HomeMy WebLinkAbout15 Audited Financialsenda Item #
ACTION
To: Board of Directors
From: Regina Wise
Date: June 06, 2018
Subject: Consideration of the Audited Financial Report for FY17
1. WHY THIS MATTER IS BEFORE THE BOARD
15
The District is required to have its financial records audited each year. As the Board is
responsible for hiring auditors, the auditors present their findings directly to the Board.
2. HISTORY
In 2016 the Board extended the contract with the independent accounting firm Moss
Adams, LLP to perform the District's audits for 2016 through 2018.
3. NEW INFORMATION
Moss -Adams conducted the 2017 audit of the District's financial records. In
November Mt, Moss -Adams conducted initial assessments of financial data and
internal controls. Then in March 2018, conducted final testing of the financial
statement balances as of December 31, 2017. The result of the audit is an
"unmodified" opinion on the attached annual financial statements which is the highest
level of assurance an auditor can provide relative to the fairness and accuracy of the
financial statements being presented. Julie Desimone with Moss -Adams will present
these results to the Board, in addition to reviewing the attached comments related to
internal control matters identified in the attached communications letter.
The FY17 audit also included asingle-audit for the grant funding received from the
extreme winter storms in January and February of 2017. A single audit is required of
an entity that expends greater than $750,000 of Federal assistance in a given fiscal
year. The District received $932,836 in Federal grant funding and an additional
$258,909 in State grant funding in FY17. The majority of the funding was to aid the
District with the extraordinary costs associated with removing downed trees and
repairing downed power poles, lines, and transformers. The single audit
documentation is included in the draft Consolidated Financial Statements.
In reference to significant accounting policies, in FY17 there were no significant
changes in the application of accounting policies in FY17.
Attached are the draft copies of the audited financial statements and communications
letter.
4. FISCAL IMPACT
The annual Consolidated Financial Statements and Primary Government Only
Financial Statements provide the District's detailed financial activity for FY17 as of
December 31, 2017.
5. RECOMMENDATION
Accept and file the Audited Financial Reports for fiscal year ending December 31,
2017.
AiA 0,, �N 0J
Lisa Hall
Administrative Services Director
64
Michael D. Holley
General Manager
TRUCKEE DONNER
PUBLIC UTILITY DISTRICT
CONSOLIDATED FINANCIAL STATEMENTS
Including Report of Independent Auditors
December 31, 2017 and 2016
TABLE OF CONTENTS
Report of Independent Auditors................................................................................................1
Management's Discussion and Analysis......................................................................................4
FinancialStatements...............................................................................................................9
Consolidated Statements of Net Position........................................................................10
Consolidated Statements of Revenues, Expenses and Changes in Net Position.....................13
Consolidated Statements of Cash Flows.........................................................................14
Notes to Financial Statements.................................................................................................16
Report of Independent Auditors on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial Statements
performed in Accordance with Government Auditing Standards...........................................51
Report of Independent Auditors on Compliance for the Major Federal Program, Report on Internal Control
Over Compliance, and Report on the Schedule of Expenditures of Federal Awards Required by the
UniformGuidance................................................................................................................53
Schedule of Finding and Questioned Costs................................................................................55
Schedule of Expenditures and Federal Awards...........................................................................56
Notes to Schedule of Expenditures and Federal Awards...............................................................57
Required Supplementary Information........................................................................................58
Cost Sharing Defined Benefit Pension Plans...................................................................59
Position of Post -Employment Benefit Plans.....................................................................61
Supplementary Information.....................................................................................................62
Consolidating Statement of Net Position.........................................................................63
Consolidating Statement of Revenues, Expenses and Changes in Net Position ......................65
Consolidating Statement of Cash Flows..........................................................................66
DMOSSADAMS
Report of Independent Auditors
The Board of Directors
Truckee Donner Public Utility District
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of Truckee Donner Public
Utility District (the "District"), which comprise the consolidated statements of net position as of
December 31, 2017 and 2016, and the related consolidated statements of revenues, expenses and
changes in net position, and cash flows for the years then ended, and the related notes to the
consolidated financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity's preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly,
we express no such opinion. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
(P�1) MOSSADAMS
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Truckee Donner Public Utility District as of December
31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended in
accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's
discussion and analysis, the schedule of the District's proportionate share of the net pension liability,
the schedule of contributions, and retiree health plan funding history, be presented to supplement the
basic consolidated financial statements. Such information, although not a part of the basic
consolidated financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic consolidated financial
statements in an appropriate operational, economic, or historical context. We have applied certain
limited procedures in the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic consolidated financial statements, and other
knowledge we obtained during our audit of the basic consolidated financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures do
not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audits were conducted for the purpose of forming an opinion on the consolidated financial
statements that collectively comprise the District's consolidated financial statements. The schedule of
expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part
200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards, and the consolidating statements of net position, statements of revenues, expenses and
changes in net position and cash flows as of and for the year ended December 31, 2017, are
presented for purposes of additional analysis and are not a required part of the basic consolidated
financial statements (collectively, the supplementary information). The supplementary information is
the responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the basic consolidated financial statements. Such
information been subjected to the auditing procedures applied in the audit of the basic consolidated
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic
consolidated financial statements or to the basic consolidated financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the supplementary information, as described above, is fairly stated,
in all material respects, in relation to the basic consolidated financial statements as a whole.
2
(�)
MO55ADAM5
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated May 25,
2018 on our consideration of the District's internal control over financial reporting and on our tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion
on the effectiveness of the District's internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing Standards in
considering the District's internal control over financial reporting and compliance.
Portland, Oregon
May 25, 2018
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2017 and 2016
MANAGEMENT'S DISCUSSION AND ANALYSIS
As financial management of the Truckee Donner Public Utility District (the District), we offer readers of
these financial statements this narrative overview and analysis of the financial activities of the District for
the years ended December 31, 2017 and 2016. This discussion and analysis is designed to assist the
reader in focusing on the significant financial topics, provide an overview of the District's financial activity
and identify changes in the District's financial position.
We encourage readers to consider the information presented here in conjunction with that presented within
the basic financial statements. The reader should take time to read and evaluate all sections of this report,
including the footnotes and other supplementary information that is provided, in addition to this
management discussion and analysis.
FINANCIAL HIGHLIGHTS
The District's current assets increased $5.1 million (13.3%) from $38.7 million at December 31, 2016 to
$43.8 million at December 31, 2017, predominantly due to higher than anticipated revenues for the Electric
Utility.
The District's total net position increased $5.6 million (7.1%) from $79.2 million at December 31, 2016, to
$84.9 million at December 31, 2017. The increase is primarily attributed to a $4.4 million increase for the
Electric Utility for 2017.
Operating revenues increased $2.8 million (7.8%) from $35.6 million in 2016 to $38.3 million in 2017.
Electric revenues increased 10.5% in 2017. Electric revenues include a 2% rate increase in 2017. Federal
Emergency Management Agency (FEMA) and California Office of Emergency Services (CalOES)
reimbursements for reparation of plant damages sustained in January and February 2017 from extreme
winter storms, and the District's participation in the joint pole program exceeded expectations in 2017 due
to increased pole replacements. Water revenues increased 2% in 2017; primarily due to a 3% water rate
increase in 2017 that was offset by decreased residential consumption. The Water Utility also received a
small reimbursement of expenses from FEMA and CalOES associated with the extreme winter storms in
2017.
Operating expenses of the District increased $2.6 million (7.9%) from $33.1 million in 2016 to $35.7 million
in 2017. Electric expense increased 8.5% and Water expense increased 7.2% in 2017. The primary
increase in expense is due to increased pension expense associated with the change in the discount rate
implemented by CalPERS in 2017 in addition to the extra operating expenses that occurred from the
extreme winter storms in Q1 of 2017.
Compared to 2016, the overall non -operating revenues remained nearly flat at $3.8 million in 2017
compared to $3.7 million in 2016. Non -operating expenses decreased $0.3 million from $3.2 million in 2016
to $2.9 million in 2017.
No new debt was incurred in 2017. Final payments were made on two of the Water Utility's installment
loans in 2017. The annual debt service on the two installment loans was just over $300,000.
OVERVIEW OF THE FINANCIAL STATEMENTS
This report includes Management's Discussion and Analysis, Report of Independent Auditors, the Basic
Financial Statements, (which includes the notes to the financial statements), Required Supplementary
Information and additional Supplementary Information.
See accompanying auditors' report.
Page 4
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2017 and 2016
REQUIRED FINANCIAL STATEMENTS
The financial statements of the District are designed to provide readers with a broad overview of the
District's finances similar to a private -sector business. They have been prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the United States of America
(GAAP). Under this basis of accounting, revenues are recognized in the period in which they are earned
and expenses are recognized in the period in which they are incurred, regardless of the timing of related
cash flows. These statements offer short-term and long-term financial information about the District's
activities.
The reporting entity consists of the primary government, which provides two utilities (electric utility and
water utility), and the blended component units. Further details about the component units are provided in
note 1(A).
The Consolidated Statement of Net Position presents information on all of the District's assets, deferred
outflows of resources and liabilities, and deferred inflows of resources and provides information about the
nature and amounts of investments in resources (assets) and the obligations to District creditors (liabilities).
It also provides the basis for computing rate of return, evaluating the capital structure of the District, and
assessing the liquidity and financial flexibility of the District.
All of the current year's revenues and expenses are reported in the Consolidated Statements of
Revenues, Expenses, and Changes in Net Position. This statement provides a measurement of the
District's operations over the past year and can be used to determine whether the District has successfully
recovered all its costs through its rates and other charges.
The Consolidated Statement of Cash Flows provides relevant information about the District's cash
receipts and cash payments during the reporting period. This statement reports cash receipts and cash
payments resulting from operating, non -capital financing, capital and related financing, and investing
activities. When used with related disclosures and information in the other financial statements, the
statement of cash flows should provide insight into (a) the District's ability to generate future net cash flows,
(b) the District's ability to meet its obligations as they come due, (c) the District's needs for external
financing, (d) the reasons for differences between operating income and associated cash receipts and
payments, and (e) the effects on the District's financial position of both its cash and its non -cash investing,
capital, and financing transactions during the period. The changes in cash balances are an important
indicator of the District's liquidity and financial condition.
The Notes to the Financial Statements provide additional information that is essential to a full
understanding of the data provided in the basic financial statements. This includes but is not limited to,
significant accounting policies, significant financial statement balances and activities, material risks,
commitments and obligations, and subsequent events, as applicable.
See accompanying auditors' report.
Page 5
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2017 and 2016
DISTRICT HIGHLIGHTS
The condensed financial statements at December 31, 2017, 2016, and 2015 are presented below.
CONSOLIDATED STATEMENT OF NET POSITION
Increase
ASSETS AND DEFERRED
(Decrease)
OUTFLOWS OF RESOURCES
2017
2016
2015
2017-2016
Current assets
$ 43,809,466
$ 38,675,596
$
37,628,590
$
5,133,870
Non -current assets:
Capital assets, net
123,114,074
123,602,331
122,416,668
(488,257)
Restricted assets
1,818,513
1,876,032
1,900,036
(57,519)
Other long-term assets
3,848,264
4,618,396
5,361,643
(770,132)
Total Assets
172,590,317
168,772,355
167,306,937
3,817,962
Deferred outflows of resources
4,350,842
4,764,564
3,274,459
(413,722)
TOTAL ASSETS AND
DEFERRED OUTFLOWS OF RESOURCES
$ 176,941,159
$ 173,536,919
$
170,581,396
$
3,404,240
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND NET POSITION
Current liabilities
$ 9,170,662
$ 8,898,434
$
8,845,354
$
272,228
Non -current Liabilities
Long-term debt, net of current portion
64,032,297
68,088,323
71,992,962
(4,056,026)
Net pension liability
11,975,655
10,250,329
8,013,400
1,725,326
OPEB liability
1,116,568
719,217
-
397,351
Unearned revenues
5,236,402
4,735,348
4,855,055
501,054
Total Liabilities
91,531,584
92,691,651
93,706,771
(1,160,067)
Deferred inflows of resources
551,932
1,597,126
2,341,737
(1,045,194)
NET POSITION
Net investment in capital assets
55,267,086
52,052,148
47,043,317
3,214,938
Restricted for debt service
9,288,950
8,773,009
8,569,701
515,941
Unrestricted
20, 301,607
18,422,985
18, 919,870
1,878, 622
Total Net Position
84,857,643
79,248,142
74,532,888
5,609,501
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND NET POSITION
$ 176,941,159
$ 173,536,919
$
170,581,396
$
3,404,240
In 2017, the District's current assets increased $5.1 million, predominantly due to increased cash reserves
associated with the Electric Utility. Other Long Term assets decreased $0.8 million, due to the scheduled
collection of special assessments receivable. Net Long Term debt decreased $4.1 million, due to annual
reduction of existing debt. See note 5 for details on remaining debt. No new debt was issued in 2017. The
District's total net position increased $5.6 million, substantially due to increased investment in capital assets
including electric distribution replacement and improvement projects, meter replacement and
communication upgrade, transportation equipment, pipeline replacement, and the continuation of the water
SCADA replacement.
"Restricted for debt service" represents amounts restricted for payments related to outstanding revenue
bonds.
See accompanying auditors' report.
Page 6
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2017 and 2016
The District had income before capital contributions of $3.5 million, $3.0 million, and $2.5 million for the
years ended December 31, 2017, 2016, and 2015, respectively. Changes in the District's net position can
be determined by reviewing the following Condensed Revenues, Expenses, and Changes in Net Position
for the years ended December 31, 2017, 2016, and 2015.
CONDENSED REVENUES, EXPENSES, AND CHANGES IN NET POSITION
Sales to consumers
Other operating revenues
Total Operating Revenues
Operating expenses
Operating Income
Non -operating revenues (expenses)
Income before
capital contributions
Capital contributions, net
Change in net position
Net Position, Beginning of Year
NET POSITION, END OF YEAR
2017 2016 2015
$ 34,462,146 $ 33,026,587 $ 30,818,856
3,873,207 2,577,122 2,158,141
38,335,353 35,603,709 32,976,997
Increase
(Decrease)
2017-2016
$ 1,435,559
1,296,085
2,731,644
35,702,131 33,101,672 30,892,366 2,600,459
2,633,222 2,502,037 2,084,631 131,185
879,451 514,107 380,837 365,344
3,512,673 3,016,144 2,465,468 496,529
2,096,828 1,699,110 1,430,510 397,718
5,609,501 4,715,254 3,895,978 894,247
79,248,142 74,532,888 70,636,910 4,715,254
$ 84,857,643 $ 79,248,142 $ 74,532,888 $ 5,609,501
Total operating revenues were $38.3 million in 2017, $35.6 million in 2016, and $33.0 million in 2015. In
2017, electric revenues increased 10.5% due to a 2% rate increase in addition to increased residential and
commercial consumption driven by colder temperatures. Water revenues increased 2.0%; a 3% rate
increase in 2017 was offset by a continued trend in decreased consumption. Other operating revenues
include just under $1.1 M in reimbursements to the Electric Utility from the Federal Emergency Management
Agency (FEMA) and California Office of Emergency Services (CaIOES) reimbursements for reparation of
plant damages sustained in the January and February 2017 from extreme winter storms. The District
received an additional $65K in reimbursements to the Water Utility for reimbursement of qualifying
expenses associated with the District's emergency protective measures to maintain water service to
customers during those extreme winter storms.
Total operating expenses were $35.7 million in 2017, $33.1 million in 2016, and $30.9 million in 2015.
Electric expenses increased 8.5% and water expenses increased 7.2%. primarily attributed to the
extraordinary expenses incurred from the extreme winter storms of 2017 as noted above in addition to a
significant increase in pension expense due to the first year implementation of the decrease in the discount
rate adopted by the California Public Employees Retirement System (CaIPERS (see note 9).
Compared to 2016, the overall non -operating revenues remained nearly flat at $3.8 million in 2017 and $3.7
million in 2016. Non -operating expenses decreased $0.3 million from $3.2 million in 2016 to $2.9 million in
2017.
See accompanying auditors' report.
Page 7
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2017 and 2016
CAPITAL ASSETS
As of December 31, 2017, 2016, and 2015, the District had $123.1 million, $123.6 million, and $122.4
million, respectively, invested in a variety of capital assets, net of accumulated depreciation. A summary of
capital assets is reflected in the following schedule.
Electric distribution facilities
Water distribution facilities
General plant
Sub -totals
Less: Accumulated depreciation
Net of accumulated depreciation
Construction work in progress
Net capital assets
CAPITAL ASSETS
2n17 2nlfi
$ 60,416,921 $ 58,345,690
112, 596, 747
15, 782, 620
188, 796, 288
(68, 563, 235)
120, 233, 053
2.881.021
108,860,825
15.062.278
182,268,793
(63, 372, 738)
118,896,055
4.706.276
$ 123,114,014 $ 123,W2,331
2015
$ 54,721,615
107, 005, 578
13, 887, 881
175, 615, 074
(58, 042,448)
117,572,626
4,844,042
$ 122,416,668
Net capital assets (additions, less retirements and depreciation) remained nearly flat in 2017 compared to
2016 respectfully. The District ended 2017 with decreased construction work in progress of $2.9 million
compared to $4.7 million in 2016; the mainline replacement project in 2017 was completed earlier than prior
years enabling the District to capitalize on it in 2017. Electric and Water Utility distribution assets in 2017
were both replaced at a slightly faster pace than accumulated depreciation.
LONG-TERM DEBT
Long-term debt includes revenue bonds and notes payable. At December 31, 2017, 2016, and 2015, the
District had $64.0 million, $68.1 million, and $72.0 million, respectively, in long-term debt outstanding, net
current maturities.
No new debt was issued in 2017.
CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT
The financial report is designed to provide readers with a general overview of the District's finances and to
demonstrate the District's accountability for the money it receives. If you have questions about this report
or need additional financial information, contact:
Truckee Donner Public Utility District
Attn: Treasurer
11570 Donner Pass Road
Truckee, CA 96161
See accompanying auditors' report.
Page 8
FINANCIAL STATEMENTS
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF NET POSITION
December 31, 2017 and 2016
ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
2017
2016
CURRENT ASSETS
Cash Funds
Operating
$ 8,986,612 $
8,364,055
Designated
13, 710, 369
10, 759, 538
Restricted
7,846,356
7,116,914
Total Cash Funds
30,543,337
26,240,507
Accounts receivable, net
9,155,016
8,214,532
Unbilled revenues
2,629,457
2,911,201
Accrued interest receivable
76,932
96,746
Materials and supplies
677,896
656,981
Prepaid expenses
633,191
459,264
Other
93,637
96,365
Total Current Assets
43,809,466
38,675,596
NON -CURRENT ASSETS
Other Non -Current Assets
Restricted investment fund 1,818,513 1,876,032
Special assessments receivable 3,005,178 3,692,876
Other 843,086 925,520
Total Other Non -Current Assets 5,666,777 6,494,428
DEFERRED OUTFLOWS OF RESOURCES
Pension 3,651,391 4,005,050
Unamortized loss on refunding 576,778 609,580
Unamortized redemption premium 122,673 149,934
Total Deferred Outflows of Resources 4,350,842 4,764,564
CAPITAL ASSETS
Utility plant
188,796,288
182,268,793
Accumulated depreciation
(68,563,235)
(63,372,738)
Construction work in progress
2,881,021
4,706,276
Total Capital Assets
123,114,074
123,602,331
TOTAL ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
$ 176,941,159 $
173,536,919
The accompanying notes are an integral part of these consolidated financial statements.
Page 10
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF NET POSITION
December 31, 2017 and 2016
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND NET POSITION
CURRENT LIABILITIES
Other Liabilities
Accounts payable
Customer deposits
Other
Total Other Liabilities
Current Liabilities Payable From Restricted Assets
Current portion of long-term debt
Accrued interest payable
Total Current Liabilities Payable from Restricted Assets
Total Current Liabilities
NON -CURRENT LIABILITIES
Long-term debt, net of discounts and premiums
Net pension liability
OPEB liability
Installment loans
Unearned revenues
Total Non -Current Liabilities
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Pension
Total Deferred Inflows of Resources
NET POSITION
Net investment in capital assets
Restricted for debt service
Unrestricted
Total Net Position
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND NET POSITION
2017
2016
$ 2,345,746 $
2,506,514
488,196
468,168
994,615
918,577
3,828,557
3,893,259
4,439,214
4,129,843
902,891
875,332
5,342,105
5,005,175
9,170, 662
8,898,434
63,984,552
68,029,920
11, 975, 655
10, 250, 329
1,116, 568
719,217
47,745
58,403
5,236,402
4,735,348
A7 qrn Q99
Aq 7Qq 917
Q1 C;ql FRB Q9 Ral RF1
551,932 1,597,126
1;1;1 aT? 1 1;Q7 17F
55, 267, 086 52, 052,148
9,288,950 8,773,009
gn An1 rn7 1A d77 QAF
$ 176, 941,159 $ 173, 536, 919
The accompanying notes are an integral part of these consolidated financial statements.
Page 11
THIS PAGE IS INTENTIONALLY LEFT BLANK
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
December 31, 2017 and 2016
2017 2016
OPERATING REVENUES
Sales to customers $ 34,462,146 $ 33,026,587
Standby fees 154,970 160,670
Cap and trade proceeds 1,140, 372 1,172,306
Other 2,577,865 1,244,146
Total Operating Revenues 38,335,353 35,603,709
OPERATING EXPENSES
Purchased power
11,327,300
11,511,308
Operations and maintenance
8,681,718
6,951,273
Consumer services
2,302,501
2,130,422
Administration and general
4,192,012
4,331,827
Pension expense
2,269,610
1,220,591
OPEB expense
397,350
719,218
Depreciation
6,531,640
6,237,033
Total Operating Expenses
35,702,131
33,101,672
Operating Income
2,633,222
2,502,037
NON -OPERATING REVENUE (EXPENSES)
Special tax revenue
3,342,077
3,290,186
Investment income
420,490
390,310
Interest expense
(2,868,084)
(3,060,079)
Amortization
(38,250)
(17,804)
Other non -operating revenues
42,057
63,008
Other non -operating expenses
(26,377)
(150,000)
Gain (loss) on disposition of assets
7,538
(1,514)
Total Non -Operating Revenue (Expenses)
879,451
514,107
Income Before Contributions
3,512,673
3,016,144
CAPITAL & OTHER CONTRIBUTIONS
2,096,828
1,699,110
CHANGE IN NET POSITION
5,609,501
4,715,254
Net Position - Beginning of Year
79,248,142
74,532,888
NET POSITION - END OF YEAR
$ 84,857,643
$ 79,248,142
The accompanying notes are an integral part of these consolidated financial statements.
Page 13
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF CASH FLOWS
December 31, 2017 and 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Received from customers
Paid to suppliers for goods and services
Paid to employees for services
Net Cash Flows from Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Debt issuance costs
Proceeds from refunding
Principal payments on long-term debt
Interest payments on long-term debt
Net Cash Flows from Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital expenditures for utility plant
Cost of disposal of property net of salvage
Capital contributions, connection and facility fees
Special assessments receipts
Special tax receipts
Debt issuance costs
Proceeds from refunding
Principal payments on long-term debt
Interest payments on long-term debt
Cash Flows From Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received
Cash Flows from Investing Activities
Net Change in Cash and Cash Equivalents
CASH AND CASH EQUIVALENTS — Beginning of Year
CASH AND CASH EQUIVALENTS — END OF YEAR
NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
2017 2016
$ 37, 790, 910 $ 35,177, 778
(20,134,075) (19,476,138)
(7,486,250) (6,432,772)
10.170.585 9.268.868
78,838
5,353,413
(404,000) (6,102,838)
(63,590) (250,584)
(467,590) (921,171)
(5,381,950) (7,421,152)
(126,018)
(78,431)
1,805,481
1,356,731
687,698
670,914
3,211,853
2,808,756
-
66,240
-
3,128,760
(3,347,860)
(6,361,159)
(2.749.920)
(2.824.278)
t5,yuu,i ie) tu,e5,5,eiy)
531,551
531.551
4,333,830
26.260.954
418,963
418,963
113,041
26.147.913
$ 30, 594, 784 $ 26, 260, 954
Developer and customer added capital assets $ 871,918 $ 189,176
Recognition of prior period unearned revenues $ 3,038,924 $ 3,414,080
The accompanying notes are an integral part of these consolidated financial statements.
Page 14
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF CASH FLOWS
December 31, 2017 and 2016
2017
2016
RECONCILIATION OF OPERATING INCOME TO NET CASH
FLOWS FROM OPERATING ACTIVITIES
Operating income
$
2,633,222
$
2,502,037
Noncash items included in operating income
Depreciation and amortization
6,531,640
6,237,033
Depreciation charged to other accounts
344,042
264,368
Pension expense - GASB 68
2,269,611
1,180,590
Deferred Pension Contributions - GASB 68
(1,235,820)
(1,061,245)
OPEB
397,350
719,218
Changes in assets and liabilities
Accounts receivable and unbilled revenues
(592,348)
(325,520)
Materials and supplies
(20,915)
(17,539)
Prepaid expenses and other current assets
(173,927)
(22,362)
Accounts payable
(160,769)
(476,588)
Customer deposits
20,027
44,668
Other current liabilites
158,472
224,208
NET CASH FLOWS FROM OPERATING ACTIVITES
$
10,170,585
$
9,268,868
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE BALANCE SHEET
Operating
$
8,986,612
$
8,364,055
Designated
13, 710, 369
10, 759, 538
Restricted funds - current
7,846,356
7,116,914
Restricted funds - non -current
1,818,513
1,876,032
Total Cash and Investments
32,361,850
28,116,539
Less: Long-term investments
(1,698,880)
(1,698,880)
Mark to market adjustments
(68,186)
(156,705)
TOTAL CASH AND CASH EQUIVALENTS
$
30,594,784
$
26,260,954
The accompanying notes are an integral part of these consolidated financial statements.
Page 15
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION
The Truckee Donner Public Utility District (the District) was formed and operates under the State of
California Public Utility District Act. The District is governed by a board of directors which consists of five
elected members. The District provides electric and water service to portions of Nevada and Placer
Counties described as Truckee. The electric and water service operations are separately maintained and
operated. These financial statements reflect the combined electric and water operations of the District. All
significant transactions between electric and water operations have been eliminated. These eliminations
include power purchases and rent for shared facilities.
The District's blended component units consist of organizations whose respective governing boards are
comprised entirely of the members of the District's Board of Directors. These organizations are reported as
if they are a part of the District's operations. The entities are legally separate, however, in the case of the
Truckee Donner Public Utility District Financing Corporation, financial support has been pledged and
financial and operational policies may be significantly influenced by the District. The following is a
description of the District's blended component units:
Truckee Donner Public Utility District Financing Corporation is a legal entity that was created to
issue and administer Certificates of Participation on behalf of the District. (See note 5).
Truckee Donner Public Utility District Community Facilities District No. 03-1 (Old Greenwood) is a
legal entity created to issue special tax bonds to finance various public improvements needed to
develop property located within Old Greenwood. (See note 7).
Truckee Donner Public Utility District Community Facilities District No. 04-1 (Gray's Crossing) is a
legal entity created to issue special tax bonds to finance various public improvements needed to
develop property located within Gray's Crossing. (See note 7).
Separate standalone financial statements are not available for the blended component units
described above. Unless noted, disclosures relating to the component units are the same as for
the District.
B. ACCOUNTING POLICIES
The financial statements of the District have been prepared in conformity with accounting principles
generally accepted in the United States of America. The Governmental Accounting Standards Board
(GASB) is the accepted standard setting body for establishing governmental accounting and financial
reporting principles.
