91202-002 461847v1
Information Required by Section 26.18, Texas Tax Code and Section 2051.202, Texas Government Code
Date: October 15, 2021
(1) Name and term of office of each member of the governing body:
Name: Term of office:
Aaron Nowling 5/5/2018 – 5/7/2022 Laura Daniels 5/2/2020 – 5/4/2024 Peggy Williams 5/5/2018 – 5/7/2022 Dennis Ramirez 5/2/2020 – 5/4/2024 James Peaks 5/2/2020 – 5/4/2024
(2) Mailing address, physical address, e-mail address, and telephone number:
2727 Allen Parkway, Suite 1100 Houston, Texas 77019
713-652-6500
91202@smithmur.com
(3) a. Official contact information for each member of the governing body:
Same as Item (2) above.
b. Name of General Manager or Executive Director:
None
c. Name, mailing address and telephone number of person representing District’s utility operator:
Josh Maas
Marlon Ivy & Associates, Inc P.O. Box 9
Spring, TX 77383 281/651-1618
d. Name, mailing address and telephone number of person representing District’s tax assessor- collector:
Pat Hall Equi-Tax, Inc.
P.O. Box 73109 Houston, TX 77273 281/444-4866
(4) District’s budget for the preceding two years:
The budgets for the fiscal years ended in 2019 and 2020 are attached.
91202-002 461847v1
The budget for the fiscal year ending in 2021 is attached.
(6) Change in amount of District budget from the preceding year to current year, by dollar amount and percentage:
2020 Budget Revenues 2021 Budget Revenues Change in Amount Percentage Change
$3,110,000 $3,272,500 $162,500 5.22508%
(7) Amount of property tax revenue budgeted for maintenance and operations for the preceding two years and the current year:
See attached budgets.
(8) Amount of property tax revenue budgeted for debt service for the preceding two years and the current year:
The District does not budget for debt service.
(9) Tax rate for maintenance and operations adopted by the taxing unit for the current year and preceding two years:
2021 $0.75 2020 $0.75 2019 $0.75
(10) The tax rate for debt service adopted by the taxing unit for the current year and preceding 2 years:
2021 $0.50 2020 $0.50 2019 $0.50
(11) This information required by Section 26.18 is applicable only to school districts.
(12) Tax rate for maintenance and operations proposed by the taxing unit for the current year:
As of the date of the report, no proposed tax rate has been established for the current year.
(13) Tax rate for debt service proposed by the taxing unit for the current year:
As of the date of the report, no proposed tax rate has been established for the current year.
(14) This information required by Section 26.18 is applicable only to school districts.
(15) The most recent financial audit of the District.
See attached.
91202-002 461847v1
None.
(17) Notice of tax rate hearing required under Chapter 26, Tax Code or Section 49.236, Water Code:
See attached.
(18) District’s meeting schedule and location:
Monthly on 2
ndMonday at 11:30 a.m. at 2727 Allen Parkway, Ste. 1100, Houston, TX 77019 (19) Residents of the District have the right to request the designation of a meeting location within the
District under Section 49.062(g), Water Code.
A description of this process can be found at:
https://www.tceq.texas.gov/assets/public/permitting/watersupply/districts/Form-20863.pdf
Proposed Budget for Fiscal Year Ending December 31st, 2019
1/14/2019
12 MONTHS ADOPTED 12/10/18
WATER REVENUE
WASTE COLLECT (SWR/GARBAGE) BULK WATER SALES
NEWBLDR.1 NEW BLDR. 2 NHCRWA Revenue NHCRWA WATER SALE TAPS/INSPECTIONS TRANSFER FROM TAX INTEREST EARNED MISC
Expenses
DIRECTOR FEES & TAXES LEGAL FEES
LEGAL FEES-FEMA LEGAL FEES-Electjon/Spectal AUDITING FEES
ENGINEERING FEES ELECTION EXPENSES LAB FEES
PERMITS & ASSESSMENTS NHCRWA-Purchased Water OPERATOR'S FEES gQQ^^p^Q p^g TAPS & INSPECT.
REP.&MAINT.-GENERAL R fit M- Water Line & Well Pump R & M- SS Rehab
LEGAL NOTICES & PUBL OFFICE / MEETING EXPENSE CHEMICALS
UTILITIES
INSURANCE & BONDS TRAVEL EXPENSES PURCHASED SEWER/JT-WWTP REIMBURSE TO NW 6 MUD REIMBURSEMENT TO DEVELOPERS SECURIT(r-HARRIS COUNTY SLUDGE HAULING BULK WATER PURCH.
