DALLAS COUNTY FLOOD CONTROL DISTRICT NO.1. Financial Statements and Supplementary Information

Transcription

1 Financial Statements and Supplementary Information For the Year Ended June 3, 215 and Independent Auditor's Report

2 Table of Contents Annual Filing Affidavit Independent Auditor's Report 2 Management's Discussion and Analysis 4 Basic Financial Statements: Statement of Net Position and Governmental Fund Balance Sheet 8 Statement of Activities and Governmental Fund Revenues, Expenditures and Changes in Fund Balances and Net Position 1 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund 11 Notes to Basic Financial Statements 12 Supplementary Information Required by Texas Commission on Environmental Quality: Services and Rates 23 Schedule of General Fund Expenditures 25 Schedule of Temporary Investments 26 Analysis of Taxes Levied and Receivable 27 Annual Requirements of Bonds Issued in 22 3 General Long-Term Debt Service Requirements - By Year 31 Analysis of Changes in General Long-Term Debt 32 Comparative Schedule of Revenues and Expenditures - General and Debt Service Funds 33 Board Members, Key Personnel, and Consultants 34 Insurance Coverage 36

3 THE STATE OF TEXAS COUNTY OF DALLAS _ I, Robert M. Nelson Jr. (Name of Duly Authorized District Representative) of the Dallas County Flood Control 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 of the fiscal year or period ended June 3, 215 and that copies of the annual audit report have been filed in the district office located at: 21 Highland Park Drive, Irving, Texas 7561 (Address of District) The annual filing affidavit and the attached copy of the annual audit report are being submitted to the Texas Commission on Environmental Quality in satisfaction of all annual requirements within Section of the Texas Water Code. Date (Signature of District Representative) Robert M. Nelson, Jr., President (Current) (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. _ TCEQ-723 (Rev. 7/212)

4 ACCOUNTANTS,,-:r., CONSULTANTS INDEPENDENT AUDITOR'S REPORT To the Board of Directors Dallas County Flood Control District No. 1 Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities and each major fund of the Dallas County Flood Control District No.1 (the "District"), as of and for the year ended June 3, 215, and the related notes to the financial statements, which collectively comprise the District's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements The District's management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion 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 District as of June 3, 215, the respective changes in financial position, and the respective budgetary comparison for the general fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. I I 875 N. Central Expressway Suite 3 Dallas, TX fax I CPAmerica International. in alliance with Crowe Horwath International Member: The International Accounting Group World Services Group

5 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 7, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted principally of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and our knowledge obtained in our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the District's basic financial statements. The Texas Commission on Environmental Quality supplementary information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The Texas Commission on Environmental Quality supplementary information listed in the table of contents has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Texas Commission on Environmental Quality supplementary information listed in the table of contents is fairly stated in all material respects in relation to the basic financial statements as a whole. Dallas, Texas February 4, 216 c1 Lo'/.X_.f! CF & Co., L.L.P.

6 Management's Discussion and Analysis June The following discussion and analysis of the District's financial performance activities for the fiscal year ended June 3,215. provides an overview of the District's financial HIGHLIGHTS Financial and District Highlights The District's net position increased in the Governmental Funds by $1,94,385 due to this year's operations. Revenues increased by $971,943 or 26.98% and expenses increased by $82,113. USING THIS ANNUAL REPORT This annual report consists of three parts: Management's Discussion and Analysis, Financial Statements, and Required Supplementary Information. The financial statements also include notes that explain in more detail some of the information in the financial statements. Required Financial Statements The financial statements of the District report information about the District using accounting methods similar to those used by private sector companies. These statements offer short and long-term financial information about its activities. The statement of net position and governmental fund balance sheet includes all of the District's assets and liabilities and provides information about the nature and amount of investments in resources (assets) and obligations to creditors (liabilities). It also provides the basis for computing rate of return, evaluating the capital structure of the District, and assessing the liquidity and financial flexibility of the District. All of the current year's activities and governmental fund revenues, expenditures and changes in fund balances and net position are accounted for in the statement of activities and governmental fund revenues, expenditures and changes in fund balances and net position. This statement measures the success of the District's operations over the past year and can be used to determine whether the District has successfully recovered all of its costs through its taxes and other fees, profitability, and credit worthiness. FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE One of the most important questions asked about the District's finances: "Is the District, as a whole, better off or worse off as a result of the year's activities?" The statement of net position and governmental fund balance sheet and the statement of activities and governmental fund revenues, expenditures and changes in fund balances and net position report information about the District's activities in a way that will help answer this question. These two statements report the net position of the District and changes in them. You can think of the District's net position - the difference between assets and liabilities - as one way to measure financial health or financial position. Over time, increases or decreases in the District's net position are one indicator of whether its financial health is improving or deteriorating. However, you will need to consider other non-financial factors, such as changes in economic conditions, population growth, and new or changed legislation. The District's total net position increased from last year by $1,94,385. Total operating revenues reflect a 26.98% increase in 214/15 over 213/14. Page 4

