333*1 PARISH OF IBERVILLE, LOUISIANA WATERWORKS DISTRICT NO. 3 ANNUAL FINANCIAL REPORT MARCH 31, 2008 Under provisions of state law, this report is a public document. Acopy of the report has been submitted to the entity and other appropriate public officials. The report is availablefor public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court. / ' Release Date 7/c3Q
Transcript
333*1
PARISH OF IBERVILLE, LOUISIANAWATERWORKS DISTRICT NO. 3
ANNUAL FINANCIAL REPORT
MARCH 31, 2008
Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.
/ 'Release Date 7/c3Q
PARISH OF IBERVILLE, LOUISIANA-WATERWORKS DISTRICT NO. 3TABLE OF CONTENTS
MARCH 31, 2008
Independent Auditors' Report
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion & Analysis
BASIC FINANCIAL STATEMENTS
Balance Sheet
Statement of Revenues, Expensesand Changes in Net Assets
Statement of Cash Flows
NOTES TO FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
Comments on Operations of WaterUtility System
Schedule of Changes in AssetsRestricted for Revenue BondDebt Service
Plant Assets and Depreciation
Schedule of Compensation PaidBoard Members
Insurance in Force (Unaudited)
Report on Internal Control Over Financial Reportingand on Compliance and Other Matters Based onan Audit of Financial Statements Performed inAccordance with Government Auditing Standards
PAGE EXHIBIT SCHEDULE
1-2
3
4-11
12
13-14
15
16
17-23
24
25
26
27
28
29
A
B
C
2
3
4
5
30-31
P. O. Box 48258225 Belleview DrivePlaquemine, Louisiana 70764Phone (225) 687-6630 Fax (225) 687-0365
Hugh F. Baxley, CPA/CVA/PFS/FCPAMargaret A. Pritchard, CPA
Staci H. Joffrion, CPA
To the Board of Waterworks Commissioners of theParish of Iberville, Louisiana - Waterworks District No. 3
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of the business-type activities of the Parishof Iberville, Louisiana - Waterworks District No. 3, a component unit of the Iberville Parish Council,as of and for the year ended March 31, 2008 which collectively comprise the District's basic financialstatements, as listed in the table of contents. These financial statements are the responsibility ofthe District's management. Our responsibility is to express an opinion on these financial statementsbased on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by management, as wellas evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the business-type activities of the Parish of Iberville, Louisiana -Waterworks District No. 3 as of March 31, 2008 and the respective changes in financial position andcash flows, where applicable, thereof for the year then ended in conformity with accountingprinciples generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report datedMay 12, 2008, on our consideration of the Parish of Iberville, Louisiana - Waterworks District No. 3'sinternal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts, and grant agreements and other matters. The purpose of that report isto describe the scope of our testing of internal control over financial reporting and compliance andthe results of that testing, and not to provide an opinion on the internal control over financialreporting or on compliance. That report is an integral part of an audit performed in accordance withGovernment Auditing Standards and should be read in conjunction with this report in considering theresults of our audit.
INDEPENDENT AUDITORS' REPORT (continued)
The Management's Discussion and Analysis on pages 5 through 11 is not a required part of thebasic financial statements but is supplementary information required by accounting principlesgenerally accepted in the United States of America. We have applied certain limited procedures,which consisted principally of inquiries of management regarding the methods of measurement andpresentation of the required supplementary information. However, we did not audit the informationand express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the financial statements thatcollectively comprise the District's basic financial statements. The other supplementary informationlisted in the table of contents is presented for purposes of additional analysis and is not a requiredpart of the basic financial statements of Parish of Iberville, Louisiana - Waterworks District No. 3.Such information has been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.
, LLC
Plaquemine, LouisianaMay 12, 2008
REQUIRED SUPPLEMENTARY INFORMATION
Managements Discussion and Analysis
Managements Discussion and Analysis
As management of the Iberville Parish Water District No. 3, we offer readers of theDistrict's financial statements this narrative overview and analysis of the financialactivities of the District for the fiscal year ended March 31, 2008.
Financial Highlightso o
e The assets of the Iberville Parish Water District No. 3 exceeded its liabilities atthe close of the most recent fiscal year by $4,140,074 (net assets). Of this amount,$586,956 (unrestricted net assets) may be used to meet the government's ongoingobligations to citizens and creditors.
