Annual Comprehensive Financial Report
For the Fiscal Year Ended August 31, 2024
Gulf Coast Water Authority * Texas City, Texas
Mustang Reservoir
Annual Comprehensive Financial Report
For the Fiscal Year Ended August 31, 2024
Gulf Coast Water Authority
Texas City, Texas
Prepared by:
Brandon Wade, MPA, PE General Manager / CEO
David E. Davis Jr. CPA Chief Financial Officer / Assistant General Manager
Deborah Jordan, CPA, CPFIM Finance Director
Nathan Johnson, CPA Assistant Controller
Guadalupe Hinojosa, CPA Assistant Controller
INTRODUCTORY SECTION
February14,2025
TotheBoardofDirectors
WearepleasedtosubmittheAnnualComprehensiveFinancialReport(the“ACFR”)oftheGulfCoastWaterAuthority(the “Authority”)forthefiscalyearendedAugust31,2024.ThepurposeoftheACFRistoprovidereliablefinancialinformation abouttheAuthoritytotheAuthority’sBoardofDirectors,customers,andotherinterestedparties.TheAuthority’sAccounting Department has prepared the ACFR in accordance with generally accepted accounting principles (“GAAP”). Management assumes full responsibility for the completeness and reliability of the information contained in the ACFR, based upon a comprehensive framework of internal controls that are established for this purpose. Because the cost of internal controls shouldnotexceedanticipatedbenefits,theobjectiveofsuchinternalcontrolsistoprovidereasonable,ratherthanabsolute, assurancethatthefinancialstatementsarefreeofanymaterialmisstatements.
Ourauditor,WhitleyPenn,LLP,CertifiedPublicAccountants,hasissuedanunmodified(“clean”)opinionontheAuthority’s financial statements for the year ended August 31, 2024. The independent auditors’ report is located at the front of the financialsectionoftheACFR.
Management’s Discussion and Analysis (“MD&A”) immediately follows the independent auditors’ report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittalandshouldbereadinconjunctionwithit.
Profile of the Government Agency
TheGulfCoastWaterAuthority(thennamedtheGalvestonCountyWaterAuthority)wascreatedin1965bythe59thregular sessionoftheTexasLegislature.TheAuthorityisaconservationandreclamationdistrict,bodypoliticandcorporate,anda governmentalagencyoftheStateofTexascreatedandoperatingundertheprovisionsofaseriesofactscompiledasVernon’s AnnotatedTexasCivilStatutes,Article8280-121,enactedpursuanttotheprovisionsofSection59ofArticleXVIoftheTexas Constitution.
TheAuthorityprovideswaterforindustry,agriculture,andmunicipalitiesinBrazoria,FortBend,andGalvestoncounties.
ThebeginningsoftheAuthoritycanbetracedbackto1908withthecreationoftheCaneandRiceBeltIrrigationCompany andconstructionofapumpstationontheBrazosRiver.Intheearly1930s,additionalpumpstationsandre-liftstationson thesystemwereaddedaswellasextensionstothecanalsystem,eventuallyrunningthroughBrazoriaCountyandreaching intoGalvestonCounty.In1940,theBriscoeIrrigationSystemconsistingofanadditionalpumpstationontheBrazosandmore canalswereestablished.ThesetwooriginalsystemswerepurchasedbytheBrazosRiverAuthorityin1966and1967.In1988, theAuthorityboughttheCanalDivisionfromtheBrazosRiverAuthority.ThisallowedtheAuthoritytoprovidewatersupply forindustry,irrigation,and municipaluseinmostofthethree-countyareaofBrazoria,FortBend,and Galveston.In2006, theAuthoritypurchasedtheChocolateBayouWaterCompany’sassets,akaJuliffCanalSystem,whichincludedanotherpump stationontheBrazosRiveraswellaspumpstationsonthreebayousinBrazoriaCounty:Chocolate,MustangandHalls.
TheAuthorityisgovernedbyaten(10)memberBoardofDirectors,asestablishedbyThe83rd TexasLegislaturepassedHB 4168 sponsored by Representative Dennis Bonnen and becoming effective on June 18, 2015. The Board of Directors are appointedinthefollowingmanner:
Five(5)bytheGalvestonCountyCommissionersCourtwithtwo(2)beingrepresentativesofIndustry,one(1)being arepresentativeofMunicipalitiesandtwo(2)beingrepresentativesat-large;
Three(3)bytheBrazoriaCountyCommissionersCourtwithone(1)beingarepresentativeofIndustry,one(1)being arepresentativeofMunicipalitiesandone(1)beingarepresentativeofAgriculture;
Two(2)byFortBendCountyCommissionerswithone(1)beingarepresentativeofMunicipalitiesandone(1)being arepresentativeAt-Large.
Appointeesservetwo-yearterms.Thetermsarestaggeredwithfive(5)membersbeginningoneyearandfive(5)beginning thenextyear. TermofofficecoincideswiththeAuthority’sfiscalyear,beginningSeptember1st .
TheAuthority’soperationsaredividedintothreeseparateprimarywaterdeliveryandrevenuesourcesasdescribedbelow.
Canal Systems -TheAuthorityoperatesthreemaincanalsystems:theAmerican,Briscoe,andJuliff/ChocolateBayouCanal systems.Thisincludesapproximately276milesofmain-linecanalsandlaterals,andabout380,000ac-ft.ofwaterrightson the lower basin of the Brazos River. These arteries allow river water to be delivered to 1) approximately 17,000 acres of commercial and hybrid seed rice in Brazoria and Galveston Counties as well as a Rice Research Facility located outside of Alvin,Texas,aproviderofworld-widetechnologyforthericeindustry,2)industrialcustomersservedbytheCanalDivision includeINEOSOlefinsandPolymers,RiceTecandAscendPerformanceMaterials,3)municipalcustomersservedincludethe citiesofSugarLand,PearlandandMissouriCity,aswellasFt.BendWCID#2andPecanGroveMUD,and4)totheIndustrial andMunicipaldivisionsinGalvestonCounty.
Industrial Group -Promptedbylandsubsidencecausedbytheoverwithdrawalofgroundwater,aprivateventurebyTexas Cityindustriesinthelate1940’sconstructedanextensionoftheBriscoeandAmericancanalsystemtoprovidesurfacewater totherapiditygrowingindustrialcomplexfollowingWorldWarII.Throughacquisitionsandexchanges,theIndustrialDivision was acquired by the Authority in 1971. The Industrial Division operates an 8,700 acre-feet off-channel reservoir, a canal system,andapumpstationcontractedtodeliver73milliongallonsperday(MGD),withafirmcapacityof95milliongallons per day (MGD) of surface water per day to Texas City industries. Industrial customers served include DOW/Union Carbide Corp., Marathon Galveston Bay Refinery, Marathon Texas Refining, Valero Refining Texas, Eastman Chemical Company, AshlandSpecialtyChemicals,INEOS,andTopazEnergy.
Water Treatment –TheAuthorityownsandoperatestheThomasS.MackeyWaterTreatmentPlantlocatedinTexasCity.
The57.6million gallon perday (MGD) conventionalsurfacewaterplant serves13 waterutilities in GalvestonCounty. The plant was originally constructed by the City of Texas City in 1978 and acquired by theAuthority in 1983. The plant’s most recent expansion occurredin 2000. The Authority is planningan expansion toupgradesectionsoftheplantto ensurethe deliveryofthe7.9milliongallonperday(MGD)rerateapprovedbytheTCEQwhichisincludedinthe57.6milliongallonper day (MGD) Those customers include the cities of Texas City, La Marque, Galveston, Hitchcock, League City, GCWCID #1, GCWCID#8,GCWCID#12,GCFWD#6,GCMUD#12,BacliffMUD,BayviewMUDandSanLeonMUD.
The Authority’s Administrative Office is located in Texas City where management, financial, human resources,purchasing, andlandadministrationareprovided.TheAuthority’sBoardofDirectorsgenerallymeetsattheAdministrativeOfficeonthe third Thursday of each month. Actual meeting dates can be found on the Authority’s websitewww.gulfcoastwaterauthoritytx.gov.BoardmembersareactivelyengagedintheoperationoftheAuthoritythroughitsfour standing board committees, Finance & Insurance, Personnel & Compensation, Capital Projects Review, and Long-range Planning,andthreeAdHoccommittees,WaterResources,ContractReviewandFacilities.
ECONOMIC CONDITIONS AND OUTLOOK
The Local & Regional Economy. TheAuthorityanditscustomersarepartoftheGreaterHoustonMetropolitanArea.According totheBureauofLaborStatistics,theHoustonMetroAreaadded74,500totalnonfarmjobsovertheyearinJuly2024(year overyear).Ofthetwelvelargestmetropolitanareasinthecountry,Houstonrankedfourthinthenumberofjobsaddedover theyearandthirdinannualrateofjobgrowth.Localunemploymentincreasedoverthepastyearat4.9percentinJuly2024, which is higher than the state average of 4.1 percent and the national rate of 4.3 percent. Continued population growth withintheAuthority’sserviceareawillnecessitatetheAuthority’scontinuedquestforadditionalwatersuppliestomeetthis growingdemandformorewater.
GCWA’s strategicplan isdeveloped tosupportthisgrowththroughcapitalinvestmentwhilefocusing onratestabilization. Thestrategicplanhaslookedatawatersupplyfromotherriverbasins,seawaterdesalination,reuse,brackishdesalination, groundwaterfromtheCarrizo-Wilcoxaquifer,aswellasdevelopmentofadditionalsurfacewaterstorageontheBrazosRiver. At this time, further development of water supplies on the Brazos River presents the best alternative for the Authority to focusitsattention.Meanwhile,theAuthoritywillcontinuetoworkwiththeBrazosRiverAuthorityanditscustomersthrough annualpurchasesofinterruptiblestoredwatertomeetourcustomers’needs.TheAuthorityisworkingonalong-termcapital planwitha10-yearview.Wehopetomaketheplanpublicbynextyearatthistime.
GCWA’s REVENUE SOURCE
TheAuthoritydoesnotreceivemoneyfromtheStateofTexas,nordoesitcollectanytypeoftaxrevenue.Revenueisderived fromthesaleanddistributionofwater.Thisrevenuecoversthecostofoperationandmaintenanceaswellasrepaymentof outstandingdebt. Contractrevenuebondsaresoldtofinancelarge,capitalimprovementprojectsneeded tomaintainthe Authority’svastinvestmentininfrastructuretoinsurereliabledeliveryofwatertoitscustomers.
FINANCIAL INFORMATION
ManagementoftheAuthorityisresponsibleforestablishingandmaintaininganinternalcontrolstructuredesignedtoensure that the assets of the Authority are protected from loss, theft, or misuse and to ensure that adequate accounting data is compiledtoallowthepreparationoffinancialstatementsinconformitywithgenerallyacceptedaccountingprinciples.The internalcontrolstructureisdesignedtoprovidereasonableassurance,butnotabsoluteassurancethattheseobjectivesare met.Theconceptofreasonableassurancerecognizesthat:(1)thecostofacontrolshouldnotexceedthebenefitslikelyto bederived;and(2)thevaluationofcostsandbenefitsrequiresestimatesandjudgmentsbymanagement.
AsdemonstratedbythestatementsandschedulesincludedinthefinancialsectionofthisreportaswellastheManagement DiscussionandAnalysis(“MD&A”)alsoincludedherein,theAuthoritycontinuestomeetitsresponsibilityforsoundfinancial management. The Authority recommends that readers closely review each section of this report including the review providedbytheMD&AinordertohaveathoroughunderstandingoftheAuthority,itsactivities,financialposition,andresults ofoperations.
MAJOR INITIATIVES
Throughouttheyears,theneedforGCWAtoprovidewatertocustomershasgrown;however,ourfacilitiesandinfrastructure have not always kept up with this growth. In 2024, we were able to make improvements to existing infrastructure and construct new facilities. There were 62 completed projects this year, one was classified as major projects, and 61 were classifiedasminorprojects.Theseprojectstotaled$14.5Mandwillassistusincompletingourmissionofreliablydelivering watertoourcustomers.
ACKNOWLEDGEMENTS
Independent Audit. Section49.191oftheTexasWaterCoderequiresanannualauditoftheAuthority’saccountingrecords byacertifiedpublicaccountantorpublicaccountantholdingapermitfromtheTexasStateBoardofPublicAccountancyand selected by the Board of Directors. The firm Whitley Penn, LLP, wasselected by the Board for purpose of conducting the Authority’sannualaudit. Weappreciatetheirprofessionalism,timeliness,andassistanceincompletingthisreport.
