occurred after September 30, 2010 up
through January 18, 2011, the date the financial statements were issued. During this period,
there were no subsequent events requiring disclosure.
NOTE 2. CASH AND INVESTMENTS
The funds of the District must be deposited and invested under the terms of a contract, contents of
which are set out in the Depository Contract Law. The depository bank places approved pledged
securities for safekeeping and trust with the District's agent bank in an amount sufficient to protect
District funds on a day-to-day basis during the period of the contract. The pledge of approved
securities is waived only to the extent of the depository bank's dollar amount of Federal Deposit
Insurance Corporation (FDIC) insurance.
At September 30, 2010, the carrying amount of the District’s deposits (cash, certificates of deposit,
and interest-bearing savings accounts included in temporary investments) was $238,143 and the bank
balance was $213,681. The District’s cash deposits at September 30, 2010, and during the year then
ended were entirely covered by FDIC insurance or by pledged collateral held by the District’s agent
bank in the District’s name.
The Public Funds Investment Act (Government Code Chapter 2256) contains specific provisions in
the areas of investment practices, management reports and establishment of appropriate policies.
Among other things, it requires the District to adopt, implement, and publicize an investment policy.
That policy must address the following areas; (1) safety of principal and liquidity, (2) portfolio
diversification, (3) allowable investments, (4) acceptable risk levels, (5) expected rates of return, (6)
maximum allowable stated maturity of portfolio investments, (7) maximum average dollar -weighted
maturity, allowed based on the stated maturity date for the portfolio, (8) investment staff quality and
capabilities, (9) and bid solicitation preferences for certificates of deposit. Statutes and the District’s
investment policy authorized the District to invest in the following investments as summarized below:
Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity of Portfolio In One Issuer
U.S. Treasury Obligations 2 years 85%NA
U.S. Agencies Securities 2 years 85%NA
State of Texas Securities 2 years 85%NA
Certificates of Deposits 2 years 85%NA
Municipal Securities 2 years 85%NA
Money Market 2 years 50%NA
Mutual Funds 2 years 50%NA
Investment pools 2 years 100%NA
The Act also requires the District to have independent auditors perform test procedures related to
investment practices as provided by the Act. The District is in substantial compliance with the
requirements of the Act and with local policies.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
22
NOTE 2. CASH AND INVESTMENTS – CONTINUED
Cash and investments as of September 30, 2010 are classified in the accompanying financial
statements as follows:
Statement of Net Assets
Primary Government:
Cash and cash equivalents 5,393,389$
Total cash and investments 5,393,389$
Cash and investments as of September 30, 2010 consist of the following:
Deposits with financial institutions 238,143$
Investments 5,155,246
Total cash and investments 5,393,389$
The District’s cash and investments balance includes $163,932 which is restricted for customer
deposits.
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of
its fair value to changes in market interest rates. One of the ways th at the District manages its
exposure to interest rate risk is by investing mainly in investment pools which purchase a
combination of shorter term investments with an average maturity of less than 60 days thus
reducing the interest rate risk. The District monitors the interest rate risk inherent in its portfolio by
measuring the weighted average maturity of its portfolio. The District has no specific limitations
with respect to this metric.
As of September 30, 2010, the District had the following investment:
Weighted
Average
Investment Type Amount Maturity
TexPool 5,155,246$ 30 days
Total Investments 5,155,246$
As of September 30, 2010, the District did not invest in any securities which are highly sensitive to
interest rate fluctuations.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
23
NOTE 2. CASH AND INVESTMENTS – CONTINUED
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a ra ting by a nationally
recognized statistical rating organization. Presented below is the minimum rating required by
(where applicable) the Public Funds Investment Act, the District’s investment policy, or debt
agreements, and the actual rating as of year-end for each investment type.
Minimum Rating as
Legal of Year
Investment Type Amount Rating End
TexPool 5,155,246$ N/A AAAm
Total Investments 5,155,246$
Concentration of Credit Risk
The investment policy of the District contains no limitations on the amount that can be invested in
any one issuer. As of September 30, 2010, other than external investment pools, the District did
not have 5% or more of its investments with one issuer.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial
institution, a government will not be able to recover its deposits or will not be able to recover
collateral securities that are in the possession of an outside party. The custodial credit risk for
investments is the risk that, in the event of the failure of the counterparty to a transaction, a
government will not be able to recover the value of its investment or collateral securities that are in
the possession of another party. The Public Funds Investment Act and the District’s investment
policy do not contain legal or policy requirements that would limit the exposure to custodial credit
risk for deposits or investments, other than the following provision for deposits: The Public Funds
Investment Act requires that a financial institution secure deposits made by state or loc al
governmental units by pledging securities in an undivided collateral pool held by a depository
regulated under state law (unless so waived by the governmental unit). The market value of the
pledged securities in the collateral pool must equal at least the bank balance less FDIC insurance
at all times.
As of September 30, 2010 the District deposits with financial institutions were not in excess of
federal depository insurance limits.
Investment in State Investment Pools
The District is a voluntary participant in TexPool. The State Comptroller of Public Accounts
exercises responsibility over TexPool. This oversight includes the ability to significantly influence
operations, designation of management, and accountability for fiscal matters. Additionally, the
State Comptroller has established an advisory board composed of both participants in TexPool
and other persons who do not have a business relationship with TexPool. TexPool ope rates in a
manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. TexPool
uses amortized costs rather than market value to report net assets to compute share prices.
