HomeMy WebLinkAbout12 - Attachment 3 - Draft Preliminary Official Statement (Water System Refunding Revenue Bonds Series 2015)DRAFT
ATTACHMENT 5
P RELIMINARY OFF ICIAL STATEMENT DATED ______________, 2015
NEW ISSUE – BOOK-ENTRY ONLY RATING S: See “RATINGS” herein
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Bond Counsel, under existing statutes, regulations,
rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described in this
Official Statement, interest (and original issue discount) on the 2015 Bonds is excluded from gross income for federal income tax purposes and is
not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the
further opinion of Bond Counsel, interest (and original issue discount) on the 2015 Bonds is exempt from State of California personal income tax.
See “TAX MATTERS” with respect to tax consequences relating to the 2015 Bonds.
$__________*
T R U C K E E D O N N E R PU B L IC UT IL IT Y D IS T R IC T
W A T E R S Y ST E M RE FU ND IN G R E V E NU E B O ND S, S E RI E S 20 15
D ated: D ate of Issuance D ue : Novem ber 15, as set for th be low
T he 2 0 1 5 B o nd s ar e bein g issu ed to pr ovi d e fu n d s t o (i) a d va nce refu nd a por ti on o f the cu rr ent ly ou tsta n di n g T ru ck e e D o n ner Pu bl ic Utili ty D i s trict
Re fun di n g R e v enu e C ert i fi cat e s o f Pa rti ci pati o n (W a ter S y st e m I m pr ov em en t Pro jec ts ) S er ie s 2 0 0 6 , (ii) pu r cha s e a mu nicipa l bo n d i nsu ra n ce po li cy to gu a ra nte e
pay m e nt o f th e pri n ci pa l o f an d in te res t on the W at er S y st em R e fu n di ng R e venu e B o nd s, S eri e s 2 0 1 5 (th e “2 01 5 B on d s”), (iii) pu rc ha se a d ebt se r vi c e r eser ve
in su ra n c e po li cy fo r dep o sit in t he R e serv e Fu n d, a n d (i v) pa y co st s o f i ssu a nc e of t he 2 0 1 5 B on d s, all a s m or e fu ll y d e scri bed h er ei n.
T he 2 01 5 B o nd s a r e b ei ng i ssu e d in fu lly r egi ste red for m a nd wh en i ssu ed wi ll b e r eg ist er ed in t he na m e o f C e de & C o., a s n o mi n e e o f T h e D ep o si tor y
T rust C o m pa n y, N ew Y ork , N e w Y ork . Pu r c haser s of the 20 1 5 B on d s wi ll n ot r ec e iv e secu ri ti es re pr e sen ting t h eir b en eficia l o w n er sh ip in t h e 20 1 5 B ond s pu rc ha se d .
Inter est o n t h e 2 0 1 5 B o nds i s paya ble o n N ov em b er 1 5 , 2 0 1 5 a nd ea ch M a y 1 5 a nd N ove m ber 1 5 t h er eafter, u ntil t he ma tu rit y t h er eo f. T he p rin cipa l o f a nd in te re s t
on th e 2 0 1 5 Bond s a re paya bl e b y t h e T ru st e e to C ed e & C o. an d su c h i nt er est a nd prin ci pa l pa yme nt s a r e t o b e di sbu rse d to t he ben e fic ia l o w ner s o f th e 2 0 1 5 Bond s
thr ou g h th eir n o mi ne e s.
Th e 2 0 1 5 B o nds ar e su b je c t to o pt io na l, m an dato r y an d e xtr ao r di n ar y r ede mp tio n as m o re fu lly desc rib e d he r e in.*
T he 2 0 1 5 B o n d s a r e b ei ng i ssu ed pu r sua n t t o th e I n d e ntu re o f T ru st, da t e d a s o f Ju n e 1 , 2 0 15 , b y a nd b e t we e n th e T ru ck ee D o nn er Pu bli c U tility D i stric t
a nd T he B a nk o f N e w Y ork M ell on T ru st C o mpa ny , N .A., a s tru st e e. T h e 2 0 1 5 B ond s a r e li mit ed ob li gati on s o f t h e D is tri ct pa ya bl e so le ly fr om N et W ater S y ste m
Re ve nu es o f t h e D i stri ct’s W a te r Sy st em r e m ai ni ng a ft er pa y m en t o f O pera ti on a nd M ain te nan c e C o st s o f t h e W a t er S y stem, a nd a mou nts o n d ep osit i n c erta in fu nd s
a nd a c cou nt s cr ea ted u n d er th e I n de ntu r e, in c lu di ng t he R a te Sta b ili za ti o n F u nd, su bj e ct to c er ta in r estr i cti o n s d es cr ib ed h erein .
T he o bl iga t io n o f th e D i strict t o pa y princ ipa l o f an d i nter e st on t h e 2 0 1 5 B on d s i s pa ya bl e fro m N et W at er S y ste m R ev e nue s on a parit y wit h t h e Pa ri t y
O bli gatio n s, w hich a ft er t he refu n din g c on te m pla ted her e in , wil l b e ou t sta n di ng in th e a ggr e gat e pri nc ipal a m ou nt o f a p pro xi ma tel y $_______, as furth er des cr ib e d
herein . T he D istri ct ma y in cu r a ddit io na l ob liga tio n s paya bl e fro m N et W a t er S yst e m R e ve nu e s on a pa rity wi th th e o bl iga tio n to pa y prin c ipa l o f a n d i n ter e st on th e
2 01 5 B ond s, su bject to t h e t er m s an d co n diti o n s o f th e I nd e ntu r e, a s m or e fu lly d e scri b ed h er ei n. T h e D istri c t o w n s a n d o p erate s a W at er S yst e m an d an El ectri c
Sy st e m bu t t h e r e v enu es o f t he D i strict’s E l e ctri c S y st e m a r e not pl edg e d t o th e pa ym e nt o f pri n cipa l o f a n d i nt er est on t h e 20 1 5 Bo n ds a nd pri nc ipal o f a nd i nt er e st
on t he 2 01 5 B on d s a r e n ot pa ya ble fr o m r e v enu e s of t h e D i strict’s E l e ctri c S y st e m.
T he sch edul ed pa y m ent o f t h e pri nc ipa l o f a nd i ntere st o n th e 2 0 1 5 B on d s w h en du e wil l b e gu arant e e d u n der an i n suran c e po licy to b e i ssu ed c o ncurr e ntl y
wi th t he d el iv er y o f th e 2 0 1 5 B o n ds b y _________________.
[IN S UR E R LO G O ]
TH E 2 0 1 5 B O N D S AR E N O T A D EB T O F T H E S T AT E O F C AL I FO R N I A, O R A N Y O F I T S PO L I TIC AL SU B D I VI SIO N S (O TH ER TH A N
TH E D IST R I C T ), AN D N EI TH E R T H E S T A TE , N O R AN Y O F IT S P O LIT IC AL SU BD I VI SIO N S (O T H E R TH AN T H E D IS T R IC T), IS L I AB L E
TH ER E O N , N O R I N AN Y E VE N T SH A LL T H E 2 0 1 5 B O N D S B E P A Y AB L E O U T O F A N Y FU N D S O R P R O P E R T IE S O F T H E D I ST R IC T O T H E R
TH AN T H E N E T W A TER SY STEM R E VE N U ES AN D O TH ER M O N E Y S P L E D G ED T H E R E F O R U N D E R TH E IN D E N T U R E . T H E O B L IG AT I O N
O F T H E D IS T R IC T T O M AK E P AY M EN TS I N AC C O R D AN C E W IT H T H E I N D E N TU R E I S A L I M I T E D O BL I G ATIO N O F T H E D I S T R IC T A S
SET F O R TH IN T H E IN D EN T U R E AN D TH E D I ST R IC T SH AL L H A V E N O L I ABILI T Y O R O B L I G ATI O N I N C O N N EC T I O N H ER E W IT H
EX C E PT WIT H R E SP E C T TO S U C H P AY M EN T S TO B E M AD E P U R SU AN T TO T H E IN D E N TU R E . TH E 2 0 1 5 B O N D S D O N O T C O N STI T U T E
AN I N D E B T ED N E S S O F T H E D I ST R IC T I N C O N T R A VE N T IO N O F AN Y C O N STI TU TIO N AL O R ST AT U TO R Y D EBT L IM IT A T IO N O R
R E ST R IC TI O N .
T H IS CO VER P AG E C O N T AIN S C E RT AIN I N FO R M AT IO N F O R R E F E R E N CE O N LY . IT IS N O T A S U M M AR Y O F T H IS IS S UE. IN V EST O R S
AR E AD VIS ED T O RE AD T H E E N T IR E O FFIC I AL ST AT E M EN T TO O B T AIN IN FO RM AT IO N E S SEN T IA L T O T H E M A KIN G OF AN IN FO R M E D
IN V EST M E N T D E C I SIO N .
____________________________________
MATURITY SCHEDULE – See Inside Cover Page
____________________________________
Th e 2 0 1 5 B o n ds a re o ffe re d when , a s a nd if iss u e d a n d re ce iv ed b y th e U n d er wr ite r , su b je ct to th e a p p rov a l o f th e v a lid , leg a l a n d b in d in g n a tu re o f th e
2 01 5 Bo nds b y S tra d lin g Yo cc a C a rlso n & Ra u th , a Pro fe ss io n a l Co rp o ra tio n , S a n Fra n cisc o , Ca li fo rn ia , Bo n d C ou n se l, a n d ce rta in o th e r c o nd itio n s. C e rta in le g a l
m a tte rs will b e p a s se d up o n fo r th e In s u re r by its c o u n se l, an d fo r th e Tr us te e b y its c o u n sel. It is a n ticip a te d th a t th e 2 0 1 5 Bo n d s w ill b e a v a ila b le fo r d e liv e ry
th ro u g h th e fa cilities o f Th e D e p o sito ry Tru st C o m p an y on o r a bo u t ________, 2 0 1 5.
B ra ndis T allm a n
* Prelim in a r y, su b je c t to c h a n g e . This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
D ated: ____________ __, 2 0 15
MATURITY SCHEDULE
$__________*
TRUCK EE DONNER PUBLIC UTILITY DISTRICT
WATER SYSTEM REFUNDING REVENUE BONDS, SERIES 2015
Base CUSIP†: _______
Ma turity Da te
(Novem ber 15) Pr in cipal Am oun t Inter est Ra te Pr ice Yield C USIP †
$ % %
$_________ _____% Term Bon ds due N ovem ber ___, 20___, Price _____, Yield ______% CUSIP †
* Preliminary, subject to change.
† Copyright 2015, American Bankers Association. CUSIP data herein is provided by the CUSIP Service Bureau, managed on behalf of the American
Bankers Association by Standard & Poor’s. This data is not intended to create a database and does not serve in any way as a substitute for the
CUSIP service. CUSIP numbers are provided for reference only. The District, the Financial Advisor and the Underwriter do not assume any
responsibility for the accuracy of such numbers.
No dealer, broker , salesperson or other person has been a uthoriz ed by the District or the Underwrit er to
give a ny infor mation or to ma ke any representati ons other than thos e contained in t his Official Statement in
connecti on with the offeri ng ma de hereby and, if give n or ma de, such other infor mati on or repres e ntations must
not be reli ed upon a s havi ng been a uthoriz ed by t he District or the Underwriter. This Officia l Statement does
not constit ute an offer to sell or the sol icitation of an offer to buy nor sha ll there be any sale of the 2015 Bonds
by a person in any juris dicti on in which it is unlawful for such person to ma ke such an offer, solicitation or sale.
This Official Statement is not to be construed a s a contr act with the purchasers of the 2015 Bonds.
Statements contained in this Official State ment whi ch involve estimates, forecasts or matters of opini on, whether
or not ex pressly so described herein, a re inte nded solel y as suc h a nd are not to be construed as a representa tion
of facts.
The Underwriter has provided the following sent ence for incl usion in t his Official Sta tement:
The Under writer ha s reviewed the infor mati on i n this Official Statement in
accor dance wit h, and as a pa rt of, its responsibilities to i nvestors under the
federal securities la ws a s applied to the facts and circumsta nces of this
transaction, b ut t he Underwriter does not guarantee the acc uracy or
completeness of suc h infor mati on.
The infor ma tion set forth herein has been obtained from official sources whic h are belie ved to be reliable
but it is not guaranteed as to accura cy or complete ness, a nd is not t o be constr ued a s a r epresenta tion by the
Underwriter. The infor ma ti on and express ion of opinions herein are s ubject to change without notice and neither
delivery of this Official Statement nor any sale ma de hereunder shall, under any circumstances, create a ny
implication that there has been no c hange i n the a ffairs of the District since the date hereof.
IN CONNECTION WITH THIS OFFERING, THE U NDERWRITER MAY OVERALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
2015 B ONDS AT A LEVEL THAT MIGHT OTHER WISE PREVAIL IN THE O PEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE
UNDERWRITER MAY OFFER AND SELL THE 2015 BONDS TO CERTAIN DEALERS AND
DEALER BANKS AND BANKS ACTING AS AGENT AND OTHERS AT PRICES LOWER THAN
THE PUBLIC OFFERING PRICES STATED ON THE COVER PAGE HEREOF AND SAID PUB LIC
OFFERING PRICES MA Y B E CHANGED FROM TIM E TO TIM E BY THE UNDERWRITER.
CERTAIN STATEMENTS CONTAINED IN THIS OFFICIAL STATEM ENT REFLECT NOT
HISTORICAL FACTS BUT FORECASTS AND “FORWARD-LOOKING STATEM ENTS.” NO
ASSURANCE CAN BE GIVEN THAT THE FUTURE RESULTS DISCUSSED HEREIN WILL BE
ACHIEVED, AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE FORECASTS
DESCRIB ED HEREIN. IN THIS RESPECT, THE WORDS “ESTIMATE,” “PROJECT,”
“ANTICIPATE,” “EXPECT,” “INTEND,” “BELIEVE” AND SIMILAR EXPRESSIONS ARE
INTENDED TO IDENTIFY FORWARD-LOOKING STATEM ENTS. ALL PROJECTIONS,
FORECASTS, ASSUM PTIONS, EXPRESSIONS OF OPINIONS, ESTIMATES AND OTHER
FORWARD-LOOKING STATEM ENTS ARE EXPRESSLY Q UALIFIED IN THEIR ENTIRETY BY
THE CAUTIONARY STATEM ENTS SET FORTH IN THIS OFFICIAL STATEMENT.
THE 2015 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON AN EXEMPTIO N CONTAINED IN SUCH ACT. THE 2015 BONDS
HAVE NOT BEEN REGISTERED OR QUALIFIED UN DER THE SECURITIES LAWS OF ANY STATE.
The District maintains a website. H owever, the infor mati on presented t here is not part of t his Official
Statement and s houl d not b e relied upon i n ma king an investment decision with respect to t he 2015 Bonds.
T R U C K E E D O N N E R PU B L IC UT IL IT Y D IS T R IC T
B O A R D O F D I R E CT O R S
R ob er t E llis, P r esid ent
J os ep h A gu er a , Vic e P r es id e nt
J eff r ey B end er , D ir e ctor
A nt h on y L a l iotis, D ir ector
P a u l W ar mer da m, D ire ctor
D I S T R IC T ST A FF
M ic ha el D . H oll ey, G ener a l M a na ger
R ob er t M esch er , T r ea su r er a nd Ad min is tr a tiv e S er vic es M a na ger
S PE C IA L SE R V I CE S
G e ne ra l C o unse l
P or t er S imo n
T r u ck ee, C a lifor nia
B o nd C o u nse l
S tr a dlin g Yo cca C ar lso n & Ra u th, a Pr of essi o na l C or por a t io n
S a n F ra ncisco, C a lif or n ia
T rus t e e/E s c ro w Ag e n t
T he B a nk of N ew Y or k M e ll o n T ru st C omp an y, N .A.
L os A n g eles, C a lif or nia
V er ific at io n A g e n t
C a u sey D e mge n & M o or e P .C .
D en v er , C ol or a do
TABLE OF CONTENTS
Page
i
SUMMARY STATEMENT .................................................................................................................................. i
INTRODUC TION ................................................................................................................................................ 1
Genera l ........................................................................................................................................................... 1
REFUNDING PLAN ............................................................................................................................................ 2
Genera l ........................................................................................................................................................... 2
THE 2015 BONDS ............................................................................................................................................... 3
Genera l Provisions ......................................................................................................................................... 3
Transf ers and Exchanges Upon Ter mina tion of Book-Entr y Onl y Sys tem ................................................... 4
Rede mption of the 2015 Bonds ...................................................................................................................... 5
Notice of Redemption .................................................................................................................................... 5
Book-Entr y Onl y Syst em ............................................................................................................................... 6
DEBT SERVICE PAYMENT SCHEDULE ........................................................................................................ 7
SECUR ITY FOR THE 2015 BONDS .................................................................................................................. 7
Li mit ed Obligations Payable Fr om Net Water System Revenues ................................................................. 7
Rate Cove na nt .............................................................................................................................................. 10
Rate Sta bilization Fund ................................................................................................................................ 10
Additi onal Indebtedness ............................................................................................................................... 11
Reserve Fund ............................................................................................................................................... 12
ESTIM ATED SOURCES AND USES OF FUNDS .......................................................................................... 12
BOND INSURANCE ......................................................................................................................................... 12
Bond Insurance Poli cy ................................................................................................................................. 12
TRUCKEE DONNER PUBLIC UTILITY DISTRIC T ...................................................................................... 13
Genera l ......................................................................................................................................................... 13
Land and Land Use ...................................................................................................................................... 14
Governance a nd Ma na gement ...................................................................................................................... 14
District Powers ............................................................................................................................................. 14
E mployees a nd E mployee Benefits .............................................................................................................. 15
Budget Proc ess ............................................................................................................................................. 19
District Insurance ......................................................................................................................................... 19
Risk Mana gement ........................................................................................................................................ 19
Outsta nding Obliga tions .............................................................................................................................. 19
Electric System ............................................................................................................................................ 21
THE WATER SYSTEM OF THE DISTRICT ................................................................................................... 22
W ater Suppl y ............................................................................................................................................... 22
W ater System ............................................................................................................................................... 23
Califor nia Drought and R es ponse ................................................................................................................ 24
W ater Production, Accounts and Sales Re venues ........................................................................................ 27
Largest Customers ........................................................................................................................................ 29
W ater System Revenues............................................................................................................................... 29
Fut ure W ater System Impr ovements ............................................................................................................ 38
FINANCIAL INFORMATION OF THE DISTRICT ........................................................................................ 38
Fina ncial State ments .................................................................................................................................... 38
TABLE OF CONTENTS
(continued)
Page
ii
Historic Operating Results ........................................................................................................................... 38
Projected O perating Results and Debt Servi ce C overage ............................................................................ 40
LITIGATION...................................................................................................................................................... 42
CONSTITUTIONAL LIM ITATIONS ON APPROPRIATIONS AND CHARGES ......................................... 42
Article X IIIB ................................................................................................................................................ 42
Proposition 218 ............................................................................................................................................ 43
Proposition 26 .............................................................................................................................................. 45
Fut ure Initiatives .......................................................................................................................................... 45
APPRO VAL OF LEGAL PROCEEDINGS ....................................................................................................... 45
TAX MATTERS................................................................................................................................................. 46
RATINGS ........................................................................................................................................................... 47
UNDERW RITING ............................................................................................................................................. 48
CONTINUING DISC LOSURE UNDERTAKING ............................................................................................ 48
MISCELLANEOUS ........................................................................................................................................... 49
APP E N DIX A T R UC K EE D O NN E R P UB L IC UT IL IT Y D IS T R ICT
F IN AN C I AL S T AT E M E NT S ................................................................................. A-1
APP E N DIX B D E F IN IT IO N S AN D S UM M AR Y O F T H E IN D E N T UR E ..................................... B -1
APP E N DIX C F O R M O F OP I N IO N O F B O N D C O UN S E L .......................................................... C -1
APP E N DIX D IN F O R M AT IO N C O N C ER N IN G DT C .................................................................. D -1
APP E N DIX E F O R M O F C O NT IN UING D IS C L O S UR E C E R T IF ICAT E .....................................E -1
APP E N DIX F S P E C IM E N M UN IC IP AL BO N D IN S UR AN C E P O LI C Y ...................................... F -1
i
S U M M A R Y S T AT E M E N T
T h is su m m a r y is s u b je ct in a ll resp ects to the m o r e c om p le te in for m a tio n co n taine d in th is O ffic ia l
S ta te m ent , a nd th e o fferin g o f the 2 01 5 Bo nd s to po te ntia l inv es tor s i s m a d e o nly by m ean s of th e e ntire
O ffici a l S tateme nt. C ap itali zed t er m s u sed a nd n ot othe r wis e defi n ed in th is Su m m ary S tat em ent h ave the
m ea nin g s ascrib ed to them i n this O ffic ia l S t ate m ent .
P u r p o se. T he 2 0 15 B o n ds a r e b ein g issu ed to p r o vid e fu n ds to (i) a dva nc e r ef u n d a p or tion of th e
c ur r entl y ou tst a nd in g T r uc kee D on n er P ub lic Uti lity D is trict R efu nd in g R e ve nu e C er tif ica tes of
P ar ticip a tio n (W a t er S ys te m I m p ro vement P r oj ects) S e r ies 2 00 6 , (ii) p u r c ha s e a mu nic ip a l b on d i nsu r a nc e
p o lic y t o gu a r a nte e p a y men t of th e pr inc ip a l of a n d int e r es t on th e 2 01 5 Bo nds, (iii) p u rc ha se a deb t s er vic e
r es er v e i nsur anc e pol ic y f or dep os it in th e R es er v e F u n d, a nd (i v) p a y cos t s of is s u a nce of th e 2 0 1 5 B on ds,
a ll a s mor e fu lly d es c r ib ed her ei n.
S ec u r i ty fo r the 2 01 5 B o nd s . T he 2 0 1 5 Bon ds ar e se cur ed by a pled ge of a ll W a ter S ys te m
R ev enu es of t h e D is tr ic t’s W a t er S ys te m. T h e 2 01 5 B o nds a r e li m it ed ob liga tio ns of t h e D is tr ict pa ya b le
sole ly fr o m W a t er S ys te m R e venu es of th e D istr ict’s W a ter S ys te m r ema inin g a ft er p a y me nt o f Op er a tio n
a nd M a int e na nc e C osts of th e W a t er S ystem a nd a m ou nt s o n d ep os it in c er ta in f u n ds a n d a cc ou nts cr ea te d
u n der the Ind ent ur e, in clu din g th e R a te S ta b iliza tio n Fu nd. T he ob li ga tio n of the D ist r ict to p a y princip a l
of a nd i nt er es t o n th e 2 01 5 B o nds is pa ya b le fr o m N et W a t er S ys te m R eve nu es o n a p ar ity wit h t h e P a r ity
O bliga ti o ns, w hic h a fter t he r efu n din g co nt em p la te d h er ein, w ill b e ou ts ta n din g i n th e a g gr ega t e pr inc ip a l
a mou nt o f a p p r ox ima t ely $_______, a s fur ther d esc r ibe d h er ei n. T he D is trict ma y i ncu r a d dit i o na l
ob liga t io ns pa ya b le o n a pa rity w it h t he obli ga tio n to p a y p rincipa l of a n d int er es t o n t he 2 01 5 B o nds in t h e
fut ur e a s desc rib ed h er ein. T he D is trict o w ns a nd op er a t es a n E lectr ic S ys t em bu t th e r ev enu es of t h e
E lect r ic S yst e m a r e n ot pled ged to t h e p a ym e nt o f p r inc ip a l of a nd int er est on th e 2 0 1 5 Bonds a nd the
p r inc ip a l o f a nd i nt er est o n t he 2 0 1 5 B o n ds a r e n ot p a ya b le fr om r e v e nu es of t he E le ctr ic S ystem . S e e
“S EC UR I T Y F O R T HE 2 0 15 B O N D S — Flow of F u n ds ” h er ein.
T H E 20 1 5 B O ND S AR E N OT A D E BT OF T H E ST AT E O F C AL IF O R N IA, O R AN Y O F IT S
P O LIT IC AL S UB D I V I S IO N S (O T HER T H AN T H E D IS T R ICT ), A N D N EIT H ER T H E ST AT E O F
C AL IF O R N I A, N OR AN Y O F IT S P O L IT IC AL S UB D IV IS ION S (O T H ER T H AN T H E D IST R ICT ), IS
L IA BL E T H E R E O N, N O R IN AN Y E VE N T S H AL L T H E 20 15 BO N D S B E P AY A BL E O UT O F AN Y
F UN D S O R P R O P ERT IES O F T H E D I ST R ICT O T H E R T H AN T H E N ET W AT E R S YST E M
R E VE N UE S AN D O T H ER M O NE YS P L E D G E D T H E R EF O R UN D E R T H E I N D E NT UR E . T H E
O B L IG AT I O N O F T H E D IS T R ICT T O M AK E P A YM E N T S IN AC C O R D AN C E W IT H T HE
IND E NT UR E IS A L IM I T E D O BL IG AT IO N O F T H E D IST R IC T AS S ET F O RT H I N T H E
IND E NT UR E AN D T H E D IST R ICT S HAL L HA VE N O L IAB I L IT Y O R O B L IG AT IO N IN
C O N N E C T IO N H E R E W IT H E XC EPT W IT H R ESP E C T T O S UC H P A YM E N T S T O BE M AD E
P UR S U AN T T O T H E IN D ENT UR E . T H E 201 5 B O N D S DO N O T C O NST IT UT E AN
IND E BT E D NE S S OF T H E D IST R ICT IN C O NT RA VE N T IO N O F AN Y C O N S T IT UT IO N AL O R
ST AT UT O R Y D E BT L IM IT AT I O N O R R ES T R ICT IO N .
R efu n d in g P la n. A p or tio n of t he p r oc e eds of t he 20 1 5 B o nds a nd c er ta in ot h er m on ey w ill b e
tra ns fer r ed to T he Ba nk of N ew Y or k M e ll on T r u st Co mp a n y, N .A., as tr ust ee w ith r esp ect to th e 20 0 6
C er tif ica tes, to r efun d a por tio n of th e cu r r ent ly ou ts ta nding 2 00 6 C er tifica t es on N o v em b er 1 5 , 2 01 6. S ee
“IN T R O D UC T ION – R efu n din g P la n” h er ei n.
P a rit y O b lig a tions. After th e r efu nding c ont emp la t ed h er ein, th e D is tr ic t w ill ha v e a p pr ox ima t el y
$________ a ggr ega t e p r inc ip a l a m ou nt of P a r ity O b liga tio ns p a ya b le fr o m N et W a ter S ys te m R evenu es o n
a par it y w ith th e 2 0 1 5 Bo nds . T he D istr ict ma y inc u r a ddit i ona l ob liga ti ons o n a pa r it y wit h th e 20 1 5
Bo n ds , su bj ect to th e t er ms a nd c on dit io ns desc rib ed u nd er th e ca p tio n “SE C UR IT Y F O R T H E 20 15
ii
BO N D S — A d dit io na l I ndebt ed ness” h er ein. S ee “T H E D IS T R ICT — O ther O u ts ta nd i ng O b li ga tio ns ”
h er ein f or a dis cu ss io n of t he D is tr ict’s ou ts ta nd ing d eb t .
R a te Co vena nt . T he I n d ent u re w ill r equ ir e t h e Distr ic t, to th e fu lles t ex t ent p er m it te d b y la w, t o
fix a nd p r esc rib e, a t the c o mm e nc em ent of ea c h F isca l Y ea r , r a tes a nd c ha r g es for t h e W a ter S er vic e
p r ov id ed b y t he W a ter S ystem , w hic h a r e r ea s o na bl y exp ect ed t o b e a t lea s t su ffic ie nt to yi eld dur ing s u c h
F isca l Y ea r N et W a ter S yste m R ev enu e s equ a l to 1 25 % of th e D eb t S er v ic e pa ya b le in s u ch F is ca l Y ea r ;
p r ov id ed, h o w ev er , tha t for p ur poses of th e f or eg oin g co v ena nt, W a ter S ys te m R evenu es in su c h F is c a l
Y ea r do n ot inc lu d e a n y a mou nt tra ns f er r ed fr o m t he R at e S ta biliza ti on Fu nd to th e W ater S ys te m R ev enu e
F u nd in ex c ess of 2 5 % of t he D eb t S er v ic e p a ya ble in su ch Fis c al Y ea r. T he D ist r ict ma y ma ke a d ju st me nts
fr om ti m e to ti me i n s uch r a tes a nd c ha r g es a nd ma y ma k e s u ch c la ssifica ti o n ther eo f a s it d e ems n ec es sa r y,
b u t wil l not r e duc e th e r a tes a n d c ha rg es th en i n ef fe ct un l ess t he D ist r ict r ea s ona b l y ex p ect s the N et W a ter
S ys te m R eve nu es fr o m su c h r edu c ed r a tes a nd c ha r g es t o b e su ffic ient to me et th e f or ego in g r equ ir e me n ts.
S ee “S E C UR IT Y F O R T H E 201 5 BO N D S — R ate C ov ena nt” her ein.
R eserve F u nd . A R es er v e F u nd for the 2 0 15 Bon ds is esta b l ish ed p ur s u a nt to t he I n d entu r e in a n
a mou nt e qua l t o the R es er v e R equ ir emen t. [T he ter m “R es er v e R equ ir e men t” for the 20 1 5 Bon ds m ea n s
init ia ll y: (i) $_______; a nd th er ea f t er (ii) th e les s er of the a mou nt s et f or th in cla u s e (i) or t he ma x imu m
p a y me nts of pr inc ip a l o f a nd int er est on the 20 1 5 Bo nds pa ya b le in th e th en -cu r r ent or any futu r e F isca l
Y ea r .] ___________ ha s com m itt ed to issu e, s imu lt a n eou sl y wit h the issu a nc e o f th e 20 1 5 B o n ds, a
mu ni cip a l b o nd d eb t ser vice r es er v e insu r a nc e p ol ic y in t h e p r i nc ip a l am ou nt of $________ for dep osit i n
th e R es er ve F u n d t o s a tis fy th e R es er ve R equ ir em ent . S ee “S E C UR IT Y F OR T H E 2 01 5 BO N D S —
R es er v e F u nd ” h er ei n.
R a te S t abiliza tio n F u n d . T he I n d entu r e c o ntinu es t h e R a te S ta biliza ti o n F u n d whi c h is h eld b y th e
D istr ic t. T he D is tr ict ma y w it h dr a w a ll or a ny p or tion of th e a m ou nts on d ep os it in th e R a te S ta biliza ti o n
F u nd a n d t ra nsf er s u ch a mou nts to the W a ter S ystem R eve nu e F un d f or a pp lica ti on in a ccor da nc e wit h th e
Inde ntu r e. In th e e vent tha t a ll or a por tio n of th e 2 0 1 5 B on ds a r e disc ha r ged i n a c cor da n c e w it h th e
Inde ntu r e, t h e D istr ic t ma y tr a nsfer a ll or a ny p or tion of s u ch a m ou nts for a pp lica tion t o th e p ay men t of th e
2 0 15 B o nds in a cc or da nc e wit h t he I nd entu r e. O n t h e da te of is su a nc e of t h e 2 01 5 B o nds, th e D istr ict ha s
a ppr ox ima t ely $_______ on d ep os it i n th e R a te S ta biliz ation F u n d. S ee “S EC UR IT Y F O R T H E 20 1 5
BO N D S — R a t e S ta biliza tio n Fu nd” her ei n.
R ed emp t io n . T he 20 1 5 Bon ds a r e s u bject to op tiona l, ma nda tor y a nd ex tr a or d ina r y r ed em p t io n as
d es cr ib ed her ein.
T he D ist r ic t. T h e D is tr ict wa s for m ed a nd op er a tes u nd er th e S tate of C a lif orn ia P u b lic Ut i lit y
D istr ic t A ct. T h e D istr ic t is situ a ted in th e S ier r a N eva d a mou nta ins , 1 8 0 mil es nor th ea st of S a n Fra nc isc o,
C a lif or nia , 32 mil es w es t o f R en o, N eva da , a nd 1 2 m i le s nor th of L a k e T a ho e, Ca lif or n ia . T h e D istr ic t wa s
or ig ina lly es ta blis h e d o n Au gu st 9, 19 2 7 a nd is cu r r ent ly c o mp r is ed of a p p r ox ima t ely 4 5.5 s qu a r e mil es i n
ea s t er n N eva da C ou nt y, C a lifor nia a nd a p pr ox ima t e ly 1 .5 s qu a r e m iles in P la c er C ou nt y, C a lifor n ia ,
inc lu di n g the T ow n of T rucke e. T he D ist r ict is th e so le pr ovid er of wa t er ser vi c e wit hi n th e b oun da ri es o f
th e D is tr ict.
T he D is tr ic t cu r r ent ly p r ov id es wa ter a nd elec tr ic s er v ic e to c usto mer s wit h in t he T r u ck e e a n d
D on n er L a k e a r ea s , wit h t he W a ter a nd E l ec tr ic s ys t em s, r es p ectiv ely, ea ch ma int a i n ed a n d op era ted
sep a r a tely. S pec if ica l ly, the W a ter S ys te m t er r itor y inc lu d es c us to m er s in th e d ow nt o w n T r u ck ee ar ea ,
Ar mstr o n g a nd B l itz T ra cts, G lens h ir e, T a ho e D o nn er , M ea d ow P a rk, G a t ewa y, P r osser H eig ht s , P r osser
L a k evie w, D o n ner L a k e a nd H ir sch da le. T he D is tr ict is a ppr ox ima t el y 76 % d ev elop ed ba sed o n th e cu r r ent
p r oject io n of b u ild ou t, whic h is p r oject ed to b e in 2 0 25 wit h r esp ect t o com m er c ia l dev elop m ent, a nd i n
2 0 30 wit h r esp ect to r es id e nt ia l dev elop m e nt.
iii
T r u ck ee was es ta b lis h ed a s a com mu nity in 1 8 62 a nd b eca m e a n i mp or ta nt loc a t io n o n th e C ent r a l
P a cific R a ilr oa d, th e fir s t tra ns c ont in enta l r a ilr oa d c o mp l et ed in 1 86 9. At th e ea s t end of D o n n er P a ss ,
T r u ck ee ha s r e ma in ed a n imp or ta nt tra ns p or ta t ion ce nt er a s the ga te wa y to th e mou nta i n p a s s lea din g to th e
w es t a n d S a n F ra ncis c o. T r uckee w a s inc or por a ted in 19 9 3 a nd ha s b ec om e a c ent er of t our is m du e to t h e
p r ox imit y to th e D on n er P a s s a nd L a k e T a hoe a r ea s ki res or ts a nd s u mm er r ec r ea tio na l a ct ivit ies.
As of M a r ch 3 1 , 20 15, 2 0 15 , the D istr ict pr ov ide d wa t er s er v ic es to a p pr ox ima t el y 12 ,67 7 a ctiv e
c onn ecti o ns.
T he W a ter S ystem c o ns ists of (i) 1 3 deep dr ill ed w e lls, (ii) 25 p u mp s ta tio ns, (iii) 3 6 wa ter s tor a ge
ta nks, w ith a com b ine d st or a g e ca pa cit y of a pp r oxima te ly 1 0.1 millio n ga ll ons, a nd (i v ) a p pr ox ima tely 2 1 7
mi les of pip el ine va r yin g fr o m t w o to 2 4 i n c h es in dia met er . C urrent ly , a ll of t h e W a ter S ys t em’s wa t er is
su p p li ed fr om gr ou nd wat er thr ou gh l oca l d eep dr ill ed w ells o w n ed b y th e D istr ict. T he D is t rict a ls o ha s
su r fa ce wa ter r ig ht s in D o n ner L a ke, M c Gla sha n S pr in gs a nd T on nin i S p r in gs, a lt houg h th e D ist r ict do es
n ot cur r ent ly u ti liz e t h es e su r fa ce wa t er r ights. S ee “T H E W AT E R S YS T EM O F T H E D IST R IC T ” her ein.
Insu r a nce. P a ym ent of p r inc ip a l of a n d int er es t o n t h e 20 15 Bo nds will b e ins u r ed by a mu nic ip a l
b o nd ins u r a nc e p olic y to b e issu ed b y ___________ c on cu r r entl y wit h th e iss u a nc e of th e 2 0 1 5 Bonds . S e e
“BO N D I N S UR A N C E ” h er ein.
1
$__________*
T R U C K E E D O N N E R PU B L IC UT IL IT Y D IS T R IC T
W A T E R S Y ST E M RE FU ND IN G R E V E NU E B O ND S, S E RI E S 20 15
IN T R O D U C T IO N
G ene r a l
T his O f fic ia l S ta t em e nt , inc lu d i ng t he c o v er p a ge, the insi d e c ov er p a ge a nd a ll a pp end ice s h er eto,
p r ov id es c er ta in inf or ma tio n c o nc er ni n g th e s a le a n d d eli v er y o f th e T r u ckee D o n ner Pu blic Ut ilit y D istr ic t
W a ter S ystem R efu nding R ev e nu e B o nds , S er ies 2 01 5 (th e “20 15 B o nds”). T he 2 0 15 Bo nds ar e b ein g
iss u ed p u r sua nt to a n Inde nt u r e of T r ust, da ted a s of Ju ne 1, 2 0 15 (t he “Ind entu r e ”), b y a nd bet w een th e
T r u ck ee D on ner P u b lic U t ilit y D is tr ic t (th e “D istr ict”) a nd T he Ba n k of N e w Y or k M e llo n T r u st C ompa n y,
N .A., L os Ang eles, C a lifor nia , as tr u stee (th e “Tr ust ee”). D escr ip tio ns a nd su mma r ies of va r i ou s
d ocu m e nts h er e ina ft er set f or th d o n ot p ur por t to b e c om p r eh ens iv e or d e fin itiv e, a nd r ef er enc e is ma de t o
ea c h d ocu m en t f or co mp let e deta ils of a l l t er ms a n d c o nd itio ns . A ll sta t em e nts h er ein a r e qu a lifi ed in t heir
e nt iret y b y r ef er enc e to ea c h d oc u m ent . C a pit a liz e d t er ms us e d a n d n ot other w is e d ef ine d h er e in ha v e th e
mea n ings a scr ib ed to t h em i n Ap p e nd ix B — “D E F IN IT IO N S AN D S UM M A R Y O F T H E IN D E NT UR E ”
a tta c hed h er et o.
T he 2 0 1 5 B o nds a r e bein g is su ed t o pr ov ide fun ds to (i ) a dva nc e r efu nd a por tio n of th e cu r r e ntl y
outs ta nd in g T r uckee D on n er Pu blic Uti lit y D ist r ict R ef u n din g R e v enu e C er tif ica tes of P a r ticip a tion (W a ter
S ys te m I mpr ov e m ent P r ojects ) S er ies 2 00 6 (th e “2 0 06 C er tifica t es ”), (i i) pu r cha se a mu nic ip a l b on d
ins u r a nc e p o lic y to gu a r a ntee p a y m en t of the p rincip a l of an d int er est on t h e 20 1 5 B o n ds, (iii) p ur c ha s e a
d eb t s er v ic e r es er v e ins ur a nc e polic y for dep osit in th e R es er v e F un d (a s d ef in ed in Ap p e ndix B a tta c he d
h er eto), and (iv) p a y cos ts of is su a nc e of th e 2 0 1 5 Bo n ds , a ll a s mor e fu lly d es cr ib ed h er ein. S ee
“R EF UN D IN G P L AN ” a nd “E ST IM A T E D S O UR C ES AN D US E S O F F UN D S ” her ein.
P a ym ent of t he pr inc ip a l o f a nd int er est o n th e 2 01 5 B on ds w ill b e ins u r ed b y a mun ic ip a l b on d
ins u r a nc e polic y (the “P olic y”) to b e is s u e d b y ________ (“_______” or th e “Insu r er ”) conc ur r e ntly w it h
th e iss u a nc e o f th e 20 1 5 B on ds . S ee “B O N D IN S UR A N C E ” her ein. A s p ec im en of th e Polic y is set for th
in App en dix F a tta ch e d h er et o.
T he 2 01 5 Bo nds a r e lim it ed ob liga ti o ns of t he D is tr ic t p a ya ble so lely fr om N et W a ter S yste m
R ev enu es, w hic h c ons is t of W a ter S ys te m R ev e nu es of th e D ist r ict’s W a t er S yste m r e ma in ing a fter
p a y me nt of O p er a tio n and M a int ena n c e C os ts of th e W a ter S yste m, a s s u ch ter ms a r e def ined i n Ap p end ix
B a tta ched her et o, a nd a mou nt s on d ep osit in c er ta in funds a nd a cc ou nts cr ea ted un der the I n d ent ur e,
inc lu di n g th e R a te S ta bili za tio n F un d (a s def i ned A p p e nd ix B a tt a che d h er et o). T he D istr ic t ma y incur
a dd itio na l ob li ga tions p a ya bl e o n a pa r ity wit h t he ob ligatio n to p a y p rinc ipa l o f a nd int er est o n th e 2 0 15
Bo n ds in th e fu tur e. S ee “S E C UR I T Y F OR T H E 2 0 15 B O ND S—Ad ditio nal I nd eb t ed nes s ” h er e in. T he
r ev enu es o f t h e E le ctr ic S yst em (a s d ef in ed h er ei n) a r e n ot p le dg ed to th e pa y m e nt of pr incip a l o f a nd
int er est on the 2 0 1 5 Bo nds a nd pr inc ip a l of a nd int er es t on th e 2 01 5 Bon ds a re n ot p a ya ble f ro m r ev en u es
of th e E lec tr ic S ys te m.
T he su mma r ies a nd r ef er en ces t o t h e Ind ent ur e a nd a ll d oc u m en t s , s ta tu tes , r epor ts a nd ot her
ins tr um ents r ef er r ed to her ein d o not pu r p or t to b e c o m p l et e, c o m p r e hens i v e or d e fin it ive, a n d ea c h s uc h
su mma r y or r ef er en c e is qua lif ie d in it s entir et y by r ef er e nc e to t he f u ll In dentu r e a nd ea c h s u c h d oc u m en t ,
st a tut e, r epor t or instru m ent, c op ie s o f w hic h a re a va il a b le f or ins p ectio n a t th e o ff ic es of t he D is tr ict i n
* Preliminary, subject to change.
2
T r u ck ee, C a lifor n ia a nd w il l b e a va ila b le fro m th e T r ust ee u po n r equ est a nd pa y m e nt of du plica ti on cost .
U nles s ot h er w is e i nd ica t ed, a ll fi na nc ia l a nd sta tistica l inf or matio n her ein ha s bee n p r ov id e d b y the D is t rict.
T he D is tr ic t r egu la r ly prepa r es a va r iet y of rep or ts , inc lu d i ng a u dits, b ud g ets a nd r ela t ed
d ocu m e nts . An y r eg is ter ed ow n er of th e 2 0 15 Bon ds (ea ch, a n “O wn er ”) ma y obta in a copy of s uc h r ep or t s ,
a s ava ila b le, fro m t he T r u s tee or t he D istr ic t. A dd iti o na l i nfor ma tio n r ega r din g th e O ff ic ia l S ta tem ent ma y
b e ob ta in e d b y co nt a ctin g the T ru s tee or T r u ckee D o nn er P u b lic Utility D istr ict, 11 5 70 D on n er Pa ss R oa d,
T r u ck ee, C a lifor nia , 9 6 1 6 1; T elep h on e: (5 3 0) 58 7-3 8 96 .
R E FU ND IN G PL AN
G ene r a l
T he Dis tr ict ca u s ed th e ex ecut io n a nd d el iv er y of the 20 0 6 C er tifica tes pu r sua nt to a T r u s t
A gr eemen t, da t ed a s of S ept e mb er 1, 2 00 6 (the “20 0 6 T r u st A gr ee m e nt ”), b y a nd a mo n g th e D is tr ict, th e
T r u ck ee D onner P u b lic Ut il it y D is tr ict F ina nc i n g C or p or a tio n (th e “C or pora tio n”) a n d T h e Ba nk of N ew
Y or k M ell on T ru st C o mp a n y, N .A ., a s tru stee. T he 2 0 06 C er tific a tes a re p a ya ble fr o m i nsta llm en t
p a y me nts ma de u nd er a n Ins t a llmen t P u r cha s e A gr eemen t, da te d a s of S ep t emb er 1 , 2 00 6 (the “2 0 06
Insta l lm ent P u r cha s e A gr e em e nt ”), by a nd b et w een t h e D istr ic t a nd th e C or p or a tion. T he 2 00 6 C er tifica t es
a r e current l y ou ts t a n di ng in th e a g gr ega te pr inc ip a l a m ou nt of $2 0,0 8 0 ,00 0.