Awards. TheGovernmentFinanceOfficersAssociationoftheUnitedStatesandCanada(“GFOA”)awardedtheCertificateof AchievementforExcellenceinFinancialReportingtotheAuthorityforitsAnnualComprehensiveFinancialReport(“ACFR”) for the fiscal year ended August 31, 2023. The Certificate of Achievement is a prestigious national award recognizing conformancewiththehigheststandardsforpreparationofstateandlocalgovernmentfinancialreports.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized ACFR, whose contents conform to program standards. Such as ACFR must satisfy both accounting principles generallyacceptedintheUnitedStatesofAmericaandapplicablelegalrequirements. ACertificateofAchievementisvalid foraperiodofoneyearonly. WebelieveourcurrentreportcontinuestoconformtotheCertificateofAchievementprogram requirementsandwearesubmittingittoGFOAtodetermineitseligibilityforanotherCertificateofAchievement.
Our Employees. We congratulate our employees for another successful year of operation. Without their dedication and professionalism,wecouldnothaveprovidedsuchahighlevelofservicetothecustomersoftheAuthority’sservicearea. In addition, the preparation of this Annual Comprehensive Financial Report on a timely basis was made possible by the dedicatedstaffoftheAuthority’sAccountingDepartment.
Sincerely,
BOARD OF DIRECTORS
As of August 31, 2024
POSITION&NAME
GALVESTONCOUNTYATLARGEPOSITIONNO.2
Mr.BradMatlock,P.E.
BRAZORIACOUNTYAGRICULTURALPOSITIONNO.1
Mr.CliffMock
GALVESTONCOUNTYATLARGEPOSITIONNO.1
Mr.DuaneCole
BRAZORIACOUNTYINDUSTRIALPOSITIONNO.1
Mr.BennieJonesJr.
GALVESTONCOUNTYINDUSTRIALPOSITIONNO.2
Mr.KevinD.Moore
FORTBENDCOUNTYATLARGEPOSITIONNO.1
Ms.TrishaFrederick,P.E.
GALVESTONCOUNTYINDUSTRIALPOSITIONNO.1
Mr.JimmyLaurito
FORTBENDCOUNTYMUNICIPALPOSITIONNO.1
Mr.AllenBogard
GALVESTONCOUNTYMUNICIPALPOSITIONNO.1
Mr.JodyHooks
BRAZORIACOUNTYMUNICIPALPOSITIONNO.1
Mr.DavidSohns
President 2024-2026
VicePresident 2024-2026
Secretary 2023-2025
Treasurer 2024-2026
AssistantSecretary 2024-2026
Director 2024-2026
Director 2023-2025
Director 2023-2025
Director 2023-2025
Director 2023-2025
September1,2023-August31,2024
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT
To the Audit Committee and Board of Directors Gulf Coast Water Authority
Report on the Audit of the Financial Statements
Opinion
WehaveauditedthefinancialstatementsofGulfCoastWaterAuthority(the“Authority”)asofandfortheyearendedAugust 31, 2024, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Authority as of August 31, 2024, and the changes in its financial position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller GeneraloftheUnitedStates.OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditor’sResponsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority and to meetourotherethicalresponsibilities,inaccordancewiththerelevantethicalrequirements relatingtoouraudit.Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
The Authority’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterial misstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordancewith GAASand Government Auditing Standards willalwaysdetecta materialmisstatementwhen itexists.The riskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmay involvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.Misstatementsare considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgmentmadebyareasonableuserbasedonthefinancialstatements.
InperforminganauditinaccordancewithGAASand Government Auditing Standards,we:
Exerciseprofessionaljudgmentandmaintainprofessionalskepticismthroughouttheaudit.
Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,and designandperformaudit procedures responsiveto thoserisks.Suchprocedures includeexamining,on atestbasis, evidenceregardingtheamountsanddisclosuresinthefinancialstatements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’sinternalcontrol.Accordingly,nosuchopinionisexpressed.
Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofsignificantaccountingestimates madebymanagement,aswellasevaluatetheoverallpresentationofthefinancialstatements.
Concludewhether,inourjudgment,thereareconditionsorevents,consideredintheaggregate,thatraisesubstantial doubtabouttheAuthority’sabilitytocontinueasagoingconcernforareasonableperiodoftime.
Wearerequiredtocommunicatewiththosechargedwithgovernanceregarding,amongothermatters,theplannedscope andtimingoftheaudit,significantauditfindings,andcertaininternalcontrol–relatedmattersthatweidentifiedduringthe audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis,pensionandotherpost-employmentbenefitsysteminformation,aslistedinthetableofcontents,bepresentedto supplementthebasicfinancialstatements.Suchinformation,althoughnotapartofthebasicfinancialstatements,isrequired bytheGovernmentalAccountingStandardsBoardwhoconsidersittobeanessentialpartoffinancialreportingforplacing thebasicfinancialstatementsinanappropriateoperational,economic,orhistoricalcontext.Wehaveappliedcertainlimited procedures to the required supplementary information in accordance with auditing standards generally accepted in the UnitedStatesofAmerica,whichconsistedofinquiriesofmanagementaboutthemethodsofpreparingtheinformationand comparingtheinformationforconsistencywithmanagement’sresponsestoourinquiries,thebasicfinancialstatements,and otherknowledge weobtainedduringourauditofthebasicfinancialstatements.Wedonotexpressanopinionorprovide anyassuranceontheinformationbecausethelimitedproceduresdo notprovideuswithsufficientevidencetoexpressan opinionorprovideanyassurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority’sbasicfinancialstatements.Thesupplementaryinformationsectionispresentedforpurposesofadditionalanalysis andisnotarequiredpartofthebasicfinancialstatements.
Theinformationinthesupplementarysectionistheresponsibilityofmanagementandwasderivedfromandrelatesdirectly totheunderlyingaccountingandotherrecordsusedtopreparethebasicfinancialstatements.Suchinformationhasbeen subjectedtotheauditingproceduresappliedintheauditofthebasicfinancialstatementsandcertainadditionalprocedures, includingcomparingandreconcilingsuchinformationdirectlytotheunderlyingaccountingandotherrecordsusedtoprepare thebasicfinancialstatementsortothebasicfinancialstatementsthemselves,andotheradditionalproceduresinaccordance with auditing standards generally accepted in the United States of America. In our opinion, the information in the supplementarysectionsisfairlystated,inallmaterialrespects,inrelationtothebasicfinancialstatementsasawhole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductoryandstatisticalsectionbutdoesnotincludethebasicfinancialstatementsandourauditor'sreportthereon.Our opinionsonthebasicfinancialstatementsdonotcovertheotherinformation,andwedonotexpressanopinionoranyform ofassurancethereon.
Inconnectionwithourauditofthebasicfinancialstatements,ourresponsibilityistoreadtheotherinformationandconsider whether a material inconsistency exists between the other information and the basic financial statements, or the other informationotherwiseappearstobemateriallymisstated.If,basedontheworkperformed,weconcludethatanuncorrected materialmisstatementoftheotherinformationexists,wearerequiredtodescribeitinourreport.
Other ReportingRequiredby Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated February 14, 2025, on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisionsoflaws,regulations,contracts,and grantagreementsandothermatters.Thepurposeofthatreportissolelyto describethescopeofourtestingofinternalcontroloverfinancialreportingandcomplianceandtheresultsofthattesting, andnottoprovideanopiniononinternalcontroloverfinancialreportingoroncompliance.Thatreportisanintegralpartof anauditperformedinaccordancewith Government Auditing Standards inconsideringtheAuthority’sinternalcontrolover financialreportingandcompliance.
Houston,Texas February14,2025
GULF
MANAGEMENT’S DISCUSSION AND ANALYSIS
ThemanagementofGulfCoastWaterAuthority(the“Authority”)offersreadersoftheAuthority’sfinancialstatementsthis narrativeoverviewandanalysisofthefinancialactivitiesoftheAuthorityfortheyearendedAugust31,2024. Weencourage readerstoconsidertheinformationpresentedhereinconjunctionwiththefinancialstatementsandthenotestothefinancial statements.
FinancialHighlights
TheAuthority’stotalassetsanddeferredoutflowsofresourcesexceededliabilitiesanddeferredinflowsofresourcesby $198,260,874. Of this amount, $115,167,536 represents net investment in capital assets; $3,889,458 is restricted net positionandtheremaining$79,203,880representsunrestrictednetposition.
TheAuthority’stotalnetpositionincreasedby$24,994,566from$173,266,308attheendoftheprioryearto anending net position of $198,260,874 at August 31, 2024. The increase is primarily due to the acquisition and construction of capitalassetsof$21.7million,federalgrantsreceivedof$5.9million,andinvestmentearningsof$4.4million,partially offsetbycapitalassetdepreciation/amortizationof$9.6millionandcapitalassetdisposalsof$2.5million.
Operating expenses for the Authority were $56,962,391 and were less than operating revenues of $72,225,809 by $15,263,418. Non-operatingrevenuesfortheAuthorityexceedednon-operatingexpensesby$9,731,148.
OverviewoftheFinancialStatements
TheManagementDiscussionandAnalysisisintendedtoserveasanintroductiontotheAuthority’sbasicfinancialstatements which consist of the following: 1) Statement of Net Position, 2) Statement of Revenues, Expenses, and Changes in Net Position, 3) Statement of Cash Flows, and 4) Notes to the Financial Statements. This report also includes supplementary informationintendedtofurnishadditionaldetailtosupportthebasicfinancialstatementsthemselves.
The statementof net position presentsas of a specificdate informationon the Authority’s assets,deferredoutflowsof resources, liabilities, and deferred inflows of resources with the difference between the four reported as net position. Increasesor decreasesin net positionmay serveas a usefulindicatorof whetherthe financialposition oftheAuthorityis improvingordeteriorating.
Thestatement ofrevenues, expenses, and changes innetpositionpresents informationshowinghowtheAuthority’snet positionchangedduringthemostrecentfiscalyear.Allchangesinnetpositionarereportedassoonastheunderlyingevent giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, some revenues and expenses reportedinthisstatementresultincashflowsinfuturefiscalperiods(e.g.,earnedbutunusedvacationleave).
Since the Authority follows enterprise fund accounting and reporting requirements, there is a statement of cash flows included as part of the basicfinancial statements. The accompanying notes to the financial statements provide required disclosuresandotherinformationthatisessentialtoafullunderstandingofdataprovidedinthestatements.
FinancialAnalysis
Netpositionmayserveovertimeasausefulindicatorofafinancialstatementposition.InthecaseoftheAuthority,assets anddeferredoutflowsofresourcesexceededliabilitiesanddeferredinflowsofresourcesby$198,260,874atthecloseofthe mostrecentfiscalyear.
Net Position (with comparative totals for August 31, 2023)
Currentandotherassetsincreasedbyapproximately$9.7million,or7.4%,primarilyduetofederalgrantsreceivedof $5.96millionandinvestmentearningsof$4.4million.
Capitalassets,netofdepreciationincreasedbyapproximately$11.4million,or8.8%,fromtheprioryearduetothe acquisitionandconstructionofcapitalassetsof$21.7millionpartiallyoffsetbydepreciation/amortizationexpenseof $9.6millionandnetdisposalsof$0.7million.
Currentliabilitiesdecreasedbyapproximately$1.0million,or9.6%,dueprimarilytothedecreaseinretainagepayable forcompletedprojectsof$1.4millionandunearnedrevenueof$0.3million,partiallyoffsetbyaccountspayableand accruedliabilitiesrelatedtoongoingprojectsof$0.3million,compensatedabsencesof$0.2millionandcurrentportion oflong-termdebtof$0.01million.
Noncurrentliabilitiesdecreasedbyapproximately$3.2million,or5.9%,fromtheprioryearprimarilyduetoareduction inbondsandleasespayableof$3.3million.
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
StatementofRevenues,ExpensesandChangesinNetPosition
TheStatementofRevenues,ExpensesandChangesinNetPositionmeasureshowwellannualcostsarecoveredbyfeesand charges. The Authority does not seek to earn a profit in the long term. However, the Authority must cover its operations, maintenance,andothercostswhileprovidingsufficientreservesannuallyfromfeesandchargessincetheAuthoritydoesnot levyorcollectanytaxrevenue.
ChangesinNetPosition-YearEndedAugust31,2024 (WithcomparativetotalsforyearendedAugust31,2023) 2024 2023Change
OperatingRevenues:
Meteredwatersales
$59,317,79852,848,164 $ $6,469,634
Bondpaymentrevenue 2,735,8471,964,202771,645
Irrigationsales 2,780,9605,296,328(2,515,368)
Other 7,391,2044,197,2293,193,975
TotalOperatingRevenues 72,225,80964,305,9237,919,886
Expenses: Personnelservices 14,761,32413,074,8921,686,432 Suppliesandmaterials 21,719,45120,345,3551,374,096 Contractedservices 7,369,1547,397,128(27,974)
3,541,1882,905,249635,939
Meteredwatersalesincreasedbyapproximately$6.5millionor12.2%,primarilyduetocapitaloutlayforacquisition andconstructionofcapitalassets,chemicalcostsattheThomasMackeyWaterTreatmentPlant,BRAwatercostsin the Canal Division, and City of Houston water costs for the League City and Pearland South East Water Purification Plant.
