HomeMy WebLinkAbout2005-06-15 Agenda Packet - Board (11) Agenda Item #
Public Utility District
Memorandum
To: Board of Directors
From: Peter Holzmeister
Date: June 10, 2005
Subject: Audit report for 2004
Why this matter is before the board: This matter involves a presentation of the
draft audit report of the financial statements of the District for 2004. The auditors
report directly to the board.
History: The board retained KPMG to audit the financial statement of the
District. The audit team spent time in the District office reviewing our records and
has now prepared a draft audit report.
New information: Attached is a copy of the draft audit report. Representatives
of KPMG will be present at the board meeting to help discuss the report and
answer questions.
Recommendation: The board may choose to accept the report at the
conclusion of the presentation, or may ask KPMG to make edits to the report and
submit it at a future meeting.
DRAFT 6/3/2005 10067 POR WP
❑ Spell checked
❑ Changes checked
Close to final?—Proofing/editing assistance is available through
Karla Peck in the L.A. office. Contact Vicky or Josh for details.
*Submit for Proof/Edit? ❑ Yes Date:
(Minimum 2-day turnaround)
*Document can only be submitted once and becomes the exclusive property of
NDPPS upon its return(i.e.no editing by non-NDPPS personnel).
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Financial Statements
December 31, 2004 and 2003
(With Independent Auditors' Report Thereon)
DRAFT 6/3t2005 8:55 AM�
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Management's Discussion and Analysis
December 31,2004 and 2003
As financial management of the Truckee Donner Public Utility District, we offer readers of these financial
statements this narrative overview and analysis of the financial activities of the District for the years ended
December 31, 2004 and 2003. This discussion and analysis is designed to assist the reader in focusing on the
significant financial issues, provide an overview of the District's financial activity and identify changes in the
District's financial position.
We encourage readers to consider the information presented here in conjunction with that presented within the
basic financial statements. The reader should take time to read and evaluate all sections of this report, including
the footnotes and other supplementary information that is provided, in addition to this MD&A.
Financial Highlights
• The District's capital assets, net, increased $4.9 million (or 8%) from $61.3 million at December 31, 2003
to $66.1 million at December 31, 2004, primarily due to the infrastructure constructed for a new
development within the Truckee Donner Public Utility District's service area.
• The District's total net assets decreased by $1.1 million (or 5.2%) from $20.5 million at December 31,
2003 to S19.4 million at December 31, 2004. Decrease is due to additional depreciation expense, interest
expense and capital contributions in the current year.
• Operating revenues increased $2.2 million (or 9.9%) from $22.0 million for the year ended December 31,
2003 to $24.2 million for the year ended December 31, 2004, primarily due to electric and water rate
increases and customer growth. Non-operating revenues/expenses decreased $5.9 million from 2003,
primarily from gains on the sale of capital assets recognized in 2003, and increased interest expense in
2004 related to the financing of S26 million for the IDACORP Energy contract settlement. The District
began to receive wholesale power from Constellation Power in April 2003, under a new power contract.
• Operating expenses of the District increased by $2.7 million (or 16.0%) from $16.7 million during 2003 to
$19.3 million during 2004, due primarily to increased purchased power costs due to growth and increased
depreciation expense.
• During 2004, the District entered into long term financing with the California State Revolving Fund in the
amount of$9.0 million for the financing of the replacement of the Donner Lake water system. The District
also issued $15.4 million, in Mello Roos bonds to finance infrastructure for a new development within the
Truckee Donner Public Utility District's service area. Approximately $1.3 minion in electric, water and
telecommunications infrastructure, was completed and contributed to the District to operate and maintain.
The Mello Roos bonds represent a land secured financing and are not payable from or secured by any
District assets. The balance of the Mello Roos bond proceeds was used to finance public agency
infrastructure, to fund reserve and prepaid interest funds and to pay closing costs.
Overview of the Financial Statements
This report includes Management's Discussion and Analysis, the Independent Auditors' Report, the Basic
Financial Statements,(which includes the notes to the financial statements), and Supplementary Information.
I (Continued)
DRAFT 6t3l2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Management's Discussion and Analysis
December 31,2004 and 2003
Required Financial Statements
The financial statements of the District are designed to provide readers with a broad overview of the District's
finances similar to a private-sector business. They have been prepared using the accrual basis of accounting in
accordance with accounting principles generally accepted in the United States of America (GAAP). Under this
basis of accounting,revenues are recognized in the period in which they are earned and expenses are recognized
in the period in which they are incurred, regardless of the timing of related cash flows. These statements offer
short- and long-term financial information about the District's activities.
The Balance Sheet presents information on all of the District's assets and liabilities and provides information
about the nature and amounts of investments in resources (assets) and the obligations to District creditors
(liabilities). It also provides the basis for computing rate of return, evaluating the capital structure of the District
and assessing the liquidity and financial flexibility of the District.
All of the current year's revenues and expenses are accounted for in the Statement of Revenues, Expenses, and
Changes in Net Assets. This statement provides a measurement of the District's operations over the past year and
can be used to determine whether the District has successfully recovered all its costs through its rates and other
charges and to also analyze profitability and credit worthiness.
The Statement of Cash Flows provides relevant information about the District's cash receipts and cash payments
during the reporting period. This statement reports cash receipts and cash payments resulting from operating,
non-capital financing, capital and related financing and investing activities. When used with related disclosures
and information in the other financial statements, the statement of cash flows should provide insight into (a) the
District's ability to generate future net cash flows, (b)the District's ability to meet its obligations as they come
due, (c)the District's needs for external financing, (d)the reasons for differences between operating income and
associated cash receipts and payments and (e)the effects on the District's financial position of both its cash and
its noncash investing, capital and financing transactions during the period. The changes in cash balances are an
important indicator of the District's liquidity and financial condition.
Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the basic financial statements. This includes but is not limited to,
significant accounting policies, significant financial statement balances and activities, material risks,
commitments and obligations and subsequent events, as applicable.
2 (Continued)
..................... .
DRAFT 6!3/2D05 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Management's Discussion and Analysis
December 31, 2004 and 2003
District Highlights
The District's total net assets at December 31, 2004 were $19.4 million, a decrease of $1.1 million (or 5 2%)
from December 31, 2003, Total assets at December 31, 2004 increased $14.1 million (or 14.8%), and total
liabilities increased $15.2 million (or 20.3%) from December 31, 2001 The District's total net assets at
December 31, 2003 were $20.5 million, an increase of$8.3 million (or 67.8%) from December 31, 2002, Total
assets at December 31, 2003 increased $18.3 million (or 23.7%), and total liabilities increased $10.0 million (or
15.4%)from December 31, 2002. The analysis below focuses on the District's net assets.
Condensed Assets,Liabilities, and Net Assets
Increase
(decrease) % change
Assets 2004 2003 2002 2004-2003 2004-2003
Current assets $ 10,075,943 9,083,218 8,843,881 992,725 10.9%
Non-current assets:
Capital assets,net 66,143,569 61,269,615 51,273,932 4,873,954 8.0%
Restricted assets 30,041,748 21,680,215 15,674,364 8,361,533 38.6%
Other long-term assets 3,289,004 3,378,430 1,363,510 (89,426) (2.6)%
Total assets $ 109,550,264 95,411,478 77,155,687 14,138,786 14.8%
Liabilities and Net Assets
Current liabilities $ 8,754,210 15,789,052 40,270,464 (7,034,842) (44.6)%
Non-current liabilities:
Long-term debt,net of current
portion 75,062,146 53,589,753 18,851,345 21,472,393 40.1%
Deferred revenue 6,311,569 5,537,062 5,8M769 774,507 14.0%
Total liabilities 90,127,925 74,915,867 64,938,578 15.212,058 20.3%
Net assets:
Invested in capital assets,net
of related debt 24,870,432 26,304,401 25,242,006 (1,433,969) (5.5)%
Restricted for debt service 14,183,378 13,731,924 13,751,948 451,454 3.3%
Restricted for other 2,475,775 2,317,447 716,759 158,328 6.8%
Unrestricted (22,107,246) (21,858,161) (27,493,604) (249,085) LI%
Total net assets 19,422,339 20,495,611 12,217,109 (1,073,272) (5.2)%
Total liabilities and net
assets $ 109,550,264 95,411,478 77,155,687 14,138,786 14.8%
The increase in restricted assets at December 31, 2004 is due primarily to the reserve funds restricted for the
Mello Roos community facilities district bonds. The increase in restricted assets at December 31, 2003 from
December 31, 2002 is due primarily to the reserve funds restricted for the 2003A and 2003B series electric
revenue bonds.
