COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEARS ENDED December 31, 2014 and December 31, San Antonio, Texas

Transcription

1 COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEARS ENDED December 31, 2014 and December 31, 2013 San Antonio, Texas

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3 San Antonio, Texas COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Years Ended December 31, 2014 and December 31, 2013 (Prepared by the Edwards Aquifer Authority Administration & Financial Services Team)

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5 TABLE OF CONTENTS INTRODUCTORY SECTION... 1 CAFR Award Certificate... 3 Vision/Mission Statement/Goals... 5 Edwards Aquifer Authority Act... 7 Transmittal Letter... 9 Board of Directors Organizational Team Structure Regional Map FINANCIAL SECTION Independent Auditor s Report Management s Discussion and Analysis Basic Financial Statements Statements of Net Position Statements of Revenues, Expenses, and Changes in Net Position Statements of Cash Flows Notes to Financial Statements Required Supplementary Information Pension and Retirement Plan Schedule of Funding Progress Supplementary Information Schedule of Expenditures Budget and Actual (General Operations) Schedule of Expenditures Budget and Actual (Habitat Conservation Plan) Consolidated Components of Net Position... 64

6 STATISTICAL SECTION Table of Contents I. Financial Trend Information Table 1 Net Position by Component Table 2 Changes in Net Position II. IV. Revenue Capacity Information Table 3 Aquifer Management Fee Rates Table 4 Principal Aquifer Management Fee Payers Demographic and Economic Information Table 5 Demographic Statistics Table 6 Principal Employers V. Operating Information Table 7 Cash & Investment Balances Table 8 Number of Employees Table 9 Operating Indicators for Demand or Level of Service Table 10 Revenues by Source Table 11 Expenditures by Function VI. Miscellaneous Information Table 12 Miscellaneous Statistics... 79

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11 VISION STATEMENT The EAA s vision is a comprehensive description of how the organization will look in the future. The Edwards Aquifer Authority is a regional water management agency that regulates with integrity, transparency, respect and commitment to the sustainability of the aquifer. MISSION STATEMENT The Edwards Aquifer Authority manages, enhances, and protects the Edwards Aquifer system. GOALS The EAA has eight (8) major strategic goals that are the focus of the agency through 2017: Sustain Federally Protected Aquifer-Dependent Species Ensure Effective Management of the Edwards Aquifer Enhance Recharge Program for Improved Aquifer Management and Springflow Maintenance Prevent the Pollution of the Aquifer Conduct Research that Enhances Understanding and Effective Management of the Aquifer Develop a Diverse, Service-Oriented Organization Build Shared Value in the EAA Mission Sustain Fiscal Stability 5

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13 THE EDWARDS AQUIFER AUTHORITY ACT The Edwards Aquifer Authority Act 1, as adopted by the Texas Legislature in 1993, created the Edwards Aquifer Authority (the EAA ) to preserve and protect the Edwards Aquifer as a unique groundwater resource. However, legal challenges related to the passage of the act prevented the EAA from operating until June The Act created a 17-member board of directors, including 15 directors elected from single-member districts across the region, and two non-voting appointed directors. The board carries out its duties, as prescribed by the Act, by setting policy aimed at fulfilling the mission of managing, enhancing and protecting the aquifer. 1 Act of May 30, 1993, 73rd Leg., R.S., ch. 626, 1993 Tex. Gen. Laws 2350; as amended by Act of May 16, 1995, 74th Leg., R.S., ch. 524, 1995 Tex. Gen. Laws 3280; Act of May 29, 1995, 74th Leg., R.S., ch. 261, 1995 Tex. Gen. Laws 2505; Act of May 6, 1999, 76th Leg., R.S., ch. 163, 1999 Tex. Gen. Laws 634; Act of May 25, 2001, 77th Leg., R.S., ch. 1192, 2001 Tex. Gen. Laws 2696; Act of May 28, 2001, 77th Leg., R.S., ch. 966, and , 2001 Tex. Gen. Laws 1991, and ; Act of June 1, 2003, 78th Leg., R.S., ch. 1112, 6.01(4), 2003 Tex. Gen. Laws 3188, 3193; Act of May 23, 2007, 80th Leg., R.S., ch. 510, 2007 Tex. Gen. Laws 900; Act of May 28, 2007, 80th Leg., R.S., ch. 1351, , 2007 Tex. Gen. Laws 4612, 4627; Act of May 28, 2007, 80th Leg., R.S., ch. 1430, , 2007 Tex. Gen. Laws 5848, 5901; and Act of May 21, 2009, 81st Leg., R.S., ch. 1080, 2009 Tex. Gen. Laws 2818; and Act of May 20, 2013, 83rd Leg., R.S., ch. 783, 2013 Tex. Gen. Laws

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15 June 26, 2015 To Chairman Luana Buckner, the Edwards Aquifer Authority Board of Directors, and to the citizens of Texas within the jurisdictional region of the Edwards Aquifer Authority (the EAA ): We are pleased to present the comprehensive annual financial report of the EAA for the fiscal year ended December 31, The EAA is responsible for the accuracy and completeness of the information included in this report. To the best of our knowledge, all information in this report is accurate in all respects and is presented in a manner designed to enable the reader to gain an understanding of the EAA s financial and operational activities. This comprehensive annual financial report is presented in three sections: introductory; financial; and statistical. The introductory section includes this transmittal letter, the EAA s organizational chart and a list of the board of directors. The financial section includes the basic financial statements, the required and other supplementary information, as well as the auditor s report on the basic financial statements and schedules. In the auditor s report, the firm Weaver and Tidwell, LLP expresses its unqualified opinion that the basic financial statements are presented fairly and in conformity with generally accepted accounting principles. Management s discussion and analysis (MD&A) immediately follows the independent auditor s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. The statistical section includes selected financial and demographic information. This information is presented in both single-year and multi-year formats. Multi-year information dates back to Profile of the EAA The southern portion of the Edwards Aquifer is one of the world's unique groundwater resources, spanning about 180 miles of south central Texas. It is the primary water resource for a region of more than 2 million people and the sole source of water for a 9

16 unique system of aquatic life, including several federally-listed threatened and endangered species. Cities, towns, rural communities, farms and ranches all depend on the aquifer's water for household, agricultural, industrial and recreational purposes. The diversity of uses illustrates the importance of the aquifer to the lives and livelihoods of residents in the Edwards Aquifer region. The EAA, created by the Texas Legislature to preserve and protect this unique groundwater resource, is governed by a board of directors that sets policy to manage, conserve, preserve and protect the aquifer and works to enhance recharge and prevent waste or pollution of the aquifer. The 17-member board consists of 15 elected members from the region and two, non-voting, appointed members to carry out the duties set forth in the Edwards Aquifer Authority Act. Economic Conditions The EAA s jurisdiction includes all or portions of eight counties Atascosa, Bexar, Caldwell, Comal, Guadalupe, Hays, Medina and Uvalde. According to the U.S. Census Bureau, these counties experienced significant growth between 2000 and 2010 as evident in the table below. County 2000 Population (Total) 2010 Population (Total) Population Change % Population Change Atascosa 38,623 44,911 6, % Bexar 1,392,935 1,714, , % Caldwell 32,185 38,066 5, % Comal 78, ,472 30, % Guadalupe 89, ,533 42, % Hays 97, ,107 59, % Medina 39,304 46,006 6, % Uvalde 25,926 26, % Source: U.S. Census Bureau In terms of actual population, Bexar County experienced the most significant growth, gaining 321,838 residents since San Antonio, the county seat of Bexar County and home to just under 1.72 million people according to the 2010 census estimates, is the nation's seventh largest city. Comal, Guadalupe, and Hays counties, located in or near the rapidly-growing corridor between San Antonio and Austin, also experienced significant percentage population increases over the past decade. A region map is available on page 15. Bexar County represents about 76% of the total population of the EAA s region. The average unemployment rate in Bexar County for 2014, according to the Texas Workforce Commission, was 4.6%, down from 5.8% in The local unemployment rate was below the 2014 state-wide and national averages of 5.1% and 6.2%, respectively. 10

17 As noted in the March 2015 publication of the Federal Reserve Bank of Dallas San Antonio Economic Indicators report, economic growth in the San Antonio Metro area remained steady at a 6.4% annualized rate after peaking in mid Declines in the unemployment rate in 2014 and strong job gains in the second half of 2014 helped to maintain a high growth rate. Job growth was led by construction and mining at an 18.3% annualized pace with professional and business services accounting for one-third the total net new jobs (primarily from growth in administrative services such as clerical and cleaning jobs). Financial activity employment (mainly hiring among insurance carriers) also increased in 2014 by 6.5%. The housing market gained strength in the 4 th quarter of 2014 and is expected to continue into The 2014 single-family market showed an average 14% improvement over A significant portion of San Antonio s economy depends on tourism. According to a report by Source Strategies, Inc. for the Office of the Governor, Economic Development & Tourism, the average lodging occupancy rate increased only.1% from 2013 to 64.5% in The average rate per room increased 2.7% in 2014 with supply growth of 1% (400 net rooms). The Edwards Aquifer plays a critical role in the continued viability of the entire region as a home for citizens and businesses. As the primary source of water for all uses, the quantity and quality of water provided by the Edwards Aquifer are vital to the region s economic sustainability Financial Policies and Long-Term Financial Planning The EAA s management is responsible for administering the internal control structure designed to protect the EAA s assets from loss, theft or misuse, and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements conforming with Generally Accepted Accounting Principles (GAAP). The EAA s accounting system and purchasing process serve to safeguard assets and provide reasonable assurance that financial transactions are executed properly and efficiently. However, due to inherent limitations, a control system, regardless how well designed and operated, can provide only reasonable, not absolute, assurance that objectives of the control system are met. Budgeting controls. The EAA s bylaws adopted by the board of directors require the general manager to prepare an annual budget prior to the start of each fiscal year. The budget includes estimated funds available from all sources and includes appropriations for expenses anticipated in that year to conduct the activities of the EAA. The general manager is authorized to expend funds in amounts up to but not exceeding the amounts included in the budget adopted by the board. In addition, the bylaws require board approval of any 11

18 individual EAA expenditure or budget adjustment exceeding $50,000. The board receives regular monthly reports comparing the EAA s actual expenses to the budget. General government functions. Funding for all of the EAA s general government programs comes primarily from an aquifer management fee charged to non-agricultural (municipal and industrial) and agricultural users of Edwards Aquifer groundwater. Beginning in 2012, a new program aquifer management fee was assessed to non-agricultural users in support of the Edwards Aquifer Habitat Conservation Plan (EAHCP) activities. Fees for agricultural users are charged on groundwater actually used during the preceding year. The EAA offered a rebate program, which was eliminated in 2013, whereby aquifer management fees for water that is ultimately conserved are refunded. With the elimination of the rebate program, the EAA was able to reduce the aquifer management fee rate to $37.00 in 2014 and, when combined with the $47.00 program aquifer management fee rate, maintain a stable combined rate of $84.00 for non-agricultural users for a third consecutive year. Below is a summary of aquifer management fee and program aquifer management fee rates for the last five years: Aquifer Management Fee History (dollars per acre-foot) Aquifer Management Fee Non-Agricultural $39.00 $39.00 $47.00 $47.00 $37.00 Agricultural $2.00 $2.00 $2.00 $2.00 $2.00 Program Aquifer Management Fee Non-Agricultural n/a n/a $37.00 $37.00 $47.00 Total Non-Agricultural $39.00 $39.00 $84.00 $84.00 $84.00 For more information on the EAA s revenue and expense activity in 2014, please refer to Management s Discussion and Analysis included in the Financial section of this report. The board of directors adopted the EAA Strategic Plan in November Updated annually, the Strategic Plan serves as a blueprint for meeting the EAA s legislative mandate and overall mission. The EAA has identified eight strategic goals that are arranged among two thematic areas: Aquifer Conservation and Protection These are two fundamental objectives of the EAA s statutory mission and they are prominently reflected in the agency s strategic goals. Underscoring the significance of these goals is the region s anticipated population growth over the next 50 years. This increased demand for water reinforces the importance of the EAA s role in effectively managing withdrawals from the aquifer, as mandated by statute, and the requirement to 12