Irrigationsalesdecreasedbyapproximately$2.5million,or0.0%,primarilyduetofiscalyear2022croprevenuesbilled infiscalyear2023andadryerfiscalyear2023cropseasonresultinginmorewaterwassold.
Otherrevenuesincreasedbyapproximately$3.2million,or76.1%,primarilyduetoShannonPumpingStationPhase1 cash call for the Canal Division, partially offset by decrease in buy-in fee revenue for the capacity increase at the ThomasMackeyWaterTreatmentPlant.
Personnelservicesincreasedbyapproximately$1.7million,or12.9%,primarilyduetofiscalyear2023pensionexpense of $0.6 million, or 4.5%, and annual merit and cost of living pay rate adjustments of $0.6 million, or 4.5%, and compensatedabsencesaccrualof$0.3million,or2.1%.
Suppliesandmaterialsincreasedbyapproximately$1.4million,or6.8%,primarilyduetoCityofHoustonwatercosts for the League City and Pearland South East Water Purification Plant of $1.5 million, BRA water costs in the Canal Divisionof$1.0m,andchemicalcostsattheThomasMackeyWaterTreatmentPlantof$0.3million,partiallyoffsetby fiscalyear2023$1.7millionrechargecostsfromtheCityofHoustonfortheLeagueCity SEWaterPurificationPlant andincreasedBRAwatercostsintheCanalDivision.
Otherchargesincreasedbyapproximately$0.6million,or21.9%,primarilyduetorepairsofHurricaneBeryldamage intheCanalDivisionandclarifierrepairsattheThomasMackeyWaterTreatmentPlant.
Depreciation/amortizationexpenseincreasedbyapproximately$1.9million,or24.3%,primarilyduetoapproximately $14.5millionofcapitalprojectsbeingplacedinserviceduringfiscalyear2024.
Non-operatingrevenues(expenses)increasedbyapproximately$6.1million,or170.7%,duetolowerincreasedfederal grantsandinvestmentearnings,partiallyoffsetbyincreasedinterestincome.
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
The following charts illustrate a two-year comparison of the Authority’s Operating Revenues and Operating Expenses, respectively.
OperatingRevenues
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$-
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$-
OperatingExpenses
GULF COAST WATER AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
CapitalAssetsandLong-Term Debt
CapitalAssets
TheAuthority’scapitalassetstotaled$141,189,442asofAugust31,2024.Thesecapitalassetsincludeland;constructionin progress; office furniture, fixtures and equipment; other machinery and equipment; automobiles and trucks; right-to-use assets; buildings; and infrastructure. The total net increase in the Authority’s capital assets for the current fiscal year was $11.4,or8.8%.
Duringthecurrent fiscalyear,theAuthority received $6.0 infederal grantreimbursements forcapitalprojects.Additional informationontheAuthority’scapitalassetscanbefoundinNote3tothefinancialstatements.
Long-Term Debt
Attheendofthecurrentfiscalyear,theAuthorityhadlong-termdebtoutstandingof$53.6million.Thedebtincludesbonds securedsolelybyspecifiedrevenuesources(i.e.contractrevenuebonds).
TheAuthoritymaintained“AA”ratingsfromStandard&Poor’sand“A1”ratingsfromMoody’sInvestorsServiceforgeneral obligationdebt.AdditionalinformationontheAuthority’slong-termdebtcanbefoundinNote4tothefinancialstatements.
Requestsfor Information
ThisfinancialreportisdesignedtoprovideageneraloverviewoftheAuthority’sfinances.Questionsconcerninganyofthe information provided in this report or requests for additional financial information should be addressed to the Business Administrator,4243EmmettFLowryExpressway,TexasCity,Texas77591.
BASIC FINANCIAL STATEMENTS
GULF COAST WATER AUTHORITY
STATEMENT OF NET POSITION
August 31, 2024
GULF COAST WATER AUTHORITY
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION For the Year Ended August 31, 2024
OperatingRevenues Chargesforsalesandservices:
OperatingExpenses
OF CASH FLOWS
For the Year Ended August31,2024
CashFlowsfromOperatingActivities
Receiptsfromcustomersandusers $69,836,980
Paymentstosuppliers (34,863,062)
Paymentstoemployees (14,053,979)
NetCashProvided(Used)byOperatingActivities 20,919,939
CashFlowsfromNoncapitalFinancingActivities
Paymentsreceivedonlong-termreceivable 534,817
Principalpaidonnoncapitalbonds (390,000)
Interestpaidonnoncapitalbonds (432,336)
NetCashProvided(Used)byNoncapitalFinancingActivities (287,519)
CashFlowsfromCapitalandRelatedFinancingActivities
Acquisitionandconstructionofcapitalassets (18,517,160)
Principalpaidonbonds (2,395,000)
PrincipalpaidonleasesandSBITAs (235,073)
Interestpaidonbonds (1,710,442)
InterestpaidonleasesandSBITAs (77,364)
Leasepaymentsreceived 32,764
Grantsforcapitalprojects 5,982,480
NetCashProvided(Used)byCapitalandRelatedFinancingActivities (16,919,795)
CashFlowsfromInvestingActivities
Maturity(purchase)ofinvestments (130,064)
Interestreceived 4,297,534
NetCashProvided(Used)byInvestingActivities 4,167,470
OF CASH FLOWS
For the Year Ended August31,2024
ReconciliationofOperatingIncometo
NetCashProvidedbyOperatingActivities
Operatingincome
Adjustmenttoreconcileoperatingincome tonetcashprovidedbyoperatingactivities:
$15,263,418
Depreciation/amortization 9,571,274
Interestonleasereceivable (15,908) (Increase)decreasein: Accountsreceivable (2,054,807)
Prepaiditems (400,966)
Increase(decrease)in:
Accountspayableandaccruedliabilities (1,832,303)
Wagespayable 90,457
Compensatedabsencespayable 190,786
Unearnedrevenue (288,767)
Deferredinflows-leases (29,347)
Pension/OPEBrelatedamounts 426,102
NetCashProvidedbyOperatingActivities $20,919,939
NoncashInvesting,Capital,andFinancingActivities
Gainondisposalofcapitalassets $1,733,296
Payablesrelatedtocapitalpurchases 700,247
Note1-SummaryofSignificantAccountingPolicies
TheaccountingandreportingpoliciesofGulfCoastWaterAuthority(the“Authority”),agovernmentalagencyandpolitical subdivision of the State of Texas, conform to accounting principles generally accepted in the United States of America as prescribedbytheGovernmentalAccountingStandardsBoard(“GASB”).Thefollowingisasummaryofthemoresignificant policiesconsistentlyappliedinthepreparationoftheaccompanyingfinancialstatements:
A. ReportingEntity
TheAuthorityisaConservationandReclamationDistrictandpoliticalsubdivisionoftheStateofTexas(the“State”),created andfunctioningunderArticleXVI,Section59,oftheTexasConstitution,pursuanttoChapter712,Actsofthe59thLegislature, RegularSession,1965,asamended(the“Act”).TheActcreatedtheAuthoritytoconserve,store,transport,treatandpurify, distribute,wellanddeliverwater,bothsurfaceandunderground,topersons,corporations,bothpublicandprivate,political subdivisionsoftheStateandothers,andto purchase,constructorleaseallproperty,worksandfacilities,bothwithinand without the Authority, necessary or useful for such purposes. It is also authorized to acquire water supplies from sources within or without its boundaries and to sell, transport and deliver water to customers situated within or without its boundaries and to acquire all properties and facilities necessary or useful for such purposes. The Act conferred no water rightsontheAuthorityanditisnotauthorizedtomakeanyregulationofthewithdrawalofundergroundwater.TheAuthority maymake,construct,orotherwiseacquireimprovementseitherwithinorwithoutitsboundariesnecessarytocarryoutits powersandauthorityandtoexercisethepowerofeminentdomainforsuchpurposes,excepttheAuthoritydoesnothave thepowerofeminentdomainastoalloranypartofthewatersupply,property,worksorfacilitiesofanyprivatepersonor persons,orofanyprivateorpubliccorporationorassociationengagedinthebusinessofsupplyingwaterinGalvestonCounty, Texas, to any class of consumers for any use as of the effective date of enabling legislation. However, the Authority may acquire necessary crossing easements and rights of way. The powers, rights, privileges, and functions conferred upon the Authority are subject to the continuing rights of supervision by the State, which is exercised by the Texas Department of WaterResourcesincludingapprovalofitsprojects.TheActgrantedtheAuthoritynoneofthepowersconferredbyGeneral Lawforthepurposesofthecollection,transportation,processing,disposalandcontrolofdomestic,industrialorcommunal wastes, and the gathering, conducting, directing and controlling of local storm waters, or other local harmful excesses of water.Furthermore,theAuthorityhasnopowertolevytaxesbutisauthorizedtoissuerevenuebondstoprovidefundsfor anyandallofthepurposesetforthintheActandtocollectrelatedratesandcosts.
TheAuthorityiscomprisedofalloftheterritorycontainedwithinGalvestonCounty,Texas,anditsboundariesarethesame asand coextensivewiththeboundariesofGalvestonCounty,Texas.However,itsoperationsarenotnecessarilylimitedto theconfinesoftheseboundaries.
TheAuthorityisaseparateself-supportinggovernmentalunitandisadministeredbyaboardoftendirectors. Fivedirectors areappointedbytheCommissionersCourtofGalvestonCounty,oneofwhomrepresentsmunicipalinterests,twoofwhom representindustrialinterests,andtwoofwhomrepresentthecountyatlarge. TwodirectorsareappointedbytheFortBend CountyCommissionersCourt,oneofwhomrepresentsmunicipalinterests,andoneofwhomrepresentsthecountyatlarge. ThreedirectorsareappointedbytheBrazoriaCountyCommissionersCourt,oneofwhomrepresentsagriculturalinterests, one of whom represents municipal interest, and one of whom represents industrial interests. A director appointed to representmunicipalorindustrialinterestsmustbeacustomerof,orrepresentanentitythatisacustomerof,theAuthority.
Appointees serve two-year terms, staggered five (5) one year and five (5) the next. Term of office coincides with the Authority’sfiscalyear,beginningSeptember1st.
Note1-SummaryofSignificantAccountingPolicies(continued)
B. FinancialStatementPresentation,MeasurementFocusandBasisofAccounting
Asasinglepurposegovernmentengagingonlyinbusinesstypeactivities,theAuthorityfollowsenterprisefundaccounting. EnterpriseFundshaveanetincomeoreconomicresourcesmeasurementfocusandareaccountedforusingtheaccrualbasis of accounting, under which revenues are recognized when they are earned including unbilled water which is accrued. Expensesarerecognizedatthetimetheliabilityisincurred.Withthismeasurementfocus,allassetsandliabilitiesassociated withtheoperationofthesefundsareincludedintheStatementofNetPosition.
TheAuthority distinguishesoperatingrevenues and expenses fromnonoperatingitems.Operating revenues andexpenses generally result from providing services and producing and delivering goods in connection with the Authority’s principal ongoing operations. The principal operating revenues of the Authority are charges to customers for sales and services. Operating expenses include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenuesandexpensesnotmeetingthisdefinitionarereportedasnonoperatingrevenuesandexpenses.
C. CashandCashEquivalents
Cash and cash equivalents include amounts in checking, savings, money market mutual funds, and local government investmentpoolaccounts.
D. Investments
Investments with a maturity of less than one year when purchased and local government investment pools are stated at amortizedcost.Investmentswithamaturitygreaterthanoneyearwhenpurchasedarestatedatfairvalue.Fairvalueisthe pricethatwouldbereceivedtosellaninvestmentinanorderlytransactionatyearend.
E. AccountsReceivable
Accounts receivable consist of balances due from customers of the various activities of the Authority. An allowance for doubtfulaccountsisestablishedwhennecessarytoprovideanestimateofbaddebtschargedtorevenues.Lossesarecharged againsttheallowancewhenmanagementbelievesthecollectabilityofareceivableisunlikely.Subsequentrecoveries,ifany, are credited to the allowance. The allowance for doubtfulaccounts is evaluated on aregular basisby management and is basedonhistoricalexperienceandspecificallyidentifiedquestionablereceivables.Theevaluationisinherentlysubjectiveas it requires estimates that are susceptible to significant revision as more information becomes available. As of August 31, 2024,noallowanceforbaddebtsisrecorded.
