HomeMy WebLinkAboutAudited Financial Statement ConsolidatedTRUCKEE DONNER
PUBLIC UTILITY DISTRICT
FINANCIAL STATEMENTS
Including Independent Auditors' Report
December 31, 2011 and 2010
TABLE OF CONTENTS
Independent Auditors' Report
Management's Discussion and Analysis
Financial Statements
Consolidated Balance Sheets
1
2
8
9
Consolidated Statements of Revenue, Expenses, and Changes in Net Assets...................................12
Consolidated Statements of Cash Flows
Notes to Financial Statements
Supplemental Information ...........
Consolidating Balance Sheets
13
15
45
46
Consolidating Statement of Revenues, Expenses, and Changes in Net Assets..................................49
Consolidating Statements of Cash Flows........................................................................................... 50
Other Post Employment Benefits Plans - Required Supplementary Information .................................. 52
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Truckee Donner Public Utility District
Truckee, California
We have audited the accompanying balance sheet of the Truckee Donner Public Utility District as of
December 31, 2011 and 2010, and the related statements of revenues, expenses, and changes in net assets
and cash flows for the year then ended, as noted in the table of contents. These financial statements are the
responsibility of the Truckee Donner Public Utility District's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
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 financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the Truckee Donner Public Utility District at December 31, 2011 and 2010 and the results of its
operations and its cash flows for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
The management's discussion and analysis on pages 2 through 6 as well as the pension and other post
employment benefit plans funding schedules are not a required part of the basic financial statements, but is
supplementary information required by accounting principles generally accepted in the United States of
America. We have applied certain limited procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the required supplementary information. However,
we did not audit the information and express no opinion on it.
Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole.
The consolidating statements as identified in the table of contents are presented for purposes of additional
analysis and are not a required part of the financial statements. The consolidating statements have been
subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, are
fairly stated, in all material respects, in relation to the financial statements taken as a whole.
Portland, Oregon
,2012
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2011 and 2010
MANAGEMENT'S DISCUSSION AND ANALYSIS
As financial management of the Truckee Donner Public Utility District, we offer readers of these financial
statements this narrative overview and analysis of the financial activities of the District for the years
ended December 31, 2011 and 2010. This discussion and analysis is designed to assist the reader in
focusing on the significant financial issues, provide an overview of the District's financial activity and
identify changes in the District's financial position.
We encourage readers to consider the information presented here in conjunction with that presented
within the basic financial statements. The reader should take time to read and evaluate all sections of this
report, including the footnotes and other supplementary information that is provided, in addition to this
management discussion and analysis.
FINANCIAL HIGHLIGHTS
The District's net capital assets decreased $0.2 million (0%) from $122.1 million at December 31, 2010 to
$121.9 million at December 31, 2011, mainly because of the sale of land held for sale. Electric and Water
distribution assets were replaced at about the same pace as accumulated depreciation. Beginning in
2009, automated meter reading devices were installed to enable volumetric billing of water in compliance
with California Assembly Bill 2572, instead of flat -rate billing. Water meters have been installed at
approximately 90% of all customer locations and the remaining meters are planned to be installed by
2017.
The District's total net assets increased $6.9 million (10%) from $70.4 million at December 31, 2010, to
$77.3 million at December 31, 2011. The increase was due to a $2 million decrease in debt related to
capital assets and a $5 million increase in unrestricted assets.
The operating revenues in 2010 and 2011 were $33.5 million for each year. Electric revenues increased
slightly in 2011, but the 1.75% water rate increase in 2011 was more than offset by decreased
consumption attributed to the conservation programs and the effect of volumetric billing.
Operating expenses of the District increased by $1.7 million (6%) from $27.6 million in 2010 to $29.3
million in 2011, substantially due to increased purchased power costs and increased depreciation.
Non -operating revenues increased $1.0 million from 2010, mostly because of a gain on the sale of land.
Non -operating expenses remained about the same.
No new debt was issued in 2010, but $7.8 million debt was issued in 2011 to refinance an existing
pension obligation. (See notes 1(J), 5, and 9(B)).
OVERVIEW OF THE FINANCIAL STATEMENTS
This report includes Management's Discussion and Analysis, the Independent Auditors' Report, the Basic
Financial Statements, (which includes the notes to the financial statements), and Supplementary
Information.
See accompanying auditors' report.
Page 2
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2011 and 2010
REQUIRED FINANCIAL STATEMENTS
The financial statements of the District are designed to provide readers with a broad overview of the
District's finances similar to a private -sector business. They have been prepared using the accrual basis
of accounting in accordance with accounting principles generally accepted in the United States of
America (GAAP). Under this basis of accounting, revenues are recognized in the period in which they are
earned and expenses are recognized in the period in which they are incurred, regardless of the timing of
related cash flows. These statements offer short- and long-term financial information about the District's
activities.
The reporting entity consists of the primary government, which has two departments (electric operations
and water operations), and the blended component units. Further details about the component units are
provided in note l (A).
The Balance Sheet presents information on all of the District's assets and liabilities, and provides
information about the nature and amounts of investments in resources (assets) and the obligations to
District creditors (liabilities). It also provides the basis for computing rate of return, evaluating the capital
structure of the District and assessing the liquidity and financial flexibility of the District.
All of the current year's revenues and expenses are reported in the Statement of Revenues, Expenses,
and Changes in Net Assets. This statement provides a measurement of the District's operations over
the past year and can be used to determine whether the District has successfully recovered all its costs
through its rates and other charges.
The Statement of Cash Flows provides relevant information about the District's cash receipts and cash
payments during the reporting period. This statement reports cash receipts and cash payments resulting
from operating, non -capital financing, capital and related financing and investing activities. When used
with related disclosures and information in the other financial statements, the statement of cash flows
should provide insight into (a) the District's ability to generate future net cash flows, (b) the District's ability
to meet its obligations as they come due, (c) the District's needs for external financing, (d) the reasons for
differences between operating income and associated cash receipts and payments and (e) the effects on
the District's financial position of both its cash and its 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 3
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2011 and 2010
DISTRICT HIGHLIGHTS
The condensed financial statements at December 31, 2011, 2010, and 2009 are presented below.
ASSETS
Current assets
Non -current assets:
Capital assets, net
Restricted assets
Other long-term assets
TOTAL ASSETS
LIABILITIES AND NET ASSETS
Current liabilities
Non -current liabilities
Long-term debt, net of current
portion
Unearned revenues
Total Liabilities
Net Assets
Invested in capital assets, net
of related debt
Restricted for debt service
Unrestricted
Total Net Assets
TOTAL LIABILITIES
AND NET ASSETS
CONDENSED BALANCE SHEETS
Increase
(Decrease)
1 -12mn
$ 42,758,767 $ 40,131,454 $ 40,590,535 $ 2,627,313
121,918,394 122,071,635 118,270,925 (153,241)
2,021,017 1,884,183 3,761,627 136,834
18 374.189 9 .540.943 10. 0? 1.541 8 833 3?8
$ 183,072,347 $ 173,628,115 $ 172,944,628 $ 9,444,232
$ 10,928,960
$ 10,033,179
$ 10,907,411
$ 895,781
90,522,322
88,780,242
93,996,886
1,742,080
4,335,944
4,447,397
4,216,188
(111,453)
105,787,226
103,260,818
109,120,485
2,526,408
42,160,866
40,245,805
37,247,841
1,915,061
16,187,007
15,768,308
16,061,200
418,699
18, 937, 248
14, 353,184
10, 515,102
4,584,064
77,285,121
70,367,297
63,824,143
6,917,824
$ 183,072,347 $ 173,628,115 $ 172,944,628 $ 9,444,232
In 2011, the District's current assets increased $2.6 million, predominantly due to increased cash
reserves. (See note 2). The District's net capital assets decreased $0.2 million, primarily because of the
sale of land held for sale. Electric and Water distribution assets were replaced at about the same pace as
accumulated depreciation. Non -current restricted assets increased $0.1 million, mostly attributed to a
market adjustment of long-term investments. Other long-term assets increased $6.8 million as a result of
recording the $7.6 deferred pension obligation that was refinanced. (See notes 1(J), 5, and 9(13)). Total
liabilities increased $2.5 million, mainly due to $7.8 million additional debt issued, less the annual
reduction of existing debt. No new debt was issued in 2010 and 2009. The District's total net assets
increased $6.9 million, substantially due to a $2.0 million decrease in debt related to capital assets and a
$5.0 million increase in unrestricted assets.
Net assets invested in capital assets, net of related debt, consist of capital assets, net of accumulated
depreciation, reduced by the amount of outstanding indebtedness attributable to the acquisition,
construction or improvement of those assets. When there are significant unspent bond proceeds, the
portion of related debt is not included in the calculation of this item. Instead, that portion of the debt is
included in the net assets restricted for capital projects component as an offset to the related unspent
bond proceeds.
See accompanying auditors' report.
Page 4
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2011 and 2010
Net assets restricted for debt service represents amounts restricted for payments related to outstanding
revenue bonds.