3 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Management's Discussion and Analysis
December 31,2004 and 2003
The overall increase of$22.3 million in 2004 from 2003 in bonds and notes payable, including current maturities,
is due primarily to the issuance of$15.4 million in Mello Roos community facilities district bonds, secured by
land and used to finance capital infrastructure for a new development within the District's service area and
$9.0 million borrowed from the state revolving fund to finance improvements to the District's water service. The
new debt was partially offset by the principal portion of debt service payments on revenue bonds and principal
payments on various notes payable during the year. The overall increase of$36.3 million in 2003 from 2002 in
bonds and notes payable, including current maturities, is due primarily to the issuance of$26.3 million in 2003A
and 2003E series electric revenue bonds,used to pay the District's purchase power settlement contract,and$12.4
million in Mello Roos community facilities district bonds, secured by land and used to finance capital
infrastructure for a new development within the District's service area. These increases were partially offset by
the principal portion of debt service payments on revenue bonds, the payoff of$1.8 million in revenue bonds and
principal payments on various notes payable during the year. Likewise, current liabilities decreased in 2003 from
2002 with the payment of the purchased power contract settlement.
Net assets invested in capital assets, net of related debt, consist of capital assets, net of accumulated depreciation,
reduced by the amount of outstanding indebtedness attributable to the acquisition, construction or improvement
of those assets. When there are significant unspent bond proceeds, the portion of related debt is not to be
included in the calculation of this item. Instead, that portion of the debt is included in the net assets restricted for
capital projects component as an offset to the related unspent bond proceeds.
Net assets restricted for debt service represents amounts restricted for payments related to outstanding revenue
bonds.
The District had income before capital contributions of $2.8 million and $9.3 million for the years ended
December 31, 2004 and 2003, respectively and a net loss before capital contributions and special item of$915
thousand for the year ended December 31, 2002. Changes in the District's net assets can be determined by
reviewing the following Condensed Revenues, Expenses, and Changes in Net Assets for the year.
4 (Continued)
DRAFT 6/3l2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Management's Discussion and Analysis
December 31, 2004 and 2003
Condensed Revenues, Expenses,and Changes in Net Assets
Increase
(decrease)
2004 2003 2002 2004-2003
Sales to consumers $ 22,778,999 20,765,148 18,610,340 2,013,851
Other operating revenues 1,392,029 1,224,277 1,071,936 167,752
Total operating revenues 24,171,028 21,989,425 19,682,276 2,181,603
Operating expenses 19,334,791 16,674,456 20,332,827 2,660,335
Operating income(loss) 4,836,237 5,314,969 (650,551) (478,732)
Non-operating revenues (expenses) (2,008,274) 3,937,941 (263,976) (5,946,215)
Income (loss)before
capital contributions
and special item 2,827,963 9,252,910 (914,527) (6,424,947)
Capital contributions, net (3,901,235) (974,408) 10,709,014 (2,926,827)
Special item—contract settlement
expense — — (26,000,000) —
Change in net assets (1,073,272) 8,278,502 (16,205,513) (9,351,774)
Net assets, beginning of year 20,495,611 12,217,109 28,422,622 8,278,502
Net assets, end of year $ 19,422,339 20,495,611 12,217,109 (1,073,272)
Sales to consumers were $22.8 million in 2004 and $20.8 million in 2003. The overall increase of$2.0 million
(or 9.7%) is primarily due to electric and water rate increases to pay for increased operating costs and growth in
customers. Sales to consumers were S 18.6 million in 2002. The overall increase of S2.2 million (or 11.6%) from
2002 to 2003 is due primarily to an electric rate increase to fund amounts borrowed to settle the IDACORP
Energy power contract and a water rate increase to pay for increased operating costs, combined with growth in
customers.
Total operating expenses were $19.3 million in 2004 and $16.7 million in 2003. The overall increase of
$2.7 million in operating expenses is due primarily to increased purchased power costs due to growth, as well as
increased operating costs and depreciation expense. Total operating expenses were S20.3 million in 2002. The
overall decrease of$3.7 million in operating expenses in 2003 from 2002 is due primarily to decreased purchased
power costs due to lower wholesale market and purchased power contract prices. Non-operating revenues
decreased$5.9 million in 2004 primarily due to the sale of capital assets for$5.3 million in 2003, and an increase
in interest expense related to new borrowings in 2004. The sale of capital assets for $5.3 million in 2003, offset
by increased interest expense related to new borrowings in 2003, account for the $4.2 million increase in non-
operating revenues from 2002.
Capital contributions increased from a net outflow of S1.0 million in 2003 to a net outflow of $3.9 million in
2004, primarily due to contributions received in 2003 related to construction at the Donner Lake Assessment
District and Glenshire water systems and the capital projects completed and contributed out from Gray's
5 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Management's Discussion and Analysis
December 31,2004 and 2003
Crossing and Old Greenwood Community Facilities Districts in 2004, Capital contributions decreased from
$10.7 million in 2002 to a net outflow of$1.0 million in 2003, primarily due to contributions received in 2002
related to construction at the Donner Lake Assessment District and Glenshire water system and the 2003 capital
projects completed and contributed out from the Old Greenwood Community Facilities District.
During 2002, the District settled with IDACORP Energy, a supplier of purchased power. The settlement of
S26 million cancelled the existing power contract, which was expensed in 2002 and is shown as a special item.
Capital Assets
As of December 31,2004, 2003 and 2002, the District had$66.1, S61.3,and$51.3 million, respectively, invested
in a variety of capital assets, net of accumulated depreciation. A summary of capital assets is reflected in the
following schedule.
2004 2003 2002
Electric distribution $ 19,660,201 19,506,360 14,591,455
Water distribution 46,313,905 42,811,920 27,848,258
General plant 8,929,095 8,939,989 8,910,706
74,903,201 71,258,269 51,350,419
Less accumulated depreciation (20,852,855) (18,187,169) (16,460,809)
54,050,346 53,071,100 34,889,610
Construction work in progress 12,093,223 8,198,515 16,384,322
$ 66,143,569 61,269,615 51,273,932
Net capital assets (additions, less retirements and depreciation) at December 31, 2004 increased $4.9 million (or
8.0%) from December 31, 2003 and net capital assets at December 31, 2003 increased $10.0 million (or 19.5%)
from December 31, 2002. The increases in both years have been due primarily to the electric and water plant
additions for new development within the District's service area.
Long-Term Debt
Long-term debt includes revenue bonds and notes payable. At December 31, 2004, 2003 and 2002, the District
had $78.4 million, $56.1 million and$19.8 million, respectively, in long-term debt outstanding, including current
maturities.
In October 2004, the Gray's Crossing Community Facilities District issued $15.4 million in special tax bonds,
the proceeds of which were used to acquire certain infrastructure assets within a new development within the
District's service area.
In April 2004, the District obtained $9.0 million in financing from a State Revolving Fund Loan, the proceeds of
which are being used in the replacement of the Donner Lake Water System.
6 (Continued)
DRAFT 6/3l2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Management's Discussion and Analysis
December 31, 2004 and 2003
In December 2003, the Old Greenwood Community Facilities District issued $12.4 million in special tax bonds,
the proceeds of which were used to acquire certain infrastructure assets within a new development within the
District's service area.
In April 2003, the District issued $26.3 million of certificates of participation, the proceeds of which were used
to pay the amounts due to IDACORP Energy for contract settlement fees, as well as to cover the associated costs
of issuance.
2002 long-term debt activity consisted of$3.4 million in borrowings under installment loans offset by principal
repayments.
Contacting the District's Financial Management
The financial report is designed to provide readers with a general overview of the District's finances and to
demonstrate the District's accountability for the money it receives. If you have questions about this report or
need additional financial information, contact Truckee Donner Public Utility District, Attn: Finance Department,
P.O. Box 309, Truckee, CA 96160.
7
DRAFT 6/3/2005 8:55 AM
Independent Auditors' Report
The Board of Directors
Truckee Donner Public Utility District:
We have audited the accompanying balance sheets of Truckee Donner Public Utility District (the District)
as of December 31, 2004 and 2003, and the related statements of revenues, expenses, and changes in net
assets, and cash flows for the years then ended. These financial statements are the responsibility of the
District's management. Our responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits 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 of material misstatement. An audit includes consideration of
internal control over financial reporting as a basis for designing 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 over financial reporting. According, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the District as of December 31, 2004 and 2003, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles generally accepted in the
United States of America.
The management's discussion and analysis on pages 1 through 7 and schedule of funding progress
provided in note I I(c) are not a required part of the basic financial statements of the District, but are
supplementary information required by accounting principles generally accepted in the United States of
America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a
whole. The supplementary information included in Exhibits I and II 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 audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements taken as a whole.