F. CapitalAssets
Depreciationisprovidedforinamountssufficienttorelatethecostofthedepreciablepropertytooperationsonastraightlinebasisovertheirestimatedusefullives.TheAuthority’spolicyistocapitalizeassetswithaninitialcostexceeding$5,000 andusefullifeofthreeyearsorgreater.Theusefullivesbythetypeofassetsareasfollows:
AssetClass
AutomobilesandLightWeightTrailers 5Years
HeavyEquipment,SCADASystem,Pumps,andOtherEquipment 10Years
VariableFrequencyDrivesandWaterMeters 15Years
Bridges,PressureReductionStations,andElevatedStorageTanks 20Years
BoosterPumpStations,CheckStructures,Clarifiers,andUnderdrains 25Years
Buildings,PumpStations,SurfaceTanks,Siphons,andWater TreatmentPlants 30Years
Right-to-useleaseassets
SBITAassets
Shorterofusefullifeorleaseterm
Subscriptionterm
Note1-SummaryofSignificantAccountingPolicies(continued)
G. DeferredOutflowsandInflowsofResources
In addition to assets, the statement of financial position includes a separate section for deferred outflows of resources. Deferred outflows ofresources represent aconsumptionofnetassetsthatappliesto afutureperiod(s)andthereforewill notberecognizedasanoutflowofresources(expense/expenditure)untilthen. TheAuthorityhasmultipleitemsthatqualify forreportinginthiscategory.ThedeferredamountsrelatedtopensionandOPEBrelatedifferencesbetweenestimatedand actualinvestmentearnings,changesinactuarialassumptions,andotherpensionandOPEBrelatedchanges.Inaddition,the Authorityalsohasdeferredchargesonrefundingbonds.
In addition to liabilities, the statement of financial position includes a separate section for deferred inflows of resources. Deferredinflowsofresourcesrepresentanacquisitionofnetassetsthatappliestoafutureperiod(s)andthereforewillnot berecognizedasaninflowofresources(revenue)untilthattime.TheAuthorityhasmultipleitemsthatqualifyforreporting in this category. The Authority reports deferred amounts related to pension, deferred amounts related to OPEB,amounts relatedtofuturereceiptofleasepayments,andamountsrelatedtofinancingagreements.
H. PensionsandOtherPost-EmploymentBenefits(OPEB)
ForpurposesofmeasuringthenetpensionandtotalOPEBliabilities,deferredoutflowsofresourcesanddeferredinflowsof resourcesrelatedtopensions/OPEB,andpension/OPEBexpense,informationabouttheFiduciaryNetPositionoftheTexas CountyandDistrictRetirementSystem(“TCDRS”)andadditionsto/deductionsfromTCDRS’sFiduciaryNetPositionhavebeen determined on the same basis as they are reported by TCDRS. For this purpose, plan contributions are recognized in the periodthatcompensationisreportedfortheemployee,whichiswhencontributionsarelegallydue.Benefitpaymentsand refundsarerecognizedwhendueandpayableinaccordancewiththebenefitterms.Investmentsarereportedatfairvalue.
I. UnamortizedBondDiscountsandPremiums
Included within long-term debt are unamortized bond discounts and premiums. These discounts and premiums are being amortizedoverthelifeoftherelatedobligationonthestraight-linemethod.
J. PrepaidItems
Certainpaymentstovendorsreflectcostsapplicabletofutureaccountingperiodsandarerecordedasprepaidexpenses.
K. LeasesandSubscription-BasedInformationTechnologyArrangements(SBITAs)
TheAuthorityisundercontractforvariousleasesfortherighttouseassetsandSBITAsfortherighttousesubscriptionassets (software).Theleases/SBITAsarenoncancellable,andtheAuthorityrecognizesliabilitiesandintangiblerighttouseassetsin thefinancialstatements.TheAuthorityrecognizesleaseandSBITAliabilitieswithaninitial,individualvalueof$5,000ormore.
At the commencement of the lease/SBITA, the Authority initially measures the liability at the present value of payments expectedto be madeduringthecontractterm.Subsequently, theliability is reducedby theprincipalportionofpayments made.Theintangiblerighttouseassetisinitiallymeasuredasthesumof(1)theinitialliabilityamount,(2)paymentsmade tothevendorbeforecommencement ofthecontractterm,and(3) capitalizableimplementation costs,less any incentives receivedfromthevendoratorbeforethecommencementofthecontractterm.Keyestimatesandjudgmentsincludehow theAuthoritydetermines(1)thediscountrateitusestodiscounttheexpectedpaymentstopresentvalue,(2)contractterm, and(3)payments.
TheAuthorityusestheinterestratechargedbythevendorasthediscountrate.Whentheinterestratechargedbythe vendorisnotprovided,theAuthoritygenerallyusesitsestimatedincrementalborrowingrateasthediscountrate.
Note1-SummaryofSignificantAccountingPolicies(continued)
K. LeasesandSubscription-BasedInformationTechnologyArrangements(SBITAs)(continued)
Thecontracttermincludesthenoncancellableperiodofthecontracttermandpaymentsincludedinthemeasurement oftheliabilityarecomposedoffixedpaymentsandpurchaseoptionpricethattheAuthorityisreasonablycertainto exercise.
The Authority monitors changes in circumstances that would require a remeasurement of its leases/SBITAs and will remeasuretherelatedassetandliabilityifcertainchangesoccurthatareexpectedtosignificantlyaffecttheamountofthe liability.Righttouseassetsarereportedwithcapitalassetsandlease/SBITAliabilitiesarereportedwithlong-termdebton thestatementofnetposition.
L. Estimates
Thepreparationoffinancialstatementsinconformitywith generallyacceptedaccountingprinciplesrequiresmanagement tomakeestimatesandassumptionsthataffectthereportedamountsofassets,liabilities,deferredinflowsandoutflowsfor pension items,and disclosuresofcontingent assets andliabilities atthedateofthefinancialstatements and thereported amountsofrevenuesandexpensesduringthereportingperiod.Actualamountscoulddifferfromthoseestimates.
M. DateofManagement’sReview
SubsequenteventshavebeenevaluatedthroughFebruary14,2025,whichisthedatethefinancialstatementswereavailable tobeissued.
N. NetPosition
Netpositionrepresentsthedifferencebetween(a)assetsanddeferredoutflowsofresourcesand(b)liabilitiesanddeferred inflowsofresources.Netpositionnetinvestmentincapitalassetsconsistsofcapitalassets,netofaccumulateddepreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction, or improvements of those assets,andaddingbackunspentbondproceeds.
Netpositionisreportedasrestrictedwhentherearelimitationsimposedonitsusethroughexternalrestrictionsimposedby creditors,grantors,orlawsorregulationsofothergovernments.Unrestrictednetpositionrepresentstheremainingportion ofnetposition.
AsummaryofnetinvestmentincapitalassetsbydivisionasofAugust31,2024isasfollows:
CapitalAssets
NetofUnspentCapitalRelatedCapitalRelatedNetInvestment Depreciation/BondLong-TermAccruedIn Division AmortizationProceedsLiabilities1ExpensesCapitalAssets ThomasS.MackeyWaterTreatmentPlant(TMWTP)16,361,293 $ $14,264,371(21,524,090)
1Includescapitalrelatedbonds,premiums/discounts,leases,andSBITAs DoesnotincludenoncapitalrelatedbondsintheLeagueCitySEWaterPurificationPlant(SEWPP)intheamountof$11,170,134.
Note1-SummaryofSignificantAccountingPolicies(continued)
N. NetPosition(continued)
AsummaryofnetpositionrestrictedfordebtserviceasofAugust31,2024isasfollows:
AsummaryofinvestmentsrestrictedbycategoryasofAugust31,2024isasfollows:
O. ImplementationofNewAccountingStandards
ThefollowingGASBpronouncementswereapplicableandeffectiveduringfiscalyear2024.
GASB issued Statement No. 99, Omnibus 2022, in April 2022. This Statement was issued to enhance comparability in accountingandfinancialreporting and to improvetheconsistency ofauthoritativeliteratureby addressingpracticeissues thathavebeenidentifiedduringimplementationandapplicationofcertainGASBStatementsand accountingandfinancial reporting for financial guarantees. The requirements of this statement had various effective dates and specific provisions wereimplementedpriortofiscalyear2024.Theremainingrequirementsrelatedtofinancialguaranteesandtheclassification andreportingofderivativeinstrumentswithinthescopeofStatement53areeffectiveforfiscalyearsbeginningafterJune 15,2023,andallreportingperiodsthereafter.Theremainingrequirementsofthisstatementwereimplementedinfiscalyear 2024anddidnothaveamaterialimpactonthefinancialstatements.
GASBissuedStatementNo.100, Accounting Changes and Error Corrections –anAmendmentofGASBStatementNo.62,in June 2022. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable informationformakingdecisionsorassessingaccountability.TherequirementsofthisStatementareeffectiveforaccounting changesanderrorcorrectionsmadeinfiscalyearsbeginningafterJune15,2023,andallreportingperiodsthereafter.The requirements of thisstatement were implemented in fiscal year 2024 and did not havea material impact on the financial statements.
GASBissuedImplementationGuide2021-1, Implementation Guidance Update – 2021,inMay2021.Theprimaryobjective of this Implementation Guide is to provide guidance that clarifies, explains, or elaborates on GASB Statements. The requirements ofthis ImplementationGuidehadvariouseffectivedates andspecificprovisionswereimplemented priorto fiscalyear2024.Theremainingrequirement,anamendmenttoQuestion7.9.8inImplementationGuide2015-1effectivefor reportingperiodsbeginningafterJune15,2023,requiresgovernmentstocapitalizeassetswhoseindividualacquisitioncosts areless thanthethreshold foranindividualassetifthoseassets intheaggregatearesignificant.Therequirements ofthis statementwereimplementedinfiscalyear2024anddidnothaveamaterialimpactonthefinancialstatements.
Note1-SummaryofSignificantAccountingPolicies(continued)
O. ImplementationofNewAccountingStandards(continued)
GASBissuedImplementationGuide2023-1, Implementation Guidance Update – 2023,inJune2023.Theprimaryobjective of this Implementation Guide is to provide guidance that clarifies, explains, or elaborates on GASB Statements. This Implementation Guide amends Implementation Guide No. 2019-3, Leases, Question 4.16, and Implementation Guide No. 2021-1, Implementation Guidance Update—2021, Question 4.13. The requirements of this Implementation Guide are effective for fiscal years beginning after June 15, 2023, and all reporting periods thereafter. The requirements of this ImplementationGuidewereimplementedinfiscalyear2024anddidnothaveamaterialimpactonthefinancialstatements.
Note2-CashandCashEquivalentsandInvestments
TheAuthority's fundsarerequired to bedepositedandinvested undertheterms ofadepository contract.Thedepository bankdepositsforsafekeepingandtrustwiththeAuthority'sagentbankapprovedpledgedsecuritiesinanamountsufficient toprotectAuthorityfundsonaday-to-daybasisduringtheperiodofthecontract.Thepledgeofapprovedsecuritiesiswaived onlytotheextentofthedepositorybank'sdollaramountofFederalDepositInsuranceCorporation("FDIC")insurance.
ThePublicFundsInvestmentActrequiresanannualauditofinvestmentpractices.Auditproceduresinthisareaconducted aspartofthegeneral-purposefinancialstatementsdisclosedthatintheareasofinvestmentpractices,managementreports, and establishmentofappropriatepolicies,theAuthority adheredto therequirements of theAct. Additionally,investment practicesoftheAuthoritywereinaccordancewithbondprovisions.
Deposits
Asauthorizedinbondprovisions,depositsoftheAuthorityareinshort-termcertificates ofdeposit,demandaccountsand interest-bearingmoneymarketaccounts.Depositsof$664,354aresecuredasofAugust31,2024byFDICcoverageandby pledgedU.S.Governmentsecuritiesheldbyanagentofthebankinthenameofthedepositorybank.Thecarryingvalueof theAuthority’scashandcashequivalentsasofAugust31,2024isasfollows:
Investments
InvestmentsfortheAuthorityarereportedatfairvalue.TheAuthoritycategorizesfairvaluemeasurementsofitsinvestments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels,isbasedonthevaluationinputsusedtomeasureanasset’sfairvalue:Level1inputsarequotedpricesinactivemarkets foridenticalassets;Level2inputsaresignificantotherobservableinputs;level3inputsaresignificantunobservableinputs. TheAuthority’slocalgovernmentinvestmentpoolsarerecordedatamortizedcostsaspermittedbyGASBStatementNo.79, Certain Investment Pools and Pool Participants.
U.S. agency securities, commercial paper, and money market mutual funds are reported at fair value using level 1 inputs which are determined using quoted market prices for identical assets. Unrealized gains and losses are included as a componentofinvestmentincome.
Note2-CashandCashEquivalentsandInvestments(continued)
Investments(continued)
TheAuthority’sinvestmentpolicyreflectstherequirementsoftheTexasPublicFundsInvestmentAct.Thisstatuteauthorizes theAuthoritytoinvestinobligationsoftheU.S.Treasury,certainU.S.agencies,certificatesofdeposit,moneymarketsavings accounts,certainmunicipalsecurities,repurchaseagreements,investmentpools,qualifiedcommercialpaper,andcommon trustfunds.
