Northwest Harris County Municipal Utility District No. 5 ...€¦ · 14700 • Transfer &otn Construction Total Other Income Other Expense 16910 • Hurricane Hanrey Expenses 19100

Northwest Harris County Municipal Utility District No. 5

Information Required by Section 26.18, Texas Tax Code

Date: January 2, 2020

(1) Name of each member of the governing body:

Jeff P. CollinsLarry L. MilbergerJames AdamsCharles FischerH. Bruce Gallun

(2) Mailing address, e-mail address, and telephone number:

2727 Alien Parkway, Suite 1100Houston, Texas 77019713-652-65009403 3 (%smithmur.com

(3) Official contact information for each member of the governing body:

Same as Item (2) above.

(4) District's budget for the preceding two years:

See Attached.

(5) Proposed or adopted budget for the current year:

See Attached.

(6) Change in amount of District budget from the preceding year to current year, by dollaramount and percentage:

2019 Budget$12,118,510

2020 Budget$11,845,519

Change in Budget Percentage of Change-$272,991 -2.25%

(7) Amount of property tax revenue budgeted for maintenance and operations for thepreceding 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 thecurrent year:

The District does not budget for debt service.

940333-002 461056vl

(9) Tax rate for maintenance and operations adopted by the taxing unit for the preceding tworears:

2019: $0.17

2018: $0.09

(10) The tax rate for debt service adopted by the taxing unit for the preceding two years:

2019: $0.59

2018: $0.68

(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.

940333-002 461056vl

f

Northwest Harris County MUD No. 5Budget - Fiscal Year 2018

8/1/17 - 7/31/18

10 Month

Actuals

Ordinary Income/ExpenseIncome

14101 • Water - Customer Service Revenu

14102 • Siirface Water - Reserve

14103 • NHCRWA - Credit14140 • Coaaecdon Fees14201 - Sewer - Customer Service Fee

14220 • Inspecdoa Fees14301 • Tap Connections14330 • Miscellaneous Income

14380 - Interest Earned on Checking14410 • Maintenance Tax Collections

14415 • Penalties & Interest14420 • Sales Tax Rebates

14602 • Interest Earned oa Terup. Invest14603 • Insurance Reiinbursement

Total Income

Expense16101 • Operator Fees16103 • NHCRWA" Ground Water16104 • NHCRWA - Surface Water16105 • Generator Rental16106 • Maintenance & Repairs - Water16107 • Cheinicals - Water

16108 -Laboratory Expense - Water16109 • Utilities - Water

16110 • Permit Expense16111 • Insurance & Surety Bond16112 • Mowing - Water16115 • Meter Replacement16116 • TCEQ Assessment16118 • WP2 - Road Maintenance

16119 • Telephone - SCADA16160 • Telephone Expense - Water16210 • Inspection Expense16211 • Website Expense16214 • Garbage Expense16218 • Sludge Removal16219 • Purchase Sewer Service16220 • UtiUties - Sewet

16230 • Maintenance & Repairs - Sewer16240 • Chemicals - Sewer16250 - Lab Fees - Sewer

16260 • Telephone Expense - Sewer16270 • Mowing - Sewer16280 • Dumpster Expense - Sewer16310 • Tap Comiection Expense16320 • Landscaping - Esplanade16370 • Election Expense16401 • Auditing Fees

$1,970,3322,167,225

54,16223,494

1,926,475108,850599,991

1,4741,216

1,102,051103,35123,15929,05910,552

8,121,391

130,5321,505,977

502,9682,541

554,60088,26921,696

146,80321,28162,4619,091

11,61618,641

0

21,2769,276

60,9592,445

806,00847,672

208,752193,727441,27414,60018,78516,3779,7696,166

281,91423,558

0

30,400

12 Month

Estrmate

2,364,3982,600,670

64,99528,193

2,311,769130,620719,989

1,7691,459

1,110,000124,02227,79134,87012,662

9,533,207

156,6381,807,173

603,5617,423

665,519105,92326,035

176,16325,53762,461

10,91013,93918,64.1

0

25,53111,13173,1512,445

. 967,21057,206

250,503232,472529,52917,52022,54219,652.11,7237,399

338,29728,269

0

30,400

ApprovedBudget

$2,484,0002,627,900

65,00030,000

2,462,50098,500

654,7002,5001,500

1,005,900139,00025,80018,000

09,615,300

168,7001,823,700

596,3007,700

741,700128,70033.300

154,50071,30062,4619,400

10,10018,6415,000

25,600

10,900

66,0002,500

977,60057,700

242,400264,400539,30014,30021,600

23,30011,0006,500

346,10047,500

0

30,400

2018 ApprovedBudget

$2,553,5002,863,944

65,00031,000

2,542,946141.100777,600

1,8001,500

1,188,300125,30028,00050,000

0

10,369,990

170,0001,987,900

663,9007,700

741,000109,10026,800

181,40040,00064,30011,20014,40020,0005,000

26,30011,50075,4001,000

.1,025,00058,900

258,000264,000505,90018,00023,20020,20012,1007,600

372,10029,10010,00031,000

10 Mon.thActuals

16402 • Engineering Fees16405 - Legal Fees16450 • Legal Notices & Other Publ.16470 • Filing Fees16480 • Document Conversion

16503 • Bookkeeping Fees16504 • Detention Poad Maiutenance

16505 • Mowing/Maint. - Sp Cyp Esplanad16506 • Elev. Storage Tank Waiver16507 • Reused Water Study16509 • Security Expense16570 • AWBD Expense16602 • DeUvety Expense16605 • Postage16606 • Printing & Office SuppUes16608

16701Travel ExpenseDirector Fees

16702 • PayroU Expenses16703 • Arbitrage Expense16901 • Miscellaneous Expense

Total Expense

Net Ordiaary Incoine

Other Income/ExpenseOther Esqiense

19101 • Cap Outlay - Grant Watetline Re19102 • Cap Outlay - Bleach Conversion19103 • Cap Outlay - Rock Creek Sec 919104 • Capital Outlay - Park19105 • Cap Outlay - Rock Creek Erosion19105 • Cap Outlay - Telge Water Line Relocation

Total Other Expense

Other Inconie

Pdor Year Reserves

Total Other Income

130,452169,608

1,9454070

26,600100,091

06,959942

391,1382,695

981

30,52636,9201,207

15,1501,2084,6254,464

6,195,350

1,926,041

53,44456,7989,895

28,5020

0

148,639

00

12 MonthEstimate

156,543203,530

2,334488

0

31,920

120,1090

8,3511,130

492,9005,6951,178

36,63144,3041,448

18,1801,4494,6255,357

7,441,075

2,092,132

60,00056,7989,500

50,00000

176,298

0

0

ApprovedBudget

150,000205,700

3,900800

15,00034,600

120,0000

75,00030,000

492,9009,7001,900

38,90041,9003,000

18,9001,3003,3256,100

7,771,527

1,843,773

335,000154,200

9,50070,000

100,0000

668,700

00

2018 'ApprovedBudget

150,000205,700

3,900800

15,00028,600

120,0000

67,00029,000

613,0569,7001,200

37,00044,8001,500

18,4001,5003,3255,400

8,147,881

2,222,109

000

5,104,970300,000

1,500,000

6,904,970

5,104,970

5,104,970

Net Ordiaary Income $1,777,404 $1,915,835 $1,175,073 $422,109

^.Northwest Hards County MUD No. 5

Ajnaended Budget8/1/18 - 7/31/19

2019Buds

Ordinary lacome/ExpenseIncome

14100 • Transfer From Construction


14102 • Surface Water - Reserve

14103 • NHCRWA- Credit14140 • Connecdon Fees

14201 • Sewer - Custotner Service Fee

14220 • Inspection Fees14301 • Tap Connections14330 • Miscellaneous Income

14380 • Interest Earned on CheckingMaintenance Tax Collecdons

Penalties & Interest

Sales Tax Rebates

Interest Earned on Tenap. InvestInsurance Reimbursement

1441014415144201460214603

Total Income

Expense16101 • Operator Fees16103 • NHCRWA - Ground Water16104 • NHCRWA - Surface Water16105 • Generator Rental

16106 • Maintenance & Repairs - Water16107 • Chemicals - Water

16108 • Laboratoty Expense - Water16109 • UtiUties - Water16110 • Permit Expense161U • Insurance & Surety Bond161t2 • Mowing - Water16115 • Meter Replacenaent16116 • TCEQ Assessment16118 • WP2 - Road Maintenance

16119 • Telephone - SCADA16160 • Telephone Expense - Water16210 • Inspection Expense16211 • Website Expense16214 • Garbage Expense16218 • Sludge Removal16219 • Purchase Sewer Service

16220 • UtiUries - Sewer

16230 • Maintenance & Repairs - Sewer16240 • Chemicals - Sewer

16250 • Lab Fees- Sewer

16260 • Telephone Expense - Sewer16270 • Mowing - Sewer

0 *2,312,6003,528,500

65,00032,300

2,411,900193,000550,000

5802,000

1,376,888 *130,00038,400

141,5000

$10,782,668

156,0002,491,800

775,3007,700

590,000127,80018,600

181,40015,00071,60012,4005,0009,500

026,3008,400

147,5001,000

1,072,800145,000405,700218,700535,90045,90037,20014,20012,400

AmendedBudget

flWi;2,312,6003,528,500

65,00035,000

2,411,900193,000550,000

5802,000

.I,68S),;L88|130,00038,400

150,00012,342

$12,118,510

156,0002,491,800'775,300

7,700590,000127,80018,600

181,40015,00071,600.12,4005,0009,500

026,3008,400

147,5001,000

1,072,800145,000405,700218,700535,90045,90037,20014,20012,400 .

2019Budset

16280 • Dumpster Expense - Sewer16310 • Tap Connection Expense16320 • Landscape - Grant Rd Esplanade16320 • Landscaping - SC Esplanade16321 • Landscape - Louetta Rd Esplanade16370 • Elecdon Expense16401 • Auditing Fees16402 • Engineering Fees16405 • Legal Fees16450 • Legal Notices & Other PubL16470 • FiUng Pees16480 • Document Conversion

16503 • Bookkeeping Fees16504 • Detention Pond Maintenance

16506 • Elev. Storage Tank Waiver16507 • Reused Water Study16509 • Security Expense16570 • AWBD Expense16602 • DeUvery Expense16605 • Postage16606 • Printing & Office SuppUes16608 • Travel Expense16701 • Ditector Fees

16702 • PayroU Expenses16703 • Arbitrage Expense16704 • Smart Meters

16901 • Miscellaneous ExpenseTotal Expense

Net Ordinary IncomeOther Income/Expense

Other Income14700 • Transfer &otn Construction

Total Other Income

Other Expense

16910 • Hurricane Hanrey Expenses19100 • Capital Outlay.19104 • Capital Outlay - Park19105 • Cap Outlay - Rock Creek Erosion19106 • Cap Outlay - Telge WL Relocate19107 • Cap Outlay - TLN Det Pond Rehab

Total Other ExpenseNet Other Inconie

Net Income

9,400320,000

030,90050,000

0

32,000225,000205,700

1,0001,000

028,600

200,00000

640,4289,700

50041,30045,300

1,00018,4001,5007,000

0

10,3009,012,128

$1,770,540

7,783,2107,783,210

060,000

7,683,2100

*;;::'::.":

^'!WK*!ii.S

*:

AmendedBudget

9,400320,000

•;'i|?|a||00::30,90050,000

032,000

225,000205,700

1,0001,000

028,600

200,0000

M^QÔO^::;:%9,596;

9,700500

41,30045,3001.000

18,4001,5007000

::::Iioio0&:10,300

10,151,296$1,967,214

0

0

060,000

...,.,.,

0

'.;-"••^; '^^y^

f...;...;.:s:»:.:,

*p%

50,000 î'î^^50,000 *:;:?: '^.

7,843,210($60,000)

60,000($60,000)

$1,710,540 $1,907,214

**Reused Water - $1.8 Estimate Per Engineer

<•

Northwest Harris County MUD No. 5Budget

8/1/19 - 7/31/20

10 Month

Actuals

12 Month

Esdmate

Ordinary Income/Expenselacorue

14100 • Transfer From Construction


14102 • Surface Water - Reserve

14103 • NHCRWA - Credit14110 • Transfer from CPF - Smart Meter

14140 • Connection Fees

14201 • Sewer - Customer Service Fee

14220 • Inspecdon Fees14301 • Tap Connections14330 • Miscellaneous Income

14380 • Interest Earned on Checking14410 • Maintenance Tax Collections

14415 • Penalties & Interest

14420 • Sales Tax Rebates

14602 • Interest Earned on Temp. Invest14603 • Insurance Reitnbutseinent

Total Incoine

Expense16101 • Operator Fees16103 • NHCRWA - Ground Water16104 • NHCRWA - Surface Water

16105 • Generator Rental

16106 • Maintenance & Repairs - Water16107 • Chemicals - Water

16108 • Laboratory Expense - Water16109 • UriUries - Water16110 • Permit Expense16U1 • Insurance & Surety Bond16112 • Mowing - Water16115 • Meter Replacement16116 • TCEQ Assessment

16119 • Telephone - SCADA16t20 • Smart Meter CeUulat

16160 • Telephone Expense - Water16210 • Inspecdon Expense16211 • Website Expense

16214 • Garbage Expense16218 • Sludge Removal16219 • Purchase Sewer Service

16220 • UtiUties - Sewer

16230 • Maintenance & Repairs - Sewer16240 • Chemicals - Sewer

16250 • Lab Fees - Sewer

16260 • Telephone Expense - Sewer

28,670 28,6701,547,578 1,857,0932,687,995 3,517,171

54,163 65,0002,205,164 2,437,781

35,408 42,4891,985,200 2,382,240120,555 144,666335,110 402,13249,482 59,3791,762 2,114

1,692,118 1,692,1.18.151,517 181,82036,756 38,000

200,147 240,17712,342 12,342

$11,143,967 $13,103,192

130,0002,075,493

715,9120

804,26091,99019,132

151,69622,32169,05311,122

09,513

23,07319,8127,699

108,355379

999,13957,408

229,035152,338566,81832,27632,10513,118

156,0002,490,592

859,0950

965,112.110,38822,958

182,03626,78569,05313,347

09,513

27,68847,5489,238

130,0261,000

1,198,96676,544

305,381182,806680,18138,73242,80715,742

ApprovedBudget

02,312,6003,528,500

65,0001,000,000

35,0002,411,900

193,000550,000

5802,000

1,689,188130,00038,400

150,00012,342

$12,118,510

156,0002,491,800

775,3007,700

590,000127,80018,600

181,40015,00071,60012,4005,0009,500

26,3000

8,400147,500

1,0001,072,800

145,000405,700218,700535,90045,90037,20014,200

2020 ApprovedBudget

02,042,8003,798,500

65,000362,21946,700

2,501,400160,000450,000

2,2002,100

1,872,100183,60038,400

320,5000

$11,845,519

156,0002,689,800

927,8007,700

975,200113,70023,600

187,50027,60071,10013,700

09,800

28,50049,0009,500

133,9001,000

1,294,900100,000314,500188,300577,30042,00044,100

16,200

16270 • Mowing - Sewer16280 • Duinpster Expense - Sewer16310 • Tap Connection Expense16311 • Landscape - Grant Rd Esplanade16320 • Landscaping - SC Esplanade16321 • Landscape - Louetta Rd Esplanade16370 • Election Expense16401 • Auditing Fees16402 • Engineering Fees16403 • Condemnation Expense16405 • Legal Fees16450 • Legal Notices & Other Publ.16470 • Filing Fees16503 • Bookkeeping Fees16504 • Detention Pond Maintenance

16507 • Reused Water Study16509 • Security Expense16570 • AWBD Expense16602 • Delivery Expense16605 • Postage16606 • Printing & Office SuppUes16608 • Travel Expense16701 • Director Fees

16702 • Payroll Expenses16703 • Arbitrage Expense16704 • Smart Meters

16901 • Miscellaneous Expense

Total Expense

Net Ordinary IncomeOther Incoine/Expense

Other Expense19100 • Capital Ouday.

