BAYBAY WATER DISTRICT

City of Baybay, Leyte

NOTES TO THE FINANCIAL STATEMENTS
CY 2010
(With Comparative Figures for 2009)
1. Agency Background
Baybay Water District (BWD) was created pursuant to PD 198, otherwise known as the
Provincial Water Utilities Act of 1973. It was formed through the passage of Sangguniang
Bayan Resolution No. 60, dated July 5, 1976 by the Sangguniang Bayan of the then
Municipality of Baybay. As of December 31, 2010, BWD is classified under medium
category having 6,575 service connections and/or active concessionaires.

2. Significant Accounting Policies

The BWD adopts the commercial system of accounting using the accrual method base
on the Commercial Practices Manual for Water Districts. The BWD adopts the straight-line
method of computing depreciation. The life expectancy of the fixed assets varies from five
(5) to fifty (50) years.

3. Utility Plant in Service

This includes organizational cost, land, reservoirs, intakes, springs, supply mains, water
treatment plant and equipment, building structures and improvements, tanks, transmission
and distribution pipes, water meters, office furniture and equipment, transportation and
communication equipment, tools, shop and garage equipment, hydrants and blow-offs,
laboratory equipment and machineries. Comparative figures are as follows:
Account

SL
Account
No.

Organization
Land and Land Rights
Collecting and Impounding Reservoir
Other Intakes
Springs
Supply Mains
Structure and Improvement (water
treatment plant)
Water Treatment Equipment
Structure and Improvement (transmission
and distribution)

301
306
312
313
314
316
331

352,358.27
523,377.50
567,391.57
3,070,907.17
4,321,523.59
272,172.80
30,000.00

352,358.27
523,377.50
567,391.57
3,070,907.17
4,321,523.59
272,172.80
30,000.00

332
341

965,807.40
1,203,432.37

965,807.40
1,203,432.37

2010

2009

Reservoir and Tanks

Transmission and Distribution Mains
Services
Water Meters
Meter Installations
Hydrants
Structure and Improvements (Gen. Plant)
Office Furniture/Fixture and Equipment
Transportation Equipment
Laboratory Equipment
Communication Equipment
Power Operated Equipment
Tools, Shop and Garage Equipment
Other General Plant
Total

342
343
345
346
347
348
371
372
373
375
376
377
378
379

372,923.70
17,507,609.64
9,590.39
715,155.22
76,540.53
175,397.43
1,697,002.57
4,084,806.22
2,678,784.91
252,951.20
116,403.10
8,500.00
820,111.30
1,459,065.95
P41,281,812.83

372,923.70
17,455,108.32
9,590.39
715,155.22
76,540.53
175,397.43
2,085,749.26
3,862,060.22
1,730,202.91
32,951.20
86,353.10
8,500.00
788,941.30
509,707.95
P39,216,152.20

Baybay Water District procured one unit of Mitsubishi Adventure for the calendar year 2010
through financing from Express Savings Bank amounting to P829,800.00 with monthly loan
amortization of P23,050.00.
BWD were recipient of one unit of portable water quality monitoring equipment from
LWUA at a cost-sharing scheme of 80% grant and 20% loan. BWD recorded only the loan
portion amounting to P220,000.00 in the books of accounts.
Significant changes in the balances of Structure and Improvement (Gen. Plant) and
Other General Plants accounts represent adjustments on erroneous recordings of renevotions,
improvements and major repairs of BWD main building, Engineering Office and
Administration building amounting P515,397.92.
4. Cash on Hand
This represents the undeposited collections on the last working day of the year, which is
deposited on the first working day of the following year. Comparative figures are as follows:
Account

Cash on Hand

2010
P31,988.39

2009
P61,649.89

2010

2009
51,977.10
101,497.01

5. Cash in Bank
This account consists of the following deposits:
Account
LBP-Ormoc Br.
PNB

Express Savings Bank

Land Bank of the Philippines-Baybay
Metrobank
LWUA-BWD Joint Account
Non-LWUA Initiated Fund
Total

1,000.00
100,456.29
10.55
149,670.41
29,189.54
P 280,326.79

281,846.82
342,723.72
145,656.04
11,045,460.00
P 11,969,160.69

6. Accounts Receivable - Customer

This account represents receivables from various concessionaires for services rendered
such as water sales, and other incidental services. Comparative figures are as follows:
Account
Accounts Receivable - Customer

2010
P 738,867.90

2009
P 679,031.75

7. Accounts Receivables- Others (Customers Loan)

This includes all other accounts receivable like receivable for installation cost and
services and customers loan in the form of materials. Comparative figures are as follows:
Account
Accounts Receivable- Customer

2010
P 426,774.39

2009
P 763,661.07

8. Advances to Officers and Employees

This account constitutes temporary cash advances given to officers and employees for
operation of the water district. The balance consists of the following:
Officer/Employees
1. Carlo S. Enriquez
2. Atty. Eliseo D. Saligumba
3. Jonathan N. Go
4. Isagani B. Enage
5. Armando O. Milan
6. Buenaventura Z. Flandez
7. Arnulfo Bolanio
8. Elsie O. Almario
9. Cyril Luis L. Arradaza
10. Engr. Quitin A. Lim
11. Manuel A. Jocson