19 maintain compliance with the Incidental Take Permit (ITP) issued by the U.S. Fish and Wildlife Service (USFWS) to address the needs of natural habitats of federally protected species. Likewise, as population grows, protecting the quality of water in the aquifer will remain extremely critical to the region. Organizational Effectiveness In order to accomplish the agency s strategic goals, there must be an infrastructure of professional staff and the supporting facilities that complements these efforts. Underlying this thematic area is the idea that effective policy and regulation requires accurate and timely information, focusing on providing knowledge of the aquifer and awareness of the agency to the public and lastly, maintaining stability in the fee rate structure and appropriate reserves for funding the EAHCP for long term financial stability of the EAA. The annual update to the Strategic Plan and the annual operating and capital budgets are vital components of the EAA s long-range financial plan. Major Initiatives As provided for in the Edwards Aquifer Authority Act, the EAA is vested with the powers, rights, and privileges necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in the aquifer. The below actions and initiatives further this directive. Drought Management. In 2014, the persistent drought experienced in the region resulted in below-average recharge to the Edwards Aquifer and prompted the EAA (under its Critical Period Management Plan) to require permitted users to curtail withdrawals from the Edwards Aquifer by 44% in the Uvalde Pool and 35% in the San Antonio Pool. Other conservation measures, as provided for by the Critical Period Management Plan and the EACHP, are implemented according to the requirements in those plans. Edwards Aquifer Habitat Conservation Plan. In 2012, the EAA board approved the Edwards Aquifer Habitat Conservation Plan (EAHCP) start-up funding with anticipation of approval of the EAHCP by the U.S. Fish and Wildlife Service (USFWS) in early The USFWS issued an Incidental Take Permit (ITP) on March 18, 2013 which is supported by the EAHCP and will expire in March The EAHCP consists of a number of measures designed to maintain minimum springflows at Comal Springs and San Marcos Springs, to improve conditions at those springs, and to provide for artificial refugia in the event conditions warrant the removal of endangered specifies from their natural habitat. 13

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21 EDWARDS AQUIFER AUTHORITY BOARD OF DIRECTORS County/District No. Director Term Expires Bexar County District 1 Carol Patterson December 1, 2018 District 2 Byron Miller December 1, 2016 District 3 Rebekah Bustamante December 1, 2018 District 4 Benjamin Franklin Youngblood III December 1, 2016 District 5 Ronald R. Ellis, Treasurer December 1, 2018 District 6 Susan K. Hughes, Vice-Chairman December 1, 2016 District 7 Enrique Valdivia, Secretary December 1, 2018 Comal County District 8 Craig Massouh December 1, 2016 Comal & Guadalupe Counties District 9 Ronald J. Walton, Sr. December 1, 2018 Hays County District 10 Pat Stroka December 1, 2016 Hays & Caldwell Counties District 11 Amy Lea S.J. Akers December 1, 2018 Medina County District 12 Scott Yanta December 1, 2016 Medina & Atascosa Counties District 13 Luana Buckner, Chairman December 1, 2018 Uvalde County District 14 Don Laffere December 1, 2016 District 15 Rader Gilleland December 1, 2018 South Central Texas Water Advisory Committee Representative (appointed) Jerry James December 1, 2016 Medina/Uvalde County Representative (appointed) Fohn Bendele December 1,

22 THE EDWARDS AQUIFER AUTHORITY ORGANIZATIONAL TEAM STRUCTURE Board of Directors General Manager Deputy General Manager Executive Director Administration & Financial Services Executive Director Aquifer Management Services Executive Director Habitat Conservation Program Executive Direector External & Regulatory Affairs Financial Services Aquifer Science Research Comal Springs Board Relations Human Resources Aquifer Protection Modeling & Research Communications & External Affairs Information Technology Modeling & Data Management Program Administration External Initiatives Remote Gauging Refugia Meters San Marcos Springs Regulatory Affairs & Water Resources Springflow Protection 16

23 THE EDWARDS AQUIFER REGION 17

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25 Financial Section 19

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27 EDWARDS AQUIFER AUTHORITY ANNUAL FINANCIAL REPORT DECEMBER 31,

28 C O N T E N T S Page FINANCIAL SECTION INDEPENDENT AUDITOR S REPORT... 1 MANAGEMENT S DISCUSSION AND ANALYSIS... 3 BASIC FINANCIAL STATEMENTS Statements of Net Position Statements of Revenues, Expenses, and Changes in Net Position Statements of Cash Flows Notes to Basic Financial Statements REQUIRED SUPPLEMENTARY INFORMATION Pension and Retirement Plan Schedule of Funding Progress SUPPLEMENTARY INFORMATION Schedule of Expenses Budget and Actual (General Operations) Schedule of Expenses Budget and Actual (Habitat Conservation Plan) Consolidated Components of Net Position

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30 INDEPENDENT AUDITOR S REPORT Members of the Finance-Administration Committee and Board of Directors Edwards Aquifer Authority San Antonio, Texas We have audited the accompanying basic financial statements of Edwards Aquifer Authority (EAA), which comprise the statements of net position as of December 31, 2014 and 2013, and the related statements of revenues, expenses and changes in net position, and cash flows for the years then ended, and the related notes to the basic financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these basic 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 basic financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the basic 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. AN INDEPENDENT MEMBER OF BAKER TILLY INTERNATIONAL WEAVER AND TIDWELL, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS 9311 SAN PEDRO AVENUE, SUITE 1400, SAN ANTONIO, TX P: F:

31 Members of the Finance-Administration Committee and Board of Directors Edwards Aquifer Authority Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Edwards Aquifer Authority as of December 31, 2014 and 2013, and the results of its operations and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplemental Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis, and the pension and retirement plan schedule of funding progress on pages 3 through 15 and page 34, respectively, 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 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 other knowledge we obtained during 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. Supplemental Information Our audit was conducted for the purpose of forming an opinion on the basic financial statements as a whole. The schedule of expenses budget and actual (general operations & habitat conservation plan) and consolidated components of net position supplementary information as 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 has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. WEAVER AND TIDWELL, L.L.P. San Antonio, Texas April 14,

32 EDWARDS AQUIFER AUTHORITY MANAGEMENT S DISCUSSION AND ANALYSIS This discussion and analysis serves as an introduction to the Edwards Aquifer Authority (EAA) basic financial statements and provides an overview and analysis of financial activities for the year ended December 31, 2014, and identifies changes in its financial position for the year. The discussion and analysis provides summary level financial information; therefore, it should be read in conjunction with the accompanying financial statements including the notes to the financial statements, which follow this section. Condensed financial data is presented for the three years ended December 31, 2014, 2013, and 2012, as required by Governmental Accounting Standards Board (GASB) Statement No. 34. FINANCIAL HIGHLIGHTS The aquifer management fee, assessed to non-agricultural permit holders to support the general operations of the EAA, was decreased to $37 per acre-foot in 2014 from $47 per acre-foot in Although the rate decreased, net revenue increased $2,251,424in 2014 due to the dissolution of the EAA aquifer management fee rebate program (discussed in detail below). The aquifer management fee rate in 2014 provided funding for enhance water quality initiatives and, when combined with the EAHCP program aquifer management fee referenced below, provided a flat, sustainable fee rate for non-agricultural permit holders for a third consecutive year. The $47 rate in 2013 funded the EAA aquifer management fee rebate program, as well as supported the general operations of the EAA, resulted in a net revenue decrease of $735,767 over The second year of full implementation of the Edwards Aquifer Habitat Conservation Plan (EAHCP) was completed in The EAHCP consists of a number of measures designed to maintain minimum springflows at Comal Springs and San Marcos Springs, to improve conditions at those springs, and to provide for artificial refugia in the event conditions warrant the removal of endangered species from their natural habitat. The EAHCP program aquifer management fee, assessed only to non-agricultural permit holders, was increased to $47 per acre-foot in 2014 from $37 per acre-foot in 2013 in order to meet the obligations of that program. This increase resulted in increased revenues of $3,825,133 over The 2013 EAHCP program aquifer management fee of $37 per acre-foot rate resulted in a revenue increase of $612,532 over The assets of the EAA exceeded its liabilities at December 31, 2014 by $51,058,249 (net position). Of this amount, $35,041,221 is reported as restricted, related to the EAHCP, and an unrestricted amount of $4,604,490 available to meet ongoing EAA general operating obligations. The remaining balance consists of $11,412,538 that the EAA has invested in capital assets, net of related debt. EAA total net position increased by $12,323,156 or 31.8% from The increase includes $10,880,618 related to EAHCP, and $1,442,538 related to general operations. 26

33 In 2014, the EAA eliminated the aquifer management fee rebate program. Under the rebate program, non-agricultural permit holders received a rebate of aquifer management fees paid for groundwater conserved in the previous year. The rebate was not applicable to the newly implemented EAHCP program aquifer management fee. Since the inception of the rebate program, rebates led to a decline in the EAA s annual net income. The EAA board elected to discontinue the rebate program in 2014 because of the unsustainable decline in annual net revenue. The 2013 rebate, as reconciled, was $5.9 million, an increase from $5.4 million estimated in In 2014, the EAA paid $65,000 towards the principal portion of its General Improvement Revenue Note, issued in No additional debt was issued during Footnote 3 to the financial statements provides details of the long-term debt obligation. USING THIS ANNUAL REPORT Since all activities of the EAA are financed primarily by fees charged to external parties, it is reported as an enterprise fund and considered a business-type activity in accordance with the requirements of GASB Statement No. 34. In addition, because the EAA is engaged only in business-type activities, it is required to present only the financial statements required for enterprise funds. Three financial statements are presented: the Statement of Net Position; the Statement of Revenues, Expenses, and Changes in Net Position; and the Statement of Cash Flows. One of the most important questions asked about EAA finances is whether or not its financial position has improved as a result of the year s activities. The Statement of Net Position; Statement of Revenues, Expenses, and Changes in Net Position; and Statement of Cash Flows present information that is useful in addressing this question and in assessing the financial health of the EAA. Statement of Net Position The Statement of Net Position presents EAA assets, liabilities, and net position as of the end of the fiscal year. This statement is prepared under the accrual basis of accounting in which revenues and assets are recognized when earned or acquired, and expenses and liabilities are recognized when incurred regardless of when cash is received or paid. The information presented is useful in determining the assets available for EAA operations as well as how much the EAA owes to vendors, debt holders, and other entities at the end of the year. Net position the difference between assets and liabilities can be a factor in assessing the financial position of the EAA. Over time, increases or decreases in net position are one indicator of whether its financial health is improving or deteriorating when considered with other factors such as debt activity and investment in capital assets. 27

34 Assets and liabilities are classified based on liquidity and longevity. Current liabilities are generally those liabilities which are due within one year, and current assets are those assets which are available to satisfy current liabilities. Non-current assets include only capital assets. Net position is presented in three major categories. Amounts presented as Net Investment in Capital Assets represents EAA investment in land, buildings and improvements, furniture and equipment, and vehicles, net of accumulated depreciation. Restricted net position are those assets where constraints are placed on them either externally by creditors (such as through debt covenants), grantors, contributors, or laws and regulations of other governments; or by law through constitutional provisions or enabling legislation of the government itself. The EAA currently has restricted assets related to the EAHCP. Unrestricted net position is available for any lawful purpose. Further detail concerning assets, liabilities, and net position is presented in the Statement of Net Position and notes to the basic financial statements. Statement of Revenues, Expenses, and Changes in Net Position Changes in total net position, as presented in the Statement of Net Position, are based on the activity presented in the Statement of Revenues, Expenses, and Changes in Net Position. Principal operating revenues of the EAA are generated from aquifer management fees, and program aquifer management fees, charged to EAA regular permit holders. Operating expenses are incurred in administering the activities of the EAA and the EAHCP. The utilization of long-lived assets is also included in operating expenses as depreciation, which amortizes the cost of an asset over its expected useful life. All other activity is classified as non-operating revenues and expenses. Total revenues, total expenses, operating income (loss), and the change in net position are all important factors when assessing the change in the EAA financial position. Further detail is presented in the Statement of Revenues, Expenses, and Changes in Net Position and notes to the basic financial statements. Statement of Cash Flows The Statement of Cash Flows provides information about the cash receipts and cash payments of the EAA during a period. The Statement of Cash Flows also helps users assess (1) the ability of the EAA to meet its obligations as they come due and (2) the need for external financing. This statement presents information related to cash inflows/outflows summarized by operating, non-capital financing, capital and related financing, and investing activities. For additional detail concerning these classifications see the Statement of Cash Flows and notes to the basic financial statements. CONDENSED FINANCIAL INFORMATION At the close of the fiscal year 2014, the EAA is able to report either positive or zero balances in all three categories of net position. Total net position as of December 31, 2014 was 28

