06JUN30 PHI2:li3 I - app1.lla.la.govapp1.lla.la.gov/PublicReports.nsf/B723EA559367F42D862571BE00245E19/...I I I I I I I I I I I I I I I I I I I-1-Kolin-Ruby Wise Waterworks District

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Kolin-Ruby Wise Waterworks DistrictNo. 11A of Rapides Parish, Louisiana

(A Component Unit of the Rapides Parish Police Jury)

Annual Financial ReportDecember 31, 2005

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.

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Kolin-Ruby Wise Waterworks District No. 1 1 ATable of Contents

Management's Discussion and Analysis

Independent Auditors' Report

Report on Compliance and on Internal Control OverFinancial Reporting Based on an Audit of the General PurposeFinancial Statements Performed in Accordance withGovernment Auditing Standards

Statement of Net Assets - Proprietary Fund

Statement of Revenues, Expenses and Changesin Net Assets - Proprietary Fund

Statement of Cash Flows - Proprietary Fund

Notes to Financial Statements

Supplemental Information

Schedule of Findings and Questioned Cost

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6-7

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13-20

21-22

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Kolin-Ruby Wise Waterworks District No. 11AOf Rapides Parish, Louisiana

(A Component Unit of the Rapides Parish Police Jury)Management Discussion and Analysis (MD&A)

December 31,2005

Introduction

Kolin-Ruby Wise Waterworks District No. 11A of Rapides Parish, Louisiana (theWaterworks District) is pleased to present its Annual Financial Report developed incompliance with Governmental Accounting Standards Board Statement No. 34, BasicFinancial Statements - Management's Discussion and Analysis - For State and LocalGovernments (hereinafter referred to as GASB 34), and related standards. GASB 34 providesfinancial statement users a more detailed and comprehensive analysis of the financialperformance of the Waterworks District. Please read the following in conjunction with theWaterworks District's financial statements and footnotes, which follow this section. This isthe Waterworks District's initial year of implementation of GASB 34.

Financial Highlights

• Total assets for the year were $4,966,204, at December 31, 2005, and exceededliabilities in the amount of $2,641,921 (i.e., net assets). Of the total net assets,$1,988,567 was unrestricted and available to support short-term operations, with thebalance invested in capital assets, net of related debt, or restricted for capital activityand debt service. Total net assets increased by $150,000.

• User fee revenues (water sales) for the fiscal year ending December 31, 2005 were$378,649.

• The Waterworks District's operating expenses, consisting of those expenses resultingfrom the Waterworks District's ongoing operations totaled $375,538 for the fiscalyear ended December 31, 2005.

Overview of Annual Financial Report

Management's Discussion and Analysis (MD&A) serves as an introduction to the basicfinancial statements and supplementary information. The MD&A presents an overview ofmanagement's examination and analysis of the Waterworks District's financial condition andperformance.

The financial statements report information on the Waterworks District using full accrualaccounting methods similar to those used in the private business sector. Financial statementsinclude the Statement of Net Assets, Statement of Revenues, Expenses, and Changes in NetAssets, and the Statement of Cash Flows. The Statement of Net Assets provides informationabout the nature and amount of the Waterworks District's resources and obligations at year-end, and provides a basis for evaluating the capital structure of the Waterworks District andassessing the liquidity and financial flexibility of the Waterworks District.

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December 31,2005

The Statement of Revenues, Expenses, and Changes in Net Assets, accounts for the revenuesand expenses for the fiscal year, and provides information on how net assets changed duringthe year. This statement measures the success of the Waterworks District's operations in aformat that can be used to determine if the Waterworks District has recovered its coststhrough user fees and other charges.

The Statement of Cash Flows reports cash receipts, cash payments, and net changes in cashresulting from operations, investing, and financing activities, and provides information on thesource of cash receipts, what the cash was used for, and the total change in cash for thereporting period.

The notes to the financial statements provide required disclosures essential to anunderstanding of the financial statements. The notes present information about theWaterworks District's accounting policies, significant account balances and activities,commitments, contingencies, and subsequent events, if any. Supplementary informationincludes schedule of commissioners and per diem paid to each, summary accounts receivableinformation, water rates and a schedule of insurance.

Financial Analysis

The purpose of financial analysis is to help determine whether the Waterworks District isbetter off as a result of the current year's activities. In this analysis, data from two of the basicfinancial statements, the Statement of Net Assets, and the Statement of Revenues, Expenses,and Changes in Net Assets, are presented below in condensed format. These statementsreport the net assets, the difference between assets and liabilities, and the change in netassets, which provides information for indicating the financial condition of the WaterworksDistrict. Following these statements is a separate schedule summarizing and analyzing budgetchanges for the current fiscal year.