The District had income before capital contributions of $4.3 million, $5.0 million, and $4.2 million for the
years ended December 31, 2011, 2010 and 2009, respectively. Changes in the District's net assets can
be determined by reviewing the following Condensed Revenues, Expenses, and Changes in Net Assets
for the years ended December 31, 2011, 2010, and 2009.
CONDENSED REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
Sales to consumers
Other operating revenues
Total Operating Revenues
Operating expenses
Operating Income (Loss)
Non -operating revenues (expenses)
Income (loss) before
capital contributions
Capital contributions, net
Change in net assets
NET ASSETS, Beginning of Year
NET ASSETS, END OF YEAR
Increase
(Decrease)
2011
2010
2009
2011 -2010
$ 31,053,129
$ 31,118,286
$ 30,301,191
$ (65,158)
2,430,965
2,358,141
2,503,380
72,824
33,484,094
33,476,427
32,804,571
7,667
29,284,060
27,620,502
26,924,724
1,663,558
4,200,034
5,855,925
5,879,847
(1,655,892)
120,208
(902,905)
(1,713,890)
1,023,113
4,320,242
4,953,020
4,165,957
(632,779)
2,597,582
1,590,134
8,709,498
1,007,448
6,917,824
6,543,154
12,875,455
374,670
70,367,297
63,824,143
50,948,688
6,543,154
$ 77, 285,121
$ 70, 367, 297
$ 63, 824,143
$ 6,917,824
Total Operating revenues were $33.5 million in 2011, $33.5 million in 2010 and $32.8 million in 2009.
Electric revenues increased slightly in 2011, but the 1.75% water rate increase in 2011 was more than
offset by decreased consumption attributed to conservation programs and the effect of volumetric billing,
resulting in flat revenues, district -wide. The increase in sales to consumers of $0.7 million (2%) in 2010
was primarily because of customer demand and rate increases to fund increased operating costs and
reserves.
Total operating expenses were $29.3 million in 2011, $27.6 million in 2010 and $26.9 million in 2009. The
increases of $1.7 million (6%) in 2011 and $0.6 million in 2010 were due to increased purchased power
costs and depreciation.
The net of non -operating revenues, less non -operating expenses, increased $1.0 million in 2011
substantially because of the sale of land. The increase of $0.8 million in 2010 was mostly due to
increased investment income and special tax revenue.
The net capital contributions increased $1.0 million in 2011, but decreased $7.1 million in 2010 attributed
to changes in construction and development activities.
See accompanying auditors' report.
Page 5
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2011 and 2010
CAPITAL ASSETS
As of December 31, 2011, 2010 and 2009, the District had $121.9 million, $122.1 million, and $118.3
million, respectively, invested in a variety of capital assets, net of accumulated depreciation. A summary
of capital assets is reflected in the following schedule.
Electric distribution facilities
Water distribution facilities
General plant
Sub -totals
Less: Accumulated depreciation
Net of accumulated depreciation
Construction work in progress
Land held for future use
TOTALS
CAPITAL ASSETS
2011
2010
2009
$ 46,895,992
$ 42,895,235
$ 41,569,466
102,184,801
91,627,643
84,674,907
11,709,868
11,751,073
10,402,163
160, 790, 661
146, 273, 951
136, 646, 536
(42,699,978)
(37,979,543)
(34,688,094)
118,090,683
108,294,408
101,958,442
3,827,711
13, 488, 564
16, 023, 820
-
288,663
288,663
$ 121,918,394
$ 122,071,635
$ 118,270,925
Net capital assets (additions, less retirements and depreciation) increased $0.2 million (0%) in 2011 and
$3.8 million (3%) in 2010. Water distribution facilities increased $17.5 from 2009 to 2011 as the 2006
Pipeline Replacement Project was completed and placed into service.
LONG-TERM DEBT
Long-term debt includes revenue bonds and notes payable. At December 31, 2011, 2010 and 2009, the
District had $96.5 million, $94.0 million, and $99.0 million, respectively, in long-term debt outstanding,
including current maturities. No new debt was issued in 2010 and 2009, but $7.8 million debt was issued
in 2011 to refinance an existing pension obligation. (See notes 1(J), 5, and 9(B)).
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
Accounting & Finance Department
11570 Donner Pass Road
Truckee, CA 96161
See accompanying auditors' report.
Page 6
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FINANCIAL STATEMENTS
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED BALANCE SHEETS
December 31, 2011 and 2010
ASSETS
2011
2010
CURRENT ASSETS
Funds
Operating
$ 8,149,507 $
9,178,740
Designated
9,500,894
6,958,539
Restricted
15, 509, 694
15, 268, 711
Total Funds
33,160,095
31,405,990
Accounts receivable, net
6,075,570
5,009,273
Unbilled revenues
2,508,386
2,676,662
Accrued interest receivable
101,902
140,868
Materials and supplies
547,150
560,298
Prepaid expenses
320,059
301,540
Other
45,605
36,823
Total Current Assets
42,758,767
40,131,454
NON -CURRENT ASSETS
Other Non -Current Assets
Restricted funds
2,021,017
1,884,183
Special assessments receivable
6,870,615
7,454,452
Deferred charges
Unamortized debt expense
1,146,426
1,277,378
Other
8,357,128
809,013
Total Other Non -Current Assets
18,395,186
11,425,026
CAPITAL ASSETS
Utility plant
160,790,661
146,273,951
Accumulated depreciation
(42,699,978)
(37,979,543)
Construction work in progress
3,827,711
13,488,564
Land held for future use
-
288,663
Total Utility Plant
121,918,394
122,071,635
TOTAL ASSETS
$ 183,072,347 $
173,628,115
The accompanying notes are an integral part of these consolidated financial statements.
Page 9
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED BALANCE SHEETS
December 31, 2011 and 2010
LIABILITIES AND NET ASSETS
2011 2010
CURRENT LIABILITIES
Other Liabilities
Accounts payable $ 2,451,579 $ 2,375,124
Customer deposits 488,230 423,850
Other 744,161 748,259
Total Other Liabilities 3,683,970 3,547,233
Current Liabilities Payable From Restricted Assets
Current portion of long-term debt 5,933,250 5,196,145
Accrued interest payable 1,311,740 1,289,801
Total Current Liabilities Payable from Restricted Assets 7,244,990 6,485,946
Total Current Liabilities 10,928,960 10,033,179
NON -CURRENT LIABILITIES
Long-term debt, net of discounts, premiums and losses 88,983,704 86,953,400
Installment loans 1,538,618 1,826,842
Unearned revenues 4,335,944 4,447,397
Total Non -Current Liabilities 94,858,266 93,227,639
Total Liabilities 105,787,226 103,260,818
NET ASSETS
Invested in capital assets, net of related debt 42,160,866 40,245,805
Restricted for debt service 16,187,007 15,768,308
Unrestricted 18, 937, 248 14, 353,184
Total Net Assets 77,285,121 70,367,297
TOTAL LIABILITIES AND NET ASSETS $ 183,072,347 $ 173,628,115
The accompanying notes are an integral part of these consolidated financial statements.
Page 10
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TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF REVENUE, EXPENSES, AND CHANGES IN NET ASSETS
For the Years Ended December 31, 2011 and 2010
OPERATING REVENUES
Sales to customers
Water meter surcharge
Standby fees
Other
Total Operating Revenues
OPERATING EXPENSES
Purchased power
Operations and maintenance
Consumer services
Administration and general
Depreciation
Total Operating Expenses
2011 2010
$ 31, 053,129
$ 31,118, 286
746,759
753,642
186,520
186,590
1,497,686
1,417,909
33,484,094
33,476,427
11, 342, 992
10, 645, 657
6,548,249
6,372,644
2,753,561
2,577,461
3,422,302
3,275,605
5,216,956
4,749,135
29, 284, 060
27, 620, 502
Operating Income 4,200,034 5,855,925
NON -OPERATING REVENUE (EXPENSES)
Special tax revenue
3,293,878
3,185,379
Investment income
539,017
771,528
Interest expense
(4,381,426)
(4,632,316)
Amortization
(105,797)
(111,062)
Other non -operating revenues
38,656
168,566
Other non -operating expenses
(41,928)
(178,774)
Gain (loss) on disposition of assets
777,808
(106,226)
Total Non -Operating Expenses
120,208
(902,905)
Income Before Contributions
4,320,242
4,953,020
CAPITAL CONTRIBUTIONS
2,597,582
1,590,134
CHANGE IN NET ASSETS
6,917,824
6,543,154
NET ASSETS - Beginning of Year
70,367,297
63,824,143
NET ASSETS - END OF YEAR
$ 77,285,121
$ 70,367,297
The accompanying notes are an integral part of these consolidated financial statements.
