william f. scott daniel orsini information required by ... · matt fleming (2) mailing address,...

Chambers County Improvement District No. 1

Information Required by Section 26.18, Texas Tax Code

Date: 01-01-2020

(1) Name of each member of the governing body:William F. ScottDaniel OrsiniCraig Cavalier

Robert D. Leiper

Robert S. JonesJohn W. Klein

Matt Fleming

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

2727 Alien Parkway, Suite 1100Houston, Texas 77019

713-652-650094095(%smithmur.com

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

Same as Item (2) above.

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

See Attached.

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

See Attached.

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

2019 Budget Revenues 2020 Budget Revenues $Amt change % Change

$3,638,000 $3,695,000 $57,000 1.5667949%

(7) Amount of property tax revenue budgeted for maintenance and operations for the

m'ecedmg two years and the current year:

See attached budgets.

94095-002 461618vl

(8) Amount of property tax revenue budgeted for debt service for the preceding two years and

the current year:

The District does not budget for debt service.

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

/ears:

2019: $0.06

2018: $0.06

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

2019: $0.60

2018: $0.60

(11) This information required by Section 26.18 is applicable only to school districts.

(12) Tax rate for maintenance and operations proposed by the taxing unit for the current year:

As of the date of the report, no proposed tax rate has been established for the current year.

(13) Tax rate for debt service proposed by the taxing unit for the current year:

As of the date of the report, no proposed tax rate has been established for the current year.

(14) This information required by Section.26.18 is applicable only to school districts.

(15) The most recent financial audit of the District.

See attached.

94095-002 461618vl

Chambers Co Improvement District #1

Operating Budget12/31/18

December 13, 2017.

IREVENUES"

Water RevenuesSewer Revenues

Penalty & interestMaintenance taxInterest

Total revenues

$880,000.00$275,000.00

$7,500.00$590,000,00$12,000.00

$1,764,500.00

I EXPENDITURES-

Purchased waterOperator feesBilling expenseRepairs & maintenanceClearing & mowingSludge haulingGarbageChemicalsLaboratory feesUtilitiesPermitsInsuranceTCEQ revenue and regulatory assessmentLegal feesEngineeringBookkeepingAudit feesTax consultantProject managementEconomic developmentPublic affairsMiscellaneousFire Una operationsEmergency protection services

$750,000,00$60,000.00

$2,500,00$200,000,00$175,000.00

$7,600,00$3,000,00

$26,000.00$18,000,00$45,000,00

$2,000,00$16,000,00

$6,500.00$165,000.00

$35,000.00$16,000,00$20,000.00

$5,000.00$125,000,00$15,000.00

$180,000.00$7,500.00$1,500,00

$240,000.00

Total expenditures • . $2,120,600.00

Excess revenues (expenditures) - District Operations ($356,000.00)

Excess revenues (expenditures) - CedarPort Terminal (attached) $681,477.00

Total excess revenues (expenditures) $325,477,00

Chambers Co Improvement District #1Terminal Operations

Operating Budget12/31/18

IREVENUES

Container revenues.

Equipment rentalColl revenuesSteel pipeCentury AsphaltSpecial projects (Lone Star Fabrication)Lone Star laydown rentalLaydown rental - five acres

Laydown rental - two acres

Total revenues

IEXPENDITURES

Insurance

UtilitiesTexas Land Office paymentDock maintenanceEquipment repairDock repairsOther repairsEngineering - TIGER GrantOther costs

Total expenditures

Excess revenues (expenditures) - To Page 1

December 13, 2017

$162,000.00$32,400.00

$120,000.00$79,200.00

$100,000.00$15,000.00

$116,000.00$240,000,00$48,000.00

$912,600.00

$40,000.00$6,000.00$3,123.00

$24,000.00$54,000.00$66,000.00$12,000.00$20,000.00$6,000,00

$231,123.00

$681,477.00

Chambers Co Improvement District #1Operating Budget12/31/19

(REVENUES

Water RevenuesSewer RevenuesPenalty & interestMaintenance taxInterest

Total revenues

J$1,385.000.00

$400,000.00$15,000.00

$650,000.00$18,000.00

$2,468,000.00

IEXPENDJTURES^

Purchased water $1,000,000.00Operator fees . $90,000.00Billing expense $3,000.00Repairs & maintenanc0 $250,000.00Clearing & mowing $200,000.00Sludge hauling $10,000.00Garbage $4,000.00Chemicals $30,000,00Laboratory fees - $25,000.00Utilities $70,000.00Permits $2,000,00Insurance $16,000,00TCEQ revenue and regulatory assessment $9,000.00Legal fees $165,000,00Engineering $75,000,00Bookkeeping $16,000.00Audit fees . $22,000.00Project management $130,000.00Tax consultant $5,000.00Economic development $15,000.00Miscellaneous .. $7,500.00Emergency protection services . $300,000.00

Total expenditures $2,444,500.00

Excess revenues (expenditures) - District Operations $23,500.00

Excess revenues (expenditures) - CedarPort Terminal (attached) $835,27.7.00

Total excess revenues (expenditures) $858,777,00

Chambers Co Improvement District #1Terminal Operations ..:

12/31/19

(REVENUES

Container revenueEquipment rentalBreakbulkDockageCentury TerminalSpecial projectsSecurity feesLaydown rental-Lone StarLaydown rental-five acresLaydown rental-hvo acres

$240,000.00$24,000.00

$240,000.00$108,000,00$100,000,00

$6,000.00$48,000.00

$116,000.00$48,000.00

$240,000.00

Total revenues' $1,170,000,00

(EXPENDITURES

InsuranceUtilitiesTexas Land Office paymentMID-SHIP ManagementDock maintenanceEquipment repairsDock repairsOther repairsOther

Total expenditures

Excess revenues (expenditures) - To page 1

$40,000.00$6,000.00$3,123.00

$123,600.00$24,000,00$54,000,00$66,000.00$12,000,00$6,000,00

$334.723.00

$835,277.00


Operating BudgetDecember 31, 2020

[REVENUES"

Water RevenuesSewer RevenuesPenalty & interestMaintenance taxInterest

Total revenues

J$1,400,000,00

$510,000,00$20,000,00

$720,000.00$15,000,00

$2,665,000.00

lEXPENDmjRES^

Purchased water . $975,000.00Operator fees $98,000.00Billing expense ; • $4,000.00Repairs & maintenance $250,000.00Clearing & mowing $200,000.00Sludge hauling $12,000.00Garbage $4,500.00Chemicals $30,000.00Laboratory fees $25,000.00Utilities $70,000,00Permits . $2,000.00Insurance $20,000.00TCEQ revenue and regulatory assessment $9,500.00Legal fees . $165,000.00Legal fees - records maintenance . $3,000.00Engineering '$15,000.00Project management $130,000.00Bookkeeping $16,000.00Audit fees $22,000.00Tax consultant $5,000.00Public affairs $180,000.00Economic development $25,000.00Miscellaneous $7,500.00Emergency protection services $300,000,00Wetlands mitigation $41,500.00Condemnation costs $50,000.00

Total expenditures $2,660,000.00 .

Excess revenues (expenditures) - District Operations $5,000.00

Excess revenues (expenditures) - CedarPort Terminal (attached) $674,677.00 .

Total excess revenues (expenditures) . . $.§.Z.?j_?ZZ..'.PP_


Terminal OperationsDecember 31, 2020

IREVENUES^

Container revenue . $240,000.00Breakbulk ' $240,000.00Dockage $108,000.00Security fees $48,000.00Special projects $6,000.00Century Terminal $100,000.00Laydown rental-flve acres $48,000.00Laydown rental-two acres $240,000.00

EXPENDITURES"

Total revenues $1,030,000.00

Insurance $40,000.00Utilities $13,200.00Texas Land Office payment $3,123.00MID-SHIP Management $156,000.00Dock maintenance and repairs $125,000.00Other repairs , $12,000.00

Other .; . $6,000.00

Total expenditures $355,323,00

Excess revenues (expenditures) - To page 1 $674,677.00

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1

CHAMBERS COUNTY, TEXAS

ANNUAL FINANCIAL REPORT

DECEMBER 31, 2018

McCALL GIBSON SWEDLUND BARFOOT PLLCCertified Public Accountants


CHAMBERS COUNTY, TEXAS

ANNUAL FmANCIAL REPORT

DECEMBER 31, 2018

TABLE OF CONTENTS

PAGE

INDEPENDENT AUDITOR'S REPORT 1 -2

MANAGEMENT'S DISCUSSION AND ANALYSIS 3-7

BASIC FINANCIAL STATEMENTS

STATEMENT OF NET POSITION AND GOVERNMENTAL FUNDS BALANCESHEET 8-11

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TOTHE STATEMENT OF NET POSITION 12

STATEMENT OF ACTIVITIES AND GOVERNMENTAL FUNDS STATEMENTOF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 13-14

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OFREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TOTHE STATEMENT OF ACTIVITIES 1 5

NOTES TO THE FINANCIAL STATEMENTS 16-29

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUNDBALANCE-BUDGET AND ACTUAL-GENERAL FUND 3 1

SUPPLEMENTARY FNfFORMATION - REQUIRED BY THE WATER DISTRICTFINANCIAL MANAGEMENT GUIDE

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

SERVICES AND RATES 33-35

GENERAL FUND EXPENDITURES 36

INVESTMENTS 37

TAXES LEVIED AND RECEIVABLE 38-39

LONG-TERM DEBT SERVICE REQUIREMENTS 40-5 0

CHANGES IN LONG-TERM BOND DEBT 51-53

COMPARATIVE SCHEDULE OF REVENUES AND EXPENDITURES GENERALFUND AND DEBT SERVICE FUND - FIVE YEARS 54-57

BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS 5 8-59

McCALL GIBSON SWEDLUND BARFOOTPLLCCertified Public Accountants

13100 Worlham Center DriveSuite 235 9600 Great Hills Trail

Houston, Texas 77065-5610 Suite 150W

(713) 462-0341 . Austin, Texas 78759

Fax (713) 462-2708 (512) 610-2209E-Mail: m£s6@m^s_6£lkcom imffiv.mssbvllc.com

INDEPENDENT AUDITOR'S REPORT

Board of Directors


Chambers County, Texas

We have audited the accompanying financial statements of the governmental activities and each major

fund of Chambers County Improvement District No. 1 (the "District"), as of and for the year ended

December 31, 2018, and the related notes to the financial statements, which collectively comprise theDistrict's basic fmancial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements m

accordance with accounting principles generally accepted in the United States of America; this includes

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 orerror.