® The District's total net assets increased by 1103,917. The increase is due to acontinuation of efficient management of the districts resources. OperatingRevenue and other sources increased by $15,938 from $1,245,741 in 2007 to$1,261,679 in 2008. The primary reason for the increase in revenue was becauseof an increase in quantity of water sold.
e Capital contributions fell for 2007 by $249, from $15,000 to $14,751.
e The District's total debt decreased by $75,196 due to the retirement of principal onthree revenue bonds.
o The District paid a total of $101,536 in interest on outstanding debt.
Overview of the Financial StatementsThis discussion and analysis are intended to serve as an introduction to the IbervilleParish Water District No. 3?s basic financial statements. The District's basic financialstatements comprise two components: 1) proprietary fund financial statements and 2)
notes to the financial
statements. This report: also contains other supplementary information in addition to thebasic financial statements themselves.
Proprietary Fund Financial Statements
Proprietary lands provide the same type of information as the conventional government-widefinancial statements, only in more detail. The proprietary fund financial statements provideseparate information for the water operation, which is considered to be the only major fundof Ibcrville Water District No. 3.
The proprietary fund financial statements are designed to provide readers wit}) a broadoverview of Ibervillc Parish Water District No. 3's finances, in a manner similar to aprivate-sector business.
The statement of net assets presents information on all of the District's assets and liabilities, withthe difference between the two reported as net assets. Over time, increases or decreases innet assets may serve as a useful indicator of whether the financial position of theDistrict is improving or deteriorating.
The statement of revenues expenditures and changes in net assets present information showinghow the entity's net assets changed during the most recent fiscal year. All changes innet assets are reported as soon as the underlying event giving rise to the change occurs,regardless of the liming of related cashflows
The business-type activities of the Iberville Water District No. 3 are conductedthrough the Iberville Parish Council Utility Department and they include only wateroperations. The district has no component units or separate fund types.
A fund is a grouping of related accounts that is used to maintain control over resourcesthat have been segregated for specific activities or objectives. The Iberville ParishWater District No. 3, like other state and local governments, uses fund accounting toensure and demonstrate compliance with finance-related legal requirements. TheDistrict uses only the only enterprise fund types of proprietary funds.
An Enterprise fund is n proprietary fund type used to report an activity for which a fee ischarged to external users for the consumption and/or purchase of goods or services.
The basic proprietary fund financial statements can be found on pages 13-16 of thisreport
Notes to the financial statementsThe notes provide additional information that is essential to a full understanding of thedata provided in the government-wide, and fund f inanc ia l statements. The notes to thefinancial statements can be found on pages 17-23 of this report.
Other informationIn addition to the basic financial statements and accompanying notes, this report also
presents certain required supplementary' information concerning the Parish of Iberville,Louisiana, Waterworks District No. 3's progress in funding its obligations. C3thersupplementary information can be found on page 24-31 of this report.
Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's
financial position. In the case of the Iberville Parish Water District No. 3, assetsexceeded liabilities by $4,140,074 at the close of the most recent fiscal year.
By far the largest portion of the District's net assets (77 percent) reflects its investmentin capital assets (e.g., land, buildings, machinery, and equipment); less any related debtused to acquire those assets that is still outstanding. The District uses these capitalassets to provide services to citizens. Consequently, these assets arc not available forfuture spending. Although the District's investment in its capital assets is reported netof related debt, it is not an expendable resource. The resources needed to repay this debtmust be provided from other sources, since the capital assets themselves cannot be used toliquidate these liabilities.
Iberville Parish Water District No. 3Table 1
Net Assets
Business -.jTpc. activities
Current and other assets
Capital assets
Total assetsLong-term liabilities outstanding
Other liabilities
Total liabilities
Net assets:Invested in capita] assets, net
Of related debt
Restricted
Unrestricted
Total net assets
2007
$1,155,887
5.444.422
6.600.309
2.265,922
298.230
2,564,152
3,178,500
353,391
504.266
S 4.036.157
A portion of Iberville Parish Water District No. 3's nut assets 5353,391 (9 percent) rep-resents resources that are subject to external restrictions on how they may be used. Theremaining balance of unrestricted net assets 5586,956 (14 percent) may be used to meet thegovernment's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the Iberville Parish Water District No. 3 was able toreport positive balances in its net assets. The same situation held true for the prior fiscalyear.
