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TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
FINANCIAL STATEMENTS AS OF DECEMBER 311 1981 AND 1980
TOGETHER WITH
AUDITORS ' REPORT
'p7entative & Preliminary
For Discussion Purposes Only
To the Board of Directors of
Truckee-Donner Public Utility District :
We have examined the balance sheets of Truckee-Donner
Public Utility District ( a political subdivision of the State of
California) as of December 31 , 1981 and 19801 and the related
statements of net revenue and funds provided for additions to utility
plant for the years then ended. Our examinations were made in
accordance with generally accepted auditing standards and,
accordingly , included such tests of the accounting records and such
other auditing procedures as we considered necessary in the
circumstances .
As discussed further in Note 6 to the accompanying
financial statements , the District is a party in a legal action which
seeks damages in excess of $100 million from various defendants ,
including the District . The ultimate outcome of this legal action
and the effect upon the District , if any , cannot be determined at
this time .
In our opinion , subject to the effect of any adjustments
that might have been required had the outcome of the legal action
referred to in the preceding paragraph been known , the financial
statements referred to above present fairly the financial position of
Truckee-Donner Public Utility District as of Decemb r 31 , 1981 and
ntative & Preliminary .
For Discussion PurposeS only
jD
_z_
1980, and the results of its operations , and funds provided for
additions to its utility plant for the years then ended, in
conformity with generally accepted accounting principles applied on a
100 ~ cons stent basi s .
Our examination was made for the purpose of forming an
opinion on the basic financial statements taken as a whole . The
combining statement of departmental operations is presented for
purposes of additional analysis and is not a required part of the
basic financial statements . Such information has been subjected to
the auditing procedures applied in the examination of the basic
financial statements and, in our opinion , subject to the effect of
any adjustments that might have been required had the outcome of the
legal action discussed above been known , is fairly stated in all
material respects in relation to the basic financial statements taken
as a whole.
March 26, 1982
'Mmit.-�t i vo PrrAillinaryps
1 ` P n
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
BALANCE SHEETS -- DECEMBER 31, 1981 AND 1980
ASSETS CONSUMERS' EQUITY AND LIABILITIES
1981 1980 1981 1980
UTILITY PLANT, at cost: CAPITALIZATION:
Plant in service- Consumers' equity employed in the business-
Electric $3,122,465 $2,896,467 Balance, beginning of year $31,038,506 $2,557,531
Water 1,662,228 1,237,169 Net revenue for the year 456,766 480,975
---------- ----------
---------- ----------
540784,693 S4,133,636 Total consumers' equity $3,495,272 $3,038,506
Less - Accumulated depreciation 2,306,183 2,153,202 -___--_--- -____-----
Long-term debt (Note 4)-
Net plant in service $2,478,510 $1,980,434 REA bonds S 272,574 S 297,595
Installment note payable 155,000 -
Note payable to Sierra Pacific Power
Construction work in progress 1,188,702 914,139 Company - 9,067
Electric acquisition adjustments 1,010 1,774 Sewer assessments payable 7,081 13,750
Net utility plant $30668,222 $2,896,347 Total long-term debt $--434,655 S -320,412
Total capitalization $3,929,927 $3,358,918
RESTRICTED FUNDS (Note 3) $1,319,073 $1.026,798 -_-------_ ----______
---------- ---------- CURRENT LIABILITIES:
f CURRENT ASSETS: Accounts payable S 728,221 S 631,070
Cash Promissory note (Note 5) 244,836 247,270
S 460,205 S 439,917 Bonds payable (Note 5) 265,500 -
Accounts receivable - consumer, less Deferred income - standby fees 49,028 52,981
bad debt reserves of $39,831 in 1981 Consumer deposits 87,813 57,393
and $24,563 in 1980 409,089 374,309 Accrued interest 141073 10.223
Accounts receivable - standby fees and ether, Accrued liabilities 94,849 88,120
less bad debt reserves of $5,125 in 1981 Current maturities of long-term debt 339044 34,468
and S5,343 in 1980 128,984 127,462 ---___---_ _-_-__----
Inventory, at average cost 131,035 154,390 $1 517,364 S1,121,525
Interest receivable, prepaid insurance ---------- _ _
and other 46,475 60,853 CONTINGENCIES (Note 6) -
S1,175,788 $1,156,931 CONSTRUCTION ADYANCES (Note 3) S 715,792 S 599,633
$6,163,093 $5,080,076 S6,163,083 S5,080,016
The accompanying notes are an integral part of these financial statements.