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conductedour audit in accordance with auditing standards generally accepted in the United States of America.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the fmancial statements. The procedures selected depend on the auditor's judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.In making those risk assessments, the auditor considers internal control relevant to the entity's preparation

and fair presentation of the financial statements 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 District's

internal control. Accordingly, we express no such opinion. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of significant accounting estimates

made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for

our audit opinions.

Member of

American Institute of Certified Public AccountantsTexas Society of Certified Public Accountants

Board of Directors


Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the governmental activities and each major fund of the District as of

December 31, 2018, and the respective changes in fmancial position for the year then ended in accordance

with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting prmciples generally accepted in the United States of America require that the Management's

Discussion and Analysis and the Schedule of Revenues, Expenditures, and Changes in Fund Balance

Budget and Actual - General Fund be presented to supplement the basic financial statements. Suchinformation, although not a part of the basic financial statements, is required by the GovernmentalAccounting Standards Board, who considers it to be an essential part of financial reporting for placing the

basic financial statements in an appropriate operational, economic, or historical context. We have appliedcertain limited procedures to the required supplementary information in accordance with auditingstandards generally accepted in the United States of America, which consisted of inquiries of

management about the methods of preparing the information and comparing the information forconsistency with management's responses to our inquiries, the basic financial statements, and other

knowledge we obtained during our audit of the basic financial statements. We do not express an opinionor provide any assurance on the information because the limited procedures do not provide us with

sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively

comprise the District's basic financial statements. The supplementary information required by the TexasCommission on Environmental Quality as published in the Water District Financial Management Guide

is presented for purposes of additional analysis and is not a required part of the basic financial statements.Such information is the responsibility of management and was derived from and relates directly to the

underlying accounting and other records used to prepare the basic financial statements. The

supplementary information, excluding that portion marked "Unaudited" on which we express no opinionor provide any assurance, has been subjected to the auditing procedures applied in the audit of the basic

financial statements and certain additional procedures, including comparing and reconciling suchinformation directly to the underlying accounting and other records used to prepare the basic financial

statements or to the basic financial statements themselves, and other additional procedures in accordance

with auditing standards generally accepted in the United States of America. In our opinion, the

information is fairly stated, in all material respects, in relation to the basic fmancial statements as a whole.

•WOM. M^ ^aLJL<6^i PL^

McCall Gibson Swedlund Barfoot PLLCCertified Public AccountantsHouston, Texas

June 12,2019

-2-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31,2018

M'anagement's discussion and analysis of Chambers County Improvement District No. 1's (the"District") financial performance provides an overview of the District's financial activities forthe year ended December 31, 2018. Please read it in conjunction with the District's financial

statements.

USING THIS ANNUAL REPORT

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

GOVERNMENT-WIDE FINANCIAL STATEMENTS

The District's annual report includes two financial statements combining the govemment-widefinancial statements and the fund financial statements. The government-wide financialstatements provide both long-tenn and short-term information about the District's overall status.Financial reporting at this level uses a perspective similar to that found in the private sector withits basis in full accrual accounting and elimination or reclassification of internal activities.

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

The Statement of Activities reports how the District's net position changed during the cun-entfiscal year. All current year revenues and expenses are included regardless of when cash isreceived or paid.

FUND FINANCIAL STATEMENTS

The combined statements also include fund financial statements. A fund is a grouping of relatedaccounts that is used to maintain control over resources that have been segregated for specificactivities or objectives. The District has three governmental fund types. The General Fundaccounts for resources not accounted for in another fund, customer service revenues, operating

expenditures and barge terminal operations. The Debt Service Fund accounts for ad valorem,taxes and financial resources restricted, committed or assigned for servicing bond debt and thecost of assessing and collecting taxes. The Capital Projects Fund accounts for financialresources restricted, committed or assigned for acquisition or construction of facilities andrelated costs.

- 3 -



FUND FINANCIAL STATEMENTS (Continued)

Governmental funds are reported in each of the financial statements. The focus in the fundstatements provides a distinctive view of the District's governmental funds. These statementsreport short-term fiscal accountability focusing on the use of spendable resources and balances ofspendable resources available at the end of the year. They are useful in evaluating annualfinancing requirements of the District and the commitment of spendable resources for the near-term.

Since the govemment-wide focus includes the long-term view, comparisons between these two

perspectives may provide insight into the long-term impact of short-term financing decisions.The adjustments columns, the Reconciliation of the Governmental Funds Balance Sheet to theStatement of Net Position and the Reconciliation of the Governmental Funds Statement ofRevenues, Expenditures and Changes in Fund Balances to the Statement of Activities explain thedifferences between the two presentations and assist in understanding the differences betweenthese two perspectives.

NOTES TO THE FINANCIAL STATEMENTS

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

OTHER INFORMATION

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

GOVERNMENT-WIDE FINANCIAL ANALYSIS

Net position may serve over time as a useful indicator of the District's financial position. In thecase of the District, assets and deferred outflows of resources exceeded liabilities and deferredinflows of resources by $742,251 as of December 31, 2018. A portion of the District's net

position reflects its net investment in capital assets (land, roads, barge terminal and the water,wastewater and drainage facilities less any debt used to acquire those assets that is stilloutstanding). The following is a comparative analysis of government-wide changes in netposition:

-4-



GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)

Current and Other Assets

Capital Assets

Total Assets

Deferred Outflows of Resources

Due to DeveloperBonds Payable

Other Liabilities

Total Liabilities

Deferred Inflows of Resources

Net Position:

Net Investment in Capital AssetsRestricted

Unrestricted

Total Net Position

Summary of Changes

2018

$ 28,673,65461,215,283

$ 89,888,937

$ 1,388,613

$ 2,228,78379,964,166

1,325,288

$ 83,518,237

$ 7,017,062

$ (9,800,811)4,069,5546,473,508

$ 742,251

$$

$

$,

$

in the Statement

2017

27,110,11055,001,243

82,111,353

1,517,600

3,511,54973,941,785

1,209,295

78,662,629

6,330,347

(10,630,599)4,202,9975,063,579

(1,364,023)

of Net Position

ChangePositive

(Negatiye)

$ 1,563,5446,214,040

$ 7,777,584

$ (128,987)

$ 1,282,766(6,022,381)

(115,993)

$ (4,855,608)

$ (686,715)

$ 829,788(133,443)

1,409,929

$ 2,106,274

The following table provides a summary of the District's operations for the years endingDecember 31, 2018 and December 31, 2017.

Revenues:

Property TaxesBarge Terminal Revenues

Charges for ServicesOther Revenues

Total Revenues

Expenses for Services

Change in Net Position

Net Position, Beginning of Year

Net Position, End of Year

Summary of Changes

2018

$ 6,182,338 $1,466,1432,165,991

250,863

$ 10,065,335 $

7.959.061

$ 2,106,274 $

(1,364,023)

$ 742,251 $

in the Statement of Activities

2017

6,099,974896,362

1,595,559129,320

8,721,215

6.574.035

2,147,180

(3,511,203)

(1,364,023)

ChangePositive

(Negative)

$ 82,364569,781570,432121,543

$ 1,344,120

(1,385,026)

$ (40,906)

2,147,180

$ 2,106,274

-5-



FmANCIAL ANALYSIS OF THE DISTRICT'S GOVERNMENTAL FUNDS

The District had combined fund balances of $21,118,260 as of December 31, 2018, an increaseof $965,555 from the prior fiscal year.

The General Fund fund balance increased by $1,415,227, primarily due to barge terminal,service and tax revenues exceeding operating expenditures.

The Debt Service Fund fund balance increased by $65,978, primarily due to the sfcructure of theDistrict's outstanding debt service requirements.

The Capital Projects Fund fund balance decreased by $515,650, primarily due to developerreimbursement costs exceeding bond proceeds received in the current year.

BUDGETARY HIGHLIGHTS

The Board of Directors did not amend the budget during the current fiscal. Actual revenues were$1,602,355 more than budgeted revenues primarily due to higher than anticipated barge terminal,water/wastewater service and investment revenues. Actual expenditures were $512,605 more

than budgeted expenditures primarily due to higher than anticipated professional fees, contractedservices and purchased water service costs, offset by lower than anticipated repairs andmaintenance costs.

CAPITAL ASSETS

Capital assets as of December 31, 2018, total $61,215,283 net of accumulated depreciation.Additions to capital assets included construction and engineering for the following projects:paving of Sutton Road, Cedar Port Parkway, Water Plant Road, and Borusan Road; landacquisition; water line and sanitary sewer line extensions; and USX Channel, Phase 4.

Capital Assets At Year-End, Net of Accumulated Depreciation

Capital Assets Not Being Depreciated:Land and Land Improvements

Construction in ProgressCapital Assets, Net of Accumulated

Depreciation:Roads and Fencing

Barge Terminal

Water System

Wastewater System

Drainage System

Total Net Capital Assets

2018

$ 12,676,871

8,637,9405,489,2515,631,1626,144,400

22,635,659

$ 61,215,283

2017

$ 10,176,8711,169,115

4,565,5915,847,4065,452,0606,311,285

21,478,915

$ 55,001,243

ChangePositive

(Negative)

$ 2,500,000(1,169,115)

4,072,349(358,155)179,102

(166,885)1,156,744

$ 6,214,040

-6-



LONG-TERM DEBT ACTIVITY

As of December 31, 2018, the District had total bond debt payable of $80,315,000. The changesin bond debt of the District during the current fiscal year are summarized as follows:

Bond Debt Payable, January 1, 2018 $ 74,290,000

Add: Bond Sale - Series 2018 Road 9,245,000

Less: Bond Principal Paid ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^3^^^

Bond Debt Payable, December 31,2018 $ 80,315,000

The District's Series 2015, 2016 refunding, 2016A refunding, 2016B refunding, 2017 and 2018Road bonds carry an underlying rating of "A2"by IVloody's. The remainder of the District'sbonds are non-rated. These ratings reflect changes, if any, as of December 31, 2018.