April 8,2005
8
DRAFT 6/3/2005 8:56 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Balance Sheets
December 31,2004 and 2003
Assets 2004 2003
Current assets:
Cash and cash equivalents $ 5,704,885 5,099,202
Accounts receivable(including unbilled amounts of$1,506,002 and
$1,586,552 in 2004 and 2003,respectively, less allowances for
doubtful accounts of$50,584 and$45,594 in 2004 and 2003,
respectively) 3,424,706 2,904,330
Materials and supplies 548,081 551,670
Prepaid expenses and other current assets 398,271 528,016
Total current assets 10,075,943 9,083,218
Noncurrent assets:
Capital assets,net(note 2) 66,143,569 61,269,615
Land held for sale 430,100 610,000
Restricted assets:
Cash and cash equivalents 17,932,183 9,805,063
Investments(note 4) 808,470 808,470
Special assessment receivable(note 9) 10,591,683 11,066,682
Tax receivable 709,412 —
Other assets 2,858,904 2,768,430
Total noncurrent assets 99,474,321 86,328,260
Total assets $ 109,550,264 95,411,478
Liabilities and Net Assets
Current liabilities:
Lines of credit(note 5) $ — 9,980,000
Current maturities of long-term debt(note 6) 3,331,557 2,509,978
Accounts payable 3,555,059 1,807,925
Customer deposits 196,031 239,684
Accrued interest 1,224,649 732,515
Accrued payroll 446,914 518,950
Total current liabilities 8,754,210 15,789,052
Noncurrent liabilities:
Long-term debt(note 6) 75,062,146 53,589,753
Deferred revenue(note 7) 6,311,569 5,537,062
Total noncurrent liabilities 81,373,715 59,126,815
Total liabilities 90,127,925 74,915,867
Net assets:
Invested in capital assets,net of related debt 24,870,432 26,304,401
Restricted for debt service 14,183,378 13,731,924
Restricted for other 2,475,775 2317,447
Unrestricted (22,107,246) (21,858,161)
Total net assets 19,422,339 20,495,611
Total liabilities and net assets $ 109,550,264 95,411,478
See accompanying notes to financial statements.
9
DRAFT 6/3/2005 8:56 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Statements of Revenues, Expenses, and Changes in Net Assets
Years Ended December 31,2004 and 2003
2004 2003
Operating revenues:
Sales to consumers $ 22,778,999 20,765,148
Standby fees 221,500 171,687
Connection fees 572,846 454,938
Other 597,683 597,652
Total operating revenues 24,171,028 21,989,425
Operating expenses:
Power purchases (note I) 8,315,801 7,542,448
Operations and maintenance 4,603,364 4,207,500
Administrative and general 2,835,750 2,384,040
Consumer services 877,303 758,929
Depreciation 2,702,573 1,781,539
Total operating expenses 19,334,791 16,674,456
Operating income 4,836,237 5,314,969
Nonoperating revenues (expenses):
Tax revenues 354,706 —
Income from investments 627,316 650,776
Interest expense (2,990,638) (2,047,924)
Gain on sale of capital assets 342 5,269,867
Other income — 65,222
Total nonoperating(expenses)revenues (2,008,274) 3,937,941
Income before capital contributions 2,827,963 9,252,910
Capital contributions, net(note 1) (3,901,235) (974,408)
Change in net assets (1,073,272) 8,278,502
Net assets, beginning of year 20,495,611 12,217,109
Net assets, end of year $ 19,422,339 20,495,611
See accompanying notes to financial statements.
10
DRAFT 6/3/2005 8:56 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Statements of Cash Flows
Years Ended December 31,2004 and 2003
2004 2003
Cash flows from operating activities:
Receipts from customers $ 22,210,386 22,172,971
Payments to suppliers (8,829,639) (38,398,153)
Payments to employees (4,098,633) (3,979,871)
Net cash provided by(used in)operating activities 9.282,114 (20,205,053)
Cash flows from noncapital financing activities:
Principal payments on debt (1,695,000) —
Proceeds from new debt — 26,890,055
Financing cost payments — (890,055)
Interest payments on debt (1,121,310) (366,968)
Net cash(used in)provided by noncapital financing activities (2,816,310) 25,633,032
Cash flows from capital and related financing activities:
Purchases of capital assets (11,837,064) (13,854,881)
Proceeds from sale of land 180,242 3,989,641
Principal payments on debt (10,916,200) (2.813,610)
Proceeds from new debt 25,012,223 12,546,705
Financing cost payments (374,451) (174,939)
Interest payments on debt,including amounts capitalized (1,655,265) (1,140,145)
Capital contributions 755,199 1,392,590
Special assessment receipts 474,999 658,476
Net cash provided by capital and related
financing activities 1,639,683 603,837
Cash flows from investing activities:
Interest received on investments 627,316 650,858
Net cash provided by investing activities 627,316 650,858
Net increase in cash and cash equivalents 9,732.803 6,682,674
Cash and cash equivalents,beginning of year 14,904,265 8,221,591
Cash and cash equivalents,end of year $ 23,637,068 t4,904,265
Summary of significant noncash activities:
Contributed capital assets—in $ 2,627,306 7,133,002
Contributed capital assets—out (7,283,740) (9,500,000)
Broadband capital lease 154,860 —
Reconciliation of operating income to net cash provided by(used in)
operating activities:
Operating income S 4,836,237 5,314,969
Depreciation and amortization 2,781,673 1,781,539
Changes in operating assets and liabilities:
Accounts receivable (520,376) (90,552)
Materials and supplies 3,589 (21,011)
Prepaid expenses and other current assets 129,745 (109,509)
Accounts payable 1,747,134 (570,978)
Customer deposits (43,653) 70,831
Deferred revenue 419,801 (279,707)
Accrued payroll (72,036) (300,635)
Accrued contract settlement — (26,000,000)
Net cash provided by(used in)operating activities S 9,282,114 (20,205,053)
See accompanying notes to financial statements.
II
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31,2004 and 2003
(I) Organization and Summary of Significant Accounting Policies
(a) Organization
The Truckee Donner Public Utility District (the District) was formed and operates under the State of
California Public Utility District Act. The District is governed by a board of directors which consists
of five elected members. The District provides electric and water service to portions of Nevada and
Placer counties described as Truckee and Donner Lake. The electric and water service operations are
separately maintained and operated. These financial statements reflect the combined electric and
water operations of the District. All significant transactions between electric and water operations
have been eliminated. These eliminations include power purchases and rent for shared facilities.
The District's blended component units consist of organizations whose respective governing Boards
are comprised entirely of the members of the District's Board of Directors. These organizations are
reported as if they are a part of the District's operations. The entities are legally separate, however in
the case of the Truckee Donner Public Utility District Financing Corporation, financial support has
been pledged and financial and operational policies may be significantly influenced by the District.
Following is a description of the District's blended component units:
Truckee Donner Public Utility District Financing Corporation: legal entity created to issue and
administer Certificates of Participation on behalf of the District. See note 6.
Truckee Donner Public Utility District Community Facilities District No.03-1 (Old
Greenwood): legal entity created to issue special tax bonds to finance various public
improvements needed to develop property located within Old Greenwood. See note 8.
Truckee Donner Public Utility District Community Facilities District No. 04-01 (Gray's
Crossing): legal entity created to issue special tax bonds to finance various public
improvements needed to develop property located within Gray's Crossing. See note 8.
Separate standalone financial statements are not available for the blended component units described
above.
(b) Accounting Policies
The accounting policies of the District conform with accounting principles generally accepted in the
United States of America (GAAP) as applied to government units. The Governmental Accounting
Standards Board (GASB) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles. The financial statements have been prepared using the
economic resources measurement focus and the accrual basis of accounting.
12 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31,2004 and 2003
The District applies accounting policies appropriate for a special purpose government engaged in
business-type activities. GASB Statement No. 20, Accounting and Financial Reporting for
Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting,
requires that such an entity apply all GASB pronouncements as well as the pronouncements of the
Financial Accounting Standards Board (FASB) and its predecessors issued on or before
November 30, 1989, unless those pronouncements conflict with or contradict GASB
pronouncements. As allowed by GASB Statement No. 20, the District has elected not to implement
FASB Statements and Interpretations issued after November 30, 1989.
(c) Use of Estimates
The preparation of financial statements requires management of the District to make a number of
estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Significant items subject to such estimates and
assumptions include valuation allowances for receivables and adjustments to the carrying value of
inventories; recognition of environmental liabilities; and assets and obligations related to employee
benefits. Actual results could differ from those estimates.
(d) Capital Assets
Capital assets are stated at cost. Depreciation on capital assets is calculated using the straight-line
method over the estimated useful lives of the assets, which are as follows:
Distribution plant:
Water 2040 years
Electric 23-35 years
Computer software and hardware 4-5 years
Buildings and improvements 20-33 years
Equipment and furniture 10 years
It is the District's policy to capitalize interest paid on debt incurred for significant construction
projects while those projects are under construction, less any interest earned on related unspent debt
proceeds. In 2004 and 2003, interest was capitalized in connection with the Gray's Crossing District
and Donner Lake system improvements (see notes 2, 8 and 9).
(e) Restricted Assets
Restricted assets are assets restricted by the covenants of long-term financial arrangements or other
third parry legal restrictions. Restricted assets are used in accordance with their requirements and
where both restricted and unrestricted resources are available for use, restricted resources are used
first and then unrestricted as they are needed.
(� Materials and Supplies
Materials and supplies are recorded at average cost.
13 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
(g) Unamortized Financing Costs
Certain costs related to borrowing funds are amortized over the term of the related borrowings.
(h) Revenue Recognition
Revenues are recorded as meters are read on a cycle basis throughout each month for electric and
commercial water. Other water customers are billed on a flat-rate basis, and revenues are recorded as
billed. Also, the District records estimated revenues earned but not billed to customers as of the end
of the year. Revenues from connection fees are recognized upon completion of the connection.