Total Other ExpenseNet Income

10 Month

Actuals

11,1228,572

318,5738,246

24,5909,019

028,400

142,25929,925

214,1451,712

82517,879

121,65450,426

579,0323,369214

37,16339,705

77113,3501,0217,650

2,334,7673,428

12 Month

Esdmate

13,34710,286

382,2879,895

29,5089,019

0

28,400189,679119,700256,974

1,712825

21,454145,98560,512

694,8383,369

25744,59547,646

92516,020

1,2267,650

2,567,3844,114

10,349,866 12,329,144$794,101 $774,048

8,8008,800

785,301

8,800

'?•

8,800765,248

ApprovedBudget

12,4009,400

320,00020,00030,90050,000

032,000

225,0000

205,7001,0001,000

28,600200,000

' 50,000709,596

9,700500

41,30045,3001,000

18,4001,5007,000

1,000,00010,300

10,151,296

$1,967,214

60,00060,000

$1,907,214

2020ApprovedBudget

13,70010,600

393,80010,00032,500

0

10,00032,000

200,000125,000264,700

3,4001,200

28,600150,40062,300

718,5009,700

30045,00048,1001,000

18,4001,3007,000

729,6564,200

10,924,056

$921,463

10,00010,000

$911,463

NORTHWEST HARRIS COUNTY

MUNICIPAL UTILITY DISTRICT NO. 5

HARRIS COUNTY, TEXAS

ANNUAL FINANCIAL REPORT

JULY 31, 2019

McCALL GIBSON SWEDLUND BARFOOT PLLCCertified Public Accountants

TABLE OF CONTENTS

mDEPENDENT AUDITOR'S REPORT

MANAGEMENT'S DISCUSSION AND ANALYSIS

BASIC FINANCIAL STATEMENTS

STATEMENT OF NET POSITION AND GOVERNMENTAL FUNDS BALANCESHEET

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TOTHE STATEMENT OF NET POSITION

STATEMENT OF ACTIVITIES AND GOVERNMENTAL FUND STATEMENTOF REVENUES, EXPENDITURES AND CHANGES EST FUND BALANCES

RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT OFREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TOTHE STATEMENT OF ACTIVITIES

NOTES TO THE FINANCIAL STATEMENTS

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUNDBALANCE-BUDGET AND ACTUAL-GENERAL FUND

SUPPLEMENTARY DSTFORMATION REQUIRED BY THE WATER DISTRICTFDSTANCIAL MANAGEMENT GUIDE

NOTES REQUIRED BY THE WATER DISTRICT FINANCIALMANAGEMENT GUIDE (Included in the notes to the financial statements)

SERVICES AND RATES

GENERAL FUND EXPENDITURES

INVESTMENTS

TAXES LEVIED AND RECEIVABLE

LONG-TERM DEBT SERVICE REQUIREMENTS

CHANGE IN LONG-TERM BOND DEBT

COMPARATIVE SCHEDULES OF REVENUES AND EXPENDITURESGENERAL FUND AND DEBT SERVICE FUND - FIVE YEARS

BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS

PAGE

1-2

3-8

9-12

13

14-15

16

17-36

38

40-42

43-44

45

46-47

48-59

60-62

63-66

67-68

McCALL GIBSON SWEDLUND BARFOOTPLLCCertified Public Accountants

13100 Wortham Center DriveSuite 235

Houston, Texas 77065-5610(713) 462-0341

Fax (713) 462-2708E-M.ail: ms!sb@ms!sbpllc.com

9600 Great Hills TrailSuite 150W

Austin, Texas 78759(512) 610-2209

ivww.masbvllc.com

INDEPENDENT AUDITOR'S REPORT

Board of Directors

Northwest Harris CountyMunicipal Utility District No. 5

Harris County, Texas

We have audited the accompanying financial statements of the governmental activities and each majorfund of Northwest Harris County Municipal Utility District No. 5 (the "District"), as of and for the yearended July 31, 2019, and the related notes to the financial statements, which collectively comprise theDistrict's basic financial statements as 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 inaccordance with accounting principles generally accepted in the United States of America; this includesthe design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conductedour 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 whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditor's judgment, including theassessment 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 preparationand fair presentation of the financial statements in order to design audit procedures that are appropriate inthe circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accounting estimatesmade 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 forour audit opinions.

Member ofAmerican Institute of Certified Public Accountants

Texas Society of Certified Public Accountants

Board of DirectorsNorthwest Harris County

Municipal Utility District No. 5

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the governmental activities and each major fund of the District as of July31, 2019, and the respective changes in financial position for the year then ended in accordance withaccounting 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'sDiscussion and Analysis and the Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual - General Fund be presented to supplement the basic financial statements. Suchinformation, although not a part of the basic financial statements, is required by the GovernmentalAccounting Standards Board, who considers it to be an essential part of financial reporting for placing thebasic financial statements in an appropriate operational, economic, or historical context. We have appliedcertain limited procedures to the required supplementary information in accordance with auditingstandards generally accepted in the United States of America, which consisted of inquiries ofmanagement about the methods of preparing the information and comparing the information forconsistency with management's responses to our inquiries, the basic financial statements, and otherknowledge we obtained during our audit of the basic financial statements. We do not express an opinionor provide any assurance on the infonTiation because the limited procedures do not provide us withsufficient 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 collectivelycomprise the District's basic financial statements. The supplementary infonnation required by the TexasCommission on Environmental Quality as published in the Water District Financial Management Guideis presented for purposes of additional analysis and is not a required part of the basic financial statements.Such infonTiation is the responsibility of management and was derived from and relates directly to theunderlying accounting and other records used to prepare the basic financial statements. Thesupplementary information, excluding that portion marked "Unaudited" on which we express no opinionor provide any assurance, has been subjected to the auditing procedures applied in the audit of the basicfinancial statements and certain additional procedures, including comparing and reconciling suchinformation directly to the underlying accounting and other records used to prepare the basic financialstatements or to the basic financial statements themselves, and other additional procedures in accordancewith auditing standards generally accepted in the United States of America. In our opinion, theinformation is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

^LCM. A^, ^Jt^( ^^ n^McCall Gibson Swedlund Barfoot PLLCCertified Public AccountantsHouston, Texas

November 21,20193

-2-

NORTHWEST HARRIS COUNTYMUNICIPAL UTILITY DISTRICT NO. 5

MANAGEMENT'S DISCUSSION AND ANALYSISFOR THE YEAR ENDED JULY 31,2019

M'anagement's discussion and analysis of Northwest Harris County Municipal Utility Disti-ictNo. 5's (the "District") financial performance provides an overview of the District's financialactivities for the fiscal year ended July 31, 2019. Please read it in conjunction with the District'sfinancial statements.

USING THIS ANNUAL REPORT

This annual report consists of a series of financial statements. The basic financial statementsinclude: (1) combined fund financial statements and govemment-wide financial statements and(2) notes to the financial statements. The combined fund financial statements and govemment-wide fmancial statements combine both: (1) the Statement of Net Position and GovernmentalFunds Balance Sheet and (2) the Statement of Activities and Governmental Funds Statement ofRevenues, Expenditures and Changes in Fund Balances. This report also includes required andother supplementary information in addition to the basic financial statements.

GOVERNMENT-WIDE FINANCIAL STATEMENTS

The District's annual report includes two financial statements combining the govemment-widefinancial statements and the fund financial statements. The govemment-wide financialstatements provide both long-term and short-temi information about the District's overall stalls.Financial reporting at this level uses a perspective like that found in the private sector with itsbasis in full accmal accounting and elimination or reclassification of internal activities.

The Statement of Net Position includes all of the District's assets, liabilities and, if applicable,deferred inflows and outflows of resources, with the difference reported as net position. Overtime, increases or decreases in net position may serve as a useful indicator of whether thefinancial position of the District as a whole is improving or deteriorating. Evaluation of theoverall health of the Disto-ict would extend to other non-fmancial factors.

The Statement of Activities reports how the Disto-ict's net position changed during the currentfiscal year. All current year revenues and expendiftires are included regardless of when cash isreceived or paid.

FUND FENANCIAL STATEMENTS

The combined statements also include fund financial statements. A fund is a grouping of relatedaccounts that is used to maintain control over resources that have been segregated for specificactivities or objectives. The Distt-ict has three governmental fund types. The General Fundaccounts for resources not accounted for in another fund, customer service revenues, costs andgeneral expenditures. The Debt Service Fund accounts for ad valorem taxes and financialresources restricted, committed or assigned for servicing bond debt and the cost of assessing andcollecting taxes. The Capital Projects Fund accounts for financial resources restricted,committed or assigned for acquisition or construction of facilities and related costs.

-3-



FUND FINANCIAL STATEMENTS (Continued)

Governmental funds are reported in each of the financial statements. The focus in the fundfinancial statements provides a distinctive view of the District's governmental funds. Thesestatements report short-term fiscal accountability focusing on the use of spendable resources andbalances of spendable resources available at the end of the year. They are useful in evaluatingannual financing requirements of the District and the commitment of spendable resources for thenear-temi.

Since the govemment-wide focus includes the long-term view, comparisons between these twoperspectives may provide insight into the long-term impact of short-term financing decisions.The adjustments columns, the Reconciliation of the Governmental Funds Balance Sheet to theStatement of Net Position and the Reconciliation of the Governmental Funds Statement of

Revenues, Expendiftires and Changes in Fund Balances to the Statement of Activities explain thedifferences between the two presentations and assist in understanding the differences betweenthese two perspectives.

NOTES TO THE FmANCIAL STATEMENTS

The accompanying notes to the financial statements provide information essential to a fullunderstanding of the govemment-wide and fund financial statements.

OTHER INFORMATION

In addition to the financial statements and accompanying notes, this report also presents certainrequired supplementary information ("RSI") and other supplementary infonnation. Thebudgetary comparison schedule is included as RSI for the General Fund.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

Net position may serve over time as a useful indicator of the District's fmancial position. In thecase of the District, assets and deferred outflows of resources exceeded liabilities by $31,607,585as of July 31,2019.

A portion of the District's net position reflects its net investment in capital assets (e.g. land,buildings and equipment as well as water, wastewater and drainage facilities, less any debt usedto acquire those assets that is still outstanding).

The following is a comparative analysis of the govemment-wide changes in net position:

-4-



GOVERNMENT-WIDE FENANCIAL ANALYSIS (Continued)

Current and Other Assets

Capital Assets (Net of AccumulatedDepreciation)

Total Assets

Deferred Outflows of Resources

Long-Tenn LiabilitiesDue to DevelopersOther Liabilities

Total Liabilities

Net Position:

Net Investment in Capital AssetsRestrictedUnrestricted

Total Net Position

Summary of Changes in the Statement of Net PositionChangePositive

2019 2018 CNegative)

$ 46,430,160 $ 34,121,398 $ 12,308,762

127,063,924

$ 173,494,084

$ 2,341,216

$ 122,999,5559,097,485

12,130,675

119,044,881

$ 153,166,279

$ 2,595,011$ 102,784,094

12,833,54510,745,637

8,019,043

$ 20,327,805

$ (253,795)$ (20,215,461)

3,736,060(1,385,038)

$ 144,227,715 $ 126,363,276 $ (17,864,439)

$ 3,690,725 $ 5,139,895 $ (1,449,170)14,626,935 12,716,388 1,910,54713,289,925 11,541,731 1,748,194

$ 31,607,585 $ 29,398,014 $ 2,209,571

The following table provides a summary of the District's operations for the years ended July 31,2019, and July 31, 2018.

Summary of Changes in the Statement of ActivitiesChangePositive

2019 2018 (Negative)Revenues:

Property TaxesSales Tax ReceiptsCharges for ServicesOther Revenues

Total Revenues

Expenses for Services

Change in Net Position

Net Position, Beginning of Year

Net Position, End of Year

$

$

$

14,578,98943,805

9,129,7611,172,880

24,925,43522,715,864

2,209,57129,398,014

$ 13,658,51342,485

8,942,408712,031

$ 23,355,43718,458,345

$ 4,897,09224,500,922

$ 920,4761,320

187,353460,849

$ 1,569,998(4,257,519)

$ (2,687,521)4,897,092

.$ 31,607,585 $ 29,398,014 $ 2,209,571

-5-



FINANCIAL ANALYSIS OF THE DISTRICT'S GOVERNMENTAL FUNDS

The District's combined fund balances as of July 31, 2019, were $42,637,692, an increase of$12,191,939 from the prior year.

