HomeMy WebLinkAbout4-2TRUCKEE 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:
Changes of assumptions
Differences between expected and actual experience
proportionate share of contributions
Change in employers proportion
Pension contributions made subsequent to the measurement
date
Total
Deferred Outflows of Deferred Inflows of
$1,796,683
(208, 908)
439,877
(343,024)
544, 250
870,580
$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
2016
June 30,
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 CaIPERS' 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 CaIPERS 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 CaIPERS website.
The long-term expected rate of return on pension plan investments was determined using abuilding-
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 CalPERS' Board effective on
July 1, 2015.
Asset Class
New Strategic Real Return Real Returns
Allocation Years 1-10 (a) Years 11+(b)
Global Equity 51.0% 5.25% 5.71
Global Fixed Income 20.0% 0.99% 2.43%
Inflation Sensitive 6.0% 0.45% 3.36%
Private Equity 10.0% 6.83% 6.95%
Real Estate 10.0% 4.50% 5.13%
Infrastructure and Forestland 2.0% 4.50% 5.09%
Liquidity 1.0% -0.55% -1.05%
Total 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 $616651743
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 asingle-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 CaIPERS 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 CalPERS' comprehensive annual financial report, that includes CERBT investment
performance, may be obtained from:
California Public Employees' Retirement System
400 O 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
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 NetOPEB
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) $ (81205)
06/30/2013 $ 267,800 $ 628 $ 268,428 $ 3041556 113.5% $ (36,128) $ (81205) $ (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% $ 3900427 $ 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
Asset Valuation Method
Discount Rate
General Inflation
Amortization of Unfunded Liability
Projected Unit Credit
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
Valuation Liabilities Value of Liabilities Ratio
Date* (AL) Assets (AVA) (UL) (AVA/AL
Annual
UL
01 /01 /2011 $ 21501,800 $ 645,700 $ 118561100 25.8% $ 6, 307, 400 29.4%
07/01/2011 $ 21657,000 $ 661,400 $ 11995,600 24.9% $ 61226,000 32.1%
07/01/2013 $ 21960,600 $ 11079,900 $ 11880,700 36.5% $ 61409,000 29.3%
07/01 /2015 $ 61755,593 $ 11579,982 $ 5,175, 611 23.4% $ 61360,511 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 aself-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
$ 239717,604
48,257,502
843,086
491100, 588
2,190, 835
122, 673
21313,508
Water
$ 101085,811
74, 856, 572
1,818,513
3, 005,178
79, 80263
1,460,556
5761778
2,037,334
TOTAL ASSETS AND DEFERRED OUTFLOWS $ 75,131,700 $ 91,803,408
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
$ 4,702,463
3, 523, 745
7,185, 392
69,941
2,612,137
13,991,215
18,693,678
331,159
331,159
43,501,844
1,842,553
10,7621466
106,863
$ 2,742,557
21,085,650
4, 790, 262
446,627
1,041,939
27, 364, 478
30,107, 035
220,773
220, 773
52216044
4,576,780
4,6821776
61,475,600
TOTAL LIABILITIES, DEFERRED INFLOWS $ 751131,700 $ 9118032408
OF RESOURCES AND NET POSITION
Page 41
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE 10 —SEGMENT DISCLOSURE (Continued)
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
Total Deferred Outflows of Resources
December 31, 2016
Electric
$ 19,438,054
47, 660,186
925,520
48, 585, 706
21403,030
149,934
2,552,964
Water
$ 91475,
927
75, 942,145
118761032
31692,
876
811511,053
11602,020
609,580
21211,600
TOTAL ASSETS AND DEFERRED OUTFLOWS $ 70,576,724 $ 93,198,580
OF RESOURCES
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND NET POSITION
Current liabilities $ 41312,570 $ 21949,891
Non -current Liabilities
Long-term debt, net of current portion 41398,403 23,244,323
Net pension liability 61150,197 41100,132
OPEB liability 431,530 287,687
Unearned revenues 21587,458 486,049
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 11316,355 41695,114
Unrestricted 71920,940 51875,984
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
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
Year ended December 313 2017
Electric
Water
$ 22,660,258 $ 11,801,888
5, 046, 862
538, 960
22,108,454
81774,652
21624,534
31907,106
140,304
(517,830)
31114,436
(858,740)
1,254,137
842,691
41368,573
(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
(209222,867) (83171,428)
(29576,192) (31660, 841)
12,076 (700,499)
2,284,232 (470,618)
1,111,440 587,670
31395,672 117,052
48342618
61374596
$ 51,738,290 $ 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
NET CASH PROVIDED BY (USED IN)
Operating activities
Noncapital financing activities
Capital and related financing activities
Investing activities
Net increase (decrease) in cash and
cash equivalents
Cash and Cash Equivalents, Beginning
CASH AND CASH
EQUIVALENTS, ENDING
NET CASH PROVIDED BY (USED IN)
Operating activities
Noncapital financing activities
Capital and related financing activities
Investing activities
Net increase (decrease) in cash and
cash equivalents
Cash and Cash Equivalents, Beginning
CASH AND CASH
EQUIVALENTS, ENDING
Year ended December 31, 2017
Electric
$ 6,624,835
(467, 590)
(21328,476)
181,261
4, 010, 030
15, 4391826
Water
$ 3,545,750
(31723,773)
295,975
1171952
7,485, 574
$ 19,449,856 $ 7,603,526
Year ended December 31, 2016
Electric
Water
$ 51549,180 $ 31719,688
(921,171) -
(2,233,583) (61189,302)
1141807 2921186
21509,233 (21177,428)
12, 930, 593 91663,002
$ 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 4)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 (S('MA) 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
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