The Brazos River Authority Waco Texas

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RELEVANT FINANCIAL POLICIESCash ManagementDuring the year, funds were invested in demand deposits, obligations of the U.S. Treasury, obligationsof U.S. Government Agencies, and State investment pools as authorized by the Public Funds InvestmentAct. As of August 31, 2008 approximately 13.6% of the Authority’s funds were invested in collateralizeddemand accounts, 72.2% invested in U.S. Government Agencies, 9.7% invested in State InvestmentPool, and 4.5% invested in U.S. Treasury Obligations. The portfolio yield for the year averaged 4.0%.Additional information on the Authority’s cash management activity can be found in Note 2, of theNotes to the Basic Financial Statements.Risk ManagementThe Authority has continued its emphasis on a loss control program to minimize risk exposures.Employees are well trained in safety practices and maintain a constant vigil to correct safety hazards.Third-party insurance coverage is currently maintained to reduce risk exposures. Additional informationon the Authority’s risk management activity can be found in Note 11, of the Notes to the Basic FinancialStatements.Retirement PlanThe Authority makes an annual contribution to a non-traditional defined benefit plan in the Texas Countyand District Retirement System (TCDRS), and Authority employees make periodic contributions to theplan as well. TCDRS is a multiple-employer public employer retirement system governed by a Board ofTrustees appointed by the Governor of Texas.In addition, the Authority continues to administer the Retirement Plan for Employees of the Brazos RiverAuthority (Plan), which, effective September 2007, was closed to new entrants, and benefit accrual andcontributions were frozen. This Plan’s policies and performance are monitored closely by the RetirementCommittee which consists of four (4) Directors and three (3) Authority employee representativesappointed by the Authority’s Board of Directors. Additional information on the Authority’s retirementplans can be found in Note 7, of the Notes to the Basic Financial Statements.Internal Accounting ControlsInternal accounting controls are designed to provide reasonable assurance regarding safeguarding ofassets against loss from unauthorized use or disposition, and the reliability of financial records forpreparing financial statements and maintaining accountability for assets. We believe that the Authority’sinternal accounting controls adequately safeguard assets and provide reasonable assurance of properrecording of all financial transactions.As a recipient of Federal and State loans and grants, the Authority is also responsible for ensuring thatadequate internal controls are in place to document compliance with applicable laws and regulationsrelated to these programs. These internal controls are subject to periodic evaluation by management.As part of the Authority’s audit, tests were made of the internal controls and of its compliance withlaws and regulations that could have a material effect on the Authority’s financial statements. Althoughthis testing was not sufficient to support an opinion on the Authority’s internal control system or itscompliance with laws and regulations, no material instance of noncompliance related to the audit for theyear ended August 31, 2008 are disclosed.xiv
Budgetary ControlsThe annual budget serves as the basis for the Authority’s financial planning and control. Budgetarycontrols are maintained to ensure the proper management of resources, and are required pursuant tocertain contracts for service. Although there are no legal requirements to include comparative budget-toactualexpense statements in this report, such information is included in the Supplemental Informationsection. In addition, it is provided to the Board of Directors on a quarterly basis throughout the fiscalyear.Charges for services are based on budgeted operating expenses, including debt service requirements andcapital expenditures, but excluding depreciation and amortization. In the cost reimbursable operations,charges for services are adjusted accordingly at the end of each year to a break-even basis. These yearendadjustments are recorded as either accounts receivable or unearned revenue.MAJOR INITIATIVESDuring Fiscal Year 2008, the Authority managed many new and ongoing water quality and water supplyprojects. Water supply remains the priority for the Authority as we continue to work to obtain a majornew water right and to develop groundwater. The following is a synopsis of select programs and projectsmanaged by the Authority in Fiscal Year 2008:East Williamson County Regional Water SystemConstruction was completed in March 2008 on the expansion of the East Williamson County RegionalWater System. Retrofit of the older portions of the plant began immediately, and were completed inJune 2008. The expansion increases the plant’s capacity from 5.3 million gallons per day (mgd) to12.8 mgd, and is part of the development of a long-term regional treated water system for WilliamsonCounty.Fort Bend CountyThe Authority continued work with the cities of Richmond and Rosenberg, municipal utility districts andother entities in West Fort Bend County on a regional surface water treatment project. A preliminaryengineering report was completed and recommendations were made on implementing a “treatabilitymonitoring” program.Grant InitiativesDuring FY2008, the Authority submitted applications for seven grants primarily related to HomelandSecurity projects. Three grants have been approved for $183,651, three are pending for $149,250, andone was not awarded. In addition, there was one proposal submitted for inclusion in the StatewideInteroperability Communication Plan that the Authority participated, in order to be eligible for futureHomeland Security funding. In addition to the above grants, other funding programs are being researchedand will be applied for as the project qualifies.Possum Kingdom Lake – Hydroelectric GenerationOn November 1, 2007, the Authority and Brazos Electric Power Cooperative (BEPC) signed a FacilityUse Agreement for the lease of the Possum Kingdom Lake hydroelectric generation facility. Theterms of the agreement will take effect when all approvals are received from both the Federal EnergyRegulatory Commission (FERC) and the Rural Utility Services (RUS).xv
Page 1: The Brazos River AuthorityWaco, Tex
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Page 7 and 8: Introductory Section2008 Comprehens
Page 9 and 10: BrazosRiverAuthorityWade ComptonGea
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Statistical Section2008 Comprehensi
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Cover Photo: Possum Kingdom Lake Ra
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The Brazos River Authority Waco Texas

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