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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220

HARRIS COUNTY, TEXAS

ANNUAL FINANCIAL REPORT

APRIL 30, 2019

McCALL GIBSON SWEDLUND BARFOOT PLLC Certified Public Accountants

T A B L E O F C O N T E N T S

PAGE INDEPENDENT AUDITOR’S REPORT 1-2 MANAGEMENT’S DISCUSSION AND ANALYSIS 3-7 BASIC FINANCIAL STATEMENTS

STATEMENT OF NET POSITION AND GOVERNMENTAL FUNDS BALANCE SHEET

8-11

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO

THE STATEMENT OF NET POSITION

12 STATEMENT OF ACTIVITIES AND GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

13-14 RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF

REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES

15

NOTES TO THE FINANCIAL STATEMENTS 16-28 REQUIRED SUPPLEMENTARY INFORMATION

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

30

SUPPLEMENTARY INFORMATION REQUIRED BY THE WATER DISTRICT

FINANCIAL MANAGEMENT GUIDE

NOTES REQUIRED BY THE WATER DISTRICT FINANCIAL

MANAGEMENT GUIDE (Included in the notes to the financial statements)

SERVICES AND RATES 32-34 GENERAL FUND EXPENDITURES 35 INVESTMENTS 36 TAXES LEVIED AND RECEIVABLE 37-38 LONG-TERM DEBT SERVICE REQUIREMENTS 39-43 CHANGES IN LONG-TERM BOND DEBT 44-45

COMPARATIVE SCHEDULE OF REVENUES AND EXPENDITURES GENERAL

FUND AND DEBT SERVICE FUND - FIVE YEARS

46-49 BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS 50-51

McCALL GIBSON SWEDLUND BARFOOT PLLC Certified Public Accountants

13100 Wortham Center Drive Suite 235 9600 Great Hills Trail Houston, Texas 77065-5610 Suite 150W (713) 462-0341 Austin, Texas 78759 Fax (713) 462-2708 (512) 610-2209 E-Mail: [email protected] www.mgsbpllc.com

Member of American Institute of Certified Public Accountants

Texas Society of Certified Public Accountants

INDEPENDENT AUDITOR’S REPORT Board of Directors Harris County Municipal Utility District No. 220 Harris County, Texas We have audited the accompanying financial statements of the governmental activities and each major fund of Harris County Municipal Utility District No. 220 (the “District”), as of and for the year ended April 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in 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 or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our 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 whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial 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.

Board of Directors Harris County Municipal Utility District No. 220

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Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of April 30, 2019, and the respective changes in financial 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 principles 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. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting 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 applied certain limited procedures to the required supplementary information in accordance with auditing standards 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 for consistency 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 opinion or 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 Texas Commission 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 opinion or 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 such information 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 financial statements as a whole. McCall Gibson Swedlund Barfoot PLLC Certified Public Accountants Houston, Texas August 19, 2019

HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED APRIL 30, 2019

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Management’s discussion and analysis of Harris County Municipal Utility District No. 220’s (the “District”) financial performance provides an overview of the District’s financial activities for the fiscal year ended April 30, 2019. 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 statements include: (1) combined fund financial statements and government-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 Governmental Funds Balance Sheet and (2) the Statement of Activities and Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances. This report also includes required and other supplementary information in addition to the basic financial statements. GOVERNMENT-WIDE FINANCIAL STATEMENTS The District’s annual report includes two financial statements combining the government-wide financial statements and the fund financial statements. The government-wide financial statements provide both long-term 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 with its basis in full accrual accounting and elimination or reclassification of internal activities. The Statement of Net Position includes the District’s assets, liabilities, and deferred outflows and inflows of resources with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. Evaluation of the overall health of the District would extend to other non-financial factors. The Statement of Activities reports how the District’s net position changed during the current fiscal year. All current year revenues and expenses are included regardless of when cash is received or paid.

FUND FINANCIAL STATEMENTS

The combined statements also include fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District has three governmental fund types. The General Fund accounts for resources not accounted for in another fund, customer service revenues, costs and general expenditures. The Debt Service Fund accounts for ad valorem taxes and financial resources restricted, committed or assigned for servicing bond debt and the cost of assessing and collecting taxes. The Capital Projects Fund accounts for financial resources restricted, committed or assigned for acquisitions or construction of facilities and related costs.



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FUND FINANCIAL STATEMENTS (Continued) Governmental funds are reported in each of the financial statements. The focus in the fund statements provides a distinctive view of the District’s governmental funds. These statements report short-term fiscal accountability focusing on the use of spendable resources and balances of spendable resources available at the end of the year. They are useful in evaluating annual financing requirements of the District and the commitment of spendable resources for the near-term. Since the government-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 the Statement of Net Position and the Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities explain the differences between the two presentations and assist in understanding the differences between these two perspectives. NOTES TO THE FINANCIAL STATEMENTS The accompanying notes to the financial statements provide information essential to a full understanding of the government-wide and fund financial statements. OTHER INFORMATION In addition to the financial statements and accompanying notes, this report also presents certain required supplementary information (“RSI”). A budgetary comparison schedule is included as RSI for the General Fund. GOVERNMENT-WIDE FINANCIAL ANALYSIS Net position may serve over time as a useful indicator of the District’s financial position. In the case of the District, assets and deferred outflows exceeded liabilities by $1,648,892 as of April 30, 2019. A portion of the District’s net position reflects its net investment in capital assets (water and wastewater facilities less any debt used to acquire those assets that is still outstanding). The District uses these assets to provide water and wastewater services. The following is a comparative analysis of government-wide changes in net position:



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GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)

ChangePositive

2019 2018 (Negative)

Current and Other Assets 4,542,519$ 3,761,931$ 780,588$ Capital Assets (Net of Accumulated

Depreciation) 5,060,966 5,052,478 8,488

Total Assets 9,603,485$ 8,814,409$ 789,076$

Deferred Outflows of Resources 160,053$ 146,949$ 13,104$

Due to Developer 21,765$ 21,765$ $ Long -Term Liabilities 7,477,880 7,625,128 147,248 Other Liabilities 615,001 454,505 (160,496)

Total Liabilities 8,114,646$ 8,101,398$ (13,248)$

Net Position:Net Investment in Capital Assets (2,453,686)$ (2,598,317)$ 144,631$ Restricted 1,059,826 1,017,077 42,749 Unrestricted 3,042,752 2,441,200 601,552

Total Net Position 1,648,892$ 859,960$ 788,932$

Summary of Changes in the Statement of Net Position

The following table provides a summary of the District’s operations for the years ended April 30, 2019, and April 30, 2018.

ChangePositive


Revenues:Property Taxes 1,532,697$ 1,422,476$ 110,221$ Charges for Services 519,533 517,613 1,920 Other Revenues 34,628 24,519 10,109

Total Revenues 2,086,858$ 1,964,608$ 122,250$

Expenses for Services 1,297,926 1,168,128 (129,798)

Change in Net Position 788,932$ 796,480$ (7,548)$

Net Position, Beginning of Year 859,960 63,480 796,480

Net Position, End of Year 1,648,892$ 859,960$ 788,932$

Summary of Changes in the Statement of Activities



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FINANCIAL ANALYSIS OF THE DISTRICT’S GOVERNMENTAL FUNDS The District’s combined fund balances as of April 30, 2019, were $4,170,314, an increase of $630,966 from the prior year. The General Fund fund balance increased by $596,920, primarily due to service revenues exceeding operating expenditures. The Debt Service Fund fund balance increased by $33,255, primarily due to the structure of the District’s outstanding debt. The Capital Projects Fund fund balance increased by $791. GENERAL FUND BUDGETARY HIGHLIGHTS The Board of Directors did not amend the budget during the current fiscal year. Actual revenues were $32,631 more than budgeted revenues primarily due to property tax and investment revenues being more than anticipated. Actual expenditures were $49,953 less than budgeted expenditures due to less purchased wastewater services and miscellaneous expenditures than anticipated. CAPITAL ASSETS Capital assets as of April 30, 2019, total $5,060,966 (net of accumulated depreciation) and include land, buildings and equipment as well as the water and wastewater systems.