Accordingly, the fair value of the position in TexPool is the same as the value of TexPool shares.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
24
NOTE 3. ACCOUNTS RECEIVABLE
Receivables as of year-end, including the applicable allowances for uncollectible accounts, are as
follows:
Accounts Receivable:
MUD water 250,351$
MUD sewer 132,204
Unbilled receivables 121,121
Refuse (as agent for Town of Trophy Club)47,232
Refuse tax (as agent for Town of Trophy Club)4,086
Storm drainage (as agent for Town of Trophy Club)12,331
567,325
Allowance for uncollectible accounts (1,423)
Total (net) 565,902$
Due From Other Governments:
Town of Trophy Club 18,093$
NOTE 4. INTERFUND TRANSFERS
Transfers between funds during the year are as follows:
Transfer In Transfer Out Amount Purpose
Capital Projects General Fund 250,000$ Capital Improvement Costs
Debt Service General Fund 308,000 Debt service
Total 558,000$
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
25
NOTE 5. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2010, was as follows:
Beginning
Balance as Beginning
Previously Adjustments/Balance Retirements/Ending
Reported Reclassifications As Restated Additions Transfers Balance
Governmental Activities:
Capital assets,
not being depreciated
Land 248,093$ -$ 248,093$ -$ -$ 248,093$
Construction in progress - - - 601,102 - 601,102
Total capital assets
not being depreciated 248,093 - 248,093 601,102 - 849,195
Capital assets,
being depreciated
Buildings 506,790 - 506,790 - - 506,790
Improvements other than buildings 292,801 (27,783) 265,018 - - 265,018
Machinery and equipment 1,212,378 (56,544) 1,155,834 23,744 - 1,179,578
Organization costs 2,331,300 - 2,331,300 - - 2,331,300
Vehicles 1,502,552 (77,378) 1,425,174 189,955 - 1,615,129
Water system 8,509,288 (429,231) 8,080,057 - - 8,080,057
Wastewater treatment system 6,432,479 (990,554) 5,441,925 - - 5,441,925
Wastewater collection system 4,286,723 (1,433,833) 2,852,890 10,552 - 2,863,442
Total capital assets
being depreciated 25,074,311 (3,015,323) 22,058,988 224,251 - 22,283,239
Less accumulated
depreciation for:
Buildings (148,913) - (148,913) (10,136) - (159,049)
Improvements other than buildings (189,005) 27,783 (161,222) (13,166) - (174,388)
Machinery and equipment (358,269) 48,728 (309,541) (82,343) - (391,884)
Organization costs (1,933,487) - (1,933,487) (83,134) (2,016,621)
Vehicles (968,919) 48,733 (920,186) (74,368) - (994,554)
Water system (3,170,323) 294,895 (2,875,428) (137,603) - (3,013,031)
Wastewater treatment system (2,349,753) 733,412 (1,616,341) (127,272) - (1,743,613)
Wastewater collection system (2,185,608) 1,164,896 (1,020,712) (49,342) - (1,070,054)
Total accumulated
depreciation (11,304,277) 2,318,447 (8,985,830) (577,364) - (9,563,194)
Governmental activities capital
assets, net 14,018,127$ (696,876)$ 13,321,251$ 247,989$ -$ 13,569,240$
Depreciation expense was charged as direct expense to programs of the primary government as
follows:
General government 331,714$
Water operations 119,079
Wastewater operations 47,954
Wastewater collection systems 78,617
Total depreciation expense 577,364$
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
26
NOTE 6. LONG-TERM DEBT
At September 30, 2010, the District's long-term debt payable consisted of the following:
Interest Year Average
Rate of Final Annual Original Outstanding
Description Payable Issue Maturity Payment Amount 9/30/2010
Tax and revenue bonds:
Refunding 3.25-5.90%1997 2011 398,620$ 3,075,000$ 380,000$
Refunding 4.00-5.00%2003 2011 252,963 1,949,288 245,000
Improvements 4.00-5.00%2002 2023 281,058 3,510,000 2,660,000
Operations 4.00-5.00%2003 2023 89,793 1,200,000 895,000
Refunding 3.00-4.20%2005 2023 195,676 3,143,998 2,055,000
Improvements 3.50-5.00%2010 2031 148,205 2,000,000 2,000,000
8,235,000$
Contractual Obligations:
Fire Truck 4.33%2007 2014 56,000 448,000 263,000$
Improvements 3.50%2004 2012 39,000 270,000 67,500
Improvements 3.90%2009 2012 110,000 330,000 224,252
554,752$
Notes payable:
Equipment 2.50%1999 2018 2,245 35,000 16,097$
Equipment 3.90%2010 2015 201,318 179,955 179,955
196,052$
Capital Lease Obligations:
Equipment 4.00%2008 2012 9,886 49,432 19,774$
The following is a summary of long-term debt transactions of the District for the year ended
September 30, 2010:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities:
Tax and revenue bonds 7,290,000$ 2,000,000$ (1,055,000)$ 8,235,000$ 1,115,000$
Contractual obligations 753,250 - (198,498) 554,752 205,696
Deferred loss on refunding (60,321) - 4,414 (55,907) (4,414)
Premium on bonding 108,593 1,000 (7,967) 101,626 7,943
8,091,522 2,001,000 (1,257,051) 8,835,471 1,324,225
Notes payable 17,895 179,955 (1,798) 196,052 37,834
Capital lease obligations 62,660 - (42,886) 19,774 9,887
Compensated absences 22,617 6,733 - 29,350 29,350
Total Governmental Activities
Long-term Liabilities 8,194,694$ 2,187,688$ (1,301,735)$ 9,080,647$ 1,401,296$
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
27
NOTE 6. LONG-TERM DEBT – CONTINUED