Iberville Parish Water District No. 3Table 2
Changes in Net assets
Revenues
Program revenues
Charges for Services
Connections and Sendee Fees
Capital contributions
Other general revenues
Total Revenues
Other expenditures
Interest on long term debt
Water
Total Expenses
Increase (decrease) in net
Assets
Net Assets Beginning
Net Assets Ending
Business - type activities
2008 2007
1.330.329
5,093
101,536
1.119,783
1.226.412
1.316.268
5,093
102,961
1.054.059
1.162.113
4.036.157
Charges for Services increased by $13,310 because of an increased sale of Water.Interest earnings decreased because of a decrease in the rate of return. Total expensesincreased by $64,761 because of increases in depreciation, contract operations, repairs,maintenance, water treating chemical and insurance. We expect operating expenses tocontinue to increase from year to year due to inflation and aging infrastructure.
The Water district received $14,751 in capital contributions from their customers for variousline extensions throughout the district. Capital contributions related to line extensions are afrequent because of regulations set forth by the District requiring a property owner to bearthe initial cost for all water line extensions in a new development. After the newdevelopment is complete, the water district then fakes over and maintains the water lines.
Other factors concerning the finances of this fund have already been addressed in thediscussion of the Iberville Parish Water District No. 3's business-type
Iberville Parish Water District No. 32007 Expenses and Program Revenues - Business Type Activities
Water
I Water Operating Revenues m Water Operating Expenses
activities.
Revenues by Source - Business Type Activities
90%
JSale of Water ^Interest Earnings rjConnection and Service Fees DOther
Capital Asset and Debt Administration
Capital assets
The Iberville Parish Water District No. 3's investment in capital assets for its business typeactivities as of March 31, 2008, amounts to $5,348,386 (net of accumulated depreciation).This investment in capital assets includes land, buildings and system, improvements,machinery and equipment. The total decrease in the Iherville Parish Water District No.3'sinvestment in capital assets for the current fiscal year was $96,036.
Major capital asset events during the current fiscal year included the following:
Iberville Parish Water District No. 3Table 3
Water District No, 3 - Capital Assets
(Net of depreciation)
Land
Buildings and system
To till S 5348386 J 5,444.422
Additional information on the Iberville Parish Water District No. 3's capital assets can befound on page 27 of this report.
Long-term debtAt the end of the current fiscal year, the Iberville Parish Water District No. 3 had total debtoutstanding of $2,175,955 comprised entirely of revenue bonds for which the district isliable.
Iberville Parish Water District No. 3Table 4Iberville Parish Council - Outstanding DebtGeneral Obligation and Revenue Bondso
Business - type activities2008 2007
Revenue Bonds S 2,175,955 $ 2,341,369
Total S 2,175.955 S 2.341.369
10
Additional information on the IberviUc Parish Water District No. 3's long-term debt canbe found on pages 19-21 of this report.
Economic Factors and Next Years Rates:
• The average number of customers billed increased slightly from 3,021 in 2007 to 3,073 in2008.
• The average quantity of water used went from 89.12 thousands to 86.01 thousands gallonsper customer.
0 The average revenue per 1,000 gallons sold went from $4.51 to $4.66.
• There were 2,962 residential and 111 commercial water utility customers at March 31,2008, up from 2,913 residential and 106 commercial water utility customers at March31,2007.
• The district increased rates in April of 2007.
These factors were considered in preparing the Iberville Parish Water District No.3's budget for the 2007 fiscal year.
During the current fiscal year, unrestricted net assets increased by $82,690 to $589,956. As aproprietary fund type, the district is not required to adopt a budget. It is anticipated thatpositive unrestricted net assets will avoid the need to raise taxes or charges during the 2008-09 fiscal year.
Requests for InformationThis financial report is designed to provide a general overview of the Iberville Parish WaterDistrict No. 3's finances for all those with an interest in the government's finances.Questions concerning any of the information provided in this report or requests foradditional financial information should be addressed to the Iberville Parish Water DistrictNo. 3, IberviUe Parish Council, Office of the Finance Director, P. O. Box 389, Plaquemine,LA 70764
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BASIC FINANCIAL STATEMENTS
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EXHIBIT APARISH OF IBERV1LLE, LOUISIANA-WATERWORKS DISTRICT No. 3
BALANCE SHEET-ASSETSMARCH 31, 2008
ASSETSCurrent Assets
CashAccounts receivable (net of allowance fordoubtful accounts of $ 5,336 at March 31, 2008)Other
Restricted AssetsRevenue bond fundRevenue bond reserve fund:
CashWater revenue bond HUD:
CashDepreciation and contingency fund, savingsCustomer deposits:
CashSavings
PlantWater distribution systemWells, tank and equipmentWater treating plant
Less accumulated depreciation
Land and rights of wayUnamortized cost of leased land
Other AssetsUnamortized debt expense
TOTAL ASSETS
March 31,2008
$ 414,726
157,63429.591
601,951
79,088
220,078
50,261102,784
9,793139,015601,019
2,982,1871,891,3863,252,6068,126,179
(2,813,098)5,313,081
33,8001,505
5,348.386
127.333127,333
$ 6,678,689
The accompanying notes are an integral part of this statement.