'-or DJscuss�o ���
_ n Purpoc%
Only
-- j
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
STATEMENTS OF NET REVENUE
FOR THE YEARS ENDED DECEMBER 31 , 1981 AND 1980
1981 1980
OPERATING REVENUES :
Electric $39,8299, 585 $39 509 , 568
Water 5849285 4209,610
---------- ----------
$424139,870 $3 ,930 ,178
- - -- ----
OPERATING EXPENSES : -- - - -
Purchased power $23, 8819, 263 $2 557 863
Transmi s s i on 93 ,143 7311425
Distribution 2763, 257 1949390
Consumer accounts 2433,890 1919467
Administrative and general 424,844 3650657
Depreciation 144 ,160 131 ,069
Other 12 , 175 -
---------- ----------
$4 , 0759732 $3, 5131871
----------
Net operating revenue $ 3389,138 $ 416307
OTHER INCOME :
Interest income 2121319 1512778
Gain on sale of land 26 3,562 -
Other, net (180) ( 1 , 347 }
---------- ----------
Net revenue before interest
expense $ 5761,839 $ 5669738
INTEREST EXPENSE 1209073 8510763
---------- ----------
Net revenue $ 4563,766 $ 4809,975
The accompanying notes are an integral
part of these financial statements .
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
STATEMENTS OF FUNDS PROVIDED FOR ADDITIONS TO UTILITY PLANT
FOR THE YEARS ENDED DECEMBER 31 , 1981 AND 1980
1981 1980
FUNDS PROVIDED INTERNALLY :
Operations-
Net revenue $ 4562766 $ 4805975
Depreciation expense not requiring
,a current use of funds 1445160 131 , 069
Other 99584 ( 31,939 )
Funds provided by operations $ 610 , 510 6082105
Deduct-
Reductions in long- term debt (405 757 ) (322 357 )
Additions to restricted funds (292 ,275 ) (353 9193 )
- ---------
Net funds provided internally $ 277 ,478 $ 222 555
--------- ---------
FUNDS PROVIDED FROM EXTERNAL SOURCES :
Advances utilized for construction $ 1169160 $ 2209023
Installment note 1552.0-00 -
$ 271 , 160 $ 2209023
--------- ----- ----
FUNDS PROVIDED FROM NET CHANGE IN
WORKING CAPITAL (Note 7 ) $ 376 , 982 $ 2959007
Funds provided for additions - - -
to utility plant $ 925, 620 $ 737 , 585
The accompanying notes are an integral
part of these financial statements .
kip
Furpoa3z; Only
r�
i
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31 , 1981 AND 1980
1 . Summary of Significant Accounting Policies
Organization -- The Truckee-Donner Public Utility
District (the District) was formed and operates under the State
of California Public Utility District Act to provide electric
and water service to a portion of Nevada County described as
Truckee and Donner Lake. The District is exempt from payment of
federal and state income taxes .
Depreciation. — The District provides for depreciation
on the historical cost of utility plant on a straight-line basis
at rates in accordance with the Rural Electrification
Administration Bulletin 181- 1 . The average annual composite
rates were 4. 0% in both 1981 and 1980.
Retirements of utility plant and the related costs of
removal and salvage are charged to accumulated depreciation .
The costs of replacement of property units are charged to
plant. Repair and maintenance costs are charged to expense .