7 Management's Discussion and Analysis June FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE, continued Summary of key financial data: GENERAL REVENUES Property taxes net of refunds $ 4,185,994 $ 3,527,662 Other income 388,496 74,887 Total Revenues 4,574,49 3,62,549 EXPENDITURES/EXPENSES Service operations 561, ,998 Debt service interest 2,5,378 2,12,588 Depreciation expense 22,48 22,48 Total Expenditures/Expenses 2,634,15 2,551,994 Excess (deficiency) of revenues 1,94,385 1,5,555 Net position beginning of year (21,32,69) (22,353,245) Net position end of year $ (19,362,35) $ (21,32,69) ASSETS, LIABILITIES AND NET POSITION Current and other assets $ 4,423,161 $ 3,573,344 Property and equipment, net of depreciation 4,574, 4,258,967 Total Assets 8,997,161 7,832,311 Long-term obligations 27,75, 28,565, Other liabilities 69,466 57,1 Total Liabilities 28,359,466 29,135,1 Net position Restricted for debt service 3,31,985 2,574,81 Unrestricted 1,4, ,56 Invested in capital assets, net of related debt (23,678,273) (24,822,6) Total Net Position $ (19,362,35) $ (21,32,69) Page 5

8 Management's Discussion and Analysis June THE DISTRICT'S FUNDS The District's two funds are the Debt Service Fund and the General Fund. These funds have been established since the District's inception to reflect the activities of the District. Fund balances of the General Fund and Debt Service Fund increased approximately $228,728 and $573,48, respectively, due to the increase in tax collections due to increase in appraised property values and reduction in operating costs. Budgetary Highlights Over the course of the year, the District's Board of Directors approved one amendment to the original legally adopted budget. This amendment increased the original budget of net position by $68,732, an increase in revenue of $824,45 due to higher than anticipated property tax collections and a grant from the City of Irving, and an increase in expenses of $143,718, primarily due to higher than anticipated major capital repairs. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets On June 3, 215, the District had $32,811,88 invested in a range of capital assets, including the pump station and levees. The amount includes $4,, in land and $28,811,88, net of accumulated depreciation of $28,237,88, in improvements (net $574,). There were additions of $337,441 to capital assets during the year ended June 3, 215 classified as construction in progress. At year-end, the District had a total of $27,75, in bonds and notes outstanding. The bond and note liability decreased $815, during the fiscal year Refunding bonds, net of discount Total Outstanding Debt ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES $ $ 27,75, $ , $ 28,565, Budgeted revenues for 216 are projected to decrease due to a $.1 tax rate reduction. Budgeted expenses are projected to increase due to major repairs to the District's infrastructure in 216. The District has adopted a tax rate for 215 of $2.65, the rate is $.1 lower than 214. The rate in 214 was $2.75. Page 6

9 Management's Discussion and Analysis June 3, 215 CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide citizens, taxpayers, and creditors with a general overview of the District's finances and to demonstrate the District's accountability for the money it owes. If you have any questions about this report or need additional financial information, contact the District's Director at 21 Highland Park Drive, Irving, Texas 7561; phone Page 7

10 -e- LO N '..- -e- I'-- LO <.$ -e- I'-- < N < N_ "" I'-- < C") "E a) 1'--_ "<I" 1'--- N "<I" a) In ) T- O "<1"- r--: LO- T- N- O ) E rj) < "<I" I'-- "> I'-- LO «< to LO ) LO CO CO f;l 1i) C')...f" <Xi <- ""- CO N N Ci5 Z - - Y:>- c..". LO _..". N <O_ N_ N_ N..".-..". Lri "(3 2 c LO LO LO C")...f"...f" cd <Xi 8 z. - - N N a) :::. c:..". LO N I'-- I'-- LO LO E O LO "> G' --. N I'-- "> N- O I'-- I'-- I'-- I'-- LO "<I"..- ]j..". I'-- M < < < N_..- C") c 1'--- 1'--- 1'--- N_ "!. 1 a) In ).... M (i) ""C < "<I" N Q5 E..r::::. E c CD CD "<1"_ < CD Cii I- ::> C') -e- (f) a) LL "(3 > c: ro (.) (!) c: Z c: Y:>- Y:>- to:: ro I- (f) ro co ::: " :5 I- a) M c: -e- I'-- '+- (f) :::J U ">_ 1'--_ M "> M M (5 LL " " t "" ""C (.... Cii c..- M M M ro _J en ::> CD.... LO M LO LO a.. "E LL N- zs - C') ::: ro ld... l- E Cl > > z E C; Y:>- $ ro.. g; N c: ro (!) (V) "<I" N I'-- I'-- I'-- "<I" "<I" " ""C ("') I'-- CD CD c: c: c "<I" ) 1'--_ 1'--_ ) "> ro ro :::J ::> _J -, LL r--: C') N C') C') (f) LL c: $ _.... >- = I- "Ci) c c: Z > ::l.. o c: Y:>- Y:>- "s;., Q3 c: z ro (f) a.. '+- E ::s _J "E (.) (.) «E ro 16..r::::. I- U5 en rj) UJ U ::> ::: rj) c ::J = ro en.$ ' "(3 UJ c.. a:: " c.. LL = - ""C "en ffi rj) en "5 ' : en ffi ::> ""C In c.. a) ro 1i) -a5 c (g ) >- >- C ""C :: c In :: co 1;) c :....J > "S; ' ro rj) ro c.. : c ro LL ro > f!!' «>- rj) :.:J ""C.$ ro 2 c In In "w >< ::::l ro c.. :.c: (ij ""C 2 u In ts en >< "5 Cl 2 c (5.$ 2 E ' ::: rj) UJ ""C ro UJ ""C en ro ro E l- F c Jll I- a:: l- t;::: In (ij In ::::l l-.e '2 ""C 2 a:: jg :::i ) ::::l ::::l UJ In >< 5 c iii 8 >- 8 c Cl Cl UJ en ro ro ro ro LL en u u I-...J..s ««c... «...J UJ Cl «::J