T he D istr ict p la ns to a pp ly a p or tion of th e pr oc ee ds of th e 2 0 1 5 B on ds a nd c er ta in ot her moneys
to r efu nd a p or tion of th e cu r r ent ly ou tst a nd in g obliga t ions w it h r es p ect to th e 2 0 0 6 C er tifica tes (s o
r efu n ded, the “R efu n ded 2 0 0 6 C er tif ic a t es ”), a s s ho w n in t h e t a b le on th e f oll ow i n g pa g e. T o eff e ct such
r efu n din g, th e D is tr ic t will ca u s e a p or tion o f th e pr oc e eds of th e 2 01 5 B o n ds a nd c er ta in ot her mo neys to
b e d ep osit ed int o th e E scr o w F un d (th e “20 0 6 E scr ow F u nd”) esta b lis h ed u n d er t he E scro w A gr eem en t
da ted a s of Au gu st 1 , 2 0 1 5 (the “20 0 6 E scr ow A gr eeme nt”), b y a nd b etw een D is tr ict a nd T he Ba n k o f N e w
Y or k M el lo n T r u st C o mp a n y, N .A., a s es c r o w a ge nt (t he “E scr ow A g ent”). S u ch a mou nts wi ll b e h eld in
c a sh or in v es t ed in d ir ect gener a l ob liga tio ns of t h e U n it ed S tates of A m er ica (t he “D ef ea s a nc e
O bliga ti o ns”).
T he ca sh a nd D ef ea s a nc e O b li ga t ions d ep os it ed i nt o th e E scro w F u n d will be sc h edu led t o ma tur e
in su ch a mou nt s a nd at s uch t imes a nd b ea r int er est a t such ra tes a s to pr ov id e a m ou nts s u f ficient to p a y (i)
o n N o v em b er 1 5, 2 01 5 a nd N o vemb er 1 5 , 20 16 , r esp ectiv ely, th e p r incip a l w ith r esp ect t o t h e R efu n d e d
2 0 06 C ert if ica tes ma tu r in g o n su ch r esp ectiv e da t es, p lu s a ccr ued i nt er est evi d enc e d a n d r ep r es e nt e d
th er eby to su c h r es pe cti ve da tes , a nd (ii) o n No v em b er 15 , 20 16 the pr inc ip a l w ith r es p ec t to t h e R ef u nde d
2 0 06 C er tifica t es, p lus a ccru ed int er es t evid en c ed a nd r ep r es e nt ed th er eb y t o th e da t e f ix e d f or p r ep a y ment,
w ithout pr em iu m. T h e f o llow in g ta b le s h o ws th e R efu n d e d 2 0 06 C er tif ica tes, a s w el l a s thos e p or t ions of
th e 20 0 6 C er tifi ca tes tha t will r e ma in ou ts ta nd in g follo w in g t h e r ef u n d in g co nt emp la te d her ein.
3
REFUN DE D AND UN REFUN DED 2006 CER TIFIC ATES *
Tr uck ee Donne r Public U tility Di stric t
Refunding Re ve nue Cer tificate s of Par tic ipation
(W ater Sy stem Improvement Pr oj e cts) Se ries 2006
M aturi ty
(Novem ber 15)
Or iginal
CUSIP †
O rigin al
Pr in cipal
Am oun t
Re fun ded
Pr in cipal
Am oun t
Un r efun ded
Pr in cipal
A m oun t
Red em p tion
D a te
(Novem ber 15)
Red em ption
Pr ice
(% of Par
Am oun t)
2015(1 ) 897818 D L1 $985,000 $435,000 $550,000 n/a n/a
2016(1 ) 897818 D M9 1,020,000 450,000 570,000 n/a n/a
2017 897818 D N7 1,060,000 470,000 590,000 2016 100%
2018 897818 D P2 1,100,000 490,000 610,000 2016 100
2019 897818 D Q0 1,150,000 510,000 640,000 2016 100
2020 897818 D R8 1,205,000 535,000 670,000 2016 100
2021 897818 D S6 1,245,000 560,000 685,000 2016 100
2022 897818 D T4 585,000 585,000 -- 2016 100
2023 897818 D U1 610,000 610,000 -- 2016 100
2024 897818 D V9 635,000 635,000 -- 2016 100
2031 897818 D X5 5,390,000 5,39 0,000 -- 2016 100
2036 897818 D Y3 5,095,000 5,09 5,000 -- 2016 100
(1) The portions of the 2015 and 2016 maturities of the 2006 Certificates identified above as “refunded” will be defeased to their
respective maturity dates.
A ll ca s h a nd D ef ea sa n c e O bliga tio ns in th e E scr o w Fu nd w ill b e ir r ev o ca b ly p l ed ge d to s ecu r e,
w hen du e, th e p a ym ent of t h e p r inc ip a l a n d int er est w ith r esp ect to th e R efu nd ed 2 0 06 C er tif ica t es a nd w ill
n ot b e a va ila ble to p a y th e p r inc ip a l of or int er est on t he 2 0 1 5 Bo nds .
As a r esu lt of th e dep os it a nd inv es t m e nt of fu nds un der th e 2 00 6 E scr ow A gr eement , a ll of t h e
D istr ic t’s ob liga t io ns w ith r esp ec t to t h e R efu n ded 2 00 6 C er tific ates, inc lu din g t h e p l edg e a n d lie n o n t h e
N et W a t er S ys te m R ev en u es w hic h s ecur e th e D istr ic t’s obli ga t ions u n der th e 20 06 Ins t a llment P u r cha s e
A gr eemen t, will b e fully d isc ha r g ed u po n t he iss u an c e of th e 20 1 5 B on ds. T he D is tr ict ’s ob liga ti o ns un der
th e 20 0 6 Ins ta llm ent P ur cha se Agr e eme nt w ith r es p ec t to the p or tio n of the 2 0 0 6 C er tifica t es tha t wi ll
r ema in ou tst a nd i ng fo l lowin g t he issua nc e of th e 20 1 5 B on ds, h o w ever , w ill n ot b e dis c ha r g ed.
T H E 2 0 15 B O N DS
G ene r a l P ro v is io ns
T he 2 0 1 5 Bon ds w ill b e iss u ed in th e a g gr ega t e p r inc ip a l a m ou nt of $__________*. T he 20 1 5
Bo n ds w ill b e da te d a s of th e date of i n itia l issu a nc e t h er eof (the “Iss ua nce D a t e”), will b ea r inter es t fr o m
su ch da t e a t the r a t es p er a nnu m s et for th on th e i nsid e cov er p a ge h er eof , pa ya b le on N o v em b er 15 , 2 0 15
a nd ea c h M a y 15 a nd N o vemb er 1 5 th er ea ft er (ea c h, a n “Int er est P a y ment D a te”), a n d will ma t ure o n t h e
da tes s et for th o n th e ins id e c o v er p a ge her eof. Int er es t on th e 2 0 15 B on ds w ill b e c o mpu t e d o n th e b a s is
of a 36 0 da y yea r of t w elve 30 da y m o nt hs .
* Preliminary, subject to change.
† CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSI P Global
Services, managed by Standard & Poor’s Financial Services LLC on behalf of The American Bankers Association. This data is
not intended to create a database and does not serve in any way as a substitute for CUSIP Services. Neither the Underwriters nor
the District is responsible for the selection or correctness of the CUSIP numbers set forth herein.
4
T he 2 0 1 5 B o nds w ill b e is su ed o nly in fully r egist er ed f or m a nd, w he n is s u e d, w ill b e r e gis t er ed in
th e na me of C ed e & C o., a s no min ee of T h e D ep os it or y T r u st C omp an y, N ew Y or k, N ew Y or k (“D T C ”).
D T C will a ct a s s ecur it ies d epos it or y for th e 2 0 1 5 Bo nds. O wner sh ip int er ests in th e 2 01 5 Bo nds ma y b e
p u r cha sed in b ook-ent r y f or m, in de nom inatio ns of $5 ,0 0 0 or any i nt e gr a l mu lt ip le t h er eof . S ee “— Bo ok
E ntr y O n ly S yst e m” h er ei n a nd Ap p end ix D a tta c he d h er et o.
In th e ev ent tha t th e bo ok-entr y on ly sys tem des c r ib ed h er ein is d is c onti nu e d, th e p r inc ip al o f a nd
r ed emp t ion pr em iu m (i f a ny) o n th e 2 0 1 5 Bon ds a re pa ya b le b y c he c k or dr a f t of the T r ust ee u p on
p r es enta t ion a nd su r r en d er th er eof a t ma tur ity or u p on p r ior r ed em pti o n a t th e off ic e of th e T r u stee in L os
A ng eles , C a lif or nia (th e “O ffic e of th e T ru st ee”). Int er est on th e 2 0 1 5 Bo n ds is p a ya ble o n ea ch I nt er est
P a ym ent D a te to the p er s o n w hos e na m e a p p ea r s on the r eg is tr a tion b oo ks ma int a in ed b y th e T r ust ee (th e
“R eg is tr a t ion B o oks”) a s the O w n er th er e of a s of the clo s e o f b usiness o n th e f ir s t da y of th e ca le nda r mo nt h
p r ec e din g th e I nt er est P a ym ent D a te (th e “R ec or d D a t e”), s u ch int er est to b e p a id b y c h ec k or dr a ft of the
T r u s tee, s ent b y f ir s t cla ss ma il to t h e O w n er a t su ch O wn er ’s a ddr ess a s it a p pea r s on th e R eg is tr at io n
Bo o ks . An O w n er of $1 ,00 0 ,0 0 0 or mor e in p r inc ipa l a m ou nt o f 2 0 1 5 Bon ds ma y, a t su ch O wn er’s op t i on,
b e p a id int er est by w ir e tra ns fer of i mm e dia t el y a va ila b le fun ds i n a ccor da n c e w it h wr itt e n instr u ctio ns
p r ov id ed to t h e T ru stee b y su c h O w ner p r ior t o th e a pp lica ble R ec or d D at e. T he p r inc ipa l o f a n d int er es t
a nd p r emiu m o n th e 2 01 5 B o nds w ill b e p a ya b le in la w ful m on ey o f the U nit ed S ta t es of A meri ca .
Int er est o n a n y 20 1 5 B o n d w ill b e pa yab le fro m t h e I n ter est P a ym ent D a t e p r ec ed in g t h e da t e o f
iss ua nc e t h er e of, u n les s s u ch da te is a fter a R ec or d D a te a n d o n or b ef or e th e su c c eed in g I nt er est P a y m ent
D a t e, in w hic h ca se int er es t t her eon w il l be p a ya b le fr om s u c h I nt er est P a ym ent D a te, or un less su ch da te
is o n or b ef or e N ov em b er 1, 2 0 1 5, in w h ic h c a se int er est ther e on w ill b e p a ya ble fro m t he Iss ua nce D a te.
T ra ns fers a nd E x c ha ng es Up o n T er min a tio n o f B oo k-E ntry O nly S y s te m
In t h e e ve nt tha t t he b oo k-entry s ys t em d escrib ed h erein is a b a ndo n ed, t he 2 01 5 Bo nds wi ll b e
p r int ed a nd d e liver ed a s pr ovid ed i n th e In d entu r e. T h er ea f ter , a ny 2 0 15 B ond ma y, in a ccor da nc e w it h its
ter ms, be tra nsf err e d o n t h e R egis tr a tion Boo ks b y th e p er so n in w hos e na m e it is r eg ist er ed, in p er s on or
b y su c h p er so n’s du ly a u thor iz ed a tt or n ey, u p on su r r end er of su c h 2 01 5 B o nd f or c a nc ellat io n a t the O ff ic e
of the T r u s t ee, a cco mp a n i ed b y d e liv er y of a duly ex ec u ted ins tru ment o f trans f er in a for m a p p r ov ed b y
th e T rus tee. Upo n th e su r r en der o f a 2 01 5 Bon d f or tra nsf er, the T ru ste e is t o iss u e a new 20 1 5 B o nd or
2 0 15 Bo n ds of the sa m e ma tu r ity, for a lik e s eri es an d a g gr e ga te pr i nc ip a l a m ou nt a n d of a u th or iz e d
d eno mina t ion or d eno m ina tio ns. T h e T r u s tee ma y c ha r g e a s u m f or ea ch n ew 2 01 5 B o nd issu ed u po n a n y
tra ns fer . T h e T r u ste e ma y r equ ir e the p a y m ent b y a ny 2 0 1 5 Bond O wn er r equ es t in g a n y su ch tr a ns fer of
a ny ta x or oth er go v er n men ta l cha r g e r equir ed to b e pa id w ith r esp ec t to su ch tr a ns fer . F oll ow in g a ny
tra ns fer of 20 1 5 Bonds, t he T r u stee will ca nc el a n d d est r oy th e 2 01 5 B on ds it ha s r ec ei v ed.
2 0 15 B on ds ma y b e ex c ha ng ed a t the O ff ic e of th e T ru s t ee f or a like a ggr ega te p r inc ip a l a mou nt
of 2 0 15 Bonds of oth er a u thor iz ed de nom ina t io ns o f th e sa m e s er i es a nd ma tu r ity. T he T r us tee ma y c ha r g e
a s um for ea c h n ew 2 01 5 Bon d is s u e d u p o n a ny ex c ha n g e ex c ep t in th e c ase of a n y ex c ha n ge of t emp or a r y
2 0 15 Bon ds for def i nitiv e 2 01 5 B on ds. T h e T r ustee ma y r equ ir e th e pa y m e nt b y th e O w ner requ es tin g
su ch exc ha ng e o f a n y t a x or oth er g o ver n m en ta l c ha r ge r equ ir ed t o b e pa id w it h r es p e ct t o s uc h ex c ha n g e.
F ollo wing a n y exc ha nge o f 2 01 5 B o nds , th e T r u s te e w ill ca nc el a n d dest r o y t h e 2 01 5 B o n ds it ha s r ec ei ved.
T he T r ustee is not r equ ir ed to r e gist er the exc ha n ge o r tr a nsfer of a ny 2 01 5 Bo nd : (i) wit h in 1 5
da ys p r ec ed in g s ele ct ion of 2 0 1 5 B o nds for r e d e mp tio n ; or (ii) sel ect ed for r ed em pt io n.
5
R ed e m p t io n o f t he 2 0 15 B o nds
O ptio nal R ed em pt io n of 2 0 1 5 B o nd s.* T he 2 01 5 B on ds wit h s ta ted ma tu r it ies o n or a fter
N ov em b er 1 5, 2 0__ a r e su bject to r e dem p tio n p r ior to their r esp ect iv e sta t ed matu r ities, a s a w h o le or i n
p a rt on a ny da t e in th e or d er o f ma tu rity a s dir ect ed b y th e D istr ic t in a W r it te n R e qu es t (a s d ef in ed i n
Ap p e nd ix B a tta ch ed h er et o) p r ovid ed t o th e T r us te e at lea s t 6 0 da ys (or s u ch less er nu mb er o f da ys
a ccep ta b le t o t he T r ustee in th e s o l e dis c r et io n of t h e T r us te e, s uch notic e f or t h e co nv en ie nc e o f th e T r u st ee )
p r ior to suc h da t e a n d b y lot w ith i n ea c h matu r ity in int egr a l mu ltip les of $5,0 00 , on or a fter N o vem b er 15 ,
2 0 __, a t a R edemp tio n P r ice (a s def in ed i n Ap p e nd ix B a tt a ched h er et o) e qu a l t o th e p r i nc ip a l a mou nt
th er eof p lu s a c cr u ed int er est t her eon to the da te fix ed f or r ed em pt ion, w it hout p r emiu m.
M a nd ato ry R edemp tio n.* T he 2 0 1 5 B o nds w ith st ated ma tu r iti es o n N ov em b er 1 5 , 2 0 __ ar e su b j ect
to ma nda tor y sin kin g fu nd r e d e mp t i on in p a r t (b y lot ) on ea c h N ov em b er 15 on a nd a fter N ov em b er 1 5 ,
2 0 __, in int egr a l mu ltip les of $5,0 0 0 a t a R edem p t io n P r ice of t h e pri nc ip a l a mou nt t h er eo f p lu s a ccr u e d
int er est ev i d enc ed a nd r ep r es e nt ed th er eb y to the da te fix ed f or r ede mp tio n, wit h ou t pr emiu m, i n
a ccor da n c e wit h th e f o llo w in g s c he du l e:
Red em ption D ate
(N ovem ber 15)
Pr in cipal
Am oun t
$
(1 )
(1) Final Maturity.
E x tr ao r di nary R ed e m p tio n. T he 2 0 1 5 B o nds a r e su b ject t o ex tr a or d inar y r ed em pt ion p r ior to th eir
r esp ec tive s ta te d ma tur ities, as a wh ol e or in p a rt on a n y da te in th e or der of ma tu r it y a nd wit h in ma tu r ities
a s dir ect ed by t h e D istr ict i n a W r itte n R e qu es t p r o vid ed t o t he T r u ste e a t lea s t 6 0 da ys (or su ch less er
nu mb er of da ys a c c ep ta b le to t he T r ust ee in th e s o le discret io n o f th e T r ust ee, su ch not ic e f or th e
c onv eni en c e of th e T r ustee) p r ior to su ch da te a nd b y lot w it h in ea c h ma t u r ity in int egr a l mu lt ip les o f $5,0 0 0
fr om N et P r oc eeds (a s def in ed in Ap p en dix B a tta ch ed her et o), u po n th e t er ms a nd c o ndit ions of, a nd a s
p r ov id ed f or in, th e I nd entu r e, a t a R ed emp tio n P r ic e e qu a l to t h e pr incipa l a mount th er eof p lu s a c cr u ed
int er est t her eo n to th e da te fix ed f or r ed emp t ion, w ith ou t pr e miu m. S ee App en dix B a tta c he d h er eto un der
th e c a p ti ons “P AR T IC UL AR C O VE N AN T S — Ins u r a nce” a nd “P AR T IC UL A R C O VE N AN T S —
E mi n ent D o ma in P r oc eeds” h er ei n, r esp ectiv ely, for a descr ip t ion of th e c ir cu ms ta nc es u n der wh ic h t h e
2 0 15 Bonds c ou ld b e su b ject to ex tr a or di na r y r ede mp t io n fr om N et P r oc e eds of ins ur a nc e or c ond em na t ion.
N otic e o f R e de m p tio n
W h en r e dem p t io n is a uthor iz ed or r equ ir ed, th e T ru st ee wil l giv e n otic e to th e Ow n er s of th e 2 01 5
Bo n ds d es ig na ted f or r ed e mp t io n. N otic e o f redem p t ion w ill b e ma il ed b y fir st cla ss ma il a t lea st 2 0 da ys
b u t not mor e tha n 60 da ys b efor e a ny R edem pt ion D a t e, to the r esp ect ive O w ner s of a ny 2 0 1 5 B on ds
d es ig na ted f or r ed emp tio n a t t heir a ddr es s es a p p ear ing o n t he R egis tr a tio n B oo ks, to the S ecu r ities
D ep os itor ie s a nd t h e I nf or ma tio n S er v ic e s; p r ov id e d th a t, in th e c a s e of n ot ic e of op tio na l r ed em pt ion not
r ela t ed to a n a dva nc e or cu rrent refu nd ing, su c h n oti c e ma y b e g ive n o nl y i f s uf fic i ent f u n ds ha v e b een
d ep os it ed w it h th e T r ust ee t o pa y t he a p plic a b le R ed e mp ti on Pr ice of the 2 0 1 5 B onds to b e r ede em e d,
p r ov id ed tha t su ch n otic e ma y b e ca nc elle d b y th e D ist r ict up on W r itt en R e qu es t de liv er ed to th e T r ustee
n ot less t ha n f iv e da ys p r ior to su c h R ed em p t io n D ate. Ea c h not ic e of r e demp t ion w ill sta t e th e da t e o f
n otic e, t h e R ed em pt io n D a te, the p la c e or p la c es of r ed e mp tio n, th e R edem ptio n P ric e, wil l d es igna t e the
ma tu r it ies , C US IP nu mb er s , if a ny, a nd, if less tha n all 20 1 5 B on ds of a n y su ch ma tu r it y ar e to b e r edee me d,
* Preliminary, subject to change.
6
th e s er ia l nu m b er s of the 2 0 1 5 B on ds of su ch ma tur ity to b e r ed ee m e d b y giv in g th e in dividu a l nu mb er of
ea c h 2 0 15 B on d or b y sta ting tha t a ll 2 01 5 B o nds b et w een t w o s t a t ed nu mb er s , b oth in c lu s iv e, ha v e b ee n
c a lled f or r ed e mp t io n a nd, in the c a se of 2 01 5 Bon ds t o b e r ede eme d in p ar t only, the r esp ect iv e p or tio ns
of the p r in cip a l a mou nt th er e of to b e r ed ee med. E a ch su ch not ic e w il l a lso sta te tha t on th e R e dem p tio n
D a t e th er e wil l b ecom e du e a nd p a ya b le o n ea c h of sa id 2 0 1 5 Bon ds or p a r ts ther eo f des ig na te d f or
r ed emp t ion th e R ede mp t ion Pr ic e th er eof or of sa id sp ecif i ed p or t ion o f th e p r in cip a l t her eof in t h e ca s e o f
a 2 01 5 Bond to b e r e de em ed in p a rt on ly, tog et h er wit h int er est a ccr u ed th er eon to the R ed em p t io n D a t e,
a nd tha t (p r ovid ed that mo n eys for r edem p tio n ha v e b ee n dep os it e d w it h th e T r ust ee) fr o m a n d a ft er su ch
R ed emp t io n D a t e int er est th er eo n cea s es to a ccr u e, a nd w il l r equ ir e tha t su ch 2 01 5 Bonds b e th en
su rrend er ed t o th e T r u stee. N eit h er the failu r e to r ec eiv e su c h not ic e n or a ny def ect in th e n ot ic e or t h e
ma ili ng th er eof w ill a ffect the va l id it y of th e r ed em ptio n of a ny 2 0 15 Bo n d. N otic e o f r edemp t ion of 2 0 1 5
Bo n ds will b e gi v en b y t h e T r ust ee, a t the ex p ens e o f t h e D is tr ict, for a nd on b eha lf of the D ist r ict.
W it h resp ect t o an y n ot ic e of op t io na l r ed em pt io n of 2 0 15 Bo n ds, s u ch notic e will sta t e t hat su c h
r ed emp t ion w il l b e c on d it io na l u p on th e r ec eip t b y t h e T r u stee o n or p r ior t o th e da te f ix e d f or su c h
r ed emp t ion of mo neys su ff ic ient to p a y t he p r in cip a l of , pr e miu m, if a n y, a nd int er est o n su ch 2 01 5 Bo nds
to b e red eem ed a n d t ha t, if su c h m o n eys ha v e n ot b een s o r ec eiv e d, s a id not ic e w ill b e of n o f or c e a n d eff e ct
a nd t h e T r u ste e w ill not b e r equir ed to r ed e e m su c h 20 1 5 Bo nds . In th e ev ent t ha t s u ch not ic e of r e dem ptio n
c onta i ns su ch a con ditio n a nd s u ch mo n e ys a re not so r ec eiv ed, the r ed e mp t io n w ill n ot b e ma d e, a nd th e
T r u s tee wil l w it hin a r ea so na b le tim e t h er ea ft er giv e n otic e, in th e ma n n er in w hic h th e n ot ic e o f r ed em pt io n
wa s given, t ha t su ch m o neys w er e n ot s o r ec ei v ed.
B o ok-E nt ry O n ly Sy ste m
O ne fu lly -reg is t er ed 20 1 5 B o n d of ea ch ma tu r ity of ea c h s er ies w ill b e issu ed i n th e p r in cip a l
a mou nt of th e 2 01 5 Bon ds o f su ch ma tu rit y. Such 2 0 1 5 Bo n d w ill b e r e gis t er ed in th e na m e of C ed e & C o.
a nd will b e d ep os it ed w it h D T C.
T he D istr ic t ma y de c i de to disc o nti nu e u s e of the s yst em o f b oo k -e ntr y tr a ns fer s thr ou g h D T C (or
a s ucc es s or s ecu r ities d ep os itor y). In tha t eve nt , t he 2 0 15 Bonds w ill b e p r inte d a n d d eliv er ed a nd w ill b e
g o ver ne d b y t h e pr ov is ions of the I nd entu r e w ith r esp ect to p a y ment of p r i nc ip a l a n d i nt er est a n d r ig ht s of
ex c ha n ge a n d tra nsf er .
T he D is tr ict ca nn ot a n d do es n ot giv e a n y a ss u ra nc es th at DT C Pa rt icip a nt s or oth er s will distr ib ut e
p a y me nts of princ ipa l of a nd int er es t o n the 2 0 1 5 Bon d s r ec eiv ed b y D T C or its no min e e a s t he r egis t er e d
O w n er , or a ny r ed em p tio n or other not ic es, to the B en e fic ia l O w ner s , or tha t they w ill do so on a timel y
b a sis, or tha t DT C w ill s er v ic e a n d a ct in t h e ma n ner de scrib e d in th is O ff ic ia l S ta te ment. S ee Ap p e ndix D
a tta c hed h er et o f or a dd itio na l in for ma ti o n c o nc er nin g D T C.
7
D E B T SE R V IC E PA Y M E N T S C H E D U L E
S et for th b elo w is a schedu l e of pr incip a l of a nd int er es t du e o n t h e 20 1 5 Bo n ds :
2015 Bon ds
N ovem ber 1 5 Pr in cipal(1 ) Inter est(2 )
2015 Bon ds
Tota l
Parity
O bliga tion s(3 )
T ota l
2015 Bon ds an d
Parity Obli g a tion s
$ $ $
TO TAL $ $ $
(1) Principal payments due on November 15.
(2) Interest payments due on May 15 and November 15.
(3) Represents principal and interest due on the obligations described under the caption “TRUCKEE DONNER PUBLIC UTILIT Y
D ISTR ICT - Outstanding District Obligations - Outstanding Obligations Payable From Water System Revenues” herein.
S E C U R IT Y FO R T H E 20 1 5 B O N D S
L im it ed O b lig at io ns P ay ab le Fr o m N et W ater S y s te m R ev e nues
A ll o f th e W a ter S ys t em R e v enu es , a l l a mou nts held i n th e W a ter S yst em R ev e nu e F u nd (a s
d es cr ib ed h er ein a nd a s d ef ined in Ap p end ix B a t ta ch e d h er et o) a nd the R a t e S ta b iliza tio n F u nd un d er the
Inde ntu r e a nd a ny ot h er a m ou nts (inc lu d ing p roc eeds of th e s a le of th e 2 01 5 Bon ds ) held in a n y fu nd or
a ccou nt es ta b lis h ed p urs ua nt to th e I n dentu r e (ex c ep t the R eb a te F u nd) a r e ir r ev oca b l y p led g ed u n der t h e
Inde ntu r e to s ecu r e th e pa y m e nt of th e p r inc ipa l of a nd int er es t, a nd t h e p r emi u m, if a ny, on t he 2 0 15 B o n ds
in a cc or da nc e wit h th eir terms a nd t h e p r ov is io ns of the Ind entu r e, su b jec t h o w e ver t o the p l ed g e th er eo n
secur ing B o n ds a nd C o ntr a cts (as def in ed i n Ap p end ix B a t ta ch ed h er et o). S ee “- F lo w o f F u nds ” h er ein.
T he W a ter S ys te m R e venu es w ill not be u s e d for any ot h er pu r p os e w hile the 2 0 15 B o nds r ema i n
O utst andin g; p r o vid ed t ha t ou t of th e W a ter S yst e m R ev enu es a nd a m ou nts on d ep os it in th e R a te
S ta biliza tio n F u nd th er e ma y b e a p por tion ed s u ch su ms for su ch p ur poses a s ar e ex pr es s ly p er mitt ed in the
Inde ntu r e a nd d es cr ib ed b elo w.
8
T he D is tr ict is ob li ga te d to ma k e pa y m e nt s of p r inc ip a l o f a nd int er est o n t h e 2 01 5 B on ds so le ly
fr om t h e D is tr ict ’s N et W a ter S ystem R ev e nu es, a lo ng w ith a m ou nts o n d ep os it in th e R a t e S t a biliza ti on
F u nd a n d cer ta in ot h er fun ds a nd a c cou nts cr ea t ed un der th e In d entu r e. T he ter m “N et W a ter S ys tem
R ev enu es” m ea ns, f or a ny fisc a l y ea r of the D istr ict, wh ic h cur r ent ly b egins on J a nu a r y 1 of ea ch yea r (a
“F isca l Y ea r ”), the W a ter S ys te m R evenu es f or such F is c a l Y ea r less th e O p era tio n a nd M a int ena n c e C os ts
of th e W a ter S ystem f or s uch F isc a l Y ea r . S ee “-F low of F un ds” her ei n for a s u mma r y of the d ef i n itio n o f
W a ter S ystem R eve nu es. S ee App en d ix B —“D E F I N IT IO N S AN D S UM M AR Y O F IN D E N T UR E ”
a tta c hed her et o f or a d eta il ed d isc us sion of th e t er ms o f th e I n dentu re. Aft er th e r efu n d ing c o nt emp la t e d
h er ein, th e r ema in ing ou t sta nd in g 2 0 0 6 C er tifica t es n ot r efu nd ed wit h p r oc eeds of the 2 01 5 B o nds a s
c ont em p la te d h er ei n w ill b e pa ya b le fr om N et W a ter S ys t em R ev e nu es o n a p a r ity w it h the ob liga ti on to
p a y the pr inc ip a l of a nd int er est o n th e 2 01 5 Bo nds .
T H E 2 01 5 BO N D S AR E N OT A D E BT O F T H E STA T E OF C AL IF O R N IA (T H E “ST AT E ”),
O R AN Y O F IT S P O L IT IC AL S UBD I VI S ION S (O T H E R T H AN T H E D I ST R ICT ), AN D NE IT H ER
T H E S T AT E, N O R A N Y OF IT S P O LIT IC AL S UB D IV IS I O N S (OT H ER T H AN T H E D IST R ICT ), IS
L IA BL E T H E R E O N, N O R IN AN Y E VE N T S H AL L T H E 20 15 BO N D S B E P AY A BL E O UT O F AN Y
F UN D S O R P R O P ERT IES O F T H E D I ST R ICT O T H E R T H AN T H E N ET W AT E R S YST E M
R E VE N UE S AN D O T H ER M O NE YS P L E D G E D T H E R EF O R UN D E R T H E I N D E NT UR E . T H E
O B L IG AT I O N O F T H E D IS T R ICT T O M AK E P A YM E N T S IN AC C O R D AN C E W IT H T HE
IND E NT UR E IS A L IM I T E D O BL IG AT IO N O F T H E D IST R IC T AS S ET F O RT H I N T H E
IND E NT UR E AN D T H E D IST R ICT S HAL L HA VE N O L IAB I L IT Y O R O B L IG AT IO N IN
C O N N E C T IO N H E R E W IT H E XC EPT W IT H R ESP E C T T O S UC H P A YM E N T S T O BE M AD E
P UR S U AN T T O T H E IN D ENT UR E . T H E 201 5 B O N D S DO N O T C O NST IT UT E AN
IND E BT E D NE S S OF T H E D IST R ICT IN C O NT RA VE N T IO N O F AN Y C O N S T IT UT IO N AL O R
ST AT UT O R Y D E BT L IM IT AT I O N O R R ES T R ICT IO N .
F lo w o f Fu nds. In or d er to ca r r y ou t a nd eff e ctu a t e th e pled g e a nd lie n c o nt ain ed in t h e I n dentu re,
th e D is tr ic t ha s a gr ee d a nd c ov ena nt e d tha t t he W a ter S ys tem R evenu es s ha ll be d ep osit ed w he n a n d a s
r ec eive d in a sp ecia l fu n d desig na t ed a s the “W a t er S yst em R ev e nu e F u nd” w hic h fu nd ha s b een esta b l is h e d
a nd wh i ch fu n d t he D is tr ict ha s a gr eed a nd cove na nt ed to ma inta in a n d to h o l d s ep a r a t e a nd a pa rt fr o m
ot h er funds s o lon g a s th e 20 1 5 Bo n ds r ema in unp a i d. M on eys in th e W a ter S ys tem R ev enu e F u n d w ill b e
h eld in tr u s t by t he D is tr ict a nd w ill b e a pp li e d, used a nd w ith dr a w n b y t he D is tr ict f or th e pu r p os es set
for th b elow.
W a ter S ys tem R ev enu es ar e d ef in e d un d er th e I nd entu r e to in clu d e a ll inc o m e, r ents , r ates, fees ,
c ha r g es a nd ot h er m on eys d er iv ed fr o m or a ttr ib u ta ble t o th e ow ner s hip or op er a tio n o f t h e W a t er S yste m,
inc lu di n g, w ith ou t lim it i n g th e g ener a l it y of th e for e goi n g, a ll i nc om e, r ent s , ra tes, fe es , c ha r g es , b u s in es s
int er r up tion ins u r a nc e p r oc e eds or oth er m o neys der iv ed b y th e D istr ic t fr o m th e s a le, fu r n is hin g a n d
su p p ly in g of wa t er , or oth er ser vic es, fa ciliti es a nd co mm od iti es s o ld, fur nis hed or su p plied throug h th e
fac il it i es of or i n th e c o n du ct or op er a t ion of the b usin ess of t he W a t er S ystem ; p lu s th e pr oc e ed s o f a n y
st a nd-b y wa t er a va ila b ilit y c ha r g es; p lus the c on n ec t io n c ha r g es a nd fa cilities f ee s or si mila r cha r ges r ela t ed
to th e W a t er S yst em ; p lus the ea rni n gs o n a nd inc om e d eriv ed fr o m th e inv est m en t of t he a m ou nts des cr ib ed
a bove a n d o n W a t er S ys te m r es erv es a n d a mou nts on d ep os it in th e R a te S ta b iliz a tio n F u nd, b ut ex c lu din g
in a ll ca ses (i) cu s t om er d ep osits or a ny ot h er d ep os its or a dva nc es sub ject to r efu nd unt il su ch d e pos its or
a dva n c es ha v e b ec o m e t h e p r op er t y of th e D ist r ict , (ii) r eve nu es fr o m D o nn er L a ke W a ter As s ess me nt
D istr ic t N u mb er 0 0 -1 , a nd (iii) a n y p r oc e ed s of ta x es r estr ict ed b y la w t o b e u s ed b y th e D istr ict t o pa y
ob liga t io ns of t h e D is tr ict h er ea fter iss u ed. W a ter S yst em R ev e nu es a ls o in clu d e a mou nt s tr a nsf er r ed fr o m
th e R a t e S ta biliza t ion F u nd to t he W at er S ystem R ev enu e F u nd du r in g a n y F is c al Y ea r in a cc or da nc e w it h
th e I nd e ntu r e a nd s ha ll n ot in clu d e a n y a m ou nts tr a nsfer r ed fr o m t he W a ter S yste m R ev enu e F un d t o th e
R a te S ta b iliz atio n F u n d dur ing a ny F isca l Y ea r in a ccor da n c e w it h th e I nd e ntu r e.
9
T he D is tr ic t wi ll, fr om th e m o neys i n the W a t er S ys tem R e v e nu e F un d, pa y a ll O per a tio n a n d
M a int e na nc e C ost s of th e W a t er S ys te m (inc lu din g a mou nts r ea so na b ly r e qu ir e d t o b e s et a s ide i n
c ont ing enc y r es er ves for O p er a tio n a n d M a int e na nc e C os ts of th e W a t er S yste m, th e p a y me nt of w hic h is
n ot t h en im m e dia t el y r e qu ir ed) a s su c h O per a tion a nd M a int e na nc e C osts of the W a t er S ys tem b ec o m e du e
a nd p a ya b le.
T he D ist r ict a c cou nts f or mo neys r ec eiv ed a n d exp ens es p a id in ac c or da nc e w it h g ener a l ly a c cep t ed
a ccou nt in g pr inc ip les a p p lic a b le to g ov ern men t a l a g e nc ies su c h a s th e D is tr ict (“G A AP ”). In c er ta in ca s es
G A AP r equ ir es or per mits m o n eys c ollect ed in o n e F isca l Y ea r t o b e r ec og n iz ed a s r eve nu e in a su bsequ en t
F isca l Y ea r a nd r equir es or p er m its ex p ens es pa id or incur r ed i n o ne F is c al Y ea r to b e r ec o g niz e d a s
exp ens es in a su bsequ e nt F isca l Y ea r. S ee AP P E N D I X A – “T R UC K E E D O N N ER P UBL IC UT IL IT Y
D IS T R IC T F INAN C I AL ST AT E M E NT S ” a tta c he d her et o. E xcep t a s ot her w is e ex p ress l y n ot ed h er e in,
a ll fi na n c ia l inf or ma ti on der iv ed fro m th e D istr ic t’s a ud it ed fina n cia l sta t em e nt ref lect t he a p pl ica tio n o f
G A AP .
A ll r ema in in g mo neys i n th e W a ter S ys te m R evenu e F u nd sha l l be a p plied b y th e D istr ic t at th e
fol lowin g t imes f or the tr a nsfer to t h e f o llo w in g r esp ect iv e sp ec ia l fu n ds in th e f o ll owin g or d er of pr ior it y:
(i) N ot la t er tha n six (6) Bu s in es s D a ys p ri or to ea ch I nt er est P a ym e nt D a te, th e
D istr ic t w ill, fr o m t h e mo neys in t he W at er S ystem R ev enu e F u n d, tr a nsfer to th e T r u s tee f or
d ep os it i n t he P a ym ent F u nd th e a m ou nt , if a ny, n ec ess a r y for the p a y ment s of int er est a n d
p r inc ip a l, i nc lu din g ma n da tor y s in k in g fu n d insta llm e nts , if a ny, on the 2 0 15 B on ds du e a n d
p a ya b le o n s uch Int er est Pa y me nt D a te. T h e D istr ic t will a ls o, f rom t he m on eys in t he W a ter
S ys te m R evenu e Fu nd, tr a nsf er t o t he a p plica bl e tr u stee for d ep osit in th e r esp ec tive pa ym ent fu n d,
w ithout pr e f er en c e or p rior it y, a n d in t h e event of a ny in s u ffic i en c y o f su ch m o n e ys r a ta b ly wit hout
a ny discri mina ti on or pr ef er e nc e, a n y oth er D eb t S er v ic e (a s def in ed in Ap p en dix C a tta c he d
h er eto) in a ccor da nc e with th e p r o v isi o ns of a ny B on d or C ontr ac t.
(ii) N ot la t er tha n s ix (6) B u s i n es s D a ys pr ior to ea c h I nt er est P a ym ent D a t e, th e
D istr ic t w ill, fro m th e r ema in in g m o neys in th e W a t er S yste m R e ve nu e F u n d, t h er ea ft er , without
p r ef er e nc e or p r ior ity a n d in th e e vent of a n y insu ff icienc y of suc h mo ne ys r ata bly w ith ou t a n y
d iscr i mina tio n or pr ef er enc e, tr a nsfer to th e a p p lica ble tr u stee f or s uc h ot h er r es erv e fu nds a n d/or
a ccou nt s , if a ny, a s ma y ha v e b een es ta b lis h ed in c o nn e cti o n w it h B onds or C ont r a c ts, t ha t s u m, if
a ny, n ec ess a r y to r es t or e s uc h fu n ds or a c cou nt s t o a n a mou nt equ a l t o th e r es er v e r equir em en t wit h
r esp ec t t h er et o. N o su ch tra nsf er sha ll b e ma d e w it h resp ect t o the R es er v e F u nd, w hic h w ill b e
d eem ed fu lly fu n ded a t a ll tim es b y th e dep os it of the R es er v e S u r ety P o lic y th er ei n.
(iii) T he D ist r ict s hall, fr o m t h e r ema in in g m o n e ys i n t he W a t er S ys tem R ev enu e F u n d,
p a y the r ep a y ment of dr a ws a nd ex p ens es a n d a cc r u ed int er est ther e o n w ith r esp ect to t h e R es er v e
S u r ety P ol ic y, a nd a mou nts pa id by t he I nsu rer u n der t he P o lic y a n d int er est th er eon t o th e ext e nt
su ch a m ou nts a r e du e a n d pa yab l e. S ee App en dix C — “D E F IN IT IO N S AN D S UM M AR Y O F
T H E IN D E NT UR E ” u nd er th e ca ptio ns “R E VE N UE S , F UN D S A N D AC C O UN T S ; P AYM E N T
O F PR IN C IP AL AN D IN T E R E ST — R es er v e F un d” a nd “— C la i ms Up on t h e I nsu r a nc e P o lic y
a nd Pa y m ents b y a nd to the Ins u r er ” h er ei n for fu rther inf or ma tio n w it h r es p ect to p a y m ents u nd er
th e R es er v e S u r ety P o lic y a nd th e P olic y.
(iv) M o neys on dep os it in th e W a ter S ys tem R ev enu e F u nd on a ny da t e w hen t h e
D istr ic t r ea sona b ly ex p ects suc h m on eys w ill n ot b e nee ded for t h e p a yment of O p er a tion a nd
M a int e na nc e C os ts of th e W a t er S yst e m, or for a ny o f the p ur pos es d escr ib ed in c la u s es (i) or (ii)
a bove, ma y b e ex p end e d by th e D istr ic t on p r in cipa l o f a nd int er est o n not es, b on ds, co ntr a cts or
ot h er ob liga tio ns p a ya b le fr om t h e N et W a ter S ystem R ev enu es su b or d ina te t o th e p a y m ents
10
d es cr ib ed i n c la u s es (i) a nd (ii) a b ov e, or for a ny ot h er p u r pose p er m itt e d b y la w, in clu din g, bu t not
lim it ed t o th e dep osit of a mou nt s in th e R a te S tabiliz atio n F u n d.
R at e Co v e n a nt
T he I nd entu r e will r equir e th e D ist r ict, to th e ful les t ex te nt p er m itt e d b y la w, to fix a nd pr es c r ib e,
a t the c o mm en c e men t of ea c h F isc a l Y ea r , ra tes a nd c ha r ges for th e W a ter S er vic e pr ov ide d b y th e W a t er
S ys te m w hic h ar e r ea sona b ly ex p ect ed to b e a t lea st suffic ient to y ield du r in g ea ch F isca l Y ea r N et W a ter
S ys te m R eve nu es equ a l to o n e hu n dr e d tw enty -f iv e p er c e nt (12 5 %) of D eb t S er vic e p a ya ble in s uch F is c al
Y ea r ; pr ov id e d, ho w ever , tha t for p ur pos es of th e for ego in g co vena nt, W a ter S ystem R ev enu es in s u ch
F isca l Y ea r sha ll n ot in clu d e a n y a mou nt t ra ns f er r ed fr o m th e R a t e S ta b iliz a t ion F u nd to t he W a ter S yste m
R ev enu e F un d i n ex c ess of tw ent y -f ive p er c ent (2 5 %) of D eb t S er vi c e p a ya ble in suc h Fis c a l Y ear . T h e
D istr ic t ma y ma k e a djust m e nts f ro m ti me t o tim e in su ch r at es a nd cha r ges a nd ma y ma k e su ch
c la ss ifica ti o n ther eof a s it d eems nec es sa ry, b ut sha ll n ot r edu c e t he r a tes a nd c ha rges t h en i n eff ect u nles s
th e N et W a t er S yst em R evenu es fr o m su c h r edu c ed r ates a nd c ha r g es a r e r ea s ona bly ex p ect ed t o b e
su ffic ient to m eet th e for ego in g r equ ir em ents . Fa ilur e to p r oduc e N et W a ter S ystem R evenu es t o equa l o n e
hu ndr ed t we nt y-f iv e p er c e nt (125 %) of D ebt S er vic e a t th e end o f a F isca l Y ea r is n ot a n E vent of D efa ult
u n der t h e I n d entu r e so lo ng a s th e D is tr ict com pl ies w ith t h e c ov ena nt des c r ib ed a bo v e. Su c h failu r e ma y,
h o w ev er , a ffect th e a b ilit y o f th e D istr ict to is su e B on ds or ex ecut e C o ntr a cts p a ya b le fr o m N et W a ter
S ys te m R eve nu es o n a pa r ity wit h th e 2 0 1 5 B o nds . S ee “-A dd it io na l I nd eb t ed ness ” h er ein.