The annual requirements to amortize all debts outstanding as of September 30, 2010, are as follows:
Tax and revenue bonds:
Year Ending
September 30,Principal Interest Total
2011 1,115,000$ 379,560$ 1,494,560$
2012 565,000 301,300 866,300
2013 585,000 280,596 865,596
2014 400,000 259,123 659,123
2015 415,000 242,938 657,938
2016-20 2,405,000 935,849 3,340,849
2021-25 1,960,000 373,630 2,333,630
2026-30 645,000 114,590 759,590
2031 145,000 6,163 151,163
Total 8,235,000$ 2,893,749$ 11,128,749$
Contractual obligations
Year Ending
September 30,Principal Interest Total
2011 205,696$ 22,507$ 228,203$
2012 211,984 14,359 226,343
2013 67,000 5,932 72,932
2014 70,072 3,031 73,103
Total 554,752$ 45,829$ 600,581$
Notes payable:
Year Ending
September 30,Principal Interest Total
2011 37,834$ 7,518$ 45,352$
2012 37,880 6,064 43,944
2013 37,927 4,578 42,505
2014 37,974 3,107 41,081
2015 38,025 1,634 39,659
2016-18 6,412 323 6,735
Total 196,052$ 23,224$ 219,276$
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
28
NOTE 6. LONG-TERM DEBT – CONTINUED
Capital Lease:
Year Ending
September 30,Principal Interest Total
2011 9,886$ 798$ 10,684$
2012 9,888 399 10,287
Total 19,774$ 1,197$ 20,971$
The assets acquired under the capital lease obligations above are included in capital assets at a cost
of $253,051. Accumulated depreciation on the assets as of September 30, 2010 was $97,702.
The tax revenue bonds are payable from the proceeds of 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 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 fixed date for redemptions.
Series 2002 – All maturities from 2013 to 2023 are callable in principal increments of $5,000 on or
after September 1, 2012 at par plus unpaid accrued interest to the fixed date for redemptions.
Series 2003 – No bonds are subject to redemption prior to maturity.
Series 2003 (debt issued by the entity formerly known as MUD 2) – All maturities from 2013 to
2023 are callable in principal increments of $5,000 on or after September 1, 2012 at par plus
unpaid accrued interest to the fixed date for redemptions.
Series 2005 - All maturities from 2014 to 2023 are callable in principal increments of $5,000 on or
after September 1, 2013 at par plus unpaid accrued interest to the fixed date for redemptions.
Contractual obligations and notes payable are liquidated from the general fund. Tax and revenue
bonds are liquidated from the debt service fund.
During the year, the District issued $2.0 million of Unlimited Tax Bonds, Series 2010. The proceeds of
the bonds will be used for constructing and equipping an addition to a building and facilities for a fire
station for fire-fighting purposes, and to provide for the payment of principal and interest on such
bonds.
During the year, the District also borrowed $179,995 through the issuance of a note payable. The
proceeds of the loan will be used to purchase a commercial Vac-Con Sewer vacuum truck.
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
29
NOTE 6. LONG-TERM DEBT – CONTINUED
The provisions of the bond resolutions relating to debt service requirements have been met, and the
cash allocated for these purposes is sufficient to meet debt service requirements for the year ended
September 30, 2010.
In previous years, the District has legally defeased certain outstanding general obligation debt by
placing funds into irrevocable trusts pledged to pay all future debt service payments of the refunded
debt. Accordingly, a liability for the defeased debt issue is not included in the District’s financial
statements. As of September 30, 2010, the following outstanding bonds were legally defeased:
Series Type Amount
1995 Unlimited Tax Refunding Bonds 2,490,000$
2,490,000$
NOTE 7. PROPERTY TAXES
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 and MUD2 (the “Districts”). 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 Districts may challenge appraised values established
by the Appraisal District through various appeals and, if necessary, legal action. Property taxes for the
Districts are not limited as to rate or amount. In an election held October 7, 1975, the electorate of the
Districts authorized the levy of up to $0.25 per $100 valuation per District for the operations and
maintenance of the Districts. Property taxes attach as an enforceable lien on property as of January
1, following the levy date. Taxes are due by January 31, following the levy date. Property taxes are
recorded as receivables when levied. Following is information regarding the 2010 tax levies:
Adjusted taxable values 1,019,510,729$
O & M Fire tax levy $0.1363/$100 1,389,389$
I & S tax levy $0.0687/$100 700,607
Total tax levy $0.2050/$100 2,089,996$
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO BASIC FINANCIAL STATEMENTS
30
NOTE 8. 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 lo ss to which
the District is exposed. Any losses reported but unsettled or incurred and not reported, are believed to
be insignificant to the District’s basic financial statements.