The General Fund fund balance increased by $1,780,263, primarily due to operating revenuesexceeding operating expenditures and a transfer from the Capital Projects Fund.

The Debt Service Fund fund balance increased by $1,789,130, primarily due the structure of theDistrict's debt service payments.

The Capital Projects Fund fund balance increased by $8,622,546, primarily due to the sale ofSeries 2018 and Series 2018A bonds.

GENERAL FUND BUDGETARY HIGHLIGHTS

The District did amend the budget during the fiscal year to increase estimated property taxes anddecease estimated capital outlay. Actual revenues were $107,121 more than budgeted revenues.Actual expenditures were $2,421,888 more than budgeted expenditures primarily due to morerepairs and maintenance and regional water authority assessments than anticipated.

CAPITAL ASSETS

Capital assets as of July 31, 2019, total $127,063,924 (net of accumulated depreciation) andinclude land, buildings and equipment as well as the water, wastewater and drainage systems.Significant capital asset events during the current fiscal year included land and facilities to serveCopper Ridge at Indian Trails, Section 1; Hayden Lakes Section 11; Enclave at Northpointe,Section 8; Wildwood at Oakcrest North, Sections 21, 23 and 26; and Commons North as well asWater Plant No. 3.

Construction in progress includes Telge Road waterline relocation, landscaping design for parksand trails and Water Plant No. 5.

-6-



CAPITAL ASSETS (Continued)

Capital Assets At Year-End, Net of Accumulated Depreciation

2019 2018

ChangePositive

(Negative)

Capital Assets Not Being Depreciated:Land and Land ImprovementsConstruction in Progress

Capital Assets, Net of AccumulatedDepreciation:Buildings and ImprovementsWater SystemWastewater SystemDrainage System

Total Net Capital Assets

$ 11,147,7091,395,121

172,58925,750,35539,523,37849,074,772

$ 9,825,005607,975

182,18524,364,55338,330,26345,734,900

$ 1,322,704787,146

(9,596)1,385,8021,193,1153,339,872

$ 127,063,924 $ 119,044,881 $ 8,019,043

Additional information on the District's capital assets can be found in Note 6 of this report.

LONG-TERM DEBT ACTIVITY

As of July 31, 2019, the District had total long-temi debt payable of $129,035,000. The changesin the debt position of the District during the fiscal year ended July 31, 2019, are summarized asfollows:

Bond Debt Payable, August 1,2018 $ 107,655,000

Add: Series 2018 and Series 2018A Bond Sale 28,760,000

Less: Bond Principal Paid _ 7,380,000

Bond Debt Payable, July 31,2019 $ 129,035,000

On September 13, 2018, the District issued $20,760,000 Unlimited Tax Bonds, Series 2018, and$8,000,000 Unlimited Tax Park Bonds, Series 2018A, with interest rates ranging for both seriesfrom 2.00% to 3.75%. The net proceeds were used to finance construction and land costsassociated with water, wastewater and drainage facilities and park facilities and to pay for futurebond interest and subsequent bond issue costs.

The District's bonds carry an underlying rating of "A 1" from Moody's Investors Service exceptfor the Series 2010 Refunding bonds which are unrated.

-7-



LONG-TERM DEBT ACTIVITY (Continued)

The Series 2013 Bonds and Series 2016 Refunding Bonds carry insured ratings of "A2" and"AA" and the Series 2018 Bonds and Series 2018A Bonds carry insured ratings of'AA" basedon insurance issued by Assured Guaranty Municipal Corporation.

The Series 2008 Bonds cany an insured rating of "AA" and the Series 2009 Bonds carry insuredratings of "A3" and "AA" based on insurance issued by Assured Guaranty Corporation.

The Series 2014 Refunding Bonds cany an insured rating of'AA" based on insurance issued byMunicipal Assurance Corporation.

The Series 2015 Refunding Bonds, the Series 2015A and Series 2017 Bonds carry an insuredrating of'AA" based on insurance issued by Build America Mutual Assurance Company.

CURRENTLY KNOWN FACTS, DECISIONS OR CONDITIONS

The adopted budget for fiscal year 2020 projects an increase of $911,463 in General Fund fundbalance. Compared to the fiscal year 2019 amended budget, revenues are expected to decreaseby approximately $273,000 and expenditures are expected to increase by approximately$723,000. The fiscal year 2020 tax rate has been established at $0.76 on each $100 of taxablevalue. Approximately 22% of the property tax will be used to fund general operations with theremaining 78% of the property tax set aside for debt service.

Subsequent to year-end, on October 22, 2019, the District closed on the sale of its $17,140,000Unlimited Tax Bonds, Series 2019. The District used proceeds of the bonds to reimburse certaindevelopers for the constmction and engineering of water, wastewater and drainage facilities andpay bond issuance costs.

CONTACTING THE DISTRICT'S MANAGEMENT

This financial report is designed to provide a general overview of the District's finances.Questions concerning any of the information provided in this report or requests for additionalinformation should be addressed to Northwest Harris County Municipal Utility District No. 5,c/o Smith, Murdaugh, Little & Bonham, L.L.P., 2727 Alien Paricway, Suite 1100, Houston, TX77019.

-8-

THIS PAGE INTENTIONALLY LEFT BLANK


STATEMENT OF NET POSITION ANDGOVERNMENTAL FUNDS BALANCE SHEET

JULY 31, 2019

ASSETSCash

Investments

Cash with Harris County Tax OfficeReceivables:

Property TaxesPenalty and Interest on Delinquent TaxesService Accounts (Net of Allowance for

Doubtful Accounts of $4,000)Accrued Interest

Due from City of HoustonDue from Other FundsPrepaid CostsAdvance for Regional Wastewater Treataient

Plant OperationsRegional Water Authority Chloramine

Conversion ReceivableLand

Construction in ProgressCapital Assets (Net of Accumulated Depreciation)

TOTAL ASSETS

DEFERRED OUTFLOWS OF RESOURCESDeferred Charges on Refunding Bonds

TOTAL ASSETS AND DEFERREDOUTFLOWS OF RESOURCES

General Fund

$ 1,223,42211,987,275

12,100

940,86749,7099,251

573,217118,266

97,547

DebtService Fund

$ 1,71212,560,644

20,380

105,602

28,411

2,419

$ 15,011,654

$ -0-

$ 12,719,168

$ -0-

$ 15,011,654 $ 12,719,168

The accompanying notes to the financialstatements are an integral part of this report.

-9-

CapitalProjects Fund

$ 30018,361,677

Total

$ -0-

$ 1,225,43442,909,596

20,380

117,702

940,86778,1209,251

575,636118,266

97,547

Adjustments

$

36,136

(575,636)89,967

786,89411,147,7091,395,121

114,521,094

Statement of

Net Position

$ 1,225,43442,909,596

20,380

117,70236,136

940,86778,1209,251

208,233

97,547

786,89411,147,7091,395,121

114,521,094

$ 18,361,977 $ 46,092,799 $ 127,401,285 $ 173,494,084

$ -0- $ 2,341,216 $ 2,341,216

$ 18,361,977 $ 46,092,799 $ 129,742,501 $ 175,835,300


-10-


STATEMENT OF NET POSITION ANDGOVERNMENTAL FUNDS BALANCE SHEET

JULY 31, 2019

LIABILITIESAccounts PayableAccrued Interest PayableDue to Other Governments

Due to DevelopersDue to Other Funds

Security DepositsUnearned Tap RevenuesLong-Term Liabilities:

Due Within One YearDue After One Year

TOTAL LIABILITIES

DEFERRED INFLOWS OF RESOURCESProperty Taxes

FUND BALANCESNonspendable:

Prepaid CostsAdvance for Wastewater Treatment Plant Operations

Restricted for Authorized Construction:Bond ProceedsNet Investinent Revenues

Restricted for Debt ServiceUnassigned

TOTAL FUND BALANCES

TOTAL LIABILITIES, DEFERRED INFLOWSOF RESOURCES AND FUND BALANCES

NET POSITIONNet Investment in Capital AssetsRestricted for:

Debt ServiceCapital Projects

Unresti-icted

TOTAL NET POSITION

General Fund

$ 611,956

557,879

2,4191,294,961

131,375

Debt

Service Fund

$

$ 2,598,590 $ -0-

$ 12,100 $ 105,602

$ 118,266 $97,547

12,613,56612,185,151

$ 12,400,964 $ 12,613,566

$ 15,011,654 $ 12,719,168


-11-


$ 165,598 $

573,217

Total

777,554

557,879

575,6361,294,961

131,375

Adjustments

$1,038,906

9,097,485(575,636)

8,330,000122,999,555

Statement of

Net Position

$ 777,5541,038,906

557,8799,097,485

1,294,961131,375

8,330,000122,999,555

$ 738,815 $ 3,337,405 $ 140,890,310 $ 144,227,715

$ -0- $ 117,702 $ (117,702) $ -0-

$ $ 118,26697,547

14,712,625 14,712,6252,910,537 2,910,537

12,613,56612,185,151

$ 17,623,162 $ 42,637,692

$ (118,266) $(97,547)

(14,712,625)(2,910,537)

(12,613,566)(12,185,151)

$ (42,637,692) $ -0-

$ 18,361,977 $ 46,092,799

$ 3,690,725 $ 3,690,725

11,716,398 11,716,3982,910,537 2,910,537

13,289,925 13,289,925$ 31,607,585 $ 31,607,585


- 12-


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEETTO THE STATEMENT OF NET POSITION

JULY 31, 2019

Total Fund Balances - Governmental Funds $ 42,637,692

AiTiounts reported for govermnental activities in the Statement of Net Position aredifferent because:

The difference between the net carrying amount of refunded bonds and thereacquisition price is recorded as a deferred outflow of resources in thegovernmental activites and systematically charged to interest expense over theremaining life of the old debt or the life of the new debt, whichever is shorter.

Bond insurance premiums paid at closing are amortized over the term of the debt inthe govemment-wide financial statements.

Long-term receivables are not cuirent financial resources and, therefore, are notreported as assets in the governmental funds.

2,341,216

89,967

786,894

Land, construction in progress and capital assets used in governmental activities arenot current financial resources and, therefore, are not reported as assets in thegovernmental funds. 127,063,924

Deferred inflows of resources related to property tax revenues and penalty andinterest receivable on delinquent taxes for the 2018 and prior tax levies became partof recognized revenues in the governmental activities of the District. 153,838

Certain liabilities are not due and payable in the current period and, therefore, are notreported as liabilities in the governmental funds. These liabilities at year-end consistof:

Due to Developers $ (9,097,485)Accrued Interest Payable (1,038,906)Bonds Payable Within One Year (8,330,000)Bonds Payable After One Year (122,999,555)

Total Net Position - Governmental Activities

(141,465,946)

$ 31,607,585


- 13-



STATEMENT OF ACTFVITIES AND GOVERNMENTAL FUNDS STATEMENT OFREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

FOR THE YEAR ENDED JULY 31,2019

General FundREVENUES

Property TaxesSales Tax ReceiptsWater ServiceWastewater ServiceRegional Water Authority FeesPenalty and InterestTap Connection and Inspection FeesInvestment Revenues

Regional Water Authority ReimbursementsMiscellaneous Revenues

TOTAL REVENUES

EXPENDITURES/EXPENSESService Operations:

Professional Fees

Contracted ServicesPurchased Water ServicePurchased Wastewater ServiceUtilitiesRegional Water Authority AssessmentsRepairs and MaintenanceDepreciationOther

Capital OutlayDebt Service:

Bond PrincipalBond InterestBond Issuance Costs

TOTAL EXPENDITURES/EXPENSES

EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER) EXPENDITURES

OTHER FINANCING SOURCES (USES)Transfers In (Out)Long-Term Debt Issued

TOTAL OTHER FINANCING SOURCES, NET

NET CHANGE IN FUND BALANCES

CHANGE IN NET POSITION

FUND BALANCES/NET POSITION - AUGUST 1,2018

FUND BALANCES/NET POSITION - JULY 31,2019

$

$

$_

$

1,727,34243,805

2,069,2652,319,2583,688,464

151,884808,040288,63064,99563,948

DebtService Fund

$ 12,942,130

129,654

318,256

249

$ 11,225,631 $ 13,390,289

552,5342,092,996

945,369277,441428,807

2,816,9954,394,911

1,102,63721,494

$

_(1,407,553) $

3,187,816 $

$ 1,780,263 $

10,620,701

20,907123,021

16

7,380,0004,077,215

$ 12,633,184 $ 11,601,159

1,789,130

$ 3,187,816 $ -0-

1,789,130

10,824,436

$ 12,400,964 $ 12,613,566


- 14-

1


$

453,577

$

Total

14,669,47243,805

2,069,2652,319,2583,688,464

281,538808,040

1,060,46364,99564,197

Adjustments

$

(36,804)

48,220(64,995)

Statement of

Activities

$ 453,577 $ 25,069,497 $

(90,483) $ 14,578,98943,805

2,069,2652,319,2583,688,464

244,734808,040

1,108,683

64,197(144,062) $ 24,925,435

$

$

12,7002,314

46,01415,400,968

1,941,219

$ 586,1412,218,331

945,369277,441428,807

2,816,9954,394,911

1,148,66715,422,462

7,380,0004,077,2151,941,219

$

3,667,359

(15,422,462)

(7,380,000)213,409

$

(3,187,816)28,760,000

$ $ $28,760,000 (28,760,000)

$ 8,622,546 $ 12,191,939

9,000,616 30,445,753

$ (12,191,939)

2,209,571

(1,047,739)

$

586,1412,218,331

945,369277,441428,807

2,816,9954,394,9113,667,3591,148,667

4,290,6241,941,219

$ 17,403,215 $ 41,637,558 $ (18,921,694) $ 22,715,864

$ (16,949,638) $ (16,568,061) $ 16,568,061 $ -0-

$ 25,572,184 $ 28,760,000 $ (28,760,000) $ -0-

2,209,571

29,398,014

$ 17,623,162 $ 42,637,692 $ (11,030,107) $ 31,607,585


-15-


RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OFREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

TO THE STATEMENT OF ACTIVITIESFOR THE YEAR ENDED JULY 31,2019

Net Change in Fund Balances - Governmental Funds $ 12,191,939

Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report tax revenues when collected. However, in the government-wide financialstatements, revenues are recorded in the accounting period for which the taxes are levied. (90,483)

Governmental funds report penalty and interest revenues on delinquent property taxes when collected.However, in the government-wide financial statements, revenues are recorded when penalty and interestare assessed. . (36,804)

Governmental funds report Regional Water Authority credits as revenues. However, in the government-wide financial statements, the principal portion of the credits decreases long-term receivables and thebalance is recorded as investment revenue. (16,775)

Governmental funds do not account for depreciation. However, in the government-wide financialstatements, capital assets are depreciated and depreciation expense is recorded in the Statement ofActivities. (3,667,359)

Governmental funds report capital asset costs as expenditures in the period purchased. However, in thegovenunent-wide financial statements, capital assets are increased by new purchases that meet theDistrict's threshold for capitalization, and are owned and maintained by the District. All other capital assetpurchases are expensed in the Statement of Activities. 15,422,462

Governmental funds report bond insurance costs as expenditures and bond discounts and bond premiumsas other financing sources/uses in the year paid. However, in the governmeat-wide financial statements,bond insurance costs, bond discounts and bond premiums are amortized over the life of the bonds and thecurrent year amortized portion is recorded in interest expense. 204,636

Govei-nmental funds report principal payments on long-term debt as expenditures. However, in thegovemment-wide financial statements, principal payments decrease long-term liabilities and the Statementof Activities is not affected. 7,380,000

Govermnental funds report interest payments on long-term debt as expenditures in the year paid.However, in the government-wide financial statements, interest is accrued on the debt through fiscal year-end. (164,250)

Govenuiiental funds report bond proceeds as other financing sources. Issued bonds increase long-termliabilities in the Statement of Net Position. (28,760,000)

Governmental funds report the payment to the refunded bond escrow agent as an other fmancing use.However, in govemment-wide financial statements, long-term liabilities are decreased by the amount ofthe bonds refunded and the difference is recorded as a deferred outflow of resources and systematicallycharged to interest expense. (253,795)

Change in Net Position-Governmental Activities $ 2,209,571


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NORTHWEST HARRIS COUNTYMUNICIPAL UTILITY DISTRICT NO. 5NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2019

1.1.'

it.