Page 12
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2011 and 2010
2011
2010
CASH FLOWS FROM OPERATING ACTIVITIES
Received from customers
$ 33,103,216 $
33,407,500
Paid to suppliers for goods and services
(17,838,792)
(17,178,291)
Paid to employees for services
(5,074,968)
(5,446,586)
Net Cash Flows from Operating Activities
10,189,456
10,782,623
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Principal payments on long-term debt
(3,138,000)
(2,805,000)
Proceeds from long-term debt issued
7,816,000
Payment of existing pension obligation
(7,816,000)
Interest payments on long-term debt
(648,723)
(603,381)
Net Cash Flows from Noncapital Financing Activities
(3,786,723)
(3,408,381)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital expenditures for utility plant
(4,062,590)
(8,725,310)
Cost of disposal of property net of salvage
(354,563)
(168,410)
Proceeds from sale of land
1,092,308
-
Capital contributions, connection and facility fees
711,067
728,488
Special assessments receipts
583,837
567,671
Special tax receipts
2,833,368
3,168,192
Principal payments on long-term debt
(2,002,145)
(2,181,484)
Interest payments on long-term debt
(3,882,279)
(4,089,185)
Cash Flows From Capital and Related Financing Activities
(5,080,997)
(10,700,038)
CASH FLOWS FROM INVESTING ACTIVITIES
Matured long-term investment reinvested in short-term
1,912,958
-
Interest income received
436,430
654,658
Cash Flows from Investing Activities
2,349,388
654,658
Net Change in Cash and Cash Equivalents
3,671,124
(2,671,138)
CASH AND CASH EQUIVALENTS — Beginning of Year
29,457,117
32,128,255
CASH AND CASH EQUIVALENTS — END OF YEAR
$ 33,128,241 $
29,457,117
NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
Developer and customer added capital assets
$ 1,775,189 $
1,020,728
Recognition of prior period unearned revenues
$ 2,780,676 $
2,446,493
The accompanying notes are an integral part of these consolidated financial statements.
Page 13
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2011 and 2010
2011
2010
RECONCILIATION OF OPERATING INCOME TO NET CASH
FLOWS FROM OPERATING ACTIVITIES
Operating income
$
4,200,034
$
5,855,925
Noncash items included in operating income
Depreciation and amortization
5,216,957
4,749,135
Amortization of deferred expenses
62,232
62,232
Depreciation charged to other accounts
353,422
225,125
Changes in assets and liabilities
Accounts receivable and unbilled revenues
(440,910)
(237,513)
Materials and supplies
13,148
99,474
Prepaid expenses and other current assets
(18,519)
(600)
Accounts payable
579,207
(183,712)
Customer deposits
60,030
168,586
Other current liabilites
163,855
43,971
NET CASH FLOWS FROM OPERATING ACTIVITIES
$
10,189,456
$
10,782,623
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE BALANCE SHEET
Operating
$
8,149,507
$
9,178,740
Designated
9,500,894
6,958,539
Restricted bond funds - current
15,509,694
15,268,711
Restricted bond funds- non -current
2,021,017
1,884,183
Total Cash and Investments
35,181,112
33,290,173
Less: Long-term investments
(1,698,881)
(3,594,876)
Mark to market adjustment
(353,990)
(238,180)
TOTAL CASH AND CASH EQUIVALENTS
$
33,128,241
$
29,457,117
The accompanying notes are an integral part of these consolidated financial statements.
Page 14
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTES TO FINANCIAL STATEMENTS
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.
The District follows all pronouncements of the GASB, and has elected not to follow Financial Accounting
Standards Board (FASB) pronouncements issued after November 30, 1989.
Page 15
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
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. DESIGNATED ASSETS
The board has designated certain resources for future capital projects, replacements and operational
needs.
E. 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.
F. ACCOUNTS RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS
Accounts receivable are recorded at the invoiced amount and are reported net of allowances of $88,845
and $124,134 for 2011 and 2010, respectively.
G. MATERIALS AND SUPPLIES
Materials and supplies are recorded at average cost.
H. UNAMORTIZED FINANCING COSTS
Certain costs related to borrowing funds are amortized over the term of the related borrowings using the
effective interest method.
I. SPECIAL ASSESSMENT RECEIVABLE
Special assessments represent amounts due from property owners within the Donner Lake Assessment
District for improvements made by the District pursuant to an agreement with the property owners to
improve their water quality as discussed in note 8.
Page 16
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J. DEFERRED CHARGES
In 2003, the District entered into a broadband dark fiber maintenance agreement with Sierra Pacific
Communications (SPC) which is included in other deferred charges on the accompanying balance
sheets. 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).
In 2011, the District refinanced an existing $7.8 million pension side fund obligation for its participation in
CalPERS. (See notes 5 and 9(B)). Prior to 2011, the annual side fund payments were expensed and
described in the Notes to Financial Statements. The pension liability was not required to be reported on
the District's Balance Sheet, but the future pension expense was included in budget and rate calculations.
This pension obligation will be deferred through 2022.
K. CAPITAL ASSETS
Capital assets are generally defined by the District as assets with an initial, individual cost of more than
$2,500 and an estimated useful life in excess of one year.
Capital assets of the District are stated at the lower of cost or the fair market 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 2010 and 2011; no interest was capitalized in 2010 or
in 2011.
L. 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.
M. REVENUE RECOGNITION
The District records estimated revenues earned, but not billed to customers, as of the end of the year.
Revenues are recorded as meters are read on a cycle basis throughout each month for electric and water
customers. 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.
Page 17
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
N. 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.
O. 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 Northern California Power Agency (NCPA).
These purchases of services represented 8.5% and 10.2% of total purchased power costs in 2011 and
2010, respectively.
Beginning January 1, 2005, the District entered into an agreement with the Western Area Power
Administration (WAPA). In accordance with this agreement, the District is entitled to an allocation of
power generated by the WAPA system. Because delivery of the power from WAPA to the District is
difficult, the District assigns the power from WAPA to NCPA. The scheduler then uses the value of this
power to offset power purchases from the Utah Associated Municipal Power System (UAMPS) or other
deliverable power purchases.
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 2011 and 2010, the UAMPS contract, along with its appendices, and the WAPA contract comprised the
majority of a diversified power portfolio that balanced risk and cost for the District.
P. INCOME TAXES
As a government agency, the District is exempt from payment of federal and state income taxes.
Q. 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 $933,545 in 2011 and
$900,233 in 2010.
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 levied ad valorem taxes of $2,360,333
in 2011 and $2,285,146 in 2010.
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).
Page 18
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
R. 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 balance sheet.
S. RECENT ACCOUNTING PRONOUNCEMENTS IMPLEMENTED BY THE DISTRICT
In June of 2007, GASB issued Statement No. 51, "Accounting and Financial Reporting for Intangible
Assets." This Statement is effective for financial statements for periods beginning after June 15, 2009.
Governments possess many different types of assets that may be considered intangible assets, including
easements, water rights, timber rights, patents, trademarks, and computer software. The objective of this
statement is to establish accounting and financial reporting requirements for intangible assets to enhance
the comparability of the accounting and financial reporting of such assets among state and local
governments. This statement requires that an intangible asset be recognized in the statement of net
assets only if it is considered identifiable. Additionally, this statement establishes a specified -conditions
approach to recognizing intangible assets that are internally generated. This statement also establishes
guidance specific to intangible assets related to amortization. This statement was implemented in fiscal
year 2010 with no significant impact.
In December 2009, GASB issued Statement No. 57, "OPEB Measurements by Agent Employers and
Agent Multiple — Employer Plans." This statement addressed issues related to the use of the alternative
measurement method and the frequency and timing of measurements by employers that participate in
agent multiple -employer Other Post -Employment Benefit (OPEB) plans. The statement amended
previous GASB statements on OPEB plans, and improved the consistency of reporting for OPEB plans.
This statement was implemented in fiscal year 2011.
In June 2010, GASB issued Statement No. 59, `Financial Instruments Omnibus." This statement
addresses topics relating to the reporting and disclosure of certain financial instruments and external
investment pools, and includes some clarifications to GASB Statement No. 53. The District assessed the
financial statement impact of adopting the new statement, and its impact was not material. This statement
was implemented in fiscal year 2011.
In December 2010, GASB issued Statement No. 62, "Codification of Accounting and Financial Reporting
Guidance Contained in the Pre -November 30, 1989 FASB and AICPA Pronouncements." This statement
incorporates into GASB's authoritative literature certain accounting and financial reporting guidance
issued on or before November 30, 1989 included in: FASB Statements and Interpretations, Accounting
Principles Board Opinions, and Accounting Research Bulletins of the AICPA Committee on Accounting
Procedure that do not conflict with or contradict GASB pronouncements. The statement also supersedes
GASB Statement No. 20, `Accounting and Financial Reporting for Proprietary Funds and Other
Governmental Entities That Use Proprietary Fund Accounting" which eliminates the election for business -
type activities to apply post -November 30, 1989 FASB Statements and Interpretations that do not
contradict or conflict with GASB pronouncements. The District assessed the financial statement impact of
adopting the new statement, and its impact was not material. This statement was implemented in fiscal
year 2011.