The financial statements are reported using the economic resources measurement focus and the accrual
basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and
expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains,
losses, assets and liabilities, that are a result of exchange and exchange like transactions, are recognized
when the exchange takes place.
Page 16
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. USE OF ESTIMATES
Preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
D. CASH AND CASH EQUIVALENTS
For the purpose of the accompanying statement of cash flows, the District considers all highly liquid
instruments with original maturities of three months or less when purchased to be cash equivalents and are
shown in the financial statements as "Cash Funds".
E. INVESTMENTS
The District pools cash and investments. The District's investment policy allows for investments in
instruments permitted by the California Government Code and/or the investments permitted by the trust
agreements on District financing. The District's investment policy contains provisions intended to limit the
District's exposure to interest rate risk, credit risk, and concentration of credit risk. Investment income from
pooled investments is allocated to all funds in the pool. Interest is allocated on the basis of month end cash
amounts for each fund as a percentage of the total balance.
The District categorizes the fair value measurements of its investments based on the hierarchy established
by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on
the valuation inputs used to measure an assets fair value: Level 1 inputs are quoted prices in active markets
for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant
unobservable inputs. The District does not have any investments that are measured using Level 3 inputs.
F. DESIGNATED ASSETS
The board has designated certain resources for future capital projects, replacements, and operational
needs.
G. RESTRICTED ASSETS
Restricted assets are assets restricted by the covenants of long-term financial arrangements or other third
party legal restrictions. Restricted assets are used in accordance with their requirements and where both
restricted and unrestricted resources are available for use, restricted resources are used first and then
unrestricted as they are needed.
H. ACCOUNTS RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS
Accounts receivable are recorded at the invoiced amount and are reported net of allowances for doubtful
accounts of $25,200 and $34,300 for 2017 and 2016, respectively.
I. MATERIALS AND SUPPLIES
Materials and supplies are recorded at average cost.
Page 17
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J. DEBT PREMIUM, BOND ISSUANCE COSTS, AND DISCOUNTS
Original issue and reacquired bond premiums and discounts relating to revenue bonds are amortized over
the terms of the respective bond issues using the effective interest method. Debt issuance costs are
expensed in the period incurred.
K. SPECIAL ASSESSMENT RECEIVABLE
Special assessment receivable represent amounts due from property owners within the Donner Lake
Assessment District for improvements made by the District pursuant to an agreement with the property
owners to improve their water quality as discussed in note 8.
L. AMORTIZED EXPENSES
In 2003, the District entered into a broadband dark fiber maintenance agreement with Sierra Pacific
Communications (SPC) which is included in the line item "other non -current assets" in the accompanying
Statement of Net Position. SPC subsequently assigned the agreement to AT&T. The agreement is expected
to provide benefit to the District over the estimated 20-year life of the agreement. (See note 4).
M. CAPITAL ASSETS
Capital assets are generally defined by the District as assets with an initial, individual cost of more than
$10,000 and an estimated useful life of at least two years.
Capital assets of the District are stated at the lower of cost or the acquisition value at the time of contribution
to the District. Major outlays for plant are capitalized as projects are constructed. Depreciation on capital
assets is calculated using the straight-line method over the estimated useful lives of the assets, which are
as follows:
Distribution Plant
Electric 23 — 35 years
Water 15 — 40 years
Computer software and hardware 3 — 7 years
Building and improvements 20 — 33 years
Equipment and furniture 4 — 10 years
It is the District's policy to capitalize interest paid on debt incurred for significant construction projects while
those projects are under construction, less any interest earned on related unspent debt proceeds. No new
debt related to capital assets was issued in 2017 and 2016; no interest was capitalized in 2017 or in 2016.
N. COMPENSATED ABSENCES
Under terms of employment, employees are granted sick leave and vacations in varying amounts. Only
benefits considered to be vested are disclosed in these statements. Vested vacation and sick leave pay is
accrued when earned in the financial statements. The liability is liquidated from general operating revenues
of the utility.
Page 18
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
O. REVENUE RECOGNITION
Unbilled revenues, representing estimated consumer usage for the period between the last meter reading
and the end of the period, are accrued in the period of consumption. Water customers without meters are
billed on a flat -rate basis, and revenues are recorded as billed. Revenues from connection fees are
recognized upon completion of the connection. Income that the District has earned through investing its
excess cash is reflected within income from investments when earned.
P. REVENUE AND EXPENSE CLASSIFICATION
The District distinguishes operating revenues and expenses from non -operating items in the preparation of
its financial statements. Operating revenues and expenses generally result from providing electric and
water services in connection with the District's principal ongoing operations. The principal operating
revenues are sales to customers. The District's operating expenses include power purchases, labor,
materials, services, and other expenses related to the delivery of electric and water services. All revenues
and expenses not meeting this definition are reported as non -operating revenues and expenses, or capital
contributions and other.
Q. POWER PURCHASES AND TRANSMISSION
In 1999, the District entered into an agreement with Sierra Pacific Power Company dba NV Energy (SPPC),
whereby SPPC will provide transmission services to the District through December 31, 2027. In addition,
the District purchases scheduling services from Utah Municipal Power Systems and the scheduling services
are included in the monthly power billings from UAMPS. The purchase of transmission services from NV
Energy represented 4.4% and 6.1 % of total purchased power costs in 2016 and 2017, respectively.
In December of 2005, the District entered into an agreement with UAMPS. Subsequently, the District
entered into many pooling appendices for power capacity and energy that relate to various time periods
from January 2008 through March 2028. Also in 2009, the District signed an agreement with UAMPS for
approximately 5 MW of the Nebo natural gas generation plant capacity. In August 2012, the Horse Butte
Wind project began commercial operation and the District owns approximately 15 MW of nameplate
capacity that generates about 5 MW on average. The District has also invested in the Veyo Heat Recovery
project that came on line in mid-2016. The District will expect about 1.7 MW of carbon free generation from
this generation source.
In August of 2007, the District entered into an agreement with Western Area Power Administration (WAPA)
for the delivery of Stampede Dam Hydro generation. In accordance with this agreement, the District is
entitled to a portion of the power generated by the Stampede Dam Hydro generation. This generation is
dependent upon the amount of water that is made available to the generator. This agreement is effective
through 2024.
In 2017 and 2016, the UAMPS contract, along with its appendices, and the WAPA contract for Stampede
Dam Hydro comprised the majority of a diversified power portfolio that balanced risk and cost for the District.
Page 19
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
R. CAP AND TRADE PROGRAM PROCEEDS
California Assembly Bill 32 (AB32) is an effort by the State of California to set a 2020 greenhouse gas
(GHG) emissions reduction goal into law. AB32 requires California to lower greenhouse gas emissions to
1990 levels by 2020. Central to this initiative is the implementation of a cap and trade program, which covers
major sources of GHG emissions in the State including power plants. The California Cap and Trade
Program is designed to achieve cost-effective emissions reductions across the capped sectors. The
program sets maximum statewide GHG emissions for all covered sectors each year ("cap"), and allows
covered entities to sell off allowances ("trade"). An allowance is a tradable permit that allows the emission
of one metric ton of CO2. The California carbon price is driven by allowance trading. The District is subject
to AB32 and has excess allowances due to reducing carbon -based generation in its power portfolio.
In 2017 and 2016, the District sold its excess allowances in the program auctions and the proceeds were
recorded as $1,140,372 and $1,172,306 operating revenue for the respective years. The auction proceeds
are held in a restricted fund and are used to purchase qualified renewable power (See note 2).
S. INCOME TAXES
As a government agency, the District is exempt from payment of federal and state income taxes.
T. TAX REVENUES
Beginning in 2004, the District levied ad valorem property tax on all the taxable property within the Old
Greenwood District in an amount sufficient to pay the yearly principal and interest on the Special
Assessment District Tax Bonds. (See notes 5 and 7). The District had revenues of $683,217 in 2017 and
$670,762 in 2016.
On January 28, 2014, refunding bonds were sold to a private investment firm and the proceeds were used
to call the 2003 Old Greenwood bonds on March 1, 2014. The 2014 refunding bonds have the same rate
and method of apportionment conditions on the Old Greenwood properties as the original 2003 bonds.
Beginning in 2005, the District levied ad valorem property tax on all taxable property within the Gray's
Crossing District in an amount sufficient to pay the yearly principal and interest on the Special Assessment
District Tax Bonds. (See notes 5 and 7). The District had revenues of $2,560,949 in 2017 and $2,619,424
in 2016.
Taxes are assessed based on the county tax year ending June 30, resulting in unearned revenues for each
of the community facility districts. (See note 6).
U. CONTRIBUTED CAPITAL ASSETS
A portion of the District's capital assets have been obtained through amounts charged to developers for
plant constructed by the District; direct contributions of capital assets from developers and other parties; as
well as assessments of local property owners. These items are recognized within capital assets as
construction is completed for plant constructed by the District based on the cost of the items, when received
for contributed capital assets based on the actual or estimated fair value of the contributed items, or upon
completion of the related project for development agreements. The District records amounts received within
capital contributions when a legally enforceable claim is established. Until the District meets the criteria to
Page 20
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
record the amounts described above as capital contributions, any amounts received are recorded within
unearned revenues on the Statement of Net Position.
V. OTHER— PENSION SIDEFUND
As a result of implementing GASB Statement No. 68, the pension side -fund payoff that occurred in 2011
and which had been reported in the financial statements as an asset was written off due to the District's
participation in CaIPERS cost -sharing multi -employer retirement benefit plan. However, the liability for the
payoff remains until paid in full thru 2022. The intercompany fund transfers for the principal portion of the
debt service between the electric and water utility is included as "other."
W. PENSION
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of the District's California Public
Employee's Retirement System (CaIPERS) plans (Plans) and the additions to/deductions from the Plans'
fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this
purpose, benefit payments (including refunds of employee contributions) are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
X. RECENT ACCOUNTING PRONOUNCEMENTS IMPLEMENTED BY THE DISTRICT
In March 2016, GASB issued Statement No. 82, Pension Issues, an amendment of GASB Statements No.
67, No. 68, and No. 73. The primary objective of this statement is to address issues regarding (1)
presentation of payroll -related measures in required supplementary information, (2) selection of
assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for
financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee
(plan member) contribution requirements. The District implemented the statement in the current year.
Page 21
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Y. DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES
Consists of deferrals for changes in the net pension liability as defined under GASB Statement No. 68.
Z. UNAMORTIZED LOSS ON BOND REFUNDING
For current and advanced refunding results in defeasance of debt, the difference between the reacquisition
price and the net carrying amount of the old debt (Gain or loss) is deferred and amortized as a component
of interest expense over the remaining life of the old debt or the new debt, whichever is shorter. These
amounts are reported as deferred outflow on the statements of net position.
AA. ACCOUNTING PRONOUNCEMENTS TO BE IMPLEMENTED /N UPCOMING YEARS
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions, addresses accounting and financial reporting for OPEB that is provided to the employees of state
and local governmental employers. This Statement establishes standards for recognizing and measuring
liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. This
statement is effective for the District fiscal year ending December 31, 2018. The District has elected not to
implement GASB Statement No. 75 early and has not determined its effect on the District's financial
statements.
GASB Statement No. 83, Certain Asset Retirement Obligations, addresses accounting and financial
reporting for certain asset retirement obligations (ARO's). The District has not determined what impact, if
any, this pronouncement will have on the financial statements. Application of this statement is effective for
the District's fiscal year ending December 31, 2019.
GASB Statement No. 87, Leases, addresses accounting and financial reporting for leases by governments.
This Statement increases the usefulness of financials statements by requiring recognition of certain lease
assets and liabilities for leases that previously were classified as operating leases by establishing a single
model of lease accounting based on the foundational principle that leases are financings of the right to use
an underlying asset. Under this statement, a lessee is required to recognize a lease liability and intangible
right -to -use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of
resources, thereby enhancing the relevance and consistency of information about leasing activities. The
District has not determined what impact, if any, this pronouncement will have on the financial statements.
This statement is effective for the District fiscal year ending December 31, 2020.
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS
Cash, cash equivalents and investments are recorded in accounts as either restricted or unrestricted as
required by the District's certificates of participation indentures or other third -party legal restrictions.
Restricted assets represent funds that are restricted by certificates of participation covenants or third party
contractual agreements. Assets that are allocated by resolution of the Board of Directors are considered to
be Board designated assets. Board designated assets are a component of unrestricted assets as their use
may be redirected at any time by approval of the Board. Upon Board approval, assets from board
designated accounts may be used to pay for selected capital projects. Such accounts have been designated
by the Board for the following purposes:
Page 22
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
Electric Capital Replacement
Starting in 2009, the Board set aside funds designated for future electric infrastructure replacement.
Electric Vehicle Reserve
Beginning in 2009, the Board set aside funds designated for future electric utility vehicle
replacements.
Electric Rate Reserve
In compliance with Board rules, the District created an electric rate stabilization fund in anticipation
of future costs. During both 2017 and 2016, there was no utilization of these funds to offset
increased power costs in lieu of raising electric rates.
Reserve for Future Meters
Prior to 1992, connection fees charged to applicants for water service included an amount, which
was maintained in a designated fund, to offset the cost of future metering. In 2008, the Board
adopted an ordinance to charge a $5 monthly surcharge to all customers of treated water beginning
January 2009 through December 2013. Water meters and automated meter reading devices are
being installed, and customers will be billed volumetrically in accordance with California Assembly
Bill 2572. As meters are installed, these funds are used to pay for related costs.
Water Vehicle Reserve
Beginning in 2009, the Board set aside funds designated for future Water Utility vehicle
replacements.
Prepaid Connection Fees
In compliance with Board rules, the District has set aside prepaid connection fees to cover
installation costs of water services.
Debt Service Coverage and Operating Reserve Fund
Effective 2007, the Board has voluntarily set aside funds to improve the District's cash -to -debt -
service ratio. In 2017, no funds were used.
Donner Lake Assessment District Surcharge Fund
The District established a monthly billing surcharge in the amount of $6.65 applicable to customers
in the Donner Lake area to provide revenue to pay the remainder of the cost of reconstruction
effective October 2006.
Deferred Liabilities Reserve
Starting in 2017, the Board established a reserve to protect the District from volatility in pension,
other post -employment benefits, and worker's compensation premiums.
Page 23
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
As of December 31, Board designated accounts at fair value consisted of the following:
2017
2016
Electric capital replacement fund $
4,035,103
$ 3,428,130
Electric vehicle reserve
602,706
378,880
Electric rate reserve
5,449,424
4,400,251
Electric deferred liabilites reserve
1,000,000
-
Reserve for future meters
507,653
533,777
Water vehicle reserve
60,897
-
Prepaid connection fees
80,261
79,181
Debt service & operating reserve fund
1,869,954
1,847,559
Donner Lake Assessment District surcharge fund
104,371
91,760
Totals $ 13, 710, 369
$ 10, 759, 538
Certain assets have been restricted by bond covenants or third party contractual agreements for the
following purposes:
Certificates of Participation
Prepayments to the Trustee from the District for upcoming debt payments.
Special Tax Bonds: Gray's Crossing
The terms of the special tax bonds issued for the Mello -Roos Community Facilities Districts (CFD)
require reserve funds as security for each principal and interest payment as they come due.
Reserve funds are set aside as prescribed in the loan documents. These reserve funds are held
by Bank of New York Mellon Trust Company.
Facilities Fees
The District charges facilities fees to applicants for new service to cover the costs of infrastructure
needed to meet their systems demand. The use of such funds is restricted by California state law.
Department of Water Resources (DWR) Prop 55 Reserve Fund
Regulations relating to the Department of Water Resources loan require the accumulation of a
reserve fund as security for each principal and interest payment as they come due. Annual
payments into the fund were required for each of the first ten years beginning April 1, 1996. The
total reserve fund equals two semi-annual payments and was fully funded during 2006. These funds
are set aside for the life of the borrowed amount. All of the reserve funds are invested in the State
of California Local Agency Investment Fund.
Page 24
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
Glenshire Escrow Account
The District received cash and other assets as part of its acquisition of the Glenshire Mutual Water
Company. Also, the District received a monthly water system upgrade surcharge from Glenshire
residents until November 30, 2017. This cash was utilized to pay the installment loan related to the
Glenshire water system improvements as specified in the terms of the acquisition agreement.
In 2011, the District sold a parcel from the Glenshire Mutual Water Company assets. The net
proceeds of $294,940 were transferred to the Glenshire Escrow Account and the monthly water
system upgrade surcharge was reduced from $10.75 to $4.75.
In 2017, the final debt payment was made and the surcharge ended.
Donner Lake Special Assessment District Improvement and Reserve Fund
The District established the Donner Lake Special Assessment District (DLAD) Improvement Fund
to account for all funds received from the Special Assessment Receivable, which will be used to
pay the debt service costs related to the Donner Lake Water System project. The DLAD
Improvement Fund also has a reserve fund as required by the California — Safe Drinking Water —
State Revolving Fund (SRF). This fund is required to set aside $40,043 semi-annually for ten years
beginning in 2006. The reserve fund was fully funded as of December 31, 2016.
AB32 Cap and Trade Auction Fund
The District electric utility is identified as an "Electric Distribution Utility" under the Cap and Trade
regulations and is therefore eligible to receive a direct allocation of allowances that can be sold in
an auction. The proceeds from quarterly allowance auctions are held in this restricted fund and
are used to purchase qualified renewable power. These funds are intended to mitigate the burden
on the consumer without impacting a carbon price signal.
Other (Area Improvement Funds)
The District received funds from the County of Nevada, which are to be used only for improvements
to specific areas within the District's boundaries in Nevada County. These areas include various
Nevada County assessment districts.
Page 25
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
As of December 31, restricted cash and cash equivalents and investments at fair value consisted of the
following:
2017
2016
Certificates of Participation
$
1,020,999
$
537,586
Special tax bonds
3,015,361
2,823,629
Facilities fees
671,866
607,235
DWR-Prop 55 reserve fund
319,873
315,571
Glenshire escrow accounts
-
95,695
Donner Lake Special Assessment District improvement
2,634,240
2,593,139
Donner Lake Special Assessment District reserve fund
811,765
804,801
AB 32 Cap and Trade Auction fund
1,137,796
1,163,035
Other (area improvement funds)
52,969
52,256
Total Restricted Cash and Cash
Equivalents and Investments
$
9,664,869
$
8,992,947
Cash and investments are comprised of the following cash and
cash equivalents
and investments
as of
December 31:
2017
2016
Cash and cash equivalents
$
30,543,337
$
26,240,507
Investments —government bonds
1,818,513
1,876,032
Totals
$
32,361,850
$
28,116,539
Cash and cash equivalents and investments were $32,361,850 and $28,116,539 at December 31, 2017
and 2016, respectively. Cash equivalents substantially consist of deposits in the state pooled fund, Placer
County pooled fund, money market funds and investments.
Adjustments necessary to record investments at fair market value are recorded in the operating statement
as increases or decreases in investment income. Market values may have changed significantly after year
end.
FAIR VALUE MEASUREMENT
The District applies the provisions of Governmental Accounting Standards Board (GASB) Statement No.
72, Fair Value Measurement and Application, which requires governmental entities, to report certain
investments at fair value on the Statements of Net Position.
Investments are valued at fair value at December 31. Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The District categorizes its fair value measurements within the fair value
hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation
inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices for identical instruments
in active markets. Level 2 inputs are quoted prices for similar instruments in active markets; quoted prices
Page 26
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
for identical or similar instruments in markets that are not active; and model derived valuations in which all
significant inputs are observable. Level 3 inputs are valuations derived from valuation techniques in which
significant inputs are unobservable.
The District classifies its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The District has the following fair value measurements as of December
31, 2017:
US Government bonds and cash equivalents are valued using observable inputs (Level 2
inputs).
INVESTMENTS AUTHORIZED BY THE DISTRICT'S INVESTMENT POLICY
The District adopted an investment policy in 2006 which allowed for investments in instruments permitted
by the California Government Code and/or the investments permitted by the trust agreements on District
financing, including investments in the local government investment fund pool administered by the State of
California (LAIF), Placer County Treasurer's Investment Portfolio (PCTIP) pooled investment and Utah
Public Treasurers' Investment Fund (UPTIF). The District's investment policy contains provisions intended
to limit the District's exposure to interest rate risk, credit risk, and concentration of credit risk. At December
31, 2017 and 2016 the District's deposits and investments at fair value were held as follows:
Cash on hand
Deposits
LAIF
PCTIP
UPTIF
Money Market Funds
Government Bonds
Totals
DISCLOSURES RELATING TO INTEREST RATE RISK
2017
$ 2,400
1,083,310
11, 709,151
7,933,761
7,446, 510
2,368,205
1,818,513
2016
$ 2,400
964,122
9,785,017
6,853,226
6,944,706
1,691,036
1,876,032
$ 32, 361, 850 $ 28,116, 539
Interest rate risk is the risk that changes in the market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater is the sensitivity of its fair value
to changes in market interest rates. Information about the sensitivity of the fair values of the District's
investments to market interest rate fluctuations is provided by the following table that shows the District's
investments by maturity for 2017 and 2016:
Investments and Deposits
Maturity
LAIF
3 months or less
PCTIP
3 months or less
UPTIF
3 months or less
Federated U.S. Treasury Cash Reserve
3 months or less
Morgan Stanley Treasury
3 months or less
Fidelity Money Market Government Portfolio 57
3 months or less
Dreyfus Treasury Securities
3 months or less
Federal Farm Credit Banks
03/02/2021
Page 27
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
DISCLOSURES RELATING TO CREDIT RISK
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating
organization. LAIF, PCTIF and UPTIF do not have a rating provided by a nationally recognized statistical
rating organization. The Morgan Stanley Treasury is rated AAAm by S&P and Aaa-mf by Moody's. The
Federated U.S. Treasury Cash Reserve is rated AAAm by S&P and Aaa-mf by Moody's. Federal Farm
Credit Banks is rated AA+ by S&P and Aaa by Moody's. The Dreyfus Treasury Securities is rated Aaa-mf
by Moody's and AAAm by S&P. The Fidelity Money Market is rated AAA-mf by Moody's and AAAm by S&P.
CUSTODIAL CREDIT RISK
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution,
a government will not be able to recover its deposits or will not be able to recover collateral securities that
are in the possession of an outside party. The District's investment policy does not contain legal or policy
requirements that would limit the exposure to custodial credit risk for deposits. However, the California
Government Code requires that a financial institution secure deposits made by state or local governmental
units by pledging securities in an undivided collateral pool held by a depository regulated under state law
(unless waived by the government unit). The market value of pledged securities in the collateral pool must
equal at least 110% of the total amount deposited by the public agencies.
As of December 31, 2017 and 2016 all deposits were fully insured or collateralized.
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g.,
broker/dealer) to a transaction, a government will not be able to recover the value of its investment or
collateral securities that are in the possession of another party. The California Government Code and the
District's investment policy do not contain legal or policy requirements that would limit the exposure to
custodial credit risk for investments. With respect to investments, custodial credit risk generally applies
only to direct investments in marketable securities. Custodial credit risk does not apply to a local
government's indirect investment in securities through the use of mutual funds or governmental investment
pools (such as LAIF).
DEPOSIT IN STATE INVESTMENT POOL
The District is a voluntary participant in the Local Agency Investment Fund (LAIF). This investment fund
has an equity interest in the State of California's (State's) Pooled Money Investment Account (PMIA). PMIA
funds are on deposit with the State's Centralized Treasury System and are managed in compliance with
the California Government Code according to a statement of investment policy which sets forth permitted
investment vehicles, liquidity parameters, and maximum maturity of investments. The fair value of the
District's investment in this pool is reported in the accompanying financial statements at amounts based
upon the District's pro-rata share of the fair value provided by the LAIF for the entire LAIF portfolio (in
relation to the amortized cost of the portfolio). The balance available for withdrawal is based on the
accounting records maintained by the LAIF, which are recorded on an amortized cost basis.
Page 28
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
DEPOSIT IN PLACER COUNTY TREASURER INVESTMENT POOL
The District is a voluntary participant in the Placer County Investment Portfolio (PCTIP). The District is
eligible to participate in PCTIP because a portion of the District's service area is in Placer County.
Investments are on deposit with the Placer County Treasurer and are managed in compliance with the
California Government Code according to a statement of investment policy which sets forth permitted
investment vehicles, liquidity parameters, and maximum maturity of investments. The fair value of the
District's investment in this pool is reported in the accompanying financial statements at amounts based
upon the District's pro-rata share of the fair value provided by Placer County Treasurer for the entire PCTIP
(in relation to the amortized cost of the portfolio). The balance available for withdrawal is based on the
accounting records maintained by the Placer County Treasurer, which are recorded on an amortized cost
basis.
DEPOSIT IN UTAH PUBLIC TREASURERS' INVESTMENT FUND
The District is a voluntary participant in the Utah Public Treasurers' Investment Fund (UPTIF). The District
is eligible to participate in (UPTIF) through its membership with Utah Associated Municipal Power Systems
(UAMPS). Investments are on deposit with State of Utah public treasury and investments are restricted to
those authorized by the Utah Money Management Act and rules of the Money Management Council of
Utah. The fair value of the District's investments in this pool is reported in the accompanying financial
statements at amounts based upon the District's pro-rata share of the fair value provided by UPTIF through
UAMPS Member Retention Fund.
NOTE 3 — CAPITAL ASSETS
Capital assets consist of the following at December 31, 2017 and 2016:
January 1,
December 31,
2017
Additions
Reductions
2017
Electric distribution facilities
$ 58,345,690
$
2,191,342
$
(120,111)
$ 60,416,921
Water distribution facilities
108,860,825
4,898,966
(1,163,044)
112,596,747
General plant
15,062,278
988,813
(268,471)
15,782,620
182,268,793
8,079,121
(1,551,626)
188,796,288
Less: Accumulated depreciation
(63,372,738)
(6,840,212)
1,649,716
(68,563,235)
Construction work in progress
4,706,276
5,554,478
(7,379,733)
2,881,021
Totals
$ 123,602,331
$
6,793,387
$
(7,281,643)
123,114,074
January 1,
December 31,
2016
Additions
Reductions
2016
Electric distribution facilities
$ 54,721,615
$
4,391,867
$
(767,792)
$ 58,345,690
Water distribution facilities
107,005,578
2,023,496
(168,249)
108,860,825
General plant
13,887,881
1,332,733
(158,336)
15,062,278
175,615,074
7,748,096
(1,094,377)
182,268,793
Less: Accumulated depreciation
(58,042,448)
(6,485,285)
1,154,994
(63,372,738)
Construction work in progress
4,844,042
7,686,181
(7,823,947)
4,706,276
Totals
$ 122,416,668
$
8,948,992
$
(7,763,330)
$ 123,602,331
Page 29
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 3 — CAPITAL ASSETS (Continued)
As of December 31, 2017 and 2016, the plant in service included land and land rights of $3,318,346 which
are not being depreciated.
A portion of the plant has been contributed to the District. When replacement is needed, the District replaces
the contributed plant with District -financed plant.
NOTE 4 — TELECOMMUNICATION SERVICES
In 1999, the District initiated a project to expand their basic service offerings to include internet access,
cable television and voice delivered over fiber optic networks (the broadband project). The District
completed the broadband design project and obtained the necessary regulatory approvals and franchises
needed to construct and launch the broadband project. A local cable television service provider filed an
objection in September 2004 with the Nevada County Local Agency Formation Commission (LAFCO), the
entity responsible for providing regulatory approval for the broadband project. After denying the cable
television provider's request for a reconsideration of their approval of the District's project, the cable
television provider filed a lawsuit against LAFCO. The District was not named in the lawsuit. A ruling on the
lawsuit was received in January 2006. LAFCO prevailed on all portions of the cable television provider's
claim. The cable television provider filed an appeal; however, in June of 2007, the Court ruled in favor of
LAFCO, upholding the initial ruling.