R at e S tab i liz atio n F u nd
T her e is co nt inu ed un d er t h e I ndentu r e a s p ecia l fu nd d es ig na ted a s the “R ate S ta b iliza ti on F und”
to b e held b y t h e D istr ict i n t r u s t ther eu nd er , w hic h fu n d th e D is trict ha s p ledg ed t o th e p a y ment of t h e 2 0 15
Bo n ds u nd er th e I n de ntu r e a nd ha s a gr eed a nd c ov ena n te d to ma i nta in a n d to ho ld s ep a r a te a nd a pa rt from
ot h er fun ds so lo ng as a ny 2 01 5 B o nds r e ma in u np a i d. O n th e da t e o f th e is su a nc e of t h e 20 15 B on ds, th e
D istr ic t ha s a ppr ox ima t e ly $_____ on d ep osit in t h e R a t e S ta b iliz atio n Fu nd. M on ey tr a nsf er r ed by th e
D istr ic t fr o m t h e W a ter S ystem R e v enu e F u nd to t he R a te S ta b iliza tio n F u nd in a cc or da n ce w ith th e
Inde ntu r e w ill b e h eld in t he R a te S ta b iliz ation F un d a nd a p p li ed in a cc or da n c e w it h th e I n d e ntu r e.
T he D is tr ict ma y w it hdr a w a ll or any p or tio n of t h e a m ou nts o n d ep os it in t h e R a te S ta b iliza tio n
F u nd a n d t ra nsf er s u ch a mou nts to the W a ter S ystem R eve nu e F un d f or a pp lica ti on in a ccor da nc e wit h th e
Inde ntu r e or , in the ev e nt t ha t a ll or a por tio n of t he 2 01 5 Bon ds a r e d isc ha r ged in a c c or da nc e w it h th e
Inde ntu r e, tra ns f er a ll or a ny p or tio n of s u ch a m ou nts for a pp lica tio n in a c cor da nc e wit h th e Ind entu r e.
A mo unts tr a nsf er r ed fr om th e R a te S ta b iliz a ti on F un d to the W a ter S ys te m R ev enu e F un d p u r sua nt to t he
Inde ntu r e du r i ng or wit h in 27 0 da ys a ft er a F is ca l Yea r , ma y b e ta ken into a cc ou nt a s W a t er S yste m
R ev enu es for pu r p oses of t he ca lc u la t ions d escr ib ed u nd er th e c ap tio ns “—R at e C ov ena nt” a nd “—
A dd itio na l In d eb t ed n ess” h er e in i n s uc h F isca l Y ea r .
U nd er cer ta in c ir cu ms ta nc es, mo neys r ec ei v ed i n on e F is c al Y ea r ma y b e requ ir ed or p erm itt ed b y
G A AP to b e r ec or d ed a s r ev e nu e in a s u bsequ e nt F is c a l Y ea r , r e ga r dless of w h et her su ch mo neys ha v e b ee n
d ep os it ed in th e R a te S ta b iliza tio n F un d. S ee Ap p e ndi x A – “T R UC K EE D O N N ER P UB L IC UT ILI T Y
D IS T R IC T F IN AN C I AL S T AT EM E NT S ” a t ta che d h er et o.
11
A dd it io na l I nde bte d ne s s
T he D istr ict ma y a t a ny ti me ex ecu t e a ny C o nt r a ct or iss ue a n y B o n ds, a s the ca s e ma y b e, in
a ccor da n c e wit h th e I n d entu r e; p ro vi d ed :
(i) T he N et W a ter S ystem R ev en u es for th e m ost r ec ent a u dit ed F is ca l Y ea r pr ec e d in g t he da t e
of a d op ti on b y th e B oa r d (a s def i n ed h er ein) o f th e r es olu tio n a ut hor izin g th e is su a nc e o f suc h B on ds or th e
da te of t he ex ecuti o n of s uc h C ontr a ct, a s the ca se ma y b e, a s evi denc e d b y b oth a c a lc u la t io n p r epa r ed b y
th e D istr ic t a nd a s pecia l r ep ort p r epa r ed b y a n I nd ep end ent C er tif ie d P u b lic Acc ou nta nt or a n In d ep e nd en t
F ina n cia l C o nsu lta nt on s uc h c a lcu la tio n on fi le w it h th e D istr ict, s ha ll ha v e pr oduc ed a su m e qu a l to a t
lea st on e hu n dr e d t w enty -fi v e p er c ent (1 2 5%) of th e D eb t S er vic e f or su ch F isc a l Y ea r ; a nd
(ii) T he N et W a ter S ystem R evenu es for th e m ost r ec ent a udit ed F isca l Y ea r pr ec edi n g th e da t e
of th e ex ec ut ion of s uch C o ntr a ct or t he da t e of a dopt io n b y th e Boa r d of the r es olu t i o n a u thor iz ing t h e
iss ua nc e of s uc h B onds, a s the c a s e ma y b e, inc lu din g ad ju st m ent s to g ive ef f ec t a s of th e f ir st da y of s uc h
F isca l Y ea r to in cr ea s es or dec r ea s es in r a tes a nd cha r ges f or th e W a ter S er v ic e a p p r o ved a n d in eff ect a s
of t h e da t e of c a lcu la tio n, a s ev id e nc ed b y a ca lc ula t ion p r ep a r ed b y th e D istr ict an d to ea c h n ew conn ect io n
to the W a t er S ystem t ha t, du r ing a l l or a ny p a r t of su c h Fisca l Y ea r , wa s not in ex ist e nc e a n d t ha t wou ld
ha v e b e en d er iv ed fr o m su c h c o nn ect io n if it ha d b een ma d e p r ior to the b eg i nn ing of su c h F isca l Y ea r ,
sha ll ha v e p r o du ce d a s u m equ a l t o a t lea s t on e hu ndr ed t w ent y-f ive p er c e nt (12 5 %) o f the D eb t S er vic e
for su ch F isca l Y ea r plu s the D ebt S er vic e w h ic h w ou ld ha v e a cc r u e d o n any C ontr a cts ex ec ut ed or B on ds
iss u ed sin c e th e en d of s uc h F isca l Y ea r a ssum i ng s uch C o nt r a cts ha d b ee n ex ec u t ed or B o nds ha d b een
iss u ed a t t he b e gin n ing o f s u ch F isca l Y ea r , plu s the Deb t S er vic e w hic h wou ld ha ve a ccr ued ha d su c h
C ont r a ct b e en ex ecu t ed or B o nds b e en issu ed a t the b egin nin g o f s uch F is c al Y ea r; a nd
(iii) T he es t ima t ed N et W a t er S yst em R e venu es f or th e t h en cu r r ent F isca l Y ea r a nd f or ea c h
F isca l Yea r ther ea fter to a nd inc lu ding th e f ir s t c omplet e F isc a l Y ea r a fter the la tes t da te of op er a t ion o f
a ny u nc o m plet ed P ar ity P r ojec t, a s evid en c ed b y a cer tifica t e o f t h e G e ner a l M a na g er o f t h e D is trict o n f il e
w ith th e D is tr ict, inc lu d ing (a fter giv i ng ef f ect to th e co mp let i on of a ll su ch u nc o mp let ed P a r it y P roj ec ts )
a n a llo wa nc e f or esti ma t ed N et W a ter S yste m R ev enu es f or ea c h o f s u ch F isca l Y ea r s a r isin g fr om a n y
incr ea s e in th e inc om e, r ents , fees, ra t es a nd c ha r g es estimated to b e f ix ed, p r escr ib ed or r ec e iv ed f or th e
W a ter S er v ic e a nd w h ic h a re ec on omica lly f ea s ib l e a n d r ea so na b ly c o nsi der ed n ec es s a r y b a se d o n pr oject ed
op era tio ns f or s u ch p er io d, a s ev id enc ed b y a cert if ica te o f th e G en er a l M a na g er on f il e wit h the D istr ic t,
sha ll p r odu c e a su m equa l to a t lea s t one hu n dr ed tw enty-f i ve p erc e nt (12 5 %) of the est ima t ed D eb t S er v ic e
for ea ch o f suc h F isca l Y ea rs, a fter giving eff e ct to the ex ecu t ion of a ll C ont r a c ts a nd the is s u anc e of a ll
Bo n ds es t i ma t e d to be r equ ir ed to be ex ecut e d or issued to p a y the cost s of c om plet in g a ll u nc o mp let e d
P ar ity Pr ojects wit hin s uc h F isca l Y ear s , as s uming th a t a ll su ch C ontr a c ts a nd B o nds ha v e ma tu r ities,
int er est r a tes a nd p r opor ti o na te p r in c ipa l r epa y m ent pro v is ions s imi la r to the C o ntr a ct la st ex ecu t e d or th en
b ein g ex e cu t ed or t h e B o nds la s t issu e d or then b ei ng is su ed for t he pu r p ose o f a c qu ir in g a nd cons tr uctin g
a ny of su ch u nc o mp let ed P a r ity P r ojec ts.
N ot w iths t a n di n g t he for e goi ng, B on ds or C ontr a cts ma y b e issu ed or inc ur r e d to r efu n d ou ts t a nd i ng
Bo n ds or C ont ra c ts if, a f ter giv in g eff e ct to t h e a pp lica ti on of th e pr o c e eds t h er eof, tot a l D eb t Ser v ic e w ill
n ot be incr ea s e d in a ny F isca l Y ea r in w hic h B o nds or C ontr ac ts (ou ts ta ndin g on the da te of is s u a nc e or
incu rr enc e of s uc h r efu n din g Bo nds or C ontr a cts, b ut ex c lu d ing su c h r efu nd ing B o nds or C o ntra cts) not
b ein g refu nd ed a r e out sta nd in g in a n a mou nt in ex c ess of 2 5 %.
N ot hing in t he Ind entu r e sha ll p r o h ibit t h e D istr ict fr o m issu i ng or ent er in g into n ot es , bo nds ,
c ontr a c ts or ot h er ob liga tions p a ya ble fr o m N et W a t er Sys t em R eve nu es su bor d ina t e to B o nds or C ontr a cts.
S ee “T R UC K E E D ON N E R P UB L IC UT IL IT Y D IS T RIC T – O uts ta nd in g D is tr ic t Ob liga ti ons” h er ei n.
12
R eserv e F u nd
________ ha s ma de a c om mit m e nt t o issu e, s imu lta ne ou sl y w ith th e init ia l issua nc e of t h e 2 0 1 5
Bo n ds , th e R es er v e S ur et y P olic y in t he a m ou nt of $_______ (equa l to th e in it ia l R es er ve R equir em en t) for
d ep os it in th e R es er v e F u nd, ef fect iv e a s of t he da te o f is s ua nce of t h e 2 0 1 5 B on ds . U nder th e t er ms o f th e
R es er v e S u r ety P o lic y, _______ will u nco nd it io na ll y a n d ir r evo c ab ly gua r a ntee to p a y tha t p or tio n of th e
sche du led pa y m e nts of p r inc ipa l of a n d int er es t on t h e 2 01 5 B on ds tha t b ec ome s du e for pa y me nt b ut sha ll
b e u np a id b y r ea s on of n o np a y m ent b y th e D istr ic t.
S ee Ap p e nd ix C — “D EF IN IT ION S AND S UM M AR Y O F T H E IN D EN T UR E ” u nd er the ca p t ion
“R E VE N UE S , F UN D S AN D AC C O UN T S ; P AYM E N T O F P R INC IP AL AN D IN T E R E S T —R es er v e
F u nd ” a ttac hed her et o for fu r ther inf or ma ti on w it h r es p ec t to t he R es er v e S u r et y P o lic y.
E S T IM A T E D S O U R CE S A N D U SE S O F FU N D S
T he f o llo w in g ta b le s ets f or th t he est ima t ed sou r c es a n d u s es of fu n ds wit h r es p ect to t he is s ua nc e
of th e 2 0 1 5 B o nds :
Sources:
Pr in cipal Amount of 2015 Bon ds $
Net O riginal Issu e Pr emium/Di scoun t
Tr an sfer fr om th e 2006 Cer tifi cates Reser ve Fu n d(1 )
Tota l Sour ces $
Us es:
Tr an sfer to E scr ow Agen t for Refun din g of 2006 C ert ifi ca tes $
D eposi t to Cost s of Issuan ce Fund (2 )
Un derwr iter ’s Discoun t
Tota l Uses $
(1) Amounts released from the reserve fund relating to the 2006 Certificates established under the 2006 Trust Agreement.
(2) In cludes certain legal fees, pr emiums for the Policy and the Reserve Surety Policy, financing and printing costs.
B O N D INS U RA N C E
T h e in for m a tio n u nd er thi s ca p tio n ha s be en prep a red b y the In su rer for inclu sio n in t his Of fi cial
S ta te m ent . N eithe r th e D is t rict nor t h e U n d erwrit er m ake s a n y re p resen tatio n with res p ect to th e a ccu rac y
o r co m ple ten ess thereof . T he foll owin g info r m at io n i s n o t a com p lete su m ma ry o f t he term s o f th e Po licy
(as su c h te r m is d efin ed belo w) a nd refer ence is ma d e to A p pend i x F att a ch ed h e r eto fo r a s p ecim en of t h e
Poli cy.
B o nd I ns u r a nc e Po licy
C on cu r r ent ly w it h th e is s u a nc e of th e 2 0 1 5 Bo nds, th e Ins u r er w ill iss u e its M u nicip a l B o n d
Insu r a nc e P o lic y f or t h e 2 0 15 B o nds (the "P o lic y "). T he P o lic y gua r a ntees th e s chedu l ed p a y men t of
p r inc ip a l of a n d int er est o n the 20 15 B o nds w hen du e a s set for th in th e f or m of th e P o lic y inc lu ded a s
Ap p e nd ix F t o this O f ficia l S t a tement .
[T O C O M E .]
13
T R U C K E E D O N N E R PU B L IC UT IL IT Y D IS T R IC T
G ene r a l
T he D istr ict wa s for m ed a n d op er a tes un der t h e Sta te Pu b lic Ut il it y D istr ict A ct (th e “Act ”). T h e
D istr ic t is situ a ted in t h e S ier r a N eva da mou nta ins , 1 8 0 m i les n or t h ea s t of S a n F r a nc is c o, C a lifor n ia , 3 2
mi les w es t of R en o, N eva da , a nd 1 2 m iles n ort h of L a ke T a hoe, C a lif or nia . T he D is tr ict wa s or igina ll y
es ta b lis h ed o n Au gu st 9 , 19 2 7 a nd is cu r r ent ly c o m pri sed of a pp r oxima t ely 4 5.5 squ a r e m iles in ea s t er n
N eva da C ou nt y, C a lifor n ia (t he “C ou nty ”) a nd a p p roxi ma t el y 1.5 s qua r e m iles in P la cer C ou nty, C a lif or nia
(to g et h er wit h th e C ou nty, t h e “C ounti es ”), inc lu d in g th e T ow n of T r ucke e (“T r u ckee”). T he D istr ic t is t he
sole p r o v id er of wa ter ser v ic e w it hin th e b ou nda r ies of th e D istr ic t.
T he D is tr ic t cu r r ent ly p r ov id es wa ter a nd elec tr ic s er v ic e to c usto mer s wit h in t he T r u ck e e a n d
D on n er L a k e a r ea s , wit h th e wa t er a nd el ec tr ic s ys tems (th e “W a ter S yst em ” a nd “E lectr ic S y st e m,”
r esp ec tively ), ea c h ma inta i ned and op er a ted sep a r a tely. S p ecif ic a l ly, th e W a t er S ys te m t er r itor y in c lu des
c usto mer s in th e do w nt o w n T r u cke e a r ea , Ar ms tr o ng an d Blitz T ra cts, G le ns hir e, T a ho e D o nn er, M ea do w
P ar k, Ga te wa y, P r oss er H eight s, P r oss er L a kev i ew, Don ner L a ke a n d H ir sc h da le. T he D istr ic t is
a ppr ox ima t ely 7 6% d eve lop ed b a se d on t h e cu r r ent projec tion o f b u ildou t, w h ic h is p r o ject e d t o be in 2 02 5
w ith r esp ect to co m m er c ia l d eve lop me nt, a nd in 2 0 3 0 w ith r esp ect to r eside nt ia l d ev elo p me nt.
T r u ck ee was es ta b lis h ed a s a com mu nity in 1 8 62 a nd b eca m e a n i mp or ta nt loc a t io n o n th e C ent r a l
P a cific R a ilr oa d, th e fir s t tra ns c ont in enta l r a ilr oa d c o mp l et ed in 1 86 9. At th e ea s t end of D o n n er P a ss ,
T r u ck ee ha s r e ma in ed a n imp or ta nt tra ns p or ta t ion ce nt er a s the ga te wa y to th e mou nta i n p a s s lea din g to th e
w es t a n d S a n F ra ncis c o. T r uckee w a s inc or por a ted in 19 9 3 a nd ha s b ec om e a c ent er of t our is m du e to t h e
p r ox imit y to th e D on n er P a s s a nd L a k e T a hoe a r ea s ki res or ts a nd s u mm er r ec r ea tio na l a ct ivit ies.
As of M a r c h 3 1, 20 1 5, t he D istr ic t p r ov id e d wa t er ser vic es to a ppr ox ima t ely 1 2 ,67 7 a ctive
c onn ecti o ns, ident if ie d a s follo ws :
C usto mer C la s s ifica t ion
N u mb er of A cti v e W a t er
S er v ic e C on nec tio ns
S in g le F a m ily R es id e nt ia l 1 1,9 7 5
C o mm er c ia l 7 0 2
T ota l 1 2,6 7 7
T he W a ter S ystem c o ns ists of (i) 1 3 deep dr ill ed w e lls, (ii) 25 p u mp s ta tio ns, (iii) 3 6 wa ter s tor a ge
ta nks, w ith a com b ine d st or a g e ca pa cit y of a pp r oxima te ly 1 0.1 millio n ga ll ons, a nd (i v ) a p pr ox ima tely 2 1 7
mi les of pip el ine va r yin g fr o m t w o to 2 4 i n c h es in dia met er . C urrent ly , a ll of t h e W a ter S ys t em’s wa t er is
su p p li ed fr om gr ou nd wat er thr ou gh l oca l d eep dr ill ed w ells o w n ed b y th e D istr ict. T he D is t rict a ls o ha s
su r fa ce wa ter r ig ht s in D o n ner L a ke, M c Gla sha n S pr in gs a nd T on nin i S p r in gs, a lt houg h th e D ist r ict do es
n ot cu r r ent ly u tiliz e t hes e su r fa ce wa ter r ights . S e e “T H E W AT E R S YST E M O F T H E D IST R IC T —
W a ter S ystem ” a nd “— W a t er S u p p ly” her ein.
14
L a nd a nd L a n d U s e
T he D is tr ic t s er ves a r eg io n tha t r a ng es in ele va t io n fr om less t ha n 5 ,7 00 fe et a b ov e s ea le vel i n
H ir sch da le t o o ver 7 ,4 0 0 f eet a bove s ea le v e l in t he w es tern end o f th e D is tr ict loca te d c l os e to th e cr est of
th e S i er r a N eva da mou nta ins . B a s ed u p o n cu r r ent la n d u se p o lic ies o f th e cit ies a nd c ou nties w ith in t h e
b ou n da r ies of t he D is tr ict, the D istr ic t p r oje cts tha t the u n d e velop e d la nd wit hin its b ou nda r ies w ill c o ntinu e
to b e deve lop e d. T he p r oje ct e d pop u la ti o n of th e D istr ic t in th e y ea r 2 0 __ wi ll b e a p p r ox i ma t e ly
_________, wh ic h r ef le cts b u ild ou t of _________ [g e o gr a p hic a r ea ].
G o v er na nc e a nd M a nage me nt
T he D is tr ict is g ov er n ed b y a 5-mem b er b oa r d o f d ir ec tor s (th e “B oa rd”), th e m e mb er s of w hic h
a r e el ect e d f or s ta gger ed 4-yea r ter ms. T h e cu r r ent B oa r d m e mb er s, th e ex pir a t ion da t es of t h e ir t er ms a n d
th eir oc cu pa tions a r e set f or th belo w.
B oa r d o f D ir ector s M em b er E x pir a tion of T er m O cc upa tio n
J os ep h A gu er a , P r esid ent D ec em b er 2 0 1 6 R etir ed
R ob er t E llis , V ic e P r es id ent D ec em b er 2 0 1 6 R ea lt or
J eff r ey B end er , D ir ec tor D ec em b er 2 0 1 6 E n gin eer
A nt hony L a liotis, D ir ector D ec em b er 2 0 1 8 D ir ector of Util iti es
P a u l W arm er da m, D ir ec tor D ec em b er 2 01 8 F ina n cia l A d visor
D a y-to -da y mana g e men t of th e D is tr ic t is d elega t e d to th e G en er a l M a na ger . S et for th b e lo w a r e
b r ie f b io gr a ph ies of th e G ener a l M a na g er a nd th e T rea su r er a nd A dm in istr a t ive S er vic es M a na g er of
D istr ic t:
M i ch ael D . H oll ey, G e nera l M ana ger. M r . H oll ey j o ined t he D is tr ic t a s G ener a l M a na ger in
Ja nua ry 2 0 08. Prior to jo inin g t h e D is tr ic t, M r. H oll ey s er v e d a s the D ir ec t or, O p er a tions a nd M a int ena n c e
a t the C ontr a C osta Wa ter D is tr ict fr o m 1 99 7 t o 2 0 08 . M r . H olley r ec eiv ed a Ba c h el or ’s degr e e in
A gr ic u ltur a l E ng in eer in g fr o m C a lif or nia P ol yt ec hn ic S t a te U ni v er sit y, S a n L u is O bis po.
R o bert M e sche r, T rea su r er and A d m inistra tive S e rvice s M a na g er. M r. M es c h er wa s a p point e d
a s the Dis tr ict’s T r ea su r er a nd A dm in is tr at iv e S er v ic es M a na ger in Ja nua ry 20 1 1 . Im m ed ia t el y p r ior
th er eto, M r . M es cher ser v e d th e D is tr ict a s the F ina n c e a nd A cc ou nti ng M a na g er fr om 20 0 7 t o 2 0 10. M r .
M esc her ’s p r evi ou s ex p er i en c e inc lu d e s h is ser vic e a s the Ac c ou nti ng M a na g er a t th e T a ho e D o nn er
Ass oc ia tio n, a s w ell a s va r ious fina nc ia l a nd a d min istr a tiv e p os it io ns in the p r iva te sector . M r. M es c her
r ec eive d a B a c h elor ’s degr e e in A cc ou nti n g a n d B u s in es s/M a na g em ent a n d a M a ster of B u sin es s
A dm inis tr a tion d egr e e, ea c h fr o m C a lifor nia S tate U ni v er sit y-D o m ingu e z H ills .
D istric t Po w e rs
T he D istr ict has b r oa d g en er al p o w er s o ver the u s e o f wa t er wit hin D ist r ict b ou nda r ies, i nc lu d in g
th e r ight of em ine nt d o ma i n a n d th e a uth or ity to a c qu ir e, control, d istr ib u te, s tor e, s p r ea d, sin k, tr ea t, p urify,
r ec la im, p r oc es s a nd sa lva g e a n y wa ter for b en e f ic ia l u se, to prov i de s ew er s er vic e, to s e ll tr ea t ed or
u ntr ea t ed wa t er , to contr a c t wit h the U n it ed S t a tes, ot her p o litica l s ub div is ions , p u blic u tilit ies, a nd oth er
p er so ns , a nd, su b ject to c ert a in c o ns t itu tio na l lim its, to lev y ta x es o n la n ds.
15
E mp lo y ee s an d E mp lo ye e B ene fit s
E m plo yees . C u rr ent ly, a tota l of 71 fu ll-tim e e qu iva le n t (“FT E ”) emp lo ye es w or k for the Dis tr ict,
of w hom 1 5 a r e d ev ot e d to wa ter ser v ic e, 2 1 are d e vot ed t o electr ica l s er v ic e, a nd 3 5 a r e d evot ed t o
a dm inis tr a tio n a nd s up por t ser vic es. G en er a lly, a ll n on-ma na g em e nt em p lo y e es a r e m e mb er s of th e
Int er na tio na l B r ot h er h o od of E le ctr ic a l W or ks, L oca l 1 24 5 (the “IB E W ”). C urr entl y, 5 0 s uch emp loyees
a r e me mb er s of t he I BE W a nd a r e c ov er e d b y a co nt r a ct b et w een t h e D istr ic t a nd th e I B E W tha t ex p ir es on
D ec em b er 3 1 , 20 1 5. T he D istr ic t ha s not ex p eri en c ed a n y st r ik e or ot h er la bor a c tions or wor k stop p a ge.
P en s io n B e nefits . T h is cap t io n con ta ins ce r tain in form a ti on rela tin g to th e Ca li for n ia Pu blic
E m pl oye es R eti re m ent S ys te m (“PE RS ”). Ot h er than D istr ic t-sp ecific inf o rm at io n, th e info r m a tio n is
p ri m a r ily d e r iv ed f ro m in fo r m a tio n p ro du ced b y PE R S , its in de pen d e nt a cco u n ta nt s a n d a ctu a rie s. T h e
D is trict h as n ot in d ep end entl y v erif ie d th e inf or m atio n p rovi d ed b y PE RS an d m akes n o r ep r esenta tion s
n o r e xp re sses a n y o pi n ion as t o th e a c cu r a cy o f t he infor m a tio n pr ovide d b y PE R S .
T h e com p rehens iv e a n nu a l fi n an ci a l r epo r ts o f PE R S are ava ila bl e on i ts in tern e t websi te a t
ww w.c alp ers .ca.g o v. T h e PE R S w eb s ite als o c ont a ins PE R S m o s t r e cen t actu aria l va lu atio n repo rts an d
o th er in fo rm atio n c on cern ing b en efits a nd oth er m a tte r s. S uch inf orm a tio n is n o t inc orpo rate d by refe r en c e
h ere in. T h e D istri ct can no t gu a ra nt ee th e a ccu r a cy o f su ch info r m atio n. A ctuaria l asses s m en ts a r e
“fo rwa rd loo kin g” sta tem en t s th at refle ct th e ju d gm en t of th e fi du ci aries o f th e p ensi o n pla ns, a nd are
b a s e d u po n a va r ie ty o f a ss u mp tio ns, o n e o r m or e o f wh ic h m a y n o t m ate ria lize o r b e c han g e d i n th e fut ure.
A ct u aria l a s sess m e nts will ch an ge wi th th e f utur e exp erience of the pe nsi o n plan s.
G en er a l. T he D istr ic t c o ntr ibu tes to P E R S, a n a gent m ult ip le -e mp loyer d ef in ed b en ef it p ens io n
p la n (t he “P ens io n P la n”) w h ic h a cts a s a com m o n inv e st m e nt a n d a d min istr a tiv e a g ent f or its p ar t icip a tin g
me m b er emp lo y er s. T he P ens io n P la n p r o vid es r et ir emen t, disa b ilit y, a nnu a l c ost -of-liv in g a dju st me nts
a nd d ea th b e nefits to P ens io n P la n m e mb er s a nd bene fic ia r ies . Benef it p r ovis i o ns a nd a ll oth er
r equir e m ent s u nd er th e P e ns io n P la n ar e esta b lis h ed b y S ta te s ta tutes a nd b y t h e D ist r ict. F u ndin g
c ontr ib utio ns for th e P ensi on Plan a r e d et er m in ed a nnu a lly o n a n a ctu ar ia l ba sis a s of June 3 0 b y P E RS ; the
D istr ic t mu st fund t h os e contr ib u tio n a mou nts.
P E R S M isc ella ne ous R is k P oo ls . In 20 04, the D istr ict a nd b ar ga in ing u nit e mp loy ees ele ct ed to
p a rt icip a te i n th e P E R S M isc ella neous R is k P o ol 2 % a t 6 0 P la n (the “2 % at 6 0 R is k P o ol P la n”). O n
N ov em b er 1 5, 20 1 0, t he B oa r d a dopt ed a n a m end me nt to th e to t h e P E R S M iscella n eou s R is k P o o l p ens io n
p la n t o in cr ea s e r etir ee b en efit s f r om t h e 2 % a t 6 0 R isk P oo l P la n to t h e P E R S M iscella ne ou s R isk P o o l
2 .7 % a t 55 P la n (t he “2.7 % a t 5 5 R isk P oo l P la n”), eff ectiv e J a nu ar y 1 , 2011 . Ac cor ding l y, th e D istr ic t’s
p a rt icip a tio n in t he 2 % a t 6 0 R isk P oo l P la n en ded o n D ec e mb er 3 1 , 2 0 10 . P ur sua nt to AB 3 40 (a s d ef i n ed
h er ein ), N ew M emb er s (a s d ef in ed h er ein) wh o d o not qua lif y to p ar t icip a te in t h e 2 .7 % a t 55 R is k P oo l
P la n p ar ticipa te in a new P E R S M is c el la neou s R isk Po ol 2 % a t 6 2 P la n (the “2 % a t 6 2 R is k P ool P la n,”
a nd to g et her w it h th e 2 .7% a t 55 R isk P ool P lan, th e “Risk P o o l P la ns ”).
A B 3 40 . O n S ep t emb er 12 , 2 0 12 , the S ta te G ov er n or sig ne d A B 3 4 0 (“AB 34 0 ”), w hic h
imp lem en t ed p e ns i o n r ef or m in t h e S ta te ef fe ctiv e J a nua r y 1, 20 1 3 . A B 3 40 , a m on g ot h er c ha n g es :
(i) r equ ir es pu blic r et ir e me nt s yst e ms a nd t h eir par t icip a t in g emp lo y ers to s ha r e equ a l ly wit h emp lo y e es th e
n or ma l c ost ra te for s uch r etir em en t syst ems ; (ii) p r o h ib it s emp lo yer s fr om p a yi ng a n y p or tio n of th e
r equir e d mem b er c ont r ib utio ns to suc h r et ir em ent syst ems f or emp lo y ees hir ed a ft er J a nu a r y 1, 2 01 3 who
a r e n ew P E R S m em b er s (th os e wh o wer e not a lr ea dy enr olled in a p u bli c r etir em e nt sys t e m t hr ou gh t h eir
p r evi ou s emp lo y ers or who m o v e d b et w een emp loy ers or p ub lic r et irem en t s ys t ems w ith a 6 mont h b r ea k
in s er vi c e) (t h e “N e w M em b er s”); (iii) es ta blishes a com p uls or y ma xi m u m n o n-s a f ety b ene fit f or mula of
2 .5 % at a g e 6 7; a nd (iv) d e f in es f ina l c omp ens a tio n a s the h i gh es t a v er a ge a nnua l p ens io na b l e co m p ens a tio n
ea r n e d du r in g a 3 6-mo nt h per iod.
16
F u nd in g P o lic y. T he D is tr ict mo dif ied its P ensi on P la n ef f ec t iv e Ja nua r y 1 , 2 01 3 to c om p ly wit h
A B 34 0. Un der t he mo dif ie d P ens io n P la n a n d c ons ist ent w ith A B 34 0 , th e a c tiv e p a r ticip a nts in ea c h of
th e R isk P ool P la ns ar e r equ ir ed t o contribu te 8% of the ir a nnu a l cov er ed s a la r y, of w h ic h th e D is tr ict p a ys
0 %. T he D istr ic t is a ls o r equ ired to c o nt r ib ute the a ctu a r ia lly d et er min ed a m ou nt to fu n d t he p ens io n
b enefits f or its pa r ticip a nts, wh ic h c om pr is es the n or ma l c ost p lu s the a mor tiza tio n o f th e u nfu n ded lia bil ity.
T he r equ ir ed emp lo y er co ntr ib u tion r a tes f or t he 2 .7% a t 55 R is k P ool P la n for th e yea r s end in g Jun e 3 0,
2 0 15 , J u ne 30 , 2 0 14, Ju n e 3 0 , 20 1 3, a nd J u n e 30 , 20 1 2 w er e 1 6.0 86 %, 1 5 .06 4 %, 1 4 .5 2 5%, 1 4.11 3 %, a nd
1 7 .08 6% of p a yr oll, r es p ect ively. T he r equ ire d em p lo yer c o nt r ib ution r a tes f or th e 2 % a t 6 2 R isk P oo l P la n
for th e y ea r s en d ing Ju ne 3 0 , 20 1 5 , J une 3 0 , 2 01 4 a nd J u n e 3 0 , 2 0 13 wer e 6 .2 50 %, 6.2 50 %, a nd 6 .25 0 % of
p a yr ol l, res p ectiv ely. A d d itio na lly, P urs u a nt to AB 3 4 0 , t he N ew M em b er s w h o pa rticip a t e in th e 2 % a t
6 2 R is k P o o l P la n ha v e a $11 7 ,0 0 0 c a p on wa g es eli g ib le f or p ens i on ca lc u la t io n, s ub jec t to a nnua l
a dju st m ent to e qua l t h e s oc ia l s ecur ity c o nt r ib u tio n a nd ben ef it b a s e.
A nnu a l P e ns ion C os t s. F or F isc a l Y ea r s end in g D ec emb er 3 1 , 2 01 4, 2 01 3 , 2 0 12, 2 01 1 a nd 2 0 10 ,
th e D ist r ict ’s a n nu a l p ens io n cos t (“AP C ”) a nd a ctu a l co nt r ib utio ns for P E R S w er e $9 2 3,0 33 , $9 0 0,290 ,
$1 ,09 4,3 72 , $1 ,2 3 8,5 01, a nd $1 ,1 9 0,1 16, r esp ectiv ely, a s det er min ed b y t h e J u n e 30 , 20 1 3 , Ju ne 3 0 , 2 01 2,
Ju n e 3 0, 20 1 1, Ju ne 3 0 , 2 0 1 0, a nd J u n e 30 , 2 0 0 9 a c tuar ia l va lu a t ions , r esp ectiv el y. T he D istr ict ha s a F is c al
Y ea r 2 0 1 5 AP C of $_____. T he AP C s w er e d et er m in ed usi n g th e e ntr y a g e nor ma l a ctu a r ia l cos t m et h od,
w ith t he c ontr ib u tio ns d e t er min ed a s a p er c ent of p ayr o ll. T h e a ctu ar ia l a ss u mp tio ns u s e d w er e t h os e
a dop t e d b y th e P E R S B oa r d of Adm inis tr a tio n, and inc lu d ed: (i) a 7.50 % inv est ment r at e of r etu r n (n et of
a dm inis tr a tiv e ex p e ns es ), a nd (ii) p r oject ed a n nu a l s a la r y inc r ea ses b a sed o n a mer it sca le t ha t va r ies b y
dur a tio n of emp lo y m e nt, b et w een 3 .3 0% a nd 1 4.2 0%, cou p le d w it h a n a s su me d a nnu al inf la tio n gro wt h o f
2 .7 5% a nd a n annu a l p rodu ctio n gr o wt h of 0 .2 5 %. Bot h a s s ump ti ons i nc lu d e a n i nf la tion c o mp o n ent o f
2 .7 5% a nd p a yr oll gr o wth of 3 .0 0 %. T he a ctu ar ia l va lue of P E R S ass ets wa s det er m in ed usi n g te c h niqu es
tha t smo ot h t he ef f ects of sh or t-t er m v o la tilit y in th e ma r k et va lu e of i nv est m e nt o ver a 3 0 -year p er io d
(s m o oth ed ma r k et va lu e). Initia l u nfu n ded lia b ilit ies ar e a mor tiz ed o v er a clos ed p er io d tha t dep en ds o n
th e p la n’s da te of entr y int o P E R S . S ub s equ ent p la n a m en d m ents a r e a mor tiz ed a s a le vel p er c ent a ge of
p a y ov er a n op en 3 0 -y ea r p er iod. If the r es p ect ive R is k P oo l P la n ’s a c cr u ed lia b ility ex c eeds t h e a c tua r ia l
va lu e of p la n a s sets, then th e a m or tiza tio n pa y m e nt on the tot a l u nf u nd e d lia b ilit y ma y not b e l o w er tha n
th e p a y men t c alcu la te d o ver a 3 0 -y ea r a m or tiz a t io n p er i od. T he P E R S a ctuar y uses a s m oot hin g t ec h n iqu e
to det er m i ne a c tu ar ia l va lu e tha t is ca lc u la ted b a s ed o n cer t a in po lic i es a nd a ctu a r ia l a s su mp tio ns. T hes e
p o lic ie s a nd a ctu a r ia l a ss ump t ions a r e s ub ject t o cha n g e b y P E R S in th e fu tur e a n d ma y r esu lt in incr ea ses
to th e D istr ic t’s AP C .
F u nd in g S ta tu s. T he s che du l e b elo w s ho ws th e h is t or y of the 2 .7 % a t 5 5 R isk P ool P la n a ctuar ia l
va lu e of a sset s , a ctua r ia l a ccr u ed lia b il it y, a nd th e r e lat io nsh ip of th e u nfu n d e d a ctu a r ia l a ccr u ed lia b ilit y
(“U A AL ”) to p a yr oll a s of J un e 3 0, 20 0 9, J u ne 3 0, 20 10 , J une 3 0, 2 01 1, Ju ne 3 0 , 2 0 12 , a nd J un e 3 0, 2 0 1 3.
T he sc h edu l e s ho ws th e fu n din g p r ogr es s f or th e ent ir e r is k p o ol, not ju s t th e D is tr ict emp lo y e es.
Actua ria l
Valuation
Date
Accru ed
Lia b ilit ies
[AL]
Actuaria l Va lue
of Assets
[AV A]
Un funded
Lia b ilit y
[AL -AV A]
Fu nd ed
Ra tio
[AV A/AL]
Ann ual
Cove red
P ayroll [C]
UA AL as a % of
P ayroll
[(AL -AV A)/C]
Ju ne 30 , 2009 $2,1 40 ,438,884 $1 ,674,260 ,302 $4 66 ,17 8,582 78.2% $440,0 71 ,49 9 105.9%
Ju ne 30 , 2010 2 ,2 97 ,871,3 45 1,815,6 71,61 6 4 82 ,19 9,729 79.0 434,023 ,38 1 111.1
Ju ne 30 , 2010 2 ,4 86 ,708,5 79 1,981,0 73,08 9 5 05 ,63 5,490 79.7 427,300 ,41 0 118.3
Ju ne 30 , 2012 2 ,6 80 ,181,4 41 2,178,7 99,79 0 5 01 ,38 1,651 81.3 417,600 ,03 4 120.1
Ju ne 30 , 2013 2 ,8 58 ,732,3 21 2,218,9 82,12 3 6 39 ,75 0,198 77.6 406,940 ,09 9 157.2
17
T he sc h edu l e b elo w s ho ws th e 2 % a t 60 R is k P oo l P la n a ctuar ia l va lu e of a s sets , a ct uar ia l a ccr u ed
lia b il it y, a nd t h e r ela t io ns hip o f th e U A A L to p a yr oll a s of a nd Ju ne 3 0, 2 01 3, t he f ir s t yea r for whi ch su c h
inf or ma tio n is a va ila b le. T he s c he du le sho ws t h e fu n d ing pr ogr ess f or th e entir e r is k p o o l, n ot ju s t th e
D istr ic t emp lo y ees.
Actua ria l
Valuation
Date
Accru ed
Lia b ilit ies
[AL]
Actuaria l Va lue
of Assets
[AV A]
Un funded
Lia b ilit y
[AL -AV A]
Fu nd ed
Ra tio
[AV A/AL]
Ann ual
Cove red
P ayroll [C]
Un funded
Lia b ilit y as a %
of Payr oll
[(AL -AV A)/C]
Ju ne 30 , 2013 $1,0 63,294 $69 9,9 91 $363,3 03 65.8% $48,743 ,70 2 0.7%
P E R S r ep or te d sig nifica nt in v es t m e nt loss es in 2 0 0 9 a nd in vest ment ga ins for F is c a l Yea r s 20 10 ,
2 0 11 , 2 0 12 , 201 3 a nd 2 0 14 in ex c ess of 1 3 .0 %, 2 1.7%, 1 .0 %, 1 2.5 %, a nd ___%, r es p ect ive ly. F u tur e
ea r n ings p er for ma n c e ma y incr ea se or d ecr ea s e fu tur e c ont r ib utio n ra t es for p la n pa r ticip a nts , inc lu d in g th e
D istr ic t. T he D is trict d o es n ot exp ect a ny fu tur e AP C incr ea s es to ha v e a ma ter ia l a d v ers e eff ec t o n th e
D istr ic t’s ob liga t ion t o ma k e p a ym ents of pr incipa l o f a nd int er es t on th e 2 01 5 B on ds . S e e N ot e 9 of the
D istr ic t’s a udit ed f ina nc ia l s ta t eme nts a tta ch ed h er et o a s Ap p en dix A for a dd itio na l inf or ma tion w it h
r esp ec t to the D is trict a nd P E R S . F or a ddit io na l in for ma t ion w it h r espe ct t o t he D is tr ict and P E RS , s e e
Ap p e nd ix A — “T R UC K E E D O N N E R P UB L IC UT IL IT Y D IS T R IC T F I N AN C IAL S T A T E M E NT S –
N ot e 9 ” a tta ch ed her et o.
P ensi on Sid e F u nd. At th e ti me t he D ist r ict jo in ed th e P E R S M iscella neou s R is k P o ol, th e D is t r ict
wa s r equ ir ed to cr ea te a n e mp lo y er sid e f u n d (th e “P e nsio n S id e F un d”) to a c c ou nt for a nd a m or tiz e th e
d iffer enc e b et w een th e fu n ded sta t u s of t h e r is k p o ol a nd t h e fu n ded sta t u s of th e D is tr ict ’s p lan. T h e
P ensi on S ide F u nd u s e d th e a ctu ar ia l a ss u mp ti on of a 7 .7 5% in ves t m e n t r etu r n a nd it wa s a mor tize d on a
c los ed b a sis , en din g in 20 2 2. T he D ist r ict r efi na nc e d th e th en -ex is tin g $7 .8 millio n P ens i on S id e F u n d
lia b il it y thr ou g h th e is s ua nc e of P ens io n O bliga t ion B on ds, a s d es c r ib ed un d er th e ca p ti on “-O u ts ta ndin g
O bliga ti o ns – Ad dit io na l D istr ict O b liga ti o ns” h er ei n. T he P ens io n O b liga ti o n Bo nds a r e pa id by t he
D istr ic t a nd r ec or d ed a s a p ens io n ex p ens e, a lloca t ed 6 3% to th e E le ctr ic S yst e m a n d 3 7% to t h e W a t er
S ys te m.
O the r P o s t-E m p loym en t B e nefits . T he D istr ic t a d min is t er s a s ing le -e mpl o yer d e fin ed b en e f it
h ea lt hca r e p la n (t he “O P E B P la n”), w h ic h pr o v id e s h ea lt h insu r a nc e c ontr ib uti o ns (t h e “B en ef its ”) f or
e li gib le r et ir ees a nd th eir s p ou s es thr ou gh th e D is tr ict ’s grou p h ea lt h ins u r a nc e p la n. T h e O P E B P la n
inc lu d es medi ca l insu r a nc e, d ent a l ins ur a nc e a nd pr es cr ip tio ns. T he D ist rict b e ga n p r ovidin g th e B ene fit s
u n der th e O P E B P la n on J a nu a r y 1, 2 00 0 f or a ll e mp loy ees tha t r etir e fr o m t h e D is tr ict o n or a fter r ea c hi n g
th e a g e of 6 0 , wit h a t lea s t 2 0 yea r s of s er v ic e a t the D istr ic t. T he mo nt h ly a m ou nt p a id b y th e D ist r ict for
th e B enefit s is c a p ped a t $4 7 5 for ea c h p a r ticip a nt, or $3 7 5 for ea ch p a r ticip a nt elig ib l e f or M edi ca r e. F or
p a rt icip a nt s wit h less t ha n 2 0 y ea r s of s er v ic e a t th e D ist r ic t, the a mou nt pa id b y t h e D ist r ict f or t h e B en ef its
is r educ e d b y 5 % for ea c h y ea r . [F or pa rticip a nts w ho r et ir ed p r ior t o a ge 60 , the a m ou nt pa id b y th e D is tr ict
for t he B en ef its is r edu c ed by 2% for ea ch y ea r .] T he contribu tio n r equ ir e me nts a nd b e ne f it p r ovis ions a r e
es ta b lis h ed thr ou gh c o l lect ive b a r gain in g a gr eement s a nd ma y b e a m end ed o n ly thr ou g h negot ia t io ns
b et w ee n t h e D istr ic t a nd th e ba r ga in in g gr ou p.
T he D is tr ict a lso p a r ticip ates in t he C a lif or nia E mp loy er ’s R et ir e e B enefit T r u st (the “C E R BT ”),
op era te d b y P E R S . T he C E R B T s er v es a s a n ir r ev oc a b le tru s t, into w hic h th e D istr ic t ha s d ep os it e d
a mou nts t o beg in fu n din g it s a c tua rial a ccr ued l ia b ilit y (th e “A AL ”) w it h r es p ect t o th e B en ef its of f er ed
u n der t h e O PE B P la n. As of J u ne 3 0 , 2 0 13, t he D is tr ic t’s C E R BT ba la nc e wa s $1,1 1 4,85 9.