NOTE 9. RESTATEMENT OF BEGINNING NET ASSETS
As a result of a physical inventory performed during the year, the District discovered errors involving
various assets that had been previously disposed of, yet were incorrectly included on the capital asset
listing. The correction of these errors resulted in a $696,876 decrease in beginning net assets.
The District’s October 1, 2009 Net Asset balance has been restated as follows:
Per prior year financial statements
Net assets 9,017,058$
To correct capital assets balances
(696,876)
Beginning net assets, as restated 8,320,182$
REQUIRED SUPPLEMENTARY INFORMATION
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
GENERAL FUND
BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS)
YEAR ENDED SEPTEMBER 30, 2010
31
Variance with
Final Budget
Original Final Actual Positive (Negative)
Revenues
Taxes 1,965,493$ 1,453,333$ 1,491,564$ 38,231$
Intergovernmental revenues 13,750 13,750 11,200 (2,550)
Water and wastewater charges 4,268,666 4,268,666 3,919,084 (349,582)
Standby fees 1,140 1,140 796 (344)
Inspection and tap fees 1,250 1,250 5,775 4,525
Utility fees 258,750 - 80,500 80,500
Investment income 32,000 2,000 6,171 4,171
Miscellaneous 120,224 120,224 179,502 59,278
Total revenues 6,661,273 5,860,363 5,694,592 (165,771)
Expenditures:
Current
General government - 119,839 119,837 2
Water operations 2,228,197 2,204,702 1,882,511 322,191
Wastewater operations 821,117 821,117 711,382 109,735
Wastewater collection system 362,560 362,560 308,798 53,762
Utility billing 179,196 179,196 170,608 8,588
Directors 91,833 37,975 22,917 15,058
Manager's office 366,396 380,920 380,369 551
Human resources 40,813 41,203 41,201 2
Finance 228,363 190,963 179,979 10,984
Facilities management 87,113 87,113 79,075 8,038
Information systems 207,435 234,346 182,658 51,688
Fire 882,429 906,163 876,521 29,642
Total expenditures 5,495,452 5,566,097 4,955,856 610,241
Excess of revenues over expenditures 1,165,821 294,266 738,736 444,470
Other financing sources (uses):
Issuance of contractual obligations 1,100,000 - - -
Transfers out (153,999) (558,000) (558,000) -
Total other financing sources (uses)946,001 (558,000) (558,000) -
Net change in fund balance 2,111,822 (263,734) 180,736 444,470
Fund Balances - beginning of year 2,832,178 2,832,178 2,832,178 -
Fund Balances - end of year 4,944,000$ 2,568,444$ 3,012,914$ 444,470$
Budgeted amounts
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
32
NOTE 1. BUDGETARY CONTROL
The District Board (Board) adopts an annual budget for the General Fund on a budgetary basis, which
consists of accounting on the modified accrual basis excepting recognition of non-cash grant and
capital lease proceeds and related expenditures for equipment. The District also does not budget
developer contributions of infrastructure.
The Board approves all budget appropriations. Any revisions which alter the total appropriations must
be approved by the Board. The level of budgetary responsibility is by total appropriations of the fund.
All annual appropriations lapse at fiscal year end.
INDIVIDUAL SCHEDULES AND OTHER
SUPPLEMENTARY INFORMATION REQUIRED
BY TEXAS COMMISSION ON
ENVIRONMENTAL QUALITY (TCEQ)
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
DEBT SERVICE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED SEPTEMBER 30, 2010
33
Variance with
Final Budget
Original Final Actual Positive (Negative)
Revenues
Taxes 1,303,324$ 712,310$ 740,420$ 28,110$
Investment income 15,000 2,000 4,848 2,848
Utility fees 345,000 345,000 345,000 -
Total revenues 1,663,324 1,059,310 1,090,268 30,958
Expenditures:
Debt service
Principal 1,500,000 1,055,000 1,055,000 -
Interest 588,703 312,310 311,570 740
Total expenditures 2,088,703 1,367,310 1,366,570 740
Deficiency of revenues under
expenditures (425,379) (308,000) (276,302) 31,698
Other financing sources
Premium on bonds - - 1,000 1,000
Transfers in 308,000 308,000 308,000 -
Total other financing sources 308,000 308,000 309,000 1,000
Net change in fund balance (117,379) - 32,698 32,698
Fund Balances - beginning of year 239,434 239,434 239,434 -
Fund Balances - end of year 122,055$ 239,434$ 272,132$ 32,698$
Budgeted Amounts
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 1
SERVICE AND RATES
YEAR ENDED SEPTEMBER 30, 2010
34
TSI – 1 SERVICE AND RATES
1.Services provided by the District:
a)Retail Water
b)Retail Wastewater
c)Fire Protection
d) Irrigation
e)Participates in joint venture, regional system and/or wastewater service (other than
emergency interconnect)
2.Retail service providers:
a)Retail rates-based on 5/8" meter:
Most prevalent type of meter (if not a 5/8"):1 inch
Flat Rates per 1,000
Admin Minimum Rate Gallons Over
Fee Usage Y/N Minimum Usage Levels
WATER $11.88 0 No 2.32$ 0 to 6,000
No 2.80 7,000 to 12,000
No 3.02 13,000 to 25,000
No 3.12 Over 26,000
Note: Out of district water rates are double the "in-town" rate and are included in the rate order.