NOTE 1. CREATION OF DISTRICT

Northwest Harris County Municipal Utility District No. 5, located in Harris County, Texas (the"District"),a was created effective December 3, 1974 by an Order of the Texas Water RightsCommission, presently laiown as the Texas Commission on Environmental Quality (the'Commission"). Pursuant to the provisions of Chapters 54 and 49 of the Texas Water Code, the

District is empowered to purchase, operate and maintain all facilities, plants and improvementsnecessary to provide water, wastewater service, storm sewer drainage, irrigation, solid wastecollection and disposal, including recycling, and to consti-uct and maintain parks and recreationalfacilities for the residents of the Dista-ict. The District is also empowered to contract for oremploy its own peace officers with powers to make an-ests and to establish, operate and maintaina fire deparbnient to perform all fire-fighting activities within the District. The Board ofDirectors held its first meeting on April 10, 1975, and the first bonds were delivered on July 6,1977.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements have been prepared in accordance with accountingprinciples generally accepted in the United States of America as promulgated by theGovernmental Accounting Standards Board ("GASB"). In addition, the accounting records ofthe District are maintained generally in accordance with the Water District FinancialM.anagement Guide published by the Commission.

The District is a political subdivision of the State of Texas governed by an elected board. GASBhas established the criteria for determining whether an entity is a primary government or acomponent unit of a primary government. The primary criteria are that it has a separately electedgoverning body, it is legally separate, and it is fiscally independent of other state and localgovernments. Under these criteria, the District is considered a primary government and is not acomponent unit of any other government. Additionally, no other entities meet the criteria forinclusion in the District's financial statement as component units.

The District has entered into a joint venture with Northwest Harris County Municipal UtilityDistrict No. 15 ("District No. 15"), Han-is County Municipal Utility Distt-ict No. 273, HarrisCounty Municipal Utility Disti-ict No. 280, Harris County Municipal Utility District No. 281 andHarris County Municipal Utility District No. 282 for waste disposal through the North PointeRegional Wastewater Treatment Plant. Cun-ently, District No. 15 has operating and oversightresponsibility over the wastewater treafanent plant. Additional disclosure concerning this jointventure is provided in Note 10.

-17-


JULY 31, 2019

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financial Statement Presentation

These financial statements have been prepared in accordance with GASB Codification ofGovenunental Accounting and Financial Reporting Standards Part II, Financial Reporting("GASB Codification").

The GASB Codification sets forth standards for external financial reporting for all state and localgovernment entities, which include a requirement for a Statement of Net Position and aStatement of Activities. It requires the classification of net position into three components: NetInvestiiient in Capital Assets; Restricted; and Unrestricted. These classifications are defined asfollows:

Net Investment in Capital Assets - This component of net position consists of capitalassets, including restricted capital assets, net of accumulated depreciation and reduced bythe outstanding balances of any bonds, mortgages, notes, or other borrowings .that areattributable to the acquisition, constmction, or improvements of those assets.

Restricted Net Position - This component of net position consists of external consti-aintsplaced on the use of assets imposed by creditors (such as through debt covenants),grantors, contributors, or laws or regulation of other governments or consta-aints imposedby law through constitutional provisions or enabling legislation.

Unrestricted Net Position - This component of net position consists of assets that do notmeet the definition of Restricted or Net Investment in Capital Assets.

When both restricted and unrestricted resources are available for use, generally it is the District'spolicy to use restricted resources first.

Government-Wide Financial Statements

The Statement of Net Position and the Statement of Activities display information about theDistrict as a whole. The Disfrict's Statement of Net Position and Statement of Activities arecombined with the goveiTimental fund financial statements. The Disti-ict is viewed as a special-purpose government and has the option of combining these financial statements.

The Statement of Net Position is reported by adjusting the goverm-nental fund types to report onthe full accrual basis, economic resource basis, which recognizes all long-temi assets andreceivables as well as long-temi debt and obligations. Any amounts recorded due to and duefrom other funds are eliminated in the Statement of Net Position.

-18-


JULY 31, 2019


Financial Statement Presentation (Continued)

Govemment-Wide Financial Statements (Continued)

The Statement of Activities is reported by adjusting the governmental fund types to report onlyitems related to current year revenues and expenditures. Items such as capital outlay areallocated over their estimated useful lives as depreciation expense. Internal activities betweengovernmental funds, if any, are eliminated by adjustment to obtain net total revenues andexpenses in the govermnent-wide Statement of Activities.

Fund Financial Statements

As discussed above, the District's fund financial statements are combined with the goveiTunent-wide financial statements. The fund financial statements include a Governmental Funds BalanceSheet and a Governmental Fund Statement of Revenues, Expenditures and Changes in FundBalances.

Governmental Funds

The District has three govermnental funds and considers these funds to be major funds.

General Fund - To account for resources not required to be accounted for in another fund,customer service revenues, costs and general expenditures.

Debt Service Fund - To account for ad valorem taxes and financial resources restricted,committed or assigned for servicing bond debt and the cost of assessing and collecting taxes.

Capital Projects Fund - To account for jBnancial resources restricted, committed or assigned foracquisition or construction of facilities and related costs.

Basis of Accounting

The District uses the modified accrual basis of accounting for governmental fund types. Themodified accrual basis of accounting recognizes revenues when both "measurable and available.'Measurable means the amount can be determined. Available means collectable within thecurrent period or soon enough thereafter to pay current liabilities. The District considersrevenues reported in governmental funds to be available if they are collectable within 60 daysafter year-end. Also, under the modified accrual basis of accounting, expenditures are recordedwhen the related fund liability is incurred except for principal and interest on long-term debt,which are recognized as expenditures when payment is due.

-19-

;;


JULY 31, 2019

NOTE 2. SIGNIFICANT ACCOUNTmG POLICIES (Continued)

Basis of Accounting (Continued)

Property taxes considered available by the District and included m revenues include taxescollected during the year and taxes collected after year-end, which were considered available todefray the expenditures of the current year. Deferred inflows of resources related to property taxrevenues are those taxes which the District does not reasonably expect to be collected soonenough in the subsequent period to finance current expendiftjres.

Amounts transferred from one fund to another fund are reported as other financing sources oruses. Loans by one fund to another fund and amounts paid by one fund for another fund arereported as interfund receivables and payables in the Governmental Funds Balance Sheet if thereis intent to repay the amount and if the debtor fund has the ability to repay the advance on atimely basis.

Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets, are reported inthe govermnent-wide Statement of Net Position. All capital assets are valued at historical cost orestimated historical cost if actual historical cost is not available. Donated assets are valued attheir acquisition value on the date donated. Repairs and maintenance are recorded asexpenditures in the govermiiental fund incurred and as an expense in the govemment-wideStatement of Activities. Capital asset additions, improvements and preservation costs that extendthe life of an asset are capitalized and depreciated over the estimated useful life of the asset.Developer interest, engineering fees and certain other costs are capitalized as part of the asset.

Assets are capitalized, including infrastincture assets, if they have an original cost of $25,000 ormore and an estimated useful life of at least two years following the date of acquisition.Depreciation is calculated on each class of depreciable property using no salvage value and thestraight-line method of depreciation. Estimated useful lives are as follows:

Years

BuildingsWater SystemWastewater SystemDrainage SystemAll Other Equipment

4010-4510-4510-403-20

Budgeting

In compliance with governmental accounting principles, the Board of Directors annually adoptsan unappropriated budget for the General Fund. The budget was amended during the currentfiscal year.

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JULY 31, 2019


Pensions

The District has not established a pension plan as the District does not have employees. TheInternal Revenue Service has detennined that fees of office received by Directors are wagessubject to federal income tax withholding for payroll tax purposes only.

Measurement Focus

Measurement focus is a term used to describe which transactions are recognized within thevarious financial statements. In the govemment-wide Statement of Net Position and Statementof Activities, the governmental activities are presented using the economic resourcesmeasurement focus. The accounting objectives of this measurement focus are the determinationof operating income, changes in net position, financial position, and cash flows. All assets,liabilities, and deferred inflows and outflows of resources associated with the activities arereported. Fund equity is classified as net position.

Govenunental fund types are accounted for on a spending or financial flow measurement focus.Accordingly, only current assets and current liabilities are included on the Governmental FundsBalance Sheet, and the reported fund balances provide an indication of available spendable orappropriable resources. Operating statements of governmental fund types report increases anddecreases in available spendable resources. Fund balances in governmental funds are classifiedusing the following hierarchy:

Nonspendable: amounts that cannot be spent either because they are in nonspendable form orbecause they are legally or contractually required to be maintained intact.

Restricted: amounts that can be spent only for specific purposes because of constitutionalprovisions, or enabling legislation, or because of constraints that are imposed externally.

Committed: amounts that can be spent only for purposes determined by a formal action of theBoard of Directors. The Board is the highest level of decision-making authority for the District.This action must be made no later than the end of the fiscal year. Commitments may beestablished, modified, or rescinded only through formal action by the Board. The District doesnot have any committed fund balances.

Assigned: amounts that do not meet the criteria to be classified as restricted or committed, butthat are intended to be used for specific purposes. The District did not have any assigned fundbalances.

Unassigned: all other spendable amounts in the General Fund.

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JULY 31, 2019


Measurement Focus (Continued)

When expenditures are incurred for which restricted, committed, assigned or unassigned fundbalances are available, the District considers amounts to have been spent first out of restrictedfunds, then committed funds, then assigned funds, and finally unassigned funds.

Accounting Estimates

The preparation of financial statements in confomiity with accounting principles generallyaccepted in the United States of America requires management to make estimates andassumptions that affect the reported amount of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and the reported amounts of revenuesand expenditures during the reporting period. Actual results could differ from those estimates.

NOTE 3. LONG-TERM DEBT

Amount Outstanding -July 31,2019

Interest Rates

Maturity Dates - SeriallyBeginning/Ending

Interest Payment Dates

Callable Dates

Series 2008

$515,000

4.00%

May 1,2020

November I/

May 1

May 1, 2019*

Series 2009

$ 505,000

4.00%

May 1,2020

November I/

May 1

May 1, 2019*

RefundingSeries 2010

$ 3,620,000

3.25%

May 1,2020/2023

November I/

May 1

May 1, 2020*

* Or on any date thereafter, in whole or in part, at the option of the District, at a price of parplus accrued interest from the most recent interest payment date to the date fixed forredemption. The Series 2010 Refunding bonds are term bonds subject to mandatoryredemption beginning May 1, 2011 by lot or other customary random method.

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NORTHWEST HARRIS COUNTYMUNICIPAL UTILITY DISTRICT NO. 5NOTES TO THE FmANCIAL STATEMENTS

JULY 31, 2019

NOTE 3. LONG-TERM DEBT (Continued)

Amount Outstanding -July 31, 2019

Interest Rates



Callable Dates


Interest Rates



Callable Dates

Series 2013

$ 7,670,000

3.000%-3.125%

May 1,2020/2034

November I/

May 1

May 1,2021**

Series 2015A

$ 27,940,000

2.00% - 4.00%

May 1,2020/2040

November I/

May 1

May 1,2023**


$4,655,000

3.00% - 3.50%

May 1,2020/2023

November I/

May 1

Not Applicable


$ 18,190,000

2.00% - 4.00%

May 1,2020/2032

November I/May 1

May 1, 2025**


$ 14,540,000

3.00%-3.50%

May 1,2020/2027

November I/May 1

May 1, 2022**

Series 2017

$ 22,640,000

2.00% - 4.00%

May 1,2020/2041

November I/

May 1

May 1, 2024**

** Or on any date thereafter, in whole or in part, at the option of the District, at a price of parplus accmed interest from the most recent interest payment date to the date fixed forredemption. The Series 2015-A temi bonds maturing May 1, 2028 are subject tomandatory redemption beginning May 1, 2027, by lot or other customary randommethod. The Series 2017 term bonds maturing May 1, 2031, IVIay 1, 2039 and May 1,2041 are subject to mandatory redemption beginning May 1, 2030, May 1, 2038 and May1, 2040, respectively, by lot or other customary random method.