ChangePositive


Capital Assets Not Being Depreciated:Land and Land Improvements 1,969,523$ 1,969,523$ $ Construction in Progress 143,026 143,026

Capital Assets, Net of AccumulatedDepreciation:Water System 1,167,680 1,221,795 (54,115) Wastewater System 1,780,737 1,861,160 (80,423)

Total Net Capital Assets 5,060,966$ 5,052,478$ 8,488$

Capital Assets At Year-End, Net of Accumulated Depreciation

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



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LONG-TERM DEBT ACTIVITY As of April 30, 2019, the District had total bond debt payable of $7,690,000. The changes in the debt position of the District during the fiscal year ended April 30, 2019, are summarized as follows:

Bond Debt Payable, May 1, 2018 7,825,000$

Add: Bond Sale Series 2018 Refunding 1,125,000

Less: Bond Principal Paid and Refunded 1,260,000

Bond Debt Payable, April 30, 2019 7,690,000$

The District’s Series 2011 bonds and Series 2012 bonds do not have an underlying rating. The Series 2015 bonds and 2018 Refunding bonds have an underlying rating of “BBB” and carry an insured rating of “AA” by virture of bond insurance issued by Municipal Assurance Corp. The above ratings are as of April 30, 2019 and reflect all rating changes of the bond insurers through the year then ended. CONTACTING THE DISTRICT’S MANAGEMENT This financial report is designed to provide a general overview of the District’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Harris County Municipal Utility District No. 220, c/o Smith, Murdaugh, Little & Bonham, 2727 Allen Parkway, Suite 1100, Houston, Texas 77019.

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

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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 STATEMENT OF NET POSITION AND

GOVERNMENTAL FUNDS BALANCE SHEET APRIL 30, 2019

DebtGeneral Fund Service Fund

ASSETSCash 2,851,851$ 946,916$ Investments 403,321 109,469 Receivables:

Property Taxes 20,294 18,316 Penalty and Interest on Delinquent Taxes Service Accounts 47,252 Accrued Interest 431 144

Due from Other Funds 12,543 Prepaid Costs 3,382 LandConstruction in ProgressCapital Assets (Net of Accumulated Depreciation)

TOTAL ASSETS 3,326,531$ 1,087,388$

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

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 3,326,531$ 1,087,388$


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Capital Statement ofProjects Fund Total Adjustments Net Position

62,699$ 3,861,466$ $ 3,861,466$ 37,241 550,031 550,031

38,610 38,610

20,698 20,698 47,252 47,252

575 575 12,543 (12,543) 3,382 20,505 23,887

1,969,523 1,969,523 143,026 143,026

2,948,417 2,948,417

99,940$ 4,513,859$ 5,089,626$ 9,603,485$

-0- $ -0- $ 160,053$ 160,053$

99,940$ 4,513,859$ 5,249,679$ 9,763,538$


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 STATEMENT OF NET POSITION AND

GOVERNMENTAL FUNDS BALANCE SHEET APRIL 30, 2019


LIABILITIESAccounts Payable 210,391$ $ Accrued Interest PayableDue to Developers Due to Other Funds 12,543 Due to Taxpayers 651 Security Deposits 81,350 Long-Term Liabilities:

Bonds Payable, Due Within One YearBonds Payable, Due After One Year

TOTAL LIABILITIES 304,284$ 651$

DEFERRED INFLOWS OF RESOURCESProperty Taxes 20,294$ 18,316$

FUND BALANCESNonspendable:

Prepaid Costs 3,382$ $ Restricted for Authorized Construction Restricted for Debt Service 1,068,421 Unassigned 2,998,571

TOTAL FUND BALANCES 3,001,953$ 1,068,421$

TOTAL LIABILITIES, DEFERRED INFLOWSOF RESOURCES AND FUND BALANCES 3,326,531$ 1,087,388$

NET POSITIONNet Investment in Capital AssetsRestricted for Debt ServiceUnrestricted

TOTAL NET POSITION


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Capital Statement ofProjects Fund Total Adjustments Net Position

$ 210,391$ $ 210,391$ 47,609 47,609 21,765 21,765 12,543 (12,543)

651 651 81,350 81,350

275,000 275,000

7,477,880 7,477,880

-0- $ 304,935$ 7,809,711$ 8,114,646$

-0- $ 38,610$ (38,610)$ -0- $

$ 3,382$ (3,382)$ $ 99,940 99,940 (99,940)

1,068,421 (1,068,421) 2,998,571 (2,998,571)

99,940$ 4,170,314$ (4,170,314)$ -0- $

99,940$ 4,513,859$

(2,453,686)$ (2,453,686)$ 1,059,826 1,059,826 3,042,752 3,042,752

1,648,892$ 1,648,892$


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION APRIL 30, 2019

Total Fund Balances - Governmental Funds 4,170,314$

20,505

5,060,966

160,053

59,308

Due to Developer (21,765)$ Accrued Interest Payable (47,609) Bonds Payable Within One Year (275,000) Bonds Payable After One Year (7,477,880) (7,822,254)

Total Net Position - Governmental Activities 1,648,892$

Amounts reported for governmental activities in the Statement of Net Position aredifferent because:

Capital assets used in governmental activities are not current financial resourcesand, therefore, are not reported as assets in the governmental funds.

Certain liabilities are not due and payable in the current period and, therefore, arenot reported as liabilities in the governmental funds. These liabilities at year endconsist of:

Deferred inflows of resources related to property tax revenues and uncollectedpenalty and interest revenues on delinquent taxes for the 2018 and prior tax leviesbecame part of recognized revenue in the governmental activities of the District.

The difference between the net carrying amount of the refunded bonds and thereacquisition price is recorded as a deferred outflow in the governmental activitiesand systematically charged to interest expense over the remaining life of old debt orthe life of the new debt, whichever is shorter.

Unamortized bond insurance costs recorded as prepaid costs in governmentalactivities are not current financial resources and, therefore, are not reported asassets in the governmental funds.