11

12 ('.I <.D I'- '> LO I'-..- (V) '> '> eo eo LO -q- <.D eo ('.I LO - ('.I (V) LO..- ('.I '> eo '> eo ('.I I'- LO eo '..- (V)_ -e-..- '> eo ('.I -q- (V) <.D "E en a) r--: M.. a:i a:i ('.1- -.::i.... 1'--.. -q-- O- N -e- I'- I'-..- (V) LO ('.I (V) eo..- <.D I'- -q- N to (V) LO M_ E.:; N N -.::i -q ts «c75 Q5 u.23 N N q-- z c: " e eo en (..) e eo (.) 6 & ro I'- to..- N '> -e-..- CD N CD CD (V) '> en $ -q- (V) LO -e- N '> (V) (V) LO ex;..- N I'- I'- e " 79 -e- '>..- (V) -q- N (V) 1'-_ -e- -e- N_..- LO e c: a) a:i M r--: a:i....- '>- a) N....- r--: ::::> E (f) V < I'- (V) < I'- eo <.D '> I'- eo LL ro E ""C N N CD (V) -q- '> I'-.s 15 ro E c: N M -q-- -.::i N M I- ::J LL en en > ro (9 u z l- e e U eo <R- eo.<:: e U t;:::: I- " en e en (5 eo l.() (V) CD '> LO (V) en (V) (V) < LO < I'- -e- N I'- :5 _J q--..- CD CD '+- N o a) '>.. -.::i N M M :::.3.2: I'- I'- M LO I'- I'- ""C eo -q- -q- LO N 1'-_ 1:::: I- '6 (V) c: N N (V)- M N- eo Z e (/) ::J N.. LL e :: ro u x ::::>._ --, W Cl > ) " $ eo a en e o, ::::> " e e _J e W eo LL._ >- > eo I'- CD..- N '> -e- '> I'- eo N I'- eo eo CD I- eo ::: -e- (V) C> LO -e- N '> '> -e- LO N N N I'- C> Z >- ""C -q-- '>..- M -e- eo N_ M LO N " '-_ I'- LO en ::> " c: '> co (V) r--: CD- LO- ::J (..- N.. a) eo r--: co $ e LL -e- <.D I'- M I'- CD (V) N I'- ex; ::::> N..- N CD (V) o_ N I'- _ e U LJ_ > en ro e c: c.>' ::s e _J (9 eo «E a..._ e E > u (..) <.9 eo " x: e eo I- en > :;:::;.!: "5 e n «en c: '+- C " c: en ro Z E (f) en (f) $ (/) " c: eo c: ::J i= W en c: "5 (/) 1i5 U5 en a. " X Z x > W.s en 'M ' 1i5 e a... a... c: (f) en "5 l- X en ' en e CD 1.1 W W s 1i5 a. en.3 c:.23 en c: en ""C en en >. X c: c: U5 c: c: "E en ro.2: '6 en u).5 ::::J ro w ro Ii; a..23 a. c: ro c: c: en en CD s.!: en x 2 ::J " " a:: li'i o " >. c: a. c: x c: E > u c: c: z ::::> c: c: c: ""C ro c: x (/).s "E ro ro ro I- > 8 <+= &.5 a. ro :5 ' (.) 1i5 1:5 '5 E w w en.. en Ii; c: iii en.2: 16 >. ::::>.5 «en.23 en - c Z l!! ::J c en u "'".5 ro Z ro.. c: OJ >. c: E "E a. a. en c: c: w en W c::: en.a; ro!2 I-!2 ' 5 I- c:...2: ""C ro ""C.:E > > >.<:: Z.8> :2: a... «(/) (.) a. a. c: c: a a... e (.) " X ro W x :::J c::: w (/) o III a:: (9 w LL III W e co eo LO I'- eo I'- ( (V) C;; -e- -e- '> :;:::; eo '> LO (V) eo -q- (V) '> N eo eo '> iii c: (V) N <.D eo_ (V) (V) "'!. -er- -e-..- <.D _ N N '>- LO- M M a:i N :s LO a... CD N I'- LO eo eo (V) = <R-