StatelawandtheAuthority’sinvestmentpolicylimitsinvestmentsinagencysecuritiestoberatedAAorbetterwithastated maturitynottoexceedthreeyears. CommercialpaperisA1/P1ratedwithastatedmaturitynottoexceed180days. Asof August31,2024,allinvestmentsweremadeinaccordancewiththeAuthority’sinvestmentpolicy.Investmentsthatarenot representedbyspecificidentifiableinvestmentsecuritiessuchasmutualfundinvestmentpoolsarenotclassifiedastocredit risk.
TexPool is a public funds investment pool created by the Texas Treasury Safekeeping Trust Company (Trust Company) to provide a safe environment for the placement of local government funds in Authorized short-term, fully-collateralized investments, including direct obligations of, or obligations guaranteed by, the United States or State of Texas or their agencies;federallyinsuredcertificatesofdepositissuedbyTexasbanksorsavingsandloans;andfullycollateralizeddirect repurchaseagreementssecuredbyUnitedStatesGovernmentagencysecuritiesandplacedthroughaprimarygovernment securities dealer. The Trust Company was incorporated by the State Treasurer by authority of the Texas Legislature as a specialpurposetrustcompanywithdirectaccesstotheservicesoftheFederalReserveBanktomanage,disburse,transfer, safekeep,andinvestpublicfundsandsecuritiesmoreefficientlyandeconomically.TheStateComptrollerofPublicAccounts exercisesoversightresponsibilityoverTexPool.Oversightincludestheabilitytosignificantlyinfluenceoperations,designation ofmanagement,andaccountabilityforfiscalmatters.
TexPoolusesamortizedcostratherthanfairvaluetoreportnetpositiontocomputeshareprices.Theamortizedcostofthe positioninTexPoolisthesameasthevalueofTexPoolshares.Accordingly,theAuthority’sinvestmentsinTexPoolarestated atamortizedcost,whichapproximatesfairvalue.
TexPoolandTexPoolPrimearecurrentlyratedAAAmbyStandardandPoor’swhichindicatesexcellentsafetyandasuperior capacity to maintain principal value and limit exposure to loss. The pools do not have any limitations and restrictions on withdrawals such as notice periods or maximum transaction amounts. The pools do not impose any liquidity fees or redemptiongates.
Atyear-end,theAuthority’sinvestmentbalanceswereasfollows:
GULF COAST WATER AUTHORITY
Note3-CapitalAssets
Thefollowingtablesummarizesthechangesinthecomponentsofcapitalassets:
$141,189,442
Note3-CapitalAssets(continued)
ConstructioninProgress
Constructioninprogressforthevariousprojectsandremainingcommitmentsundertheseconstructioncontractsasof August31,2024,areasfollows: AuthorizedContractRemaining
CANALDIVISION
$57,586,275
Note4-Long-Term Debt
ChangesinLong-Term Liabilities
Totallong-termliabilityactivityfortheyearendedAugust31,2024,isasfollows:
Futurepaymentsdueforoutstandingbondsareasfollows:
FiscalYear(s)PrincipalInterestTotal 20252,895,000 $ $2,023,5154,918,515 $ 20262,990,0001,918,1434,908,143 20273,095,0001,807,3184,902,318 20282,660,0001,694,1934,354,193 20292,775,0001,582,4394,357,439 2030to20349,780,0006,287,99316,067,993 2035to20397,195,0004,664,55511,859,555 2040to20446,660,0003,154,3259,814,325 2045to20495,935,0001,842,9827,777,982 2050to20544,255,000403,4374,658,437 Total$48,240,00025,378,900 $ $73,618,900
Note4-Long-Term Debt(continued)
LeaseLiabilities
The authority has two agreements in place to lease equipment (generators). The first agreement in the Industrial Pump Station Division consists of monthly payments of $16,000 through April 2034 with an interest rate of 3.00%, resulting in a right-to-usetheassetof$2,026,264,whichisamortizedoverthelifeofthelease.ThesecondagreementintheThomasS. MackeyWaterTreatmentPlantconsistsofmonthlypaymentsof$8,000throughApril2034withaninterestrateof3.00%, resulting in a right-to-use the asset of $1,013,132, which is amortized over the life of the lease. Future payments due for outstandingleasesareasfollows:
FiscalYear(s)PrincipalInterest
SBITALiabilities
Theauthority has oneagreement inplace for therightto usesubscription assets (software). The SBITA consists ofannual payments through August 2025 with an interest rate of 5.50%, prepayments of $40,798, and other capitalizable implementation costs of $5,775, resulting in a right-to-use the asset of $116,589, which is amortized over the life of the subscriptionterm.
FuturepaymentsduefortheSBITAisasfollows:
Note5-CompensatedAbsences
All full-time employees begin accruing paid sick leave eight (8) hours per month from the date of employment. Full-time employeeswhohavecompletedfive(5)yearsofserviceandareseparatedfornon-disciplinaryreasonsshallbepaidforone halfoftheiraccruedsickleaveuptoamaximumof360hours.Employeeswhohavecompletedten(10)yearsofserviceand are separated for non-disciplinary reasons shall be paid the balance of accumulated sick leave up to a maximum of nine hundredandsixty(960)hours.
Full-timeemployeeswillaccruevacationhourseachpayperiodbeginningontheirhiredate.Themaximumaccruedbalance anemployeemaycarryistwotimestheirannualaccruallimit. Theannualaccruallimitforeachemployeeisdependenton theiryearsofserviceandrangesfrom80hoursaccruedperyearforemployeeswithlessthan5yearsofservicetoamaximum of240hoursaccruedperyearforemployeeswithmorethan30yearsofservice. AtAugust31,2024,accruedcompensated absenceswere$1,594,422with$645,641duewithinoneyear.
Note6-DefinedBenefitPensionPlan
PlanDescription
TheAuthorityprovidesretirement,disability,anddeathbenefitsforallofitsfull-timeemployeesthroughanon-traditional defined benefit plan in the state-wide Texas County and District Retirement System ("TCDRS"). The Board of Trustees of TCDRSisresponsiblefortheadministrationofthestatewideagentmultiple-employerpublicemployeeretirementsystem, consistingof677nontraditionaldefinedbenefitpensionplans.TCDRSissuesanannualcomprehensivefinancialreport(ACFR) onacalendaryearbasis.TheACFRisavailable,uponwrittenrequest,fromtheTCDRSBoardofTrusteesatP.O.Box 2034, Austin,Texas,78768-2034oronlineatwww.tcdrs.org
The plan provisions are adopted by the governing body of the employer, within the options available in the Texas state statutesgoverningTCDRS(“TCDRSAct”).Memberscanretireatage60andabovewith5ormoreyearsofservice,with30 yearsofserviceregardlessofageorwhenthesumoftheirageandyearsofserviceequals75ormore.Membersarevested after5yearsofservicebutmustleavetheiraccumulatedcontributionstotheplantoreceiveanyemployer-financedbenefit. Members who withdraw their personal contributions in alump sum are not entitled to any amounts contributed bytheir employer.
Benefitsdependuponthesumoftheemployee'scontributionstotheplan,withinterest,andemployer-financedmonetary credits, with interest. The level of these monetary credits is adopted by the governing body of the employer within the actuarialconstraintsimposedbytheTCDRSActsothattheresultingbenefitscanbeexpectedtobeadequatelyfinancedby theemployer’scommitmentstocontribute.Atretirement,disabilityordeath,thebenefitiscalculatedbyconvertingthesum of the employee’s accumulated contributions and the employer-financed monetary credits to a monthly annuity using annuitypurchaserates,asprescribedbytheTCDRSAct.
AttheDecember31,2023measurementdate,thefollowingemployeeswerecoveredbythebenefitterms:
FundingPolicy/Contributions
The employer has chosen a variable rate plan under the provisions of the TCDRS Act. The plan is funded by monthly contributionsfrombothemployeemembersandtheemployerbasedonthecoveredpayrollofemployeemembers.Under theTCDRSAct,thecontributionrateoftheemployerforthefiscalyearwas10.10%forSeptember2023throughDecember 2023 and 9.22% for January 2024 through August 2024. The contribution rate for employees was 7%, as adopted by the governingbodyoftheemployer.Thecontributionrateoftheemployerisnotactuariallydeterminedandisoneoftherates thatcanbeadoptedinaccordancewiththeTCDRSAct.However,theplanofbenefitsadoptedbytheemployeratthetime of plan inception or when benefit increases were adopted was limited by the TCDRS Act to what the actuary determined couldbeadequatelyfinancedbythecommitmentoftheemployer.Theemployeedepositrateandtheemployercontribution ratemaybechangedbythegoverningbodyoftheemployerwithoptionsavailableintheTCDRSACT.
If a plan has had adverse experience, the TCDRS Act has provisions which allow the employer to contribute a fixed supplementalcontributionratedeterminedbythesystem’sactuaryabovetheregularratefor25yearsortoreducebenefits earnedinthefuture.
NetPensionLiability(Asset)
TheAuthority’sNetPensionLiability(Asset)(“NPL”or“NPA”)wasmeasuredasofDecember31,2022,andtheTotalPension Liability(“TPL”)usedtocalculatetheNetPensionLiability(Asset)wasdeterminedbyanactuarialvaluationasofDecember 31,2022.
GULF
Note6-DefinedBenefitPensionPlan(continued)
ActuarialAssumptions
The Total Pension Liability in the December 31, 2023 actuarial valuation was determined using the following actuarial assumptions:
Valuationdate
Actuarialcostmethod
Amortizationmethod
ActuariallydeterminedcontributionratesarecalculatedeachDecember31,twoyearspriortothe endofthefiscalyearinwhichcontributionsarereported.
EntryAge(levelpercentofpay)(1)
Levelpercentageofpayroll,closed
RemainingAmortizationPeriod 16.2years(basedoncontributionratecalculatedin12/31/2023valuation)
Assetvaluationmethod 5-yearsmoothedmarket
Inflationrate 2.50%
Salaryincreases
Variesbyageandservice;4.7%averageovercareerincludinginflation.
Investmentrateofreturn(DiscountRate)7.50%,netofadministrativeandinvestmentexpenses,includinginflation Retirementage
Memberswhoareeligibleforserviceretirementareassumedtocommencereceivingbenefit paymentsbasedonage.Theaverageageatserviceretirementforrecentretireesis61.
Mortality
ChangesinAssumptionsandMethods ReflectedintheScheduleof EmployerContributions1
ChangesinPlanProvisionsReflected intheScheduleofEmployer Contributions1
135%ofthePub-2010GeneralRetireesTableformalesand 120%ofthePub-2010GeneralRetireesTableforfemales, bothprojectedwith100%oftheMP-2021Ultimatescaleafter2010.
2015:Newinflation,mortalityandotherassumptionswerereflected. 2017:Newmortalityassumptionswerereflected. 2019:Newinflation,mortalityandotherassumptionswerereflected. 2022:Newinvestmentreturnandinflationassumptionswerereflected.
2015:Employercontributionsreflectthata2%flatCOLAwasadopted. 2016:NochangesinplanprovisionswerereflectedintheSchedule. 2017:NewAnnuityPurchaseRateswerereflectedforbenefitsearnedafter2017. 2018:NochangesinplanprovisionswerereflectedintheSchedule. 2019:Employercontributionsreflectthata100%CPICOLAwasadopted 2020:Nochangesinplanprovisionswerereflectedintheschedule. 2021:Employercontributionsreflectthata100%CPICOLAwasadopted 2022:NochangesinplanprovisionswerereflectedintheSchedule. 2023:NochangesinplanprovisionswerereflectedintheSchedule.
1Onlychangesthataffectthebenefitamountandthatareeffective2015andlaterareshownabove.
Note6-DefinedBenefitPensionPlan(continued)
ActuarialAssumptions(continued)
ActuarialassumptionsusedintheDecember31,2023valuationwerebasedontheresultsofanactuarialexperiencestudy over the years 2017-2020, except where required to be different by GASB 68. The pension plan’s policy in regard to the allocationofinvestedassetsisestablishedandmaybeamendedbytheTCDRSBoardofTrustees.Planassetsaremanaged onatotalreturnbasiswithanemphasisonbothcapitalappreciationaswellastheproductionofincome,inordertosatisfy theshort-termandlong-termfundingneedsofTCDRS.Thelong-termexpectedrateofreturnonTCDRSassetsisdetermined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. These rangesarecombinedtoproducethelong-termexpectedrateofreturnbyweightingtheexpectedfuturerealratesofreturn by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of geometricrealratesofreturnforeachmajorassetclassaresummarizedinthefollowingtable:
ChangesinActuarialAssumptionsandMethods
Therewerechangestotheinvestmentreturnandinflationassumptions.
Note6-DefinedBenefitPensionPlan(continued)
DiscountRate
ThediscountrateusedtomeasuretheTotalPensionLiabilitywas7.60%.Theprojectionofcashflowsusedtodeterminethe discountrateassumed thatemployeeand employercontributions willbemadeattherates specified in statute. Basedon thatassumption,thepensionplan’sFiduciaryNetPositionwasprojectedtobeavailabletomakeallprojectedfuturebenefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investmentswasappliedtoallperiodsofprojectedbenefitpaymentstodeterminetheTotalPensionLiability.