THIS PAGE INTENTIONALLY LEFT BLANK


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 STATEMENT OF ACTIVITIES AND GOVERNMENTAL FUNDS STATEMENT OF

REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED APRIL 30, 2019


REVENUESProperty Taxes 952,552$ 571,218$ Water Service 221,433 Wastewater Service 273,632 Penalty and Interest 16,535 4,330 Investment Revenues 22,190 6,678 Miscellaneous Revenues 4,875

TOTAL REVENUES 1,491,217$ 582,226$ EXPENDITURES/EXPENSES

Service Operations:Professional Fees 76,199$ 1,626$ Contracted Services 152,987 21,813 Purchased Water Service 243,412 Purchased Wastewater Service 274,305 Utilities 7,247 Repairs and Maintenance 63,968 DepreciationOther 76,179 2,821

Debt Service:Bond Principal 250,000 Bond Interest 281,039 Bond Issuance Costs 78,929

TOTAL EXPENDITURES/EXPENSES 894,297$ 636,228$ EXCESS (DEFICIENCY) OF REVENUES OVER

EXPENDITURES 596,920$ (54,002)$

OTHER FINANCING SOURCES (USES) Long-Term Debt Issued $ 1,125,000$ Payment to Refunded Bond Escrow Agent (1,026,889) Bond Discount (10,854)

TOTAL OTHER FINANCING SOURCES (USES) -0- $ 87,257$

NET CHANGE IN FUND BALANCES 596,920$ 33,255$

CHANGE IN NET POSITION

FUND BALANCES/NET POSITION - MAY 1, 2018 2,405,033 1,035,166

FUND BALANCES/NET POSITION - APRIL 30, 2019 3,001,953$ 1,068,421$


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Capital Statement of Projects Fund Total Adjustments Activities

$ 1,523,770$ 8,927$ 1,532,697$ 221,433 221,433 273,632 273,632

20,865 3,603 24,468 885 29,753 29,753 4,875 4,875

885$ 2,074,328$ 12,530$ 2,086,858$

$ 77,825$ $ 77,825$ 174,800 174,800 243,412 243,412 274,305 (143,026) 131,279

7,247 7,247 63,968 63,968

134,538 134,538 94 79,094 79,094

250,000 (250,000)

281,039 25,795 306,834 78,929 78,929

94$ 1,530,619$ (232,693)$ 1,297,926$

791$ 543,709$ 245,223$ 788,932$

$ 1,125,000$ (1,125,000)$ $ (1,026,889) 1,026,889 (10,854) 10,854

-0- $ 87,257$ (87,257)$ -0- $

791$ 630,966$ (630,966)$ $

788,932 788,932

99,149 3,539,348 (2,679,388) 859,960

99,940$ 4,170,314$ (2,521,422)$ 1,648,892$


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF

REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED APRIL 30, 2019

Net Change in Fund Balances - Governmental Funds 630,966$

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

of Activities, revenue is recorded in the accounting period for which the taxes arelevied. 8,927

Governmental funds report penalty and interest revenue on property taxes whencollected. However, in the Statement of Activities, revenue is recorded whenpenalties and interest are assessed. 3,603

Governmental funds do not account for depreciation. However, in the Statement ofNet Position, capital assets are depreciated and depreciation expense is recorded inthe Statement of Activities. (134,538)

Governmental funds report capital expenditures for purchased wastewater servicesas expenditures in the period purchased. However, in the Statement of Net Position, capital assets related to purchased wastewater services are increased by newpurchases and the Statement of Activities is not affected. 143,026

Governmental funds report bond discounts as other financing uses. However, in theStatement of Net Position, the bond discounts are amortized over the life of thebonds and the current year amortized portion is recorded in the Statement ofActivities. 10,854

Governmental funds report bond principal payments as expenditures. However, inthe Statement of Net Position, bond principal payments are reported as decreases inlong-term liabilities. 250,000

Governmental funds report interest expenditures on long-term debt as expendituresin the year paid. However, in the Statement of Net Position, interest is accrued onthe long-term debt through fiscal year-end. (25,795)

Governmental funds report bond proceeds as other financing sources. Issued bondsincrease long-term liabilities in the Statement of Net Position. (1,125,000)

Governmental funds report the payment to the refunded bond escrow agent as another financing use and as an expenditure. However, the refunding of outstandingbonds decreases long-term liabilities in the Statement of Net Positon. 1,026,889

Change in Net Position - Governmental Activities 788,932$

HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 NOTES TO THE FINANCIAL STATEMENTS

APRIL 30, 2019

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NOTE 1. CREATION OF DISTRICT

Harris County Municipal Utility District No. 220 (the District) was created by an order of the Texas Water Commission, now known as the Texas Commission on Environmental Quality (the Commission), effective March 9, 1982, in accordance with the Texas Water Code, Chapter 54. The District operates in accordance with Chapters 49 and 54 of the Texas Water Code and is subject to the continuing supervision of the Commission. The principal functions of the District are to finance, construct, own and operate waterworks, wastewater and drainage facilities and to provide such facilities and services to the customers of the District. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America as promulgated by the Governmental Accounting Standards Board (“GASB”). In addition, the accounting records of the 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 elected board. GASB has established the criteria for determining whether or not an entity is a primary government or a component unit of a primary government. The primary criteria are that it has a separately elected governing body, it is legally separate, and it is fiscally independent of other state and local governments. Under these criteria, the District is considered a primary government and is not a component unit of any other government. Additionally, no other entities meet the criteria for inclusion in the District’s financial statement as component units. Financial Statement Presentation These financial statements have been prepared in accordance with GASB Codification of Governmental Accounting and Financial Reporting Standards Part II, Financial Reporting (“GASB Codification”). The GASB Codification set forth standards for external financial reporting for all state and local government entities, which include a requirement for a Statement of Net Position and a Statement of Activities. It requires the classification of net position into three components: Net Investment in Capital Assets; Restricted; and Unrestricted. These classifications are defined as follows:


APRIL 30, 2019

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NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Financial Statement Presentation (Continued)

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

Restricted Net Position – This component of net position consists of external constraints placed 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.

Unrestricted Net Position – This component of net position consists of assets that do not meet the definition of Restricted or Net Investment in Capital Assets.

When both restricted and unrestricted resources are available for use, generally it is the District’s policy to use restricted resources first.

Government-Wide Financial Statements The Statement of Net Position and the Statement of Activities display information about the District as a whole. The District’s Statement of Net Position and Statement of Activities are combined 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 on the 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 due from other funds are eliminated in the Statement of Net Position. The Statement of Activities is reported by adjusting the governmental fund types to report only items related to current year revenues and expenditures. Items such as capital outlay are allocated over their estimated useful lives as depreciation expense. Internal activities between governmental funds, if any, are eliminated by adjustment to obtain net total revenue and expense of the government-wide Statement of Activities.


APRIL 30, 2019

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NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fund Financial Statements As discussed above, the District’s fund financial statements are combined with the government-wide financial statements. The fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances. Governmental 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, costs and general expenditures. Debt Service Fund - To account for ad valorem taxes and financial resources restricted, committed or assigned for servicing bond debt and the cost of assessing and collecting taxes. Capital Projects Fund - To account for financial resources restricted committed or assigned for acquisition or construction of facilities and related costs. Basis of Accounting The District uses the modified accrual basis of accounting for governmental fund types. The modified accrual basis of accounting recognizes revenues when both “measurable and available.” Measurable means the amount can be determined. Available means collectable within the current period or soon enough thereafter to pay current liabilities. The District considers revenues reported in the governmental funds to be available if they are collectable within 60 days after year end. Also, under the modified accrual basis of accounting, expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, which are recognized as expenditures when payment is due. Property taxes considered available by the District and included in revenue include taxes collected during the year and taxes collected after year-end, which were considered available to defray the expenditures of the current year. Deferred inflows of resources related to property tax revenues are those taxes which the District does not reasonably expect to be collected soon enough in the subsequent period to finance current expenditures. Amounts transferred from one fund to another fund are reported as other financing sources or uses. Loans by one fund to another fund and amounts paid by one fund for another fund are reported as interfund receivables and payables in the Governmental Funds Balance Sheet if there is intent to repay the amount and if the debtor fund has the ability to repay the advance on a timely basis.