Since 2009, the District has been exploring options to sell or lease the existing infrastructure to provide a
return on investment in the project. Expenses incurred by the District to date on the broadband project total
$2,834,079, of which $496,990 was expensed in 2014 for legal fees and preliminary feasibility studies. In
2017 and 2016 there were no material expenditures for this project.
In 2018, The District signed a Memorandum of Understanding with Plumas Sierra Telecommunications to
offer services utilizing these four fibers from Reno to Sacramento in future years.
Page 30
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 5 — LONG-TERM DEBT
Long-term debt consisted of the following at December 31, 2017:
January 1, December 31, Due within
2017 Additions Reductions 2017 one year
Pension Obligation Bonds
Electric, 2.47%
due semi-annually to 2022
State RewhAng Fund Loan —
Water, 2.34%, due semi-annually
beginning in 2006 to 2026.
Special Tax Bonds — Mello
Roos, 4.18%, due
serially to 2032
Special Tax Bonds — Mello
Roos, 3.25% to 5.7%,
due serially to 2035 (net
unamortized discounts of $82,754)
Special Tax Bonds — Mello
Roos, 3.50% to 5.50%,
due serially to 2035 (net
unamortized discounts of$9,144)
Certificates of Participation —
Water, 4.00% to 5.00%,
due serially to 2021
refinanced in 2016
Certificates of Participation —
Water, 2.00% to 4.00%,
due serially to 2035 (net
premiums of $475,059)
Department of Water Resources,
3.18%, due semiannually to
2021, secured by real
and personal property.
Installment loan, 4.58%
due serially to 2023
Totals
$ 5,149,000 $
6,786,402
9,811,500
$ (404,000) $ 4,745,000 $ 1,269,000
(645,806) 6,140,596 661,006
(308,800) 9,502,700 337,900
14,147,559
(255,313)
13,892,246
295,000
17,410,337
(354,481)
17,055,856
395,000
3,266,000
(632,000)
2,634,000
644,000
13,997,077
(562,018)
13,435,059
550,000
1,275,743
(268,092)
1,007,651
276,650
374,548
(316,145)
58,403
10,658
$ 72,218,166 $
$ (3,746,655)
$ 68,471,511 $
4,439,214
Page 31
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 5 — LONG-TERM DEBT (Continued)
Long-term debt consisted of the following at December 31, 2016:
January 1, December 31, Due within
2016 Additions Reductions 2016 one year
Pension Obligation Bonds
Electric, 5%
due semi-annually to 2022 $ 5,584,000 $ - $ (5,584,000) $ - $
refinanced in 2016
Pension Obligation Bonds
Electric, 2.47%
due semi-annually
-
5,589,000 (440,000)
5,149,000
809,000
State Rewlving Fund Loan —
Water, 2.34%, due semi-annually
beginning in 2006 to 2026
7,417,358
- (630,956)
6,786,402
645,807
Special Tax Bonds — Mello
Roos, 4.18%, due
serially to 2032
10,090,500
(279,000)
9,811,500
308,800
Special Tax Bonds — Mello
Roos, 3.25% to 5.7%,
due serially to 2035 (net
14,392,872
(245,313)
14,147,559
260,000
unamortized discounts of $96,815)
Special Tax Bonds — Mello
Roos, 3.50% to 5.50%,
due serially to 2035 (net
17,744,819
(334,481)
17,410,337
355,000
unamortized discounts of $10,697)
Certificates of Participation —
Water, 4.00% to 5.00%,
due serially to 2021
refinanced in 2016
3,765,000
- (3,765,000)
-
-
Certificates of Participation —
Water, 1.54%
due serially to 2021
-
3,266,000
3,266,000
632,000
Certificates of Participation —
Water, 2.00% to 4.00%,
due serially to 2035 (net
premiums of$502,077)
14,544,095
(547,018)
13,997,077
535,000
Department of Water Resources,
3.18%, due semiannually to
2021, secured by real
and personal property.
1,535,448
(259,705)
1,275,743
268,092
Installment loans, 5.4% to 6.23%,
various payment terms and
due dates, secured by
equipment.
673,789
(299,242)
374,548
316,144
Totals
$ 75,747,881
$ 8,855.000 $ (12,384,715)
$ 72,218,166 $
4,129,843
Page 32
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 5 — LONG-TERM DEBT (Continued)
During April 2004, the District obtained financing in the form of a State Revolving Fund Loan, the proceeds
of which were utilized in the replacement of the Donner Lake water system. The District submitted
expenditures to the State for reimbursement of $12,732,965. The semi-annual principal and interest
payments are $400,426 and commenced in 2006. In 2004, the remaining balance of $12,227,122 was used
to pay off the temporary lines of credit obtained in 2001 and 2002 to fund the Donner Lake project. (See
note 8).
During December 2003, the Old Greenwood Community Facilities District issued $12,445,000 of Special
Tax Bonds, the net proceeds of which were utilized to finance various public improvements for property
within Old Greenwood. (See note 7). The terms of the Special Tax Bonds call for debt service payments to
be provided solely by taxes levied on and collected from the owners of the taxable land within Old
Greenwood. The bonds are secured by land located within Old Greenwood.
In January 2014, the original 2003 bonds issued for the Old Greenwood Community Facilities District were
refunded (refinanced) by issuing 2014 bonds to a private investment firm at a lower rate, saving the property
owners in Old Greenwood over $3 million over the term of the bonds. The 2014 bonds did not require a
reserve fund. Therefore the reserve fund of the 2003 bonds was utilized to reduce the principal. The 2014
bonds have similar terms and have the same rate and method of apportionment for the Old Greenwood
parcel owners as the original 2003 bonds.
During 2005 and 2004 respectively, the Gray's Crossing Community Facilities District issued $15,375,000
and $19,155,000 of Special Tax Bonds, the net proceeds of which were utilized to finance various public
improvements for property within Gray's Crossing. (See note 7). The terms of the Special Tax Bonds call
for debt service payments to be provided solely by taxes levied on and collected from the owners of the
taxable land within Gray's Crossing. The bonds are secured by land located within Gray's Crossing.
On October 12, 2006, through the Truckee Donner Public Utility District Financing Corporation on behalf of
the District issued $26,570,000 of Certificates of Participation to refund 100% of the outstanding balance
of Certificates issued in 1996, complete the funding of the Donner Lake Assessment District water system,
and fund water system capital improvements. The refunding portion of the 2006 COP's, totaling $8,465,000,
has an average interest rate of 4.10%. The refunded 1996 COP's had an average interest rate of 5.41 %.
The net proceeds of $7,500,557 (after payment of $63,733 in underwriting fees, insurance and other
issuance costs) plus an additional $1,315,194 of reserve fund monies were used to prepay the outstanding
debt service requirements on the 1996 COP's. The terms of the Certificates call for payments to be made
only from the net revenues of the Water Division and the debt is secured by this revenue. These revenues
are required to be at least equal to 125% of the debt service for each year.
In 2015, a portion of the 2006 COP was refunded. Since a portion of the 2006 COP was used for advance
refunding of previous COP, that portion could not be advance refunded at the time of the refunding. The
new 2015 refunding did not require a reserve fund. The reserve fund was liquidated and applied towards
reducing the debt principal. The estimated net present value savings were $1,600,000 or 10% over the
remaining life of issuance.
In 2016, the remaining portion of the 2006 COP was refunded. Due to the refunding an estimated net
present value savings of $222,000 was achieved.
Page 33
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 5 — LONG-TERM DEBT (Continued)
Under the Safe Drinking Water Bond Law of 1986, the Department of Water Resources provided a
$5,000,000 loan to the District in 1993. The loan was to finance capital improvements to the public water
supply and to reduce water quality hazards. The terms of the loan call for payments to be made only from
the net revenues of the Water Division, which are required to be sufficient to pay the debt service for each
year.
In June 2011, the District refunded (refinanced) an existing $7.8 million pension side fund obligation for its
participation in CalPERS. Prior to 2011, the annual side fund payments were expensed and described in
the Notes to Financial Statements. The pension side fund liability was amortized through June 2022 with a
7.75% rate. This liability was not required to be reported on the District's Statement of Net Position, but the
future pension expense was included in budget and rate calculations. The new refunding rate of 5% reduced
the District's annual pension costs by almost $100,000 through 2022. In 2016, the District refunded the
pension side fund again earning the District annual savings of $30,000 or $164,000 in total.
As a normal part of its operations, the District finances the acquisition of certain assets through the use of
installment loans. These loans have been used to finance the purchase of vehicles, equipment, and certain
water system improvements. There were no additional installment loans in 2017 or in 2016.
Scheduled payments on debt are:
Principal
2018
$ 4,439,214
2019
4,263,421
2020
4,497,284
2021
4,579,633
2022
3,451,721
2023-2027
16, 370,176
2028-2032
19, 451, 900
2033-2037
11, 035, 001
$ 68, 088, 350
Plus: Unamortized premiums
475,059
Less: Unamortized discounts
(91,898)
$ 68,471,511
Interest
Total
$ 2,949,115
$ 7,388,329
2,768,928
7,032,349
2,638,097
7,135, 381
2,491,654
7,071,287
2,344,327
5,796,048
9,709,011
26, 079,187
5,796,875
25, 248, 775
1,148, 220
12,183, 221
$ 29, 846, 227 $ 97, 934, 577
Page 34
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 6 — UNEARNED REVENUES
Transactions that have not yet met revenue recognition requirements are recorded as a non -current liability
and reflected in the accompanying Statement of Net Position. As of December 31, 2017 and 2016,
unearned revenues consist of unearned special assessment revenues, development agreement deposits,
connection fees, and other deposits.
Unearned revenues consisted of the following at December 31, 2017 and 2016:
Unearned tax revenues
Development agreement deposits
Connection fees and other deposits
Totals
Unearned tax revenues
Development agreement deposits
Connection fees and other deposits
Totals
January 1,
2017
$ 1,661,841
2,237,331
836,177
Additions
$ 1,582,326
1,134,433
823,218
$ 4,735,348 $ 3,539,977
January 1,
2016
Additions
$ 1,628,346
$ 1,661,840
2,156,844
644,922
1,069,865
987,610
$ 4,855,055 $ 3,294,373
NOTE 7 — COMMUNITY FACILITIES DISTRICTS
Reductions
$ (1,661,841)
(603,342)
(773,741)
$ (3,038,923)
Reductions
$ (1,628,346)
(564,436)
(1,221,299)
$ (3,414,080)
December 31,
2017
$ 1,582,326
2,768,422
885,654
$ 5,236,402
December 31,
2016
$ 1,661,841
2,237,331
836,177
$ 4,735,348
In order to finance various public improvements needed to develop property within the Town of Truckee,
California, the District formed Community Facilities Districts (CFD), which issued Special Tax Bonds
pursuant to the Mello -Roos Community Facilities Act of 1982, as amended. Accordingly, the Bonds are
special obligations of the respective Community Facilities Districts and are payable solely from revenues
derived from taxes levied on and collected from the owners of the taxable land within the respective
Community Facilities Districts. These Special Tax Bonds are not general or special obligations of the
District. The Board of Directors of the District is the legislative body of the Communities Facilities Districts
and as such they approve the rates and method of apportionment of the special taxes. As improvements
were completed, the infrastructure was donated in the form of a capital contribution to the Town of Truckee,
the Truckee Sanitary District, Southwest Gas, and the District.
In December 2003, the Community Facilities District No. 03-1 (Old Greenwood) was formed and issued
$12,445,000 in Special Tax Bonds (the 03-1 Bonds). In January 2014, the original 2003 bonds were
refunded (refinanced) by issuing 2014 bonds to a private investment firm at a lower rate, saving the property
owners in Old Greenwood over $3 million over the term of the bonds. The 2014 bonds have similar terms
and have the same rate and method of apportionment for the Old Greenwood parcel owners as the original
2003 bonds.
During 2017 and 2016 respectively, taxes of $682,485 and $683,949 were levied by Old Greenwood. Of
these amounts, $341,243 and $341,974 relate to 2017 and 2016 respectively, and accordingly are included
in tax revenues in the accompanying Statement of Revenues, Expenses, and Changes in Net Position. The
remaining amount will be recognized in future periods and are included in unearned revenues on the
accompanying Statement of Net Position.
Page 35
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 7 — COMMUNITY FACILITIES DISTRICTS (Continued)
In September 2004, the Community Facilities District No. 04-1 (Gray's Crossing) was formed and issued
$15,375,000 in Special Tax Bonds (the 04-1 Bonds). In 2005, an additional $19,155,000 (2005 Series) in
Special Tax Bonds was issued for the Gray's Crossing CFD. During the county tax roll for 2017 and 2016,
taxes of $2,482,166 and $2,639,731 respectively were levied by Gray's Crossing. Of this amount,
$1,241,083 and $1,319,866 relate to 2017 and 2016 respectively, and accordingly, are included in tax
revenues. The remaining levied amount through the county tax roll will be recognized in future periods and
is included in unearned revenues on the accompanying Statement of Net Position.
The official statements and continuing disclosures may be viewed on the web site of Electronic Municipal
Market Access (EMMA) of the Municipal Securities Rulemaking Board (MSRB), http://emma.msrb.org/. The
Committee on Uniform Securities Identification Procedures number (CUSIP) for these special tax bonds is
CUSIP 897817.
NOTE 8 — DONNER LAKE WATER COMPANY ACQUISITION
In 2001, the District acquired the Donner Lake Water Company by initiating an eminent domain lawsuit. As
a part of the takeover, the District replaced the entire water system, which cost approximately
$15.6 million and was completed in 2006. The District initially estimated the replacement cost to be
$13 million. The Donner Lake property owners agreed to reimburse the District for the full costs of the
replacement. Therefore, an assessment was placed on each Donner Lake homeowner's property for a pro-
rata share of the $13 million payable immediately or with an option to pay over 20 years. The assessment
is collected by Nevada County and Placer County on behalf of the District and is secured by the Donner
Lake property owners. A monthly $6.65 water system upgrade surcharge is paid by the Donner Lake
customers to reimburse the District for the $2.6 million cost incurred in excess of the assessment.
In April 2004, the District obtained financing in the form of a State Revolving Fund Loan for $12,732,965 at
a rate of 2.34%. The District is required to fund a reserve account by making semi-annual reserve payments
in the amount of $40,043 for a 10-year period. The reserve fund is fully funded as of December 31, 2016.
As of December 31, 2017 and 2016, the assessment receivable from the property owners was $3,005,178
and $3,692,876 respectively, of which $736,020 and $714,622 is due in the next year. These amounts are
shown as Special Assessments Receivable in the Statement of Net Position. The proceeds of the
assessment and surcharge are placed in the Donner Lake Special Assessment District Improvement Fund
and used to pay the debt service for the water system improvements.
Page 36
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 9 — EMPLOYEE BENEFIT PLANS
A. PENSION PLANS
Plan Description — All qualified permanent and probationary employees are eligible to participate in
the District's Miscellaneous Employee Pension Plans, cost -sharing multiple employer defined benefit
pension plans administered by the California Public Employees' Retirement System (CalPERS).
Benefit provisions under the Plans are established by State statute and Local Government resolution.
CaIPERS issues publicly available reports that include a full description of the pension plans regarding
benefit provisions, assumptions and membership information that can be found on the CaIPERS
website.
Benefits Provided — CalPERS provides service retirement and disability benefits, annual costs of living
adjustments and death benefits to plan members, who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full time employment. Members
with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All
members are eligible for non -duty disability benefits after 10 years of service. The death benefits is
Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as
specified by the Public Employees' Retirement Law. The 2.7% at 55 Miscellaneous Plan is closed to
new entrants.
The plans' provisions and benefits in effect at December 31, 2017 are summarized as follows:
Hire Date
Benefit Formula
Benefit Vesting Schedule
Benefit Payments
Retirement Age
Monthly Benefits, as a %of eligible compensation
Required Employee Contributions Rates
Required Employer Contributions Rates
Miscellaneous
Prior to On or after
January 1, 2013 January 1, 2013
2.7%@55 2%@62
5 years service
5 years service
monthly for life
monthly for life
50 and Up
52 and Up
2.0% - 2.7%
1.0% to 2.5%
8%
6.25%
11.049%
6.533%
Contributions — Section 208149(c) of the California Public Employee's Retirement Law requires that
the employer contribution rates for all public employers be determined on an annual basis by the
actuary and shall be effective on the July 1 following notice of a change in the rate. Funding
contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS.
The actuarially determined rate is the estimated amount necessary to finance the costs of benefits
earned by employees during the year, with an additional amount to finance any unfunded accrued
liability. The District is required to contribute the difference between the actuarially determined rate
and the contribution rate of employees. Contributions shown below are for the fiscal year of July 1,
2016 through June 30, 2017.
Miscellaneous
Prior to On or after
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.7% @ 55 2% @ 62
2017 Employer Contributions $1,044,745 $94,014
2016 Employer Contributions $979,835 $69,062
Page 37
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued)
B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF
RESOURCES RELATED TO PENSIONS
As of December 31, 2017, the District reported net pension liabilities for its proportionate shares of
the net pension liability as follows:
Proportionate Share of Net Pension Liability
Fiscal Year Ending
June 30, 2017 June 30, 2016
$11, 975, 655 $10, 250, 329
The District's net pension liability is measured as a proportionate share of the net pension liability. The
net pension liability is measured as of June 30, 2017, and the total pension liability used to calculate
the net pension liability was determined by an actuarial valuation as of June 30, 2016 rolled forward to
June 30, 2017 using standard update procedures. The District's proportion of the net pension liability
was based on a projection of the District's long-term share of contributions to the pension plans relative
to the projected contributions of all participating employers, actuarially determined. The District's
proportionate share of the net pension liability for the Plan for the measurement date of June 30, 2017
and June 30, 2016 is as follows:
Percentage Share of Risk Pool
Measurement Date June 30, 2017 June 30, 2016 Change
Percentage of Plan NPL 0.30379% 0.29837% 0.00542%
For the years ended December 31, 2017 and 2016 the District recognized pension expense of
$2,269,611 and $1,180,590 respectively. At December 31, 2017 the District reported deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows of
Resources
Changes of assumptions $1,796,684
Differences between expected and actual experience
Differences between projected and actual investment earnings 439,877
Differences between employer's contributions and
proportionate share of contributions
Change in employer's proportion 544,250
Pension contributions made subsequent to the measurement 870,580
date
Total $3, 651, 391
Deferred Inflows of
Resources
(208, 908)
(343, 024)
($551,932)
Page 38
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued)
B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF
RESOURCES RELATED TO PENSIONS (Continued)
$870,580 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended
December 31, 2017. Other amounts reported as deferred outflows of resources and deferred inflows
of resources related to pensions will be recognized as pension expense as follows:
Year Ended
December 31
Amount
2018
$699, 571
2019
$1,107, 687
2020
$682, 783
2021
($261,163)
$2, 228, 878
Actuarial Assumptions — The total pension liabilities in the June 30, 2017 actuarial valuations were
determined using the following actuarial assumptions:
Miscellaneous
2017
Valuation Date
June 30, 2016
Measurement Date
June 30, 2017
Actuarial Cost Method
Entry -Age Normal Cost Method
Actuarial Assumptions:
Discount Rate
7.15%
Inflation
2.75%
Payroll Growth
3.00%
Salary Increase
Varies by Entry Age and Service
Investment Rate of
7.15% Net of Pension Plan Investment and
Return
Administrative Expenses; includes Inflation
Mortality (1)
Derived using CalPERS membership data for all funds
(1) The mortality table used was developed based on CalPERS' specific data. The Table includes 20 years of
mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to
the 2014 experience study report.
All underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2017
valuation were based on results of a January 2014 actuarial experience study for the period 1997 to
2011. Further details of the Experience Study can be found on the CalPERS website.
Page 39
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued)
B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF
RESOURCES RELATED TO PENSIONS (Continued)
Discount Rate - The discount rate used to measure the total pension liability as of December 31, 2017
was 7.15%. To determine whether the municipal bond rate should be used in the calculation of a
discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate
that would be different from the actuarially assumed discount rate. Based on the testing, none of the
tested plans run out of assets. Therefore, the current 7.15% discount rate used is adequate and the
use of the municipal bond rate calculation is not necessary. The long term expected discount rate of
7.15% will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test
results are presented in a detailed report that can be obtained from the CalPERS website.
The long-term expected rate of return on pension plan investments was determined using a building-
block method in which best -estimate ranges of expected future real rate of return (expected returns,
net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CaIPERS took into account both short-term and
long-term market return expectations as well as the expected pension fund cash flows. Using historical
returns of all the funds' asset classes, expected compound returns were calculated over the short-term
(first 10 years) and the long term (11-60 years) using a building-block approach. Using the expected
nominal returns for both short-term and long-term, the present value of benefits was calculated for each
fund. The expected rate of return was set by calculating the single equivalent expected return that
arrived at the same present value of benefits for cash flows as the one calculated using both short-term
and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate
calculated above and rounded down to the nearest one quarter of one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return
was calculated using the capital market assumptions applied to determine the discount rate and asset
allocation. The target allocation shown below was adopted by CaIPERS' Board effective on
June 30, 2017.
New Strategic
Asset Class Allocation
Global Equity
46.0%
Private Equity
8.0%
Global Debt Securities
20.0%
Real Assets
13.0%
Liquidity
4.0%
Inflation
9.0%
Total 100.0%
Page 40
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued)
B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF
RESOURCES RELATED TO PENSIONS (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate - The following presents the District's proportionate share of the net pension liability for each Plan,
calculated using the discount rate for each Plan, as well as what the District's proportionate share of
the net pension liability would be if it were calculated using a discount rate that is 1 % point lower or 1 %
point higher than the current rate:
Miscellaneous
Measurement Date June 30,2017
1 % Decrease 6.15%
Net Pension Liability $18,386,901
Current Discount Rate 7.15%
Net Pension Liability $11,975,655
1% Increase 8.15%
Net Pension Liability $6,665,743
Pension Plan Fiduciary Net Position — Detailed information about each pension plan's fiduciary net
position is available in the separately issued CalPERS financial reports.
C. PAYABLE TO THE PENSION PLAN
At December 31, 2017 and 2016 respectively the District did not report a payable for outstanding
required contributions to the pension plan.
D. DEFERRED COMPENSATION PLAN
The District maintains two deferred compensation plans: a 401(a) and a 457 plan, (the Plans) for certain
qualified employees. The District matches 6.78% of eligible employee contributions. In 2017 and 2016,
the total match was $106,332 and $91,066 in the respective years. The District has no liability for
losses under the Plans, but does have the duty of due care that would be required of an ordinary
prudent investor. The District has not reflected the Plans' assets and corresponding liabilities (if any)
on the accompanying Statement of Net Position.
Page 41
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued)
E. OTHER POST EMPLOYMENT BENEFITS (OPEB)
The District administers a single -employer defined benefit healthcare plan (The Retiree Health Plan).
Contribution requirements and benefit provisions are established through collective bargaining agreements
and may be amended only through negotiations between the District and the Union. The plan provides
health insurance contributions for eligible retirees and their spouses through the District's group health
insurance plan, which covers both active and retired members. Health insurance includes medical
insurance, dental insurance, and prescriptions. The Retiree Health Plan does not issue a publicly available
financial report.
Post -employment health care is available to all employees, and qualified dependents, that retire from the
District with at least 10 years of service. As of June 30, 2017, there were fifty eight participants including
dependents. The monthly amount paid by the District is capped at $475 for each participant or $375 for
each participant eligible for Medicare. For participants with less than 20 years of service, the benefit is
reduced by 5% for each year. Expenditures for post -employment health care benefits are recognized when
premiums are paid.
On November 7, 2007, the Board approved a participation agreement with CalPERS to be the plan
administrator for the District's other post -employment benefit (OPEB) trust. The participation agreement
was submitted to CalPERS on November 8, 2007, and became effective on January 15, 2008. At that time,
accumulated deposits from the prior year, plus accrued interest, were transferred to the California
Employers' Retiree Benefit Trust Program (CERBT).
The funds of the Retiree Health Plan are invested in CERBT, which is a tax qualified trust organized under
Internal Revenue Code (IRC) Section 115. Participation in the trust is limited to those agencies who qualify
as "government" entities under that IRC section. The CERBT is an irrevocable trust established for the
purpose of receiving employer contributions to prefund health and other postemployment benefits for
retirees and their beneficiaries. The CERBT administrative costs are financed through investment earnings.
Copies of the CalPERS' comprehensive annual financial report, that includes CERBT investment
performance, may be obtained from:
California Public Employees' Retirement System
400 Q Street
P.O. Box 942701
Sacramento, CA 94229-2701
Tel. 888-225-7377
http://www.calpers.ca.gov
The District's annual OPEB expense is calculated based on the Annual Required Contribution (ARC), an
amount actuarially determined in accordance within the parameters of GASB Statement No. 45. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each
year. The plan's unfunded actuarial accrued liability prior to June 30, 2017 is being amortized as a level
percentage of projected payrolls on an open basis, over a period not to exceed 30 years, using the entry
age normal cost method. The June 30, 2017 unfunded actuarial accrued liability is being amortized as a
level percentage of projected payroll on an open basis, over a 20 year period, using the actuarial cost
method.
Page 42
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued)
E. OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
The District's annual OPEB cost is recognized in the District's operating expenses. The following table
shows the components of the amount actually contributed to the plan, and changes in the net OPEB
obligation to the Retiree Health Plan:
Annual
%of
Change in
OPEB
Net OPEB
Fiscal
Required
Interest
Annual
Annual
Net
OPEB
Obligation
Obligation
Year
Contribution
and
OPEB
Actual
OPEB Cost
Obligation
(Asset)
(Asset)
Ended*
(ARC)
Adjustments
Cost
Contribution
Contributed
(Asset)
Beginning
Ending
06/30/2012
$
276,800
$ 66,671
$ 343,471
$
285,005
83.0%
$
58,466
$ (66,671)
$ (8,205)
06/30/2013
$
267,800
$ 628
$ 268,428
$
304,556
113.5%
$
(36,128)
$ (8,205)
$ (44,333)
06/30/2014
$
267,800
$ -
$ 267,800
$
268,498
100.3%
$
(698)
$ (44,333)
$ (45,031)
06/30/2015
$
647,851
$ 647,851
$
274,029
42.3%
$
373,822
$ (45,031)
$ 328,791
06/30/2016
$
665,667
$ 665,667
$
275,241
41.3%
$
390,426
$ 328,791
$ 719,217
06/30/2017
$
683,973
$ 683,973
$
286,622
41.9%
$
397,351
$ 719,217
$ 1,116,568
Actuarial valuations of an ongoing plan are required at least once every three years and involve estimates
for the value of reported amounts and assumptions about the probability of occurrence of events far into
the future. Examples include assumptions about future employment, mortality, and the healthcare cost
trend. Amounts determined regarding the funded status of the plan and annual required contributions of the
employer are subject to continual revision as actual results are compared with past expectations and new
estimates are made about the future.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and plan members) and include the types of benefits provided at the time of
each valuation and historical pattern of sharing benefit costs between the employer and plan members to
that point. The methods and assumptions used include techniques that are designed to reduce short-term
volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term
perspective of calculations.