Condensed Statement of Net Assets

December 31,2005 December 31, 2004Current assets $ 1,287,588 $ 1,076,817Restricted assets 217,839 157,658Fixed assets (net) 3,438,271 1,862,107Deferred charges 22,506 23.546

Total Assets $4.966.204 S3.120.128

Current liabilities $9,979 $8,457

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December 31,2005

December 31, 2005 December 31, 2004Current liabilities (payable from

restricted assets) 113,009 82,170Long term debt 2.201.296 642,480Total Liabilities 2,324,284 733,107Net Assets 2,641.920 2.387,021

Total Liabilities and Net Assets $4.966,204 S3.120.128

Current assets include current assets for operations, receivables and prepaid expenses.Restricted assets include cash and certificates of deposit restricted for bond indentures andcustomer deposits.

Capital Assets increased by $1,576,165 in 2005. Improvements in progress and equipmentadditions were $1,640,973 and depreciation of $64,809 is reflected as net capital additions of$1,576,165.

Total long-term debt decreased by $24,444 for principal payments and increased $742,000for advances on 2005 Revenue Bonds for a net change at December 31, 2005, to $ 1,370,411.

Condensed Statement of Revenues, Expenses, and Changes in Net Assets

December 31.2005 December 31. 2004Operating revenue $ 378,649 $ 353,724Operating expenses 375,538 333.696

Operating Income 3,111 20,028Nonoperating Income (net) 146,889 71,984

Change in Net Assets 150,000 92,012

Net Assets, Beginning of Year 1,958,390 1.866.378Net Assets, End of Year S2.108.39Q Sl.958.390

While the Balance Sheet shows the change in financial position of net assets, the Statementof Revenues, Expenses, and Changes in Net Assets provides answers to the nature and scopeof these changes. The above table shows an increase in net assets of $150,000 for the fiscalyear ending December 31, 2005, as does the Condensed Balance Sheet on the prior page.

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December 31,2005

The Waterworks District's total revenues include the sales of water, connection fees, tap feesand late charges.

The Waterworks District's major operating expenses include depreciation expense, insurance,wages and retirement, professional fees, supplies and utilities. Nonoperating income includesad valorem tax, state revenue sharing, rent and interest and nonoperating expenses includeinterest expense.

Other Significant Account Changes and Financial Trends

One key measure of a Waterworks District's profitability, and the ability to generate positivecash flows, is the ability of the water system to collect accounts receivable on a timely basis.Presented below is an aged receivable listing for the fiscal years ending December 31.

December 31.2005 December 31. 20040 - 30 Days Past Due $28,034 $35,03431 - 60 Days Past Due 6,719 2,515Over 60 Days Past Due 3,812 236Total Accounts Receivable(Before Allowance for Bad Debts) 38,989 37,785Allowance for Bad Debts (506) (1,134)Unbilled services 8,382 8,572Total Accounts Receivable $46.865 S45.223

Total receivables for water service remained fairly constant reflecting the WaterworksDistrict's efforts in collecting bills and in writing off accounts as they become past due. Pastdue accounts are referred for collection. Increases in receivables are primarily for billingservices provided by the Waterworks District,

Capital Assets

At the end of the fiscal year ending December 31, 2005, the Waterworks District had$3,438,271 (net of accumulated depreciation) recorded in capital assets. This includes watersystems and improvements in the Kolin-Ruby Wise area.

Other significant capital assets include the Waterworks District's investment for the officebuilding and storage for water system equipment and supplies, land owned for the officebuilding site and for water well locations, and equipment and machinery, including vehicles,for water system operation. The changes in capital assets are presented in the table below.

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December 31,2005

December 31, 2005 December 31, 2004

LandWater Distribution SystemSoftwareVehiclesImprovements in ProgressSubtotalLess: Accumulated Depreciation

Net Capital Assets

Long-Term Debt Activity

$14,3792,762,712

2,99527,740

1,669,2404,477,066(1,038,794)

$14,3792,756,432

2,99527,74034,547

2,836,093(973,986)

$3,438.271 $1.862.107

The primary source of long-term financing for the Waterworks District water systemimprovements is revenue bonds financed by the United States Department of Agriculture,Rural Utilities Service (RUS). Interest rates for long-term debt financed through RUS atDecember 31, 2005, range from 4% to 5.4%, with initial payment terms for bonds generallyat 40 years. Bonds financed for the Waterworks District do not generally require a specificdebt to net income or net cash flow ratio, but bond restrictions do state that the WaterworksDistrict must set its water rates at a level necessary to fund debt service requirements and topay for the normal operating expenses of the Waterworks District.