CONTACTmG THE DISTRICT'S MANAGEMENT

This financial report is designed to provide a general overview of the District's finances.Questions concerning any of the information provided in this report or requests for additionalinformation should be addressed to Chambers County Improvement District No. 1, c/o Smith,Murdaugh, Little & Bonham, L.L.P., 2727 Alien Parkway, Suite 1100, Houston, Texas 77019.

-7-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1STATEMENT OF NET POSITION AND

GOVERNMENTAL FUNDS BALANCE SHEETDECEMBER 31, 2018

ASSETSCashInvestmentsCash with Tax Assessor/Collector

Receivables:

Property TaxesService Accounts

Barge Terminal OperationsDue from Other Funds

LandCapital Assets (Net of Accumulated Depreciation)

General Fund

$ 525,9775,559,614

423,946

573,901167,494363,320

77,639

DebtService Fund

$ 706,8654,776,546

5,710,110

121,205

TOTAL ASSETS $ 7,691,891 $ 11,314,726

DEFERRED OUTFLOWS OF RESOURCESDeferred Charges on Refunding Bonds $^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ $ -0-

TOTAL ASSETS AND DEFERRED OUTFLOWSOF RESOURCES $ 7,691,891 $ 11,314,726

$

$

$

7

7

,691,

-0-

,691,

891

891

The accompanying notes to the financial

statements are an integral part of this report.

CapitalProjects Fund

$ 2,134,1177,731,764

$ 9,865,881

$ -0-

$ 9,865,881

Total

$ 3,366,95918,067,924

423,946

6,284,011167,494363,320198,844

$ 28,872,498

$ -0-

$ 28,872,498

Adjustments

$

(198,844)12,676,87148,538,412

$ 61,016,439

$ 1,388,613

$ 62,405,052

Statement ofNet Position

$ 3,366,95918,067,924

423,946

6,284,011167,494363,320

12,676,87148,538,412

$ 89,888,937

$ 1,388,613

$ 91,277,550



- 9 -

CHAMBERS COUNTY IMPROVEMENT DISTMCT NO. 1STATEMENT OF NET POSITION AND

GOVERNMENTAL FUNDS BALANCE SHEETDECEMBER 31, 2018

LIABILITIESAccounts Payable

Accrued Interest Payable

Due to DevelopersDue to Other Funds

Security DepositsAccrued Interest at Time of SaleLong-Term Liabilities:

Bonds Payable, Due Within One Year

Bonds Payable, Due After One Year

TOTAL LIABILITIES

General Fund

$ 181,043

121,205278,220

DebtService Fund

$

12,283

580,468 $ 12,283

DEFERRED mFLOWS OF RESOURCESProperty Taxes

FUND BALANCESRestricted for Authorized ConstructionRestricted for Debt Service

Unassigned

TOTAL FUND BALANCES

646,614 $ 6,437,234

6,464,8094,865,209

$ 6,464,809 $ 4,865,209

TOTAL LIABILITIES, DEFERRED INFLOWSOF RESOURCES AND FUND BALANCES $ 7,691,891 $ 11,314,726

NET POSITIONNet Investment in Capital AssetsRestricted for Debt Service

Unrestricted

TOTAL NET POSITION

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

- 10-


77,639

$ 77,639

$ -0-

$

$

$

Total

181,043

198,844278,220

12,283

670,390

7,083,848

Adjustments

$866,025

2,228,783(198,844)

(12,283)

4,175,00075,789,166

$ 82,847,847

$ (66,786)

Statement of

Net Position

$ 181,043866,025

2,228,783

278,220

4,175,00075,789,166

$ 83,518,237

$ 7,017,062

$ 9,788,242 $ 9,788,242 $ (9,788,242) $4,865,209 (4,865,209)6,464,809 (6,464,809)

$ 9,788,242 $ 21,118,260 $ (21,118,260) $ -0-

$ 9,865,881 $ 28,872,498

$ (9,800,811) $ (9,800,811)4,069,554 4,069,554

6,473,508 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ M^^

$ 742,251 $ 742,251



-11 -

CHAMBERS COUNTY IMPROVEMENT DISTMCT NO. 1RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITIONDECEMBER 31, 2018

Total Fund Balances - Governmental Funds $ 21,118,260

Amounts reported for governmental activities in the Statement of Net Position are

different because:

Capital assets used in governmental activities are not current financial resources and,

therefore, are not reported as assets in the governmental funds. 61,215,283

Interest paid in advance as part of a refunding bond sale is recorded as a deferred

outflow in the governmental activities and systematically charged to interest expense

over the remaining life of the new debt or the old debt, whichever is shorter. 1,388,613

Deferred inflows of resources related to property tax revenues on delinquent taxes

for the 2017 and prior tax levies became part of recognized revenue in the

governmental activities of the District. 66,786

Certain liabilities are not due and payable in the current period and, therefore, are not

reported as liabilities in the governmental funds. These liabilities at year end consist

of:

Due to Developer $ (2,228,783)Accrued Interest (853,742)Bonds Payable (79,964,166) (83,046,691)

Total Net Position - Governmental Activities $ 742,251



-12-

THIS PAGE INTENTIONALLY LEFT BLANK

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1STATEMENT OF ACTWITIES AND GOVERNMENTAL FUNDS STATEMENT OF

REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCESFOR THE YEAR ENDED DECEMBER 31,2018

General FundREVENUES

Property TaxesBarge TerminalWater ServiceWastewater ServicePenalty and InterestTap Connection and Inspection FeesMiscellaneous Revenues

TOTAL REVENUESEXPENDITURES/EXPENSES

Service Operations:Professional FeesContracted ServicesPurchased Water ServiceUtilitiesRepairs and MaintenanceDepreciationOther

Capital OutlayDebt Service:

Bond PrincipalBond Interest

Bond Issuance Costs

TOTAL EXPENDITURES/EXPENSES

EXCESS (DEFICIENCY) OF REVENUES OVEREXPENDITURES/EXPENSES

OTHER FINANCESTG SOURCES (USES)Proceeds from Issuance ofLong-Term Debt

NET CHANGE m FUND BALANCES

CHANGE IN NET POSITION

FUND BALANCES/NET POSITION -JANUARY 1, 2018

FUND BALANCES/NET POSITION -

DECEMBER 31, 2018

386,783756,317

1,015,02769,715

444,970

191,416

1,415,227

-0-

1,415,227

5,049,582

DebtService Fund

$ 569,582 $1,466,1431,402,863

405,291180,792177,04577,739

$ 4,279,455 $

5,689,026

61,758

5,750,784

54,069

648

3,220,0002,410,089

2,864,228 $ 5,684,806

65,978

-0-

65,978

4,799,231

$ 6,464,809 $ 4,865,209



- 13-


$ $

111,366

$ 111,366 $

$ $

4419,297,096

574,479

$ 9,872,016 $

$ (9,760,650) $

$ 9,245,000 $

$ (515,650) $

10,303,892

$ 9,788,242 $

Total

; 6,258,6081,466,1431,402,863

405,291180,792177,045250,863

; 10,141,605

; 386,783810,386

1,015,02769,715

444,970

192,5059,297,096

3,220,0002,410,089

574,479

; 18,421,050

; (8,279,445)

; 9,245,000

; 965,555

20,152,705

; 21,118,260

Adjustments

$ (76,270)

$_^^^ (^^

$

218,7491,581,541

(9,297,096)

(3,220,000)254,817

$ (10,461,989)

$ 10,385,719

$ (9,245,000)

$ (965,555)

2,106,274

_(21,516,728)

$ (20,376,009)

Statement ofActivities

$ 6,182,3381,466,1431,402,863

405,291180,792177,045250,863

$ 10,065,335

$ 386,783810,386

1,015,02769,715

663,7191,581,541

192,505

2,664,906574,479

$ 7,959,061

$ 2,106,274

$ -0-

$2,106,274

(1,364,023)

$ 742,251



- 14-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF

REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCESTO THE STATEMENT OF ACTIVITIES


Net Change in Fund Balances - Govermnental Funds $ 965,555

Amounts reported for governmental activities in the Statement of Activities are

different because:

Governmental funds report tax revenues when collected. However, in the Statement

of Activities, revenue is recorded in the accounting period for which the taxes are

levied. (76,270)

Governmental funds do not account for depreciation. However, in the Statement of

Net Position, capital assets are depreciated and depreciation expense is recorded in

the Statement of Activities. (1,581,541)

Governmental funds report capital expenditures as expenditures in the period

purchased. However, in the Statement of Net Position, capital assets are increased

by new purchases and the Statement of Activities is not affected. 9,078,347

Governmental funds report bond principal payments as expenditures. However, in

the Statement of Net Position, bond principal payments are reported as decreases in

long-term liabilities. 3,220,000

Governmental funds report interest expenditures on long-term debt as expenditures

in the year paid. However, in the Statement of Net Position, interest is accrued on

the long-term debt through fiscal year-end. (254,817)

Governmental funds report bond proceeds as other financing sources. Issued bonds

increase long-term liabilities in the Statement of Net Position. (9,245,000)

Change in Net Position - Governmental Activities $ 2,1 06,274

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

- 15-

CHAMBERS COUNTY IMPROVEMENT DISTMCT NO. 1NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2018

NOTE 1. CREATION OF DISTRICT

Chambers County Improvement District No. 1 (the "District"), a political subdivision of theState of Texas located in Chambers County, was created effective August 30, 1993, by specialact of the 73rd Texas Legislature. The District has the powers, among others, of municipalmanagement districts, road utility districts, navigation districts, rural rail transportation districtsand municipal utility districts created pursuant to Article III, Section 52, Article III, Section 52-aand Article XVI, Section 59 of the Texas Constitution. Pursuant to Chapter 566, Acts of the 73rdLegislature, Regular Session, 1993, as amended, the District can conduct a broad range offunctions related to diversification of the economy of the State of Texas, promotion,development and expansion of employment, commerce, economic development and the publicwelfare, promotion of the control, treatment, storage and distribution of water, protecting,

presei-ving and restoring the sanitary condition of water, promoting the transportation ofagricultural, industrial and commercial products, promoting the health, safety and generalwelfare of property owners, residents, employers and employees in the District, promoting theimprovement of rivers, bays, creeks, sti-eams and canals to permit or to aid navigation and

commerce and promoting the construction, maintenance and operations of streets, roads,

highways, turnpikes and railroads in the area of the District. The Board ofDkectors held its firstmeeting on September 21, 1993, and the District's first bond issue was on January 20, 2005.