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JULY 31, 2019


Series 2018 Series 20 ISA


Interest Rates

IVtaturity Dates - SeriallyBeginning/Ending


Callable Dates

***

$ 20,760,000

2.00%-3.75%

May 1,2020/2043

November I/May 1

May 1, 2023***

$ 8,000,000

2.00% - 3.75%

May 1,2020/2043

November I/

May 1

May 1, 2023***

Or on any date thereafter, in whole or in part, at the option of the District, at a price of parplus accmed interest from the most recent interest payment date to the date fixed forredemption.

The following is a summary of transactions regarding bonds payable for the year ended July 31,2019:

August 1,2018 Additions Retirements

July 31,2019

Bonds PayableUnamortized DiscountsUnamortized Premiums

Bonds Payable, Net

$ 107,655,000(54,223)

2,563,317

$ 28,760,000 . $ 7,380,000(25,818)240,357

$ 129,035,000(28,405)

2,322,960

$ 110,164,094 $ 28,760,000 $ 7,594,539 $ 131,329,555

Amount Due Within One Year

Amount Due After One Year

Bonds Payable, Net

$ 8,330,000122,999,555

$ 131,329,555

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NORTHWEST HARRIS COUNTYMUNICIPAL UTILITY DISTRICT NO. 5NOTES TO THE FWANCIAL STATEMENTS

JULY 31, 2019


On September 13, 2018, the District issued $20,760,000 Unlimited Tax Bonds, Series 2018, and$8,000,000 Unlimited Tax Park Bonds, Series 2018A, with interest rates ranging for both seriesfrom 2.00% to 3.75%. The net proceeds of $26,225,552 (after payment of underwriter fees andother bond related costs) were deposited with the District's investment accounts to financeconstruction and land costs associated with water, wastewater and drainage facilities, parkfacilities and to pay for future bond interest and bond issue costs.

As ofJuly 31, 2019, the debt service requirements on the bonds outstanding were as follows:

Fiscal Year Principal Interest Total

20202021202220232024

2025-20292030-20342035-20392040-2043

$ 8,330,0008,540,0008,710,0008,925,0008,235,000

34,205,00026,140,00017,780,0008,170,000

$ 4,155,6263,881,8383,659,0133,406,0063,110,794

11,892,9906,946,7663,321,265

595,526

$ 12,485,62612,421,83812,369,01312,331,00611,345,79446,097,99033,086,76621,101,2658,765,526

$ 129,035,000 $ 40,969,824 $ 170,004,824

The bonds are payable j&om the proceeds of an ad valorem tax levied upon all property subject totaxation within the District, without limitation as to rate or amount. The District has authorizedbut unissued tax bonds totaling $51,005,000 for utilities and refundings, and none remaining forparks and recreation.

During the year ended July 31, 2019, the District levied an ad valorem debt service tax at the rateof $0.68 per $100 of assessed valuation, which resulted in a tax levy of $12,822,359 on theadjusted taxable valuation of $1,885,356,618 for the 2018 tax year. The bond orders require theDistrict levy and collect an ad valorem debt service tax sufficient to pay interest and principal onbonds when due and the cost of assessing and collecting taxes. See Note 7 for maintenance taxlevy.

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JULY 31, 2019


The Disti-ict's tax calendar is as follows:

Levy Date

Lien Date

Due Date

Delinquent Date

- October 1 or as soon thereafter as practicable.

- January 1.

- Not later than January 31.

- February 1, at which time the taxpayer is liable for penalty and interest.

NOTE 4. SIGNIFICANT BOND ORDER AND LEGAL REQUIREMENTS

The District has covenanted that it will take all necessary steps to comply with the requirementthat rebatable arbitrage earnings on the investment of the gross proceeds of the bonds, within themeaning of section 148 (f) of the Internal Revenue Code, be rebated to the federal government.The minimum requirement for determination of the rebatable amount is on each 5th yearanniversary of each issue.

The bond orders state that the District is required to annually provide continuing disclosure ofcertain general financial information and operating data to the Municipal Securities RulemakingBoard through its Electronic Municipal Market Access ("EMMA") system. This information,along with the audited annual financial statements, is to be provided within six months after theend of each fiscal year and shall continue to be provided through the life of the bonds.

NOTE 5.

Deposits

DEPOSITS AND INVESTMENTS

Custodial credit risk is the risk that, in the event of the failure of a depository financialinstitution, a government will not be able to recover deposits or will not be able to recovercollateral securities that are in the possession of an outside party. The District's deposit policyfor custodial credit risk requires compliance with the provisions of Texas statutes.

-26-


JULY 31, 2019

NOTE 5. DEPOSITS AND INVESTMENTS (Continued)

Deposits (Continued)

Texas statutes require that any cash balance in any fund shall, to the extent not insured by theFederal Deposit Insurance Corporation or its successor, be continuously secured by a validpledge to the District of securities eligible under the laws of Texas to secure the funds of theDistrict, having an aggregate market value, including accrued interest, at all times equal to theuninsured cash balance in the fund to which such securities are pledged. At fiscal year-end, thecarrying amount of the District's deposits was $7,945,434 and the bank balances were$8,474,630. Of the bank balances, $6,741,715 was covered by federal depository insurance, andthe remaining balance was covered by pledged collateral held in a third-party depository in theDistrict's name.

The can-ying values of the deposits are included in the Governmental Funds Balance Sheet andthe Statement of Net Position at July 31, 2019, as listed below:

Cash

GENERAL FUND

DEBT SERVICE FUND

CAPITAL PROJECTS FUND

TOTAL DEPOSITS

$ 1,223,422

1,712

300

Certificates

of Deposit

$ 3,360,000

3,360,000

Total

$ 4,583,422

3,361,712

300

$ 1,225,434 $ 6,720,000 $ 7,945,434

Investments

Under Texas law, the District is required to invest its funds under written investment policies thatprimarily emphasize safety of principal and liquidity and that address investment diversification,yield, maturity, and the quality and capability of investajient management, and all District fundsmust be invested in accordance with the following investonent objectives: understanding thesuitability of the investment to the Dista-ict's financial requirements, first; preservation and safetyof principal, second; liquidity, third; marketability of the investments if the need arises toliquidate the investment before maftirity, fourth; diversification of the investment portfolio, fifth;and yield, sixth. The District's investments must be made "with judgment and care, underprevailing circumstances, that a person of prudence, discretion, and intelligence would exercisein the management of the person's own affairs, not for speculation, but for investiBent,considering the probable safety of capital and the probable income to be derived." No personmay invest District funds without express written authority from the Board of Directors.

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NORTHWEST HARRIS COUNTYMUNICIPAL UTILITY DISTRICT NO. 5NOTES TO THE FWANCIAL STATEMENTS

JULY 31, 2019

NOTES. DEPOSITS AND INVESTMENTS (Continued)

Investments (Continued)

Texas statutes include specifications for and limitations applicable to the District and itsauthority to purchase investments as defined in the Public Funds Investment Act. The Districthas adopted a written investment policy to establish the guidelines by which it may invest. Thispolicy is reviewed annually. The District's investment policy may be more restrictive than thePublic Funds Investment Act.

The Disfa'ict invests in TexPool, an external investment pool that is not SEC-registered. TheTexas Compti-oller of Public Accounts has oversight of the pool. Federated Investors, Inc.manages the daily operations of the pool under a contract with the Comptroller. TexPoolmeasures all of its portfolio assets at amortized cost. As a result, the Distt'ict also measures itsinvestments in TexPool at amortized cost for financial reporting purposes. There are nolimitations or restrictions on withdrawals from TexPool.

The District invests in Texas Cooperative Liquid Assets Securities System Trust ("TexasCLASS"), an external public funds investinent pool that is not SEC-registered. Public TmstAdvisors, LLC serves as the pool's administrator and investment advisor. The pool is subject tothe general supervision of the Board of Trustees and its Advisory Board. Wells Fargo Bank,N.A. serves as custodian for the pool. Investments held by Texas CLASS are priced to marketon a weekly basis. The investments are considered to be Level I investments because their fairvalue is measured by quoted prices in active markets. The fair value of the District's position inthe pool is the same as the value of the pool shares. There are no limitations or restrictions onwithdrawals from Texas CLASS.

Certificates of deposit are valued at acquisition cost at the date of purchase.

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NORTHWEST HARRIS COUNTYMUNICIPAL UTILITY DISTRICT NO. 5NOTES TO THE FmANCIAL STATEMENTS

JULY 31, 2019

NOTES. DEPOSITS AND INVESTMENTS (Continued)

Investments (Continued)

As of July 31, 2019, the District had the following investments and maturities:

Maturities in Years

Fund and

Investment Type Fair Value

Less Than

1 1-5 6-10

GENERAL FUNDTexPool

Texas CLASS

Certificates of Deposit

DEBT SERVICE FUNDTexPool

Texas CLASS

Certificates of Deposit

CAPITAL PROJECTS FUND

Texas CLASS

TOTAL INVESTMENTS

$ 5,5738,621,7023,360,000

47,032

9,153,6123,360,000

18,361,677

$ 5,5738,621,7023,360,000

47,032

9,153,6123,360,000

18,361,677

$

More Than

10

$

$ 42,909,596 $ 42,909,596 $ -0- $ -0- $ -0-

Credit risk is the risk that the issuer or other counterparty to an investment will not fulfill itsobligations. At July 31, 2019, the District's investments in TexPool and Texas CLASS wererated "AAAm" by Standard and Poor's. The District also manages credit risk by investing incertificates of deposit with balances covered in accordance with Texas statutes.

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of aninvestment. The District considers the investments in TexPool and Texas CLASS to have a

maturity of less than one year due to the fact the share position can usually be redeemed each dayat the discretion of the District, unless there has been a significant change in value. The Disfa-ictalso manages interest rate risk by investing in certificates of deposit with maturities ofapproximately one year or less.

Restrictions

All cash and investments of the Debt Service Fund are restricted for the payment of debt serviceand the cost of assessing and collecting taxes. All cash and investments of the Capital ProjectsFund are restricted for the purchase of capital assets.

-29-


JULY 31, 2019

NOTE 6. CAPITAL ASSETS

Capital asset activity for the fiscal year ended July 31, 2019:

Capital Assets Not Being DepreciatedLand and Land ImprovementsConstruction in Progress

Total Capital Assets Not BeingDepreciated

Capital Assets Subjectto DepreciationBuildings and ImprovementsWater SystemWastewater SystemDrainage SystemOther

Total Capital AssetsSubject to Depreciation

Accumulated DepreciationBuildings and ImprovementsWater SystemWastewater SystemDrainage SystemOther

Total Accumulated Depreciation

Total Depreciable Capital Assets, Net ofAccumulated Depreciation

Total Capital Assets, Net of AccumulatedDepreciation

August 1,2018 Increases Decreases

July 31,2019

$ 9,825,005607,975

$ 1,322,704 $11,686,402 10,899,256

$ 11,147,7091,395,121

$ 10,432,980 $ 13,009,106 $ 10,899,256 $ 12,542,830

$ 383,82633,924,33450,251,11855,570,348

205,020

$ $2,347,8622,576,5424,652,148

$ 140,334,646 $ 9,576,552 $ -0-

$ 201,6419,559,781

11,920,8559,835,448

205,020$ 31,722,745

$ 108,611,901

$ 119,044,881

$ 9,596 $962,060

1,383,4271,312,276

$ 3,667,359 $ -0-

$ 5,909,193 $ -0-

$ 18,918,299 $ 10,899,256

$ 383,82636,272,19652,827,66060,222,496

205,020

$. 149,911,198

$ 211,23710,521,84113,304,28211,147,724

205,020$ 35,390,104

$ 114,521,094

$ 127,063,924

The District has financed certain drainage facilities which have been conveyed to other entitiesfor maintenance. Capital assets are added above when the facilities are placed into service.

NOTE 7. MAINTENANCE TAX

On April 3, 1976, the voters of the District approved the levy and collection of a maintenance taxnot to exceed $0.15 per $100 of assessed valuation of taxable property within the District. OnIVLay 7, 1988, the voters agreed to increase the amount of maintenance tax not to exceed $0.50per $100 of assessed valuation. During the year ended July 31, 2019, the Disb-ict levied an advalorem maintenance tax at the rate of $0.09 per $100 of assessed valuation, which resulted in atax levy of $1,697,077 on the adjusted taxable valuation of $1,885,356,618 for the 2018 tax year.This maintenance tax is to be used by the General Fund to pay expenditures of operating theDistrict's waterworks and sanitary sewer system.

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NOTE 8.


JULY 31, 2019

WATER SUPPLY CONTRACTS

Harris County Municipal Utility District No. 360

On June 13, 1994, as amended on June 14, 2000, the District entered into an emergency watersupply contract with Harris County Municipal Utility Disb-ict No. 360 ("District No. 360"). Thecontract requires District No. 360 to constmct, at its own cost, the 8" water lines necessary toconnect the systems. Each disfa-ict shall be responsible for maintaining its respectiveintercoimect lines within its boundaries at its sole cost. Each district shall own and have title toits respective interconnect line. The term of the contract is 40 years.

The price to be paid for water delivered during an emergency shall be billed at a rate of $0.50 per1,000 gallons of "average daily usage" for the number of days water is received. In the eventthat the supplying district had to purchase all or a portion of the water supplied, then the rate per1,000 gallons shall be the greater of the rate paid by the supplying district for such water or$0.50. If the supplying district has converted to use surface water in whole or in part, the rate per1,000 gallons shall be the actual costs to the supplying district to purchase surface water, or the$0.50 rate shall be increased by the amount of the fees imposed by such regional water authorityor governmental entity.

Harris Count Municipal Utility District No.416

On February 14, 2007, the District and Harris County Municipal Utility District No. 416("District No. 416") entered into a Water Facilities Contract (the "Water Facilities Contract"). OnApril 4, 2007, the District purchased the water well and water plant located in District No. 416for $2,185,150. Pursuant to the Water Facilities Contract, District No. 416 held the option torepurchase 50 percent of the capacity within one year for 50 percent of the purchase price plusinterest calculated at the rate at which the District financed the purchase. District No. 416 wasunable to exercise the option to repurchase and the Water Facilities Contract was terminated bythe Water Supply Agreement.

On August 15, 2013, the District and District No. 416 entered into the Water Supply Agreement(the "Water Supply Agreement"). Pursuant to the Water Supply Agreement, District No. 416relinquished any right to the water well and plant located within District No. 416 and the Districtagreed to provide water service to up to 300 equivalent single-family connections to District No.416. District No. 416 will design and consfa-uct all water distribution facilities and will purchasewater capacity from the District at a cost of $1,500.00 per connection to provide service tocustomers within District No. 416. Upon completion and acceptance by District No. 416 anddeveloper reimbursement, the water distribution facilities will be conveyed to the Disft-ict, whichwill assume responsibility for their maintenance and operation.