OVER COLLECTED TAX-Prior years EXCHANGE AGENT FEES MISCELLANEOUS DETENTION POND MAINT.
GARBAGE COLLECTION RECORDS MANAGEMENT
Prepared for meeting from Myrtle Cruz, fnc.
(713) 759-1368
12 months Actual 243,790.63 352.563.48 0.00 0.00 0.00 313,003.33 0.00 18,285.00 1,910,614.26 27,963.02 0.00 2,866,2201
Actual 16,191 108,760 3,273 23.255 20.200 23,228 1,376 6.246 5,000 329,855 54,302 16,020 5,205 125,189 11,038 0 0 15,352 242 25,588 7.017 2,520 210.025 0 0 69,159 0 0 0 8.800 0 44,700 141,504 10,000 1,284,046|
1,582,174) Budget
245,000 350.000 0 0 0 330.000 0 15,000 1,812,500 7,500 0 2,760,000
Budget 24,000 100.000 0 0 18,000 35.000 5.000 9.000 7,000 330,000 50,000 15,900 15.000 190,000 145,000 100,000 500 14,000 2,500 40,000 9.000 2.500 256,454 0 219.000 70,000
. 0
0 349,000 4,400 1.000 46,000 184,200 10,000 2,252,454
507,546
Projected Actual
243,791 352,563 0 G a 313.003 0 18,285 1.910,614 27.963 0 2,866,220
Projected 16,191 108,760 3.273 23,255 20,200 23,228 1.376 6,246 5,000 329,855 54,302 16,020 5,205 125,189 11,038 0 0 15,352 242 25.588 7,017 2.520 210.025 0 0 69.159 0 0 0 8,800 0 44,700 141,504 10,000 1.284.046 1,582,174
Current Budget 245,000 350,000 0 0 0 330.000 0 15,000 1,812,500 7.500 0 2,760,OOC
Current 24.000 100,000 0 0 18,000 35.000 5.000 9,000 7,000 330,000 50,000 15,900 15,000 190,000 145,000 100,000 500 14,000 2,500 40,000 9,000 2,500 256,454 0 219,000 70.000 0 0 349,000 4.400 1,000 46,000 184.200 10.000 2,252,464 507,546
Proposed Budget
250,000 355,000 0 0 0 350,000 0 15,000 1,960,000 7,500 0 2,937,500
Proposed 24,000 100,000 0 0 18,000 35,000 5,000 9,000 7,000 350,000 50,000 15,900 15,000 190,000 145,000 100,000 500 14,000 2,500 40,000 9,000 2,500 262,500 0 0 70,000 0 0 290,000 4,400 1,000 46,000 126,500 10,000 1,942,800 994,700 01/14/19
(A) 2018 TAX $2,003,908.97 X .98
(B) NHCRWA water $3.40 & $3.85-per operator (1) Tax Liability per TAX A/C
(2) $11,70 X 900 garbage-Texas Pride Disposal
ANNUAL BOND PAYMENT AMOUNT FOR 2019 IS NOT INCLUDED IN EXPENSES-TO BE DETERMINED
Proposed Budget for Fiscal
ADOPTED 12/09/19 WATER REVENUE
WASTE COLLECT (SWR/GARBAGE) BULK WATER SALES
NEW BLDR. 1 NEW BLDR. 2 NHCRWA Revenue NHCRWA WATER SALE TAPS/INSPECTIONS TRANSFER FROM TAX INTEREST EARNED MISC
Expenses
DIRECTOR FEES & TAXES LEGAL FEES
LEGAL FEES-FEMA LEGAL FEES-Election/Speciat AUDITING FEES
ENGINEERING FEES ELECTION EXPENSES LAB FEES
PERMITS & ASSESSMENTS NHCRWA-Purchased Water OPERATOR'S FEES BOOKKEEPING FEES TAPS & INSPECT.
REP.& MAINT.-GENERAL R & M" Water Line & Well Pump R & M. SS Rehab
LEGAL NOTICES &PUBL OFFICE / MEETING EXPENSE CHEMICALS
UTIUTIES
INSURANCE & BONDS TRAVEL EXPENSES
PURCHASED SEWER/JT-WWTP REIMBURSE TO NW 8 MUD REIMBURSEMENT TO DEVELOPERS SECURITY-HARRIS COUNTY SLUDGE HAULING BULK WATER PURCH.
OVER COLLECTED TAX-Prior yeare EXCHANGE AGENT FEES MISCELLANEOUS DETENTION POND MAINT.