NOTE 2. SIGNIFICANT ACCOUNTmG POLICIES

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

Management Guide published by the Commission.

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

- 16-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2018

NOTE 2. SIGNIFICANT ACCOUNTmG POLICIES (Continued)

Financial Statement Presentation

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

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

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

• Restricted Net Position - This component of net position consists of external constraintsplaced on the use of assets imposed by creditors (such as through debt covenants),grantors, contributors, or laws or regulation of other governments or constraints imposed

by law through constitutional provisions or enabling legislation.

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

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

Government-Wide Financial Statements

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

The Statement of Net Position is reported by adjusting the governmental fund types to report onthe full accrual basis, economic resource basis, which recognizes all long-term assets and

receivables as well as long-term debt and obligations. Any amounts recorded due to and duefrom other funds are eliminated in the Statement of Net Position.

- 17-


DECEMBER 31, 2018


Government-Wide Financial Statements (Continued)

The Statement of Activities is reported by adjusting the governmental fund types to report onlyitems related to current year revenues and expenditures. Items such as capital outlay are

allocated over their estimated useful lives as depreciation expense. Internal activities betweengovernmental funds, if any, are eliminated by adjustment to obtain net total revenue and expensein the government-wide Statement of Activities.

Fund Financial Statements

As discussed above, the District's fund financial statements are combined with the govemment-wide statements. The fund statements include a Balance Sheet and Statement of Revenues,

Expenditures and Changes in Fund Balances.

GoYernmental Funds

The District has three governmental funds and considers each to be a major fund.

General Fund - To account for resources not required to be accounted for in another fund,

customer service revenues, operating expenditures and barge terminal operations.

Debt Service Fund - to account for ad valorem taxes and financial resources restricted,

committed or assigned for servicing bond debt and the cost of assessing and collecting taxes.

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

Basis of Accounting

The District uses the modified accrual basis of accounting for governmental fund types. Themodified accmal basis of accounting recognizes revenues when both "measurable and available."Measurable means the amount can be determined. Available means collectable within thecurrent period or soon enough thereafter to pay current liabilities. The District considers revenuereported in governmental funds to be available if they are collectable within 60 days after yearend. Also, under the modified accrual basis of accounting, expenditures are recorded when therelated fund liability is incurred, except for principal and interest on long-term debt, which arerecognized as expenditures when payment is due.

- 18-

CHAMBERS COUNTY IMPROVEMENT DISTMCT NO. 1NOTES TO THE FmANCIAL STATEMENTS

DECEMBER 31, 2018

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis of Accounting (Continued)

Property taxes considered available by the District and included in revenue include the 2017 taxlevy collections during the period October 1, 2017, to December 31, 2018, and taxes collectedfrom January 1, 2018, to December 31, 2018, for the 2016 and prior tax levies. The 2018 taxlevy has been fully deferred to meet the operating costs of the 2019 fiscal year.

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

Capital Assets

Capital assets, which include roads, barge terminal, property, plant, equipment, andinfrastructure assets, are reported in the govemment-wide Statement of Net Position. All capitalassets are valued at historical cost or estimated historical cost if actual historical cost is notavailable. Donated assets are valued at their fair market value on the date donated. Repairs andmaintenance are recorded as expenditures in the governmental fund incurred and as an expense

in the govemment-wide Statement of Activities. Capital asset additions, improvements andpreservation costs that extend the life of an asset are capitalized and depreciated over theestimated useful life of the asset. Interest costs, including developer interest, engineering feesand certain other costs are capitalized as part of the asset.

Assets are capitalized, including infrastructure assets, if they have an original cost greater than$5,000 and a useful life over two years. Depreciation is calculated on each class of depreciableproperty using the straight-line method of depreciation. Estimated useful lives are as follows:

Years

Buildings 40Roads 10-50

Barge Terminal 25Water System 10-45Wastewater System 10-45Drainage System 10-45All Other Equipment 3-20

- 19-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1NOTES TO THE FmANCIAL STATEMENTS

DECEMBER 31, 2018

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Budgeting

In compliance with governmental accounting principles, the Board of Directors annually adoptsan unappropriated budget for the General Fund. The budget was not amended during the currentfiscal year.

Pensions

A pension plan has not been established. The District does not have employees, except that theInternal Revenue Service has detemiined that directors are considered "employees" for federal

payroll tax purposes only.

Mfeasurement Focus

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

Governmental fund types are accounted for on a spending or financial flow measurement focus.Accordingly, only current assets and current liabilities are included on the Balance Sheet, and thereported fund balances provide an indication of available spendable or appropriable resources.Operating statements of governmental fund types report increases and decreases in availablespendable resources. The District classifies the fund balances in governmental funds using thefollowing hierarchy:

Nonspendable: amounts that cannot be spent either because they are in nonspendable foi-m orbecause they are legally or contractually required to be maintained intact. The District does nothave any nonspendable fund balances.

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

Committed: amounts that can be spent only for purposes determined by a formal action of theBoard of Directors. The Board is the highest level of decision-making authority for the District.This .action must be made no later than the end of the fiscal year. Commitments may beestablished, modified, or rescinded only through ordinances or resolutions approved by theBoard. The District does not have any committed fund balances.

-20-


DECEMBER 31, 2018


Measurement Focus (Continued)

Assigned: amounts that do not meet the criteria to be classified as restricted or committed, butthat are intended to be used for specific purposes. The District has not adopted a formal policyregarding the assignment of fund balances and does not have any assigned fund balances.

Unassigned: all other spendable amounts in the General Fund.

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

Accounting Estimates

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

NOTE 3. LONG-TERM DEBT

The following is a summary of transactions regarding bonds payable for the year endedDecember 31,2018:

Bonds PayableUnamortized Premiums

Unamortized Discounts

Bonds Payable, Net

January 1,2018

$ 74,290,000657,297

(1,005,512)

$ 73,941,785

Additions

$ 9,245,000

$ 9,245,000

Retirements

$ 3,220,00047,537

(44,918)$ 3,222,619

Amount Due Within One Year

Amount Due After One Year

Bonds Payable, Net

December 31,2018

$

$

$

$

80,315,000609,760

(960,594)79,964,166

4,175,00075,789,166

79,964,166

-21-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1NOTES TO THE FmANClAL STATEMENTS

DECEMBER 31, 2018

NOTE 3. LONG-TERM DEBT (Continued)

Series 2012 Series 2013 Series 2014

Aiwunts^Outstandin^- $4,160,000 $5,495,000 $8,880,000December 31,2018 " •'""'"-" ^^,.„,-.-- ^ „,„„„,.

Interest Rates 2.50% - 4.20% 3.25%-5.125% 2.50%-4.50%

Maturity Dates - Serially September 1, September 1, September 1,Beginning/Ending .2019/2037 2019/2038 2019/2039

Interest Payment Dates March I/ March I/ March I/September 1 September 1 September 1

Callable Dates September 1,2021 * September 1, 2020* September 1, 2021 *

* Or on any date thereafter, at the option of the District, in whole or in part, at par plus accruedinterest to the date fixed for redemption. Series 2012 term bonds maturing on September 12027, September 1, 2029, September 1, 2032, and September I 2037, are subject to mandatoryredemption beginning September 1, 2026, September 1, 2028, September 1, 2030, andSeptember 1, 2033, respectively. Series 2013 term bonds maturing in September 1, 2030,September 1, 2032, September 1, 2035, and September 1, 2038, are subject to mandatoryredemption beginning September 1, 2029, September 1, 2031, September 1, 2033, andSeptember 1, 2036, respectively. Series 2014 term bonds maturing in September 1, 2035 andSeptember 1, 2039, are subject to mandatory redemption beginning September 1, 2034, andSeptember 1, 2036, respectively.

Refunding RefundingSeries 2014A Series 2015 Series 2016

AiTOums Outstanding- $6,335,000 $10,570,000 $2,590,000.,

Interest Rates 3.45% 2.00% - 4.00% 2.00% - 4.00%

Maturity Dates - Serially September 1, September 1, September 1,Beginning/Ending 2019/2029 2019/2040 2019/2030

Interest Payment Dates March I/ March I/ March I/September 1 September 1 September 1

Callable Dates September 1, 2024** September 1, 2023** September 1, 2025**

** Or on any date thereafter, at the option of the District, in whole or in part, at par plus accruedinterest to the date fixed for redemption. Series 2015 term bonds maturing on September 1,2035, and September 1, 2040, are subject to mandatory redemption on September 1, 2034, andSeptember 1, 2036, respectively.

-22-


DECEMBER 31, 2018


Amounts OutstandingDecember 31,2018

Interest Rates

Maturity Dates - SeriallyBeginning/Ending

Interest Payment Dates

Callable Dates

RefundingSeries 2016A

$ 13,585,000

2.00% - 4.00%

September 1,2019/2032

March I/September 1

September 1,2025***

RefundingSeries 2016B

$ 1,240,000

2.20%-3.00%


March I/September 1

Non-callable

Series 2017

$ 18,215,000

2.00% - 4.00%


March I/September 1

September 1, 2024***

Amounts Outstanding -

December 31,2018

Interest Rates

Maturity Dates - SeriallyBeginning/Ending

Interest Payment Dates

Callable Dates

Series 2018 Road

$ 9,245,000

3.00%-4.25%


March I/September 1

September 1, 2024***

*** Or on any date thereafter, at the option of the District, in whole or in part, at par plus accruedinterest to the date fixed for redemption. Series 2018 term bonds maturing on September 1,2033, are subject to mandatory redemption on September 1, 2032.