In 2005 the Waterworks District issued $742,000 in new water revenue bonds and $850,000in general obligation bonds to finance water improvements that will be added during 2005 atan estimated completed cost of $2,165,000. The additional funding will be in the form of agrant from the United States Department of Agriculture, Rural Utilities Service (RUS) for$573,000. This addition will add approximately 15 miles of new water lines with firehydrants and an elevated tank.

Requests for Information

This financial report is designed to provide a general overview of Kolin-Ruby WiseWaterworks District No. 11A of Rapides Parish, Louisiana's finances and to demonstrate theWaterworks District's accountability. If you have questions regarding this report or needadditional information, contact the Waterworks District at P. O. Box 3100, Pineville, LA71361. The phone number for the Waterworks District is (318) 445-4178.

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ADLER(_:Ji[iJliL'li'M J'-U^L-^LA^'^'l- 'NTANTS

William A. Paddie, CPA 201° Gus KaPlan Drive MembersW. Stephen Pearce, CPA Alexandria, Louisiana 71301-3358 American Institute of

Paul W. Blais, CPA * Certified Public Accountants4 Phone (318) 445-9342 t

Fax (318) 445-9344 Sodety of Lou(sjana

„ . Certified Public AccountantsWriter's email: [email protected]

INDEPENDENT AUDITOR'S REPORT

To the Board of CommissionersKolin-Ruby Wise Water District 11A(A Component Unit of the Rapides Parish Police Jury)Pineville, LA 71360

We have audited the accompanying financial statements of the business-type activities ofKolin-Ruby Wise Water District 11 A, as of and for the year ended December 31, 2005,which collectively comprise the Water District's basic financial statements as listed in thetable of contents. These financial statements are the responsibility of the Kolin-RubyWise Water District 11 A's management. Our responsibility is to express an opinion onthese financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all materialrespects, the respective financial position of the business-type activities of Kolin-RubyWise Water District 11 A, as of December 31, 2005, and the respective changes infinancial position and cash flows, where applicable, thereof for the year then ended inconformity with accounting principles generally accepted in the United States ofAmerica.

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In accordance with Government Auditing Standards, we have also issued our report datedJune 20, 2006, on our consideration of Kolin-Ruby Wise Water District 11 A's internalcontrol over financial reporting and on our tests of its compliance with certain provisionsof laws, regulations, contracts, and grant agreements and other matters. The purpose ofthat report is to describe the scope of our testing of internal control over financialreporting and compliance and the results of that testing and not to provide an opinion onthe internal control over financial reporting or on compliance. That report is an integralpart of an audit performed in accordance with Government Auditing Standards andshould be considered in conjunction with this report in considering the results of ouraudit.

The management's discussion and analysis information on pages 1 through 6 are not arequired part of the basic financial statements but are supplementary information requiredby accounting principles generally accepted in the United States of America. We haveapplied certain limited procedures, which consisted principally of inquiries ofmanagement regarding the methods of measurement and presentation of the requiredsupplementary information. However, we did audit the information and express noopinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statementsthat collectively comprise Kolin-Ruby Wise Water District 11 A's basic financialstatements. The financial information listed as supplemental data in the table of contentsis presented for purposes of additional analysis and is not a required part of the financialstatements of Kolin-Ruby Wise Water District 11 A. All of the supplemental data hasbeen subjected to the auditing procedures applied in the audit of the financial statementsand, in our opinion, is fairly stated in all material respects, in relation to the financialstatements taken as a whole.