WASTEWATER $11.88 0 No 2.32$ 0 to 6,000
No 2.80 7,000 to 12,000
No - Caps at 12,000
GOLF COURSE Subject to peak draw rates from Ft Worth water department.
NOTE: all rates noted above were amended effective October 1, 2009
District employs winter averaging for wastewater usage?No
Total water and wastewater charges per 10,000 gallons usage (including surcharges)
effective October 1, 2009
First 10,000 gallons used 74.00$
Next 10,000 gallons used 35.36
Next 10,000 gallons used 30.70
Next 10,000 gallons used and subsequent 31.20
Maximum residential wastewater charge is for 12,000 gallons or $42.60
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 1 (CONTINUED)
SERVICE AND RATES
YEAR ENDED SEPTEMBER 30, 2010
35
TSI – 1 SERVICE AND RATES – CONTINUED
b)Retail service providers: number of retail water and/or wastewater* connections within the District as
of the fiscal year end. Provide actual numbers and single family equivalents (ESFC).
ESFC Active
Meter Size Total Active Factor ESFC's
Unmetered - - 1.0 -
Less than 3/4"2,511.0 2,501.0 1.0 2,501.0
1"730.0 711.0 2.5 1,777.5
1 1/2"15.0 14.0 5.0 70.0
2"75.0 70.0 8.0 560.0
3"12.0 11.0 15.0 165.0
4"11.0 11.0 25.0 275.0
6"2.0 2.0 50.0 100.0
8"- - 80.0 -
10"- - 115.0 -
Total Water 3,356.0 3,320.0 5,448.5
Total Wastewater 3,161.0 3,130.0 1.0 3,130.0
*Number of connections relates to water service if provided. Otherwise, the number of wastewater
connections should be provided.
Note: "inactive" means that water and wastewater connections were made, but service is not
being provided.
3.Total water consumption (in thousands) during the fiscal year:
Gallons pumped into the system 771,254
Gallons billed to customers 686,750
Water accountability ratio 89.0%
4.Standby Fees:
Does the District assess standby fees?Yes
For the most recent fiscal year, FY2010:
Total Total Percentage
Levy Collected Collected
Debt Service 701,083$ 726,329$ 103.6%
Operations and Maintenance 1,390,331$ 1,420,942$ 102.2%
Have standby fees been levied in accordance with Water Code Section 49.231, thereby
constituting a lien on property?No**
**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.
Connections
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 1 (CONTINUED)
SERVICE AND RATES
YEAR ENDED SEPTEMBER 30, 2010
36
TSI – 1 SERVICE AND RATES – CONTINUED
5.Location of District:
Counties in which District is located: a)Denton
b)Tarrant
Is the District located entirely in one county?No
Is the District located within a city?Partially
Cities in which District is located:Town of Trophy Club
Town of Westlake
Is District located within a city's extra territorial jurisdiction (ETJ)?Unknown
ETJ's in which District is located:Unknown
Is the general membership of the Board appointed by an office outside the District? No
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 2
GENERAL FUND EXPENDITURES AND OTHER FINANCING USES
YEAR ENDED SEPTEMBER 30, 2010
37
Current Year Prior Year
Administrative 993,986$ 1,297,613$
Water Operations 1,882,511 1,811,385
Wastewater Operations 711,382 538,006
Wastewater Collection Systems 308,798 294,869
Information Systems 182,658 175,698
Contribution to Trophy Club Fire Dept 876,521 783,736
Capital Outlay - 461,382
Transfer to Debt Service 558,000 383,009
Miscellaneous - -
Total Expenditures and Transfers 5,513,856$ 5,745,698$
Number of employees employed by the District:
Full time Equivalents (FTEs)32.5 34
Part time None None
*Note: For fiscal year 2008-2009, fire department operations, including 9 FTE's,
were transferred to the MUD
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 3
TEMPORARY INVESTMENTS
SEPTEMBER 30, 2010
38
Identification Interest Maturity Balance Accrued Interest
Number Rate Date End of Year End of Year
General Fund
TexPool 613300002 0.2165%Demand 3,313,310$ Paid daily
Debt Service Fund
TexPool 613300003 0.2165%Demand 272,132$ Paid daily
Fire Construction
TexPool 613300008 0.2165%Demand -$ Paid daily
2010 GO Fire Station
TexPool 613300009 0.2165%Demand 1,569,804$ Paid daily
Total - All Funds 5,155,246$
Funds