As of December 31, 2018, the debt service requirements on the bonds outstanding were asfollows:

Fiscal Year

20192020202120222023

2024-20282029-20332034-20382039-2042

Principal

$ 4,175,000 !3,685,0003,765,0003,850,0003,960,000

21,030,00018,930,00014,885,0006,035,000

$ 80,315,000 ;

Interest

S 2,718,072 32,686,2552,599,1512,506,8432,410,221

10,173,9966,391,5273,094,329

474,225

? 33,054,619 3

Total

i 6,893,0726,371,2556,364,1516,356,8436,370,221

31,203,99625,321,52717,979,3296,509,225

5 113,369,619

-23-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1NOTES TO THE FmANCIAL STATEMENTS

DECEMBER 31, 2018


As of December 31, 2018, the District has authorized but unissued bonds in the amount of$154,575,000. The bonds are payable from the proceeds of an ad valorem tax levied upon allproperty subject to taxation within the District, without limitation as to rate or amount andcertain series of bonds are further payable from and secured by a lien on and pledge of the netrevenues to be received from the operation of District facilities, as defined in the bond orders.

During the year ended December 31, 2018, the District levied an ad valorem debt service tax rateof $0.60 (consisting of $0.46 for utilities and $0.14 for roads) per $100 of assessed valuation,which resulted in a tax levy of $6,379,147 on the adjusted taxable valuation of $1,063,189,814for the 2018 tax year. The bond orders require the District to levy and collect an ad valorem debtservice tax sufficient to pay interest and principal on bonds when due and the cost of assessingand collecting taxes. See Note 7 for the maintenance tax levy.

NOTE 4. SIGNIFICANT BOND ORDER AND LEGAL REQUIREMENTS

The District has covenanted that it will take all necessary steps to comply with the requirementthat rebatable arbitrage earnings on the investment of the gross proceeds of the Bonds be rebatedto the federal government, within the meaning of Section 148(f) of the Internal Revenue Code.The minimum requirement for determination of the rebatable amount is on the five-year

anniversary of each issue.

The bond orders state that the District is required to provide to the state information depositorycontinuing disclosure of annual financial information and operating data with respect to theDistrict. The information is of the general type included in the annual audit report and must befiled within six months after the end of each fiscal year of the District.

NOTE 5. DEPOSITS AND INVESTMENTS

Deposits

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

-24-


DECEMBER 31, 2018

NOTES. DEPOSITS AND INVESTMENTS (Continued)

Deposits (Continued)

Texas statutes require that any cash balance in any fund shall, to the extent not insured by theFederal Deposit Insurance Corporation or its successor, be continuously secured by a validpledge to the District of securities eligible under the laws of Texas to secure the funds of theDistrict, having an aggregate market value, including accrued interest, at all times equal to theuninsured cash balance in the fund to which such securities are pledged. At fiscal year-end, thecarrying amount of the District's deposits was $3,366,959 and the bank balance was $3,357,142.The District was not exposed to custodial credit risk at year-end.

The carrying values of the deposits are included in the Governmental Funds Balance Sheet andthe Statement of Net Position at December 31, 2018, as listed below:

Cash

GENERAL FUND

DEBT SERVICE FUNDCAPITAL PROJECTS FUND

TOTAL DEPOSITS

Investments

Under Texas law, the District is required to invest its funds under written investment policies thatprimarily emphasize safety of principal and liquidity and that address investment diversification,yield, maturity, and the quality and capability of investment management, and all Dish-ict fundsmust be invested in accordance with the following investment objectives: understanding thesuitability of the investment to the District's financial requh-ements, first; preservation and safetyof principal, second; liquidity, third; marketability of the investments if the need arises toliquidate the investment before maturity, fourth; diversification of the investment portfolio, fifth;and yield, sixth. The District's investments must be made "with judgment and care, under

prevailing circumstances, that a person of prudence, discretion, and intelligence would exercisein the management of the person's own affairs, not for speculation, but for investment,

considering the probable safety of capital and the probable income to be derived." No personmay invest District funds without express written authority from the Board of Directors.

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

-25-

$

i_

2

3

525

706,134

,366

,977

,865

,117

,959

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1NOTES TO THE FWANCIAL STATEMENTS

DECEMBER 31, 2018

NOTES. DEPOSITS AND INVESTMENTS (Continued)

Investments (Continued)

The District invests in TexPool, an external investment pool that is not SEC-registered. TheState Comptroller of Public Accounts of the State of Texas has oversight of the pool. FederatedInvestors, Inc. manages the daily operations of the pool under a contract with the Comptroller.TexPool measures all its portfolio assets at amortized cost. As a result, the District alsomeasures its investments in TexPool at amortized cost for financial reporting purposes. Thereare no limitations or restrictions on withdrawals from TexPool.

As of December 31, 2018, the District had the following investments and maturities:

Fund and

Investment Type

GENERAL FUNDTexPool

DEBT SERVICE FUNDTexPool

CAPITAL PROJECTS FUNDTexPool

TOTAL INVESTMENTS

Fair Value

$ 5,559,614

4,776,546

7,731,764

$ 18,067,924

Maturities ofLess Than

1 Year

$ 5,559,614

4,776,546

7,731,764

$ 18,067,924

Credit risk is the risk that the issuer or other counterparty to an investment will not fulfill itsobligations. At December 31, 2018, the District's investment in TexPool was rated AAAm byStandard and Poor's.

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of aninvesbnent. The District considers the investment in TexPool to have a maturity of less than oneyear due to the fact the share position can usually be redeemed each day at the discretion of theDistrict unless there has been a significant change in value.

Restrictions

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

-26-

CHAMBERS COUNTY IMPROVEMENT DISTMCT NO. 1NOTES TO THE FmANCIAL STATEMENTS

DECEMBER 31, 2018

NOTE 6. CAPITAL ASSETS

Capital asset activity for the year ended December 31, 2018:

Capital Assets Not Being DepreciatedLand and Land Improvements

Construction in Progress

Total Capital Assets Not BeingDepreciated

Capital Assets Subjectto DepreciationRoads and FencingBarge TerminalWater SystemWastewater System

Drainage System

Total Capital AssetsSubject to Depreciation

Accumulated DepreciationRoads and FencingBarge TerminalWater SystemWastewater SystemDrainage System

Total Accumulated Depreciation

Total Depreciable Capital Assets, Net ofAccumulated Depreciation

Total Capital Assets, Net of AccumulatedDepreciation

January 1,

2018

$ 10,176,8711,169,115

$ 11,345,986

$ 5,520,3128,960,4376,370,1787,772,634

22,599,220

$ 51,222,781

$ 954,7213,113,031

918,1181,461,3491,120,305

$ 7,567,524

$ 43,655,257

$ 55,001,243

Increases

$ 2,500,0007,926,417

$ 10,426,417

$ 4,334,069

357,76027,528

1,745,339

$ 6,464,696

$ 261,720358,155178,658194,413588,595

$ 1,581,541

$ 4,883,155

$ 15,309,572

Decreases

9,095,532

$ 9,095,532

$

$

$ -0-

$ -0-

$ 9,095,532

December 31,

2018

$ 12,676,871

$ 12,676,871

$ 9,854,3818,960,4376,727,9387,800,162

24,344,559

$ 57,687,477

$ 1,216,4413,471,1861,096,7761,655,7621,708,900

$ 9,l4-9,06^

$ 48,538,412

$ 61,215,283

NOTE 7. MAWTENANCE TAX

On February 7, 2004, the voters of the District approved the levy and collection of a maintenancetax in an unlimited amount on the assessed valuation of taxable property within the District.During the current year, the District levied an ad valorem maintenance tax rate of $0.06 per $100of assessed valuation, which resulted in a tax levy of $637,915 on the adjusted taxable valuationof $1,063,189,814 for the 2018 tax year. The levy of 2018 taxes are for the purpose of meetingthe District's cost of operations in the 2019 fiscal year, therefore, tax revenues have beendeferred to the extent of the entire 2018 tax levy.

-27-


DECEMBER 31, 2018

NOTE 8. UNREIMBURSED COSTS

The District has executed financing agreements with developers within the District. Theagreement calls for the developers to make certain payments on behalf of the District foroperating costs or costs associated with the construction of certain facilities. The Districtanticipates reimbursing the developer fi-om proceeds of future bond sales or using other lawfullyavailable funds.

NOTE 9. RISK MANAGEMENT

The District is exposed to various risks of loss related to torts, theft of, damage to and destructionof assets, errors and omissions and natural disasters for which the District carries commercialinsurance. There have been no significant reductions in coverage and no settlements have

exceeded coverage in the past three years.

NOTE 10. EMERGENCY PROTECTION SERVICES AGREEMENT

On August 1, 2005, the District entered into an Agreement for Emergency Protection Services(Agreement) with the City of Baytown (the "City") whereby the City will provide firefightingsupport and backup protection to the District's territory located within the City. The initial termof the Agreement was for six years with an option to renew for an additional four-year term uponagreement of both the District and the City. The District renewed the agreement with the Cityfor an additional four-year term on May 11, 2011. On October 29, 2015, the District and theCity executed a new Agreement for a six-year term. During the current fiscal year, the Districtrecorded expenditares of $255,000 in accordance with the terms of this Agreement.

NOTE 11. INTERFUND PAYABLES AND RECEIVABLES

The General Fund recorded a payable to the Debt Service Fund in the amount of $121,205 fordebt service tax collections. The Capital Projects Fund recorded a payable to the General Fundin the amount of $77,639 for bond issuance costs and capital outlay paid by the General Fund.