Adler and Pias, LLP

June 20, 2006

William A. Paddie, CPA 201° Gus KaP|an Drive MembersW. Stephen Pearce, CPA Alexandria, Louisiana 71301-3358 American Institute of

Paul W. Blais, CPA * Certified Public Accountants^ Phone (318) 445-9342 ^

Fax (318) 445'9344 Society of Louisiana„ ,,. Certified Public Accountants

Writer's email: WAPaddie@ao!.com

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REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON ANAUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS

To the Board of CommissionersKolin-Ruby Wise Waterworks District No. 11A(A Component Unit of the Rapides Parish Police Jury)PineviIle,LA71360

We have audited the financial statements of the business-type activities of Kolin-RubyWise Water District 11A a component unit of the Rapides Parish Police Jury, as of andfor the year ended December 31, 2005, which collectively comprise the water district'sbasic financial statements and have issued our report thereon dated June 20, 2006. Weconducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Kolin-Ruby Wise Water DistrictHA's internal control over financial reporting in order to determine our auditingprocedures for the purpose of expressing our opinions on the financial statements and notto provide assurance on the internal control over financial reporting. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters inthe internal control that might be material weaknesses. A material weakness is areportable condition in which the design or operation of one or more of the internalcontrol components does not reduce to a relatively low level the risk that misstatementscaused by error or fraud in amounts that would be material in relation to the financialstatements being audited may occur and not be detected within a timely period byemployees in the normal course of performing their assigned functions. We noted nomatters involving the internal control over financial reporting and its operation that weconsider to be material weaknesses.

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Compliance and Other Matters

As part of obtaining reasonable assurance about whether Kolin-Ruby Wise Water District1 lA's financial statements are free of material misstatement, we performed tests of itscompliance with certain provisions of laws, regulations, contracts, and grant agreements,noncompliance with which could have a direct and material effect on the determinationof 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 anopinion. The results of our tests disclosed no instances of noncompliance that arerequired to be reported under Government Auditing Standards.

This report is intended solely for the information and use of the Board of Commissionersand management and is not intended to be and should not be used by anyone other thanthese specified parties.

Adler and Pias, LLP

June 20, 2006

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Of Rapides Parish, Louisiana(A Component Unit of the Rapides Parish Police Jury)

Statement of Net Assets-Proprietary FundDecember 31, 2005

Assets

Current AssetsCash $119,840Certificates of Deposit 960,763Receivable(net of allowance for doubtful accounts) 185,872Prepaid Expenses __2_1 /113

Total Current Assets "" ~ "" $1,287,588

Restricted AssetsCash 166,163Certificates of Deposit 51,676

Total Restricted Assets " 217,839

Fixed Assets(net of accumulated depreciation) 3,438,271

Deferred ChargesRevenue Bond Issue Costs 22,506

Total Assets $4,966,204

Liabilities and Net Assets

Current Liabilities (payable from current assets)Accounts Payable and Accrued Expenses $3,927Retirement Payable I-LPJ??

Total Current Liabilities (payable from cuurent assets) $9,979

Current Liabilities (payable from restricted ssets) 113,009

Long-Term DebtGeneral Obligation Bonds Payable 850,000Revenue Bonds Payable 1,351,296

Total Liabilities 2,324,284

Net AssetsContributed Capital 533,531Reserved for Debt Service $119,823Unreserved 1,988,567 2,108,390

Total Net Assets """ " " " " 2,641,921

Total Liabilities and Net Assets $4,966^04

The accompanying notes are an integral part of these financial statements.

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Statement of Revenues, Expenses, andChanges in Net Assets-Proprietary FundFor the Year ended December 31, 2005

Operating RevenuesWater Sales and Tap Fees $357,816Late Charges and Connection Fees 20,833

Total Operating Revenues

Operating ExpensesAmortization 1,040Auto Expense 4,979Bond Fees 95Chemicals 6,714Collection Expense 1,583Contract Labor 1,215Depreciation 64,809Dues and Subscriptions 1,477Equipment Rent 4,478Fuel and Oil 11,006Garbage Collection 1,090Insurance 31,077Office Supplies 4,175Payroll Taxes 1,692Per Diem - Board Members 6,000Postage and Freight 4,835Professional Fees 15,985Repairs and Maintenance 14,916Retirement Expense 14,511Salaries 114,179Supplies 25,423Taxes and Licenses 4,659Telephone 6,094Utilities 32,180Administrative and General 1,328

Total Operating Expense

Operating IncomeNonoperating Revenues(Expenses)

Ad Valorem Taxes 142,633State Revenue Sharing 1,099Interest Income 26,864Interest Expense (30,707)Rental Income 7,000

Total Nonoperating Revenues(Expenses)

Change in Net Assets

Net Assets, Beginning of Year

Net Assets, End of Year


$378,649

375,538

3,111

146,889

150,000

1,958,390

$2,108,390

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Statement of Cash Flows-Proprietary FundFor the Year ended December 31 , 2005

Cash Flows From Operating ActivitiesCash Received from Customers 377,635Cash Paid to Suppliers for Goods and Services (194,197)Cash Paid to Employees for Services (114,179)