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JULY 31, 2019

NOTE 8. WATER SUPPLY CONTRACTS (Continued)

Harris Count Municipal Utility District No. 416 (Continued)

On January 17, 2019, the District and District No. 416 entered into the First Amendment to theWater Supply Agreement (the "Amendment") which allows the District to provide and chargefor water services to certain parties, as detailed out in the Amendment, that are outside of theboundaries of District No. 416.

NOTE 9. LEASE AGREEMENT AND MAINTENANCE AND OPERATINGAGREEMENT - ADMINISTRATION BUILDING

On Mtarch 16, 1995, the Dista-ict entered into an agreement to lease from Fairwood HomeownersAssociation (the "HOA") the land on which the District's administration building is constructed.The lease is for a term of 40 years from the date of this agreement, except if the District isannexed by the City of Houston, the agreement shall terminate upon the date of annexation. TheDistrict agreed to pay rent to the HOA at the rate of $1.00 per year, in advance, for the term ofthe lease. The District agreed to construct a district administration building on the premises andpay all real property taxes during the tenn of the lease. The leased premises shall be used onlyfor the construction and use of an administration building. The District further agreed to provideits own property and liability insurance for all of the District's personal property located on thepremises.

On March 16, 1995, the District and the HOA entered into an operation and maintenanceagreement to arrange for the shared use and operation of the administration building for the termof the lease agreement. On June 1, 1998, the District and the HOA entered into a maintenanceand operating agreement which temiinated the prior agreement. The District agreed to pay alloperating and maintenance costs for the building from the date of completion and occupancy ofthe building until two years following completion. Upon expiration of the two years followingthe date of completion of the building and until the expiration or termination of the leaseagreement, the HOA will pay all costs of maintaining and repairing the building up to andincluding $100. The District agreed to pay for all maintenance and repair costs in excess of$100. However, the Disfa-ict agreed to pay all of maintenance and repair costs related to theconference room.

The District and the HOA agree that any revenues generated from the use of the building must beused to maintain the building, including normal recun-ing maintenance and repairs, regardless ofthe cost of repairs. The District's obligation to pay extraordinary maintenance and repair costsshall arise only if the revenue generated by the building is insufficient to pay the cost of repairs.

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JULY 31, 2019

NOTE 10. WASTE DISPOSAL AGREEMENT

The District is a participant in a 2,613,350 gallon per-day ("gpd") regional wastewater treatmentplant that is operated by Northwest Harris County Municipal Utility District No. 15 (the "Plant").The District originally purchased rights to 1,055,600 gpd which is 40.39% of the capacity. OnMarch 1, 2010, the District sold 28,350 gpd of its capacity in the Plant to Harris CountyMunicipal Utility District No. 281 at a purchase price of $99,225. On May 6, 2015, the Districtapproved the sale of wastewater treatment capacity in the Plant to Harris County MunicipalUtility District No. 282 in the amount of $245,478 for 70,000 gpd of wastewater capacity. OnJuly 1, 2015, the District approved the sale of wastewater treatment capacity in the Plant toHarris County Municipal Utility District No. 273 in the amount of $542,225 for 148,000 gpd ofwastewater capacity. After this transaction, the District owns rights to 809,250 gpd which is30.97% of the capacity. The term of the agreement is for a period of 40 years from March 1,2010.

Each party owning capacity in the Plant appoints one member of its Board of Directors or itsgeneral manager to serve on an operations committee to oversee the operation and maintenanceof the Plant. All costs incurred in connection with the meetings and activities of the operationscommittee shall be costs of the Plant. During the current fiscal year, the District maintained areserve of $97,547 and recorded current operating costs of $277,441. The following summaryfinancial data of the wastewater b-eatment plant is presented for the fiscal year ending September30, 2018. Separate financial statements are not issued on this joint venture.

Joint Venture

Total AssetsTotal Liabilities

Total Fund Balance

Total Revenues and Other Financing SourcesTotal Expenditures

Net Change in Fund BalanceBeginning Fund Balance - October 1,2017

Ending Fund Balance - September 30,2018

$ 322,516254.870

i- 67.646

$

$

s_

1,204,3891.190.066

14,32353.323

67.646

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JULY 31, 2019

NOTE 11. NORTH HARRIS COUNTY REGIONAL WATER AUTHORITY

The District is located within the boundaries of the North Han-is County Regional WaterAuthority (the "Authority"). The Authority was created under Article 16, Section 59 of theTexas Constitution by House Bill 2965 (the "Act"), as passed by the seventy-fifth TexasLegislahxre, in 1999. The Act empowers the Authority to provide for the conservation,preservation, protection, recharge and prevention of waste of groundwater, and for the reductionof groundwater withdrawals. The Authority has entered into a contract for purchase of surfacewater from the City of Houston, Texas to assure that its participants comply with the Harris-Galveston Subsidence District ("HGSD") pumpage requirements, which mandate that disto-ictswithin HGSD boundaries, including the District, convert a percentage of their water use tosurface water over a period of time.

The Authority currently charges a fee, based on the amount of water pumped from a well, to theowner of wells located within the boundaries of the Authority, unless exempted. This feeenables the Authority to fulfill its purpose and regulatory functions. The rate at July 31, 2019was $3.85 per 1,000 gallons of water pumped from each well. The District recorded anexpenditure of $2,816,995 for fees assessed during the current fiscal year.

The District started purchasing water from the Authority in December of 2010. The rate at July31, 2019 was $4.30 per 1,000 gallons of water purchased. The Distorict recorded an expenditureof $945,369 for water purchased from the Authority during the current fiscal year.

The District funded the constmction costs for the conversion to surface water based on theircapacity in the water supply facilities. The total cost of the project approved by the Authority forreimbursement was $894,644, which will be credited to the District over 30 years at a rate of 6%.The Disb-ict began taking monthly credits of $5,416 in November 2011.

Future repayments are as follows:

Fiscal Year Principal Interest Total2020

2021

2022

2023

2024

2024-20282029-2033

2034-20382039-2042

$ 17,78118,848

19,97921,17822,448

134,136179,504

240,217132,803

$

^

47,21446,14745,01643,81742,547

190,839145,47084,75812,746

$ 64,995

64,995

64,99564,995

64,995

324,975324,974

324,975145,549

$ 786,894 $ 658,554 $ 1,445,448

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JULY 31, 2019

NOTE 12. STRATEGIC PARTNERSHIP AGREEMENT

Effective December 20, 2007, the District entered into a Strategic Partnership Agreement("SPA") with the City of Houston, Texas. Under the SPA, and in accordance with Subchapter Fof Chapter 43 of the Texas Local Government Code, the City has aimexed the Disti-ict for thelimited purposes of applying the City's Planning, Zoning, Health, and Safety Ordinances withinthe District. Effective May 14, 2013, the District entered into the First Amended and RestatedStrategic Partnership Agreement with the City of Houston. This agreement confirms the termsof the original agreement and provides for the limited purpose annexation by the City ofadditional land in the District.

The District will continue to develop, to own, and to operate and maintain a water, wastewater,and drainage system in the District. The taxable property within the District is not liable for anypresent or future debts of the City, and current and future taxes levied by the City may not belevied on taxable property within the District. The City's municipal courts have jurisdiction toadjudicate criminal cases filed under the Planning, Zoning, Health and Safety Ordinances andcertain state laws. The District's assets, liabilities, indebtedness, and obligations will remain theresponsibility of the District during the period preceding full-purpose annexation. The City maynot annex the Disfa-ict for full purposes until eight years after at least 90 percent of the District'swater, wastewater and drainage facilities have been developed and the developer(s) reimbursedby the Disb-ict (or the City has assumed obligation for such reimbursement). The District willpay an annual $100 fee to the City for the provision of city services in lieu of full-purposeannexation. The qualified voters of the District may vote in City elections pursuant to LocalGovernment Code. The City is responsible for notifying the voters within the District.

The City shall impose a Sales and Use Tax within the boundaries of the District under the SPAon the receipts from the sale and use at retail of taxable items at the rate of one percent or the ratespecified under future amendments to Chapter 321 of the Tax Code. The City agrees to pay tothe District an amount equal to one-half of all Sales and Use Tax receipts generated within theDistrict. The sales tax became effective on January 1, 2008. The City agrees to deliver to theDistrict its share of the sales tax receipts within 30 days of the City receiving the funds from theState Controller's office. During the current fiscal year, the District recorded $43,805 in salestax receipts, of which $9,251 was receivable from the City.

The term of this SPA is 30 years from the effective date of December 20, 2007.

NOTE 13. UNREIMBURSED COSTS

As of July 31, 2019, five developers had advanced approximately $9,097,485 on behalf of theDistrict for easements, detention and water, sewer and drainage facilities currently used by theDistrict. This liability, and the related facilities, has been recorded in the Statement of NetPosition.

-35-


JULY 31, 2019

NOTE 14. INTERFUND BALANCES AND TRANSFERS

The Capital Projects Fund owes the General Fund $573,217 related to capital outlay projects.The General Fund owes the Debt Service Fund (Tax Fund) $2,419 for overpayment ofmaintenance tax collections. During the current fiscal year, the Capital Projects Fund transferred$3,187,816 to the General Fund to reimburse the General Fund for bond issuance costs, smartmeters installation and capital outlay related costs.

NOTE 15. RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to and destructionof assets; errors and omissions; and nahiral disasters for which the District carries commercialinsurance. There have been no significant reductions in coverage from the prior year andsettlements have not exceeded coverage in the past three years.

NOTE 16. USE OF SURPLUS FUNDS

On August 21, 2014, the District approved the use of surplus Capital Projects Fund monies inaccordance with Rule 30 T.A.C. 293.83(c)(3) of the Commission for the Oakcrest Lift Stationand 6-inch Force Main, Telge Road water line relocation and Water Plant Nos. 1 and 2hydropneumatic tank recoating. The Oakcrest Lift Station and 6-inch Force Main and WaterPlant Nos. 1 and 2 hydropneumatic tank recoating projects were completed in a prior fiscal year.During the current fiscal year, the District expended $396,209 for the Telge Road water linerelocation.

NOTE 17. SUBSEQUENT EVENTS

On October 22, 2019, the District closed on the sale of its $17,140,000 Unlimited Tax Bonds,Series 2019, with interest rates ranging from 2.00% to 4.00% and with final maturity date ofMay 1, 2043. The District used proceeds of the bonds to reimburse certain developers for theconstruction and engineering of water, wastewater and drainage facilities and pay bond issuancecosts.

-36-



REQUIRED SUPPLEMENTARY INFORMATION

JULY 31, 2019


SCHEDULE OF REVENUES, EXPENDITURES ANDCHANGES IN FUND BALANCE - BUDGET AND ACTUAL

FOR THE YEAR ENDED JULY 31,2019

REVENUESProperty TaxesSales Tax ReceiptsWater ServiceWastewater Sei-vice

Regional Water Authority FeesPenalty and InterestTap Connection and Inspection FeesInvestment Revenues


TOTAL REVENUES

EXPENDITURESServices Operations:

Professional FeesContracted ServicesPurchased Water ServicePurchased Wastewater ServiceUtilitiesRegional Water Authority AssessmentsRepairs and MaintenanceOther

Capital Outlay

TOTAL EXPENDITURES

EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES

OTHER FINANCING SOURCES(USES)Transfers In

NET CHANGE IN FUND BALANCE

FUND BALANCE - AUGUST 1, 2018

FUND BALANCE - JULY 31, 2019

$

$

OriginalBudget

1,376,88838,400

2,312,6002,411,9003,528,500

130,000743,000143,50065,00032,880

469,7001,897,828

775,300405,700449,000

2,491,8001,436,6001,086,2007,843,210

FinalAmended

Budget Actual

$ 1,689,18838,400

2,312,6002,411,9003,528,500

130,000743,000152,00065,00047,922

$ 1,727,34243,805

2,069,2652,319,2583,688,464

151,884808,040288,63064,99563,948

$ 469,7001,966,996

775,300405,700449,000

2,491,8002,456,6001,136,200

60,000

$ 552,5342,092,996

945,369277,441428,807

2,816,9954,394,9111,102,637

21,494

Variance

Positive

CNegative)

$ 38,1545,405

(243,335)(92,642)159,96421,88465,040

136,630(5)

16,026

$ 10,782,668 $ 11,118,510 $ 11,225,631 $ 107,121

$ (82,834)(126,000)(170,069)128,25920,193

(325,195)(1,938,311)

33,56338,506

$ 16,855,338 $ 10,211,296 $ 12,633,184 $ (2,421,888)

$_ (6,072,670) $ 907,214 $ (1,407,553) $ (2,314,767)

$ 7,783,210

$ 1,710,540

10,620,701

$ 1,000,000

$ 1,907,214

10,620,701

$ 3,187,816

$ 1,780,263

10,620,701

$ 2,187,816

$ (126,951)

1 12,331,241 $ 12,527,915 $ 12,400,964 $ (126,951)

See accompanying independent auditor's report.

-38-




SUPPLEMENTARY INFORMATION REQUIRED BY THE

WATER DISTRICT FINANCIAL MANAGEMENT GUIDE

JULY 31, 2019


SERVICES AND RATESFOR THE YEAR ENDED JULY 31,2019

1. SERVICES PROVIDED BY THE DISTRICT DURING THE FISCAL YEAR:

xx

x

x

Retail WaterRetail WastewaterParks/Recreation

Solid Waste/Garbage

x Wholesale WaterWholesale WastewaterFire ProtectionFlood Control

x

x

DrainageIrrigationSecurityRoads

Participates in joint venture, regional system and/or wastewater service (other thanemergency interconnect)

Other (specify):

2. RETAIL SERVICE PROVIDERS

a. RETAIL RATES FOR A 5/8" METER (OR EQUWALENT):

Based on the rate order effective on August 17, 2018.