Income that the District has earned through investing its excess cash is reflected within income from
investments when earned.
(i) Revenue and Expense Classification
The District distinguishes operating revenues and expenses from non-operating items in the
preparation of its financial statements. Operating revenues and expenses generally result from
providing water and electric services in connection with the District's principal ongoing operations.
The principal operating revenues are sales to customers. The District's operating expenses include
power purchases, labor, materials, services, and other expenses related to the delivery of water and
electric services. All revenues and expenses not meeting this definition are reported as non-operating
revenues and expenses, or capital contributions.
6) Power Purchases
On March 7, 2003, the District entered into a power purchase agreement with Constellation Power
Source, Inc. (CPS), under which CPS will supply the District's power needs through 2007. This
power supply replaces the interim power being provided to the District by IDACORP Energy L.P.
under the terms of the related settlement agreement. The agreement with CPS provides for a block
purchase of power at $49.95 per megawatt hour that is designed to cover the District's projected
monthly power requirements. In addition, the agreement contains call and put options that provide
the District with the flexibility to buy additional power or sell excess power, depending upon the
District's actual monthly power needs.
In 1999, the District entered into an agreement with Sierra Pacific Power Company(SPPC), whereby
SPPC will provide transmission services to the District through December 31, 2027. In addition, the
District purchases scheduling and dispatch services from Northern California Power Agency.
These purchases of services represented 10.3% and 10.5% of total purchased power costs in 2004
and 2003,respectively.
From 1997 through 2001, the District entered into, and amended, various power purchase contracts
(collectively, the Contracts) with IDACORP Energy L.P., and its predecessors (collectively,
IDACORP). Through the Contracts, IDACORP provided substantially all of the power required by
the District. The latest amendment to the Contracts, approved during the California power crisis of
2000 and 2001, provided for the purchase of a 25-megawatt block of power, at a rate of$72 per
megawatt hour, through 2009. Subsequently, power prices experienced a substantial decline, making
the Contracts economically undesirable for the District. The District commenced legal action against
IDACORP, arguing that the Contracts were not executed in good faith due to the unusual
14 (Continued)
DRAFT 613/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
circumstances of the California power crisis. In late 2002, the District and IDACORP agreed in
principle to settle their disputes and terminate the Contracts. The settlement called for the District to
pay IDACORP a $26,000,000 contract settlement fee, which the District fully accrued as of
December 31, 2002, and paid in full with interest on April 4, 2003, In exchange, IDACORP agreed
to terminate the Contracts, and also agreed to continue to provide interim power to the District at a
reduced rate of$42 per megawatt hour through March 31, 2001
(k) Contributed Capital Assets
A portion of the District's capital assets have been obtained through amounts charged to developers
for plant constructed by the District; direct contributions of capital assets from developers and other
parties (note 10); as well as assessments of Local property owners (note 9). These items are
recognized within capital assets as construction is completed for plant constructed by the District
based on the cost of the items, when received for contributed capital assets based on the actual or
estimated fair value of the contributed items, or upon completion of the related project for
development agreements. The District records amounts received within capital contributions when a
legally enforceable claim is established. Until the District meets the criteria to record the amounts
described above as capital contributions, any amounts received are recorded within deferred revenue
on the balance sheet.
During 2004, the Gray's Crossing District contributed $6,917,740 to the District and other
government entities. The contribution out from Gray's Crossing District has been netted with capital
contributions on the accompanying statement of revenues, expenses, and changes in net assets.
During 2004 and 2003, the Old Greenwood District contributed $366,000 and $9,500,000,
respectively to the District and other government entities. The contribution out from the Old
Greenwood District has been netted with capital contributions on the accompanying statement of
revenues,expenses, and changes in net assets.
(1) Income Taxes
As a government agency, the District is exempt from payment of federal and state income taxes.
(m) Accounting Pronouncements Not Yet Implemented
In March 2003, the GASB issued Statement No. 40, Deposit and Investment Risk Disclosures,which
amended certain portions of GASB Statement No. 3, This statement establishes and modifies
disclosure requirements related to investment risks and is effective for the District beginning fiscal
year 2005. Given that this statement primarily impacts financial statement disclosures, the District
does not anticipate a material impact to the financial position or operations of the District as a result
of implementing this standard.
15 (Continued)
DRAFT 6t3l2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
In November 2003, GASB issued Statement No. 42, Accounting and Financial Reporting for
Impairment of Capital Assets and for Insurance Recoveries. Statement No. 42 establishes accounting
and financial reporting standards for impairment of capital assets. A capital asset is considered
impaired when its service utility has declined significantly and unexpectedly. This Statement also
clarifies accounting for insurance recoveries. The adoption of GASB No. 42 is effective for the
District beginning fiscal year 2005. The District does not anticipate a material impact to the financial
position or operations of the District as a result of implementing this standard.
In July 2004, the GASB issued Statement No. 45,Accounting and Financial Reporting by Employers
for Postemployment Benefits Other Than Pensions. Statement No. 45 establishes standards for the
measurement, recognition, and display of other postemployment benefits (OPEB)
expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required
supplementary information (RSI) in the financial reports of state and local governmental employers.
OPEB includes postemployment healthcare, as well as other forms of postemployment benefits (for
example, life insurance) when provided separately from a pension plan. The adoption of Statement
No. 45 is effective for the District beginning fiscal year 2008. The District is still evaluating the
impact that Statement No. 45 will have on the financial position and operations of the District as a
result of implementing this standard.
(n) Special Assessment Receivable
Special assessments represent amounts due from property owners within the Donner Lake
Assessment District for improvements made by the District pursuant to an agreement with the
property owners to improve their water quality. For additional discussion of the Donner Lake Special
Assessment, see note 8, Donner Lake Water Company Purchase.
(o) Tax Revenues
Beginning in 2004, the District levies ad valorem property tax on all the taxable property within the
Old Greenwood District in an amount sufficient to pay the yearly principal and interest on the
Special Assessment District Tax Bonds(see note 5), The District had revenues of$354,706 in 2004.
(2) Capital Assets
Capital assets consist of the following at December 31, 2004 and 2003:
January ], December 31,
2004 Additions Reductions 2004
Electric distribution facilities $ 19,506,360 209,218 (55,377) 19,660,201
Water distribution facilities 42,811,920 3,505,032 (3,047) 46,313,905
General plant 8,939,989 79,584 (90,478) 8,929,095
71,258,269 3,793,834 (148,902) 74,903,201
Less accumulated depreciation (18,187,169) (2,814,588) 148,902 (20,852,855)
Construction work in progress 8,198,515 7,467,715 (3,573,007) 12,093,223
$ 61,269,615 8,446,961 (3,573,007) 66,143,569
16 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31,2004 and 2003
January 1, December 31,
2003 Additions Reductions 2003
Electric distribution facilities $ 14,591,455 5,064,103 (149,198) 19,506,360
Water distribution facilities 27,848,258 15,002,654 (38,992) 42,811,920
General plant 8,910,706 29,283 — 8,939,989
51,350,419 20,096,040 (188,190) 71,258,269
Less accumulated depreciation (16,460,809) (1,914,550) 188,190 (18,187,169)
Construction work in progress 16,384,322 236,835 (8,422,642) 8,198,515
$ 51,273,932 18,418,325 (8,422,642) 61,269,615
A portion of the plant has been contributed to the District. When replacement is needed, the District
replaces the contributed plant with District-financed plant. Future rate increases may be necessary to pay
for these replacements.
During 2004, the District capitalized $395,897 of interest in connection with the Gray's Crossing District
and Donner Lake system improvements (see note 8 and 9). The District capitalized $253,809 of interest
during 2003 related to the Donner Lake System improvement.
(3) Telecommunication Services
During 1999, the District initiated a project to expand their basic service offerings to include internet
access, cable television and voice delivered over fiber optic networks (the broadband project). The District
has completed the broadband design project and obtained the necessary regulatory approvals, franchises
and contractors needed to construct and launch the broadband project. The District has also contracted with
Eagle Broadband for the purchase of video and data content,to be sold and delivered to District customers
upon completion of the fiber optic network. Expenses incurred by the District to date on the broadband
project total $2,320,666 of which $555,534 is included in capital assets on the accompanying balance
sheet. During 2004 and 2003, expenditures for this project, mainly related to legal, financing, and charges
for District labor and overhead were$610,715 and $383,197,respectively, none of which were capitalized.
Cebridge Connections (Cebridge), a local telecommunications service provider, filed an objection in
September 2004 with the Local Agency Formation Commission (LAFCO), the entity responsible for
providing regulatory approval for the broadband project. The permit authority denied the request for
reconsideration, resulting in Cebridge filing a Lawsuit against LAFCO. The District was not named in the
lawsuit. A ruling on the lawsuit is expected near the end of 2005. The District anticipates that LAFCO will
prevail, allowing the District to move forward with financing and full consideration.