Actu a r ia l Va lua tio ns. T he D is tr ict’s a nnua l O P E B P la n exp ens e is ca lcu la ted b a s e d o n th e a n nu a l
r equir e d c o ntr ib u tio n (th e “AR C ”), a n a mou nt a c tu ar ia lly d et er min e d i n a c c or da nc e w it h G ov er nm enta l
Ac c ou ntin g S ta nda r ds B oa r d (“G AS B ”) S ta te ments N o. 4 5. T he AR C is the a mou nt t ha t w ou ld b e nec essa ry
18
to fun d th e va lu e of fu tur e b enef its ea r n e d b y cu r r ent e m p loy e es du r in g ea c h fisca l y ea r (th e “N or ma l C ost”)
a nd th e a mou nt n ec es s a r y to a m or tiz e t he u nfu n ded a ct ua ria l a cc ru ed lia b ility (t h e “U AAL ”) in a c c or da nc e
w ith t h e G AS B S ta te ments N os. 43 a nd 4 5. T he O P E B P la n’s U A AL is b e ing a m or tiz e d a s a level
p er c e nta g e of pr oject ed p a yr olls on a clos ed b a s is , ov er a per iod n ot to ex c ee d 3 0 yea r s, u s ing t h e p r oj ect ed
u n it cr edit a ctu a r ia l c ost m et h od.
T he f o llo wi n g ta b le sh o ws th e c omp o nents o f th e D is tr ict’s a nnu a l O P E B P la n c os t, the a m ou nt
a ct ua lly c o nt r ib ute d t o th e O P E B P la n, a nd th e c ha ng es in th e n et O P E B P la n ob liga tio n.
Fisca l Y ear
Ended(1)
Ann ual
Requ ired
Contribu t ion
(ARC)
In ter est a n d
Ad justm en ts
Ann ual
OPE B
Cost
Actual
Contribu t ion
% of
Ann ual
OPE B C ost
Contributed
Chan ge in
Net OPEB
Obliga tion
(Ass et)
OPE B
Obliga tion
(Ass et)
Beginn in g
Net OPEB
Obligation
(Ass et)
Ending
1 2/31 /20 10 $2 07,60 0 -- $20 7,600 $2 12 ,008 10 2.1 % $(4,408 ) $(97 ,284) $(101,6 92)
1 2/31 /20 11 2 71,20 0 $1,322 27 2,522 2 37 ,501 8 7.1 35,021 (1 01 ,692) (6 6,671 )
0 6/30 /20 12 2 76,80 0 66,671 34 3,471 2 85 ,005 8 3.0 58,466 (66 ,671) (8,2 05 )
0 6/30 /20 13 2 67,80 0 62 8 26 8,428 3 04 ,556 11 3.5 (36,128 ) (8 ,2 05) (4 4,333 )
0 6/30 /20 14 2 67,80 0 -- 26 7,800 2 68 ,498 10 0.3 (6 98 ) (44 ,333) (4 5,031 )
(1 ) In 2 0 1 1 , th e F i sca l Y ear E nd ed da t e cha n g ed to J un e 3 0 i n c o mp lia n c e w ith G A SB Sta t em en t N o. 5 7 .
S o u rc e : Th e Tr u c ke e D o nn er Pu b lic U ti lity D istr ic t.
Actu a r ia l va lu a ti o ns a r e r equ ir ed a t lea s t o nc e e ver y t w o y ea r s a nd in vo lv e est ima t es for the va lu e
of r ep or ted a m ou nts a nd a s su mp t ions a bout the prob a b il it y of occ urr e nc e of ev ents fa r int o th e fu tur e,
inc lu di n g a s su mpt io ns a b ou t fu tu r e em plo y ment , m or ta lity a nd h ea lt hc a r e c ost tr ends . A m ou nts d et er m in e d
r ega r ding th e fu n d ed sta t u s of th e O P E B P la n a nd th e A R C ar e su b jec t to c o ntinu a l r e vis io n a s ac tua l r es ults
a r e comp a r ed wit h p a st exp ecta tio ns a nd n ew esti ma t es a r e ma d e a b ou t t he f u tu r e. Ca lc ula tio ns a r e ba s e d
o n th e t yp es of bene fit s p r ovide d u nd er th e t er ms of the sub st a ntiv e pla n a t t he time of ea c h va lu a tio n a nd
th e p a t ter n of sha r ing of c osts b et w een th e em p loy er a n d pla n mem b er s to tha t p oint. C ons ist ent w it h the
lo ng -t er m p ers p ec tive of a c tu ar ia l ca lc ula ti ons , a ctu ar ia l m et h ods a nd a ssu mp tio ns used i nc lu de t ec h n iqu es
tha t ar e d esig ned t o r edu c e s hor t-t er m vola ti lity i n a c tua r ia l a c cr ued lia b ilities.
T he D istr ic t’s a ctu ar ia l va lu a tio n for th e O P E B P la n uses t h e P r oje ct e d U nit C r ed it a ctuar ia l cost
met h od t o p r o ject t h e AR C a nd a 7.5 % disc ou nt ra t e. Inf la tio n is a s su m e d to incr ea se a t a ra te of 3 %, a nd
a le ve l do lla r a m or t iza t ion of th e U A AL is u s ed o v er a clos e d 3 0 -y ea r p er iod.
T he m os t r ec ent va lu a tion (da te d J uly 1 , 2 0 1 3 ) r eflec t s a n A AL of $2,9 6 0 ,60 0 a nd a UA AL o f
$1 ,88 0,7 00 . T h e c o v er e d p a yr ol l (a nnua l p a yr o ll of a ctiv e emp lo y e es c ov er ed b y t he O P E B P la n) f or th e
y ea r en ded D ec em b er 3 1, 2 01 4 is $_______. T he r atio of the U A AL to a nnu al p a yr oll co v er e d is ___%.
T he f ol low ing schedu le of fu n di n g pr ogr ess for t he O P E B P la n p r esents mu lt i-y ea r tr en d inf or ma ti on a bout
w het her t he a ctu aria l va lu e of th e O P E B P la n a ssets is incr ea si n g or dec r ea s in g ov er tim e r ela ti v e to th e
A AL f or th e B e nef its .
Valuation
Date(1)
Accru ed
Liab ilit ies (AL)
Actuaria l
Valu e of
Ass ets (AV A)
Un fun ded
Lia b ilit ies
(UL)
Fu nd ed Ratio
(AV A/AL)
Annual
Covered
P ayroll
UL as a %
of Payr oll
0 1/01 /20 09 $1,748 ,0 00 $230 ,900 $1,517,1 00 1 3.2 % $5,276 ,4 00 2 8.8 %
0 1/01 /20 11 2,5 01 ,80 0 6 45 ,700 1,85 6,100 2 5.8 6,3 07 ,40 0 2 9.4
0 7/01 /20 11 2,6 57 ,00 0 6 61 ,400 1,99 5,600 2 4.9 6,2 26 ,00 0 3 2.1
0 7/01 /20 13 2,9 60 ,60 0 1,0 79 ,900 1,880,70 0 3 6.5 6,4 09 ,00 0 2 9.3
(1 ) Va lu a tio n s a r e r e qu ir ed o nc e ev er y t wo year s. In 20 1 1 , th e valu a tion dat e cha n ge d to J u ly 1 in co m plia n ce with G A SB Stat em e nt N o. 5 7 .
S o u rc e : Th e Tr u c ke e D o nn er Pu b lic U ti lity D istr ic t.
19
F or a ddit io na l inf or ma ti o n with r es p ect to t h e D istr ict a nd O P E B , see Ap p en d ix A — “T R UC K EE
D O N N ER P UBL IC UT IL IT Y D IS T R IC T FIN AN C I A L ST AT E M E NT S – N ote 9 ” a t ta ched h er et o.
D efer re d C o mp en s ati o n P la ns. T he D istr ic t ma inta ins tw o def er r ed c omp ensa ti o n p la ns (th e
“D ef er r ed C o mp e nsa tio n P la ns”) for cer ta in qu a lif ie d emp l oy ees. Un der th e D ef er r ed C omp ens a t ion Pla ns ,
th e D istr ict ma tc hes 6 .78 % of the e mp loy ee c ontr ib uti o ns. In F is c a l Y ea r 2 01 4, the D is tr ict’s tot a l ma tc h
for th e D e fer r e d C o mp ensa tion P la ns wa s $19 ,5 93 . T h e D is tr ic t ha s p rojec t ed a ma tc h f or t he D ef er r e d
C o mp ens a tio n P la ns in F isca l Y ea r 2 01 5 is $5 3 ,64 0.
B udg et P roce s s
T he op er a tin g bu d g et ta k es th e for m of a t w o-y ea r fina nc ia l pla n w hic h is a dopt ed b y th e B oa r d.
T he b u dg et a r y p r oc es s b eg ins ea ch y ea r on or a b ou t August 1 , with f ina l a p prova l g en er a lly oc cu r r in g i n
la te N ov em b er . T he B oa r d r ev iews th e a dopt ed bu d get se mi -a nnua lly to d et er mi ne w h et her am en dm en t s
a r e nec essa r y. T he B oa r d a p pr ov e d th e b ud g et for F iscal Y ea r 2 0 1 5 on N o v em b er 2 0, 2013 , a nd th er e ha v e
b een n o a m en d ment s to the F isca l Y ea r 2 01 5 b u dg et sinc e t ha t da te.
S elf-F unde d D is tr ict I ns ur a n ce
T he D is tr ic t ha s a s elf-fu n d ed vis i o n ins u r a nc e p r ogr a m a n d c la im s w er e p r ocess ed o n b e ha lf o f
th e D is tr ic t. F or fisca l yea r 201 4 -1 5 , the D istr ict did n ot ma inta in a cla im lia b ilit y; ra t her , cla i ms w er e
exp ens ed a s pa id. T he a mou nt of c la i m s p a id f or ea c h of th e pa s t t hr ee y ea r s ha v e n ot b een ma t er ia l.
R is k M a n ag e me nt
T he D istr ic t is exp os e d to va r ious r isks of los s r ela ted t o tor ts; theft o f, da ma ge t o, or des tr uctio n
of a s sets; er r or s a nd o mis s io ns; wor k er s co mp ensa t ion; a nd h ea lt h ca r e of its em plo ye es . T hes e ris ks a r e
c over ed t hr ou g h th e p urcha se of com m er cia l ins u r a nc e, wit h mi n ima l d e duc tib l es. S ett le d c la im s ha ve not
ex c e ed e d t h e c om m er c ia l lia b il ity in a ny o f the p a st thr e e y ea r s . T her e w er e n o s ignif ic a nt r edu c tions i n
c over a g e c o mp a r ed t o t h e p r ior yea r .
O uts ta nd ing O b lig atio ns
O u t sta ndin g O blig atio n s P ay a b le F ro m N et W a te r S y st em R e venu es . T he ob l iga tio n of the
D istr ic t to pa y p r inc ip a l of a n d int er est on th e 20 1 5 Bo n ds is p a ya b le fr o m N et W a t er S yste m R e venu es o n
a par ity w it h, a fter the r e fu ndi n g c o nt emp lated h er e in, ap pr ox ima t ely $_______ a ggr ega te p ri nc ip a l a m ou nt
of p a y ments du e o n t he 2 00 6 Ins ta llm en t Pa ym e nts a nd D W R Pr opos it i on 5 5 L oa n (ea ch a s def i ned her ein)
(to g et h er , the “Pa r ity O b liga tio ns”).
In c on n ectio n w it h th e ex ecut io n a nd de liver y of th e 20 0 6 C er tifi ca tes, the D is tr ict ent er ed int o th e
2 0 06 Ins ta llm ent P ur cha s e C o ntr a ct . T h e inst a llm e nt pa y m ents t h er eu n d er (t h e “2 00 6 Inst a llm e nt
P a ym ents ”) a r e s ecu r ed b y N et W a t er S ys te m R e venu es. As of D ec emb er 3 1 , 2 01 4, th e 20 0 6 Ins ta llment
P a ym ents w er e outsta n din g in t he a ggr ega t e p r inc ipa l a m ou nt of $20 ,0 80,0 0 0. T he D is tr ict ex p e cts to
r efu n d a p or tio n of t he ou tsta nding 2 0 06 C er tif ica t es fr o m th e p r o c eeds of th e 20 15 B o n ds . S e e
“R EF UN D IN G P L AN ” h er e in. F ol lo win g th e r efu n d in g of th e R efu nd e d 20 0 6 C er tifi ca tes, a p or tion of
th e 2 0 06 C er tific ates w ill r e ma in ou ts ta nd ing a nd p a ya ble fr o m th e N et W a ter S ystem R evenu es on a pa r ity
w ith t h e 2 0 15 Bo n ds .
T he D istr ict e nt er ed int o a loa n a gr ee m ent da t ed Au gu s t 13, 1 99 2, b y a nd betw e en t h e D ep a r tm ent
of W a ter R es ou r c es (“D W R ”) a nd th e D istr ic t, for a loa n in th e a mou nt of $5 ,0 00 ,00 0 u nd er t h e S a fe
D r in king W a t er B on d L a w of 19 86 (th e “D W R P r op ositio n 55 L oa n”). T he D W R P r op osit io n 55 L oa n
20
wa s u sed t o fina nc e c a p ita l impro ve m ents t o th e pu b lic wa ter su pp l y a n d to r e du c e wa ter qu alit y ha z a r ds.
As of D ec emb er 3 1 , 20 1 4, the D W R Pr op osit io n 5 5 Loa n wa s ou ts ta nd in g in th e a m ou nt of $1,7 87 ,13 2.
U nd er the D W R P r opos it i on 5 5 L oa n, the D is tr ict is ob liga t ed to p a y D W R a p pr ox ima t ely $30 6 ,4 8 1 in
2 0 15 a nd ea c h yea r t her ea f t er , wit h fina l pa ym ent o f $15 3,2 41 du e in M ar ch 2 0 2 1. P a ym ent s ma d e by th e
D istr ic t t o D W R u nd er th e D W R Pr op osit io n 5 5 L oa n w ill b e p a ya ble fr o m N et W a ter S yste m R ev enu es
o n a pa r ity w it h t he 2 0 15 B o nds .
S ub ordina te C o ntr a ct s P a ya b le F r o m W a ter Sy ste m R ev enu es. T he D is tr ict ent er ed int o a loa n
a gr ee men t da t ed Ju n e 2 8, 2 00 4 , b y a nd b et w een D W R a nd t h e D istr ic t p urs ua nt to whic h the D ist r ict drew
d o w n $12 ,7 32 ,96 5 (exc lu sive o f ot h er cos t s) u n d er th e S a fe D r in kin g W a ter R e vol v ing F u n d L a w of 19 97
(th e “D W R L oa n”). T he D W R L oan wa s used for c er ta in ca pita l i mp r o vemen ts to t he wa t er system a t
D on n er L a ke. As of D ec em b er 3 1 , 2014 , t he DW R L oa n wa s ou tst a ndi ng in t he a m ou nt of $8 ,03 3 ,80 4.
U nd er th e D W R L oa n, the D istr ic t is ob liga t ed to p a y DW R a p pr ox ima t el y $80 0 ,8 52 in 20 15 a nd ea c h y ea r
th er ea fter , wit h a fina l p a ym ent du e J a nu a r y 1, 2 0 26. T he ob liga tio n of th e D ist rict t o mak e p ay m ents un d er
th e D W R L oa n is s ecur e d b y a ss ess m ents le vi ed i n th e D o n ner L a k e a r ea of t h e D ist r ict (t h e “D o n ner L ak e
Ass ess m ents ”), w hi ch a ssessm e nts wi ll e nd in 2 02 1. T he D istr ict exp ects t o u se the pr oc ee ds of a lo n g-
ter m in v es t men t tha t will matu r e in 2 02 1 t o ma ke th e r ema in der of t h e pa ym ents o n t he D W R L oa n n ot
c over ed b y th e D on n er L a ke As s es s m e nts . In th e ev ent tha t D on n er La k e Ass ess me nts a nd lo ng-t er m
in vest m ent a r e ins u ff ic ie nt to pa y th e D W R L oa n, th e D is tr ict is ob liga ted to p a y the s h or t fa ll fr o m W a ter
S ys te m R ev enu e s . T he ob liga tion t o pa y s u ch s h or t fa ll fro m W a t er S yste m R ev e nu es is p a ya ble
su b or dina t e to th e 2 0 15 B on ds a n d D W R Pr op os itio n 55 L oa n a s well a s C ontr a cts a nd B o nds .
T he D istr ic t ha s ent er ed int o ins ta llm en t loa ns f ro m t im e-to -tim e t o f ina nc e va r iou s im p r o vements
to th e W a t er S ystem a n d r ela te d v eh ic les a n d equ ip m e nt (“Inst a llme nt L oa ns”). As of D ec e mb er 3 1, 2 0 1 4,
th e ou ts ta n din g pr inc ip a l a mou nt of the I ns t a llm ent L oa ns , ex c lu din g th e p or tion a t tr ib uta b le t o the E lec tr ic
S ys te m, wa s $8 6 9,7 26. T he ter m o f su c h Ins ta llm ent L oa ns is 1 5 yea r s, wit h a f inal pa y m e nt in [2 0 17 ].
T he I ns ta llm en t L oa ns a r e secu r ed b y t he i mp r o v em e nts fina nc e d a n d a r e pa ya b le fr o m W a t er S ys te m
R ev enu es s ub or dina t e to C o ntr a cts a nd B on ds, in cl ud ing t he 20 1 5 B on ds a nd th e 2 0 06 Ins ta ll m en t
P a ym ents .
A d diti o nal O u tst a nding D istr ict O b lig atio ns . O n Ju ne 2 8 , 2 0 11, the D is trict is su e d its T a xa b le
P ensi on O bli ga t ion B on ds , S er i es 2 0 1 1 (t he “P ens io n O b liga tio n B o n ds ”) i n t h e a g gr ega t e pr inc ip al a m ou nt
of $7 ,8 1 6,00 0 for th e p u r p ose of r efu n d in g its pens ion ob liga t ion for its p ar ticip a t io n in P E R S . S e e “-
E mp l oy ees a nd E mp loy ee B en e f its – P ens io n B en ef its ” h er ei n. T he P ens io n O bl iga tio n Bo n ds ma tu r e o n
Ju n e 3 0 , 2 02 2, a nd, a s of D ec e mb er 3 1 , 20 1 4, t he P ens i on O b liga ti o n B o n ds w er e ou ts ta n di ng in th e
p r inc ip a l a m ou nt of $6 ,177,0 00. T he P e ns ion O bliga t ion Bo n ds a r e pa ya b le fro m c er ta in r ev enu es of th e
E lect r ic S yst e m, a s wel l a s D is tr ict emp loy e e p en sion c o ntr ibu ti ons , a nd W ater S yste m p ens io n
c ontr ib utio ns .
M ello -R o o s B o nd s. In or d er to fina nc e pu b lic im pro ve men t s n ee ded t o d e ve lop p r op ert y wit hin
T r u ck ee, th e D ist r ict for m ed tw o com mu nit y f a cilit ies d is tr icts (ea ch, a “C F D ”), w hic h is s u ed s p ec ia l ta x
b o nds p ur s ua nt to the M ello-R o os C o mm u nit y F a cilit ies Act of 19 8 2 , a s a m end ed. T he D istr ic t for m ed th e
T r u ck ee D o nn er P u blic Ut ilit y D is tr ict C om mu n ity F a cilities D is t rict N o. 0 3-1 (O ld G reenw oo d) (“C F D
N o. 0 3 -1”) i n 2 00 3 a nd t he T r uckee D on ner P ub lic Util ity D is tr ict C o m m u n it y F a cilit ies D is tr ict N o. 0 4 -1
(Gr a y’s C r os sin g) (“C F D N o. 04 -1 ”) in 2 00 4, ea c h of w h ic h is a co m p o n ent u n it of t h e D istr ict f or fi na nc ia l
r ep or tin g pu r p os es. T he bo n ds issu ed b y t h e r es p ectiv e C F D ’s a r e s pec ia l ob lig a t ions of t h e C F D ’s , ar e not
g ener a l or sp ec ia l ob liga t io ns of th e D is tr ict or g en er a l ob liga tio ns of th e r esp ect iv e C F D ’s, a nd ar e n ot
p a ya b le fr o m N et W a ter System R e v enu es .
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O n D ec emb er 2 2 , 2 00 3 , t he D istr ict , thr ou g h C F D N o. 03 -1 , iss ued sp ec ial t a x b on ds in t he a m ou nt
of $12 ,44 5 ,00 0 (the “2 00 3 O ld G re en w ood Bo nds ”), t he net proc eeds of w h ic h w er e u sed to fina n c e va r iou s
p u blic imp r o v e m ents for p r oper ty wit h in th e O ld G reenw o o d a r ea of the D istr ic t. O n Ja nu a r y 28, 2 01 4, th e
D istr ic t, thr ou g h C F D No. 0 3-1, issu ed a sp e cia l ta x re fu nd in g b on d i n th e a m ou nt of $10 ,4 8 9 ,7 00 (the
“20 14 R efu n di ng O ld G r e en w oo d B o nd”) f or t h e p ur pos e of r efun d in g th e the n-ou ts ta nd ing 20 03 O l d
G r e en w oo d B o nds . T he 2 0 14 R efu nd in g O ld G r e enw ood B o nd ma tu r es o n S ep t emb er 1 , 20 3 2, a nd, a s of
D ec em b er 3 1, 2 0 14, wa s outsta nding i n th e pr inc ip a l a m ou nt of $1 0 ,34 4 ,4 0 0. T he 2 0 14 R ef u n d in g O ld
G r e en w oo d B o nd is s ecu re d b y a n ad v alo r e m p rop er ty ta x l evied on a ll ta xa ble p r op er t y wit hin t he O l d
G r e en w oo d por tio n of t h e D is tr ict in an a m ou nt s ufficient t o pa y th e p r inc ipa l of a n d int er es t c o m ing du e
o n th e 20 14 O ld G r ee nw oo d B o nds.
O n S ep t em b er 14 , 200 4 , t he D istr ict , thr ou g h C F D N o. 0 4-1 , is s u ed s p ec ia l t a x b on ds in th e a mount
of $15 ,37 5 ,0 0 0 (t he “2 00 4 Gra y’s C r os sin g B o nds ”), t he net p r oc eeds of w h ic h w er e u s e d to fina nc e va r ious
p u blic imp r o vemen ts for p r op er ty wit h in th e G r a y’s C r ossin g ar ea of th e D ist r ict. T he 2 00 4 G r a y’s
C r oss in g B on ds ha v e a fina l ma t u r ity of S ep t em b er 1 , 203 5 a nd, a s of D ec e mb er 31 , 2 01 4, w er e ou tsta ndin g
in th e pr inc ip a l a mou nt of $1 4,6 85 ,00 0 . O n J u ly 1 3, 2 0 05 , t he D istr ic t, thr ou g h C F D N o. 04 -1 , is s ued
sp ec ia l t a x b on ds in t h e a m ou nt of $19 ,15 5 ,0 0 0 (the “2 00 5 G ra y’s C r os sin g B on ds,” a nd t o g eth er w ith t h e
2 0 04 G ra y’s C r oss ing B o n ds, th e “G ra y’s C r os sin g B o nds ”). T he 2 0 0 5 G r a y’s C r os s in g B on ds ha v e a fina l
ma tu r it y of S ep t emb er 1, 2 03 5 a nd, a s of D ec e mb er 31 , 2 0 14 , w er e ou tst a nd in g in t h e p r i ncip a l a m ou nt of
$1 8,0 30,00 0 . T he G r a y’s C r os s in g Bo nds a r e secu re d b y a n ad val orem pr op er ty ta x levie d on a ll ta x a b le
p r op er ty w it hin the G r a y’s C r os sin g por ti on of th e D ist r ict in a n a m ou nt su ffic ient to p a y the p r in cip a l o f
a nd int er es t com in g du e o n th e G r a y’s C r os sin g B o n ds .
E lec tr ic S yste m
In a ddit ion to p r ov id in g wa t er t hr ou g h th e W a ter S ys te m, th e D ist r ict e nga g es in th e d is tr ib u tio n,
sa le a n d d el iver y of elec tr ic p o w er a nd e nerg y t hr ou g h the E le ctr ic Sys t e m. T he El ectr ic Syst e m is a
tra ns mis s io n-dep en de nt util it y l oca t ed h ig h o n t h e E a ster n slop e of t he S ier r a N eva da , wit hin N V E n er gy ’s
c ontr o l a r ea , a nd is n ot int er c on n ect ed w ith a ny oth er u til it y. D u ring F isca l Y ea r 2 0 14 , the E lec tr ic S ys t e m
ser v ed 13 ,34 9 cu stom er s , c o mpris ed o f 1 1,8 5 1 r es id e ntia l cu s to m e r s , a nd 1 ,4 9 8 c om mer c ia l a nd ot h er
c usto mer s . D u r ing su ch p er iod, th e E lect r ic S ystem su pp lie d 1 42 ,58 4 ,28 7 kilo wa tt-hou r s of ener g y a n d
ha d a p ea k dem a nd of 36 ,1 1 4 kilowa tts .
T he E lectr ic S yst em is a n et wor k t r a nsm issi on s er v ic e cu sto mer u n der th e cur r ent ly eff ec tiv e joi nt
N V E ner g y O pen Ac c es s T ra ns mis s io n T ariff. T he E lectr ic S yst e m us es this n et w or k ser v ic e to im p or t
int o a n d trans p or t a cr oss N V E ner gy ’s gr id a ll of th e po wer nec e ss a r y t o serv e th e E le ct r ic S ystem ’s loa d.
T his loa d is ser v ed fr o m f ou r sub sta tio ns a nd o ne d is tr ib u tion int er c on nec t io n w it h N V E n er g y.
T he E lec tr ic S yst em t er r it or y is c omp ris ed of a p proxi m a tely 44 s qu a r e m ile s in th e eas ter n por ti o n
of th e C ou nty a n d a p p r ox ima t ely 1.5 s qu a r e miles in a dja c ent P la cer C ou nt y. T he E lectr ic S yst em s er v es
th e va st ma jor ity of t h e s er v ic e a r ea of t h e D is tr ict a nd ha s mor e tha n 21 8 mi les of 1 2.4 7 kil ov olt a n d 1 4.4
k ilo v olt d istr ibu t io n lin es, inc lu din g a b ou t 83 m iles of un d er gr ou n d dist r ib u tio n ca bles.
R ev enu es of th e E lectr ic S y st e m a r e not a va ila b le to p a y t h e princ ipa l of or int er est o n th e 2 0 15
Bo n ds a n d op era tio n a n d ma int e na n c e c os ts of t he E lectr ic S yst e m do not c ons titu t e O p er a tion a nd
M a int e na nc e C osts of t he W a ter S yste m.
22
T H E W A T E R SY ST E M O F T H E D IS T R IC T
W ate r S upp ly
G en eral. C urr ently, a ll of th e wa ter the D is tr ic t p r odu c es co m es fro m d eep dr ill ed w ells. T h es e
w ells w ith dr a w fr o m th e M a r tis Va lley a qu if er , w hich is ma d e u p of a col lect io n of so ils tha t ar e
a ppr ox ima t ely 1,0 00 feet thic k. T hes e s o ils a r e u nd er la in b y i mp er v iou s b edr oc k, w h ic h a cts a s a b ow l t o
h o ld wa t er tha t ha s collec t ed in th e b a si n t ha t ha s co llect ed o ver hu n dr eds of y ea r s . An a r ea of o v er 5 0
squa r e m iles dr a ins int o th e M a r tis Valley ba si n. T he groun dwa ter in th e M a r tis Va lle y b a si n is r ec ha r ge d
p r ima r ily t hrou g h s n o wfa l l a nd r a inwa ter . H y dr og eo l og ic st u dies c o nclu d e t ha t th e a mou nt of gr ou n d w a t er
h eld in th e b a s in is s u ffic i ent to su p ply c ur r ent d ema n d s for deca de s ev e n if no a dd iti ona l wa t er ent er s th e
b a sin. T he M a r t is Va ll ey b a s in is loca ted w ith in th e T ruck ee b a s in, a nd F ed er a l la w p r ohib its t h e d iv er s io n
of wa ter in t h e T r uckee b a s in for us e ou ts ide o f t h e T r uckee b a sin.
T he D istr ict a ls o ha s sur fa c e wa ter r ight s in D onn er L a ke, M cG la sha n S p r ings a n d T onnin i S p r ings.
T he D is tr ic t d oes n ot cu rr e ntly u tiliz e th es e su r fa ce wa ter r ight s. Alth ou g h th e D ist r ict ma y u s e c er ta in of
su ch su r fa ce wa ter r ig ht s a t so me p oint in t h e fut u r e, su c h u s e woul d e nt a il s ig n ifica nt ca pit a l im pr o v em en ts .
As d escr ib ed b elo w u nd er “— C a lifor n ia D r ou g ht a n d R esp ons e,” t h e c ur r e nt dr ou g ht ha s not ha d
a mea su ra b le impa c t on the wa ter s up ply in the M a r tis Va lley ba sin.
H i s to ric and P ro j ected W a ter S upp ly. T he D istr ic t meets it s wa ter su pp ly d ema n d pr i ma ril y
thr ou g h p u mpin g wa ter fr o m its 1 3 d e ep dr ill ed w el ls . T hes e wa ter s u pp lies a re exp ect ed t o m eet a ll f u tu r e
wa t er d e ma n ds t hrou g h [___]. H o w ev er , t he W a t er S yste m ma y ex p er ie nc e a sh or t-t er m wa t er s up p ly
sh or ta ge in th e fu tu r e. T h e D is trict b e lieves t ha t a w a ter s up p ly s horta g e is m os tly lik ely t o b e ca u s ed b y
th e fa ilu r e of a ma jor wa ter s up ply fa cilit y, s uch a s a well, pu mp st atio n or tr a nsm issi on p ip e li n e.
H istor ica lly, th e W a ter S ystem has be en mos t i m p a ct ed by p ow er ou ta g es. In or d er to m inimi z e t h e im p a cts
of fu tu r e p ow er ou ta ges, the D is tr ic t ha s insta ll ed g ener a t or s a nd ma nu a l tra nsf er s witc he s a t its p u mp
st a tions a nd ha s pur cha sed t ra iler -m ou nt ed p or ta b le g e ner a t or s . Ad dit io na lly, e v ents s uc h a s ea rthqu a ke s,
fir es, or ma jor equ ip m en t fa ilu r es cou ld c a u s e s u ch wa ter su p p ly shor ta g es . S u ch wa ter s u pp ly shor ta ges
a r e ex p ec t ed to b e som ew ha t s hor t in dur a tion, b u t ma y oc cu r w it h ou t wa r n in g.
M a rt is Va lle y G r ou n d w at er M a na g ement P la n. T he M artis Va lley ba sin u nd er lies a ppr ox ima t ely
3 5 ,00 0 a cr es in the C ou nties, n ea r T r u c kee. T his ar ea ha s s een sig n if ica nt gr owth in th e la st fe w d eca des,
w ith m or e p lan n e d f or the fu tu r e. As a r esu lt, ma inta in in g a n a dequ a t e wa ter su pp ly a nd pr ot ecti ng wa ter
qua lity a r e cr it ica l for the r eg io n’s futu r e. T he D istr ic t, th e N or t hs ta r C omm u nit y S er v ic es D ist r ict a nd th e
P la cer C ou nt y W a ter Ag e nc y a r e th e t hr e e p r ima r y p ub lic wa t er a g e nc ies t ha t dep end o n the M a r tis Va lle y
b a sin for t heir wa ter s u pp ly. In Apr il 2 01 3 , t he t hr ee a g enc ies partner ed t o u pda t e a gr oundwa t er
ma na gemen t pla n to h elp d evelop a gr ou n d wa t er m od el for the M a r tis Va ll ey b a s in (th e “G r ou n d wa t er
M a na gement P la n”). T he G roun d w a t er M a na g ement P la n pr ovi des gu ida n c e n ec es s a r y to a lig n
gr ou n d wa t er po lic y. [T O C O M E – Dis cu s sion of T r uckee R iv er O p er a ting A gr eem ent a l loca t ion of su r fac e
a nd gr ou nd wa t er in th e M a r tis Va lley b a s in.]
M o vin g f or wa r d, the pa rt ner a g en cie s p la n to meet a n nu a lly to discus s t he imp lem enta t io n of t h e
G r ou n d w a t er M a na g ement P la n, a nd p la n to u p da t e the G rou n dwa ter M a na gem ent P la n ever y five y ea r s ,
su mma r iz in g gr ou n dwa t er con d it ions a nd ma na g em e n t a ctivit i es f or t he p er io d co v er ed. [T O C O M E –
D iscu ss io n o f C a lifor nia Su sta inab le G r ou n d wa ter M a na ge me nt Ac t of 2 01 4.] In a ddit ion to th e
G r ou n d w a t er M a na gem en t P la n, th e thr e e a g e ncies p a rt n er ed t o fu nd t he c r ea t ion of a co mp u t er m od el of
th e M a r tis Va lley Ba sin, i nc lu din g a c lima t e c ha n g e m o d elin g c omp on ent , w hic h is ex p ect ed t o b e
c omp let e d by th e end of F isca l Y ea r 2 01 5 .
23
W ate r S y ste m
G en eral. T he exist in g wa ter fa cilit ies of the D istr ic t ca n b e gr ou p e d int o fou r b asic c omp o n ents :
(1) wa ter s ou r c es, (2 ) p ump in g st a tions , (3) stor a ge ta nks , a nd (4) p ip e lin es .
W a ter S ou rces. T he D ist r ict cu r r ent ly p r o du c es p ota ble wa ter fr o m a tota l of 1 3 deep dr illed w el ls.
O utp u t of t hes e 1 3 w ells r a ng es fro m a hig h of r ou gh ly 2,5 00 ga llo ns p er minu t e (“gp m”) fro m th e A ir p or t
W el l to a low of a p pr ox ima tely 3 3 gp m fr om th e H ir sch da le W e ll. M a x imu m da il y p r odu c t ion ca p a cit y
ex c e eds 1 6 .5 mil lion ga llo ns p er da y (“mg d”). C u r rent ly, ma x imu m da y d e ma n ds a r e 1 0.4 mg d a nd a v er a ge
da ily d ema nd is just ov er 4 .6 mgd.
A ll wa ter s up plie d t o p ot a b le wa ter cu sto mer s is in c o m p l ia n c e w ith S ta te a n d f ed er a l r egu la tio ns.
A ll of th e D is tr ict’s a ctive p ot a b le wa t er w el ls a r e equ ip p e d w ith dis inf e cti on s ys t ems utiliz in g liquid
c hlor in e. Ad diti o na lly, the D istr ic t op er a tes wa ter tr ea tme nt s yst em s a t two w ells – N ort hsid e a nd
H ir sch da le. T he N or thsi d e tr ea t m e nt s yst em rem o v es ex c es s le vels of a r sen ic, a nd th e H ir s c hda l e w ell
r em o v es ex c ess le ve ls of a r senic, ir o n a n d ma n ga n es e.
P u mp in g S tatio ns. T he D istr ict s er v es a r eg i on tha t ran g es in eleva t io n fr o m less tha n 5 ,7 00 feet
a bove s ea lev e l in H ir s ch da le to ov er 7 ,4 0 0 feet a bove sea le vel in th e w est er n end of th e D is tr ict loca t ed
c los e t o th e c r est o f t h e S ier r a N eva da mou nta ins. T he D istr ict u ses 25 dif fer ent p u mp sta t ions t o lift wa ter
to th e 46 differ ent p r essu r e z ones a t diff er ent ele vatio ns t hr ou g hou t th e s er v ic e a r ea . W ithin t h es e 2 5 p um p
st a tions a r e a t ota l of 6 6 p u mp s. T he ca pa city of t he p u m p s ta tio ns is su ff ic i ent t o sa tisf y p r es ent d ema n ds,
b u t cont inu e d gr o wt h will r e qu ir e ex p a nsi on a t a f utur e da te.
S tor a ge T a nks. T h er e a r e 3 6 wa ter stor a ge ta nks w ith in t he D istr ict. T hes e ta nks a r e u sed t o stor e
wa t er for fir e p r ot ec t io n a nd emer gen c i es, a nd to a u g ment the ca pa cities of t he w ells a nd pu mp in g s ta tio ns
dur in g sh or t-ter m (h ou r ly ) pea k d ema n d p er iods . O f th e 3 6 ta nks , on e is a n e leva t ed s teel ta nk (wat er
to w er ), one is a ha lf -b ur ied c o ncr et e ta nk, a nd th e r e ma ini n g 3 4 a r e s te el ta n ks w h os e ba se r es ts on t h e
gr ou n d. T he c o m b in ed st or a ge ca p a cit y of thes e t an ks is a bout 10 .1 m illio n ga ll o ns.
P ip el in es. T he fina l c o mp o ne nt of t he W a ter S ys tem is th e pip ing net w or k tha t t ra ns mits a nd
d ist r ib u tes wa ter thr oug h ou t the ser v ic e a r ea s. T h e p ip in g wit h in t he D ist r ict is var ied a s t o a ge, ma t er ia l
typ e, siz e, c ondit ion a nd p u r p ose. T he ma jor it y of t he p ip in g is eit h er s ix or eig ht in c h es i n dia m et er , is
ma d e of w eld ed s t eel, a nd is a p p r ox i mately 4 0 to 5 0 y ea r s old. T her e a r e s ect ions tha t a r e o ld er tha n 50
y ea r s ; oth er s are l es s tha n a year old. P ip es r a ng e i n d ia m et er fr om tw o inc h es to 2 4 inc hes. O ther ma ter ia ls
fou n d in th e pip i ng n et w or k a r e ga l va n iz ed ir o n, a sbes t os c em ent, duc t ile ir o n a n d p oly vin y l ch l ori de
(P VC ). T he tota l lengt h of p ip in g is mor e t ha n 2 17 miles .
S er v ic e A r ea. T he wa t er ser v ic e a r ea of t he D istr ict enc o mp a s s es p r oper ty w ith in b ot h of th e
C ou nt ies, a nd t h e D is tr ict is t h e o nly wa ter p r ov i der w it hin its ser vi c e a r ea . Pr esent ly, th er e a r e a n esti ma t ed
1 1 ,91 5 r esi d entia l dw elli ng u nits a n d 6 9 9 c om mer c ia l un its in t h e D istr ic t. T h e D istr ict cur r ent ly es t ima t es
tha t a p pr ox ima tely 4 71 of t he d w elling u nits i n t he s erv ic e a r ea of th e D istr ic t a r e ma int a in e d a s sec o nd
h o mes. W it hin th e cu r r ent s er v ic e a r ea , th er e a r e a lso 1 ,63 2 u nd evelop e d p a r cels wit h i n 1 0 0 fe et of a wa t er
ma in, w hic h a re su b ject t o a sta nd-by wat er ava ila b ilit y c ha r g e. W he n t he s er v ic e a r ea rea c hes b u ild ou t,
es t ima t es in dic a t e that th ere w ill b e 1 6 ,4 79 r esid entia l dw ell ing u nits a n d 7 70 c om m er c ia l u n its .
C u rr ent ly, th e d em a nd f or wa t er in t he D is tr ict is a p p rox ima t ely 7 ,20 0 gp m, or 1 0 .4 mg d on t h e
ma x imu m us e da y. At bu il d ou t, th e ma x i mu m da y de ma nd is es tima t ed t o inc r ea s e t o a pp r oxima t el y
1 5 ,20 0 gp m or 2 1 .9 mgd.
24
C alif or nia D ro ug ht an d R es po nse
S ta te D r ou g ht. H ydr o lo g ica l c o n diti o ns in t h e S t a te c a n va r y wid ely fr o m y ea r to yea r . S inc e
2 0 13 , mu c h o f th e S t a te ha s ex p er ien c ed dr ou ght c on d itio ns, w it h 2 01 3 b e in g o ne o f th e dr iest yea r s o n
r ec or d in th e S ta te. D ue to t hes e r ec or d-dr y co n ditio ns , G ov er n or E d mu nd G . Br own, Jr . (t he “G ov er n or ”)
ha s ta ke n sev er a l a cti ons. O n Ja nua ry 1 7, 2 01 4, the G o ver n or p r ocla im ed a dr ou g ht em er g e nc y. T hen, o n
Ap r il 1 , 2 0 1 5 , the G o v er n or is s u e d E x ecut iv e O r der B -2 9 -1 5 (th e “E x ecut iv e O r der ”) t o a ddr es s t he on g oin g
dr ou g ht con dit io ns in th e S t a te. T he E xec uti v e O r d er , amo n g ot h er thin gs , dir ec ts t he S ta t e W a ter R esour c es
C ont r o l B oa r d (“S W R C B ”) t o im p os e r es tr ic t io ns to a chi ev e a s ta tewid e 25 % r edu ctio n in pota b le ur ba n
wa t er u s a ge fr o m 2 0 13 le ve ls t hr ou gh F eb r u a r y 2 8 , 20 16 . T he E x ecutiv e O r d er fur th er dir ects th e S W R C B
to im p os e r estr ictio ns to r equ ir e t ha t com m er c ia l, i n du str ia l a nd ins titu ti o na l p rop er ties, s uch a s c a mpu s es ,
g o lf c ou r ses a nd c em et er ies, im me dia t ely i mp lem en t wa t er ef f icienc y m ea su r es t o r e du c e p ota b l e wa t er
u sa ge, a n d c a lls u p on t h e S W R C B to d ir ec t u r ba n wa ter su p plier s t o deve lop r a te s tr u ct ur es a nd oth er p ric i n g
mec ha n is ms , inc lu ding bu t not lim it e d to su r cha r ges, fe es a nd p ena lti es, to ma x im iz e wa t er cons er va tio n
c ons is t ent w ith s ta t ew id e wa ter r es tr ic tions . T h e E x ec utiv e O r der in c lu des s e ver a l p r ovisi o ns t o incr ea s e
e nfor c e me nt a c tiv it y a ga inst wa t er wa s te a nd to s tr ea m lin e t h e S ta t e a nd l oc a l r esp o ns e to dr ou g ht-r ela t ed
init ia ti ves.
O n Ap r il 2 8, 2 01 5 , t h e S W C R B r el ea s ed a N ot ic e of P r op os ed E mer g e nc y R egu latio ns. T hen, o n
M a y 5 , 20 1 5, follow in g a for ma l r u lema k i ng p r oc ess a n d pu b lic c o m m e nt p er io d, th e SW R C B a d op t ed a n
e me r genc y r egu la t ion t o i mp lem ent th e E x ecutiv e O rd e r (t he “E m er genc y R e gu la tio ns ”). T h e E m er g enc y
R egula tio ns w er e a p p r ov ed b y th e Off ic e of A d mi n is tra tive L a w o n M a y 1 8 , 20 1 5, took eff ect o n
Ju n e 1, 20 15 , a nd w ill r ema i n in eff e ct f or 2 7 0 da ys from su c h da te. U nd er the E m er g e nc y R e gu la ti o ns ,
4 1 1 ur ba n wa ter p r ov id er s in th e S ta te ar e cla s s if ie d int o n in e t ier s a nd a s sign ed a r equ ir ed c o ns er va tio n
st a nda r d w hi c h is imp os ed o n ea ch t ier . T h e ti er cla ss ifi ca tio ns a r e b as e d u p o n a wa ter s u pp lier’s p er -ca p ita
wa t er usa ge in th e thr ee m ont h per io d Ju ly to S ept em ber 2 01 4 . T he c o ns er va ti o n s ta nda r d a pp lied to th e
tier s rang es fr om a 4 % r edu ctio n in t ota l p ota b le wa ter p r odu ct io n (a lthou g h n o wa ter p r ovider s w er e
p r op os ed to b e c la ssif ied i n su c h tier a bsent t h e d emo ns tra t ion b y a wa ter p r ov id er of s a tisf a cti on of c er ta in
sp ec if ied cr it er ia ) to a 3 6 % r edu ct ion in tota l p ota b le wa t er pr odu ct io n fr o m 2 01 3 lev els . As a dop t e d, th e
E m er genc y R egu latio ns r e qu ir e a r ea s wit h h ig h p er -c a p ita wat er u sag e to a chi ev e p r op or ti o na tely gr ea ter
r eductio ns in wa ter u s e tha n thos e w ith lo w use. T he E m er genc y R egu la ti ons p r ovid e tha t the 2 ,6 00 “s ma l l
wa t er su pp liers ” in th e S ta te tha t s er v e f ew er tha n 3,0 00 cu sto m er s or deli v er les s t ha n 3 ,0 0 0 a cr e-f eet of
wa t er a nnu a lly a r e r e quir ed t o e it h er a c h ieve a 2 5 % c o ns er va tio n s ta nda r d or r est r ict ou t do or irr iga tion t o
n o mor e t ha n tw o da ys p er w e ek. C o m m er c ia l, indu s tr i al a nd i nstituti o na l p r op er ti es tha t a re n ot s er v ed b y
a wa t er su pp lier (or a re self-s u p p lied ) a r e sim ila r ly r eq u ir ed t o eit her a chieve a 2 5% co ns er vat io n st a nda r d
or r es tr ict outdoor ir r iga t ion t o n o mor e tha n t w o da ys p er w ee k. U nd er t he E mer g e nc y R egu la ti ons,
c omp lia nc e b y th e 4 11 ur ba n w a ter s u p plier s will b e a s sess ed f or th e p er io d of J un e 20 15 thr ou g h F eb r u a r y
2 0 16 a s co mp a r ed to wa t er u sa ge in the cor r es p o nding p r ior ti mesp a n of Ju n e 2 01 3 thr ou g h F eb r u a ry 2 01 4.