13 <Il I'- (» (V) I'- r:::- "<t 8' (» ;- (..- zs -e- 1. ( I'- "<t ( -e- 1. N I'- (V) I'- 1. "<t_..- (V) "<t 1._ I'- 1. "!_ I'- I'- N- N <Xi - N - (V)- M U - III c: c: III.c: 2- III > (;I')- zs..- III LL <Il > CO CO "" LO I'- N <Il LO LO (V) CO LO «=!. > I'- I'- "" cr) C,r U") c.o <Xi U") M cr) <Xi r--: -..- "<tc: r--: N ( ( ID (V) -e- I'- I'- N I'- N..- I'- (» <Il < <") O_ N N N I'- > E «" C"l :::::J (ij CD c: u::: (;I')- e $ cd ID e..- =,..- e I'- I'- LO e e LO > N I'- > e: U C"l N ci M cr) "<t-...;: ci M. ci c.o <O- r--: M a> e: " :::::J LO N I'- I' E ( N I'- (» ro r-- I'- CD 1. I'- N ( I'- CO a> CO CD (ij rn c: U5 :z "" e:., CO :::J (3 l- LL (;I')- e:.s:: ro e: ::: en "" I- a> e: = C/) a> :::J en (5 e: LL l.o I'- (» (V) I'- I'- (..- N (» -e- (» ( ro a> "<t LO LO ( N -e- (V) LO "<t N (» (» N C; I'- _J x: "<t > (V) "<t N_ (V) I'- I'- 1. N N-. cr) cr) c.o M 1'-- c.o...- ci <Xi r--: c.o '+a> I'- < (V) "<t ( I'- (V) CD N I'- e :::: "" e: Cl ro ( (V) O_ N N ro N I'- _ i::: l- e: a> ('t) :::::J ro Z ro o a> U...- en e: «1..- CO :::J -, ) a> :E :::J "" 13 $ ) ro <Il (;I')-.s::... «"" _J e: e: w ro LL._ ro a> ro :z >- en "" :::J $ CD e: ) C/) e:.:;;.. ::s a e: _J ro «C.. a> E E (.) f;l U5 a>..c:. I- Jl:! Ul c: Ul "" <Il c:... Ul III :::::J Z Ul c: Ul "" en <Il Ul <Il c: e i= LJJ Ul a. <Il :::::J.a Jl:! en <Il >< " >< c: en E LJJ 19 <Il <Il Ul Z en > c: Ul LJJ Ul n, (5 en c: Ul e ID C"l <Il >< iii "" Ul >- a. "" c: 2 :::::J LJJ c: c: <Il III. >< '5 c: c III Jl:! <Il >: -al III E.s c: en 2 Ul Ul c, s <Il en.a - I- LJJ Z a. <Il c U ui <Il W L- III <Il Ul (ij "" Ul.s <Il Ul Ul c: III <Il "" <Il > LJJ U <Il <Il c: >- a. <Il III (.) <Il & c: c " Jl:! III <Il >< <Il >< c :::::J E <Il III.(3 ID z >- III III 19 "E ::::I c.. :::;:::; U LJJ c: en c: 8 iii L- iii Ul :::::J. t;::: ::5 C (5 LJJ <Il Ul I- L- 2 Ul 2 <Il ro <Il III ::> <Il.s Ci Jl:! U c <Il 15 :E..s «C"l <Il <Il = c: E III c: ]i Ul CD c: Z (ij li; I- Z ro e I- <Il 2 >- a.. "" (ij Ul.5.. :E li; C"l LJJ :::i: n, is «en (.) Ul c: c: (5 > <Il n, <Il III <Il <Il > Z., LJJ e c: o, E c, en (.) Cl <:> III "" LJJ >< >< x: ::> <Il c W W o LL co W.s e (.) ro

14 Notes to Basic Financial Statements June 3, 215 Note 1 - Summary of Significant Accounting Policies Organization The Dallas County Flood Control District No.1 (the "District") was originally organized as the Dallas County Levee Improvement District No. 17 under Texas Water Code, Chapter 57, on April 26, On June 6, 1982, the Texas Water Commission entered an order converting the Levee District to a Municipal Utility District under Chapter 54 of the Texas Water Code without change of name. On January 1, 1983, the Commission entered an order changing the name to the Dallas County Municipal Utility District No.2. On September 1, 1983, the District was reorganized under its present name along with a change in principal function through House Bill 2571, which redefined the powers of the District, de-annexed certain residential properties, and changed the method of selecting directors from elective to appointive. The District is located in Dallas County within the city limits of Irving and Grand Prairie, Texas. The District covers a 1,55 acre area owned by approximately 5 individuals and corporations. Most of the property within the District is underdeveloped, although there are some commercial and multi-family residential developments within the District's boundaries. In accordance with House Bill th Legislature, the primary function of the District is to execute a Plan of Reclamation to reclaim land necessary to provide the District with flood protection and internal drainage works to accommodate residential and commercial development within the District. The project includes the construction of a flood canal extending across the District in areas designated by an independent engineer's studies. The District follows Governmental Accounting Standards Board ("GASB") accounting pronouncements which provide for determining which governmental activities, organization and functions should be included within the financial reporting entity. GASB pronouncements set forth the financial accountability of a government organization's electing governing body as the basic criterion for including a possible component governmental organization in primary government's legal entity. Reporting Entity The reporting entity of the District encompasses those activities and functions over which the District's appointed officials exercise significant oversight or control. The board of directors, a five-member group, has governance responsibilities over all activities related to flood control and land reclamation within the jurisdiction of the District. Members of the board are appointed by municipalities, have authority to make decisions, appoint managers and significantly influence operations, and have primary accountability for fiscal matters. The District is not included in any governmental "reporting entity" as defined in Section 21, Codification of Governmental Accounting and Financial Reporting Standards. Page 12