GARBAGE COLLECTION RECORDS MANAGEMENT
Prepared for meeting from Myrtle Cruz, Inc.
(713) 759-1368
Year Ending December 31st, 2020
12/9/2019
12 MONTHS 11 months
Actual 220,318.79 332,195.89 0.00 0.00 0.00 310,745.26 0.00 5,704.93 1,633,040.34 33.808,34 1,248.90 2,537,0621
Actual 16,912 98,417 559 0 18,500 14.929 0 8.196 2,811 311,380
50.127 14,575 3,500 153,184 0 0 0 16,179 590 24.987 17,492 1,443 182.056 0 0 63,410 0 0 0 0 675 41,960 134,983 0 1,176,863|
1,360,199|
Budget 229.161 325,411 ( ( ( 320,831 ( 13,75C 1,796,661 6,671 ( 2,692,70!
Budget 22.000 91,667 0 0 16,500 32.083 4.583 8,250 6,417 320.833 45,833 14,575 13,750 174,167 132,917 91,667 458 12,833 2.292 36.667 8,250 2,292 240,625 0 0 64,167 0 0 265,833 4,033 917 42.167 115,958 9,167 1.780.900 911,808
Projected Actual
240,348 362,396 0 0 0 338,995 0 6,224 1,633,040 36.882 1.362 2,619,246 i
2019 Budget
250,000 355,000 0 0 0 350,000 0 15,000 1,960,000 7,500 0 2,937,500
2020 Budget
250,000 360,000 0 0 0 385,000 0 15,000 2,072,000 28,000 0 3,110,000
Projected 18.449 107.363 609 0 18,500 16.286 0 8.941 3,068 339,687 54,684 15,900 3,818 167.109 0 0 0 17.650 644 27.258 17.492 1,574 198,607 0 0 69,175 0 0 0 0 736 45,775 147,254 0 1,280.5791 1,338,668 j
Current 24,000 100,000 0 0 18,000 35,000 5.000 9.000 7,000 350.000 50,000 15,900 15.000 190.000 145,000 100,000 500 14,000 2,500 40,000 9.000 2.500 262,500- 0 0 70,000 0 0 290,000 4,400 1.000 46.000 126,500 10.000 1,942,800
994,700
Proposed 24,000 107,000 0 10,000 19,000 35,000 5,000 10,000 7,000 385,000 55,000 15,900 15,000 190,000 145,000 100,000 500 17,000 2,500 37,000 9,000 2,500 215,455 0 0 70,000 0 0 0 4,400 1,000 46,000 126,500 0 1,654,755 1,455,245 12/09/19
(A) 98% of tax levy $2.11 M
(B) As of 04/01/19 NHCRWA water rate $3.85 GWTR & $4.30 SWTR (1) Tax Liability per TAX A/C-no longer an issue
(2) $11.70 x 900 garbage-Texas Pride Disposal
ANNUAL BOND PAYMENT AMOUNT FOR 2019 IS NOT INCLUDED IN EXPENSES-TO BE DETERMINED
12/14/2020 ADOPTED 12/14!20
3RD DRAFT
WATER REVENUE
WASTE COLLECT (SWR/GARBAGE) BULK WATER SALES
NEW BLDR. 1 NEW BLDR. 2 NHCRWA Revenue NHCRWA WATER SALE TAPS/INSPECTIONS TRANSFER FROM TAX INTEREST EARNED MISC
Expenses
DIRECTOR FEES &TAXES LEGAL FEES
LEGAL FEES-FEMA LEGAL FEES-Election/Special AUDITING FEES
ENGINEERING FEES ENGINEERING-SSN ELECTION EXPENSES LAB FEES
PERMITS &ASSESSMENTS NHCRWA-Purchased Water OPERATOR'S FEES BOOKKEEPING FEES TAPS &INSPECT.
REP.& MAINT.-GENERAL R & M-Water Line 8 Weli Pump R & M• SS Rehab
LEGAL NOTICES & PUBL OFFICE /MEETING EXPENSE CHEMICALS
UTILITIES
INSURANCE &BONDS TRAVEL EXPENSES PURCHASED SEWER/JT-WW'T'P REIMBURSE TO NW 6 MUD REIMBURSEMENT TO DEVELOPERS SECURITY-HARRIS COUNTY SLUDGE HAULING BULK WATER PORCH.
OVER COLLECTED TAX-Prior years EXCHANGE AGENT FEES MISCELLANEOUS DETENTION POND MAINT.