WATER:

MinimumCharge

$ 12.25

WASTEWATER: $27.75 *

SURCHARGE:Regional Water

Authority Fees

MinimumUsage

5,000

PlatRateY/N

N

Y

Rate per 1,000Gallons over

Minimum Use

$1.25$ 1.75$2.25$2.75$3.25

$4.30

Usage Levels

5,001 to 10,00010,001 to 15,00015,001 to 20,00020,001 to 25,00025,00 land up

1,000 and up

District employs winter averaging for wastewater usage? xYes No

Total monthly charges per 10,000 gallons usage: Water: $18.50 Wastewater: $27.75 Surcharge: $43.00 Total: $89.25

* Includes solid waste disposal


-40-



2. RETAIL SERVICE PROVIDERS (Continued)

b. WATER AND WASTEWATER RETAIL CONNECTIONS: (Unaudited)

Meter Size

Unmetered

^3/4";5

1V2"2"3"4"6"8"10"

Total Water Connections

Total Wastewater Connections

TotalConnections

6.626735J3

108_i_21

7.486

7.311

ActiveConnections

6.59973513

108_!_!1

7.459

7.311

ESFCFactor

x 1.0

x 1.0

x 2.5

x 5.0x 8.0x 15.0x 25.0x 50.0x 80.0x 115.0

x 1.0

ActiveESFCs

6.5991.838

_65

864

_15

_50

_5Q

9.481

7.311

3. TOTAL WATER CONSUMPTION DURING THE FISCAL YEAR ROUNDEDTO THE NEAREST THOUSAND: (Unaudited)

Gallons pumped into system: 782,783,000

Gallons purchased: 219,814,000

Gallons billed to customers: 923,671,000

Water Accountability Ratio: 92%(Gallons billed and sold/Gallonspumped and purchased)

From: North Harris County RegionalWater Authority


-41-



4.

5.

STANDBY FEES (authorized only under TWC Section 49.231):

Does the District have Debt Service standby fees? Yes No X

Does the District have Operation and Maintenance standby fees? Yes No X

LOCATION OF DISTRICT:

Is the District located entirely within one county?

Yes X No

County or Counties in which Disb-ict is located:

Harris County, Texas

Is the District located within a city?

Entirely Partly Not at all x

Is the District located within a city's extra territorial jurisdiction (ETJ)?

Entirely X Partly _ Not at all

ETJ's in which District is located:

City of Houston, Texas.

Are Board Members appointed by an office outside the District?

Yes No X


-42-


GENERAL FUND EXPENDITURESFOR THE YEAR ENDED JULY 31,2019

PROFESSIONAL FEES:Arbita-ageAuditingEngineeringLegal

TOTAL PROFESSIONAL FEES

PURCHASED SERVICES FOR RESALE:Purchased Water ServicePurchased Wastewater Service

TOTAL PURCHASED SERVICES FOR RESALE

$

$

10,90028,400

233,509279,725

552,534

945,369277,441

$ 1,222,810

CONTRACTED SERVICES:BookkeepingOperations and BillingSolid Waste DisposalSecurityTax Collector

TOTAL CONTRACTED SERVICES

$ 21,616156,000

1,216,885697,298

1,197

$ 2,092,996

UTILITIES:ElectricityTelephone

TOTAL UTILITIES

$

$

375,37353,434

428,807

REPAIRS AND MAINTENANCE:WaterWastewaterDetention Ponds

Landscaping

TOTAL REPAIRS AND MAINTENANCE

$ 3,452,891684,084147,704110,232

$ 4,394,911


-43-


GENERAL FUND EXPENDITURESFOR THE YEAR ENDED JULY 31,2019

ADMINISTRATIVE EXPENDITURES:Director FeesInsurance

Legal NoticesOffice Supplies and PostagePayroll TaxesTravel and MeetingsOther

TOTAL ADMINISTRATIVE EXPENDITURES

CAPITAL OUTLAY -Capitalized Assets

TAP CONNECTIONS

$

$

$

$

16,50069,0531,712

93,6541,2626,910

25,412

214,503

21,494

371,039

OTHER EXPENDITURES:Chemicals

Inspection FeesLaboratory FeesPermit Fees

Regional Water Authority AssessmentsRegulatory Assessment (TCEQ)Sludge Hauling

TOTAL OTHER EXPENDITURES

TOTAL EXPENDITURES

$ 173,924129,40575,08122,321

2,816,99521,42094,944

$ 3,334,090

$ 12,633,184


-44-


INVESTMENTSJULY 31,2019

Funds

GENERAL FUNDTexPoolTexas CLASSCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of Deposit

TOTAL GENERAL FUND

DEBT SERVICE FUND .TexPoolTexas CLASSCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of DepositCertificate of Deposit

TOTAL DEBT SERVICE FUND

CAPITAL PROJECTS FUNDTexas CLASS

Texas CLASS

Texas CLASS

Texas CLASS

TOTAL CAPITAL PROJECTS FUND

TOTAL - ALL FUNDS

Identification or Interest MaturityCertificate Number Rate Date

XXXX0002 Varies DailyXXXX0001 Varies DailyXXXX6831 2.75% 05/12/20XXXX9519 2.50% 06/11/20XXXX0555 2.50% 10/19/19XXXX0746 2.55% 11/04/19XXXX2069 2.58% 07/09/20XXXX6119 2.70% 03/30/20XXXX0263 2.37% 11/06/19XXXX9696 2.65% 01/10/20XXXX8595 2.65% 02/21/20XXXX4774 2.45% 12/06/19XXXX0125 2.40% 08/08/19XXXX8206 2.60% 11/14/19XXXX5911 2.75% 08/07/19XXXX1052 2.40% 09/20/19

XXXX0003 Varies DailyXXXX0002 Varies DailyXXXX9083 2.60% 04/26/20XXXX2390 2.75% 03/31/20XXXX2980 2.60% 04/28/20XXXX1996 2.65% 03/19/20XXXX5922 2.60% 03/16/20XXXX2186 2.62% 04/05/20XXXX2213 2.71% 03/20/20XXXX9470 2.65% 03/31/20XXXX9204 2.65% 03/20/20XXXX6651 2.70% 04/01/20XXXX5992 . 2.60% ^ 03/16/20XXXX0166 2.60% 04/24/20XXXX5905 2.60% 04/24/20XXXX4166 2.74% 04/24/20

XXXX0003 Varies DailyXXXX0007 Varies DailyXXXX0008 Varies DailyXXXX0009 Varies Daily

Balance atEnd of Year

$

$

$

$

$

5,5738,621,702

240,000240,000240,000240,000240,000240,000240,000240,000240,000240,000240,000240,000240,000240,000

11,987,275

47,0329,153,612

240,000240,000240,000240,000240,000240,000240,000240,000240,000240,000240,000240,000240,000240,000

12,560,644

5,208,058524,877

6,596,4266,032,316

Accrued

faterest

Receivable at

End of Year

1,428822

4,6854,510

3562,1304,1613,5202,7883,8185,6344,4286,4734,956

$

$

49,709

1,6412,1701,5902,3002,3971,9982,3702,0912,3172,1302,3421,6581,6581,749

$

$

28,411

18,361,677 S -0-

42,909,596 $ 78,120


-45-


TAXES LEVIED AND RECEIVABLEFOR THE YEAR ENDED JULY 31,2019

Maintenance Taxes Debt Service Taxes

TAXES RECEIVABLE -AUGUST 1,2018Adjustments to Beginning

Balance

Original 2018 Tax LevyAdjustment to 2018 Tax Levy

TOTAL TO BEACCOUNTED FOR

TAX COLLECTIONS:Prior Years

Current Year

TAXES RECEIVABLE -JULY 31, 2019

$ 17,491

24,874 $ 42,365

$ 1,644,03353,044

$ 1,739,442

$ 37,8411,689,501

$ 12,100

$ 190,694

34,679 $ 225,373

$ 12,421,5861,697,077 400,773 12,822,359

$ 13,047,732

$ 177,0141,727,342 12,765,116 12,942,130

$ 105,602

TAXES RECEIVABLE BYYEAR:201820172016201520142013 and prior

TOTAL

$

$

7,5762,7601,14523969

311

12,100

$ 57,24324,15111,6163,5361,7517,305

$ 105,602


-46-


TAXES LEVIED AND RECEIVABLEFOR THE YEAR ENDED JULY 31,2019

PROPERTY VALUATIONS:Land

ImprovementsPersonal PropertyExemptions

TOTAL PROPERTY

VALUATIONS

2018 2017 2016 2015

$ 14,715,505 $ 21,647,191 $ 24,936,473 $ 16,122,9801,871,536,950 1,688,703,703 1,518,231,264 1,301,009,784

59,591,327 62,542,940 64,128,068 38,792,452(60,487,164) (43,994,719) (50,935,010) (43,368,379)

$1,885,356,618 $1,728,899,115 $1,556,360,795 $1,312,556,837

TAX RATES PER $100VALUATION:Debt Service

Maintenance **

$ 0.68 $0.09

0.70 $0.08

0.710.07

$ 0.740.05

TOTAL TAX RATES PER$100 VALUATION

ADJUSTED TAX LEVY*

^

PERCENTAGE OF TAXESCOLLECTED TO TAXESLEVTED

$- 0.77 $_ 0.78 $_ 0.78 1_ 0.79

$ 14,519,436 $ 13,493,379 $ 12,134,220 $ 10,368,887

99.55 % 99.80 % 99.89 % 99.96 %

* Based upon the adjusted tax at the time of the audit for the fiscal year in which the tax was levied.

** Maintenance Tax - Maximum tax rate of $0.50 per $100 of assessed valuation was approved byvoters on May 7, 1988.


-47-


LONG-TERM DEBT SERVICE REQUIREMENTSJULY 31, 2019

SERIES-2008

Due During FiscalYears Ending

July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

PrincipalDue

May 1

Interest Due

November I/

May 1 Total

$ 515,000 $ 20,600 $ 535,600

$ 515,000 $ 20,600 $ 535,600


-48-



SERIES-2009


July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

PrincipalDue

May 1

Interest Due

November I/

May 1 Total

$ 505,000 $ 20,200 $ 525,200

$ 505,000 $ 20,200 $ 525,200


-49-



REFUNDING SERIES-2010


July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

PrincipalDue

May 1

$ 855,000890,000920,000955,000

$

Interest Due

November I/

May 1

117,65089,86360,93731,037

Total

$

3

972,650979,863980,937986,037

$ 3,620,000 $ 299,487 $ 3,919,487


-50-


LONG-TERM DEBT SERVICE REQUIREMENTSJULY 31,2019

SERIES-2013


July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

$

PrincipalDue

May 1

380,000395,000415,000430,000445,000465,000485,000505,000525,000545,000570,000590,000615,000640,000665,000

Interest Due

November I/

May 1

$ 230,932219,531207,681195,231182,332168,981155,031140,481125,332109,58193,23176,13158,43239,98120,782

$

Total

610,932614,531622,681625,231627,332633,981640,031645,481650,332654,581663,231666,131673,432679,981685,782

$ 7,670,000 $ 2,023,670 $ 9,693,670


-51-





July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

PrincipalDue

May 1

$ 1,095,0001,140,0001,185,0001,235,000

$

Interest Due

November I/

May 1

151,750118,90084,70043,225

Total

$ 1,246,7501,258,9001,269,7001,278,225

$ 4,655,000 $ 398,575 $ 5,053,575


-52-





July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

$

PrincipalDue

May 1

1,415,0001,470,0001,510,0001,575,0002,990,0003,120,0001,740,000

720,000

Interest Due

November I/

May 1

$ 473,625431,175387,075341,775287,650183,00073,80021,600

Total

$ 1,888,6251,901,1751,897,0751,916,7753,277,6503,303,0001,813,800

741,600

$ 14,540,000 $ 2,199,700 $ 16,739,700


-53-



SERIES-2015-A


July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

$

PrincipalDue

May 1

1,335,0001,335,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,0001,330,000

Interest Due

November I/

May 1

$ 849,838796,438769,738743,138713,212679,963646,712606,813566,912527,012487,112447,212405,650364,088320,862277,638232,750187,862141,31294,76248,212

$

Total

2,184,8382,131,4382,099,7382,073,1382,043,2122,009,9631,976,7121,936,8131,896,9121,857,0121,817,1121,777,2121,735,6501,694,0881,650,8621,607,6381,562,7501,517,8621,471,3121,424,7621,378,212

$ 27,940,000 $ 9,907,236 $ 37,847,236


-54-




\


July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

$

PrincipalDue

May 1

5,0001,085,0001,125,0001,175,0001,240,0001,305,0001,370,0002,515,0001,520,0001,590,0001,675,0001,750,0001,835,000

Interest Due

November I/

May 1

$ 712,431712,331679,782639,000592,000542,400490,200435,400334,800274,000210,400143,40073,400

$

Total

717,4311,797,3311,804,7821,814,0001,832,0001,847,4001,860,2002,950,4001,854,8001,864,0001,885,4001,893,4001,908,400

$ 18,190,000 $ 5,839,544 $ 24,029,544


-55-



SERIES-20 17


July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

$

PrincipalDue

May 1

1,025,0001,025,0001,025,0001,025,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,0001,030,000

1,030,000

Interest Due

November I/

May 1

$ 665,038624,038603,538583,038542,038521,438500,838477,662454,488428,736400,412369,512338,612307,712275,525243,338209,862176,388141,625106,86272,100

36,050

$

Total

1,690,0381,649,0381,628,5381,608,0381,572,0381,551,4381,530,8381,507,6621^484,4881,458,7361,430,4121,399,5121,368,6121,337,7121,305,5251,273,3381,239,8621,206,3881,171,6251,136,8621,102,100

1,066,050

$ 22,640,000 $ 8,078,850 $ 30,718,850


-56-



SERIES-2018


July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

$

PrincipalDue

May 1

865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000865,000

865,000865,000865,000

Interest Due

November I/

May 1

$ 659,563642,263624,963599,013573,063547,113521,162495,212469,262443,312417,362391,412364,382336,268308,156278,962248,688218,412188,138157,862126,506

95,15063,79432,438

$

Total

1,524,5631,507,2631,489,9631,464,0131,438,0631,412,1131,386,1621,360,2121,334,2621,308,3121,282,3621,256,4121,229,3821,201,2681,173,1561,143,9621,113,6881,083,4121,053,1381,022,862