APRIL 30, 2019

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NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets, are reported in the government-wide Statement of Net Position. All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated assets are valued at their fair market value on the date donated. Repairs and maintenance are recorded as expenditures in the governmental fund incurred and as an expense in the government-wide Statement of Activities. Capital asset additions, improvements and preservation costs that extend the life of an asset are capitalized and depreciated over the estimated useful life of the asset. Interest costs, including developer interest, engineering fees and certain other costs are capitalized as part of the asset. Assets are capitalized, including infrastructure assets, if they have an original cost greater than $20,000 and a useful life over two years. Depreciation is calculated on each class of depreciable property using the straight-line method of depreciation. Estimated useful lives are as follows:

Years

Water System 10-45 Wastewater System 10-45

Budgeting In compliance with governmental accounting principles, the Board of Directors annually adopts an unappropriated budget for the General Fund. The budget was not amended during the current fiscal year. Pensions The District has not established a pension plan as the District does not have employees. The Internal Revenue Service has determined that fees of office received by Directors are considered wages subject to federal income tax withholding for payroll purposes only. Measurement Focus Measurement focus is a term used to describe which transactions are recognized within the various financial statements. In the government-wide Statement of Net Position and Statement of Activities, the governmental activities are presented using the economic resources measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net position, financial position, and cash flows. All assets and liabilities associated with the activities are reported. Fund equity is classified as net position.


APRIL 30, 2019

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NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Measurement Focus (Continued) 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 the reported fund balances provide an indication of available spendable or appropriable resources. Operating statements of governmental fund types report increases and decreases in available spendable resources. Fund balances in governmental funds are classified using the following hierarchy: Nonspendable: amounts that cannot be spent either because they are in nonspendable form or because they are legally or contractually required to be maintained intact. Restricted: amounts that can be spent only for specific purposes because of constitutional provisions, 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 the Board 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 be established, modified, or rescinded only through ordinances or resolutions approved by the Board. The District does not have any committed fund balances. Assigned: amounts that do not meet the criteria to be classified as restricted or committed, but that are intended to be used for specific purposes. The District has not adopted a formal policy regarding the assignment of fund balances. The District 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 fund balances are available, the District considers amounts to have been spent first out of restricted funds, then committed funds, then assigned funds, and finally unassigned funds. Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.


APRIL 30, 2019

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NOTE 3. LONG-TERM DEBT Series 2011 Series 2012

Amount Outstanding - April 30, 2019 $ 55,000 $ 1,945,000

Interest Rates 4.10% - 4.25% 2.50% - 4.00%

Maturity Dates – Serially Beginning/Ending

September 1, 2019/2020


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

Callable Dates September 1, 2012* September 1, 2015*

Refunding

Series 2015 Refunding

Series 2018

Amount Outstanding - April 30, 2019 $ 4,565,000 $ 1,125,000

Interest Rates 2.00% - 4.00% 3.00% - 4.00%

Maturity Dates – Serially Beginning/Ending



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

Callable Dates September 1, 2022* September 1, 2023*

* Or any date thereafter, callable at par plus unpaid accrued interest in whole or in part, at the option of the District. Series 2012 term bonds maturing on September 1, 2038, are subject to mandatory redemption beginning September 1, 2031. Series 2018 term bonds maturing on September 1, 2023, September 1, 2026, September 1, 2029, September 1, 2032, and September 1, 2035, are subject to mandatory redemption beginning September 1, 2019, September 1, 2024, September 1, 2027, September 1, 2030, and September 1, 2033, respectively.


APRIL 30, 2019

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NOTE 3. LONG-TERM DEBT (Continued) The following is a summary of transactions regarding long-term liabilities for the year ended April 30, 2019:

May 1, April 30,2018 Additions Retirements 2019

Bonds Payable 7,825,000$ 1,125,000$ 1,260,000$ 7,690,000$ Unamortized Discounts (50,691) (18,638) (32,053) Unamortized Premiums 100,819 5,886 94,933 Total Long-Term Liabilities 7,875,128$ 1,125,000$ 1,247,248$ 7,752,880$

Amount Due Within One Year 275,000$ Amount Due After One Year 7,477,880 Total Long-Term Liabilities 7,752,880$

As of April 30, 2019, the District had authorized but unissued bonds in the amount of $15,520,000 for utility facilities and for refunding purposes.

As of April 30, 2019, the debt service requirements on the bonds outstanding were as follows:

Fiscal Year Principal Interest Total

2020 275,000$ 282,468$ 557,468$ 2021 270,000 275,082 545,082 2022 285,000 266,606 551,606 2023 290,000 257,981 547,981 2024 300,000 249,131 549,131

2025-2029 1,650,000 1,085,773 2,735,773 2030-2034 2,030,000 727,757 2,757,757 2035-2039 2,590,000 271,600 2,861,600

7,690,000$ 3,416,398$ 11,106,398$

The bonds are payable from the proceeds of an ad valorem tax levied upon all property subject to taxation within the District, without limitation as to rate or amount. During the year ended April 30, 2019, the District levied an ad valorem debt service tax at the rate of $0.30 per $100 of assessed valuation, which resulted in a tax levy of $580,065 on the adjusted taxable valuation of $193,354,883 for the 2018 tax year. The bond orders require the District to levy and collect an ad valorem debt service tax sufficient to pay interest and principal on bonds when due and the cost of assessing and collecting taxes. See Note 7 for the maintenance tax levy.


APRIL 30, 2019

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NOTE 3. LONG-TERM DEBT (Continued) The District's tax calendar is as follows: Levy Date - October 1 or as soon thereafter as practicable. Lien Date - January 1. Due Date - Not later than January 31. Delinquent Date - February 1, at which time the taxpayer is liable for penalty and interest. NOTE 4. SIGNIFICANT BOND ORDER AND LEGAL REQUIREMENTS The bond orders state that the District is required by the Securities and Exchange Commission to provide continuing disclosure of certain general financial information and operating data with respect to the District to the Municipal Securities Rulemaking Board (the “MRSB”) through its Electronic Municipal is Market Access system (“EMMA”). This information, along with the audited annual financial statements, is to be provided within six months after the end of each fiscal year and shall continue to be provided through the life of the respective bonds. The bond orders state that the District should take all necessary steps to comply with the requirement that rebatable arbitrage earnings, if any, on the investment of the gross proceeds of the bonds, within the meaning of Section 148(f) of the internal Revenue Code, be rebated to the federal government. The minimum frequency for determining the rebatable amount, if any, is on each five-year anniversary of the bond issue. The bond orders state that so long as any of the bonds are outstanding, the District agrees to maintain insurance on or self-insure its properties of a kind and in an amount which usually would be carried by private companies operating similar properties and engaged in a similar type of business, but considering any governmental immunities to which the District may be entitled.