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EXHIBIT ACONT.
PARISH OF IBERVILLE, LOUISIANA-WATERWORKS DISTRICT No. 3BALANCE SHEET-LIABILITIES AND NET ASSETS
MARCH 31, 2008
LIABILITIES AND FUND EQUITY
Current LiabilitiesPayable from current assets:
Accounts payableTaxes payable
Payable from restricted assets:Current portion of revenue bondsCustomers' meter depositsOther
Long-Term LiabilitiesWaterworks revenue bonds, dated April 1999(net of current maturities)
Waterworks revenue bonds, dated 2004(net of current maturities)
TOTAL LIABILITIES
March 31,2008
141,685643
142,328
90,218110,681
19,433220,332362,660
375,955
1.800,0002,175,9552,538,615
NET ASSETSInvested in capital assets, net of related debtRestricted Net Assets:
Reserved for revenue bond interest and retirement,system replacement and extension and construction
Unrestricted Net Assets
TOTAL NET ASSETS
3,172,431
380,687586.956
4,140,074
TOTAL LIABILITIES AND NET ASSETS $ 6,678,689
The accompanying notes are an integral part of this statement.
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EXHIBIT BPARISH OF IBERVILLE, LOUISIANA-WATERWORKS DISTRICT No. 3
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS-ENTERPRISE FUND
FOR THE YEAR ENDED MARCH 31, 2008
March 31,2008
OPERATING REVENUESSale of water $ 1,228,056Forfeited discounts 25,403Connection and service fees 8,220
1.261.679OPERATING EXPENSESContract operations 308,759Repairs and maintenance 103,040Bad debt expense 327Depreciation 190,884Power charges 65,145Insurance 37,575Board fees 5,400Telephone 2,192Professional fees 12,218Office expenses and supplies 12,077Amortization of land lease 74Miscellaneous 20,614Water treating chemical 205,322Water plant operators 136,721Workman's compensation 3,335Recording secretary 3,600Rent 12,500
1,119,783OPERATING INCOME 141,896
NON-OPERATING REVENUESOther 17,179Interest on investments 36,720
53.899NON-OPERATING EXPENSES
Revenue bond interest 101,536Amortization of deferred debt expense 5,093
106,629
(LOSS) INCOME BEFORE CONTRIBUTIONS 89,166
CAPITAL CONTRIBUTIONS 14,751
CHANGES IN NET ASSETS 103,917
TOTAL NET ASSETS, BEGINNING 4,036,157
TOTAL NET ASSETS, ENDING $ 4,140,074
The accompanying notes are an integral part of this statement.
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EXHIBIT CPARISH OF IBERVILLE, LOUISIANA-WATERWORKS DISTRICT No. 3
STATEMENT OF CASH FLOWS-ENTERPRISE FUNDFOR THE YEAR ENDED MARCH 31, 2008
March 31,2008
CASH FLOWS FROM OPERATING ACTIVITIESCash received from customers $ 1,249,040Cash payments for goods and services (884,759)
NET CASH PROVIDED BY OPERATING ACTIVITIES 364,281
CASH FLOWS FROM NON-CAPITAL FINANCING ACITIVITESCustomer deposits received 2,535Amortization of land lease (74)
NET CASH PROVIDED BY NON-CAPITAL FINANCING ACTIVITIES 2,461
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESMiscellaneous 17,203Acquisition of capital assets (94,872)Principal paid on revenue bond maturities and land note (75,196)Capital contributed by subdividers 14,751Interest paid on revenue bonds and land note (net of accruals) (101.536)
NET CASH USED IN CAPITAL AND RELATEDFINANCING ACTIVITIES (239,650)
CASH FLOWS FROM INVESTING ACTIVITIESInterest on investments 36,720
NET CASH PROVIDED BY INVESTING ACTIVITIES 36,720
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 163,812
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 851,933
CASH AND CASH EQUIVALENTS-END OF YEAR $ 1,015,745
RECONCILIATION OF OPERATING INCOME TONET CASH PROVIDED BY OPERATING ACTIVITIESOperating income $ 141,896Adjustments to reconcile operating income to net
cash provided by operating activities:Depreciation and amortization 190,958Changes in operating assets and liabilities:
Accounts and miscellaneous receivables (15,697)Accounts payable 47,026Taxes payable 98
Total adjustments 222,385
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 364,281
The accompanying notes are an integral part of this statement.