Thefollowingpresentsthenetpensionliability(asset)oftheAuthority,calculatedusingthediscountrateof7.60%,aswell aswhattheAuthority’snetpensionliability(asset)wouldbeifitwerecalculatedusingadiscountratethatis1-percentagepointloweror1-percentage-pointhigherthanthecurrentrate:
Note6-DefinedBenefitPensionPlan(continued)
PensionExpenseandDeferredOutflowsofResourcesandDeferredInflowsofResourcesRelatedtoPensions
FortheyearendedAugust31,2024,theAuthorityrecognizedpensionexpenseof$1,406,866.
AsofAugust31,2024,theAuthorityreporteddeferredoutflowsofresourcesanddeferredinflowsofresourcesrelatedto pensionsfromthefollowingsources:
The $684,679 reported as deferred outflows of resources related to pensions resulting from Authority contributions subsequenttothemeasurementdatewillberecognizedasareductionofthepensionliabilityintheyearendingAugust31, 2025.
Amounts currently reported as deferred outflows of resources and deferred inflows of resources related to pensions, excludingcontributionssubsequenttothemeasurementdate,willberecognizedinpensionexpenseasfollows:
Note7-PostEmploymentBenefitsotherthanPensions(OPEB)
PlanDescription
TheAuthorityparticipatesintheretireeGroupTermLife(GTL)programfortheTexasCounty&DistrictRetirementSystem (TCDRS),whichisastatewide,agentmultiple-employer,publicemployeeretirementsystemdescribedmorefullyinNote6. ThebenefittermsofthisprogramareestablishedundertheTCDRSAct.ParticipationintheretireeGTLprogramisoptional andtheemployermayelecttooptoutof(oroptinto)coverageasofJan.1eachyear.TheAuthority’scontributionratefor theretiree GTLprogramiscalculated annually on anactuarialbasisand is equalto thecostofprovidingaone-yeardeath benefitequalto$5,000.Thebenefitsprovidedbythisprogramareasfollows:
Allfull-andpart-timenon-temporaryemployeesparticipateintheplan,regardlessofthenumberofhourstheywork in a year and are eligible for the TCDRS pension plan. Only employers that have elected participation in the retiree GroupTermLifeprogramareincludedintheOPEBplan.
Theplanprovidesa$5,000post-retirementdeathbenefittobeneficiariesofserviceretireesanddisabilityretireesof employersthathaveelectedparticipationintheretireeGTLprogram.
TheOPEBbenefitisafixed$5,000lump-sumbenefit.
Nofutureincreasesareassumedinthe$5,000benefitamount.
Benefit terms are established under the TCDRS Act. Participation in the retiree GTL program is optional and the employermayelecttooptoutof(oroptinto)coverageasofJan.1eachyear.
Note7-PostEmploymentBenefitsotherthanPensions(OPEB)(continued)
MembershipInformation
AttheDecember31,2023valuationandmeasurementdate,thefollowingemployeeswerecoveredbythebenefitterms:
“Receiving benefits” indicates the member is retired and receiving monthly pension benefits, and his or her beneficiary is eligibleforthe$5,000lumpsumupontheretiree’sdeath.
Contributions
UndertheGTLprogram,theemployer’sbenefitpaymentsfortheyeararetreatedasbeingequaltoitsannualretireeGTL contributions. Employers in the GTL Program make a combined contribution for both the active and retiree coverage; however,onlytheretireecoverageisconsideredanOPEBplanandthereforeonlythecontributionsassociatedwithretiree coveredareincludedunderGASB75.
The contributions for retiree GTL coverage are assigned to the OPEB plan under GASB 75 and are used to determine the benefitpaymentsshownontheexhibitonthenextpage.ThecontributionsforactivecoveragearenotconsideredanOPEB benefit under GASB 75 and are treated as a current benefit. Contributionsmade by theemployer for retiree GTL benefits havebeenmadeat0.07%forthe2022plan(calendar)yearand0.05%forthe2023plan(calendar)year.
ContributionsmadetotheretireeGTLprogramareheldintheGTLfund.TheGTLfunddoesnotmeettherequirementsofa trustunderParagraph4bofGASB75,astheassetsoftheGTLfundcanbeusedtopayactiveGTLbenefitswhicharenotpart oftheOPEBplan.
ActuarialAssumptions
The Authority’s Total OPEB Liability (“TOL”) was measured as of December 31, 2023 and was determined by an actuarial valuationasofDecember31,2023usingthefollowingactuarialassumptions:
Valuationtiming
Actuariallydeterminedcontributionratesarecalculatedonacalendar yearbasisasofDecember31,twoyearspriortotheendofthefiscalyear inwhichthecontributionsarereported.
Actuarialcostmethod EntryAgeLevelPercentofSalary
Amortizationmethod Straight-lineamortizationoverexpectedworkinglife
Investmentrateofreturn 3.26%;20YearBondGOIndexpublishedbybondbuyer.comasof December28,2023.
Disability
CustomtablebasedonTCDRSexperience
Mortality-depositingmembers135%ofPub-2010GeneralEmployeesAmount-WeightedMortalityTable formalesand120%Pub-2010GeneralEmployeesAmount-Weighted MortalityTableforfemales,bothprojectedwith100%oftheMP-2021 Ultimatescaleafter2010.
Mortality-serviceretirees,beneficiaries andnon-depositingmembers
135%ofPub-2010GeneralHealthyRetireesAmount-WeightedMortality Tableformalesand120%Pub-2010GeneralHealthyRetireesAmountWeightedMortalityTableforfemales,bothprojectedwith100%ofthe MP-2021Ultimatescaleafter2010.
Mortality-disabledretirees160%ofPub-2010GeneralDisabledRetireesAmount-WeightedMortality Tableformalesand125%Pub-2010GeneralDisabledRetireesAmountWeightedMortalityTableforfemales,bothprojectedwith100%ofthe MP-2021Ultimatescaleafter2010.
Retirement
CustomtablebasedonTCDRSexperience
OtherTerminationofEmploymentCustomtablebasedonTCDRSexperience
Note7-PostEmploymentBenefitsotherthanPensions(OPEB)(continued)
DiscountRate
TheTCDRS GTLprogramistreatedasunfundedOPEB planbecausetheGTLtrustcoversboth activesand retirees and the assetsarenotsegregatedforthesegroups.UnderGASB75(paragraph 155),the discountrateforanunfundedOPEB plan shouldbebasedon20-yeartax-exemptAAorhigherMunicipalBonds.Therefore,adiscountrateof3.26%basedonthe20 YearBondGOIndexpublishedbybondbuyer.comisusedasofthemeasurementdateofDecember31,2023.
ChangesinTotalOPEBLiability
BalancesasofDecember31,2022
Changesfortheyear:
BalancesasofDecember31,2023
Sensitivity Analysis
ThefollowingpresentsthetotalOPEBliabilityoftheAuthority,calculatedusingthediscountrateof3.26%,aswellaswhat totalOPEBliabilitywouldbeifitwerecalculatedusingadiscountratethatis1percentagepointloweror1percentagepoint higherthanthecurrentrate.NotethatthehealthcarecosttrendratedoesnotaffectthetotalOPEBliability,sosensitivityto thehealthcarecosttrendrateisnotshown.
OPEBExpenseandDeferredOutflowsofResourcesandDeferredInflowsofResourcesRelatedtoOPEBActivity FortheyearendedAugust31,2024,theAuthorityrecognizedOPEBexpenseof$14,215.
AsofAugust31,2024,theAuthorityreporteddeferredoutflowsofresourcesanddeferredinflowsofresourcesrelatedto OPEBfromthefollowingsources:
The$2,566reportedasdeferredoutflowsofresourcesrelatedtopensionsresultingfromAuthoritycontributionssubsequent tothemeasurementdatewillberecognizedasareductionoftheOPEBliabilityintheyearendingAugust31,2025.
Note7-PostEmploymentBenefitsotherthanPensions(OPEB)(continued)
OPEBExpenseandDeferredOutflowsofResourcesandDeferredInflowsofResourcesRelatedtoOPEBActivity(continued)
AmountscurrentlyreportedasdeferredoutflowsofresourcesanddeferredinflowsofresourcesrelatedtoOPEBs,excluding contributionssubsequenttothemeasurementdate,willberecognizedinOPEBexpenseasfollows:
Note8-Long-Term Contracts
CustomerContracts
TheAuthorityhascontractedwithitscustomerstosellanddeliverwaterondemand,andthecustomershaveagreedtobuy fromtheGCWAortopayforwhethertakenornot,minimumquantitiesofwaterassetforthinthecontracts.
Cost SharingWaterProjectwithCityofHouston
TheAuthorityenteredintoalong-termcostsharingwaterprojectcontractwiththeCityofHouston,Texastojointlyfinance andoperatetheSoutheastWaterPurificationPlant(SEWPP)tosupplyexistingandfuturetreatedwaterneedsoftheCityof LeagueCityandtheCityofPearland,Texas.TermsofthecontractprovidethattheGCWAshalldirectlyreimbursetheCityof HoustononaperiodicbasisfortheexpensesincurredinproducingandpumpingthewateractuallydeliveredtoGCWA.
BrooksLakeDiversionWeirAgreement withCityofSugarLand
TheAuthorityenteredintoalong-termagreementtoestablishamechanismtofundthedesign,construction,operation,and maintenancecostsoftheBrooksLakeDiversionWeir. TheCityofSugarLandwillfinancetheprojectandtheAuthoritywill reimbursetheCityofSugarLandforfiftypercentofthecostoftheprojectovernomorethantenyearsinthemannerstated intheagreement. FollowingthecompletionandacceptancebytheCityofSugarLandoftheproject,thepartieswilltrueup andreconciletheprojectcoststoactualcoststoreflectfullreimbursementtotheCityofSugarLandbytheAuthorityforfifty percentoftheprojectcosts.
Note9-Employee401(K)PlanTrust
TheAuthority adopted theGulfCoastWaterAuthorityEmployee401(K) Plan(the"Plan")forthebenefitofits employees. ThePlanisexemptfromtaxundersection501(a)oftheInternalRevenueCodeof1986,byreasonofqualifyingundersection 401(a)oftheCode.ThePlanisself-directed,aseachparticipantdirectsthetrusteesastotheinvestmentoftheassetsfor eachparticipant'saccount.Employercontributionsare4%ofgrossincomeforemployeeshiredpriortoJanuary1,1999,the effectivedateofthePlan.ForemployeesemployedaftertheeffectivedateofthePlan,theAuthoritywillmatchonadollarfor-dollarbasisuptoamaximumof4%ofemployee'sgrossincomefromtheAuthoritytothePlan;anyemployeewouldbe vestedin100%oftheAuthority'scontributionstothePlanwhohasbeenemployedwiththeAuthorityforthree(3)yearsof continuousservice,includingservicepriortotheeffectivedateofthePlan.EmployeesmaycontributetothePlanuptothe maximumamountpermittedundertheInternalRevenueCode.TotalemployercontributionsfortheyearendedAugust31, 2024,were$284,606.
Note10-Insurance
TheAuthorityisexposedtovariousrisksoflossrelatedto torts;theftof,damageto,anddestructionofassets;errorsand omissions;personalinjuries;andnaturaldisasters.Significantlossesarecoveredbyinsuranceasdescribedbelow.Therewere no reductions in insurance coverage from the prior fiscal year. There have been no settlements which have exceeded the insurancecoverageforeachofthepastthreefiscalyears.RiskoflossretainedbytheAuthorityistheannualpremiumplus therelateddeductibles.Nouninsuredlossesfortheyearexceededtheseamounts.
At August 31, 2024, the Authority had a property and machinery breakdown coverage of $97,350,118; flood and earth movement coverage of $5,000,000; general liability coverage with a per occurrence limit of $1,000,000 and a general aggregate limit of $3,000,000; umbrella liability of $1,000,000; director’s liability of $1,000,000; automobile liability of $1,000,000;andworkerscompensationwithstatutorycoverage.
All coverages with the exception of automobile and workers compensation are insured with admitted A.M. Best rated A insurancecompanies.TheautomobileandworkerscompensationareplacedwithTexasMunicipalLeagueIntergovernmental RiskPool. TheAuthorityparticipatesintheTexasMunicipalLeagueIntergovernmentalRiskPool.Riskoflossretainedbythe Authorityistheannualpremiumplustherelateddeductibles.Nouninsuredlossesfortheyearexceededtheseamounts.