Total

Designation
Former BOD
OGCC Employee
Member BOD
Storekeeper
Utilities/Customers
Asst. A
WEDO, ESD
Water Maintenance
Man
Secretary
General Manager
Engineer A
Clerk Processor

2010
10,000.00
10,000.00
2,726.55
448.80
6,460.00

2009
10,000.00
10,000.00
7,026.55
448.80
3,260.00

22,256.00
12,000.00

13,461.00
12,000.00

1,776.00
10,646.30
3,342.00
3,500.00
P83,155.65

1,776.00
5,892.06
P63,864.41

9. Materials and Supplies Inventory

This account consists of unissued materials and supplies kept in stock for future use of
the agency. Comparative figures are as follows:
Account

2010

Materials and Supplies Inventory

P 3,215,179.68

2009

P 4,120,006.77

The compositions of the account are as follows

Account

SL
Account
No.

Office Supplies
PMOS
Chemicals
Construction Materials and Supplies
Miscellaneous
Water Meters
Unserviceable Construction Materials and
Supplies
Total

131-1
131-3
131-4
131-5
131-6
131-7
131-5

2010

2009

160,035.65
18,350.00
41,982.50
2,129,533.51
555,637.00
286,737.97
22,903.05

162,791.46
26,260.00
35,833.75
2,377,413.04
103,938.50
1,390,866.97
22,903.05

P3,215,179.68

P4,120,006.77

Water Meter Inventory was adjusted to reflect those water meters issued to
concessionaires in past and present years.
10. Capital
Account
Capital Contribution-Government Grants
Other Paid-In Capital
Unappropriated Retained Earnings
Appropriated Retained Earnings

Total

2010
16,514,581.69
514,711.54
752,428.87
18,813,137.12
P36,594,859.22

2009
16,514,581.69
514,711.54
2,154,192.33
18,454,142.12
P21,018,687.70

Capital Contribution-Government Grants are consists of contributions by the Government and

other entities to the district. This include the first release of the Non-LWUA Initiated Funds
(NILF) approved per POW amounting to P 11,045,460.00.
Other Paid-In Capital include MTO share the cost of Hydrants, project cost at Brgy. Gaas,
Baybay City, project cost of Baybay Swimming Pool, Brandy Island and Brgy. Candadam.
Unappropriated Retained Earnings is consist of the balance of the accumulated earnings or
losses of the Water District. During the year, BWD recorded a net loss of P797,323.34. It also
transferred P1,964,744.23 for appropriation on Debt Service Reserve, Operation and Maintenance
Reserve, and Capital Reserve in the CY 2009 and P358,984.84 in the CY 2010.

Appropriated Retained Earnings includes the amount of retained earnings which was
appropriated or set aside for specific purpose such as Debt Service Reserve amounting to
P7,565,275.30; Operation and Maintenance Reserve totaling P7,565,275.30; and Capital Reserve that
amounts P3,682,586.52.

11. Loans Payable

Comparative figures are as follows:
Account

Loans Payable

2010

P 931,762.00

2009
None

Portable Water Quality Testing Equipment (interest -free)

Total
220,000.00
Application Fee
1,237.28
Total
221,237.28
Less: payment (P6,111 x 8 mos.May-Dec.2010)
plus application fee
50,125.28
Balance Payable until April 2013
171,112.00
Vehicle -Adventure ( interest 30% for the entire term)
Principal
829,800.00
Less payment (Oct-Dec. 2010 P 23,050 x 3)
69,150.00
Balance as of December 31, 2010
760,650.00
(Note: Interest paid in the amount of P 20,745.00 charged directly
to interest expense at P6,915.00 per month).
12. Accounts Payable Others
This account consists of all unpaid obligations of the BWD payable within one year
from the balance sheet date. It also includes amount due to the Local Government Unit for
their share in the Districts income from the use of the national wealth per BWD Board
Resolution and LGU Resolution citing Articles 386-388 of the Local Government Code.
The account is broken down as follows:
Account

1. Hilongos Water District

0 Provincial Government of Leyte
3. Municipal Government of Baybay
0 Barangay Patag
1
Barangay Villa Mag-aso
2 Reservoir Rental

2010
22,500.00
235,890.52
324,878.54
151,543.21
44,935.69
800.00

2009
22,500.00
235,890.00
235,709.76
105,076.38
22,049.02
4,000.00

4
5
6
7

GSIS
Philhealth
Electric Bill for Dec. 2010
Telephone Bill for Dec. 2010
Carigara Water District
Electric Bill for Dec. 2010
Gorre excess turn-over