Page 19
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
T. ACCOUNTING PRONOUNCEMENTS TO BE IMPLEMENTED IN UPCOMING YEARS
In November 2010, GASB issued Statement No. 61, "The Financial Reporting Entity - Omnibus — An
Amendment of GASB Statements No. 14 and No. 34." This statement modifies GASB Statement 34
requirements for inclusion of component units and amends criteria for reporting of component units. The
statement also clarifies the reporting of equity interests in legally separate organizations. This statement
is effective for periods after June 15, 2012. The District has elected not to early implement GASB
Statement No. 61 and has not determined its effect on the District's financial statements.
In June 2011, GASB issued Statement No. 63, `Financial Reporting of Deferred Outflows of Resources,
Deferred Inflows of Resources, and Net Position." This statement provides guidance on reporting
deferred inflows and outflows of resources. The statement will also standardize the presentation of
deferred inflows and outflows of resources and their effect on a government's net position. This statement
is effective for periods beginning after December 15, 2011. The District has elected not to early
implement GASB Statement No.63, but the District does not believe that its impact will be material.
U. RECLASSIFICATION
Certain amounts in the 2010 Financial Statements have been reclassified in order to conform to the 2011
presentation.
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 has 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 has created an electric rate stabilization fund in
anticipation of future costs. During both 2011 and 2010, there was no utilization of these funds to
offset increased power costs in lieu of raising electric rates.
Page 20
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
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 Capital Replacement
Starting in 2006, the Board has set aside a portion of water revenues designated for future water
infrastructure replacement.
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 Fund
Effective 2007, the Board has set aside a portion of the water rates to improve the cash -to -debt -
service ratio.
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.
Glenshire Lease Proceeds
From 2009 until 2011, the District received funds for a parcel leased in Glenshire. In 2011, the
balance of the "Glenshire Lease Proceeds" fund was transferred to the restricted fund, "Glenshire
Escrow Account," which is used to pay the installment loan associated with Glenshire water
system improvements.
Page 21
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
As of December 31, board designated accounts consisted of the following:
2011
2010
Electric capital replacement fund
$ 11,606
$ 124,642
Electric vehicle reserve
166,772
295,803
Electric rate reserve
2,384,084
2,306,459
Reserve for future meters
426,169
153,033
Water capital replacement fund
3,388,950
1,920,655
Water vehicle reserve
57,585
138,714
Prepaid connection fees
81,479
81,117
Debt service coverage fund
2,940,454
1,885,527
Donner Lake Assessment District surcharge fund
43,795
33,009
Glenshire lease proceeds
-
19,580
Totals
$ 9,500,894
$ 6,958,539
Certain assets have been restricted by bond covenants or third party contractual agreements for the
following purposes:
Certificates of Participation: Electric
The terms of the Electric Division's Certificates of Participation require a reserve fund as security
for each principal and interest payment as they come due. A reserve fund is set aside as
prescribed in the loan documents. These reserve funds are held by Bank of New York Mellon
Trust Company.
Certificates of Participation: Water
The terms of the Water Division's Certificates of Participation require a reserve fund as security
for each principal and interest payment as they come due. A reserve fund is set aside as
prescribed in the loan documents. These reserve funds are held by Bank of New York Mellon
Trust Company.
Special Tax Bonds: Gray's Crossing and Old Greenwood
The terms of the special tax bonds issued for the Mello -Roos Community Facilities Districts
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.
Page 22
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
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 will be set aside for the life of the borrowed amount. All of the reserve funds are invested in
the State of California Local Agency Investment Fund.
Glenshire Escrow Account
The District received cash and other assets as part of its acquisition of the Glenshire Mutual
Water Company. Also, the District will continue to receive a monthly water system upgrade
surcharge from Glenshire residents until November 30, 2017. This cash is 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.
Donner Lake Special Assessment District Improvement 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.
2006 COP Water System Project Fund
During 2006, the District issued $26.6 million in water Certificates of Participation (2006 COP)
(see note 5), the proceeds of which are to be used in part for future water system replacement.
The District established the Water System Project Fund to account for the unspent bond
proceeds. The District is allowed to draw upon such funds as valid construction costs are
incurred.
Solar Initiative Fund
The California Solar Initiative Senate Bill 1 (SB-1) was enacted in 2006, mandating that all
publicly -owned electric utilities within the State of California, prepare, adopt and implement a
solar rebate program by January 2008 to encourage its customers to install solar energy systems.
In 2007, the Board adopted a rebate program effective January 2008, targeting $177,400
annually over ten years to be used as rebates for the installation of solar electricity systems and
to raise these funds through a customer surcharge.
Page 23
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
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.
When both restricted and unrestricted resources are available for use, it is the District's policy to use
restricted resources first, then unrestricted resources as they are needed.
As of December 31, restricted cash and cash equivalents and investments consisted of the following:
Certificates of Participation
Special tax bonds
Facilities fees
DWR-Prop 55 reserve fund
Glenshire escrow accounts
Donner Lake Special Assessment District improvement
Donner Lake Special Assessment District reserve fund
2006 COP Water System Project fund
Solar Initiative
Other (area improvement funds)
Total Restricted Cash and Cash
Equivalents and Investments
2011
$ 7,714,106
4,607,396
991,254
308,346
498,719
2,556,368
481.130
2010
$ 7,343,768
4,608,700
1,389,369
306,946
189,168
2,386,587
401.304
22,023 227,425
230,028 178,825
121,341 120,802
$ 17, 530, 711 $ 17,152, 894
Cash and investments are comprised of the following cash and cash equivalents and investments as of
December 31:
Cash and cash equivalents
Mark to market adjustment
Investments — government bonds
Totals
2011 2010
$ 33,128, 241 $ 29,457,117
353,990 238,180
1 RgR RR1 R .rig4 R76
$ 35,181,112 $ 33, 290,173
Cash and cash equivalents were $33,128,240 and $29,457,117 at December 31, 2011 and 2010,
respectively. Cash equivalents substantially consist of investments in the state pooled fund, money
market funds and government bonds. For purposes of the statements of cash flows, the District considers
all highly liquid instruments with original maturities of three months or less to be cash equivalents.
Adjustments necessary to record investments at market value are recorded in the operating statement as
increases or decreases in investment income. Market values may have changed significantly after year
end.
Page 24
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
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"). 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, 2011 and 2010
the District's deposits and investments were held as follows:
Cash on hand
Deposits
LAIF
Money Market Funds
Government Bonds
Totals
DISCLOSURES RELATING TO INTEREST RATE RISK
2011 2010
1,900
$ 1,200
690,265
554,019
24,706,598
20,969,184
8,083,468
8,170,894
1,698,881 3,594,876
$ 35,181,112 $ 33, 290,173
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 2011 and 2010:
Investment
Maturitv
LAIF
3 months or less
Federated U.S. Treasury Cash Reserve
3 months or less
Fidelity Institutional Prime
3 months or less
Fidelity Money Market
3 months or less
Federal Home Loan Mortgage
09/15/2011
Federal Farm Credit Banks
03/02/2021
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 does not have a rating provided by a nationally recognized statistical rating
organization. The Fidelity Money Market is also not rated. The Fidelity Institutional Prime 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.
Page 25
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
DISCLOSURES RELATING TO CONCENTRATION OF CREDIT RISK
Concentration of credit risk is the risk of loss attributed to the magnitude of investments in a single issuer.
The District's investment policy requires diversification, but does not include specific limitations by issuer.
As of December 31, 2011 and 2010 the portfolio included the following investment requiring disclosure:
Federal Home Loan Mortgage
Federal Farm Credit Banks
CUSTODIAL CREDIT RISK
2011
2010
matured
5.7%
4.8%
5.1 %
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, 2011 and 2010 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).
INVESTMENT 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 26
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 3 - CAPITAL ASSETS
Capital assets consist of the following at December 31, 2011 and 2010:
Electric distribution facilities
Water distribution facilities
General plant
Less: Accumulated depreciation
Construction work in progress
Land held for future use
Totals
Electric distribution facilities
Water distribution facilities
General plant
Less: Accumulated depreciation
Construction work in progress
Land held for future use
Totals
January 1,
December 31,
2011
Additions
Reductions
2011
$ 42,895,235
$
4,064,797
$ (64,039)
$ 46,895,993
91,627,643
10,573,081
(15,923)
102,184,801
11,751,073
688,712
(729,919)
11,709,866
146, 273, 951
15, 326, 590
(809, 880)
160, 790, 661
(37,979,543)
(5,453,483)
733,048
(42,699,978)
13,488,564
4,181,758
(13,842,611)
3,827,711
288,663
24,901
(313,564)
-
$ 122,071,635
$
14,079,766
$ (14,233,007)
$ 121,918,394
January 1,
December 31,
2010
Additions
Reductions
2010
$ 41, 569, 467
$
1,395,129
$ (69, 361)
$ 42, 895, 235
84,674,906
8,123,963
(1,171,226)
91,627,643
10,402,163
1,729,289
(380,379)
11,751,073
136, 646, 536
11, 248, 381
(1,620,966)
146, 273, 951
(34,688,094)
(4,912,415)
1,620,966
(37,979,543)
16,023,820
11,374,415
(13,909,671)
13,488,564
288,663
-
288,663
$ 118,270,925
$
17,710,381
$ (13,909,671)
$ 122,071,635
As of December 31, 2011 and 2010, the plant in service included land and land rights, $1,876,099 and
$1,789,557 respectively, which is 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.