Revenues -- Revenues consist of billings to consumers
as meters are read on a cycle basis throughout each month .
Services provided to municipal entities without charge are not
reflected in operating revenues .
.&�,.-
)01
-2-
Pension Plan -- The District maintains a
noncontributory defined benefit pension plan covering
substantially all employees who have at least one year of
s e r v i ce . It is the District ' s policy to fund pension costs as
accrued, and contributions for 1981 and 1980 amounted to $44 , 589
and $34 ,063, respectively . The present value of accumulated
plan benefits and net assets available for these benefits was
last determined as of December 31 , 1980. The weighted average
assumed rate of return used in determining the present value of
accumulated plan benefits was 6% for both 1981 and 1980.
1981 1980
Actuarial present value of accumulated
plan benefits:
Vested $ 54,108 $ 395491
Nonvested 7,802 49817
$ 615910 $ 44,308
Net assets available for benefits $163,163 $1143,740
2 . Related Party Transactions
A director of the District is also a stockholder and
organizer of a bank with which the District conducts business .
The District maintains a checking account with the bank , and has
a loan in the form of the installment note payable (as described
in Note 4 ) . During 1981 , the District also maintained a time
deposit of $100,000 for 60 days at 1 5 .37% interest with the
bank .
rtt r
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3. Restricted Funds
The District has collected and restrictively deposited
funds for future uses as follows :
December 31, 1981
------------------------
Restricted Construction
Funds Advances
Dart Industries Water Agreement -
the District has collected $40
per lot for future water source
and storage facilities in the
developers' project $ 314,759 $3142759
Dart Industries Water Services
Settlement - the District has
collected funds for anticipated
future repairs of water lines
constructed by Dart Industries 180,096 190,696
Facilities fees collected from
customers for future procurement
of source and storage 629036 732871
Portion of connection fees collected
from customers for the future
purchase of water meters 109,756 110,817
---------- --------
Other restricted funds- $ 6663647 $6905143
Loan principal and interest fund -
i n accordance with loan agree-
ments, principal and interest
payments are to be placed on
deposit until payment is due-
REA 219,580 -
Sierra Pacific Power Company 205804 -
Promissory note proceeds - placed
in trust to be used for specific
water construction projects 89367 _
Martis Valley Substation
restricted by the District to
be used for completion of '
construction 262,536 -
FMHA Revenue Note and Reserve
Funds - water operating margins
plus depreciation held in
reserve in accordance with the
l oan agreement 2459807 -
Consumer deposits and other 935332 -
--------
,:.� < r�z�• r� �� ;.,�, e�{{�e.� r y $1,319,073 $690 5143
u
}
-4-
4. Long-Term Debt
REA bonds , secured by pledge of all assets , are as
follows :
1981 1980
First series 2% bonds, payable in
annual amounts varying from $13,000
to $14,000, in accordance with
sinking fund requirements, balance of
$14,000 due July 1994 $172,000 $185,000
Second series 2% bonds, payable in
annual amounts varying from $3,000
to $5,000, in accordance with
sinking fund requirements, balance
of $6,000 due May 2002 825000 852000
Third series 2% bonds, net of undrawn
funds of $65,426, payable in annual
amounts varying from $3,000 to
$6,000, in accordance with sinking
fund requirements, balance of
$8,000 due May 2004 37,574 40,574
Less - Current maturities (191,000) (12,979)
Total REA bonds $2729574 $297,595
-------- --------
-------- --------
.-a-
The installment note payable is due in monthly
installments through December 1 , 1988. It was issued
December 4 , 1981 at 11% interest per annum, with the interest
rate to be adjusted annually on the announcing date of the note
issuance.
The note payable to Sierra Pacific Power Company is
due in semiannual installments , including interest, at a rate of
4. 68/0. Final payment of $9, 067 is due March , 1982. The net
revenues ( as defined) of the Donner Lake Electr=, c System are
pledged as security .