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NOTE 5. DEPOSITS AND INVESTMENTS Deposits Custodial credit risk is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The District’s deposit policy for custodial credit risk requires compliance with the provisions of Texas statutes. Texas statutes require that any cash balance in any fund shall, to the extent not insured by the Federal Deposit Insurance Corporation or its successor, be continuously secured by a valid pledge to the District of securities eligible under the laws of Texas to secure the funds of the District, having an aggregate market value, including accrued interest, at all times equal to the uninsured cash balance in the fund to which such securities are pledged. At fiscal year end, the carrying amount of the District’s deposits was $4,099,862 and the bank balance was $4,095,877. 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 and the Statement of Net Position at April 30, 2019, as listed below:

Certificates Cash of Deposit Total

GENERAL FUND 2,851,851$ 131,156$ 2,983,007$

DEBT SERVICE FUND 946,916 107,240 1,054,156

CAPITAL PROJECTS FUND 62,699 62,699

TOTAL DEPOSITS 3,861,466$ 238,396$ 4,099,862$

Investments

Under Texas law, the District is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity and that address investment diversification, yield, maturity, and the quality and capability of investment management, and all District funds must be invested in accordance with the following investment objectives: understanding the suitability of the investment to the District’s financial requirements, first; preservation and safety of principal, second; liquidity, third; marketability of the investments if the need arises to liquidate 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 exercise in 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 person may invest District funds without express written authority from the Board of Directors.


APRIL 30, 2019

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NOTE 5. DEPOSITS AND INVESTMENTS (Continued)

Investments (Continued) Texas statutes include specifications for and limitations applicable to the District and its authority to purchase investments as defined in the Public Funds Investment Act. The District has adopted a written investment policy to establish the guidelines by which it may invest. This policy is reviewed annually. The District’s investment policy may be more restrictive than the Public Funds Investment Act.

The District invests in the Texas Short Term Asset Reserve Program (“TexSTAR”), an external public funds investment pool that is not SEC-registered. J. P. Morgan Investment Management Inc. provides investment management and FirstSouthwest, a Division of Hilltop Securities Inc., provides participant services and marketing under an agreement with the TexSTAR Board of Directors. Custodial, fund accounting and depository services are provided by JPMorgan Chase Bank, N.A. and/or its subsidiary J.P. Morgan Investors Services Co. Investments held by TexSTAR are marked to market daily. The investments are considered Level I investments because their fair value is measured by quoted prices in active markets. The fair value of the District’s position in the pool is the same as the value of the pool shares. There are no limitations or restrictions on withdrawals from TexSTAR. As of April 30, 2019, the District had the following investments and maturities:

Fund and Less Than More ThanInvestment Type Fair Value 1 1-5 6-10 10

GENERAL FUNDTexSTAR 272,165$ 272,165$ $ $ $ Certificate of Deposit 131,156 131,156

DEBT SERVICE FUNDTexSTAR 2,229 2,229 Certificate of Deposit 107,240 107,240

CAPITAL PROJECTS FUNDTexSTAR 37,241 37,241

TOTAL INVESTMENTS 550,031$ 550,031$ - 0 - $ - 0 - $ - 0 - $

Maturities in Years

Credit risk is the risk that the issuer or other counterparty to an investment will not fulfill its obligations. At April 30, 2019, the District’s investment in TexSTAR was rated AAAm by Standard and Poor’s. The District also manages credit risk by typically investing in certificates of deposit with balances below FDIC coverage.


APRIL 30, 2019

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NOTE 5. DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The District considers the investment in TexSTAR to have a maturity of less than one year due to the fact the share position can usually be redeemed each day at the discretion of the District, unless there has been a significant change in value. The District also manages interest rate risk by investing in certificates of deposit with maturities of less than one year.

Restrictions

All cash and investments of the Debt Service Fund are restricted for the payment of debt service and the cost of assessing and collecting taxes. All cash and investments of the Capital Projects Fund are restricted for the purchase of capital assets and the maintenance and repair of capital assets. NOTE 6. CAPITAL ASSETS

Capital asset activity for the year ended April 30, 2019:

May 1, April 30,2018 Increases Decreases 2019

Capital Assets Not Being DepreciatedLand and Land Improvements 1,969,523$ $ $ 1,969,523$ Construction in Progress 143,026 143,026

Total Capital Assets Not BeingDepreciated 1,969,523$ 143,026$ - 0 - $ 2,112,549$

Capital Assets Subjectto DepreciationWater System 1,856,612$ $ $ 1,856,612$ Wastewater System 2,857,738 2,857,738

Total Capital AssetsSubject to Depreciation 4,714,350$ - 0 - $ - 0 - $ 4,714,350$

Accumulated DepreciationWater System 634,817$ 54,115$ $ 688,932$ Wastewater System 996,578 80,423 1,077,001

Total Accumulated Depreciation 1,631,395$ 134,538$ - 0 - $ 1,765,933$

Total Depreciable Capital Assets, Net ofAccumulated Depreciation 3,082,955$ (134,538)$ - 0 - $ 2,948,417$

Total Capital Assets, Net of AccumulatedDepreciation 5,052,478$ 8,488$ - 0 - $ 5,060,966$

The District has financed drainage facilities which have been conveyed to other entities for maintenance.


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NOTE 7. MAINTENANCE TAX November 2, 2004, voters authorized an unlimited maintenance tax per $100 valuation on all property within the District subject to taxation. During the year ended April 30, 2019, the District levied an ad valorem maintenance tax at the rate of $0.50 per $100 of assessed valuation, which resulted in a tax levy of $966,775 on the taxable valuation of $193,354,883 for the 2018 tax year. The maintenance tax is being used by the general fund to pay expenditures of operating the District.

NOTE 8. CONTRACTS WITH OTHER DISTRICTS

Water Supply Contract

On January 29, 2004, the District entered into a long-term water supply contract with Harris County Municipal Utility District No. 23 (District No. 23) and purchased 174,038 gallons per day in capacity (gpd) from District No. 23’s water facilities to serve certain subdivisions located in the District. Operating costs are to be shared as defined in the agreement. The agreement was amended December 8, 2011 and August 26, 2013, to include additional land in the service area. During the current year, the District incurred $177,152 as its share of operating costs.

On September 28, 2006, the District entered into a 40-year water supply contract with the City of Houston (the City). Under the terms of the contract, the City will supply up to 60,000 gpd of water to the District to serve certain subdivisions. The District is currently entitled to receive 1,450,000 gallons per month and pays for such amounts whether or not they are taken. During the current year, the District incurred $66,260 in costs under the contract.

Sewage Disposal Contract

On January 29, 2004, the District entered into a long-term sewage disposal contract with District No. 23 and purchased 133,900 gpd in capacity from District No. 23’s sewer facilities to serve certain subdivisions located in the District. Operating costs are to be shared as defined in the agreement. The agreement was amended December 8, 2011 and August 26, 2013, to include additional land in the service area. During the current year, the District incurred $67,172 as its share of operating costs and $143,026 for capital costs.

On January 17, 2007, the District entered into a 40-year sanitary sewer service contract with the City. Under the terms of the contract, the City will provide up to 44,730 gpd of capacity in a wastewater treatment plant owned by the City to serve certain subdivisions located within the District. During the current year, the District incurred $64,107 in costs under the contract.


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NOTE 9. RISK MANAGEMENT The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the District carries commercial insurance. The District has not significantly reduced insurance coverage or had settlements which exceeded coverage amounts for the past three fiscal years. NOTE 10. INTERFUND PAYABLES AND RECEIVABLES The General Fund recorded a payable of $5,265 to the Debt Service Fund for the over transfer of maintenance tax collections and $7,278 for excess bond proceeds received, which were used to pay issuance costs of the bonds. NOTE 11. REFUNDING BOND SALE On December 20, 2018, the District closed on the sale of its Series 2018 Unlimited Tax Refunding Bonds in the amount of $1,125,000 to refund a portion of the Series 2011 bonds in the amount of $1,010,000. The refunding resulted in a gross debt service savings of $88,945 and a net present value savings of $62,397.