NOTE 12. WATER SUPPLY AGREEMENT

On May 23, 2007, the District entered into a Water Supply Agreement with the City ofBaytown,Texas. In accordance with the agreement, the City agreed to provide water to the District toservice the area within its boundaries. The total treated water requirement shall not exceed500,000 gallons per day average daily flow. The District will own, operate and maintain at itssole cost and expense, the District's water system.

The District pays the City in monthly installments a service charge equal to the City's minimumcharge and additional charges, if any, applied to the actual quantity of treated water delivered tothe District during the month in question.

-28-


DECEMBER 31, 2018

NOTE 12. WATER SUPPLY AGREEMENT (Continued)

The charge shall be calculated on the basis of the metered water use for each user connected tothe District's system, consistent with the provisions for such calculation found in the City'swater service rate ordinance, which may be amended from time to time. During the currentfiscal year, the District incurred costs of $1,015,027 in relation to this agreement.

In addition, the District pays the City impact fees, which are charged against new developmentwith the District's service area in order to generate revenue for funding or recouping the cost ofcapital improvements or facility expansions necessitated by and attributable to new development.The impact fees may be adjusted from time to time by the City and the District is required to paythe rate in effect at the time payment is due.

This agreement is in force and effect from the date of execution by the City for a term of 25years; provided that (i) the City's contract with the Baytown Area Water Authority (the"Authority") for the purchase of treated water in sufficient quantities to supply the District underthe terms and conditions in effect at the time of the execution of this agreement remainunchanged; and (ii) the Authority's contract with the City of Houston for the purchase of rawwater in sufficient quantities to supply the Authority under the terms and conditions in effect atthe time of the execution of this agreement remain unchanged. Should the City's contract withthe Authority or the Authority's contract with the City of Houston be terminated'for any reasonor should the City become legally unable to supply the District, then this agreement willtenninate automatically at the time of such termination or inability.

NOTE 13. INTERLOCAL AGREEMENT FOR HEAVY HAUL ROADMAINTENANCE

On December 28, 2010, the District entered into an Interlocal Agreement for Heavy Haul RoadMaintenance with Chambers County, Texas (the "County"). The County has constructed WestGreenwood, South Greenwood and Cedar Port Boulevard which in combination form a trafficroute, commonly referred to as "Heavy Haul Road", from FM 1405 to Cedar Port BargeTerminal. Per the agreement, the County will waive the requirement for an overweight vehiclepermit and the corresponding fee and maintenance bond for any vehicle operator using theHeavy Haul Road in a lawful manner. In return, the District has agreed to share anymaintenance and repair costs with one half of such costs to be paid by the District and one half tobe paid by the County.

NOTE 14. BOND SALE

On November 14, 2018, the District sold its $9,245,000 Series 2018 Unlimited Tax Road Bonds.The proceeds were used to reimburse the developer for a portion of the construction,engineering, survey and/or testing costs related to Cedar Port Parkway, Water Plant Road,Deepwater Expansion, Borusan Road, Bawa Road, Grand Parkway State Highway 99 and FM1405 as well as the Sutton Road land acquisition. Additional proceeds were also used to pay forcertain costs associated with the issuance of the bonds.

-29-


REQUIRED SUPPLEMENTARY mFORMATION

DECEMBER 31, 2018

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUNDFOR THE YEAR ENDED DECEMBER 31,2018

REVENUESProperty Taxes

Barge TerminalWater ServiceWastewater ServicePenalty and Interest

Tap Connection and Inspection Fees

Miscellaneous Revenues

TOTAL REVENUES

EXPENDITURESServices Operations:

Professional FeesContracted ServicesPurchased Water ServiceUtilitiesRepairs and Maintenance

Other

TOTAL EXPENDITURES

NET CHANGE IN FUND BALANCE

FUND BALANCE - JANUARY 1, 2018

FUND BALANCE - DECEMBER 31, 2018

Original andFinalBudget

$ 590,000912,600880,000275,000

7,500

12,000

$ 2,677,100

$ 240,000633,000750,000

51,000531,000146,623

$ 2,351,623

$ 325,477

5,049,582

$ 5,375,059

$

$

$

$

$

$

Actual

569,5821,466,1431,402,863

405,291180,792177,04577,739

4,279,455

386,783756,317

1,015,02769,715

444,970191,416

2,864,228

1,415,227

5,049,582

6,464,809

VariancePositive

(NegatiYe}

$ (20,418)553,543522,863130,291173,292177,04565,739

$ 1,602,355

$ (146,783)(123,317)(265,027)(18,715)86,030

(44,793)

$ (512,605)

$ 1,089,750

$ 1,089,750

See accompanying independent auditor's report.

-31-


SUPPLEMENTARY INFORMATION - REQUIRED BY THE

WATER DISTRICT FINANCIAL MANAGEMENT GUIDE

DECEMBER 31, 2018

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1SERVICES AND RATES


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

xx

x

Retail WaterRetail Wastewater

Parks/Recreation X

Solid Waste/GarbageParticipates in joint venture, regional

emergency interconnect)

Other (specify): Barge terminal

Wholesale Water •.

Wholesale Wastewater

Fire Protection

Flood Controlsystem and/or wastewater service

Drainage

IrrigationSecurity

Roads

(other than

2. RETAIL SERVICE PROVIDERS

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

Based on the rate order effective February 8, 2017.

Flat Rate per 1,000Minimum Minimum Rate Gallons overCharge Usage Y/N Minimum Use Usage Levels

WATER: $15.06 -0- N $8.42 -0-and up

WASTEWATER: $15.06 -0- N $8.48 -0-and up

SURCHARGE: None

District employs winter averaging for wastewater usage? _ XYes No

Total monthly charges per 10,000 gallons usage: Water: $ 99.26 Wastewater: $ 99.86


-33-



2. RETAIL SERVICE PROVIDERS (Continued)

a. WATER AND WASTEWATER RETAIL CONNECTIONS:

IVIeter Size

Unmetered

<3/4"

1"

11/2"

2"

3"

4"

6"

8"

10"

Total Water Connections

Total Wastewater Connections

TotalConnections

_7

_7

-14

20

_6

_!

_5

_7

_69

A3

Active

Connections

J_

_6

11_20

_6

3.

_5

J_

_6Z

-43

ESFCFactor

x 1.0

x 1.0

x 2.5

x 5.0

x 8.0

x 15.0

x 25.0

x 50.0

x 80.0

xll5.0

x 1.0

ActiveESFCs

_7

J5_65

160

90

_75

250

560

1.222

Jl

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

Gallons billed to customers: 145,445,000 Water Accountability Ratio: 82%

Gallons purchased: 177,672,000 From: City of Baytown, Texas


-34-



4. STANDBY FEES (authorized only under TWO Section 49.231):

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

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

5. LOCATION OF DISTRICT:

Is the District located entirely within one county?

Yes X No

County in which District is located:

Chambers County, Texas

Is the District located within a city?

Entirely _ Partly _ Not at all X

Is the District located within a city's extraten'itorial jurisdiction (ETJ)?

Entirely X Partly Not at all

ETJ in which District is located:

City ofBaytown, Texas

Are Board Members appointed by an office outside the District?

Yes X No


-35-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1GENERAL FUND EXPENDITURES


PROFESSIONAL FEES:AuditingEngineering

Legal

TOTAL PROFESSIONAL FEES

PURCHASED WATER SERVICE

CONTRACTED SERVICES:BookkeepingOperations and BillingProject Management

Public Affairs Consultant

TOTAL CONTRACTED SERVICES

UTILITIES:ElectricityTelephone

TOTAL UTILITIES

REPAIRS AND MAD-JTENANCE

ADMINISTRATIVE EXPENDITURES:Insurance

Office Supplies and PostageTravel and MeetingsDues and Other

TOTAL ADMINISTRATIVE EXPENDITURES

TAP CONNECTIONS

SOLID WASTE DISPOSAL

FIRE FIGHTING

OTHER EXPENDITURES:ChemicalsLaboratory FeesPermit Fees

Inspection Fees

Sludge Hauling

TOTAL OTHER EXPENDITURES

TOTAL EXPENDITURES

19,500194,456172,827

386,783

$ 1,015,027

14,43480,238

222,900180,062

$

$

$

$

497,634

67,9261,789

69,715

444,970

53,2942,4567,570

36,158

$

$

$

99,478

12,574

3,683

255,000

19,82830,794

1,8535,197

21,692

79,364

$ 2,864,228


-36-

CHAMBERS COUNTY IMPROVEMENT DISTMCT NO. 1INVESTMENTS

DECEMBER 31, 2018

Funds

GENERALFUNDTexPool

TexPool

TOTAL GENERAL FUND

DEBT SERVICE FUNDTexPool

TexPool

TOTAL DEBT SERVICE FUND

CAPITAL PROJECTS FUNDTexPool

TexPool

Identification or

Certificate Number

XXXX0001XXXX0006

XXXX0003XXXX0005

XXXX0002XXXX0004

TOTAL CAPITAL PROJECTS FUND

TOTAL - ALL FUNDS

Interest

Rate

Varies

Varies

VariesVaries

Varies

Varies

MaturityDate

DailyDaily

DailyDaily

DailyDaily

Balance at

End of Year

$ 720,1514,839,463

$ 5,559,614

$ 3,970,366

806,180

$ 4,776,546

$ 3,586,487

4,145,277

$ 7,731,764

$ 18,067,924

Accrued

Interest

Receivable at

End of Year

$

$ -0-

$

$ -0-

$

$ -0-

$ -0-


-37-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1TAXES LEVIED AND RECEIVABLE


Maintenance Taxes Debt Service Taxes

TAXES RECEIVABLE -JANUARY 1,2018Adjustments to Beginning

Balance

Original 2018 Tax LevyAdjustment to 2018 Tax Levy

TOTAL TO BEACCOUNTED FOR

TAX COLLECTIONS:Prior Years

Current Year

$

$

$

483,620

(11,202)

637,915

463,71972,713

$

$

472,418

637,915

1,110,333

536,432

$

$

$

4,825,288

(136,807)

6,379,147

4,630,394727,124

$ 4,688,481

6,379,147

$ 11,067,628

5,357,518

TAXES RECEIVABLE -DECEMBER 31,2018

TAXES RECEIVABLE BYYEAR:201820172016201520142013201220112009 and prior

TOTAL

$ 573,901

$ 565,20213

1,0421,3181,5653,246

966445104

$ 573,901

$ 5,710,110

$ 5,652,023129

10,4248,565

14,08211,7346,2806,455

418

$ 5,710,110


-38-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1TAXES LEVIED AND RECEIVABLE


2018 2017 2016 2015

TOTAL PROPERTYVALUATIONS

TAX RATES PER $100VALUATION:Debt Service

Maintenance

TOTAL TAX RATES PER$100 VALUATION

ADJUSTED TAX LEVY*

PERCENTAGE OF TAXESCOLLECTED TO TAXESLEVIED

$ 1,063,189,814

$ 0.60

0.06

$_0.66$ 7,017,062

11.40%

$ 951,775,774

$ 0.60

0.06

$_0.66$ 6,330,347

99.99 %

$ 905,458,939

$ 0.60

0.06

$_0.66$ 5,976,029

99.81 %

$1,044,390,100

$ 0.52

0.08

$_0.60$ 6,266,341

99.84 %

* Based upon the adjusted tax levy at the time of the audit for the fiscal year in which the tax

was levied.