35 $51,058,249 of which $11,412,538 is represented by capital assets (land, buildings, vehicles, software, hardware and equipment), net of related debt. Total net position increased $12,323,156 from 2013 to 2014 and $9,831,680 from 2012 to These increases are primarily attributable to revenue from the EAHCP program aquifer management fee (implemented in 2012), which represents $10,880,618 of the 2014 increase and $9,786,739 of the 2013 increase. Section of the EAHCP Plan provides for the accumulation of a balance not to exceed $46 million. Unrestricted net position and investment in capital assets (net of debt), increased $1,442,538 from 2013 to 2014, and $44,941 from 2012 to The following table depicts comparative condensed financial information on assets, liabilities, and net position. Years Ended December 31, 2014 December 31, 2013 December 31, 2012 Assets: Current assets $ 8,884,022 $ 15,019,740 $ 13,877,941 Restricted Current Assets - EAHCP 35,041,221 24,160,603 14,373,864 Capital assets, net of accumulated depreciation 14,717,538 14,381,083 13,510,441 Total assets $ 58,642,781 $ 53,561,426 $ 41,762,246 Liabilities: Current liabilities $ 4,349,532 $ 11,521,333 $ 9,488,833 Noncurrent liabilities 3,235,000 3,305,000 3,370,000 Total liabilities $ 7,584,532 $ 14,826,333 $ 12,858,833 Net Position: Net Investment in Capital Assets $ 11,412,538 $ 11,011,083 $ 10,140,441 Restricted - Habitat Conservation Plan 35,041,221 24,160,603 14,373,864 Unrestricted 4,604,490 3,563,407 4,389,108 Total net position $ 51,058,249 $ 38,735,093 $ 28,903,413 Total liabilities and net position $ 58,642,781 $ 53,561,426 $ 41,762,246 The following table compares condensed financial information on revenues, expenses, and changes in net position and related detailed presentation of the key factors influencing the current year activity. 29

36 Years Ended December 31, 2014 December 31, 2013 December 31, 2012 Total operating revenues (see detail below) $ 33,840,149 $ 27,770,967 $ 27,934,194 Total operating expenses (see detail below) 21,636,385 18,037,186 12,241,468 Operating Income (loss) 12,203,764 9,733,781 15,692,726 Non-operating revenue and (expenses) Grant revenue Investment income 110,180 94,028 70,776 Miscellaneous 4,378 4,426 3,518 Loss on sale of capital assets 4,834 (555) (29,692) Total Non-operating revenues (expenses) 119,392 97,899 44,602 Change in net position 12,323,156 9,831,680 15,737,328 Total net position, beginning balance 38,735,093 28,903,413 13,166,085 Total net position, ending balance $ 51,058,249 $ 38,735,093 $ 28,903,413 OPERATING REVENUES Operating revenues increased $6,069,182, or 21.9%, from 2013 to This increase is primarily attributable to the dissolution of the aquifer management fee rebate program. From 2012 to 2013, operating revenues decreased by $163,227, or.6%, due primarily to the increase in estimated rebates to be paid to non-agricultural permit holders offset by the revenue related to the EAHCP. Operating revenues supported two programmatic areas: EAA General Operations and the Edwards Aquifer Habitat Conservation Plan (EAHCP). The following operating revenue information is provided for each of the program areas independently. EAA General Operations The aquifer management fee supports the general operating activities of the EAA. The aquifer management fee represents 43.5% of the overall 2014 operating revenue, and 44.9% of the overall 2013 operating revenue, and 47.2% of the overall 2012 operating revenue. In 2012, the aquifer management fee charged to non-agricultural permit holders was increased from $39 per acre-foot to $47 per acre-foot and, in 2014, was reduced to $37 per acre-foot. In 2014, the aquifer management fee rebate was discontinued; however, the rebate liability reconciliation from the previous year based on actual usage reporting resulted in $142,910 of revenue being recorded. In 2013 and 2012, gross aquifer management fee revenue is adjusted (as contra revenue) to reflect the aquifer management fee rebate program. The aquifer management fee rebate liability increased in 2013 and 2012 by $789,421 and $1,311,779, respectively, because actual water pumped from the aquifer in those years was lower due to continued drought conditions and the issuance of prolonged and escalated critical period conservation measures. With the elimination of the aquifer management rebate in 2014, the EAA experienced an 18.1% increase in aquifer management fee revenue, as compared to a 2013 decrease of 5.6% and a net 15.4% increase in 2012 in aquifer management fee revenue (due to the rate increase in 2012). 30

37 EAHCP Assessed for the first time in 2012, the EAHCP program aquifer management fee supports EAHCP activities. The program aquifer management fee represents 56.3% of the overall 2014 operating revenue, 54.8% of the overall 2013 operating revenue, and 52.3% of the overall 2012 operating revenue. The EAHCP program aquifer management fee, increased in 2014 to $47 per acre-foot but remained flat in 2012 and 2013 at $37 per acre-foot, is assessed to non-agricultural permit holders and was not eligible for rebate under the EAA aquifer management fee rebate program. In 2014, the EAHCP program experienced a 25.1% increase in EAHCP program aquifer management fee revenue, as compared to a 2013 increase of 4.2% in EAHCP program aquifer management fee revenue. Net aquifer management fee and program aquifer management fee revenue, as a percentage of total operating revenue, was 99.8% in 2014, 99.7% in 2013, and 99.6% in Compromise and Settlements revenue are for settlements paid by various entities for EAA rules violations represents.1% in 2014, 0.2% in 2013, and 0.4% in 2012 of total operating revenues. Other revenue comes from such sources as well registration, transfer application fees, well construction application fees, and reimbursement for public information requests representing about 0.1% in 2014, 2013 and 2012 of total operating revenues. The following information depicts the components of operating revenues, for both program areas, for the fiscal years-ended December 31, 2014, 2013, and Percent of Percent of Percent of Operating Revenues FY2014 Total FY2013 Total FY2012 Total Aquifer management fees $ 14,714, % $ 12,463, % $ 13,198, % Program aquifer management fees 19,048, % 15,223, % 14,610, % Enforcement settlements 43, % 57, % 104, % Other Charges 33, % 26, % 19, % Total $ 33,840, % $ 27,770, % $ 27,934, % OPERATING EXPENSES Total EAA operating expenses increased $3,599,199 (19.9%) in 2014, $5,795,718 (47.3%) in 2013, and $1,186,809 (10.7%) in These increases year over year are the result of a number of factors as discussed below. Operating expenses are presented by the natural classification method, a format in which the expense is shown by type of expense rather than its functional or programmatic classification. 31

38 EAA General Operations & EAHCP Percent of Percent of Percent of Operating Expenses FY2014 Total FY2013 Total FY2012 Total Salaries & Wages $ 5,867, % $ 5,696, % $ 5,567, % Employee Benefits 1,670, % 1,508, % 1,421, % Professional Technical Services 11,641, % 8,784, % 3,479, % Property Services 537, % 417, % 528, % Other Services 663, % 639, % 483, % Supplies 434, % 448, % 331, % Depreciation 822, % 541, % 429, % Total $ 21,636, % $ 18,037, % $ 12,241, % Consistent with the presentation of operating revenues, total operating expenses are broken down separately by programmatic area below for EAA General Operations and EAHCP. EAA General Operations Salaries and Wages increased $129,645, or 2.4%, in 2014 primarily due to vacant positions being filled, salary increases related to promotions and merit increases. In 2013, salaries and wages decreased $4,585, or 0.1%, mainly attributable to the salary offset of vacant positions throughout the year to employee salary increases related to promotions and merit increases. An increase in 2012 of $85,906, or 1.6%, resulted from higher salary costs associated with promotions and employee merit increases and increased accrued personal leave. Employee Benefits increased $140,703, or 9.86%, in 2014, $36,849, or 2.7%, in 2013, and $19,326, or 1.4%, in These increases each year are directly attributable to increased wages and the associated FICA matching, retirement contributions, as well as, increased medical insurance premiums. Professional and Technical Services increased $25,767, or.7%, in 2014, $381,977, or 11.2%, in 2013 and $768,015, or 29.2%, in In 2014, increases in legal costs offset by decreases in other professional services attributed to the minor increase. In 2013, legal matters caused an increase but were offset by a decrease in aquifer studies, which were moved to the EAHCP program. In 2012, legal fees represented approximately 40% of the increase with the remaining increase related to new aquifer studies, increased critical period monitoring due to drought conditions, and lab testing services. Property Services, Other Services, and Supplies had a combined total of $1,611,671 in 2014, representing a $120,950 (8.11%) increase related to increased utilities, equipment and facilities maintenance, and conservation grants. Conservation grants of $65,900 accounted for approximately 54% of this increase. A 2013 combined total of $1,490,721 was an increase of $162,905 or 1.3% over the 2012 combined total of $1,327,817. This increase primarily relates to increased utilities, maintenance, and other similar costs associated with the building consolidation project, which was correspondingly offset by facility rental that is no 32

39 longer required as the building consolidation project was completed in January The 2012 expenses were $1,327,817, representing a decrease of $74,039 or 5.3% compared to the 2011 combined total of $1,401,856. The most significant factor that led to the decrease in these categories was the fact the EAA conservation grant program approved grant reimbursements of $177,491 in 2011 and only $9,135 in Offsetting this larger decrease predominantly included increased expenditures related to repairs at monitor wells/sites and dams of $59,624, general office facility maintenance increases of $4,770, public notices of $60,168, and equipment repairs/maintenance of $15,439. Depreciation expense increased $281,090, or 52.0%, in This increase included a useful life correction on the 2013 building asset addition, which added an additional $147,674 in depreciation expenses for the year. Increases of $111,909, or 26.1%, in 2013 and $82,464, or 23.8%, in 2012 were also recognized. These increases are primarily related to the building consolidation project that concluded in January The following information, also depicted in table and graphic form, summarizes EAA general operations operating expenses for the fiscal years-ended December 31, 2014, 2013, and EAA General Operations Percent of Percent of Percent of Operating Expenses FY2014 Total FY2013 Total FY2012 Total Salaries & Wages $ 5,515, % $ 5,385, % $ 5,389, % Employee Benefits 1,568, % 1,427, % 1,390, % Professional Technical Services 3,806, % 3,780, % 3,398, % Property Services 536, % 415, % 521, % Other Services 644, % 626, % 474, % Supplies 431, % 448, % 331, % Depreciation 822, % 541, % 429, % Total $ 13,323, % $ 12,625, % $ 11,936, % 33

40 EAHCP In 2013, the EAA began full implementation of the Edwards Aquifer Habitat Conservation Plan (EAHCP). Several programs are functional parts of the EAHCP implementation, including Program Administration, Springflow Protection, San Marcos Springs, Comal Springs, Modeling & Research, and NFHTC Refugia. With the exception of program administration expenses, the vast majority of EAHCP expenditures are associated with contractual obligations and are categorized as Professional Technical Services. Salaries and Wages increased $41,088, or 13.2%, in 2014 related to employee merit increases and increased $133,922, or 75.5%, in 2013 compared to The program became fully staffed in 2013 for the entire year through Employee Benefits increased $20,604, or 25.28%, in 2014 and $50,442 or 162.4% These increases are directly attributable to a full year of salaried employees, increased wages and the associated FICA matching, retirement contributions, as well as increased medical insurance premiums. 34

41 Professional and Technical Services increased $2,830,802, or 56.6%, in 2014 related to increases and participation in various programmatic areas of the EAHCP, and increased of $4,923,255 or 6,097.8% in As previously noted, the EAHCP began the first year of full implementation in 2013 with new programmatic initiatives and expenses coming online in 2013 that did not exist prior. The following table depicts 2014 and 2013 expenditures for each of the programmatic areas. EAHCP Percent of Percent of Professional/Technical Services FY2014 Total FY2013 Total Program Administration $ 483, % $ 57, % Springflow Protection 2,670, % 664, % San Marcos Springs 2,371, % 2,003, % Comal Springs 1,251, % 1,947, % Modeling & Research 1,057, % 331, % Total $ 7,834, % $ 5,003, % The following information, also depicted in table and graphic form, summarizes EAHCP operating expenses for the fiscal years-ended December 31, 2014, 2013, and EAHCP Percent of Percent of Percent of Operating Expenses FY2014 Total FY2013 Total FY2012 Total Salaries & Wages $ 352, % $ 311, % $ 177, % Employee Benefits 102, % 81, % 31, % Professional Technical Services 7,834, % 5,003, % 80, % Property Services % 1, % 6, % Other Services 19, % 13, % 9, % Supplies 3, % - 0.0% - 0.0% Depreciation - 0.0% - 0.0% - 0.0% Total $ 8,312, % $ 5,411, % $ 305, % 35