Significant actuarial assumptions used for the valuation as of July 1, 2015 include:
Actuarial Cost Method Entry Age Normal
Asset Valuation Method Five-year smoothing formula with a 20% corridor around
market value
Discount Rate 7.0%
General Inflation 2.75% Annual Increase
Amortization of Unfunded Liability Closed 30 years; level percent for initial UAAL
Open 20 years; level percent for residual UAAL
Page 43
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued)
E. OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
The following is a funding schedule for the Retiree Health Plan:
Schedule of Retiree Health Plan Funding Progress
Accrued
Actuarial
Unfunded
Funded
Annual
Valuation
Liabilities
Value of
Liabilities
Ratio
Covered
UL as a %
Date*
(AL)
Assets (AVA)
(UL)
(AVA/AL)
Payroll
of Payroll
01 /01 /2011
$
2,501,800
$ 645,700
$
1,856,100
25.8%
$
6,307,400
29.4%
07/01 /2011
$
2,657,000
$ 661,400
$
1,995,600
24.9%
$
6,226,000
32.1 %
07/01 /2013
$
2,960,600
$ 1,079,900
$
1,880,700
36.5%
$
6,409,000
29.3%
07/01 /2015
$
6,755,593
$ 1,579,982
$
5,175, 611
23.4%
$
6,360,511
81.4%
*Valuations are required once every two years. In 2011, the vaulation
date changed to July 1 in compliance with GASB Statement No. 57.
The actuarial valuation issued July 1, 2015 had a significant increase in accrued liability of $3.8 million due
to a new Actuarial Standard of Practice 6 that became effective for valuations after March 1, 2015 that
requires valuing an "implicit rate subsidy". Though the District has an employer cap on retiree benefits, the
liability of providing them based on the expected premiums of the plan are now required to be recognized
in the actuarial valuation to guarantee the stability of the plan for the long run which nearly doubled the
normal costs and liabilities.
NOTE 10 —SELF FUNDED INSURANCE
The District has a self -funded vision insurance program and claims were processed by and on behalf of the
District. The District did not maintain a claim liability; rather claims were expensed as paid. The amount of
claims paid for each of the past three years have not been material.
Page 44
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 11 —SEGMENT DISCLOSURE
The District has issued revenue bonds to finance electric and water distribution facilities. The District also
issued special tax bonds secured by tax revenues from Mello -Roos Community Facilities Districts. Each
project has an external requirement to be reported separately, and investors in the revenue bonds and
special tax bonds rely solely on the revenue generated by the individual projects for repayment. Summary
financial information for each project is presented on the following pages for the years ending December
31, 2017 and 2016.
STATEMENT OF NET POSITION
December 31, 2017
Gray's
Old
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Electric
Water
Crossing
Greenwood
Current assets $
23,717,604
$ 10,085,811
$ 8,932,129
$ 1,073,922
Non -current assets:
Capital assets, net
48,257,502
74,856,572
-
-
Restricted assets
-
1,818,513
Other long-term assets
843,086
3,005,178
Total Noncurrent Assets
49,100,588
79,680,263
Deferred outflows of resources
Pension
2,190,835
1,460,556
Unamortized loss on refunding
-
576,778
Unamortized redemption premium
122,673
-
2,313,508
2,037,334
TOTAL ASSETS AND DEFERRED OUTFLOWS $
75,131,700
$ 91,803,408
$ 8,932,129
$ 1,073,922
OF RESOURCES
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND NET POSITION
Current liabilities $
4,702,463
$ 2,742,557
$ 1,255,338
$ 470,304
Non -current Liabilities
Long-term debt, net of current portion
3,523,745
21,085,650
30,258,102
9,164,800
Net pension liability
7,185,392
4,790,263
-
-
OPEB liability
669,941
446,627
-
-
Uneamed revenues
2,612,137
1,041,939
1,241,083
341,243
Total Noncurrent Liabilities
13,991,215
27,364,479
31,499,185
9,506,043
Total Liabilities
18,693,678
30,107,036
32,754,523
9,976,347
Deferred inflows of resources
Pension
331,159
220,773
-
-
Total Deferred Inflows of Resources
331,159
220,773
Net Position
Net investment in capital assets
43,501,844
52,216,044
(30,948,102)
(9,502,700)
Restricted for debt service
1,842,553
4,576,780
2,869,617
-
Unrestricted
10,762,466
4,682,775
4,256,091
600,275
Total Net Position
56,106,863
61,475,599
(23,822,394)
(8,902,425)
TOTAL LIABILITIES, DEFERRED INFLOWS $ 75,131,700 $ 91,803,408 $ 8,932,129 $ 1,073,922
OF RESOURCES AND NET POSITION
Page 45
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 11 — SEGMENT DISCLOSURE (Continued)
December 31, 2016
Gray's Old
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Electric
Water Crossing Greenwood
Current assets
$ 19,438,054
$ 9,475,927 $ 8,633,555 $ 1,128,060
Non -current assets:
Capital assets, net
47,660,186
75,942,145 - -
Restricted assets
-
1,876,032
Other long term assets
925,520
3,692,876
Total Noncurrent Assets
48,585,706
81,511,053
Deferred outflows of resources
Pension
2,403,030
1,602,020
Unamortized loss on refunding
-
609,580
Unamortized redemption premium
149,934
-
Total Deferred Outflows of Resources
2.552.964
2.211,600
TOTAL ASSETS AND DEFERRED OUTFLOWS $ 70,576,724 $ 93,198,580 $ 8,633,555 $ 1,128,060
OF RESOURCES
AND NET POSITION
Current liabilities
$ 4,312,570
$ 2,949,891
$ 1,190,466
$ 445,507
Non -current Liabilities
Long-term debt, net of current portion
4,398,403
23,244,323
30,942,897
9,502,700
Net pension liability
6,150,197
4,100,132
-
-
OPEB liability
431,530
287,687
-
-
Uneamed revenues
2,587,458
486,049
1,319,866
341,975
Total Noncurrent Liabilities
13,567,588
28,118,191
32,262,763
9,844,675
Total Liabilities
17,880,158
31,068,082
33,453,229
10,290,182
Deferred inflows of resources
Pension
958,276
638,850
-
-
Total Deferred Inflows of Resources
958,276
638,850
Net Position
Net investment in capital assets
42,500,995
50,920,550
(31,557,897)
(9,811,500)
Restricted for debt service
1,316,355
4,695,114
2,761,540
-
Unrestricted
7,920,940
5,875,984
3,976,683
649,378
Total Net Position
51,738,290
61,491,648
(24,819,674)
(9,162,122)
TOTAL LIABILITIES, DEFERRED INFLOWS
$ 70,576,724
$ 93,198,580
$ 8,633,555
$ 1,128,060
OF RESOURCES AND NET POSITION
Page 46
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 11 — SEGMENT DISCLOSURE (Continued)
STATEMENTS OF REVENUE, EXPENSES, AND CHANGES IN NET POSITION
Year ended December 31, 2017
Gray's
Old
Electric
Water
Crossing
Greenwood
Operating Revenues
Sales to consumers
$
22,660,258
$ 11,801,888
$
$
Other operating revenues
5,046,862
538,960
Operating expenses
22,108,454
8,774,652
Depreciation
2,624,534
3,907,106
Non -operating revenues (expenses)
140,304
(517,830)
997,280
259,697
Income (loss) before
capital& other contributions
3,114,436
(858,740)
997,280
259,697
Capital contributions, net
1,254,137
842,691
-
-
CHANGE IN NET POSITION
4,368,573
(16,049)
997,280
259,697
Net Position, Beginning
51,738,290
61,491,648
(24,819,674)
(9,162,122)
NET POSITION, ENDING
$
56,106,863
$ 61,475,599
$
(23,822,394) $
(8,902,425)
Year ended December 31, 2016
Gray's
Old
Electric
Water
Crossing
Greenwood
Operating Revenues
Sales to consumers
$
21,713,614
$ 11,312,973
$
$
Other operating revenues
3,357,601
749,177
Operating expenses
(20,222,867)
(8,171,428)
Depreciation
(2,576,192)
(3,660,841)
-
Non -operating revenues (expenses)
12,076
(700,499)
948,876
253,654
Income (loss) before
capital & other contributions
2,284,232
(470,618)
948,876
253,654
Capital contributions, net
1,111,440
587,670
-
-
CHANGE IN NET POSITION
3,395,672
117,052
948,876
253,654
Net Position, Beginning
48,342,618
61,374,596
(25,768,550)
(9,415,776)
NET POSITION, ENDING
$
51,738,290
$ 61,491,648
$
(24,819,674) $
(9,162,122)
Page 47
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 11 — SEGMENT DISCLOSURE (Continued)
STATEMENTS OF CASH FLOWS
Year ended December 31, 2017
Gray's
Old
Electric
Water
Crossing
Greenwood
NET CASH PROVIDED BY (USED IN)
Operating activities
$
6,624,835
$ 3,545,750
$
$
Noncapital financing activities
(467,590)
-
Capital and related financing activities
(2,328,476)
(3,723,773)
213,162
(61,629)
Investing activities
181,261
295,975
50,859
3,456
Net increase (decrease) in cash and
cash equivalents
4,010,030
117,952
264,021
(58,173)
Cash and Cash Equivalents, Beginning
15,439,826
7,485,574
2,900,712
434,842
CASH AND CASH
EQUIVALENTS, ENDING
$
19,449,856
$ 7,603,526
$
3,164,733 $
376,669
Year ended December 31, 2016
Gray's
Old
Electric
Water
Crossing
Greenwood
NET CASH PROVIDED BY (USED IN)
Operating activities
$
5,549,180
$ 3,719,688
$
$
Noncapital financing activities
(921,171)
-
Capital and related financing activities
(2,233,583)
(6,189,302)
(176,260)
(54,474)
Investing activities
114,807
292,186
9,184
2,786
Net increase (decrease) in cash and
cash equivalents
2,509,233
(2,177,428)
(167,076)
(51,688)
Cash and Cash Equivalents, Beginning
12,930,593
9,663,002
3,067,788
486,530
CASH AND CASH
EQUIVALENTS, ENDING
$
15,439,826
$ 7,485,574
$
2,900,712 $
434,842
Page 48
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 12 — MARTIS VALLEY GROUNDWATER MANAGEMENT EFFORTS
The Martis Valley aquifer underlies about 35,000 acres in both Placer and Nevada counties, near the Town
of Truckee. It is the main water supply for numerous public and private entities. This area has seen
significant growth in the last few decades with more planned for the future. Maintaining an adequate water
supply and protecting water quality are critical for the region's future.
The Truckee Donner Public Utility District (TDPUD), Northstar Community Services District (NCSD) and
Placer County Water Agency (PCWA) are the three primary public water agencies in the Martis Valley
Basin. Together, the TDPUD, NCSD and PCWA (Partnership Agencies) partnered to submit a groundwater
management plan and to help develop a groundwater model for the Martis Valley basin.
The Martis Valley Groundwater Management Plan (GMP) was prepared in 2015 to reflect current water
resources planning in the region and to incorporate the latest information and understanding of the
underlying groundwater basin. This collaborative effort provided the guidance necessary to align
groundwater policy. In addition to the groundwater management plan, a computer model of the
groundwater basin was developed by the Desert Research Institute, which incorporated available data and
enhanced understanding of the groundwater basin. A climate change modeling component was part of the
overall Federal study effort.
Partner agencies each adopted the Groundwater Management Plan (GMP) in February 2012 and the model
and associated report was completed in 2015. The total cost of the project was approximately $1,000,000,
which includes federal funding of approximately $500,000 from the U.S. Bureau of Reclamation and
$250,000 from the Lawrence Livermore National Laboratory; and contributions of $150,000 from TDPUD
and $100,000 from the other members of the Partnership Agencies.
In mid 2016, the California Sustainable Groundwater Management Act of 2014 (SGMA) took effect for which
the District was the submitting agency of a SGMA Alternate Submittal in December, 2016 on behalf of the
Town of Truckee, Placer County, Nevada County, PCWA, and Northstar CSD (Local SGMA Agencies).
The SGMA Alternative Submittal is intended to comply with the new regulations. There was an adopted
MOA amongst the six local agencies for this compliance project which covers the time period for preparation
of the SGMA Alternative Submittal, possible conditional acceptance of the plan by DWR, and submittal of
a first -year annual report. DWR has two years by statute to review the SGMA Alternative Submittal and,
as of the date the financial statements were available to be issued, has not formally responded.
NOTE 13 — CLAIMS AND JUDGMENTS
From time to time, the utility is party to various pending claims and legal proceedings. Although the outcome
of such matters cannot be forecasted with certainty, it is the opinion of management and the utility's legal
counsel that the likelihood is remote that any such claims or proceedings will have a material adverse effect
on the utility's financial position or results of operations.
NOTE 14 — RISK MANAGEMENT
The utility is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets;
errors and omissions; workers compensation; and health care of its employees. These risks are covered
through the purchase of commercial insurance, with minimal deductibles. Settled claims have not exceeded
the commercial liability in any of the past three years. There were no significant reductions in coverage
compared to the prior year
Page 49
THIS PAGE IS INTENTIONALLY LEFT BLANK
DMOSSADAMS
Report of Independent Auditors on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards
To the Board of Directors
Truckee Donner Public Utility District
We have audited, in accordance with the auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the consolidated financial
statements of Truckee Donner Public Utility District (the District), which comprise the consolidated
statements of net position as of December 31, 2017, and the related consolidated statements
revenues, expenses and changes in net position, and cash flows for the years then ended, and the
related notes to the financial statements, and have issued our report thereon dated May 25, 2018.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District's internal
control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinion on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the District's
internal control. Accordingly, we do not express an opinion on the effectiveness of the District's
internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity's financial statements will not be prevented, or detected and
corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District's financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not
express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Portland, Oregon
May 25, 2018
(III)MOSSADAMS
Report of Independent Auditors on Compliance for the Major Federal Program
and Report on Internal Control Over Compliance, Required by the Uniform
Guidance
To the Board of Directors
Truckee Donner Public Utility District
Report on Compliance for Major Federal Program
We have audited Truckee Donner Public Utility District's (the "District") compliance with the types of
compliance requirements described in the OMB Compliance Supplement that could have a direct and
material effect on the District's major federal program for the year ended December 31, 2017. The
District's major federal program is identified in the summary of auditor's results section of the
accompanying schedule of findings and questioned costs.
Management's Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and
conditions of its federal awards applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for the District's major federal program
based on our audit of the types of compliance requirements referred to above. We conducted our
audit of compliance in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S.
Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform
Guidance require that we plan and perform the audit to obtain reasonable assurance about whether
noncompliance with the types of compliance requirements referred to above that could have a direct
and material effect on a major federal program occurred. An audit includes examining, on a test
basis, evidence about the District's compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for the major
federal program. However, our audit does not provide a legal determination of the District's
compliance.
Opinion on the Major Federal Program
In our opinion, the District complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on the major federal
program for the year ended December 31, 2017.
Report on Internal Control Over Compliance
Management of the District is responsible for establishing and maintaining effective internal control
over compliance with the types of compliance requirements referred to above. In planning and
performing our audit of compliance, we considered the District's internal control over compliance with
the types of requirements that could have a direct and material effect on each major federal program
to determine the auditing procedures that are appropriate in the circumstances for the purpose of
expressing an opinion on compliance for each major federal program and to test and report on
internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of
expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do
not express an opinion on the effectiveness of the District's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance such
that there is a reasonable possibility that material noncompliance with a type of compliance
requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.
A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal
program that is less severe than a material weakness in internal control over compliance, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Portland, Oregon
May 25, 2018
Truckee Donner Public Utility District
Schedule of Findings and Questioned Costs
For the Year Ended December 31, 2017
Section I - Summary of Auditor's Results
Financial Statements
Type of report the auditor issued on whether the consolidated
financial statements audited were prepared in accordance with
GAAP: Unmodified
Internal control over financial reporting:
• Material weakness(es) identified? ❑ Yes ® No
• Significant deficiency(ies) identified? ❑ Yes ® None reported
Noncompliance material to financial statements noted? ❑ Yes ® No
Federal Awards
Internal control over major federal programs:
• Material weakness(es) identified? ❑ Yes ® No
• Significant deficiency(ies) identified? ❑ Yes ® None reported
Any audit findings disclosed that are required to be reported in
accordance with 2 CFR 200.516(a)? ❑ Yes ® No
Identification of major federal programs and type of auditor's report issued on compliance for major
federal programs:
Type of Auditor's Report
Issued on Compliance for
CFDA Numbers Name of Federal Program or Cluster Major Federal Programs
97.036 Disaster Grants — Public Assistance Unmodified
(Presidentially Declared Disasters)
Dollar threshold used to distinguish between type A and type B
programs: $ 750,000
Auditee qualified as low -risk auditee? ❑ Yes ® No
Section II - Financial Statement Findings
None reported
Section III - Federal Award Findings and Questioned Costs
None reported
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
December 31, 2017
SCHEDULE OF EXPENDITURES AND FEDERAL AWARDS
Year ended December 31, 2017
Federal Grantor/Pass-through Grantor
Program Title
Department of Homeland Security - Federal Emergency
Management Agency
California Governor's Office of Emergency Services
Public Assistance Grants
(Presidentially Declared Disasters)
Department of Homeland Security - Federal Emergency
Management Agency
California Governor's Office of Emergency Services
Public Assistance Grants
(Presidentially Declared Disasters)
Total Federal Awards Expended
Agency or
CFDA Pass -through
Number Number Expenditures
97.036 FEMA 4301-DR-CA, $ 693,825
Cal OES ID: 057-91013
97.036 FEMA-4308-DR-Ca, $ 239,011
Cal OES ID: 057-91013
See Accompanying Notes to Schedule of Expenditures of Federal Awards
$ 932,836
Page 56
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
December 31, 2017
NOTE 1 — PURPOSE OF THE SCHEDULE
The accompanying schedule of expenditures of federal awards (the Schedule) is a supplementary
schedule to the basic financial statements for the District, and is presented for purposes of additional
analysis. Because the Schedule presents only a selected portion of the activities for the District, it is not
intended to, and does not present either the financial position, changes in balances or the operating
revenues and expense for the District.
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF PRESENTATION
The information in the schedule is presented in accordance with the Uniform Guidance
B. FEDERAL FINANCIAL ASSISTANCE
Pursuant to the Uniform Guidance, federal financial assistance is defined as assistance provided by a
federal agency, either directly or indirectly, in the form of grants, contracts, cooperative agreements,
loans, loan guarantees, property, interest subsidies, insurance, or direct appropriations. Federal financial
assistance does not include direct federal cash assistance to individuals, or solicited contracts between
the state and federal government through which the federal government procures tangible goods or
services are not considered to be federal financial assistance. During 2017, the federal financial
assistance Truckee Donner Public Utility District received was in the form of grants from the Department
of Homeland Security.
C. MAJOR PROGRAMS
The Uniform Guidance establishes criteria to be used in identifying major federal programs. Major
programs for the District are those selected for testing by the auditor, using a risk assessment model, as
well as certain minimum expenditure requirements, as outlined in the Uniform Guidance. Programs with
similar requirements may be grouped for testing purposes.
D. REPORTING ENTITY
The reporting entity is fully described in Note 1 of the Basic Financial Statements. Additionally, the
Schedule includes all federal programs administered by Truckee Donner Public Utility District for the year
ended December 31, 2017.
E. REVENUE AND EXPENSE RECOGNITION
The accounting principle used for revenue and expense recognition is maintained on the accrual basis of
accounting. Revenues are recognized when earned, and expenses are recognized when incurred.
Grantor agency guidelines require that the entire amount of the assistance be recognized on the
Schedule in the year the aware was appropriated. All expenses submitted to the grantor agency were
incurred in the year ended December 31, 2017. The District did not utilize the 10 percent de-minimus
indirect cost rate as allowed under Uniform Guidance.
Page 57
REQUIRED SUPPLEMENTARY INFORMATION
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
COST SHARING DEFINED BENEFIT PENSION PLANS
Schedule of the District's Proportionate Share of the Net Pension Liability
Cost Sharing Defined Benefit Plans
As of June 30
Last Ten Years*
Portion of Net Pension Liability
Proportionate Share of The Net Pension Liability
Covered - Employee Payroll
Proporationate Share of the Net Pension Liability as
Percentage of Covered Payroll
2017
2016
2015
2014
0.30379%
0.29837%
0.29209%
0.09982%
$11,975,655
$10,250,329
$8,013,400
$6,210,985
$7,108,563
$6,670,248
$6,162,431
$6,278,545
168.47%
153.67%
130.04%
98.92%
Plan's Fidicuiary Net Position $27,244,095 $30,950,578 $30,725,516 $30,386,101
Plan Fiduciary Net Position as a percentage of the
Total Pension Liability 73.31% 75.12% 79.31% 89.17%
* Fiscal year 2014 was the 1st year of implementation, therefore only four years are shown
Page 59
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
Schedule of Contributions
Cost Sharing Defined Benefit Plans
As of June 30
Last Ten Years*
2017
2016
2015
2014
Contractually Required Contribution (Actuarially
Determined)
$1,138,758
$1,011,908
$950,147
$943,118
Contributions in Relation to the Actuarially
Determined Contributions
$1,138, 758
$1, 048, 897
$949, 634
$943,118
Contribution deficiency (excess)
($0)
($36,989)
$513
$0
Covered - Employee Payroll
$7,108,563
$6,670,248
$6,162,431
$6,278,545
Contributions as a percentage of covered -employee
payroll
16%
16%
15%
15%
* Fiscal year 2014 was the 1st year of implementation, therefore only four years are shown
Page 60
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
POSITION OF OTHER POST EMPLOYMENT BENEFIT PLANS
Retiree Health Plan Funding History
For the Years Ended January 1, 2006, 2007, 2009, 2011, 2013 and July 1, 2015*
Accrued
Actuarial
Unfunded
Funded
Annual
Valuation
Liabilities
Value of
Liabilities
Ratio
Covered
UL as a %
Date*
(AL)
Assets (AVA)
(UL)
(AVA/AL)
Payroll
of Payroll
01 /01 /2007
$
1,369,600
$
198,800
$
1,170, 800
14.5%
$
4,925,600
23.8%
01 /01 /2009
$
1,748,000
$
230,900
$
1,517,100
13.2%
$
5,276,400
28.8%
01 /01 /2011
$
2,501,800
$
645,700
$
1,856,100
25.8%
$
6,307,400
29.4%
07/01 /2011
$
2,657,000
$
661,400
$
1,995,600
24.9%
$
6,226,000
32.1 %
07/01 /2013
$
2,960,600
$
1,079,900
$
1,880,700
36.5%
$
6,409,000
29.3%
07/01 /2015
$
6,755,593
$
1,579,982
$
5,175, 611
23.4%
$
6,360,511
81.4%
*Retire Health Plan funding began in 2007. Valuations were routinely done every two years. The valuation
date changed to July 1 in compliance with GASB Statement No. 57.