15 Notes to Basic Financial Statements June 3,215 Note 1 - Summary of Significant Accounting Policies, continued Basic Financial Statements Government Wide Statements The District is considered to be a special government. This allows the District to present the required fund and government-wide statements in a single schedule. The requirement for fund financial statements that are prepared on the modified accrual basis of accounting is met with the "total governmental funds" column. A reconciliation column includes those entries needed to convert to the full-accrual basis government-wide statements. The basic financial statements include the combined government-wide (Reporting the District as a whole) and fund financial statements (reporting the District's major funds). The combined financial statements categorize primary activities as a governmental type. In the government-wide statement of net assets, the governmental columns (a) are presented on a consolidated basis by column, (b) are reported on the full accrual, economic resource basis, which recognizes all long-term assets and receivables, as well as long-term debts and obligations. The District's net position is reported in three parts - invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets. The District uses restricted resources to finance qualifying activities. The government-wide statement of activities reports both the gross and net cost of the District's functions. The functions are also supported by general government revenues (property taxes, penalties, investment earnings, and other income). This government-wide focus in the statement of activities is more on the sustainability of the District as an entity and the change in the District's net position resulting from the current year's activities. Basic Financial stetements- Fund Financial Statements The financial transactions of the District are reported in the individual funds portion of the financial statements. Each fund is accounted for by providing a separate set of self-balancing accounts that comprises its assets, liabilities, fund equity, revenues and expenditures/expenses. The various funds are reported by generic classification within the financial statements. The following fund types are used by the District: Governmental Funds: The focus of the governmental funds' measurement is upon determination of financial position and changes in financial position rather than upon net income. The following is a description of the governmental funds of the District: 1. General fund is the operating fund of the District. It is used to account for all financial resources, except those required to be accounted for in another fund. Any unassigned fund balances are considered resources available for current operations. 2. Debt service fund is used to account for the accumulation of funds for the periodic payment of principal and interest on general long-term debt. Page 13

16 Notes to Basic Financial Statements June Note 1 - Summary of Significant Accounting Policies, continued Basis of Accounting Basis of accounting refers to the point at which revenue or expenditures/expenses are recognized and reported in the financial statements. It relates to the timing of the measurements made regardless of the measurement focus applied. 1. Accrual Governmental activities in the government-wide financial statements are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. 2. Modified Accruals The governmental fund portions of the financial statements are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual - i.e., both measurable and available. "Available" means collectible within the current period or within 6 days after year end. Expenditures are generally recognized under the modified accrual basis of accounting when the related liability is incurred. Financial Statement Amounts 1. Cash and Cash Equivalents The District has defined cash and cash equivalents to include cash on hand, demand deposits, and cash with fiscal agent. 2. Accounts Receivable The District provides for uncollectible accounts receivable using the allowance method of accounting for bad debts. Under this method of accounting, a provision for uncollectible accounts is charged to earnings. The allowance account is increased or decreased based on past collection history and management's evaluation of accounts receivable. All amounts considered uncollectible are charged against the allowance account, and recoveries of previously charged off accounts are added to the allowance. As of June 3, 215, no allowance for doubtful accounts was deemed necessary by management of the District. 3. Capital Assets Capital assets purchased or acquired with an original cost of $1, or more are reported at historical cost or estimated historical cost. Contributed assets are reported at fair market value as of the date received. Additions, improvements and other capital outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Depreciation on all capital assets is provided on the straight-line basis over their estimated useful lives, which range from 2-25 years. GASB No. 34 requires the District to report and depreciate new infrastructure assets. Infrastructure assets include roads, levees, and pump stations. These infrastructure assets are likely to be the largest asset class of the District. Page 14

17 DALLAS COUNTY FLOOD CONTROL DISTRICT NO, 1 Notes to Basic Financial Statements June 3,215 Note 1 - Summary of Significant Accounting Policies, continued Financial Statement Amounts, continued 4, Revenues Substantially all governmental fund revenues are accrued, same period in which the taxes are levied, 5, Expenditures Expenditures are recognized when the related fund liability is incurred, 6, Interfund Activity Property taxes are billed and collected within the Interfund activity is reported as loans, reimbursements or transfers, Loans are reported as interfund receivables and payables as appropriate and are subject to elimination upon consolidation, Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers, Transfers between governmental funds are noted as part of the reconciliation to the government-wide financial statements, Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates when determining certain balances, The estimates are subject to future events and actual results may vary, Property values are estimates and change based on Appraisal District judgment and lawsuits, Hence, uncollected taxes are estimates, Depreciation is also determined based on the estimated useful lives of the underlying capital assets, Recently Issued Accounting Pronouncements In June 215, the GASB issued GASB Statement No, 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, effective for fiscal years beginning after June 15, 215, The objective of this Statement is to identify-in the context of the current governmental financial reporting environment-the hierarchy of generally accepted accounting principles ("GAAP"), This Statement reduces the GAAP hierarchy to two categories of authoritative GAAP and addresses the use of authoritative and nonauthoritative literature in the event that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP, The adoption of this Statement is not expected to have a material impact on the District's financial statements, In August 215, the GASB issued GASB Statement No, 77, Tax Abatement Disclosures, effective for fiscal years beginning after December 15, 215, This Statement requires governments that enter into tax abatement agreements to disclose the following information about the agreements: brief descriptive information, such as the tax being abated, the authority under which tax abatements are provided, eligibility criteria, the mechanism by which taxes are abated, provisions for recapturing abated taxes, and the types of commitments made by tax abatement recipients; the gross dollar amount of taxes abated during the period; and commitments made by a government, other than to abate taxes, as part of a tax abatement agreement. The District is currently assessing the potential impact of this statement on its financial statements, Page 15