-5-
The sewer assessments are payable over a 20-year
period, plus interest at 7%, to Nevada County , California .
Final payment is due in 1990.
5. Obligations Reclassified As Current
The promissory note payable to the United States of
America , Farmers ' Home Administration is due in 39 annual
installments of principal and interest of $14, 800. The interest
rate is 5% per annum. The net revenues (as defined ) of the
District' s water system are pledged as security .
The bonds payable to the United States of America ,
Farmers ' Home Administration are due each October 1 as follows :
Years Amount
1982 $ 12500
1983 through 2003 52000
2004 through 2013 105000
2014 through 2018 152000
2019 through 2020 209, 000
The interest rate i s 5% per annum, payabl e semi -
annually . The net revenues ( as defined) of the District' s water
system are pledged as security .
The Indentures , which secure the promissory note and
bonds , require the District to establish and maintain rates and
charges to produce net revenues ( as defined) equal to not less
than 1 . 2 times the aggregate amount of the principal and
interest due within the next 12 months . In addition , they
require the District to establish separate special accounting
CJ
.
1 .I
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-6-
funds . Since the promissory note and bonds were issued, the
District has not met and fulfilled the requirements of certain
Indenture covenants . In the event of a default , the holder of
., not less than 66-2/3% of the aggregate principal amount shall be
entitled, upon notice in writing to the District , to declare the
principal ( $514 ,272 ) due and payable immediately .
As a result of the District' s failure to meet certain
of the Indenture covenants , the total amount of these
obligations has been classified as current liabilities in the
financial statements .
6. Contingencies - Dart Industries Water
Agreement and Related Lawsuits
In 1970, an agreement was signed between the District
and Dart Industries for the purpose of providing water service
to a Dart subdivision. The agreement required Dart to construct
00011, water source and storage facilities at Donner Lake . In
December, 1975, subsequent to completion of the facilities ,
ownership was transferred to the District for future maintenance
and operation. The Attorney General of the State of California
has filed suit against the District and Dart to restrain them
from using Donner Lake as a water source. Since this action
claims no monetary damages , the District has no liability
resulting from this action.
In a separate action related to the Dart subdivision ,
a homeowners ' group filed suit against Dart , claiming amounts in
:. ta..-u4,e �r�r ie a�..�RY {~�3_...-,� i• .yr,r
• -7-
excess of $100 million , and Dart , in turn , filed suit against
the District and others , seeking indemnity for all such
claims . The outcome and potential impact on the District cannot
presently be determined.
7 . Changes in Net Working Capital
The changes in accounts classified as current assets
and current liabilities are as follows :
Year Ended December 31
----------------------
1981 1980
Working capital increase (decrease) in-
Cash $ 20,288 $(4619054)
Receivables 363,302 599565
Inventory (232355) (75554)
Other current assets (149,378) 179450
Accounts payable (972151) 1319677
Bonds (2653500) -
Promissory Note 210434 29321
Deferred income 39953 2,442
Consumer deposits (309420) (149340)
Other current liabilities (9 9155) (2510514)
--------- ---------
$(376,982) $(295,007 )
AC.t>,
1
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
COMBINING STATEMENT OF DEPARTMENTAL OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1981
Total Eliminations Electric Water
OPERATING REVENUE $4,413,870 $ 132,558 $3,9619941 $584 9487
OPERATING EXPENSES:
Purchased power $29881,263 $ - $298819263 $ -
Transmission 933,143 (1201,300) - 2139443
Distribution 2769257 - 2582233 181024
Consumer accounts 2431890 - 210,279 331611
Administrative and general 424,844 (29488) 3069971 1209361
Depreciation 1449160 - 1009903 431257
Other 129175 (99770) 212945 -
---------- --------- ---------- --------
$490759732 $(132,558) $3317791594 $4281696
---------- --------- ---------- --------
Net operating
revenue $ 3389138 $ - $ 1821P347 $1559791