Page 61
SUPPLEMENTAL INFORMATION
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
CONSOLIDATING STATEMENT OF NET POSITION
As of December 31, 2017
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
CURRENT ASSETS
Funds
Operating
Designated
Restricted
Total Funds
Accounts receivable, net
Unbilled revenues
Accrued interest receivable
Materials and supplies
Prepaid expenses
Other
Total Current Assets
NON -CURRENT ASSETS
Other Non -Current Assets
Restricted funds
Special assessments receivable
Other
Total Other Non -Current Assets
DEFERRED OUTFLOWS OF RESOURCES
Pension
Unamortized loss on refunding
Unamortized redemption premium
Total deferred outflows of resources
CAPITAL ASSETS
Utility plant
Accumulated depreciation
Construction w ork in progress
Total capital assets
TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Component Units
9ectric Operations Water Operations Gray's Grossing Old Greenwood 9iminations
$ 6,411,215 $ 2,049,356 $ 149,372 $ 376,669 $
1,863,673 765,784
21,203 51,830 2,458 1,441
519,034 158,862 - -
23, 717, 604 10, 085, 811 8,932,129 1,073,922
Totals
- $ 8,986,612
2,629,457
76,932
677,896
43,809,466
1,818,513
1,818,513
-
3,005,178
3,005,178
843,086
-
843,086
843,086
4,823,691
5,666,777
2,190,835
1,460,556
3,651,391
-
576,778
576,778
122,673
-
122,673
2,313,508
2,037,334
4,350,842
71,679,419
117,116,869
188,796,288
(25,855,204)
(42,708,031)
(68,563,235)
2,433,287
447,734
2,881,021
48,257,502
74,856,572
123,114,074
$ 75,131,700 $ 91,803,408 $ 8,932,129 $ 1,073,922 $ - $ 176,941,159
Page 63
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NET POSITION AND LIABILITIES
CURRENT LIABILITIES
Other liabilities
Accounts payable
Customer deposits
Other
Total other liabilities
Current liabilities payable from restricted assets:
Current portion of long-term debt
Accrued interest payable
Total Current Liabilities Payable from Restricted Assets
Total Current Liabilities
SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
Component Units
Electric Operations Water Operations Gray's Crossing Old Greenwood Eliminations Totals
$ 2,312,114 $
33,632 $
$
$
$ 2,345,746
399,333
88,863
488,196
651,421
343,194
994,615
3,362,868
465,689
3,828,557
1,279,658
2,131,656
690,000
337,900
4,439,214
59,937
145,212
565,338
132,404
902,891
1,339,595
2,276,868
1,255,338
470,304
5,342,105
4,702,463
2,742,557
1,255,338
470,304
9,170,662
NON -CURRENT LIABILITIES
Long-term debt, net of discounts and premiums
3,476,000
21,085,650
30,258,102
9,164,800
63,984,552
Net pension liability
7,185,392
4,790,263
-
-
11,975,655
OPEB liability
669,941
446,627
1,116,568
Installment loans
47,745
-
-
-
47,745
Unearned revenues
2,612,137
1,041,939
1,241,083
341,243
5,236,402
Total non -current liabilities
13,991,215
27,364,479
31,499,185
9,506,043
82,360,922
Total Liabilities
18,693,678
30,107,036
32,754,523
9,976,347
91,531,584
DEFERRED INFLOWS OF RESOURCES
Pension
331,159
220,773
-
-
551,932
Total deferred inflows of resources
331,159
220,773
551,932
NET POSITION
Net investment in capital assets
43,501,844
52,216,044
(30,948,102)
(9,502,700)
55,267,086
Restricted for debt service
1,842,553
4,576,780
2,869,617
-
9,288,950
Unrestricted
10,762,466
4,682,775
4,256,091
600,275
20,301,607
Total Net Position
56,106,863
61,475,599
(23,822,394)
(8,902,425)
84,857,643
TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION $
75,131,700 $
91,803,408 $
8,932,129 $
1,073,922 $
$ 176,941,159
Page 64
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
CONSOLIDATING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
For the Year Ended December 31, 2017
Component Units
Electric Operations
Water Operations
Gray's Crossing Old Greenwood
Eiminations
Totals
OPERATING REVENUES
Sales to customers
$ 22,660,258
$ 11,801,888
$ $
$
- $
34,462,146
Interdepartmental sales
1,148,845
2,292
-
-
(1,151,137)
-
Standby fees
21,530
133,440
154,970
Cap and trade proceeds
1,140,372
-
1,140,372
Other
2,736,115
403,229
-
-
(561,479)
2,577,865
Total Operating Revenues
27,707,120
12,340,849
(1,712,616)
38,335,353
OPERATING EXPENSES
Purchased power
11,327,300
-
-
-
-
11,327,300
Operations and maintenance
4,997,232
4,835,623
-
-
(1,151,137)
8,681,718
Consumer services
1,661,708
640,793
2,302,501
Administration and general
2,522,038
2,231,453
(561,479)
4,192,012
Pension expense
1,361,766
907,844
2,269,610
OPEB expense
238,410
158,940
397,350
Depreciation
2,624,534
3,907,106
6,531,640
Total Operating Expenses
24,732,988
12,681,759
-
-
(1,712,616)
35,702,131
Operating Income
2,974,132
(340,910)
2,633,222
NON -OPERATING REVENUE(E(PENSES)
Special tax revenue
-
-
2,658,860
683,217
3,342,077
Investment income
163,323
230,654
22,317
4,196
420,490
Interest expense
(2,951)
(743,045)
(1,716,270)
(405,818)
(2,868,084)
Amortization
(27,261)
(5,784)
(5,205)
-
-
(38,250)
Other non -operating revenues
-
-
37,578
4,479
-
42,057
Other non -operating expenses
-
-
-
(26,377)
-
(26,377)
Gain (loss) on disposition of assets
7,193
345
7,538
Total Non -Operating Expenses
140,304
(517,830)
997,280
259,697
879,451
Income Before Contributions
3,114,436
(858,740)
997,280
259,697
3,512,673
CAPITAL & OTHER CONTRIBUTIONS, net
Capital Contributions
946,717
1,150,111
-
-
-
2,096,828
Intercompany Debt Service - Pension Sidefund
307,420
(307,420)
-
Total Capital and Other Contributions, net
1,254,137
842,691
-
-
2,096,828
CHANGE IN NET POSITION
4,368,573
(16,049)
997,280
259,697
-
5,609,501
NET POSITION - Beginning of Year
51,738,290
61,491,648
(24,819,674)
(9,162,122)
79,248,142
NET POSITION - END OF YEAR
$ 56,106,863
$ 61,475,599
$ (23,822,394) $
(8,902,425) $
- $
84,857,643
Page 65
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Received from customers
Paid to suppliers for goods and services
Paid to employees for services
Net Cash Flow s from Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Principal payments on long-term debt
Interest payments on long-term debt
Net Cash Flow s from Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital expenditures for utility plant
Cost of disposal of property net of salvage
Capital contributions, connection and facility fees
Special assessments receipts
Special tax receipts
Principal payments on long-term debt
Interest payments on long-term debt
Cash Flow s From Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received
Cash Flows from Investing Activities
Net Change in Cash and Cash Equivalents
CASH AND CASH EQUIVALENTS — Beginning of Year
CASH AND CASH EQUIVALENTS — END OF YEAR
Component Units
Electric Operations
Water Operations
Gray's Crossing
Old Greenwood Eliminations
Total
$ 27,915,556
$ 11,560,093
$
$ $ (1,684,739) $
37,790,910
(16,319,624)
(5,499,190)
1,684,739
(20,134,075)
(4,971,097)
(2,515,153)
-
(7,486,250)
6,624,835
3,545,750
10,170,585
(404,000)
-
(404,000)
(63,590)
(63,590)
(467,590)
(467,590)
(3,042,889)
(2,339,061)
(5,381,950)
(126,363)
345
(126,018)
731,961
1,073,520
1,805,481
-
687,698
687,698
-
2,554,560
657,293
3,211,853
(10,191)
(2,413,869)
(615,000)
(308,800)
(3,347,860)
119,006
(732,406)
(1,726,398)
(410,122)
(2,749,920)
181,261
295,975
50,859
3,456
531,551
181,261
295,975
50,859
3,456
531,551
4,010,030
117,952
264,021
(58,173)
4,333,830
15,439,826
7,485,574
2,900,712
434,842
26,260,954
$ 19,449,856 $
7,603,526 $
3,164,733 $
376,669 $
$ 30,594,784
Page 66
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
For the Year Ended December 31, 2017
RECONCILIATION OF OPERATING INCOME TO NET CASH
FLOWS FROM OPERATING ACTIVITIES
Operating income
Noncash items included in operating income
Depreciation and amortization
Depreciation charged to other accounts
Intercompany Transfer
Pension expense - GASB 68
Deferred Pension Contributions - GASB 68
OPEB
Accounts receivable and unbilled revenues
Materials and supplies
Prepaid expenses and other current assets
Accounts payable
Customer deposits
Other current liabilities
NET CASH FLOWS FROM OPERATING ACTIVITIES
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE BALANCE SHEET
Operating
Designated
Restricted bond funds - current
Restricted bond funds - non -current
Total Cash and Investments
Less: Long-term investments
Mark to market adjustment
TOTAL CASH AND CASH EQUIVALENTS
Component Units
Electric Operations Water Operations Gray's Crossing Old Greenwood Biminations
Total
$ 2,974,132 $
(340,910) $
$ $ $ 2,633,222
2,624,534
3,907,106
6,531,640
194,032
150,010
344,042
307,420
(307,420)
-
1,361,766
907,845
2,269,611
(741,492)
(494,328)
(1,235,820)
238,410
158,940
397,350
(115,912)
(476,436)
(592,348)
(40,037)
19,122
(20,915)
(131,509)
(42,418)
(173,927)
(152,512)
(8,257)
(160,769)
16,927
3,100
20,027
89,076
69,396
158,472
$ 6,624,835 $
3,545,750 $
$ $ $ 10,170,585
$ 6,411,215 $ 2,049,356 $ 149,372 $ 376,669 $ $ 8,986,612
11,087,233 2,623,136 - - 13,710,369
1,902,490 2,928,505 3,015,361 7,846,356
- 1,818,513 - - 1,818,513
19,400,938 9,419,510 3,164,733 376,669 32,361,850
(1,698,880) (1,698,880)
$ 19,449,856 $ 7,603,526 $ 3,164,733 $ 376,669 $ - $ 30,594,784
Page 67
TRUCKEE DONNER
PUBLIC UTILITY DISTRICT
PRIMARY GOVERNMENT ONLY
Including Report of Independent Auditors
December 31, 2017 and 2016
TABLE OF CONTENTS
Report of Independent Auditors................................................................................................1
Management's Discussion and Analysis......................................................................................4
FinancialStatements...............................................................................................................9
Consolidated Statements of Net Position........................................................................10
Consolidated Statements of Revenues, Expenses and Changes in Net Position.....................13
Consolidated Statements of Cash Flows.........................................................................14
Notes to Financial Statements.................................................................................................16
Required Supplementary Information........................................................................................46
Cost Sharing Defined Benefit Pension Plans...................................................................47
Position of Post Employment Benefit Plans.....................................................................49
Supplementary Information.....................................................................................................50
Consolidating Statement of Net Position.........................................................................51
Consolidating Statement of Revenues, Expenses and Changes in Net Position .......................53
Consolidating Statement of Cash Flows..........................................................................54
DMOSSADAMS
Report of Independent Auditors
The Board of Directors
Truckee Donner Public Utility District
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of Truckee Donner Public
Utility District (the "District"), which comprise the consolidated statements of net position as of
December 31, 2017 and 2016, and the related consolidated statements of revenues, expenses and
changes in net position, and cash flows for the years then ended, and the related notes to the
consolidated financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity's preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly,
we express no such opinion. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
DMOSSADAMS
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Truckee Donner Public Utility District as of December 31, 2017 and
2016, and the results of its operations and its cash flows for the years then ended in accordance with
accounting principles generally accepted in the United States of America.
Emphasis of Matter
The consolidated financial statements referred to above include only the primary government of the
District which consists of all departments that comprise the District's legal entity. The consolidated
financial statements do not include financial data for the District's legally separate component units,
which accounting principles generally accepted in the United States of America require to be reported
with the financial data of the District's primary government. As a result, the primary government
financial statements do not purport to, and do not present fairly the financial position of the reporting
entity of the District as of December 31, 2017 and 2016, the results of operations, or its cash flows for
the years then ended in conformity with accounting principles generally accepted in the United States
of America, the District has issued separate reporting entity financial statements, for which we have
issued our report for the 2017 and 2016 statements dated May 25, 2018.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's
discussion and analysis, the schedule of the District's proportionate share of the net pension liability,
the schedule of contributions, and retiree health plan funding history, be presented to supplement the
basic consolidated financial statements. Such information, although not a part of the basic
consolidated financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic consolidated financial
statements in an appropriate operational, economic, or historical context. We have applied certain
limited procedures in the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic consolidated financial statements, and other
knowledge we obtained during our audit of the basic consolidated financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures do
not provide us with sufficient evidence to express an opinion or provide any assurance.
2
DMOSSADAMS
Other Supplementary Information
Our audits were conducted for the purpose of forming opinions on the consolidated financial
statements that collectively comprise the District's consolidated financial statements. The
consolidating statements of net position, statements of revenues, expenses and changes in net
position and cash flows as of and for the year ended December 31, 2017 are presented for purposes
of additional analysis and are not a required part of the basic consolidated financial statements. Such
information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic consolidated financial statements.
The consolidating statements of net position, statements of revenues, expenses and changes in net
position and cash flows have been subjected to the auditing procedures applied in the audit of the
basic consolidated financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare
the basic consolidated financial statements or to the basic consolidated financial statements
themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the consolidating statements of net position,
statements of revenues, expenses and changes in net position and cash flows are fairly stated in all
material respects in relation to the basic consolidated financial statements as a whole.
Portland, Oregon
May 25, 2018
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2017 and 2016
MANAGEMENT'S DISCUSSION AND ANALYSIS
As financial management of the Truckee Donner Public Utility District (the District), we offer readers of
these financial statements this narrative overview and analysis of the financial activities of the District for
the years ended December 31, 2017 and 2016. This discussion and analysis is designed to assist the
reader in focusing on the significant financial topics, provide an overview of the District's financial activity
and identify changes in the District's financial position.
We encourage readers to consider the information presented here in conjunction with that presented within
the basic financial statements. The reader should take time to read and evaluate all sections of this report,
including the footnotes and other supplementary information that is provided, in addition to this
management discussion and analysis.
FINANCIAL HIGHLIGHTS
The District's current assets increased $4.9 million (16.9%) from $28.9 million at December 31, 2016 to
$33.8 million at December 31, 2017, predominantly due to higher than anticipated revenues for the Electric
Utility.
The District's total net position increased $4.4 million (3.84%) from $113.2 million at December 31, 2016,
to $117.6 million at December 31, 2017. The increase is primarily attributed to a $4.4 million increase for
the Electric Utility for 2017.
Operating revenues increased $2.8 million (7.8%) from $35.6 million in 2016 to $38.3 million in 2017.
Electric revenues increased 10.5% in 2017. Electric revenues include a 2% rate increase in 2017. Federal
Emergency Management Agency (FEMA) and California Office of Emergency Services (CaIOES)
reimbursements for reparation of plant damages sustained in January and February 2017 from extreme
winter storms, and the District's participation in the joint pole program exceeded expectations in 2017 due
to increased pole replacements. Water revenues increased 2% in 2017; primarily due to a 3% water rate
increase in 2017 that was offset by decreased residential consumption. The Water Utility also received a
small reimbursement of expenses from FEMA and CalOES associated with the extreme winter storms in
2017.
Operating expenses of the District increased $2.6 million (7.9%) from $33.1 million in 2016 to $35.7 million
in 2017. Electric expense increased 8.5% and Water expense increased 7.2% in 2017. The primary
increase in expense is due to increased pension expense associated with the change in the discount rate
implemented by CalPERS in 2017 in addition to the extra operating expenses that occurred from the
extreme winter storms in Q1 of 2017.
Compared to 2016, the overall non -operating revenues remained flat at $0.4 million in 2017. Non -operating
expenses decreased $0.4 million from $1.1 million in 2016 to $0.7 million in 2017.
No new debt was incurred in 2017. Final payments were made on two of the Water Utility's installment
loans in 2017. The annual debt service on the two installment loans was just over $300,000.
OVERVIEW OF THE FINANCIAL STATEMENTS
This report includes Management's Discussion and Analysis, the Report of Independent Auditors, the Basic
Financial Statements, (which includes the notes to the financial statements), Required Supplementary
Information and additional Supplementary Information.
See accompanying auditors' report.
Page 4
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2017 and 2016
REQUIRED FINANCIAL STATEMENTS
The financial statements of the District are designed to provide readers with a broad overview of the
District's finances similar to a private -sector business. They have been prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the United States of America
(GAAP). Under this basis of accounting, revenues are recognized in the period in which they are earned
and expenses are recognized in the period in which they are incurred, regardless of the timing of related
cash flows. These statements offer short-term and long-term financial information about the District's
activities.
The reporting entity consists of the primary government, which provides two utilities (electric utility and
water utility), and the blended component units. Further details about the component units are provided in
note 1(A).
The Consolidated Statement of Net Position presents information on all of the District's assets, deferred
outflows of resources and liabilities, and deferred inflows of resources and provides information about the
nature and amounts of investments in resources (assets) and the obligations to District creditors (liabilities).
It also provides the basis for computing rate of return, evaluating the capital structure of the District, and
assessing the liquidity and financial flexibility of the District.
All of the current year's revenues and expenses are reported in the Consolidated Statements of
Revenues, Expenses, and Changes in Net Position. This statement provides a measurement of the
District's operations over the past year and can be used to determine whether the District has successfully
recovered all its costs through its rates and other charges.
The Consolidated Statement of Cash Flows provides relevant information about the District's cash
receipts and cash payments during the reporting period. This statement reports cash receipts and cash
payments resulting from operating, non -capital financing, capital and related financing, and investing
activities. When used with related disclosures and information in the other financial statements, the
statement of cash flows should provide insight into (a) the District's ability to generate future net cash flows,
(b) the District's ability to meet its obligations as they come due, (c) the District's needs for external
financing, (d) the reasons for differences between operating income and associated cash receipts and
payments, and (e) the effects on the District's financial position of both its cash and its non -cash investing,
capital, and financing transactions during the period. The changes in cash balances are an important
indicator of the District's liquidity and financial condition.
The Notes to the Financial Statements provide additional information that is essential to a full
understanding of the data provided in the basic financial statements. This includes but is not limited to,
significant accounting policies, significant financial statement balances and activities, material risks,
commitments and obligations, and subsequent events, as applicable.
See accompanying auditors' report.
Page 5
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2017 and 2016
DISTRICT HIGHLIGHTS
The condensed financial statements at December 31, 2017, 2016, and 2015 are presented below.
CONSOLIDATED STATEMENT OF NET POSITION
ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
2017
2016
Current assets
$ 33,803,415
$ 28,913,981
Non -current assets:
Capital assets, net
123,114,074
123,602,331
Restricted assets
1,818,513
1,876,032
Other long-term assets
3,848,264
4,618,396
Total Assets
162.584.266
159.010.740
Deferred outflows of resources
TOTAL ASSETS AND
DEFERRED OUTFLOWS OF RESOURCES
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND NET POSITION
Current liabilities
Non -current Liabilities
Long-term debt, net of current portion
Net pension liability
OPEB liability
Unearned revenues
Total Liabilities
Deferred inflows of resources
NET POSITION
Net investment in capital assets
Restricted for debt ser\ice
Unrestricted
Total Net Position
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND NET POSITION
d 2I,n Rd7 A 7RA 1,RA
-inir
Z� Li5,L.5u,25uu
Increase
(Decrease)
2017-2016
$ 4,889,434
122,416,668
(488,257)
1,900,036
(57, 519)
5,361,643
(770,132)
157, 909,147
3,573, 526
3,274,459 (413,722)
$ 166, 935,108 $ 163, 775, 304 $ 161,183, 606 $ 3,159, 804
$ 7,445,020
$ 7,262,461
$ 7,300,776
$ 182,559
24,609,395
27,642,726
30,583,770
(3,033,331)
11,975,654
10,250,329
8,013,400
1,725,325
1,116, 568
719,217
-
397,351
3,654,076
3,073,507
3,226,709
580,569
48,800,714
48,948,240
49,124,655
(147,526)
551,932
1,597,126
2,341,737
(1,045,194)
95,717,888
93,421,545
89,271,509
2,296,343
6,419,333
6,011,469
5,762,124
407,864
15,445,241
13, 796,924
14, 683,581
1,648, 317
117,582,462
113,229,938
109,717,214
4,352,524
$ 166, 935,108
$ 163, 775, 304
$ 161,183, 606
$ 3,159, 804
In 2017, the District's current assets increased $4.9 million, predominantly due to increased cash reserves
associated with the Electric Utility. Other Long Term assets decreased $0.7 million, due to the scheduled
collection of special assessments receivable. Net Long Term debt decreased $3.0 million, due to annual
reduction of existing debt. See note 5 for details on remaining debt. No new debt was issued in 2017. The
District's total net position increased $4.4 million, substantially due to increased investment in capital assets
including electric distribution replacement and improvement projects, meter replacement and
communication upgrade, transportation equipment, pipeline replacement, and the continuation of the water
SCADA replacement.
"Restricted for debt service" represents amounts restricted for payments related to outstanding revenue
bonds.
See accompanying auditors' report.
Page 6
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2017 and 2016
The District had income before capital contributions of $2.3 million, $1.8 million, and $1.3 million for the
years ended December 31, 2017, 2016, and 2015, respectively. Changes in the District's net position can
be determined by reviewing the following Condensed Revenues, Expenses, and Changes in Net Position
for the years ended December 31, 2017, 2016, and 2015.
CONDENSED REVENUES, EXPENSES, AND CHANGES IN NET POSITION
Sales to consumers
Other operating revenues
Total Operating Revenues
Operating expenses
Operating Income
Non -operating revenues (expenses)
Income before
capital contributions
Capital contributions, net
Change in net position
Net Position, Beginning of Year
NET POSITION, END OF YEAR
Increase
(Decrease)
2017
2016
2015
2017-2016
$ 34,462,146
$ 33,026,587
$ 30,818,856
$ 1,435,559
3,873,207
2,577,122
2,158,141
1,296,085
38,335,353
35,603,709
32,976,997
2,731,644
35,702,131
33,101,672
30,892,366
2,600,459
2,633,222
2,502,037
2,084,631
131,185
(377,526)
(688,423)
(762,711)
310,897
2,255,696
1,813,614
1,321,920
442,082
2,096,828
1,699,110
1,430,510
397,718
4,352,524
3,512,724
2,752,430
839,800
113,229,938
109,717,214
106,964,784
3,512,724
$ 117,582,462
$ 113,229,938
$ 109,717,214
$ 4,352,524
Total operating revenues were $38.3 million in 2017, $35.6 million in 2016, and $33.0 million in 2015. In
2017, electric revenues increased 10.5% due to a 2% rate increase in addition to increased residential and
commercial consumption driven by colder temperatures. Water revenues increased 2.0%; a 3% rate
increase in 2017 was offset by a continued trend in decreased consumption. Other operating revenues
include just under $1.1 M in reimbursements to the Electric Utility from the Federal Emergency Management
Agency (FEMA) and California Office of Emergency Services (CaIOES) reimbursements for reparation of
plant damages sustained in the January and February 2017 from extreme winter storms. The District
received an additional $65K in reimbursements to the Water Utility for reimbursement of qualifying
expenses associated with the District's emergency protective measures to maintain water service to
customers during those extreme winter storms.
Total operating expenses were $35.7 million in 2017, $33.1 million in 2016, and $30.9 million in 2015.
Electric expenses increased 8.5% and water expenses increased 7.2%. primarily attributed to the
extraordinary expenses incurred from the extreme winter storms of 2017 as noted above in addition to a
significant increase in pension expense due to the first year implementation of the decrease in the discount
rate adopted by the California Public Employees Retirement System (CaIPERS (see note 9).
Compared to 2016, the overall non -operating revenues remained flat at $0.4 million in 2017. Non -operating
expenses decreased $0.4 million from $1.1 million in 2016 to $0.7 million in 2017.
See accompanying auditors' report.
Page 7
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2017 and 2016
CAPITAL ASSETS
As of December 31, 2017, 2016, and 2015, the District had $123.1 million, $123.6 million, and $122.4
million, respectively, invested in a variety of capital assets, net of accumulated depreciation. A summary of
capital assets is reflected in the following schedule.
CAPITAL ASSETS
2017 2016 2015
Electric distribution facilities
Water distribution facilities
General plant
Sub -totals
Less: Accumulated depreciation
Net of accumulated depreciation
Construction work in progress
Net capital assets
$ 60,416,921
112, 596, 747
1 R 7R9 n9n
188, 796, 288
(68, 563, 235)
120, 233, 053
2 RR1 n?1
$ 58,345,690
108,860,825
1 R nR9 77R
182,268,793
(63, 372, 738)
118,896,055
4 7nR 276
Z� -12,5,"1"14,U/4 "IZS,bUL,SS"I
$ 54,721,615
107,005,578
13, 887, 881
175, 615, 074
(58, 042,448)
117,572,626
4,844,042
$ 122,416,668
Net capital assets (additions, less retirements and depreciation) remained nearly flat in 2017 compared to
2016 respectfully. The District ended 2017 with decreased construction work in progress of $2.9 million
compared to $4.7 million in 2016; the mainline replacement project in 2017 was completed earlier than prior
years enabling the District to capitalize on it in 2017. Electric and Water Utility distribution assets in 2017
were both replaced at a slightly faster pace than accumulated depreciation.
LONG-TERM DEBT
Long-term debt includes revenue bonds and notes payable. At December 31, 2017, 2016, and 2015, the
District had $24.6 million, $27.6 million, and $30.6 million, respectively, in long-term debt outstanding, net
current maturities.
No new debt was issued in 2017.
CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT
The financial report is designed to provide readers with a general overview of the District's finances and to
demonstrate the District's accountability for the money it receives. If you have questions about this report
or need additional financial information, contact:
Truckee Donner Public Utility District
Attn: Treasurer
11570 Donner Pass Road
Truckee, CA 96161
See accompanying auditors' report.
Page 8
FINANCIAL STATEMENTS
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF NET POSITION
December 31, 2017 and 2016
ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
2017
2016
CURRENT ASSETS
Cash Funds
Operating
$ 8,460,571 $
7,852,130
Designated
13, 710, 369
10, 759, 538
Restricted
4,830,995
4,293,285
Total Cash Funds
27,001,935
22,904,953
Accounts receivable, net
2,694,266
1,820,173
Unbilled revenues
2,629,457
2,911,201
Accrued interest receivable
73,033
65,044
Materials and supplies
677,896
656,981
Prepaid expenses
633,191
459,264
Other
93,637
96,365
Total Current Assets
33,803,415
28,913,981
NON -CURRENT ASSETS
Other Non -Current Assets
Restricted investment fund 1,818,513 1,876,032
Special assessments receivable 3,005,178 3,692,876
Other 843,086 925,520
Total Other Non -Current Assets 5,666,777 6,494,428
DEFERRED OUTFLOWS OF RESOURCES
Pension 3,651,391 4,005,050
Unamortized loss on refunding 576,778 609,580
Unamortized redemption premium 122,673 149,934
Total Deferred Outflows of Resources 4,350,842 4,764,564
CAPITAL ASSETS
Utility plant
188,796,288
182,268,793
Accumulated depreciation
(68,563,235)
(63,372,738)
Construction work in progress
2,881,021
4,706,276
Total Capital Assets
123,114,074
123,602,331
TOTAL ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
$ 166,935,108 $
163,775,304
The accompanying notes are an integral part of these consolidated financial statements.
Page 10
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF NET POSITION
December 31, 2017 and 2016
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND NET POSITION
CURRENT LIABILITIES
Other Liabilities
Accounts payable
Customer deposits
Other
Total Other Liabilities
Current Liabilities Payable From Restricted Assets
Current portion of long-term debt
Accrued interest payable
Total Current Liabilities Payable from Restricted Assets
Total Current Liabilities
NON -CURRENT LIABILITIES
Long-term debt, net of discounts and premiums
Net pension liability
OPEB liability
Installment loans
Unearned revenues
Total Non -Current Liabilities
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Pension
Total Deferred Inflows of Resources
NET POSITION
Net investment in capital assets
Restricted for debt service
Unrestricted
Total Net Position
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND NET POSITION
2017
$ 2,345,746 $ 2,506,514
488,196 468,168
3,828,557 3,893,259
3,411,314 3,206,043
3,616,463 3,369,202
7,445,020 7,262,461
24,561,650
27,584,323
11, 975, 655
10, 250, 329
1,116,568
719,217
47,745
58,403
3,654,076
3,073,507
41,355,694
41,685,779
48, 800, 714 48, 948, 240
551,932 1,597,126
551,932 1,597,126
95, 717, 888
6,419,333
117, 582, 462
93,421,545
6,011,469
113, 229, 938
$ 166, 935,108 $ 163, 775, 304
The accompanying notes are an integral part of these consolidated financial statements.
Page 11
THIS PAGE IS INTENTIONALLY LEFT BLANK
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
December 31, 2017 and 2016
OPERATING REVENUES
Sales to customers
Standby fees
Cap and trade proceeds
Other
Total Operating Revenues
OPERATING EXPENSES
Purchased power
Operations and maintenance
Consumer services
Administration and general
Pension expense
OPEB expense
Depreciation
Total Operating Expenses
Operating Income
NON -OPERATING REVENUE (EXPENSES)
Investment income
Interest expense
Amortization
Other non -operating expenses
Gain (loss) on disposition of assets
Total Non -Operating Revenue (Expenses)
Income Before Contributions
CAPITAL & OTHER CONTRIBUTIONS
CHANGE IN NET POSITION
Net Position - Beginning of Year
NET POSITION - END OF YEAR
2017 2016
$ 34,462,146 $ 33, 026, 587
154,970 160,670
1,140, 372 1,172, 306
11,327,300
11,511,308
8,681,718
6,951,273
2,302,501
2,130,422
4,192,012
4,331,827
2,269,610
1,220,591
397,350
719,218
6,531,640
6,237,033
35, 702,131
33,101, 672
393,977
368,761
(745,996)
(897,993)
(33,045)
(12,599)
-
(145,078)
7,538
- r-
(1,514)
/- A -mil\
2,255,696
1,813,614
2,096,828
1,699,110
4,352,524
3,512,724
113, 229, 938
109, 717, 214
$ 117,582,462
$ 113,229,938
The accompanying notes are an integral part of these consolidated financial statements
Page 13
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF CASH FLOWS
December 31, 2017 and 2016
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Received from customers $ 37,790,910 $ 35,177,778
Paid to suppliers for goods and services (20,134,075) (19,476,138)
Paid to employees for services (7,486,250) (6,432,772)
Net Cash Flows from Operating Activities 10,170,585 9,268,868
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Debt issuance costs
-
78,838
Proceeds from refunding
-
5,353,413
Principal payments on long-term debt
(404,000)
(6,102,838)
Interest payments on long-term debt
(63,590)
(250,584)
Net Cash Flows from Noncapital Financing Activities
(467,590)
(921,171)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital expenditures for utility plant
(5,381,950)
(7,421,152)
Cost of disposal of property net of salvage
(126,018)
(78,431)
Capital contributions, connection and facility fees
1,805,481
1,356,731
Special assessments receipts
687,698
670,914
Debt issuance costs
-
66,240
Proceeds from refunding
-
3,128,760
Principal payments on long-term debt
(2,424,060)
(5,497,159)
Interest payments on long-term debt
(613,400)
(648,788)
Cash Flows From Capital and Related Financing Activities
(6,052,249)
(8,422,885)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received
477,236
406,993
Cash Flows from Investing Activities
477,236
406,993
Net Change in Cash and Cash Equivalents
4,127,982
331,805
CASH AND CASH EQUIVALENTS — Beginning of Year
22,925,400
22,593,595
CASH AND CASH EQUIVALENTS — END OF YEAR
$ 27,053,382 $
22,925,400
The accompanying notes are an integral part of these consolidated financial statements
Page 14
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF CASH FLOWS
December 31, 2017 and 2016
RECONCILIATION OF OPERATING INCOME TO NET CASH
FLOWS FROM OPERATING ACTIVITIES
Operating income
Noncash items included in operating income
Depreciation and amortization
Depreciation charged to other accounts
Pension expense - GASB 68
Deferred Pension Contributions - GASB 68
OPEB
Changes in assets and liabilities
Accounts receivable and unbilled revenues
Materials and supplies
Prepaid expenses and other current assets
Accounts payable
Customer deposits
Other current liabilites
NET CASH FLOWS FROM OPERATING ACTIVITES
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE BALANCE SHEET
Operating
Designated
Restricted funds - current
Restricted funds - non -current
Total Cash and Investments
Less: Long-term investments
Mark to market adjustments
TOTAL CASH AND CASH EQUIVALENTS
gn17 gn1 R
$ 2,633,222 $ 2,502,037
6,531,640
6,237,033
344,042
264,368
2,269,611
1,180, 590
(1,235,820)
(1,061,245)
397,350
719,218
(592,348) (325,520)
(20,915) (17,539)
(173,927) (22,362)
(160,769) (476,588)
20,027 44,668
1 RR d77 77d 7nA
$ 10,170, 585 $ 9,268,868
$ 8,460,571
13, 710, 369
4,830,995
1 Al r11Z
26, 62U, 446
(1,698,880)
(RR 1 RM
$ 7,852,130
10, 759, 538
4,293,285
1,876,032
24, 780, 985
(1,698,880)
(15R 7nq,1
$ 27, 053, 382 $ 22, 925,400
The accompanying notes are an integral part of these consolidated financial statements
Page 15
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION
The Truckee Donner Public Utility District (the District) was formed and operates under the State of
California Public Utility District Act. The District is governed by a board of directors which consists of five
elected members. The District provides electric and water service to portions of Nevada and Placer
Counties described as Truckee. The electric and water service operations are separately maintained and
operated. These financial statements reflect the combined electric and water operations of the District. All
significant transactions between electric and water operations have been eliminated. These eliminations
include power purchases and rent for shared facilities.