GARBAGE COLLECTION RECORDS MANAGEMENT
12 MONTHS 11 months Projected
Actual
2019 Budget
2021 Budget Actual Budget
205,083.28 250,000 223,727 250,000 250,000 332,171.27 360,000 362,369 355,000 360,000
0.00 0 0 0 0
0.00 0 0 0 0
0.00 0 0 0 0
351,972.29 385,000 383,970 350,000 465,000
0.00 0 0 0 0
4,715.10 15,000 5,144 15,000 15,000 1,902,287.06 2,072,000 1,902,287 1,960,000 2,180,500 8,431.46 28,000 9,198 7,500 2,000
4,719.60 0 5,149 0 0
2,809,380 3,110,000 2,891,843 2,937,500 5272,500
Actual Budget Projected Current Proposed 15,462 24,000 16,867 24,000 24,000 103,594 107,000 113,011 100,000 107,000
0 0 0 0 0
6,705 10,000 7,314 0 10,000
17, 600 19, 000 17, 600 18, 000 19, 0 0 0 28,466 35,000 31,054 35,000 35,000
0 0 0 0 10,000
0 5,000 0 5,000 5,000
7,586 10,000 8,276 9,000 70,000
2,840 7,000 3,099 7,000 7,000
318,744 385,000 347,721 350,000 465,000 55,785 55,000 60,856 50,000 55,000 14, 815 15, 900 16,162 15,900 16,250 1,400 15,000 1,527 15,000 15,000 95,376 190,000 104,046 190,000 780,000
0 145,000 0 145,000 145,000
0 700,000 0 100,000 100,000
0 500 0 500 500
16, 522 17, 000 18, 024 14, 000 17 , 0 0 0
560 2,500 610 2,500 2,500
25,818 37,000 28,165 40,000 37,000
19,294 9,000 19,294 9,000 9,000
769 2,500 839 2,500 2,500
200,024 215,455 218,208 262,500 265,000
0 0 0 0 0
0 0 0 0 0
66,508 70,000 72,554 70,000 73,000
0 0 0 0 D
0 0 0 0 0
19,500 0 21,273 290,000 0
4,400 4,400 4,400 4,400 4,400
675 1,000 736 1,000 1,000
44,583 46,000 48,636 46,D00 46,000 104,352 126, 500 113, 839 126,500 126,500
0 0 0 10,000 0
1,171,377 1,654,755 1,274,112 1,942,800 7,797,650 1,638,003 1,455,245 1,617,731 994,700 1,474,850
Prepared for meeting from 12/14/20 Myrtle Cruz, Inc.
(713) 759-1368 (A) 98 % 2020 TAX LEW-$2,225,000 X 98 % =$2,180,500
(B) water rate $4.25 GWTR & $4.70 SWTR
60.00 (1) Tax Liability per TAX A/C-no longer an issue
(2) $11.70 x 900 garbage-Texas Pride Disposal
ANNUAL BOND PAYMENT AMOUNT FOR 2021 IS NOT INCLUDED IN EXPENSES-TO BE DETERMINED
Harris County Municipal Utility District No. 202
Harris County, Texas
Independent Auditor's Report and Financial Statements
December 31, 2020
December 31, 2020
Contents
Independent Auditor's Report ... 1
Management's Discussion and Analysis ... 3
Basic Financial Statements Statement of Net Position and Governmental Funds Balance Sheet ... 9
Statement of Activities and Governmental Funds Revenues, Expenditures and Changes in Fund Balances ... 11
Notes to Financial Statements ... 12
Required Supplementary Information Budgetary Comparison Schedule – General Fund ... 27
Budgetary Comparison Schedule – Special Revenue Fund ... 28
Notes to Required Supplementary Information ... 29
Other Information Other Schedules Included Within This Report ... 30
Schedule of Services and Rates ... 31
Schedule of General Fund Expenditures ... 32
Schedule of Temporary Investments ... 33
Analysis of Taxes Levied and Receivable ... 34
Schedule of Long-term Debt Service Requirements by Years ... 36
Changes in Long-term Bonded Debt ... 37
Comparative Schedule of Revenues and Expenditures – General Fund – Five Years ... 38
Board Members, Key Personnel and Consultants ... 39
Independent Auditor's Report
Board of Directors
Harris County Municipal Utility District No. 202 Harris County, Texas
We have audited the accompanying financial statements of the governmental activities and each major fund of Harris County Municipal Utility District No. 202 (the District) as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise the District's basic financial statements listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Harris County Municipal Utility District No. 202 Page 2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, and each major fund of the District as of December 31, 2020, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison schedules listed in the table of contents be presented to supplement the basic financial statements. Such information, although not 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.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The other 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.