Total

16,138.41
325.00
24,354.23
7,841.53

13,969.57
62.50
9,513.00

24,354.23
P829,413.93

206.80
P648,770.23

13. Customers/Guaranty Deposit

This account pertains to the guaranty deposits made by concessionaires before service
connections including meter deposits as follows:
Account
Guaranty Deposits
Meter Deposits

2010
287,903.52
282,474.95
P570,378.47

Total

2009
304,983.52
323.988.35
P628,971.87

Changes in balances are charges in the Customers/Guaranty Deposits for the partial
payments of installation of new water meters in replacement of damaged water meters.
Statement of Cash flow
State of Cash Flow represents the movement of money into or out of a business, project,
or financial product. The Operating Cash Flows includes the Cash received or expended as a
result of the company's internal business activities. The Investing Cash Flows includes the
Cash received from the sale of long-life assets, or spent on capital expenditures. The
Financing Cash Flows includes the cash received from the issue of debt and equity, or paid
out as dividends, share repurchases or debt repayments.
The detailed amount appeared in the Statement of Cash Flow includes the followings:
Particulars

CY 2010

Note 14 Business Income

Collection of Water Bills
Direct Sales of Materials
TOTAL

19,641,517.06
898,402.62
20,539,919.68

Note 15 Other Income

Miscellaneous Service Revenues
Miscellaneous Non-Operating Revenues
Interest Revenues

174,615.01
36,807.61
13,401.27

CY 2009
18,662,563.87
1,533,673.27
20,196,237.14
213,654.22
19,310.05
13,149.02

145,303.60
5,017.60
375,145.09

316,595.03
62,789.25
625,497.57

62,958.51
52,541.55
115,500.06

41,433.39
65,089.83
106,523.22

Note 17 Maintenance and other operating expense

Training Expenses
12,984.65
Operation and Maintenance Expenses
7,477,038.93
Board Remunerations
1,233,345.86
Franchise Tax
366,562.41
TOTAL
9,089,931.85

65,368.17
8,510,246.72
1,068,853.70
350,886.17
9,995,354.76

Revenues from Sinking Fund and Other Funds

Meter Rentals
TOTAL
Note 16 Other Receipts
Refund from Cash Advances
Other Receipts
TOTAL

Note 18 Other disbursements

Advances to Officers and Employees
Other Payments
TOTAL

159,262.88
113,511.28
272,774.16

185,108.89
20,046.00
205,154.89

Note 19 Purchase/Acquisitions of property, plant and equipment

Construction Work in Progress
131,315.07
Construction Work in Progress (NLIF)
11,016,270.48
Utility Held for Future Use (Skynet)
8,120.00
Capital Expenditures
216,544.50
TOTAL
11,372,250.05

308,012.44
476,155.92
784,168.36

Note 20 Financial Expenses

Interest expenses
Bank Charges/ Cost of Checkbooks
TOTAL

107,544.00
3,830.00
111,374.00

75,357.00
5,526.00
80,883.00

21. Operating Revenues

This account pertains to water sales/revenues received from furnishing water utility
services and other incidental services. This also includes revenues from rent of water meters
and other miscellaneous service revenues. Comparative figures are as follows:
Account
Metered Sales to General Customers
Miscellaneous Service Revenues
Penalty Charges
Meter Rentals

Total

2010
19,815,288.40
239,866.68
663,970.60
4,322.00
P21,613,614.29

2009
18,551,918.85
394,846.57
642,201.00
59,976.00
P21,018,687.70

Miscellaneous Service Revenues include revenues for miscellaneous services rendered

to customers such as fees for changing or reconnection services, inspection fee, repair, testing
and installation of meters and other special services rendered to customers like notarial fees
for new concessionaires.
22. Operating Expenses

This account pertains to expenses necessary for the regular operation of the water
districts. This include Personal Services expenses for basic pay, allowances, bonus, cash
gifts, incentives and benefits and other personnel benefits of officers and employees of
BWD. Maintenance and Operating Expenses includes traveling and training expenses,
supplies and materials expenses, utility expenses, repairs and maintenance and other
miscellaneous expenses. Comparative figures are as follows:
Account
Operating Expenses
Personal Services (Operation)
Maintenance Expenses
Personal Services (Maintenance)
Depreciation Expense

Total

2010
10,0 66,955.79
5,213,252.08
992,070.94
3,872,415.83
1,468,919.65
P21,613,614.29

2009
15,077,321.70
4,512,617.91
P21,018,687.70

Payments for Personal Services in the CY 2009 were presented as expenses for
Operation and Maintenance. These were presented as separate item in the Financial
Statement on CY 2010.
Changes in balances in the Operating Expenses represent increased in salaries and 13th
month pay of BWD personnel.
23. Project Funding (1st Release)
This project funding in the amount of P 11,045,460.00 was the first release of the NonLWUA Initiated Funds (NILF) approved per POW in the amount of P25,000,000.00 and per
Memorandum of Understanding dated December 17, 2009 on a 50% - 50% loan-grant mix
with the loan portion to be amortized for a minimum of 10 years and a maximum of 40 years
depending on the loan evaluation by LWUA, interest free.