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 4
TAXES LEVIED AND RECEIVABLE
YEAR ENDED SEPTEMBER 30, 2010
39
Debt
Operations Fire Total Service Total
Taxes receivable beginning of year 3,012$ 22,516$ 25,528$ 30,183$ 55,711$
2009 tax levy 276,883 1,113,448 1,390,331 701,083 2,091,414
Total to be accounted for 279,895 1,135,964 1,415,859 731,266 2,147,125
Less collections and adjustments:
Current year (275,930) (1,109,371) (1,385,301) (698,920) (2,084,221)
Prior years (1,349) (10,740) (12,089) (10,800) (22,889)
Total to be accounted for (277,279) (1,120,111) (1,397,390) (709,720) (2,107,110)
Taxes receivable, end of year 2,616$ 15,853$ 18,469$ 21,546$ 40,015$
Taxes receivable by year
1996 and prior 19 108 127 454 581
1997 7 41 48 150 198
1998 7 44 51 140 191
1999 34 239 273 543 816
2000 15 73 88 266 354
2001 34 134 168 440 608
2002 502 4,498 5,000 9,992 14,992
2003 70 126 196 132 328
2004 20 165 185 239 424
2005 140 416 556 706 1,262
2006 223 1,023 1,246 1,737 2,983
2007 118 1,142 1,260 1,397 2,657
2008 475 3,766 4,241 3,187 7,428
2009 952 3,830 4,782 2,411 7,193
2,616$ 15,605$ 18,221$ 21,794$ 40,015$
F/Y F/Y F/Y F/Y F/Y
Property valuations (in 000's) 09/10 08/09 07/08 06/07 05/06
Land 209,177$ 186,574$ 213,640$ 193,906$ 166,046$
Improvements 786,539 737,273 638,560 581,667 518,213
Personal property 80,332 71,091 94,823 65,248 68,356
Exemptions (40,057) (34,027) (34,405) (29,607) (8,422)
1,035,991$ 960,911$ 912,618$ 811,214$ 744,193$
Tax rate per $100 valuation
Operations 0.027140 0.0140 0.0102 0.0309 0.0309
Fire department 0.109140 0.1160 0.1209 0.1027 0.1464
Debt service 0.068720 0.1146 0.0989 0.1464 0.1027
Tax rate per $100 valuation 0.205000 *0.2446 0.2300 0.2800 0.2800
Tax levy: 2,091,414$ 2,380,679$ 2,234,909$ 2,191,536$ 2,271,746$
Percent of taxes collected to taxes levied 100.75%99.58%100.36%100.62%98.04%
General Fund
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 5
LONG-TERM DEBT SERVICE REQUIREMENTS – BY YEAR
SEPTEMBER 30, 2010
40
Due During Fiscal Principal Due Interest Due
Years Ending 1-Sep Mar 1/ Sep 1 Total
2011 1,115,000$ 379,560$ 1,494,560$
2012 565,000 301,300 866,300
2013 585,000 280,596 865,596
2014 400,000 259,123 659,123
2015 415,000 242,938 657,938
2016 435,000 225,938 660,938
2017 460,000 207,868 667,868
2018 480,000 188,468 668,468
2019 505,000 167,838 672,838
2020 525,000 145,737 670,737
2021 550,000 122,768 672,768
2022 580,000 98,533 678,533
2023 605,000 71,463 676,463
2024 110,000 43,183 153,183
2025 115,000 37,683 152,683
2026 115,000 33,083 148,083
2027 125,000 28,368 153,368
2028 130,000 23,243 153,243
2029 135,000 17,783 152,783
2030 140,000 12,113 152,113
2031 145,000 6,173 151,173
8,235,000$ 2,893,749$ 11,128,749$
All Bonded Debt Series
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 5
LONG-TERM DEBT SERVICE REQUIREMENTS – BY YEAR
SEPTEMBER 30, 2010
41
Due During Fiscal Principal Due Interest Due
Years Ending 1-Sep Mar 1/ Sep 1 Total
2011 -$ 114,371$ 114,371$
2012 65,000 80,733 145,733
2013 65,000 78,458 143,458
2014 70,000 76,183 146,183
2015 70,000 73,733 143,733
2016 75,000 71,283 146,283
2017 80,000 68,658 148,658
2018 85,000 65,858 150,858
2019 85,000 62,883 147,883
2020 90,000 59,908 149,908
2021 95,000 56,758 151,758
2022 100,000 53,433 153,433
2023 105,000 48,433 153,433
2024 110,000 43,183 153,183
2025 115,000 37,683 152,683
2026 115,000 33,083 148,083
2027 125,000 28,368 153,368
2028 130,000 23,243 153,243
2029 135,000 17,783 152,783
2030 140,000 12,113 152,113
2031 145,000 6,163 151,163
2,000,000$ 1,112,301$ 3,112,301$
Series 2010 GeneralObligation Bonds
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 5
LONG-TERM DEBT SERVICE REQUIREMENTS – BY YEAR
SEPTEMBER 30, 2010
42
Due During Fiscal Principal Due Interest Due
Years Ending 1-Sep Mar 1/ Sep 1 Total
2011 285,000$ 78,660$ 363,660$
2012 290,000 68,685 358,685
2013 295,000 58,535 353,535
2014 100,000 48,210 148,210
2015 105,000 44,210 149,210
2016 105,000 40,010 145,010
2017 110,000 35,810 145,810
2018 115,000 31,410 146,410
2019 120,000 26,810 146,810
2020 125,000 22,010 147,010