In a dd it io n to t h e t ota l m o nt hly wa t er pr odu ct io n a nd s pecific r epor tin g o n r es id e ntia l u se a nd e nf or c em ent
a ct ion pr evious ly a dopt ed by th e S W R C B , th e E m er g enc y R egu latio ns a ls o inc lu d e new rep or tin g
r equir e m ent s for u r ba n w a ter su p p li er s to inc lu d e inf or ma ti o n o n w a t er use in th e com mer cia l, in du str ia l
a nd i ns tit utio nal se ctor s . In or der to enf or c e co mp lia nc e by wa t er su p p lier s, the r egu la tio n a u thor iz es th e
S W R C B to issu e in for ma ti ona l or d er s, cons er va tion or d er s or cea s e a n d d es ist or d er s r equ ir ing a dd it iona l
sp ec if ic a cti ons by a wa t er s u p p lier t ha t is not meet ing its co ns er va tio n s ta nda r d. Fa ilu re to p ro v id e
inf or ma tio n r equ est ed pu r su ant to a n inf or ma tio nal or d er w ith in th e r e qu ire d ti m efr a m e wou ld b e s u bject
to c ivil l ia bilit y of up to $5 00 per da y f or ea ch da y ou t of c omp lia nc e. W a ter a genc ies tha t vi ola t e c ea se a nd
d es is t ord er s ma y be su b ject to a c iv il lia b il it y of up to $1 0 ,00 0 a da y.
25
U nd er th e E m er genc y R egu la t ions, t h e D is tr ict is cla s sified in T ier 7 (Ju ly to S ept e mb er 2 0 14
r esi dent ia l p er c a p it a wa ter u s e of 13 9 .4 ga llo ns or mo r e p er da y) a n d is su bje ct to th e 2 8 % c o ns er va ti o n
st a nda r d pr op os ed for tha t tier. S ee “-D is tr ict D r ou ght R es p ons e Act io ns a nd I mpa ct” h er ein f or a ctio ns
ta ken b y the Dis tr ict in r esp o ns e to th e dr ou g ht a nd th e E x e cu tiv e O r der .
D is tr ict D roug ht R esp o nse A c tions . O n S ep t emb er 10 , 2 0 1 4, th e Boa r d a dopt ed O rdina nc e N o.
2 0 14 -05 , a n e mer genc y wa t er cons er va tio n p r ogr a m tha t took ef f ect o n Oc t ob er 10 , 2 0 14 (the “2 01 4
O r di na nc e”). T h e 2 01 4 O rdina nc e inc lu des f iv e sta g es of a ctio n tha t a r e d es ig n ed t o r edu c e t he qua nt it y o f
wa t er u sed w it h in th e D istr ic t in th e ev ent of a ny fut u re wa ter su p p ly or dr ou g ht em er g en cy. P ur sua nt to
th e 20 1 4 O r dina nc e, t h e D is tr ic t ha s mon it or ed a nd w i ll c ont i nu e t o m on it or th e pr oject ed su pp ly a n d
d ema n d for wa ter by its cu s t omer s o n a da ily ba sis. T he 2 01 4 O r dina n c e c alls f or t he G en er a l M a na g er, in
th e ev ent of a n emer genc y, to i mp lem en t a n d ter m ina te th e a p p r op r ia te sta ge of wa t er cons er va t ion. T he
fiv e s ta g es a r e a s follo ws :
(1) S ta ge 1 imp os es r es tr ic tions wit h w hi ch c o m p lia nc e is volu nta r y in or d er to r educ e wa t er
c onsu mpt io n b y a p p r ox ima tely 1 0%. S ta ge 1 lim its t h e ir r iga tio n wit h p ota b le wa ter o f or na me nta l
la ndsc a p es a nd tu r f t o ev er y oth er da y, pr oh ib its t he a p p lic a t io n of p ot ab le wa t er to dr iv ewa ys a nd
sid ewa lks u nl ess f or dr iv ewa y s ea li n g or co ns tr u ct ion, and p r o hib it s th e us e of a hos e to wa s h a
mot or v eh ic le w ith p ot a b l e wa ter, ex c ept w her e t he h os e is fitt ed w ith a s hu t-o ff n oz z le.
(2) S ta ge 2 imp os es r es tr ictio ns wit h w h ic h co mp lia n c e is ma nda tor y in or d er to r edu c e wa ter
c onsu mpt io n b y a p pr ox ima t ely 2 0 %. T he r est r ictio ns im pos ed i n S ta g e 1 co nt inu e to a p p ly du ri n g
S ta ge 2 , a nd cu s to m er s ma y b e s ub ject to fin es a nd p ena lt i es for fa ilu r e t o com p ly w ith th e
r equir e m ent s .
(3) S ta ge 3 imp os es r es tr ictio ns wit h w h ic h co mp lia n c e is ma nda tor y in or d er to r edu c e wa ter
c onsu mpt io n b y a p pr ox ima t ely 3 0%. Sta ge 3 li mits ir r iga tio n of or na m enta l la nds c a p es a nd tu r f to
thr ee da ys per w e ek, prohib its th e a pp lica ti on o f pota ble wa t er to dr ivewa ys a nd sid ewa lks, a nd
p r oh ib its t he use of a hos e to wa sh a m ot or vehic l e with p ota b le wa ter , ex c ep t w h er e th e hos e is
fit t ed w ith a s hu t-off n o zz le. As wit h S ta g e 2 , du r ing S ta ge 3 , cu st o mer s ma y be su b ject t o fines
a nd p ena lties for fa ilu r e to c o mp ly w ith th e r equ ir em e n t s . A dd it iona lly, du r i n g S ta ge 3, th e D is tr ict
to ins ta ll f lo w r estr icti ng d ev ic es o n a c usto mer ’s ser v ic e.
(4) S ta ge 4 imp os es r es tr ictio ns wit h w h ic h co mp lia n c e is ma nda tor y in or d er to r edu c e wa ter
c onsu mpt io n b y a p pr ox ima t ely 4 0%. Sta ge 4 li mits ir r iga tio n of or na m enta l la nds c a p es a nd tu r f to
tw o da ys p er w eek, p rohib its the ap p lica tio n of p ota ble wat er to dr iv ewa ys a n d s idewa lks, a nd
p r oh ib its t he use of a hos e to wa sh a m ot or vehic l e with p ota b le wa ter , ex c ep t w h er e th e hos e is
fit t ed w it h a shu t-of f noz zle. As is th e ca se du r in g S ta g es 2 a nd 3 , cu sto m er s ma y b e su b ject to
fin es a n d p e na lt ies f or fa ilur e to c omp ly w it h th e r e qu ir e me nts, an d a s is th e ca s e in S ta g e 3 , the
D istr ic t ma y ins ta ll f lo w r estr ic tin g d ev i c es on a cu stomer ’s ser v ic e. A d ditio na lly, (8 ) S ta ge 4
ma n da tes th e r ep a ir of a n y cus tom er l ea k in p lu mb i n g a nd/or ir r iga t ion s yst em w h en f oun d, a n d
w ithin 1 0 da ys of notic e b y th e D is trict to r ep a ir .
(5) S ta ge 5 imp os es r es tr ictio ns wit h w h ic h co mp lia n c e is ma nda tor y in or d er to r edu c e wa ter
c onsu mpt io n by a p pr ox ima t ely 50 %. In a dd itio n t o r equ ir in g t h e r epa ir of lea ks i n th e plu mb in g
sys t em w h en f ou n d, a nd w it hin 10 da ys of n ot ic e b y th e D is trict to r ep a ir , S ta ge 5 p r o hib its th e u s e
of outd o or wa ter in the a r ea a f fect ed b y t he c o ns er va t ion r equ ir em ent. S ta g e 5 a u thor iz es th e
D istr ic t t o inst a ll flo w r es tr ic ti n g d evic es on a cu s tome r’s s er vic e, to imp lem ent ma n da tor y wa t er
r at io n ing thr ou gh t h e u s e of r ollin g ou ta g es, a nd to d is conti nu e ir r iga t ion ser v ice s. In S ta ge 5,
c usto mer s cont inu e to b e su bj ect to fines a n d p ena lties for fa ilure to c o m p ly wit h th e r equ ir em ents
of S ta ge 5.
26
O n M a y 20 , 20 15, the B oa r d dir ect ed t h e G en er a l M a na g er to implem ent Sta g e 4 of t he 2 01 4
O r di na nc e, effectiv e Ju n e 1, 2 01 5. T he D istr ict is cu rr e ntly im p le m ent in g a n outr ea ch a nd c om m un ica t io n
p r ogr a m f or c us to mer s in or d er to imp lem en t th e new c ons er va t ion ta r get. T he D is tr ict a lso p la ns to c o n du c t
d ir e ct ou t rea c h t o a g enc ies, k ey a c c ou nts, s er vi c e gr ou p s, ho m e o w ner s a s soc ia tio ns, a nd ot h er s. T he
D istr ic t b eliev es t hat s uch a ct io ns w il l li kely ena b le it to r e duc e wa ter u s a ge b y u p to 2 8 % fr o m 2 0 1 3
a mou nts in a ccor da nc e w it h the r egula tio ns a d op t ed b y t h e S W R C B o n M a y 5 , 2 01 5 . T h e D is tr ict ha s
a lr ea d y r edu c ed c onsu mp tio n by 1 0 %, a nd t h e r e ma i nd er of t h e r e du ct ions mu st oc cu r b y F ebr ua ry 20 1 6
u n der t h e S W R C B r egula tio ns.
E x pec te d D r o u g ht Im pa ct o n D is tric t. T he D is tr ict is not cur r ent ly ex p er iencin g a wa ter s up ply
sh or ta ge. N e ver the les s , t he D is t rict a nd its cu sto m er s m ust co ns er ve 28 % of wa t er as c o mp a r ed t o t he 20 1 3
wa t er u sa ge levels , a s r equir ed p urs ua nt to th e E mer ge n c y R egu la ti o ns. T he r edu ct io ns in wa ter u sa ge
r esu lt in g f r o m imp le men ta ti on of t h e E m er g e nc y R egu la tio ns ma y a dv er s e ly a ff ect th e D is tr ict’s p r oje ct ed
op era tin g r esu lts set for th under “F IN AN C IAL IN F O R M AT ION O F T H E D IST R ICT – Pr oj ect e d
O per at in g R esu lts a nd D eb t S er vic e C ov er a ge” h er e in. T h e D is tr ic t curr e ntly pr ojec ts d ecr ea sed r ev enu e
in th e a mou nt of ________ du e to th e ma nda tor y c ons er va ti on t ar get o f 2 8%. Add it iona lly, th e D is t r ict ha s
p r oject ed i ncr ea s ed D is tr ict sta ff la b or cos ts in t h e a m o u nt o f $2 8 ,00 0 a nd outr ea ch c ost s in t h e a m ou nt of
$2 5,0 00 a s a r esu lt of th e i mp lem e nta t ion a nd e nf or ce m ent of t h e c o ns er va tio n p r ogr a m.
T he D istr ic t ex p ects t ha t a ny d ecr ea se in r ev e nu es a s a r esult o f t h e ma nda tor y wa ter c o ns er va tio n
w ou ld li kely b e offs et by a cor r esp on d ing r edu ctio n i n ex p e ns es a s s ocia t ed w ith th e p u mp in g a nd t r ea tment
of les s wa ter for cus tom er s. Any r e ma ini n g d iff er enc es b et w een r evenu e a n d exp ens es w ou ld lik el y b e
c over ed t hr ou g h t he u s e of D is tr ict r es er v es in th e s hort-t er m, a n d dur ing t he bu d get c yc le, t h e D is trict w i ll
c ons i d er r ate a dju s t ment s to ens ur e t h e f ina nc ia l sta b ilit y of t h e W a t er S ys te m. I n or der to a d dr es s t h e
d ecr ea s e d r ev enu e a n d increa s ed c ost s , the D istr ict’s cu rr e nt p la ns inc lu de a n incr ea se in wa t er s er vic e r a tes,
a s des cr ib ed u n d er the ca p t ion “— Wa ter S ystem R a tes a nd C ha r ges ” h er e in.
T he D istr ic t d o es n ot cu r r ently b e lie ve t ha t th e ma ndatory wa ter c o ns er va ti o n will ha v e a ma ter ia l
a dv er s e ef f ect o n th e D ist r ict’s a bilit y t o p a y the p rinc i pa l of a n d int er est on t h e 2 01 5 B o nds. T he D ist rict
is ob liga ted u nd er th e Ind entu re to set r a tes a nd cha r g es s ufficient to p r ov id e N et W a ter S ystem R e v enu e s
e qu a l to 1 2 5% o f D ebt S er v ic e du e in ea c h fis ca l y ea r a s mor e p a rt icu la r ly d es cr ib ed un der th e ca pt io n
“S EC UR I T Y F O R T H E 20 15 BO N D S — R a t e C oven ant ” h er ei n. T he a b ilit y of th e D is tr ict to m o d if y its
c ur r ent r a te str u cture c ou ld, h ow ev er , b e lim it e d b y c er ta in Sta te C o ns titu ti ona l p r o vis io ns , i nc lu din g b u t
n ot li mit e d t o P r opos it io n 2 1 8 . S ee “C O N S T IT UT IONAL L IM IT A T I O N S O N AP PR O P R IAT IO N S AN D
C H AR G E S ” her ei n.
27
W ate r Pr o d uct io n, A cc o unts a nd S a les R ev e nue s
H i s to ric W a ter P r odu ct ion, A cco u nt s a nd S a le s R ev enu es. T he f ollo w in g ta b l es s h o w t h e t ota l
a mou nt of wa ter p rodu c e d b y the W a ter S ystem c o mp ar e d w ith t h e tota l c ha n ge in th e nu mb er of r esi d ent ia l
a nd c o m m er c ia l a c cou nts , a s well a s r esid e nt ia l a nd c o mm er c ia l s a l es r e ve nu es f or the f ive most r ec e nt
F isca l Y ea r s. T he t er m “wa ter produ c tion,” in th e c o nt ext o f th e W a ter S ys te m, m ea ns th e tota l a mou nt of
wa t er p u mp ed fro m th e 13 d eep dr ille d w ells.
Table ___
H IST O RIC W A TER PRO DUCTIO N A ND ACCO UNTS
Fiscal Y e ar s 2010 t hrough 2014
Tr uck ee Donne r Public U tility Di stric t
Fiscal Year
T ota l
Pr od u ction (1 )
(M illion
G a llon s)
T ota l %
In cr ea se/
(D ecr ea se)
Com m er cia l
A ccoun ts
Comm er cial
A ccoun ts %
In cr ease/
(Decr ease)
Resid en tial
A ccoun ts
Residen tial
A ccoun ts %
In cr ease/
(Decr ease)
2010 1,78 6 (13.13)% 695 3.73 % 11,876 (0.20)%
2011 1,72 7 (3.31) 709 2.01 11,711 (1.39)
2012 1,85 7 7.53 706 (0.42 ) 11,753 0.36
2013 1,84 6 (0.58) 706 (0.00 ) 11,809 0.48
2014 1,68 2 (8.88) 699 (0.99 ) 11,915 0.90
(1) The total amount of water delivered to customers is less than the total production, due to water loss through leaks in the piping
system as well as other causes. Approximately 72% of the water produced by the Water System is currently delivered to customers.
Source: The Truckee Donner Public Utility District.
Table ___
H IST O RIC W A TER SY ST EM SALES R EVE NUES
Fiscal Y e ar s 2010 t hrough 2014
Tr uck ee Donne r Public U tility Di stric t
Fiscal Year
Residen tial
Re ven ues
Residen tial Reven ues
% In cr ease/
(D ecr ea se)
C om m er cial
Re ven ues
Com m er cia l
Re ven ues % In cr ea se/
(Decr ease)
2010 $8,9 73,220 4.61 % $1,1 84,084 4.10%
2011 8,731,6 70 (2.6 9) 1,227,5 33 3.67
2012 8,492,0 37 (2.74 ) 1,374,3 76 11.96
2013 8,508,6 07 0.20 1,338,2 98 (2.63)
2014 8,742,1 43 2.74 1,328,8 00 (0.71)
Source: The Truckee Donner Public Utility District.
M a na geme nt Di scu ss io n o f H is tor ic W ater Pro d u c tio n, A c co u nts and S a les R e venu e s. [T O
C O M E .]
28
P r oje cted W ater P ro du cti o n, A ccou nt s a n d S ale s R e venue s. T he f ollo w i n g ta bles s h o w a
p r oject io n of th e t ota l a mount of wa t er pr odu c ed b y th e W a ter S ys te m, th e nu mb er of r esi d ent ia l a nd
c om m er c ia l a cc ou nts , a nd th e a m ou nt of r es id entia l an d c o m mer c ia l s a les r e v enu es for th e cu rr ent a nd fou r
fol lowin g F is c a l Y ea r s.
Table ___
PRO JECTE D W ATE R PRO D UCTION AND A CCO U NTS
Fiscal Y e ar s 2015 t hrough 2019
Tr uck ee Donne r Public U tility Di stric t
Fisca l Y ear
Tota l
Pr od u ction (1 )(2 )
(Mi l lion
Gallon s)
T ota l %
In cr ea se/
(D ecr ea se)
C om m er cial
Accoun ts
Comm er cial
A ccoun ts %
In cr ease/
(Decr ease)
Resid en tial
A ccoun ts
Residen ti al
A ccoun ts %
In cr ease/
(Decr ease)
2015 1,37 9 (18.00)% 706 1.00 % 12,034 1.00%
2016 1,65 5 20.00 713 1.00 12,154 1.00
2017 1,67 2 1.00 720 1.00 12,276 1.00
2018 1,68 8 1.00 727 1.00 12,399 1.00
2019 1,70 5 1.00 735 1.00 12,523 1.00
(1) The total amount of water delivered to customers is less than the total production, due to water loss through leaks in the piping
system as well as other causes. Approximately 72% of the water produced by the Water System is currently delivered to customers.
(1) Projections assume implementation of ____% water use reduction for Fiscal Years _____. See “- California Drought and
Response - District Drought Response Actions” herein.
Source: The Truckee Donner Public Utility District.
Table ___
PRO JECTED W ATER SY ST EM SA LES R EVENUES (1 )
Fiscal Y e ar s 2015 t hrough 2019
Tr uck ee Donne r Public U tility Di stric t
Fisca l Y ear
Resid en tial
Re ven ues
Residen ti al
Re ven ues %
In cr ease/
(Decr ease)
Com m er cia l
Re ven ues
Com m er cia l
Re ven ues %
In cr ease/
(Decr ease)
2015 $9,141,031 4.56% $1,3 65,901 2.79%
2016 9,838,798 7.63 1,47 0,165 7.63
2017 10,513,257 6.86 1,57 0,946 6.86
2018 10,924,805 3.91 1,63 2,442 3.91
2019 11,352,580 3.92 1,69 6,363 3.92
(1) Projections assume (a) 1% growth annually in the number of Water System residential and commercial accounts and, and
(b) rate increases of approximately 6%, 5%, 3% and 3% in Fiscal Years 2016 through 2019. The respective rate increases for Fiscal
Years 2016 through 2019 have not been approved. For additional information regarding the proposed rate increases, see “Water
S ystem Revenues – Sales to Customers – Water System Rates” herein. Pursuant to Proposition 218, before the Board formally
approves the new rates, the District is required to under take a public process, including mailed notices, newspaper advertisements,
and a public hearing. See “CONSTITUTION AL LIM ITAT IONS ON APPROPR IAT IONS AND CHARGES – Pr oposition 218”
herein. The District expects the Board to approve the new rates in Au gust 2015. However, it is possi ble that such rate increases
will not occur at the rates assumed herein or at all. If such rate increases are not approved, the actual Water System Revenues
received could be less than projected.
(2) Projections assume implementation of ____% water use reduction for Fiscal Years _____. See “- California Drought and
Response - District Drought Response Actions” herein.
Source: The Truckee Donner Public Utility District.
29
M a na geme nt D is c u s s io n o f P roje cted W a ter P ro du ctio n, A ccou nt s a nd S a le s R evenu e s. [T O
C O M E .]
L arg est C usto me r s
T he f o llo w in g ta b le s ets for th the 1 0 la r ges t cus tom er s of th e W a ter S ystem of th e D istr ict a s of
D ec em b er 3 1 , 20 1 4, a s det er m in e d by the a m ou nt of th e ir res pectiv e a n nu a l p a y ment s . T he 1 0 c u sto m er s
list ed b elo w a c cou nt ed f or a p pr ox ima t ely 23 % of the W a ter S yste m’s t ot a l wa ter u sa ge a nd 5% of t ot a l
r ev enu es fr om s a les t o cu st om er s for t h e year e nd ed D ec emb er 31 , 20 14.
Table ___
W ATE R SY STEM LA RG EST CUSTOM ERS
Fiscal Y e ar 2014
Tr uck ee Donne r Public U tility Di stric t
T yp e of C ustom er Wat er Usage(1 ) A nn ua l Pa ym en ts
G olf Cour se 174,582,71 6 $156,375
G olf Cour se 66,0 43,306 48,0 82
G olf Cour se 34,2 56,097 108,637
Re cr ea tion D epartm ent 27,8 46,526 57,2 54
Sch ool Di str i ct 19,7 67,896 43,9 19
M obi le Hom e Park 15,2 86,198 30,1 68
H ospi ta l 13,1 20,223 40,6 55
M obi le Hom e Park 12,8 21,000 24,8 78
M obi le Hom e Park 10,0 47,980 16,6 82
A par tm ent Com plex 5,714,368 18,479
T op 10 Total 379,486,31 0 $545,128
T ota l Wa ter Syst em 1 ,682,39 3,977 $10,102,819
T op 10 as % of Total W a ter System 22.56% 5.40%
(1) Water usage in gallons.
Source: The Truckee Donner Public Utility District.
W ate r S y ste m R e ve n ue s
T he B oa r d ha s ra te s ett ing a u t hor it y a s provi ded u nd er the Act . T he D istr ic t is not s u b jec t to th e
ju r isd ic t io n of, or r e gula tio n by, th e S ta te P u b lic U t ilities C om m is s io n. S ee “C O N ST IT UT IO N AL
L IM IT AT I O NS O N AP P R O P R IAT ION S AN D C HA R G E S ” her e in for c er ta in li mita ti o ns of th e r a te
setti ng a u t h or it y o f th e B oa r d. T he D istr ic t annu a ll y d et er min es t h e a d equa c y of t h e W a t er S yst em r a te
st r uc tur e a fter full c ons id er a t ion of ex p ect e d op er a tio ns, ma i nt e na nc e a n d ca pita l c osts. T he D istr ict
c ur r entl y r ec ov er s t he c os t of t h e W a t er S yste m op er a tio n, ma int e na nc e a n d r ep lac e me nt, a s w el l a s ca p ita l
imp r ov em ents a n d c er ta in d ebt ser v ic e p ay m en ts (inc lu d ing t h e D eb t S er v ic e on th e 20 1 5 Bo n ds, the 2 00 6
C er tif ica tes, th e D W R P r op os it io n 55 L oa n, as well a s Bonds a n d C ontr a ct s ), thr ou g h a user fee s yst em.
T he ma jor c omp on ents of t he u s er f ee s yst em cu r r ent ly i mp os e d b y th e D is tr ict a r e:
(1) W a ter ser v ic e r ates (c ha r g es a r e d i vid e d int o r a tes for r es id e ntia l a n d c om mer cia l p r op er ty );
(2) Ar ea sp ec if ic su r cha r g es;
(3) S ta nd-b y wa ter a va ila b i lity c ha r g es ; a nd
(4) C on n ecti o n c ha r g es a nd fa c il iti es fees.
30
S a les to C us to m er s – W a ter S ys tem R a te s. W a ter S yst em sa les t o c us to m e r s ma d e u p
a ppr ox ima t ely ___%, ___%, ___%, ___%, a nd ___% o f th e W a t er Sys tem R evenu es i n F isca l Y ea r s 2 01 4 ,
2 0 13 , 20 1 2, 20 11 a nd 2 0 1 0, r es p ect iv ely, a nd a r e pr ojecte d to ma k e u p a ppr oxima t ely ___% of th e W a t er
S ys te m R evenu es in F isca l Y ea r 2 01 5 . T he D istr ic t’s c u rr ent wa ter ser vic e r a t es to o k eff e ct o n Ja nu a r y 15 ,
2 0 14 in a ccor da nc e w ith O r dina nc e N o. 2 0 14 -0 1 a dop t e d b y th e B oa r d.
O n Ju ne 3 , 2 01 5 , the B oa r d a ppr ov ed r a te in cr ea s e t a r gets f or t he n ex t fi ve y ea r s a nd dir ect ed t he
D istr ic t t o mo ve f or wa r d w ith a n ot ic e, p u bl ic h ea r in g a nd pr ot est pr oc ess r e qu ir ed f or ra te i ncr ea ses
p u r sua nt to P r op ositi on 2 1 8 . F ollo wi n g the dir ect io n f ro m the B oa r d, the D is tr ic t w il l fo llo w a ll p r oc edu r a l
a nd su b sta nt ive r equ ir em ent s a s des cr ib ed in “C O N S T IT UT IO N AL L IM IT AT ION S O N
APP R O P R IAT IO N S AN D C H AR G E S – Pr op os iti on 21 8” h er ein. N o p r opos ed i nc r ea se w ill oc cu r if a
ma jor it y of o w ner s of t he p a r ce ls su b je ct to t h e r a te inc r ea se f ile wr itt en p r ot est s a ga inst it, or if th e B oa rd
d o es n ot a p p r ov e it . T her e c a n b e n o a ssu ra nc e tha t su ch incr ea s es wil l be a p proved b y the B oa r d or tha t a
ma jor it y p r ot es t a ga inst t he i n cr ea s e w ill n ot oc cu r .
T he n ew r a tes, if a d op t ed, w ou l d b e ef f ect iv e the fir s t b il l p r int ed a fter Ja nu a r y firs t of ea c h F isca l
Y ea r . S ee b el o w f or fur ther d eta i l r ega r d ing th e ap pr ov ed incr ea se i n wa t er ra tes. S u ch ra te incr ea s es a r e
int en d ed to c ou nt er the r edu c e d r ev enu es a nd incr ea s ed cos ts a ssocia t ed w it h th e cu rr ent dr ou g ht, a s
d es cr ib ed h er ein u nd er th e ca ptio n “— C a lifor n ia D r oug ht a nd R es p o ns e – E xp ect ed D r ou ght Imp a ct o n
th e D ist r ict.” T h e r ate i ncr ea ses a r e a ls o d es i gn ed to c o v er th e c ost s of p ip e line r ep la c emen ts tha t wou ld
r educ e t h e a m ou nt of u na cc ou nt e d f or wa t er . D is tr ict sta ff will a n nu a lly r evi ew t he r a tes a nd th e f ina n cia l
p osit io n of th e W a t er S ystem wit h th e B oa r d to det er min e if th e r a tes r equ ir e a djust m ent . An y f u tu r e r a t e
incr ea s es wil l b e s ub j ec t to t h e pr oc edu r a l a nd s u b s ta ntive r equ ir em e n ts d es cr ib ed u n d er th e c a p tio n
“C O N ST IT UT IO N AL L IM IT AT IO N S O N AP PR OPR IAT IO N S AN D C H AR G E S – Pr opos itio n 2 18 ”
h er ein. T he B oa r d ma y r e du c e r a tes in the fu tu r e, s u b je ct t o th e r a te c ov ena nt desc rib ed u nd er th e ca ption
“S EC UR I T Y F O R T HE 2 0 15 B O N D S — Ra te C ovena nt” h er e in.
W h ile th e D is tr ict a ims to e qu ip a ll c us to m e r s w it h a wa ter met er a nd t o b ill su c h cust o mer s
v o lu m etr i ca lly b a sed u p on their usa ge, a s descr ib ed fu r th er h er ein, ther e ma y be cir c u msta n c es in w hic h a
c usto mer r efu s es to un d er ta k e th e nec es sa ry a c tions or im pr ov em en ts to a llo w th e cus t o mer to b e b illed o n
a vo lu metr ic b a s is . In s u ch circ umsta nc es, the c usto m er w ill b e s ub je ct to a “no n-c o nf or m in g bu lk r a t e.”
T he n o n-c on f or min g b u lk ra te is cha r ged o n a m onthl y ba sis ba sed on t he b a se cha r ge, com m o d it y cha r g e
a nd p u mp zo n e cha r g e c or r esp on din g t o tha t c us to m er ’s loc a ti on a nd c la s s (r es id ent ia l or com m er c ia l). F or
d et er m in ing t h e c om m od it y c ha r g e a n d pu mp z one c ha r g e, th e cus to m er w ill b e c ha r g ed a v o lu m e e qu a l to
th e 9 0th p er c e ntile of u sa ge for a ll cu sto m er s wit hin t h e sa m e cus tom er c la ss a nd met er siz e, c a lcu la t ed
ea c h Ja nua ry b ased o n th e met er ed u sag e da ta fr om th e pr ior c a lenda r yea r .
31
T he h istor i c a n d pr oject ed a ver a g e r es ide nt ia l a n d co m m er c ia l r a te i n cr ea s es a r e s ho w n b elo w.
S u ch per c ent a g e incr ea ses a r e a p pr ox imat e a nd va r ied by cla ss a nd c usto mer .
Table ___
H IST O RIC AVER AG E W A TE R SER VIC E R AT E IN CRE ASE S
Fiscal Y e ar s 2011 t hrough 2015
Tr uck ee Donne r Public U tility Di stric t
Effect ive Date
Aver a ge Resid en tial
Ra te Ch an ge
A ver age Com m er cial
Ra te Ch an ge
Januar y __, 2011
M ar ch 15, 2014
Januar y 15, 2015
Source: The Truckee Donner Public Utility District.
Table ___
PRO JECTE D AV E R AG E W ATER SER VICE RATES INC RE ASES (1 )
Fiscal Y e ar s 2016 t hrough 2020
Tr uck ee Donne r Public U tility Di stric t
Effect ive Date
Aver a ge Resid en tial
Ra te Ch an ge
A ver age Com m er cial
Ra te Ch an ge
Januar y 1, 2016 6.0% 6.0%
Januar y 1, 2017 5.0 5.0
Januar y 1, 2018 3.0 3.0
Januar y 1, 2019 3.0 3.0
Januar y 1, 2020 3.0 3.0
(1) The Board has directed the District to pursue the target rates shown above for Fiscal Years 2016 through 2020. Pursuant to
Proposition 218, before the Board formally approves the new rates, the District is required to undertake a notice, public hearing
and protest pr ocess. See “CONSTITUTION AL LIM ITATIONS ON APPROPRIAT IONS AND CHARGES – Pr oposition 218”
herein. The District expects the Board to approve the new rates in August 2015. However, no proposed increase will occur if a
majority of owners of the parcels subject to the rate increase file written protests against it, or if the Board does not approve it.
There can be no assurance that such increases will be approved by the Board or that a majority protest against the increase will not
occur. If such r ate increases are not approved, the actual Water System Revenues received could be less than pr ojected.
Source: The Truckee Donner Public Utility District.
R esid ent ia l W a t er S er vic e R a tes . T he wa ter ser vic e r a tes f or r es id ent ia l cu st o m er s , w h ic h in clu d e
sin gle fa m ily h om es, in d ivi du a l co nd omi niu m u nit s and to w nhous e u nit s , r ela te to t he p r ess ur e z on e in
w hic h su c h s er v ic e is l oca t ed a n d va r y d ep en d ing on w h et her th e r es id e nc e is equ ip p ed wit h a met er .
Ap p r ox ima t ely ___% of r es id e nc es a re equ ip p e d w ith a me t er a nd a r e cha r ged a met er ed ra te. T he d o mes t ic
wa t er ra tes for m et er e d r es id e nc es c ons is t o f thr e e c o m p on ent s : a b a s e c ha r ge, a c om mo d it y c ha r g e a n d a
p u mp zo n e c ha r ge, w hi le r esid ent ia l p r op er ti es n ot e qu ip p ed w ith a m et er a r e cha r ged a sin g le f ix ed mo nt hly
r at e, a s des c rib ed a b ov e. T he cu r r ent f ix ed m o nth ly b a se r a t es , com m od it y c ha r ges , a nd pu mp z on e c ha r ge s
for t he c u r r ent a n d nex t five F is c a l Y ea r s a r e a s s ho w n i n the f ollo w in g ta b les .
32
Table ___
M E TE RED RE SID ENTIAL W A TE R SE RVICE B A SE RA TE S, COMMO D ITY CH A RG ES,
AND PU M P ZO NE CH A RG ES (1 )
Fiscal Y e ar s 2015 t hrough 2020
Tr uck ee Donne r Public U tility Di stric t
2015 2016 2017 2018 2019 2020
M eter Size
(In ch es)
Mon th ly
Ba se Ch arge(2 )
Up to 3/4 $57.28 $60.72 $63.75 $65.67 $67.64 $69.66
1 68.32 72.42 76.04 78.3 2 80.6 7 83.09
Usa ge
(G all on s)
Mon th l y C om m odity Ch arge
(Per 1,000 gallon s) (2 )
0 - 8,000 $0.64 $0.68 $0.71 $0.73 $0.76 $0.78
8,000 + 0.80 0.85 0.89 0.92 0.94 0.97
Zon e
Mon th l y Pum p Zon e Ch arge
(Per 1,000 ga llon s)
Zon e 1 $0.00 $0.00 $0.00 $0.0 0 $0.00 $0.00
Zon e 2 0.35 0.40 0.45 0.50 0.55 0.60
Zon e 3 0.70 0.80 0.90 1.00 1.10 1.20
Zon e 4 1.05 1.20 1.35 1.50 1.65 1.80
Zon e 5 1.40 1.60 1.80 2.00 2.20 2.40
Zon e 6 1.75 2.00 2.25 2.50 2.75 3.00
Zon e 7 2.10 2.40 2.70 3.00 3.30 3.60
(1) The Board has directed the District to pursue the target rates shown above for Fiscal Years 2016 through 2020. Pursuant to
Proposition 218, before the Board formally approves the new rates, the District is required to undertake a notice, public hearing
and protest pr ocess. See “CONSTITUTION AL LIM ITATIONS ON APPROPRIAT IONS AND CHARGES – Pr oposition 218”
herein. The District expects the Board to approve the new rates in August 2015. However, no proposed increase will occur if a
majority of owners of the parcels subject to the rate increase file written protests against it, or if the Board does not approve it.
There can be no assurance that such increases will be approved by the Board or that a majority protest against the increase will not
occur. If such r ate increases are not approved, the actual Water System Revenues received could be less than pr ojected.
(2) The base rate and commodit y charge ar e applied to customers in all zones.
Source: The Truckee Donner Public Utility District.
33
T he r es ide nc es tha t ar e n ot equ ip p ed w it h a met er ar e cha r ged th e f o llo w in g fix ed m o nt h ly ra tes,
w hic h va r y d ep end i ng o n the z o ne in wh ich t h e r es iden c e is loc a t ed.
Table ___
T RUCK EE DO NN ER PUB LIC UTIL ITY DISTR ICT (1 )
Fiscal Y e ar s 2015 t hrough 2020
Un-M e tered Residential W ater Ser vi ce R ate s
Zon e 2015 2016 2017 2018 2019 2020
Zon e 1 $64.00 $68.90 $72.35 $74.52 $76.75 $79.05
Zon e 2 67.50 71.55 75.13 77.3 8 79.70 82.09
Zon e 3 71.00 75.26 79.02 81.3 9 83.84 86.35
Zon e 4 74.50 78.97 82.92 85.4 1 87.97 90.61
Zon e 5 78.00 82.68 86.81 89.4 2 92.10 94.86
Zon e 6 81.30 86.18 90.49 93.2 0 96.00 98.88
Zon e 7 85.00 90.10 94.61 97.4 4 100.37 103.38
(1) The Board has directed the District to pursue the target rates shown above for Fiscal Years 2016 through 2020. Pursuant to
Proposition 218, before the Board formally approves the new rates, the District is required to undertake a notice, public hearing
and protest pr ocess. See “CONSTITUTION AL LIM ITATIONS ON APPROPRIAT IONS AND CHARGES – Pr oposition 218”
herein. The District expects the Board to approve the new rates in August 2015. However, no proposed increase will occur if a
majority of owners of the parcels subject to the rate increase file written protests against it, or if the Board does not approve it.
There can be no assurance that such increases will be approved by the Board or that a majority protest against the increase will not
occur. If such r ate increases are not approved, the actual Water System Revenues received could be less than pr ojected.
Source: The Truckee Donner Public Utility District.
T he f o ll ow in g t a b le s h ows t he a v er a g e c om bin ed m o nt hly r a te f or r esi dent ia l cust o mer s f or the
c ur r ent F isca l Y ea r a nd th e f o ll ow in g fi ve F isca l Y ea r s .
Table ___
A VERA G E RESID EN TIAL W A TER SER VIC E RA TES (1 )
Fiscal Y e ar s 2015 t hrough 2020
Tr uck ee Donne r Public U tility Di stric t
2015 2016 2017 2018 2019 2020
Zon e 1
Zon e 2
Zon e 3
Zon e 4
Zon e 5
Zon e 6
Zon e 7
(1) The Board has directed the District to pursue the target rates shown above for Fiscal Years 2016 through 2020. Pursuant to
Proposition 218, before the Board formally approves the new rates, the District is required to undertake a notice, public hearing
and protest pr ocess. See “CONSTITUTION AL LIM ITATIONS ON APPROPRIAT IONS AND CHARGES – Pr oposition 218”
herein. The District expects the Board to approve the new rates in August 2015. However, no proposed increase will occur if a
majority of owners of the parcels subject to the rate increase file written protests against it, or if the Board does not approve it.
There can be no assurance that such increases will be approved by the Board or that a majority protest against the increase will not
occur. If such r ate increases are not approved, the actual Water System Revenues received could be less than pr ojected.
Source: The Truckee Donner Public Utility District.
34
C o mm er c ia l W a ter S er vic e R a t es . T he wa t er ser v ic e r a tes f or com m er c ia l us er s, inc lu din g mu lt ipl e
d w ellin g u nits , tr a iler p ar ks, p u blic use, d ed ic a t ed ir r iga tio n a n d c o m m er c ia l esta blis hm en ts c o ns ist o f t hr e e
c omp on ents : a b a s e c ha r g e, a com m o d it y c ha r ge a nd a p u mp z on e cha r ge. T he c ur r e nt c o mm o d it y c ha r ge
is $1 .5 7 per 1 ,00 0 ga ll ons, a nd t he cur r ent a nd futu r e B oa r d-a p p r ov ed b a se c ha r g es a nd p u mp z on e cha r ges
a r e a s sho w n in th e f o ll ow in g t a b les. F or F is c a l Y e a rs 2 01 5 thr ou g h 2 0 2 0, th e B oa r d ha s a ppr ove d
c om m o d it y cha r g es of $1 .66 , $1 .7 5 , $1 .8 0, $1.8 5 , $1 .91 , r esp ec tiv el y, p er 1 ,00 0 ga llons .
C O MM E RC IAL W A TE R SERVIC E B A SE RA TES AND PUM P ZO NE CH AR G E S (1 )
Fiscal Y e ar s 2015 t hrough 2020
Tr uck ee Donne r Public U tility Di stric t
2015 2016 2017 2018 2019 2020
Met er Siz e
(In ch es)
Mon th l y
Ba se Ch ar ge(2 )
Up t o 3/4 $57.28 $60.72 $63.75 $65.67 $67.64 $69.66
1 68.3 2 72.42 76.04 78.32 80.67 83.09
1-1/2 96.0 4 101.80 106.89 110.10 113.40 116.80
2 132.03 139.95 146.95 151.36 155.90 160.58
3 221.02 234.28 246.00 253.38 260.98 268.81
4 316.25 335.23 351.99 362.55 373.42 384.62
6 474.37 502.83 527.97 543.81 560.13 576.93
8 592.96 628.54 659.96 679.76 700.16 721.16
Zon e
M on th ly Pum p Zon e Ch arge
(Per 1,0 00 ga llon s)
Zon e 1 $0.0 0 $0.00 $0.00 $0.00 $0.00 $0.00
Zon e 2 0.35 0.40 0.45 0.50 0.55 0.60
Zon e 3 0.70 0.80 0.90 1.00 1.10 1.20
Zon e 4 1.05 1.20 1.35 1.50 1.65 1.80
Zon e 5 1.40 1.60 1.80 2.00 2.20 2.40
Zon e 6 1.75 2.00 2.25 2.50 2.75 3.00
Zon e 7 2.10 2.40 2.70 3.00 3.30 3.60
(1) The Board has directed the District to pursue the target rates shown above for Fiscal Years 2016 through 2020. Pursuant to
Proposition 218, before the Board formally approves the new rates, the District is required to undertake a notice, public hearing
and protest pr ocess. See “CONSTITUTION AL LIM ITATIONS ON APPROPRIAT IONS AND CHARGES – Pr oposition 218”
herein. The District expects the Board to approve the new rates in August 2015. However, no proposed increase will occur if a
majority of owners of the parcels subject to the rate increase file written protests against it, or if the Board does not approve it.
There can be no assurance that such increases will be approved by the Board or that a majority protest against the increase will not
occur. If such r ate increases are not approved, the actual Water System Revenues received could be less than pr ojected.
(2) The base rate is applied to customers in all zones.
Source: The Truckee Donner Public Utility District.
35
T he f o llo win g ta b l e s h ows t h e av er a ge c om b in ed mo n thl y r a te f or c om m er cia l cu s to mer s f or t h e
c ur r ent F isca l Y ea r a nd th e f o ll ow in g fi ve F isca l Y ea r s .
Table ___
A VE RA GE CO M M ER CIA L W A TE R SE RVIC E RA TES(1 )
Fiscal Y e ar s 2015 t hrough 2020
Tr uck ee Donne r Public U tility Di stric t
2015 2016 2017 2018 2019 2020
Zon e 1
Zon e 2
Zon e 3
Zon e 4
Zon e 5
Zon e 6
Zon e 7
(1) Assumes ___ inch meter and ____ gallons per month. The Board has directed the District to pur sue the target rates shown above
for Fiscal Years 2016 through 2020. Pursuant to Proposition 218, before the Boar d formally approves the new rates, the District
is required to undertake a notice, public hearing and protest process. See “CONSTITUT ION AL LIM ITAT IONS ON
APPROPRIAT IONS AND CH ARGES – Proposition 218” herein. The District expects the Board to approve the new rates in
Au gust 2015. However, no proposed increase will occur if a majority of owners of the parcels subject to the rate incr ease file
written protests against it, or if the Board does not approve it. There can be no assurance that such increases will be approved by
the Board or that a majority protest against the increase will not occur. If such rate incr eases are not approved, the actual Water
S ystem Revenues received could be less than projected.
Source: The Truckee Donner Public Utility District.
Ar ea S p ec if ic S u rcha r ges . T he D istr ic t c ollec ts a r ea spe cific u s er c ha r ges in the D o nn er L a k e a nd
G le ns hir e p or tio ns of the W a ter S ystem ’s s er v ic e a r ea to r ecov er the c os ts of impr ov em ents in c er ta in
d evelop ment s. T he D is tr ic t cu r r ent ly s er v es 1,4 9 2 conn ecti o ns in th e G lens hir e p or ti on of th e s er v ic e a r ea ,
a nd c ol lects a mo nt hl y s ur cha r g e o f $4 .7 5 p er cu s to mer in th e a r ea w hic h wi ll c o nti nu e u nt il N o v emb er 30 ,
2 0 17 . O ver th e p a s t fiv e F is ca l Y ea r s , the D is tr ict ha s c ol lect ed a p p r ox ima t ely $8 5,0 0 0 in G le ns h ir e ar ea
su r c ha r ges on a ver a g e p er F isca l Yea r . T he D is tr ict cu rr e ntly ser v es 1 ,3 5 7 con nect io ns in th e D o nn er L a ke
p or tion of t h e s er v ic e a r ea , a nd c o ll ects a m ont hly su r cha r ge of $6 .65 p er cus tom er p er m ont h f or cus tom er s
in th e a r ea wh ic h will continu e u nti l D ec emb er 20 3 6. O ver the pa st fiv e F isca l Y ea r s, the D is tr ic t ha s
c ollec t ed a p pr ox ima t e ly $10 7,2 0 0 in D o n n er L a k e a r ea su r cha r ges o n a v er a g e p er F isc a l Y ea r .