42 NON-OPERATING REVENUES AND EXPENSES Non-operating revenues and expenses are comprised of grant revenue, investment income, gain/(loss) on sale of capital assets, and other miscellaneous revenues and expenses. Investment income increased $16,152, or 17.2% in 2014, $23,252, or 32.9%, in 2013, and $16,012, or 29.2%, in These increases year over year are primarily related to the higher EAHCP cash balances carried in the Negotiable Order of Withdrawal (NOW) accounts. The NOW accounts provided greater returns than the traditional money market account with the EAA depository institution. The lesser increase in 2014 was indicative of market downturns in the interest rate paid on these accounts. Gain/Loss on Sale of Capital Assets amounted to $4,834 gain in 2014, loss of $555 in 2013 and loss of $29,962 in This category includes disposal of obsolete equipment such as vehicles, computers, furniture, and water flow meters. CAPITAL ASSETS EAA investment in capital assets, net of accumulated depreciation, is $14,717,538 at December 31, Increases of $336,455 in 2014 and $870,642 in 2013 primarily related to software development projects, completion of the renovated portion of the office building consolidation project, purchase of water sampling and monitoring equipment, vehicles, and water flow meters. The 2012 increase of $6,959,921 related primarily to the building consolidation project which concluded in January

43 Years Ended December 31, 2014 December 31, 2013 December 31, 2012 Land $ 2,210,901 $ 1,710,901 $ 1,710,901 Buildings and improvements 10,302,454 10,295,917 9,197,402 Furniture and equipment 4,600,855 4,440,216 4,392,186 Vehicles 526, , ,942 Work in progress 304, , ,565 Development in progress 1,076, , ,183 Construction in progress 694,185 Total capital assets 19,021,766 17,907,843 16,938,364 Less accumulated depreciation (4,304,228) (3,526,760) (3,427,923) Total capital assets, net of accumulated depreciation $ 14,717,538 $ 14,381,083 $ 13,510,441 In accordance with GASB Statement No. 34, the EAA does not record the cost of capital assets as an expense at the time of acquisition of the asset, but rather shows the expense systematically over the expected life of the asset as depreciation expense. The amount shown in the accounting records for the value of the asset will decrease each year until the asset is fully depreciated or removed from service. As a result, the amount of capital assets reflected in the Statement of Net Position may decrease from one year to another even though new assets have been acquired during the year. Capital assets subject to depreciation include buildings, equipment, furniture, and vehicles. Land is not depreciated. Additional information concerning the EAA capital assets can be found in Note 1 Summary of Significant Accounting Policies. ECONOMIC FACTORS AFFECTING THE FUTURE The EAA plays a critical role in managing and protecting the Edwards Aquifer, which contributes to the continued economic viability of the entire region. As the primary source of water for all uses, the sustainability of the Edwards Aquifer is vital to continued economic growth. CONTACTING THE EAA FINANCIAL MANAGEMENT TEAM This financial report is designed to provide EAA citizens, customers, and creditors with a general overview of finances and to demonstrate accountability for the receipts it collects and the expenses it makes for the services provided. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Felix Marquez, Executive Director Financial & Administrative Services at (210) or via electronic mail to fmarquez@edwardsaquifer.org. Information is also available on the EAA website at 37

44 BASIC FINANCIAL STATEMENTS 38

45 EDWARDS AQUIFER AUTHORITY STATEMENTS OF NET POSITION YEARS ENDED DECEMBER 31, 2014 AND ASSETS CURRENT ASSETS Cash and cash equivalents $ 8,490,210 $ 14,706,283 Restricted assets Cash and cash equivalents - Habitat Conservation Plan 34,780,742 24,026,946 Program fees receivable - Habitat Conservation Plan 260, ,657 Aquifer management fees receivable (net of allowance for uncollectible accounts of $15,234 as of as of December 31, 2014 and 2013) 367, ,382 Property taxes receivable (net of allowance for uncollectible accounts of $23,340 as of December 31, 2014 and 2013) 17,285 17,973 Miscellaneous receivable 8,553 10,083 Prepaid items - 1,019 Total current assets 43,925,243 39,180,343 PROPERTY AND EQUIPMENT Land 2,210,901 1,710,901 Buildings and improvements 10,302,454 10,295,917 Furniture and equipment 4,600,855 4,440,216 Vehicles 526, ,638 Work in progress 304, ,406 Development in progress 1,076, ,765 Total property and equipment 19,021,766 17,907,843 Less accumulated depreciation 4,304,228 3,526,760 Total property and equipment (net) 14,717,538 14,381,083 TOTAL ASSETS $ 58,642,781 $ 53,561,426 LIABILITIES CURRENT LIABILITIES Accounts payable $ 2,391,342 $ 3,045,704 Other accrued liabilities 42,967 38,539 Interest payable on outstanding note 41,422 42,237 Accrued wages and payroll liabilities 205, ,863 Due to non-agricultural permittees 786,461 7,244,944 Compensated absences 812, ,046 Note payable, current 70,000 65,000 Total current liabilities 4,349,532 11,521,333 NONCURRENT LIABILITIES Note Payable, due in more than one year 3,235,000 3,305,000 Total noncurrent liabilities 3,235,000 3,305,000 TOTAL LIABILITIES 7,584,532 14,826,333 NET POSITION Net investment in capital assets 11,412,538 11,011,083 Restricted for Habitat Conservation Plan Program 35,041,221 24,160,603 Unrestricted 4,604,490 3,563,407 TOTAL NET POSITION $ 51,058,249 $ 38,735,093 The Notes to Basic Financial Statements are an integral part of these statements. 39

46 EDWARDS AQUIFER AUTHORITY STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION YEARS ENDED DECEMBER 31, 2014 AND OPERATING REVENUES Aquifer management fees, net of rebates $ 14,714,463 $ 12,463,039 Program fees - Habitat Conservation Plan 19,048,516 15,223,383 Enforcement settlements 43,215 57,666 Other charges 33,955 26,879 Total operating revenues 33,840,149 27,770,967 OPERATING EXPENSES Salaries and wages 5,867,391 5,696,658 Employee benefits 1,670,113 1,508,806 Professional and technical services 11,641,398 8,784,829 Property services 537, ,052 Other services 663, ,926 Supplies 434, ,790 Depreciation 822, ,125 Total operating expenses 21,636,385 18,037,186 Operating income 12,203,764 9,733,781 NON-OPERATING REVENUES (EXPENSES) Interest income 110,180 94,028 Miscellaneous 4,378 4,426 Gain (Loss) on sale of capital assets 4,834 (555) Total non-operating revenues (expenses) 119,392 97,899 Change in net assets 12,323,156 9,831,680 NET POSITION, beginning of year 38,735,093 28,903,413 NET POSITION, end of year $ 51,058,249 $ 38,735,093 The Notes to Basic Financial Statements are an integral part of these statements. 40

47 EDWARDS AQUIFER AUTHORITY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2014 AND CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 27,173,470 $ 28,515,961 Payments to suppliers (13,926,396) (9,145,666) Payments to employees (7,605,073) (7,121,199) Miscellaneous 4,378 4,426 Net cash provided by operating activities 5,646,379 12,253,522 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Payments on long-term note payable (65,000) - Purchases of capital assets (1,158,611) (1,449,303) Proceeds from sale of capital assets 4,775 36,981 Net cash used in capital and related financing activities (1,218,836) (1,412,322) CASH FLOWS FROM INVESTING ACTIVITIES Interest received 110,180 94,028 Net cash provided by investing activities 110,180 94,028 Net increase in cash and cash equivalents 4,537,723 10,935,228 CASH AND CASH EQUIVALENTS, beginning of year 38,733,229 27,798,001 CASH AND CASH EQUIVALENTS, end of year $ 43,270,952 $ 38,733,229 The Notes to Basic Financial Statements are an integral part of these statements. 41

48 EDWARDS AQUIFER AUTHORITY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2014 AND 2013 (CONTINUED) RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income $ 12,203,764 $ 9,733,781 Adjustments to reconcile operating income to net cash provided by operating activities Depreciation expense 822, ,125 Change in operating assets and liabilities Aquifer management fees receivable, net (83,592) (72,146) Property taxes receivables, net Program fees receivables - Habitat Conservation Plan (126,822) 26,665 Miscellaneous receivables 1, Prepaid items 1,019 51,117 Accounts payable (654,362) 1,720,121 Interest payable (815) - Other accrued liabilities 4,428 38,539 Accrued wages and payroll liabilities 47,429 28,091 Due to non-agricultural permittees (6,458,483) 789,421 Compensated absences (114,998) 56,174 Retainage payable - (664,846) Miscellaneous 4,378 4,426 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 5,646,379 $ 12,253,522 The Notes to Basic Financial Statements are an integral part of these statements. 42

49 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The Edwards Aquifer Authority (EAA) was created in 1993 by the Edwards Aquifer Authority Act (Act) of the 73 rd Legislature of the State of Texas to manage and protect the Edwards Aquifer. The EAA covers all of Uvalde, Medina, and Bexar counties and portions of Atascosa, Comal, Guadalupe, Caldwell, and Hays counties. The EAA is governed by a seventeen member Board of Directors (Board). Fifteen voting members are elected from single member election districts, and two nonvoting members are appointed. One nonvoting director is appointed by the Advisory Committee from the members of the Committee, and the second is appointed by the commissioners court of Medina or Uvalde County. The Board has EAA adopt and enforce reasonable rules and orders to manage and protect the Edwards Aquifer. Therefore, the EAA is a financial reporting entity as defined by the Governmental Accounting Standards Board (GASB) in its Statement No. 14, The Financial Reporting Entity, and is not included in any other governmental reporting entity. The Act also created the South Central Texas Water Advisory Committee (SCTWAC), which advises the EAA Board on downstream water rights and issues. Appointed SCTWAC members, like EAA directors are not entitled to compensation by the EAA but are entitled to reimbursement for actual and necessary expenses incurred to perform their duties. Measurement Focus, Basis of Accounting, and Financial Statement Presentation All activities of the EAA are accounted for as a business-type activity within a single proprietary fund. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the EAA are management fees charged to users of the aquifer. The EAA also recognizes other fees such as transfer application, well construction, and registration fees as operating revenue. Operating expenses include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non operating revenues and expenses. 43

50 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED In 2012, EAA established the Edwards Aquifer Habitat Conservation Plan Program (EAHCP) for the purpose of lawfully removing potentially endangered species and relocating them to an equally habitable environment in order to continue performing the task of regulating and pumping groundwater from the Edwards Aquifer. EAA bills program fees to non-agriculture users of the aquifer to build a reserve for future program expenses. These fees will be recognized as operating revenue in the period billed and collected program fees will be restricted for use towards program expenses. The financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under this method revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. All resources received by the EAA are considered to be unrestricted, with the exception of amounts related to outstanding debt, which are intended to be used towards the construction of the administrative building and EAHCP Program fees, which are intended to be used towards program expenses. The EAA applies private-sector standards of accounting and financial reporting issued prior to November 30, 1989, to the extent that those standards do not conflict with or contradict guidance from the Governmental Accounting Standards Board (GASB). Within the EAA proprietary fund, separate self-balancing funds are maintained to account for resources for various purposes. Interfund receivable and payable accounts have been eliminated from the basic financial statements. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ( GAAP ) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Included in the accompanying financial statements are estimates of aquifer management fee rebates payable, based upon past history of the EAA. It is reasonably possible that the actual rebate payments may differ from those accrued in the statements of net position and the differences may be material to the financial statements. Changes in estimates are recorded prospectively. Effective January 1, 2014, the rebate program has been discontinued and as such, no rebates have been applied against aquifer management fees as of December 31,

51 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Cash and Cash Equivalents Cash and cash equivalents include unrestricted and restricted cash on hand, demand deposits, money market funds, and certificates of deposit. Restricted Cash and Cash Equivalents Restricted cash and cash equivalents include money market funds and certificates of deposit restricted for use on specific program expenses. The EAA has restricted cash and equivalents for use on the Habitat Conservation Plan Program. Investments The EAA investment policy and Texas state law allow the EAA to invest in obligations of the United States or its agencies and instrumentalities. Other allowable investments include direct obligations of the State of Texas or its agencies or instrumentalities, secured certificates of deposit issued by state or national banks domiciled in Texas, commercial paper, reverse repurchase agreements, no-load money market or mutual funds, and other types of secured or guaranteed investments. The EAA had no investments as of December 31, 2014 and Aquifer Management Fees Receivable Aquifer management fees receivable consists of fees due from agriculture and nonagriculture users of the aquifer. The related allowance for uncollectible accounts is evaluated by management on a periodic basis. As of December 31, 2014 and 2013, the allowance for doubtful accounts related to aquifer management fees receivable is $15,234. Program Fees Receivable Habitat Conservation Plan Program fees receivable consists of fees due from non-agriculture users of the aquifer for the purpose of funding the Edwards Aquifer Habitat Conservation Plan (EAHCP) Program and related program expenses. There is no related allowance for uncollectible accounts, as management believes all accounts to be fully collectible at this time. 45