18 Notes to Basic Financial Statements June 3, 215 Note 2 - Reconciliation of Govemment-Wide and Fund Financial Statements Amounts reported for governmental activities in the statement of net assets are different because: Governmental funds total fund balance Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds: Capital assets, net of accumulated depreciation Deferred tax revenue is not available to pay for current period expenditures and, therefore, is deferred in the funds The following liabilities are not due and payable in the current period and, therefore, are not reported in the funds: Accounts payable Bonds payable Bond interest payable Total net position $ 3,78,179 4,574, 641,215 (15,424) (27,75,) (52,275) $ ( ) Amounts reported for governmental activities in the statement of activities are different because: Excess of revenues and transfers in over expenditures and transfers out Governmental funds report capital outlays as expenditures However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense: Depreciation Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds: Change in deferred tax revenue Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position: Repayment of bond principal Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Change in accounts payable Change in bond interest payable Change in net position $ 81, ,441 (22,48) 48, , (53,349) $ 1,94,385 Note 3 - Delinquent Taxes Receivable Delinquent taxes are prorated between the general and debt service funds based on rates adopted for the year of the levy. The District's uncollected taxes are deemed collectible within one year. Page 16

19 Notes to Basic Financial Statements June 3, 215 Note 4 - Bonded Indebtedness Bonded indebtedness of the District is reflected in the general long-term debt account group, and current requirements for principal and interest expenditures are accounted for in the debt service fund. The five year annual requirements to amortize long-term debt are as follows: Year Ending June 3 Princial Total Interest Reguirements , 2,9,1 2,879, , 1,948,8 2,873, , 1,881,738 2,871, ,65, 1,89,962 2,874, ,145, 1,732,75 2,877, ,17, 7,284,437 14,454, ,3, 4,264,813 14,564, ,285, 581,812 5,866,812 Totals $ 27,75Q 1 QQQ $ 21,513,412 S 49,263,412 The District refinanced its bond debt in December 22, during the fiscal year ended 23. Detailed information is available in the prospectus issued concurrent with the refinancing. The debt balance increase consisted of accreted interest on the old bonds and the cost of the refinance offering. Note 5- Changes in General Fixed Assets Balance, Jul 1, 214 Additions Land $ 4,, $ $ Land improvements 28,474, ,, 28,474, ,441 Less accumulated depreciation (28,215,4) (22,48) $ Z $ 3j5 Q33 Deletions Balance, June 3, 215 $ $ 4,, $ 28,811,88 4,, 28,811,88 (28,237,88) $ 4 QQQ $ 5Z4 Note 6 - Interfund Receivables and Payables There were no interfund balances as of June 3, 215. Note 7 - Property Taxes The lien date for property taxes is January 1 of each year. Taxes are then levied on October 1 of that year and are due upon receipt of the tax bill. The taxes are delinquent if not paid before February 1 of the year following the year in which assessed. Page 17

20 Notes to Basic Financial Statements June 3, 215 Note 7 - Property Taxes, continued Property taxes are generally certified in July each year as of the lien date. Re-certifications take place the remainder of the fiscal year ended June 3, the following year, and thereafter. The last available certification prior to June 3 may be used to determine various amounts in these statements. See use of estimates in Note 1. The District calculates its abatements and provides them to the tax assessor. Taxable amounts are subject to change and most likely will change from the original estimates. The District's property tax rate was $2.75 per $1 assessed valuation, of which $2.3 was for debt service and $.45 was for general operations for taxes assessed January 1, 214 collected in the fiscal year ended June 3, 215. The rates for 214 were adopted in a Resolution of the Board of Directors of the Dallas County Flood Control District No. 1 on September 1, 214. The total assessed valuation of property subject to taxation was approximately $413,378,43 which was reduced by exemptions and abatements to $153,544, taxable. Refunds of property taxes amounted to $1,794 general fund and $55,169 debt service fund. The District records revenue from property taxes in the year in which amounts billed are measurable and available. Except for minor amounts, any uncollected property taxes at June 3 are considered collectable. The District refunds taxes when the Appraisal District lowers the valuations and notifies the District. No reserve is reflected in the statements. The fund equity in the debt service fund is restricted for debt service and fees to defend the right to collect property tax only. Note 8 - Pledge of Revenue The District has not issued bonds for which the District's revenues other than property taxes are pledged for debt service, as the District receives no significant revenue other than property taxes. Note 9 - Commitments and Contingencies The State Legislature may be considering a revision of the ad valorem tax laws, the effect of which is undeterminable. While the amortization schedules of Bond Debt does not reflect the accredited value of the bonds, if they are refinanced or called, substantial unpaid interest may be due in addition to principal. The Federal Emergency Management Agency ("FEMA") is in the process of reviewing expanded flood plain requirements. Specific requirements and the effect on Dallas County Flood Control District No.1 have not been provided and no estimate has been made of the potential cost to the District. The District has implemented a maintenance program with emphasis on complying with the potential requirements which may be forthcoming. Note 1 - Related Party Transaction Related party transactions occurring during the 12-month period ended June 3, 215 and related amounts consist of the following: directors' fees totaling $13,1; fees for administrative assistance, copies, travel, rent, mileage, and other miscellaneous items to Piedmont Apartments, owned by a director's family, totaling $12,16. Page 18