The District's blended component units consist of organizations whose respective governing boards are
comprised entirely of the members of the District's Board of Directors. These organizations are reported as
if they are a part of the District's operations. The entities are legally separate, however, in the case of the
Truckee Donner Public Utility District Financing Corporation, financial support has been pledged and
financial and operational policies may be significantly influenced by the District.
The financial results of these blended component units are not included in this report. However,
the District has issued an additional consolidated report that includes these component units. A
copy of that report can be requested from the District.
Truckee Donner Public Utility District Financing Corporation is a legal entity that was created to issue and
administer Certificates of Participation on behalf of the District. (See note 5).
Separate standalone financial statements are not available for the blended component units described
above. Unless noted, disclosures relating to the component units are the same as for the District.
B. ACCOUNTING POLICIES
The financial statements of the District have been prepared in conformity with accounting principles
generally accepted in the United States of America. The Governmental Accounting Standards Board
(GASB) is the accepted standard setting body for establishing governmental accounting and financial
reporting principles.
The financial statements are reported using the economic resources measurement focus and the accrual
basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and
expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains,
losses, assets and liabilities, that are a result of exchange and exchange like transactions, are recognized
when the exchange takes place.
Page 16
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. USE OF ESTIMATES
Preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
D. CASH AND CASH EQUIVALENTS
For the purpose of the accompanying statement of cash flows, the District considers all highly liquid
instruments with original maturities of three months or less when purchased to be cash equivalents and are
shown in the financial statements as "Cash Funds".
E. INVESTMENTS
The District pools cash and investments. The District's investment policy allows for investments in
instruments permitted by the California Government Code and/or the investments permitted by the trust
agreements on District financing. The District's investment policy contains provisions intended to limit the
District's exposure to interest rate risk, credit risk, and concentration of credit risk. Investment income from
pooled investments is allocated to all funds in the pool. Interest is allocated on the basis of month end cash
amounts for each fund as a percentage of the total balance.
The District categorizes the fair value measurements of its investments based on the hierarchy established
by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on
the valuation inputs used to measure an assets fair value: Level 1 inputs are quoted prices in active markets
for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant
unobservable inputs. The District does not have any investments that are measured using Level 3 inputs.
F. DESIGNATED ASSETS
The board has designated certain resources for future capital projects, replacements, and operational
needs.
G. RESTRICTED ASSETS
Restricted assets are assets restricted by the covenants of long-term financial arrangements or other third
party legal restrictions. Restricted assets are used in accordance with their requirements and where both
restricted and unrestricted resources are available for use, restricted resources are used first and then
unrestricted as they are needed.
H. ACCOUNTS RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS
Accounts receivable are recorded at the invoiced amount and are reported net of allowances for doubtful
accounts of $25,200 and $34,300 for 2017 and 2016, respectively.
I. MATERIALS AND SUPPLIES
Materials and supplies are recorded at average cost.
Page 17
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J. DEBT PREMIUM, BOND ISSUANCE COSTS, AND DISCOUNTS
Original issue and reacquired bond premiums and discounts relating to revenue bonds are amortized over
the terms of the respective bond issues using the effective interest method. Debt issuance costs are
expensed in the period incurred.
K. SPECIAL ASSESSMENT RECEIVABLE
Special assessment receivable represent amounts due from property owners within the Donner Lake
Assessment District for improvements made by the District pursuant to an agreement with the property
owners to improve their water quality as discussed in note 7.
L. AMORTIZED EXPENSES
In 2003, the District entered into a broadband dark fiber maintenance agreement with Sierra Pacific
Communications (SPC) which is included in the line item "other non -current assets" in the accompanying
Statement of Net Position. SPC subsequently assigned the agreement to AT&T. The agreement is expected
to provide benefit to the District over the estimated 20-year life of the agreement. (See note 4).
M. CAPITAL ASSETS
Capital assets are generally defined by the District as assets with an initial, individual cost of more than
$10,000 and an estimated useful life of at least two years.
Capital assets of the District are stated at the lower of cost or the acquisition value at the time of contribution
to the District. Major outlays for plant are capitalized as projects are constructed. Depreciation on capital
assets is calculated using the straight-line method over the estimated useful lives of the assets, which are
as follows:
Distribution Plant
Electric 23 — 35 years
Water 15 — 40 years
Computer software and hardware 3 — 7 years
Building and improvements 20 — 33 years
Equipment and furniture 4 — 10 years
It is the District's policy to capitalize interest paid on debt incurred for significant construction projects while
those projects are under construction, less any interest earned on related unspent debt proceeds. No new
debt related to capital assets was issued in 2017 and 2016; no interest was capitalized in 2017 or in 2016.
N. COMPENSATED ABSENCES
Under terms of employment, employees are granted sick leave and vacations in varying amounts. Only
benefits considered to be vested are disclosed in these statements. Vested vacation and sick leave pay is
accrued when earned in the financial statements. The liability is liquidated from general operating revenues
of the utility.
Page 18
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
O. REVENUE RECOGNITION
Unbilled revenues, representing estimated consumer usage for the period between the last meter reading
and the end of the period, are accrued in the period of consumption. Water customers without meters are
billed on a flat -rate basis, and revenues are recorded as billed. Revenues from connection fees are
recognized upon completion of the connection. Income that the District has earned through investing its
excess cash is reflected within income from investments when earned.
P. REVENUE AND EXPENSE CLASSIFICATION
The District distinguishes operating revenues and expenses from non -operating items in the preparation of
its financial statements. Operating revenues and expenses generally result from providing electric and
water services in connection with the District's principal ongoing operations. The principal operating
revenues are sales to customers. The District's operating expenses include power purchases, labor,
materials, services, and other expenses related to the delivery of electric and water services. All revenues
and expenses not meeting this definition are reported as non -operating revenues and expenses, or capital
contributions and other.
Q. POWER PURCHASES AND TRANSMISSION
In 1999, the District entered into an agreement with Sierra Pacific Power Company dba NV Energy (SPPC),
whereby SPPC will provide transmission services to the District through December 31, 2027. In addition,
the District purchases scheduling services from Utah Municipal Power Systems and the scheduling services
are included in the monthly power billings from UAMPS. The purchase of transmission services from NV
Energy represented 4.4% and 6.1 % of total purchased power costs in 2016 and 2017, respectively.
In December of 2005, the District entered into an agreement with UAMPS. Subsequently, the District
entered into many pooling appendices for power capacity and energy that relate to various time periods
from January 2008 through March 2028. Also in 2009, the District signed an agreement with UAMPS for
approximately 5 MW of the Nebo natural gas generation plant capacity. In August 2012, the Horse Butte
Wind project began commercial operation and the District owns approximately 15 MW of nameplate
capacity that generates about 5 MW on average. The District has also invested in the Veyo Heat Recovery
project that came on line in mid-2016. The District will expect about 1.7 MW of carbon free generation from
this generation source.
In August of 2007, the District entered into an agreement with Western Area Power Administration (WAPA)
for the delivery of Stampede Dam Hydro generation. In accordance with this agreement, the District is
entitled to a portion of the power generated by the Stampede Dam Hydro generation. This generation is
dependent upon the amount of water that is made available to the generator. This agreement is effective
through 2024.
In 2017 and 2016, the UAMPS contract, along with its appendices, and the WAPA contract for Stampede
Dam Hydro comprised the majority of a diversified power portfolio that balanced risk and cost for the District.
Page 19
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
R. CAP AND TRADE PROGRAM PROCEEDS
California Assembly Bill 32 (AB32) is an effort by the State of California to set a 2020 greenhouse gas
(GHG) emissions reduction goal into law. AB32 requires California to lower greenhouse gas emissions to
1990 levels by 2020. Central to this initiative is the implementation of a cap and trade program, which covers
major sources of GHG emissions in the State including power plants. The California Cap and Trade
Program is designed to achieve cost-effective emissions reductions across the capped sectors. The
program sets maximum statewide GHG emissions for all covered sectors each year ("cap"), and allows
covered entities to sell off allowances ("trade"). An allowance is a tradable permit that allows the emission
of one metric ton of COz. The California carbon price is driven by allowance trading. The District is subject
to AB32 and has excess allowances due to reducing carbon -based generation in its power portfolio.
In 2017 and 2016, the District sold its excess allowances in the program auctions and the proceeds were
recorded as $1,140,372 and $1,172,306 operating revenue for the respective years. The auction proceeds
are held in a restricted fund and are used to purchase qualified renewable power (See note 2).
S. INCOME TAXES
As a government agency, the District is exempt from payment of federal and state income taxes.
T. CONTRIBUTED CAPITAL ASSETS
A portion of the District's capital assets have been obtained through amounts charged to developers for
plant constructed by the District; direct contributions of capital assets from developers and other parties; as
well as assessments of local property owners. These items are recognized within capital assets as
construction is completed for plant constructed by the District based on the cost of the items, when received
for contributed capital assets based on the actual or estimated fair value of the contributed items, or upon
completion of the related project for development agreements. The District records amounts received within
capital contributions when a legally enforceable claim is established. Until the District meets the criteria to
record the amounts described above as capital contributions, any amounts received are recorded within
unearned revenues on the Statement of Net Position.
U. OTHER — PENSION SIDEFUND
As a result of implementing GASB Statement No. 68, the pension side -fund payoff that occurred in 2011
and which had been reported in the financial statements as an asset was written off due to the District's
participation in CaIPERS cost -sharing multi -employer retirement benefit plan. However, the liability for the
payoff remains until paid in full thru 2022. The intercompany fund transfers for the principal portion of the
debt service between the electric and water utility is included as "other."
V. PENSION
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of the District's California Public
Employee's Retirement System (CaIPERS) plans (Plans) and the additions to/deductions from the Plans'
fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this
purpose, benefit payments (including refunds of employee contributions) are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
Page 20
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
W. RECENT ACCOUNTING PRONOUNCEMENTS IMPLEMENTED BY THE DISTRICT
In March 2016, GASB issued Statement No. 82, Pension Issues, an amendment of GASB Statements No.
67, No. 68, and No. 73. The primary objective of this statement is to address issues regarding (1)
presentation of payroll -related measures in required supplementary information, (2) selection of
assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for
financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee
(plan member) contribution requirements. The District implemented the statement in the current year.
X. DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES
Consists of deferrals for changes in the net pension liability as defined under GASB Statement No. 68.
Y. UNAMORTIZED LOSS ON BOND REFUNDING
For current and advanced refunding results in defeasance of debt, the difference between the reacquisition
price and the net carrying amount of the old debt (Gain or loss) is deferred and amortized as a component
of interest expense over the remaining life of the old debt or the new debt, whichever is shorter. These
amounts are reported as deferred outflow on the statements of net position.
Z. ACCOUNTING PRONOUNCEMENTS TO BE IMPLEMENTED IN UPCOMING YEARS
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions, addresses accounting and financial reporting for OPEB that is provided to the employees of state
and local governmental employers. This Statement establishes standards for recognizing and measuring
liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. This
statement is effective for the District fiscal year ending December 31, 2018. The District has elected not to
implement GASB Statement No. 75 early and has not determined its effect on the District's financial
statements.
GASB Statement No. 83, Certain Asset Retirement Obligations, addresses accounting and financial
reporting for certain asset retirement obligations (ARO's). The District has not determined what impact, if
any, this pronouncement will have on the financial statements. Application of this statement is effective for
the District's fiscal year ending December 31, 2019.
GASB Statement No. 87, Leases, addresses accounting and financial reporting for leases by governments.
This Statement increases the usefulness of financials statements by requiring recognition of certain lease
assets and liabilities for leases that previously were classified as operating leases by establishing a single
model of lease accounting based on the foundational principle that leases are financings of the right to use
an underlying asset. Under this statement, a lessee is required to recognize a lease liability and intangible
right -to -use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of
resources, thereby enhancing the relevance and consistency of information about leasing activities. The
District has not determined what impact, if any, this pronouncement will have on the financial statements.
This statement is effective for the District fiscal year ending December 31, 2020.
Page 21
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS
Cash, cash equivalents and investments are recorded in accounts as either restricted or unrestricted as
required by the District's certificates of participation indentures or other third -party legal restrictions.
Restricted assets represent funds that are restricted by certificates of participation covenants or third party
contractual agreements. Assets that are allocated by resolution of the Board of Directors are considered to
be Board designated assets. Board designated assets are a component of unrestricted assets as their use
may be redirected at any time by approval of the Board. Upon Board approval, assets from board
designated accounts may be used to pay for selected capital projects. Such accounts have been designated
by the Board for the following purposes:
Electric Capital Replacement
Starting in 2009, the Board set aside funds designated for future electric infrastructure replacement.
Electric Vehicle Reserve
Beginning in 2009, the Board set aside funds designated for future electric utility vehicle
replacements.
Electric Rate Reserve
In compliance with Board rules, the District created an electric rate stabilization fund in anticipation
of future costs. During both 2017 and 2016, there was no utilization of these funds to offset
increased power costs in lieu of raising electric rates.
Reserve for Future Meters
Prior to 1992, connection fees charged to applicants for water service included an amount, which
was maintained in a designated fund, to offset the cost of future metering. In 2008, the Board
adopted an ordinance to charge a $5 monthly surcharge to all customers of treated water beginning
January 2009 through December 2013. Water meters and automated meter reading devices are
being installed, and customers will be billed volumetrically in accordance with California Assembly
Bill 2572. As meters are installed, these funds are used to pay for related costs.
Water Vehicle Reserve
Beginning in 2009, the Board set aside funds designated for future Water Utility vehicle
replacements.
Prepaid Connection Fees
In compliance with Board rules, the District has set aside prepaid connection fees to cover
installation costs of water services.
Debt Service Coverage and Operating Reserve Fund
Effective 2007, the Board has voluntarily set aside funds to improve the District's cash -to -debt -
service ratio. In 2017, no funds were used.
Page 22
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
Donner Lake Assessment District Surcharge Fund
The District established a monthly billing surcharge in the amount of $6.65 applicable to customers
in the Donner Lake area to provide revenue to pay the remainder of the cost of reconstruction
effective October 2006.
Deferred Liabilities Reserve
Starting in 2017, the Board established a reserve to protect the District from volatility in pension,
other post -employment benefits, and worker's compensation premiums.
As of December 31, Board designated accounts at fair value consisted of the following
2017
2016
Electric capital replacement fund
$ 4,035,103
$ 3,428,130
Electric vehicle reserve
602,706
378,880
Electric rate reserve
5,449,424
4,400,251
Electric deferred liabilites reserve
1,000,000
-
Reserve for future meters
507,653
533,777
Water vehicle reserve
60,897
-
Prepaid connection fees
80,261
79,181
Debt service & operating reserve fund
1,869,954
1,847,559
Donner Lake Assessment District surcharge fund
104,371
91,760
Totals
$ 13, 710, 369
$ 10, 759, 538
Certain assets have been restricted by bond covenants or third party contractual agreements for the
following purposes:
Certificates of Participation
Prepayments to the Trustee from the District for upcoming debt payments.
Facilities Fees
The District charges facilities fees to applicants for new service to cover the costs of infrastructure
needed to meet their systems demand. The use of such funds is restricted by California state law.
Department of Water Resources (DWR) Prop 55 Reserve Fund
Regulations relating to the Department of Water Resources loan require the accumulation of a
reserve fund as security for each principal and interest payment as they come due. Annual
payments into the fund were required for each of the first ten years beginning April 1, 1996. The
total reserve fund equals two semi-annual payments and was fully funded during 2006. These funds
are set aside for the life of the borrowed amount. All of the reserve funds are invested in the State
of California Local Agency Investment Fund.
Page 23
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
Glenshire Escrow Account
The District received cash and other assets as part of its acquisition of the Glenshire Mutual Water
Company. Also, the District received a monthly water system upgrade surcharge from Glenshire
residents until November 30, 2017. This cash was utilized to pay the installment loan related to the
Glenshire water system improvements as specified in the terms of the acquisition agreement.
In 2011, the District sold a parcel from the Glenshire Mutual Water Company assets. The net
proceeds of $294,940 were transferred to the Glenshire Escrow Account and the monthly water
system upgrade surcharge was reduced from $10.75 to $4.75.
In 2017, the final debt payment was made and the surcharge ended.
Donner Lake Special Assessment District Improvement and Reserve Fund
The District established the Donner Lake Special Assessment District (DLAD) Improvement Fund
to account for all funds received from the Special Assessment Receivable, which will be used to
pay the debt service costs related to the Donner Lake Water System project. The DLAD
Improvement Fund also has a reserve fund as required by the California — Safe Drinking Water —
State Revolving Fund (SRF). This fund is required to set aside $40,043 semi-annually for ten years
beginning in 2006. The reserve fund was fully funded as of December 31, 2016.
AB32 Cap and Trade Auction Fund
The District electric utility is identified as an "Electric Distribution Utility" under the Cap and Trade
regulations and is therefore eligible to receive a direct allocation of allowances that can be sold in
an auction. The proceeds from quarterly allowance auctions are held in this restricted fund and
are used to purchase qualified renewable power. These funds are intended to mitigate the burden
on the consumer without impacting a carbon price signal.
Other (Area Improvement Funds)
The District received funds from the County of Nevada, which are to be used only for improvements
to specific areas within the District's boundaries in Nevada County. These areas include various
Nevada County assessment districts.
Page 24
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
As of December 31, restricted cash and cash equivalents and investments at fair value consisted of the
following:
Certificates of Participation
Facilities fees
DWR-Prop 55 reserve fund
Glenshire escrow accounts
Donner Lake Special Assessment District improvement
Donner Lake Special Assessment District reserve fund
AB 32 Cap and Trade Auction fund
Other (area improvement funds)
Total Restricted Cash and Cash
2017
2016
$ 1,020,999
$ 537,586
671,866
607,235
319,873
315,571
-
95,695
2,634,240
2,593,139
811,765
804,801
1,137, 796
1,163, 035
52,969
52,256
Equivalents and Investments $ 6,649,508 $ 6,169,318
Cash and investments are comprised of the following cash and cash equivalents and investments as of
December 31:
Cash and cash equivalents
Investments — government bonds
Totals
2017 2016
$ 27,001,935 $ 22,904,953
1,818,513 1,876,032
$ 28,820,448 $ 24,780,985
Cash and cash equivalents and investments were $28,820,448 and $24,737,083 at December 31, 2017
and 2016, respectively. Cash equivalents substantially consist of deposits in the state pooled fund, Placer
County pooled fund, money market funds and investments
Adjustments necessary to record investments at fair market value are recorded in the operating statement
as increases or decreases in investment income. Market values may have changed significantly after year
end.
FAIR VALUE MEASUREMENT
The District applies the provisions of Governmental Accounting Standards Board (GASB) Statement No.
72, Fair Value Measurement and Application, which requires governmental entities, to report certain
investments at fair value on the Statements of Net Position.
Investments are valued at fair value at December 31. Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The District categorizes its fair value measurements within the fair value
hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation
inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices for identical instruments
in active markets. Level 2 inputs are quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and model derived valuations in which all
Page 25
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
significant inputs are observable. Level 3 inputs are valuations derived from valuation techniques in which
significant inputs are unobservable.
The District classifies its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The District has the following fair value measurements as of December
31, 2017:
• US Government bonds and cash equivalents are valued using observable inputs (Level 2
inputs).
INVESTMENTS AUTHORIZED BY THE DISTRICT'S INVESTMENT POLICY
The District adopted an investment policy in 2006 which allowed for investments in instruments permitted
by the California Government Code and/or the investments permitted by the trust agreements on District
financing, including investments in the local government investment fund pool administered by the State of
California (LAIF), Placer County Treasurer's Investment Portfolio (PCTIP) pooled investment and Utah
Public Treasurers' Investment Fund (UPTIF). The District's investment policy contains provisions intended
to limit the District's exposure to interest rate risk, credit risk, and concentration of credit risk. At December
31, 2017 and 2016 the District's deposits and investments at fair value were held as follows:
Cash on hand
Deposits
LAIF
PCTIP
UPTIF
Money Market Funds
Government Bonds
Totals
DISCLOSURES RELATING TO INTEREST RATE RISK
2017
2016
$ 2,400
$ 2,400
1,083,310
964,122
9,915,618
8,006,871
7,933,761
6,853,226
7,446,510
6,944,706
620,336
133,628
1,818,513
1,876,032
$ 28,820,448 $ 24,780,985
Interest rate risk is the risk that changes in the market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater is the sensitivity of its fair value
to changes in market interest rates. Information about the sensitivity of the fair values of the District's
investments to market interest rate fluctuations is provided by the following table that shows the District's
investments by maturity for 2017 and 2016:
Investments and Deposits
Maturity
LAIF
3 months or less
PCTIP
3 months or less
UPTIF
3 months or less
Morgan Stanley Treasury
3 months or less
Fidelity Money Market Government Portfolio 57
3 months or less
Dreyfus Treasury Securities
3 months or less
Federal Farm Credit Banks
03/02/2021
Page 26
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
DISCLOSURES RELATING TO CREDIT RISK
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating
organization. LAIF, PCTIF and UPTIF do not have a rating provided by a nationally recognized statistical
rating organization. The Morgan Stanley Treasury is rated AAAm by S&P and Aaa-mf by Moody's. Federal
Farm Credit Banks is rated AA+ by S&P and Aaa by Moody's. The Dreyfus Treasury Securities is rated
Aaa-mf by Moody's and AAAm by S&P. The Fidelity Money Market is rated AAA-mf by Moody's and AAAm
by S&P.
CUSTODIAL CREDIT RISK
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution,
a government will not be able to recover its deposits or will not be able to recover collateral securities that
are in the possession of an outside party. The District's investment policy does not contain legal or policy
requirements that would limit the exposure to custodial credit risk for deposits. However, the California
Government Code requires that a financial institution secure deposits made by state or local governmental
units by pledging securities in an undivided collateral pool held by a depository regulated under state law
(unless waived by the government unit). The market value of pledged securities in the collateral pool must
equal at least 110% of the total amount deposited by the public agencies.
As of December 31, 2017 and 2016 all deposits were fully insured or collateralized.
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g.,
broker/dealer) to a transaction, a government will not be able to recover the value of its investment or
collateral securities that are in the possession of another party. The California Government Code and the
District's investment policy do not contain legal or policy requirements that would limit the exposure to
custodial credit risk for investments. With respect to investments, custodial credit risk generally applies
only to direct investments in marketable securities. Custodial credit risk does not apply to a local
government's indirect investment in securities through the use of mutual funds or governmental investment
pools (such as LAIF).
DEPOSIT IN STATE INVESTMENT POOL
The District is a voluntary participant in the Local Agency Investment Fund (LAIF). This investment fund
has an equity interest in the State of California's (State's) Pooled Money Investment Account (PMIA). PMIA
funds are on deposit with the State's Centralized Treasury System and are managed in compliance with
the California Government Code according to a statement of investment policy which sets forth permitted
investment vehicles, liquidity parameters, and maximum maturity of investments. The fair value of the
District's investment in this pool is reported in the accompanying financial statements at amounts based
upon the District's pro-rata share of the fair value provided by the LAIF for the entire LAIF portfolio (in
relation to the amortized cost of the portfolio). The balance available for withdrawal is based on the
accounting records maintained by the LAIF, which are recorded on an amortized cost basis.
DEPOSIT IN PLACER COUNTY TREASURER INVESTMENT POOL
The District is a voluntary participant in the Placer County Investment Portfolio (PCTIP). The District is
eligible to participate in PCTIP because a portion of the District's service area is in Placer County.
Investments are on deposit with the Placer County Treasurer and are managed in compliance with the
California Government Code according to a statement of investment policy which sets forth permitted
investment vehicles, liquidity parameters, and maximum maturity of investments. The fair value of the
Page 27
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
District's investment in this pool is reported in the accompanying financial statements at amounts based
upon the District's pro-rata share of the fair value provided by Placer County Treasurer for the entire PCTIP
(in relation to the amortized cost of the portfolio). The balance available for withdrawal is based on the
accounting records maintained by the Placer County Treasurer, which are recorded on an amortized cost
basis.
DEPOSIT IN UTAH PUBLIC TREASURERS' INVESTMENT FUND
The District is a voluntary participant in the Utah Public Treasurers' Investment Fund (UPTIF). The District
is eligible to participate in (UPTIF) through its membership with Utah Associated Municipal Power Systems
(UAMPS). Investments are on deposit with State of Utah public treasury and investments are restricted to
those authorized by the Utah Money Management Act and rules of the Money Management Council of
Utah. The fair value of the District's investments in this pool is reported in the accompanying financial
statements at amounts based upon the District's pro-rata share of the fair value provided by UPTIF through
UAMPS Member Retention Fund.