Houston, Texas
June 28, 2021
Management's Discussion and Analysis December 31, 2020
3
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the District's basic financial statements.
The District's basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements and 3) notes to financial statements. This report also contains supplementary information required by the Governmental Accounting Standards Board and other information required by the District's state oversight agency, the Texas Commission on Environmental Quality (the Commission).
In accordance with required reporting standards, the District reports its financial activities as a special-purpose government. Special-purpose governments are governmental entities which engage in a single governmental program, such as the provision of water, sanitary sewer and drainage services. Other activities, such as the provision of recreation facilities and solid waste collection, are minor activities and are not budgeted or accounted for as separate programs. The financial statements of special-purpose governments combine two types of financial statements into one statement. These two types of financial statements are the
government-wide financial statements and the fund financial statements. The fund financial statements are presented on the left side of the statements, a column for adjustments is to the right of the fund financial statements and the government-wide financial statements are presented to the right side of the adjustments column. The following sections describe the measurement focus of the two types of statements and the significant differences in the information they provide.
Government-wide Financial Statements
The focus of government-wide financial statements is on the overall financial position and activities of the District. The District's government-wide financial statements include the statement of net position and statement of activities, which are prepared using accounting principles that are similar to commercial
enterprises. The purpose of the statement of net position is to attempt to report all of the assets, liabilities, and deferred inflows and outflows of resources of the District. The District reports all of its assets when it acquires or begins to maintain the assets and reports all of its liabilities when they are incurred.
The difference between the District's assets, liabilities, and deferred inflows and outflows of resources is labeled as net position and this difference is similar to the total stockholders' equity presented by a commercial
enterprise.
The purpose of the statement of activities is to present the revenues and expenses of the District. Again, the items presented on the statement of activities are measured in a manner similar to the approach used by a commercial enterprise in that revenues are recognized when earned or established criteria are satisfied and expenses are reported when incurred by the District. All changes in net position are reported when the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues
are reported even when they may not be collected for several months or years after the end of the accounting
period and expenses are recorded even though they may not have used cash during the current year.
Management's Discussion and Analysis (Continued) December 31, 2020
4
Although the statement of activities looks different from a commercial enterprise's statement of income, the financial statement is different only in format, not substance. Whereas the bottom line in a commercial enterprise is its net income, the District reports an amount described as change in net position, essentially the same thing.
Fund Financial Statements
Unlike government-wide financial statements, the focus of fund financial statements is directed to specific activities of the District rather than the District as a whole. Except for the general fund, a specific fund is established to satisfy managerial control over resources or to satisfy finance-related legal requirements established by external parties or governmental statutes or regulations.
Governmental Funds
Governmental-fund financial statements consist of a balance sheet and a statement of revenues, expenditures and changes in fund balances and are prepared on an accounting basis that is significantly different from that used to prepare the government-wide financial statements.
In general, these financial statements have a short-term emphasis and, for the most part, measure and account for cash and other assets that can easily be converted into cash. For example, amounts reported on the balance sheet include items such as cash and receivables collectible within a very short period of time, but do not include capital assets such as land and water, sewer and drainage systems. Fund liabilities include amounts that are to be paid within a very short period after the end of the fiscal year. The difference between a fund's assets, liabilities, and deferred inflows and outflows of resources is labeled the fund balance and generally indicates the amount that can be used to finance the next fiscal year's activities. Likewise, the operating statement for
governmental funds reports only those revenues and expenditures that were collected in cash or paid with cash, respectively, during the current period or very shortly after the end of the fiscal year.
Because the focus of the government-wide and fund financial statements is different, there are significant differences between the totals presented in these financial statements. For this reason, there is an analysis in the notes to financial statements that describes the adjustments to fund balances to arrive at net position presented in the governmental activities column on the statement of net position. Also, there is an analysis in the notes to financial statements that reconciles the total change in fund balances for all governmental funds to the change in net position, as reported in the governmental activities column in the statement of activities.
Notes to Financial Statements
The notes to financial statements provide additional information that is essential to a full understanding of the
data found in the government-wide and fund financial statements.
Management's Discussion and Analysis (Continued) December 31, 2020
5
Financial Analysis of the District as a Whole
The District's overall financial position and activities for the past two years are summarized as follows, based on the information included in the government-wide financial statements.
