BRAZOS RIVER AUTHORITYCOMBINED STATEMENTS OF FIDUCIARY NET ASSETSAUGUST 31, 2008AND 2007(in thousands)2008 2007ASSETSCash $ 3,855$ 3,738Investments 2,917 -Receivables - 8Accrued Interest 13 -TOTAL ASSETS $ 6,785$ 3,746LIABILITIESHeld for future debt service $ 3,268$ 3,226Held for future construction cost 3,517 520TOTAL LIABILITIES $ 6,785$ 3,746<strong>The</strong> accompanying notes are an integral part of these statements.20
BRAZOS RIVER AUTHORITYNOTES TO THE BASIC FINANCIAL STATEMENTSAUGUST 31, 2008AND 2007(in thousands)1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESReporting Entity - <strong>The</strong> <strong>Brazos</strong> <strong>River</strong> <strong>Authority</strong> (the “<strong>Authority</strong>”) was created by the <strong>Texas</strong> Legislaturein 1929, pursuant to constitutional Provision Section 59, Article 16, as a governmental agency of theState of <strong>Texas</strong>. <strong>The</strong> <strong>Authority</strong> is governed by a board of 21 directors appointed by the Governor for sixyearterms, subject to approval by the <strong>Texas</strong> Senate. <strong>The</strong> <strong>Authority</strong> is not financially accountable to theState of <strong>Texas</strong>. <strong>The</strong> <strong>Authority</strong> is responsible for conservation, control, and development of the surfacewater resources of the <strong>Brazos</strong> <strong>River</strong> Basin. <strong>The</strong> <strong>Authority</strong> cooperates with cities and other local agenciesin the construction and operation of water treatment and regional sewerage systems to improve andmaintain the quality of water in the <strong>Brazos</strong> <strong>River</strong> and its tributaries. <strong>The</strong> <strong>Authority</strong> also plans anddevelops water supply projects and commits the water it can supply under contracts to cities, towns,industries, and other water users throughout the <strong>Brazos</strong> <strong>River</strong> Basin and adjacent areas.Principles of Accounting - <strong>The</strong> accompanying basic financial statements have been prepared on the fullaccrual basis of accounting as prescribed by the Governmental Accounting Standards Board (“GASB”).<strong>The</strong> <strong>Authority</strong> consists of a single enterprise fund through which all financial activities are recorded, andfour agency funds that report assets and liabilities held by the <strong>Authority</strong> in a custodial capacity forothers. Under GASB Statement 20, the <strong>Authority</strong> has elected not to apply Financial AccountingStandards Board (“FASB”) Statements and Interpretations issued after November 30, 1989.Basis of Presentation - <strong>The</strong> <strong>Authority</strong> presents its financial statements in accordance with GASB 34guidance for governments engaged in business type activities. Accordingly, the basic financialstatements of the <strong>Authority</strong> consist of Statement of Net Assets, Statement of Revenues, Expenses andChanges in Net Assets, Statement of Cash Flows, Combined Statement of Fiduciary Net Assets andNotes to the Basic Financial Statements.Enterprise Funds – Enterprise Funds are required to be used to account for operations for which a fee ischarged to external users for goods or services and the activity (a) is financed with debt that is solelysecured by a pledge of the net revenues, (b) has third-party requirements that the cost of providingservices include capital cost, be recovered with fees and charges, or (c) has a pricing policy designed forthe fees and charges to record similar cost.Agency Funds - <strong>The</strong> <strong>Authority</strong>’s Agency Funds are created to act as a custodian for the City ofRobinson, the City of Temple, the City of Keene and Jonah Water Special Utility District for thefacilitating of bond proceeds in accordance with the <strong>Texas</strong> Water Development Board Rules and InterlocalAgreements relating to financial programs. <strong>The</strong> Agency Funds only report assets and liabilities in astatement of fiduciary net assets.Revenue Recognition - Revenues are recorded when earned. Unearned revenues are reflected in theaccompanying statement of net assets as unearned revenues. Nonrefundable charges to contractingparties relating to the acquisition of capital assets or project development costs are initially recorded asnoncurrent unearned revenues and are amortized to income over periods equal to the lives of the assetspurchased from such charges on a straight-line basis. Refundable charges to contracting parties relatingto the acquisition of capital assets or project development costs are recorded as other noncurrentliabilities.21
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