Note11-FinancingAgreementLong-TermReceivable
SoutheastTransmissionLineProject
The Authority has entered into a cost sharing agreement in the League City SE Water Purification Plant Division to issue revenuebondsinordertofinancetheexpansionoftheSoutheastTransmissionLineProject(the“SETLProject”)on-behalfof theCityofLeagueCity(the“City”).Theprincipalandinterestforthesebondsarepaidsolelyfrompaymentsreceivedfrom theCity.TheAuthorityhasrightstothewatertransportationcapacityofthoseassetsandwillhaveabeneficialinterestin theassetsoncetheassociatedbondsaredeemedtobepaidinfull.FromandafterthecompletionoftheSETLProject,the AuthorityshallprovidefortheoperationandmaintenanceoftheSETLProject. Assuch,theAuthorityreportsalong-term receivablewhichrepresentstheremainingbalancetobepaidbytheCityoverthelifeofthebonds,lesstheamountofthe current receivable billed and outstanding as of August 31, 2024. Since the City will fund the remaining portion of the outstandingliabilityandrelatedcosts,thereisnonetpositionreportedforthisdivision.
ThomasMackeyWaterTreatmentPlant Expansion
TheAuthorityhasenteredintomultipleagreementstoissuerevenuebondsinordertofinancetheThomasMackeyWater Treatment Plant Expansion (the “TMWTP Project”) on-behalf of municipal customers. The principal and interest for these bondsarepaidsolelyfrompaymentsreceivedfromtheparticipatingcustomers.TheAuthorityisthelegalowneroftheassets andshallownallofthewaterdeliveredthroughtheTMWTPProjectuntilispassesthroughthedeliverypoint.TheAuthority is responsibleforoperation andmaintenanceoftheTMWTPProjectatthesolecostandexpenseoftheparticipants.The Authorityreportsalong-termreceivablewhichrepresentstheremainingbalancetobepaidbythecustomeroverthelifeof the bonds, less the amount of the current receivable billed and outstanding as of August 31, 2024. A deferred inflow is reportedandwillberecognizedastheprojectcostsareincurred. Asaresult,thereisnonetpositionreportedforthisdivision.
Note11-FinancingAgreementLong-TermReceivable(continued)
SouthTransmissionSystemProject
The Authority has entered into multiple agreements to issue revenue bonds in order to finance the South Transmission SystemProject(the“STSProject”)on-behalfofmunicipalcustomers.Theprincipalandinterestforthesebondsarepaidsolely frompaymentsreceivedfromtheparticipatingcustomers.TheAuthorityisthelegalowneroftheassetsandshallownallof the water delivered through the STS Project until is passes through the delivery point. The Authority is responsible for operationandmaintenanceoftheSTSProjectatthesolecostandexpenseoftheparticipants.TheAuthorityreportsalongtermreceivablewhichrepresentstheremainingbalancetobepaidbythecustomeroverthelifeofthebonds,lesstheamount ofthecurrentreceivablebilledandoutstandingasofAugust31,2024.Adeferredinflowisreportedandwillberecognized astheprojectcostsareincurred. Asaresult,thereisnonetpositionreportedforthisdivision.
Note12-LeasesReceivable
TheAuthorityhastwoagreementsinplaceinwhichpaymentsarereceivedbytheAuthorityinexchangefortheright-to-use Authorityassets.Thefirstagreementconsistsofmonthlypaymentsof$1,000withaninterestrateof3%throughJuly2044, resultinginaleasereceivableof$415,383asofAugust31,2024. Thesecondagreementconsistsofinitialmonthlypayments of$1,000,escalatedannuallyatarateofthreepercent(3%)throughJuly2038,resultinginaleasereceivableof$149,612as ofAugust31,2024. AdeferredinflowofresourcesforfuturerevenuerecognitionisreportedasofAugust31,2024foreach receivableintheamountof$380,949and$142,223,respectively.
REQUIRED SUPPLEMENTARY INFORMATION
TEXAS COUNTY & DISTRICT RETIREMENT SYSTEM
SCHEDULE OF CHANGES IN NET PENSION LIABILITIES AND RELATED RATIOS
For the Last Ten Measurement Years Ended December 31
Benefitpayments (1,993,701)(1,759,737)(1,450,851)(1,403,340)(1,288,586)
Refundsofcontributions (38,134)(1,629)(15,608)(47,704)(61,401) Administrativeexpenses (18,947)(19,472)(19,262)(21,504)(20,497) Other (14,486)(10,152)2,393(5,033)(11,007)
Netchangeinfiduciarynetposition 3,057,173(2,376,003)6,214,0672,491,4723,397,231 FiduciaryNetPosition,Beginning 33,227,14635,603,14929,389,08226,897,61023,500,379 FiduciaryNetPosition,Ending(b) $36,284,31933,227,146 $ $35,603,14929,389,082 $ $26,897,610
TEXAS COUNTY & DISTRICT RETIREMENT SYSTEM
SCHEDULE OF CHANGES IN NET PENSION LIABILITIES AND RELATED RATIOS For the Last Ten Measurement Years Ended December 31
Benefitpayments (1,035,984)(898,838)(781,376)(637,742)(526,744)
Refundsofcontributions (41,552)(29,821)(39,657)(52,491)Administrativeexpenses (18,876)(16,142)(16,435)(14,817)(15,246) Other (6,234)(2,760)(403,097)23,896365,134 Netchangeinfiduciarynetposition (771,680)2,902,586947,740(303,263)1,900,671 FiduciaryNetPosition,Beginning 24,272,05921,369,47320,421,73320,724,99618,824,325 FiduciaryNetPosition,Ending(b) $23,500,37924,272,059 $ $21,369,47320,421,733 $ $20,724,996 Netpensionliability/(asset),ending=(a)-(b)
Coveredpayroll $5,018,5114,684,610 $ $4,318,7163,830,584 $ $3,469,295
TEXAS COUNTY & DISTRICT RETIREMENT SYSTEM
SCHEDULE OF EMPLOYER PENSION CONTRIBUTIONS
Last Ten Fiscal Years
Contribution
YearActuariallyActualContribution asa%of EndingDeterminedEmployerDeficiencyCoveredCoveredEmployee August31,ContributionContribution(Excess)Payroll Payroll
TEXAS COUNTY & DISTRICT RETIREMENT SYSTEM
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITIES AND RELATED RATIOS For the Last Seven Measurement Years Ended December 31
Notes:
GASB75requirestenyearsofdatatobeprovidedinthisschedule.However,because thisstandardwasimplementedinfiscalyear2018,dataforpreviousyearsisunavailable.
NoassetsareaccumulatedinatrustthatmeetsthecriteriaofGASBcodification P22.101orP52.101topayrelatedbenefitsfortheOPEBplan.
TEXAS COUNTY & DISTRICT RETIREMENT SYSTEM
SCHEDULE OF EMPLOYER OPEB CONTRIBUTIONS
Last Nine Fiscal Years
YearActuariallyActualContributionCoveredasa%of EndingDeterminedEmployerDeficiencyEmployeeCoveredEmployee August31,ContributionContribution(Excess)Payroll Payroll
Notes:
GASB75requirestenyearsofdatatobeprovidedinthisschedule.However,becausethis standardwasimplementedinfiscalyear2018,dataforpreviousyearsisunavailable. NoassetsareaccumulatedinatrustthatmeetsthecriteriaofGASBcodification P22.101orP52.101topayrelatedbenefitsfortheOPEBplan.
SUPPLEMENTARY INFORMATION
-
AND
(BUDGETARY BASIS) For the Year Ended August31,2024
1Meteredwatersalesrevenueandsuppliesandmaterialsexpensesdoesnotincludereductionforeliminations.
COMBINING INFORMATION BY DIVISION - NET POSITION
August31,2024
Assets
August31,2024
August31,2024
Projects
COMBINING INFORMATION BY DIVISION - NET POSITION
August31,2024
Financingreceivable-duewithinoneyear
Leasereceivable-duewithinoneyear
Leasereceivable-dueinmorethanoneyear
August31,2024
Year Ended August31,2024
Year Ended August31,2024
Year Ended August31,2024
Year Ended August31,2024
Year Ended August31,2024
COMBINING INFORMATION BY DIVISION - CASH FLOWS
Year Ended August31,2024
LeagueCitySE Water PurificationPlant (SEWPP) ThomasS. MackeyWater TreatmentPlant (TMWTP) American/ BriscoeCanal Operations Galveston CountyWCID#12
CashFlowsfromOperatingActivities
Receiptsfromcustomersandusers $5,823,93921,857,466 $ $33,623,079181,162 $ Paymentstointragovernmentalusers (60,000)(376,486)(4,074,186)(50,484) Paymentstosuppliers (5,707,865)(13,131,291)(12,183,357)(16,560) Paymentstoemployees -(3,537,670)(3,438,979)NetCashProvided(Used)byOperatingActivities 56,0744,812,01913,926,557114,118
CashFlowsfromNoncapitalFinancingActivities Intragovernmentaltransfersin(out) - -(172,314)Paymentsreceivedonlong-termreceivable 534,817
(390,000)
Interestpaidonnoncapitalbonds (432,336) -
NetCashProvided(Used)byNoncapital FinancingActivities (287,519) -(172,314) -
CashFlowsfromCapitalandRelated FinancingActivities
Acquisitionandconstructionofcapitalassets -(2,399,574)(2,263,489)Principalpaidonbonds -(345,000) -(85,000) PrincipalpaidonleasesandSBITAs -(70,705) -Interestpaidonbonds -(995,878) -(36,238)
InterestpaidonleasesandSBITAs -(25,295)
ReconciliationofOperatingIncome(Loss)to NetCashProvided(Used)byOperatingActivities
Adjustmenttoreconcileoperatingincome(loss) tonetcashprovided(used)byoperatingactivities: Depreciation/amortization -1,363,1862,856,99244,628 Interestonleasereceivable -(3,315)(12,593)(Increase)decreasein: Accountsreceivable 495,705(680,451)861,860Prepaiditems -(137,447)(47,118)Increase(decrease)in: Accountspayableandaccruedliabilities (142,755)92,3862,951141 Wagespayable -9,54110,469
Compensatedabsencespayable -46,3579,619
Unearnedrevenue - -(288,767)
Deferredinflows-leases -(10,219)(19,128)Pension/OPEBrelatedamounts -175,327174,078
NetCashProvided(Used)byOperatingActivities$56,0744,812,019 $ $13,926,557114,118 $ NoncashInvesting,Capital,andFinancingActivities Gain(loss)ondisposalofcapitalassets $-99,792 $ $1,488,441$Payablesrelatedtocapitalpurchases -99,41930,209 -
COMBINING INFORMATION BY DIVISION - CASH FLOWS
Year Ended August31,2024
CashFlowsfromOperatingActivities
Receiptsfromcustomersandusers
1997Galveston Projects South Transmission System
1998CSeries TexasCity Projects 1998DLa MarqueProjects
$-5,373,542 $ $-$-
Paymentstointragovernmentalusers -(133,548)
Paymentstosuppliers (980,303)(756,904)(184,954)(50,084) Paymentstoemployees
NetCashProvided(Used)byOperatingActivities (980,303)4,483,090(184,954)(50,084)
CashFlowsfromNoncapitalFinancingActivities
Intragovernmentaltransfersin(out)
Paymentsreceivedonlong-termreceivable
Principalpaidonnoncapitalbonds
Interestpaidonnoncapitalbonds
NetCashProvided(Used)byNoncapital FinancingActivities
CashFlowsfromCapitalandRelated FinancingActivities
Acquisitionandconstructionofcapitalassets -(7,324,269)
Principalpaidonbonds -(60,000)
PrincipalpaidonleasesandSBITAs
Interestpaidonbonds -(165,065)
InterestpaidonleasesandSBITAs
Leasepaymentsreceived
Grantsforcapitalprojects
NetCashProvided(Used)byCapitalandRelated FinancingActivities
CashFlowsfromInvestingActivities
Adjustmenttoreconcileoperatingincome(loss) tonetcashprovided(used)byoperatingactivities: Depreciation/amortization
Interestonleasereceivable
(Increase)decreasein: Accountsreceivable
Prepaiditems
Increase(decrease)in: Accountspayableandaccruedliabilities
Compensatedabsencespayable
Deferredinflows-leases
Pension/OPEBrelatedamounts
NoncashInvesting,Capital,andFinancingActivities Gain(loss)ondisposalofcapitalassets
Payablesrelatedtocapitalpurchases
COMBINING INFORMATION BY DIVISION - CASH FLOWS
Year Ended August31,2024
2002Galveston Projects
CashFlowsfromOperatingActivities
Receiptsfromcustomersandusers
Juliff/Chocolate Bayou Operations
Pearland SoutheastWater PurificationPlant (PSEWPP) North Transmission System
$-3,126,991 $ $2,193,167107,156 $ Paymentstointragovernmentalusers -(1,273,968)(55,599)(66,228) Paymentstosuppliers (2,235)(1,654,813)(2,323,347)(28,504) Paymentstoemployees -(1,605,348) - -