2020 2019
Current and other assets $ 4,974,939 $ 4,748,615
Capital assets 4,313,202 4,055,934
Total assets $ 9,288,141 $ 8,804,549
Long-term liabilities $ 6,631,885 $ 7,876,041
Other liabilities 222,675 235,672
Total liabilities 6,854,560 8,111,713 Deferred inflows of resources 2,330,927 2,116,679 Net position:
Net investment in capital assets (2,318,683) (3,820,107)
Restricted 33,796 33,796
Unrestricted 2,387,541 2,362,468
Total net position $ 102,654 $ (1,423,843) Summary of Net Position
The total net position of the District increased by $1,526,497 or about 107 percent. The majority of the increase in net position is related to property tax revenues intended to pay principal on the District's bonded
indebtedness, which is shown as long-term liabilities in the government-wide financial statements. Although the District's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
2020 2019
Revenues:
Property taxes $ 2,121,174 $ 1,997,807
Charges for services 1,145,628 1,097,832
Other revenues 65,815 134,965
Total revenues 3,332,617 3,230,604
Summary of Changes in Net Position
Management's Discussion and Analysis (Continued) December 31, 2020
6
2020 2019
Summary of Changes in Net Position (Continued)
Expenses:
Services $ 1,508,044 $ 1,487,603
Depreciation 151,563 151,564
Debt service 146,513 317,935
Total expenses 1,806,120 1,957,102
Change in net position 1,526,497 1,273,502 Net position, beginning of year (1,423,843) (2,697,345) Net position, end of year $ 102,654 $ (1,423,843)
Financial Analysis of the District's Funds
The District's combined fund balances as of the end of the fiscal year ended December 31, 2020, were
$1,971,396, an increase of $27,555 from the prior year.
The general fund's fund balance increased by $27,555 due to property tax and service revenues exceeding service operations expenditures and principal and interest payments under the District's bankruptcy plan.
The District's special revenue fund's fund balance remained the same, as all expenditures were billed to the participants.
General Fund Budgetary Highlights
There were several differences between the final budgetary amounts and actual amounts. The major differences between budget and actual were due to water service revenue and repairs and maintenance expenditures being lower than anticipated and property taxes revenue and contracted services expenditures being higher than anticipated. In addition, penalty and interest revenues, principal and interest payments made under the District's bankruptcy plan and return of capital were not included in the current year budget. The fund balance as of December 31, 2020, was expected to be $3,365,290 and the actual end-of-year fund balance was $1,937,600.
Capital Assets and Related Debt Capital Assets
Capital assets held by the District at the end of the current and previous fiscal years are summarized below.
Management's Discussion and Analysis (Continued) December 31, 2020
7
2020 2019
Land and improvements $ 1,567,421 $ 1,158,590
Water facilities 815,628 864,485
Wastewater facilities 1,930,153 2,032,859
Total capital assets $ 4,313,202 $ 4,055,934 Capital Assets (Net of Accumulated Depreciation)
During the current year, additions to capital assets were as follows:
Clearing and grubbing to serve Champion Oaks, Section 1 $ 408,831 Debt
The changes in the debt position of the District during the fiscal year ended December 31, 2020, are summarized as follows:
Long-term debt payable, beginning of year $ 7,876,041
Increases in long-term debt 555,344
Decreases in long-term debt (1,799,500)
Long-term debt payable, end of year $ 6,631,885
A developer within the District has constructed facilities on behalf of the District under the terms of contracts with the District. The District has agreed to purchase these facilities from the proceeds of future bond issues or available cash, subject to approval of the Commission. As of December 31, 2020, a liability for developer constructed capital assets of $408,831 was recorded in the government-wide financial statements.
At December 31, 2020, the District had $5,800,000 of unlimited tax bonds authorized, but unissued, for the purposes of acquiring, constructing and improving the water, sanitary sewer and drainage systems within the District.
The District's bonds are not rated.
Management's Discussion and Analysis (Continued) December 31, 2020
8
Other Relevant Factors
Relationship to the City of Houston
Under existing Texas law, since the District lies wholly within the extraterritorial jurisdiction of the City of Houston (the City), the District must conform to the City ordinance consenting to the creation of the District.
In addition, the District may be annexed by the City without the District's consent. If the District is annexed, the City must assume the District's assets and obligations (including the bonded indebtedness) and abolish the District within 90 days.
Plan of Adjustment
On March 30, 1994, the District filed a voluntary petition of adjustment under Chapter IX of the United States Bankruptcy Code. The order of confirmation of the Plan of Adjustment was entered by the United States Bankruptcy Court on August 22, 1995, and became effective December 11, 1995. The accompanying financial statements have been adjusted to reflect this debt adjustment.