Maintenance Tax - Unlimited tax rate per $100 of assessed valuation approved by voters onFebruary 7, 2004.


-39-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1LONG-TERM DEBT SERVICE REQUIREMENTS

DECEMBER 31, 2018

SERIES-2012

Due During FiscalYears Ending

December 31

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042

PrincipalDue

September 1

$ 130,000135,000145,000150,000160,000170,000180,000190,000

200,000210,000220,000235,000245,000260,000275,000290,000305,000320,000340,000

$ 4,160,000

Interest Due

March I/

September 1

$ 161,525158,275154,630150,280145,630140,270134,150

127,400119,800111,800103,400

94,60084,96574,92064,26052,710

40,53027,72014,280

$ 1,961,145

$

$

Total

291,525293,275299,630300,280305,630310,270314,150317,400319,800321,800323,400329,600329,965334,920

339,260342,710345,530347,720354,280

6,121,145


-40-


DECEMBER 31, 2018

SERIES-2013

Due During Fiscal

Years EndingDecember 31

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042

PrincipalDue

September 1

$ 160,000165,000175,000185,000

195,000205,000220,000230,000240,000255,000270,000285,000300,000315,000335,000350,000370,000

390,000415,000435,000

$ 5,495,000

Interest Due

March I/

September 1

$ 259,492254,293248,517241,955234,555

226,755218,350209,000198,880187,840

175,855162,355148,105133,105

117,355100,270

82,42063,55043,562

22,294

$ 3,328,508

$

$

Total

419,492419,293423,517426,955429,555431,755438,350439,000438,880442,840445,855

447,355448,105448,105452,355450,270

452,420453,550458,562457,294

8,823,508


-41-

CHAMBERS COUNTY IMPROVEMENT DISTMCT NO. 1LONG-TERM DEBT SERVICE REQUIREMENTS

DECEMBER 31, 2018

SERIES-20 14

Due During Fiscal

Years Ending

December 31

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042

PrincipalDue

September 1

$ 240,000255,000270,000280,000295,000310,000

330,000345,000365,000385,000405,000425,000445,000470,000495,000520,000550,000

575,000605,000640,000

675,000

$ 8,880,000

Interest Due

March I/September 1

$ 356,896350,896344,521336,691327,871317,989307,139295,589282,996269,126254,111

237,911220,486201,573181,011159,355136,475

112,27586,40059,175

30,375

$ 4,868,861

$

$

Total

596,896

605,896614,521616,691

622,871627,989637,139640,589647,996654,126659,111

662,911665,486671,573676,011679,355

686,475

687,275691,400699,175

705,375

13,748,861


-42-


DECEMBER 31, 2018

REFUNDING SERIES-2014A

Due During Fiscal

Years Ending

December 31

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042

PrincipalDue

September 1

$ 265,000275,000290,000300,000675,000

690,000715,000745,000765,000

795,000820,000

$ 6,335,000

Interest Due

March I/September 1

$ 218,558209,415199,927189,923179,572

156,285132,480107,812

82,11055,718

28,290

$ 1,560,090

$

$

Total

483,558484,415

489,927489,923854,572846,285847,480

852,812847,110850,718848,290

7,895,090


-43-


DECEMBER 31, 2018

SE.RIES-2015

Due During Fiscal

Years Ending

December 31

2019202020212022202320242025202620272028202920302031.

20322033203420352036203720382039204020412042

PrincipalDue

September 1

$ 475,000475,000475,000500,000500,000

500,000450,000450,000450,000450,000450,000

475,000475,000475,000475,000475,000475,000475,000475,000475,000550,000570,000

$ 10,570,000

Interest Due

March I/September 1

$ 328,456318,956309,456299,956289,956278,706266,206254,394242,019228,519215,019

200,956185,519170,081154,050137,425119,613101,80082,80063,80044,80022,800

$ ^^^^ 4^^

$

$

Total

803,456793,956784,456799,956

789,956778,706716,206704,394692,019678,519665,019

675,956660,519645,081

629,050612,425594,613576,800557,800538,800594,800592,800

14,885,287


-44-


DECEMBER 31, 2018

REFUNDING SERIES-2016

Due During Fiscal

Years Ending

December 31

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042

PrincipalDue

September 1

$ 185,000190,000195,000

195,000200,000205,000215,000225,000230,000240,000

250,000260,000

$ 2,590,000

Interest Due

March I/

September 1

$ 82,10078,40074,60070,70066,800

60,80054,65048,20039,20030,00020,40010,400

$ 636,250

$

$

Total

267,100268,400269,600265,700266,800265,800269,650

273,200269,200270,000270,400270,400

3,226,250


-45-


DECEMBER 31, 2018

REFUNDING SERIES-2016A


December 31

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042

PrincipalDue

September 1

$ 820,000835,000850,000870,000885,000905,000930,000955,000995,000

1,035,000

1,070,0001,105,0001,145,0001,185,000

$ 13,585,000

Interest Due

March I/September 1

$ 448,700 $432,300415,600398,600381,200354,650327,500299,600261,400221,600180,200

137,40093,20047,400

$ 3,999,350 $

Total

1,268,7001,267,3001,265,600

1,268,6001,266,2001,259,6501,257,5001,254,6001,256,4001,256,6001,250,2001,242,4001,238,2001,232,400

17,584,350


-46-


DECEMBER 31, 2018

REFUNDING SERIES-2016B

Due During Fiscal

Years Ending

December 31

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042

PrincipalDue

September 1

$ 300,000

305,000315,000320,000

$ 1,240,000

Interest Due

March I/September 1

$ 32,183 $25,58218,2639,600

$ 85,628 $

Total

332,183

330,582333,263329,600

1,325,628


-47-


DECEMBER 31, 2018

SERIES-2017

Due During Fiscal

Years Ending

December 31

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042

PrincipalDue

September 1

$ 700,000700,000700,000700,000700,000700,000700,000700,000700,000700,000

700,000805,000805,000805,000900,000

900,000900,000900,000900,000900,000900,000900,000900,000

$ 18,215,000

Interest Due

March I/

September 1

$ 558,987 $544,988530,987516,988

502,987488,988474,112458,363440,862422,488403,237382,238357,081330,919303,750272,250239,625207,000173,250139,500

105,75070,87536,000

$ 7,961,225 $

Total

1,258,9871,244,9881,230,9871,216,9881,202,9871,188,9881,174,112

1,158,3631,140,8621,122,4881,103,237

1,187,2381,162,0811,135,9191,203,7501,172,2501,139,6251,107,0001,073,250

1,039,5001,005,750

970,875936,000

26,176,225


-48-


DECEMBER 31, 2018

SERIES-20 1 8 ROAD


December 31

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042

PrincipalDue

September 1

$ 900,000350,000350,000350,000

350,000

350,000350,000350,000350,000350,000350,000

350,000350,000350,000350,000380,000380,000380,000380,000385,000

385,000385,000385,000385,000

$ 9,245,000

Interest Due

March I/

September 1

$ 271,175313,150302,650292,150281,650271,150260,650248,400236,150

223,900210,775

197,650183,650169,650

155,650141,650126,450

111,25096,05080,85065,45049,08832,72516,362

$ 4,338,275

$

$

Total

1,171,175663,150652,650642,150

631,650621,150610,650598,400586,150573,900560,775547,650533,650519,650505,650521,650506,450491,250476,050465,850450,450434,088417,725401,362

13,583,275


-49-


DECEMBER 31, 2018

ANNUAL REQUIREMENTSFOR ALL SERIES

Due During Fiscal

Years Ending

December 31

201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042

TotalPrincipal Due

$ 4,175,0003,685,0003,765,0003,850,0003,960,0004,035,0004,090,0004,190,000

4,295,0004,420,0004,535,000

3,940,0003,765,0003,860,0002,830,0002,915,0002,980,0003,040,0003,115,000

2,835,0002,510,0001,855,0001,285,000

385,000

$ 80,315,000

TotalInterest Due

$ 2,718,0722,686,2552,599,1512,506,8432,410,2212,295,5932,175,2372,048,7581,903,4171,750,9911,591,287

1,423,5101,273,0061,127,648

976,076

863,660745,113623,595496,342

365,619246,375142,76368,72516,362

$ 33,054,619

Total

Principal andInterest Due

$ 6,893,0726,371,2556,364,1516,356,843

6,370,2216,330,5936,265,2376,238,7586,198,4176,170,9916,126,2875,363,5105,038,0064,987,6483,806,076

3,778,6603,725,1133,663,5953,611,342

3,200,6192,756,3751,997,7631,353,725

401,362

$ 113,369,619


-50-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1CHANGES IN LONG-TERM BOND DEBT

DECEMBER 31, 2018

Description

Original

Bonds Issued

Bonds

Outstanding

January 1,2018


Unlimited Tax and Revenue Bonds - Series 2012 $ 4,775,000 4,280,000


Unlimited Tax Road Bonds - Series 2013 6,050,000 5,645,000


Unlimited Tax Bonds - Series 2014


Unlimited Tax Refunding Bonds - Series 2014A

9,730,000

7,390,000

9,110,000

6,600,000


Unlimited Tax Bonds - Series 2015 12,180,000 11,045,000


Unlimited Tax Road Refunding Bonds - Series 2016 2,955,000 2,775,000


Unlimited Tax Refunding Bonds - Series 2016A 14,565,000 14,390,000


Unlimited Tax and Revenue Refunding Bonds - Taxable Series 2016B 1,810,000 1,530,000


Unlimited Tax Bonds - Series 2017 18,915,000 18,915,000


Unlimited Tax Road Bonds - Series 2018

TOTAL

9,245,000

$ 87,615,000 $ 74,290,000


-51-

Current Year Transactions

Retirements

Bonds Sold

9,245,000

Principal

185,000

805,000

290,000

700,000

Bonds

OutstandingInterest December 31, 2018 Paying Agent

120,000 $

150,000

164,285

264,743

85,800

464,800

37,402

464,757

4,160,000

5,495,000

The Bank of New York

Mellon Trust Company, N.A.