17 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
(4) Cash and Investments
Cash and investments are recorded in accounts as either restricted or unrestricted as required by the
District's certificates of participation indentures or other third-parry legal restrictions. Restricted assets
represent funds that are restricted by certificates of participation covenants or third party contractual
agreements. Assets that are allocated by resolution of the board of directors are considered to be board
designated assets. Board designated assets are a component of unrestricted assets as their use may be
redirected at any time by approval of the Board. Upon Board approval, assets from designated accounts
may be used to fund capital projects. These designated accounts are replenished with lost earnings
accordingly. Such accounts have been designated by the board of directors for the following purposes:
Building Fund
In compliance with Board rules,the District maintains a building fund to help pay for the interest and
principal of the borrowed funds used for the District office complex or to pay for capital
improvements to the building.
Storm Damage Fund
The District maintains a designated fund to provide for storm damages that may occur in the future.
Electric Rate Reserve
In compliance with Board rules, the District has created an electric rate stabilization fund in
anticipation of future costs. During both 2004 and 2003, there was no utilization of these funds to
offset increased power costs in lieu of raising electric rates.
Reserve for Future Meters
Prior to 1992, connection fees charged to applicants for water service included an amount, which
was maintained in a designated fund, to offset the cost of future metering. As meters are installed,
these funds are used to pay for related costs.
Prepaid Connection Fees
In compliance with Board rules, the District has set aside prepaid connection fees to cover
installation costs of water services.
Land Sale Trust Fund
The District's Board has set aside certain funds from the sale of excess properties to pay for future
capital improvement projects.
Broadband Fund
The District's Board has set aside certain funds received from a forfeited deposit and the sale of one
two-inch telecommunications conduit to be used to offset future telecommunications related
expenses.
18 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
As of December 31, board designated accounts consisted of the following:
2004 2003
Building fund $ 274,202 269,939
Storm damage fund 323,052 318,028
Electric rate reserve 440,870 434,013
Reserve for future meters 184,739 100,789
Prepaid connection fees 72,865 73,770
Land sale trust fund — 1,063,021
Broadband fund — 335,607
$ 1,295,728 2,595,167
Certain assets have been restricted by certificates of participation covenants or third party contractual
agreements for the following purposes:
Certificates of Participation: Electric
The terms of the Electric Division's Certificates of Participation require a reserve fund as security for
each principal and interest payment as they come due. A reserve fund is set aside for the highest
annual principal and interest payment over the Life of the borrowed amount. All of these reserve
funds are held by BNY Western Trust Company.
Certificates of Participation: Water
The terms of the Water Division's Certificates of Participation require a restricted fund to provide for
payment of principal and interest as they come due. The Water Division's Certificates of
Participation debt funds are held by BNY Western Trust Company.
Facilities Fees
The District charges facilities fees to applicants for new service to cover the costs of infrastructure
needed to meet their systems demand.The use of such funds is restricted by California state law.
Revenue Fund: Water
The water revenue fund is derived from the operations of the water system, and is restricted as to use
by covenants of the District's certificates of participation.
Department of Water Resources(DWR) Prop 55 Reserve Fund
Regulations relating to the Department of Water Resources loan require the accumulation of a
reserve fund as security for each principal and interest payment as they come due. Annual payments
into the fund are required for each of the first ten years beginning April 1, 1996. The total reserve
fund will equal two semi-annual payments. These funds will be set aside for the life of the borrowed
amount. All of the reserve funds are invested in the State of California Local Agency Investment
Fund.
19 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31,2004 and 2003
Glenshire Escrow Accounts
As described in more detail in note 10, the District received cash as part of its acquisition of the
Glenshire water system and from a monthly surcharge paid by residents. The terms of the acquisition
agreement specify that the cash be utilized for the construction of improvements to the Glenshire
water system. The funds are being used to pay the debt service costs related to improvements.
Donner Lake Special Assessment District Improvement Fund
The District established the Donner Lake Special Assessment District Improvement Fund to account
for all funds received from the Special Assessment Receivable, which will be used to pay the debt
service costs related to the Donner Lake Water System project.
Old Greenwood Construction Fund
During 2003, the Old Greenwood Community Facilities District issued $12,445,000 of Special Tax
bonds to finance various property improvements within Old Greenwood. The District established the
Old Greenwood Construction Fund to account for the unspent bond proceeds. The District is allowed
to draw upon such funds as valid construction costs are incurred.
Gray's Crossing Project Fund
During 2004, the Gray's Crossing Community Facilities District issued $15,375,000 of Special Tax
bonds to finance various property improvements with Gray's Crossing. The District established the
Gray's Crossing Project Fund to account for the unspent bond proceeds. The District is allowed to
draw upon such funds as valid construction costs are incurred.
Equipment Loans Escrow Accounts
During 2004, the District obtained loans to purchase various capital equipment. As the District
receives loan funds, the proceeds are held in escrow until qualified purchases are made. The District
intends to use funds remaining in escrow for future purchases of capital equipment.
Other(Area Improvement Funds)
The District receives funds from the County of Nevada, which are to be used only for improvements
to specific areas within the District's boundaries in Nevada County. These areas include various
Nevada County assessment districts.
20 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
As of December 31, restricted cash and cash equivalents and investments consisted of the following:
2004 2003
Certificates of participation $ 8,127,467 5,401,554
Facilities fees 2,447,104 1,892,665
Revenue fund — 482,749
DWR-Prop 55 reserve fund 275,358 248,572
Glenshire escrow accounts 81,361 68,989
Donner Lake Special Assessment District
Improvement Fund 1,201,328 1,612,364
Old Greenwood Construction fund 384,642 750,000
Gray's Crossing Project Fund 5,677,129 —
Equipment loans escrow accounts 387,154 —
Other(area improvement funds) 159,110 156,640
Total restricted cash and cash
equivalents and investments $ 18,740,653 10,613,533
Cash and investments are comprised of the following cash and cash equivalents and investments as
of December 31:
2004 2003
Cash and cash equivalents $ 23,637,068 14,904,265
Investments—repurchase agreement 808,470 808,470
Total $ 24,445,538 15,712,735
Cash and cash equivalents of $23,637,068 and $14,904,265 at December 31, 2004 and 2003,
respectively, consist primarily of investments in the state pooled fund and US Treasury notes. For
purposes of the statements of cash flows, the District considers all highly liquid instruments with
original maturities of three months or less to be cash equivalents.
The District follows GASB No.31,Accounting and Financial Reportingfor Certain Investments and
for External Investment Pools. This statement establishes fair value standards for recording
investments. The recorded amount for the District's investments approximated their fair values as of
December 31,2004 and 2003.
The District's investments are categorized to provide an indication of the level of custodial credit
risk assumed by the District at December 31, 2004 and 2003. Category 1 includes investments that
are insured or registered, or for which the securities are held by the District or its agent in the
District's name, At December 31, 2004 and 2003, cash, cash equivalents and investments are
considered to be risk category 1.
21 (Continued)
DRAFT 6l3t2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
(5) Lines of Credit
Lines of credit consisted of the following at December 31,2004 and 2003:
January 1, December 31,
2004 Additions Reductions 2004
US Bank Line of Credit—Water
62% of prime(2.48%at
December 31,2003), due
September 2004, secured by
the Special Assessment
Receivable $ 6,980,000 — (6,980,000) —
US Bank Line of Credit—Water
66% of prime(2.64%at
December 31,2003), due
July 2004, secured by the
Special Assessment
Receivable 3,000,000 — (3,000,000) —
$ 9,980,000 — (9,98Q000) —
January 1, December 31,
2003 Additions Reductions 2003
US Bank Line of Credit—Water
62% of prime(2.48% at
December 31, 2003), due
September 2004, secured by
the Special Assessment
Receivable $ 6,980,000 — — 6,980,000
US Bank Line of Credit—Water
66%of prime(2.64% at
December 31, 2003), due
July 2004, secured by the
Special Assessment
Receivable 2,741,000 259,000 — 3,000,000
$ 9,721,000 259,000 — 9,980,000
The lines of credit were extinguished during 2004 with funds obtained from the State Revolving Fund loan
(see note 6).