991,506

960,150928,794897,438

$ 20,760,000 $ 8,802,456 $ 29,562,456


-57-



SERIES-201 8-A


July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

$

PrincipalDue

May 1

335,000335,000335,000335,000335,000335,000335,000335,000335,000335,000335,000335,000335,000335,000335,000335,000330,000330,000330,000330,000330,000

330,000330,000330,000

Interest Due

November I/

May 1

$ 253,999247,299240,599230,549220,499210,449200,400190,350180,300170,250160,200150,150139,682128,794117,906106,60094,87683,32671,77660,22648,262

36,30024,33812,376

$

Total

588,999582,299575,599565,549555,499545,449535,400525,350515,300505,250495,200485,150474,682463,794452,906441,600424,876413,326401,776390,226378,262

366,300354,338342,376

$ 8,000,000 $ 3,379,506 $ 11,379,506


-58-



ANNUAL REQUIREMENTSFOR ALL SERIES


July 31

202020212022202320242025202620272028202920302031203220332034203520362037203820392040

204120422043

Total

Principal Due

$ 8,330,0008,540,0008,710,0008,925,0008,235,0008,450,0007,155,0007,300,0005,605,0005,695,0005,805,0005,900,0006,010,0004,200,0004,225,0003,560,0003,555,0003,555,0003,555,0003,555,0003,555,000

2,225,0001,195,0001,195,000

Total

Interest Due

$ 4,155,6263,881,8383,659,0133,406,0063,110,7942,853,3442,588,1432,367,5182,131,0941,952,8911,768,7171,577,8171,380,1581,176,8431,043,231

906,538786,176665,988542,851419,712295,080

167,50088,13244,814

Total

Principal andInterest Due

$ 12,485,62612,421,83812,369,01312,331,00611,345,79411,303,3449,743,1439,667,5187,736,0947,647,8917,573,7177,477,8177,390,1585,376,8435,268,2314,466,5384,341,1764,220,9884,097,8513,974,7123,850,080

2,392,5001,283,1321,239,814

$ 129,035,000 $ 40,969,824 $ 170,004,824


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CHANGE IN LONG-TERM BOND DEBTFOR THE YEAR ENDED JULY 31,2019

Description

Northwest Harris County Municipal Utility District No. 5Unlimited Tax Bonds - Series 2008

Northwest Han-is County Municipal Utility District No. 5Unlimited Tax Bonds - Series 2009

Northwest Harris County Municipal Utility District No. 5Unlimited Tax Refunding Bonds - Series 2010

Bonds

Original OutstandingBonds Issued August 1, 2018

13,090,000

11,470,000

$ 13,505,000 $ 1,005,000

980,000

4,880,000

Northwest Harris County Municipal Utility District No. 5Unlimited Tax Bonds - Series 2013 9,660,000 8,035,000

Northwest Harris County Municipal Utility District No. 5Unlimited Tax Refunding Bonds - Series 2014 9,265,000 5,705,000


Northwest Harris County Municipal Utility District No. 5Unlimited Tax Bonds - Series 2015-A 31,945,000 29,275,000


Northwest Harris County Municipal Utility District No. 5Unlimited Tax Bonds - Series 2017 24,690,000 23,665,000

Northwest Harris County Municipal Utility District No. 5Unlimited Tax Bonds - Series 2018 20,760,000

Northwest Harris County Municipal Utility District No. 5Unlimited Tax Park Bonds - Series 2018-A 8,000,000

TOTAL $ 178,235,000


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$ 107,655,000

Current Year Transactions

Retirements

Bonds Sold Principal Interest

Bonds

OutstandingJuly 31,2019 Paying Agent

$

20,760,000

8,000,000

$ 490,000 $ 40,200 $

475,000

1,260,000

365,000

1,050,000

1,375,000

1,335,000

5,000

1,025,000

38,012

158,600

241,881

183,250

514,875

903,238

712,531

706,038

417,723

160,867

$ 28,760,000 $ 7,380,000 $ 4,077,215 $

515,000

505,000

3,620,000

7,670,000

4,655,000

14,540,000

27,940,000

18,190,000

22,640,000

20,760,000

8,000,000

129,035,000

Wells Fargo Bank N.A.Houston, TX



The Bank of New York

Mellon Trust Company, N.A.Dallas, TX










Mellon Trust Company, N.A.

Dallas, TX


Mellon Tmst Company, N.A.Dallas, TX




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CHANGE IN LONG-TERM BOND DEBTFOR THE YEAR ENDED JULY 31,2019

Bond Authority:

Amount Authorized by Voters

Amount Issued

Remaining to be Issued

Water, SanitarySewer, Drainageand Refunding*

$ 243,900,000

192,895,000

Park Bonds

$ 8,000,000

8,000,000

$ 51,005,000 $ -0-

Debt Service Fund cash and investment balances as of July 31, 2019: $ 12,582,736

Average annual debt service payment (principal and interest) for remaining termof all debt: $ 7,083,534

See Note 3 for interest rates, interest payment dates and maturity dates.

*A11 bonds are secured with tax revenues. Bonds in this category may also be secured withother revenues in combination with taxes.


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COMPARATFSÊ SCHEDULE OF REVENUE AND EXPENDITURESGENERAL FUND - FIVE YEARS

Amounts

REVENUESProperty TaxesSales Tax ReceiptsWater Service

Wastewater Service

Regional Water Authority FeesPenalty and InterestTap Coimection and Inspection FeesInvestment Revenues


TOTAL REVENUES

EXPENDITURESProfessional Fees

Contracted ServicesPurchased Water Service

Purchased Wastewater ServiceUtilitiesRegional Water Authority AssessmentsRepairs and MaintenanceOther

Capital OutlayBond Issuance Costs

TOTAL EXPENDITURES

EXCESS (DEFICIENCY) OF REVENUESOVER (UNDER) EXPENDITURES

OTHER FINANCING SOURCES (USES)Transfers In (Out)Contributed by Other Governments

TOTAL OTHER FINANCING SOURCES (USES)


BEGINNING FUND BALANCE

ENDING FUND BALANCE

$

2019 2018

$ 1,405,60442,485

2,157,6442,174,0593,491,139

88,503943,499147,82964,995

198,048

$

$ (1,407,553) $ 518,677

$ 3,187,816 $ 203,523

$ 1,780,263

10,620,701

$ 722,200

9,898,501

2017

1,727,34243,805

2,069,2652,319,2583,688,464

151,884808,040288,63064,99563,948

$ 11,225,631 $ 10,713,805 $ 9,434,294

1,114,00832,386

2,091,1272,009,8862,896,796

96,148840,26046,78164,995

241,907

$ 552,534 $ 505,866 $ 430,9222,092,996 1,850,876 1,683,820945,369 766,842 649,222277,441 369,515 288,415428,807 438,673 442,731

2,816,995 2,572,637 2,049,8464,394,911 1,587,833 1,324,6491,102,637 1,240,852 886,559

21,494 793,796 160,69268,238 85,379

$ 12,633,184 $ 10,195,128 $ 8,002,235

$ 1,432,059

$

$ 3,187,816 $ 203,523 $ -0-

$ 1,432,059

8,466,442

$ 12,400,964 $ 10,620,701 $ 9,898,501


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Percentage of Total Revenues

2016 2015 2019 2018 2017 2016 2015

$ 666,693 $ 365,20422,054 24,071

1,849,447 1,451,5791,842,170 1,671,8682,227,266 1,616,220

74,783 67,709' 889,455 994,698

13,703 5,55364,995 64,995

204,650 104,560

$ 7,855,216 $ 6,366,457

15.3 %0.3

18.420.732.91.47.22.60.60.6

13.20.4

20.120.332.60.88.81.40.61.8

% 11.80.3

22.221.330.71.08.90.50.72.6

% 8.40.3

23.523.528.41.0

11.30.20.82.6

% 5.7 %0.4

22.826.325.41.1

15.60.11.01.6

100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

$ 402,834 $ 387,4961,539,550 1,459,265586,376 424,293290,517 321,740485,804 464,141

1,452,404 1,187,144908,491 1,052,732844,833 841,937308,097 52,388

6,833 61,029

$ 6,825,739 $ 6,252,165

4.918.68.42.53.8

25.139.29.80.2

% 4.717.37.23.44.1

24.014.811.67.40.6

% 4.617.86.93.14.7

21.714.09.41.70.9

% 5.119.67.53.76.2

18.511.610.83.90.1

% 6.122.96.75.17.3

18.616.513.20.81.0

%

112.5 % 95.1 % 84.8 % 87.0 % 98.2 %

$ 1,029,477 $ 114,292 12.5) % 4.9 % 15.2 % 13.0 % 1.8 %

$

$

14,233315,210

1,358,920

7,107,522

$

$ 329,443 $ -0-

$ 114,292

6,993,230

$ 8,466,442 $ 7,107,522


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COMPARATIVE SCHEDULE OF REVENUE AND EXPENDITURESDEBT SERVICE FUND - FIVE YEARS

REVENUESProperty TaxesPenalty and InterestInvestment Revenues

Miscellaneous Revenues

TOTAL REVENUES

EXPENDITURESTax Collection ExpendituresDebt Service PrincipalDebt Service Interest and Fees

Bond Issuance Costs

TOTAL EXPENDITURES

EXCESS OF REVENUESOVER EXPENDITURES

OTHER FINANCING SOURCES (USES)Refunding BondsPayment to Refunded Bond Escrow AgentBond Premium

TOTAL OTHER FINANCING SOURCES, NET


BEGINNING FUND BALANCE

ENDING FUND BALANCE

TOTAL ACTIVE RETAIL WATERCONNECTIONS

TOTAL ACTIVE RETAIL WASTEWATERCONNECTIONS

Amounts

2019

$ 12,942,130129,654318,256

249

$ 138,4447,380,0004,082,715

$

$ -0-

7,459

2018

$ 12,282,39590,007

174,758213

$ 135,3347,695,0003,545,929

$

$ -0-

$ 1,789,130 $ 1,171,110

10,824,436 9,653,326

$ 12,613,566 $ 10,824,436

7,012

2017

$ 11,277,13161,64064,529

28

$ 13,390,289 $ 12,547,373 $ 11,403,328

$ 119,1896,625,0003,065,024

$ 11,601,159 $ 11,376,263 $ 9,809,213

$ 1,789,130 $ 1,171,110 $ 1,594,115

$

7,311 6,837

$ -0-

$ 1,594,115

8,059,211

$ 9,653,326

6,504

6,348


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Percentage of Total Revenues

2016

$ 9,705,84934,92721,709

2015

$ 8,822,50138,6645,605

$ 9,762,485 $ 8,866,770

2019 2018 2017 2016 2015

96.6 % 97.9 % 98.9 % 99.4 % 99.5 %1.0 0.7 0.5 0.4 0.42.4 1.4 0.6 0.2 0.1

100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

$ 97,1004,940,0002,941,588

510,621

$ 104,9454,575,0002,873,754

488,039

$ 8,489,309 $ 8,041,738

1.0 %55.130.5

86.6 %

1.1 %61.328.3

90.7 %

1.0 %58.126.9

86.0 %

1.050.630.15.2

% 1.251.632.45.5

%

86.9 % 90.7 %

$ 1,273,176 $ 825,032 13.4 % 9.3 % 14.0 % 13.1 % 9.3 %

$ .18,375,000 $ 17,475,000(19,949,831) (17,670,486)2,085,452 684,167

$ 510,621 $ 488,681

$ 1,783,797 $ 1,313,713

6,275,414 4,961,701

$ 8,059,211 $ 6,275,414

5,991 5,407

5,862 5,285


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BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTSJULY 31, 2019

District Mailing Address - Northwest Harris County Municipal Utility District No. 5c/o Smith, Murdaugh, Little & Bonham, L.L.P.2727 Alien Parkway, Suite 1 100Houston, TX 77019

District Telephone Number - (713) 652-6500

Board Members

JeffCollins

Larry Milberger

James Adams

Charles Fischer

H. Bruce Gallun

Term ofOffice

(Elected orAppointed)

05/1805/22

(Elected)

05/1605/20

(Elected)

05/1805/22

(Elected)

05/1605/20

(Elected)

0571605/20

(Elected)

Fees of Officefor the year

endedJuly 31.2019

$ 1,800

$ 6,150

$ 1,800

$ 5,100

$ 1,650

ExpenseReimbursementsfor the year ended

July 31.2019

$ -0-

$ 2,281

$ -0-

$ 1,775

$ -0-

Title

President

Vice President

Secretary

Treasurer

Director

Note: No Director has any business or family relationships (as defined by the Texas Water Code) with majorlandowners in the District, with the District's developer or with any of the District's consultants exceptfor Director Collins. Director Collins is a shareholder in LJA Engineering which is currently providingservices to the District. Director Collins has agreed to abstain from voting on certain engineering issuesbecause of the possible financial effect on this company.

Submission date of most recent District Registration Form (TWC Sections 36.054 and 49.054): October1,2018.

The limit on Fees of Office that a Director may receive during a fiscal year is $7,200 as set by BoardResolution (TWC Section 49.060) on July 17, 2003. Fees of Office are the amounts actually paid to aDirector during the District's current fiscal year.


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BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTSJULY 31,2019

Consultants:

Smith, Murdaugh, Little & Bonham, L.L.P.

McCall Gibson Swedlund Barfoot PLLC

Date Hired

04/10/7501/21/88

07/16/87

Fees for theyear ended

July 31..2019

$ 323,351$ 714,589$ 20,907

$ 28,400$ 33,600

Title

General CounselBond Counsel

Delinquent TaxAttorney

AuditorBond Related

Municipal Accounts & Consulting, L.P. 11/01/16 $ 28,815$ 6,500

BookkeeperBond Related

Costello, Inc. 03/27/03 $ 539,775$ 94,798

EngineerBond Related

Masterson Advisors LLC

Mark BurtonGhia Lewis

Municipal District Services

Mike Arterbum, RTA

Harris County Tax Assessor/Collector

04/19/18

10/20/1610/20/16

12/01/07

09/15/16

07/01/06

$ 343,882

$$

-0--0-

$ 4,775,070

$ -0-

$ 13,780

FinancialAdvisor

InvestmentOfficers

Operator

TaxAssessor

TaxAssessor/Collector


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Documents

Northwest Harris County Municipal Utility District No. 5 ...€¦ · 14700 • Transfer &otn Construction Total Other Income Other Expense 16910 • Hurricane Hanrey Expenses 19100