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PARISH OF IBERVILLE, LOUISIANA - WATERWORKS DISTRICT NO. 3NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2008
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
The Water District No. 3, of the Parish of Iberville, Louisiana, was created by an ordinance of the IbervilleParish Police Jury in 1971. The governing authority of the District consists of six members of a Board ofCommissioners appointed to five-year terms by the Parish Council.
Basis of PresentationThe accompanying financial statements of the Water District No. 3 of the Parish of Iberville, Louisiana havebeen prepared in conformity with accounting principles generally accepted in the United States of America asapplied to governmental units. The Governmental Accounting Standards Board (GASB) is the acceptedstandard-setting body for establishing governmental accounting and financial reporting principles.
Reporting EntitySection 2100 of the GASB Codification of Governmental Accounting and Financial Reporting Standards(GASB Codification) established criteria for determining the governmental reporting entity and componentunits that should be included within the reporting entity. In conformance with GASB Codification Section2100, the District is a component unit of the Iberville Parish Council. The accompanying basic financialstatements present only the transactions of the Water District No. 3 of the Parish of Iberville, Louisiana.
Fund Structure
Water District No. 3 of the Parish of Iberville, Louisiana, a component unit of the Parish, is an enterprise fund.Enterprise funds are used to account for operations that are financed and operated in a manner similar to
private business enterprises - where the intent of the governing body is that cost (expenses, includingdepreciation) of providing goods or services to the general public on a continuing basis will be financed orrecovered primarily through user charges.
Method of Accounting
On April 1, 2001, the District adopted the provisions of Governmental Accounting Standards Board StatementNo. 34 (Statement 34) "Basic Financial Statements - and Management's Discussion and Analysis -for Stateand Local Governments. " Statement 34 established standards for external reporting for all state and localgovernmental entities which includes a statement of net assets, a statement of activities and changes in netassets and a statement of cash flows. It requires the classification of net assets into three components - investedin capital assets, net of related debt; restricted; and unrestricted. These classifications are defined as follows:
Invested in capital assets, net of related debt - This component of net assets consists of capital assets,including restricted capital assets, net of accumulated depreciation and reduced by the outstandingbalances of any bonds, mortgages, notes, or other borrowings that are attributable to the unspentrelated debt proceeds at year-end. The portion of the debt attributable to the unspent proceeds are notincluded in the calculation of invested in capital assets, net of related debt, rather, that portion of thedebt is included in the same net assets component as the unspent proceeds.
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PARISH OF IBERVILLE, LOUISIANA - WATERWORKS DISTRICT NO. 3NOTES TO FINANCIAL STATEMENTS
NOTE A - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Restricted - This component of net assets consists of constraints placed on net asset use throughexternal constraints imposed by creditors (such as through debt covenants), grantors, contributors, orlaws or regulations of other governments or constraints imposed by law through constitutionalprovisions or enabling legislation.
Unrestricted net assets - The component of net assets consists of net assets that do not meet thedefinition of "restricted" or "invested in capital assets, net of related debt."
The adoption of Statement 34 had no effect on the basic financial statements except for the classification of netassets in accordance with Statement 34 and the reflection of capital contributions as a change in net assets.
The Water District utilizes the accrual basis of accounting. Revenues are recognized in the accounting periodin which they are earned and expenses are recognized when they are incurred. Revenues for utility services areaccrued through year-end.
Revenue Billings
Utility customers are billed throughout the month in cyclical billings by route. Revenues are accrued at yearend from the date of last billing.
Plant
Plant and equipment are recorded at cost and depreciation is computed on the straight-line method overestimated useful lives of 8-50 years.
The cost of customers' service line extensions is billed to the customer and the proceeds are credited tocontributed capital.
Amortization of Deferred Charges:
The cost of leased land is being amortized over the lease term from 3 to 50 years, on a straight-line basis.
Amortization of deferred debt expense is computed over the life of the bond issue, on a straight-line basis.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the District considers all highly liquid investments (includingrestricted assets) with a maturity of three months or less when purchased to be cash equivalents. Accordingly,all restricted cash and time deposits are considered cash and cash equivalents.