21 Notes to Basic Financial Statements June 3,215 Note 11 - Litigation From time to time the District is involved in various lawsuits and claims against taxpayers for delinquent taxes that occur in the ordinary course of the District's operations. Such lawsuits and claims, in the opinion of management, will not have a direct or material effect on the District's financial position or activities. Note 12 - Changes in General Long-Term Debt The District had the following transactions related to general long-term debt for the year ended June 3, 215: Bonds payable Balance, June 3, 214 $ 28,565, Additions Reductions $ $ 815, Balance, June 3, 215 $ 27,75, Note 13 - Deposits, Securities. and Investments Cash Deposits The District's Board of Directors has authorized certain banks to serve as depositories for funds of the District. To the extent that funds are not insured by the Federal Deposit Insurance Corporation ("FDIC"), they are collateralized by approved pledged securities according to District policy. At June 3, 215, the District's demand deposits and certificates of deposit were entirely insured or collateralized with securities held by the depository institutions. The market value of securities pledged by financial institutions for the benefit of the District totaled $6,998,262 as of June 3, 215. Temporary Investments Statutes authorize the District to invest in obligations of the U.S. Treasury or the State of Texas, certain U.S. agencies, certificates of deposit, money market savings accounts, certain municipal securities, repurchase agreements, common trust funds and other investments specifically allowed by the Public Funds Investment Act of 1987 (Article 842a-1 Vernon's Civil Statutes). Deposits, Securities, and Investments All certificates of deposit at June 3, 215 were FDIC insured. The District's temporary investments as of June 3, 215, are shown below: Name Carrying Amount Market Value Certificates of Deposit $ 111,77 $ 111,77 Note 14 - Pension Plan Obligations District employees do not participate in a public retirement plan, but are covered by Social Security. Page 19

22 Notes to Basic Financial Statements June Note 15 - Expenditures From Debt Service Other Than Interest and Principal 215 Expended from debt service $ Note 16 - Compliance with Debt Service Requirements The District complied in all material respects with the debt service requirements of its bonded debt obligations. Note 17 - Risk Management The District's risks of loss are mitigated by the types of insurance coverage obtained. The District's risk management program includes coverages through the Texas Municipal League Intergovernmental Risk Pool ("TMLlRP" or the "Pool") for commercial general liability, property, boiler and machinery, mobile equipment, pollution, automobile, errors and omissions, and workers' compensation. Losses in excess of the various deductible levels are covered through the District's general fund assets. Settled claims have not exceeded insurance limits for the past three years. TMLlRP is an interlocal agency that provides Texas municipalities and other units of local government with a stable source of risk financing and loss prevention services at the lowest cost consistent with sound business practices. The Pool offers workers' compensation, liability, and property protection to various Texas political subdivisions. By spreading the risk of losses across the state of Texas and across a variety of local governments, and by employing pro-active loss prevention measures, the Pool seeks to provide a stable and long-term risk financing system for its members. Note 18 - Fund Balances In accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, the District's fund balances are classified into a hierarchy based primarily on the extent to which the District has constraints imposed upon the use of its resources reported in governmental funds. Those fund balance classifications are described below. Nonspendable - Amounts that cannot be spent because they are either not in a spendable form or are legally or contractually required to be maintained intact. Restricted - Amounts that can be spent only for specific purposes because of constraints imposed by external providers, or imposed by constitutional provisions or enabling legislation. Committed - Amounts that can only be used for specific purposes pursuant to approval by formal action by the Board. Assigned - For the general fund, the Board of Directors, or an official or body that has been delegated authority by the Board, may appropriate amounts that are to be used for a specific purpose. For all other governmental funds, any remaining positive amounts not previously classified as nonspendable, restricted or committed. Page 2

23 DALLAS COUNTY FLOOD CONTROL DISTRICT NO, 1 Notes to Basic Financial Statements June 3,215 Note 18 - Fund Balances, continued Unassigned - Amounts that are available for any purpose; these amounts can be reported only in the District's general fund, In circumstances where an expenditure is to be made for a purpose for which amounts are available in multiple fund balance classifications, the order in which resources will be expended is as follows: restricted fund balance, committed fund balance, assigned fund balance, and lastly, unassigned fund balance, Note 19 - Subsequent Events Management of the District has reviewed for subsequent events through February 4, 216, the date the financial statements were available to be issued, The District issued $27,749,99 Unlimited Tax Refunding Bonds, Series 215 (the "Bonds") pursuant to an order adopted by the District's Board of Directors on October 28, 215, The net proceeds were placed in escrow and disbursed to fully redeem the District's Unlimited Tax Refunding Bonds, Series 22 on December 21, 215, Bonds in the original principal amount of $844,99 will accrete interest at an initial yield of 2% with a maturity amount of $1,68, due April 1, 216, The remaining bonds mature in various amounts each April 1, 216 through 232, Interest on the remaining bonds is due semiannually at 5,%, Bonds maturing each April 1, 217 through 224 may be redeemed prior to stated maturity at the discretion of the District and bonds maturing each April 1, 228 through 232 are subject to mandatory sinking fund redemption prior to their stated maturity each April 1, 225 through 232, Page 21

