May 1, 2012
Once again an independent auditor has given the Water District an unqualified clean opinion and indicated the District is financially strong.
The annual audit for Fiscal Year 2011 was presented to the Board of Directors by Allan Johnston, CPA, who conducted the detailed audit of financial statements.
Johnston noted that District management has historically approached operations in a very conservative fashion. He explained that the district continues to invest revenues in system maintenance and upgrades while keeping reserves to deal with potential disasters.
"If you don't spend the money on the infrastructure at some point you will have to. When I have seen that it is usually much more expensive than doing routine maintenance," he said.
The Texas Drought of 2011 resulted in somewhat higher water demand from District customers than in the past two years. Total demand in 2011 was 8.3 billion gallons. Of that 50% was drinking water, 32% was industrial treated water and 18% was untreated or "raw" water used by industry.
The District had total revenues for the year from water sales of $19.4 million with expenses of $17.6 million. The District maintains an unrestricted fund balance that will be used for future projects, any large unexpected expense and for rate smoothing. While it has been three decades since the last major hurricane hit the Water District service area, it is necessary to be prepared for the potential of major economic disruption, including reduced revenue from water sales, in the wake of a severe storm.
At the end of 2011 the District had long-term bond debt of $45.7 million including revenue bonds issues in 1999, 2006 and 2009 to fund major constructionprojects. Bond debt is paid off throughfuture revenue from water sales.
The Water District is a "cost of service" entity, meaning that customers are charged water rates based on the total cost of operations, water purchases and debt service.