NOTE B - BONDS PAYABLE
Waterworks Revenue Bonds Dated April 5,1999
The U.S. Department of Agriculture Farmers Home Administration is the holder of a water revenue bond dated April5, 1999. The bond is a single, fully registered bond, without coupons, and bears interest at the rate of 4.875% per
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PARISH OF IBERVILLE, LOUISIANA - WATERWORKS DISTRICT NO. 3NOTES TO FINANCIAL STATEMENTS
annum. The bond is payable in annual installments of $23,800, including interest, beginning February 10,2000, andannually thereafter through February 10, 2040. Any installments for the payment of principal thereon may be paidprior to the due date at a price of par and accrued interest to the date of prepayment. Payments on the bond shall beapplied first to interest due through the date of payment, and then to principal.
The bond is payable in annual installments as follows:
Amount due February 10, 2009(interest only) $18,582
Amount due February 10, 2009 - 2040(principal & interest) $761,600
Waterworks Revenue Refunding Bonds Dated Series 2004
The U.S. Department of Agriculture Farmers Home Administration is the holder of water revenue bonds datedOctober 26, 2004, which amounted to $2,150,000. The bonds bear interest at the rate of 4.453%, payable semi-annually on February lsl and August lsl of each year. They mature serially as shown in the following schedule.
WATERWORKS REVENUE REFUNDING BONDS DATED OCTOBER 2004
On October 26,2004, $2,150,000 of water revenue refunding bonds were issued to pay off old debt. The actual costissuance, bond discount, and underwriters discount amounted to $ 147,706. Th is amount will be amortized over thelife of the bond.
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PARISH OF IBERVILLE, LOUISIANA - WATERWORKS DISTRICT NO. 3NOTES TO FINANCIAL STATEMENTS
Other Asset $ 147,706
Less: Amortization over 29 years (20,373)
Unamortized Debt at March 31, 2008 $ 127,333
NOTE D - FLOW OF FUNDS - RESTRICTIONS ON USE
Under the terms of the bond indentures on outstanding Water Utility Bonds dated April 5, 1999 and October 26,2004, all income and revenue (hereinafter referred to as revenue) of every nature, earned or derived from operationsof the Utility System are pledged and dedicated to the retirement of said bonds, and are to be set aside into the "WaterSystem Revenue Fund." Such revenues shall be expended and used only in the manner and order specified below:
The first charge against the Water System Revenue Fund shall be the payment of reasonable and necessary expensesincurred in the current operation and maintenance of the system.
Each month, there will be set aside into a fund called the "Water System Revenue Bond and Interest Sinking Fund" anamount constituting no less than 1/12 of the next maturing installment of principal and interest on the outstandingbonds. Such transfers shall be fully sufficient to assure the prompt payment of principal and interest installments asthey become due, and may be used only for such payments. In fiscal 2007 all transfers were properly made.
In accordance with the bond issues, there shall also be set aside into a "Water Revenue Bond Reserve Fund" anamount equal to 20% of that sum transferred to the Water System Revenue Bond and Interest Sinking Fund until suchtime as the funds and/or investments in the Water Revenue Bond Reserve Fund shall equal $72,000. With respect tothe bond resolutions, the amount to be set aside each month into the Water Revenue Bond Reserve Fund shall be 5%of the sum required to be transferred each month into the Sinking Fund for each of the bond issues as stated above.Payments shall continue until the highest annual debt service amount on the combined bond issues, includingprincipal and interest payable in any future fiscal year, is accumulated.
Money in the Reserve Fund may be used solely for the payment of maturing bonds and interest coupons for whichsufficient funds are not on deposit in the Water Revenue Bond Fund and as to which there would otherwise be adefault.
The 1999 bond issues also established a "Depreciation and Contingency Fund" into which monthly transfers of$ 1,146 are to be made. The funds may be used for the same purpose as the Water Replacement and Extension Fundmentioned above. Any balance in the Water System Revenue Fund may be used for the purpose of acquiring forcancellation the outstanding Water Revenue Bonds or for any other lawful purpose.