NOTE 3 — CAPITAL ASSETS
Capital assets consist of the following at December 31, 2017 and 2016:
January 1,
December 31,
2017
Additions
Reductions
2017
Electric distribution facilities
$ 58,345,690
$
2,191,342
$
(120,111)
$ 60,416,921
Water distribution facilities
108,860,825
4,898,966
(1,163,044)
112,596,747
General plant
15,062,278
988,813
(268,471)
15,782,620
182,268,793
8,079,121
(1,551,626)
188,796,288
Less: Accumulated depreciation
(63,372,738)
(6,840,212)
1,649,716
(68,563,235)
Construction work in progress
4,706,276
5,554,478
(7,379,733)
2,881,021
Totals
$ 123,602,331
$
6,793,387
$
(7,281,643)
123,114,074
January 1,
December 31,
2016
Additions
Reductions
2016
Electric distribution facilities
$ 54,721,615
$
4,391,867
$
(767,792)
$ 58,345,690
Water distribution facilities
107,005,578
2,023,496
(168,249)
108,860,825
General plant
13,887,881
1,332,733
(158,336)
15,062,278
175,615,074
7,748,096
(1,094,377)
182,268,793
Less: Accumulated depreciation
(58,042,448)
(6,485,285)
1,154,994
(63,372,738)
Construction work in progress
4,844,042
7,686,181
(7,823,947)
4,706,276
Totals
$ 122,416,668
$
8,948,992
$
(7,763,330)
$ 123,602,331
As of December 31, 2017 and 2016, the plant in service included land and land rights of $3,318,346 which
are not being depreciated.
A portion of the plant has been contributed to the District. When replacement is needed, the District replaces
the contributed plant with District -financed plant.
Page 28
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 4 — TELECOMMUNICATION SERVICES
In 1999, the District initiated a project to expand their basic service offerings to include internet access,
cable television and voice delivered over fiber optic networks (the broadband project). The District
completed the broadband design project and obtained the necessary regulatory approvals and franchises
needed to construct and launch the broadband project. A local cable television service provider filed an
objection in September 2004 with the Nevada County Local Agency Formation Commission (LAFCO), the
entity responsible for providing regulatory approval for the broadband project. After denying the cable
television provider's request for a reconsideration of their approval of the District's project, the cable
television provider filed a lawsuit against LAFCO. The District was not named in the lawsuit. A ruling on the
lawsuit was received in January 2006. LAFCO prevailed on all portions of the cable television provider's
claim. The cable television provider filed an appeal; however, in June of 2007, the Court ruled in favor of
LAFCO, upholding the initial ruling.
Since 2009, the District has been exploring options to sell or lease the existing infrastructure to provide a
return on investment in the project. Expenses incurred by the District to date on the broadband project total
$2,834,079, of which $496,990 was expensed in 2014 for legal fees and preliminary feasibility studies. In
2017 and 2016 there were no material expenditures for this project.
In 2018, The District signed a Memorandum of Understanding with Plumas Sierra Telecommunications to
offer services utilizing these four fibers from Reno to Sacramento in future years.
NOTE 5 — LONG-TERM DEBT
Long-term debt consisted of the following at December 31, 2017:
Pension Obligation Bonds
Electric, 2.47%
due semi-annually to 2020
State Re\toNng Fund Loan —
Water, 2.34%, due semi-annually
beginning in 2006 to 2026.
Certificates of Participation —
Water, 4.00% to 5.00%,
due serially to 2021
refinanced in 2016
Certificates of Participation —
Water, 2.00% to 4.00%,
due serially to 2035 (net
premiums of $475,059)
Department of Water Resources,
3.18%, due semiannually to
2021, secured by real
and personal property.
Installment loan, 4.58%
due serially to 2023
Totals
January 1,
2017 Additions
$ 5,149, 000 $
6,786,402
3,266,000
13, 997, 077
1,275,743
December 31
Reductions 2017
$ (404,000) $ 4,745,000 $
(645,806) 6,140,596
(632,000) 2,634,000
(562,018) 13,435,059
(268,092) 1,007,651
374,548 (316,145) 58,403 _
$ 30,848,770 $ $ (2,828,061) $ 28,020,709 $
Due within
one year
1,269,000
661,006
644,000
550,000
276,650
10,658
3,411,314
Page 29
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 5 — LONG-TERM DEBT (Continued)
Long-term debt consisted of
the following at December 31, 2016:
January 1,
December
31,
Due within
2016 Additions Reductions
2016
one year
Pension Obligation Bonds
Electric, 5%
due semi-annually to 2020
$ 5,584,000 $ - $
(5,584,000) $
-
$
refinanced in 2016
Pension Obligation Bonds
Electric, 2.47%
due semi-annually
- 5,589,000
(440,000)
5,149,000
809,000
State Re\vlving Fund Loan —
Water, 2.34%, due semi-annually
beginning in 2006 to 2026
7,417,358 -
(630,956)
6,786,402
645,807
Certificates of Participation —
Water, 4.00% to 5.00%,
due serially to 2021
refinanced in 2016
3,765,000 -
(3,765,000)
-
-
Certificates of Participation —
Water, 1.54%
due serially to 2021
- 3,266,000
3,266,000
632,000
Certificates of Participation —
Water, 2.00% to 4.00%,
due serially to 2035 (net
premiums of$502,077)
14,544,095
(547,018)
13,997,077
535,000
Department of Water Resources,
3.18°%, due semiannually to
2021, secured by real
and personal property.
1,535,448
(259,705)
1,275,743
268,092
Installment loans, 5.4% to 6.23%,
various payment terns and
due dates, secured by
equipment.
673,789 -
(299,242)
374,548
316,144
Totals
$ 33,519,690 $ 8,855,000 $
(11,525,921) $
30,848,770
$ 3,206,043
During April 2004, the District obtained financing in the form of a State Revolving Fund Loan, the proceeds
of which were utilized in the replacement of the Donner Lake water system. The District submitted
expenditures to the State for reimbursement of $12,732,965. The semi-annual principal and interest
payments are $400,426 and commenced in 2006. In 2004, the remaining balance of $12,227,122 was used
to pay off the temporary lines of credit obtained in 2001 and 2002 to fund the Donner Lake project. (See
note 8).
On October 12, 2006, through the Truckee Donner Public Utility District Financing Corporation on behalf of
the District issued $26,570,000 of Certificates of Participation to refund 100% of the outstanding balance
of Certificates issued in 1996, complete the funding of the Donner Lake Assessment District water system,
and fund water system capital improvements. The refunding portion of the 2006 COP's, totaling $8,465,000,
has an average interest rate of 4.10%. The refunded 1996 COP'S had an average interest rate of 5.41 %.
The net proceeds of $7,500,557 (after payment of $63,733 in underwriting fees, insurance and other
isuance costs) plus an additional $1,315,194 of reserve fund monies were used to prepay the outstanding
debt service requirements on the 1996 COP's. The terms of the Certificates call for payments to be made
Page 30
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 5 — LONG-TERM DEBT (Continued)
only from the net revenues of the Water Division and the debt is secured by this revenue. These revenues
are required to be at least equal to 125% of the debt service for each year.
In 2015, a portion of the 2006 COP was refunded. Since a portion of the 2006 COP was used for advance
refunding of previous COP, that portion could not be advance refunded at the time of the refunding. The
new 2015 refunding did not require a reserve fund. The reserve fund was liquidated and applied towards
reducing the debt principal. The estimated net present value savings were $1,600,000 or 10% over the
remaining life of issuance.
In 2016, the remaining portion of the 2006 COP was refunded. Due to the refunding an estimated net
present value savings of $222,000 was achieved.
Under the Safe Drinking Water Bond Law of 1986, the Department of Water Resources provided a
$5,000,000 loan to the District in 1993. The loan was to finance capital improvements to the public water
supply and to reduce water quality hazards. The terms of the loan call for payments to be made only from
the net revenues of the Water Division, which are required to be sufficient to pay the debt service for each
year.
In June 2011, the District refunded (refinanced) an existing $7.8 million pension side fund obligation for its
participation in CalPERS. Prior to 2011, the annual side fund payments were expensed and described in
the Notes to Financial Statements. The pension side fund liability was amortized through June 2022 with a
7.75% rate. This liability was not required to be reported on the District's Statement of Net Position, but the
future pension expense was included in budget and rate calculations. The new refunding rate of 5% reduced
the District's annual pension costs by almost $100,000 through 2022. In 2016, the District refunded the
pension side fund again earning the District annual savings of $30,000 or $164,000 in total.
As a normal part of its operations, the District finances the acquisition of certain assets through the use of
installment loans. These loans have been used to finance the purchase of vehicles, equipment, and certain
water system improvements. There were no additional installment loans in 2017 or in 2016.
Scheduled payments on debt are:
Principal
2018
$ 3,411,314
2019
3,117, 221
2020
3,228,784
2021
3,179, 833
2022
1,907,221
2023-2027
6,221,277
2028-2032
4,255,000
2033-2037
2,225,000
Plus: Unamortized premiums
Interest
Total
$ 855,887
$ 4,267,201
724,222
3,841,442
648,447
3,877,231
563,954
3,743,787
486,560
2,393,781
1,747,794
7,969,070
903,838
5,158, 838
149,425
2,374,425
$ 27, 545, 650 $ 6,080,127 $ 33, 625, 776
475,059
$ 28,020,709
Page 31
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 6 — UNEARNED REVENUES
Transactions that have not yet met revenue recognition requirements are recorded as a non -current liability
and reflected in the accompanying Statement of Net Position. As of December 31, 2017 and 2016,
unearned revenues consist of unearned special assessment revenues, development agreement deposits,
connection fees, and other deposits.
Unearned revenues consisted of the following at December 31, 2017 and 2016:
January 1,
December 31,
2017
Additions
Reductions
2017
Development agreement deposits
2,237,330
1,134,433
(603,342)
2,768,421
Connection fees and other deposits
836,178
823,219
(773,741)
885,656
Totals
$ 3,073,507
$ 1,957,652
$ (1,377,083)
$ 3,654,076
January 1,
December 31,
2016
Additions
Reductions
2016
Development agreement deposits
2,156,844
644,922
(564,436)
2,237,330
Connection fees and other deposits
1,069,865
987,611
(1,221,298)
836,178
Totals
3,226,709
1,632,533
(1,785,734)
3,073,507
NOTE 7 — DONNER LAKE WATER COMPANY ACQUISITION
In 2001, the District acquired the Donner Lake Water Company by initiating an eminent domain lawsuit. As
a part of the takeover, the District replaced the entire water system, which cost approximately
$15.6 million and was completed in 2006. The District initially estimated the replacement cost to be
$13 million. The Donner Lake property owners agreed to reimburse the District for the full costs of the
replacement. Therefore, an assessment was placed on each Donner Lake homeowner's property for a pro-
rata share of the $13 million payable immediately or with an option to pay over 20 years. The assessment
is collected by Nevada County and Placer County on behalf of the District and is secured by the Donner
Lake property owners. A monthly $6.65 water system upgrade surcharge is paid by the Donner Lake
customers to reimburse the District for the $2.6 million cost incurred in excess of the assessment.
In April 2004, the District obtained financing in the form of a State Revolving Fund Loan for $12,732,965 at
a rate of 2.34%. The District is required to fund a reserve account by making semi-annual reserve payments
in the amount of $40,043 for a 10-year period. The reserve fund is fully funded as of December 31, 2016.
As of December 31, 2017 and 2016, the assessment receivable from the property owners was $3,005,178
and $3,692,876 respectively, of which $736,020 and $714,622 is due in the next year. These amounts are
shown as Special Assessments Receivable in the Statement of Net Position. The proceeds of the
assessment and surcharge are placed in the Donner Lake Special Assessment District Improvement Fund
and used to pay the debt service for the water system improvements.
Page 32
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 8 — EMPLOYEE BENEFIT PLANS
A. PENSION PLANS
Plan Description — All qualified permanent and probationary employees are eligible to participate in
the District's Miscellaneous Employee Pension Plans, cost -sharing multiple employer defined benefit
pension plans administered by the California Public Employees' Retirement System (CaIPERS).
Benefit provisions under the Plans are established by State statute and Local Government resolution.
CaIPERS issues publicly available reports that include a full description of the pension plans regarding
benefit provisions, assumptions and membership information that can be found on the CaIPERS
website.
Benefits Provided — CalPERS provides service retirement and disability benefits, annual costs of living
adjustments and death benefits to plan members, who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full time employment. Members
with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All
members are eligible for non -duty disability benefits after 10 years of service. The death benefits is
Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as
specified by the Public Employees' Retirement Law. The 2.7% at 55 Miscellaneous Plan is closed to
new entrants.
The plans' provisions and benefits in effect at December 31, 2017 are summarized as follows:
Miscellaneous
Prior to
On or after
Hire Date
January 1, 2013
January 1, 2013
Benefit Formula
2.7% @ 55
2% @ 62
Benefit Vesting Schedule
5 years service
5 years service
Benefit Payments
monthly for life
monthly for life
Retirement Age
50 and Up
52 and Up
Monthly Benefits, as a %of eligible compensation
2.0% - 2.7%
1.0% to 2.5%
Required Employee Contributions Rates
8%
6.25%
Required Employer Contributions Rates
11.049%
6.533%
Contributions — Section 208149(c) of the California Public Employee's Retirement Law requires that
the employer contribution rates for all public employers be determined on an annual basis by the
actuary and shall be effective on the July 1 following notice of a change in the rate. Funding
contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS.
The actuarially determined rate is the estimated amount necessary to finance the costs of benefits
earned by employees during the year, with an additional amount to finance any unfunded accrued
liability. The District is required to contribute the difference between the actuarially determined rate
and the contribution rate of employees.
Hire Date
Benefit Formula
2017 Employer Contributions
2016 Employer Contributions
Miscellaneous
Prior to On or after
January 1, 2013
January 1, 2013
2.7%@55
2%@62
$1,044,745
$94,014
$979,835
$69,062
Page 33
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 8 — EMPLOYEE BENEFIT PLANS (Continued)
B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF
RESOURCES RELATED TO PENSIONS
As of December 31, 2017, the District reported net pension liabilities for its proportionate shares of
the net pension liability as follows:
Proportionate Share of Net Pension Liability
Fiscal Year Ending
June 30, 2017 June 30, 2016
$11, 975, 655 $10, 250, 329
The District's net pension liability is measured as a proportionate share of the net pension liability. The
net pension liability is measured as of June 30, 2017, and the total pension liability used to calculate
the net pension liability was determined by an actuarial valuation as of June 30, 2016 rolled forward to
June 30, 2017 using standard update procedures. The District's proportion of the net pension liability
was based on a projection of the District's long-term share of contributions to the pension plans relative
to the projected contributions of all participating employers, actuarially determined. The District's
proportionate share of the net pension liability for the Plan for the measurement date of June 30, 2017
and June 30, 2016 is as follows:
Percentage Share of Risk Pool
Measurement Date June 30, 2017 June 30, 2016 Change
Percentage of Plan NPL 0.30379% 0.29837% 0.00542%
For the years ended December 31, 2017 and 2016 the District recognized pension expense of
$2,269,610 and $1,220,591 respectively. At December 31, 2017 the District reported deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows of Deferred Inflows of
Resources Resources
Changes of assumptions $1,796,683
Differences between expected and actual experience (208,908)
Differences between projected and actual investment earnings 439,877
Differences between employer's contributions and (343,024)
proportionate share of contributions
Change in employer's proportion 544,250
Pension contributions made subsequent to the measurement 870,580
date
Total $3,651,390 ($551,932)
Page 34
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 8 — EMPLOYEE BENEFIT PLANS (Continued)
B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF
RESOURCES RELATED TO PENSIONS (Continued)
$870,580 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended
December 31, 2017. Other amounts reported as deferred outflows of resources and deferred inflows
of resources related to pensions will be recognized as pension expense as follows:
Year Ended
December 31
Amount
2018
$699, 571
2019
$1,107, 687
2020
$682, 783
2021
($261,163)
$2, 228, 878
Actuarial Assumptions — The total pension liabilities in the June 30, 2017 actuarial valuations were
determined using the following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Payroll Growth
Salary Increase
Investment Rate of Return
Mortality (1)
Miscellaneous
2017
June 30, 2016
June 30, 2017
Entry -Age Normal Cost Method
7.15%
2.75%
3.00%
Varies by Entry Age and Service
7.5% Net of Pension Plan Investment and Administrative
Expenses; includes Inflation
Derived using CalPERS membership data for all funds
(1) The mortality table used was developed based on CalPERS' specific data. The Table includes 20 years of
mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to
the 2014 experience study report.
All underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2017
valuation were based on results of a January 2014 actuarial experience study for the period 1997 to
2011. Further details of the Experience Study can be found on the CalPERS website.
Page 35
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 8 — EMPLOYEE BENEFIT PLANS (Continued)
B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF
RESOURCES RELATED TO PENSIONS (Continued)
Discount Rate - The discount rate used to measure the total pension liability as of December 31, 2017
was 7.15%. To determine whether the municipal bond rate should be used in the calculation of a
discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate
that would be different from the actuarially assumed discount rate. Based on the testing, none of the
tested plans run out of assets. Therefore, the current 7.15% discount rate used is adequate and the
use of the municipal bond rate calculation is not necessary. The long term expected discount rate of
7.15% will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test
results are presented in a detailed report that can be obtained from the CalPERS website.
The long-term expected rate of return on pension plan investments was determined using a building-
block method in which best -estimate ranges of expected future real rate of return (expected returns,
net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CaIPERS took into account both short-term and
long-term market return expectations as well as the expected pension fund cash flows. Using historical
returns of all the funds' asset classes, expected compound returns were calculated over the short-term
(first 10 years) and the long term (11-60 years) using a building-block approach. Using the expected
nominal returns for both short-term and long-term, the present value of benefits was calculated for each
fund. The expected rate of return was set by calculating the single equivalent expected return that
arrived at the same present value of benefits for cash flows as the one calculated using both short-term
and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate
calculated above and rounded down to the nearest one quarter of one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return
was calculated using the capital market assumptions applied to determine the discount rate and asset
allocation. The target allocation shown below was adopted by CaIPERS' Board effective on
July 1, 2015.
Asset Class
Global Equity
Global Fixed Income
Inflation Sensitive
Private Equity
Real Estate
Infrastructure and Forestland
Liquidity
Total
New Strategic Real Return Real Returns
Allocation Years 1-10 (a) Years 11+(b)
51.0%
5.25%
5.71 %
20.0%
0.99%
2.43%
6.0%
0.45%
3.36%
10.0%
6.83%
6.95%
10.0%
4.50%
5.13%
2.0%
4.50%
5.09%
1.0%
-0.55%
-1.05%
100.0%
(a) An expected inflation rate of 2.5% was used for this period
(b) An expected inflation rate of 3.0% was used for this period
Page 36
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 8 — EMPLOYEE BENEFIT PLANS (Continued)
B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF
RESOURCES RELATED TO PENSIONS (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate - The following presents the District's proportionate share of the net pension liability for each Plan,
calculated using the discount rate for each Plan, as well as what the District's proportionate share of
the net pension liability would be if it were calculated using a discount rate that is 1 % point lower or 1 %
point higher than the current rate:
Miscellaneous
Measurement Date June 30,2017
1% Decrease 6.15%
Net Pension Liability $18,386,901
Current Discount Rate 7.15%
Net Pension Liability $11,975,655
1% Increase 8.15%
Net Pension Liability $6,665,743
Pension Plan Fiduciary Net Position — Detailed information about each pension plan's fiduciary net
position is available in the separately issued CaIPERS financial reports.
C. PAYABLE TO THE PENSION PLAN
At December 31, 2016 and 2015 respectively the District did not report a payable for outstanding
required contributions to the pension plan.
D. DEFERRED COMPENSATION PLAN
The District maintains two deferred compensation plans: a 401(a) and a 457 plan, (the Plans) for certain
qualified employees. The District matches 6.78% of eligible employee contributions. In 2017 and 2016,
the total match was $106,332 and $91,066 in the respective years. The District has no liability for
losses under the Plans, but does have the duty of due care that would be required of an ordinary
prudent investor. The District has not reflected the Plans' assets and corresponding liabilities (if any)
on the accompanying Statement of Net Position.
Page 37
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 8 — EMPLOYEE BENEFIT PLANS (Continued)
E. OTHER POST EMPLOYMENT BENEFITS (OPEB)
The District administers a single -employer defined benefit healthcare plan (The Retiree Health Plan).
Contribution requirements and benefit provisions are established through collective bargaining agreements
and may be amended only through negotiations between the District and the Union. The plan provides
health insurance contributions for eligible retirees and their spouses through the District's group health
insurance plan, which covers both active and retired members. Health insurance includes medical
insurance, dental insurance, and prescriptions. The Retiree Health Plan does not issue a publicly available
financial report.
Post employment health care is available to all employees, and qualified dependents, that retire from the
District with at least 10 years of service. As of June 30, 2017, there were fifty eight participants including
dependents. The monthly amount paid by the District is capped at $475 for each participant or $375 for
each participant eligible for Medicare. For participants with less than 20 years of service, the benefit is
reduced by 5% for each year. Expenditures for post employment health care benefits are recognized when
premiums are paid.
On November 7, 2007, the Board approved a participation agreement with CalPERS to be the plan
administrator for the District's other post employment benefit (OPEB) trust. The participation agreement
was submitted to CaIPERS on November 8, 2007, and became effective on January 15, 2008. At that time,
accumulated deposits from the prior year, plus accrued interest, were transferred to the California
Employers' Retiree Benefit Trust Program (CERBT).
The funds of the Retiree Health Plan are invested in CERBT, which is a tax qualified trust organized under
Internal Revenue Code (IRC) Section 115. Participation in the trust is limited to those agencies who qualify
as "government" entities under that IRC section. The CERBT is an irrevocable trust established for the
purpose of receiving employer contributions to prefund health and other postemployment benefits for
retirees and their beneficiaries. The CERBT administrative costs are financed through investment earnings.
Copies of the CaIPERS' comprehensive annual financial report, that includes CERBT investment
performance, may be obtained from:
California Public Employees' Retirement System
400 Q Street
P.O. Box 942701
Sacramento, CA 94229-2701
Tel. 888-225-7377
http://www.calpers.ca.gov
The District's annual OPEB expense is calculated based on the Annual Required Contribution (ARC), an
amount actuarially determined in accordance within the parameters of GASB Statement No. 45. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each
year. The plan's unfunded actuarial accrued liability prior to June 30, 2017 is being amortized as a level
percentage of projected payrolls on an open basis, over a period not to exceed 30 years, using the entry
age normal cost method. The June 30, 2017 unfunded actuarial accrued liability is being amortized as a
level percentage of projected payroll on an open basis, over a 20 year period, using the actuarial cost
method.
Page 38
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 8 — EMPLOYEE BENEFIT PLANS (Continued)
E. OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
The District's annual OPEB cost is recognized in the District's operating expenses. The following table
shows the components of the amount actually contributed to the plan, and changes in the net OPEB
obligation to the Retiree Health Plan:
Annual
%of
Change in
OPEB
Net OPEB
Fiscal
Required
Interest
Annual
Annual
Net OPEB
Obligation
Obligation
Year
Contribution
and
OPEB
Actual
OPEB Cost
Obligation
(Asset)
(Asset)
Ended*
(ARC)
Adjustments
Cost
Contribution
Contributed
(Asset)
Beginning
Ending
06/30/2012
$
276,800
$ 66,671
$ 343,471
$
285,005
83.0%
$
58,466
$ (66,671)
$ (8,205)
06/30/2013
$
267,800
$ 628
$ 268,428
$
304,556
113.5%
$
(36,128)
$ (8,205)
$ (44,333)
06/30/2014
$
267,800
$ -
$ 267,800
$
268,498
100.3%
$
(698)
$ (44,333)
$ (45,031)
06/30/2015
$
647,851
$ 647,851
$
274,029
42.3%
$
373,822
$ (45,031)
$ 328,791
06/30/2016
$
665,667
$ 665,667
$
275,240
41.3%
$
390,427
$ 328,791
$ 719,218
06/30/2017
$
683,973
$ 683,973
$
286,623
41.9%
$
397,350
$ 719,218
$ 1,116,568
Actuarial valuations of an ongoing plan are required at least once every three years and involve estimates
for the value of reported amounts and assumptions about the probability of occurrence of events far into
the future. Examples include assumptions about future employment, mortality, and the healthcare cost
trend. Amounts determined regarding the funded status of the plan and annual required contributions of the
employer are subject to continual revision as actual results are compared with past expectations and new
estimates are made about the future.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and plan members) and include the types of benefits provided at the time of
each valuation and historical pattern of sharing benefit costs between the employer and plan members to
that point. The methods and assumptions used include techniques that are designed to reduce short-term
volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term
perspective of calculations.
Significant actuarial assumptions for years prior to June 30, 2015 include:
Actuarial Cost Method Projected Unit Credit
Asset Valuation Method Five-year spread of gain/loss, beginning with 2009-10
Gain/loss on market value basis compared to assumption
Discount Rate 7.5%
General Inflation 3% Annual Increase
Amortization of Unfunded Liability 23 years; level annual payments
Significant actuarial assumptions after June 30, 2015 include:
Actuarial Cost Method Entry Age Normal
Asset Valuation Method Five-year smoothing formula with a 20% corridor around
market value
Discount Rate 7.0%
General Inflation 2.75% Annual Increase
Amortization of Unfunded Liability Closed 30 years; level percent for initial UAAL
Open 20 years; level percent for residual UAAL
Page 39
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 8 — EMPLOYEE BENEFIT PLANS (Continued)
E. OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued)
The following is a funding schedule for the Retiree Health Plan:
Schedule of Retiree Health Plan Funding Progress
Accrued
Actuarial
Unfunded
Funded
Annual
Valuation
Liabilities
Value of
Liabilities
Ratio
Covered
UL as a %
Date*
(AL)
Assets (AVA)
(UL)
(AVA/AL)
Payroll
of Payroll
01 /01 /2011
$
2,501,800
$ 645,700
$
1,856,100
25.8%
$
6,307,400
29.4%
07/01 /2011
$
2,657,000
$ 661,400
$
1,995,600
24.9%
$
6,226,000
32.1 %
07/01 /2013
$
2,960,600
$ 1,079,900
$
1,880,700
36.5%
$
6,409,000
29.3%
07/01 /2015
$
6,755,593
$ 1,579,982
$
5,175, 611
23.4%
$
6,360,511
81.4%
*Valuations are required once every two years. In 2011, the vaulation
date changed to July 1 in compliance with GASB Statement No. 57.
The actuarial valuation issued July 1, 2015 had a significant increase in accrued liability of $3.8 million due
to a new Actuarial Standard of Practice 6 that became effective for valuations after March 1, 2015 that
requires valuing an "implicit rate subsidy". Though the District has an employer cap on retiree benefits, the
liability of providing them based on the expected premiums of the plan are now required to be recognized
in the actuarial valuation to guarantee the stability of the plan for the long run which nearly doubled the
normal costs and liabilities.
NOTE 9 — SELF FUNDED INSURANCE
The District has a self -funded vision insurance program and claims were processed by and on behalf of
the District. The District did not maintain a claim liability; rather claims were expensed as paid. The
amount of claims paid for each of the past three years have not been material.
NOTE 10 — SEGMENT DISCLOSURE
The District has issued revenue bonds to finance electric and water distribution facilities. The project has
an external requirement to be reported separately, and investors in the revenue bonds rely solely on the
revenue generated by the individual projects for repayment. Summary financial information for each project
is presented on the following pages for the years ending December 31, 2017 and 2016.