At the end of 2011, there were open contracts with one contractor totaling $0.2 million. All completed
work was paid or accrued, and recorded in construction work in progress.
At the end of 2010, there were open contracts with three contractors totaling $0.4 million. All completed
work was paid or accrued, and recorded in construction work in progress.
Page 27
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
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 has
completed the broadband design project and obtained the necessary regulatory approvals and franchises
needed to construct and launch the broadband project. Expenses incurred by the District to date on the
broadband project total $2,834,079 of which $496,990 is included in capital assets on the accompanying
balance sheet. During 2011 and 2010, there were no material expenditures for this 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.
Page 28
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 5 — LONG-TERM DEBT
Long-term debt consisted of the following at December 31, 2011:
January 1, December 31, Due within
2011 Additions Reductions 2011 one year
Certificates of Participation —
Electric, 2.5% to 5.75%,
due serially to 2013 (net of
unamortized premiums of
$15,524). $
9,380,741 $ -
$ (2,970,215)
$ 6,410,526
$ 3,110,000
Pension Obligation Bonds
Electric, 5%
due semi-annually
- 7,816,000
(198,000)
7,618,000
428,000
State Revol\ing Fund Loan —
Water, 2.34%, due semi-annually
beginning in 2006 to 2026.
10,081,855 -
(282,469)
9,799,386
574,890
Special Tax Bonds — Mello
Roos, 2.25% to 5.7%, due
serially to 2013 (net of
unamortized discounts of
$102,167).
11,936,037
(143,204)
11,792,833
130,000
Special Tax Bonds — Mello
Roos, 3.25% to 5.7%,
due serially to 2035 (net of
unamortized discounts of
$250,007).
14,939,941
(79,948)
14,859,993
115,000
Special Tax Bonds — Mello
Roos, 3.50% to 5.50%,
due serially to 2035 (net of
unamortized discounts of
$169,907).
18,629,703
(139,610)
18,490,093
180,000
Certificates of Participation —
Water, 4.00% to 5.00%,
due serially to 2036 (net of
unamortized discounts of
$99,398, premiums of
$445,295 and arbitrage of
24,182,097
(1,028,695)
23,153,402
870,000
$7,507).
Department of Water Resources,
3.18%, due semiannually to
2021, secured by real
and personal property.
2,718,138
(221,868)
2,496,270
228,910
Installment loans, 5.4% to 6.23%,
various payment terms and
due dates, secured by
equipment.
2,107,875
(272,806)
1,835,069
296,450
Totals $
93,976,387 $ 7,816,000
$ (5,336,815)
$ 96,455,572
$ 5,933,250
Page 29
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 5 — LONG-TERM DEBT (Continued)
Long-term debt consisted of the following at December 31, 2010:
January 1,
December 31,
Due within
2010 Additions
Reductions
2010
one year
Certificates of Participation —
Electric, 2.5% to 5.75%,
due serially to 2013 (net of
unamortized premiums of
$45,738). $
12,229,844 $
$ (2,849,103)
$ 9,380,741
$ 2,940,000
State Revolving Fund Loan —
Water, 2.34%, due semi-annually
beginning in 2006 to 2026.
10,637,030
(555,175)
10,081,855
568,242
Special Tax Bonds — Mello
Roos, 2.25% to 5.7%, due
serially to 2013 (net of
unamortized discounts of
$108,964).
12,019,204
(83,167)
11,936,037
110,000
Special Tax Bonds — Mello
Roos, 3.25% to 5.7%,
due serially to 2035 (net of
unamortized discounts of
$265,053).
14,994,831
(54,890)
14,939,941
95,000
Special Tax Bonds — Mello
Roos, 3.50% to 5.50%,
due serially to 2035 (net of
unamortized discounts of
$180,298).
18,744,255
(114,552)
18,629,703
150,000
Certificates of Participation —
Water, 4.00% to 5.00%,
due serially to 2036 (net of
unamortized discounts of
$107,209, premiums of
$480,286 and arbitrage of
24,996,322
(814,225)
24,182,097
830,000
$179,022).
Department of Water Resources,
3.18%, due semiannually to
2021, secured by real
and personal property.
2,933,120
(214,982)
2,718,138
221,867
Installment loans, 5.4% to 6.23%,
various payment terms and
due dates, secured by
equipment.
2,429,207
(321,332)
2,107,875
281,036
Totals $
98,983,813 $
$ (5,007,426)
$ 93,976,387
$ 5,196,145
Page 30
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 5 — LONG-TERM DEBT (Continued)
On April 3, 2003, the District issued $26,265,000 of Certificates of Participation, the net proceeds of which
were utilized to pay the amounts due to IDACORP for the purchase power contract settlement fees, as
well as to cover the associated costs of issuance. The terms of the new Certificates call for debt service
payments to be made only from the net revenues of the Electric Division. These revenues are required to
be at least equal to 120% of the debt service for each year.
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. The District is also required to fund a reserve
account by making semi-annual reserve payments in the amount of $40,043 for a 10-year period
beginning 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 for additional
information.
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.
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, Truckee Donner Public Utility District Financing Corporation 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.
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.
Page 31
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 5 — LONG-TERM DEBT (Continued)
In June 2011, the District refunded (refinanced) an existing $7.8 million pension side fund obligation for its
participation in CalPERS. (See notes 1(J) and 9(B)). 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 Balance Sheet, but the future pension expense was included in budget and rate calculations.
The new refunding rate of 5% reduces the District's annual pension costs by almost $100,000 through
2022.
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 2010 or in 2011.
Scheduled payments on debt are:
Principal
Interest
Total
2012
$ 5,933,250
$ 4,602,608
$ 10, 535, 858
2013
6,303,392
4,306,814
10, 610, 206
2014
3,184, 097
4,091,247
7,275,344
2015
3,409,830
3,961,459
7,371,289
2016
3,635,919
3,820,715
7,456,634
2017-2021
20, 700, 949
16, 660, 957
37, 361, 906
2022-2026
16, 371, 288
12, 374, 211
28, 745,499
2027-2031
18, 320, 000
8,178,193
26, 498,193
2032-2036
18, 750, 000
2,550,800
21, 300, 800
96, 608, 725
$ 60, 547, 004
$ 157,155, 729
Plus: Unamortized premiums
460,819
Arbitrage rebate
7,507
Less: Unamortized discounts
(621,479)
Total carrying value
$ 96,455,572
Page 32
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 6 — UNEARNED REVENUES
For transactions that have not yet met revenue recognition requirements, revenues are deferred and
reflected in the accompanying balance sheets. As of December 31, 2011 and 2010, 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, 2011 and 2010:
January 1,
December 31,
2011
Additions
Reductions
2011
Unearned tax revenues
$ 1,628,751
$
1,628,625
$ (1,628,752)
$
1,628,624
Development agreement deposits
1,748,499
613,864
(740,552)
1,621,811
Connection fees and other deposits
1,070,147
426,734
(411,372)
1,085,509
Totals
$ 4,447,397
$
2,669,223
$ (2,780,676)
$
4,335,944
January 1,
December 31,
2010
Additions
Reductions
2010
Unearned tax revenues
$ 1,556,627
$
1,628,752
$ (1,556,628)
$
1,628,751
Development agreement deposits
1,576,173
716,966
(544,640)
1,748,499
Connection fees and other deposits
1,083,388
331,984
(345,225)
1,070,147
Totals
$ 4,216,188
$
2,677,702
$ (2,446,493)
$
4,447,397
NOTE 7 — COMMUNITY FACILITIES DISTRICTS
In order to finance various public improvements needed to develop property within the Town of Truckee,
California, the District formed Community Facilities Districts (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). During 2011 and 2010 respectively, taxes of
$866,950 and $927,140 were levied by Old Greenwood. Of these amounts, $433,475 and $463,570
relate to 2011 and 2010, and accordingly, are included in tax revenues in the accompanying statement of
revenues, expenses and changes in net assets. The remaining amount will be recognized in 2012 and
2011 and are included in unearned revenues on the accompanying balance sheets.
Page 33
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
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 2011 and 2010, taxes of $2,390,301
and $2,330,364 respectively were levied by Gray's Crossing. Of this amount, $1,195,150 and $1,165,182
relate to 2011 and 2010, and accordingly, are included in tax revenues in the accompanying statement of
revenues, expenses and changes in net assets. The remaining amount will be recognized in 2012 and
2011 and is included in unearned revenues on the accompanying balance sheets.