52 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Property Taxes Receivable Effective July 28, 1996, legislation abolished any taxing power of the EAA. However, the EAA does collect delinquent taxes owed to the EAA predecessor agency, the Edwards Underground Water District. Delinquent taxes receivable have been reported in the financial statements net of the allowance for uncollectible taxes. As of December 31, 2014 and 2013, the allowance for doubtful accounts related to property taxes receivable is $23,340. Capital Assets Capital assets having a unit cost equal to or greater than $1,000 are recorded at cost, if purchased or constructed, or, if donated, at fair value at the date of donation. Normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized, but are charged as an operating expense as incurred. Major improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. When assets are retired or otherwise disposed, the related costs are removed. Buildings, improvements, furniture and equipment, and vehicles of the EAA are depreciated using the straight-line method over the following estimated useful lives: Asset Class Estimated Useful Lives Buildings and improvements years Furniture and equipment 5-20 years Vehicles 8-10 years 46

53 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Compensated Absences It is the EAA policy to permit employees to accumulate earned but unused personal and sick leave benefits. Personal leave is accrued when incurred and reported as a liability. Employees may accumulate from 10 to 15 hours a month of personal leave depending on their length of employment, and up to 320 hours of unused personal leave may be carried over from one year to the next. Upon termination, employees are paid for unused personal leave. As of December 31, 2014 and 2013, accrued personal leave payable is $475,881 and $485,185, respectively. Accumulated sick leave is payable upon termination when certain conditions are met. Based on the employees who had satisfied these conditions as of December 31, 2014 and 2013, the accrued sick leave payable is $336,167 and $441,861, respectively. It is the EAA s experience that the majority of the outstanding amount of accrued personal and sick leave is used by its employees within the year after accrual; therefore, the entire balance is classified as a current liability. For financial statement purposes, both accrued personal leave and accrued sick leave are reported as compensated absences. Annual Budget The original budget is adopted by the Board in November of each fiscal year, and any amendments made during the year are approved by the Board. Net Position Net position represents the difference between assets and liabilities. Net position invested in capital assets, net of related debt, consist 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 position is reported as restricted when there are limitations imposed on their use either through the enabling legislations adopted by the EAA or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. Rebates The EAA accrues rebates to non-agricultural permittees based on the difference between authorized water usage and actual water usage. Rebates are forfeitable if the non-agricultural permittees do not fully comply with certain compliance requirements related to the program. Forfeited rebates are recorded as an adjustment to revenue in the period when the forfeitable amount is determined. Effective January 1, 2014, rebates will no longer be accrued. Rebates are not applicable to the EAHCP program aquifer management fee. 47

54 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS Cash and cash equivalents are classified in the accompanying basic financial statements as follows: December 31, Petty cash $ 693 $ 837 Money market and checking accounts 41,653,759 37,115,892 Certificates of deposits 1,616,500 1,616,500 Total cash and cash equivalents $ 43,270,952 $ 38,733,229 Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising interest rates, the EAA investment policy limits the maturities of investments to one year or less from the date of purchase. Custodial Credit Risk Deposits. In the case of deposits, this is the risk that, in the event of the failure of a depository financial institution, the EAA 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 EAA investment policy states that certificates of deposit are to be guaranteed, insured by the FDIC, or secured in any other manner and amount provided by law. As of December 31, 2014, all EAA Deposits were covered by the FDIC and pledged securities held in joint custody by the financial institution on behalf of the EAA. At December 31, 2014, the carrying amount of the EAA cash on hand and deposits were $41,654,452, and the bank balance was $41,775,826. Of the bank balance, $500,000 was covered by the Federal Depository Insurance Corporation ($250,000 through BBVA Compass and $250,000 through Southside Bank), while the remaining balances of $41,275,826 were secured with a letter of credit and securities from BBVA Compass (FRB Atlanta) in the amount of $34 million, and another $11.7 million in securities held by Southside Bank in the name of EAA. 48

55 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3. LONG-TERM DEBT In 2011, the EAA issued General Improvement Revenue Note, Series The issuance was for $3,370,000 for the purpose of providing funds to renovate, expand, and equip the EAA's administrative headquarters. The note has an outstanding balance of $3,305,000, is due in varying installments through September 1, 2031, and bears an interest rate of 3.76% with interest paid semi-annually. The principal and interest on this note is payable as defined: Year Ending December 31, Principal Interest Total 2015 $ 70,000 $ 125,444 $ 195, , , , , , , , , , ,005, ,420 3,942,420 Totals $ 3,305,000 $ 1,423,023 $ 4,728,023 A summary of long-term debt transaction, including current portion, for the year ended December 31, 2014 is as follows: December 31, 2013 Additions Deletions December 31, 2014 Due Within One Year General Improvement Revenue Note, Series 2011 $ 3,370,000 $ - $ (65,000) $ 3,305,000 $ 70,000 49

56 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. CAPITAL ASSETS Capital asset activity for the year ended December 31, 2014, was as follows: Balance January 1, 2014 Additions Retirements Balance December 31, 2014 Capital assets, not being depreciated Land $ 1,710,901 $ 500,000 $ - $ 2,210,901 Total capital assets, not being depreciated 1,710, ,000-2,210,901 Capital assets, being depreciated Buildings and improvements 10,295,917 6,537-10,302,454 Furniture and equipment 4,440, ,385 (15,746) 4,600,855 Vehicles 554,638 1,034 (29,001) 526,671 Total capital assets being depreciated 15,290, ,956 (44,747) 15,429,980 Accumulated depreciation Buildings and improvements (894,072) (358,137) - (1,252,209) Furniture and equipment (2,333,948) (414,622) 15,745 (2,732,825) Vehicles (298,740) (49,456) 29,002 (319,194) Total accumulated depreciation (3,526,760) (822,215) 44,747 (4,304,228) Total capital assets being depreciated, net 11,764,011 (638,259) - 11,125,752 Construction in progress 906, ,714-1,380,885 Capital assets, net $ 14,381,083 $ 336,455 $ - $ 14,717,538 50

57 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. CAPITAL ASSETS CONTINUED Capital asset activity for the year ended December 31, 2013, was as follows: Balance January 1, 2013 Additions Retirements Balance December 31, 2013 Capital assets, not being depreciated Land $ 1,710,901 $ - $ - $ 1,710,901 Total capital assets, not being depreciated 1,710, ,710,901 Capital assets, being depreciated Buildings and improvements 9,197,402 1,098,515-10,295,917 Furniture and equipment 4,392, ,353 (427,323) 4,440,216 Vehicles 540,942 65,908 (52,212) 554,638 Total capital assets being depreciated 14,130,530 1,639,776 (479,535) 15,290,771 Accumulated depreciation Buildings and improvements (839,634) (54,438) - (894,072) Furniture and equipment (2,314,930) (431,203) 412,185 (2,333,948) Vehicles (273,359) (55,484) 30,103 (298,740) Total accumulated depreciation (3,427,923) (541,125) 442,288 (3,526,760) Total capital assets being depreciated, net 10,702,607 1,098,651 (37,247) 11,764,011 Construction in progress 1,096, ,400 (700,162) 906,171 Capital assets, net $ 13,510,441 $ 1,608,051 $ (737,409) $ 14,381,083 Depreciation expense totaled $822,215 for the year ended December 31, 2014, and $541,125 for the year ended December 31, Interest expense totaled $125,897 for the year ended December 31, 2014, and $126,712 for the year ended December 31,

58 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 5. ACCOUNTS PAYABLE The accounts payable balance is comprised of the following: December 31, Health Care Reimbursement Accounts (HRA) - current $ 215,480 $ 203,072 Travel reimbursements 3, Trade payables 2,172,674 2,842,149 Total accounts payable $ 2,391,342 $ 3,045,704 NOTE 6. OPERATING LEASE The EAA previously leased 9,000 square feet of office facilities and furniture under an operating lease from the San Antonio River Authority (SARA). The original term of the lease was for 60 months, which commenced June 1, 2006, but was extended through January 31, 2013, with a monthly base rent of $11,570, and an additional $350 for secured (gated) parking spaces. The EAA terminated the lease on January 31, Total cost of the lease was $11,920 for the year ended December 31, There were no operating lease agreements in effect during NOTE 7. RETIREMENT PLANS Texas County and District Retirement System Plan Description The EAA provides retirement, disability, and death benefits for all of its full-time employees through a nontraditional defined benefit pension plan in the statewide Texas County and District Retirement System (TCDRS). The Board of Trustees of TCDRS is responsible for the administration of the statewide agent multipleemployer public employee retirement system consisting of 559 nontraditional defined benefit pension plans. TCDRS, in the aggregate, issues a comprehensive annual financial report (CAFR) on a calendar basis. The CAFR is available upon written request from the TCDRS Board of Trustees at P.O. Box 2034, Austin, Texas

59 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7. RETIREMENT PLANS CONTINUED Texas County and District Retirement System Continued Plan Description Continued The plan provisions are adopted by the EAA Board of Directors, within the options available in the Texas state statutes governing TCDRS (TCDRS Act). Members can retire at ages 60 and above with 8 or more years of service, with 20 years of service regardless of age, or when the sum of their age and years of service equals 75 or more. Members are vested after 8 years of service, but must leave their accumulated contributions in the plan to receive any employer-financed benefit. Members who withdraw their personal contributions in a lump sum are not entitled to any amounts contributed by their employer. Benefit amounts are determined by the sum of the employee s contributions to the plan, with interest, and employee-financed monetary credits. The level of these monetary credits is adopted by the governing body of the employer within the actuarial constraints imposed by the TCDRS Act, so that the resulting benefits can be expected to be adequately financed by the employer s commitment to contribute. At retirement, death, or disability, the benefit is calculated by converting the sum of the employee s accumulated contributions and the employer-financed monetary credits to a monthly annuity using annuity purchase rates prescribed by the TCDRS Act. Funding Policy The EAA has elected the annually determined contribution rate plan provisions of the TCDRS Act. The plan is funded by monthly contributions from both employee members and the employer based on the covered payroll of employee members. Under the TCDRS Act, the annual employer contribution rate of 5.93% for calendar year 2014 was actuarially determined. The contribution rate payable by the employee members is 4.0% as adopted by the EAA Board of Directors. The employee and employer contribution rates may be changed by the EAA Board of Directors within the options available in the TCDRS Act. Annual Pension Cost For the fiscal years ended December 31, 2014, and 2013, the actual contributions made by the employees were $234,099 and $226,438, respectively, and those made by the EAA were $347,051 and $334,563, respectively. The annual required contributions were actuarially determined as a percent of the covered payroll of the participating employees, and were in compliance with GASB Statements No. 27, and 50 parameters based on the actuarial valuation as of December 31, 2006, the basis for determining the contribution rate for calendar year The December 31, 2013 actuarial valuation is the most recent valuation date. 53

60 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7. RETIREMENT PLANS CONTINUED Texas County and District Retirement System Continued Annual Pension Cost Continued December 31, December 31, Actuarial valuation date December 31, 2011 Actuarial cost method Entry age Entry age Entry age Amortization method Level percentage of payroll, closed Level percentage of payroll, closed Level percentage of payroll, closed Amortization period of years Asset valuation method SAF: 5 year smoothed value ESF: fund value SAF: 10 year smoothed value ESF: fund value SAF: 10 year smoothed value ESF: fund value Actuarial assumption Investment return* Projected salary increases Inflation Cost of Living adjustments * Includes inflation at the stated rate 8% 8% 4.9% 5.4% 3.5% 3.5% 0% 0% 8% 5.4% 3.5% 0% Fiscal Year Ended December 31, Annual Required Contribution (ARC) Annual Pension Cost (APC) 2014 $ 347,051 $ 347, , , , ,339 Annual contributions equal annual pension cost, thus the plan was considered fully funded at December 31, 2014, and December 31,