Net Cash Provided by Operating Activities 69,259

Cash Flows From Noncapital Financing ActivitiesTax Receipts Collected by Other

Governmental Agency 79,836State Revenue Sharing __

Net Cash Provided by Noncapital Financing Activities 80,935

Cash Flows From Capital and Related Financing ActivitiesCash Payments for Purchase of Capital Assets (1 ,640,973)Principal Payments on Bonds (24,444)Grant Income 104,900Loan Proceeds 1,592,000Interest Paid (10,297)

Net Cash Provided by Capital and Related Financing Activities 21,186

Cash Flows From Investing ActivitiesInterest Income 26,864Rental Income 7,000Purchase of Certificates of Deposit (100,000)

Net Cash Used by Investing Activities (66,1 36)

Net Change in Cash 105,244

Cash at Beginning of Year 180,761

Cash at End of Year .

Reconciliation of Operating Income to Net Cash Provided byOperating ActivitiesOperating Income $3,11 1Adjustments to Reconcile Net Income to Net

Cash Provided by Operating ActivitiesDepreciation 64,809Amortization 1,040

Change in Assets and Liabilities:Customer Receivables (1,014)Prepaid Expenses (1,270)Allowance for Doubtful Accounts (628)Customer Deposits 1 ,689Accounts and Misc. Payables J-5?2 66,148

Net Cash Provided by Operating Activities 69,259


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Note 1 - Summary of Significant Accounting Policies

The Kolin-Ruby Wise Waterworks District No. 11 A(the Waterworks District) was created bythe Rapides Parish Police Jury, as authorized by Louisiana Revised Statute 33:3811. The WaterworkDistrict is governed by a five-member board of commissioners who are residents of and own realestate in the Waterworks District. The board members are compensated for meetings attended.The board is appointed by the Jury and is responsible for providing water service to approximately1,300 users within the boundaries of the Waterworks District. The Waterwork District employs fourfull-time employees.

The following is a summary of significant accounting policies.

A. Basis of Presentation

The accompanying financial statements have been prepared in conformity with generallyaccepted accounting principles applicable to state and local governments. Generally acceptedprinciples for local governments include those principles prescribed by the Government AccountingStandards Board (GASB), the American Institute of Certified Public Accountants in the publicationentitled "Audits of State and Local Government Units" and by the Financial Accounting StandardsBoard (FASB), when applicable. As allowed under GASB Statement No. 20, the Waterworks Districthas elected to follow (1) all GASB pronouncements and (2) all FASB Statements and Interpretations,APB Opinions and ARBs, no matter when issued, except those that conflict with GASB pronounce-ments.

B. Financial Reporting Entity

GASB No. 14, The Reporting Entity, established criteria for determining the governmentalreporting entity and component units that should be included within the reporting entity. For financialreporting purposes, in conformance with GASB Codification Section 2100, the Waterworks Districtincludes all funds that are within the oversight responsibility of the Waterwork District. The WaterworkDistrict is a component unit of the Rapides Parish Police Jury. Certain units of local government overwhich the Waterworks District exercises no oversight responsibility, such as the police jury, parishschool board, other independently elected officials, and municipalities within the parish, are excludedfrom the accompanying financial statements. These units of government are considered separatereporting entities and issue financial statements separate from those of the Waterworks District.

C. Fund Accounting

The Waterworks District uses a proprietary-enterprise fund to report on its financial positionand results of operations. Fund accounting is designed to demonstrate legal compliance and to aidfinancial management by segregating transactions related to certain government functions oractivities.

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Note 1 - Summary of Significant Accounting Policies, Continued

A proprietary-enterprise fund is used to account for activities similar to those found in theprivate sector, where the determination of net income is necessary or useful to sound financialadministration. Goods or services from such activities are provided by the Waterworks District tooutside parties, the cost of which is recovered primarily through user fees.

D. Basis of Accounting

All proprietary funds are accounted for on a flow of economic resources measurementfocus and a determination of net income and capital maintenance. With this measurement focus,all liabilities associated with the operation of these funds are included on the statement of net assets.The proprietary funds use the accrual basis of accounting. Operating revenues are recognized whenearned, and expenses are recognized at the time the liabilities are incurred. Inventory of suppliesis carried at cost, on the first-in, first-out method.