Dallas, TX



Dallas, TX



230,000

265,000

475,000

362,646

227,700

337,956

8,880,000

6,335,000

10,570,000

Dallas, TX

Regions Bank

Birmingham, AL


Mellon Trust Company, N.A

Dallas, TX

2,590,000

13,585,000

1,240,000

18,215,000

9,245,000



Dallas, TX



Dallas, TX



Dallas, TX



Dallas, TX



Dallas, TX

$ 9,245,000 $ 3,220,000 $ 2,410,089 $ 80.315,000


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CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1CHANGES IN LONG-TERM BOND DEBT

DECEMBER 31, 2018

Bond Authority:

Amount Authorized by Voters $ 250,000,000

Amount Issued 95,425,000

Remaining to be Issued $ 154,575/)00

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

Debt Service Fund cash and investment balances as of December 3 1,2018: $ 5,483,411

Average annual debt service payment for remaining term of all debt: $ 4,723,734


-53-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1COMPARATIVE SCHEDULE OF REVENUES AND EXPENDITURES

GENERAL FUND - FIVE YEARS

REVENUESProperty TaxesBarge TerminalWater Service

Wastewater ServicePenalty and Interest

Tap Connection and Inspection Fees


TOTAL REVENUES

EXPENDITURESProfessional Fees

Contracted Services

Purchased Water ServiceUtilitiesRepairs and Maintenance

OtherNote Principal and Interest

TOTAL EXPENDITURES


BEGINNING FUND BALANCE

ENDING FUND BALANCE

$

$

2018

569,5821,466,1431,402,863

405,291180,792177,04577,739

4,279,455

386,783756,317

1,015,02769,715

444,970191,416

2,864,228

1,415,227

5,049,582

6,464,809

$

$

$

$

$

$

2017

550,583 ;896,362

1,018,285308,299

36,204232,771

55,154

3,097,658 ;

418,232 ;464,487805,395

54,774306,718234,897

2,284,503 ;

813,155 ;

4,236,427

5,049,582 ;

Amounts

2016

? 829,809968,899833,520220,683197,410169,337

15,682

? 3,235,340

? 483,489289,445665,254

43,306512,159148,913

? 2,142,566

? 1,092,774

3,143,653

? 4,236,427


-54-

Percentage of Total Revenues

2015

$ 495,996 ;1,180,639

823,209376,09021,388

6,233

$ 2,903,555 ;

2014

S 956,7291,306,248

794,731227,470

20,54262,920

1,952

£ 3,370,592

2018

13.3 %

34.332.8

9.5

4.2

4.1

1.8

100.0 %

2017

17.7 %

28.932.9

10.01.2

7.5

1.8

100.0 %

2016

25.7 %

29.925.8

6.8

6.1

5.2

0.5

100.0 %

2015

17.0 %40.728 ;413.00.7

0.2

100.0 %

2014

28.4 %

38.823.6

6.7

0.6

1.9

100.0 %

621,739 $ 348,892 9.0 % 13.5 % 14.9 % 21.4 % 10.4 %276,774 255,308 17.7 15.0 8.9 9.5 7.6

714,453 559,230 23.7 26.0 20.6 24.6 16.6

40,270 33,271 1.6 1.8 1.3 . 1.4 1.0

331,164 217,089 10.4 9.9 15.8 11.4 6.4155,551 208,951 4.5 7.6 4.6 5.4 6.2

528,020 15.7

$ 2,139,951 $ 2,150,761 66.9 % 73.8 % 66.1 % 73.7 % 63.9 %

$ 763,604 $ 1,219,831 33.1 % 26.2 % 33.9 % 26.3 % 36.1 %

2,380,049 1,160,218

$ 3,143,653 $ 2,380,049


-55-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1COMPARATIVE SCHEDULE OF REVENUES AND EXPENDITURES

DEBT SERVICE FUND - FIVE YEARS

Amounts

REVENUESProperty Taxes


TOTAL REVENUES

EXPENDITURESTax Collection Expenditures

Debt Service Principal

Debt Service Interest and Fees

Bond Issuance Costs

Payment to Refunded Bond Escrow Agent

TOTAL EXPENDITURES

EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES

OTHER FINANCING SOURCES (USES)Proceeds from Issuance ofLong-Term Debt

Transfer to Refunded Bond Escrow Agent

Bond Premium

TOTAL OTHER FINANCmG SOURCES (USES)


BEGINNmG FUND BALANCE

ENDmG FUND BALANCE

TOTAL ACTWE RETAIL WATERCONNECTIONS

TOTAL ACTFVE RETAIL WASTEWATERCONNECTIONS

2018

-0-

67

2017 2016

5,689,026 $ 5,455,918 $ 5,394,53861,758 18,329 6,638

$ 5,750,784 $ 5,474,247 $ 5,401,176

48,967 $ 56,995 $ 32,911

3,220,000 2,450,000 2,285,000

2,415,839 2,022,452 2,218,289652,89349,000

$ 5,684,806 $ 4,529,447 $ 5,238,093

65,978 $ 944,800 $ 163,083

286,494 $ 19,330,000(19,420,751)

743,645

286,494 $ 652,894

$ 65,978 $ 1,231,294 $ 815,977

4,799,231 3,567,937 2,751,960

$ 4,865,209 $ 4,799,231 $ 3,567,937

66 57

43 38 35


-56-

Percentage of Total Revenues

$

$

$

$

$

2015

4,463,8423,263

4,467,105

35,4211,560,000

2,242,830

3,838,251

628,854

$

$

$

$

$

2014

3,458,9472,897

3,461,844

41,6681,140,000

1,958,449145,909165,000

3,451,026

10,818

2018

98.9

1.1

100.0

0.9

56.0

42.0

98.9

1.1

%

%

%

%

%

2017

99.7

0.3

100.0

1.0

44.8

36.9

82.7

17.3

%

%

%

%

%

2016

99.90.1

100.0

0.6

42.3

41.1

12.10.9

97.0

3.0

%

%

%

%

%

2015

99.9

0.1

100.0

0.8

34.9

50.2

85.9

14.1

%

%

%

%

%

2014

99.9

0.1

100.0

1.2

32.9

56.6

4.2

4.8

99.7

0.3

%

%

%

%

%

360,656 $ 7,768,146(7,241,494)

$ 360,656 $ 526,652

$ 989,510 $ 537,470

1,762,450 1,224,980

$ 2,751,960 $ 1,762,450

49 46

29 33


-57-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 1BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS

DECEMBER 31, 2018

District Mailing Address Chambers County Improvement District No. 1

c/o Smith, Murdaugh, Little & Bonham, L.L.P.2727 Alien Parkway, Suite 1100Houston, TX 77019

District Telephone Number

Board Members:

William Scott

Daniel Orsini

Craig Cavalier

Matt Fleming

Robert Leiper

Robert Jones

John Klein

(713)

Term of Office(Elected orAppointed)

05/201705/2021

(Appointed)

05/201705/2021

(Appointed)

05/201505/2019

(Appointed)

05/201505/2019

(Appointed)

05/201705/2021

(Appointed)

05/201705/2021

(Appointed)

05/201505/2019

(Appointed)

652-6500

Fees of Officefor the

year ended

December 31.2018

$ -0-

$ -0-

$ -0-

$ -0-

$ -0-

$ -0-

$ -0-

Expense

Reimbursements

for theyear ended

December 31.2018

$ -0-

$ 2,449

$ -0-

$ 642

$ 1,299

$ -0-

$ 3,180

Title

President

VicePresident

Secretary

Director

Director

Director

Director

Notes: Directors are qualified as required by Local Government Code Section 375.063 and are appointed by

the Chambers County Commissioners Court.

Submission date of most recent District Registration Form (TWC Sections 36.054 and 49.054):August 21, 2018.

The limit on Fees of Office that a Director may receive during a fiscal year is $7,200 as set by the TWCSection 49.060. Fees of Office are the amounts actually paid to a Director during the District's current

fiscal year.


-58-

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO.BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS

DECEMBER 31, 2018

Consultants:

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

McCall Gibson Swedlund Barfoot PLLC

Municipal Business Services

Landev Engineers, Inc.

Masterson Advisors LLC

Bob Ideus

Municipal District Services

Date Hired

09/10/03

02/08/06

09/10/03

07/13/11

07/11/18

09/10/03

03/14/12

Fees/Compensationfor the

year endedDecember 31,2018

$ 172,827$ 186,220

$ 19,500$ 22,000

$ 15,934

$ 90,830

$ 165,465

$ -0-

$ 294,782

Title

General Counsel

Bond Counsel

Audit RelatedAUP/Bond Related

Bookkeeper

Engineer

Financial Advisor

Investment Officer

Operator


-59-

william f. scott daniel orsini information required by ... · matt fleming (2) mailing address,...

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