61 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7. RETIREMENT PLANS CONTINUED Texas County and District Retirement System Continued Annual Pension Cost Continued The funded status as of December 31, 2013, the most recent valuation date, is as follows: Actuarial Valuation Date December 31, 2013 Actuarial Value of Assets $ 8,881,944 Actuarial Accrued Liability (AAL) 9,909,486 Unfunded (Overfunded) Actuarial Accrued Liability (UAAL) (OAAL) 1,027,542 Funded Ratio 89.63% Annual Covered Period 5,660,961 UAAL or (OAAL) as Percentage of Covered Payroll 18.15% Required Three-Year Trend Information The Schedule of Funding Progress for the last three fiscal years as required under GASB Statements No. 27 and 50 is located in the Required Supplementary Information section of this report. The schedule is designed to provide information about the EAA progress in accumulating sufficient assets to pay benefits due. Edwards Aquifer Authority Retirement Plan Effective January 1, 2000, the EAA established a defined contribution retirement plan, known as the Edwards Aquifer Authority Retirement Plan (the Plan), to provide benefits at retirement to all fulltime employees. The International City Management Association (ICMA) Retirement Corporation is the administrator of the Plan. Employees are eligible to participate upon employment. Effective January 1, 2006, all fulltime employees were required to contribute 3.00% of covered salary. For the calendar year 2014 and 2013, the EAA was required to contribute 1.07% and 1.09%, respectively, for fulltime employees enrolled in the Plan. Plan provisions and contribution requirements are established annually and may be amended by the EAA Board of Directors. For the years ended December 31, 2014 and 2013, actual contributions made by the employees were $173,386 and $168,296, respectively, and those made by the EAA were $61,840 and $61,147, respectively. 55

62 EDWARDS AQUIFER AUTHORITY NOTES TO BASIC FINANCIAL STATEMENTS NOTE 8. RISK MANAGEMENT The EAA is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, and natural disasters for which the EAA carries commercial insurance. There have been no significant reductions in insurance coverage for these risks of loss since the prior year. The EAA contracts with the Texas Municipal League (TML) to provide workers compensation insurance. This multiple-employer account provides for a combination of modified self-insurance and stop-loss coverage. Contributions are set annually by TML. Liability by the EAA is generally limited to the contributed amounts. NOTE 9. MAJOR CUSTOMER Approximately $24,092,855 and $19,137,851 of the EAA aquifer management fee and HCP program fee revenue for fiscal years ended December 31, 2014 and 2013, respectively, was received from the San Antonio Water System. This revenue accounts for approximately 71% and 69% of the total EAA operating revenues for the years ended December 31, 2014 and 2013, respectively. NOTE 10. RELATED PARTY TRANSACTIONS The EAA is responsible for reimbursing the SCTWAC members for actual and necessary expenses incurred while performing their duties on behalf of the EAA. Accordingly, the EAA reimbursed SCTWAC $174 and $102 for the years ended December 31, 2014 and 2013, respectively. NOTE 11. LITIGATION AND CONTINGENCIES The EAA is involved in numerous legal proceedings arising from its enforcement of aquifer administrative jurisdiction issues. During 2013, one case was settled resulting in EAA paying $950,000 in settlement, which had been previously accrued for as of December 31, As of December 31, 2014, none of the current proceedings have been determined to result in probable loss to the EAA. Accordingly, no related loss contingencies have been recorded in the accompanying financial statements. 56

63 REQUIRED SUPPLEMENTARY INFORMATION 57

64 EDWARDS AQUIFER AUTHORITY PENSION AND RETIREMENT PLAN SCHEDULE OF FUNDING PROGRESS LAST THREE FISCAL YEARS Historical trend information about the Texas County and District Retirement System (TCDRS), a nontraditional defined benefit pension plan, is presented as supplementary information. It is intended to help users assess the plan s funding status on an on-going basis, assess progress made in accumulating assets to pay benefits when due, and make comparisons with other comparable retirement systems. Actuarial Valuation Date December 31, 2013 December 31, 2012 December 31, 2011 Actuarial Value of Assets $ 8,881,944 $ 8,001,683 $ 7,557,628 Actuarial Accrued Liability (AAL) 9,909,486 8,991,724 8,525,180 Unfunded (Overfunded) Actuarial Accrued Liability (UAAL) (OAAL) 1,027, , ,552 Funded Ratio 89.63% 88.99% 88.65% Annual Covered Period 5,660,961 5,425,513 5,176,445 UAAL or (OAAL) as Percentage of Covered Payroll 18.15% 18.25% 18.69% 58

65 SUPPLEMENTARY INFORMATION 59

66 EDWARDS AQUIFER AUTHORITY SCHEDULE OF EXPENSES BUDGET AND ACTUAL (GENERAL OPERATIONS) YEAR ENDED DECEMBER 31, 2014 Budgeted Amounts Actual Amounts Variance with Original Final GAAP Basis Final Budget Salaries and Wages Salaries and wages $ 5,846,404 $ 5,846,404 $ 5,569,332 $ 277,072 Overtime 13,200 13,200 16,247 (3,047) Compensated absences - - (70,535) 70,535 5,859,604 5,859,604 5,515, ,560 Employee Benefits Allowances 22,300 22,300 25,277 (2,977) Insurance 477, , ,376 7,826 Medical reimbursement 254, , ,483 6,862 Retirement contributions 409, , ,229 23,020 Taxes 471, , ,931 52,619 Tuition 15,000 20,710 20, ,649,646 1,655,356 1,568,005 87,351 Professional and Technical Services Contractual professional services 3,426,530 3,523,466 2,697, ,723 Legal services 1,000,000 1,143,573 1,091,487 52,086 Legal services - settlements - Pre-employment services 2,200 8,135 7, Records services 6,000 6,000 3,090 2,910 Temporary services 5,000 7,055 7, ,439,730 4,688,229 3,806, ,626 Property Services Equipment maintenance 183, , ,992 18,376 Equipment rental 54,338 38,013 31,272 6,741 Event sponsorships 69,750 72,250 53,116 19,134 Facility maintenance 191, , ,485 19,515 Facilities rental 40,000 36,000 25,984 10,016 Non-capital furniture and equipment 102, ,315 72,587 37,728 Pest control 2,000 2,000 1, Security and fire 16,800 6,800 2,962 3,838 Vehicle maintenance 16,000 17,000 15,571 1,429 Waste disposal 2,800 2,800 2, Water and sewage 6,000 8,000 6,445 1, , , , ,162 60

67 EDWARDS AQUIFER AUTHORITY SCHEDULE OF EXPENSES BUDGET AND ACTUAL (GENERAL OPERATIONS) CONTINUED YEAR ENDED DECEMBER 31, 2014 Other Services Conferences, seminars and training 50,000 50,362 31,064 19,298 Conservation grants 200, ,000 65, ,100 Fees, licenses and permits 715 1,115 1,112 3 Interest expense - debt 125, , ,897 1 Meeting expenses 132, , ,921 20,867 Printing 83,750 81,250 62,089 19,161 Property and casualty 85,098 85,098 83,659 1,439 Public and legal notices 184, ,960 77, ,565 Telecommunication services 95,500 95,500 81,809 13,691 Travel and lodging 8,500 8,500 2,278 6, , , , ,347 Supplies Clothing 10,000 18,400 16,945 1,455 Computer supplies 50,000 50,000 48,530 1,470 Electrical services 82,000 77,000 71,252 5,748 Field supplies 86,300 86,300 70,690 15,610 Fuel 65,000 65,000 39,647 25,353 Kitchen and janitorial 40,000 40,000 23,245 16,755 Memberships 25,100 25,150 19,658 5,492 Office supplies 60,000 57,050 36,046 21,004 Postage 40,000 43,007 23,159 19,848 Promotional supplies 70,000 72,500 69,523 2,977 Subscriptions and publications 21,460 21,403 12,468 8, , , , ,647 Depreciation ,215 (822,215) Total Expenditures 14,149,227 14,377,016 13,323,538 1,053,478 Capital Expenditures * 707,500 1,255,711 1,158,670 97,041 Total Expenditures & Capital Expenditures $ 14,856,727 $ 15,632,727 $ 14,482,208 $ 1,150,519 * Capital Expenditures are reflected on the Statements of Net Position basic financial statement. Budget Amendments: EAA - Budget amendment 09/09/14 $ 116,000 EAA - Budget amendment 10/14/14 25,000 EAA - Budget amendment 10/14/14 500,000 EAA - Budget amendment 12/14/14 135,000 $ 776,000 61

68 EDWARDS AQUIFER AUTHORITY SCHEDULE OF EXPENSES BUDGET AND ACTUAL (HABITAT CONSERVATION PLAN) YEAR ENDED DECEMBER 31, 2014 Budgeted Amounts Actual Amounts Variance with Original Final GAAP Basis Final Budget Program Administration Salaries and wages Salaries & Wages $ 390,630 $ 390,630 $ 346,348 $ 44,282 Overtime (286) Compensated Absences - 5,713 (5,713) 390, , ,347 38,283 Employee Benefits Allowances 1,500 1,500 1, Insurance 29,015 35,015 32,907 2,108 Medical reimbursement 14,992 16,992 16, Retirement Contributions 27,344 21,344 24,026 (2,682) Taxes 31,233 29,233 26,759 2, , , ,108 1,976 Professional Technical Services Contractual Professional Services 657, , , , , , , ,177 Property Services Non-Capital Furniture & Equipment - 1, , Other Services Conferences, seminars and training Event Sponsorships 3, Meeting Expenses 15,000 15,000 13,457 1,543 Other Services - Printing 2,000 4,000 3, Travel and lodging 4,000 3,500 2, ,000 23,000 19,834 3,166 Supplies - Memberships 2,000 1, Office Supplies 2,000 2,500 2, ,000 4,000 3, Total - Program Administration 1,180,000 1,180, , ,339 Springflow Protection - Professional Technical Services - SAWS ASR Leasing 4,759,000 4,759, ,663 3,914,337 SAWS ASR O&M 2,194,000 2,194, ,147 2,044,853 Regional Municipal Water Conservation 986, , , ,419 VISPO 4,172,000 4,172,000 1,201,938 2,970,062 12,111,500 12,111,500 2,670,829 9,440,671 62

69 EDWARDS AQUIFER AUTHORITY SCHEDULE OF EXPENSES BUDGET AND ACTUAL (HABITAT CONSERVATION PLAN) CONTINUED YEAR ENDED DECEMBER 31, 2014 San Marcos Springs Professional Technical Services Bank Stabilization/Perm Access 667, , ,635 6,815 Biological Monitoring 225, , ,775 32,225 Household Hazardous Waste Mgmt 30,000 30,000 27,176 2,824 LID/BMP Management 320, , ,135 9,865 Mgmt - Floating Veg/Litter 48,798 48,798 41,575 7,223 Mgmt - Key Rec Areas 56,000 56,000 55, Native Riparian Habitat Restoration 203, , ,000 - Non-Native Animal Spec Control 24,960 24,960 24,960 - Non-Native Plant Spec Control 176, , ,000 - Sediment Removal 180, , ,000 - Sessom Creek Sand Bar Removal 75,000 75,000 75,000 - TX Wild Rice Enhancement/Restoration 176, , , Water Quality Monitoring 237, , ,109 (10,894) 2,419,423 2,419,423 2,371,140 48,283 Comal Springs Professional Technical Services Aquatic Vegetation Restoration 220, , , ,003 Biological Monitoring 225, , , Decaying Vegetation Removal 15,000 15,000 15,000 - Flow Split Management 181, , ,882 24,368 Gill Parasite Control 175, , ,000 50,000 Household Hazardous Waste Program 30,000 30,000 28,552 1,448 LID/BMP Storm Water Mgmt 100, ,000 18,200 81,800 Litter Control/Floating Vegetation 40,000 40,000 30,172 9,828 Mgmt - Key Public Recrecation Areas 1,000 1,000-1,000 Non-Native Animal Spec Control 135, , ,451 2,549 Old Channel Restoration 175, , ,988 50,012 Prohibition - Hazardous Material Route 10,000 10,000-10,000 Restoration - Riparian Zones 430, ,000 50, ,938 Riparian Impr - Riffle Beetle 75,000 75,000 69,872 5,128 Water Quality Monitoring 237, , ,180 81,035 2,049,465 2,049,465 1,251, ,894 Modeling & Research Professional Technical Services Applied Environmental Research 854, , ,427 83,823 Ecological Modeling 175, , ,219 29,533 1,029,250 1,171,002 1,057, ,356 Refugia Professional Technical Services NFHTC Refugia 1,678,597 1,678,597-1,678,597 1,678,597 1,678,597-1,678,597 Total Expenditures $ 20,468,235 $ 20,609,987 $ 8,312,847 $ 12,297,140 Budget Amendments EAHCP - Budget amendment on 05/13/14 $ 141,752 63