Ad valorem taxes are accounted for using the modified accrual basis of accounting, whereby,revenues are recognized when they become measurable and available as net current assets(within sixty days after year-end). Taxes paid under protest in years prior to 2004 are retained inescrow by the Rapides Parish tax collector and are not recorded as income until released to theWaterworks District after completion of favorable litigation. In 2005 the tax collector withheld $1,482from the Waterworks District of current protested taxes.

E. Cash

Cash includes amounts in demand deposits and bank money market accounts.

F. Fixed Assets

All fixed assets and infrastructure assets are stated at historical cost. Depreciation of allexhaustible assets is charged as an expense against operations. Depreciation is calculated usingthe straight-line method over the estimated useful lives of the assets.

G. Bad Debts

Uncollectible amounts due for customers' utility receivables are recognized as bad debtsthrough the establishment of an allowance for doubtful accounts.

H, Contributed Capital

Grant funds received from federal and state agencies restricted for use in financing capitalimprovements are not reflected as revenues. They are recorded in fund equity as contributed capital.

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Note 1 - Summary of Significant Accounting Policies, Continued

/. Budget

A budget has been adopted for the USDA, however, budgets for proprietary funds arenot required by Louisiana law.

J. Net Assets - Reserved

Net assets are reserved for the difference between restricted assets for revenuebond retirement and the liabilities payable from those assets.

K. Estimates

The preparation of financial statements in conformity with generally accepted accountingprinciples requires management to make estimates and assumptions that affect certain reportedamounts and disclosures. Accordingly, actual results could differ from those estimates.

L. Deferred Charges

The cost of issuing revenue bonds in 1998 was deferred and is being amortized and chargedto expense over the life of the bonds.

M. Accrued Unbilled Revenue

During the year, customer water meters are read and bills rendered throughout monthlyperiods. Because there are approximately ten days of unbilled water usage at the end of eachmonth, revenue for water distributed but not yet billed is accrued at fiscal year-end to matchrevenues with related expenses.

Note 2 - Cash and Certificates of Deposit

Under state law, the Waterworks District may deposit funds within a fiscal agent bankorganized under the laws of the State of Louisiana, the laws of any other state in the Union, or thelaws of the United States. The Waterworks District may invest in United States bonds, treasurynotes, or certificates and time deposits of state banks organized under Louisiana law and nationalbanks having principal offices in Louisiana.

At December 31, 2005, the Waterworks District had cash (in checking and bank moneymarket accounts) and certificates of deposit as follows:

Demand Deposits(includes $166,163 of restricted assets) $285,903Petty Cash 100Certificates of Deposit(greater than 90 days maturity) 1,012,439

$1,298,442

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Note 2 - Cash and Certificates of Deposit, Continued

These deposits are stated at cost, which approximates market value. Under state law, thesedeposits (or resulting bank balances) must be secured by federal deposit insurance or the pledge ofsecurities owned by the fiscal agent bank. The market value of the pledged securities plus thefederal deposit insurance must equal the amount on deposit with the fiscal agent. Cash and C.D.'sat December 31, 2005 are as follows:

Bank Balances $1^298,342

Federal Deposit Insurance $300,000Pledged Securities(uncollateralized) 1,114,942

Total Insurance and Pledged Securities ...$1._414,942

Even though the pledged securities are considered uncollateralized under the provisionsof GASB Statement 3, Louisiana Revised Statute 39:1229 imposes a statutory requirement on thecustodial bank to advertise and sell the pledged securities within 10 days of being notified by theWaterworks District that the fiscal agent has failed to pay deposited funds upon demand.

Note 3 - Receivables

The following is a summary of receivables at December 31, 2005:

Water Sales:Billed Services $38,989Unbilled Services 8,382 $47,371Less: Allowance for Doubtful Accounts (506)

46,865Ad Valorem Taxes 139,007

Total $185,872

Note 4 - Restricted Assets

Certain proprietary - enterprise fund resources are classified as restricted assets on thestatement of net assets because their use is restricted by applicable bond covenants or for other legalpurposes. The "Revenue Bond Sinking Fund" account is used to accumulate monies to be usedfor debt service payments within the next twelve months. The "Depreciation and Contingency Fund"account is used to provide for extensions, additions, improvements, renewals and replacementsnecessary to properly operate the Waterworks District. The "Revenue Bond Reserve Fund" isused to report resources set aside to make up potential future deficiencies in the Revenue BondSinking Fund Account. Customers' deposits are not associated with the revenue bond indenture.However, these are required deposits from customers to insure against nonpayment of billings orproperty damage.