Page 40
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 10 — SEGMENT DISCLOSURE (Continued)
STATEMENT OF NET POSITION
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Current assets
Non -current assets:
Capital assets, net
Restricted assets
Other long-term assets
Total Noncurrent Assets
Deferred outflows of resources
Pension
Unamortized loss on refunding
Unamortized redemption premium
December 31, 2017
Electric Water
$ 23,717,604 $ 10,085,811
48, 257, 502
49,100, 588
2,190, 835
2,313,508
TOTAL ASSETS AND DEFERRED OUTFLOWS -$ 75,131,700
OF RESOURCES
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND NET POSITION
Current liabilities
Non -current Liabilities
Long-term debt, net of current portion
Net pension liability
OPEB liability
Unearned revenues
Total Noncurrent Liabilities
Total Liabilities
Deferred inflows of resources
Pension
Total Deferred Inflows of Resources
Net Position
Net investment in capital assets
Restricted for debt service
Unrestricted
Total Net Position
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND NET POSITION
74,856,572
1,818,513
3,005,178
79, 680, 263
1,460,556
576,778
2,037,334
$ 91,803,408
$ 4,702,463 $ 2,742,557
3,523,745
7,185, 392
669,941
2,612,137
13,991,215
18, 693, 678
331,159
331,159
43,501,844
1,842,553
10, 762, 466
56,106, 863
21,085,650
4,790,262
446,627
1,041,939
27, 364,478
30,107, 035
220,773
220,773
52,216,044
4,576,780
4,682,776
61, 475, 600
$ 75,131,700 $ 91,803,408
Page 41
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 10 — SEGMENT DISCLOSURE (Continued)
December 31, 2016
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Electric
Water
Current assets
$ 19,438,054
$ 9,475,927
Non -current assets:
Capital assets, net
47,660,186
75,942,145
Restricted assets
-
1,876,032
Other long term assets
925,520
3,692,876
Total Noncurrent Assets
48,585,706
81,511,053
Deferred outflows of resources
Pension
2,403, 030
1,602,020
Unamortized loss on refunding
-
609,580
Unamortized redemption premium
149,934
-
Total Deferred Outflows of Resources
2,552,964
2,211,600
TOTAL ASSETS AND DEFERRED OUTFLOWS $ 70,576,724 $ 93,198,580
OF RESOURCES
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND NET POSITION
Current liabilities
$ 4,312,570
$ 2,949,891
Non -current Liabilities
Long-term debt, net of current portion
4,398,403
23,244,323
Net pension liability
6,150,197
4,100,132
OPEB liability
431,530
287,687
Unearned revenues
2,587,458
486,049
Total Noncurrent Liabilities
13,567,588
28,118,191
Total Liabilities
17,880,158
31,068,082
Deferred inflows of resources
Pension
958,276
638,850
Total Deferred Inflows of Resources
958,276
638,850
Net Position
Net investment in capital assets
42,500,995
50,920,550
Restricted for debt service
1,316,355
4,695,114
Unrestricted
7,920,940
5,875,984
Total Net Position
51,738,290
61,491,648
TOTAL LIABILITIES, DEFERRED INFLOWS $ 70,576,724 $ 93,198,580
OF RESOURCES AND NET POSITION
Page 42
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 10 — SEGMENT DISCLOSURE (Continued)
STATEMENTS OF REVENUE, EXPENSES, AND CHANGES IN NET POSITION
Year ended December 31, 2017
Operating Revenues
Sales to consumers
Other operating revenues
Operating expenses
Depreciation
Non -operating revenues (expenses)
Income (loss) before
capital contributions & other
Capital contributions, net
CHANGE IN NET POSITION
Net Position, Beginning
NET POSITION, ENDING
Operating Revenues
Sales to consumers
Other operating revenues
Operating expenses
Depreciation
Non -operating revenues (expenses)
Income (loss) before
capital contributions & other
Capital contributions, net
CHANGE IN NET POSITION
Net Position, Beginning
NET POSITION, ENDING
Electric Water
$ 22, 660, 258 $ 11, 801, 888
5,046,862
538,960
22,108,454
8,774,652
2,624,534
3,907,106
140,304
(517,830)
3,114,436
(858, 740)
1,254,137
842,691
4,368,573
(16,049)
51,738,290
61,491,648
$ 56,106, 863
$ 61, 475, 599
Year ended December 31, 2016
Electric Water
$ 21,713,614 $ 11,312,973
3,357,601
749,177
(20,222,867)
(8,171,428)
(2,576,192)
(3,660,841)
12,076
(700,499)
2,284,232
(470,618)
1,111, 440
587,670
3,395,672
117,052
48, 342, 618
$ 51, 738, 290
61, 374, 596
$ 61,491,648
Page 43
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 11 — SEGMENT DISCLOSURE (Continued)
STATEMENTS OF CASH FLOWS
Year ended December 31, 2017
Electric
Water
NET CASH PROVIDED BY (USED IN)
Operating activities
$
6,624,835
$
3,545,750
Noncapital financing activities
(467,590)
-
Capital and related financing activities
(2,328,476)
(3,723,773)
Investing activities
181,261
295,975
Net increase (decrease) in cash and
cash equivalents
4,010,030
117,952
Cash and Cash Equivalents, Beginning
15,439,826
7,485,574
CASH AND CASH
EQUIVALENTS, ENDING
$
19,449,856
$
7,603,526
Year ended December 31, 2016
Electric
Water
NET CASH PROVIDED BY (USED IN)
Operating activities
$
5,549,180
$
3,719,688
Noncapital financing activities
(921,171)
-
Capital and related financing activities
(2,233,583)
(6,189,302)
Investing activities
114,807
292,186
Net increase (decrease) in cash and
cash equivalents
2,509,233
(2,177,428)
Cash and Cash Equivalents, Beginning
12,930,593
9,663,002
CASH AND CASH
EQUIVALENTS, ENDING
$
15,439,826
$
7,485,574
Page 44
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 11 — MARTIS VALLEY GROUNDWATER MANAGEMENT EFFORTS
The Martis Valley aquifer underlies about 35,000 acres in both Placer and Nevada counties, near the Town
of Truckee. It is the main water supply for numerous public and private entities. This area has seen
significant growth in the last few decades with more planned for the future. Maintaining an adequate water
supply and protecting water quality are critical for the region's future.
The Truckee Donner Public Utility District (TDPUD), Northstar Community Services District (NCSD) and
Placer County Water Agency (PCWA) are the three primary public water agencies in the Martis Valley
Basin. Together, the TDPUD, NCSD and PCWA (Partnership Agencies) partnered to submit a groundwater
management plan and to help develop a groundwater model for the Martis Valley basin.
The Martis Valley Groundwater Management Plan (GMP) was prepared in 2015 to reflect current water
resources planning in the region and to incorporate the latest information and understanding of the
underlying groundwater basin. This collaborative effort provided the guidance necessary to align
groundwater policy. In addition to the groundwater management plan, a computer model of the
groundwater basin was developed by the Desert Research Institute, which incorporated available data and
enhanced understanding of the groundwater basin. A climate change modeling component was part of the
overall Federal study effort.
Partner agencies each adopted the Groundwater Management Plan (GMP) in February 2012 and the model
and associated report was completed in 2015. The total cost of the project was approximately $1,000,000,
which includes federal funding of approximately $500,000 from the U.S. Bureau of Reclamation and
$250,000 from the Lawrence Livermore National Laboratory; and contributions of $150,000 from TDPUD
and $100,000 from the other members of the Partnership Agencies.
In mid 2016, the California Sustainable Groundwater Management Act of 2014 (SGMA) took effect for which
the District was the submitting agency of a SGMA Alternate Submittal in December, 2016 on behalf of the
Town of Truckee, Placer County, Nevada County, PCWA, and Northstar CSD (Local SGMA Agencies).
The SGMA Alternative Submittal is intended to comply with the new regulations. There was an adopted
MOA amongst the six local agencies for this compliance project which covers the time period for preparation
of the SGMA Alternative Submittal, possible conditional acceptance of the plan by DWR, and submittal of
a first -year annual report. DWR has two years by statute to review the SGMA Alternative Submittal and,
as of the date the financial statements were available to be issued, has not formally responded.
NOTE 12 — CLAIMS AND JUDGMENTS
From time to time, the utility is party to various pending claims and legal proceedings. Although the outcome
of such matters cannot be forecasted with certainty, it is the opinion of management and the utility's legal
counsel that the likelihood is remote that any such claims or proceedings will have a material adverse effect
on the utility's financial position or results of operations.
NOTE 13 — RISK MANAGEMENT
The utility is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets;
errors and omissions; workers compensation; and health care of its employees. These risks are covered
through the purchase of commercial insurance, with minimal deductibles. Settled claims have not exceeded
the commercial liability in any of the past three years. There were no significant reductions in coverage
compared to the prior year.
Page 45
REQUIRED SUPPLEMENTARY INFORMATION
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
COST SHARING DEFINED BENEFIT PENSION PLANS
Schedule of the District's Proportionate Share of the Net Pension Liability
Cost Sharing Defined Benefit Plans
As of June 30
Last Ten Years*
2017
2016
2015
2014
Portion of Net Pension Liability
0.30379%
0.29837%
0.29209%
0.09982%
Proportionate Share of The Net Pension Liability
$11,975,655
$10,250,329
$8,013,400
$6,210,985
Covered - Employee Payroll
$7,108,563
$6,670,248
$6,162,431
$6,278,545
Proporationate Share of the Net Pension Liability as
Percentage of Covered Payroll
168.47%
153.67%
130.04%
98.92%
Plan's Fidicuiary Net Position
$27,244,095
$30,950,578
$30,725,516
$30,386,101
Plan Fiduciary Net Position as a percentage of the
Total Pension Liability
73.31 %
75.12%
79.31 %
89.17%
* Fiscal year 2014 was the 1st year of implementation, therefore only four years are shown
Page 47
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
Schedule of Contributions
Cost Sharing Defined Benefit Plans
As of June 30
Last Ten Years*
2017
2016
2015
2014
Contractually Required Contribution (Actuarially
Determined)
$1,138,758
$1,011,908
$950,147
$943,118
Contributions in Relation to the Actuarially
Determined Contributions
$1,138, 758
$1, 048, 897
$949, 634
$943,118
Contribution deficiency (excess)
($0)
($36,989)
$513
$0
Covered - Employee Payroll
$7,108,563
$6,670,248
$6,162,431
$6,278,545
Contributions as a percentage of covered -employee
payroll
16%
16%
15%
15%
* Fiscal year 2014 was the 1st year of implementation, therefore only four years are shown
Page 48
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2017 and 2016
POSITION OF OTHER POST EMPLOYMENT BENEFIT PLANS
Retiree Health Plan Funding History
For the Years Ended January 1, 2006, 2007, 2009, 2011, 2013 and July 1, 2015*
Accrued Actuarial Unfunded Funded Annual
Valuation
Liabilities
Value of
Liabilities
Ratio
Covered
UL as a %
Date*
(AL)
Assets (AVA)
(UL)
(AVA/AL)
Payroll
of Payroll
01 /01 /2007
$
1,369,600
$
198,800
$
1,170, 800
14.5%
$
4,925,600
23.8%
01 /01 /2009
$
1,748,000
$
230,900
$
1,517,100
13.2%
$
5,276,400
28.8%
01 /01 /2011
$
2,501,800
$
645,700
$
1,856,100
25.8%
$
6,307,400
29.4%
07/01 /2011
$
2,657,000
$
661,400
$
1,995,600
24.9%
$
6,226,000
32.1 %
07/01 /2013
$
2,960,600
$
1,079,900
$
1,880,700
36.5%
$
6,409,000
29.3%
07/01 /2015
$
6,755,593
$
1,579,982
$
5,175, 611
23.4%
$
6,360,511
81.4%
*Retire Health Plan funding began in 2007. Valuations were routinely done every two years. The valuation
date changed to July 1 in compliance with GASB Statement No. 57.
Page 49
SUPPLEMENTAL INFORMATION
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
SUPPLEMENTARY
INFORMATION
CONSOLIDATING STATEMENT OF NET POSITION
As of December 31, 2017
Electric Operations
Water Operations Eliminations
Totals
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
CURRENT ASSETS
Funds
Operating
$ 6,411,215
$ 2,049,356 $
- $ 8,460,571
Designated
11,087,233
2,623,136
- 13,710,369
Restricted
1,902,490
2,928,505
- 4,830,995
Total Funds
19,400,938
7,600,997
- 27,001,935
Accounts receivable, net
1,476,994
1,217,272
- 2,694,266
Unbilled revenues
1,863,673
765,784
- 2,629,457
Accrued interest receivable
21,203
51,830
- 73,033
Materials and supplies
519,034
158,862
- 677,896
Prepaid expenses
391,141
242,050
- 633,191
Other
44,621
49,016
- 93,637
Total Current Assets
23,717,604
10,085,811
- 33,803,415
NON -CURRENT ASSETS
Other Non -Current Assets
Restricted funds
-
1,818,513
- 1,818,513
Special assessments receivable
-
3,005,178
- 3,005,178
Other
843,086
-
- 843,086
Total Other Non -Current Assets
843,086
4,823,691
- 5,666,777
DEFERRED OUTFLOWS OF RESOURCES
Pension
2,190,835
1,460,556
- 3,651,391
Unamortized loss on refunding
-
576,778
- 576,778
Unamortized redemption premium
122,673
-
- 122,673
Total deferred outflows of resources
2,313,508
2,037,334
- 4,350,842
CAPITAL ASSETS
Utility plant
71,679,419
117,116,869
- 188,796,288
Accumulated depreciation
(25,855,204)
(42,708,031)
- (68,563,235)
Construction w ork in progress
2,433,287
447,734
- 2,881,021
Total capital assets
48,257,502
74,856,572
- 123,114,074
TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
$ 75,131,700
$ 91,803,408 $
- $ 166,935,108
Page 51
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
SUPPLEMENTARY INFORMATION
Electric Operations Water Operations Eliminations Totals
NET POSITION AND LIABILITIES
CURRENT LIABILITIES
Other liabilities
Accounts payable
$ 2,312,114 $
33,632 $
- $ 2,345,746
Customer deposits
399,333
88,863
- 488,196
Other
651,421
343,194
- 994,615
Total other liabilities
3,362,868
465,689
- 3,828,557
Current liabilities payable from restricted assets:
Current portion of long-term debt
1,279,658
2,131,656
- 3,411,314
Accrued interest payable
59,937
145,212
- 205,149
Total Current Liabilities Payable from Restricted Assets
1,339,595
2,276,868
- 3,616,463
Total Current Liabilities
4,702,463
2,742,557
- 7,445,020
NON -CURRENT LIABILITIES
Long-term debt, net of discounts and premiums
3,476,000
21,085,650
- 24,561,650
Net pension liability
7,185,392
4,790,263
- 11,975,655
OPEB liability
669,941
446,627
- 1,116,568
Installment loans
47,745
-
- 47,745
Unearned revenues
2,612,137
1,041,939
- 3,654,076
Total non -current liabilities
13,991,215
27,364,479
- 41,355,694
Total Liabilities
18,693,678
30,107,036
- 48,800,714
DEFERRED INFLOWS OF RESOURCES
Pension
331,159
220,773
- 551,932
Total deferred inflows of resources
331,159
220,773
- 551,932
NET POSITION
Net investment in capital assets
43,501,844
52,216,044
- 95,717,888
Restricted for debt service
1,842,553
4,576,780
- 6,419,333
Unrestricted
10,762,466
4,682,775
- 15,445,241
Total Net Position
56,106,863
61,475,599
- 117,582,462
TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION $ 75,131,700 $ 91,803,408 $ - $ 166,935,108
Page 52
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
SUPPLEMENTARY INFORMATION
CONSOLIDATING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
For the Year Ended December 31, 2017
OPERATING REVENUES
Sales to customers
Interdepartmental sales
Standby fees
Cap and trade proceeds
Other
Total Operating Revenues
OPERATING EXPENSES
Purchased power
Operations and maintenance
Consumer services
Administration and general
Pension expense
OPEB expense
Depreciation
Total Operating Expenses
Operating Income
NON -OPERATING REVENUE (EXPENSES)
Investment income
Interest expense
Amortization
Gain (loss) on disposition of assets
Total Non -Operating Expenses
Income Before Contributions
CAPITAL & OTHER CONTRIBUTIONS, net
Capital Contributions
Intercompany Debt Service - Pension Sidefund
Total Capital and Other Contributions, net
CHANGE IN NET POSITION
NET POSITION - Beginning of Year
NET POSITION - END OF YEAR
Electric Operations Water Operations Eliminations Totals
$ 22,660,258 $
11,801,888 $
- $
34,462,146
1,148,845
2,292
(1,151,137)
-
21,530
133,440
154,970
1,140, 372
-
1,140, 372
2,736,115
403,229
(561,479)
2,577,865
27,707,120
12,340,849
(1,712,616)
38,335,353
11, 327, 300
-
11,327,300
4,997,232
4,835,623
(1,151,137)
8,681,718
1,661,708
640,793
2,302,501
2,522,038
2,231,453
(561,479)
4,192,012
1,361,766
907,844
2,269,610
238,410
158,940
397,350
2,624,534
3,907,106
6,531,640
24,732,988
12,681,759
(1,712,616)
35,702,131
2,974,132
(340,910)
2,633,222
163,323
230,654
393,977
(2,951)
(743,045)
(745,996)
(27,261)
(5,784)
(33,045)
7,193
345
7,538
140,304
(517,830)
(377,526)
3,114,436
(858,740)
2,255,696
946,717
1,150,111
2,096, 828
307,420
(307,420)
-
1,254,137
842,691
2,096,828
4,368,573
(16,049)
4,352,524
51,738,290
61,491,648
113,229,938
$ 56,106,863 $
61,475,599 $
$
117,582,462
Page 53
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
SUPPLEMENTARY INFORMATION
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Received from customers
Paid to suppliers for goods and services
Paid to employees for services
Net Cash Flow s from Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Principal payments on long-term debt
Interest payments on long-term debt
Net Cash Flows from Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital expenditures for utility plant
Cost of disposal of property net of salvage
Capital contributions, connection and facility fees
Special assessments receipts
Special tax receipts
Principal payments on long-term debt
Interest payments on long-term debt
Cash Flows From Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received
Cash Flows from Investing Activities
Net Change in Cash and Cash Equivalents
CASH AND CASH EQUIVALENTS — Beginning of Year
CASH AND CASH EQUIVALENTS — END OF YEAR
Electric Operations Water Operations
$ 27,915,556 $ 11,560,093 $
(16,319,624) (5,499,190)
(4,971,097) (2,515,153) _
6,624,835 3,545,750
(404,000)
(63,590)
(467,590)
Eliminations Total
(1,684,739) $ 37,790,910
1,684,739 (20,134,075)
- (7,486,250)
(404,000)
- (63,590)
(467,590)
(3,042,889) (2,339,061)
(126, 363) 345
731,961 1,073,520
- 687,698
(10,191) (2,413,869)
119,006 (732,406)
(2,328,476) (3,723,773)
(5,381,950)
(126,018)
1,805,481
687,698
(2,424,060)
- (613,400)
181,261 295,975 477,236
181,261 295,975 477,236
4,010,030 117,952 4,127,982
15,439,826 7,485,574 22,925,400
$ 19,449,856 $ 7,603,526 $ $ 27,053,382
Page 54
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
SUPPLEMENTARY INFORMATION
For the Year Ended December 31, 2017
RECONCILIATION OF OPERATING INCOME TO NET CASH
FLOWS FROM OPERATING ACTIVITIES
Operating income
Noncash items included in operating income
Depreciation and amortization
Depreciation charged to other accounts
Intercompany Transfer
Pension expense - GASB 68
Deferred Pension Contributions - GASB 68
OPEB
Accounts receivable and unbilled revenues
Materials and supplies
Prepaid expenses and other current assets
Accounts payable
Customer deposits
Other current liabilities
NET CASH FLOWS FROM OPERATING ACTIVITIES
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE BALANCE SHEET
Operating
Designated
Restricted bond funds - current
Restricted bond funds - non -current
Total Cash and Investments
Less: Long-term investments
Mark to market adjustment
TOTAL CASH AND CASH EQUIVALENTS
Electric Operations Water Operations Eliminations Total
$ 2,974,132
$ (340,910)
$ - $
2,633,222
2,624,534
3,907,106
-
6,531,640
194,032
150,010
-
344,042
307,420
(307,420)
-
1,361,766
907,845
2,269,611
(741,492)
(494,328)
(1,235,820)
238,410
158,940
397,350
(115,912)
(476,436)
-
(592,348)
(40,037)
19,122
-
(20,915)
(131,509)
(42,418)
-
(173,927)
(152,512)
(8,257)
-
(160,769)
16,927
3,100
-
20,027
89,076
69,396
-
158,472
$ 6,624,835
$ 3,545,750
$ - $
10,170,585
$ 6,411,215
$ 2,049,356
$ - $
8,460,571
11,087,233
2,623,136
-
13,710,369
1,902,490
2,928,505
-
4,830,995
-
1,818,513
-
1,818,513
19,400,938
9,419,510
-
28,820,448
-
(1,698,880)
-
(1,698,880)
48,918
(117,104)
-
(68,186)
$ 19,449,856
$ 7,603,526
$ - $
27,053,382
Page 55
COMMUNICATIONS WITH THOSE
CHARGED WITH GOVERNANCE AND INTERNAL CONTROL
RELATED MATTERS
TRUCKEE DONNER
PUBLIC UTILITY DISTRICT
December31, 2017
(/i�) MOSSADAMS
(IXI) MOSSADAMS
Communications with Those Charged with
Governance
To the Board of Directors
Truckee Donner Public Utility District
We have audited the consolidated and primary government only financial statements of Truckee
Donner Public Utility District (the District) as of and for the year ended December 31, 2017, and have
issued our reports thereon dated May 25, 2018. Professional standards require that we provide you
with the following information related to our audit.
OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE
UNITED STATES OF AMERICA
As stated in our engagement letter dated February 7, 2018, our responsibility, as described by
professional standards, is to form and express an opinion about whether the consolidated financial
statements prepared by management with your oversight are fairly presented, in all material respects,
in conformity with U.S. generally accepted accounting principles. Our audit of the consolidated
financial statements does not relieve you or management of your responsibilities.
Our responsibility is to plan and perform the audit in accordance with generally accepted auditing
standards and to design the audit to obtain reasonable, rather than absolute, assurance about
whether the consolidated financial statements are free of material misstatement. An audit of
consolidated financial statements includes consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the District's internal control over financial
reporting. Accordingly, we considered the District's internal control solely for the purposes of
determining our audit procedures and not to provide assurance concerning such internal control.
We are also responsible for communicating significant matters related to the financial statement audit
that, in our professional judgment, are relevant to your responsibilities in overseeing the financial
reporting process. However, we are not required to design procedures for the purpose of identifying
other matters to communicate to you.
PLANNED SCOPE AND TIMING OF THE AUDIT
We performed the audit according to the planned scope and timing previously communicated to you
in the engagement letter.
(IXI)
MQSSADAMS
SIGNIFICANT AUDIT FINDINGS
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The
significant accounting policies used by the District are described in the notes to the consolidated
financial statements. No new accounting policies were adopted and there were no changes in the
application of existing policies during 2017. We noted no transactions entered into by the District
during the year for which there is a lack of authoritative guidance or consensus. There are no
significant transactions that have been recognized in the financial statements in a different period
than when the transaction occurred.
Significant Accounting Estimates
Accounting estimates are an integral part of the consolidated financial statements prepared by
management and are based on management's knowledge and experience about past and current
events and assumptions about future events. Certain accounting estimates are particularly sensitive
because of their significance to the consolidated financial statements and because of the possibility
that future events affecting them may differ significantly from those expected. The most sensitive
estimates affecting the consolidated financial statements were:
Unbilled Revenue — Unbilled revenue is a measure of revenue earned through the end of
the reporting period that has yet to be billed. This generally represents accounts with billing
cycles that start in the reporting year and end in the subsequent year. We have evaluated the
key factors and assumptions used to develop unbilled revenue in determining that it is
reasonable in relation to the consolidated financial statements taken as a whole.
Allowance for Doubtful Accounts — The allowance for doubtful accounts represents an
estimate of the amount of accounts receivable that will not be collected. We have evaluated
the key factors and assumptions used to develop the allowance in determining that it is
reasonable in relation to the consolidated financial statements taken as a whole.
Recovery Periods for the Cost of Plant — This represents the depreciation of plant assets.
Management's estimate of the recovery periods for the cost of plant is based on regulatory -
prescribed depreciation recovery periods. We have evaluated the key factors and
assumptions used to develop the recovery periods in determining that they are reasonable in
relation to the consolidated financial statements taken as a whole.
Other Post -Employment Benefit Obligations — This represents the amount of annual
expenses recognized for post -employment benefits. The amount is actuarially determined
with management input. We have evaluated the key factors and assumptions used to
develop the annual expenses in determining that it is reasonable in relation to the
consolidated financial statements taken as a whole.
2
(IXI) MQSSADAMS
Pension Liability and Related Pension Expense — This represents the amount of annual
expense recognized for pensions and the related pension asset or liability. The amount is
actuarially determined, with CalPERS management input. We have evaluated the key factors
and assumptions used to develop the annual expense in determining that it is reasonable in
relation to the consolidated financial statements taken as a whole.
Valuation of Investments — This represents management's estimate of the fair value of
investments based on current market rates and conditions. We evaluated the key factors and
assumptions used to develop the valuation of investments and determined that they are
reasonable in relation to the financial statements taken as a whole.
Financial Statement Disclosures
The disclosures in the consolidated financial statements are consistent, clear and understandable.
Certain financial statement disclosures may be particularly sensitive because of their significance to
financial statement users.
We did not note any disclosures in the financial statements which we consider sensitive to potential
users.
Significant Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing
our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during
the audit, other than those that are trivial, and communicate them to the appropriate level of
management. No material misstatements, either individually or in the aggregate, were detected as a
result of our audit procedures.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a
financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that
could be significant to the consolidated financial statements or the auditor's report. We are pleased to
report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated May 25, 2018.
3
(IXI) MOSSAaAMS
Management Consultation with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation
involves application of an accounting principle to the District's consolidated financial statements or a
determination of the type of auditor's opinion that may be expressed on those statements, our
professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge, there were no such consultations with other
accountants.
Other Significant Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the District's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses
were not a condition to our retention.
Communication of Internal Control Related Matters
In planning and performing our audit of the consolidated financial statements of the Company as of
and for the year ended December 31, 2017 in accordance with auditing standards generally accepted
in the United States of America, we considered the Company's internal control over financial reporting
(internal control) as a basis for designing audit procedures that are appropriate in the circumstances
for the purpose of expressing our opinion on the consolidated financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly,
we do not express an opinion on the effectiveness of the Company's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a
material misstatement of the entity's consolidated financial statements will not be prevented, or
detected and corrected, on a timely basis.
Our consideration of internal control was for the limited purpose described in the first paragraph and
was not designed to identify all deficiencies in internal control that might be material weaknesses.
Given these limitations, during our audit we did not identify any deficiencies in internal control that we
consider to be material weaknesses. However, material weaknesses may exist that have not been
identified.
4
(IXI) MOSSAaAMS
Other Control Related Matters
During the course of our audit, we became aware of matters that are opportunities for improving
reporting in compliance with generally accepted accounting principles, and strengthening internal
controls and operating effectiveness, which are summarized below:
Overhead rates applied
We noted, through our review of overhead rates applied to work orders in 2017, the rate applied to
work orders did not agree to the District's approved overhead rate. We recommend an independent
review of the overhead rate applied to ensure it is consistent with the District's approved rate.
Closing of work orders
During our testing over closed work orders, we noted there was a delay in closing one of the work
orders selected for testing, such that the work order reviewed was in service and should have been
closed in 2016, however it was not closed until 2017. We recommend work orders be closed within
approximately 60 days of the commercial operation date.
This information is intended solely for the use of Board of Directors and management of Truckee
Donner Public Utility District and is not intended to be and should not be used by anyone other than
these specified parties.
Portland, Oregon
May 25, 2018
5