2021 130,000 17,010 147,010
2022 135,000 11,550 146,550
2023 140,000 5,880 145,880
2,055,000$ 488,790$ 2,543,790$
Due During Fiscal Principal Due Interest Due
Years Ending 1-Sep Mar 1/ Sep 1 Total
2011 245,000$ 7,963$ 252,963$
Series 2003 Unlimited Tax Bonds
Series 2005 Combination Tax Bonds
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 5
LONG-TERM DEBT SERVICE REQUIREMENTS – BY YEAR
SEPTEMBER 30, 2010
43
Due During Fiscal Principal Due Interest Due
Years Ending 1-Sep Mar 1/ Sep 1 Total
2011 55,000$ 35,278$ 90,278$
2012 55,000 33,215 88,215
2013 60,000 31,290 91,290
2014 60,000 29,430 89,430
2015 60,000 27,090 87,090
2016 65,000 24,750 89,750
2017 70,000 22,150 92,150
2018 70,000 19,350 89,350
2019 75,000 16,375 91,375
2020 75,000 13,186 88,186
2021 80,000 10,000 90,000
2022 85,000 6,800 91,800
2023 85,000 3,400 88,400
895,000$ 272,314$ 1,167,314$
Series 2003 Combination Tax Bonds
Due During Fiscal Principal Due Interest Due
Years Ending 1-Sep Mar 1/ Sep 1 Total
2011 150,000$ 124,668$ 274,668$
2012 155,000 118,667 273,667
2013 165,000 112,313 277,313
2014 170,000 105,300 275,300
2015 180,000 97,905 277,905
2016 190,000 89,895 279,895
2017 200,000 81,250 281,250
2018 210,000 71,850 281,850
2019 225,000 61,770 286,770
2020 235,000 50,633 285,633
2021 245,000 39,000 284,000
2022 260,000 26,750 286,750
2023 275,000 13,750 288,750
2,660,000$ 993,751$ 3,653,751$
Series 2002 Combination Tax Bonds
Due During Fiscal Principal Due Interest Due
Years Ending 1-Sep Mar 1/ Sep 1 Total
2011 380,000$ 18,620$ 398,620$
Series 1997 Combination Tax Bonds
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 6
CHANGES IN LONG-TERM BONDED DEBT
YEAR ENDED SEPTEMBER 30, 2010
44
Series 1997 Series 2002 Series 2003 Series 2003 Series 2005 Series 2010
Combination Combination Combination Unlimited Combination Combination
Tax Tax Tax Tax Tax Tax Total
Interest rate 3.25-5.9%4.00-5.50%3.10-4.25%3.25%2.97-4.20%
Date interest payable 3/1 & 9/1 3/1 & 9/1 3/1 & 9/1 3/1 & 9/1 3/1 & 9/1 3/1 & 9/1
Maturity date 9/1/98 to
9/1/2011 9/1/2023 9/1/2023 9/1/2001 9/1/2023 9/1/2031
Bonds outstanding at
beginning of year 745,000$ 2,800,000$ 945,000$ 480,000$ 2,320,000$ -$ 7,290,000$
Retirements of principal (365,000) (140,000) (50,000) (235,000) (265,000) - (1,055,000)
Bond Issue 2,000,000 2,000,000
Bonds outstanding at end of
fiscal year 380,000$ 2,660,000$ 895,000$ 245,000$ 2,055,000$ 2,000,000$ 8,235,000$
Retirements of interest 36,505$ 132,368$ 37,153$ 15,013$ 87,273$ -$ 308,312$
Paying agent's name & city:
All Series Bank of New York Mellon
P.O. Box 2320
Dallas, Texas 75221-2320
General
Obligation
Bond Authority Bonds
Amount authorized by voters 27,094,217$
Amount issued (23,325,000)
Remaining to be issued 3,769,217$
The general obligation bonds were authorized on October 7, 1975
Debt Service Fund cash and cash equivalents balance as of September 30, 2010:272,132$
Average annual debt service payment (principal & interest) for remaining term of debt:669,982$
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 7
GENERAL FUND
COMPARATIVE SCHEDULES OF REVENUES AND OTHER FINANCING SOURCES
AND EXPENDITURES AND OTHER FINANCING USES – FIVE YEARS
SEPTEMBER 30, 2010
45
REVENUE AND OTHER FINANCING SOURCES 2010 2009 2008 2007 2006 2010 2009 2008 2007 2006
Ad valorem property taxes 1,491,564$ 1,283,705$ 1,002,608$ 909,495$ 1,038,439$ 26.2% 21.1%20.3%21.0%19.3%
Water and wastewater charges 3,919,084 3,721,868 3,678,859 3,151,144 4,005,608 68.8%61.3%74.5%72.8%74.5%
Utility Fees 80,500 515,200 - - - 1.4%8.5%0.0%0.0%0.0%
Inspection and tap fees 5,775 4,975 22,550 32,900 42,725 0.1%0.1%0.5%0.8%0.8%
Interest earned 6,171 20,755 69,447 106,168 57,329 0.1%0.3%1.4%2.5%1.1%
Capital lease proceeds/Contractual Obligations - 330,000 49,432 - 165,000 0.0%5.4%1.0%0.0%3.1%
Miscellaneous and other 191,498 199,780 116,295 131,124 71,151 3.4%3.3%2.4%3.0%1.3%
Total revenue and other financing sources 5,694,592 6,076,283 4,939,191 4,330,831 5,380,252 100.0%100.0%100.0%100.0%100.0%
EXPENDITURES
Administrative 993,986 1,297,613 905,052 835,590 769,646 17.5%21.4%18.3%19.3%14.3%