70 EDWARDS AQUIFER AUTHORITY CONSOLIDATED COMPONENTS OF NET POSITION YEAR ENDED DECEMBER 31, 2014 General Habitat Total Operations Conservation Plan Combined ASSETS CURRENT ASSETS Cash and cash equivalents $ 8,490,210 $ 34,780,742 $ 43,270,952 Receivables, net 367, , ,453 Property taxes receivable, net 17,285-17,285 Miscellaneous receivable 8,553-8,553 Prepaid items Total current assets 8,884,022 35,041,221 43,925,243 PROPERTY AND EQUIPMENT Land 2,210,901-2,210,901 Buildings and improvements 10,302,454-10,302,454 Furniture and equipment 4,600,855-4,600,855 Vehicles 526, ,671 Work in progress 304, ,583 Development in progress 1,076,302-1,076,302 Total property and equipment 19,021,766-19,021,766 Less accumulated depreciation 4,304,228-4,304,228 Total property and equipment (net) 14,717,538-14,717,538 TOTAL ASSETS $ 23,601,560 $ 35,041,221 $ 58,642,781 CURRENT LIABILITIES LIABILITIES Accounts payable $ 2,391,342 $ - $ 2,391,342 Other accrued liabilities 42,967-42,967 Interest payable on outstanding note 41,422-41,422 Accrued wages and payroll liabilities 205, ,292 Due to non-agricultural permittees 786, ,461 Compensated absences 812, ,048 Note payable, current 70,000-70,000 Total current liabilities 4,349,532-4,349,532 NONCURRENT LIABILITIES Note Payable, due in more than one year 3,235,000-3,235,000 Total noncurrent liabilities 3,235,000-3,235,000 TOTAL LIABILITIES 7,584,532-7,584,532 NET POSITION Net investment in capital assets 11,412,538-11,412,538 Restricted for Habitat Conservation Plan Program - 35,041,221 35,041,221 Unrestricted 4,604,490-4,604,490 TOTAL NET POSITION $ 16,017,028 $ 35,041,221 $ 51,058,249 64

71 Statistical Section (Unaudited) 65

72 66

73 Table of Contents For Statistical Section Financial Trend These schedules provide the EAA's financial performance as reported in the Comprehensive Annual Report over the past ten years. Table 1 - Net Position by Component 68 Table 2 - Changes in Net Position 69 Revenue Capacity These schedules provide information regarding the EAA's major source of revenue. Table 3 - Aquifer Management Fee Rates.. 70 Table 4 - Principal Aquifer Management Fee Payers 71 Demographic and Economic Information These schedules provide demographic and economic information for the areas within the EAA's jurisdiction and the changes over the past ten years. Table 5 - Demographic Statistics 72 Table 6 - Principal Employers 73 Operating Information These schedules provide information on the EAA's employees and operations. Table 7 - Cash and Investment Balances 74 Table 8 - Number of Employees 75 Table 9 - Operating Indicators for Demand or Level of Service 76 Table 10 - Revenues by Source 77 Table 11 - Expenditures by Function 78 Miscellaneous This schedule provides information related to the EAA's creation, jurisdiction and the Edwards Aquifer. Table 12 - Miscellaneous Statistics 79 67

74 Table 1 Net Position by Component Last Ten Fiscal Years (Unaudited) ** 2010** Business Type Activities Net Investment in Capital Assets $ 11,412,538 $ 11,011,083 $ 10,140,441 $ 4,159,619 $ 4,653,296 $ 4,339,243 $ 3,921,229 $ 3,740,011 $ 3,974,440 $ 3,640,760 Restricted 35,041,221 24,160,603 14,373, , , ,140 Unrestricted 4,604,490 3,563,407 4,389,108 9,006,466 8,068,329 8,715,430 8,647,115 7,206,624 6,636,892 5,404,303 Total Net Position $ 51,058,249 $ 38,735,093 $ 28,903,413 $ 13,166,085 $ 12,721,625 $ 13,054,673 $ 12,568,344 $ 11,496,103 $ 11,133,464 $ 9,542,203 ** Restated for adjustments to compensated absences and capitalization of assets previously expensed. 68

75 Table 2 Changes in Net Position Last Ten Fiscal Years (Unaudited) ** 2010** OPERATING REVENUES Aquifer Management Fees, net of rebates $ 14,714,463 $ 12,463,039 $ 13,198,806 $ 11,433,660 $ 11,323,086 $ 11,133,877 $ 10,621,222 $ 9,649,130 $ 10,053,610 $ 11,755,457 Program fees - Habitat Conservation Plan 19,048,516 15,223,383 14,610, Compromise and settlements 43,215 57, ,615 25, , , ,210 86, , ,393 Other Charges 33,955 26,879 19,922 34,591 37,361 38, ,184 90,087 51,298 17,452 Total Operating Revenues $ 33,840,149 $ 27,770,967 $ 27,934,194 $ 11,493,462 $ 11,478,856 $ 11,334,428 $ 11,150,616 $ 9,825,542 $ 10,223,933 $ 12,087,302 OPERATING EXPENSES Salaries and wages $ 5,867,391 $ 5,696,658 $ 5,567,321 $ 5,304,078 $ 5,056,716 $ 4,677,171 $ 4,047,331 $ 3,701,467 $ 3,291,078 $ 3,000,539 Employee benefits 1,670,113 1,508,806 1,421,516 1,371,128 1,336,087 1,223,619 1,065, , , ,622 Professional and technical services 11,641,398 8,784,829 3,479,597 2,630,845 3,521,981 3,525,842 3,381,821 3,102,763 3,124,852 4,051,368 Property services 537, , , , , , , , , ,635 Other services 663, , , , , , , , , ,699 Supplies 434, , , , , , , , , ,383 Bad Debt ,499 9,875 Depreciation 822, , , , , , , , , ,849 Total Operating Expenses $ 21,636,385 $ 18,037,186 $ 12,241,468 $ 11,054,659 $ 11,569,335 $ 11,067,215 $ 10,182,137 $ 9,404,163 $ 8,964,861 $ 9,721,970 Operating income $ 12,203,764 $ 9,733,781 $ 15,692,726 $ 438,803 $ (90,479) $ 267,213 $ 968,479 $ 421,379 $ 1,259,072 $ 2,365,332 NONOPERATING REVENUES (EXPENSES) Grant Revenue $ - $ - $ - $ - $ 64,212 $ 116,965 $ 51,333 $ 7,736 $ - $ 33,344 Investment Income 110,180 94,028 70,776 54,764 48,210 64, , , , ,325 Interest Income ,674 27,106 31,537 Settlement (600,000) - - Miscellaneous 4,378 4,426 3,518 2,081 4,401 45,235 13,846 14,194 13,514 7,169 Interest Expense (3,047) (16,044) (30,587) Loss on Sale of Capital Assets 4,834 (555) (29,692) (51,188) (61,402) (7,251) (219,410) (16,205) (8,027) (9,840) Total Nonoperating Revenues $ 119,392 $ 97,899 $ 44,602 $ 5,657 $ 55,421 $ 219,116 $ 103,762 $ (58,742) $ 332,185 $ 153,948 Change in Net Position $ 12,323,156 $ 9,831,680 $ 15,737,328 $ 444,460 $ (35,058) $ 486,329 $ 1,072,241 $ 362,637 $ 1,591,257 $ 2,519,280 Total Net Position - Beginning Balance $ 38,735,093 $ 28,903,413 $ 13,166,085 $ 12,721,625 $ 13,054,673 $ 12,568,344 $ 11,496,103 $ 11,133,464 $ 9,542,203 $ 7,022,923 Prior Period Adjustment $ - $ - $ - $ 169,017 $ (297,990) Total Net Position - Ending Balance $ 51,058,249 $ 38,735,093 $ 28,903,413 $ 13,166,085 $ 12,721,625 $ 13,054,673 $ 12,568,344 $ 11,496,101 $ 11,133,460 $ 9,542,203 ** Restated for adjustments to compensated absences and capitalization of assets previously expensed. 69

76 Table 3 Aquifer Management Fee Rates Per Acre-Foot Last Ten Fiscal Years (Unaudited) Aquifer Management Fee Program Aquifer Management Fee 2 Fiscal Year Non- Agricultural Agricultural 1 Non-Agricultural 2014 $37.00 $2.00 $ $47.00 $2.00 $ $47.00 $2.00 $ $39.00 $2.00 n/a 2010 $39.00 $2.00 n/a 2009 $37.00 $2.00 n/a 2008 $37.00 $2.00 n/a 2007 $37.00 $2.00 n/a 2006 $37.00 $2.00 n/a 2005 $38.00 $2.00 n/a 1 The EAA Act limits agricultural fees to no more than $2 per acre-foot. 2 The program aquifer management fee was implemented in 2012 in support of the Edwards Aquifer Authority Habitat Conservation Plan. 70

77 Table 4 Principal Aquifer Management Fee Payers Current Year and Nine Years Ago (Unaudited) 2014 Fee Payer County Type of Business Aquifer Management Fee Program Aquifer Management Fee 1 Total Fees Assessed Percentage of Total Collected San Antonio Water System Bexar Water Purveyor $ 9,360,948 $ 11,890,934 $ 21,251, % San Antonio Water System - Formerly Bexar Metropolitan Bexar Water Purveyor 1,251,381 1,589,592 2,840, % New Braunfels Utilities Comal Water Purveyor 342, , , % Martin Marietta Materials SW Bexar Quarry 206, , , % City of Uvalde Uvalde Water Purveyor 192, , , % City of San Marcos Hays Water Purveyor 164, , , % City of Universal City Bexar Water Purveyor 135, , , % Flying W Properties, Ltd. Comal Quarry 126, , , % City of San Antonio (Zoo) Bexar Governmental 101, , , % City of Converse Bexar Water Purveyor 96, , , % Subtotal (Top 10 Principal Fee Payers) $ 11,978,070 $ 15,215,386 $ 27,193, % Balance from other fee payers 2,736,393 3,833,130 6,569, % Total Aquifer Management Fees $ 14,714,463 $ 19,048,516 $ 33,762, % 2005 Fee Payer County Type of Business Aquifer Management Fee Program Aquifer Management Fee 1 Total Fee Percentage of Total Collected San Antonio Water System Bexar Water Purveyor $ 7,581,000 $ 7,581, % Bexar Metropolitan Water District Bexar Water Purveyor 1,072,800 1,072, % City of Uvalde Uvalde Water Purveyor 197, , % Martin Marietta Materials SW Bexar Quarry 159, , % Cemex USA Construction Materials, Inc. Comal Construction Materials 147, , % New Braunfels Utilities Comal Water Purveyor 114, , % City of Universal City Bexar Water Purveyor 108, , % Alamo Concrete Products, Ltd. Bexar Construction Materials 108, , % City of San Antonio (Zoo) Bexar Governmental 104, , % Flying W Properties, Ltd. Comal Quarry 103, , % Subtotal (Top 10 Principal Fee Payers) $ 9,696,955 $ - $ 9,696, % Balance from other fee payers 2,372,895 2,372, % Total Aquifer Management Fees $ 12,069,850 $ - $ 12,069, % 1 In 2012, the program aquifer management fee was implemented in support of the Edwards Aquifer Authority Habitat Conservation Plan. 71