REQUIRED SUPPLEMENTARY INFORMATION

APRIL 30, 2019

See accompanying independent auditor’s report.

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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED APRIL 30, 2019

VarianceOriginal and PositiveFinal Budget Actual (Negative)

REVENUES Property Taxes 914,586$ 952,552$ 37,966$ Water Service 250,000 221,433 (28,567) Wastewater Service 275,000 273,632 (1,368) Penalty and Interest 6,500 16,535 10,035 Tap Connection and Inspection Fees 6,000 (6,000) Investment Revenues 6,500 22,190 15,690 Miscellaneous Revenues 4,875 4,875

TOTAL REVENUES 1,458,586$ 1,491,217$ 32,631$

EXPENDITURESServices Operations:

Professional Fees 68,500$ 76,199$ (7,699)$ Contracted Services 151,500 152,987 (1,487) Purchased Water Service 240,000 243,412 (3,412) Purchased Wastewater Service 292,000 274,305 17,695 Utilities 8,100 7,247 853 Repairs and Maintenance 61,250 63,968 (2,718) Other 122,900 76,179 46,721

TOTAL EXPENDITURES 944,250$ 894,297$ 49,953$

NET CHANGE IN FUND BALANCE 514,336$ 596,920$ 82,584$

FUND BALANCE - MAY 1, 2018 2,405,033 2,405,033

FUND BALANCE - APRIL 30, 2019 2,919,369$ 3,001,953$ 82,584$


SUPPLEMENTARY INFORMATION REQUIRED BY THE

WATER DISTRICT FINANCIAL MANAGEMENT GUIDE

APRIL 30, 2019

HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 SERVICES AND RATES



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

X Retail Water Wholesale Water X DrainageX Retail Wastewater Wholesale Wastewater Irrigation Parks/Recreation Fire Protection Security

X Solid Waste/Garbage Flood Control Roads

X Participates in joint venture, regional system and/or wastewater service (other than

emergency interconnect) Other (specify): ________________________________________________________

2. RETAIL SERVICE PROVIDERS a. RETAIL RATES FOR A 5/8” METER (OR EQUIVALENT):

Based on the rate order effective May 1, 2018.

Minimum

Charge

Minimum

Usage

Flat Rate Y/N

Rate per 1,000 Gallons over

Minimum Use

Usage Levels WATER: $ 13.33 1,000 N $ 4.51

$ 7.43 $ 2.86 $ 4.94

Between 1,001 and 3,000 3,001 to 4,000

4,001 to 12,000 12,001 and up

WASTEWATER: $ 23.12 3,000 N $ 8.81

$ 2.92 $ 3.86

3,001 to 4,000 4,001 to 5,000 5,001 and up

District employs winter averaging for wastewater usage? X Yes No

Total monthly charges per 10,000 gallons usage: Water: $42.43 Wastewater: $54.15 Total: $96.57




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2. RETAIL SERVICE PROVIDERS (Continued)

b. WATER AND WASTEWATER RETAIL CONNECTIONS: (Unaudited)

Meter Size

Total Connections

Active Connections

ESFC Factor

Active ESFCs

Unmetered 2 1 x 1.0 1

<¾” 579 579 x 1.0 579

1” 6 6 x 2.5 15

1½” x 5.0

2” 3 2 x 8.0 16

3” x 15.0

4” x 25.0

6” x 50.0

8” x 80.0

10” x 115.0

Total Water Connections 590 588 611

Total Wastewater Connections 580 578 x 1.0 578 3. TOTAL WATER CONSUMPTION DURING THE FISCAL YEAR ROUNDED TO

THE NEAREST THOUSAND: (Unaudited) Gallons pumped into the system: * Water Accountability Ratio: *

(Gallons billed and sold/Gallons pumped and purchased)

Gallons billed to customers: 46,252,000

* Purchases water from Harris County Municipal Utility District No. 23 and the City of Houston




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

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

Does the District have Operation and Maintenance standby fees? Yes __ No X 5. LOCATION OF DISTRICT:

Is the District located entirely within one county?

Yes X No County or Counties in which District is located: Harris County, Texas Is the District located within a city?

Entirely Partly Not at all X

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

Entirely X Partly Not at all ETJ’s in which District is located:

City of Houston, Texas. Are Board Members appointed by an office outside the District?

Yes No X


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 GENERAL FUND EXPENDITURES

FOR THE YEAR ENDED APRIL 30, 2019 PROFESSIONAL FEES:

Auditing 13,500$ Engineering 23,558 Legal 39,141

TOTAL PROFESSIONAL FEES 76,199$

PURCHASED SERVICES FOR RESALE:Purchased Water Service 243,412$ Purchased Wastewater Service 274,305

TOTAL PURCHASED SERVICES FOR RESALE 517,717$

CONTRACTED SERVICES:Bookkeeping 15,446$ Operations and Billing 28,399

TOTAL CONTRACTED SERVICES 43,845$

UTILITIES 7,247$

REPAIRS AND MAINTENANCE 63,968$

ADMINISTRATIVE EXPENDITURES:Director Fees 8,550$ Dues 945 Election Costs 5,191 Insurance 5,291 Office Supplies and Postage 28,618 Payroll Taxes 677 Travel and Meetings 2,676 Other 2,993

TOTAL ADMINISTRATIVE EXPENDITURES 54,941$

SOLID WASTE DISPOSAL 109,142$

OTHER EXPENDITURES:Laboratory Fees 14,497$ Permit Fees 2,102 Reconnection Fees 2,250 Regulatory Assessment 2,389

TOTAL OTHER EXPENDITURES 21,238$

TOTAL EXPENDITURES 894,297$


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 INVESTMENTS APRIL 30, 2019

AccruedInterest

Identification or Interest Maturity Balance at Receivable atFunds Certificate Number Rate Date End of Year End of Year

GENERAL FUNDTexSTAR XXXX2220 Varies Daily 272,165$ $ Certificate of Deposit XXXX3902 2.40% 09/09/19 131,156 431

TOTAL GENERAL FUND 403,321$ 431$

DEBT SERVICE FUNDTexSTAR XXXX3330 Varies Daily 2,229$ $ Certificate of Deposit XXXX4260 2.45% 10/09/19 107,240 144

TOTAL DEBT SERVICE FUND 109,469$ 144$

CAPITAL PROJECTS FUNDTexSTAR XXXX4440 Varies Daily 37,241$ - 0 - $

TOTAL - ALL FUNDS 550,031$ 575$


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 TAXES LEVIED AND RECEIVABLE


TAXES RECEIVABLE -MAY 1, 2018 14,391$ 15,292$ Adjustments to Beginning

Balance (8,320) 6,071$ (5,823) 9,469$

Original 2018 Tax Levy 934,068$ 560,441$ Adjustment to 2018 Tax Levy 32,707 966,775 19,624 580,065

TOTAL TO BEACCOUNTED FOR 972,846$ 589,534$

TAX COLLECTIONS:Prior Years (3,136)$ (2,195)$ Current Year 955,688 952,552 573,413 571,218