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Note 4 - Restricted Assets, Continued

Amounts included in the above listed accounts are as follows:

Revenue Bond Sinking Fund $59,600Depreciation and Contingency Fund 17,103Revenue Bond Reserve Fund 89,460Customers' Deposits 51,676

$217,839

The balance of all three accounts associated with the revenue bonds were in compliancewith the bond indenture.

Note 5 - Fixed Assets

A summary of changes in fixed assets for the year ended December 31, 2005 follows:

Balance Additions BalanceJanuary 1, And December 31,_2005 Transfers 2005

Land $14,379 -0- $14,379Water System and Equipment 2,756,432 6,280 2,762,712Software 2,995 -0- 2,995Vehicles 27,740 -0- 27,740Improvements in Progress 34A47 1,634,693 1,669,240

2,836,093 " 1,640;973 4,477,066Less Accumulated Depreciation (973,986) (64,809) (1,038,794)

Total Fixed Assets $1,862,10.7 $1,576,165 $3,438,271

Depreciation Expense for the year ended December 31, 2005 is $64,809.

Note 6 - Long-Term Debt

On February 11, 1998, the Waterworks District issued $285,000 of water revenue bonds(Series 1998A), secured by revenues to be derived from the operation of the waterworkssystem. The bonds were issued to partially finance improvements to the system; specifically,the aeration and pumping facilities project. The serial bonds carry interest rates of 4.0% to5.4% and mature between February 1, 1999 and February 1, 2023.

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-18-Koiin-Ruby Wise Waterworks District No. 11A



Note 6 - Long-Term Debt, Continued

On June 17, 1998, the Waterworks District issued $429,000 of water revenue bonds (Series1998B) secured by revenues to be derived from the operation of the water system. A single fullyregistered bond was delivered to the United States Department of Agriculture, Rural DevelopmentOffice, The bond was issued to partially finance improvements to the system; specifically theaeration and pumping facilities project, and is on parity in all respects with the (Series 1998A) bondissue. The bond carries an interest rate of 4.75%. Principal and interest is due in semiannualpayments of $12,136 beginning February 1, 2000 and continuing through February 1, 2038.

In 2005 the Waterworks District issued $742,000 in new water revenue bonds and $850,000in general obligation bonds (Series 2005) secured by revenues to be derived from the operationof the water system. The registered bonds were delivered to the United States Department ofAgriculture, Rural Development Office. The bonds were issued to finance water system improve-ments. The bonds carry interest rates of 4.25%.

The following is a summary of debt transactions for the year ended December 31, 2005:

Debt Payable, Beginning of YearAdvancesRetirementDebt Payable, End of Year

The future annual requirements to

Year200620072008200920102011-20232024-20382039-2045

Total

Less Interest

Principal

RevenueBonds1998A$255,000

-0-(5,000)

__$250,ppp

amortize long-term debt

RevenueBonds1998A

22,93822,45021,95521,45520,950

278,820-0--0-

$388,568

($138,568)

$250,000

RevenueBonds1998B$397,855

-0-(2,414)

$395,441

are as follows:

RevenueBonds1998B

24,16024,16024,16024,16024,160

314,080326,160

-0-$761JD40

($365,599)

$395,441

RevenueBonds2005

-0-$742,000

(17,030)$72_4,970

RevenueBonds2005

35,33439,13339,13339,13339,133

508,730547,863253,386

$i,501,846

($776,876)

$724,970

Total$652,855$742,000($24,444)

$1,370,411

Total82,43285,74385,24884,74884,243

1,101,630874,023253,386

$2,651,453

($1,281,042)

$1,370,411

All sinking fund requirements have been funded in advance(see note 4).




Note 7 - Liabilities Payable From Restricted Assets

The amounts payable from restricted assets, referred to in Note 4, are as follows:

Customer Deposits $54,639Revenue Bonds Payable (Series 1998A) - Current Portion 10,000Revenue Bonds Payable (Series 1998B) - Current Portion 5,316Revenue Bonds Payable (Series 2005) - Current Portion 3,799Accrued Interest on Bonds 39,255

$113,009

Note 8 - Retirement Plan

Substantially all employees are members of the Parochial Employees Retirement System(the system), a cost sharing multiple-employer, public employee retirement system (PERS),controlled and administered by a separate board of trustees. The system is composed of two districtplans (Plan A and Plan B). All participating Waterworks District employees are members of Plan A.