Water operations 1,882,511 1,811,385 1,934,792 1,638,294 1,916,008 33.1%29.8%39.2%37.8%35.6%
Wastewater operations 711,382 999,388 500,224 480,798 469,292 12.5%16.4%10.1%11.1%8.7%
Wastewater collection system 308,798 294,869 409,948 402,482 673,422 5.4%4.9%8.3%9.3%12.5%
Information systems 182,658 175,698 187,908 124,987 60,557 3.2%2.9%3.8%2.9%1.1%
Contribution to Trophy Club Fire Dept 876,521 783,736 902,353 725,764 724,738 15.4%12.9%18.3%16.8%13.5%
Capital outlay - - 29,379 442,782 31,381 0.0%0.0%0.6%10.2%0.6%
Transfers out 558,000 383,009 - - - 9.8%6.3%0.0%0.0%0.0%
Miscellaneous - - 45,457 135,121 67,054 0.0%0.0%0.9%3.1%1.2%
Total expenditures 5,513,856 5,745,698 4,915,113 4,785,818 4,712,098 96.8%94.6%99.5%110.5%87.6%
Excess (deficiency) of revenues
over (under) expenditures 180,736$ 330,585$ 24,078$ (454,987)$ 668,154$ 3.2%5.4%0.5%-10.5%12.4%
Total active retail water and/or
wastewater connections 3,361 3,161 3,092 2,827 2,799
Amounts Percent of total revenue
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 7
DEBT SERVICE FUND
COMPARATIVE SCHEDULES OF REVENUES AND OTHER FINANCING SOURCES
AND EXPENDITURES AND OTHER FINANCING USES – FIVE YEARS
SEPTEMBER 30, 2010
46
TSI – 7 COMPARATIVE SCHEDULES OF REVENUES AND OTHER FINANCING SOURCES AND EXPENDITURES AND OTHER FINANCING
USES – FIVE YEARS – CONTINUED
REVENUE 2010 2009 2008 2007 2006 2010 2009 2008 2007 2006
Ad valorem property taxes 740,420$ 1,100,115$ 1,302,763$ 1,325,143$ 1,309,781$ 52.9%73.4%96.1%94.8%94.7%
Penalties and interest - 11,885 - - - 0.0%0.8%0.0%0.0%0.0%
Transfers in 653,000 383,009 - - - 46.7%25.5%0.0%0.0%0.0%
Interest earned 4,848 4,105 23,326 43,456 32,279 0.3%0.3%1.7%3.1%2.3%
Miscellaneous and other 1,000 - 29,379 29,379 41,210 0.1%0.0%2.2%2.1%3.0%
Total revenue 1,399,268 1,499,114 1,355,468 1,397,978 1,383,270 100.0%100.0%100.0%100.0%100.0%
EXPENDITURES
Principal retirement 1,055,000 1,025,000 975,000 945,000 636,635 75.4%68.4%71.9%67.6%46.0%
Interest and fiscal charges 311,570 352,194 390,565 425,838 728,740 22.3%23.5%28.8%30.5%52.7%
Total expenditures 1,366,570 1,377,194 1,365,565 1,370,838 1,365,375 97.7%91.9%100.7%98.1%98.7%
Excess (deficiency) of revenues
over (under) expenditures 32,698$ 121,920$ (10,097)$ 27,140$ 17,895$ 2.3%8.1%-0.7%1.9%1.3%
Amounts Percent of total revenue
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 8
BOARD MEMBERS, KEY PERSONNEL, AND CONSULTANTS
SEPTEMBER 30, 2010
47
Term of Office Fees of Expense Title
Elected/Expires Office Paid Reimbursements at
Name and Address or Date Hired FY10 FY10 Year End
Board Members:
James C. Thomas
7 Meadowbrook Lane
Trophy Club, TX 76262 05/04-05/14 1,500$ 350$ President
James Moss
979 Trophy Club Drive
Trophy Club, TX 76262 05/10-5/12 1,200$ 270$ Vice-President
Kevin Carr
15 Edgemere Drive
Trophy Club, TX 76262 05/04-05/14 1,600$ -$ Secretary/Treasurer
C. Nick Sanders
7 Hayes Court
Trophy Club, TX 76262 05/10-5/12 1,000$ 297$ Director
William Armstrong
11 Muirfield Court
Trophy Club, TX 76262 05/10-5/14 800$ 290$ Director
TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO. 1
TSI – 8 (CONTINUED)
BOARD MEMBERS, KEY PERSONNEL, AND CONSULTANTS
SEPTEMBER 30, 2010
48
TSI – 8 BOARD MEMBERS, KEY PERSONNEL, AND CONSULTANTS – CONTINUED
Term of Office Fees of Title
Elected/Expires Office Paid at
Name and Address or Date Hired FY10 Year End
Key Personnel:
Robert Scott
3800 High Road District
Flower Mound, Texas 75028 11/1/2009 -$ Manager
** Assumed responsibility of
District Manager on 11/1/2009
Consultants:
Denton Central Appraisal District
P.O. Box 2816
Denton, TX 76202 4/1/1981 12,589$ Appraiser
Tarrant Appraisal District
2500 Handley-Ederville Rd.
Fort Worth, TX 76262 10/1/2007 3,639$ Appraiser
Weaver and Tidwell, L.L.P.
12221 Merit Drive Suite 1400
Dallas, Texas 75251-2280 10/1/2005 33,591$ Auditors
Whitaker, Chalk, Swindle & Sawyer, L.L.P.
3500 City Center, Tower II
Fort Worth, TX 76102 10/1/1999 47,946$ Legal Counsel
Liston Law Firm
2801 Weems Way, Suite B
Rowlett, TX 75088 7/1/2002 22,494$ Legal Counsel