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 AQUISITION
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.
As of December 31, 2011 and 2010, the assessment receivable from the property owners was
$6,870,615 and $7,454,452 respectively, of which $622,071 and $607,597 is due in the next year. These
amounts are shown as Special Assessments Receivable in the Balance Sheet. 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 34
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 9 — EMPLOYEE BENEFIT PLANS
A. CALPERS MISCELLANEOUS 2.7% AT 55 RISK POOL PENSION PLAN
The District and bargaining unit employees elected to participate in the Public Agency portion of California
Public Employees' Retirement System (CaIPERS) "Miscellaneous 2% at 60 Risk Pool," effective August
21, 2004. On November 15, 2010, the Board of Directors adopted an amendment to the CaIPERS
Miscellaneous Risk Pool Pension to increase retiree benefits from the 2% at 60 Plan to the 2.7% at 55
Plan, effective January 1, 2011. The employees pay the additional cost through increased payroll
deductions and a relinquishment a 3% employer match to the deferred compensation plan.
The CaIPERS Miscellaneous 2.7% at 55 Risk Pool is a cost -sharing multi -employer defined benefit plan
administered by CaIPERS, which acts as a common investment and administrative agent for participating
public employers within the state of California. State statutes within the Public Employees' Retirement
Law establish a menu of benefit provisions, as well as other requirements. The District selects optional
benefit provisions from the benefit menu by contract with CaIPERS and adopts those benefits through
local ordinance or resolution. The CaIPERS plan also provides for death and disability benefits. CaIPERS
issues a separate comprehensive annual financial report. Copies of the CaIPERS' comprehensive annual
financial report 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
Prior to January 2011, active plan participants were required to contribute 7% of their annual covered
salary, of which the District paid 4% on behalf of the participants. Effective January 2011, active
participants are required to contribute 8% of their annual covered salary, of which the District pays 4%.
The District and the employees are also required to contribute the actuarially determined remaining
amounts necessary to fund the benefits for its participants. The required employer contribution rate for
fiscal years ending June 30, 2011 and 2010 was 17.086% and 17.418% of payroll. The contribution
requirements of the plan participants are established by State statute and the employer contributions rate
is established and may be amended by CaIPERS.
The District's annual pension cost (APC) for the years ended December 31, 2011, 2010, and 2009
respectively, was $1,238,501, $1,190,116, and $1,291,312, and was equal to the District's annual
required contributions (ARC) as determined by the June 30, 2010, 2009 and 2008 actuarial valuations
using the entry age normal actuarial cost method with the contributions determined as a percent of
payroll. The actuarial methods and assumptions used are those adopted by the CaIPERS Board of
Administration. Significant actuarial assumptions and methods include:
Actuarial Cost Method
Amortization Method
Average Remaining Period
Asset Valuation Method
Investment Rate of Return
Projected Salary Increases
Inflation
Payroll Growth
Entry Age Actuarial Cost Method
Level Percent of Payroll
19 Years as of the Valuation Date
15 Year Smoothed Market
7.75% (Net of Administrative Expenses)
3.55% - 14.45%
3%
3.25%
Page 35
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued)
The plan's unfunded actuarial accrued liability is being amortized as a level percentage of projected
payrolls on an open basis over a period not to exceed 30 years.
Retirement plans like the District's with less than 100 active members are required to participate in a risk
pool. Therefore, the funding progress for the District for the June 30, 2010 and 2009 valuation dates are
for the entire pool, not just the District employees. The following are funding schedules for the current
and former CalPERS pooled pension plans:
Schedule of Pension Plan Funding Progress - 2.7%@ 55 (Started Participation January 1, 2011)
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
06/30/2008
$1,823,366,479
$1,529,548,799
$ 293,817,680
83.9%
$ 414,589,514
70.9%
06/30/2009
$2,140,438,884
$1,674,260,302
$ 466,178,582
78.2%
$ 440,071,499
105.9%
06/30/2010
$2,297,871,345
$1,815,671,616
$ 482,199,729
79.0%
$ 434,023,381
111.1%
Schedule of Pension Plan Funding Progress - 2%@ 60 (Ended participation December 31, 2010)
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
06/30/2007
$ 498,934,859
$ 479,520,670
$ 19,414,189
96.1%
$ 171,052,819
11.3%
06/30/2008
$ 532,483,463
$ 513,147,099
$ 19,336,364
96.4%
$ 183,387,608
10.5%
06/30/2009
$ 582,841,869
$ 553,953,526
$ 28,888,343
95.0%
$ 184,319,666
15.7%
As of July 1, 2011, the District contribution rate changed to 14.113% of payroll. This was equivalent to the
scheduled 27.616%, less 13.503% for the pension side fund that was refinanced on June 30, 2011.
B. EXISTING PENSION OBLIGATION - PENSION SIDE FUND
At the time of joining the CalPERS Miscellaneous Risk Pool, an employer side fund was created to
account for the difference between the funded status of the pool and the funded status of the District's
plan. The side fund used the actuarial assumption of a 7.75% investment return and it was amortized on
a closed basis, ending in 2022. On June 30, 2011, the District refinanced the existing $7.8 million
pension side fund obligation with amortized payments through 2022 and a 5% rate. (See notes 1(J) and
5). A portion of the debt service of the existing pension obligation is paid by the employees as a 3.5%
payroll deduction. The remaining debt service is paid by the District and recorded as pension expense;
allocated 63% to the Electric Utility and 37% to the Water Utility. The net side fund pension expense for
the six months ending December 31, 2011 was $340,836.
Page 36
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued)
C. DEFERRED COMPENSATION PLAN
The District maintains two deferred compensation plans: a 401(a) and a 457 plan, (the Plans) for certain
employees. 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 balance sheets.
D. 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.
The District began providing post employment health care on January 1, 2000 to all employees, and
qualified dependents, that retire from the District on or after attaining age 60 with service of at least 20
years. As of December 31, 2010, there were eleven active plan participants. 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. For
participants who retired prior to age 60, the benefit is reduced by 2% 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 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
Page 37
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued)
The District's annual OPEB expense is calculated based on the 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 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 following table shows the components of the District's annual OPEB cost, 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)
January 1 December 31
12/31/2009
$ 203,500
$
$ 203,500
$ 202,680
99.6%
$ 820
$ (98,104) $ (97,284)
12/31/2010
$ 207,600
$
$ 207,600
$ 212,008
102.1%
$ (4,408)
$ (97,284) $ (101,692)
12/31/2011
$ 271,200
$ 1,322
$ 272,522
$ 237,501
87.1%
$ 35,021
$(101,692) $ (66,671)
Actuarial valuations of an ongoing plan are required at least once every two 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 include:
Actuarial Cost Method
Discount Rate
General Inflation
Amortization of Unfunded Liability
Projected Unit Credit
7.5%
3% Annual Increase
25 Years; Level Annual Payments
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
01/01/2007
$ 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%
*Funding began in 2007. Valuations are required once every two years. In 2011, the vaulation
date changed to July 1 in compliance with GASB Statement No. 57.
Page 38
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
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 39
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
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, 2011 and 2010.