The system provides retirement, death and disability benefits to plan members andbeneficiaries. Benefits are established by state statute.The system issues a publicly availablefinancial report that includes financial statements and required supplementary information. That reportmay be obtained by writing to Parochial Employees Retirement System, PO Box 14619, BatonRouge, LA 70898-4619 or by calling (225) 928-1361.

Covered employees are required by state statute to contribute 0.0 percent of their salaryto the plan. The Waterworks District is required by state statute to contribute 0.00 percent. Contributionrates have remained the same for the current and prior two years. In addition, contributions to theSystem include one-fourth of one percent of the taxes shown to be collected by the sheriff of eachrespective parish, except Orleans and East Baton Rouge Parishes. The Waterworks District'scontribution to the system for the year ended December 31, 2005 was $14,511.

Note 9 - Ad Valorem Taxes

Ad valorem taxes attach as an enforceable lien on property as of January 1 of each year.Taxes are levied by the Waterworks District in September or October and are billed to the taxpayersin November. Billed taxes become delinquent on January 1 of the following year.

For the year ended December 31, 2005, taxes of 4.36 and 3.25 mills were levied on propertywith approximate assessed valuations totaling $19,648,688 and were dedicated respectively togeneral maintenance and bond issuance of the water system.

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Note 10 - Vacation and Sick Leave

Employees of the Waterworks District, depending on their length of service, earn from one totwo weeks of noncumulative vacation leave each year, and all employees are granted five days ofsick leave annually, with a maximum accumulation of fifteen days. At December 31, 2005, there areno material accumulated and vested benefits relating to vacation and sick leave that should beaccrued or disclosed to conform with generally accepted accounting principles.

Note 11 - Risk Management

The Waterworks District is exposed to various risks of loss. It is the policy of the WaterworksDistrict to purchase commercial insurance for the risks of loss to which it would be exposed. In thepast year, there have been no claims or settlements in excess of insurable limits.

Note 12 - Concentrations of Credit Risk

Credit risk for accounts receivable from water sales is concentrated because substantiallyall of the balances are receivable from customers located within the same geographic region.Future water sales are dependent on the economic and weather conditions in the area serviced bythe Waterworks District.

IIIIII• Kolin-Ruby Wise Waterworks District No. 11A

' Supplemental Information

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11

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Kolin-Ruby Wise Waterworks District No. 1 1 AOf Rapides Parish, Louisiana

(A Component Unit of the Rapides Parish Police Jury)For the Year Ended December 31 , 2005

1 . Schedule of Commissioners1

Name Office Held Term AttendedRusselfBelT " President 11/08/2009 12223 Estate DrivePO Box 44 11Pineville, LA 71361(318)448-3676

John Voohries Vice President 1 1/08/2004 13PO Box 4Ruby, LA 71 365(318)442-5072

Arthur McKneely Secretary 07/08/201 1 12556 Williams Lake RoadPineville, LA 71 360(318)443-5565

James Kees Commissioner 07/08/2007 133625 Hwy 107Pineville, LA 71 360(318)442-3716

Les West Commissioner 07/13/2010 55637 Pinekraft DrivePineville, LA 71 360(318)443-0753

Total

2. Accounts ReceivableCurrent $28,45830 -60 days 6,719Over 60 days 3,812

Total $38,989

3. Water Rate ScheduleResidential Rate0-2,000 gallons $10.00$2.55 for each additional thousand.

Commercial Rate0-10,000 gallons $29.00$2.55 for each additional thousand.

There were 1,298 residential and 20 commercial users on the system at December

-21-

Per Diem$1,200

$1,300

$1,200

$1,300

$500

". $5,500

31,2005.

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• (A Component Unit of the Rapides Parish Police Jury)•i C(-»r tl-,,-i V^or Cnrtart ria*-orv»K,-ir ^ H OnHC:

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For the Year Ended December 31, 2005Schedule of Findings and Questioned Cost

Part 1 Summary of Auditor's Results

Financial Statements

Auditor's Report

An unqualified opinion has been issued on the Waterworks District's basic financialstatements as of and for the year ended December 31, 2005.

Reportable Conditions

There were no reportable conditions in internal control over financial reporting required to bedisclosed during the audit of the financial statements.

Part 2 Compliance

There were no reportable conditions in compliance over financial reporting required to bedisclosed during the audit of the financial statements.

Documents

06JUN30 PHI2:li3 I - app1.lla.la.govapp1.lla.la.gov/PublicReports.nsf/B723EA559367F42D862571BE00245E19/...I I I I I I I I I I I I I I I I I I I-1-Kolin-Ruby Wise Waterworks District