24 SUPPLEMENTARY INFORMATION REQUIRED BY TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

25 Services and Rates June Services Provided by the District o Retail Water o Wholesale Water o Drainage o Retail Wastewater D Wholesale Wastewater D Irrigation D Parks/Recreation D Fire Protection D Security D Solid Waste/Garbage X Flood Control D Roads D D Participates in joint venture, regional system and/or wastewater service (other than emergency interconnect Other (specify) 2. Retail Services Providers (You may omit this information if your district does not provide retail services) a. Retail Rates for a 5/8" meter (or equivalent) Water Wastewater Surcharge Flat Rate Maximum Usage YIN Rate per 1 Gallons Over Minimum Use Usage Levels to to to District employs winter averaging for wastewater usage? Yes No Total charges per 1, gallon usage: Water $. Wastewater $. _ b. Water and Wastewater Retail Connections: Total Meter Size Connections Unmetered s 3/4" 1" 11/2' 2" 3" 4" 6" 8' 1" Total Water Total Wastewater Active Connections ESFC YIN x1. x1. x2.s.s.o x8. x1s. x25. xso.o x8. x11s. x1. Water District Financial Management Guide TCEQ publication RG-8 Revised March 24 Page 23

26 Services and Rates (Continued) June 3, Total Water Consumption during the Fiscal Year (rounded to the nearest thousand): (You may omit this information if your district does not provide water.) Gallons pumped into system: --:...:.N/:..:..A, Gallons billed to customers:.ooo "N=/A'-'--.OOO Water Accountability Ratio (Gallons billed/gallons pumped) 4. Standby Fees (authorized only under TWC Section ): Is not applicable. (You may omit this information if your district does not levy standby fees.) Does the District assess standby fees? Yes NoX If yes, Date of the most recent Commission Order: _ Does the District have Operations and Maintenance standby fees? Yes NoX If yes, Date of the most recent Commission Order: _ 5. Location of District (required for first audit year or when information changes, otherwise this information may be omitted) County (ies) in which district is located Dallas Is the District located entirely within one county? Yes X No Is the District located within a city? Entirely X Partly Not at all City (ies) in which district is located. Irvin Grand Prairie Is the District located within a city's extra territorial jurisdiction (ET J)? Entirely Partly Not at all X ETJ's in which district is located: _ Are Board members appointed by an office outside the district? YesX NoD If yes, by whom? ---:::C""'itYL-'c""'o:,:::u!..!.:nc""'il::<..,s oflrvc..:..!!.!in.::l.g and:...;g::=.!ra!..!.:ndp"_!rairie!"_!texas _ Water District Financial Management Guide TCEQ publication RG-8 Revised March 24 Page 24

27 Schedule of General Fund Expenditures Year Ended June 3, 215 Salaries and payroll taxes: Personnel expenditures Payroll taxes Professional fees: Auditing Legal Engineering Tax administration Bookkeeping Contracted services: Appraisal district Maintenance and utilities: Repairs and maintenance Other contracted services Pump station electricity Ad ministrative: Membership Bank charges Office - other Rent Insurance Office - telephone Director fees Capital outlay - expensed $ 98,775 7,667 16,442 12, 39, ,466 1,8 18, ,936 35,829 35,829 26,889 17,459 5,99 49, ,511 8,91 12,16 48,812 5,277 77,351 13,1 13,1 261,294 Solid waste disposal Debt service interest Total Expenditures $ 81,399 Number of persons employed by the District: 3 Full-time; Part-time Page 25

28 Schedule oftemporary Investments Year Ended June Funds Debt Service Fund Savings Debt Service Fund Savings MM Account Debt Service Fund Certificate of Deposit Debt Service Fund Certificate of Deposit Balance, Interest Rate Maturit Date June 3.25 nla $ 2,638,517.1 nla 23, /16/216 11}7.35 6/7/217 1, Total- All Funds 2}73,6.72 General Fund Capital Projects Fund None None Page 26

29 Anall:sis of Taxes Levied and Receivable Year Ended June 3,215 Maintenance Taxes Debt Service Taxes Taxes receivable at beginning of year $ 96,43 $ 497, 215 original tax levy (less abatements) 689,788 3,532,672 Total to be accounted for 785,831 4,29,672 Tax collections: Current year 679,961 3,482,186 Prior years 1,966 1,175 Total collections 681,927 3,492,361 Taxes receivable at end of year June 3,215 $ 13,94 $ 537,311 Taxes receivable, by year 214 9,867 5, ,75 8, ,856 22, ,762 54, ,923 46, ,892 41, ,497 72, ,824 17, ,84 18, ,69 21, ,621 16, ,523 15, ,543 34, ,24 21, ,191 12, , , , Taxes receivable at end of year $ 13,94 $ 537,311 Page 27