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HomeMy WebLinkAboutFinancial StatementsI J ft I TRUCKEE-DONNER PUBLIC UTILITY DISTRICT FINANCIAL STATEMENTS AS OE DECEMBER 31, 19« 1 AND 1980 TOGETHER WITH AUDITOHj !\: PQ I •Tontntivo & Preliminary For Discussion Purposes Only I I To the Board of Directors of Truckee-Donner Public Utility District: We have examined the balance sheets of Truckee-Donner Public Utility District (a political subdivision of the State of California) as of December 31, 1981 and 1960, and the related statements of net revenue and funds provided for additions to utility plant for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the c i rcumstances . As discussed further in Note 6 to the accompanying financial statements, the District is a party in a legal action which seeks damages in excess of $100 million from various defendants, including the District. The ultimate outcome of this legal action and the effect upon the District, if any, cannot be determined at this time. In our opinion, subject to the effect of any adjustments that might have been required had the outcome of the legal action referred to in the preceding paragraph been known, the financial statements referred to above present fairly the financial position of Truckee-Donner Public Utility District as of December 31, 1981 and •Tentativo fe Preliminary For Discussion Purposes Only -z- I 1980, and the results of its operations, and funds provided for additions to its utility plant for the years then ended, in conformity with generally accepted accounting principles applied on a consi stent basis. Our examination was made for the purpose of forming ai opinion on the basic financial statements taken as a whole. The I combining statement of departmental operations is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the examination of the basic financial statements and, in our opinion, subject to the effect, of any adjustments that might have been required had the outcome of the legal action discussed above been known, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. March 26, 1982 Tentative & Preliminary" -■o- n •on Purposes Onfv TBUCHEE -OONNTB PUBLIC IITUlTf 01 STRIC1 >iu«f[ SHEITS -. nirr«nEn 31, urn AND lino USSETS coMSUHtRS' rouITT mm LIABILITIES UTILITY PLANT, «t cost: Plant In servlce- Electrtc Uater less - Accunulated depreciation Net plant In service Construction work In proqress Electric acquisition adjustments Net utility plant BESTBICTED PiJHOS INote 31 CUBBENT ASSETS: Cash Accounts receivable - consumer, less bad debt reser.es of 130,R3I In to«l and 174,563 In 1 HBO Accounts receivable - standby fees and other, less bad debt reserves of J^,1?S in 10B1 and 15,343 In |sV|f Inventory, at average cost Interest receivable, prepaid Insurance and otner I1.ir?.4ss I,hr7.f?» I?,BOS ,467 1 ,,'1 >,|60 t<, ina.bo? 14,113 ,636 ?.3on,l«i !,IM,?n? \?,4 'B,S|n 11 ,OBn .4 14 1,IBS.70? "14,1111 I , 01 (1 1 , " ' ll.finK,?:? 17.B06.H? II ,31 1,073 11 ,0?6,'0fl 5 AblJOS $ 430,017 1?B,0B4 1?7.46? 1U.035 114,300 46,475 SO,"13 11,17S,7BR 11,156,031 16,l*3,0B3 I*,000,076 rAPITALI7ATlnN: Consumers' equity employed 1" the business- Balance, beqlnnlnq of year Net rpvenue for the yPar Total consumers' equity lonq-term debt {Note 41- BEA bonds Installment note payable Note payable to Sierra Pacific Power C ompany Sener assessments payable Total lonq-term debt Total capltal1 fat Ion CUBBENT LIMUITItt: Accounts payable Tromlssory note (Note 5) Ponds payable INote *) Deferred Income - standby fees Consumer deposits Ace rued Interest Accrued 1 labll Ules Current maturities of lonq-term doht CONTINGENCIES (Note 6) CONSTPUCTinN AOVANrrS (Not" 3) 10B1 13.03B.506 IP,557,531 456,766 4P0.076 S3 ,"S,?7? 13 ,03fl .506 i 777,574 155,000 s 707 .605 _ q ,067 7.0B1 13 ,750 t 434,655 1 3?0 ,«1? 13 ,970,077 13 ,JH, ,04s 1 77B.771 1 671 ,070 ?44 HIS 747 ,?'n 765.500 - «o.o?fl 57 ,°B1 RJ.RIJ 67 ,303 14,073 19, ,773 04 H40 BB 170 33,044 3A, 46P, 11 ,'17,364 11 ,l?i , 5?5 1 715.70? 1 SB'.633 16.163.0B3 Is.nBO.o.'S thf arrompanvlnT nnTrs are an Inteqral part of these financial statements. _ 'Tentative a prnI- . Only TRUCKEE-DONNER PUBLIC UTILITY DISTRICT I STATEMENTS OF NET REVENUE FOR THE YEARS ENDED DECEMBER 31, 1981 AND 1980 OPERATING REVENUES: Electric Water OPERATING EXPENSES: Purchased power Transmi ssi on Di stributinn Consumer accounts Administrative and general Depreciati on Other I Net operating revenue OTHER INCOME: Interest income Gain on sale of land Other, net Net revenue before interest expense INTEREST EXPENSE Net revenue 1981 $3,829,585 584,285 1980 $3,509,568 420,610 $4,413,870 $3,930,178 $2,881,263 93,143 276,257 243,890 424,844 144,160 12,175 $2,557,863 73,425 194,390 191,467 365,657 131,069 $4,075,732 $3,513,871 $ 338,138 $ 416,307 212,319 26,562 (180) 151,778 (1,347) $ 576,839 $ 566,738 120,073 85,763 $ 456,766 $ 480,975 The accompanying notes are an integral part of these financial statements. "Trntativo b Frolimincry" >&!' Discussion