TAXES RECEIVABLE -APRIL 30, 2019 20,294$ 18,316$

TAXES RECEIVABLE BYYEAR:2018 11,087$ 6,652$ 2017 3,134 2,194 2016 146 106 2015 96 81 2014 91 108 2013 722 843 2012 634 654 2011 704 727 2009 2,082 3,933 2008 1,598 3,018

TOTAL 20,294$ 18,316$

Maintenance Taxes Debt Service Taxes


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 TAXES LEVIED AND RECEIVABLE


PROPERTY VALUATIONS:LandImprovementsPersonal PropertyExemptions

TOTAL PROPERTYVALUATIONS

TAX RATES PER $100VALUATION:Debt ServiceMaintenance

TOTAL TAX RATES PER$100 VALUATION

ADJUSTED TAX LEVY*

PERCENTAGE OF TAXESCOLLECTED TO TAXESLEVIED 98.85 % 99.63 % 99.98 % 99.99 %

0.80$

1,546,840$

22,673,850$ 121,382,39237,171,983

(13,033,037)

168,195,188$

22,632,020$ 121,196,14661,192,170

(11,665,453)

193,354,883$

0.30$ 0.50

0.35$ 0.50

0.85$

1,429,659$

2018 2017

1.05$

1,328,780$

0.48$ 0.57

0.40$ 0.55

21,325,771$ 96,378,75018,851,063

2015

(10,005,027)

126,550,557$

22,193,019$ 112,541,31332,636,010

(13,388,979)

153,981,363$

1,462,824$

0.95$

2016

* 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 rate per $100 of assessed valuation approved by voters on November 2, 2004.


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 LONG-TERM DEBT SERVICE REQUIREMENTS

APRIL 30, 2019

Due During Fiscal Principal Interest DueYears Ending Due September 1/

April 30 September 1 March 1 Total

2020 25,000$ 1,787$ 26,787$ 2021 30,000 638 30,638 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039

55,000$ 2,425$ 57,425$

S E R I E S - 2 0 1 1


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APRIL 30, 2019



2020 30,000$ 74,081$ 104,081$ 2021 30,000 73,294 103,294 2022 35,000 72,356 107,356 2023 35,000 71,306 106,306 2024 40,000 70,181 110,181 2025 35,000 69,013 104,013 2026 40,000 67,794 107,794 2027 40,000 66,469 106,469 2028 40,000 65,094 105,094 2029 45,000 63,578 108,578 2030 45,000 61,919 106,919 2031 50,000 60,138 110,138 2032 55,000 58,100 113,100 2033 55,000 55,900 110,900 2034 55,000 53,700 108,700 2035 60,000 51,400 111,400 2036 60,000 49,000 109,000 2037 65,000 46,500 111,500 2038 550,000 34,200 584,200 2039 580,000 11,600 591,600

1,945,000$ 1,175,623$ 3,120,623$

S E R I E S - 2 0 1 2


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APRIL 30, 2019



2020 200,000$ 163,250$ 363,250$ 2021 205,000 158,175 363,175 2022 210,000 151,950 361,950 2023 215,000 145,575 360,575 2024 230,000 138,900 368,900 2025 235,000 131,925 366,925 2026 240,000 124,800 364,800 2027 250,000 116,200 366,200 2028 260,000 106,000 366,000 2029 275,000 95,300 370,300 2030 280,000 84,200 364,200 2031 295,000 72,700 367,700 2032 305,000 60,700 365,700 2033 325,000 48,100 373,100 2034 335,000 34,900 369,900 2035 345,000 21,300 366,300 2036 360,000 7,200 367,200 2037 2038 2039

4,565,000$ 1,661,175$ 6,226,175$

S E R I E S - 2 0 1 5 R E F U N D I N G


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APRIL 30, 2019



2020 20,000$ 43,350$ 63,350$ 2021 5,000 42,975 47,975 2022 40,000 42,300 82,300 2023 40,000 41,100 81,100 2024 30,000 40,050 70,050 2025 35,000 38,900 73,900 2026 35,000 37,500 72,500 2027 40,000 36,000 76,000 2028 40,000 34,400 74,400 2029 40,000 32,800 72,800 2030 45,000 31,100 76,100 2031 45,000 29,300 74,300 2032 45,000 27,500 72,500 2033 45,000 25,700 70,700 2034 50,000 23,800 73,800 2035 55,000 21,700 76,700 2036 55,000 19,500 74,500 2037 460,000 9,200 469,200 2038 2039

1,125,000$ 577,175$ 1,702,175$

S E R I E S - 2 0 1 8 R E F U N D I N G


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APRIL 30, 2019

Due During Fiscal TotalYears Ending Total Total Principal and

April 30 Principal Due Interest Due Interest Due

2020 275,000$ 282,468$ 557,468$ 2021 270,000 275,082 545,082 2022 285,000 266,606 551,606 2023 290,000 257,981 547,981 2024 300,000 249,131 549,131 2025 305,000 239,838 544,838 2026 315,000 230,094 545,094 2027 330,000 218,669 548,669 2028 340,000 205,494 545,494 2029 360,000 191,678 551,678 2030 370,000 177,219 547,219 2031 390,000 162,138 552,138 2032 405,000 146,300 551,300 2033 425,000 129,700 554,700 2034 440,000 112,400 552,400 2035 460,000 94,400 554,400 2036 475,000 75,700 550,700 2037 525,000 55,700 580,700 2038 550,000 34,200 584,200 2039 580,000 11,600 591,600

7,690,000$ 3,416,398$ 11,106,398$

F O R A L L S E R I E SA N N U A L R E Q U I R E M E N T S


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 CHANGES IN LONG-TERM BOND DEBT FOR THE YEAR ENDED APRIL 30, 2019

BondsOriginal Outstanding

Description Bonds Issued May 1, 2018

Harris County Municipal Utility District No. 220Unlimited Tax Bonds - Series 2011 1,220,000$ 1,090,000$

Harris County Municipal Utility District No. 220Unlimited Tax Bonds - Series 2012 2,080,000 1,975,000

Harris County Municipal Utility District No. 220

Unlimited Tax Refunding Bonds - Series 2015 5,065,000 4,760,000

Harris County Municipal Utility District No. 220Unlimited Tax Refunding Bonds - Series 2018 1,125,000

TOTAL 9,490,000$ 7,825,000$

Tax andBond Authority: Refundig Bonds

Amount Authorized by Voters 25,000,000$

Amount Issued 9,480,000

Remaining to be Issued 15,520,000$

Debt Service Fund cash and investment balances as of April 30, 2019: 1,056,385$

Average annual debt service payment (principal and interest) for remaining termof all debt: 555,320$

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


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BondsOutstanding

Bonds Sold Principal Interest April 30, 2019 Paying Agent

The Bank of New YorkMellon Trust Company N.A.