NOTE E-CAPITAL CONTRIBUTIONS
Analysis of changes in contributions for March 31 year ends are as follows:
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PARISH OF IBERVILLE, LOUISIANA - WATERWORKS DISTRICT NO. 3NOTES TO FINANCIAL STATEMENTS
CUSTOMERS2008
Balance, beginning of year $ 829,783Add: Contributions from customers 14,751Balance, end o f year $ 8 4 4 , 5 3 4
FHA2008
Balance, beginning of year $ 1,300,000Add: Contributions from customersBalance, end of year $ 1,300,000
STATE GRANT2008
Balance, beginning of year $ 59,302Add: Contributions from customersBalance, end of year $ 59,302
IBERVILLEPARISH
COUNCIL2008
Balance, beginning of year $ 132,248Add: Contributions from customersBalance, end of year $ 132,248
GEORGIAGULF2008
Balance, beginning of year $ 559,931Add: Contributions from customersBalance, end of year $ 559.931
IBERVILLE PARISHUTILITY DEPT
2008Balance, beginning of year $ 15,335Add: Contributions from customersBalance, end of year $ 15,335
NOTE F - CASH AND CASH EQUIVALENTS
For reporting purposes, cash and cash equivalents include cash, demand deposits, time deposits and certificates ofdeposit. Under state law, the Parish of Iberville, Louisiana - Waterworks District No. 3, may deposit funds with a
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PARISH OF IBERVILLE, LOUISIANA - WATERWORKS DISTRICT NO. 3NOTES TO FINANCIAL STATEMENTS
fiscal agent bank organized under the laws of the State of Louisiana, any other state in the Union, or the laws of theUnited States. Further, the Parish of Iberville, Louisiana - Waterworks District No. 3 may invest in the deposits orcertificates of deposit of state banks organized under Louisiana law and national banks having principal offices inLouisiana.
For the year ended March 31,2008 the Parish of Iberville, Louisiana- Waterworks District No. 3 entered into a fiscalagency contract with a commercial bank domiciled wi th in the Parish. The contract provided that all deposits are to bein Super NOW (negotiable orders of withdrawal) accounts paying a market rate of interest which approximates theinterest rate on 13 week U.S. Treasury Bills. The contract called for 100% participation by the Bank of Commerce.
Under the contract, the Bank of Commerce acted as the servicing bank or agent for all deposits and withdrawals of theDistrict. At March 31, 2008, the Parish of Iberville, Louisiana-Waterworks District No. 3 had bank balances totaling$1,040,969.
The Bank of Commerce maintains an account in the name of the Parish of Iberville, Louisiana - Waterworks DistrictNo. 3 and thus has federal deposit insurance for that account in the amount of $100,000 for checking, savings, andinvestments. Any excess of deposits over federal deposit insurance must be secured under state law by the pledge ofbank-owned securities. The market value of the pledged securities plus the federal deposit insurance must at all timesbe at least equal to the amount on deposit with the banks. These pledged securities are held in the name of thepledging banks in an independent custodial bank that is mutually acceptable to the parties involved.
The following is a summary of cash and cash equivalents of the Parish of Iberville, Louisiana -Waterworks DistrictNo. 3 in the fiscal agency contract at March 31, 2008, with the related federal deposit insurance and pledgedsecurities:
Bank Balances FDIC BalancesMarch 31 ,2008 Insurance Uninsured
Cash $1,040,969 $100.000 $940,969
Uncollateralized -Securities pledged and held
by custodial banks in the name offiscal agent banks at fairmarket value, at March 31, 2008 1,210,945
Excess of FDIC insurance andpledged securities over cash atMarch 31, 2008 $269,976
NOTE F - CASH AND CASH EQUIVALENTS, (CONTINUED)
Even though the pledged securities are considered uncollateralized under the provisions of GASB Statement 3,Louisiana Revised Statute 39:1229 imposes a statutory requirement on the custodial banks to advertise and sell the
22
PARISH OF IBERVILLE, LOUISIANA - WATERWORKS DISTRICT NO. 3NOTES TO FINANCIAL STATEMENTS
pledged securities within ten (10) days of being notified by the District that the fiscal agency bank(s) has (have) failedto pay deposited funds upon demand.
NOTE G - INTEREST COSTS
There were no interest costs capitalized during the current period.
NOTE H - CHANGES IN AMOUNT INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT
The change in amounts invested in capital assets, net of related debt can be summarized as follows:
Balance at March 31, 2007 $ 3,178,500
Change in capital assets (96,036)
Change in related debt 89,967
Balance at March 31, 2008 $ 3,172,431
NOTE I - LITIGATION
There are no asserted claims against Waterworks District No. 3 at March 31, 2008.