Tumors n„ Purposes Onfy TRUCKEE-DONNER PUBLIC UTILITY DISTRICT I STATEMENTS OF FUNDS PROVIDED FOR ADDITIONS TO UTILITY PLAN" FOR THE YEAi ENDED DECEMBER 31, 1981 AND 1980 1981 1980 FUNDS PROVIDED INTERNALLY: Operations- Net revenue Depreciation expense not requiring a current use of funds Other S 456,766 S 480,975 144, 160 9,584 131,069 (3,939) Funds provided by operations i 610,510 S 608,105 Deduct- Reductions in long-term debt Additions to restricted funds (40,757) [292,275) (32,357) 353,193) I Net funds provided internally FUNDS PROVIDED FROM EXTERNAL SOURCES: Advances utilized for construction Installment note FUNDS PROVIDED FROM NET CHANGE IN WORKING CAPITAL (Note 7) Funds provided for additions to uti1i ty plant $ 277 ,478 S 222,555 S 116,160 155,000 S 220,023 S 271,160 $ 220,023 S 376,982 S 295,007 $ 925,620 $ 737,585 The accompanying notes are an integral part of these financial statements. itivo G Pr&umirw ty .on ©03S Only TRUCKEE-DONNER PUBLIC UTILITY DISTRICT I NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1981 AND 1980 1. Sjjmmary of_ Si gni f i cant Accounting Policies Or ga^n i z a ti^J2 -- The Truckee-Donner Public Utility District (the District) was formed and operates under the State of California Public Utility District Act to provide electric and water service to a portion of Nevada County described as Truckee and Donner Lake. The District is exempt fron payment of federal and state income taxes. I Depreciation -- The District provides for depreciation on the historical cost ot utility plant on a straight-line basis at rates in accordance with the Rural Electrification Administration Bulletin 181-1. The average annual composite rates were 4.0'. in both 1981 and 1980. Retirements of utility plant and the related costs of removal and salvage are charged to accumulated depreciation. The costs of replacement of property units are charged to plant. Repair and maintenance costs are charged to expense. Revenues -- Revenues consist of billings to consumers as meters are read on a cycle basis throughout each month. Services provided to municipal entities without charge are not reflected in operating revenues. "Tcrnutivo & Pr&iirnkiuy" 'or Discu&sion Purposes Gni-; -2- f Pensi on Plan The District maintains a I noncontributory defined benefit pension plan covering substantially all employees who have at least one year of service. It is the District's policy to fund pension cost:, a; accrued, and contributions for 1981 and 1980 amounted to $44,589 and $34,063, respectively. The present value of accumulated plan benefits and net assets available for these benefits was last determined as of December 31, 1980. The weighted average assumed rate of return used in determining the present value of accumulated plan benefits was 6; for both 1981 and 1 ■>8U. 1981 1900 Actuarial present value of accumulated plan benefits: Vested Nonvested S 54,108 $ 39,491 7,80> 4,817 $ 61,910 $ 44,308 I Net assets available for benefits Related Party Transactions $163,163 $114,740 A director of the District is also a stockholder and organizer of a bank with which the District conducts business. The District maintains a checking account with the bank, and has a loan in the form of the installment note payable (as described in Note 4). Luring 1981, the District also maintained a time deposit of $100,000 for 60 days at 15.371 interest with the bank. if <■ rjv- t ■3- I The District has collected and restn'ctively deposited funds for future uses as follows: December 31, 1981 I Dart Industries Water Agreement - the District has collected $40 per lot for future water source and storage facilities in the developers' project Dart Industries Water Services Settlement - the District has collected funds for anticipated future repairs of water lines constructed by Dart Industries Facilities fees collected from customers for future procurement of source and storage Portion of connection fees collected from customers for the future- purchase of water meters Other restricted funds- Loan principal and interest fund - in accordance with loan agree- ments, principal and interest payments are to be placed on deposit until payment is due- REA Sierra Pacific Power Company Promissory note proceeds - placed in trust to be used for specific water construction projects Martis Valley Substation restricted by the District to be used for completion of construction FMHA Revenue Note and Reserve Funds - water operating margins plus depreciation held in reserve in accordance with the loan agreement Consumer deposits and other "Tentative h ftr&Hminery ror D«6euS«M3n Purpose;; 6 Restricted Construction Funds Advances S 314,759 $314,759 180,096 190,696 62,036 73,871 10",756 110,817 $ b66,647 $690,143 21,580 20,804 8,367 262,536 245,807 93,332 SI,319,1)73 Sb'iL.Ui -4- I 4. Long-Term Debt REA bonds, secured by pledge of all assets, are as follows: I First series 2% bonds, payable in annual amounts varying from $13,000 to $14,000, in accordance with sinking fund