22 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
(6) Long-Term Debt
Long-term debt consisted of the following at December 31,2004 and 2003:
January t, Deeember3l, Due within
2004 Additions Reductions 2004 one year
Certificates of Participation—
Electric,2.5%to 5.75%,
due serially to 2013(net of
unamortized premiums of
$456,422). S 26,816,606 (1,790,184) 25,026,422 2,320,000
State Revolving Fund Loan--
Water,2,34%,due semi-annually
beginning in 2006 to 2026, 8,939,961 8,939,961 —
Special Tax Bonds—Mello
Roos,2,25%to 5.7%,due
serially to 2013(net of
unamortized discounts of
$152,522). 12,287,705 4,773 — 12,292,478 10,000
Special Tax Bonds—Mello
Roos,3.25°o to 5.7%,due
due serially to 2035(net of
uamortized discounts of
$360,578). 15,014,422 15,014,422
Certificates of Participation—
Water,5,25%to 5.4%,
due serially to 2021 (net of
umamortized discounts of
$33,417). 9,073,223 3,360 (315,000) 8,761,583 330,000
Department of Water Resources,
3.18%,due semiannually to
2021,secured by real
and personal property. 4,089,803 — (177,794) 3,912,009 183,603
Installment loans,5.4%to 6.23%,
various payment terms and
due dates,secured by
equipment. 3,832,394 1,057,840 (443,406) 4,446.828 487,954
$ 56,099,731 25,020,356 (2,726.384) 78,393 703 3,331,557
23 (Continued)
DRAFT 613l2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
January 1, December 31, Due within
2003 Additions Reductions 2003 one year
Certificates of Participation—
Electric,2.5%to 5.75%,
due serially to 2013 (net
unamortized premiums of
$551,606). $ — 26,890,055 (73.449) 26,816,606 1,695,000
Special Tax Bonds—Mello
Roos,225%to 5.7%,due
serially to 2013(net
unamortized discounts of
$157,295)_ -- 12,287,705 12,287,705
Certificates of Participation—
Electric,2.75%to 5.375%,
due serially to 2012(net
uamortized discounts of
$10,480). 2,019,520 — (2,019,520) —
Certificates of Participation—
Water,5,25%to 5.4%,
due serially to 2021 (net
umamortized discounts of
S36,777). 9,370,201 — (296,978) 9,073,223 315,000
Department of Water Resources,
3.18%,due semiannually to
2021,secured by real
and personal property. 4,262,175 — (172,372) 4,089,803 177,906
Installment loans,5.4%to 6,23%,
various payment terms and
due dates,secured by
equipment. 4,143,632 — (311,238) 3,832,394 322,072
$ 19,795,528 39,177,760 (2,873,557) 56,099,731 2,509,978
During October 2004, the Gray's Crossing Community Facilities District issued $15,375,000 of Special
Tax Bonds, the net proceeds of which were utilized to finance various public improvements for property
within Gray's Crossing (see note 8). The terms of the Special Tax Bonds call for debt service payments to
be provided solely by taxes levied on and collected from the owners of the taxable land within Gray's
Crossing. The bonds are secured by land located within Gray's Crossing.
During April 2004, the District obtained financing in the form of a State Revolving Fund Loan, the
proceeds of which are to be utilized in the replacement of the Donner Lake water system. The District may
submit expenditures to the State for reimbursement up to $12,732,965. The semi-annual principal and
interest payments will be $400,426 and commence in 2006. The District is also required to fund a reserve
account by making semi-annual reserve payments in the amount of $40,043 for a 10-year period. The
outstanding balance of$8,939,961 was largely used to pay off the temporary lines of credit obtained in
2001 and 2002 to fund the Donner Lake project.
24 (Continued)
DRAFT 6/3/2005 6:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
On April 3, 2003, the District issued $26,265,000 of Certificates of Participation, the net proceeds of which
were utilized to pay the amounts due to IDACORP for the purchase power contract settlement fees (see
note 1), as well as to cover the associated costs of issuance. The terms of the new Certificates call for debt
service payments to be made only from the net revenues of the Electric Division. These revenues are
required to be a least equal to 120%of the debt service for each year.
During December 2003, the Old Greenwood Community Facilities District issued $12,445,000 of Special
Tax Bonds, the net proceeds of which were utilized to finance various public improvements for property
within Old Greenwood (see note 8). The terms of the Special Tax Bonds call for debt service payments to
be provided solely by taxes levied on and collected from the owners of the taxable land within Old
Greenwood. The bonds are secured by land located within Old Greenwood.
During 1996, Truckee Donner Public Utility District Financing Corporation issued $10,905,000 of
Certificates of Participation to refund 100% of the outstanding balance of Certificates issued in 1991. The
1991 Certificates were to finance the repair and construction of various water system improvements for the
District. The terms of the new Certificates call for payments to be made only from the net revenues of the
Water Division and the debt is secured by this revenue. These revenues are required to be at least equal to
110% of the debt service for each year. The outstanding balance on these Certificates was $8,795,000 and
$9,110,000 at December 31,2004 and 2003,respectively.
Under the Safe Drinking Water Bond Law of 1986, the Department of Water Resources provided a
$5,000,000 loan to the District in 1993. The loan was to finance capital improvements to the public water
supply and to reduce water quality hazards. The terms of the loan call for payments to be made only from
the net revenues of the Water Division, which are required to be sufficient to pay the debt service for each
year. The loan is secured by the net revenues of the Water Division. The outstanding balance on this loan
was $3,912,009 and$4,089,803 at December 31,2004 and 2003, respectively.
As a normal part of its operations, the District finances the acquisition of certain assets through the use of
installment loans. As of December 31, 2004 and 2003, installment loans of $4,446,828 and $3,832,394,
respectively, were outstanding to finance the purchase of vehicles, equipment and certain water system
improvements.
25 (Continued)
DRAFT 6f3l2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
Scheduled payments on debt are:
Principal Interest Total
2005 S 3,331,557 3,465,054 6,796,611
2006 3,644,355 3,516,716 7,161,071
2007 4,038,966 3,512,492 7,551,458
2008 4,177,471 3,339,024 7,516,495
2009 4,247,845 3,159,252 7,407,097
2010-2014 21,204,267 12,559,397 33,763,664
2015-2019 11,250,449 9,386,491 20,636,940
2020-2024 7,613,888 6,796,534 14,410,422
2025-2029 7,455,000 4,800,162 12,255,162
2030-2033 10,065,000 2,161,210 12,226,210
Thereafter 1,455,000 84,391 1,539,391
78,483,798 52,780,723 131,264,521
Plus unamortized premiums 456,422
Less unamortized discounts (546,517)
Total payments on debt $ 78,393,703
(7) Deferred Revenue
For transactions that have not yet met revenue recognition requirements, revenues are deferred and
reflected in the accompanying balance sheets. As of December31, 2004 and 2003, deferred revenues
consist of unearned special assessment revenues (see note 9), development agreement deposits, connection
fees and other deposits as follows:
2004 2003
Unearned special assessments $ 354,706 1,065,755
Development agreement deposits 3,981,487 3,934,173
Connection fees and other deposits 1,975,376 537,134
$ 6,311,569 5,537,062
26 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
(8) Community Facilities Districts
In order to finance various public improvements needed to develop property within the Town of Truckee,
California, the District formed Community Facilities Districts,which issued Special Tax Bonds pursuant to
the Mello-Roos Community Facilities Act of 1982, as amended. Accordingly, the Bonds are special
obligations of the respective Community Facilities Districts and are payable solely from revenues derived
from taxes levied on and collected from the owners of the taxable land within the respective Community
Facilities Districts. These Special Tax Bonds are not general or special obligations of the District. The
Board of Directors of the District is the legislative body of the Communities Facilities Districts and as such
they approve the rates and method of apportionment of the special taxes. As improvements are completed,
the infrastructure is donated, in the form of a capital contribution to the Town of Truckee, the Truckee
Sanitary District, Southwest Gas and the District.
In September 2004, the Community Facilities District No. 04-01 (Gray's Crossing) was formed and issued
$15,375,000 in Special Tax Bonds (the04-1 Bonds). During 2004, Gray's Crossing contributed
infrastructure valued at$6,917,740, of which $945,000 was donated to the District.
In December 2003, the Community Facilities District No. 03-1 (Old Greenwood) was formed and issued
$12,445,000 in Special Tax Bonds (the 03-1 Bonds). During 2004 and 2003, Old Greenwood contributed
infrastructure valued at 5366,000 and $9,500,000, respectively, of which 5366,000 and 55,470,167,
respectively was donated to the District. During 2004, taxes of$709,412 were levied by Old Greenwood.
Of this amount, 5354,706 relates to 2004 and accordingly, is included in tax revenues in the accompanying
statement of revenues, expenses and changes in net assets. The remaining amount will be recognized in
2005 and is included in deferred revenue on the accompanying balance sheet at December 31, 2004.
(9) Donner Lake Water Company Purchase
In 2001, the District took over Donner Lake Water Company by initiating an eminent domain lawsuit. As a
part of the takeover, the District agreed to replace the entire water system, which is estimated to cost
approximately $15,232,000 and be completed in 2005. The District agreed to initially finance the
replacement through obtaining third party financing and the Donner Lake property owners have agreed to
reimburse the District for the full costs of the replacement. Therefore an assessment has been placed on
each Donner Lake homeowner's property for a pro-rata share of the$13,000,000 payable immediately, or,
for those not paying the assessment in full, over 20 years at approximately a 3.5% interest rate. One
twentieth of the assessment, plus interest, is added to each property owner's annual property tax bill, if
they have not previously paid the assessment in full, and is collected by Nevada and Placer Counties on
behalf of the District. The Donner Lake homeowner's property values secure the S 13,000,000 assessment.