78 Table 5 Atascosa County Demographic Statistics* Last Ten Fiscal Years (Unaudited) Bexar County Fiscal Year Population 1 Personal Income 2 Per Capita Income 2 School Enrollment 3 Unemployment Rate 4 Fiscal Year Population 1 Personal Income 2 Per Capita Income 2 School Enrollment 3 Unemployment Rate ,774 $ 1,698,184 $ 36,060 9, ,855,866 $ 70,896,476 $ 39, , ,085 $ 1,554,745 $ 33,474 8, ,822,154 $ 68,567,177 $ 38, , ,436 $ 1,378,230 $ 30,238 8, ,788,858 $ 63,532,926 $ 36, , ,463 $ 1,293,638 $ 28,745 8, ,755,526 $ 59,455,916 $ 34, , ,911 $ 1,264,591 $ 28,333 8, ,714,773 $ 60,220,178 $ 36, , ,189 $ 1,194,562 $ 27,195 8, ,612,972 $ 56,891,253 $ 35, , ,479 $ 1,102,500 $ 25,358 8, ,562,396 $ 54,324,033 $ 34, , ,479 $ 1,024,635 $ 23,815 8, ,541,881 $ 51,588,829 $ 33, , ,414 $ 945,719 $ 22,261 8, ,550,160 $ 47,891,662 $ 31, , ,892 $ 875,888 $ 20,802 8, ,510,556 $ 43,958,545 $ 29, , Caldwell County Comal County Fiscal Year Population 1 Personal Income 2 Per Capita Income 2 School Enrollment 3 Unemployment Rate 4 Fiscal Year Population 1 Personal Income 2 Per Capita Income 2 School Enrollment 3 Unemployment Rate ,810 $ 1,156,676 $ 29,483 6, ,694 $ 5,742,217 $ 48,466 28, ,248 $ 1,068,564 $ 27,587 6, ,891 $ 5,248,803 $ 45,888 26, ,711 $ 983,222 $ 25,577 6, ,097 $ 4,984,481 $ 44,519 26, ,467 $ 970,143 $ 25,446 8, ,076 $ 4,537,147 $ 41,462 25, ,066 $ 957,644 $ 25,328 6, ,472 $ 4,240,601 $ 37,028 24, ,028 $ 919,522 $ 24,499 6, ,038 $ 4,076,303 $ 37,017 23, ,700 $ 872,891 $ 23,849 6, ,320 $ 3,814,385 $ 36,414 22, ,830 $ 858,315 $ 23,659 6, ,055 $ 3,578,119 $ 35,754 21, ,562 $ 805,614 $ 22,242 6, ,032 $ 3,239,380 $ 34,184 20, ,426 $ 752,494 $ 20,853 6, ,549 $ 2,846,563 $ 31,260 19, Guadalupe County Hays County Fiscal Year Population 1 Personal Income 2 Per Capita Income 2 School Enrollment 3 Unemployment Rate 4 Fiscal Year Population 1 Personal Income 2 Per Capita Income 2 School Enrollment 3 Unemployment Rate ,250 $ 5,784,395 $ 40,399 24, ,025 $ 6,148,146 $ 34,927 32, ,191 $ 5,534,047 $ 39,574 24, ,483 $ 5,741,395 $ 33,975 31, ,714 $ 5,044,267 $ 37,157 23, ,855 $ 5,364,409 $ 32,700 30, ,837 $ 4,650,166 $ 35,120 22, ,380 $ 5,027,360 $ 31,756 29, ,533 $ 4,370,052 $ 35,988 22, ,107 $ 4,622,968 $ 29,721 28, ,383 $ 4,006,427 $ 34,143 21, ,605 $ 4,386,014 $ 29,353 27, ,770 $ 3,605,000 $ 32,083 20, ,020 $ 4,078,020 $ 28,729 26, ,304 $ 3,325,001 $ 30,877 20, ,834 $ 3,709,570 $ 27,860 25, ,122 $ 3,001,387 $ 29,301 18, ,913 $ 3,310,966 $ 26,174 23, ,227 $ 2,663,115 $ 26,867 18, ,206 $ 2,945,216 $ 24,466 22, Medina County Uvalde County Fiscal Year Population 1 Personal Income 2 Per Capita Income 2 School Enrollment 3 Unemployment Rate 4 Fiscal Year Population 1 Personal Income 2 Per Capita Income 2 School Enrollment 3 Unemployment Rate ,894 $ 1,718,633 $ 36,259 9, ,117 $ 1,057,818 $ 39,286 6, ,366 $ 1,622,435 $ 34,693 9, ,916 $ 931,042 $ 34,803 5, ,867 $ 1,513,307 $ 32,638 9, ,760 $ 859,853 $ 32,404 6, ,546 $ 1,439,049 $ 31,205 9, ,574 $ 838,549 $ 31,682 6, ,006 $ 1,329,978 $ 29,735 8, ,405 $ 788,263 $ 29,401 6, ,015 $ 1,259,554 $ 28,479 8, ,695 $ 711,149 $ 26,724 6, ,956 $ 1,161,947 $ 26,557 8, ,203 $ 668,161 $ 25,238 6, ,251 $ 1,090,951 $ 25,244 8, ,950 $ 645,606 $ 24,277 6, ,472 $ 1,006,562 $ 23,748 8, ,719 $ 615,850 $ 23,164 6, ,784 $ 935,569 $ 22,339 8, ,669 $ 584,164 $ 22,137 6, * The EAA's jurisdiction includes all or portions of eight counties in south central Texas Atascosa, Bexar, Caldwell, Comal, Guadalupe, Hays, Medina and Uvalde. This table includes information for the entire population of each county. 1 U.S. Census Bureau, Texas State Department of State Health Services and Bureau of Economic Analysis 2 Bureau of Economic Analysis. 3 Texas Education Agency 4 Texas Workforce Commission 72

79 Table 6 Principal Employers 1 Current Year and Nine Years Ago (Unaudited) 2014 Employer Type of Business Total Employees Percentage - Total County Employment Joint Base San Antonio 2 Governmental 92, % H.E.B. Grocery Company Retail 19, % USAA Finance/Insurance 17, % City of San Antonio Governmental 11, % Northside Independent School District Services 13, % Northeast Independent School District Services 9, % Methodist Healthcare System Medical 8, % San Antonio Independent School District Services 7, % University Health System Medical 7, % Baptist Health System Medical 6, % Subtotal - Top 10 Principal Employers 192, % Total County employment for , Employer Type of Business Total Employees Percentage - Total County Employment Joint Base San Antonio 2 Governmental 63, % H.E.B. Grocery Company Retail 14, % USAA Finance/Insurance 13, % City of San Antonio Governmental 12, % Northside Independent School District Services 10, % San Antonio Independent School District Services 7, % Northeast Independent School District Services 7, % Methodist Healthcare System Medical 7, % SBC Communications Services 5, % UT Health Science Center at San Antonio Medical 5, % Subtotal - Top 10 Principal Employers 149, % Total County employment for ,685 1 Because Bexar County represents 76% of the EAA's region, only the top employers in Bexar County are included in this schedule. The information on this schedule was obtained from the 2014 Bexar County, Texas CAFR. 2 Under the Base Realignment and Closure Recommendation for San Antonio, installation support functions at the Army's Fort Sam Houston were combined with those at Randolph and Lackland Air Force Bases under a single organization (Joint Base San Antonio). The total includes military and civilian personnel. 73

80 Table 7 Cash and Investment Balances December 31, 2014 (Unaudited) Type Percentages Reported / Fair Value Amounts Cash on Hand 0.00% $ 693 Money Market and Checking Accounts 96.26% 41,653,759 Certificates of Deposit 3.74% 1,616,500 Totals % $ 43,270,952 74

81 Table 8 Number of Employees Last Ten Fiscal Years (Unaudited) Fiscal Year Officials or Administrators Professional Technical Administrative Support Total

82 Table 9 Operating Indicators for Demand or Level of Service Last Ten Fiscal Years (Unaudited) Irrigation Permits Number of Permits 1, , Authorized Use (acre-feet) 161, , , , , , , , , , Actual Use (acre-feet) 75, , , , , , , , , , Industrial Permits Number of Permits Authorized Use (acre-feet) 46, , , , , , , , , , Actual Use (acre-feet) 22, , , , , , , , , , Municipal Permits Number of Permits Authorized Use (acre-feet) 363, , , , , , , , , , Actual Use (acre-feet) 214, , , , , , , , , , Total Number of Permits 2,222 2,163 2,082 2,308 2,050 1,757 1,593 1,253 1,178 1,108 Authorized Use (acre-feet) 571, , , , , , , , , , Actual Use (acre-feet) 312, , , , , , , , , ,

83 Table 10 Revenues by Source Last Ten Fiscal Years (Unaudited) Fiscal Year Aquifer Management Fees Program Aquifer Management Fees 1 Compromise & Settlement Other Investment Income 2014 $ 14,714,463 $ 19,048,516 $ 43,215 $ 38,333 $ 110,180 $ 33,954, ,463,039 15,223,383 57,666 31,305 94,028 27,869, ,198,806 14,610, ,615 23,440 70,776 28,008, ,433,660 n/a 25,211 36,672 54,764 11,550, ,323,086 n/a 118, ,974 48,210 11,595, ,133,877 n/a 162, ,724 64,167 11,560, ,621,222 n/a 234, , ,993 11,473, ,649,130 n/a 86, , ,580 10,386, ,053,610 n/a 119,025 64, ,742 10,580, ,755,457 n/a 314,393 57, ,862 12,281,677 Total 1 The program aquifer management fee was implemented in 2012 in support of the Edwards Aquifer Authority Habitat Conservation Plan. 77

84 Table 11 Expenditures by Function* Last Ten Fiscal Years (Unaudited) Fiscal Year Salaries & Wages Benefits Professional & Technical Services Property Services Other Services Supplies Settlements Bad Debt Depreciation Gain/Loss on Fixed Assets Surplus 2014 $ 5,867,391 $ 1,670,113 $ 11,641,398 $ 537,099 $ 663,958 $ 434,211 $ - $ - $ 822,215 $ (4,834) $ - $ 21,631, ,696,658 1,508,806 7,899, , , , , , ,037, ,567,321 1,421,516 3,479, , , , ,216 29,692-12,271, ,304,078 1,371,128 2,630, , , , ,752 51,188-11,105, ,056,716 1,336,087 3,521, , , , ,869 61,402-11,630, ,677,171 1,223,619 3,525, , , , ,904 7,251-11,074, ,047,331 1,065,331 3,381, , , , , ,410 1,577 10,403, ,701, ,500 3,102, , , , , ,015 16,205 3,047 10,023, ,291, ,867 3,124, , , ,579-12, ,619 8,027 16,044 8,988, ,000, ,622 4,051, , , ,383-9, ,849 9,840 30,587 9,762,397 Debt Service Total * Includes general and special revenue funds. 78

85 Table 12 Miscellaneous Statistics December 31, 2014 (Unaudited) EAA created under Act of May 30, 1993, 73rd Leg., R.S., ch. 626, 1993 Tex. Gen. Laws 2350; as amended by Act of May 16, 1995, 74th Leg., R.S., ch. 524, 1995 Tex. Gen. Laws 3280; Act of May 29, 1995, 74th Leg., R.S., ch. 261, 1995 Tex. Gen. Laws 2505; Act of May 6, 1999, 76th Leg., R.S., ch. 163, 1999 Tex. Gen. Laws 634; Act of May 25, 2001, 77th Leg., R.S., ch. 1192, 2001 Tex. Gen. Laws 2696; Act of May 28, 2001, 77th Leg., R.S., ch. 966, and , 2001 Tex. Gen. Laws 1991, and ; Act of June 1, 2003, 78th Leg., R.S., ch. 1112, 6.01(4), 2003 Tex. Gen. Laws 3188, 3193; Act of May 23, 2007, 80th Leg., R.S., ch. 510, 2007 Tex. Gen. Laws 900; Act of May 28, 2007, 80th Leg., R.S., ch. 1351, , 2007 Tex. Gen. Laws 4612, 4627; Act of May 28, 2007, 80th Leg., R.S., ch. 1430, , 2007 Tex. Gen. Laws 5848, 5901; and Act of May 21, 2009, 81st Leg., R.S., ch. 1080, 2009 Tex. Gen. Laws 2818; and Act of May 20, 2013, 83rd Leg., R.S., ch. 783, 2013 Tex. Gen. Laws Year created 1996 Domicile San Antonio, Texas Last Revision of Enabling Act 2013 Population of EAA jurisdiction 2,267,273 (2010 Census Bureau) (8 counties) EAA jurisdiction Bexar, Medina and Uvalde counties, plus portions of Atascosa, Caldwell, Guadalupe, Comal and Hays counties Area of Edwards Aquifer 3,345 square miles, 180 miles long from west to east; 5-40 miles wide 10 -Year Median Recharge 211,900 acre feet (for period ) Median Annual Recharge 556,100 acre feet (for period ) 10 -Year Median Spring Discharge 307,200 acre feet (for period ) Median Annual Spring Discharge 375,800 acre feet (for period ) 10 -Year Median Total Discharge 729,700 acre feet (for period ) (springs and wells) Median Annual Total Discharge (springs and wells) Water Level Record High Water Level Record Low Groundwater Withdrawal Permits Groundwater Transferred in ,000 acre feet (for period ) feet above sea level, June 1992, as recorded at the Bexar County Index Well (J-17) feet above sea level, August 1956, as recorded at the Bexar County Index Well (J-17) 2,222 through December 31, 2014 (571, acre-feet) 50, acre-feet (520 transfers) 79

86 900 E. Quincy San Antonio, Texas edwardsaquifer.org