S ta n db y W a te r A va ila bility C ha rg es. Any loc a l a g en c y w hic h is a u thor iz ed b y la w t o p r o vid e w a t er
ser v ic e a nd w h ic h is p r ovid i ng su c h ser vic e w it hin its ju r isdictio n ma y fix , p ur sua nt to S ta te G ov er nm ent
C od e S ec tio n 5 4 98 4 et s eq ., a sta ndby c ha r g e o n la n d to wh ic h wa t er s er vic es ar e a va ila ble, w h et her or not
th e wa t er ser vic es ar e a c tua lly u s ed. S in c e 19 75 , th e D is tr ic t ha s lev ied a s ta ndb y c ha r g e f or th e a va ila b i lit y
of wa ter s er vic e t o u n dev elop ed p r op er t y (t h e “S ta ndb y C ha r ge”). T h e c urr ent sta ndb y cha r ge wa s fix ed in
1 9 91 at $8 0 a nnu a lly p er un d e velop ed p a rcel. T he S t a ndb y C ha r g e d o e s n ot a pp ly to t h e G le ns h ir e a nd
D on n er L a k e p or tio ns o f t h e s er v ic e a r ea . T he r evenu e s fr o m t h e S ta ndb y C ha r ge ma de u p a pp r oxima t ely
1 % of t h e W a ter S ys t em R e ve nu es i n ea c h o f t he la st fiv e F is c al Y ea r s, a nd a r e p r o ject ed t o ma k e u p
a ppr ox ima t ely 1 % of th e W a ter S ys te m R even u es in F isca l Y ea r 2 0 15.
W a ter F a ciliti es F ees . T he D istr ict cha r ges fa cilit ies f ees to cus tom er s d ev elop in g p roper ty w ith in
th e W a ter S ystem’s s er vic e a r ea in ord er to c ov er t he p r o r a ta sha r e of th e cost of wa t er su p p ly f a cilit ies
w hic h a re r equ ir ed to s er v e su c h cus to mers (th e “Fa cilit ies F ee s”). T he c ost of fu tu r e sour c e a nd s tor a g e
fac il it i es ar e inc lud ed in th e F a cilit ie s F ees in or d er to m a inta in a n equ it a bl e d ist rib u tion o f b enefits r ec eiv ed
b et w ee n pr es ent a nd fu tu r e s er v ic e c o n nec t io ns. T he Fa c il ities Fe es inc lu d e c ost a llo wa n c es for d o m es tic
36
wa t er a nd r esid ent ia l f ir e p r ot ectio n, r ate d a t 75 0 gp m for tw o hour s . In th e event t ha t a ser vic e r equ ir es
gr ea ter or les s tha n th e a ll ott ed fir ef lo w of 7 5 0 gp m, th e f ee ma y b e a dju s t ed a ccor din gl y.
F a cilit i es F ees a r e a hig h ly va r ia b le r e ve nu e s ou r c e f or the D istr ict a s they a r e b a s ed o n th e level
of deve lop men t a ct ivit y w it hin th e bou nda r ies o f th e W a ter S yst em dur in g ea c h F is c al Y ea r . H ow e ver, the
F a cilit i es F ees ma k e u p only a s ma ll p er c enta g e of t h e D ist r ict’s tota l r e venu es. T he r ev enu es fr o m t h e
F a cilit i es F ees ma d e u p a p prox i ma t el y 4%, 2%, a nd 2 % of th e W a ter S ys tem R ev enu es in F isc a l Y ea r s
2 0 14 , 2 01 3 , a nd 20 1 2 , r esp ectiv el y, a nd a r e p r oje ct ed t o ma k e u p a p pr ox ima t ely 4% of the W a t er S yste m
R ev enu es in F is ca l Y ea r 2 0 1 5.
P u rs u a nt t o O r dina nc e N o. 2 0 12 -0 1 a dop t ed b y t he B oa r d a n d eff ect ive Ja nua r y 1 , 2 01 5, r esi dent ia l
fac il it i es a r e cha r ged $1.6 5 p er squ a r e foot of l iv in g sp a ce, a nd c o m mer cia l fa c ilit ies a r e cha r ged a fla t fe e
in a ccor da n c e wit h th e sc h edu l e s h ow n in th e f oll o w in g tab le.
Table ___
W A TER SY STEM COM M ERC IAL FA CIL ITIES FEES
Effective January 1 , 2015
Tr uck ee Donne r Public U tility Di stric t
Meter Size
(in ch es) Faciliti es Fee
5/8 x 3/4 $4,486
3/4 6,729
1 11,215
1-1/2 22,4 32
2 35,8 91
3 67,2 95
4 112,159
6 224,317
Source: The Truckee Donner Public Utility District.
P u rs u a nt t o O r dina nc e N o. 2 0 12 -0 1 , ea ch Fis c al Y ea r co mm enc i ng on J a nu ar y 1 , 20 1 5, the fa c ilitie s
f ees a r e to b e a d just e d t o r eflec t t h e im pa ct of in fla tio n. T he a dju s t ment s will b e b a se d u p on t h e D ec em b er
va lu e of t h e E ng in eer ing N ew s -R ec or d 2 0-C it y C o nstr uctio n C os t Index (“E N R C C I”). T he E N R C C I va lu e
for D ec emb er 20 1 3 wa s us ed a s t he ba selin e f or the fa cilit ies fees tha t b eca m e ef f ec t iv e o n Ja nu a r y 1 , 2 0 14.
T he c ha ng e in t h e E N R C C I fr om D ec e mb er 2 0 1 3 to D ec e mb er 20 14 w a s used to c a lc u la t e th e fa c ilit ies
f ees tha t bec a me eff e cti ve on J a nu a r y 1, 2 0 1 5 . S uc ces s iv e y ea r s wi ll u s e a simila r ca lcu la tio n. After
c omp letio n of a n y ca p ita l p r oj ec t in v ol vin g ex p e nd itu r e of o v er $1,0 00 ,0 00 in fa c ilit i es f e es, t he D is tr ic t’s
st a ff is r equ ir e d to c o nduct a r evie w of cos t es tima t es for a nticip a t e d fa c il iti es f ees-fu n d ed p r oje ct s a nd th e
c ont inu ed n eed f or thos e p r o jects . T h e s ta ff is the n r equ ir ed to r ep or t its find ings to t h e B oar d a nd
r ec o mm en d a ny a dju st ment s to t he fa cilit ies f ees s c h e dul es.
37
W a ter C o nnec tio n F ees. T he D is tr ict c ollects c on necti o n f ees to r eimb u r s e t h e D ist r ict f or a c tu a l
a dm inis tr a tiv e, ma t er ia l a nd la b or cos ts of co nn e cti n g to th e W a t er Sys tem (the “C on n ect io n F ees”).
P u rs u a nt to O r dina nc e N o. 2 01 2-02 a dop t ed b y t he B oa r d a nd eff e cti v e D ec em b er 3 , 2 0 12 , the C o n n ectio n
F ees a r e cha r g ed in a ccor da nc e w ith t he f o llo w in g sc h edu l e. T he D is tr ict d o es n ot cur r ent ly ha v e a n y
sche du led in cr ea s es to its C on ne cti on F e e r a tes.
Table ___
W ATE R SY STEM CO NNEC TIO N FEES
Effect ive Dece mbe r 3, 2012
Tr uck ee Donne r Public U tility Di stric t
Meter Size
(in ch es) C on n ection Fee
5/8 x 3/4 $1,290
3/4 1,330
1 1,430
1-1/2 to 6 A ctual Cost
Source: The Truckee Donner Public Utility District.
T he nu mb er of c o nn ectio ns t o t he W a t er S yste m will b e a ff ect e d by d eve lop me n t a ct ivit y w ith in
th e b ou ndar i es of th e W a ter S ys t e m. H ow ever , t he C o n nect io n F ees ma k e u p a s ma ll p er c enta g e of t h e
D istr ic t’s t ota l r eve n u es. T he rev enu e s fr o m th e C o nn e ct io n F ees ma d e u p a p p r ox ima te ly 2%, 1%, a nd 1%
of th e W a t er S ys te m R eve nu es in F is c al Y ea r s 2 0 14, 2 0 13 , a nd 20 1 2, r esp ectiv el y, a nd a re pr oj ect ed to
ma k e u p a p pr ox ima t ely 1 % of th e W a ter S y ste m R e v en ues in F isca l Y ea r 2 0 15.
C o lle cti o n P ro ced u r es . [T O BE C O N F IR M E D .] C ha rg es for W a ter S ys tem s er vic es a r e collec t e d
o n a m o nth ly ba sis. O n a ver a ge, w r it e-of fs for m onth ly wa t er ser vic e a r e l es s t ha n on e-t e nt h o f o ne p er ce nt.
S ta ndb y C ha rg es a r e co ll ect ed tw ic e a nnua lly w it h a d va l o rem pr op er ty ta x bills b y t he r esp ect iv e C ou nti es .
E a ch of t h e C ou nt ies a lloca t es S ta ndb y C ha r ges a sses s e d u sing the A lt er na ti ve M et h od of D istr ib u tion o f
T a x L evies a n d C ollec t io ns a nd of T a x Sa le P r oc eeds (th e “T e et er P la n”), a s pr ov id ed for in S ectio n 4 7 01
e t s eq. of t h e S ta te R evenu e a nd T a xa tion C ode. Us in g th e “T e et er Pla n” met h od, th e C ou nt ies s end 1 0 0%
of th e a ss essed a m ou nt s to the D ist r ict. C onn ectio n F ees a nd F a cilit ies F ees are co llec t ed b y t he D istr ict at
th e ti me a prop er ty is d ev e lop ed. C onstr u ctio n ca nn ot oc c ur u nl ess th es e f ee s a r e p a id in fu ll.
[T O C O M E – Pr oce du r es f or d eli n qu e nt p ay ment s.]
38
F ut ure W at er S y ste m I mp ro v e m e nts
T he D istr ic t c u r r ent ly ex p e cts t o under ta k e a pp r oxima tely $__________ of ca p ita l impr o v emen ts
to the W a ter S ys te m f or ex isti n g u s er s of over th e nex t fiv e F is c al Y ea r s. T he ca p ita l imp r o v em ents wil l
b e f ina nc ed b y W a t er S ystem R eve nu es – sp ec ifica lly , [Fa cil ities F ees a n d s u r p lu s op er a tin g r e ve nu es ].
T he D is tr ict ex p ects to foc us c a p it a l imp r o vemen ts o n new s yst em p ip i ng, a s well a s ____. T he D is tr ic t
p r oject s ca pit a l impr ov em ents to t h e W a t er S ystem t o a cco m m oda t e fu tu r e gr owt h o f a pp r oxima t el y
$_________ over t he n ext f iv e F isca l Y ea r s.
FI N AN C I A L IN FO R M A T I O N O F T H E D IS T R ICT
F in anc ial S tate m e nts
A cop y o f t he mos t r ec e nt a u dit ed fina n cia l sta t eme nt s of the D is tr ict p r epa r ed b y M oss -A da ms
L L P , C er tified P u b lic Ac c ou nta nts/Bu s in es s C ons u lta nt s (the “Aud itor ”) a r e inc lu ded a s Ap p e ndix A
a tta c hed h er et o (th e “F ina nc ia l S t a tem ents ”). T he A u ditor ’s lett er conc lu d es that th e a u dit e d f i na nc ia l
st a tement s pr es ent fa ir ly, in a ll ma t er ia l r es p ec ts, the f i na nc ia l p os iti on o f t h e D is tr ict, as of
D ec em b er 3 1, 2 0 14 , a nd the r esp ectiv e cha ng es in fina nc ia l p os it io n, a nd c a sh f lo ws t her eof f or th e y ea r
th en e nd ed, in a cc or da nc e w it h a ccou nt in g pr incip les g en er a lly a c cep t ed in th e U n it ed S ta tes of A mer ic a .
T he s u m ma r y op er a t in g r es u lts c o nt a ined u n der the c ap t ion H ist oric O p er a tin g R es ult s a nd D eb t
S er v ic e C o ver a g e – W ater S ys tem” a r e der iv ed fr om th e s e fina n cia l s ta t em e nts (ex c lu din g c er ta in no n -c ash
it ems a nd a ft er cer t ain ot her a dju st ment s ) a nd a r e qua lif ie d in t h eir ent ir et y b y r ef er e nc e to s uch s ta t em e nts,
inc lu di n g the n ot es th er eto.
T he D ist r ict a c cou nts f or mo neys r ec eiv ed a n d exp ens es p a id in ac c or da nc e w it h g ener a l ly a c cep t ed
a ccou nt in g pr inc ip les a p p lic a b le to g ov ern men t a l a g e nc ies su c h a s th e D is tr ict (“G A AP ”). In c er ta in ca s es
G A AP r equ ir es or per mits m o n eys c ollect ed in o n e F isca l Y ea r t o b e r ec og n iz ed a s r eve nu e in a su bsequ en t
F isca l Y ea r a nd r equir es or per mit s ex p ens es pa id or incur r ed in on e Fis ca l Y ea r t o b e r ec o gniz e d in a
su b se qu ent F isca l Y ea r . S ee App end ix A — “T R UC K E E D ON N E R P UBL IC UT IL IT Y D IS T R IC T
F IN AN C I AL S T AT E M E NT S ” a t ta ch ed her et o. E xc ep t a s ot h er w is e ex pr essly not ed h er ein, a ll fina nc ia l
inf or ma tio n d er iv ed fr om t h e D is tr ict’s a ud it ed fina n cia l sta t em e nt r ef lect th e a p plica ti o n of G A AP .
H istoric O pe rat ing R es ults
T he t a b le o n th e fol lo w ing p a g e is a s u m ma r y of op e r a ting r es u lts of t h e W a t er S ys te m of t h e
D istr ic t, for th e la st fiv e F is c a l Y ea r s. T h es e r esu lts h a ve b ee n der i ved fr o m th e F ina nc ia l S ta te ments of
th e D ist rict b ut ex clu de c er ta in rec eip ts w hi c h a r e n ot inc lu d ed a s W a ter S ystem R ev e nu es u nder t h e
Inde ntu r e a nd cer ta in n on -ca sh it e ms a nd i nc lu de c er ta in ot her a dju st m ents . T he ta b le ha s n ot b e en a ud it e d
b y th e Au dit or .
39
Table ___
H IST O RIC O PER AT ING R ESU LT S AND D EB T SER VIC E C OV ER AG E – W ATE R SY ST EM
Fiscal Y e ar s 2010 t hrough 2014
Tr uck ee Donne r Public U tility Di stric t
20 1 0 20 1 1 20 1 2 20 1 3 2 01 4
R even u es
S a les to C u s tom er s (1) $1 0 ,1 9 6 ,0 1 0 $9,94 6 ,77 1 $9,79 3 ,99 4 $9 ,8 7 0 ,531 $1 0,1 0 2 ,81 9
S ta n d by F e es 16 1 ,1 2 0 1 6 1,0 4 0 1 6 6,1 3 5 1 5 7,4 4 0 1 5 0,3 9 0
Inves tm en t I n c om e (2 ) 9 7 ,3 5 9 1 8,36 3 3 3,78 3 1 0,50 6 87 ,3 1 2
F a cilities F ees (3 ) 16 0 ,4 1 0 1 5 2,9 1 8 2 0 7,6 7 8 2 6 4,1 9 9 4 17 ,8 7 3
C onn ecti on F e es (3)(4) 8 4 ,3 6 6 1 3 6,3 0 6 6 8,99 6 9 0,85 6 1 66 ,3 2 8
M eter S u rch a rge(5) 75 3 ,6 4 2 7 4 6,7 5 9 7 4 1,2 0 9 70 3 ,9 8 2 --
O ther(6) 4 57 ,0 41 37 5 ,9 3 5 32 6 ,8 4 7 3 28 ,5 53 40 3 ,8 4 7
T ota l R ev enu es $1 1 ,9 0 9 ,9 48 $1 1,53 8 ,09 2 $1 1,33 8 ,64 1 $1 1 ,4 2 6 ,0 6 7 $1 1,3 2 8 ,57 0
O p era tion a n d M a in ten ance C os ts (7 )
O p era tion s a n d M a in ten a nce $4 ,3 91 ,401 $4,43 3 ,70 6 $4,80 6 ,56 3 $4 ,8 02 ,929 $4,50 8 ,86 7
A d m inis tra tion a nd G en era l 1 ,7 49 ,2 77 1,65 7 ,4 18 1,76 1 ,6 14 1 ,8 29 ,7 41 2,11 4 ,5 06
C ons u m er Servi ces 5 88 ,853 79 4 ,22 5 72 1 ,33 4 7 30 ,605 81 3 ,86 4
Tota l O p era tion s a n d M a in tena n ce
Exp en s es
$6 ,7 29 ,531 $6,88 5 ,35 0 $7,28 9 ,51 0 $7 ,3 63 ,275 $7,43 7 ,23 7
N et W a ter S ys tem R e ven ues $5 ,1 80 ,417 $4,65 2 ,74 3 $4,04 9 ,13 1 $3 ,8 9 1 ,333 $3,88 7 ,30 5
P a rit y D eb t S er vic e(8 )
2 0 06 Ins ta llm en t Pa ym en ts $1 ,8 95 ,289 $1,88 8 ,08 9 $1,89 4 ,88 9 $1 ,8 95 ,089 $1,89 8 ,88 9
D W R P ropos ition 5 5 L oa n 30 6 ,4 8 1 3 0 6,4 8 1 3 0 6,4 8 1 3 0 6,4 8 1 3 0 6,4 8 1
Interes t on P a rit y D ebt Ser vic e R es er ve
F u nd s (9) (8 4 ,8 02 ) (64 ,1 96 ) (8,1 03 ) (5,2 8 3) (5,3 09 )
T ota l P a r it y D eb t S er vi ce $2 ,1 16 ,968 $2,13 0 ,37 4 $2,19 3 ,26 6 $2 ,2 0 0 ,087 $2,15 2 ,26 1
P a rit y D ebt S er vic e C o ve r a g e 2.45 2 .1 8 1 .8 5 1.77 1 .8 1
N et R even u es r em a in in g for S ub ord in a te D eb t
S er vic e $3 ,06 3 ,44 9 $2 ,5 2 2,369 $1,85 5 ,86 5 $1 ,69 1 ,24 6 $1 ,7 3 5 ,04 4
S u bord in a te D eb t S er vic e(8 )(1 0 ) $3 38 ,3 44 $31 6 ,9 44 $3 1 6,9 44 $3 1 6,944 $3 1 6 ,9 44
P a rit y a n d S u bord in a te D ebt S ervi ce C o v era g e 2.11 1 .9 0 1 .6 1 1 .5 5 1 .5 7
R em a in in g N et W a ter S ys tem R ev en ues fo r
C a p ita l P rojects o r O th er P u rp os es $2 ,7 2 5 ,106 $2 ,2 05 ,42 5 $1 ,5 3 8 ,92 1 $1 ,3 7 4 ,302 $1 ,4 1 8 ,10 0
(1) Ex clu des E lectric Syste m reven u es.
(2) Repr esents th e sha re allocated t o the Wat er Sys tem. E xclu des inter est comp onent of Don n er Lake Ass essm ent a nd in terest on parit y
d eb t ser vice res er ve fun ds.
(3) App ears as contributed ca pita l in th e Financia l Sta tem ents of th e District.
(4) Connect ion fees are recogn iz ed in the year in which th e c onnect ion to the Water System is effect ed, rather than th e year in wh ich th e
conn ect ion fee is a llocated.
(5) In 2008 the Boa rd adopted an ord inance to char ge a $5 monthly surcha rge t o a ll custom ers of tr eated water t o cover th e cost of
installin g wa t er met ers. Th e s urcharg e ran from Jan uary 20 09 through Dec emb er 2013.
(6) Inc lud es interd epartmenta l sa les and oth er revenu e and in com e, in clu ding the G lensh ir e an d Donner Lake area spe cific surcharges.
Th e G lenshir e surchar ge w ill en d in 2 01 7, and th e Donn or Lake surcharge w ill end in 2036.
(7) Ex clu des dep rec iation /a m ortization a n d non -cash los s on d isposa l of as sets. Exclu des op eration and ma in tenance costs attribu table
to the Electr ic Sys tem. In cludes la bor a nd non-cap ital exp enses.
(8) Deb t ser vic e p res ented on a n accrua l b as is.
(9) Re flects in ter est on the res er ve fun d for the 2006 Cert ifica t es that will rema in ou tstanding follow in g the r efunding of th e R efunded
2 00 6 Certif icates, as well as the inter est on the res er ve fund for th e DW R Prop os ition 55 Loa n.
40
(10) Repr esents pa ym ents on in sta llm ent loans relat ed to G len shir e wa ter system impr ove ments, as well a s a loan for a wa t er tan k. Fina l
p aymen ts are d ue in 201 7. The DWR Loan, which is secu r ed by, and has historica lly been p aid entirely from, th e Don ner Lak e
Ass essm ents, is exclu ded fro m sub ordina te d ebt ser vic e. See “TR UCKEE DO NN ER P UB LIC UTIL IT Y D ISTR ICT – Outstanding Debt
Obliga tions” herein.
S ou rce: The Trucke e Do nne r Pub lic Utility District.
M a na geme nt D iscu s s ion of F is cal Y ear 2 01 4 H isto r ic Op eratin g R esu lts .
[T O C O M E .]
Pro ject ed O pe rat ing R es ults a nd D e bt S er vic e C o v e rag e
T he es tima t ed p r oj ect ed op era tin g r es ults a nd d eb t ser v ic e c ov er a ge for th e W a ter S ys tem of th e
D istr ic t for the F isca l Y ea r s en din g D ec em b er 3 1 , 20 15 thr oug h D ece mb er 31 , 20 1 9 a r e set for t h belo w,
r ef lect ing cer ta in sig nifica nt a ssu mp t io ns c on c ern i ng fut ur e eve nt s a nd cir cu msta nc es . T h e fina nc ial
for eca st r epr es ent s th e D istr ic t’s es tima t e of p rojec t ed f ina nc ia l res u lts b a sed o n the a s su mp ti ons s et f or t h
in th e fo ot n ot es to t he c ha r t s et for th b elo w. S u ch a ss u mp t i o ns ar e ma ter ia l in th e d e velop m ent of t h e
D istr ic t’s fina nc ia l pr ojectio ns, a nd va r ia t io ns in th e a ss umpti o ns ma y pr odu c e s u b s ta nt ially diff er ent
fina nc ia l r esu lt s . Ac tua l op er a t in g r esu lts a chiev ed d u rin g th e p r ojectio n p er iod ma y va r y fr om th os e
p r es ent ed in the f or e ca st a nd su c h va r ia t ions ma y b e m a ter ia l.
41
Table ___
PRO JECTE D O PE RA TING RE SU LTS A ND D EB T SER VICE C OV ERAGE – W ATE R SY STEM
Fiscal Y e ar s 2015 t hrough 2019
Tr uck ee Donne r Public U tility Di stric t
20 1 5 2 0 16 2 0 17 2 0 18 2 0 19
R even u es
S a les to C u s tom ers (1 ) $10 ,5 0 6 ,9 3 2 $1 1,3 0 8 ,96 3 $1 2,0 8 4 ,20 3 $1 2,5 5 7 ,24 7 $1 3,0 4 8 ,94 3
S ta nd b y Fe es (2) 1 49 ,6 3 8 1 4 8,8 9 0 1 4 8,1 4 5 1 4 7,4 0 5 1 4 6,6 6 8
I n ves tm en t Inc om e (3 ) 50 ,0 0 0 5 0,25 0 5 0,50 1 5 0,75 4 5 1,00 8
F a cilities F ees (4 ) 5 00 ,0 0 0 5 1 5,0 0 0 5 3 0,4 5 0 5 4 6,3 6 4 5 6 2,7 5 4
C on n ecti on fe es (5 ) 1 75 ,0 0 0 1 8 0,2 5 0 1 8 5,6 5 8 1 9 1,2 2 7 1 9 6,9 6 4
O th er(6) 3 5 5,0 0 0 36 5,6 5 0 37 6 ,6 2 0 38 7 ,9 1 8 39 9 ,5 5 6
T ota l R ev en ues $11 ,7 3 6 ,5 7 0 $1 2,5 6 9 ,00 3 $1 3,3 7 5 ,57 7 $1 3,8 8 0 ,91 4 $1 4,4 0 5 ,89 2
O p era tion a n d M ain ten an ce C os ts (7)
O p era tion s a n d M a in ten a n ce $4 ,7 5 8 ,66 1 $4,94 5 ,92 6 $5,06 9 ,20 8 $5,19 6 ,02 9 $5,47 8 ,05 6
A d m in is tra tion a n d G en era l 2 ,2 3 1 ,6 51 2,31 9 ,4 72 2,37 7 ,2 87 2,43 6 ,7 62 2,56 9 ,0 23
C on s u m er Servi ces 8 5 8,9 5 3 89 2 ,75 4 91 5 ,0 0 7 93 7 ,8 9 9 98 8 ,8 0 6
T ota l O p era tion s a n d M a intena n ce E xp en s es $7 ,8 4 9 ,26 5 $8,15 8 ,15 2 $8,36 1 ,50 2 $8,57 0 ,68 9 $9,03 5 ,88 5
N et W a ter S ys tem R e ven u es $3 ,8 8 7 ,30 5 $4,41 0 ,85 1 $5,01 4 ,07 5 $5,31 0 ,22 5 $5,37 0 ,00 7
Pa rit y D eb t S er vic e(8)
20 0 6 Ins ta llm en t P aym en ts (9) $7 35 ,0 00 $7 35 ,0 00 $7 35 ,0 00 $7 35 ,0 00
D W R Prop os ition 5 5 L oa n 3 06 ,4 8 1 3 0 6,4 8 1 3 0 6,4 8 1 3 0 6,4 8 1 3 0 6,4 8 1
20 1 5 Bond s (10) 1,06 0 ,0 00 1,06 0 ,0 00 1,06 0 ,0 00 1,06 0 ,0 00
I n teres t on P a r it y D eb t S er vic e R es er ve Fu n d s (11 ) (5,3 09) (5,3 36) (5,3 62) (5,3 89) (5,4 16)
T ota l Pa rit y D ebt S er vi ce $2 ,0 9 6 ,145 $2 ,0 9 6 ,119 $2 ,0 9 6 ,092 $2 ,0 9 6 ,065
Pa rit y D eb t S er vic e C o ve ra g e 2 .1 0 2 .3 9 2 .5 3 2 .5 6
N et R even u es r em a in in g for S u b ord in a te D eb t S er vic e $2 ,3 1 4 ,705 $2 ,9 1 7 ,956 $3 ,2 1 4 ,133 $3 ,2 7 3 ,942
Su b ord in a te D eb t S er vic e(8 )(12) $31 6 ,9 44 $31 6 ,9 44 $31 6 ,9 44 -- --
Pa rit y a n d S u b ord ina te D eb t Servi ce C o v er a g e 1 .8 3 2 .0 8 2 .5 3 2 .5 6
R em a ining N et W a ter Sys tem R evenu es fo r C a p ita l
Proj ects or O th er Pu rp os es
$1 ,9 9 7 ,761 $2 ,6 0 1 ,012 $3 ,2 1 4 ,133 $3 ,2 7 3 ,942
(1) Ex clu des E lectr ic S ystem reven ues. Projected sa les b ased u pon the follow in g assu mption s: (a) a1% in creas es o f new res id en t ia l an d
com mer c ial un its ser ved by the District’s Water Syste m each yea r, a s d es cr ib ed under “TH E W ATER SYST EM O F THE D IST R IC T –
Wa ter P rod uction and Sales R e venues - Project ed Wa ter Production, Accoun ts and Sales R evenu es” herein ; (b ) implem enta tion of ____%
water u se reduction f or F isca l Y ears _____, as d escrib ed in “THE W ATER SYSTE M OF THE D IST R ICT - Ca lifornia Dr ough t and
Resp ons e - D istrict Dr ought Resp onse Act ions” her ein ; a n d (c) the wa t er rates a n d charges for F is ca l Years 20 1 6 th rough 20 19 set forth
u nd er “TH E W AT E R S YSTE M O F T HE DISTRIC T – Wa ter S ystem Ra tes and Cha rges” herein a re a ppro ved. Pu rsuant to P roposition
2 18 , befor e the Board for mally approves the n ew ra t es, th e D istrict is r equ ir ed t o un dertake a not ice, public hear in g and protest p ro cess.
See “CO NST IT UTIO N AL L IM IT AT ION S ON AP PROP R IAT IO NS AN D C H AR GES – Prop osit ion 21 8” herein. Th e D istrict exp e cts
the Boa rd to ap prove the new rates in Au gust 2015. How e ver, no prop os ed incr ease will occur if a major ity of own ers of the pa rcels
subject t o th e ra te in crease file writt en protests a gainst it, or if the B oard does not approve it. Th er e ca n be no assura nce that such increa ses
will b e app ro ved b y the Board or that a ma jorit y p rot est a ga inst the increase will n ot occu r. If such rate incr eases are n ot approved , th e
actua l Wa ter S yste m R even u es received could b e less than p roject ed.
(2) Project ed to d ecr ease at approx imate ly 0.5% per ann um b etween F isca l Years 2015 throu gh 2019 due to the buildout of land within
the Water System ser vice area.
(3) Repr esents th e sha re allocated t o the Wat er Sys tem. E xclu des inter est comp onent of Don n er Lake Ass essm ent a nd in terest on parit y
d eb t ser vice res er ve fun ds. Projected to d ecr ease at approx imate ly 0 .5 % per a nn um b etwe en Fis cal Y ears 2015 throu gh 201 9.
(4) Re flects projected fa cilit ies fees d escr ibed un der the caption “TH E W ATER SYSTE M O F TH E DISTRICT – Water Connect ion and
Fac ilities Fees” here in . Facilities fees are pr ojected to in crease at approx imate ly 3% p er annum between Fis cal Y ears 2015 throu gh 2019
d ue to pr oje cted deve lop ment in creas e throughout the ser vice area .
(5) Connect ion fees are recogn iz ed in the year in which th e c onnect ion to the Water System is effect ed, rather than th e year in wh ich th e
conn ect ion fee is allo cated. Conn ection fees are projected to in cr ease at ap p roximately 3% per annum between Fisca l Years 20 15 through
2 01 9 due to projected developm ent in crease throu ghou t the ser vice area .
42
(6) Inc lud es interd epartmenta l sa les and oth er revenu e and in com e, in clu ding the G lensh ir e an d Donner Lake area spe cific surcharges.
Th e G len sh ire surcharge w ill end in 2 01 7, and the Donnor Lak e surchar ge will end in 2036 . Pro ject ed to in crease at approx imat ely 3 %
p er an nu m between F isca l Years 2015 through 20 19.
(7) Ex clu des dep rec iation /a m ortization a n d non -cash los s on d isposa l of as sets. Exclu des op eration and ma in tenance costs attribu table
to the E lectr ic S yste m. Includ es labor and non -capita l exp enses. Fro m F isca l Years 2 01 5 throu gh 2019, p rojects, on a verag e, 3 % cost of
livin g adjustments for employ ees with so me employe e ch anges.
(8) Deb t ser vic e p res ented on a n accrua l b as is.
(9) Re flects deb t ser vice on the 2 00 6 Certificates tha t will remain outsta nd in g follow in g the refundin g of Refu nd ed 2 00 6 Certificat es, as
d escr ib ed u nd er th e caption “RE FUNDING PL AN” h erein.
(10) Project ed at true inter est cost of ____% per a n nu m, n et of Res er ve Fu nd ea rnings and projected prin cipal a m oun t of $______.
(11) Re flects in ter est on the res er ve fun d for the 2006 Cert ifica t es that will rema in ou tstanding follow in g the r efunding of th e R efunded
2 00 6 Certif icates, as well as the inter est on the res er ve fund for th e DW R Prop os ition 55 Loa n.
(12) Repr esents pa ym ents on in sta llm ent loans relat ed to G len shir e wa ter system impr ove ments, as well a s a loan for a wa t er tan k. Fina l
p aymen ts are d ue in 201 7. The DWR Loan, which is secu r ed by, and has historica lly been p aid entirely from, th e Don ner Lak e
Ass essm ents, is exclu ded fro m sub ordina te d ebt ser vic e. See “TR UCKEE DO NN ER P UB LIC UTIL IT Y D ISTR ICT – Outstanding Debt
Obliga tions” herein.
S ou rce: The Trucke e Do nne r Pub lic Utility District.
L I T IG A T IO N
T her e is no a ctio n, su it, p r oceedin g, in qu ir y or in v esti ga tio n, a t la w or in equ it y, b ef or e or b y a n y
c ou r t, r egu lator y a g ency, p u bli c boa r d or body, p en d i ng or , to the k n o w led g e of th e D is trict, thr ea ten ed
a ga ins t th e D is trict a ff ecti ng t h e ex is te nc e of th e D ist r ict or t h e titles of its d ir ector s or off ic er s t o t heir
r esp ec tive o ff ic es or see kin g to r estr a in or t o enj oin t he sa le or d e li ver y of th e 20 15 B on ds, the ap plica tio n
of th e p r o c eeds th er eof i n a cc or da nc e w it h th e I n dentu r e, or in a ny wa y c o nt esti n g or a f fectin g th e va lid it y
or enf or c ea b ility of t he 2 01 5 B on ds, the I n dentu r e or a ny a ctio n of t h e D is tr ic t c o nt em pla t e d b y a n y of s a i d
d ocu m e nts , or in a n y wa y cont es t ing the c o m p let e nes s or a c cu ra c y of t his O f fi cia l S t a tem ent or a ny
a mend me nt or su pp lem ent th er et o, or cont es tin g th e p ow er s of th e D istr ic t or its a uthor it y w ith r esp ect to
th e 20 1 5 Bo nds or a ny a c tion of t he D istr ic t cont em pla t ed b y a n y of s a id d ocu m ent s, nor to the kn ow le dg e
of th e D is tr ict, is ther e a ny ba sis ther ef or .
T her e ex is t la wsu it s a nd c la ims a ga ins t t h e D is tr ict w hic h a r e in c ident a l t o t he or d ina r y cou r s e o f
b u s in es s of th e op er a tio n of t h e D ist r ict. In the v iew of th e D is tr ict’s g en er a l c ou ns el, t her e is no s u c h
lit iga ti on p r es ent or pen d in g, wh ic h w ill in d ividu a ll y or in th e a ggr ega t e ma t er ia ll y i mp a ir t he D is tr ict’s
a bilit y to pa y th e p r inc ip a l of a n d i nt er est on t h e 20 1 5 Bon ds.
C O N S T IT U T IO N AL L IM I T AT I O NS O N A PPRO PR IA T IO N S A N D C H A RG ES
A rtic le X I IIB
T he S t a te C onst itut io n li mit s the a n nu a l a p p r op r ia tions of t h e S ta te a nd o f a ny c ity, cou nt y, sch oo l
d ist r ict , a u thor ity or ot her p ol itica l su b di vis ion of the S tate to the le vel o f a ppr op r ia tions of th e pa r ticu la r
g o ver nm en ta l entit y for th e p r ior f isca l y ea r , a s a dju s ted f or cha n g es in th e c ost of liv in g a n d p op u la tio n.
T he “b a s e yea r ” for est ab lish in g su c h a ppr op r ia tion li mit is th e 1 97 8 -7 9 fis ca l y ea r a nd t h e lim it is to be
a dju st e d a nnu a ll y to r ef lect cha ng es in p op u la ti on a n d co ns u mer p r ic es . Adjus t m e nt s in th e a p pr opria t io ns
lim it o f a n ent ity ma y a ls o b e ma d e if : (i) t he f ina nc ia l r es p ons ibil ity f or a s er vic e is tr a ns f er r ed to a not h er
p u blic e ntit y or to a priva te e ntit y; (ii) th e fi na nc ia l s ou r ce f or t h e pr ov is io n of s er vic es is tr ans f er r ed fr o m
ta xes to oth er r ev e nu es; or (iii) the v ot er s of th e ent ity a p pr ov e a cha n ge in th e lim it f or a p er io d of ti m e n ot
to ex c eed fou r y ea r s .
43
Ap p r op r ia t ions s ub ject to A r tic l e X III B g e nera lly inc lu de th e p r oc eeds of ta x es levi ed by th e S ta te
or other entit y of loca l go v er nm en t, ex c lu s iv e of c er ta in S ta te s ub v ent io ns a nd refu nds of t a x es . “Pr oc ee ds
of ta xes” in clu d e, b ut ar e not lim it ed to, a ll ta x r ev enu e s a nd th e pr oc ee ds t o a n entit y of g o ver n m en t fro m :
(a) r egu la tor y lic e ns es, us er cha r g es , a nd u s er f e es (b u t o nly t o th e ex t ent su c h p r oc eeds exc eed t he c os t o f
p r ov idin g th e s er vic e or r egu la t io n); a nd (b) the in v est me nt of ta x r ev enu es. Ar tic le X III B inc lu d es a
r equir e m ent t ha t if a n entit y’s r eve nu es in a ny yea r ex c ee d th e a m ou nts p er m it t ed to b e sp ent , t h e ex c ess
w ou ld ha ve t o be r etu r n ed b y r e vis in g t a x ra tes or f ee s ch e du les ov er t h e su bsequ ent tw o y ea r s.
C er ta in ex p en d itur es a r e ex c lu ded fro m t h e a p propr ia tions lim it inc lu din g p a ym en ts of
in deb t e dn es s ex ist in g or le ga lly a u th or iz ed a s of J a nua r y 1, 1 9 7 9, or of b o n ded in d ebt edn es s ther ea ft er
a ppr ov ed b y the vot er s a nd p a y men t s r equ ir ed t o co m p ly w ith c ou r t or fed er a l ma n da tes w h ic h w ith ou t
d iscr et io n r equ ir e a n ex p en ditu r e for addit io na l ser v ic es or whic h u na v oida b ly ma k e th e p r ov id in g of
ex is ti n g s erv ic es m or e c ost ly.
T he D istr ict is o f th e op i n ion tha t the r a t es imp os e d b y th e D istr ic t do not ex c ee d t h e c ost s tha t t h e
D istr ic t r ea sona b ly b ea r s in pr ovid ing wa t er ser vi c e. T he D is tr ic t wil l c o v ena nt in th e Ind ent ur e tha t, to th e
ful lest ext e nt p er mit t ed b y la w, it wi ll pr escr ib e r a tes an d c ha r g es tha t it r ea s ona bly ex p ects t o b e su ff ic ie nt
to p r ov id e N et W a t er S yste m R e ven u es for p a ym ent o f p r inc ip a l of a nd int er est on the 2 0 1 5 Bon ds i n ea c h
y ea r .
Pro po sit io n 2 1 8
G en eral. An in it ia tiv e m ea s u r e ent it l ed the “R ig ht to V ot e on T a x es Act” (t he “Initia ti ve”) wa s
a ppr ov ed b y th e vot er s of t h e S ta te i n 1 9 96 . T h e I n it ia tiv e a d d e d Ar tic le X I IIC a nd Ar tic le X I IID to t he
S ta te C o nstit uti o n. Ac cor di n g t o th e “T itle a n d S u mma r y” of t h e I nitia tiv e p r epa red b y the S ta te At t or n e y
G en er a l, the Initia tiv e lim its “t h e au t hor it y of loca l go ver n ment s t o imp os e ta x es a nd pr op er ty-r ela ted
a ssess me nts, fees a n d cha r g es.”
A rti cle X I IID. Art icle X I IID def i nes th e t er ms “fe e” an d “cha r g e” to mea n “a ny le vy oth er tha n
a n ad v al orem ta x, a s pec ia l t a x or a n a s sess ment, imp o s ed b y a n a genc y u p on a par cel or u pon a p er son a s
a n i nc i dent of p r op er t y ow ner s hip , inc lu di n g u s er f ees or c ha r ges f or a p r oper t y-r elat e d s er v ic e.” A
“pr op er ty-r e lat ed s er vi c e” is d ef in e d a s “a pub lic serv ic e ha v ing a d ir ec t rela t ionsh ip to p r op er t y
o w n er sh ip.” Art icl e X II ID f ur ther p r ov id es tha t r elia n c e b y a n a g e nc y o n a n y p a r cel ma p (inc lu d in g a n
a ssess or ’s p ar c el ma p) ma y b e c o ns id er ed a s ign if ica n t fa ctor in d e t er m in ing wh et h er a fee or cha r ge is
imp os e d a s a n inc id ent of p r op er ty o w n er s hip .
Ar tic le X III D r equ ir es tha t a ny a g e nc y im p os in g or inc r ea sin g a n y p r op er ty-r ela ted f ee or cha r g e
mu st pr ov id e wr itt en n ot ic e t h er e of to t he r ec or d o w n er of ea c h id ent if ied pa r c el u p o n w hic h su c h f ee or
c ha r g e is to b e imp os ed a n d mu st c ondu c t a p ub lic h ea r in g wit h r es p ect th er eto. T he pr op os ed f ee or cha r ge
ma y n ot b e im p os ed or incr ea s ed if a ma jor ity of ow ner s of th e id ent if ied pa r cels file wr it ten pr ot es ts a ga inst
it. As a r esu lt , if a nd to th e ex t ent tha t a fee or cha r ge i m pos e d b y a loca l g ov er n ment f or wa ter ser vic e is
u lti ma t e ly d et er mi ned t o b e a “f ee” or “c ha r ge” as def ine d in Ar tic le X II ID, th e loc a l g o v er n ment ’s a bilit y
to incr ea se s u c h f ee or cha r g e ma y b e li mit ed b y a ma jo r ity pr otes t.
In a dd it ion, Ar tic le X IIID inc lu des a nu mb er of lim ita ti o ns a pp lica b le t o ex is tin g fees a n d c ha r ges
inc lu di n g p r o vis io ns t o t h e eff ec t tha t: (i) r evenu es d er i v ed fro m th e f ee or cha r g e sha ll n ot ex c ee d th e fu n ds
r equir e d to provi de th e p r op er t y-r ela t ed ser v ic e; (ii) s uch r e ve nu es s ha ll n ot b e used for a ny p ur pos e ot h er
tha n tha t for w h ich t h e f ee or c ha r g e wa s im p os e d; (iii ) th e a mou nt of a f e e or c ha r g e im p os e d u p on a n y
p a r cel or per s o n a s a n inc ident of p rop er ty o w n er s hip sha l l n ot ex c eed th e p r op or tio na l c ost o f th e s er v ic e
a ttr ib u t ab le to the p a r cel; a nd (iv) n o su ch fee or cha r ge ma y b e im p os ed for a s er vic e un less tha t ser vic e is
44
a ct ua lly us e d b y, or imm edia t e ly a va i la b le t o, t he o w n er of th e p r op er ty in qu es tio n. P r op er ty-r ela ted f ees
or cha r g es ba s ed o n pot entia l or fut u r e u s e of a s er vic e a r e not p er mitt ed.
Ba sed u p o n t h e S ta te C ou r t of App ea l dec is io n in H o w ard J arvis T a xp aye rs A s so ci a tion v. C ity o f
L o s A ng eles, 8 5 Ca l. Ap p. 4 th 79 (2 00 0), wh ic h wa s deni ed r ev iew b y th e S t a te S upr e me C ou rt, it w a s
g ener a lly b eliev ed tha t Ar tic le X II ID did n ot a p p ly to cha r g es for wa ter ser v ic es tha t ar e “pr i ma rily b a s e d
o n th e a m ou nt cons u m e d” (i.e., met er ed w a ter ra t es ), whic h ha d b een h e ld to be c o m m od it y c ha r g es r ela t e d
to c o ns u mp ti o n of t h e s er vic e, n ot p r op er ty o w ner ship . T he S t a t e S u p r em e C ou r t r uled i n B igh orn -D es ert
Vie w W a te r A g en cy v . Verjil , 3 9 C a l.4 th 20 5 (20 06 ) (the “B igh orn C a s e”), ho w ev er , tha t fees f or on go i ng
wa t er ser vic e t hr ou gh a n exis tin g c on n ec t io n w er e p r op er ly-r e la t ed f e es a nd cha r g es. T h e S ta te S u pr em e
C ou r t sp ec if ica ll y d isa pp r oved t he h oldi ng in H o wa rd J ar vi s T a xp ay er s A sso cia tio n v. C it y of L os A ng e le s
tha t met er ed wa t er ra tes a re n ot s u b jec t to P r oposit io n 21 8 .