$ 1,035,000$ 30,436$ 55,000$ Dallas, Texas


30,000 74,794 1,945,000 Dallas, Texas


195,000 167,200 4,565,000 Dallas, Texas


1,125,000 8,609 1,125,000 Dallas, Texas

1,125,000$ 1,260,000$ 281,039$ 7,690,000$

Retirements

Current Year Transactions


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 COMPARATIVE SCHEDULE OF REVENUES AND EXPENDITURES

GENERAL FUND - FIVE YEARS

2019 2018 2017REVENUES

Property Taxes 952,552$ 842,424$ 847,148$ Water Service 221,433 233,807 224,163 Wastewater Service 273,632 265,346 262,488 Penalty and Interest 16,535 12,110 12,369 Tap Connection and Inspection Fees 2,156 Investment Revenues 22,190 8,461 3,410 Miscellaneous Revenues 4,875 12,789 3,952

TOTAL REVENUES 1,491,217$ 1,374,937$ 1,355,686$

EXPENDITURESProfessional Fees 76,199$ 67,221$ 65,736$ Contracted Services 152,987 148,663 142,185 Purchased Water Service 243,412 205,533 421,528 Purchased Wastewater Service 274,305 124,797 101,343 Utilities 7,247 6,877 6,365 Repairs and Maintenance 63,968 64,193 69,270 Other 76,179 81,227 56,125 Capital Outlay



BEGINNING FUND BALANCE 2,405,033 1,728,607 1,235,473

ENDING FUND BALANCE 3,001,953$ 2,405,033$ 1,728,607$

Amounts


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2016 2015 2019 2018 2017 2016 2015

753,547$ 507,224$ 64.0 % 61.3 % 62.4 % 58.6 % 48.6 %235,659 221,027 14.8 17.0 16.5 18.3 21.2 268,490 242,329 18.3 19.3 19.4 20.8 23.2

7,797 7,382 1.1 0.9 0.9 0.6 0.6 12,115 54,858 0.2 0.9 5.3 1,538 881 1.5 0.6 0.3 0.1 0.1 9,065 10,447 0.3 0.9 0.3 0.7 1.0

1,288,211$ 1,044,148$ 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

57,734$ 64,187$ 5.1 % 4.9 % 4.8 % 4.5 % 6.1 %140,712 129,323 10.3 10.8 10.5 10.9 12.4 264,292 212,696 16.3 14.9 31.1 20.5 20.4 108,765 84,059 18.4 9.1 7.5 8.4 8.1

6,762 5,766 0.5 0.5 0.5 0.5 0.6 33,374 90,794 4.3 4.7 5.1 2.6 8.7 56,571 67,982 5.1 5.9 4.1 4.4 6.5

615,688 59.0

668,210$ 1,270,495$ 60.0 % 50.8 % 63.6 % 51.8 % 121.8 %

620,001$ (226,347)$ 40.0 % 49.2 % 36.4 % 48.2 % (21.8) %

615,472 841,819

1,235,473$ 615,472$

Percentage of Total Revenues


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 COMPARATIVE SCHEDULE OF REVENUES AND EXPENDITURES

DEBT SERVICE FUND - FIVE YEARS

2019 2018 2017REVENUES

Property Taxes 571,218$ 590,475$ 617,439$ Penalty and Interest 4,330 4,710 8,362 Interest on Investments 6,678 2,760 1,712 Miscellaneous Revenues

TOTAL REVENUES 582,226$ 597,945$ 627,513$

EXPENDITURESTax Collection Expenditures 23,710$ 20,196$ 24,207$ Debt Service Principal 250,000 245,000 235,000 Debt Service Interest and Fees 283,589 307,178 313,779 Bond Issuance Costs 78,929 Payment to Refunded Bond Escrow Agent


EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (54,002)$ 25,571$ 54,527$

OTHER FINANCING SOURCES (USES)Long-Term Debt Issued 1,125,000$ $ $ Payment to Refunded Bond Escrow Agent (1,026,889) Bond Discount (10,854) Bond Premium

TOTAL OTHER FINANCING SOURCES (USES) 87,257$ - 0 - $ - 0 - $


BEGINNING FUND BALANCE 1,035,166 1,009,595 955,068

ENDING FUND BALANCE 1,068,421$ 1,035,166$ 1,009,595$

TOTAL ACTIVE RETAIL WATERCONNECTIONS 588 586 585

TOTAL ACTIVE RETAIL WASTEWATERCONNECTIONS 578 577 576

Amounts


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2016 2015 2019 2018 2017 2016 2015

649,637$ 601,380$ 98.2 % 98.7 % 98.4 % 94.7 % 98.3 %34,978 5,440 0.7 0.8 1.3 5.1 0.9 1,441 1,881 1.1 0.5 0.3 0.2 0.3

3,094 0.5

686,056$ 611,795$ 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

42,619$ 18,943$ 4.1 % 3.4 % 3.9 % 6.2 % 3.1 %190,000 180,000 42.9 41.0 37.4 27.7 29.4 273,594 395,504 48.7 51.4 50.0 39.9 64.6 238,906 13.6 34.8 88,000 12.8

833,119$ 594,447$ 109.3 % 95.8 % 91.3 % 121.4 % 97.1 %

(147,063)$ 17,348$ (9.3) % 4.2 % 8.7 % (21.4) % 2.9 %

5,065,000$ $ (4,940,186)

117,719

242,533$ - 0 - $

95,470$ 17,348$

859,598 842,250

955,068$ 859,598$

586 575

577 566

Percentage of Total Revenues


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS

APRIL 30, 2019 District Mailing Address - Harris County Municipal Utility District No. 220 c/o Smith, Murdaugh, Little & Bonham, L.L.P. 2727 Allen Parkway, Suite 1100 Houston, TX 77019

District Telephone Number - (713) 652-6500 Board Members

Term of Office

(Elected or Appointed)

Fees of Office

for the year ended

April 30, 2019

Expense Reimbursements

for the year ended

April 30, 2019

Title

Jerry Homan 05/18 –

05/22 (Elected)

$ 1,800 $ -0- President/ Investment

Officer

Steve Agnew 05/16 –

05/20 (Elected)

$ 1,500 $ 272 Vice President

Steven Hudgins 05/18 –

05/22 (Elected)

$ 1,200 $ 62 Secretary

Greg Dubiel 05/16 –

05/20 (Elected)

$ 1,650 $ 147 Director

Peter Pedersen 05/18 –

05/22 (Elected)

$ 2,400 $ 1,745 Director

Notes: No Director has any business or family relationships (as defined by the Texas Water Code) with major

landowners in the District, with the District’s developers or with any of the District’s consultants.

Submission date of most recent District Registration Form: July 29, 2019. The limit on Fees of Office that a Director may receive during a fiscal year is $7,200 as set by Board

Resolution. Fees of Office are the amounts actually paid to a Director during the District’s current fiscal year.


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HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 220 BOARD MEMBERS, KEY PERSONNEL AND CONSULTANTS

APRIL 30, 2019 Consultants:

Date Hired

Fees for the year ended

April 30, 2019

Title Smith, Murdaugh, Little & Bonham, L.L.P. 10/14/03

$ 51,487

$ 21,166 $ 1,626

Attorney Bond Counsel

Delinquent Tax Attorney

McCall Gibson Swedlund Barfoot PLLC 03/23/15 $ 13,500

$ 1,500 Auditor

Bond Related Myrtle Cruz, Inc. 10/14/03 $ 18,996 Bookkeeper Edminster, Hinshaw, Russ and Associates, Inc. 10/14/03 $ 23,558 Engineer Rathman & Associates, L.P. 10/14/03 $ 15,563 Financial

Advisor Bill Russell 08/24/15 $ -0- Investment

Officer Water District Management Company, Inc. 05/21/12 $ 81,476 Operator David Patterson, RTA 11/19/03 $ 8,779 Tax Assessor/

Collector

water district management€¦ · services and rates 32-34 general fund expenditures 35 investments...

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