Project costs incurred in excess of the assessment will be collected through surcharges to each property
owner's bill until all costs are recovered. As of December 31, 2004, the amount outstanding from the
property owners was $10,591,683, of which $482,091 is due next year. These amounts are shown in the
caption Special Assessment Receivable in the accompanying balance sheet. Per Board resolution, all funds
received from property owners are set aside in the Donner Lake Special Assessment District Improvement
Fund until such time as the funds will be used to fund the debt service on the District's initial third parry
debt. During April 2004, the District obtained financing in the form of a State Revolving Fund Loan for
$12,732,965 at a rate of 2.34%. The semi-annual principal and interest payments will be $400,426, The
District is also required to fund a reserve account by making semi-annual reserve payments in the amount
27 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31,2004 and 2003
of$40,043 for a 10-year period. Prior to obtaining the State Revolving Fund Loan, the District had third
party bridge financing in the form of two lines of credit totaling $10,000,000. Both lines of credit were
extinguished with funds received through the State Revolving Fund Loan.
As part of the take over, the District obtained a third party appraisal of the water system. Based upon the
appraisal, the District paid $750,000 for the system. The previous owner of Donner Lake Water Company
asserted that the actual value of the water system was $7,000,000. In December 2003, a Judgment in
Eminent Domain was issued by the Superior Court of the State of California ordering the District to
compensate the previous owner an additional amount of$410,840 and to set aside $155,261 to reimburse
Donner Lake property owners who had prepaid water bills and fees to the previous owner. Of these
amounts,refunds of$61,574 are outstanding as payables at the end of 2004.
(10) Glenshire Water System Acquisition
Prior to 2002, the residents of the Glenshire water service area in the eastern portion of the Town of
Truckee were served by the Glenshire Mutual Water Company (GMWC), an independent nonprofit entity
originally created by the Glenshire residents. The Glenshire area had been experiencing problems with the
quality of its water, and thus the GMWC, on behalf of the residents, requested that the District assume
responsibility for the improvement of the Glenshire water system, and for its ongoing operations. In early
2002 the District agreed to accept the donation of the Glenshire water system assets from the GMWC, in
exchange for bringing the system up to the District's existing standards. The donated assets were recorded
as cash and capital assets in the accompanying balance sheet and as contributed capital in the statement of
revenues, expenses and changes in net assets. The improvements have been in process since 2002, and
were completed in 2004 for a total cost of$3,129,413.
(11) Employee Benefit Plans
(a) 401(a)Plans
The District sponsored a 401(a) defined contribution plan (401(a) Plan) for District management
(effective August 1, 2000) and bargaining unit employees (effective January 1, 2000). During 2004,
the District merged the 401(a) Plan, as well as the existing pension plan into and became part of the
Public Agency portion of the California Public Employees' Retirement System (Ca1PERS). As a
result of the merger, plan assets of$875,595 were transferred to CalPERS to fund fixture benefits for
active participants. The District has no Father obligation under the 401(a) Plan.
(b) Truckee Donner Public Utility Distriet Defined Benefit Plan
Prior to 2004, the District sponsored a single employer defined benefit plan for all District
bargaining unit employees who have at least one year of service. During 2004, the District merged
the existing pension plan as well as the 401(a) Plan into and became a part of CalPERS. As a result
of the merger, $185,000 of the pension plan's assets were distributed out to existing retirees or
beneficiaries, which satisfied the District's obligation for future benefit payments to such retirees and
beneficiaries. The remaining plan assets of$1,070,252 were transferred to CalPERS to fund future
benefits for active participants.There are no further obligations under the prior pension plan.
28 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
(c) CalPERS Plan
During 2004, the District and bargaining unit employees elected to terminate their existing pension
plan and 401(a) plan and become a part of the Public Agency portion of CaIPERS, effective
August 21, 2004. The CalPERS plan is an agent multiple-employer plan administered by Ca1PERS,
which acts as a common investment and administrative agent for participating public employers
within the state of California. State statutes within the Public Employees' Retirement Law establish a
menu of benefit provisions, as well as other requirements. The District selects optional benefit
provisions from the benefit menu by contract with CAPERS and adopts those benefits through local
ordinance or resolution. The Ca1PERS plan also provides for death and disability benefits. CaIPERS
issues a separate comprehensive annual financial report. Copies of the Ca1PERS' annual financial
report may be obtained from the CaIPERS Executive Office—400 P Street—Sacramento, California,
95814,
Active plan participants are required to contribute 7% of their annual covered salary, of which the
District on the participants' behalf pays 4%. The District is required to contribute the actuarially
determined remaining amounts necessary to fund the benefits for its participants. The required
employer contribution rate for fiscal year ending June 30, 2005 is 18.006% of eligible participant
payroll. The contribution requirements of the plan participants are established by State statute and
the employer contributions rate is established and may be amended by CAPERS.
The District's annual pension cost for the year ended December 31, 2004 was $284,917 and was
equal to the District's required and actual contributions as determined by the May 31, 2004 initial
actuarial valuation using the entry age normal actuarial cost method with the contributions
determined as a percent of payroll. The actuarial methods and assumptions used are those adopted by
the Ca1PERS Board of Administration. Significant actuarial assumptions include:
Actuarial Cost Method Entry Age Normal Cost Method
Inflation Rate 3.00%compounded annually
Investment Return 7.75%compounded annually
Salary Increases 3.25%
The plan's unfunded actuarial accrued liability is being amortized as a level percentage of projected
payrolls on a closed basis.The remaining amortization period ends in 2017 for prior service.
Schedule of Funding Progress(unaudited, required supplementary information)
The following is a funding schedule for the CaIPERS Plan:
Actuarial Unfunded
Actuarial accrued Annual AAL as a
Actuarial value liability Unfunded Funded covered percentage
valuation date of assets (.AAL) AAL ratio payroll of payroll
May 31,2004 $ 1,945,846 6,453.157 4,507,311 30% $ 3,615,996 125%
29 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31,2004 and 2003
(d) Deferred Compensation Plan
The District maintains a deferred compensation plan (the Plan) for certain employees. The District
has no liability for losses under the Plan but does have the duty of due care that would be required of
an ordinary prudent investor. The District has not reflected the Plan's assets and corresponding
liabilities (if any) on the accompanying balance sheets.
(e) Post Employment Health Care
The District began providing Post Employment Health Care on January 1, 2000 to all employees,
and their qualified dependents that retire from the District on or after attaining age 60 with service of
at least 20 years. The board of directors of the District retains full authority to set the provisions and
contribution obligations related to this benefit. For years worked which are less than 20, the benefit
is reduced by 5%for each year. For retirement prior to age 60, the benefit is reduced by 2%for each
year. Currently six individuals meet those eligibility requirements. The District pays insurance
premiums for medical, dental, and prescription drugs. Expenditures for post employment health care
benefits are recognized when premiums are paid. The cost of post employment health care was
$47,271 and$28,149 for 2004 and 2003, respectively.
30 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
(12) Segment Disclosure
The District has issued revenue bonds to finance water and electric distribution facilities. During 2004 and
2003, the District also issued special tax bonds secured by tax revenues. Each project has an external
requirement to be accounted for separately, and investors in the revenue and special tax bonds rely solely
on the revenue generated by the individual projects for repayment. Summary financial information as of
and for the years ending December 31,2004 and 2003 for each project is presented below.
Balance Sheets
2004
Old Gray's
Assets Electric Water Greenwood Crossing
Current assets $ 8,366,072 1,711,179
Noncurrent assets:
Capital assets,net 19,857,760 46,285,809
Restricted assets 4,547,565 15,063,439 2,381.156 8,049,588
Other assets 1,797,650 941,965 254.078 295,311
Total noncurrent assets 26,202,975 62,291,213 2,635,234 8,344,899
Total assets $ 34,569,047 64,002,392 2,635,234 8,344,899
Liabilities and Net Assets(Deficit)
Current liabilities $ 5,087,374 3,167,324 252,604 248,216
Noncurrent liabilities:
Long-term debt,net of current
portion 23,682,957 24,082,287 12,282,479 15.014,423
Other liabilities 4,351,090 1,605,773 354,706 —
Total liabilities 33,121,421 28,855,384 12,889,789 15,262,639
Net assets(deficit):
Invested in capital assets,net of
related debt 18,926,908 22,994,210 (10,381,162) (6,669,524)
Restricted for debt service 1,512,999 12,301,167 369,212 —
Restricted for other 778,449 1,697,326
Unrestricted (19,770,730) (1,845,695) (242,605) (248,216)
Total net assets(deficit) 1,447,626 35,147,008 (10,254,555) (6,917,740)
Total liabilities
and net assets $ 34,569,047 64,002,392 2,635,234 8,344,899
31 (Continued)
DRAFT 6l3t2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
2003
Old
Assets Electric Water Greenwood
Current assets $ 6,364,255 2,787,538 —
Noncurrent assets:
Capital assets,net 19,281,281 41,988,334 —
Restricted assets 3,463,712 15,603,736 2,612,767
Other assets 2,030,162 1,173,330 174,938
Total noncurrent assets 24,775,155 58,765,400 2,787,705
Total assets $ 31,139,410 61,552,938 2,787,705
Liabilities and Net Assets (Deficit)
Current liabilities $ 4,178,289 11,679,338 —
Noncurrent liabilities:
Long-term debt, net of current portion 25,607,104 15,694,944 12,287,705
Other liabilities 3,594,770 1,942,292 Total liabilities 33,380,163 29,316,574 12,287,705
Net assets(deficit):
Invested in capital assets, net of related
debt 18,685,593 17,118,808 (9,500,000)
Restricted for debt service 601,072 13,130,852 —
Restricted for other 867,641 1,449,806 —
Unrestricted (22,395,059) 536,898 —
Total net assets(deficit) (2,240,753) 32,236,364 (9,500,000)
Total liabilities and net assets $ 31,139,410 61,552,938 2,787,705
32 (Continued)
DRAFT 6/3l2005 8:55 AM�
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
Statements of Revenues, Expenses,and Changes in Net Assets
2004
Old Gray's
Electric Water Greenwood Crossing
Operating revenues:
Sales to customers $ 15,689,878 7,089,121 — —
Other operating revenues 2,134,410 942,593 — _
Operating expenses (12,456,058) (5,861,134) — —
Depreciation (891,202) (1,811,371) — _
Nonoperating revenues (expenses) (1,170,352) (449,367) (388,555) —
Income (loss)before
capital contributions 3,306,676 (90,158) (388,555) —
Capital contributions 381,703 3,000,802 (366,000) (6,917,740)
Change in net assets 3,688,379 2,910,644 (754,555) (6,917,740)
Total net assets
(deficit)—beginning
of year (2,240,753) 32,236,364 (9,500,000) —
Total net assets
(deficit)—end of
year $ 1,447,626 35,147,008 (10,254,555) (6,917,740)
2003
Old
Electric Water Greenwood
Operating revenues:
Sales to customers $ 14,256,511 6,508,637 —
Other operating revenues 2,015,369 776,067 —
Operating expenses (11,166,634) (5,293,442) —
Depreciation (808,703) (972,836) —
Nonoperating revenues(expenses) 519,779 3,418,162 —
Ineome (loss)before capital
contributions 4,816,322 4,436,588 —
Capital contributions 2,883,951 5,641,641 (9,500,000)
Change in net assets 7,700,273 10,078,229 (9,500,000)
Total net assets (deficit)—
beginning of year (9,941,026) 22,158,135 —
Total net assets (deficit)—
end of year $ (2,240,753) 32,236,364 (9,500,000)
33 (Continued)
............................................