T he D istr ict ha s c omp lie d w it h t h e n oti c e, h ea r ing a nd p r otest p r oc edur es in Ar t icle X III D w it h
r esp ec t to its W a ter S yste m r a t es . S e e “W AT E R SYS T E M —W a ter S ystem R a tes a n d C ha r g es ” h er ei n.
O n Ap r il 2 0, 20 1 5, th e S ta te C ou rt of Ap pea l, F ourt h D is tr ict, issu ed a n opinio n in C a pist r an o
T a xp a y ers A ss o cia tio n , I nc. v. City o f Sa n J u a n C apis tra n o up ho ldi n g ti er e d wa ter ra tes un d er Pr opos itio n
2 1 8 pr ov ide d tha t th e tier s c or r es p on d t o th e a ctu a l cos t of f u r n is hin g s er v ic e a t a giv en lev el of usa g e. T he
op ini o n wa s s p ecific to th e fa c ts of th e ca s e, in clu din g a find ing t ha t t he C it y of S a n Ju a n Ca p ist ra no d id
n ot a tt emp t to ca lc ula t e th e a ct ua l c os ts of prov i din g wa t er a t var iou s tier lev els . T he D istr ict’s W a ter
S ys te m r a tes a re d es cr ib e d u nd er t h e c a p tio n “W AT E R S YS T E M—W a ter S ys te m R a tes a nd C ha r ges ”
h er ein. [T h e D is trict is stu dy i ng t he C a pist r an o T a x pay er s A sso c ia tio n r u ling b ut do es not cu r r entl y ex p ec t
th e de cis i on to a ffect its W a ter S yste m r a t es str u ctu r e.] T he D istr ic t bel ie ves t ha t its cur r ent W a ter Syste m
r at es co mp ly w it h th e r equ ir em ents of Pr op os itio n 2 18 a nd exp ects tha t a ny f u tu r e W a ter S yste m r a tes wil l
c omp ly w ith P r op os iti o n 2 1 8 ’s p roc edur a l a nd s u b s ta nti ve r e qu ir em en ts to t h e ext e nt a p p lica b le th er et o.
A rti cle X I IIC . Ar ticle X IIIC p r ov id es tha t th e in itia tiv e p ow er sha ll n ot b e prohib it e d or oth er w is e
lim it ed in ma tter s of r edu cin g or r ep ea li ng a n y loca l ta x , a s s ess ment , f ee or cha r ge a nd tha t th e p ow er o f
init ia ti ve to a f fect loca l ta xes, a ss es s m ents, fees a n d c ha r ges sha ll b e a p p lic a b le to a ll loc al go ver n men ts .
Ar tic le X II IC does n ot defin e t h e t er ms “loc al ta x ,” “a s sess m e nt,” “fee” or “cha r ge,” s o it w a s u nclea r
w het her th e d ef initi o ns set f or th in Ar tic l e X IIID r ef er r ed to a b ov e a r e a pp lica b le to Ar tic le X IIIC .
M or e ov er , t he p r o v is ions of Ar tic le X IIIC a r e not ex p r es sly li mit ed to loca l ta x es, a s sess ment s, fe es a nd
c ha r g es imp os ed a ft er N ov em b er 6, 1 99 6. O n Ju ly 24 , 2 0 0 6, t he S u pr em e C ou r t held in t he B igh orn C a s e
tha t th e p r o vis io ns o f Ar tic le X IIIC inc lu d e d r a t es a nd f e es c ha r ged f or d om es t ic wa t er u s e. In t h e d ecis io n,
th e C ou r t not ed tha t t he d e cis i on di d n ot a ddr es s w het h er a n in itia tiv e t o r edu c e f ees a n d c ha r ges c ou ld
o v er r ide s t a t utor y r a t e s etti ng ob liga t io ns. T h e D istr ic t do e s n ot b elie ve t ha t Art ic le X II IC gr ant s t o th e
v ot er s with i n t he D istr ict the p ow er t o r ep ea l or r edu c e t h e wa ter c ha r g es in a ma n n er w hic h w ou l d b e
inc o nsis t e nt w it h t h e c o ntr a ctu a l obliga tio ns of th e D is tr ic t. H ow ever , th er e c a n b e n o a ss ura nc e o f t h e
a va ila b ility of pa r t icu la r r em ed ies a d equ a t e to p r ot ec t the b en e fic ia l ow ner s of t h e 20 1 5 Bo n ds. R e medies
a va ila b le t o b ene fic ia l o w n er s of t h e 2 01 5 Bon ds in t h e ev ent of a defa ult b y the D ist rict a r e dep e n d ent
u p on ju dic ia l a cti ons w hic h ar e oft en s ub ject t o d isc r et i on a nd d ela y a nd c ou ld pr ov e b ot h ex p ens iv e a nd
tim e -c ons u m in g to ob t a i n.
In a dd it i on t o t he sp ec if ic lim ita t ions on r e medies conta i ned in th e a p p lica ble do cu m ents
th ems elv es , the r ig hts a nd ob liga ti o ns w ith r es p ect to the 2 01 5 Bonds a nd t h e I n d ent ure a r e su bject to
b a nkr u p tc y, ins olv enc y, r eor ga niza tio n, mor a tor iu m, fra u du lent c o n veya nc e a nd ot h er s im ila r la ws
a ff ectin g c r e dit or s ’ r ig hts , to th e a pp lica t io n of equ ita b le p r i nc ip les if e qu ita b le r em e die s a r e s ou g ht, a nd t o
th e ex er cis e of ju dicia l d iscret io n in a pp r op r ia te c a ses a nd to lim ita tio ns on le ga l r em ed ie s a ga i ns t p ub lic
a genc ies in th e S ta te. T h e va r iou s op in io ns of c ou ns el to b e deli ver ed w it h r es p ec t to s uc h do cu m ents,
45
inc lu di n g th e op in i o n o f B on d C ou ns el (th e f or m of w h ic h is a t ta ch ed a s Ap pe ndix C ), will b e si m ila r ly
qua lif ied.
T he D ist r ict b eli eve s tha t its cur r ent wa ter ra t es a nd other p r op er ty-r ela t e d cha r ges com p ly w it h the
r equir e m ent s of P r op osit io n 21 8 a nd ex p ects t ha t a ny in cr ea ses in c urr e nt r a tes a nd cha r g es or t h e a d op t io n
of a n y n ew fut ure wa ter r a tes a nd ot her p r op er ty-r ela t ed c ha r g es w ill b e s u b je ct to comp lia nc e w it h
P ropos it io n 2 18 ’s p r oc edura l a nd s ub s t a ntiv e r equ ir em ents to t he ex t ent ap plica ble t her et o.
Pro po sit io n 2 6
O n N o v em b er 2 , 201 0 , vot er s in the S t a te a pp r ov ed P r op osit i o n 26 . P r opos itio n 2 6 am en ds Ar tic le
X IIIC to ex pa n d th e defin itio n of “t a x” to inclu de “a ny le vy, cha r g e, or ex a ctio n of a n y kin d imp os e d b y a
loca l g ov er nm ent ” ex c ep t th e f o llo w ing : (1 ) a cha r ge imp os ed f or a s p ecifi c b en e fit c on f er r ed or p r ivil eg e
gr a nt ed d ir ec tl y t o th e p a y or tha t is not p r ovid ed t o t h os e n ot c ha r ged, a n d w hic h d o es not ex c eed t h e
r ea so na b le c osts to t h e loc a l g ov er nm en t of c o nfer r ing the b e nefit or gr a ntin g th e p ri v ile ge; (2 ) a c ha r ge
imp os e d f or a sp ec if ic g ov er n me nt ser vi ce or pr odu ct p r ovid ed dir ect ly t o th e pa y or t ha t is not prov i ded t o
th os e n ot cha r ged, a nd w hic h d o es n ot exc e ed th e r ea so na b le c ost s to the lo c a l g ov er n men t of p r ovid i ng th e
ser v ic e or p r oduct ; (3) a cha r g e imp os ed for the r ea s o na ble r egu la t or y cos ts to a loca l g ov er nm e nt f or
iss uin g lic ens es a nd p er m its, p er for m in g in ves tiga t io ns, insp e cti o ns, a nd a u dits, enf or cin g a gr icu ltu r a l
ma r k et in g or d er s, a nd the a dmin is tr a tive en f or c em ent a nd a dju d ica ti on t h er eof ; (4 ) a c ha r ge imp os ed for
e ntr a nc e t o or use of loca l g o ver nm ent pr op er ty, or th e p ur c ha s e, r ent a l, or lea s e of lo ca l gov er n ment
p r op er ty; (5) a fin e, p ena lty, or ot h er m on eta r y cha r g e imp os ed b y th e ju dic ia l b r a nch of go v er n ment or a
loca l go v er n m en t, a s a r esult o f a vio latio n of la w; (6 ) a cha r ge imp os e d a s a cond itio n of p r op er t y
d evelop ment ; a nd (7) a s s ess m e nts a nd p r op er ty-r ela t e d fees i m p os ed in a ccor da n c e wit h t he pr ovis io ns of
Ar tic le X IIID . Pr op os it io n 2 6 pr ov i d es tha t t he lo c a l go v er nm e nt b ea r s t he bu r d en of pr ov in g b y a
p r epo nd er a nc e o f th e ev i d enc e t ha t a le vy, cha r g e, or oth er ex a ct io n is not a ta x , tha t the a mou nt is no mor e
tha n nec essa r y t o cov er th e r ea sona ble c os ts of t h e go ver nm ent al a ctiv it y, a nd tha t the ma n ner in w hic h
th os e cos ts a r e a lloc ate d to a p a yor b ear a fa ir or r eas ona ble r ela tions h ip t o the pa y or ’s b urde ns on, or
b enefits r ec eived fr om, th e go v er n menta l a ctivit y. T he D istr ict d oes n ot b eli ev e tha t the ena ct m ent of
P ropos it io n 2 6 a ffe cts its a b ility t o cha r g e f or its wa ter ser v ic e.
F ut ure I nitiativ es
Ar tic les X II IB, X II IC a nd X IIID w er e a dopt ed a s mea sur es that qu a lif ied for the b a ll ot p urs ua nt to
th e S ta te’s in itia tiv e p r oc ess. Fr om tim e to time ot h er in itia ti ves c ou ld b e pr op os ed a n d a dop t e d a ffe cti ng
th e D is tr ict’s r ev e nu es or a b ility t o i nc r ea s e r evenu es.
A P PR O V A L O F L E G A L PR O C E E DI N GS
T he va li d, le ga l a n d b indin g na t u re of th e 20 1 5 B on ds is sub ject t o the a p pr ova l of S tra dli ng Y oc c a
C ar ls on & R a uth, a Pr of es s iona l C or p or a tion, a ctin g a s Bon d C ou ns el. T he f or m of suc h lega l op in io n is
a tta c hed h er et o as Ap p en dix C , a nd s uc h lega l op in io n w i ll b e a tta ched t o ea c h 20 1 5 Bo n d. Bon d C ou ns el
exp r ess es n o op i nio n a s to the a cc ur a cy, c omp let en ess o r f a irness of th is O ffic ia l S t a te ment or oth er offer ing
ma t er ia ls r ela t ing t o th e 2 0 15 B on ds a n d ex p r es s ly d is cla i ms a ny du t y to a d vis e th e O w ner s of th e 2 0 15
Bo n ds a s to ma tt er s r ela ted t o t his O ff ic ia l S t a tem ent.
C er ta in le ga l ma t ter s wil l b e pa ssed up o n for th e D istr ict b y P or ter S imo n, T r uck ee, C a lif or nia ,
G en er a l C ou ns e l to t h e D ist r ict, f or th e I ns ur er b y its co uns el, a nd for t h e T r u stee b y it s c ou ns el. P a ym ent
of th e f ees of B o n d C ouns el a nd U nd er writ er ’s C ou ns el is co ntin gent u p on t he is su a nc e of t h e 20 15 B o nds .
46
T A X M A T TE R S
In the op i n ion of S t r a dling Yo cc a C a rlso n & R a uth, a P r ofess iona l C or p ora t io n, N ewp or t B ea ch,
C a lif or nia , B on d C ou ns el, u nd er ex is t in g s ta tut es , r egu la tio ns, r u lings a nd ju dic ia l d ec is ions, a nd a s su min g
th e a ccu r a cy of c er ta in r ep r es e nta tio ns a n d c o mp l ia n c e w ith c ert ain c ov ena nts a nd r equ ir e ment s des cr ib ed
h er ein, int er est (a n d or igina l is s u e d is c ou nt) o n th e 2 01 5 Bon ds is ex clu d ed fr o m gr os s inco me f or fed er a l
inc o me ta x p u r p oses a nd is n ot a n it e m of t a x p r ef er e nc e f or pu r p oses of c a lc ula tin g t h e f eder a l a lt er na tiv e
mi nim u m t a x imp os e d o n in di v idu a ls a n d cor p or a tio ns . I n the f ur t her op in io n of Bo n d C ou ns el, int er es t
(and or ig ina l issu e dis c ount ) on th e 2 0 1 5 Bo nds is ex e m p t fr om S ta te of C a lif or n ia p er so na l in c o me ta x.
Bo n d C ou ns el n ot es tha t, wit h r esp ect to c orp or a tio ns, i nt erest on t h e 20 15 B o nds ma y b e inc lu d ed a s a n
a dju st m ent in th e c a lc u la t ion o f a lt er na tiv e m inim u m ta xa ble inc o m e, w h ich ma y a ff ect the a lter na ti v e
mi nim u m ta x lia b il it y of s uc h cor p or a tions.
Bo n d C ou ns el’s op i nio n a s t o t he ex c lu s io n fr o m gr oss inc o m e of i nt er es t on th e 2 0 1 5 B o nds i s
b a sed u p o n c er ta in r ep r es e nta t io ns of fa ct a nd c er tifi ca tio ns ma d e b y th e D istr ict a nd oth er s a nd is su b ject
to the c o n d it io n t ha t th e D istr ict c o mp li es w it h a ll requ ir em e nts of th e I nt erna l R ev en u e C o d e of 19 86 , as
a mend ed (th e “C o de”), tha t mu st b e sat is fied s ub s e qu ent to the is s ua nc e of th e 20 15 Bon ds to a s s ure tha t
int er est o n th e 2 0 15 B on ds w il l n ot b ec o me in clu da b l e in gr os s inc om e for f eder a l inc om e t ax p ur p os es .
F a ilu r e t o c o mp ly wit h su c h r equ ir em ents of t h e C o d e m i ght c a u s e int er es t on t h e 2 0 15 B o n ds t o b e in clu d e d
in gr oss inc o m e f or fe der a l inc o me ta x p ur poses r etr oa c tiv e t o t h e da te of is s u a nc e of th e 20 1 5 B on ds. T he
D istr ic t ha s cov ena nt e d to c omp ly wit h a ll s u c h r e qu ir e men t s .
T he d iff er enc e b et w ee n t h e issu e p r ic e o f a 2 0 15 B on d (th e f ir st pr ic e a t w h ich a s u bsta ntia l a m ou nt
of t h e 20 1 5 B o nds of a ma tur it y is to b e s o ld t o th e pu b lic) a n d t h e st a ted r ed em ptio n pric e a t ma tu r ity w it h
r esp ec t to the 2 0 15 Bo nd (t o the ext e nt t h e r e dem pti o n pr ic e a t ma tu r ity is gr ea t er tha n the issu e p r ic e )
c onst itu t es or ig ina l is s u e dis c ou nt . O r igi na l iss u e d is c ou nt a cc ru es u n d er a consta nt y ie ld m et ho d, a nd
or ig ina l issu e dis cou nt w il l a c cr u e to a 2 0 15 Bond O w ner b efor e r ec eip t of ca sh a t tr ibu ta b le to su c h
ex clu da bl e inc ome. T h e a m ou nt o f or ig ina l issu e dis c ou nt d eem e d r ec ei ved b y a 2 0 15 Bond O w ner w ill
incr ea s e t h e 2 0 15 B on d O w ner ’s b a sis in t h e a pp lica bl e 2 01 5 B o nd. In t h e op ini o n of B on d C ou ns el, th e
a mou nt of or ig i na l issu e dis cou nt tha t a cc ru es to th e 2 0 15 B on d O w n er is ex c lud ed fr om gr os s in c om e of
su ch 20 15 B o n d O w n er f or f eder a l inc om e ta x pu r p oses a nd is not a n it em of ta x p r ef er enc e f or p u r p os es
of the f eder a l a lterna ti ve mi nim u m ta x imp os ed on i nd ividu a ls a n d c or por a t io ns. In the op in io n of B o n d
C ou ns el, th e a m ou nt of or i g ina l iss u e disc ou nt t ha t a ccr u es to the 20 1 5 B on d O w n er is ex e mp t fro m S tate
of C a lif or n ia p er so na l in co m e ta x .
T he a m ou nt by w hic h a 2 0 15 Bon d O w n er ’s or ig ina l ba s is for d et er mi n ing loss o n sa l e or ex c ha n ge
in th e a p p lica bl e 2 01 5 B on d (g e ner ally, th e p ur c ha s e p r ice ) exc eed s th e a m ou nt p a ya b le on ma tu r it y (or o n
a n ea r lier ca ll dat e) c o ns tit ut es a m or tiz a b le b o nd pr e mi u m, w hic h mu s t b e a mor tiz ed u n d er S ectio n 1 71 o f
th e C od e; suc h a mor tiza b le b o n d p r e miu m r edu c es t h e 2 01 5 Bond O w n er ’s b a s is in t he a p p lica ble 2 01 5
Bo n d (a n d the a m ou nt of ta x -ex emp t int er es t r ec eiv e d w ith r es p e ct to t he 2 01 5 B on ds), a nd is n ot d educ tib l e
for f ed er a l in c o me ta x p u r p oses . T he b a s is r edu c tion a s a r es u lt of the a m or tiz a tion of b on d p r em iu m ma y
r esu lt in a 2 0 1 5 B on d O wn er r ea l iz ing a t a xa b le ga in w h e n a 2 01 5 Bon d is s old b y t h e O w ner f or a n a m ou nt
e qu a l to or less (un d er c er t a in c ir c u ms ta nc es) tha n the or ig i na l c ost of th e 2 01 5 Bond to th e O wn er .
P u r c ha s er s of the 20 15 Bon ds sh ou ld c o ns u lt their ow n ta x a dvis or s a s to the t rea tm ent , com p uta tio n a nd
c olla t er a l co ns equ enc es of a m or tiza ble b on d p r emi u m.
47
T he I nt er na l R ev enu e S er v ic e (t he “I R S ”) ha s in itia t ed a n ex pa n d ed p r o gr a m for t he a u dit in g of ta x
ex em p t b on d iss ues, inc lu d i n g both r a ndom a nd t a r get ed a u dits . It is p ossib le tha t the 2 0 1 5 Bonds w ill b e
selec t ed for a u dit b y th e IR S . It is a ls o p os s ib le tha t t he ma r k et va lu e o f t he 2 0 1 5 B o nds m ig ht b e a ff ect e d
a s a r esu lt o f s uch a n a ud it of t h e 2 0 15 Bo n ds (or b y a n a u d it of sim ila r mu n ic ipa l ob liga tio ns). N o a ssur a nce
c a n b e g iven t ha t in t he c our s e of a n a u d it, a s a r esu lt o f an a u dit , or ot h er w is e, C o n gr es s or t he IR S mig ht
n ot cha n ge th e C o de (or int er pr et a t ion th er eof) su b sequ ent to th e is su a nc e o f th e 20 15 B on ds to th e ext ent
tha t it a dv er sely a f fects t he ex clus io n fr o m gr os s inco m e of i nt er est on t he 2 01 5 B on ds or t heir ma r ket
va lu e.
It is p ossible tha t s u bsequ e nt t o th e is sua nc e of th e 2 0 15 Bon ds th er e m ig ht be feder a l, s ta t e, or
loca l s ta tutory cha n ges (or jud ic ia l or r egu la tor y int er pr eta t ions of f ed er a l, s ta te, or loca l la w ) tha t a ffec t th e
f ed er a l, st ate, or loca l ta x tr ea t ment o f th e 2 01 5 Bo nds or the ma r k et va lu e of th e 20 1 5 Bon ds. R ec ently,
p r op os ed le gis la ti v e c ha n g es ha ve b ee n intr o du c ed in C o ngr ess, w h ic h, if ena ct ed, c ou ld r es u lt in a ddit io na l
f ed er a l inc o me or s ta t e ta x b ein g im p os e d on o w ner s of ta x -ex em p t s ta te or loca l obliga ti ons, su ch a s the
2 0 15 Bonds . T he i ntr oduc t ion or e na c t m ent of a ny of s u ch cha n ges cou l d a dv ers ely a f fect the ma r k et va lu e
or liqu i dit y o f t he 20 1 5 Bo n ds. N o a ssur a nc e ca n b e g iv en tha t s ub s equ ent to th e is s u a nc e of th e 2 0 1 5
Bo n ds su ch c ha ng es (or oth er c ha ng es) w ill n ot be intr o du c ed or ena ct ed or int er pr eta t ions w ill not o ccur .
B ef or e p ur cha s in g a ny of th e 2 0 1 5 Bon ds, a ll pote n tia l p ur c ha s er s shou ld co nsu lt the ir ta x a dv is or s
r ega r ding p oss ib le s ta tutor y cha n g es or jud ic ia l or r egu la t or y cha n ges or int er p r eta tio ns, a nd t heir c olla ter a l
ta x cons equ enc es r e la t in g to the 2 01 5 Bo nds .
Bo n d C ou ns el’s op in ions ma y b e a ffect ed b y a c tio ns ta k en (or n ot t a k e n) or e vents oc cu r r in g (or
n ot o cc ur r ing) a f t er th e da te h er e of. B o n d C ou ns el h a s not un der t a k en t o det er m in e, or t o inf or m a n y
p er so n, w h et h er a n y s uc h a ctio ns or eve nt s a r e ta k e n or do o c cu r . T h e In de nt u r e a n d th e T a x C er tifica t e
r ela ti ng to th e 20 15 Bo n ds p er m it cer t a in a c tions to b e ta k en or to be o m itt ed if a f a vor a b le op i nion of Bo n d
C ou ns el is p rov id e d w it h r es p ect th er et o. Bon d C ou ns el ex pr es s es n o op in io n a s to the eff e ct on the
ex clu s ion fr o m gr oss inc o me of int er est for f ed er a l in c o m e t a x p u r p os es wit h r esp e ct t o a ny 20 1 5 B o nd if
a ny su c h a c tio n is ta k e n or o mitt ed b a s e d u po n t h e a d vi c e o f c ou ns e l ot h er t ha n S tra dl ing Y o cc a C ar lso n &
R a ut h, a P r of ess io na l C or p or a tio n.
A lthou g h B o nd C ou ns e l ha s r en d er e d a n op i nio n tha t int er est o n th e 2 01 5 Bo n ds is ex c lu d ed fr o m
gr os s inc ome for fe d er a l in co me ta x p u r p os es pr ov id e d t hat th e D ist r ict c o ntinu es to c o mp ly w it h c er ta in
r equir e m ent s of t h e C o de, th e o w n er s hip of t h e 2 01 5 Bo n ds a nd t h e a c cr u al or rec eip t of i nt er es t o n th e
2 0 15 Bo nds ma y ot her w is e a ff ect th e t a x lia bilit y of c er ta in p er so ns. Bond C ou ns el exp r ess es no op inio n
r ega r ding a ny s uc h ta x cons equ en c es . Ac c or din g ly, b ef or e p ur cha sin g a n y of t he 2 01 5 B o n ds , a ll pot entia l
p u r cha ser s shou ld co ns u lt th eir t a x a dv is or s wit h r esp ec t to col la t er a l ta x cons e qu en c es r ela tin g t o th e 2 0 15
Bo n ds .
A c omp let e c op y o f th e pr op os ed op inion of B o nd C ouns el is set for th in Ap p e ndix C — “F O R M
O F O P INION OF BO N D C O UN S E L ” atta ched h er et o.
R A T I N G S
T he D is tr ic t ex p ec ts tha t S &P a nd M oo dy ’s w ill as s ign t he 2 0 15 Bo n ds t he r a tin gs of “____” and
“____,” r esp ectiv el y, ba sed u po n t he deliv er y of t h e P o lic y b y _____ a t th e tim e of iss ua n c e of t h e 2 01 5
Bo n ds . S e e “BO N D IN S UR AN C E ” h er e in for a discu s sio n o f r ec e nt ra ting a ctio ns ta ken w it h r es p ec t t o
_____. S &P ha s a ss ig n ed t h e 2 01 5 B o nds th e r a tin g of “___” not w ithst a n din g th e d e liver y o f th e P ol ic y.
T her e is no a ss ur a nc e tha t a ny cr e dit ra ting g iv e n to th e 20 1 5 Bon ds w ill b e ma inta in e d for a ny p er io d of
tim e or tha t th e r atin g ma y n ot b e lo w er ed or w ith dr a w n ent ir el y b y S &P a nd M o o dy ’s, if, in th e ju d g m ent
of su ch r a ting a g en c ies , c ir c u ms ta nc es s o wa r ra nt . Any d ow n war d r e visio n or wit h dr a wa l of su c h r a tings
ma y ha v e a n a d v er s e ef f ect on th e ma r k et p r ic e of th e 2 0 15 Bon ds. S u ch r a tings r ef lec t on ly th e views of
48
S &P a nd M o od y’s, a nd a n ex pla na tio n of th e s ign if ica nc e of s u c h r a tings ma y b e ob ta in ed fr om S &P a nd
M o od y ’s, r es p ect iv e ly.
T he D is tr ict has cov ena nt ed i n a C ont inuin g D is c losu r e C er tif ica te t o f il e o n t h e M u nic ip a l
S ec ur it ies R ul ema k ing B oa r d’s E lec tr o n ic M u ni cip a l M ar k et A c c ess w ebs it e (“E M M A”) n otic es o f a n y
r at in gs c ha ng es on the 2 0 1 5 Bo nds. S e e “C O NT IN UI N G D IS C L O S UR E ” her ein a nd Ap p en dix E —
“F O R M O F C O N T IN UIN G D IS C L OS UR E C ER T IFIC AT E ” atta c hed h er eto. N otw it hsta n din g s u ch
c ovena nt, inf or ma ti o n r ela t in g to r a t ings c ha n g es on th e 2 0 15 B o n ds ma y b e p u bli cl y a va ila ble fr o m t h e
a nd M o od y’s p r ior to s uch inf or ma t ion b ei ng p r ovid ed to the D is tr ict a nd p r ior to the da te th e D istr ic t is
ob liga t ed to f ile a not ic e of r a tin g c ha n g e o n E M M A. Purcha ser s of t he 20 1 5 B o nds a r e dir ect ed to th e
r at in g a g enc ies a nd th eir r es p ec tiv e w eb s it es a n d of fic ia l m ed ia ou tlets f or the m ost cur r ent ratin gs c ha n ges
w ith r esp ect to th e 2 0 1 5 Bo n ds a fter t h e in itial is su a nc e of the 2 01 5 Bo nds .
U N D E R W R I T I N G
T he 2 0 1 5 Bon ds will b e p u r cha sed b y Br a n dis T a llm a n L L C (the “U n d er wr it er ”) p u r s ua nt t o a
P u r c ha s e C ont r a ct, da ted _________ __, 2 01 5 (the “P ur cha se C o ntr a ct”), b y a nd b et w ee n t h e Dis tr ict a n d
th e U nd er w rit er . Un d er th e P ur c ha s e C o nt r a c t, the U nd er wr it er ha s a gr e ed to p ur c ha s e a ll, b ut not less tha n
a ll, of th e 2 01 5 Bo n ds f or a n a ggr ega te pu r c ha s e p r ic e of $__________ (r ep r es e ntin g th e p r inc ipa l a mou nt
of th e 20 1 5 B on ds, l es s a n U nd er wr it er ’s d isc ou nt of $__________, p lu s/less a net or ig ina l is s u e
p r em iu m/d isc ou nt of $_________). T he P u r c ha s e C o nt r a ct pr ovid es t ha t the Un d er wr it er w ill p u r cha s e all
of the 2 0 15 B o nds if a ny a r e p ur cha se d, th e ob liga t ion to ma k e su c h a p ur cha se b e ing s ub ject t o c er ta in
ter ms a nd con dit io ns set for th in th e P ur cha se C ontr a ct, th e a ppr ova l of c er ta in le ga l ma tt er s by c ou ns el a nd
c er ta in ot h er con dit io ns.
T he init ia l p u blic of f er i ng pr ic es s ta t ed o n t h e ins id e f r o nt c o v er of t his O f ficia l S ta te ment ma y b e
c ha ng ed fr o m time t o t ime b y t he U nd er wr it er . T he Un d er wr it er ma y offer a nd sel l th e 2 0 15 B on ds to
c er ta in d ea l er s (in clu din g d ea ler s d ep os it i ng 2 0 1 5 B ond s into i n v es t ment t r u sts), dea ler ba nks, ba nks a cting
a s a gents a nd oth ers at pr ices lo w er tha n sa id pu bli c off er in g p r ic es .
C O N T IN U IN G DI S CL O S U RE U ND E RT AK I N G
C u r rent U nder ta k ing . T h e D is tr ict ha s cov ena nt ed in a C ontinu in g D is c l osu r e C er tif ic ate da t ed
th e da t e of ex ecu tio n a n d d el iver y of t h e 2 0 15 Bon ds (th e “C ont inu i ng D is closu r e C er tif ica t e”) to p r o vid e
a nnu a lly c er ta in fi na nc ia l inf or ma ti on a nd op er a ting da t a r ela t ing to t h e D istr ic t by not la ter tha n 2 7 0 da ys
fol lowin g th e end o f its F isca l Yea r (co mm e nc in g w ith F isca l Yea r 2 01 5 ) inclu d in g th e a u dit ed F ina ncia l
S ta teme nt s of th e D istr ict for eac h su ch F isca l Y ea r (to get h er , t he “A nnua l R ep or t”), a nd to p r ov id e not ic es
of th e oc c ur r enc e o f c er t a in ot h er list e d events . T he A nnua l R ep or t a nd th e not ic es of lis t ed ev ent s w ill b e
filed in ac c or da nc e w it h t h e r equ ir e ment s o f th e R u le. T he s p ecific na tur e of th e in f or ma tio n t o b e c ont ain e d
in th e A nnu a l R ep or t or the n ot ic es of list ed ev ent s is inc lu d e d in th e f or m of t he C o nt inu i n g D is c losu r e
C er tif ica te in Ap p endix E – “F O R M O F C O NT IN U IN G D IS C L O SUR E C ERT IF IC AT E ” a tta che d h er et o.
T hes e c o v e na nts ha v e b e en ma d e in or der t o as s is t the U nder wr it er in c o mp ly in g w it h t h e R u le.
Previous Undertakings. [TO COME.]
49
M IS C E L L A N E O US
Ins ofa r a s a ny st a tement s ma de in this O ff ic ia l S ta tem en t invo l ve ma tter s of op in ion or of esti ma t es ,
w het her or not ex p r es s ly s ta ted, they a r e s et for th a s s u ch a nd n ot a s r ep r es e nt a tio ns of fa ct. N o
r ep r es enta t ion is ma d e tha t a ny of s uc h sta tements ma d e w ill b e r ea liz e d. N eit h er t his O ffic ia l S ta tem ent
n or a ny s tate ment w hic h ma y ha v e b e en ma d e v er b a lly or in wr itin g is to be c o nstr ue d a s a cont ra c t wit h
th e O w n er s of the 2 01 5 Bo nds .
T he ex ecuti o n a nd d el iver y o f t his O fficia l S ta tement ha ve b een du ly a u th or iz e d b y th e D is tr ic t.
T R U C K E E D O N NE R PU B L I C U T IL IT Y
D I S T R IC T
By :
R ob er t E llis
P r esid ent of th e B oa r d of D ir ect or s
By :
M ic ha el D . H olley
G en er a l M a na ger
A-1
A P PE N D I X A
T R U C K E E D O N NE R PU B L I C U T IL IT Y D IS T RIC T FI N AN C IA L ST A T E ME N T S
B-1
A P PE N DIX B
D E FIN I T I O N S A N D S U M M A R Y O F TH E I N D E NT U R E
T h e fo llowi ng is a su m m a r y o f c er t a in p ro vis io ns of t h e Ind en tu re whic h a re n o t desc rib ed
e ls e wh ere. T h is s u m ma r y d o es n ot p urpo rt to be com prehens ive a n d r e fer en c e s ho u ld be m a d e to the
Inde ntu r e f o r a ful l a n d com plete s ta te m en t of the pro v is ion s th er eo f.
C-1
A P PE N D I X C
FO R M O F O PI N I O N O F B O N D C O U NS E L
U po n iss ua nce o f th e 2 0 1 5 B on d s, S tra dlin g Yo cca C arlso n & R au th, a Pro fession al C orp o r atio n,
B o n d C o un s el , p r op oses t o rend er its fin al ap p r o vin g op in io n in su b sta nti a lly th e fol lo wi n g fo rm :
______, 20 1 5
T r u ck ee D onn er P u b lic Ut ilit y D is tr ict
1 1 57 0 D on ner P a ss R oa d
T r u ck ee, C a lifor nia 9 6 16 1
R e: T r u ckee D o nn e r Pub lic U tility D is trict W ater S ys te m Refu n din g R e ven ue B o nd s, S eries
2 0 15
M em b er s of th e B oa r d of D irect or s:
W e ha ve ex a m i ned a cer t if ied c op y of t he r ec or d of t he p r oc ee d in gs of the T r ucke e D onner P ub lic
Ut ilit y Dis tr ict (the “D is tr ict ”) r ela tiv e t o th e is su a nc e of the $__________ T ruckee D o n n er P u b lic Ut ilit y
D istr ic t W a ter S yst em R efu n d ing R eve nu e B on ds, S er ies 2 01 5 (t he “20 1 5 Bo nds ”), da ted th e da t e h er e of,
a nd s uc h ot h er in for ma ti o n a n d d ocu me n ts a s we c o ns id er n ec ess a r y to ren der t his opin io n. In r en d er in g
this op ini o n, w e ha v e r eli ed u po n c er ta in r ep r es e nta t ion s of fa ct a nd cert if ica tio ns ma d e by th e D istr ict, the
init ia l p ur cha s er of t he 2 01 5 B on ds a nd oth er s. W e h a v e not u n der ta k e n to ver if y t hrou g h i n d ep e nd en t
in vesti ga tio n th e a ccu r a cy of th e r epr es enta tio ns a nd c er t ifica ti ons r eli ed up o n b y u s.
T he 2 0 1 5 B o n ds a r e b ein g iss u ed p u r s u a nt to a n In d e nt u r e of T r ust, da ted a s of Ju n e 1, 2 0 1 5 (th e
“Indent u r e”), b y a n d b et w ee n t he D is tr ict a n d T h e Ba nk of N ew Y or k M ello n T r us t C omp an y, N .A ., a s
tr u st ee (th e “T r u stee”). T he 20 1 5 B o nds ma tur e o n the da tes a nd in th e a m ou nts r ef er en c e d in th e In d e ntu r e.
T he 2 0 1 5 B o n ds a r e da te d t h eir da te of d e li v er y a n d b ea r int er est a t the r a tes p er a nnu m r efer en c ed i n t h e
Inde ntu r e. T he 20 15 Bo n ds a r e r eg ist er ed in th e for m set f or t h in th e I n d ent u r e.
Ba sed on our exa mina tio n a s Bond C o u ns el o f ex i stin g la w, c er tif ie d cop ies of suc h lega l
p r oc ee din gs a nd s u ch ot h er p r oofs a s we d eem n ec es sa r y to r en d er this op inio n, w e a r e of the op i nio n, a s
of th e da te her eof a n d u nd er ex is tin g la w, tha t:
1 . T he p r oc eedin gs of th e D ist r ict s h o w la wfu l a u th ority f or the issu a nc e a n d sa le o f th e 2 01 5
Bo n ds u nder the la ws of th e S t a te of C a lif or nia no w i n for c e, and t h e I n d e ntu r e ha s b ee n du ly a ut hor iz e d,
ex ec u t ed a n d deli ver ed by t h e D is tr ict, a nd, a ssu mi ng du e a uthor iz a t ion, ex ecut ion a n d d e li v er y b y th e
T r u s tee, a s a p pr op r ia te, th e 2 01 5 B o nds a n d th e I n d ent u r e a r e va li d a n d b indi n g ob liga t io ns o f th e D ist r ict
e nfor c ea ble a ga inst th e D is tr ict in a cc or da n c e w it h th eir t er ms .
2 . T he ob liga tion of th e D is tr ict to ma k e th e p a ym e nt s of pr inc ip a l of a nd int er es t on the 20 1 5
Bo n ds fr o m N et W a t er S ys te m R ev enu es (a s d ef i n ed in t he Indent u r e) is a n enf or c ea b le ob l iga tio n of th e
D istr ic t a nd d o es n ot c o nstitu t e a n i nd eb t ed ness of t h e D istr ic t in c o ntr av ent ion o f a ny c ons t itu tiona l or
st a tut or y d ebt lim it or r es tr ictio n.
3 . U n d er ex is t ing s ta tu t es , r egu la tio ns , r ulin gs a n d ju dicia l d ecis io ns, a nd a ssu min g t h e
a ccur a c y of c er ta in r epr es ent ations a n d co mp l ia nc e w ith c er ta in cov ena nts a nd r equ ir em ent s d es cr ib ed
h er ein, int er est (a n d or igina l is s u e d is c ou nt) o n th e 2 01 5 Bon ds is ex clu d ed fr o m gr os s inco me f or fed er a l
inc o me ta x p u r p oses a nd is n ot a n it e m of t a x p r ef er e nc e f or pu r p oses of c a lc ula tin g t h e f eder a l a lt er na tiv e
mi nim u m ta x imp os e d o n in d iv idu a ls a n d c or p or a t ions. I t s hou ld b e n ot ed tha t, wit h r esp ect to c or p or a t io ns,
C-2
su ch int er es t ma y be inc lu d ed a s a n a djus t m ent in the c a lcu la t io n of a lt er na tiv e min imu m ta x a ble inc om e,
w hic h ma y a f fect th e a lt erna ti ve m ini mu m ta x lia b ility of suc h cor p or a tio ns.
4 . Int er es t (a nd or ig ina l is su e d is c ou nt) o n th e 20 15 B o nds is ex emp t fr o m S ta te of C a lif orn ia
p er so na l in c o me t ax .
5 . T he a m ou nt by w h ic h a 2 01 5 Bo n d O w n er ’s ori gina l b a sis for d et er m inin g loss o n sa l e or
ex c ha n ge in th e a pp lica b le 20 1 5 B on d (g en er a lly, th e p ur c ha s e p r ic e) ex c e eds t h e a mou nt p a ya b le o n
ma tu r it y (or on a n ea r lier ca ll da t e) c ons t itu tes a m ortiza ble b on d p r e miu m, whic h mu st b e a m or tiz e d u n der
S ec t ion 1 7 1 of th e I nt erna l R e venu e C o de of 19 8 6, a s a m en d e d (t he “C o de”); su ch a m or tiz a b le b o nd
p r em iu m r educ es t h e 2 01 5 B o n d O w n er ’s b asis in t h e a pp lica b le 2 0 15 B o nd (a n d th e a m ou nt of ta x-ex emp t
int er est r ec e ived ), a nd is n ot d edu c tib le f or fed er a l inc o m e ta x p u r p oses. T he b a sis r edu c tio n a s a r es u lt of
th e a mor tiza t ion of 2 01 5 Bo n d p r em iu m ma y r es u lt in a 2 01 5 Bo n d O w ner r ealizing a ta xa b le ga in w h en a
2 0 15 Bond is sold by th e O w n er for a n a m ou nt equ a l to or les s (un der c er ta in c ircu msta nc es ) t ha n th e
or ig ina l c os t of t h e 20 15 B on d t o th e O w n er . P ur cha ser s o f th e 20 15 B on ds s h ou ld c o nsu lt t h eir o w n ta x
a dv is or s as to the tr ea t m e nt, c o mp uta tio n a n d c olla t er a l c ons equ enc es of a m or tiza ble b on d p rem iu m.
6 . T he diff er e nc e b et w ee n t h e issu e pr ic e o f a 20 1 5 Bo n d (th e f ir st pr ic e a t wh ic h a sub s ta nt ia l
a mou nt of t h e 20 1 5 Bo nds of a ma tu r it y ar e to be s ol d t o t he p ub lic ) a n d t h e sta te d r edem ptio n p r ic e a t
ma tu r it y wit h r esp ect to s u ch 20 1 5 Bo n d cons titu t es or ig ina l iss u e dis c ount. Or ig ina l issu e d isc ount a cc r ues
u n der a c onst a nt yie ld m et ho d, and or igi na l is s u e disc ou nt w ill a c cr u e to a 2 01 5 B on d O w n er b ef or e r ec eip t
of c a sh a ttr ib u ta ble t o su ch ex c lu da b le in c o me. T h e a m ou nt of or ig ina l is s u e d is c ou nt deeme d r ec eiv ed b y
a 2 01 5 B on d O wner w ill incr ea s e th e 2 01 5 Bon d O w ner ’s b a sis in th e a pp lic ab le 2 01 5 Bon d. O rigina l
iss u e dis c ou nt tha t a ccr u es for t he 2 0 15 B o n d O w ner is ex c lu d ed fr o m t he gr oss inc o m e of su ch o w ner for
f ed er a l inc o m e ta x p u r pos es, is not a n it em of ta x p r ef er e nc e f or p ur pos es of ca lc u la t ing t h e f ed er a l
a lter na tiv e min i mu m ta x i mp os ed on i nd ividu a ls or cor p or a tio ns (a s des cr ib ed in p a ra gr a p h 3 a bove) a n d is
ex em p t fro m S ta t e of C a lif or n ia p er so na l i ncom e t a x .
T he op in io ns ex pr es s ed h er ei n a s t o the exc lu sio n fr o m gr oss inc o me o f i nt er es t o n t he 2 01 5 Bo nds
a r e b a s ed u p o n c er ta in r ep r es e nta t ions of fa ct a nd c er tif ica ti ons ma d e b y t he D ist r ict a nd a r e su b je ct to t h e
c ond it io n tha t the D ist r ict c o mp ly wit h a ll r equ ir em e nt s of the C o de tha t mus t b e sa tis fied su bsequ ent to
th e is su a nc e of the 2 0 15 B o n ds to a ssur e t ha t s u ch int e res t on t h e 2 0 15 Bo n ds w ill n ot b ec om e in c lu dab l e
in gr oss inc om e for feder a l inc o m e ta x p urp oses. Fa ilu r e to c omp ly wit h s u ch r equ ir e ment s o f the C od e
mi ght ca use i nt er est on th e 2 0 1 5 B on ds to b e i nc lu d ed in gr os s in c om e f or feder a l in com e ta x p ur poses
r et r oa cti ve t o th e dat e of iss ua n c e of th e 2 01 5 Bo n ds . T he D is tr ict ha s c ovena nt ed to c o mp ly wit h a ll s uc h
r equir e m ent s .
T he opin io ns ex pres s ed h er e in ma y b e a ffect ed b y ac tio ns t a k en (or n ot ta k en ) or e v ents occu r r in g
(or n ot occ ur r in g) a fter the da t e h er e of. W e ha ve n ot u n d er ta k en to det er m in e, or to infor m a ny p er so n,
w het her a ny su ch a ct io ns or e v e nts a r e ta k en or do oc cu r . T h e Ind ent ur e a n d the T a x C er tif ic a te r ela tin g to
th e 20 1 5 B on ds p er mit c ert a in a ct io ns t o b e ta k en or t o b e omitt ed if a f a v or a ble op inio n of B o nd C ou ns el
is pr ov ide d w it h r es p ec t th er eto. N o op in io n is ex p r ess ed h er ein a s to th e eff ec t on t h e ex clu s io n fro m gr oss
inc o me of int er est o n th e 20 1 5 B o nds for fed er a l inc o m e ta x p ur p oses wit h r esp ect to a ny 20 1 5 Bon d if a n y
su ch a ctio n is t a k en or omitt e d ba s ed u pon th e op ini o n or a dvic e of c ou ns el oth er t ha n ou r s el v es . O ther
tha n exp r essly sta t ed her ein, w e ex pres s no ot h er op inio n r e ga r di ng t a x co ns equ e nc es w ith r es p ec t t o t he
2 0 15 B o nds .