Contingencies
A developer is constructing facilities within the boundaries of the District. The District has agreed to reimburse the developer for a portion of these costs, plus interest, from available funds to the extent approved by the Commission. The District's engineer has stated current construction contract amounts are approximately
$2,250,600. This amount has not been recorded in the financial statements since the facilities are not complete
or operational.
Statement of Net Position and Governmental Funds Balance Sheet December 31, 2020
See Notes to Financial Statements 9
Special Statement
General Revenue of Net
Fund Fund Total Adjustments Position
Assets
Cash $ 823,750 $ 58,890 $ 882,640 $ - $ 882,640 Short-term investments 1,718,502 - 1,718,502 - 1,718,502 Receivables:
Property taxes 1,862,400 - 1,862,400 - 1,862,400 Service accounts 62,996 - 62,996 - 62,996 Accrued penalty and interest - - - 45,732 45,732 Due from others 16,390 - 16,390 353,969 370,359 Due from participants - 13,843 13,843 - 13,843 Interfund receivable - 16,011 16,011 (16,011) - Prepaid expenditures 18,467 - 18,467 - 18,467 Capital assets (net of accumulated
depreciation):
Land - - - 1,567,421 1,567,421 Infrastructure - - - 2,745,781 2,745,781
Total assets $ 4,502,505 $ 88,744 $ 4,591,249 $ 4,696,892 $ 9,288,141
Statement of Net Position and Governmental Funds Balance Sheet (Continued) December 31, 2020
See Notes to Financial Statements 10
Special Statement
General Revenue of Net
Fund Fund Total Adjustments Position
Liabilities
Accounts payable $ 71,766 $ 22,856 $ 94,622 $ - $ 94,622 Customer deposits 90,651 - 90,651 - 90,651 Operating deposits - 32,092 32,092 - 32,092 Due to others 5,310 - 5,310 - 5,310 Interfund payable 16,011 - 16,011 (16,011) - Long-term liabilities:
Due within one year - - - 1,250,000 1,250,000 Due after one year - - - 5,381,885 5,381,885
Total liabilities 183,738 54,948 238,686 6,615,874 6,854,560 Deferred Inflows of Resources
Deferred property tax revenues 2,381,167 0 2,381,167 (50,240) 2,330,927 Fund Balances/Net Position
Fund balances:
Nonspendable, prepaid expenditures 18,467 - 18,467 (18,467) - Committed, wastewater treatment
and collection - 33,796 33,796 (33,796) - Unassigned 1,919,133 - 1,919,133 (1,919,133) -
Total fund balances 1,937,600 33,796 1,971,396 (1,971,396) 0
Total liabilities, deferred inflows
of resources and fund balances $ 4,502,505 $ 88,744 $ 4,591,249
Net position:
Net investment in capital assets (2,318,683) (2,318,683)
Restricted for plant operations 33,796 33,796
Unrestricted 2,387,541 2,387,541
Total net position $ 102,654 $ 102,654
Statement of Activities and Governmental Funds Revenues, Expenditures and Changes in Fund Balances
Year Ended December 31, 2020
See Notes to Financial Statements 11
Special Statement
General Revenue of
Fund Fund Total Adjustments Activities
Revenues
Property taxes $ 2,119,820 $ - $ 2,119,820 $ 1,354 $ 2,121,174 Water service 212,665 - 212,665 - 212,665 Sewer service 366,418 384,394 750,812 (216,126) 534,686 Regional water fee 398,277 - 398,277 - 398,277 Penalty and interest 21,411 - 21,411 4,484 25,895 Tap connection and inspection fees 5,040 - 5,040 - 5,040 Investment income 8,393 82 8,475 20,320 28,795 Other income 6,085 - 6,085 - 6,085 Total revenues 3,138,109 384,476 3,522,585 (189,968) 3,332,617 Expenditures/Expenses
Service operations:
Purchased services 584,583 - 584,583 (216,126) 368,457 Regional water fee 5,758 - 5,758 - 5,758 Professional fees 173,513 17,826 191,339 - 191,339 Contracted services 318,586 33,377 351,963 - 351,963 Utilities 28,489 82,482 110,971 - 110,971 Repairs and maintenance 160,808 235,250 396,058 - 396,058 Other expenditures 67,957 15,541 83,498 - 83,498 Depreciation - - - 151,563 151,563 Debt service:
Principal retirement 1,600,000 - 1,600,000 (1,600,000) - Interest and fees - - - 146,513 146,513 Bankruptcy payment 199,500 - 199,500 (199,500) - Total expenditures/expenses 3,139,194 384,476 3,523,670 (1,717,550) 1,806,120 Deficiency of Revenues Over Expenditures (1,085) - (1,085) 1,527,582
Other Financing Sources
Return of capital 28,640 - 28,640 (28,640) Excess of Revenues and Other Financing
Sources Over Expenditures and Other
Financing Uses 27,555 - 27,555 (27,555)
Change in Net Position 1,526,497 1,526,497
Fund Balances/Net Position
Beginning of year 1,910,045 33,796 1,943,841 - (1,423,843) End of year $ 1,937,600 $ 33,796 $ 1,971,396 $ 0 $ 102,654
Notes to Financial Statements December 31, 2020
12
Note 1: Nature of Operations and Summary of Significant Accounting Policies Harris County Municipal Utility District No. 202 (the District) was created by an order of the Texas Water Commission, now known as the Texas Commission on Environmental Quality (the