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
Statements of Cash Flows
2004
Old Gray's
Electric Water Greenwood Crossing
Net cash provided by(used in):
Operating activities 6,080,642 3,201,472 — —
Noncapital financing activities (2,816,310) — — —
Capital and related financing
activities (569,771) (4,860,491) (956,316) 8,026,261
Investing activities 70,471 518,225 15,293 23,327
Net increase(decrease) in cash
and cash equivalents 2,765,032 (1,140,794) (941,023) 8,049,588
Beginning cash and cash
equivalents 7,170,040 5,121,458 2,612,767 —
Ending cash and cash
equivalents S 9,935,072 3,980,664 1,671,744 8,049,588
2003
Old
Electric Water Greenwood
Net cash provided by(used in):
Operating activities S (19,891,481) (313,572) —
Noncapital financing activities 25,633,032 — _
Capital and related financing
activities (3,591,933) 1,583,003 2,612,767
Investing activities 75,373 575,485 —
Net increase in cash and cash
equivalents 2,224,991 1,844,916 2,612,767
Beginning cash and cash equivalents 4,945,049 3,276,542 —
Ending cash and cash equivalents S 7,170,040 5,121,458 2,612,767
34 (Continued)
DRAFT 6/3/2005 8:55 AM
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Notes to Financial Statements
December 31, 2004 and 2003
(13) Contingencies
The District is one of a group of approximately 50 utilities involved in a matter relating to the disposal of
small amounts of PCB wastes at two sites. The clean up of the two sites falls under the federal EPA
Superfund Program. The District believes it has resolved this matter with the EPA, with the District
funding its portion of the cleanup expenses, as long as expenses do not exceed 560,000,000. If cleanup
expenses exceed 560,000,000, the District will be liable for their portion of the additional cost. The
District's management believes that it will not incur any additional liability.
35
DRAFT 613/2005 8:56 AM
Exhibit I
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Divisional Combining Balance Sheet
December 31,2004
(Unaudited-See accompanying independent auditors'report)
Electric Water Old Gray's
Assets Operations Operations Greenwood Crossing Eliminations Total
Current assets:
Cash mid cash equivalents $ 5,387,507 317,378 5,704.885
Accounts receivable 2,413,429 1,012,586 (1,308) 3,424,706
Materials and supplies 394,583 153,498 - - -- ,081081
Repaid and expenses and other current assets 170,554 227,717 - 398,271
Total ctiman assets 8,366,072 1,711,179 - (1,308) 10,075,943
Noncurrent assets:
Capital assets,net 19857,760 46,285,809 - - - 66,143,569
,
Land held for sale - 430,100 - - - 430,100
Restricted assets:
Cash and cash equivalents 4,547,565 3,663,286 1,671,744 8,049,588 - 17,932,183
Investments - 808,470 -- - - 808,470
Special assessment receivable - 10,591,683 - 10,591,683
Tax receivable 709,412 709,412
Other assets 1,797,650 511,865 254,078 295,311 - 2,858,904
Total noncurrent assets 26,202,975 62,291,213 2,635,234 8,344,899 99,474,321
Total assets $ 34,569,047 64,002,392 2,635234 8,344,899 (1,308) 109,550,264
Liabilities and Net Assets(Deficit)
Current liabilities:
Current maturities of long-tenn debt $ 2,535,434 786,123 10,000 --- - 3,331,557
Accounts payable 1,500,144 2,056,223 (I,308) 3,596CustomerCCustomerdeposits 156,638 39,393 - - - 196,03131
Accrued interest 585,117 148,712 242,604 248,216 - 1,224.649
Accrued payroll 310,041 136,873 - - 446,914
Total current liabilities 5,087374 3,167,324 252,604 248,216 (1308) 8,754,210
Noncurrent liabilities:
Long-term debt 23,682,957 24,082,287 12,282,479 15,014,423 - 75,062,146
Deferred revenue 4,351.090 1.605,773 354,706 - 6,311.569
Total noncurrent liabilities 28,034,047 25,688,060 12,637,185 15,014,423 91,373,715
Total liabilities 33,121,421 28,855,384 12,989789 15,262,639 (1,308) 90,127,925
Net assets(deficit):
Invested in capital assets,net of related debt 18,926-908 22,994,210 (10,381,162) (6,669,524) - 24,870,432
Restricted for debt service 1.512,999 12,301,167 369,212 - - 14,183,378
Restricted for other 778,449 1,697,326 --- - -- 2,475,775
Unrestricted (19 770,730) (1,845,695) (242,605) (248,216) (22,107,246)
Total net assets(deficit) 1,447,626 35 147r,008 (10 254,555 (6,917,740) 19,422,339
To[.]liabilities and act assets(deficit) $ 34,569,047 64,002,392 2,635,234 8,344,899 (1,308) 109550,264
See accompanying independent auditors'report,
36
DRAFT 6/3/2005 8:56 AM
Exhibit II
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Divisional Combining Statements of Revenues,Expenses,and Changes in Fund Equity
Year Ended December 31,2004
(Unaudited—See accompanying independent auditors'report)
Electric Water Old Gray's
Operations Operations Greenwood Crossing Eliminations Total
Operating revenues:
Sales to consumers $ 15,689,878 7,089,121 — -__ 22,778,999
Interdivisional sales 1,412,884 1,166 — — (1,414,050) —
Standby fees 25,420 196,080 -- — 221,500
Connection fees 229,265 343,581 --- — 572,846
Other 466,841 401,766 —
-- (210,924) 597,683
Total operating revenues 17,824,288 8,031,714 — — (1,684,974) 24,171,028
Operating expenses:
Power purchases 8,269,483 1,460,368 — — (1,414,050) 8,315,801
Operations and maintenance 1,906,348 2,697,016 — — --- 4,603,364
Administrative and general 1,693,424 1,413,250 — -- (270,924) 2,835,750
Consumer services 586,803 290,500 — — 877,303
Depreciation 891,202 1,811,371 — — — 2,702,573
Total operating expenses 13,347,260 7,672,505 — — (1,684,974) 19,334,791
Operating income 4,477,028 359,209 — — — 4,836,237
Nonoperating revenues(expenses):
T zoi revenues — 354,706 -- — 354,706
Income from investments 70,471 518,225 15,293 23,327 — 627,316
Interest expense (1,241,165) (967,592) (758,554) (23,327) — (2,990,638)
Gain on sale of capital assets 342 -- — — 342
Total nonoperating expenses (1,170,352) (449,367) (388,555) — — (2,008,274)
Income(loss)before capital
contribution 3,306,676 (90,158) (388,555) — — 2,827,963
Capital contributions,net 381,703 3,000,802 (366,000) (6,917,740) (3,901,235)
Change in net assets 3,688,379 2,910,644 (754,555) (6,917,740) -- (1,073,272)
Net assets(deficit),beginning of year (2,240,753) 32,236,364 (9,500,000) — 20,495,611
Net assets(deficit),end of year $ 1,447,626 35,147,008 (10,254,555) (6,917,740) — 19,422,339
See accompanying independent auditors'report,
37