requirements, balance of $14,000 due July 1994 Second series 2* bonds, payable in annual amounts varying from $3,000 to $5,000, in accordance with sinking fund requirements, balance of $6,000 due May 2002 Third series 2% bonds, net of undrawn funds of $65,426, payable in annual amounts varying from $3,000 to $6,000, in accordance with sinking fund requirements, balance of $8,000 due May 2004 Less - Current maturities Total REA bonds 1981 1980 $172,000 $1B5,00U 82,000 85,000 37,674 40,5/4 (19,000) (12,97't) $272,574 $297,596 The installment note payable is due in monthly installments through December 1, 1988. It was issued December 4, 19b1 at 11? interest per annum, with the interest rate to be adjusted annually on the announcing date of the note i ssuance. The note payable to Sierra Pacific Cower Company is due in semiannual installments, including interest, at a rate of 4.681. Final payment of $9,067 is due March, 1982. The net revenues (as defined) of the Donner Lake Electrc System are pledged as security. -5- I The sewer assessments are payable over a 20-year period, plus interest at 7;, to Nevada County, California. Final payment is due in 1990. 5- P^_l1'lajy_oni-_Rei_la5s_i f ied A.s Curr.lnA. The promissory note payable to the United States of America, Farmers' Home Administration Is due in 39 annual installments of principal and in teri'St of $14,800. The interest rate is 5" per annum. The net revenues (as defined) of the District's water system drv pledged security. The bonds payable to the United States of America, Farmers' Home Administration are due each October 1 as follows: Ycai Amoun t I 1982 1983 thruuqn 2003 2004 through 201 I 2014 through 201" 2019 through 1020 &.000 10,000 15,000 20,000 The interest rate is II per annum, payable semi- annually. The nit revenues (as defined) of the District's water system are pledged as security. The Indentures, which secure the promissory note and bonds, require the District to establish and maintain rates and charges to produce net revenues (as defined) equal to not less than 1.2 tiroes the aggregate amount of the principal and interest due within the next 12 months. In addition, they require the District to establish separate special accounting ■6- I funds. Since the promissory note and bonds were issued, the District has not met and fulfilled the requirements of certain Indenture covenants. In the event of a default, the holder of net less than 66-2/3'J of the aggregate principal amount shall be entitled, upon notice in ting to the District, to declare the principal (5514,272) due and payable immediately. I As a result of the District's failure to meet certain of the Indenture covenants, the total amount of these obligations has been classified as current liabilities in the financial statements. Conti ngenci es Dart Industries Water Agreej\ent_and Related Lawsuits In 1970, an agreement was signed between the District and Dart Industries for the purpose of providing water service to a Dart subdivision. The agreement required Dart to construct water source and storage facilities at Donner Lake. In December, 1975, subsequent to completion of the facilities, ownership was transferred to the District for future maintenance and operation. The Attorney General of the State of California has filed suit against the District and Dart to restrain thei from using Donner Lake as a water sourt Since this action claims no monetary damages, the District has no liability resulting from this action. In a separate action related to the Dart subdivision, a homeowners' group filed suit against Dart, claiming amounts in -7- ;» i excess of $100 million, and Dart, in turn, filed suit against the District and others, seeking indemnity for all such claims. The outcome and potential impact on the District cannot presently be determined. 7. Changes In Net Working Capital The changes in accounts classified as current assets and current liabilities are as follows: Year Ended December 31 I 1981 1980 Working capital increase (decrease) in- Cash $ 20,288 $(461,054) Receivables 36,302 59,565 Inventory (23,35b) (7,554) Other current assets (14,378) 17,450 Accounts payable (97,151) 131,677 Bonds (265,500) - Promissory Note 2,434 2,321 Deferred income 3,953 2,44> Consumer deposits (30,420) (14,340) Other current liabilities (9,155) (25,514) 5(3/6,982) $(295,007) y> I TRUCKEE-DONNER PUBLIC UTILITY DISTRICT Si \ COMBINING STATEMENT OF DEPARTMENTAL OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1981 I Total Eliminations Electric Water__ OPERATING REVENUE $4,413,870 $ 132,558 $3,961,941 $584,487 OPERATING EXPENSES: Purchased power $2,881,263 S $2,881,263 $ - Transmission 93,143 (120,300) - 213,443 Distribution 276,257 - 258,233 18,024 Consumer accounts 243,890 - 210,279 33,611 Administrative and general 424,844 (2,488) 306,971 120,361 Depreciation 144,160 - 100,903 43,257 Other 12,175 (9,770) 21,945 - $4,075,732 $(132,558) $3,779,594 $428,696 Net operating revenue $ 338,138 $ $ 182,347 $155,791 •r Pif-OM