23
SUPPLEMENTARY INFORMATION
24
SCHEDULE 1
PARISH OF IBERVILLE, LOUISIANA - WATERWORKS DISTRICT NO. 3COMMENTS ON OPERATIONS OF WATER UTILITY SYSTEM
MARCH 31, 2008
Revenues are derived from the sale of water at the following rates that were effective April, 2007:
Residential ratesFirst 2,000 gallons or less per month $ 14.97 (minimum)Over 2,000 gallons $3.23 per 1,000 gallons
Small commercial ratesFirst 2,000 gallons or less per month $19.07 (minimum)Over 2,000 gallons $3.38 per 1,000 gallons
Large commercial ratesFirst 2,000 gallons per month or less $29.73 (minimum)Over 2,000 gallons $3.54 per 1,000 gallons
Customer statistics relative to water billed and number of customers for the year ended March 31,2008 are as follows:
2008
Water Revenue $ 1,228,056
Quantity of water sold (in thousand gallons) 263,779
Average number of customers billed 3,067
Average quantity of water used per customer(in thousand gallons) 86.01
Annual average per customer $ 400.41
Average revenue per thousand gallons sold $ 4.66
Cost of operations per 1,000gallons sold $ 4,24
Average net cost of operations per 1,000 $ 4.44gallons sold
There were 2,962 residential and 111 commercial water ut i l i ty customers at March 31, 2008.
25
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SCHEDULE 4
PARISH OF IBERVILLE, LOUISIANA - WATERWORKS DISTRICT NO. 3SCHEDULE OE COMPENSATION PAID BOARD MEMBERS
Products-Completed Operations Aggregate Limit 1,000,000Personal and Accidental Injury Limit 1,000,000Each Occurrence Limit 1,000,000Fire Damage Limit (Any One Fire) 50,000Medical Expense Limit (Any One Person) 5,000
(b) Automobile Liability;Combined Single Limit 1,000,000
(c) Property Damage27084 Hwy 404, Plaquemine. LAChlorinator 105,21327720 Hwv 405, White Castle. LA250,000 gallon tank 375,00063455 Belleview Road, Ptaquemine. La.100,000 gallon tank 200,00063315 Hwv. 404 - Choctaw Tank100,000 gallon tank 200,00052720 Kado St.. Plaquemine, LABuilding and contents 58,80027354 River Road. Plaquemine, LAPumps 31,200Building 56,00065200 Belleview Road, Plaquemine, La.Building 1,039,400Generator 40,000Clarifler 1,000,000
(d) Blanket Employee Dishonesty 250,000
The above schedule of insurance coverage is intended only as a descriptive summary and the independent accountantsexpress no opinion as to the adequacy of such coverage.
29
BAXLEY AND ASSOCIATES, LLCP. O. Box 48258225 Belleview DrivePlaquemine, Louisiana 70764Phone (225) 687-6630 Fax (225) 687-0365
Hugh F. Baxley, CPA/CVA/PFS/FCPAMargaret A. Pritchard, CPA
Staci H. Joffrion, CPA
Board of Waterworks Commissioners of the Parishof Iberville, Louisiana - Waterworks District No. 3
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCEAND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
We have audited the financial statements of the business-type activities of the Parish of Iberville, Louisiana -Waterworks District No. 3, a component unit of Iberville Parish Council as of and for the year ended March 31,2008,which collectively comprise the District's basic financial statements, and have issued our report thereon datedMay 12, 2008. We conducted our audits in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Parish of Iberville, Louisiana - Waterworks District No. 3'sinternal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressingour opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of theDistrict's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness ofthe Parish of Iberville, Louisiana - Waterworks District No. 3's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management or employees, in thenormal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. Asignificant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects theDistrict's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generallyaccepted accounting principles such that there is more than a remote likelihood that a misstatement of the Parish ofIberville, Louisiana - Waterworks District No. 3's financial statements that is more than inconsequential will not bepresented or detected by the Parish of Iberville, Louisiana - Waterworks District No. 3's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than aremote likelihood that a material misstatement of the financial statements wi l l not be prevented or detected by theParish of Iberville, Louisiana - Waterworks District No. 3's internal control.
30
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCEAND OTHER MATTERS BASED ON AN AUIDT OE FINANCILA STATEMENT S PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (CONTINUED)
Our consideration of internal control over financial reporting was for the limited purpose described in the firstparagraph of this section and would not necessarily identify all deficiencies in internal control that might besignificant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financialreporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Parish of Iberville, Louisiana - Waterworks District No.3's financial statements are free of material misstatement, we preformed tests of its compliance with certain provisionsof laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and materialeffect on the determination of financial statement amounts. However, providing an opinion on compliance with thoseprovisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of ourtests disclosed no instances of noncompliance or other matters that are required to be reported under GovernmentAuditing Standards.
This report is intended for the information and use of management, the Legislative Auditors, others within theorganization, and federal awarding agencies and pass-through entities and is not intended to be and should not beused by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributedby the Legislative Auditor as a public document.