NetCashProvided(Used)byOperatingActivities (2,235)(1,407,138)(185,779)12,424
CashFlowsfromNoncapitalFinancingActivities
Intragovernmentaltransfersin(out) -(19,786)
Paymentsreceivedonlong-termreceivable
Principalpaidonnoncapitalbonds
Interestpaidonnoncapitalbonds
NetCashProvided(Used)byNoncapital FinancingActivities -(19,786) - -
CashFlowsfromCapitalandRelated FinancingActivities
Acquisitionandconstructionofcapitalassets -(5,212,937) -(15,569) Principalpaidonbonds
PrincipalpaidonleasesandSBITAs
Interestpaidonbonds
InterestpaidonleasesandSBITAs
Leasepaymentsreceived
Grantsforcapitalprojects -4,996,335
NetCashProvided(Used)byCapitalandRelated FinancingActivities -(216,602) -(15,569)
CashFlowsfromInvestingActivities
Adjustmenttoreconcileoperatingincome(loss) tonetcashprovided(used)byoperatingactivities: Depreciation/amortization
COMBINING INFORMATION BY DIVISION - CASH FLOWS
Year Ended August31,2024 Bayshore Transmission System
CashFlowsfromOperatingActivities
Receiptsfromcustomersandusers
Reservoir Operations(TCR)
Industrial Operations(TCI) WaterResiliency Fund
$56,10015,906,934 $ $15,126,9239,085,190 $ Paymentstointragovernmentalusers (53,976)(945,672)(1,755,694)Paymentstosuppliers (16,872)(13,798,161)(13,343,989)(9,158,880) Paymentstoemployees
NetCashProvided(Used)byOperatingActivities (14,748)1,163,10127,240(73,690)
CashFlowsfromNoncapitalFinancingActivities
Intragovernmentaltransfersin(out)
-192,100 Paymentsreceivedonlong-termreceivable
Principalpaidonnoncapitalbonds
Interestpaidonnoncapitalbonds
NetCashProvided(Used)byNoncapital FinancingActivities
CashFlowsfromCapitalandRelated FinancingActivities
Acquisitionandconstructionofcapitalassets (18,835)24,939(766,385)Principalpaidonbonds -(1,120,000)(785,000)PrincipalpaidonleasesandSBITAs
-(141,411)Interestpaidonbonds -(128,150)(383,927)
InterestpaidonleasesandSBITAs
Leasepaymentsreceived
Grantsforcapitalprojects
-(50,590)
-57,875
ReconciliationofOperatingIncome(Loss)to NetCashProvided(Used)byOperatingActivities Operatingincome(loss) $(17,868)113,698 $ $(1,741,655)(73,606) $
Adjustmenttoreconcileoperatingincome(loss) tonetcashprovided(used)byoperatingactivities: Depreciation/amortization
Interestonleasereceivable
4061,037,3831,949,395
(Increase)decreasein: Accountsreceivable 2,124(10,051)(152,014)(57,875) Prepaiditems - -(89,982)Increase(decrease)in: Accountspayableandaccruedliabilities
59022,07161,49657,791 Wagespayable
Compensatedabsencespayable
Unearnedrevenue
Deferredinflows-leases
Pension/OPEBrelatedamounts
NetCashProvided(Used)byOperatingActivities$(14,748)1,163,101 $ $27,240(73,690) $
NoncashInvesting,Capital,andFinancingActivities Gain(loss)ondisposalofcapitalassets $-$-$-$Payablesrelatedtocapitalpurchases
COMBINING INFORMATION BY DIVISION - CASH FLOWS
Year Ended August31,2024
CashFlowsfromOperatingActivities
Receiptsfromcustomersandusers
Paymentstointragovernmentalusers
$113,949(42,738,618) $ $69,836,980
Paymentstosuppliers (4,263,561)42,738,618(34,863,062)
Paymentstoemployees (5,471,982) -(14,053,979)
NetCashProvided(Used)byOperatingActivities (775,753) -20,919,939
CashFlowsfromNoncapitalFinancingActivities
Intragovernmentaltransfersin(out)
Paymentsreceivedonlong-termreceivable
Principalpaidonnoncapitalbonds
Interestpaidonnoncapitalbonds
-534,817
NetCashProvided(Used)byNoncapital FinancingActivities - -(287,519)
CashFlowsfromCapitalandRelated FinancingActivities
Acquisitionandconstructionofcapitalassets
PrincipalpaidonleasesandSBITAs (22,957) -(235,073)
Interestpaidonbonds (1,184) -(1,710,442) InterestpaidonleasesandSBITAs
This section of the Authority’s annual comprehensive financial report presents detailed information as a context for understandingwhattheinformationinthefinancialstatements,notedisclosuresandrequiredsupplementaryinformation saysabouttheAuthority’soverallfinancialhealth.
These schedules contain trend information to help the reader understand how the Authority’s financial performanceandwell-beinghavechangedovertime.
These schedules contain information to help the reader assess the Authority’s most significant local revenue source,thewaterandsewerservice.
TheseschedulespresentinformationtohelpthereaderassesstheaffordabilityoftheAuthority’scurrentlevels ofoutstandingdebtandtheAuthority’sabilitytoissueadditionaldebtinthefuture.
Theseschedules offer demographicand economic indicatorsto helpthereader understand theenvironment withinwhichtheAuthority’sfinancialactivitiestakeplace.
Theseschedulescontainserviceandinfrastructuredatatohelpthereaderunderstandhowtheinformationin theAuthority’sfinancialreportrelatestotheservicestheAuthorityprovidesandtheactivitiesitperforms.
Sources: Unless otherwise noted, the information in these schedules is derived from the annual financial reports for the relevantyear.
Last Ten Fiscal Years
Note:TheAuthoritydoesnotcurrentlyhaveanygovernmentalactivities.
Last Ten Fiscal Years
Note:TheAuthoritydoesnotcurrentlyhaveanygovernmentalactivities.
82,516183,850
2,537,9111,626,7991,163,6321,377,1521,141,508
WATER SALES
Last Ten Fiscal Years
RawWaterRates1TreatedWaterRates1 FiscalYearWaterFeesMinMaxMinMaxIrrigation&Other
201525,230,737 $ $0.140$0.350$0.690$1.530$949,941
201633,425,5610.1920.3651.0512.217 3,704,218
201735,155,3680.2000.3801.1102.090 3,948,022
201841,417,0470.2000.3801.1102.090 6,855,674
201939,863,8100.2400.4201.1802.280 7,714,731
202045,677,7790.2500.4401.2002.410 5,721,928
202144,812,2840.2500.4401.2202.500 12,899,111
202244,429,3120.2620.4621.4202.836 9,521,494
202352,848,1640.2760.4921.5863.698 14,586,510
202459,317,7980.2790.5141.6533.109 20,603,988
1Ratesbasedonperthousandgallons.Pricevariesbycustomer.
Note:Thisscheduledoesnotincludeinterruptiblewater.
PRINCIPAL WATER FEE PAYERS Current Year and Nine Years Ago
LIST OF PRINCIPAL CUSTOMERS
August 31, 2024
IndustrialCustomers
BlanchardRefining
AshlandPerformanceChemicals
INEOSAcetylsChemicals(formerlyEastman)
ValeroRefining
UnionCarbideCorp./DOW
CityofTexasCity
Topaz
CanalDivision
CityofMissouriCity
CityofSugarLand
RiverbendCountryClub
AscendPerformanceMaterial
UndergroundStorage
FirstColonyCommonsShoppingCenter
MunicipalCustomers
CityofLeagueCity
BacliffMUD
BayviewMUD
GalvestonCountyWCID#1
CityofLamarque
CityofTexasCity
SanLeonMUD
GalvestonCountyWCID#12
CityofHitchcock
GalvestonCountyWCID#8
GalvestonCountyFWD#6
GalvestonCountyMUD#12
CityofGalveston
ChocolateBayou FortBendWCID#2
CityofPearland
MainlandConcrete
DiamondK
FirstColonyCommunityAssociation
PecanGroveMUD
SugarCreekCountryClub
MagnoliaCreekCountryClub
SilverCreekCommunityAssociation
SilverRidgeHomeOwnersAssociation
INEOSOlefins&PolymersUSA
RiceTec
Note:TheabovecustomersrepresenttheAuthority'sprincipalcustomers.Becauseofthelong termnatureofAuthority'scontracts,themajorityofthesecustomershavebeencustomersof theAuthorityfortenyearsormore.
RATIO OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
201536,750,000
201628,939,556
201843,114,284
202449,291,902 2,414,069 24,25260.32% 1Includespremiumonbonds. 2Basedonoperatingrevenues.
TheAuthorityhasnotaxationauthority,thereforerelatingtheAuthority'sdebtto personalincomeorpopulationisnotapplicable.Further,certainoftheAuthority's customersareindustrialorothernon-municipaluserssuchthattheAuthority'sdebt topersonalincomeorpopulationisnotapplicable.
Note:DetailsregardingtheAuthority'soutstandingdebtcanbefoundinthenotesto thefinancialstatements.
PLEDGE - REVENUE COVERAGE BY DIVISION
Fiscal Year Ended August31, 2024
GalvestonCounty
TexasCityReservoir Operations(TCR)1 16,388,97214,765,9041,623,0681,145,00096,5041.31
TexasCityIndustrial Operations(TCI)1 15,634,34315,071,197563,146820,000354,1760.48
LeagueCitySEWater PurificationPlant2 5,635,1095,625,1109,999235,000183,1500.02
ThomasS.MackeyWater TreatmentPlant(TMWTP)23,967,25517,231,6116,735,644365,000972,4195.04 SouthTransmission System 6,808,632225,3126,583,32065,000157,30029.61
1Revenueincludesoperatingrevenuesandinvestmentincome.
2Revenueincludesinvestmentincomeandpaymentsreceivedfrommunicipalitiesrelatingtothe long-termreceivable.Seenote11formoreinformation.
3Operatingexpensesdonotincludedepreciation.
Source:Currentandprioryearauditedfinancialstatements.
TheGCWA'sboundariesstretchacrossthreecountiesincludingFortBend,Brazoriaand Galveston.GCWAprovideswaterforindustry,agriculture,municipalitiesandirrigation. TheGCWA'sservicesincludewatersales,distribution,watertreatmentandirrigationfor farmersandrecreation.
Thetablesbelowandonthefollowingpageportraythepopulationandeconomicbase withinGCWA'sboundaries.
SourceUSCensusBureau,QuickFacts
EducationalAttainment
SourceUSCensusBureau,QuickFacts
Highschoolgraduateorhigher,percentofpersonsage25+,2017-2021 Bachelor'sdegreeorhigher,percentofpersonsage25+,2017-2021
Note:Informationnotavailableasofthereportdate.
County/City MedianAgeLargestEmployers
GalvestonCounty 39UTMB
FortBendCounty N/AFortBendISD
BrazoriaCounty N/AAlvinISD
CityofLeagueCity 36ClearCreekISD
CityofLaMarque N/AWal-Mart
CityofTexasCity 35Marathon-GalvestonBayRefinery
CityofPearland 35PearlandISD
CityofGalveston 39UTMB
CityofMissouriCity 39FortBendISD
CityofSugarLand 41MethodistSugarLandHospital
SourceAnnualComprehensiveFinancialReportforeachentity
SourceUSCensusBureau,QuickFacts
Sourcehttp://texaslmi.com/LMIbyCategory/LAUS@August2023
Note:Thistablereportsthenumberoffilled,full-timeemployeespositionsbasedonthedivisioninwhich theyareemployed.Tabledoesnotincludedbudgeted,unfilledpositions.EmployeesintheAdministration Divisionprovidecentralizedservicestoallfouroperatingdivisions,andtheirtimeandsalarycostsare allocatedtoeachdivisionbasedontimeworked.
Source:Activeemployeelistgeneratedfrompayrollsoftware. Parttimeandfulltimepositionreplacementsarenotincludedincount.
OPERATING STATISTICS
Last Ten Fiscal Years
Industrial 77,03277,50054,29249,93562,46973,17858,82071,70381,44575,377
Irrigation 21,09182,03746,45145,13648,42242,92044,37654,69853,14043,431
Municipal 54,64867,36743,11039,51749,96355,76564,37375,61771,02266,204 TotalPumpage 152,771226,904143,853134,588160,854171,863167,569202,018205,607185,012
Source:AnnualReporttoTexasCommissiononEnvironmentalQuality.
BrazosRiverWaterRightsheldbyGCWA
AuthorizedDiversionPoints
Shannon&BriscoePumpStations(A&BCanals)CA12-516899,9321/15/1926
Shannon&BriscoePumpStations(A&BCanals)CA12-517175,0002/1/1939
Shannon&BriscoePumpStations(A&BCanals)CA12-517150,00012/12/1950
Jones&OysterCreeksStorage
MayPumpStation(JuliffCanal)
MayPumpStation(JuliffCanal)
MayPumpStation(JuliffCanal)
CA11-516912,0005/14/1985
CA12-532240,0002/8/1929
CA12-532240,0003/14/1955
CA12-532275,0007/25/1983
ChocolateBayou,HallsBayou,&MustangBayouCA11-535757,5008/3/1937
OF CAPITAL ASSET ADDITIONS Last Ten Fiscal Years
CanalDivision
$7,560,8447,845,102 $