BALANCE SHEETS
December 31, 2011
Gray's
Old
ASSETS
Electric
Water
Crossing
Greenwood
Current assets
$
17,591,504
$ 15,899,801
$
6,718,213
$ 2,549,249
Non -current assets:
Capital assets, net
41,035,844
80,882,550
-
-
Restricted assets
-
2,021,017
-
-
Other long-term assets
8,378,619
7,459,211
365,367
170,972
Total Noncurrent Assets
49,414,463
90,362,778
365,367
170,972
TOTAL ASSETS
$
67,005,967
$ 106,262,579
$
7,083,580
$ 2,720,221
LIABILITIES AND NET ASSETS
Current liabilities
$
6,632,745
$ 3,028,771
$
903,167
$ 364,277
Non -current Liabilities
Long-term debt, net of current
10,653,047
35,151,357
33,055,086
11,662,832
portion
Unearned revenues
2,156,675
550,643
1,195,151
433,475
Total Liabilities
19,442,467
38,730,771
35,153,404
12,460,584
Net Assets
Invested in capital assets, net
40,978,938
45,788,507
(32,984,719)
(11,621,860)
of related debt
Restricted for debt service
5,793,876
6,645,790
2,737,118
1,010,223
Unrestricted
790,686
15,097,511
2,177,777
871,274
Total Net Assets
47,563,500
67,531,808
(28,069,824)
(9,740,363)
TOTAL LIABILITIES
AND NET ASSETS
$
67,005,967
$ 106,262,579
$
7,083,580
$ 2,720,221
Page 40
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 11 — SEGMENT DISCLOSURE (Continued)
December 31, 2010
Gray's
Old
ASSETS
Electric
Water
Crossing
Greenwood
Current assets
$ 17,047,683
$ 14,165,563
$ 6,404,461
$ 2,551,447
Non -current assets:
Capital assets, net
40,083,780
81,987,855
-
-
Restricted assets
-
1,884,183
-
-
Other long-term assets
872,346
8,098,639
387,512
182,346
Total Noncurrent Assets
40,956,126
91,970,677
387,512
182,346
TOTAL ASSETS
$ 58,003,809
$ 106,136,240
$ 6,791,973
$ 2,733,793
LIABILITIES AND NET ASSETS
Current liabilities
$ 5,649,704
$ 3,180,340
$ 856,545
$ 384,290
Non -current Liabilities
Long-term debt, net of current
portion
6,657,919
36,971,644
33,324,643
11,826,036
Unearned revenues
2,140,780
677,865
1,165,182
463,570
Total Liabilities
14,448,403
40,829,849
35,346,370
12,673,896
Net Assets
Invested in capital assets, net
of related debt
40,041,718
45,139,908
(33,182,131)
(11,753,690)
Restricted for debt service
5,425,987
6,612,474
2,719,710
1,010,137
Unrestricted
(1,912,299)
13,554,009
1,908,024
803,450
Total Net Assets
43,555,406
65,306,391
(28,554,397)
(9,940,103)
TOTAL LIABILITIES
AND NET ASSETS
$ 58,003,809
$ 106,136,240
$ 6,791,973
$ 2,733,793
Page 41
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 11 — SEGMENT DISCLOSURE (Continued)
STATEMENTS OF REVENUE, EXPENSES, AND CHANGES IN NET ASSETS
Year ended December 31, 2011
Gray's
Old
Electric
Water
Crossing
Greenwood
Operating Revenues
Sales to consumers
$ 21,106,358
$ 9,946,771
$
$
Other operating revenues
2,718,676
1,283,733
Operating expenses
(18,753,199)
(6,885,349)
Depreciation
(1,659,556)
(3,557,400)
Non -operating revenues (expenses)
(446,332)
(117,773)
484,573
199,740
Income (loss) before
capital contributions
2,965,947
669,982
484,573
199,740
Capital contributions, net
1,042,147
1,555,435
-
-
CHANGE IN NET ASSETS
4,008,094
2,225,417
484,573
199,740
NET ASSETS, BEGINNING
43,555,406
65,306,391
(28,554,397)
(9,940,103)
NET ASSETS, ENDING
$ 47,563,500
$ 67,531,808
$ (28,069,824)
$ (9,740,363)
Year ended December 31, 2010
Gray's
Old
Electric
Water
Crossing
Greenwood
Operating Revenues
Sales to consumers
$ 20,922,276
$ 10,196,010
$
$
Other operating revenues
2,698,466
1,371,802
Operating expenses
(17,853,963)
(6,729,531)
Depreciation
(1,609,711)
(3,139,424)
-
Non -operating revenues (expenses)
(640,959)
(855,232)
429,246
164,040
Income (loss) before
capital contributions
3,516,109
843,625
429,246
164,040
Capital contributions, net
889,157
700,977
-
-
CHANGE IN NET ASSETS
4,405,266
1,544,602
429,246
164,040
NET ASSETS, BEGINNING
39,150,140
63,761,789
(28,983,643)
(10,104,143)
NET ASSETS, ENDING
$ 43,555,406
$ 65,306,391
$ (28,554,397)
$ (9,940,103)
Page 42
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
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, 2011
Gray's Old
Electric Water Crossing Greenwood
$ 5,704,742 $ 4,484,714 $ $
(3,786,723) -
(1,816,493) (3,159,654) (185,931) 81,081
30,744 2,320,690 (8,432) 6,386
132,270 3,645,750 (194,363) 87,467
14 dd7 Q1R 10 d7R RF1 q QAQ 171 1 FR4 71Q
$ 13,580,186 $ 14,122,611 $ 3,754,758 $ 1,670,686
Year ended December 31, 2010
Gray's Old
Electric Water Crossing Greenwood
$ 5,848,631 $ 4,933,992 $ $
(3,408,381) - -
(2,394,024) (8,633,476) 231,071 96,391
43,617 574,480 29,157 7,404
89,843 (3,125,004) 260,228 103,795
14 qrA n7q 1q rni RFF q AAA Aqq 1 d7Q d7d
$ 13,447,916 $ 10,476,861 $ 3,949,121 $ 1,583,219
Page 43
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2011 and 2010
NOTE 12 — MARTIS VALLEY GROUNDWATER STUDY
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 that depend on the
Martis Valley Basin for their water supply. Together, the TDPUD, NCSD and PCWA (Partnership
Agencies) have partnered to update a groundwater management plan and help develop a groundwater
model for the Martis Valley basin.
The Martis Valley Groundwater Management Plan (GMP) is being updated to reflect current water
resources planning in the region and to incorporate the latest information and understandings of the
underlying groundwater basin. This collaborative effort will provide the guidance necessary to align
groundwater policy. In addition to updating the groundwater management plan, a computer model of the
groundwater basin will be developed, which will incorporate available data and enhance understanding of
the groundwater basin. A climate change modeling component will be part of the final groundwater model.
Development of the GMP started in April of 2011 and is expected to take about two years to complete.
The total cost of the project is approximately $1,000,000, which includes federal funding of approximately
$500,000 from the U.S. Bureau of Reclamation and $250,000 from Lawrence Livermore National
Laboratory; and contributions of $150,000 from TDPUD and $100,000 from the other members of the
Partnership Agencies.
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 44
SUPPLEMENTAL INFORMATION
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2011
CONSOLIDATING BALANCE SHEETS
As of December 31, 2011
Component Units
Electric
Water
Gray's
Operations
Operations
Crossing
Old Greenwood Eliminations
Totals
ASSETS
CURRENT ASSETS
Funds
Operating
$ 5,045,574
$ 2,285,885 $
409,473
$ 408,575 $
$ 8,149,507
Designated
2,562,462
6,938,432
-
-
9,500,894
Restricted
5,986,031
4,916,267
3,345,285
1,262,111
15,509,694
Total Funds
13,594,067
14,140,584
3,754,758
1,670,686
33,160,095
Accounts receivable, net
1,510,546
725,488
2,961,606
877,930
6,075,570
Unbilled revenues
1,808,610
699,776
-
-
2,508,386
Accrued interest receivable
7,887
91,533
1,849
633
101,902
Materials and supplies
429,996
117,154
-
-
547,150
Prepaid expenses
217,131
102,928
320,059
Other
23,267
22,338
-
45,605
Total Current Assets
17,591,504
15,899,801
6,718,213
2,549,249
42,758,767
NON -CURRENT ASSETS
Other Non -Current Assets
Restricted funds
-
2,021,017
-
-
2,021,017
Special assessments receivable
-
6,870,615
-
-
6,870,615
Deferred charges
Unamortized debt issue costs
21,491
588,596
365,367
170,972
1,146,426
Other
8,357,128
-
-
-
8,357,128
Total Other Non -Current Assets
8,378,619
9,480,228
365,367
170,972
18,395,186
CAPITAL ASSETS
Utility plant
54,804,438
105,986,223
-
-
160,790,661
Accumulated depreciation
(16,753,721)
(25,946,257)
(42,699,978)
Construction work in progress
2,985,127
842,584
3,827,711
Total Utility Plant
41,035,844
80,882,550
-
121,918,394
TOTAL ASSETS
$ 67,005,967
$ 106,262,579 $
7,083,580
$ 2,720,221 $
$ 183,072,347
Page 46
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2011
LIABILITIES AND NET ASSETS
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, premiums and losses
Installment loans
Unearned revenues
Total non -current liabilities
Total Liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted for debt service
Unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
Component Units
Electric Water Gray's
Operations Operations Crossing Old Greenwood Eliminations Totals
$ 2,056,751
$ 394,828
$ $
$
$ 2,451,579
363,766
124,464
488,230
419,203
324,958
744,161
2,839,720
844,250
3,683,970
3,600,870
1,907,380
295,000
130,000
5,933,250
192,155
277,141
608,167
234,277
1,311,740
3,793,025
2,184,521
903,167
364,277