Commission), effective July 15, 1981, in accordance with the Texas Water Code, Chapter 54. The District operates in accordance with Chapters 49 and 54 of the Texas Water Code and is subject to the continuing supervision of the Commission. The principal functions of the District are to finance, construct, own and operate waterworks, wastewater and drainage facilities and to provide such facilities and services to the customers of the District.
The District is governed by a Board of Directors (the Board) consisting of five individuals who are residents or owners of property within the District and are elected by voters within the District. The Board sets the policies of the District. The accounting and reporting policies of the District conform to accounting principles generally accepted in the United States of America for state and local governments, as defined by the Governmental Accounting Standards Board. The following is a summary of the significant accounting and reporting policies of the District:
Reporting Entity
The accompanying government-wide financial statements present the financial statements of the District. There are no component units that are legally separate entities for which the District is considered to be financially accountable. Accountability is defined as the District's substantive appointment of the voting majority of the component unit's governing board. Furthermore, to be financially accountable, the District must be able to impose its will upon the component unit or there must be a possibility that the component unit may provide specific financial benefits to, or impose specific financial burdens on, the District.
Government-wide and Fund Financial Statements
In accordance with required reporting standards, the District reports its financial activities as a special-purpose government. Special-purpose governments are governmental entities which engage in a single governmental program, such as the provision of water, wastewater, drainage and other related services. The financial statements of special-purpose governments combine two types of financial statements into one statement. These two types of financial statements are the
government-wide financial statements and the fund financial statements. The fund financial
statements are presented with a column for adjustments to convert to the government-wide financial statements.
The government-wide financial statements report information on all of the activities of the District.
As a general rule, the effect of interfund activity has been eliminated from the government-wide
financial statements. Governmental activities generally are financed through taxes, charges for
services and intergovernmental revenues. The statement of activities reflects the revenues and
expenses of the District.
Notes to Financial Statements December 31, 2020
13
The fund financial statements provide information about the District's governmental funds. Separate statements for each governmental fund are presented. The emphasis of fund financial statements is directed to specific activities of the District.
The District presents the following major governmental funds:
General Fund – The general fund is the primary operating fund of the District which accounts for all financial resources not accounted for in another fund. Revenues are derived primarily from property taxes, charges for services and interest income.
Special Revenue Fund – Accounts for revenues and expenditures involving specific revenue sources that are legally restricted to expenditures for specified purposes. The primary source of revenue is participant fees.
Fund Balances – Governmental Funds
The fund balances for the District's governmental funds can be displayed in up to five components:
Nonspendable – Amounts that are not in a spendable form or are required to be maintained intact.
Restricted – Amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may be changed or lifted only with the consent of resource providers.
Committed – Amounts that can be used only for the specific purposes determined by resolution of the Board. Commitments may be changed or lifted only by issuance of a resolution by the District's Board.
Assigned – Amounts intended to be used by the District for specific purposes as determined by management. In governmental funds other than the general fund, assigned fund balance represents the amount that is not restricted or committed. This indicates that resources in other governmental funds are, at a minimum, intended to be used for the purpose of that fund.
Unassigned – The residual classification for the general fund and includes all amounts not contained in the other classifications.
The District considers restricted amounts to have been spent when an expenditure is incurred for
purposes for which both restricted and unrestricted fund balance is available. The District applies
committed amounts first, followed by assigned amounts, and then unassigned amounts when an
expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance
classifications could be used.
Notes to Financial Statements December 31, 2020
14