T he op in i ons ex pres s e d h er e in a r e ba s ed u p on ou r a na lys is a nd i nt er p r eta tio n of ex isti ng la ws ,
r egula t io ns, r ulin gs a n d ju dic ia l d ec is io ns a nd c o v er c er ta in ma t ters n ot d ir ect ly a d dr ess ed by s u c h
a uthor iti es. W e ca ll a tt ent io n to th e fa ct tha t th e r ig ht s a nd ob liga t io ns u nd er th e I n d entu r e a nd t h e 20 15
Bo n ds a r e s u bjec t to b a nkr u p tc y, i ns olv e nc y, r eor ga niz a t ion, mor a tor iu m, fra udulent c onv eya nc e a nd ot h er
si m ila r la ws a ffect in g cr edit or s ’ r ights, to the a p plica t io n of equ ita b le p r in cip les if e qu ita b le r emed ies a r e
C-3
sou ght , t o t he ex er cis e of ju di c ia l d iscr et i on in a ppr op r iat e ca ses a n d to li m ita tio ns on lega l r em ed ie s a ga i ns t
p u blic a g enc ies in th e S ta te of C a lif or n ia .
O ur op inio n is lim it ed to ma tter s go v er n ed by th e la ws of the S tate of C a lif or nia a nd fed er a l la w.
W e a s su me n o r es p ons ibi lit y w ith r es p e ct to th e a pp lic a b ilit y or th e eff e ct o f t he la ws of a n y ot h er
ju r isd ic t io n.
W e ex p r es s no op in io n h er ein a s to th e a ccura cy, com p let en ess or s u ffici en c y of th e O ff ic ia l
S ta teme nt r ela tin g to th e 2 0 15 B o nds or ot h er of f eri n g ma t er ia l r ela tin g to t h e 2 01 5 B o n ds a nd ex p r es sly
d isc la im an y duty to a d vis e t he o w n er s of t h e 2 0 15 B o n ds w it h r es p ect to ma t t er s conta in ed i n th e O ff icia l
S ta teme nt .
R esp ect fu lly s ub m itt e d,
D-1
A P PE N D I X D
IN FO R M A T I O N C O N C E R NIN G D T C
T h e in fo r m atio n in this s ectio n con cern in g D T C a nd D TC ’s b oo k-en try o nly s ys te m h as b e en
o b ta in e d fro m so urce s th at th e D istri ct b e lie ves to be reli ab le, b ut th e D is tric t takes n o r e sp o n sib il ity fo r
th e co m p le te ness or a ccu ra c y t here of. T he fol lowi ng descrip ti o n o f th e p rocedu r e s an d r eco r d kee pin g with
resp ect to ben efi cial o wn e rs hip interest s in th e 20 15 B on d s , pa ym e nt o f p rin c ip al, prem ium, if an y, accr et ed
v alu e, i f an y, a n d in te r est o n th e 2 0 15 Bo nd s t o DT C Pa r ticip a nts or B ene fic ial O wn e r s , c onf ir m ati o n a nd
tr a nsfers o f b en e fic ia l o wn e r s hip in te rests in th e 20 1 5 Bo nd s a n d o th er r e lated tr a n sa ct io ns b y an d b etwee n
D T C , th e DT C Pa rticip a n ts a n d the B ene fic ial O wn ers is ba s e d so l el y o n i nfo r m ation p ro vi d ed b y D TC .
T he D epos it or y T r ust C o mp a n y (“D T C ”), New Y or k, N Y, will a c t a s sec ur it ies d ep os it or y f or th e
2 0 15 B on ds. T he 2 01 5 B on ds w ill b e iss u ed a s fully-r egis t er ed s ecur ities r eg is t er ed in th e na me of C e de
& C o. (DT C ’s par t ner s hip n o min e e) or s uch oth e r na m e a s ma y b e r equ est ed b y a n a uthor iz e d
r ep r es enta t ive of D T C . O ne fu lly-r egist er ed 20 15 Bond will b e is s u ed f or ea ch a nnu a l ma t ur ity of th e 20 15
Bo n ds , ea c h in t h e a ggr ega te pr incip al a m ou nt of suc h a nnu a l ma tu r ity, a nd w ill b e d ep os it ed w it h D T C .
D T C, th e w or ld’s la r g es t secu r it ies d ep os it or y, is a lim it ed -p u r p os e tr u st co mp a n y or ga ni z e d u nd er
th e N e w Y or k B a nk i ng L a w, a “b a nking or ga niza ti on” w ith in t h e m ea n in g of th e N ew Y or k Ba n k in g L a w,
a m emb er of t he F e der a l R es er ve S ys te m , a “clea r in g c or p or a t ion ” w ith i n t h e mea ni ng o f th e N ew Y or k
U nif or m C o m m er c ia l C od e, a nd a “clea r ing a g en c y” r eg is t er ed pu r s u a nt to the p r o visio ns of S e cti o n 1 7 A
of th e S ec u r it ies E x cha n g e Act of 19 3 4. DT C holds and pr ov id es a s s et ser vic in g for ov er 3.5 m ill ion issu es
of U.S . a nd n o n-U.S . equ it y issu es , cor p or a te a nd m u nic ip a l d eb t issu es, a nd m o n ey ma r ket i nstr u m e nts
(fr o m o v er 10 0 cou ntr ies) tha t D T C ’s pa rticip a nt s (“D ir ect P ar ticipa nts ”) d ep os it w ith D T C . DT C a lso
fac il ita tes th e p ost -t r a de sett lemen t a m o ng D ir e ct P ar ticip a nt s of sa les a nd ot her s ec u rities tr a nsa ctions i n
d ep os it ed s ec ur it ies, throu g h elec tr o nic c o mp ut er iz ed b oo k-e ntr y tra ns f er s a nd p l ed ges b etw een D ir ec t
P ar ticip a nts ’ a ccount s. T his e li mina tes the need for physic a l m ov em ent of s ecur ities cer tif ic a t es. D irect
P ar ticip a nts inc lu d e bot h U.S . a nd n o n-U.S . sec u r it ies b roker s a nd d ea l er s, ba nks , tr us t co mp a n ies, clea r in g
c or por a t io ns, a nd c er ta in oth er or ga niz a tions . D T C is a wh olly-o w n ed s ub s idia r y of T he D ep os itor y T ru st
& C lea ring C or p or a tion (“D T CC ”). DT CC is th e h o lding c ompa n y f or D T C , N atio na l S ecur ities C l ea r in g
C or p or a tion a nd F ix ed Inco m e C lea r ing C or p or a t ion, a ll of wh i ch a r e r eg is t er ed clea r in g a genc ie s. DT C C
is o w ned b y t h e u s er s of its r egula t ed su bsidiar ies. A c c ess to th e D T C s ystem is a ls o a va ila b l e to ot h ers
su ch a s b oth U.S . a nd n o n-U.S . s ecur ities b r ok er s an d dea ler s , ba nks, tr ust c omp a nies, a nd cl ea r in g
c or por a t io ns tha t clea r thr ou gh or ma inta i n a cus tod ia l r ela t io nship w ith a D ir ect P a r ticip a nt , eith er dir ec t ly
or ind ir ec tly (“Ind ir ec t P a r tic ipa nt s ”). DT C is ra ted A A + b y Sta nda r d & P oor ’s . T he D T C R u les a p p lic a b l e
to its P a r ticip a nts ar e o n f ile w it h t h e S ec ur it ies a n d E x c ha n ge C o mm i ssio n. M or e inf or ma tio n a b ou t D T C
c a n b e f ou n d a t ww w.dtc c.c om .
P u r c ha s es of 2 0 1 5 B on ds u nd er th e D T C system mu s t b e ma d e b y or thr ou g h D ir ect P a r tic ip a nt s ,
w hic h will r e c eiv e a credit f or th e 2 0 1 5 Bon ds o n D T C ’s r ecor ds . T he o w n er sh ip int er est of ea c h a ctu a l
p u r cha ser of eac h 2 01 5 B on ds (“B en efic ia l O w n er ”) is in t u r n to b e r ec or d ed o n t h e D ir ect a n d I nd ir ec t
P ar ticip a nts ’ r ec or ds. B en ef ic ia l O w ner s w ill n ot r ec eiv e wr itt en c o nfir ma t io n fr om D T C of th eir p ur cha se.
B en ef ic ia l O w ner s a r e, h ow ev er , exp ect ed t o r ec ei ve wr itt e n c o nf ir ma tio ns pr ov idin g deta ils of t h e
tra ns a ctio n, a s well a s p er io dic sta tem ents of t h eir h old in gs, fr om th e D ir ect or Ind ir ect Pa rt icip a nt thr ou gh
w hic h th e B enefi c ia l O w n er e nt er e d int o t he tr a ns a ctio n. T ra ns fers of o w ner s hip int er ests in th e 2 01 5 B on ds
a r e to b e a cc om p lis h ed b y e ntr i es ma d e o n t h e b o o ks o f D ir ect a n d I n dir ect P ar ticip ant s a c ting on b eha lf o f
B en ef ic ia l O w ner s . Benef ic ia l O w n er s w ill n ot r ec eiv e b o nds r ep r es ent ing t h eir ow ner s hip i nt er ests in
2 0 15 B o nds , ex cep t in the ev ent tha t use of th e b o ok-en t r y s ys te m f or th e 20 1 5 B on ds is d is c ontinu ed.
D-2
T o fa cilita te su bs equ ent tr a nsfer s , a ll 2 0 1 5 Bo nds d ep os it e d b y D ir e ct P ar ticip a nts wit h D T C ar e
r egis t er ed in th e na m e of D T C ’s pa rtn er ship n o mi n ee, Cede & C o., or s uc h ot h er na me a s ma y b e r equ est ed
b y a n a u th or iz ed r ep r es e nta tiv e of D T C . T h e d ep osit of 2 01 5 B on ds w it h D T C a nd t heir r egistr a tio n i n th e
na m e of C e de & C o. or suc h ot her D T C no m ine e do n ot eff ec t a ny c ha n g e i n b e ne fic ia l o w ner s hip . DT C
ha s no kn ow le dge of the ac tua l B ene fic ia l O w n er s of the 2 01 5 B o n ds ; D T C ’s r ec or ds r efl ect o nly th e
id entit y of th e D ir ec t P ar ticip a nts to w h os e a c c ou nt s su ch 2 0 1 5 B o nds a r e cr e dit ed, w hic h ma y or ma y n ot
b e t he B en e fic ia l O w n er s. T he D ir ec t a n d I n d ir ect P artic ipa nt s w il l r ema in r es po ns ib l e f or keepin g a cc ou nt
of th eir h o ldings on b eha lf of t h eir cus tom er s.
C on v eya nc e of not ic es a nd ot h er com mu nic a ti ons b y D T C to D irect Pa rtic ipa nts , b y D ir ect
P ar ticip a nts t o Ind ir ec t P ar ticipa nts , a nd b y D ir ect P a r tic ip a nt s a n d Ind ir ect P a rt icip a nts t o B en efic ia l
O w n er s w il l b e g o ver n ed b y a r ra ng e ments a mo ng th em, su bjec t to a ny sta tu tor y or r egu la tor y r equ ire men t s
a s ma y b e in eff ect fr o m t ime to t i me. B e neficia l O w ner s of 2 01 5 B o n ds ma y w is h t o ta k e c er ta in st ep s to
a ug me nt th e tr a ns m is sio n to th em of n otic es of s ign if ic a nt ev ent s w it h res p ect t o the 2 0 1 5 B on ds , s uch a s
r ed emp t ions , t en d er s , d ef a u lts , a nd p r opos e d a mend m ents to t h e 2 0 1 5 B onds d oc u m en ts. F or ex amp le,
B en ef ic ia l O w ner s o f 20 15 B o nds ma y w is h to a s c er ta in tha t t he n o m inee h o ldin g the 2 01 5 B on ds f or their
b enefit ha s a gr eed t o obta in a nd tr a ns mit not ic es t o B en eficia l O w ner s . In th e a lter na tiv e, B e nef ic ia l
O w n er s ma y w is h to p r ov id e th eir na mes a nd a ddr ess es to the r egis tr ar a nd r equ est t ha t c opies of not ic es
b e pro vi d ed d irectl y to t h em .
R ed emp t io n n otic es sha ll b e s ent to DT C . If less tha n a ll of th e 20 1 5 B on ds w ith in a ma t ur ity ar e
b ein g redee me d, DT C ’s pr a c tic e is to d et er min e b y lot the a m ou nt of th e int er est of ea c h D ir e ct Pa rticip a nt
in su ch ma t u rity to b e r e d ee me d.
N eit h er D T C nor C ed e & C o. (nor a ny oth er D T C no min ee) w ill cons ent or vot e wit h r es p ect to
2 0 15 Bonds unless a u t hor iz e d b y a D ir ect Pa r ticip a nt in a ccor da n c e w ith D T C ’s M M I P r ocedu r es. Und er
its usua l pr oc edur es , D TC ma i ls a n O m nib us P r oxy to th e D istr ic t a s soo n a s p oss ibl e a f ter the r ec or d da t e.
T he O m nib us P r ox y a s s ig ns C e de & C o.’s c ons ent in g o r vot ing r ights to th os e D ir ec t Pa r ticip a nts to w h os e
a ccou nt s 2 0 15 Bo nds are cr ed it ed on th e r ec ord da t e (i d ent if ie d in a lis ti n g a t ta ch e d to the O m n ib us P r ox y).
R ed emp t io n p r oc eeds , d is tr ib u tio ns, a nd d ivi dend p a y ment s o n t he 2 01 5 B on ds wil l b e ma d e t o
C ed e & C o., or suc h ot her n om in ee a s ma y b e r equ es t ed b y a n a u th or iz ed r epr es enta tiv e of D T C . DT C ’s
p r a ctice is to cr ed it D ir ec t P ar ticip a nts’ a c cou nts up o n D T C ’s r ece ip t of fu nds a n d c or r es p o nd i ng d eta il
inf or ma tio n fr o m t he D ist r ict or th e T r u s tee, o n p a ya ble da te in a cc or da nc e wit h t h eir r esp ec tiv e ho ld ing s
sh o w n on D T C ’s r ecor ds . P a yment s b y Pa rticip a nts to B e ne f ic ia l O w n er s w il l b e gov er ne d b y s ta nd in g
ins tr uctio ns a n d cus t o ma r y pr a ct ic es, a s is the ca s e wi th s ecur ities he ld for th e a cc ou nts of cu s tom er s i n
b ea r er for m or reg is t er ed in “st r e et na m e,” a nd wi ll b e t h e r es p o ns ib ility o f s u ch P ar tic ipa nt a nd n ot of D T C,
th e T ru s tee, or the D is tr ict, sub ject to a ny s ta t u tor y or r egu la t ory r e qu ir e men ts a s ma y b e in eff e ct fr om
tim e t o ti me. P a ym ent of r e de mp tio n p r oc eeds , d is tr ib utio ns, a nd div ide nd p a y ment s to C ed e & C o. (or
su ch oth er no mi n ee a s ma y b e r equ est e d b y an a u thor iz ed r ep r es enta t ive of D T C ) is th e r esp o nsib il it y o f
th e D istr ict or th e T r u s tee, d isb u r sem ent of su ch p a y m ents to D ir e ct P a r ticipa nts will b e the r es p o ns ib ilit y
of D T C , a nd disb ur se me nt of su c h pa y m en ts to t h e B en eficia l O w ner s will b e t h e r esp ons ib ilit y of D ir ect
a nd I ndir ec t P a rticipa nts .
A 2 01 5 B o nd O wn er s ha ll g i ve notic e t o el ec t to ha v e it s 2 01 5 B o n ds p ur cha s ed or tend er ed,
thr ou g h its P a rt icipa nt , t o th e T ru s te e, a nd s ha l l eff ect deliv er y of su c h 20 1 5 B o n d b y ca usi n g th e D ir ect
P ar ticip a nt to tr a ns fer the P ar ticip a nt’s int er es t in the 2 01 5 Bo nds , on D T C ’s r ec or ds , to the T r us te e. T h e
r equir e m ent f or p h ysica l d el iv er y of 2 01 5 Bon d in c on n ect ion w it h an op tio nal t end er or a ma n da tor y
p u r cha se w ill b e d ee m e d s a tis fi ed w h en th e ow n er sh ip r ights i n t he 2 0 15 B o nd a r e tr a ns fer r e d by Dir ect
P ar ticip a nts on D T C ’s r ecor ds a nd follow ed b y a b oo k-e ntr y credit of te nder ed 2 01 5 B on d to th e T r ustee’s
D T C a ccou nt.
D-3
D T C ma y d isc o nti nu e p r o vidin g it s s er vic es a s d ep os it or y w ith r esp ec t to t h e 20 15 B onds a t a ny
tim e b y g ivin g r ea so na b le not ic e t o t h e D istr ic t or t h e T r us tee. U n der su ch c ir cu msta nc es, in th e ev e nt tha t
a su ccess or d ep os itor y is not ob ta ine d, ph ys ic a l c er tific a tes a r e r equir e d to b e p r int e d a nd de li ver ed.
T he D ist r ict ma y d ec id e t o disc o ntinu e u se of th e s yst em of b o ok-e ntry o nly tr a nsfer s thr ou gh D T C
(or a suc ces s or secur it ies d ep os it or y). In t ha t eve nt , 2 01 5 Bo nds w ill b e p r int ed a n d d eliv er e d to D T C.
T H E T R US T E E , AS L O N G AS A B O O K-E N T R Y ON L Y S YS T E M IS US E D F OR T H E 2 01 5
Bo n ds , W ILL S E N D AN Y N OT IC E OF R E D E M PT IO N O R OT H E R N OT IC E S T O O W N E RS O N L Y
T O DT C. AN Y F AIL UR E O F DT C T O AD VISE AN Y D T C P AR T IC I P AN T, O R O F AN Y D T C
P AR T IC IPAN T T O N OT IF Y AN Y BE N EF IC I AL O W N E R , OF AN Y N O T IC E AN D IT S C O N T E NT
O R E FF E CT W IL L N O T AF F E C T T H E V AL ID IT Y O F S UF F IC IE N C Y O F T H E P R O C E E D IN G S
R E LAT IN G T O T H E R E D E M PT IO N O F T H E 2 01 5 Bon ds C AL L E D F O R R E D E M PT IO N O R O F AN Y
O T H ER AC T IO N P R E M IS E D O N S UC H N OT I C E .
E-1
A P PE N DIX E
FO R M O F C O N T IN U IN G D IS C L O S U R E C E R T IFIC A T E
U po n issu a nce o f th e 2 0 15 B o n ds , th e D istri ct p rop oses to e nter i n to a C o n tin uin g D isc losu re
C ert ifi ca te in su bst a ntia lly th e fo llo win g f o rm :
T his C o ntinu in g D is c los u r e C er tif ica t e (the “D is c losu r e C er tif ic a t e”) is ex ecut ed a n d d eliv er e d b y
th e T r u ck e e D on n er P u b lic Ut ilit y D ist r ict (th e “D istr ict”) in c o n nec tion w it h th e is s ua nce o f $___________
W a ter System R efu nd ing R e venu e B o nds, S er ies 2 0 1 5 (th e “Bo n ds ”). T he B o n ds a re b ei n g is su ed p u r s ua nt
to a n Ind entu re o f T r u st, da ted a s of Ju ne 1 , 2 01 5 (t he “Indentu r e”), b y a nd bet w een t h e D ist r ict a nd T h e
Ba n k of N ew Y or k M ello n T r u st C o mpa n y, N .A., a s T r u st ee (t h e “T r u stee”). T he D is tr ict co vena nts a nd
a gr ees a s f oll o w s:
S E C T I O N 1. P u r p os e of th e D isc los ur e C er tif ica t e. T his D isc lo su r e C er tifi ca te is b ein g
ex ec u t ed a nd deli v er ed by th e D is tr ict for th e bene fit o f th e H o ld er s a nd B e nef ic ia l O w n er s of th e B o nds
a nd in or der to a s sis t th e P ar ticip a t ing U n der wr it er i n c o mp lyi n g wit h th e R u le (a s d ef in e d b elo w ).
S E C T I O N 2. D efin it ions . In a dd itio n to t he def in iti ons s et f or t h in th e I n dent u re, w h ic h a p ply
to a ny c a p ita liz ed t er m u s e d in t h is D isc los u r e C er tif ic ate u n l es s ot her w is e defin e d in t his S ect ion, t h e
fol lowin g ca pit a liz ed t er ms sha ll ha v e t he fo llo wi ng me a nin gs:
“An nu a l R ep or t” sha ll mea n a n y A n nu a l R epor t p rovid ed b y t he D istr ict pu r sua nt to, a nd a s
d es cr ib ed in, S ectio ns 3 a nd 4 of th is D isc los u r e C er tif i ca te.
“Be ne fic ia l O w n er ” sha l l m ea n a ny p er so n w h ic h (a ) h a s the p ow er , dir ectl y or in dir ectly, to vot e
or co ns ent w it h r esp ect t o, or to d is p os e of o w n er sh ip of, a ny B o nds (in clu din g p er s ons h old in g B o n ds
thr ou g h n o m in ees, dep os it or ies or ot h er int er mediar ies ), or (b ) is tr ea ted a s the o w ner of a ny Bo n ds for
f ed er a l in c om e t a x p urp os es .
“D is sem ina tio n A gent” sha ll mea n t h e D is tr ict, or a ny s u cc es sor D is s e mina t io n Ag ent d es igna te d
in wr it ing b y t h e D ist r ic t a nd w h ic h ha s fil ed wit h the D istr ic t a wr itte n a cc ep ta nc e of s u ch desig na tio n.
“E M M A” s ha ll m ea n th e M u nic ipa l S ec ur it ies R u lema k ing B oa r d’s E lectr o n ic M u nic ipa l M a r k et
Ac c es s S yst e m f or mu n ic ip a l se cu rities dis cl osu r es , ma inta in ed on the I nt er net a t http ://e mm a .msr b .or g/.
“H old er s” s ha l l mea n t h e O wner s a s defin ed i n th e I nd e ntu r e.
“L is te d E v e nt ” s ha l l m ea n a n y o f th e ev ents list ed in S ectio n 5 (a ) of this D is c losu r e C er tif ica te.
“O ffic ia l S ta tem ent” s ha ll mea n th e O ffic ia l S ta tem ent r ela ti n g to th e Bo n ds , da ted _________ __,
2 0 15 .
“Pa r ticip a t in g Un d er wr it er ” sha ll m ea n a ny o f th e ori g ina l u nd er w rit er s of t h e B onds r equ ir ed t o
c omp ly w ith th e R u le in c o nn ect ion w it h off er ing of the B on ds.
“R ep os it or y ” s ha ll m ea n E M M A .
“R u le” sha ll m ea n R u le 1 5c 2-1 2(b)(5 ) a dopt ed by th e S ecur ities a nd Ex c ha ng e C o m m is s io n u n d er
th e S ecur ities E x c ha ng e Act o f 1 9 3 4 , a s the s am e ma y be a mend ed fr o m t im e t o t im e.
E-2
“S ta te” sha ll mea n the S t a te of C a lif or n ia .
S E C T I O N 3. P rovis ion of A nnua l R ep or ts. T h e D is tr ict s ha ll, or s ha ll ca u s e t he D iss em ina t io n
A gent to, not la t er tha n 2 7 0 da ys a ft er th e e nd of the D ist r ict’s fisca l yea r (p r es ent ly s u ch f is ca l y ea r ends
D ec em b er 3 1), com men c in g wit h th e r ep or t for the f is ca l y ea r en d in g D ec em b er 31 , 20 1 5, p r ovid e to t h e
R ep osit or y a n A nnua l R ep or t whic h is c ons is t e nt w ith th e r equ ir eme nts of S e cti on 4 of this Dis c losu r e
C er tif ica te. T he A nnu a l R ep or t ma y b e su b mitt e d a s a sin g le d ocu m ent or a s s epa rate do cu ments
c omp ris ing a pa cka g e, a nd ma y cr os s -r ef er e nc e ot h er inf or ma tio n a s pr ovided in S ectio n 4 of this
D isc losur e C er tif ica t e; p r ovid ed t ha t th e a u dit ed fi na nc ia l s ta tem ents of the D istr ic t ma y b e su bm itt e d
sep a r a tely fr om t h e ba la nc e of t h e A nnu a l R ep or t a nd la t er tha n th e da te r equ ir e d a b ov e for t h e f ili ng of t h e
A nnu a l R ep or t if they a r e not a va ila b le b y tha t da te. If th e D is tr ict’s fis ca l y ea r c ha nges, it sha ll g iv e not ic e
of s u c h c ha ng e in t he sa me ma n n er a s for a L isted E v e n t u nd er S ec t ion 5 (c ).
(a) If th e D istr ict is u na b le t o pr ov ide t o th e R ep osit ory a n A n nu a l R ep or t by t h e da t e r equir e d
in t h is S ect io n 3 , th e D istr ic t sha ll s end a n otic e to t h e R ep os it or y i n s u b sta ntia lly th e f or m a tta c he d a s
E x h ib it A.
(b) N ot la t er tha n fift ee n (15 ) Bu sin ess D a ys p r ior t o sa id da t e, the D is tr ict sha ll p r o vid e t h e
A nnu a l R ep or t to th e D is s em ina ti on A ge nt (if ot h er tha n th e D is tr ict). T he D iss emi na t ion A g ent sha ll:
(i) d et er m ine ea ch y ea r pr ior t o th e da t e f or p r ov iding t h e A nnua l R ep ort t he na me
a nd a d dr ess of th e R ep os it or y, if a ny; a n d
(ii) if t h e D is s em ina tio n A g ent is ot h er tha n th e D ist rict, file a r ep or t wit h th e D istr ic t
c er tif yi ng tha t t he A n nu a l R ep or t ha s b een pr ovid ed p u r su a nt to this D is clos u r e C er tif ica te, st atin g
th e da t e it wa s pr ov id ed a nd lis t in g t h e R ep os it ory t o w h ic h it wa s p r ov id ed.
S E C T I O N 4. C ont ent of A nnua l R ep or ts . T he D istr ict’s A nnua l R epor t sha ll co nt a in or inclu d e
b y r ef er enc e t he f oll ow ing :
(a) T he a u dit ed fina n c ia l st at em ent s of t h e D istr ic t for th e pr ior f isca l y ea r , pr ep a r ed in
a ccor da n c e w it h g en er a lly a cc ep t ed a ccou ntin g p r inc ip les as pr omu lga te d to a p p ly to go v er n menta l entit ies
fr om ti me t o tim e b y the G ov er n m e nta l Ac c ou nt in g Sta nda rds Boa r d. If the D istr ict’s a u dit ed fina nc ia l
st a tement s a r e not a va ila b l e b y th e time t h e A nnua l R ep or t is r equ ir ed to be file d p ur s ua nt to Sect io n 3 , the
A nnu a l R ep or t s ha ll co nta in una u dit e d fi na nc ia l statem ents in a for ma t simila r to the f ina nc ia l s ta t eme nts
c onta i n ed in th e fina l O ff ic ia l S ta t eme nt , a nd th e a u dited fina nc ia l s ta teme nt s sha ll b e filed in th e sa m e
ma n ner a s the A n nu a l R ep or t when t h ey c o m e a va ila bl e;
(b) P rincip a l a m ou nt of t h e 2 0 15 B o nds ou ts ta nd ing;
(c) B a la nc e in th e R es er v e F u nd a nd a statement o f th e r es erv e requ ir em e nt w ith r esp ect
th er eto;
(d) A n u pda t e of th e inf or ma ti o n in T a b les ________ un d er the ca p tio n “T H E W AT E R
S YS T E M O F T H E D IST R IC T ” in th e O ff ic ia l S ta te ment;
(e) A n u pda t e of th e inf or ma tion in T a ble ___ u nd er t he ca p tio n “F I N AN C I AL
INF O R M A T I O N O F T H E D IST R IC T ” in t he O ff ic ia l S ta te me nt; a n d
(f) A de scr ipt io n of a dd iti ona l C o nt r a cts or B on ds (a s su c h ter ms a r e def i ned in t h e I n d e ntu r e )
ex ec u t ed or issu ed b y th e D istr ic t du r in g t he m ost r ec e n tly c o mp let ed Fis ca l yea r .
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A ny or a ll of th e it ems list ed a b ov e may b e inc lu de d b y s p ec if ic r efer enc e t o ot her doc u m ents,
inc lu di n g of ficia l s t at eme nt s of d ebt is su es of th e D is tr ict or r ela t ed p u b lic entit ies , wh ich ha v e b ee n
su b mitt ed to t he R ep os itor y or the S ec ur iti e s a nd E xcha n g e C omm issio n. If the docu m en t inc lu ded by
r ef er enc e is a fina l offic ia l sta t eme nt , it mu s t b e a va ila b l e fr o m t h e M u nic ip a l Secu r it ies R u le ma kin g B oa r d.
T he D istr ic t sha ll c l ea r ly id ent if y ea c h su ch ot h er d ocu m en t so i nc lu d ed b y r e f er enc e.
S E C T I O N 5. R ep or tin g of S i gn if ica nt E v ents .
(a) P u rsu a nt to th e p r ov is ions of t his S ect io n 5 , the D ist r ic t s ha ll giv e, or ca u se to b e
g iv en, notic e of th e oc cu r r e nc e of a ny of t h e f ollo wing e ve nts w ith r es p ec t to t h e B o n ds in a tim el y ma nn er
n ot m or e tha n t en (10 ) B usin ess D a ys a fter t h e e vent :
1 . princ ip a l a nd i nt er es t p ay m ent d eli n qu encies ;
2 . unsc h edu l ed dr a ws o n d eb t ser vic e r es er ves r eflectin g f ina nc ia l
d ifficu lti es;
3 . unsc h edu l ed dr a ws o n cred it enha nc em en ts r eflec t in g fina nc ia l
d ifficu lti es;
4 . s u b s titu tio n o f cr e dit or liqu i dit y p r ov id er s , or their fail u r e to p er f or m;
5 . a dver s e ta x opin ions , the is su a nc e b y th e I nt er na l R evenu e S er v ic e of
p r op os ed or fina l d et er mi na t ions of ta x a b ilit y or N ot ic es of P r opos ed I ssu e (IR S F or m 5 70 1 T E B);
6 . te nder off er s ;
7 . def ea sa nc es ;
8 . ra tings cha ng es; and
9 . ba nkr u ptcy, insolv en c y, r ec e iv er s h ip or s imila r pr oc eedi ngs .
N ot e: F or th e p ur poses o f th e event id ent if ied in s u b para gr a p h (9), the e vent is c o ns ider ed to o ccu r
w hen a n y of th e f o llo win g occ ur : the a p p oint ment of a r ec e iver , fis ca l a g ent or sim ila r offic er for a n
ob liga t ed per s o n in a pr oc eed in g un d er th e U.S . Ba nkr u p tc y C o de or in a n y oth er p r oc eedi ng u n d er s tate or
f ed er a l la w in w h ic h a cou r t or gov er n ment al a uth or ity ha s a s sum ed jur is d ict io n over s u bsta ntia lly a ll o f
th e a s s ets or b usin es s of t he ob liga ted p er so n, or if suc h ju ris dic ti on ha s b e en a ssu med b y lea v in g th e
ex is ti n g g o ver nm en ta l b o dy a nd of fic ia ls or o ff ic er s i n p oss es sio n b u t s u b ject t o th e s up er vis i on a nd or d er s
of a cou r t or go v er nmenta l a u th or it y, or the entr y of a n or der conf ir m ing a pla n of r e or ga niza tio n,
a rr a ngem en t or liqu ida tio n b y a cour t or gov er nm e nt a l a ut hor it y ha vi ng s u p er v is io n or jur is d ict ion o ver
su b st a nt ia lly a ll o f th e a ssets or b u s iness of th e ob liga t ed p er s on.
(b) P u rsu a nt to th e p r ov is ions of t his S ect io n 5 , the D ist r ic t s ha ll giv e, or ca u se to b e
g iv en, not ic e of t he oc cur r enc e of a ny of t h e f o llo wing event s wit h r esp ect to t he B o nds , if ma t er ia l :
1 . un less d es cr ib ed in S ec t io n 5 (a )(5), other notic es or deter mina t ions b y th e
Int er na l R evenu e S er vic e wit h r es p ec t to th e ta x statu s of th e B on ds or oth er ev ent s a ff ectin g th e ta x st at u s
of th e B on ds;
2 . mo dif ic atio ns to the r ig hts of B o n d ho ld ers ;
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3 . op tio na l, u nsc h edu l ed or c ont in gent B o nd r ed e mpt io ns;
4 . releas e, s ub s titu tio n or s a le of pr op er ty sec ur in g rep a y ment of th e B onds;
5 . no n-pa ym e nt r ela te d d efa ult s;
6 . the c o nsu mma t ion of a m er g er , cons o lida tion, or a c qu is itio n in vo lvi n g th e
D istr ic t or th e s a le of a ll or su bsta ntia lly a ll of t h e a ssets of th e D istr ic t, ot h er tha n in t h e or dina r y c ou r se of
b u s in es s, t he e ntr y i nt o a d ef init ive a gr eem ent t o u nd er t a ke s u ch a n a cti o n or th e ter m ina t io n of a d ef in itiv e
a gr ee men t r ela tin g to a n y su ch a ctio ns, oth er tha n p u r su a nt t o its terms ; a nd
7 . a p poi nt m ent o f a suc cess or or a dd itio na l tru stee or t he c ha n ge of t he na m e
of a tr u stee.
(c) If th e D is trict d et er min es tha t kn ow le dge of th e oc cu r r enc e of a L is t ed E v ent u n d er
S ec t ion 5 (b ) w ou ld be ma t er ia l u nd er a p plica b le fe der a l s ecur ities la w s, the D ist r ict s ha ll file a noti c e o f
su ch oc cu r r enc e w ith E M M A in a t imely ma n n er n ot mor e tha n ten (1 0) Bu s i ness D ays a fter the event .
(d) W hile t h e failu r e to file a noti c e of t h e occur r enc e o f a L ist ed E v e nt u nd er S ec t io n
5 (a )(8 ) sha ll c o nst itut e n on-c om p lia nc e wit h th e t er ms her eof a n d ma y b e r equ ir ed to b e d isc l os ed b y th e
D istr ic t in a ccor da nc e w it h th e R u le, fa ilu r e sha l l not c ons t itu te a n e ve nt of de fa u lt h er eu n der if (i) t h e
D istr ic t d id n ot r ec eiv e wr itt en n oti c e of su c h r a t ing c ha ng e fr om t h e r esp ec t iv e r a ting a g enc y, (ii) th e r a t in g
c ha ng e wa s a r esu lt of a cha ng e in t he ra tin g of a liq uidit y or c re dit en ha nc em ent a n d t he ma r k et wa s
g ener a lly a wa r e of the c ha ng e in t he ra ting of su c h li q uidit y or cr e d it enha nc er or (iii) th e r a tin g a g e nc y
filed a not ic e of su ch r a ting cha ng e w it h th e R ep os it or y .
S E C T I O N 6. T er m ina ti o n of R ep or tin g O bliga t ion. T h e D is tr ict ’s ob li ga tio ns u nd er th is
D isc losur e C er tifica te sha ll t er m ina t e u p o n th e le ga l d ef ea s a nc e, p r ior r ed em pt io n or p a ym e nt in fu ll of a ll
of th e B on ds . If s uch ter mina t ion occur s pr ior to th e f ina l ma tu r ity of t he B on ds, the D istr ic t sha ll giv e
n otic e o f s u ch t er mina t ion in the s a m e ma n n er a s for a L is t ed E v ent u n der S ec t io n 5 (c).
S E C T I O N 7. D iss e mina ti o n A g ent. T he D istr ict ma y, fro m ti me t o time, a p p oint or en ga g e a
D iss e mina ti o n A g ent to a s s ist it in ca r r yin g ou t it s ob l iga tio ns u n d er this D isc los u r e C er t ifica te, a nd ma y
d isc ha r g e a ny s uc h D is s e mina t io n A g ent, w ith or w ith ou t a pp ointin g a s uc c essor D iss em ina tio n A g ent. T h e
D iss e mina ti o n A gent s ha l l n ot b e r esp o nsib le i n a n y ma nn er for th e c ont ent of a n y n ot ic e or r ep or t p r ep a r ed
b y th e D is tr ic t p u r su ant to this D isclos ur e C er t if ica t e.
S E C T I O N 8. A men d men t ; W a iver . N otwit hs ta n d in g a n y ot h er p ro v isio n o f this D is closu r e
C er tif ica te, th e D istr ic t ma y a m en d this D is cl osu r e C er tifica te, a nd a n y p r ovis io n of th is D iscl osu r e
C er tif ica te ma y b e wa ived, p r ovide d tha t, in t he op ini on o f na tio na ll y r ec o gniz ed b o n d c ou ns el, su ch
a mend me nt or wa iver is p er mit te d by th e R u le. In the event of a ny a me nd ment or wa iver of a p r ovis i on of
this D isclosu r e C er tif ica t e, the D istr ic t sha ll des cr ib e su c h a mend me nt in t he n ext A n nu al R ep or t , a nd s ha ll
inc lu d e, a s a pp lica b l e, a na rra tiv e exp la na ti on of th e r ea s o n for the a m e nd m e nt or wa iv er a nd its imp ac t o n
th e t yp e (or in th e c a se of a cha n ge of a cc ou nt in g p r in c iple s, o n th e pr es ent a t io n) of f ina nc ia l i nf or ma ti o n
or op er a tin g da ta bein g p r es ent ed b y th e D is tr ic t. In a dd itio n, if the a me nd m e nt r ela tes to the a ccou nt i n g
p r inc ip les to be follo w ed in p r ep a r ing fina nc ia l s ta tement s , (i) not ic e o f su c h cha ng e s ha ll b e giv en in th e
sa me ma n n er a s for a L isted E vent u nd er S ectio n 5 (c), a nd (ii) th e A nnua l R ep or t for t he y ea r in w h ic h t h e
c ha ng e is mad e sha ll p r es ent a c ompa r is on (in na r ra tiv e f or m a nd a lso, if f ea s ib le, in qua nt ita tiv e f or m)
b et w ee n t he f i na n cia l s ta tem en ts a s pr epa r ed on t he b a s is of th e n ew a cc ou nt ing p r in c ipl es a n d thos e
p r epa r ed o n th e b a s is of th e f or m er a c cou ntin g p r inc ip les.
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S E C T I O N 9. A dd itio na l In f or ma tio n. N ot hin g in t h is D isc los ur e C er tifica te sha ll b e d ee me d to
p r event th e D ist r ict fr om diss em ina ti ng a n y oth er infor ma tio n, u sin g th e m ea ns of d is s e mina ti on set for th
in this D is c l osu r e C er tifi ca te or a ny ot h er m ea ns of c o m mu n ic atio n, or inc lu di ng a ny ot her inf or ma tio n in
a ny A n nu a l R ep or t or n otic e of oc cu r r enc e of a L ist ed E v ent, in a d dit io n t o tha t w hich is r equ ir ed b y t his
D isc losur e C er tif ica t e. I f the D is tr ict c ho os es to inc lu de a n y inf or ma ti o n in a ny A n nu a l R ep or t or notic e
of oc cu rr e nc e of a L isted E vent in a dd it io n to tha t w h ich is s pecifica ll y r equ ir e d by this D isclos ur e
C er tif ica te, th e D is tr ict sha ll ha v e no ob liga t ion u nd er this D isc losur e C er tif ica t e to u pda te su c h inf or ma tio n
or in c lu de it in a ny futu r e A n nu a l R ep or t or not ic e of o ccu r r enc e o f a L ist ed E ve nt.
S E C T I O N 1 0. D efa u lt. In the e vent of a fa ilu r e of t he D istr ict to f ile a n a nnua l r epor t u nd er
S ec t ion 4 h er eof or to f il e a r epor t of a s ig nific a nt even t u nd er S ecti o n 5 her eof , a ny H o ld er s or B ene fic ial
O w n er s of t h e B on ds ma y ta ke s uc h a c tio ns a s ma y b e n ec essa r y a nd a p pr op r ia te, inc lu ding s e ek in g
ma n da te or sp ecific p erf or ma n c e b y c ou r t or d er , to c a u se t h e D is tr ic t to ma k e su c h f ilin g. N ot w it hsta ndi n g
th e f or ego in g, n o a ctio n ma y b e u nd er ta k en b y H o lder s or B enef ic ia l O w n er s of t he B o nds w ith r esp ect t o
th e a ccur a c y of th e inf or ma tio n c onta i ned in a n y s u ch f iling or oth er wis e w it hout the a p pr ova l in wr it ing of
H old er or Beneficial O w n er of a t lea s t 5 0% of th e a g gr ega t e p r inc ip a l a m ou nt of th e B on ds. A defa ult
u n der t his D is c losur e C er tif ic a te sha ll n ot be d ee m e d a n E vent of D efa u lt u nd er the Ind ent ur e, a nd th e s o l e
r em edy u n d er th is Dis c losu r e C ert if ica te in th e ev ent of a n y fa ilu r e of t h e D is tr ic t to c omp ly w it h t his
D isc losur e C er tif ic at e sha ll b e a n a ct ion to co mp el p er for ma nc e.
N o O w ner s or Ben ef ic ia l O w n er s ma y ins titu t e s u ch a c tio n, su it or p r oceedi n g to c o mp el
p er f or ma nce u n les s th ey sha ll ha v e fir st d eliv er ed t o th e D ist r ict s a t is fa c tor y wr itt en e vid en c e of th eir s t a t us
a s O w n er s or B e nef ic ia l O w n er s of a t lea st 5 0% a ggr e ga te p r in c ip a l a mou nt of t h e B on ds, a nd a wr itt e n
n otic e of a n d r equ est to c ure su c h fa ilur e, a nd the D ist rict sha ll ha v e r efu s ed t o c omp ly ther ew ith wit h in a
r ea so na b le tim e.
S E C T I O N 1 1. D uties, Imm u nit ies a nd L ia bi liti es of D is s e mina ti on A ge nt. T he D iss em ina ti o n
A gent s ha ll ha v e o n ly s uch du ti e s a s a r e sp ec if ic a ll y s et for th in t h is D isc los u r e C er tifica te, a nd t h e D istr ic t
a gr ees t o in demn i f y a nd sav e the D is s e mina ti o n A g ent, its offic er s, dir ector s, emp lo yee s a nd a g ents,
ha r mles s a ga ins t a ny l os s , ex p ens e a nd lia b ilities w hic h it ma y incu r aris in g out of or in th e ex er c is e or
p er f or ma nce of its p o w er s a nd du t i es h er eu n der , inc lu d ing th e c ost s a nd exp ens es (inc lu di ng a tt or n eys f e es )
of def e nd in g a ga ins t a ny c la im o f lia b il it y, bu t exc lu d ing l ia b ilit ies du e t o the D iss em i natio n A g ent ’s
n egl ig e nc e or wi lfu l m is c on du ct. T he ob l iga ti ons of th e D istr ict un d er this S ect ion sha ll sur viv e r es ig na t io n
or r em o va l of t h e D is s e mi na tio n A gent a nd p a ym ent of the B o n ds.
S E C T I O N 1 2. B en ef ic ia r ies . T his D isc losu r e C er tif ica t e shall inur e so le ly to th e b e nef it of th e
D istr ic t, t he D iss em i na tio n A gent , the P a rticipa tin g U n d er wr it er a nd H old er s a nd B en ef ic ia l O w ner s fr om
tim e t o ti me of the Bo nds, a nd sha ll cr ea t e n o r i g ht s in a ny ot h er p er s o n or entit y.
D a t ed : O ct ob er __, 2 00 6 T R UC K EE D O NN E R P UB L IC UT IL IT Y D IS T R ICT
B y:
P r esi dent
AT T E ST :
S ec r eta ry of th e B oa r d of t he D is tr ict
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E XH IB IT A
N O T IC E TO R E PO S IT O R Y O F FA IL U RE TO FI L E A N N U A L R E PO R T
N a m e of O b liga te d P er s on: T R UC K EE D O NN E R P UB L IC U T IL IT Y D IS T R ICT
N a m e of O b liga tio n: W AT E R S Y ST E M R E F UN D IN G R E VE N UE BO N DS , S E R IE S 2 0 1 5
D a t e of Issu a nc e: _______ __, 201 5
N O T IC E IS H ER E B Y G IVE N t ha t the D is tr ic t ha s n ot p r ovid ed a n A n nu a l R ep or t wit h r es p ect to
th e a b o ve-na med B on ds a s r equ ir e d b y t he C onti nu in g D isc losu r e C er tifi ca te ex ecut e d b y t he D is tr ict o n
th e da t e of iss u a nc e of th e B on ds. T he D istr ic t a nt ic ip a tes t ha t th e A nnua l R ep or t wil l b e f ile d b y
_____________.
D a t ed :_______________
T R UC K E E D O N N E R P UB L IC UT IL IT Y D IS T R IC T
B y: [no s ig na tu r e r equ ir ed; for m o nly]
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A P PE N D I X F
S PE C I M E N M U N IC IPA L B O N D I N S U RA N C E PO L I C Y