7,244,990
6,632,745
3,028,771
903,167
364,277
10,928,960
10,490,527
33,775,259
33,055,086
11,662,832
88,983,704
162,520
1,376,098
-
-
1,538,618
2,156,675
550,643
1,195,151
433,475
4,335,944
12,809,722
35,702,000
34,250,237
12,096,307
94,858,266
19,442,467
38,730,771
35,153,404
12,460,584
105,787,226
40,978,938
45,788,507
(32,984,719)
(11,621,860)
42,160,866
5,793,876
6,645,790
2,737,118
1,010,223
16,187,007
790,686
15,097,511
2,177,777
871,274
18,937,248
47,563,500
67,531,808
(28,069,824)
(9,740,363)
77,285,121
$ 67,005,967
$ 106,262,579
$ 7,083,580 $
2,720,221 $
$ 183,072,347
Page 47
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2011
THIS PAGE IS INTENTIONALLY LEFT BLANK
Page 48
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2011
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
For the Year Ended December 31, 2011
Component Units
Electric
Water
Gray's
Operations
Operations
Crossing Old Greenwood
Eliminations
Totals
OPERATING REVENUES
Sales to customers
$ 21,106,358
$ 9,946,771 $
$
$
$
31,053,129
Water meter surcharge
-
746,759
746,759
Interdepartmental sales
1,213,270
2,318
(1,215,588)
-
Standby fees
25,480
161,040
186,520
Other
1,479,926
373,616
(355,856)
1,497,686
Total Operating Revenues
23,825,034
11,230,504
(1,571,444)
33,484,094
OPERATING EXPENSES
Purchased power
11,342,992
-
11,342,992
Operations and maintenance
3,330,131
4,433,706
(1,215,588)
6,548,249
Consumer services
1,959,336
794,225
2,753,561
Administration and general
2,120,740
1,657,418
(355,856)
3,422,302
Depreciation
1,659,556
3,557,400
5,216,956
Total Operating Expenses
20,412,755
10,442,749
(1,571,444)
29,284,060
Operating Income
3,412,279
787,755
4,200,034
NON -OPERATING REVENUE (EXPENSES)
Special tax revenue
-
-
2,360,333
933,545
3,293,878
Investment income
35,405
506,620
(8,585)
5,577
539,017
Interest expense
(380,735)
(1,463,164)
(1,831,258)
(706,269)
(4,381,426)
Amortization
(11,628)
(28,411)
(47,588)
(18,170)
(105,797)
Other non -operating revenues
36,467
2,189
38,656
Other non -operating expenses
-
(24,796)
(17,132)
(41,928)
Gain (loss) on disposition of assets
(89,374)
867,182
-
777,808
Total Non -Operating Expenses
(446,332)
(117,773)
484,573
199,740
120,208
Income Before Contributions
2,965,947
669,982
484,573
199,740
4,320,242
CAPITAL CONTRIBUTIONS, net
1,042,147
1,555,435
-
-
2,597,582
CHANGE IN NET ASSETS
4,008,094
2,225,417
484,573
199,740
6,917,824
NET ASSETS - Beginning of Year
43,555,406
65,306,391
(28,554,397)
(9,940,103)
70,367,297
NET ASSETS - END OF YEAR
$ 47,563,500
$ 67,531,808 $
(28,069,824) $
(9,740,363) $
$
77,285,121
Page 49
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2011
STATEMENTS OF CASH FLOWS
For the Year Ended December 31, 2011
Component Units
Electric
Water
Gray's
Operations
Operations
Crossing
Old Greenwood Eliminations
Total
CASH FLOWS FROM OPERATING ACTIVITIES
Received from customers
$ 23,485,662 $
11,188,998 $
$ $ (1,571,444) $
33,103,216
Paid to suppliers for goods and services
(14,617,254)
(4,792,982)
1,571,444
(17,838,792)
Paid to employees for services
(3,163,666)
(1,911,302)
(5,074,968)
Net Cash Flows from Operating Activities
5,704,742
4,484,714
10,189,456
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Principal payments on long-term debt
(3,138,000)
-
(3,138,000)
Proceeds from long-term debt issued
7,816,000
7,816,000
Payment of existing pension obligation
(7,816,000)
(7,816,000)
Interest payments on long-term debt
(648,723)
(648,723)
Net Cash Flows from Noncapital Financing Activities
(3,786,723)
(3,786,723)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital expenditures for utility plant
(2,373,448)
(1,689,142)
(4,062,590)
Cost of disposal of property net of salvage
(129,437)
(225,126)
(354,563)
Proceeds from sale of land
-
1,092,308
1,092,308
Capital contributions, connection and facility fees
549,063
162,004
711,067
Special assessments receipts
-
583,837
583,837
Special tax receipts
-
1,893,704
939,664
2,833,368
Principal payments on long-term debt
(51,447)
(1,555,698)
(245,000)
(150,000)
(2,002,145)
Interest payments on long-term debt
188,776
(1,527,837)
(1,834,635)
(708,583)
(3,882,279)
Cash Flows From Capital and Related Financing Activities
(1,816,493)
(3,159,654)
(185,931)
81,081
(5,080,997)
CASH FLOWS FROM INVESTING ACTIVITIES
Matured long-term investment reinvested in short-term
-
1,912,958
-
1,912,958
Interest income received
30,744
407,732
(8,432)
6,386
436,430
Cash Flows from Investing Activities
30,744
2,320,690
(8,432)
6,386
2,349,388
Net Change in Cash and Cash Equivalents
132,270
3,645,750
(194,363)
87,467
3,671,124
CASH AND CASH EQUIVALENTS — Beginning of Year
CASH AND CASH EQUIVALENTS — END OF YEAR
13,447,916 10,476,861 3,949,121 1,583,219 29,457,117
$ 13,580,186 $ 14,122,611 $ 3,754,758 $ 1,670,686 $ $ 33,128,241
NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
During 2011: $508,979 and $1,266,210 of capital assets were contributed to the electric and water utilities, respectively, by customers and developers.
$783,065 and $368,859 of prior period unearned revenues were recognized by the electric and water utilities, respectively. Page 50
$1,165,182 and $463,570 of prior period unearned revenues were recognized by the component units, Gray's Crossing and Old Greenwood, respectively.
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
RECONCILIATION OF OPERATING INCOME TO NET CASH
FLOWS FROM OPERATING ACTIVITIES
Operating income
Noncash items included in operating income
Depreciation and amortization
Amortization of deferred expenses
Depreciation charged to other accounts
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 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
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2011
Component Units
Electric Water Gray's
Operations Operations Crossing Old Greenwood Eliminations Total
$ 3,412,279 $
787,755 $
$ $ $ 4,200,034
1,659,557
3,557,400
5,216,957
62,232
-
62,232
239,536
113,886
353,422
(380,553)
(60,357)
(440,910)
10,025
3,123
13,148
(36,361)
17,842
(18,519)
518,073
61,134
579,207
41,180
18,850
60,030
178,774
(14,919)
163,855
$ 5,704,742 $
4,484, 714 $
$ $ $ 10,189, 456
$ 5,045,574 $ 2,285,885 $ 409,473 $ 408,575 $
2,562,462 6,938,432 - -
5,986,031 4,916,267 3,345,285 1,262,111
- 2,021,017 _
13, 594, 067 16,161, 601 3,754,758 1,670,686
- (1,698,881) - -
(13,881) (340,109)
$ 13, 580,186 $ 14,122, 611 $ 3,754,758 $ 1,670,686 $
$ 8,149, 507
9,500,894
15, 509, 694
2,021,017
35,181,112
(1,698,881)
(353, 990)
$ 33,128, 241
Page 51
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2011
Pension Plan Funding History - 2.7%@ 55 (Started Participation January 1, 2011)
For the Years Ended June 30, 2006 through 2010
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
06/30/2006
$1,280,157,040
$1,069,546,974
$ 210,610,066
83.5%
$ 304,898,179
69.1%
06/30/2007
$1,627,025,950
$1,362,059,317
$ 264,966,633
83.7%
$ 376,292,121
70.4%
06/30/2008
$1,823,366,479
$1,529,548,799
$ 293,817,680
83.9%
$ 414,589,514
70.9%
06/30/2009
$2,140,438,884
$1,674,260,302
$ 466,178,582
78.2%
$ 440,071,499
105.9%
06/30/2010
$2,297,871,345
$1,815,671,616
$ 482,199,729
79.0%
$ 434,023,381
111.1%
Pension Plan Funding History - 2%@ 60 (Ended Participation December 31, 2010)
For the Years Ended June 30, 2003 through 2009
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
06/30/2003
$ 430,371,544
$ 429,814,105
$ 557,439
99.9%
$ 159,238,690
0.4%
06/30/2004
$ 437,494,341
$ 428,025,075
$ 9,469,266
97.8%
$ 159,135,314
6.0%
06/30/2005
$ 484,351,523
$ 459,996,995
$ 24,354,528
95.0%
$ 174,127,476
14.0%
06/30/2006
$ 478,122,215
$ 454,602,459
$ 23,519,756
95.1%
$ 170,458,082
13.8%
06/30/2007
$ 498,934,859
$ 479,520,670
$ 19,414,189
96.1%
$ 171,052,819
11.3%
06/30/2008
$ 532,483,463
$ 513,147,099
$ 19,336,364
96.4%
$ 183,387,608
10.5%
06/30/2009
$ 582,841,869
$ 553,953,526
$ 28,888,343
95.0%
$ 184,319,666
15.7%
Retiree Health Plan Funding History
For the Years Ended January 1, 2006, 2007, 2009, and 2011; and July 1, 2011*
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
01/01/2006
$ 2,328,500
$ -
$ 2,328,500
0.0%
$ 5,542,800
42.0%
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%
*Retire Health Plan funding began in 2007. Valuations are required once eery two years. The valaution Page 52
date changed to July 1 in compliance with GASB Statement No. 57.